June 21, 2013 Brazil Slots Awarded.
The DOT yesterday issued a “show cause” order detailing how the new Brazil slots for this year and next year are to be divided among the bidders. Here was my prediction.
DL gets JFK-GRU
AA gets LAX-GRU
AA gets ORD-GRU
US gets PHL-GRU
Those were my predictions. Here is what the show cause order says
We tentatively award the 14 unrestricted weekly combination frequencies that become available October 1, 2013 as follows: seven weekly frequencies to American Airlines, Inc. (American), for its proposed Los Angeles-Sao Paulo service; and seven weekly frequencies to Delta Air Lines, Inc. (Delta) for its proposed Atlanta-Sao Paulo service. We tentatively award the 14 unrestricted weekly combination frequencies that become available October 1, 2014 as follows: seven weekly frequencies to Delta for its proposed Detroit-Sao Paulo service; and seven weekly frequencies to US Airways, Inc. (US Airways) for its proposed Charlotte-Sao Paulo service.
I biffed it. I only got one out of the four correct, the LAX-GRU flight. This year DL gets ATL-GRU and next year US gets CLT-GRU and DL gets DTW-GRU.
The LAX-GRU service was the gimmie of the bunch, with no american carriers on the route the DOT was going to give American that one. The other two bids for the 2013 slots were from Delta from ATL and JFK. The DOT stating that Delta had made their preference known that they wanted the second ATL flight over the JFK flight; so the DOT awarded the ATL flight to Delta. I don’t agree with awarding the second flight to ATL since that only increases Delta’s strength and decreases competition in ATL. Oh well Delta was going to get the slot either way, so the DOT left it as carrier’s choice.
For the two 2014 flights I really don’t agree with the DOT here. The reasoning behind the decision was that both DTW-GRU and CLT-GRU were going to end. DTW was going to end because Delta sold US Airways the flight as part of the DCA/LGA slot swap several years ago, and that for CLT-GRU, United is going take back the frequencies at the end of the year. US Airways can take the slots that Delta sold them and use them to continue CLT-GRU. I never thought that DTW-GRU was a good option, but now that I know it was going to end without the award, the DOT acted properly. What this also means is despite the fact that I was wrong in my predictions I may still be right. US will have another flight they can use when they get the slots from Delta next year and they will undoubtedly start either PHL-GRU or ORD-GRU.
The big question here is what will United do with the extra flight to Brazil. They previously tried start LAX-GRU in the early 1990’s and it failed. Yet I get the feeling with the 787 they may try again. Also, United may try SFO and steal some Asian through traffic that has been going to Korean out of LAX. Who knows, but it will be fun to see what happens.