October 10, 2008

US Federal Government Plans to Auction Flight Slots at New York Airports

The US federal government has outlined plans to auction flight slots at the three biggest New York area airports in a bid to ease congestion and stimulate competition, despite strong opposition from airlines and local lawmakers.

It is estimated that around two-thirds of the delays caused in the US originate due to congestion at these airports. One flight slot corresponds to one take-off or landing.

The federal administration's plan calls for the US Department of Transportation (DoT) to retire several slots at the New York-John F Kennedy, New York-LaGuardia and the Newark Liberty International Airport, and auction approximately 10% of the remaining slots over a five-year period.

Slots are awarded by the government free-of-cost to airlines, which regard them as assets. The DoT meanwhile contends that the slots are federal property. Airlines which have hubs and have invested heavily in the New York area airports are of the opinion that legal action may be necessary to stop the auctioning of slots.

The Port Authority of New York and New Jersey, which operates these three airports, has stated that it will seek an injunction from the United States Court of Appeals for the District of Columbia to obstruct the auctions. The US Government Accountability Office has also recommended the federal government against the auctions.

The DoT is planning to auction around 90 slots each at the JFK and Newark airports and 113 slots at LaGuardia in the next five years. Increased demand for intercontinental routes, combined with growth in the low-cost airlines has stretched capacity at these three airports.