Aviation Update

Is the Chicago shake-down machine now kicking into gear on the airlines now?   The strange lawsuit against the proposed American-US Air merger launched by Eric Holder has now been settled out of court leaving some industry experts confused:

“By guaranteeing a bigger foothold for low-cost carriers at key U.S. airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country,” Mr. Holder said.

But hold on a minute. That doesn’t sound like the position taken by the government three months ago when it filed a lawsuit challenging the merger. Back then, the Justice Department suggested that merely turning over space at airports to JetBlue and Southwest wouldn’t rid the merger of competitive consequences.

The new deal basically calls for the mega-airline to give up gates (slots) at LaGuardia, Reagan National, O'Hare and LAX to supposedly even the playing field.  Digging deeper:

The combined airline agrees to divest 104 slots at Washington’s Reagan National, 34 at New York’s LaGuardia and two gates at each of five other airports.

So, who will decide which airline gets those new slots?

The Justice Department will select which airlines are eligible to buy slots that the airlines must sell as part of the proposed settlement, according to a source close to the deal who was not authorized to speak publicly.

But not to just anyone:

Delta Air Lines made a bid for expansion at Reagan, saying it was "best positioned to continue competitive nonstop flights from Reagan National to small- and mid-sized cities."

But the source close to the deal said JetBlue is expected to buy the Reagan National slots that it is leasing from American, and that United Airlines and Delta are not expected to be on the list of qualified buyers.

"The list of qualified buyers".   Well, there may be nothing to see here, but based on the track record of the Attorney General and the crowd from Chicago it certainly feels like something funny just happened.