Air Transport World

Big Apple turf wars.

US airline rivals race to dominate a market they once neglected in favor of interior hubs

For many years following deregulation, US Major airlines regarded New York primarily as a domestic market.

LaGuardia Airport is slot-controlled and has short runways, precluding international flights other than pre-cleared ones to nearby destinations. And except for Pan Am, TWA and those who acquired their international rights, US carriers operated mostly domestic, O&D services at John F. Kennedy International as well.

Newark, the third airport operated by the Port Authority of New York and New Jersey, mostly served airlines seeking lower-cost space or unable to get in elsewhere. Now-defunct People Express did start a hub from Newark in 1981 but offered only limited international flights.

US airline requests for new international rights usually were aimed at hubs in untraditional US gateways. In so doing, they conceded JFK's international traffic to non-US rivals and settled for feed passengers. Today, 80% of JFK flights are O&D, almost evenly divided between international and domestic routes.

Boy how times change. US airlines are spending billions of dollars to stake their claims to New York's international business and build hubs in the bargain. The redevelopment of Kennedy's unit terminals is a re-enactment of the 1960s. And Newark has bloomed once more, triggered years ago by Continental Airlines' acquisition of People Express.

The reincarnation of multiterminal JFK was not supposed to happen. In the 1980s the Port Authority floated a modernization plan, JFK 2000, that would have included a huge new central complex. It was designed to increase efficiency and edge out the crazy quilt of nine buildings erected from 1959 through the 1960s. All but one of those, the International Arrivals Building, were occupied by individual airlines and their few tenants. Tower Air moved into a 10th terminal, converted from another use, in 1993.

Robert J. Kelly, director of the PA's aviation department and previously manager of JFK, insists that "everyone bought into [JFK 2000] at the time." Basic construction--baggage handling, tunnels--began.

Then came big airline losses in the early 1990s. In 1990-92, 40% of JFK's traffic was in the hands of bankrupt or near-bankrupt airlines: Pan Am, TWA, Eastern, Braniff, Texas Air/Continental. The losses blunted whatever enthusiasm may have existed for JFK 2000. Kelly also suggests airlines had second thoughts about losing their identity in a central terminal. The plan was put on hold through 1995-96.

What to do next? The PA still had to modernize JFK and, after some second thoughts of its own, felt a rail link among terminals and to a major rail/subway point was crucial to the airport's future. Kelly "clearly recall[s] the airlines would not support an on-airport system unless it connected to an off-airport" transit line. "The No. 1 issue at JFK is access. You won't-be able to get to JFK [by road] in eight years."

Yet, until earlier this year the airlines were suing the PA over use of passenger facility charges to build the dedicated transit line, called AirTrain, from the airport to the Jamaica, Long Island, station. …

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