US Department of Justice (DoJ) outlined (12-Nov-2013) the process for the divestiture of slots at New York LaGuardia and Washington Ronald Reagan National airports, as part of the DoJ's settlement of its antitrust lawsuit against the proposed merger of American Airlines and US Airways. Under the terms of the settlement, JetBlue Airways at Washington National And Southwest Airlines at New York LaGuardia will be given the opportunity to acquire the slots they currently lease from American Airlines. The remaining 88 slots at Washington National and 24 slots at New York LaGuardia, plus any JetBlue or Southwest decline to acquire will be grouped into bundles, taking into account specific slot times to ensure commercially viable and competitive patterns of service for the recipients of the divested slots. American and US Airways will divest these bundles, as well as rights and interests in any gates and ground facilities as necessary to support the use of the purchased slots. Two gates at each of Boston, Chicago O'Hare, Dallas Love Field, Los Angeles and Miami airports will be transferred to new owners "on commercially reasonable terms." The acquirers of the slot and gate divestitures also require approval of the department. Preference will be given to airlines at each airport that do not currently operate a large share of slots or gates. [more - original PR]
DoJ outlines slot divestiture process following American/US Airways settlement
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Despite the extra time regulators are taking to review the merger, a full-blown rejection of the deal is unlikely given the drastically smaller scope created by Alaska and Virgin America. Indeed, the combined airline creates a more viable entity to compete with the mega-carriers created by previous mergers; not a threat to consumer choice.
Close scrutiny by US regulators was always expected, as are some form of concessions in order for the agreement to ultimately gain the government’s approval. The form those concessions could take has spurred significant speculation from slot divestitures to the relinquishment of gates. Perhaps the key for Alaska is ensuring that the composition of those concessions does not compromise the economics of the transaction.
US airlines and the Cuba route awards Part 2: Cuba's smaller airports face a major influx
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Although Cuba holds much promise, an ample level of guesswork will be necessary as airlines navigate dealing with the Cuban government in order to ensure a smooth service launch. Some level of passenger education is also necessary in order to create the right set of customer expectations for travel to Cuba.
(This is Part 2 in a series of reports examining route awards between the US and Cuba. Part 1 focused on awards rights from the US to Havana.)