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March 10, 2014

American sold Washington D.C., New York slots for $425 million

American Airlines sold its slots at Washington D.C.'s Reagan National airport and New York's LaGuardia airport for $425 million, according to a court filing made by the Department of Justice.

"The competitive significance of the remedy is reflected in the value being paid for the divested Reagan National and LaGuardia slots – over $425 million – which is unprecedented in the airline industry and among the most substantial merger remedies in any industry," the filing said.

As part of its antitrust settlement with the DOJ to receive approval for its merger with US Airways, American was required to sell 104 takeoff and landing slots at Washington Reagan National and 34 slots at New York's LaGuardia airport. These included a dozen slots that JetBlue Airways had been leasing from American at Reagan and 10 slots Southwest Airlines had been leasing from American at LaGuardia.

"The remedy is a major victory for American consumers. It will enable Low Cost Carriers (“LCCs”) to fly millions of new passengers per year to destinations throughout the country," the filing said.

JetBlue purchased an additional 24 slots at Reagan while Virgin America bought eight slots at Reagan. Southwest bought 56 slots at Reagan but will be returning 2 slots to the Federal Aviation Administration because the two slots are only for a Sunday flight.

At LaGuardia, Southwest bought an additional dozen slots while Virgin America purchased the other 12 slots.

-Andrea Ahles

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