Delta, US Airways To
Transfer Flying Rights In NY And Washington, D.C.
By Daniel Baxter
May 24, 2011 - Delta Air Lines and US Airways announced
a new agreement to transfer takeoff and landing rights
at New York's LaGuardia and Washington D.C.'s Reagan
The agreement, filed on Monday with the Federal Aviation
Administration (FAA), revises a 2009 transaction agreed
between Delta and US Airways and approved by the DOT,
but under terms not acceptable to the carriers, and
The new agreement enables Delta and US Airways to expand service and increase competition at two of the nation's key cities, and provides the opportunity for additional access to LaGuardia and Reagan National for new entrants and airlines with a limited presence at the airports.
agreement, Delta would acquire 132 slot pairs at LaGuardia from
US Airways and US Airways would acquire from Delta 42 slot pairs
at Reagan National and the rights to operate additional daily
service to Sao Paulo, Brazil in 2015, and Delta would pay US
Airways $66.5 million in cash.
addition, the transaction could result in the divestiture of up
to 16 slot pairs at LaGuardia and eight slot pairs at Reagan
National to airlines with limited or no service at those
airports. The completion of the transaction is subject to
certain closing conditions, including government and regulatory
approvals. A slot pair is the authority to operate one takeoff
and one landing.
agreement, Delta will enhance competition in New York, which is
already one of the most competitive aviation markets in the
world, by expanding the passenger capacity at LaGuardia by as
many as 4 million seats annually without increasing congestion,"
said Richard Anderson, Delta's Chief Executive Officer. "Our
expanded presence at LaGuardia will double our available
destinations, offering customers more frequent and convenient
service at New York's preferred airport for business travel."
US Airways' Chairman and Chief Executive Officer Doug Parker said, "This agreement further strengthens our commitment to increase service and create more options for our customers wishing to travel to and from Washington, D.C. As a result of this transaction, many communities, including several smaller ones, will be able to enjoy additional nonstop service to our nation's capital."
transaction will provide significant direct benefits to consumers flying
to and from New York and Washington, as well as consumers traveling to
other destinations along the East Coast as the two airlines enhance
their networks. These benefits are generated by improved connectivity,
enhanced service and increased efficiency at both airports.
In addition, the competitive landscape in both cities has changed significantly since the transaction was first proposed in 2009. New entrants and smaller carriers, including AirTran Airways, JetBlue Airways and Southwest Airlines, have gained considerable access to slots at both LaGuardia and Reagan National and expanded service at these and other airports in the New York and Washington regions.
between United Airlines and Continental Airlines and Southwest and
AirTran have dramatically sharpened competition on the East Coast
generally and particularly in the New York and Washington regions.
Nonetheless, to address concerns previously raised by the Department of
Transportation, the agreement provides for the divestiture of up to 16
slot pairs at LaGuardia and eight at Reagan National if required by the
transaction has generated significant support from elected officials and
community leaders in New York and Washington. In addition, the City and
State of New York and both U.S. Senators from New York have supported
the proposal, as have members of Congress representing New York, elected
leaders in small communities and airports across the nation.
The airlines will
dismiss their appeal of the DOT's order regarding the original 2009
transaction that is currently pending in the U.S. Court of Appeals in
Washington. Dismissing the appeal clears the way for DOT to consider the
operation at LaGuardia will allow more and improved connecting service
in New York, and ensure economically viable service to small
communities, while creating an expanded network that will be
particularly valuable for New York business customers. The airline will
approximately double the number of nonstop destinations it serves from
LaGuardia, including top business destinations and many cities not
currently served nonstop by Delta or US Airways. Delta will replace
turboprop aircraft currently operated by US Airways with larger jets,
adding as many as 4 million additional roundtrip seats available at
LaGuardia without increasing congestion.
As part of the
agreement, Delta will take control of US Airways' Terminal C to create
an expanded main terminal for customers. Delta will operate a total of
18 gates in Terminal C, and add one additional gate at Delta's Terminal
D, for a total of 29 gates in the two terminals. A 600-foot connector
will be built to connect the two terminals. Delta also will convert the
existing US Airways lounge in Terminal C to a Sky Club, while continuing
to operate its current Sky Club in Terminal D.
continue to operate its popular hourly Delta Shuttle from its six gates
at the Marine Air Terminal. In addition, Delta will spend up to $117
million to expand, renovate and consolidate terminals C and D over the
next two years. Overall, the transaction will directly and indirectly
generate an estimated 6,000 new jobs in New York.
Since making a
strategic decision to build New York into a hub earlier this decade,
Delta has made major investments across the region, boosting its
economic impact to more than $13 billion annually. The airline is
currently constructing a $1.2 billion project that will enhance and
expand Terminal 4 at John F. Kennedy International Airport, creating a
state-of-the-art facility for New York's fastest-growing global airline.
popular hourly Shuttle service between LaGuardia, Reagan National and
Boston that is operated on dual-class mainline jets will remain
unchanged as a result of the transaction. Also, US Airways will continue
to offer its customers high-frequency schedules from LaGuardia to its
Charlotte, N.C. and Philadelphia hubs and Pittsburgh with more than 60
daily weekday flights. All US Airways flights from LaGuardia will
continue to arrive and depart from nine gates and parking positions in
Terminal C and US Airways will build a new, state-of-the-art
5,000-square-foot US Airways Club.
National, US Airways' expanded operation will connect more small, medium
and large communities with the nation's capital and create additional
flight options throughout the airline's route network. US Airways
expects to further increase its use of dual class mainline aircraft and
soon to be dual class larger regional jets at Reagan National. The move
will benefit customers by increasing the number of available seats
between Washington and favorite destinations without increasing
US Airways plans
to add at least 15 new destinations from Washington to its network as a
result of the transaction and competition will be further enhanced by US
Airways adding service to popular destinations that are currently served
by other carriers. As a result, business and leisure travelers as well
as military and government employees will have more access to the
nation's capital and its downtown airport.
implementation of the new schedule, US Airways will operate
approximately 230 peak-day departures at Reagan National, a 20 percent
increase over current service levels. The airline anticipates an
increase of approximately 20 to 25 percent in passenger enplanements at
Reagan National as a result of the new flights and schedule
improvements. However, there will be no increase in congestion at the
airport due to US Airways' planned increase in scale and Delta's
reduction in slots.
The expansion is consistent with US Airways' previously announced strategic plan to focus on growing its key, most profitable airports at its Washington focus city, its Phoenix, Philadelphia and Charlotte hubs and its US Airways Shuttle service. Once the transition is complete, more than 99 percent of US Airways capacity will be to or from its key airports.
Delta will continue to operate a robust schedule at Reagan National, with nonstop service between the airport and its seven domestic hubs and select cities. It also will continue to operate its Delta Shuttle between Reagan National and New York. US Airways also will acquire from Delta in 2015 the rights to operate additional daily service at one of the world's most important business destinations Sao Paulo, Brazil. As US Airways continues its strategic expansion into South America, the additional rights would allow it to operate two daily flights to Sao Paulo and continue its existing daily service to Rio de Janeiro, Brazil.
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