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"Auctions Do Not Result In Lower Fares"

Air Transport Association responds to DOT claim of competition as rationalization of New York airport slot auctions

eTN Staff Writer  Oct 29, 2008

WASHINGTON, DC - The Air Transport Association of America (ATA), the industry trade association for the leading US airlines, today issued the following statement in response to the Department of Transportation (DOT) claim that auctions will lead to more competition and lower fares at slot-controlled airports:

"The DOT today attempted yet another rationale in support of its unwavering desire to force untested, highly-controversial, slot auctions at New York-area airports. It's never-ending, but imaginative claims are beginning to seem like throwing spaghetti at the wall to see what sticks.

"It seems as if the DOT has reversed course from its earlier astonishing claims that slot auctions will reduce congestion. The DOT now claims that since New York is not a competitive market, auctions are necessary to increase competition and lower fares. Let's set the record straight: New York is the most competitive market in the United States, with nearly 80 airlines serving JFK, La Guardia, and Newark airports. So it is hard to imagine why New York would somehow benefit from even more competition - even assuming that auctions would attract carriers not now serving New York airports.

"The DOT compares fares in the second quarter of 2007 to fares in the second quarter of 2008 to demonstrate that average fares increased 8 percent. Given that the price of a barrel of oil during this same period increased nearly 100 percent - from around $65 a barrel to $124 a barrel - the more appropriate question might be why airfares increased so little. The Port Authority of New York and New Jersey, who vehemently opposes auctions, estimates that fares could increase by as much as 12 percent and that as many as 30 small- and medium-sized markets could lose service to New York under the illegal DOT auction scheme.

"This latest argument sadly confirms the Department of Transporation's willingness to spin its wheels to mask its failure to implement proven operational and airspace redesign measures that will enhance capacity and reduce flight delays in the New York area. Auctions do not enhance capacity or give passengers more options, and they do not result in lower fares."

Air Transport Association responds to DOT claim of competition as rationalization of New York airport slot auctions
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