Delta Air Lines Inc. would be the clear winner if a 30-year-old rule restricting direct flights to the West Coast from New York’s LaGuardia airport is lifted. JetBlue Airways Corp. may have the most to lose, aviation consultants said.
The Port Authority of New York & New Jersey is assessing whether to change the so-called perimeter rule, which was put in place in 1984 and restricts flights longer than 1,500 miles (2,414 kilometers) from LaGuardia. The idea was to reduce congestion by encouraging business travel out of LaGuardia and push vacationers to John F. Kennedy International and Liberty airport in Newark, New Jersey.
Lifting the rule would allow airlines to fly nonstop from LaGuardia to Western cities including Los Angeles, Las Vegas and Seattle, which are now only accessible from JFK and Newark. That service would come at the expense of existing flights to smaller, closer cities.
“Delta would be a clear win because it would give them the ability to serve more origination and destination markets, which would aid their connecting service,” said George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Virginia.
American Airlines Group Inc., the second-largest carrier behind Delta at LaGuardia, also would benefit if it could replace shorter flights on smaller planes with long-range routes and bigger jets.
Airlines, including Delta and American, could pick the worst-performing 50-or 70-seat flights at the airport and replace them with 150-seat routes to the West Coast, said Craig Jenks, an aviation consultant with Airline/Aircraft Projects Inc. in New York.
“It’s a no-brainer,” he said in a telephone interview. “It’s an immediate win.”
JetBlue is likely to see some passengers shift from its base at Kennedy to LaGuardia, which is closer to Manhattan, if the longer flights are allowed, said Sandy Rederer, an aviation consultant with Mead & Hunt.
“JetBlue is probably a loser because of its big JFK participation,” he said. The New York-based carrier transports 37 percent of JFK passengers.
United Continental Holdings Inc., which dominates the Newark airport, also could lose some travelers to Delta or American at LaGuardia. While United has 7.5 percent of passengers at LaGuardia, it couldn’t offer as many long-haul options as its rivals at that airport.
“United will almost be forced to put in LaGuardia-Los Angeles service at least, and San Francisco,” Rederer said. “Being the weakest of the big three at LaGuardia, it puts them at a little disadvantage. But these are huge airlines. It’s not going to be a major factor for any of the three.”
JetBlue and Virgin America Inc. may ask the Port Authority, which oversees the New York City area’s three major airports, for additional LaGuardia flight slots now held by bigger network carriers as compensation for a move that would clearly benefit the major airlines, according to Jenks.
“We’re very supportive of the move to lift restrictions at LaGuardia, as long as the process also ensures that smaller and new entrant carriers at that airport have fair access in terms of the potential expansion opportunities,” said Jennifer Thomas, a Virgin America spokeswoman.
American, Delta, JetBlue and Southwest didn’t return calls seeking comment on the possible change.
“We’re reviewing the issue and will work to ensure any potential changes are in the best interest of our customers,” United spokesman Luke Punzenberger said.
The ultimate winner may be consumers, who could take advantage of lower fares, at least initially, as flights are adjusted, and more competition on flights from New York to the West Coast, Rederer said.
–With assistance from Michael Sasso in Atlanta.
This article was written by MARY SCHLANGENSTEIN from Bloomberg and was legally licensed through the NewsCred publisher network.