Congestion Management Rule for John F. Kennedy International Airport and Newark Liberty International Airport, 29626-29651 [08-1271]
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Federal Register / Vol. 73, No. 99 / Wednesday, May 21, 2008 / Proposed Rules
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 93
[Docket No. FAA–2008–0517; Notice No. 08–
05]
RIN 2120–AJ28
Congestion Management Rule for John
F. Kennedy International Airport and
Newark Liberty International Airport
Federal Aviation
Administration (FAA).
ACTION: Notice of proposed rulemaking
(NPRM).
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AGENCY:
SUMMARY: The FAA proposes to
establish procedures to address
congestion in the New York City area by
assigning slots at John F. Kennedy (JFK)
and Newark Liberty (Newark)
International Airports in a way that
allows carriers to respond to market
forces to drive efficient airline behavior.
This proposal is a companion to a
separate rulemaking initiative
addressing congestion mitigation at New
York’s LaGuardia airport. Today’s
proposal is similar to what we have
proposed for LaGuardia airport, but it
takes into consideration the
characteristics of both JFK and Newark,
including the large number of
international flights at these airports
and our international obligations. The
FAA proposes to extend the caps on the
operations at the two airports, assign to
existing operators the majority of slots at
the airports, and create a market by
annually auctioning off a limited
number of slots in each of the first five
years of this rule. The FAA is proposing
two alternatives.
Under the first alternative, the
assignment of slots at JFK and Newark
would be conducted through a uniform
mechanism. The FAA would auction off
a portion of the slots and would use the
proceeds to mitigate congestion and
delay in the New York City area. Under
the second alternative, the same auction
procedure would apply at Newark as
under the first alternative but at JFK the
auction proceeds would go to the carrier
holding the slot rather than to the FAA.
For both alternatives, this proposal also
contains provisions for minimum usage,
capping unscheduled operations, and
withdrawal for operational need. The
FAA proposes to sunset the rule in ten
years.
DATES: Send your comments on or
before July 21, 2008.
ADDRESSES: You may send comments
identified by Docket Number FAA–
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2008–0517 using any of the following
methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov and follow
the online instructions for sending your
comments electronically.
• Mail: Send comments to Docket
Operations, M–30; U.S. Department of
Transportation, 1200 New Jersey
Avenue, SE., Room W12–140, West
Building Ground Floor, Washington, DC
20590–0001.
• Hand Delivery or Courier: Bring
comments to Docket Operations in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue, SE., Washington, DC, between
9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
• Fax: Fax comments to Docket
Operations at 202–493–2251.
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 https://
www.regulations.gov, including any
personal information you provide.
Using the search function of our docket
Web site, anyone can find and read the
electronic form of all comments
received into any of our dockets,
including the name of the individual
sending the comment (or signing the
comment for an association, business,
labor union, etc.). You may review the
Department of Transportation’s
complete Privacy Act Statement in the
Federal Register published on April 11,
2000 (65 FR 19477–78) or you may visit
https://DocketsInfo.dot.gov.
Docket: To read background
documents or comments received, go to
https://www.regulations.gov at any time
and follow the online instructions for
accessing the docket. Or, go to Docket
Operations in Room W12–140 of the
West Building Ground Floor at 1200
New Jersey Avenue, SE., Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: For
technical questions regarding this
rulemaking, contact: Molly W. Smith,
Federal Aviation Administration, 800
Independence Avenue, SW.,
Washington, DC 20591; telephone (202)
267–3275; e-mail
molly.w.smith@faa.gov. For legal
questions concerning this rulemaking,
contact: Rebecca MacPherson, FAA
Office of the Chief Counsel, 800
Independence Ave., SW., Washington,
DC 20591; telephone (202) 267–3073;
e-mail rebecca.macpherson@faa.gov.
SUPPLEMENTARY INFORMATION: Later in
this preamble, under the Additional
Information section, we discuss how
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you can comment on this proposal and
how we will handle your comments.
Included in this discussion is related
information about the docket and the
handling of proprietary or confidential
business information. We also discuss
how you can get a copy of this proposal
and related rulemaking documents.
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.
I. Background
A. History of Congestion Management
Initiatives at JFK
JFK has historically been a
constrained airport. From 1969 through
2006, the FAA managed congestion
there during the five hours of peak
transatlantic demand—3 p.m. through
7:59 p.m., Eastern Time under the High
Density Rule (HDR). 14 CFR part 93
subparts K and S.
In 1994, Congress began to relax the
HDR by authorizing the Secretary of
Transportation, upon making a public
interest finding, to grant exemptions
from the HDR to enable new entrant
carriers 1 to provide air transportation at
certain slot-controlled airports,
including JFK. 49 U.S.C. 41714. In 1999,
pursuant to this authority, the
Department issued an order that
authorized new flight operations at JFK
by granting 75 slot exemptions to
JetBlue Airways (JetBlue), a new entrant
carrier, to be phased in over a five-year
period.2 The order stated that JetBlue
would operate the majority of its flights
outside the five HDR slot-controlled
hours.
In 2000, the Wendell H. Ford Aviation
Investment and Reform Act for the 21st
Century (AIR–21), Public Law No. 106–
181, ended the application of the HDR
at JFK, effective January 1, 2007. 49
U.S.C. 41715(a)(2).3 AIR–21 also
1 The term ‘‘new entrant carrier’’ was defined as
‘‘an air carrier that does not hold a slot at the airport
concerned and has never sold or given up a slot at
that airport after December 16, 1985, and a limited
incumbent carrier.’’ 49 U.S.C. 41714(h)(3).
2 Application of New Air Corporation for
Exemption from 14 CFR part 93, Subparts K and S
of 49 U.S.C. 41714(c), Order 99–9–11 (September
16, 1999).
3 The phase-out also included LaGuardia, as of
January 1, 2007. 49 U.S.C. 41715(a)(2). The HDR at
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directed the Secretary to grant
exemptions from the HDR’s flight
restrictions for operations by new
entrant carriers or for flights serving
Small-Hub and Non-Hub airports as
long as the aircraft used had less than
71 seats. Additionally, it preserved the
FAA’s authority to impose flight
restrictions by stating 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).
Until recently, most operations at JFK
took place during relatively pronounced
arrival and departure banks
corresponding to the operating windows
of transatlantic flights. Maximum
efficiency at JFK has been achieved with
the use of either two arrival runways
and one departure runway, or two
departure runways and one arrival
runway. Air traffic controllers have
employed that configuration to facilitate
the historic transatlantic traffic flows.
Since the spring of 2006, U.S. air
carriers serving JFK have significantly
increased their domestic scheduled
operations throughout the day. Most of
the increase has come from the two
largest operators at the airport, Delta
Airlines (Delta) and JetBlue. The new
traffic patterns affect the efficient use of
JFK’s four runways, impeding the use of
the three-runway configurations (two
arrival/one departure, or one arrival/two
departure) for maximum utility of active
runways.
As a result of the increase in
scheduled operations at JFK, the
summer 2007 demand exceeded the
airport’s capacity during many periods
of the day. During morning hours,
volume-related delays were routine
from 7 a.m. through 9 a.m. The
afternoon and evening demand
exceeded the airport’s optimal capacity
until about 10 p.m. This prevented the
airport from having an evening period to
recover from congestion-induced delays.
During fiscal year 2007, the average
daily operations at JFK increased 21
percent over fiscal year 2006.
Corresponding to the increased
operations, on-time performance and
other delay metrics have declined year
over year. The on-time performance at
JFK, which is defined as the arrival at
the gate within 15 minutes of the
scheduled time, declined from 68.5
percent in fiscal year 2006 to 62.19
percent in fiscal year 2007. On-time
arrivals during the peak travel months
of June, July and August declined from
Chicago O’Hare International Airport was directed
to be phased out by July 1, 2002. 49 U.S.C.
41715(a)(1).
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63.37 percent in 2006 to 58.89 percent
in 2007, while on-time departures
declined from 67.49 percent to 59.89
percent. For the entire fiscal year, the
average daily arrival delays exceeding
one hour increased by 87 percent over
fiscal year 2006 levels. Taxi out delays,
which measure the time that aircraft
wait prior to departing the runway,
increased by 15 percent. Taxi out delays
in the evening departure periods
frequently exceeded an hour in
duration.
The increased congestion and
associated delays at JFK impact other
airports in the region and the National
Airspace System (NAS). The airspace
redesign for the New York/New Jersey/
Philadelphia metropolitan area,
approved in 2007, documents the costs
and far-reaching impacts of delays that
originate from this area. The delays that
cascade from this area throughout the
NAS are costly and far-reaching, as
detailed in the recently approved
airspace redesign plan for the New
York/New Jersey/Philadelphia
metropolitan area.4 The FAA has taken
steps to implement airspace redesign,
which will provide efficiency and
congestion relief by, among other things,
opening additional arrival and
departure routes in the New York area.
Further, the FAA, working with
stakeholders, is implementing shortterm initiatives to improve the
efficiency of airport operations and air
traffic control, particularly during
severe weather. Additionally, the FAA
has increased the use of a second
departure runway at JFK when
conditions permit. However, none of
these initiatives will offer an immediate
or complete solution.
On September 24, 2007, the FAA redesignated JFK as a Level 2 Schedules
Facilitated Airport 5 for the summer
2008 scheduling season in accordance
with the International Air Transport
Association Worldwide Scheduling
Guidelines (IATA WSG). 72 FR 54317.
Under the WSG, carriers must inform
the coordinator of projected operations
at a Level 2 airport for the next
scheduling season. When submitting the
required information, the airlines
expressed their intent to add new flights
4 See: https://www.faa.gov/airports_airtraffic/
air_traffic/nas_redesign/regional_guidance/
eastern_reg/nynjphl_redesign/.
5 An airport, where demand is approaching
capacity and a more formal level of cooperation is
required to avoid the circumstances of overcapacity, is designated an IATA Level 2 Schedules
Facilitated Airport. At a Level 2-designated airport,
a schedules facilitator seeks the cooperation and
voluntary agreement of airlines serving the airport
to avoid congestion.
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at JFK during peak and off-peak hours
for summer 2008.
Also in September 2007, the
Administrator determined that JFK was
a severely congested airport and that a
scheduling reduction meeting, under 49
U.S.C. 41722, was necessary to discuss
flight reductions with U.S. air carriers to
reduce over-scheduling and flight
delays at JFK during peak operating
hours. On October 12, 2007, the
Secretary of Transportation determined
that a scheduling reduction meeting was
necessary to meet a serious
transportation need or to achieve an
important public benefit. On October
22, the FAA opened a docket for
information on the establishment of
flight reduction targets at JFK during
peak hours. 72 FR 59579. In order to
address increases in demand by foreign
air carriers, the FAA determined that a
Level 3 Coordinated Airport declaration
was warranted on October 25, 2007.6 72
FR 60710.
In order to address increases in
demand by domestic carriers, the FAA
convened the scheduling reduction
meeting with U.S. carrier participants
on October 23–24, 2007. Subsequent inperson and telephonic meetings took
place as well. At the sessions, American
Airlines, Delta and JetBlue, which
together account for three-quarters of
the total operations at JFK, withdrew the
schedule increases each had proposed
for summer 2008 during the airport’s 3
p.m. to 7:59 p.m. peak hours. They also
adjusted the timing of operations during
those hours and others to smooth out
peaks. Other airlines also agreed to
retime peak operations. The FAA
offered capacity during other hours to
carriers who re-timed operations or
added additional flights.
As a result of the agreements reached
at that meeting and other discussions
held with carriers regarding their
projected summer 2008 schedules, the
FAA issued a temporary Order limiting
scheduled operations at JFK, effective 6
a.m., Eastern Time, March 30, 2008,
through 11:59 p.m., Eastern Time,
October 24, 2009, to U.S. and foreign air
carriers serving the airport and generally
capping scheduled operations at 81 per
hour. 73 FR 3519 (Jan. 18, 2008), as
amended 73 FR 8737 (Feb. 14, 2008).
This Order temporarily responds to the
carriers’ desire to regularly schedule
flights above the airport’s capacity
during peak operating hours, relieves
the substantial inconvenience to the
traveling public caused by excessive
6 Where demand for an airport exceeds capacity,
voluntary cooperation is unlikely to resolve the
problem, and short term capacity enhancements are
not available, the airport is designated an IATA
Level 3 Coordinated Airport.
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congestion-related flight delays at the
airport (which rippled through the
NAS), reduces the average length of
delays, and provides for a more efficient
use of airspace.
B. History of Congestion Management at
Newark
Newark was once subject to the HDR
although the FAA suspended the
application of the rule at Newark due to
sufficient airport capacity to meet
demand. 35 FR 16591 (Oct. 24, 1970).
Over the past several years, however,
Newark has grown to be one of the most
delay-prone airports in the country.
Current and anticipated demand during
peak hours approaches or exceeds the
average runway capacity, resulting in
volume-related delays. These delays are
aggravated by weather or other adverse
operating conditions.
Comparing FY 2007 to FY 2000,
average daily operations at the airport
decreased about 3 percent (from 1,253 to
1,219) but performance nevertheless
suffered. The percent of on-time gate
arrivals decreased from 70.66 percent to
61.71 percent; arrival delays greater
than one hour increased from 54 to 93
per day on average.
In 2007, for example, Newark’s ontime arrival performance was 61.8
percent, the second worst among the top
35 airports. Based on ‘‘the airport’s
performance metrics and imbalance
between air traffic control (ATC)
capacity and demand that is expected to
continue in the near term,’’ the FAA
designated Newark a Level 2 IATA
Schedules Facilitated Airport for the
summer 2008 scheduling season.7 The
FAA explained that ‘‘increased levels of
air traffic operations, congestion and
delay at [both JFK and Newark] airports
and a tangible decrease in operational
performance’’ warranted this
designation.8 The FAA found the
morning hours of 7 a.m. to 10 a.m. and
the afternoon and evening hours of 2
p.m. to 10 p.m. were particularly
constrained, but that capacity otherwise
was available for retiming of flights or
new operations.
The FAA modeled the proposed
summer 2008 schedule requests against
Newark’s average runway capacity, and
delay projections for the summer of
2008 indicated a potential increase of
almost 50 percent. The FAA also
discussed carriers’ future schedule
plans at Newark and asked carriers to
consider scheduling flights at times
where there was available capacity. It
was clear that some carriers intended to
proceed with their plans to begin
7 72
FR 54317 (Sept. 24, 2007).
8 Id.
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operations according to their proposed
schedules during the busiest hours,
regardless of the potential impact on
delay. Based on the requested schedules
for Newark and anticipated additional
demand for Newark due to the operating
limits underway at JFK, the FAA
determined that the anticipated summer
2008 demand would overtax Newark’s
capacity, warranting a Level 3
Coordinated Airport designation. 72 FR
73418 (Dec. 27, 2007). After the
designation, a series of discussions with
the FAA led some carriers, including
the hub carrier, Continental, to move
some of their historic flights from the
most oversubscribed hours. The
movement of these flights tended to
smooth the scheduling peaks and
valleys at Newark.
The information provided by the
carrier for the summer 2008 scheduling
season reflected a projected increase in
flight schedules during the summer of
2008, especially during the peak hours.
U.S. and foreign carriers had planned
about 100 new operations per day at
Newark, many during the afternoon and
early evening hours for the summer of
2008.9 That number of new flights,
along with proposed retiming of historic
flights into busier time periods, would
have caused massive delays, because
they would have exceeded the airport’s
optimal rate of handling flights over
multiple, consecutive hours. For several
consecutive hours, the number of hourly
arrivals and departures would have
reached the upper 80s to the mid-90s.
These operations would have
significantly exceeded the airport’s
average capacity of 83 total operations
over the 12-month period ending
August 2007. These additional flights
would have caused a spike in
congestion and delays at Newark and
would also have had an adverse effect
on other airports in the New York region
and on the NAS.
Consequently, on March 18, 2008, the
FAA proposed to place temporary caps
on peak hour operations at Newark to
mitigate persistent congestion and
delays at the airport.10 73 FR 14552. The
cap would limit scheduled operations
during constrained hours to an average
of 81 per hour.11 The FAA stated that
it identified Newark’s average capacity
by considering the airport’s capacity to
9 Requests for additional flights or retiming of
flights into peak periods were received after the
FAA’s announced schedule submission deadline of
October 11, 2007. These requests were
accommodated only if there was available capacity
remaining after consideration of historic operations
and on-time requests.
10 73 FR 14552 (March 18, 2008).
11 The appendix to the order included a few
operations for summer 2008 above the 81 per hour
limit.
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be ‘‘the higher value of either the
aircraft throughput at the airport in a
given hour or the number of arrivals and
departures that ATC personnel
identified as achievable in that hour.’’
73 FR 14552, 14554. The measurement
reflected ‘‘the airport’s demonstrated
and potential performance over time
under actual meteorological and
operational conditions.’’ Id. The FAA
committed to closely monitoring the
gains in efficiency and delay reductions
from implementing the airspace
redesign and other air traffic control or
airport operational changes to ensure
that the scheduling limits reflect the
available capacity.
The FAA has adopted its March 18,
2008, proposal to impose a temporary
cap on scheduled operations at Newark.
The cap takes effect 30 days after
publication and expires 11:59 p.m.
Eastern Time, October 24, 2009. The cap
limits peak hour scheduled operations
to an average of 81 per hour, except as
provided in the appendix to the Order,
and total scheduled and unscheduled
operations to an average of 83. As
indicated in the proposed order, the
FAA intends to use the hours with
scheduled operations below the limit of
81 for delay mitigation and would lease
new capacity over 81 pursuant to an
auction.
C. New York Aviation Rulemaking
Committee
In addition to the regulatory
initiatives discussed above, on
September 25, 2007, the Acting FAA
Administrator established an Aviation
Rulemaking Committee (ARC) to
explore various options, including
market-based mechanisms, for
addressing airspace congestion in the
New York area. The ARC was comprised
of officials from the FAA and the Office
of the Secretary of Transportation
(OST), the Port Authority of New York
and New Jersey (Port Authority),
representatives of carriers and operators
serving JFK, Newark, LaGuardia, and
Teterboro airports, airport and aviation
industry trade associations, and
consumer groups.
By design, the ARC provided
opportunity for extensive input by all
stakeholders, having members from
major air carriers in the United States
and their trade organizations (the Air
Transport Association, the Regional
Airline Association, the Air Carrier
Association of America, the National
Air Carrier Association), foreign carriers
and their worldwide trade organization
(IATA), the Port Authority, and the
Airports Council International-North
America. Through the ARC process,
these stakeholders played a key role in
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exploring ideas to address congestion
and ensuring that any actions
contemplated by the Department and
the FAA would be fully informed. The
ARC worked throughout the fall and
submitted a report to the Secretary,
dated December 13, 2007, discussing its
findings. A copy of the ARC Report may
be found at: https://www.dot.gov/affairs/
FinalARCReport.pdf.
II. Discussion of Proposed Rule
Today’s proposal would replace the
Orders imposing operating limitations at
JFK and Newark and establish a rule
limiting unscheduled operations at
those airports. The Orders are scheduled
to expire on October 24, 2009. If
adopted, the proposed rule would apply
to all operations at JFK and Newark
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between the hours of 6 a.m. and 10:59
p.m., every day. For reasons set out in
the Newark and JFK Orders, discussed
above, the FAA has determined that
capacity is constrained at these airports
for this entire period.
The following table briefly
summarizes today’s proposal and
identifies differences between the two
options.
PROPOSED REGULATION FOR JFK AND NEWARK
JFK
Feature
Newark
Option 1
Base Schedule ...............................
Slot .................................................
Number of Slots .............................
Slots definition ...............................
Slot Time of Day ............................
Mechanics ......................................
Auction ...........................................
Auction Proceeds ...........................
Use/Lose ........................................
Term ...............................................
Bidders ...........................................
Holders ...........................................
New or returned capacity ...............
Secondary market ..........................
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Logistical swaps of slots ................
Seasonal schedule, as approved
by the FAA, for summer 2008
and winter 2008/2009.
Defined as right to land or depart
(not both) in a 30-minute time
window.
81/hour + 1 to 2 unscheduled ......
Common Slots: The Baseline (up
to 20 slots per carrier) plus 90%
of slots above 20 have 10 year
leases; Limited Slots: 10%
would have shorter leases and
be auctioned over five years
(2% each) (after which they
convert to Unrestricted Slots).
6:00 a.m. through 10:59 p.m., everyday; no more than 81 in any
one hour or 44 in any half-hour.
‘‘Fair’’ initial distribution with half
of slots with less than 10 years
life selected by carriers; the
other half selected by FAA according to specified rules.
Limited Slots would be auctioned
among carriers.
Auction funds to FAA to defray
costs of auction, then to NY capacity/projects.
Seasonal schedule, as approved
by the FAA, for summer 2008
and winter 2008/2009.
Defined as right to land or depart
(not both) in a 30-minute time
window.
81/hour + 1 to 2 ............................
Common Slots: the Baseline (up
to 20 slots per carrier) plus 90%
of slots above 20 have 10 year
leases; Limited Slots: 10%
would have shorter leases and
be auctioned over five years
(2% each) (after which they
convert to Unrestricted Slots).
6:00 a.m. through 11:59 p.m., everyday; no more than 81 in any
one hour or 44 in ay half-hour.
‘‘Fair’’ initial distribution with half
of slots with less than 10 years
life selected by carriers; the
other half selected by FAA according to specified rules.
Limited Slots would be auctioned
among carriers.
Auction funds to FAA to defray
costs of auction, then to NY capacity/projects.
Only on grandfathered slots as
consideration for slots.
Program is through March 2019;
slot lives are whatever proportion of 10 years remain upon
reallocation.
Airlines ..........................................
Holders of record (not marketing
carrier).
IATA WSG ....................................
Transparent not blind: carrier notifies FAA of intent to sublease;
FAA makes slot availability
known; bilateral negotiations;
final terms disclosed to OST for
monitoring.
Permitted ......................................
Only on grandfathered slots as
consideration for slots.
Program is through March 2019;
slot lives are whatever proportion of 10 years remain upon
reallocation.
Airlines ..........................................
Holders of record (not marketing
carrier).
IATA WSG ....................................
Transparent not blind: carrier notifies FAA of intent to sublease;
FAA makes slot availability
known; bilateral negotiations;
final terms disclosed to OST for
monitoring.
Permitted ......................................
The rule would apply to carriers at
JFK and Newark. A U.S. air carrier
conducting operations solely under
another carrier’s market control with
unified inventory control would not be
considered a separate carrier, an
approach that is consistent with how
carriers have been treated historically
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under the various slot regimes. The
same would not be true for foreign air
carriers. This difference in treatment
reflects the commercial realities of JFK
and Newark where there are foreign air
carriers that share a common owner but
hold out service to the public as
separate commercial entities. Treating
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Same as Option 1.
Same as Option 1.
Same as Option 1
Common Slots: The Baseline (up
to 20 slots per carrier) plus 80%
of slots above 20 would have
10 year leases; Limited Slots
20% would have shorter leases
and then be reallocated via
auction over five years (4%/yr).
Same as Option 1.
Same as Option 1.
Same as Option 1.
Auction funds (net of auction
costs) to incumbent holder; incumbent cannot bid on own
slots.
As as Option 1.
As as Option 1.
As as Option 1.
As as Option 1.
As as Option 1.
Same.
Same.
foreign air carriers with common
ownership as separate carriers for
purposes of slot allocation is an
accepted practice in the international
arena. The recent SNPRM on LaGuardia
airport, as well as the LaGuardia Order,
treats carriers with common ownership
as a single carrier.
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As we have explained, we do not
anticipate that airport and airspace
system improvements scheduled to
come on line during the next year and
a half will be sufficient to meet the
demand for flights at either JFK or
Newark for the foreseeable future.
Therefore, if we let the Orders expire
according to their terms, we believe
carriers will once again schedule flights
well in excess of the respective
capacities of both JFK and Newark and
unscheduled operations would grow
during peak hours. Historic experience
strongly suggests that congestion and
delays during peak operating hours
would result, requiring the FAA to step
in and address unacceptable operational
performance yet again.
Rather than taking repeated,
piecemeal approaches to limit and
manage operations at JFK and Newark
on a short-term basis, we believe it is
prudent to adopt a longer-term rule
dealing with the congestion and delays
we expect to persist at those airports.
The FAA’s preference in addressing
congestion resulting from capacity
shortfalls is to expand the airport and
airway system capacity and to increase
the efficient use of existing resources.
This is by far the most effective way to
serve the traveling public and to
promote a strong airport and airway
system. Although both the FAA and the
Port Authority are working to
implement these capacity
improvements, this rule would
complement those efforts and mitigate
projected airport congestion.
We propose to treat the three major
New York City-area airports similarly by
capping operations and introducing
market mechanisms to allocate some
slots. While we have provided two
different versions of the draft regulatory
text to present two alternatives for
market allocation, Newark would be
treated the same under both versions.
Accordingly, all discussion of
alternative 2 will be limited to JFK.
The FAA believes it is necessary to
address congestion and delays at
LaGuardia, JFK, and Newark in a
coordinated manner. Congestion and
delays at each of the three airports affect
the other two airports as well as the
NAS as a whole. The airports are all
located relatively close to each other
and consistently have been among the
nation’s most delay-prone airports.
Excluding any one of the three major
New York-area airports from the
imposition of caps would simply shift
the problem to the non-slot controlled
airport, as it would become very
attractive to carriers wanting to start or
add service in the New York market.
The likely result would be an
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overburdening of that airport and the
system. We propose to award capacity at
JFK and Newark through mechanisms
that rely, in part, on the market. These
mechanisms resemble those in the
proposal for LaGuardia Airport, but are
modified to reflect the respective
characteristics of JFK and Newark.
Today’s proposal will ensure that the
scarce airspace resources are used for
operations by the carriers valuing the
resources most highly. Additionally,
over the course of the ten-year life of the
proposed rule, we will monitor the need
to maintain the caps and may increase
the number of scheduled operations in
response to technological, operational,
or capacity plans or improvements or to
other factors that may warrant such
action.
We note that both JFK and Newark are
already capped under the respective
Orders at 81 scheduled operations per
hour (except as provided in the
Appendices to the Orders). Today’s
proposal, if adopted, will replace those
Orders. The FAA believes the summer
of 2007 served as a stark reminder that
the demand for access to New York City
is exceptional and cannot be managed
without these caps at an acceptable
level of delay.
The NPRM proposes to apply the
limits of the recent JFK and Newark
Orders, except where the Administrator
determines under § 93.163 of subpart N
and § 93.183 of subpart O that
additional slots can be accommodated.
In addition, there would be no more
than 44 slots in any 30-minute period at
JFK and Newark, or more than 81 in a
60-minute period. We have proposed to
specify the 30- and 60-minute
limitations in addition to the hourly
maximum to avoid excessive bunching
of slots, which can cause unnecessary
delays. Section 93.163(d) of subpart N
and § 93.183 of subpart O sets out the
authority of the Administrator to
increase the number of slots as airport
conditions warrant. No additional
rulemaking would be required for any
increase.
JFK and Newark have similar demand
profiles, with an early morning peak
that typically clears by mid-morning.
Demand approaches capacity in the
early afternoon and typically continues
until about 10 p.m. Scheduled requests
submitted by carriers to the FAA for
summer 2008 showed marked increases
throughout the day. Modeling and
experience demonstrate that delays
grow exponentially and have a
cascading effect on airport operations
and individual flights at the airport. As
part of the discussions with the carriers
regarding summer 2008 schedules,
carriers decided to schedule flights at
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off-peak hours since the FAA was
unwilling to authorize new peak hour
flights. Based on demand and the
modeling showing the potential for
increased delays, the FAA determined
that the appropriate hours to limit
flights would cover much of the
operating day.
The FAA proposes that the final rule,
if adopted, would terminate at 11 p.m.
on March 30, 2019. This approach will
allow for future determinations by the
FAA as to whether a cap is still needed
and, if so, whether changes are needed
to more efficiently manage the scarce
resource. At present it is impossible to
determine what changes in business
models may occur over the next ten
years. In addition, full implementation
of the New York/New Jersey/
Philadelphia Metropolitan Area
Airspace Redesign project and NextGen
technologies are expected to
successfully impact delays and air
traffic efficiency within the next ten
years, and we should not prejudge the
market response. The FAA plans to
evaluate the effects of the slot program
proposed today on the distribution of
slots and entry into JFK and Newark.
The agency intends to take this
experience into account in all
congestion management activities.
III. Proposal for Efficient Allocation of
Capacity at JFK and Newark
A. Need for More Efficient Allocation
Congress has directed the Department
to place ‘‘maximum reliance on
competitive market forces and on actual
and potential competition.’’ 49 U.S.C.
40101(a)(6). The ability of carriers to
initiate or expand service at the airport
is hindered, in large part, by the
imposition of a cap. Accordingly, the
FAA believes it must strike a balance
between (1) promoting competition and
permitting access to new entrants and
(2) recognizing historical investments in
the airport by carriers and the need to
provide continuity. It is not the role of
the Government either to dictate
particular business models or to
constrain a market and provide no
means for others to enter that limited
market. Simply imposing a cap and then
doing nothing to ensure that there are
competitive market forces and actual
and potential competition is
unacceptable.
Not only is the FAA required to
assure the efficient use of the NAS, but
it must do so in a manner that does not
penalize all potential operators at the
airport by effectively shutting them out
of the market. Accordingly, the FAA
believes that it is well within the
agency’s authority in 49 U.S.C. 40103 to
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provide some mechanism for slot
reallocation. Today’s proposal attempts
to strike the appropriate balance by
actively developing a market that values
the limited asset that the FAA created.
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B. Authority To Assign Slots at JFK and
Newark
The FAA has statutory authority to
dispose of property. Because of the
congressional mandate in 49 U.S.C.
40101(a)(6) to rely to the maximum
extent possible on competitive market
forces, the FAA is tailoring its approach
at the two airports. Today the agency is
requesting comment on an approach
whereby the FAA would establish a cap
on operations and address, through a
regulation, which slots would revert to
the FAA for reallocation but would use
its transaction authority to allow for
reallocation of slots via a market-based
mechanism.
1. Authority To Determine the Best Use
of the Airspace
The United States Government holds
exclusive sovereignty over United States
airspace. 49 U.S.C. 40103. Citizens of
the United States have a public right of
transit through navigable airspace, but
the FAA is authorized to assign the use
of the airspace necessary to ensure the
efficient use of airspace. To the extent
these needs can be met without
specifying which citizen may transit or
reserve a particular segment of airspace
at a particular time, there was no need
for the FAA to place constraints such as
slots on the use of the airspace—this
remains the case for the vast majority of
the NAS.
As described above, however, at New
York-area airports, in order to ensure
the efficient use of airspace, FAA has
had to impose constraints by assigning
to carriers operational authority to
conduct a scheduled arrival or
departure operation on a particular day
of the week during a specified 30minute period. These reservations of
airspace were called slots under the
HDR. After the FAA issued the ‘‘buy/
sell rule’’, 14 CFR part 93, subpart S,
these slots were treated not only as
property of the United States
Government, but also as if the carriers
had a property interest, albeit an interest
that was heavily encumbered by the
restrictions imposed by the FAA. The
nature of this property interest,
however, has always been somewhat
unclear. To encourage the most efficient
use of constrained airspace, the FAA is
clarifying the proprietary interest that
the FAA is willing to transfer to airlines
for a limited period of time. However,
the FAA has determined that in order to
assure the efficient use of airspace, it
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cannot simply permit those whom it
grants authority to use the airspace to
treat that authority as their own; it is the
United States Government that has
sovereignty over, and control of, the
airspace. Such an approach would not
only ignore the inherently valuable
nature of an airspace usage assignment,
but allows a select few to profit from a
governmental interest to the detriment
of their competitors and the public as a
whole.
2. Authority To Enter Into Leases and
Cooperative Agreements
The FAA has authority to lease real
and personal property, including
intangible property, to others. 49 U.S.C.
106(l)(6) and 106(n). When disposing of
an interest in property, however, the
FAA must receive adequate
compensation. 49 U.S.C. 40110(a)(2).
Nevertheless, the FAA also has broad
authority to enter into cooperative
agreements on such terms and
conditions as the FAA may consider
appropriate. 49 U.S.C. 106(l)(6). Under
the Federal Grants and Cooperative
Agreements Act, a cooperative
agreement is to be used when the
principal purpose of the agreement is to
transfer a thing of value to a recipient,
either public or private, to carry out a
public purpose of support or
stimulation authorized by law, instead
of acquiring (by purchase, lease or
barter) property or services for the direct
use or benefit of the agency, and there
is substantial Federal involvement in
the activity.
Because we must balance the need to
promote market forces with the value of
continuity and certainty of services, the
FAA believes this is the appropriate
vehicle to use to transfer most of the
slots as described in the following
options, for a ten-year period, to the
carriers that currently have operating
authorizations at JFK and Newark.
Doing so will recognize these carriers’
historical investment in JFK and
Newark, and the public interest that has
been served by that investment. In
addition, it would prevent disruption to
the national air transportation system
that might otherwise occur, allowing the
public to benefit from continued
certainty of readily available air
transportation to and from these
airports. There will, however, be
substantial ongoing Federal
involvement with these slots, as the
FAA will retain ATC responsibilities for
assuring that the use of these segments
of airspace for their specified times is
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done safely and with maximum possible
efficiency.12
C. Description of the Proposal
1. Categories of Slots
Today’s proposal would create three
categories of slots: Common Slots,
Limited Slots, and Unrestricted Slots.
All three categories would be held by
carriers pursuant to a lease. While the
overwhelming percentage of slots will
be Common Slots, many carriers would
hold slots in all three categories.
Common Slots would be assigned to
carriers currently serving the airports,
and would be leased for the duration of
the rule, i.e., ten years. Once the rule
sunsets, all interests would revert to the
FAA, assuming the rule is not replaced
by a different regulatory regime. Unlike
slots allocated under the HDR and
Operating Authorizations allocated
under the JFK and Newark Orders,
carriers would be granted clear property
rights to Common Slots, allowing the
slots to be collateralized or subleased to
another carrier for consideration.
However, Common Slots would be
subject to reversion to the FAA under
the rule’s minimum usage provision and
could be withdrawn for operational
reasons.
Leases for Limited Slots would also be
assigned by cooperative agreements
between the FAA and the carriers, but
during each of the first five years of the
rule, a percentage of Limited Slots
would be made available by auction, at
which point they would be converted to
Unrestricted Slots. Limited Slots would
consist only of those slots operated on
a daily, year-round basis. Thus, slots
used on a seasonal or on a less-thandaily basis would not be designated as
Limited Slots. The FAA arrived at this
tentative proposal because we seek to
populate the auction pool with those
slots that are most economically
valuable to carriers seeking to serve
New York City. Slots only available on
certain days or during one scheduling
season would likely have value only to
small subsets of operators at any given
time, thus limiting the effectiveness of
the market. Although slots would be
awarded to carriers through the auction
for daily, year-round operation, the
12 Under the cooperative agreements FAA will be
transferring a leasehold interest in the slots, but
FAA will not entirely dispose of its property.
Receiving compensation from these transfers is
antithetical to the definition of a cooperative
agreement. Nonetheless, to the degree that adequate
compensation might be considered required under
49 U.S.C. 40110(a)(2), the compensation will be the
carriers’ agreement to be bound by the terms in the
cooperative agreement as well as FAA’s recognition
of the public value received by the carriers’
historical investment at JFK and Newark.
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acquiring carrier may sublet to other
carriers any portion of that award.
Under alternative 1, as currently
proposed, 10 percent of the slots above
the baseline operations 13 at both JFK
and Newark would be designated as
Limited Slots, and thus could become
Unrestricted Slots. Under alternative 2,
20 percent of the slots at JFK above the
baseline operations would be designated
as Limited Slots.
The FAA recognizes that the
percentage of slots that the agency
proposes to reallocate represents a
relatively small percentage of the total
number of slots at the two airports,
particularly since each carrier’s first 20
slots, at each airport, will not be subject
to reversion. Accordingly, we
specifically invite commenters to
address the desirability of assigning
different percentages for both JFK and
Newark under both alternatives. For
example, should we increase the
percentages to be auctioned under
alternative 1 to 20 percent?
Additionally, the FAA seeks comment
on whether the proposed percentages
are sufficient to ensure the opportunity
for new entry and an efficient allocation
of slots among all carriers at the
airports, such that each slot is allocated
to the user who values it the most
highly. Increasing the percentage of
slots for auction would further facilitate
the use of market forces to allocate
capacity, which is a major goal of this
rulemaking. On the other hand,
lowering the number of slots withdrawn
for auction would be less disruptive to
the carriers currently operating at JFK
and Newark, and would allow the
agency to gain experience with the
auction process. The agency also seeks
input on the appropriate percentages of
slots available for auction (both in total
and annually) sufficient to assure an
efficient allocation of this scarce
resource. The final rule may provide for
the reversion of a higher or lower
percentage of slots available for auction
than we have proposed under either
alternative in this document.
Following a review of the comments
and further consideration, we may
provide in a Final Rule for an auction
of a greater percentage of a carrier’s
Limited Slots. As with Common Slots,
Limited Slots could be withdrawn
under the proposed minimum usage
provision, or for operational reasons.
Unrestricted Slots are slots that a
carrier would lease directly from the
FAA under the auction processes under
both alternatives. These slots would not
be withdrawn by the FAA either under
13 ‘‘Baseline operations’’, as defined in § 93.162
and § 93.182, are up to 20 slots per day.
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the minimum usage provisions or for
operational reasons because carriers are
required to purchase them due to
government action. As with Common
Slots, Unrestricted Slots would expire
when the rule sunsets.
2. Initial Assignment of Capacity
Upon the rule’s effective date, each
carrier at JFK and Newark would
automatically be assigned up to 20 slots.
Carriers whose approved schedules
under the JFK and Newark orders call
for fewer than 20 operations would be
assigned the same number of slots as
they are approved to operate under the
respective orders. These slots would
constitute carrier’s baseline operations.
Slots above a carrier’s baseline
operations would be designated as
Common or Limited Slots as described
above. The FAA believes this is a
rational approach to assuring that no
carrier is affected at a level that could
seriously disrupt its existing operations
at the airports.
The number of slots to be designated
as Limited Slots would be calculated
after subtracting the slots in each
carrier’s baseline operations of up to 20
slots per day. In other words, if a carrier
has 30 slots at JFK or Newark, 20 would
be protected at that airport. Under
alternative 1, 10 percent of the
remainder, or one slot, would become a
Limited Slot. Under alternative 2, 20
percent of the remainder, or two slots,
would become Limited Slots at JFK. Of
course, most carriers hold a number of
slots that would not be evenly divisible
by applying a 10-or 20-percent rule. In
such situations, the FAA would round
the number of slots to be designated as
Limited Slots up or down to the nearest
whole number. As a practical matter, a
carrier would have to have at least 25
slots under alternative 1 or 23 slots
under alternative 2, before any would be
designated as Limited Slots.
Given the seasonality of operations at
these airports, both in terms of
differences between summer and winter
operations and within-season variability
(which is much greater than at
LaGuardia), the determination of which
carrier is entitled to which slot will be
based on the seasonal schedules
approved by the FAA for summer 2008
and winter 2008/2009. The FAA has
tentatively decided to assign the
majority of slots at the airport to existing
carriers in order to minimize disruption
and to recognize the carriers’ historical
investments in both the airport and the
community.
No later than the final rule’s effective
date, the FAA will inform all carriers
that will have Limited Slots of the
number of Limited Slots they will have.
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The designations as Limited Slots
would be made by both carriers and the
FAA. Once the total number of Limited
Slots is communicated to each carrier,
the carrier would designate 50 percent
of the total by notifying the FAA within
10 days which of the slots in its slot
pool it designates as Limited Slots.
During the subsequent 10 days, the FAA
would determine the remainder of slots
that will be designated as Limited Slots
for each carrier. In making this
determination, the FAA would initially
exclude from consideration slots held
during all hours where carriers have
collectively determined two or more
slots should be Limited Slots. This
approach will assure that slots will be
available for auction throughout the
day. The time windows for the Limited
Slots would be distributed evenly over
the day to the extent possible.
Limited Slots would expire on
designated dates and the duration of
each Limited Slot would be arranged to
ensure that each affected carrier’s
aggregate lease duration would be
approximately equal to that of the other
affected carriers. The FAA would
publish a list showing the expiration
date for each Limited Slot. In this way,
all carriers would know within 20 days
of the rule’s effective date what slots
will become available for purchase, and
when.
A technical report more fully
explaining how Limited Slots could be
categorized and allocated was prepared
for the LaGuardia rulemaking. A copy of
that report has been placed in the
docket for this rulemaking. Commenters
are encouraged to review and comment
on that document.
3.Market-Based Award of Capacity
For the first five years of the rule, the
FAA would conduct an annual auction
of Limited Slots. Section 93.165(c) of
subpart N and § 93.185 of subpart O
provides for the conversion of Limited
Slots to Unrestricted Slots. In
accordance with the schedule published
under § 93.164, one-fifth of the
identified Limited Slots would revert to
the FAA for auction each year. Both the
auction and secondary market would be
open to any carrier in order to avoid
artificially restricting any carrier’s
flexibility to acquire Unrestricted Slots
for its services, and to offer carriers
wishing to initiate or expand operations
at JFK or Newark the full range of
opportunities to acquire slots.
Under alternative 1, the FAA is
proposing to have 10 percent of the
carriers’ slots above its baseline
operations revert to the FAA over the
first five years of the rule. The FAA
would auction the reverting Limited
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Slots, with FAA retaining proceeds of
the sale. After recouping its auction
costs, the FAA plans to spend the
remainder of the proceeds on aviation
congestion and delay management
initiatives in the New York City area.
Alternative 1 would make
approximately 19 slots available for
auction at JFK and 18 slots available at
Newark each year. Carriers typically
require pairs of slots, so alternative 1
would provide the equivalent of
approximately 9 round trips per day at
both airports. Under alternative 1, any
carrier could bid on a slot in an auction
that is blind to the participants and it
would be awarded in the form of an
Unrestricted Slot to the highest
responsive bidder. The winning carrier
could commence operations using the
newly acquired slot at the beginning of
the next summer scheduling season.
Alternative 2 proposes a different
auction procedure for JFK that would
provide that the holder of a Limited Slot
would retain the proceeds of its sale in
the auction. The only deduction from
the sale price would be for the FAA’s
costs associated with conducting the
auction.
Under this alternative, 20 percent of
the carriers’ slots above the baseline
operations at JFK would revert to the
FAA over the first five years of the rule.
Therefore, approximately 179 slots
would be available at JFK, of which
approximately 36 slots would be
available for auction each year. Carriers
typically require pairs of slots, so
alternative 2 as proposed would provide
the equivalent of 18 round trips per day
at JFK.
Under alternative 2, Unrestricted
Slots would be awarded to the highest
responsive bidders in a blind auction.
Only cash could be bid for a slot. Since
the goal of this rulemaking is to impose
marketplace discipline on the use of
slots, the FAA has proposed certain
restrictions in alternative 2 to reduce
anticompetitive behavior. For example,
carriers may not set minimum bids for
the slots, so they cannot impose a price
so prohibitively high as to effectively
preclude any sales. For similar reasons,
carriers would not be permitted to bid
on their own slots; otherwise, knowing
that no actual payment would be made,
they could bid unrealistic amounts that
no competitor could match. With
unrealistic bids, the fair market value of
the slot would not be identified.
Although the prohibition against a
carrier bidding on its own slots would
mean that the carrier would no longer
have that slot, any carrier could
negotiate for subleases or transfers from
other carriers in the secondary market or
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bid on other slots concurrently up for
auction and held by other carriers.14
The FAA believes that the above
procedures could not be applied at
Newark, because the current market
profile there would diminish the
likelihood that the auction would bring
the beneficial effects of market forces
that this proposal seeks to stimulate. At
JFK (and at LaGuardia), no one carrier
provides the vast majority of slots that
would be up for auction, and any carrier
that values a slot at a particular time
could have the opportunity to bid on an
equivalent slot that is held by another
carrier. At Newark, however,
Continental would have approximately
174 of its slots up for auction if 20
percent of its slots reverted to the FAA,
but would be unable to bid on those
slots or on an equivalent number of slots
because only 19 slots would be available
from any other carrier. Under this
circumstance, the prices paid for slots at
Newark may not be reflective of their
actual value, with no meaningful slot
market developing.
Among the specific questions on
which we request comment is whether
under alternative 2, 20 percent of a
carrier’s slots above its baseline at
Newark should revert to the FAA for
auction, even though the reallocation
mechanism would be the same as under
the first alternative. The agency also
requests comment on whether
alternative 2, in its entirety, should be
adopted at Newark.
The FAA considered using a
transparent auction procedure for both
alternatives 1 and 2. The FAA believes
that such transparency with respect to
identity of the bidders and their
corresponding bids would encourage
gaming of the auction and significantly
reduce the economic value of the initial
auction of slots. The FAA also believes
that an auction where the identity of the
bidders is not known assists new
entrants seeking to enter the market.
Therefore, under Alternative 1, the
identity of bidders would not be known
to other bidders. Since the FAA will
accept the highest responsive bid,
regardless of who that bidder is, there is
no need to keep bidders’ identities from
the agency. Under Alternative 2, the
identity of bidders would be known
only to the auctioneer, and then only for
administrative purposes.
The FAA does not propose to auction
slots after the first five years because it
believes that ideally slots should
transfer from one carrier to another
14 The FAA will attempt to auction an even
number of slots during each hour to provide an
opportunity for a carrier to replace a slot that it is
auctioning. This may not always be possible.
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through the secondary market. Not only
will the auctions help create a market
for slots, but all carriers will be able to
assess the true market value of a slot.
Armed with information on how much
a given slot is likely to be worth on the
open market, carriers (and their
shareholders) will be in an even better
position to determine how best to use
their slots based on commercial
considerations.
In the unlikely event no bids were
received for a slot, we propose that the
FAA retire the slot until the next
auction to assist in delay mitigation. We
request comment on whether, in the
alternative, the carrier that previously
held the slot should retain the slot for
use until the next season.
4. New and Returned Capacity
As mentioned above, the FAA may
raise the caps at JFK or Newark based
on an analysis of delay statistics, aircraft
operations at the respective airports,
airport and airspace improvements, and
other pertinent factors. The agency
believes there is unlikely to be much, if
any, returned capacity because carriers
can sublease slots that they do not
utilize efficiently rather than surrender
them to the FAA because of inadequate
usage. It is impossible at this time to
estimate with any certainty how much
new capacity is likely to come online;
but it is unlikely there will be much
new capacity in the near-term. Over a
longer period of time, the realization of
new capacity is dependent upon
NextGen technologies. The efficiencies
realized from the New York/New Jersey/
Philadelphia Metropolitan Area
Airspace Redesign project will benefit
delay reduction and will not be used to
add new capacity at the airports.
The auction method proposed for
LaGuardia, whereby all new and
returned capacity would be auctioned,
maximizes the total number of slots
available for auction and would, in turn,
increase the efficiencies that the
proposal is intended to generate.
However, the FAA believes the
character of operations at JFK and
Newark justifies a different approach. At
both airports, a substantial percentage of
air traffic is international. Historically,
the FAA has used the IATA Worldwide
Scheduling Guidelines (WSG) to
allocate slots for international
operations at slot constrained airports to
the extent they did not conflict with the
rules imposing caps at the affected
airports.
The use of the WSG to assign new
slots could affect carriers’ scheduling
incentives and reduce the efficiency of
the market for existing slots. However,
given the amount of new capacity that
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is likely to be available during the rule’s
timeframe, this effect is likely to be
small. Given the significant
international presence at both airports,
the FAA proposes to follow procedures
for assigning newly available or
returned slots that are largely derived
from the WSG. A new entrant would be
defined as a carrier holding or operating
eight slots or fewer, assigned by the
FAA, during the constrained hours. The
FAA understands that in order to
maintain viable operations at JFK or
Newark, a carrier would need four to six
slots for domestic operations, and at
least two slots for an international
operation. The five slots contemplated
under the WSG provide little
opportunity for a new entrant carrier to
establish its operations before losing
new entrant status and thereafter being
able to expand in the New York market
only through the purchase of a lease.
Setting a limit of eight slots
administratively assigned by the FAA as
the cut-off for new entrant status allows
a carrier to maintain its operations and
provides some ability to grow without
jeopardizing the carrier’s access to slots
through the WSG.
The agency is proposing that carriers
lose their new entrant status if, at any
point during the duration of the
proposed rule, the FAA assigns a total
of more than eight Common or Limited
Slots on a particular day. Thus, if a
carrier were awarded six Common Slots
on a given day of the week, it could only
be eligible for assignment of two more
slots for that day through the WSG
before losing its new entrant status,
even if it subsequently subleased some
of those Common Slots to another
carrier, giving it less than eight total
slots. However, the same carrier could
be assigned six Common Slots, acquire
any number of additional slots through
the secondary market, and still be
eligible to receive two additional slots
under the WSG as a new entrant. This
provision is intended to prevent carriers
from continuing to gain an advantage as
a new entrant by transferring holdings
for which they have provided no
monetary consideration. On the other
hand, since only those slots
administratively assigned by the FAA,
and not those awarded by auction or
through a lease with another carrier,
would be considered in determining
new entrant status, carriers with eight or
fewer of these slots will not be
discouraged from entering into lease
agreements with other carriers,
contributing to the development of a
robust secondary market. A carrier’s
new entrant status would not be affected
by one-for-one trades, which the agency
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believes are necessary for operational
efficiency, which do not result in either
a gain or reduction in operations, and
for which no consideration may be
given. The FAA seeks comment on
whether carriers should be allowed to
retain their new entrant status if they
have subleased or otherwise transferred
slots originally allocated to them by the
FAA.
After allowing for retimings and
accommodating requests by new
entrants, the FAA would evaluate the
efficiency of the requested assignment
in determining which carriers should
receive the slot. We would consider the
effective period of operation, the extent
and regularity of the proposed usage,
and the carrier’s schedule constraints.
Using a WSG-based approach would
facilitate the continued smooth
integration of JFK and Newark into the
international slot allocation system.
Based on discussions during the ARC,
we believe that the WSG approach is
well-understood and is an
internationally-recognized system of
allocation at airports.
We recognize that this method of
allocation differs from the method
proposed for new and returned capacity
in the companion proposal at
LaGuardia. We also recognize that
several commenters to the LaGuardia
NPRM argued that any administrative
allocation of capacity could dilute the
viability of the secondary market.
Accordingly, the FAA may adopt an
allocation method that allocates new
and returned capacity via an auction.
This was the approach favored in the
LaGuardia SNPRM. Under that
approach, the slots would be auctioned
as Unrestricted Slots. During the first
five years of the rule, this new capacity
would be auctioned at the same time as
the slots that revert to the FAA under
today’s proposal. Should insufficient
capacity be available to justify the
expense of conducting an auction in the
last five years of the rule, the FAA
would retain the slots until sufficient
capacity was available for a meaningful
auction. The FAA invites comment as to
whether the final rule should specify
that new and returned capacity at JFK
and Newark be allocated by auction
instead of by the WSG-method method
described above.
D. Auction Procedures
The FAA is currently engaged in
procuring the services of a contractor to
conduct auctions of the proposed
Limited Slots.15 The details regarding
15 As indicated in the Order Limiting Operations
at John F. Kennedy International Airport, 73 FR
3510 (1/18/08) and the Notice of Proposed Order
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the specifics of any potential auction
will be disclosed after the contractor has
developed and validated an auction
process and the FAA is ready to proceed
with an auction.16
In order to ensure that auction
participants understand how the
auction process works, the FAA
anticipates the contractor would have to
conduct a training seminar and a mock
auction prior to each auction. A single
training seminar and mock auction
would not suffice since presumably not
every carrier will participate in every
auction. The auction would also have to
be structured to prevent gaming. This
would likely be accomplished through
the use of activity rules.
Finally, the contractor would have to
provide and maintain a secure
communication mechanism for
conducting the auction and develop a
website that provides information on
the availability of slots and the logistics
of the auction.
At present, the FAA is contemplating
requiring bidding carriers to provide upfront payments as a prerequisite to
participating in the auction and
requiring full payment for the slots at
the time of award. The Federal
Communications Commission (FCC) has
experienced problems with bidders who
were not financially secure or who were
otherwise unwilling or unable to pay for
the awards. The upfront payment could
also discourage bid-sniping by
preventing carriers from adding slots to
their bid package beyond the amount of
the upfront payment. The FAA
recognizes that paying for the entire
lease at one time could be expensive;
however, it also believes that serious
bidders should be able to obtain the
requisite financing.
E. Secondary Trading
All slots will have value in the
secondary market. To the extent that the
secondary market is not mature and the
value of slots is not well-known, the
auction should inform potential buyers
of the value of these slots and stimulate
the secondary market. The FAA believes
that ultimately the best way to
maximize competition is with the
Limiting Scheduled Operations at Newark Liberty
International Airport, 73 FR 14552 (3/18/08), the
FAA intends to auction new or returned capacity,
if any, under those orders. The contract would
cover auctions at all possible airports. The FAA is
not waiting until this rule is finalized to award the
contract, because this proposal and the two orders
contemplate potentially conducting the first auction
before the end of the year.
16 Since the auction will address the lease of slots
awarded by the FAA under its leasing authority
rather than under any administrative allocation,
notice to interested parties will be governed by
applicable procurement law rather than the
Administrative Procedure Act.
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development of a robust secondary
market. Through the years, the FAA has
received complaints that carriers were
unaware of possible opportunities to
buy or lease slots at slot-controlled
airports and that incumbent carriers
were colluding to keep new entrant
carriers out of the airport.
We believe some measures must be
taken to assure access to the secondary
market. All carriers interested in
initiating operations at JFK and Newark,
or increasing their operations there,
should have an opportunity to
participate in any transactions.
Accordingly, the FAA proposes to (1)
permit carriers to include Common
Slots for sale in the auction, organized
by the FAA, and (2) establish a
‘‘secondary-market’’ bulletin-board
system whereby carriers seeking to
sublet slots, or to acquire such
subleases, would notify the FAA, which
would then post the relevant
information on its Web site.
If a carrier wishes to include some of
its slots in the auction, these slots will
be treated in the same manner as other
slots being auctioned by the FAA.
However, the carrier would be able to
specify a minimum price for these slots
so that it need not give up the slots
unless they command a price that the
carrier is willing to accept.
The FAA has tentatively decided that
transactions via the bulletin-boardsystem would not have to be blind, and
the transaction could include both cash
and non-cash payments. While it may
be argued that transparency among
parties to the transaction encourages
anti-competitive behavior, the FAA
believes that a blind, cash-only
requirement could be unduly restrictive.
In particular, the FAA believes that noncash bids promote competition by
enlarging the pool of potential bidders.
Thus, non-cash transactions should
result in both more bidders and
potentially higher bids. However, it is
critical that the identities of parties be
known if non-cash assets are permitted
because that is the only way to value
those assets. In addition, the non-cash
aspect of the transaction would require
direct negotiating.
The FAA believes that these concerns
could be met in a blind secondary
market. For example, the agency could
adopt a hybrid scheme whereby the
initial offer and acceptance would be
blind and limited to a cash offer, but the
parties could negotiate non-cash assets
after the offer had been accepted. Such
an approach may be workable. During
the posting of the lease and subsequent
bidding for the slots, the parties’
identities would not be known. Once
the auction closed, the FAA would
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15:15 May 20, 2008
Jkt 214001
forward the highest bid to the sublessor
without any bidder identification. The
sublessor would have a set number of
business days to accept the bid. At that
point, the parties’ identities would be
revealed, and they would have a set
period of time to negotiate the
possibility of non-cash assets in lieu of
money as consideration for the lease. If
the parties were unable to come to an
agreement, the lease would have to
proceed on a cash basis. The FAA seeks
comment on this and other viable
alternatives.
The FAA recognizes that non-blind
transactions could facilitate, and even
encourage, collusion. The Department
has the authority under 49 U.S.C. 41712
to investigate, prohibit, and impose
penalties on an air carrier for an unfair
or deceptive practice or an unfair
method of competition in air
transportation or the sale of air
transportation. The Department has
consistently held that this authority
empowers it to prohibit anticompetitive
conduct (1) that violates the antitrust
laws, (2) that is not yet serious enough
to violate the antitrust laws but may do
so in the future, or (3) that, although not
a violation of the letter of the antitrust
laws, is close to a violation or contrary
to their spirit.17
In order to assure that the Department
can conduct adequate oversight, today’s
proposal would require carriers to file
with the Department a detailed
breakdown of all lease terms and asset
transfers for each transaction, and the
subletting carrier would have to disclose
all bids submitted in response to its
solicitation. The slot could not be
operated by the acquiring carrier until
all documentation has been received,
and the FAA has approved the transfer.
The FAA has considered whether to
publicly disclose non-confidential
business information so that all carriers
have an assessment of the relative value
of the slots that are being traded. We
have not included language to this effect
in the proposed regulatory text.
However, we seek comment on whether
it would be helpful for this type of
information to be disclosed.
Under proposed § 93.168 and
§ 93.188, trades among U.S. air carriers
with unified marketing control
(marketing carriers) would not have to
17 See United Airlines, Inc. v. Civil Aeronautics
Board, 766 F. 2d 1107, 1112, 1114 (7th Cir. 1985)
and cases cited therein; see also H.R. Rep. No. 98–
793, 98th Cong., 2d Sess. (1984) at 4–5, Order 2002–
9–2, Complaint of the American Society of Travel
Agents, Inc., and Joseph Galloway against United
Air Lines, Inc, et al. (Docket No. OST–99–6410) and
Complaint of The American Society of Travel
Agents, Inc., and Hillside Travel, Inc. against Delta
Air Lines, et al. (Docket No. OST–02–12004)
(September 4, 2002) at 22–23.
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29635
be advertised, because they are
considered a single carrier for the
purpose of this rule and these trades do
not have the characteristics of a normal
arm’s-length transaction. Since foreign
air carriers are considered separate
carriers, they would not be able to take
advantage of this provision. As it has
done historically, the FAA would
approve these transactions after it has
received written evidence from each
carrier that it consents to the transfer.
The receiving carrier could not use the
slot until the FAA has provided written
approval of the transfer. Same day
transactions among marketing carriers
that address emergency situations, such
as maintenance problems, adverse
weather, or other unforeseen operational
issues, could take place without prior
approval by the FAA, but carriers would
have to notify the FAA of the trade
within five business days.
One-for-one trades between any two
carriers would similarly not be subject
to the restrictions of the secondary
market. Such trades enhance the
operational efficiency of the airport.
However, the proposed rule would not
allow consideration other than slots to
be offered. When monetary or other
compensation is involved in a slot
transfer, the transaction would have to
be handled as a sublease under § 93.168
of subpart N and § 93.188 of subpart O.
As with subleases and trades between
marketing carriers, the slot could not be
used by the new carrier until the FAA
provides written confirmation of the
transfer.
IV. Unscheduled Operations
The FAA intends to limit
unscheduled operations into and out of
JFK and Newark during the constrained
hours. Unscheduled operations at
Newark would be limited to two per
hour between 6 a.m. and 11:59 a.m. and
between 10 p.m. and 10:59 p.m. and one
per hour between 12 noon and 9:59 p.m.
At JFK, there would be two
unscheduled operations permitted per
hour between 6 a.m. and 1:59 p.m. and
between 10 p.m. and 10:59 p.m. and one
per hour between 2 p.m. and 9:59 p.m.
Under today’s proposal, reservations
would be required to use the airport
(except for emergency operations) and
could be obtained up to 72 hours in
advance.
To the extent ATC can handle
additional requests (for example, in
good weather) it will do so without
regard to the reason for the request.
However, there is no guarantee that the
FAA would accept more than the
specified number of reservations per
hour, and the determination to handle
more traffic would likely be made on
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Federal Register / Vol. 73, No. 99 / Wednesday, May 21, 2008 / Proposed Rules
that day. Reservations for all nonemergency flights would still be
required and would be assigned by the
FAA’s e-CVRS system. Additional
information of procedures for obtaining
reservations will be available on the
Internet at https://fly.faa.gov/ecvrs.
The FAA proposes to allow Public
Charter operators to reserve an
allowable operation up to six months in
advance. Since the reservation pool
consists of operations planned well in
advance and last-minute operations, the
number of reservations made available
to public charter flights up to six
months in advance would be limited to
no more than one in any hour and no
more than 25 percent of the total
reservations from 12 noon to 9:59 p.m.
local time. A Public Charter operator
without the advance reservation could
attempt to secure a reservation within
the three-day window that is available
for all other unscheduled operations. A
carrier could also elect to use one of its
assigned slots or obtain a slot from
another carrier in the secondary market.
V. Other Issues
A. 30-Minute Windows
Consistent with the existing JFK and
Newark Orders, we propose to assign
slots at JFK and Newark in 30-minute
windows. The FAA cautions, however,
that peaking within the 30-minute
windows could lead to increased
congestion. The FAA will continue to
monitor operations and will address any
significant operational issues through
discussions with carriers.
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B. Use-or-Lose
Consistent with the approach taken in
the JFK and Newark Orders, which is
based on the WSG, the FAA is
proposing a use-or-lose requirement for
JFK and Newark that takes into
consideration the seasonal nature of
international, as well as some domestic,
operations at those airports. Carriers
would be expected to operate their
Common Slots and Limited Slots in
accordance with approved schedules at
least 80 percent of the time. However,
proposed § 93.170 of subpart N and
§ 93.190 of subpart O would consider
the summer and winter schedules
separately. Carriers would be allocated
slots on the days and for the time
periods set out in their summer 2008
and winter 2008/2009 schedules
approved by the FAA. The carriers will
be subject to the use-or-lose requirement
only for those slot times that are
allocated to them. Unrestricted Slots
would not be subject to usage
requirements.
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Jkt 214001
The proposed rule would allow for
limited waivers of the minimum usage
requirements in the event that the
carrier experiences an unusual and
unpredictable condition that prevents it
from using the slot for at least five
consecutive days. If weather conditions
prevented operations, for example, an
operator might be granted a waiver of
the use-or-lose provisions.
To enable carriers to make necessary
operational adjustments, the usage
requirements will not apply for the first
90 days after a carrier receives a slot
under a sublease. However, a transfer
between carriers under § 93.168(f) of
subpart N and § 93.188(f) of subpart O
of this part, in which one carrier holds
marketing and inventory control of the
flights operated by another carrier, is
not a sublease for the purpose of this
section. Therefore, there would be no
90-day waiver of the minimum use
requirements following a transfer
between them. Likewise, there would be
no waiver for slots acquired via the
WSG because carriers would have
ample time after the slots were allocated
to take the steps necessary to initiate the
new operations.
C. Usage Reporting Requirements
The minimum usage requirement for
JFK and Newark would be calculated on
a seasonal basis. Therefore, we are
proposing to require carriers to file
reports with the FAA for each
scheduling season. In accordance with
§ 93.172 of subpart N and § 93.192 of
subpart O, carriers would report the
usage of Common and Limited Slots. An
interim report would be due no later
than September 1 for the summer
scheduling season and no later than
February 1 for the winter scheduling
season. Carriers would also be required
to file final usage reports within 30 days
of the last day of the applicable
scheduling season.
D. Administrative Provisions
The FAA may withdraw or suspend
slots at JFK or Newark for operational
reasons pursuant to § 93.167 of subpart
N and § 93.187 of subpart O. The FAA
would assign a withdrawal priority
number to each Common and Limited
Slot by a random lottery. If a reduction
in operations becomes necessary, slots
would be withdrawn starting with the
highest number. The Common or
Limited Slot with the lowest assigned
numbers would be the last to be
withdrawn. The FAA would provide at
least 45 days’ notice of its intention to
withdraw or temporarily suspend a slot,
unless the operational circumstances
necessitate a shorter notice period.
Given that a number of operators will
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have only a limited number of slots at
JFK and Newark, we are requesting
comment on whether the FAA should
establish a level of slots that would not
be subject to withdrawal or temporary
suspension to fulfill operational needs
to avoid the possibility of marginalizing
or excluding such operators from the
airport.
VI. Regulatory Notices and Analyses
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, the 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
(Pub. L. 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 final rule (1) has
benefits that justify its costs, is a
‘‘significant regulatory action’’ as
defined in § 3(f) of Executive Order
12866, which is also known as an
‘‘economically significant regulation
action,’’ 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
Through implementation of an
auction, FAA estimates that this
proposed rule would result in a longterm improvement in the allocation of
scarce slot resources at JFK and Newark.
The estimated present value of net
benefits of improved slot allocation by
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auctions is between $256 million and
$267 million at JFK and between $207
million and 218 million at Newark from
2009 to 2019. The costs of the rule, with
a present value between $11 and $22
million each at JFK and Newark, are due
to the design, implementation and
participation in an auction of slots.
These costs assume that the full cost of
setting up the auction mechanism and
participating in the auctions are
individually borne at each airport; in
fact, if auctions are conducted at more
than one airport in the New York area,
the costs of the setting up and
participating in the auctions could be
shared among the users of the airports
and would be lower on a per airport
basis.
This regulatory impact analysis
assumes as a baseline that in the
absence of this rulemaking, the FAA
would not otherwise impose long-term
caps on aircraft operations at JFK and
Newark. Therefore, the FAA estimates
that, through the long-term
implementation of a cap on aircraft
operations, this proposed rule would
result in about a 25 percent reduction in
the average delay per operation at JFK
relative to a situation with no cap. After
allowing for the lost consumer and
producer surplus due to a reduction in
air service caused by the caps, the net
value of the savings in average delay
attributable to the cap generates a
present value net benefit of about $686
million from 2009 to 2019. At Newark,
this proposed rule would result in about
a 23 percent reduction in the average
delay per operation at Newark relative
to a situation with no cap, generating a
present value net benefit (after
deducting lost producer and consumer
surplus from reductions in air service)
of about $705 million from 2009–
2019.18 The benefits are estimated by
comparing the no-rule scenario (similar
to the situation at JFK and Newark in
August 2007) with the proposed cap.
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Who Is Potentially Affected by This
Rulemaking
• Operators of scheduled and nonscheduled, domestic and international
flights, and new entrants who do not yet
operate at JFK and Newark.
• All communities with air service to
JFK and Newark.
• Passengers of scheduled flights to
JFK and Newark.
18 Estimates based on a 7 percent discount rate.
All results reported in this analysis are costbeneficial at a 7 percent discount rate; using a 3
percent rate would make them even more so, with
a present value net benefit of about $836 million
from 2009–2019 for JFK and $859 million from
2009–2019 for Newark.
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Jkt 214001
• The Port Authority of New York
and New Jersey, which operates the
airport.
Key Assumptions
• Base Case: No operating
authorizations or caps.
• Cap on operations provides delay
improvement.
• Alternative 1: 100 percent of slots
held by a carrier with fewer than 21
slots at either JFK or Newark would be
reassigned to the carrier with 10 years
of life; for holders with 21 or more slots
at either airport, 100 percent of the first
20 slots at each airport would
reassigned to the carrier with leases of
10 years and 90 percent of slots above
the 20 slot base for the carrier would be
reassigned to the carrier with leases of
10 years. Ten percent of slots above the
20 slot base would be designated as
Limited Slots and would be auctioned:
one-fifth immediately upon the
implementation of the rule.19 The
remaining four-fifths of the Limited
Slots would be assigned to the carrier
which held them previously, but with
leases of 1 to 4 years of life. The FAA
would auction the Limited Slots to the
highest bidder in annual auctions
beginning in January 2009 and ending
in January 2013. FAA would use the net
revenues of the annual auctions to
invest in capacity in the New York area.
• Alternative 2: For JFK, 100 percent
of slots held by carriers with fewer than
21 slots at JFK would be reassigned to
the carrier with leases of 10 years; for
holders with 21 or more slots, 100
percent of the first 20 slots would be
reassigned to the carrier with leases of
10 years and 80 percent of slots above
the 20 slot base for the carrier would be
reassigned to the carrier with leases of
10 years. Twenty percent of slots above
the 20 slot base would be designated as
Limited Slots and would be auctioned:
one-fifth immediately upon the
implementation of the rule. The
remaining four-fifths of the Limited
Slots would be assigned to the carrier
which held them previously, but with
leases of 1 to 4 years of life. The FAA
would auction the Limited Slots to the
highest bidder in annual auctions
beginning in January 2009 and ending
in January 2013. Carriers at JFK could
not bid on slots they formerly held but
would retain the net revenues generated
by the sale of the former leases. As
Newark would be treated the same
under either approach, the key
19 The
slots auctioned in January 2009 under both
alternatives would become available beginning in
the summer season of 2009. Until that time, the air
carrier that formerly held the Limited Slot could
continue to use it.
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29637
assumptions for Newark are the same as
under Alternative 1.
• For the purposes of this evaluation,
the effective date is 12/01/08.
Other Important Assumptions
• Discount Rate—3 and 7 percent in
real (net of inflation) terms.
• Period of Analysis: 2009 to 2019.
• Assumes 2008 constant year (real)
dollars.
• Passenger Value of Travel Time—
$28.60 per hour at JFK and Newark.20
Alternatives We Have Considered
• No Action: This alternative would
let the current orders restricting
operations at JFK and Newark expire on
October 24, 2009 without replacing the
limitations. The FAA expects that,
without caps, air carriers would expand
flight operations at these two airports to
levels equal to or exceeding those
experienced in the summer of 2007,
causing increasingly severe delays at
these airports and throughout the
National Airspace System (NAS).
• Caps: This alternative would
permanently impose caps at 81
scheduled operations per hour each at
JFK and Newark, plus up to two
unscheduled operations per hour at
each airport, every day from 6 a.m. to
10:59 p.m.; it would grandfather current
holders of operating authorizations to
operate at the airports.
• Alternative 1: This alternative
would institute caps at both JFK and
Newark as described above and
reallocate 10 percent of eligible capacity
via five annual auctions beginning in
January 2009. The FAA would retain the
net proceeds of the auctions for use on
congestion and delay management
initiatives in the New York City area.
• Alternative 2: This alternative
would institute caps at JFK as above and
reallocate 20 percent of eligible slots at
JFK, via five annual auctions beginning
in January 2009. The carrier holding a
slot to be reallocated would not be able
to bid on its own slots, but would retain
the net auction proceeds. Under
alternative 2, the regime of Newark
would be the same as in alternative 1.
We are requesting comment from
industry on the range of alternatives
considered.
Benefits of This Rulemaking
The primary benefits of this
rulemaking would be due to the delay
reduction from the caps on operations
20 GRA, Incorporated ‘‘Economic Values for FAA
Investment and Regulatory Decisions, A Guide,’’
prepared for FAA Office of Aviation Policy and
Plans, (October 3, 2007). Passenger value of time is
for ‘‘all purposes,’’ reflecting a mix of business and
leisure travel.
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and an improvement in the efficiency of
allocation of scarce slot resources
through the use of an auction
mechanism and secondary slot
subleasing markets characterized by
clearly defined property rights.
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Costs of This Rulemaking
The major costs of this proposed rule
are the costs to the public and private
sectors of designing, implementing and
participating in the auction.
Additionally, the implementation of
caps under this rulemaking will lead to
a reduction in flights into JFK and
Newark compared to what would occur
without the caps. The FAA has
estimated the value of these scheduled
flight reductions and has deducted them
from the delay benefits of the caps at
each airport to calculate overall net
benefits of the caps. FAA specifically
requests comment on the impacts from
the reduction in scheduled flights.
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.
Some of the information requirements
in today’s notice are similar to those
originally proposed in the SNPRM
‘‘Congestion Management Rule for
LaGuardia Airport’’ (Docket No. FAA–
2006–25707; Notice No. 08–04). The
FAA has applied these requirements
and summarized them below.
Title: Congestion Management Rule
for John F. Kennedy International
Airport and Newark Liberty
International Airport.
Summary: The FAA proposes to
grandfather the majority of operations at
JFK and Newark and develop a
secondary market by annually
auctioning off a limited number of slots
at each airport. This proposal also
contains provisions for use-or-lose and
withdrawal for operational need. The
FAA proposes to sunset the rule in ten
years. More information on the
proposed requirements is detailed
elsewhere in today’s notice.
Use of: The information is reported to
the FAA by scheduled operators holding
slots at JFK and Newark. 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 slots among the operators
and facilitates the transfer of slots in the
secondary market. The FAA also uses
this information in order to maintain an
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accurate accounting of operations to
ensure compliance with the operations
permitted under the rule and those
actually conducted at the airports.
Respondents: The respondents to the
proposed information requirements in
today’s notice are scheduled carriers
with existing service at JFK and Newark,
carriers that plan to enter the JFK and
Newark markets (by auction or
secondary market), and carriers that
enter the JFK and Newark market in the
future. There are currently seventyseven (77) carriers with existing
scheduled service at JFK and thirty-nine
(39) carriers with existing scheduled
service at Newark. Various carriers
included in these totals have service at
both airports.
Frequency: The information collection
requirements of the rule involve
scheduled carriers notifying the FAA of
their use of slots. Each carrier must
notify the FAA of its: (1) Designation of
50 percent of its Limited Slots, if
applicable; (2) request for confirmation
to sublease slots; (3) consent to transfer
slots under the transferring Carrier’s
marketing control; (4) requests for
confirmation of one-for-one slot trades;
(5) slot usage (operations); and (6)
request for assignment of slots available
on a temporary basis.
Annual Burden Estimate: The annual
reporting burden for each subsection of
the rule is presented below. Annual
burden estimates presented in today’s
notice are based on burden estimates
from the SNPRM ‘‘Congestion
Management Rule for LaGuardia
Airport’’ (Docket No. FAA–2006–25709;
Notice No. 08–04).
The burden is calculated by the
following formula:
Annual Hourly Burden = (# of
respondents) * (time involved) *
(frequency of the response).
(1 carrier) * (240 hours per submittal) =
240 hours.
(5 carriers) * (80 hours per submittal) =
400 hours.
Total Annual Hourly Burden = 640
hours.
Based on the projected allocation of
Operating Authorizations and the
proposed level of baseline operations
each carrier would be grandfathered
under today’s proposal, we assumed
that one carrier, Continental Airlines,
with the most operations at Newark
would expend up to 30 days of planning
time, potentially 240 hours, to develop
and submit its designation of 50 percent
of its Limited Slots. The remaining five
carriers required to designate Limited
Slots would each expend up to 10 days
of planning time, potentially 80 hours
each, to develop and submit their
designation of 50 percent of their
Limited Slots. These five carriers would
therefore need 400 hours. In total, the
six carriers at Newark required to
designate Limited Slots would require
640 hours of effort to make the
designation. This designation would
occur once, 10 days after the final rule
effective date.
Section 93.164(c)(2) Categories of
Slots: A Carrier Shall Designate 50
Percent of Its Limited Slots
We made no assumptions about
additional workload for carriers at either
airport associated with the IATA-like
administrative process for assigning
new or returned slots. Workload would
vary depending on how many (if any)
new or returned slots were to develop
at either airport over the 10 year period
of the proposed rule. In any case,
carriers are already familiar with and
use IATA-like allocation methods and
would handle them in the course of
normal operations at JFK and Newark.
JFK
(4 carriers with Limited Slots) * (80
hours per submittal) = 320 hours.
Based on the current allocation of
Operating Authorizations and the
proposed level of baseline operations
each carrier would be grandfathered
under today’s proposal, we assumed the
four carriers with the most operations at
JFK would expend up to 10 days of
planning time each, potentially 80
hours, to develop and submit their
designations of 50 percent of their
Limited Slots, for a total of 320 hours.
This designation would occur once, 10
days after the final rule effective date.
Newark
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Section 93.165(c)
Slots
Initial Assignment of
We assumed that the 77 carriers
operating at JFK and 39 carriers
operating at Newark would expend time
submitting and collecting information to
participate in the proposed auctions for
slot assignments. The FAA is currently
in the process of procuring auction
software and services. The FAA will
make available burden estimates for
information requirements relating to
auction participation in a separate
notice.
Section 93.166(b)–(c) Assignment of
New or Returned Slots
Section 93.168(b), (d), (f)
Transfer of Slots
Sublease and
JFK
(18 carriers) * (1.5 hours per submittal)
* (4 occurrences per year) = 108
hours.
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(59 carriers) * (1.5 hours per submittal)
* (2 occurrences per year) = 177
hours.
Total Annual Hourly Burden = 285
hours.
Based on burden estimates from
‘‘Congestion Management Rule for
LaGuardia Airport,’’ we assumed the 77
carriers operating at JFK would expend
11⁄2 hours for each occurrence of a lease
or transfer of a slot. For each operator
with 6 or more slots (18 carriers total),
we assumed that a lease or transfer of a
slot would occur on average quarterly.
For each operator with fewer than 6
slots (59 carriers total), we assumed that
a lease or transfer of a slot would occur
on average biannually. The total annual
hourly burden for all carriers
collectively would be 285 hours.
Newark
(1 carrier) * (1.5 hours per submittal) *
(16 occurrences per year) = 24 hours.
(12 carriers) * (1.5 hours per submittal)
* (4 occurrences per year) = 72 hours.
(26 carriers) * (1.5 hours per submittal)
* (2 occurrences per year) = 78 hours.
Total Annual Hourly Burden = 174
hours.
As with JFK, we assumed the 39
carriers operating at Newark would
expend 1/1⁄2 hours for each occurrence
of a lease or transfer of a slot. For the
largest operator, we assumed that a lease
or transfer of 4 slots would occur on
average quarterly. For those operators at
Newark with 6 or more slots (12 carriers
total, excluding Continental Airlines),
we assumed that a lease or transfer of a
slot would occur on average quarterly.
For each operator with fewer than 6
slots (26 carriers total), we assumed that
a lease or transfer of a slot would occur
on average biannually. The total annual
hourly burden for all carriers
collectively would be 174 hours.
Section 93.169(b), (d) One-for-One
Trades of Slots
JFK
(18 carriers) * (1.5 hours per submittal)
* (4 occurrences per year) = 108
hours.
(59 carriers) * (1.5 hours per submittal)
* (2 occurrences per year) = 177
hours.
Total Annual Hourly Burden = 285
hours.
Based on burden estimates from
‘‘Congestion Management Rule for
LaGuardia Airport,’’ we assumed the 77
carriers operating at JFK would expend
11⁄2 hours for each occurrence of a onefor-one trade of a slot. For each operator
with 6 or more slots (18 carriers total),
we assumed that a one-for-one slot trade
would occur on average quarterly. For
each operator with fewer than 6 slots
(59 carriers total), we assumed that a
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one-for-one slot trade would occur on
average biannually. The total annual
hourly burden would be 285 hours.
Newark
(1 carrier) * (1.5 hours per submittal) *
(16 occurrences per year) = 24 hours.
(12 carriers) * (1.5 hours per submittal)
* (4 occurrences per year) = 72 hours.
(26 carriers) * (1.5 hours per submittal)
* (2 occurrences per year) = 78 hours.
Total Annual Hourly Burden = 174
hours.
As with JFK, we assumed the 39
carriers operating at Newark would
expend 11⁄2 hours for each occurrence of
a one-for-one trade of a slot. For the
largest operator, we assumed that a onefor-one trade of 4 slots would occur on
average quarterly. For those operators at
Newark with 6 or more slots (12 carriers
total, excluding Continental Airlines),
we assumed that a one-for-one slot trade
would occur on average quarterly. For
each operator with fewer than 6 slots
(26 carriers total), we assumed that a
one-for-one slot trade would occur on
average biannually. The total annual
hourly burden would be 174 hours.
Section 93.171 Unscheduled
Operations
This section of the proposed rule
requires unscheduled and public charter
operations at JFK and Newark to be
reserved using the Airport Reservation
Office (ARO) or, for public charters
seeking reservations up to six months in
advance, through the Slot
Administration Office. It is the FAA’s
intention, however, to require these
reservation procedures at JFK and
Newark regardless of and apart from the
outcome of this rulemaking.
Accordingly, the FAA will make
available burden estimates relating to
unscheduled and public charter
operations in a separate rulemaking
notice.
Section 93.172(a)–(b) Reporting
Requirements
JFK
(77 carriers) * (1.5 hours per submittal)
* (4 occurrences per year) = 462
hours.
Based on burden estimates from the
‘‘Congestion Management Rule for
LaGuardia Airport’’ (Docket No. FAA–
2006–25709; Notice No. 08–04), we
assumed the 77 carriers operating at JFK
would expend, on average, 11⁄2 hours
two times per summer and winter
season to submit the data required by
§ 93.172.
Newark
(39 carriers) * (1.5 hours per submittal)
* (4 occurrences per year) = 234
hours.
Based on burden estimates from the
‘‘Congestion Management Rule for
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29639
LaGuardia Airport’’ (Docket No. FAA–
2006–25709; Notice No. 08–04), we
assumed the 39 carriers operating at
Newark would expend, on average, 11⁄2
hours every two months to submit the
data required by § 93.172.
Summary
JFK
Total First Year Hourly Burden—320
Hours.
Total Recurring Annual Hourly
Burden (per year for 10 years)—1,032
Hours.
Newark
Total First Year Hourly Burden—640
Hours.
Total Recurring Annual Hourly
Burden (per year for 10 years)—582
Hours.
The burden estimates for JFK and
Newark do not include the time
required to participate in the annual
auctions. The FAA will make available
burden estimates for information
requirements relating to auction
participation in a separate notice.
The agency is soliciting comments
to—
(1) Evaluate whether the proposed
information requirements are necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
(2) Evaluate 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 July 21, 2008,
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, via
facsimile at (202) 395–6974, 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.
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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, § 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 most directly
affects four scheduled operators at JFK
(Delta Air Lines, JetBlue Airways,
American Airlines, and United Airlines)
and five scheduled operators at Newark
(Continental Airlines, American
Airlines, United Airlines, Delta Air
Lines, and U.S. Airways). These carriers
would receive one or more Limited
Slots. None of these carriers are small
businesses. However, the FAA
considered that some small regional
operators affiliated with these carriers
and using slots provided by these
carriers could be affected. Based on a
review of the number of employees for
each scheduled operator, the FAA found
that only two scheduled operators
(CommutAir and EOS Airlines) at JFK,
and none at Newark, are considered
small by Small Business Administration
size standards (in this case, firms with
1,500 or fewer employees). Of the two
scheduled operators at JFK, CommutAir
operates under the name Continental
Connection for Continental Airlines.
Continental Airlines has fewer than 20
operations per day at JFK and therefore
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neither it nor CommutAir is affected by
this rule.
Using Enhanced Traffic Management
System (ETMS) data, the FAA has
determined that there are approximately
54 identifiable unscheduled operators at
JFK and 61 identifiable unscheduled
operators at Newark who could be
affected by this rule. While some of
these operators may be small
businesses, the FAA does not believe
they will be significantly impacted by
this rulemaking. These operators
typically have greater flexibility to
adjust operations and carry out very few
operations during peak hours compared
to scheduled operators. During peak
hours in the summer of 2007, there were
fewer than two average unscheduled
operations per hour at each airport,
whereas the proposed rule would allow
1 to 2 operations per hour. Section
93.171(g) of subpart N and § 93.191(g) of
subpart O enables the FAA to determine
that additional reservations may be
accommodated for a specific time
period, and allows unused slots to be
available temporarily for unscheduled
operations. In summary, while the
proposed rule reduces the number of
unscheduled operations per hour, it
does not significantly affect the overall
number of current unscheduled
operations that take place at each
airport.
Using 2007 Census data, the FAA has
also reviewed whether there would be
interruptions to service to communities
with a population of less than 50,000.
We do not know if there will be any
service interruptions as a result of the
rule. We have reviewed population
statistics for every city served from JFK
and Newark in August 2007 (the base
for initial allocation of slots under the
proposal) and found none with a
population of less 50,000.
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
(Pub. L. 96–39), as amended by the
Uruguay Round Agreements Act (Pub.
L. 103–465), prohibits Federal agencies
from establishing any standards or
engaging in related activities that create
unnecessary obstacles to the foreign
commerce of the United States.
Pursuant to these Acts, the
establishment of standards or engaging
in related activities is not considered as
creating unnecessary obstacles to the
foreign commerce of the United States,
so long as the standards and activities
have a legitimate domestic objective,
such the protection of safety, and do not
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operate in a manner that excludes
imports that meet this objective. The
statute also requires consideration of
international standards and, where
appropriate, that they be the basis for
U.S. standards. The FAA notes the
proposed rule to establish slots and
limited auctions of slot leases at JFK and
Newark is necessary for the efficient
utilization of the national airspace
system, and has assessed the effects of
this rulemaking to ensure that the final
rule, if adopted, would not impose costs
or barriers to international entities
within the national airspace system.
Foreign entities at both JFK and
Newark would not have any slots
classified as Limited Slots under either
alternative 1 or 2 under the terms of
§ 93.164 of subpart N and § 93.184 of
subpart O of the proposed rule. Foreign
carriers might benefit from the rule if
they choose to participate in the
proposed auction to acquire additional
slots or to sublease slots in the
secondary market.
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)
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 $136.1
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 normally
categorically excluded from preparation
of an environmental assessment or
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environmental impact statement under
the National Environmental Policy Act
(NEPA) in the absence of extraordinary
circumstances. The FAA has
determined that this rulemaking
qualifies for the categorical exclusions
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)’’ and
paragraph 312f, ‘‘Regulations, standards,
and exemptions (excluding those which
if implemented may cause a significant
impact on the human environment.)’’ It
has further been determined that no
extraordinary circumstances exist that
may cause a significant impact and
therefore no further environmental
review is required. The FAA has
documented this categorical exclusion
determination. A copy of the
determination and underlying
documents has been included in the
Docket for this rulemaking.
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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.
Additional 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. To ensure the docket
does not contain duplicate comments,
please send only one copy of written
comments, or if you are filing comments
electronically, please submit your
comments only one time.
We will file in the docket all
comments we receive, as well as a
report summarizing each substantive
public contact with FAA personnel
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concerning this proposed rulemaking.
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 after
the comment period has closed if it is
possible to do so without incurring
expense or delay. We may change this
proposal in light of the comments we
receive.
Proprietary or Confidential Business
Information
Do not file in the docket information
that you consider to be proprietary or
confidential business information. Send
or deliver this information directly to
the person identified in the FOR FURTHER
INFORMATION CONTACT section of this
document. You must mark the
information that you consider
proprietary or confidential. If you send
the information on a disk or CD ROM,
mark the outside of the disk or CD ROM
and also identify electronically within
the disk or CD ROM the specific
information that is proprietary or
confidential.
Under 14 CFR 11.35(b), when we are
aware of proprietary information filed
with a comment, we do not place it in
the docket. We hold it in a separate file
to which the public does not have
access, and we place a note in the
docket that we have received it. If we
receive a request to examine or copy
this information, we treat it as any other
request under the Freedom of
Information Act (5 U.S.C. 552). We
process such a request under the DOT
procedures found in 49 CFR part 7.
Availability of Rulemaking Documents
You can get an electronic copy of
rulemaking documents using the
Internet by—
1. Searching the Federal eRulemaking
Portal (https://www.regulations.gov);
2. Visiting the FAA’s Regulations and
Policies Web page at https://
www.faa.gov/regulations_policies/; or
3. Accessing the Government Printing
Office’s Web page at https://
www.gpoaccess.gov/fr/.
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.
You may access all documents the
FAA considered in developing this
proposed rule, including economic
analyses and technical reports, from the
internet through the Federal
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29641
eRulemaking Portal referenced in
paragraph (1).
List of Subjects in 14 CFR Part 93
Air traffic control, Airports,
Navigation (air).
Proposed Regulatory Text
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.
Proposed Amendment—Alternative 1
2. Subpart N is added to read as
follows:
Subpart N—John F. Kennedy
International Airport and Newark
Liberty International Airport Traffic
Rules
Sec.
93.161 Applicability.
93.162 Definitions.
93.163 Slots for scheduled arrivals and
departures.
93.164 Categories of slots.
93.165 Initial assignment of slots.
93.166 Assignment of new or returned slots.
93.167 Reversion and withdrawal of slots.
93.168 Sublease and transfer of slots.
93.169 One-for-one trade of slots.
93.170 Minimum usage requirements.
93.171 Unscheduled operations.
93.172 Reporting requirements.
93.173 Administrative provisions.
Subpart N—John F. Kennedy
International Airport and Newark
Liberty International Airport Traffic
Rules
§ 93.161
Applicability.
(a) This subpart prescribes the air
traffic rules for the arrival and departure
of aircraft used for scheduled and
unscheduled service, other than
helicopters, at John F. Kennedy
International Airport (JFK) and Newark
Liberty International Airport (Newark).
(b) This subpart also prescribes
procedures for the assignment, transfer,
sublease and withdrawal of Slots issued
by the FAA for scheduled operations at
JFK and Newark.
(c) The provisions of this subpart
apply to JFK and Newark during the
hours of 6 a.m. through 10:59 p.m.,
Eastern Time. No person shall operate
any scheduled arrival or departure into
or out of JFK or Newark during such
hours without first obtaining a Slot in
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accordance with this subpart. No person
shall conduct an Unscheduled
Operation to or from JFK or Newark
during such hours without first
obtaining a Reservation.
(d) A U.S. Air Carrier conducting
operations solely under another
Carrier’s marketing control with unified
inventory control shall not be
considered a separate Carrier for
purposes of this subpart.
(e) The Slots assigned under this
subpart terminate at 11 p.m. on March
30, 2019.
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§ 93.162
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 JFK and
Newark.
Baseline Operations are those
common slots held by a carrier at JFK
or Newark on [final rule effective date],
that do not exceed 20 operations per
day.
Carrier is a U.S. or foreign air carrier
with authority to conduct scheduled
service under parts 121, 129, or 135 of
this chapter and the appropriate
economic authority for scheduled
service under 14 CFR chapter II and 49
U.S.C. chapter 411.
Common Slot (C-slot) is a slot that is
assigned by the FAA as a lease under its
cooperative agreement authority for the
length of this rule.
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 JFK, Newark,
and other designated airports.
Limited Slot (L-slot) is a slot operated
every day, the lease for which expires
prior to the expiration of this rule for
subsequent award by the FAA as an
unrestricted slot.
New Entrant is any carrier that is
administratively allocated a total of 8 or
fewer slots at JFK or Newark,
respectively, during controlled hours at
any point during the duration of the
rule.
Public Charter is defined in 14 CFR
380.2 as a one-way or roundtrip charter
flight to be performed by one or more
direct air carriers that is arranged and
sponsored by a public charter operator.
Public Charter Operator is defined in
14 CFR 380.2 as a U.S. or foreign public
charter operator.
Reservation is an authorization
received by a carrier or other operator of
an aircraft, excluding helicopters, in
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accordance with procedures established
by the FAA to operate an unscheduled
arrival or departure on a particular day
of the week during a specific 30-minute
period.
Scheduled Operation is the arrival or
departure segment of any operation
regularly conducted by a carrier
between either JFK or Newark and
another point regularly served by that
carrier.
Slot is the operational authority
assigned by the FAA to a carrier to
conduct one scheduled arrival or
departure operation at JFK or Newark on
a particular day of the week during a
specific 30-minute period.
Summer Scheduling Season begins on
the last Sunday of March.
Unrestricted Slot (U-slot) is a slot that
is awarded to a carrier by the FAA via
the auction of a lease.
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 JFK or
Newark and another service point. The
following types of carrier operations
shall be considered unscheduled
operations for the purposes of this
subpart: Public, on-demand, and other
charter flights; hired aircraft service;
extra sections of scheduled flights; ferry
flights; and other non-passenger flights.
Winter Scheduling Season begins on
the last Sunday in October.
§ 93.163 Slots for scheduled arrivals and
departures.
(a) During the hours of 6 a.m. through
10:59 p.m., Eastern Time, no person
shall operate any scheduled arrival or
departure into or out of JFK or Newark
without first obtaining a Slot in
accordance with this subpart.
(b) Except as otherwise established by
the FAA under paragraph (c) of this
section, the number of Slots shall be
limited to no more than eighty-one (81)
per hour at JFK and eighty-one (81) per
hour at Newark. At JFK, the number of
Slots may not exceed 44 in any 30minute period, and 81 in any 60-minute
period. At Newark, the number of Slots
may not exceed 44 in any 30-minute
period and 81 in any 60-minute period.
The number of arrival and departure
Slots in any period may be adjusted by
the FAA as 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.
(c) Notwithstanding paragraph (b) of
this section, the Administrator may
increase the number of Slots based on
a review of the following:
(1) The number of delays;
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(2) The length of delays;
(3) On-time arrivals and departures;
(4) The number of actual operations;
(5) Runway utilization and capacity
plans; and
(6) Other factors relating to the
efficient management of the National
Airspace System.
§ 93.164
Categories of slots.
(a) General. Each Slot shall be
designated as a Common Slot, Limited
Slot or Unrestricted Slot and shall be
assigned to the Carrier under a lease
agreement. A lease for a Common or
Limited Slot shall be awarded via a
cooperative agreement. A lease for an
Unrestricted Slot shall be awarded via
an auction.
(b) Common Slots. (1) All Slots within
any Carrier’s Baseline Operations, as
determined on [final rule effective date],
shall be designated as Common Slots.
(2) Ten percent of the Slots at JFK and
Newark on [final rule effective date] not
otherwise designated as Common Slots
under paragraph (b)(1) of this section
shall be designated as Limited Slots. All
other Slots shall be designated as
Common Slots.
(c) Limited Slots. Those Slots assigned
to a Carrier subject to return to the FAA
under § 93.165(c) shall be designated as
Limited Slots until the date of their
reassignment by the FAA as
Unrestricted Slots. A Carrier may
continue to use a Limited Slot that has
reverted to the FAA until the date of the
auction.
(1) Each Carrier with a total number
of daily operations at JFK or Newark in
excess of its Baseline Operations will be
notified by [final rule effective date]
how many of its Slots will be designated
as Limited Slots pursuant to paragraphs
(c)(2) and (3) of this section.
(2) A Carrier shall designate 50
percent of its Limited Slots. The Carrier
must notify the FAA of its
determination by [date 10 days after the
final rule effective date].
(3) The FAA will designate the
remaining Limited Slots initially
excluding those hours in which two or
more Slots have been designated as
Limited Slots by the Carriers.
(4) No later than [date 20 days after
the final rule effective date], the FAA
will publish a list of all Limited Slots
and the dates upon which they will
expire.
(d) Unrestricted Slots. Unrestricted
Slots are Slots acquired by a Carrier
through a lease with the FAA awarded
via an auction. Unrestricted Slots are
not subject to withdrawal by the FAA.
§ 93.165
Initial assignment of slots.
(a) Except as provided for under
paragraphs (b) and (c) of this section,
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any Carrier allocated operating rights
under the Order limiting operations at
JFK or the Order limiting operations at
Newark as evidenced by the FAA’s
records, will be assigned corresponding
Slots in 30-minute periods consistent
with the limits under § 93.163(b) and its
summer and winter season schedules as
approved by the FAA. If necessary, the
FAA may utilize administrative
measures such as voluntary measures or
a lottery to re-time the assigned Slots
within the same hour to meet the 30minute limits under § 93.163(b). The
FAA Vice President, System Operations
Services, is the final decisionmaker for
determinations under this section.
(b) If a Carrier was allocated operating
rights under the Order limiting
operations at JFK or the Order limiting
operations at Newark, but the operating
rights were held by another Carrier, then
the corresponding Slots will be assigned
to the Carrier that held the operating
rights for that period, as evidenced by
the FAA’s records.
(c) Starting [date 35 days after the
effective date] and every year thereafter
through 2013, one-fifth of the total
number of Limited Slots shall revert to
the FAA in accordance with the
schedule published under § 93.164(c)(4)
and be auctioned as Unrestricted Slots
by the FAA. Any Slot receiving no
responsive bids will be retired until the
next auction. An affected Carrier will be
allowed to use the Limited Slot until the
effective date of an award to a Carrier
as an Unrestricted Slot.
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§ 93.166
slots.
Assignment of new or returned
(a) This section describes the process
by which the FAA assigns new Slots, as
well as Slots returned to the FAA
pursuant to the provisions of § 93.170.
These Slots will be assigned by the FAA
to requesting Carriers for the summer
and winter scheduling seasons.
(b) Requests for the new Slots or
returned Slots or both must be
submitted to the Federal Aviation
Administration, Slot Administration
Office, AGC–200, 800 Independence
Avenue, SW., Washington, DC 20591
(Facsimile: (202) 267–7277; e-mail: 7awa-slotadmin@faa.gov), by the
deadline as published by the FAA in a
Federal Register notice for each
Summer and Winter Scheduling Season.
The requesting Carrier must submit its
entire schedule at JFK and Newark for
the particular season, noting which
requests are in addition to, or changes
from, the previous corresponding season
at the respective airports.
(c) Before assigning new or returned
Slots under this section, the FAA will
first accommodate Carrier requests to
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retime Slots for operational reasons or to
bring the flight time closer to the time
originally requested by the applicant
Carrier in previous corresponding
seasons, as reflected in FAA records.
(d) After accommodating Carrier
requests for retiming of Slots, the FAA
will assign 50% of the new Slots and
returned Slots to New Entrants, unless
requests by New Entrants constitute
fewer than 50% of available Slots.
(e) With the remaining available Slots,
if all requests for Slots under this
section cannot be accommodated, the
FAA will give priority to requests to
introduce year-round service or to
extend an existing operation to a yearround operation.
(f) Thereafter, the FAA will assign
Slots considering all relevant factors
including:
(1) The effective period of operation;
(2) The extent and regularity of
intended use of a Slot;
(3) Schedule constraints of Carriers
requesting Slots.
§ 93.167
slots.
Reversion and withdrawal of
(a) This section does not apply to
Unrestricted Slots.
(b) A Carrier’s Common Slots or
Limited Slots at JFK or Newark revert
back to the FAA 30 days after the
Carrier has ceased all operations at the
respective airport(s) for any reasons
other than a strike.
(c) The FAA may retime, withdraw, or
temporarily suspend Common Slots and
Limited Slots at any time to fulfill
operational needs.
(d) Common Slots and Limited Slots
will be withdrawn in accordance with
the priority list established under
§ 93.173 and international obligations.
(e) Except as otherwise provided in
paragraph (a) of this section, the FAA
will notify an affected Carrier before
withdrawing or temporarily suspending
a Common Slot or Limited Slot and
specify the date by which operations
under the Common Slot or Limited Slot
must cease. The FAA will provide at
least 45 days’ notice unless otherwise
required by operational needs.
(f) Any Common Slot or Limited Slot
that is temporarily withdrawn under
this paragraph will be reassigned, if at
all, only to the Carrier from which it
was withdrawn, provided the Carrier
continues to conduct Scheduled
Operations at the respective airport.
§ 93.168
Sublease and transfer of slots.
(a) A Carrier may sublease its Slots to
another Carrier in accordance with this
section and subject to the provisions of
the Carrier’s lease agreement with the
FAA.
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29643
(b) A Carrier must provide notice to
the FAA to sublease a Slot. Such notice
must contain: the Slot number and time,
effective dates and, if appropriate, the
duration of the lease. The Carrier may
also provide the FAA with a minimum
bid price.
(c) The FAA will post a notice of the
offer to sublease the Slot and relevant
details on the FAA Web site at https://
www.faa.gov. An opening date, closing
date and time by which bids must be
received will be provided.
(d) Upon consummation of the
transaction, written evidence of each
Carrier’s consent to sublease must be
provided to the FAA, as well as all bids
received and the terms of the sublease,
including but not limited to:
(1) The names of all bidders and all
parties to the transaction;
(2) The offered and final length of the
sublease;
(3) The consideration offered by all
bidders and provided by the sublessee.
(e) The Slot may not be used until the
conditions of paragraph (d) of this
section have been met, and the FAA
provides notice of its approval of the
sublease.
(f) Slots may be transferred among a
U.S. Air Carrier and another Carrier that
conducts operations at JFK or Newark
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
and the FAA must confirm and approve
these transfers in writing prior to the
effective date of the transaction.
However, the FAA will approve
transfers under this paragraph up to five
business days after the actual operation
to accommodate operational disruptions
that occur on the same day of the
scheduled operation. The FAA Vice
President, System Operations Services
is the final decision-maker for any
determinations under this section.
(g) A Carrier wishing to sublease a
Slot via an FAA auction, rather than
pursuant to this section, may do so. The
Carrier shall retain the proceeds and the
Slot shall retain the same designation
that it had prior to the Carrier placing
it up for auction.
§ 93.169
One-for-one trade of slots.
(a) A Carrier may trade a Slot with
another Carrier on a one-for-one basis.
(b) Written evidence of each Carrier’s
consent to the trade must be provided
to the FAA.
(c) Each recipient of the trade may not
use the acquired Slot until written
confirmation has been received from the
FAA.
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(d) Carriers participating in a one-forone trade must certify to the FAA that
no consideration or promise of
consideration was provided by either
party to the trade.
§ 93.170
Minimum usage requirements.
(a) This section does not apply to
Unrestricted Slots.
(b) Any Common Slot or Limited Slot
included in a summer or winter season
schedule approved by the FAA that is
not used at least 80 percent of the time
during the period for which it is
assigned will be withdrawn by the FAA.
(c) Paragraph (b) of this section does
not apply to the first 90-day period after
assignment of a Common Slot or
Limited Slot through a sublease.
(d) The FAA may waive the
requirements of paragraph (b) of this
section in the event of a highly unusual
and unpredictable condition which is
beyond the control of the Carrier and
which affects Carrier operations for a
period of five or more consecutive days.
Examples of conditions which could
justify a waiver under this paragraph are
weather conditions that result in the
restricted operation of the airport for an
extended period of time or the
grounding of an aircraft type.
(e) The FAA will treat as used any
Common Slot or Limited Slot held by a
Carrier on Thanksgiving Day, the Friday
following Thanksgiving Day, and the
period from December 24 through the
first Sunday of January.
cprice-sewell on PROD1PC69 with PROPOSALS3
§ 93.171
Unscheduled operations.
(a) During the hours of 6 a.m. through
10:59 p.m. Eastern Time, no person may
operate an aircraft other than a
helicopter to or from JFK or Newark
unless he or she has received, for that
Unscheduled Operation, a Reservation
that is assigned by the Airport
Reservation Office (ARO) or in the case
of Public Charters, in accordance with
the procedures in paragraph (d) of this
section. Requests for Reservations will
be accepted through the e-CVRS
beginning 72 hours prior to the
proposed time of arrival to or departure
from JFK or Newark. Additional
information on procedures for obtaining
a Reservation is available on the Internet
at https://www.fly.faa.gov/ecvrs.
(b) Reservations, including those
assigned to Public Charter operations
under paragraph (d) of this section, will
be available to be assigned by the ARO
on a 30-minute basis as follows:
(1) At JFK, two Reservations per hour
between 6 a.m. and 1:59 p.m. and
between 10 p.m. and 10:59 p.m. and one
Reservation per hour between 2 p.m.
and 10:59 p.m.
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(2) At Newark, two Reservations per
hour between 6 a.m. and 11:59 a.m. and
between 10 p.m. and 10:59 p.m. and one
Reservation per hour between 12 noon
and 9:59 p.m.
(c) The ARO will receive and process
all Reservation requests for unscheduled
arrivals and departures at JFK and
Newark. 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) One Reservation per hour will be
available for assignment to Public
Charter operations prior to the 72-hour
Reservation window in paragraph (a) of
this section. No more than 25 percent of
the Reservation available from 12 noon
through 9:59 p.m. will be made
available to Public Charter operations
under this paragraph.
(1) The Public Charter operator may
request a reservation up to six months
in advance of the date of the flight
operation. Reservation requests should
be submitted to Federal Aviation
Administration, Slot Administration
Office, AGC–200, 800 Independence
Avenue, SW., Washington, DC 20591.
Submissions may be made via facsimile
to (202) 267–7277 or by e-mail to: 7awa-slotadmin@faa.gov.
(2) The Public Charter operator must
certify that its prospectus has been
accepted by the Department of
Transportation in accordance with 14
CFR part 380.
(3) The Public Charter operator must
identify the call sign/flight number or
aircraft registration number of the direct
Air Carrier, the date and time of the
proposed operation(s), the airport
served immediately prior to or after JFK
or Newark, aircraft type, and the nature
of the operation (e.g., ferry or
passenger). Any changes to an approved
Reservation must be approved in
advance by the Slot Administration
Office.
(4) If Reservations under paragraph
(d)(1) of this section have already been
assigned, the Public Charter Operator
may request a Reservation under
paragraph (a) of this section.
(e) The filing of a request for a
Reservation does not constitute the
filing of an IFR flight plan as required
by regulation. The IFR flight plan may
be filed only after the Reservation is
obtained, must include the Reservation
number in the ‘‘Remarks’’ section, and
must be filed in accordance with FAA
regulations and procedures.
(f) Air Traffic Control will
accommodate declared emergencies
without regard to Reservations. Nonemergency flights in direct support of
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national security, law enforcement,
military aircraft operations, or publicuse 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 https://www.fly.faa.gov/ecvrs.
(g) 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 unlikely, the FAA may
determine that additional Reservations
may be accommodated for a specific
time period. Unused Slots may also be
made available temporarily for
unscheduled operations. Reservations
for additional operations must be
obtained through the ARO.
(h) Reservations may not be bought,
sold or leased.
§ 93.172
Reporting requirements.
(a) No later than September 1 for the
summer scheduling season and
February 1 for the winter scheduling
season, each Carrier holding a Common
Slot or Limited Slot must submit an
interim report of Slot usage for each day
of the applicable scheduling season. No
later than 30 days after the last day of
the applicable scheduling season, each
Carrier holding a Common Slot or
Limited Slot must submit a final report
of the completed operations for each
day of the entire scheduling season.
(b) Such reports, in a format
acceptable to the FAA, must contain the
following information for each Common
Slot or Limited Slot:
(1) The Slot number, time, and arrival
or departure designation;
(2) The operating Carrier;
(3) The date and time of each of the
operations conducted pursuant to the
Slot, including the flight number and
origin/destination; and
(4) The aircraft type identifier.
(c) The FAA may withdraw the Slot
of any Carrier that does not meet the
reporting requirements of paragraph (a)
of this section.
§ 93.173
Administrative provisions.
(a) Each Slot shall be assigned a
number for administrative convenience.
(b) The FAA will assign priority
numbers by random lottery for Common
Slots and Limited Slots at JFK and
Newark. Each Common Slot and
Limited Slot will be assigned a
withdrawal priority number, and the 30minute time period for the Common
Slot or Limited Slot, frequency, and the
arrival or departure designation.
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(c) If the FAA determines that
operations need to be reduced for
operational reasons, the lowest assigned
priority number Common Slot or
Limited Slot will be the last withdrawn.
(d) Any Slot 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 Slots may be made available
for unscheduled operations on a nonpermanent basis and will be assigned
under the same procedures applicable to
other operating Reservations.
(e) All transactions under this subpart
must be in a written or electronic format
approved by the FAA.
Proposed Amendment—Alternative 2
3. Subparts N and O are added to read
as follows:
Subpart N—John F. Kennedy International
Airport Traffic Rules
Sec.
93.161 Applicability.
93.162 Definitions.
93.163 Slots for scheduled arrivals and
departures.
93.164 Categories of slots.
93.165 Initial assignment of slots.
93.166 Assignment of new or returned slots.
93.167 Reversion and Withdrawal of Slots.
93.168 Sublease and transfer of slots.
93.169 One-for-one trade of slots.
93.170 Minimum usage requirements.
93.171 Unscheduled operations.
93.172 Reporting requirements.
93.173 Administrative provisions.
Subpart O—Newark Liberty International
Airport Traffic Rules
93.181 Applicability.
93.182 Definitions.
93.183 Slots for scheduled arrivals and
departures.
93.184 Categories of slots.
93.185 Initial assignment of slots.
93.186 Assignment of new or returned slots.
93.187 Reversion and withdrawal of slots.
93.188 Sublease and transfer of slots.
93.189 One-for-one trade of slots.
93.190 Minimum usage requirements.
93.191 Unscheduled operations.
93.192 Reporting requirements.
93.193 Administrative provisions.
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§ 93.161
Applicability.
(a) This subpart prescribes the air
traffic rules for the arrival and departure
of aircraft used for scheduled and
unscheduled service, other than
helicopters, at John F. Kennedy
International Airport (JFK).
(b) This subpart also prescribes
procedures for the assignment, transfer,
sublease and withdrawal of Slots issued
by the FAA for scheduled operations at
JFK.
(c) The provisions of this subpart
apply to JFK during the hours of 6 a.m.
through 10:59 p.m., Eastern Time. No
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person shall operate any scheduled
arrival or departure into or out of JFK
during such hours without first
obtaining a Slot in accordance with this
subpart. No person shall conduct an
Unscheduled Operation to or from JFK
during such hours without first
obtaining a Reservation.
(d) A U.S. Air Carrier conducting
operations solely under another
Carrier’s marketing control with unified
inventory control shall not be
considered a separate Carrier for
purposes of this subpart.
(e) The Slots assigned under this
subpart terminate at 11 p.m. on March
30, 2019.
§ 93.162
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 JFK.
Baseline Operations are those
common slots held by a carrier on [final
rule effective date], that do not exceed
20 operations per day.
Carrier is a U.S or foreign air carrier
with authority to conduct scheduled
service under Parts 121, 129, or 135 of
this Chapter and the appropriate
economic authority for scheduled
service under 14 CFR chapter II and 49
U.S.C. chapter 411.
Common Slot (C-slot) is a slot that is
assigned by the FAA as a lease under its
cooperative agreement authority for the
length of this rule.
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 JFK and
other designated airports.
Limited Slot (L-slot) is a slot operated
every day, the lease for which must be
transferred to another carrier by the
holder of the limited slot as an
unrestricted slot.
New Entrant is any carrier that is
administratively allocated a total of 8 or
fewer slots at JFK during controlled
hours at any point during the duration
of the rule.
Public Charter is defined in 14 CFR
380.2 as a one-way or roundtrip charter
flight to be performed by one or more
direct air carriers that is arranged and
sponsored by a public charter operator.
Public Charter Operator is defined in
14 CFR 380.2 as a U.S. or foreign public
charter operator.
Reservation is an authorization
received by a carrier or other operator of
an aircraft, excluding helicopters, in
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29645
accordance with procedures established
by the FAA to operate an unscheduled
arrival or departure on a particular day
of the week during a specific 30-minute
period.
Scheduled Operation is the arrival or
departure segment of any operation
regularly conducted by a carrier
between JFK and another point regularly
served by that carrier.
Slot is the operational authority
assigned by the FAA to a carrier to
conduct one scheduled arrival or
departure operation at JFK on a
particular day of the week during a
specific 30-minute period.
Summer Scheduling Season begins on
the last Sunday of March.
Unrestricted Slot (U-slot) is a slot that
is awarded to another carrier by the
holder of a limited slot pursuant to the
mandatory lease transfer provisions of
this subpart.
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 JFK and
another service point. The following
types of carrier operations shall be
considered unscheduled operations for
the purposes of this subpart: public, ondemand, and other charter flights; hired
aircraft service; extra sections of
scheduled flights; ferry flights; and
other non-passenger flights.
Winter Scheduling Season begins on
the last Sunday in October.
§ 93.163 Slots for scheduled arrivals and
departures.
(a) During the hours of 6 a.m. through
10:59 p.m., Eastern Time, no person
shall operate any scheduled arrival or
departure into or out of JFK during such
hours without first obtaining a Slot in
accordance with this subpart.
(b) Except as otherwise established by
the FAA under paragraph (c) of this
section, the number of Slots shall be
limited to no more than eighty-one (81)
per hour at JFK. The number of Slots
may not exceed 44 in any 30-minute
period, and 81 in any 60-minute period.
The number of arrival and departure
Slots in any period may be adjusted by
the FAA as 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.
(c) Notwithstanding paragraph (b) of
this section, the Administrator may
increase the number of Slots based on
a review of the following:
(1) The number of delays;
(2) The length of delays;
(3) On-time arrivals and departures;
(4) The number of actual operations;
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(5) Runway utilization and capacity
plans; and
(6) Other factors relating to the
efficient management of the National
Airspace System.
cprice-sewell on PROD1PC69 with PROPOSALS3
§ 93.164
Categories of slots.
(a) General. Each Slot shall be
designated as a Common Slot, Limited
Slot or Unrestricted Slot and shall be
assigned to the Carrier under a lease
agreement. A lease for a Common or
Limited Slot shall be awarded via a
cooperative agreement. A lease for an
Unrestricted Slot shall be awarded via
an auction.
(b) Common Slots.
(1) All Slots within any Carrier’s
Baseline Operations, as determined on
[final rule effective date], shall be
designated as Common Slots.
(2) Twenty percent of the Slots at JFK
on [final rule effective date] not
otherwise designated as Common Slots
under paragraph (b) (1) of this section
shall be designated as Limited Slots. All
other Slots shall be designated as
Common Slots.
(c) Limited Slots. Those Slots assigned
to a Carrier subject to return to the FAA
under § 93.165(c) shall be designated as
Limited Slots until they are transferred
to another Carrier under those
provisions. A Carrier may continue to
use a Limited Slot that has reverted to
the FAA until reassigned to another
Carrier as an Unrestricted Slot.
(1) Each Carrier with a total number
of daily operations at JFK in excess of
its Baseline Operations will be notified
by [final rule effective date] how many
of its remaining Slots will be classified
as Limited Slots pursuant to paragraphs
(c)(2) and (3) of this section.
(2) A Carrier shall designate 50
percent of its Limited Slots. The Carrier
must notify the FAA of its
determination by [date 10 days after the
final rule effective date].
(3) The FAA will designate the
remaining Limited Slots, initially
excluding those hours in which two or
more Slots have been designated as
Limited Slots by the Carriers.
(4) No later than [date 20 days after
the final rule effective date], the FAA
will publish a list of all Limited Slots
and the dates upon which they will
expire.
(d) Unrestricted Slots. Unrestricted
Slots are Slots acquired by a Carrier
through a lease with the FAA awarded
via an auction. Unrestricted Slots are
not subject to withdrawal by the FAA.
§ 93.165
Initial assignment of slots.
(a) Except as provided for under
paragraphs (b) and (c) of this section,
any Carrier allocated operating rights
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under the Order limiting operations at
JFK, as evidenced by the FAA’s records,
will be assigned corresponding Slots in
30-minute periods consistent with the
limits under § 93.163(b), and its summer
and winter season schedules as
approved by the FAA. If necessary, the
FAA may utilize administrative
measures such as voluntary measures or
a lottery to re-time the assigned Slots
within the same hour to meet the 30minute limits under § 93.163(b). The
FAA Vice President, System Operations
Services, is the final decisionmaker for
determinations under this section.
(b) If a Carrier was allocated operating
rights under the Order limiting
operations at JFK but the operating
rights were held by another Carrier, then
the corresponding Slots will be assigned
to the Carrier that held the operating
rights for that period, as evidenced by
the FAA’s records.
(c) Starting [date 35 days after the
effective date] and every year thereafter
through 2013, one-fifth of the total
number of Limited Slots identified on
[date 20 days after the effective date]
shall revert to the FAA in accordance
with the schedule published under
§ 93.164(c)(4) and be auctioned as
Unrestricted Slots by the FAA and
subsequently transferred to another
Carrier, effective no later than the next
Summer Scheduling Season.
(1) The auction shall be blind, and
only cash may be bid.
(2) The holder of a Limited Slot may
not bid on its own Slots.
(3) The FAA shall pay to the holder
of the Limited Slot all proceeds from the
transaction following deduction of the
FAA’s expenses for conducting the
auction.
(4) The auction shall be conducted by
the FAA, which will dictate all
procedures related to the auction,
including but not limited to the
requirement that the Carrier may not
specify a minimum bid price.
(5) In the event no Carrier bids on the
Slot, the FAA will retire it until the next
auction.
(6) The Carrier holding a Limited Slot
will be allowed to use the Slot until the
first day of the next Summer Scheduling
Season.
§ 93.166
slots.
Assignment of new or returned
(a) This section describes the process
by which the FAA assigns new Slots, as
well as Slots returned to the FAA
pursuant to the provisions of § 93.170.
These Slots will be assigned by the FAA
to requesting Carriers for the Summer
and Winter Scheduling Seasons.
(b) Requests for the new Slots or
returned Slots or both must be
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submitted to the Federal Aviation
Administration, Slot Administration
Office, AGC–200, 800 Independence
Avenue, SW., Washington, DC 20591
(Facsimile: (202) 267–7277; e-mail: 7awa-slotadmin@faa.gov), by the
deadline as published by the FAA in a
Federal Register notice for each
Summer and Winter Scheduling Season.
The requesting Carrier must submit its
entire schedule at JFK for the particular
season, noting which requests are in
addition to, or changes from, the
previous corresponding season at the
respective airports.
(c) Before assigning new or returned
Slots under this section, the FAA will
first accommodate Carrier requests to retime Slots for operational reasons or to
bring the flight time closer to the time
originally requested by the applicant
Carrier in previous corresponding
seasons, as reflected in FAA records.
(d) After accommodating Carrier
requests for re-timing of Slots, the FAA
will assign 50% of the new Slots and
returned Slots to New Entrants, unless
requests by New Entrants constitute
fewer than 50% of available Slots.
(e) With the remaining available Slots,
if all requests for Slots under this
section cannot be accommodated, the
FAA will give priority to requests to
introduce year-round service or to
extend an existing operation to a yearround operation.
(f) Thereafter, the FAA will assign
Slots considering all relevant factors
including:
(1) The effective period of operation;
(2) The extent and regularity of
intended use of a Slot;
(3) Schedule constraints of Carriers
requesting Slots.
§ 93.167
slots.
Reversion and withdrawal of
(a) This section does not apply to
Unrestricted Slots.
(b) A Carrier’s Common Slots or
Limited Slots revert back to the FAA 30
days after the Carrier has ceased all
operations at JFK for any reasons other
than a strike.
(c) The FAA may re-time, withdraw,
or temporarily suspend Common Slots
and Limited Slots at any time to fulfill
operational needs.
(d) Common Slots and Limited Slots
will be withdrawn in accordance with
the priority list established under
§ 93.173 and international obligations.
(e) Except as otherwise provided in
paragraph (a) of this section, the FAA
will notify an affected Carrier before
withdrawing or temporarily suspending
a Common Slot or Limited Slot and
specify the date by which operations
under the Common Slot or Limited Slot
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must cease. The FAA will provide at
least 45 days’ notice unless otherwise
required by operational needs.
(f) Any Common Slot or Limited Slot
that is temporarily withdrawn under
this paragraph will be reassigned, if at
all, only to the Carrier from which it
was withdrawn, provided the Carrier
continues to conduct Scheduled
Operations at JFK.
cprice-sewell on PROD1PC69 with PROPOSALS3
§ 93.168
Sublease and transfer of slots.
(a) A Carrier may sublease its Slots to
another Carrier in accordance with this
section and subject to the provisions of
the Carrier’s lease agreement with the
FAA.
(b) A Carrier must provide notice to
the FAA to sublease a Slot. Such notice
must contain: the Slot number and time,
effective dates and, if appropriate, the
duration of the lease. The Carrier may
also provide the FAA with a minimum
bid price.
(c) The FAA will post a notice of the
offer to sublease the Slot and relevant
details on the FAA Web site at https://
www.faa.gov. An opening date, closing
date and time by which bids must be
received will be provided.
(d) Upon consummation of the
transaction, written evidence of each
Carrier’s consent to sublease must be
provided to the FAA, as well as all bids
received and the terms of the sublease,
including but not limited to:
(1) The names of all bidders and all
parties to the transaction;
(2) The offered and final length of the
sublease;
(3) The consideration offered by all
bidders and provided by the sublessee.
(e) The Slot may not be used until the
conditions of paragraph (d) of this
section have been met, and the FAA
provides notice of its approval of the
sublease.
(f) Slots may be transferred among a
U.S. Air Carrier and another Carrier that
conducts operations at JFK 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 and the FAA
must confirm and approve these
transfers in writing prior to the effective
date of the transaction. However, the
FAA will approve transfers under this
paragraph up to five business days after
the actual operation to accommodate
operational disruptions that occur on
the same day of the scheduled
operation. The FAA Vice President,
System Operations Services, is the final
decision-maker for any determinations
under this section.
(g) A Carrier wishing to sublease a
Slot via an FAA auction, rather than
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Jkt 214001
pursuant to this section, may do so. The
Carrier shall retain the proceeds and the
Slot shall retain the same designation
that it had prior to the Carrier placing
it up for auction.
§ 93.169
One-for-one trade of slots.
(a) A Carrier may trade a Slot with
another Carrier on a one-for-one basis.
(b) Written evidence of each Carrier’s
consent to the trade must be provided
to the FAA.
(c) Each recipient of the trade may not
use the acquired Slot until written
confirmation has been received from the
FAA.
(d) Carriers participating in a one-forone trade must certify to the FAA that
no consideration or promise of
consideration was provided by either
party to the trade.
§ 93.170
Minimum usage requirements.
(a) This section does not apply to
Unrestricted Slots.
(b) Any Common Slot or Limited Slot
included in a summer or winter season
schedule approved by the FAA that is
not used at least 80 percent of the time
during the period for which it is
assigned will be withdrawn by the FAA.
(c) Paragraph (b) of this section does
not apply to the first 90-day period after
assignment of a Common Slot or
Limited Slot through a sublease.
(d) The FAA may waive the
requirements of paragraph (b) of this
section in the event of a highly unusual
and unpredictable condition which is
beyond the control of the Carrier and
which affects Carrier operations for a
period of five or more consecutive days.
Examples of conditions which could
justify a waiver under this paragraph are
weather conditions that result in the
restricted operation of the airport for an
extended period of time or the
grounding of an aircraft type.
(e) The FAA will treat as used any
Common Slot or Limited Slot held by a
Carrier on Thanksgiving Day, the Friday
following Thanksgiving Day, and the
period from December 24 through the
first Sunday of January.
§ 93.171
Unscheduled operations.
(a) During the hours of 6 a.m. through
10:59 p.m., Eastern Time, no person
may operate an aircraft other than a
helicopter to or from JFK unless he or
she has received, for that Unscheduled
Operation, a Reservation that is assigned
by the Airport Reservation Office (ARO)
or in the case of public charters, in
accordance with the procedures in
paragraph (d) of this section. Requests
for Reservations will be accepted
through the e-CVRS beginning 72 hours
prior to the proposed time of arrival to
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29647
or departure from JFK. Additional
information on procedures for obtaining
a Reservation is available on the Internet
at https://www.fly.faa.gov/ecvrs.
(b) Reservations, including those
assigned to Public Charter operations
under paragraph (d) of this section, will
be available to be assigned by the ARO
on a 30-minute basis at JFK as follows:
(1) Two Reservations per hour
between 6 a.m. and 1:59 p.m. and
between 10 p.m. and 10:59 p.m.
(2) One Reservation per hour between
2 p.m. and 10:59 p.m.
(c) The ARO will receive and process
all Reservation requests for unscheduled
arrivals and departures at JFK.
Reservations are assigned on a ‘‘firstcome, 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) One Reservation per hour will be
available for assignment to Public
Charter operations prior to the 72-hour
Reservation window in paragraph (a) of
this section. No more than 25 percent of
the reservations from 12 noon through
9:59 p.m. will be made available for
Public Charter operations under this
paragraph.
(1) The Public Charter Operator may
request a reservation up to six months
in advance of date of the flight
operation. Reservation requests should
be submitted to Federal Aviation
Administration, Slot Administration
Office, AGC–200, 800 Independence
Avenue, SW., Washington, DC 20591.
Submissions may be made via facsimile
to (202) 267–7277 or by e-mail to:
7–awa–slotadmin@faa.gov.
(2) The Public Charter operator must
certify that its prospectus has been
accepted by the Department of
Transportation in accordance with 14
CFR part 380.
(3) The Public Charter operator must
identify the call sign/flight number or
aircraft registration number of the direct
Air Carrier, the date and time of the
proposed operations(s), the airport
served immediately prior to or after JFK,
aircraft type, and the nature of the
operations (e.g., ferry, passenger). Any
changes to an approved Reservation
must be approved in advance by the
Slot Administration Office.
(4) If Reservations under paragraph
(d)(1) of this section have already been
assigned, the Public Charter Operator
may request a Reservation under
paragraph (a) of this section.
(e) The filing of a request for a
Reservation does not constitute the
filing of an IFR flight plan as required
by regulation. The IFR flight plan may
be filed only after the Reservation is
obtained, must include the Reservation
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number in the ‘‘Remarks’’ section, and
must be filed in accordance with FAA
regulations and procedures.
(f) Air Traffic Control will
accommodate declared emergencies
without regard to Reservations. Nonemergency flights in direct support of
national security, law enforcement,
military aircraft operations, or publicuse 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 https://www.fly.faa.gov/ecvrs.
(g) 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 unlikely, the FAA may
determine that additional Reservations
may be accommodated for a specific
time period. Unused Slots may also be
made available temporarily for
unscheduled operations. Reservations
for additional operations must be
obtained through the ARO.
(h) Reservations may not be bought,
sold or leased.
cprice-sewell on PROD1PC69 with PROPOSALS3
§ 93.172
Reporting requirements.
(a) No later than September 1 for the
Summer Scheduling season and
February 1 for the Winter Scheduling
Season, each Carrier holding a Common
Slot or Limited Slot must submit an
interim report of Slot usage for each day
of the applicable scheduling season. No
later than 30 days after the last day of
the applicable scheduling season, each
Carrier holding a Common Slot or
Limited Slot must submit a final report
of the completed operations for each
day of the entire scheduling season.
(b) Such reports, in a format
acceptable to the FAA, must contain the
following information for each Common
Slot or Limited Slot:
(1) The Slot number, time, and arrival
or departure designation;
(2) The operating Carrier;
(3) The date and time of each of the
operations conducted pursuant to the
Slot, including the flight number and
origin/destination; and
(4) The aircraft type identifier.
(c) The FAA may withdraw the Slot
of any Carrier that does not meet the
reporting requirements of paragraph (a)
of this section.
§ 93.173
Administrative provisions.
(a) Each Slot shall be assigned a
number for administrative convenience.
(b) The FAA will assign priority
numbers by random lottery for Common
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Slots and Limited Slots at JFK. Each
Common Slot and Limited Slot will be
assigned a withdrawal priority number,
and the 30-minute time period for the
Common Slot or Limited Slot,
frequency, and the arrival or departure
designation.
(c) If the FAA determines that
operations need to be reduced for
operational reasons, the lowest assigned
priority number Common Slot or
Limited Slot will be the last withdrawn.
(d) Any Slot 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 Slots may be made available
for unscheduled operations on a nonpermanent basis and will be assigned
under the same procedures applicable to
other operating Reservations.
(e) All transactions under this subpart
must be in a written or electronic format
approved by the FAA.
Subpart O—Newark Liberty
International Airport Traffic Rules
§ 93.181
Applicability.
(a) This subpart prescribes the air
traffic rules for the arrival and departure
of aircraft used for scheduled and
unscheduled service, other than
helicopters, at Newark Liberty
International Airport (Newark).
(b) This subpart also prescribes
procedures for the assignment, transfer,
sublease and withdrawal of Slots issued
by the FAA for scheduled operations at
Newark.
(c) The provisions of this subpart
apply to Newark during the hours of 6
a.m. through 10:59 p.m., Eastern Time.
No person shall operate any scheduled
arrival or departure into or out of
Newark during such hours without first
obtaining a Slot in accordance with this
subpart. No person shall conduct an
Unscheduled Operation to or from
Newark during such hours without first
obtaining a Reservation.
(d) A U.S. Air Carrier conducting
operations solely under anther Carrier’s
marketing control with unified
inventory control shall not be
considered as a separate Carrier for
purposes of this rule.
(e) The Slots assigned under this
subpart terminate at 11 p.m. on March
30, 2019.
§ 93.182
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
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the administration of reservations for
unscheduled operations at Newark.
Baseline Operations are those
Common Slots held by a carrier on [final
rule effective date], that do not exceed
20 operations per day.
Carrier is a U.S or foreign air carrier
with authority to conduct scheduled
service under Parts 121, 129, or 135 of
this Chapter and the appropriate
economic authority for scheduled
service under 14 CFR chapter II and 49
U.S.C. chapter 411.
Common Slot (C-slot) is a slot that is
assigned by the FAA as a lease under its
cooperative agreement authority for the
length of this rule.
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 Newark and
other designated airports.
Limited Slot (L-slot) is a slot operated
every day, the lease for which expires
prior to the expiration of this rule for
subsequent award by the FAA as an
unrestricted slot.
New Entrant is any carrier that is
administratively allocated a total of 8 or
fewer slots at either JFK or Newark
during controlled hours at any point
during the duration of the rule.
Public Charter is defined in 14 CFR
380.2 as a one-way or roundtrip charter
flight to be performed by one or more
direct air carriers that is arranged and
sponsored by a public charter operator.
Public Charter Operator is defined in
14 CFR 380.2 as a U.S. or foreign public
charter operator.
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 on a particular day
of the week during a specific 30-minute
period.
Scheduled Operation is the arrival or
departure segment of any operation
regularly conducted by a carrier
between Newark and another point
regularly served by that carrier.
Slot is the operational authority
assigned by the FAA to a carrier to
conduct one scheduled arrival or
departure operation at Newark on a
particular day of the week during a
specific 30-minute period.
Summer Scheduling Season begins on
the last Sunday of March.
Unrestricted Slot (U-slot) is a slot that
is awarded to a carrier by the FAA via
the auction of a lease.
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,
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excluding helicopters, between Newark
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.
Winter Scheduling Season begins on
the last Sunday in October.
§ 93.183 Slots for scheduled arrivals and
departures.
(a) During the hours of 6 a.m. through
10:59 p.m., Eastern Time, no person
shall operate any scheduled arrival or
departure into or out of Newark without
first obtaining a Slot in accordance with
this subpart.
(b) Except as otherwise established by
the FAA under paragraph (c) of this
section, the number of Slots shall be
limited to no more than eighty-one (81)
period at Newark. The number of Slots
may not exceed 44 in any 30-minute
period and 81 in any 60-minute period.
The number of arrival and departure
Slots in any period may be adjusted by
the FAA as 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.
(c) Notwithstanding paragraph (b) of
this section, the Administrator may
increase the number of Slots based on
a review of the following:
(1) The number of delays;
(2) The length of delays;
(3) On-time arrivals and departures;
(4) The number of actual operations;
(5) Runway utilization and capacity
plans; and
(6) Other factors relating to the
efficient management of the National
Airspace System.
cprice-sewell on PROD1PC69 with PROPOSALS3
§ 93.184
Categories of slots.
(a) General. Each Slot shall be
designated as a Common Slot, Limited
Slot or Unrestricted Slot and shall be
assigned to the Carrier under a lease
agreement. A lease for a Common or
Limited Slot shall be awarded via a
cooperative agreement. A lease for an
Unrestricted Slot shall be awarded via
an auction.
(b) Common Slots.
(1) All Slots within any Carrier’s
Baseline Operations, as determined on
[final rule effective date], shall be
designated as Common Slots.
(2) Ten percent of the Slots at Newark
on [final rule effective date] not
otherwise designated as Common Slots
under paragraph (b) (1) of this section
shall be designated as Limited Slots. All
other Slots shall be designated as
Common Slots.
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(c) Limited Slots. Those Slots assigned
to a Carrier subject to return to the FAA
under § 93.185(c) shall be designated as
Limited Slots until the date of their
reassignment by the FAA as
Unrestricted Slots. A Carrier may
continue to use a Limited Slot that has
reverted to the FAA until reassigned to
another Carrier as an Unrestricted Slot.
(1) Each Carrier with a total number
of daily operations at Newark in excess
of its Baseline Operations will be
notified by [final rule effective date]
how many of its remaining Slots will be
designated as Limited Slots pursuant to
paragraphs (c)(2) and (3) of this section.
(2) A Carrier shall designate 50
percent of its Limited Slots. The Carrier
must notify the FAA of its
determination by [date 10 days after the
final rule effective date].
(3) The FAA will designate the
remaining Limited Slots, initially
excluding those hours in which two or
more Slots have been classified as
Limited Slots by the Carriers.
(4) No later than [date 20 days after
the final rule effective date], the FAA
will publish a list of all Limited Slots
and the dates upon which they will
expire.
(d) Unrestricted Slots. Unrestricted
Slots are Slots acquired by a Carrier
through a lease with the FAA awarded
via an auction. Unrestricted Slots are
not subject to withdrawal by the FAA.
§ 93.185
Initial assignment of slots.
(a) Except as provided for under
paragraphs (b) and (c) of this section,
any Carrier allocated operating rights
under the Order limiting operations at
Newark as evidenced by the FAA’s
records, will be assigned corresponding
Slots in 30-minute periods consistent
with the limits under § 93.183(b) and its
summer and winter season schedules as
approved by the FAA. If necessary, the
FAA may utilize administrative
measures such as voluntary measures or
a lottery to re-time the assigned Slots
within the same hour to meet the 30minute limits under § 93.183(b). 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 the Order limiting
operations at Newark, but the operating
rights were held by another Carrier, then
the corresponding Slots will be assigned
to the Carrier that held the operating
rights for that period, as evidenced by
the FAA’s records.
(c) Starting [date 35 days after the
effective date] and every year thereafter
through 2013, one-fifth of the total
number of Limited Slots shall revert to
the FAA in accordance with the
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29649
schedule published under § 93.164(c)(4)
and be auctioned as Unrestricted Slots
by the FAA. Any Slot receiving no
responsive bids will be retired until the
next auction. An affected Carrier will be
allowed to use the Limited Slot until the
effective date of an award to a Carrier
as an Unrestricted Slot.
§ 93.186
slots.
Assignment of new or returned
(a) This section describes the process
by which the FAA assigns new Slots, as
well as Slots returned to the FAA
pursuant to the provisions of § 93.190.
These Slots will be assigned by the FAA
to requesting Carriers for the Summer
and Winter Scheduling Seasons.
(b) Requests for the new Slots or
returned Slots or both must be
submitted to the Federal Aviation
Administration, Slot Administration
Office, AGC–200, 800 Independence
Avenue, SW., Washington, DC 20591
(Facsimile: (202) 267–7277; e-mail: 7awa-slotadmin@faa.gov), by the
deadline as published by the FAA in a
Federal Register notice for each
Summer and Winter Scheduling Season.
The requesting Carrier must submit its
entire schedule at Newark for the
particular season, noting which requests
are in addition to, or changes from, the
previous corresponding season at the
respective airports.
(c) Before assigning new or returned
Slots under this section, the FAA will
first accommodate Carrier requests to
retime Slots for operational reasons or to
bring the flight time closer to the time
originally requested by the applicant
Carrier in previous corresponding
seasons, as reflected in FAA records.
(d) After accommodating Carrier
requests for retiming of Slots, the FAA
will assign 50% of the new Slots and
returned Slots to New Entrants, unless
requests by New Entrants constitute
fewer than 50% of available Slots.
(e) With the remaining available Slots,
if all requests for Slots under this
section cannot be accommodated, the
FAA will give priority to requests to
introduce year-round service or to
extend an existing operation to a yearround operation.
(f) Thereafter, the FAA will assign
Slots considering all relevant factors
including:
(1) The effective period of operation;
(2) The extent and regularity of
intended use of a Slot;
(3) Schedule constraints of Carriers
requesting Slots.
§ 93.187
slots.
Reversion and withdrawal of
(a) This section does not apply to
Unrestricted Slots.
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(b) A Carrier’s Common Slots or
Limited Slots revert back to the FAA 30
days after the Carrier has ceased all
operations at Newark for any reasons
other than a strike.
(c) The FAA may retime, withdraw, or
temporarily suspend Common Slots and
Limited Slots at any time to fulfill
operational needs.
(d) Common Slots and Limited Slots
will be withdrawn in accordance with
the priority list established under
§ 93.193 and international obligations.
(e) Except as otherwise provided in
paragraph (a) of this section, the FAA
will notify an affected Carrier before
withdrawing or temporarily suspending
a Common Slot or Limited Slot and
specify the date by which operations
under the Common Slot or Limited Slot
must cease. The FAA will provide at
least 45 days’ notice unless otherwise
required by operational needs.
(f) Any Common Slot or Limited Slot
that is temporarily withdrawn under
this paragraph will be reassigned, if at
all, only to the Carrier from which it
was withdrawn, provided the Carrier
continues to conduct Scheduled
Operations at the airport.
cprice-sewell on PROD1PC69 with PROPOSALS3
§ 93.188
Sublease and transfer of slots.
(a) A Carrier may sublease its Slots to
another Carrier in accordance with this
section and subject to the provisions of
the Carrier’s lease agreement with the
FAA.
(b) A Carrier must provide notice to
the FAA to sublease a Slot. Such notice
must contain: the Slot number and time,
effective dates and, if appropriate, the
duration of the lease. The Carrier may
also provide the FAA with a minimum
bid price.
(c) The FAA will post a notice of the
offer to sublease the Slot and relevant
details on the FAA Web site at https://
www.faa.gov. An opening date, closing
date and time by which bids must be
received will be provided.
(d) Upon consummation of the
transaction, written evidence of each
Carrier’s consent to sublease must be
provided to the FAA, as well as all bids
received and the terms of the sublease,
including but not limited to:
(1) The names of all bidders and all
parties to the transaction;
(2) The offered and final lengths of the
sublease;
(3) The consideration offered by all
bidders and provided by the sublessee.
(e) The Slot may not be used until the
conditions of paragraph (d) of this
section have been met, and the FAA
provides notice of its approval of the
sublease.
(f) Slots may be transferred among a
U.S. Air Carrier and another Carrier that
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15:15 May 20, 2008
Jkt 214001
conducts operations at Newark 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
and the FAA must confirm and approve
these transfers in writing prior to the
effective date of the transaction.
However, the FAA will approve
transfers under this paragraph up to five
business days after the actual operation
to accommodate operational disruptions
that occur on the same day of the
scheduled operation. The FAA Vice
President, System Operations Services
is the final decision-maker for any
determinations under this section.
(g) A Carrier wishing to sublease a
Slot via an FAA auction, rather than
pursuant to this section, may do so. The
Carrier shall retain the proceeds and the
Slot shall retain the same designation
that it had prior to the Carrier placing
it up for auction.
§ 93.189
One-for-one trade of slots.
(a) A Carrier may trade a Slot with
another Carrier on a one-for-one basis.
(b) Written evidence of each Carrier’s
consent to the trade must be provided
to the FAA.
(c) Each recipient of the trade may not
use the acquired Slot until written
confirmation has been received from the
FAA.
(d) Carriers participating in a one-forone trade must certify to the FAA that
no consideration or promise of
consideration was provided by either
party to the trade.
§ 93.190
Minimum usage requirements.
(a) This section does not apply to
Unrestricted Slots.
(b) Any Common Slot or Limited Slot
included in a summer or winter season
schedule approved by the FAA that is
not used at least 80 percent of the time
during the period for which it is
assigned will be withdrawn by the FAA.
(c) Paragraph (b) of this section does
not apply to the first 90-day period after
assignment of a Common Slot or
Limited Slot through a sublease.
(d) The FAA may waive the
requirements of paragraph (b) of this
section in the event of a highly unusual
and unpredictable condition which is
beyond the control of the Carrier and
which affects Carrier operations for a
period of five or more consecutive days.
Examples of conditions which could
justify a waiver under this paragraph are
weather conditions that result in the
restricted operation of the airport for an
extended period of time or the
grounding of an aircraft type.
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(e) The FAA will treat as used any
Common Slot or Limited Slot held by a
Carrier on Thanksgiving Day, the Friday
following Thanksgiving Day, and the
period from December 24 through the
first Sunday of January.
§ 93.191
Unscheduled operations.
(a) During the hours of 6 a.m. through
10:59 p.m. Eastern Time, no person may
operate an aircraft other than a
helicopter to or from Newark unless he
or she has received, for that
Unscheduled Operation, a Reservation
that is assigned by the Airport
Reservation Office (ARO) or in the case
of Public Charters, in accordance with
the procedures in paragraph (d) of this
section. Requests for Reservations will
be accepted through the e-CVRS
beginning 72 hours prior to the
proposed time of arrival to or departure
from Newark. Additional information
on procedures for obtaining a
Reservation is available on the Internet
at https://www.fly.faa.gov/ecvrs.
(b) Reservations, including those
assigned to Public Charter operations
under paragraph (d) of this section, will
be available to be assigned by the ARO
on a 30-minute basis at Newark as
follows:
(1) Two Reservations per hour
between 6 a.m. and 11:59 a.m. and
between 10 p.m. and 10:59 p.m.
(2) One Reservation per hour between
12 noon and 9:59 p.m.
(c) The ARO will receive and process
all Reservation requests for unscheduled
arrivals and departures at Newark.
Reservations are assigned on a ‘‘firstcome, 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) One Reservation per hour will be
available for assignment to Public
Charter operations prior to the 72-hour
Reservation window in paragraph (a) of
this section. No more than 25 percent of
the reservations available from 12 noon
through 9:59 p.m. will be made
available for Public Charter operations
under this paragraph.
(1) The Public Charter Operator may
request a reservation up to six months
in advance of the date of the flight
operation. Reservation requests should
be submitted to Federal Aviation
Administration, Slot Administration
Office, AGC–200, 800 Independence
Avenue, SW., Washington, DC 20591.
Submissions may be made via facsimile
to (202) 267–7277 or by e-mail to: 7awa-slotadmin@faa.gov.
(2) The Public Charter operator must
certify that its prospectus has been
accepted by the Department of
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Transportation in accordance with 14
CFR part 380.
(3) The Public Charter operator must
identify the call sign/flight number or
aircraft registration number of the direct
Air Carrier, the date and time of the
proposed operation(s), the airport
served immediately prior to or after
Newark, aircraft type, and the nature of
the operation (e.g., ferry, passenger).
Any changes to an approved
Reservation must be approved in
advance by the Slot Administration
Office.
(4) If Reservations under paragraph
(d)(1) of this section have already been
assigned, the Public Charter operator
may request a Reservation under
paragraph (a) of this section.
(e) The filing of a request for a
Reservation does not constitute the
filing of an IFR flight plan as required
by regulation. The IFR flight plan may
be filed only after the Reservation is
obtained, must include the Reservation
number in the ‘‘Remarks’’ section, and
must be filed in accordance with FAA
regulations and procedures.
(f) Air Traffic Control will
accommodate declared emergencies
without regard to Reservations. Nonemergency flights in direct support of
national security, law enforcement,
military aircraft operations, or publicuse 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 https://www.fly.faa.gov/ecvrs.
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15:15 May 20, 2008
Jkt 214001
(g) 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 unlikely, the FAA may
determine that additional Reservations
may be accommodated for a specific
time period. Unused Slots may also be
made available temporarily for
unscheduled operations. Reservations
for additional operations must be
obtained through the ARO.
(h) Reservations may not be bought,
sold or leased.
§ 93.192
Reporting requirements.
(a) No later than September 1 for the
Summer Scheduling Season and
February 1 for the Winter Scheduling
Season, each Carrier holding a Common
Slot or Limited Slot must submit an
interim report of Slot usage for each day
of the applicable scheduling season. No
later than 30 days after the last day of
the applicable scheduling season, each
Carrier holding a Common Slot or
Limited Slot must submit a final report
of the completed operations for each
day of the entire scheduling season.
(b) Such reports, in a format
acceptable to the FAA, must contain the
following information for each Common
Slot or Limited Slot:
(1) The Slot number, time, and arrival
or departure designation;
(2) The operating Carrier;
(3) The date and time of each of the
operations conducted pursuant to the
Slot, including the flight number and
origin/destination; and
(4) The aircraft type identifier.
PO 00000
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29651
(c) The FAA may withdraw the Slot
of any Carrier that does not meet the
reporting requirements of paragraph (a)
of this section.
§ 93.193
Administrative provisions.
(a) Each Slot shall be assigned a
number for administrative convenience.
(b) The FAA will assign priority
numbers by random lottery for Common
Slots and Limited Slots at Newark. Each
Common Slot and Limited Slot will be
assigned a withdrawal priority number,
and the 30-minute time period for the
Common Slot or Limited Slot,
frequency, and the arrival or departure
designation.
(c) If the FAA determines that
operations need to be reduced for
operational reasons, the lowest assigned
priority number Common Slot or
Limited Slot will be the last withdrawn.
(d) Any Slot 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 Slots may be made available
for unscheduled operations on a nonpermanent basis and will be assigned
under the same procedures applicable to
other operating Reservations.
(e) All transactions under this subpart
must be in a written or electronic format
approved by the FAA.
Issued in Washington, DC, on May 15,
2008.
Nan Shellabarger,
Director of Aviation Policy and Plans.
[FR Doc. 08–1271 Filed 5–16–08; 12:00 pm]
BILLING CODE 4910–13–P
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Agencies
[Federal Register Volume 73, Number 99 (Wednesday, May 21, 2008)]
[Proposed Rules]
[Pages 29626-29651]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 08-1271]
[[Page 29625]]
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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 John F. Kennedy International Airport
and Newark Liberty International Airport; Proposed Rule
Federal Register / Vol. 73, No. 99 / Wednesday, May 21, 2008 /
Proposed Rules
[[Page 29626]]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 93
[Docket No. FAA-2008-0517; Notice No. 08-05]
RIN 2120-AJ28
Congestion Management Rule for John F. Kennedy International
Airport and Newark Liberty International Airport
AGENCY: Federal Aviation Administration (FAA).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: The FAA proposes to establish procedures to address congestion
in the New York City area by assigning slots at John F. Kennedy (JFK)
and Newark Liberty (Newark) International Airports in a way that allows
carriers to respond to market forces to drive efficient airline
behavior. This proposal is a companion to a separate rulemaking
initiative addressing congestion mitigation at New York's LaGuardia
airport. Today's proposal is similar to what we have proposed for
LaGuardia airport, but it takes into consideration the characteristics
of both JFK and Newark, including the large number of international
flights at these airports and our international obligations. The FAA
proposes to extend the caps on the operations at the two airports,
assign to existing operators the majority of slots at the airports, and
create a market by annually auctioning off a limited number of slots in
each of the first five years of this rule. The FAA is proposing two
alternatives.
Under the first alternative, the assignment of slots at JFK and
Newark would be conducted through a uniform mechanism. The FAA would
auction off a portion of the slots and would use the proceeds to
mitigate congestion and delay in the New York City area. Under the
second alternative, the same auction procedure would apply at Newark as
under the first alternative but at JFK the auction proceeds would go to
the carrier holding the slot rather than to the FAA. For both
alternatives, this proposal also contains provisions for minimum usage,
capping unscheduled operations, and withdrawal for operational need.
The FAA proposes to sunset the rule in ten years.
DATES: Send your comments on or before July 21, 2008.
ADDRESSES: You may send comments identified by Docket Number FAA-2008-
0517 using any of the following methods:
Federal eRulemaking Portal: Go to https://
www.regulations.gov and follow the online instructions for sending your
comments electronically.
Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation, 1200 New Jersey Avenue, SE., Room W12-
140, West Building Ground Floor, Washington, DC 20590-0001.
Hand Delivery or Courier: Bring comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
Fax: Fax comments to Docket Operations at 202-493-2251.
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
https://www.regulations.gov, including any personal information you
provide. Using the search function of our docket Web site, anyone can
find and read the electronic form of all comments received into any of
our dockets, including the name of the individual sending the comment
(or signing the comment for an association, business, labor union,
etc.). You may review the Department of Transportation's complete
Privacy Act Statement in the Federal Register published on April 11,
2000 (65 FR 19477-78) or you may visit https://DocketsInfo.dot.gov.
Docket: To read background documents or comments received, go to
https://www.regulations.gov at any time and follow the online
instructions for accessing the docket. Or, go to Docket Operations in
Room W12-140 of the West Building Ground Floor at 1200 New Jersey
Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: For technical questions regarding this
rulemaking, contact: Molly W. Smith, Federal Aviation Administration,
800 Independence Avenue, SW., Washington, DC 20591; telephone (202)
267-3275; e-mail molly.w.smith@faa.gov. For legal questions concerning
this rulemaking, contact: Rebecca MacPherson, FAA Office of the Chief
Counsel, 800 Independence Ave., SW., Washington, DC 20591; telephone
(202) 267-3073; e-mail rebecca.macpherson@faa.gov.
SUPPLEMENTARY INFORMATION: Later in this preamble, under the Additional
Information section, we discuss how you can comment on this proposal
and how we will handle your comments. Included in this discussion is
related information about the docket and the handling of proprietary or
confidential business information. We also discuss how you can get a
copy of this proposal and related rulemaking documents.
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.
I. Background
A. History of Congestion Management Initiatives at JFK
JFK has historically been a constrained airport. From 1969 through
2006, the FAA managed congestion there during the five hours of peak
transatlantic demand--3 p.m. through 7:59 p.m., Eastern Time under the
High Density Rule (HDR). 14 CFR part 93 subparts K and S.
In 1994, Congress began to relax the HDR by authorizing the
Secretary of Transportation, upon making a public interest finding, to
grant exemptions from the HDR to enable new entrant carriers \1\ to
provide air transportation at certain slot-controlled airports,
including JFK. 49 U.S.C. 41714. In 1999, pursuant to this authority,
the Department issued an order that authorized new flight operations at
JFK by granting 75 slot exemptions to JetBlue Airways (JetBlue), a new
entrant carrier, to be phased in over a five-year period.\2\ The order
stated that JetBlue would operate the majority of its flights outside
the five HDR slot-controlled hours.
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\1\ The term ``new entrant carrier'' was defined as ``an air
carrier that does not hold a slot at the airport concerned and has
never sold or given up a slot at that airport after December 16,
1985, and a limited incumbent carrier.'' 49 U.S.C. 41714(h)(3).
\2\ Application of New Air Corporation for Exemption from 14 CFR
part 93, Subparts K and S of 49 U.S.C. 41714(c), Order 99-9-11
(September 16, 1999).
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In 2000, the Wendell H. Ford Aviation Investment and Reform Act for
the 21st Century (AIR-21), Public Law No. 106-181, ended the
application of the HDR at JFK, effective January 1, 2007. 49 U.S.C.
41715(a)(2).\3\ AIR-21 also
[[Page 29627]]
directed the Secretary to grant exemptions from the HDR's flight
restrictions for operations by new entrant carriers or for flights
serving Small-Hub and Non-Hub airports as long as the aircraft used had
less than 71 seats. Additionally, it preserved the FAA's authority to
impose flight restrictions by stating 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).
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\3\ The phase-out also included LaGuardia, as of January 1,
2007. 49 U.S.C. 41715(a)(2). The HDR at Chicago O'Hare International
Airport was directed to be phased out by July 1, 2002. 49 U.S.C.
41715(a)(1).
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Until recently, most operations at JFK took place during relatively
pronounced arrival and departure banks corresponding to the operating
windows of transatlantic flights. Maximum efficiency at JFK has been
achieved with the use of either two arrival runways and one departure
runway, or two departure runways and one arrival runway. Air traffic
controllers have employed that configuration to facilitate the historic
transatlantic traffic flows.
Since the spring of 2006, U.S. air carriers serving JFK have
significantly increased their domestic scheduled operations throughout
the day. Most of the increase has come from the two largest operators
at the airport, Delta Airlines (Delta) and JetBlue. The new traffic
patterns affect the efficient use of JFK's four runways, impeding the
use of the three-runway configurations (two arrival/one departure, or
one arrival/two departure) for maximum utility of active runways.
As a result of the increase in scheduled operations at JFK, the
summer 2007 demand exceeded the airport's capacity during many periods
of the day. During morning hours, volume-related delays were routine
from 7 a.m. through 9 a.m. The afternoon and evening demand exceeded
the airport's optimal capacity until about 10 p.m. This prevented the
airport from having an evening period to recover from congestion-
induced delays.
During fiscal year 2007, the average daily operations at JFK
increased 21 percent over fiscal year 2006. Corresponding to the
increased operations, on-time performance and other delay metrics have
declined year over year. The on-time performance at JFK, which is
defined as the arrival at the gate within 15 minutes of the scheduled
time, declined from 68.5 percent in fiscal year 2006 to 62.19 percent
in fiscal year 2007. On-time arrivals during the peak travel months of
June, July and August declined from 63.37 percent in 2006 to 58.89
percent in 2007, while on-time departures declined from 67.49 percent
to 59.89 percent. For the entire fiscal year, the average daily arrival
delays exceeding one hour increased by 87 percent over fiscal year 2006
levels. Taxi out delays, which measure the time that aircraft wait
prior to departing the runway, increased by 15 percent. Taxi out delays
in the evening departure periods frequently exceeded an hour in
duration.
The increased congestion and associated delays at JFK impact other
airports in the region and the National Airspace System (NAS). The
airspace redesign for the New York/New Jersey/Philadelphia metropolitan
area, approved in 2007, documents the costs and far-reaching impacts of
delays that originate from this area. The delays that cascade from this
area throughout the NAS are costly and far-reaching, as detailed in the
recently approved airspace redesign plan for the New York/New Jersey/
Philadelphia metropolitan area.\4\ The FAA has taken steps to implement
airspace redesign, which will provide efficiency and congestion relief
by, among other things, opening additional arrival and departure routes
in the New York area. Further, the FAA, working with stakeholders, is
implementing short-term initiatives to improve the efficiency of
airport operations and air traffic control, particularly during severe
weather. Additionally, the FAA has increased the use of a second
departure runway at JFK when conditions permit. However, none of these
initiatives will offer an immediate or complete solution.
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\4\ See: https://www.faa.gov/airports_airtraffic/air_traffic/
nas_redesign/regional_guidance/eastern_reg/nynjphl_redesign/.
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On September 24, 2007, the FAA re-designated JFK as a Level 2
Schedules Facilitated Airport \5\ for the summer 2008 scheduling season
in accordance with the International Air Transport Association
Worldwide Scheduling Guidelines (IATA WSG). 72 FR 54317. Under the WSG,
carriers must inform the coordinator of projected operations at a Level
2 airport for the next scheduling season. When submitting the required
information, the airlines expressed their intent to add new flights at
JFK during peak and off-peak hours for summer 2008.
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\5\ An airport, where demand is approaching capacity and a more
formal level of cooperation is required to avoid the circumstances
of over-capacity, is designated an IATA Level 2 Schedules
Facilitated Airport. At a Level 2-designated airport, a schedules
facilitator seeks the cooperation and voluntary agreement of
airlines serving the airport to avoid congestion.
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Also in September 2007, the Administrator determined that JFK was a
severely congested airport and that a scheduling reduction meeting,
under 49 U.S.C. 41722, was necessary to discuss flight reductions with
U.S. air carriers to reduce over-scheduling and flight delays at JFK
during peak operating hours. On October 12, 2007, the Secretary of
Transportation determined that a scheduling reduction meeting was
necessary to meet a serious transportation need or to achieve an
important public benefit. On October 22, the FAA opened a docket for
information on the establishment of flight reduction targets at JFK
during peak hours. 72 FR 59579. In order to address increases in demand
by foreign air carriers, the FAA determined that a Level 3 Coordinated
Airport declaration was warranted on October 25, 2007.\6\ 72 FR 60710.
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\6\ Where demand for an airport exceeds capacity, voluntary
cooperation is unlikely to resolve the problem, and short term
capacity enhancements are not available, the airport is designated
an IATA Level 3 Coordinated Airport.
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In order to address increases in demand by domestic carriers, the
FAA convened the scheduling reduction meeting with U.S. carrier
participants on October 23-24, 2007. Subsequent in-person and
telephonic meetings took place as well. At the sessions, American
Airlines, Delta and JetBlue, which together account for three-quarters
of the total operations at JFK, withdrew the schedule increases each
had proposed for summer 2008 during the airport's 3 p.m. to 7:59 p.m.
peak hours. They also adjusted the timing of operations during those
hours and others to smooth out peaks. Other airlines also agreed to
retime peak operations. The FAA offered capacity during other hours to
carriers who re-timed operations or added additional flights.
As a result of the agreements reached at that meeting and other
discussions held with carriers regarding their projected summer 2008
schedules, the FAA issued a temporary Order limiting scheduled
operations at JFK, effective 6 a.m., Eastern Time, March 30, 2008,
through 11:59 p.m., Eastern Time, October 24, 2009, to U.S. and foreign
air carriers serving the airport and generally capping scheduled
operations at 81 per hour. 73 FR 3519 (Jan. 18, 2008), as amended 73 FR
8737 (Feb. 14, 2008). This Order temporarily responds to the carriers'
desire to regularly schedule flights above the airport's capacity
during peak operating hours, relieves the substantial inconvenience to
the traveling public caused by excessive
[[Page 29628]]
congestion-related flight delays at the airport (which rippled through
the NAS), reduces the average length of delays, and provides for a more
efficient use of airspace.
B. History of Congestion Management at Newark
Newark was once subject to the HDR although the FAA suspended the
application of the rule at Newark due to sufficient airport capacity to
meet demand. 35 FR 16591 (Oct. 24, 1970). Over the past several years,
however, Newark has grown to be one of the most delay-prone airports in
the country. Current and anticipated demand during peak hours
approaches or exceeds the average runway capacity, resulting in volume-
related delays. These delays are aggravated by weather or other adverse
operating conditions.
Comparing FY 2007 to FY 2000, average daily operations at the
airport decreased about 3 percent (from 1,253 to 1,219) but performance
nevertheless suffered. The percent of on-time gate arrivals decreased
from 70.66 percent to 61.71 percent; arrival delays greater than one
hour increased from 54 to 93 per day on average.
In 2007, for example, Newark's on-time arrival performance was 61.8
percent, the second worst among the top 35 airports. Based on ``the
airport's performance metrics and imbalance between air traffic control
(ATC) capacity and demand that is expected to continue in the near
term,'' the FAA designated Newark a Level 2 IATA Schedules Facilitated
Airport for the summer 2008 scheduling season.\7\ The FAA explained
that ``increased levels of air traffic operations, congestion and delay
at [both JFK and Newark] airports and a tangible decrease in
operational performance'' warranted this designation.\8\ The FAA found
the morning hours of 7 a.m. to 10 a.m. and the afternoon and evening
hours of 2 p.m. to 10 p.m. were particularly constrained, but that
capacity otherwise was available for retiming of flights or new
operations.
---------------------------------------------------------------------------
\7\ 72 FR 54317 (Sept. 24, 2007).
\8\ Id.
---------------------------------------------------------------------------
The FAA modeled the proposed summer 2008 schedule requests against
Newark's average runway capacity, and delay projections for the summer
of 2008 indicated a potential increase of almost 50 percent. The FAA
also discussed carriers' future schedule plans at Newark and asked
carriers to consider scheduling flights at times where there was
available capacity. It was clear that some carriers intended to proceed
with their plans to begin operations according to their proposed
schedules during the busiest hours, regardless of the potential impact
on delay. Based on the requested schedules for Newark and anticipated
additional demand for Newark due to the operating limits underway at
JFK, the FAA determined that the anticipated summer 2008 demand would
overtax Newark's capacity, warranting a Level 3 Coordinated Airport
designation. 72 FR 73418 (Dec. 27, 2007). After the designation, a
series of discussions with the FAA led some carriers, including the hub
carrier, Continental, to move some of their historic flights from the
most oversubscribed hours. The movement of these flights tended to
smooth the scheduling peaks and valleys at Newark.
The information provided by the carrier for the summer 2008
scheduling season reflected a projected increase in flight schedules
during the summer of 2008, especially during the peak hours. U.S. and
foreign carriers had planned about 100 new operations per day at
Newark, many during the afternoon and early evening hours for the
summer of 2008.\9\ That number of new flights, along with proposed
retiming of historic flights into busier time periods, would have
caused massive delays, because they would have exceeded the airport's
optimal rate of handling flights over multiple, consecutive hours. For
several consecutive hours, the number of hourly arrivals and departures
would have reached the upper 80s to the mid-90s. These operations would
have significantly exceeded the airport's average capacity of 83 total
operations over the 12-month period ending August 2007. These
additional flights would have caused a spike in congestion and delays
at Newark and would also have had an adverse effect on other airports
in the New York region and on the NAS.
---------------------------------------------------------------------------
\9\ Requests for additional flights or retiming of flights into
peak periods were received after the FAA's announced schedule
submission deadline of October 11, 2007. These requests were
accommodated only if there was available capacity remaining after
consideration of historic operations and on-time requests.
---------------------------------------------------------------------------
Consequently, on March 18, 2008, the FAA proposed to place
temporary caps on peak hour operations at Newark to mitigate persistent
congestion and delays at the airport.\10\ 73 FR 14552. The cap would
limit scheduled operations during constrained hours to an average of 81
per hour.\11\ The FAA stated that it identified Newark's average
capacity by considering the airport's capacity to be ``the higher value
of either the aircraft throughput at the airport in a given hour or the
number of arrivals and departures that ATC personnel identified as
achievable in that hour.'' 73 FR 14552, 14554. The measurement
reflected ``the airport's demonstrated and potential performance over
time under actual meteorological and operational conditions.'' Id. The
FAA committed to closely monitoring the gains in efficiency and delay
reductions from implementing the airspace redesign and other air
traffic control or airport operational changes to ensure that the
scheduling limits reflect the available capacity.
---------------------------------------------------------------------------
\10\ 73 FR 14552 (March 18, 2008).
\11\ The appendix to the order included a few operations for
summer 2008 above the 81 per hour limit.
---------------------------------------------------------------------------
The FAA has adopted its March 18, 2008, proposal to impose a
temporary cap on scheduled operations at Newark. The cap takes effect
30 days after publication and expires 11:59 p.m. Eastern Time, October
24, 2009. The cap limits peak hour scheduled operations to an average
of 81 per hour, except as provided in the appendix to the Order, and
total scheduled and unscheduled operations to an average of 83. As
indicated in the proposed order, the FAA intends to use the hours with
scheduled operations below the limit of 81 for delay mitigation and
would lease new capacity over 81 pursuant to an auction.
C. New York Aviation Rulemaking Committee
In addition to the regulatory initiatives discussed above, on
September 25, 2007, the Acting FAA Administrator established an
Aviation Rulemaking Committee (ARC) to explore various options,
including market-based mechanisms, for addressing airspace congestion
in the New York area. The ARC was comprised of officials from the FAA
and the Office of the Secretary of Transportation (OST), the Port
Authority of New York and New Jersey (Port Authority), representatives
of carriers and operators serving JFK, Newark, LaGuardia, and Teterboro
airports, airport and aviation industry trade associations, and
consumer groups.
By design, the ARC provided opportunity for extensive input by all
stakeholders, having members from major air carriers in the United
States and their trade organizations (the Air Transport Association,
the Regional Airline Association, the Air Carrier Association of
America, the National Air Carrier Association), foreign carriers and
their worldwide trade organization (IATA), the Port Authority, and the
Airports Council International-North America. Through the ARC process,
these stakeholders played a key role in
[[Page 29629]]
exploring ideas to address congestion and ensuring that any actions
contemplated by the Department and the FAA would be fully informed. The
ARC worked throughout the fall and submitted a report to the Secretary,
dated December 13, 2007, discussing its findings. A copy of the ARC
Report may be found at: https://www.dot.gov/affairs/FinalARCReport.pdf.
II. Discussion of Proposed Rule
Today's proposal would replace the Orders imposing operating
limitations at JFK and Newark and establish a rule limiting unscheduled
operations at those airports. The Orders are scheduled to expire on
October 24, 2009. If adopted, the proposed rule would apply to all
operations at JFK and Newark between the hours of 6 a.m. and 10:59
p.m., every day. For reasons set out in the Newark and JFK Orders,
discussed above, the FAA has determined that capacity is constrained at
these airports for this entire period.
The following table briefly summarizes today's proposal and
identifies differences between the two options.
Proposed Regulation for JFK and Newark
----------------------------------------------------------------------------------------------------------------
JFK
Feature Newark -------------------------------------------------
Option 1 Option 2
----------------------------------------------------------------------------------------------------------------
Base Schedule........................ Seasonal schedule, as Seasonal schedule, as Same as Option 1.
approved by the FAA, approved by the FAA,
for summer 2008 and for summer 2008 and
winter 2008/2009. winter 2008/2009.
Slot................................. Defined as right to Defined as right to Same as Option 1.
land or depart (not land or depart (not
both) in a 30-minute both) in a 30-minute
time window. time window.
Number of Slots...................... 81/hour + 1 to 2 81/hour + 1 to 2....... Same as Option 1
unscheduled.
Slots definition..................... Common Slots: The Common Slots: the Common Slots: The
Baseline (up to 20 Baseline (up to 20 Baseline (up to 20
slots per carrier) slots per carrier) slots per carrier)
plus 90% of slots plus 90% of slots plus 80% of slots
above 20 have 10 year above 20 have 10 year above 20 would have 10
leases; Limited Slots: leases; Limited Slots: year leases; Limited
10% would have shorter 10% would have shorter Slots 20% would have
leases and be leases and be shorter leases and
auctioned over five auctioned over five then be reallocated
years (2% each) (after years (2% each) (after via auction over five
which they convert to which they convert to years (4%/yr).
Unrestricted Slots). Unrestricted Slots).
Slot Time of Day..................... 6:00 a.m. through 10:59 6:00 a.m. through 11:59 Same as Option 1.
p.m., everyday; no p.m., everyday; no
more than 81 in any more than 81 in any
one hour or 44 in any one hour or 44 in ay
half-hour. half-hour.
Mechanics............................ ``Fair'' initial ``Fair'' initial Same as Option 1.
distribution with half distribution with half
of slots with less of slots with less
than 10 years life than 10 years life
selected by carriers; selected by carriers;
the other half the other half
selected by FAA selected by FAA
according to specified according to specified
rules. rules.
Auction.............................. Limited Slots would be Limited Slots would be Same as Option 1.
auctioned among auctioned among
carriers. carriers.
Auction Proceeds..................... Auction funds to FAA to Auction funds to FAA to Auction funds (net of
defray costs of defray costs of auction costs) to
auction, then to NY auction, then to NY incumbent holder;
capacity/projects. capacity/projects. incumbent cannot bid
on own slots.
Use/Lose............................. Only on grandfathered Only on grandfathered As as Option 1.
slots as consideration slots as consideration
for slots. for slots.
Term................................. Program is through Program is through As as Option 1.
March 2019; slot lives March 2019; slot lives
are whatever are whatever
proportion of 10 years proportion of 10 years
remain upon remain upon
reallocation. reallocation.
Bidders.............................. Airlines............... Airlines............... As as Option 1.
Holders.............................. Holders of record (not Holders of record (not As as Option 1.
marketing carrier). marketing carrier).
New or returned capacity............. IATA WSG............... IATA WSG............... As as Option 1.
Secondary market..................... Transparent not blind: Transparent not blind: Same.
carrier notifies FAA carrier notifies FAA
of intent to sublease; of intent to sublease;
FAA makes slot FAA makes slot
availability known; availability known;
bilateral bilateral
negotiations; final negotiations; final
terms disclosed to OST terms disclosed to OST
for monitoring. for monitoring.
Logistical swaps of slots............ Permitted.............. Permitted.............. Same.
----------------------------------------------------------------------------------------------------------------
The rule would apply to carriers at JFK and Newark. A U.S. air
carrier conducting operations solely under another carrier's market
control with unified inventory control would not be considered a
separate carrier, an approach that is consistent with how carriers have
been treated historically under the various slot regimes. The same
would not be true for foreign air carriers. This difference in
treatment reflects the commercial realities of JFK and Newark where
there are foreign air carriers that share a common owner but hold out
service to the public as separate commercial entities. Treating foreign
air carriers with common ownership as separate carriers for purposes of
slot allocation is an accepted practice in the international arena. The
recent SNPRM on LaGuardia airport, as well as the LaGuardia Order,
treats carriers with common ownership as a single carrier.
[[Page 29630]]
As we have explained, we do not anticipate that airport and
airspace system improvements scheduled to come on line during the next
year and a half will be sufficient to meet the demand for flights at
either JFK or Newark for the foreseeable future. Therefore, if we let
the Orders expire according to their terms, we believe carriers will
once again schedule flights well in excess of the respective capacities
of both JFK and Newark and unscheduled operations would grow during
peak hours. Historic experience strongly suggests that congestion and
delays during peak operating hours would result, requiring the FAA to
step in and address unacceptable operational performance yet again.
Rather than taking repeated, piecemeal approaches to limit and
manage operations at JFK and Newark on a short-term basis, we believe
it is prudent to adopt a longer-term rule dealing with the congestion
and delays we expect to persist at those airports. The FAA's preference
in addressing congestion resulting from capacity shortfalls is to
expand the airport and airway system capacity and to increase the
efficient use of existing resources. This is by far the most effective
way to serve the traveling public and to promote a strong airport and
airway system. Although both the FAA and the Port Authority are working
to implement these capacity improvements, this rule would complement
those efforts and mitigate projected airport congestion.
We propose to treat the three major New York City-area airports
similarly by capping operations and introducing market mechanisms to
allocate some slots. While we have provided two different versions of
the draft regulatory text to present two alternatives for market
allocation, Newark would be treated the same under both versions.
Accordingly, all discussion of alternative 2 will be limited to JFK.
The FAA believes it is necessary to address congestion and delays
at LaGuardia, JFK, and Newark in a coordinated manner. Congestion and
delays at each of the three airports affect the other two airports as
well as the NAS as a whole. The airports are all located relatively
close to each other and consistently have been among the nation's most
delay-prone airports.
Excluding any one of the three major New York-area airports from
the imposition of caps would simply shift the problem to the non-slot
controlled airport, as it would become very attractive to carriers
wanting to start or add service in the New York market. The likely
result would be an overburdening of that airport and the system. We
propose to award capacity at JFK and Newark through mechanisms that
rely, in part, on the market. These mechanisms resemble those in the
proposal for LaGuardia Airport, but are modified to reflect the
respective characteristics of JFK and Newark.
Today's proposal will ensure that the scarce airspace resources are
used for operations by the carriers valuing the resources most highly.
Additionally, over the course of the ten-year life of the proposed
rule, we will monitor the need to maintain the caps and may increase
the number of scheduled operations in response to technological,
operational, or capacity plans or improvements or to other factors that
may warrant such action.
We note that both JFK and Newark are already capped under the
respective Orders at 81 scheduled operations per hour (except as
provided in the Appendices to the Orders). Today's proposal, if
adopted, will replace those Orders. The FAA believes the summer of 2007
served as a stark reminder that the demand for access to New York City
is exceptional and cannot be managed without these caps at an
acceptable level of delay.
The NPRM proposes to apply the limits of the recent JFK and Newark
Orders, except where the Administrator determines under Sec. 93.163 of
subpart N and Sec. 93.183 of subpart O that additional slots can be
accommodated. In addition, there would be no more than 44 slots in any
30-minute period at JFK and Newark, or more than 81 in a 60-minute
period. We have proposed to specify the 30- and 60-minute limitations
in addition to the hourly maximum to avoid excessive bunching of slots,
which can cause unnecessary delays. Section 93.163(d) of subpart N and
Sec. 93.183 of subpart O sets out the authority of the Administrator
to increase the number of slots as airport conditions warrant. No
additional rulemaking would be required for any increase.
JFK and Newark have similar demand profiles, with an early morning
peak that typically clears by mid-morning. Demand approaches capacity
in the early afternoon and typically continues until about 10 p.m.
Scheduled requests submitted by carriers to the FAA for summer 2008
showed marked increases throughout the day. Modeling and experience
demonstrate that delays grow exponentially and have a cascading effect
on airport operations and individual flights at the airport. As part of
the discussions with the carriers regarding summer 2008 schedules,
carriers decided to schedule flights at off-peak hours since the FAA
was unwilling to authorize new peak hour flights. Based on demand and
the modeling showing the potential for increased delays, the FAA
determined that the appropriate hours to limit flights would cover much
of the operating day.
The FAA proposes that the final rule, if adopted, would terminate
at 11 p.m. on March 30, 2019. This approach will allow for future
determinations by the FAA as to whether a cap is still needed and, if
so, whether changes are needed to more efficiently manage the scarce
resource. At present it is impossible to determine what changes in
business models may occur over the next ten years. In addition, full
implementation of the New York/New Jersey/Philadelphia Metropolitan
Area Airspace Redesign project and NextGen technologies are expected to
successfully impact delays and air traffic efficiency within the next
ten years, and we should not prejudge the market response. The FAA
plans to evaluate the effects of the slot program proposed today on the
distribution of slots and entry into JFK and Newark. The agency intends
to take this experience into account in all congestion management
activities.
III. Proposal for Efficient Allocation of Capacity at JFK and Newark
A. Need for More Efficient Allocation
Congress has directed the Department to place ``maximum reliance on
competitive market forces and on actual and potential competition.'' 49
U.S.C. 40101(a)(6). The ability of carriers to initiate or expand
service at the airport is hindered, in large part, by the imposition of
a cap. Accordingly, the FAA believes it must strike a balance between
(1) promoting competition and permitting access to new entrants and (2)
recognizing historical investments in the airport by carriers and the
need to provide continuity. It is not the role of the Government either
to dictate particular business models or to constrain a market and
provide no means for others to enter that limited market. Simply
imposing a cap and then doing nothing to ensure that there are
competitive market forces and actual and potential competition is
unacceptable.
Not only is the FAA required to assure the efficient use of the
NAS, but it must do so in a manner that does not penalize all potential
operators at the airport by effectively shutting them out of the
market. Accordingly, the FAA believes that it is well within the
agency's authority in 49 U.S.C. 40103 to
[[Page 29631]]
provide some mechanism for slot reallocation. Today's proposal attempts
to strike the appropriate balance by actively developing a market that
values the limited asset that the FAA created.
B. Authority To Assign Slots at JFK and Newark
The FAA has statutory authority to dispose of property. Because of
the congressional mandate in 49 U.S.C. 40101(a)(6) to rely to the
maximum extent possible on competitive market forces, the FAA is
tailoring its approach at the two airports. Today the agency is
requesting comment on an approach whereby the FAA would establish a cap
on operations and address, through a regulation, which slots would
revert to the FAA for reallocation but would use its transaction
authority to allow for reallocation of slots via a market-based
mechanism.
1. Authority To Determine the Best Use of the Airspace
The United States Government holds exclusive sovereignty over
United States airspace. 49 U.S.C. 40103. Citizens of the United States
have a public right of transit through navigable airspace, but the FAA
is authorized to assign the use of the airspace necessary to ensure the
efficient use of airspace. To the extent these needs can be met without
specifying which citizen may transit or reserve a particular segment of
airspace at a particular time, there was no need for the FAA to place
constraints such as slots on the use of the airspace--this remains the
case for the vast majority of the NAS.
As described above, however, at New York-area airports, in order to
ensure the efficient use of airspace, FAA has had to impose constraints
by assigning to carriers operational authority to conduct a scheduled
arrival or departure operation on a particular day of the week during a
specified 30-minute period. These reservations of airspace were called
slots under the HDR. After the FAA issued the ``buy/sell rule'', 14 CFR
part 93, subpart S, these slots were treated not only as property of
the United States Government, but also as if the carriers had a
property interest, albeit an interest that was heavily encumbered by
the restrictions imposed by the FAA. The nature of this property
interest, however, has always been somewhat unclear. To encourage the
most efficient use of constrained airspace, the FAA is clarifying the
proprietary interest that the FAA is willing to transfer to airlines
for a limited period of time. However, the FAA has determined that in
order to assure the efficient use of airspace, it cannot simply permit
those whom it grants authority to use the airspace to treat that
authority as their own; it is the United States Government that has
sovereignty over, and control of, the airspace. Such an approach would
not only ignore the inherently valuable nature of an airspace usage
assignment, but allows a select few to profit from a governmental
interest to the detriment of their competitors and the public as a
whole.
2. Authority To Enter Into Leases and Cooperative Agreements
The FAA has authority to lease real and personal property,
including intangible property, to others. 49 U.S.C. 106(l)(6) and
106(n). When disposing of an interest in property, however, the FAA
must receive adequate compensation. 49 U.S.C. 40110(a)(2).
Nevertheless, the FAA also has broad authority to enter into
cooperative agreements on such terms and conditions as the FAA may
consider appropriate. 49 U.S.C. 106(l)(6). Under the Federal Grants and
Cooperative Agreements Act, a cooperative agreement is to be used when
the principal purpose of the agreement is to transfer a thing of value
to a recipient, either public or private, to carry out a public purpose
of support or stimulation authorized by law, instead of acquiring (by
purchase, lease or barter) property or services for the direct use or
benefit of the agency, and there is substantial Federal involvement in
the activity.
Because we must balance the need to promote market forces with the
value of continuity and certainty of services, the FAA believes this is
the appropriate vehicle to use to transfer most of the slots as
described in the following options, for a ten-year period, to the
carriers that currently have operating authorizations at JFK and
Newark. Doing so will recognize these carriers' historical investment
in JFK and Newark, and the public interest that has been served by that
investment. In addition, it would prevent disruption to the national
air transportation system that might otherwise occur, allowing the
public to benefit from continued certainty of readily available air
transportation to and from these airports. There will, however, be
substantial ongoing Federal involvement with these slots, as the FAA
will retain ATC responsibilities for assuring that the use of these
segments of airspace for their specified times is done safely and with
maximum possible efficiency.\12\
---------------------------------------------------------------------------
\12\ Under the cooperative agreements FAA will be transferring a
leasehold interest in the slots, but FAA will not entirely dispose
of its property. Receiving compensation from these transfers is
antithetical to the definition of a cooperative agreement.
Nonetheless, to the degree that adequate compensation might be
considered required under 49 U.S.C. 40110(a)(2), the compensation
will be the carriers' agreement to be bound by the terms in the
cooperative agreement as well as FAA's recognition of the public
value received by the carriers' historical investment at JFK and
Newark.
---------------------------------------------------------------------------
C. Description of the Proposal
1. Categories of Slots
Today's proposal would create three categories of slots: Common
Slots, Limited Slots, and Unrestricted Slots. All three categories
would be held by carriers pursuant to a lease. While the overwhelming
percentage of slots will be Common Slots, many carriers would hold
slots in all three categories.
Common Slots would be assigned to carriers currently serving the
airports, and would be leased for the duration of the rule, i.e., ten
years. Once the rule sunsets, all interests would revert to the FAA,
assuming the rule is not replaced by a different regulatory regime.
Unlike slots allocated under the HDR and Operating Authorizations
allocated under the JFK and Newark Orders, carriers would be granted
clear property rights to Common Slots, allowing the slots to be
collateralized or subleased to another carrier for consideration.
However, Common Slots would be subject to reversion to the FAA under
the rule's minimum usage provision and could be withdrawn for
operational reasons.
Leases for Limited Slots would also be assigned by cooperative
agreements between the FAA and the carriers, but during each of the
first five years of the rule, a percentage of Limited Slots would be
made available by auction, at which point they would be converted to
Unrestricted Slots. Limited Slots would consist only of those slots
operated on a daily, year-round basis. Thus, slots used on a seasonal
or on a less-than-daily basis would not be designated as Limited Slots.
The FAA arrived at this tentative proposal because we seek to populate
the auction pool with those slots that are most economically valuable
to carriers seeking to serve New York City. Slots only available on
certain days or during one scheduling season would likely have value
only to small subsets of operators at any given time, thus limiting the
effectiveness of the market. Although slots would be awarded to
carriers through the auction for daily, year-round operation, the
[[Page 29632]]
acquiring carrier may sublet to other carriers any portion of that
award.
Under alternative 1, as currently proposed, 10 percent of the slots
above the baseline operations \13\ at both JFK and Newark would be
designated as Limited Slots, and thus could become Unrestricted Slots.
Under alternative 2, 20 percent of the slots at JFK above the baseline
operations would be designated as Limited Slots.
---------------------------------------------------------------------------
\13\ ``Baseline operations'', as defined in Sec. 93.162 and
Sec. 93.182, are up to 20 slots per day.
---------------------------------------------------------------------------
The FAA recognizes that the percentage of slots that the agency
proposes to reallocate represents a relatively small percentage of the
total number of slots at the two airports, particularly since each
carrier's first 20 slots, at each airport, will not be subject to
reversion. Accordingly, we specifically invite commenters to address
the desirability of assigning different percentages for both JFK and
Newark under both alternatives. For example, should we increase the
percentages to be auctioned under alternative 1 to 20 percent?
Additionally, the FAA seeks comment on whether the proposed percentages
are sufficient to ensure the opportunity for new entry and an efficient
allocation of slots among all carriers at the airports, such that each
slot is allocated to the user who values it the most highly. Increasing
the percentage of slots for auction would further facilitate the use of
market forces to allocate capacity, which is a major goal of this
rulemaking. On the other hand, lowering the number of slots withdrawn
for auction would be less disruptive to the carriers currently
operating at JFK and Newark, and would allow the agency to gain
experience with the auction process. The agency also seeks input on the
appropriate percentages of slots available for auction (both in total
and annually) sufficient to assure an efficient allocation of this
scarce resource. The final rule may provide for the reversion of a
higher or lower percentage of slots available for auction than we have
proposed under either alternative in this document.
Following a review of the comments and further consideration, we
may provide in a Final Rule for an auction of a greater percentage of a
carrier's Limited Slots. As with Common Slots, Limited Slots could be
withdrawn under the proposed minimum usage provision, or for
operational reasons.
Unrestricted Slots are slots that a carrier would lease directly
from the FAA under the auction processes under both alternatives. These
slots would not be withdrawn by the FAA either under the minimum usage
provisions or for operational reasons because carriers are required to
purchase them due to government action. As with Common Slots,
Unrestricted Slots would expire when the rule sunsets.
2. Initial Assignment of Capacity
Upon the rule's effective date, each carrier at JFK and Newark
would automatically be assigned up to 20 slots. Carriers whose approved
schedules under the JFK and Newark orders call for fewer than 20
operations would be assigned the same number of slots as they are
approved to operate under the respective orders. These slots would
constitute carrier's baseline operations. Slots above a carrier's
baseline operations would be designated as Common or Limited Slots as
described above. The FAA believes this is a rational approach to
assuring that no carrier is affected at a level that could seriously
disrupt its existing operations at the airports.
The number of slots to be designated as Limited Slots would be
calculated after subtracting the slots in each carrier's baseline
operations of up to 20 slots per day. In other words, if a carrier has
30 slots at JFK or Newark, 20 would be protected at that airport. Under
alternative 1, 10 percent of the remainder, or one slot, would become a
Limited Slot. Under alternative 2, 20 percent of the remainder, or two
slots, would become Limited Slots at JFK. Of course, most carriers hold
a number of slots that would not be evenly divisible by applying a 10-
or 20-percent rule. In such situations, the FAA would round the number
of slots to be designated as Limited Slots up or down to the nearest
whole number. As a practical matter, a carrier would have to have at
least 25 slots under alternative 1 or 23 slots under alternative 2,
before any would be designated as Limited Slots.
Given the seasonality of operations at these airports, both in
terms of differences between summer and winter operations and within-
season variability (which is much greater than at LaGuardia), the
determination of which carrier is entitled to which slot will be based
on the seasonal schedules approved by the FAA for summer 2008 and
winter 2008/2009. The FAA has tentatively decided to assign the
majority of slots at the airport to existing carriers in order to
minimize disruption and to recognize the carriers' historical
investments in both the airport and the community.
No later than the final rule's effective date, the FAA will inform
all carriers that will have Limited Slots of the number of Limited
Slots they will have. The designations as Limited Slots would be made
by both carriers and the FAA. Once the total number of Limited Slots is
communicated to each carrier, the carrier would designate 50 percent of
the total by notifying the FAA within 10 days which of the slots in its
slot pool it designates as Limited Slots. During the subsequent 10
days, the FAA would determine the remainder of slots that will be
designated as Limited Slots for each carrier. In making this
determination, the FAA would initially exclude from consideration slots
held during all hours where carriers have collectively determined two
or more slots should be Limited Slots. This approach will assure that
slots will be available for auction throughout the day. The time
windows for the Limited Slots would be distributed evenly over the day
to the extent possible.
Limited Slots would expire on designated dates and the duration of
each Limited Slot would be arranged to ensure that each affected
carrier's aggregate lease duration would be approximately equal to that
of the other affected carriers. The FAA would publish a list showing
the expiration date for each Limited Slot. In this way, all carriers
would know within 20 days of the rule's effective date what slots will
become available for purchase, and when.
A technical report more fully explaining how Limited Slots could be
categorized and allocated was prepared for the LaGuardia rulemaking. A
copy of that report has been placed in the docket for this rulemaking.
Commenters are encouraged to review and comment on that document.
3.Market-Based Award of Capacity
For the first five years of the rule, the FAA would conduct an
annual auction of Limited Slots. Section 93.165(c) of subpart N and
Sec. 93.185 of subpart O provides for the conversion of Limited Slots
to Unrestricted Slots. In accordance with the schedule published under
Sec. 93.164, one-fifth of the identified Limited Slots would revert to
the FAA for auction each year. Both the auction and secondary market
would be open to any carrier in order to avoid artificially restricting
any carrier's flexibility to acquire Unrestricted Slots for its
services, and to offer carriers wishing to initiate or expand
operations at JFK or Newark the full range of opportunities to acquire
slots.
Under alternative 1, the FAA is proposing to have 10 percent of the
carriers' slots above its baseline operations revert to the FAA over
the first five years of the rule. The FAA would auction the reverting
Limited
[[Page 29633]]
Slots, with FAA retaining proceeds of the sale. After recouping its
auction costs, the FAA plans to spend the remainder of the proceeds on
aviation congestion and delay management initiatives in the New York
City area.
Alternative 1 would make approximately 19 slots available for
auction at JFK and 18 slots available at Newark each year. Carriers
typically require pairs of slots, so alternative 1 would provide the
equivalent of approximately 9 round trips per day at both airports.
Under alternative 1, any carrier could bid on a slot in an auction that
is blind to the participants and it would be awarded in the form of an
Unrestricted Slot to the highest responsive bidder. The winning carrier
could commence operations using the newly acquired slot at the
beginning of the next summer scheduling season.
Alternative 2 proposes a different auction procedure for JFK that
would provide that the holder of a Limited Slot would retain the
proceeds of its sale in the auction. The only deduction from the sale
price would be for the FAA's costs associated with conducting the
auction.
Under this alternative, 20 percent of the carriers' slots above the
baseline operations at JFK would revert to the FAA over the first five
years of the rule. Therefore, approximately 179 slots would be
available at JFK, of which approximately 36 slots would be available
for auction each year. Carriers typically require pairs of slots, so
alternative 2 as proposed would provide the equivalent of 18 round
trips per day at JFK.
Under alternative 2, Unrestricted Slots would be awarded to the
highest responsive bidders in a blind auction. Only cash could be bid
for a slot. Since the goal of this rulemaking is to impose marketplace
discipline on the use of slots, the FAA has proposed certain
restrictions in alternative 2 to reduce anticompetitive behavior. For
example, carriers may not set minimum bids for the slots, so they
cannot impose a price so prohibitively high as to effectively preclude
any sales. For similar reasons, carriers would not be permitted to bid
on their own slots; otherwise, knowing that no actual payment would be
made, they could bid unrealistic amounts that no competitor could
match. With unrealistic bids, the fair market value of the slot would
not be identified.
Although the prohibition against a carrier bidding on its own slots
would mean that the carrier would no longer have that slot, any carrier
could negotiate for subleases or transfers from other carriers in the
secondary market or bid on other slots concurrently up for auction and
held by other carriers.\14\
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\14\ The FAA will attempt to auction an even number of slots
during each hour to provide an opportunity for a carrier to replace
a slot that it is auctioning. This may not always be possible.
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The FAA believes that the above procedures could not be applied at
Newark, because the current market profile there would diminish the
likelihood that the auction would bring the beneficial effects of
market forces that this proposal seeks to stimulate. At JFK (and at
LaGuardia), no one carrier provides the vast majority of slots that
would be up for auction, and any carrier that values a slot at a
particular time could have the opportunity to bid on an equivalent slot
that is held by another carrier. At Newark, however, Continental would
have approximately 174 of its slots up for auction if 20 percent of its
slots reverted to the FAA, but would be unable to bid on those slots or
on an equivalent number of slots because only 19 slots would be
available from any other carrier. Under this circumstance, the prices
paid for slots at Newark may not be reflective of their actual value,
with no meaningful slot market developing.
Among the specific questions on which we request comment is whether
under alternative 2, 20 percent of a carrier's slots above its baseline
at Newark should revert to the FAA for auction, even though the
reallocation mechanism would be the same as under the first
alternative. The agency also requests comment on whether alternative 2,
in its entirety, should be adopted at Newark.
The FAA considered using a transparent auction procedure for both
alternatives 1 and 2. The FAA believes that such transparency with
respect to identity of the bidders and their corresponding bids would
encourage gaming of the auction and significantly reduce the economic
value of the initial auction of slots. The FAA also believes that an
auction where the identity of the bidders is not known assists new
entrants seeking to enter the market. Therefore, under Alternative 1,
the identity of bidders would not be known to other bidders. Since the
FAA will accept the highest responsive bid, regardless of who that
bidder is, there is no need to keep bidders' identities from the
agency. Under Alternative 2, the identity of bidders would be known
only to the auctioneer, and then only for administrative purposes.
The FAA does not propose to auction slots after the first five
years because it believes that ideally slots should transfer from one
carrier to another through the secondary market. Not only will the
auctions help create a market for slots, but all carriers will be able
to assess the true market value of a slot. Armed with information on
how much a given slot is likely to be worth on the open market,
carriers (and their shareholders) will be in an even better position to
determine how best to use their slots based on commercial
considerations.
In the unlikely event no bids were received for a slot, we propose
that the FAA retire the slot until the next auction to assist in delay
mitigation. We request comment on whether, in the alternative, the
carrier that previously held the slot should retain the slot for use
until the next season.
4. New and Returned Capacity
As mentioned above, the FAA may raise the caps at JFK or Newark
based on an analysis of delay statistics, aircraft operations at the
respective airports, airport and airspace improvements, and other
pertinent factors. The agency believes there is unlikely to be much, if
any, returned capacity because carriers can sublease slots that they do
not utilize efficiently rather than surrender them to the FAA because
of inadequate usage. It is impossible at this time to estimate with any
certainty how much new capacity is likely to come online; but it is
unlikely there will be much new capacity in the near-term. Over a
longer period of time, the realization of new capacity is dependent
upon NextGen technologies. The efficiencies realized from the New York/
New Jersey/Philadelphia Metropolitan Area Airspace Redesign project
will benefit delay reduction and will not be used to add new capacity
at the airports.
The auction method proposed for LaGuardia, whereby all new and
returned capacity would be auctioned, maximizes the total number of
slots available for auction and would, in turn, increase the
efficiencies that the proposal is intended to generate. However, the
FAA believes the character of operations at JFK and Newark justifies a
different approach. At both airports, a substantial percentage of air
traffic is international. Historically, the FAA has used the IATA
Worldwide Scheduling Guidelines (WSG) to allocate slots for
international operations at slot constrained airports to the extent
they did not conflict with the rules imposing caps at the affected
airports.
The use of the WSG to assign new slots could affect carriers'
scheduling incentives and reduce the efficiency of the market for
existing slots. However, given the amount of new capacity that
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is likely to be available during the rule's timeframe, this effect is
likely to be small. Given the significant international presence at
both airports, the FAA proposes to follow procedures for assigning
newly available or returned slots that are largely derived from the
WSG. A new entrant would be defined as a carrier holding or operating
eight slots or fewer, assigned by the FAA, during the constrained
hours. The FAA understands that in order