When the news broke that Delta was sniffing around the possibility of making a bid for American while it sits in bankruptcy, there were a lot of people shaking their heads, thinking that the mere thought was ridiculous. I couldn’t disagree more. Delta could and should have a real interest here.

What we’re seeing is Delta being really smart, and really aggressive. That’s fun to watch from an airline that used to just be a sleepy old Southerner. The first thing people say about this is . . . there’s no way it would pass anti-trust review. But is that true? I’m not an expert in anti-trust law, but I have no doubt that Delta has been actively working with its lawyers to see what would work and what wouldn’t. If Delta is truly expressing an interest, then it’s done its homework to make sure that it would even be a possibility under the law.

I think the key here is that I imagine Delta isn’t entirely interested in walking away with all of American. Remember when I first wrote about how US Airways should buy American, I suggested that maybe US Airways wouldn’t have much interest in LA or New York? Well, guess who would be interested? That’s right, Delta.

In LA, the market is highly fragmented. I can’t imagine any sort of anti-trust concern if Delta took over American’s operation there. It might even benefit LA by finally building up a stronger single carrier. Sure, the Asian oneworld partners would have a fit, but that’s not Delta’s problem, or the US government’s.

In New York, it might be a tougher sell, but it’s not really that much of a stretch. At JFK, JetBlue carries around 40 percent of the passengers already. So Delta and American combined wouldn’t be a monopoly by any measure. LaGuardia would probably be more of a concern, but the DOT could require some more slots to be auctioned off to low cost carriers and fix that problem right up. I’m sure Delta would be happy to comply if it means eliminating a full service competitor and sprinkling the slots around to other low cost guys.

Of course, this is just one possible scenario, Delta might want Miami as well here, or some other pieces. The point is that the default assumption that the big three airlines can’t combine isn’t true. There are creative ways that they could try to come together with other entities to make a proposal that could work. With American in bankruptcy, it’s really anybody’s game to win, except American’s.

Sure, American could stay as a standalone entity, but the oddsmakers (analysts) aren’t giving that a good chance of happening. When you go into bankruptcy, you lose absolute control of your company. That doesn’t mean that you can’t get out unscathed, but it means that others are going to take a real shot.

Do I think it would be better if Delta bought American? Nah. I mean, I think it’s good to have three large airlines in three separate airlines that can compete with each other. That doesn’t mean, however, that I’m against bits and pieces being moved around to make each remaining airline stronger. But would American be able to survive if Delta took New York and LA?

I don’t see why it couldn’t work if US Airways took the rest. Were I the surviving American in this case, I’d look to buy Alaska Airlines immediately to solidify at least one strong position on the west coast and take that partnership away from Delta. Not sure if that could happen or not, but the point is that there are opportunities for three large airlines to survive even if Delta “buys” American in some fashion.

Will it happen? I have no clue, but Delta would be stupid not to be sniffing around. (And in case you were wondering, United would be stupid TO be sniffing around because it’s hands are very full right now.)

It’s 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 Airways slots there, US Airways has gone with a softer launch with the Delta slots it acquired at National. That’s quite fitting.

Unlike Delta, US Airways is going with a phased introduction of new flights. Of the 42 slot pairs that it’s getting from Delta, it looks like it’s only announcing what will happen with 26 of them. I’m told by the airline that more will be announced in February. Meanwhile, Delta has already shown which flights will be getting the axe, so we have a pretty good picture of what’s happening. Here it is.

Now, I pulled all this up by hand, so there could be a couple of issues with the number of frequencies in some of these markets, but you get the idea. I’ve highlighted the most interesting ones to me in green.

As expected, Delta is pulling out of every market save for its hubs with one little exception. Want to guess which one that is? It’s Lexington, Kentucky, where it appears Delta will continue to have 1 daily flight on a CRJ. Why? I have no clue. Maybe there’s something special about that particular slot which will keep Delta serving that market, or maybe it was just an oversight and will be removed shortly. Regardless, other than that, there are no other non-hub flights for Delta.

That includes the ditching of all flights between Boston and Washington/National, a market which has probably suffered greatly with JetBlue in there. There’s plenty of room for US Airways and JetBlue in there, but it was probably a little too crowded with Delta anyway. There’s also a noticeable reduction in flights to JFK. I assume that’s because Delta is really trying to shift domestic flying over to LaGuardia. It doesn’t need as many flights to JFK anymore.

But let’s get to the meat of this story. What is US Airways doing? It is not following Delta by ramping up service in larger markets. Instead, it’s really serving some of the little guys out there. Look for flights to Fayetteville and Jacksonville . . . North Carolina. There will also be service to Ft Walton Beach, Pensacola, and Tallahassee in Florida. These are cities that have been begging for service to the nation’s capital and now they’re getting it. I imagine a lot of this is actually military traffic, come to think of it.

The upshot here is that US Airways is really bringing some great new service to smaller cities, a rarity today. That does mean that some of the cities Delta abandons will truly suffer. Des Moines and Jackson (MS) are the big losers here; they lose their only nonstop to National when Delta pulls out. Unless US Airways adds them in the next round of flights announcements, they’re out of luck.

Mid-sized cities Charleston (SC), Columbus (OH), Jacksonville (FL), New Orleans, Providence, and Tampa will all keep the US Airways service they have today, but they won’t get more flights. They will, however, be losing Delta as nonstop competition. That’s bound to impact fares to some extent. Grand Rapids and Madison are losing Delta as well, but they have new service from Frontier coming in just in time. That actually might turn out to do alright.

It’s funny to see big cities like Miami lose Delta service but not get US Airways in return. That’s probably a smart move on the part of US Airways. The airline doesn’t want to serve every big city from National. It wants to serve every city it can serve profitably. The high costs and massive frequency and loyalty advantage held by American in Miami probably make it worth avoiding.

But what will the next round of adds bring for US Airways? Great question. I would assume that the airline wanted to add the routes it thought had the most potential first, but there could be more in the next round that will surprise. Maybe we’ll even see some summer seasonal stuff, I don’t know. Either way, it seems to be a very methodical process for the airline, somewhat different from Delta in New York.

With Delta, it seems like it has an idea about which cities need to be served from New York in order to “win” the town. The airline made the flashy announcement so it could make its mark. For US Airways, however, it’s really a market-by-market decision based on viability, with no effort to “win” a city. Not quite as flashy, but it gives great insight into the amount of demand to different cities from Washington.

I look forward to seeing what’s next.

The details are out. Now that the feds have finally paved the way for the Delta/US Airways slot swap (at least this part of it), Delta can finally roll out its plans to dominate New York. This is far from just replacing US Airways on existing flights but is rather a much broader shift.

There’s great news for people in bigger cities, primarily other hubs. Delta will be providing some competition there that didn’t exist before. But that growth means someone else loses, and it’s primarily smaller cities. This isn’t really a surprise, but it’s going to make people pretty unhappy that need those routes. Ultimately, these can be divided into four different categories. Let’s go through each of them.

Big Cities, Big Winners
What Delta is really trying to do here is offer frequent nonstop service in top business markets. That’s good for travelers but not for other airlines. The biggest likely loser? American.

Of these 14 cities, American serves five of them nonstop, so it won’t be happy. As if that’s not bad enough, Delta’s new flights to Halifax will certainly pull from JFK, where American operates the only nonstop flights to Halifax today. For two cities, Nassau and Halifax, this will be the only nonstop flights in the markets, so they’re just going to be happy in general.

You’ll notice that Halifax, Montreal, and Ottawa all are getting service but Toronto is not. Seems strange, right . . . oh wait not so much. Remember, some of those divested slots went to WestJet, and the expectation is that most if not all will fly to Toronto. Oh, and did I mention that Delta and WestJet are planning to codeshare? Not so much of a divestment, eh? Here’s the list of winners.

A Little Bit of Growth
Those markets above aren’t the only winners. Others will actually see some growth or at least stay the same. These fall into a couple different categories.

Most of them are markets that are already served by Delta today but aren’t served by US Airways. In these, Delta is adding an additional flight, so it’s all good news for this group.

There are two that don’t fall into that category. Washington/Dulles will see its 4 daily US Airways flights replaced with 4 new flights from Delta. That might seem like a wash, but US Airways loyalists could always fly United before and can continue to do so and still earn miles. Delta brings convenience to its loyalists, so it provides better utility. Also, some will be happy to see jets replacing turboprops, but that doesn’t matter to me.

The last one is a special case. The 4 daily US Airways flights to Syracuse will be replaced by 5 from Delta. Not bad, but why is this happening? Delta has been particularly careful to court the New York politicians in this process. That relationship has helped open plenty of doors, so those upstate New York markets will be taken care of quite nicely. Here’s the list:

Just a Haircut
Now it’s time to start talking about the losers, but let’s ease into it by talking about those with pretty mild losses to start.

In this group there are really two types of cities. The first group loses the least. These are cities that have US Airways service today but no Delta service. The US Airways flights will disappear and Delta will step in, just with fewer frequencies. These cities get “upgraded” to jets, and they’ll have at least two flights a day. So, there is a loss in terms of the number of flights but it’s pretty minor.

The other group will be less happy. These are cities that had both US Airways and Delta service before, but they’ll now be losing US Airways completely. In return, these cities will get more flights from Delta, but not enough to replace what was lost by US Airways. It also means there’s one less competitor in the market. Here’s the full list:

Little Cities, Big Losers
It’s time to talk about the bad news. There are some cities that are just getting wrecked here. In general, the plan is this. These cities have service from US Airways today and that’s all going away. Delta’s either not coming to these cities or it’s adding a single, measly flight.

Basically, it sucks if you need to go between these cities and New York because your options are greatly reduced. There is one in this list that’s not like the others. That is Baltimore. Delta has declined to go into that market, and I know why. Southwest is the only other airline in the market. So people who need to fly between New York and Baltimore still have an option, but Southwest only has 3 flights in there. US Airways has 7 flights that are going away, so this market is taking a big hit. It’s just not as bad as those markets that lose absolutely everything. Here’s the list:

As you can see, there are some winners and some losers here. In general, the little cities are the odd men out, but many smaller cities do retain at least some service. It’s completely clear why Delta is doing this. It wants to make its slots at La Guardia as useful as possible, and that means serving larger markets. Delta is also upping its game at JFK (I wasn’t able to get the full details on that one yet), which will really make it so that Delta can adequately get anyone in New York to just about anywhere they need to go.

As I said above, this hurts American the most. American now becomes an even more distant third place in New York, and that’s even if you count JetBlue as its partner. For Delta, this is a smart way to use the slots. Of course, I say that as someone who doesn’t have to travel to Ithaca or Providence.

Great new for those who want to follow me on the CNTraveler website. You can now subscribe to an RSS feed of my posts alone.

American Airlines About to Make a lot of People Much Happier – Conde Nast Daily Traveler
Great news from American this week as it followed in Continental’s footsteps and added “incoming flight” information to its flight status. This is great news.

Delta’s Bag Tracking App: Game Changer? – Conde Nast Daily Traveler
Delta has rolled out a nifty little bag tracking app on the iPhone which builds on the website. Tracking your bag like FedEx is awesome.

In the Trenches: How to Treat the Media – Intuit Small Business Blog
We had a blogger use Cranky Concierge for a trip, and that left us thinking about if we should treat him any differently. (We didn’t.)

It’s been a tough few weeks for American without question. After filing for bankruptcy, it’s probably not a surprise that we see airlines trying to take advantage of the situation by moving in on American’s turf. There were three moves last week in particular that seemed to single out American. I say “seemed” to, because in reality I don’t imagine that any of these were made specifically because American filed for bankruptcy. In fact, I’d argue that one isn’t even targeted at American at all, though it will have an impact. Let’s look at each one.

Spirit Grows Dallas/Ft Worth
Spirit has has now refocused on domestic flying, and DFW is getting a big new spot on the map. This expansion will see one flight per day to Atlanta, Boston, New York/La Guardia, and Orlando. It also announced a day later that it was going to add a daily flight to Mesa (outside of Phoenix) as well.

Let’s be clear on this one: this doesn’t hurt American much. Sure, it has the potential to siphon off some seriously price sensitive travelers on to Spirit, but American shouldn’t be targeting those people anyway. The flight times here aren’t very good with a redeye on the DFW-Boston and Mesa-DFW flights and some mid-day runs on the others. This isn’t going to pull off business travelers in any way, and I can’t imagine Spirit wants to do that. Just as it has tried to do in Chicago and in Vegas, Spirit sees an opportunity to go with super low fares and skim traffic off the bottom.

For Spirit, the timing was perfect. Spirit thrives on using outrageous slogans or promos to get free press. So when Spirit saw American file for Chapter 11 bankruptcy protection, it was too good to ignore. The press release makes that clear with references to a “new chapter in Dallas/Fort Worth’s history” along with $11 fares. You have to love an opportunistic airline. Spirit is like a parasite that lives off the misfortune of others – it’s brilliant.

This really shouldn’t be viewed as much of an assault on American, but many will draw the parallel. And American, like most legacy airlines, has nothing against irrational response so we’ll see where this goes. But American isn’t the only one that’s thinking about these moves. . . .

JetBlue Starts Boston to DFW
Another move that would seem to be more alarming to American is JetBlue’s decision to fly Boston to DFW three times daily. JetBlue has avoided DFW so far, and it has a strong relationship with American, so this might seem curious. Why is JetBlue doing this? I think it’s more about Spirit than American.

Is JetBlue trying to make a move on American’s turf? Well, it is doing that, but I don’t think it’s particularly targeting American. JetBlue stands to benefit through greater cooperation with American after the bankruptcy process wraps up, and it wants to be a strong partner. That makes this seem like an odd move.

And that’s why I think this is more about Spirit. JetBlue has previously been VERY aggressive at tackling ultra low cost carriers. When Allegiant announced it would begin flying from Long Beach to Las Vegas, JetBlue ramped up to offer 5 daily flights in the market and launched the additional flights with a $19 each way sale. Overkill? Yeah, probably. But then again, Allegiant pulled out.

JetBlue has tried a similar move with Spirit. Less than a week after Spirit announced it would do a daily flight from Chicago to Boston, JetBlue added a fourth flight on that route. While JetBlue doesn’t care about competing on Boston to Myrtle Beach and it probably accepts Spirit flying to its home base in Ft Lauderdale, it’s not going to be willing to sit there while Spirit moves in on other destinations. That’s why I think we’re seeing this move.

Delta Steals Gol from American
In a completely unrelated blow to American, Delta signed an “exclusive” deal with Brazil’s Gol to be the only US partner with the airline. That means that American’s current partnership with the airline is going to disappear. Delta paid a pretty hefty price to get in on this – it had to invest $100 million in Gol and now has a seat on the Board of Directors.

While I can’t imagine this has anything to do with American’s bankruptcy (this kind of agreement had to be be in the works long before), I do think it was more about Delta feeling a little desperate about Latin America. Avianca/TACA and COPA will all be in Star Alliance. Though I don’t think it’s been announced, the combined LAN and TAM have to pick an alliance, and the scuttlebutt is that they’re leaning toward oneworld (as they should). That leaves Delta with a messy Aerolineas Argentinas and absolutely no presence in the increasingly important Brazilian market. This was an effort to buy a place in that market, and it’s a place that American likely won’t need assuming LAN brings TAM into oneworld.

So, lots of moves that impact American recently, but it’s not a direct hit, as the title of this post says.

[Original surfer photo via Flickr user The Pug Father/CC 2.0]