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Wednesday, October 27, 2021

U.S. will award Newark flights to low-cost airlines to stimulate competition

WASHINGTON – The Biden administration announced on Thursday that it plans to award 16 slots at Newark International Airport in New Jersey to an undetermined low-cost airline and said it can take action to promote competition from other major airports.

The U.S. Department of Justice has urged the Department of Transportation not to suspend flight slots, but to use them to stimulate competition, and said it will work to “solve similar problems in capacity-constrained airports.”

“Low-cost airlines play an important role in maintaining the competitiveness of the aviation industry and controlling the enormous power of major airlines,” Richard Bowles, acting head of the Antitrust Division of the Justice Department, said in a statement.

The flight slots allowed to take off or land at a congested airport are owned by United Airlines and then transferred to Southwest Airlines before being abandoned. United Airlines once advocated that they should retire to reduce congestion.

United Airlines has a hub in Newark, Newark is the 15th busiest airport in the United States in terms of total passengers in 2020, and it flies 65% of all Newark flights. Granting flight slots to low-cost airlines means more competition for United Airlines.

“Opening more flight slots to low-cost airlines in Newark will provide air passengers with more choices and lower prices,” said Polly Trotenberg, Deputy Minister of Transportation.

JetBlue Airways Corp. said it will apply for these time slots.

United Airlines said it will continue to “review today’s preliminary decision.”

The Department of Transportation and the Federal Aviation Administration stated that if the Newark flight slots are not reallocated to a low-cost airline, “the possibility of a significant drop in fares is very small.”

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The department acknowledged that the new flights will cause some additional delays at congested airports, but stated that “the benefits of reduced fares greatly outweigh the effects of additional delays.”

The government will consider applications from low-cost airlines, but hopes to make a decision as soon as possible so that services can begin later this year as soon as possible. Before making a final decision, it will solicit public comments on its proposed decision.

Southwest Airlines obtained these flight slots in 2010 as a condition for the government to approve the merger of United Airlines and Continental Airlines. Southwest Airlines subsequently stated in July 2019 that it would withdraw from Newark and instead support LaGuardia, while the low-cost airline Spirit requested 16 optimal flight slots.

Spirit did not immediately comment. Spirit Airlines shares were flat on Thursday, while United Airlines shares rose 1.4%.

The notice cited a comprehensive order signed by President Joe Biden in July to stimulate competition in the U.S. economy.

In addition, the FAA announced that it will temporarily waive the minimum number of flights required by airlines to operate at New York’s Kennedy Airport and LaGuardia Airport and Ronald Reagan Washington National Airport until late March 2022. Greatly reduced the number of international flights. Without exemptions, airlines may lose at least 80% of their time not to use them in crowded airports.

Authors: David Shepardson and Diane Bartz

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This News Originally From – The Epoch Times

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