US Airlines Play the Slots at NYC Area Airports

Newark Liberty Airport
(Image: panynj.org)

Remember a time when airlines competed against one another? Those days are increasingly becoming a chapter in commercial aviation history. The major US carriers -- United, American, Delta, Southwest -- are apparently pursuing a business strategy predicated on local dominance rather than robust competition. A case in point is Newark Liberty Airport, the closest New York area airport to my residence. United currently commands about seventy percent of the facility's arrivals and departures. That fact gives the airline considerable leverage in its consumer pricing. In contrast, United's LaGuardia-based service is typically cheaper than its Newark-based flights to the same destination. A lot cheaper, as I discovered (and used to my advantage) during my frequent flyer days.

Access and passenger-unfriendly pricing is hardly limited to New York. Hubs such as Atlanta foster de facto monopoly service and high rates. How can this business situation exist? Airport access is entirely controlled by the number of slots an airline can obtain. This tends to be a fixed number. According to a recent Bloomberg article, these slots are the currency between airlines that aim to obtain quasi-exclusive control of lucrative local markets. The recent Newark-JFK slot swap engineered by United and Delta is a case in point. Why the FAA permits these anti-competitive situations to fester is an interesting question.

Image: en.wikipedia.org

One suspects the United States is marching toward acceptance of the notion of controlled aviation markets, high prices, and effectively no competition. These three qualities precisely characterized the friendly skies prior to industry deregulation. One big difference between flight during the Mad Men epoch and today's House of Cards era is service. At least in a deregulated world, you didn't have to pay for a pillow, a blanket, or a meal. Then again, a traveler couldn't gamble on an airplane. Contemporary passengers can simply go online and play the slots.

Good luck beating the house, whether it's Las Vegas action or slot-fixed airline fares.