03-16227. Request for Public Comment on the Impact of Airlines Emerging From Bankruptcy on Hub Airports, Airport Systems and U.S. Capital Bond Markets

AGENCY:

Federal Aviation Administration, United States Department of Transportation.

ACTION:

Request for public comment.

SUMMARY:

The Department of Transportation is gathering information to examine the impact that airlines emerging from bankruptcy could have on hub airports, as well as the ramifications on airport systems and U.S. capital bond markets. We intend to meet with airport personnel and visit various airports to conduct studies and review available information that has been completed on recent airport finance developments. Specifically, we are trying to determine: (1) How airport's operations have been affected by air carriers going bankrupt and emerging from bankruptcy; (2) the financial impact that carriers' bankruptcies have had on airports; (3) the impact that carriers emerging from bankruptcy have had on markets for airport debt; and (4) actions that the federal government or airports themselves could take to ameliorate any significant financial disruption from airline bankruptcy.

DATES:

Comments should be received by July 28, 2003. Comments received after that will be considered to the extent possible.

ADDRESSES:

Comments should be sent to: Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 7th Street, SW., Washington DC, 20590-0001. You must identify the docket number (insert here) at the beginning of your comments and send two copies of your comments. If you wish to receive confirmation that FAA received your comments, include a self-addressed stamped postcard.

You may also file comments through the Internet at http://dms.dot.gov. You may review the public docket containing comments in the Docket Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office is located in Room Plaza 401 of the NASSIF Building at the U.S. Department of Transportation at the address listed above.

FOR FURTHER INFORMATION CONTACT:

Please contact Joseph Hebert, Financial Analysis and Passenger Facility Charge Branch, APP-510, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone [phone]; facsimile [phone].

SUPPLEMENTARY INFORMATION:

Congress, in H.R. Rep. 108-76 (April 12, 2003), directed the Secretary of Transportation to “examine the impact that airlines emerging from bankruptcy could have on hub airports, as well as the ramifications on airport systems and U.S. capital bond markets.” In response, Department of Transportation is assembling information to examine the impact that airlines emerging from bankruptcy have on hub airports as well as the effect this has on airport systems and U.S. capital bond markets. This information is being accumulated to understand the effects carriers' bankruptcy have had on airport operations and financial health as a whole. The goal is to observe these effects and determine whether government intervention is warranted. Further, the information gathered will be used to identify financial and operating strategies that could be valuable to the airport industry in responding to an airline bankruptcy and in aiding in the recovery of a carrier emerging from bankruptcy.

We welcome comments from all interested parties, including state and local officials, airport operators, air carriers, academics, financial experts and the flying passengers. Our goal is to have a final report by September 2003.

We are interested in acquiring information that would help us answer the following questions: (1) Is an airport's health tied to a particular carrier? (2) What actions have airports taken to aid airlines emerging from bankruptcy? (3) Has any airport canceled or deferred any capital development projects based on the financial condition of a particular carrier? (4) What carriers that have filed for bankruptcy have defaulted on lease payments or rejected leases and contracts? (5) What financial impact did the airport experience from those carriers filing for bankruptcy or emerging from bankruptcy? (6) What would be the financial impact to the airport if the bankruptcy carriers defaulted on lease and contract agreements, rejected these agreements, or reduced or ceased service? (7) Has any airport changed any of its policies regarding leases and operating permits due to a carrier bankruptcy? (8) Have the bankrupt carriers caused an airport to incur higher debt and service costs? (9) Have the carriers' recent financial problems caused any airports to defer or cancel Airport Improvement Program or Passenger Facility Charge funded development programs? (10) Do the benefits that carriers obtain from bankruptcy help or hurt airports? (11) What actions, if any, could the federal government take now to help airports adjust to their current financial environment?

Issued in Washington, DC

Catherine M. Lang,

Director, Office of Airport Planning and Programming.