Southwest, Virgin America to buy LaGuardia slots -sources

Reuters

By Karen Jacobs and Diane Bartz

ATLANTA/WASHINGTON, Dec 4 (Reuters) - Southwest Airlines and Virgin American will buy the take-off and landingslots at New York's LaGuardia Airport that US Airways Group Incand American Airlines must sell as part of their agreement tomerge, three sources said on Wednesday.

Last month, US Airways and American agreed to divest 17 pairs of slots at LaGuardia, a busy airportwith limited capacity, as well as certain other assets, as partof a settlement of an antitrust lawsuit by the U.S. JusticeDepartment.

The sources, who asked not to be named to preserve businessrelationships, did not say how many of the 17 pairs of slotseach airline would purchase. Terms of the sales are not known.

Southwest, US Airways and American declined to comment onthe question of LaGuardia slot pairs. Virgin America did notreturn calls or email requesting comment.

In the deal made in November the two airlines also agreed togive up 52 pairs of takeoff and landing slots at Reagan NationalAirport, just outside Washington, D.C.

JetBlue has been expected to be interested in theslots at Reagan National that it is currently leasing fromAmerican.

US Airways and American announced in February that theyplanned to merge. The Justice Department sued to stop the deal,saying it would lead to higher fares. The sides settled on Nov.12 after the airlines agreed to a long list of divestitures.

In addition to slot sales, the airlines also agreed to giveup gates at five key airports: Boston Logan InternationalAirport, Chicago O'Hare International Airport, Dallas LoveField, Los Angeles International Airport and Miami InternationalAirport.

The Justice Department argued that the slot and gate saleswould give low cost competitors better access to some of thecountry's busiest airports. Analysts, however, said that arelatively small number of flights would be affected and anychange would be incremental.

The Justice Department selects which airlines are eligibleto buy the assets that the airlines must sell. It has said thatthe gates at the five airports will be transferred on"commercially reasonable terms: to the acquirers.

Large carriers Delta Air Lines and United were believed tohave been excluded from the sale.

In a side agreement with the Department of Transportation,the airlines agreed to dedicate their commuter slots at ReaganNational to medium, small and non-hub cities.

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