Making DC’s National Airport More “National”

Recently I looked up the cost of nonstop flights from Seattle to Washington, D.C.’s two airports. To Dulles International (IAD), there were seven flights a day — by United Airlines, Alaska Airlines, and Delta Airlines. Round-trip economy seats were priced between $411 and $513, most of them at $415 or less. To Reagan National (DCA), there were two nonstop flights, both by Alaska. An economy seat on Alaska’s flight arriving at 10 p.m. cost $898. On its flight arriving at 4:45 p.m. a seat cost $998.

You could fly to National for hundreds of dollars less if you accept a layover in Chicago, Detroit, Boston, Newark, Charlotte, or Atlanta. There were plenty of flights from SeaTac to National — but for a nonstop flight, you had to pay up.

This premium pricing is the result of a federal law that applies only to Washington, D.C.’s two airports. The law grossly favors cities of the East over the West. A lobbying effort is now underway to poke some holes in this law, to the benefit of Western cities, including Seattle. The proposal would affect United, Delta, and Alaska differently, and would affect the competitive rates at Sea-Tac between Alaska and Delta.

You might ask why Congress is setting a rule for Reagan National that it imposes nowhere else in the country. It’s because Reagan National and Dulles International are both owned by the federal government. National was opened in 1941 in Arlington, Virginia, a scant five  miles from downtown Washington. National has three runways. Dulles was opened in 1962. It has four runways and many more gates, but is in Loudon County, Virginia, 27 miles out.

The aim of the Perimeter Rule was to support Dulles by requiring long-distance flights to land there. The rule was imposed in 1966, four years after Dulles opened. It limited National to domestic flights of no greater than 650 miles. Over the years, cities beyond the line pushed to loosen the rule. In 1981, the perimeter was extended to 1,000 miles, and in 1986, to 1,250 miles — roughly comprising the eastern half of the country.

In the years since, Western cities have won exceptions for 20 “beyond-the-perimeter slots.” In 2002 and 2004, when Alaska Airlines was given the only two that Seattle has, it put out press releases thanking Senators Maria Cantwell and Patty Murray, Sen. Ted Stevens of Alaska, and Washington Gov. Gary Locke. Not every Western city was so well-connected. Salt Lake City still has only one nonstop daily flight to National, and San Diego has none. In Texas, San Antonio, which is outside the perimeter, has none, though Houston, inside the perimeter, has six.

Now comes a push for more flights. U.S. Representatives Hank Johnson, D-Georgia, and Burgess Owens, R-Utah, are sponsoring the Direct Capital Access Act as part of the 5-year reauthorization of the Federal Aviation Administration. The bill would allow 28 more flights out of National, with at least three each for the eight airlines now there. Leading the push for the bill is a group called the Capital Access Alliance, which is helped by the Strategies 360 consulting firm and backed by Delta Airlines.

The Alliance’s argument, backed by a study from the Boston Consulting Group, is that there is no longer a reason for a Perimeter Rule. Back in 1966, all slots at all commercial airports were regulated by the federal government. That regime was ended in the 1980s, freeing air travel to expand many times over. Reagan National has expanded. And after 60 years of operation, Dulles is no longer out in the sticks. It is a centerpiece of Loudoun County, which now has the highest median household income of any county in the United States — $147,111 vs. $99,158 for King County (the 52^nd wealthiest). In the past year, Dulles has finally been connected to the capital’s Metro heavy-rail system, ending an advantage long enjoyed by National.

Why keep the Perimeter Rule at all? “Political reality,” says Alliance spokesman Brian Walsh. Any change has to pass Congress. “This is not going to pass just by members from the West,” he says.

For Seattle, the inducement is more nonstop service. If the bill passes, it is likely that Delta will begin direct flights from Sea-Tac to Reagan National, shifting the competitive relationship between Alaska and Delta, Sea-Tac’s top two carriers.

Delta released the prepared statement: “Delta supports strengthening consumer choice, affordability and efficiency for those who visit or have business in America’s Capital region. The unintentional consequences of the federal perimeter rule are costing customers time and money, while hurting businesses in Western states and the Capital region. It is our hope that Congress will closely examine this issue in the upcoming FAA Reauthorization bill debate and work in a bipartisan manner to modernize the outdated perimeter rule to meet the needs of a 21^st Century economy.”

United Airlines would get new slots at Reagan National from the bill, and United provides more service than any other domestic airline at Dulles. It opposes adding any beyond-the-perimeter flights to Reagan National. Already, United says, growth at National has “produced serious problems” with traffic congestion, parking, and baggage handling there, and has slowed growth at Dulles.

Alaska Airlines would also get new slots at Reagan National from the bill, but would likely lose its position as the monopoly provider of nonstop flights from Seattle. Alaska, locked in a competitive battle with Delta, did not respond to requests for comment.