Talks between Southwest Airlines and the Transport Workers Union stalled over wages
Southwest Airlines Co. has agreed to pay $7.5 million for bankrupt ATA Airlines' landing slots at New York's LaGuardia Airport, a move that would raise Southwest's profile in the nation's largest air market.
Southwest would get 14 slots, enough to operate seven takeoffs and seven landings per day at LaGuardia.
The deal is dependent on approval by a U.S. bankruptcy court in Indianapolis, where ATA Airlines Inc. is based, according to an ATA court filing Tuesday.
If approved, Southwest expects to begin flying to LaGuardia next year, said Southwest spokeswoman Whitney Eichinger.
Dallas-based Southwest -- the nation's largest carrier by number of domestic passengers -- serves Islip Airport on Long Island but does not fly into LaGuardia, Kennedy or Newark, N.J., airports.
"If you truly want to be in the New York market, you need to be in one of those airports," Eichinger said.
The New York airports, however, are notorious for congestion. Southwest for many years has favored less-crowded secondary airports where it can service planes and get them back in the sky quickly.
Eichinger said serving LaGuardia "is going to be a challenge, but we wouldn't be doing this if we didn't think we could make it work." She noted that skeptics raised the same questions when Southwest began flying into Philadelphia a few years ago, a service that has been a success for the low-fare carrier.
Southwest did not bid for all of ATA's assets. Eichinger said the airline would not seek ATA's two slots at Washington's Reagan National airport.
ATA filed for bankruptcy protection and grounded its planes in April. ATA and Southwest had been marketing partners, selling seats on each other's flights, an arrangement that netted Southwest about $50 million in annual revenue.
In a bankruptcy court filing Tuesday, ATA lawyers said the company received two other bids for its assets, which also included ATA's operating certificate, its license to fly. But the unidentified other bidders dropped out, and ATA and Southwest officials met Nov. 10 in Dallas to negotiate a deal.
ATA said Southwest raised its bid while ATA agreed to drop the Reagan National slots from the package.