US auction of airline-slots illegal

[Pieter C. 5]

US Auction Of Airline Slots Illegal - GAO

 

October 2, 2008

The Bush administration has no legal authority to auction coveted takeoff and landing rights at crowded New York-area airports to ease congestion and boost competition, congressional investigators said on Tuesday.

 

The Government Accountability Office (GAO) decision sent to members of Congress influential on aviation matters was enthusiastically backed by major US carriers, which have sued to block the market-based attempt to make them operate more efficiently.

 

International airlines also oppose the plan.

 

The decision left unclear whether the Transportation Department would back down since it has received a more favorable opinion of its plan from an independent review board within the Federal Aviation Administration (FAA).

 

The Transportation Department proposed earlier this year to sell access at busy airports, beginning with two vacant slots -- one round trip -- at New Jersey's Newark Airport in early September.

 

The matter was put on hold, pending the outcome of regulatory and legal reviews.

 

The agency wants to gauge the value of slots. If successful at Newark and broadened, the initiative could force carriers to return dozens of unused slots to be sold by the government.

 

Continental Airlines has a hub at Newark and other big carriers, including Delta Air Lines, American Airlines, US Airways and Northwest Airlines operate in the New York area.

 

Proponents believe forcing airlines to pay a premium for rights to operate at peak periods of the day at popular airports would result in more streamlined operations, including the use of larger planes to reduce congestion.

 

Regulators have also capped flights at New York-area airports at peak times.

 

Addressing chronic delays around New York has been a problem for years. More than a third of flights in the United States fly to or over New York airspace, the FAA says.

 

Gary Kepplinger, GAO general counsel, wrote that the "FAA lacks a legal basis to go forward" with the auction plan. He disagreed with regulators that they have titles and can sell them, saying a decades old policy governing property sales does not apply.

 

Carriers in the past have been accused of overscheduling flights at crowded airports to capture as many passengers as possible during the busiest periods, often using smaller jets.

 

Brian Turmail, a Transportation Department spokesman, said the GAO had little time to conduct its analysis and is relatively unfamiliar with aviation law.

 

"Should Congress give the agency an opportunity to conduct a more thorough review, we are confident that GAO will better understand both the validity and the effectiveness of our approach," Turmail said.

 

The Port Authority of New York and New Jersey, which operates the three big airports, supported the GAO finding.

 

(Reuters)

 

[Pieter C. 5]

US Escalates Fight With Airlines Over NY Airports

 

October 10, 2008

The Bush administration escalated a bitter fight with airlines on Thursday by pushing ahead with a plan to auction takeoff and landing rights at New York-area airports despite key congressional opposition and an industry threat to block the initiative in court.

 

The Transportation Department said it would start selling excess slots in January to ease congestion and delays and spur competition in the most lucrative US business travel market.

 

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

 

Federal transportation planners believe an orderly allocation of slots at New York's LaGuardia and John F. Kennedy airports and Newark airport in New Jersey would over time lead to more efficient operations by airlines and fewer delays.

 

For instance, the administration envisions carriers using bigger aircraft if they are forced to operate fewer flights. This, officials argue, would reduce the number of slots needed and free up others for new entrants.

 

A slot is equal to rights for one takeoff and one landing.

 

Continental Airlines has a hub at Newark and US Airways has major operations at LaGuardia while Delta Air Lines has invested heavily in JFK.

 

All three New York-area airports are notorious for congestion, which affects flights in other cities. A third of all US air traffic arrives, departs or flies over New York.

 

Nearly a quarter of all flights nationally arrived late in August, according to the latest government figures.

 

Airlines and government have for years said reducing congestion and delays are top priorities but they have not been able to agree on a common approach.

 

The new rules call for auctioning up to 10 percent of slots over the next five years. Transportation officials want to sell 18 slots each at Newark and JFK and 22 at LaGuardia in January.

 

Slots have, through the years, been awarded by the government at no cost to airlines, which consider them assets. However, the DOT considers them federal property.

 

The major US airlines say legal action will be necessary to stop the sale from going ahead.

 

"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 James May, chief executive of the Air Transport Association, a trade group for major airlines.

 

The GAO, the investigative arm of Congress, found last week that the administration did not have legal authority to conduct auctions.

 

(Reuters)

 

[Pieter C. 5]

US Court Halts New York Airport Slots Auction

 

December 9, 2008

A US Court of Appeals agreed to stay the auction of landing or takeoff slots that airlines are now awarded, the Port Authority of New York and New Jersey said on Monday.

 

"The Port Authority applauds today's decision halting the Bush Administration's 11th-hour plan to auction existing landing and take-off slots at the New York metropolitan airports to the highest bidder, which would invariably drive up ticket prices for passengers for the same service without alleviating delays," the agency said in a statement.

 

The US Court of Appeals for the District of Columbia issued the stay.

 

One of the Port Authority's most important economic pillars is its three major airports, according to Fitch Ratings, which on December 1 noted that gains in international travel are helping to make up for recession-driven declines in domestic flights.

 

But the Port Authority, which was joined by other airports around the nation, feared that the Bush administration plan to auction slots would threaten the vitality of its airports because airlines, if forced to pay up for slots, would switch to larger planes.

 

That means as many as 2,300 communities around the nation, whose airports are limited to smaller planes, could lose service. This might cost the Port Authority revenues, which also could happen if fewer people flew because airlines raised ticket prices to make up for the cost of the slots.

 

(Reuters)

 

US Court of Appeals stays New York slot auctions

 

Tuesday December 9, 2008

The US Court of Appeals for the District of Columbia Circuit yesterday granted the Port Authority of New York and New Jersey's motion requesting a stay of the slot auctions at New York JFK, LaGuardia and Newark airports that FAA scheduled to start next month.

 

"Petitioners have satisfied the stringent standards required for a stay pending court review," said the order issued by Judges Karen Henderson, Janice Rogers Brown and Brett Kavanaugh. "The FAA's planned slot auctions. . .are hereby stayed pending further order of the court".

 

The decision appears to place in jeopardy the Dept. of Transportation's effort to launch the auction process prior to the Jan. 20 transition in presidential administrations. The Air Transport Assn. and Continental Airlines also filed motions requesting a stay.

 

"We are pleased that the US Court of Appeals today recognized the irreparable harm that auctions would have caused passengers. The Court's ruling puts a firm halt to the Dept. of Transportation's ill-advised, illogical auction scheme," ATA President and CEO James May said. "This is a clear win for passengers, as the department was stopped from proceeding with an ideological experiment that would have resulted in higher fares, less service and a confiscation of airline property."

 

 

[Pieter C. 5]

US Seeks Voluntary Cuts To NY LaGuardia Flights

 

December 23, 2008

US aviation regulators are pressing airlines to voluntarily trim operations at congested New York LaGuardia airport, after a plan to auction takeoff and landing rights at three area airports was stayed by a court.

 

US Transportation Secretary Mary Peters said the Federal Aviation Administration was working with carriers to cut scheduled operations at LaGuardia, the most delay-prone US airport, to 71 operations per hour from 75.

 

LaGuardia ranked last among the 32 major US airports in arrival performance in 2007 and so far in 2008, with an on-time arrival rate just above 61 percent, Peters said.

 

The airport ranked 28th for on-time departure performance over the first 10 months of 2008. By lowering the hourly cap on operations to 71, the government says it could cut delays by up to 41 percent.

 

"Too many flyers know that LaGuardia's delays are the worst of the worst, and we want to use every tool at our disposal to help passengers stuck with this grueling congestion," Peters said in a statement.

 

Major operators at LaGuardia include Delta Air Lines, US Airways and American Airlines.

 

The plan to auction slots was stayed by the US Court of Appeals for the District of Columbia earlier this month, pending further court review.

 

The slot auction plan had drawn opposition from an airline industry group, some lawmakers and the Port Authority of New York and New Jersey, arguing the FAA lacked the legal authority to auction the slots.

 

The persistent problem of air delays caused by LaGuardia will soon pass to the administration of President-elect Barack Obama, who will be sworn in January 20.

 

The Bush administration gave the airlines and the public 10 days to comment on the voluntary plan, under which the lowered cap would take effect in April and last until October 24.

 

Transportation Department General Counsel D J Gribbin said that something had to be done now as the court was unlikely to decide the auction issue until after the peak summer travel season had passed.

 

"We've had strong support from at least one carrier to reduce operations into LaGuardia and interest from the others," Gribbin said, without identifying the airlines.

 

Peters said the government had already taken many actions to reduce congestion in and out of New York, from opening military airspace to redesigning airspace and other operational improvements.

 

But the Air Transport Association of America said it was concerned the FAA was not doing enough to cut delays in New York air space.

 

"We all want New York metropolitan airports to run more efficiently," ATA spokesman David Castelveter said in a statement.

 

(Reuters)

 

Wonder which airline that is....

 

[Pieter C. 5]

Airlines Ask US To Withdraw NY Airport Slot Sales

 

January 23, 2009

US airlines have asked the Obama administration to withdraw a government plan for boosting competition and reducing congestion by auctioning takeoff and landing rights at New York-area airports.

 

The chief lobbying group for the major carriers asked Transportation Secretary Ray LaHood to swiftly rescind last year's Bush administration initiative.

 

"As you noted at your confirmation hearing, auctioning slots does not make sense as a tool to address congestion," James May, chief executive of the Air Transport Association, said in a letter to LaHood dated January 22.

 

May urged LaHood to act before further litigation on the matter. Airlines sued to block the auctions on grounds the Federal Aviation Administration (FAA) lacked the authority to carry them out.

 

A US appeals court stayed the auction plan last month pending further court review.

 

The Bush administration had sought to sell up to 10 percent of rights for takeoffs and landings at LaGuardia and John F Kennedy airports in New York, and Newark in New Jersey, as a way to streamline operations and facilitate new service.

 

LaGuardia, Newark and JFK, all popular with business travellers, are among the worst airports in the United States for delays and congestion. Airlines tend to pack their schedules and run many flights with feeder aircraft, especially at LaGuardia.

 

The tie-ups add millions of dollars annually in industry operating costs, and tend to ripple across the country and affect flights in other cities.

 

US Airways, Delta Air Lines, Continental Airlines, American Airlines and United Airlines all have hubs or other operations at one or more of the three airports.

 

(Reuters)