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American Airlines (AA, Dallas/Fort Worth) and JetBlue Airways (B6, New York JFK) agreed to voluntarily divest at least seven slot pairs at New York JFK and six at Washington National as a part of a compromise agreement with the US Department of Transportation to approve the two airlines' alliance in the north-eastern United States.
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- At that time, the agency was concerned about a spillover effect from the limited operations at John F. Kennedy International Airport (JFK) during the busy summer scheduling season. The Port Authority is planning major runway reconstruction at JFK during 2017 and 2018, which will have an impact on overall runway capacity.
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At JFK, American Airlines will divest four slot pairs and JetBlue three. The divestiture will be permanent and irrevocable. In turn, the Washington National bundle, consisting of four slot pairs owned by American and two by JetBlue, will be through renewable leases to other airlines. The carriers committed to divesting the slots through two public auctions, one for JFK and one for Washington National. They are obliged to do so within a year of the agreement or three months of the expiry of the COVID-related slot utilisation waiver (which has recently been extended through October 24, 2021), whichever falls earlier.
Additionally, the airlines committed to growing their collective capacity in New York, subject to penalties in the form of additional slot divestitures. American and JetBlue pledged to offer 105% of baseline capacity based on 2018-19 data at JFK and New York La Guardia in 2022, 110% in 2023 and 2024, and 115% in 2025. If the level of capacity in 2021 is below 75% of 2019's, the thresholds will be deferred by one year each. Should the airlines fail to meet the targets, they will have to divest a further up to 10 slot pairs at JFK, including 6.5 pairs owned by American and 3.5 by JetBlue.
The agreement also banned any fare or revenue management strategy discussion within or outside the partnership's scope. The airlines also committed to annual reporting of the effects of the cooperation. JetBlue specifically pledged not to suspend any non-seasonal services from JFK once the partnership is effected.
Following the agreement's signing on January 10, 2021, the DOT terminated its review of the proposed joint venture agreement. However, the regulator retains authority to resume the investigation in the future.
In a press release celebrating the DOT's agreement, the two airlines vowed to provide a 'seamless customer experience' in the North-East, improve and align their networks, and implement a two-way code-share partnership involving operations at JFK, La Guardia, New York Newark, and Boston.
Just before the termination of the DOT review, on January 7, Spirit Airlines (NK, Fort Lauderdale Int'l) filed a complaint seeking a full public investigation into the proposed joint venture. The ultra-low-cost carrier alleged that the partnership would cement oligopoly and further complicate already extremely restricted access of new entrants to the New York market.
About American Airlines
| Type | Scheduled Carrier |
|---|---|
| Base | Dallas/Fort Worth |
| Aircraft | 883 |
| Destinations | 352 |
| Routes | 1245 |
| Daily Flights | 4456 |
Airlines can hold onto their slots at busy airports in New York and Washington until March, a bit of good news from U.S. officials amid a worsening outlook for their first winter during the coronavirus pandemic.
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The Federal Aviation Administration has waived slot usage rules at the congested New York John F. Kennedy (JFK) and New York LaGuardia (LGA) airports as well as at Washington Reagan National (DCA). The waiver now extends until March 27, 2021, the FAA said in a notice posted on Oct. 5. One slot is needed for every takeoff or landing — two for a round-trip flight — at these airports.
In addition, rules governing the coordination of flights at busy Chicago O’Hare (ORD), Los Angeles (LAX), Newark (EWR) and San Francisco (SFO) airports were partially extended through March.
Previous waivers to both sets of rules were set to expire Oct. 24.
The move by the FAA is good news for airlines. Without the waiver, any airline with a slot at JFK, LaGuardia or Washington National faced the prospect of having to fly 80% of its schedule or risk losing those valuable rights. That could have meant hundreds of nearly-empty “ghost flights” operating this winter — costing airlines precious money and pumping unneeded carbon into the atmosphere.
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For example, American Airlines is scheduled to resume its pre-pandemic schedule of up to 258 daily departures from its Washington National hub on Dec. 1 — a dramatic jump from just 63 departures the day before — according to Cirium schedules. The airline can now decide what level of air service is warranted based on the number of travelers taking to the skies rather than a need to comply with slot rules.
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Flyers, however, are not expected to be back in significant numbers by then. Recent data from travel analytics firm OAG shows November bookings at American, Delta Air Lines and United Airlines at at most a quarter of the level seen at the the beginning of October 2019.
Video: FAA chief not ready to re-approve Boeing 737 Max (Reuters - US Video Online)
Related:Thanksgiving a bust? Airlines slash November schedules as demand sputters
Data from trade group Airlines for America (A4A) shows U.S. domestic flyer numbers down 65% during the week ending Sept. 27 compared to last year.
Not every airline supported the FAA’s waiver extension. Discounter Spirit Airlines objected to the move in comments to the regulator on Sept. 22. The carrier said extending waivers was “unacceptably protective of dominant incumbent carriers at the expense of the traveling public and of low-cost carriers ready and willing to serve.”
Spirit has a history of pushing for more access to capacity-controlled airports in the U.S. In December 2019, it sued the FAA to allocate unused peak-period flights at Newark. The case was undecided when COVID-19 hit.
Related:Spirit Airlines sues DOT for Southwest’s flights at Newark
In its September comment, Spirit told the regulator that it has sought access to JFK for 14 years but not able to secure the necessary gates and ground facilities to add flights.
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Alaska Airlines, Delta, JetBlue Airways, Southwest Airlines and United, plus A4A, all supported an extension of slot waivers in comments filed in September.
Related:Airlines are flying some unexpected routes during the pandemic. Will they stick around?
Featured image By Bill Clark/CQ-Roll Call, Inc via Getty Images.
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