Unfriendly skies

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Sep 11th 2008 | NEW YORK
From The Economist print edition

The government’s flight plan is temporarily grounded

ReutersANYONE travelling to or from JFK, Newark, or LaGuardia, the New York area’s three main airports, is probably used to long delays and frequent cancellations. These airports carry 109m passengers and 2.7m tons of cargo annually, and are disproportionately responsible for jamming up America’s airways. A congressional committee estimated that flight delays cost America over $40 billion last year. Almost a third of all flights were delayed or cancelled, and three-quarters of these delays originated in the New York area.

Weather is certainly part of the problem, but having too many aeroplanes in too little sky is the main reason for the congestion. Despite recently adding more caps on the number of flights landing or departing per hour, the Federal Aviation Administration (FAA) says the caps are not helping enough. So it has proposed a number of new ideas.

The most controversial is the auctioning of flight slots. The FAA, which regulates the aviation industry, is an agency of the Department of Transportation (DOT). The DOT insists its plan would help reduce congestion significantly. Part of the plan would compel airlines to give up 10-20% of their slots for auction.

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The Air Transport Association (ATA), a trade group representing the airline industry, filed a lawsuit last month to block the auctions. The governors of New York and New Jersey oppose the plan too. They worry that it will cause as many as 25 smaller airports to lose their service to and from New York. The Port Authority of New York and New Jersey, which manages the three airports, joined the lawsuit, claiming the FAA lacks the legal authority to conduct the slot auction. It also claims ticket prices would rise by 12% as airlines passed along the cost to their customers of acquiring the slots, said to be each worth hundreds of thousands of dollars.

The Port Authority instead wants the FAA to adopt some of its own proposals, which range from permanently reopening closed military airspace to civilian use to investing in new air-traffic-control technology. It has threatened to block airlines that win auctioned slots from using its terminals. The FAA counters that the airports could lose more than $27m in federal funding if they do that.

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The FAA’s argument is that landing fees make up only a small part of ticket prices, and that the proposed auctions will increase competition and push down prices. Furthermore, the funds generated by the auctions will be used to reduce delays and enhance capacity at the airports.

The first auction was supposed to have taken place on September 3rd, with more to follow by the end of the year. Because of the dispute, that first auction has not yet been held. What with the court case, not to mention the fact that the next generation of air-traffic-control systems are still at least ten years away, passengers should continue to expect delays.