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July 21, 2011

Feds Approve Controversial Slot Swap Between Delta and US Airways

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The US Department of Transportation on Thursday announced a tentative approval of a deal proposed by Delta Air Lines and US Airways to exchange landing and takeoff rights at airports in New York and Washington, DC — a deal originally blocked by regulators citing anti-competition concerns.

Delta terminal at LaGuardia Airport

Delta terminal at LaGuardia Airport. (Photo by Matt Molnar)

Approval comes nearly two years after the airlines originally announced a plan to exchange slots at New York’s LaGuardia Airport and Washington’s Reagan National Airport. The interim included a lawsuit filed by Delta and US Airways against the federal government and several rounds of proposed compromises flying back-and-forth between government regulators and the airlines.

The government’s tentative approval essentially green lights the most recent compromise offered by the airlines, in which Delta will receive 132 slot pairs at LaGuardia while US Airways will get 42 slot pairs at Reagan National. Delta would become the largest carrier at LaGuardia and US would extend their lead at Reagan. To preserve some competition, they will be forced to sell eight slot pairs at DCA and 16 at LGA in a blind sale including only bidders who have little or no service at each airport.

Atlanta-based Delta and Tempe, Ariz.-based US Airways released a joint statement applauding the approval and reiterating their commitment to the plan. “Upon final approval we intend to move forward with the plan, as conditioned by the department, which will enhance competition and allow the airlines to improve service, consumer choice, modernize facilities and create jobs at both airports,” said the airlines.

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