I assume the feds knew they were playing with fire when they decided to attach incredibly onerous conditions to the proposed slot swap between US Airways and Delta in Washington and New York. Now, US Airways and Delta have officially decided to reject the requirements and stick with the status quo, unless they can win in court. Absolutely nobody wins here, and that’s why the tentative order issuing the feds a Cranky Jackass award is now a final order. This was just a bad move.
I’ll spare you the history again since it’s been recounted here multiple times. In short, Delta wanted to trade much of its slot holding at Washington/National to US Airways for that airline’s slots at New York/LaGuardia. The feds came back saying they’d only approve it if the two agreed to divest a bunch of slots to new entrants before the transaction occurred. That wasn’t palatable to anyone, but Delta and US Airways did come back offering to divest some of the slots to carriers with whom they had already set up agreements. It looked like the FAA had achieved its goal of giving slots to new entrants, but the agency wasn’t satisfied. The feds stuck to their guns and that’s how we got where we are today. (More details here)
US Airways and Delta had asked for more time to consider the swap, and the feds gave it to them. But last week, they decided to reject the requirements for divestiture and sue the pants off the government for such an absurd requirement. So let’s review exactly what the feds have thrown away here:
- US Airways would have used larger planes in Washington and would have opened nonstop service to several cities that don’t have it today.
- Delta would have used larger planes in New York to create a hub operation at LaGuardia.
- Terminal changes in New York would have made it easier for customers.
- US Airways would have received rights to fly to Japan; a new entrant into that market providing more competition.
- US Airways would have received rights to fly to Sao Paulo; again, a new entrant in that market.
- JetBlue would have received 4.5 slots at National. (The last .5 slot was available in off peak times.)
- WestJet would have received 5 slots at LaGuardia, providing competition to Canada.
- Spirit would have received 5 more slots at LaGuardia, providing low fare service.
- AirTran would have received 5 more slots at LaGuardia, providing low fare service.
And now, none of this will happen. What’s the cherry on top? The feds get to waste our taxpayer money defending themselves in a lawsuit that will undoubtedly drag on for awhile. In short, the feds decided to play a game of chicken and they lost. Now, everybody loses. Way to go, guys. I bet you thought they’d give in, but they didn’t. You blew this one.