American may gain N.E. shuttles if U.S. Airways purchases Delta

By Staff (89635)

Thursday, November 16, 2006
© Copyright 2013 Gwinnett Daily Post

WASHINGTON - Several airlines, including American, Northwest and United, may have an interest in picking up the gates that would be opened up at airports in Boston, New York and Washington if U.S. Airways succeeds in its $8 billion bid for Delta Air Lines.

Passengers are unlikely to notice many changes beyond new logos on the airliners, and possibly slightly fewer flights.

U.S. Airways Group Inc. CEO Doug Parker said the merged carrier would need to divest overlapping assets, most notably those serving the Northeast ''shuttles'' popular with business travelers.

Analysts said that to address regulators' antitrust concerns - and meet a strategic goal of trimming flying capacity by 10 percent - the combined company would also need to forfeit airport gates up and down the East Coast, in places such as Charlotte, N.C., Atlanta and across Florida.

Shares of airlines with a heavy East Coast presence, such as JetBlue Airways Corp. and AirTran Holdings Inc., soared after the acquisition was proposed, signaling Wall Street's expectations that reduced capacity in the region would make it easier to raise fares.

JetBlue's stock leaped $1.31, or 9.3 percent, to $15.40 on the Nasdaq Stock Market, while AirTran's gained $1.93, or 17.4 percent, to $13 on the New York Stock Exchange.

It is too soon to say whether the combined company would fly the existing shuttle operations of U.S. Airways or Delta in the busy Northeast corridor, but as a practical matter it really doesn't matter, analysts said.

Spinning off one of the two carriers' shuttle services will be relatively easy, analysts said, since they already operate as somewhat separate entities from the mainline operations.

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