Industry Condemns NY Slot Auctions

In the wake of last week’s slot auction proposal for Kennedy and Newark Airports, airlines condemned the proposed rule as ill-conceived. The rule, which would auction slots at the airports, would also require airlines to increase reporting of how long passengers are delayed on the tarmac. To ensure that, in the long run, the caps don’t lead to less competition and higher airfares, sensible market mechanisms will be employed to distribute airport take-off and landing slots to encourage more efficient use of precious airspace, said DOT in announcing the slot auctions. Airlines have charged that DOT does not have the authority to impose slot auctions, something backed up by decisions at the dawn of deregulation in which Alfred Kahn, then Civil Aeronautics Board Chair who is known as the father of deregulation, said as much.
Initiatives by the Department of Transportation to reduce congestion at the three New York airports were topic number one during the recent Regional Airline Association meeting. “Layering more cost on airlines isn’t going to make them profitable,” said Chair Bryan Bedford, noting that auctions have been rejected worldwide as a solution to enhance capacity. “That will only raise prices that will reduce demand and ultimately reduce supply and therefore eliminate congestion. I hate being the guinea pig …when we haven’t seen it work successfully anywhere else on the planet.” Related Story
"Our members and their passengers are frustrated by the DOT's continued fixation on auctions, despite the overwhelming rejection by passengers, airlines and airports to such an experiment,” said ATA President and CEO James C. May. "These ill-conceived and unlawful proposals are driven by ideology and will not reduce congestion or flight delays. Instead of focusing on modernizing and expanding the airspace infrastructure as the traveling and shipping public expects, the government seeks to curb that demand by making it more costly to fly. We must work to expand, not limit, capacity. This experiment will penalize the public."
“The DOT proposal to auction off 10 percent, or approximately 95, of the slots at Newark over the next five years is an unlawful taking of property that Continental will vigorously oppose,” said the airline in a press release. “Moreover, auctioning slots will do nothing to ease congestion, but will raise the cost of air travel to consumers and act as an effective increase in taxes on an industry already known to bear an unreasonably high tax rate. Additionally, the proposal will result in reduced service to various communities and will create unnecessary market uncertainty at a time when the skyrocketing cost of oil and jet fuel has already created an extremely challenging environment for the industry. The auction proposal does not address the real need to modernize an outdated and inadequate air traffic control system to increase capacity and meet passenger demand.”