Southwest, JetBlue interested in American’s landing slots

Posted Thursday, Nov. 07, 2013  comments  Print Reprints
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Southwest Airlines and JetBlue Airways have told regulators that they’re interested in acquiring landing slots that might become available as part of a settlement of the government’s lawsuit to block the American Airlines-US Airways merger, people familiar with the matter said.

Dallas-based Southwest and JetBlue want American and US Airways to give up as many slots as possible at Reagan National Airport, said the people, who asked not to be identified because details are private. Southwest is also in discussions with the Justice Department about acquiring slots at New York’s LaGuardia Airport, one person said.

In an antitrust suit filed in August, the Justice Department said the proposed combined carrier would have almost 70 percent of the landing slots at Reagan, the capital’s close-in airport. During hearings about the merger this year, several members of Congress expressed concern about the concentration.

On Monday, Attorney General Eric Holder said that settlement talks between the airlines and the department are ongoing and that slot divestitures are essential to any deal. A trial is scheduled to start Nov. 25 in federal court in Washington, D.C.

Southwest CEO Gary Kelly told investors on the airline’s quarterly earnings conference call two weeks ago that the carrier is interested in more slots at Reagan and LaGuardia airports but had not discussed buying them with either airline or with the Justice Department.

For Southwest and JetBlue, the Justice Department’s insistence on asset sales if American and US Airways merge creates a chance to expand at Reagan National. It’s the only one of Washington’s three major airports with federal flight limits.

Gina Talamona, a Justice Department spokeswoman, declined to comment on whether the department is in talks with Southwest and JetBlue about slot divestitures.

Fort Worth-based American declined to comment, said Michael Trevino, a spokesman. Ed Stewart, a spokesman for Arizona-based US Airways, Southwest’s Beth Harbin and Jenny Dervin at JetBlue also said their carriers had no comment.

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A merger between American, the third-largest U.S. airline, and No. 5 US Airways would create the world’s biggest carrier by traffic. Southwest is the largest discount airline and is now the No. 4 U.S. carrier. New York-based JetBlue is No. 6.

Southwest and JetBlue’s discussions with regulators build on the interest in Reagan National slots expressed publicly by the carriers in the months since American and US Airways announced plans to merge Feb. 14.

JetBlue wrote Sen. Charles Schumer, D-N.Y., in March to demand that “a significant number” of slots be divested at Reagan National. CEO Dave Barger said in September that American should have to cede the equivalent of all its current flights there. That would leave the merged airline with the 55 percent market share held by US Airways.

Separately Thursday, the Dallas/Fort Worth Airport board adopted a resolution in support of the American-US Airways merger.

The unanimous vote followed a presentation by aviation consultant ICF SH&E that outlined the benefits of the merger for the airport and Texas. If the merger is approved, DFW will be the new carrier’s largest hub, with over 750 daily flights as well as the headquarters of the combined airline.

Fort Worth Mayor Betsy Price said she “enthusiastically” supports the merger, adding that with manufacturing moving back to the area from China, DFW needs the merger so it can add more commercial and cargo routes to Asia.

Staff writer Andrea Ahles contributed to this report, which includes material from Bloomberg News.

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