HomeBusinessOops: The Funny Reason American Airlines Lost JFK Slots

Oops: The Funny Reason American Airlines Lost JFK Slots

American Airlines and JetBlue Airways are currently in court as their Northeast Alliance is being challenged by the Justice Department. On Friday, US 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 airports with the most slot restrictions. In order to fly to the airport, airlines must acquire take-off and landing slots, which is intended to control capacity at the airport.

This is one of the arguments put forward in favor of the American and JetBlue alliance – American has argued that it cannot compete in New York without the JetBlue agreement, because the airline cannot acquire more slots. That led to a fascinating revelation – a while back, American lost slots at JFK because it just forgot it had them.

In 2019, the United States Federal Aviation Administration (FAA) conducted an audit and found that American was underusing its slots at JFK. As a result, American had taken away seven slots. 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 removed because it forgot it had them, in the wake of its merger with US Airways. As Vasu Raja, Chief Commercial Officer of American Airlines, put it:

“Bookkeeping 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 reasons, it makes us completely ridiculous.”

Interestingly enough, at the time, both American and the FAA seemed to disagree on 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 eventually agreed that American could hold 210 slots.

JFK is a slot controlled airport

My thoughts on Americans losing JFK slots

Some thoughts on Americans losing JFK slots because executives forgot they had them…

First of all, you have to enjoy the irony of this happening in court on the same day that United Airlines was announced to be pulling out of JFK because the airline can’t get permanent slots. Here you have United desperately trying to expand at the airport while American can’t even keep up with how many slots it has at the airport.

Second, I didn’t realize how manual it is for airlines to keep track of slots. Is this really how it works at most airports? For example, you might think there would be an online portal that both the FAA and airlines can access that shows the exact number of slots, etc., instead of Americans having to manually add up slots after the merger. This sounds like a quest for paper plane tickets, rather than anything you’d expect in 2019 and beyond.

Finally, how can American have peace of mind with an expiration policy for US AAdvantage miles if the airline can’t even keep track of its slots? People are supposed to keep their balance for a few thousand miles when Americans can’t even keep a lock worth much more money than that?

American forgot it had slots on JFK

What it comes down to:

While slots at airports often change hands, it’s usually not because an airline simply forgot they had them and therefore didn’t use them. But that’s exactly what happened after the merger of American Airlines and US Airways, because the “manual process” of booking slots was apparently too complicated.

What do you think of this reveal about American’s JFK slots?

(Tip of the hat for David Slotnick)

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