Listened to US Airway’s third quarter earning conference call, which offered some interesting insights into the Delta/US Airways slot swap situation. The most recent development noted here was that US Airways and Delta had gotten Department of Transportation approval for the deal. The Department of Justice had no problems with the LaGuardia (LGA) portion of the deal but was “continuing to study” the Washington Reagan National (DCA) portion.
The transaction will close when all regulatory approvals are obtained (but keep reading). US Airways executives note that they are waiting on two more agencies to sign off on the deal, DOJ and The Port Authority of New York & New Jersey. Port Authority approval, they note, is expected soon after the winners of the slot divestiture auction for 16 set of LGA and 8 set of DCA slots required by the DOT as a condition of approval is completed in about a month. (The slots are Delta’s, which will get the cash generated, and are being sold in groups of 8, so two LGA lots and one lot at DCA. Expected bidders include Southwest Airlines and JetBlue.)
So that would leave the DOJ. Interestingly enough, under antitrust law, US Airways and Delta can proceed without actually getting DOJ approval. If DOJ thinks the deal is anti-competitive, they can sue to block it though. When asked what they would do DOJ were still “studying” the issue a month from now, US Airways executives refused to comment. Which very much raises the question as to what happens if the DOJ simply continues to do neither say “DCA is not an issue” nor “swap DCA slots and we’ll see you in court.”
Bonus observation: DOJ’s continuing to “study” is especially odd since they were in on the negotiations that produced the current version of the slot swap. Makes you wonder what’s going on there. Is politics an issue?
