Gates

When economic deregulation of the airlines was suddenly decreed by the federal government in 1978, America’s commercial airports were poorly equipped or organized to service the new air transportation system. The relationship between the airlines and the airports they served was basically oriented toward airline control; airports were mostly junior partners that more or less accepted whatever the airlines dictated.

The decision to serve any particular airport, as well as the identity of the airline(s) to serve the airport, was in the first instance dictated by the CAB. When a community and its airport found itself fortunate enough to be designated by the CAB, it usually went out of its way to accommodate the airlines designated to serve it. This included the nature of contractual relation­ships between airports and airlines that governed gates, baggage areas, ticket counters, and ground support facilities. Both the airlines and the own­ers of the airports preferred reliable, long-term arrangements.

Exclusive, long-term gate leases restrict entry by new airlines at airports. A GAO survey in 1990,10 12 years after deregulation, revealed that at the 66 largest airports in the United States, 85 percent of their gates were leased to estab­lished airlines under long-term and exclusive – use arrangements. Most seriously affected were Charlotte-USAir, Cincinnati-Delta, Detroit – Northwest, Minneapolis-Northwest, Newark- Continental, and Pittsburgh-USAir. This greatly contributed to the creation of fortress hubs, one characteristic of which is the limiting or exclusion of competition from the market. In 1995, at all of these airports, with the exception of Newark, one carrier accounted for over 75 percent of all passen­ger enplanements.

New startups were often denied access to these airports, although incumbent airlines would sometimes sublease gates to entrant air­lines. These arrangements often carried with them inequities to the new airline, such as being required to utilize the ground personnel of the lessor airline, usually at increased cost and diminished efficiency to the leasing airline. Occasionally, such subleases require that the entrant airline’s aircraft be maintained by the les­sor airline. Oftentimes, the duration of the sub­lease was also quite short.

Congress, in the year 2000, set about to correct some of these inequities in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21), to be further dis­cussed in Chapter 33.