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Saturday, April 13, 2024 | Back issues
Courthouse News Service Courthouse News Service

Feds Sue to Stop United Newark Airport Deal

(CN) - The Justice Department filed an antitrust lawsuit Tuesday, hoping to prevent United from increasing its commanding presence at Newark Liberty International Airport.

The move is designed to block United Continental Holding's acquisition of 24 takeoff and landing slots at the airport "in order to preserve competition," according to a U.S. Department of Justice press release.

The Federal Aviation Administration allocates takeoff and landing authorizations, or slots, to limit the number of flights that can service the airport during most hours of the day, the press release states.

In June, Delta Air Lines agreed to lease the 24 slots to United for $14 million, according to the Justice Department's lawsuit. For the same price, United would lease to Delta 30 slots at JFK Airport.

The federal government says the proposed transaction would bolster the Chicago-based airline's "already dominant position" at Newark and would likely lead to higher fares and fewer choices for travelers.

The Justice Department claims that United already controls 902 slots at Newark, while no other airline has more than 70.

"With each additional slot it acquires, United reduces competition and forecloses entry or expansion of a rival that would otherwise use the slot to compete," the government's lawsuit states. "In doing so, United strengthens an already formidable barrier to competition at Newark. In short, permitting United to acquire more slots would further entrench United's dominance at Newark and foreclose competition that is already in critically short supply."

About 35 million passengers fly in and out of Newark every year, according to the government.

Assistant Attorney General Bill Baer said in a conference call Tuesday that the proposed United-Delta deal "would fortify United's monopoly position and weaken the ability of other airlines to compete."

"We know from experience what happens when competition is allowed to flourish. This transaction will have the opposite effect. That is why we are seeking this injunction," Baer said.

In a statement provided to Courthouse News, United said it will fight the Justice Department's lawsuit.

"With three major airports, the New York/Newark area is the most competitive air transportation market in the country. 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," the statement reads.

The airline also said its use of Newark airport slots fully complies with FAA rules and allows United to "offer the frequent flights and destinations travelers want while minimizing airport congestion, especially on bad-weather days."

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