FAA Grants Approval to Proposed Airline Slot Swap at Northeast Airports

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Transaction will reshape airline makeup at LaGuardia, Reagan National airports.

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Over two years after Delta Airlines and US Airways initially proposed a plan to swap a significant number of takeoff and landing slots at New York’s LaGuardia Airport and Washington’s Ronald Reagan’s National Airport, the Federal Aviation Administration (FAA) issued an order to be published tomorrow that approves the transaction that will reshape flight schedules at two of the Northeast’s major airports.

Under the terms of the agreement, Delta would receive 265 slots at LaGuardia in exchange for its transfer of 84 slots at Reagan National to US Airways, plus a cash payment.

To allay concerns of anticompetitive harm, the FAA is requiring the airlines to sell 16 slots at Reagan National and 32 slots at LaGuardia through an FAA-supervised website to airlines with less than five percent of the slots at each respective airport.

The Antitrust Division of the Department of Justice issued a statement about the FAA’s approval, noting that while it has concluded its investigation of the swap at LaGuardia Airport, it will continue its investigation into potential anticompetitive concerns in the Reagan National swap, where “passengers pay among the highest fares in the country.”

Since a December, 2006 order, the FAA has regulated the peak hour traffic at LaGuardia to mitigate congestion-induced delays. This order, which the agency has extended several times, does not permit the purchase or sale of takeoff or landing slots at LaGuardia unless the FAA grants a waiver of the order for the transaction.

In May, 2010, the FAA approved, subject to swap divestitures, a similar LaGuardia-Reagan National swap transaction proposed by Delta and US Airways in August, 2009. However, instead of consummating the deal, the airlines appealed the agency’s order in the U.S. Court of Appeals for the D.C. Circuit. The Circuit Court dismissed this lawsuit by mutual agreement in May, 2011, two days after the airlines submitted their recent proposed swap.