United, Delta Seek to Have U.S. Suit Over N.J. Rights Tossed

  • U.S. sued airlines in November seeking to block deal
  • Airlines say government can't show deal would hurt competition

United Continental Holdings Inc. and Delta Air Lines Inc. asked a federal court to throw out a U.S. lawsuit over plans to swap takeoff-and-landing rights at New Jersey’s Newark Liberty International Airport, saying the government can’t prove the deal would restrict competition.

United’s plan to buy the rights from Atlanta-based Delta triggered a lawsuit by the government in November over claims that the deal threatened to increase fares. The suit is part of a broader push by Bill Baer, head of the Justice Department’s antitrust division, to increase enforcement in the airline industry after a decade of mergers. 

The government’s allegation of anti-competitive harm is based "entirely on speculation" and doesn’t prove that rivals would actually be hurt by the agreement, Chicago-based United said in court papers filed Tuesday. In its filing, Delta argues that the government’s claims conflict with the U.S. Federal Aviation Administration’s approach to slot management.

The relief the U.S. seeks “would require airlines like United to use all of the slots they have, all the time, for fear of running afoul,” of antitrust laws, Delta said in its filing in federal court in Newark.

United agreed to swap 24 slots at John F. Kennedy International Airport for 24 of Delta’s slots at Newark, according to court documents. Each paid the other $14 million. Both airports are subject to federal controls on takeoff and landing slots.

Government Guessing

The government “can only guess what United, Delta and any other airlines will do” once the transaction closes, United said in court papers.

The U.S. may “hope” to block United’s lease clearing the way for “some other airline,” the company said. However, it said, such hope is “legally insufficient” to state an antitrust claim.  

Mark Abueg, a Justice Department spokesman, declined to comment on the companies’ requests Wednesday.

United’s hub at Newark Liberty International is a gateway for overseas flights for the world’s second-biggest carrier.

The case is U.S. v. United Continental Holdings Inc., 15-cv-07992, U.S. District Court, District of New Jersey (Newark.)

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