American Airlines closed its sale of 120 slots at New York LaGuardia and Ronald Reagan Washington National airport to JetBlue Airways, Southwest Airlines and Virgin America for $381 million on 10 March.
The deal brought in $156 million more than the $225 million that the slots were appraised at, says American chief executive Doug Parker at the JP Morgan Aviation, Transportation & Industrials conference in New York.
“We want to thank our friends at the Department of Justice [DOJ] for facilitating,” he says, half jokingly.
The slot divestitures were mandated by the DOJ as a condition for approval of American’s merger with US Airways, which closed in December 2013. The regulator initially opposed the deal.
Not included in Parker’s sale numbers are the eight slot pairs at Washington National that American swapped with JetBlue for 12 pairs at New York JFK in February. The New York-based low-cost carrier already leased the eight pairs at National, which were part of the DOJ mandated divestitures.
At Washington National, JetBlue bought 12 slot pairs, Southwest 27 and Virgin America four in the auction.
At LaGuardia, Southwest bought 11 slot pairs – it already leased five – and Virgin America six in the auction.
The value of each carrier’s bid and of the individual pairs at each airport has yet to be disclosed.
The DOJ values the deal at more than $425 million, however, this includes the slots at Washington National that American swapped with JetBlue for slots at JFK.
“It’s their number, not ours,” says Parker on the regulator’s valuation.