Southwest, Virgin America reportedly getting LaGuardia slots

12/04/2013 6:40 PM

12/04/2013 6:41 PM

Southwest Airlines and Virgin America will add flights at New York’s LaGuardia Airport as a result of the settlement of an antitrust lawsuit against the merger of American Airlines and US Airways, two people familiar with the matter said.

The low-fare carriers are dividing rights to 34 daily takeoffs and landings being sold at LaGuardia after American and US Airways reached an accord with the Justice Department, said the people, who asked not to be identified because the terms aren’t final. Details such as the allocation weren’t available, the people said.

Talks are still underway on how American and US Airways will divest slots for 104 daily flights at Washington’s Reagan National Airport, the people said. The Justice Department has to approve the buyers of any divested slots.

Winning LaGuardia access would let Southwest expand at the airport closest to central Manhattan and give Virgin a toehold there. Ceding slots to make room for lower-priced rivals was a focus of the Nov. 12 settlement paving the way for the $17.8 billion American-US Airways merger, which is set to close Monday.

Whitney Eichinger, a spokeswoman for Dallas-based Southwest, said she had no comment on the LaGuardia slots. Madhu Unnikrishnan, a spokesman for Virgin America, also declined to comment.

Todd Lehmacher, a US Airways spokesman, couldn’t be reached. Mike Trevino, an American spokesman, declined to comment.

Among the slots being sold at LaGuardia are 10 already being leased to Southwest from American. At Reagan National, JetBlue Airways is leasing rights to 16 daily flights from American. Without the divestitures, the post-merger American would have controlled 67 percent of daily departures there.

Slots, which give the right to one takeoff or landing, are highly sought by airlines because they are limited by the government and rarely become available in large numbers. LaGuardia and Reagan are two of four major U.S. airports where flights are limited to help control congestion.

Separately, U.S. Bankruptcy Judge Sean Lane denied a request by a San Francisco attorney to stay a ruling that allows the merger to proceed.

Antitrust lawyer Joseph Alioto, who filed an antitrust lawsuit on behalf of 40 clients seeking to stop the merger, had asked Lane to put aside his ruling from last week during an appeal.

In his written ruling, Lane said the request was based on the same arguments that Alioto had raised when requesting a temporary restraining order last month. Alioto had argued that the merger is anti-competitive and will concentrate 80 percent of the air travel market among three airlines.

“The court denied the plaintiffs’ request for a temporary restraining order for reasons stated in a thirty-two-page opinion dated November,” Lane wrote. “For those same reasons, the plaintiffs’ motion seeking a stay pending appeal is denied.”

The carriers declined to comment on Alioto’s appeal.

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

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