Airport slot auctions proposed for Newark, JFK

WASHINGTON (Reuters) - The U.S.government proposed on Friday to auction some takeoff and landing rights at the New York area's two international airports, as a way to boost competition, a plan that drew sharp criticism from airlines.

The Transportation Department plan for Newark airport in New Jersey and New York's John F. Kennedy airport -- and a similar one announced recently for the region's other big airport, LaGuardia -- is part of a larger initiative to address congestion and delays.

A third of all flights -- excluding international service -- fly through New York air space or take-off and land at one of the region's airports, according to the Federal Aviation Administration.

The region's three big airports rank consistently at the top for flight delays, partly due to airline scheduling, weather problems and congestion.

Transportation officials are this spring capping the number of flights airlines can offer at peak times at Newark and JFK to reduce congestion. Caps are already in place at LaGuardia. To ensure caps do not favor entrenched major carriers, regulators want to skim some access rights -- or slots -- and offer them at auction.

"We need a way to keep aviation competition alive in the free market capital of the world," Transportation Secretary Mary Peters said. "This new proposal will do much to make flying to New York attractive."

A slot is equal to airport rights for one takeoff and one landing.

US Airways Group Inc (LCC.N: Quote, Profile, Research, Stock Buzz), Delta Air Lines Inc (DAL.N: Quote, Profile, Research, Stock Buzz), JetBlue Airways Corp (JBLU.O: Quote, Profile, Research, Stock Buzz), American Airlines, a unit of AMR Corp (AMR.N: Quote, Profile, Research, Stock Buzz) and Continental Airlines Inc (CAL.N: Quote, Profile, Research, Stock Buzz) are major U.S. carriers at Newark, LaGuardia and JFK.

The agency is proposing to shift ownership rights for JFK and Newark slots from the FAA to the airlines for 10 years. Airlines would be required to give back a percentage of slots for auction.

Depending on the give-back formula, between 91 and 179 slots of 1,245 would be sold at JFK and roughly 96 of 1,219 slots would be auctioned at Newark.

Depending on the auction plan, airlines could re-bid for old slots -- gaining back some, all or more -- or lose them entirely.

Major U.S. and international airlines condemned the idea, suggesting they may sue to try and prevent the plan from taking effect, if it is finalized.

"These ill-conceived and unlawful proposals are driven by ideology and will not reduce congestion or flight delays," said James May, chief executive of the Air Transport Association, the chief lobbying group for the biggest U.S. carriers.

Transportation officials hope to finalize the proposal in the coming months and begin auctions late this year or early next.

(Reporting by John Crawley and Andre Grenon)