Despite a finding by the General Accountability Office that the Department of Transportation’s proposed slot auction is illegal, DOT is proceeding with plans to auction 293 slots at the New York airports, announcing it last week under cover of a plan committing almost $90 million over the next eight years to expand capacity at Kennedy Airport.
In a parting shot that becomes effective eight days before Bush Administration winds to a close, Secretary of Transportation Mary E. Peters unveiled final rules to auction a limited number of landing and take-off slots at each of the region’s three airports. Saying it is not bound by the GAO finding, General Counsel DJ Gribbin said at a DOT-called press conference the auctions would foster increased competition, lower congestion and lower fares.
The plans includes auctioning 113 slots at LaGuardia, 89 at Kennedy and 91 at Newark over the next five years with the first auction set for January 12. In addition, under the rule for JFK and Newark, existing airlines would keep 1,035 of the slots they currently operate at JFK Airport and 1,154 of the 1,245 slots they currently operate at Newark Airport. Under the final rules, airlines operating at JFK, Newark and LaGuardia would receive a 10-year ownership of the vast majority of FAA slots they currently operate. She added that the rules also would lower the hourly operating cap at LaGuardia airport from 75 slots per hour to 71 slots per hour by “retiring” an additional five percent of the slots currently being used, cutting delays by an estimated 40 percent.
The Air Transport Association of America (ATA) called the idea ill-conceived and one that will result in a lengthy and costly legal challenge, again pushing for action on the recommendations by the New York Aviation Rulemaking Committee to “implement fair and practical solutions to address delays and add needed new capacity, rather than needlessly forcing a costly and protracted legal challenge over an ideological experiment.” Also opposed to the auction plan are the Congressional delegations from New York and New Jersey as well as the Port of New York and New Jersey.
“The DOT decision patently defies the recommendation of the Government Accountability Office (GAO), as well as the will of Congress, by attempting to move forward with an illegal auction of airport slots,” said President and CEO James C. May. “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.”
The Secretary said that as a result of the auctions, all airlines would have an opportunity to enter or expand current operations in the New York market. She noted that additional competition like the kind the auctions would bring is proven to lower fares and improve service. She noted, for example, that fares declined by 25 percent at Philadelphia International Airport after a new airline entered that market in 2004. She added that when a new airline began serving JFK airport in 2000, fares fell to some destinations by as much as 50 percent.
“Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service,” the Secretary said. “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.”

Taxiway Construction at JFK
Under the Secretary’s plan, DOT will sign what is known as a Letter of Intent committing the federal government to invest $89 million between 2009 and 2016 to fund a series of taxiway improvements at JFK airport. The taxiway improvements include constructing two new taxiways, extending or improving six others and creating new high-speed exit taxiways. The JFK taxiway work will make it easier for aircraft to maneuver between gates and the airport’s runways, cutting travel time and limiting delays, the Secretary said. She added that the new high-speed exit taxiways will reduce inbound delays to aircraft arriving at JFK.
Atlanta built another type of efficiency project called an end-around taxiway to eliminate conflicting traffic increase safety and safe fuel. Related Story FAA studies say the Atlanta facility will result in a 30 percent improvement in overall runway efficiency and annual fuel savings between $26 million and $30 million.
“The goal is simple, find every possible way to safely add as much capacity as possible to some of the most popular airports in the country,” said Acting Federal Aviation Administrator Robert Sturgell. “Combined with dozens of other capacity improvements we’re making at the airport, this new investment will lead to more flights, fewer delays and a better traveling experience for countless flyers.”
Secretary Peters said that the construction work was expected to begin in 2009 and would be completed by 2014. She added that the department also was working with local airport officials to move forward on a range of other needed capacity projects, including additional taxiways and other airfield improvements.
She said that until the capacity improvements can come on line, DOT limited the number of flights that could operate in a given hour at JFK and Newark airports. Combined with existing caps at LaGuardia airport, the Secretary said that service at the airport was at risk of stagnating since other competitors are locked out of the market. She cautioned that studies have found airfares at capped airports run 11 to 15 percent higher than at comparable airports without caps.