IATA warns DOT on NYC-area slot auctions
The International Air Transport Association warned the U.S. Department of Transportation Thursday that its decision to move forward with auctioning off several hundred slots at New York’s three largest airports will force the airline industry to sue.
“DOT has made it abundantly clear that it will ignore the nearly universal opposition to this (plan) by the international airline and airport community as well as the U.S. Congress. The U.S. Government Accountability Office has already concluded it is an illegal scheme. The industry is now forced to use the U.S. judicial system to get the government to accept its own advice,” said Giovanni Bisignani, director general and chief executive officer of IATA, the world’s largest airline industry association.
DOT Secretary Mary Peters announced the agency’s decision to move forward with the auctions Oct. 9 as part of a package of measures to increase capacity and competition at JFK, LaGuardia and Newark airports.
Under the new federal rules, airlines operating at the three airports will be given a 10-year title to 90 percent of the Federal Aviation Administration slots they now hold. Over the next five years, the remaining 10 percent of each airline’s current slots will be auctioned off to the highest bidder.
The new rules will see 89 slots at JFK, 113 slots at LaGuardia, and 91 slots at Newark auctioned off to new airlines or existing airlines wishing to expand.
The DOT argues that the auctions will stimulate competition and result in lower fares for consumers.
“Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service,” said DOT Secretary Mary Peters on Thursday.
IATA, which represents about 230 airlines worldwide, disagrees.
“The DOT is out of touch with reality. Substantially raising airline costs with an illegal scheme in the middle of a perfect storm of high oil prices and falling demand makes no sense. Consumers, airlines, airports and local communities all stand to lose from today’s decision,” Bisignani said.
IATA noted a request earlier this year from Congress to the GAO asking for a legal opinion on whether the FAA could auction off the slots at Newark.
In a decision released last month, the GAO concluded the FAA “lacks authority to auction arrival and departure slots, and thus also lacks authority to retain and use auction proceeds.”
The GAO said the FAA lacks a “lacks a legal basis to go forward with the Newark auction or any other auction.”
The DOT, which first broached the idea of slot auctions earlier this year said that the auctions could begin as early as Jan. 12.
The department's plan also includes nearly $90 million in runway improvements and the construction of high-speed egress taxiways.
Construction on the infrastructure portion of the plan is set to begin in 2009 and be completed in 2014. ' Keith Higginbotham
IATA warns DOT on NYC-area slot auctions
