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Dept. of Transportation: Airlines should auction off flight slots
Auctions are coming to the New York area -- but probably not the kind you'd want to attend.The Dept. of Transportation has announced that it plans to hold a series of "slot auctions" at Newark Liberty International Airport and John F. Kennedy International Airport. What are slot auctions? Slots amount to the number of planes that can either take off or land at an airport. An airport sells its slots to airlines, which then own a particular time, which they subsequently incorporate into their flight schedule. A Continental flight departing Newark at 4:40 p.m. is one such slot owned by Continental.
What the DOT wants to do is to give airlines a certain amount of slots at JFK or Newark -- 20 a day, according to the current proposal. The DOT then wants to force airlines to auction off a certain amount of their slots above that threshold. At Kennedy, the DOT is proposing that airlines make 10 percent of their slots above the benchmark available to auction, with the money going to improve congestion or to auction off 20 percent of their additional slots and keep the money for themselves. A similar proposal is afoot for Newark. In either case airlines can bid on their own slots.
What does all this mean? Admittedly, it's confusing. The Associated Press reported yesterday on the plan and other measures that DOT is proposing, all of which the Air Transport Association is fighting.
However, it comes down to this: The government is trying to make changes that will ultimately relieve congestion at the two airports that are pretty much the worst for on time arrivals and departures, while sponsoring a little more competition in these busy markets. Seems like passengers could stand to benefit from that.
Filed under: Airlines
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Reader Comments (Page 1 of 1)
Louis May 19th 2008 4:39PM
Actually, this is a poor idea. The airlines agreed to redistribute their flights at JFK and Newark to different times of the day and are now limited to 83 movements per hour. Caps have been in place at JFK since March and are set to start at Newark next month. La Guardia has been capped at 75 movements per hour for about forty years. Under that plan, any additional slots created due to technology or what not would be auctioned off to the highest bidder. So, auctions were already in place. They've been in place at some of the busiest European airports for years and that system has worked well there.
This latest proposal involves taking away the already limited slots and auctioning them off. Slots are the property of the airlines and they've invested heavily in airport infrastructure and passenger patronage. This new plan involves confiscating private property. The DOT is arguing that the slots are theirs and this will go to the courts. It also threatens the new Open Skies agreement which gives more US airlines and cities access to Heathrow airport in London only if European airlines get better access to the US. NYC is main destination European airlines want to fly to, so by limiting access here, the DOT is reneging on an agreement that they worked so hard to achieve.
Regardless, this new plan won't stimulate new competition and I fail to see how it can. Slots would go to the highest bidder, which only the major airlines would be able to afford, subsequently increasing their already strong footholds at the airports. Prices would not go down and most likely go up since these costs will be passed on to the consumer and airlines cannot afford to lower their prices anymore with record fuel costs. How can prices decrease anyways since demand has already been suppressed through the form of flight caps?
Furthermore, a lot of the statistics are misleading and false. JFK's delays aren't as bad as last year and it doesn't even rank in the top ten for departure delays. This is from Feb., before caps came into effect.
http://www.avoiddelays.com/worst-offenders/most-delayed-departure-airports.asp
http://www.avoiddelays.com/worst-offenders/most-delayed-arrival-airports.asp
According to the Port Authority's website, La Guardia's traffic has been declining for the last two years. Newark's has been stagnant (and this was before flight caps were imposed). Only JFK has seen growth due to a huge increase in European flights.
As well, JFK has four runways. Three of them can currently be used at the same time under the antiquated flight paths that they use now, which have been in place since the 1950's. Newark and La Guardia are limited because they have fewer runways, but JFK has room to grow.
The solution would be to improve air traffic control technology, which the FAA has failed to do for decades. They also need to redo traffic flows within the NYC airspace to allow for more efficient usage and to allow all four JFK runways to be in use at the same time. But in the long-run, this area needs more runways. La Guardia and Newark can't expand anymore, but JFK can add more runways in Jamaica Bay and to the east of the airport.