US majors Delta Air Lines and US Airways through the tabling of a surprise agreement have opted to swap airport slots in two key US East Coast markets. Delta aims to transition 42 slots at Washington National airport to US Airways, in exchange for 125 US Airways Express slots at New York LaGuardia airport.
Through its expanded presence at LaGuardia Delta plans to create a US domestic hub, drastically enlarging its footprint in the New York metropolitan area beyond its hub at John F Kennedy International airport.
While US Airways eliminates 26 regional markets from LaGuardia and 300 jobs at its Piedmont Airlines subsidiary, Delta aims to more than double its nonstop flights from the airport by adding or sustaining flights to more than 30 small and medium-sized cities.
Outlining its decision to employees US Airways explains it captures "only about four percent of all revenue generated among the New York airports of LaGuardia, JFK and Newark and after the [new] flight schedule is fully implemented we'll account for even less. Given that, there is much more financial upside for Delta who has about 16% share".
Delta plans to accomplish its expansion through larger jets, vowing jets will operate "in every slot where US Airways operates small turboprops today".
For US Airways the 42 extra slots at Washington National should expand its passenger enplanements at the airport by around a third, as its total daily roundtrip flights increase by 42 to 229 and nonstop destinations grow from 46 to 61. Of the 15 new destinations, US Airways is introducing service in seven Washington National markets currently served by other carriers. It also plans to accomplish its expansion at Washington National by "increasing dual-class jet service by 50%", the carrier explains.
Another key part of the deal for US Airways is the transitioning over of Delta's international route authorities for Sao Paulo, Brazil and Tokyo, Japan.US Airways through rights it won earlier this year plans to inaugurate flights from its Charlotte, North Carolina hub to Rio de Janeiro in December. But the carrier has previously said gaining access to Sao Paulo in order to capture business travellers was key for the carrier.
Carriers that won approval to serve Brazil from October are prohibited from operating from Sao Paulo Guarulhos International airport until infrastructure constraints there are removed. US Airways aims to start new Charlotte-Sao Paulo flights in the second half of 2010.Tentative new flights from its Phoenix hub to Tokyo are not scheduled to debut "until 2012 or later" it says.
US Airways president Scott Kirby says: "Large business decisions are about tradeoffs. So, while we are disappointed to shrink our LaGuardia operations and cause uncertainty for some of our employees, we are excited about what we will now be able to accomplish in Washington, Brazil and Japan." US Airways estimates the transaction should improve its profitability by more than $75 million annually.
Source: Airline Business
