U.S. Pressing Ahead With Airport Auctions Despite Opposition

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Despite growing opposition to the Bush administration’s plans to auction takeoff and landing slots at New York’s three major airports, joined yesterday by governors Paterson and Corzine, the lead counsel for the Department of Transportation is pledging to move forward with the first auction in less than two weeks.

“It is not particularly surprising that the governors are following the lead of the Port Authority,” the lead counsel, D.J Gribbin, said yesterday in an interview. “What is disappointing to us is why the Port Authority hasn’t shared why they think there will be a 12% increase in costs; why they think there will be a disruption to small community service when all the evidence of basic economics says that prices will go down. Why would this be different from any other market known to man?”

Mr. Gribbin is scheduled to sit down today with representatives of the Port Authority of New York and New Jersey, which operates the airports, to try to work out their differences and avoid a court battle, a prospect both sides have previously said they were prepared to face.

In a joint letter sent to the Department of Transportation yesterday, Messrs. Paterson and Corzine echoed the arguments of the Port Authority, saying prices would increase and that service to at least 25 smaller cities would be disrupted or scrapped altogether.

“Put simply, this misguided policy will increase ticket prices for consumers and hurt struggling small-market airports while doing nothing to relieve or mitigate delays and congestion at New York and New Jersey metropolitan airports,” the governors said.

Several airlines have invested hundreds of millions of dollars over the past several years upgrading terminals at John F. Kennedy International and Newark Liberty International airports.

JetBlue is putting the finishing touches on a $743 million project to create a modern terminal at JFK, following American Airlines’ completion in 2005 of a $1.1 billion terminal upgrade at the airport. Continental Airlines concluded its own terminal expansion at Newark in 2001.

“In a slot auction, other airlines — those with greater financial resources — will reap the benefits of these renovations, simply by purchasing a slot,” Messrs. Paterson and Corzine said.

Mayor Bloomberg has said he is in favor of trying the auction system.

“There is a fundamental disconnect of the economics of what happens when you have an auction,” Mr. Gribbin said, adding that the airline industry has done a “very good job of lobbying against” the proposal.

The first auction of a takeoff and landing slot at Newark airport will take place September 3.

The New York Sun

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