Things in the Sky

Remember the slot swap? The one that many thought were dead when the DOT announced the concessions that it would require? Well, US Airways and Delta announced their own compromise earlier this week that’s very interesting. The airlines says that if this idea isn’t approved by the DOT, the deal’s off. So here’s the breakdown of the deal.

First, let’s take a look at Washington-National just because it’s the simpler one. DOT/FAA wanted US Airways to give up 14 of its 42 (33%!) of its new slots, a pretty hefty piece of the pie. US Airways has said that if the deal is approve, it will give JetBlue five slots at the airport. DOT wanted carriers that didn’t serve or had a small presence at DCA and LGA, and JetBlue fits the bill since DCA would be a brand new destination for them. JetBlue has said that they’re interested in the airport, though it’s kind of tough to guess where they’ll serve. For example, flights to their hubs in Boston and New York would make sense for connecting traffic, but there’s plenty of capacity in these markets already. And that pesky perimeter rule prevents service to the West Coast. Florida service could be likely as well.

Next up is LaGuardia, where Delta plans to sell up to five slots each to AirTran, Spirit, and WestJet. AirTran and Spirit are already there, but their share is small enough (less than 5% of slots) to satisfy the DOT’s guidelines. If the deal were to go through, this would be WestJet’s second attempt at LaGuardia service after cutting Toronto flights in 2005. Right now the airline is present in New York with a seasonal flight to Calgary from Newark, though that couldn’t be moved over due the perimeter rule. So Toronto and Montreal would be the big markets here, both of which already have Air Canada service. Porter goes to Newark, too.

So what will the DOT think of this one? I’m not so sure. For LaGuardia Delta comes close to what the DOT wanted by giving up 15 slots (DOT was throwing around the number 20), or 75% of what the DOT was suggesting. But US Airways is only offering up 35% of the DOT’s suggest divestiture.

But if this works out, it’s certainly good news for Delta and US Airways. By selling slots to specific carriers and only giving up to five total, they get to control the amount of competition present at the airports. And the limited amount of competition was something that was brought up by Southwest in Monday filing on the slot swap – and they were talking about the larger number of slots that was being suggested by the DOT.

Southwest and a few other carriers submitted comments to the DOT about the deal earlier this week, and tomorrow I’ll be covering those in more detail.