American Airlines, JetBlue propose swap of slots in New York, Washington
07:28 AM CDT on Thursday, April 1, 2010
By TERRY MAXON / The Dallas Morning Newstmaxon@dallasnews.com

The air battle over New York is heating up again.

Countering a major move by Delta Air Lines Inc., American Airlines Inc. said Wednesday it is strengthening its operations at two of the three major New York airports.

"We are in a tough, important fight in New York – a fight we intend to win," American chairman and chief executive Gerard Arpey told employees in an internal message.

American is adding a total of 31 flights out of LaGuardia Airport and Kennedy International Airport, and it is investing at least $30 million to upgrade its two LaGuardia concourses.
It is also studying expanding its new Kennedy terminal so Oneworld partner British Airways PLC can join it there.

American announced a deal with JetBlue Airways Corp. to pick up some takeoff and landing slots at Kennedy. JetBlue will gain some of American's slots at Ronald Reagan Washington National Airport, allowing JetBlue to begin service there in November.

JetBlue CEO Dave Barger (left) and American CEO Gerard Arpey exchange model airplanes. They forged a deal trading some airport slots and feeding each other passengers. " JetBlue CEO

Dave Barger (left) and American CEO Gerard Arpey exchange model airplanes. They forged a deal trading some airport slots and feeding each other passengers.

In addition, JetBlue and American will feed passengers to each other through New York and Boston.

"Our announcements today demonstrate our strong commitment to New York, and we look forward to expanding that commitment in the months and years to come," Arpey said.

"We have a long history in New York, and we're going to grow those roots with new routes, new partnerships, even deeper local relationships and the kind of service that New Yorkers expect and that will attract more visitors and commerce to the city," he said.

The deal underlines the growing competition among airlines at New York, a fight that had been muted somewhat in recent years by deep losses for many carriers.

Delta's plans
Delta, the world's largest airline since its October 2008 merger with Northwest Airlines Inc., wants to expand its operations significantly at LaGuardia. It has a deal with US Airways Inc. to trade slots to boost Delta's LaGuardia flights in exchange for US Airways getting Delta slots at Washington National.

Delta spokeswoman Heather Faulkner said the carrier "remains very committed to the New York market." She pointed to investments in business-class service on transcontinental flights, sponsorships of New York sports teams and facilities, and 30 international flights added at Kennedy since 2006.

Delta and American have stepped up their battle for business at Kennedy International Airport and elsewhere in the New York area, where Continental is the dominant carrier. "

Delta and American have stepped up their battle for business at Kennedy International Airport and elsewhere in the New York area, where Continental is the dominant carrier.

"Moreover, Delta, which has invested more than $70 million on facilities improvements in the market, plans to dramatically enhance our customer-facing presence at JFK and LaGuardia Airports," she said. "We are working very closely with the Port Authority of New York & New Jersey to implement this plan and will announce more specifics in the future."

Among the new American service announced Wednesday are flights from LaGuardia to Minneapolis-St. Paul, Minn., and Atlanta, two major Delta hubs, and to Charlotte, N.C., US Airways' largest hub. American Eagle, American's regional unit, will begin flights from Kennedy to Cincinnati, Ohio, a smaller Delta hub.

Delta announced March 18 that it would begin a shuttle service between LaGuardia and Chicago O'Hare on June 10. LaGuardia-O'Hare is a major route for American and United Airlines Inc., which both operate Chicago hubs, and Arpey said American would add LaGuardia-Chicago flights this summer.

The number of takeoffs and landings at Kennedy, LaGuardia and National are limited, and airlines need the slots to operate at those airports.

If Delta's deal goes through as requested, Delta will have 49 percent of LaGuardia's slots, up from its 24 percent share. American's share is 21 percent.

Delta alone carried 11.5 percent of LaGuardia's passengers in 2009, behind American's 17.7 percent. However, Delta controlled 27 percent of the traffic if Northwest, Delta regional carrier Comair Inc., and other partners are added in. Even with its American Eagle affiliate, American trailed with 21.4 percent.

At Kennedy, JetBlue was the 2009 leader, with more than 25 percent of the traffic, ahead of Delta's 18.1 percent and American's 14 percent. With Northwest and regional carriers included, Delta carried nearly 24 percent of Kennedy's passengers. Delta has 16.4 percent of Kennedy's international passengers, ahead of American's 14.2 percent.

Continental's clout
But the largest carrier in the New York area is Continental Airlines Inc. by virtue of its Newark, N.J., connecting hub. Last year, it carried 18.8 percent of the passengers handled by the three airports, ahead of Delta's 11.7 percent and American's 11.3 percent. Including regional partners, Continental carried 24 percent of the traffic, compared with Delta's 18.3 percent and American's 12.9 percent.

Among provisions of the American-JetBlue deal are:
•American would pick up 12 pairs of landing and takeoff slots at New York Kennedy from JetBlue.

•JetBlue would obtain eight pairs of slots at Washington National and one slot pair at White Plains, N.Y., from American.

•American would feed passengers to JetBlue's U.S. flights on routes on which they do not compete.

•JetBlue would feed passengers to American at Boston Logan Airport and New York Kennedy to 12 international destinations that American serves from those cities.

•The two will also consider other areas of cooperation.

American said "certain portions" of its deal with JetBlue may be subject to regulatory review, while JetBlue said "regulatory approval is not required for this transaction."

At a news conference Wednesday with New York Mayor Michael Bloomberg, Arpey and JetBlue CEO Dave Barger didn't rule out the possibility that JetBlue might some day join Oneworld, the airline alliance started by American, British Airways and others.

JetBlue's largest shareholder, Lufthansa, belongs to the competing Star Alliance. JetBlue also has deals to exchange passengers with Lufthansa and Aer Lingus.