UPDATE: Delta, US Air To Swap Slots, Expand Domestic Service
August 12 2009 - 10:56AM
Dow Jones News
US Airways Group Inc. (LCC) and Delta Air Lines Inc. (DAL) plan
to swap 167 pairs of take-off and landing slots at two of the
nation's most congested airports, with each airline adding service
to small U.S. cities.
The move comes as U.S. airlines have cut capacity to cope with a
decline in both business and leisure travel.
At the same time, airlines are coming under increasing scrutiny
from U.S. regulators, especially at New York's LaGuardia, where
slots for each take-off and landing are tightly controlled by the
Federal Aviation Administration.
The proposal would more than double Delta's non-stop flights at
LaGuardia, adding 125 slots, and essentially forming a hub for
domestic flights. Delta, the world's biggest airline, already
operates an international hub out of New York's John F. Kennedy
International Airport.
Delta declined to comment on how profitable it expects the
transaction to be, a spokesman said Wednesday. The carrier plans to
add service to more than 30 small and medium-sized markets.
US Airways will get 42 pairs of slots at Ronald Reagan
Washington National Airport, now operated by Delta. It will also
acquire rights to fly to two new markets, Tokyo and Sao Paulo.
Delta said the loss of those slots won't affect passenger
service.
US Airways will keep a "significant" presence at LaGuardia, the
low-cost carrier said, remaining as the third-largest airline
there. But it plans to cut 300 jobs at its regional airline
subsidiary, Piedmont Airlines, eliminating Express flights. The
move is expected to boost US Airways' bottom line by more than $75
million annually, Scott Kirby, president, said in a message to
employees.
Doug Parker, US Airways' chairman and chief executive, said the
deal will add service from Washington, D.C., to smaller
communities, serving 15 new locations from Reagan National. It will
increase seat capacity by one-third through the new flights and use
of larger planes.
The swap at LaGuardia will consolidate all of Delta's operations
into an expanded main terminal with 11 extra gates. Chief Executive
Richard Anderson said increasing presence in New York is a key part
of the airline's long-term strategy. Delta plans to invest $40
million at LaGuardia, once the deal is approved.
Delta spokesman Kent Landers said Delta will ask the FAA to
grant a waiver from temporary slot restrictions at LaGuardia. The
U.S. Department of Justice and Department of Transportation also
need to sign off on the pact.
The airline decided earlier this decade to make New York into a
hub, and has made investments in the region to add new routes and
expand advertising.
Southwest Airlines Co. (LUV) the largest passenger carrier
within the U.S., said earlier this year it would add service to
LaGuardia.
Shares of US Airways recently were up 4% at $3.03, while Delta
rose 2.4% to $7.19.
- By Ann Keeton, Dow Jones Newswires; 312-750-4120;
ann.keeton@dowjones.com