[Senate Hearing 111-1072]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 111-1072
 
                     OVERSIGHT OF THE METROPOLITAN
                     WASHINGTON AIRPORTS AUTHORITY,
                  REAGAN WASHINGTON NATIONAL AIRPORT,
                         AND THE PERIMETER RULE

=======================================================================

                                HEARING

                               before the

       SUBCOMMITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 16, 2010

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation




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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            JOHN ENSIGN, Nevada
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 GEORGE S. LeMIEUX, Florida
CLAIRE McCASKILL, Missouri           JOHNNY ISAKSON, Georgia
AMY KLOBUCHAR, Minnesota             DAVID VITTER, Louisiana
TOM UDALL, New Mexico                SAM BROWNBACK, Kansas
MARK WARNER, Virginia                MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                   Bruce H. Andrews, General Counsel
                 Ann Begeman, Republican Staff Director
             Brian M. Hendricks, Republican General Counsel
                  Nick Rossi, Republican Chief Counsel
                                 ------                                

       SUBCOMMITTEE ON AVIATION OPERATIONS, SAFETY, AND SECURITY

BYRON L. DORGAN, North Dakota,       JIM DeMINT, South Carolina, 
    Chairman                             Ranking Member
DANIEL K. INOUYE, Hawaii             OLYMPIA J. SNOWE, Maine
JOHN F. KERRY, Massachusetts         JOHN ENSIGN, Nevada
BARBARA BOXER, California            JOHN THUNE, South Dakota
BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           GEORGE S. LeMIEUX, Florida
FRANK R. LAUTENBERG, New Jersey      JOHNNY ISAKSON, Georgia
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           SAM BROWNBACK, Kansas
AMY KLOBUCHAR, Minnesota             MIKE JOHANNS, Nebraska
MARK WARNER, Virginia
MARK BEGICH, Alaska


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 16, 2010...............................     1
Statement of Senator Dorgan......................................     1
    Prepared statement of Hon. Kay Bailey Hutchison submitted by 
      Hon. Byron L. Dorgan.......................................    16
Statement of Senator Rockefeller.................................     3
    Prepared statement...........................................     5
Statement of Senator Warner......................................     6
    Letter, dated July 19, 2010 to Hon. John D. Rockefeller IV, 
      Hon. Byron L. Dorgan, Hon. Kay Bailey Hutchison and Hon. 
      Jim DeMint from Senators Cantwell, Murray, Wyden, Merkley, 
      Begich, Murkowski, Warner, Nelson, Webb, Cardin and 
      Lautenberg.................................................    46
Statement of Senator Cantwell....................................     6
    Prepared statement...........................................     7
Statement of Senator Ensign......................................    29

                               Witnesses

E. Lynn Hampton, President and CEO, Metropolitan Washington 
  Airports Authority.............................................    21
    Prepared statement...........................................    23
Lee R. Kair, Assistant Administrator for Security Operations, 
  Transportation Security Administration, U.S. Department of 
  Homeland Security..............................................    13
    Prepared statement...........................................    14
Hon. Susan L. Kurland, Assistant Secretary for Aviation and 
  International Affairs, U.S. Department of Transportation; 
  accompanied by Michael J. Sammartino, Director of System 
  Operations, Federal Aviation Administration, U.S. Department Of 
  Transportation.................................................     9
    Prepared statement...........................................    10
Hon. Charles Darwin Snelling, Chairman, Metropolitan Washington 
  Airports Authority.............................................    17
    Prepared statement...........................................    19

                                Appendix

U.S. Senators Benjamin L. Cardin and Barbara A. Mikulski of 
  Maryland, prepared joint statement.............................    53
Hon. Jim Webb, U.S. Senator from Virginia, prepared statement....    54
Response to written questions submitted to Hon. Susan L. Kurland 
  by:
    Hon. John D. Rockefeller IV..................................    55
    Hon. Maria Cantwell..........................................    56
    Hon. Mark Warner.............................................    57
Response to written questions submitted by Hon. Maria Cantwell 
  to:
    Lee R. Kair..................................................    58
Response to written questions submitted to Hon. Charles Darwin 
  Snelling by:
    Hon. John D. Rockefeller IV..................................    59
    Hon. Maria Cantwell..........................................    60
    Hon. Mark Warner.............................................    63
Response to written question submitted to Michael J. Sammartino 
  by:
    Hon. John D. Rockefeller IV..................................    64
    Hon. Maria Cantwell..........................................    64


                     OVERSIGHT OF THE METROPOLITAN
                     WASHINGTON AIRPORTS AUTHORITY,
                  REAGAN WASHINGTON NATIONAL AIRPORT,
                         AND THE PERIMETER RULE

                              ----------                              


                      THURSDAY, SEPTEMBER 16, 2010

                               U.S. Senate,
  Subcommittee on Aviation Operations, Safety, and 
                                          Security,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Byron L. 
Dorgan, Chairman of the Subcommittee, presiding.

          OPENING STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. We're going to call the hearing to order. 
This is a hearing of the Subcommittee of Aviation of the Senate 
Commerce Committee. I appreciate all of you being here and 
especially appreciate the effort the witnesses have made to be 
here.
    Let me explain the interest that we have this afternoon on 
this subcommittee with this hearing. We are interested in 
trying to understand more about the Metropolitan Washington 
Airports Authority that runs the two airports here in the 
Nation's capital. Until 1986, the Federal Aviation 
Administration managed both the National and the Dulles 
airports. In 1986, the Congress passed a law transferring the 
operation of the two airports here in the metropolitan area to 
a new independent Airports Authority. That transfer in 
operating authority was designed to allow the airports here to 
grow--National and Dulles to grow--and it was particularly 
designed to help Dulles grow because Dulles was considered, at 
that point, underutilized and also it was done to facilitate 
timely infrastructure improvements at both airports.
    Understanding that and the history of that, I began in 
recent weeks trying to think through what is the Metropolitan 
Washington Airports Authority and what is its accountability 
and whom, and so on. I especially began thinking about that in 
the context of trying to pass FAA reauthorization bill here 
through the U.S. Congress. That bill is necessary, in my 
judgment, especially because it contains provisions dealing 
with the issue of air traffic control modernization. I've met 
with the Europeans, for example, they are going full speed 
ahead, modernizing their air traffic control system, that will 
move them, and hopefully if we do the same, will move us, from 
ground-based radar to GPS navigation. It will allow there to be 
much better management of the airplanes in our sky; it will 
allow airplanes to fly more direct routes; it will provide 
greater safety for passengers; it will provide better 
circumstance for our environment with less fuel being used. All 
of those things are the benefits of air traffic control 
modernization.
    The Congress has tried and tried and tried and failed and 
failed and failed to pass FAA reauthorization that includes 
these important issues of modernization. I thought perhaps this 
was going to be the time, but that is not the case at the 
moment. Principally, the objections by the Metropolitan 
Washington Airports Authority to provisions that have been 
described as increasing certain flights beyond the perimeter in 
a negotiation that has been back and forth here in the 
Congress, additional slots at Washington National, additional 
operations beyond what is called the perimeter rule have 
persuaded the Metropolitan Washington Airports Authority to 
object in attempt to block, to the extent they could, the 
movement of the FAA reauthorization bill.
    Representations have been made on behalf of the Authority 
that to do what has been proposed to be done would mean wait 
times through security checkpoints at Washington National would 
go from 5 minutes to 1 hour, and there wouldn't be enough 
parking, and the whole series of things have been represented. 
It finally seemed to me, as I was thinking through this in 
recent weeks, we should have those representations firsthand 
and direct, and understand the veracity of those--those kinds 
of representations.
    And so, I've called a hearing. I wanted to try to 
understand that which I've just mentioned and a number of other 
answers to questions that I will have today. I think it goes 
without saying that--that all of us want the Metropolitan 
Washington Airports Authority to succeed. We want us to have a 
two major airports in this region under your authority, 
Washington National and Dulles, to be wonderful airports that 
do a great job and are able to handle their passengers well and 
productively. All of us want those same things.
    In additional to all of that, I want something more. I want 
to pass an FAA reauthorization bill in this Congress. I'm not 
the only one, I know the Chairman of the full Committee does as 
well, and perhaps a few others, but the lack of doing so, I 
think, is going to have a profound impact on air traffic, air 
service across this country, including an impact, a negative 
impact on the two Washington airports. Because there has been 
much representation about the--the position of Metropolitan 
Washington Airports Authority, I want today to understand 
directly from them what their position is, why, and the 
veracity of that position.
    In addition, my interest has been piqued going forward, 
what is the authority and to whom is it accountable? Is it a 
sovereignty as has been suggested by some or is there 
accountability somewhere and where should that accountability 
be and how would one describe that in legislation moving 
forward?
    Having said all of that, I'm very anxious to hear the 
testimony and be able to ask questions, but let me call on the 
Chairman of the full Committee and thank him for his 
cooperation in our ability of this subcommittee to hold this 
hearing.
    Senator Rockefeller?

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    The Chairman. Thank you, Mr. Chairman. I agree with 
everything that you've said and I might point out that I had a 
very heavy role back in 1986 in creating the Authority, because 
there was a huge amount of dissention between Dulles, D.C., and 
Baltimore at that time, BWI. And, because one very prominent 
democrat didn't want to see--the Democrats were in control 
then--didn't want to see any change in the fact that the BWI, 
Najeeb Hallaby, was, as he said, spending 25 percent of his 
time worrying about issues that he never should have been 
worrying about. And this Senator, who was also on this 
committee, Republican Paul Trible, was a very good Senator, 
said what we need is an authority, because if we have an 
authority they can bond. If they can--if we can bond, we can 
grow, everybody can grow. And so, I broke ranks with my party 
because it just made so much sense to me. And, it did 
eventually pass, and I think that the results have been very, 
very good.
    I've always supported Dulles, and at the time of its 
creation, Dulles was in a sense the region's primary airport 
because of its proximity to Washington, D.C. As part of the 
effort to promote Dulles, we invoked, instituted rather, the 
perimeter rule at National, barring local long-haul flights 
from that airport. And the decision drove flights to Dulles. 
So, the growth of Dulles has benefited from--it has certainly 
helped people from the State I represent because they can get 
there very quickly, and that's not the whole picture here, but 
it's--it's useful. It's an accessible airport that spans the 
world, so to speak.
    But on the other hand, over the last 30 years, we've seen 
enormous changes in the airline industry, some good, some bad. 
Airline travel is dramatically better, it's dramatically safer. 
The part of the bill that we were able to pass makes it even 
safer, with respect to some of the personnel. People now have 
access to affordable travel, they can connect, go anywhere in 
the world, but economic stability, instability in the airline 
industry has costs many, many--the loss of airline service in 
the small airline communities, such as we have in my State, 
every State has them. Airline employees have seen their wages 
and their benefits slashed, simply because of the economics of, 
you know, United and others being in and out of bankruptcy, 
it's just, things have been in great turmoil. And the industry 
has changed as they have done that, so has the Federal Aviation 
policy, it had to.
    I firmly believe the U.S. must maintain the safest, most 
efficient aviation system in the world. I'm proud to say that 
the FAA bill actually passed out of this committee and then 
through the Congress, 93 to nothing, not a single dissenting 
vote. That's sort of history when that happens in this session 
of Congress. Our bill includes a number of things that the 
Chairman of the Subcommittee has already mentioned.
    We've sought to reach compromise with the House of the FAA 
bill. Committee leadership developed what I believe is a fair 
compromise that permits a limited number of flights beyond the 
perimeter. The compromise sought to address local concerns, and 
it really did address local concerns.
    So, today's hearing will allow us to look at these matters 
and do some of the things that Senator Dorgan has suggested. I 
think we have to deal with a couple of things. One, Dulles is 
one of the Nation's largest most successful international 
airports. Northern Virginia is one of the Nation's most 
economically successful regions, generating its own demand for 
air traffic and sort of leading the Nation in growth in 
general, and there sits Dulles. Aircraft are substantially 
quieter, very large airlines are banned in the FAA bill that we 
passed out of here and the Senate passed from landing, thus 
helping with noise. And there's just the fact that 25 years 
that have passed meant that airlines are quieter with much 
quieter airlines yet to come.
    I live at the end of a runway, we have a--my wife and I 
have a house at the end of a runway in Wyoming, the only 
airport in a national park, which is rather odd. And every 
airplane flies directly over us. And, for the--I think we 
noticed this for about 5 days. And, I happened to grow up on 
the East River in New York, and tugs--tugs make a lot more 
noise than airlines do, I promise you, especially in those 
days, and they make it all the way from the bottom of the East 
River all the way to the pass at the top and you hear them the 
whole time, and you just--you just shut it out, you get used to 
it. First, it's a inconvenience, and then, it's something that 
you understand happens.
    This country--another change, this country's population has 
shifted enormously toward the West. There are those who would 
sort of maintain that everything is as it was. And the 
demographics of our country are very different. The West needs 
to be served. The West and the East, the two coastal areas 
have--are interdependent and yet in terms of air service, 
they're not. And so, the West is struggling to have more than, 
you know, one flight, so to speak, into D.C. or wherever, and 
that has to be recognized, that the country has changed, 
therefore our responsibilities have changed.
    I simply want to say that I know that local officials will 
argue that this is not fair to change the rules governing the 
airports, but I think that's a false argument. This is an 
industry whose only constant is change, that's all they've 
known is change. Airline deregulation changed the rules in West 
Virginia. I'll never forget, when I first moved there in 1964, 
Eastern Airlines, United Airlines, and American Airlines all 
had big jets rumbling in and out of that place on a runway 
which was probably too short. It didn't matter, we were happy. 
And then within 3 weeks of the passage of the deregulation, of 
course, they were all gone. And that was--that was sad.
    Now the fact is that the proposed 16 flight conversions 
will not change the dynamic of two airports who serve tens of 
millions of people and we will discuss this. I want to say to 
our witnesses and the members here, that we must push to 
resolve the matter of National Airport's slots. It's--it should 
be very, very easy. It is very, very easy if one is willing to 
be flexible. Not everybody is.
    So, it's unacceptable to me at any time, but especially at 
a time when our economy could benefit so much by passing this 
bill. Our consumers would benefit so much, safety would benefit 
so much, and frankly the economy of the area would benefit so 
much.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Rockefeller follows:]

          Prepared Statement of Hon. John D. Rockefeller IV, 
                    U.S. Senator from West Virginia

    The Metropolitan Washington Airports Authority (MWAA) operates two 
of the country's most successful airports--Reagan National Airport and 
Dulles International Airport. These facilities have been essential to 
the development of Northern Virginia as one of this country's high-
technology centers.
    I am proud to have played a central role in the development of 
Dulles. When some were opposed to providing bonding authority to 
support its infrastructure needs my support was helpful to allow this 
effort to move forward.
    I have always supported Dulles. At the time of its creation, 
National was the region's primary airport because of its proximity to 
Washington, D.C. As part of the effort to promote Dulles, we instituted 
the perimeter rule at National Airport barring long-haul flights from 
the airport. This decision drove those flights to Dulles.
    The growth of Dulles has benefited my constituents. Four West 
Virginia communities have direct access to Dulles and therefore direct 
access to the world. Dulles is also the airport of choice for many West 
Virginians who live in the Eastern Panhandle.
    The last 30 years has brought enormous change to our aviation 
industry--some good and some of it bad. Most importantly, airline 
travel is dramatically safer. Millions more people now have access to 
affordable air travel, low-cost carriers have emerged, and airports 
have benefited from Federal infrastructure investment.
    But, economic instability in the airline industry has cost many 
small and rural communities air service including in my state. Airline 
employees have seen their wages and benefits slashed, and air travel--
once very glamorous--is often an ordeal.
    As the industry has changed, so has Federal aviation policy. The 
U.S. must maintain the safest and most efficient aviation system in the 
world. It is critical to our global competitiveness. The FAA bill that 
I, Senator Hutchison and Dorgan developed and the Senate passed 93-0, 
makes those critical policy adjustments.
    Our bill includes a number of vital safety provisions, places a 
premium of the development of the Next Generation Air Traffic Control 
System, improves access to the air transportation network for small and 
rural communities, and improves FAA management.
    However, all of this is threatened by proposed small and 
incremental changes to the rules that govern flight operations at 
National Airport.
    No one understands or appreciates these issues better than I do. 
For the past decade and three FAA authorization bills, Congress has 
struggled with this issue. In each of the last two FAA reauthorizations 
enacted into law, Congress relaxed the prohibition on long-haul flights 
into National Airport.
    As we sought to reach a compromise with the House on the FAA bill, 
Committee leadership developed what I believe is a fair compromise that 
permits a limited number of flights beyond the perimeter. The 
compromise sought to address local concerns. Today's hearing will allow 
us to review these matters.
    We all have to recognize that the world has changed since the 
original agreement the Federal Government signed with MWAA in 1986. We 
must deal with this reality--and the reality is:

   Dulles is one the Nation's largest and most successful 
        international airports.

   Northern Virginia is one the Nation's most economically 
        successful region's generating its own demand for air travel.

   Aircraft are substantially quieter than they were 25 years 
        ago greatly mitigating noise issues.

   This country's population has shifted to the West and most 
        people beyond an artificial and arbitrary line have no direct 
        access to National Airport.

    I know that local officials will argue that it is not fair to 
change the rules governing the airports--but that it a false argument. 
This is an industry whose only constant is change. Airline deregulation 
changed the rules on West Virginians and millions of others from rural 
states. Airline bankruptcy changed rules for the employees. And, 
economic globalization is changing it all over again.
    The proposed 16 flight conversations will not change the dynamic at 
two airports who serve tens of millions of people. It only continues an 
effort to allow greater access at National Airport for the millions of 
new people living in the Western United States.
    We must push to resolve the matter of National Airport slots or it 
will threaten future FAA reauthorizations. That is not acceptable to 
me, and I will continue to fight for passage of this important bill.

    Senator Dorgan. Senator Rockefeller, thank you.
    Let me recognize the other two Senators who are here for 3 
minutes each for opening statements, then I want to get to the 
witnesses.
    Senator Warner?

                STATEMENT OF HON. MARK WARNER, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Warner. Thank you, Mr. Chairman. May I thank you 
and the Chairman of the full Committee for holding this 
hearing. I think it's timely and appropriate. I also want to 
echo all the good work you've both done and particularly 
Chairman of the Subcommittee on the issues around NextGen. I 
think it critically important that we get to a full FAA 
reauthorization bill.
    I, of course, as one of the local representatives, have 
reviewed MWAA's testimony, I know their position has been for 
some time that no changes should be made in the rules, changes 
that have been changed in the past and candidly, perhaps not 
going back as far as the Chairman of the Committee, but as the 
former Governor of the State, very familiar with the growth of 
both Dulles and National and the effects some of these proposed 
changes will have at BWI as well.
    And I think in that spirit, the spirit that the Chairman of 
the Committee has talked about, we've tried to move forward. I 
voted in this mark-up to try to move beyond what the MWAA 
position was and actually accede to the House position of five 
additional flights coming into National. Subsequent to mark-up 
and subsequent to conversations with folks from Western States 
when the bill reached the floor, we talked about even 
increasing beyond that and have continued those negotiations. 
We perhaps have some differences in terms of the exact number, 
and I would like work forward to continue these kinds of 
negotiations. I have some frustrations at some of the kind of 
compromises that were put together didn't fully include, I 
think, all the input of all the local representatives, and I've 
got, Mr. Chairman, testimony I hope you'll accept from Senator 
Webb and also Senator Mikulski and Senator Cardin, because the 
effects of this--these decisions will have an effect not only 
on the two airports in Virginia, but will also have a very 
major effect as well on the activities at BWI, so I submit 
those for the record.
    I look forward to this conversation, I think it is a--the 
Chairman is acting absolutely appropriately to get all this 
information on the record, the effects not only in terms of at 
National, but the effects at Dulles, the effects at BWI, the 
effects long-haul it will have, and I look forward to this 
conversation.
    Senator Dorgan. Senator Cantwell?

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman, and thank you 
for holding this hearing. And I know you and the Chairman of 
the full Committee feel very strongly about how important it is 
to move FAA legislation through the Congress and get it into 
law, and I appreciate that very much.
    I am here today really to hear from some of the witnesses 
and to have this discussion from the perspective of the Pacific 
Northwest, we want access to our Nation's capital and we don't 
want to be disadvantaged just because we are regionally in a 
different part of the country.
    I have to say that the discussions we've had in the past in 
this committee, I think have been some of the most hard fought 
discussions of this committee. I remember a particular 
committee vote that went back and forth for a couple hours in 
between votes and final decisions, but to me that was a 
transparent process, and I think that's what's most important 
here, is that we have a transparent process that members have a 
chance to vote on these issues, that those votes take place not 
in a back room in a back room discussion, but in the open doors 
of these bodies, to make sure that everybody's interests are 
heard and that the decisions are well understood.
    I have a concern about the notion of slot conversion in 
general. The notion of slot conversion, of dividing up the pie 
through slot conversion is like saying only people who have 
hosted a Super Bowl party before can now host the new Super 
Bowl location. That's not the way we want to have fair 
competition. The FAA's processes in the past, when this 
committee has given them clear indication, this is the number 
of slots they expected, have had a good transparent process on 
exactly where new access to these airports should go. And I 
think that that has--that level of transparency has been good 
and good for the public's confidence in this process.
    So, I know, Mr. Chairman and the Ranking Chairman, we don't 
have a lot of time left, but I remain committed to working with 
you to try to get this bill done. It is important. I hope, as 
you say, we can reach consensus and figure out a way in that 
today's hearing will bring light on how to do that. But I'm 
going to make sure that--that it is a transparent process and 
that everybody has an ability to have the public see and 
dialogue about what the proposal is, and it's not done at the 
11th hour between just a few individuals.
    This is important economics for lots of different 
individuals and we deserve to have that kind of transparency.
    So, I thank the Chairman.
    [The prepared statement of Senator Cantwell follows:]

Prepared Statement of Hon. Maria Cantwell, U.S. Senator from Washington

    Mr. Chairman, thank you for calling this hearing. I appreciate your 
efforts, as well as the efforts by the Chairman of the full committee, 
in trying to get the FAA authorization bill over the finish line. I 
agree with both of you that it is essential Congress pass FAA 
reauthorization legislation this year. My understanding is that there 
are three major issues that need to be resolved. The first issue is 
FedEx/UPS. The second issue is what, if any, increase should there be 
for the Passenger Facilities Charge (PFC) program. The third issue is 
the number of flights that should be allowed to operate beyond the 
1,250-mile perimeter at Reagan National Airport.
    The House-passed FAA bill would increase by 10, the number of 
beyond the perimeter slots for take-offs and landings at Reagan 
National Airport during the busier part of the day. It would accomplish 
this by shifting unused slots from the early morning and late evening. 
The Senate-passed FAA bill was silent on the issue--but not for a lack 
of trying. As you know, there is new proposal for addressing beyond the 
perimeter slots that involves both time shifting a limited number of 
slots and conversion of thirty-two existing slots from large hubs 
within the perimeter to Reagan National to beyond the perimeter 
flights. The number of slots an airline operating slots at Reagan 
National would be able to convert is based on the number of slots it 
already operates. Today, over 80 percent of the slots are controlled by 
U.S. Airways, Delta Airlines, and American Airlines. Twenty-five years 
ago, these same three airlines only operated 25 percent of the slots. 
Under the proposal, the FAA would have to approve or disapprove the 
entire package of proposed converted flights. The FAA could not 
disapprove of any single proposed converted flight.
    It is also important to note that last year, US Airways requested 
an FAA waiver to trade some of the takeoff and landing slots it 
operates at LaGuardia Airport for some of the takeoff and landings 
slots Delta operates at Reagan National Airport. The Department of 
Justice weighed in, stating that it considers the availability of slots 
as a substantial barrier to entry at Reagan National. It raised 
concerns that competition at Reagan National will be reduced if the 
airlines' waiver request was agreed to, as proposed. This led to the 
FAA making its approval conditional on the divestiture of some slots at 
each airport.
    These conditions were not acceptable to the airlines. US Airways 
and Delta decided not to go ahead with their swap. Instead, they chose 
to go to court and challenge the FAA's authority to consider their 
proposal's effect on competition at each of the airports.
    If the airlines prevail in court, US Airways would control 54 
percent of Reagan National's slots, American would control 15 percent 
of the slots, Delta Airlines control 13 percent of the slots, the 
merged United-Continental would control 10 percent of the slots; with 
all other airlines sharing the remaining 8 percent of the slots. The 
same three airlines would still operate more than 80 percent of all 
slots, only now US Airways would operate over 3.5 times as many slots 
as its next closest competitor.
    While Reagan National would still not be considered to be a 
fortress hub for US Airways if the swap goes through, you can see 
things heading in that direction. The airline would have significant 
market power and very little direct competition on most routes. As the 
FAA noted in its conditional approval of the waiver request, ``If the 
slot transaction was to be approved as proposed and US Airways and 
Delta were to increase their presence at DCA and LGA respectively, the 
competitive environment would become significantly more concentrated. 
The carriers would likely rely on their increased dominance to maintain 
or enhance their premium fare structure in markets served at both 
airports. Furthermore, slot restrictions at both airports substantially 
hinder proportional increases in competition by other carriers, and 
higher fares will be sustainable due to the carriers' increased market 
power at both airports. This tentative conclusion is supported by an 
analysis of the carriers' past behavior in similar markets at both 
airports.''
    Slot conversion at any level is problematic because it will provide 
an unfair competitive advantage to select carriers that have a large 
presence at Reagan National Airport. It will allow the dominant 
incumbent carrier or carriers to unfairly strengthen their competitive 
position in the beyond-the-perimeter markets, to the detriment of other 
carriers, particularly those that have only a handful of slots. While 
consumers served on existing beyond the perimeter routes may benefit in 
the near term, they will not benefit in the intermediate term, as the 
history of these dominant carriers is to lower the ticket price to 
drive out the competition, and once there is no competition, keep on 
raising the ticket prices.
    Further, I believe because most carriers use a hub and spoke 
business model, a significant increase in beyond-the-perimeter flights 
at Reagan National will reverberate across the country, impacting 
airlines and routes in ways that really have not been thought through.
    I believe the combination of a favorable court ruling for the 
airlines and this slot conversion proposal would result in an outcome 
that is anti-competitive, anti-consumer, and not in the public 
interest.
    I strongly support a significant increase in beyond the perimeter 
slots at Reagan National to allow the citizens of more Western cities 
to have direct access to their nation's capitol. These should include 
new as well as time-shifted slots. I believe the airport has both the 
additional air side and terminal side capacity to accomplish this.
    There are several large and medium hub airports that deserve the 
opportunity to compete for a direct flight to Reagan National. Our 
approach should be pro-competitive, having a transparent process, and 
with the FAA playing a central role in determining that each route is 
based on the public interest
    I look forward to hearing from the witnesses.

    Senator Dorgan. Senator Cantwell, thank you very much.
    The worst economics I would observe is for Congress not to 
do its job and pass an FAA reauthorization bill. Every airport 
and every region of this country, in my judgment, loses as a 
result of that. So, I don't disagree that we need transparency 
and we need to work hard to find the right solution here, but I 
think failure is not a victory in any circumstance.
    Let me say that the Honorable Susan Kurland is with us, 
Assistant Secretary for Aviation and International Affairs at 
the Department of Transportation. I would say to all five of 
the witnesses that your full statements we made a part of the 
permanent record and we would ask that you summarize.
    Ms. Kurland, you may proceed.

         STATEMENT OF HON. SUSAN L. KURLAND, ASSISTANT

       SECRETARY FOR AVIATION AND INTERNATIONAL AFFAIRS,

       U.S. DEPARTMENT OF TRANSPORTATION; ACCOMPANIED BY

           MICHAEL J. SAMMARTINO, DIRECTOR OF SYSTEM

          OPERATIONS, FEDERAL AVIATION ADMINISTRATION,

               U.S. DEPARTMENT OF TRANSPORTATION

    Ms. Kurland. Thank you Chairman Rockefeller, Senator 
Dorgan----
    Senator Dorgan. Could you turn your microphone on please?
    Ms. Kurland. Thank you so much, Chairman Rockefeller, 
Ranking Member Hutchison, Chairman Dorgan, Ranking Member 
DeMint, and members of the Subcommittee.
    Thank you for the opportunity to appear before you today to 
discuss the Department of Transportation's role regarding 
operations at the two Metropolitan Washington Airports 
Authority airports, National Airport and Washington Dulles 
International Airport. Given Congress's unique interest in DCA, 
the Department of Transportation has consistently, through many 
administrations, deferred to the Congress on how best to 
address issues such as capacity and congestion. Accordingly, 
the Department has taken no position as to whether the 
perimeter rule should be modified or terminated or whether more 
flights should be added.
    In 2000, and again in 2003, Congress mandated that DOT 
grant exemptions to the slot rules to permit expanded 
operations at National. Congress also specified the criteria 
that DOT was to apply in making those awards, which included 
promoting air transportation by new air carriers, protecting 
the interests of smaller airports and communities, and for the 
within perimeter exemptions, producing maximum competitive 
benefits, including low fares. Together, those two statutes 
created 24 beyond-perimeter exemptions and 20 within-perimeter 
exemptions, effectively adding an average of three commercial 
flights per hour or approximately 5 percent to the total flight 
operations.
    Under the two statutes, DOT has awarded exemptions that 
have brought non-stop DCA service to large beyond-perimeter 
hubs such as Seattle, Los Angeles, and Las Vegas. Within the 
perimeter, awards have improved competition and brought low 
fares to hubs such as Atlanta and Fort Lauderdale, while 
bringing new non-stop service to smaller communities such as 
Jackson, Mississippi, Chattanooga, Tennessee, and Akron/Canton, 
Ohio.
    Congress also specified, that unlike slots, these 
exemptions cannot be bought or sold or leased, but that they 
must be used for services to the destinations for which they 
were awarded. Because of forfeitures or withdrawals arising 
from mergers and acquisitions or the unexpected 
underperformance of a particular market, DOT sometimes must 
conduct reallocation proceedings.
    And, you know, on May 4, Secretary LaHood and FAA 
Administrator Babbitt jointly issued a final notice on an 
application by Delta and US Airways to exchange certain slot 
holdings at National and LaGuardia Airport. That application 
was occasioned by the need for a waiver from buy/sell 
limitations at LaGuardia before the transaction could proceed. 
DOT and FAA approved the carrier's proposal, which in primary 
part was to exchange 125 U.S. Airway slot pairs at LaGuardia 
for 42 Delta slot pairs at Reagan National, subject to the 
condition that the carriers divest themselves of a number of 
slot pairs at LaGuardia and DCA to new entrants and limited 
incumbent carriers. This would have enabled both airports to 
preserve competition and provide greater public benefits. The 
carriers opted not to accept the Department's conditions.
    In conclusion, let me again emphasize that the Department 
has long recognized Congress's strong interest in capacity, 
congestion, and operational issues at the MWAA airports, 
particularly at National. We look forward to continuing 
cooperation with Congress and with the Airports Authority on 
issues that involve Reagan National and Dulles airports.
    This concludes my prepared remarks. And with me today is 
Michael Sammartino, the FAA's Director of System Operations. We 
thank the Subcommittee for the opportunity to offer these 
comments to you, and on behalf of the Department, we will be 
pleased to answer any questions that you may have.
    [The prepared statement of Ms. Kurland follows:]

 Prepared Statement of Hon. Susan L. Kurland, Assistant Secretary for 
Aviation and International Affairs, U.S. Department of Transportation; 
 accompanied by Michael J. Sammartino, Director of System Operations, 
   Federal Aviation Administration, U.S. Department Of Transportation
    Chairman Rockefeller, Ranking Member Hutchison, Chairman Dorgan, 
Ranking Member DeMint, and members of the Subcommittee----

Introduction
    Thank you for the opportunity to appear before you today to discuss 
the Department of Transportation's role regarding operations at the two 
Metropolitan Washington Airports Authority airports, Ronald Reagan 
Washington National Airport and Washington Dulles International 
Airport. With me today is Mike Sammartino, Director of System 
Operations for the Federal Aviation Administration's Air Traffic 
Control System Command Center.
    For many years, Congress has shown a unique interest in the 
metropolitan Washington airports. In 1940, Congress authorized the 
Federal Government to acquire a tract of land near the Capitol and 
construct what is now Reagan National. As of 1959, the newly-created 
Federal Aviation Administration took over the operation of that 
airport. Shortly afterwards, Congress determined that a second major 
airport, Washington Dulles International Airport, should be established 
to serve the Washington, DC region and be owned and operated by the 
FAA. Dulles opened in 1962. These are the only two major commercial 
airports that have been authorized and established by Congress.
    In December 1984, an advisory commission established by then-
Secretary of Transportation Dole found that the two airports were well 
managed by the FAA but needed extensive capital improvements, in order 
to respond to the growing commercial and air travel needs of the 
region, and that those improvements could not be financed by the 
Federal Government alone. The Commission recommended that Congress 
transfer control of the airports to a Congressionally-approved regional 
authority that would have the authority to issue tax-exempt bonds to 
finance capital improvements at the airports. In April and December 
1985, respectively, Virginia and the District of Columbia each enacted 
legislation creating a regional authority to acquire Reagan National 
and Dulles airports from the Federal Government.
    Also in 1985, the Department of Transportation transmitted a 
legislative proposal for transfer of the airports that was consistent 
with the advisory commission report, and legislation was enacted in 
October, 1986 that authorized the transfer of the airports to the 
regional authority, known as the Metropolitan Washington Airports 
Authority (MWAA). The transfer was executed by means of a 50-year long-
term lease, which was subsequently amended to extend until 2067. The 
Congressional purpose was to ``achieve local control, management, 
operation, and development of these important transportation assets.'' 
Key among Congress's findings was that ``the U.S. Government has a 
continuing but limited interest in the operation of the 2 federally-
owned airports,'' and that ``operation of the [two airports] by an 
independent local authority will facilitate timely improvements at both 
airports to meet the growing demand of interstate air transportation 
occasioned by the Airline Deregulation Act.''
    The Transfer Act also employed two important and unique operational 
constraints at National--the ``slot'' rule and the ``perimeter'' rule. 
Congress applied the High Density Slot Rule (HDR) to Reagan National by 
prohibiting MWAA from either increasing or decreasing the number of 
instrument flight rule take-offs and landings authorized by the HDR as 
of October 1986, or imposing a passenger cap there. Second, Congress 
prohibited an air carrier from operating nonstop air transportation 
from National and another airport more than 1,250 statute miles away. 
Reagan National is the only commercial airport in the United States at 
which Congress has imposed such constraints.
    By incorporating FAA's existing rules into MWAA's operation of 
Reagan National, each flight operation must have a slot from the 
Federal Aviation Administration, with the total number of take-offs and 
landings limited to 48 commercial slots per hour, of which 11 are for 
commuter aircraft, during an 18-hour period from 6 am to midnight. 
Further, 12 additional slots per hour are available to general aviation 
or other aircraft that do not operate on a scheduled basis, such as 
military or corporate aircraft.
    Given Congress' unique interest in and attention to operations at 
Reagan National Airport, the Department of Transportation--consistently 
through many administrations--has deferred to the Congress on how best 
to address issues such as capacity and congestion. Accordingly, the 
Department of Transportation has taken no position as to whether the 
perimeter rule should be modified or terminated altogether, or whether 
the airport should add more flights.
    We can, however, state, as we have in the past, that FAA's traffic 
programs and procedures can accommodate some increase in commercial 
operations at Reagan National, within the existing cap, with the 
precise number of additional flights that can be accommodated dependent 
on the fleet mix and the runway use that would be required.
    The Department has also focused on its role as steward of the 
specific statutory requirements that apply to Reagan National Airport 
and the Congressional goals and objectives that underlie them. 
Accordingly, we have sought to ensure that there is continuing 
compliance with the laws and principles established by Congress, as 
well as to implement new statutory requirements. In that role, the 
Department, for example, is currently conducting a carrier selection 
proceeding for two open slot exemptions, and recently proposed a 
limited divestiture of slots in connection with a major proposed 
transaction between US Airways and Delta involving a swap of slot 
holdings at Reagan National and LaGuardia airports.

Slot Exemptions
    In 2000, with enactment of the Wendell H. Ford Aviation Investment 
and Reform Act for the 21st Century (``AIR-21''), Congress mandated 
that the Department grant exemptions to the slot rules to allow for 
expanded operations at Reagan National. At that time, it directed that 
the Secretary award 12 slot exemptions for service beyond the 
perimeter, and 12 more within the perimeter. It also specified the 
criteria that the Department of Transportation was to apply in making 
these awards, which included promoting air transportation by new 
entrant air carriers, protecting the interests of smaller airports and 
communities, and, for the within-perimeter exemptions, producing 
maximum competitive benefits, including low fares.
    In 2003, Congress expanded the slot exemption program with the 
Vision 100--Century of Aviation Reauthorization Act. It added 12 more 
beyond-perimeter exemptions, to a total of 24, and 8 more within-
perimeter ones, to a total of 20. Together, the two statutes 
effectively added an average of three commercial slots per hour, or 
about 5 percent to the total slot operations.
    In implementing its authority under the two statutes, DOT awarded 
exemptions that brought nonstop DCA service to large beyond-perimeter 
hubs such as Seattle, Los Angeles and Las Vegas. Within the perimeter, 
the awards have improved competition and brought low fares to hubs like 
Atlanta and Fort Lauderdale, while bringing new nonstop service to 
smaller communities such as Jackson, MS; Chattanooga, TN; and Akron/
Canton, OH.
    Congress also specified that, unlike HDR slots, these exemptions 
cannot be bought, sold, or leased, so they must be used by the slot 
exemption holder for service to the particular destinations for which 
they were awarded. Because of forfeitures or withdrawals arising due to 
mergers and acquisitions, or the unexpected underperformance of a 
market, DOT sometimes must conduct reallocation proceedings. We have 
one such proceeding currently underway, affecting two exemptions 
originally awarded to Midwest Airlines for service to Kansas City. That 
airline has now ceased to exist as a carrier after its acquisition by 
Republic Airways. We have solicited applications for these two 
exemptions, with carriers being invited to propose service that they 
believe would fit the statutory criteria (which could of course include 
service to Kansas City as well as other destinations). Since this is an 
ongoing proceeding, it would not be appropriate for me to address the 
substance of the matters involved, but I can assure you that we will 
consider each application on its merits, and in accordance with the 
selection criteria that Congress has set out.

The Proposed U.S. Airways/Delta ``Slot Swap''
    On May 4, Secretary LaHood and FAA Administrator Babbitt jointly 
issued a final notice on an application by Delta and US Airways to 
exchange certain slot holdings at Reagan National and LaGuardia 
Airports. That application was occasioned by the need for a waiver from 
buy-sell limitations in the LaGuardia Order before the transaction 
could proceed. The carriers' proposal in primary part was to exchange 
125 U.S. Airways' slot pairs at LaGuardia for 42 Delta slot pairs at 
Reagan National. We reviewed the slot swaps as a single, unified 
transaction, because we found the LaGuardia slots purchase and sale 
would not occur without the Reagan National slots purchase and sale, 
and vice versa. We granted the carriers' petition for a waiver from the 
limitations in the LaGuardia Order subject to the condition that the 
carriers divest themselves of a number of slot pairs at LGA and DCA. 
The slot divestitures, to be made to new entrants and limited incumbent 
carriers, would have enabled both airports to preserve competition and 
provide greater public benefits and increased efficiencies. The 
carriers opted not to accept the Department's conditions.
    In the course of our analysis of that proposed transaction, we 
observed a number of characteristics concerning service at Reagan 
National that may be of interest to the Committee. We found that:

   Reagan National is a relatively high-fare airport, having 
        the third highest fare premium of the 121 city markets that 
        were examined;

   For a large portion of passengers, especially time-sensitive 
        passengers, the three airports in the Baltimore-Washington 
        metropolitan areas are not effective substitutes for each 
        other, with price competition from Thurgood Marshall Baltimore-
        Washington Airport and Dulles International Airport not 
        effectively disciplining the fares at Reagan National;

   There is a relatively low level of competition afforded by 
        low cost carriers at Reagan National, with only 3.3 per cent of 
        the slots held by them; and

   Barriers to entry continue to exist at the airport, in 
        particular as the secondary slot market has not facilitated the 
        degree of new competition by either new entrants or limited 
        incumbents as originally envisaged.

On-Time Statistics
    As you may know, the Department compiles and publishes data showing 
on-time performance at the Nations' major airports, and on this score 
Reagan National and Dulles fare reasonably well compared to other large 
hub airports. From January through June of 2010, 84.2 percent of the 
departures from Reagan were on-time, and 81.4 percent of those from 
Dulles. The average on-time performance at large hubs over the same 
time period was 79.1 percent.

Conclusion
    In conclusion, let me stress again that the Department has long 
recognized that Congress has maintained a strong interest in capacity, 
congestion, and operational issues at the MWAA airports, particularly 
Reagan National.
    We look forward to continuing cooperation with the Congress, and 
with the Airports Authority, in assuring that Reagan National and 
Dulles provide our Nation's capital with gateways that are safe, 
modern, convenient, and affordable.
    This concludes my prepared remarks. I thank the Subcommittee for 
the opportunity to offer these comments to you on behalf of the 
Department, and I will be pleased to answer any questions that you may 
have.

    Senator Dorgan. Secretary Kurland, thank you very much for 
your testimony and for being here. And Mr. Sammartino, thank 
you for accompanying her, and I understand you will be 
available for questions as well.
    Next, we'll hear from Mr. Lee Kair, the Assistant 
Administrator for Security Operations at the Transportation 
Security Administration.
    Mr. Kair, you're welcome to begin.

                   STATEMENT OF LEE R. KAIR,

        ASSISTANT ADMINISTRATOR FOR SECURITY OPERATIONS,

            TRANSPORTATION SECURITY ADMINISTRATION,

              U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Kair. Good afternoon, Chairman Dorgan, Chairman 
Rockefeller, and distinguished members of the Subcommittee. 
Thank you for the opportunity to appear before you today to 
discuss the Transportation Security Administration's passenger 
screening operations at the Washington Metropolitan Area 
airports. I appreciate the Subcommittee's leadership in 
ensuring the security of our nation's aviation system.
    While the security of the traveling public is core--is a 
core component of TSA's mission, we are also committed to 
maximizing efficiency and convenience to passengers. We 
constantly strive to improve the effectiveness and efficiency 
of TSA people, process, and equipment in our nation's airports, 
including those in the Washington metropolitan area.
    TSA has the flexibility to meet the evolving of our airport 
and airline partners. When aviation operations change, so does 
TSA. Our stacking allocation model guides in determining 
staffing and equipment requirements needed to provide efficient 
world-class security when circumstances change in the fast-
paced airline and travel environment. As part of that process, 
TSA works closely with airport authorities around the country, 
including the Metropolitan Washington Airports Authority or 
MWAA.
    As you know, MWAA includes Ronald Reagan Washington 
National Airport or DCA, where TSA processes more than 8 
million passengers and 4 million pieces of luggage each year. 
TSA has four security checkpoints in three DCA terminals and 
more than 580 transportation security officers screen 
approximately 22,000 passengers and 11,000 pieces of checked 
baggage each day.
    With constant improvements to our staffing, the processes, 
the wait time to clear security at DCA for many passengers is 
very short, and for almost 100 percent of passengers, the wait 
time has been less than 20 minutes during the current fiscal 
year.
    In addition to our people and processes to screen airline 
passengers efficiently and effectively, technology is also 
critical to the accomplishment of our security mission. DCA was 
the first airport where TSA provided intelligence information 
to its workforce through TSA's Network Information Officer 
Program. DCA was the first airport where TSA employees screened 
100 percent of cargo with explosive trace detection screening, 
one of several allowable technologies utilized for screening 
cargo. DCA is the recipient of American Recovery and 
Reinvestment Act funds for the improvement of existing closed 
circuit television security systems. And DCA also significantly 
improved its passenger screening capabilities in July and 
August of this year with the deployment of four advanced 
imaging technology or AIT units for primary screening.
    TSA has become the world leader in the deployment of 
advanced imaging technology, which enables our transportation 
security officers to quickly identify both metallic and non-
metallic threat items that could be hidden on a passenger's 
body. In addition to DCA, TSA is deploying AIT machines to 
airports throughout the country, including future deployment at 
Washington Dulles International Airport. Throughout the 
deployment process with have strived to maximize threat 
detection in customer/passenger throughput while also 
addressing concerns regarding safety, and civil rights and 
liberties.
    TSA's operation at DCA is a solid example of how TSA 
constantly operationalizes intelligence to close 
vulnerabilities and strengthen our layered security network. 
Because our people are our most important and adaptive 
resource, TSA ensures that its personnel are on the front lines 
of aviation security, have the information, equipment, 
training, and skills needed to respond to threats in the most 
effective manner. This high-functioning TSA airport workforce, 
coupled with our strong ongoing relationships with airport 
authorities like MWAA, help us deliver world-class security 
efficiently and effectively in the fast-paced U.S. airport 
environment.
    Thank you for the opportunity to appear before you--before 
the Committee today. I appreciate your support in achieving our 
shared security goals, and I'm happy to answer any questions 
that you may have.
    [The prepared statement of Mr. Kair follows:]

Prepared Statement of Lee R. Kair, Assistant Administrator for Security 
Operations, Transportation Security Administration, U.S. Department of 
                           Homeland Security

    Good afternoon, Chairman Dorgan, Ranking Member DeMint, and 
distinguished members of the Subcommittee. Thank you for the 
opportunity to appear before you today to discuss the Transportation 
Security Administration's (TSA) passenger screening operations at the 
Washington Metropolitan Area airports. I appreciate the Subcommittee's 
leadership in ensuring the security of our Nation's aviation 
operations.
    When TSA Administrator John Pistole appeared before the full Senate 
Commerce, Science, and Transportation Committee last June for his 
confirmation hearing, one of the major topics of discussion was the 
importance of TSA maintaining a passenger screening system that fully 
secures our Nation's aviation network while maximizing efficiency and 
effectiveness and minimizing inconvenience to passengers. This is a 
critical component of TSA's mission, and one to which we adhere 
rigorously not only at the Washington Metropolitan Area airports, but 
at all of the more than 450 airports throughout the United States. We 
constantly strive to improve the effectiveness and efficiency of our 
systems, as well as the performance of our personnel to ensure the 
safety and security of the traveling public in all modes of 
transportation, including aviation.
    TSA's core mission is protecting the traveling public from the 
evolving terrorist threat, and we are constantly working to close 
vulnerabilities with new technology and new processes via a complex 
layered security network. We are often confronted with suspicious 
incidents and potential threats occurring throughout the worldwide 
aviation network, and we must be ready to respond to anything we might 
encounter. Our overall goals are to enhance human decision-making and 
to ensure that our personnel on the front lines of aviation security 
have the information, resources and skills needed to respond to any 
threat in the most effective manner.

Ninth Anniversary of 9/11 Attack Marked by Strong Workforce, Technology 
        Advances
    Only 5 days ago, we commemorated the ninth anniversary of the 
terrorist attacks of September 11. The terrible images of that day are 
a constant reminder that we operate in a high-threat environment and 
must remain ever vigilant against those who would use our Nation's 
transportation system to do us harm.
    In the aftermath of the 9/11 attacks, this committee played a 
critical role in developing and implementing the framework for a more 
secure national transportation system. In creating TSA, a dedicated 
workforce was put in place to provide a layered security network that 
now includes constant evaluation of intelligence information related to 
transportation security, close collaboration with industry and 
government partners, Transportation Security Officers (TSOs) at airport 
security checkpoints, Behavior Detection Officers assessing passengers 
that may pose a threat to aviation security, Federal Air Marshals 
traveling on domestic and international flights, canine teams providing 
visible deterrence and a reliable explosives detection capability, and 
Transportation Security Inspectors monitoring aviation, rail, and mass 
transit operations.
    Additionally, TSA is constantly deploying the most effective 
technology to combat the evolving threat to the transportation sector. 
TSA has become a world leader in the deployment of Advanced Imaging 
Technology (AIT) that will strongly advance our ability to detect a 
wide array of threats in the aviation system. AIT enables TSOs to 
quickly identify potential security threats, both metallic and non-
metallic, that could be hidden on a passenger's body. We are deploying 
AIT machines to airports throughout the country, and working to 
maximize threat detection and customer throughput, while also 
addressing concerns regarding safety, civil rights and civil liberties.
    AIT is only one of many advanced technologies designed to improve 
our threat detection capabilities while minimizing passenger 
inconvenience. Through such technologies, TSA is equipping its 
workforce of 45,000 TSOs with the resources needed to safely process 
nearly 2 million passengers every day.

Security Operations at Washington Metropolitan Area Airports
    TSA is an intelligence-driven agency that employs a risk-based 
strategy to secure U.S. transportation systems from the evolving 
terrorist threat, working closely with stakeholders in all 
transportation sectors. As technology advances and our screening 
protocols are constantly adjusted to safeguard the traveling public, we 
remain dedicated to keeping Americans safe while they fly, while also 
protecting the civil rights and civil liberties of passengers, 
maintaining quick passenger throughput at security checkpoints, and 
providing quality customer service. These issues are extremely 
important at all of our Nation's airports, including Washington Dulles 
International Airport (IAD) and Ronald Reagan Washington National 
Airport (DCA)--two of our country's busiest airports.
    IAD averages 423 international departures and over 2,500 domestic 
departures per week and is serviced by 31 air carriers. There are 3 
concourses, 143 gates, and 4 runways. IAD has 5 security checkpoints 
with a total of 34 lanes, and passenger and baggage screening is 
performed by nearly 700 TSOs. TSOs at IAD screen approximately 25,000 
passengers and 20,000 pieces of checked baggage each day.
    IAD will receive significant security and operational enhancements 
in the coming years: three terminals will convert to Inline Baggage 
Systems from 2011 to 2013, and American Recovery and Reinvestment Act 
(ARRA) funding will add an additional 300 closed-circuit television 
(CCTV) cameras to IAD in February 2011. AIT units are scheduled for 
deployment to IAD beginning this fall.
    Since opening two Mezzanine Security Checkpoint areas at IAD in 
September 2009, we have made dramatic improvements in wait times. The 
wait time for passengers going through security checkpoints at IAD has 
been less than 20 minutes for 99 percent of the traveling public during 
the current Fiscal Year. The addition of the security mezzanines, 
combined with the planned conversion to Inline Baggage Systems and the 
deployment of AIT equipment, will enhance both IAD's functionality and 
security posture.
    DCA processes over 8 million departing passengers and 4 million 
pieces of luggage each year and is serviced by 12 airlines operating at 
44 gates. DCA has three terminals and four security checkpoints, and 
passenger screening is performed by more than 580 TSOs. TSOs at DCA 
screen approximately 22,000 passengers and 11,000 pieces of checked 
baggage each day. The wait time for passengers going through security 
checkpoints has been less than 20 minutes for almost 100 percent of the 
traveling public during the current fiscal year.
    DCA was the first airport to provide intelligence information to 
the workforce through TSA's Network Information Officer Program, and it 
was the first airport to screen 100 percent of cargo with Explosives 
Trace Detection screening, one of several allowable technologies 
utilized for screening cargo. DCA is the recipient of ARRA funds for 
the improvement of existing CCTV systems. And DCA also improved its 
passenger screening capabilities in July and August of this year with 
the installation of four AIT units deployed in the primary screening 
position.

Conclusion
    Thank you for the opportunity to appear before the Committee today 
to speak about TSA's passenger screening operations at our Washington 
Metropolitan Area airports. I appreciate your support in achieving our 
shared security goals, and I am happy to answer any questions you may 
have.

    Senator Dorgan. Mr. Kair, thank you very much.
    Next, we'll hear from the Honorable Charles Darwin 
Snelling, the Chairman of the Board of the Metropolitan 
Washington Airports Authority.
    While I call on you, Mr. Snelling, let me by consent 
include in the record an opening statement by Senator Kay 
Bailey Hutchison, who's not able to be with us today.
    [The prepared statement of Senator Hutchison follows:]

  Prepared Statement of Hon. Kay Bailey Hutchison, U.S. Senator from 
                                 Texas

    Senator Dorgan, thank you for convening today's hearing on the 
Metropolitan Washington Airports Authority and the existing perimeter 
rule at Reagan National Airport.
    The Senate passed its FAA reauthorization bill on March 22, 2010, 
by an overwhelming vote of 93-0. After 5 months of extremely difficult 
negotiations with the House and three plus years of short-term 
extensions, we are at a crucial point in the process. For the sake of 
the air traveling public, this is a time for reason and compromise, not 
objection.
    The differences between the House and Senate passed FAA bills were 
stark and several highly controversial items were contained in the 
House bill. We have done our best to address those issues and I commend 
Senator Dorgan, and Chairman Rockefeller for their leadership in 
helping craft a very reasonable compromise.
    Unfortunately, one of the issues we still find ourselves at odds 
over is the DCA perimeter rule. I, for one, can certainly appreciate 
the nuances and difficulty in dealing with airport perimeter 
regulations, as I spent several years dealing with the ``Wright'' 
Amendment.
    However, I cannot fathom the level of objection to a compromise 
provision that in essence only adds five ``new'' flights to an airport 
that the Government Accountability Office has indicated has the 
capacity to handle more traffic in an effort to supposedly protect the 
special interest of one of the largest airports in the United States--
and one that already handles far more passengers annually than Reagan 
National.
    When we started debate on this issue, several members of this 
committee and the Senate simply wanted to repeal the DCA perimeter 
rule. Through Senate floor discussion and verbal commitment, we agreed 
to move forward in an effort to find a reasonable solution, knowing 
passage of the underlying FAA reauthorization was extremely important 
to improving aviation safety and air traffic control modernization.
    Following that process, we crafted a compromise provision, heavily 
weighing the wishes of both those who wanted full repeal and those who 
wanted the status quo.
    The compromise comes down to two concepts: a small number of new 
flights and conversion flights.
    Based on GAO's clear description that DCA can accommodate 
additional capacity we adopted a proposal that would add five ``new'' 
flights that would be set aside for new and limited incumbent carriers. 
These ``new'' beyond the perimeter flights would not only add access, 
but also competition.
    Then, based on the wishes of those wanting to limit the expansion 
of the airport, we crafted a proposal to allow incumbent carriers at 
DCA to ``convert'' a total of 16 existing within-the-perimeter flights 
to flights beyond the perimeter. By allowing for ``conversions,'' the 
proposal negates the need for additional ``new'' flights and allows 
carriers to better utilize their networks. To provide additional 
comfort with the concept, we also phased the provision in over a 2-year 
period.
    Knowing the sensitivity to the issue, we also included several 
additional criteria on the `conversion' flights, including:

   Evaluation and annual reporting by the Secretary of 
        Transportation ensuring the changes are in the public interest.

   Only existing within-the-perimeter flights from large hub 
        airports could be converted, ensuring small community air 
        service.

   Flights cannot be sold, traded or leased.

   Exemptions may not be operated with wide-body aircraft, 
        limiting aircraft size to address noise concerns.

   MWAA is provided the ability to revenue share between DCA 
        and Dulles, providing financial stability and equal footing 
        with other airport authorities.

    Surprisingly, this compromise proposal is somehow not enough. Quite 
frankly, I find this hard to believe and unacceptable, especially since 
the entire FAA reauthorization bill hangs in the balance.
    We have put forth a modest proposal that increases carrier 
flexibility, competition, travel options, protects small communities, 
is in a market that has demand, at an airport that has additional 
capacity, without significantly impacting other surrounding airports. 
If that isn't compromise, then I don't know what is.

    Senator Dorgan. Mr. Snelling, you may proceed.

           STATEMENT OF HON. CHARLES DARWIN SNELLING,

           CHAIRMAN, METROPOLITAN WASHINGTON AIRPORTS

                            AUTHORITY

    Mr. Snelling. Good afternoon, Chairman Dorgan and members 
of the Committee, my name is Charles Darwin Snelling, and I am 
Chairman of the Metropolitan Washington Airports Authority. I 
am pleased to appear today, together with our President and 
Chief Executive Officer, Lynn Hampton, to testify on our 
stewardship in operating Ronald Reagan National and Washington 
Dulles International Airports on behalf of the Nation.
    The Airports Authority was created on October 18, 1986, the 
date President Reagan signed the Metropolitan Washington 
Airports Act, by an Interstate Compact between the Commonwealth 
of Virginia and the District of Columbia. In that Act, the 
Congress authorized the Secretary of Transportation to lease 
National and Dulles Airports to the Airports Authority for 50 
years. Up to that time, both Airports had been built and 
operated by the Federal Aviation Administration and its 
predecessors.
    The lease between the United States and the Airports 
Authority was executed in March 1987, and the Authority took 
over operations in June. The lease has since been extended to 
2067. Under the lease, all property of the two Airports, 
including the Dulles Access Highway, was transferred to the 
Airports Authority, along with the authority and responsibility 
to operate, promote, protect, improve and develop the Airports. 
The purpose of the Airports Authority's creation and the 
transfer to it of the region's two airports--and the clear 
direction to the Airports Authority--was to provide the funding 
the Federal Government couldn't for the development of these 
airports into world class facilities befitting their status as 
the airports serving the Nation's capital.
    Equally clear was that this purpose and direction were to 
be pursued by the Airports Authority at National Airport in a 
manner consistent with traditional limitations relating to the 
number of flights or slots and a perimeter applicable to non-
stop flights, that Congress established by statute at the time 
it authorized the transfer. At the time of the transfer, 
Linwood Holton, former Governor of the Commonwealth of 
Virginia, at the time serving as the Chairman of the Advisory 
Commission on the Reorganization of the Metropolitan Washington 
Airports, testified, ``The continuing debates over operating 
policy, particularly at National will end. As part of the 
transfer, a statutory freeze would be in place on growth in air 
traffic at National. This will enable the new authority to plan 
on long overdue improvements there without uncertainty about 
the future use of the Airport.'' Governor Holton, by the way, 
became the first Chairman of the Metropolitan Washington 
Airports, serving 6 years, a feat unmatched by his successors.
    The Airports Authority now consists of 13 Members, 
generally known as the Board of Directors, with 3 Members 
appointed by the President of the United States, 5 appointed by 
the Governor of Virginia, 3 by the Mayor of the District of 
Columbia, and 2 by the Governor of Maryland. I was appointed to 
the Authority by the President in 2003, and elected Chairman 
for a second annual term by my colleagues just this month.
    The Authority today employs more than 1,400 people in an 
organizational structure that includes central administration, 
airports management and operations, and public safety, and more 
recently, the operation of the Dulles Toll Road on the 
Authority's right-of-way.
    The Airports Authority's operations are not taxpayer-
funded, but are self-supporting, using airline landing fees, 
terminal rents, and revenues from concessions to fund operating 
expenses at both Airports. Our capital program is funded by 
revenue bonds secured by the same revenues, with additional 
support from grants from the Airport and Airways Trust Fund and 
passenger facility charges, which in turn are fees on aviation 
activities and passenger tickets.
    In order to ensure modern and efficient ground 
transportation service to Dulles International Airport, the 
Airports Authority has recently assumed responsibility for the 
operation of the Dulles Toll Road from the Commonwealth of 
Virginia and the construction of a 23-mile extension of the 
Washington Monorail System to Dulles and beyond into Loudoun 
County. Most of this rail extension will be located within the 
median of the Dulles Airport Access Highway, which is legally a 
part of Dulles Airport and therefore covered by our lease.
    When Congress authorized the lease with the Airports 
Authority and entrusted to us the operation and development of 
the region's two federally-owned Airports in accordance with 
the direction it provided, it struck a balance among the 
sometimes competing interests of the Airports' many 
stakeholders, including the Federal Government, the airlines, 
Baltimore Washington International Thurgood Marshall Airport, 
the region's local governments and business communities, and 
the residents living near the airports.
    It has been an honor for us to be able to carry out the 
extraordinary vision our leaders left for us, particularly that 
of President Eisenhower and the Congress, in building Dulles, 
with its ten thousand acres, well beyond the developed area in 
the region. It is a facility with capacity for growth that is 
likely to take us comfortably through the 21st Century. No 
other city on the East Coast can match the opportunity for 
airport development in Washington.
    Over the last quarter of a century, the Airports Authority 
has worked diligently to live up to the Congress's expectations 
as stewards of the Metropolitan Washington Airports. We believe 
we have, in large measure, been successful in developing both 
Reagan National and Dulles International Airports into the 
world class facilities that the Congress desired, while 
remaining true to the balance of interests that the Congress 
struck when entrusting the airports to us. We remain fully 
committed to continuing to fulfill our role as stewards of 
Ronald Reagan Washington National and Washington Dulles 
International Airports.
    I'm going to digress for 1 second, if I may, to tell you 
that I owned and operated my own airplane for 50 years, and I'm 
with 100 percent supportive of the need for a reauthorization 
bill, and NextGen is dear to my heart. So, I wish you the best 
on that.
    I would now like Lynn Hampton, the Airports Authority's 
President and Chief Executive Officer, to expand on the 
performance of the Airports Authority over the years and to 
share some of the Airports Authority's financial, management 
and operational characteristics with the Subcommittee.
    Thank you.
    [The prepared statement of Mr. Snelling follows:]

     Prepared Statement of Hon. Charles Darwin Snelling, Chairman, 
               Metropolitan Washington Airports Authority

    Good afternoon, Chairman Dorgan and members of the Committee, my 
name is Charles Darwin Snelling, and I am Chairman of the Metropolitan 
Washington Airports Authority. I am pleased to appear today, together 
with our President and Chief Executive Officer, Lynn Hampton, to 
testify on our stewardship in operating Ronald Reagan National and 
Washington Dulles International on behalf of the Nation.
    The Airports Authority was created on October 18, 1986, the date 
President Reagan signed the Metropolitan Washington Airports Act, by an 
Interstate Compact between the Commonwealth of Virginia and the 
District of Columbia.
    In that Act, the Congress had authorized the Secretary of 
Transportation to lease National and Dulles Airports to the Airports 
Authority for 50 years. Up to that time, both Airports had been built 
and operated by the Federal Aviation Administration and its 
predecessors.
    The lease between the United States and the Airports Authority was 
executed in March 1987, and the Authority took over operations in June. 
The lease has since been extended to 2067. Under the lease, all 
property of the two Airports, including the Dulles Access Highway, was 
transferred to the Airports Authority, along with the authority and 
responsibility to operate, promote, protect, improve and develop the 
Airports.
    The purpose of the Airports Authority's creation and the transfer 
to it of the region's two airports--and the clear direction to the 
Airports Authority--was to provide the funding the Federal Government 
couldn't for the development of these airports into world class 
facilities fitting their status as the airports serving the Nation's 
capital. Equally clear was that this purpose and direction were to be 
pursued by the Airports Authority at National Airport in a manner 
consistent with traditional limitations relating to the number of 
flights, or ``slots,'' and a ``perimeter'' applicable to non-stop 
flights, that Congress established by statute at the time it authorized 
the transfer. At the time of the transfer, Linwood Holton, former 
Governor of the Commonwealth of Virginia, at the time serving as the 
Chairman of the Advisory Commission on the Reorganization of the 
Metropolitan Washington Airports, testified, ``The continuing debates 
over operating policy, particularly at National will end. As part of 
the transfer, a statutory freeze would be in place on growth in air 
traffic at National. This will enable the new authority to plan on long 
overdue improvements there without uncertainty about the future use of 
the Airport.'' Governor Holton, by the way, became the first Chairman 
of the Metropolitan Washington Airports, serving 6 years, a feat 
unmatched by his successors.
    The Airports Authority now consists of 13 Members, generally known 
as the Board of Directors, with three Members appointed by the 
President of the United States, five appointed by the Governor of 
Virginia, three by the Mayor of the District of Columbia, and two by 
the Governor of Maryland. I was appointed to the Authority by the 
President in 2003, and elected Chairman for a second annual term by my 
colleagues just this month. The Authority today employs more than 1,400 
people in an organizational structure that includes central 
administration, airports management and operations, and public safety, 
and more recently, the operation of the Dulles Toll Road on the 
Authority's right-of-way.
    The Airports Authority's operations are not taxpayer-funded, but 
are self-supporting, using airline landing fees, terminal rents, and 
revenues from concessions to fund operating expenses at both Airports. 
Our capital program is funded by revenue bonds secured by the same 
revenues, with additional support from grants from the Airport and 
Airways Trust Fund and passenger facility charges, which in turn are 
fees on aviation activities and passenger tickets.
    In order to ensure modern and efficient ground transportation 
service to Dulles International Airport, the Airports Authority has 
recently assumed responsibility for the operation of the Dulles Toll 
Road from the Commonwealth of Virginia and the construction of a 23-
mile extension of the Washington Metrorail System to Dulles and beyond 
into Loudoun County. Most of this rail extension will be located within 
the median of the Dulles Airport Access Highway, which is legally a 
part of Dulles Airport and therefore covered by our lease.
    When Congress authorized the lease with the Airports Authority and 
entrusted to us the operation and development of the region's two 
federally-owned Airports in accordance with the direction it provided, 
it struck a balance among the sometimes competing interests of the 
Airports' many stakeholders, including the Federal Government, the 
airlines, Baltimore Washington International Thurgood Marshall Airport, 
the region's local governments and business communities, and the 
residents living near the airports.
    It has been an honor for us to be able to carry out the 
extraordinary vision our leaders left for us, particularly that of 
President Eisenhower and the Congress in building Dulles, with its ten 
thousand acres, well beyond the developed area in the region, a 
facility with capacity for growth that is likely to take us comfortably 
through the 21st Century. No other city on the East Coast can match the 
opportunity for airport development in Washington.
    Over the last quarter of a century, the Airports Authority has 
worked diligently to live up to the Congress's expectations as stewards 
of the Metropolitan Washington Airports. We believe we have, in large 
measure, been successful in developing both Reagan National and Dulles 
International Airports into the world class facilities that the 
Congress desired, while remaining true to the balance of interests that 
the Congress struck when entrusting the airports to us.
    We remain fully committed to continuing to fulfill our role as 
stewards of Ronald Reagan Washington National and Washington Dulles 
International Airports.
    I would now like Lynn Hampton, the President and Chief Executive 
Officer, to expand on the performance of the Airports Authority over 
the years and to share some of the Airports Authority's financial, 
management and operational characteristics with the Subcommittee.

    Senator Dorgan. Mr. Snelling, thank you very much.
    Next, we'll hear from E. Lynn Hampton, President and Chief 
Executive Officer of the Metropolitan Washington Airports 
Authority. Ms. Hampton, thank you very much. You may proceed.

 STATEMENT OF E. LYNN HAMPTON, PRESIDENT AND CEO, METROPOLITAN 
                 WASHINGTON AIRPORTS AUTHORITY

    Ms. Hampton. Good afternoon, Chairman Dorgan, and Chairman 
Rockefeller, and members of the Committee. My name, as you 
said, is Lynn Hampton. I am the President and Chief Executive 
Officer of the Metropolitan Washington Airports Authority, 
serving since May 2010. Previously, I served as the Chief 
Financial Officer of the Airports Authority for over 21 years. 
We appreciate this opportunity to appear before the 
Subcommittee. And as the Chairman said, I ask that my entire 
statement be inserted in the record and I will summarize my 
remarks.
    The Metropolitan Washington Airports Act of 1986, or the 
Transfer Act, entrusted the Airports Authority with two 
substantial Federal assets, Reagan National and Dulles 
International, and directed us to operate, improve, and protect 
and develop these airports in a manner befitting their status 
as gateways to the Nation's capital. We believe that over the 
past 24 years, the Airports Authority has done the job Congress 
asked us to do.
    The Transfer Act was the result of the need to make sorely 
needed investments in the airports that were not being made by 
the Federal Government, because we could access the bond 
market. In the Transfer Act, Congress effectively delivered 
four major guidelines to the Airports Authority. First, 
construct needed improvements at both airports. Second, plan 
facilities at Reagan National based on a 37 slot-per-hour rule. 
Third, plan facilities at Reagan National according to the 
1,250 mile perimeter, which Congress placed in the Transfer 
Act. And fourth, plan facilities at Dulles to accommodate 
future growth.
    The Airports Authority has consistently followed these 
guidelines. The master plans for both airports are based on the 
role of Reagan National as a short, medium, and medium haul 
airport, and Dulles International as the growth airport.
    Since the transfer, the Airports Authority has financed 
approximately $1.2 billion in capital improvements at Reagan 
National, including a one million square foot new terminal, new 
parking garages, roadway systems, and direct connection to the 
Metro rail. These improvements include no significant 
improvements to the airfield. And in accordant with the 
statutes maintained the airport--we maintained the airport's 44 
gates. This was the airport's capacity at the time of transfer.
    The Airports Authority has financed approximately $4.7 
billion in capital improvements at Dulles, based again on 
Congress's transfer guidelines that Dulles be developed for 
future growth. Consistent with Congress's direction and the 
slot and perimeter limitations, passenger traffic at Reagan 
National has remained relatively stable since the transfer. 
From 1987 to 2001, traffic ranged between 15 and 16 million 
passengers. The events of September 11, 2001 resulted in a 
decrease in passenger traffic throughout the entire Nation and 
the world, until the recovery of air traffic in 2004. After the 
enactment of AIR-21 and Vision 100, passenger totals grew at 
Reagan National to a high 18.7 million in 2007. Passenger 
levels decreased to 17.6 million in 2009.
    Passenger traffic at Dulles more than doubled since the 
transfer, from 11 million in 1987 to 23.2 million in 2009. 
Domestic travel at Dulles has historically been more affected 
by the economy, dropping by a million passengers in 2008 and 
another 600,000 in 2009, resulting in 17.2 million passengers 
in 2009.
    International traffic at Dulles is highly dependent on the 
expensive domestic flights that enable passengers to connect to 
international flights. Dulles would not have the robust 
international traffic it has today without the connecting 
domestic service.
    The Airports Authority has managed its financial operations 
in a responsible and prudent manner. Our credit ratings are 
among the highest at any U.S. airport. I should note that 
although Fitch and Moody's recently affirmed our Airports 
Authority's double-A rating, both agencies had modified their 
outlook on our bonds from stable to negative. These negative 
outlooks do not stem from concerns over management of the 
airport or finances, but reflect concerns over the modest level 
of projected growth of the two airports and substantial 
increases in debt service that will be added to airline rates 
and charges, particularly at Dulles.
    When the Airports Authority was originally planned in the 
1950s, land was acquired for the right of way to construct 
transit to the airport. In 2008, the Airports Authority assumed 
the responsibility for the realigned construction and became 
the operators of the Dulles Toll Road, which was previously 
operated by the Virginia Department of Transportation. This 
enables revenues from the toll road to assist in financing the 
rail line. When construction is completed, we will turn the 
rail line over to WMATA to operate and maintain.
    In March 2009, the FTA and the Airports Authority executed 
a full funding grant agreement, which provided $900 in Federal 
funds for Phase 1 of the rail project. This phase will run from 
Interstate 66 near the West Falls Church Metro station to the 
Wiehle Avenue station in Reston. The full funding grant 
agreement provides Federal funding for only the first phase of 
the project. Phase 1 is under construction, providing 1,624 
jobs and is approximately 19 percent complete. It is projected 
to reach substantial completion in the latter part of 2013. The 
second phase of the project will extend the rail line to Dulles 
and beyond, is projected to begin construction in 2012.
    Your invitation letter requested our perspective on the 
recent proposals to modify the slots and perimeter rules. The 
changes being discussed in the Senate would bring Reagan 
National to 33 beyond perimeter departures today, which would 
be more than 50 percent of the current number of beyond the 
perimeter departures at Dulles and would equal the current 
number of beyond the perimeter departures at BWI. We believe 
that a relaxation of the perimeter rule will have an adverse 
effect on both airports. We already are preparing for an 
increase in passengers at Reagan National later this year. 
Delta and JetBlue schedules this fall, while not increasing the 
number of flights, will be utilizing larger aircraft and thus 
increasing the number of available seat miles by as much as 8 
percent. We are anticipating longer lines at some of our 
security screening locations as a result.
    Additionally, with increased beyond-perimeter activity, 
Reagan National is likely to experience an increase in 
connecting passengers. Baggage handling facilities at Reagan 
National are designed to handle departing and arriving 
passengers. Creating more of a hub at Reagan National would 
require significant investment in new baggage handling and 
facility equipment, and we really are limited in space.
    Equally significant is our concern regarding the impact at 
Dulles. Our analysis indicates that Dulles could lose 
approximately 700,000 passengers a year and BWI-Marshall could 
lose 500,000 passengers a year. Decline in Dulles passengers 
prompted by the beyond-perimeter flights at Reagan National and 
the resulting impact of this passenger loss may have on net 
revenues and cost for employment for National would only serve 
to worsen the financial difficulties for airlines at Dulles, 
thereby putting into question the viability of their continued 
presence at the airport.
    Prior to the transfer, the Federal Government adopted 
policies that assigned different roles and functions to these 
airports and represented a conscience balancing of the 
competing interests. At transfer, Congress provided a clear 
roadmap for the Airports Authority. Over the years, the 
Airports Authority has acted in good faith to carry out the 
wishes of Congress.
    Thank you, Mr. Chairman, and I'd be happy to take any 
questions.
    [The prepared statement of Ms. Hampton follows:]

        Prepared Statement of Lynn Hampton, President and CEO, 
               Metropolitan Washington Airports Authority

    Good afternoon Chairman Dorgan and members of the Committee, my 
name is Lynn Hampton, and I am the President and Chief Executive 
Officer of the Metropolitan Washington Airports Authority serving in 
this capacity since May 2010. By way of background, I previously served 
as the Chief Financial Officer of the Airports Authority for over 
twenty-one years.
    We appreciate the opportunity to appear before the Subcommittee 
today to discuss the topics mentioned in your invitation letter, 
including the Airports Authority's financial status, our capital 
investment plans, the Airports Authority's role in constructing the 
Dulles Corridor Metrorail Project, and our views on the perimeter 
restrictions at Ronald Reagan Washington National Airport.
    When Congress enacted the Metropolitan Washington Airports Act of 
1986, it not only consented to the creation of the Airports Authority 
by the Commonwealth of Virginia and the District of Columbia, but also 
entrusted the Airports Authority with two substantial Federal assets, 
Ronald Reagan Washington National Airport (Reagan National) and 
Washington Dulles International Airport (Dulles International) and 
directed us to operate, improve, protect and develop these Airports in 
a manner befitting their status as gateways to the Nation's capital to 
travelers from throughout the world. We believe that over the past 
twenty-four years, the Airports Authority has performed the role well 
and has achieved many of the goals that Congress expected of it.

History of the Airports
    Reagan National Airport was built by the Federal Government and 
opened in 1941. Today, its original geography and airfield layout are 
largely unchanged. Virtually all take-offs and landings are conducted 
on a single runway that is 6,855 feet long. Dulles International, 
located 26 miles west of downtown Washington, also was built by the 
Federal Government, and opened in 1962 with three runways. Today, it 
encompasses more than 11,000 acres and operates with four runways 
(averaging 10,500 feet in length) that can accommodate every commercial 
aircraft currently in operation.
    Although built to handle most of the Washington region's projected 
air traffic, throughout the 1960s and 1970s Dulles International was 
underutilized, while most of the region's air traffic remained 
concentrated at an increasingly congested Reagan National.
    With the Federal Government as the operator of two airports, one 
congested and the other underutilized, the U.S. Department of 
Transportation sought to re-establish and enforce Reagan National's 
role as a primarily short-haul Airport and Dulles International's role 
as the full-service, expansion Airport that would handle the region's 
long-haul and international air service, as well as the region's future 
air traffic growth. In 1981, the Department issued the Metropolitan 
Washington Airports Policy which contained several Federal Aviation 
Administration (FAA) rules to implement these airport roles, including 
rules for Reagan National that:

   Set the number of mainline air carrier flights, or 
        ``slots,'' at 37 per hour;

   Established an annual passenger limit of 16 million;

   Limited night time operations to only the quietest aircraft; 
        and

   Established a perimeter of 1,000 miles beyond which non-stop 
        flights could not fly into or out of the airport.

    In 1986, then Secretary of Transportation Elizabeth Dole worked 
successfully with Congress to develop legislation to transfer operation 
of the two airports to a new independent Airports Authority. This 
decision came about for a number of reasons, but one of the most 
significant was the need to put the airports into the hands of an 
entity that could make investments the airports badly needed, but were 
not being made by the Federal Government, by accessing the bond market 
and issuing debt secured by airport revenue. Also, the transfer of the 
airports to an independent authority would allow it to be self-
supporting, receive needed capital investments, and increase their 
contribution to the growth of the Washington region's economy.

Congressional Direction to the Airports Authority
    The Transfer Act was enacted with the following Congressional 
findings:

   The Federal Government has a continuing, but limited, 
        interest in the operation of the airports;

   An independent local body will facilitate timely 
        improvements at both airports to meet growing air travel 
        demand;

   All other major airports in the United States are operated 
        by public entities at the state, regional, or local level;

   Any change in the status of the two airports must also take 
        into account the interests of the nearby communities, and other 
        interested groups, as well as the interests of the affected 
        Federal and State governments;

    In the Transfer Act, Congress effectively delivered four major 
guidelines to the Airports Authority:

        1. Construct timely infrastructure improvements at both 
        airports to meet the region's demand for air travel;

        2. Plan new facilities at Reagan National based on the FAA 
        ``High Density Rule,'' which limited the number of mainline air 
        carrier operations per hour to 37, and which Congress placed in 
        the Transfer Act, but without the 16 million passenger cap 
        previously adopted by the FAA, which Congress elected to 
        eliminate;

        3. Plan new facilities at Reagan National to accommodate the 
        expected passenger levels and aircraft size associated with 
        non-stop service limited to markets within a 1,250 mile 
        perimeter, which Congress also placed in the Transfer Act; and

        4. Plan new facilities at Dulles International to accommodate 
        short- and long-haul domestic flights, international flights 
        and, along with Baltimore-Washington International Airport, the 
        large majority of future growth in the Washington metropolitan 
        region's air transportation needs.

Airports Authority's Stewardship
    The Airports Authority has consistently followed these guidelines 
in its operation and development of the airports.

1. Master Planning
    In 1988, the Airports Authority adopted the National Airport Master 
Plan which was designed to provide for facilities that would serve the 
projected numbers of passengers at the airport, but would not bring 
about any significant increase in air traffic served at the airport. A 
Master Plan was adopted for Dulles International in 1987, which called 
for doubling the size of the Main Terminal and the addition of new 
midfield terminals and runways to meet the major growth in air travel 
demand projected for the Washington region. Over the years, the 
Airports Authority has amended these master plans, but maintained these 
basic policies.

2. Capital Improvements
    Reagan National--Since the transfer, the Airports Authority has 
financed approximately $1.2 billion in capital improvements at Reagan 
National. The most significant of these improvements was completed in 
1997 with the opening of one million square feet in new terminal space, 
three new parking garages with over 5,000 spaces, a new roadway system 
and direct connections to Metrorail and the garages via two enclosed 
pedestrian bridges. These improvements included no significant 
improvements to the airfield, and, in accord with the statutory 
limitations, maintained the airport's 44 gates, adhering to the airport 
capacity that had existed at the time of the transfer.
    Dulles International--Since the transfer, the Airports Authority 
has financed approximately $4.7 billion in capital improvements at 
Dulles International. Included in these improvements are the following 
major projects:

   Expansion of the Main Terminal in 1996 at a cost of $322 
        million;

   Opening of the new Mid-field ``B'' Concourse at a cost of 
        $145 million in 1998;

   Expansion of a ``B'' Concourse at a cost of $302 million in 
        2008;

   Completion of a new fourth runway and other airfield 
        improvements at a cost of $355 million in 2008; and

   Opening of a new underground train system at a cost of $1.4 
        billion earlier this year.

    These extensive improvements were planned, designed and constructed 
based on Congress's transfer guidelines that, of the two airports, 
Dulles International be developed to accommodate the vast majority of 
the growth in the region's demand for air service, especially long-
distance and international flights.

3. Passenger Service
    Reagan National--Consistent with Congress's direction, largely 
reflected in the slot and perimeter limitations, passenger traffic at 
Reagan National has remained relatively stable since the transfer, 
though recent years have deviated somewhat from this overall pattern. 
From 1987 until 2001, passenger traffic ranged between 15 million and 
16 million passengers a year. The events of September 11, 2001, 
resulted in a 22-day closing of Reagan National and a decrease in the 
passenger traffic for that year to 13.3 million, followed by a further 
decrease in 2002 to 12.9 million. Between 2005 and 2009, after the 
enactment of the Wendell H. Ford Aviation Investment Reform Act for the 
21st Century (AIR-21) and the Vision 100--Century of Aviation 
Reauthorization Act (Vision 100), passenger totals grew at Reagan 
National, to a high point of 18.7 million passengers in 2007. Passenger 
levels decreased to 17.6 million passengers in 2009.
    Dulles International--Passenger traffic at Dulles International 
also has been consistent with Congress's guidelines, more than doubling 
since the transfer, from 11 million passengers in 1987 to 23.2 million 
in 2009. Indeed, with the entry of a low-fare start-up airline 
Independence Air, total passengers at Dulles International, both 
domestic and international, increased to 27 million in 2005. The 
subsequent demise of Independence Air, coupled with rising fuel prices 
and the generally poor economy, resulted in the passenger total at 
Dulles decreasing to 23.2 million in 2009.
    Domestic traffic at Dulles International has historically been more 
affected by economic cycles. Since the mid-1990s, domestic traffic 
generally ranged between 12 million and 16 million. Due to Independence 
Air, domestic traffic ranged between 17.6 million to as high as 18.8 
million in 2007, the year prior to airlines cutting seats due to 
soaring fuel prices and the worsening economy. Domestic traffic dropped 
by a million passengers in 2008 and another 600,000 in 2009 resulting 
in 17.2 million domestic seats at Dulles International in 2009.
    International traffic at Dulles International has grown 
substantially over the years. At the time of the transfer, 
international passengers represented approximately 9 percent of the 
total passengers served by the Airport, and service to six 
international destinations was provided; in 2009, the percentage of 
international passengers had grown to twenty-seven percent, and the 
number of overseas locations to forty-five. It is essential to note 
that this international traffic at Dulles International is highly 
dependent upon the extensive array of domestic flights that enable 
international passengers to connect to these international flights at 
Dulles International. Dulles International would not have the robust 
international traffic it has today without this connecting domestic 
service.
    Cargo operations at Dulles International have similarly grown over 
the years. At the time of the transfer, 208 million pounds of cargo was 
flown in and out of Dulles in 1987. In 2009, this has increased three 
fold to 623 million pounds.

4. Financial Management
    The Airports Authority has managed its financial operations in a 
responsible and prudent manner.
    Each year, the Airports Authority produces financial statements 
that are audited by external certified public accountants, and over the 
years we have regularly received unqualified audit opinions. Also, each 
year audits are performed, in accordance with OMB Circular A-133, to 
review the Airports Authority's compliance with requirements associated 
with the Federal grants we receive. These audits have regularly found 
no significant issues of non-compliance. In addition, each year a 
Comprehensive Annual Financial Report of the Airports Authority's 
financial condition is prepared following guidelines of the Government 
Finance Officers Association of the United States and Canada (GFOA). 
For the past 20 years, the Airports Authority has received a 
Certificate of Achievement from the GFOA, signifying that our annual 
financial reports conform to the highest standards of public financial 
reporting.
    Currently, the Airports Authority's outstanding aviation-related 
debt totals approximately $5.2 billion, with $4.4 billion, or 84 
percent, in fixed-rate general airport revenue bonds. The Airports 
Authority is fortunate to have earned credit ratings on these revenue 
bonds which are among the highest ratings of any airport in the United 
States. Fitch, Moody's, and Standard & Poors each assigns a ``double 
A'' rating to the Airports Authority's aviation credit (``AA,'' ``Aa3'' 
and ``AA-,'' respectively). In its most recent ratings report (July 
2010), Fitch states that ``the AA rating reflects the Authority's well-
established role as an international gateway, historically strong 
financial operations, a strong and growing air trade area and the 
demonstrated ability of management to guide a complex capital 
program.'' In its July 2010 report, Moody's notes the ``strong, 
conservative management of airport operations and careful long-term 
capital planning,'' and in its July 2010 report, Standard & Poors 
points to ``an experienced senior management team overseeing financial 
management and capital development.''
    I should note that, although Fitch and Moody's have recently 
affirmed the Airports Authority's ``double A'' ratings, both agencies 
have modified their outlook for our airport revenue bonds from 
``stable'' to ``negative'' (Standard & Poors maintained the outlook as 
``stable''). These ``negative'' outlooks do not stem from concerns over 
Airports Authority's management of the airports or of its finances. 
Rather, these outlooks reflect concerns over our near-term financial 
flexibility, given the modest level of projected future activity growth 
at the two airports. They also reflect concerns regarding the 
substantial increase in Airports Authority debt service that will be 
added to airline rates and charges, particularly at Dulles 
International, as major capital improvements are completed and come on 
line, and with associated negative trends in debt service coverage 
ratios and cost per enplaned passenger. For instance, average cost per 
enplaned passenger at Dulles International is projected to reach $27, 
which is high compared to similar airports. The Airports Authority is 
working to address these matters, including multiple steps to restrain 
expenditures, and the payment of increased debt service with non-
airline funds.

5. Regional Economic Development
    Both Reagan National and Dulles International have become 
significant economic assets for the Washington metropolitan region.
    Over 7,000 individuals work at Reagan National, and 17,900 at 
Dulles International, including Airports Authority employees and 
personnel associated with the airlines, airport concessionaires and 
other businesses operating at the Airports. It was estimated in 2005 
that the two airports created $6.5 billion in revenues for businesses 
supplying passenger and air cargo services at the airports.
    Many businesses decide to locate in the Washington metropolitan 
region, in significant part, because of the quality and reach of the 
domestic and international air service offered at the Airports. The 
Greater Washington Initiative, a regional marketing and economic 
development organization, cites the global connectivity that is 
provided by the Airports as a key benefit that the region offers new 
businesses. The economic development and land use plans of the region's 
counties and cities are premised, in part, on the presence of the 
airports and the role they play in attracting new employers to the 
region. And, over the years, the Airports Authority has worked to 
develop close relationships with these local governments and their 
citizens, including by working to ensure that airport operations are 
compatible with neighboring communities.

6. Dulles Corridor Metrorail Project
    Since the early planning for Dulles International, an important 
component of the overall vision for the Airport included rapid rail 
transit. When land was acquired in the late 1950s for the Dulles 
Airport Access Highway, sufficient right-of-way was acquired to 
accommodate a transit line to the airport. In 1964, the FAA's Master 
Plan for Dulles International recommended that the median of the Dulles 
Airport Access Highway be reserved for a future transit line.
    However, achieving the reality of rail to Dulles International 
remained elusive over the following decades. It was not until the early 
2000s that efforts had progressed to the point that the Commonwealth of 
Virginia was able to initiate the process for applying to the Federal 
Transit Administration for Federal funds to assist in the construction 
of a rail line to Dulles International. This proposed rail line would 
be an extension of the metropolitan Washington regional Metrorail 
System which has been operated since the mid-1970s by the Washington 
Metropolitan Area Transit Authority (WMATA), would in large part be 
constructed in the median of the Dulles Airport Access Highway, and 
would continue past Dulles International into Loudoun County.
    Subsequently, the Airports Authority submitted a two-part proposal 
to the Commonwealth: first, that the Airports Authority assume 
responsibility for the rail line construction line since it was to be 
located on Airports Authority-leased property in the median of the 
Dulles Airport Access Highway and since major construction activities 
would occur on Dulles International itself; and, second, that the 
Airports Authority become the operator of the Dulles Toll Road, then 
operated by the Virginia Department of Transportation, and use revenue 
from the toll road to assist in financing the construction of the rail 
line.
    Ultimately, the Commonwealth accepted the Airports Authority's 
proposal and, in 2007, the two parties executed an agreement that 
transferred to the Airports Authority the authority to operate the 
Dulles Toll Road and use toll revenue to finance the rail line 
construction, and which placed responsibility for the construction on 
the Airports Authority. At the same time, an agreement was executed by 
Fairfax and Loudoun Counties and the Airports Authority which committed 
each party to share in the funding of the rail line construction. 
Agreement also was reached with WMATA which provided that, following 
WMATA's acceptance of the completed rail line, it would assume full 
responsibility for the line's operation and maintenance.
    In March 2009, the FTA and the Airports Authority executed a Full 
Funding Grant Agreement which provided $900 million in Federal funds 
for the first phase of the rail line project. This phase will run from 
Interstate 66, near the West Falls Church Metro station, to Wiehle 
Avenue in Reston. The Full Funding Grant Agreement provides Federal 
funding for only this phase of the project.
    The first phase of the rail project is currently under 
construction, is providing 1,624 jobs, and is approximately 19 percent 
completed. It is projected to reach substantial completion in the 
latter part of 2013. The second phase of the project, which will extend 
the rail line to Dulles International and beyond into Loudoun County, 
is projected to begin construction in 2012.
Challenges to the Airports Authority and the Two Airports
    While the Airports Authority has accomplished much over the last 
quarter of a century, we face many challenges as we plan for an 
uncertain future.
    The recent economic recession has had a substantial impact on the 
aviation industry and on the two Airports. For instance, the number 
passengers utilizing Reagan National in 2009 was 3.8 percent less than 
at the start of the recession; at Dulles International, the 2009 level 
of passengers was 6.3 percent less.
    In 2010, the aviation industry has seen a positive turn-around. A 
year ago, a number of U.S. airlines were in danger of bankruptcy, while 
this year they are announcing profits. The International Air Transport 
Association (IATA) has reversed its initial projection that the 
industry would lose $5.6 billion in 2010, and now expects profits of up 
to $2.5 billion. However, much of this turn-around is due to airlines 
having eliminated a substantial amount of domestic flight and seat 
capacity over the past 24 months--a reduction that airlines are 
continuing to maintain even as the economy begins to improve.
    While this reduction in capacity may have been good for the 
airlines, it has created difficulties for airports. Airports plan 
capital projects many years in advance due to planning and construction 
lead times. Thus, projects that are now being completed were planned at 
a time when growth in airline capacity was anticipated; unfortunately, 
not only has this growth not occurred, but also in the past 2 years 
capacity has actually been reduced.
    For the Airports Authority, this reduction in airline capacity 
presents a particular challenge at Dulles International due to the 
substantial investments that have made in capital projects which are 
now coming online. The debt service on these completed projects is 
largely funded through airline operations at the Airport. However, with 
the reductions in airline capacity, this debt service is now 
effectively being assigned to reduced airline operations, resulting in 
higher airline costs per enplaned passenger. Moreover, this particular 
challenge, we believe, would be increased by the addition of beyond-
perimeter flights at Reagan National that would further reduce 
passenger levels at Dulles International.

Perspective on the Slot and Perimeter Rules
    As part of the current FAA reauthorization process, proposals have 
been made that would authorize an additional 42 slots (21 slot pairs or 
round-trip flights) at Reagan National that may fly beyond the 1,250 
mile perimeter. Thirty-two of these 42 beyond-perimeter flights would 
be ``conversions'' from within-perimeter hub flights and 10 authorized 
from existing unused off-hour slots (from 6 a.m., 10 and 11 p.m.). 
Currently, 24 beyond-perimeter slots (12 slot pairs or round-trip 
flights) are authorized at Reagan National. Twelve of these existing 
beyond-perimeter slots were authorized in 2000 by AIR-21, and twelve 
slots were authorized in 2003 by Vision 100. Adding 21 slot pairs to 
the 12 existing slot pairs, for a total of 33 slot pairs, would be the 
single largest increase in beyond-perimeter flights at Reagan National. 
This proposed change would bring Reagan National to 33 beyond-perimeter 
departures a day, which would be more than 50 percent of the current 
number of beyond-perimeter departures at Dulles International (59) and 
would equal the current number of beyond-perimeter departures at 
Baltimore Washington International Thurgood Marshall (BWI Marshall) 
(33).
    The Airports Authority believes that such an expansion of beyond-
perimeter slots at Reagan National will have adverse impacts at both 
airports. We are already preparing for an increase in passengers at 
Reagan National later this year. Delta and JetBlue flight schedules for 
this fall, while not increasing the number of flights at Reagan 
National, will be utilizing larger aircraft, thus increasing the number 
of available seats by as much as 8 percent.
    At Reagan National, our primary concern is the effect that 
additional beyond-perimeter flights will have on passenger wait times 
at Transportation Security Administration (TSA) security screening 
locations. An expansion of 42 beyond-perimeter flights a day will, we 
believe, increase the number of passengers arriving at and departing 
from Reagan National by slightly more than one million a year. This 
would represent a 5.7 percent increase over the Airport's 2009 level of 
passengers and would occur primarily in the peak, or busiest, periods 
of passenger activity. Our preliminary analysis suggests that a 
passenger increase of this level will lengthen passenger wait time at 
some security screening locations.
    This concern is heightened by the deployment of Advanced Imaging 
Technology (AIT) screening machines at Reagan National security 
screening locations. With current facility constraints and current 
passenger traffic, we only have space to accommodate four AIT machines 
at the Airport. Two of our four security screening areas, absent major 
facility alterations, cannot accommodate any AIT machines. Greater 
passenger levels will make deploying more AIT machines even more of a 
challenge. The Airports Authority intends to work with TSA to increase 
the deployment of these machines to ensure that Reagan National 
maintains the highest level of passenger security.
    Additionally, with increased beyond-perimeter activity, Reagan 
National is likely to experience an increase in connecting passengers. 
Baggage handling facilities have been developed since the Transfer Act 
primarily to handle departing and arriving passengers. Creating more of 
a ``hub'' at Reagan National could require significant investment in 
new baggage handling facilities and equipment.
    Equally, if not more, significant is our concern regarding the 
impact that 42 new beyond-perimeter flights at Reagan National may have 
on Dulles International. (Impacts are also expected to be experienced 
at BWI Marshall. Our preliminary analysis indicates that these new 
flights would carry on the order of 1.6 million passengers a year, and 
that many of these passengers, were it not for these new flights at 
Reagan National, would be flying into and out of Dulles International 
or BWI Marshall. That analysis also indicates that Dulles International 
could lose approximately 700,000 passengers a year, and BWI Marshall 
could lose 500,000 passengers a year as a result of the new beyond-
perimeter Reagan National flights.
    Such a loss of passengers would, we believe, adversely affect a 
number of airlines operating at Dulles International, by increasing 
their cost per enplaned passenger. For many airlines, the cost of 
operating at Dulles International has recently grown substantially as 
debt service associated with the construction of the Airport's new 
fourth runway and underground automated train system--projects whose 
capital cost totaled over $1.8 billion--has been added to the landing 
fees and other charges assessed the airlines. Our clear concern is that 
the decline in Dulles International passengers prompted by the new 
beyond-perimeter flights at Reagan National, and the resulting impact 
this passenger loss may have on the net revenue and cost per 
enplanement associated with airlines operating at Dulles International, 
will only serve to exacerbate the financial difficulty that operating 
at the Airport now presents for many airlines, thereby putting into 
question the viability of their continued presence at Dulles 
International.

Conclusion
    Prior to the transfer of Reagan National and Dulles International 
to the Airports Authority, the Federal Government took decisive action 
on a number of occasions to establish airport facilities in the 
Washington metropolitan region that would provide the nature and 
quality of air transportation service that the region would require. In 
the course of taking those actions, decisions were made and policies 
were developed that assigned different roles and functions to these 
airports and represented a conscious balancing of competing airport-
stakeholders' interests.
    At the time Reagan National and Dulles International were 
transferred to the Airports Authority, Congress provided a clear 
roadmap for the Airports Authority to follow, and a set of guidelines 
to govern its journey. We believe that, over the years, the Airports 
Authority has acted in accordance with that roadmap and those 
guidelines, and has served as a good steward of the airport assets with 
which it was entrusted. It is in that role as steward that we wish to 
convey our view that altering the slot and perimeter rules applicable 
to Reagan National, along the lines now proposed, will have undesired 
consequences on these important airport assets.
    We do understand the interest of air carriers to serve destinations 
outside the Reagan National perimeter, and we believe we have provided 
excellent facilities at Dulles International for them to provide that 
service. It is, therefore, our recommendation that Congress not alter 
the slot and perimeter rules, thereby adding beyond-perimeter flights 
and passengers to Reagan National, without regard to, and certainly 
without a full and accurate understanding of, the ability of Reagan 
National to absorb the consequences of the slot and perimeter rule 
changes, the impact these changes would have on the traveling public 
and neighboring communities, and the consequences the changes would 
have on the economic sustainability of Dulles International and BWI 
Marshall.

    Senator Dorgan. Ms. Hampton, thank you very much.
    As a matter of courtesy, I suggested that if Senator Ensign 
wished to take the 3-minutes opening statement, I would be 
happy to recognize him.

                STATEMENT OF HON. JOHN ENSIGN, 
                    U.S. SENATOR FROM NEVADA

    Senator Ensign. Thank you, Mr. Chairman. My remarks this 
afternoon will focus on the perimeter rule at Reagan Washington 
National Airport. As we all know, I've long been a critic of 
this anti-competitive and antiquated rule, which prohibits air 
carriers from flying direct routes to the Western United 
States. While Congress has granted a few exceptions over the 
years, travelers in and out of our nation's capital continue to 
be inconvenienced by the hassle and expense of getting to 
Dulles.
    For the past several months members of this committee and 
others have been working on a proposal to make some 
modifications, some modest modifications to the perimeter rule, 
and I am hopeful that Congress can pass the FAA reauthorization 
bill, with this proposal included, very soon. Under our 
proposal, a total of 21 additional round-trip beyond-perimeter 
flights would be allowed, including five new flights awarded to 
new entrant or limited incumbent carriers, and 16 conversion 
flights where new incumbent air carriers could convert existing 
within-perimeter flights to beyond-perimeter flights.
    It is important to note that these converted flights are 
not new flights, rather they are simply replacing existing 
flights that are distributed on a proportional basis according 
to an air carrier's existing service at DCA.
    I understand the that the Metropolitan Washington Airports 
Authority has some concern with relaxing this perimeter, as we 
have heard today, which is why our proposal has a number of 
provisions aimed at addressing some of those concerns. First, 
the Department of Transportation would evaluate the proposed 
flights and be able to collectively disapprove of the 
conversions if they determine they are not in the public 
interest. Second, air carriers are prohibited from selling, 
trading, leasing, or otherwise transferring the flights to fly 
beyond the perimeter. Third, the conversions would be phased in 
over a 2-year period. And finally, carriers may not use wide-
body aircraft in their exemption, insuring that the same 
aircraft with the same quiet technology operating in the 
airport today will be the same aircraft that will be used with 
these exemptions.
    Mr. Chairman, Dulles no longer needs protection. The 
original protection of the rule was to promote Dulles as the 
Washington areas long-haul airport and convert National into 
the region's short-haul airport. Last year, 23 million 
passengers passed through Dulles, which is 6 million more than 
17 million passengers that flew from Reagan. Yet today there 
are only a dozen non-stop flights between Reagan and the entire 
Western United States, four to Denver, three to Phoenix, two to 
Seattle, one to Las Vegas, one to Los Angeles, and one to Salt 
Lake. To put that number in perspective, that is 12 beyond the 
perimeter out of the 400 flights daily. The beyond perimeter 
flights represent just 3 percent of the daily domestic 
operations at DCA. The proposal under discussion would mean 
that more passengers traveling from the West would take a 
direct flight in and out of National, avoiding the 
inconvenience and additional expense associated with getting 
into the city from Dulles. The compromise is a reasonable pro-
competition solution that gives tourists and business travelers 
from around the Nation another option for visiting the Nation's 
capital.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Ensign, thank you very much.
    Well, I thank all of you for the testimony. Let me begin 
some questions. I have a fair number of questions so I will 
abide by the time limit and then we'll have other rounds.
    Ms. Kurland, Secretary Kurland, you indicated that there 
was additional capacity at National, and you cited a 2007 GAO 
report. Is that correct?
    Ms. Kurland. You know, in terms of capacity, I think it 
would be better----
    Senator Dorgan. I'm just asking--your testimony, you cited 
a GAO report saying that there is additional capacity, the 2007 
GAO report says there's additional capacity.
    Ms. Kurland. Right.
    Senator Dorgan. Let me make a point, that in 2007 when GAO 
said there was additional capacity at National, there was 1.1 
million more passengers flying out of National, 1.1 million 
more were flying then and the GAO said, at that moment, there 
is more capacity.
    And so, Ms. Hampton, tell me about the notion that there is 
not enough capacity at National if the GAO says there is and 
we're now 1.1 million below what we used to have when GAO said 
there was additional capacity.
    Ms. Hampton. Yes, sir. I think what the GAO was referring 
to was airside capacity, particularly runway capacity. I think 
many people in this room are familiar with National Airport, 
and if you remember back in 2007, we were totally at capacity 
in our garages at National Airport, people were not able to get 
in our garages. This was the increased air traffic we 
experienced from the AIR-21 and Vision 100 legislative change. 
So it was necessary for us to build a new deck on our parking 
lot.
    Senator Dorgan. So you've done that.
    Ms. Hampton. We have built that deck, yes.
    Senator Dorgan. So, this is about--then it becomes not 
about whether there's runway capacity and the capability of 
more operations at National, the issue garage space and the 
issue of security.
    And so, let me just ask about that for a moment. The 
security representation to us has been it's--now 5 minutes, 
could go to an hour if you do 16 conversions and five 
additional slots.
    Mr. Kair, do you--do you suspect there's a condition under 
which there would be an average one hour wait at any port in 
National if we do 16 conversions, which means no new flights, 
conversions of flights that now exist, and five new slots?
    Mr. Kair. Sir, in general terms, the process that TSA uses 
at every airport is we analyze all of the flight loads and we 
have a staff and allocation model which ensures we have the 
appropriate level of staffing and equipment at every airport to 
meet those demands. And we work with the airport authorities to 
make sure that they have the spaces required in order for 
those--for that equipment and that stocking to be there. So 
there are a lot of variables that go into that, including when 
those flights are and so forth. But, we do commit that we will 
ensure that we will have the proper amount of staffing and 
equipment available for bringing operations there.
    Senator Dorgan. So whatever operations you're managing, 
you're not going to have one hour wait times, I assume, at 
National.
    Mr. Kair. Well, we will ensure that we have the staffing 
and equipment available.
    Senator Dorgan. Let me then ask a question about--you're 
familiar, I believe, Mr. Snelling and Ms. Hampton, on the 
proposed slot swap between LaGuardia and National and between 
the two carriers, US Airways and Delta. And, the slot swap, 
which was proposed and is now apparently not happening. US 
Airways put out a press statement saying, ``We plan to increase 
the number of seats we fly at DCA using larger dual-class jets 
as a result of the swap.'' They talked about up gauging the 
aircraft size, I mean, this was very public. Did Metropolitan 
Washington Airports Authority weigh in on those issues, saying 
that, ``Gosh, if that happens, we may have a million more 
people coming through, we may have hour wait times at the 
portals for security, we may not have garage space,'' and did 
you make comment on that in opposition to that slot swap?
    Ms. Hampton. Mr. Chairman, we have taken it as our 
responsibility to manage the airports to the statutes, and we 
think it would be well served for all of our airlines to 
operate each one of the air carrier slots with an air carrier, 
and we commit that we will work with TSA and others to make 
sure that we handle that.
    Senator Dorgan. That wasn't my question, Ms. Hampton. I'm 
asking when--that proposal was made and press statements were 
made about up gauging the airplanes, increasing the size of the 
airplanes with the slot conversions, very substantial 
conversions, whether Metropolitan Washington Airports Authority 
decided that they should make the point, as they've made to 
this committee and others, that this would be a huge problem, 
that you wouldn't be able to handle the load.
    Ms. Hampton. We did not make that comment because that's 
within our statutes to handle that.
    Senator Dorgan. OK. So, that was something you didn't 
comment on, I guess one would expect that silence assent, or at 
least you had no problem with it.
    Let me also ask a couple of questions--and I'll come back 
to that later--but when Congress created the Authority, my 
understanding was that the ``slots'' were proposed as 25 
percent of the slots for the smaller commuter airplanes and 75 
percent of the slots for the larger jets. Is that accurate?
    Ms. Hampton. I think that's accurate.
    Senator Dorgan. And it is the case now that 55 percent of 
the smaller commuter planes are flying out of National, not the 
25 percent, but 55 percent.
    Ms. Hampton. Actually a little larger, 58.
    Senator Dorgan. All right, all right. And so then, rather 
than 75 percent of the larger jets flying out, we have only 40 
percent of the larger jets.
    Ms. Hampton. That's correct.
    Senator Dorgan. Well, what if you were having to operate 
Washington National based on what Congress indicated to you was 
going to be happening. Would you decide that it wouldn't be 
functional?
    Ms. Hampton. No, sir, Mr. Chairman. We would--we would 
manage those. As I mentioned earlier, it is not just the 
security checkpoints, it's also the baggage areas. We're very 
limited in our baggage area. We would manage; we would work 
with TSA and we would manage. It's really an infrastructure 
issue.
    Senator Dorgan. Did you manage bags for 18.6 million people 
in 2007 at Washington National?
    Ms. Hampton. We did, and that's primarily--primarily 
origination-destination traffic, sir.
    Senator Dorgan. And was that because you had the capacity 
and the facilities to do that?
    Ms. Hampton. Right.
    Senator Dorgan. And did you have parking space, sufficient 
parking space at that point, or at least plans to add parking 
space when your 18.6 million passengers come into National?
    Ms. Hampton. The second statement, we had plans to add 
parking spaces, sir.
    Senator Dorgan. And so, now there's, at least in the last 
calendar year, 17.5 million passengers, a million less.
    And in fact, in your testimony, Mr. Snelling, you 
complained a bit in your testimony that, you know, we've some 
economic troubles in this country and we have fewer people 
flying and that causes kind of a pinch for your revenues and so 
on. And yet, what we have heard incessantly for months now, is 
that your problem is you're going to have too much traffic at 
National. I'm telling you, it doesn't add up, it doesn't add up 
a bit to me.
    And so, I mean I have a lot of questions and my time is 
about exhausted, so I'm going to have to come back to a couple 
of other rounds. But, it just seems to me that you're making a 
case that on its face is preposterous. You have extra capacity 
at the airport, you were flying a million more people in and 
out, you were completely silent when there was a very large 
swap between two of the major carriers, and yet you say that 16 
conversions, no new flights in those 16, just conversions are 
going to be a problem. I mean, I don't have the foggiest idea 
how one gets to that conclusion. But as I indicated, there are 
other questions, I want to ask you about money that you've lost 
on interest rate swaps and other things today, but I want to 
come back to the question of operations, because, as I 
indicated to you, National policy is at this point being 
blocked by this Authority, which Mr. Snelling says is 
sovereign, and it's not.
    So, I will at this point relinquish to the Chair of the 
Committee and others for questions, and at which point I have 
many other questions.
    The Chairman.
    The Chairman. Let me just pick up on a point that you were 
making, expand on it a bit. This Delta/American slot swap, that 
was going to increase the load by about 30-35 percent. You were 
silent on that. So I'm trying----
    Ms. Hampton. On slot swap----
    The Chairman. If that is--if that's the case, and then this 
is verbal discussions that our staff, investigative staff, 
which is who you're going to have a lot of contact in the 
future, had said that it would increase passengers by 30-35 
percent. Now, it took place or it didn't take place, it didn't 
take place. Nevertheless, how do you reconcile these seemingly 
inconsistent positions, you can't take any more passengers, yet 
you allowed that one to go by without comment?
    Ms. Hampton. Sir, our position is regarding passengers from 
beyond the perimeter, which are a different type of passenger 
with different needs at the airport.
    The Chairman. I--my sort of general impression, is when I 
come into D.C., I don't think about what kind of passenger I 
am, am I a perimeter related passenger, I land there, OK, and I 
become part of the baggage handling system and part of the 
security system before I can get on an airplane. And, the 
ordinary passenger is what we're talking about here. I'm not 
talking about perimeters, I'm talking about passengers. The 
statement that some members of this committee have made and 
that I think that your position is, we don't want to change, we 
can't take any more additional noise, we can't any more 
additional passengers, we can't take any more additional 
anything, we can't take any more additional security, we don't 
have any room for additional security. And yet you were willing 
to take 30-35 percent--I don't understand that.
    Now, you haven't explained it, so I just note that. It's 
also my understanding that right now there are about 135 slots 
at National, which are operated with smaller regional jets, but 
that are designated for larger aircraft. And if they're 
designated for larger aircraft, it seems to me that if you're 
going to use these slots efficiently, at some point you're 
going to go to larger aircraft. And if that's the case, you'd 
not be using regional jets, but using larger aircraft. What do 
larger aircraft mean, more passengers.
    Ms. Hampton. Senator Rockefeller, it is in the plans and in 
the activities of the Airports Authority to manage the 
legislation, and to the regulations that we have, including 
accommodating the larger airplanes. We encourage the airlines 
to switch to the larger airplanes. If the economy improves, we 
fully expect that to happen. Adding beyond the perimeter slots, 
which are not in our statutes, adds another element for the 
Airports Authority that we have not planned for, and that we're 
really not prepared to handle. You know, we----
    The Chairman. How do you know that you're not? I'm going to 
ask the Feds about this in a moment, but how do you know you're 
not prepared to handle that, how come you're so certain?
    Ms. Hampton. Well, our airport----
    The Chairman. You keep quoting as if it's like original 
biblical statutes or something.
    Ms. Hampton. Well, it's----
    The Chairman. The world changes, you know.
    Ms. Hampton.well, it's not biblical, but it is 
infrastructure. The building was built in 1997, and as you 
know, it's a lovely building built by Cesar Pelli. It was 
built--the main terminal was built with piers, and they're very 
narrow piers, with three various checkpoints.
    The Chairman. I'm aware of the architecture, I think it's 
one of the nicest airports I've ever been in.
    Ms. Hampton. Thank you very much. It works very well. 
Passengers know that when they get to the airport that they 
will be able to get through the queues and get to their gates. 
When we start changing the elements of the plan, we know there 
is going to be additional passengers, and there are going to be 
additional passengers as the economy improves and we're very 
excited about that, and we're very excited to work with TSA. In 
fact, this week we're working with TSA because of the plans 
Delta has in the South Pier.
    The Chairman. Do you accept the general theory that the 
West has grown in population, and that the fact that there are 
so few flights out of D.C. to the West is anomaly in the 
changed conditions of today's demographics?
    Ms. Hampton. I think the West has grown its population and 
I also think that London County is the fastest growing county 
in the country.
    The Chairman. And so what's your worry then?
    Ms. Hampton. The population is growing everywhere. You 
know, I do accept the fact that the West is growing, but I 
built--we built our airport in 1997 to meet the statutes that 
the government gave us. We have had to accommodate and we are 
happy to have accommodated all the security that has happened 
after 9/11. We're working very closely with TSA now to, as much 
as we can, start expanding the use of the AIT, the Advanced 
Imaging Technology machines. And we----
    The Chairman. Can I just interrupt for a second because I'm 
already 10 seconds over my time and I want to either, actually 
both Ms. Kurland and Mr. Sammartino, MWAA argues the slot 
proposal would create substantial congestion problems at 
National, and some folks do here too. So what is your 
assessment of how that would affect the operation of the 
airport?
    You need to speak up some, Ms. Kurland, you're an important 
person, all right.
    Ms. Hampton. I'm sorry.
    The Chairman. I don't mean speak up physically, I mean 
speak up substantively.
    Ms. Hampton. Oh.
    [Laughter.]
    Ms. Hampton. I'm--I would be happy to talk more on the 
issues of competition and----
    The Chairman. All right, well then we'll go to Mr. 
Sammartino.
    Mr. Sammartino. Mr. Chairman, thank you for the opportunity 
to be here this afternoon.
    I would offer that, from an air traffic operational 
perspective, we have available capacity today for an increase 
in operations at National. That additional capacity is from 
underutilized slots that have already been allocated to the GA, 
general aviation corporate community. The traffic in that 
community is running at about 10 percent of normal operations. 
So hour by hour, we have additional capacity at National 
Airport.
    The Chairman. I thank you sir.
    My time has run out.
    Senator Dorgan. Senator Warner.
    Senator Warner. Thank you, Mr. Chairman.
    As--Mr. Snelling and Ms. Hampton, when you go to the 
bonding authorities, you make out projections over what period 
of time approximately to secure these bonds?
    Mr. Snelling. I'll refer to our President on the length of 
time.
    Ms. Hampton. Our projections to the rating agencies 
generally go out through the end of our construction, which 
right now is about 7 years.
    Senator Warner. All right. So a fluctuation in 1 year up or 
down on traffic, you know, it can always be absorbed. But what 
we're talking about here are structural changes in the overall 
framework. So, as we look at, you know, how you do financings, 
you do financings over a long-term plan, so I don't think year 
to year fluctuations--you've got to build those in.
    We're--a lot of conversation here about National, I guess 
one of the things I'm--question about--I want to come back to 
both of your testimonies, the effects this would have at 
Dulles. And I think it's important that as we think about the--
the $4.7 billion in additional construction at Dulles over the 
years?
    Ms. Hampton. $4.8 billion.
    Senator Warner. $4.8 billion, that was build upon 
assumptions and representations that were made by the Congress 
about what the role of Dulles would be, correct?
    Ms. Hampton. Yes, sir.
    Senator Warner. Now, at Dulles right now, and one of the 
things I think you were trying to articulate a little bit about 
earlier, is whether Dulles is a hub airport rather than a final 
destination, people pass through Dulles on the way to 
international theater. If we create 21 more out of perimeter 
slots that currently either go to Dulles or go to BWI, because 
this has effects on both airports, what you do is while that--
for those passengers who are end-pointing at National, but it 
diminishes the theater ability for these out of perimeter 
airlines to fly into the international hub, so would it be your 
conclusion that you would see a fairly significant drop-off of 
international traffic out of Dulles, something we've been 
working on 20 years to develop?
    Ms. Hampton. Yes, Senator, we are very concerned that the 
loss of domestic passengers at Dulles would hurt the 
international service.
    Senator Warner. And hasn't most of the growth at Dulles 
come from international passengers, not from domestic 
passengers?
    Ms. Hampton. Yes, sir.
    Senator Warner. And domestic passengers were down in this 
last year a million.
    Ms. Hampton. Domestic passengers have been down, very flat 
for the last 5 years.
    Senator Warner. So, again, as we think about the fact that, 
you know, because of these added infrastructure investments, 
for example, like rail, one of the things I--it is sometimes a 
hassle in traffic to get to Dulles, let me agree with all my 
colleagues as somebody who tried to do something about that on 
a previous job and he was not as successful, and I understand 
it. But one of the things that we have been planning and 
talking about for 25 years in this region, is to get rail to 
Dulles. But, are not some of the assumptions building the rail 
to Dulles is to assume a prosperous Dulles Airport?
    Ms. Hampton. Yes, sir.
    Senator Warner. Have--when the rating agencies put you on 
negative watch, did they consider the potential decrease of 
what you've estimated of 700,000 decrease in passengers 
annually at Dulles when they made that estimation?
    Ms. Hampton. No, sir, there has been no discussion of that 
with the rating agency.
    Senator Warner. So that would be an added factor on 
potentially downgrading of investments of the Commonwealth of 
Virginia, the local communities, and the Federal Government 
have made in jeopardizing the long-term viability of this bond 
rating with this unanticipated 700,000 additional loss, right?
    Ms. Hampton. I believe that would be the case.
    Senator Warner. I have a few more questions, as well.
    The other question I have is--have we seen any analysis, 
and I know this is one of the reasons why Senator Cardin and 
Senator Mikulski wanted to be here, but have submitted 
statements, of the potential harm done to BWI by the loss of 
500,000 passengers, again, based on your estimation?
    Ms. Hampton. We have not done an analysis, other than the 
analysis that we did that showed that Dulles International, 
under this proposal, would lose 700,000 passengers, and that 
Baltimore/Washington Marshall would lose 500,000 passengers.
    Senator Warner. Again, I know the State of Maryland has 
made enormous investments, based upon the assumptions of what--
that the law would be followed.
    Now, again, I would agree with the Chairman's comments, and 
scientists comments, and that is, the west is growing. And your 
positions, and we've differed on this, of absolutely no change. 
I didn't concur with, I think we needed some level of 
compromise.
    We had--this is not the first time this issue has come up 
and we've had other changes, I believe in the last two rounds 
it was about, one time, 12 additional slots, another time 10. 
This is more than doubling what the previous rounds of slowly 
escalating slot additions outside of the perimeter in terms of, 
if you were going to assume--even though you don't want any 
change, you're going to have to get stuck with something. Now, 
wouldn't it be, perhaps, rational to assume that, well, you got 
whacked by 12 one time, whacked by 10 another. This kind of 
proposal that's being performed would double what the--the 
changes the Congress has made in the past, is that correct?
    Ms. Hampton. Yes, sir. We will be good stewards. What the 
Congress gives us, we will do. We are here to tell you what we 
believe, and we believe that this will have a negative effect 
on National Airport, and on Dulles Airport.
    Senator Warner. Let me get one other question in, maybe 
Mr.--you all can answer, Mr. Sammartino can answer this. And 
that is that, you know, one of the concerns, you know, I think 
as folks in good faith tried to work through this and we 
thought, ``Well, let's just do slot switches from inside the 
perimeter hub to outside the perimeter hub,'' so--and I 
particularly appreciate my friend from Nevada's comments, and 
some others who have been involved in this that there would try 
to be the same type aircraft, although I would be much more 
sympathetic if it actually was the same type of aircraft, 
because there are sometimes these short-haul commuter flights 
to Philadelphia that would be--while not wide-body--
dramatically increased passenger size in terms of the size of 
aircraft would be slotted out. And you're saying, ``Well, that 
means small markets wouldn't be affected.''
    But I guess I would ask Mr. Sammartino, or Ms. Hampton--
nothing would preclude a carrier, once they switched out, say, 
a Philadelphia hub for a Los Angeles or a Phoenix hub, to then 
say within their existing inside the perimeter slots to switch 
out a Portland, Maine for a Philadelphia or a Charleston, West 
Virginia for a Philadelphia, so that you could back--in terms 
of backfilling, nothing would preclude an airline from making, 
you know, a rational business choice to trade out a smaller 
market inside of the perimeter for a hub market inside the 
perimeter?
    Ms. Hampton. That would be correct.
    Senator Warner. So, the possibility exists, and again, 
we're trying to get a balance here of all of--my time's 
expired, I apologize--that this balance between inside of the 
perimeter, outside of perimeter, service to our smaller markets 
which are so critical around the country, they could see a 
diminution of flights as rational business people made choices 
to replace those smaller-market flights with flights to inside 
the perimeter flight hubs like Charlotte and Philadelphia?
    Ms. Hampton. I agree.
    Senator Warner. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Ensign?
    Senator Ensign. Thank you, Mr. Chairman.
    What Senator Warner just talked about could happen right 
now. They have the full right because the legislation basically 
says that they can't switch it from the small markets to the 
West Coast, but they could switch right now between what you 
said, Philadelphia. So there's no change in that, and they're 
just going to make the business decisions. This legislation 
doesn't affect what you just said.
    Now, Ms. Hampton, you said population is growing in the 
West, but it's growing everywhere. Well, frankly, it's not 
growing everywhere. OK? There are states that are losing 
population and the East and a lot of the Mid-West is not 
growing, the West is growing, that's a reality in the United 
States. Certainly, Virginia's growing, as well, but the West 
has been, and the South has certainly been where most of the 
growth in the United States has happened, that's one of the 
reasons that we're trying to do this legislation.
    I want to correct something else that you said that didn't 
make sense to me. You talked about origination/destination 
passengers--I'm very familiar with, that's what we have in Las 
Vegas, we have O&D passengers. You talked about that these are 
not going to be O&D passengers, you're concerned mostly about 
your transfer passengers. But then you talked about wait times 
at the security checkpoints. Well, transfer passengers don't 
take time at the security checkpoints. So, that's why you're 
being inconsistent with that argument.
    And then last, before I let you answer that, what doesn't 
make sense to me as far as you worrying about Dulles, is in 
your 700,000 figure that you said that will decrease in Dulles, 
how much--how many of those passengers decrease at Dulles did 
you attribute to USAir transferring their slots from inside the 
perimeter to outside? What was the figure that you used for 
USAir? Because USAir is going to get about half the slots, 
right? They're going to be able to change--about half of the 
slots that are going to go from inside to outside are going to 
be USAir. What percentage did you use?
    Ms. Hampton. OK, if I could I'll try to take your questions 
in order.
    Senator Ensign. Answer that last one first.
    Ms. Hampton. OK.
    As we understand the legislation, USAir would benefit from 
half of these slots----
    Senator Ensign. Yep.
    Ms. Hampton.--half of the amount of passengers would be 
attributed to US Airways.
    Senator Ensign. How many international passengers does 
USAir have going out of Dulles right now?
    Ms. Hampton. USAir doesn't have any international.
    Senator Ensign. So you're worried about international 
passengers, that's a whole argument Senator Warner was just 
making, and yet you're attributing half of the drop in 
international passengers from Dulles--it just doesn't make 
sense to me. If that's your big concern, international 
passengers, and USAir doesn't fly international passengers out 
of Dulles, that's where your concern is the biggest drop, 
because you all talked about them taking that from, and you 
know, this becoming a hub-type of a situation at DCA. That's 
not the way that USAir works, for their international.
    Ms. Hampton. They would come from other airlines, other 
than US Airways.
    Senator Ensign. So, you're thinking they're going to 
transfer from one airline to another airline?
    Ms. Hampton. Yes. Yes, sir.
    Senator Ensign. Do a lot of people do that today? Transfer 
one airline to another airline to go international?
    Ms. Hampton. Not to go international. What would happen is, 
if a flight is coming from, let's say, Los Angeles, through 
Dulles, and then going on to London and half of those people on 
the flight are domestic passengers, they would get off the 
plane, and they would come to the Washington metropolitan area. 
The other half would get on a flight and fly international. The 
ones who are domestic passengers would make the economics of 
that flight not work if those people that were flying 
domestically now to Dulles International were not on that plane 
and, in fact, came to National Airport.
    So, it would make that flight to Dulles not economical. The 
airline would, logically--then move that flight from Dulles----
    Senator Ensign. Mr. Sammartino, do people that fly--in 
other words, if they're not flying internationally, do people 
fly, generally, and transfer airlines, especially American 
carriers--do they fly domestically and transfer airlines to fly 
internationally?
    Mr. Sammartino. Senator, I wish I could answer the 
question----
    Senator Ensign. Maybe we can get that question from you.
    Let me go back and maybe you can answer some of the other 
questions that I started answering.
    Ms. Hampton. You talked about what I called transfer 
passengers. There will be both transfer passengers, and 
origination/destination passengers. The transfer passengers 
have their own issues, as far as the ability to sort the 
luggage. Origination/destination passengers would create 
additional pressure through the security screening locations.
    Senator Ensign. What happens if the economy improves more 
than it was in 2007?
    Ms. Hampton. We are very much hoping that that's the case 
and that is in our plans to be able to accommodate that, sir. 
This would be----
    Senator Ensign. What happens if it increases more than what 
you're planning? You'd make accommodations.
    Ms. Hampton. Well, you know----
    Senator Ensign. Correct?
    Ms. Hampton.--we will work to accommodate it.
    Senator Ensign. Listen, listen--airports do that all of the 
time. I mean, in Las Vegas, we were growing faster than anybody 
ever predicted for a long time. They had to make changes to 
baggage handling, changes to security lines, changes to 
everything, and you do it. Because that's what is required, 
that's part of the jobs that you're assigned to do, you do it.
    But what we're trying to do here is something that, first 
of all, can make airlines more competitive in the marketplace. 
Airlines have been hurting for a long time, they're just now 
starting to recover, and we're trying to make it to where, 
listen, I'm going to be flying out of Dulles, OK, because it's 
just more convenient for me, I'm going to continue to fly out 
of Dulles, the number of flights, I probably--even if this 
thing passes, I don't even know if USAir is going to take one 
of their slots, you know, to Las Vegas. I'm just talking about 
the health of airlines and the competitiveness, and I just 
think that a lot of the arguments that a lot of you have made 
today just do not add up. And I think Chairman Dorgan and 
Chairman Rockefeller have made some really good arguments 
today, and your arguments just have not, you know, kind of held 
water.
    I apologize, my time is up, Mr. Chairman.
    Senator Dorgan. All right, thank you, Senator Ensign.
    Let me make a quick point. There is nothing that has been 
discussed today that will ever benefit Bismarck, North Dakota. 
There is no out-of-the-perimeter flight from Dulles to 
Bismarck, nor will there be. So, I don't have--I'm not into 
this discussion. All I want to do is pass an FAA 
reauthorization bill, that largely has been blocked by the 
position of two airports, here, and the Metropolitan Authority.
    And, let me see, Mr. Snelling, it seems to me your position 
is a position that time stands still. The testimony today 
suggests that you have a notion of how many slots there are, 
outer perimeter, and new slots, and that's what will always be. 
That's not the case. Time doesn't stand still. Time marches on, 
and the fact is, if you're managing this airport with a belief 
and an understanding that your financial structure depends on 
Congress doing nothing with respect to these issues, you're not 
managing the airport very well. Your response?
    Mr. Snelling. Well, my view is that we're not in a static 
state of events, that we have a planning horizon, we've spent 
capital investments based on that planning horizon, and if the 
Congress--which we absolutely acknowledge is the one who's 
going to make this determination--if they tell us to do it a 
different way, then we'll start planning a different way and 
doing different things.
    Senator Dorgan. But you're telling Congress, ``Don't you 
dare tell us to do it another way, you're going to break the 
back of these two airports,'' that's what you're telling us.
    Mr. Snelling. I would never tell Congress anything except 
my honest opinion on an issue, when asked.
    Senator Dorgan. Well, I understand that, is that your 
honest opinion?
    Mr. Snelling. Yes.
    Senator Dorgan. Sixteen conversions and five new slots are 
going to break the back of the financial planning of the 
Metropolitan Airports Authority with National and Dulles? Do 
you really believe that?
    Mr. Snelling. I really believe that it wouldn't be good for 
our airport system. And I also think that there are issues, 
here, that we haven't had time to discuss. I mean, when you 
have a hub at National, which is what we don't really have now, 
then you need a whole new and different baggage-sorting system. 
Baggage has to be sorted from one plane to another. When it's a 
destination airport, people go, they pick up their bags, and 
they go. The bags don't have to be sent from one airline to 
another.
    It's a very complicated business, the airport business. And 
it really takes time to accommodate changes in operations.
    Senator Dorgan. Well, but you're apparently planning for 
something that won't be, and that is a future that looks like 
the past. And so, you know, good for you, but I think it's a 
huge mistake. I'm going to come back to you in just a second.
    Mr. Snelling. Sure.
    Senator Dorgan. I want to ask Mr. Sammartino, do you work 
for Secretary Kurland?
    Mr. Sammartino. I work in the FAA----
    Senator Dorgan. I don't understand the hierarchy here.
    Mr. Sammartino. OK.
    Senator Dorgan. Do you work under her?
    Ms. Kurland. I work for the Secretary of Transportation----
    Senator Dorgan. OK, so different stovepipes.
    Ms. Kurland.--but, we work together.
    Senator Dorgan. Well, I was going to ask you whether you 
agree with her, so let me read what she just said in her 
testimony. ``Reagan National,'' I'm quoting Ms. Kurland, ``is a 
relatively high-fare airport, having the third-highest fare 
premium of the 121 markets that were examined.'' Then she says, 
``For a large portion of passengers, especially time-sensitive 
passengers, the three airports in the Washington-metropolitan 
area are not effective substitutes for each other. Price 
competition from the Washington, Baltimore Washington 
International, and Dulles are not effectively disciplining the 
fares at Reagan National.''
    That is fascinating testimony to me, and comes to a point 
that suggests, Mr. Snelling, that you and the Authority are 
managing Washington National at the highest fares, and you've 
decided, you know what? We don't want anything to interrupt 
that. And the preposterous position, as far as I'm concerned, 
and I've already told Ms. Hampton this, is you are suggesting 
that if, somehow there are 16 conversions--16 out of the 
hundreds of flights a day out at National, 16 conversions that 
fly outside of the perimeter, that somehow it will be--do 
terrible injury to Dulles--suggesting, of course, that nothing 
will happen with respect to something that we, who study the 
economic system, call competition. The world's largest airline 
will exist at Dulles. It's a merger between United and 
Continental. When completed: the world's largest airline.
    So, you think the world's largest airline sits there at 
Dulles and decides, ``You know what? If this is what they're 
going to do, God bless them, there's nothing we can do about 
that.'' You don't understand that United Airlines will do 
everything possible, including perhaps, even engage in price 
competition. God forbid that should happen with respect to 
those who fly out of National, but perhaps even a little good 
old-fashioned price competition to make sure you don't bleed 
all of those passengers?
    And, you know, the reason I'm mentioning this to you, you 
all showed me a consultant's study that was done, it wasn't 
worth what you paid for it--I don't have the foggiest idea what 
you paid for it. But when I asked the question, ``Does this 
suggest that United would behave as the world's largest airline 
would, and want to compete?'' No, we didn't consider that. 
Didn't consider that.
    So, tell me your notion of how all of this is going to work 
if you're going to keep Washington National as one of the 
highest-fare airports in the country, and essentially stop 
competition in its tracks?
    Mr. Snelling. Let me address that, sir. We live in a free 
market, and people have choices. And Reagan is a more 
convenient airport, and it's capacity-limited. And it's a 
basic, free-market principle that if there's much more demand 
than there is the ability to meet it, that those prices will be 
higher. So, it's not unexpected that a capacity-limited, very 
convenient airport will have higher rates. We don't do that, 
the airlines do that.
    Senator Dorgan. Oh, Mr. Snelling, you say we live in a free 
market and people have choices; your position at this table is 
to limit people's choices, isn't that the case? You're here, 
and you have, for the last months, been telling the Chairman, 
myself, and others and all who would listen that you want to 
limit people's choices, isn't that the case?
    Mr. Snelling. We do what Congress tells us to do. We won't 
be----
    Senator Dorgan. No, that's not the case. You are suggesting 
people's choices be limited, and you just told me that we have 
a system here in which people have choice, that's not your 
position.
    Mr. Snelling. I respectfully disagree. I mean, I really 
believe in competition, and we want to encourage it every way 
we can.
    Senator Dorgan. Well, then----
    Mr. Snelling. I just don't think that the proposal will 
meet the needs that I know you have, and I'd like to meet.
    Senator Dorgan. Would you all hire a consultant that 
considers the competition that would exist between Dulles and 
National if, in fact, a small number--16 conversions out of 
hundreds of flights a day will be outside the perimeter? Would 
you hire a consultant that would at least do what an Econ 101 
student would have to do on a term paper?
    So, I don't mean--well, I guess I do mean to diminish the 
information that has been given to us, because it is not--it is 
not right, it doesn't nearly meet the laugh test, in my 
judgment.
    Let me ask, again, Mr. Snelling, are you aware that the 
Metropolitan Washington Airports Authority has approached the 
carriers that are serving in DCA and suggesting that they make 
more efficient use of slots, including using larger aircraft?
    Mr. Snelling. Yes, I am aware of that.
    Senator Dorgan. And what is the purpose of coming to this 
committee suggesting that you can't accommodate more, and then 
at the same time telling the major carriers that they ought to 
be using larger aircraft? Tell me how that adds up?
    Mr. Snelling. Our purpose is to fulfill the capacity we 
have within the rules that Congress has given us. And if 
Congress changes those rules, we'll follow what Congress tells 
us to do. Right now, we're following what Congress has told us 
to do.
    Senator Dorgan. So, is it OK if Congress changes the rules? 
Do we have your OK?
    Mr. Snelling. I have no such presumption as to tell 
Congress what they should do or not do.
    Senator Dorgan. Well, you've been telling Congress, for the 
last 4 months, my friend.
    Mr. Snelling. No, really, sir, what I've been doing is 
answering the questions put to me on what I think is right for 
the Airports Authority.
    Senator Dorgan. Senator Rockefeller?
    The Chairman. I hate to take you off your roll.
    [Laughter.]
    The Chairman. Let me be honest. The--I'm always honest, so 
let's just carry on tradition. You believe that you're so 
sovereign--do you believe that you are under the direct 
jurisdiction----
    Mr. Snelling. Of course.
    The Chairman.--of this committee?
    Mr. Snelling. Absolutely.
    The Chairman. And that you can't move to the right or the 
left by more than six inches if we decide that we really don't 
want to have you do that?
    Mr. Snelling. I know that completely. And the term that 
you're using was never used in any context externally to the 
Airports Authority. That term was used only in an internal 
debate as to who should make policy. The Board is sovereign in 
the Authority in terms of making policy. We're not sovereign in 
anything else, and we're certainly not sovereign as it relates 
to you or this committee or the Congress of the United States.
    The Chairman. I'm pleased to hear that, and you wouldn't 
even exist, I might say, if it hadn't been for me.
    Mr. Snelling. We agree.
    The Chairman. So, you can thank me.
    Mr. Snelling. We do thank you, sir.
    The Chairman. That's good.
    This is the situation we find ourselves in. You have about 
98 percent of the Congress on our side of it, the Senate, 
waiting to vote for this bill. There are a few who are holding 
up this bill, and they're doing it based upon what the Chairman 
and I have always suspected, information which you give them. 
And that information is to keep, as the Chairman suggested, the 
status quo, go back to where it was originally, not recognize 
that the West Coast is--as the Senator from Nevada indicated--
has grown exponentially.
    Northern Virginia is very unusual in the East. You won't 
find that in the South, you won't find that in Appalachia, you 
won't find that in the Northeast a lot. The growth is out 
there. Don't you have a responsibility to service the West 
Coast to a greater extent than you do now, which is virtually 
sort of one flight, per day, per huge city on the West Coast?
    Mr. Snelling. We do have that responsibility, which is why 
we're building rail transit out to Dulles, the only great 
National capital in the world that I know of that doesn't have 
rail transit. We want to make it----
    The Chairman. I don't think the West Coast comes in on 
light rail. I'm interested in the air--see, part of the problem 
I have here is you talk about how your ratings are down. But I 
don't think the ratings--first of all, I can't imagine three 
more successful airports in this country than BWI, National, 
and Dulles. I think the future for each of those airports is 
just unlimited.
    Now, you say you have some financial problems. You do not 
have financial problems because of what you're doing at the 
airports. You do not have financial problems because of 
baggage, because of security, because of ramps and all of the 
rest of it. You have financial problems because you've invested 
a lot of money in some really stunning, colorful, interesting, 
and excellent transportation, to make life easier on the way 
out there.
    I have to tell you that I am--coming from West Virginia, I 
sort of come from Bismarck, too. We have a little bit more 
traffic than they do, but one of the reasons that the 
Charleston airport, for example, has done so well, the 
Charleston, West Virginia airport, is because they're 
extraordinarily aggressive. All they look at is the future, and 
what can they get? And they're considered one of the 10 best 
airports in the United States of America because of this. It's 
the attitude of the Board, in your case, it would be the 
Authority. They're looking to the future, they embrace the 
future, they want the future, they understand that life isn't 
easy, they understand that we're going to come out of the 
recession, they understand that we're in a recession. We don't 
have any capacity to build what you're building up here in the 
way of transportation, but your airport--your airports are 
guaranteed for the future. We're going to--the recession, I 
don't know if it'll be 2013 or 2014 when we come out of it. I 
don't know, but we're going to come out of it. And your future 
is going to be absolutely magnificent.
    So, I'm sitting here bamboozled that the reason that no 
airport in the United States is going to get the air traffic 
control system GPS and--which will increase the number of 
opportunities, and allow planes to land and take off more 
quickly, allow them on an altitude basis to be closer to each 
other, because it's much more measurable, the difference 
between an x-ray and an MRI is very substantial and we all know 
that.
    But none of that can happen, because the bill is being held 
up. We can't pass it because this--somehow this offer on slots 
that we've offered, which was rigorously worked through with 
Senators from the west who have very major positions, to be 
frank, in the Republican Party, that they compromised like 
crazy. And they're willing to take this piece of legislation 
and pass it. And do all of the things that will make your two 
airports, and all of the airports around the country, including 
my little airport in Charleston, West Virginia, and Bismarck--
whatever they have there, I don't know what, do you have 
concrete on the ground?
    [Laughter.]
    Senator Dorgan. You know, that's not funny. We have 
wonderful air service.
    The Chairman. Well, that's what I was just about to say.
    But do you understand what you're doing? That's what I'm 
saying.
    Mr. Snelling. Well----
    The Chairman. You are stopping through the information and 
your influence on some, you're stopping this bill from passing, 
and you can't feel very good about that. I don't want you to 
feel very good about that.
    Mr. Snelling. Senator----
    The Chairman. If you somehow would release some people, and 
encourage some slot arrangements, we could settle this and have 
it done, and America would be a better place, and so would the 
world.
    Mr. Snelling.--Senator, you have a much higher opinion of 
our ability to add and detract than we have. I'm a solid 
proponent of the FAA reauthorization bill--a solid proponent of 
it, and a solid proponent of NextGen. I wouldn't hold those up, 
in any way. Nor do I think that I or we have the capacity----
    The Chairman. But you are. I said I was going to be frank, 
and I am--you are. And I think you need to take that home and 
think about it. And I think you need to think about the West 
Coast--don't they deserve to be treated as though they are 
exactly what they are? A very resilient, very vibrant, very--
you know, tax savvy, everything savvy part of the world which 
is growing. Good grief, my youngest son has just moved out 
there. He thinks the future is out there. I thought he was 
going to stay here, in the East, no, he's going out there.
    You know, it just--it doesn't add up, to me. And 
particularly when this bill is just simply ready to pass. It 
passed, already, 93 to nothing, it didn't have the slot 
arrangements in it. But the slot arrangements, they, somehow 
you think they're going to destroy you. That you can't handle 
them. And I don't think the GAO thinks that, and I don't think 
that Mr. Sammartino thinks that, but you do, and so that really 
carries, unfortunately, a lot of weight and puts you in the 
position of stopping this bill. I don't think you're happy 
about that. You're not happy about a number of things. We've 
got a lot of quotes that you've made over the years, which 
we're not--I'm not going to put on the record, here, for your 
sake.
    How do you respond to that? I mean, I've been rude, but I'm 
also angry.
    Mr. Snelling. I'm sorry about that.
    Ms. Hampton. Yes.
    Sir, I think we at the Airports Authority, as the Chairman 
said, very much support the FAA reauthorization. It is not an 
easy thing to be sitting here in front of you, but we truly 
believe that the slots would have a negative effect on National 
Airport and a negative effect on Dulles Airport, both from the 
domestic and the international perspective. And that's what 
we're here to say, just to tell you what we believe. We believe 
that we have done what Congress wanted us to do. We believe 
that Congress set up Reagan National to be a short-haul 
airport, and we think we've done a good job, and we've been 
good stewards.
    The Chairman. I'm way over my time.
    Senator Dorgan. Senator Warner.
    Senator Warner. Thank you, Mr. Chairman.
    And again, I want to come back again to this contentious 
issue and commend you and the Chair of the Committee for, you 
know, enormous hard work on this. And, I'm new here, but I know 
how much the Chairman of the Committee and the Chairman of the 
Subcommittee have worked so hard, and nothing surprised me more 
than the education of--the enormous need we have to get a 
NextGen system and how much that's needed.
    I would take issue of a few things. I would urge that, you 
know, this is one of a series of issues, PFC and an interesting 
debate between which PFC issues would still need to be worked 
out and issues between UPS and FedEx that are also contentious, 
and issues with the House.
    I would also ask, Mr. Chairman, that we make part of the 
record the letter from 11 members raising concerns about this 
approach, not all from the region. As a matter of fact, six of 
them from the West, the six members representing the Northwest, 
part of America that felt that this approach disadvantaged 
their communities, their states, and I hope that would be part 
of the record as well.
    [The information previously referred to follows:]

    
    
    
    
    cc: Majority Leader Harry Reid
       Minority Leader Mitch McConnell

    Senator Dorgan. Without objection.
    Senator Warner. So, I think it is a broader issue. And 
again, I'm going to go back to where I started, I'm going to 
make one or two other points. You know, I don't concur fully 
with the Airports Authority of no change. And I appreciate 
again, and I know at the end of the day, I think both these 
Chairs have said they have no dog in this fight, and we--the 
Chairman of the Committee worked hard for a compromise at the 
Committee level that I actively supported, and unfortunately it 
fell short. He is operating totally in the best interest.
    But there are--I think there are enormous issues, 
commitments made in terms of the Airports Authority, in terms 
of simply doing what they were told, why the plan, go to the 
bond market, make representations about what we can expect. 
And, I think they have performed those duties appropriately. 
And with the negative outlook right now, before you would 
factor in another 700,000 passenger loss, you don't even have 
to get to the issues around National. I mean, I do think some 
of the testimony today around National about ability to absorb 
have enlightened me, but with the issues around Dulles lay 
enormous concerns.
    And again, for all of us in this region who have fought for 
years to try to get that Dulles rail, again, the underlying 
financial assumptions on that project are also put in jeopardy 
based on a constantly shifting set of rules. Even if you 
expected a set of rules, well, things change, the world 
changes, Congress changes. But if there was any kind of 
assumption of what the changes might be, no matter what your 
position may be in terms of zero changes, you know, past 
reference might be a good idea. Well, one time it was 10, one 
time it was 12, now we're talking 21. That is an exponentially 
different level of change.
    I also think it's important--and I've got something else in 
mind--I think it's important to come back to one point that he 
made, because I think I've spent more time in business than I 
have in this line of work--I used to be a pretty good business 
guy. I think people do rational things for financial interests. 
And the bond that has been set up at National right now, in 
terms of people flying into hubs or flying into small markets, 
almost always inside the perimeter. Outside perimeter, hub 
markets are more profitable because you have that ability to 
leverage to other flights. So why--we've got this balance, but 
this notion that if you take away inside perimeter slots and 
replace them with even more prosperous outside perimeter slots, 
which will have larger capacity. A rational being, if you lose 
flights at Charlotte and Philadelphia, a rational being will 
supplement those flights at Charlotte and Philadelphia with 
taking away flights from less prosperous markets that rely 
right now on perhaps that only service to National.
    So the notion that this would have no effect, and people 
can make those changes, now people don't make those changes 
because that capacity inside perimeters has been filled and the 
market is at an equilibrium. But if you take away that 
equilibrium, any rational company is going to go ahead and 
refill the inside perimeter slots. And where are they going to 
look? I think they're going to look at the secondary markets 
served inside the perimeter, and that will create a whole new 
set of challenges. So I do urge--I'll echo with my colleagues 
here--I do believe that that status quo won't work, I do 
believe a reasonable compromise makes some sense. I don't 
believe what's around here right now hits that goal, nor do 11 
other colleagues.
    And again, this has been more a statement than a question. 
I'll say, do you agree with me, Ms. Hampton, just to make it a 
question? But, I would--I would simply again--we have a 
difference on this, but I want to close, just with again, 
compliments to both the Chair and the Subcommittee Chair, they 
have worked extraordinarily hard on this bill. And, what is 
remarkable as a new person--and I know they chase them, because 
there has been four or five other times when we've tried to get 
FAA reauthorization, long before I was here, where they never 
got to the finish line. And they both need to be commended for 
their great work in terms of moving it along. And again, I hope 
that the 11 and some other members who may have concerns, that 
we can still find some reasonable compromise, that this doesn't 
benefit one particular subsection of the West or one particular 
carrier over others. And would still hope we could get to that 
point.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Warner, thank you very much.
    Let me go back to this concrete reference just for a 
moment, to say that if the first--the first time I have heard 
someone from West Virginia make fun of another State.
    [Laughter.]
    Senator Dorgan. I want to make sure that, if all you would 
like, you get on a mail list, I'll send you a travel log for 
North Dakota, a wonderful place.
    My colleague, Senator Warner, makes a case. He's a good 
colleague and bright and aggressive and fights hard for the 
things he believes in. He makes the case, as----
    Senator Warner. I take lessons from both of these Chairs.
    Senator Dorgan. As has been the case around here on a lot 
of issues. And the case is always, this is a carefully 
balanced, carefully calculated, carefully weighed set of issues 
and the balance exists. It's like, you know, it's like a loose 
thread on a cheap sweater, you pull the thread and the arm 
falls off. You cannot possibly do that, you can't alter it. 
Well, of course that's not the case at all in my judgment. We 
have a disagreement about that.
    The 2007 GAO report, that I referred to earlier, says this 
about the slots that were added and they have been added at 
D.C. National, despite the testimony and despite all the 
representations about the sky falling, here's what they said 
about the slots that were added previously, GAO, ``We did not 
find evidence that beyond perimeter flights to and from Reagan 
National affected flights from the same airports to or from 
Dulles or BWI. We analyzed fare and passenger data between 
Dulles and BWI, and those airports, and for all the traffic 
serving Dulles and BWI, and in doing so, we observed the data 
didn't produce any distinguishable trends,'' etcetera, 
etcetera.
    Now, you know, I don't know how you can do better than that 
in terms of making the argument that the representations that 
the sky will fall if this happens are wrong. They've been made 
before and it didn't happen before.
    So, I just, you know, let me go through a couple things, 
what we've learned today. There was a proposed slot exchange 
that would have significant impact on Washington National in 
terms of larger airplanes, advertised by press release. And 
there were several opportunities to make comment by all 
interested parties on that slot exchange. The Metropolitan 
Washington Airports Authority chose not to say anything. 
Strange, if in fact they're at capacity, have no bathrooms, and 
garages, and all, you know. So, deciding on that big issue, 
we'll be silent, totally uncharacteristic from what we see 
today.
    Number two, asking carriers to use larger airplanes, make 
more efficient use of slots and use larger airplanes at DCA. Is 
that in keeping with what we're hearing and the reasons to 
block the FAA bill, because you can't accommodate more 
passengers?
    Number three, unused slots--Mr. Sammartino pointed out--I 
believe there are 12 slots an hour for general aviation, I 
think it's somewhere in that neighborhood, is that right?
    Mr. Sammartino. There are 12 authorized slots per hour for 
general aviation, but actual usage, is only two.
    Senator Dorgan. Right. So you have 12 authorized slots per 
hour for general aviation and let's say two are used, slightly 
less, slightly fewer than two, so you have 10 slots an hour 
that are authorized and not used, just in terms of capacity. 
Then, in addition, you would have planned and should have built 
for an understanding that 25 percent of your flights will be 
smaller commuter airplanes. If you say you pay close attention 
to us, to what Congress says is your charge, then you would 
have created an airport that believed that 75 percent of your 
flights would be with larger jet carriers. And yet, only 40 
percent of your flights are with the larger jets.
    My point is, look at all these things, there's nothing here 
that adds up. I'm sorry. I know you make the best case you can, 
as does my colleague, but it simply doesn't add up. And if I--
if this were a case where, look, we're having a debate and 
you're equal to the task--I listened to Senator Rockefeller and 
you, you know what, it's a standoff. If that were what I felt, 
I'd say, ``You know what, you've got a pretty decent case, we 
better look at this.'' My point is, I don't think you have a 
case at all. And I would just read the GAO thing and just stop 
and say, ``You know what, you've been wrong and are wrong.''
    But, having said all that, I want to ask you one additional 
question and then we'll move on to the end of the hearing. I do 
want to ask the question, and I only ask this because it is not 
about capacity, it's because there has been representations 
about how you're having some financial issues and worried about 
bond markets and so on. My understanding is that you lost $51 
million in interest rate swaps. I'd like to understand how the 
Metropolitan Washington Airports Authority would have lost $51 
million in interest rate swaps.
    Mr. Snelling?
    Ms. Hampton. The question was asked, ``Did we deal in 
credit default swaps?'' And the answer to that is no, we did 
not deal in credit default swaps. The Airports Authority 
established a risk management program about 7 or 8 years ago to 
manage exposure to variable interest rates. We currently have 
interest rate swap agreements. We had some swaps with Lehman 
Brothers. When Lehman Brothers went bankrupt, it was necessary 
for us to unwind those swaps and we chose to do that as quickly 
as possible to get out of the bankruptcy litigation and any 
unknowns. The Airports Authority, in our risk management 
program, had always set aside funds to manage the risk. We 
actually made special trips to New York with our Board to 
educate our Board on both the risk and the advantage of 
interest rate swaps.
    In this economy things happened. The $15 million was 
related to the bankruptcy of Lehman Brothers, the $35 million 
was a decision that we made to unwind swaps that were insured 
by Ambac, and at that time we unwound those swaps and paid the 
$35 million. In both cases we took variable rate debt and 
changed that variable rate debt into fixed rate debt. And I am 
knowledgeable about this because, in my previous life at the 
Airports Authority, I was the CFO.
    Senator Dorgan. I'll just let that sit as testimony. It 
raises other interesting issues that I'm interested in, but I 
think the hearing has gone on long enough. I'll just that lay 
there in terms of a response to my question.
    I want to end the hearing by saying this: I think it is the 
case that if you were betting, you'd probably bet that this FAA 
reauthorization bill will continue to blocked and this year 
will end, and we're nearly at a point now where there's barely 
enough time to finish it even if we had an accord.
    My colleague--to my colleague from Virginia, I would say 
that this issue is the issue. It is not going to be FedEx and 
UPS as an issue that holds it up, it's not going to be several 
other issues. I think most of those are resolvable and we 
understand how they're resolvable. This is the issue that will 
likely hold it up if it's held up.
    And if that's the case, we will be--the Congress will be, I 
should say, perhaps next May, July, September, whenever it gets 
organized finally and tries to figure out, alright, how do we 
start over, how do we begin moving on this, and we will as a 
country fall far behind on the issues of NextGen and air 
traffic control modernization. And it's a shame, because this 
country deserves better than that, deserves better stewardship, 
better management, it just deserves better from all of us. You 
represent your interest and that's fine. We calculate that 
interest against the interest of the country, all other 
airports against the interest of needing to keep an opportunity 
for aviation to work and to operate in this country and to 
modernize. It will be a profound disappointment, to me 
certainly, and not just me I hope, if at the end of the year we 
have not done what our country should expect us to do, all 
because we have decided that this carefully constructed balance 
and the scales that exist between the three airports in this 
region, especially between Dulles and National, could be 
injured by taking 16 flights that now exist and converting 
them, in terms of the number of miles they fly.
    Again, I think at this hearing you have demonstrated a 
profound misunderstanding of the importance of the issue and 
also represented to us a series of things that just don't add 
up in terms of your behavior, your silence on much larger 
changes to aircraft coming in and out of National, with the 
slots--the slot proposal and other things.
    But having said all that, I can't change your testimony or 
your views. If those are your views and they're your views 
going forward, so be it. I do think that this hearing also 
suggests some other issues for Senator Rockefeller and the full 
Committee and that is, we created the Metropolitan Washington 
Airports Authority. We didn't create it with a credo of 
yesterday forever. Yesterday forever is not going to exist, 
some people behave that way, but that's not going to be the 
case. And I think the question of the Metropolitan Washington 
Airports Authority, who it's accountable to, how it should be 
accountable, whether it makes sense to maintain National as the 
third highest airport in the country for rates, and try to 
prevent competition and prevent choices, whether that makes 
sense. And if that's the way it is managed, should there be 
some accountability to the Congress, to this committee, should 
there be perhaps some modernization of the Metropolitan 
Washington Airports Authority to evaluate how do you create an 
authority that has competition as a high order in addition to 
maintaining sterling airports.
    The one thing that would unite all three of us remaining at 
the dais, is I think all of us, who fly out of both airports, 
and all of us would want this capital city, our Nation's 
capital to have airports that we can be enormously proud of. We 
want these to be the best airports in the world, no question 
about that. But, that's not going to happen, it simply will not 
happen if we decide we're going to delay for another year and 
another year, the essential things that are necessary in the 
FAA reauthorization bill, and I'm afraid that's the position 
that the Metropolitan Washington Airports Authority is taking 
and is going to result in.
    I say to my colleague from Virginia, as I said before, I 
appreciate your tenacity. We profoundly disagree. I thank the 
witnesses. This is probably somewhere between a migraine 
headache and a root canal for you, but you know what, we have--
the Congress has a right and a duty to ask very tough 
questions. We've asked those questions and have gotten very 
unsatisfactory answers, at least for me, and I hope that in the 
weeks ahead, perhaps we can find ways to reach agreement, at 
least on the essentials, dealing with this issue.
    Senator Rockefeller, do you have anything more?
    If not, this hearing is adjourned.
    [Whereupon, at 4:20 p.m., the hearing was adjourned.]

                            A P P E N D I X

     Prepared Joint Statement of U.S. Senators Benjamin L. Cardin 
                  and Barbara A. Mikulski of Maryland

    Thank you Chairman Dorgan for the opportunity to share our views on 
an issue that is of great importance to our region.
    In 1987, Congress created the Metropolitan Washington Airports 
Authority (MWAA) to run Reagan National and Washington Dulles 
International Airports. The creation of MWAA represented a commitment 
from Congress to the residents of the DC Metropolitan area on the safe 
operation of Reagan National Airport when it transferred authority over 
to MWAA.
    Those commitments were codified by Congress in the perimeter and 
slot rules.
    The system of operation that emerged from the 1987 agreement has 
worked well for the region's three major airports. Over the last 20 
years significant investments in the region's airports have led to 
marked improvements in efficiency, safety and quality of service at 
Thurgood Marshall-Baltimore Washington International Airport in Anne 
Arundel County, Maryland; Dulles International Airport in Loudoun 
County, Virginia; and Reagan National Airport in Arlington, Virginia. 
These across the board investments have helped the region's airports 
successfully meet the growing demands of the traveling public that come 
to Baltimore-Washington area.
    The 1987 agreement was reached through a collaborative process that 
involved input from local and regional stakeholders. Doing so helped 
ensure a successful long-term growth and management plan for the 
region's commercial airports.
    If changes to current airport operations and service in the region 
are needed, a similar process to the one that was followed in 1987 
should be used. Engaging the region's aviation, transportation, 
economic development and planning experts is both courteous and smart 
to ensure that the best outcome is reached.
    After all, these are decisions that have a tremendous affect on our 
region's economy and quality of life.
    Many of the recent legislative proposals to change the National 
Airport slots and perimeter rules in the current FAA authorization bill 
would significantly alter the 1987 agreement.
    These changes to the rules dictating operations at National could 
degrade service at all three of the region's airports. Furthermore, 
neither the region's transportation planning nor aviation authorities 
were consulted on any of the slots or perimeter rule alteration 
proposals.
    The Metropolitan Washington Airports Authority has stated that 
additional flights at DCA would ``put a greater strain on Reagan 
National's facilities designed and improved to be a short-medium haul 
airport with limited parking, ticket counters, gates, luggage 
processing capability and security screening facilities.'' MWAA 
estimates that the proposals being considered would ``add 1,674 to 
2,426 departing passengers per day, an increase of 6.3 to 9.2 percent 
above the 26,444 daily passengers who now depart from Reagan 
National.''
    Allowing more flights in and out of National Airport impacts the 
safety of the airport's small tarmac and runway capacity. The airport 
has one runway that is used by commercial aircraft for take-offs and 
landings and only has 45 gates to accommodate arriving flights.
    Unlike many airports that are deliberately located away from 
population centers because of jet noise and air pollution, National 
Airport is located in the heart of the Greater Washington Area's urban 
center. The noise and emissions from the jets landing and taking off 
from National Airport directly impacts the quality of life for 
residents in Prince George's and Montgomery Counties in Maryland, the 
District of Columbia, and Fairfax and Arlington Counties of Virginia.
    Consistent service at National Airport lends itself to the steady 
growth at the region's major hub airports which has been at the heart 
of the regions' business communities' economic development plans.
    Companies like Northup-Grumman, L3, General Dynamics Inc., IBM, 
Deloitte and other major employers in the Baltimore Washington area 
strategically located themselves around BWI Airport.
    Several major companies have similarly located along the Dulles 
corridor in Loudoun and Fairfax Counties.
    The steady growth in service at the region's large international 
airports helped create an attractive business climate for these major 
companies to locate around. This would not have been possible without 
Congress's agreement to maintain the status quo of service at National 
Airport that in turn made Dulles and BWI the region's growth airports.
    While it is unclear how carriers would implement the new available 
flights, based on existing service and prior historical evidence of the 
impacts of increased slots at DCA allowing flights to be converted from 
within perimeter to beyond the perimeter would have a direct impact on 
the west coast service offered out of BWI Marshall. Under any scenario, 
service reductions at BWI Marshall as a result of the slots proposals 
will reduce the value and return on recent infrastructure investments 
made by the airport. The State has invested more than $1.5 billion in 
the Airport during the past 10 years and plans to invest more than $684 
million during the next 6 years.
    We remind colleagues that eliminating or changing the perimeter 
rule, or adjusting the slots rules at National Airport will result in 
tremendous economic pressure to abandon or reduce service to cities 
inside the perimeter for higher revenue, long-haul flights outside of 
the perimeter.
    Cities such as Atlanta, Charlotte, Philadelphia, Cincinnati, 
Cleveland, Newark, Memphis, Tampa, Minneapolis, Miami, Boston and 
Detroit, which are all currently within the perimeter, could lose their 
service or have it reduced if the perimeter rule is eliminated or 
altered.
    We welcome a collaborative and open process should changes to our 
region's airport operations be necessary. We ask that colleagues 
respect the need to work with us and local transportation, aviation, 
and planning experts when changes are sought.
                                 ______
                                 
    Prepared Statement of Hon. Jim Webb, U.S. Senator from Virginia

    Mr. Chairman, thank you for the opportunity to submit a statement 
for the record concerning the Metropolitan Washington Airports 
Authority and its operations in the National Capital Region. As you 
know, the Airports Authority employs about 1,400 staff to oversee two 
major airports--Washington Dulles International Airport (IAD) and 
Washington-Reagan National Airport (DCA)--while maintaining an 
efficient airspace in coordination with Thurgood Marshall Baltimore-
Washington International Airport (BWI).
    The Authority has a stellar track record of handling that 
responsibility since its establishment 23 years ago. Congress in 1987 
established the Authority as a professional organization to operate the 
airports efficiently, making a commitment to the surrounding 
communities regarding aircraft noise and traffic. That commitment was 
codified by Congress in the so-called perimeter and slot rules. Changes 
to these rules threaten to seriously degrade service to Reagan 
National, Dulles International, and Baltimore-Washington International 
airports, and break the commitment Congress made to local communities.
    Most importantly, the massive infrastructure and business 
investments that have been made in recent years at Reagan National and 
Dulles International Airports were predicated on the carefully balanced 
slot and perimeter rules. Those rules govern the number and type of 
flights at each airport, and the regional business model depends 
heavily on that fragile balance. Because Dulles is better situated to 
handle the demands of long-haul flying, Congress wisely established the 
perimeter rule to move long-haul traffic to Dulles where the space 
exists to handle the necessary parking and infrastructure expansion. 
The multi-billion dollar Dulles Development program, and the 
investments in rail service to Dulles, are all predicated upon Congress 
keeping its word on the perimeter rule. Eliminating or changing the 
perimeter rule will not only overburden capacity at Reagan National 
Airport by overwhelming the facilities but would significantly change 
the infrastructure improvements needed at Dulles International Airport 
-many of which are already under construction. Sizable business 
interests have located their operations in Fairfax and Loudoun Counties 
based on their proximity to Dulles and on assumptions about the 
stability of the slot and perimeter rules.
    Similarly, the Airports Authority rebuilt much of Reagan National 
Airport about 10 years ago, transforming it into one of the most 
efficient airports in the Nation as the facilities constructed were 
matched to the number of flights established by law. It did so with the 
slot and perimeter restrictions in mind. Any increase in the number of 
flights at Reagan National will overburden critical airport facilities 
and infrastructure, causing serious disruptions. New or converted 
flights will create more demand for parking where none is available, as 
well as congested ticket counters, gates, and local roadways. This 
situation is only exacerbated by the addition of new Advanced Imaging 
Technology (ATI) security scanners being deployed at the Reagan 
National.
    We have seen examples of service in other congested airspaces where 
reasonable slots restrictions have controlled or reduced growing delays 
in flight times. Any potential Congressional action only serves to 
further break the bond that was created with the neighbors of the 
airports, and threatens to destroy the business model that has enabled 
such significant development in the Dulles Corridor.
    In sum, the Airports Authority has a proven track record of 
managing the operations of these airports safely, professionally, and 
efficiently. Furthermore, the slot and perimeter rules established by 
Congress have been critical in fostering long-term business and 
infrastructure investment in the region. I would like to reiterate my 
commitment to this important issue, and to commend my Virginia 
counterpart, Sen. Warner, for his many efforts.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                        to Hon. Susan L. Kurland

    Question 1. MWAA has stated there are 135 flights currently 
operated from National Airport in ``air carrier'' slots by aircraft 
classified as ``commuters''--that is, smaller aircraft having 76 seats 
or less. If these 135 ``air carrier'' slots were up-gauged and fully 
utilized, what would be the resulting increase in passengers at 
National?
    Answer. Large air carrier aircraft in use at DCA, those with more 
than 76 passenger seats, average 120 seats per flight. The number of 
smaller aircraft using air carrier slots varies, as does the equipment 
used. Recent schedule data indicate an average of 60 seats per 
operation on those smaller aircraft. Based on the 135 flights indicated 
by MWAA, upgauging and utilizing the slots at the larger air carrier 
aircraft average could result in about 16,000 additional daily 
passengers.

    Question 2. How does the noise footprint of 737s that operate 
beyond perimeter compare to regional jets, MD-90s, Dash-8s, 717s, and 
757s that operate within perimeter?
    Answer. The fleet mix operating beyond the perimeter includes 737s, 
A319s, and A320s. As a result of technological advances, newer 
generations of these aircraft have reduced noise impacts. The primary 
Boeing 737 variant operating beyond the perimeter is the 737-800. While 
the noise footprint of the 737-800 is greater than the noise footprint 
for nearly any type of aircraft operating from within the perimeter, 
both the A319s and the A320s have a smaller footprint than several of 
the aircraft now operating from within the perimeter. Accordingly, any 
consideration of cumulative noise impacts is highly dependent on the 
specific fleet mix.

    Question 3. MWAA cites concerns about the financial impact the slot 
proposal will have on Dulles Airport. Since the creation of West Coast 
slots at National in 2000, what are the trends in passenger traffic 
from Dulles to those markets? Has traffic increased or decreased from 
Dulles to those markets? Is it fair to say the West Coast market for 
Dulles has grown since the addition of West Coast slots at National 
airport?
    Answer. Yes, an analysis of passenger traffic from DCA and IAD to 
western points including Denver, Las Vegas, Los Angeles, Phoenix, Salt 
Lake City and Seattle from 2000 through 2009 indicates that traffic 
grew, in terms of passengers that originated at both DCA and IAD, on an 
annual basis. Between 2000 and 2009 traffic between DCA and western 
points grew 66 percent. During the same period, Dulles traffic to the 
same western points grew by 33 percent. Traffic increased substantially 
for both National and Dulles.

    Question 4. Do you believe the addition of West Coast slots at 
National will increase or decrease combined traffic from National and 
Dulles to West Coast cities served by those slots?
    Answer. Increase. Based on the analysis conducted for the previous 
question, it is anticipated that additional points on the West Coast 
served nonstop from National will increase the combined traffic from 
National and Dulles to the West Coast.

    Question 5. Does the slot proposal present a substantial threat to 
the financial health of Dulles Airport?
    Answer. I'm not in a position to respond to this question; the 
Metropolitan Washington Airports Authority operates Dulles Airport 
would be in the best position to respond on this issue.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                         Hon. Susan L. Kurland

    Question 1. Ms. Kurland, do you consider the availability of slots 
as a significant barrier to entry at Reagan National for new entrants?
    Answer. New entrants have had a difficult time obtaining entry to 
Reagan National. A significant portion of the new entry that has 
occurred is attributable, not to use of the buy-sell rules that are 
available, but to the award of slot exemptions under mandate from the 
Congress. Low-cost carriers have complained that access to the slot 
market has been essentially denied to them by the incumbent carriers at 
the airport. Low-cost carriers have only a 3.3 percent share of slot 
interest holdings at DCA.

    Question 2. Ms. Kurland, do landing and take-off slots at Reagan 
National represent a property right for an airline or an operating 
privilege?
    Answer. The High Density Rule, governing slots at Reagan National 
(14 CFR  93.223), states:

        Slots do not represent a property right but represent an 
        operating privilege subject to absolute FAA control.

    Question 3. Ms. Kurland, if the D.C. Circuit rules with US Airways 
and Delta in its case against the FAA regarding its proposed swap of 
slots between Reagan National and LaGuardia, and the two airlines are 
able to exchange slots between the two airports as they initially 
proposed, do you believe it would increase, decrease, or have no effect 
on airline competition at Reagan National?
    Answer. As we found in the Notice granting, with conditions, the 
waiver request by US Airways and Delta to proceed with a proposed 
exchange of slots at Reagan National and LaGuardia Airports, airline 
competition at Reagan National would be adversely affected by the 
transaction, due to a combination of increased airport concentration, 
an increase in the number of monopoly or dominant markets in which 
increased pricing power could be exercised, and the potential for use 
of transferred slot interests in an anticompetitive manner. For these 
reasons, we proposed that the parties divest slots at the airport as a 
condition for approval of the transaction.

    Question 4. Ms. Kurland, on average, do you believe that slot 
controlled airports have higher ticket prices than non-slot controlled 
airports? Do you believe that increased concentration of slots 
ownership at slot controlled airport is associated with higher ticket 
prices?
    Answer. Ticket prices at slot controlled airports vary more 
directly based on extent of low-cost carrier competition, than on mere 
status as being slot controlled. In a ``Domestic Airline Fares Consumer 
Report'' published by DOT, Reagan National ranked third of 121 city 
markets for the 3rd quarter of 2009 in fare premium percentage, while 
LaGuardia was 16th. Newark was 11th, and JFK was 31st, while non slot-
controlled Dulles was 9th and non slot-controlled Thurgood Marshall 
Baltimore-Washington was 99th. Passengers pay more for nonstop service 
of equivalent distance at DCA than at alternative airports that have 
more LCC competitive services.

    Question 5. Ms. Kurland, do you believe that Reagan National, 
Dulles, and Baltimore Washington International are part of a single 
market for air transportation services in the metropolitan Washington 
DC areas, or does each airport represent largely separate markets? Are 
your views consistent with the Department of Justice's views?
    Answer. The significant price differentials among these three 
airports indicate that they are not effective economic substitutes for 
one another in domestic travel. Most travelers do not treat them 
interchangeably, as they would if the airports were in a single market. 
In its comments on the proposed slot swap to DOT, the Department of 
Justice noted as well that the sometimes significant differences in 
average fares at the airports, the high values attached to the slots, 
and carrier efforts to protect their slots ``show that there is 
differentiation between LGA and DCA and other area airports.''

    Question 6. Ms. Kurland, would it provide clarity for the FAA and 
airlines if Congress weighed in with a statutory change that says 
something to the effect that if any airlines propose to exchange slots 
between slot controlled airports, the FAA shall take the potential 
impacts of competition in account when evaluating any waiver petition?
    Answer. As we explained in the Notice granting, with conditions, 
the waiver request of US Airways and Delta to proceed with the exchange 
of slots at Reagan National and LaGuardia airports, the Department of 
Transportation has the statutory authority to review the competitive 
aspects of the proposed transaction.

    Question 7. Ms. Kurland, as you know, one of the proposals for 
changing the current perimeter rule and Reagan National include the 
conversion of 32 slots for flights from large hub airports within the 
perimeter to Reagan National for an equal amount of slots for flights 
from Reagan National to cities beyond the perimeter. Proponents of such 
a slot conversion scheme argue that smaller airports within the 
perimeter would not be impacted because the slots converted must be for 
a flight from Reagan National to a large hub within the perimeter. 
Under the current law, is there anything keeping an airline from 
backfilling the flight from Reagan National to a large hub it has 
``converted'' with slots for a flight from Reagan National to any size 
airport it currently flies to?
    Answer. Under current law, the Department can only ensure that AIR-
21 slot exemptions are utilized for designated communities. Slots are 
fully fungible, and can be utilized for any destination.

    Question 8. Ms. Kurland, the FAA has a use or lose requirement in 
place to ensure that underutilized slots are reallocated to carriers 
that will use them efficiently. My understanding is that the rule 
requires that slots be used 80 percent of the time over a two-month 
period. Otherwise, the airline has to return the slots to the FAA, for 
possible reassignment to another carrier. Nationally, has airlines' 
reduction in capacity over the past few years through cutting back 
flights led to an increase in slots that have been lost as a result of 
the use or lose rule?
    Answer. There have not been any peak hour slots (7 a.m. to 10 p.m.) 
lost due to use or lose in the past few years.

    Question 9. In the past two decades, has the FAA ever enforced the 
use or lose rule at Reagan National? If so, on how many separate 
occasions? And in what years?
    Answer. The FAA enforces and monitors the use or lose rule on a 
regular basis. Carriers report usage for each two-month period and must 
meet the minimum usage in each bi-monthly cycle. Peak hour slots, those 
between 7 a.m. and 10 p.m., are rarely lost due to use or lose rules as 
carriers meet the minimum usage or trade them to other carriers. After 
9/11, DCA was initially closed and scheduled traffic returned on a 
phased basis as new security rules were implemented. The FAA granted a 
general waiver to the usage rules to recognize those operating 
constraints. The most recent peak hour slot withdrawn for failing to 
meet the minimum usage requirements was in 2004. In the early 1990s the 
FAA increased the minimum usage to 80 percent from 65 percent. The FAA 
withdrew some slots following that rule change. Some carriers have had 
slots withdrawn periodically during the off-peak hours of 6 a.m. and 10 
p.m. to midnight. However, during these low demand hours, the FAA 
typically has slots available for allocation.

    Question 10. Are there ways for carriers to game the system and 
keep an underutilized slot out of a competitor's hand? For example the 
Department of Justice in its comments to the FAA in the proposed swap 
of slots between DCA and LaGuardia stated ``. . . one way to minimize 
the cost of meeting the 80 percent use or lose requirement is to fly 
excessive frequencies or small planes . . . another way to hold onto 
slots without using them productively is referred to as `babysitting' . 
. .''
    Answer. We believe some carriers at slot controlled airports have 
adopted approaches that literally comply with the current 80 percent 
use-or-lose provision, but have allowed underutilization of their slot 
holdings.

    Question 10a. Is there any way for the FAA to ensure that airlines 
can't game the system at Reagan National with respect to the use or 
lose rule?
    Answer. The Department is in the process of reviewing this issue.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                         Hon. Susan L. Kurland

    Question 1. What factors are considered when making decisions about 
slot allocations under standard procedures? Is the promotion of 
competition a factor that is considered?
    Answer. Slots were originally allocated on the basis of existing 
carrier service at DCA. In order to reallocate slots that have become 
available for redistribution, the FAA conducts a random lottery. These 
slots are first made available to new entrant and limited incumbent 
carriers, then to larger carriers only on a temporary basis until the 
next lottery. See 14 CFR  93.225 for these procedures. The last slot 
lottery at DCA was held in 2003. For the allocation of slot exemptions 
under AIR-21 authority, Congress has provided specific criteria for 
selections. For beyond-perimeter exemptions, increasing competition by 
new entrant carriers or in multiple markets is one of four selection 
criteria. For within-perimeter exemptions, status as a new entrant or 
limited incumbent carrier is one of five selection criteria, except 
that it does not apply in the instance of awards involving small hub or 
nonhub airports. Another criterion, applicable for all within-perimeter 
selections, is producing ``maximum competitive benefits, including low 
fares.'' See 49 U.S.C.  41718.

    Question 2. In your opinion, would a slot conversion proposal, 
allocated proportionate to air carriers' current presence at DCA, 
promote competition among carriers at DCA or would it allocate a scarce 
resource disproportionately to carriers who already have a significant 
presence at DCA?
    Answer. Expansion and beyond-perimeter use of slots are matters on 
which the Department has historically deferred to Congress, given its 
longstanding interest and considerable experience in these issues. The 
slot proposals before the Congress are complex in a number of regards, 
and we believe they are best weighed and addressed by Congress.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                              Lee R. Kair

    Question 1. Mr. Kair, as you know airports are installing Advanced 
Imaging Technology (AIT) for primary screening. My understanding is 
that it takes longer for these devices to screen passengers than the 
current technology. Additionally, depending on the layout of the 
security area at a given airport, the larger footprint of these AIT 
devices may lead to fewer independent lanes for screening passengers, 
thus lowering capacity. The combination of these factors may lead to a 
lower throughput of passengers through the security lines at some 
airports, possibly leading to longer lines and wait times, especially 
during busier times of the day. Does DHS expect nominally longer 
passenger wait times at security lanes when the AIT devices are 
installed at Reagan National Airport for primary screening during the 
busier times of the day?
    Answer. AIT screening does take slightly longer than walk-through 
metal detector screening for the average, fully-divested passenger. The 
difference varies, but is in terms of seconds and not minutes. A 
concept of operations and protocols have been established to ensure 
that traffic flow through the checkpoint is not degraded due to 
installation of Advanced Imaging Technology. The limiting factor in the 
passenger screening process at the checkpoints is not the time 
passengers spend transiting either the existing or the new personal 
screening equipment. Rather it is time spent on examining carry-on 
baggage and other personal property. For all deployments, the 
Transportation Security Administration works closely with airports to 
ensure protocols and equipment do not delay the screening process while 
enhancing security for the traveling public.

    Question 2. Would DHS expect nominally longer passenger wait times 
at Reagan National security lanes utilizing AIT devices if the number 
of passengers having to be cleared per hour in any given hour increases 
by 500 individuals? 1000 individuals? 1500 individuals?
    Answer. Not necessarily. Any significant increase in passenger 
traffic would prompt a review of whether the checkpoint's existing 
lanes and equipment would meet that new volume on a consistent basis. 
This analysis is independent of Advanced Imaging Technology. For all 
deployments, the Transportation Security Administration works closely 
with airports to ensure adequate floor space, equipment, and staff are 
available for screening demands.

    Question 3. Does DHS model the projected passenger capacity and 
throughput through security lines? Has DHS modeled these factors for 
Reagan National Airport under different scenarios for the volume of 
passengers departing the airport per hour? What is the estimated 
capacity increase that leads to a bottleneck at the security 
checkpoint?
    Answer. Yes. The Department of Homeland Security utilizes a 
sophisticated discrete event simulation model to identify checkpoints 
with capacity constraints. This model incorporates flight schedules 
provided by the Official Airline Guide and information provided to 
Federal Security Directors through collaboration with their respective 
airport stakeholders to determine projected passengers for each 
checkpoint down to a 5 minute interval. As a generalization, if a 
checkpoint is at capacity, a 10 percent increase in passenger volume 
may result in a bottleneck at that checkpoint.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                    to Hon. Charles Darwin Snelling

    Question 1. If overall West Coast traffic from National and Dulles 
grows with the addition of slots at National, and the slot proposal 
eliminates the current financial firewalls between National and Dulles, 
wouldn't both airports be in a stronger financial position as a system?
    Answer. The elimination of the ``financial firewall'' between 
Reagan National and Dulles International, would allow airline rates and 
charges to be set for the two airports as if they were a single 
facility. Eliminating the firewall would be useful in enabling the 
Airports Authority to ensure the cost to the airlines of serving Dulles 
International is competitive with the cost to the airlines of serving 
Reagan National. Eliminating the firewall would not make the airports 
stronger financially, but would permit the Airports Authority to manage 
cost better to assure Dulles International remains generally 
competitive and comparable to the costs of operating at Reagan 
National.
    The ``financial firewall'' is found in part in the Transfer Act (49 
U.S.C.,  49101 et seq.), which authorized the lease of the two 
Airports. It would need to be amended to allow the Airports Authority 
to blend the rates. If this were done, the airports would be in a 
better financial position as a system.

    Question 2. Given that Congress has already modified the perimeter 
in two previous FAA reauthorization bills, do you believe it is 
appropriate to expect additional modifications in the future, and 
manage Dulles finances accordingly?
    Answer. To the extent that Congress determines to authorize 
additional within- or beyond-perimeter flights at Reagan National, we 
will do our best to manage the airport's facilities and the Authority's 
finances to accommodate the new flights to the maximum degree possible, 
taking into account the airport's very limited physical capacity, with 
one air carrier runway and constrained landside facilities. We cannot, 
however guarantee that sufficient modifications can be made to avoid 
congestion and delays in services in the future. In the event of 
additional slots, managing Dulles' finances would benefit from the 
elimination of the financial firewall.

    Question 3. MWAA has stated there are 135 flights currently 
operated from Reagan National Airport in ``air carrier'' slots by 
aircraft classified as ``commuters''--that is, smaller aircraft having 
76 seats or less. If these 135 ``air carrier'' slots were up-gauged and 
fully utilized, what would be the resulting increase in passengers at 
Reagan National?
    Answer. There are approximately 135 daily departures from Reagan 
National operated by airlines using ``air carrier'' slots to operate 
smaller ``commuter'' aircraft. These departures are tied to the same 
number of arrival flights, with the result that there are today 
approximately 270 ``air carrier'' slots at Reagan National that are 
operating using ``commuter'' aircraft.
    We estimate 16,600 additional daily passengers (or 6 million daily 
passengers per year) could result from airlines utilizing 100 percent 
of their current air carrier slots with up-gauged aircraft.
    This amount was calculated by:

   Determining an average number of seats for aircraft 
        currently operated at Reagan National: 56.51 seats for commuter 
        aircraft and 133.56 seats for air carrier aircraft;

   Calculating the difference in those average numbers of seats 
        (133.56 - 56.51 = +76.85 seats);

   Multiplying the difference by 270 slots (76.85 x 270) to 
        arrive at the number of new seats per day (20,750 new seats);

   Multiplying this number of new seats by 80 percent, the 
        average percentage of seats filled per flight at Reagan 
        National (20,750 x .80) to arrive at the number of new or 
        additional passengers per day (16,600 passengers);

   Multiplying this number of new passengers per day by 365 
        days to arrive at the number of additional passengers per year 
        ((6 million passengers);

    An additional 6 million passengers would represent a 34 percent 
increase in the present volume of annual passengers at Reagan National 
(17.6 million passengers for the September 2009-August 2010 period). An 
annual passenger level of 23.6 million passengers would be a 26 percent 
increase compared to the largest number of passengers ever served in a 
year at Reagan National (18.7 million in 2007).
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                      Hon. Charles Darwin Snelling

    Question 1. Mr. Snelling and Ms. Hampton, as you know last year US 
Airways requested an FAA waiver to trade some of the takeoff and 
landing slots they control at LaGuardia airport for some of the takeoff 
and landings slots Delta controls at Reagan National airport. Included 
in the joint comments by the two airlines to the FAA in its request for 
a waiver is the following: ``US Airways will make more efficient use of 
the DCA slots than Delta by upgauging aircraft. Specifically, U.S. 
Airways--words redacted--larger jets, which will increase U.S. Airways' 
two-class service significantly and expand capacity at DCA overall. The 
projected effect is to increase total capacity at DCA by approximately 
2.5 million annual roundtrip seats.''
    In 2009, there were roughly seventeen and a half million passenger 
traveling through Reagan National. Assume the swap goes forward either 
through a court decision or some negotiated settlement between the FAA 
and the two airlines. And assume the actual increase in passengers 
turns out to be a significant fraction of the projected increase in 
capacity in annual roundtrip seats.
    Broadly speaking, how would the increase impact terminal-side 
facilities such as security lines, ticket counters, baggage handling, 
gates, parking, and so on at the airport? Where would you expect there 
be operational bottlenecks? What actions would the MWAA then take to 
relieve these bottlenecks?
    Answer. Terminal Facilities: Reagan National operates as four 
separate, independent terminal zones. As a consequence, impacts felt as 
a result of increased passenger activity in one zone cannot quickly and 
easily be mitigated by using available capacity from another. Figure 1 
indicates the different terminal zones.



    Terminal Facilities: Operational bottlenecks and unacceptably long 
queues would be anticipated at the North Pier and Center Pier security 
screening checkpoints. We would expect operational bottlenecks to occur 
as a result of increased queues in the North Pier and Center Pier 
ticketing areas resulting from the increased activity in the US Airways 
operation. Finally, we anticipate that the baggage makeup function 
supporting US Airways would experience significant congestion as 
activity increases.
    Terminal Curbside and Roadway: Terminal curb side, where loading 
and off loading of passengers takes place, would not be adversely 
impacted by an increase in passenger activity. However, we would 
anticipate considerable bottlenecks at various intersections on the 
roadway system leading into the terminal area. This in turn would have 
the effect of potentially backing up the entire airport roadway system 
during peak periods.

    Question 1a. What actions would the Airports Authority then take to 
relieve these bottlenecks?
    Answer. In the terminal area, there is little room for future 
expansion of the North and Center piers. The Airports Authority would 
need to pursue a major redevelopment and expansion of the Terminal A 
zone (see Figure 1 above). Initial improvements at critical roadway 
intersections would have to be constructed to mitigate the initial 
impacts of additional traffic; however, these initial improvements 
would probably not address the long-term impacts to the roadway system. 
We would anticipate that the redevelopment and expansion of Terminal A, 
coupled with the increase in vehicular traffic, would ultimately 
necessitate a major reconfiguration of the airport roadway. The 
redevelopment of the terminal area and roadway would be a five to 7 
year effort.

    Question 2. Did the MWAA file comments at the FAA in FAA Docket 
Number FAA-2010-0109? If not, why not? Based on all the concerns I have 
heard raised by the Authority over the years regarding terminal side 
capacity constraints with respect to increasing the number of beyond 
the perimeter slots by even a modest amount, it seems that such a 
potentially significant increase in passengers would cause the 
Authority to file comments with the FAA expressing its views regarding 
the proposed petition for a waiver.
    Answer. The Airports Authority did not submit comments on the slot 
exchange proposed by Delta and US Airways at Reagan National because 
the proposal did not affect the number or nature of the slots in 
question. It has been the practice of the Airports Authority not to 
participate in proceedings regarding proposed commercial transactions 
between or among airlines that involve slots at Reagan National, so 
long as the transactions do not propose to alter the total number or 
nature of the slots or slot exemptions that are authorized by statute 
or regulation. This practice was reflected in Ms. Hampton's statement 
during the September 16, 2010 hearing (transcript, pp. 51-52), ``Mr. 
Chairman, we have taken it as our responsibility to manage the airports 
to the statutes. . . .''

    Question 3. Mr. Snelling and Ms. Hampton, do you consider the 
availability of slots as a significant barrier to entry at Reagan 
National for new entrants?
    Answer. The Airports Authority sees the availability of slots at 
Reagan National as part of legislation enacted by the Congress to guide 
the Authority's management of National and Dulles International. We 
have acted in good faith to follow the roadmap that Congress laid out 
in the Transfer Act: i.e., to construct needed improvements at both 
Airports; plan and construct facilities at National based on 48 air 
carrier and commuter slots per hour and the 1,250 mile perimeter rule; 
and plan and construct facilities at Dulles International to 
accommodate most of the region's future growth.
    In the past twenty years, the Federal Aviation Administration has 
held slot proceedings to distribute slots as directed by Congress. The 
Airports Authority has accommodated many new entrant carriers at Reagan 
National, including AirTran, Alaska, Frontier, Spirit and JetBlue which 
will begin service at the airport on November 1, 2010.
    The slots remain the creation of Federal regulations, not any 
action of the Airports Authority. The Department of Transportation and 
its Federal Aviation Administration control what carriers may hold and 
use the slots, thereby controlling access by new entrants.

    Question 4. Mr. Snelling and Ms. Hampton do landing and takeoff 
slots at Reagan National represent a property right for an airline or 
an operating privilege?
    Answer. This is a question that is open to considerable debate 
among, and is answered differently by, many players in the aviation 
industry. In our view, slots share characteristics of both a property 
interest and a governmental privilege or license. Under Department of 
Transportation regulations, they may be traded between carriers, 
bought, sold, leased and even held by non-carriers. That regulation 
provides, however, that the slots do not create a property interest.

    Question 5. Mr. Snelling and Ms. Hampton, if the D.C. Circuit rules 
with US Airways and Delta in its case against the FAA regarding its 
proposed swap of slots between Reagan National and LaGuardia, and the 
two airlines are able to exchange slots between the two airports as 
they initially proposed, do you believe it would increase, decrease, or 
have no effect on airline competition at Reagan National? Do you 
believe it would, increase, decrease, or have no effect on ticket 
prices at Reagan National for routes now served by only one airline?
    Answer. Should the D.C. Circuit rule that US Airways and Delta may 
exchange slots at Reagan National as originally proposed, US Airways 
would become the largest carrier at Reagan National and Delta would 
have a decrease in activity. The Airports Authority considers the fares 
airlines charge at Reagan National, as with any airport, a commercial 
decision to be made by each carrier and thus takes no opinion on this 
matter.

    Question 6. Mr. Snelling and Ms. Hampton, on average, do you 
believe that slot controlled airports have higher ticket prices than 
non-slot controlled airports? Do you believe that increased 
concentration of slots ownership at slot controlled airport is 
associated with higher ticket prices?
    Answer. The United States Department of Transportation's (USDOT) 
Office of Aviation Analysis monitors and reports air fares and is best 
able to accurately track and report this information comparing airports 
nationwide. Based on the fundamentals of supply and demand, air fares 
at significantly slot-controlled airports should be expected to be 
higher than at otherwise comparable non-slot-controlled airports. 
Increased ownership or control of slots at a slot-controlled airport, 
in our opinion, will likely result in higher fares than fares at 
comparable non-slot-controlled airports. As a practical matter, the 
existence of slot controls at an airport means that there is more 
demand, at least at certain hours, than the airport can handle without 
serious delays. That in turn means there is more demand for services 
than the airport can provide. In economic theory, this results in 
higher prices.

    Question 7. Mr. Snelling and Ms. Hampton, do you believe that 
Reagan National, Dulles International, and Baltimore Washington 
International are part of a single market for air transportation 
services in the metropolitan Washington DC areas, or does each airport 
represent largely separate markets? Are your views consistent with the 
Department of Justice's views?
    Answer. Reagan National, Dulles International and BWI-Marshall can 
be seen both as serving separate air service markets and as part of a 
larger single air service market. The airports serve as separate 
markets for those travelers who are mostly interested in traveling from 
an airport close to their home or business (within 30 to 60 minutes 
drive). This is especially true for business travelers who are less 
price-sensitive and highly time-conscious. At the same time, the three 
Washington region airports may be viewed as serving a single market 
consisting of travelers originating from outside the Washington region, 
as well as travelers for whom fare is the most important factor in 
selecting a flight and airport. When air fare represents such a factor, 
travelers will travel beyond their closest airport to obtain the lowest 
fare.
    The only time (of which we are aware) that the U.S. Department of 
Justice (DOJ) addressed the issue of the market served by the 
Washington region's three airports was in comments related to the US 
Airways and Delta ``slot swap.'' Based on our reading of those 
comments, DOJ's position is that, for some air passengers, airports 
within the region are substitutes for each other and, for other 
passengers, they are not. This suggests that DOJ defines the Washington 
market not by geography, but more narrowly by fare classes and 
passengers' willingness to pay. The Airports Authority believes it is 
generally more realistic to view the Washington region as one market 
that is served by the region's three airports, with the market's air 
traveler participants free to choose which airport they prefer based on 
a variety of factors, including closeness to home or work, convenience 
of flight schedules and size of fares. For this reason, we believe that 
increases in the availability or prices of flights at Reagan National 
may affect passenger choice to fly from Dulles International or BWI-
Marshall.

    Question 8. Mr. Snelling and Ms. Hampton, as you know, one of the 
proposals for changing the current perimeter rule and Reagan National 
include the conversion of 32 slots for flights from large hub airports 
within the perimeter to Reagan National for an equal amount of slots 
for flights from Reagan National to cities beyond the perimeter. How 
would such a proposal, if enacted into law, impact any current 
contracts with airlines operating out of Dulles? For example, would it 
make any contracts null and void? Would it allow for an airline 
operating out of Dulles to renegotiate with the MWAA price, terms, and 
conditions?
    Answer. With certain exceptions, airlines operating at Reagan 
National and Dulles International are signatories to a facilities use 
and premises lease agreement with the Airports Authority that provides 
access to both airports. That agreement, again with certain exceptions, 
generally does not permit a signatory airline operating at Dulles 
International to terminate the agreement, or obtain a modification to 
the agreement's terms and conditions, based upon an enlargement of the 
number of slots or slot exemptions authorized at Reagan National.

    Question 9. Proponents of such a slot conversion scheme argue that 
smaller airports within the perimeter would not be impacted because the 
slots converted must be for a flight from Reagan National to a large 
hub within the perimeter. Under the current law, is there anything 
keeping an airline from backfilling the flight from Reagan National to 
a large hub it has ``converted'' with slots for a flight from Reagan 
National to any size airport it currently flies to?
    Answer. All slots awarded to carriers, through previous FAA 
reauthorization bills (AIR-21 or VISION 100), are actually considered 
``exemptions'' to the High Density Rule and are restricted to specific 
routes awarded by DOT. These exemptions may not be used to serve other 
routes without going through a DOT reallocation proceeding.
    Currently, airlines are not restricted on how they may use their 
traditional slots and may serve any market within the perimeter and 
change them at will. In the proposed language, it would appear airlines 
would not be precluded from ``backfilling'' a large hub inside-
perimeter market flight, used to ``convert'' to a beyond-perimeter 
flight, with their slots currently used to serve a small inside-
perimeter market flight. We believe this could put small and medium-
sized market air service at risk.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Mark Warner to 
                      Hon. Charles Darwin Snelling

    Question 1. Is there a direct financial incentive for MWAA to limit 
flights at DCA? It is my understanding that MWAA receives revenues from 
collecting Passenger Facility Charges (PFCs), concessions, landing 
fees, etc. Does MWAA receive any revenue from airfare itself?
    Answer. There is no direct financial incentive to the Airports 
Authority to limit flights at Reagan National, if one considers Reagan 
National taken by itself as a standalone airport. However, to fully 
answer this question, both Reagan National and Dulles International 
must be considered. If we assume that the infrastructure would permit 
unlimited flights to Reagan National, the Airports Authority would 
benefit financially at Reagan National, although there would also be 
additional expenses, both capital and operating. As correctly observed, 
there would be additional revenue from Passenger Facility Charges and 
concessions (parking, rental cars, food and beverage, etc.) We believe 
a negative financial impact would accrue to Dulles International. The 
demand for flights at Reagan National is great, and could potentially 
draw existing flights and routes from Dulles International. Those 
routes and flights at Dulles International may not be replaced in the 
near term, as the demand may not support it, and the cost structure is 
currently higher at Dulles International, making it more difficult for 
airlines to charge market fares that may be feasible. As airlines pay 
costs for operations of the airfield and terminal facilities used, that 
scenario would leave fixed costs in place at Dulles International, 
which would need to be absorbed by fewer flights. The financial impact 
to the Airports Authority would likely be negative at Dulles 
International, and would result from fewer Passenger Facility Charges 
collected at Dulles International, and less concession revenue.

    Question 2. If fares are higher at DCA than at other area airports, 
who receives that windfall--MWAA or the air carriers?
    Answer. The Airlines would receive the benefit of higher fares. 
Airlines pay actual costs for airfield operations, and terminal space 
used by the airline. Under our Airport Use and Premises Lease Agreement 
with the airlines, this cost to the airlines is also mitigated by 
sharing net remaining revenue, which is generated by non-airline 
revenues such as concessions (parking, rental cars, food and beverage, 
etc.). Airlines set the fares for flights into and out of Reagan 
National based upon market rates. The benefit of any market rate fares 
set by the airlines, in excess of net costs paid to the airports, 
accrues to the airlines.

    Question 3. The Commerce Committee has proposed to add 16 round 
trip slot conversions beyond the perimeter and 5 round trip flights for 
new entrants/limited incumbents. That's a total of 42 new slots for 
beyond perimeter from Reagan National Airport. Clearly, having 42 new, 
round-trip flights to the West Coast from Reagan National Airport, 
instead of Dulles Airport, will significantly impact traffic loads at 
Dulles. Are you aware of any official studies that state 16+5 is the 
``tipping point'' in the balance between National and Dulles?
    Answer. We are unaware of any official studies stating 42 new 
beyond perimeter slots (16 slot pair conversions and 5 new entrant/
limited incumbent slot pairs) are the ``tipping point'' in the balance 
between Reagan National and Dulles International. However, as Ms. 
Hampton stated, our analysis indicates that, should 42 beyond perimeter 
slots be added at Reagan National, Dulles International could lose 
700,000 passengers a year and BWI-Marshall could lose 500,000 
passengers per year.

    Question 4. We clearly aren't going to repeal this law once 
enacted. Are there any remedies that could be taken should traffic 
loads to Dulles fall significantly because of this decision?
    Answer. A significant decrease in traffic loads at Dulles 
International means that the airlines experiencing a decrease would be 
required to cover airport fees and charges with fewer revenue 
passengers. Moreover, with the upcoming completion of major capital 
projects at Dulles International, airline fees and charges will, in the 
next few years, increase as the debt service associated with those 
projects is loaded into the calculation of airport fees and charges. 
Our concern is that, for some airlines, this combination of higher fees 
and charges and lower passenger levels would raise the ``tipping 
point'' question--i.e., whether their continued operations at Dulles 
International remains economically viable. To avoid any airline from 
concluding that this point has been reached, the Airports Authority 
would, as it has over the past few years, work to reduce airport costs, 
and to find non-airline revenue and funds to cover those costs, to the 
maximum degree feasible. However, there is only so much the Airports 
Authority can do in these areas. A further step, which would require 
authorization from Congress, would be for the Airports Authority to 
transfer any operating costs from Dulles International to Reagan 
National where they could be included in the calculation of the fees 
and charges assessed airlines operating at that airport.

    Question 5. What are the potential impacts on your airport at 
Dulles?
    Answer. In a report prepared for the Airports Authority by Oliver 
Wyman, it is stated that the proposed increase in beyond-perimeter 
flights at Reagan National will equal over 50 percent of the current 
beyond-perimeter flights at Dulles International, and equal to the 
current beyond-perimeter flights at BWI-Marshall. This report further 
explains that there may be a 700,000 potential passenger reduction at 
Dulles International with the following possible outcomes:

   Existing Dulles International airlines serving beyond-
        perimeter destinations could reduce fares and increase flights 
        to maintain market share; however this is considered unlikely 
        in today's environment due to almost certain loss of 
        profitability.

   Existing Dulles International hub airline (United) could 
        ``back-fill'' enough of the lost Washington-originating 
        passengers to some destinations with passengers connecting at 
        Dulles International from other airports, resulting in minimal 
        Dulles International flight elimination.

   Because of the increase in cost per passenger, United and 
        non-hub airlines (e.g., American, Virgin America, and Delta) 
        could determine it is not profitable to continue long-haul 
        flights in some markets and eliminate the Dulles International 
        flights to maintain/increase profitability, resulting in 
        greater Dulles International flight elimination.

   Loss in any Dulles International flights could lead to 
        proportional increases in airport costs (landing fees, rents, 
        etc.) for remaining flights, potentially resulting in further 
        flight reductions by airlines that cannot absorb/pass-on the 
        cost increases, e.g., Low Cost Carriers. If long-haul flights 
        to Reagan National displace short-haul flights to the 
        Washington area, Dulles International could benefit by 
        increasing its share of short-haul flights. This would be an 
        unusual use of the resources of four long runways at Dulles 
        International and one short-air carrier runway at Reagan 
        National.
                                 ______
                                 
 Response to Written Question Submitted by Hon. John D. Rockefeller IV 
                        to Michael J. Sammartino

    Question. How does the noise footprint of 737s that operate beyond 
perimeter compare to regional jets, MD-90s, Dash-8s, 717s, and 757s 
that operate within perimeter?
    Answer. The fleet mix operating beyond the perimeter includes 737s, 
A319s, and A320s. As a result of technological advances, newer 
generations of these aircraft have reduced noise impacts. The primary 
Boeing 737 variant operating beyond the perimeter is the 737-800. The 
noise footprint of the 737-800 is greater than the noise footprint for 
nearly any type of aircraft operating from within the perimeter. 
However, both the A319s and the A320s have a smaller footprint than 
several of the aircraft operating from within the perimeter. 
Accordingly, any consideration of cumulative noise impacts is highly 
dependent on the specific fleet mix.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                         Michael J. Sammartino

    Question 1. Mr. Sammartino, at Reagan National Airport, is there a 
significant difference in the level of airside resources required to 
conduct a takeoff or landing operation for air carrier, air taxi, and 
general aviation (and other) flights?
    Answer. There are not significant differences unless an aircraft 
requires additional separation or special handling.
    Fleet mix is one factor in runway throughput as different aircraft 
types have different separation standards for wake turbulence purposes. 
Most of the air carrier and commuter (air taxi) aircraft currently used 
at Reagan National Airport are classified by the FAA as Large aircraft. 
Boeing 757 aircraft require additional separation and are currently 
about 3 percent of the flights. Heavy aircraft also require additional 
separation but do not operate at Reagan National on a regular basis.
    Some general aviation, business aviation, and smaller carrier 
aircraft use the secondary runways when possible, which helps maximize 
main runway throughput and minimize.

    Question 2. Mr. Sammartino, if the current rules regarding slots 
were not in place, is there a practical limit as to how many combined 
takeoff and landing operations per hour can be performed at Reagan 
National due to airside capacity?
    Answer. Airport capacity depends on factors such as runway 
configuration, use of the available runways by operators, taxiways and 
ground movement areas, aircraft fleet mix, and weather and other 
operating conditions. Because of the number of variables, there is no 
single capacity number applicable under all conditions. However, the 
airport is averaging an available runway throughput of 67 operations 
per hour. Furthermore, there may be other airport airside conditions 
(such as gate and ramp availability) that limit capacity below runway 
capacity, but these limitations are outside of FAA's expertise and 
control.

    Question 3. Mr. Sammartino, the current rules at Reagan National 
allow for 37 slots for take-offs and or landings per hour by air 
carriers, 11 slots per hour for commuter flights (air taxis) and 12 
slots per hour for general aviation (GA) and other flights. 
Additionally, Congress exempted a number of slots from the rules, 
including twenty-two for beyond the perimeter flights.
    Answer. It is correct that the current rules at Reagan National 
allow for thirty-seven slots for take offs and or landing per hour by 
candidates. However, the slot exemptions created by Congress include 
twenty-four beyond the perimeter slots.

    Question 4. In order for GA flights to resume at Reagan National 
after 9/11, new security requirements were put in place. A consequence 
of these stringent requirements is that the number of GA slots used in 
an entire day at Reagan National is frequently below the number of GA 
slots available on a per hour basis. What happens to these unused GA 
slots? For example, can these slots be reallocated to air carrier or 
commuter flights under any circumstance?
    Answer. The allocated slots for GA and other unscheduled operations 
are unused unless there is demand by that category of operator. The 
reservations for unscheduled (``Other'') operations cannot be 
reallocated to air carrier or commuter flights under the existing rule.

    Question 5. Do you believe that a certain number of GA slots per 
hour should be reallocated permanently to air carrier and/or commuter 
flights given the reality of flying a GA plane into Reagan National?
    Answer. There is clearly unmet demand for additional scheduled 
operations at Reagan National. In order to ensure that congestion does 
not increase at Reagan National, reductions could be made to the 12 
hourly reservations set aside for unscheduled operations to offset 
increases in scheduled operations. However, anticipated demand on the 
main runway would need to be reviewed as airport runway capacity is 
based on some flights using the shorter runways. Terminals, gates, and 
landside capacity would also need to be considered.

    Question 6. Can the decision to reallocate GA slots at Reagan 
National be made through an FAA rule change (through a rulemaking 
process), or does it require a statutory change?
    Answer. The FAA could change the number of slots and the operator 
categories through rulemaking. The perimeter rule is statutory.

    Question 7. Mr. Sammartino, DOJ's comments to the FAA in Docket 
Number FAA-2010-0109 under ``Slot Hoarding'' (beginning on page 9) 
describes ways in which airlines that operate at DCA ``have adopted 
practices designed to meet the FAA's use of lose requirement at minimum 
cost, keeping slots from falling into the hands of other carriers''. 
The public version states that one way to minimize the cost of meeting 
the 80 percent use or lose requirement is to fly excessive frequencies 
or small planes. The comments go on to discuss the practice of 
``babysitting'' of slots. Do you agree with DOJ's comments that 
airlines operating slots at Reagan National sometimes fly excessively 
or use small planes in order to comply with the letter of the use or 
lose rule?
    Answer. We believe some carriers at slot-controlled airports have 
adopted approaches that comply with existing rules without maximizing 
slot allocations with scheduled flights.

    Question 8. Are the practices the DOJ refers to as ``babysitting'' 
something the FAA has observed occurring at Reagan National?
    Answer. The FAA review of operations at Reagan National has 
generally focused on whether carriers are operating according to 
existing rules rather than whether slots are being used to the maximum 
extent allowed under the rules. Carriers make decisions on how to use 
their slots based on their business model or other needs.

    Question 9. Is there any way for the FAA to know for sure if any 
gaming of the use or lose rule is taking place at Reagan National?
    Answer. The FAA has several data elements to review that are 
sufficient to determine if carriers are complying with the rules: 
records of the allocated slots, published flight information, proposed 
flight plans, actual flight operations, and carrier reported use or 
lose information.

    Question 10. Is there any way for the FAA to ensure that airlines 
can't game the system at Reagan National with respect to the use or 
lose rule?
    Answer. The FAA has sufficient means to determine if slots are used 
in accordance with existing rules.

    Question 11. If the use or lose rule was not in effect at Reagan 
National, would you expect there to be a nominal reduction in flight 
operations?
    Answer. The demand for slots at Reagan National is very high so 
only a small percentage of slots would likely be unused in the long-
term in the absence of a minimum usage requirement. During certain 
conditions, such as economic downturns in the last several years, 
airlines have asked the FAA to waive the minimum usage requirements to 
allow them to temporarily cancel flights. This suggests that carriers 
sometimes operate flights in order to meet the use or lose requirements 
when they would prefer to reduce operations.

    Question 12. Mr. Sammartino, for calendar 2009, what was the 
average number of slots-per-hour used at Reagan National Airport by air 
carriers, air taxi, and general aviation (and others)?
    Answer. Actual air carrier weekday operations in 2009 averaged 35 
per hour and air taxi operations averaged 13 during the peak hours from 
7 a.m. to 10 p.m. General aviation and other unscheduled operators 
averaged less than one hourly operation. It should be noted that air 
traffic count for the air carrier and air taxi categories uses a 
passenger seat count number that differs from the slot rule categories 
and is based on runway time rather than scheduled time of operation or 
gate arrival/departure. The operation count includes flight 
cancellations, other delays or disruptions, and slots that are used 
less than 100 percent. Total weekday operations in all hours averaged 
800: Air carriers: 580; Air Taxi: 210; General Aviation/Other: 10.

                                  
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