Slot Swaps: Delta and US Airways

Delta and US Airways will get to consummate their revised slot swap deal between each other which grants Delta dominance at La Guardia Airport / NYC and US Airways dominance at Reagan National Airport / Washington, D.C.

The airlines will have to sell off a small set of slots to airlines that have little or not competition at either airport in order to satisfy the DoT. 

Is this good for the consumer?  Depends on who the consumer is.  Arguably, more sensible connections from regional airports into those airports will be good.  However, I do not know why we, as a country, participate in allowing airlines to form fortress hubs in this day and age.  Fortress hubs are neither efficient nor good for the consumer in the long run. 

Selling off a paltry number of slots to small airlines with no presence at those airports does not foster competition.  It fosters a tenuous toe hold that could take years and millions of dollars of investment to ever grow into something else. 

This is why if an airport is slot controlled, I firmly believe those airports should be required to “auction off” those slots on a regular basis.  Allowing airlines to “own” slots and preserve them as an asset has just fostered anticompetitive behaviour such as airlines “sitting” on the slots by operating unprofitable (but not very expensive) regional jet flights into the airports until they want to use the slot for something bigger.   Imagine what would happen if lower cost airlines could buy into those airports through auctions and offer lower prices.

Competition doesn’t come in the form of an airline getting to operate 2 or 3 daily flights into an airport dominated by an airline that has hundreds operating into that same airport.


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