JetBlue to actively bid for Washington slots if AMR-US divests

Washington DC
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JetBlue Airways plans to actively bid for any slots that are divested at Washington National airport should a proposed settlement from US Airways and American Airlines offer to give them up.

Reports emerged yesterday that US Airways and American, whose merger was blocked by the US Department of Justice in a lawsuit, could offer to give up slots at the US capital's airport as part of a settlement. The two carriers and the DOJ have agreed to talks with a mediator ahead of a 25 November trial start date for the lawsuit.

JetBlue has repeatedly called for the combined carrier to give up slots if they merge, and the two airlines' dominance at Washington National was cited as a reason in the DOJ's lawsuit to block the merger. Before the DOJ challenge, US Airways and American executives said they had no plans to divest slots. The DOJ's suit said both US Airways and American Airlines would control 69% of the slots at the airport, and that this could result in fare increases.

"Surprise, surprise," JetBlue's chief executive Dave Barger says today when asked for comments on the possible settlement American and US Airways could offer. "We've been adamant well before that airlines need to have access to our nation's capital.... and suddenly, it's part of the settlement."

"We will be active in that process," Barger says, when asked if JetBlue will compete for slots that are potentially divested. The carrier paid $40 million for eight slot pairs at Washington National in 2011 when they were divested as part of a slot swap between US Airways and Delta Air Lines.

Barger says the 2011 investment underscores JetBlue's desire to secure more slots at the airport, adding that it can provide more competition on some routes that would lead to higher traffic and lower fares. He cites JetBlue's increased service on the Washington National-Boston route, which US Airways also operates on. JetBlue bumped up flight frequencies on the route in June 2012, using the slots it paid for.

Average industry fares were down 31% and traffic was up 93% on the route after JetBlue boosted its flight frequency, says Barger.