02-17004. High Density Airports; Notice of Extension of the Lottery Allocation and Request for Comments

AGENCY:

Federal Aviation Administration, DOT.

ACTION:

Notice of extension of the lottery allocation for takeoff and landing times at LaGuardia Airport and request for comments.

SUMMARY:

This notice announces a two-year extension of the current exemption slot allocation at LaGuardia Airport (La Guardia) through October 30, 2004. This action maintains the current operating environment at LaGuardia pending a long-term solution. Additionally, the FAA seeks comment on proposed modifications to the procedures used to reallocate exemption slots that may become available during this interim period.

DATES:

Comments must be received on or before August 7, 2002.

ADDRESSES:

Comments on this notice should be mailed or delivered in duplicate to: U.S. Department of Transportation Dockets, Docket No. FAA 2001-9852, 400 Seventh Street SW., Room Plaza 401, Washington, DC 20590. Comments may also be sent electronically to the following Internet address: http://DMS.dot.gov. Comments may be filed and/or examined in Room Plaza 401 between 10 a.m. and 5 p.m. weekdays except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Lorelei Peter, Operations and Air Traffic Law Branch, Regulations Division, Office of the Chief Counsel, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone number 202-267-3073.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to comment on this process by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned decisions. Communications should identify the docket number and be submitted in duplicate to the above-specified address. All communications and a report summarizing any substantive public contact with FAA personnel on this notice will be filed in the docket. The docket is available for public inspection both before and after the closing date for receiving comments.

Before taking any final action on this proposal, the Administrator will consider all comments made on or before the closing date for comments and the proposal may be changed in light of the comments received.

The FAA will acknowledge receipt of a comment if the commenter includes a self-addressed, stamped postcard with the comment. The postcard should be marked “Comments to Docket No. FAA 2001-9852.” When the FAA receives the comment, the postcard will be dated, time stamped, and returned to the commenter.

Background

The FAA has broad authority under Title 49 of the United States Code (U.S.C.), Subtitle VII, to regulate and control the use of the navigable airspace of the United States. Under 49 U.S.C. 40103, the agency is authorized to develop plans for and to formulate policy with respect to the use of navigable airspace and to assign by rule, regulation, or order the use of navigable airspace under such terms, conditions, and limitations as may be deemed necessary in order to ensure the safety of aircraft and the efficient utilization of the navigable airspace. Also, under section 40103, the agency is further authorized and directed to prescribe air traffic rules and regulations governing the efficient utilization of the navigable airspace.

The High Density Traffic Airports Rule, or “High Density Rule,” 14 CFR part 93, subpart K, was promulgated in 1968 to reduce delays at five congested airports: John F. Kennedy International Airport (JFK), LaGuardia, O'Hare International Airport (O'Hare), Ronald Reagan Washington National Airport (Reagan National) and Newark International Airport (Newark) (33 FR 17896; December 3, 1968). The regulation limits the number of instrument flight rule (IFR) operations at each airport, during certain hours of the day. It provides for the allocation to carriers of operational authority, in the form of a “slot” for each IFR takeoff or landing during a specific 30- or 60-minute period. The restrictions at Newark were lifted in the early 1970s.

“AIR-21”

On April 5, 2000, the “Wendell H. Ford Aviation Investment and Reform Act for the 21st Century” (“AIR-21”) was enacted. Section 231 of AIR-21 significantly amended 49 U.S.C. 41714 to phase out slots at LaGuardia, JFK, and O'Hare. Section 41715 terminates slots at O'Hare as of July 1, 2002, and at LaGuardia and JFK on January 1, 2007. Section 231 also included new provisions codified at 49 U.S.C. 41716, 41717, and 41718 that enable air carriers meeting specified criteria to obtain exemptions (referred to as “exemption slots”) from the requirements of subparts K and S of part 93 of Title 14 of the Code of Federal Regulations at LaGuardia, JFK, O'Hare, and Reagan National. As a result of this legislation, the Department of Transportation (Department) issued eight orders establishing procedures for the processing of various applications for exemption slots authorized by the statute.

Specifically, Order 2000-4-11 implements 49 U.S.C. 41716(a), which provides that an exemption slot must be granted to any airline using State 3 aircraft with fewer than 71 seats that proposes to provide nonstop service between LaGuardia and an airport that was designated as a small hub or nonhub airport in 1997, under certain conditions. The exemption must be granted if: (1) The airline was not providing such nonstop service between the small hub or nonhub airport and LaGuardia during the week of November 1, 1999; (2) the proposed service between the small hub or nonhub airports and LaGuardia exceeds the number of flights provided between such airports during the week of November 1, 1999; or (3) if the air transportation pursuant to the exemption would be provided with a regional jet as replacement of turboprop service that was being provided during the week of November 1, 1999.

Under AIR-21 and the Department's Orders, air carriers meeting the statutory tests delineated above automatically receive blanket approval for exemption slots, provided that they certify in accordance with 14 CFR 302.4(b) that they meet each of the statutory criteria. The certification must state the communities and airport to be served, that the airport was designated a small hub or nonhub airport as of 1997, that the aircraft used to provide the service have fewer than 71 seats, that the aircraft are Stage 3 compliant, and the planned effective dates. Carriers must also certify that the proposed service represents new service, additional frequencies, or regional jet service that has been upgraded from turboprop service when compared to service for the week of November 1, 1999. In addition, carriers must state the number of exemption slots and the times needed to provide the service.,

Order 2000-4-10 implements the provisions of 49 U.S.C. 41716(b), which states that exemption slots must be granted to any new entrant or limited incumbent airline using Stage 3 aircraft that proposes “to provide air transportation to or from LaGuardia or John F. Kennedy International Airport if the number of exemption slots granted under this subsection to such air carrier with respect to such airport when added to the slots and exemption slots held by such air carrier with respect to such airport does not exceed 20.” Applications submitted under this provision must identify the airports to be served and the time requested.

Section 231 of AIR-21, 49 U.S.C. 41715(b)(1), expressly provides that the provisions for exemption slots are not to affect the FAA's authority over safety and the movement of air traffic. The reallocation of exemption slot times by the lottery procedures described in this Notice is based on the FAA's statutory authority and does not rescind the exemptions issued by the Department under Orders 2000-4-10 and 2000-4-11. As provided in those orders, carriers that have filed the exemption certifications also need to obtain an allocation of exemption slot times from the FAA. The limiting and reallocation of these exemption slots is in recognition that it is not possible to add an unlimited number of new operations at LaGuardia, especially during peak hours, even if those operations would otherwise quality for exemptions under AIR-21.

Lastly, § 93.225 of Title 14 of the Code of Federal Regulations sets forth the process for slot lotteries under the High Density Rule. The process described in the regulations is similar to the process described here and allows for special conditions to be included when circumstances warrant special consideration.

Extension of Lottery Allocation

On June 12, 2001, a Notice of Alternative Policy Options for Managing Capacity at LaGuardia and Proposed Extension of the Lottery Allocation was published in the Federal Register, in which the FAA sought comment on both long-term policy options and a short-term extension of the cap on exemption slots at LaGuardia (66 FR 31731). The number of AIR-21 exemption slots that may be operated at the airport was limited by the FAA to 159 operations effective January 31, 2001, and allocated in accordance with the lottery held on December 4, 2000. This allocation capped scheduled operations at 75 per hour between the hours of 7:00 a.m. and 9:59 p.m., which limited daily and hourly demand on airport facilities and the air traffic control system. The FAA has found that this number of flights can be accommodated in good weather conditions and at the same time, provides access for AIR-21 flights. (This number does not include extra sections of scheduled air carrier flights or the six reservations per hour for “Other” nonscheduled operations, including general aviation, charters and military flights. Therefore, this allocation maintains total operations of approximately 81 per hour.)

On August 2, 2001, the FAA extended the lottery allocation through October 26, 2002, set the date of August 15, 2001 for a second lottery, and established procedures for subsequent allocation of exemption slots in the event that any exemption slots were returned or withdrawn by the FAA for non-use (66 FR 41294; August 7, 2001).

Following the terrorist attacks on September 11, 2001, and the resulting impacts on the aviation industry, the FAA suspended the closing date for the comment period regarding the Notice of Policy Alternatives for Managing Capacity at LaGuardia Airport (66 FR 52170; October 12, 2001). On March 22, the FAA announced that the comment period on demand management options would close on June 20, 2002 (67 FR 13401). Developing a long-term solution for demand management at LaGuardia remains an agency priority; a solution cannot be finalized and implemented, however, prior to the expiration of the current lottery restrictions on October 27, 2002. While traffic at LaGuardia is currently below pre-September 11 levels, operations have been increasing steadily and are expected to increase throughout the summer. Today, there are approximately 1,120 operations per day, which is seven percent below the level of operations last summer. We note that operations during the winter months were approximately 14 percent below the level of operations in winter 2000-2001.

Maintaining the cap on total operations at LaGuardia is imperative until the long-term solution is finalized and implemented. If the cap on AIR-21 exemption slots were lifted, carriers could begin adding an unlimited number of qualified operations at the airport, which could lead to a situation similar to that in the fall of 2000 where the airport, airlines, and public experienced an unacceptable level of delay. Significant delays and operational disruptions at LaGuardia have a negative effect on the national air traffic control system and result in a ripple effect on delays and operations at many other airports. The airport cannot accommodate, nor can the FAA permit, unrestrained growth in operations at this time.

The FAA is accordingly adopting a two-year extension of the current allocation and hourly limits through October 30, 2004. A two-year extension of the exemption slot allocation is appropriate due to the complex issues associated with the proposed long-term solutions and the competing interests that must be addressed. The comment period for potential long-term concepts closed on June 20, 2002. The FAA and the Office of the Secretary will review and analyze all submitted comments. Identifying a preferred access management process for LaGuardia will require much consideration of complex statutory, regulatory, and policy issues raised by the suggested demand management options as well as variations and additional options received in the comments. Consequently, a two-year extension of the current allocation is necessary to accomplish the development and implementation of a long-term solution while continuing a framework that allows airlines to make operational plans. Therefore, the current allocation and hourly limits are extended through October 30, 2004.

Proposed Changes to Post-Lottery Allocation Procedures

The FAA is proposing certain changes to the procedures used for reallocation of exemption slots that are returned or withdrawn for non-use. In the Federal Register notice published on August 7, 2001, the FAA adopted certain procedures for returned or withdrawn exemption slots, which included a continued preference for carriers that currently do not conduct any operations at LaGuardia. Therefore, any returned or withdrawn exemption slots would be offered first (on a first-come, first-serve basis) to any carrier that does not operate at the airport, has certified accordingly with the Department, and has a written request on file with the Slot Office. Also, under these procedures, if a carrier that does not operate at the airport does not select the available exemption slots, the exemption slots will be made available to all carriers for selection in accordance with the appropriate established rank order, i.e., the December 4 rank order for carriers providing small community service and the August 15 rank order for all carriers that hold or operate fewer than 20 slots and exemption slots. The exemption slots are to be selected by alternating between the two rank orders. The FAA believes that alternating selections between the two established rank orders would provide equitable treatment and opportunity to both categories of operations to obtain any available capacity throughout this allocation period.

After the initial December 5, 2000, lottery, the number of available exemption slots was split almost evenly between the two categories of carriers (new entrants carriers with 79 exemption slots and small hub/non-hub service carriers with 80 exemption slots). This split achieved the balance originally sought by the agency in devising procedures that would result in an allocation that was as fair as possible among the competing entities and consistent with the purposes of AIR-21. As a result of the August 15 lottery, the new entrant carriers hold a total of 75 exemption slots and the carriers providing small hub/non hub service hold 84 exemption slots. Both the FAA and the Office of the Secretary recognize that during the next two years, new entrant carriers' ability to increase service is significantly disadvantaged in comparison to the flexibility of the large, incumbent carriers that have major slot holdings at LaGuardia. While the large carriers did in fact have to reduce service to some markets after the December 2000 lottery, these carriers still hold approximately 92 percent of the slots at LaGuardia and have the ability to use existing slot holdings for service to small hub/non-hub communities without additional exemption slots. New entrant carriers do not enjoy this flexibility as the majority of access to LaGuardia for new entrants is due to exemption slots.

Recognizing the importance of both categories of service at LaGuardia, we find it necessary to provide the opportunity to maintain parity between the categories of operations to the extent practicable. Therefore, as stated in the August 7 notice, the first four exemption slots (returned or withdrawn) that are available for reallocation will be made available to any carrier that is not conducting operations at the airport and that meets the specified criteria. If there is no eligible carrier, we propose that the exemption slots would be made available to any carrier operating at the airport that holds or operates less than 20 slots and exemption slots in accordance with the August 25 rank order. This process would be termed Phase I. After Phase I is completed, the new entrant category would be comprised of 79 exemption slots and the small hub/non-hub category would be comprised of 80 exemption slots. The division of exemption slots between the two categories would place both categories on comparable footing.

The FAA and the Office of the Secretary continue to believe that the goals of AIR-21 should be the guiding principles in allocating the limited exemption slots during this interim period. AIR-21 did not purport a preference of any one category of operations over another. As stated above, however, new entrant carriers do experience limitation on access at LaGuardia that are not experienced by the large incumbent carriers. Consequently, as Phase II, we propose that when subsequent exemption slots become available and there is an eligible carrier not conducting service at the airport seeking exemption slots, then the available exemption slots would be offered to that carrier first, provided that the total number of exemption slots allocated to carriers providing small hub/non-hub service is not below 76. This would allow specific opportunity for access to a carrier that currently is not operating at LaGuardia without tipping the balance too far to one category.

If no new carrier is interested or eligible, we propose that available exemption slots would be offered first to the category of carriers that is below parity up to the level of reestablishing parity, using the respective rank order. Remaining exemption slots would then be offered to carriers in the category from which the exemption slots came from using the respective rank order. Lastly, if there are exemption slots available, they would be offered to the carriers in the other category using its respective rank order.

Adopting this process would achieve several desirable goals. First, it would allow for access to the airport by new carriers, but by incorporating a threshold of four exemption slots, it does not allow new carriers to gain unconstrained access to the detriment of carriers providing small hub/non-hub service. Second, it would ensure that there would be a continued finite number of exemption slots available for new entrant service and small hub/non-hub service and represent an opportunity for equitable allocation of exemptions slots between competing categories. Lastly, it puts in place a process to provide opportunity to maintain parity.

Finally, the FAA proposes that a carrier will have three business days from the date of the FAA offer of an available exemption slot to accept or reject offered exemption slots. This procedure would provide a definitive timeframe for decisionmaking and assist in ensuring that exemption slots do not go unused for an extended period of time. From the date of acceptance of an offered exemption slot, a carrier has 120 days to begin using that exemption slot. (See adopted lottery procedures for the August 15, 2001 lottery.)

The reallocation procedures adopted in the August 7, 2001, notice will be followed for the reallocation of returned or withdrawn exemption slots pending a decision on these proposed procedures after the close of the comment period. The proposed, applicable conditions are restated as follows:

1. The cap on AIR-21 exemption slots (7:00 a.m. through 9:59 p.m.) will remain in effect through October 30, 2004.

2. The FAA may approve the transfer of exemption slot times between carriers only on a temporary one-for-one basis for the purpose of conducting the operation in a different time period. Carriers must certify to the FAA that no other consideration is involved in the transfer.

3. Phase I: If any exemption slots are returned to the FAA or are withdrawn for non-use, the FAA would make the first four exemption slots available on a first-come, first serve basis to a carrier that was not operating at LaGuardia as of August 15, 2001, certified to the Department in accordance with the procedures articulated in OST Order 2000-4-10, and has a written request on file with the Slot Office. Any of the first four returned or withdrawn exemption slots that are not selected by such a carrier would be available to the carriers that have less than 20 slots and exemption slots at LaGuardia for selection in accordance with the August 15 established rank order, with each carrier able to select two exemption slots. Any exemption slots not selected during this process then would be made available to the carriers providing small hub/non-hub service using the December 4 rank order. This concludes Phase I.

4. Phase II: If any subsequent exemption slots become available for reallocation and there is an eligible carrier not conducting service at the airport seeking exemption slots, then the available exemption slots would be offered to that carrier first, provided that the total number of exemption slots allocated to carriers providing small hub/non-hub service is not below 76. If a new, eligible carrier does not select the exemption slots, then they would be offered to the category of carriers that is below parity, up to the level of re-establishing parity (using respective rank order). If the exemption slots are not selected or there are available exemption slots remaining, then they would be offered to carriers in the same category from which the exemption slots came. Any remaining exemption slots not selected would be offered to the other category of carriers, using its respective rank order.

5. A carrier would have three business days after an offer from the Slot Office to accept the offered exemption slot time. Acceptance must be in writing to the Slot Office. If the Slot Office does not receive an acceptance to an offer within three business days, the carrier would be recorded as rejecting the offer and the next carrier on the list would be offered the available exemption slot times.

6. Carriers that are offered exemption slot times by the Slot Office must re-certify to the Department of Transportation in accordance with the procedures articulated in OST Orders 2000-4-10 and 2000-4-11 prior to operations, and provide the Department and the FAA with the markets to be served, the number of exemption slots, the frequency, and the time of operation, before the exemption slot times will be allocated by the FAA to the carrier.

7. All operations allocated under the post-lottery procedures must commence within 120 days of a carrier's acceptance of an available exemption slot.

8. The Chief Counsel will be the final decisionmaker concerning eligibility of carriers to participate in the allocation process.

Issued on July 1, 2002, in Washington, DC.

David G. Leitch,

Chief Counsel.