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Going Away

Why the Maxjet bankruptcy could signal the end of New York’s transatlantic air dominance.

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When Maxjet Airways, which offered cheap, all-business-class flights between JFK and London’s Stansted Airport, shut its doors on Christmas Eve, the news didn’t register a blip on most New Yorkers’ radars. The airline blamed pricey oil and tight credit. But there was another reason for Maxjet’s death, and it may mean this bankruptcy marks the beginning of the end for New York’s transatlantic aerial supremacy. For decades, a tangle of treaties regulated which airlines flying from which U.S. cities could land at the busiest European airports. The treaties favored old-line carriers, which centered their operations at JFK. But a new “Open Skies” deal between the U.S. and the European Union goes into effect on March 30, after which any airline can start transoceanic flights between any two cities. That’s a big problem for New York: Our airports have run out of runway, which means the big carriers are jealously protecting what they have here. Oil prices and credit problems may have hurt Maxjet, but the final blow was a rearguard action by American Airlines to start serving Stansted, which put its upstart rival into a tailspin.

The battles will get worse. Four days before Maxjet’s grounding, the FAA announced imminent caps on peak-hour flights out of JFK. By summer, there will be almost 20 percent fewer departures at peak hours from the airport—at the precise moment when newly freed airlines are clamoring for flights. This should diminish JFK’s delays, but it will also mean higher fares for peak flights and, ultimately, less choice, as the big guys dig in and freeze out the upstarts.

Even worse, with fewer slots at JFK and more routes available, airlines could give up on New York, scheduling European flights from newly accessible hinterland hubs like Atlanta, Houston, and Denver. Delta has a deal with Air France to add flights to Heathrow and Paris from not just JFK but also Atlanta, Cincinnati, and Salt Lake City. Houston is being eyed for nonstop routes to fellow oil towns like Dubai and Doha, once connected to the U.S. only via New York. It would be an ego blow to lose what’s left of New York’s jet-age airport exclusivity, but there are practical concerns, too. All those international planes at JFK leave and return laden with cargo—$134 billion in 2005—and the importation, handling, and inland shipping of these goods create thousands of jobs in the area, jobs that will leave if the flights do. (The Port Authority says JFK contributes $30 billion in economic activity to the metropolitan area each year.) So say good-bye to Maxjet and prepare for New York’s descent into flyover country.

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