American Airlines Revises Network to Accommodate US Airways Merger

American Airlines Group has announced the planned network adjustments it will make to meet the required divestiture of slots and related assets at Washington Reagan National Airport (DCA) and New York LaGuardia Airport (LGA) that will enable American Airlines and US Airways to complete their merger. These were mandated by the previously announced settlements with the US Department of Justice (DOJ), the States of Arizona, Florida, Michigan, Tennessee, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia.

At Washington Reagan National, as a result of the 52 slot pair divestitures, American will no longer operate year-round, daily non-stop service to 17 destinations, comprising Augusta, Ga; Detroit, Mich; Fayetteville, N.C.; Fort Walton Beach, Fla; Islip, N.Y.; Jacksonville, N.C.; Little Rock, Ark.; Minneapolis, Minn.; Myrtle Beach, S.C.; Omaha, Neb.; Pensacola, Fla.; San Diego, Calif.; Savannah, Ga.; Tallahassee, Fla. and Wilmington, N.C. in the US and the international markets of Montreal, Canada and Nassau, Bahamas.

American is still finalising its departure from these routes and confirms that effective dates for the changes at Washington Reagan will be announced after the sale of slots and related assets is finalised in the coming weeks. The airline is currently working through the DOJ-approved divestiture process which includes transition agreements with acquiring airlines to minimise the disruption to customers. It is understood that a number of other carriers have already shown intent to serve some of these markets.

Elsewhere on the US West Coast, American will soon add a second daily non-stop frequency between Washington Reagan and Los Angeles by “shifting US Airways' current San Diego flight to Los Angeles,” the US major confirms. In addition, American will adjust its service to Fort Myers, Fla., moving from year-round service to a seasonal schedule.

At New York LaGuardia, as a result of the DOJ-required 17 slot pair divestitures, American will no longer operate non-stop service to Atlanta, Cleveland and Minneapolis. However, changes to the schedule made possible by the combined network of American and US Airways will provide opportunities for new service to ten communities. These comprise Charlottesville, Va.; Little Rock, Ark.; Roanoke, Va.; Dayton, Ohio; Louisville, Ky.; Wilmington, N.C.; Greensboro, N.C.; Norfolk, Va.; Knoxville, Tenn.; Richmond, Va. These flights will commence from April 1, 2014 and reservations are due to open on January 26, 2014.

“We are excited about moving forward as the new American Airlines, which will fly more customers to more places than ever before,” said Andrew Nocella, senior vice president and chief marketing officer, American Airlines. “Washington Reagan and LaGuardia will continue to be a key part of the new American's network.”

American said it is making a full effort to minimise any impact that DOJ-required slot divestitures would have on small- and medium-size communities. “We know how important this service is to the people and the communities affected, and we hope that our competitors who acquire our slots and gates will maintain service to the impacted cities,” added Nocella.

In the tables below we look in greater detail at seat capacity at Washington Reagan and New York La Guradia last year. Although the two airlines networks are very complimentary with little overlap, the analysis clearly shows why the divestiture of slots and related assets was a prerequisite of the DOJ for approving the merger between American and US Airways.

At Washington Reagan, US Airways was the dominant carrier with 45.8 per cent of capacity in 2013: if you added American’s 13.9 per cent share this rose to 59.7 per cent, with closest rival, Delta Air Lines, holding just a 14.8 per cent share. At New York LaGuardia, American and US Airways are the number two and three carriers with a combined 29.3 per cent capacity share. The 17 slot pair divestitures will enable Delta to strengthen its leadership, although the introduction of ten new routes will help strengthen the AA/US connection opportunities.

Scheduled Air Capacity from Washington Reagan National Airport (non-stop departures; 2013)