The DOT Gets it Right With Washington/National Slot Awards

There’s nothing I like more than ripping apart the Department of Transportation (DOT) for its poor rule-making abilities, butDOT Makes a Smart Decision every so often, the department does something right. We might as well celebrate on the rare occasion when that happens. Yesterday was one of those days as the DOT doled out slots at Washington’s National Airport.

The DOT had four slot pairs to give away at National as part of the recent Federal Aviation Administration (FAA) reauthorization. As a quick refresher, National has a rule that prevents any flights longer than 1,250 miles from operating at the close-in airport. About a decade ago, Congress started allowing exemptions, primarily so Congressmen could fly nonstop to get to their home district (my interpretation, at least).

As part of the reauthorization bill this year, eight more slot pairs (one takeoff and one landing) were added to the pool. Four of them were meant for the big incumbent airlines at the airport. These airlines could convert one normal slot to one long haul. Here’s what they did.

  • American will start a daily flight to its Los Angeles “cornerstone”
  • Delta will add a second daily flight to its Salt Lake hub
  • United will start a daily flight to its San Francisco hub
  • US Airways will start a daily flight to San Diego

With the stage set, there were four more to give away either to new entrants or limited incumbents. There was a lot of competition for these, so the results weren’t easy to predict. Let’s start with the losers.

  • Air Canada wanted to fly to Vancouver, but it’s a small, highly seasonal market.
  • Alaska wanted to fly to San Diego, but that was its second choice. Once US Airways announced it would fly the route, this became a tough sell.
  • Frontier wanted to fly to Colorado Springs, but that’s a very small market and would have been hard to justify.
  • JetBlue wanted to fly to Austin, but that was also a second choice and Southwest put that up as its first choice.
  • Sun Country wanted to fly to Vegas, but there are already a lot of flights in that market and Sun Country couldn’t connect people anywhere from there either.

Each of those had a big flaw, especially when compared to the four that seemed to deserve the flights far more. Incredibly, those four are actually the ones that won. Here they are.

  • Alaska gets one daily flight to Portland. Portland is the airline’s second hub and has a decent-sized local market. Alaska will not only bring good service to the locals, which are largely loyal to Alaska, but it also adds good connecting options for a lot of small cities. This one seemed like the most obvious winner to me.
  • JetBlue gets one daily flight down to San Juan. This one is a great move since JetBlue has been building up its presence in San Juan. This gives nonstop service to a place that will benefit from it, and it also opens up new connecting opportunities into the rest of the Caribbean. I like this route and how it fits into JetBlue’s strategy quite nicely.
  • Southwest gets one daily flight to Austin. Nobody flies to Austin from National today and if anyone can serve it well, it’s Southwest. That’s why Southwest was obvious for this route while JetBlue was a longshot. It’s no surprise that Southwest won this.
  • Virgin America gets one daily flight to San Francisco. Even though San Francisco will already get its first nonstop to National from United, that certainly won’t be a low fare service. Besides, Virgin America was the only applicant with no service to National, so you had to figure that the airline would get a foot in the door. The airline actually wanted two pairs, but the DOT rightfully shot that down and spread the wealth. This market should do well.

So, for once, I’ll say “good work, DOT.” Something tells me this praise won’t last very long.

If you’d like, you can read the full decision at regulations.gov.

51 Responses to The DOT Gets it Right With Washington/National Slot Awards

  1. Don says:

    I would’ve liked to see Virgin get the two round trips to SFO. But otherwise; good job to the
    D.O.T. I hope they can open this up again to set low fares for consumers. But I’m not gonna hold my breathe.

  2. Do we know aircraft types yet?

    • Jason H says:

      I’ll take some guesses…

      Southwest and Alaska will be on 737s. Virgin America and JetBlue will be on A320s.

      I’d bet the US and UA flights will be on A321s, DL probably a 737 or 757, and AA…. who knows.

      • Jason H says:

        Before anyone thinks that reply was snarky.. Cranky’s site didn’t like my use of greater than/less than to insert a laughing smilie… Oh well.

        Cranky! Can we get some smilie faces down here in comments?

      • CP says:

        UA doesn’t have A321s. They are using a 737-700 on DCA-SFO. AA is using a 757 on DCA-LAX.

    • CF says:

      We do know aircraft types. Alaska will operate the 737-800 to Portland. JetBlue will use an A320 to San Juan. Southwest will start with a 737-700 but will upgrade to a 737-800 to Austin by November. Virgin America will use an A319.

      No smiley face love? I’ll put it on my list.

      • That stands to reason, the A321 and A320 are not especially long legged, and between the range and runway required for MGTOW operations, DCA to the West Coast would be very challenging. The A319 is shortened A320, it has essentially the same spread between OEW and MGTOW as the A320, and the same fuel carriage, so it has considerably longer legs than the A320 or A321. The problem is aggravated by the fact the DCA-west coast is against prevailing winds.

        By contrast DCA west coast missions are well within range of an RR powered 757-200, and that aircraft can operate close to MGTOW even from DCA’s relatively short runway. The legacy UA757’s would be challenged on this mission because of the PW2037’s, however the legacy CO 757’s have the big RR engines, so that would be my bet for UA’s service to SFO.

  3. DRG says:

    Vancouver is a major hub for flights to Asia. If you were looking just at O&D in your assessment, that’s a pretty limited view.

    • D-ROCK says:

      Even if it is, I like that the US DOT gave preference to US Carriers/Destinations/Intl gateways. SFO, SLC, LAX, & PDX are all better choices than YVR. Austin is a better choice too. The US DOT should WANT to connect passengers through US gateways to intl destinations. YVR wouldn’t have alot of O&D traffic and wasn’t as good as the other options IMHO.

      • DRG says:

        Under the Canada-U.S. bilateral agreement, protectionism isn’t a policy principle. There is no favouring of home carriers contemplated.

        • This pertains to the allocation of the extremely limited outside perimeter DCA slots, not the bilateral agreement. AC can start YVR to IAD service anytime it wants to. If Vancouver to Washington DC is as underserved as AC maintains, I expect to see that route imminently.

          Since flying to Canadian destinations is inherently more expensive than US destinations due to punitive Canadian aviation taxes, it is not remotely protectionist to assert that these extremely limited slots should be allocated only to US destinations, especially since consumer impact is one of the considerations DOT considers.

      • Two new flights to SFO and an additional flight to LAX will create a great deal of Asia-connecting opportunities. Agreed also that these limited slots should go to US airlines and US airports.

    • CF says:

      DRG – That’s not a limited view. There are a million ways to get to Asia from National right now. You can even fly through Toronto on Air Canada if you’d like. There isn’t need for additional connectivity to Asia.

    • Arcanum says:

      Unfortunately, connecting through US gateways usually involves flying on US airlines.

      Air Canada may not be as nice as the big European/Middle Eastern/Asian airlines, but I’d take AC over an American carrier any day.

      • Arcanum says:

        Oh, and connecting through YVR is a dream compared to LAX or SFO.

        • Fred says:

          Well, through LAX or SFO (or other US airports), you just have a domestic to international connection, while YVR is an international flight with an international-international connection, and you might have to clear Canadian immigration and customs depending on when and at what terminal you arrive at.
          YVR is easy and a nice airport, but not nice or easy enough to choose instead of a domestic connection.

      • Sanjeev M says:

        Well you can do a short hop like DCA-ORD or DCA-JFK on the local US carrier than go to its alliance partner to Asia which probably has the better service you’re looking for.

        This slot allocation is about O&D to major west coast destinations (and SJU)

  4. robertol says:

    Agree with DRG. Unclear to me how PDX is a great choice “decent sized market” but YVR is a “small, seasonal market”.

    • Jason H says:

      Considering that DEN-YVR is a route that has been historically hard for carriers to sustain as anything but seasonal I can’t say I would disagree with the assessment of YVR. It’s a nice city and a good Asian hub, but SEA, SFO, and LAX already provide one-stop service to Asia from National so why add in another city. Add in the high Canadian taxes you face when booking and I would have had my doubt on the long-term viability of the National-YVR route.

  5. Maybe it’s time for the Feds to change the rules for DCA and let those airlines flying there convert a within 1250 mile flight to an outside 1250 mile flight, but only one flight to a U.S. city of their choice. Sort of like speading the wealth and letting as many people as possible have easier access to the nations capital that their taxes pay for.

    • Without getting too far afield, I think the Feds shoud wait to see the outcome of a potential US Airways / American merger before doing anything more at DCA. If there is a merger, I would be very surprised if the combined carrier didn’t have to divest a large number of slots at DCA.

    • Didn’t they just did that with the Big Four airlines? Those weren’t new slots, they allowed inside perimeter slots to existing hub airports to be converted to outside perimeter slots. The slots being discussed in this thread are the new, outside perimeter slots provided for new entrant airlines and airlines with limited DCA service.

      • Those were exceptions made, I was meaning that at anytime an airline could change a slot to outside the 1250 miles to any U.S. city that doesn’t have a nonstop already. Airlines can not do that now on their own.

  6. Overall, I agree that DOT’s choices were the best possible.

    I especially like jetBlue to San Juan. That’s thinking outside the box. All of the other flights are to the western U.S. San Juan is also the capital of Puerto Rico, a U.S. territory.

    Austin was also a no-brainer for the obvious reason that it’s the capital of Texas.

    Portland, too was a pretty easy pick. It’s close to Oregon’s capital city, Salem, just as Seattle is close to Washington’s capital of Olympia.

    The fourth one was a bit less clear cut to me. I felt it was between San Francisco and Colorado Springs with a strong leaning toward SFO. Colorado Springs is probably a bit small and Frontier isn’t well established there yet. Frontier also has its three slot pairs to Denver. I think San Francisco is big enough to support two flights to DCA.

    All in all, good job DOT.

    • Since the military is large in the COS area due NORAD maybe the DOT thought not to many non-military locals would use the route so they passed it by. There must be a lot of military transport in/out of the area and big shots from the Pentagon would use military planes and not civial transport.

  7. Bobber says:

    DCA-SFO on UA is a great one for me – the less time going backwards and forwards to IAD, the better.

  8. Jeff G says:

    “About a decade ago, Congress started allowing exemptions, primarily so Congressmen could fly nonstop to get to their home district (my interpretation, at least).”

    Cranky, you would know better than I, but wasn’t there a push about 25 or 30 years ago to close DCA because it was felt that Dulles would do a better job or such (not to mention the limits caused by the large amount of restricted airspace around the airport), but it was the folks at Congress (who, IIRC, have a very nice parking lot just for them at DCA) who kept it open?

    Obviously, that’s a moot point; the area needs both airports now (plus BWI).

    • I’m pretty sure the parking light for Members of Congress and Supreme Court Justices went away when they built Concourses B and C.

      I also don’t recall a drive to close the airport other than when it was closed for about a month after 9/11. But I also don’t see the need for a perimeter rule now that a) Dulles is doing just fine and b) the airplanes that are currently flying coast-to-coast are a hell of a lot quieter than the airplanes they used when Dulles opened.

    • CF says:

      I’m sure there was. The hypocrisy out of Congress is fairly thick. There’s so much talk about aviation security and they put on such a ridiculous show. Meanwhile, they’re fine having an airport across the river from some of the most important buildings in the country from a political perspective. Clearly not a consistent policy.

      (FWIW, I think it should stay open – I just think the rest of the security show needs to be stopped.)

      • “They’re” not fine with it at all – that’s why it was closed for a month after 9/11 and reopened with ridiculously stringent security standards, like that rule about not standing up for the first 30 minutes on outbound flights/last 30 minutes on inbound flights. The only reason it’s open right now is because the airlines would lose a fortune in airfares if they closed it, and the only remotely feasible alternative was to open Andrews AFB to commercial traffic (and I use “remotely feasible” pretty loosely).

        Also, I’m pretty sure the dedicated parking lot went away when they built the current concourses B and C – in fact, I’m pretty sure I read that in one of your earlier blog posts.

        • CF says:

          abefroman329 – Glad to see the Sausage King participating in the comments here!

          They are definitely fine with it or they would have just shut the airport down. While the airlines do make good money and certainly don’t want it to go away, I can’t imagine it would still be there if not for Congress.

          As for the dedicated parking lot going away, if I wrote that, I don’t remember it. I’m not sure if that’s true or not.

          • The fact that they had just sunk over a billion dollars into the new terminal that opened in 1997 also had something to do with it. I’ve always wondered what would have happened to DCA post 9/11 if that investment had not already been made.

        • dwh says:

          The parking lot is still there and available for use by anyone with a specific permit tag issued by the Capitol’s Sergant at Arms. The lot is not exclusive to members of Congress, however. It is open to many law enforcement officers and members of the military, among others.

  9. Looks great to me too. I was REALLY hoping for B6 to SJU and glad to see that happen. I would rather have seen B6 to AUS but understand why they doled these slots out one per airline instead of consolidating them.

    I can’t remember who has the O&D details but, IIRC, SAN was the largest market without nonstop service after SFO gained service via UA. I think PDX was high on this list as well. I also believe that SAT will be the largest market without O&D service from DCA now. Does anybody have the exact stats or know where they can be located? I think that would be pretty interesting analysis to match up that data with these cities.

    • Noah says:

      Agreed, I like b6’s product (and prices on monopoly routes) better than Southwest and would love to see them grow AUS as they have been trying slowly for years.

      But I like that the process was fair and even, and Southwest offered the continuing same-plane service to SAN which Jetblue was not willing to match.

      Finally, something good comes from the DOT!

      • Not only that but WN has many more connecting possibilities at AUS. While B6 could only really offer LGB, WN can connect DCA pxs over AUS to Dallas (Love) and Houston (Hobby) in addition to El Paso, Harlingen, Las Vegas, Los Angeles, Lubbock, Oakland, Phoenix, San Diego (same plane) and San Jose.

  10. LT_DT says:

    Frontier’s desire for a flight to Colorado Springs makes sense given all of the military facilities in the area (USAFA, Ft. Carson, Schriever, Peterson), which are host to some high-level/headquarters elements (Space Command, Northern Command, and NORAD). If they had been awarded the government contract for that route, it could have been quite lucrative. And, if not, non-contract air fares can always be justified one way or another.

    • At the end of the day, IMO what hurt COS the most is that it is 89 – 98 miles driving distance between DEN and COS. That just doesn’t really open up new markets the way DOT claims to want from this new service.

      • Jason H says:

        Until winter.. try that drive on any of our usual winter weather days/weeks here and you’ll quickly decide to fly directly to COS. In fact during the winter the COS-DEN route is often filled with residents of one city or the other. Monument Pass is not something I ever want to do in the winter here again… ever.

  11. TDF Aviation says:

    Alaska Air’s new route to Portland figures to do well. An interesting fact: Per government filings, Baltimore/Washington to Portland is the second-most traveled route in its range class, with United Airlines holding the dominant market share. Figures that Alaska wants to get a piece of the pie.

    Jay G
    Consulting Intern
    TDF Aviation Consulting
    jay_tdf@yahoo.com

  12. NCarlson says:

    I’m still hoping Porter is able to find a way to shift at least some of its flights from Dulles, though my understanding is pre-clearance at YTZ is going to be tough to get.

    • Fred says:

      YTZ is well within the 1250 mile perimeter, so at least there isn’t the problem of slot exemptions. Still, regular slots aren’t easy to come by.

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  14. Jim says:

    Cranky, why do you say that Southwest was the obvious choice for Austin while JetBlue was a longshot?

    I know Southwest has more connecting service at AUS than JetBlue (though not by much), but the idea here is to provide O&D service. If someone wanted to fly from DCA to west coast with one stop, there are plenty of other in-perimeter airports to transfer at, so no need to go through AUS.

    By the way, I think this whole issue is rubbish. Deregulation is over. Get rid of this perimeter silliness and let airlines fly where they want. IAD isn’t going to be hurt in the slightest.

    • CF says:

      Jim – Southwest a LOT more connecting service at Austin than JetBlue. I think the only places JetBlue goes west are Long Beach and San Francisco. Nobody is going to connect back east from there. Meanwhile, Southwest has a ton of cities it serves that way.

      But the main reason I think Southwest is better equipped is because it has a much greater loyalty and penetration in Austin. It’s a more natural choice for service and will likely provide greater benefit to people who fly Southwest to a lot of other places. Southwest is also going to serve it with a bigger airplane 175 seats vs 100 (I believe JetBlue was going to run an Embraer 190).

      I would have considered it somewhat closer had JetBlue made Austin its first choice, but it clearly said San Juan was first.

  15. Felix says:

    I have to echo the comment about an AA/US merger. When AA and TWA merged AA could not keep the LAXDCA slot.

    How ironic would it be again if they lose the slot again in a US merger. Might be VX slot #2 to LAX. Interesting times.

    • Mergers are OK as far as slots are concerned, e.g., UA keeps all of the CO slots. However, AA purchased certain assets of TWA but it was not a complete “merger.” Slots cannot be bought/sold without going back to the DOT for approval.

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