Delta/US Airways LGA/DCA Slot Swap and What it Means for Travelers

Since 2009, Delta and US Airways have been trying to gain approval for a “slot swap”, in which Delta would give up “slots” in Washington’s Reagan National Airport (DCA) in exchange for US Airways slots at LaGuardia (along with some other stuff).  This swap moved a step closer to reality this week, as the FAA approved the proposed exchange, though DOJ’s antitrust division still has some concerns about the large share US Airways will control in Washington.  Given the approval it’s given to the many mergers over the past few years, I don’t think an antitrust objection here would pass the sniff test.  A good summary of the current state of affairs is here.

Although this story has been in business news, several travelers have already asked me to explain what the heck is going on here.  So here’s my attempt to do so and some of my current thoughts.

First, what is a slot pair?  A slot pair is the authority for an airline to operate one take-off and one landing from an airport.  Domestically, five airports are slot-controlled in the U.S.:  O’Hare, National, LaGuardia, Kennedy, and Newark — meaning the only way for an airline to add service there is to get the slot from someone else.

What this Means for New York Travelers

Under the plan, U.S. Airways will essentially drop its unofficial LaGuardia focus city.  It will move from flying to about 35 destinations from LaGuardia (nearly all on the Maine to South Carolina I-95 corridor), to 5- its hub cities of Charlotte, Philadelphia, and Pittsburgh, and its shuttle operations to Washington and Boston.  For New York customers loyal to U.S. Airways, this will be a pain.  There aren’t many though.  And if you really want to fly U.S. Airways to your destination, you’ll probably be able to with a stop in one of those cities, as U.S. plans to keep 60 daily departures total.

Delta, on the other hand, will become a LaGuardia behemoth– officially a domestic hub– something which I actually have mixed emotions about.  First, Delta will take over almost all of U.S. Airways’s terminal, meaning Delta will be operating out of THREE different terminals at LaGuardia.  There are only four terminals at LaGuardia.  (Delta already operates its shuttles to LaGuardia, National, and Chicago out of the Marine Air Terminal) This is going to lead to a lot of confused travelers.  To ameliorate problems, Delta plans to build a 600-foot walkway to connect the current U.S. Airways and Delta terminals.  This is essentially what Delta is doing in JFK as well– making a hodgepodge of terminals and connecting them with a long walkway.  Unfortunately, given space limitations in New York and the age of these airports, I don’t know if there is another viable solution.

Second, Delta will likely pick up most, if not all, of the cut U.S. Airways destinations, and add more, as it is inheriting and has promised to “double” the amount of destinations it serves from LGA.  As a Delta flyer who actually prefers flying out of JFK to LGA due to the ease of public transportation to JFK from both my home and office, I don’t love this, because my guess is that “doubling” the destinations from LGA means moving some destinations from JFK.

For those people who were flying on US Airways from LaGuardia to smaller cities, an added benefit will be that Delta plans to serve those routes with regional jets, not turboprops as US had often done.

Overall, I don’t expect to see a huge change on pricing, since you’ll be going from monopolies on routes served by US to monopolies on routes served by DL.  For frequent flyers looking to consolidate travel on one airline out of NY, it narrows the choices to Delta and United.  United flyers can still take advantage of the remaining US service and credit it to their United accounts.  I’ve never seen American as a massive player unless you’re flying to the West Coast and need to connect, or internationally out of JFK.

What this Means for DC Travelers

The impact will be much smaller on DC travelers, given how much US Airways already dominates DCA.  There will unlikely be any major physical changes to the airport, except US will fly out of more gates, and Delta less.    Delta is dropping far fewer routes out of DCA than US Airways is out of LGA, simply because it had much fewer to start with.  Delta hasn’t confirmed its exact plans, but it has stated it will keep its 7 hubs (JFK, ATL, DTW, MEM, MSP, CVG, and SLC (its lone outside the perimeter route)), its LGA and BOS shuttles, and “select” other cities.  Potentially on the chopping block: Orlando; Jackson, MS; Charleston, SC; Columbus; Hartford; Jacksonville; Lexington, KY; Indianapolis; Omaha; Madison; New Orleans; Tampa; Des Moines; Providence; Grand Rapids; and St. Louis.  Of these, most likely to stay are the Florida routes (particularly Orlando – a former Delta hub), Hartford, St. Louis, and Indianapolis, as they’re all cities Delta has been building up for a long while.  The other cities are well-situated for connections through Delta’s hubs.

US Airways has said it is adding 15 destinations, mostly in the Southeast.  Of these 15, 5 are current Delta destinations (Cincinnati, Des Moines, Grand Rapids, Miami, and Madison — Miami and Cincinnati being the only surprises).  US already flies to every other Delta DCA destination except Jackson, Lexington, St. Louis and Omaha.  (The failure to add St. Louis makes it even more likely Delta is keeping that route.)   US will then compete with Air Canada on its Montreal and Ottawa routes — an odd-Star Alliance rivalry. The others are new Southern cities Birmingham, Little Rock, Savannah, Tallahassee, Pensacola, and Myrtle Beach, and random New York cities Ithaca and Islip.  Ithaca and Islip strike me as the weirdest.  Growing up on Long Island, I saw Islip go from a growing airport with presences from most major characters to its current state of a large Southwest operation (which is shrinking) plus US Airways’ random flight to Philadelphia.  I don’t see a huge O&D ISP-DCA market, given the ease of the drive/train/bus, shuttle service from LGA, and Southwest service to BWI.  And other airlines have tried and failed to connect ISP to their hubs in the past ten years (Continental, Delta, and even Spirit).  As for Ithaca, well, its Ithaca, and US Airways already flies there from PHL.

So all and all, travelers will see more destinations and more competition on existing routes at DCA.

The Wild Card

US Airways is giving up 8 slots at DCA, and Delta is giving up 16 slots at LGA, which will be given off to carriers without large presences at those airports.  Where these slots will go is anyone’s guess.  It’s clear Southwest will try for them, particularly out of DCA.  But the last DCA slot auction went in an unexpected way, with Sun Country picking up a pair to fly from DCA to Lansing via Minneapolis.

What it Doesn’t Really Mean for Any One

Southwest has made a big stink about this, which I find completely disingenuous.  Its merger with AirTran gives it a monopolistic presence in the domestic budget traveler industry.   Southwest has been able to enter LGA, as have low cost carriers more generally.  Moreover, Southwest has no interest in starting a LaGuardia to Roanoke nonstop.  If Southwest had the slots Delta will inherit at LGA, it would likely use them to fly to Chicago-Midway, BWI, Florida, or Atlanta — none of which are underserved.  Operating about half of the flights out of LGA also doesn’t strike me as a big deal, given how many flights there are out of LaGuardia generally, plus how many flights there are out of JFK and Newark.   There’s more of a concern about a lack of competition in places  like Houston, Minneapolis, Detroit, or Dallas that are dominated by one carrier and have few alternatives.

On the DC end, there certainly is less competition at DCA- but that’s not new, as DCA has been a US Airways focus city for years, and Delta was really the only other airline with a close to sizeable presence.  And although business travelers far prefer DCA to Dulles (IAD) and BWI,  those airports do provide a lot of options — particularly since flights out of DCA are limited by the “Perimeter Rule” (under which there are only 12 slot pairs for flights beyond 1,250 miles).  Southwest monopolizes BWI, and United dominates the IAD domestic market, with JetBlue filling in some other destinatinons.  Southwest also has gained a DCA presence in its purchase of AirTran.

So there are my thoughts. They’re worth exactly what you paid for them.

One thought on “Delta/US Airways LGA/DCA Slot Swap and What it Means for Travelers

  1. Pingback: You Went Where??? » Blog Archive » Industry News: AA Bankruptcy and Slot Swap Winners

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