Southwest Pilots Opposes Delta US Airways Slot Swap Proposal <


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Southwest Pilots Opposes Delta US Airways Slot Swap Proposal

By Bill Goldston

April 7, 2010 - Unprecedented agreement would shut out low fares in New York and Washington, D.C. (DALLAS) The Southwest Airlines Pilots’ Association is pushing for the Department of Transportation to disallow the permanent exchange of several hundred slots between Delta Airlines and US Airways at LaGuardia (LGA) and Washington National (DCA) Airports.  

This unprecedented anti-competitive deal would create hubs dominated by Delta at LGA and US Airways at DCA, giving them unchecked market and pricing power. “The pilots of Southwest support our Company’s request for a free market process to take place regarding these open slots in two very key destinations,” said Capt. Carl Kuwitzky, SWAPA President. “But we also support the benefit to the public of a low-cost carrier providing true competition for flyers in these markets." 

On March 22, after the DOT comment deadline closed, Delta and US Airways announced a revision to their proposal: they would agree to divest some slots, but only if they could hand-pick four smaller airlines to be given those slots. Southwest Airlines was purposely excluded from an opportunity to bid.

February 10, 2010 - The Department of Transportation announced that it has tentatively decided to grant the waiver requested by Delta Air Lines and US Airways to allow the carriers to proceed with their proposed slot swap transaction at Reagan Washington National Airport (DCA) and New York's LaGuardia Airport (LGA). 

The proposed waiver was contingent on the requirement that the airlines sell some of their slot interests to carriers with no or limited service at the two airports in order to lessen the harm to consumers that might otherwise result from the applicants' increased dominance at DCA and LGA. 

“An economic expert estimates that Southwest’s service to LGA and DCA would save the public approximately $200 million, annually, if Southwest were given the opportunity to acquire the slots,” continued Kuwitzky. “This proposal is a back-room deal specifically designed to keep Southwest Airlines and its low-fare model away from these airports permanently.” 

Accordingly, while DOT has tentatively decided to grant Delta Air Lines' and US Airways' joint waiver request in part, DOT has tentatively determined that the public interest would best be served by creating new and additional competition at the airports to counterbalance the potential harm to consumers. To achieve that goal, DOT proposed waiver would require the divestiture of 14 pairs of slot interests at DCA and 20 pairs of slot interests at LGA to new entrant and limited incumbent carriers. 


In a letter to DOT dated August 24, 2009, Delta and US Airways stated approving the transfer would enable Delta to maximize the efficient utilization of the LaGuardia Operating Authorizations by substantially increasing the average seat capacity of the aircraft which will be using the transferred Operating Authorizations. Significantly, Delta would replace all US Airways turboprop flights with jet aircraft, including larger 2-class regional jets and mainline jets. 

As a result of the transaction, capacity at LaGuardia will increase by 2.3 million seats, a 13 percent improvement in airport capacity all with no increase in the total number of LaGuardia operations. US Airways would add 15 nonstop points to its DCA network and offer an additional 1 million seats to Washington customers. While a waiver is not required to affect the DCA transfer, those benefits are contingent upon the approval of the entire transaction. Accordingly, FAA's grant of a waiver for the LaGuardia transfer portion of this unique transaction would have wide-ranging public benefits that extend far beyond New York. 

Delta and US Airways responded stating, “Delta and US Airways are disappointed in the DOT’s decision that, if implemented, would negatively impact the consumer and economic benefits created by the proposed transaction by divesting 16 percent of the transaction at New York’s LaGuardia Airport and 33 percent of the transaction at Washington-National.  Chief among those benefits is the ability for both airlines to maintain and add new nonstop service between two of America’s top business markets and small- and medium-sized communities across the United States.  

"Our goal remains to increase access for customers in small communities to LaGuardia and Washington-Reagan National airports.  We appreciate the thousands of employees, customers and elected and community leaders who have voiced their support for our transaction. However, we expect that if this order is implemented as proposed the transaction will not go forward and significant consumer benefits will never be realized.  Both airlines will review the DOT's proposed rulemaking to determine our next steps."

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