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Justice Dept.’s Letter to Dallas: It’s Settled. Virgin Gets the Love Field Gates

The letter that the Justice Department sent to the city manager and the city attorney yesterday is pretty definitive:

Having considered the proposals of Delta Airlines, Southwest Airlines, and Virgin America for the Love Field gates, we have concluded that divestiture to Virgin America, which has no existing presence at Love Field and will introduce a new competitor at that airport, accomplishes the goal of the Final Judgment. The other two proposed acquirers do not. Delta, a legacy carrier, is not an appropriate divestiture candidate for reasons the Antitrust Division has explained in its filings with the Court. We rejected the proposal by Southwest given its already significant presence at Love Field, an airport that is gate constrained pursuant to law. Southwest already controls 16 of the 20 Love Field gates. If it obtained the two American gates, it would then dominate 90% of Love Field gates, thereby denying consumers the benefits of meaningful competition at this facilities-constrained airport. We would also reject a proposal from the City of either of these two acquirers.

So the City Council can talk about it all they want tomorrow, but the matter appears settled.