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UPDATE: Delta, US Airways May Drop Planned Landing Slot Swap
(RECASTS and UPDATES with company comment.)
By Ann Keeton
Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Delta Air Lines Inc (DAL) and US Airways Group Inc. ( LCC) said Tuesday they may drop a planned asset swap after regulators requested they sell airport slots to new entrants to win approval.
The U.S. Department of Transportation tentatively approved the slot swap at Reagan Washington National Airport and New York's LaGuardia Airport, announced by the airlines last summer. However, DOT's requirement that the two must divest many of the slots at the two congested airports irked both carriers.
"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," they said in a joint statement.
The airlines in August requested permission for an exchange that would give Delta 125 slot pairs--with each pair equaling one takeoff and one landing--in New York, while giving up 42 slot pairs to US Airways in Washington, D.C., along with route authorities to fly to Sao Paulo and Tokyo.
The DOT said its approval is contingent on the airlines' opening up service at the two airports to more competition by selling some of their slot interests to carriers with no or limited service there.
With the transaction, both airlines have said they expect to increase profits at their hub operations and maintain shuttle services.
The move would give Delta, the world's largest airline by passenger traffic, a chance to increase flights from LaGuardia to small and medium-sized U.S. cities. The airline could help to reduce chronic flight congestion at the busy airport by using larger planes than US Airways has employed.
US Airways has said it can substantially add passengers in Washington, D.C., where it already has a strong presence.
Continental Airlines Inc. (CAL) and AirTran Holdings Inc. (AAI) have proposed a smaller slot swap for New York City-area flights.
The DOT on Tuesday opened a 30-day public comment period before making a final decision on the Delta/US Air plan.
The Transportation Department is expected this week to decide whether to grant long-sought antitrust approval for transatlantic flights to the Oneworld global airline alliance, including British Airways and American Airlines, a unit of AMR Corp. (AMR). The U.S. Department of Justice offered an opinion that giving antitrust approval, which would allow the airlines to form closer business relationships, would hamper competition and be harmful to consumers.
The Department of Justice is also expected to comment on the slot swap, although the DOT is the final decision-maker.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120; [email protected]
(END) Dow Jones Newswires 02-09-101901ET Copyright (c) 2010 Dow Jones & Company, Inc.
(RECASTS and UPDATES with company comment.)
By Ann Keeton
Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Delta Air Lines Inc (DAL) and US Airways Group Inc. ( LCC) said Tuesday they may drop a planned asset swap after regulators requested they sell airport slots to new entrants to win approval.
The U.S. Department of Transportation tentatively approved the slot swap at Reagan Washington National Airport and New York's LaGuardia Airport, announced by the airlines last summer. However, DOT's requirement that the two must divest many of the slots at the two congested airports irked both carriers.
"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," they said in a joint statement.
The airlines in August requested permission for an exchange that would give Delta 125 slot pairs--with each pair equaling one takeoff and one landing--in New York, while giving up 42 slot pairs to US Airways in Washington, D.C., along with route authorities to fly to Sao Paulo and Tokyo.
The DOT said its approval is contingent on the airlines' opening up service at the two airports to more competition by selling some of their slot interests to carriers with no or limited service there.
With the transaction, both airlines have said they expect to increase profits at their hub operations and maintain shuttle services.
The move would give Delta, the world's largest airline by passenger traffic, a chance to increase flights from LaGuardia to small and medium-sized U.S. cities. The airline could help to reduce chronic flight congestion at the busy airport by using larger planes than US Airways has employed.
US Airways has said it can substantially add passengers in Washington, D.C., where it already has a strong presence.
Continental Airlines Inc. (CAL) and AirTran Holdings Inc. (AAI) have proposed a smaller slot swap for New York City-area flights.
The DOT on Tuesday opened a 30-day public comment period before making a final decision on the Delta/US Air plan.
The Transportation Department is expected this week to decide whether to grant long-sought antitrust approval for transatlantic flights to the Oneworld global airline alliance, including British Airways and American Airlines, a unit of AMR Corp. (AMR). The U.S. Department of Justice offered an opinion that giving antitrust approval, which would allow the airlines to form closer business relationships, would hamper competition and be harmful to consumers.
The Department of Justice is also expected to comment on the slot swap, although the DOT is the final decision-maker.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120; [email protected]
(END) Dow Jones Newswires 02-09-101901ET Copyright (c) 2010 Dow Jones & Company, Inc.
