Airlines vying for slots at Reagan National

Washington Post Staff Writer
Tuesday, October 19, 2010; 7:34 PM

Wanted: A low-cost airline that will fly to a small or medium-size airport within 1,250 miles of Washington. Service to an airport that doesn't have direct D.C. flights would be optimal. And the lower the fares, the better.

In an unusual government-run competition, five airlines are vying for two pairs of takeoff-and-landing spots at Reagan National, the convenient Arlington County airport whose space is limited by federal law and design.

The "slots" are operated by Republic Airways, the Indianapolis-based airline that owns Frontier and Midwest, but the U.S. Department of Transportation is allowing for the openings to be publicly rebid because of Republic's purchase of Midwest in July 2009.

Unlike Dulles International Airport near Chantilly or Baltimore-Washington International Marshall Airport in Anne Arundel County, Reagan National is subject to federally mandated restrictions on how many flights can be operated out of its 44 gates.

National's limited number of highly prized, small-carrier slots are supposed to encourage low-fare competition at an airport designed to be the region's day-trip, short-haul transportation hub. Those slots are intended for airlines that have a small presence at the airport, no matter their size.

"There's a limited number at National, so they're in demand," said George W. Hamlin, a Fairfax County-based commercial airline industry analyst who has advised airlines on slot applications. "And it's not a simple bidding process - it's very subjective."

The competition for the slots is subject to aggressive lobbying by airlines, airports, politicians and local business organizations.

Southwest Airlines, which announced a merger with AirTran last month, is looking to start its own D.C.-to-Kansas City route, with average fares of $132 and 83,300 passengers a year, according to company estimates. It would mark Southwest's first entree into highly profitable National, which has some of the highest domestic fares in the nation.

For its part, Southwest's soon-to-be-partner, AirTran, is seeking to open one of two possible Florida routes: to Southwest Florida International Airport near Fort Myers, Fla., or Sarasota-Bradenton International Airport, 100 miles north along the state's west coast.

US Airways wants to launch service between Washington and Pensacola's Gulf Coast Regional Airport, saying that there is a lack of direct D.C. air travel over a 500-mile stretch between New Orleans and Jacksonville, Fla. About 220,000 Defense Department employees live along the coast in the five states that border the Gulf of Mexico, the company says.

Sun Country is pitching a Minneapolis-to-Washington flight for $130 for 31,390 passengers annually, with one stopover in Lansing, Mich. Lansing's airport has offered Sun Country $250,000 in marketing help and a promise to waive landing fees and terminal rent for two years if the airport gets a new Washington route.

But what will truly sway federal regulators will be a mixture of potential cost savings for travelers and access to previously untrafficked locations, said Michael Boyd, an airline industry consultant in Evergreen, Colo. "They will be decided for the public good, but it's also political, and since we're talking about a Washington airport, it's going to be really political," Boyd said.

There is no timetable for when the Department of Transportation will award the National slots, but spokesman Bill Mosley said the agency plans to "issue a decision as soon as possible." The public comment period ended last week.

Midwest Airlines, which has operated three daily nonstop flights between Kansas City and National with the two up-for-grab slots for more than six years, has been particularly vocal in its push to keep its National standing.

It has argued that US Airways has had a "monopoly" at National and that its "service patterns have been inconsistent and sporadic," according to the company's federal application.

US Airways pulled out of National-to-Kansas City in 2001 before returning two years later with different types of aircraft.

Midwest has also threatened to sue the federal government if it doesn't get to keep the slots.

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