When American Airlines Forgot There Were Additional New York JFK Slots – Simple Flying

During an antitrust investigation into its Northeast alliance with JetBlue, American Airlines was confronted with an uncomfortable truth: the airline had some slots at New York’s capacity-controlled JFK Airport that it was unaware of. Let’s find out how this happened.

Forgot Slots: Yes, It Happens!

Slots at congested airports like New York City are invaluable advantages for airlines looking to expand in this highly profitable market. Although one might think that an airline counts how many slots it owns at a given airport, this is not always the case. At least that wasn’t the case with American Airlines.

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New York John F. Kennedy is one of the most capacity constrained airports in the world, and its slots are invaluable. Photo: Vincenzo Pace I Simple flying

During a Northeast partnership lawsuit with JetBlue, American Airlines stated that the only way it could compete in the New York market was to form an alliance with the smaller airline. Indeed, American argued that it was impossible to access additional slots at New York’s capacity-controlled airports. However, a rather inconvenient truth came to light for the airline, which turned out to be that it had forgotten some slots it still owned at New York JFK Airport, which may have allowed American to strengthen its presence in that market. But how can an airline forget something as valuable as the slots it owns at congested airports?

The Root of Decay

After an audit found that American Airlines was underusing some of its slots at JFK, the Federal Aviation Administration – FAA – reclaimed seven slots from the airline. When asked about the underutilization of such a valuable asset, American Airlines chief commercial officer Vasu Raja explained that it was related to American Airlines’ merger with US Airways in 2010. After the merger, some of the airline’s New York slots were discontinued, seemingly forgotten.

Following a merger with US Airways in 2010, American Airlines underutilized some of its slots at JFK Airport. Photo: Vincenzo Pace I Simple flying

Vasu Raja, who used to manage American Airlines’ network, explained that post-merger slot accounting and combining was done manually. Still, he recognized the mistake and said there was no valid reason to justify it, which he said made the airline’s management “(…) sound completely ridiculous”.

How did the unused slots come about?

The discovery of the unused slots came to light during the antitrust case regarding the Northeast alliance with JetBlue. But what exposed American Airlines’ mistake?

Prior to the outbreak of the COVID-19 pandemic and the Northeast alliance with JetBlue, American Airlines planned to transform and expand its presence at two key hubs in the Northeast US, namely Boston Logan International and New York John F. Kennedy International. In this regard, there was an email exchange between Vasu Raja and Brent Alex, a director of regulatory affairs for American Airlines. In the email, Raja confirmed that the airline had ceded some slots following its merger with US Airways in the early 2010s.

One of the reasons American Airlines formed an alliance with JetBlue was to strengthen its presence in the New York market, a Delta and United stronghold. Little did it know that it had forgotten some of its slots there. Photo: Vincenzo Pace I Simple flying

In the email exchange, Raja wrote that American Airlines thought it had 216 slots after ceding seven to the Federal Aviation Administration, while the FAA thought the airline owned 200. In the end, American Airlines was allowed to keep 210 slots.

Why an alliance with JetBlue?

In the antitrust filing, American Airlines said the Northeast alliance with JetBlue is essential for the airline to compete in the highly profitable and competitive New York market, currently dominated by Delta Air Lines and United.

For the 12 months ended July 2022, JetBlue was the largest airline at New York John F. Kennedy Airport; However, the airline has limited growth opportunities due to its reduced network compared to older carriers like American Airlines. Therefore, the two airlines believe that by combining JetBlue’s slots at JFK with American Airlines’ slots at LaGuardia and American Airlines’ worldwide network, they can successfully and efficiently compete against Delta-United’s domain.

American Airlines and JetBlue’s Northeast alliance aims to turn two weak into a single, stronger and “relevant competitor.” Photo: Vincenzo Pace I Simple flying

Although the alliance was approved during the Trump administration, the Justice Department sued the airlines in 2021, alleging that by codesharing on complementary networks through New York and Boston, the alliance would eliminate significant competition between the airlines, with the risk of an average Fares will increase and service quality will decrease. However, the two airlines responded to the allegations by noting that fares had not increased in the 18 months since the alliance was formed and that customer convenience had improved.

What do you think of American Airlines missing some slots at a congested airport like JFK? Let us know in the comments below!

Source: The Points Guy