In the late 1970s, Congress passed the Wright Amendment to encourage the development of Dallas/Fort Worth Airport by restricting a nearby airport, Love Field, to servicing final destinations only in Texas and four contiguous states. Over time, pressure began mounting to “Free Love Field” and allow more interstate air travel. Love Terminal Partners (“LTP”) owned a lease of 26.8 acres of Love Field that gave it access to the runways and the ability to offer air passenger service. In 2000, LTP built a six-gate terminal on its acreage near Lemmon Avenue. Although it could not operate profitably due to the Wright Amendment, LTP invested tens of millions of dollars in this terminal on the reasonable view that that the restrictions would eventually be lifted and cause the terminal’s value to increase significantly.
But in 2006, five interested parties—Dallas (which owned Love Field), Fort Worth, Southwest Airlines, American Airlines, and the Dallas-Fort Worth Airport Authority—joined with the federal government to rewrite the Wright Amendment and wipe out LTP as a viable competitor. Under their “Five Party Agreement,” the parties sought to reduce the total number of gates at Love Field, six of which would be removed from the Lemmon Avenue terminal. Dallas also agreed to acquire and demolish LTP’s terminal. This arrangement was codified in federal law through the Wright Amendment Reform Act (“WARA”), after which LTP stopped paying rent and the City of Dallas evicted the company and demolished its terminal.
Read more at https://www.cato.org/blog/government-cant-team-competitors-deny-you-just-compensation
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