WASHINGTON (CN) — Fighting a recent Federal Aviation Administration move favoring United Airlines, the ultra-low-cost Spirit Airlines warned the D.C. Circuit on Wednesday to block the creation of a monopoly at Newark Airport.
Spirit is seeking authorization to operate in 16 peak-hour slots at the New Jersey airport left empty by the low-fare carrier Southwest Airlines.
“The DOJ and other experts have long recognized the value of competition particularly from a low-cost carrier at an airport like Newark with a dominant monopolist,” Spirit Airlines attorney Aimee Brown said Wednesday.
The Justice Department’s Antitrust Division created the peak-hour authorizations in 2010 to preserve competition after United merged with Continental Airlines.
With Southwest no longer operating at Newark, Brown noted that United will hold 83% of peak hours, more than two-thirds of all flights out of the airport.
She urged the appeals court to consider that while airport authorizations are set very near the beginning of the scheduling season, airline tickets are often sold up to a year in advance.
“The reason that that’s even possible is because the airlines can rely on priority that they’ve received based on their previous schedules, which guarantees them those authorizations in these future seasons,” the attorney said.
Without peak-slot authorizations, Spirit stands to lose the cost of operating gates at Newark and reimbursing passengers if flights are canceled prior to takeoff.
As a result of the FAA opting not to reallocate the slots abandoned by Southwest, Brown said, “it’s this kind of safe harbor that Spirit is being denied.”
Calling the lawsuit premature, the FAA argued Wednesday that the notice to airlines about Spirit’s challenge was not a final agency action.
It was incumbent on airlines to submit their proposed schedules and run through the administrative process for the summer 2020 scheduling season, the Justice Department told the three-judge panel.
“The power of the sword of Damocles is not that it falls but that it hangs,” U.S. Circuit Judge Douglas H. Ginsburg said in response.
But Justice Department attorney Benjamin M. Shultz argued the authorizations at Newark create a “voluntary regime,” where airlines do not face fines or civil action if they operate flights without an assigned time slot.
Still, Ginsburg took issue with the FAA notice reminding carriers “that runway approval must be obtained from the FAA … prior to operating flights at the airport.”
Shultz dismissed the language as “inarticulately phrased,” saying there was no risk to Spirit unless the FAA transitioned Newark from a Level 2 to Level 3 designation, then requiring authorizations for runway takeoff.
“Well inarticulate phrasing can be fatal sometimes,” the Reagan appointee said.
U.S. Circuit Judge Justin Walker probed at the probability of the FAA transitioning Newark to Level 3 when air travel picks back up after the coronavirus pandemic ends.
The Justice Department was unable to provide the new Trump appointee, who joined the court for oral arguments for the first time Tuesday, any specifics on the likelihood of that scenario unfolding in the New Jersey airport.
Asked by the judge how long the FAA would need to change the airport’s designation, Shultz similarly could provide no firm answer. When the FAA shifted John F. Kennedy International Airport and LaGuardia Airport to Level 3, the process played out over the course of a few months, the attorney added.
Drawing on Judge Ginsburg’s earlier allusion, Brown, arguing for Spirit, said the sword of Damocles had already fallen on the airline as it has no certainty that it can operate at Newark in the future.
“The economic considerations made it impossible for Spirit to fly on an ad hoc basis when its flights could be canceled at any moment,” the airline’s attorney said.
U.S. Circuit Judge Karen L. Henderson, appointed by George H. W. Bush, joined her fellow Republican appointees on Wednesday’s panel.