People who value cheaptravel options, such as cheap airplane tickets, discounttravel deals, and cheap vacation packagesgenerally are of the opinion that competition is vital to keeping airfares low.
The U.S. Justice Department has announced that it is suingUnited Airlines to stop it from acquiring 24 takeoff and landing slots atNewark Liberty International Airport from Delta Air Lines.
35 million passengers fly into and out of Newark everyyear. The government is concerned thatairfares at Newark are among the highest in the country while Uniteds serviceat Newark ranks among the worst.
The Justice Department has come out against this salebecause it will reduce competition by removing Delta from Newark airport. The lawsuit claims that the acquisition wouldresult in higher fares and fewer choices for travelers.
United has responded saying it will vigorously defend ourability to operate effectively, efficiently and competitively at Newark and thatthis transaction benefits our customers and the region by enabling us toenhance service at our Newark hub and manage congestion at the airport.
In what was intended to be a simple swap, Delta acquiredUniteds slots at New Yorks John F. Kennedy International Airport and Unitedplanned on taking over Deltas slots at Newark, where United is investing $2billion to provide passengers with access to connecting flights, newrestaurants, and technology displays. United decided to cease its JFK service after seven successive years oflosses.
The Justice Department is not fighting Deltas agreement tolease slots from United at the JFK Airport. Delta commenced flights with its new JFK slots on November 1st.
United already controlled 73 percent of the slots at Newarkprior to its announcement that it was taking over Delta slots at thisairport. The Justice Department claimsthat United grounds as many as 83 slots each day at Newark, limiting flightopportunities.
Federal concern about monopoly behavior at Newark hasexisted since 2010 when United, the third largest airline in the world byrevenue, divested 36 of its slots to Southwest Airlines to gain approval of itsmerger with Continental Airlines.
Uniteds CEO Jeff Smisek resigned in September during afederal grand jury investigation into the carriers dealings with the agencythat manages airports in New York and New Jersey, including Newark.
United is investigating Smiseks dealing with former PortAuthority Chairman David Samson including Samsons votes on United Airlinesprojects at Newark Airport. The votestook place at the same time United restarted flights from Newark to Columbia,South Carolina, close to where Samson has a vacation home.
United commenced twice weekly direct flights from Newark toColumbia after Samson became chairman, only to cancel those flights days afterhe resigned last year.
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