http://www.nytimes.com/2008/08/27/nyregion/27auction.html?ref=3Dnyregion The New York Times August 27, 2008 In Dispute Over Plan to Auction Off Airport Slots, U.S. Threatens to Cut Ai= d By SEWELL CHAN The Federal Aviation Administration threatened on Tuesday to cut off $27 mi= llion in annual grants to the Port Authority of New York and New Jersey, es= calating a legal battle over the Bush administration=E2=80=99s plan to auct= ion off landing slots at some of the nation=E2=80=99s busiest airports, a p= lan that the authority bitterly opposes and one that has divided elected of= ficials. The Port Authority said on Aug. 4 that it would prohibit planes from landin= g or taking off at slots acquired by auction. Two days later, the Bush admi= nistration vowed to move forward with its auction plan, starting with two s= lots at Newark Liberty International Airport that were previously allotted = to EOS Airlines, a bankrupt carrier that folded. The auction is to begin on= Sept. 3. The war of words heated up on Tuesday. The F.A.A. said the Port Authority= =E2=80=99s proposed ban would =E2=80=9Cviolate federal regulations=E2=80=9D= because airports receiving federal grants are =E2=80=9Crequired to provide= airlines with reasonable and nondiscriminatory access to their facilities.= =E2=80=9D In turn, the Port Authority filed a six-page motion with the United States = Court of Appeals for the District of Columbia Circuit, seeking to join a la= wsuit filed by the Air Transport Association, which represents the country= =E2=80=99s airlines and has challenged the auction plan. In the motion, Mil= ton H. Pachter, a lawyer for the Port Authority, argued that the F.A.A. lac= ked the legal authority to conduct such auctions and that the auction amoun= ted to an increase in user fees, which would require Congressional authoriz= ation. The agencies issued dueling press releases, each defending its actions and = criticizing those of the other side. =E2=80=9CThe slot auctions are necessary to ensure that all airlines have a= n opportunity to compete in the New York markets now that the number of fli= ghts at each of the three major regional airports has been capped,=E2=80=9D= Brian Turmail, a spokesman for the United States Department of Transportat= ion, which oversees the F.A.A., said in a statement. =E2=80=9CThe auctions = will preserve competitive airline service, help lower fares for service to = and from the region, and give new carriers an opportunity to enter the mark= et.=E2=80=9D In a statement posted on its Web site, the Port Authority said the auction = plan =E2=80=9Cwould result in higher costs for airlines, increased ticket p= rices for airline passengers, and fewer flights to small communities.=E2=80= =9D While the wrangling on Tuesday was dramatic, the amount of money involved i= s relatively tiny. The Federal Aviation Administration said that the three = New York-area airports received $27 million in grants under the federal Air= port Improvement Program in the 2008 fiscal year. In contrast, the Port Aut= hority=E2=80=99s 10-year capital plans for its airports is about $6 billion= . The federal agency=E2=80=99s threat, known as a notice of investigation, ca= lls on the Port Authority =E2=80=9Cto engage in good faith efforts to resol= ve the matter informally,=E2=80=9D saying that the Port Authority=E2=80=99s= disagreement with the agency =E2=80=9Cdoes not justify prohibiting basic a= eronautical access.=E2=80=9D Elected officials have been divided on the auction proposal. New York=E2=80= =99s two senators, Hillary Rodham Clinton and Charles E. Schumer, oppose th= e plan. Mrs. Clinton said in a statement on Tuesday that the threat was =E2= =80=9Ca new low on the part of the administration and could raise fares for= an already over-extended flying public. The Port Authority of New York and= New Jersey should not be blackmailed into implementing the administration= =E2=80=99s latest scheme, one that ignores the real problems and may also i= ncrease costs.=E2=80=9D She called on the transportation secretary, Mary E. Peters, to abandon the = auction idea and come up with long-term plans to improve safety and reduce = delays and congestion. Mayor Michael R. Bloomberg has come out in favor of the auction plan, writi= ng in an Aug. 8 letter to Ms. Peters and the Port Authority, =E2=80=9CThe l= argest culprit of delays today is the overscheduling of small planes by the= airlines.=E2=80=9D Flight caps, recently imposed by the Federal Aviation Administration at all= three of the region=E2=80=99s big airports, do not solve the congestion pr= oblem and hurt the New York economy, Mr. Bloomberg said, and big planes hav= e environmental advantages over small ones. He called for a =E2=80=9Climite= d=E2=80=9D experiment to try out more auctions. Mr. Bloomberg complained that =E2=80=9Cfeeder routes=E2=80=9D from nearby r= egional airports were clogging the runways. The Port Authority, however, ha= s said that if small planes are discouraged, smaller aviation markets will = be cut off from New York. And the airlines have said that the only way they= can fill big planes flying to major international destinations is by bring= ing passengers in on small planes. The Transportation Department has argued that with the caps in place, a fai= r way to distribute the available slots would be to give them to the airlin= es that showed they valued them most by paying for them. The auctioning of = two slots at Newark was to be a first step in this market-based experiment. Copyright 2008 The New York Times Company =0A=0A=0A <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". 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