FAA will offer Newark slots to low-cost airline, spurring competition for United

Sep 17, 2021

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The Federal Aviation Administration said it will award 16 slots at Newark Liberty International Airport (EWR), abandoned by Southwest, to a single low-cost carrier, part of an effort to boost competition in United’s East Coast hub.

Although Newark is not technically slot controlled, its flight schedules are still regulated — essentially putting takeoff and landing rights operate under a similar set-up. Governments use “slots” to regulate airspace at busy airports and avoid excess congestion, though only a handful of U.S. airports have schedules governed by slots.

In practice, an airline can attempt to control a market by seizing a majority of slots at a given airport, preventing other carriers from establishing a significant presence there. Competition is one factor that the federal government takes into consideration when awarding slots.

The decision to open the slots to a low-cost carrier is part of an effort to spur competition and lower prices for consumers, the Department of Transportation said in a filing, one of the first direct manifestations on the airline industry of the July executive order by President Joseph Biden promoting competition across a variety of sectors.

The Department of Justice issued a statement in support of the move.

“The Department of Justice applauds the Department of Transportation’s efforts to preserve competition from low-cost airlines at Newark airport,” acting assistant attorney general Richard Powers said in the statement. “Competition in the airline industry – and at Newark airport in particular – is in critically short supply.”

The proposed rule also stemmed from a lawsuit filed by Spirit Airlines.

Southwest was originally awarded the slots as part of the FAA’s approval of the 2013 merger between United and Continental, part of an effort to ensure competition remained at Newark at the time. Southwest, however, left Newark in 2019, consolidating its New York City-area at La Guardia Airport (LGA). Spirit filed the suit against the DOT requesting a review of the slots after the FAA initially indicated that it would not give the slots to a different low-cost carrier.

JetBlue has said it will apply for the slots in order to expand its Newark operation.

Featured image by Gary Hershorn/Getty Images

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