American seeks to lease Newark slots to Virgin America

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American Airlines has requested bankruptcy court approval for a deal to lease 15 slots at Newark Liberty International airport to Virgin America, as part of a larger plan to reduce its costs at the airfield.

The Fort Worth-based airline would reject its existing agreements to lease four slots to Porter Airlines and 10 slots to United Airlines through October 2019 in order to provide the slots to Virgin America, according to a filing with the US Bankruptcy Court for the Southern District of New York on 2 January. It is seeking to end the leases on 30 March.

Burlingame, California-based Virgin America would pay American $10,000 per month for each slot, which is comparable to what Porter and United pay, according to the filing. The new lease would be effective 1 April and run through October 2022.

The low-cost carrier plans to begin service to Newark on 3 April with three daily flights from both Los Angeles and San Francisco.

"We have contingencies in place to continue operating the full schedule into and out of Newark pending the bankruptcy proceedings," says Toronto-based Porter.

The Canadian regional airline operates up to 13 flights per day between Newark and Toronto City Centre airport as well as one flight per week to Mont Tremblant, Quebec, according to Innovata schedules.

The loss of ten slots would likely have a minimal impact on United's large hub at Newark, where it has hundreds of slots.

The Chicago-based carrier did not comment by press time.

American is also seeking approval of a new gate lease at Newark with the Port Authority of New York and New Jersey (PANYNJ), according to the filing. It would return three of its six gates in terminal A to the airport operator for a savings of $25.4 million through the end of its contract on 31 December 2018.

Virgin America would subsequently lease one of the returned gates from the PANYNJ.