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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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