FAA Investigates PANYNJ on Slot Action

The Federal Aviation Administration (FAA) yesterday 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. A finding that it does violate regulations risks federal funding for the three New York airports and requires airports to give all airlings "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.