On the Road: Airlines swap slots, hotels in financial trouble

By Joe Brancatelli

ROUTE MAP

Four Airlines Swap Slots on the East Coast: Thanks to a remarkable series of asset exchanges, several airlines are remaking the East Coast route map. In the big deal, Delta Air Lines and US Airways are trading slots at New York/LaGuardia and Washington/National Airport.

US Airways is giving Delta 125 pairs of slots and 11 gates at LaGuardia in exchange for 42 pairs of slots at National. Additionally, US Airways’ Air Shuttle will move to LaGuardia’s Marine Air Terminal while Delta’s Air Shuttle moves to the airport’s central terminals.

Delta says that it will turn LaGuardia into a hub and build a $40 million connector between the terminal that houses its existing LGA gates and the ones it is picking up from US Airways. At DCA, US Airways says that it will launch new flights to 15 cities.

Meanwhile, Continental Airlines and AirTran Airways have traded slots, too. AirTran is bailing on its Newark service and handing 10 slots over to Continental, already the largest player at Newark. In exchange, Continental will give AirTran six slots at LaGuardia and four at National. AirTran says that it will use the new slots to add LGA-Indianapolis nonstops and bulk up its Orlando flights from both LaGuardia and National.

HOTEL HOT SHEET

Hello, Room Service? Send Up Some Financial Relief! The executives who run the nation’s major hotel chains have been very good at ignoring hotel owners’ pain in the last 18 months or so. Their theory is that they are only the franchisers and it’s not their fault if too many foolish real estate types bought and built too many hotel buildings and became franchisees. But with one in three hotel properties estimated to be upside down on their mortgages and one in four on the verge of bankruptcy, this might be the month when hotel chains realize that franchisees are in deep distress. Here’s the roster of hotels that tanked in one form or another lately:

The year-old InterContinental Chicago O’Hare Airport and the iconic Radisson Los Angeles Airport both went into bankruptcy.
The downtown Sheraton Orlando faces a foreclosure sale after its owner could not exit bankruptcy.
The two-month-old, $65 million Hotel Monaco in Baltimore was hit with a $184,000 million mechanic’s lien and may face a public auction.
The Holiday Inn East at Louisville Airport in Kentucky says it will close its doors by the end of September.
The 51-room Lotus at Diamond Head in Honolulu (fka the W Waikiki and the Colony Surf) was sold at auction.
And the classiest hotel in Minneapolis, the Hotel Ivy, was placed in involuntary court-appointed receivership.