U.S. escalates fight with airlines over NY airports

WASHINGTON Thu Oct 9, 2008 6:36pm EDT

Airplanes are parked at LaGuardia International Airport in New York April 15, 2007. REUTERS/Eric Thayer

Airplanes are parked at LaGuardia International Airport in New York April 15, 2007.

Credit: Reuters/Eric Thayer

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WASHINGTON (Reuters) - The Bush administration escalated a bitter fight with airlines on Thursday by pushing ahead with a plan to auction takeoff and landing rights at New York-area airports despite key congressional opposition and an industry threat to block the initiative in court.

The Transportation Department said it would start selling excess slots in January to ease congestion and delays and spur competition in the most lucrative U.S. business travel market.

"Without slot auctions, a small number of airlines will profit while travelers bear the brunt of higher fares, fewer choices and deteriorating service," Transportation Secretary Mary Peters said.

Federal transportation planners believe an orderly allocation of slots at New York's LaGuardia and John F. Kennedy airports and Newark airport in New Jersey would over time lead to more efficient operations by airlines and fewer delays.

For instance, the administration envisions carriers using bigger aircraft if they are forced to operate fewer flights. This, officials argue, would reduce the number of slots needed and free up others for new entrants.

A slot is equal to rights for one takeoff and one landing.

Continental Airlines Inc has a hub at Newark and US Airways Group has major operations at LaGuardia while Delta Air Lines has invested heavily in JFK.

All three New York-area airports are notorious for congestion, which affects flights in other cities. A third of all U.S. air traffic arrives, departs or flies over New York.

Nearly a quarter of all flights nationally arrived late in August, according to the latest government figures.

Airlines and government have for years said reducing congestion and delays are top priorities but they have not been able to agree on a common approach.

The new rules call for auctioning up to 10 percent of

slots over the next five years. Transportation officials want to sell 18 slots each at Newark and JFK and 22 at LaGuardia in January.

Slots have, through the years, been awarded by the government at no cost to airlines, which consider them assets. However, the DOT considers them federal property.

The major U.S. airlines say legal action will be necessary to stop the sale from going forward.

"The DOT decision patently defies the recommendation of the Government Accountability Office (GAO), as well as the will of Congress, by attempting to move forward with an illegal auction of airport slots," said James May, chief executive of the Air Transport Association, a trade group for major airlines.

The GAO, the investigative arm of Congress, found last week that the administration did not have legal authority to conduct auctions.

(Editing by Carol Bishopric)

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