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March 5, 2010

Southwest Shows Interest in Buying LaGuardia and National Slots if Delta and US Complete Swap

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Written by: Julie Vessigault
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Southwest 737 sitting on the ramp at La Guardia Airport. (Photo by Matt Smith)

According to an FAA memorandum, legal representatives from Southwest Airlines recently initiated a conference call with the Department of Transportation in which the carrier expressed an interest in understanding the mechanics of the possible DOT-mandated sale of Delta and US Airways slots at LaGuardia and Reagan National airports. The DOT ruled in early February that a proposed trade of slots between Delta and US at the two airports would only be allowed to proceed if each airline were to sell some of their slots.

The conference call, in which Southwest spoke with DOT’s Assistant Chief Counsel for Regulations, Rebecca McPherson, took place on February 12th. Just days before, the DOT gave Delta and US Airways tentative approval of their plan, but with the sales stipulations.

Under the original swap plan, US would receive 42 slot pairs at DCA, while Delta would get 125 slot pairs at LGA. Regulators ruled that in order for the deal to go through, 14 of the DCA slot pairs and 20 of the LGA slot pairs would have to be sold, and only to airlines which held 5% or less of the total slots at either airport.

According to financial news website, TheStreet.com, a spokeswoman for Southwest Airlines acknowledged that the company would file comments with the DOT – a standard procedure during the 30-day appeal process, which will be made available to the public.

So, why the petition and stipulations in the first place?

Because DCA has limited airfield capacity, a “High Density Rule” was put into effect to manage the number of aircraft operations allowed to occur each hour. Likewise, the FAA limits the number of scheduled and unscheduled operations during peak hours at LGA, makingĀ available slots at LGA and DCA are hard to come by. So, Delta and US Airways negotiated a win-win solution for each to get maximum benefits from each’s favored hub, LGA and DCA respectively.

The DOT referred to the transaction as “unique in its scope and scale”. Both US Airways and Delta have now both balked at the DOT’s requirements of divesting of several of their soon-to-be gained slots in the name of protecting the consumer from harm, once each airline gains a dominant position at LGA and DCA.

Records and comments can be found here.

About the Author

Julie Vessigault



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