DALLAS — Forty years after its first commercial flight landed from Little Rock, Ark., Dallas Fort Worth International Airport is recognized as an unrivaled economic engine for North Texas and a model for the "aerotropolis" of the future.
But the nation's second-largest airport might never have taken off if not for a group of financial advisors, attorneys and bankers willing to bluff the major airlines into moving from Dallas Love Field.
That's how Ray Hutchison, senior counsel at the firm of Bracewell & Giuliani, remembers the machinations required to get the new airport off the ground.
"The big challenge was to persuade the Love Field carriers to move," Hutchison recalled. "They took the position that we could not finance DFW because they (the proposed airport) had no carriers."
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To convince them otherwise, legendary Texas businessman William C. "Decker" Jackson, Jr., founder of First Southwest Co., lined up local bankers willing to invest in $35 million of unrated airport revenue bonds backed by income from Love Field, Fort Worth's Meacham Field and other small airports, Hutchison said.
"That scared the airlines and that convinced them that we would be able to finance the new airport," Hutchison said.
Since the original $35 million bond deal, Dallas and Fort Worth have done 93 airport bond transactions worth $14.6 billion, according to airport spokesman David Magaña. That figure includes new money, refunding and special facility debt.
Hutchison, who still has one of the original 1968 bonds bearing a coupon rate of 4.34%, remembers Decker Jackson as "an absolutely brilliant mind. He was the one who said we'll call the airlines' bluff, and it worked."
Hutchison, whose status in Texas public finance and politics is also legendary, would later win a seat in Congress, head the Republican Party in Texas and almost win election as the first Republican governor since Reconstruction. After Texas began to shift more into the Republican column, he helped his wife, Kay Bailey Hutchison, win election to the U.S. Senate.
As bond counsel with Vinson & Elkins, Hutchison was instrumental in developing the Dallas Area Rapid Transit light rail system, another major regional bond issuer. With V&E's public finance team - which moved to Bracewell & Giuliani in 2012 -- he guided Parkland Hospital's efforts to finance a new $1 billion hospital during the worst economic downturn since the Great Depression.
Ron Kirk, a former mayor of Dallas and former partner at V&E, once said that DFW Airport should be named Ray Hutchison International Airport because of his role in launching it.
Hutchison, 81, has been working with DFW ever since he was retained by the cities of Dallas and Fort Worth to find a way to create a governing board for the proposed airport.
While Fort Worth had long proposed a joint airport and had actually built one just a stone's throw from the current DFW Airport, Dallas had refused to give up on Love Field, which had no room to grow by the early 1960s.
In 1964, the federal government, refusing to invest in two separate airports, ordered the two cities to combine their resources in a mutually agreeable location.
Hutchison, hired in 1965 to resolve conflicts over the issue, decided that a state constitutional amendment would be required and that voters in Dallas and Fort Worth would need to authorize the joint board. The proposal passed in Fort Worth but failed in Dallas by 2,500 votes.
To bypass the voters, the Dallas City Council, led by mayor Erik Jonsson, appointed members to a joint airport board, as Fort Worth did the same, Hutchison said.
"What Jonsson didn't say was that it was a temporary board," Hutchison said. "And it still is, because they were expecting to have an election the next year. But they never did."
The mayor of Fort Worth had to be convinced to sign the agreement as he was being wheeled into surgery at John Peter Smith Hospital, Hutchison said.
"The mayor was on a gurney, and he said, 'I'm not going to sign anything with the city of Dallas,'" Hutchison said. "And the city attorney told him: 'You're going to sign it or I'll have a lawsuit filed against you by the time you're out of surgery.' So, he signed it."
Another reason the major carriers at Love Field balked at the move to the new airport was the fact that one small airline that operated only in Texas refused to make the switch. The upstart airline was Southwest, which has since grown into one of the nation's major airlines, with its national headquarters at Love Field.
"Both Love Field and Fort Worth's Great Southwest Airport were supposed to close," Hutchison said.
Southwest's refusal to leave Love Field set off more than 40 years of lawsuits and political maneuvers, including the 1979 Wright Amendment sponsored by then U.S. Rep. Jim Wright, D-Fort Worth, limiting flights from Love Field to Texas and adjoining states. That was considered sufficient protection for DFW's long-haul carriers, primarily Braniff, Delta and American Airlines.
Braniff, which had operated since its beginning in 1930 under federal regulation, survived only four years after the airlines were deregulated in 1978. For DFW Airport, the bankruptcy and liquidation of Dallas-headquartered Braniff were major blows.
New York-based American Airlines, Braniff's fiercest competitor, moved its headquarters to its original home of Fort Worth, just outside the southern entrance to DFW Airport, in 1979. American developed its hub-and-spoke system at the new airport in 1981, creating a stranglehold that eventually forcing Delta to abandon its DFW hub in 2005.
DFW became what would be known as a "fortress hub" of American as Southwest continued to operate at Love Field, growing into a national carrier offering discount fares.
This year marks the end of the Wright Amendment under an agreement between the airlines and the two cities. At Love Field, Southwest Airlines has billboards counting down to Oct. 13, when it will be allowed to fly from Love to anywhere in the country.
The airline is financing a $500 million remodeling of the Love Field terminal that is scheduled for completion in time for the unrestricted flights.
For DFW, the survival of Love Field is more of an irritant than a threat. Love Field's 20 gates, reduced under the agreement that lifted the Wright Amendment, are less than one-eighth of DFW's 175 gates at five terminals. The original design of DFW allows for the construction of up to 13 terminals.
DFW is the prototype of an "aerotropolis," an airport city through which travelers and cargo can connect or transact business with little or no contact with the surrounding communities.
DFW served as the model for Denver International Airport, which supplanted DFW as the nation's largest in physical size.
In building DIA, Denver made certain that the city's Stapleton Airport would close, citing the decades of legal battles DFW faced over Love Field.
DFW blazed a trail with its airport hotel, and this year will connect to the Dallas Area Rapid Transit's light rail line at Terminal A for the first time. DFW also provided a model for regional government in the DFW Metroplex, leading to major bond issuers such as DART, the North Texas Tollway Authority and the North Central Texas Council of Governments.
DFW is one of nine airports in the world with service to more than 200 destinations. This year, with American Airlines out of bankruptcy under the protection of its merger partner US Airways, it will add flights to Shanghai and Hong Kong.
Over the past three years, DFW has added 10 new airlines and 20 international destinations, marking what airport officials call the most successful period of air service expansion since DFW opened.
In the meantime, a $2.3 billion remodeling of DFW's four original terminals, the latest in a series of multi-billion bond deals continues through 2017. Terminal A, which serves as the connection point to light rail, will be the first to be completely remodeled, with a new parking garage added.
"With all the projects over the last two or three years, they essentially will have a brand new airport built in place," said Mike Bartolotta, vice chairman of FirstSouthwest, the financial advisor and broker-dealer firm that has grown with the airport to be the perennial top-ranked in the region.
"It's been a great long-term relationship," Bartolotta said. "We've worked with DFW staff from start to finish over a 40-year-period through thick and thin."
Hutchison said the seemingly impossible challenges of maneuvering the cities, the airlines and the public into a commitment to build DFW was an exciting time for him as an attorney in his early 30's.
"It was fun," he said. "You had to come up with new ideas every day."
