American Airlines lost track of coveted space at JFK International Airport in New York following its merger with US Airways, resulting in the carrier giving up flights at one of the world’s most competitive airports, a top executive testified Friday.
The details came out during day four of the U.S. government’s antitrust trial against American Airlines and JetBlue for an alliance in the New York and Boston areas where carriers fiercely fight over space in the crowded markets.
Vasu Raja, a longtime network planning leader and now chief commercial officer at American Airlines, said the company was forced to make concessions at JFK in 2019 after it was discovered that the Fort Worth-based airline was underutilizing slots at the New York airport. He said he was “a little bit beside myself that that happened.”
“When we put together the merger, our process for accounting slots was extremely manual and we had the wrong count,” Vasu told U.S. District Judge Leo Sorokin, who’s overseeing the trial in Boston.
Executives from competing airlines, including Dallas-based Southwest and Spirit, have argued against the partnership between American and JetBlue because they say it gives increased control in the biggest airline market in the world to American, by several measures the world’s largest carrier.
The rights to slots at JFK and a handful of other highly competitive airports are overseen by the Federal Aviation Administration and are rarely transferred as airlines fight to keep slots even in downtimes. Slots are the right to operate at a gate for a period of time. American has the third most slots at JFK, 212 as of this summer. Delta has 405 and JetBlue has 334, according to the FAA.
American Airlines has cited JetBlue’s access to the New York market as a basis for forging the partnership. As part of the antitrust trial, American has argued that it needs access to JetBlue’s strength in the Northeast, in particular New York and Boston, to complement its own strength in the Southeast and Southwest.
Since the antitrust trial is about competition in the New York and Boston markets, underusing slots at JFK could be viewed as an indication that American didn’t want to grow in New York and that it may have been flying less to New York to drive up prices.
Earlier in the day, Spirit networking executive John Kirby testified that “competition is harmed by this combination.”
But in 2019, the FAA approached American Airlines and told the airline it had been using only about 200 of the 216 slots it had been assigned at the time. American, Raja said, only thought that it had about 200.
But Raja said it was bad counting, not malicious intent, that kept American from adding more flights at JFK.
“But you would agree that that was an underutilization for years, right?” Sorokin asked Raja.
“An unintentional one for the worst of reasons because we didn’t count right,” Raja replied.
American had to give up seven slots to other airlines as a result, he said.
“As we were putting the airlines together, the schedule processes of these two things were not always lined up,” Raja said. “They were just not great business processes, and that drove a lot more of the underutilization than anything else.”
