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BTC Blasts DOT Air Slot Proposals

August 5, 2008 By: George Dooley

The Business Travel Coalition (BTC) called the U.S. Department of Transportation’s (DOT) proposal to launch a slot auctioning program at New York City-area airports imprudent. The BTC said the policy would  do nothing to reduce delays and congestion while increasing airfares into and out of the New York City area for business travelers.

The BTC also said the move would drive up airlines’ costs at the worst possible time and dampen the interest of airlines that would consider investments at the airports against an uncertainty of adequate slots. Finally, the BTC said it would curtail access to the important New York marketplace for mid-size communities.

“Rarely does government intervention in a market produce the press release-heralded results. In this case, two interrelated interventions—caps and auctions—are contemplated for the busiest and most complex air space in the world. It is pure hubris, and reckless policy formulation to assume there would not be regrettable unintended consequences from such an implementation,” the BTC said.

“Theoretically, auctions would drive airline airport-access costs up, providing the intended incentive for airlines to use larger aircraft. However, unintended results would likely include those slots and larger aircraft being redeployed for use in larger, more lucrative markets and away from smaller communities. Pure and simple, this would represent government distortion of the marketplace of the worst kind where the losers would be mid-size cities.”

According to the BTC, "there are no airport slot-auction data from anywhere in the world that would support the efficacy claims advanced by auction proponents, save for game-theory exercise results at universities. If DOT is so enamored of slot auctions, then it should conduct a multi-year experiment to generate quantitative data at a single airport somewhere outside the busiest airspace on the globe. Otherwise, Congress should step in and block DOT's foolhardy adventure,” the trade group said.


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