Breaking: US DOJ Blocks United from Acquiring Delta’s Newark Slots

Back in June, United announced that they were completely withdrawing from JFK and moving their p.s. transcontinental flights to Newark. As part of the move, United agreed to trade its JFK slots to Delta in exchange for Delta slots at EWR (pending regulatory approval). Well, it appears that there will be no approval, the US Department of Justice sued to stop the transfer today. Assistant US Attorney General Bill Baer had the following to say:

“There are 35 million air passengers who fly into and out of Newark every year. And we know that airfares at Newark are among the highest in the country while United’s service at Newark ranks among the worst. This transaction will reduce competition by removing from the hands of a competitor, in this case Delta, a scarce resource that it needs to compete with United at Newark.”

Meanwhile, United issued this statement:

“We will vigorously defend our ability to operate effectively, efficiently and competitively at Newark. This transaction benefits our customers and the region by enabling us to enhance service at our Newark hub and manage congestion at the airport.”

Delta began using the United JFK slots on November 1st. Going forward, it will add an extra daily flight to and from Los Angeles and use larger, two-aisle planes on three of its daily flights to San Francisco, said Delta spokesman Anthony Black. The United rejection at Newark should not jeopardize these spots:

“Delta’s agreement to lease slots at Newark to United, the focus of the Department of Justice lawsuit announced today, is an independent transaction and does not affect Delta’s separate agreement to lease slots from United at New York-JFK Airport.”

DLUA

Comments

  1. That is total B.S. DOJ needs to analyze the entire NY/NJ market not just EWR. There is plenty of competition in the NYC market and to say that swapping gates between two nearby airports will reduce competition is a complete joke. However, allowing the AA/US merger somehow increase competition….. Complete political decision.

  2. I fail to see how UA getting more slots at EWR is any less problematic than DL getting more slots at JFK in terms of levels of competition. Especially when you consider that the NYC market includes EWR, JFK, and LGA together in tandem with respect to fares.

    Singling out a single set of slots at one specific airport while not considering the impact of the net total of slots in the entire NYC market seems trivial and ill considered.

    Now if DOJ rejected the additional UA slots at EWR and simultaneously rejected the additional DL slots at JFK, that might make more sense–especially if those were awarded to non-legacy carriers like Virgin America, Southwest, Alaska, or JetBlue, all of which would increase competition and help to reduce fares on the domestic routes served.

  3. “I fail to see how UA getting more slots at EWR is any less problematic than DL getting more slots at JFK in terms of levels of competition.”

    Easy. UA dominates EWR (with minimal competition). JFK is scrapped over by AA, DL and B6 (all three airlines consider it a hub).

    Also, EWR is not just NYC, it’s really Manhattan + northwest New Jersey. So the market’s not identical to JFK.

  4. My parents consider EWR their home airport and they live in Northeastern Pennsylvania! EWR is the home airport to millions of people that can’t easily get to LGA or JFK.

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