**\[4910-13\]**

**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).

**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 \[insert date 60 days after
publication\].

**ADDRESSES:** You may send comments identified by Docket Number
FAA-2008-0517 using any of the following methods:

-   [Federal eRulemaking Portal]{.underline}: Go to
    [http://www.regulations.gov](http://www.regulations.gov/) and follow
    the online instructions for sending your comments electronically.

-   [Mail]{.underline}: 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]{.underline}: 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]{.underline}: 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](http://dms.dot.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](http://dms.dot.gov/).

*Docket*: To read background documents or comments received, go to
[http://www.regulations.gov](http://dms.dot.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 *[molly.w.smith@faa.gov]{.underline}*.
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
*[rebecca.macpherson@faa.gov]{.underline}*.

# 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]{.underline}

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.

In 2000, the Wendell H. Ford Aviation Investment and Reform Act for the
21^st^ Century (AIR-21), Pub. L. 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 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).

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 thing, 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.

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.

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.

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 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]{.underline}

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.

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.

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.

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]{.underline}

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 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 6:00 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

  ------------- ------------------- ------------------ ------------------
  **Feature**   **Newark**          **JFK**            

                                    **Option 1**       **Option 2**

  Base Schedule Seasonal schedule,  Seasonal schedule, Same as Option 1
                as approved by the  as approved by the 
                FAA, for summer     FAA, for summer    
                2008 and winter     2008 and winter    
                2008/2009           2008/2009          

  Slot          Defined as right to Defined as right   Same as Option 1
                land or depart (not to land or depart  
                both) in a          (not both) in a    
                30-minute time      30-minute time     
                window              window             

  Number of     81/hour + 1 to 2    81/hour + 1 to 2   Same as Option 1
  Slots         unscheduled         unscheduled        

  Slot          Common Slots: The   Common Slots: The  Common Slots: The
  Definitions   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    above 20 have 10   above 20 would
                year leases;        year leases;       have 10 year
                Limited Slots: 10%  Limited Slots: 10% leases; Limited
                would have shorter  would have shorter Slots 20% would
                leases and be       leases and be      have shorter
                auctioned over five auctioned over     leases and then be
                years (2 % each)    five years (2 %    reallocated via
                (after which they   each) (after which auction over five
                convert to          they convert to    years (4%/yr)
                Unrestricted Slots) Unrestricted       
                                    Slots)             

  Slot Time of  6:00 a.m. through   6:00 a.m. through  Same as Option 1
  Day           10:59 p.m., every   11:59 p.m.,every   
                day; no more than   day.; no more than 
                81 in any one hour  81 in any one hour 
                or 44 in any        or 44 in any       
                half-hour           half-hour          

  Mechanics     "Fair" initial      "Fair" initial     Same as Option 1
                distribution with   distribution with  
                half of slots with  half of slots with 
                less than 10 years  less than 10 years 
                life selected by    life selected by   
                carriers; the other carriers; the      
                half selected by    other half         
                FAA according to    selected by FAA    
                specified rules     according to       
                                    specified rules    

  Auction       Limited Slots would Limited Slots      Same as Option 1
                be auctioned among  would be auctioned 
                carriers            among carriers     

  Auction       Auction funds to    Auction funds to   Auction funds (net
  Proceeds      FAA to defray costs FAA to defray      of auction costs)
                of auction, then to costs of auction,  to incumbent
                NY capacity /       then to NY         holder; incumbent
                projects            capacity /         cannot bid on own
                                    projects           slots

  Use/Lose      Only on             Only on            Same as Option 1
                grandfathered slots grandfathered      
                as consideration    slots as           
                for slots           consideration for  
                                    slots              

  Term          Program is through  Program is through Same as Option 1
                March 2019; slot    March 2019; slot   
                lives are whatever  lives are whatever 
                proportion of 10    proportion of 10   
                years remain upon   years remain upon  
                reallocation        reallocation       

  Bidders       Airlines            Airlines           Same as Option 1

  Holders       Holders of record   Holders of record  Same as Option 1
                (not marketing      (not marketing     
                carrier)            carrier)           

  New or        IATA WSG            IATA WSG           Same as Option 1
  returned                                             
  capacity                                             

  Secondary     Transparent not     Transparent not    Same
  market        blind: carrier      blind: carrier     
                notifies FAA of     notifies FAA of    
                intent to sublease; intent to          
                FAA makes slot      sublease; FAA      
                availability known; makes slot         
                bilateral           availability       
                negotiations; final known; bilateral   
                terms disclosed to  negotiations;      
                OST for monitoring  final terms        
                                    disclosed to OST   
                                    for monitoring     

  Logistical    Permitted           Permitted          Same
  swaps of                                             
  slots                                                
  ------------- ------------------- ------------------ ------------------

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.

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 § 93.163 of
subpart N and § 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 §
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 approached 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
11:00 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]{.underline}

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 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.]{.underline}

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.]{.underline}

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.]{.underline}

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]

C. [Description of the Proposal.]{.underline}

> 1\. [Categories of Slots.]{.underline}

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 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.

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.]{.underline}

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.]{.underline}

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 § 93.185 of
subpart O provides for the conversion of Limited Slots to Unrestricted
Slots. In accordance with the schedule published under § 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 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]

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.]{.underline}

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 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.]{.underline}

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]

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.]{.underline}

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 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 website.

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]

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 § 93.168 and § 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 § 93.168 of
subpart N and § 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 6:00 a.m. and 11:59 a.m. and
between 10:00 p.m. and 10:59 p.m. and one per hour between 12:00 noon
and 9:59 p.m. At JFK, there would be two unscheduled operations
permitted per hour between 6:00 a.m. and 1:59 p.m. and between 10:00
p.m. and 10:59 p.m. and one per hour between 2:00 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 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]{.underline}.

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
12:00 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**

```{=html}
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```
A.  [30-Minute Windows]{.underline}

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]{.underline}

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 § 93.170 of subpart N and § 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 § 93.168(f) of subpart N and § 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.]{.underline}

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
§ 93.172 of subpart N and § 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.]{.underline}

The FAA may withdraw or suspend slots at JFK or Newark for operational
reasons pursuant to § 93.167 of subpart N and § 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 (Public Law 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 § 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 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.

## 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.

-   Alternative 2: For JFK, 100 percent of slots held by a 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 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]

## 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 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 6:00
    a.m. and 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 {#benefits-of-this-rulemaking .Style-Header-3-+-Left:--0-pt}

The primary benefits of this rulemaking would be due to the delay
reduction from the caps on operations 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 {#paperwork-reduction-act .Style-Header-3-+-Left:--0-pt1}

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).

*§ 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 ten days of planning time
each, potentially 80 hours, to develop and submit their designations of
50 percent of its Limited Slots, for a total of 320 hours. This
designation would occur once, ten 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, ten
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
>
> (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 one
and one half 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
one and one half hours for each occurrence of a lease or transfer of a
slot. For the largest operator, we assumed that a lease or transfer of
four 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 one
and one half 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
one and one half 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
four 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.

*§ 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, one
and one half hours two times per summer and winter season to submit the
data required by § 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,
one and one half hours every two months to submit the data required by §
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 \[INSERT DATE 60 DAYS AFTER PUBLICATION\], 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.

## *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, § 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 US 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 opearators. 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 §
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 (Public Law 96-39), as amended by the
Uruguay Round Agreements Act (Public Law 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 § 93.164 of subpart N and § 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

###  {#section .Style-Header-3-+-Left:--0-pt}

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 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]{.underline}:

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](http://dms.dot.gov/search));

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1.  Visiting the FAA's Regulations and Policies web page at
    http://www.faa.gov/regulations_policies/; or

2.  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
S.W, 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**

**§ 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 6:00 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
    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 11:00 p.m. on
    March 30, 2019.

**§ 93.162 Definitions.**

For purposes of this subpart, the following definitions apply:

[Airport Reservation Office (ARO)]{.underline} 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]{.underline} 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]{.underline} 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)]{.underline} 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)]{.underline} 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)]{.underline} 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]{.underline} 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]{.underline} 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]{.underline} is defined in 14 CFR 380.2 as a
U.S. or foreign public charter operator.

[Reservation]{.underline} 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]{.underline} 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]{.underline} 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]{.underline} begins on the last Sunday of
March.

[Unrestricted Slot (U-slot)]{.underline} is a slot that is awarded to a
carrier by the FAA via the auction of a lease.

[Unscheduled Operation]{.underline} 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]{.underline} begins on the last Sunday in
October.

**§ 93.163 Slots for Scheduled Arrivals and Departures.**

\(a\) During the hours of 6:00 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:

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(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.

**§ 93.164 Categories of Slots.**

\(a\) [General]{.underline}. 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.]{.underline}

> \(1\) 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.]{.underline} Those Slots assigned to a Carrier
subject to return to the FAA under § 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]{.underline}. 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.

**§ 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 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 § 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 § 93.163(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 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 § 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.

**§ 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 § 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:
[7-awa-slotadmin@faa.gov]{.underline}), 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.

**§ 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 § 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.

**§ 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]{.underline}. 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.

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(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.

**§ 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.

**§ 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.

**§ 93.171 Unscheduled Operations.**

(a) During the hours of 6:00 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]{.underline}.

(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 6:00 a.m. and 1:59
        p.m. and between 10:00 p.m. and 10:59 p.m. and one Reservation
        per hour between 2:00 p.m. and 10:59 p.m.

    2.  At Newark, two Reservations per hour between 6:00 a.m. and 11:59
        a.m. and between 10:00 p.m. and 10:59 p.m. and one Reservation
        per hour between 12:00 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 12:00 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:
        [7-awa-slotadmin@faa.gov]{.underline}.

    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]{.underline}.

(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.

**§ 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.

**§ 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.

(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.

**§ 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 6:00
    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 anther
    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 11:00 p.m. on
    March 30, 2019.

**§ 93.162 Definitions.**

For purposes of this subpart, the following definitions apply:

[Airport Reservation Office (ARO]{.underline}*)* 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]{.underline} are those common slots held by a
carrier on \[final rule effective date\], that do not exceed 20
operations per day.

[Carrier]{.underline} 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)]{.underline} 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)]{.underline} 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)]{.underline} 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]{.underline} 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]{.underline} 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]{.underline} is defined in 14 CFR 380.2 as a
U.S. or foreign public charter operator.

[Reservation]{.underline} 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]{.underline} 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]{.underline} 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]{.underline} begins on the last Sunday of
March.

[Unrestricted Slot (U-slot)]{.underline} 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]{.underline} 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]{.underline} begins on the last Sunday in
October.

**§ 93.163 Slots for Scheduled Arrivals and Departures.**

(a) During the hours of 6:00 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;

    5.  Runway utilization and capacity plans; and

    6.  Other factors relating to the efficient management of the
        National Airspace System.

**§ 93.164 Categories of Slots.**

\(a\) [General.]{.underline} 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]{.underline}.

> \(1\) 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]{.underline}. Those Slots assigned to a Carrier
subject to return to the FAA under § 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]{.underline}. 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.

**§ 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 § 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 § 93.163(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 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 §
    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.

**§ 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 § 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:
[7-awa-slotadmin@faa.gov]{.underline}), 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 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.

**§ 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 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 § 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 JFK.

**§ 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]{.underline}. 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.

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(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.

**§ 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.

**§ 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.

**§ 93.171 Unscheduled Operations.**

(a) During the hours of 6:00 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]{.underline}.

(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 6:00 a.m. and 1:59 p.m. and
        between 10:00 p.m. and 10:59 p.m.

    2.  One Reservation per hour between 2:00 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 12:00 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:
        [7-awa-slotadmin@faa.gov]{.underline}.

    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 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]{.underline}.

(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.

**§ 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.

**§ 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**

**§ 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
    6:00 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 11:00 p.m. on
    March 30, 2019.

**§ 93.182 Definitions.**

For purposes of this subpart, the following definitions apply:

[Airport Reservation Office (ARO)]{.underline} 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]{.underline} are those Common Slots held by a
carrier on \[final rule effective date\], that do not exceed 20
operations per day.

[Carrier]{.underline} 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)]{.underline} 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)]{.underline} 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)]{.underline} 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]{.underline} 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]{.underline} 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]{.underline} is defined in 14 CFR 380.2 as a
U.S. or foreign public charter operator.

[Reservation]{.underline} 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]{.underline} 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]{.underline} 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]{.underline} begins on the last Sunday of
March.

[Unrestricted Slot (U-slot)]{.underline} is a slot that is awarded to a
carrier by the FAA via the auction of a lease.

[Unscheduled Operation]{.underline} 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 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]{.underline} begins on the last Sunday in
October.

**§ 93.183 Slots for Scheduled Arrivals and Departures.**

\(a\) During the hours of 6:00 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:

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(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.

**§ 93.184 Categories of Slots.**

\(a\) [General.]{.underline} 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]{.underline}.

> \(1\) 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]{.underline}. Those Slots assigned to a Carrier
subject to return to the FAA under § 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.]{.underline} 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.

**§ 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 § 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 § 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 § 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.

**§ 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 § 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:
[7-awa-slotadmin@faa.gov]{.underline}), 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.

**§ 93.187 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 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 § 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.

**§ 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]{.underline}. 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.

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(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.

**§ 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.

**§ 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.

**§ 93.191 Unscheduled Operations.**

(a) During the hours of 6:00 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:

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(1) Two Reservations per hour between 6:00 a.m. and 11:59 a.m. and
    between 10:00 p.m. and 10:59 p.m.

(2) One Reservation per hour between 12:00 noon and 9:59 p.m.

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(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 12:00 noon through 9:59 p.m. will be
    made available for Public Charter operations under this paragraph.

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(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: [7-awa-slotadmin@faa.gov]{.underline}.

(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 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.

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(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]{.underline}.

(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.

**§ 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.

**§ 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

[^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 C.F.R.
    Part 93, Subparts K and S of 49 U.S.C. § 41714(c),]{.underline}
    Order 99-9-11 (September 16, 1999)

[^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).

[^4]: See:
    <http://www.faa.gov/airports_airtraffic/air_traffic/nas_redesign/regional_guidance/eastern_reg/nynjphl_redesign/>

[^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.

[^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.

[^7]: 72 FR 54317 (Sept. 24, 2007).

[^8]: *Id.*

[^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.

[^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.

[^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.

[^13]: "Baseline operations", as defined in § 93.162 and § 93.182, are
    up to 20 slots per day.

[^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.

[^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.

[^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.

[^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.

[^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.

[^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.