Live

Watch CBSN Live

US Airways Positions Itself as a Takeover Target with New York Moves

After the slot swap between US Airways (LCC) and Delta (DAL) in New York and Washington fell through, many have wondered how the airlines would respond. So far, we've seen the deal unwind and the airlines have started ramping back up in the cities they hoped to abandon. But US Airways has done something else here. It has made itself a strong takeover target thanks to its position in the Big Apple. US Airways is showing that it's not the "ugly girl" that Continental likes to claim it is, but rather a very desirable woman.

The original swap was meant to trade US Airways' position at New York/LaGuardia for Delta's position at Washington/National. US Airways being stronger in Washington and Delta in New York meant this move made a lot of sense for just about everyone. But the feds got in the way, and we know that they don't usually focus on things that make sense. This time, they stayed true to their reputation, and the swap was killed.

I wrote about the post-swap ramp-up over on Cranky. I still don't really get what Delta is doing in Washington, but US Airways may be doing something very smart. It's trying to insert itself as an important piece of the puzzle in the battle for New York.

US Airways has no desire to actually "win" New York, to use Delta's terminology. But US Airways has long been a major proponent of further consolidation in this industry. CEO Doug Parker has said time and time again that there is only room for three big legacy carriers. Assuming that the United/Continental merger goes through, we'll be down to four, and US Airways is the odd man out.

Doug has also said that while there's no hurry to be acquired and US Airways will be absolutely fine on its own, he knows that one day it will happen. With the slot swap off, Doug and friends might be angling toward making an acquisition happen sooner rather than later.

US Airways is building up its presence at New York's LaGuardia. We know that Delta wants those slots; that was the point of the slot swap. But it stands to reason that others might want them as well. The most obvious, of course, is American, another airline that has recently shifted its focus to put more attention into New York after years of stagnant growth. For either of those airlines, the acquisition of US Airways and its huge stockpile of slots at the closest airport to Manhattan is a big prize indeed.

Even Continental/United might have an interest in order to bracket New York with its major presence at Newark, but I tend to think that's more of a longshot. American and Delta are probably the ones trying to figure out how to get an edge, and US Airways is sitting right in the middle. It's a good place to be. While Continental's Jeff Smisek might think US Airways is the "ugly girl," American and Delta definitely won't be thinking about that.

So now that the slot swap is dead, it seems that the US Airways stance may be that you can't get the milk for free. You have to buy the cow. Sure, there are all kinds of antitrust implications (much worse for Delta than for American), but that won't stop them from sniffing around.

US Airways now finds itself in a pretty nice place. Maybe the airline should be the star of The Bachelor next season, because it may very well have plenty of suitors.

Related:

Photo via Flickr user Air Combat Command