The U.S. Department of Justice has announced it filed a civil antitrust lawsuit with U.S. District Court for the District Court of New Jersey against United Continental Holdings and Delta Airlines to prevent unfair competition as United looks to expand business at the Newark Liberty International Airport.
The Justice Department believes that if such expansion is allowed, passengers who come to Newark will be faced with “higher fares and fewer choices.”
The business for the taking is significant, considering the Newark airport welcomes as much as 35 million air passengers every year. Moreover, the Justice Department acknowledges that United is already the dominant airline in the airport, as stated in its complaint. Furthermore, United is reportedly the airport’s “monopoly nonstop provider,” flying nonstop to 139 of 206 destinations from Newark. As of the moment, the airline is control of 902 of the 1,233 slots the FAA has allocated to all the airlines at the airport. That amounts to 73% slot control, ten times more slots than the next largest airline in Newark.
What United is seeking to do is secure 24 more takeoff and landing slots at Newark, which it is planning to acquire from Delta Air Lines, thereby also landing the said airliner in the Justice Department’s complaint. This inter-airline transaction was detailed in a “slot lease agreement” between the two airliners made last June 16. However, the complaint alleges that United does not use of all of the slots currently made available daily. In fact, the Justice Department says that United “grounds” as much as 82 of the slots it currently has in Newark. More importantly, the complaint alleges that giving United more slots will result in passengers not being able to take advantage of competitive airline prices.
In fact, from what the Justice Department has seen, the acquisition of slots by other airlines in Newark forced United to be competitive when it comes to ticket pricing, offering lower ticker prices and providing customers with better choices. United’s rivals in Newark currently include Virgin America, Jet Blue and Southwest Airlines.
It is the hope of the Justice Department that the lawsuit will stop United from acquiring more slots from Delta permanently.