Here's the reply I got:
We sold the slots through a bidding process, as part of our negotiated settlement with the DOJ.
So I guess there's a tenth of a Billion or so to add to first quarter earnings.
I have emailed investor relations to try to get a clarification on this: whether they were paid for the slots they had to give up, or not. Since there was bidding going on, I'm assuming that someone got paid. Going by past payments for slot pairs, I would think that the slots given up were worth around $100 million. Anyone else have thoughts on the value of the slots that were divested?
It would be great if they could sell and report that for this Q1 period, since it would allow to offset a lot of the costs associated from the mass flight cancellations. I don't know if the selling of the slots is a drop in the bucket when compared to the cancellations though.
It's like when wireless companies merge they carriers are told to sell overlapped spectrum to others, of course there's always money involved. I'll bet a couple of million per slot is about right, but given the situation they must sell the slots to allow the merger to go through, maybe just $1m a piece is possible.
I think this is a valid question, and I'll admit I don't completely understand it myself. I have read articles that said that American had to "give up" the slots in order to exit bankruptcy. However, I have read other more recent articles saying that various airlines were "bidding" on the slots. If they were bidding, then it would seem that they were offering money for the slots. If that is the case, then I think it is reasonable to ask where that money went - does it go to American Airlines, or does it go to the airport hub?