5.3.24 - The Shocking Way Delta Moved To Dominance In New York, While Competitors And DOT Slept
' Enilria combed through airlines trading their takeoff and landing rights in New York and DC and found something shocking: that Delta managed to obtain slots from Canada’s WestJet that the federal government had fought to keep out of its hands for 12 years.
It appears to be the culmination of Delta’s plan – laid out 15 years ago – to “win New York.”
In 2011, US Airways management made one of the all-time short-sighted moves in aviation. They traded much of their position at New York LaGuardia airport to Delta for slots at Washington National airport and cash.
Originally proposed in 2009, the deal gave Delta 132 slot pairs (flights) at LaGuardia while US Airways got 42 slot pairs at National plus $66.5 million.
- US Airways would have strengthened its position at National airport anyway just a couple of years later when it took over American Airlines
- The federal government didn’t allow them to grow beyond their Delta deal at National airport, forcing a divestiture of slots with the American merger. Basically they took Delta slots at National instead of taking the American ones. But they lost their position at LaGuardia.
- They will never recover the position they had at New York LaGuardia and they’ve had no New York strategy ever since, as Vasu Raja puts it ‘too small to compete, too big to walk away.’
Now-American Airlines has gone through several failed New York strategies. A decade ago they tried to ‘bring passengers to New York’ instead of serving the local market of New Yorkers. They they shifted to trying to run a ’boutique operation’ focused on their hubs and joint venture partner destinations. Finally they entered into a revenue-sharing and schedule-coordination partnership with JetBlue that they lost to anti-trust.
Just like United traded away its position at New York JFK, US Airways-now-American traded away its position at LaGuardia – and neither will ever get those back. In both cases the beneficiary in New York was Delta.
However, the Department of Transportation wouldn’t allow all of the slots Delta had at National to go to US Airways. There were remedy slots that had to be leased elsewhere. And they wouldn’t allow all of the US Airways slots at LaGuardia to go to Delta. WestJet took 8 roundtrips.
- Even though DOT refused to allow Delta to take those 8 roundtrips from US Airways they have now allowed Delta to secure them back from WestJet.
- And concern that Delta would gain control over those 8 New York LaGuardia trips is literally what stood in the way of the Delta-WestJet joint venture.
This is shamefully asleep at the switch for the Department of Transportation, and a Biden administration the has claimed to prioritize competition, but it’s amazing government affairs work by Delta. They weren’t allowed to grow at LaGuardia, the government was specifically concerned about the WestJet slots which were originally the solution to Delta’s dominance at LaGuardia and Delta got them anyway? This seems literally insane.
Delta’s government relations capability is impressive. They led the charge for more beyond-perimeter slots at National airport in FAA reauthorization, to secure the strongest position at Tokyo Haneda airport and to mobilize the government to act against the competitive threat of American Airlines and JetBlue partnering in the Northeast. '