In 2008, JetBlue, which commands about half of the traffic at Kennedy, spent nearly $750 million to open Terminal 5, its hometown hub. The building has won plaudits for its myriad of dining options and bright, cheerful public spaces.

Across the airport, Dallas-based American Airlines spent eight years and $1.3 billion to refashion and recreate Terminal 8, its mostly international hub at Kennedy Airport. Only fully opened in 2007, American is talking about a new project to expand and "co-locate" its Oneworld Alliance partners (primarily British Airways, but also Iberia of Spain, Cathay Pacific of Hong Kong, Qantas of Australia, Finnair, and Japan Airlines) into an expanded Terminal 8.

"People buy differently now, they make decisions on networks of flights," explains Art Torno, American Airlines' vice president for New York. "Having all of the Oneworld partners under one roof would be a game changer."

American also cut a deal in March with JetBlue to feed each other traffic at JFK. The deal helps American keep pace with Delta and Continental, which controls about half the traffic at Newark Airport. JetBlue gains by funneling some of American's arriving international passengers into its extensive domestic network of flights.

The current open wound at Kennedy belongs to Delta. Although it controls about 20 percent of JFK's traffic, it pushes them through two buildings at least 20 years past their useful lifespan. Terminal 2 was built in 1962 for the now-defunct Braniff and Northwest Airlines, which was merged into Delta last year. The round, iconic Terminal 3, still known as the Worldport by some New Yorkers, was built in 1960 by Pan Am.

"The JFK experience is not what we need to deliver," admits the diplomatic Grimmett. "It's the worst facility we operate," says the more blunt Ed Bastian, Delta's president.

A $1 billion renovation of Delta's facilities was announced almost a decade ago, but scuttled due to the travel slump after the 9/11 terrorist attacks and Delta's 2005 bankruptcy. But Delta and the Port Authority are expected to unwrap a new plan before the end of the summer. Best bet: an extension of the nine-year-old Terminal 4. More than half of the 95 destinations Delta serves from Kennedy are international, and Terminal 4 was specifically designed for overseas flights. Moving Delta into an expanded Terminal 4 seems like the fastest and most cost-effective option.

At LaGuardia, New York's real-estate-challenged domestic-flight nexus, American Airlines is the largest player with 18 percent of the market. Delta trails with about 15 percent, and it has made a bold attempt to bulk up. In a complicated "trade" that has run into stiff regulatory resistance from the Department of Transportation, Delta essentially wants to take over US Airways' LaGuardia terminal and assume most of its precious takeoff and landing positions. In exchange, US Airways would get most of Delta's facilities at Washington's Reagan National Airport.

The multifaceted war for New York is being fought on any number of other fronts too. Delta recently launched frequent daily flights between LaGuardia and Chicago's O'Hare Airport, one of American's primary hubs. Continental has continued to expand its international flights out of Newark, where it is largely protected by the peculiar traffic patterns of the metropolitan area. Continental also switched to the Star Alliance last year, which means it is now partners with Lufthansa, the German carrier that is a big player in the New York market and also owns a minority interest in JetBlue. American is trying to arrange antitrust immunity with British Airways and expanding its own domestic and international service into Kennedy Airport. After decades of restricting itself to a few flights from Islip, even Southwest Airlines jumped directly into the heart of the New York fray last year when it launched flights from LaGuardia.

"It's the richest aviation market in the world," says American's Torno, who was born and raised in New Jersey. "A large number of carriers have invested a lot of money to be here."

The Fine Print…

New York is less of a transit market than you'd think. Most of its passenger traffic is what the airline industry calls "point-to-point" or O&D, which means flyers originate in New York or make New York their final destination. JetBlue's Hayes says as much as 85 percent of his airline's New York traffic is point-to-point. American estimates 65 percent of its New York passengers are O&D. "New York," adds Delta's Grimmett, "is different than any other airline hub."