Southwest Airlines (WN, Dallas Love Field) and the Delta Master Executive Council (MEC) of the Air Line Pilots Association (ALPA) asked the US Department of Transportation to impose conditions on the proposed immunised joint venture between Delta Air Lines (DL, Atlanta Hartsfield Jackson) and WestJet (WS, Calgary).

According to a DOT filing, Southwest Airlines is seeking to force WestJet to divest its eight daily slot pairs at New York La Guardia to "one or more US low-cost carriers".

In its filing, Southwest recalled the 2011 slot swap between Delta Air Lines and US Airways (Phoenix Sky Harbor) covering La Guardia and Washington National, which led to the doubling of Delta's market share at La Guardia. To offset the potentially anticompetitive effects of the transaction, the DOT then forced Delta to divest two eight-slot-pair bundles to independent low-cost carriers, of which one was acquired by WestJet. Southwest is now arguing that by allowing Delta and WestJet to establish a JV would effectively nullify the results of this divestiture as WestJet would cease to operate at La Guardia independently of Delta.

According to the ch-aviation capacities module, Delta Air Lines currently has a 43.6% market share by capacity and 46.4% by frequencies at La Guardia, while WestJet has 1.5% and 1.2% shares, respectively.

Although Southwest Airlines is the third-largest airline at La Guardia, it has just a 9.5% market share by capacity and 7.1% by frequencies. In terms of independent low-cost or hybrid carriers, the airport is also served by JetBlue Airways (B6, New York JFK), Spirit Airlines (NK, Fort Lauderdale International), and Frontier Airlines (F9, Denver International).

"La Guardia today has minimal LCC competition; DOT should not allow it to be further reduced," Southwest argued. The airline also pointed out that Delta has a 14% share of connecting passengers at La Guardia. According to Southwest, these passengers could be transported through other hubs rather than slot-constrained La Guardia, thus freeing up slots for point-to-point services.

In November 2019, Southwest Airlines consolidated its New York-metro ops at La Guardia, having ended services to New York Newark. It also operates from Islip on Long Island.

In turn, the pilots' union said that "while immunized alliances like the JV have the potential to grow both US carrier capacity and US aviation jobs, they can also be misused to effectively outsource US flying operations to foreign carriers." As such, it asked the DOT to impose a requirement to report on the "balance of flying, growth, and US aviation jobs" between the two airlines in the JV.

The carriers should have a "roughly equal balance of transborder flying and ... realize an equitable share of whatever growth is generated within the JV," the union added.

Such a requirement, according to the union, "imposes no material additional burden on the JV, but will substantially enhance transparency, ensuring that the Department and other interested parties have adequate notice of potential concerns".

The DOT imposed similar requirements on the Blue Skies joint venture between Delta, Virgin Atlantic, Air France, and KLM Royal Dutch Airlines. MEC said that the failure to impose such a requirement on the initial Delta-Virgin joint venture resulted in most of the growth on the transatlantic market outsourced to the British airline with relatively little benefits for US workers.

Finally, Alaska Airlines (AS, Seattle Tacoma International) in its filing squarely opposed the proposed JV and asked the DOT reject the partnership. The carrier argued that Delta was already seeking its tenth antitrust immunity and could "use [it] to exclude and marginalize competition from smaller and non-aligned carriers such as Alaska".

"A grant of ATI in this case would result in further concentration of US-Canada transborder market power in the hands of two immunized alliances that, between them, would have essentially exclusive access to Canadian-origin traffic," Alaska Airlines said.

Currently, Delta and WestJet have a combined market share of 26.6% by capacity between the US and Canada. United Airlines and Air Canada, which have antitrust immunity but not a joint venture, have a combined market share of 56.2% by capacity. Alaska Airlines has a 2.6% market share by capacity.