A fight over the Federal Aviation Administration's plan to auction flight-slot leases at Newark Liberty Airport next week heated up yesterday when five airlines and a trade organization filed additional paperwork in a bid to halt the plan.
The Air Transport Association, a trade organization, and five airlines filed protests on Aug. 14 to the Office of Dispute Resolution for Acquisition, an independent office within the FAA, to stop the auction of two flight slots on Sept. 3. The protests asked for the ODRA to grant a stay to halt the auctions, but one has not been granted.
In additional paperwork filed yesterday, the ATA and the airlines - Northwest Airlines Inc. Continental Air Line, Inc., U.S. Airways Group Inc., United Airlines Inc., and Delta Air Lines Inc. - criticized the FAA for refusing to wait for the ODRA to make a decision on the case before going ahead with the auction.
"The FAA's refusal to suspend this illegal, unauthorized, and unprecedented auction for a short time pending ODRA's review is arbitrary and capricious," the filing said. The filing claims that the FAA has conceded that it lacks the authority to conduct such auctions.
The filing follows a lawsuit filed by the ATA on Aug. 11 in federal appeals court in the District of Columbia that claimed the FAA's actions are unlawful and "are in excess of the FAA's statutory authority [and] constitute unauthorized regulatory action disguised as property management."
The Port Authority of New York and New Jersey owns the airport and has said it will block flights in auctioned slots.
"The FAA has clear legal control of the slots," U.S. Department of Transportation spokesman Brian Turmail said yesterday. "Airline lobbyists are more interested in blocking competitors from serving the New York market than they are in reducing delays, keeping fares competitive, or improving the quality and scope of service."
New York Gov. David Paterson and New Jersey Gov. Jon Corzine sent a joint letter to U.S. Transportation Secretary Mary Peters last week opposing the auctions on the grounds that they would increase costs to passengers without reducing congestion.
Turmail said that competition among airlines in the market would lower fares and said that the governors' opposition stemmed from a desire to please their customers, the airlines.
"The airports generate revenue from the airlines," Turmail said. "If the airlines are opposed to it because they don't want competitive pressure and they're their current customers, then of course [the governors] are going to be responsive to their customers."
If the auctions do take place, they will come at a time when airlines are cutting back service across the country in the face of a weak economy and high fuel costs. Nonstop flights from the New York area's three major airports to 25 U.S. and international cities will be cut completely by December and service will be cut back in another 55 cities, according to data from the Web site Farecompare.com. The flight cuts were first reported Sunday in Crain's New York Business.
The impact of the service cuts to the Port Authority - which owns Newark, LaGuardia, and John F. Kennedy International airports - are "largely marginal" at this stage said Cherian George, managing director at Fitch Ratings.
"The Port Authority airports, with LaGuardia, JFK, and Newark, are among the economically strongest airports in the world," George said. "These airports retain a tremendous amount of strength and the credit of the Port Authority has got a fair amount of diversity from all the transportation assets that it runs. The fact that even such a strong service area is being affected is a sign of the size of the problem, but clearly the problem would be more manifested and the impact would be greater at the more regional airports."