LGA & DCA Slot SWAP

[BusFlt321]

Jim, If they do not sell the DOT CONFISCATES the slots. Its in the decision...Busflt321

 

[jimntx]

So, BusFlt321, may we at AA count on you to file your strong objections to the DOJ suggestion that AA and BA give up (not sell, give up) slots at LHR in order to earn the ATI that Star Alliance and Skyteam already have?

Besides, I can not imagine any available slot at DCA or LGA not selling...at ANY price! Everyone is clamoring to serve those two airports. Seems that idea to move airports out into the boonies "for convenience sake and growth opportunities" doesn't go over well in NYC or DC.

I will be surprised if my airline (AA) doesn't file an objection to the ruling because it requires (if I'm reading correctly) that the slots be sold to an airline not currently serving either airport. That's rank discrimination against us.

 

[BoeingBoy]

Jim, If they do not sell the DOT CONFISCATES the slots. Its in the decision...Busflt321

Yes it is...if they do not sell. Now, if you're Parker or what's-his-name at DL, would you refuse to sell the slots knowing that they would be taken away if you don't sell them? Or would you sell them and get the money?

Jim

 

[Dont call me Shirley]

Wonder if this is like "If we can't have A-East in PHL we won't fly to PVG"

Jim

Hmm...you may have a point. "Surely", US and DL must have planned for something like this to happen.

Here is the statement from the Sandcastle:

Dear Fellow Employees:



Earlier today the Department of Transportation (DOT) issued a ruling regarding US Airways’ proposed slot transaction with Delta Air Lines. Although granting tentative approval, in its decision the DOT states it would require both airlines to divest 33 percent (14 of the 42 roundtrip slot pairs) at DCA that US Airways would obtain from Delta and 16 percent (20 of the 125 roundtrip slot pairs) at LGA that we would transfer to Delta. Furthermore, we could only sell those assets to carriers that control fewer than 5 percent of the slots at each airport, and if we are unsuccessful in that sale, DOT will simply take the slots away from us.



We are disappointed by the DOT’s decision, and here’s why. First, this represents a significant portion of the proposed economic benefits we would achieve. DOT is asking both us and Delta to give up 16 percent of the proposed transaction at LGA and 33 percent of the transaction at DCA and they are severely limiting the potential field of airlines that can purchase the slots from us. Second, for a hub and spoke carrier like US Airways, this proposed ruling and divestiture negatively impacts both the consumer and economic benefits that would have been created by the proposed transaction. Third, this decision will result in the loss of opportunity for our country’s smaller- and medium-sized communities that would have benefited from new service from both DCA and LGA as a result of this transaction. Among the benefits our proposed transaction would have created is both airlines’ ability to not only maintain but to also add new nonstop service between two of America’s top business markets and small- and medium-sized communities across the United States. Providing service to those smaller communities is one key benefit a larger hub and spoke carrier provides across our country, and today’s announcement by DOT creates more obstacles to keeping this service and growing service in these smaller markets.



We appreciate the support our employees, as well as our customers and elected and community leaders, voiced for this transaction. At this point, while we are still analyzing the DOT’s proposed ruling, we expect that if the DOT’s order is implemented as proposed (there is a 30-day public comment period before the ruling becomes final) the transaction will not go forward.



If the order stands as proposed and the transaction does not go forward, we will continue to fly our regional jet and turboprop operation at LGA but we will not be able to expand at DCA. Without this transaction, we also will not be able to offer our customers the new international flights to Sao Paulo, Brazil and Tokyo, Japan that we would have secured from Delta. All of this, of course, will make it harder for us to return to profitability, which is not good for the people of US Airways. As we have consistently said though, LGA remains a valuable asset, which we will continue to operate and support as next steps are determined. This would eliminate the need for the previously announced furloughs in station personnel at LGA and other impacted stations. However, this would not impact our previously announced crew base closures in BOS, LAS and LGA because we never planned to reduce mainline flying at LGA as a result of this transaction.



While our Legal and Public Affairs teams continue to work to bring this transaction to a positive conclusion, the best thing for all of us is to simply keep focused on running a great airline and taking care of our customers. In an industry that has lost 160,000 jobs in the last decade, and that is working hard to engage in self-help measures to stabilize the long-term future for our employees, today’s news is disappointing. We’ll continue to work hard on your behalf to ensure US Airways prospers in the future, in spite of today’s news, and I have every confidence we’ll be successful in this endeavor. Thanks again for all of your hard work. We will keep you posted on our progress.

 

[FutureUScapt]

Yes it is...if they do not sell. Now, if you're Parker or what's-his-name at DL, would you refuse to sell the slots knowing that they would be taken away if you don't sell them? Or would you sell them and get the money?

Jim

Jim, you're absolutely right.

But now let's look across the other side of the table. Depending on the number of LCCs interested, what incentive, would FL or B6 have to offer a fair market price when they know that there's a reasonable chance they could get some FOR FREE in an auction? Again, that possibility would depend on the number of LCCs interested; the more that are interested, the better the chance there is of one actually paying something close to fair market value.

So, BusFlt321, may we at AA count on you to file your strong objections to the DOJ suggestion that AA and BA give up (not sell, give up) slots at LHR in order to earn the ATI that Star Alliance and Skyteam already have?

The only difference with LHR is that you could probably argue that slots there are prohibitively expensive to the degree that it effectively stifles any competition from setting up shop there. The same can not be said about LGA or DCA. I'm not saying that I agree with that philosophy, but I wouldn't be surprised if that's how the DOT sees it.

 

[BoeingBoy]

Jim, you're absolutely right.

But now let's look across the other side of the table.

You're right - no one may offer "market price" (whatever that is) but is something better than nothing for those slots if you're Parker? I just don't think the slots will end up going back to the government - US/DL will either sell sell the slots, walk away from the deal as it was originally structured or restructure the deal with these requirements in mind in order to not have to sell slots.

One additional factor to consider is that the sale isn't limited to LCC's - it would be open to anyone with 1 - have less than 5% of the slots at LGA/DCA respectfully, 2 - no code share with any carrier having 5% or more of the slots, 3 - are not a subsidiary of a carrier having 5% of the slots and 4 - can't turn around and lease/sale the slots acquired to another carrier that doesn't meet the same restrictions. Frankly I don't know who would meet those requirements but someone other than an LCC might. Also, two of the potential methods of selling the slots don't allow the bidding carriers to know what others are bidding, so any carrier wanting the slots would be ill-advised to submit an artificially low bid if they really wanted the slots.

Jim

 

[notquiteUS]

Surely the worst part of the news is not of the DCA/LGA part of the deal but the canceling of GRU and NRT along with it... :down:

 

[DHG750R]

Surely the worst part of the news is not of the DCA/LGA part of the deal but the canceling of GRU and NRT along with it... :down:

Perhaps not. I saw this when it was announced in Dec, I wondered what the impact of this announcement would have on the US/DL deal.


WASHINGTON, Dec. 12 (UPI) -- The United States and Japan have reached agreement on the text of a landmark Open Skies aviation agreement, U.S. Secretary of Transportation Ray LaHood says.

In an announcement issued Friday, LaHood said the long-sought deal -- reached after five rounds of negotiations stretching back to May -- is meant to liberalize U.S.-Japan air services for the carriers of both countries.... continued

http://www.upi.com/Business_News/2009/12/1...39311260629258/

 

[usa1]

Are any of these slots the ones US Airways used as collateral for money received from Republic during BK restructuring? Do they still control a bunch of slots in LGA?

 

[Crzipilot]

I would say Southwest fits those requirements to a T????

 

[john john]

Are any of these slots the ones US Airways used as collateral for money received from Republic during BK restructuring? Do they still control a bunch of slots in LGA?

Jim WHO owns the SLOTS
We all know who has possession

 

[john john]

This is direct and personal evidence aimed squarely at Delta/US employees of the socialist nature of our current Administration.

To bad the politics of the strong unions could not be involved in support of this transaction

 

[Dog Wonder]

Maybe Doug could go to his close friends for help in resolving this.

Senators Specter and Reid.

 

[ClueByFour]

A horrible, horrible decision by the DOT. This is a government "Taking". We have paid millions of dollars for those slots over many years. This is direct and personal evidence aimed squarely at Delta/US employees of the socialist nature of our current Administration. Let us take from those attempting to be successful and give those slots away for FREE! With the transaction probably cancelled another blow to USAIRWAYS profitability, caused directly from government intervention in a private business transaction. I thought the Airlines were deregulated...Busflt321

You do realize that HP/US only exist today because of the generosity of the US Government in the form of the ATSB. Little late to be crying crocodile tears about government interference.

 

[700UW]

Generosity?

All they did was guarantee the loan, banks lent the money and the ATSB aka US Government made a handsome profit for it.

$300 million.

About a third of the projected profit from ATSB loans resulted from the merger of US Airways and America West Airlines last fall. The board issued a $900 million guarantee to the old US Airways, which restructured in bankruptcy, and $380 million to America West. The board remarketed the loans and received warrants for equity, which were sold for $112 million after the carriers merged.