The Justice Department filed a suit against United Airlines on
Tuesday in an effort to block what federal authorities characterized as the
carrier’s attempt to monopolize departures and landings at Newark Airport.
Specifically, the suit asks the court to invalidate an
agreement that United entered into in June with Delta. Under the deal, Delta
would lease to United 22 year-round Newark takeoff and landing slots in
addition to two summer season slots, the suit says. In exchange, United would
lease Delta 24 year-round slots at Kennedy Airport as well as three summer
slots and three winter slots.
Slots, which are takeoff and landing authorizations issued
by the FAA, are precious in the New York City area, where regulators use them
to manage airport congestion.
The Justice Department is accusing United, which already
controls 73% of Newark’s 1,233 daily slots, of attempting to restrain
interstate trade and commerce in violation of federal antitrust laws.
“A slot is essentially a license to compete at Newark,”
Assistant Attorney General Bill Baer said in a prepared statement Tuesday.
“United already holds most of them, and as a result, competition at Newark is
in critically short supply. United is already extracting a ‘Newark premium.’ Airfares at Newark are among the highest in
the country while United’s service at Newark ranks among the worst.”
Due to its role in the proposed slot swap with United, Delta
is also named in the suit.
In a statement Tuesday, United defended its agreement with
Delta and said it would fight the Justice Department’s charges.
“With three major airports, the New York/Newark area is the
most competitive air transportation market in the country,” the carrier said.
“We firmly believe this transaction benefits our customers and the region by
enabling us to enhance service at our Newark hub and manage congestion at the
airport. We will vigorously defend our ability to operate effectively,
efficiently and competitively at Newark.”
According to the suit, United’s proposed Newark deal with Delta
is the continuance of an effort the airline began in the summer of 2014 to
acquire more landing slots at Newark.
According to the suit, the proposed deal with Delta is the
continuance of an effort United began in the summer of 2014 to acquire more
landing slots at Newark. The DOJ rejected United’s July 2014 proposal to acquire
36 slots from Southwest. Likewise, the DOJ rejected a United proposal in March
to provide 26 Kennedy slots to American in exchange for 18 of American’s slots
at Newark.
Delta, meanwhile, said that its agreements with United at Kennedy and Newark did not amount to a swap.
“Delta’s agreement to lease slots at Newark to United, the focus
of the Department of Justice lawsuit announced today, is an independent
transaction and does not affect Delta’s separate agreement to lease slots from
United at New York JFK Airport,” the carrier said in an email to Travel
Weekly. “Delta began flights with those slots on Nov. 1 and continues to
operate that expanded JFK service.”
The DOJ says that when United is faced with route
competition out of Newark, airfares go down. For example, when Southwest
introduced flights from Newark to St. Louis after obtaining slots in 2010,
fares on that route decreased 27 % year over year. Similarly, fares between
Newark and Houston dropped 15 % after Southwest began competing with United on
that route.
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This report was updated on Wednesday with comments from Delta.