Includes Domestic, International Routes From DCA, LGA

US Airways and Delta Air Lines announced a transaction Tuesday that expands US Airways service at Ronald Reagan Washington National Airport (DCA), and gives the airline access to key business centers in Brazil and Japan. US Airways will obtain 42 pairs of Delta’s slots at DCA and acquire the rights to expand to Tokyo, Japan and Sao Paulo, Brazil. Simultaneously, US Airways will transfer 125 pairs of its slots to Delta at New York's LaGuardia Airport (LGA). One slot equals one takeoff or landing; so one pair of slots equals one roundtrip flight.

US Airways will retain a significant presence at LGA. The reduction in flying necessitated by the transfer of LGA slots will be accomplished through reductions in US Airways Express flying. The airline does not plan to make any changes to mainline flight levels, including its popular US Airways Shuttle service with hourly flights from New York to Boston and Washington.

“We are very excited about today's announcement which presents an excellent opportunity to strengthen our network while bringing more jet air service to smaller communities from our nation's capital," said US Airways Chairman and CEO Doug Parker. "This transaction will improve US Airways’ near and long-term profitability to the benefit of our employees, our customers, the communities we serve, and our shareholders.”

The transaction is structured as two simultaneous asset sales and is expected to be cash neutral to US Airways. US Airways estimates the transaction will improve profitability by more than $75 million annually.

“This is great news for travelers to and from the Washington, D.C. region,” said US Airways Senior Vice President, Marketing and Planning Andrew Nocella. “After the transaction is complete, US Airways will provide nonstop service from DCA to 15 new daily destinations, and to further ensure continuity for air travelers, we also plan to maintain existing service today to all DCA destinations that Delta may discontinue as a result of this transaction.”

Nocella continued, "We also plan to increase the number of seats we fly at DCA by using larger dual-class jets. This will increase capacity in a dense market, where demand continues to be brisk, without the negative effects of additional congestion."

US Airways will operate 229 peak-day departures at DCA. However, there will be no increase in net flight activity at DCA due to Delta’s reduction in slots. US Airways’ expanded presence at DCA will create approximately 100 new US Airways jobs that will be allocated to DCA and throughout the new regions where the airline is starting service.

US Airways will also acquire from Delta the rights to operate daily service at two of the world’s most important business destinations – Sao Paulo, Brazil and Tokyo, Japan. These two cities will complement US Airways’ existing portfolio of more than 50 international destinations in more than 30 countries and territories across Europe, the Middle East, Latin America, North America, and the Caribbean.

With 125 fewer slot pairs at LGA, US Airways plans to discontinue service to 26 Express destinations served from LGA. The reduction in Express flying at LGA will result in the need for approximately 300 fewer employees at US Airways’ wholly owned regional carrier, Piedmont Airlines. Piedmont CEO Steve Farrow said, "While this is good news for our parent company, US Airways, it is very disappointing news for the Piedmont team. Our employees have done an excellent job of providing service to US Airways and its customers. We understand the need to optimize assets, though, and we will ensure that all affected Piedmont employees are treated fairly."

For Delta's part, the company is equally enthusiastic about the deal. Delta expects to more than double the number of nonstop destinations it serves from LaGuardia by adding or preserving service to more than 30 small- and medium-sized communities. New markets and larger aircraft would allow more than two million additional passengers to transit LaGuardia each year without increasing the total number of takeoffs and landings.

"Delta's investment at LaGuardia is good for customers because it provides new convenient service options and ensures continued access to many small communities that our competitors have not historically served," said Gail Grimmett, Delta's senior vice president - New York. "During the last 30 years, successful slot trades have helped foster a competitive environment for the airline industry. With this agreement, Delta will inject additional competition in the New York market. Many small- and medium-sized communities throughout upstate New York and New England will benefit from service upgrades where Delta will operate larger regional and mainline jets."

Once the transaction is approved, Delta plans to begin a nearly $40 million construction project at LaGuardia, which should  be completed in 2010.

FMI: www.usairways.com, www.delta.com