Delta, US Airways won approval for slot swap

Delta Air Lines (DAL.N) and US Airways Group (LCC.N) won tentative U.S. government approval on Thursday to proceed with a large swap of takeoff and landing rights in New York and Washington, D.C., letting each build on their already strong positions at key airports popular with business travellers.

The deal has been in the works since 2009. But the airlines and the Transportation Department have been wrangling over what the companies would have to divest to give new entrants access to New York’s LaGuardia and Washington Reagan National airports.

Under the plan, Delta would get 132 slot pairs — the right to operate one takeoff and one landing — at LaGuardia from US Airways; and US Airways would get 42 slot pairs at Reagan National from Delta as well as rights to operate additional daily service to Sao Paulo, Brazil, in 2015.

To ensure what Transportation planners said was fair competition, the government would require US Airways and Delta to divest eight pairs of daily slots at Reagan National and 16 pairs at LaGuardia, and that they complete the transaction in phases, the DOT said in a statement on Thursday. The primary beneficiaries of divestiture would be low-cost carriers.

A previous order granting conditional approval was rejected by the carriers over a requirement they divest more slots at both airports. They submitted a revised proposal in May.

The Transportation Department will accept public comments for 30 days before issuing a final decision.

For Delta, the swap would allow it to continue to expand in New York, a key business market. US Airways has said the swap would give it access to profit-enhancing assets in Washington, while allowing it to let go of LaGuardia assets that are not profitable.