Southwest, Virgin America to buy LaGuardia slots

[Hatu]

ATLANTA/WASHINGTON (Reuters) - Southwest Airlines (LUV) and Virgin American will buy the take-off and landing slots at New York's LaGuardia Airport that US Airways Group Inc and American Airlines must sell as part of their agreement to merge, three sources said on Wednesday.

http://finance.yahoo.com/news/southwest-virgin-america-buy-laguardia-001023563.html

 

[700UW]

Interesting, where would VX fly?
 
LAX, and SFO are outside the LGA perimeter rule.

 

[Glenn Quagmire]

Interesting, where would VX fly?
 
LAX, and SFO are outside the LGA perimeter rule.

ATL?

 

[700UW]

LOL

 

[WorldTraveler]

ORD or DFW... and then on to the west coast.

All of VX' service is in a UA or AA strength market.

 

[700UW]

So ATL it is, lol

 

[MetalMover]

But, but I thought DL was going to win this one!

 

[WorldTraveler]

if they want to give it a try, go for it.

psss... Richard Branson has been trying to get DL to buy VX like they did with the 49% of VS... so you might want to consider that. Branson also still has 25% invested in VS and he is very dependent on DL to help turn his airline around.

MM,
where did you come up with that idea?

 

[MetalMover]

if they want to give it a try, go for it.

psss... Richard Branson has been trying to get DL to buy VX like they did with the 49% of VS... so you might want to consider that. Branson also still has 25% invested in VS and he is very dependent on DL to help turn his airline around.

MM,
where did you come up with that idea?

 

2. spin doctor

An operative who uses his platform to influence the perception of a person, organization, or event. Like a damage-control PR person. 

Most often this is in the political context, usually conservative, with the spin doctor masquerading as a journalist or "expert in the field" to lend credibility to what's actually just a PR line cooked up by the right-wing.

 

[johnny kat]

As I have said before the NY market is so heavily saturated with competition DL may end up being the high cost provider in an ever increasing dog fight with everyone. Not so in PHL and DCA however, AA is looking smarter all the time. US has stated that the New York market is a completely different market than PHL and both are within a short distance with each other and will have different missions at the new AA. It looks as if AA will be in the same unique situation that UA is in EWR. And if that is the case DL will certainly have a harder time charging the fares it needs in order to be profitable there. Not to mention JFK.

 

[WorldTraveler]

except there is no basis for your "theory". DL has a lower CASM than UA by 10% and than AA by 6%. DL's market share and average fares at LGA and JFK are growing while its costs are growing far slower than its competitors.


You do realize that based on average aircraft size, 25% or more of the capacity at DCA will be moving from a legacy carrier to a low fare carrier? At DAL, WN has the ability just with 16 gates to fly enough capacity to carry half of the local market to the top 20 markets from DFW.

If you think that is a comfortable place to be or if AA is sitting pretty, then you should just take a swig of whatever you're drinking and keep singing happy songs because they aren't based in reality.

 

[N628AU]

Now DL at their prime NYC hub of LGA will see unprecedented LCC competition. I guess they might as well fold up their tent and figure out how file their second BK because of this development!

 

[Kev3188]

except there is no basis for your "theory". DL has a lower CASM than UA by 10% and than AA by 6%.

What sort of CASM(s) do WN & VX have?

 

[Force Majeure]

They do not qualify in this study (read narrative).

 

[FWAAA]

except there is no basis for your "theory". DL has a lower CASM than UA by 10% and than AA by 6%. DL's market share and average fares at LGA and JFK are growing while its costs are growing far slower than its competitors.

I don't believe that is accurate.   AA's consolidated CASM for the first three quarters of 2013 is lower than DL's consolidated CASM for the first three quarters.    And that's true whether we look at the all-in CASM or the ex-fuel/items CASM.   
 
All-in CASM for first 9 mo of 2013
 
AA:  14.33
DL:  14.71
 
Ex-Fuel/Items
 
AA:  9.07
DL:  9.09
 
http://news.delta.com/index.php?s=43&item=2144
http://hub.aa.com/en/nr/pressrelease/amr-corporation-reports-third-quarter-net-profit-of-530-million-excluding-reorganization-and-special-items
 
AA's consolidated CASM advantage over DL increases even more if we compare apple to apples, and that's by not excluding DL's profit sharing.   I realize that the DL accountants (and all accountants, for that matter) are sure that excluding profit sharing is the correct approach, but that reasoning is flawed.   Profit sharing is wages. compensation and benefits even though it is contingent on profits.    By excluding profit sharing, we get a bizarre result of higher profits equaling lower unit costs.   That's a perverse result that ignores reality.    Kev and all the other DL employees are owed profit sharing based on the reported profits, and thus it is a legitimate ordinary cost of operations for DL.
 
AA's unions, being just about the most stupid unions on the planet, traded away most of their profit sharing for meager increases in hourly pay.    The reason the unions were stupid to do so is that many of the DL workgroups have higher payrates than the AA payrates.   On top of that, the DL employees are also owed profit sharing.     If you're going to suffer bankruptcy concessions, the most brain-dead thing you can do is to give back the 15% first dollar profit sharing that management offered in its term sheets.  
 
Going forward,  however,  AA's consolidated CASM is likely to rise substantially, as new AA increases everyone's payrates and makes the inevitable capacity reductions that always accompany mergers.    Had the merger been blocked, the five-year 20% growth plan would have lowered the unit costs as capacity expanded.