Southwest wants Delta/WestJet slots at LGA

[W5]

https://www.bizjournals.com/dallas/news ... stjet.html

Southwest Airlines is angling for more service out of New York's LaGuardia Airport, the Dallas-based carrier disclosed in a regulatory filing submitted Wednesday with the U.S. Department of Transportation.

The additional service would come at the expense of Canadian carrier WestJet Airlines and Delta Air Lines, Inc. (NYSE: DAL). WestJet and Delta put forth an application to form an alliance, which would give the pair the ability to collaborate on pricing and revenue management on flights that cross the U.S.-Canada border.

In responding to the pair's application, Southwest Airlines Co. (NYSE: LUV) called the government's attention to LaGuardia, arguing competition would be harmed if WestJet kept its 16 slots at the airport and the proposed alliance were to go through.

"The Department should require the 16 LGA slots that WestJet now holds to be re-divested to one or more independent U.S. (low cost carriers)," Southwest wrote in the filing.

"If Southwest were able to obtain the slots, it would reduce fares, increase passenger traffic, and generate substantial new competition at LGA," it added.

Obtaining a larger presence in the New York area would be noteworthy forSouthwest, considering its decision to abandon flying at nearby Newark Liberty International Airport earlier this year.

When Southwest announced it was ending service at Newark, Chief Executive Gary Kelly said financial results at the airport were below company expectations. He said the airline would relocate affected employees to nearby airports like LaGuardia "where we are experiencing strong customer demand."

As reason for why WestJet should divest its 16 slots if the alliance were approved, Southwest pointed to Delta's market share at LaGuardia.

Delta holds 45.6 percent of total slots at the airport, while American holds 28.7 percent and United holds 8.2 percent, according to Southwest, which says it holds 5 percent of the slots.

In 2011 when Delta obtained a large number of LaGuardia slots from US Airways, one of the conditions the DOT put on the increase was that Delta divest two 16-slot bundles to low cost carriers. One of those 16-slot bundles went to WestJet.

Southwest said if the alliance is approved without WestJet being forced to divest those 16 slots, the effect of the 2011 decision would be moot because WestJet flies a route to Toronto out of LaGuardia.

"Delta should not be permitted to recapture the very slots it was required to divest in 2011 by using an immunized Joint Venture as the facilitating device," Southwest said in the filing. "Doing so would clearly not be in the public interest."