CORRECT: Senate Approves Plan To Add Flights At Reagan National

The U.S. Senate approved a measure Thursday, backed by major airlines, to loosen longstanding restrictions on nonstop flights between the West Coast and northern Virginia's Reagan National Airport.

The measure, approved by a voice vote, would allow such major airlines as US Airways Group Inc. (LCC), Delta Air Lines Inc. (DAL) and AMR Corp.'s (AMR) American Airlines to vie for new, potentially lucrative flights between Reagan National and such cities as San Francisco, Los Angeles and San Diego. The measure would add 16 round-trip, long-distance flights at Reagan National, to be apportioned at a later date, said an aide to a Republican senator who helped broker the deal.

The measure was attached to a bill to authorize the Federal Aviation Administration, which still requires a vote of the Senate and House. Resolving the Reagan National debate was viewed as the main obstacle to approval of the broader bill, which could happen later this week.

The amendment followed weeks of negotiations and an intense lobbying battle between US Airways and rival United Continental Holdings Inc.'s (UAL) United Airlines, which feared that new flights at Reagan could cut into United's business at Dulles International Airport, also in northern Virginia but 26 miles to the west.

United ultimately signed onto a deal drafted by Sens. Kay Bailey Hutchison (R., Texas) and Jay Rockefeller (D., W.Va.) to increase the number of flights that are allowed to destinations beyond a 1,250-mile perimeter around Reagan National.

The perimeter, established by Congress in the 1980s, was designed largely to ensure that nearby Dulles International Airport in northern Virginia would become the main destination for long-distance flights arriving near the nation's capital. Both airports are operated by the Metropolitan Washington Airports Authority under a long-term lease from the federal government.

Arizona-based US Airways, the No. 5 U.S. carrier by traffic and the dominant carrier at Reagan National, has led the charge for loosening the restrictions, a move that would permit lucrative new flights to the West Coast. No. 1 United, based in Chicago, has resisted loosening the restrictions because it wants to protect business at its hub at Dulles.

The airlines gave their approval to the Hutchison-Rockefeller proposal, airline representatives said.

Hutchison and Rockefeller overcame the resistance of lawmakers from states that could be directly affected by the change. They include Sen. Maria Cantwell (D., Wash.), whose state is home to Alaska Air Group Inc.'s (ALK) Alaska Airlines, and Sen. Mark Warner (D., Va.). Cantwell sought to ensure that smaller airlines such as Alaska Airlines have a fair shake at gaining any new offerings at Reagan National, and Warner had voiced concerns about the impact on jobs and the economy at Dulles were the Reagan National restrictions loosened.

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; [e-mail]