American Airlines ends direct service to 17 cities

 from Reagan National under merger deal

By Published: January 15

American Airlines said Wednesday that it would end direct flights from Reagan National Airport to 17 small and midsize cities as part of the deal that paved the way for its merger with US Airways.
Analysts said it’s unlikely that the low-cost carriers that bid on the vacated slots will want to fly to less lucrative destinations such as Fayetteville, N.C., Savannah, Ga., and Islip, N.Y. In some cases, those airlines fly a single type of airplane that is too large to serve those markets.
“It’s hard to imagine a low-cost carrier picking up this service,” said William S. Swelbar, a researcher at the MIT International Center for Air Transportation. “They tend to service only the largest markets out there.”
The next step in the process will take place at the U.S. Department of Justice, which will consider bids submitted by other airlines. In the settlement the department reached with American, it specified that the slots should be made available to low-cost carriers such as Southwest, JetBlue and Virgin America, but the other two megacarriers — Delta and United — apparently are not prohibited from submitting bids.
As the newly created world’s largest passenger airline, American was required to give up the National Airport slots to win federal approval to merge with US Airways.
The new American would have controlled 69 percent of all flights in and out of National, one of four U.S. airports where the volume of takeoffs and landings has been restricted by Federal Aviation Administration guidelines.
The deal meant American would remain the airport’s major carrier, with 57 percent of all flights.
In addition to opening the door at National for low-cost carriers, the settlement required the new American to give up ground at Boston Logan International, Chicago O’Hare International, Dallas Love Field, Los Angeles International, Miami International and New York’s LaGuardia Airport.
Many analysts saw a merger between American and US Airways as inevitable in the aftermath of megamergers that combined Delta with Northwest and United with Continental.
In the eyes of low-cost carriers, the merger was akin to the last land grab. If they did not get access to prime-time slots at key airports through the Justice Department’s intervention, they might be locked out or have only a limited presence at those airports for a long time.
Access to key airports might prove critical to the survival of those competing with the three big airlines known as legacy carriers. Seventy percent of commercial passengers board planes at just 29 of the nation’s airports — about 6 percent.
Major cities are “where the so-called low-cost carriers want to serve. They don’t have the airplanes to serve the nation’s small communities,” Swelbar said.
He said continuation of service to some markets probably will depend upon who gets the auctioned slots.
“If Delta were to get those slots, my bet is they would serve Detroit and Minneapolis,” he said. “Myrtle Beach would be interesting to Spirit. Delta might consider Augusta, Georgia, [or] Islip — I guess you could make a case that Southwest might, but I don’t think that Southwest would use a very valuable slot on Islip.”
Some of the cities that will lose direct American service are military hubs — every one of them with a member of Congress who values the service for commuting to and from Washington.
The other cities that no longer will have direct American Airlines service from National are: Augusta; Detroit; Fort Walton Beach, Fla.; Jacksonville, N.C.; Little Rock; Minneapolis; Montreal; Myrtle Beach, S.C.; Nassau, Bahamas; Omaha; Pensacola, Fla.; San Diego; Tallahassee; and Wilmington, N.C.
Justice filed suit in August to block the merger, alleging that US Airways’ $11 billion acquisition of American would undermine competition for commercial air travel in local markets throughout the United States and would result in higher airfares and diminished service for passengers.

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