The U.S. Transportation Dept. is backing away from congestion pricing for New York airports, and sources say DOT is instead looking at slot auctions as well as extending flight caps to all three New York region airports.

DOT officials last week told industry representatives it will not carry out its threat to introduce congestion pricing to alleviate New York delays (DAILY, Dec. 7). But the White House still wants to bring in some sort of market mechanism for New York, and DOT has indicated some type of slot auction system could be proposed.

The department created an aviation rulemaking committee (ARC) to consider ways to reduce New York congestion. The ARC, comprising mainly aviation industry stakeholders, has held a series of meetings over the past several weeks, and is due to conclude today. DOT is basically using the ARC as a sounding board to help formulate policy recommendations for the New York airports.

From the start, the airline industry has opposed two of DOT's main concepts -- congestion pricing and capping operations at New York Kennedy Airport. It appears this opposition has been enough for congestion pricing to be abandoned, at least for now.

Some sources say DOT is considering auctioning slots created by new airport capacity, as well as reclaiming some existing slots from airlines to redistribute them by auction. Airline groups would probably be okay with new capacity slots being auctioned, but any attempt to reclaim and auction existing slots would draw vehement opposition. DOT would have to begin a formal rulemaking process to introduce any slot auction system.

DOT has also been meeting with airlines to reduce operations at JFK to about 80 an hour, a rate that airlines and airport authority say is too low. Sources say DOT is yielding slightly, and is prepared to raise the cap to 83-85 operations an hour. Also, DOT is believed to be considering extending the flight caps to all three New York area airports, partly to address concerns that airlines could cut flights at JFK and add them at Newark.

In another important development, DOT and the White House are believed to be increasingly sympathetic to airline arguments that the International Air Transport Association's World Scheduling Guidelines (WSG) should be adopted to make operations more efficient at the New York airports. This approach also received a boost when the Port Authority of New York and New Jersey last week advocated using the WSG, as part of its list of recommendations for reducing congestion.