03-27753. Policy and Procedures Concerning the Use of Airport Revenue: Petition of Sarasota-Manatee Airport Authority To Allow Use of Airport Revenue for Direct Subsidy of Air Carrier Operations

AGENCY:

Federal Aviation Administration (FAA), Department of Transportation (DOT).

ACTION:

Request for comments.

SUMMARY:

This notice requests comments on a petition to amend the current Policy and Procedures Concerning the Use of Airport Revenue (“Revenue Use Policy”). The petitioner Sarasota-Manatee Airport Authority is an airport operator subject to the provisions of the Revenue Use Policy. The petitioner requests that the FAA amend the Revenue Use Policy to permit certain airport operators to use airport revenue for the direct subsidy of commercial air carrier operations under specific and limited circumstances. Currently, the Revenue Use Policy prohibits all airport operators that are the recipient or subject of Federal assistance for airport improvements (“airport sponsors”) from using airport revenue to provide direct subsidies to air carriers for the provision of commercial service. However, the petitioner represents that some airport sponsors have been able to provide either financial subsidies or revenue guarantees to secure air carrier service. These airport sponsors have been general-purpose municipalities that can use funds from non-airport sources. On the other hand, those airport sponsors governed by a special-purpose airport authority cannot provide direct subsidies to air carriers, because all of their funds are considered airport revenue subject to the prohibitions in the Revenue Use Policy. The FAA is publishing for comment the petitioner's suggestion to consider limited use of airport revenue for direct subsidy of air carrier operations to be an “operating cost” of the airport under the Revenue Use Policy.

DATES:

Comments must be received by January 5, 2003. Comments that are received after that date will be considered only to the extent possible.

ADDRESSES:

The proposed policy amendment is available for public review in the Dockets Office, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. The documents have been filed under FAA Docket Number FAA-2003-16227. The Dockets Office is open between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Dockets Office is on the plaza level of the Nassif Building at the Department of Transportation at the above address. Also, you, may review public dockets on the Internet at http://www.dms.dot.gov. Comments on the proposed policy must be delivered or mailed, in duplicate, to: the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You must identify the docket number “FAA Docket No FAA-2003-16227” at the beginning of your comments. Commenters wishing FAA to acknowledge receipt of their comments must include a preaddressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2003-16277.” The postcard will be date stamped and mailed to the commenter. You may also submit comments through the Internet to http://www.dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

David Cushing, Airports Compliance Division, Office of Airport Safety and Standards, AAS-400, Federal Aviation Administration, 800 Independence Ave. SW., Washington, DC 20591, telephone [phone].

SUPPLEMENTARY INFORMATION:

The Revenue Use Policy (64 FR 7696); February 16, 1999), was adopted pursuant to the Federal Aviation Administration Authorization Act of 1994, and incorporates provisions of the Federal Aviation Administration Reauthorization Act of 1996. The Revenue Use Policy describes the scope of airport revenue that is subject to the Federal requirements on airport revenue use and lists those requirements. The Revenue Use Policy also describes prohibited and permitted uses of airport revenue and outlines the FAA's enforcement policies and procedures.

Governing Statutes and Policy

Title 49 U.S.C. 47107(b)(1) requires that grant agreements for airport development grants include an assurance that “the revenues generated by a public airport will be expended for the capital or operating costs of—(A) the airport; (B) the local airport system; or (C) other local facilities owned or operated by the airport owner or operator and directly and substantially related to the air transportation of passengers or property.” The same requirement is included in 49 U.S.C. 47133, which applies directly to any airport that has received Federal assistance.

Sections V and VI of the Revenue Use Policy, at 64 FR 7718-20, respectively list uses of airport revenue considered to be permitted or prohibited under the above statutes. The list of prohibited uses of airport revenue in section VI B. includes the following:

“12. Direct subsidy of air carrier operations. Direct subsidies are considered to be payments of airport funds to carriers for air service. Prohibited direct subsidies do not include waivers of fees or discounted landing or other fees during a promotional period. Any fee waiver or discount must be offered to all users of the airport, and provided to all users that are willing to provide the same type and level of new services consistent with the promotional offering. Likewise prohibited direct subsidies do not include support for air carrier advertising or marketing of new services to the extent permitted by section V of this Policy Statement.”

The petitioner requests that the FAA amend the above policy statement to permit the limited use of airport revenue for direct subsidies to air carriers, as stated below. The FAA invites comment on the petition and the justification for the requested change in the Revenue Use Policy.

Petitioner's Requested Policy Amendment To Allow Use of Airport Revenue for Direct Subsidy of Air Carrier Operations

The petitioner requests an amendment to the Revenue Use Policy that would “permit airports that have less than 0.25 percent of the total U.S. passenger boardings to use airport revenues at their discretion for subsidies to air carriers willing to provide service to those airports.” The petitioner suggests that the following conditions apply to an airport's use of the subsidy:

1. The community must have a minimum population of 200,000 residents in the airport's local county(s).

2. Airport revenues considered for use are not subject to the air carrier agreement in place and do not affect the rate-making methodology of the agreement.

3. Subsidy is limited to new service.

New service defined as follows:

• Air carrier not presently at the airport.
• City pair presently served by an air carrier at the applicant airport.

4. Subsidy cannot exceed 12 consecutive months to any air carrier.

5. Air carrier receiving the subsidy must be willing to provide the following:

• Daily scheduled service with a minimum seating capacity of 50 seats.
• Must commit to a minimum of twelve consecutive months of service.

6. Air carrier cannot utilize program more than once at the same airport.

Issued in Washington, DC on October 24, 2003.

David L. Bennett,

Director, Airport Safety and Standards.