It is Official! The FAA Rescinds Slot Auction Rule

 

The Federal Aviation Administration has officially rescinded its controversial plan to enact mandatory slot auctions on LaGuardia, JFK, and Newark airports.  See 74 Fed. Reg. 52,132 (Oct. 9, 2009) (LaGuardia) and 74 Fed. Reg. 52,134 (Oct. 9, 2009) (JFK and Newark). 

Both the final rule "Congestion Management Rule for LaGuardia Airport" and "Congestion Management Rule for John F. Kennedy International Airport and Newark liberty International Airport" were published in the Federal Register on October 10, 2008 (73 Fed.Reg. 60544 and 60574).  These final rules established procedures to address congestion in the New York City area by assigning slots at the airports, assigning to existing operators the majority of slots at the airports, and creating a market by annually auctioning off a limited number of slots in each of the first five years of the rule.

The rules have been the subject of litigation and much controversy ever since the Bush Administration first proposed them.  The D.C. Circuit ruled last year that the slot auctions could not take place pending the outcome of the litigation.  They have also been the subject of two Law Review articles:  Benjamin D. Williams's Comment, Playing the Slots: The FAA Gambles with Its Controversial Congestion Management Plan for New York's Busiest Airports, 74 J. Air L. & Com. 437 (2009), offers a detailed discussion of the law and policy implications of the FAA's proposed slot auction rule; and Professor Michael Levine's article Airport Congestion: When Theory Meets Reality, 26 Yale J. on Reg. 37 (2009) which presents an improved proposal for slot auctions--one which accounts for market realities and provides airlines holding slots to see the full opportunity costs of retaining (and possibly hoarding) their slots

Then the administration changed and on May 14, 2009, the FAA published a notice proposing to rescind the 2008 final rules citing the impact of the Omnibus Appropriations Act on the rules and the state of the economy in general.  And for those reasons, the FAA states that it "has decided to rescind the 2008 final rule effective immediately."

Other blog posts on this topic:

FAA Issues Notice of Order to Show Cause Regarding Extension of Limitation of Arrivals at JFK and Newark Airports The FAA, on June 5, 2009, issued two Notices of Order to Show Cause requesting "the views of interested persons on the FAA's tentative determination to extend through October 30, 2010, the January 15, 2008, order limiting the number of...

 

FAA Proposes Rescission of Congestion Management Rules for JFK, LaGuardia and Newark The Federal Aviation Administration today proposed to rescind the congestion management rules for JFK, LaGuardia and Newark that would have created auctions for slots at those airports. (Click here for the JFK and Newark proposal, click here for the LaGuardia...

FAA Amends Its December 12, 2006 Order Regarding Operating Limitations at LaGuardia The FAA today issued a Notice of Amendment to Order indicating that it is amending its December 12, 2006 Order, which temporarily capped the scheduled operations at New York's LaGuardia Airport. The FAA published a final rule instituting longer-term regulation...

D.C. Circuit Court of Appeals Stays Slot Auctions at JFK, LaGuardia and Newark The U.S. Court of Appeals for the District of Columbia Circuit granted a stay of the slot auctions that were scheduled to take place on January 12, 2009, pending arguments on whether the FAA has the legal authority to auction...

Legal Analysis of the FAA's Slot Auction Rule for JFK and Newark Part 2 Analysis of Legal Issues Regarding Slot Auctions, Part Two. Having established previously that the FAA does not have specific authority to lease or otherwise dispose of slots, FAA turns to its general power to dispose of property in order to...

Legal Analysis of the FAA's Slot Auction Rule for JFK and Newark Part 1 Pt. 1: Setting The Stage When the FAA adopted its slot auction rules for LaGuardia, JFK and Newark Airports, it did so despite the fact that the GAO had issued a legal opinion stating that it believed that the FAA...

Despite GAO Ruling FAA Issues Congestion Management Rules for JFK, Newark and LaGuardia In a gutsy move that is sure to draw the ire of Congressional leaders as well as the Air Transport Association, the FAA announced last Friday, October 10, 2008, that it had promulgated two "congestion management" rules: one for LaGuardia...

GAO Declares FAA Does Not Have Legal Authority to Auction Slots The GAO, in a legal opinion issued September 30, 2008, declared that "FAA currently lacks the authority to auction arrival and departure slots, and thus also lacks authority to retain and use auction proceeds." This legal opinion came as a...

FAA Suspends Auction of Flight Slot at Newark Airport It is being reported by several news outlets that the FAA has suspended its auction of flight slots at Newark Airport. The auction was slated for September 3, 2008. According to Bloomberg News the Order, issued by FAA Chief Counsel,...

FAA Issues Order Limiting Scheduled Operations at Newark Liberty The FAA first proposed limiting scheduled operations at Newark Liberty in a proposed order that was published in March 18, 2008, Federal Register. The FAA has now, on May 21, 2008, issued its Order limiting scheduled operations at Newark Liberty...

FAA Proposes Congestion Management Rule for JFK and Newark Liberty In the May 21, 2008, issue of the Federal Register, the Federal Aviation Administration (FAA) proposed a new rule affecting two airports that are a part of the East Coast Airspace Redesign. The FAA proposes to establish procedures to address...

 

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LVTfan - October 12, 2009 2:05 PM

So the landing rights at our congested airports belong to the airlines, to be sold, bought, traded -- at a profit to the airlines -- not to the American people.

Great.

I didn't agree with much that came out of the Bush administration, but I thought Mary Peters had gotten this one right.

The rights to scarce resources such as 8am at LaGuardia rightly belong to the American people, just as the airwaves rightly belong to us. They represent a revenue source we ought to be treating as our common treasure, not something which the stockholders of corporations can privatize, or which the compensation committees of those corporations can funnel into the pockets of their management.

Won't airlines pay large amounts for the right to land a plan at the times the flying public wants to travel? Or should we let those who "own" those rights not compensate the rest of us for them? They can -- and should -- pass those costs along to those who choose to travel at peak times.

We can reduce the congestion and reduce the taxes which burden our economy, if we shift our taxes onto that which the classical economists recognized as "land." Airport landing rights are an example of that.

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