US Airways today announced a transaction with Delta Air Lines that will allow US Airways to expand service at Ronald Reagan Washington National Airport (DCA), and enter key business centers in Brazil and Japan. US Airways will obtain 42 pairs of Delta’s slots at DCA and acquire the rights to expand to Tokyo, Japan and Sao Paulo, Brazil. Simultaneously, US Airways will transfer 125 pairs of its slots to Delta at New York’s LaGuardia Airport (LGA). One slot equals one takeoff or landing; so one pair of slots equals one roundtrip flight.
US Airways will retain a significant presence at LGA. The reduction in flying necessitated by the transfer of LGA slots will be accomplished through reductions in US Airways Express flying. The airline does not plan to make any changes to mainline flight levels, including its popular US Airways Shuttle service with hourly flights from New York to Boston and Washington. After the transaction is complete, US Airways will be the third largest carrier at LGA (based on peak day departures) and will operate up to 72 peak-day flights.
“We are very excited about today’s announcement which presents an excellent opportunity to strengthen our network while bringing more jet air service to smaller communities from our nation’s capital,” said US Airways Chairman and CEO Doug Parker. “This transaction will improve US Airways’ near and long-term profitability to the benefit of our employees, our customers, the communities we serve, and our shareholders.”
The transaction is structured as two simultaneous asset sales and is expected to be cash neutral to US Airways. US Airways estimates the transaction will improve profitability by more than $75 million annually.
“This is great news for travelers to and from the Washington, D.C. region,” said US Airways Senior Vice President, Marketing and Planning Andrew Nocella. “After the transaction is complete, US Airways will provide nonstop service from DCA to 15 new daily destinations, and to further ensure continuity for air travelers, we also plan to maintain existing service today to all DCA destinations that Delta may discontinue as a result of this transaction.”
The 15 new destinations US Airways will serve from DCA after this transaction include seven markets that currently have service to/from DCA today (Cincinnati, Ohio; Des Moines, Iowa; Grand Rapids, Mich.; Madison, Wis.; Montreal, Canada; Miami, Fla.; and Ottawa, Canada), as well as eight cities that currently have no daily nonstop service to/from DCA at this time (Birmingham, Ala.; Islip, N.Y.; Ithaca, N.Y.; Little Rock, Ark.; Myrtle Beach, S.C.; Pensacola, Fla.; Savannah, Ga.; and Tallahassee, Fla.).
Nocella continued, “We also plan to increase the number of seats we fly at DCA by using larger dual-class jets. This will increase capacity in a dense market, where demand continues to be brisk, without the negative effects of additional congestion.”
US Airways will operate 229 peak-day departures at DCA. Following full implementation of the new schedule, the airline anticipates its passenger enplanements at DCA will increase by 30 to 35 percent as a result of the new flights and use of larger aircraft. However, there will be no increase in net flight activity at DCA due to Delta’s reduction in slots.
US Airways’ expanded presence at DCA will create approximately 100 new US Airways jobs that will be allocated to DCA and throughout the new regions where the airline is starting service.
Access to Sao Paulo and Tokyo
US Airways will also acquire from Delta the rights to operate daily service at two of the world’s most important business destinations – Sao Paulo, Brazil and Tokyo, Japan. These two cities will complement US Airways’ existing portfolio of more than 50 international destinations in more than 30 countries and territories across Europe, the Middle East, Latin America, North America, and the Caribbean.
Nocella elaborated on the carrier’s anticipated access to those markets, “Sao Paulo and Tokyo will bolster our international growth plans for South America and Asia, and this transaction provides a unique opportunity to expand into two prominent international business markets where US Airways would otherwise not be able to operate.”
With today’s transaction, US Airways has acquired the rights to serve Sao Paulo; and anticipates starting service to Sao Paulo in the second half of next year. The airline’s plan to begin daily Charlotte-Rio de Janeiro service this December remains unchanged. US Airways will be working with governmental authorities in both countries to assist it in securing additional authority to permit daily flights between Charlotte and both Rio de Janeiro and Sao Paulo.
The Tokyo service is tentatively scheduled to operate from US Airways’ Phoenix hub using Airbus 330-200 aircraft. It will require various government approvals and will be contingent upon economic conditions at the time. The airline does not anticipate starting Tokyo service until 2012 or later.
US Airways will maintain a significant operation at LGA and plans to operate up to 72 peak-day flights, making it the airport’s third largest carrier (based on peak day departures). Mainline flight levels will not be reduced, and the airline will continue to operate its popular US Airways Shuttle with hourly service to Washington, D.C. and Boston, as well as service to Charlotte and Wilmington, N.C. and Philadelphia, and Pittsburgh, Penn.
US Airways Shuttle at LGA will operate out of the Marine Air Terminal while service to Charlotte, Philadelphia, Pittsburgh, and Wilmington will operate from terminal D. The move to the Marine Air Terminal is expected to occur in early 2010, and US Airways intends to make enhancements to meet the needs of Shuttle customers.
With 125 fewer slot pairs at LGA, US Airways plans to discontinue service to 26 Express destinations served from LGA. In a separate announcement made earlier today, Delta Air Lines communicated its intent with regard to the 125 slot pairs transferred to it by US Airways.
The reduction in Express flying at LGA will result in the need for approximately 300 fewer employees at US Airways’ wholly owned regional carrier, Piedmont Airlines. Piedmont CEO Steve Farrow said, “While this is good news for our parent company, US Airways, it is very disappointing news for the Piedmont team. Our employees have done an excellent job of providing service to US Airways and its customers. We understand the need to optimize assets, though, and we will ensure that all affected Piedmont employees are treated fairly.”