Critics of the Transportation Department's plan to permit airlines to freely buy and sell their landing rights at four of the nation's busiest airports told a Senate subcommittee yesterday that the plan would give away billions of dollars of federal assets for nothing.
"Where did this attack of generosity come from in the government decision to dispose of airport slots?" said Charles M. Barclay of the American Association of Airport Executives in testimony before the Senate Commerce subcommittee on aviation.
The plan, which will take effect on April 1 unless Congress adopts alternate legislation, will allow airlines to sell their rights -- often called slots -- at Washington's National, Chicago's O'Hare and New York's LaGuardia and Kennedy airports. The airports operate slot systems because they have no room for more flights.
The new regulation is an attempt by the Transportation Department to allow the free market -- not the government -- to govern the use of those crowded airports. It would replace the current method of allocating slots through committees of airline executives. In the past, disagreements among scheduling committees have been frequent.
But critics of the DOT regulation say that since some prime slots could cost as much as $1 million, the plan will unfairly favor large carriers and cut competition from newer companies. There is also concern that the plan will encourage airlines to fly to the markets with the most customers, cutting service to smaller communities.
"The heart of our concern is in wondering why we are taking a public asset and essentially giving it away," said Sen. Nancy Landon Kassebaum (R-Kan.), subcommittee chairman and sponsor of a bill that would use a lottery system to allocate slots at the four airports.
But representatives of some of the nation's largest airlines said yesterday that it would be unfair to auction rights that many have invested millions of dollars to acquire.
"It is carriers like United and American that have made O'Hare possible," said Gene E. Overbeck, an American Airlines senior vice president. "It has taken huge investments, and commitments, to make that airport work."
The Federal Aviation Administration has said that there are about 4,600 capacity controlled slots at the four airports. A report this week from the Wall Street firm of Prudential-Bache estimated that the slots could be worth from $3 billion to $4.6 billion. The prices are difficult to predict because a slot at a prime landing time is certain to be far more valuable than one in the middle of the night.
Under the DOT rule, slots would be protected for commuter airlines and for flights to cities with federally guaranteed air service. But the fiscal 1987 budget released this week calls for elimination of funding for the program that guarantees air service to smaller cities.
"It [guaranteed service to certain cities] is a bulwark of the air transportation system," said Donald Reilly, president of the Airport Operators Council International, which opposed the new regulation. "It just won't make good economic sense to fly there if this is adopted."