Justice Department Still Not Completely Satisfied As Airlines Trade Positions In New York, Washington, DC

The DOT has given final approval to a slot swap proposed by Delta and US Airways that will mean changes in the number of flights each airline offers at LaGuardia and Reagan National airports.

The two airlines have been working on the deal for more than two years. On May 23, Delta and US Airways announced a new agreement to transfer takeoff and landing rights at New York's LaGuardia and Washington D.C.'s Reagan National airports, which will enable the carriers to expand service and increase competition at two of the nation's key cities, and provide the opportunity for additional access to LaGuardia and Reagan National for new entrants and airlines with a limited presence at the airports.

Under the new agreement, Delta will acquire 132 slot pairs at LaGuardia from US Airways and US Airways will acquire from Delta 42 slot pairs at Reagan National, as well as the rights to operate additional daily service to Sao Paulo, Brazil in 2015. Delta also will pay US Airways $66.5 million in cash. In addition, the airlines will divest 16 slot pairs at LaGuardia and eight slot pairs at Reagan National to airlines with limited or no service at those airports.

In a joint news release, the two airlines expressed their appreciation to the DOT, which approved the transaction on October 10. The carriers said the DOT’s final order, subject to certain conditions, represents a clear recognition by the Obama Administration that the slot transaction is in the public interest because of the service benefits and efficiencies that would result in both New York and Washington, DC.

The Justice Department, however, was not so certain. The Street reports that the agency plans to look into possible anti-trust implications at Reagan National Airport. 

That didn't stop the airlines from issuing very positive statements. “We want to thank DOT and the FAA for their final approval of the slot transaction, which will enhance competition, create new jobs, reduce air space congestion in New York City and greatly increase travel choices for our customers in New York,” said Richard Anderson, Delta's chief executive officer. “We agree with the DOT that the slot transaction has significant consumer benefits in both New York and Washington, DC, and look forward to implementing our agreement with US Airways and rolling out our expanded LaGuardia schedule next year. We also look forward to bringing substantial new construction and service jobs to New York as facilities are expanded and modernized to create a Delta hub operation.”

“We want to thank DOT Secretary Ray LaHood, FAA Administrator Randy Babbitt, and their teams, and applaud their hard work over the past two plus years. We appreciate their willingness to view the overall, indivisible benefits of the transaction to both Washington, D.C., and New York after a thorough review,” said US Airways Chairman and CEO Doug Parker. “The decision of DOT and FAA is a great example of the regulatory process working to the benefit of consumers by promoting competition and expanding consumer choice, fostering economic development and creating jobs in both Washington, D.C., and New York. We look forward to the opportunity to better serve our existing and new customers in the Washington region and small and medium-sized communities around the eastern United States.”

FMI: www.dot.gov, www.usairways.com, www.delta.com