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Delta Planning Domestic Hub at New Yorks LaGuardia Airport

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Delta Air Lines has reached a definitive agreement with US Airways to exchange certain flying rights and airport facilities at New York's LaGuardia and Washington's Reagan National airports, allowing Delta to expand its New York customer service and convenience by creating a domestic hub at LaGuardia Airport.

The agreement, which is subject to government approvals, calls for US Airways to transfer 125 operating slot pairs to Delta at LaGuardia and Delta to transfer 42 operating slot pairs to US Airways at Reagan National.

The airlines also will swap gates at LaGuardia between the Marine Air Terminal and US Airways' Terminal C to consolidate all Delta operations - including the Delta Shuttle - into an expanded main terminal facility with 11 additional gates for Delta customers.

"Delta continues to take innovative steps to adapt our business to the changing competitive and economic environment we face," said Delta Chief Executive Officer Richard Anderson. "Increasing Delta's service in the world's most competitive and largest air service market is a key part of our long-term strategy. This transaction will provide substantial benefits to our customers, employees and shareholders in years to come."

Delta expects to more than double the number of nonstop destinations it serves from LaGuardia by adding or preserving service to more than 30 small- and medium-sized communities.

 The airline plans to add new flights to more than a dozen cities not currently served by US Airways. In every slot where US Airways operates small turboprops today, Delta will operate larger jets.

 These new markets and larger aircraft would allow more than two million additional passengers to transit LaGuardia each year without increasing the total number of takeoffs and landings.

"Delta's investment at LaGuardia is good for customers because it provides new convenient service options and ensures continued access to many small communities that our competitors have not historically served," said Gail Grimmett, Delta's senior vice president - New York. "During the last 30 years, successful slot trades have helped foster a competitive environment for the airline industry. With this agreement, Delta will inject additional competition in the New York market. Many small- and medium-sized communities throughout upstate New York and New England will benefit from service upgrades where Delta will operate larger regional and mainline jets."

Once the transaction is approved, Delta plans to begin a nearly $40 million construction project at LaGuardia to connect the current Delta and US Airways main terminals; rebrand US Airways' existing main terminal gates, ticket counters and lounges to Delta's standards; and create a new dedicated check-in area for Medallion, First Class, BusinessElite and Shuttle customers. This facility transition is expected to be completed in 2010.

In addition to the improvements at LaGuardia, Delta will continue to invest at its hub at New York's leading international airport, John F. Kennedy International (JFK), and will continue to explore long-term options to upgrade terminal facilities.

Since making a strategic decision to build New York into a hub earlier this decade, Delta has made major investments across the tri-state region, boosting its economic impact to more than $13 billion annually.

Along with adding more than 30 new international routes at JFK, Delta has created more than 2,000 jobs across the state, invested heavily in New York sponsorships and advertising and completed more than $70 million in facility upgrades at JFK's Terminals 2 and 3.

As part of the transaction, Delta will also exchange a limited number of international route authorities to US Airways for service to Brazil and Japan. These transfers will not however result in any material schedule changes for Delta customers.

Delta also will continue to serve Washington's Reagan Airport with numerous daily frequencies to its seven hubs, hourly shuttle service to LaGuardia and flights to select small communities.

Both Delta and US Airways will submit the transaction for review by the U.S. Department of Justice, together with applications for approval by the Federal Aviation Administration and the U.S. Department of Transportation.

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