American Airlines and JetBlue Airways are currently in court, as their Northeast Alliance is being challenged by the Department of Justice. On Friday, American executives made a pretty surprising revelation about why the airline lost some slots at JFK.
American forgot it had JFK slots, had them taken away
In the United States, New York John F. Kennedy Airport (JFK) is one of the most slot restricted airports. In order to fly to the airport, airlines have to acquire takeoff and landing slots, and that’s intended to control capacity at the airport.
This has been one of the arguments that has been made in favor of the American and JetBlue alliance — American has claimed it can’t compete in New York without the JetBlue tie-up, because the airline can’t acquire more slots. That lead to a fascinating revelation — a while back American lost slots at JFK because it simply forgot it had them.
In 2019, the United Stated Federal Aviation Administration (FAA) conducted an audit, and found that American was underutilizing its slots at JFK. As a result, American had seven slots taken away. Essentially slots operate under a “use it or lose it” policy, meaning if you don’t use your slots, they will be taken away.
American had them taken away because it forgot it had them, in the aftermath of the merger with US Airways. As Vasu Raja, American Airlines Chief Commercial Officer, described this:
“Accounting and combining slots after the merger was a manual process. There’s no good reason, and I’m a little beside myself that it happened. It was for the worst of reasons, it makes us sound completely ridiculous.”
Interestingly at the time, both American and the FAA didn’t even seem to be in agreement about how many JFK slots American had. After losing the seven slots, American thought it had 216 slots, while the FAA thought American had 200 slots. The two organizations ended up agreeing on allowing American to hold onto 210 slots.
My thoughts on American losing JFK slots
A few thoughts on American losing JFK slots because executives forgot they had them…
First of all, you have to love the irony of this happening in short the same day it was announced that United Airlines will pull out of JFK, as the airline can’t get permanent slots. Here you have United desperately trying to expand at the airport, while American can’t even keep track of how many slots it has at the airport.
Second of all, I didn’t realize just how manual of a process it is for airlines to keep track of slots. Is this really how it works at most airports? Like, you’d think there would be some online portal that both the FAA and airlines can access, which shows exact number of slots, etc., rather than American having to manually add up slots post-merger. This sounds like a scavenger hunt for airplane paper tickets, rather than anything you’d expect in 2019 and beyond.
Lastly, how can American in good conscience have an expiration policy for American AAdvantage miles, when the airline can’t even keep track of its slots? People are supposed to keep track of their balance of a few thousand miles, when American can’t even keep track of a slot worth a lot more money than that?
Bottom line
While airport slots often change hands, it’s typically not because an airline simply forgot it had them, and as a result didn’t use them. But that’s exactly what happened post-merger at American Airlines and US Airways, as the “manual process” of accounting for slots was apparently too complicated.
What do you make of this revelation about American’s JFK slots?
(Tip of the hat to David Slotnick)
