Delta, US Air Say Talks May Resolve Airport Dispute
Delta Air Lines Inc., US Airways Group Inc. and federal officials have told a U.S. appeals court they may be able to resolve a dispute over airport landing slots in New York and Washington that prompted a lawsuit.
In a filing yesterday, the airlines, the Federal Aviation Administration and the U.S. Transportation Department sought to delay further hearings as discussions continue.
An agreement could allow Delta, the world’s second-biggest carrier, to build its presence at New York’s LaGuardia airport, which it uses as a base for domestic flights. In the planned swap of landing and takeoff slots, US Airways could increase flights at Washington’s Reagan National.
“It sounds promising toward a settlement,” Robert W. Mann, president of aviation consultant R.W. Mann & Co., said in an interview today. An agreement may result in Delta “owning New York, at least on the east side of the river,” he said.
New York is pivotal for Delta, which has an overseas hub at the city’s Kennedy airport and has a $1.2 billion terminal- construction project under way there.
Jim Olson, a spokesman for Tempe, Arizona-based US Airways, and Trebor Banstetter, a Delta spokesman, couldn’t immediately comment on the court filing.
The airlines and federal agencies “have determined that further discussions between them may lead to a mutually agreeable resolution of this proceeding,” according to the document filed with the U.S. Court of Appeals in Washington.
Southwest Airlines
Southwest Airlines Co., which opposed solutions proposed earlier by US Airways and Delta, “absolutely” remains interested in acquiring additional access to the restricted airports, Chief Executive Officer Gary Kelly said yesterday.
An agreement would resolve a dispute that began in March, when Delta, the biggest airline at LaGuardia, proposed getting 110 new flight slots there in exchange for giving US Airways 37 slots at Reagan, along with routes to Tokyo and Sao Paulo. Because flights are capped at both airports, carriers can grow only by swapping slots.
The FAA, concerned the plan would reduce competition, ordered the carriers to surrender 34 pairs of takeoff and landing slots to airlines with little or no service at the two airports. In response, the airlines said they would offer 19 1/2 pairs to specific carriers, including JetBlue Airways Corp. and AirTran Holdings Inc. The federal agency later found the compromise insufficient.
Blind Auction
Southwest, the largest low-fare carrier, pushed for slots to be dispersed through a blind auction. Delta and US Airways opted in July to walk away from the deal and instead appeal in court.
US Airways and Delta asked regulators to re-evaluate their order to divest slots after Southwest said Sept. 27 that it would acquire AirTran, giving it access to Reagan for the first time and additional slots at LaGuardia.
That followed Southwest’s Aug. 27 agreement to receive slots for 18 daily round trips at Newark, New Jersey’s Liberty airport as United Airlines and Continental Airlines Inc. scaled back to win federal approval for their merger.
Delta and US Airways argued they should be allowed to keep more slots because competition at New York-area airports had been enhanced by the Southwest agreements.
The case is Delta Air Lines Inc. v. Federal Aviation Administration, 10-11530, U.S. Court of Appeals for the District of Columbia (Washington).
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net
To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net
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