Race for slots begins

Safeguards also ensure smaller communities won’t lose service,

The settlement that’s paved the way for American Airlines and US Airways to join forces and create what will be the largest carrier in the world aims to put in place several safeguards to stave off the loss of service and spike in fares that some have feared could follow the last major tieup among U. S. airlines.

American, which has been under bankruptcy protection since November 2011, and US Airways agreed to pull out of 52 pairs of airport take- off and arrival slots at Reagan Washington National, 17 more at New York’s LaGuardia, and two gates each at Boston’s Logan, Chicago’s O’Hare, Dallas’ Love Field, Los Angeles International and Miami International.

That means slots will be freed for low- cost carriers to potentially move in, helping to keep prices in check. The settlement puts in black and white US Airways’ and American’s oft- made promise to maintain all their hubs, a vital pledge since hub status can be critical to a city’s economic fortunes. In an agreement with the Department of Transportation, the airlines said they would maintain flights from Reagan National to smaller communities that often lose service as carriers focus on their more profitable routes.

“Today’s settlement is a commonsense solution, which addresses regulatory concerns while allowing us to create the world’s leading airline with the world’s leading network,” said Tom Horton, CEO of American parent AMR, during a conference call with reporters on Tuesday.

The airlines will continue to serve smaller communities, though they may no longer fly to some from Reagan National because of the reduction in slots. The hope, however, is that carriers that move into those take- off and arrival spots will continue flying to affected communities.

The race for the slots is already beginning. Dave Barger, CEO of JetBlue, said in a statement that he supported the settlement with the Justice Department and that “Jet- Blue is eager to increase our low- fare service in communities across the country and particularly at Ronald Reagan Washington National Airport and New York’s LaGuardia Airport.”

Delta said it “welcomes the settlement agreement and looks forward to the opportunity to acquire slots that will be divested under the agreement, particularly at Washington-Reagan National Airport.”

But Stephen Johnson, executive vice president, corporate and government affairs for US Airways, said the DOJ will likely give airline officials a list of potential buyers that will consist solely of low- cost carriers. The settlement also says that US Airways and American will hold onto many hubs, including Philadelphia, Phoenix and Charlotte, for three years.

Despite the settlement’s concessions, some industry watchers remained concerned that competition would suffer after another industry megamerger. William McGee, travel and aviation consultant for Consumers Union, the public policy division of Consumer Reports, says that while it’s positive that US Airways and American will be required to give up slots that will likely go to low- cost carriers, “it’s a basic truism that more competition leads to better service and lower fares, and absence of competition inevitably leads to a decrease in service and higher fares.”

But two airlines combining does not necessarily mean that fares will rise. Competition varies by route, and there are other variables, fuel chief among them, that might have more bearing on ticket prices, industry watchers say. “Anyone who stands on a soap box and yells fares will definitely rise or definitely fall as a result of this merger will be definitely wrong,” says Henry Harteveldt, a travel analyst with Hudson Crossing.

SUSAN WALSH, AP