[Federal Register Volume 76, Number 73 (Friday, April 15, 2011)]
[Notices]
[Pages 21420-21422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9229]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2011-0361]


Policy and Procedures Concerning the Use of Airport Revenue; 
Policy Regarding Airport Rates and Charges: Petition of the Clark 
County Department of Aviation To Use a Weight-Based Air Service 
Incentive Program

AGENCY: Federal Aviation Administration (FAA), Department of 
Transportation (DOT).

ACTION: Notice of petition; request for comments.

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SUMMARY: This notice requests comments on a petition to accept an air 
service incentive program at McCarran International Airport (Airport) 
as consistent with Federal law and policies on the use of airport 
revenue and on airport rates and charges. The petitioner Clark County 
Department of Aviation is the owner and operator of the Airport. The 
petitioner is the recipient of Federal grants under the Airport 
Improvement Program (AIP), and is subject to obligations under AIP 
grant agreements, including Federal law and policy on the use of 
airport revenue and on airport rates and charges. The FAA has 
interpreted these policies, and the underlying Federal statutes, to 
permit a temporary waiver of standard airport fees for carriers that 
provide new air service at an airport, as an incentive to begin or 
expand air service. The agency recently issued the Air Carrier 
Incentive Program Guidebook to provide specific guidance to airport 
operators on the use of air service incentive programs. That guidance 
restates FAA's previously issued opinions regarding what constitutes 
new service as characterized in the FAA's Policy and Procedures 
Concerning the Use of Airport Revenue (Revenue Use Policy) (64 FR 
7696). Since the inception of the Revenue Use Policy in 1999, the FAA 
has defined new air service as: (a) Service to an airport destination 
not currently served, (b) nonstop service where no nonstop service is 
currently offered, (c) new entrant carrier, and/or (d) increased 
frequency of flights to a specific destination. The FAA's 
interpretation has not permitted an airport operator to offer an 
incentive program that provides discounts based on increased aircraft 
weight or an increased number of seats on existing flights. The 
petitioner proposes an incentive program that would reward air carriers 
for an increase in landed weight. An increase in landed weight could 
result from an increase in the size of aircraft used, or ``upgauging,'' 
on existing flights as well as from added flights. The petitioner 
requests that the FAA amend existing guidance to make clear that its 
proposed incentive plan is consistent with Federal law and general 
agency policies on the use of airport revenue and on airport rates and 
charges. The FAA is publishing this notice of the petition for public 
comment on whether agency guidance should be interpreted or amended as 
requested.

DATES: Send your comments on or before May 31, 2011.

ADDRESSES: You may send comments [identified by Docket Number FAA-2011-
0361] using any of the following methods:
     Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your 
comments electronically.
     Mail: Docket Operations, U.S. Department of 
Transportation, West Building, Ground Floor, Room W12-140, Routing 
Symbol M-30, 1200 New Jersey Avenue, SE., Washington, DC 20590.
     Fax: 1-202-493-2251.
     Hand Delivery: To Docket Operations, Room W12-140 on the 
ground floor of the West Building, 1200 New Jersey Avenue, SE., 
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.
    Privacy: We will post all comments we receive, without change, to 
http://www.regulations.gov, including any personal information you 
provide. For more information, see the Privacy Act discussion in the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: To read background documents or comments received, go to 
http://www.regulations.gov at any time or to Room W12-140 on the ground 
floor of the West Building, 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: Stacy Swigart, Airport Compliance 
Division, ACO-100, Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington, DC 20591, telephone (202) 267-8725; facsimile: 
(202) 267-5257; e-mail: [email protected].

SUPPLEMENTARY INFORMATION: An air service incentive program is a 
temporary reduction in the fees that an airport operator charges air 
carriers at the airport, or other temporary benefits for carriers, for 
the purpose of promoting new or additional air service.

[[Page 21421]]

While incentive programs can take many forms, they may involve a waiver 
of fees that would otherwise be due, such as landing fees; cooperation 
and assistance in marketing new service; and a subsidy of air service 
if airport revenue is not used for that purpose. Because incentive fee 
waivers can result in differential fees charged to different air 
carriers for similar use of the airport, incentive programs can involve 
issues of compliance with Federal obligations regarding discriminatory 
treatment of air carriers and use of airport revenue.
    On February 14, 2011, the Federal Aviation Administration (FAA) 
received a letter from counsel for the Clark County Department of 
Aviation, the owner and operator of McCarran International Airport in 
Las Vegas, Nevada, requesting a determination from the FAA that the 
Department of Aviation's proposed air service incentive program does 
not conflict with Federal obligations. As a matter of process, the 
agency has elected to treat the request as a petition to amend agency 
policy, and is publishing notice of the request for public comment 
before making a determination. However, the agency has made no 
determination on whether granting the Department of Aviation's request 
would or would not actually require amendment of any existing agency 
policy statements.
    Background: FAA policy on use of airport revenue and airport rates 
and charges.
    Airport sponsors that accept grants under the Airport Improvement 
Program agree to a set of standard grant assurances, as required by 49 
U.S.C. 47107. These include an assurance that airport revenue will be 
used for the capital and operating costs of the airport or airport 
system, or certain other purposes. They also include assurances that 
fees charged air carriers will be reasonable, not unjustly 
discriminatory, and substantially comparable to fees charged other 
carriers making similar use of the airport. The FAA has issued 
comprehensive policies on each of these assurances.
    The Department of Transportation published the Policy Regarding 
Airport Rates and Charges on June 21, 1996 (61 FR 31994). Portions of 
the policy were subsequently vacated by the United States Court of 
Appeals for the District of Columbia Circuit in Air Transport Ass'n of 
America v. DOT, 119 F.3d 38, amended by 129 F.3d 625 (DC Cir. 1997). In 
July 2008, the Department published a notice in the Federal Register 
adopting three amendments to the 1996 Rates and Charges Policy (73 FR 
40430, July 14, 2008). The amendments are intended to provide greater 
flexibility to operators of congested airports to use landing fees to 
provide incentives to air carriers to use the airport at less congested 
times or to use alternate airports to meet regional air service needs. 
The policy as amended does not specifically refer to incentive programs 
or fee waivers, but provides in part:

    3. Aeronautical fees may not unjustly discriminate against 
aeronautical users or user groups.
    3.1 The airport proprietor must apply a consistent methodology 
in establishing fees for comparable aeronautical users of the 
airport. When the airport proprietor uses a cost-based methodology, 
aeronautical fees imposed on any aeronautical user or group of 
aeronautical users may not exceed the costs allocated to that user 
or user group under a cost allocation methodology adopted by the 
airport proprietor that is consistent with this guidance, unless 
aeronautical users otherwise agree.
    3.1.1 The prohibition on unjust discrimination does not prevent 
an airport proprietor from making reasonable distinctions among 
aeronautical users (such as signatory and non-signatory carriers) 
and assessing higher fees on certain categories of aeronautical 
users based on those distinctions (such as higher fees for non-
signatory carriers, as compared to signatory carriers).

    The Department of Transportation and the FAA published the Policy 
and Procedures for the Use of Airport Revenue on February 16, 1999 (64 
FR 7696). That policy, in paragraph VI.B.12, Prohibited Uses of Airport 
Revenue, prohibits the direct subsidy of air carriers with airport 
revenues, but notes:

    Prohibited direct subsidies do not include waivers of fees or 
discounted landing or other fees during a promotional period. Any 
fee waiver or discount must be offered to all users of the airport, 
and provided to all users that are willing to provide the same type 
and level of new services consistent with the promotional offering. 
[64 FR 7720]

    In September 2010, the FAA published the Air Carrier Incentive 
Program Guidebook: A Reference for Airport Sponsors. The Guidebook is 
available on the FAA Airports Web site. The Guidebook was issued to 
bring together in one place the principles behind FAA policy decisions 
on individual air carrier incentive programs. The Guidebook is intended 
to interpret existing policies on use of airport revenue and airport 
rates and charges, and not to establish new policy. Several statements 
in the Guidebook have possible relevance to the Department of 
Aviation's proposed incentive plan.
    Specifically, for example, the Guidebook states that promotional 
incentives are limited to new service, and provides a definition of new 
service:

    FAA defines new service as (a) service to an airport destination 
not currently served, (b) nonstop service where no nonstop service 
is currently offered, (c) new entrant carrier, and/or (d) increased 
frequency of flights to a specific destination. (In the last case, 
the incentive would be available only on the added flights.) FAA 
does not recognize repeated seasonal service, upgrade of equipment 
type, or increased number of seats on existing flights as new 
service.

    The summary of prohibited practices reaffirms that incentives are 
not available for an increase in aircraft weight or seating not 
associated with an added flight:
    Your Incentive Program may NOT:
     Offer incremental discounts based on weight for existing 
service
     Offer incentives based on incremental weight or increased 
number of seats on existing flights.

The Petition

    The February 14, 2011, letter from counsel for the Clark County 
Department of Aviation requests that FAA determine that the 
Department's proposed air service incentive program does not conflict 
with Federal obligations, and attaches a 13-page memorandum in support 
of that request. The letter and memorandum are available for review on 
the FAA Airports Web site, as well as in the docket locations described 
under ADDRESSES in this document.
    In brief, the Department of Aviation states that the ``objective of 
the proposed Incentives Program is to provide an incentive at the 
margin to promote additions to scheduled air service seat capacity.'' 
The program provides, subject to certain terms and exceptions, that:

    * * * all monthly scheduled service landed weight, by airline, 
in excess of that operated in the same month of the prior year, 
would receive a credit of up to 100% of the landing fee (currently 
$2.26 per 1,000 pounds of landed weight) paid on the incremental 
landed weight.

    In addition to new flights, the credit would apply to existing 
flights for which an increase in aircraft size resulted in an increase 
in landing weight.

Request for comments

    The FAA requests comments on whether the petition can be considered 
consistent with agency policy on use of airport revenue and airport 
rates and charges, including policy statements contained in the Air 
Carrier Incentive Program Guidebook, and if so, whether

[[Page 21422]]

the stated agency policy should be revised to permit the kind of air 
service incentive program proposed by the Clark County Department of 
Aviation.

    Issued in Washington, DC on April 11, 2011.
Randall Fiertz,
Director, Airport Compliance and Operations.
[FR Doc. 2011-9229 Filed 4-14-11; 8:45 am]
BILLING CODE 4910-13-P