[Federal Register: August 29, 2006 (Volume 71, Number 167)]
[Proposed Rules]
[Page 51359-51380]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29au06-22]
[[Page 51359]]
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Part III
Department of Transportation
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Federal Aviation Administration
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14 CFR Part 93
Congestion Management Rule for LaGuardia Airport; Proposed Rule
[[Page 51360]]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 93
[Docket No. FAA-2006-25709; Notice No. 06-13]
RIN 2120-AI70
Congestion Management Rule for LaGuardia Airport
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: The FAA is proposing a rule to address the potential for
increased congestion and delay at New York's LaGuardia Airport
(LaGuardia) when the High Density Rule (HDR) expires there on January
1, 2007. The rule, if adopted, would establish an operational limit on
the number of aircraft landing and taking off at the airport. To offset
the effect of this limit, the proposed rule would increase utilization
of the airport by encouraging the use of larger aircraft through
implementing an airport-wide, average aircraft size requirement
designed to increase the number of passengers that may use the airport
within the overall proposed operational limits.
DATES: Send your comments on or before October 30, 2006.
ADDRESSES: You may send comments [identified by Docket Number FAA-2006-
25709] using any of the following methods:
DOT Docket Web site: Go to http://dms.dot.gov and follow
the instructions for sending your comments electronically.
Government-wide rulemaking Web site: Go to http://www.regulations.gov
and follow the instructions for sending your
comments electronically.
Mail: Docket Management Facility; U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590-0001.
Fax: 1-202-493-2251.
Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
For more information on the rulemaking process, see the
SUPPLEMENTARY INFORMATION section of this document.
Privacy: We will post all comments we receive, without change, to
http://dms.dot.gov, including any personal information you provide. For
more information, see the Privacy Act discussion in the SUPPLEMENTARY
INFORMATION section of this document.
Docket: To read background documents or comments received, go to
http://dms.dot.gov at any time or to Room PL-401 on the plaza level of
the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: Molly W. Smith, Office of Aviation
Policy and Plans, APO-001, Federal Aviation Administration, 800
Independence Avenue, SW., Washington, DC 20591; telephone (202) 267-
3275; e-mail molly.w.smith@faa.gov.
SUPPLEMENTARY INFORMATION:
Comments Invited
The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. We also
invite comments relating to the economic, environmental, energy, or
federalism impacts that might result from adopting the proposals in
this document. The most helpful comments reference a specific portion
of the proposal, explain the reason for any recommended change, and
include supporting data. We ask that you send us two copies of written
comments.
We will file in the docket all comments we receive, as well as a
report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. The docket is available for public
inspection before and after the comment closing date. If you wish to
review the docket in person, go to the address in the ADDRESSES section
of this preamble between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. You may also review the docket using the
Internet at the Web address in the ADDRESSES section.
Privacy Act: Using the search function of our docket Web site,
anyone can find and read the comments received into any of our dockets,
including the name of the individual sending the comment (or signing
the comment on behalf of an association, business, labor union, etc.).
You may review DOT's complete Privacy Act Statement in the Federal
Register published on April 11, 2000 (65 FR 19477-78) or you may visit
http://dms.dot.gov.
Before acting on this proposal, we will consider all comments we
receive on or before the closing date for comments. We will consider
comments filed late if it is possible to do so without incurring
expense or delay. We may change this proposal in light of the comments
we receive.
If you want the FAA to acknowledge receipt of your comments on this
proposal, include with your comments a pre-addressed, stamped postcard
on which the docket number appears. We will stamp the date on the
postcard and mail it to you.
Availability of Rulemaking Documents
You can get an electronic copy using the Internet by:
(1) Searching the Department of Transportation's electronic Docket
Management System (DMS) Web page (http://dms.dot.gov/search); (2) Visiting the FAA's Regulations and Policies Web page at http://
http://www.faa.gov/regulations_policies/; or
(3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.
You can also get a copy by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue, SW., Washington, DC 20591, or by calling (202) 267-9680. Make
sure to identify the docket number, notice number, or amendment number
of this rulemaking.
Authority for This Rulemaking
The FAA has broad authority under 49 U.S.C. 40103 to regulate the
use of the navigable airspace of the United States. This section
authorizes the FAA to develop plans and policy for the use of navigable
airspace and to assign the use that the FAA deems necessary for its
safe and efficient utilization. It further directs the FAA to prescribe
air traffic rules and regulations governing the efficient utilization
of the navigable airspace. The FAA interprets its broad statutory
authority to ensure the efficient use of the navigable airspace to
encompass management of the nationwide system of air commerce and air
traffic control.
In addition to the FAA's authority and responsibilities with
respect to the efficient use of airspace, the Secretary of
Transportation is required to consider several other objectives as
being in the public interest, including: Keeping available a variety of
adequate, economic, efficient, and low-priced air services; placing
maximum reliance on competitive market forces and on actual and
potential competition; avoiding airline industry conditions that would
tend to allow at least one air carrier unreasonably to increase prices,
reduce services, or exclude competition in air transportation;
encouraging, developing, and maintaining an air transportation system
relying on actual and potential
[[Page 51361]]
competition; encouraging entry into air transportation markets by new
and existing air carriers and the continued strengthening of small air
carriers to ensure a more effective and competitive airline industry;
maintaining a complete and convenient system of scheduled air
transportation for small communities; ensuring that consumers in all
regions of the United States, including those in small communities and
rural and remote areas, have access to affordable, regularly scheduled
air service; and acting consistently with obligations of the U.S.
Government under international agreements. See 49 U.S.C. 40101(a)(4),
(6), (10)-(13) and (16), and 40105(b).
I. Background
A. The High Density Traffic Airports Rule at LaGuardia
The FAA manages congestion and delay at LaGuardia by means of the
HDR, which is codified under 14 CFR part 93, subpart K. The HDR took
effect in 1969 as a temporary rule, but since it was effective in
reducing congestion and delays, it became permanent in 1973.
The HDR establishes limits on the number of take-offs and landings
during certain hours at five airports, including LaGuardia.\1\ In order
to operate during the restricted hours, a carrier needs a reservation,
commonly known as a ``slot.'' Slots were initially allocated through
airline scheduling committees, operating under then-authorized
antitrust immunity, and the airlines would agree to the allocation.
After the Airline Deregulation Act in 1978, new entrant airlines
formed, and the pre-existing legacy carriers sought to expand their
operations. This increased competition made it even more difficult for
airlines to reach agreement, and the scheduling committees began to
deadlock.
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\1\ The limits at Newark were suspended in 1970 and were
eliminated at Chicago O'Hare International Airport in July 2002.
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In 1985, a new Subpart S was added to Part 93 by the Department of
Transportation that established allocation procedures for slots,
including Use-or-Lose provisions and permission to buy and sell slots
in a secondary market (50 FR 52195, December 20, 1985). These
procedures replaced the scheduling committees.
On April 5, 2000, Congress enacted the Wendell H. Ford Aviation
Investment and Reform Act of the 21st Century (AIR-21 or the Act). The
Act phases out the HDR at three of the covered airports, with the rule
scheduled to terminate at LaGuardia on January 1, 2007. Additionally,
AIR-21 expanded existing operations at LaGuardia by directing the
Secretary of Transportation to grant exemptions for certain flights
from the HDR's operational limits prior to the HDR's termination at
that airport. Specifically, AIR-21 authorized exemptions for flights
operated by new entrant carriers or certain flights that would serve
Small-Hub and Non-Hub Airports as long as the aircraft being used has
fewer than 71 seats.
In phasing out the HDR, Congress recognized the possibility that
there could be an increase in congestion and delay at the affected
airports. Therefore, under the section that phases out the rule, the
Act states that ``[n]othing in this section * * * shall be construed *
* * as affecting the Federal Aviation Administration's authority for
safety and the movement of air traffic.'' 49 U.S.C. 41715(b).
B. Resurgence of Unacceptable Levels of Congestion at LaGuardia
As a result of the AIR-21 legislation, the DOT approved more than
600 exemption requests for flights at LaGuardia. By fall 2000, air
carriers had added over 300 new scheduled flights at LaGuardia, with
plans to operate more in the coming months.
With no new airport infrastructure or air traffic control
procedures, overall airport capacity remained the same while the number
of aircraft operations and delays soared. The average minutes of delay
for all arriving flights at LaGuardia increased 144%: From 15.52
minutes in March 2000 (the month before AIR-21 was enacted) to 37.86
minutes in September 2000.\2\ The increase in delay as a result of AIR-
21 was not limited to delays at LaGuardia. Flights that arrived and
departed late at LaGuardia affected flights at other airports and in
adjacent airspace as well, and by September 2000, flight delays at
LaGuardia accounted for 25 percent of the nation's delays, compared to
10 percent for the previous year.\3\
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\2\ Source: FAA's Aviation System Performance Metrics (ASPM).
\3\ Calculated from FAA's Air Traffic Operations Network
Database (OPSNET).
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Concerned about the accelerating levels of congestion, flight
delays, and cancellations and the prospects of reaching gridlock, the
Port Authority of New York and New Jersey (Port Authority) attempted to
impose a temporary moratorium on new flights at LaGuardia and requested
the assistance of the FAA. Using its authority under 49 U.S.C. 40103,
and pending the development of a longer term solution, the FAA
published a Notice of Intent in the Federal Register on November 15,
2000, announcing its intention to temporarily cap AIR-21 slot
exemptions at LaGuardia and to allocate them via a lottery (65 FR
69126, November 15, 2000). The lottery, which was conducted on December
4, 2000, was premised on the imposition of an airfield and airspace
capacity management limit of 75 scheduled operations per hour (plus 6
unscheduled operations primarily used by the general aviation
community) beginning January 31, 2001 (65 FR 75765, December 4, 2000).
This limit still allowed a significant increase in operations at the
airport above the regulatory limits, thus serving Congressional
objectives while stretching capacity to its practical limits. The
number of AIR-21 slot exemptions at LaGuardia was restricted to a total
of 159 a day between the hours of 7 a.m. and 9:59 p.m. As a result of
the hourly restrictions, the average number of aircraft delays at
LaGuardia fell from 330 per day in October 2000 to 98 per day in April
2001.
The December 4, 2000, limits on AIR-21 slot exemptions and the
lottery allocation has been extended several times to allow the FAA to
explore other options to control delay at the airport. Most recently,
the FAA announced in the Federal Register a fourteen months extension
to the current limits and allocation of slot exemptions at LaGuardia
through December 31, 2006 (70 FR 36998, June 27, 2005).
Because LaGuardia airport is relatively close to mid-town
Manhattan, many travelers prefer it, and airlines wish to meet that
demand by operating many flights to LaGuardia. LaGuardia Airport
consistently has been one of most congested airports in the nation.
These facts, coupled with the inability to expand the physical airspace
and airfield capacity of the airport, makes LaGuardia one of the most
constrained airports in our national system. Passenger demand for
access to LaGuardia exceeds available airspace and airfield capacity at
the airport. This proposed rule aims to maximize the utilization of
this airport, without generating unacceptable congestion and delay.
C. Research Into Market-Based and Administrative Alternatives at
LaGuardia
Over the past several years, the FAA and the DOT's Office of the
Secretary of Transportation (OST) have taken a number of steps to
identify and develop a market-based mechanism to allocate limited
capacity at LaGuardia.
[[Page 51362]]
On June 12, 2001, the FAA published a variety of congestion
management alternatives in the Federal Register, including the use of
auctions, congestion pricing and administrative alternatives, and
sought the public's views on the potential use of each of these
mechanisms at LaGuardia (66 FR 31731). Due to the September 11, 2001,
terrorist attacks, the immediate need to develop a solution at
LaGuardia was tempered because of the corresponding decrease in
passenger demand. The FAA still received a substantial number of
comments. The comments varied--some supported market-based measures,
such as congestion pricing, while others recognized that the best
solution might incorporate administrative allocation mechanisms. The
FAA and OST have evaluated the comments and considered them in our
research initiatives. We also have incorporated the views of the
industry in the development of both this proposal and the legislation
we intend to seek that would permit a market-based means of controlling
congestion and delay at LaGuardia.
1. Auction Roundtable
In July 2004, the FAA held a roundtable to discuss the use of
auctions to allocate capacity at LaGuardia. The purpose of the
roundtable was twofold. First, the roundtable exposed senior FAA and
OST officials to auctions and the issues surrounding their potential
implementation at LaGuardia. Second, it served as an initial
stakeholder meeting to seek comment on the possible use of auctions.
Several participants pointed to issues that would need to be
addressed prior to implementing an auction of take-off or landing
authorizations at LaGuardia, including the notion of incumbency;
associated property rights and their duration, if any; the impact that
auctions may have on airport revenues; predictability of the auction
outcome; the impact on small communities; and the financial impact on
the air carriers and their customers. Because of these concerns, the
air carriers that participated in the roundtable appeared largely
unenthusiastic about the potential use of auctions at LaGuardia.
However, several advantages to an auction also were noted. For
example, auctions effectively allocate scarce resources under market
conditions and thus seem less arbitrary in nature than allocating slots
under an administrative solution (such as a lottery). Another benefit
to auctions is that they rely on markets, which are more robust and
responsive to industry changes than administrative regulations. These
potential benefits have been echoed by the Department of Justice in its
comments on another congestion management rulemaking involving
operations at Chicago's O'Hare International Airport. In its comments,
the Department stated that, ``a well-designed slot auction would both
assign prices and allocate efficiently scarce airport resources, and
limit the maintenance or accumulation of market power by individual
carriers.'' \4\
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\4\ Comments of the United States Department of Justice in
Docket No. FAA-2005-20704. May 24, 2005, pp. 11-13.
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Thus, if the complexities associated with implementing an auction
at LaGuardia can be resolved, an auction could provide an economically
efficient mechanism for allocating ``Operating Authorizations'' \5\ at
the airport in the future.
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\5\ As proposed, an Operating Authorization is the operational
authority assigned to an air carrier by the FAA to conduct one
scheduled IFR arrival or departure operation each week on a specific
day of the week during a specific 15-minute period at LaGuardia.
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2. Congestion Pricing Forum
The FAA arranged a forum in February 2005 to explore the use of
congestion pricing at airports. The series of presentations addressed
the applicability of congestion pricing to control aviation capacity,
with a focus on LaGuardia, and included presentations on the
Massachusetts Port Authority's (Massport) congestion pricing proposal
for Logan International Airport, as well as highway and energy peak
period pricing programs. Several participants believed that Massport's
model could not be successfully deployed at LaGuardia because the level
of demand at LaGuardia is perceived to be too high to implement a
revenue-neutral congestion pricing policy, as adopted at Boston Logan
Airport. However, other participants believed a congestion pricing
mechanism was feasible and would provide benefits associated with
allowing the market to allocate capacity without the need for
government imposed slot restrictions.
3. National Center of Excellence for Aviation Operations Research
The FAA and OST also contracted with the National Center of
Excellence for Aviation Operations Research (NEXTOR) to conduct
research on various proposals to implement at LaGuardia upon the
expiration of the HDR. As part of that research, NEXTOR has conducted a
number of strategic simulations with industry in an effort to design
and assess the potential effectiveness of various allocation
mechanisms. These mechanisms include auctions, congestion pricing, and
various administrative measures.
In November 2004, NEXTOR conducted a 2-day simulation of congestion
pricing and various administrative measures at LaGuardia. The FAA, OST,
several industry stakeholders and airlines attended the workshop. The
simulation measured airline responses to a variety of congestion
pricing fees and administrative rules.
In February 2005, NEXTOR conducted a second strategic simulation in
which it demonstrated how an auction model could be used to allocate
capacity. The simulation was structured around a mock auction for
arrival and departure slots at LaGuardia. The purpose of this
simulation was to familiarize the relevant industry and government
communities with auction processes and the specifics of modern slot
auction design. The exercise also elicited views from industry and
government representatives on the overall policy of using auctions to
allocate arrival and departure capacity. The feedback gathered during
this simulation exercise has generated further FAA and OST research on
auctions. In particular, more work has been done to better anticipate
the impact of aligning ``slots'' with necessary gate space.
Additionally, the FAA and OST have worked with NEXTOR to develop
auction rules that could incorporate exemptions for service to small
communities.
This information will also be incorporated in a legislative
proposal to Congress that will seek authority to utilize market-based
mechanisms at LaGuardia in the future. Such legislation would be
necessary to employ market-based approaches such as auctions or
congestion pricing at LaGuardia because the FAA currently does not have
the statutory authority to assess market-clearing charges for a landing
or departure authorization. If Congress approves the use of market-
based mechanisms as we plan to propose, a new rulemaking would be
necessary to implement such measures at LaGuardia.
II. Continued Need To Limit Operations at LaGuardia
Today's proposal anticipates the complete phase-out of the HDR at
LaGuardia on January 1, 2007, as required by AIR-21. In response, the
FAA could simply allow the HDR to expire and to let events run their
course without FAA intervention. This approach would permit each
individual airline to manage (and potentially
[[Page 51363]]
increase) its own flights. Air traffic control procedures and traffic
management initiatives such as ground delay programs, miles-in-trail
restrictions, and aircraft re-routing, would help to ensure that any
additional flights did not affect air safety. However, the congestion
and delays experienced in the wake of AIR-21 flight additions would
likely recur if limitations on the hourly operations at LaGuardia were
not adopted. Indeed, because the delays in late 2000 resulted from just
two types of operations, it is likely that a complete expiration of the
HDR would lead to even greater delays absent a regulation designed to
avert precipitous growth in operations.
Because the cost of delays is not fully internalized by any
individual carrier, both experience and theory suggest that without any
constraint, each carrier would, at least initially, continue adding
flights despite an unacceptable level of congestion and delay. This was
precisely the situation in 2000, and the airport cannot accommodate,
nor can the FAA permit, such unrestrained growth at LaGuardia. Delays
at LaGuardia have a significant detrimental impact on the rest of the
national airspace system, leading to nationwide delay and inefficiency.
Because simply allowing the HDR to expire is not a desirable option at
LaGuardia, the FAA believes that some regulatory action to limit
congestion at the airport is necessary.
LaGuardia cannot realistically expand its runway infrastructure
because it borders on Bowery Bay and Flushing Bay. Thus, an airport
expansion project like that proposed for Chicago's O'Hare International
Airport is not feasible. Because of these groundside constraints, air
traffic management improvements such as airspace redesign or changes to
separation standards would permit minimal capacity increases at most.
Even if these efficiencies can be realized, operating constraints
likely still will be needed at LaGuardia because of its physical
limitations, including runway and taxiway constraints.
The FAA is committed to ensuring that excessive delays and
congestion do not return at LaGuardia after the HDR expires. The FAA
and OST are evaluating appropriate market-based mechanisms, such as
auctions or congestion pricing, for allocating capacity at LaGuardia
over the long-term. The FAA currently does not have full legislative
authority to employ such mechanisms at LaGuardia or at other airports,
although the Port Authority could currently implement revenue-neutral
congestion pricing or other mechanisms regarding operating rights so
long as such changes did not require a fee or assessment by the Federal
Government and the Port Authority's program otherwise would be
reasonable, nonarbitrary and nondiscriminatory; would not create an
undue burden on interstate or foreign commerce; would maintain the safe
and efficient use of the navigable airspace; would not conflict with
any existing Federal statute or regulation including Federal grant
agreements; and would not create an undue burden on the national
aviation system. As discussed above, Massport has developed a revenue-
neutral congestion pricing program for use at Boston's Logan airport;
\6\ however, we do not believe that a revenue-neutral policy would be
effective at LaGuardia. The demand for access at LaGuardia is so high
that carriers may simply pay any fee imposed in a revenue-neutral model
rather than changing their practices.
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\6\ The FAA has not had the occasion to issue a final opinion on
Massport's program since the program has not yet been implemented.
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Consequently, we are seeking the legislative authority to conduct
auctions or congestion pricing at LaGuardia in the future. If Congress
approves the use of market-based mechanisms, a new rulemaking would be
necessary to implement such measures at LaGuardia.
The FAA has broad authority under 49 U.S.C. 40103 to regulate the
use of the navigable airspace of the United States. This authority is
exclusive to the FAA. Section 40103 authorizes the FAA to develop plans
and policy for the use of navigable airspace and to assign the use that
the FAA deems necessary to its safe and efficient utilization. It
further directs the FAA to prescribe air traffic rules and regulations
governing the efficient utilization of the navigable airspace. The FAA
interprets its broad statutory authority to ensure the efficient use of
the navigable airspace to encompass management of the nationwide system
of air commerce and air traffic control. AIR-21, while phasing out the
HDR, did not strip the FAA of its authority to place operating
limitations on air carriers to preserve the efficient utilization of
the National Airspace System (NAS). Indeed, the FAA has, out of
necessity, restricted the number of exemptions to the HDR since 2001 at
LaGuardia, and no one has challenged its authority to do so at that
airport.
In addition to the FAA's authority and responsibilities over the
efficient use of airspace, the Secretary of Transportation is required
to consider several other objectives as being in the public interest,
including: Keeping available a variety of adequate, economic,
efficient, and low-priced air services; placing maximum reliance on
competitive market forces and on actual and potential competition;
avoiding airline industry conditions that would tend to allow at least
one air carrier unreasonably to increase prices, reduce services, or
exclude competition in air transportation; encouraging, developing, and
maintaining an air transportation system relying on actual and
potential competition; encouraging entry into air transportation
markets by new and existing air carriers and the continued
strengthening of small air carriers to ensure a more effective and
competitive airline industry; maintaining a complete and convenient
system of scheduled air transportation for small communities; ensuring
that consumers in all regions of the United States, including those in
small communities and rural and remote areas, have access to
affordable, regularly scheduled air service; and acting consistently
with obligations of the U.S. Government under international agreements.
See 49 U.S.C. 40101(a)(4), (6), (10)-(13) and (16), and 40105(b).
III. Summary of Proposed Rule
The FAA proposes to cap hourly operations at LaGuardia. Under the
proposed rule, the FAA would limit the number of scheduled flight
arrivals and departures at LaGuardia Monday through Friday from 6:30
a.m. to 9:59 p.m. and Sunday from noon to 9:59 p.m. Similar limits
would be placed on unscheduled arrivals and departures, excluding
helicopters, conducted under instrument flight rules (IFR). The FAA
would create ``Operating Authorizations'' according to the hourly limit
on operations of 75 scheduled operations and 6 ``Reservations'' for
unscheduled operations. The Operating Authorizations would be allocated
to carriers at the airport based on historic usage subject to
adjustments required to meet the proposed limits. The Operating
Authorizations would be allocated in 15-minute increments (i.e., 6:30
a.m. through 6:44 a.m., 6:45 a.m. through 6:59 a.m.), with specified
arrivals and departures, in order to minimize congestion from schedule
peaking. The FAA believes that the relationship of schedule peaks and
delays at LaGuardia is particularly significant since the current
airport demand approaches the airport's optimal, good weather capacity.
Reservations would be allocated on a half-hourly basis using a
reservation system similar to the one currently in effect for
unscheduled flights at the high density airports, Chicago O'Hare
International Airport,
[[Page 51364]]
and at airports under special traffic management programs, whereby an
operator may obtain a Reservation beginning 72 hours in advance of the
proposed operation.
To encourage efficient use of scarce airspace, holders of Operating
Authorizations would be required to meet an airport-wide average
aircraft size target annually. Passenger demand for access to LaGuardia
airport exceeds the number of passengers being accommodated today.
Although the airport cannot currently, or in the foreseeable future,
accommodate a greater number of flight operations, the airport's
terminal and other groundside facilities could accommodate a greater
number of passengers on the existing number of flights.
The use of commuter equipment (aircraft with fewer than 71 seats)
arriving at LaGuardia from medium and large hub airports has increased
by more than 50 percent since August 2001.\7\ This trend has resulted
in the underutilization of airport facilities at LaGuardia.
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\7\ Source: OAG, August 2001 and August 2005.
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For example, on April 19, 2005, there were 16 flights to Baltimore,
MD (a large hub) on aircraft with an average of 38 seats. Similarly, on
the same day, there were 44 operations to Raleigh-Durham, NC (medium
hub) on aircraft with an average of 50 seats, and 20 flights to
Philadelphia, PA (large hub) on aircraft with an average of 58 seats.
While we recognize that service to non-hub and Small-Hub Airports may
only support commuter aircraft, serving medium and large hub airports
repeatedly throughout the day with the smaller gauge aircraft does not
maximize passenger throughput or the use of a constrained resource. For
this reason, the proposed rule explicitly encourages the use of larger
aircraft within the constrained operating environment.
Through this rule the FAA therefore proposes to encourage airlines
to use larger aircraft, on average, than are being operated at the
airport now (and in the recent past) so that a larger share of consumer
demand will be satisfied. Compliance with the airport-wide target would
be enforced through a Use-or-Lose provision, which would require
carriers to report the average number of seats offered on all non-
exempt Operating Authorizations each year.\8\ Each carrier's annual
``average seat size'' would have to be equal to or greater than the
airport-wide target or the FAA would withdraw Operating Authorizations
from the carrier. The FAA first would withdraw the Operating
Authorization(s) operated using the smallest aircraft. The number of
Operating Authorizations withdrawn would depend on how far off the
target the carrier's operations were over the preceding year. If
removing one Operating Authorization was sufficient to raise the
carrier's average seat size to the target level, only that Operating
Authorization would be withdrawn. If more withdrawals were needed in
order to meet the target, additional Operating Authorizations would be
withdrawn until the target was met.\9\
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\8\ Average seat size would be equal to the total number of
seats offered over the year divided by the total Operating
Authorization days in the year. For further detail on the average
seat size calculation see the ``Use or Lose Requirements'' section
in the pages below.
\9\ For example, if the airport-wide target was 100, and a
carrier's average seat size over all its Operating Authorizations
was 99 seats then the air carrier would not have met the ``target''
and FAA would withdraw the Operating Authorization(s) that used the
smallest aircraft. If one Operating Authorization was withdrawn and
the air carrier's average aircraft size was re-calculated to equal
100 seats or more, that carrier would only lose a single Operating
Authorization. If the re-calculation did not result in an average
aircraft size of 100 seats or more, the FAA would withdraw a second
Operating Authorization. This process would be repeated until the
carrier's average aircraft size was equal to or greater than the
``target.''
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While an important goal of this rule is to promote efficiency at
LaGuardia, another objective is to avoid the elimination of service to
the small and non-hub communities that rely on service at the airport.
Accordingly, the FAA proposes that Operating Authorizations used for
service to certain small and non-hub communities are exempt from the
target aircraft size requirement.
The proposed rule would assign expiration dates to all Operating
Authorizations. Operating Authorizations would be allocated in 2007
with expiration dates ranging from 2010 through 2019. As Operating
Authorizations expire they would be reallocated with a renewed life
span of ten years. Establishing a finite lives for Operating
Authorizations can improve efficiency at LaGuardia over time by
encouraging all airlines to maximize the use of a scarce resource and
to maximize their investment at the airport. The authorization's finite
life would influence carriers to recognize the present value of
operating at LaGuardia because an Operating Authorization ultimately
expires, at which point it would be worth nothing to the existing
holder. If a carrier is not able to use an Operating Authorization
profitably, the carrier may sell the authorization on the secondary
market rather than hold the authorization and operate it at a loss.
This incentive, coupled with the Use-or-Lose provision which enforces
usage of Operating Authorizations, would promote efficient use of
scarce airport resources because the carriers that value them the most
will use the Operating Authorizations.\10\
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\10\ The FAA has also proposed a congestion management rule at
Chicago O'Hare (Docket No. FAA-2005-20704). This proposed rule
differs from that which was proposed at O'Hare because the
operational characteristics at LaGuardia and O'Hare are
significantly different. The primary differences between these two
proposed rules are (1) that the rule at LaGuardia would not be
temporary (as is anticipated at O'Hare) because increased capacity
is not expected at LaGuardia, (2) Operating Authorizations at
LaGuardia would expire and be reallocated, and (3) air carriers
would be required to meet an airport-wide ``target'' aircraft size
at LaGuardia.
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IV. The Proposal To Limit Operations at LaGuardia
A. Initial Allocation of Operating Authorizations
Upon expiration of the HDR on January 1, 2007, slots will no longer
exist at LaGuardia. Under today's proposed rule, the FAA would place an
hourly cap on operations at LaGuardia to prevent unacceptable delay
that would impact the National Airspace System. The proposed number of
operations is consistent with the cap that has been in place since
January 2001--75 scheduled operations per hour. The FAA's procedures
for allocating AIR-21 slot exemptions since January 31, 2001,
accommodate some new entrant carriers' operations above the hourly
limit. Under this proposed rule, these operations would be
``grandfathered'' within the allocated hour. However, any Operating
Authorizations that revert to the FAA in those hours would be moved to
an hour with fewer than 75 operations prior to reallocation and
assigned within the adopted 15 and 30 minute limits. Arrival and
departure authorizations would be distributed in fifteen-minute time
increments, and Reservations would be limited to six per hour.
The existing cap at LaGuardia represents the FAA's estimate of the
maximum number of operations that can be accommodated at the airport
with its current configuration and without causing excessive additional
congestion and delay. The FAA is not proposing to increase the cap at
this time, because it is premised on favorable weather conditions.
Furthermore, even with the existing cap of 75 scheduled and 6
unscheduled operations per hour, LaGuardia has consistently been one of
the top five delayed airports in the United States. In fiscal year
2005, LaGuardia ranked as the third most delayed airport in the
[[Page 51365]]
nation, with only 71 percent of operations arriving on time.\11\
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\11\ Source: ASPM. The Inspector General's FY 2006 Top
Management Challenges also recently highlighted the fact that
LaGuardia Airport is severely delayed. The report points out that in
the summer of 2005 LaGuardia Airport ranked as the fifth most
delayed airport in terms of percentage of delayed flights and had
the longest average minutes of delay, with an average of 70.03
minutes of delay (p. 23).
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Operating Authorizations and Reservations would not be required on
Saturdays or Sunday mornings, as there is a significant drop in traffic
on those days, and we have not experienced nor do we expect to
experience excessive congestion during those times. However, the FAA
would consider additional rulemaking to cap operations on those days if
traffic and delays become unacceptable.
Although operations would be kept at the current level of service
at LaGuardia, the FAA would have the authority under this proposal to
retain expired and returned Operating Authorizations, or to retime them
to less congested periods, if necessary to reduce congestion and
delays. Operational or navigational improvements could mitigate the
need to retain or retime expired or returned Operating Authorizations,
and the FAA believes that such efficiency enhancements may be possible.
However, this authority would enable the FAA to take appropriate action
against growing delay and to manage capacity over the life of this
rule.\12\
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\12\ The FAA has determined that delays are not so excessive
that it is necessary to reduce the hourly cap at the airport at the
outset of this proposed rule but there would be some schedule
depeaking required to meet the proposed 15-minute limits. If the FAA
reduced hourly operations, this would impede current service levels
and disadvantage the carriers as well as the traveling public.
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1. ``Grandfather'' Provision
Operating Authorizations initially would be grandfathered to each
carrier at LaGuardia operating slots and slot exemptions based on
schedules as of October 1-6, 2006, provided that the published
schedules are consistent with the 15 and 30 minute limits in this
proposal. Since carriers are currently able to schedule flights anytime
within the 30-minute slot window, these schedules may contribute to the
current congestion and delays at the airport because this practice
occasionally allows operations to exceed the airport's capacity. This
is particularly apparent in the peak morning and early evening periods.
Further, because we will use October 1-6, 2006, schedules, which are
not currently finalized, there is potential for the 15-minute schedule
peaks to increase. One objective of this rule is to improve operational
performance at the airport, and we do not believe it would be prudent
to grant historic status to schedule levels that are not realistic.
While one way to improve performance would be to reduce the
permitted number of hourly scheduled and/or unscheduled operations, we
are proposing instead to spread demand in certain peak periods. If it
is necessary to de-peak the October 1-6, 2006 schedules to meet the 15
and 30 minute limits in this proposal, we do not propose to require any
carrier to reduce overall hourly operations below its initial base or
to operate in a different hour from the hour allocated under the HDR.
To achieve the necessary de-peaking, the FAA proposes to call for
voluntary measures to reallocate the grandfathered Operating
Authorizations to less congested time periods within the same hour or
proposes an administrative mechanism such as a lottery. We seek comment
on these options.
In the event that the HDR expires prior to the publication of a
Final Rule, the FAA would continue to rely on the October 1-6, 2006
timeframe as the basis for future grandfathering of aircraft Operating
Authorizations. If a carrier were using a slot that is ``held'' by
another carrier, the Operating Authorization would be grandfathered to
the carrier that actually holds the slot.\13\ Alternatively, if a
carrier were using a slot that is held by an entity that is not a
certificated carrier, the operating carrier would be grandfathered the
Operating Authorization. The FAA proposes grandfathering operating
rights to carriers in an effort to preserve service to communities with
existing service at LaGuardia and to minimize disruption at the airport
and to the traveling public. Although the initial ``grandfathering'' of
Operating Authorizations to incumbent carriers does not provide new
entrant carriers with immediate access to the airport, other aspects of
this rule, such as finite Operating Authorization lives, would give
those carriers not already operating at LaGuardia access to the airport
as Operating Authorizations expire and are reallocated.
---------------------------------------------------------------------------
\13\ A slot ``holder'' is the air carrier that has operational
authority, assigned by the FAA, to conduct scheduled arrival or
departure operations at LaGuardia on a particular day of the week
during a specific time of the day. Each FAA slot under the HDR has
both a ``holder'' status and an ``operator'' status. The ``holder''
status typically reflects long-term slot rights and does not need to
be an air carrier. The ``operator'' status reflects which particular
carrier is authorized to utilize a slot on a particular day.
Operator status commonly differs from holder status to reflect the
assignment of slots to a commuter affiliate or partner airline, the
lease or transfer of slots for a defined period of time, or one for
one trades or swaps of slots with other carriers to accommodate
schedule changes.
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2. Finite Operating Authorizations
Under the proposed rule, Operating Authorizations would have finite
lives. Operating Authorizations would be allocated initially in 2007
with an expiration date ranging from the year 2010 through 2019. The
initial authorizations would be distributed based on actual operations
and FAA slot allocation records for LaGuardia by scheduled carriers as
of the week October 1-6, 2006. Operating Authorizations would then be
divided into regular Operating Authorizations and Operating
Authorizations that are exempt from the minimum airport seat targets.
Each authorization would then be assigned an expiration date using the
method discussed below (see ``Schedule of Expiration Dates for
Grandfathered Operating Authorizations''). The method for determining
when initial allocations expire would ensure that the expiration of
Operating Authorizations is evenly distributed among all carriers so
that no carrier loses a disproportionate number of Operating
Authorizations at any one time.
Operating Authorizations that are initially allocated in 2007 would
be granted a life of three to thirteen years. The fourth year after the
rule is in effect (2010), 10 percent of the authorizations would expire
and be reallocated with a renewed ten-year life. Each year thereafter,
10 percent of the Operating Authorizations would expire and be
reallocated for 10 years.
This reallocation approach should encourage dynamic access to air
services at LaGuardia. Determining the percentage of capacity that
should be subject to reallocation annually requires establishing a
balance between exposing airport access to market forces, providing
access for new entrants, and preserving stability at the airport. The
first three years after the initial grandfathering in 2007 would
provide incumbent carriers with a degree of certainty regarding
operations at the airport. The FAA believes that after 2009, use of
ten-year operating lives would strike an appropriate balance between
very large annual withdrawals of Operating Authorizations (which could
make it less attractive for carriers to develop service at the airport)
and very slow (or no) turnover of Operating Authorizations (which could
result in barriers to entry to the airport). Operating Authorizations
need to expire at varying times so that air service at LaGuardia
remains stable even as some authorizations are subject to reallocation.
We expect that any
[[Page 51366]]
reallocation process adopted through subsequent rulemaking would
provide sufficient lead time for an orderly schedule planning process
by the impacted carrier(s). We invite comments and analysis on the
appropriate lifespan of Operating Authorizations.
If carriers were granted perpetual operating rights they may not
have sufficient incentive to sell or lease Operating Authorizations on
the secondary market to a competitor placing a higher value on their
use. The expiration and reallocation of Operating Authorizations should
drive carriers to maximize the value of their authorization because the
authorization would no longer represent an infinite investment
interest. The revolving allocation process also would provide new
entrant airlines and incumbent airlines wishing to expand service at
LaGuardia the opportunity to acquire Operating Authorizations at
LaGuardia because there would be a new stock of authorizations
available each year after 2010. Establishing finite life for Operating
Authorizations also meets the Department's mandate of ``placing maximum
reliance on the competitive market forces and on the actual and
potential competition in airline markets.'' \14\
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\14\ Federal Register, Vol. 70, No. 57 page 15523: ``Congestion,
Delay Reduction and Operating Limitations at Chicago O'Hare
Airport.''
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The first Operating Authorizations would not expire at LaGuardia
until 2010. The FAA is planning to seek legislative authority to
provide the opportunity for market-based solutions to address
congestion at LaGuardia. Should the agency receive this authority, a
market-based process would be the agency's preferred reallocation
methodology, and we would issue a proposed rule to implement measures
for redistributing expired Operating Authorizations at that time.
3. Schedule of Expiration Dates for Grandfathered Operating
Authorizations
On January 1, 2007, when the Operating Authorizations initially are
allocated to the carriers, the FAA also would establish a schedule for
when each Operating Authorization would expire. This procedure for
assigning rolling expiration dates would only occur one time, at the
initial grandfathering of Operating Authorizations, because as the
grandfathered Operating Authorizations expire each one would be
reallocated with a 10-year life.
All ``grandfathered'' Operating Authorizations would have a minimum
life of 3 years. Beginning in 2010, 10 percent of the total Operating
Authorizations allocated to all carriers would be withdrawn annually
and then redistributed. The life of each ``grandfathered'' Operating
Authorization, anywhere from three to 13 years, would be determined
using the methodology explained below.
Under the expiration schedule, each carrier's holdings of Operating
Authorizations would satisfy two conditions: (1) The average ``life''
of the Operating Authorizations would be approximately the same for all
carriers; and (2) expiration of Operating Authorizations would be
staggered so that no carrier would lose a disproportionate number of
Operating Authorizations in a given time period.
In order to assign expiration dates to ``grandfathered'' Operating
Authorizations the FAA would segregate each carrier's schedule. Non-hub
and Small Community Operating Authorizations (service to Small-Hub or
Non-Hub Airports) would be separated from the other Operating
Authorizations. All Operating Authorizations would be assigned a
scheduled expiration date, but segregating the authorizations should
ensure that a disproportionate number of Small Community Operating
Authorizations do not expire any given year.
Each carrier would be entitled to authorization life (beyond 2009)
on average equal to 5.5 years for the Operating Authorizations that
they hold. The average life of Operating Authorizations would be equal
to 5.5 years because that is the arithmetic mean between one and ten
years of life beyond 2009. (If Operating Authorizations expired over 20
years then 5 percent of the Operating Authorizations would expire each
year and the average ``life'' of an Operating Authorization would be
10.5 years.) \15\ The expiration dates of the authorizations in each
quarter-hour would be assigned as follows:
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\15\ For 10 year Operating Authorizations the average ``life''
would be 5.5 years. The average ``life'' is calculated as follows:
(Year 1*10%) + (year 2*10%) + (year 3*10%) + (year 4*10%) + (year
5*10%) + (year 6*10%) + (year 7*10%) + (year 8*10%) + (year 9*10%) +
(year 10*10%) = 5.5 years (the first Operating Authorizations expire
in 2010 so their ``life'' after 2009 is zero years. The last
Operating Authorizations to expire from the initial grandfathering
will expire in 2019 so their ``life'' is ten years.
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(1) The number of Operating Authorizations is equal to the average
number of ``slot and slot exemption'' operations held under the HDR in
each quarter-hour time period;
(2) The average remaining years of life (beyond 2009) for all
authorizations is roughly 5.5 years; and
(3) The total years of remaining life among all authorizations
would be distributed so that 10 percent of the total Operating
Authorizations at the airport expire each year.
The following example illustrates how an individual carrier's
Operating Authorizations would be assigned expiration dates in each
quarter-hour time period.
Allocation Carrier A's Commercial Operating Authorization Expiration Dates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Time window 9:00-9:14 . . . 14:00-14:14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Carrier A's Operating Authorization (OA) 4 OAs ....... 2 OAs
Holdings.
Expiration Dates......................... OA 1--expiration in 2 years. ....... OA 1--expiration in 2 years.
OA 2--expiration in 3 years. OA 2--expiration in 9 years.
OA 3--expiration in 8 years. .................................................
OA 4--expiration in 9 years. .................................................
Average = 5.5 years. ....... Average = 5.5 years.
--------------------------------------------------------------------------------------------------------------------------------------------------------
In this example, Carrier A has 4 slots in the 9:00 to 9:14 time
period and 2 slots in the 14:00-14:14 time period. The carrier would
initially be grandfathered these 6 operations (in the same time
periods) as Operating Authorizations under this rule. On average, these
new authorizations would have 5.5 years of life remaining after 2009.
An equitable allocation for this carrier's 9:00-9:14 Operating
Authorizations that would average 5.5 years of life would be the
following years of remaining life beyond 2009: 2, 3, 8, and 9. In this
case the four
[[Page 51367]]
operating authorizations would expire at the end of 2011, 2012, 2017,
and 2018. Likewise, an equitable allocation for Carrier A's 14:00-14:14
Operating Authorizations would be 2 years and 9 years; therefore these
Operating Authorizations would expire in 2011 and 2018.\16\ It should
be noted that the allocation in this case would depend on: (1)
Satisfying this carrier's existing number of both arrival and departure
authorizations in each quarter-hour of the day; (2) satisfying all
other carriers' existing operations in that quarter-hour; and (3)
ensuring that 10 percent of all authorizations expire each year. The
FAA is developing a programming tool to solve this allocation
process.\17\
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\16\ This illustration provides one possible distribution of
expiration dates for the given Operating Authorizations although not
the only possible expiration schedule; several combinations of
expiration dates could generate the same ``remaining life'' outcome
of 5.5 years.
\17\ Anomalies could occur in order to balance these criteria.
Rather than 10% of Operating Authorizations expiring in a particular
quarter hour it might be 10% plus or minus 1% in order to get the
proper total integrated number of Operating Authorizations.
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The same process would be repeated in order to assign expiration
dates to the Non-hub and Small Community Operating Authorizations.
The programming tool would use two objective functions to guide the
allocation process. The first measures the discrepancy between the
total of all authorization lifetimes allocated to each carrier in a
quarter-hour and a presumed preferred distribution based on that
carrier's current holdings. The second measures the discrepancy between
the total of all authorization lifetimes allocated to each carrier over
the entire day and the presumed preferred total for the day. By
defining two objective functions the procedure is able to compensate in
a later period for any discrepancies from the ideal in an earlier
period.
B. Congestion Management Upgauging Rule at LaGuardia
1. Average Aircraft Size
To encourage efficient use of scarce air traffic system capacity at
LaGuardia, the FAA, in consultation with the Port Authority, intends to
set an airport-wide target for the average aircraft size used by
carriers on scheduled Operating Authorizations. The size of an aircraft
would be measured by the number of seats that are offered for sale on
the aircraft. The target for average fleet seat capacity would be based
on a passenger throughput target for the airport, based on the
limitations on various terminal and ground facilities to handle
passengers. Thus, the target would be based on engineering measures of
the capacities of the ground facilities. The target would be phased in
so that carriers at LaGuardia would have sufficient time to make
adjustments to their fleets and service routes. The target also needs
to be consistent with safety issues associated with runway length,
takeoff performance, and landing performance.
The proposed target would range from 105 seats to 122 seats per
aircraft depending on which alternatives for the proposed exemptions
for Non-Hub and Small-Hub Airport services is adopted, as explained
below in the discussion of more options. On January 1, 2008, one year
after the Final Rule is in effect, carriers would have to report their
use of Operating Authorizations over the preceding year.\18\ However,
the ``target'' would not be enforced until the following year, January
1, 2009. At that point, any carrier that fails to meet the ``target''
would be subject to the provisions outlined in the Use-or-Lose
requirement. The FAA believes that this phase-in period provides
carriers a sufficient amount of time after publication of the Final
Rule to adjust their operations as necessary to meet the airport-wide
target. An FAA required average aircraft size target would encourage
efficient use of the airport facilities by increasing passenger
throughput at LaGuardia and by providing incentives for more efficient
use of the airport's physical infrastructure.
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\18\ Reporting requirements are discussed in the Use-or-Lose
section in the pages below.
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The preference for larger aircraft is a special approach to a
unique situation at LaGuardia. Demand at LaGuardia exceeds the
airport's capacity for flight operations throughout the day, and there
is no prospect for any significant increase in capacity for aircraft
operations at the airport because of its physical limitations. On the
other hand, the airport's groundside facilities can handle more
passengers than now use the airport.\19\ Promoting larger aircraft is
the only means to increase passenger access to LaGuardia. Accordingly,
in these limited circumstances, the increase in passenger throughput
can be considered as a measure of efficiency of the use of airspace,
and is within the FAA's authority under 49 U.S.C. 40103(b) to establish
regulations for the efficient use of airspace.
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\19\ According to the Port Authority's 2004 Airport Traffic
Report, 24.5 million domestic and international passengers flew
through LaGuardia in 2004. In various forums the Port Authority has
indicated that approximately 28.5 million passengers could be
accommodated at the airport on existing facilities and
infrastructure.
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The upgauging policy proposed for LaGuardia is based on the FAA's
authority for efficient management of airspace under 49 U.S.C. 40103.
This limited application of an upgauging policy under the FAA's
airspace management authority is unrelated to airport proprietary
authority. The FAA's exercise of its statutory authority for efficient
airspace management does not affect the obligation of airport sponsors
under Airport Improvement Program (AIP) sponsor assurances to provide
access to all types, kinds, and classes of aeronautical use on
reasonable and not unjustly discriminatory terms.
The average aircraft size target would be monitored on an annual
basis, which would afford carriers the business flexibility to meet the
overall average fleet goal with whatever combination of aircraft they
determine is right for each route and service over the course of the
year. Each year, carriers would be required to operate, on average,
aircraft with at least as many seats as specified by the target
aircraft size or they would lose one or more Operating Authorizations.
Every twelve months, the FAA, after consultation with the Port
Authority, would re-evaluate the target and modify it as necessary to
account for changes in the airport's operations or modifications to the
capacity at the airport. For example, if gate usage requirements change
or airport infrastructure is developed that allows more efficient use
(e.g., terminal modifications), the target could be adjusted upward. In
fact, the effectiveness of this rule could be augmented by sponsor gate
use policies that maximize the potential of the infrastructure.
Alternatively, if the operations at the airport were negatively
impacted due to an overly optimistic target, the FAA would have the
ability to adjust the target downward. Because the target affects
carrier planning of fleet mix, routes, staffing requirements, and gate
usage, the FAA would limit target increases to no greater than a 3-seat
increase in any year.\20\ On the other hand, a decrease in the
``target'' would likely only occur if it were necessary to correct
unforeseen problems that result from an inflated ``target.'' Carriers
would not be penalized from operating aircraft that are larger than the
airport-wide target, so a decrease in the target
[[Page 51368]]
is not expected to have a negative impact on carriers.
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\20\ An annual increase to the target aircraft size of up to 3
seats per year provides sufficient flexibility to adjust the target,
if necessary. If it were determined that a more significant target
increase were appropriate in any given year, FAA would publish the
proposed target increase in the Federal Register and seek comments
on the proposed target.
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To assess the impact of upgauging at LaGuardia, NEXTOR has
conducted simulations that examine the behavior of the airport runway,
taxiway, and gate operations in the presence of a ``high-demand''
schedule when 25 percent of the regional jets are upgauged to narrow-
body jets. By extending several Official Airline Guide (OAG) schedules
to a representative ``high-demand'' arrival and departure schedule,
NEXTOR analyzed the impact of upgauging using Total Airport & Airspace
Modeler (TAAM) for LaGuardia. Experts from the FAA air traffic control
tower and representatives from the Port Authority validated the
operational assumptions regarding gate, taxiway, and runway utilization
parameters used in the TAAM simulation model. Results show that
representative upgauging by the airlines from regional jets to narrow-
body jets could result in increased passenger throughput without
negative impact on LaGuardia airport operations, flight delays or
passenger delays.
2. Services Not Subject to the Average Aircraft Size Target
a. Baseline Operations. Each carrier would be granted a
``baseline'' of up to 10 Operating Authorizations per day that would
not be subject to the target aircraft size requirement in this proposed
rule.\21\ The FAA has tentatively determined that each carrier should
be assessed a minimum number of takeoffs and landings that are not at
risk should its overall operations not meet the airport-wide target.
While that number should be sufficiently large to permit minimal fleet
and route flexibility, it should not overshadow the goal of increased
throughput. A baseline of 10 Operating Authorizations per day should
provide carriers with a stable base of operations, minimizing the
disruption on carrier schedules and operations at the airport while not
compromising the goal of increased passenger throughput at the airport.
Each year, carriers would notify FAA which of their Operating
Authorizations they intend to designate as ``baseline'' operations, and
these operations would not be subject to the target and Use-or-Lose
provisions of the rule based on average aircraft size target.
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\21\ Carriers that have 10 or fewer Operating Authorizations
would not be subject to the airport target since all their Operating
Authorizations would be considered ``baseline'' operations.
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A baseline is particularly important for carriers that have
operated at LaGuardia for decades and developed their networks to
include service at the airport. Similarly, carriers with limited
ability to adjust their fleet size would be assured that their baseline
operations would not be at risk of being withdrawn for non-compliance
with the target aircraft size requirement. New entrants and carriers
with a limited number of Operating Authorizations at LaGuardia may not
have much fleet versatility at the airport, particularly if they do not
have excess over-night parking and gate space that can be used to
interchange aircraft. Although the airport target would not bind
baseline operations, carriers would not be restricted from operating
aircraft equal to or larger than the target aircraft size with these
baseline Operating Authorizations.
b. Non-Hub and Small-Hub Airport Services. While a primary goal of
this rule is to promote efficient use of the airport, the DOT's mandate
to consider the public interest requires us to encourage the
maintenance of scheduled services to small communities. Congress
recognized this public interest when it required exemptions from the
HDR in AIR-21 for small community service. Because regular demand to
and from LaGuardia from these communities may not be sufficient for a
carrier to meet the airport-wide target,\22\ some type of relief may be
needed.
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\22\ Operations to these communities are typically on smaller-
sized aircraft.
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In an effort to preserve service to these communities, the FAA is
proposing to create a separate pool of Operating Authorizations, to be
used to provide service to non-hub and small-hub communities, that
would be excepted from the target aircraft size requirement. Unlike the
HDR or the AIR-21 slot exemption provisions, air carriers would not be
limited to operating aircraft of a certain size.\23\ Instead, carriers
with Non-Hub and Small-Hub Airport operations would have the
flexibility to fly aircraft of whatever size they want to these
communities.
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\23\ There are several HDR slot categories that limit aircraft
size. For example, Commuter Turboprop Slots require aircraft with
less than 75 seats; Commuter Turbojet Slots limit seats to 55 or
less; and AIR-21Small Hub/Non-Hub Airport exemptions require
aircraft with 70 seats or less.
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The FAA requests comments on the relative merits of three non-hub
and small-hub options, as well as any combination of the three:
(1) The FAA would create a pool of Operating Authorizations for
service to Non-Hub Airports. These Operating Authorizations would be
excused from the target aircraft size requirement. The pool of non-hub
Operating Authorizations would be based on the service level to Non-Hub
Airports during the week of October 1-6, 2006; although any Non-Hub
Airport would be eligible for service under this target exemption.\24\
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\24\ A Non-Hub Airport is a commercial service airport that has
more than 10,000 annual passenger boardings but less than 0.05% of
the total United States annual passenger boardings.
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(2) The FAA would create a pool of Operating Authorizations for
service to Non-Hub Airports and all Small-Hub Airports within 300 miles
of LaGuardia \25\ (``Local Small Communities''). These Operating
Authorizations would not be subject to the target aircraft size
requirement. The pool of Non-Hub and Local Small Community Operating
Authorizations would be based on the service level to Non-Hub and Local
Small Communities during the week of October 1-6, 2006. However, any
Non-Hub Airport Small-Hub Airport within 300 miles of LaGuardia would
be eligible for service under this target exemption.
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\25\ Small-Hub Airports are locations with at least .05%, but
less than .25% of annual passenger boardings. Small Hub Airports
that are within 300 miles of LaGuardia and have existing service
include: Albany, Burlington, Portland, Richmond, Rochester,
Syracuse, and Newport News/Williamsburg. Source: T-100 Data, April
2004-March 2005.
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(3) The FAA would create a pool of Operating Authorizations for
service to Non-Hub Airports, Small-Hub Airports that have existing
service at LaGuardia, and Small-Hub Airports within 300 miles of
LaGuardia (``Local Small Communities''). The pool of Non-Hub and Local
Small Community Operating Authorizations would be based on the service
level to Non-Hub and Small-Hub Airports during the week of October 1-6,
2006. However, any Non-Hub Airport or Small-Hub Airport would be
eligible for service under this target exemption.
Under the first option, the FAA would exclude operations arriving
and departing from Non-Hub Airports from the proposed target aircraft
size requirement. The number of Operating Authorizations that would be
excluded from the target for Non-Hub Airport service would be based on
level of operations to non-hub cities during the week of October 1-6,
2006.\26\ Although we cannot fully anticipate what may be the level of
operations for October 1-6, 2006, we believe the levels during the
twelve month period of April 2004 through March 2005 are
representative. Over the twelve-month period of April 2004 through
March 2005 there was an
[[Page 51369]]
average of forty-five operations arriving and departing to Non-Hub
Airports per day.\27\ Although the pool of Operating Authorizations
that would be excluded from the target aircraft size requirement would
remain fixed, any Non-Hub Airport could be served through these target
exclusions. Additional flights to or from these non-hub cities (beyond
the fixed number of Operating Authorizations that are excluded from the
target) would be subject to the target aircraft size requirement. This
approach maintains a level of service to Non-Hub Airports (that
typically do not support operations on large aircraft) while preserving
the possibility for other Non-Hub Airports that do not currently have
service at LaGuardia to gain this same access to the airport.
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\26\ Nantucket, Bangor, Charlottesville, Hyannis, Wilmington,
Ithaca, Lebanon, and Martha's Vineyard are Non-Hub Airports with
existing service at LaGuardia. Source: T-100 Data, April 2004-March
2005.
\27\ Source: T-100 Data, April 2004-March 2005.
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The pool of Operating Authorizations that would be excluded from
the target for service to non-hub communities would be allocated in the
same manner as the other Operating Authorizations. Air carriers
currently providing service to non-hub communities would be allocated
Operating Authorizations for ``Non-hub'' service at the October 1-6,
2006, level. If an air carrier with a Non-hub Operating Authorization
wanted to sell or lease the Operating Authorization in the secondary
market, it could do so, but the Operating Authorization would have to
be sold or leased as a ``Non-hub'' Operating Authorization. Therefore,
the pool of ``Non-hub'' exemptions would remain fixed throughout the
life of the rule.
The second option is similar to the first; however, it provides a
larger pool of Operating Authorizations that would be excused from the
average aircraft size target. The pool of Operating Authorizations in
this option would be equivalent to the October 1-6, 2006, level of
service to Non-Hub Airports and to Small-Hub Airports within 300 miles
of LaGuardia.\28\ Over the twelve-month period of April 2004 through
March 2005 there was an average of 121 operations arriving and
departing to these airports per day.\29\ Although the pool of exempt
Operating Authorizations would be fixed to October 1-6, 2006, level of
service, air carriers could use these Non-hub and Local Small Community
Operating Authorizations to provide service to any Non-Hub Airport or
any Small-Hub airport within 300 miles of the airport; they would not
be restricted to serving just the non-hub and small-hub cities that
have service at LaGuardia as of October 1-6, 2006.\30\
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\28\ Small Hub Airports that are within 300 miles of LaGuardia
and have existing service include: Albany, Burlington, Portland,
Richmond, Rochester, Syracuse and Newport News/Williamsburg. (Non-
Hub Airports with existing service are listed in footnote above).
Source: T-100 Data, April 2004-March 2005.
\29\ Source: T-100 Data, April 2004-March 2005.
\30\ FAA believes that there is merit in preserving nonstop
service to non and small hub cities within 300 miles of LaGuardia.
If passengers in these cities had to make a connection in order to
fly into LaGuardia, they likely would fly further away from
LaGuardia to reach the connecting airport.
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However, as under the first option, the number of target-exempt
flights to Non-hubs and Local Small Communities would be limited to the
number of Operating Authorizations in the Non-hub and Local Small
Community pool. Additional flights to or from these cities would be
subject to the seat size requirement of this rule.
Because the pool of Non-hub and Local Small Community Operating
Authorizations would remain fixed, if an air carrier wanted to start
new service to a qualified Small or Non-Hub Airport it could do so
using these excluded Operating Authorizations, but it would have to
forego another Non-Hub or Small-Hub Airport. As a result, the amount of
service to or from a particular non-hub or small-hub community might
vary over time, but the total number of exempt operations to such
communities would remain the same.\31\
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\31\ Non Hub and Small Hub Operating Authorizations could only
be used for service to qualifying airports; service to medium and
large hubs would not be permitted with this pool of Operating
Authorizations.
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Operating Authorizations for service to non-hub and Local Small
Communities would be allocated in the same manner as described in the
first option. Similarly, if an air carrier wishes to sell or lease a
Non-hub and Small Community Operating Authorization on the secondary
market, it would be leased or sold as such.
The third exemption option would provide the greatest number of
exemptions to small and non-hub communities. The FAA would exempt
flights to all Non-Hub Airports, all Small-Hub Airports that have
service at LaGuardia as of October 1-6, 2006, and any Small-Hub
Airports within 300 miles of LaGuardia.\32\ Operating Authorizations
would be ``grandfathered'' to carriers that provide service to these
airports as October 1-6, and the transfer of these Non-hub and Local
Small Community Operating Authorizations in the secondary market would
be subject to the same type of restrictions as described in the two
previous alternatives. The total number of such exemptions would be
fixed but the number of operations to any one Non-Hub or Small-Hub
Airport might vary over time.
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\32\ The following non hub and small hub airports have existing
service to and from LaGuardia: Nantucket, MA; Bangor, ME;
Charlottesville, VA; Hyannis, MA; Wilmington, NC; Ithaca, NY;
Lebanon, NH; Martha's Vineyard, MA; Albany, NY; Burlington, VT;
Portland, ME; Richmond, VA; Rochester, NY; Syracuse, NY; Newport
News/Williamsburg, VA; Birmingham, AL; Columbia, SC; Akron/Canton,
OH; Charleston, SC; Dayton, OH; Greensboro, NC; Greenville-
Spartanburg, SC; Lexington Blue Grass, KY; Myrtle Beach, SC;
Roanoke, VA; Savannah, GA; Knoxville, TN; and Fayetteville, AR.
Source: T-100 Data, April 2004-March 2005.
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The pool under this third exemption option would be equal to the
October 1-6, 2006, level of service from LaGuardia to Non-Hub and
Small-Hub Airports. Over the twelve-month period of April 2004 through
March 2005 there was an average of 200 operations arriving and
departing to these airports per day.\33\ This approach would maximize
service to small communities, but could remove as much as 30 percent of
the overall fleet from the population of aircraft required to meet a
minimum average seat size.\34\ In order to increase passenger
throughput, the airport-wide target may be so large as to be
impractical because the higher the airport-wide target, the more gate
limitations (certain gates can only accommodate small to medium sized
aircraft). Additionally, the FAA is aware that fewer markets support
operations on large aircraft than on small-medium sized aircraft.
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\33\ Source: T-100 Data, April 2004-March 2005.
\34\ This Non Hub and Small Hub option would provide the
greatest number of target-exemptions for service to small
communities (approximately 200 per day). These Non Hub and Small
Community Operating Authorizations combined with the target-
exemptions for ``baseline'' operations would equate to approximately
30% of the Operating Authorizations at the airport.
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The FAA seeks comment on the merits and practicality of the three
non-hub and small-hub exemption alternatives outlined above. We want to
make clear in any event that we are not proposing to limit service to
non-hub or small communities with aircraft meeting the targeted size.
3. Calculation of the Average Aircraft Size Target
The airport-wide target for the average aircraft size at LaGuardia
is dependent on which of the Non-hub and Small-hub alternatives is
ultimately adopted in the Final Rule. The target would vary because the
number of exempt Operating Authorizations is different in each
scenario. The first scenario, which only provides target exemptions for
Non-Hub Airports, would produce the lowest airport-wide target since
there would only be a limited number of
[[Page 51370]]
Operating Authorizations exempt from the target. Alternatively, the
third scenario, which would also exempt all Small-Hub Airports that
have existing service at LaGuardia and Local Small Communities,
produces the largest target because roughly 30 percent of the daily
operations would be removed from the target requirement at the airport.
The targets under each of these three scenarios are presented in the
table below.
The FAA computed the target aircraft size for LaGuardia using an
airport passenger throughput target, as determined by the Port
Authority, of 28.5 million passengers per year.\35\ T-100 data from
April 2004 through March 2005 reports roughly 372,000 commercial
operations over the twelve-month period.\36\ In order to calculate the
target size, the FAA assumed the number of commercial operations at
LaGuardia would remain constant at 75 per hour. Using T-100 data to
track historic usage patterns and service routes, the FAA has
tentatively determined that the following airport-wide targets are
appropriate, depending on which small community exemption alternative
is ultimately adopted. Currently, aircraft operating at LaGuardia have
98 seats, on average.
\35\ The Port Authority has indicated that passenger demand for
access to the airport is forecasted at 30 million annual passengers
(FAA's Terminal Area Forecast (TAF) concurs that passenger demand at
LaGuardia will reach 30 million annual passenger in the next couple
of years). However, landside limitations on the terminals and
roadways of the airport restrict passenger throughput to
approximately 28.5 million passengers per year.
\36\ Part 121 and scheduled Part 135 departure data is submitted
by carriers to the Office of Airline Information (OAI) within the
Bureau of Transportation Statistics (BTS) under 14 CFR Parts 241 and
298, respectively. The airlines submit the data on Form 41, Schedule
T-100 `` U.S. Air Carrier Traffic and Capacity Data By Nonstop
Segment and On-flight Market and Form 41, Schedule T-100 (f)--
Foreign Air Carrier Traffic and Capacity Data by Nonstop Segment and
On-flight Market.
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Option 1: Non-Hub Airports and up to 10 Baseline Operations per Carrier
would be Exempt
Target Average Aircraft Size = 105 Seats
Option 2: Non-Hub Airports, Small-Hub Airports < 300 Miles and up to 10
Baseline Operations per Carrier would be Exempt
Target Average Aircraft Size = 116 Seats
Option 3: Non-Hub Airports, Small-Hub Airports with Existing Service,
Small-Hub Airports < 300 Miles and up to 10 Baseline Operations per
Carrier would be Exempt
Target Average Aircraft Size = 122 Seats
The FAA seeks comments on each of the non-hub and small-hub
exemption alternatives and the corresponding airport-wide targets.
4. Use-or-Lose Requirements
a. Use-or-Lose Requirement Based on Average Aircraft Size. The FAA
is proposing a requirement to obtain compliance with the ``target''
aircraft size requirement at the airport. The FAA would administer the
requirement on an annual basis. Carriers would be required to submit
annual reports of usage, including a record of (1) the FAA assigned
priority number, time, and arrival or departure designation; (2) the
operating carrier; (3) the aircraft-type; (4) the number of passenger
seats on the aircraft for each operation; (5) the date and time of each
of its operations using an Operating Authorization, including flight
number, and origin/destination; and (6) the average number of seats
flown for all operations over the year. Statistics on the use of
baseline authorizations and target exclusions for service to Non-Hub
and Small-Hub Airports would be required in the report, although the
number of seats flown on these operations would not be included in the
carrier's average seat size calculation. The annual report would be due
to the FAA no later than March 1st of each year, starting March 1,
2008.
The average seat size would be computed by totaling the number of
seats flown over the year (on each Operating Authorization, excluding
baseline operations and operations that serve Non-Hub and Small-Hub
Airports), divided by the total number Operating Authorization
days.\37\ Operating Authorizations that are not used on any given day
would be presumed to have a zero seat capacity.\38\ A carrier's average
number of seats on all Operating Authorizations combined during the
year must meet the annual airport-wide for the carrier to be in
compliance with the utilization requirement.\39\
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\37\ Operating Authorization days would be Monday through Friday
and Sunday afternoons.
\38\ Because unused Operating Authorizations must be included in
the average seat size calculation the Use-or-Lose requirement
ensures Operating Authorizations are used and not sitting idle.
\39\ The following example illustrates the average seat size
computation for an air carrier that holds three evening Operating
Authorizations that are not excluded from the target.
Each year there would be approximately 313 Operating
Authorization days for each of the Operating Authorizations (365
days -52 Saturdays).
*If the carrier offered a total of 33,000 seats over the year on
the first Operating Authorization the average seat size on that
Operating Authorization would be: 33,000/313 days = 105 seats per
aircraft;
*If the carrier offered a total of 40,000 seats over the year on
the second Operating Authorization the average seat size on that
Operating Authorization would be: 40,000/313 days = 128 seats per
aircraft; and
*If the carrier offered 27,000 seats over the year on the third
Operating Authorization the average seat size on that Operating
Authorization would be: 27,000/313 days = 86 seats per aircraft.
*The air carrier's average seat size over all three Operating
Authorizations would be equal to: 100,000 seats/939 Operating
Authorization Days = 107 seats per aircraft.
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If a carrier fails to meet the average seat size requirement for
the year, it would be required to give up sufficient Operating
Authorization(s) beginning with those that use the smallest average
aircraft size until the remainder meet the target from the preceding
year. (If two or more Operating Authorizations have the same average
aircraft size and are tied as having the smallest average seat size,
the carrier could chose which of those Operating Authorization(s) would
be withdrawn unless the FAA determines that there is an operational
need to withdraw one Operating Authorization over another.) The FAA
would provide 45 days notice to the carrier prior to withdrawing
Operating Authorization(s). The Use-or-Lose requirement would be waived
during the Thanksgiving, Christmas, and New Year's holiday periods. The
Use-or-Lose requirement could also be waived during a strike, or in
other circumstances outside a carrier's control, as determined by the
FAA.
b. Use-or-Lose Requirement for ``Baseline'' and `` Small
Community'' Operating Authorizations. The FAA believes that a minimum
usage requirement is appropriate for Operating Authorizations excluded
from the target aircraft requirement. Although these operations are not
subject to the upgauging aspect of the rule, these resources should be
used effectively. Depending on which non-hub and small-hub exemption
scenario is selected in the final rule, a significant number of
Operating Authorizations may not be subject to the airport-wide target.
Therefore, the omission of a Use-or-Lose requirement on these exempt
Operating Authorizations as well as the Baseline Operations would pose
a risk that a sizable number of Operating Authorizations could be used
inadequately.\40\
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\40\ It should be noted that several airlines that responded to
the Chicago O'Hare Notice of Proposed Rulemaking (Docket No. FAA-
2005-20704) supported a Use-or-Lose requirement at O'Hare when
presented with the option of not having a usage requirement at the
airport. It was generally suggested that a minimum usage requirement
should be included to prevent carriers from retaining Arrival
Authorizations for which they have no use.
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[[Page 51371]]
The FAA proposes to adopt a Use-or-Lose provision that would
require air carriers to utilize each authorization they hold at least
80 percent of the time over a two-month reporting period. Any Operating
Authorization used less frequently would be withdrawn after notice to
the holder. Under this alternative, the 80 percent usage requirement
would apply only during the restricted hours (i.e. Saturdays and Sunday
mornings would be excluded from the usage requirement). The
Thanksgiving, Christmas, and New Year's holiday periods could also be
excluded. The Use-or-Lose requirement would also be waived during a
strike, or in other circumstances as determined by the FAA.
This proposed Use-or-Lose requirement mirrors one of the minimum
usage alternatives presented in the Chicago O'Hare NPRM and widely
supported by the commenters. Nevertheless, FAA seeks comment regarding
the appropriate minimum usage requirement for Operating Authorizations
that are not subject to the aircraft size target at LaGuardia.
5. Lottery for the Reallocation of Certain Operating Authorizations
The FAA is proposing to implement a weighted lottery for
reassigning authorizations that are returned to the FAA, withdrawn as a
result of failing to meet the usage requirements under the Use-or-Lose
provision of the rule, or not assigned by the FAA as part of the
initial allocation. Under this system, each carrier's weight in the
lottery would be inversely proportional to the carrier's share of total
operations at LaGuardia. If a potential new entrant wishes to
participate in the lottery, its weight would equal that of a carrier
with a single roundtrip flight at the airport.
An inversely weighted lottery would provide preferences to carriers
that do not have a presence at LaGuardia and to those carriers with a
limited number of Operating Authorizations at the airport.\41\ This
approach meets the Secretary of Transportation's public interest
objectives by keeping available a variety of adequate, economic,
efficient, and low-priced air services; placing maximum reliance on
competitive market forces and on actual and potential competition;
encouraging entry into air transportation markets by new and existing
air carriers; and continuing to strengthen small air carriers to ensure
a more effective and competitive airline industry. See 49 U.S.C.
40101(a)(4), (6), (10)-(13) and (16), and 40105(b). To further these
goals and to assure efficient and effective use of the authorizations,
Operating Authorizations obtained through a weighted lottery may not be
bought, sold, leased, or otherwise transferred until one year has
elapsed from their assignment.
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\41\ This lottery differs from that which was proposed in the
congestion management rule at Chicago's O'Hare. The lottery to
reallocate withdrawn operations at O'Hare would consist of two
rounds. In the first round, only new entrants and limited incumbents
would be permitted to participate. In the second round any remaining
Arrival Authorizations would be assigned by lottery to incumbent
carriers at O'Hare.
The lottery proposed herein for LaGuardia also provides a
preference for limited incumbents and new entrants, but does not
preclude incumbent carriers from participating in the first round of
the lottery. Since this proposed rule is expected to have a longer
duration than that which was proposed at O'Hare, the FAA determined
that it is important to implement a lottery that provides all
carriers access to reallocated/withdrawn Operating Authorizations.
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An inverse lottery disadvantages those carriers with the largest
presence at LaGuardia because they will always be less likely to win an
Operating Authorization than other carriers with a smaller presence.
However, an inverse lottery is appropriate in this limited circumstance
because under our proposal the incumbent carriers at the airport would
have already received numerous Operating Authorizations in the initial
allocation process.
This lottery approach is limited to Operating Authorizations that
are lost via the Use-or-Lose provision or are otherwise returned to the
FAA for non-use and to any Operating Authorizations that are not
assigned by the FAA as part of the initial allocation. Those Operating
Authorizations that revert back to the FAA as a function of the
Operating Authorizations' finite life are not impacted by this lottery.
The method for reallocating expired Operating Authorizations has not
been decided; however, the FAA preliminarily finds that an inverse
lottery would not be appropriate for reallocation. The FAA believes it
may be unfair to impose an inverse lottery on those withdrawals because
the incumbent carriers would repeatedly be penalized as the lowest
weighted lottery participant.
The following provides an illustration of how weights would be
assigned to each carrier in the lottery if there were three carriers
participating in the lottery. Assume Carrier A has 50 Operating
Authorizations, Carrier B has 20 Operating Authorizations, and Carrier
C has 10 Operating Authorizations, for a total of 80 Operating
Authorizations.
Carrier A's share is 50/80 = 0.600
Carrier B's share is 20/80 = 0.250
Carrier C's share is 10/80 = 0.125
The inverse of each carrier's market share determines each
carrier's weight in the lottery. Thus:
Carrier A's weight in the lottery is: 1 / 0.6 = 1.67
Carrier B's weight in the lottery is: 1 / 0.25 = 4.0
Carrier C's weight in the lottery is: 1 / 0.125 = 8.0
Each carrier's odds of winning the lottery are a function of their
weight in the lottery. In this example, Carrier A holds the greatest
number of Operating Authorizations at LaGuardia, and therefore has the
lowest odds of winning the lottery. The odds that each carrier would
win are as follows:
Carrier A's chances of winning are 1.67 / 13.67 = 12.22%
Carrier B's chances of winning are 4 / 13.67 = 29.26%
Carrier C's chances of winning are 8 / 13.67 = 58.52%
If a new entrant carrier, Carrier D, also enters the lottery it
would be assigned a weight as if it had one round trip flight (2
Operating Authorizations) at the airport. The odds that each carrier
would win are adjusted as follows:
Total weight in the lottery would be increased to 13.67 + 40 =
53.67 \42\, so:
\42\ Carrier D's weight in the lottery is calculated as follows:
Carrier D's share = 2 Operating Authorizations/80 Operating
Authorizations = .025.
Carrier D's weight in the lottery = 1/.025 = 40.
A's chances of winning are 1.67 / 53.67 = 3.1%
B's chances of winning are 4 / 53.67 = 7.5%
C's chances of winning are 8 / 53.67 = 14.9%
D's chances of winning are 40 / 53.67 = 74.5%
Alternatively, the FAA is considering permitting the sale of
Operating Authorizations that would otherwise be withdrawn or returned
in a blind secondary market. This approach has the benefit of not
penalizing, even marginally, carriers with sizeable Operating
Authorizations because their acquisition opportunity would not be
hampered by their existing holdings. However, this mechanism would not
provide any advantage for new carriers or for those carriers with only
a few Operating Authorizations.
Under the blind secondary market scenario, if a carrier did not
meet the target aircraft size requirement, the FAA would provide 45
days advance notice to the carrier that it has failed to meet the usage
requirement and an Operating Authorization(s) was to be withdrawn. The
Operating Authorization would then be posted for sale in the blind
[[Page 51372]]
auction (see details of Alternative 1 in the Secondary Market
discussion below). Proceeds of a sale would go to the airline that lost
the Operating Authorization and any unsold Operating Authorizations
would revert to the FAA and be reallocated in a lottery.
The FAA requests comments on the relative merits of these two
reassignment methodologies for withdrawn Operating Authorizations.
C. Commercial Options for Carriers
1. Secondary Market
Under the HDR, the Department received complaints about the buy/
sell process as it was implemented. The rule permitted the buyer and
seller to deal directly with each other. Incumbent carriers would
refuse to sell to a new entrant or a competitive airline according to
the reports received by the Department, raising concerns with the
``transparency'' \43\ of the existing secondary market. There was no
requirement for the seller to advise parties that slots were available,
limiting opportunity for other carriers to make an offer for the slot.
Finally, the terms of a transaction were not disclosed making it more
difficult to develop future bidding strategies, which may have included
cash and non-cash assets.
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\43\ ``Transparency means that the identity of buyers and
sellers is known. Transparency in the secondary market permits
strategic sales, leases, and purchases by incumbents to prevent new
entry.'' Comments of the United States Department of Justice in
Docket No. FAA-2005-20704. May 24, 2005, pp. 5-9.
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The Department of Justice submitted comments in the O'Hare
rulemaking, which supported the use of a blind market or a non-
transparent market, because the secondary markets at LaGuardia and
O'Hare under the HDR have not been ``sufficiently liquid.'' \44\ A
blind secondary market effectively eliminates non-cash assets to be
bid. We acknowledge that a proposal to prohibit the use of non-monetary
considerations in transactions involving Operating Authorizations may
be unpopular.\45\ Cash equivalent consideration allows the buyer of an
Operating Authorization to offer items that may be mutually beneficial
and less ``cost'' than cash. Perhaps, given the industry's liquidity
problems and the operational needs of carriers at various airports, an
airline selling or buying an Operating Authorization ought to be able
to accept or offer non-monetary consideration (i.e. services, ground
handling) as part of the bid. By opening the auction to pledges of
assets other than money, we would widen the auction market to cash-
strapped airlines.
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\44\ Id.
\45\ We learned under the O'Hare rulemaking that most commenters
believe that each carrier should be allowed to consider the value of
specific gates, baggage handling, marketing arrangements, and other
potential offers in lieu of cash.
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Nevertheless, we are concerned that the uniqueness of non-monetary
assets, such as baggage handling and marketing arrangements, would
effectively undermine any form of a ``blind'' secondary market. The
inclusion of non-monetary assets would make it virtually impossible to
hide identities during the bid evaluation process. In order for the
buyer to put together an attractive package and assign a value to non-
cash assets, the seller must be known. Similarly, a seller cannot
assess the value of an asset if it does not know who is specifically
offering the asset and how the asset would be transferred. Furthermore,
if non-cash assets are pledged, the parties would want to negotiate
terms, including but not limited to, the terms of any warranties,
approval and agreement enforceability, and damages for any breach of
the agreement. It is unreasonable to assume that the FAA, or any other
entity, could independently appraise the value of a package for the
buyer or seller. In fact, the FAA would not be in a position to judge
the value of an offer to the selling carrier since that involves access
to the carrier's strategic plan and internal documents that would not
be readily available.
We are seeking comment on three alternative secondary market
provisions for this proposed rule. Differences under each proposed
alternative include whether the sale or lease is blind and whether non-
cash assets could be included in the buyers' bids.
Alternative 1 would be a blind, cash-only secondary
market. The identity of the seller and the bidders would be maintained
until the seller accepts the highest bid at the close of the auction.
Sellers would be expected to close the sale in good faith regardless of
whom the buyer may be.
Alternative 2 would permit non-cash assets to be bid, and
the parties identities would be known throughout the process. When the
FAA posted notice of the sale of an Operating Authorization, the seller
would be identified. As each bid was posted, the identity of the
bidders would be disclosed. Consideration for the transaction could be
any combination of money, real property and non-monetary assets. An
estimated value of these assets would have to be provided under each
bid. Because the FAA would not be in a position to deem what bid is of
highest value to the seller, all bids would be posted at the close of
each day. Within five business days of the close of the auction, the
seller, in good faith, would have to identify to the FAA which bid is
most competitive. The seller and buyer then would have 10 business days
to negotiate the provisions of the sale.
Alternative 3 is a hybrid of the first two alternatives
described above. This option provides for up-front anonymity and cash-
only bids, but it would eventually allow the parties to negotiate non-
cash terms. During the posting of the sale or lease and the subsequent
bidding of an Operating Authorization, the party's identities would not
be known. Once the auction closed, the FAA would forward the highest
bid to the seller without any bidder identification. The seller would
have three business days to accept the bid. The parties' identities
would then be revealed, and they would have 10 business days to
negotiate the possibility of non-cash assets in lieu of money as
consideration for the sale or lease. If, however, the parties did not
come to agreement on the non-cash assets, sale or lease of the
Operating Authorization would have to proceed on a cash-only basis.
The advantage of Alternative 3 is that it responds to concerns that
the buy/sell arrangements that currently occur under the HDR are too
transparent; thereby allowing incumbent carriers to fence out new
entrants or other airlines that could pose a competitive threat. At the
same time, it releases restrictions on the use of non-monetary
considerations. Again, because of the uniqueness of non-monetary
assets, the identity of the buyer and seller eventually have to be
disclosed so that they can come to terms on the possible non-cash
aspects of the package. If, however, the parties cannot come to
agreement on non-monetary consideration, both parties are fully
expected to follow through on the transaction on a cash-only basis.
While this may mean that cash-strapped carriers without the credit-
worthiness to obtain liquidity on a secured or unsecured basis would
not be able to participate in the process because they risk having to
come up with 100% cash, it does allow for some flexibility.
Under either Alternatives 2 or 3, we would preclude the direct
trading in gate leasehold interests. Under the terms of the FAA-airport
grant assurances, airports have agreed to make their facilities
available for public use under reasonable terms and conditions.\46\
This assurance obligates an airport to make its facilities available to
a requesting carrier, whether an incumbent carrier that is seeking to
expand at the airport
[[Page 51373]]
or a new entrant seeking access. By facilitating requested
accommodations, an airport is able to provide opportunities for airline
competition and thereby confer benefits on the traveling public and
help to stimulate economic growth. Since gates are a necessary part of
access, the FAA expects airports to assert and maintain control over
each airline's use of and leasehold interests in the gates and to
notify all interested carriers when a gate is underutilized or
otherwise becomes available. Implementing fair and transparent
procedures for gate access assures that dominant carriers do not
control access to the airport to the exclusion of competitors. We
believe that permitting a carrier to trade its gate leasehold rights
for an operating authorization at LaGuardia would diminish the control
of the airport operator over its facilities and could denigrate
competitive opportunities at the airport served by the bidding airline.
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\46\ 49 U.S.C. 47107(a).
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The general process under any of the alternatives would be as
follows:
The FAA would serve as the clearinghouse through which sales and
leases of Operating Authorizations are completed, which would address
complaints by some airlines and other entities that under the HDR, they
were not even aware of opportunities to purchase or lease slots.\47\ A
carrier wishing to sell, lease or buy an Operating Authorization would
notify the FAA of the relevant details--the Operating Authorization
number, time, frequency, expiration date and effective date the
Operating Authorization would transfer to the winning bidder--and the
FAA would post advance notice of the opening and closing dates for bids
to all airlines and afford all airlines an equal opportunity to bid. A
Small Community Operating Authorization must be sold, bought and leased
as a Small Community Operating Authorization. Selling carriers may also
provide the FAA with a minimum bid price, which the FAA would post.
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\47\ The DOT has docketed three petitions on this subject in
recent years. Dockets OST-2004-18586, OST-2002-13650, and FAA-2001-
9156. The petitions are available for review on the DOT's Web site.
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Carriers would be permitted to continue bidding until the closing
date of the auction. To insure against participants bidding at the last
moment (known as ``bid-sniping''), the ``winning'' bidder must
participate in the bidding from the first day of the auction, rather
than submitting a bid in the final minutes before the bidding is
closed.\48\ In order to qualify, bids must meet the minimum price if
one is specified. The FAA proposes that each auction would last for 3
business days. Upon acceptance of a bid and ratification of the sale or
lease, both airlines would have to submit the necessary information to
the FAA for transfer of the Operating Authorization in a timely manner.
A record of each sale and lease would be kept on file by the FAA and be
available to the public upon request. Only airlines would be allowed to
participate in this market. The FAA welcomes comments from the public
on these or other appropriate auction design features.\49\
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\48\ Requiring the winning bidder to participate in all rounds
of the auction encourages sincere bidding.
\49\ The secondary market that is being proposed for use at
LaGuardia differs somewhat from the blind secondary market that was
proposed at Chicago O'Hare because the proposed rule at LaGuardia
will be permanent and the O'Hare rule is scheduled to sunset in
2008. We believe that it is appropriate to implement a more
sophisticated auction-style secondary market at LaGuardia
considering the long-term nature of the rule.
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2. One-for-One Trades
In addition, the proposed rule would permit the one-for-one
exchange of Operating Authorizations between airlines so long as no
additional consideration was provided. Under the proposal, these
exchanges must be publicly disclosed and could take place outside of
the secondary market because many of these arrangements are for
operational reasons and could be accomplished only through multi-
carrier trades. Such exchanges would be an effective way to deal with
variations in seasonal demand and airline business strategies. The
authorizations could not be used until written confirmation of the
transaction is received from the FAA. Both parties would have to attest
that no other consideration or promise of consideration was provided by
either party to the trade.
D. Unscheduled Operations
The FAA is proposing to implement a Reservation system for
unscheduled operations to ensure that demand is spread reasonably
throughout the day to support the FAA's established operational cap for
scheduled and unscheduled flights.\50\ Therefore, the FAA proposes a
limit of 6 unscheduled operations per hour between the hours of 6:30
a.m. and 9:59 p.m. The FAA recognizes that there is often greater
flexibility in the timing of these flights and there are many factors
that impact the proposed time of these unscheduled flights. The FAA
believes that a half-hour allocation period would be appropriate and
proposes to limit Reservations in each half-hour period to no more than
3 operations (arrivals and departures).
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\50\ Unscheduled operations are operations other than those
regularly conducted by a carrier between LaGuardia and another
service point. The unscheduled operations include general aviation,
public aircraft, military, charter, ferry, and positioning flights.
(An air carrier also could use an Operating Authorization for a
ferry, positioning, or other non-revenue flight. An air carrier may
choose to do so if a Reservation is not available.) Helicopter
operations are excluded from the reservation requirement.
Reservations for unscheduled flights operating under visual flight
rules (VFR) are granted when the aircraft receives clearance from
air traffic control to land or depart LaGuardia. Reservations for
unscheduled VFR flights are not included in the limits for
unscheduled operators.
---------------------------------------------------------------------------
The allocation mechanism for unscheduled operations proposed in
this NPRM is similar to the procedures the FAA currently follows in
allocating unscheduled reservations for airports subject to the
provisions of the HDR (particularly LaGuardia Airport and John F.
Kennedy International Airport). The proposed procedures are also
similar to the measures that were implemented at Chicago O'Hare in
Special Federal Aviation Regulation (SFAR) 105.
A Reservation would be allocated on a 30-minute basis during the
peak hours for which the restrictions would be in place. The FAA's
Airport Reservation Office (ARO) would receive and process all
Reservations. The Reservations would be allocated on a first-come,
first-served basis, determined by the time the request is received by
the ARO. Operators can obtain a Reservation: (1) through the Internet;
or (2) by calling the ARO's interactive computer system via touch-tone
telephone. Operators would provide the date and time of the proposed
operation and other identifying information concerning the aircraft and
the intended flight. Reservations could be made no more than 72 hours
in advance of the proposed flight time. The assigned Reservation number
would be included in the ``Remarks'' section of the flight plan.
Reservations must be cancelled if they will not be used as assigned so
that another operator has an opportunity to operate to or from the
airport. The FAA would not permit a secondary market in Reservations in
order to prevent abuse of the system or the bundling of airport
Reservations with other flight-related services.
The FAA is not proposing to include a limited exception to the 72-
hour window for public charter operators to obtain a Reservation, as
was adopted under SFAR 105 for Chicago's O'Hare International Airport.
There is more connecting and international passenger
[[Page 51374]]
traffic at O'Hare than at LaGuardia, which has more point-to-point,
short-haul traffic. Therefore, it is important that public charter
operations flying into O'Hare be able to connect to commercially
scheduled flights (domestic or international) and arrive at O'Hare at
their intended arrival time so passengers can make their flight. Also,
many of these public charter flights at O'Hare operate to international
destinations, representing key access for service to those points from
the Chicago area. However, charter operations that fly to the New York
City area to connect to international or long-haul domestic flights, or
to serve international destinations more on a origin/destination basis,
are more likely to fly into Newark Liberty International or John F.
Kennedy International (which house those operations in the New York
area), rather than LaGuardia. Consequently, the nature of public
charter operations at LaGuardia does not warrant treatment different
than any other unscheduled operation.
The allocation of a Reservation does not constitute an Air Traffic
Control clearance nor does it replace the need to file an IFR flight
plan. The FAA would accommodate declared emergencies without regard to
reservations. Non-emergency flights in direct support of national
security, law enforcement, military operations, or public-use aircraft
operations may be accommodated above the reservation limits with the
prior approval of the FAA. The FAA may authorize additional
Reservations for unscheduled operations if permitted by operating
conditions or if there are temporarily available Operating
Authorizations.
E. Administrative Reversion of Operating Authorizations
Operating Authorizations are temporary operating privileges. As
such, they remain subject to FAA control. We propose allowing them to
be bought and sold, subject to FAA secondary market restrictions, in
order to promote their most efficient use. However, they may be
withdrawn at any time to fulfill operational needs such as eliminating
operations due to reduced capacity. If the FAA determines that capacity
must be reduced for a specified period of time, for example if a runway
were temporarily closed, Operating Authorizations would be withdrawn.
Once the capacity is resumed, the withdrawn Operating Authorizations
would be returned to the carriers from which they were withdrawn
provided they continued to conduct scheduled service at the airport.
The FAA would assign, by random lottery, priority numbers for
withdrawal of Operating Authorizations, if necessary to reduce capacity
for operational reasons. If it was necessary to withdraw Operating
Authorizations, they would be withdrawn in the specified 15-minute time
periods in accordance with the priority list. Carriers with a limited
presence at the airport would be protected from the withdrawal of
Operating Authorizations. Carriers with fewer than 10 Operating
Authorizations would not have authorizations withdrawn from them under
these provisions of the rule.
The proposal also provides that all of the Operating Authorizations
held by any carrier would revert to the FAA if that carrier ceases all
operations at LaGuardia for any reason other than a strike or labor
dispute.\51\
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\51\ An air carrier could sell off its Operating Authorizations
as part of a liquidation strategy, if it does so before failing to
meet the Use-or-Lose requirements of the rule. However, if an air
carrier ceases all operations and subsequently fails to meet the
Use-or-Lose requirement, the Operating Authorizations would revert
to the FAA and they could not be sold.
---------------------------------------------------------------------------
Paperwork Reduction Act
This proposal contains the following new information collection
requirements. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), the FAA has submitted the information requirements
associated with this proposal to the Office of Management and Budget
for its review.
Title: Congestion Management Rule for LaGuardia Airport.
Summary: The FAA is proposing a new rule to address the potential
for increased congestion and delay at New York's LaGuardia Airport
(LaGuardia) when the High Density Rule (HDR) expires there on January
1, 2007. The rule, if adopted, would establish an operational limit on
the number of aircraft landing and taking off at the airport. To offset
the effect of this limit, the proposed rule would increase utilization
of the airport by encouraging the use of larger aircraft through
implementing an airport-wide, average aircraft size requirement
designed to increase the number of passengers that may use the airport
within the overall proposed operational limits.
Use of: The information is reported to the FAA by operators holding
Operating Authorizations. The FAA logs, verifies, and processes the
requests made by the operators.
This information is used to allocate, track usage, withdraw, and
confirm transfers of Operating Authorizations among the operators and
facilitates the buying and selling of Operating Authorizations in the
secondary market. The FAA also uses this information in order to
maintain an accurate base of operations to ensure compliance with the
operations permitted under the rule and those actually conducted at the
airport.
Respondents (including number of:) The likely respondents to this
proposed information requirement are scheduled carriers with existing
service at LaGuardia, carriers that plan to enter the LaGuardia market
(and participate in the lottery or secondary market), and carriers that
enter the LaGuardia market in the future. There are currently fourteen
(14) carriers with existing scheduled service at LaGuardia.
Frequency: The information collection requirements of the rule
involve scheduled carriers notifying the FAA of their use of Operating
Authorizations. The carriers must notify the FAA of: (1) Requests to be
included in a lottery for available Operating Authorizations; (2)
requests for confirmation of one-for-one Operating Authorization
trades; (3) usage of Operating Authorizations that are subject to the
airport-wide upgauging target, and compliance with that target (on an
annual basis); (4) usage of Operating Authorizations that are not
subject to the airport-wide target (on a bi-monthly basis); and (4)
participation in the secondary market.
Annual Burden Estimate: The annual reporting burden for each
subsection of the rule is presented below.
The reporting burden was calculated by the following formula:
Annual Hourly Burden = ( of respondents) * (time involved) *
(frequency of the response).
Section 93.67(c) Sale and Lease of Operating Authorizations
(16 carriers) * (1.5 hours per submittal) * (4 occurrences per year) =
96 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours for each occurrence of a sale or lease of
an Operating Authorization. For each operator, we assumed that a sale
or lease of an Operating Authorization would occur quarterly.
Section 93.68(b) One-for-One Trades of Operating Authorizations
(16 carriers) * (1.5 hours per submittal) * (4 occurrences per year) =
96 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours for each occurrence of a one-for-one
trade of an Operating Authorization. For each
[[Page 51375]]
operator, we assumed that a one-for-one trade of an Operating
Authorization would occur quarterly.
Section 93.72(a) Reporting Requirements
(16 carriers) * (1.5 hours per submittal) * (1 occurrence per year) =
24 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours for each annual occurrence of the data
required in Sec. 93.72(a)(1) and Sec. 93.72(a)(2).
Section 93.72(b) Reporting Requirements
(16 carriers) * (1.5 hours per submittal) * (6 occurrences per year) =
144 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours every two months of the data required by
Sec. 93.72(b).
Section 93.72(c) Reporting Requirements
(16 carriers) * (1.5 hours per submittal) * (1 occurrence per year) =
24 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours for each annual occurrence of the data
required in Sec. 93.72(c).
Section 93.73(d) Weighted Lottery
(16 carriers) * (1.5 hours per submittal) * (4 occurrence per year) =
96 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours every quarter for participation in a
lottery for an Operating Authorization.
Section 93.74(d) Administrative Provisions
(16 carriers) * (1.5 hours per submittal) * (4 occurrence per year) =
96 hours
We assumed that the 16 marketing carriers operating at LaGuardia
expend one and one half hours every quarter for administrative
provisions.
Summary--Total Annual Hourly Reporting Burden--576 Hours
The agency is soliciting comments to--
(1) Evaluate whether the proposed information requirement is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
Individuals and organizations may submit comments on the
information collection requirement by October 30, 2006, and should
direct them to the address listed in the ADDRESSES section of this
document. Comments also should be submitted to the Office of
Information and Regulatory Affairs, OMB, New Executive Building, Room
10202, 725 17th Street, NW., Washington, DC 20053, Attention: Desk
Officer for FAA.
According to the 1995 amendments to the Paperwork Reduction Act (5
CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the
collection of information, nor may it impose an information collection
requirement unless it displays a currently valid OMB control number.
The OMB control number for this information collection will be
published in the Federal Register, after the Office of Management and
Budget approves it.
International Compatibility
In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to comply with
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
determined that there are no ICAO Standards and Recommended Practices
that correspond to these proposed regulations.
Economic Assessment, Regulatory Flexibility Determination, Trade Impact
Assessment, and Unfunded Mandates Assessment
Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs that each Federal agency
shall propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs. Second,
the Regulatory Flexibility Act of 1980 requires agencies to analyze the
economic impact of regulatory changes on small entities. Third, the
Trade Agreements Act (19 U.S.C. 4 2531-2533) prohibits agencies from
setting standards that create unnecessary obstacles to the foreign
commerce of the United States. In developing U.S. standards, this Trade
Act requires agencies to consider international standards and, where
appropriate, to be the basis of U.S. standards. Fourth, the Unfunded
Mandate Reform Act of 1995 (Public Law 104-4) requires agencies to
prepare a written assessment of the costs, benefits, and other effects
of proposed or final rules that include a Federal mandate likely to
result in the expenditure by State, local, or tribal governments, in
the aggregate, or by the private sector, of $100 million or more
annually (adjusted for inflation).
In conducting these analyses, FAA has determined this proposed rule
(1) has benefits that justify its costs, is a ``significant regulatory
action'' as defined in section 3(f) of Executive Order 12866, and is
``significant'' as defined in DOT's Regulatory Policies and Procedures;
(2) would not have a significant economic impact on a substantial
number of small entities; (3) would not adversely affect international
trade; and (4) would not impose an unfunded mandate on State, local, or
tribal governments, or on the private sector. These analyses, set forth
in this document, are summarized below.
Total Costs and Benefits of This Rulemaking
FAA estimates that this proposed rule would result in about a 37%
decrease in the average delay per operation at LaGuardia. Present value
net benefits are estimated at $4.3 billion from 2007-2019; net benefits
over an infinite time horizon total about $7.5 billion. The benefits
are estimated by comparing the no-rule scenario (similar to the
situation at LaGuardia in 2001) with the proposed upgauging scenario.
There are almost no costs associated with the proposed rule. The
only exception is for the cost of designing and carrying out periodic
lotteries that may be required to assign unused operating
authorizations. These present value costs total about $11.3 million
through 2019, and $19.4 million over an infinite time horizon.
Who Is Potentially Affected by This Rulemaking
Operators of scheduled and non-scheduled, domestic and
international flights, and new entrants who do not yet operate at New
York's LaGuardia Airport (LaGuardia).
All communities, including small communities with air
service to LaGuardia.
Passengers of scheduled, domestic flights to LaGuardia.
New York and New Jersey Port Authority.
FAA Air Traffic Control.
Key Assumptions
Base Case Flight Operations and Delay-Adjusted Official
Airline Guide (OAG) Schedule, December 2000 (1,373 daily operations).
[[Page 51376]]
Current Scenario Case Flight Operations and Delay--OAG
Schedule, April 19, 2005 (1,194 daily operations).
Delay improvements are about 9.2 minutes per flight,
equivalent to a 37% improvement in delay. This delay improvement
estimate was derived from GRA's \52\ Delay Model.
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\52\ GRA Inc. of Jenkintown, Pennsylvania.
---------------------------------------------------------------------------
For this evaluation, the proposed rule's effective date is
January 1, 2007.
Other Important Assumptions
Discount Rate--7%.
Period of Analysis--2007 through 2019.
Assumes 2005 Current Year Dollars.
Passenger Value of Travel Time--$30.86 per hour.\53\
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\53\ ``Draft Economic Value for FAA Investment and Regulatory
Decisions, A Guide'' December 31, 2004, weighted using LaGuardia
shares of 51% leisure and 49% business travel.
---------------------------------------------------------------------------
For this evaluation, all flights to Non-Hub Airports with
existing service at LaGuardia, as well as a baseline exemption of 10
flights for each carrier would be exempt from the aircraft upgauging
target.
Alternatives We Have Considered
Alternative 1--This alternative would have let
the High Density Rule order expire on January 1, 2007. Based on
history, under this alternative, we expected operators would most
likely continue to expand operations, and therefore further worsen
airport delays. We are presenting this alternative as the base case for
calculation of costs and benefits associated with this rulemaking.
Alternative 2--This alternative would exempt
operations to Non-Hub Airports with existing service at LaGuardia from
the target aircraft size calculation.
Alternative 3--This alternative would exempt
operations to Non-Hub Airports with existing service at LaGuardia and
Small-Hub Airports within 300 miles of LaGuardia from the target
aircraft size calculation.
Alternative 4--This alternative would exempt
operations to Non-Hub Airports with existing service at LaGuardia,
Small-Hub Airports within 300 miles of LaGuardia, and Small-Hub
Airports with existing LaGuardia service from the target aircraft size
calculation.
We are seeking comment from industry on alternatives 2
through 4 to promote efficient use of the airspace through
equipment type upgauging, but not at the expense of removing service to
small and non-hub communities.
Benefits of This Rulemaking
The primary benefits of this rule would be the airline and
passenger delay cost savings. The benefits reflect a prorating of the
5.5 days per week the operational limits are in effect. The total
estimated net benefits in present value dollars are about $4.3 billion
when compared to 2001 delays over the 13-year analysis interval.
Costs of This Rulemaking
The major costs of this proposed rule cover the costs of
implementing a lottery system for unutilized operating authorizations.
The estimated present value cost of this final rule is about $11.3
million over the 13-year analysis interval.
Regulatory Flexibility Determination
The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a
principle of regulatory issuance that agencies shall endeavor,
consistent with the objective of the rule and of applicable statutes,
to fit regulatory and informational requirements to the scale of the
business, organizations, and governmental jurisdictions subject to
regulation''. To achieve that principle, the RFA requires agencies to
solicit and consider flexible regulatory proposals and to explain the
rationale for their actions. The RFA covers a wide range of small
entities, including small businesses, not-for-profit organizations, and
small governmental jurisdictions.
Agencies must perform a review to determine whether a proposed or
final rule would have a significant economic impact on a substantial
number of small entities. If the agency determines that it would, the
agency must prepare a regulatory flexibility analysis as described in
the Act.
However, if an agency determines that a proposed or final rule is
not expected to have a significant economic impact on a substantial
number of small entities, section 605(b) of the 1980 RFA provides that
the head of the agency may so certify and a regulatory flexibility
analysis is not required. The certification must include a statement
providing the factual basis for this determination, and the reasoning
should be clear. The basis for such FAA determination follows.
The proposed rule affects all scheduled operators at LaGuardia. A
review of the number of employees for each operator shows that the
following are ``small entities'' (defined as firms with 1,500 or fewer
employees):
------------------------------------------------------------------------
Carrier Employees
------------------------------------------------------------------------
Commutair.................................................. 340
Colgan Air................................................. 546
------------------------------------------------------------------------
Under the proposed rule, all operators' Operating Authorizations
would be ``grandfathered'' for at least three years. Further, service
to Non-Hub Airports would be exempt from the upgauging incentive where
smaller entities are operating. Thus most of the LaGuardia markets
operated by existing small entities would be exempt from upgauging.
The FAA has also reviewed whether there would be interruptions to
service to communities with a population of less than 50,000. Because
of the exemption from the upgauging incentive Non-Hub Airports would
receive, only one such community is exposed. Burlington, Vermont has a
population less than 50,000, but because it is a small-hub community
\54\ it would not be eligible for the exemption. But, Burlington is a
dynamic economy, has existing service from both Newark and JFK
airports, and service from LaGuardia may well be viable at this airport
even without the exemption.
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\54\ http://www.faa.gov/arp/planning/stats/index.cfm?nav=cargo#apttype
.
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Therefore, the FAA certifies that this proposed rule would not have
a significant economic impact on a substantial number of small
entities.
International Trade Impact Assessment
The Trade Agreements Act of 1979 prohibits Federal agencies from
establishing any standards or engaging in related activities that
create unnecessary obstacles to the foreign commerce of the United
States. Legitimate domestic objectives, such as safety, are not
considered unnecessary obstacles. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards. The FAA has assessed the
potential effect of this proposed rule and determined that it would
impose the same costs on domestic and international entities and thus
have a neutral trade impact.
Unfunded Mandate Assessment
The Unfunded Mandate Reform Act of 1995 (the Act) is intended,
among other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and tribal governments. Title II of the Act
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed or final agency rule
that may result in an expenditure of $100 million or more (adjusted
annually for inflation)
[[Page 51377]]
in any one year by State, local, and tribal governments, in the
aggregate, or by the private sector; such a mandate is deemed to be a
``significant regulatory action.'' The FAA currently uses an inflation-
adjusted value of $128.1 million in lieu of $100 million. This final
rule does not contain such a mandate. The requirements of Title II do
not apply.
Executive Order 13132, Federalism
The FAA has analyzed this proposed rule under the principles and
criteria of Executive Order 13132, Federalism. We determined that this
action would not have a substantial direct effect on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government, and therefore would not have federalism implications.
Environmental Analysis
FAA Order 1050.1E, Environmental Impacts: Policies and Procedures,
identifies FAA actions that are categorically excluded from preparation
of an environmental assessment or environmental impact statement under
the National Environmental Policy Act in the absence of extraordinary
circumstances. The FAA has determined this rulemaking action qualifies
for the categorical exclusion identified in paragraph 312d ``Issuance
of regulatory documents (e.g., Notices of Proposed Rulemaking and
issuance of Final Rules) covering administration or procedural
requirements (does not include Air Traffic procedures; specific Air
Traffic procedures that are categorically excluded are identified under
paragraph 311 of this Order.)''. It has been determined that no
extraordinary circumstances exist that may cause a significant impact
and therefore no further environmental review is required.
Regulations That Significantly Affect Energy Supply, Distribution, or
Use
The FAA has analyzed this NPRM under Executive Order 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). We have determined that it is not
a ``significant energy action'' under the executive order because it is
not a ``significant regulatory action'' under Executive Order 12866,
and it is not likely to have a significant adverse effect on the
supply, distribution, or use of energy.
List of Subjects in 14 CFR Part 93
Air traffic control, Airports, Alaska, Navigation (air), Reporting
and recordkeeping requirements.
The Proposed Amendment
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend Chapter I of Title 14, Code of Federal
Regulations, as follows:
PART 93--SPECIAL AIR TRAFFIC RULES
1. The authority citation for part 93 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502,
44514, 44701, 44719, 46301.
2. Subpart C is added to read as follows:
Subpart C--Performance Based Upgauging Rule for New York LaGuardia
Airport
Sec.
93.61 Applicability.
93.62 Definitions.
93.63 Operating Authorizations for Scheduled Arrivals and
Departures.
93.64 Initial Allocation and Reallocation of Operating
Authorizations.
93.65 Duration of Operating Authorizations.
93.66 Reversion and Withdrawal of Operating Authorizations.
93.67 Sale and Lease of Operating Authorizations.
93.68 One-for-One Trades of Operating Authorizations.
93.69 Average Aircraft Size Target.
93.70 Minimum Usage Requirements for Small and Community and
Baseline Operating Authorizations.
93.71 Unscheduled Operations.
93.72 Reporting Requirements.
93.73 Weighted Lottery.
93.74 Administrative Provisions.
Subpart C--Performance Based Upgauging Rule for New York LaGuardia
Airport
Sec. 93.61 Applicability.
(a) This subpart prescribes the air traffic rules for the arrival
and departure of aircraft, other than helicopters, operating at New
York's LaGuardia Airport (LaGuardia).
(b) This subpart also prescribes procedures for the assignment,
transfer, sale, lease, reversion and withdrawal of Operating
Authorizations issued by the FAA for Scheduled Operations by Carriers
at LaGuardia.
(c) The provisions of this subpart apply to LaGuardia during the
local hours of 6:30 a.m. through 9:59 p.m., Monday through Friday, and
12 p.m. through 9:59 p.m. on Sunday. No person shall conduct a
Scheduled Operation to or from LaGuardia during such hours without
obtaining an Operating Authorization. No person shall conduct an
Unscheduled Operation to or from LaGuardia during such hours without
obtaining a Reservation.
(d) Carriers that have Common Ownership shall be considered a
single U.S. air carrier or foreign air carrier for purposes of this
subpart.
Sec. 93.62 Definitions.
For purposes of this subpart the following definitions apply:
Airport Reservation Office (ARO) is an operational unit of the
FAA's David J. Hurley Air Traffic Control System Command Center. It is
responsible for the administration of Reservations for Unscheduled
Operations at LaGuardia.
Average Aircraft Size Target is the required average number of
passenger seats per aircraft offered for sale for each Scheduled
Operation at LaGuardia. The target is calculated as the annual
passenger seats divided by the total number of Operating Authorizations
held over the year excluding all Baseline Operations and Small
Community Operating Authorizations.
Baseline Operations are Operating Authorizations excluded from the
Average Aircraft Size Target. Annually, each Carrier may designate up
to 10 Operating Authorizations per day as its Baseline Operations.
Carrier is a U.S. air carrier or foreign air carrier with authority
to conduct scheduled service at LaGuardia under Parts 121, 129, 135 of
this Chapter and has economic authority to operate scheduled service
under 14 CFR chapter II and 49 U.S.C. chapter 411.
Carrier's Average Aircraft Size is the total number of passenger
seats offered under all Operating Authorizations (excluding Baseline
Operations and Small Community Operating Authorizations) over the
calendar year, divided by the total number of Operating Authorizations
held over the year.
Common Ownership with respect to two or more air carriers or
foreign air carriers means having in common at least 50 percent
beneficial ownership or control by the same entity or entities.
Enhanced Computer Voice Reservation System (e-CVRS) is the system
used by the FAA to make arrival and/or departure Reservations for
Unscheduled Operations at LaGuardia and other designated airports.
Non-Hub Airport is a commercial service airport that has more than
10,000 annual passenger boardings but less than 0.05% of the total
annual United States passenger boardings.
Operating Authorization is the operational authority assigned by
the FAA to a Carrier to conduct one
[[Page 51378]]
scheduled instrument flight rules (IFR) arrival or departure operation
at LaGuardia on a particular day of the week during a specific 15-
minute period during the hours of 6:30 a.m. through 9:59 p.m., Monday
through Friday, and 12 p.m. through 9:59 p.m. on Sunday.
Reservation is an authorization received by a Carrier or other
operator of an aircraft, excluding helicopters, in accordance with
procedures established by the FAA to operate an unscheduled arrival or
departure to or from LaGuardia on a particular day of the week during a
specific 30-minute period during the hours of 6:30 a.m. through 9:59
p.m., Monday through Friday, and 12 p.m. through 9:59 p.m. on Sunday.
Scheduled Operation is the arrival or departure segment of any
operation regularly conducted by a Carrier between LaGuardia and
another point regularly served by that Carrier.
Small Community Operating Authorizations are the designated
Operating Authorizations excluded from the Average Aircraft Size Target
but subject to the minimum usage requirement. These Operating
Authorizations are designated by the FAA effective January 1, 2007 and
may only be used to operate to a Non-Hub and Small-Hub Airports.
Small-Hub Airport is a commercial service airport with at least
0.05% but less than .25% of total annual United States passenger
boardings.
Unscheduled Operation is an arrival or departure segment of any
operation that is not regularly conducted by a Carrier or other
operator of an aircraft, excluding helicopters, between LaGuardia and
another service point. The following types of Carrier operations shall
be considered Unscheduled Operations for the purposes of this rule:
Public, on-demand, and other charter flights; hired aircraft service;
extra sections of scheduled flights; ferry flights; and other non-
passenger flights.
Weighted Lottery is a lottery conducted by the FAA to reassign to
Carriers' Operating Authorizations that are initially unassigned,
returned to the FAA or withdrawn as a result of the Average Aircraft
Size Target requirements or minimum use requirements. A weighted
lottery assigns Operating Authorizations to a Carrier based on its
inverse proportion of the Carrier's share of total Operating
Authorizations at LaGuardia.
Sec. 93.63 Operating Authorizations for Scheduled Arrivals and
Departures.
(a) During the hours of 6:30 a.m. through 9:59 p.m., Monday through
Friday, and 12 p.m. through 9:59 p.m. on Sunday, no person may operate
an aircraft other than a helicopter, as a Scheduled Operation to or
from LaGuardia unless he or she has received an Operating Authorization
for that operation.
(b) Seventy-five (75) Operating Authorizations are available per
hour at LaGuardia. The number of Operating Authorizations may not
exceed 19 in any 15-minute period; 38 in any 30-minute period; and 75
in any 60-minute period. The number of arrival and departure Operating
Authorizations in any period may be adjusted by the FAA if necessary
based on the actual or potential delays created by such number or other
considerations relating to congestion, airfield capacity and the air
traffic control system.
Sec. 93.64 Initial Allocation and Reallocation of Operating
Authorizations.
(a) Except as provided for under paragraphs (b) and (c) of this
section, any Carrier allocated operating rights under 14 CFR part 93,
subpart K, and 49 U.S.C. 41716 during the week of October 1-6, 2006, as
evidenced by the FAA's records, will be assigned corresponding
Operating Authorizations, by hour, effective January 1, 2007. The FAA
will assign Operating Authorizations in 15-minute periods consistent
with the limits under Sec. 93.63(b) of this section. If necessary, the
FAA may utilize administrative measures such as voluntary measures or a
lottery to re-time the grandfathered Operating Authorizations within
the same hour to meet the 15-minute and 30-minute limits under Sec.
93.63(b) of this section. The FAA Vice President, System Operations
Services, is the final decision-maker for determinations under this
section.
(b) If a carrier was allocated operating rights under 14 CFR part
93, subpart K, and 49 U.S.C. 41716 during the week of October 1-6,
2006, but the operating rights were held by another carrier, then the
corresponding Operating Authorizations will be assigned to the carrier
that held the operating rights for that period, as evidenced by the
FAA's records.
(c) If a carrier was allocated operating rights under 14 CFR part
93 during the week of October 1-6, 2006, and those operating rights
were held by an entity other than a certificated carrier, then
corresponding Operating Authorizations will be assigned to the
operating carrier, as evidenced by the FAA's records.
(d) Any Operating Authorizations that are returned to the FAA or
withdrawn as a result of the Average Aircraft Size Target requirement
under Sec. 93.69 of this subpart or the minimum use requirement for
Operating Authorizations to or from Non-Hub and Small-Hub Airports
under Sec. 93.70 of this subpart will be reallocated by a Weighted
Lottery.
Sec. 93.65 Duration of Operating Authorizations.
(a) Operating Authorizations initially assigned to Carriers on
January 1, 2007, have a minimum term of three years unless withdrawn or
returned in accordance with this subpart.
(b) By January 1, 2007, the FAA will establish the expiration
schedule for all Operating Authorizations assigned to Carriers on
January 1, 2007. Ten percent of these Operating Authorizations will
expire annually beginning on December 31, 2009.
(c) Each expired Operating Authorization will be reallocated and
thereafter shall carry a 10-year operating term.
Sec. 93.66 Reversion and Withdrawal of Operating Authorizations.
(a) A Carrier's Operating Authorizations revert automatically to
the FAA 30 days after the Carrier has ceased all operations at
LaGuardia for any reasons other than a strike.
(b) The FAA may retime, withdraw or temporarily suspend Operating
Authorizations at any time to fulfill operational needs.
(1) Operating Authorizations will be withdrawn in accordance with
the priority list established under Sec. 93.74 of this subpart.
(2) Except as otherwise provided in paragraph (a) of this section,
the FAA will notify the affected Carrier before withdrawing or
temporarily suspending an Operating Authorization and specify the date
by which operations under the authorizations must cease. The FAA will
provide at least 45 days' notice unless otherwise required by
operational needs.
(3) Any Operating Authorization that is temporarily withdrawn under
this paragraph will be reassigned, if at all, only to the Carrier from
which it was withdrawn, provided that the Carrier continues to conduct
Scheduled Operations at LaGuardia.
(c) The FAA shall not withdraw or temporarily suspend any Operating
Authorizations under paragraph (b) of this section from any Carrier if
the result would reduce the Carrier's total number of Operating
Authorizations below ten per day.
Sec. 93.67 Sale and Lease of Operating Authorizations.
(a) Carriers may buy, sell or lease Operating Authorizations in
accordance with this section.
[[Page 51379]]
(b) Only monetary consideration may be provided in any transaction
conducted under this section.
(c) A Carrier must provide notice to the FAA to sell or lease an
Operating Authorization. Such notice must contain: the Operating
Authorization number and time, effective dates and, if appropriate, the
duration of the lease and the minimum size aircraft that must be used
for the operation. The Carrier also may provide the FAA with a minimum
bid price.
(d) The FAA will post a notice of the sale or lease of the
Operating Authorization and relevant details on the FAA Web site at
http://www.faa.gov. An opening date, closing date and time by which
bids must be received will be provided. Information identifying the
seller or lessor of the Operating Authorization will not be released
until after the transfer of the Operating Authorization.
(e) The FAA must receive all bids electronically, via the FAA Web
site, by the closing date and time. Eligibility requires a bidding
Carrier to participate on the first day of the bidding process. Late
bids will not be considered. All bids will be held confidential, with
each bidder certifying to the FAA that its bid has not been disclosed
to any person.
(f) The FAA will forward the highest bid to the seller or lessor
without any information about the identity of the bidder. The seller or
lessor has three business days to accept or reject the bid.
(g) Upon acceptance, the FAA will notify the buyer/lessee.
(h) Written evidence of each Carrier's consent to the transfer must
be provided to the FAA, and each Carrier must certify that only
monetary consideration will be exchanged.
(i) The Operating Authorization may not be used until the
conditions of paragraph (h) of this section have been met, and the FAA
provides notice of its approval of the transfer.
(j) A Carrier may transfer an Operating Authorization to another
Carrier that conducts operations at LaGuardia solely under the
transferring Carrier's marketing control, including the entire
inventory of the flight. Each party to such transfer must provide
written evidence of its consent to the transfer. The FAA Vice
President, System Operations Services, is the final decision maker for
any determinations under this subsection. The recipient Carrier of the
transfer may not use the Operating Authorization until the FAA has
provided written confirmation.
Sec. 93.68 One-for-One Trades of Operating Authorizations.
(a) A Carrier may trade an Operating Authorization with another
Carrier on a one-for-one basis.
(b) Written evidence of each Carrier's consent to the transfer must
be provided to the FAA.
(c) The recipient of the transfer may not use the Operating
Authorization until written confirmation has been received from the
FAA.
(d) Carriers participating in a one-for-one transfer must certify
to the FAA that no consideration or promise of consideration was
provided by either party to the trade.
Sec. 93.69 Average Aircraft Size Target.
(a) On an annual basis, beginning in 2008, each Carrier's Average
Aircraft Size must meet or exceed the Average Aircraft Size Target
established by the FAA for LaGuardia. The FAA will publish the target
in the Federal Register at least 90 days before the beginning of the
calendar year.
(b) Baseline Operations and Small Community Operating
Authorizations are excluded from the Carrier's Average Aircraft Size
calculation.
(c) Beginning January 1, 2009, if a Carrier's Average Aircraft Size
does not meet the Average Aircraft Size Target over the preceding year,
the FAA will withdraw Operating Authorization(s) from the Carrier until
the target is met.
(1) The FAA will withdraw the Operating Authorization(s) that used
the aircraft with the smallest seating capacity.
(2) Unless there is an operational need identified by the FAA, the
Carrier may designate which Operating Authorization is withdrawn.
(d) Paragraph (a) of this section does not apply to Operating
Authorizations that are not used by a Carrier because of a strike.
(e) The FAA may waive the requirements of paragraph (a) of this
section in the event of a highly unusual and unpredictable condition
that is beyond the control of the Carrier and that persists for a
period of 5 consecutive days or more. Examples of conditions which
could justify a waiver under this paragraph are weather conditions that
result in the restricted operation of an airport for an extended period
of time or the grounding of any aircraft type.
(f) Paragraph (a) of this section does not apply to Operating
Authorizations that are held by a Carrier on Thanksgiving Day, the
Friday following Thanksgiving Day, and the period from December 24
through the first Sunday in January.
(g) Paragraph (a) of this section does not apply to the first 90-
day period after assignment of Operating Authorizations obtained in a
Weighted Lottery or through a sale.
Sec. 93.70 Minimum Usage Requirements for Small Community and
Baseline Operating Authorizations.
(a) Any Small Community or Baseline Operating Authorization that is
not used at least 80 percent of the time over a consecutive two-month
period will be withdrawn by the FAA.
(b) Paragraph (a) of this section does not apply to the first 90-
day period after assignment of Operating Authorizations obtained in a
Weighted Lottery or through a sale.
(c) Paragraph (a) of this section does not apply to Operating
Authorizations that are not used by a Carrier because of a strike.
(d) The FAA may waive the requirements of paragraph (a) of this
section in the event of a highly unusual and unpredictable condition
that is beyond the control of the Carrier and that persists for a
period of 5 consecutive days or more. Examples of conditions which
could justify a waiver under this paragraph are weather conditions that
result in the restricted operation of an airport for an extended period
of time or the grounding of any aircraft type.
(e) The FAA will treat as used any Operating Authorization held by
a Carrier on Thanksgiving Day, the Friday following Thanksgiving Day,
and the period from December 24 through the first Sunday in January.
Sec. 93.71 Unscheduled Operations.
(a) During the hours of 6:30 a.m. through 9:59 p.m., Monday through
Friday, and 12 p.m. through 9:59 p.m. on Sunday, no person may operate
an aircraft other than a helicopter to or from LaGuardia unless he or
she has received, for that Unscheduled Operation, a Reservation that is
assigned by the Airport Reservation Office (ARO). Additional
information on procedures for obtaining a Reservation will be available
on the Internet at http://www.fly.faa.gov/ecvrs.
(b) Six (6) Reservations are available per hour. The ARO will
assign Reservations on a 15-minute basis.
(c) The ARO will receive and process all Reservation requests for
unscheduled arrivals and departures at LaGuardia. Reservations are
assigned on a ``first-come, first-served'' basis determined by the time
the request is received at the ARO. Reservations must be cancelled if
they will not be used as assigned.
(d) The filing of a request for a Reservation does not constitute
the
[[Page 51380]]
filing of an IFR flight plan as required by regulation. The IFR flight
plan must be filed only after the Reservation is obtained, include the
Reservation number in the ``Remarks'' section, and be filed in
accordance with FAA regulations and procedures.
(e) Air Traffic Control will accommodate declared emergencies
without regard to Reservations. Non-emergency flights in direct support
of national security, law enforcement, military aircraft operations, or
public-use aircraft operations may be accommodated above the
Reservation limits with the prior approval of the Vice President,
System Operations Services, Air Traffic Organization. Procedures for
obtaining the appropriate waiver will be available on the Internet at
http://www.fly.faa.gov/ecvrs.
(f) Notwithstanding the limits in paragraph (b) of this section, if
the Air Traffic Organization determines that air traffic control,
weather and capacity conditions are favorable and significant delay is
not likely, the FAA may determine that additional Reservations may be
accommodated for a specific time period. Unused Operating Authorities
may also be temporarily made available for Unscheduled Operations.
Reservations for additional operations must be obtained through the
ARO.
(g) Reservations may not be bought, sold, or leased.
Sec. 93.72 Reporting Requirements.
(a) Carrier's Aircraft Size Target. (1) Annually, beginning March
1, 2008, each Carrier holding an Operating Authorization must report,
in a format specified to the FAA, the following information for each
Operating Authorization held during the previous calendar year:
(i) The Operating Authorization number, time, and arrival or
departure designation;
(ii) The operating Carrier;
(iii) The aircraft-type;
(iv) The number of passenger seats offered on the aircraft for each
operation; and
(v) The date and time of each of its operations using an Operating
Authorization, including flight number, and origin/destination.
(2) Annually, beginning March 1, 2008, each Carrier holding an
Operating Authorization must report, in a format specified by the FAA,
the average number of seats flown over all Operating Authorizations
that are subject to the Average Aircraft Size Target.
(b) Minimum Usage Requirements for Small Community and Baseline
Operating Authorizations. Each Carrier holding a Small Community or
Baseline Operating Authorization must, within 14 days after the last
day of the 2-month period beginning January 1, 2007, and every 2 months
thereafter report, in a format acceptable to the FAA, the following for
each Operating Authorization held:
(1) The Operating Authorization number, time, and arrival or
departure designation;
(2) The operating Carrier;
(3) The aircraft-type;
(4) The number of passenger seats offered on the aircraft for each
operation; and
(5) The date and time of each of its operations using an Operating
Authorization, including flight number, and origin/destination.
(c) Annually, by March 1, 2008, each Carrier must designate ten
Operating Authorizations as its Baseline Operations and report to the
FAA the Operating Authorization number, time, and arrival or departure.
(d) The FAA may withdraw the Operating Authorizations of any
Carrier that does not report its utilization of Operating
Authorizations in accordance with this section.
Sec. 93.73 Weighted Lottery.
(a) The FAA will reassign by Weighted Lottery Operating
Authorizations not assigned by the FAA as part of the initial
allocation and those returned to the FAA or withdrawn, as described
under Sec. 93.66 of this subpart or withdrawn under Sec. 93.69 and
Sec. 93.70 of this subpart.
(b) Each Carrier's weight in the lottery is inversely proportional
to its share of total Operating Authorizations at LaGuardia. Any
Carrier that does not hold or operate Operating Authorizations under
its own name as of the announced date of a Weighted Lottery, and has
not held or operated Operating Authorizations at LaGuardia since
[EFFECTIVE DATE OF FINAL RULE], its weight is equal to that of a
Carrier with two Operating Authorizations (a single roundtrip flight).
(c) The FAA will publish a notice in the Federal Register
announcing the lottery dates and any special procedures for the
lotteries.
(d) Any Carrier seeking to participate in a lottery must notify the
FAA in writing, and such notification must be received by the FAA 15
days prior to the lottery date. The Carrier must report--
(1) If it currently operates scheduled service at LaGuardia or has
operated scheduled service at LaGuardia since [EFFECTIVE DATE OF FINAL
RULE];
(2) The number of Operating Authorizations it holds (if any); and
(3) If there is common ownership with any other Carrier, and if so,
the identify of such Carrier.
(e) Operating Authorizations obtained under this section may not be
bought, sold, leased, or otherwise transferred until one year has
elapsed from their assignment.
Sec. 93.74 Administrative Provisions.
(a) The FAA will assign priority numbers by random lottery for
Operating Authorizations at LaGuardia. Each Operating Authorization
will be assigned a withdrawal priority number, and the 15-minute time
period for the Operating Authorization, frequency, and the arrival or
departure designation.
(b) If FAA determines that operations need to be reduced for
operational reasons, the lowest assigned priority number Operating
Authorization will be the last withdrawn.
(c) Any Operating Authorizations available on a temporary basis may
be assigned by the FAA to a Carrier on a non-permanent, first-come,
first-served basis subject to permanent assignment under this subpart.
Any remaining Operating Authorizations may be made available for
Unscheduled Operations on a non-permanent basis and will be assigned
under the same procedures applicable to other Operating Reservations.
(d) All transactions under this subpart must be in a written or
electronic format approved by the FAA.
Issued in Washington, DC on August 23, 2006.
Nan Shellabarger,
Director of Aviation Policy and Plans.
[FR Doc. 06-7207 Filed 8-25-06; 9:00 am]
BILLING CODE 4910-13-P