In response to the introduction of legislation by Senator Charles Schumer (D-NY) – Access to Air Travel Act – which would block DOT’s controversial congestion pricing proposals for New York area airports, Regional Airline Association President Roger Cohen commended Senator Schumer for his leadership, noting that the proposed legislation is absolutely essential in preserving access to air travel at scores of small and medium-sized communities. DOT says the pricing proposals are necessary to eliminate slot hoarding by using regional jets to meet the current slot rule.
“By supporting this legislation, we take an important stand on fair access to air transportation,” said Cohen. “A full 70 percent of airports across America rely on regional airlines, exclusively, for scheduled air service. This bill is an important step towards protecting and preserving air service to hundreds of small and medium-sized communities across the nation.”
Democrats, during the hearing said increasing congestion resulted from Republican mismanagement. DOT responded to the legislation by alluding to Congressional failure to pass an FAA reauthorization bill. “Senator Schumer appears to be more interested in obstructing measures to cut delays than he is in modernizing the nation’s air traffic control system and managing chronic aviation congestion,” said the DOT in its response to the legislation. “It is tempting to imagine how much better air travel may have been last year had the Senator demonstrated the same enthusiasm 17 months ago for our proposal to improve the nation’s aviation network as he does now in supporting higher fares, poorer service and less competition.”


Slot Hoarding
Gribbin also charged airlines with anti-competitive behavior by “babysitting” underutilized slots. “One of the best-known problems with slots…is that they encourage airlines to underutilize the slot by flying multiple small aircraft into an airport to maximize the number of slots an airline can occupy at the lowest possible cost,” he said. “As a result, slots do not always go to those who value them the most and who will use the capacity in the most efficient manner. Granting slots without market-based mechanisms creates a system where incumbent airlines fight to maintain large shares of the airport traffic and to limit the ability of low-cost carriers to compete.”
Indeed, airline actions at Chicago seem to bear him out. Incumbent airlines was FAA to lift the use-it-or-lose-it rule at the airport, an effort to retain market share in the face of capacity cuts. The carriers also want the rule lifted at New York area airports and Washington National. American also wants the caps, which FAA announced it will lift at ORD, retained after a new runway opens in the fall. United and American, which control 80 percent of slots, want to block a bid by Virgin America to serve the airport. FAA could re-allocate slots temporarily at the airports, according to the carrier request, but they want to be able to reclaim them later. (See related story -- FAA Lifts Chicago Caps -- in this issue.)
Gribbon cited the 1996 DOT report Low Cost Airline Service Revolution, adding the report identifies slot hoarding as one of the key problems. “Federal regulations require airlines to use their slots at least 80 percent of the time in order to retain possession of them,” he noted. “However, by splitting up larger flights into smaller ones (“down-gauging”) or by setting up a rotating schedule, airlines have unnecessarily taken up more slots than they would require to competitively serve their customers. Slot hoarding prevents new entrants from taking available slots and increases airplane throughput without increasing passenger throughput, adding greatly to congestion. The report maintains that the high fares charged at these dominated airports create incentives for an airline to use anticompetitive measures to discourage new entrants.”
Under the DOT proposal for JFK and Newark, all airlines operating at Newark and JFK would be given up to 20 slots a day for the 10-year life of the rule. The proposal offers two options for JFK. Under the first, 10 percent of the airline’s slots above the 20-slot baseline would be made available via an auction. The revenue from those auctions would then be invested in congestion and capacity improvements in the region.
Under the second option for JFK, the airlines would auction 20 percent of slots above the 20-slot baseline and keep all of the proceeds. Depending on the option, between 91 and 179 slots at JFK would be affected out of 1,245 total slots at the airport.
The proposal also calls for auctioning 10 percent of slots at Newark Airport above the baseline annually for the first five years of the rule. As a result, only 96 slots out of a total of 1,219 slots at the airport would be auctioned over the 10-year span of the proposal.

Calling DOT’s market-based proposals “unconscionable,” RAA's Cohen highlighted the expected impact on small communities. “Damage from the DOT proposals would transcend the smallest communities and imperil service to larger markets like Dayton and Buffalo, Rochester and Birmingham, Syracuse, St. Louis, and many others.”
Senator Schumer voiced strong criticism of DOT plans, noting that the proposals would “in no way reduce congestion in New York’s airspace.” Instead, he said, “this plan could limit consumer choice and have a dire impact on service to small communities.”
Because smaller communities rely heavily on regional airline service for their access to the nation’s air transportation network, they stand to lose service under the DOT proposals, which favor larger aircraft. In fact, the stated purpose of DOT’s proposals is to encourage use of larger aircraft at congested airports; yet, many small communities cannot economically sustain service with larger aircraft. Thus, DOT’s proposal, which fails to add capacity or modernize the Air Traffic Control System, instead promises to disenfranchise passengers from small and medium-sized communities nationwide.
Cohen emphasized the importance of passing a comprehensive FAA Reauthorization bill this year. “The only way we address the root of this problem,” Cohen stated, “is to provide the FAA with the tools, resources, and oversight needed to expand and modernize the Air Traffic Control system.
In testimony before the House Committee on Transportation and Infrastructure, Air Transport Association denounced congestion pricing and slot auction proposals and urged DOT “to stop talking ideology and experiments, and start leaving a legacy that will help, not hurt, this country.”
"Instead of moving forward with capacity enhancements and airspace redesign using every available resource with all deliberate speed, the DOT is pushing congestion pricing and slot auctions - completely unproven textbook experiments that no one in the aviation world has used successfully," said ATA President and CEO James May. "DOT seems intent on leaving a legacy of failed, but extremely costly, experiments that do nothing to reduce congestion and flight delays in New York or anywhere else.”
ATA was joined by a broad coalition, including the Port Authority of New York and New Jersey, in opposing DOT proposals and reiterated its contention that congestion pricing and slot auctions are unlawful. It also called for the immediate implementation of all 77 capacity enhancements identified last year by the New York Aviation Rulemaking Committee (ARC).
The urgency for action, said ATA, is heightened not only by worsening congestion in the New York area, but also by the dire need to remove any unnecessary costs and regulatory burdens from the airline industry's plate. These capacity enhancements will make the system more efficient for everyone in part by reducing fuel burn and related fuel costs for the airlines which face approximately $10 billion in losses this year.
"DOT should devote all of the resources necessary right now to implement the New York airspace redesign and related initiatives," May said. "Work with the Port Authority and others to implement the near-term capacity enhancements identified last year by the New York ARC; work with the Department of Defense and Congress, if necessary, to open up new airways on a permanent basis; and accelerate development and implementation of technologies to bring us to the NextGen air traffic management system; and deploy Worldwide Scheduling Guidelines."

NextGen Rollout
During the hearing, Gribbin recounted government’s planned investment in NextGen Technology. “In recognition of these critical enhancements, the President’s FY 2009 Budget Request would more than triple the investment in NextGen technology – providing $688 million for key research and technology to help meet the nation’s rapidly growing demand for air travel, including the transformation from radar-based to satellite-based air traffic systems,” he said.
Initiatives set to roll out this summer include Automatic Dependent Surveillance-Broadcast (ADS-B) technology in Florida. “Over the next few years, the FAA will also install and test ADS-B for use in Air Traffic Control Separation Services,” he said. “The key sites for this initiative are Louisville, Philadelphia, the Gulf of Mexico, and Juneau. The FAA plans to commission the ADS-B services in September 2010 and complete a nationwide rollout by 2013.
He also pointed to the FAA’s choice of Miami as the key site for the installation and testing of Traffic Information Services – Broadcast (TIS-B) and Flight Information Services – Broadcast (FIS-B). “These broadcast services are the transmission of weather and traffic information to the cockpit of properly equipped aircraft,” he said. “In order to provide the services in roughly the southern half of the state, the contractor, ITT, will install and test 11 ground stations in this area, including five at airports including Lakeland Linder Regional, Dade-Collier, Florida Keys Marathon Airport, Boca Raton Airport, and Sebastian Municipal.”
The ITT-installed equipment is currently undergoing a Service Acceptance Test (SAT) which began in May. In November 2008, the agency expects to commission these broadcast services (TIS-B and FIS-B). Following the successful completion, the FAA can exercise an option in the ITT contract to deploy the services nationwide.
The FAA also recently completed stage 1 implementation of its Airspace Redesign Project for the New York, New Jersey, Philadelphia area, he reported, adding the goal is to enhance the efficiency and reliability of the airspace structure and the air-traffic control system. “The project modernizes the structure of the air traffic environment in an environmentally responsible manner, while laying the foundation for NextGen,” he said. “Moreover, it will help to accommodate growth while enhancing safety and reducing delays. While airspace redesign will provide greater efficiencies and some congestion relief, it is not a complete solution.”