US Airways “cautiously optimistic” over Delta slot swap

Discussion in 'US Airways | Dividend Miles' started by Sean Colahan, Mar 23, 2011.  |  Print Topic

  1. Sean Colahan
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    Sean Colahan Gold Member

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    This came from FlightGlobal.com
    (http://www.flightglobal.com/article...utiously-optimistic-over-delta-slot-swap.html)
    "Executives at US Airways believe the odds of getting long-awaited approval for the carrier's proposed slot swap with Delta are "greater than 50-50".
    US Airways president Scott Kirby outlined the probability of concluding the deal during a presentation at the JP Morgan Aviation, Transportation and Defense conference.
    Originally proposed in 2009, US Airways aimed to transfer 125 of its Express slots at LaGuardia to Delta while Delta agreed to cede 42 slots pairs at National to US Airways.
    Regulators told the carriers in order to move forward with the deal the divestiture of 14 slots at National and 20 slots at LaGuardia to incumbent or new entrant carriers was necessary. The government rejected a subsequent proposal from the carriers that entailed fewer divestitures.
    But US Airways later argued that JetBlue's access to Washington National slots through a deal with American and Southwest's ability to gain slots at National and LaGuardia through its acquisition of AirTran have made each airport less concentrated.
    Kirby admits getting final approval from the Department of Transportation (DOT) for the transaction "continues to be rocky road", but he's "cautiously optimistic we'll get the deal done".
    However, if DOT finally grants approval for the slot transfer, Kirby explains it will not have any effect on US Ariways' profit and loss statement until next year."
    Any thoughts from the peanut gallery as to weather we think the DOT will approve the deal this time with the face that B6 and WN have a better presence at DCA and LGA??? I did notice that US was giving up "express slots" at LGA but it seems like the DL slots at DCA could be used for mainline.
     
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  2. dcpatti
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    dcpatti Silver Member

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    I think US is going to lobby much harder for this now, than in the past, which isn't to say they haven't been pushing hard all along, just that they are going to turn up the heat. If they can get this to go through AND get even a smidgen of the DCA Perimeter exemptions (which I believe is a done deal now, just a matter of the FAA sorting out who gets them), they could have a very lucrative network from DCA. Having additional slots come in that didn't exist before at the same time that the FAA divvy's up the perimeter exemptions means US can easily add new west coast service without cutting service to an existing destination. While they can already fill that claim by reducing frequency and swapping in bigger planes to some heavily served destinations (PHL, MCO for starters), having additional slots would make the argument even easier.

    I'm still curious as to why they would want to let slots go at LGA as it serves as a nice mini-mini-hub for the more regional level of Northeast corridor traffic but so many of those flights are on dinky little commuter jets that a similar upsizing of aircraft could result in a pretty similar number of seats overall.

    Having B6 and WN at DCA only helps US's chances, I think. I don't think US will get everything they are asking for but that's the way it goes when dealing with government. I'd be pretty surprised if both US and DL didn't set the requested number of slots to swap, artificially high, just to counter-balance the "shrinkange" that the government will ask for.

    Personally I see DCA as key in US' long term strategy for growth and expansion. I don't ever see it being a proper hub like PHL or CLT--- the airport simply is not big enough and doesn't have the infrastructure--- but it's remarkably efficient, and has the room for more passengers even if there are no more slots. I just today realised they're flying a 321 on CLT-DCA which I've not seen in a long time (honestly i might just not have noticed but it does seem like a recent upsizing). It would be nice to see the bigger planes returning to DCA. I think the airport can handle it, and if you can get some nonstops from DCA to new destinations, it will definitely pull traffic away from IAD. That means pulling it away from UA or other competitors. I think US can be doing a lot more business from DCA and while it will be sad to see my happy, efficient little airport turn into a crowded crazy zoo, I'd actually be OK with it if it meant I could get a nonstop to the west coast.

    Anyway I think the slot swap is integral as it gives US tons more options from DCA which they can pair up with the perimeter exemptions and I think we'll see them really fight for this.
     
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  3. Sean Colahan
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    Sean Colahan Gold Member

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    I totally forgot about the perimeter rule being lifted when I read this article earlier today. Could be very VERY lucrative for US out of DCA.

    I also don't understand this. NYC (LGA) being a central part of business in the entire north-east and mid-atlantic region, one would think US would want to keep their strong presence at LGA. I mean look at BOS, even though US de-hubbed/focus citied it, they still keep quite a number of regional flights to the New England region because of the importance The Hub has in New England economy, I would assume it would be exponentially higher for LGA.

    I think this may be why they are giving it another push.

    I still am trying to get my but to DCA for a good time period to check out this amazing airport you say is so nice.
     
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  4. dcpatti
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    dcpatti Silver Member

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    I read my itinerary wrong and thought my flight a few weeks ago was at 7:55pm. It wasn't. It was really at 7:25. I figured this out at about quarter past 5. I had already packed (whew) but still had to walk the dog, then spend 45 minutes in traffic getting to the airport, then park and clear security. And I still had about 7 minutes to kill at the gate, waiting for pre-boarding. I heart DCA. :D. Anytime you can walk the dog, sit in rush hour for 45 minutes, find a parking spot, get into the terminal, through security and to the gate in 95-100 minutes is dreamy, and there's not too many airports where you can do that!
     
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  5. Art234
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    Art234 Milepoint Guide

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    I can pack, drive to ISP, be through security and waiting to board in less than an hour -- so I know what you're talking about!
     
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  6. dcpatti
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    dcpatti Silver Member

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    Yep! If it's not rush hour, I can peel 30 minutes off that 45-minute drive! Who needs IAD?!
     
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  7. DeacFlyer1
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    IAD is so far from DC that I think it should be renamed the "suburban northern virginia sprawl" airport.
     
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  8. DeacFlyer1
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    Where did you see this? I've never once seen a 321 at DCA...(hope this doesn't sound too "I don't believe you!" Not how I'm trying to sound!)
     
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  9. dcpatti
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    dcpatti Silver Member

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    I'm flying it next Monday or Tuesday (whatever day I'm supposed to come home from the next work trip). Even fiddled around with my seat assignments today. 4 rows of F and everything!
     
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  10. DeacFlyer1
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    Interesting...thanks!
     
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  11. SS255
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    SS255 Silver Member

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    Oddly enough, I can do the same at LAX at certain times of the day. And I can be at AVP, bag checked, and through security in 30 minutes, as long as I don't take a 6AM flight.
     
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  12. dcpatti
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    dcpatti Silver Member

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    And it was either a computer glitch or a hallucination. Just checked in for my outbound and the return from CLT-DCA is not a 321 any more :(
     
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  13. Sean Colahan
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    Sean Colahan Gold Member

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    PVD:D
     
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  14. JetsettingEric
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    JetsettingEric Silver Member

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    Update: scott kirby announced in an employee newsletter (on bloomberg news) - "we hope to have something to file in the next couple of weeks, so stay tuned". Similar positive tone from delta in the article
     
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  15. jbcarioca
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    jbcarioca Gold Member

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    Years ago I moved to Coral Gables, Florida because I could have a leisurely breakfast with my spouse, wander out of the house at 08:00 and board a 09:00 flight with no hassle. In the middle of rush hour I was at the gate in 15 minutes. I still do the same thing there today, but from a hotel. I am certain people will quickly correct me, but I know of no other major airport in the US that has upscale housing and a nice city so very accessible. There are a fair number of excellent places to live that are equally major airport accessible, but they all seem to be out of the US.
     
  16. Sean Colahan
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    PVD...downtown Providence to airport in 15 minutes or less. Great airport facilities and a lot of US flights.
     
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  17. phlwookie
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    phlwookie Silver Member

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    There are plenty in the US that fit this profile, just not enough in or near major population centers.

    Some that spring to mind: PBI, GSO, MDT, PWM, BUR, HOU, ROC, SNA,ICT, DAL, MCI, and some would argue DCA (though security lines can get a bit long there).
     
  18. JetsettingEric
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    JetsettingEric Silver Member

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    I would argue that HPN - white plains, ny fits that description very well. Very nice (and expensive) housing, close to an easy airport with a good number of flights and close to a city (30 min) train to nyc. LGA might count as well. From the upper east side of NYC - leaving at 8am for a 9am flight is doable, especially in the US terminal with short lines. If the slot swap goes through, this brings the US gates at least 5 minutes closer (assuming marine air terminal)
     
  19. dcpatti
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    dcpatti Silver Member

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    Any speculation on what US will do with these slots, if the deal goes through? My guess is "nothing really remarkable" at least till the FAA determines who gets the perimeter exemptions with new slots and who gets them sung existing slots. Why add a new route if you may have to drop it 6 months down the road? I'm guessing another trip to CLT and perhaps another to central Florida, or maybe some more short hops on RJ's.

    As an aside, they really need to upsize DCA-LAS; that's been a 319 for a while now, and is always full. While I really hope US gets an exemption and decides to use it for an added nonstop to LAS, I would welcome anyone on that route as it's consistently one of the most expensive flights out of DCA. Competition will hopefully force prices down a bit, even if only temporary. I miss the $129 r/t's up to Boston after B6 moved in. I think US will get 2 or 3 of these exemptions and use one for LAS, SFO and ???but I think it will be a bitter war with UA to get that SFO flight granted.
     
  20. JetsettingEric
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    JetsettingEric Silver Member

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    I agree with the nothing really remarkable comment. US will likely have a lot more express capacity with the LGA drawdown. With the current management trying to keep capacity as close to a minimum as possible - express is a likely way to grow DCA. the 319 I likely on the route for operational reasons. The short runway at dca makes the 319 and 757 the only real viable yearround planes for that route. The 757s are used pretty extensively for Europe.
     
  21. Sean Colahan
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    New info in USA Today regarding slot swap.

    US Airways 'cautiously optimistic' on Delta slot swap
    Comments 3
    By Ben Mutzabaugh, USA TODAY

    CAPTIONBy Ben Mutzabaugh, USA TODAY
    US Airways President Scott Kirby offered an update on the status of the airline's proposed slot swap with Delta.

    Kirby's response came in the Q&A section of the airline's May 6 employee newsletter.

    The question was a simple: "Any updates on the Delta slot swap transaction?"

    Kirby's response: "We continue to work with Delta and the regulatory agencies, Department of Transportation (DOT) and Department of Justice (DOJ) to get to somewhere where we can all accept. It is difficult when there are multiple parties negotiating. We hope to have something to file in the next couple weeks so stay tuned. We are cautiously optimistic."

    The slot swap was first proposed in August 2009, when Delta and US Airways announced plans to swap their flight rights at the capacity-controlled airports of New York LaGuardia and Washington Reagan National.

    Acquiring US Airway's slots at LaGuardia would have allowed Delta to create a "domestic hub" there that it said would complement its international gateway at New York JFK. Similarly, US Airways hoped to solidify its position at National Airport by acquiring Delta's slots there.

    In total, US Airways would have transferred 125 slots at LaGuardia to Delta in return for 42 slots at National. As part of the deal, US Airways also would have acquired the operating authority to open international routes to both Sao Paulo and Tokyo.

    But the deal stalled when the Department of Transportation said it would approve the deal only on the condition that Delta and US Airways relinquish some of their slots at the airports. The airlines subsequently revised their offer, which was again rejected.

    Finally, the airlines concluded that the number of slots they'd be required to divest was too much, and took the DOT to court last May in an effort to appeal the decision.

    That's where the swap remains, though in January it was reported that the deal might be put back on the table as the involved parties work toward a solution.

    And even since that news, other factors have emerged that could enhance the likelihood the swap will win the DOT's blessing.

    First is language in the FAA re-authorization bill that could increase National Airport's cap on flights. The legislation is still pending, but -depending on the final wording -- it would permit as many as tow dozen new daily round trips at the airport.

    The second is the just-completed merger between Southwest and AirTran, which has given Southwest a small-but-significant foothold at National Airport. Southwest -- which at the time was seeking access to National at the time of the initial proposal -- had been one of the most-vocal opponents of the proposed US Airways-Delta swap.

    Combined, those two developments could lessen some of the DOT's competition concerns that dogged the slot swap as initially proposed.

    Meanwhile, the Centre for Asia Pacific Aviation (CAPA) notes in an April 27 post that US Airways Doug Parker addressed the slot-swap issue during US Airways' quarterly earnings report. Parker segued into the subject when asked about capacity cuts, CAPA says.

    CAPA writes:

    Analysts questioned the executives on whether they should do more capacity cuts and Mr Parker took a page from AMR when he looked back to 2005 and said that since its merger with America West it has dropped capacity by 13%, even more than American. Mr Parker also indicated that other carriers haven't taken the tough decisions US Airways has in closing Pittsburgh, Las Vegas and Boston including a crew base at Boston.

    "We are flying 99% where we have real competitive advantages at Philadelphia and Charlotte," he said. "That will go up more once the Delta slot swap transaction is done. Others haven't made those decisions and are still flying to places where they don't have a competitive advantage and are trying to steal share. If, at USD120 per barrel oil, it hasn't gotten done then it will never get done and shame on the industry."
     
  22. dcpatti
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    dcpatti Silver Member

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    Sao Paolo and Tokyo would be HUGE for US.
     
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  23. Sean Colahan
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    Sean Colahan Gold Member

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    Yup:)
     
  24. GeneCMH
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    Its nice to see US thinking strategically. This will likely be a win / winn for US and DL. More international is always welcome.
     
  25. Sean Colahan
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