Slot Auctions Coming to JFK and EWR, too

[Matt Molnar]

Slot auctions coming to all 3 NYC-area airports
May 16, 2008, 11:03AM
© 2008 The Associated Press

WASHINGTON — Congressional and airline industry sources say the Transportation Department will announce slot auctions at John F. Kennedy International Airport in New York and Newark Liberty Airport in New Jersey.

The DOT last month announced similar proposals for New York's LaGuardia Airport that will require carriers to auction off some of their existing slots over the next five years and possibly retire others.

The airline industry's trade group opposes the moves and says the government lacks the legal authority to impose them.

[bonanzabucks]

Oh geez. Why don't they just nationalize the whole industry? They capped flights and that didn't seem to work, so what else are they after? Everything this administration seems to backfire. Utterly clueless.

[njgtr82]

Oh geez. Why don't they just nationalize the whole industry? They capped flights and that didn't seem to work, so what else are they after? Everything this administration seems to backfire. Utterly clueless.

The caps don't begin til June 1st. Still won't work though.

[bonanzabucks]

Here's the plan in greater detail:

http://www.forbes.com/feeds/ap/2008/05/ ... 19900.html

Under the latest proposals from DOT Secretary Mary Peters, all airlines operating at Newark and JFK would be given as many as 20 daily slots for the 10-year life of the rule.

Under one option at JFK, 10 percent of the airline's slots above the base amount would be made available via an auction and the proceeds would be invested in congestion and capacity improvements in the region. Or the airlines would auction 20 percent of slots above the baseline and keep all of the proceeds.

Depending on the option, up to 179 slots of the airport's 1,245 could be affected, Peters said.

The plan also calls for auctioning 10 percent of slots at Newark above the baseline annually for the first five years of the rule, making 96 slots out of 1,219 at the airport auctioned over the 10-year span.

Mary Peters later says that this plan will decrease fares by 30%. I can't see her logic and I'd like to see her analysis for that. Taking away already limited slots will create a scarcity and drive up prices. Auctioning off those already taken away to the highest bidder will only pass them on to the consumer. I don't see how fares will decrease, especially with fares going up and more likely to go up due to the price of oil. Smaller carriers won't be able to afford the slots. The established ones would be the only ones who could snatch them up again and there wouldn't be any new entries. No new competition. I think it would make things worse.

If they were really serious about reducing delays, they would invest in additional capacity and add incentives for carriers to fly in less busy times, like reducing the rates for slots. Even by capping flights, they probably should have capped it at a more realistic number -- in the high 80's to low 90's -- and whatever spare capacity that's generated in the future could be auctioned off. Auctioning off additional capacity is a good idea. They do that in Europe and it works fine there. But confiscating current slots and then selling them is just idiocy. I'm not even sure if that's legal. They only got away with it because they worked with the airlines to change their schedules and capacity wasn't affected. But I wonder what the legal implications of their current proposal are.

[bonanzabucks]

Oh geez. Why don't they just nationalize the whole industry? They capped flights and that didn't seem to work, so what else are they after? Everything this administration seems to backfire. Utterly clueless.

The caps don't begin til June 1st. Still won't work though.

JFK caps started in the middle of March. EWR caps were supposed to start sometime in May. Yes, I agree that they don't work.

Another thing, how will the new proposal affect Open Skies? Most of the European airlines want to fly into NY. if they have to give up some of their slots here, I think it's a safe bet that Open skies is over.

[Matt Molnar]

Mary Peters later says that this plan will decrease fares by 30%.

LOL.

[bonanzabucks]

It would be funny, but the the scary thing is she actually believes this. Where the hell do these people come from?

[bonanzabucks]

Continental says they're going to fight this proposal.

http://www.foxbusiness.com/story/market ... -proposal/

HOUSTON, May 16, 2008 /PRNewswire-FirstCall via COMTEX/ ----Continental Airlines (NYSE: CAL: 17.96, -0.68, -3.64%) today issued the following statement in response to the U.S. Department of Transportation's (DOT) announcement to implement slot auctions at John F. Kennedy and Newark Liberty Airports:

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. 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.

[moose135]

Breaking news...

FAA Suspends Auction of Flight Slot at Newark Airport
By John Hughes

Aug. 28 (Bloomberg) -- A U.S. auction for the right to operate a round-trip flight at New Jersey's Newark airport was suspended while regulators review airline complaints that the sale would be illegal.

"The protesters have demonstrated compelling reasons to maintain the status quo'' pending a study of their objections, Kerry Long, the Federal Aviation Administration's chief counsel, said in an order today in Washington.

The review is at least a temporary win for airlines and a setback for Transportation Secretary Mary Peters's plan to spur competition at New York-area airports, the most congested in the U.S. in 2007. The first auction had been set for Sept. 3.

[Matt Molnar]

Nice work announcing this right before the holiday weekend, and everyone is watching Barack, when no one is paying attention to you admitting you effed up. Yay government!

[bluejuice]

JetBlue also opposes this plan

[Ari707]

What if the airlines band together and just not buy any of the slots that are for sale???

[Matt Molnar]

What if the airlines band together and just not buy any of the slots that are for sale???

That would be an interesting move, too. I guess ATC could just reject flight plans and deny takeoff requests for flights that did not have slots assigned to them, and then the FAA would have to explain to angry passengers around the country why there were no flights at Newark during the morning or evening rush hour. They don't want that.

[njgtr82]

What if the airlines band together and just not buy any of the slots that are for sale???

then the FAA would have to explain to angry passengers around the country why there were no flights at Newark during the morning or evening rush hour. They don't want that.

Haha that would make my life easier. Even if they did auction off the slots, the Port wasn't gonna let whoever bought them use their gates. The FAA threatened funding but theres some politicians with quite a bit of power who backed the port and fought the FAA on this stupid plan.