Reagan National Airport: Update on Capacity to Handle Additional 
Flights and Impact on Other Area Airports (28-FEB-07,		 
GAO-07-352).							 
                                                                 
In 1999, GAO reported that Reagan National Airport could	 
accommodate at least 36 more slots, which are authorizations from
the Department of Transportation (DOT) for a takeoff or landing. 
In 2000 and 2003, two federal statutes, known as AIR-21 and	 
Vision 100, permitted DOT to award 44 new slots to airlines, 24  
of which could be used for flights to cities more than 1,250	 
miles, which was the statutorily mandated limit for non stop	 
flights from Reagan National. The DOT awards went to airlines	 
serving six cities (Denver, Las Vegas, Los Angeles, Phoenix, Salt
Lake City, and Seattle). For this year's reauthorization of the  
Federal Aviation Administration (FAA), GAO was asked for an	 
update on the capacity of Reagan National to accommodate	 
additional slots and the effect of relaxing the perimeter rule.  
GAO updated its 1999 study to answer these key questions: (1) To 
what extent can Reagan National accommodate additional flights?  
(2) Since AIR-21 and Vision 100, what changes have occurred in	 
market share and fares for flights operating between the six	 
beyond-perimeter cities and the three Washington, D.C., area	 
airports? In commenting on this report, DOT and the airports	 
authority generally agree with our findings but with one	 
exception, the airports authority disagrees with DOT's estimate  
of slots because it disputes their methodological assumptions. We
believe the department's methodology for estimating airport	 
capacity is appropriate.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-352 					        
    ACCNO:   A66345						        
  TITLE:     Reagan National Airport: Update on Capacity to Handle    
Additional Flights and Impact on Other Area Airports		 
     DATE:   02/28/2007 
  SUBJECT:   Airlines						 
	     Airports						 
	     Capacity management				 
	     Commercial aviation				 
	     Federal law					 
	     Passengers 					 
	     Statistical data					 
	     Transportation industry				 
	     Transportation law 				 
	     Ronald Reagan Washington National			 
	     Airport (DC)					 
                                                                 

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GAO-07-352

   

     * [1]Results in Brief
     * [2]Background
     * [3]FAA Indicates Some Additional Capacity Could Be Added, but A

          * [4]FAA Estimates Airport Can Accommodate Additional Slots
          * [5]Airports Authority Questions Reagan National's Capacity to A
          * [6]Opportunities Exist to Expand Current Capacity at Reagan Nat

     * [7]Airlines with Nonstop Service between Beyond-Perimeter Airpo

          * [8]The Effect of Beyond-Perimeter Slots on Area Airports Is Not

     * [9]Agency Comments
     * [10]GAO Comment
     * [11]GAO Contact
     * [12]Staff Acknowledgments
     * [13]GAO's Mission
     * [14]Obtaining Copies of GAO Reports and Testimony

          * [15]Order by Mail or Phone

     * [16]To Report Fraud, Waste, and Abuse in Federal Programs
     * [17]Congressional Relations
     * [18]Public Affairs

Report to Congressional Requesters

United States Government Accountability Office

GAO

February 2007

REAGAN NATIONAL AIRPORT

Update on Capacity to Handle Additional Flights and Impact on Other Area
Airports

GAO-07-352

Contents

Letter 1

Results in Brief 3
Background 5
FAA Indicates Some Additional Capacity Could Be Added, but Airports
Authority Cites Airport Infrastructure Constraints as an Obstacle 10
Airlines with Nonstop Service between Beyond-Perimeter Airports and Reagan
National Gained Significant Market Share of Traffic in Those Markets,
While the Effect on Flights to Other Area Airports Is Not Evident 16
Agency Comments 22
Appendix I Scope and Methodology 25
Appendix II Comments from the Metropolitan Washington Airports Authority
26
GAO Comment 30
Appendix III GAO Contact and Staff Acknowledgments 31

Tables

Table 1: Slots Per Hour by Carrier 7
Table 2: Reagan National Slots Allocated and Used by Aircraft Type, August
2006 16
Table 3: Share of Passenger Traffic by Airline 17
Table 4: Average One-way Fares for Nonstop and Connecting Flights to
Reagan National in Beyond-Perimeter Airports (2005)17

Figures

Figure 1: Layout of Reagan National Airport 6
Figure 2: Summary of Slot Exemptions Granted by DOT under AIR-21 and
Vision 100 as of September 2006 9
Figure 3: Number of Flights at Reagan National By Aircraft, January 2001-
August 2006 13
Figure 4: Annual Percentage Change in Passengers for All Dulles Flights
and Flights between Dulles and Six Beyond-Perimeter Airports, 1999-2005 19
Figure 5: Annual Percentage Change in Average Fares for All Dulles Flights
and Flights between Dulles and Six Beyond-Perimeter Airports, 1999-2005 20
Figure 6: Annual Percentage Change in Passengers for All BWI Flights and
Flights between BWI and Six Beyond-Perimeter Airports, 1999-2005 21
Figure 7: Annual Percentage Change in Average Fares for All BWI Flights
and Flights between BWI and Six Beyond-Perimeter Airports, 1999-2005 22

Abbreviation

AIR-21 Wendell H. Ford Aviation Investment and Reform Act for the 21^st
Century
BWI Baltimore-Washington Thurgood Marshall International Airport
DOT Department of Transportation
DHS Department of Homeland Security
FAA Federal Aviation Administration
Vision 100 Vision 100 - Century of Aviation Reauthorization Act
IFR Instrument Flight Rules
VFR Visual Flight Rules
GAO Government Accountability Office

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separately.

United States Government Accountability Office

Washington, DC 20548

February 28, 2007 February 28, 2007

The Honorable John Mica
Ranking Republican
Member Committee on Transportation and Infrastructure
House of Representatives

The Honorable Tom Petri
Ranking Republican Member
Subcommittee on Aviation
Committee on Transportation and Infrastructure
House of Representatives

Ronald Reagan Washington National Airport's (Reagan National) central
location in the Baltimore-Washington D.C.-Northern Virginia region and
proximity to the Nation's capital makes it very popular for airlines and
passengers. However, since the 1960's, the federal government has
restricted air traffic at Reagan National to reduce congestion and spur
growth at other nearby airports. This has been achieved by controlling the
number of takeoffs and landings that can occur at Reagan National each day
within hourly time periods. To take off or land during any given hour at
Reagan National, an airline must first obtain a slot that is an
authorization from the Federal Aviation Administration (FAA) under what is
called the slot rule. Each slot equates to one takeoff or landing. The
airport's growth has also been constrained by limiting the distance that
flights are allowed to travel. Under what is called the perimeter rule,
the distance of nonstop flights that serve the airport is limited to 1,250
miles. Under this rule, passengers wishing to fly to Reagan National from
airports more than 1,250 miles away must first fly to an airport within
1,250 miles and then take another flight continuing on to Reagan National.
The slot rule also grants 12 slots per hour to general aviation or other
aircraft that do not operate on a scheduled basis, such as corporate jets
or military planes. Prior to the terrorist attacks of September 11, 2001,
there were over 40,000 annual general aviation and unscheduled flights to
and from Reagan National but since then, the Department of Homeland
Security (DHS) restrictions on general aviation flights in the national
capital region have drastically curtailed the use of these slots to about
200 over the past year. Ronald Reagan Washington National Airport's
(Reagan National) central location in the Baltimore-Washington
D.C.-Northern Virginia region and proximity to the Nation's capital makes
it very popular for airlines and passengers. However, since the 1960's,
the federal government has restricted air traffic at Reagan National to
reduce congestion and spur growth at other nearby airports. This has been
achieved by controlling the number of takeoffs and landings that can occur
at Reagan National each day within hourly time periods. To take off or
land during any given hour at Reagan National, an airline must first
obtain a slot that is an authorization from the Federal Aviation
Administration (FAA) under what is called the slot rule. Each slot equates
to one takeoff or landing. The airport's growth has also been constrained
by limiting the distance that flights are allowed to travel. Under what is
called the perimeter rule, the distance of nonstop flights that serve the
airport is limited to 1,250 miles. Under this rule, passengers wishing to
fly to Reagan National from airports more than 1,250 miles away must first
fly to an airport within 1,250 miles and then take another flight
continuing on to Reagan National. The slot rule also grants 12 slots per
hour to general aviation or other aircraft that do not operate on a
scheduled basis, such as corporate jets or military planes. Prior to the
terrorist attacks of September 11, 2001, there were over 40,000 annual
general aviation and unscheduled flights to and from Reagan National but
since then, the Department of Homeland Security (DHS) restrictions on
general aviation flights in the national capital region have drastically
curtailed the use of these slots to about 200 over the past year.

In 1999, we analyzed legislative proposals to increase the number of slots
at Reagan National and reported that the airport could accommodate at In
1999, we analyzed legislative proposals to increase the number of slots at
Reagan National and reported that the airport could accommodate at least
36 more slots per day and that adding beyond-perimeter slots would have
limited effects on nearby Dulles International (Dulles) and
Baltimore-Washington Thurgood Marshall International Airport (BWI).^1 The
rule that governs the number of slots at Reagan National limits the number
of takeoffs or landings to 48 commercial slots per hour occurs during an
18-hour period (6:00 a.m. to midnight) over the airport's 24-hour
operating day.^2

In 2000 and 2003, two federal statutes --AIR-21^3 and Vision 100^4
increased the number of slots and for the first time allowed for
exemptions to be granted to the perimeter rule. The statutes granted
exemptions to the existing rules, adding 44 slots per day during a 15-hour
period and allowing 24 of these slots for flights of more than 1,250
miles--flights longer than 1,250 miles are called beyond-perimeter
flights.^5 In effect, given the 15-hour period for these slot exemptions,
this added on average three commercial slots per hour. The Department of
Transportation (DOT) awarded these new slots exemptions to airlines and
routes that best met specified criteria.^6 The 24 beyond-perimeter slot
exemptions were awarded to airlines operating flights from six
airports-Denver International (Denver), Phoenix-Sky Harbor (Phoenix),
McCarran International (Las Vegas), Los Angeles International (Los
Angeles), Salt Lake City International (Salt Lake City), and
Seattle-Tacoma International (Seattle).

^1GAO/RCED- 99-234.

^214 C.F.R. S 93, Subpart K.

^3The Wendell H. Ford Aviation Investment and Reform Act for the 21st
Century (AIR-21) Pub. L. No. 106-81 (Apr. 5, 2000).

^4The Century of Aviation Reauthorization Act (Vision 100) Pub. L. No.
108-176 (Dec. 13, 2003).

^5AIR-21 and Vision 100 permitted slots to operate during 7:00 a.m through
9:59 p.m.

^6Congress set forth slot exemption criteria, and DOT granted exemptions
to airlines whose service would (for beyond-perimeter exemptions) (1)
provide air transportation with domestic network benefits beyond the
1,250-mile perimeter, (2) increase competition by new entrant air carriers
or in multiple markets, (3) not reduce travel options for communities
served by small hub airports and medium hub airports within the 1,250-mile
perimeter and, (4) not result in meaningfully increased travel delays. For
within-perimeter slot exemptions, DOT distributed exemptions in a manner
that promoted air transportation: (1) by new entrant air carriers and
limited incumbent air carriers, (2) to communities without existing
nonstop air transportation to Reagan National, (3) to small communities,
(4) that will provide competitive nonstop air transportation on a nonstop
route to Reagan National, or (5) that will produce the maximum competitive
benefits, including low fares.

In anticipation of this year's reauthorization of FAA, you asked for an
update of GAO's 1999 report on Reagan National's ability to accommodate
additional capacity and the effect of relaxing the perimeter rule. To
provide this update, we addressed these key questions:

           o To what extent can Reagan National accommodate additional
           flights?

           o Since AIR-21 and Vision 100, for the six beyond-perimeter
           airports, what changes have occurred in market share and fares at
           Reagan National and what changes have occurred in the number of
           passengers and fares at Dulles and BWI airports?

           To identify the number of additional slots Reagan National can
           accommodate and the factors affecting existing capacity, we
           reviewed FAA flight data and gate utilization data obtained from
           the Metropolitan Washington Airports Authority (airports
           authority) and we interviewed DOT, FAA and airport officials. To
           assess the changes in passenger levels and fares at Washington
           area airports and the six beyond-perimeter airports, we analyzed
           DOT origin and destination ticket data and interviewed officials
           at all three Washington, D.C., area airports. We reviewed the
           reliability of these data and concluded that they were
           sufficiently reliable for our purposes. We conducted our work from
           July 2006 to February 2007 in accordance with generally accepted
           government auditing standards. More details about the scope and
           the methodology of our work are presented in appendix I.
			  
			  Results in Brief

           Reagan National Airport can accommodate some additional capacity,
           but airport infrastructure constrains how much can be added. FAA
           officials believe that some new slots for flights can be added.
           Based on DOT's 1995 capacity study, FAA estimates that the
           airport's airside infrastructure--principally runways--could
           presently accommodate four additional slots per hour or 60 daily
           slots based on a 15-hour operating period. Airport officials
           disagree with FAA's method of measuring capacity and said they
           were unsure how many additional slots, if any, the airport could
           accommodate and cited several factors as contributing to their
           uncertainty. For example, officials said that the airport's
           ability to absorb the slot exemptions granted under AIR-21 and
           Vision 100 has been aided by the near absence of general aviation
           flights. Whether general aviation will return to the previous
           levels is currently unknown; but in its absence, airport officials
           said that some runway capacity remains unutilized. Airport
           officials also said that if additional slots are added, the
           airport's ability to accommodate more aircraft will be limited by
           such factors as the lack of gates for loading airplanes and other
           infrastructure constraints. Our analysis shows that even if the
           number of slots is not increased, there is some opportunity for
           expanding capacity under current rules. Currently, 78 existing
           slots remain unused--mostly during the early morning and late
           evening hours--and airlines have not applied to use these slots.
           In addition, the capacity of the existing slots could also be
           increased by using larger planes to carry more passengers.
           Currently, smaller commuter aircraft, carrying a maximum of 76
           passengers, are being widely used in slots designated for larger
           jets.

           Airlines awarded slot exemptions for direct flights between Reagan
           National and the six beyond-perimeter airports gained a
           significant market share of traffic for those selected routes, but
           the effect of these flights on competing flights operating between
           these airports and the other Washington, D.C., area airports is
           not evident. For most of the six beyond-perimeter airports, the
           direct flights to and from Reagan National captured the majority
           of passengers flying between that airport and Reagan National. In
           most cases, the airlines charge higher average fares than on
           competing connecting flights. For example, in the Salt Lake City
           market, Delta Airlines (both nonstop and connecting flights)
           carries nearly 60 percent of the passenger traffic serving Reagan
           National and charges on average nearly $50 more for a direct
           flight than competing airlines charge for connecting flights
           between Salt Lake City and Reagan National. We did not find
           evidence about passengers or fares at Dulles or BWI for the six
           beyond-perimeter airports that would indicate that the new
           beyond-perimeter service to Reagan National had substantially
           affected flights between these two airports and the six
           beyond-perimeter airports.

           DOT and the airports authority provided comments on a draft of
           this report and generally agree with our findings with one
           exception. While the airports authority believes it can
           accommodate some additional capacity it disagrees with the
           department's estimate of how many additional slots it can
           accommodate because it disputes its methodological assumptions.
           DOT believes its methodology, which attempts to consider capacity
           under a variety of weather conditions, is more appropriate than
           the airport authority's preference to estimate capacity only under
           poor weather conditions. We believe the department's methodology
           for estimating airport capacity is more appropriate because the
           airport authority's approach would leave large amounts of airfield
           capacity unused because a significantly higher capacity could be
           achieved during better weather conditions. DOT and the airports
           authority provided overall comments and technical clarifications
           in some areas of this report. We have addressed these comments and
           clarifications where appropriate. The airport authority's comments
           and our responses are presented in appendix II.
			  
			  Background

           Reagan National Airport was built by the federal government and
           opened on June 16, 1941, on the western bank of the Potomac River,
           across from Washington, D.C.^7 Reagan National currently has three
           runways and two terminals with a total of 44 gates or passenger
           loading ramps for use by air carriers. The airport currently
           handles 400 daily departures to 75 cities, offered by 20 different
           airlines (this includes commuter airlines, which operate solely
           for the major carriers). Terminal A, the original terminal, has 9
           gates, and Terminal B/C, which opened in 1997, has 35 gates, 100
           ticket counters, and 12 baggage claim areas. In 2005, 17.8 million
           passengers used Reagan National. The airline with the largest
           number of flights at Reagan National is US Airways, which controls
           44 percent of the commercial slots. The next largest operators are
           Delta Airlines and American Airlines, which have 14 percent of the
           commercial slots each. During 2005, these three airlines together
           accounted for nearly 60 percent of total passenger enplanements at
           the airport.

^7The airport's official name changed from Washington National to Ronald
Reagan Washington National Airport under Pub. L. No. 105-154, 112 Stat 3
(1998).

Figure 1: Layout of Reagan National Airport

In 1969, FAA applied special air traffic rules to certain airports facing
increasing delays and congestion that it designated as high-density
airports: Chicago-O'Hare; New York's LaGuardia and Kennedy; Newark, New
Jersey; and Reagan National (DOT dropped Newark's designation as a
high-density airport in October 1970). Because of the restricted number of
allowable flights, these airports are generally known as slot-controlled,
and the special air traffic rules governing the allowable number of
flights are referred to as slot rules, or high-density rules.

The number of hourly slots at Reagan National is controlled by the federal
government. Since 1969, the federal government has restricted the number
of commercial takeoffs and landings at Reagan National. Currently, the
number allowed is 48 per hour: 37 for air carriers and 11 for commuter
aircraft.^8 Table 1 shows the number of slots per hour by type of aircraft
permitted under the slot rule. FAA authorizes general aviation or
unscheduled aircraft to make an additional 12 takeoffs or landings during
each hour for a total of 60 slots per hour.

Table 1: Slots Per Hour by Carrier

Type                         Slots per hour 
Air carrier^a                          37^b 
Commuter                                 11 
General aviation/unscheduled             12 
Total                                    60 

Source: GAO analysis of DOT documents.

^aCan be used by commuter but not vice versa (14 C.F.R. S 93.123).

bThe original limit on the number of air carrier slots was 40 per hour.
FAA reduced it to 37 in 1981 and increased the number of commuter slots
from 8 to 11.

A perimeter rule has been in place at Reagan National since May 1966
restricting airlines from operating nonstop flights between Reagan
National and airports further than a specified distance. The FAA
previously had concerns that allowing long-range jets to fly into Reagan
National would create a noise problem and hamper growth of the newly built
Dulles International Airport. As a result, with the airlines agreeing, the
Civil Aeronautics Board approved a 650-mile perimeter, with exceptions of
seven cities between 650 and 1,000 miles away that enjoyed grandfather
status as of December 1, 1965.

^8Commuter aircraft are generally turboprop or small jet aircraft seating
76 or fewer passengers. Within the past few years, several commuter
airlines have begun using small jet aircraft (regional jets) in their
fleets. To avoid confusion throughout the remainder of this report, we
will refer to all commuter aircraft, regardless of whether they are
regional jets or turboprops, as commuter aircraft.

In 1986, the Congress codified the slot and perimeter rules into federal
statute as part of the Metropolitan Washington Airports Act of 1986.^9 The
act led to the transfer of authority over Reagan National and Dulles from
the federal government to the Metropolitan Washington Airports Authority
and set the perimeter at 1,250 miles, which allowed nonstop flights as far
as Houston and Dallas.

Two federal statutes enacted in 2000 and 2003 modified the slot and
perimeter rules at Reagan National Airport. AIR-21 and Vision 100
effectively added up to three commercial slots per hour and for the first
time designated some slots for flights beyond the 1,250 mile perimeter.
AIR-21 and Vision 100, combined, allowed the Secretary of Transportation
to award 22 roundtrips, 12 with service to airports beyond the perimeter
and 10 with service to airports within the perimeter. Figure 2 shows each
market by number of slots and airline.

^9Pub. L. No. 99-500, 100 Stat. 1783-375, Pub. L. No. 99-591, 100 Stat.
3341-378.

Figure 2: Summary of Slot Exemptions Granted by DOT under AIR-21 and
Vision 100 as of September 2006

Two other commercial airports serve the Baltimore-Washington metropolitan
area--Dulles International Airport and Baltimore-Washington International
Thurgood Marshall Airport (BWI). Dulles opened on November 19, 1962. The
federal government built Dulles, located approximately 30 miles west of
Washington, D.C., in part to provide a facility for nonstop and connecting
and international air carrier traffic into the Washington, D.C. area. In
2005, Dulles handled 27 million passengers. BWI, built by the city of
Baltimore and originally named Friendship International Airport, was
opened on June 24, 1950. BWI, which is owned and operated by the state of
Maryland, is located 10 miles southwest of Baltimore and approximately 30
miles northeast of Washington, D.C. In 2005, BWI handled 19.7 million
passengers.

FAA Indicates Some Additional Capacity Could Be Added, but Airports Authority
Cites Airport Infrastructure Constraints as an Obstacle

According to FAA officials, whose estimate is based on airside capacity
(principally runways) and not landside infrastructure (such as terminals
and parking facilities), Reagan National can presently accommodate four
additional slots per hour. Airport officials disagree on the basis for
FAA's estimate and cite the unknown future course of general aviation at
the airport and the limited capacity of airport infrastructure (such as
gates, baggage handling areas, and parking) to handle more commercial
flights. Airport officials were unsure of how many additional flights, if
any, the airport could accommodate. Even without increasing the number of
slots, there are opportunities to accommodate more flights and passengers.
Some current slots remain unused during early morning or late evening
hours, and some slots designated for air carriers are being used for
smaller commuter aircraft.

FAA Estimates Airport Can Accommodate Additional Slots

According to FAA, Reagan National's overall runway capacity can presently
accommodate about four additional hourly slots above the current slot
allocation under the high-density rule.^10 FAA continues to rely on the
DOT's study of the high-density rule that it conducted in 1995.^11 The
study estimated that the airport's balanced capacity is 67 flights per
hour, or 4 more than what is currently in place, resulting in an
additional 60 flights per day based on an 15-hour operating period.^12 The
study predated the exclusion of general aviation after September 11. The
study concluded that FAA's traffic programs and procedures could safely
accommodate the increase, but it also said the increase was likely to
result in more delays. In 2004, the most current year for which this data
are available, Reagan National experienced an average delay time of 5
minutes, one of the lowest in the nation for large hub commercial
airports.^13

10The slot exemptions permitted by AIR-21 and Vision 100 used three of the
seven additional slots DOT originally estimated in 1995.

^11U.S. DOT, Report to the Congress: A Study of the High Density Rule, May
1995.

Airports Authority Questions Reagan National's Capacity to Accommodate
Additional Slots

Airport officials disagree with FAA's estimate because it assumes balanced
capacity, whereas the airport prefers to measure capacity differently.
Airport officials stated any measurement of capacity should be based on
poor weather conditions and Instrument Flight Rules (IFR).^14 FAA and GAO
believe balanced capacity is a more appropriate method for determining an
airport's capacity than the method suggested by the airports authority.
The 1995 DOT study points out that estimating capacity under IFR
conditions, when the airfield is at the lowest level of available capacity
does not ensure steady airfield availability. In practice, this approach
would leave large amounts of airfield capacity unused because a
significantly higher capacity could be achieved during the better weather
conditions under which Visual Flight Rules (VFR) apply.^15 According to
data from DOT, less than 1 percent of air traffic operations at Reagan
National from November 2005 to November 2006 were delayed because of
weather conditions.

Assuming capacity under IFR conditions, airport officials raised two
issues that would limit growth at the airport. The first issue is the
potential return of general aviation flights. Airport official said the
absence of general aviation flights helped the airport to absorb the
additional slots that were authorized under AIR-21 and Vision 100. After
September 2001, DHS banned general aviation flights around the national
capital region.^16 Prior to the September 11 terrorist attacks, the
airport handled 40,000 to 50,000 unscheduled aircraft flights including
general aviation, annually.

^12"Balanced capacity" refers to the average ability of an airport's
runways to support a certain number of operations per hour under varying
weather and wind conditions.

^13A large hub enplanes (number of passengers boarded) at least 1 percent
of all passengers.

^14IFR governs procedures for conducting aircraft operations during
weather conditions when the cloud ceiling is less than 1,000 feet and/or
visibility is less than 3 miles, requiring certain aircraft separations
and other operating standards.

^15VFR governs procedures for conducting aircraft operations when the
cloud ceiling is more than 1,000 feet and visibility is 3 miles or more.
Airport capacity under these conditions is generally significantly higher
than conditions under IFR.

Since October 2005, general aviation flights have been allowed to return,
but only under very restrictive conditions, resulting in very little
activity at Reagan National.^17 According to airport officials, between
October 2005 and August 2006, for example, the airport had fewer than 200
general aviation flights. Figure 3 shows the level of flights of all types
of aircraft since January 2001. As the figure shows, traffic for all types
dropped after September 11, 2001, but commercial traffic (commuter and air
carrier) has basically returned to pre-September 11 levels. By contrast,
general aviation has not done so.

^16Special flight restrictions in the National Capital Region, where
Reagan National is located, have been in place since September 2001,
primarily affecting general aviation.

^17According to FAA, airports authority, and the general aviation
community, activity is low due to the DHS security requirements. National
Business Aviation Association officials told us that the restrictions are
onerous and force general aviation users to other area general aviation
airports. As part of this reintroduction plan, DHS is required to conduct
1-year review of the first phase of the security program. To date, DHS has
not conducted this review. We also asked if DHS had any time frame for
further easing of the restrictions, but DHS did not have a date.

Figure 3: Number of Flights at Reagan National By Aircraft, January 2001-
August 2006

According to airport officials, as a result of the significantly
diminished presence of general aviation, some airside capacity remains,
but commercial aviation might not be able to use it all. A key reason is
that commercial aircraft require the longer main runway for takeoff and
landings, while many general aviation aircraft can use the shorter runways
for takeoff and landing.

The second issue airport officials raised as limiting capacity is
infrastructure limitations. These limitations involve several aspects of
the airport's infrastructure.

           o Passenger Loading Gates. According to airport officials, the
           number of gates affects the ability to add more slots. Every gate
           at the airport is currently leased to airlines with flights at the
           airport, known as tenant airlines. Airlines wishing to begin
           flights at the airport, known as new entrants, can make
           arrangements with tenant airlines to share a gate, but a tenant
           airline is not required to share its gate if its schedule does not
           allow it.^18 A recent analysis by the airport shows that some
           gates are available during certain parts of the day. For example,
           during October 2006, some gates were unused during both peak and
           nonpeak times, primarily those in the older and less desirable
           terminal A. During the 18-hour operating period, gates in terminal
           A were unused 46 percent of the time, while gates in terminal B/C
           were unused 22 percent of the time. Most of the available time
           periods are during nonpeak hours.

           o Terminal Facilities. Officials said Reagan National has limited
           capacity to expand terminal facilities such as ticket counters and
           baggage handling areas due to the lack of space on the airport
           property. If additional slots are permitted, existing tenant
           airlines might be able to use their existing facilities more
           fully, but new entrant airlines may have difficulty obtaining the
           necessary terminal facilities, especially at peak periods during
           the day. For the recent slots awarded under AIR-21 and Vision 100,
           the airports authority has been able to accommodate new entrants
           with gates and other facilities. However, airport officials said
           that such accommodation has become increasingly difficult.
           Officials from Alaska Airlines, one of the newer airlines at
           Reagan National, told us that its experience in getting the needed
           facilities has been positive.

           o Parking Facilities. According to airport officials, limited
           parking at the airport could make it difficult to accommodate
           additional passengers, resulting from increased slots. Passengers
           have a variety of ways to access the airport terminal, including
           rail transit, taxis, shuttle services, and private car. For those
           who drive their own cars, the airport provides over 7,900 parking
           spaces. According to airport officials, the parking facility is
           running at or near capacity with the existing flight schedule. For
           example, over a 12-month period from November 2005 to October
           2006, two of the four parking garages reached capacity 100 days or
           more. In order to help mitigate some of this pressure, the airport
           plans to add an additional deck to the current parking structure.
           This additional parking deck would provide 850 more spaces and is
           slated for completion in 2010.
			  
			  Opportunities Exist to Expand Current Capacity at Reagan National

           In two ways, Reagan National's current capacity under the existing
           slot limits could be expanded. First, the airport has available
           slots during certain parts of the day, though they are for less
           desirable times. Of the total 912 daily slots available for
           airlines, 834 are currently allocated and approximately 78 slots
           are unused.^19 Each of these unused slots falls either in the
           early morning (between 6:00 and 7:00) or in the late evening
           (between 9:00 and midnight), which suggests that no existing
           airlines and most likely no new entrants wish to initiate new
           service with a schedule limited to these hours.^20 According to
           airport officials, these slots remain unallocated because there is
           less demand for passenger service during these hours and because
           noise restrictions after 10 p.m. require quieter aircraft.^21

           The second way in which current capacity could be expanded is to
           reduce the number of smaller commuter planes using slots that are
           allocated for larger jet planes that carry more passengers. For
           example, FAA data show that in August 2006, commuter flights used
           nearly double the slots that were designated for commuter flights
           (see table 2). For example, on one route, between Raleigh-Durham
           and Reagan National, DOT data show that in November 2006, two
           carriers operated an average of 26 daily flights using commuter
           jets, which have a maximum capacity of 76 seats, although larger
           jets were designated for the slots used for the commuter flights.
           FAA and airport officials acknowledged that commuter aircraft
           often use air carrier slots, but noted that this practice is
           permissible under federal regulation.

           Table 2: Reagan National Slots Allocated and Used by Aircraft
           Type, August 2006
			  
                   Total monthly number of                Percentage of slots 
Type                              slots Actual flights            utilized 
Air carrier                    22,320^a         13,333                 60% 
Commuter                          6,138         10,681              174%^b 


           Source: GAO analysis of FAA tower data.

           aIncludes slot exemptions added under AIR-21 and Vision 100.

           bCommuter reflects both commuter slots and air carrier slots used
           by commuters.
			  
			  Airlines with Nonstop Service between Beyond-Perimeter Airports
			  and Reagan National Gained Significant Market Share of Traffic
			  in Those Markets, While the Effect on Flights to Other Area
			  Airports Is Not Evident

           Airlines awarded slots for nonstop service between Reagan National
           and airports beyond the 1,250 mile perimeter have been able to
           gain a significant market share of traffic for routes. The price
           they charge for this direct service is generally higher than the
           price for flights requiring a connection. We did not find evidence
           that Dulles or BWI traffic or fares were affected by the beyond
           perimeter flights to Reagan National.

           For each of the six beyond-perimeter airports, the airlines
           awarded slots for nonstop service between Reagan National and
           those airports gained significant market share of passenger
           traffic over a short period of time. For example, in the Denver
           market, Frontier Airlines, had no nonstop passenger traffic
           between Denver and Reagan National before it was awarded two slots
           (one daily roundtrip) in August 2000 and four additional slots
           (two more daily roundtrips) in 2004, and it now has garnered
           nearly 60 percent of the passenger traffic to Reagan National from
           Denver (see table 3). United Airlines, which was awarded two slots
           (one daily roundtrip) in the same market in 2004, now has 15
           percent of the market. Between Frontier and United Airlines, the
           two carriers' nonstop routes have nearly three-fourths of the
           Denver-Reagan National traffic.

           Table 3: Share of Passenger Traffic by Airline
			  			  
                                                 Before slot  Current average
                              Year slot award  award average     market share
Market      Airline      service initiated market share^a  (1^st qtr 2006)
Denver      Frontier                  2000             0%              59%
               United                    2004           0.5%              15%
Los Angeles Alaska                    2004             0%              43%
Las Vegas   America West              2000             0%              23%
Phoenix     America West              2000            12%              61%
Salt Lake   Delta                     2003             0%              59%
City                                                               
Seattle     Alaska                    2001             0%              62%

           Source: GAO analysis of DOT's origin and destination survey.

           aAverage market share data based on the year before award.

           Airlines with beyond-perimeter slots generally charge higher fares
           than are charged for connecting flights to and from Reagan
           National (see table 4). In half of the cases the nonstop fare was
           on average $25 to $50 higher than the connecting flight fares to
           and from Reagan National. Los Angeles is the only market in which
           the average direct fare is less than the average fare for flights
           with connections.

           Table 4: Average One-way Fares for Nonstop and Connecting Flights
           to Reagan National in Beyond-Perimeter Airports (2005)
			  
Market         Airline      Nonstop flight Connecting flight
Denver         Frontier               $159        n/a
                  United                 $237               $151
Los Angeles    Alaska                 $178              $190
Las Vegas      America West           $180              $176
Phoenix        America West           $251              $176
Salt Lake City Delta                  $250              $201
Seattle        Alaska                 $247              $226


           Source: GAO analysis of DOT's origin and destination survey.
			  
			  The Effect of Beyond-Perimeter Slots on Area Airports Is Not Evident

           We did not find evidence that beyond-perimeter flights to and from
           Reagan National affected flights from the same airports to or from
           Dulles or BWI. We analyzed fare and passenger data for flights
           between Dulles and BWI and those airports and for all traffic
           serving Dulles and BWI. In doing so, we observed that the data did
           not produce any distinguishable trends or patterns that would
           indicate that beyond-perimeter slots at Reagan had any effect on
           fares or passenger levels at either Dulles or BWI.

           Overall, Dulles has experienced growth in traffic and a decline in
           fares, while BWI has experienced little overall change in traffic
           or fares from 1999 to 2005. To assess whether the introduction of
           new nonstop beyond-perimeter routes into Reagan National affected
           service between the same six airports and Dulles or BWI, we
           compared the percentage change in average fares and total
           passengers, from 1999 through 2005 for travel between each of the
           six beyond-perimeter airports and Dulles and BWI against the
           overall percentage change in annual average fares and passengers
           for all traffic serving Dulles and BWI. As the figures below
           illustrate, some routes experienced greater or lesser changes
           relative to overall changes at the airport, but no consistent
           trends were apparent.

           o Dulles annual airport passenger traffic grew from 1999 to 2005,
           from 19.7 million to 27 million, a 37 percent increase. We did not
           find any patterns or trends that would suggest that the changes to
           the perimeter rule at Reagan National had affected fares or
           service between Dulles and these six airports. (See figs. 4 and
           5). Airports authority officials stated they had no reason to
           believe that these limited beyond-perimeter awards affected
           Dulles. Rather, the officials noted, the airport's fares and
           passenger traffic were significantly affected by its experience
           with low-fare carrier, Independence Air, which had a large growth
           of flights at Dulles but has now gone out of business.

           For overall passenger traffic between Dulles and the six airports,
           as figure 4 shows, we did not find evidence that the
           beyond-perimeter slots at Reagan National affected passenger
           levels. For example, passenger traffic between Dulles and some
           airports grew faster than overall airport traffic despite the
           introduction of nonstop flights to Reagan National.

^18Under DOT grant requirements, airports unable to accommodate an
airline's request for access to gates or other facilities shall submit a
report to DOT outlining the nature of the request, why the request could
not be accommodated, and a time frame when, if any, the airport will be
able to accommodate the request.

^19Includes slot exemptions granted under AIR-21 and Vision 100.

^20FAA controls the allocation of available air carrier and commuter slots
at Reagan National during an 18-hour period every day, from 6:00 am until
midnight.

^21Between 10 p.m. and 7 a.m. air carriers are required to meet the
airports authority's noise regulation.

Figure 4: Annual Percentage Change in Passengers for All Dulles Flights
and Flights between Dulles and Six Beyond-Perimeter Airports, 1999-2005

Figure 5: Annual Percentage Change in Average Fares for All Dulles Flights
and Flights between Dulles and Six Beyond-Perimeter Airports, 1999-2005

           o BWI airport passenger traffic grew from 17.4 million in 1999 to
           19.7 million in 2005. But, similar to Dulles, we found no patterns
           or trends in passengers or fares between BWI and the six airports
           that would suggest that changes to the beyond-perimeter rule at
           Reagan National had an impact on flights at BWI. (See figs. 6 and
           7). Officials from BWI stated that changes to the slot and
           perimeter rule did not adversely affect BWI and noted other
           factors, notably US Airways reduction of its commuter service at
           BWI.

Figure 6: Annual Percentage Change in Passengers for All BWI Flights and
Flights between BWI and Six Beyond-Perimeter Airports, 1999-2005

Figure 7: Annual Percentage Change in Average Fares for All BWI Flights
and Flights between BWI and Six Beyond-Perimeter Airports, 1999-2005

Agency Comments

We provided copies of this report to DOT and the airports authority. We
received comments from the Office of the Deputy Assistant Secretary for
Aviation and International Affairs, Department of Transportation. DOT
acknowledges that all available slots at Reagan National Airport are not
used to maximum effect and agreed that there are a number of reasons for
this, including curfew restrictions, the commercial viability of slots in
the early morning or late evening under current regulations, and the
concentration of the majority of slot holdings among a relatively small
number of carriers. DOT also recognizes that the underutilization of slots
is exacerbated by the fact that carriers can use commuter aircraft in
slots designated for large aircraft but are legally prohibited from using
large aircraft in slots designated for commuter aircraft. In addition,
other statutory restrictions, such as the perimeter rule, contribute to
the underutilization of slots and prevent market forces from producing the
maximum public benefit from these scarce assets. For example, the early
departure and late arrival times at other airports are often used by
airlines to operate overnight "red eye" or other long-haul flights.
Regulations governing operations at Reagan National, such as the perimeter
rule, prevent carriers from using such scheduling and fleet assignment
techniques to maximize the value of slots and facilities at that airport.
While we do not disagree with DOT's observations, we also recognize that
any changes in the commuter slot or perimeter rules at Reagan National
would have competitive implications for airlines and the communities they
serve. Assessing these effects was beyond the scope of our study. Finally,
DOT offered technical comments, which we have incorporated as appropriate.

The airports authority commented that with one exception the report
accurately reflects the situation at Reagan National. While the airports
authority believes that the airport can accommodate some additional
capacity, it is something less than the 4 slots per hour as suggested by
DOT. The airports authority still disagrees with the basis for DOT's 1995
estimate of 67 slots per hour under the High-Density Rule, just as it did
in response to our 1999 report on this matter. The airports authority
believes that maximum capacity should be based on IFR conditions, that is,
capacity under adverse weather conditions. Instead, DOT bases its estimate
of maximum capacity on a mix of IFR and VFR traffic, a methodology that we
endorsed in 1999 and still do today. We believe, as does DOT, that
balanced capacity is a superior method for determining the airport's
capacity because it accounts for the operation of aircraft during all
weather conditions. The airports authority offered technical comments,
which we have incorporated as appropriate. The airports authority's
comments, along with our responses to them appear in appendix II.

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan on no further distribution until 3 days from
the date of this letter. At that time, we will send copies of this report
to the Secretary of Transportation and the Administrator of the FAA. We
will also make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at
http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at (202) 512-4803 or [email protected] . Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Staff who make key contributions to this report
are listed in appendix II.

Gerald L. Dillingham, Ph.D.
Director, Physical Infrastructure Issues

Appendix I: Scope and Methodology

To determine how many additional slots Reagan National Airport can
accommodate, we analyzed Federal Aviation Administration (FAA) and
Metropolitan Washington Airports Authority (airports authority)
operational data, reviewed prior capacity studies, and interviewed
airports authority, FAA, and Department of Transportation (DOT) officials.
This analysis included reviewing data on the number and type of aircraft
using the slots and how this usage was dispersed during the day and by
which runway. We also reviewed the data contained in the 1995 study done
by the DOT on the high-density rule and reviewed the basis for DOT's
capacity estimates. In addition, we analyzed airports authority gate
utilization data and airline leases to determine the extent to which gate
space at the airport is unused. Finally, we interviewed officials from the
DOT, FAA, airports authority and other stakeholders about Reagan
National's current and future capacity.

To assess traffic between Washington, D.C., area airports and the six
beyond-perimeter airports for which nonstop service to Reagan National was
awarded since 1999, we analyzed DOT's Origin and Destination ticket data;
we used these data to examine changes in fares and passenger levels
between Reagan National, Dulles International (Dulles) and
Baltimore-Washington Thurgood Marshall International Airport (BWI), and
these airports. We also interviewed airports authority and BWI officials.
For this analysis, we conducted a historical look at traffic between the
six airports and the three Washington-Baltimore area airports. We obtained
the ticket data from BACK Aviation Solutions, a private contractor that
provides these data to interested parties. We used these data to examine
trends in passenger and fares to identify any changes in traffic and fares
between the six beyond-perimeter airports and Reagan National, Dulles and
BWI airports. To assess the reliability of these data, we reviewed the
quality control procedures applied to these data, and subsequently
determined that the data were sufficiently reliable for our purposes. We
conducted our review from July 2006 through February 2007 in accordance
with generally accepted government auditing standards.

Appendix II: Comments from the Metropolitan Washington Airports Authority

Note: GAO comment supplementing those in the report text appear at the end
of this appendix.

See comment.

The following is GAO's comment on the Metropolitan Washington Airports
Authority's (airports authority) February 1, 2007, letter.

GAO Comment

We believe, as does DOT, that "balanced capacity" is a more appropriate
method for determining an airport's capacity than the method suggested by
the airports authority. While the airports authority contends that
Instrument Flight Rules (IFR) should be used to measure capacity, DOT's
Technical Supplement No. 3 to its 1995 report points out that IFR airfield
capacity is indicative of the lowest level of available capacity, and thus
virtually ensures constant availability of an airfield. In practice, this
approach would leave large amounts of airfield capacity unused because a
significantly higher capacity could be achieved during the better weather
conditions under which Visual Flight Rules apply. According to data from
FAA, less than 1 percent of all air traffic operations at Reagan National
from November 2005 to November 2006 were delayed because of weather
conditions. Because setting the number of slots on the basis of balanced
capacity reflects both bad and good weather conditions, we did not revise
our report.

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Gerald Dillingham, Ph.D., (202) 512-4803, or [email protected]

Staff Acknowledgments

In addition to the individual named above, Ed Laughlin, Assistant
Director; Paul Aussendorf; Jay Cherlow; Dave Hooper; Nick Nadarski; Josh
Ormond; and Stan Stenersen made key contributions to this report.

(540141)

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www.gao.gov/cgi-bin/getrpt?GAO-07-352 .

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and methodology, click on the link above.

For more information, contact Gerald Dillingham at (202) 512-4803 or
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Highlights of [29]GAO-07-352 , a report to congressional requesters

February2007

REAGAN NATIONAL AIRPORT

Update on Airport's Capacity to Handle Additional Flights and Impact on
Other Area Airports

In 1999, GAO reported that Reagan National Airport could accommodate at
least 36 more slots, which are authorizations from DOT for a takeoff or
landing. In 2000 and 2003, two federal statutes, known as AIR-21 and
Vision 100, permitted DOT to award 44 new slots to airlines, 24 of which
could be used for flights to cities more than 1,250 miles, which was the
statutorily mandated limit for non stop flights from Reagan National. The
DOT awards went to airlines serving six cities (Denver, Las Vegas, Los
Angeles, Phoenix, Salt Lake City, and Seattle). For this year's
reauthorization of the FAA, GAO was asked for an update on the capacity of
Reagan National to accommodate additional slots and the effect of relaxing
the perimeter rule. GAO updated its 1999 study to answer these key
questions: (1) To what extent can Reagan National accommodate additional
flights? (2) Since AIR-21 and Vision 100, what changes have occurred in
market share and fares for flights operating between the six
beyond-perimeter cities and the three Washington, D.C., area airports? In
commenting on this report, DOT and the airports authority generally agree
with our findings but with one exception, the airports authority disagrees
with DOT's estimate of slots because it disputes their methodological
assumptions. We believe the department's methodology for estimating
airport capacity is appropriate.

Reagan National Airport can accommodate some additional in capacity, but
airport infrastructure constrains how much can be added. FAA officials
believe that some additional slots can be added, while airport officials
have not made an estimate. FAA, using the results of a 1995 DOT capacity
study, determined that the airport's airside infrastructure (e.g.,
runways) could accommodate four additional slots per hour. Airport
officials said they were unsure how many additional slots, if any, the
airport could accommodate but cited several factors that could limit the
airport's capacity to absorb additional slots including the limited number
of gates currently available for loading airplanes and other
infrastructure constraints. GAO's work shows that even if the number of
slots is not increased, there is some opportunity toexpand current
capacity by filling unused slots and increasing the size of aircraft on
existing slots to increase the number of flights and the number of
passengers served. Currently, nearly 80 slots are unused because they are
at early morning or late evening times and airlines have not applied to
use these time slots. In addition, many of the slots reserved for large
passenger jets are currently being used by smaller regional jets.

Airlines awarded slots for direct flights between Reagan National and the
six beyond-perimeter cities gained significant market share in those
selected cities, but the effect of these slots on competing flights
operating between these cities and the other Washington, D.C. area
airports is not evident. For each of the six beyond-perimeter cities, the
direct flights to and from Reagan National captured the majority of
passengers flying between that city and Reagan National. In most cases,
the airlines charged higher fares than competing connecting flights. GAO
did not find evidence in passengers or fare data that would indicate that
the new service between Reagan National and the six beyond perimeter
cities had substantially affected service from Dulles or
Baltimore-Washington International airports to these cities.

Cities Served with Additional Reagan National Airport Slots Permitted
under AIR-21 and Vision 100, Both beyond and within 1,250 Miles

References

Visible links
  29. http://www.gao.gov/cgi-bin/getrpt?GAO-07-352
*** End of document. ***