A big part of the Department of Justice’s complaint about mergers is the concentration of airlines at major hubs and, most particularly, at slot controlled airports.

Well, even more specifically, they don’t want to see US Airways stranglehold on Reagan National Airport to change.

Wait.  What’s that you say?  DoJ wants them to give up slots?  Well, no, not exactly.

The DoJ approved US Airways getting their stranglehold.  The DoJ likes the stranglehold that US Airways provides.  It just doesn’t want that stranglehold changing.

This is the crazy that slots produce.  And it’s why I continue to believe that slot controlled airports need to periodically put all the slots up for auction for use for a set period of time.  Yes, I want an auction to lease those slots on at least an annual basis.

Why?  Because it does improve competition.  Airlines who wish to gain access can, at the right price.  At the same time, no airline will have an incentive to buy a slot and then use it inefficiently.

Right now, airlines are serving these airports with slots they are considered to “own” and use these slots to serve routes to hold control of an airport instead of, you know, earning an appropriate ROI on the route.

When a commuter flight between Charleston, WV and Reagan National provides 30 fares vs using that same slot for a flight between Reagan National and Dallas which has maybe as much as 130 fares being charged, you start to see the inefficiency.

But for some reason, no one wants smaller communities to lose those flights to the seat of power.  I do.  Those flights can’t yield enough to be efficient and should be relegated to flying to Washington Dulles airport instead.

It’s the idea of slots being owned by airlines that I object to.  I think they have to exist but I also think that the government should be earning money from them and they should be regularly available for re-allocation according to what someone is willing to pay for them.

I don’t wish harm to small communities but it’s time to recognize that there needs to be more cost efficient ways to serve these destinations as well.  Providing these cities with high frequency non stop flights each day is inefficient.  It’s time to allow the market(s) to find other, better ways to serve these cities.

Filed under: Airline Service, Airports by ajax