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Delta announces big LaGuardia expansion

December 16, 2011 9:41:44 AM PST
Delta Air Lines Inc. is boosting its flying out of New York's LaGuardia airport, adding routes that target American Airlines and put it in a better position to compete against United.

Delta says the additions make it the biggest airline between the New York area and cities in the U.S. That should help it grab more business travelers.

The list of added cities reads like a map of the hubs of competing airlines. Delta is adding Miami and Dallas, both American Airlines hubs. It will also fly to Houston and Denver, which are both United hubs, and Charlotte, which is a hub for US Airways.

United and Continental's merger into the world's largest airline puts Delta in second-place by traffic. Expanding in a key business market like New York will help it compete against the larger United.

"It's about increasing Delta's overall appeal and utility to the high-yield business traveler," said Henry Harteveldt, a travel analyst at Forrester Research Inc. "Delta is going for scope of service, rather than always having the largest number of flights to a smaller network of cities."

Delta said it will spend $100 million to expand LaGuardia's C and D terminals, to be connected by a 600-foot bridge.

Delta obtained the new flying rights in a deal with US Airways Group Inc. Delta gave up some of its flying rights at Washington's Reagan airport, which US Airways wanted, in exchange for some of that airline's rights at LaGuardia, which Delta wanted. The exchange of flying rights happens in two batches, on March 25 and July 11, so the new flights will begin after that.

US Airways said it will announce its plans for expanded Washington flying in January.

Delta CEO Richard Anderson said the new flying at LaGuardia is being countered by its reduced flying in Washington. Delta has said it will cut overall flying by as much as 3 percent next year.

Shares of Atlanta-based Delta rose 46 cents, or 5.3 percent, to $9.05 in midday trading. Shares of United Continental Holdings Inc.

gained 74 cents, or 3.6 percent, to $21.38. US Airways Group Inc.

rose 42 cents, or 7.4 percent, to $6.13. Meanwhile, the broader trading averages were up less than 1 percent.

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