Southwest to increase New York presence with United and Continental's Newark slots
Shares in Southwest declined 1.3% yesterday, following a 2.9% gain on 27-Aug-2010.
- Southwest Airlines has reached an agreement with United Airlines and Continental Airlines to lease 18 pairs of take-off and landing slots at Newark Liberty International Airport.
- The leased slots will allow Southwest to double its services to the New York City area and integrate Newark into its national route network.
- The leasing of the slots will begin in late March 2011 and be fully implemented by June 2011, contingent upon the closing of the Continental and United merger and certain governmental approvals.
- Southwest sees significant growth potential in the New York City/Newark market and aims to provide low fares and competition in the region.
- Shares in Southwest declined 1.3% following the announcement of the slot lease agreement.
- Other international companies trading in New York, including GOL, TAM, Grupo Aeroportuario del Pacifico (GAP), Aeroportuario del Sureste (ASUR), China Southern Airlines, and Babcock & Brown Air Ltd, also experienced declines in their share prices.
Late on 27-Aug-2010, Southwest confirmed it had reached an agreement with United Airlines and Continental Airlines, under which the US LCC would lease 18 pairs of take-off and landing slots during peak and off-peak travel times at Newark Liberty International Airport.
The slots would enable the carrier to double the number of services to the New York City area. Southwest already operates eight daily services from LaGuardia, and 21 daily services from Islip Macarthur Airport on nearby Long Island. New York represents just a small part of Southwest's total business, but has significant potential for growth according to the LCC.
The leasing of the first of the 18 daily slot pairs will begin in late Mar-2011 and the leasing arrangement will be fully implemented in Jun-2011. Continental and United operate 442 daily round-trip flights into and out of Newark Liberty, with the lease deal contingent upon the closing of the Continental and United merger by 30-Nov-2010, and certain governmental approvals. The slots are spread throughout the day and would allow Southwest to integrate Newark into its national route network
Southwest Airlines Executive VP Strategy and Planning, Bob Jordan, commented: "We are excited by the opportunity to initiate service from Newark, New Jersey, and we plan to enable that service starting next March through continued flight schedule optimisation using our existing fleet. We've seen tremendous demand for Southwest Airlines in the New York City/Newark area in the past year ... Adding Newark provides an excellent complement to our LaGuardia and Long Island service ... This service also will provide a needed injection of low fares and competition into the New York/Newark market."
International companies trading in New York close lower
Meanwhile, international companies trading in New York closed lower Monday as weak personal income and manufacturing data highlighted a slowdown in the economic recovery and overshadowed deal activity.
Specifically, shares in GOL slipped 2.2%, with TAM slipping 1.8%, while shares in Grupo Aeroportuario del Pacifico (GAP) declined 3.1% and shares in Aeroportuario del Sureste (ASUR) lost 3.7%. Shares in China Southern Airlines, meanwhile, declined 2.9%, while shares in Irish aircraft leasing company, Babcock & Brown Air Ltd, decreased 2.6%.
Selected LCCs daily share price movements (% change): 30-Aug-2010
Source: Centre for Asia Pacific Aviation, Yahoo! Finance & Reuters