UPDATE 1-U.S. won't auction NY airport slots to ease delays

* U.S. Transportation Dept won't auction NY airport slots * U.S. Transportation Sec'y 'green lights' NJ Hudson Tunnel * Mexico truck safety will be improved in new trade plan (Adds comments, details in paragraphs 2-11 plus byline)

By Joan Gralla

NEW YORK, May 13 (Reuters) - U.S. Transportation Secretary Ray LaHood said on Wednesday he wants to rescind plans for slot auctions at New York area airports, a controversial Bush era plan to reduce flight delays that prompted lawsuits.

"We're still serious about tackling aviation congestion in the New York region," LaHood said at a breakfast for the Association for a Better New York. He added he will discuss how to solve the problem over the summer with "airline, airport and consumer stakeholders."

The Port Authority of New York and New Jersey, which runs local airports, had sued to block the Bush administration's plan to auction the slots to the highest bidders, saying this would drive ticket prices higher but not improve flight delays. A U.S. Court of Appeals stayed the plan in December.

Travelers flying in and out of New York and New Jersey's three main metropolitan airports often endure delays of 130 minutes or more and the backups spread throughout the country, according to a business group's study released in February. For more details, please click on: [ID:nN25494064].

LaHood, saying his "holistic" transportation strategyencompassed everything from ferries to high-speed rail, gave New Jersey's new Hudson River tunnel another green light.

The billion-dollar commuter rail link under the Hudson, the area's first new river crossing in decades, should be cleared to "move ahead with major construction activity in advance of federal funds," LaHood said.

Bidding on major contracts for the Hudson River tunnel, which will link New Jersey's commuter railroad with Manhattan's Pennsylvania Station, should start soon, LaHood said. New Jersey commuters often endure lengthy delays because the train tunnels are so overcrowded. The new tunnel will more than double the number of trains per hour to 48 from 23.