DOT 122-08
Contact: Brian Turmail, Tel: (202) 366-4570
Tuesday, August 26, 2008

Federal Aviation Administration to Review Legality of Port Authority of New York and New Jersey’s Proposal to Ban Flights Using Slots Acquired by Auction

The Federal Aviation Administration (FAA) today initiated an administrative proceeding, known as a notice of investigation, to determine whether the Port Authority of New York and New Jersey will violate federal regulations if it follows through with its proposal to bar airlines from using takeoff and landing slots at JFK, LaGuardia and Newark Liberty International Airports if the slots are acquired by auction.

Under law, airports receiving federal grants are required to provide airlines with reasonable and nondiscriminatory access to their facilities. As part of its investigation, the FAA will evaluate whether the Port Authority’s Aug. 4 proposal is unlawfully interfering with the airlines’ ability to access takeoff and landing slots at the airports by discouraging bidders from participating in slot auctions.

If the proposal by the Port Authority is in fact discouraging open access to the airports, the Port Authority may no longer be eligible for FAA grants, or payments under existing grants, until the matter is resolved. The FAA could also issue an immediate cease and desist order requiring the Port Authority to grant access to the airports. The three airports received a total of $27 million in grants from the FAA’s Airport Improvement Program during fiscal year 2008.

The FAA is scheduled to auction two slots previously allotted to now-bankrupt EOS Airlines at Newark on Sept. 3. In addition, the U.S. Department of Transportation announced two proposed rulemakings in April and May of this year that, if finalized, would auction a limited number of takeoff and landing slots at JFK, Newark and LaGuardia Airports.

The slot auctions are necessary to ensure that all airlines have an opportunity to compete in the New York markets now that the number of flights at each of the three major regional airports has been capped. The auctions will preserve competitive airline service, help lower fares for service to and from the region, and give new carriers an opportunity to enter the market.

The FAA asked the Port Authority to file its response within 30 days.

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