Delta Air Lines won government approval for a slot-swap deal that would strengthen its presence at New York's LaGuardia Airport, but it says conditions placed on the deal by regulators are too onerous and it may ditch the plan.
The U.S. Department of Transportation on Tuesday issued tentative approval of the deal between Delta and US Airways, under which Delta would get 125 slots, a term for government-awarded landing and takeoff rights at congested airports, from US Airways. In return it would give US Airways 42 slots at Washington's Reagan National Airport.
Delta has wanted to use the slot swap to establish what it calls a "domestic hub" at LaGuardia.
But the DOT said that to reduce harm to consumers from the airlines' market dominance at each airport, they should be required to sell 14 slot pairs at Washington's Reagan National and 20 slot pairs at LaGuardia to carriers new to those airports or with limited service there, such as AirTran Airways, JetBlue, Southwest and Spirit.
The DOT decision comes after the Justice Department indicated it planned to challenge the deal.
Delta and US Airways said Tuesday that "if this order is implemented as proposed the transaction will not go forward and significant consumer benefits will never be realized." They said they are "disappointed in the DOT’s decision that, if implemented, would negatively impact the consumer and economic benefits created by the proposed transaction."
Both airlines plan to review the decision to determine their next steps. The DOT is taking public comments for 30 days before a final decision.
The US Airways pilots union, Spirit and some members of Congress had raised concerns about the deal. Cities, airports, other members of Congress and Delta employees wrote to the DOT in support of the deal.
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