Southwest Airlines CEO made it clear during an earnings call that Southwest believes that should there be a merger between US Airways and American Airlines, that slots in both the New York City and Washington D.C. areas should be made available by the combined airline.  And Southwest wants those slots.

In the most recent give-up by US Airways at Reagan National about 2 years ago, jetBlue won the auction for those slots.  jetBlue paid $40 million for just 16 slots.

Southwest has lost several bidding wars for assets over the last several years.  Bidding wars that even today I would argue it should have won by being just a touch more aggressive.  Southwest tends to want a “deal”  much like it got with asset purchases from ATA many years ago.

Those deals don’t exist anymore.  Premiums are paid for such assets and whether we like it or not, the price of entry in those markets is very high.

So, is Southwest prepared to pay to play in those markets?  I think it will.  Southwest’s business strategy has changed over the past 2 years and has an increasing focus on winning business travel.  To do that, it needs more penetration in markets such as New York City and Washington D.C.

Filed under: Airline News, Airports by ajax
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