Slot Swap Stalled Over FAA Conditions

Delta Airlines may be considering re-opening its efforts to add additional slots at New York's LaGuardia Airport (KLGA) following Southwest's successful expansion in Newark (KEWR).

Delta and US Airways had worked a slot-swap deal that would have increased Delta's presence at LaGuardia, but that effort was shelved early in July when the FAA said they would have had to make some concessions to rivals. Southwest was not one of those airlines included by the FAA.

Now, Bloomberg News reports that aviation analyst Helane Becker says that since Southwest has gotten what it wanted from the FAA at Newark, Delta and US Airways could use that as a leveraging tool with the agency. They could argue, Beker said, that Southwest's previous objections were no longer a factor in their slot-swap.

Delta had proposed giving US Airways 37 slots at Washington's Reagan National Airport along with some international routes in exchange for 110 slots at LaGuardia. The FAA had agreed, if the two airlines would also make 34 pairs of slots available to other airlines with limited or no service at those airports, though Southwest was not one of the airlines named. Delta and US Airways balked at the conditions and walked away from the deal.

Now, analysts say that because Southwest is beefing up its service in Newark, the competition issue may be less of a factor. But Southwest still says it would be interested in slots at LaGuardia should they become available, and it's not certain if the courts would see slots at Newark as being equal to slots at LaGuardia when it comes to competition.

Still, Analyst William Swelbar, who specializes in airline economics for MIT, told Bloomberg "these talks will happen." He also said that other airlines will be watching closely, as the outcome could set a precedent for future slot trading negotiations.

FMI: www.faa.gov