The Trump administraton wants to repeat Biden-era competition mistakes in the airline industry.
FAA Administrator Bryan Bedford has been in the news saying that the agency wants the 22 New York LaGuardia slots that Spirit Airlines had to go to a discount carrier. He’s said that if they wind up with a major airline, the FAA may confiscate them and retire them instead.
- Bankruptcy creditors want maximum proceeds from what they estimate as an $87 million asset
- The FAA wants to engineer a specific competition outcome
- But the government may also want to stick it to creditors, who didn’t go along with the administration’s (illegal) bailout plan for Spirit.
Here’s what he said:
“As long as the slots are going to a low-fare airline and for the public good, the FAA and DOT would support that,” Bedford told reporters in Charleston, South Carolina, as quoted by Bloomberg.If that is not an option, he said he believed the slots should be retired “and just get rid of the congestion.”
Does that mean only Frontier Airlines, or theoretically Allegiant could buy the slots? Frontier can’t really make money at the cost of New York airports. Sure, they rely primarily on passenger fees, but airport costs represent about half of base fare. The economics of serving New York are hard. And they’ve historically leased slots rather than actually buying them outright.
Mr Kirby discussing the challenges of ULCCs in high cost airports. pic.twitter.com/ICPBI5pzV6
— JonNYC (@xJonNYC) June 3, 2026
This is more ‘government putting its thumb on the scale’ of winners and losers for scarce resources in aviation. We should actually be replacing slot controls with congestion pricing so that the government isn’t gifting valuable rights to use the most important airports and exclude competition.
In his Airlines Confidential interview only a week earlier, Bedford suggested that the government should should be managing airline schedules because each airline scheduling themselves causes too much congestion.
This is part and parcel of the same central planning that members of the Trump administration were criticizing the Biden administration for only two months prior when Spirit Airlines went under, arguing that it was the Biden administration’s attempt to micromanage the industry and ensure that Spirit’s planes all operated under the ultra-low cost model that caused them to block JetBlue’s acquisition of the troubled carrier. (There is some merit to this argument, but it is overstated and the reality much more complicated.)
They just can’t help themselves but to repeat the same mistakes that they criticize. Indeed, the entire point of the Airline Deregulation Act that’s made air travel within reach of Americans, was that the federal government needed to stop centrally planning where carriers would fly and what they could charge.
“low-fare airline” and LCC are not the same thing.
Folks will bid as if the FAA administrator didn’t make this comment, and then negotiate with the government afterwards.
The real question is who will take over Terminal A, if anyone. You may not like LGA very much, but folks continue to enjoy the new LGA TB and TC (just had the very tasty LGA burger at the Chase lounge – yum). Having to go to Terminal A would be a huge downgrade. Maybe Porter would want it for shuttle service to Toronto or something like that if they consolidate away from EWR and move closer to coordination with AA/Oneworld.
Is the US airline experience better now or before deregulation? I am not certain.
I think this is a rare case where government intervention is actually a good idea. One of the reasons why there is little innovation in the domestic aviation sector is the chicken-and-the-egg slots and capital problem. It is in practice very difficult to get startup capital for an airline without already having slots. Yet it is generally very difficult to get slots in the first place. The problem is magnified by incumbent airlines’ incentive to use their massive capital access to temporarily pay above-market rates for fresh slots to “catch and kill”, preventing new market entry and strangling nascent competitors in the crib (forcing them to use inferior second-tier airports).
The optimal solution is a handicapped auction (where new and low-fare airlines get a significant handicap to win the auction but incumbents can stil bid and win at a higher price if they truly need the slots). This disincentives the “catch and kill” strategy and promotes better long-run competition.
Some of the airlines that could be considered “LCC” would find LGA a difficult airport to operate from. Mainly Avelo, Breeze, Allegiant and to a certain extent Sun Country look for underserved routes that they can operate less than daily. That’s not LGA. Frontier is losing too much money.
JetBlue and Southwest might have an interest.
They are going to bring the Civil Aeronautics Board back, aren’t they?
(Probably as part of a Making Aviation Great Again campaign, with our luck…)
Best part of this article is we didn’t call Southwest a “low cost carrier” anywhere in it.
Maybe we’ve finally turned that corner?
Isn’t this a backdoor way of returning to regulation?
@gary: the 1978 deregulation act is responsible for you having to close your laptop earlier
the root cause of lga congestion is so obvious and never discussed
it’s the same flaw in deregulation
finite capacity of a government resource can not and will not find and continually re-balance a competitive equation
it is mathematically impossible
in 1978, lga was capped at 78 ops per hour, with short nines and 732s balanced by FIFTEEN widebody 10-10 and 1011-1 ops per day
yes the DC-10 and L1011 operated from lga at the time of deregulation
number of DC-10 and L-1011 hull losses at lga: zero point zero point zero
flashforward to the era of kettle service badger bridge and tunnel nirvana:
the cap is now 71 ops per hour, down 8% from 1978
AND…… 49%….. FORTYNINE PERCENT…. of all ops are RJs 75 seats or under
not controlling this insane use of slots, gates and airspace is something only late-stage capture us government could conjure up
the rest of the world laughs at us for this stupidity
No need for a new practice. Sell them to the high bidders. Use the money to help pay back the creditors. Do not turn the creditor’s contracts into charitable donations.