The FAA will award 16 daily landing and departure slots at Newark Liberty Airport's capacity-constrained Newark Liberty Airport (CMA) to a single low cost carrier (LCC), or an ultralow-cost carrier.
All operating authorizations would have been for peak-hour operations and were among the 36 slots Southwest lost when it stopped servicing Newark in 2019.
The FAA and DOT state in a notice that will be published in Federal Register that awarding these slots to a single discount carrier would foster competition with United, Newark's dominant carrier.
These 16 slots have a long history. They were among the 36 Newark slots United transferred in 2010 to Southwest. This was to allay competition concerns raised by the Justice Department when the carrier attempted to merge with Continental.
The FAA reallocated 20 slots to Southwest, but did not re-allocate 16 of the peak afternoon or evening slots. This was in response to congestion at Newark.
Spirit Airlines challenged the decision, and the U.S. Court of Appeals in Washington D.C. affirmed the decision. Circuit overturned the decision and questioned why the FAA prioritised modest improvements in airport operational efficiency over the consumer benefits of more direct competition on the market. According to the FAA/DOT notice, United held 66% Newark's slots in August 2019. According to an FAA analysis of the situation, reintroducing 16 slots would lead to delays at Newark increasing by an average 1.2 minutes per day. However, these increases would be greater during peak hours and shorter during off-peak times.
In light of the court's ruling and the Biden administration’s stated focus on fostering competition in the U.S., the DOT/FAA propose to allocate 16 slots to discount carriers, but only after the court decision. After publication in Federal Register, the DOT will allow public comment for seven days.
Related: Frontier launches 15 routes starting from Newark
The notice states that in airline transactions that involve constrained markets where market concentration is a concern, the department found the LCCs as well as ULCCs to have the greatest competitive effect upon entry due to their ability dramatically lower fares, and increase passenger numbers.
The FAA will solicit applications from low-cost domestic airlines in Newark for these slots. It hopes to select the winner in time for next winter's flying season. Newark is served by Allegiant and Alaska, Frontier, Spirit, Spirit, and JetBlue. Spirit has the largest operations, according to Bureau of Transportation Statistics data.
