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Upstart Virgin America fighting onetime underdog Southwest over expansion at Dallas airport

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DALLAS - Virgin America has enlisted its brightest star, British billionaire Richard Branson, to help wage its campaign for space at a Dallas airport.

Branson interrupted a spell of rest and recreation in the British Virgin Islands to fly to Dallas and try to help Virgin America overcome opposition to its plans from Southwest Airlines.

Virgin America, an upstart that sells itself as cool, wants two gates that American Airlines must surrender at Love Field near downtown Dallas. To get them, it's nipping at the heels of Southwest, which started as a scrappy little airline at Love Field more than 40 years ago and built its brand on the idea that an airline could have a fun personality. It now carries more U.S. passengers than any airline.

Branson headlined a huge Cinco de Mayo rally and party Monday night at a downtown restaurant-bar. He praised Southwest's underdog legacy but added, "They're no longer the David; they are the Goliath, and sometimes the Goliath needs a little bit of competition."

Then the 63-year-old tycoon downed a shot of tequila and fell from the stage to surf above the crowd of revelers, who held him aloft for a few seconds before setting him on the ground.

The Love Field fight goes back to last year, when American Airlines agreed to surrender two gates there as part of a settlement of a government antitrust lawsuit. Virgin America, of which Branson's Virgin Group is a minority owner, has the support of the U.S. Justice Department in its quest for those gates.

Southwest Airlines Co. and Delta Air Lines Inc. want the gates too. While Delta is a long shot, Southwest is making a hard push with officials of the city, which owns Love Field. Southwest, which already controls most of the gates at Love Field, is based in Dallas and is one of the city's biggest taxpayers. The city council is scheduled to consider the issue Wednesday.

The main arguments:

— Virgin America and the Justice Department say only Virgin can provide new competition at Love Field.

— Southwest says it needs to expand at Love Field to compete with American Airlines, the dominant carrier at nearby and much bigger Dallas-Fort Worth International Airport. Both airports are part of the same local market, Southwest says.

Each side trots out studies and statistics showing that if it wins, Dallas travellers will enjoy lower fares. Both plan to add new destinations when federal restrictions on long flights from Love Field expire in October.

The two differ greatly, however, in their tactics. While Branson partied and did media rounds, Southwest took a low-key approach and declined to make an executive available for an interview.

Quizzed by reporters last week, Southwest CEO Gary Kelly said the city — not the Justice Department — should decide the fate of the gates. If Southwest wins, he said, "that is what's best for the city; we think that is what's best for the travelling public."

Virgin America flies from Los Angeles and San Francisco to Dallas-Fort Worth airport a few times a day, but it wants to move those flights to Love Field. If it wins, it would add flights to New York and Washington in October and Chicago next year. CEO David Cush said Virgin's proposed new flights could compete with Southwest at Love Field but not with bigger American at Dallas-Fort Worth. Branson's crowd-surfing was the kind of publicity stunt that might have been done a generation ago by Herb Kelleher, Southwest's colorful co-founder. Kelleher once settled a legal dispute by arm-wrestling another airline's leader for the rights to an advertising slogan that both were using.

If the fight between Virgin America and Southwest ends up in lawsuits, Branson said in an interview, "maybe arm-wrestling will have to come back."

___

Contact David Koenig at http://www.twitter.com/airlinewriter

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