United Releases Newark Airport Stranglehold

     NEWARK, N.J. (CN) – Bowing to pressure by federal authorities over antitrust concerns, United Airlines has abandoned its plans to further monopolize flights in and out of Newark Liberty International Airport.
     United had planned to purchase 24 additional take-off and landing authorizations, known as slots, from Delta Air Lines at New Jersey’s largest airport. The $14 million sale between the world’s two leading airline companies also included a lease of 30 slots from Delta in JFK International Airport.
     Responding with a federal complaint in November 2015, however, the Justice Department alleged that the purchase would “further entrench United’s dominance at Newark and foreclose competition that is already in critically short supply.”
     United is by far the largest airline out of Newark International, as its more than 900 slots represent 73 percent of the whole. No other airline controls more than 70 slots.
     Initially pledging to fight the lawsuit, United had said the two major airports over the bridge – JFK and LaGuardia – made the New York City/Newark area already “the most competitive air transportation market in the country.”
     Adding to the pressure, the Federal Aviation Administration, which has regulated airline slots at Newark International since 2008, announced plans earlier this month to lift slot controls at Newark International. That will allow for additional flights in and out of the airport, the FAA said, instead of allowing United to ground slots on any given day to keep competition down.
     United and Delta agreed on April 5 to terminate the $14 million transaction. In a statement the airline giant said it was “disappointed that the FAA’s decision may undo United’s significant efforts to minimize congestion-related passenger delays at Newark,” adding that the “already strained New York air space” may become even further crowded.
     Scuttling the deal was a win for the Justice Department. Assistant Attorney General Bill Baer said in a statement that the FAA action “opens up Newark to more robust competition and achieves the very outcome we sought in litigation: protecting consumers from United’s plan to enlarge its monopoly at Newark.”
     The FAA initially regulated airline slots at Newark International to manage air space congestion.
     Airline fares out of Newark are already among the highest in the country, according to federal statistics.

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