Last August, Delta Air Lines and US Airways proposed a swap of arrival and departure slots between Reagan National Airport in Washington, DC, and LaGuardia Airport, in New York City. This swap would concentrate each of the airlines’ schedules — US Air would gain more gravitas at Reagan National and Delta could build up their service at LaGuardia in New York.
After a back and forth with the FAA, Delta and US Airways have issued a counterproposal to the FAA’s conditions for this swap. It doesn’t protect consumers’ interests.
Initially, newspapers were full of articles about how this deal would affect the two airlines and other competing airlines. No one was concerned about how this proposed swap would affect competition and ultimately, consumers.
The Consumer Travel Alliance (CTA) at that time sent a direct email to the FAA office that was charged with reviewing the slot swaps. In their letter, the CTA urged the department to take into consideration competitive concerns and look at this transaction from the point of view of the airline consumers.
These slot machinations should also be examined in light of how airline alliances are using their ability to cobrand flights as a means to claim equal service while actually reducing flights. We need to keep in mind that the airlines have no antitrust immunity when it comes to domestic operations.
I urge you to keep passengers in mind as this decision moves forward. The media, to this point has only examined the benefits these swaps will bring to the airlines. Consumers have been forgotten. I trust that the FAA deliberations will include a close look at how these proposed changes impact the flying public.
The FAA evidently agreed and restricted the slot swap between Delta and US Airways, forcing them to divest themselves of other slots should they desire to consummate this deal.
At the last minute as comments on the proposed decision closed earlier this week, Delta Air Lines and US Airways responded with a counter proposal. They agreed to sell a reduced number of slots and proposed that DOT allow Delta and USAir to select the airlines to whom they would sell their landing and take-off rights.
In other words, Delta and USAir wanted to make sure that no airline that may seriously compete with them would be able to purchase the slots that they would have to abandon should the slot swap be permitted.
Here’s the slot swap timetable
In the original Delta/USAir August 2009 proposal, Delta would pick up 125 slot pairs at LaGuardia and US Airways gain 42 slot pairs at National.
In February 2010, FAA noting the airport dominance of the two carriers, ruled that 14 slots at National and 20 at LaGuardia would have to be divested if the proposal was going to be approved. Under the FAA ruling US Airways would control just over 50 percent of Reagan-National flights and Delta would be limited to 45.3 percent of LaGuardia operations.
Last Monday (March 22) Delta/USAir made a counter offer to the FAA. They are not proposing that they divest themselves of fewer slots and that they be allowed to hand pick which airlines will be able to purchase the slots, rather than opening slot sales to auction.
According to this scheme, Delta would pick up 110 slot pairs at LaGuardia, but give up five slot pairs apiece to AirTran, Spirit and WestJet. US Airways, meanwhile, would get to keep 37 new slot pairs at National, giving five slot pairs to JetBlue.
Should airlines control a public asset?
On principal, the FAA should not allow this kind of wheeling and dealing between airlines to usurp their slot control authority. These slots are a public asset, not the property of the airlines. Though I personally like the proposed presence of JetBlue at Reagan-National Airport, I would also like to see Southwest have a presence or at least the opportunity to bid for slots at both Reagan-National and LaGuardia rather than have theses slots divided up behind closed doors.
The Consumer Travel Alliance filed a comment supporting the position of Southwest Airlines, that negotiations regarding the slot swap should be reopened and subject to auction.