The Clinton administration Thursday created a pathway for a new passenger airline service that would cut fares from Buffalo to New York City by about 65 percent.
As a result, JetBlue announced that regular flights between New York's John F. Kennedy International Airport and Buffalo, Rochester and Syracuse will begin in the next 18 months.
The new service to upstate New York was promised during a news conference by Transportation Secretary Rodney E. Slater, JetBlue President David Neeleman and Sen. Charles E. Schumer, D-N.Y.
"I stand here like a proud uncle to announce the triumph of an airline," Schumer said. "The era of sky-high fares is about to end."
"JetBlue is the perfect airline to break the arrogance of monopoly power which other airlines used as ransom to hold upstate's economy hostage," Schumer said.
The new competition with the major trunk airlines serving Buffalo Niagara International Airport is being made possible by a special allocation of 75 takeoff and landing slots -- possibly the most issued at one time by the U.S. Transportation Department in 13 years.
Schumer led an intense lobbying effort for the issuance of the new slots by Slater, who said JetBlue "will provide low-fare service, increased competition and better access to New York for travelers in many communities. . . . The Clinton administration has championed enhanced airline competition so that all Americans may benefit."
JetBlue officials said round-trip fares would range from $100 to $300, depending on advance purchase and other circumstances. Current walk-up fares charged by the major airlines range from $414 to $448.
JetBlue, the new name of New Air, will start slowly. The company expects delivery of its first jetliner Dec. 3. At that point, it will apply for final certification by the Federal Aviation Administration.
By the end of next year, JetBlue plans to serve a dozen cities with 10 aircraft. The company announced that it has options to buy 82 new Airbus A320 aircraft valued at $4 billion.
Neeleman said the company is capitalized at $130 million with backing from financier George Soros and Chase Capital Partners.
Slater said an assessment by the Transportation Department shows that "JetBlue has funding sufficient to carry out its operating plans."
No decision has been made by JetBlue about which of the three upstate cities would receive service in the start-up round.
Cost, accessibility and other factors will influence the decision, Neeleman said. Among them are fees that the Niagara Frontier Transportation Authority charges the airlines for landing in Buffalo.
Buffalo's fees are nearly three times that charged in Rochester and more than double that charged in Syracuse. The higher landing fees in Buffalo, NFTA officials said, subsidize operations at the authority's money-losing airport in Niagara Falls.
The NFTA wants to privatize Niagara Falls International Airport. The authority has sent requests for proposals to airport operators.
Despite the fees, NFTA Executive Director Lawrence M. Meckler thinks that Buffalo has the strongest suit of the three because it serves the largest market and already handles many more New York-bound passengers than Rochester or Syracuse.
Meckler said Buffalo fees for airport gate rental are lower than those in Rochester or Syracuse.
The allocation of slots -- federal landing and takeoff rights -- to JetBlue was hailed as "great news for us" by Meckler. "It's one more hurdle out of the way for low-cost service from Buffalo to New York City."
Meckler said the NFTA has been in continual contact with JetBlue to persuade the start-up airline to pick Buffalo for its first upstate market.
"There's a tremendous pent-up demand for service to New York City. We think this is the first place they should go," Meckler said.
Neeleman said the potential for low-cost service in Buffalo is large. He said that 14 years ago, there were 4,000 more passengers flying out of Buffalo daily than there are now. The low fares, Neeleman said, will revive the airline business in Buffalo that was choked off by the major trunk carriers.
Rep. John J. LaFalce, D-Town of Tonawanda, who joined Schumer two years ago in a campaign to break the airlines' near monopoly in Buffalo, praised Slater's decision as "a tremendous step in the right direction for Western New York. I wish JetBlue a prosperous future."
Rep. Tom Reynolds, R-Clarence, said JetBlue's entrance into the upstate market will help business travelers and spur economic development. Rep. Jack F. Quinn, R-Hamburg, called Slater's order "a positive step toward resolving the region's aviation concerns."
JFK Airport is on the far south side of Queens, about five miles farther away from midtown Manhattan than LaGuardia Airport, which has a higher proportion of domestic connections than JFK airport. However, bus transit service from JFK to Manhattan is only $3 more than the $10 charge for a ride from LaGuardia.
JFK does have regular service to Chicago, Florida and the Pacific Coast and is adding more domestic flights. In two years, there will be a light rail-subway link from JFK to Manhattan.
The airline petitioned the Transportation Department earlier this year for 75 takeoff and landing slots at JFK between 3 and 8 p.m., when the skies are most congested. Reynolds and Quinn joined Schumer in supporting that request.
News Staff Reporter Patrick LaKamp and Washington Bureau assistant Sean Nealon contributed to this article.