Delta, US Airways slot swap near
The airlines have tried and failed twice to get the FAA to agree to the slot swap which swaps US Airways slots at LGA for Delta’s slots at Washington National making both that much stronger in their their already strong markets.
The FAA refused, even after Delta and US Airways made a significant number available to new entrants, just not Southwest. But the FAA wanted more slots made available for new entrants and low-cost carriers. Indeed, it almost seemed as if the FAA were acting on behalf of Southwest which has only eight daily flights at LGA. However, the competitive landscape has vastly changed in the two years since the FAA’s last tentative approval which called for concessions that were unacceptable to the two.
First, not only have Delta and Northwest completed their merger, but the merger between Continental and United released slots at Newark which Southwest now has making its New York metropolitan footprint larger. In addition, Southwest just closed its acquisition of AirTran enlarging its domestic footprint considerably.
Delta has been wanting to strengthen its New York position for some time while, at the same time, American has restructured its system, making New York one of its five cornerstone markets on which it is basing its future. Both are battling for the corporate traveller and have poured billions into upgrading their New York facilities and services.
Bloomberg reported that the slot swap makes American vulnerable there for the first time in 80 years. But the power the swap gives Delta at LaGuardia may give FAA pause. If the swap was completed as originally planned, Delta’s share would reach 51% of LGA departures and 49% of slots.
Bloomberg said Delta is about to take over half of LGA slots and may double its daily departures once it is able to get the US Airways slots. It said the Phoenix-based carrier expects a final agreement within weeks.
“For the first time in perhaps its 80-year history, American is facing a truly serious contender for the business traveller at LaGuardia,” Forrester Research Analyst Henry Harteveldt told the news service which said Delta’s merger with Northwest pushed its LaGuardia share to 29% last year, up seven points from 2005. The growth came as American dropped from 24% to 21%. Meanwhile, Continental’s Newark operation is 27% of the New York market compared with Delta’s 20% and American’s 13%.