New Entrants are Blocked as DCA Slot Proceeding Gets Underway

When the FAA was reauthorized by Congress last month, a provision was included to allow for five new daily roundtrips at Washington/National (DCA) airport. These aren’t just any old trips either; these are good for flights beyond the 1,250 mile perimeter that governs most operations at DCA. There had been a great deal of confusion around who might or might not qualify, but now we know. And as usual, it’s the incumbents that win the day.

In the announcement of proceedings issued on Monday, the feds explained the rules. There will be a total of five new roundtrips. Four of those will be given to non-limited incumbent carriers — but no airline can get more than one — and the other will go to a limited incumbent.

What is a limited incumbent, you ask? It’s any airline that holds or operates between 2 and 40 slots (20 roundtrips), and any slot exemptions are excluded from the count. That means Frontier, an airline that has only slot exemptions so it can fly beyond the perimeter to Denver, is out. There had been some discussion about Spirit being eligible since it has held slots in the past, but the feds say no. Oh, and these slots must be used only for domestic flying, so Air Canada is out.

With this, you might be wondering who is in. Well, it’s Alaska and… Alaska. But doesn’t Alaska also only have slot exemptions? Nope. Remember, it inherited a few slots from Virgin America when it bought the airline. It does not use them, but it leases them out, so those still count. Alaska has already said it will apply to fly to San Diego, and it will most definitely get it… unless Spirit is able to upend the proceeding.

Spirit has filed its intention to challenge Alaska for that slot pair, saying that it should be considered a limited incumbent even though it sold its slots at the airport more than a decade ago. It also says Alaska shouldn’t even qualify itself since it codeshares with American and that counts. It’s a worthwhile read if you’re curious to see more. I would be surprised if Spirit gets its way, but there might be some fun fireworks along the way.

How did Alaska find itself in such a sweet spot? It obviously has very good friends in Congress who had no qualms gifting the airline more access while denying other potential operators a shot.

On the non-limited incumbent side, it is as expected. American, Delta, JetBlue, Southwest, and United will play an epic game of musical chairs to see which airline is left out. So far, here’s what we know:

American wants San Antonio Delta wants Seattle JetBlue wants a second daily San Juan Southwest wants Las Vegas with direct service on to Sacramento United is unknown

The one thing we can safely assume is that American will get this flight to San Antonio. San Antonio is high up on the list of big cities with no service to DCA, and the airport has partnered with American to make this a reality. Consider it a lock even though American already has the vast majority of slots at the airport.

Delta and Southwest find themselves tied in second place. When it comes to Seattle, Alaska already does it twice a day. Meanwhile in Vegas, American does it once a day. So both already have service, though Southwest would add some value to Sacramento with the direct service. I can see each of these being worthwhile, but with flights already in the market, does it make sense? Here’s what the feds have to say about it:

FAA 2024 directs the Department to consider the extent to which the exemptions will: (i) enhance options for nonstop travel to beyond-perimeter airports that do not have nonstop service from DCA as of the date of enactment of FAA 2024; or (ii) have a positive impact on the overall level of competition in the markets that will be served as a result of those exemptions.

Each of these clearly falls into section (ii), so nobody would fault the feds for awarding slots to both Delta and Southwest. And considering what JetBlue has done, I’d imagine these two will safely get their slots.

What did JetBlue do? I had wondered if it might try something crazy like apply for San Jose (California) service. After all, that’s the new route that Spirit tried to get. Or perhaps it might try Salt Lake. But instead, JetBlue has gone with a very strange move, shooting for a second daily San Juan flight. To be fair, this is absolutely a smart move from a revenue and strategy standpoint for the airline, but it’s just not very compelling for DOT. This neither provides a new nonstop destination nor provides enhanced competition. I don’t see how JetBlue gets this unless United does something even less compelling, and that would be hard to do.

I’m guessing United isn’t going to go for anything too crazy here. It’ll look to connect a hub, and that means adding one daily to the one it already has from SFO or Denver… or possibly trying for one daily from LAX. You know the old saying that if you’re hiking with a friend and encounter a bear, you don’t have to outrun the bear… just your friend. In this case, United just needs to outrun JetBlue’s weak application.

I would think LAX would be easy to suggest it would enhance competition. Denver or SFO would just fall into the same situation as JetBlue, but United might win by default if the the feds may want to give United something since its Dulles hub suffers the most every time more flights are added at DCA.

One other thing to consider is when these flights could actually operate. The feds say this:

After the final order, we will direct selected carriers to work with the FAA Slot AdministrationOffice to assign slot times corresponding with the authority granted in this proceeding and inaccordance with the requirements of FAA 2024. Under 49 U.S.C. § 41718(c)(2), the Secretarymay not increase the number of operations at DCA by more than five in any of 15 one-hourperiods between 7:00 a.m. and 9:59 p.m. EST. Many hours have already reached the statutorycap with existing exemptions and therefore not all requests will be able to be granted

Assuming I’m doing the math right, 8am-8:59am, 11am-11:59am, 1pm-159pm, and 3pm-659pm are all full, so these will need to operate outside those times. For the West Coast, that means a morning departure won’t work. We’re probably looking at departing around noon or later and then overnighting the airplane.

But for San Antonio or Denver, there are more options. Imagine an arrival at 12:59pm with a departure at 2, for example. Of course, Vegas could do a redeye… when Southwest starts flying those. Or I wonder if it’s possible that existing airlines could retime one of their short-haul operations to let the slot exemption sneak in at the best time. I’m sure this is all part of the airline consideration set since they do have to submit preferred timings with their applications.

The airlines have until July 8 to get all their filings in, and comments must be received by July 17. Then, it’s up to the government to decide who will win… except for Alaska. The government already decided that one.

You love Canada. We all do. So come have a listen on Spotify/Apple Podcasts/Amazon/Pocket Casts when we dive into WestJet when it goes live later today.

New Entrants are Blocked as DCA Slot Proceeding Gets Underway

New Entrants are Blocked as DCA Slot Proceeding Gets Underway

New Entrants are Blocked as DCA Slot Proceeding Gets Underway

New Entrants are Blocked as DCA Slot Proceeding Gets Underway

New Entrants are Blocked as DCA Slot Proceeding Gets Underway