Where to buy jackpot slots?

How do airlines buy slots for millions of dollars and make money on their flights?

• I mean I see it in the news a lot, like how Jetblue bought DCA slots for what I think was tens of millions of dollars! Do they take out a loan specifically for slots and instances ...show more

• Answer:

  Like any industry, it's a risk and an investment. Some airports restrict the amount of flights that can arrive and depart on any given day. At DCA it's because of the close proximity to Washington DC. For security reasons, they limit the amount of flights in the area and route the flight paths around the principle buildings. Other airports restrict flights for noise control due to being surrounded by neighborhoods. These restrictions thus create the slot system which can be bought or sold to other airlines. DCA is a very lucrative airport due to the amount of business travelers who don't care how much the plane ticket costs because the tax payers are picking up the tab. For that reason, airlines don't mind paying big bucks for the slots. They have the cash so they don't need to take out a loan or anything. The profit comes from the ticket prices and again, since they know DCA is a very desirable airport, they can keep the prices at a level where they can recoup the investment. It probably takes a few years to make the money back but then they can really make money because they still keep the fares at the same level. Think of it like any business. You have to spend money to make money.