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By Mike Mitchell |
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February 10, 2010
- The Department of Transportation announced that it has tentatively
decided to grant the waiver requested by Delta Air Lines and US Airways
to allow the carriers to proceed with their proposed slot swap
transaction at Reagan Washington National Airport (DCA) and
The proposed
waiver is contingent on the requirement that the airlines sell some of
their slot interests to carriers with no or limited service at the two
airports in order to lessen the harm to consumers that might otherwise
result from the applicants' increased dominance at DCA and LGA.
DOT issued a
notice today that describes in detail the transaction, the Department's
tentative findings and its proposals to remedy potential harm to
consumers. The notice provides 30 days for the public to comment on the
transaction and the Department's tentative findings before the
Department issues a final decision. |
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In August of 2009, Delta Air Lines and US Airways submitted a joint
waiver request from the prohibition on purchasing operating
authorizations ("slots" or "slot interests") at LaGuardia Airport (LGA).
The carriers requested the waiver to allow them to consummate a
transaction in which Delta would transfer 42 pairs of slot interests to
US Airways at Ronald Reagan Washington National Airport (DCA),
international route authorities to
US Airways would transfer 125 pairs of slot interests to Delta at LGA,
and would lease an additional 15 pairs of LGA slot interests with a
purchase option, together with terminal space in LGA's Terminal C. DOT
has evaluated the proposed transaction and tentatively determined that,
while the proposed transaction has a number of benefits, a grant of the
waiver in its entirety would result in a substantial increase in market
concentration that would harm consumers. Accordingly, while DOT has tentatively decided to grant Delta Air Lines' and US Airways' joint waiver request in part, DOT has tentatively determined that the public interest would best be served by creating new and additional competition at the airports to counterbalance the potential harm to consumers. To achieve that goal, DOT proposed waiver would require the divestiture of 14 pairs of slot interests at DCA and 20 pairs of slot interests at LGA to new entrant and limited incumbent carriers. |
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In a letter to DOT
dated August 24, 2009, Delta and US Airways stated approving the
transfer would enable Delta to maximize the efficient utilization of the
LaGuardia Operating Authorizations by substantially increasing the
average seat capacity of the aircraft which will be using the
transferred Operating Authorizations.
As a result of the
transaction, capacity at LaGuardia will increase by 2.3 million seats, a
13 percent improvement in airport capacity all with no increase in the
total number of LaGuardia operations. US Airways would add 15 nonstop
points to its DCA network and offer an additional 1 million seats to Delta and US Airways responded on Tuesday stating,
?Delta and US
Airways are disappointed in the DOT?s decision that, if implemented,
would negatively impact the consumer and economic benefits created by
the proposed transaction by divesting 16 percent of the transaction at "Our goal remains to increase access for customers in small communities to LaGuardia and Washington-Reagan National airports. We appreciate the thousands of employees, customers and elected and community leaders who have voiced their support for our transaction. However, we expect that if this order is implemented as proposed the transaction will not go forward and significant consumer benefits will never be realized. Both airlines will review the DOT's proposed rulemaking to determine our next steps." |
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