New Slots Fuel D.C. Competition

Washington-area travelers this spring will have many new air service options as several carriers begin and increase flying from both Dulles and Reagan National airports. The U.S. Department of Transportation this month divvied up among nine airlines 22 new takeoff and landing slots at Reagan National for service both inside and outside of a 1,250-mile perimeter circling the airport. At Dulles, America West Airlines and the new Independence Air will begin bringing low-fare competition into a market traditionally dominated by higher-fare carriers.

As stipulated by Congressional mandate, DOT awarded the new Reagan National slots to foster competition and expand flight options on underserved routes. Airlines flying from at the closest airport to central Washington, D.C., have been restricted from operating beyond-perimeter flights. President George W. Bush in December signed the Vision 100—Century of Aviation Reauthorization Act, which called for new long- and short-haul services.

Four airlines split 12 beyond-perimeter slots earmarked for service to western cities. Alaska scored four slots and plans to offer new nonstop service to Los Angeles, effective June 7, and a second daily nonstop to Seattle, effective June 6. "Los Angeles is the largest city in the country without nonstop service to Reagan," said Alaska CEO Bill Ayer. "This will fill a huge void in the nation's transportation network, and we're proud to be the carrier to do it."

America West grabbed a pair of slots to be used for an additional daily nonstop flight between National and Phoenix. The new service, AWA's third flight on the route, starts June 1. "Since we began providing nonstop competitive service at National nearly three years ago, our service has generated more than $148 million in savings for customers traveling from DCA to the West," said C.A. Howlett, AWA senior vice president of public affairs. "We anticipate that this trend will continue as consumers reap additional benefits from this new flight."

Alaska's new service concerns one northern Virginia corporate travel manager. "Lots of companies don't have much business on Alaska, so how much can you pump their way?" asked the buyer who requested anonymity. "On the other hand, if they don't get support, they have to move out."

Meanwhile, in the battle for Denver, United received the green light to launch one daily nonstop flight from National. It already offers eight daily flights from Washington Dulles to Denver. Rival Frontier Airlines was awarded four slots and will use them for double-daily service to Denver. Frontier already flies twice daily to Denver from Baltimore Washington International and on May 9 will launch two daily nonstop flights from Washington Dulles to Denver.

Five carriers received the nod for expanded services within the perimeter. DOT said proposals by carriers for such services must promote competition by new-entrant carriers, provide flights to small communities with limited transportation options and generate low-fare choices in the market.

Delta Connection carrier Comair on June 15 will begin the first-ever nonstop service from National to Lexington, Ky., using Bombardier Canadair regional jet aircraft. Delta also had asked for authority to launch National-Jackson, Miss., service, but was denied by DOT. Delta rival AirTran will use its two new slots to add a fourth daily roundtrip flight to Atlanta. Midwest Airlines was given slots for an additional daily flight between National and Kansas City. The expanded schedule goes into effect in June. Spirit Airlines was given slots to begin new service to Detroit Metro Airport and US Airways will initiate service to Chattanooga, Tenn.

Meanwhile, an influx of low-fare competition this spring will begin flowing into Dulles. America West on June 1 will begin twice-daily nonstop service to Los Angeles International, marking the carrier's fifth transcontinental route. "Since America West's introduction of transcontinental service in the fall of 2003, one-way, zero-day advance purchase fares on those routes have fallen from more than $1,200 to less than $300," the airline said.

Also this spring at Dulles, Independence Air will begin developing a sizable low-fare operation. Atlantic Coast Airlines is transitioning to Independence Air, which will launch inaugural flights on June 16, building to 300 daily departures by the end of the summer. The carrier next month will announce its initial route network, schedule and pricing structure.

In order to reinvent itself as a low-fare carrier, Atlantic Coast Airlines in the coming months will cease feeder operations for both Delta Connection and United Express.

United, which will transition away from ACA services beginning June 4, said it will continue serving all affected United Express markets through partnerships with Chautauqua Airlines, Republic Airlines and Shuttle America. ACA's Delta Connection services will end in October and will be replaced in part by Delta subsidiary Comair. Dulles next year may see yet another low-fare entrant if Sir Richard Branson opts to base his Virgin-branded U.S. carrier there. Washington, Boston and San Francisco are said to be the three candidates.