The Wall Street Journal
Bush Seeks to Reduce Air-Travel Delays
Strategy Would Cap Number of Flights At Kennedy Airport
By CHRISTOPHER CONKEY
December 18, 2007; Page D2
The Bush administration this week is expected to announce its strategy for reducing air-travel delays next summer, including capping the number of flights at New York's Kennedy airport. Consumers may see higher fares as a result, and opposition from lawmakers and aviation groups may prevent some aspects of the plan from being implemented. Details of the administration's proposals remain in flux, but a general outline has emerged, according to government and industry officials familiar with the matter. They say the plan will contain a mix of tried and untested ideas, some intended to stem congestion before the summer travel season and others designed to tap market-based mechanisms to relieve congestion longer term.
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Instead, the Transportation Department is leaning toward a system of "slot auctions," where a cap on operations is set and then takeoff and landing slots are auctioned off to the highest bidder. This idea hasn't been tried before in the U.S., and airlines are lobbying hard to protect their current positions at New York airports. The result may be a system where any future, additional slots that become available would be put up for auction. Relieving air-traffic congestion jumped up the White House's priority list this fall after a summer of record delays and attention quickly focused on New York, which causes as much as 75% of flight delays nationwide. In September, President Bush convened a committee of regulators and aviation groups to offer solutions.
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For consumers, one byproduct of capping flights in New York could be higher fares and fewer choices. This prospect comes as many airlines have said they will curtail flights next year in response to high oil prices, which could also put upward pressure on fares. These factors have some consumer advocates griping, even if delays are reduced somewhat by caps... The untested concept of slot auctions could also lead to higher fares, but it would have to clear several hurdles before it went into effect. Airports are generally prohibited from raising revenue much beyond their costs, so the FAA may need to revise its regulations governing airport financing. Airlines are vehemently opposed to having their current slots in New York, which are backed by billions of dollars in investments and complicated gate contracts, taken and auctioned off.
Then there is the question of whether foreign airlines, which account for roughly one-third of the flights at Kennedy, would be subject to the auctions. Last week, Jacques Barrot, vice president of the European Commission, sent a letter to Transportation Secretary Peters, Secretary of State Condoleezza Rice and White House Domestic Policy Council director Karl Zinsmeister warning the administration to exclude foreign carriers from any slot-auction system. In the letter, Mr. Barrot expressed "strong concerns about the potential implications for EU air carriers, particularly in the view of our new EU-U.S. Air Transport Agreement." Including foreign carriers could jeopardize future talks on opening up the trans-Atlantic market, he suggested.
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