US/DL LGA/DCA Slot Swap Deal

[a320av8r]

http://www.dailyfinance.com/rtn/pr/delta-air-lines-us-airways-announce-agreement-with-four-airlines-for-transfer-of-takeoff-landing-rights-at-new-york-s-laguardia-washington-s-reagan-national-airports/rfid311615606/?channel=pf

 

[back2CLT]

http://www.dailyfinance.com/rtn/pr/delta-air-lines-us-airways-announce-agreement-with-four-airlines-for-transfer-of-takeoff-landing-rights-at-new-york-s-laguardia-washington-s-reagan-national-airports/rfid311615606/?channel=pf

I'm glad to see SW gets nothing....interesting that US is giving up their slots to JetBlue....while they are rivals, there is some Star Alliance incestuality there...though interestingly JetBlue can now compete directly with the Shuttle.

Hopefully this gets approved and we can see CLT-GRU non stop.

 

[smoot4208]

I'm glad to see SW gets nothing....interesting that US is giving up their slots to JetBlue....while they are rivals, there is some Star Alliance incestuality there...though interestingly JetBlue can now compete directly with the Shuttle.

Hopefully this gets approved and we can see CLT-GRU non stop.

Yes I am very hopeful that this gets approved. This also gets the support of every LCC possible except WN. Im sure B6 will only fly to Florida out of there. They obviously were competing against WN for these slots and I believe WN would have used them to MDW which would have been a nightmare for US but Im sure B6 promised to use the slots to MCO and FLL.

 

[BoeingBoy]

Hopefully this gets approved.

That's the $64 million question. Will only giving up 15 slot pairs to domestic competition at LGA (WestJet will almost certainly only fly to Canada) and 5 pairs at DCA, instead of the 40+ at LGA and 14 at DCA) satisfy the Feds or not? If I was forced to guess, I'd guess that the Feds won't be satisfied.

Jim

 

[smoot4208]

That's the $64 million question. Will only giving up 15 slot pairs to domestic competition at LGA (WestJet will almost certainly only fly to Canada) and 5 pairs at DCA, instead of the 40+ at LGA and 14 at DCA) satisfy the Feds or not? If I was forced to guess, I'd guess that the Feds won't be satisfied.

Jim

I think the Feds know that this is the best deal that they are going to get. US/DL have the upper hand. So its either you get minimal LCC presence in LGA/DCA or you get none.

 

[JayBrian]

Would these slots be given away or would there be some payment involved?

 

[a320av8r]

Would these slots be given away or would there be some payment involved?

They will be purchased.

 

[smoot4208]

Would these slots be given away or would there be some payment involved?

Most likely they would be sold for money, but probably for much less than they are worth in exchange for the LCCs to go along with the deal

 

[FWAAA]

That's the $64 million question. Will only giving up 15 slot pairs to domestic competition at LGA (WestJet will almost certainly only fly to Canada) and 5 pairs at DCA, instead of the 40+ at LGA and 14 at DCA) satisfy the Feds or not? If I was forced to guess, I'd guess that the Feds won't be satisfied.

Jim

I agree that the feds are unlikely to think this is enough. Southwest is already screaming bloody murder. Would be interesting to see if the agreements prohibit the airlines from selling the slots to WN.

 

[FutureUScapt]

I agree that the feds are unlikely to think this is enough. Southwest is already screaming bloody murder. Would be interesting to see if the agreements prohibit the airlines from selling the slots to WN.

Those "other" airlines want access to DCA/LGA - why would they turn around and sell them to WN? WN is now fighting this battle alone since B6/FL/NK/WS have already given their seal of approval to the new deal.

The original DOT ruling was absurd by all accounts; US/DL in turn went back and proposed a more sensible solution that still allows LCCs some additional access into DCA and LGA. To that point, here's a quote from Kirby today effectively saying "take it or leave it"

"We expect the FAA to respond to our new proposal in the next few months. Should the FAA decide to not approve this new agreement, we will not press forward with the transaction, which could result in both LGA and DCA losing prime opportunities for expanded competition and growth."

I guess we shall see how this all winds up in the coming month(s).

 

[Dog Wonder]

I think the Feds know that this is the best deal that they are going to get. US/DL have the upper hand.

How do US/DL have the upper hand on the feds?

 

[FWAAA]

The original DOT ruling was absurd by all accounts; US/DL in turn went back and proposed a more sensible solution that still allows LCCs some additional access into DCA and LGA. To that point, here's a quote from Kirby today effectively saying "take it or leave it"

Depends on one's vantage point, I guess. From mine, the intial deal was "absurd by all accounts." It was little more than an agreement to allocate markets - "you take LGA, we'll take DCA."

 

[FutureUScapt]

How do US/DL have the upper hand on the feds?

Perhaps, "upper hand" isn't the right term but the DOT will look VERY BAD in the eyes of most if they reject they deal. They will be spurning low cost competition in general in DCA/LGA (B6/FL/NK/WS all approve of the deal) and the small sized communities (i.e. TLH, ITH, etc) that would benefit from this deal. It will become blatantly obvious that they only care about WN if said agreement is rejected.

Depends on one's vantage point, I guess. From mine, the intial deal was "absurd by all accounts." It was little more than an agreement to allocate markets - "you take LGA, we'll take DCA."

I suppose so, but it's rather telling that the DOJ had no qualms about it.

 

[smoot4208]

How do US/DL have the upper hand on the feds?

Basically if they want LCC competition in the two markets they will accept the deal that US/DL is offering. Otherwise there will be NO LCC competition at DCA in the near future

 

[US1YFARE]

I think the Feds know that this is the best deal that they are going to get. US/DL have the upper hand. So its either you get minimal LCC presence in LGA/DCA or you get none.

yeah, they have the government over a barrel because US is doing this out of the kindness of their heart to allow LCC competition in.