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Delta, Finally, Plays Catch-Up at JFK

ATLANTA ( TheStreet) -- Finally, Delta (DAL - Get Report) is moving ahead with its long-planned facilities upgrade at New York's Kennedy Airport.

The upgrade is a maneuver in the continuing battle for supremacy in the world's biggest aviation market. That battle has raged for years, but the planned merger between United (UAUA) and Continental (CAL) means that all three of the country's biggest airlines -- as well as the world's three global aviation alliances -- will be represented.

At JFK, three carriers -- American (AMR), JetBlue (JBLU - Get Report) and Delta -- operate hubs. American opened a spectacular new $1.3 billion terminal in 2007 and JetBlue followed with a $750 million terminal in 2008.

It is fair to say that those terminals provide a competitive advantage for their occupants, one that Delta has long recognized. But the carrier has been slow to reach an accord with the Port Authority of New York and New Jersey on how to solve its problem.

Today, however, the Port Authority board unanimously approved a $1.2 billion upgrade of the Delta's JFK facilities, once occupied by Pan American World Airways. Delta would move its international flights to a modernized Terminal 4 and would operate domestic flights from Pan Am's Terminal Two. The Terminal Four upgrade would be completed by 2013.

Delta isn't ready to talk quite yet and declined to provide details to TheStreet early Thursday. "Delta has been working closely with the Port to develop a plan for our JFK Terminal, one that reflects the significant investments we've been making in the New York market over the past several years," spokeswoman Heather Faulkner said in a prepared statement.

While three carriers have hubs at JFK, United will be alone at Newark. At LaGuardia, Delta has sought to establish a hub, although it has been hurt by regulators' rejection of its plan to acquire more slots in a trade with US Airways (LCC), which would trade for slots at Washington Reagan National Airport.

However, Delta is taking a page out of the JetBlue playbook at its LaGuardia terminal, making an effort to upgrade the food service there as JetBlue did in its JFK terminal. Delta says it has enlisted chefs and restaurateurs to develop a French bistro, an Italian restaurant, a gourmet coffee shop, a steak house, a pizza place, a wine bar and a seafood bar. Quicker service options will include pizza, burgers, Asian cuisine, gourmet packaged food and a New York-style deli.

-- Written by Ted Reed in Charlotte, N.C.

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