ATW Daily News

US DOT: New York slot auctions to begin in January

Friday October 10, 2008

The US Dept. of Transportation announced its intention yesterday to move forward with its controversial plan to conduct slot auctions at New York JFK, LaGuardia and Newark as part of an $89 million capacity improvement plan over vehement objections from airlines and airports that are challenging the legality of the action (see next item), and also said it will impose a new limit on hourly operations at LGA.

"The best way to cut record airline delays nationwide is to expand limited capacity at New York's airports. 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," Transportation Secretary Mary Peters said. The $89 million will fund a "series of taxiway improvements" at JFK through 2014, including adding two new taxiways, extension or improvement of six others and creation of "new high-speed exit taxiways."

Under the final rules released Thursday, airlines operating at JFK, LGA and EWR would receive 10-year ownership of a "vast majority" of the slots they currently operate. Of the remainder, 10% would be auctioned off by FAA over the next five years and others will be retired as the hourly operating cap at LGA is lowered to 71 slots from 75. The rule provides for 81 slots per hr. for scheduled operations at both JFK and EWR. Overall, existing carriers at LGA would keep a combined 988 slots with 113 set for auction. Airlines at JFK would keep 1,035 with 89 up for bid and carriers at EWR would keep 1,245 with 91 made available.

DOT General Counsel D.J. Gribbin, in a conference call with reporters, said the first tranche of slots will be auctioned by FAA on Jan. 12, comprising 18 at JFK, 18 at EWR and 22-23 at LGA. Airlines and DOT each will select half of the slots to be auctioned. He said the number being sold at any given time is "large enough for a new entrant who wants to begin service but not large enough to disrupt service."

"Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service," Peters said in defense of the rule. "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."

Gribbin said he anticipated a request for a stay from the Air Transport Assn. but that "groundwork" needed to conduct the Jan. 12 auction will continue. He also said he did not anticipate a potential Democratic administration taking over Jan. 20 to overhaul the plan, citing support for auctions offered during President Bill Clinton's tenure.

by Brian Straus

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