The Air Transport Association (ATA), the trade group for airlines in the U.S., has filed suit against the Federal Aviation Administration (FAA), challenging the legality of the FAA's planned auction of takeoff and landing slots at airports in the New York City area. In the suit, the ATA alleges that the FAA does not have authority to conduct such auctions. The suit, called a Petition for Review, was filed earlier today (Aug. 11, 2008) in the U.S. Court of Appeals for the District of Columbia.Earlier this month, the U.S. Department of Transportation (DOT) announced FAA plans to auction slots at Newark Liberty Airport. (The FAA is an agency of the DOT.) The auction is planned for September 3, 2008. The DOT said that the funds generated from the auction "will be used to reduce delays and enhance capacity at New York-area airports."
“This auction will allow us to implement market mechanisms on a small scale, gauge interest and determine a slot’s market value,” DOT Secretary Mary Peters said. “However, the real winners in this auction will be consumers, who stand to benefit from more reliable air service that costs less in terms of both time and money.”
The ATA contends that FAA does not have authority to conduct auctions, and also notes that carriers have given up slots to help reduce congestion, while auctioning these slots would only add to congestion.
From an ATA news release about the suit against the FAA:
“FAA’s claim that it can use its property management authority to auction slots is intellectually dishonest and a disturbing end run around Congress,” said ATA President and CEO James C. May. “Every transportation administration except this one has acknowledged that it does not have the authority to implement auctions and other so-called market mechanisms. Yet this administration believes it can ignore the statutory limits of its authority to remake the industry as it sees fit.The Port Authority of New York and New Jersey, which manages the airports, also opposes the auction. The Port Authority issued a statement on August 5, 2008, which said, "As we've made clear numerous times, the solution to combating flight delays is increasing capacity, improving customer service and replacing a decades-old air traffic control system -- not auctions that will raise ticket prices for the exact same delays. We will continue to block any effort by the DOT and FAA to implement this auction system at our airports."
“We said that we would challenge the FAA decision in a court of law and we are doing just that. Today we have started the process to protect our members’ rights,” said May.
ATA’s lawsuit, a petition for review filed in the U.S. Court of Appeals for the District of Columbia, states that the FAA slot auction is, in effect, a final rule that “should be held unlawful and set aside because these actions are in excess of the FAA’s statutory authority; constitute unauthorized regulatory action disguised as property management; are contrary to express statutory limitations imposed by Congress in the 2008 Consolidated Appropriations Act; are without observance of procedure required by law; and are arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.”
“FAA’s plan is not only unlawful, it is both surprising and perplexing. It is surprising because the end result will be more flights during the busiest times of the day at Newark, even as we suffer through yet another delay-plagued summer, and it is perplexing because the announced slot auction precedes formal rules to auction slots at Newark and other airports,” said May. “Sadly, FAA believes that it has the right to make up the rules as it goes along. FAA should focus its efforts on fulfilling its responsibility to provide the infrastructure and air traffic resources necessary to meet the public’s demand for safe air transportation services, instead of finding new ways to inhibit economic growth and further tax an already overtaxed traveling public.”
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