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Delta, United Spin Expanded New York Schedules as Slot Waivers End

Edward Russell

October 28th, 2021 at 8:01 AM EDT

Following recent announcements from Delta Air Lines and United Airlines, anyone outside of the airline industry could be excused for thinking the travel recovery is roaring forward, with road warriors flocking back to planes. As those carriers put it, they are giving travelers more choice and meeting pent-up demand with robust expanded schedules from New York-area airports, beginning in November.

But the resumptions at Delta and United are far from a sign of visitors flocking to Fifth Avenue for their holiday shopping, or bankers resuming their grueling travel schedules. Both airlines have said in recent weeks that the recovery, particularly of business travelers, remains at least three or more months off, with the end of 2022 a more likely timeline. The announcements are fine examples of marketing spin — making lemonade from lemons.

Delta and United — as well as every U.S. carrier — must resume flying at least 80 percent of their slots at New York’s JFK and LaGuardia airports, and at least 80 percent of their runway timings at Newark Liberty Airport on October 31. That’s the day after the U.S. FAA ends the Covid-19 pandemic slot waiver for domestic flights, which has been in place since March 2020. The waiver remains in effect for international flights until March 26, 2022. The change also applies to four more airports: Chicago O’Hare, Los Angeles, San Francisco, and Washington Reagan National.

In short, Delta and United are adding flights to protect their valuable New York-area airport assets: Slots and runway timings.

“The desire to not lose slots takes on heightened strategic importance at this time, because the creation of the Northeast Alliance by American and JetBlue has sharpened competition among the majors,” said Saikat Chaudhuri, a director at UC Berkeley’s Haas School of Business and College of Engineering who studies the airline industry. He agreed that Delta and United are also protecting their slots with the flight additions.

The controversial American-JetBlue alliance, which the U.S. Department of Justice has challenged, allows the carriers to create a de facto third competitor to Delta and United in the New York area. JetBlue has added mostly domestic flights at coveted JFK, LaGuardia, and Newark airports, while American has beefed up its longhaul offerings, including new routes from JFK to Athens and Tel Aviv. Discounters, including Southwest Airlines and Spirit Airlines, that lack a sizable presence in New York have challenged the tie up as anti-competitive.

Delta unveiled its expanded New York schedule under the guise of meeting the “significant demand for business and international travel,” as Senior Vice President of Network Planning Joe Esposito put it on October 19. However, not even a week earlier Delta CEO Ed Bastian said domestic business had only recovered to roughly half its pre-pandemic levels, and executives added they do not forecast a recovery to 80-100 percent of 2019 until the end of 2022.

The Atlanta-based carrier’s combined domestic departures from JFK and LaGuardia will increase 16 percent to 336 flights from October 29 to November 5 — the Friday before and after the domestic slot waiver ends — according to Cirium schedules. The number of departures is down almost 23 percent from 435 flights on the corresponding weekday in 2019.

And United will launch its delayed shuttle between Newark and Washington National, with Senior Vice President of Domestic Planning Ankit Gupta touting customer “convenience and comfort” in the airline’s October 26 announcement. But the route has little local traffic given stiff competition from Amtrak and, as United executives said on October 20, the corporate travelers that could fill those planes remains well below 2019 levels.

The Chicago-based carrier’s domestic departures from Newark will increase 32 percent to 330 flights from October 29 to November 5, Cirium schedules show. The number of departures is down 3.5 percent from 342 flights on the corresponding weekday in 2019.

Both Delta and United say leisure demand is at or even above 2019 levels for the year-end holidays. But one thing is clear, New York travel demand is not about to step up by as much as a third overnight on October 30.

The two carriers are not alone in resuming flights — they are just the airlines that wrapped up the additions in a bow and presented them as a sign of the recovery. From October 29 to November 5, overall domestic departures increase 28 percent to 346 flights at JFK, 34 percent to 474 flights at LaGuardia, and 24 percent to 447 flights at Newark, Cirium data show. American will make one of the largest increases with combined JFK and LaGuardia departures jumping 56 percent to 240 flights.

Departures also increase at Washington National come October 31. The number of flights jump 36 percent to 405 departures by November 5, according to Cirium. Departures hold relatively steady at Chicago O’Hare, Los Angeles, and San Francisco.

Until the lucrative business travelers that typically fill many of these flights to New York return — most likely next year — the added flights are likely to be a drag on airlines’ financials. Added capacity without the demand to fill it means empty seats or discounted tickets, both of which could pull down unit revenues and drive up unit costs that are already under pressure.

Edward Russell

October 28th, 2021 at 8:01 AM EDT

Photo credit: Delta is protecting its slots with additional flights from New York JFK and LaGuardia airports. Delta Air Lines

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