US/DL LGA/DCA Slot Swap Deal
- Thread starter a320av8r
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FutureUScapt
Veteran
- Dec 1, 2005
- 600
- 13
So how much do we pay the DOT/FAA in "rent" for these slots? Please, do tell.
Even WN, in their joke of an argument, refers to the slots as assets and that has been the traditional view throughout - that the government can not just come in and take the assets as they see fit. Read AA/UA/CO's comments and you'll also see that they agree the FAA is grossly overstepping their bounds and has "economic authority"
Also, find me an airline that meets the DOT's "5% marketshare" requirement and isn't an LCC. I came up with Porter Airlines, maybe you know of more?
does this plane go to paris
Senior
The previous ruling from the DOT included the provision that the slots be auctioned off to a carrier with less than 5% of the LGA marketshare, not the entire industry.
It was a rather boring read, but I looked up the FAA manual regarding the slots at LGA. It's been revised and amended several times but the clear intention of the slot program is to limit delays and promote competition. The one clear item is these provisions "...explicitly stating that the slots were not the carriers' property and did not constitue a propietary right.." They do however allow carriers to buy, sell or lease the slots on the secondary markets...", there are provisions and have been revised over the years.
When the proposals came out, it was interesting to note that "Other carriers, including U. S. Airways and American Airlines, noted that the secondary market should be as transparent as possible since even a hybrid system, whereby the lessor would accept the highest cash bid and then negotiate the value of nonmonetary assets after the bid was accepted, would close interested lessees out of the transactions"
So they can come in and take away slots. They have allocated a certain number of slots as being "grandfathered" in, so that a carrier can run a continual operation but after that number, the FAA proposes that a slot is good for 10 years and then it's up on the block. Could be misreading it, but there were 29 loooooooong pages.
It was a rather boring read, but I looked up the FAA manual regarding the slots at LGA. It's been revised and amended several times but the clear intention of the slot program is to limit delays and promote competition. The one clear item is these provisions "...explicitly stating that the slots were not the carriers' property and did not constitue a propietary right.." They do however allow carriers to buy, sell or lease the slots on the secondary markets...", there are provisions and have been revised over the years.
When the proposals came out, it was interesting to note that "Other carriers, including U. S. Airways and American Airlines, noted that the secondary market should be as transparent as possible since even a hybrid system, whereby the lessor would accept the highest cash bid and then negotiate the value of nonmonetary assets after the bid was accepted, would close interested lessees out of the transactions"
So they can come in and take away slots. They have allocated a certain number of slots as being "grandfathered" in, so that a carrier can run a continual operation but after that number, the FAA proposes that a slot is good for 10 years and then it's up on the block. Could be misreading it, but there were 29 loooooooong pages.
FutureUScapt
Veteran
- Dec 1, 2005
- 600
- 13
Correct, but it also said that it could not be sold to carriers who codeshare with airlines controlling more than 5% of the slots, so go ahead and throw UA out. Plus, UA controls 5% of the slots in LGA and CO codeshares with UA - so CO isn't eligible at LGA even if it wanted more. BTW, CO has 5% of the slots at DCA so they aren't eligible either. AC doesn't have 5%, but wait, they codeshare with UA so that negates LGA and they will soon codeshare with CO (application pending IIRC), so there goes their opportunity at DCA.
Are you following this jumbled mess?
It was all but written so that Southwest, jetBlue, and/or Air Tran would be the recipients (AS and VX with west coast hubs have no real viable options). The FAA/DOT might have been better off to just write their names as the required recipients of the original ruling!
As for if the FAA has the authority to take the slots, I guess we shall see but it take a precedent for them to do so. The FAA is responsible for ensuring the safety of aircraft and efficient use of airspace, not impose conditions related to economic/market conditions
So US has 47% of DCA NOW what percent of LGA does US hold NOW. Why give up something ever body wants that you guarantee domain NOW HPAirways is up to something
DCA is a better option for US because of the government and contract fares into DCA. They arent cheap and are probably a lot better yield than a tourist fare into LGA having to compete with B6/DL/AA into JFK (and to a lesser extent EWR). I know they are separate airports, but I'm sure the B6 pricing has some affect on LGA. You can argue to a point that WN has the same affect at BWI/IAD, but not to the extent that there is at LGA since US has more flights to price accordingly at DCA.
Also, DCA is a much better place to offer connections for these new cities than LGA is. Much less ATC and better operating conditions on a daily basis. Cant wait for the DL Hub at LGA to start. Not a great place to connect thru.
It is an absolute travesty what US has done at LGA.
You think B6 pricing has an effect on LGA fares? If it does, then US could make a fortune - B6 is frequently the highest fare airline EX-NYC now a days. Try booking a B6 NYC-FLL nowadays - frequently $299 O/W. In fact, NYC-Florida is in no way a "cheap" market anymore.
The downsizing / regional experiment was clearly a failure at LGA, but there is no reason why US could not profitably run 150 mainline flights / day from LGA. They should serve the same destinations B6 serves from JFK that are within the perimeter, then also serve the OAL Hubs / major USA cities (i.e., ATL, DFW, IAH).
Too bad it will never happen; I still remember when that place opened up 18 years ago... that was a good day. What could have been.
You think B6 pricing has an effect on LGA fares? If it does, then US could make a fortune - B6 is frequently the highest fare airline EX-NYC now a days. Try booking a B6 NYC-FLL nowadays - frequently $299 O/W. In fact, NYC-Florida is in no way a "cheap" market anymore.
The downsizing / regional experiment was clearly a failure at LGA, but there is no reason why US could not profitably run 150 mainline flights / day from LGA. They should serve the same destinations B6 serves from JFK that are within the perimeter, then also serve the OAL Hubs / major USA cities (i.e., ATL, DFW, IAH).
Too bad it will never happen; I still remember when that place opened up 18 years ago... that was a good day. What could have been.
What do you suggest????
SS255
Veteran
As a West Coast-based flyer, I would prefer to have the perimeter rule eased, so that I could fly nonstop into LGA and DCA.
This would only worsen the problem. Without hubs, you would have significantly more point-to-point traffic, only further clogging up the airspace.
I agree with SS255, I'd like to see the perimeter rules abolished so that I could fly nonstop from LAX to DCA and LGA on any airline. Those flights would be a better use of the scarce resource than connecting passengers at LGA or DCA. We already have connecting hubs at BWI (WN), IAD (UA), JFK (B6), PHL (US), EWR (CO), CLT (US) and ATL (DL and FL). How many more eastern connecting hubs do we need? Somehow, we need to price the landing/takeoff at DCA and LGA so that those who value it the most are paying for it. Some sort of congestion pricing method. That would discourage any airline from attempting to connect lower-yield passengers at those airports. In my view, LGA and DCA should serve O&D traffic exclusively.
FWIW, you can fly nonstop LAX-DCA today on AS. I realize no other airline can offer this service, but it is possible. Ditto with SEA-DCA. SFO-DCA would be nice, too. UA applied but lost the application to a carrier flying a different route, I think SLC-DCA on DL.
