12 August 2009

The Big US East Coast Switcheroo

Well the dust is clearing on the giant switch of airport slot assets on the US East Coast. It started yesterday with Continental and Air Tran doing a relatively small switch. AirTran AP reported planned to swap some Newark landing slots with Continental Airlines’ slots in Washington and New York, effective 25-Oct-09 AirTran would give Continental ten slots, gate and Jetway access at Newark in exchange for six Continental slots at Washington and four slots at LaGuardia.

Then the US Airways Delta swap was announced today.

As the Professor understands it, newly engrossed Delta acquires 125 slot pairs at LGA, US Airways acquires 42 slot pairs at DCA with international rights to Brazil and Japan both to be served from Charlotte. It is likely that cash will also change hands but that was not fully clear yet.

What is interesting is that the basis for this is swapping Regional and Commuter slots for mainline service slots in all the respective markets.

When the smoke clears it will mean a lot more nonstop services on the West Coast. It will also change the competitive landscape.

In my mind the winners here are US Airways in Washington market (who will be able to provide nonstop service in many markets particularly in the long haul arena now that West Coast services are possible from DCA). Correspondingly UAL will face increased competition despite having seen off several players who have attempted to boost services from the area - for example the spectacular collapse of Independence Air.

For New York - Delta will become a formidible competitor to Continental its cross town rival.

Is there a loser in all this?

In my opinion there are several losers. American will see its fall from top dog go even further, I have already given an opinion on UAL and CO. But perhaps the biggest loser(s) will be the small communities who currently receive nonstop service from both LGA and DCA airports.

Is this good?

Well lets see what Transportation Secretary LaHood has to say. For sure the disadvantaged will be clamoring for some mitigation.


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