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March 10, 2014

"Delta Is Not an Appropriate Divestiture Candidate," DOJ says

It looks like Delta Air Lines is out of the running for two gates at Dallas Love Field.

A court filing made by the Department of Justice on Monday says that Delta is "not an appropriate divestiture candidate" for the gates and slots that American Airlines is required to give up as part of its settlement agreement to receive approval for its merger with US Airways.

"The United States concluded that divesting assets to Delta would fail to address the harm arising from the merger and would be inconsistent with the goals that the remedy seeks to achieve," the filing said.

American has to give up two gates at Dallas Love Field, one which is currently leased by Delta Air Lines to provide flights to Atlanta on small regional jets. Delta argued that it should be given the opportunity to bid on those two gates so it could increase its service to other cities out of Love Field once the Wright Amendment restrictions are lifted in October.

Here's what the filing says about Delta's bid for the Love Field gates:

"The point of the Love Field divestiture is for an LCC to offer service at the airport that even Delta recognizes is “poised to become a highly attractive option for business travelers from across the nation who will be drawn by its proximity to the Dallas city center.” Id. at 31. The acquirer of the gates will be able to offer a compelling product to sought-after business passengers who otherwise would favor New American’s service out of its hub at DFW. Obtaining access to Love Field will significantly enhance the acquirer’s ability to meaningfully compete against New American, thereby furthering the overall goals of the remedy. See supra § II.B.2.b. In contrast, Delta, given its overall size and scope as well as its presence at DFW, can and does challenge New American for the business of corporate customers flying to and from the Dallas area."

-Andrea Ahles

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Comments

Greg

Looks like Delta will have to re-route some folks on the routes they had been planning at Love.

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