[Federal Register Volume 67, Number 130 (Monday, July 8, 2002)]
[Notices]
[Pages 45170-45173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17004]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2001-9852]


High Density Airports; Notice of Extension of the Lottery 
Allocation and Request for Comments

AGENCY: Federal Aviation Administration, DOT.

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

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

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

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

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

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested persons are invited to comment on this process by 
submitting such written data, views, or arguments as they may desire. 
Comments that provide the factual basis supporting the views and 
suggestions presented are particularly helpful in developing reasoned 
decisions. Communications should identify the docket number and be 
submitted in duplicate to the above-specified address. All 
communications and a report summarizing any substantive public contact 
with FAA personnel on this notice will be filed in the docket. The 
docket is available for public inspection both before and after the 
closing date for receiving comments.
    Before taking any final action on this proposal, the Administrator 
will consider all comments made on or before the closing date for 
comments and the proposal may be changed in light of the comments 
received.
    The FAA will acknowledge receipt of a comment if the commenter 
includes a self-addressed, stamped postcard with the comment. The 
postcard should be marked ``Comments to Docket No. FAA 2001-9852.'' 
When the FAA receives the comment, the postcard will be dated, time 
stamped, and returned to the commenter.

Background

    The FAA has broad authority under Title 49 of the United States 
Code (U.S.C.), Subtitle VII, to regulate and control the use of the 
navigable airspace of the United States. Under 49 U.S.C. 40103, the 
agency is authorized to develop plans for and to formulate policy with 
respect to the use of navigable airspace and to assign by rule, 
regulation, or order the use of navigable airspace under such terms, 
conditions, and limitations as may be deemed necessary in order to 
ensure the safety of aircraft and the efficient utilization of the 
navigable airspace. Also, under section 40103, the agency is further 
authorized and directed to prescribe air traffic rules and regulations 
governing the efficient utilization of the navigable airspace.
    The High Density Traffic Airports Rule, or ``High Density Rule,'' 
14 CFR part 93, subpart K, was promulgated in 1968 to reduce delays at 
five congested airports: John F. Kennedy International Airport (JFK), 
LaGuardia, O'Hare International Airport (O'Hare), Ronald

[[Page 45171]]

Reagan Washington National Airport (Reagan National) and Newark 
International Airport (Newark) (33 FR 17896; December 3, 1968). The 
regulation limits the number of instrument flight rule (IFR) operations 
at each airport, during certain hours of the day. It provides for the 
allocation to carriers of operational authority, in the form of a 
``slot'' for each IFR takeoff or landing during a specific 30- or 60-
minute period. The restrictions at Newark were lifted in the early 
1970s.

``AIR-21''

    On April 5, 2000, the ``Wendell H. Ford Aviation Investment and 
Reform Act for the 21st Century'' (``AIR-21'') was enacted. Section 231 
of AIR-21 significantly amended 49 U.S.C. 41714 to phase out slots at 
LaGuardia, JFK, and O'Hare. Section 41715 terminates slots at O'Hare as 
of July 1, 2002, and at LaGuardia and JFK on January 1, 2007. Section 
231 also included new provisions codified at 49 U.S.C. 41716, 41717, 
and 41718 that enable air carriers meeting specified criteria to obtain 
exemptions (referred to as ``exemption slots'') from the requirements 
of subparts K and S of part 93 of Title 14 of the Code of Federal 
Regulations at LaGuardia, JFK, O'Hare, and Reagan National. As a result 
of this legislation, the Department of Transportation (Department) 
issued eight orders establishing procedures for the processing of 
various applications for exemption slots authorized by the statute.
    Specifically, Order 2000-4-11 implements 49 U.S.C. 41716(a), which 
provides that an exemption slot must be granted to any airline using 
State 3 aircraft with fewer than 71 seats that proposes to provide 
nonstop service between LaGuardia and an airport that was designated as 
a small hub or nonhub airport in 1997, under certain conditions. The 
exemption must be granted if: (1) The airline was not providing such 
nonstop service between the small hub or nonhub airport and LaGuardia 
during the week of November 1, 1999; (2) the proposed service between 
the small hub or nonhub airports and LaGuardia exceeds the number of 
flights provided between such airports during the week of November 1, 
1999; or (3) if the air transportation pursuant to the exemption would 
be provided with a regional jet as replacement of turboprop service 
that was being provided during the week of November 1, 1999.
    Under AIR-21 and the Department's Orders, air carriers meeting the 
statutory tests delineated above automatically receive blanket approval 
for exemption slots, provided that they certify in accordance with 14 
CFR 302.4(b) that they meet each of the statutory criteria. The 
certification must state the communities and airport to be served, that 
the airport was designated a small hub or nonhub airport as of 1997, 
that the aircraft used to provide the service have fewer than 71 seats, 
that the aircraft are Stage 3 compliant, and the planned effective 
dates. Carriers must also certify that the proposed service represents 
new service, additional frequencies, or regional jet service that has 
been upgraded from turboprop service when compared to service for the 
week of November 1, 1999. In addition, carriers must state the number 
of exemption slots and the times needed to provide the service.,
    Order 2000-4-10 implements the provisions of 49 U.S.C. 41716(b), 
which states that exemption slots must be granted to any new entrant or 
limited incumbent airline using Stage 3 aircraft that proposes ``to 
provide air transportation to or from LaGuardia or John F. Kennedy 
International Airport if the number of exemption slots granted under 
this subsection to such air carrier with respect to such airport when 
added to the slots and exemption slots held by such air carrier with 
respect to such airport does not exceed 20.'' Applications submitted 
under this provision must identify the airports to be served and the 
time requested.
    Section 231 of AIR-21, 49 U.S.C. 41715(b)(1), expressly provides 
that the provisions for exemption slots are not to affect the FAA's 
authority over safety and the movement of air traffic. The reallocation 
of exemption slot times by the lottery procedures described in this 
Notice is based on the FAA's statutory authority and does not rescind 
the exemptions issued by the Department under Orders 2000-4-10 and 
2000-4-11. As provided in those orders, carriers that have filed the 
exemption certifications also need to obtain an allocation of exemption 
slot times from the FAA. The limiting and reallocation of these 
exemption slots is in recognition that it is not possible to add an 
unlimited number of new operations at LaGuardia, especially during peak 
hours, even if those operations would otherwise quality for exemptions 
under AIR-21.
    Lastly, Sec. 93.225 of Title 14 of the Code of Federal Regulations 
sets forth the process for slot lotteries under the High Density Rule. 
The process described in the regulations is similar to the process 
described here and allows for special conditions to be included when 
circumstances warrant special consideration.

Extension of Lottery Allocation

    On June 12, 2001, a Notice of Alternative Policy Options for 
Managing Capacity at LaGuardia and Proposed Extension of the Lottery 
Allocation was published in the Federal Register, in which the FAA 
sought comment on both long-term policy options and a short-term 
extension of the cap on exemption slots at LaGuardia (66 FR 31731). The 
number of AIR-21 exemption slots that may be operated at the airport 
was limited by the FAA to 159 operations effective January 31, 2001, 
and allocated in accordance with the lottery held on December 4, 2000. 
This allocation capped scheduled operations at 75 per hour between the 
hours of 7:00 a.m. and 9:59 p.m., which limited daily and hourly demand 
on airport facilities and the air traffic control system. The FAA has 
found that this number of flights can be accommodated in good weather 
conditions and at the same time, provides access for AIR-21 flights. 
(This number does not include extra sections of scheduled air carrier 
flights or the six reservations per hour for ``Other'' nonscheduled 
operations, including general aviation, charters and military flights. 
Therefore, this allocation maintains total operations of approximately 
81 per hour.)
    On August 2, 2001, the FAA extended the lottery allocation through 
October 26, 2002, set the date of August 15, 2001 for a second lottery, 
and established procedures for subsequent allocation of exemption slots 
in the event that any exemption slots were returned or withdrawn by the 
FAA for non-use (66 FR 41294; August 7, 2001).
    Following the terrorist attacks on September 11, 2001, and the 
resulting impacts on the aviation industry, the FAA suspended the 
closing date for the comment period regarding the Notice of Policy 
Alternatives for Managing Capacity at LaGuardia Airport (66 FR 52170; 
October 12, 2001). On March 22, the FAA announced that the comment 
period on demand management options would close on June 20, 2002 (67 FR 
13401). Developing a long-term solution for demand management at 
LaGuardia remains an agency priority; a solution cannot be finalized 
and implemented, however, prior to the expiration of the current 
lottery restrictions on October 27, 2002. While traffic at LaGuardia is 
currently below pre-September 11 levels, operations have been 
increasing steadily and are expected to increase throughout the summer. 
Today, there are approximately 1,120 operations per day, which is seven 
percent below the level of operations last summer. We

[[Page 45172]]

note that operations during the winter months were approximately 14 
percent below the level of operations in winter 2000-2001.
    Maintaining the cap on total operations at LaGuardia is imperative 
until the long-term solution is finalized and implemented. If the cap 
on AIR-21 exemption slots were lifted, carriers could begin adding an 
unlimited number of qualified operations at the airport, which could 
lead to a situation similar to that in the fall of 2000 where the 
airport, airlines, and public experienced an unacceptable level of 
delay. Significant delays and operational disruptions at LaGuardia have 
a negative effect on the national air traffic control system and result 
in a ripple effect on delays and operations at many other airports. The 
airport cannot accommodate, nor can the FAA permit, unrestrained growth 
in operations at this time.
    The FAA is accordingly adopting a two-year extension of the current 
allocation and hourly limits through October 30, 2004. A two-year 
extension of the exemption slot allocation is appropriate due to the 
complex issues associated with the proposed long-term solutions and the 
competing interests that must be addressed. The comment period for 
potential long-term concepts closed on June 20, 2002. The FAA and the 
Office of the Secretary will review and analyze all submitted comments. 
Identifying a preferred access management process for LaGuardia will 
require much consideration of complex statutory, regulatory, and policy 
issues raised by the suggested demand management options as well as 
variations and additional options received in the comments. 
Consequently, a two-year extension of the current allocation is 
necessary to accomplish the development and implementation of a long-
term solution while continuing a framework that allows airlines to make 
operational plans. Therefore, the current allocation and hourly limits 
are extended through October 30, 2004.

Proposed Changes to Post-Lottery Allocation Procedures

    The FAA is proposing certain changes to the procedures used for 
reallocation of exemption slots that are returned or withdrawn for non-
use. In the Federal Register notice published on August 7, 2001, the 
FAA adopted certain procedures for returned or withdrawn exemption 
slots, which included a continued preference for carriers that 
currently do not conduct any operations at LaGuardia. Therefore, any 
returned or withdrawn exemption slots would be offered first (on a 
first-come, first-serve basis) to any carrier that does not operate at 
the airport, has certified accordingly with the Department, and has a 
written request on file with the Slot Office. Also, under these 
procedures, if a carrier that does not operate at the airport does not 
select the available exemption slots, the exemption slots will be made 
available to all carriers for selection in accordance with the 
appropriate established rank order, i.e., the December 4 rank order for 
carriers providing small community service and the August 15 rank order 
for all carriers that hold or operate fewer than 20 slots and exemption 
slots. The exemption slots are to be selected by alternating between 
the two rank orders. The FAA believes that alternating selections 
between the two established rank orders would provide equitable 
treatment and opportunity to both categories of operations to obtain 
any available capacity throughout this allocation period.
    After the initial December 5, 2000, lottery, the number of 
available exemption slots was split almost evenly between the two 
categories of carriers (new entrants carriers with 79 exemption slots 
and small hub/non-hub service carriers with 80 exemption slots). This 
split achieved the balance originally sought by the agency in devising 
procedures that would result in an allocation that was as fair as 
possible among the competing entities and consistent with the purposes 
of AIR-21. As a result of the August 15 lottery, the new entrant 
carriers hold a total of 75 exemption slots and the carriers providing 
small hub/non hub service hold 84 exemption slots. Both the FAA and the 
Office of the Secretary recognize that during the next two years, new 
entrant carriers' ability to increase service is significantly 
disadvantaged in comparison to the flexibility of the large, incumbent 
carriers that have major slot holdings at LaGuardia. While the large 
carriers did in fact have to reduce service to some markets after the 
December 2000 lottery, these carriers still hold approximately 92 
percent of the slots at LaGuardia and have the ability to use existing 
slot holdings for service to small hub/non-hub communities without 
additional exemption slots. New entrant carriers do not enjoy this 
flexibility as the majority of access to LaGuardia for new entrants is 
due to exemption slots.
    Recognizing the importance of both categories of service at 
LaGuardia, we find it necessary to provide the opportunity to maintain 
parity between the categories of operations to the extent practicable. 
Therefore, as stated in the August 7 notice, the first four exemption 
slots (returned or withdrawn) that are available for reallocation will 
be made available to any carrier that is not conducting operations at 
the airport and that meets the specified criteria. If there is no 
eligible carrier, we propose that the exemption slots would be made 
available to any carrier operating at the airport that holds or 
operates less than 20 slots and exemption slots in accordance with the 
August 25 rank order. This process would be termed Phase I. After Phase 
I is completed, the new entrant category would be comprised of 79 
exemption slots and the small hub/non-hub category would be comprised 
of 80 exemption slots. The division of exemption slots between the two 
categories would place both categories on comparable footing.
    The FAA and the Office of the Secretary continue to believe that 
the goals of AIR-21 should be the guiding principles in allocating the 
limited exemption slots during this interim period. AIR-21 did not 
purport a preference of any one category of operations over another. As 
stated above, however, new entrant carriers do experience limitation on 
access at LaGuardia that are not experienced by the large incumbent 
carriers. Consequently, as Phase II, we propose that when subsequent 
exemption slots become available and there is an eligible carrier not 
conducting service at the airport seeking exemption slots, then the 
available exemption slots would be offered to that carrier first, 
provided that the total number of exemption slots allocated to carriers 
providing small hub/non-hub service is not below 76. This would allow 
specific opportunity for access to a carrier that currently is not 
operating at LaGuardia without tipping the balance too far to one 
category.
    If no new carrier is interested or eligible, we propose that 
available exemption slots would be offered first to the category of 
carriers that is below parity up to the level of reestablishing parity, 
using the respective rank order. Remaining exemption slots would then 
be offered to carriers in the category from which the exemption slots 
came from using the respective rank order. Lastly, if there are 
exemption slots available, they would be offered to the carriers in the 
other category using its respective rank order.
    Adopting this process would achieve several desirable goals. First, 
it would allow for access to the airport by new carriers, but by 
incorporating a threshold of four exemption slots, it does not allow 
new carriers to gain unconstrained access to the detriment of

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carriers providing small hub/non-hub service. Second, it would ensure 
that there would be a continued finite number of exemption slots 
available for new entrant service and small hub/non-hub service and 
represent an opportunity for equitable allocation of exemptions slots 
between competing categories. Lastly, it puts in place a process to 
provide opportunity to maintain parity.
    Finally, the FAA proposes that a carrier will have three business 
days from the date of the FAA offer of an available exemption slot to 
accept or reject offered exemption slots. This procedure would provide 
a definitive timeframe for decisionmaking and assist in ensuring that 
exemption slots do not go unused for an extended period of time. From 
the date of acceptance of an offered exemption slot, a carrier has 120 
days to begin using that exemption slot. (See adopted lottery 
procedures for the August 15, 2001 lottery.)
    The reallocation procedures adopted in the August 7, 2001, notice 
will be followed for the reallocation of returned or withdrawn 
exemption slots pending a decision on these proposed procedures after 
the close of the comment period. The proposed, applicable conditions 
are restated as follows:
    1. The cap on AIR-21 exemption slots (7:00 a.m. through 9:59 p.m.) 
will remain in effect through October 30, 2004.
    2. The FAA may approve the transfer of exemption slot times between 
carriers only on a temporary one-for-one basis for the purpose of 
conducting the operation in a different time period. Carriers must 
certify to the FAA that no other consideration is involved in the 
transfer.
    3. Phase I: If any exemption slots are returned to the FAA or are 
withdrawn for non-use, the FAA would make the first four exemption 
slots available on a first-come, first serve basis to a carrier that 
was not operating at LaGuardia as of August 15, 2001, certified to the 
Department in accordance with the procedures articulated in OST Order 
2000-4-10, and has a written request on file with the Slot Office. Any 
of the first four returned or withdrawn exemption slots that are not 
selected by such a carrier would be available to the carriers that have 
less than 20 slots and exemption slots at LaGuardia for selection in 
accordance with the August 15 established rank order, with each carrier 
able to select two exemption slots. Any exemption slots not selected 
during this process then would be made available to the carriers 
providing small hub/non-hub service using the December 4 rank order. 
This concludes Phase I.
    4. Phase II: If any subsequent exemption slots become available for 
reallocation and there is an eligible carrier not conducting service at 
the airport seeking exemption slots, then the available exemption slots 
would be offered to that carrier first, provided that the total number 
of exemption slots allocated to carriers providing small hub/non-hub 
service is not below 76. If a new, eligible carrier does not select the 
exemption slots, then they would be offered to the category of carriers 
that is below parity, up to the level of re-establishing parity (using 
respective rank order). If the exemption slots are not selected or 
there are available exemption slots remaining, then they would be 
offered to carriers in the same category from which the exemption slots 
came. Any remaining exemption slots not selected would be offered to 
the other category of carriers, using its respective rank order.
    5. A carrier would have three business days after an offer from the 
Slot Office to accept the offered exemption slot time. Acceptance must 
be in writing to the Slot Office. If the Slot Office does not receive 
an acceptance to an offer within three business days, the carrier would 
be recorded as rejecting the offer and the next carrier on the list 
would be offered the available exemption slot times.
    6. Carriers that are offered exemption slot times by the Slot 
Office must re-certify to the Department of Transportation in 
accordance with the procedures articulated in OST Orders 2000-4-10 and 
2000-4-11 prior to operations, and provide the Department and the FAA 
with the markets to be served, the number of exemption slots, the 
frequency, and the time of operation, before the exemption slot times 
will be allocated by the FAA to the carrier.
    7. All operations allocated under the post-lottery procedures must 
commence within 120 days of a carrier's acceptance of an available 
exemption slot.
    8. The Chief Counsel will be the final decisionmaker concerning 
eligibility of carriers to participate in the allocation process.

    Issued on July 1, 2002, in Washington, DC.
David G. Leitch,
Chief Counsel.
[FR Doc. 02-17004 Filed 7-5-02; 8:45 am]
BILLING CODE 4910-13-M