U.S. airlines sue over plan to auction airport slots

WASHINGTON (Reuters) - Airlines sued the U.S. government on Monday in an attempt to overturn its plan to auction takeoff and landing slots at crowded airports in a bid to ease delays.

The lead trade organization for major carriers, the Air Transport Association, argued in its filing with the U.S. Court of Appeals for the District of Columbia that federal regulators had no authority to sell rights to operate fights.

James May, chief executive of the airline association, said policy makers were being "intellectually dishonest" and attempting an "end-run around Congress" by forcing market-based strategies on the cash-strapped industry.

The Transportation Department's Federal Aviation Administration plans to auction two landing slots -- or one round trip flight -- at New Jersey's Newark airport on September 3 in a test of its capacity management approach.

Officials would like to expand the program, depending on interest in the Newark auction.

Transportation Department officials could not immediately be reached for comment.

Regulators believe that forcing airlines to pay for coveted rights to operate at peak periods of the day at popular airports would result in more efficient operations, including the use of larger planes to reduce congestion.

Carriers in the past have been accused of overscheduling flights at crowded airports to capture as many passengers as possible during the busiest periods, often using smaller jets.

Regulators have already capped flights temporarily at Newark and New York's two big delay-plagued airports, LaGuardia and John F. Kennedy, but believe the added step of auctions would improve things more. They also believe auctions are the fairest way to introduce new competition.

Continental Airlines Inc, which operates a hub at Newark, has publicly opposed the auction. The two slots up for sale there became available when an overseas carrier, EOS, went bankrupt.

(Editing by Gerald E. McCormick)