American plays musical slots at Newark

Porter Airlines, United Airlines and Virgin America are waiting for the music to stop at Newark Liberty International airport

American Airlines is awaiting bankruptcy court approval to terminate its existing leases for 14 slots to Porter (four) and United (10) and lease them plus one additional slot to Virgin America for $10,000 per month each ahead of the California-based low-cost carrier’s launch of flights to the airport on 2 April. The schedules of Porter and Virgin hang in the balance.

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Flickr user PhillipC

If the deal is approved, Toronto-based Porter would lose two of its slot pairs that could prompt a 15% cut to its schedule of up to 13 flights per day to Newark.

If it is not approved, Virgin America would not gain the slots it needs to serve the airport with six daily flights from Los Angeles and San Francisco – routes that it already has on sale – and likely be forced to delay service.

“We have contingencies in place to continue operating the full schedule into and out of Newark pending the bankruptcy proceedings,” says Porter.

Virgin America declines to comment.

United, which operates a large hub from Newark, says that they anticipate little to no impact on their schedule from the proposed slot changes.

The whole situation is reminiscent of United agreeing to lease 18 slot pairs at the airport to Southwest Airlines in 2010 in order to gain US Department of Justice approval for its merger with Continental Airlines. More recently, JetBlue Airways paid $40 million and WestJet $17.6 million for eight pairs each at New York’s LaGuardia in December 2011.

American’s request to the bankruptcy court also includes a deal to return three of its six gates at Newark to the Port Authority of New York and New Jersey (PANYNJ), one of which would be subsequently leased to Virgin America.

With slots at such a premium at New York’s three airports it will be interesting to see how the judge rules on the transaction. A hearing is scheduled for 23 January in, fittingly, New York.

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