updated 8/6/2008 10:51:44 AM ET 2008-08-06T14:51:44

The government will auction off a prized takeoff and landing slot at Newark Liberty airport next month, as the first step in an experiment to ease nationwide travel delays through changes in New York City airspace.

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A top airline industry group immediately said they would sue to stop it.

The Transportation Department made the announcement a day after the managers of the three major New York City area airports, including Newark, N.J., vowed to block the auction plan, either in the courts or Congress.

The Bush administration has championed a limited auction of takeoff and landing slots at those airports to reduce flight delays. Such delays in New York have a cascade effect, causing backups throughout the country.

"Our system today is wholly unreliable. Businesses and passengers can't depend on airline schedules," said D.J. Gribbin, the top lawyer for the Transportation Department. "At a time when our economy is in a very sensitive state, this kind of economic drag simply cannot be tolerated."

Transportation Secretary Mary Peters has argued that auctioning a fraction of takeoff and landing slots at those three airports, in combination with limits on the number of planes during peak hours, will make the entire air travel system more reliable. The government says nationwide, two out of three flights delayed 15 minutes or more last year were due to a backup in New York's jammed airspace.

Gribbin said the auction will be held Sept. 3 of a daily landing slot and a daily takeoff slot that became available when an airline operating at the airport went bankrupt. Both international and domestic airlines are welcome to bid. Actual use of the slot would not begin until November, he said.

There will be no minimum bid for the round-trip slot, and officials aren't sure exactly what it is worth, but Gribbin said it could be hundreds of thousands of dollars.

The Port Authority of New York and New Jersey on Monday said it would block any flights resulting from an auction, by not allowing them to use terminal gates or other ground facilities. The government says they have no such power.

The trade group representing the nation's largest airlines said they would defeat it in court.

"DOT has left us no options — we will sue to prevent this illegal action," said Air Transport Association President James May. The group did not say when it would file legal papers. The Port Authority had also threatened to sue.

New York Sen. Charles Schumer, a Democrat, said he would not wait to see travelers in his state "used as guinea pigs in Secretary Peters' ill-fated experiment."

The calendar is driving both sides toward a showdown.

A congressional committee is about to consider legislation that would bar the Bush administration from implementing the flight auctions, but Congress won't be back in session until next month.

Lawmakers, including Sen. Kay Bailey Hutchison, R-Tex., and Sen. Patty Murray, D-Wash., sent letters to the administration Tuesday objecting to the plan.

"Given the current fragility of the U.S. airline industry, we believe it is not the time to move forward with such a new, untested, unproven and possibly unauthorized policy," Hutchison said in the letter signed by three other influential senators on the Commerce Committee.

The Bush administration, meanwhile, aims to auction off 70 or 80 slots at each of the three airports before they leave office early next year.

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