United Airlines’ efforts to expand at Newark Liberty International (EWR) could be thwarted by a move by the federal government. The U.S. Department of Justice on Tuesday filed a lawsuit to block United’s effort to acquire 24 takeoff and landing slots at EWR.
“Today, United controls over 73 percent of the slots needed to fly in and out of Newark., said Assistant Attorney General Bill Baer in a conference call with reporters. “Our lawsuit charges United with trying to maintain and enhance its monopoly position at Newark, violating Section 2 of the Sherman Act. We are also charging United and Delta Air Lines, the seller of the slots, with violating Section 1 of the Sherman Act by entering into an agreement that restrains trade.”
Baer says the Justice Department has determined that allowing the slot deal to go through would “fortify United’s monopoly position and weaken the ability of other airlines to compete.”
“This lawsuit is necessary to protect those passengers from higher fares and fewer choices,” he says.
United holds 902 of the 1,233 slots allocated at EWR; no other airline has more than 70 slots. United inherited most of its Newark slots from Continental Airlines when the two merged in 2010. At the time, Continental had 894 and United held 36, and United agreed to divest all 36 of its slots to Southwest Airlines.
Recently, United has been trying to bolster its position at EWR. Two previous proposals, under which United would acquire slots from Southwest and American Airlines, were thwarted by the Justice Department. This latest proposed deal, the transfer of 24 slot positions from Delta to United, would push United’s slot share to roughly 75 percent and reduce Delta’s share to just 3 percent.
The Justice Department claims that United’s dominance has allowed it to raise fares, charging more for its EWR service than for comparable service out of other New York-area airports. The agency also says United is deliberately limiting service.
“They are sitting on the key asset needed to compete and trying to acquire more,” Baer says. “That is why we are charging United with unlawfully seeking to maintain a monopoly.”
United representatives could not be reached for comment at press time, but media reports cited a company spokesman saying the carrier would “vigorously defend” its case.
