W5 Posted November 24, 2011 Share Posted November 24, 2011 JetBlue wins auction for more NY flights: reporthttp://finance.yahoo.com/news/JetBlue-wins-auction-NY-rb-1199771425.html?x=0&l=1(Reuters) - JetBlue Airways Corp (NasdaqGS:JBLU) won an auction for eight new takeoff and landing slots at both LaGuardia in New York and Reagan National in Washington, Bloomberg News reported on Wednesday, citing people familiar with the matter.Bloomberg said JetBlue would pay $72 million for the 16 slots, which were won in a U.S. Department of Transportation auction and will let it expand operations at both airports.JetBlue spokespeople were not immediately available for comment on the report.Separately, WestJet Airlines Ltd (Toronto:WJA.TO) said it had also won eight takeoff and landing slots at LaGuardia in the auction. Link to comment Share on other sites More sharing options...
better4me Posted November 24, 2011 Share Posted November 24, 2011 right now they are sellin YYC JFK for 345.00 return in Jan exclusive of taxes etc. so they would need to sell over 50,000 seats at 100% net before beaking even. No wonder profit margins are slim in that market. My bar napkin calculation suggests that Westjet will need somewhere between $300 to $400 million in revenue on their new LGA market just to break even. This assumes an 8% operating margin, which is what WS has been able to achieve. I don't know how well this little LGA adventure will work out for WS, but I wish everyone profitable flights and lots of happy guests. Link to comment Share on other sites More sharing options...
Fido Posted November 24, 2011 Share Posted November 24, 2011 In the rules and regulations of the auction does Westjet have to use all of the slot pairs, or are they allowed to sell, lease, trade, default on the ones that they do not want?The two departures first thing in the morning does not make sense unless they plan to fly to both YYZ and YUL (which does not make sense either). Link to comment Share on other sites More sharing options...
jkavafian Posted November 24, 2011 Share Posted November 24, 2011 I was on AC 705 from LGA to YYZ at 0840 yesterday and there were 32 passengers on board the EMB190. Granted the NYC traffic is sounthbound in the morning and northbound in the evening. In my opinion this is a mistake on the part of WestJet but maybe they know something... Or they have some important corporate contracts. Link to comment Share on other sites More sharing options...
rudder Posted November 24, 2011 Share Posted November 24, 2011 LGA is an operational nightmare. Flow delays to NYC area airports are measured in HOURS!I wish WJ luck but they may find that LGA will consume more resources than it is worth. I would look for many flights to be consolidated on a day-of-flight basis. Link to comment Share on other sites More sharing options...
Thebean Posted November 24, 2011 Author Share Posted November 24, 2011 LGA is an operational nightmare. Flow delays to NYC area airports are measured in HOURS!I wish WJ luck but they may find that LGA will consume more resources than it is worth. I would look for many flights to be consolidated on a day-of-flight basis.It is a rare day when a sched airline....any sched airline....cancels flights because of low loads.The idea that it occurs is usually dreamt up by people who figure that the same aircraft flies back and forth over the same city pairs, day in day out.That is rarely the case. Most people realize that aircraft fly multiple sectors a day. If you cancel one sector, the following sector has to be cancelled and so on, unless there happen to be spare aircraft, and crew, positioned down the line ready to swing into action on a moments notice to fill in. Underutilizing assets like this is a sure fire way of running an airline into bankruptcy. Whatever problem you think you're fixing by cancelling flights is compounded elsewhere almost exponentially.Besides, I can think of numerous examples of markets / times where one leg of a r/t is weak, but more than made up for by the other leg. Link to comment Share on other sites More sharing options...
rudder Posted November 24, 2011 Share Posted November 24, 2011 I did not say consolidated strictly due to load. I said consolidated due to delay (and load if possible).Happens all the time for LGA. Link to comment Share on other sites More sharing options...
chockalicious Posted November 24, 2011 Share Posted November 24, 2011 Has anyone actually got a link to what WS paid for the slots? Link to comment Share on other sites More sharing options...
Thebean Posted November 24, 2011 Author Share Posted November 24, 2011 Has anyone actually got a link to what WS paid for the slots?http://www.washingtonpost.com/business/jetblue-said-to-win-auction-of-laguardia-washington-flights/2011/11/23/gIQAVNx4pN_story.html Link to comment Share on other sites More sharing options...
chockalicious Posted November 24, 2011 Share Posted November 24, 2011 Thanks for the link. I am assuming (perhaps incorrectly) that they get these slots in perpituity, that is, they do not expire after 1 year, 5 years, etc. If that is the case WS has a long time to make their money back on them.I am not seeing the math above as being accurate on breaking even? Link to comment Share on other sites More sharing options...
internet Posted November 24, 2011 Share Posted November 24, 2011 While the $17 million may be a lot.... The airline must see a need to add a competitive schedule to LGA. Clearly it was a missing part of the network that business travelers required. Bean: Is LGA a market the WJA can stimulate demand with lower fares, in order to fill -600's? I suspect overall average fares are about to drop significantly, especially at the high-end Link to comment Share on other sites More sharing options...
melcrothers Posted November 24, 2011 Share Posted November 24, 2011 Not sure if I missed this - but what is the time frame for the slot validity. Is it for 1 year, or more???Thanks, Mel Link to comment Share on other sites More sharing options...
chockalicious Posted November 24, 2011 Share Posted November 24, 2011 WS has 6 months to use them and then must keep them in use for an additional 6 months. Link to comment Share on other sites More sharing options...
Guest Posted November 24, 2011 Share Posted November 24, 2011 WS has 6 months to use them and then must keep them in use for an additional 6 months.As I understand it, after 6 months of use they can be leased to any of the carriers who were eligible to bid on this package (ie. Jetblue, Southwest, Frontier, etc...) Link to comment Share on other sites More sharing options...
Fido Posted December 2, 2011 Share Posted December 2, 2011 JetBlue, WestJet win airport slots at LaGuardia and Reagan NationalBy Jerry LimoneJetBlue and WestJet were the winners of an auction that enabled the airlines to gain takeoff and landing slots at New York LaGuardia and Washington Reagan National airports.The auction was a part of the Department of Transportation's requirement that Delta and U.S. Airways divest slot pairs as a condition of their slot swap at LaGuardia and National. A slot pair is two slots required for a takeoff and landing at capacity-controlled airports. JetBlue will pay Delta $40 million for eight pairs of daily slots at Reagan National and $32 million for eight slot pairs at LaGuardia, the DOT said. JetBlue already has a small presence at both airports. WestJet will pay Delta $17.6 million for eight slot pairs at LaGuardia, where the Canadian airline is a new entrant. The DOT required Delta and US Airways to divest a total of 24 slot pairs as a condition for being able do their LaGuardia-National slot swap. On Oct. 7, the DOT approved a request by the carriers under which Delta would trade 42 daily slot pairs at Reagan National for 132 of US Airways’ daily slot pairs at LaGuardia. The auctions won by JetBlue and WestJet took place between Nov. 14 and Nov. 22, with bids submitted via e-mail. Only carriers having less than 5% of the slots at LaGuardia or Reagan National were eligible to bid. The DOT stipulated that slots be sold in three bundles to "ensure that a purchaser would be able to provide meaningful new competition." Seven carriers participated in the bidding. The others were Allegiant, Frontier, Sun Country, Southwest and Spirit. Link to comment Share on other sites More sharing options...
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