United Airlines planes sit on the tarmac at San Francisco International Airport
Washington - AFP
The US government filed an antitrust lawsuit Tuesday seeking to block United Airlines's proposed acquisition of more slots at Newark Liberty airport in New Jersey, where it already dominates flights.
The Department of Justice alleges that United's planned purchase of 24 takeoff and landing slots at the airport from Delta would further squelch competition, making consumers more likely to face higher fares and fewer flight choices.
United already controls 73 percent of the total 1,233 slots in one of the key air transport hubs serving the greater New York City area.
"A slot is essentially a license to compete at Newark," said Assistant Attorney General Bill Baer, of the Justice Department’s Antitrust Division, in a statement.
"United already holds most of them, and as a result, competition at Newark is in critically short supply. United is already extracting a 'Newark premium,'" he said.
According to the Justice Department, airfares at Newark are among the highest in the country while United's service there ranks among the worst. About 35 million passengers fly into and out of the Newark airport every year.
The department said United holds more than 10 times more slots at Newark than its nearest competitor.
"Our lawsuit charges United with trying to maintain and enhance its monopoly position at Newark" in violation of the antitrust Sherman Act," Baer said in announcing the legal action, according to prepared remarks.
United Airlines said it would "vigorously defend" its plan to acquire the slots from Delta.
"With three major airports, the New York/Newark area is the most competitive air transportation market in the country," said United spokesman Rahsaan Johnson in an emailed statement to AFP.
"We firmly believe this transaction benefits our customers and the region by enabling us to enhance service at our Newark hub and manage congestion at the airport."
Shares in United plunged sharply after the Justice Department announcement, falling as low as $59.03, but pared losses by midday, trading up 0.1 percent at $60.19. Delta dropped 0.4 percent to $50.43.