JOHN YDSTIE, host:
The government is taking a stronger hand in trying to ease a record number of flight delays and traffic congestion in the skies. Starting in March, the Department of Transportation will limit the number of flights that can take off or land at New York's JFK Airport during peak hours.
David Field covers the airline industry for the monthly publication Airline Business and joins now. Good morning.
Mr. DAVID FIELD (Editor, Airline Business): Good morning.
YDSTIE: So how is this cap going to affect travelers at New York airports?
Mr. FIELD: Well, if it works, it will make things better. New York airports are important. One-third of all U.S. flights either land at the New York airports or fly through New York airspace so are affected by this. If it works, those flights will be more timely; you won't have to fly to New York the night before for morning meeting and make sure. Unfortunately, if the caps work and limit the number of flights, it will also probably raise prices and restrict the entry of new airlines, or expansions of new airlines such as Virgin America.
YDSTIE: Mm-hmm. And there's actually talk of eventually auctioning off takeoff and landing slots. How does that work?
Mr. FIELD: That works with a great deal of money. Slots become very expensive. The scarcer they are, the more expensive they are. And the big if in this whole solution, so-called, is if FA will take the steps, the technological steps to create more slots. If you create more capacity, auctioning makes a great deal of sense. If you're auctioning off a scarce asset, all it does is raise the price and provide a real incentive not to create new capacity.
YDSTIE: Mm-hmm. The airlines agreed to this cap yesterday. Are they please with the plan?
Mr. FIELD: They say they're please. They're mostly pleased that the FA did not impose so-called congestion pricing, variable pricing, which raises the price to land at a popular hour. And they're very pleased that they were able to cooperate and work with the FA instead of the FA coming in and ordering them to give up slots and reduce flights. And they're very pleased that new entrants and small carriers probably won't get in to provide more competition.
YDSTIE: I guess there's some irony in this, a Republican administration actually boosting regulation of commercial flights. Do you find it surprising?
Mr. FIELD: I find it disturbing. In that any time you limit a scarce set, anytime you limit something valuable, it's not good for the general public. And our international partner, the International Air Transport Association, is really concerned about this. This may have the effect of making it more difficult for foreign flights to get in to JFK to expand the JFK. Yeah, I find it ironic and a little bit troubling, but if they take the right technological steps, things will work out.
YDSTIE: Thank you.
Mr. FIELD: My pleasure.
YDSTIE: David Field covers the airline industry for the monthly trade magazine Airline Business.