WASHINGTON A proposal by US Airways and Delta Air Lines to swap a large number of slots at New York and Washington airports hit a snag on Tuesday with U.S. antitrust officials raising questions about the deal's impact on competition.
The unexpected Justice Department development follows conditional approval of the proposal in July by transportation regulators, whose initial concerns prompted changes aimed at boosting competition at the two airports where access is government controlled due to congestion.
Neither airline was immediately available to comment on the proposal in the works since 2009. It would allow them to build on their already strong positions at airports popular with business travelers.
Under the plan, Delta would get 132 slot pairs -- the right to operate one takeoff and one landing -- at LaGuardia from US Airways; and US Airways would get 42 slot pairs at Reagan National from Delta as well as rights to operate additional daily service to Sao Paulo, Brazil, in 2015.
Delta would pay US Airways $66.5 million in cash.
The Transportation Department would require US Airways and Delta to divest eight pairs of daily slots at Reagan National and 16 pairs at LaGuardia, and complete the transaction in phases. The primary beneficiaries of divestiture would be low-cost carriers.
The Justice Department said in a statement it found no problems with the plan for LaGuardia where Delta has a strong presence. But it raised concerns about the proposal's impact in Washington where US Airways dominates and travelers pay some of the highest fares.
(Reporting by Jeremy Pelofsky and John Crawley; Editing by Tim Dobbyn; editing by Carol Bishopric)