The Winners of the Coveted Slots at Washington/National and New York/La Guardia Are . . .

Remember 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 for most of Delta’s slots at Washington’s National Airport along with a couple of other considerations. As part of that, Delta had to put 24 slot pairs up to auction for new entrants. That happened last week, and now, we know the winners . . . sort of.

The La Guardia Slot Auction

At La Guardia, there were two bundles of 8 slot pairs being auctioned off. That means that two airlines will get the right to operate 8 takeoffs and 8 landings per day at good times. The bidders had to be either new entrants or airlines with very small presences at the airport already. One of the winners has been officially announced . . . WestJet.

That’s right. Those crazy Canucks are swooping in to fly 8 daily trips to La Guardia. It’s not a surprise that WestJet was interested. The rumors were that WestJet’s proposed partnership with Southwest ended over something closely related to La Guardia. See, WestJet wanted to be able to partner with multiple airlines in order to help feed its network. This was important at La Guardia, where Southwest couldn’t add much. Southwest supposedly didn’t want to see WestJet partner with anyone else. The partnership ended so that WestJet would be free to pursue a life of religious fulfillment, er, um, multiple partnerships.

Earlier this year, Delta launched an interline partnership with WestJet. I imagine we might see it get a little cozier now that Delta will have so many flights that could feed WestJet. Someone is going to need to fill those 8 flights, most if not all of which are undoubtedly bound for Toronto.

But what about the other eight? That’s a bit more of a mystery. Though it hasn’t officially been announced, Bloomberg reports that JetBlue won that bid. It also is said to have picked up the 8 slot pairs down at Washington/National as well. That’s a big win for the Blue Crew.

JetBlue’s interest should be no surprise. It already runs just shy of a dozen daily flights out of La Guardia to Ft Lauderdale, Orlando, and West Palm Beach. At National, it has nine with flights to Boston, Ft Lauderdale, and Orlando. This will help the airline expand its reach at those airports with a nice chunk of new slots.

So is anything surprising about this whole thing? You bet. The most surprising thing is that Southwest didn’t win anything. It has a gajillion* dollars in the bank (*rough estimate) and certainly could have outbid anyone if it wanted. It has made serving big cities a priority lately as a way to get its customers wherever they need to go in the US.

Southwest fought its way into La Guardia when it got 8 slot pairs there to start flights to Baltimore and Chicago. It gained more when it acquired AirTran, which has about 20 slot pairs. It acquired its first beachhead at National with AirTran’s 12 slots there. So you would think it would have been hungry for more, and in fact, it has expressed great interest in the past. It just somehow got outbid this time.

So, Southwest fans won’t be thrilled, but JetBlue lovers should be. There will be more JetBlue flights coming soon, assuming the deal gets done. And Canadians can rejoice that they will have another option to get to New York.

Now we just have to wait for all the “i’s” to be dotted and “t’s” crossed. Oh yeah, and we’re still waiting for final governmental approval in a couple areas. But things are starting to shape up nicely.

If you want to follow this closely, head on over to Things in the Sky. Dan Webb is keeping a close eye on this.

[Original photo via Flickr user Bob n Renee/CC 2.0]


18 Responses to The Winners of the Coveted Slots at Washington/National and New York/La Guardia Are . . .

  1. Brian says:

    I doubt there will be much onward feed from Delta (or American who they have a codeshare agreement with) to Westjet in LGA. This is about Westjet’s strategy to capture more of the Canadian business market competing against Air Canada.

    Toronto-NYC is a very busy market, with 55 flights a day each way spread over YYZ/YTZ and LGA/EWR/JFK. It will be interesting to see how these 8 flights play within the mix.

    Saying the above, DL is by far the weakest player in the NYC-TOR market, with only 3 flights a day feeding their hub in JFK, so they have the most to gain…

  2. I believe Southwest’s explanation as to why the bid failed was something along the lines of “They’re worth a lot, but they’re not worth that much.” If you overpay for slots you’ll never recoup your investment, and the slots are worth more to an entrenched carrier protecting their beachhead than they are to a new entrant.

    • ChuckMO says:

      There’s been some industry scuttlebutt that WN’s NYC point of origin traffic is relatively weak with the majority of their traffic coming in and out from the rest of the network. Without the ability to significantly increase the NYC originating traffic, WN probably didn’t see the return on investment to shell out major bucks for 8 slot pairs.

      • Sanjeev M says:

        Yeah WN will just throw some 738’s on LGA and new AirTran slots at DCA and call it a day. I want to see what B6 does with the new slots and hope they don’t just run a bunch of Florida. Midwest routes would be nice.

        WestJet will have some feed to DL at LGA but it’s mainly for their Canadian passengers and connections at YYZ.

        I thought there was some WestJet/AA interline as well but right now with AA filing for Chapter 11, there’s more pressing things to worry about. Brett, I’m eagerly anticipating your take on AA’s BK :)

        • CF says:

          Well, you won’t have to wait too long Sanjeev. I’ll have a special Wednesday post tomorrow on the AA bankruptcy, and another one on Thursday.

    • Yeah, according to the reports, JetBlue is paying $72 million for 8 take-offs and landings at LGA, and 8 take-offs and landings at DCA. Even after today’s rally in airline stocks, the total market cap of US Airways is only $722 million.

      Maybe I’m cheap, but I think JetBlue is overpaying. How many years will it take to recoup this investment? Forever, I would think.

  3. stan says:

    as Brian said above, there are already 5 airlines serving YYZ/LGA, so perhaps WestJet has something more interesting in mind…

    • Brian says:

      @ChuckMO: No, I did not say that five airlines are serving YYZ-LGA. Five airlines serve TOR-NYC. Only two airlines presently serve YYZ-LGA, Air Canada and American.

      YYZ is the only airport in Canada that has pre-clearance and that is within LGA’s perimeter that would be of interest to Westjet. 8 frequencies is the same as AA, and I would consider the bare minimum to meet the needs of business travellers between the two cities.

      • CZBB says:

        @brian
        you’re incorrect. YUL, YOW, YHZ & YWG (in addition to YYZ) all have pre-clearance and are within the LGA [1500mi] permiter rule. In fact only three airports w/ pre-clearance; YEG,YYC and YVR are beyond the 1500mi rule.

        I would expect WS service from YYZ, YUL and YOW (probably 4/2/2)

        • Brian says:

          @CZBB I am aware of that, but if you actually read the full sentence you would have noted I said “…that would be of interest to Westjet.”

          No way they are going to split those frequencies to YOW and YUL. This is about business travel, and to support business travel you need frequencies. All 8 to YYZ.

  4. My first thought if LGA/DCA are so slot controled and busy, then the only service there should be on U.S. carriers flying only to/from U.S. cities.

    • If I remember correctly, one of the new cities US Airways will serve with its new slots is Ottawa, the capital of Canada.

      • Brian says:

        YOW-DCA is not a terribly strong route. AC flies it twice daily with CRJs. Ottawa is not that big of a city in the great scheme of things.

    • Fred says:

      Why should only US carriers flying domestic routes be able to get slots at LGA?? I really don’t get it.

      • There are many US cities that can not have service to LGA/DCA due the mandated perimeter rules except for the Saturday only rule for LGA and for the rare exceptions permitted by Congress for DCA. Plus with the slot control there isn’t enough slots to service cities that would be within the perimeter. So take non-US carriers and non US to US markets out of LGA/DCA and more US citizens could fly within their own country to these two airports.

        Just my thoughts.

        • This seems a bit Xenophobic to me. AFAIK the purpose of the permitter rule was to separate out short haul traffic to LGA and DCA while forcing longer haul traffic to JFK/EWR and IAD/BWI since people on longer hauls would be taking longer to travel anyway. YOW and YYZ are within their respective permitters and are within the region, even if they’re over an international border.

  5. Brian says:

    @Sanjeev M: AA and WS have a code sharing agreement in place.

  6. Pingback: US Airways Moves Toward Smaller Cities at National After Getting Delta’s Slots - >> The Cranky Flier

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