DOJ Sues To Stop United And Delta From Swapping Slots At NYC-Area Airports

When two major companies decide to get along, it’s not quite so simple as exchanging friendship bracelets — each side usually sees some benefit. For example, airlines United and Delta want to get friendly, so they’ve agreed to swap slots at two New York City-area airports. One hitch, however, is that the United States Department of Justice isn’t a fan of the plan.

The DOJ is suing to stop United and Delta from swapping spots, saying it’ll cut down on competition at Newark Liberty International Airport and drive up airfares for customers, reports USA Today.

United floated the idea of leaving John F. Kennedy International and giving its slots — the ones that allow an airline to take off and land at particularly busy airports — to Delta. In turn, Delta would fork over its spots at Newark to United, so each one could have a consolidated hub.

The Justice Department’s lawsuit says that if United gets ahold of more than 24 pairs of slots at Newark, it would further prevent other airlines from flying there.

“A slot is essentially a license to compete at Newark,” Assistant Attorney General Bill Baer said in filing the case. “United already holds most of them and as a result, competition at Newark is in critically short supply.”

The slots represent permission to take off or land during a half-hour period. Newark can handle a maximum 81 takeoffs or landings per hour, but the Federal Aviation Administration hasn’t allocated all possible slots at the airport.

As it stands now, United has control of 73% of slots at Newark, which is 902 of the 1,233 allocated. No other airline has more than 70 slots at Newark, the lawsuit contends.

“Yet United wants more,” the lawsuit said. “As a result, passengers at Newark would face even higher fares and fewer choices.”

United disagrees, saying there’s plenty of choice around the NYC area.

“With three major airports, the New York/Newark area is the most competitive air transportation market in the country,” said Rahsaan Johnson, a United spokesman. “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.”

Delta hasn’t issued a comment as of yet.

Our colleagues at Consumers Union, the public policy and advocacy arm of Consumer Reports, came out in support today of the action.

“This enforcement action highlights the harm that airline mergers and the increased market concentration are doing to consumers,” George Slover, senior policy counsel for Consumers Union. “This concentration makes it too easy for airlines to restrict consumer choice and jack up fares.”

DOJ seeks to block United and Delta deal for Newark access [USA Today]

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