Delta and US Airways Propose New York/Washington Slot Swap Again, and This Time It’ll Happen

Delta and US Airways are hoping that the third time’s a charm by putting the long-proposed slot swap in New York and Washington back on the table with some slight modifications. This time, I have to believe that it’s going to go through. They wouldn’t bother putting this out there if it was going to fail once again.

Here’s the plan this time around:

Delta US Airways Slot Swap Round 3

US Airways no longer wants the Japan slots it had wanted before, mostly because there is now an open skies agreement between the two countries and it doesn’t need to buy them. It also will no longer give up its terminal location in LaGuardia as before. Delta will get a few more slots in the deal, and US Airways gets a bunch of cash. Here’s the full rundown depending upon where you live:

For Washingtonians

  • Delta will give 42 slot pairs (1 slot pair = 1 departure + 1 arrival) to US Airways at National and US Airways will begin service to at least 15 new destinations. Back when US Airways first announced it would do this deal in 2009, it gave 15 new destinations it would serve, so I imagine it will be similar.
  • Delta will continue to serve its 7 (!) domestic hubs from National – which I assume are New York/JFK, Atlanta, Memphis, Detroit, Minneapolis/St Paul, Cincinnati, and Salt Lake City along with the shuttle to LaGuardia and some “select” cities, whatever that means. Delta never gave us any inkling before, so we can only guess now.
  • This is pure speculation, but I would assume that US Airways will acquire more gates on the middle pier at National which would allow United to move to some old Delta gates on the south pier to be right next to Continental.
  • If needed, Delta will give an additional 8 slot pairs to be divested for use by airlines with limited or no service at National. US Airways would still end up with 42 new slot pairs regardless. I assume the feds will make this a requirement.

For New Yorkers

  • Delta will get a whopping 132 new slot pairs (up from the 125 in the first dealin the last deal, Delta would buy 125 but lease another 15 with the option to buy, so this is actually a decrease) at LaGuardia. We have no clue where they’ll go, but we can expect to see Delta replace US Airways on many of the airline’s current routes. Delta also says it will double the number of total destinations it serves, including some that aren’t currently served by US Airways.
  • Delta will use an all-jet fleet at LaGuardia instead of the turboprops that US Airways currently uses. Wanna guess where those jets are coming from? My guess is the obvious. (*cough*Memphis*cough*Cincinnati*cough*)
  • US Airways will give up 18 of the 20 gates in its terminal at LaGuardia (called Terminal C) to Delta. Delta will use those plus 11 in its current terminal (now Terminal D) for 29 in total. Delta will then build a connector between the two terminals so that it can operate as a single terminal from a passenger perspective. (They aren’t physically connected now.)
  • Delta will continue to run the Shuttle from LaGuardia to Boston and Washington from six gates in the Marine Air Terminal, which is a change from the previous plan to consolidate in one place.
  • US Airways will still have two gates in LaGuardia’s Terminal C along with 7 other parking spots from where it will run its operation have 6 gates once the terminal is reconfigured to add more spots plus 3 parking positions for regional jets. It will continue to have the Shuttle to Washington and Boston along with flights to Philly, Charlotte, and Pittsburgh but that’s it. The previous plan to keep Wilmington (who knows why) won’t happen.
  • Delta will take over the current US Airways Club at LaGuardia in Terminal C and turn it into a Sky Club to complement the existing club in Terminal D. US Airways will build a new, smaller lounge for its operation.
  • Delta (not US Airways) will give up 16 slot pairs at LaGuardia to new entrants if needed, and you can bet that will be the case.

On top of all this, US Airways will get a slot to fly to Sao Paulo in 2015, which is on top of another slot it already has acquired on its own. As mentioned above, the Tokyo slot that was previously included is gone since Japan and the US now have open skies. To make everything work out after these changes, Delta will drop $66.5 million into a US Airways bank account.

So why do I say this is a done deal? Because it has to be. US Airways and Delta had filed an appeal in the courts to force the feds to allow this to happen. As part of this new deal, the airlines are dropping the appeal. There has to have been a lot of backroom bargaining here. The feds must have given the green light behind the scenes or these airlines wouldn’t have bothered making another proposal. To me, the only question is who will get those divested slots and will the full amount be required.

As Delta and US Airways both make clear, things have changed a lot since the swap was first proposed nearly two years ago. Southwest has gone into LaGuardia on its own and its purchase of AirTran gives it more slots there as well as some at National for the first time. JetBlue has found its own way into National as well. So there is a lot more low cost airline penetration and connectivity to the rest of the country. It should be enough.

I’m actually surprised that Delta is willing to pony up 24 slots just to appease the feds here. But Delta has been foaming at the mouth around cementing its role in New York and this would be a huge step forward. It would also be a major slap at American. The new United and Delta will be the two biggest players in the New York area and American will have to figure out how it wants to respond, if it does at all.

I still like this swap a lot, and I think it should have been approved two years ago. Let’s hope that this is effectively a done deal at this point.

Updated 5/26 @ 1009a to reflect that I forgot about the previous deal to lease 15 slots to Delta at LaGuardia. Also received clarification from US Airways that the terminal will be reconfigured and it will still have 6 gates plus 3 parking positions at LaGuardia.

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

67 Comments on "Delta and US Airways Propose New York/Washington Slot Swap Again, and This Time It’ll Happen"

avatar
Sort by:   newest | oldest | most voted
Bob K.
Guest

Any chance that Wilmington was on the old list because of political reasons? Any important Senate Committee members, Cabinet members, etc from Delaware that the airlines were trying to appease?

Just an idea. Would love to have been privy to all the horse trading on this one.

Bill from DC
Guest

IIRC the Wilmington in the old list was the one in North Carolina (ILM). perhaps it was an homage to the halcyon days of Piedmont?

Nick Barnard
Member

You know, I think Wilmington is on there because it is a banking hub (smaller than Charlotte, but still there.) Plus you’ve also got a bunch of companies incorporated in Wilmington. Most of the business they need to do there can be done remotely, but I’m sure sometimes people have to show up.

Andrew
Guest

I think you’re still talking about Wilmington, DE instead of Wilmington, NC…Wilmington DE doesn’t even have a commercial airport…you’ve got to drive to Philly.

Nick Barnard
Member

Oops, you’re right. I was thinking of Wilmington, DE.

Chris
Guest

Intriguingly, I think, the more interesting ramification of said deal was at the end of your analysis…

“It would also be a major slap at American. The new United and Delta will be the two biggest players in the New York area and American will have to figure out how it wants to respond, if it does at all.”

Jon
Guest

I feel like there’s been a lot of actions/comments by Delta recently designed to kick AA while they’re down…

Nick Barnard
Member

I wonder how much of this is Delta returning the favor to AA for running them out of DFW six years or so ago?

Bill from DC
Guest

i’m w/ cranky, just DO this already! even w/ DCA as my home airport and DL as my preferred airline (although not nearly as much as it used to be), this just makes too much sense to not do. new markets will be opened into DCA instead of having DL duplicating service on mid-tier cities like MSY, MCO, GSO, etc. perhaps US will upgauge existing flights to mainline service as well. obviously, pricing will obviously be but hopefully IAD and BWI act as regional buffers against too much price gouging on DCA monopoly routes.

frank
Guest

•US Airways will give up 18 of the 20 gates in its terminal at LaGuardia (called Terminal C) to Delta. Delta will use those plus 11 in its current terminal (now Terminal D) for 29 in total. Delta will then build a connector between the two terminals so that it can operate as a single terminal from a passenger perspective. (They aren’t physically connected now.)
==========================================================

Cranky, Terminal C has 22 gates.

http://www.ifly.com/la-guardia-airport/LGA-US-Air-Terminal

frank
Guest

It would also be a major slap at American. The new United and Delta will be the two biggest players in the New York area and American will have to figure out how it wants to respond, if it does at all.
======================================================

BUY JETBLUE.

Bill from DC
Guest

at this point, JBLU might be in a better position to buy AMR!

DesertGhost
Guest
JetBlue would be bankrupt in a heartbeat with AA’s cost structure. The current arrangement (or a full blown code share) is probably the best way forward for both carriers at this point. This slot swap puts American in a worse position from a market share perspective, but (and it’s a big but) the quality of its LGA network is far better than that of US Airways. US pointed out from the beginning that its LGA network was poor compared to the others at the airport; and its less than optimal network was part of the reason LGA is a marginal… Read more »
frank
Guest

is it possible, USAirways is swapping these assets, in part, to force AA into merging with USAirways? Regain market share in the NYC area? Parker’s done nothing but try to merge off his airline for years now with UAL, multiple times, DL, hostile takeover, now AA?
what’s this make AA, number THREE in market share after all the mergers, DL/NW and UAL/CO and if approved, this asset swap in NYC?

Bill from DC
Guest

just dawned on me that US should have negotiated to keep the entire marine air terminal and used it for all of its ops (shuttle, mainline and express, if any remains) and ceded all of its existing terminal to DL or the airport authority.

Scott
Guest

The MAT works for a shuttle operation but really doesn’t have enough room at the gates to accommodate a US’s entire operation. There is also a shortage of space for check-in and baggage claim.

DesertGhost
Guest

The way it’s structured now means less moving around for both parties.

DesertGhost
Guest
What I find intriguing is that Delta is potentially willing to give up all of the slots needed to make this new agreement work (as US Airway’s SEC filing apparently indicates). If I remember correctly, US was going to have to give up 14 slot pairs (1/3rd of the 42) at DCA to make the original plan fly (pun intended, sorry). Not only is US not giving up any slots at DCA (although it’s giving up 7 more at LGA … ) but it’s getting a cool $66.5 million in cash. Is Tokyo worth that much? I saw a post… Read more »
SEAN
Guest

American Buying JetBlue? HAHAHAHAHAHAHAHAHAHAHA!

More like American buying US Airways. If that happens you can say goodbye to Philadelphia & Phoenix as viable hubs as Dallas Fort Worth & JFK are nearby. Charlotte has a chance to survive being a finantial center, although it’s a short hop to Miami.

JetBlue could come out a head with such a tie up.

longtimeobserver
Member

Love the graphics!

DesertGhost
Guest

… especially the Pete Rose baseball card. Maybe it’s worth $66.5 million.

JC
Guest

Where will they be located? The newer western pier where us express operates or the eastern pier where the us shuttle operates today? Where will the parking spaces be? Having trouble figuring out where they will add the 4 additional gates (since US says they will have 6 gates, not the 2 left over after Delta takes 18).

David SF eastbay
Member

Where is DL getting $66.5 million from, aren’t the airlines always saying how they don’t make money.

scott.wintner
Member

Obviously, they believe the $66.5M investment will pay off with greater returns. In New York, it’s hard NOT to make money.

Karl
Guest

Well US isn’t making much money in LGA which is why they want this swap… And with costs especially fuel as high as they are, as well as competition driving fares down somewhat, it actually is somewhat hard to make money.

scott.wintner
Member
I find the exclusion of Narita from this deal (or, more precisely, the reason cited for it) to be curious. At issue are slots at NRT — not government route authorities. Open Skies has nothing to do with slots at NRT. Sure, NRT may make more slots available in general as the airport continues to expand, but obtaining them will still carry a cost — so indeed there is less value to US Airways in the latest proposal than if NRT were still included. The filing certainly implies that NRT slots are now irrelevant, which is not at all the… Read more »
Jim
Guest

This is interesting, but I’m wondering how much “competition” these low-cost carriers actually provide at a slot-controlled airport. US Airways is going to have far more slots at Reagan National than the LCCs, and since the airport is slot-controlled, this situation is locked in. So how much downward pressure on prices can the LCCs exert with the few cities they can serve from the few slots they have?

Bill from DC
Guest

as a frequent DC flyer, IAD and BWI service applies fairly significant pressure on pricing at DCA. rarely do i pay more than $50-60 more at DCA per r/t than i would for similar itineraries at WN-dominated BWI or UA-dominated IAD. for me, that’s $50-60 VERY well spent!

Trent880
Guest

AA has shuffled RJ’s around LGA with no clear strategy, US has preferred to operate a zillion daily PHLLGA’s to anything else out of LGA, and B6 and WN are moving in fast and furious to LGA and NYC. How is this DL strategy going to work??

Paul Ferdinand
Member

Southwest buying JetBlue would make a whole lot more sense. Besides ATL it would give them a big presence in BOS/NYC/WAS. I don’t think WN is done shopping yet.

CP
Guest

Cranky, DL started DCA-STL service (which duplicates AA service), and I don’t see that as being acquired by US in your table. So perhaps that is one of the “selected” other cities that will retain DL service to DCA.

trackback

[…] Delta and US Airways Propose New York/Washington Slot Swap Again, and This Time It’ll Happen […]

flyhilo
Guest

great! just imagine how many employees will be displaced and out of work!

trackback

[…] that whole Delta/US Airways slot swap deal? US Airways gave most of its slots at New York’s La Guardia airport to Delta in exchange […]

trackback

[…] really interesting to watch US Airways as it starts to announce how it’s going to use its newly acquired slots at Washington’s National Airport. While Delta made a huge splash in New York with its hub-creation at LaGuardia after it got the US […]

wpDiscuz