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FAA Docket for November 10, 2015
Applications and Petitions:
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US v United Continental Holdings - Civil Antitrust Action to Enjoin Proposed Acquisition of EWR Slots
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United States v United Continental Holdings, Inc. and Delta Air Lines, Inc.
November 10, 2015
The United States of America, acting under the direction of the Attorney General of the United States, brings this civil antitrust action to enjoin the proposed acquisition of additional airport takeoff and landing slots at Newark Liberty International Airport by the dominant airline at that airport, United Continental Holdings, Inc.
United does not use all of the slots it controls at Newark. Each day, it “grounds” as many as 82 slots at Newark—more slots than any of its competitors have the option to fly. United’s failure to use the slots it already controls deprives Newark passengers of flight options that would exist if the slots were flown.
Yet United wants more. It is now attempting to acquire 24 slots from one of its largest competitors at Newark, Delta Air Lines, Inc. But with each additional slot it acquires, United reduces competition and forecloses entry or expansion of a rival that would otherwise use the slot to compete. In doing so, United strengthens an already formidable barrier to competition at Newark. In short, permitting United to acquire more slots would further entrench United’s dominance at Newark and foreclose competition that is already in critically short supply. As a result, passengers at Newark would face even higher fares and fewer choices.
On June 16, 2015, United and Delta entered into the transaction challenged here: a so-called “slot lease agreement” pursuant to which Delta would lease to United 22 Newark slots that are usable year-round, and two Newark slots that are usable during the March to October summer season, for $14 million. The lease is long term and automatically renewable and, despite FAA regulation prohibiting the sale of Newark slots, is intended to effectuate a permanent transfer of the slots to United. This slot lease agreement gives United control over these Newark slots.
Also on June 16, 2015, United and Delta entered into a separate slot lease agreement pursuant to which United leased to Delta 24 year-round, three summer, and three winter slots at JFK Airport (October to March), also for $14 million. The lease is long term and automatically renewable, and is intended to effectuate a permanent transfer of the slots to Delta. This slot lease agreement gives Delta control over these JFK slots. That transaction closed in June 2015.
Plaintiff, the United States of America, requests:
- That the proposed Newark slot lease agreement between United and Delta be adjudged to violate Sections 1 and 2 of the Sherman Act, 15 USC §§ 1 and 2;
- That Defendants be permanently enjoined from and restrained from carrying out the proposed acquisition or any similar acquisition that would result in United acquiring control of slots from Delta at Newark;
- That United be required to notify the Antitrust Division of the US Department of Justice at least 90 days in advance of any acquisition, lease, or agreement whereby United assumes long-term control of slots at Newark within the next five years;
By: Kathleen O'Neill, 202-307-2931
United Airlines Strengthens New York/New Jersey Hub with Move of p.s. Transcontinental Service to Newark - United Press Release - June 16
Motion of Port Authority of New York and New Jersey to Include United Press Release in Record - United v PANYNJ Case FAA-16-14-13
FAA-2015-0026 - United v PANYNJ
FAA-2008-0221 - Operating Limitations at EWR
FAA-2008-0517 - Congestion Management for JFK and EWR
FAA-2011-0248 - Orders Limiting Scheduled Operations for JFK, LGA and EWR
FAA-2012-1191 - Orders Limiting Scheduled Operations for JFK, LGA and EWR
FAA-2014-1073 - Slot Management and Transparency for LGA, JFK and EWR