Showdown Approaching Between Agency, Port Authority of New York
And New Jersey
Things are coming to a head between the FAA and the Port
Authority of New York And New Jersey, over a controversial plan by
the Department of Transportation to auction slots at John F.
Kennedy International, LaGuardia and Newark Liberty International
The first such auction is scheduled to take place September 3.
The DOT will auction the two landing slots at Newark previously
allocated to EOS Airlines, which went bankrupt and folded its wings
earlier this year. That auction will test the DOT's theory to
implement similar slot auctions at all three airports, as a measure
towards combating ramp congestion and flight delays.
Predictably, airlines are fiercely opposed to that plan, saying
the government plans to step in where the free market system should
reign. Those airlines -- represented by the Air Transport
Association -- have a powerful ally in the Port Authority, which
boldly confronted DOT earlier this month... saying the airports
under its authority would refuse to accept any flights using slots
acquired via auctions.
On Tuesday, the Federal Aviation Administration initiated an
administrative proceeding, known as a notice of investigation, to
determine whether PANYNJ would violate federal regulations if it
makes good on the threatened ban.
Under law, airports receiving federal grants are required to
provide airlines with reasonable and nondiscriminatory access to
their facilities. As part of its investigation, the FAA will
evaluate whether the Port Authority’s
August 4 proposal is unlawfully interfering
with the airlines’ ability to access takeoff and landing
slots at the airports by discouraging bidders from participating in
If the proposal by the Port Authority is in fact discouraging
open access to the airports, the Port Authority may no longer be
eligible for FAA grants, or payments under existing grants, until
the matter is resolved. The FAA could also issue an immediate cease
and desist order requiring the Port Authority to grant access to
the airports. The three airports received a total of $27 million in
grants from the FAA’s Airport Improvement Program during
fiscal year 2008.
In addition to the upcoming Newark auction, DOT also announced
two proposed rulemakings in April and May of this year that, if
finalized, would auction a limited number of takeoff and landing
slots at JFK, Newark and LaGuardia Airports.
DOT maintains the slot auctions are necessary to ensure that all
airlines have an opportunity to compete in the New York markets now
that the number of flights at each of the three major regional
airports has been capped. The auctions will preserve competitive
airline service, help lower fares for service to and from the
region, and give new carriers an opportunity to enter the
The FAA asked the Port Authority to file its response within 30