E8-26039. Congestion Management Rule for LaGuardia Airport

AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Notice; clarification of final rule.

SUMMARY:

On October 10, 2008, the FAA issued a final rule to address congestion at New York's LaGuardia Airport (LaGuardia). That final rule is scheduled to take effect December 9, 2008. As part of the final rule, the FAA explained how it would initially allocate slots to incumbent carriers on the rule's effective date. The preamble to the final rule noted that it would not allocate slots to a carrier that was no longer operating at the airport. However, it did not address how those slots would be allocated under the rule. Today's notice provides that explanation.

ADDRESSES:

To read background documents or comments received, go to http://www.regulations.gov and follow the online instructions for accessing the docket. Alternatively, 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 concerning this clarification notice contact: Nan Shellabarger, Office of Aviation Policy and Plans, APO-1, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone [phone]; e-mail [e-mail]. For legal questions concerning this rulemaking, contact: Rebecca MacPherson, FAA Office of the Chief Counsel, 800 Independence Ave., SW., Washington, DC 20591; telephone [phone];e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

On October 10, 2008, the FAA issued a final rule to address congestion at LaGuardia. 73 FR 60574. That final rule is scheduled to take effect December 9, 2008. As part of the final rule, the FAA explained how it would initially allocate slots to incumbent carriers no later than the rule's effective date. Under the rule, initial allocation is based on Operating Authorizations allocated under the Order Limiting Operations at LaGuardia Airport (LaGuardia Order) to carriers for the week of September 28, 2008. The preamble to the final rule noted that it would not allocate slots to a carrier that was no longer operating at the airport. However, it did not address how those slots would be allocated under the rule. Specifically, the preamble to the final rule stated:

One carrier that held Operating Authorizations in January 2007 is no longer in business, although it continues to hold an air carrier certificate. While those Operating Authorizations are currently being operated by another carrier solely within its marketing control, the FAA believes it is simply cleaner to allocate the slots to the holder of the Operating Authorization only if the carrier is still operating at the airport. (73 FR 60585)

Section 93.39(b) of the final rule's regulatory text states:

If a carrier was allocated operating rights under the Order Limiting Operations at LaGuardia Airport during the week of September 28-October 4, 2008, but the operating rights were held by another carrier regularly conducting operations at the airport as of that week, 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.

Under the LaGuardia Order, ATA Airlines was allocated 14 slots at the airport. These slots have been operated under lease agreements by AirTran and Delta Air Lines. However, the allocation has remained with ATA Airlines. That carrier ceased operations at LaGuardia on January 7, 2008, and ceased operations entirely on April 3, 2008. Thus, section 93.39(b) does not apply. Likewise, these slots would not be considered new or returned capacity that can be reallocated only via auction under 93.40 and then designated as unrestricted slots. Since no provision of the final rule specifically directs how these types of slots will be allocated, the FAA believes it is appropriate to provide clarification.

On October 17, 2008, in the bankruptcy proceeding of In re: ATA Airlines, Inc., U.S. Bankruptcy Court for the Southern District of Indiana, Indianapolis Division, case no. 08-03675-BHL-1 1, the court issued an Order Granting Expedited Motion under Bankruptcy Code Sections 105 and 363 to Establish Solicitation and Bid Procedures for the Sale of the Debtor 's Business (Bankruptcy Order). The Bankruptcy Order establishes rules and procedures that will govern the solicitation and submission of proposals for the acquisition of ATA Airlines. At present, initial bids are due to the ATA Airlines by November 3, 2008. ATA Airlines will determine which Bid Proposal (as defined in the Bankruptcy Order) is the highest and best offer for the sale of the business. Each Bid Proposal shall be subject to bankruptcy court approval.

In proceeding before the court, the FAA has reiterated that the Operating Authorizations allocated under the LaGuardia Order cannot be sold. However, the Bankruptcy Order addresses the sale of the business as a whole. Accordingly, for the purpose of the LaGuardia Order and the Final Rule, the FAA would consider the acquiring entity to stand in the shoes of ATA Airlines. If the acquiring entity is an air carrier,^[1] the FAA will allocate the 14 LaGuardia slots to that entity. The acquiring carrier need not currently have a presence at the airport. The provision in the preamble that the air carrier must operate at LaGuardia was directed to the holder of the Operating Authorization under the LaGuardia Order. The FAA simply did not contemplate a circumstance whereby ATA Airlines could be acquired by another carrier under bankruptcy proceedings.

The FAA understands that several aspects of the final rule need to be addressed given the possibility of these slots being allocated outside of the context of the LaGuardia Order.

• As is the case with all slots allocated in a manner other than under the provisions of section 93.40, these slots will be designated as common slots and, except as discussed below, will be subject to the rule's usage requirements and may be withdrawn for operational need.
• Should the acquisition transaction not be completed until after the rule's effective date, the FAA will hold the slots in abeyance until the transaction is complete, at which point it will allocate the slots.
• The slots will be included in the total number of common slots initially allocated to the carrier under the rule. Should the total number of common slots exceed 20, the carrier may lose a percentage of the slots in accordance with the final rule. However, depending on when the slots are allocated, reversion of the additional slots may not occur before March, 2010.
• Since the bankruptcy court order includes unexpired leases, the FAA anticipates the acquiring carrier will comply with the requirements of all leases related to the slots, including any time frames provided for termination of the lease agreement.
• The FAA will waive the usage requirements for a period of no more than six months following allocation so that the acquiring carrier has the opportunity to establish new routes or services.

Availability of Rulemaking Documents

You may obtain an electronic copy using the Internet by:

(1) Searching the Federal eRulemaking Portal (http://www.regulations.gov);

(2) Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/​regulationspolicies/​; or

(3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/​fr/​index.html.

You also may obtain 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 [phone]. Make sure to identify the docket number of this rulemaking.

Issued in Washington, DC on October 27, 2008.

Rebecca B. MacPherson,

Assistant Chief Counsel for Regulations, Federal Aviation Administration.

Footnotes

1.  Only air carriers can hold either Operating Authorizations under the LaGuardia Order or slots under the final rule. Accordingly, the FAA assumes that only an existing air carrier would be likely to bid on ATA Airlines if its primary interest is acquiring the LaGuardia slots. Any entity that does not currently possess an air carrier certificate should contact the FAA's Indianapolis Flight Standards District Office (FSDO) to discuss concerns regarding ATA Airlines' operating certificate. Operating certificates cannot be sold, and the FAA requires certain criteria be met before it will issue a certificate. Questions to the Indianapolis FSDO should be directed to Ron Myers at [phone] or Bruce Montigney at [phone].