The Northeast Alliance is being challenged by the Department of Justice. American executives made a surprising revelation about why the airline lost some slots at JFK.
One of the most slot restricted airports in the US is New York John F. Kennedy Airport. In order for airlines to fly to the airport, they need to acquire takeoff and landing slots.
The argument that has been made in favor of the alliance is that American can't compete in New York without the tie-up. There was a time when American lost slots at JFK because it forgot they existed.
The FAA found that American was under utilizing its slots at JFK. Seven slots were taken from American. If you don't use your slots, they will be taken away
They were taken away by American because it forgot it had them. The Chief Commercial Officer of American Airlines described this.
“Accounting and combining slots after the merger was a manual process. There’s no good reason, and I’m a little beside myself that it happened. It was for the worst of reasons, it makes us sound completely ridiculous.”
The FAA and American didn't agree on how many JFK slots American had. The FAA thought American had 200 slots after it lost seven slots. The two organizations agreed to allow American to hold onto more than 200 slots.
There are a few thoughts on the loss of JFK slots.
The irony of this happening in court on the same day as United Airlines pulling out of JFK is amazing. American can't keep track of how many slots it has at the airport while United tries to expand at the airport.
It is a manual process for airlines to keep track of slots. This is how it works at most airports. You would think that the FAA and airlines would be able to access an online portal that shows exact number of slots, instead of American having to manually add up slots after the merger. It seems like this is a scavenger hunt for airplane paper tickets.
When the airline can't even keep track of its slots, how can American have an expired policy for American AAdvantage miles? Americans can't keep track of a slot worth a lot more money than the one they're supposed to keep track of.
Airport slots are not usually changed hands because an airline forgot to use them and didn't use them. The "manual process" of accounting for slots at American Airlines and US Airways was too complex after the merger.
What do you think about this?
The tip was given to David Slotnick.
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