Small Airlines Push for More Access at New York Airports
04 November 2015 - 11:30AM
Dow Jones News
Virgin America Inc. and four other small carriers are pressing
federal regulators to change "slot management" practices at New
York's three big airports to boost competition in the largest U.S.
air market, said Virgin America Chief Executive David Cush.
His San Francisco-based discount carrier and the other four
filed a letter on Tuesday urging the chiefs of the Federal Aviation
Administration and the U.S. Transportation Department to move ahead
with proposals to make it easier for small carriers to obtain
slots—takeoff and landing appointments—at the three congested
airports.
The push highlights the growth ambitions and challenges for the
eight-year-old carrier at a time when years of consolidation has
left the U.S. market dominated by a quartet of giants: American
Airlines Group Inc., United Continental Holdings Inc., Delta Air
Lines Inc., and Southwest Airlines Co.
The FAA in January began soliciting feedback on plans to amend
current rules governing slots at John F. Kennedy International
Airport, La Guardia Airport and Newark Liberty International
Airport. Those rules are slated to expire next October.
Mr. Cush said only new service and competition at the New York
airports will create lower fare options. Most of the slots there
are controlled by American, United and Delta, which received many
of them years ago at no cost.
Tuesday's letter was also signed by executives of Frontier
Airlines Inc., Allegiant Travel Co.'s Allegiant Air, Spirit
Airlines Inc., and Alaska Air Group Inc.'s Alaska Airlines.
Representatives of Frontier, Allegiant, and Spirit confirmed their
participation. Alaska Airlines couldn't immediately be reached.
Virgin America's "biggest concern is expanding," Mr. Cush said.
"We have no mechanism to expand in the New York airports because
the slots are controlled by the Big Three" and JetBlue Airways
Corp., a budget airline based at Kennedy Airport. "There is no
mechanism for us to get slots."
American said it makes "good and appropriate use of our slots,
which benefits the airline, consumers and the communities we
serve." Delta said its annual slot utilization rate at La Guardia
is 94% and at JFK it is 90%, and that it would like to obtain more
slots to increase service for its customers. United wasn't
immediately available for comment.
Budget carriers such as Virgin America have gained some access.
Regulators required Delta and US Airways to sell some slots at each
airport as part of a 2011 swap that gave Delta more rights at La
Guardia in return for letting US Airways increase flights at Reagan
National Airport near Washington, D.C.
And when the government let American and US Airways merge in
late 2013, the new American had to divest slots at La Guardia and
Reagan National. Virgin American got to buy or lease limited number
of slots at both airports, although the going rate for a pair of
slots was about $5 million.
Mr. Cush said he favors proposed rules that would require
airlines to use their slots 80% of the time, or those rights would
revert to the government. He said he prefers the FAA's idea of
establishing a transparent secondary market where smaller carriers
could acquire slots. And he would like the government to allocate
additional to new entrants to promote competition.
It is unclear when the FAA and the DOT will make their
decisions. A spokeswoman said the FAA is continuing to review
comments and doesn't have a timeline for a final rule.
Mr. Cush, a longtime executive at American before moving to
Virgin America in 2007, said small airlines also struggle with an
inability to get gate space at busy airports. He said his airline
has just one gate at Chicago's O'Hare International Airport and
can't get any more, making expansion impossible.
Write to Susan Carey at susan.carey@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 03, 2015 19:15 ET (00:15 GMT)
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