Bush wants market solutions for U.S. airline delays Mon Dec 17, 2007 9:53pm EST By John Crawley WASHINGTON (Reuters) - President George W. Bush on Monday advocated a market-based approach for managing airline congestion and said the government would again clear military air space in the eastern United States to ease flight delays during holiday travel. In an economic address in Fredericksburg, Va., Bush hinted at what senior officials are expected to propose later this week -- a series of near-term and long-term steps for government and industry to take to reduce delays. Major airlines are on pace this year to set a record for poor on-time performance. Overcrowded skies during the heavy travel period this past spring and summer were blamed in part on airline over-scheduling, especially at New York's John F. Kennedy airport, a major international gateway and the worst for severe delays this year. A third of all U.S. airline traffic leaves from, is destined to, or flies through New York air space, according to the Federal Aviation Administration. Newark international and LaGuardia are the region's other two major airports and both have serious delay problems of their own. The Transportation Department has struggled to finalize details of its congestion plan for the New York region -- especially JFK -- after meeting stiff resistance from airlines and some members of Congress to centerpiece initiatives such as the administration-preferred plan that would make airlines pay a premium for flights during the busiest times of the day. But regulators, according to aviation sources late on Monday, are coalescing around a plan that is to be announced on Wednesday by Transportation Secretary Mary Peters and would, over the longer term, manage capacity and competition by auctioning some takeoff and landing rights. In the shorter term, the sources said, the government is expected to impose hourly flight caps at JFK for the summer of 2008. Delta Air Lines and JetBlue Airways have major operations at JFK, as do more than 60 international carriers including British Airways, Air France-KLM and Germany's Lufthansa. Bush sought recommendations from his transportation aides earlier this year on reducing flight delays. In his remarks, Bush did not detail what he expected to see but he articulated his preference for a market-based approach. "The truth of the matter is, we need a more rational way of allocating gates among airlines," Bush said. To give commercial carriers more route options during the December holidays, the government will free up air space along the East Coast that is normally used by military patrols, Bush said. A similar plan was put in place for the Thanksgiving travel period, and it went smoothly. During peak times of the day, flights at JFK can top 100 per hour in the summer. The Transportation Department's plans to drop that to 80 have been opposed by carriers trying to hang on to their modest recovery of the past two years. The agency has been discussing alternative options, and a compromise to modestly raise the government's proposed figure is being drawn up. Peak-hour operating limits are also expected to be recommended for Newark airport, as some airlines and congressional officials want. But regulators are not at a point yet where they have decided on an hourly cap. Auctioning slots, depending on how the plan is proposed, could require airlines to relinquish some rights. Regulators are likely, the sources said, to settle on a proposal to auction rights for new entrants to better manage demand and enhance competition. Congress would have to write the auction policy into law and it is unclear whether that plan or other long-term remedies could be in place before the Bush administration leaves office in January 2009. Carriers have threatened legal steps if government action on flight caps and auctions, in their opinion, are too heavy-handed. (Additional reporting by Caren Bohan; Editing by Gary Hill) <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".