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U.S. shifts peak-hour flight approvals to Spirit Airlines at Newark

Stock Markets Jul 05, 2022 09:25PM ET
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2/2 © Reuters. FILE PHOTO: A Spirit airlines flight takes off from Logan Airport in Boston, Massachusetts, U.S., January 19, 2022. REUTERS/Brian Snyder/File Photo 2/2

By David Shepardson

WASHINGTON (Reuters) - The U.S. government on Tuesday reassigned 16 peak-hour runway timings at congested Newark Airport in New Jersey to Spirit Airlines (NYSE:SAVE) from Southwest Airlines (NYSE:LUV), saying this would boost competition and help reduce costs for travelers.

The move "secures low-cost service options for Newark customers and improves competition in the Newark market," the U.S. Transportation Department (USDOT) said.

USDOT said Spirit must report additional data on disruptions facing airline customers and its ability to provide them with accommodations, noting Spirit's "higher relative number of customer complaints" received by the department.

Southwest has operated the 16 timings since 2010 when it acquired them as part of a U.S. Justice Department competition remedy to United's merger with Continental.

JetBlue Airways (NASDAQ:JBLU), which is battling with Frontier in its quest to buy Spirit, sought all 16 timings while Alaska Airlines sought four.

Alaska said it was disappointed, arguing it is "uniquely positioned to offer reliable service with lower fares between the Northeast and the West Coast – directly competing with airlines with larger networks."

United is the dominant carrier at Newark operating 69% of flights and previously advocated for the timings being retired to reduce congestion. Last month, United said it would temporarily cut about 12% of daily departures from its Newark hub starting on July 1 to address congestion.

Southwest said in 2019 that it would pull out of Newark in favor of LaGuardia, and Spirit, a low-cost carrier, asked for 16 of the most desirable timings.

Spirit said it was pleased and will "continue to promote competition and offer affordable, high-value travel options for guests traveling in and out of the New York Metropolitan area."

Southwest and United declined to comment.

In 2019, the Federal Aviation Administration (FAA) said it would not replace all of those timings and added it would assess the impact of the reductions on operational issues at Newark, which has often had among the worst on-time performance of U.S. airports.

Spirit filed suit challenging the FAA decision and a U.S appeals court in 2021 vacated the decision and sent it back to the FAA to address the competition issue.

The Transportation Department and FAA said in September without the reassignment of the Newark flights to a low-cost carrier "it is highly unlikely that there will be any significant reduction in fares."

The department acknowledged new flights would lead to some additional delays but said "the benefits of lower fares significantly outweigh the impacts of additional delays."



U.S. shifts peak-hour flight approvals to Spirit Airlines at Newark

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