Our elders told us stories about how airlines got their routes in the old days.
For a route between, say, St. Louis and Seattle, the Civil Aeronautics Board would convene behind closed doors to consider various matters, including the views of this or that senator or committee chairman, and it would decide which airline got the prize.
All that changed with deregulation, when Alfred Kahn got the idea of opening the door and giving all routes to all airlines. This approach allowed the market to decide who got the prize. It also marked a step in the direction of "good government." One less smoke-filled room.
Alas, this is not how we deal with slots, those valuable slices of time that are just long enough to land an airplane. At Newark, the air traffic control system cannot accommodate every aspiring competitor, so takeoffs and landings are capped at 83 per hour. Any airline can have a route to Newark, but only a chosen few get slots.
And that brings us to ask: Who are the chosen?
To pass muster with the Justice Department, merger partners Continental and United agreed to lease 18 slot pairs to Southwest. This idea has been getting well-deserved applause from all over for bringing new competition to the New York area, but the applause has drowned out a few questions, such as:
Why Southwest? And why only Southwest? Was this a private, backroom deal? Why wasn't there an auction?
Readers will recall that when Delta and US Airways tried to swap some LaGuardia and Washington Reagan slots between themselves, the Transportation Department balked at the prospect of outsized market shares and ordered the carriers to auction off some slots.
They refused and offered to lease them out in private deals, whereupon the Justice Department denounced the carriers for trying to "choose their own competitors."
But isn't that what Continental and United just did?
If the government thinks an auction is the fair way to redistribute slots in the case of the Delta-US Airways trade, why wasn't it the preferred approach for the Continental-United merger?
These slots are not the carriers' private property. If the merger partners have to sell assets such as airplanes or office buildings, they can do it in any manner they choose.
Slots, however, represent access rights to public airspace; they are a scarce and valuable resource, not unlike mining or drilling rights. It should be the job of our government custodians to ensure that they are distributed among interested airlines in a fair and open manner.
The end result in this case might be a winner. We wish we could say the same for the process.