LoneStarMike
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Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 2:37 am

OK, so I read one of the other recently archived threads about VX starting service to EWR April 2, 2013.

EWR For Sale On Virgin America (by dwcontroller Dec 10 2012 in Civil Aviation)

Within the thread there was a cited source that said VX was getting the slots from AA. I (mistakenly) assumed that AA was reducing flights elsewhere and then selling those slots to VX. Apparently that's not the case, though.

The Dallas Morning News has updated the story with new information.

Virgin America is getting Newark slots from American Airlines (and United and Porter are losing them)
Terry Maxon
Dallas Morning News
January 3, 2013

Quote:
American Airlines is asking the U.S. Bankruptcy Court to let it lease 15 takeoff and landing slots at Newark Liberty International Airport to Virgin America.

And, as it turns out, 10 of the slots are currently leased to United Airlines and four are leased to Canadian carrier Porter Airlines. The other slot is currently operated by American.

[SNIP]

In its Wednesday evening filing, American asked the court to approve its rejection of the United and Porter slot leases as of Saturday, March 30. The slots then go to Virgin America on Sunday, March 31, two days before VA begins Newark flights.

We also learn from the filing that American actually signed the agreement to lease the slots to Virgin America on Sept. 28, 2012. We also learn that American (actually subsidiary American Eagle) leased the slots to United and Porter in 2008, with the leases to expire in 2019.

So, is there any chance that the courts will not allow AA to reject United's and Porter's leases?

And if the leases are rejected, wouldn't UA have to either reduce frequencies on their competing service with VX and/or cut flights to other cities?

LoneStarMike
 
Jerseyguy
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 2:49 am

If the courts deciede that AA can't break the leases with UA and Porter then they also can't break the lease with VX and will have to reduce their own flying.
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LAXintl
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 3:04 am

I don't see why there should be a problems.

The courts duty to help manage the BK estate to derive the most value.

As article states the amount AA would be making from VX deal and its future cost savings is more beneficial then the current UA/PD deal.
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PIEAvantiP180
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 3:09 am

15 slots is more then you need to operate 3x daily each to LAX and SFO. With 3 slots still unaccounted for means another daily flight can be added to one of the destinations but how will they incorporate that extra slot left over?

Quoting LoneStarMike (Thread starter):

I'm sure UA has plenty of slots that they use 80/20 rule that their schedule would not be affected if forced to give them up but Porter might be affected unless they can find slots quickly.
 
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enilria
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 3:51 am

Quoting LoneStarMike (Thread starter):
So, is there any chance that the courts will not allow AA to reject United's and Porter's leases?
Quoting jerseyguy (Reply 1):
If the courts deciede that AA can't break the leases with UA and Porter then they also can't break the lease with VX and will have to reduce their own flying.
Quoting LAXintl (Reply 2):
As article states the amount AA would be making from VX deal and its future cost savings is more beneficial then the current UA/PD deal.

Not a problem. AA only has to show that the transaction is overall positive versus the current contract. They are free to reject such contracts. Technically, it doesn't even have to be positive, but the creditors would have nothing to whine about if they show it is positive.
 
SurfandSnow
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 5:53 am

I figured AA was the one giving VX the slots. They've slashed EWR service in the past decade, quitting mainline to the likes of LHR, EGE, and SJU.. IIRC Eagle dropped flights to BOS, RDU, etc. during the same timeframe. Everyone else seems to be maintaining their EWR slot portfolios or growing whenever possible, with a few exceptions like FL pulling out in order to do a slot swap with CO for more LGA (and DCA) slots and SQ finally ending the costly ULH to SIN. I'm sure UA will manage just fine, and PD can probably grab the SQ slot or whatever else may be available...

If there was great doubt over the ability of this deal to go through, VX wouldn't already be selling tickets for EWR. It seems everyone involved (VX, AA, EWR airport) is confident the service will go forward as planned...
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STT757
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 12:09 pm

Quoting surfandsnow (Reply 5):
They've slashed EWR service in the past decade, quitting mainline to the likes of LHR, EGE, and SJU.. IIRC Eagle dropped flights to BOS, RDU, etc. during the same timeframe.

And STL.
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N62NA
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RE: Potential Slot Problem For VX At EWR?

Fri Jan 04, 2013 6:29 pm

Quoting surfandsnow (Reply 5):
I figured AA was the one giving VX the slots. They've slashed EWR service in the past decade, quitting mainline to the likes of LHR, EGE, and SJU.

And the very important route to ORD.