03-2694. Policy Regarding Airport Rates and Charges

AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Advance notice of proposed policy, withdrawal.

SUMMARY:

The FAA is withdrawing a previously published Advance Notice of Proposed Policy that sought suggestions for replacement provisions for the portions of the Policy Statement Regarding Airport Rates and Charges that were vacated by the United States Court of Appeals for the District of Columbia Circuit. We are withdrawing the document because the Department of Transportation is considering similar rate and charge issues in its study of congestion pricing at airports.

FOR FURTHER INFORMATION CONTACT:

David L. Bennett, Director, Office of Airport Safety and Standards, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591, telephone [phone].

SUPPLEMENTARY INFORMATION:

Background

In June 1996, the FAA adopted a policy for evaluating the reasonableness of landing fees and other charges paid by air carriers to airports (61 FR 31994, June 21, 1996). The United States Court of Appeals for the District of Columbia Circuit partially vacated the policy, disallowing the portion dealing with historic cost valuation of airport property. Air Transport Association of America v. Department of Transportation, 119 F.3d 38 (D.C. Cir. 1997), as modified on rehearing, Order of Oct. 15, 1997. The Department of Transportation, Office of the Secretary, and the FAA published an Advance Notice of Proposed Policy seeking suggestions for replacement provisions of those portions the Court vacated (63 FR 43228, August 12, 1998).

The Department of Transportation is conducting studies related to the use of market pricing to manage demand at congested airports. Substantial overlap of the issues exists between the Department study and the published Advance Notice of Proposed Policy Regarding Airport Rates and Charges. To avoid duplication of effort and resources, and to allow more complete analysis of the issues, the FAA is withdrawing the Advance Notice of Proposed Policy Regarding Airport Rates and Charges.

Discussion of Comments

In response to the advance notice, we received comments from the Air Transport Association (ATA), Airports Council International “ North America (ACI-NA), National Business Travel Association, the Kauai Helicopter Operators Association, and 13 airports. The time period for comments and reply comments was extended at the request of ATA and ACI-NA.

Commenters offer their perspective on existing fee structures and methodologies, distinctions between fees charged for airfield versus non-airfield assets, and evidence of airport monopoly power. Comments from ATA, ACI-NA and Los Angeles World Airports include economic discussions from consulting economists. In general, air carriers favor historical cost accounting as the basis for aeronautical rates and charges, while airports favor basing rates and charges on fair market value of aeronautical assets. Air carriers express concern that any new policy should prevent airports from adding imputed interest to funds derived from airfield and other essential aeronautical facilities. Issues and recommendations presented by commenters will require further study, but will not be pursued within the course of the Policy Regarding Airport Rates and Charges addressed by this document, because the Department of Transportation will consider these and related issues in its study of congestion pricing at airports.

Conclusion

The Department of Transportation's current study of congestion pricing at airports will encompass many of the rates and charges issues addressed in the Advance Notice of Proposed Policy entitled Policy Regarding Airport Rates and Charges. Therefore, the FAA withdraws the Advance Notice of Proposed Policy published at 63 FR 43228 on August 12, 1998. Withdrawal of the Advance Notice of Proposed Policy does not preclude the FAA from issuing another notice on the subject matter in the future or commit the agency to any future course of action.

Issued in Washington, DC, on January 31, 2003.

Woodie Woodward,

Associate Administrator for Airports.