What’s at Issue
The Government Accountability Office (GAO) released a report on September 30, 2008 in response to a congressional inquiry into whether the Federal Aviation Administration (FAA) has the legal authority to auction airport arrival and departure slots. GAO concluded that the FAA lacks statutory authority to action slots, and to retain or use auction proceeds.
Background
While the FAA has the responsibility to control congestion in the national airspace, it has done so by using a reservation or slot system in the past. In 1968, the FAA instituted a slot control system called High Density Rule, which capped the number of hourly arrivals and departures permitted at high density traffic airports such as LaGuardia, JFK, Washington National, and Chicago O’Hare airports. In 2000, Congress directed the FAA to phase-out the High Density Rule due to concern that it hurt competition, unfairly favored incumbent airlines and was not the best way to reduce congestion. However, in May 2008, the FAA issued a proposal for a cap and slot system at LaGuardia, JFK, and Newark that is dependant on auctioning slot leases to the highest bidder.
Why It’s Important
There has been widespread concern that implementing slot auctions could limit competition by preventing entry of new carriers and that incumbent air carriers often do not have the resources to buy the slots necessary to remain viable and competitive. In addition, auctions could increase the cost to travelers in the New York-metro area, with no guarantee of delay reduction and a potential loss of flights and service options. Furthermore, service to small communities could decrease because air carriers that lose slots will move slots currently used for small community service to larger, more lucrative markets.
Report Findings
GAO concluded that the FAA lacks the statutory authority to auction slots for a fee due to the following reasons:
- The FAA may not rely on its general property disposition authority to carry out its regulatory slot assignment function.
- The FAA lacks the authority to auction slots for a fee. In fact, Congress has prohibited the FAA from imposing any kind of user fee unless it obtains statutory authority to do so.
NATA Position
NATA believes that Congressional interest into the FAA’s slot auction proposal was critical in preventing the FAA from going forward with their proposal. Further, NATA is pleased with the outcome of the GAO report confirming that the FAA lacks statutory authority to implement the slot auction proposal which would have placed an unnecessary burden on all aviation businesses.
Status
The FAA is unable to implement their proposal and it remains unlikely that the agency will be granted statutory authority in the future. Members of Congress from both political parties were in agreement that the slot auction proposal was not the best way to combat congestion in the New York airspace.
Click here to view a copy of the GAO report.
Staff Contact: Kristen Moore
Director, Legislative Affairs
kmoore@nata.aero
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