Anatomy of slot swap

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Delta and US Airways are still digesting a decision by DOT to require the divestment of a portion of slots they want to swap at Washington National and LaGuardia airports.

They claim that if DOT succeeds in its effort for the divestiture of 14 slots at National and 20 at LaGuardia, they'll walk away from the deal.  US Airways wants to transfer 125 of its Express slots at LaGuardia to Delta, while Delta aims to give US Airways 42 slots at National.

They argue by DOT essentially wants them to divest 16% of the slots involved in their proposed swap at LaGuardia.

US Airways was banking on getting some cost savings in the deal, which now resides in a delicate state.

Here's how carrier executives outlined the potential savings during a recent earnings discussion --

"We believe in the back half of the year to have some significant savings in airport rents due to the announced transaction ....to get out of a lot of the facilities in the LaGuardia situation and not need a lot of facilities at DCA [National].....facilities in LaGuardia are among the most expensive."

US Airways execs also say the deal allows for the overall aircraft gauge to rise since the carrier currently operates a lot of high-casm turboprops into LaGuardia.

Although previously US Airways management estimated the swap could drive $75 million in profits, carrier Chief Doug Parker said in the carrier's recent earnings call not to mdoel that in 2010 guidance due to the transition necessary to complete the swap.

So that's just a bit of what is going into the evaluation that both carriers are applying to DOT's tentative request. Can they convince DOT to change its mind?  We at least have to wait until the 30 comment period ends until we find out.