Date: Aug 19, 2008
Press Release Number: 90-2008
Joint Letter Calls Auctions Misguided, Says Auctions will Increase Ticket Prices without Reducing Flight Delays
New Jersey Governor Jon S. Corzine and New York Governor David A. Paterson today sent a letter to the United States Department of Transportation expressing their opposition to the auctioning of flight slots at metropolitan area airports. The text of the letter is below.
August 19, 2008
The Honorable Mary Peters
United States Department of Transportation
1200 New Jersey Ave, SE
Washington, DC 20590
Dear Secretary Peters:
We are writing to express our opposition to the plan announced by the U.S. Department of Transportation and the Federal Aviation Administration to auction flight slots at the airports operated by the Port Authority of New York and New Jersey (PANYNJ), beginning with Newark Liberty International Airport. Put simply, this misguided policy will increase ticket prices for consumers and hurt struggling small-market airports while doing nothing to relieve or mitigate delays and congestion at New York and New Jersey metropolitan airports.
Ultimately the cost of auctions will be borne by air travelers who live in New York and New Jersey or wish to visit. According to an analysis conducted by the PANYNJ, ticket prices will rise by approximately 12 percent as airlines incur the cost of acquiring slots, and then pass that cost on to their customers. This increase in ticket prices - already high as a result of the current cost of jet fuel - comes at a time when consumers can least afford it.
Another concern to us as governors is the detrimental impact this auction policy will have on our regional economy. The proposed auction plan favors large aircraft and would have serious implications for our states, as smaller markets all over the country would lose service to and from our region. The smaller markets likely to see service cuts range from San Jose to Sarasota, and closer to home, in Buffalo, Binghamton and Ithaca. In total, at least 25 cities would lose service to and from New York and New Jersey as a result of the planned auction policy - limiting travel options for consumers and hurting our small-market airports, which serve as economic engines in our states.
Additionally, airlines have spent billions of dollars in recent years to renovate old terminals and build new ones at Port Authority airports, based on the assumption that they will retain their slots. In a slot auction, other airlines - those with greater financial resources - will reap the benefits of these renovations, simply by purchasing a slot.
Finally, as we have emphasized throughout this debate, auctions do nothing to address the fundamental causes of delays and congestion. We continue to encourage DOT and FAA to implement the more than 100 recommendations of the Flight Delay Task Force, convened by the PANYNJ in 2007, in order to relieve congestion at our airports.
We respectfully ask that you reconsider your intent to implement this plan, recognizing the many unanswered questions and concerns it raises, and the fundamental way in which it will fail to produce the desired outcome of congestion relief.
David A. Paterson
Jon S. Corzine
Erin Duggan/Errol Cockfield
Jim Gardner/Robert Corrales
Port Authority of New York and New Jersey