American’s Washington National slots auctioned in four bundles

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The slots that American Airlines is divesting at Ronald Reagan Washington National airport will be auctioned in four bundles, according to the Metropolitan Washington Airports Authority (MWAA).

The US Department of Justice (DOJ) has split the available 44 slot pairs into two bundles of 14 pairs, one bundle of 12 pairs and one bundle of four pairs, said MWAA chief operating officer Margaret McKeough in a presentation to the airport authority’s board on 14 January.

JetBlue Airways will retain eight slot pairs that it already leases from Fort Worth, Texas-based American.

The New York-based low-cost carrier and Southwest Airlines have expressed strong interest in the slots, which are earmarked for low-cost and non-incumbent carriers, and are expected to bid competitively. Alaska Airlines, Frontier Airlines, Spirit Airlines and Virgin America could also bid on the slots.

The slots are only available to US carriers, Air Canada chief financial officer Michael Rousseau said on 16 January. This eliminates competition from the Canadian flag carrier and its low-cost competitor WestJet, both of which could have bid on the pairs.

Airlines are understood to have already submitted bids to the DOJ for the slots, according to recent media reports.

American must divest the slot pairs under a settlement that it reached with the DOJ in exchange for approval of its merger with US Airways in November 2013.

The carriers closed their merger on 9 December 2013, creating the new American Airlines Group.

MWAA is concerned about increased crowds at Washington National following the slot divestments, says McKeough. The authority anticipates larger aircraft operations and additional passenger activity as a result of new services by the carriers that win the auction for the slot pairs.

“The increase in passengers at Reagan National is being driven largely by regulatory decisions that have prompted some airlines to switch flights from Dulles to Reagan,” says Jack Potter, president and chief executive of MWAA, in a statement. “This is putting significant strain on Reagan’s facilities and continues to negatively impact the number of domestic passengers at Dulles.”

Passenger traffic was up 4.2% to 20.3 million at National and down 3% to 22 million at Washington Dulles International airport during the year ending 31 November 2013, MWAA data shows.

McKeough says that Washington National has historically maintained passenger traffic levels between 15 million and 16 million per year.

American will divest five gates – gates 24, 26, 28, 30 and 32 – on the centre pier at Washington National, according to her presentation.