Why is the announced auction unlawful?
It is unlawful for several reasons, but chief among them is that Congress has not given the Federal Aviation Administration (FAA), the authority to auction use of the airspace. Congress knows how to give agencies authority to auction licenses, as it did for the Federal Communications Commission (FCC) and spectrum; it has not done so here. On the other hand, Congress explicitly has prohibited FAA from implementing any new user fees, and auctioning slots is exactly that – a new fee to use the airspace. Finally, because the FAA announced this auction before it has finalized the auction rules for Newark airport, the action is also procedurally flawed.
What was filed?
ATA filed what is called a Petition for Review, which challenges the legality of the announced auction.
In what court was the case filed?
The ATA Petition for Review was filed in the U.S. Court of Appeals for the District of Columbia.
Why do you say the Department of Transportation (DOT) is being intellectually dishonest?
FAA has admitted that it does not have the authority to impose so-called market mechanisms, like auctions, to allocate slots. Nothing has changed since it made that admission. FAA’s claim that it can use contracting authority to allocate slots is intellectually dishonest because, as FAA knows, that authority is for acquiring or disposing of government property, whereas allocating slots is managing the airspace – a regulatory function.
When will the court rule?
It is difficult to say when the court will rule, but it will likely be several months at a minimum.
What are the next steps after the filing?
The court will issue a briefing schedule and set a date for oral argument. ATA and FAA will file briefs according to the court’s schedule.
Does your complaint prevent FAA from going ahead with the auction?
ATA’s action does not automatically stop FAA from conducting the auction. We are studying our options for injunctive relief.
Why is the FAA doing this now if it is in the middle of promulgating rules to conduct auctions at the New York area airports?
FAA’s plan is quite troubling and suggests that it does not have an open mind or that it is unwilling to consider the comments of the many stakeholders who opposed the proposed auction rules. From this announcement, it appears that FAA and DOT are bound and determined to force their theories of slot distribution on the industry without regard to their lack of legal authority or the views of the airlines, airports and others.
Who is representing ATA?
ATA is represented by the Washington, D.C. office of WilmerHale.
Does ATA claim the auction notice is arbitrary and capricious?
Yes, part of ATA’s complaint is that the notice is arbitrary and capricious under the Administrative Procedure Act and, therefore, should be invalidated.
Is there an appeal process?
Since the petition for review is in the U.S. Court of Appeals, the next step would be to the U.S. Supreme Court.
Why is ATA suing the FAA when ATA’s prior public statements were directed at DOT?
DOT is making the policy decisions about this issue, which is why our public comments against auctions and congestion pricing have been directed to DOT. We have sued FAA because it is the action agency – the announced auction purports to be an exercise of FAA authority.
Has ATA sued FAA or DOT before?
On occasion, ATA has sued successfully federal agencies, including DOT and FAA.
How would auctions harm airlines?
Carriers would be hurt in many ways. Among other things, FAA does not have authority to conduct auctions, so an illegal auction hurts everyone. FAA and DOT cannot be permitted to ignore Congress. Carriers have given up slots to help reduce congestion, and auctioning these slots would only add to congestion. Also, auctioning slots interferes with the investments that carriers have made in building their operations and facilities at Newark. And, not to be overlooked, is that this is the worst time in airline history to add more costs – airlines already are coping with unprecedented fuel prices and a softening economy.