Newark runway rights to be granted to a budget airline to drive competition

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In an effort to drive competition and lower fares, the US Transportation Department (DOT) announced on September 16, 2021 that it would give runway rights for afternoon and evening flights in Newark Airport (EWR) to a low-cost or ultra low-cost airline.

“Opening up more slots at Newark to lower-cost carriers will provide air travelers with more choices and lower prices,” the Department of Transportation said in a press release.

“There are many benefits of competition, including lower fares, more throughput, and higher utilization of scarce assets. The benefits of lower fares significantly outweigh the impacts of additional delays.”

The Justice Department had urged transportation officials to not retire the 16 Newark slots and instead make them available in order to drive competition, and applauded the DOT on their decision to do so. 

United Airlines, which has a hub at Newark, flies about 65% of all Newark flights.

The takeoff and landing rights were previously used by Southwest Airlines (LUV) until 2019, when it decided to consolidate all its NYC-area operations from LaGuardia Airport. 

While United has not given any comment on the DOT’s recent decision, in 2019, it stressed the importance of keeping the runways of Newark as less congested as possible. 

Opening up the runways may be favorable to Spirit Airlines (S64) (SAVE) as the airline expressed interest in expanding its network to Newark. In early 2021, the airline won a federal court victory when it sued the Federal Aviation Administration after the FAA announced its plans to eliminate the runway slots. 

The DOT has not yet mentioned which airline will be awarded the landing runway rights.

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