Delta, US Airways Say Nothing About Justice Department

CHARLOTTE, N.C. TheStreet) -- In a carefully worded statement, US Airways ( LCC) and Delta ( DAL) indicated they expect to go ahead with plans to trade slots at New York La Guardia and Washington Reagan National airports.

Careful wording means the statement was devoid of any mention of the Department of Justice, which has said it is investigating the antitrust implications of the Department of Transportation's approval of the deal, but contained several references to the consumer benefit including this one: "The DOT's final order represents a clear recognition by the Obama Administration that the slot transaction is in the public interest."

That is perhaps an overstatement, since, in fact, the two departments seem divided and have voiced potentially conflicting opinions. Under the law, the Transportation Department issues its ruling, which the Justice Department can review. If the Justice Department wishes to halt implementation of a ruling, it can't do so by decree but rather must go to court.

In the deal, Delta would get 132 slots at LaGuardia, while US Airways would get 42 daily takeoff and landing slots at National as well as $66 million and the rights to operate to Sao Paulo, Brazil, most likely from Charlotte, N.C., in 2015. The carriers must turn over 16 slots at LaGuardia and eight at National to smaller rivals. The Justice Department has said it is concerned about antitrust issues at National, but not at LaGuardia.

In the airlines' joint statement, Delta CEO Richard Anderson thanked the Transportation Department and the Federal Aviation Administration for their approval, which he said "has significant consumer benefits." Delta "look(s) forward to implementing our agreement with US Airways and rolling out our expanded LaGuardia service next year," he said.

US Airways CEO Doug Parker thanked DOT and FAA executives and said their decision "is a great example of the regulatory working to the benefit of consumers by promoting competition and expanding consumer choice." He did not specify when US Airways would implement its expanded National service.

The joint statement by the two airlines was issued Thursday evening, two days after the two departments released their statements, an unusually long interlude that indicates careful consideration of the language by the two carriers.

The slot swap was first proposed more than two years ago. Responding to initial Transportation Department concerns about competition, the current version of the deal requires the carriers to divest eight pairs of daily slots at National and 16 pairs at LaGuardia, which would be taken over by low-cost competitors.

The deal strengthens Delta in New York, the world's largest aviation market, while US Airways would strengthen its hold on National, perhaps the best Northeast airport because of its easy access to a major city, and long a profit center for the airline.

In its statement on Tuesday, the Justice Department said its antitrust division will continue an investigation of US Airways' slot acquisition at National "with a focus on the increase in US Airways' share and use of slots at Reagan National and the resulting decrease in Delta's share of slots at this slot-constrained airport, at which passengers pay among the highest fares in the country.

"While the antitrust division works closely with DOT on airline issues, the two agencies act under substantially different statutory and regulatory frameworks," the statement said. "The role of the antitrust division is to protect competition and to ensure that companies do not raise prices to harm consumers in violation of the antitrust laws."

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

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