American Airlines says sales of assets brought in US$381 million
By David Koenig, AP
March 12, 2014, 12:06 am TWN
DALLAS--The CEO of American Airlines says his company is getting US$381 million from selling takeoff and landing rights at New York's LaGuardia Airport and Reagan National Airport outside Washington.
Doug Parker said his airline was paid more than it expected to get for the rights — called slots — at the busy airports.
The U.S. Justice Department put a higher figure — more than US$425 million — on American's gain. Parker said that the government might have added the value of slots that American picked up at New York's Kennedy Airport, "That's their valuation, not ours." The Justice Department did not immediately comment.
In comments filed Monday in federal district court in Washington, the Justice Department said the value of the slots proved that it drove a hard bargain last year when it settled its antitrust lawsuit against the merger of American and U.S. Airways. The airlines agreed to give up some of their slots at LaGuardia and Reagan and two gates each at airports in Los Angeles, Chicago, Boston, Miami and Dallas.
The Justice Department said that American's sale of the LaGuardia slots to Southwest Airlines Co. and Virgin America is complete, while the transfer of Reagan slots to Southwest, JetBlue Airways Corp. and Virgin America is expected to wrap up soon. Each airline had announced that it won bidding for the slots, but the sale prices were not disclosed. American traded some of the Reagan slots to JetBlue for slots at Kennedy Airport, a deal that Parker said was underway before the lawsuit.
Slots at Reagan, LaGuardia, Kennedy and the Newark, New Jersey, airport are limited by the government, making them valuable when they hit the market. A pair of slots is needed for each round-trip flight.
Parker told an investor conference in New York that the slots had been recently appraised at US$225 million, so getting US$381 million was "great news."
Consumer groups, lawmakers, the Detroit airport and Delta Air Lines Inc. lodged complaints about the settlement.
Some consumer groups complained that the settlement didn't go far enough to protect travelers.
The Justice Department said that after reviewing public comments, it still believes that the settlement will offset any lost competition from allowing the nation's third-biggest and fifth-biggest airlines to combine. The merger made American Airlines Group Inc. the world's biggest airline operator.
Federal law requires a 60-day public-comment period after the government settles an antitrust lawsuit. Even critics of the merger had low expectations that their complaints would change the outcome, however.