Port Authority, Government Face Off Over Airport Auctions

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The Port Authority of New York and New Jersey’s threat to erect barriers to airlines that participate in a planned auction of departure and arrival slots at the New York region’s three major airports could land the two sides in federal court.

“I hope it doesn’t come to this, but to prevent the Port Authority from blocking access to a carrier because they did or didn’t participate in an auction we would go to court and work out the legal issues,” the general counsel to the U.S. Department of Transportation, D.J. Gribbin, said yesterday in an interview. “We will talk to them and walk them through the legal authority that they do and that they don’t have.”

Yesterday, the Port Authority tried to pre-empt the transportation department and the Federal Aviation Administration from moving forward with plans to auction off several hundred slots a year combined at John F. Kennedy International, La Guardia, and Newark Liberty International airports. The first auctions would start by the end of the year, according to the transportation department, which says the auctions would result in increased competition, lower costs, increased reliability, and new revenues that could be used to reduce air congestion.

The Port Authority, which runs the three airports, said yesterday it would deny access to terminal facilities that were allocated by auction and that it is readying itself for a fight.

“It makes absolutely no sense,” the director of aviation at the Port Authority, William Dakota, said of the FAA’s plan.

Mr. Dakota said the auction proposal would result in a 12% increase in fares for those flights in the auctioned slots and could “dramatically reduce” or eliminate service to 25 smaller cities, including Des Moines, Iowa, Huntsville, Ala., Bangor, Maine, and destinations in upstate New York,

Mr. Gribbin said that even an incremental cost hike in the short term would be more than offset by the increased competition at the airports, which would drive prices down in the long term. Regardless, he said, the Port Authority does not have the legal right to follow up on its threat.

Senator Schumer and Rep. Jerrold Nadler, who represents parts of New York City, said they agree with the Port Authority.

“The DOT appears hell bent on jamming this unworkable plan down the throats of the Port Authority and New York City air travelers, but we are going to fight them every step of the way,” Mr. Schumer said in a statement yesterday.


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