US DOT Opens Assignment Proceeding for Slots at Mexico City and New York
MIAMI — The US Department of Transportation (DOT) has formally instituted a Slot Assignment Proceeding, in order to allocate slots at New York JFK and Mexico City airports, which Delta Air Lines and Aeromexico agreed to relinquish as part of the antitrust immunity conditions set forth for their joint venture.
In a series of rulings published late last year, the DOT required both carriers to divest a total of 24 slot pairs at Mexico City and New York, to offset its concerns about any possible anti-competitive impact the partnership may have in these markets.
In order to mitigate the financial impact on the airlines,only two out of the four slots at New York must be divested during the peak hours, between 15:00 and 20:59, local time.
The DOT also highlighted that the compliance with its remedy will be consistent with the ruling from Mexico’s Anti-monopoly Commission (COFECE), wherein Delta and Aeromexico have been requested to divest eight slots at Mexico City.
The carriers eligible for the slots at Mexico City and New York include Alaska Airlines, Allegiant Air, Frontier Airlines, Hawaiian Airlines, Southwest Airlines, Spirit Airlines, Sun Country Airlines, Virgin America, VivaAeroBus and Volaris.
JetBlue would only be eligible for the slots at Mexico City, and Interjet for those at New York City.
In an order requesting proposals from the eligible carriers to utilize the divested slots, the DOT said it would be conducting the exercise in two phases. The first phase entails the allocation of fourteen Mexico City slot pairs and two at JFK to applicants of the DOT’s choosing, while the second encompass the allocation of the remaining ten Mexico City and two JFK slots under slightly different circumstances.
In the second phase, the slots will only be awarded to airlines that have proved to the DOT that they have made reasonable efforts to acquire the slots by themselves, through each airports’ normal allocation process before Delta and Aeromexico. This allocation must be completed before IATA’s Northern Summer 2018 scheduling season.
“In selecting among the proposals, the Department will consider which applicant or applicants will be most likely to offer and maintain service that will best meet the objective of the divestiture. This will include introducing competition and price discipline in the U.S.-MEX and JFK-MEX markets,” the DOT said.
Applicant’s proposals will also be scrutinized for their network benefits including connections behind or beyond, as well as service to communities without existing non-stop service to either slot-controlled airport. Additionally, the proposal’s ability to enhance the quality of competition, such as by offering additional frequencies in major markets or introducing the benefits of new business models, will be looked at.
Proposals are due by January 23, 2017 with a final ruling due by May 17, 2017.