NEW YORK — The Department of Justice announced last week that it would let the merger of American Airlines and US Airways proceed after the two carriers agreed to give up landing and takeoff slots and gates at key airports, notably Washington’s Reagan National and New York’s LaGuardia.
With the agreement, the government hopes to increase access to the nation’s busiest airports for low-cost airlines and to maintain flights to smaller cities.
Here’s a look at what the proposed merger would mean for the new American’s competitors that serve Charleston International Airport, where the combining carriers also have operations.
They’re listed in order by size:
United Airlines, Delta Air Lines: Currently the two largest airlines in the world, United and Delta will face increased competition from the combined American and US Airways, which will be slightly larger. The newly combined airline will serve more cities, with easier connections than American or US Airways individually offer.
Delta has been aggressively picking up lucrative corporate contracts, expanding in New York, Los Angeles and Seattle. American’s improved route network will make it harder for Delta to steal away additional business.
Delta, which is Charleston’s top carrier based on passenger volume, said last week it would like to acquire additional slots at Washington D.C.’s Reagan National Airport. But the government isn’t likely to allow that. When asked about Delta’s interest in those slots, Bill Baer, who heads the DOJ’s antitrust division, said: “We see legacy carriers as part of the problem.”
United has had a bumpy time implementing its merger with Continental. It has a stronger network to places like Asia. But thanks to American’s bankruptcy court restructuring, United now has a higher cost structure.
Southwest Airlines: Southwest has aggressively added flights to cities abandoned by larger airlines. If the new American cuts flights out of a city like Phoenix, Southwest could try to get a stronger position there. Phoenix is already the fifth largest city in its network, by originating passengers.
Southwest will be allowed to permanently keep 10 landing and takeoff slots that it currently leases from American in New York. It can also join in a bidding process for more slots there and in Washington, D.C.
American will also have to give up its gates at Dallas Love Field, further strengthening Southwest’s overwhelming presence there. The airport close to downtown Dallas will become much more desirable next year when restrictions on which destinations carriers there can serve nonstop are removed.
JetBlue Airways: New York-based JetBlue has a close relationship with American, and both airlines have big operations at JFK Airport. But JetBlue is now trying to compete with the others for high-paying first class travelers between New York and California.
JetBlue will be allowed to permanently keep 16 landing and takeoff slots that it currently leases from American in Washington D.C. It can also join in a bidding process for more slots there and in New York.