DOT 159-08
Contact: Brian Turmail, Tel.: (202) 366-4570
Wednesday, October 29, 2008

U.S. Transportation Secretary Peters Says New Airfare Data Shows Need for Competition at Newly Capped Airports to Avoid Sharp Increases in Ticket Costs
New DOT Data Also Shows Almost Half of Delays at Chicago’s O’Hare International Airport Can Be Linked Back to Record Airline Delays in New York

CHICAGO – New airfare data released today by the federal government underscores the need to allow all airlines access to aviation markets, particularly where local airports have hourly flight limits, known as caps, U.S. Secretary of Transportation Mary E. Peters announced today.

“Even though caps can cut delays, they also eliminate competition, and without competition, airfares rise,” Secretary Peters said. “Competition is the key to lower fares, and slot auctions are the best way to get new airlines to serve New York’s airports while caps are in place.”

The Secretary noted that while average domestic airfares in the second quarter of 2008 are up 8 percent nationwide, fares at capped airports increased at a faster rate. Most noticeably, the average airfare at Newark Liberty International Airport grew at double that rate, up 16 percent, after caps were put in place in May of this year.

Airfares at airports with histories of hourly flight caps, like O’Hare, JFK and LaGuardia airports, also increased faster than the national average, Secretary Peters added. Meanwhile, airfares declined by more than 25 percent in a single year when a new airline began serving Philadelphia, demonstrating that competition helps keep fares low, the Secretary said.

To address the lack of competition, the Department has issued rules to allow all carriers access to New York’s three capped airports, where physical constraints make it virtually impossible to add new runways. Secretary Peters noted the hourly caps would be lifted at O’Hare by the end of October, thanks to the city’s tireless efforts to expand capacity at the facility.

But she cautioned that new data by the Department’s Bureau of Transportation Statistics (BTS) show how Chicago’s efforts to expand capacity were being undermined by the record airline delays at New York’s airports. According to the Bureau, fewer than half the flights between O’Hare and New York’s three airports were on time, compared to almost 80 percent on time for all other flights.

“No amount of new concrete will help if your planes are stuck in New York,” the Secretary said. “Chicago shouldn’t have to play second city to New York’s aviation shortcomings.”

She said the Department also is working aggressively to reduce the record airline delays at New York’s three airports. She noted the Department has put a new air traffic czar in charge of the region’s airspace, is moving forward with an ambitious redesign of airspace patterns in the northeast and is accelerating the deployment of new aviation technology to the region.

She added that earlier this month, the Bush Administration committed almost $90 million to expand runway and taxiway capacity at JFK International Airport. She said the Department is taking these aggressive steps because “New York’s aviation challenges are just as much Chicago’s problems as they are every traveler’s headache.”

To access the Bureau of Transportation Statistics’ Air Fare page, please visit http://www.bts.gov/xml/atpi/src/index.xml.