The following press release from the Business Travel Coalition makes a good case for the FAA to back off and let the marketplace solve the ORD
traffic problems caused essentially UA
and their switch to RJs. While operations are up, number of seats has declined.
DOT Solution For O'Hare Problem Sidesteps Root Cause
Competition threatened; let the marketplace solve the problem
RADNOR, PA., August 18, 2004--The Business Travel Coalition (BTC) today raised concerns over the U.S. DOT's proposed solution for congestion at O'Hare International Airport. The 6 month "voluntary" plan locks in the number of hourly arrivals at the airport at 88 for all airlines, a reduction of approximately 5%. Low fare airlines are capped at 8 arrivals each, per day. While there may be localized and system-wide benefits in terms of a reduction in the average number of minutes of delay, the proposal comes with serious risks to competition, and does not address the root cause of the problem.
The number of operations at O'Hare is up some 10% in May 2004 compared with May 2000, while the actual number of seats is down 5% over the same period. This situation is a direct result of an increase in the use of Regional Jets (RJs) that comprised 44% of all flights at O'Hare in May of 2004 compared with 15% in May 2000. American and United airlines have caused this crisis and should solve it themselves without burdening others with government intervention.
The government's plan effectively caps the level of low fare new entry at O'Hare and represents a template for gaming the system and frustrating new entry at other airports such as Boston, Dallas or Atlanta. It is exceedingly unlikely that the proposal will remain just a 6 month temporary fix; the DOT today was effusive in its praise of the solution. The O'Hare arrivals cap does nothing to address the inefficient use of scare resources at the airport as evidenced by the dramatic increase in use of RJs; the root cause of the problem.
ALTERNATIVE DOT ACTION: DO
BTC chairman Kevin Mitchell stated, "A better solution is to 'think inside the box' and allow the marketplace to solve this problem. Connecting passengers do have alternative hub airports to fly through. If the DOT wants to do something it could issue a Press Release alerting passengers that connecting through O'Hare could be an arduous, unpredictable and costly process. Then we would see a shift in passengers to other hub airports and an immediate and significant increase in self-discipline in the scheduling departments at American and United."
Peter Buchheit, Director of Travel and Meeting Services for the Black & Decker Corporation said, "As is often the case with government solutions, what at first appears to be an effective intervention can result in marketplace distortions that cancel out intended benefits. Moreover, the federal government in the early years of deregulation did not truly understand how major incumbent airlines used government slot controls at airports to block new entry. We could be heading down that same path once again at O'Hare and other major airports."