JFK Slot Limitations Protect the Rich

I have just been catching up on the JFK slot limitation rulemaking decision that was issued on January 15. I wondered at the time why there had not been more of an uproar among carriers who have fought so hard to eliminate the slot control rules over the years. Reading the decision provides the answer -- it does not really restrict incumbents, but protects them against new entry, particularly from Virgin Atlantic, which had wanted to expand JFK -- West Coast service. The major carriers were like Brer Rabbit -- oh please don't throw me into that briar patch of regulation.

At scheduling meetings called by the FAA, incumbent carriers withdrew a proposed 2008 increases in schedules and retimed the existing operations, but were not forced to reduce any current operations. The FAA describes this as follows:

During the individual air carrier sessions, American Airlines, Delta Air Lines, and JetBlue Airways, which together now account for approximately 75% of the total operations at JFK, withdrew the schedule increases that they proposed for summer 2008 during the airport's peak hours of3:00 p.m. through 7:59 p.m. They also retimed operations from those hours, in some cases below the levels that they operated during summer 2006. Other participants were agreeable to retiming some scheduled operations to reduce scheduling peaks and to produce a more efficient overall schedule. Because the summer 2007 schedules already exceed the announced targets during some hours, proposed new operations could not be accommodated at those times. The FAA offered alternative hours when the airport had capacity, however, to the air carriers seeking to retime previously conducted operations or to add new flights to their summer 2008 schedules.

Virgin Atlantic was the big loser, since its plans for operation were severely curtailed:

The FAA cannot accommodate Virgin America's suggestion that each air carrier

receive 30 operations at JFK during the peak hours. Because Virgin America, like all other U.S. and foreign air carriers, had the opportunity to add operations at JFK during the hours when they could realistically conduct them, it appears that their request more specifically seeks 30 operations during their preferred hours. As one of three major New York-area airports and a key international gateway, however, JFK is not a typical facility. During the summer of 2007, JFK enjoyed service from no fewer than 83 different U.S. and foreign air carriers. Of these, only four offered more than 30 daily operations at JFK. As an airport that is so significantly oversubscribed, it is simply impossible to grant every air carrier 30 operations at the times that they would prefer.

Thus, incumbent airlines continue to operate basically as they did before and are protected from new entry. The FAA did not seem to consider the basic question whether there should be any regulation at all. It simply assumed that passengers would choose not to be delayed, even if they have to pay higher fares. It never seemed to face the question of what was the appropriate trade-off between lower fares for consumers and schedule delays.