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Delta, US Airways try again on slot swap

Delta, US Airways try again on slot swap

May 24th, 2011 by JOSHUA FREED, AP Airlines Writer in News

US Airways Group Inc. and Delta Air Lines Inc. are again asking regulators to allow them to swap takeoff and landing rights for dozens of flights in New York and Washington.

The swap would remake the competitive landscape in two of the nation's most competitive air markets. But their attempt for a similar deal fell apart last year after the Transportation Department imposed restrictions that the airlines said were too onerous.

The deal announced Monday calls for Delta to give US Airways 42 slot pairs at Reagan National Airport in Washington, $66.5 million in cash, and the right to add another daily flight to Sao Paulo, Brazil, in 2015. In exchange, Delta would get 132 slot pairs at LaGuardia airport in New York. Each slot pair is the right for one takeoff and one landing.

The airlines are offering to give up eight slot pairs at Reagan and 16 at LaGuardia. That's still less than what the Transportation Department said it wanted last year: 14 at Reagan and 20 at LaGuardia.

Also, the airlines last year wanted to choose who would get the slots. The government wanted an auction. The airline filing on Monday left it to DOT to approve a process for transferring slots to new competitors.

The airlines noted in their filing with the Transportation Department that Southwest Airlines Co.'s acquisition of AirTran has given it access to Reagan airport for the first time, and JetBlue has begun flying there as well. They said there is more competition from discount carriers at those airports now than what the government originally sought.

Whether that will be enough for the government to approve it remains to be seen. Transportation Department spokesman Bill Mosley said the agency would review the filing.

Southwest would be interested in more slots at both airports and is analyzing the filing with that in mind, spokeswoman Whitney Eichinger said.

US Airways has been shifting its flying to cities that connect to Washington and its hubs in Philadelphia, Charlotte, N.C. and Phoenix. US Airways President Scott Kirby told analysts in New York last week that employees often ask him why the airline wants to reduce its New York flying.

"We don't make money here, and don't have a path to being profitable in LaGuardia, so we're willing to stop flying places that lose money," he said.

The deal doesn't mean that Delta would pull out of Reagan National airport, or that US Airways would drop flying to LaGuardia. And US Airways says it will continue to fly its shuttle from Boston to New York and Washington, and Delta will keep flying its hourly shuttle between New York and Washington.

Delta said that on routes from LaGuardia to smaller cities, it would replace the propeller-driven planes used by US Airways with bigger jets. It also said it will take control of US Airways' terminal C at LaGuardia, and spend up to $117 million to expand and renovate terminals C and D over the next two years. Delta said the addition at LaGuardia would double the number of destinations from that airport. It also has a hub at New York's John F. Kennedy International airport.

In Washington, US Airways said it would add 15 new destinations. That would give it 230 departures from Reagan on its busiest days, 20 percent more than it has now.