The elimination next fall of FAA-imposed departure and landing slot limits at Newark Liberty International Airport opens the door to additional competition at the United Airlines-dominated facility.
But aviation analysts say that it remains to be seen whether the change will lead to cheaper fares at what is on average the most expensive major airport to fly from in the U.S. A key to that, they say, is whether ultra-low-cost carriers Spirit and Frontier, neither of which currently fly from Newark, will begin operations there.
“The real question as far as disciplining prices is do you get somebody like Spirit that says ‘I want 24 slots and I want it at a certain time of day, and let’s make that happen,’” said analyst Bob Mann of R.W. Mann and Co.
The FAA announced on April 1 that effective Oct. 30 it will end the limit of 81 departures and landings per hour that it placed on Newark in 2008. The change, the agency said, is a result of better on-time performance at the airport, which improved by 11% between 2007 and 2015.
A primary reason that congestion has decreased at Newark is because United, which controls 73% of the airport’s daily allotment of 1,233 slots, leaves as many as 82 of them unused on a given day, according to the Department of Justice (DOJ), which last year filed an antitrust suit against the carrier in an effort to block a lease agreement United had made with Delta for 22 additional year-round slots. The carriers severed the deal, and the DOJ dropped the suit after the FAA ended Newark’s slot cap.
With its switch from what IATA labels as a Level 3 slot-controlled airport to a Level 2 schedule-facilitated airport, departures and landings won’t be unlimited at Newark come Oct. 30. Rather, carriers must apply for slot allocations for the specific hours they are seeking.
The FAA and the Port Authority of New York and New Jersey will then determine if there is sufficient air, runway and gate space to approve the request. How many additional flights ultimately enter the Newark market will depend on how willing airlines are to offer flights outside peak flight times, Mann said.
More competition at Newark would likely bring down prices. During the third quarter of last year, the most recent for which the DOT has statistics, the airport’s average domestic itinerary cost $479.
Slot limits at Newark have prevented low-cost carriers from both entering the market and beefing up service there. Meanwhile, a recent study by the website Hopper showed that legacy carriers United, American and Delta drop prices by an average of 20% when JetBlue, Frontier or Spirit enter a route.
“I’m extremely curious to see what steps, if any, the ultra-low-cost carriers take,” said analyst Henry Harteveldt of Atmosphere Research Group.
In response to inquiries from Travel Weekly, Spirit and Frontier were noncommittal about whether they’d seek a foothold in Newark. Frontier, said spokesman Jim Faulkner, is “reviewing the implications” of the FAA decision on slot limits.
But JetBlue and Alaska were more forthcoming in emailed statements: JetBlue said it looks forward to exploring its options at Newark, while an Alaska spokesperson said the airline is “taking a hard look at it.”
Southwest and American said they’re analyzing the situation.