The Transportation Department said yesterday it will permit airlines to buy and sell their valuable landing rights at Washington National and three other major airports for whatever price they can get.
The final regulation will take effect April 1 and will instantly create a significant cash asset for those airlines that already have won, at no cost, takeoff and landing rights at National and the other airports, Chicago's O'Hare and New York's LaGuardia and Kennedy airports.
Takeoff and landing rights are known as "slots" and are allocated by committees of airline executives. The four airports have slot systems because they have no room for more flights or they have to reduce noise by limiting the number of flights. The policy could be extended to other heavily used airports.
The new regulation is an outgrowth of a long-favored plan of former Office of Management and Budget director David A. Stockman to let the free market work. Theoretically, a People Express or a New York Air seeking to start cut-rate service at one of the airports (as both did at National) could do so only after they paid Eastern or United whatever they wanted for prime-time slots.
Critics of the "buy-sell" concept have worried that established airlines would price slots sky-high to keep out competition. No one is sure what a prime-time slot at O'Hare or LaGuardia might be worth, although some estimates have ranged as high as a one-time cost of $50,000 per slot. Each takeoff and each landing is considered a separate slot.
Transportation Secretary Elizabeth Hanford Dole's regulation would allocate without cost all of the slots at the four airports to the major airlines and the commuter airlines presently holding them. They could keep them, sell them or trade them. Slots would be protected for commuter airlines and for flights to cities with federally guaranteed air service.
Under a companion proposal that Dole expects to make final by April 1, 5 percent of existing slots would be made available by lottery, with preference to carriers not using the airport. The 5 percent would come from slots presently held but not used and, if necessary, by withdrawing some slots.
Dole's proposal is certain to meet opposition on Capitol Hill. Sen. Nancy Landon Kassebaum (R-Kan.), chairman of the Senate Commerce Committee's subcommittee on aviation, said she will introduce legislation to sidetrack it.
"I have never been sold on buy-sell until we tried another approach," Kassebaum said. She said she wants a rule that would require airlines to use their slots or lose them, and that would establish a deadlock-breaking method for the airline executives' scheduling committees. Those committees have deadlocked frequently, in effect shutting out new slot-seekers.
Rep. Norman Y. Mineta (D-Calif.), chairman of the House Public Works and Transportation subcommittee on aviation, said, "I don't understand how this administration . . . can adopt a rule that lets airlines keep all but a fraction of the valuable operating rights which have been awarded to them by the public for nothing. Now it allows them to realize the windfall profits because they'll be able to buy and sell them . . . . "
A senior Transportation Department official, who asked not to be identified, said, "We haven't given them anything they don't have, the privilege to take off and land . . . . Even if you think there is a windfall, you still have to take into consideration the enormous investment United has made at O'Hare, for example."
A spokesman for the Air Transport Association, which represents most major airlines, said its members would meet to discuss the rule. The ATA has generally supported "buy-sell," but most new airlines don't belong to the ATA.
George Aste of United Airlines, the nation's largest airline, and a strong proponent of buy-sell, said "We are pleased," but "I have reservations because I don't understand the need to withdraw slots from incumbents; either you have buy-sell or you don't."
Paul Schoellhamer, a vice president at Republic Airlines, which has had trouble getting the access to National that it wants, called Dole's rule "an improvement over the present situation . . . . We would have preferred less grandfathering to give the consumer more competition."