FAA Opens Former Southwest Slots at Newark to Other Carriers
(Bloomberg) -- Federal regulators will award 16 prized flight slots at congested Newark Liberty International Airport that had been held by Southwest Airlines Co. to a single low-cost carrier to boost competition and reduce fares.
The FAA regulates the amount of traffic that is allowed to operate out of airports in busy air spaces like the New York and Washington, D.C. metropolitan areas by allotting flight “slots,” with each representing one takeoff or landing.
“Opening up more slots at Newark to lower cost carriers will provide air travelers with more choices and lower prices,” Deputy Transportation Secretary Polly Trottenberg said in a statement Thursday.
The decision was made in part due to a lawsuit filed against the government by Spirit Airlines Inc. The FAA had previously awarded the slots at Newark airport to Southwest as part of its approval of a merger between United Airlines Holdings Inc. and Continental Airlines. Southwest stopped operating flights out of Newark in 2019, and the FAA said it was not planning to award the slots to another low cost carrier, prompting Spirit Airlines to ask the U.S. Court of Appeals for the D.C. Circuit for a review.
JetBlue Airways Corp. said it will apply for the slots to expand operations at Newark, while ultra-discounter Allegiant Airlines said it won’t seek the flying rights. United, the dominant carrier at the New Jersey airport, Spirit and Frontier Airlines Inc. didn’t immediately comment. Southwest declined to comment.
The Department of Justice, meanwhile, applauded the move to open the slots. “Competition in the airline industry – and at Newark airport in particular – is in critically short supply,” the agency said on its website. It will work with the Department of Transportation “to address similar concerns at capacity-constrained airports” in order “to bring consumers more choices and lower prices.”
In a July letter to the DOT and FAA, United Chief Executive Officer Scott Kirby urged the agencies to temporarily reduce the number of hourly flights at Newark while runway construction is underway, and to actively enforce “peak-hour schedule caps and respect for historic schedules” as traffic rebuilds from the impact of the coronavirus pandemic. “This is the only way to avoid continued gridlock for customers,” he said. United accounted for 44% of Newark passenger traffic for the 12 months ended in May, according to DOT statistics.
Southwest made a “tactical decision” in July 2019 to move aircraft from poor-performing Newark and instead use them to expand in Hawaii and international markets with higher demand. It’s 20 daily departures from Newark were moved to New York’s LaGuardia Airport. Southwest, the largest discount carrier, had initiated flights from Newark in 2011.
The FAA monitors landing rights at John F. Kennedy International Airport, LaGuardia Airport, Ronald Reagan Washington National Airport, Chicago O’Hare International Airport, Los Angeles International Airport, Newark and San Francisco International Airport. The most stringent limits are imposed at JFK, LaGuardia, and Reagan National.
Also, Thursday, the FAA said it is extending a Covid-19 related waiver of the minimum slot usage requirement at JFK, LaGuardia and Reagan until March 26, 2022. Airlines that are awarded slots at airports where air traffic is monitored by the FAA are subject to a “use-or-lose” provision that requires a carrier to use allocated slots at least 80% of the time.
The Covid-19 related waiver of minimum slot usage requirements had been slated to expire Oct. 30, 2021.
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