Like it or not, auction slots are coming to the three metropolitan-area airports, the U.S. Department of Transportation told critics last week. But at the 11th hour, after a petition by opponents, the U.S. District Court of Appeals halted the plan.
With just over a month left in office, Bush administration officials were pushing ahead with an experiment to reduce flight delays around the nation — and it was set to begin at Kennedy International, LaGuardia and Newark Liberty International airports, where about two-thirds of delays begin.
The DOT met with about 80 airline executives and lawyers last Thursday to explain how it would determine the way in which take-off and landing slots are taken from current users and put up for auction. The following day, the agency held a seminar on the bidding process.
On Monday, however, the court ruled in favor of the Port Authority of New York and New Jersey, an opponent of the plan, and granted the agency’s request for a stay of the auction, which was scheduled to take place on Friday, Dec. 12.
“Petitioners have satisfied the stringent standards required for a stay pending court review,” the court said.
In a statement issued Monday evening, the PA, which operates the three airports, applauded the court’s decision to temporarily stop the auction, “which would invariably drive up ticket prices for passengers for the same service without alleviating delays.”
The PA has expressed opposition since the DOT and Federal Aviation Administration first proposed their plan to gradually auction off up to 10 percent of slots at the airports over the next five years.
The agency has garnered support from a variety of entities and officials, including airline companies, the Air Transport Association, Sens. Chuck Schumer and Hillary Clinton, Gov. David Paterson, New Jersey Gov. Jon Corzine and a slew of others in the aviation community.
The ATA, the trade group for commercial air carriers, filed a lawsuit earlier this year seeking to invalidate the auction plan. The PA joined the suit in September and vowed to block any planes using auction slots from arriving at its terminals.
The PA joined the suit after the FAA said it would stop the agency from receiving Air Improvement Program funds — which are used to enhance safety and security, and to increase capacity for more than 100 million passengers — in retaliation for its refusal to accept the auction proposal.
Recently, the Government Accountability Office released a finding indicating that the Bush administration does not have the legal authority to auction flight slots. Shortly after the release of that finding, the U.S. Justice Department found that the government does have such an authority.
But, on Monday the PA said it is confident that “upon full review, the court will agree that the administration does not have the authority to conduct an auction.” It added that it looks forward to working with the next administration to “develop real, long-term solutions to improve air travel.”
The DOT, however, insists that its plan will improve air travel. “Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service,” DOT Secretary Mary Peters said in October.
According to the administration, auctions are a way to use market principles to ration a limited commodity — the right to land in the New York area. Transportation officials, who claim the primary reason for flight delays is that airlines have overloaded New York runways with too many planes, said the auctions could raise as much as $150 million over five years.
The reserve prices for the 293 slots to be auctioned vary from $10,000 for peak hours to $100 for off-peak hours, according to published reports.
As explained in the auction plan, airlines operating at the three airports will receive a 10-year ownership of the majority of the slots they currently operate free of charge.
At LaGuardia, existing airlines would keep 988 of the 1,101 slots they operate. The remaining 113 slots would be made available for auction over the next five years to airlines interested in starting new service or expanding their operations.
Similarly, airlines at Kennedy would keep 1,035 of the 1,124 slots they operate and at Newark they’d keep 1,154 of the 1,245 slots. The remaining slots, 89 at Kennedy and 91 at Newark, would be up for auction.
In addition to slot auctions, the DOT plans to spend $89 million in runway improvements at Kennedy and reduce the number of hourly takeoffs and landings at LaGuardia from 75 to 71. That should cut flight delays there by 40 percent, according to the agency.
But the PA believes there are better ways to address airport efficiency. “Replacing a 1950s-era air traffic control system to increase capacity and meet passenger demand should be the hallmark of any program advanced by U.S. DOT and FAA,” agency officials said in July.
A comprehensive overhaul of the air traffic control system is one of 100 recommendations made in a December 2007 report by the Flight Delay Task Force, created by the PA last year to address capacity expansion, flight delay reduction and the improvement of customer services for delayed passengers.
According to the PA, investments in new technology will help increase capacity, unlike the auction system, which will only serve as an additional tax on passengers as it increases prices by an estimated 12 percent.
Auction winners were scheduled to be announced on Jan. 12, eight days before President George Bush leaves office, and changes were set to take effect at LaGuardia in March and at Kennedy and Newark in October.
But until the court removes the temporary stay, the administration will not be able to proceed with the auction, putting the plan’s opponents at some ease.