The outcome of the fight over airport landing and takeoff slots in the USA speaks volumes about the future of government efforts to curb delays and congestion, and about the power of airports themselves. The fight centres on landing and takeoff slots at Newark Liberty, New York JFK and New York LaGuardia airports, and the federal government's plans to auction off some of these landing rights to the highest bidder, which would include the airlines that now use the landing slots.
These three airports handle about 109 million passengers and 2.7 million tonnes of cargo a year, but are disproportionately responsible for clogging the nation's airways. Since 1998, the number of flight delays and cancellations in the New York region has increased by about 111%, while the number of operations has increased about 57%, says Susan Fleming of the US Government Accountability Office.
Fleming says that in 2007, some 58% of all New York delays were attributable to the FAA's ability (or inability) to manage airspace or airport capacity. She adds that nationally this figure is about 28%.
The Big Apple's role in congestion has increased in recent years. JFK, once solely an international gateway, now has JetBlue based there, while Delta has made the airport the centre of its European growth.
At Newark Liberty, Continental has continued to build up a major hub that serves both the East Coast and Europe, and LaGuardia, while long subject to various forms of flight limits, remains the entrance to Manhattan for travellers from around the nation. About one-third of the aircraft in the national airspace system are in New York airspace on any given day.
So now, the US Department of Transportation and the FAA say that in January they will begin an auction process that both takes and gives: it reclaims about 10% of the slots that air carriers now hold and then auctions them off. Transportation Secretary Mary Peters says the auction winners would be announced on 12 January, eight days before President George W. Bush leaves office and President-elect Barack Obama is sworn in.
"Without slot auctions, a small number of airlines will profit while travellers bear the brunt of higher fares, fewer choices and deteriorating service," says Peters. The auctions could raise as much as $150 million over five years, says the DoT's general counsel DJ Gribben.
Opposition to the plan has been furious. IATA director general Giovanni Bisignani calls the slot auction "illegal and confiscatory", while Jim May, president of the Air Transport Association calls it "an ideological experiment". Bill DeCota, aviation director of the Port Authority of New York and New Jersey, the operator of the three airports, says he "just cannot operate my airports" with this scheme hanging over him.
Continental pilot Al Brandano, leader of ALPA's local union council in Newark, says: "We could see a loss of up to 10% of our flying from Newark." But the strongest opposition comes from Dave Barger, chief executive of JetBlue Airways, the new entrant that has exploited JFK.
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Dave Barger, chief executive JetBlue: "We'd have to bid for slots against international carriers with whom we cannot compete" |
He says the slot-auction plan "flies in the face of and threatens to erode everything JetBlue has strived to achieve" since it started. He adds: "We would have to bid for slots against international carriers with whom we cannot compete financially. Worst of all, this scheme has no rational nexus to the DoT's stated goal of reducing delays and congestion."
Peters says the proposed auctions will not only reduce delays but will increase competition and push down prices. Barger objects, noting that competition is alive and thriving at the airports and that JetBlue has already brought lower fares to at least one of them.
Peters says funds generated by the auctions will be used to reduce delays and enhance capacity at the airports. She says that when slots go to the highest bidder, they get their best use. By this reasoning, rather than a carrier flying a 50-seat jet to say Akron in Ohio, the airline would want to fly a large jet, such as a Boeing 757, to Seattle.
The question of aircraft size is very much at the core of the issue. Back in 2000, when the DoT lifted all landing limits at LaGuardia under a new FAA law dubbed AIR-21, the result was chaos. AIR-21's intent was to give more access to smaller cities and airlines, but the response went beyond predictions. The number of daily flights went from 1,064 to almost 1,400, many on 50-seat jets. The airport was simply unable to move all those aircraft on time. LaGuardia became the national shorthand for delay and congestion. Congress and the FAA quickly applied duct tape and instituted steps from a lottery to a cap.
The FAA also hastened its massive plan for a redesign of airspace throughout the Northeast region, a plan it finally introduced in September 2007. But even the airspace redesign was short of a permanent fix for the three airports, and the FAA has continued to grapple with a solution. The FAA also issued a new proposal that would allow airports to charge differential or peak hour pricing. This divided airports into the "for" camp and airlines into the "against" camp.
However, none of these proposals created the enmity, anger and passion that the slot-auction proposal has engendered. The auction proposal has a number of backers, among them George Donohue, a former FAA head of research who is now director of the Center for Air Transportation Systems Research at Northern Virginia's George Mason University. He says that auctions as part of a process that includes restrictions on aircraft size and could indeed be a major force in reducing delays. He notes that the US is the only major industrialised nation without slot controls as a common feature of its major airports, and that a regular slots auction would be a market-focused way of allocating the landing rights.
"There are perhaps 10 airports where you'd want to have slots and regular auctions. With auctions, the carriers would have an incentive to increase the size of their planes and with an increase of roughly 30 seats per flight and a cut in frequencies of perhaps 30% yo'd get closer to optimum use," says Donohue.
Leaving aside the constraints of economic reality such as who has the money to buy slots now, the proposal clearly threatens service to smaller communities. DeCota says at least 25 communities would lose most if not all air service if the slot auctions go ahead. New York State's two very vocal Democratic senators, Charles Schumer and Hillary Rodham Clinton, both say that Upstate's towns and cities are at risk.
Even the most ardent supporters of slot auctions agree that the real need and the long-term solution is not on the ground or at the airport but instead will come in the form of a new satellite-based air traffic control system. The FAA has been moving toward such a system for several years, but the main problem, more so than technological barriers, is the question of who will pay for the satellites, the ground aids and the equipment that aircraft will have to carry. Because Congress has been unable to agree on a measure to reauthorise longer-term FAA operations and instead has adopted a series of stop-gap short-term measures, the new ATC system has no dedicated source of funding.
So the two sides remain in gridlock and it is uncertain what the new US administration will do. But the concept is one that will not go away, regardless of the new administration's stance. Says Dorothy Robyn, a principal in consultants Brattle Group and a former economic adviser to President Clinton: "It's the kind of experiment we ought to be addressing. We ought to be trying something that establishes the market value of assets such as slots."
Source: Airline Business
