FAA delays first slot auction for Newark

updated 8:49 p.m. ET Aug. 28, 2008

The Federal Aviation Administration's plan for slot auctions at Newark airport got stuck at the gate on Thursday, a victory for airlines who have fiercely opposed government sales of landing rights at some of the nation's busiest airports.

The airlines had asked the FAA's Office of Dispute Resolution for Acquisition to halt the auction planned for Wednesday for two slots at Newark's Liberty airport, saying the FAA has no Congressional authority to sell the slots.

The ruling on Thursday does not address the merits of airline opposition to the auction, but says there's no harm in waiting. According to the ruling, the FAA said the slots could not be used before Oct. 26.

The two slots are tiny compared with the 1,200 daily slots at Newark. But they were to be the first of several auctions the FAA says are needed to reduce congestion and increase competition at the three airports run by the Port Authority of New York and New Jersey — Newark, JFK and LaGuardia.

The airlines and the Port Authority have argued that Congress never authorized the FAA to sell those takeoff and landing rights at the three airports. The Port Authority had threatened to block flights that used the auctioned slots. The FAA retaliated this week by saying the airports risked losing federal funding if they blocked flights.

Thursday's ruling came from the chief counsel for the FAA office that resolves procurement disputes, which is an independent office within the FAA. The office said it would expedite a final decision on the slot auctions.

The FAA had argued that the bids should be opened on Wednesday and said that if the auction was later found to be illegal, it could simply award the slots to the bid-winning airline for free. But the dispute resolution office said the bid would be a publicly available contract that would taint future bids.

FAA spokesman Brian Turmail called the ruling a "disappointing delay."

The Air Transport Association, which has sued to stop the auctions in addition to the procedural fight at the FAA, said in a statement that it expects that the final ruling by the dispute resolution office will "result in a determination that FAA lacks the legal authority to conduct the auction."

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