US Airways, Delta table new slot swap plan for NY/DC

Philadelphia
Source:
This story is sourced from Pro
See more Pro news »

US Airways and Delta Air Lines have inked a proposed new slot swap agreement at New York LaGuardia and Washington National in hopes of moving the scheme forward.

With this new agreement, which is subject to certain government and regulatory approvals, US Airways would transfer 132 slots at LaGuardia to Delta, while Delta would transfer 42 pairs at National. Additionally, Delta would pay $66.5 million in cash to US Airways.

This new pact "reinforces our commitment to increasing service and options for our customers" in National and the carrier's hubs in Charlotte, Philadelphia and Phoenix, said US Airways president Scott Kirby in a message to employees.

"And after this transaction is completed, 99% of our service will originate or end in one of our three hubs, our focus city at [National] or the Shuttle."

Kirby believes the agreement "is well-suited for regulatory approval".

In 2009 US Airways proposed transferring 125 of its US Airways Express slots at LaGuardia to Delta while Delta agreed to cede 42 slots pairs at National to US Airways. However, the DOT said it would require the carriers to divest 14 slots at National and 20 slots at LaGuardia if they wanted to get the deal done. A subsequent proposal from US Airways and Delta that entailed fewer divestitures was rejected.

Kirby points out that the landscape has changed in the last two years. "New entrants and smaller carriers, including AirTran Airways, JetBlue Airways and Southwest Airlines, have gained considerable access to slots at both LaGuardia and National and expanded service at these and other airports in the New York and Washington regions," he said.

"Also, mergers between United Airlines and Continental Airlines and Southwest and AirTran have dramatically sharpened competition on the East Coast generally and particularly in the New York and Washington regions."

Additionally, said Kirby, to address concerns previously raised by the DOT, the new agreement reached with Delta provides for the divestiture of up to 16 slot pairs at LaGuardia and eight at National by Delta if required by the regulatory authorities.

The deal would also see US Airways acquire additional international rights from Delta to operate daily service at Sao Paulo, Brazil in 2015.

Unlike the originally announced transaction, US Airways would no longer acquire rights to begin service to Tokyo.

"As a result of the Open Skies agreement signed between the US and Japan, which erased limits on flights and opened up a second Tokyo airport to US service, we believe we will gain access to Tokyo slots on our own and did not feel it was necessary to include in this agreement," said Kirby.

"Any future planned service to Tokyo is still a number of years off and would be contingent upon a number of factors, including economic conditions and delivery of additional wide-body aircraft."