DC Circuit Refuses to Toss Limits on Airport Traffic

United Airlines jets sit on the tarmac at LaGuardia Airport in New York on March 15, 2017. (AP Photo/Seth Wenig, File)

WASHINGTON (CN) – The D.C. Circuit on Friday grounded a company’s challenge to the Federal Aviation Administration’s attempt to clear up delays at New York’s LaGuardia and John F. Kennedy Airports, finding it lacks standing to sue the agency.

The FAA has for decades limited the number of flights in and out of the New York City-area airports in an effort to cut down on rampant delays. In 2000, a Congress concerned about the rule’s anticompetitive potential told the agency to stop this policy, giving it seven years to wind down the so-called high density rule.

That in turn caused near-instant congestion at the airports, which rank among the busiest in the United States. In the months after the FAA started winding down the rule, delays on incoming flights at LaGuardia increased by 144 % and the airport accounted for a quarter of flight delays in the United States in September 2000, according to a ruling issued Friday by the D.C. Circuit.

In an effort to stop these rampant delays, the agency put in place an interim order in December 2006 that in many ways mirrored the high density rule.

Things went more smoothly at JFK initially, with the FAA allowing the high density rule to expire for that airport in 2007. But in short order the delays piled up, with more flights coming into the airport bringing with them a 6% drop in on-time arrivals.

So the FAA put in place another interim order for JFK that was similar to the one at LaGuardia. In both instances, the agency insisted the orders were only temporary.

Evocative of economist Milton Friedman’s observation about the staying power of temporary government programs, however, the FAA has renewed the orders six different times, as litigation and negative reactions from the public have stymied its efforts to land a permanent rule.

Enter Exhaustless, a company that says it can help break up delays at airports in part through a patent-pending system in which airlines would compete in auctions to buy slots at busy airports. The company’s method, known as Aviation 2.0, would set the number of slots that go up for auction and airline passengers would pay premiums on their tickets depending on how busy that time period is.

After the FAA renewed the interim orders in September, Exhaustless petitioned the D.C. Circuit to find that the agency did not have the authority under the Administrative Procedure Act to extend the orders yet again.

But the court on Friday did not even get to the company’s arguments, as U.S. Circuit Judge Sri Srinivasan wrote it did not show it meets the requirements for standing, the key legal threshold any party must clear before a court considers the claims in its lawsuit.

In order to show standing, any party bringing a lawsuit must show it suffered some harm that the party being sued caused and that the court could remedy. Srinivasan found Exhaustless lacking on this third requirement.

Exhaustless says that the FAA’s order has tamped down the market for its Aviation 2.0 technology, but Srinivasan wrote for a three-judge panel that there is no evidence that market would grow if the order was not there.

“We find it doubtful that two of the busiest airports in the nation would volunteer to act as the test sites for Aviation 2.0, even assuming the agency would permit them to do so,” Srinivasan wrote in the 12-page opinion. “In view of all of those legal and practical obstacles, the notion that vacating the interim orders would create a business opportunity for Exhaustless amounts to mere conjecture.”

Instead, Srinivasan wrote the company could persuade the FAA to adopt its technology through a formal petition for rulemaking.

Srinivasan was joined on the panel by U.S. Circuit Judges Karen Henderson and Nina Pillard.

The FAA did not immediately respond to a request for comment on the D.C. Circuit’s decision.

In a statement, Exhaustless CEO and founder Steven Endres said the company will work outside of court to implement its product.

“We are obviously disappointed in today’s ruling,” Endres said. “Congress has made it clear in the Airline Deregulation Act that they want private entities to bring market-based, technological innovation to the air travel industry and our patent-pending congestion prevention solution does just that. But without standing in this case, the court could not compel the FAA to let go of its anticompetitive allocation of the market for airline reservations, or slots.”

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