Thursday, October 28, 2021

US Newark Flights Awarded Low-Cost Carrier to Spur Competition

WASHINGTON – The Biden administration announced Thursday that it plans to offer 16 slots for flights at Newark International Airport in New Jersey and said it may take action to boost competition at other major airports. .

The US Justice Department, which urged the Department of Transportation not to retire the slots and use them to boost competition, said it would work “to address similar concerns at capacity-constrained airports”.

“Low-cost carriers play a vital role in keeping the airline industry competitive and retaining the immense power of the major airlines,” Richard Powers, acting chief of the Justice Department’s Antitrust Division, said in a statement.

The slots, which are allowed to take-off or land at congested airports, were first owned by United Airlines and then transferred to Southwest Airlines before being abandoned. United had called for his retirement to ease the crowd.

United has a hub in Newark, which is the 15th busiest US airport in 2020 by total passengers, and flies about 65 percent of all Newark flights. Giving a slot to a lower-cost carrier would mean more competition for United.

“Opening up more slots for low-cost carriers in Newark will give air travelers more choice and lower prices,” Deputy Transportation Secretary Polly Trottenberg said.

JetBlue Airways Corp said it would apply for the slot.

United said it was “continuing to review today’s preliminary decisions”.

The Department of Transportation and the Federal Aviation Administration said without the reassignment of the Newark slot to low-cost carriers “it is highly unlikely that there will be a significant reduction in fares.”

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The department acknowledged that the new flights would cause some additional delays at the congested airport, but said that “the benefits of the lower fares far outweigh the effects of the additional delays.”

The administration will consider applications from low-cost carriers for the slot, but wants to make a decision quickly so that service can start later this year as soon as possible. It will seek public opinion on its proposed decision before finalizing it.

Southwest acquired the slot in 2010 as a condition of government approval of United’s merger with Continental Airlines. Southwest later said in July 2019 that it would pull out of Newark in favor of LaGuardia, and low-cost carrier Spirit asked for 16 of the most desirable slots.

Spirit did not immediately comment. Spirit Airlines shares were flat on Thursday while United added 1.4 percent.

The notice cited President Joe Biden’s sweeping order signed in July to boost competition in the US economy.

Separately, the FAA announced that it would extend a temporary waiver of requirements that airlines operate a minimum number of flights at New York’s JFK and LaGuardia airports and Ronald Reagan Washington National Airport through the end of March 2022. In effect due to the coronavirus pandemic, the number of discount international flights has come down significantly. Airlines without the discount could lose slots at congested airports if they are not used at least 80 percent of the time.

by David Shepardson and Diane Bartz

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This News Originally From – The Epoch Times

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