FlyerTalk Forums - View Single Post - United forced to suspend JFK service due to expiration/lack of slots, end of Oct 2022
Old Sep 8, 2022 | 7:55 am
  #62  
EWR764
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Originally Posted by ralphs
If they really wanted slots, couldn't they just pay....more money to an existing slot owner?

I feel like the real headline should be that UA doesn't want to pay what the market will bear for some JFK slots.
I'm not certain there has been a market for JFK slots while the exemptions have been in place. The driver for slot transactions is the use-it-or-lose-it restriction. If an airline can't meet the usage threshold, it risks forfeiture, thereby creating a supply of slots the holding airline is better served converting to cash either in the short or long term. Since COVID, slot exemptions meant airlines could hold their slots without having to meet utilization requirements, and mostly all carriers have, in the hopes that rebounding traffic would generate greater returns than a distressed sale. The largest JFK slotholders (AA, B6, DL) had ready access to inexpensive capital throughout the pandemic, so there was really never a need to raise cash through selling assets like JFK slots by firesale during 2020. Nor have any of the incumbent carriers been willing (at all) to lease favorable slots to United to allow it to meaningfully re-enter the JFK transcon market with a vengeance... which Scott Kirby has signaled is one of his most important ambitions for the company. This all culminates in a low volume of slot transactions.

That's not to say availability of JFK slots is nonexistent, but not all times of day are favorable for economically-viable transcontinental flights, either. For example, late night departures usually are the weakest westbound transcon performers, while late morning arrival slots are not compatible with a reasonable eastbound departure time from the West Coast. The best-performing slot times, coincidentally, are the most in-demand and consequently least likely to be flipped, at least until usage restrictions are back in effect.
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