By now, many aviation policy watchers have noted the decision by the Federal Aviation Administration (FAA) to scrap the proposed auction of landing slots at New York City area airports on May 13th. U.S. Department of Transportation Secretary Ray LaHood cited the controversial nature of the auctions as one of the reason's he reversed the FAA decision made under former U.S. DOT Secretary Mary Peters.
Secretary LaHood reviews his decision in an interview with the online news channel NY1.
What caught my eye (ear), however, were the following comments reported by NY1:
He [Secretary LaHood] said that the plan made by former President George Bush's administration plan to auction off takeoff and landing slots at John F. Kennedy, LaGuardia and Newark Airports did not make sense.
"I think it's a little contradictory to say on one hand we are going to limit the number of slots and actually take them back, and then say all of a sudden we are going to auction them off. I think it's a contradiction in the kind of activity people here are looking for," said LaHood.
The Bush administration created the plan to help alleviate air traffic congestion and create competition among the airlines.
LaHood said the best way to relieve flight congestion is through new technology, and said that New York is three to five years away from making the upgrades.
Hmmm. The point of the auction was to allow the marketplace to decide which airlines valued the New York slots the most, allowing market prices to sort out priorities. The current system allocates slots based on airline legacy at the airports, not the value added these slots provide to consumers. Indeed, many of the flights going into LaGuardia and JFK airports are transfers to other domestic flights, so they, in principle, could be moved to less expensive (and even nearby) airports.
Mr. LaHood's faith that these congestion problems can be handled through a technology fix, without involving consumers and suppliers in decisions to prioritize and determine the relative value of this scarce commodity, is another indication that U.S. transportation policy continues to be wedded to out-of-date thinking about reform.
Reason Foundation has published extensively on the benefits of auctioning landing slots in New York and elsewhere. A complete index of our most recent work can be found here. We also published a "Frequently Asked Questions" on airport pricing at New York airports.