Delta and US Airways Slot Swap, Take 2

Not accepting denial from the first attempt, Delta and US Airways announced they are reattempting their slow swap, albeit with different terms.

The new proposal has Delta giving US Airways 42 slot pairs at DC National, $65.6 million in cash and rights for flights to Sao Paulo, Brazil.  In exchange, US Airways is giving Delta 132 slot pairs at LaGuardia. 

Lets break this down a bit.  Delta wants to grow its operation at LaGuardia, seems honest enough.  Delta claims it will add service to airports not currently served while enhancing other service.  Delta and US Airways are the largest carriers at LaGuardia, by giving Delta an additional 132 slots this stifles competition and gives Delta the ability to dictate pricing in dozens of markets as it would be the only carrier with nonstop service.   Meanwhile, at DC National US Airways gains a paltry 42 slots, some cash and some rights to Sao Paulo.   The cash payout is a one-time benefit and while the Sao Paulo rights are worth something, this deal still seems very unbalanced.

Based on the numbers, this may be a sign of desperation on the part of US Airways.  Already the Frankenstein of the airline industry with a segregated work force, US Airways has the most to lose no matter what they do.   They clearly don't want to compete at LaGuardia, they would rather waste slots then do something productive with them; Did you know they have 19 flights between LaGuardia and Philadelphia, just to keep the slots utilized?

If this goes through, what does this mean for the traveling public?  Higher fares and less options.  If this deal goes through, Delta becomes the clear dominant carrier at LaGuardia and US Airways becomes the dominant carrier at DC National.  At LaGuardia, we're likely to see US Airways scale its operation down to the shuttle and service to its hubs.   Furthermore, Delta has a tendency of being a spoiled child when it doesn't get what it wants out of a market quickly retreating.  With the increased amount of low fare carriers attacking all three of the New York airports, will Delta really achieve the revenue margins it wants?

Personally, I'd like to see the revised application rejected and see US Airways have some of its slots revoked.  The filler flights are not helping the air traffic situation and only inconvenience the general public.   I would also love to see minimum aircraft size required at slot constrained airports to make better use of all the slots.

 

Comments

#1
BR June 13, 2011 at 08:56 pm

I agree. This is not good.