Justice Department to United Airlines: you cannot have a monopoly in Newark

The Justice League

The US Justice Department has sued to prevent United Airlines from acquiring an additional 24 flight slots at Newark Liberty international airport, in a move that could potentially endanger the airline’s expansion plans.

The lawsuit filed on Tuesday claims that both United and Delta, which currently owns the slots, violated US antitrust laws – Delta by attempting to sell the slots, and United by trying to buy them to “maintain and enhance its monopoly position at Newark”.

The slots in question are takeoff and landing authorizations issued by the Federal Aviation Administration.

“United has the lion’s share of the slots at Newark. There are 1,233 slots allocated at Newark. United holds 902 of them. That’s 73%,” said assistant attorney general Bill Baer. “United controls over 10 times more slots than its closest competitor. No other airline has more than 70 slots.”

United’s high number of slots is a result of its 2010 merger with Continental. After the merger, the new, larger United divested 36 of its combined slots at the New Jersey airport. If United were to reacquire these slots, Baer said, the airline would reduce competition and be able to drive up fares from the airport, one of three international hubs in the New York City area.

“There are 35 million air passengers who fly into and out of Newark every year. And we know that airfares at Newark are among the highest in the country, while United’s service at Newark ranks among the worst,” said Baer.

United Airlines said that acquisitions of the additional slots would benefit its customers.

“With three major airports, the New York/Newark area is the most competitive air transportation market in the country,” United said in a statement provided to the Guardian. “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.”

In September, United’s former CEO, Jeff Smisek, stepped down due to an ongoing investigation focused on its New Jersey operation. The investigation centers on the allegations that United reinstated money-losing flights to the airports near a weekend home of David Samson, a chairman of the Port Authority of New York and New Jersey, in exchange for improvements to Newark airport.

Powered by Guardian.co.ukThis article was written by Jana Kasperkevic in New York, for theguardian.com on Tuesday 10th November 2015 19.10 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010


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