What Delta Stands to Gain From Its Slot Swap with US Airways

(MoneyWatch)  Yesterday I talked about what US Airways stood to gain from its slot swap with Delta, and I liked what I saw. When flipping it around, however, I'm not so sure that Delta will see the same benefits.

You'll remember that Delta will get 125 slot pairs at New York/LaGuardia (LGA) in exchange for 42 slots at Washington/National (DCA) along with Tokyo and Sao Paulo routes. After the merger with Northwest, I think it's probably pretty easy for Delta to offer up a single Tokyo flight. And they still can fly to Sao Paulo as well, so it's not a huge loss.

On the surface, it looks like giving up 42 slots for 125 in return at LGA is an easy sell, but can they really make them profitable? US Airways couldn't, and they were flying around 37 to 50 seat props. Delta, meanwhile, promises it will serve all those routes with jets. I'm guessing that means 50 seat regional jets, and those cost a lot more to operate. They do say that they will involve some mainline jets as well, but most of these small cities won't be able to support that. So how is Delta going to make this profitable while US Airways couldn't?

First of all, Delta has a huge presence in New York. They've really built (some would say overbuilt) JFK up to be a big international hub with a sizable domestic presence as well. But now, they're calling the new LGA operation a domestic hub. Having the local base can mean they'll get higher dollar corporate business that US Airways may not have been able to get.

Will they reduce JFK flying down to being solely an international hub? We really don't know. While US Airways has done a great job of communicating their detailed plans, Delta has been mostly silent. I had a laundry list of questions for the airline, but they were all answered with regurgitation from the press release. We don't even know if they have a detailed plan, I suppose, so we'll have to rely on the hints we can get from the little info they've given us publicly.

Unfortunately, they haven't given us much on JFK. They've said,

In addition to the improvements at LaGuardia, Delta will continue to invest at its hub at New York's leading international airport, John F. Kennedy International (JFK), and will continue to explore long-term options to upgrade terminal facilities.

My guess is that JFK will continue to be what it is. If there are some smaller flights that don't feed international connections, then maybe those would head over to LGA, but that wouldn't be much. This just means more Delta metal flying around in their never-ending quest to take on Continental at Newark.

Only one problem. Newark is one airport while JFK and LGA are two. Of course if you're going to have a split hub, a place like New York which is full of local traffic is the place to do it. But that doesn't make it ideal.

So I'm sure Delta is happy with what they've done here since it gives them an even larger presence in New York, but we just don't know enough about their plans to judge whether it's actually going to be good for them or not.