DOT to press ahead with New York slot auctions

 - November 3, 2008, 6:29 AM

The Department of Transportation has announced it will press forward with plans to auction takeoff and landing slots at the three major New York-area airports, despite a GAO opinion that the department did not have the authority to do so. The announcement drew condemnation from the Air Transport Association, which called the idea ill-conceived and predicted that it would result in a costly legal battle.

“The DOT decision 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,” said ATA president and CEO James May. “Rather than needlessly forcing a costly and protracted legal challenge over an ideological experiment, the DOT should follow the recommendations made by the New York Aviation Rulemaking Committee and implement fair and practical solutions to address delays and add needed new capacity. The Secretary of Transportation’s own group of key stakeholders has proposed a clear set of solutions, while rejecting the idea of auctions. It is past time to act on those recommendations.”

Scheduled to take effect December 15, the plan “develops a robust secondary market by annually auctioning off a limited number of slots,” said a pair of separate FAA final rules, one pertaining to JFK and Newark Liberty International Airports, the other to La Guardia Airport.

Under the final rules, airlines operating at JFK, Newark and La Guardia would receive 10-year ownership of most of the FAA slots they currently operate, said Secretary of Transportation Mary Peters.

However, the new rules call for a gradual auctioning over the next five years of up to 10 percent of the landing and takeoff slots the airlines now operate free of charge. Peters added that the rules also would lower the hourly operating cap at La Guardia from 75 slots per hour to 71 slots per hour by “retiring” an additional 5 percent of the slots now in use, purportedly cutting delays by an estimated 40 percent.

Under the rule for La Guardia, existing airlines would keep 988 of the slots they now operate. The DOT would auction the remaining 113 slots over the next five years to airlines interested in starting new service or expanding current operations at the airport.

Under the rule for JFK and Newark, existing airlines would keep 1,035 of the slots they now operate at JFK Airport and 1,154 of the 1,245 slots they operate at Newark Airport. The DOT would auction the remaining 89 slots at JFK and 91 slots at Newark.

“Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service,” said Peters. “Slot auctions, meanwhile, will keep flights to New York affordable…while giving all airlines an opportunity to compete in one of the world’s most popular markets.”