Delta wants to bid on airport slots in Washington and at Love Field

11/13/2013 5:24 PM

11/12/2014 3:04 PM

Delta Air Lines wants a fair chance to bid on slots and gates being divested by American Airlines and US Airways as part of the settlement with the U.S. Department of Justice, even though it’s not considered a low-cost carrier.

The Atlanta-based carrier said Wednesday it is particularly interested in slots at Washington D.C.’s Reagan National Airport and gates at Dallas Love Field.

“Delta believes that DOJ should not pre-determine what communities will receive service with Reagan National slots or Love Field gates, and that it shouldn’t exclude any airline from the opportunity to bid for them,” the airline said in a statement.

During a conference call with reporters on Tuesday, U.S. Assistant Attorney General Bill Baer suggested that low-cost carriers, and not legacy carriers like Delta or United Airlines, will be the recipients of the slots and gates divested by American and US Airways.

“The [settlement] papers make it pretty clear where we think those gates and slots ought to go,” Baer said, indicating that Delta and United Airlines can apply if they want but the DOJ gets final approval on who will end up with the assets.

As part of its settlement agreement, American and US Airways agreed to divest 52 takeoff and landing slots at Reagan and 17 slot pairs at LaGuardia. The carriers also agreed to divest two gates each at Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles and Miami airports.

At Love Field, Delta currently leases a gate from American and operates daily flights to Atlanta using small regional jets. Once the Wright Amendment restrictions expire next October, Delta will be able to use larger aircraft to fly to Atlanta or other destinations if it still has access to the gate.

“Without gate access, Delta could no longer provide Love Field service,” the airline said.

United Airlines declined to comment on whether or not it will bid on divested slots or gates. Southwest has indicated its interest in acquiring slots and will be able to negotiate to keep the five slots it has at LaGuardia that it currently leases from American.

JetBlue Airways chief executive Dave Barger said he was also looking forward to the divestiture process. The carrier will be able to negotiate to keep the 8 slots it currently leases from American at Reagan.

“JetBlue is eager to increase our low-fare service in communities across the country and particularly at Ronald Reagan Washington National Airport and New York’s LaGuardia Airport,” Barger said in a statement. The low-cost carrier had a little fun earlier in the week, launching a $55 fare sale for Reagan travelers, saying that American-US Airways’ slot share should only be 55 percent after the merger. With the settlement agreement, the merged airline will hold 57 percent of the slots at Reagan.

The carrier paid $40 million for eight slot pairs at National and $32 million for eight slot pairs at LaGuardia in a 2011 auction held by the DOJ, beating out Southwest and other carriers for the open positions. It is unclear if the DOJ will hold an auction or negotiate a transaction for the slots being divested in the American-US Airways settlement.

Aviation analyst Mike Boyd said government officials will likely award divested slots to carriers like JetBlue and Southwest, leaving Delta out of the process. The DOJ wants to be able to show that the antitrust lawsuit filed to stop the American-US Airways merger will benefit consumers, even if it only has a minimal impact.

“Any kind of [slot] auction at Washington National will be maximized for political play,” Boyd said. “Same thing at LaGuardia.”

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