Delta, US Airways, Continental, and AirTran Swap DC and NY Slots

Isn’t August supposed to be a pretty light month for airline news? This week has been absolutely packed with headlines, and I’m getting tired. Today I’m rolling a couple stories together that involve slot swaps. One (between US Airways and Delta) is huge while the other (between Continental and AirTran) is more of a minor thing. But one thing is clear – things are really moving these days.

The big news is the Delta/US Airways slot swap. Remember the good old days when US Airways was the “big bad predator” and Delta employees wanted to “Keep Delta My Delta”? Apparently those wounds have healed and now they’re playing nice with each other. The basic plan is this – Delta gives its Washington/National (DCA) operation to US Airways and US Airways gives its New York/LaGuardia (LGA) operation to Delta. Delta also had to throw in route authorities for Tokyo and Sao Paulo and they wanted a Pete Rose rookie card to even things out.

Delta US Airways Bargain

Why are they doing this? Well, Delta wants to “win” New York (if there is such a thing). US Airways, meanwhile, thinks the DCA slots can make them a lot more money. Ok, fine. It’s probably a smart move for both considering their strategies. I talk about that more over on BNET today.

US Airways will give up 125 slot pairs (one pair = one takeoff and one landing) at LaGuardia along with its terminal. Those slots are currently used for US Airways Express flights that buzz around the Northeast, primarily in turboprops. Here is what stays and what goes:

US Airways Changes at LaGuardia

Everything else will go to Delta, and it remains to be seen how exactly they’ll use them. They do say, however, that they’ll add or preserve service to 30 smaller cities, including a dozen cities not currently served by US Airways from LaGuardia. They also say they’ll upgrade the props to jets and end up squeezing more than 2 million additional people a year through the airport without increasing flights. Hmm.

So Delta will set up what they’re calling a domestic hub at LGA with an international one at JFK. That’s, uh, not ideal, especially when compared to Continental’s single facility at Newark. But JFK will apparently continue as is for now and LGA will just see more flying to smaller cities. Delta really thinks they can make a go of it.

In terms of facilities, US Airways Shuttle will use the Marine Air Terminal (where Delta currently flies its Shuttle) and the other flights will go into Terminal D gates 7, 8, and 9. Delta will take over US Airways’ current terminal and pour some money into it to fix it up. (Hey, maybe you guys should pour money into that dump over at JFK instead.)

Down at DCA, it’s a different story. US Airways will pick up 42 slot pairs to add to the 175ish that they currently have. Here’s what they’ll add:

US Airways New Cities from Washington/National

They will operate these with Embraer 190s or A319s, so it’s going to involve bigger aircraft than what Delta is using today. As far as facilities go, they need to ask the airport for facilities – Delta doesn’t own anything to give to US airways there, but this shouldn’t be a problem. US Airways is currently profitable at National and they expect this move to add to the bottom line to the tune of $75 million.

Delta will keep flying to its hubs and “select small communities.” Man, Delta is really being cryptic here, and it’s a pretty stark contrast to US Airways. I wish Delta was nearly as open as US Airways has been, but until then we’ll have to just keep guessing at exactly what they’re going to do.

But this slot swap wasn’t quite even, so US Airways has also received a route authority to fly to Sao Paulo. (They’ll go from Charlotte.) They also get slots to fly into Tokyo/Narita which they’ll run from Phoenix . . . eventually. The plan for Tokyo is to start in 2012. Until then, the slot will be subleased back to Delta. They can really start whenever they want, but they figured that it will be 2012 before air travel to Asia has recovered.

And that’s it. No cash changed hands or anything else. It’s just a swap that works for both airlines. This is subject to government approval, and it likely won’t happen until 2010, so transition plans aren’t known just yet.

We also have to talk about Continental and AirTran. AirTran will be pulling out of Newark completely. Its 10 slots will go to Continental. In exchange, AirTran will get what looks to be 6 slots at LaGuardia (for flights to Indy and Orlando) as well as six slots at National (to be used for Orlando and Atlanta). This one makes perfect sense as they play to their strengths. Continental fortifies Newark while AirTran builds in LGA and DCA. AirTran’s service in Newark ends on 10/25 and picks up in DCA/LGA on 11/4.

What a week – my head is spinning.

[Original photos: http://www.flickr.com/photos/tiagochediak/ / CC BY 2.0 and http://www.flickr.com/photos/can10kon10/ / CC BY-SA 2.0]

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34 Responses to Delta, US Airways, Continental, and AirTran Swap DC and NY Slots

  1. David SFeastbay says:

    Trading slots just doesn’t sound right. If one airline can’t (or doesn’t want) to use their slots then they should go up for grabs for any airline to apply for them. This is nothing more then DL and US getting together with each other and planning how they can control each city, the same for CO and FL to a smaller degree.

    A domestic hub at LGA? Right that will run smoothly and on time.

  2. Neil S says:

    Which dump at JFK should Delta fix? The joy of flying and always being in the wrong terminal is thrilling.

  3. SEAN says:

    One of the first projects that the Port Authority would need to complete to make a split hub work for DL, is they would need to extend AirTrain to LGA from JFK. There’s been talk about that since AirTrain opened, but that is all it has been.

    1. Since the finantial crisis the PA is being forced to pay about 20% intrest on it’s bonds. That is up from 4% last year, yet they are NOT a credit risk unlike say California.

    2. How to route the service LGA is in Northern Flushing & JFK is in central Jamaica, making it nessessary to come close to residential areas of Queens unless it follows the Van Wyke Expressway to the LIE to the Cross Island Parkway. to the Grand Central Parkway near Citi Field. I cant see any other way to do this without going near at least one residential area & we know that will play out poorly.

  4. Andrew says:

    Now it seems that Continental’s next step would be to somehow get Jetblue out of Newark also, and it wouldn’t surprise me if they are trying. I’m not sure how many slots Continental could give at JFK but it would be very beneficial for both airlines, as Jetblue would probably like to hedge up a little more against Delta as well now that they are making this “domestic hub.”

  5. Dave says:

    Who wants to bet the new LGA capacity comes from further reductions in CVG and possibly MEM???

    Lots of RJs in CVG and RP, OH, and Mesa already have NYC bases…

    hmm…

    Dave

  6. Ron says:

    Sean — AirTrain JFK is about 5 miles from Jamaica station to the airport, most of it high above the median of the Van Wyck Expressway. From Jamaica to LGA is about 7 miles on the Van Wyck and Grand Central Parkway, and I don’t see any principled reason why you can’t build high over the median there. The GCP goes under the Flushing IRT (7 subway) about 150 meters east of the eastern end of the 111 St station platforms, so extending the platform could provide a subway link (alternatively, a little loop around Flushing Meadows will catch both the Mets-Willets Pt subway and LIRR stations, which would make a better multimodal station). Finally, extending AirTrain-LGA west over the GCP and BQE-West for another 3 miles will bring it to the Astoria Blvd Station (N subway). It all looks very feasible engineering-wise and politically, the main obstacle is probably funding.

    If Delta replaces US’s LGA turboprops with higher capacity jets, they must reduce frequencies. What will they do with the unused slots? One possibility is shift some within-perimiter routes from JFK to LGA, to free up JFK slots for beyond-perimeter flights. Short/medium-haul from JFK will probably be mainly for connecting traffic.

  7. CF says:

    Dave wrote:

    Who wants to bet the new LGA capacity comes from further reductions in CVG and possibly MEM???

    Well, they can use the aircraft that were operating the 42 flights at DCA that they’re losing to start. Also, they’ve cut back on Cincinnati and other airports so much lately that I’m sure there’s plenty of capacity floating around. That doesn’t mean we won’t see more cuts in Cincinnati, but Memphis does seem to be holding its own so far.

    Ron wrote:

    If Delta replaces US’s LGA turboprops with higher capacity jets, they must reduce frequencies. What will they do with the unused slots?

    I imagine it will look somewhat like what US Airways is doing in DC. They’ll add some new cities that don’t see service today.

  8. DRG says:

    The cover story for the Economist this week is about how Asia is recovering astonishingly quickly from the economic slump. US Airways may regret waiting.

  9. Trent880 says:

    A split hub is a bit like a “relief hub”, in that both are very unprofitable. There will be no meaningful connectivity between the two. I understand that DL thinks the bigger local presence will enhance their revenue premium on international flights, but I don’t see how a revenue bump on a JFK longhaul more than pays for a handful of RJs to SYR that were losing money on DH8s at US. The only way I could see this benefiting anyone is if DL operates the bare minimum number of slots that it can, thus reducing capacity in the NYC area. That said, this outcome is also better than, say, B6 or WN getting their hands on the US slots/terminal.

  10. MRD says:

    So with all of these changes, what happens to the LGA “shuttle services” in upstate New York. ALB, ITH, SYR, ROC, and BUF all have service on mostly DH8 aircraft. ITH uses Colgan air Saabs. ROC and BUF have some CRJ service to LGA. Delta already operates daily flights to JFK from all of these airports. Will these new Delta flights to LGA be RJ service. I don’t think an airport like Ithaca could even support such service, especially if USair is adding DCA RJ service. It sounds to be like Delta is going to cut LGA service from the 9-11 round trips US has now from BUF, ROC, SYR, ALB to maybe half of that frequency on CRJ’s and ER145’s. Like Trent880 said, these DH8 shuttle trips were not profitable anyway, so this may be a good thing. I hope it helps with on time flights, because I have never flown an on time US Express flight to LGA from SYR. At the least, this is an peculiar move Delta and (I think) a very good one for US.

  11. CF says:

    MRD wrote:

    It sounds to be like Delta is going to cut LGA service from the 9-11 round trips US has now from BUF, ROC, SYR, ALB to maybe half of that frequency on CRJ’s and ER145’s. Like Trent880 said, these DH8 shuttle trips were not profitable anyway, so this may be a good thing. I hope it helps with on time flights, because I have never flown an on time US Express flight to LGA from SYR. At the least, this is an peculiar move Delta and (I think) a very good one for US.

    I would hope that we’ll see fewer flights if they’re increasing the number of seats – that could be an Independence-style bloodbath otherwise. (Too many seats on expensive RJs to cities that didn’t need it.) But it won’t help with on-time performance. I can’t imagine Delta retiring the slots. They’ll just add service elsewhere.

  12. Hmm.. The one real downside for USAirways is having a split operation at LGA… I guess most people won’t want to go BOS-LGA-CLT, but that is the real downside from USAirways perspective.

  13. Hey what does American gain by having to give up three of their D gates?

  14. SEAN says:

    AirTrain JFK is about 5 miles from Jamaica station to the airport, most of it high above the median of the Van Wyck Expressway. From Jamaica to LGA is about 7 miles on the Van Wyck and Grand Central Parkway, and I don’t see any principled reason why you can’t build high over the median there. The GCP goes under the Flushing IRT (7 subway) about 150 meters east of the eastern end of the 111 St station platforms, so extending the platform could provide a subway link (alternatively, a little loop around Flushing Meadows will catch both the Mets-Willets Pt subway and LIRR stations, which would make a better multimodal station). Finally, extending AirTrain-LGA west over the GCP and BQE-West for another 3 miles will bring it to the Astoria Blvd Station (N subway). It all looks very feasible engineering-wise and politically, the main obstacle is probably funding.

    Thanks for your assistance.

    There are several connections to the 7 & N lines that come closest to LGA.

    Commuter rail
    LIRR @ Woodside 61st Street

    Subway
    N & 7 @ Queensboro Plaza
    E, F, G, R, V & 7 @ Jackson Heights 74th Street
    4, 5, 6 & 7 @ Grand Central
    B, D, F, V & 7 @ 42nd Street Bryant Park
    A, C, E, N, Q, R, W, 1, 2, 3 & 7 @ Times Square 42nd Street

    You can see the numerous connections that are possible. Any way to keep from getting caught in rush hour traffic on the GCP is a plus. Especially when there is a Mets game.

  15. Tory says:

    Now, the next blockbuster would be if Delta took their newly consolidated position at LGA and swapped with JetBlue at JFK. Delta gets their NYC mega-hub with cross-Atlantic international connections (not to mentioned upgraded JFK facilities), and JetBlue, which is primarily domestic, gets an airport that is far more convenient to Manhattan.

  16. Bobber says:

    ITH from DCA? Hurrah for that. Anything NOT to go through the dump that is PHL.

  17. CF says:

    Nicholas Barnard wrote:

    Hey what does American gain by having to give up three of their D gates?

    Hmm, maybe there are unused gates there? This shouldn’t have anything to do with AA, but I don’t know the answer.

    Tory wrote:

    Now, the next blockbuster would be if Delta took their newly consolidated position at LGA and swapped with JetBlue at JFK. Delta gets their NYC mega-hub with cross-Atlantic international connections (not to mentioned upgraded JFK facilities), and JetBlue, which is primarily domestic, gets an airport that is far more convenient to Manhattan.

    But then JetBlue can’t do the Caribbean flights – no customs/immigration at LaGuardia.

  18. SEAN says:

    @ Tory:
    That will never happen. If anything JBLU would be more likely to reconstruct terminal 6 at JFK for international flights instead of having to use terminal 4 for arivals needing customs clearences. That is what AA does at Terminal 8 & DL at terminal 3.

  19. Tory says:

    CF wrote:

    Nicholas Barnard wrote:
    But then JetBlue can’t do the Caribbean flights – no customs/immigration at LaGuardia.

    They do have flights from Canada to LGA, but I guess those do the US customs/immigration on the Canada side. Nothing stopping a small c/i operation at LGA, or at some of the major Caribbean airports, just like they do in Canada. Then again, maybe JetBlue keeps a small operation at JFK. All depends on the value of the deal.

  20. CF says:

    Tory wrote:

    They do have flights from Canada to LGA, but I guess those do the US customs/immigration on the Canada side. Nothing stopping a small c/i operation at LGA, or at some of the major Caribbean airports, just like they do in Canada. Then again, maybe JetBlue keeps a small operation at JFK. All depends on the value of the deal.

    The US government is probably the one stopping it. They would have to create and staff the facility and I doubt there’s any interest in doing that. The same goes for the Caribbean nations. I understand why it makes sense to have preclearance in Canada, but I don’t understand why they have it in Ireland. Anyone?

  21. I thought the preclearance in Ireland was paid for by the airport authority as a way to increase revenues/enplanments etc.

  22. Ron says:

    CF wrote:

    I understand why it makes sense to have preclearance in Canada, but I don’t understand why they have it in Ireland. Anyone?

    It could be political. I don’t know about the preclearance, but I was told that adding Ireland to the visa waiver program was done after a promise that Bill Clinton gave on a presidential visit to Ireland, despite the fact that at the time Ireland did not meet the State Department’s criteria for joining the program.

    Regarding Canadian preclearance: I thought the rationale was to allow flights from major Canadian airports to smaller airports in the U.S. which do not have immigration and customs facilities. But are there any scheduled flights left on such routes? There’s LGA and DCA, but these are by no means small airports. So what’s the benefit (to the U.S. government/taxpayer) of Canadian preclearance?

  23. CF says:

    Ron wrote:

    Regarding Canadian preclearance: I thought the rationale was to allow flights from major Canadian airports to smaller airports in the U.S. which do not have immigration and customs facilities. But are there any scheduled flights left on such routes?

    You’d be surprised at the number of flights that go to smaller airports. Air Canada will fly you from Toronto to places like Allentown, Harrisburg, and Dayton. I believe they all have customs and immigration facilities, but it’s probably cheaper and easier to just have it staffed in Canada.

  24. Cheri says:

    So I just tried to book a Sept flight from LGA to CLT — but the always-overbooked 6:55pm is now GONE!! Left to choose between the always-overbooked-and-too-early 5:05pm or the awful 9:40pm. What gives??

  25. CF says:

    Cheri wrote:

    So I just tried to book a Sept flight from LGA to CLT — but the always-overbooked 6:55pm is now GONE!!

    It looks like you may have just picked a bad day. It’s not gone, but there are some quirky days in September that don’t have it operating. It’s now a 659p departure and it runs every day until 9/13. Then it doesn’t operate on Monday and Tuesday. There’s also a 735p Wednesday through Sunday, but Monday and Tuesday, for whatever reason, have neither of those.

  26. Alex Hill says:

    I’m a little late to the party, but, as a Madison resident and occasional passenger on the Northwest Airlink MSN-DCA non-stop, switching that flight to US Airways (Express) confuses me. US Airways currently has no presence here in Madison, while Northwest/Delta is by far the largest carrier and the only one with mainline service here. Why would US Airways Express start a new station just to operate a single daily flight to a non-hub? Will they start a Philadelphia or Charlotte flight too?

    My impression is that the situation in the other small upper midwest towns with Northwest non-stops to DCA (Des Moines and Grand Rapids) is similar.

    Judging by the typically-high fares and the fact that the flight has been mostly full most times I’ve flown it, the MSN-DCA flight that Northwest has been running for a few years must be successful.

  27. CF says:

    @ Alex Hill:
    While it’s true that DL/NW has a bigger presence in Madison, US Airways has a bigger presence in Washington so it should even out for them. It’s not hard to open a new station when they can outsource the functions at the city, so that isn’t an issue. My guess is that they are really just keeping the Madison flight around because they had to fill up all the cities that Delta would be leaving.

  28. Fred says:

    The swap is certainly reflected in fares. DTW to DCA on NW / Delta was $150.00 give or take $30.00 for the last several years. Immediately after the swap, DTW / DCA on Delta jumped to $757.00 while that flight is now available on US Air for $150.00. For a 398 mile flight, one can take practically take a cab and not spend more.

    I had been a lyoal NW customer for years. Unfortunately it appears Delta really doesn’t want or care about DTW business. If they want to “win” NY, fine, but at the cost of how much other business? Go ahead – “win” NY, and I will fly US Air

  29. Alan says:

    “Why does Ireland have preclearance for US?” was asked above.

    I think it is for the following reasons, most of them pure commonsense:

    a) Political and cultural ties between the two countries.

    b) Safety and convenience; Most passengers coming from Ireland and probably all from Shannon are likely to be extremely low-risk (and at least half are US citizens) as regards terrorism or a desire to overthrow the US Government – particulary in the case of Shannon which now has full preclearance and no connecting flights from “dodgy” countries. Someone not fittng the terrorist low risk profile would stand out like a sore thumb here. It makes a quicker process for passengers coming from Ireland and it makes for a better experience for passengers arriving in the USA from other destinations – as Homeland security has slightly less people to process and therefore can do so more thoroughly and fairly as there is a little less time pressure.

    c) Shannon has nearly 3 million US soldiers transitting it every year, ahving US pre-clearance makes even more sense for this reason.

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