[Federal Register Volume 64, Number 7 (Tuesday, January 12, 1999)]
[Proposed Rules]
[Pages 2086-2093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-621]



[[Page 2085]]

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Part V





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 93



High Density Airports; Allocation of Slots; Proposed Rule

  Federal Register / Vol. 64, No. 7 / Tuesday, January 12, 1999 / 
Proposed Rules  

[[Page 2086]]



DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 93

[Docket No. FAA-1999-4971; Notice No. 99-20]
RIN 2120-AG50


High Density Airports; Allocation of Slots

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This document proposes to amend the regulations governing 
takeoff and landing slots and slot allocation procedures at certain 
High Density Traffic Airports. As a result of the ``Open Transborder'' 
Agreement between the Government of the United States and Government of 
Canada, this proposed rule is necessary to codify the provisions of the 
bilateral agreement and ensure consistency between FAA regulations 
governing slots and the bilateral agreement.

DATES: Comments must be received on or before February 11, 1999.

ADDRESSES: Comments on this proposed rulemaking should be mailed or 
delivered, in duplicate, to: U.S. Department of Transportation Dockets, 
Docket No. FAA-1999-4971, 400 Seventh Street, SW, Room Plaza 401, 
Washington, DC 20590. Comments may also be sent electronically to the 
following Internet address: [email protected]. Comments may be 
filed and/or examined in Room Plaza 401 between 10 a.m. and 5 p.m. 
weekdays except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Lorelei D. Peter, Airspace and Air 
Traffic Law Branch, Regulations Division, Office of the Chief Counsel, 
Federal Aviation Administration, 800 Independence Avenue, SW., 
Washington, DC 20591; telephone (202) 267-3073.

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested persons are invited to participate in the proposed 
rulemaking by submitting such written data, views, or arguments as they 
may desire. Comments relating to the environmental, energy, federalism, 
or economic impact that may result from adopting the proposals in this 
notice are also invited. Comments that provide the factual basis 
supporting the views and suggestions presented are particularly helpful 
in developing reasoned regulatory decisions. Communications should 
identify the regulatory docket number and be submitted in triplicate to 
the above specified address. All communications and a report 
summarizing any substantive public contact with FAA personnel on this 
rulemaking will be filed in the docket. The docket is available for 
public inspection both before and after the closing date for receiving 
comments.
    Before taking any final action on this proposal, the Administrator 
will consider all comments made on or before the closing date for 
comments and the proposal may be changed in light of the comments 
received.
    The FAA will acknowledge receipt of a comment if the commenter 
includes a self-addressed, stamped postcard with the comment. The 
postcard should be marked ``Comments to Docket No. FAA-1999-4971.'' 
When the comment is received by the FAA, the postcard will be dated, 
time stamped, and returned to the commenter.

Availablity of NPRM

    Any person may obtain a copy of this NPRM by submitting a request 
to the Federal Aviation Administration, Office of Rulemaking, 800 
Independence Avenue, SW., Washington, DC 20591, or by calling (202) 
267-9677. Communications must identify the notice number of this NPRM. 
Persons interested in being placed on a mailing list for future FAA 
NPRMs should request a copy of Advisory Circular No. 11-2A, Notice of 
Proposed Rulemaking Distribution System, which describes application 
procedures.
    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the FAA regulations section 
of the Fedworld electronic bulletin board service (telephone 703-321-
3339) or the Federal Register's electronic bulletin board service 
(telephone 202-512-1661). Internet users may read the FAA's web page at 
http://www.faa.gov or the Federal Register's web page at http://
www.access.gpo.gov/su__docs for access to recently published rulemaking 
documents.

Background

    The FAA has broad authority under Title 49 of the United States 
Code (U.S.C.), Subtitle VII, to regulate and control the use of 
navigable airspace of the United States. Under 49 U.S.C. 40103, the 
agency is authorized to develop plans for and to formulate policy with 
respect to the use of navigable airspace and to assign by rule, 
regulation, or order the use of navigable airspace under such terms, 
conditions, and limitations as may be deemed necessary in order to 
ensure the safety of aircraft and the efficient utilization of the 
navigable airspace. Also, under section 40103, the agency is further 
authorized and directed to prescribe air traffic rules and regulations 
governing the efficient utilization of the navigable airspace.
    The High Density Traffic Airports Rule, or ``High Density Rule,'' 
14 CFR part 93, subpart K, was promulgated in 1968 to reduce delays at 
five congested airports: JFK International Airport, LaGuardia Airport, 
O'Hare International Airport, Ronald Reagan National Airport, and 
Newark International Airport (33 FR 17896; December 3, 1968). The 
regulation limits the number of instrument flight rule (IFR) operations 
at each airport, by hour or half hour, during certain hours of the day. 
It provides for the allocation to carriers of operational authority, in 
the form of a ``slot'' for each IFR landing or takeoff during a 
specific 30- or 60- minute period. The restrictions were lifted at 
Newark in the early 1970's.
    On December 16, 1985, the Department of Transportation (Department) 
promulgated the ``buy/sell'' rule, a comprehensive set of regulations 
that provide for the allocation and transfer of air carrier and 
commuter slots (50 FR 52180; December 20, 1985). The two primary 
features of this rule were, first, that initial allocation would be 
accomplished by ``grandfathering'' existing slots to the carriers that 
currently held them, and second, that a relatively unrestricted 
aftermarket in slots would be permitted. As a result, effective April 
1, 1986 slots used for domestic operations could be brought and sold by 
any party.
    The FAA allocates slots designated for international use by U.S. 
and foreign-flag carriers under procedures different from those that 
apply to the allocation of slots designated as domestic. Under 14 CFR 
section 93.217, international slots are allocated at Kennedy and O'Hare 
twice a year for the summer and winter scheduling seasons.
    In promulgating the ``buy/sell'' rule, the Department determined 
that, as a matter of international aviation policy, the allocation of 
new slots to international carriers as Kennedy and O'Hare Airports 
would be made by the FAA based on requests from foreign and U.S. 
operators conducting international operations (50 FR 52187; December 
20, 1985).
    O'Hare is unique in that domestic slots are withdrawn to 
accommodate requests for international operations during each summer 
and winter season. 14 CFR section 93.217(a)(6) specifically

[[Page 2087]]

provides that the FAA must allocate a slot for an international 
operation at O'Hare upon request. If there is not an available slot 
within 60 minutes of requested time, a slot would be withdrawn from a 
domestic carrier to fill that request. At LaGuardia, section 
93.217(a)(7) provides that additional slots will be allocated for 
international operation if required by bilateral agreement. At Kennedy, 
section 93.217(a)(8) provides that domestic slots will be withdrawn for 
international operations only if required by international obligations.
    At the time of the ``buy/sell'' rule, the Department concluded that 
since certain slots used for international operations are specially 
treated within Subpart S, it is important that the Department be aware 
of which slots are being used for those operations. Therefore, U.S. 
carriers were required to submit to the FAA in writing, the slots that 
were used for international operations as of December 16, 1985. These 
slots were then designated by the FAA as international slots.
    International slots may not be bought, sold, leased, or otherwise 
transferred, except such slots may be traded to another slot holder on 
a one-for-one-basis at the same airport. Furthermore, if a carrier does 
not use an international slot for more than a two-week period, the slot 
must be returned to the FAA. International slots may only be used for 
international service.
    However, FAA regulations permit the use of domestic slots for 
either international or domestic service. Regardless of the type of 
service, i.e., domestic or international, the minimum slot usage 
requirement and withdrawal procedures apply to a slot designated as 
domestic. FAA regulations governing slots provide for lotteries of 
domestic slots in certain circumstances. These regulations also permit 
only U.S. carriers to participate in lotteries for domestic slots. 
International slots are not allocated by the lottery mechanism.

U.S.-Canada Bilateral Agreement

    On February 24, 1995, the Government of the United States and the 
Government of Canada entered into a bilateral agreement (Agreement) 
phasing in an ``Open Transborder'' regime between the two countries. 
Annex II of the Agreement specifically addresses slots and access to 
O'Hare, LaGuardia and Ronald Reagan National Airports. After a three 
year phase-in period, the Agreement provides that, effective February 
24, 1998: (1) the Canadian carriers will be able to obtain slots at the 
High Density Traffic Airports under the same prevailing allocation 
system as U.S. carriers; (2) the base levels of slots established for 
Canada will consist of 42 slots at LaGuardia, and 36 slots for the 
Summer season at O'Hare and 32 slots for the Winter season at O'Hare; 
(3) Canadian carriers' slot base at LaGuardia and O'Hare (which 
currently is comprised of international slots), effectively will 
``convert'' to domestic slots; (4) all slots acquired by the Canadian 
carriers, including the determined slot base, as described in (2) 
above, at LaGuardia and O'Hare, will be subject to the minimum slot 
usage requirement set forth in section 93.227 and may be withdrawn for 
failure to meet that requirement; (5) the provision of the bilateral 
agreement do not permit the determined slot base as LaGuardia and 
O'Hare to be withdrawn for the purpose of providing a U.S. or foreign 
air carrier with slots for international operations or to provide slots 
for new entrant operators; (6) any slots acquired after the transition 
date that do not form part of the determined slot base may be withdrawn 
at any time to fulfill operational needs; (7) neither the Government of 
Canada nor any Canadian carrier may modify the determined slot base at 
LaGuardia or O'Hare and then have claim to any time slot to restore the 
base; and (8) slots that are acquired above the determined slot base 
level and then subsequently disposed of shall not modify the base.
    The Agreement also contains several provisions specific to Ronald 
Reagan National Airport, concerning non-stop service between Canada and 
the U.S. These provisions will not be addressed since they are 
unaffected by the contents of this proposal.
    The present regulatory framework governing slots and slot 
allocation procedures does not provide for all the terms of the 
Agreement as set forth above. In order to ensure that FAA slot 
regulations are consistent with the terms of the Agreement, the FAA 
proposes to modify the regulations. This proposal consists of two 
primary actions: the conversion of certain international slots to 
domestic, and the establishment of a regulatory base level of slots for 
the Canadian carriers. In addition, the FAA proposes to amend the 
regulatory submission deadline for international requests to coincide 
with the deadline established for the seasonal International Air 
Transport Association (IATA) Schedule Coordination Conference.

Conversion of International Slot to Domestic Slots

    The Open Transborder bilateral agreement has liberalized U.S.-
Canadian transborder air transportation. Following the three year 
phase-in period, U.S. and Canadian carriers have full freedom of entry. 
The Agreement provides that Canadian carriers will be able to obtain 
slots in the HDR Airports under the ``same prevailing allocation 
system'' as U.S. carriers. This effectively requires that the Canadian 
carriers be treated similarly to domestic carriers. Consequently, 
effective February 24, 1998, Canadian air carriers and their slots are 
subject to the allocation provisions and associated options applicable 
to domestic slots.
    U.S. carriers may obtain domestic slots three ways: (1) through the 
market, by the buying, selling, trading, or leasing of slots; (2) by 
participation in a slot lottery (in accordance with 14 CFR section 
93.225, the FAA may hold a lottery upon determination that there are a 
sufficient number of slots available); and (3) allocation of slots in 
low-demand periods. (14 CFR section 92.226 permits, on a first-come, 
first-served basis, for the allocation of slots available for less than 
5 days per week; for less than a full season; or between 6:00 a.m.-6:59 
a.m. or 10:00 p.m.-midnight.)
    At present, the Canadian carriers hold 36 international slots at 
O'Hare and 42 international slots at LaGuardia. Since the Agreement 
permits the Canadian carriers to buy, sell, lease, or trade these 
slots, the FAA proposes to reclassify the 36 international slots at 
O'Hare and the 42 international slots at LaGuardia as domestic slots. 
As a result of this reclassification, all the regulatory requirements 
of domestic slots, such as the minimum slot usage requirement, would 
attach to the subject slots. We note that the Agreement already 
subjects these slots to the minimum slot usage requirement. This 
reclassification would be consistent with the purpose and intent of the 
Agreement.
    The FAA proposes that U.S. carriers be extended similar treatment. 
The basis for a number of provisions being codified in the ``buy/sell'' 
rule was the standing policy that it is desirable to treat U.S. 
carriers and foreign-flag carriers similarly when conducting identical 
service. In 1985, at the time that the ``buy/sell'' rule was 
promulgated, several commenters argued for the exclusion of any 
international operations from the ``buy/sell'' provisions (50 FR 
52187). The Department, favoring equal treatment of U.S. international 
operators and foreign operators in most respects, concluded that the 
``buy/sell'' provisions should apply only to domestic slots and that 
all international slots will be treated the same, irrespective of 
whether the holder is a U.S. carrier or foreign-flag carrier.

[[Page 2088]]

Thus, in 1985, U.S. carriers were required to identify which slots were 
used for international service as of December 16, 1985.
    The slots identified by U.S. carriers as international in 1985 were 
predominantly used to service the U.S./Canada market. Certain 
provisions applicable to international slots were specifically adopted 
to address concerns by the Canadian carriers about competing with U.S. 
carriers who had much larger slot basis at the HDR airports than the 
Canadian operators. For example, an international slot could be traded 
to another carrier for the purpose of conducting the operation in a 
different hour or half-hour. Deliberate measures were taken in 
promulgating the ``buy/sell'' rule to minimize distinctions between 
U.S. and foreign-flag carriers when engaged in international 
operations. Under a similar analysis, FAA now believes that the 
treatment of U.S. carrier international slots at O'Hare and LaGuardia 
warrants reexamination in light of the Agreement and the consideration 
afforded Canadian carriers under the terms of the Agreement.
    By classifying international slots held by the Canadian carriers as 
domestic slots, the Canadian carriers may realize an unfair advantage 
over U.S. carriers. Canadian carriers may buy, sell, or lease the slots 
they use for U.S./Canada transborder service, while U.S. carriers that 
operate international slots cannot buy, sell, or lease the slots for 
the same transborder service. While the Agreement was clear that 
Canadian carriers would be subject to the prevailing mechanisms for 
slot allocation that apply to U.S. carriers, it was silent as to its 
impact on U.S. carriers. U.S. carriers, subject to the existing 
international allocation procedures, would continue to treat flights to 
or from Canada as international flights for slots allocated under 
section 93.217(1)(a). On the other hand, U.S. carriers may request 
additional international slots under section 93.217(a)(1) for U.S./
Canada service while Canadian carriers could not, since Canadian 
carriers are now subject to allocation procedures for domestic slots. 
Canadian carriers may perceive this as an unfair benefit to their U.S. 
competitors.
    The equitable intent of the Agreement was to treat carriers of both 
countries in the same manner for purposes of slot allocation. 
Therefore, the FAA proposes similar treatment for certain, identified, 
international slots held by U.S. carriers at O'Hare and LaGuardia 
Airports. Specifically, the FAA proposes to reclassify as domestic a 
total of 35 international slots at O'Hare and 17 international slots at 
LaGuardia that are held by U.S. carriers. As stated above, the 
principal reason for designating these slots as international slots in 
December 1985 was to provide U.S. carriers the same opportunities and 
protections as foreign-flag carriers, particularly with respect to 
U.S.-Canada transborder service.
    FAA records for O'Hare indicate that in December 1985, American 
Airlines held 18 international slots, Northwest held two international 
slots, and United held 15 international slots. Of these 35 slots, 32 
were used for U.S./Canada service. Agency records for LaGuardia also 
indicate that in 1985 American Airlines held 15 international slots and 
Delta held two slots. The FAA finds significant that the four U.S. 
carriers directly affected by the proposed redesignation of slots from 
international to domestic status have continuously used these slots 
since the adoption of the Department's slot allocation rules in 
December 1985, and in some cases, conducted this same international 
service prior to the adoption of the High Density Rule in 1969.
    This proposed amendment would redesignate slots identified and held 
by U.S. carriers as international under 14 CFR section 93.215(d), 
provided that an equivalent number of slots were held by the carriers 
as of February 24, 1998, the date of phase-in under the Agreement. This 
proposal would not affect any other international slots subsequently 
allocated under section 93.217 after December 1985, i.e., that were not 
part of a carrier's historic base at the time that the ``buy/sell'' 
rule was adopted. This proposed ``conversion'' to domestic status would 
provide affected slot holders with increased scheduling flexibility; as 
domestic slots, they can be used for U.S./Canada transborder service, 
any other domestic service, or for international service.
    Since the FAA proposes to reclassify certain international slots 
held by U.S. carriers as domestic, the FAA accordingly finds it 
necessary to propose an adjustment of the international slot allocation 
of air carriers holding or operating 100 or more slots at O'Hare. 
Specifically, 14 CFR Section 93.217(a)(10) provides that the 
international allocation for air carriers holding and operating 100 or 
more permanent slots will not exceed the number of international slots 
allocated to that carrier as of February 23, 1990, unless the 
allocation could be made without increasing withdrawals. The purpose of 
this amendment was to limit the ability of the largest U.S. air 
carriers to force the withdrawal of domestic slots from other U.S. 
carriers in order to expand international operations. The largest 
carriers may still increase their international operations at O'Hare 
above their international allocation of February 23, 1990; however, 
they must do so by using slots from within their own domestic slot base 
or from slots otherwise available without withdrawal of a slot. The 
reclassification of certain international slots to domestic must take 
into account large carriers that are subject to the above cap on 
international allocation. Today the only carriers limited by section 
93.217(a)(10) are American and United and their affiliated commuter 
operations under common ownership. Consequently, in reclassifying the 
18 international slots held by American and 15 international slots held 
by United in December 1985, it would be necessary to adjust the 
February 23, 1990, international allocation for, American and United by 
the corresponding number. Therefore, the FAA proposes to reduce the 
February 23, 1990, international base allocation for American and 
United respectively by 18 and 15 slots.

Establishment of Regulatory Base of Slots for the Canadian Carriers

    The terms of the Agreement also provide for an established based 
level of slots for the Canadian carriers at LaGuardia and O'Hare. At 
LaGuardia, the base level of slots for the Canadian carriers is 42. At 
the time the Agreement was signed, the Canadian carriers held 28 slots. 
In June 1995, the FAA was directed by the Department to allocate 14 new 
slots to the Canadian carriers. The FAA proposes to increase the quota 
under 14 CFR Section 93.123 for air carrier operations at LaGuardia to 
include the 14 new slots, as authorized by the Agreement and in 
operation since June 1995.
    At O'Hare, the Agreement provides Canadian carriers with a base 
level of 36 slots for the Summer season and 32 slots for the Winter 
season. At the time of the Agreement, the Canadian slot base was 
comprised of 12 slots held by the Canadian carriers since 1985, and 14 
slots held by the Canadian carriers in time periods for which domestic 
slots usually have been withdrawn. These 14 slots are allocated 
seasonally under section 93.217 and do not constitute permanent slots. 
In June 1995, ten slots were allocated to the Canadian carriers. Thus, 
the above sets forth the present Canadian air carrier slot base, as 
articulated in the Agreement. The Canadian carriers are now permitted 
to buy, sell, lease or otherwise trade their

[[Page 2089]]

slots. The 14 slots held by Canadian carriers allocated under section 
93.217(a)(6), which have resulted from withdrawals of domestic slots, 
cannot be bought, sold, leased, or otherwise traded. The FAA does not 
have a regulatory process to withdraw slots from domestic carriers and 
to permanently allocate the slots to the Canadian carriers. The FAA 
believes that creating 14 new slots at O'Hare would achieve two desired 
results. First, it would address the requirements of the Agreement. 
Second, it would not result in the permanent withdrawal of domestic 
slots to the benefit of foreign-flag carriers. At the time that the 
Agreement was negotiated, a permanent withdrawal of domestic slots was 
not contemplated. Therefore, the FAA proposes to increase the quota 
under 14 CFR Section 93.123 for air carrier slots at O'Hare to allow 
the Canadian carriers to continue to operate as envisioned by the 
negotiated Agreement without withdrawing domestic slots from U.S. 
carriers. The 14 new slots, plus the 10 slots allocated in June 1995 in 
addition to the 12 slots previously held by Canadian carriers, would 
constitute the agreed upon slot base at O'Hare.
    A section by section analysis describing the proposed amendments is 
as follows:

Section 93.123  High Density Traffic Airports

    The FAA proposes to amend section 93.123 by adding a footnote that 
specifically allocates to the Canadian carriers 14 slots at LaGuardia 
and 24 slots at O'Hare, in accordance with the Agreement between the 
U.S. and Canada of February 24, 1995. The FAA proposes this amendment 
in the manner of a footnote rather than as an amendment to the hourly 
totals at LaGuardia and O'Hare for two reasons. First, these slots did 
not exist for allocation prior to the negotiations for the bilateral 
agreement between the U.S. and Canada, i.e., these slots did not 
represent any unused capacity at either airport. Second, the special 
allocation of these slots was a component of the complete negotiated 
Agreement and constitutes the established base for Canadian carriers. 
Therefore, not only were these slots not available for any of FAA's 
specified allocation procedures as set forth in sections 93.217, 93.219 
or 93.225 of Subpart S, but the FAA did not have discretion to allocate 
these slots to any other requesting carrier.

Section 93.217  Allocation of Slots for International Operations and 
Applicable Limitations

    The FAA proposes amending section 93.217(a) to exclude from this 
section, the allocation of international slots at HDR airports for 
transborder service operations solely between that airport and Canada. 
This proposal would not affect the allocation of international slots to 
foreign-flag carriers for continuation flights originating/terminating 
outside the U.S.
    Additionally, section 93.217(a) (5), (6) and (8) require that 
requests for international slot allocations must be submitted to the 
FAA Slot Administration office by May 15 of each year for operations to 
commence during the following Winter season and by October 15 for 
operations to commence during the following Summer season. With the 
exception of the U.S. slot controlled airports, all other capacity 
scheduled international airports generally follow the IATA guidelines 
in allocating international slots. The IATA guidelines for submission 
of each carrier's seasonal request for slots are published by IATA and 
generally fall within seven days of the FAA deadline articulated in 
section 93.217 above. For carriers requesting international slots, the 
use of two separate deadlines, one for U.S. airports and another for 
all other airports, causes confusion and has resulted in carriers 
unintentionally submitting late requests for O'Hare and Kennedy. 
Therefore, the FAA proposes to amend the deadline for seasonal requests 
to coincide with the date of submission for IATA. While the IATA 
deadlines remain in October for the Summer season and May for the 
Winter season, the particular date changes every year. The FAA proposes 
to announce the submission deadline for international requests at 
Kennedy and O'Hare in the Federal Register no later than 90 days in 
advance of the scheduled IATA deadline. The FAA believes that 
coordinating submission deadlines would reduce the administrative 
burden for affected U.S. carriers and foreign-flag carriers, as well as 
for the FAA.
    Lastly, paragraph (a)(10) of this section would amend the 
international allocation of the largest carriers at O'Hare by reducing 
their international slot base to reflect the proposed reclassification 
of certain international slots to domestic slots.

Section 93.218  Reclassification of Certain International Slots to 
Domestic Slots and Special Provisions for Slots Held by Canadian 
Carriers.

    The FAA proposes a new section 93.218 that provides for the 
reclassification as domestic slots the number of slots identified by 
U.S carriers for international operations in December 1985. This number 
is not to exceed the number of equivalent slots held as of February 24, 
1998. In addition, this section would change the reclassification of 
the slots comprising the Canadian slots base from international status 
to domestic status. The properties and characteristics associated with 
domestic slots, such as the minumum slot usage requirement, would 
attach to all the slots in the slot base upon the reclassification as 
domestic.
    This section also proposes to codify the established base of slots 
to Canadian carriers as set forth in the Agreement. The established 
base of slots would consist of 42 slots at LaGuardia, 36 slots at 
O'Hare for the Summer season, and 32 slots at O'Hare for the Winter 
season.
    In addition, in accordance with the Agreement, the FAA proposes 
that any disposal of slots comprising the defined established base, 
that would result in a decrease of that base would be considered a 
permanent modification to the slot base.

Section 93.223  Slot Withdrawal

    The FAA proposes to amend this section by adding a new paragraph 
that would prevent, as specified by the terms of the Agreement, slots 
that comprise the established Canadian slot base, as defined in the new 
section 93.218, from being withdrawn to fulfill requests for 
international operations or for new entrants.

Section 93.225  Lottery of Available Slots

    Lastly, the FAA proposes to amend this section to include 
participation by Canadian carriers in the allocation of slots by 
lottery. Historically, the participation in slot lotteries was reserved 
for domestic carriers. However, since Canadian carriers are now subject 
to the same prevailing allocation methods that apply to U.S. carriers, 
an extension of this provision would be necessary to provide the same 
allocation procedures for carriers of both countries.

Related Petitions

    On May 27, 1998, the FAA granted a limited exemption to Northwest 
Airlines, Inc., permitting the air carrier to use two international 
slots at O'Hare

[[Page 2090]]

for domestic service. The FAA found that the public interest supported 
this limited exemption and recognized Northwest Airlines' considerable 
long-term use of the two slots and the fact that its ``use'' of the 
slots, at a minimum, has been equivalent to the usage required for 
domestic service.
    Additionally, by petition dated April 29, 1998, American Airlines 
petitioned to redesignate 15 international slots at LaGuardia as 
domestic slots.

The Proposal

    In order to ensure that FAA regulations governing slots and slot 
allocation procedures are consistent with the terms of the Agreement, 
the FAA proposes to amend the following provisions of Subparts K and S:
    The FAA proposes to: (1) codify, in a footnote to the hourly slot 
totals in subpart K, the 14 slots at LaGuardia and 24 slots at O'Hare 
that were allocated to the Canadian carriers in June 1995; (2) exclude 
from the allocation of international slots at HDR airports transborder 
service operations solely between that airport and Canada; (3) set 
forth the provisions that apply to slots used for transborder service 
between the U.S. and Canada and codify the established base level of 
slots allocated to Canadian carriers; (4) reclassify certain 
international slots as domestic slots; (5) reduce the international 
allocation for air carriers that hold and operate more than 100 
permanent slots at O'Hare by the number of international slots 
reclassified as domestic slots; (6) permit Canadian carriers to 
participate in any lotteries of domestic slots; and (7) amend the 
regulatory deadline for submitting requests for international 
allocation to coincide with the published IATA deadline.
    The Summer 1999 scheduling season begins on April 4, 1999. The FAA 
understands from industry practices that air carriers need 
approximately 60 days advance notice to set schedules for aircraft 
crews and to publish scheduled airline information. In order for all 
air carriers that may be affected by the changes proposed in this NPRM 
to be able to determine their slot base with respect to international 
and domestic slots prior to this season, the FAA finds that a 30-day 
comment period is justified. A 30-day comment period for this NPRM will 
provide commenters with adequate time to file comments and will enable 
the FAA to promulgate the final rule so that it can be in effect for 
slot allocation for the 1999 Summer scheduling season.

Environmental Review

    The FAA has concluded that this proposed rule does not trigger the 
requirements of the National Environmental Policy Act (NEPA), 42 U.S.C. 
4321 et seq., or other environmental laws. As explained below, the 
action is a non-discretionary one mandated by the bilateral agreement 
entered into by the United States and Canada on February 24, 1995.
    In accordance with the bilateral agreement, part one of this 
proposed regulation reclassifies slots held by Canadian carrier at 
LaGuardia and O'Hare airports. The Canadian carriers' slots would be 
converted from international to a modified form of domestic slots. 
Under the arrangement mandated by the Agreement and codified in this 
proposed regulation, the slots held by the Canadian carriers would 
resemble domestic slots in that (1) they can be bought, sold, or traded 
on the open market, and (2) they are subject to the bi-monthly ``use-
or-lose'' requirement. Unlike other domestic slots, however, the slots 
held by the Canadian carriers would not be subject to seasonal 
withdrawal for international use pursuant to 14 CFR section 93.217 or 
for new entrants. To provent disparate treatment between U.S. carriers 
and Canadian carriers, the proposed regulations would also reclassify 
certain, identified international slots held by U.S. carriers as 
domestic slots.
    Part two of this proposed regulation would establish base levels of 
permanent slots for the Canadian carriers at LaGuardia and O'Hare. The 
bilateral agreement directs that the Canadian carriers receive 42 
permanent slots at LaGuardia. Currently, the Canadian carriers are 
using 42 slots at LaGuardia so no additional allocation of slots is 
necessary. This Agreement also directs that the Canadian carriers 
receive 36 Summer slots and 32 Winter slots at O'Hare. Currently, the 
Canadian carriers hold 22 permanent slots at O'Hare. The Canadian 
carriers also are allocated 14 seasonal slots for the summer and 10 
seasonal slots for the winter under 14 CFR section 93.217 in time 
periods for which domestic slots are withdrawn. To complete the base 
level of slots at O'Hare, the proposed regulation provides that an 
additional 14 slots in the summer and 10 slots in the winter be 
allocated permanently to the Canadian carriers. Because the Canadian 
carriers are receiving these allocations as permanent, the proposed 
regulation also provides that they would no longer be eligible to 
receive international slots under 14 CFR section 93.217.
    No NEPA or other environmental analysis is required because the 
proposed action is ministerial in nature. The FAA has no choice about 
how to accomplish the international mandate, which reclassifies 
international slots held by Canadian carriers as domestic slots and to 
provide additional slots at O'Hare. While the FAA retains complete 
authority to withdraw slots for operational needs in accordance with 14 
CFR section 93.223, the existing allocation mechanisms do not provide a 
means for the FAA to allocate the slots to the Canadian carriers. 14 
CFR section 93.225 provides that if slots are available, the slots will 
be distributed by random lottery with new entrant and limited incumbent 
carriers receiving priority. In addition, fulfilling the Agreement 
obligation by allocating slots under 14 CFR section 93.217 is not 
feasible since these slots are allocated seasonally. Furthermore, even 
if allocating slots under 14 CFR section 93.217 were feasible, slot 
withdrawals by the FAA are legislatively capped at the level of slots 
withdrawn as of October 31, 1993. 49 U.S.C. 41714(b)(2). Thus, lacking 
a mechanism for withdrawing the slots from the existing slot holders 
and re-directing them to the Canadian carriers, the FAA has no choice 
but to comply with the bilateral agreement by creating 14 additional 
slots at O'Hare. NEPA requires agencies to take environmental concerns 
into consideration when making decisions where a range of alternatives 
is available. However, under these circumstances, where no choice is 
involved, an action is ministerial and no NEPA analysis is required.
    The FAA's position that this action is ministerial finds support in 
the NEPA-implementing regulations promulgated by the Department of 
State, 22 CFR part 161. Among the actions which the State Department 
exempts from NEPA analysis are:

    Mandatory actions required under any treaty or international 
agreement to which the United States Government is a party, or 
required by the decisions of international organizations or 
authorities in which the United States is a member or participant, 
except when the United States has substantial discretion over 
implementation of such requirements.

    By comparison, the allocation of slots to the Canadian carriers is 
an example of an action that would likely be exempt under the State 
Department regulations. The FAA is required by the Agreement to allot 
permanent slots to the Canadian carriers, and the agency has no 
discretion but to create additional slots.

[[Page 2091]]

Given the international agreement, the FAA adopts the position espoused 
by the State Department regulations and concludes that the allocation 
of slots to Canadian carriers, as required by the bilateral agreement, 
does not trigger NEPA compliance.

Regulatory Evaluation Summary

    Both the executive and legislative branches of government recognize 
that economic considerations are an important factor in establishing 
regulations. Executive Order 12866, signed by President Clinton on 
September 30, 1993, requires Federal agencies to assess both the costs 
and benefits of proposed regulations. Recognizing that some costs and 
benefits are difficult to quantify, agencies are to propose or adopt 
regulations only upon a reasoned determination that the benefits of 
each regulation justify its costs. In addition, the Regulatory 
Flexibility Act of 1980 requires Federal agencies to determine whether 
or not proposed regulations are expected to have a significant economic 
impact on a substantial number of small entities, and, if so, to 
examine the feasibility of regulatory alternatives to minimize the 
economic burden on small entities. Finally, the Office of Management 
and Budget directs agencies to assess the effects of proposed 
regulations on international trade.
    This section summarizes the FAA's economic and trade analyses, 
findings, and determinations in response to these requirements. The 
complete economic and trade analyses are contained in the docket.
    The FAA allocates international and domestic slots without charge 
to carriers at HDR airports. Allocated slots do not represent a 
property right, but represent an operating privilege subject to 
absolute FAA control. As such, the FAA does not place any economic 
value on the slots it allocates at HDR airports. However, slots do have 
economic value to air carriers, because they provide access to the HDR 
airport, and with access to the airport comes the opportunity to earn 
revenue.
    A market has been created for those domestic slots that air 
carriers control at the HDR airports. Since domestic slots can be 
bought, sold, traded, or leased, these slots have a monetized value. 
International slots also provide an opportunity to earn revenue. 
However, because they cannot be bought, sold, leased, bartered, or used 
as collateral, no market exists for them at HDR airports.
    Although the total number of slots (international plus domestic) 
would not increase for any of the U.S. carriers, the number of domestic 
slots for affected carriers would increase. The proposed rule would 
generate benefits for those air carriers holding historic slots 
identified for international use under 14 CFR 93.215(d) because those 
international slots would be converted to domestic slots. Operators 
benefit because of the enhanced flexibility they receive to manage 
their scheduling at HDR airports. The slots that have been converted 
from international to domestic can be scheduled in Canada-USA 
transborder service, they can be scheduled in other domestic service, 
or they can be scheduled for any international service. Operators also 
receive an expanded economic value because the market has placed a 
value on domestic slots if the operator decides to buy, sell, lease, 
barter, or collateralize slots. Therefore, the FAA believes that the 
proposed rule would benefit operators not only because domestic slots 
present a greater measure of potential earning power than do 
international slots, but also because domestic slots offer operators a 
better opportunity to manage their assets.
    There is no compliance cost associated with the proposed rule. The 
proposed rule would not impose any additional equipment, training, 
administrative, or other cost to the aviation industry. However, the 
FAA solicits comments regarding the extent and plausibility of the 
adverse impacts on operators that feel they would be impacted from 
implementation of the proposed rule. All commenters are asked to 
provide detailed cost information on the nature of their impact and 
over what time period.
    The NPRM would not place any additional requirements on the 
aviation industry. Therefore, there is no compliance costs associated 
with the proposed rule. Qualitative benefits from the proposed rule 
would come from converting certain identified international slots to 
domestic slots, thereby affording operators greater flexibility, 
because the converted slots can be used for transborder service, any 
other domestic service, or for other international service. Domestic 
slots have greater economic value than international slots, because 
domestic slots can be bought, sold, leased, bartered, or used as 
collateral. Due to the advantages domestic slots offer over 
international slots, operators have an enhanced opportunity to manage 
their assets in such a way as to maximize their income. Therefore, the 
FAA has determined that the proposed rule is cost beneficial.

Initial Regulatory Flexibility Assessment

    The Regulatory Flexibility Act of 1980 (RFA), as amended, was 
enacted by Congress to ensure that small entities are not unnecessarily 
and disproportionately burdened by Government regulations. The Act 
requires that whenever an agency publishes a general notice of proposed 
rulemaking, an initial regulatory flexibility analysis identifying the 
economic impact on small entities, and considering alternatives that 
may lessen those impacts must be conducted if the proposed rule would 
have a significant economic impact on a substantial number of small 
entities.
    This proposed rule will impact entities regulated by part 93. The 
FAA has determined that the proposed amendments to part 93, Subparts K 
and S, if promulgated, would affect only two Canadian carriers and four 
major U.S. carriers and, the proposed amendments would not have a 
significant impact on these major air carrier costs. Therefore, the FAA 
certifies that this proposed rule will not have a significant economic 
impact on a substantial number of small entities. However, the FAA 
solicits comments from operators that feel they would be negatively 
impacted from implementation of the proposed rule.

International Trade Impact Statement

    This proposal could positively affect the sale of Canadian aviation 
services in the United States, but it could also positively affect the 
sale of United States aviation services in Canada. However, this 
proposed rule is not expected to impose a competitive advantage or 
disadvantage to either U.S. air carriers doing business in Canada or 
Canadian air carriers doing business in the United States. This 
assessment is based on the fact that this proposed rule would not 
impose additional costs on either U.S. or Canadian air carriers.

Unfunded Mandates Reform Act Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (the Act), 
enacted as Pub. L. 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. 
Section 204(a) of the Act, 2 U.S.C. 1534(a), requires the Federal 
agency to develop an effective process

[[Page 2092]]

to permit timely input by elected officers (or their designees) of 
State, local, and tribal governments on a proposed ``significant 
intergovernmental mandate.'' A ``significant intergovernmental 
mandate'' under the Act is any provision in a Federal agency regulation 
that would impose an enforceable duty upon State, local, and tribal 
governments, in the aggregate of $100 million (adjusted annually for 
inflation) in any one year. Section 203 of the Act 2 U.S.C. 1533, which 
supplements section 204(a), provides that before establishing any 
regulatory requirements that might significantly or uniquely affect 
small governments, the agency shall have developed a plan that, among 
other things, provides for notice to potentially affected small 
governments, if any, and for meaningful and timely opportunity to 
provide input in the development of regulatory proposals.
    This rule does not contain any Federal intergovernmental or private 
sector mandate. Therefore, the requirements of Title II of the Unfunded 
Mandates Reform Act of 1995 do not apply.

Paperwork Reduction Act

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the FAA has submitted an explanation of the proposed burden 
associated with this NPRM to the Office of Management and Budget (OMB) 
for its review. Under the provisions of this NPRM, Canadian carriers or 
commuter operators would need to report to the FAA certain aspects of 
their operations at high density requirement (HDR) airports. 
Specifically, FAA regulation requires notification of (1) requests for 
confirmation of transferred slots; (2) requests to be included in a 
lottery for available slots; (3) usage for slots on a bi-monthly basis; 
and (4) requests for short-term use of off peak hour slots. Prior to 
this NPRM, Canadian carriers and commuter operators were not required 
to submit this information for international slots, nor were they able 
to participate in the allocation procedures that apply to U.S. 
carriers. The total reporting burden associated with this NPRM is 54 
hours. The affected public would be Canadian carriers or commuter 
operators. The requirement would be mandatory. Once this NPRM becomes a 
final rule, the burden associated with it would be added to the current 
information collection package, High Density Traffic Airports; Slot 
Allocation and Transfer Methods, OMB approval number 2120-0524.

Federalism Implications

    The regulations proposed herein will not have substantial direct 
effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 12612, it is determined that this 
proposal would not have sufficient federalism implications to warrant 
the preparation of a Federalism Assessment.

List of Subjects in 14 CFR Part 93

    Air traffic control, Airports, Alaska, Navigation (air), Reporting 
and recordkeeping.

The Proposed Amendment

    For the reasons set forth above, the Federal Aviation 
Administration proposes to amend 14 CFR part 93 as follows:

PART 93--SPECIAL AIR TRAFFIC RULES AND AIRPORT TRAFFIC PATTERNS

    1. The authority citation for part 93 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502, 
44514, 44701, 44719, 46301.

    2. Sec. 93.123 is amended by adding a new footnote 5 in the 
headings in columns 2 and 4 and revising the heading in column 5 of the 
chart in paragraph (a) to read as follows:


Sec. 93.123  High density traffic airports.

    (a) * * *

                                                            IFR Operations Per Hour--Airport
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Class of user                LaGuardia \4\ \5\            Newark            O'Hare \2\ \3\ \5\             Ronald Reagan National \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
    *                  *                  *                  *                  *                  *                  *
\1\ Washington National Airport operations are subject to modifications per Section 93.124.
\2\ The hour period in effect at O'Hare begins at 6:45 a.m. and continues in 30-minute increments until 9:15 p.m.
\3\ Operations at O'Hare International Airport shall not--
(a) Except as provided in paragraph (c) of the note, exceed 62 for air carriers and 13 for commuters and 5 for ``other'' during any 30-minute period
  beginning at 6:45 a.m. and continuing every 30 minutes thereafter.
(b) Except as provided in paragraph (c) of the note, exceed more than 120 for air carriers, 25 for commuters and 10 for ``other'' in any two consecutive
  30-minute periods.
(c) For the hours beginning as 6:45 a.m., 7:45 a.m., 11:45 a.m., 7:45 p.m. and 8:45 p.m., the hourly limitations shall be 105 for air carriers, 40 for
  commuters and 10 for ``other,'' and the 30-minute limitations shall be 55 for air carriers, 20 for commuters and 5 for ``other.'' For the hour
  beginning at 3:45 p.m., the hourly limitations shall be 115 for air carriers, 30 for commuters and 10 for ``others'', and the 30-minute limitations
  shall be 60 for air carriers, 15 for commuters and 5 for ``other.''
\4\ Operations at LaGuardia Airport shall not--
(a) Exceed 26 for air carriers, 7 for commuters and 3 for ``other'' during any 30-minute period.
(b) Exceed 48 for air carriers, 14 for commuters, and 6 for ``other'' in any two consecutive 30-minute period.
\5\ Pursuant to bilateral agreement, 14 slots at LaGuardia and 24 slots at O'Hare are allocated to the Canadian carriers. These slots are excluded from
  the hourly and daily quotas set forth in this section.

    3. Section 93.217 is amended by revising paragraphs (a) 
introductory text, (a)(5), (a)(6), (a)(8) and (a)(10)(i) to read as 
follows:


Sec. 93.217  Allocation of slots for international operations and 
applicable limitations.

    (a) Any air carrier or commuter operator having the authority to 
conduct international operations shall be provided slots for those 
operations, excluding transborder service solely between HDR airports 
and Canada, subject to the following conditions and the other 
provisions of this section:
* * * * *
    (5) Except as provided in paragraph (a)(10) of this section, at 
Kennedy and O'Hare Airports, a slot shall be allocated, upon request, 
for seasonal international operations, including charter operations, if 
the Chief Counsel of the FAA determines that the slot had been 
permanently allocated to and used by the requesting carrier in the same 
hour and for the same time period during the corresponding season of 
the preceding year. Requests for such slots must be submitted to the 
office specified in Sec. 93.221(a)(1), in accordance with the terms 
published in the Federal Register for each season. For operations 
during the 1986 summer season, request under

[[Page 2093]]

this paragraph must have been submitted to the FAA on or before 
February 1, 1986. Each carrier requesting a slot under this paragraph 
must submit its entire international schedule at the relevant airport 
for the particular season, noting which requests are in addition to or 
changes from the previous year.
    (6) Except as provided in paragraph (a)(10) of this section, 
additional slots shall be allocated at O'Hare Airport for international 
scheduled air carrier and commuter operations (beyond those slots 
allocated under Sec. 93.215 and Sec. 93.217(a)(5)) if a request is 
submitted to the office specified in Sec. 93.221(a)(1) and filed in 
accordance with the terms published in the Federal Register for each 
season. These slots will be allocated at the time requested unless a 
slot is available within one hour of the requested time, in which case 
the unallocated slots will be used to satisfy the request.
* * * * *
    (8) To the extent vacant slots are available, additional slots 
during the high density hours shall be allocated at Kennedy Airport for 
new international scheduled air carrier and commuter operations (beyond 
those operations for which slots have been allocated under Secs. 93.215 
and 93.217(a)(5)), if a request is submitted to the office specified in 
Sec. 93.221(a)(1) and in accordance with the terms published in the 
Federal Register for each season. In addition, slots may be withdrawn 
from domestic operations for operations at Kennedy Airport under this 
paragraph if required by international obligations.
* * * * *
    (10) * * *
    (i) Allocation of the slot does not result in a total allocation to 
that carrier under this section that exceeds the number of slots 
allocated to and scheduled by that carrier under this section on 
February 23, 1990, and as reduced by the number of slots reclassified 
under Sec. 93.218, and does not exceed by more than 2 the number of 
slots allocated to and scheduled by that carrier during any half hour 
of that day, or
* * * * *
    3. A new Sec. 93.218 is added to read as follows:


Sec. 93.218  Slots for transborder service to and from Canada.

    (a) Except as otherwise provided in this subpart, effective 
February 24, 1998, international slots identified by U.S. carriers for 
international operations in December 1985 and the equivalent number of 
international slots held as of February 24, 1998, will be domestic 
slots. The Chief Counsel of the FAA shall be the final decisionmaker 
for these determinations.
    (b) Canadian carriers shall have a guaranteed base level of slots 
of 42 slots at LaGuardia, 36 slots at O'Hare for the Summer season, and 
32 slots at O'Hare in the Winter season.
    (c) Any modification to the slot base by the Government of Canada 
or the Canadian carriers that results in a decrease of the guaranteed 
base in paragraph (b) of this section shall permanently modify the base 
number of slots.
    4. Sec. 93.223 is amended by adding a new paragraph (c)(4) to read 
as follows:


Sec. 93.223  Slot withdrawal.

* * * * *
    (c) * * *
    (4) No slot comprising the guaranteed base of slots, as defined in 
Sec. 93.318(b), shall be withdrawn for use for international operations 
or for new entrants.
* * * * *
    5. Sec. 93.225 is amended by revising paragraph (e) to read as 
follows:


Sec. 93.225  Lottery of available slots.

* * * * *
    (e) Participation in a lottery is open to each U.S. air carrier or 
commuter operator operating at the airport and providing scheduled 
passenger service at the airport, as well as where provided for by 
bilateral agreement. Any U.S. carrier that is not operating scheduled 
service at the airport and has not failed to operate slots obtained in 
the previous lottery, or slots traded for those obtained by lottery, 
but wishes to initiate scheduled passenger service at the airport, 
shall be included in the lottery if that operator notifies, in writing, 
the Slot Administration Office, AGC-230, Office of the Chief Counsel, 
Federal Aviation Administration, 800 Independence Avenue, SW., 
Washington, DC 20591. The notification must be received 15 days prior 
to the lottery date and state whether there is any common ownership or 
control of, by, or with any other air carrier or commuter operator as 
defined in Sec. 93.213(c). New entrant and limited incumbent carriers 
will be permitted to complete their selections before participation by 
other incumbent carriers is initiated.
* * * * *
    Issued in Washington, DC, on January 6, 1998.
James W. Whitlow,
Deputy Chief Counsel.
[FR Doc. 99-621 Filed 1-7-99; 12:13 pm]
BILLING CODE 4910-13-M