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 DOT Expands NYC Air Auction Plans Despite Mounting Opposition
OCTOBER 09, 2008 --
To the dismay of airlines, the U.S. Department of Transportation said it would proceed with its plan to auction some slots at the three major New York City-area airports, according to a final rule released today.
DOT and major airlines continue to butt heads on the issue, which has spurred an Air Transport Association-led lawsuit and a ruling by the U.S. Government Accountability Office, Congress' investigative arm, that DOT does not have the legal authority to auction slots (BTNonline, Oct. 6).
Despite the mounting opposition, DOT today defined final plans to gradually auction "up to 10 percent of the landing and takeoff slots these airlines currently operate free of charge today" at John F. Kennedy, LaGuardia and Newark airports. DOT said the rules call for airlines to maintain a 10-year ownership of "the vast majority of FAA slots they currently operate." The auctions would begin next year and continue through 2014.
At LaGuardia, the ruling calls for the capping of slots at 71 operations per hour, down from 75, with the aim to cut delays at the airport by 40 percent. Airlines would maintain control of 988 airport slots, while the remaining 113 "would be made available over the next five years by auction to airlines interested in starting new service or expanding current operations at the airport."
DOT called for similar actions at JFK, where it plans to auction 89 slots over five years, and at Newark, where 91 slots are slated for auction in that period. DOT said any airline could bid in the auctions to "have an opportunity to enter or expand current operations in the New York market."
"Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service," U.S. Transportation Secretary Mary Peters said in a statement today. "Slot auctions, meanwhile, will keep flights to New York affordable, available and vibrant while giving all airlines an opportunity to compete in one of the world's most popular aviation markets."
ATA, the major domestic airline lobbying organization, continued to deride DOT's plan, calling the auction ruling "ill-conceived and one that will result in a lengthy and costly legal challenge." ATA president and CEO James May today noted that the DOT ruling "patently defies the recommendation of the Government Accountability Office, as well as the will of Congress, by attempting to move forward with an illegal auction of airport slots."
Peters called the auctions a short-term measure to curb delays. Other measures include already-implemented flight caps at JFK and Newark, and today's new cap plan at LaGuardia. Though Peters noted studies that find airfares at capped airports can be up to 15 percent higher than those at "comparable airports without caps," she expects the auction plan to keep fares competitive in and out of the New York City-area airports.
Peters today said flight capacity expansion at JFK is the foundation of a longer-term plan to curb delays. DOT today announced the commitment of $89 million through 2016 to expand capacity at JFK, including the construction of two new taxiways and improvements to the six others at the airport. Peters expects construction to begin next year with a target for completion in 2014.
"The best way to cut record airline delays nationwide is to expand the limited capacity at New York's airport," Peters said. "Building new taxiways or adding new runways takes time, though, which is why we're also putting in place measures to cut delays and keep service vibrant over the short term."
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