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UPDATE 1-American Airlines cuts flights from Reagan, LaGuardia airports

Wednesday, 15 Jan 2014 | 6:22 PM ET

WASHINGTON, Jan 15 (Reuters) - American Airlines will halt year-round, daily nonstop service to 17 cities from Washington's Reagan National Airport as a result of the divestiture of slots required by the U.S. government for American's merger with US Airways, the company said on Wednesday.

The airline, owned by American Airlines Group Inc, said it would also stop operating nonstop service from New York's LaGuardia Airport to Atlanta, Cleveland and Minneapolis, while adding new service from LaGuardia to 10 cities.

American Airlines Group, formed when US Airways Group and AMR Corp merged in December, agreed to give up 52 pairs of takeoff and landing rights, or 104 slots, at Reagan National, located just outside Washington, D.C., as well as other assets under the settlement of an antitrust lawsuit by the U.S. Justice Department seeking to block the combination.

The merger created the world's largest airline.

Last summer, Doug Parker, the U.S. Airways chief executive who became CEO of the combined company, told lawmakers that forcing the combined airline to surrender slots at Reagan National would risk fewer flights to small and medium-sized cities.

Among the 17 cities affected by the Reagan National changes are Augusta, Georgia; Jacksonville, North Carolina; Little Rock, Arkansas; Omaha, Nebraska; Pensacola, Florida; Fort Walton Beach, Florida; Islip, New York; Detroit; San Diego and Montreal.

The airline said affected customers would still have access to the Washington airport through connecting flights.

"Washington Reagan and LaGuardia will continue to be a key part of the new American's network," Andrew Nocella, American's senior vice president, said in a statement.

"We know how important this service is to the people and the communities affected, and we hope that our competitors who acquire our slots and gates will maintain service to the impacted cities," he said.

On Sunday, Reuters reported that airlines have submitted bids seeking to purchase the takeoff and landing rights at Reagan, citing two sources familiar with the matter.

An announcement about the sales of the slots could be made this week, the sources said, but they did not know how many airlines had submitted bids.

American said the effective dates for the changes at Reagan National will be announced after the sale is finalized in coming weeks.

American also was required to give up 17 slot pairs at LaGuardia, but it said the merger has allowed it to provide new service from the airport to 10 cities, including Little Rock, Louisville, Kentucky, and four destinations in Virginia, beginning April 1.