Earlier this year, Spirit Airlines went under, leaving many questions unanswered: Who would fill the void created by the ultra-low cost carrier? In most airports, it is simply a case of other airlines introducing flights and the market responding. It's a completely different procedure at slot-controlled airports, however, and the stakes are much greater.

LaGuardia Airport in New York City is one of only three U.S. airports, along with JFK and Ronald Reagan Washington National, that use a slot system to regulate the number of operations they can take off with specific departure and arrival times allocated to each carrier. Those slots were no longer available to anyone just because Spirit ceased flying. They were left idle, and then were transferred in an FAA-controlled system to see who would acquire them.

That's been won in a big way by JetBlue, which took over 12 of Spirit's LaGuardia slot pairs. What does that mean and why is it important?

The Scale of What JetBlue Just Acquired

12 slot pairs may seem like a technical number, but it is a very powerful one. Currently, JetBlue has 13 daily slots at LaGuardia, which is part of its New York footprint, but not much. With 12 additional slots, it's almost doubled that figure, moving the airport from a secondary position in JetBlue's network to something a whole lot more important.

The airline has announced these will not be available until next year and further regulatory clearances are required before the flights take off. That's enough time for JetBlue to make informed route assignments, rather than filling the slots with any available ones on the spur of the moment.

JetBlue has also expressed interest in taking over the Marine Air Terminal at LaGuardia, the airport's most architecturally interesting terminal, and the home of Spirit Airlines. The Marine Air Terminal, built in the 1930s in an art deco style that continues to draw attention, would provide JetBlue with its own home at LaGuardia, instead of sharing space or being underutilized, as is currently the case, in other areas of the airport.

For Some Reason, LaGuardia Slots are worth Fighting For

It's important to realize that this acquisition isn't just about how the deal works, but what it means for competition. The number of airlines that could realistically operate at the airport is limited, as the FAA sets the number of operations for the airport to help alleviate congestion in one of the busiest corridors in the world's airspace. Slots are not available for everyone to fly; slots are like any other resource, and they are limited and do not appear frequently.

The departure of Spirit has given one of the most unique chances in New York aviation. A significant portion of LaGuardia slots were becoming available outside of a typical competition. The slots are a years-long effort of New York-based JetBlue, which has been trying to establish itself at all three major Metro airports in New York.

What to Expect from Travelers

The exact frequencies and routes on which JetBlue will fly its new slots at LaGuardia have not been announced as yet, but some logical conclusions can be drawn from the context. Spirit had a widely dispersed point to point system that focused on the leisure and budget conscious markets such as the cities in Florida, Las Vegas, Cancun and vacation destinations. JetBlue is also active in many of those markets, and has a brand positioning that resonates with a slightly different but similar traveler.

Here are some brief highlights of the confirmed and the still developing:

• 12 pairs of Spirit Slots acquired, pending more FAA regulatory clearance prior to operations.
• Timeline: JetBlue has stated it doesn't plan to use the new slots until 2027.
• Terminal: JetBlue is bidding to succeed Spirit at LaGuardia at its home, the Marine Air Terminal.
• Current slots: 13 slots a day (this buy will double that).
• Routes: Not yet announced, but possible from former Spirit routes, as well as new markets served by JetBlue.

The more competitive the options are on price, schedule, and loyalty programs, the more likely travelers who currently use LaGuardia as their preferred New York airport whether for its proximity to Manhattan or the outer boroughs or a significant number of popular domestic routes will make the switch to JetBlue.

The Competitive Environment is Shifting

Both American and Delta have historically been dominant in the LaGuardia market, with both airlines having strong hub operations. The introduction of this competition, through Spirit's presence, had clearly had an impact on certain markets, causing prices there to rise predictably when Spirit left. The more successful expansion by JetBlue will not look like Spirit's ultra-low-cost approach, as JetBlue's positioning with more legroom, complimentary Wi-Fi and greater value for the economy class passenger will offer real competition on routes where it had all but vanished for a while.

As for TrueBlue loyalty members, it's better to have a bigger JetBlue schedule at LaGuardia because it will give them more points to earn and redeem, and with a carrier where it matters, it matters. In addition to the changes and enhancements JetBlue made to the program, it has become more flexible and rewarding than a few years ago, and the more routes offered from a convenient New York airport has made TrueBlue more convenient to participate in for JetBlue's loyal customers.

The Bigger Picture for New York Aviation

The three major airports of New York fulfill different functions in the functioning of the air travel market in the metropolitan area. JFK is the hub of most international flights and a large portion of high end domestic flights. Even though it operates only within the city limits, and has fewer flights and fewer connections to international destinations, LaGuardia is the most convenient airport for travellers residing in northern Manhattan, the Bronx and parts of Queens. The city of Newark across the Hudson River in New Jersey is the main base of United for the NYC metro area.

The expansion of the airline to LaGuardia comes as part of a larger plan that JetBlue has been following since its inception expand at the big airports in New York City, not just JFK where they have the deepest roots. It is a strategy that will be enhanced by a nearly doubled LaGuardia presence, which would normally take years of incremental slot acquisition via the normal competitive approach.

The Marine Air Terminal aspirations as well indicate something concerning the brand's plans. The move to a dedicated terminal which is architecturally significant rather than sharing with generic gate space is an investment in the passenger experience that extends beyond simply having more flights.

The Bottom Line

JetBlue has purchased 12 of Spirit Airlines' existing airport slots at New York LaGuardia Airport, subject to further approvals, that will be in operation by 2027. If the deal goes through, the airline will nearly double its current 13-slots at LaGuardia, making it a much more significant node in the airline's New York network. The airline is also looking into the former home of Spirit in the old Marine Air Terminal. 

Exactly which routes are being expanded has not yet been announced, but the addition will restore some competition to markets where Spirit had left, driving up fares and making them less competitive. More flights on LaGuardia means more options, more flexibility and more opportunity to collect and use loyalty points at a user-friendly New York airport for New York travelers and JetBlue TrueBlue members.