In an effort to increase competition and drive down airfares at Newark-Liberty International Airport (EWR) in New Jersey, which is also the third-largest hub for United Airlines. The United States Department of Transportation (DOT) will award a total of sixteen slots at the busy international airport to a single low-cost carrier.
These sixteen slots were previously held by Southwest Airlines, however, the carrier forfeited these slots when it recently closed down its operations at Newark Airport. The Texas-based airline has since moved its flight operations to LaGuardia Airport, which is closer in proximity to Manhattan and New York’s central business district.
Despite acknowledging the fact that assigning the slots to another airline will increase delays at the already congested Newark Airport, the U.S. Department of Transportation believes the availability of lower fares to the general public from the airport will outweigh the effects of delays. The U.S. DOT has also stated that only United States domestic low-cost and ultra-low-cost carriers are eligible for the slots
The DOT publicly stated that without the introduction of an additional low-cost carrier’s services to Newark, “it is highly unlikely the public will see a significant introduction of airfares.” The sixteen slots up for tender for low-cost carriers only are peak-afternoon travel slots stretching from 14.00 to 21.59 local time in New Jersey. According to the department, the slots were handed back to the control of the Department of Transportation when the previous slot holder, Southwest Airlines vacated Newark Airport, in favour of LaGuardia Airport back in 2019.
Southwest Airlines obtained the slots in 2016 from United Airlines, shortly after United Airlines merged with Continental Airlines. The slots were transferred over to Southwest Airlines in an effort to eliminate anti-competitive concerns as both United and Continental Airlines used Newark as a hub prior to the merger. Currently, United Airlines and its partners hold about 60% of slots in and out of Newark Airport with the remaining 40% held by a range of local and international carriers, none of which operate a significant number of services.
The successful bidder for the slots will be announced by the U.S. DOT later this year and hopes the airline which is successful in obtaining the slots will begin using them over the course of this winter. The awarding of the slots to a low-cost carrier comes following a July 9th order signed by U.S. President Joe Biden, calling for greater competitivity in the U.S. airline industry, particularly at major U.S. airports.
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Source: https://aeronewsx.com/u-s-low-cost-carriers-set-to-compete-for-newark-slots/
