War Of Words Over Dca Slot Expemtions

[motnot]

It's funny to watch the airlines take shots at each other over their DCA applications. And AWA is certainly able to dish it out. The airline's latest response addresses other airlines' statements about AWA.

http://dmses.dot.gov/docimages/pdf89/269440_web.pdf

BTW, I expect a decision to be made over these slot exemptions in the next month, just judging from previous awards by the DOT. For those who are interested, going back and finding the airlines' applications makes for good reading material (at least as far as this industry is concerned). IMO, AWA's application made the right arguments.

To find them, you have to look at http://dms.dot.gov, find Docket 7181, and go from there.

 

[ITRADE]

I've always been amused by the filings for various slot allocations, beyond-perimeter exemptions, etc.

One of the more comical ones was the recent round of filings relating to Corporate Airlines' plans to fly to ILM. The allocation was temporarily yanked and given to US Airways. US then applied for permanent allocation of the slots and you should have seen the howls from Corporate, AirTran, and Comair.

AirTran wanted to fly to Akron; Comair wanted to fly to Cincinnati; Corporate was pleading with DOT that it could actually fly a plane. Everybody was submitting "mine is better and bigger" applications and it was all very funny.

In the end, US won out. I think.

 

[ITRADE]

Anyhow, here's my call on the slots:

AQ might get 1 to SNA.
UA would get 2 to SFO.
AS would get 2 to LAX.
US might get 1 to SJU.

 

[motnot]

I see two possible scenarios.

If the DOT decides LAX and SFO merit non-stop DCA service, which really goes against the intent of the legislation, then I expect:

AWA 2x DCA-LAX
AWA or UAL 2x DCA-SFO
ALK 1x DCA-SEA
FRNT 1x DCA-DEN

If the DOT ignores the calls for LAX and SFO service, then here's my guess:

ALK 1x DCA-SEA
FRNT 1x DCA-DEN
AWA 2x DCA-PHX
AWA 1x DCA-LAS
DAL 1x DCA-SLC
(In this scenario, Aloha has a chance of getting 1x SNA-DCA, probably in lieu of one of the PHX trips, or maybe the SLC trip.)

ITRADE, obviously you don't think AWA is a strong candidate, but I believe AWA's application was most in line with the legislation behind the slot exemptions. And it probably can't hurt that the federal government owns warrants for a third of AWA.

 

[ITRADE]

There were several sets of rationale behind the legislation. The one that you're clearly basing your support upon is the notion that low fare carriers gain access. That is true, but that is only one of the criteria. And, to that end, America West has already gained access to the DCA market - as has F9.

Other criteria include connectivity and opening up destinations that create single stop connections to the DCA airport.

HP's only intra-west coast service from either LAX or SFO are flights to the hubs LAS and PHX. That certainly does not open up connectivity.

Compare that to UA's SFO/LAX operations which would allow connections to about 20 west coast cities and towns that do not have single or even double connection service to DCA right now.

At least with AS's applications, you've got some connectivity (albeit through a codeshare at LAX. And even that was sufficient to allow TW a LAX exemption).

US's application would provide the first service to SJU which is a vocal, if not politically strong, constituency.

 

[Cosmo]

Here's my 2¢ worth regarding the DCA beyond-perimeter slot allocations ...

F9 1xDEN
UA 1xDEN
DL 1xSLC
AS 1xSEA
UA 1xSFO
AA 1xLAX

My rationale is as follows:

1. I think California will finally get some nonstop flights by carriers that actually have a fair amount of online connectivity at those airports. This would eliminate AS and HP.

2. Putting AA in LAX and UA in SFO covers most of the connectivity that AQ would offer to the Hawaiian Islands via SNA and HNL. And considering that LAX and SFO are much bigger local markets than SNA, AQ really doesn't have much of a chance.

3. Like AS and HP in California, US has no connectivity in SJU, thus likewise eliminating it from contention. And while US claims connectivity in SFO via its codeshare with UA, why select a codeshare to get the connections when you can pick the "real" thing with UA?

4. Don't forget that it's an election year. Spreading the "goodies" around is always good politics.

5. Also don't forget that there are a lot of Republicans in the Rocky Mountain states, hence my prediction of 3 new flights to DEN/SLC. There are also many Republicans in Alaska (at least as a percent of the state's total population), hence the likelihood of an additional SEA flight by the state's namesake airline.

6. Finally, the legislation authorizing the slot exemptions at DCA was not called "The America West DCA Slot Expansion Act." HP already has 50% of the current beyond-perimeter slots at DCA, and even if it gets no new slots in the current proceeding, it will still have 25% of the total number of those slots, more than any other carrier if my predictions come true. Thus, I don't believe that HP will be a likely recipient of any of the new slots.

Of course, this is all JMHO!

 

[ITRADE]

1. I think California will finally get some nonstop flights by carriers that actually have a fair amount of online connectivity at those airports. This would eliminate AS and HP.

True, but again, online connectivity did not prevent TWA from getting an exemption to LAX. AS codeshares with Eagle out of LAX, so I would definately not count them out. AWA, OTOH....

2. Putting AA in LAX and UA in SFO covers most of the connectivity that AQ would offer to the Hawaiian Islands via SNA and HNL. And considering that LAX and SFO are much bigger local markets than SNA, AQ really doesn't have much of a chance.

Don't be so sure there. I think that there is an inherent objection to giving slots and exemptions to dominant carriers at DCA. AA is one of the more dominant carriers, whereas AQ does not yet have single flight out of DCA.

3. Like AS and HP in California, US has no connectivity in SJU, thus likewise eliminating it from contention. And while US claims connectivity in SFO via its codeshare with UA, why select a codeshare to get the connections when you can pick the "real" thing with UA?

I concur about US at SFO. With respect to SJU, I just get the feeling that this application will work out favorably. After all, the congressional/DOT folks would like a nice weekend outlet that's 5 minutes away from Capitol Hill.

 

[hilarious]

Most intra-Cal markets are already served by one stop service and adding available connection via SFO or LAX does not provide substantially better service. True AA and UA's system can add better Pacific services but is this really of a concern for DCA?
In my opinion the correct analysis for awarding slots to LAX, SFO should be centered around the local markets, certainly the size of these markets warrants that. With this in mind AA and UA abuse of monopoly markets speaks for themselves. I think most of the arguments in favor of US have centerd around SJU and again I just have to wonder if this should be of concern for DCA.
Thus it would be my opinion that HP has a heads up for any awards to Cal cities.

 

[Cosmo]

ITRADE:

1. The AA vs. AS situation at LAX regarding connectivity is the same as the UA vs. US situation at SFO. While you agreed with me that the SFO route should go to UA, you thought that the LAX route should go to AS. That seems inconsistent -- can you explain that?

2. While DOT has clearly shown a preference for awarding these slots to new or limited entrants at DCA, they were also frustrated that one-third (2 out of 6) of the originally-awarded slots had to be re-bid (in 2 separate proceedings, no less). I believe that is one of the reasons that DOT awarded to former National LAS slot to Delta, a stronger legacy carrier, for SLC service. And now that the precedent has been set, the possibility of the legacy carriers getting at least some of these additional slots is more realistic.

As for AQ itself, I certainly don't view it as being as weak as National was, but I also don't see that it brings much in the way of connectivity to the table. As I noted in my previous post, AA and/or UA could actually get passengers to OGG or KOA faster via LAX or SFO, respectively. And LAX and SFO are much bigger local markets than SNA. Plus AQ is offering a smaller aircraft in its proposal (B737-700 vs. B757s for AA and UA), a decisional factor that DOT has given some weight to in the earlier awards.

3. As for US getting a slot for SJU service, as nice as that might be, the cynic in me sees the politics of these slot awards as precluding it from happening. All you have to do is ask yourself how many Congressmen/women and Senators come from Puerto Rico (other than a non-voting delegate, the answer is 0). Thus, IMHO, it won't happen.

 

[Cosmo]

In my opinion the correct analysis for awarding slots to LAX, SFO should be centered around the local markets, certainly the size of these markets warrants that. ... Thus it would be my opinion that HP has a heads up for any awards to Cal cities.

hilarious:

The problem with your suggestion that HP be awarded any slots for nonstop California service from DCA is that HP has no online connectivity at either LAX or SFO, and that was one of the primary criteria for slot awards in the Congressional legislation that created these slots. Moreover, re-read my first post in this thread regarding the rationale for not awarding even more slots to a carrier that already has 50% of the current beyond-perimeter slots at DCA. Given the demand for these slots from other carriers and cities, they should not be so highly concentrated by giving more of them to HP.

 

[ITRADE]

And it probably can't hurt that the federal government owns warrants for a third of AWA.

Well, that rationale would certainly ensure US slots given the federal loan guarantee.