jetBlue Wins LaGuardia/ DCA slots
11-23-2011, 06:20 PM
#1
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jetBlue Wins LaGuardia/ DCA slots
JetBlue Said to Win Auction of LaGuardia, Washington Flights - Bloomberg
JetBlue Airways Corp. (JBLU) won an auction to add flights at New York’s LaGuardia airport and Reagan airport in Washington, beating rivals that included Southwest Airlines Co. (LUV), two people familiar with the matter said.
JetBlue will receive eight pairs of takeoff and landing slots at each of the airports, said the people, who weren’t authorized to comment publicly about the U.S. Transportation Department auction. WestJet Airlines Ltd. (WJA) said it won the auction for eight other slot pairs at LaGuardia.
Federal rules limit flights at both airports, so airlines can expand only by securing slots. LaGuardia International, part of the nation’s busiest aviation market, and Ronald Reagan National are prized by carriers because each is popular with business fliers who typically buy the most-expensive tickets.
“Surprisingly, it does not look like Southwest put in a credible bid for either LaGuardia group,” said Jeff Straebler, an independent aviation analyst in Stamford, Connecticut. “At least for now, it appears that Southwest is satisfied with its position at LaGuardia, given slots it picked up from the AirTran acquisition.”
Southwest, the largest low-fare carrier, had said publicly that it would bid for flights at both airports. Brandy King, a spokeswoman for Dallas-based Southwest, declined to comment today. Southwest had eight daily LaGuardia flights and obtained 20 more when it bought AirTran Holdings Inc. in May, a deal which also gave Southwest 12 daily departures from Reagan.
Delta, US Airways
The airlines bid on slots that Delta Air Lines Inc. (DAL) was required to surrender to win U.S. approval for a trade of the flight spots with US Airways Group Inc. (LCC) at the two airports. The auction may be the biggest for landing rights at LaGuardia and Reagan, according to Sandy Rederer, a principal at consultant Aviation Planning & Finance in Washington.
JetBlue’s winning bids totaled $72 million, while Calgary- based WestJet bid $17.6 million, according to data on a government website. Mateo Lleras, a spokesman for New York-based JetBlue, declined to comment.
JetBlue has as many as 11 daily flights from LaGuardia and nine from Reagan. The airline probably bid more for the Reagan slots because it needs to expand in the Washington area, Straebler said. The airline has the most daily domestic flights from New York’s Kennedy airport.
‘Dark Horse’
“WestJet was always the credible dark horse at LaGuardia, given a strong cash position and its stepping up competition against Air Canada for ‘golden triangle’ traffic -- Toronto, Montreal and Ottawa,” Straebler said. “LaGuardia service to any of these cities will be a nice complement.”
Securing the flight slots was a “once-in-a-lifetime opportunity,” WestJet Chief Executive Officer Gregg Saretsky, said in a statement. “Our ability to serve New York demonstrates we are focused on delivering on our business traveler strategy.”
Other airlines that registered to bid were Frontier Airlines, a unit of Republic Airways Holdings Inc. (RJET); Spirit Airlines Inc.; Allegiant Travel Co. (ALGT); and closely held Sun Country Airlines Inc. Under rules set for the auction, airlines or affiliates already holding a certain amount of slots could not participate.
US Airways and Delta are awaiting approval from the Port Authority of New York and New Jersey to complete the LaGuardia side of the swap, after securing federal consent.
The Transportation Department also approved the Reagan portion, although the U.S. Justice Department has yet to sign off. The airlines have said they hope to close the transaction this year.
Rules set for the auction say the government won’t identify winners until carriers complete the sales, which must be done by Dec. 1. The Transportation Department declined to comment further, spokesman Bill Mosley said in an e-mail.
The exchange would give Atlanta-based Delta 132 more pairs of LaGuardia slots, assuring control of more than half the flights there. US Airways will get 42 pairs at Reagan, $66.5 million in cash and an additional daily route to Sao Paulo and will scale back unprofitable operations at LaGuardia.
To contact the reporters on this story: Mary Schlangenstein in Dallas at [email protected]; Alan Levin in Washington at [email protected]
JetBlue Airways Corp. (JBLU) won an auction to add flights at New York’s LaGuardia airport and Reagan airport in Washington, beating rivals that included Southwest Airlines Co. (LUV), two people familiar with the matter said.
JetBlue will receive eight pairs of takeoff and landing slots at each of the airports, said the people, who weren’t authorized to comment publicly about the U.S. Transportation Department auction. WestJet Airlines Ltd. (WJA) said it won the auction for eight other slot pairs at LaGuardia.
Federal rules limit flights at both airports, so airlines can expand only by securing slots. LaGuardia International, part of the nation’s busiest aviation market, and Ronald Reagan National are prized by carriers because each is popular with business fliers who typically buy the most-expensive tickets.
“Surprisingly, it does not look like Southwest put in a credible bid for either LaGuardia group,” said Jeff Straebler, an independent aviation analyst in Stamford, Connecticut. “At least for now, it appears that Southwest is satisfied with its position at LaGuardia, given slots it picked up from the AirTran acquisition.”
Southwest, the largest low-fare carrier, had said publicly that it would bid for flights at both airports. Brandy King, a spokeswoman for Dallas-based Southwest, declined to comment today. Southwest had eight daily LaGuardia flights and obtained 20 more when it bought AirTran Holdings Inc. in May, a deal which also gave Southwest 12 daily departures from Reagan.
Delta, US Airways
The airlines bid on slots that Delta Air Lines Inc. (DAL) was required to surrender to win U.S. approval for a trade of the flight spots with US Airways Group Inc. (LCC) at the two airports. The auction may be the biggest for landing rights at LaGuardia and Reagan, according to Sandy Rederer, a principal at consultant Aviation Planning & Finance in Washington.
JetBlue’s winning bids totaled $72 million, while Calgary- based WestJet bid $17.6 million, according to data on a government website. Mateo Lleras, a spokesman for New York-based JetBlue, declined to comment.
JetBlue has as many as 11 daily flights from LaGuardia and nine from Reagan. The airline probably bid more for the Reagan slots because it needs to expand in the Washington area, Straebler said. The airline has the most daily domestic flights from New York’s Kennedy airport.
‘Dark Horse’
“WestJet was always the credible dark horse at LaGuardia, given a strong cash position and its stepping up competition against Air Canada for ‘golden triangle’ traffic -- Toronto, Montreal and Ottawa,” Straebler said. “LaGuardia service to any of these cities will be a nice complement.”
Securing the flight slots was a “once-in-a-lifetime opportunity,” WestJet Chief Executive Officer Gregg Saretsky, said in a statement. “Our ability to serve New York demonstrates we are focused on delivering on our business traveler strategy.”
Other airlines that registered to bid were Frontier Airlines, a unit of Republic Airways Holdings Inc. (RJET); Spirit Airlines Inc.; Allegiant Travel Co. (ALGT); and closely held Sun Country Airlines Inc. Under rules set for the auction, airlines or affiliates already holding a certain amount of slots could not participate.
US Airways and Delta are awaiting approval from the Port Authority of New York and New Jersey to complete the LaGuardia side of the swap, after securing federal consent.
The Transportation Department also approved the Reagan portion, although the U.S. Justice Department has yet to sign off. The airlines have said they hope to close the transaction this year.
Rules set for the auction say the government won’t identify winners until carriers complete the sales, which must be done by Dec. 1. The Transportation Department declined to comment further, spokesman Bill Mosley said in an e-mail.
The exchange would give Atlanta-based Delta 132 more pairs of LaGuardia slots, assuring control of more than half the flights there. US Airways will get 42 pairs at Reagan, $66.5 million in cash and an additional daily route to Sao Paulo and will scale back unprofitable operations at LaGuardia.
To contact the reporters on this story: Mary Schlangenstein in Dallas at [email protected]; Alan Levin in Washington at [email protected]
11-23-2011, 10:29 PM
#6
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Joined APC: Oct 2006
Posts: 1,001
What is most annoying about the whole thing is that these slots are not airline assets.
Delta, US Airways, or whomever got them for free! When these airports weren't slot controlled, whoever wanted to fly there flew there. Then, on day, the US government decided that they had to limit flights, and apportioned these 'slots' out to the airlines in roughly the same proportion as these airlines flew to LGA and/or DCA. So, if you flew to LGA a lot, you got a lot of slots. If someone else wants to fly to LGA now, they have to get you to give them the right to fly to LGA, an airport that is publicly owned!
Guess why LGA and DCA need to be slot controlled - Delta and US Airways (and American and United to a lesser degree) run all those frakin' small planes in and out of LGA and DCA. Those EMB-170's and CRJ's a waste of good airspace that could be used by a 757 or A321 (LGA used to have L-1011's, those were the days).
Where else in the world can you cause a problem at a publicly owned facility, then get rewarded financially for causing it?
I'll get off my soapbox now.
Delta, US Airways, or whomever got them for free! When these airports weren't slot controlled, whoever wanted to fly there flew there. Then, on day, the US government decided that they had to limit flights, and apportioned these 'slots' out to the airlines in roughly the same proportion as these airlines flew to LGA and/or DCA. So, if you flew to LGA a lot, you got a lot of slots. If someone else wants to fly to LGA now, they have to get you to give them the right to fly to LGA, an airport that is publicly owned!
Guess why LGA and DCA need to be slot controlled - Delta and US Airways (and American and United to a lesser degree) run all those frakin' small planes in and out of LGA and DCA. Those EMB-170's and CRJ's a waste of good airspace that could be used by a 757 or A321 (LGA used to have L-1011's, those were the days).
Where else in the world can you cause a problem at a publicly owned facility, then get rewarded financially for causing it?
I'll get off my soapbox now.
11-24-2011, 05:44 AM
#7
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Posts: 12,109
Originally Posted by Sniper
Where else in the world can you cause a problem at a publicly owned facility, then get rewarded financially for causing it?
I'll get off my soapbox now.
I'll get off my soapbox now.
Your soapbox is very slippery
Happy Thanksgiving to all
11-24-2011, 06:39 AM
#8
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Joined APC: Feb 2007
Posts: 2,270
Originally Posted by Diesel1030
JetBlue Said to Win Auction of LaGuardia, Washington Flights - Bloomberg
Southwest, the largest low-fare carrier...
Southwest, the largest low-fare carrier...
11-24-2011, 08:35 AM
#10
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Joined APC: Jun 2006
Position: B737/Capt
Posts: 998
Originally Posted by Sniper
What is most annoying about the whole thing is that these slots are not airline assets.
Delta, US Airways, or whomever got them for free! When these airports weren't slot controlled, whoever wanted to fly there flew there. Then, on day, the US government decided that they had to limit flights, and apportioned these 'slots' out to the airlines in roughly the same proportion as these airlines flew to LGA and/or DCA. So, if you flew to LGA a lot, you got a lot of slots. If someone else wants to fly to LGA now, they have to get you to give them the right to fly to LGA, an airport that is publicly owned!
Guess why LGA and DCA need to be slot controlled - Delta and US Airways (and American and United to a lesser degree) run all those frakin' small planes in and out of LGA and DCA. Those EMB-170's and CRJ's a waste of good airspace that could be used by a 757 or A321 (LGA used to have L-1011's, those were the days).
Where else in the world can you cause a problem at a publicly owned facility, then get rewarded financially for causing it?
I'll get off my soapbox now.
Delta, US Airways, or whomever got them for free! When these airports weren't slot controlled, whoever wanted to fly there flew there. Then, on day, the US government decided that they had to limit flights, and apportioned these 'slots' out to the airlines in roughly the same proportion as these airlines flew to LGA and/or DCA. So, if you flew to LGA a lot, you got a lot of slots. If someone else wants to fly to LGA now, they have to get you to give them the right to fly to LGA, an airport that is publicly owned!
Guess why LGA and DCA need to be slot controlled - Delta and US Airways (and American and United to a lesser degree) run all those frakin' small planes in and out of LGA and DCA. Those EMB-170's and CRJ's a waste of good airspace that could be used by a 757 or A321 (LGA used to have L-1011's, those were the days).
Where else in the world can you cause a problem at a publicly owned facility, then get rewarded financially for causing it?
I'll get off my soapbox now.
This has always been my argument with regards to slot controlled airports. Except for American every airline who has large numbers of these slots has been through bankruptcy but wasn't required to divest of these "assets" to satisfy creditors. The ability to shed debt (including pensions) and hold on to assets makes no sense to me. Airline management types are sneaky fellows.
If the prices that were paid for these slots after running a cost/benefit analysis were too expensive then I am not surprised that SWA bailed out. Time will tell if these slots will turn a profit for Jblu and Westjet. I would be curious to see how long their analysis takes to break even.
I have always said if something is up for bid, go ahead and participate so as to make it painful for the winner. In this case I would argue that SWA's participation provided USair and DAL a higher price than would have been paid otherwise. You are welcome Tsquare.
Happy Thanksgiving also.
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