[Federal Register Volume 73, Number 99 (Wednesday, May 21, 2008)]
[Proposed Rules]
[Pages 29626-29651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-1271]



[[Page 29625]]

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Part III





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 93



Congestion Management Rule for John F. Kennedy International Airport 
and Newark Liberty International Airport; Proposed Rule

  Federal Register / Vol. 73, No. 99 / Wednesday, May 21, 2008 / 
Proposed Rules  

[[Page 29626]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 93

[Docket No. FAA-2008-0517; Notice No. 08-05]
RIN 2120-AJ28


Congestion Management Rule for John F. Kennedy International 
Airport and Newark Liberty International Airport

AGENCY: Federal Aviation Administration (FAA).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to establish procedures to address congestion 
in the New York City area by assigning slots at John F. Kennedy (JFK) 
and Newark Liberty (Newark) International Airports in a way that allows 
carriers to respond to market forces to drive efficient airline 
behavior. This proposal is a companion to a separate rulemaking 
initiative addressing congestion mitigation at New York's LaGuardia 
airport. Today's proposal is similar to what we have proposed for 
LaGuardia airport, but it takes into consideration the characteristics 
of both JFK and Newark, including the large number of international 
flights at these airports and our international obligations. The FAA 
proposes to extend the caps on the operations at the two airports, 
assign to existing operators the majority of slots at the airports, and 
create a market by annually auctioning off a limited number of slots in 
each of the first five years of this rule. The FAA is proposing two 
alternatives.
    Under the first alternative, the assignment of slots at JFK and 
Newark would be conducted through a uniform mechanism. The FAA would 
auction off a portion of the slots and would use the proceeds to 
mitigate congestion and delay in the New York City area. Under the 
second alternative, the same auction procedure would apply at Newark as 
under the first alternative but at JFK the auction proceeds would go to 
the carrier holding the slot rather than to the FAA. For both 
alternatives, this proposal also contains provisions for minimum usage, 
capping unscheduled operations, and withdrawal for operational need. 
The FAA proposes to sunset the rule in ten years.

DATES: Send your comments on or before July 21, 2008.

ADDRESSES: You may send comments identified by Docket Number FAA-2008-
0517 using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your 
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation, 1200 New Jersey Avenue, SE., Room W12-
140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Bring comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at 202-493-2251.

For more information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to 
http://www.regulations.gov, including any personal information you 
provide. Using the search function of our docket Web site, anyone can 
find and read the electronic form of all comments received into any of 
our dockets, including the name of the individual sending the comment 
(or signing the comment for an association, business, labor union, 
etc.). You may review the Department of Transportation's complete 
Privacy Act Statement in the Federal Register published on April 11, 
2000 (65 FR 19477-78) or you may visit http://DocketsInfo.dot.gov.
    Docket: To read background documents or comments received, go to 
http://www.regulations.gov at any time and follow the online 
instructions for accessing the docket. Or, go to Docket Operations in 
Room W12-140 of the West Building Ground Floor at 1200 New Jersey 
Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions regarding this 
rulemaking, contact: Molly W. Smith, Federal Aviation Administration, 
800 Independence Avenue, SW., Washington, DC 20591; telephone (202) 
267-3275; e-mail [email protected]. For legal questions concerning 
this rulemaking, contact: Rebecca MacPherson, FAA Office of the Chief 
Counsel, 800 Independence Ave., SW., Washington, DC 20591; telephone 
(202) 267-3073; e-mail [email protected].

SUPPLEMENTARY INFORMATION: Later in this preamble, under the Additional 
Information section, we discuss how you can comment on this proposal 
and how we will handle your comments. Included in this discussion is 
related information about the docket and the handling of proprietary or 
confidential business information. We also discuss how you can get a 
copy of this proposal and related rulemaking documents.

Authority for This Rulemaking

    The FAA has broad authority under 49 U.S.C. 40103 to regulate the 
use of the navigable airspace of the United States. This section 
authorizes the FAA to develop plans and policy for the use of navigable 
airspace and to assign the use that the FAA deems necessary for its 
safe and efficient utilization. It further directs the FAA to prescribe 
air traffic rules and regulations governing the efficient utilization 
of the navigable airspace.

I. Background

A. History of Congestion Management Initiatives at JFK

    JFK has historically been a constrained airport. From 1969 through 
2006, the FAA managed congestion there during the five hours of peak 
transatlantic demand--3 p.m. through 7:59 p.m., Eastern Time under the 
High Density Rule (HDR). 14 CFR part 93 subparts K and S.
    In 1994, Congress began to relax the HDR by authorizing the 
Secretary of Transportation, upon making a public interest finding, to 
grant exemptions from the HDR to enable new entrant carriers \1\ to 
provide air transportation at certain slot-controlled airports, 
including JFK. 49 U.S.C. 41714. In 1999, pursuant to this authority, 
the Department issued an order that authorized new flight operations at 
JFK by granting 75 slot exemptions to JetBlue Airways (JetBlue), a new 
entrant carrier, to be phased in over a five-year period.\2\ The order 
stated that JetBlue would operate the majority of its flights outside 
the five HDR slot-controlled hours.
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    \1\ The term ``new entrant carrier'' was defined as ``an air 
carrier that does not hold a slot at the airport concerned and has 
never sold or given up a slot at that airport after December 16, 
1985, and a limited incumbent carrier.'' 49 U.S.C. 41714(h)(3).
    \2\ Application of New Air Corporation for Exemption from 14 CFR 
part 93, Subparts K and S of 49 U.S.C. 41714(c), Order 99-9-11 
(September 16, 1999).
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    In 2000, the Wendell H. Ford Aviation Investment and Reform Act for 
the 21st Century (AIR-21), Public Law No. 106-181, ended the 
application of the HDR at JFK, effective January 1, 2007. 49 U.S.C. 
41715(a)(2).\3\ AIR-21 also

[[Page 29627]]

directed the Secretary to grant exemptions from the HDR's flight 
restrictions for operations by new entrant carriers or for flights 
serving Small-Hub and Non-Hub airports as long as the aircraft used had 
less than 71 seats. Additionally, it preserved the FAA's authority to 
impose flight restrictions by stating that ``[n]othing in this section 
* * * shall be construed * * * as affecting the Federal Aviation 
Administration's authority for safety and the movement of air 
traffic.'' 49 U.S.C. 41715(b).
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    \3\ The phase-out also included LaGuardia, as of January 1, 
2007. 49 U.S.C. 41715(a)(2). The HDR at Chicago O'Hare International 
Airport was directed to be phased out by July 1, 2002. 49 U.S.C. 
41715(a)(1).
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    Until recently, most operations at JFK took place during relatively 
pronounced arrival and departure banks corresponding to the operating 
windows of transatlantic flights. Maximum efficiency at JFK has been 
achieved with the use of either two arrival runways and one departure 
runway, or two departure runways and one arrival runway. Air traffic 
controllers have employed that configuration to facilitate the historic 
transatlantic traffic flows.
    Since the spring of 2006, U.S. air carriers serving JFK have 
significantly increased their domestic scheduled operations throughout 
the day. Most of the increase has come from the two largest operators 
at the airport, Delta Airlines (Delta) and JetBlue. The new traffic 
patterns affect the efficient use of JFK's four runways, impeding the 
use of the three-runway configurations (two arrival/one departure, or 
one arrival/two departure) for maximum utility of active runways.
    As a result of the increase in scheduled operations at JFK, the 
summer 2007 demand exceeded the airport's capacity during many periods 
of the day. During morning hours, volume-related delays were routine 
from 7 a.m. through 9 a.m. The afternoon and evening demand exceeded 
the airport's optimal capacity until about 10 p.m. This prevented the 
airport from having an evening period to recover from congestion-
induced delays.
    During fiscal year 2007, the average daily operations at JFK 
increased 21 percent over fiscal year 2006. Corresponding to the 
increased operations, on-time performance and other delay metrics have 
declined year over year. The on-time performance at JFK, which is 
defined as the arrival at the gate within 15 minutes of the scheduled 
time, declined from 68.5 percent in fiscal year 2006 to 62.19 percent 
in fiscal year 2007. On-time arrivals during the peak travel months of 
June, July and August declined from 63.37 percent in 2006 to 58.89 
percent in 2007, while on-time departures declined from 67.49 percent 
to 59.89 percent. For the entire fiscal year, the average daily arrival 
delays exceeding one hour increased by 87 percent over fiscal year 2006 
levels. Taxi out delays, which measure the time that aircraft wait 
prior to departing the runway, increased by 15 percent. Taxi out delays 
in the evening departure periods frequently exceeded an hour in 
duration.
    The increased congestion and associated delays at JFK impact other 
airports in the region and the National Airspace System (NAS). The 
airspace redesign for the New York/New Jersey/Philadelphia metropolitan 
area, approved in 2007, documents the costs and far-reaching impacts of 
delays that originate from this area. The delays that cascade from this 
area throughout the NAS are costly and far-reaching, as detailed in the 
recently approved airspace redesign plan for the New York/New Jersey/
Philadelphia metropolitan area.\4\ The FAA has taken steps to implement 
airspace redesign, which will provide efficiency and congestion relief 
by, among other things, opening additional arrival and departure routes 
in the New York area. Further, the FAA, working with stakeholders, is 
implementing short-term initiatives to improve the efficiency of 
airport operations and air traffic control, particularly during severe 
weather. Additionally, the FAA has increased the use of a second 
departure runway at JFK when conditions permit. However, none of these 
initiatives will offer an immediate or complete solution.
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    \4\ See: http://www.faa.gov/airports_airtraffic/air_traffic/nas_redesign/regional_guidance/eastern_reg/nynjphl_redesign/.
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    On September 24, 2007, the FAA re-designated JFK as a Level 2 
Schedules Facilitated Airport \5\ for the summer 2008 scheduling season 
in accordance with the International Air Transport Association 
Worldwide Scheduling Guidelines (IATA WSG). 72 FR 54317. Under the WSG, 
carriers must inform the coordinator of projected operations at a Level 
2 airport for the next scheduling season. When submitting the required 
information, the airlines expressed their intent to add new flights at 
JFK during peak and off-peak hours for summer 2008.
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    \5\ An airport, where demand is approaching capacity and a more 
formal level of cooperation is required to avoid the circumstances 
of over-capacity, is designated an IATA Level 2 Schedules 
Facilitated Airport. At a Level 2-designated airport, a schedules 
facilitator seeks the cooperation and voluntary agreement of 
airlines serving the airport to avoid congestion.
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    Also in September 2007, the Administrator determined that JFK was a 
severely congested airport and that a scheduling reduction meeting, 
under 49 U.S.C. 41722, was necessary to discuss flight reductions with 
U.S. air carriers to reduce over-scheduling and flight delays at JFK 
during peak operating hours. On October 12, 2007, the Secretary of 
Transportation determined that a scheduling reduction meeting was 
necessary to meet a serious transportation need or to achieve an 
important public benefit. On October 22, the FAA opened a docket for 
information on the establishment of flight reduction targets at JFK 
during peak hours. 72 FR 59579. In order to address increases in demand 
by foreign air carriers, the FAA determined that a Level 3 Coordinated 
Airport declaration was warranted on October 25, 2007.\6\ 72 FR 60710.
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    \6\ Where demand for an airport exceeds capacity, voluntary 
cooperation is unlikely to resolve the problem, and short term 
capacity enhancements are not available, the airport is designated 
an IATA Level 3 Coordinated Airport.
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    In order to address increases in demand by domestic carriers, the 
FAA convened the scheduling reduction meeting with U.S. carrier 
participants on October 23-24, 2007. Subsequent in-person and 
telephonic meetings took place as well. At the sessions, American 
Airlines, Delta and JetBlue, which together account for three-quarters 
of the total operations at JFK, withdrew the schedule increases each 
had proposed for summer 2008 during the airport's 3 p.m. to 7:59 p.m. 
peak hours. They also adjusted the timing of operations during those 
hours and others to smooth out peaks. Other airlines also agreed to 
retime peak operations. The FAA offered capacity during other hours to 
carriers who re-timed operations or added additional flights.
    As a result of the agreements reached at that meeting and other 
discussions held with carriers regarding their projected summer 2008 
schedules, the FAA issued a temporary Order limiting scheduled 
operations at JFK, effective 6 a.m., Eastern Time, March 30, 2008, 
through 11:59 p.m., Eastern Time, October 24, 2009, to U.S. and foreign 
air carriers serving the airport and generally capping scheduled 
operations at 81 per hour. 73 FR 3519 (Jan. 18, 2008), as amended 73 FR 
8737 (Feb. 14, 2008). This Order temporarily responds to the carriers' 
desire to regularly schedule flights above the airport's capacity 
during peak operating hours, relieves the substantial inconvenience to 
the traveling public caused by excessive

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congestion-related flight delays at the airport (which rippled through 
the NAS), reduces the average length of delays, and provides for a more 
efficient use of airspace.

B. History of Congestion Management at Newark

    Newark was once subject to the HDR although the FAA suspended the 
application of the rule at Newark due to sufficient airport capacity to 
meet demand. 35 FR 16591 (Oct. 24, 1970). Over the past several years, 
however, Newark has grown to be one of the most delay-prone airports in 
the country. Current and anticipated demand during peak hours 
approaches or exceeds the average runway capacity, resulting in volume-
related delays. These delays are aggravated by weather or other adverse 
operating conditions.
    Comparing FY 2007 to FY 2000, average daily operations at the 
airport decreased about 3 percent (from 1,253 to 1,219) but performance 
nevertheless suffered. The percent of on-time gate arrivals decreased 
from 70.66 percent to 61.71 percent; arrival delays greater than one 
hour increased from 54 to 93 per day on average.
    In 2007, for example, Newark's on-time arrival performance was 61.8 
percent, the second worst among the top 35 airports. Based on ``the 
airport's performance metrics and imbalance between air traffic control 
(ATC) capacity and demand that is expected to continue in the near 
term,'' the FAA designated Newark a Level 2 IATA Schedules Facilitated 
Airport for the summer 2008 scheduling season.\7\ The FAA explained 
that ``increased levels of air traffic operations, congestion and delay 
at [both JFK and Newark] airports and a tangible decrease in 
operational performance'' warranted this designation.\8\ The FAA found 
the morning hours of 7 a.m. to 10 a.m. and the afternoon and evening 
hours of 2 p.m. to 10 p.m. were particularly constrained, but that 
capacity otherwise was available for retiming of flights or new 
operations.
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    \7\ 72 FR 54317 (Sept. 24, 2007).
    \8\ Id.
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    The FAA modeled the proposed summer 2008 schedule requests against 
Newark's average runway capacity, and delay projections for the summer 
of 2008 indicated a potential increase of almost 50 percent. The FAA 
also discussed carriers' future schedule plans at Newark and asked 
carriers to consider scheduling flights at times where there was 
available capacity. It was clear that some carriers intended to proceed 
with their plans to begin operations according to their proposed 
schedules during the busiest hours, regardless of the potential impact 
on delay. Based on the requested schedules for Newark and anticipated 
additional demand for Newark due to the operating limits underway at 
JFK, the FAA determined that the anticipated summer 2008 demand would 
overtax Newark's capacity, warranting a Level 3 Coordinated Airport 
designation. 72 FR 73418 (Dec. 27, 2007). After the designation, a 
series of discussions with the FAA led some carriers, including the hub 
carrier, Continental, to move some of their historic flights from the 
most oversubscribed hours. The movement of these flights tended to 
smooth the scheduling peaks and valleys at Newark.
    The information provided by the carrier for the summer 2008 
scheduling season reflected a projected increase in flight schedules 
during the summer of 2008, especially during the peak hours. U.S. and 
foreign carriers had planned about 100 new operations per day at 
Newark, many during the afternoon and early evening hours for the 
summer of 2008.\9\ That number of new flights, along with proposed 
retiming of historic flights into busier time periods, would have 
caused massive delays, because they would have exceeded the airport's 
optimal rate of handling flights over multiple, consecutive hours. For 
several consecutive hours, the number of hourly arrivals and departures 
would have reached the upper 80s to the mid-90s. These operations would 
have significantly exceeded the airport's average capacity of 83 total 
operations over the 12-month period ending August 2007. These 
additional flights would have caused a spike in congestion and delays 
at Newark and would also have had an adverse effect on other airports 
in the New York region and on the NAS.
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    \9\ Requests for additional flights or retiming of flights into 
peak periods were received after the FAA's announced schedule 
submission deadline of October 11, 2007. These requests were 
accommodated only if there was available capacity remaining after 
consideration of historic operations and on-time requests.
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    Consequently, on March 18, 2008, the FAA proposed to place 
temporary caps on peak hour operations at Newark to mitigate persistent 
congestion and delays at the airport.\10\ 73 FR 14552. The cap would 
limit scheduled operations during constrained hours to an average of 81 
per hour.\11\ The FAA stated that it identified Newark's average 
capacity by considering the airport's capacity to be ``the higher value 
of either the aircraft throughput at the airport in a given hour or the 
number of arrivals and departures that ATC personnel identified as 
achievable in that hour.'' 73 FR 14552, 14554. The measurement 
reflected ``the airport's demonstrated and potential performance over 
time under actual meteorological and operational conditions.'' Id. The 
FAA committed to closely monitoring the gains in efficiency and delay 
reductions from implementing the airspace redesign and other air 
traffic control or airport operational changes to ensure that the 
scheduling limits reflect the available capacity.
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    \10\ 73 FR 14552 (March 18, 2008).
    \11\ The appendix to the order included a few operations for 
summer 2008 above the 81 per hour limit.
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    The FAA has adopted its March 18, 2008, proposal to impose a 
temporary cap on scheduled operations at Newark. The cap takes effect 
30 days after publication and expires 11:59 p.m. Eastern Time, October 
24, 2009. The cap limits peak hour scheduled operations to an average 
of 81 per hour, except as provided in the appendix to the Order, and 
total scheduled and unscheduled operations to an average of 83. As 
indicated in the proposed order, the FAA intends to use the hours with 
scheduled operations below the limit of 81 for delay mitigation and 
would lease new capacity over 81 pursuant to an auction.

C. New York Aviation Rulemaking Committee

    In addition to the regulatory initiatives discussed above, on 
September 25, 2007, the Acting FAA Administrator established an 
Aviation Rulemaking Committee (ARC) to explore various options, 
including market-based mechanisms, for addressing airspace congestion 
in the New York area. The ARC was comprised of officials from the FAA 
and the Office of the Secretary of Transportation (OST), the Port 
Authority of New York and New Jersey (Port Authority), representatives 
of carriers and operators serving JFK, Newark, LaGuardia, and Teterboro 
airports, airport and aviation industry trade associations, and 
consumer groups.
    By design, the ARC provided opportunity for extensive input by all 
stakeholders, having members from major air carriers in the United 
States and their trade organizations (the Air Transport Association, 
the Regional Airline Association, the Air Carrier Association of 
America, the National Air Carrier Association), foreign carriers and 
their worldwide trade organization (IATA), the Port Authority, and the 
Airports Council International-North America. Through the ARC process, 
these stakeholders played a key role in

[[Page 29629]]

exploring ideas to address congestion and ensuring that any actions 
contemplated by the Department and the FAA would be fully informed. The 
ARC worked throughout the fall and submitted a report to the Secretary, 
dated December 13, 2007, discussing its findings. A copy of the ARC 
Report may be found at: http://www.dot.gov/affairs/FinalARCReport.pdf.

II. Discussion of Proposed Rule

    Today's proposal would replace the Orders imposing operating 
limitations at JFK and Newark and establish a rule limiting unscheduled 
operations at those airports. The Orders are scheduled to expire on 
October 24, 2009. If adopted, the proposed rule would apply to all 
operations at JFK and Newark between the hours of 6 a.m. and 10:59 
p.m., every day. For reasons set out in the Newark and JFK Orders, 
discussed above, the FAA has determined that capacity is constrained at 
these airports for this entire period.
    The following table briefly summarizes today's proposal and 
identifies differences between the two options.

                                     Proposed Regulation for JFK and Newark
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                                                                                       JFK
               Feature                          Newark         -------------------------------------------------
                                                                        Option 1                 Option 2
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Base Schedule........................  Seasonal schedule, as    Seasonal schedule, as    Same as Option 1.
                                        approved by the FAA,     approved by the FAA,
                                        for summer 2008 and      for summer 2008 and
                                        winter 2008/2009.        winter 2008/2009.
Slot.................................  Defined as right to      Defined as right to      Same as Option 1.
                                        land or depart (not      land or depart (not
                                        both) in a 30-minute     both) in a 30-minute
                                        time window.             time window.
Number of Slots......................  81/hour + 1 to 2         81/hour + 1 to 2.......  Same as Option 1
                                        unscheduled.
Slots definition.....................  Common Slots: The        Common Slots: the        Common Slots: The
                                        Baseline (up to 20       Baseline (up to 20       Baseline (up to 20
                                        slots per carrier)       slots per carrier)       slots per carrier)
                                        plus 90% of slots        plus 90% of slots        plus 80% of slots
                                        above 20 have 10 year    above 20 have 10 year    above 20 would have 10
                                        leases; Limited Slots:   leases; Limited Slots:   year leases; Limited
                                        10% would have shorter   10% would have shorter   Slots 20% would have
                                        leases and be            leases and be            shorter leases and
                                        auctioned over five      auctioned over five      then be reallocated
                                        years (2% each) (after   years (2% each) (after   via auction over five
                                        which they convert to    which they convert to    years (4%/yr).
                                        Unrestricted Slots).     Unrestricted Slots).
Slot Time of Day.....................  6:00 a.m. through 10:59  6:00 a.m. through 11:59  Same as Option 1.
                                        p.m., everyday; no       p.m., everyday; no
                                        more than 81 in any      more than 81 in any
                                        one hour or 44 in any    one hour or 44 in ay
                                        half-hour.               half-hour.
Mechanics............................  ``Fair'' initial         ``Fair'' initial         Same as Option 1.
                                        distribution with half   distribution with half
                                        of slots with less       of slots with less
                                        than 10 years life       than 10 years life
                                        selected by carriers;    selected by carriers;
                                        the other half           the other half
                                        selected by FAA          selected by FAA
                                        according to specified   according to specified
                                        rules.                   rules.
Auction..............................  Limited Slots would be   Limited Slots would be   Same as Option 1.
                                        auctioned among          auctioned among
                                        carriers.                carriers.
Auction Proceeds.....................  Auction funds to FAA to  Auction funds to FAA to  Auction funds (net of
                                        defray costs of          defray costs of          auction costs) to
                                        auction, then to NY      auction, then to NY      incumbent holder;
                                        capacity/projects.       capacity/projects.       incumbent cannot bid
                                                                                          on own slots.
Use/Lose.............................  Only on grandfathered    Only on grandfathered    As as Option 1.
                                        slots as consideration   slots as consideration
                                        for slots.               for slots.
Term.................................  Program is through       Program is through       As as Option 1.
                                        March 2019; slot lives   March 2019; slot lives
                                        are whatever             are whatever
                                        proportion of 10 years   proportion of 10 years
                                        remain upon              remain upon
                                        reallocation.            reallocation.
Bidders..............................  Airlines...............  Airlines...............  As as Option 1.
Holders..............................  Holders of record (not   Holders of record (not   As as Option 1.
                                        marketing carrier).      marketing carrier).
New or returned capacity.............  IATA WSG...............  IATA WSG...............  As as Option 1.
Secondary market.....................  Transparent not blind:   Transparent not blind:   Same.
                                        carrier notifies FAA     carrier notifies FAA
                                        of intent to sublease;   of intent to sublease;
                                        FAA makes slot           FAA makes slot
                                        availability known;      availability known;
                                        bilateral                bilateral
                                        negotiations; final      negotiations; final
                                        terms disclosed to OST   terms disclosed to OST
                                        for monitoring.          for monitoring.
Logistical swaps of slots............  Permitted..............  Permitted..............  Same.
----------------------------------------------------------------------------------------------------------------

    The rule would apply to carriers at JFK and Newark. A U.S. air 
carrier conducting operations solely under another carrier's market 
control with unified inventory control would not be considered a 
separate carrier, an approach that is consistent with how carriers have 
been treated historically under the various slot regimes. The same 
would not be true for foreign air carriers. This difference in 
treatment reflects the commercial realities of JFK and Newark where 
there are foreign air carriers that share a common owner but hold out 
service to the public as separate commercial entities. Treating foreign 
air carriers with common ownership as separate carriers for purposes of 
slot allocation is an accepted practice in the international arena. The 
recent SNPRM on LaGuardia airport, as well as the LaGuardia Order, 
treats carriers with common ownership as a single carrier.

[[Page 29630]]

    As we have explained, we do not anticipate that airport and 
airspace system improvements scheduled to come on line during the next 
year and a half will be sufficient to meet the demand for flights at 
either JFK or Newark for the foreseeable future. Therefore, if we let 
the Orders expire according to their terms, we believe carriers will 
once again schedule flights well in excess of the respective capacities 
of both JFK and Newark and unscheduled operations would grow during 
peak hours. Historic experience strongly suggests that congestion and 
delays during peak operating hours would result, requiring the FAA to 
step in and address unacceptable operational performance yet again.
    Rather than taking repeated, piecemeal approaches to limit and 
manage operations at JFK and Newark on a short-term basis, we believe 
it is prudent to adopt a longer-term rule dealing with the congestion 
and delays we expect to persist at those airports. The FAA's preference 
in addressing congestion resulting from capacity shortfalls is to 
expand the airport and airway system capacity and to increase the 
efficient use of existing resources. This is by far the most effective 
way to serve the traveling public and to promote a strong airport and 
airway system. Although both the FAA and the Port Authority are working 
to implement these capacity improvements, this rule would complement 
those efforts and mitigate projected airport congestion.
    We propose to treat the three major New York City-area airports 
similarly by capping operations and introducing market mechanisms to 
allocate some slots. While we have provided two different versions of 
the draft regulatory text to present two alternatives for market 
allocation, Newark would be treated the same under both versions. 
Accordingly, all discussion of alternative 2 will be limited to JFK.
    The FAA believes it is necessary to address congestion and delays 
at LaGuardia, JFK, and Newark in a coordinated manner. Congestion and 
delays at each of the three airports affect the other two airports as 
well as the NAS as a whole. The airports are all located relatively 
close to each other and consistently have been among the nation's most 
delay-prone airports.
    Excluding any one of the three major New York-area airports from 
the imposition of caps would simply shift the problem to the non-slot 
controlled airport, as it would become very attractive to carriers 
wanting to start or add service in the New York market. The likely 
result would be an overburdening of that airport and the system. We 
propose to award capacity at JFK and Newark through mechanisms that 
rely, in part, on the market. These mechanisms resemble those in the 
proposal for LaGuardia Airport, but are modified to reflect the 
respective characteristics of JFK and Newark.
    Today's proposal will ensure that the scarce airspace resources are 
used for operations by the carriers valuing the resources most highly. 
Additionally, over the course of the ten-year life of the proposed 
rule, we will monitor the need to maintain the caps and may increase 
the number of scheduled operations in response to technological, 
operational, or capacity plans or improvements or to other factors that 
may warrant such action.
    We note that both JFK and Newark are already capped under the 
respective Orders at 81 scheduled operations per hour (except as 
provided in the Appendices to the Orders). Today's proposal, if 
adopted, will replace those Orders. The FAA believes the summer of 2007 
served as a stark reminder that the demand for access to New York City 
is exceptional and cannot be managed without these caps at an 
acceptable level of delay.
    The NPRM proposes to apply the limits of the recent JFK and Newark 
Orders, except where the Administrator determines under Sec.  93.163 of 
subpart N and Sec.  93.183 of subpart O that additional slots can be 
accommodated. In addition, there would be no more than 44 slots in any 
30-minute period at JFK and Newark, or more than 81 in a 60-minute 
period. We have proposed to specify the 30- and 60-minute limitations 
in addition to the hourly maximum to avoid excessive bunching of slots, 
which can cause unnecessary delays. Section 93.163(d) of subpart N and 
Sec.  93.183 of subpart O sets out the authority of the Administrator 
to increase the number of slots as airport conditions warrant. No 
additional rulemaking would be required for any increase.
    JFK and Newark have similar demand profiles, with an early morning 
peak that typically clears by mid-morning. Demand approaches capacity 
in the early afternoon and typically continues until about 10 p.m. 
Scheduled requests submitted by carriers to the FAA for summer 2008 
showed marked increases throughout the day. Modeling and experience 
demonstrate that delays grow exponentially and have a cascading effect 
on airport operations and individual flights at the airport. As part of 
the discussions with the carriers regarding summer 2008 schedules, 
carriers decided to schedule flights at off-peak hours since the FAA 
was unwilling to authorize new peak hour flights. Based on demand and 
the modeling showing the potential for increased delays, the FAA 
determined that the appropriate hours to limit flights would cover much 
of the operating day.
    The FAA proposes that the final rule, if adopted, would terminate 
at 11 p.m. on March 30, 2019. This approach will allow for future 
determinations by the FAA as to whether a cap is still needed and, if 
so, whether changes are needed to more efficiently manage the scarce 
resource. At present it is impossible to determine what changes in 
business models may occur over the next ten years. In addition, full 
implementation of the New York/New Jersey/Philadelphia Metropolitan 
Area Airspace Redesign project and NextGen technologies are expected to 
successfully impact delays and air traffic efficiency within the next 
ten years, and we should not prejudge the market response. The FAA 
plans to evaluate the effects of the slot program proposed today on the 
distribution of slots and entry into JFK and Newark. The agency intends 
to take this experience into account in all congestion management 
activities.

III. Proposal for Efficient Allocation of Capacity at JFK and Newark

A. Need for More Efficient Allocation

    Congress has directed the Department to place ``maximum reliance on 
competitive market forces and on actual and potential competition.'' 49 
U.S.C. 40101(a)(6). The ability of carriers to initiate or expand 
service at the airport is hindered, in large part, by the imposition of 
a cap. Accordingly, the FAA believes it must strike a balance between 
(1) promoting competition and permitting access to new entrants and (2) 
recognizing historical investments in the airport by carriers and the 
need to provide continuity. It is not the role of the Government either 
to dictate particular business models or to constrain a market and 
provide no means for others to enter that limited market. Simply 
imposing a cap and then doing nothing to ensure that there are 
competitive market forces and actual and potential competition is 
unacceptable.
    Not only is the FAA required to assure the efficient use of the 
NAS, but it must do so in a manner that does not penalize all potential 
operators at the airport by effectively shutting them out of the 
market. Accordingly, the FAA believes that it is well within the 
agency's authority in 49 U.S.C. 40103 to

[[Page 29631]]

provide some mechanism for slot reallocation. Today's proposal attempts 
to strike the appropriate balance by actively developing a market that 
values the limited asset that the FAA created.

B. Authority To Assign Slots at JFK and Newark

    The FAA has statutory authority to dispose of property. Because of 
the congressional mandate in 49 U.S.C. 40101(a)(6) to rely to the 
maximum extent possible on competitive market forces, the FAA is 
tailoring its approach at the two airports. Today the agency is 
requesting comment on an approach whereby the FAA would establish a cap 
on operations and address, through a regulation, which slots would 
revert to the FAA for reallocation but would use its transaction 
authority to allow for reallocation of slots via a market-based 
mechanism.
1. Authority To Determine the Best Use of the Airspace
    The United States Government holds exclusive sovereignty over 
United States airspace. 49 U.S.C. 40103. Citizens of the United States 
have a public right of transit through navigable airspace, but the FAA 
is authorized to assign the use of the airspace necessary to ensure the 
efficient use of airspace. To the extent these needs can be met without 
specifying which citizen may transit or reserve a particular segment of 
airspace at a particular time, there was no need for the FAA to place 
constraints such as slots on the use of the airspace--this remains the 
case for the vast majority of the NAS.
    As described above, however, at New York-area airports, in order to 
ensure the efficient use of airspace, FAA has had to impose constraints 
by assigning to carriers operational authority to conduct a scheduled 
arrival or departure operation on a particular day of the week during a 
specified 30-minute period. These reservations of airspace were called 
slots under the HDR. After the FAA issued the ``buy/sell rule'', 14 CFR 
part 93, subpart S, these slots were treated not only as property of 
the United States Government, but also as if the carriers had a 
property interest, albeit an interest that was heavily encumbered by 
the restrictions imposed by the FAA. The nature of this property 
interest, however, has always been somewhat unclear. To encourage the 
most efficient use of constrained airspace, the FAA is clarifying the 
proprietary interest that the FAA is willing to transfer to airlines 
for a limited period of time. However, the FAA has determined that in 
order to assure the efficient use of airspace, it cannot simply permit 
those whom it grants authority to use the airspace to treat that 
authority as their own; it is the United States Government that has 
sovereignty over, and control of, the airspace. Such an approach would 
not only ignore the inherently valuable nature of an airspace usage 
assignment, but allows a select few to profit from a governmental 
interest to the detriment of their competitors and the public as a 
whole.
2. Authority To Enter Into Leases and Cooperative Agreements
    The FAA has authority to lease real and personal property, 
including intangible property, to others. 49 U.S.C. 106(l)(6) and 
106(n). When disposing of an interest in property, however, the FAA 
must receive adequate compensation. 49 U.S.C. 40110(a)(2). 
Nevertheless, the FAA also has broad authority to enter into 
cooperative agreements on such terms and conditions as the FAA may 
consider appropriate. 49 U.S.C. 106(l)(6). Under the Federal Grants and 
Cooperative Agreements Act, a cooperative agreement is to be used when 
the principal purpose of the agreement is to transfer a thing of value 
to a recipient, either public or private, to carry out a public purpose 
of support or stimulation authorized by law, instead of acquiring (by 
purchase, lease or barter) property or services for the direct use or 
benefit of the agency, and there is substantial Federal involvement in 
the activity.
    Because we must balance the need to promote market forces with the 
value of continuity and certainty of services, the FAA believes this is 
the appropriate vehicle to use to transfer most of the slots as 
described in the following options, for a ten-year period, to the 
carriers that currently have operating authorizations at JFK and 
Newark. Doing so will recognize these carriers' historical investment 
in JFK and Newark, and the public interest that has been served by that 
investment. In addition, it would prevent disruption to the national 
air transportation system that might otherwise occur, allowing the 
public to benefit from continued certainty of readily available air 
transportation to and from these airports. There will, however, be 
substantial ongoing Federal involvement with these slots, as the FAA 
will retain ATC responsibilities for assuring that the use of these 
segments of airspace for their specified times is done safely and with 
maximum possible efficiency.\12\
---------------------------------------------------------------------------

    \12\ Under the cooperative agreements FAA will be transferring a 
leasehold interest in the slots, but FAA will not entirely dispose 
of its property. Receiving compensation from these transfers is 
antithetical to the definition of a cooperative agreement. 
Nonetheless, to the degree that adequate compensation might be 
considered required under 49 U.S.C. 40110(a)(2), the compensation 
will be the carriers' agreement to be bound by the terms in the 
cooperative agreement as well as FAA's recognition of the public 
value received by the carriers' historical investment at JFK and 
Newark.
---------------------------------------------------------------------------

C. Description of the Proposal

1. Categories of Slots
    Today's proposal would create three categories of slots: Common 
Slots, Limited Slots, and Unrestricted Slots. All three categories 
would be held by carriers pursuant to a lease. While the overwhelming 
percentage of slots will be Common Slots, many carriers would hold 
slots in all three categories.
    Common Slots would be assigned to carriers currently serving the 
airports, and would be leased for the duration of the rule, i.e., ten 
years. Once the rule sunsets, all interests would revert to the FAA, 
assuming the rule is not replaced by a different regulatory regime. 
Unlike slots allocated under the HDR and Operating Authorizations 
allocated under the JFK and Newark Orders, carriers would be granted 
clear property rights to Common Slots, allowing the slots to be 
collateralized or subleased to another carrier for consideration. 
However, Common Slots would be subject to reversion to the FAA under 
the rule's minimum usage provision and could be withdrawn for 
operational reasons.
    Leases for Limited Slots would also be assigned by cooperative 
agreements between the FAA and the carriers, but during each of the 
first five years of the rule, a percentage of Limited Slots would be 
made available by auction, at which point they would be converted to 
Unrestricted Slots. Limited Slots would consist only of those slots 
operated on a daily, year-round basis. Thus, slots used on a seasonal 
or on a less-than-daily basis would not be designated as Limited Slots. 
The FAA arrived at this tentative proposal because we seek to populate 
the auction pool with those slots that are most economically valuable 
to carriers seeking to serve New York City. Slots only available on 
certain days or during one scheduling season would likely have value 
only to small subsets of operators at any given time, thus limiting the 
effectiveness of the market. Although slots would be awarded to 
carriers through the auction for daily, year-round operation, the

[[Page 29632]]

acquiring carrier may sublet to other carriers any portion of that 
award.
    Under alternative 1, as currently proposed, 10 percent of the slots 
above the baseline operations \13\ at both JFK and Newark would be 
designated as Limited Slots, and thus could become Unrestricted Slots. 
Under alternative 2, 20 percent of the slots at JFK above the baseline 
operations would be designated as Limited Slots.
---------------------------------------------------------------------------

    \13\ ``Baseline operations'', as defined in Sec.  93.162 and 
Sec.  93.182, are up to 20 slots per day.
---------------------------------------------------------------------------

    The FAA recognizes that the percentage of slots that the agency 
proposes to reallocate represents a relatively small percentage of the 
total number of slots at the two airports, particularly since each 
carrier's first 20 slots, at each airport, will not be subject to 
reversion. Accordingly, we specifically invite commenters to address 
the desirability of assigning different percentages for both JFK and 
Newark under both alternatives. For example, should we increase the 
percentages to be auctioned under alternative 1 to 20 percent? 
Additionally, the FAA seeks comment on whether the proposed percentages 
are sufficient to ensure the opportunity for new entry and an efficient 
allocation of slots among all carriers at the airports, such that each 
slot is allocated to the user who values it the most highly. Increasing 
the percentage of slots for auction would further facilitate the use of 
market forces to allocate capacity, which is a major goal of this 
rulemaking. On the other hand, lowering the number of slots withdrawn 
for auction would be less disruptive to the carriers currently 
operating at JFK and Newark, and would allow the agency to gain 
experience with the auction process. The agency also seeks input on the 
appropriate percentages of slots available for auction (both in total 
and annually) sufficient to assure an efficient allocation of this 
scarce resource. The final rule may provide for the reversion of a 
higher or lower percentage of slots available for auction than we have 
proposed under either alternative in this document.
    Following a review of the comments and further consideration, we 
may provide in a Final Rule for an auction of a greater percentage of a 
carrier's Limited Slots. As with Common Slots, Limited Slots could be 
withdrawn under the proposed minimum usage provision, or for 
operational reasons.
    Unrestricted Slots are slots that a carrier would lease directly 
from the FAA under the auction processes under both alternatives. These 
slots would not be withdrawn by the FAA either under the minimum usage 
provisions or for operational reasons because carriers are required to 
purchase them due to government action. As with Common Slots, 
Unrestricted Slots would expire when the rule sunsets.
2. Initial Assignment of Capacity
    Upon the rule's effective date, each carrier at JFK and Newark 
would automatically be assigned up to 20 slots. Carriers whose approved 
schedules under the JFK and Newark orders call for fewer than 20 
operations would be assigned the same number of slots as they are 
approved to operate under the respective orders. These slots would 
constitute carrier's baseline operations. Slots above a carrier's 
baseline operations would be designated as Common or Limited Slots as 
described above. The FAA believes this is a rational approach to 
assuring that no carrier is affected at a level that could seriously 
disrupt its existing operations at the airports.
    The number of slots to be designated as Limited Slots would be 
calculated after subtracting the slots in each carrier's baseline 
operations of up to 20 slots per day. In other words, if a carrier has 
30 slots at JFK or Newark, 20 would be protected at that airport. Under 
alternative 1, 10 percent of the remainder, or one slot, would become a 
Limited Slot. Under alternative 2, 20 percent of the remainder, or two 
slots, would become Limited Slots at JFK. Of course, most carriers hold 
a number of slots that would not be evenly divisible by applying a 10-
or 20-percent rule. In such situations, the FAA would round the number 
of slots to be designated as Limited Slots up or down to the nearest 
whole number. As a practical matter, a carrier would have to have at 
least 25 slots under alternative 1 or 23 slots under alternative 2, 
before any would be designated as Limited Slots.
    Given the seasonality of operations at these airports, both in 
terms of differences between summer and winter operations and within-
season variability (which is much greater than at LaGuardia), the 
determination of which carrier is entitled to which slot will be based 
on the seasonal schedules approved by the FAA for summer 2008 and 
winter 2008/2009. The FAA has tentatively decided to assign the 
majority of slots at the airport to existing carriers in order to 
minimize disruption and to recognize the carriers' historical 
investments in both the airport and the community.
    No later than the final rule's effective date, the FAA will inform 
all carriers that will have Limited Slots of the number of Limited 
Slots they will have. The designations as Limited Slots would be made 
by both carriers and the FAA. Once the total number of Limited Slots is 
communicated to each carrier, the carrier would designate 50 percent of 
the total by notifying the FAA within 10 days which of the slots in its 
slot pool it designates as Limited Slots. During the subsequent 10 
days, the FAA would determine the remainder of slots that will be 
designated as Limited Slots for each carrier. In making this 
determination, the FAA would initially exclude from consideration slots 
held during all hours where carriers have collectively determined two 
or more slots should be Limited Slots. This approach will assure that 
slots will be available for auction throughout the day. The time 
windows for the Limited Slots would be distributed evenly over the day 
to the extent possible.
    Limited Slots would expire on designated dates and the duration of 
each Limited Slot would be arranged to ensure that each affected 
carrier's aggregate lease duration would be approximately equal to that 
of the other affected carriers. The FAA would publish a list showing 
the expiration date for each Limited Slot. In this way, all carriers 
would know within 20 days of the rule's effective date what slots will 
become available for purchase, and when.
    A technical report more fully explaining how Limited Slots could be 
categorized and allocated was prepared for the LaGuardia rulemaking. A 
copy of that report has been placed in the docket for this rulemaking. 
Commenters are encouraged to review and comment on that document.
3.Market-Based Award of Capacity
    For the first five years of the rule, the FAA would conduct an 
annual auction of Limited Slots. Section 93.165(c) of subpart N and 
Sec.  93.185 of subpart O provides for the conversion of Limited Slots 
to Unrestricted Slots. In accordance with the schedule published under 
Sec.  93.164, one-fifth of the identified Limited Slots would revert to 
the FAA for auction each year. Both the auction and secondary market 
would be open to any carrier in order to avoid artificially restricting 
any carrier's flexibility to acquire Unrestricted Slots for its 
services, and to offer carriers wishing to initiate or expand 
operations at JFK or Newark the full range of opportunities to acquire 
slots.
    Under alternative 1, the FAA is proposing to have 10 percent of the 
carriers' slots above its baseline operations revert to the FAA over 
the first five years of the rule. The FAA would auction the reverting 
Limited

[[Page 29633]]

Slots, with FAA retaining proceeds of the sale. After recouping its 
auction costs, the FAA plans to spend the remainder of the proceeds on 
aviation congestion and delay management initiatives in the New York 
City area.
    Alternative 1 would make approximately 19 slots available for 
auction at JFK and 18 slots available at Newark each year. Carriers 
typically require pairs of slots, so alternative 1 would provide the 
equivalent of approximately 9 round trips per day at both airports. 
Under alternative 1, any carrier could bid on a slot in an auction that 
is blind to the participants and it would be awarded in the form of an 
Unrestricted Slot to the highest responsive bidder. The winning carrier 
could commence operations using the newly acquired slot at the 
beginning of the next summer scheduling season.
    Alternative 2 proposes a different auction procedure for JFK that 
would provide that the holder of a Limited Slot would retain the 
proceeds of its sale in the auction. The only deduction from the sale 
price would be for the FAA's costs associated with conducting the 
auction.
    Under this alternative, 20 percent of the carriers' slots above the 
baseline operations at JFK would revert to the FAA over the first five 
years of the rule. Therefore, approximately 179 slots would be 
available at JFK, of which approximately 36 slots would be available 
for auction each year. Carriers typically require pairs of slots, so 
alternative 2 as proposed would provide the equivalent of 18 round 
trips per day at JFK.
    Under alternative 2, Unrestricted Slots would be awarded to the 
highest responsive bidders in a blind auction. Only cash could be bid 
for a slot. Since the goal of this rulemaking is to impose marketplace 
discipline on the use of slots, the FAA has proposed certain 
restrictions in alternative 2 to reduce anticompetitive behavior. For 
example, carriers may not set minimum bids for the slots, so they 
cannot impose a price so prohibitively high as to effectively preclude 
any sales. For similar reasons, carriers would not be permitted to bid 
on their own slots; otherwise, knowing that no actual payment would be 
made, they could bid unrealistic amounts that no competitor could 
match. With unrealistic bids, the fair market value of the slot would 
not be identified.
    Although the prohibition against a carrier bidding on its own slots 
would mean that the carrier would no longer have that slot, any carrier 
could negotiate for subleases or transfers from other carriers in the 
secondary market or bid on other slots concurrently up for auction and 
held by other carriers.\14\
---------------------------------------------------------------------------

    \14\ The FAA will attempt to auction an even number of slots 
during each hour to provide an opportunity for a carrier to replace 
a slot that it is auctioning. This may not always be possible.
---------------------------------------------------------------------------

    The FAA believes that the above procedures could not be applied at 
Newark, because the current market profile there would diminish the 
likelihood that the auction would bring the beneficial effects of 
market forces that this proposal seeks to stimulate. At JFK (and at 
LaGuardia), no one carrier provides the vast majority of slots that 
would be up for auction, and any carrier that values a slot at a 
particular time could have the opportunity to bid on an equivalent slot 
that is held by another carrier. At Newark, however, Continental would 
have approximately 174 of its slots up for auction if 20 percent of its 
slots reverted to the FAA, but would be unable to bid on those slots or 
on an equivalent number of slots because only 19 slots would be 
available from any other carrier. Under this circumstance, the prices 
paid for slots at Newark may not be reflective of their actual value, 
with no meaningful slot market developing.
    Among the specific questions on which we request comment is whether 
under alternative 2, 20 percent of a carrier's slots above its baseline 
at Newark should revert to the FAA for auction, even though the 
reallocation mechanism would be the same as under the first 
alternative. The agency also requests comment on whether alternative 2, 
in its entirety, should be adopted at Newark.
    The FAA considered using a transparent auction procedure for both 
alternatives 1 and 2. The FAA believes that such transparency with 
respect to identity of the bidders and their corresponding bids would 
encourage gaming of the auction and significantly reduce the economic 
value of the initial auction of slots. The FAA also believes that an 
auction where the identity of the bidders is not known assists new 
entrants seeking to enter the market. Therefore, under Alternative 1, 
the identity of bidders would not be known to other bidders. Since the 
FAA will accept the highest responsive bid, regardless of who that 
bidder is, there is no need to keep bidders' identities from the 
agency. Under Alternative 2, the identity of bidders would be known 
only to the auctioneer, and then only for administrative purposes.
    The FAA does not propose to auction slots after the first five 
years because it believes that ideally slots should transfer from one 
carrier to another through the secondary market. Not only will the 
auctions help create a market for slots, but all carriers will be able 
to assess the true market value of a slot. Armed with information on 
how much a given slot is likely to be worth on the open market, 
carriers (and their shareholders) will be in an even better position to 
determine how best to use their slots based on commercial 
considerations.
    In the unlikely event no bids were received for a slot, we propose 
that the FAA retire the slot until the next auction to assist in delay 
mitigation. We request comment on whether, in the alternative, the 
carrier that previously held the slot should retain the slot for use 
until the next season.
4. New and Returned Capacity
    As mentioned above, the FAA may raise the caps at JFK or Newark 
based on an analysis of delay statistics, aircraft operations at the 
respective airports, airport and airspace improvements, and other 
pertinent factors. The agency believes there is unlikely to be much, if 
any, returned capacity because carriers can sublease slots that they do 
not utilize efficiently rather than surrender them to the FAA because 
of inadequate usage. It is impossible at this time to estimate with any 
certainty how much new capacity is likely to come online; but it is 
unlikely there will be much new capacity in the near-term. Over a 
longer period of time, the realization of new capacity is dependent 
upon NextGen technologies. The efficiencies realized from the New York/
New Jersey/Philadelphia Metropolitan Area Airspace Redesign project 
will benefit delay reduction and will not be used to add new capacity 
at the airports.
    The auction method proposed for LaGuardia, whereby all new and 
returned capacity would be auctioned, maximizes the total number of 
slots available for auction and would, in turn, increase the 
efficiencies that the proposal is intended to generate. However, the 
FAA believes the character of operations at JFK and Newark justifies a 
different approach. At both airports, a substantial percentage of air 
traffic is international. Historically, the FAA has used the IATA 
Worldwide Scheduling Guidelines (WSG) to allocate slots for 
international operations at slot constrained airports to the extent 
they did not conflict with the rules imposing caps at the affected 
airports.
    The use of the WSG to assign new slots could affect carriers' 
scheduling incentives and reduce the efficiency of the market for 
existing slots. However, given the amount of new capacity that

[[Page 29634]]

is likely to be available during the rule's timeframe, this effect is 
likely to be small. Given the significant international presence at 
both airports, the FAA proposes to follow procedures for assigning 
newly available or returned slots that are largely derived from the 
WSG. A new entrant would be defined as a carrier holding or operating 
eight slots or fewer, assigned by the FAA, during the constrained 
hours. The FAA understands that in order to maintain viable operations 
at JFK or Newark, a carrier would need four to six slots for domestic 
operations, and at least two slots for an international operation. The 
five slots contemplated under the WSG provide little opportunity for a 
new entrant carrier to establish its operations before losing new 
entrant status and thereafter being able to expand in the New York 
market only through the purchase of a lease. Setting a limit of eight 
slots administratively assigned by the FAA as the cut-off for new 
entrant status allows a carrier to maintain its operations and provides 
some ability to grow without jeopardizing the carrier's access to slots 
through the WSG.
    The agency is proposing that carriers lose their new entrant status 
if, at any point during the duration of the proposed rule, the FAA 
assigns a total of more than eight Common or Limited Slots on a 
particular day. Thus, if a carrier were awarded six Common Slots on a 
given day of the week, it could only be eligible for assignment of two 
more slots for that day through the WSG before losing its new entrant 
status, even if it subsequently subleased some of those Common Slots to 
another carrier, giving it less than eight total slots. However, the 
same carrier could be assigned six Common Slots, acquire any number of 
additional slots through the secondary market, and still be eligible to 
receive two additional slots under the WSG as a new entrant. This 
provision is intended to prevent carriers from continuing to gain an 
advantage as a new entrant by transferring holdings for which they have 
provided no monetary consideration. On the other hand, since only those 
slots administratively assigned by the FAA, and not those awarded by 
auction or through a lease with another carrier, would be considered in 
determining new entrant status, carriers with eight or fewer of these 
slots will not be discouraged from entering into lease agreements with 
other carriers, contributing to the development of a robust secondary 
market. A carrier's new entrant status would not be affected by one-
for-one trades, which the agency believes are necessary for operational 
efficiency, which do not result in either a gain or reduction in 
operations, and for which no consideration may be given. The FAA seeks 
comment on whether carriers should be allowed to retain their new 
entrant status if they have subleased or otherwise transferred slots 
originally allocated to them by the FAA.
    After allowing for retimings and accommodating requests by new 
entrants, the FAA would evaluate the efficiency of the requested 
assignment in determining which carriers should receive the slot. We 
would consider the effective period of operation, the extent and 
regularity of the proposed usage, and the carrier's schedule 
constraints.
    Using a WSG-based approach would facilitate the continued smooth 
integration of JFK and Newark into the international slot allocation 
system. Based on discussions during the ARC, we believe that the WSG 
approach is well-understood and is an internationally-recognized system 
of allocation at airports.
    We recognize that this method of allocation differs from the method 
proposed for new and returned capacity in the companion proposal at 
LaGuardia. We also recognize that several commenters to the LaGuardia 
NPRM argued that any administrative allocation of capacity could dilute 
the viability of the secondary market. Accordingly, the FAA may adopt 
an allocation method that allocates new and returned capacity via an 
auction. This was the approach favored in the LaGuardia SNPRM. Under 
that approach, the slots would be auctioned as Unrestricted Slots. 
During the first five years of the rule, this new capacity would be 
auctioned at the same time as the slots that revert to the FAA under 
today's proposal. Should insufficient capacity be available to justify 
the expense of conducting an auction in the last five years of the 
rule, the FAA would retain the slots until sufficient capacity was 
available for a meaningful auction. The FAA invites comment as to 
whether the final rule should specify that new and returned capacity at 
JFK and Newark be allocated by auction instead of by the WSG-method 
method described above.

D. Auction Procedures

    The FAA is currently engaged in procuring the services of a 
contractor to conduct auctions of the proposed Limited Slots.\15\ The 
details regarding the specifics of any potential auction will be 
disclosed after the contractor has developed and validated an auction 
process and the FAA is ready to proceed with an auction.\16\
---------------------------------------------------------------------------

    \15\ As indicated in the Order Limiting Operations at John F. 
Kennedy International Airport, 73 FR 3510 (1/18/08) and the Notice 
of Proposed Order Limiting Scheduled Operations at Newark Liberty 
International Airport, 73 FR 14552 (3/18/08), the FAA intends to 
auction new or returned capacity, if any, under those orders. The 
contract would cover auctions at all possible airports. The FAA is 
not waiting until this rule is finalized to award the contract, 
because this proposal and the two orders contemplate potentially 
conducting the first auction before the end of the year.
    \16\ Since the auction will address the lease of slots awarded 
by the FAA under its leasing authority rather than under any 
administrative allocation, notice to interested parties will be 
governed by applicable procurement law rather than the 
Administrative Procedure Act.
---------------------------------------------------------------------------

    In order to ensure that auction participants understand how the 
auction process works, the FAA anticipates the contractor would have to 
conduct a training seminar and a mock auction prior to each auction. A 
single training seminar and mock auction would not suffice since 
presumably not every carrier will participate in every auction. The 
auction would also have to be structured to prevent gaming. This would 
likely be accomplished through the use of activity rules.
    Finally, the contractor would have to provide and maintain a secure 
communication mechanism for conducting the auction and develop a 
website that provides information on the availability of slots and the 
logistics of the auction.
    At present, the FAA is contemplating requiring bidding carriers to 
provide up-front payments as a prerequisite to participating in the 
auction and requiring full payment for the slots at the time of award. 
The Federal Communications Commission (FCC) has experienced problems 
with bidders who were not financially secure or who were otherwise 
unwilling or unable to pay for the awards. The upfront payment could 
also discourage bid-sniping by preventing carriers from adding slots to 
their bid package beyond the amount of the upfront payment. The FAA 
recognizes that paying for the entire lease at one time could be 
expensive; however, it also believes that serious bidders should be 
able to obtain the requisite financing.

E. Secondary Trading

    All slots will have value in the secondary market. To the extent 
that the secondary market is not mature and the value of slots is not 
well-known, the auction should inform potential buyers of the value of 
these slots and stimulate the secondary market. The FAA believes that 
ultimately the best way to maximize competition is with the

[[Page 29635]]

development of a robust secondary market. Through the years, the FAA 
has received complaints that carriers were unaware of possible 
opportunities to buy or lease slots at slot-controlled airports and 
that incumbent carriers were colluding to keep new entrant carriers out 
of the airport.
    We believe some measures must be taken to assure access to the 
secondary market. All carriers interested in initiating operations at 
JFK and Newark, or increasing their operations there, should have an 
opportunity to participate in any transactions. Accordingly, the FAA 
proposes to (1) permit carriers to include Common Slots for sale in the 
auction, organized by the FAA, and (2) establish a ``secondary-market'' 
bulletin-board system whereby carriers seeking to sublet slots, or to 
acquire such subleases, would notify the FAA, which would then post the 
relevant information on its Web site.
    If a carrier wishes to include some of its slots in the auction, 
these slots will be treated in the same manner as other slots being 
auctioned by the FAA. However, the carrier would be able to specify a 
minimum price for these slots so that it need not give up the slots 
unless they command a price that the carrier is willing to accept.
    The FAA has tentatively decided that transactions via the bulletin-
board-system would not have to be blind, and the transaction could 
include both cash and non-cash payments. While it may be argued that 
transparency among parties to the transaction encourages anti-
competitive behavior, the FAA believes that a blind, cash-only 
requirement could be unduly restrictive. In particular, the FAA 
believes that non-cash bids promote competition by enlarging the pool 
of potential bidders. Thus, non-cash transactions should result in both 
more bidders and potentially higher bids. However, it is critical that 
the identities of parties be known if non-cash assets are permitted 
because that is the only way to value those assets. In addition, the 
non-cash aspect of the transaction would require direct negotiating.
    The FAA believes that these concerns could be met in a blind 
secondary market. For example, the agency could adopt a hybrid scheme 
whereby the initial offer and acceptance would be blind and limited to 
a cash offer, but the parties could negotiate non-cash assets after the 
offer had been accepted. Such an approach may be workable. During the 
posting of the lease and subsequent bidding for the slots, the parties' 
identities would not be known. Once the auction closed, the FAA would 
forward the highest bid to the sublessor without any bidder 
identification. The sublessor would have a set number of business days 
to accept the bid. At that point, the parties' identities would be 
revealed, and they would have a set period of time to negotiate the 
possibility of non-cash assets in lieu of money as consideration for 
the lease. If the parties were unable to come to an agreement, the 
lease would have to proceed on a cash basis. The FAA seeks comment on 
this and other viable alternatives.
    The FAA recognizes that non-blind transactions could facilitate, 
and even encourage, collusion. The Department has the authority under 
49 U.S.C. 41712 to investigate, prohibit, and impose penalties on an 
air carrier for an unfair or deceptive practice or an unfair method of 
competition in air transportation or the sale of air transportation. 
The Department has consistently held that this authority empowers it to 
prohibit anticompetitive conduct (1) that violates the antitrust laws, 
(2) that is not yet serious enough to violate the antitrust laws but 
may do so in the future, or (3) that, although not a violation of the 
letter of the antitrust laws, is close to a violation or contrary to 
their spirit.\17\
---------------------------------------------------------------------------

    \17\ See United Airlines, Inc. v. Civil Aeronautics Board, 766 
F. 2d 1107, 1112, 1114 (7th Cir. 1985) and cases cited therein; see 
also H.R. Rep. No. 98-793, 98th Cong., 2d Sess. (1984) at 4-5, Order 
2002-9-2, Complaint of the American Society of Travel Agents, Inc., 
and Joseph Galloway against United Air Lines, Inc, et al. (Docket 
No. OST-99-6410) and Complaint of The American Society of Travel 
Agents, Inc., and Hillside Travel, Inc. against Delta Air Lines, et 
al. (Docket No. OST-02-12004) (September 4, 2002) at 22-23.
---------------------------------------------------------------------------

    In order to assure that the Department can conduct adequate 
oversight, today's proposal would require carriers to file with the 
Department a detailed breakdown of all lease terms and asset transfers 
for each transaction, and the subletting carrier would have to disclose 
all bids submitted in response to its solicitation. The slot could not 
be operated by the acquiring carrier until all documentation has been 
received, and the FAA has approved the transfer. The FAA has considered 
whether to publicly disclose non-confidential business information so 
that all carriers have an assessment of the relative value of the slots 
that are being traded. We have not included language to this effect in 
the proposed regulatory text. However, we seek comment on whether it 
would be helpful for this type of information to be disclosed.
    Under proposed Sec.  93.168 and Sec.  93.188, trades among U.S. air 
carriers with unified marketing control (marketing carriers) would not 
have to be advertised, because they are considered a single carrier for 
the purpose of this rule and these trades do not have the 
characteristics of a normal arm's-length transaction. Since foreign air 
carriers are considered separate carriers, they would not be able to 
take advantage of this provision. As it has done historically, the FAA 
would approve these transactions after it has received written evidence 
from each carrier that it consents to the transfer. The receiving 
carrier could not use the slot until the FAA has provided written 
approval of the transfer. Same day transactions among marketing 
carriers that address emergency situations, such as maintenance 
problems, adverse weather, or other unforeseen operational issues, 
could take place without prior approval by the FAA, but carriers would 
have to notify the FAA of the trade within five business days.
    One-for-one trades between any two carriers would similarly not be 
subject to the restrictions of the secondary market. Such trades 
enhance the operational efficiency of the airport. However, the 
proposed rule would not allow consideration other than slots to be 
offered. When monetary or other compensation is involved in a slot 
transfer, the transaction would have to be handled as a sublease under 
Sec.  93.168 of subpart N and Sec.  93.188 of subpart O. As with 
subleases and trades between marketing carriers, the slot could not be 
used by the new carrier until the FAA provides written confirmation of 
the transfer.

IV. Unscheduled Operations

    The FAA intends to limit unscheduled operations into and out of JFK 
and Newark during the constrained hours. Unscheduled operations at 
Newark would be limited to two per hour between 6 a.m. and 11:59 a.m. 
and between 10 p.m. and 10:59 p.m. and one per hour between 12 noon and 
9:59 p.m. At JFK, there would be two unscheduled operations permitted 
per hour between 6 a.m. and 1:59 p.m. and between 10 p.m. and 10:59 
p.m. and one per hour between 2 p.m. and 9:59 p.m. Under today's 
proposal, reservations would be required to use the airport (except for 
emergency operations) and could be obtained up to 72 hours in advance.
    To the extent ATC can handle additional requests (for example, in 
good weather) it will do so without regard to the reason for the 
request. However, there is no guarantee that the FAA would accept more 
than the specified number of reservations per hour, and the 
determination to handle more traffic would likely be made on

[[Page 29636]]

that day. Reservations for all non-emergency flights would still be 
required and would be assigned by the FAA's e-CVRS system. Additional 
information of procedures for obtaining reservations will be available 
on the Internet at http://fly.faa.gov/ecvrs.
    The FAA proposes to allow Public Charter operators to reserve an 
allowable operation up to six months in advance. Since the reservation 
pool consists of operations planned well in advance and last-minute 
operations, the number of reservations made available to public charter 
flights up to six months in advance would be limited to no more than 
one in any hour and no more than 25 percent of the total reservations 
from 12 noon to 9:59 p.m. local time. A Public Charter operator without 
the advance reservation could attempt to secure a reservation within 
the three-day window that is available for all other unscheduled 
operations. A carrier could also elect to use one of its assigned slots 
or obtain a slot from another carrier in the secondary market.

V. Other Issues

A. 30-Minute Windows

    Consistent with the existing JFK and Newark Orders, we propose to 
assign slots at JFK and Newark in 30-minute windows. The FAA cautions, 
however, that peaking within the 30-minute windows could lead to 
increased congestion. The FAA will continue to monitor operations and 
will address any significant operational issues through discussions 
with carriers.

B. Use-or-Lose

    Consistent with the approach taken in the JFK and Newark Orders, 
which is based on the WSG, the FAA is proposing a use-or-lose 
requirement for JFK and Newark that takes into consideration the 
seasonal nature of international, as well as some domestic, operations 
at those airports. Carriers would be expected to operate their Common 
Slots and Limited Slots in accordance with approved schedules at least 
80 percent of the time. However, proposed Sec.  93.170 of subpart N and 
Sec.  93.190 of subpart O would consider the summer and winter 
schedules separately. Carriers would be allocated slots on the days and 
for the time periods set out in their summer 2008 and winter 2008/2009 
schedules approved by the FAA. The carriers will be subject to the use-
or-lose requirement only for those slot times that are allocated to 
them. Unrestricted Slots would not be subject to usage requirements.
    The proposed rule would allow for limited waivers of the minimum 
usage requirements in the event that the carrier experiences an unusual 
and unpredictable condition that prevents it from using the slot for at 
least five consecutive days. If weather conditions prevented 
operations, for example, an operator might be granted a waiver of the 
use-or-lose provisions.
    To enable carriers to make necessary operational adjustments, the 
usage requirements will not apply for the first 90 days after a carrier 
receives a slot under a sublease. However, a transfer between carriers 
under Sec.  93.168(f) of subpart N and Sec.  93.188(f) of subpart O of 
this part, in which one carrier holds marketing and inventory control 
of the flights operated by another carrier, is not a sublease for the 
purpose of this section. Therefore, there would be no 90-day waiver of 
the minimum use requirements following a transfer between them. 
Likewise, there would be no waiver for slots acquired via the WSG 
because carriers would have ample time after the slots were allocated 
to take the steps necessary to initiate the new operations.

C. Usage Reporting Requirements

    The minimum usage requirement for JFK and Newark would be 
calculated on a seasonal basis. Therefore, we are proposing to require 
carriers to file reports with the FAA for each scheduling season. In 
accordance with Sec.  93.172 of subpart N and Sec.  93.192 of subpart 
O, carriers would report the usage of Common and Limited Slots. An 
interim report would be due no later than September 1 for the summer 
scheduling season and no later than February 1 for the winter 
scheduling season. Carriers would also be required to file final usage 
reports within 30 days of the last day of the applicable scheduling 
season.

D. Administrative Provisions

    The FAA may withdraw or suspend slots at JFK or Newark for 
operational reasons pursuant to Sec.  93.167 of subpart N and Sec.  
93.187 of subpart O. The FAA would assign a withdrawal priority number 
to each Common and Limited Slot by a random lottery. If a reduction in 
operations becomes necessary, slots would be withdrawn starting with 
the highest number. The Common or Limited Slot with the lowest assigned 
numbers would be the last to be withdrawn. The FAA would provide at 
least 45 days' notice of its intention to withdraw or temporarily 
suspend a slot, unless the operational circumstances necessitate a 
shorter notice period. Given that a number of operators will have only 
a limited number of slots at JFK and Newark, we are requesting comment 
on whether the FAA should establish a level of slots that would not be 
subject to withdrawal or temporary suspension to fulfill operational 
needs to avoid the possibility of marginalizing or excluding such 
operators from the airport.

VI. Regulatory Notices and Analyses

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs. Second, 
the Regulatory Flexibility Act of 1980 requires agencies to analyze the 
economic impact of regulatory changes on small entities. Third, the 
Trade Agreements Act (19 U.S.C. 4 2531-2533) prohibits agencies from 
setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. In developing U.S. standards, the Trade 
Act requires agencies to consider international standards and, where 
appropriate, to be the basis of U.S. standards. Fourth, the Unfunded 
Mandate Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare 
a written assessment of the costs, benefits, and other effects of 
proposed or final rules that include a Federal mandate likely to result 
in the expenditure by State, local, or tribal governments, in the 
aggregate, or by the private sector, of $100 million or more annually 
(adjusted for inflation).
    In conducting these analyses, FAA has determined this final rule 
(1) has benefits that justify its costs, is a ``significant regulatory 
action'' as defined in Sec.  3(f) of Executive Order 12866, which is 
also known as an ``economically significant regulation action,'' and is 
``significant'' as defined in DOT's Regulatory Policies and Procedures; 
(2) would not have a significant economic impact on a substantial 
number of small entities; (3) would not adversely affect international 
trade; and (4) would not impose an unfunded mandate on State, local, or 
tribal governments, or on the private sector. These analyses, set forth 
in this document, are summarized below.

Total Costs and Benefits of This Rulemaking

    Through implementation of an auction, FAA estimates that this 
proposed rule would result in a long-term improvement in the allocation 
of scarce slot resources at JFK and Newark. The estimated present value 
of net benefits of improved slot allocation by

[[Page 29637]]

auctions is between $256 million and $267 million at JFK and between 
$207 million and 218 million at Newark from 2009 to 2019. The costs of 
the rule, with a present value between $11 and $22 million each at JFK 
and Newark, are due to the design, implementation and participation in 
an auction of slots. These costs assume that the full cost of setting 
up the auction mechanism and participating in the auctions are 
individually borne at each airport; in fact, if auctions are conducted 
at more than one airport in the New York area, the costs of the setting 
up and participating in the auctions could be shared among the users of 
the airports and would be lower on a per airport basis.
    This regulatory impact analysis assumes as a baseline that in the 
absence of this rulemaking, the FAA would not otherwise impose long-
term caps on aircraft operations at JFK and Newark. Therefore, the FAA 
estimates that, through the long-term implementation of a cap on 
aircraft operations, this proposed rule would result in about a 25 
percent reduction in the average delay per operation at JFK relative to 
a situation with no cap. After allowing for the lost consumer and 
producer surplus due to a reduction in air service caused by the caps, 
the net value of the savings in average delay attributable to the cap 
generates a present value net benefit of about $686 million from 2009 
to 2019. At Newark, this proposed rule would result in about a 23 
percent reduction in the average delay per operation at Newark relative 
to a situation with no cap, generating a present value net benefit 
(after deducting lost producer and consumer surplus from reductions in 
air service) of about $705 million from 2009-2019.\18\ The benefits are 
estimated by comparing the no-rule scenario (similar to the situation 
at JFK and Newark in August 2007) with the proposed cap.
---------------------------------------------------------------------------

    \18\ Estimates based on a 7 percent discount rate. All results 
reported in this analysis are cost-beneficial at a 7 percent 
discount rate; using a 3 percent rate would make them even more so, 
with a present value net benefit of about $836 million from 2009-
2019 for JFK and $859 million from 2009-2019 for Newark.
---------------------------------------------------------------------------

Who Is Potentially Affected by This Rulemaking

     Operators of scheduled and non-scheduled, domestic and 
international flights, and new entrants who do not yet operate at JFK 
and Newark.
     All communities with air service to JFK and Newark.
     Passengers of scheduled flights to JFK and Newark.
     The Port Authority of New York and New Jersey, which 
operates the airport.

Key Assumptions

     Base Case: No operating authorizations or caps.
     Cap on operations provides delay improvement.
     Alternative 1: 100 percent of slots held by a carrier with 
fewer than 21 slots at either JFK or Newark would be reassigned to the 
carrier with 10 years of life; for holders with 21 or more slots at 
either airport, 100 percent of the first 20 slots at each airport would 
reassigned to the carrier with leases of 10 years and 90 percent of 
slots above the 20 slot base for the carrier would be reassigned to the 
carrier with leases of 10 years. Ten percent of slots above the 20 slot 
base would be designated as Limited Slots and would be auctioned: one-
fifth immediately upon the implementation of the rule.\19\ The 
remaining four-fifths of the Limited Slots would be assigned to the 
carrier which held them previously, but with leases of 1 to 4 years of 
life. The FAA would auction the Limited Slots to the highest bidder in 
annual auctions beginning in January 2009 and ending in January 2013. 
FAA would use the net revenues of the annual auctions to invest in 
capacity in the New York area.
---------------------------------------------------------------------------

    \19\ The slots auctioned in January 2009 under both alternatives 
would become available beginning in the summer season of 2009. Until 
that time, the air carrier that formerly held the Limited Slot could 
continue to use it.
---------------------------------------------------------------------------

     Alternative 2: For JFK, 100 percent of slots held by 
carriers with fewer than 21 slots at JFK would be reassigned to the 
carrier with leases of 10 years; for holders with 21 or more slots, 100 
percent of the first 20 slots would be reassigned to the carrier with 
leases of 10 years and 80 percent of slots above the 20 slot base for 
the carrier would be reassigned to the carrier with leases of 10 years. 
Twenty percent of slots above the 20 slot base would be designated as 
Limited Slots and would be auctioned: one-fifth immediately upon the 
implementation of the rule. The remaining four-fifths of the Limited 
Slots would be assigned to the carrier which held them previously, but 
with leases of 1 to 4 years of life. The FAA would auction the Limited 
Slots to the highest bidder in annual auctions beginning in January 
2009 and ending in January 2013. Carriers at JFK could not bid on slots 
they formerly held but would retain the net revenues generated by the 
sale of the former leases. As Newark would be treated the same under 
either approach, the key assumptions for Newark are the same as under 
Alternative 1.
     For the purposes of this evaluation, the effective date is 
12/01/08.

Other Important Assumptions

     Discount Rate--3 and 7 percent in real (net of inflation) 
terms.
     Period of Analysis: 2009 to 2019.
     Assumes 2008 constant year (real) dollars.
     Passenger Value of Travel Time--$28.60 per hour at JFK and 
Newark.\20\
---------------------------------------------------------------------------

    \20\ GRA, Incorporated ``Economic Values for FAA Investment and 
Regulatory Decisions, A Guide,'' prepared for FAA Office of Aviation 
Policy and Plans, (October 3, 2007). Passenger value of time is for 
``all purposes,'' reflecting a mix of business and leisure travel.
---------------------------------------------------------------------------

Alternatives We Have Considered

     No Action: This alternative would let the current orders 
restricting operations at JFK and Newark expire on October 24, 2009 
without replacing the limitations. The FAA expects that, without caps, 
air carriers would expand flight operations at these two airports to 
levels equal to or exceeding those experienced in the summer of 2007, 
causing increasingly severe delays at these airports and throughout the 
National Airspace System (NAS).
     Caps: This alternative would permanently impose caps at 81 
scheduled operations per hour each at JFK and Newark, plus up to two 
unscheduled operations per hour at each airport, every day from 6 a.m. 
to 10:59 p.m.; it would grandfather current holders of operating 
authorizations to operate at the airports.
     Alternative 1: This alternative would institute caps at 
both JFK and Newark as described above and reallocate 10 percent of 
eligible capacity via five annual auctions beginning in January 2009. 
The FAA would retain the net proceeds of the auctions for use on 
congestion and delay management initiatives in the New York City area.
     Alternative 2: This alternative would institute caps at 
JFK as above and reallocate 20 percent of eligible slots at JFK, via 
five annual auctions beginning in January 2009. The carrier holding a 
slot to be reallocated would not be able to bid on its own slots, but 
would retain the net auction proceeds. Under alternative 2, the regime 
of Newark would be the same as in alternative 1.
    We are requesting comment from industry on the range of 
alternatives considered.

Benefits of This Rulemaking

    The primary benefits of this rulemaking would be due to the delay 
reduction from the caps on operations

[[Page 29638]]

and an improvement in the efficiency of allocation of scarce slot 
resources through the use of an auction mechanism and secondary slot 
subleasing markets characterized by clearly defined property rights.

Costs of This Rulemaking

    The major costs of this proposed rule are the costs to the public 
and private sectors of designing, implementing and participating in the 
auction. Additionally, the implementation of caps under this rulemaking 
will lead to a reduction in flights into JFK and Newark compared to 
what would occur without the caps. The FAA has estimated the value of 
these scheduled flight reductions and has deducted them from the delay 
benefits of the caps at each airport to calculate overall net benefits 
of the caps. FAA specifically requests comment on the impacts from the 
reduction in scheduled flights.

Paperwork Reduction Act

    This proposal contains the following new information collection 
requirements. As required by the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)), the FAA has submitted the information requirements 
associated with this proposal to the Office of Management and Budget 
for its review.
    Some of the information requirements in today's notice are similar 
to those originally proposed in the SNPRM ``Congestion Management Rule 
for LaGuardia Airport'' (Docket No. FAA-2006-25707; Notice No. 08-04). 
The FAA has applied these requirements and summarized them below.
    Title: Congestion Management Rule for John F. Kennedy International 
Airport and Newark Liberty International Airport.
    Summary: The FAA proposes to grandfather the majority of operations 
at JFK and Newark and develop a secondary market by annually auctioning 
off a limited number of slots at each airport. This proposal also 
contains provisions for use-or-lose and withdrawal for operational 
need. The FAA proposes to sunset the rule in ten years. More 
information on the proposed requirements is detailed elsewhere in 
today's notice.
    Use of: The information is reported to the FAA by scheduled 
operators holding slots at JFK and Newark. The FAA logs, verifies, and 
processes the requests made by the operators.
    This information is used to allocate, track usage, withdraw, and 
confirm transfers of slots among the operators and facilitates the 
transfer of slots in the secondary market. The FAA also uses this 
information in order to maintain an accurate accounting of operations 
to ensure compliance with the operations permitted under the rule and 
those actually conducted at the airports.
    Respondents: The respondents to the proposed information 
requirements in today's notice are scheduled carriers with existing 
service at JFK and Newark, carriers that plan to enter the JFK and 
Newark markets (by auction or secondary market), and carriers that 
enter the JFK and Newark market in the future. There are currently 
seventy-seven (77) carriers with existing scheduled service at JFK and 
thirty-nine (39) carriers with existing scheduled service at Newark. 
Various carriers included in these totals have service at both 
airports.
    Frequency: The information collection requirements of the rule 
involve scheduled carriers notifying the FAA of their use of slots. 
Each carrier must notify the FAA of its: (1) Designation of 50 percent 
of its Limited Slots, if applicable; (2) request for confirmation to 
sublease slots; (3) consent to transfer slots under the transferring 
Carrier's marketing control; (4) requests for confirmation of one-for-
one slot trades; (5) slot usage (operations); and (6) request for 
assignment of slots available on a temporary basis.
    Annual Burden Estimate: The annual reporting burden for each 
subsection of the rule is presented below. Annual burden estimates 
presented in today's notice are based on burden estimates from the 
SNPRM ``Congestion Management Rule for LaGuardia Airport'' (Docket No. 
FAA-2006-25709; Notice No. 08-04).
    The burden is calculated by the following formula:
Annual Hourly Burden = ( of respondents) * (time involved) * 
(frequency of the response).

Section 93.164(c)(2) Categories of Slots: A Carrier Shall Designate 50 
Percent of Its Limited Slots

    JFK
    (4 carriers with Limited Slots) * (80 hours per submittal) = 320 
hours.
    Based on the current allocation of Operating Authorizations and the 
proposed level of baseline operations each carrier would be 
grandfathered under today's proposal, we assumed the four carriers with 
the most operations at JFK would expend up to 10 days of planning time 
each, potentially 80 hours, to develop and submit their designations of 
50 percent of their Limited Slots, for a total of 320 hours. This 
designation would occur once, 10 days after the final rule effective 
date.
    Newark
(1 carrier) * (240 hours per submittal) = 240 hours.
(5 carriers) * (80 hours per submittal) = 400 hours.
Total Annual Hourly Burden = 640 hours.
    Based on the projected allocation of Operating Authorizations and 
the proposed level of baseline operations each carrier would be 
grandfathered under today's proposal, we assumed that one carrier, 
Continental Airlines, with the most operations at Newark would expend 
up to 30 days of planning time, potentially 240 hours, to develop and 
submit its designation of 50 percent of its Limited Slots. The 
remaining five carriers required to designate Limited Slots would each 
expend up to 10 days of planning time, potentially 80 hours each, to 
develop and submit their designation of 50 percent of their Limited 
Slots. These five carriers would therefore need 400 hours. In total, 
the six carriers at Newark required to designate Limited Slots would 
require 640 hours of effort to make the designation. This designation 
would occur once, 10 days after the final rule effective date.

Section 93.165(c) Initial Assignment of Slots

    We assumed that the 77 carriers operating at JFK and 39 carriers 
operating at Newark would expend time submitting and collecting 
information to participate in the proposed auctions for slot 
assignments. The FAA is currently in the process of procuring auction 
software and services. The FAA will make available burden estimates for 
information requirements relating to auction participation in a 
separate notice.

Section 93.166(b)-(c) Assignment of New or Returned Slots

    We made no assumptions about additional workload for carriers at 
either airport associated with the IATA-like administrative process for 
assigning new or returned slots. Workload would vary depending on how 
many (if any) new or returned slots were to develop at either airport 
over the 10 year period of the proposed rule. In any case, carriers are 
already familiar with and use IATA-like allocation methods and would 
handle them in the course of normal operations at JFK and Newark.

Section 93.168(b), (d), (f) Sublease and Transfer of Slots

    JFK
(18 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 
108 hours.

[[Page 29639]]

(59 carriers) * (1.5 hours per submittal) * (2 occurrences per year) = 
177 hours.
Total Annual Hourly Burden = 285 hours.
    Based on burden estimates from ``Congestion Management Rule for 
LaGuardia Airport,'' we assumed the 77 carriers operating at JFK would 
expend 1\1/2\ hours for each occurrence of a lease or transfer of a 
slot. For each operator with 6 or more slots (18 carriers total), we 
assumed that a lease or transfer of a slot would occur on average 
quarterly. For each operator with fewer than 6 slots (59 carriers 
total), we assumed that a lease or transfer of a slot would occur on 
average biannually. The total annual hourly burden for all carriers 
collectively would be 285 hours.
    Newark
(1 carrier) * (1.5 hours per submittal) * (16 occurrences per year) = 
24 hours.
(12 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 
72 hours.
(26 carriers) * (1.5 hours per submittal) * (2 occurrences per year) = 
78 hours.
Total Annual Hourly Burden = 174 hours.
    As with JFK, we assumed the 39 carriers operating at Newark would 
expend 1/\1/2\ hours for each occurrence of a lease or transfer of a 
slot. For the largest operator, we assumed that a lease or transfer of 
4 slots would occur on average quarterly. For those operators at Newark 
with 6 or more slots (12 carriers total, excluding Continental 
Airlines), we assumed that a lease or transfer of a slot would occur on 
average quarterly. For each operator with fewer than 6 slots (26 
carriers total), we assumed that a lease or transfer of a slot would 
occur on average biannually. The total annual hourly burden for all 
carriers collectively would be 174 hours.

Section 93.169(b), (d) One-for-One Trades of Slots

    JFK
(18 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 
108 hours.
(59 carriers) * (1.5 hours per submittal) * (2 occurrences per year) = 
177 hours.
Total Annual Hourly Burden = 285 hours.
    Based on burden estimates from ``Congestion Management Rule for 
LaGuardia Airport,'' we assumed the 77 carriers operating at JFK would 
expend 1\1/2\ hours for each occurrence of a one-for-one trade of a 
slot. For each operator with 6 or more slots (18 carriers total), we 
assumed that a one-for-one slot trade would occur on average quarterly. 
For each operator with fewer than 6 slots (59 carriers total), we 
assumed that a one-for-one slot trade would occur on average 
biannually. The total annual hourly burden would be 285 hours.
    Newark
(1 carrier) * (1.5 hours per submittal) * (16 occurrences per year) = 
24 hours.
(12 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 
72 hours.
(26 carriers) * (1.5 hours per submittal) * (2 occurrences per year) = 
78 hours.
Total Annual Hourly Burden = 174 hours.
    As with JFK, we assumed the 39 carriers operating at Newark would 
expend 1\1/2\ hours for each occurrence of a one-for-one trade of a 
slot. For the largest operator, we assumed that a one-for-one trade of 
4 slots would occur on average quarterly. For those operators at Newark 
with 6 or more slots (12 carriers total, excluding Continental 
Airlines), we assumed that a one-for-one slot trade would occur on 
average quarterly. For each operator with fewer than 6 slots (26 
carriers total), we assumed that a one-for-one slot trade would occur 
on average biannually. The total annual hourly burden would be 174 
hours.

Section 93.171 Unscheduled Operations

    This section of the proposed rule requires unscheduled and public 
charter operations at JFK and Newark to be reserved using the Airport 
Reservation Office (ARO) or, for public charters seeking reservations 
up to six months in advance, through the Slot Administration Office. It 
is the FAA's intention, however, to require these reservation 
procedures at JFK and Newark regardless of and apart from the outcome 
of this rulemaking. Accordingly, the FAA will make available burden 
estimates relating to unscheduled and public charter operations in a 
separate rulemaking notice.

Section 93.172(a)-(b) Reporting Requirements

    JFK
(77 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 
462 hours.
    Based on burden estimates from the ``Congestion Management Rule for 
LaGuardia Airport'' (Docket No. FAA-2006-25709; Notice No. 08-04), we 
assumed the 77 carriers operating at JFK would expend, on average, 1\1/
2\ hours two times per summer and winter season to submit the data 
required by Sec.  93.172.
    Newark
(39 carriers) * (1.5 hours per submittal) * (4 occurrences per year) = 
234 hours.
    Based on burden estimates from the ``Congestion Management Rule for 
LaGuardia Airport'' (Docket No. FAA-2006-25709; Notice No. 08-04), we 
assumed the 39 carriers operating at Newark would expend, on average, 
1\1/2\ hours every two months to submit the data required by Sec.  
93.172.

Summary

    JFK
    Total First Year Hourly Burden--320 Hours.
    Total Recurring Annual Hourly Burden (per year for 10 years)--1,032 
Hours.
    Newark
    Total First Year Hourly Burden--640 Hours.
    Total Recurring Annual Hourly Burden (per year for 10 years)--582 
Hours.
    The burden estimates for JFK and Newark do not include the time 
required to participate in the annual auctions. The FAA will make 
available burden estimates for information requirements relating to 
auction participation in a separate notice.
    The agency is soliciting comments to--
    (1) Evaluate whether the proposed information requirements are 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the agency's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Individuals and organizations may submit comments on the 
information collection requirement by July 21, 2008, and should direct 
them to the address listed in the ADDRESSES section of this document. 
Comments also should be submitted to the Office of Information and 
Regulatory Affairs, OMB, via facsimile at (202) 395-6974, Attention: 
Desk Officer for FAA.
    According to the 1995 amendments to the Paperwork Reduction Act (5 
CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the 
collection of information, nor may it impose an information collection 
requirement unless it displays a currently valid OMB control number. 
The OMB control number for this information collection will be 
published in the Federal Register, after the Office of Management and 
Budget approves it.

[[Page 29640]]

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide range of small 
entities, including small businesses, not-for-profit organizations, and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule would have a significant economic impact on a substantial 
number of small entities. If the agency determines that it would, the 
agency must prepare a regulatory flexibility analysis as described in 
the Act.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, Sec.  605(b) of the 1980 RFA provides that 
the head of the agency may so certify and a regulatory flexibility 
analysis is not required. The certification must include a statement 
providing the factual basis for this determination, and the reasoning 
should be clear. The basis for such FAA determination follows.
    The proposed rule most directly affects four scheduled operators at 
JFK (Delta Air Lines, JetBlue Airways, American Airlines, and United 
Airlines) and five scheduled operators at Newark (Continental Airlines, 
American Airlines, United Airlines, Delta Air Lines, and U.S. Airways). 
These carriers would receive one or more Limited Slots. None of these 
carriers are small businesses. However, the FAA considered that some 
small regional operators affiliated with these carriers and using slots 
provided by these carriers could be affected. Based on a review of the 
number of employees for each scheduled operator, the FAA found that 
only two scheduled operators (CommutAir and EOS Airlines) at JFK, and 
none at Newark, are considered small by Small Business Administration 
size standards (in this case, firms with 1,500 or fewer employees). Of 
the two scheduled operators at JFK, CommutAir operates under the name 
Continental Connection for Continental Airlines. Continental Airlines 
has fewer than 20 operations per day at JFK and therefore neither it 
nor CommutAir is affected by this rule.
    Using Enhanced Traffic Management System (ETMS) data, the FAA has 
determined that there are approximately 54 identifiable unscheduled 
operators at JFK and 61 identifiable unscheduled operators at Newark 
who could be affected by this rule. While some of these operators may 
be small businesses, the FAA does not believe they will be 
significantly impacted by this rulemaking. These operators typically 
have greater flexibility to adjust operations and carry out very few 
operations during peak hours compared to scheduled operators. During 
peak hours in the summer of 2007, there were fewer than two average 
unscheduled operations per hour at each airport, whereas the proposed 
rule would allow 1 to 2 operations per hour. Section 93.171(g) of 
subpart N and Sec.  93.191(g) of subpart O enables the FAA to determine 
that additional reservations may be accommodated for a specific time 
period, and allows unused slots to be available temporarily for 
unscheduled operations. In summary, while the proposed rule reduces the 
number of unscheduled operations per hour, it does not significantly 
affect the overall number of current unscheduled operations that take 
place at each airport.
    Using 2007 Census data, the FAA has also reviewed whether there 
would be interruptions to service to communities with a population of 
less than 50,000. We do not know if there will be any service 
interruptions as a result of the rule. We have reviewed population 
statistics for every city served from JFK and Newark in August 2007 
(the base for initial allocation of slots under the proposal) and found 
none with a population of less 50,000.
    Therefore, the FAA certifies that this proposed rule would not have 
a significant economic impact on a substantial number of small 
entities.

International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the 
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal 
agencies from establishing any standards or engaging in related 
activities that create unnecessary obstacles to the foreign commerce of 
the United States. Pursuant to these Acts, the establishment of 
standards or engaging in related activities is not considered as 
creating unnecessary obstacles to the foreign commerce of the United 
States, so long as the standards and activities have a legitimate 
domestic objective, such the protection of safety, and do not operate 
in a manner that excludes imports that meet this objective. The statute 
also requires consideration of international standards and, where 
appropriate, that they be the basis for U.S. standards. The FAA notes 
the proposed rule to establish slots and limited auctions of slot 
leases at JFK and Newark is necessary for the efficient utilization of 
the national airspace system, and has assessed the effects of this 
rulemaking to ensure that the final rule, if adopted, would not impose 
costs or barriers to international entities within the national 
airspace system.
    Foreign entities at both JFK and Newark would not have any slots 
classified as Limited Slots under either alternative 1 or 2 under the 
terms of Sec.  93.164 of subpart N and Sec.  93.184 of subpart O of the 
proposed rule. Foreign carriers might benefit from the rule if they 
choose to participate in the proposed auction to acquire additional 
slots or to sublease slots in the secondary market.

Unfunded Mandate Assessment

    The Unfunded Mandate Reform Act of 1995 (the Act) is intended, 
among other things, to curb the practice of imposing unfunded Federal 
mandates on State, local, and tribal governments. Title II of the Act 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed or final agency rule 
that may result in an expenditure of $100 million or more (adjusted 
annually for inflation) in any one year by State, local, and tribal 
governments, in the aggregate, or by the private sector; such a mandate 
is deemed to be a ``significant regulatory action.'' The FAA currently 
uses an inflation-adjusted value of $136.1 million in lieu of $100 
million. This final rule does not contain such a mandate. The 
requirements of Title II do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. We determined that this 
action would not have a substantial direct effect 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, and, therefore, would not have federalism implications.

Environmental Analysis

    FAA Order 1050.1E, ``Environmental Impacts: Policies and 
Procedures'' identifies FAA actions that are normally categorically 
excluded from preparation of an environmental assessment or

[[Page 29641]]

environmental impact statement under the National Environmental Policy 
Act (NEPA) in the absence of extraordinary circumstances. The FAA has 
determined that this rulemaking qualifies for the categorical 
exclusions identified in paragraph 312d ``Issuance of regulatory 
documents (e.g., Notices of Proposed Rulemaking and issuance of Final 
Rules) covering administration or procedural requirements (does not 
include Air Traffic procedures; specific Air traffic procedures that 
are categorically excluded are identified under paragraph 311 of this 
Order)'' and paragraph 312f, ``Regulations, standards, and exemptions 
(excluding those which if implemented may cause a significant impact on 
the human environment.)'' It has further been determined that no 
extraordinary circumstances exist that may cause a significant impact 
and therefore no further environmental review is required. The FAA has 
documented this categorical exclusion determination. A copy of the 
determination and underlying documents has been included in the Docket 
for this rulemaking.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this NPRM under Executive Order 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). We have determined that it is not 
a ``significant energy action'' under the executive order because it is 
not a ``significant regulatory action'' under Executive Order 12866, 
and it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

Additional Information

    Comments Invited: The FAA invites interested persons to participate 
in this rulemaking by submitting written comments, data, or views. We 
also invite comments relating to the economic, environmental, energy or 
federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. To ensure the docket does not contain 
duplicate comments, please send only one copy of written comments, or 
if you are filing comments electronically, please submit your comments 
only one time.
    We will file in the docket all comments we receive, as well as a 
report summarizing each substantive public contact with FAA personnel 
concerning this proposed rulemaking. Before acting on this proposal, we 
will consider all comments we receive on or before the closing date for 
comments. We will consider comments filed after the comment period has 
closed if it is possible to do so without incurring expense or delay. 
We may change this proposal in light of the comments we receive.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be 
proprietary or confidential business information. Send or deliver this 
information directly to the person identified in the FOR FURTHER 
INFORMATION CONTACT section of this document. You must mark the 
information that you consider proprietary or confidential. If you send 
the information on a disk or CD ROM, mark the outside of the disk or CD 
ROM and also identify electronically within the disk or CD ROM the 
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information 
filed with a comment, we do not place it in the docket. We hold it in a 
separate file to which the public does not have access, and we place a 
note in the docket that we have received it. If we receive a request to 
examine or copy this information, we treat it as any other request 
under the Freedom of Information Act (5 U.S.C. 552). We process such a 
request under the DOT procedures found in 49 CFR part 7.

Availability of Rulemaking Documents

    You can get an electronic copy of rulemaking documents using the 
Internet by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/; or
    3. Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.
    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the docket number, notice number, or amendment number 
of this rulemaking.
    You may access all documents the FAA considered in developing this 
proposed rule, including economic analyses and technical reports, from 
the internet through the Federal eRulemaking Portal referenced in 
paragraph (1).

List of Subjects in 14 CFR Part 93

    Air traffic control, Airports, Navigation (air).

Proposed Regulatory Text

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend Chapter I of Title 14, Code of Federal 
Regulations, as follows:

PART 93--SPECIAL AIR TRAFFIC RULES

    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.

Proposed Amendment--Alternative 1

    2. Subpart N is added to read as follows:

Subpart N--John F. Kennedy International Airport and Newark Liberty 
International Airport Traffic Rules

Sec.
93.161 Applicability.
93.162 Definitions.
93.163 Slots for scheduled arrivals and departures.
93.164 Categories of slots.
93.165 Initial assignment of slots.
93.166 Assignment of new or returned slots.
93.167 Reversion and withdrawal of slots.
93.168 Sublease and transfer of slots.
93.169 One-for-one trade of slots.
93.170 Minimum usage requirements.
93.171 Unscheduled operations.
93.172 Reporting requirements.
93.173 Administrative provisions.

Subpart N--John F. Kennedy International Airport and Newark Liberty 
International Airport Traffic Rules


Sec.  93.161  Applicability.

    (a) This subpart prescribes the air traffic rules for the arrival 
and departure of aircraft used for scheduled and unscheduled service, 
other than helicopters, at John F. Kennedy International Airport (JFK) 
and Newark Liberty International Airport (Newark).
    (b) This subpart also prescribes procedures for the assignment, 
transfer, sublease and withdrawal of Slots issued by the FAA for 
scheduled operations at JFK and Newark.
    (c) The provisions of this subpart apply to JFK and Newark during 
the hours of 6 a.m. through 10:59 p.m., Eastern Time. No person shall 
operate any scheduled arrival or departure into or out of JFK or Newark 
during such hours without first obtaining a Slot in

[[Page 29642]]

accordance with this subpart. No person shall conduct an Unscheduled 
Operation to or from JFK or Newark during such hours without first 
obtaining a Reservation.
    (d) A U.S. Air Carrier conducting operations solely under another 
Carrier's marketing control with unified inventory control shall not be 
considered a separate Carrier for purposes of this subpart.
    (e) The Slots assigned under this subpart terminate at 11 p.m. on 
March 30, 2019.


Sec.  93.162  Definitions.

    For purposes of this subpart, the following definitions apply:
    Airport Reservation Office (ARO) is an operational unit of the 
FAA's David J. Hurley Air Traffic Control System Command Center. It is 
responsible for the administration of reservations for unscheduled 
operations at JFK and Newark.
    Baseline Operations are those common slots held by a carrier at JFK 
or Newark on [final rule effective date], that do not exceed 20 
operations per day.
    Carrier is a U.S. or foreign air carrier with authority to conduct 
scheduled service under parts 121, 129, or 135 of this chapter and the 
appropriate economic authority for scheduled service under 14 CFR 
chapter II and 49 U.S.C. chapter 411.
    Common Slot (C-slot) is a slot that is assigned by the FAA as a 
lease under its cooperative agreement authority for the length of this 
rule.
    Enhanced Computer Voice Reservation System (e-CVRS) is the system 
used by the FAA to make arrival and/or departure reservations for 
unscheduled operations at JFK, Newark, and other designated airports.
    Limited Slot (L-slot) is a slot operated every day, the lease for 
which expires prior to the expiration of this rule for subsequent award 
by the FAA as an unrestricted slot.
    New Entrant is any carrier that is administratively allocated a 
total of 8 or fewer slots at JFK or Newark, respectively, during 
controlled hours at any point during the duration of the rule.
    Public Charter is defined in 14 CFR 380.2 as a one-way or roundtrip 
charter flight to be performed by one or more direct air carriers that 
is arranged and sponsored by a public charter operator.
    Public Charter Operator is defined in 14 CFR 380.2 as a U.S. or 
foreign public charter operator.
    Reservation is an authorization received by a carrier or other 
operator of an aircraft, excluding helicopters, in accordance with 
procedures established by the FAA to operate an unscheduled arrival or 
departure on a particular day of the week during a specific 30-minute 
period.
    Scheduled Operation is the arrival or departure segment of any 
operation regularly conducted by a carrier between either JFK or Newark 
and another point regularly served by that carrier.
    Slot is the operational authority assigned by the FAA to a carrier 
to conduct one scheduled arrival or departure operation at JFK or 
Newark on a particular day of the week during a specific 30-minute 
period.
    Summer Scheduling Season begins on the last Sunday of March.
    Unrestricted Slot (U-slot) is a slot that is awarded to a carrier 
by the FAA via the auction of a lease.
    Unscheduled Operation is an arrival or departure segment of any 
operation that is not regularly conducted by a carrier or other 
operator of an aircraft, excluding helicopters, between JFK or Newark 
and another service point. The following types of carrier operations 
shall be considered unscheduled operations for the purposes of this 
subpart: Public, on-demand, and other charter flights; hired aircraft 
service; extra sections of scheduled flights; ferry flights; and other 
non-passenger flights.
    Winter Scheduling Season begins on the last Sunday in October.


Sec.  93.163  Slots for scheduled arrivals and departures.

    (a) During the hours of 6 a.m. through 10:59 p.m., Eastern Time, no 
person shall operate any scheduled arrival or departure into or out of 
JFK or Newark without first obtaining a Slot in accordance with this 
subpart.
    (b) Except as otherwise established by the FAA under paragraph (c) 
of this section, the number of Slots shall be limited to no more than 
eighty-one (81) per hour at JFK and eighty-one (81) per hour at Newark. 
At JFK, the number of Slots may not exceed 44 in any 30-minute period, 
and 81 in any 60-minute period. At Newark, the number of Slots may not 
exceed 44 in any 30-minute period and 81 in any 60-minute period. The 
number of arrival and departure Slots in any period may be adjusted by 
the FAA as necessary based on the actual or potential delays created by 
such number or other considerations relating to congestion, airfield 
capacity and the air traffic control system.
    (c) Notwithstanding paragraph (b) of this section, the 
Administrator may increase the number of Slots based on a review of the 
following:
    (1) The number of delays;
    (2) The length of delays;
    (3) On-time arrivals and departures;
    (4) The number of actual operations;
    (5) Runway utilization and capacity plans; and
    (6) Other factors relating to the efficient management of the 
National Airspace System.


Sec.  93.164  Categories of slots.

    (a) General. Each Slot shall be designated as a Common Slot, 
Limited Slot or Unrestricted Slot and shall be assigned to the Carrier 
under a lease agreement. A lease for a Common or Limited Slot shall be 
awarded via a cooperative agreement. A lease for an Unrestricted Slot 
shall be awarded via an auction.
    (b) Common Slots. (1) All Slots within any Carrier's Baseline 
Operations, as determined on [final rule effective date], shall be 
designated as Common Slots.
    (2) Ten percent of the Slots at JFK and Newark on [final rule 
effective date] not otherwise designated as Common Slots under 
paragraph (b)(1) of this section shall be designated as Limited Slots. 
All other Slots shall be designated as Common Slots.
    (c) Limited Slots. Those Slots assigned to a Carrier subject to 
return to the FAA under Sec.  93.165(c) shall be designated as Limited 
Slots until the date of their reassignment by the FAA as Unrestricted 
Slots. A Carrier may continue to use a Limited Slot that has reverted 
to the FAA until the date of the auction.
    (1) Each Carrier with a total number of daily operations at JFK or 
Newark in excess of its Baseline Operations will be notified by [final 
rule effective date] how many of its Slots will be designated as 
Limited Slots pursuant to paragraphs (c)(2) and (3) of this section.
    (2) A Carrier shall designate 50 percent of its Limited Slots. The 
Carrier must notify the FAA of its determination by [date 10 days after 
the final rule effective date].
    (3) The FAA will designate the remaining Limited Slots initially 
excluding those hours in which two or more Slots have been designated 
as Limited Slots by the Carriers.
    (4) No later than [date 20 days after the final rule effective 
date], the FAA will publish a list of all Limited Slots and the dates 
upon which they will expire.
    (d) Unrestricted Slots. Unrestricted Slots are Slots acquired by a 
Carrier through a lease with the FAA awarded via an auction. 
Unrestricted Slots are not subject to withdrawal by the FAA.


Sec.  93.165  Initial assignment of slots.

    (a) Except as provided for under paragraphs (b) and (c) of this 
section,

[[Page 29643]]

any Carrier allocated operating rights under the Order limiting 
operations at JFK or the Order limiting operations at Newark as 
evidenced by the FAA's records, will be assigned corresponding Slots in 
30-minute periods consistent with the limits under Sec.  93.163(b) and 
its summer and winter season schedules as approved by the FAA. If 
necessary, the FAA may utilize administrative measures such as 
voluntary measures or a lottery to re-time the assigned Slots within 
the same hour to meet the 30-minute limits under Sec.  93.163(b). The 
FAA Vice President, System Operations Services, is the final 
decisionmaker for determinations under this section.
    (b) If a Carrier was allocated operating rights under the Order 
limiting operations at JFK or the Order limiting operations at Newark, 
but the operating rights were held by another Carrier, then the 
corresponding Slots will be assigned to the Carrier that held the 
operating rights for that period, as evidenced by the FAA's records.
    (c) Starting [date 35 days after the effective date] and every year 
thereafter through 2013, one-fifth of the total number of Limited Slots 
shall revert to the FAA in accordance with the schedule published under 
Sec.  93.164(c)(4) and be auctioned as Unrestricted Slots by the FAA. 
Any Slot receiving no responsive bids will be retired until the next 
auction. An affected Carrier will be allowed to use the Limited Slot 
until the effective date of an award to a Carrier as an Unrestricted 
Slot.


Sec.  93.166  Assignment of new or returned slots.

    (a) This section describes the process by which the FAA assigns new 
Slots, as well as Slots returned to the FAA pursuant to the provisions 
of Sec.  93.170. These Slots will be assigned by the FAA to requesting 
Carriers for the summer and winter scheduling seasons.
    (b) Requests for the new Slots or returned Slots or both must be 
submitted to the Federal Aviation Administration, Slot Administration 
Office, AGC-200, 800 Independence Avenue, SW., Washington, DC 20591 
(Facsimile: (202) 267-7277; e-mail: [email protected]), by the 
deadline as published by the FAA in a Federal Register notice for each 
Summer and Winter Scheduling Season. The requesting Carrier must submit 
its entire schedule at JFK and Newark for the particular season, noting 
which requests are in addition to, or changes from, the previous 
corresponding season at the respective airports.
    (c) Before assigning new or returned Slots under this section, the 
FAA will first accommodate Carrier requests to retime Slots for 
operational reasons or to bring the flight time closer to the time 
originally requested by the applicant Carrier in previous corresponding 
seasons, as reflected in FAA records.
    (d) After accommodating Carrier requests for retiming of Slots, the 
FAA will assign 50% of the new Slots and returned Slots to New 
Entrants, unless requests by New Entrants constitute fewer than 50% of 
available Slots.
    (e) With the remaining available Slots, if all requests for Slots 
under this section cannot be accommodated, the FAA will give priority 
to requests to introduce year-round service or to extend an existing 
operation to a year-round operation.
    (f) Thereafter, the FAA will assign Slots considering all relevant 
factors including:
    (1) The effective period of operation;
    (2) The extent and regularity of intended use of a Slot;
    (3) Schedule constraints of Carriers requesting Slots.


Sec.  93.167  Reversion and withdrawal of slots.

    (a) This section does not apply to Unrestricted Slots.
    (b) A Carrier's Common Slots or Limited Slots at JFK or Newark 
revert back to the FAA 30 days after the Carrier has ceased all 
operations at the respective airport(s) for any reasons other than a 
strike.
    (c) The FAA may retime, withdraw, or temporarily suspend Common 
Slots and Limited Slots at any time to fulfill operational needs.
    (d) Common Slots and Limited Slots will be withdrawn in accordance 
with the priority list established under Sec.  93.173 and international 
obligations.
    (e) Except as otherwise provided in paragraph (a) of this section, 
the FAA will notify an affected Carrier before withdrawing or 
temporarily suspending a Common Slot or Limited Slot and specify the 
date by which operations under the Common Slot or Limited Slot must 
cease. The FAA will provide at least 45 days' notice unless otherwise 
required by operational needs.
    (f) Any Common Slot or Limited Slot that is temporarily withdrawn 
under this paragraph will be reassigned, if at all, only to the Carrier 
from which it was withdrawn, provided the Carrier continues to conduct 
Scheduled Operations at the respective airport.


Sec.  93.168  Sublease and transfer of slots.

    (a) A Carrier may sublease its Slots to another Carrier in 
accordance with this section and subject to the provisions of the 
Carrier's lease agreement with the FAA.
    (b) A Carrier must provide notice to the FAA to sublease a Slot. 
Such notice must contain: the Slot number and time, effective dates 
and, if appropriate, the duration of the lease. The Carrier may also 
provide the FAA with a minimum bid price.
    (c) The FAA will post a notice of the offer to sublease the Slot 
and relevant details on the FAA Web site at http://www.faa.gov. An 
opening date, closing date and time by which bids must be received will 
be provided.
    (d) Upon consummation of the transaction, written evidence of each 
Carrier's consent to sublease must be provided to the FAA, as well as 
all bids received and the terms of the sublease, including but not 
limited to:
    (1) The names of all bidders and all parties to the transaction;
    (2) The offered and final length of the sublease;
    (3) The consideration offered by all bidders and provided by the 
sublessee.
    (e) The Slot may not be used until the conditions of paragraph (d) 
of this section have been met, and the FAA provides notice of its 
approval of the sublease.
    (f) Slots may be transferred among a U.S. Air Carrier and another 
Carrier that conducts operations at JFK or Newark solely under the 
transferring Carrier's marketing control, including the entire 
inventory of the flight. Each party to such transfer must provide 
written evidence of its consent to the transfer and the FAA must 
confirm and approve these transfers in writing prior to the effective 
date of the transaction. However, the FAA will approve transfers under 
this paragraph up to five business days after the actual operation to 
accommodate operational disruptions that occur on the same day of the 
scheduled operation. The FAA Vice President, System Operations Services 
is the final decision-maker for any determinations under this section.
    (g) A Carrier wishing to sublease a Slot via an FAA auction, rather 
than pursuant to this section, may do so. The Carrier shall retain the 
proceeds and the Slot shall retain the same designation that it had 
prior to the Carrier placing it up for auction.


Sec.  93.169  One-for-one trade of slots.

    (a) A Carrier may trade a Slot with another Carrier on a one-for-
one basis.
    (b) Written evidence of each Carrier's consent to the trade must be 
provided to the FAA.
    (c) Each recipient of the trade may not use the acquired Slot until 
written confirmation has been received from the FAA.

[[Page 29644]]

    (d) Carriers participating in a one-for-one trade must certify to 
the FAA that no consideration or promise of consideration was provided 
by either party to the trade.


Sec.  93.170  Minimum usage requirements.

    (a) This section does not apply to Unrestricted Slots.
    (b) Any Common Slot or Limited Slot included in a summer or winter 
season schedule approved by the FAA that is not used at least 80 
percent of the time during the period for which it is assigned will be 
withdrawn by the FAA.
    (c) Paragraph (b) of this section does not apply to the first 90-
day period after assignment of a Common Slot or Limited Slot through a 
sublease.
    (d) The FAA may waive the requirements of paragraph (b) of this 
section in the event of a highly unusual and unpredictable condition 
which is beyond the control of the Carrier and which affects Carrier 
operations for a period of five or more consecutive days. Examples of 
conditions which could justify a waiver under this paragraph are 
weather conditions that result in the restricted operation of the 
airport for an extended period of time or the grounding of an aircraft 
type.
    (e) The FAA will treat as used any Common Slot or Limited Slot held 
by a Carrier on Thanksgiving Day, the Friday following Thanksgiving 
Day, and the period from December 24 through the first Sunday of 
January.


Sec.  93.171  Unscheduled operations.

    (a) During the hours of 6 a.m. through 10:59 p.m. Eastern Time, no 
person may operate an aircraft other than a helicopter to or from JFK 
or Newark unless he or she has received, for that Unscheduled 
Operation, a Reservation that is assigned by the Airport Reservation 
Office (ARO) or in the case of Public Charters, in accordance with the 
procedures in paragraph (d) of this section. Requests for Reservations 
will be accepted through the e-CVRS beginning 72 hours prior to the 
proposed time of arrival to or departure from JFK or Newark. Additional 
information on procedures for obtaining a Reservation is available on 
the Internet at http://www.fly.faa.gov/ecvrs.
    (b) Reservations, including those assigned to Public Charter 
operations under paragraph (d) of this section, will be available to be 
assigned by the ARO on a 30-minute basis as follows:
    (1) At JFK, two Reservations per hour between 6 a.m. and 1:59 p.m. 
and between 10 p.m. and 10:59 p.m. and one Reservation per hour between 
2 p.m. and 10:59 p.m.
    (2) At Newark, two Reservations per hour between 6 a.m. and 11:59 
a.m. and between 10 p.m. and 10:59 p.m. and one Reservation per hour 
between 12 noon and 9:59 p.m.
    (c) The ARO will receive and process all Reservation requests for 
unscheduled arrivals and departures at JFK and Newark. Reservations are 
assigned on a ``first-come, first-served'' basis determined by the time 
the request is received at the ARO. Reservations must be cancelled if 
they will not be used as assigned.
    (d) One Reservation per hour will be available for assignment to 
Public Charter operations prior to the 72-hour Reservation window in 
paragraph (a) of this section. No more than 25 percent of the 
Reservation available from 12 noon through 9:59 p.m. will be made 
available to Public Charter operations under this paragraph.
    (1) The Public Charter operator may request a reservation up to six 
months in advance of the date of the flight operation. Reservation 
requests should be submitted to Federal Aviation Administration, Slot 
Administration Office, AGC-200, 800 Independence Avenue, SW., 
Washington, DC 20591. Submissions may be made via facsimile to (202) 
267-7277 or by e-mail to: [email protected].
    (2) The Public Charter operator must certify that its prospectus 
has been accepted by the Department of Transportation in accordance 
with 14 CFR part 380.
    (3) The Public Charter operator must identify the call sign/flight 
number or aircraft registration number of the direct Air Carrier, the 
date and time of the proposed operation(s), the airport served 
immediately prior to or after JFK or Newark, aircraft type, and the 
nature of the operation (e.g., ferry or passenger). Any changes to an 
approved Reservation must be approved in advance by the Slot 
Administration Office.
    (4) If Reservations under paragraph (d)(1) of this section have 
already been assigned, the Public Charter Operator may request a 
Reservation under paragraph (a) of this section.
    (e) The filing of a request for a Reservation does not constitute 
the filing of an IFR flight plan as required by regulation. The IFR 
flight plan may be filed only after the Reservation is obtained, must 
include the Reservation number in the ``Remarks'' section, and must be 
filed in accordance with FAA regulations and procedures.
    (f) Air Traffic Control will accommodate declared emergencies 
without regard to Reservations. Non-emergency flights in direct support 
of national security, law enforcement, military aircraft operations, or 
public-use aircraft operations may be accommodated above the 
Reservation limits with the prior approval of the Vice President, 
System Operations Services, Air Traffic Organization. Procedures for 
obtaining the appropriate waiver will be available on the Internet at 
http://www.fly.faa.gov/ecvrs.
    (g) Notwithstanding the limits in paragraph (b) of this section, if 
the Air Traffic Organization determines that air traffic control, 
weather and capacity conditions are favorable and significant delay is 
unlikely, the FAA may determine that additional Reservations may be 
accommodated for a specific time period. Unused Slots may also be made 
available temporarily for unscheduled operations. Reservations for 
additional operations must be obtained through the ARO.
    (h) Reservations may not be bought, sold or leased.


Sec.  93.172  Reporting requirements.

    (a) No later than September 1 for the summer scheduling season and 
February 1 for the winter scheduling season, each Carrier holding a 
Common Slot or Limited Slot must submit an interim report of Slot usage 
for each day of the applicable scheduling season. No later than 30 days 
after the last day of the applicable scheduling season, each Carrier 
holding a Common Slot or Limited Slot must submit a final report of the 
completed operations for each day of the entire scheduling season.
    (b) Such reports, in a format acceptable to the FAA, must contain 
the following information for each Common Slot or Limited Slot:
    (1) The Slot number, time, and arrival or departure designation;
    (2) The operating Carrier;
    (3) The date and time of each of the operations conducted pursuant 
to the Slot, including the flight number and origin/destination; and
    (4) The aircraft type identifier.
    (c) The FAA may withdraw the Slot of any Carrier that does not meet 
the reporting requirements of paragraph (a) of this section.


Sec.  93.173  Administrative provisions.

    (a) Each Slot shall be assigned a number for administrative 
convenience.
    (b) The FAA will assign priority numbers by random lottery for 
Common Slots and Limited Slots at JFK and Newark. Each Common Slot and 
Limited Slot will be assigned a withdrawal priority number, and the 30-
minute time period for the Common Slot or Limited Slot, frequency, and 
the arrival or departure designation.

[[Page 29645]]

    (c) If the FAA determines that operations need to be reduced for 
operational reasons, the lowest assigned priority number Common Slot or 
Limited Slot will be the last withdrawn.
    (d) Any Slot available on a temporary basis may be assigned by the 
FAA to a Carrier on a non-permanent, first-come, first-served basis 
subject to permanent assignment under this subpart. Any remaining Slots 
may be made available for unscheduled operations on a non-permanent 
basis and will be assigned under the same procedures applicable to 
other operating Reservations.
    (e) All transactions under this subpart must be in a written or 
electronic format approved by the FAA.

Proposed Amendment--Alternative 2

    3. Subparts N and O are added to read as follows:
Subpart N--John F. Kennedy International Airport Traffic Rules
Sec.
93.161 Applicability.
93.162 Definitions.
93.163 Slots for scheduled arrivals and departures.
93.164 Categories of slots.
93.165 Initial assignment of slots.
93.166 Assignment of new or returned slots.
93.167 Reversion and Withdrawal of Slots.
93.168 Sublease and transfer of slots.
93.169 One-for-one trade of slots.
93.170 Minimum usage requirements.
93.171 Unscheduled operations.
93.172 Reporting requirements.
93.173 Administrative provisions.
Subpart O--Newark Liberty International Airport Traffic Rules
93.181 Applicability.
93.182 Definitions.
93.183 Slots for scheduled arrivals and departures.
93.184 Categories of slots.
93.185 Initial assignment of slots.
93.186 Assignment of new or returned slots.
93.187 Reversion and withdrawal of slots.
93.188 Sublease and transfer of slots.
93.189 One-for-one trade of slots.
93.190 Minimum usage requirements.
93.191 Unscheduled operations.
93.192 Reporting requirements.
93.193 Administrative provisions.


Sec.  93.161  Applicability.

    (a) This subpart prescribes the air traffic rules for the arrival 
and departure of aircraft used for scheduled and unscheduled service, 
other than helicopters, at John F. Kennedy International Airport (JFK).
    (b) This subpart also prescribes procedures for the assignment, 
transfer, sublease and withdrawal of Slots issued by the FAA for 
scheduled operations at JFK.
    (c) The provisions of this subpart apply to JFK during the hours of 
6 a.m. through 10:59 p.m., Eastern Time. No person shall operate any 
scheduled arrival or departure into or out of JFK during such hours 
without first obtaining a Slot in accordance with this subpart. No 
person shall conduct an Unscheduled Operation to or from JFK during 
such hours without first obtaining a Reservation.
    (d) A U.S. Air Carrier conducting operations solely under another 
Carrier's marketing control with unified inventory control shall not be 
considered a separate Carrier for purposes of this subpart.
    (e) The Slots assigned under this subpart terminate at 11 p.m. on 
March 30, 2019.


Sec.  93.162  Definitions.

    For purposes of this subpart, the following definitions apply:
    Airport Reservation Office (ARO) is an operational unit of the 
FAA's David J. Hurley Air Traffic Control System Command Center. It is 
responsible for the administration of reservations for unscheduled 
operations at JFK.
    Baseline Operations are those common slots held by a carrier on 
[final rule effective date], that do not exceed 20 operations per day.
    Carrier is a U.S or foreign air carrier with authority to conduct 
scheduled service under Parts 121, 129, or 135 of this Chapter and the 
appropriate economic authority for scheduled service under 14 CFR 
chapter II and 49 U.S.C. chapter 411.
    Common Slot (C-slot) is a slot that is assigned by the FAA as a 
lease under its cooperative agreement authority for the length of this 
rule.
    Enhanced Computer Voice Reservation System (e-CVRS) is the system 
used by the FAA to make arrival and/or departure reservations for 
unscheduled operations at JFK and other designated airports.
    Limited Slot (L-slot) is a slot operated every day, the lease for 
which must be transferred to another carrier by the holder of the 
limited slot as an unrestricted slot.
    New Entrant is any carrier that is administratively allocated a 
total of 8 or fewer slots at JFK during controlled hours at any point 
during the duration of the rule.
    Public Charter is defined in 14 CFR 380.2 as a one-way or roundtrip 
charter flight to be performed by one or more direct air carriers that 
is arranged and sponsored by a public charter operator.
    Public Charter Operator is defined in 14 CFR 380.2 as a U.S. or 
foreign public charter operator.
    Reservation is an authorization received by a carrier or other 
operator of an aircraft, excluding helicopters, in accordance with 
procedures established by the FAA to operate an unscheduled arrival or 
departure on a particular day of the week during a specific 30-minute 
period.
    Scheduled Operation is the arrival or departure segment of any 
operation regularly conducted by a carrier between JFK and another 
point regularly served by that carrier.
    Slot is the operational authority assigned by the FAA to a carrier 
to conduct one scheduled arrival or departure operation at JFK on a 
particular day of the week during a specific 30-minute period.
    Summer Scheduling Season begins on the last Sunday of March.
    Unrestricted Slot (U-slot) is a slot that is awarded to another 
carrier by the holder of a limited slot pursuant to the mandatory lease 
transfer provisions of this subpart.
    Unscheduled Operation is an arrival or departure segment of any 
operation that is not regularly conducted by a carrier or other 
operator of an aircraft, excluding helicopters, between JFK and another 
service point. The following types of carrier operations shall be 
considered unscheduled operations for the purposes of this subpart: 
public, on-demand, and other charter flights; hired aircraft service; 
extra sections of scheduled flights; ferry flights; and other non-
passenger flights.
    Winter Scheduling Season begins on the last Sunday in October.


Sec.  93.163  Slots for scheduled arrivals and departures.

    (a) During the hours of 6 a.m. through 10:59 p.m., Eastern Time, no 
person shall operate any scheduled arrival or departure into or out of 
JFK during such hours without first obtaining a Slot in accordance with 
this subpart.
    (b) Except as otherwise established by the FAA under paragraph (c) 
of this section, the number of Slots shall be limited to no more than 
eighty-one (81) per hour at JFK. The number of Slots may not exceed 44 
in any 30-minute period, and 81 in any 60-minute period. The number of 
arrival and departure Slots in any period may be adjusted by the FAA as 
necessary based on the actual or potential delays created by such 
number or other considerations relating to congestion, airfield 
capacity and the air traffic control system.
    (c) Notwithstanding paragraph (b) of this section, the 
Administrator may increase the number of Slots based on a review of the 
following:
    (1) The number of delays;
    (2) The length of delays;
    (3) On-time arrivals and departures;
    (4) The number of actual operations;

[[Page 29646]]

    (5) Runway utilization and capacity plans; and
    (6) Other factors relating to the efficient management of the 
National Airspace System.


Sec.  93.164  Categories of slots.

    (a) General. Each Slot shall be designated as a Common Slot, 
Limited Slot or Unrestricted Slot and shall be assigned to the Carrier 
under a lease agreement. A lease for a Common or Limited Slot shall be 
awarded via a cooperative agreement. A lease for an Unrestricted Slot 
shall be awarded via an auction.
    (b) Common Slots.
    (1) All Slots within any Carrier's Baseline Operations, as 
determined on [final rule effective date], shall be designated as 
Common Slots.
    (2) Twenty percent of the Slots at JFK on [final rule effective 
date] not otherwise designated as Common Slots under paragraph (b) (1) 
of this section shall be designated as Limited Slots. All other Slots 
shall be designated as Common Slots.
    (c) Limited Slots. Those Slots assigned to a Carrier subject to 
return to the FAA under Sec.  93.165(c) shall be designated as Limited 
Slots until they are transferred to another Carrier under those 
provisions. A Carrier may continue to use a Limited Slot that has 
reverted to the FAA until reassigned to another Carrier as an 
Unrestricted Slot.
    (1) Each Carrier with a total number of daily operations at JFK in 
excess of its Baseline Operations will be notified by [final rule 
effective date] how many of its remaining Slots will be classified as 
Limited Slots pursuant to paragraphs (c)(2) and (3) of this section.
    (2) A Carrier shall designate 50 percent of its Limited Slots. The 
Carrier must notify the FAA of its determination by [date 10 days after 
the final rule effective date].
    (3) The FAA will designate the remaining Limited Slots, initially 
excluding those hours in which two or more Slots have been designated 
as Limited Slots by the Carriers.
    (4) No later than [date 20 days after the final rule effective 
date], the FAA will publish a list of all Limited Slots and the dates 
upon which they will expire.
    (d) Unrestricted Slots. Unrestricted Slots are Slots acquired by a 
Carrier through a lease with the FAA awarded via an auction. 
Unrestricted Slots are not subject to withdrawal by the FAA.


Sec.  93.165  Initial assignment of slots.

    (a) Except as provided for under paragraphs (b) and (c) of this 
section, any Carrier allocated operating rights under the Order 
limiting operations at JFK, as evidenced by the FAA's records, will be 
assigned corresponding Slots in 30-minute periods consistent with the 
limits under Sec.  93.163(b), and its summer and winter season 
schedules as approved by the FAA. If necessary, the FAA may utilize 
administrative measures such as voluntary measures or a lottery to re-
time the assigned Slots within the same hour to meet the 30-minute 
limits under Sec.  93.163(b). The FAA Vice President, System Operations 
Services, is the final decisionmaker for determinations under this 
section.
    (b) If a Carrier was allocated operating rights under the Order 
limiting operations at JFK but the operating rights were held by 
another Carrier, then the corresponding Slots will be assigned to the 
Carrier that held the operating rights for that period, as evidenced by 
the FAA's records.
    (c) Starting [date 35 days after the effective date] and every year 
thereafter through 2013, one-fifth of the total number of Limited Slots 
identified on [date 20 days after the effective date] shall revert to 
the FAA in accordance with the schedule published under Sec.  
93.164(c)(4) and be auctioned as Unrestricted Slots by the FAA and 
subsequently transferred to another Carrier, effective no later than 
the next Summer Scheduling Season.
    (1) The auction shall be blind, and only cash may be bid.
    (2) The holder of a Limited Slot may not bid on its own Slots.
    (3) The FAA shall pay to the holder of the Limited Slot all 
proceeds from the transaction following deduction of the FAA's expenses 
for conducting the auction.
    (4) The auction shall be conducted by the FAA, which will dictate 
all procedures related to the auction, including but not limited to the 
requirement that the Carrier may not specify a minimum bid price.
    (5) In the event no Carrier bids on the Slot, the FAA will retire 
it until the next auction.
    (6) The Carrier holding a Limited Slot will be allowed to use the 
Slot until the first day of the next Summer Scheduling Season.


Sec.  93.166  Assignment of new or returned slots.

    (a) This section describes the process by which the FAA assigns new 
Slots, as well as Slots returned to the FAA pursuant to the provisions 
of Sec.  93.170. These Slots will be assigned by the FAA to requesting 
Carriers for the Summer and Winter Scheduling Seasons.
    (b) Requests for the new Slots or returned Slots or both must be 
submitted to the Federal Aviation Administration, Slot Administration 
Office, AGC-200, 800 Independence Avenue, SW., Washington, DC 20591 
(Facsimile: (202) 267-7277; e-mail: [email protected]), by the 
deadline as published by the FAA in a Federal Register notice for each 
Summer and Winter Scheduling Season. The requesting Carrier must submit 
its entire schedule at JFK for the particular season, noting which 
requests are in addition to, or changes from, the previous 
corresponding season at the respective airports.
    (c) Before assigning new or returned Slots under this section, the 
FAA will first accommodate Carrier requests to re-time Slots for 
operational reasons or to bring the flight time closer to the time 
originally requested by the applicant Carrier in previous corresponding 
seasons, as reflected in FAA records.
    (d) After accommodating Carrier requests for re-timing of Slots, 
the FAA will assign 50% of the new Slots and returned Slots to New 
Entrants, unless requests by New Entrants constitute fewer than 50% of 
available Slots.
    (e) With the remaining available Slots, if all requests for Slots 
under this section cannot be accommodated, the FAA will give priority 
to requests to introduce year-round service or to extend an existing 
operation to a year-round operation.
    (f) Thereafter, the FAA will assign Slots considering all relevant 
factors including:
    (1) The effective period of operation;
    (2) The extent and regularity of intended use of a Slot;
    (3) Schedule constraints of Carriers requesting Slots.


Sec.  93.167  Reversion and withdrawal of slots.

    (a) This section does not apply to Unrestricted Slots.
    (b) A Carrier's Common Slots or Limited Slots revert back to the 
FAA 30 days after the Carrier has ceased all operations at JFK for any 
reasons other than a strike.
    (c) The FAA may re-time, withdraw, or temporarily suspend Common 
Slots and Limited Slots at any time to fulfill operational needs.
    (d) Common Slots and Limited Slots will be withdrawn in accordance 
with the priority list established under Sec.  93.173 and international 
obligations.
    (e) Except as otherwise provided in paragraph (a) of this section, 
the FAA will notify an affected Carrier before withdrawing or 
temporarily suspending a Common Slot or Limited Slot and specify the 
date by which operations under the Common Slot or Limited Slot

[[Page 29647]]

must cease. The FAA will provide at least 45 days' notice unless 
otherwise required by operational needs.
    (f) Any Common Slot or Limited Slot that is temporarily withdrawn 
under this paragraph will be reassigned, if at all, only to the Carrier 
from which it was withdrawn, provided the Carrier continues to conduct 
Scheduled Operations at JFK.


Sec.  93.168  Sublease and transfer of slots.

    (a) A Carrier may sublease its Slots to another Carrier in 
accordance with this section and subject to the provisions of the 
Carrier's lease agreement with the FAA.
    (b) A Carrier must provide notice to the FAA to sublease a Slot. 
Such notice must contain: the Slot number and time, effective dates 
and, if appropriate, the duration of the lease. The Carrier may also 
provide the FAA with a minimum bid price.
    (c) The FAA will post a notice of the offer to sublease the Slot 
and relevant details on the FAA Web site at http://www.faa.gov. An 
opening date, closing date and time by which bids must be received will 
be provided.
    (d) Upon consummation of the transaction, written evidence of each 
Carrier's consent to sublease must be provided to the FAA, as well as 
all bids received and the terms of the sublease, including but not 
limited to:
    (1) The names of all bidders and all parties to the transaction;
    (2) The offered and final length of the sublease;
    (3) The consideration offered by all bidders and provided by the 
sublessee.
    (e) The Slot may not be used until the conditions of paragraph (d) 
of this section have been met, and the FAA provides notice of its 
approval of the sublease.
    (f) Slots may be transferred among a U.S. Air Carrier and another 
Carrier that conducts operations at JFK solely under the transferring 
Carrier's marketing control, including the entire inventory of the 
flight. Each party to such transfer must provide written evidence of 
its consent to the transfer and the FAA must confirm and approve these 
transfers in writing prior to the effective date of the transaction. 
However, the FAA will approve transfers under this paragraph up to five 
business days after the actual operation to accommodate operational 
disruptions that occur on the same day of the scheduled operation. The 
FAA Vice President, System Operations Services, is the final decision-
maker for any determinations under this section.
    (g) A Carrier wishing to sublease a Slot via an FAA auction, rather 
than pursuant to this section, may do so. The Carrier shall retain the 
proceeds and the Slot shall retain the same designation that it had 
prior to the Carrier placing it up for auction.


Sec.  93.169  One-for-one trade of slots.

    (a) A Carrier may trade a Slot with another Carrier on a one-for-
one basis.
    (b) Written evidence of each Carrier's consent to the trade must be 
provided to the FAA.
    (c) Each recipient of the trade may not use the acquired Slot until 
written confirmation has been received from the FAA.
    (d) Carriers participating in a one-for-one trade must certify to 
the FAA that no consideration or promise of consideration was provided 
by either party to the trade.


Sec.  93.170  Minimum usage requirements.

    (a) This section does not apply to Unrestricted Slots.
    (b) Any Common Slot or Limited Slot included in a summer or winter 
season schedule approved by the FAA that is not used at least 80 
percent of the time during the period for which it is assigned will be 
withdrawn by the FAA.
    (c) Paragraph (b) of this section does not apply to the first 90-
day period after assignment of a Common Slot or Limited Slot through a 
sublease.
    (d) The FAA may waive the requirements of paragraph (b) of this 
section in the event of a highly unusual and unpredictable condition 
which is beyond the control of the Carrier and which affects Carrier 
operations for a period of five or more consecutive days. Examples of 
conditions which could justify a waiver under this paragraph are 
weather conditions that result in the restricted operation of the 
airport for an extended period of time or the grounding of an aircraft 
type.
    (e) The FAA will treat as used any Common Slot or Limited Slot held 
by a Carrier on Thanksgiving Day, the Friday following Thanksgiving 
Day, and the period from December 24 through the first Sunday of 
January.


Sec.  93.171  Unscheduled operations.

    (a) During the hours of 6 a.m. through 10:59 p.m., Eastern Time, no 
person may operate an aircraft other than a helicopter to or from JFK 
unless he or she has received, for that Unscheduled Operation, a 
Reservation that is assigned by the Airport Reservation Office (ARO) or 
in the case of public charters, in accordance with the procedures in 
paragraph (d) of this section. Requests for Reservations will be 
accepted through the e-CVRS beginning 72 hours prior to the proposed 
time of arrival to or departure from JFK. Additional information on 
procedures for obtaining a Reservation is available on the Internet at 
http://www.fly.faa.gov/ecvrs.
    (b) Reservations, including those assigned to Public Charter 
operations under paragraph (d) of this section, will be available to be 
assigned by the ARO on a 30-minute basis at JFK as follows:
    (1) Two Reservations per hour between 6 a.m. and 1:59 p.m. and 
between 10 p.m. and 10:59 p.m.
    (2) One Reservation per hour between 2 p.m. and 10:59 p.m.
    (c) The ARO will receive and process all Reservation requests for 
unscheduled arrivals and departures at JFK. Reservations are assigned 
on a ``first-come, first-served'' basis determined by the time the 
request is received at the ARO. Reservations must be cancelled if they 
will not be used as assigned.
    (d) One Reservation per hour will be available for assignment to 
Public Charter operations prior to the 72-hour Reservation window in 
paragraph (a) of this section. No more than 25 percent of the 
reservations from 12 noon through 9:59 p.m. will be made available for 
Public Charter operations under this paragraph.
    (1) The Public Charter Operator may request a reservation up to six 
months in advance of date of the flight operation. Reservation requests 
should be submitted to Federal Aviation Administration, Slot 
Administration Office, AGC-200, 800 Independence Avenue, SW., 
Washington, DC 20591. Submissions may be made via facsimile to (202) 
267-7277 or by e-mail to: [email protected].
    (2) The Public Charter operator must certify that its prospectus 
has been accepted by the Department of Transportation in accordance 
with 14 CFR part 380.
    (3) The Public Charter operator must identify the call sign/flight 
number or aircraft registration number of the direct Air Carrier, the 
date and time of the proposed operations(s), the airport served 
immediately prior to or after JFK, aircraft type, and the nature of the 
operations (e.g., ferry, passenger). Any changes to an approved 
Reservation must be approved in advance by the Slot Administration 
Office.
    (4) If Reservations under paragraph (d)(1) of this section have 
already been assigned, the Public Charter Operator may request a 
Reservation under paragraph (a) of this section.
    (e) The filing of a request for a Reservation does not constitute 
the filing of an IFR flight plan as required by regulation. The IFR 
flight plan may be filed only after the Reservation is obtained, must 
include the Reservation

[[Page 29648]]

number in the ``Remarks'' section, and must be filed in accordance with 
FAA regulations and procedures.
    (f) Air Traffic Control will accommodate declared emergencies 
without regard to Reservations. Non-emergency flights in direct support 
of national security, law enforcement, military aircraft operations, or 
public-use aircraft operations may be accommodated above the 
Reservation limits with the prior approval of the Vice President, 
System Operations Services, Air Traffic Organization. Procedures for 
obtaining the appropriate waiver will be available on the Internet at 
http://www.fly.faa.gov/ecvrs.
    (g) Notwithstanding the limits in paragraph (b) of this section, if 
the Air Traffic Organization determines that air traffic control, 
weather and capacity conditions are favorable and significant delay is 
unlikely, the FAA may determine that additional Reservations may be 
accommodated for a specific time period. Unused Slots may also be made 
available temporarily for unscheduled operations. Reservations for 
additional operations must be obtained through the ARO.
    (h) Reservations may not be bought, sold or leased.


Sec.  93.172  Reporting requirements.

    (a) No later than September 1 for the Summer Scheduling season and 
February 1 for the Winter Scheduling Season, each Carrier holding a 
Common Slot or Limited Slot must submit an interim report of Slot usage 
for each day of the applicable scheduling season. No later than 30 days 
after the last day of the applicable scheduling season, each Carrier 
holding a Common Slot or Limited Slot must submit a final report of the 
completed operations for each day of the entire scheduling season.
    (b) Such reports, in a format acceptable to the FAA, must contain 
the following information for each Common Slot or Limited Slot:
    (1) The Slot number, time, and arrival or departure designation;
    (2) The operating Carrier;
    (3) The date and time of each of the operations conducted pursuant 
to the Slot, including the flight number and origin/destination; and
    (4) The aircraft type identifier.
    (c) The FAA may withdraw the Slot of any Carrier that does not meet 
the reporting requirements of paragraph (a) of this section.


Sec.  93.173  Administrative provisions.

    (a) Each Slot shall be assigned a number for administrative 
convenience.
    (b) The FAA will assign priority numbers by random lottery for 
Common Slots and Limited Slots at JFK. Each Common Slot and Limited 
Slot will be assigned a withdrawal priority number, and the 30-minute 
time period for the Common Slot or Limited Slot, frequency, and the 
arrival or departure designation.
    (c) If the FAA determines that operations need to be reduced for 
operational reasons, the lowest assigned priority number Common Slot or 
Limited Slot will be the last withdrawn.
    (d) Any Slot available on a temporary basis may be assigned by the 
FAA to a Carrier on a non-permanent, first-come, first-served basis 
subject to permanent assignment under this subpart. Any remaining Slots 
may be made available for unscheduled operations on a non-permanent 
basis and will be assigned under the same procedures applicable to 
other operating Reservations.
    (e) All transactions under this subpart must be in a written or 
electronic format approved by the FAA.

Subpart O--Newark Liberty International Airport Traffic Rules


Sec.  93.181  Applicability.

    (a) This subpart prescribes the air traffic rules for the arrival 
and departure of aircraft used for scheduled and unscheduled service, 
other than helicopters, at Newark Liberty International Airport 
(Newark).
    (b) This subpart also prescribes procedures for the assignment, 
transfer, sublease and withdrawal of Slots issued by the FAA for 
scheduled operations at Newark.
    (c) The provisions of this subpart apply to Newark during the hours 
of 6 a.m. through 10:59 p.m., Eastern Time. No person shall operate any 
scheduled arrival or departure into or out of Newark during such hours 
without first obtaining a Slot in accordance with this subpart. No 
person shall conduct an Unscheduled Operation to or from Newark during 
such hours without first obtaining a Reservation.
    (d) A U.S. Air Carrier conducting operations solely under anther 
Carrier's marketing control with unified inventory control shall not be 
considered as a separate Carrier for purposes of this rule.
    (e) The Slots assigned under this subpart terminate at 11 p.m. on 
March 30, 2019.


Sec.  93.182  Definitions.

    For purposes of this subpart, the following definitions apply:
    Airport Reservation Office (ARO) is an operational unit of the 
FAA's David J. Hurley Air Traffic Control System Command Center. It is 
responsible for the administration of reservations for unscheduled 
operations at Newark.
    Baseline Operations are those Common Slots held by a carrier on 
[final rule effective date], that do not exceed 20 operations per day.
    Carrier is a U.S or foreign air carrier with authority to conduct 
scheduled service under Parts 121, 129, or 135 of this Chapter and the 
appropriate economic authority for scheduled service under 14 CFR 
chapter II and 49 U.S.C. chapter 411.
    Common Slot (C-slot) is a slot that is assigned by the FAA as a 
lease under its cooperative agreement authority for the length of this 
rule.
    Enhanced Computer Voice Reservation System (e-CVRS) is the system 
used by the FAA to make arrival and/or departure reservations for 
unscheduled operations at Newark and other designated airports.
    Limited Slot (L-slot) is a slot operated every day, the lease for 
which expires prior to the expiration of this rule for subsequent award 
by the FAA as an unrestricted slot.
    New Entrant is any carrier that is administratively allocated a 
total of 8 or fewer slots at either JFK or Newark during controlled 
hours at any point during the duration of the rule.
    Public Charter is defined in 14 CFR 380.2 as a one-way or roundtrip 
charter flight to be performed by one or more direct air carriers that 
is arranged and sponsored by a public charter operator.
    Public Charter Operator is defined in 14 CFR 380.2 as a U.S. or 
foreign public charter operator.
    Reservation is an authorization received by a carrier or other 
operator of an aircraft, excluding helicopters, in accordance with 
procedures established by the FAA to operate an unscheduled arrival or 
departure on a particular day of the week during a specific 30-minute 
period.
    Scheduled Operation is the arrival or departure segment of any 
operation regularly conducted by a carrier between Newark and another 
point regularly served by that carrier.
    Slot is the operational authority assigned by the FAA to a carrier 
to conduct one scheduled arrival or departure operation at Newark on a 
particular day of the week during a specific 30-minute period.
    Summer Scheduling Season begins on the last Sunday of March.
    Unrestricted Slot (U-slot) is a slot that is awarded to a carrier 
by the FAA via the auction of a lease.
    Unscheduled Operation is an arrival or departure segment of any 
operation that is not regularly conducted by a carrier or other 
operator of an aircraft,

[[Page 29649]]

excluding helicopters, between Newark and another service point. The 
following types of carrier operations shall be considered unscheduled 
operations for the purposes of this rule: public, on-demand, and other 
charter flights; hired aircraft service; extra sections of scheduled 
flights; ferry flights; and other non-passenger flights.
    Winter Scheduling Season begins on the last Sunday in October.


Sec.  93.183  Slots for scheduled arrivals and departures.

    (a) During the hours of 6 a.m. through 10:59 p.m., Eastern Time, no 
person shall operate any scheduled arrival or departure into or out of 
Newark without first obtaining a Slot in accordance with this subpart.
    (b) Except as otherwise established by the FAA under paragraph (c) 
of this section, the number of Slots shall be limited to no more than 
eighty-one (81) period at Newark. The number of Slots may not exceed 44 
in any 30-minute period and 81 in any 60-minute period. The number of 
arrival and departure Slots in any period may be adjusted by the FAA as 
necessary based on the actual or potential delays created by such 
number or other considerations relating to congestion, airfield 
capacity and the air traffic control system.
    (c) Notwithstanding paragraph (b) of this section, the 
Administrator may increase the number of Slots based on a review of the 
following:
    (1) The number of delays;
    (2) The length of delays;
    (3) On-time arrivals and departures;
    (4) The number of actual operations;
    (5) Runway utilization and capacity plans; and
    (6) Other factors relating to the efficient management of the 
National Airspace System.


Sec.  93.184  Categories of slots.

    (a) General. Each Slot shall be designated as a Common Slot, 
Limited Slot or Unrestricted Slot and shall be assigned to the Carrier 
under a lease agreement. A lease for a Common or Limited Slot shall be 
awarded via a cooperative agreement. A lease for an Unrestricted Slot 
shall be awarded via an auction.
    (b) Common Slots.
    (1) All Slots within any Carrier's Baseline Operations, as 
determined on [final rule effective date], shall be designated as 
Common Slots.
    (2) Ten percent of the Slots at Newark on [final rule effective 
date] not otherwise designated as Common Slots under paragraph (b) (1) 
of this section shall be designated as Limited Slots. All other Slots 
shall be designated as Common Slots.
    (c) Limited Slots. Those Slots assigned to a Carrier subject to 
return to the FAA under Sec.  93.185(c) shall be designated as Limited 
Slots until the date of their reassignment by the FAA as Unrestricted 
Slots. A Carrier may continue to use a Limited Slot that has reverted 
to the FAA until reassigned to another Carrier as an Unrestricted Slot.
    (1) Each Carrier with a total number of daily operations at Newark 
in excess of its Baseline Operations will be notified by [final rule 
effective date] how many of its remaining Slots will be designated as 
Limited Slots pursuant to paragraphs (c)(2) and (3) of this section.
    (2) A Carrier shall designate 50 percent of its Limited Slots. The 
Carrier must notify the FAA of its determination by [date 10 days after 
the final rule effective date].
    (3) The FAA will designate the remaining Limited Slots, initially 
excluding those hours in which two or more Slots have been classified 
as Limited Slots by the Carriers.
    (4) No later than [date 20 days after the final rule effective 
date], the FAA will publish a list of all Limited Slots and the dates 
upon which they will expire.
    (d) Unrestricted Slots. Unrestricted Slots are Slots acquired by a 
Carrier through a lease with the FAA awarded via an auction. 
Unrestricted Slots are not subject to withdrawal by the FAA.


Sec.  93.185  Initial assignment of slots.

    (a) Except as provided for under paragraphs (b) and (c) of this 
section, any Carrier allocated operating rights under the Order 
limiting operations at Newark as evidenced by the FAA's records, will 
be assigned corresponding Slots in 30-minute periods consistent with 
the limits under Sec.  93.183(b) and its summer and winter season 
schedules as approved by the FAA. If necessary, the FAA may utilize 
administrative measures such as voluntary measures or a lottery to re-
time the assigned Slots within the same hour to meet the 30-minute 
limits under Sec.  93.183(b). The FAA Vice President, System Operations 
Services, is the final decision-maker for determinations under this 
section.
    (b) If a Carrier was allocated operating rights under the Order 
limiting operations at Newark, but the operating rights were held by 
another Carrier, then the corresponding Slots will be assigned to the 
Carrier that held the operating rights for that period, as evidenced by 
the FAA's records.
    (c) Starting [date 35 days after the effective date] and every year 
thereafter through 2013, one-fifth of the total number of Limited Slots 
shall revert to the FAA in accordance with the schedule published under 
Sec.  93.164(c)(4) and be auctioned as Unrestricted Slots by the FAA. 
Any Slot receiving no responsive bids will be retired until the next 
auction. An affected Carrier will be allowed to use the Limited Slot 
until the effective date of an award to a Carrier as an Unrestricted 
Slot.


Sec.  93.186  Assignment of new or returned slots.

    (a) This section describes the process by which the FAA assigns new 
Slots, as well as Slots returned to the FAA pursuant to the provisions 
of Sec.  93.190. These Slots will be assigned by the FAA to requesting 
Carriers for the Summer and Winter Scheduling Seasons.
    (b) Requests for the new Slots or returned Slots or both must be 
submitted to the Federal Aviation Administration, Slot Administration 
Office, AGC-200, 800 Independence Avenue, SW., Washington, DC 20591 
(Facsimile: (202) 267-7277; e-mail: [email protected]), by the 
deadline as published by the FAA in a Federal Register notice for each 
Summer and Winter Scheduling Season. The requesting Carrier must submit 
its entire schedule at Newark for the particular season, noting which 
requests are in addition to, or changes from, the previous 
corresponding season at the respective airports.
    (c) Before assigning new or returned Slots under this section, the 
FAA will first accommodate Carrier requests to retime Slots for 
operational reasons or to bring the flight time closer to the time 
originally requested by the applicant Carrier in previous corresponding 
seasons, as reflected in FAA records.
    (d) After accommodating Carrier requests for retiming of Slots, the 
FAA will assign 50% of the new Slots and returned Slots to New 
Entrants, unless requests by New Entrants constitute fewer than 50% of 
available Slots.
    (e) With the remaining available Slots, if all requests for Slots 
under this section cannot be accommodated, the FAA will give priority 
to requests to introduce year-round service or to extend an existing 
operation to a year-round operation.
    (f) Thereafter, the FAA will assign Slots considering all relevant 
factors including:
    (1) The effective period of operation;
    (2) The extent and regularity of intended use of a Slot;
    (3) Schedule constraints of Carriers requesting Slots.


Sec.  93.187  Reversion and withdrawal of slots.

    (a) This section does not apply to Unrestricted Slots.

[[Page 29650]]

    (b) A Carrier's Common Slots or Limited Slots revert back to the 
FAA 30 days after the Carrier has ceased all operations at Newark for 
any reasons other than a strike.
    (c) The FAA may retime, withdraw, or temporarily suspend Common 
Slots and Limited Slots at any time to fulfill operational needs.
    (d) Common Slots and Limited Slots will be withdrawn in accordance 
with the priority list established under Sec.  93.193 and international 
obligations.
    (e) Except as otherwise provided in paragraph (a) of this section, 
the FAA will notify an affected Carrier before withdrawing or 
temporarily suspending a Common Slot or Limited Slot and specify the 
date by which operations under the Common Slot or Limited Slot must 
cease. The FAA will provide at least 45 days' notice unless otherwise 
required by operational needs.
    (f) Any Common Slot or Limited Slot that is temporarily withdrawn 
under this paragraph will be reassigned, if at all, only to the Carrier 
from which it was withdrawn, provided the Carrier continues to conduct 
Scheduled Operations at the airport.


Sec.  93.188  Sublease and transfer of slots.

    (a) A Carrier may sublease its Slots to another Carrier in 
accordance with this section and subject to the provisions of the 
Carrier's lease agreement with the FAA.
    (b) A Carrier must provide notice to the FAA to sublease a Slot. 
Such notice must contain: the Slot number and time, effective dates 
and, if appropriate, the duration of the lease. The Carrier may also 
provide the FAA with a minimum bid price.
    (c) The FAA will post a notice of the offer to sublease the Slot 
and relevant details on the FAA Web site at http://www.faa.gov. An 
opening date, closing date and time by which bids must be received will 
be provided.
    (d) Upon consummation of the transaction, written evidence of each 
Carrier's consent to sublease must be provided to the FAA, as well as 
all bids received and the terms of the sublease, including but not 
limited to:
    (1) The names of all bidders and all parties to the transaction;
    (2) The offered and final lengths of the sublease;
    (3) The consideration offered by all bidders and provided by the 
sublessee.
    (e) The Slot may not be used until the conditions of paragraph (d) 
of this section have been met, and the FAA provides notice of its 
approval of the sublease.
    (f) Slots may be transferred among a U.S. Air Carrier and another 
Carrier that conducts operations at Newark solely under the 
transferring Carrier's marketing control, including the entire 
inventory of the flight. Each party to such transfer must provide 
written evidence of its consent to the transfer and the FAA must 
confirm and approve these transfers in writing prior to the effective 
date of the transaction. However, the FAA will approve transfers under 
this paragraph up to five business days after the actual operation to 
accommodate operational disruptions that occur on the same day of the 
scheduled operation. The FAA Vice President, System Operations Services 
is the final decision-maker for any determinations under this section.
    (g) A Carrier wishing to sublease a Slot via an FAA auction, rather 
than pursuant to this section, may do so. The Carrier shall retain the 
proceeds and the Slot shall retain the same designation that it had 
prior to the Carrier placing it up for auction.


Sec.  93.189  One-for-one trade of slots.

    (a) A Carrier may trade a Slot with another Carrier on a one-for-
one basis.
    (b) Written evidence of each Carrier's consent to the trade must be 
provided to the FAA.
    (c) Each recipient of the trade may not use the acquired Slot until 
written confirmation has been received from the FAA.
    (d) Carriers participating in a one-for-one trade must certify to 
the FAA that no consideration or promise of consideration was provided 
by either party to the trade.


Sec.  93.190  Minimum usage requirements.

    (a) This section does not apply to Unrestricted Slots.
    (b) Any Common Slot or Limited Slot included in a summer or winter 
season schedule approved by the FAA that is not used at least 80 
percent of the time during the period for which it is assigned will be 
withdrawn by the FAA.
    (c) Paragraph (b) of this section does not apply to the first 90-
day period after assignment of a Common Slot or Limited Slot through a 
sublease.
    (d) The FAA may waive the requirements of paragraph (b) of this 
section in the event of a highly unusual and unpredictable condition 
which is beyond the control of the Carrier and which affects Carrier 
operations for a period of five or more consecutive days. Examples of 
conditions which could justify a waiver under this paragraph are 
weather conditions that result in the restricted operation of the 
airport for an extended period of time or the grounding of an aircraft 
type.
    (e) The FAA will treat as used any Common Slot or Limited Slot held 
by a Carrier on Thanksgiving Day, the Friday following Thanksgiving 
Day, and the period from December 24 through the first Sunday of 
January.


Sec.  93.191  Unscheduled operations.

    (a) During the hours of 6 a.m. through 10:59 p.m. Eastern Time, no 
person may operate an aircraft other than a helicopter to or from 
Newark unless he or she has received, for that Unscheduled Operation, a 
Reservation that is assigned by the Airport Reservation Office (ARO) or 
in the case of Public Charters, in accordance with the procedures in 
paragraph (d) of this section. Requests for Reservations will be 
accepted through the e-CVRS beginning 72 hours prior to the proposed 
time of arrival to or departure from Newark. Additional information on 
procedures for obtaining a Reservation is available on the Internet at 
http://www.fly.faa.gov/ecvrs.
    (b) Reservations, including those assigned to Public Charter 
operations under paragraph (d) of this section, will be available to be 
assigned by the ARO on a 30-minute basis at Newark as follows:
    (1) Two Reservations per hour between 6 a.m. and 11:59 a.m. and 
between 10 p.m. and 10:59 p.m.
    (2) One Reservation per hour between 12 noon and 9:59 p.m.
    (c) The ARO will receive and process all Reservation requests for 
unscheduled arrivals and departures at Newark. Reservations are 
assigned on a ``first-come, first-served'' basis determined by the time 
the request is received at the ARO. Reservations must be cancelled if 
they will not be used as assigned.
    (d) One Reservation per hour will be available for assignment to 
Public Charter operations prior to the 72-hour Reservation window in 
paragraph (a) of this section. No more than 25 percent of the 
reservations available from 12 noon through 9:59 p.m. will be made 
available for Public Charter operations under this paragraph.
    (1) The Public Charter Operator may request a reservation up to six 
months in advance of the date of the flight operation. Reservation 
requests should be submitted to Federal Aviation Administration, Slot 
Administration Office, AGC-200, 800 Independence Avenue, SW., 
Washington, DC 20591. Submissions may be made via facsimile to (202) 
267-7277 or by e-mail to: [email protected].
    (2) The Public Charter operator must certify that its prospectus 
has been accepted by the Department of

[[Page 29651]]

Transportation in accordance with 14 CFR part 380.
    (3) The Public Charter operator must identify the call sign/flight 
number or aircraft registration number of the direct Air Carrier, the 
date and time of the proposed operation(s), the airport served 
immediately prior to or after Newark, aircraft type, and the nature of 
the operation (e.g., ferry, passenger). Any changes to an approved 
Reservation must be approved in advance by the Slot Administration 
Office.
    (4) If Reservations under paragraph (d)(1) of this section have 
already been assigned, the Public Charter operator may request a 
Reservation under paragraph (a) of this section.
    (e) The filing of a request for a Reservation does not constitute 
the filing of an IFR flight plan as required by regulation. The IFR 
flight plan may be filed only after the Reservation is obtained, must 
include the Reservation number in the ``Remarks'' section, and must be 
filed in accordance with FAA regulations and procedures.
    (f) Air Traffic Control will accommodate declared emergencies 
without regard to Reservations. Non-emergency flights in direct support 
of national security, law enforcement, military aircraft operations, or 
public-use aircraft operations may be accommodated above the 
Reservation limits with the prior approval of the Vice President, 
System Operations Services, Air Traffic Organization. Procedures for 
obtaining the appropriate waiver will be available on the Internet at 
http://www.fly.faa.gov/ecvrs.
    (g) Notwithstanding the limits in paragraph (b) of this section, if 
the Air Traffic Organization determines that air traffic control, 
weather and capacity conditions are favorable and significant delay is 
unlikely, the FAA may determine that additional Reservations may be 
accommodated for a specific time period. Unused Slots may also be made 
available temporarily for unscheduled operations. Reservations for 
additional operations must be obtained through the ARO.
    (h) Reservations may not be bought, sold or leased.


Sec.  93.192  Reporting requirements.

    (a) No later than September 1 for the Summer Scheduling Season and 
February 1 for the Winter Scheduling Season, each Carrier holding a 
Common Slot or Limited Slot must submit an interim report of Slot usage 
for each day of the applicable scheduling season. No later than 30 days 
after the last day of the applicable scheduling season, each Carrier 
holding a Common Slot or Limited Slot must submit a final report of the 
completed operations for each day of the entire scheduling season.
    (b) Such reports, in a format acceptable to the FAA, must contain 
the following information for each Common Slot or Limited Slot:
    (1) The Slot number, time, and arrival or departure designation;
    (2) The operating Carrier;
    (3) The date and time of each of the operations conducted pursuant 
to the Slot, including the flight number and origin/destination; and
    (4) The aircraft type identifier.
    (c) The FAA may withdraw the Slot of any Carrier that does not meet 
the reporting requirements of paragraph (a) of this section.


Sec.  93.193  Administrative provisions.

    (a) Each Slot shall be assigned a number for administrative 
convenience.
    (b) The FAA will assign priority numbers by random lottery for 
Common Slots and Limited Slots at Newark. Each Common Slot and Limited 
Slot will be assigned a withdrawal priority number, and the 30-minute 
time period for the Common Slot or Limited Slot, frequency, and the 
arrival or departure designation.
    (c) If the FAA determines that operations need to be reduced for 
operational reasons, the lowest assigned priority number Common Slot or 
Limited Slot will be the last withdrawn.
    (d) Any Slot available on a temporary basis may be assigned by the 
FAA to a Carrier on a non-permanent, first-come, first-served basis 
subject to permanent assignment under this subpart. Any remaining Slots 
may be made available for unscheduled operations on a non-permanent 
basis and will be assigned under the same procedures applicable to 
other operating Reservations.
    (e) All transactions under this subpart must be in a written or 
electronic format approved by the FAA.

    Issued in Washington, DC, on May 15, 2008.
Nan Shellabarger,
Director of Aviation Policy and Plans.
[FR Doc. 08-1271 Filed 5-16-08; 12:00 pm]
BILLING CODE 4910-13-P