Smaller airlines are concerned that they can’t gain access to New York’s airports. (Image: Jim Glab)
Although smaller, low-cost airlines in the U.S. have been growing much faster than their giant rivals, they have been mostly stymied in their desire to gain access to the nation’s biggest air travel market: New York. So they’re pushing for a change in the rules.
Five airlines — Virgin America, Spirit, Frontier, Alaska and Allegiant —sent a letter this week to the Federal Aviation Administration and the Transportation Department asking government officials to come up with a solution to the carriers’ relative lack of access to LaGuardia, JFK and Newark airports. All three airports are slot-constrained — i.e., they are operating at full capacity, so the only way for an airline to get a new slot pair is to buy it from an incumbent, or trade for one somewhere else.
Current rules that govern the allocation of takeoff and landing slots at the three airports expire in about a year, and the FAA earlier this year started a rulemaking proceeding that is considering how to amend them.
The five carriers argue that with the consolidation of the major airlines in recent years, the only way to promote competition and to keep fares at a reasonable level in the New York market is to allow smaller and/or low-fare airlines to fly there from more cities.
The proposed rule changes that the FAA is looking at include a requirement that an airline would have to use every allocated slot 80 percent of the time “for the same flight or series of flights throughout the scheduling season” if it wants to keep the slot. (Current usage rules don’t require airlines to account for each slot individually.)
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The FAA has also proposed various alternatives for creating a secondary market for the purchase, sale or exchange of slots at the New York airports, and would require the Transportation department to review each proposed transaction for its impact on competition.
The slot allocation procedures at New York airports are separate from the ongoing discussions at the New York-New Jersey Port Authority about whether to lift or amend the perimeter rule at LaGuardia, which limits flights out of that airport to no more than 1,500 miles. That’s why you can’t currently fly non-stop between LaGuardia and the West Coast — although that could change, especially with the huge redevelopment of LGA that’s coming.
Readers: Should New York airports allow more smaller carriers in? Would you fly them?
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These slots aren’t cheap ($3 to $4 million, I’ve read), but the FAA’s new rule seems odd to me. Who cares if the slots are used for regularly scheduled flights or not? You’d think the important thing is how many warm bodies cross a jetway to maximize airport utilization, regardless of where they are flying to or from.
It’s always a difficult question.
On the one hand, as a business traveller, I like that the legacies have near hub status where I can go almost anywhere non-stop. LCC competition would replace RJ flights and just add more florida service. I also don’t see how you should “punish” carriers who hold slots for incumbents who all have slots, but want more / better ones without having to pay market rates for them.
On the other, I do travel for leisure, and more competition might mean lower prices (assuming you are on a competitive route). The legacies have been predatory towards the LCCs in many markets, i.e. United’s repsonse to VX entering Newark. Perhaps the DOT has a role to play in allowing fair competition and promoting a long-term healthy industry.
Annual slot auction anyone?