REASSIGNMENT OF SCHEDULES AT NEWARK-LIBERTY INTERNATIONAL AIRPORT
October 6, 2021
The FAA has issued a Notice of Proposed Reassignment of Schedules at Newark Liberty International Airport (EWR), available here, requesting comments on its intention to reassign 16 peak-hour runway timings at EWR to a single Low Cost Carrier (LCC) or Ultra Low Cost Carrier (ULCC). This Notice is being issued as a result of the decision reached by the U.S. Court of Appeals for the D.C. Circuit, in Spirit Airlines Inc. v. DOT et. al., finding that the FAA’s initial decision to retire the 16 peak-hour runway timings lacked consideration of the competitive effects at EWR, and was therefore arbitrary and capricious.
As background, in 2019, Southwest decided to end its operations at EWR, in favor of LaGuardia (LGA), making 36 runway timings available for reallocation at EWR. While the FAA reallocated 20 of those times, it decided to retire the remaining 16 peak-hour times. The FAA found that retiring the 16 times would improve on-time performance at the airport, and allow for more efficient scheduling. In the D.C. Circuit’s decision, however, the Court recognized that Southwest was given the 36 runway times to ensure competition at EWR following the United/Continental merger. The Court found that the FAA’s decision to retire the 16 peak-hour times failed to properly consider the impact on competition EWR and likelihood that fares would increase without a strong competitor filling those peak-hour times. The Court remanded the case back to the FAA to fully assess the competitive effects of retiring the peak-hour times.
Following the FAA’s reevaluation of its initial decision, it reversed course, finding that the “benefits of lower fares significantly outweigh the impacts of additional delays” and that an LCC or ULCC would provide the greatest level of price discipline EWR. The FAA therefore intends to award the 16 peak-hour times to a LCC or ULCC, after evaluating the eligible carriers’ business model, record of providing effective competition, staying power in competitive markets, and their ability to provide competitive schedules.
In the last few days, DOT has received 26 public comments on the Notice from major carriers such as United, JetBlue, and Spirit, as well as groups like the New Jersey Chamber of Commerce, the City of Newark, and the Port Authority of New York and New Jersey. While some of these entities, including the Port Authority and JetBlue, issued comments in support of the Proposed Reassignment of Schedules, others chose to focus on related issues, such how the FAA should work to prevent congestion and delays at EWR before it take up the reassignment issue. A formal request for proposals will be issued following FAA’s review of the comments submitted on its Notice.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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