Tuesday, August 30, 2011

Delta LaGuardia Growth Bid Spurs Southwest to Demand More Slots for Rivals

By Mary Jane Credeur - Aug 30, 2011 1:11 PM MT

Southwest Airlines Co. (LUV) and other carriers objected to Delta Air Lines Inc. (DAL)’s efforts to expand at New York’s LaGuardia airport through a proposed swap of takeoff and landing slots with US Airways Group Inc. (LCC)

The accord between Delta and US Airways calls for divesting 48 slots to smaller rivals, about 30 percent fewer than a previous plan that those two carriers walked away from last year. Dallas-based Southwest said in a filing that there is “no justification for such smaller divestitures.”

The Department of Transportation should “seriously consider even larger carve-outs in light of the severe -- and permanent -- negative impact that the proposed transaction will have on competition,” Southwest said in a regulatory filing posted today on the agency website.

JetBlue Airways Corp. (JBLU) and Virgin America Inc. also filed objections. The Airports Council International trade group based in Washington urged regulators to deny the proposal from Atlanta-based Delta and Tempe, Arizona-based US Airways, saying it would strip local airport authorities of control of their facilities.

Last month U.S. regulators tentatively approved the deal, which would give Delta 132 more slot pairs at LaGuardia and control of about half the flights there. In exchange, US Airways would get 42 pairs at Washington Reagan National Airport.

LaGuardia and National are so congested that they are under flight restrictions, meaning carriers must trade slots in order to grow.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

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