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:

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.

Last month when I flew in and out of Washington National Airport, it brought back a lot of memories. The airport has changed a great deal since I first arrived for college in 1995, but the beauty of the airport is that it doesn’t cover up its history. If you have the chance to walk around, you can still experience all 70 years of the airport in its full glory. There aren’t many airports that embrace history like National does.

Here’s how National looks today from above. Well, it’s how it would look if I could draw all over the airport. (North is to the left.)

What you see is the three terminals that exist today. Well, it’s sort of three terminals. In fact, that’s my one complaint about the airport. Breaking up the new terminal into B and C is weird, because there are actually three concourses with separate security entrances. I still don’t know why they didn’t break it into terminals B, C, and D.

But this new terminal sits on top of what was the North Terminal, built in 1958. That terminal wasn’t anything special, and when the chance came to raze it, they did. This terminal, however, is an incredibly beautiful building that is also highly functional. Here’s a view from the main walkway outside security. The ceiling is made of Jeffersonian domes that let in a ton of light. Ticketing is actually upstairs, but from this level, there is direct access to the Metro which takes you right into the heart of DC. It’s a very quick airport to use for travelers, but those who rush will miss the best parts.

When the North Terminal was razed, USAir and Delta ended up moving into the Interim Terminal, a converted hangar that was designed just to house the airlines until the work on the new terminal was done. It actually wasn’t a bad facility, considering, but once the new terminal opened, it went back to being a hangar and offices. In the picture at the top, you can see where the airplanes used to park.

If you keep going north, though you can’t see it here, you’ll come to Gravelly Point, a park on the edge of the Potomac where airplanes fly right overhead. When I was in school, 727s ruled this airport and there was nothing like seeing those big smoky beasts land. It’s a lot less thrilling now with mostly regionals, 737s, and Airbuses, but it’s still a great place to spend the day.

Back to the terminal. Take a walk toward the south and that’s where you get the real history. That long hallway in Terminal B opens up into the original terminal building that’s now called Terminal A. At the north end of the Terminal, you can go up steps into what I believe is still a history museum. I haven’t gone in there for awhile. Below that is where the United gates used to be, but any trace of those are long gone.

This room is the historic lobby that used to be the focus of the airport. That curved wall with pictures is now a visual history of the airport, and it’s worth stopping to take a look. Behind that wall used to be ticket counters for some of the storied carriers in US airline history. Up top, it used to be open as an observation deck where you could escape the insanity from down below. But now, you have to instead just enjoy the view from that main floor below instead. There are even some old chairs there for those want to sit and soak up the past for a little while. It’s now a shockingly quiet version of what it used to be, but the picture window simply can’t be beat for its view.

Part of what’s so great about this terminal is the attention to detail that you simply will not find today. For example, take a look at these doors that led out to the main ramp from the terminal.

Or how about this clock with ornate decoration below? Walking underneath this used to take passengers to the USAir Shuttle (and the Trump and Eastern Shuttles before that, I presume).

If you keep walking, you’ll go past what used to be a busy shopping area. It’s also where Travelers Aid used to be when I volunteered there during college. (We also had a location at baggage claim in the Interim Terminal.) But now it’s just a bunch of closed-facade offices. At the other end of that corridor, you walk into the old American Airlines section of the terminal.

This place is now JetBlue’s domain. The ticketing area is right across from the baggage claim, and behind the camera is where the original American concourse used to be. I believe Pan Am used to use it as well back in the day, but it was knocked down when the new terminal was built. I highlighted the footprint of where that used to be in gray in the top photo.

JetBlue now operates at the only active gates in the old terminal along with a bunch of other airlines that use the ticketing area next door that was originally built to go with those gates. The concourse, which is usually just called the Banjo, was built for TWA and Northwest.

The walk into the end of the Banjo where the gates are is a time warp. I remember there being an old gate along the way that went down to the TWExpress commuter airplanes. The end of the Banjo itself works fine, and I believe they’ve put some money into it to fix it up. I haven’t been down there since America West and Continental used to fly out of there.

It’s very easy to miss the history when you walk through this place, so I recommend grabbing a seat in the old main lobby for a few minutes and soaking it all in. The picture window is enough to grab your attention, but when you start noticing the details of the original building, it really hits home. This airport saw some of the most important political leaders in history fly through on a regular basis. It’s fantastic that the airport authority has put so much into keeping the history alive.

Sun Country is heading to Washington/National airport with flights from . . . Lansing? Yep, Lansing. It won the fight for slots at National against other more established airlines. These slots were being used by Frontier to fly to Kansas City, so now the number of flights on that route will be reduced so Sun Country can go to Lansing. Was it the right move? Should another airline have gotten it? For more background, check out this article.

In the immortal words of Dennis Hopper (rest in peace, you crazy bastard) . . . pop quiz, hotshot. Let’s say that you’ve been presented three deals impacting the most dominant airline at a highly-congested airport. You can approve one. Which would it be? Here’s what the airport will look like after the deal is approved:

You’re probably thinking that B looks best, and there’s no chance anyone is going to pick deal A, right? But that’s exactly what’s just happened now that the Department of Justice (DOJ) has given its approval to United and Continental to merge. All Continental has to do is take United’s 18 daily flights and give those slots (or equivalent) to Southwest. Done deal. Those other two deals? Yeah, that would be the rejected slot swap between Delta and US Airways in Washington (C) and New York (B).

I know, I know. These are totally different things and the approvals came from different branches of government. True, but it also shows how screwy it can be dealing with the feds. I should be clear here. I think the Continental and United deal should be approved. I just think the slot swap should have been approved as well.

Let’s start with the Continental/United deal. Apparently, the Department of Justice (which tends to be more strict than the Department of Transportation) had no concerns about this deal outside of Newark. Newark, of course, is a highly-congested airport with no slots available. So Continental agreed to permanently lease 18 slot pairs (the same number of flights United operates today) to Southwest. In other words, United gives up its slots to Southwest and everything else is fine. Here’s the state of the airport after this deal.

I’m sure Southwest is thrilled to be getting in there, but it’s still a pretty small number of flights in the scheme of things. And of course, everyone else is still frozen out for now. Contrast that with the slot swap deal. First, here’s the Washington/National chart had the deal been allowed to go through.

Here you can see an airport with more balance and greater low cost carrier penetration than Newark, but that’s nothing compared to LaGuardia.

When compared to National, there’s a greater transfer of slots here, but the dominant carrier would still have held a smaller position than at the other airport. Note the even higher LCC penetration of 12.7%. That’s more than double where Newark will be after Southwest gets its 18 slot pairs. So what gives?

Well it’s hard to say exactly what’s going on when you’re dealing with political bodies. Making sense is never the highest priority. But in this case, I would assume it’s simply an issue of looking at current versus potential scenarios. Continental won’t grow in Newark with this transaction while Delta and US Airways would have grown at LaGuardia and National respectively in that deal. Really, that shouldn’t be the issue here.

If the feds want to act like they’re sticking up for the consumer, they have the ability to hold airlines over a barrel. The Department of Justice chose not to do that with Continental and United while the Federal Aviation Administration has apparently gone the opposite route with the slot swap. Go figure. One thing we do know is the feds do seem to love Southwest these days.

You’ll remember that Southwest voiced a large number of objections when it came to the slot swap. The feds came back and agreed with the airline. Remember, Southwest actually said that open auctions were the best outcome. Now it’s gone and done a back-room deal. Not bad for Southwest, and certainly not bad for Continental and United. Then again, it probably just frustrates Delta and US Airways even more. Or maybe not.

Maybe this suggests that the better path for US Airways is to get bought (as they’ve been saying for some time anyway). Then it won’t need to get an FAA waiver to give its LaGuardia slots to another airline. It’ll be that other airline, so the FAA won’t get to ruin the party. If this helps build up US Airways’ efforts to get bought, then that’s good news for the airline.

Never a dull moment inside the Beltway, that’s for sure.

The final order has been released from the FAA and, in short, the tentative order stands. The FAA is requiring that Delta divest 14 slot pairs at Washington/National and US Airways divest 20 slot pairs at New York/LaGuardia before being allowed to complete their slot swap. This would then give Delta a net increase of 105 slot pairs at LaGuardia and US Airways 28 slot pairs at Washington/National. Because of this, I am issuing a tentative order awarding the Cranky Jackass Award to the FAA. The comment period is now open and a final order will be issued pending further information.

The history here is a long one. Delta wants to “win” New York while US Airways wants to focus on its profitable operation in Washington. This swap provided a unique opportunity for the two carriers to play to their strengths, improve the offering for customers (bigger airplanes, additional routes) and instantly improve their bottom lines. The only problem? They needed a waiver from the FAA which would allow US Airways to transfer the LaGuardia slots. Slot transfers had been prohibited in recent years thanks to a temporary order that is still in effect.

The FAA came back and tentatively approved the waiver with extremely onerous conditions. The most onerous condition of all was the one requiring Delta to divest 12 of the 42 slot pairs it was proposing to transfer at National. It wanted the slots to go to a new entrant or limited incumbent (airline without a lot of flights there already).

US Airways and Delta weren’t happy about this, but they came back with a different offer. US Airways said it would give 15 slots up at LaGuardia (5 each to WestJet, Spirit, and AirTran) and Delta would give 4.5 slots at National. This was far below what the FAA asked for, but it was an attempt at compromise.

Now, the FAA has issued its final order affirming its tentative order. The only difference? The size of the bundles in which slots must be divested. The total number doesn’t change, and this just makes no sense to me at all.

Much of the final order is spent responding to accusations that the FAA doesn’t have the authority to require these divestments. I couldn’t care less about that. The question here is what is going to be best for everyone involved?

The FAA goes on to use some fairly strange logic to support its position. The argument is one we’ve heard before. US Airways and Delta will increase their dominance at each airport and that’s a bad thing that will result in higher fares. To offset that increased dominance, they’re requiring that the airlines divest all these slots to give to low cost carriers.

This logic works just fine if the low cost carriers were actually going to use the slots to fly to some of the markets where they are concerned about competition, but that’s far from what will happen. Instead, we’ll see the low cost carriers use slots to fly on the busiest routes that already have competition. The small cities end up worse off.

Let’s look at JetBlue. As part of their American swap, they found a way to get nine flights at Washington/National. Did they send those to Buffalo or Roanoke? Yeah right. They put seven of them in Boston, where American, Delta, and US Airways already fly. They also put one in Orlando, where US Airways and AirTran already fly. Lastly, they put one in Ft Lauderdale, where US Airways and low fare king Spirit already fly.

This says nothing bad about the low cost carriers. It just shows that where low cost carrier service works, there are already a good number of options. But the most important lesson here? While the FAA is whining about airlines not being able to get into National and LaGuardia, JetBlue went in and got nine slots all by itself. Other airlines could do the same if they so chose. They just don’t want to pay the price for entry.

By taking away slots from US Airways and Delta, smaller cities will lose service while bigger cities simply gain more. The FAA complains that Delta has already said it will stop serving Roanoke, Virginia from LaGuardia, but do they really think that by giving a bunch of slots to low cost carriers, Roanoke will somehow maintain service to New York? Please.

So why is my order giving the FAA the Cranky Jackass award tentative? Well, I want to see how this all plays out before making it final. If the airlines do decide to go forward with this (which seems highly questionable at best, I believe a federal appeal is on its way), then I’ll want to see which low cost carriers get the slots and where they’ll fly. I know what I expect to happen, but I’ll wait to see it before issuing the final order.