Airlines Vie for First Long Washington Flights Since ’04

Southwest Airlines Co. (LUV) and Virgin America Inc. are poised to jockey for new long-distance flights at Ronald Reagan Washington National Airport, the first such routes added since 2004.

Up for grabs are rights to four round trips for carriers with limited or no service at Reagan National, along with four more earmarked for the largest incumbents at the airport. Together, they will push daily long-haul departures to 20 in the coming months, a 67 percent increase.

The extra flight slots will open transcontinental routes from cities such as San Francisco that lacked service to Reagan National, which is prized by business and government fliers for its proximity to downtown Washington. It’s the only airport outside New York where regulators control that access, and most flights are limited to a 1,250-mile (2,011-kilometer) radius.

“Anyone who gets these slots will be ecstatic,” said Ed Faberman, executive director of the Air Carrier Association of America, a Washington-based group that represents the interests of small airlines. “It’s going to be a major race because new slots are so rare. It will create all sorts of new business.”

Airlines face a March 12 deadline to apply for new service.

United Continental Holdings Inc. (UAL) is among the four big airport tenants each getting an extra long-distance flight, while Southwest, Virgin America and Alaska Air Group Inc. (ALK)’s Alaska Airlines said they will vie for the new, so-called beyond-perimeter routes.

Smaller Competitors

They may be joined by JetBlue Airways Corp. (JBLU), Spirit Airlines Inc. (SAVE), Republic Airways Holdings Inc. (RJET)’s Frontier unit and Sun Country Airlines Inc., Faberman said. Spokesmen for those companies declined to comment on their plans or didn’t return calls seeking a comment.

Other eligible airlines such as Hawaiian Holdings Inc. (HA) and Air Canada (AC/B) didn’t return calls seeking a comment. WestJet Airlines Ltd. (WJA) hasn’t yet decided whether to apply, Jennifer Sanford, a spokeswoman, said by e-mail.

“This is significant, because if you’re traveling on business and can leave from National you might not have to make as many connections anymore, or possibly no connections on certain routes,” said Jeff Straebler, an independent airline analyst in Stamford, Connecticut.

The new beyond-perimeter slots were authorized by a funding bill for the Federal Aviation Administration signed into law in February, and are the first created since 2004, according to Bill Mosley, a Transportation Department spokesman.

Perimeter Rule

Regulators added the perimeter rule in the 1960s when noise from scheduled jet service angered nearby residents. The 1,250- mile limit for most flights allows nonstop service to cities as far away as Houston. More-distant cities, such as Las Vegas or Los Angeles, must have a connection or be operated under a dozen existing exemptions that allow certain carriers to fly nonstop.

For example, US Airways Group Inc. (LCC) has the only nonstop flight from National to Las Vegas and Alaska Airlines is the only carrier allowed to fly nonstop to Los Angeles.

San Francisco is now the biggest market on the U.S. West Coast without direct access to Reagan National, according to Virgin America. The Burlingame, California-based carrier is seeking two daily round-trip flights between Reagan National and San Francisco, its hometown and largest base for flights.

About 2,100 passengers fly daily between San Francisco and Washington’s three airports -- Dulles International, Reagan National and Baltimore-Washington, according to Virgin America. Approximately 85 percent of them use Dulles, which can be an hour or more by car from downtown, the airline estimates. Reagan National can be only a 15-minute drive from the White House.

Apple, Google

Bay Area technology companies such as Apple Inc. (AAPL), Google Inc. (GOOG), Intel Corp. (INTC) and Cisco Systems Inc. (CSCO) would benefit if Virgin America succeeds, Chief Executive Officer David Cush said.

“These are the companies that are driving the economy right now, and government is a big component of what they do,” Cush said. “I have no doubt that we could fill two frequencies” to San Francisco.

Southwest, which flies from Baltimore-Washington and gained inside-perimeter flights at Reagan National as part of its 2011 purchase of AirTran Holdings Inc. (AAI), declined to say how many round trips it would seek or where it would use them. The airline applied separately this month for inside-perimeter slots to fly between National and Oklahoma City, said Whitney Eichinger, a spokeswoman. The flight would continue to Dallas Love Field, the home airport for the biggest discount carrier.

An Alaska spokeswoman, Bobbie Egan, declined to say what destinations or how many flights it would seek.

US Airways, United

US Airways is “still evaluating” where to use its new round-trip flight, said Todd Lehmacher, a spokesman for the Tempe, Arizona-based airline. Two of its three big peers at Reagan National are targeting extra California service.

United plans to use its new route to fly from National to San Francisco starting in May, and AMR Corp. (AMR)’s American Airlines will start service to Los Angeles in June, according to regulatory filings. Delta Air Lines Inc. (DAL) will add another flight from National to Salt Lake City in June.

Greater competition on transcontinental routes from Reagan National to cities such as Los Angeles and United’s plans to start San Francisco flights make it “crucial” that discount carriers gain a toehold in nonstop service, said Faberman of the small-airline trade group.

“Some of these cities will see flights to National for the very first time, or competition to National for the very first time,” Faberman said. “The whole industry is paying attention to this.”

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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