Cranky Weekly Review presented by Oakland San Francisco Bay Airport: LGA Slots Up for Bid, United’s Next Move


Interested in LGA Slots? Now’s Your Time to Shine

As Spirit continues to liquidate on its way out the door, the shuttered carrier plans to put its 22 slots at LGA — with their street value of almost $87 million — up for bid in July. While we haven’t received confirmation as of press time, rumors abound that the sale will take place on eBay and will be open to anyone with the cash…and a dream. (We’re looking at you, Avatar Airlines.)

The auction will take place on July 9 and is expected to draw interest from across the industry. FAA Administrator Brian Bedford prefers that another low-cost operator gain the slots, with the threat that if the slots are won by a legacy carrier it might retire the slots instead, effectively taking their ball and going home. While this seems a little petty, it would solve some of the air congestion problem both at LGA and in the New York airspace, making it not the worst idea ever… but still a pretty bad one.

American, Frontier, JetBlue, and Southwest seem to be the early favorites with a dark horse candidate looming in Porter Airlines. As the dominant carrier at the airport already, Delta is not considered to be a major contender for the slots.

United Isn’t Buying JetBlue, and if You Disagree, That’s a You Problem

United isn’t buying JetBlue, never was going to buy JetBlue, and doesn’t intend to do so in the future. Any if you don’t agree, well, Scott Kirby doesn’t seem to care. Speaking at the Bernstein investor conference, Kirby said it was “idiotic” to suggest that his efforts to merge with AA were a ruse or a head fake designed to make a JetBlue merger seem more palatable to the DOJ.

Kirby went on to take another jab at the Long Island-based carrier saying “the last thing I’m gonna do is buy a route network that loses money.” JetBlue’s earnings haven’t been great, that’s a fact. The airline has posted net losses for seven years in a row and its debt grows every day. So the question that needs to be asked is if Kirby is genuine here, or if it is an attempt to play 4D chess and outmaneuver everyone while driving the stock price down.

For those of you keeping score, Kirby is being nothing but straightforward with us, the traveling public. The potential merger with AA was genuine, and his lack of interest in JetBlue is also genuine. Until it’s not.

He also believes United can achieve 10% and higher pre-tax margins in 2027 provided oil prices retreat. If that comes true, then United doesn’t need JetBlue — until it does.

JetBlue’s Continues to Grow FLL

JetBlue Airways seems determined to make itself the primary carrier out of Fort Lauderdale. To take another step towards that goal, the carrier will begin serving Caracas from FLL, marking JetBlue’s first-ever foray into Venezuela. The new route makes a lot of sense for JetBlue as its Mosaic program and its points are one of the few airline programs valued better than local Venezuelan bolivar.

The airline plans to begin the service before the end of the year, but it’s still securing the proper government approval and the process to fly in Venezuela. The flight is expected to be operated by B6’s fleet of A320 aircraft which feature complimentary Wi-Fi, JetBlue’s suite of snacks (blue chips not included), and a State Department travel advisory. The U.S. embassy in Caracas said it would always be available for any U.S. citizen in Venezuela, with the exception of those that book Basic Economy.

JetBlue will join both AA and United in flying to Caracas. American resumed CCS service from its Miami hub on April 30. United plans to follow with flights from Houston/IAH beginning on August 11.

Air Canada’s FAs Seeing Red over Rouge Ops

The Canadian Union of Public Employees — the labour group representing Air Canada’s flight attendants — filed a grievance claiming the carrier is out of compliance in its contract with the union which states that Air Canada Rouge may operate a maxiumum of 50 aircraft, and that it takes the union’s consent for AC to exceed that figure. Earlier this month, Air Canada announced 52 of its current mainline aircraft would be “transitioning to Rouge.”

The carrier is claiming the transition is temporary, but the union says that clever workaround is not valid and is still violating the scope clause in the contract. This comes as the union and airline are currently in the midst of another Rouge-related grievance, in which CUPE claims that current upgrades to the Rouge project makes it too similar to mainline Air Canada. The union says Rouge was supposed to have “clear and defined differences in service, configuration, and branding,” but that current upgrades to include free beverages including beer and wine, seatback screens, and extra legroom offerings “blur the lines” between the two products.

The two sides are expected to gather tonight at a Montréal-area bar to enjoy a Molson and watch the NHL playoffs while settling their differences.

American Goes with Starlink

The Wi-Fi revolution at 30,000 feet continues to be dominated by SpaceX’s Starlink, as American Airlines becomes the latest major carrier to ink a deal to provide high-speed internet at high-flying altitudes for its customers, at least some of them.

American was weighing choices between Starlink and Amazon to outfit its more than 500 Airbus narrowbodies (sorry, Boeing) with connectivity. The installation process will begin early next year, and if it goes anything like most American flights, it’ll be delayed, canceled, and have several aircraft swaps along the way.

Most U.S. carriers have sided with Starlink with American joining Alaska (and its Hawaiian subsidiary), Southwest, and United to in the SpaceX family. Delta and JetBlue have gone against the grain, partnering with Amazon’s LEO to provide in-flight connectivity. Starlink famously provides gate-to-gate coverage, especially important for American customers to wait out their delays on the ground by streaming their favorite YouTube creator, while also allowing savvy passengers to track their precise location in realtime on FlightRadar24 to see how much longer until a gate opens up upon arrival in Chicago.

  • Air China is growing its current cargo order with Airbus up to 10 A350F aircraft.
  • Air India is making capacity cuts.
  • Avianca is adding two new routes to FLL, replacing Spirit on both.
  • Azores Airlines is prepping for a sale.
  • Azul is expected to be listed on the NYSE American marketplace Monday.
  • Cebu Pacific is having money problems.
  • China Airlines is adding two more B777Fs.
  • Jazeera Airways is adding service between Kuwait City and London/LTN.
  • Jeju Air is resuming service between Jeju Island and Seoul/ICN.
  • Philippine Airlines is offering new redemption options for Qantas customers.
  • Qantas has again delayed the launch of its nonstop flight from Sydney to London/LHR.
  • Ryanair made a major payment to cut down its debt.
  • Singapore is increasing its service levels to Amsterdam.
  • Southwest says everything is fine.
  • TAAG plans to return to China.
  • TAROM is being told by the Romanian gocvernment to rein in its spending.
  • United is adding three: Newark to St. Croix (1x weekly) and Washington/Dulles to both Los Cabos (4x weekly) and Orange County (1x daily)

Anyone who’s struggling to meet new people should take up skiing.

Today was my first day on the slopes and I met two cool guys my age who were both paramedics. I also met three lovely nurses, an orthopedic surgeon, and I very nearly met Jesus too.

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Andrew Avatar

18 responses to “Cranky Weekly Review presented by Oakland San Francisco Bay Airport: LGA Slots Up for Bid, United’s Next Move”

  1. See_Bee Avatar
    See_Bee

    What’s stopping DL from bidding up the price of the slots in order to win and call the FAA’s bluff?

    Either they get more slots and move further up the S curve or they grow their seat share by having seats removed from the market while benefitting from an easier operating environment (i.e., bigger piece of a smaller pie)

    1. Brett Avatar

      See_Bee – I don’t think we really know yet. If I were Delta and realized that was an option, I’d do it. But I imagine there are other mechanisms in here that will probably prevent something like that.

  2. CraigTPA Avatar
    CraigTPA

    The LaGuardia slot auction situation could get interesting – if the feds try to cancel the slots if a LCC/ULCC doesn’t win, I can see Spirit’s creditors suing to recover their lost asset value. Same if there isn’t a mechanism to disallow DL from bidding and then they won.

    If they’re only insisting on a LCC rather than a ULCC, does JetBlue still qualify? If it has to be a ULCC, I guess that means Frontier,unless Breeze decides to jump in. (I pondered Avelo for a moment and now my sides hurt from laughing too hard.) But again, interfering with the auction is likely to bring legal action.

    I’m not sure any airline is going to want all the LGA slots, but I can see some combination of Frontier, JetBlue, and Porter going in. Porter will want to add YTZ with preclearance now open and perhaps either YUL or YOW as well, they’ve really been piling on at Ottawa.

    I don’t believe Kirby about JetBlue, at least not if the stock price drops enough.

    Not surprised with CUPE’s arguments with Rouge, only that they haven’t escalated sooner, as Rouge has had to move to improve in-flight service to compete with Porter.

  3. Brett Avatar

    CraigTPA – They’ve definitely required slots to go to either new or limited entrants before, which is I guess the legal justification for blocking some airlines. By that metric, I would think JetBlue would be eligible. But of course, the creditors add a new wrinkle here. It will be really interesting to watch.

  4. Atjya Avatar
    Atjya

    Whatever happened to Spirit’s old Newark flight timings? They flew to 20 destinations from there. A few were multiple times a day. It was an operating base for them.

    1. Brett Avatar

      Atjya – I don’t think those can be sold, btu maybe someone else knows better than I.

      1. Atiya Avatar
        Atiya

        I know flight timings can’t be sold. I was wondering when the FAA is going to allocate those timings to other airlines like Frontier, Allegiant or Breeze Airways.

        1. Brett Avatar

          Atiya – Ah, misunderstood. I have no idea what’s happening with that.

  5. DesertGhost Avatar
    DesertGhost

    Maybe I’m mistaken, but it’s possible that the government retiring the slots at La Guardia might be a violation of the Fifth Amendment, which states that the government can’t take private property for public use without “just compensation”. In other words, the government will probably have to compensate Spirit’s estate for the slots if it wants to retire them to free up air space.

    1. Atiya Avatar
      Atiya

      How much did Spirit pay for those slots?

    2. Kyrie Avatar
      Kyrie

      The slots are not private property.

  6. Yo Avatar
    Yo

    Avatar Airlines, Family flights on 747-200’s from LaGuardia to Montreal, 6X daily! We lose money on every seat…but we make up for it in volume!

  7. Paper Boarding Pass Avatar
    Paper Boarding Pass

    Not all slots need to go to a single airline:
    – Breeze is cost adverse, but a few slots at DCA are tempting.
    – Same for Frontier with additional slots for Denver
    – JetBlue would like another slot for SJU, if not FLL
    – Alligiant/Sun Country could put their hat in the ring for a few as well

  8. Chris Avatar
    Chris

    Long Island CITY-based carrier JetBlue HQ is in Queens, aka NYC, and not Long Island.

    1. 1990 Avatar
  9. Andrew Young Avatar

    Opportunity for a terrific airline quiz question in the CH Aviation link for the TAAG to Beijing story: So who are the 6 African airlines currently flying to Beijing? TAAG will be the seventh.

    Obviously a total geek like Cranky would get this but not as easy as you’d think.

    1. 1990 Avatar
      1990

      Trick question. Ethiopian Airlines (and Cargo), EgyptAir (and Cargo), Air Algérie, and Royal Air Maroc. So you counting cargo separately?

      1. Andrew Young Avatar
        Andrew Young

        Not a trick question…. according to that CH Aviation article, which infers only passenger services, the other six are Ethiopian, Egyptair, RAM, Air Algerie, Kenya AW and Air Tanzania.

        https://www.ch-aviation.com/news/167557-angolas-taag-schedules-resumption-of-china-flights

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