Delta and US Airways propose modified slot deal at LaGuardia and National

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Delta and US Airways have agreed to transfer 12% of takeoff and landing slots in a proposed slot swap at New York LaGuardia and Washington National Airports to four low cost carriers - AirTran, JetBlue, Spirit and WestJet.

In August of 2009 the two carriers announced a strategic swap that entailed US Airways agreeing to transfer 125 pairs of its Express slots at New York's LaGuardia airport to Delta, which would result in Delta transitioning the airport into a hub. In turn, Delta agreed to transfer 42 pairs of its slots at Washington National airport to US Airways.

US regulators in February of this year issued a tentative approval that required the carriers to divest 14 slots at Washington National and 20 slots at LaGuardia to incumbent or new entrant carriers to strengthen competition at the airports to offset potential harm caused by the proposed transaction.

DOT in its tentative approval said that AirTran and Spirit would qualify for slots at Washington National while AirTran, JetBlue, Spirit and Southwest would be eligible for divested slots at LaGuardia.

Southwest, who has expressed an interest in gaining additional slots at LaGuardia, was notably absent from the candidates Delta and US Airways suggested to DOT.

Delta says it has concluded agreements with AirTran, Spirit and WestJet to transfer up to five pairs of roundtrip slots to each carrier, while US Airways has agreed to handover five pairs of roundtrip slots to JetBlue.

"Each of these airlines have limited or no service at New York LaGuardia or Washington Reagan National airports and meet the FAA's goals to enhance access for airlines with fewer than five percent of the slots in these key markets," says US Airways president Scott Kirby in an update to employees.

"While we believe the FAA's ruling forcing us to give up slots is legally questionable, litigation is very costly and time-consuming. This move would improve our stability over the long term and would accelerate our path back to sustained profitability," Kirby adds.

Additionally, if regulators approve the proposal offered by US Airways and Delta, US Airways would retain access to Sao Paulo, Brazil and Tokyo Narita airport. Delta granted those international rights to US Airways in the original deal announced late last year.

Previously, US Airways has expressed an interest in launching Charlotte-Sao Paulo flights during the second half of 2010.