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Southwest, Virgin America to buy LaGuardia slots: sources

By Karen Jacobs and Diane Bartz

ATLANTA/WASHINGTON (Reuters) - Southwest Airlines and Virgin American will buy the take-off and landing slots at New York's LaGuardia Airport that US Airways Group Inc and American Airlines must sell as part of their agreement to merge, three sources said on Wednesday.

Last month, US Airways and American agreed to divest 17 pairs of slots at LaGuardia, a busy airport with limited capacity, as well as certain other assets, as part of a settlement of an antitrust lawsuit by the U.S. Justice Department.

The sources, who asked not to be named to preserve business relationships, did not say how many of the 17 pairs of slots each airline would purchase. Terms of the sales are not known.

Southwest, US Airways and American declined to comment on the question of LaGuardia slot pairs. Virgin America did not return calls or email requesting comment.

In the deal made in November the two airlines also agreed to give up 52 pairs of takeoff and landing slots at Reagan National Airport, just outside Washington, D.C.

JetBlue has been expected to be interested in the slots at Reagan National that it is currently leasing from American.

US Airways and American announced in February that they planned to merge. The Justice Department sued to stop the deal, saying it would lead to higher fares. The sides settled on November 12 after the airlines agreed to a long list of divestitures.

In addition to slot sales, the airlines also agreed to give up gates at five key airports: Boston Logan International Airport, Chicago O'Hare International Airport, Dallas Love Field, Los Angeles International Airport and Miami International Airport.

The Justice Department argued that the slot and gate sales would give low cost competitors better access to some of the country's busiest airports. Analysts, however, said that a relatively small number of flights would be affected and any change would be incremental.

The Justice Department selects which airlines are eligible to buy the assets that the airlines must sell. It has said that the gates at the five airports will be transferred on "commercially reasonable terms: to the acquirers.

Large carriers Delta Air Lines and United were believed to have been excluded from the sale.

In a side agreement with the Department of Transportation, the airlines agreed to dedicate their commuter slots at Reagan National to medium, small and non-hub cities.

(Reporting by Diane Bartz, editing by Ros Krasny and David Gregorio)

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