Delta and US Airways Close Slot Swap Deal

Delta Air Lines and US Airways Complete LGA-DCA Gate Swap | Air Travel News

Delta to Make LaGuardia Domestic Hub with Slot Swap

It’s now official, Delta Air Lines has acquired a phenomenal 132 slot pairs at New York LaGuardia (LGA) from US Airways and US Airways acquired 42 valuable slot pairs at Washington D.C.’s Reagan National Airport (DCA).  US Airways also picked up the rights to operate additional daily service to Sao Paulo, Brazil in 2015.

Delta’s Chief Executive Officer, Richard Anderson said, “Now that we have closed our agreement with US Airways, we can begin taking steps to expand our schedule at New York LaGuardia, greatly increasing travel choices for our New York customers and increasing competition in the market.”  Anderson continued, “We also look forward to expanding and modernizing our LaGuardia facilities as we create a hub operation at LaGuardia.”

US Airways Chairman and Chief Executive Officer Doug Parker said, “US Airways has been a solid operator for travelers utilizing the easily accessible service at Ronald Reagan National Airport for many years.”  Parker stated, “Our expanded presence at Reagan National enables us to add more frequencies in existing markets so customers have more travel choices; it also allows us to expand our service so more smaller communities have access to non-stop service to this very important market and beyond.”

There’s other winners as well, New York based JetBlue along with Calgary based WestJet, but hold that thought for a minute — This slot swap will make US Airways the market leader at Washington National while Delta becomes the market leader at New York LaGuardia — both airports are at full capacity and legacy carriers tightly control their slots.  When a new carrier like Allegiant, Vision Airlines, or Virgin America comes along, no slots, no access, case closed.

For this deal to become reality, both Delta and US Airways divested 16 slot pairs at New York LaGuardia and 8 slot pairs at Washington Reagan National to airlines with limited or no service at these airports.  These slots were opened for auction and WestJet was the winner of 8 slot pairs at New York LaGuardia.  JetBlue also a big winner with 8 slot pairs at both Washington National and another 8 at New York LaGuardia.

One Slot Pair means one flight departure and one landing. The agreement overseeing the transfer was approved on October 10, 2011, by the U.S. Department of Transportation (DOT).  The DOT concluded that the transaction is in the public interest because of the service and efficiencies that would result both in New York and in Washington, D.C.

Swap Deal Affect on Airline Ticket Prices

At New York LaGuardia (LGA), we’re looking at more competition, both within the US, to/from Canada, and points beyond.  New York LaGuardia already has a variety of low cost carriers, including the leader – Southwest Airlines.

When it comes to Washington National Airport (DCA), we are somewhat concerned prices may increase in some US Airways markets, especially on non-stop flights into National from airports where low cost carriers don’t exist.  While three Washington, D.C. area airports do exist, National is not only the closest, but is directly connected to the DC subway system — no drive to Dulles (IAD) or trekking up to Baltimore-Washington International (BWI).

Washington National does have AirTran, Frontier, Spirit, Sun Country, and JetBlue.  The only low cost carrier with a true nationwide network is Southwest, which just happens to be in a merger with AirTran; as such, AirTran is now a wholly owned subsidiary of Southwest.  Markets JetBlue engages in will cause competition and lower fares at National.  We’re also 100% sure Southwest will be a player at DCA once the merger is complete.

Providing Southwest opens routes into its hubs/focus cities, such as Chicago Midway, prices will drop in markets where Southwest competes; they’re known to be competitive and when Southwest drives prices down, there’s even a name for it — it’s known as “The Southwest Affect.”

New Delta routes at LaGuardia and New US Airways Routes at Washington National

As of now there aren’t any as a result of this swap – both Delta and US Airways will separately announce their expanded schedules at New York LaGuardia and Washington National in the near future.

Delta Air Lines already operates a hub at New York’s JFK airport – flights to the JFK hub are mostly international or longer US domestic flights that can’t be conducted at LaGuardia.  JFK also receives feeder traffic for its transcontinental and international services.  Delta will also be restricted to where they can fly from their new LaGuardia Hub as a result of the perimeter rule.  The perimeter rule prohibits nonstop flights to or from points beyond 1,500 statute miles or 2,400 km.  The only exceptions are flights on Saturdays and flights to Denver.

With this in mind, we can easily conclude the new routes from Delta’s LaGuardia Hub will be to destinations in the eastern half of the United States.  Delta does serve nearby Newark (EWR), but its flights there are to and from existing Delta Hubs.

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