51360 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 93 

[Docket No. FAA–2006–25709; Notice No. 

06–13] 

RIN 2120–AI70 

Congestion Management Rule for 

LaGuardia Airport 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA is proposing a rule 

to address the potential for increased 

congestion and delay at New York’s 

LaGuardia Airport (LaGuardia) when 

the High Density Rule (HDR) expires 

there on January 1, 2007. The rule, if 

adopted, would establish an operational 

limit on the number of aircraft landing 

and taking off at the airport. To offset 

the effect of this limit, the proposed rule 

would increase utilization of the airport 

by encouraging the use of larger aircraft 

through implementing an airport-wide, 

average aircraft size requirement 

designed to increase the number of 

passengers that may use the airport 

within the overall proposed operational 

limits. 

DATES: Send your comments on or 

before October 30, 2006. 

ADDRESSES: You may send comments 

[identified by Docket Number FAA– 

2006–25709] using any of the following 

methods: 

• DOT Docket Web site: Go to http:// 

dms.dot.gov and follow the instructions 

for sending your comments 

electronically. 

• Government-wide rulemaking Web 

site: Go to http://www.regulations.gov 

and follow the instructions for sending 

your comments electronically. 

• Mail: Docket Management Facility; 

U.S. Department of Transportation, 400 

Seventh Street, SW., Nassif Building, 

Room PL–401, Washington, DC 20590– 

0001. 

• Fax: 1–202–493–2251. 

• Hand Delivery: Room PL–401 on 

the plaza level of the Nassif Building, 

400 Seventh Street, SW., Washington, 

DC, between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

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:// 

dms.dot.gov, including any personal 

information you provide. For more 

information, see the Privacy Act 

discussion in the SUPPLEMENTARY

INFORMATION section of this document. 

Docket: To read background 

documents or comments received, go to 

http://dms.dot.gov at any time or to 

Room PL–401 on the plaza level of the 

Nassif Building, 400 Seventh Street, 

SW., Washington, DC, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Molly W. Smith, Office of Aviation 

Policy and Plans, APO–001, Federal 

Aviation Administration, 800 

Independence Avenue, SW., 

Washington, DC 20591; telephone (202) 

267–3275; e-mail 

molly.w.smith@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

The FAA invites interested persons to 

participate in this rulemaking by 

submitting written comments, data, or 

views. We also invite comments relating 

to the economic, environmental, energy, 

or federalism impacts that might result 

from adopting the proposals in this 

document. The most helpful comments 

reference a specific portion of the 

proposal, explain the reason for any 

recommended change, and include 

supporting data. We ask that you send 

us two copies of written comments. 

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. 

The docket is available for public 

inspection before and after the comment 

closing date. If you wish to review the 

docket in person, go to the address in 

the ADDRESSES section of this preamble 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

You may also review the docket using 

the Internet at the Web address in the 

ADDRESSES section. 

Privacy Act: Using the search function 

of our docket Web site, anyone can find 

and read the comments received into 

any of our dockets, including the name 

of the individual sending the comment 

(or signing the comment on behalf of an 

association, business, labor union, etc.). 

You may review DOT’s complete 

Privacy Act Statement in the Federal 

Register published on April 11, 2000 

(65 FR 19477–78) or you may visit 

http://dms.dot.gov. 

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 late if it is possible to do so 

without incurring expense or delay. We 

may change this proposal in light of the 

comments we receive. 

If you want the FAA to acknowledge 

receipt of your comments on this 

proposal, include with your comments 

a pre-addressed, stamped postcard on 

which the docket number appears. We 

will stamp the date on the postcard and 

mail it to you. 

Availability of Rulemaking Documents 

You can get an electronic copy using 

the Internet by: 

(1) Searching the Department of 

Transportation’s electronic Docket 

Management System (DMS) Web page 

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

(2) Visiting the FAA’s Regulations and 

Policies Web page at http:// 

www.faa.gov/regulations_policies/; or 

(3) Accessing the Government 

Printing Office’s Web page at http:// 

www.gpoaccess.gov/fr/index.html. 

You can also get a copy by sending a 

request to the Federal Aviation 

Administration, Office of Rulemaking, 

ARM–1, 800 Independence Avenue, 

SW., Washington, DC 20591, or by 

calling (202) 267–9680. Make sure to 

identify the docket number, notice 

number, or amendment number of this 

rulemaking. 

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. The FAA interprets its broad 

statutory authority to ensure the 

efficient use of the navigable airspace to 

encompass management of the 

nationwide system of air commerce and 

air traffic control. 

In addition to the FAA’s authority and 

responsibilities with respect to the 

efficient use of airspace, the Secretary of 

Transportation is required to consider 

several other objectives as being in the 

public interest, including: Keeping 

available a variety of adequate, 

economic, efficient, and low-priced air 

services; placing maximum reliance on 

competitive market forces and on actual 

and potential competition; avoiding 

airline industry conditions that would 

tend to allow at least one air carrier 

unreasonably to increase prices, reduce 

services, or exclude competition in air 

transportation; encouraging, developing, 

and maintaining an air transportation 

system relying on actual and potential 


ajbrown on PROD1PC63 with PROPOSAL_3
Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 51361 

1The limits at Newark were suspended in 1970 

and were eliminated at Chicago O’Hare 

International Airport in July 2002. 

2Source: FAA’s Aviation System Performance 

Metrics (ASPM). 

3Calculated from FAA’s Air Traffic Operations 

Network Database (OPSNET). 

competition; encouraging entry into air 

transportation markets by new and 

existing air carriers and the continued 

strengthening of small air carriers to 

ensure a more effective and competitive 

airline industry; maintaining a complete 

and convenient system of scheduled air 

transportation for small communities; 

ensuring that consumers in all regions 

of the United States, including those in 

small communities and rural and 

remote areas, have access to affordable, 

regularly scheduled air service; and 

acting consistently with obligations of 

the U.S. Government under 

international agreements. See 49 U.S.C. 

40101(a)(4), (6), (10)–(13) and (16), and 

40105(b). 

I. Background 

A. The High Density Traffic Airports 

Rule at LaGuardia 

The FAA manages congestion and 

delay at LaGuardia by means of the 

HDR, which is codified under 14 CFR 

part 93, subpart K. The HDR took effect 

in 1969 as a temporary rule, but since 

it was effective in reducing congestion 

and delays, it became permanent in 

1973. 

The HDR establishes limits on the 

number of take-offs and landings during 

certain hours at five airports, including 

LaGuardia.1 In order to operate during 

the restricted hours, a carrier needs a 

reservation, commonly known as a 

‘‘slot.’’ Slots were initially allocated 

through airline scheduling committees, 

operating under then-authorized 

antitrust immunity, and the airlines 

would agree to the allocation. After the 

Airline Deregulation Act in 1978, new 

entrant airlines formed, and the preexisting legacy carriers sought to expand 

their operations. This increased 

competition made it even more difficult 

for airlines to reach agreement, and the 

scheduling committees began to 

deadlock. 

In 1985, a new Subpart S was added 

to Part 93 by the Department of 

Transportation that established 

allocation procedures for slots, 

including Use-or-Lose provisions and 

permission to buy and sell slots in a 

secondary market (50 FR 52195, 

December 20, 1985). These procedures 

replaced the scheduling committees. 

On April 5, 2000, Congress enacted 

the Wendell H. Ford Aviation 

Investment and Reform Act of the 21st 

Century (AIR–21 or the Act). The Act 

phases out the HDR at three of the 

covered airports, with the rule 

scheduled to terminate at LaGuardia on 

January 1, 2007. Additionally, AIR–21 

expanded existing operations at 

LaGuardia by directing the Secretary of 

Transportation to grant exemptions for 

certain flights from the HDR’s 

operational limits prior to the HDR’s 

termination at that airport. Specifically, 

AIR–21 authorized exemptions for 

flights operated by new entrant carriers 

or certain flights that would serve 

Small-Hub and Non-Hub Airports as 

long as the aircraft being used has fewer 

than 71 seats. 

In phasing out the HDR, Congress 

recognized the possibility that there 

could be an increase in congestion and 

delay at the affected airports. Therefore, 

under the section that phases out the 

rule, the Act states 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). 

B. Resurgence of Unacceptable Levels of 

Congestion at LaGuardia 

As a result of the AIR–21 legislation, 

the DOT approved more than 600 

exemption requests for flights at 

LaGuardia. By fall 2000, air carriers had 

added over 300 new scheduled flights at 

LaGuardia, with plans to operate more 

in the coming months. 

With no new airport infrastructure or 

air traffic control procedures, overall 

airport capacity remained the same 

while the number of aircraft operations 

and delays soared. The average minutes 

of delay for all arriving flights at 

LaGuardia increased 144%: From 15.52 

minutes in March 2000 (the month 

before AIR–21 was enacted) to 37.86 

minutes in September 2000.2 The 

increase in delay as a result of AIR–21 

was not limited to delays at LaGuardia. 

Flights that arrived and departed late at 

LaGuardia affected flights at other 

airports and in adjacent airspace as 

well, and by September 2000, flight 

delays at LaGuardia accounted for 25 

percent of the nation’s delays, compared 

to 10 percent for the previous year.3

Concerned about the accelerating 

levels of congestion, flight delays, and 

cancellations and the prospects of 

reaching gridlock, the Port Authority of 

New York and New Jersey (Port 

Authority) attempted to impose a 

temporary moratorium on new flights at 

LaGuardia and requested the assistance 

of the FAA. Using its authority under 49 

U.S.C. 40103, and pending the 

development of a longer term solution, 

the FAA published a Notice of Intent in 

the Federal Register on November 15, 

2000, announcing its intention to 

temporarily cap AIR–21 slot exemptions 

at LaGuardia and to allocate them via a 

lottery (65 FR 69126, November 15, 

2000). The lottery, which was 

conducted on December 4, 2000, was 

premised on the imposition of an 

airfield and airspace capacity 

management limit of 75 scheduled 

operations per hour (plus 6 

unscheduled operations primarily used 

by the general aviation community) 

beginning January 31, 2001 (65 FR 

75765, December 4, 2000). This limit 

still allowed a significant increase in 

operations at the airport above the 

regulatory limits, thus serving 

Congressional objectives while 

stretching capacity to its practical 

limits. The number of AIR–21 slot 

exemptions at LaGuardia was restricted 

to a total of 159 a day between the hours 

of 7 a.m. and 9:59 p.m. As a result of 

the hourly restrictions, the average 

number of aircraft delays at LaGuardia 

fell from 330 per day in October 2000 

to 98 per day in April 2001. 

The December 4, 2000, limits on AIR–

21 slot exemptions and the lottery 

allocation has been extended several 

times to allow the FAA to explore other 

options to control delay at the airport. 

Most recently, the FAA announced in 

the Federal Register a fourteen months 

extension to the current limits and 

allocation of slot exemptions at 

LaGuardia through December 31, 2006 

(70 FR 36998, June 27, 2005). 

Because LaGuardia airport is 

relatively close to mid-town Manhattan, 

many travelers prefer it, and airlines 

wish to meet that demand by operating 

many flights to LaGuardia. LaGuardia 

Airport consistently has been one of 

most congested airports in the nation. 

These facts, coupled with the inability 

to expand the physical airspace and 

airfield capacity of the airport, makes 

LaGuardia one of the most constrained 

airports in our national system. 

Passenger demand for access to 

LaGuardia exceeds available airspace 

and airfield capacity at the airport. This 

proposed rule aims to maximize the 

utilization of this airport, without 

generating unacceptable congestion and 

delay. 

C. Research Into Market-Based and 

Administrative Alternatives at 

LaGuardia 

Over the past several years, the FAA 

and the DOT’s Office of the Secretary of 

Transportation (OST) have taken a 

number of steps to identify and develop 

a market-based mechanism to allocate 

limited capacity at LaGuardia. 


ajbrown on PROD1PC63 with PROPOSAL_3
51362 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 

4Comments of the United States Department of 

Justice in Docket No. FAA–2005–20704. May 24, 

2005, pp. 11–13. 

5As proposed, an Operating Authorization is the 

operational authority assigned to an air carrier by 

the FAA to conduct one scheduled IFR arrival or 

departure operation each week on a specific day of 

the week during a specific 15-minute period at 

LaGuardia. 

On June 12, 2001, the FAA published 

a variety of congestion management 

alternatives in the Federal Register, 

including the use of auctions, 

congestion pricing and administrative 

alternatives, and sought the public’s 

views on the potential use of each of 

these mechanisms at LaGuardia (66 FR 

31731). Due to the September 11, 2001, 

terrorist attacks, the immediate need to 

develop a solution at LaGuardia was 

tempered because of the corresponding 

decrease in passenger demand. The 

FAA still received a substantial number 

of comments. The comments varied—

some supported market-based measures, 

such as congestion pricing, while others 

recognized that the best solution might 

incorporate administrative allocation 

mechanisms. The FAA and OST have 

evaluated the comments and considered 

them in our research initiatives. We also 

have incorporated the views of the 

industry in the development of both this 

proposal and the legislation we intend 

to seek that would permit a marketbased means of controlling congestion 

and delay at LaGuardia. 

1. Auction Roundtable 

In July 2004, the FAA held a 

roundtable to discuss the use of 

auctions to allocate capacity at 

LaGuardia. The purpose of the 

roundtable was twofold. First, the 

roundtable exposed senior FAA and 

OST officials to auctions and the issues 

surrounding their potential 

implementation at LaGuardia. Second, it 

served as an initial stakeholder meeting 

to seek comment on the possible use of 

auctions. 

Several participants pointed to issues 

that would need to be addressed prior 

to implementing an auction of take-off 

or landing authorizations at LaGuardia, 

including the notion of incumbency; 

associated property rights and their 

duration, if any; the impact that 

auctions may have on airport revenues; 

predictability of the auction outcome; 

the impact on small communities; and 

the financial impact on the air carriers 

and their customers. Because of these 

concerns, the air carriers that 

participated in the roundtable appeared 

largely unenthusiastic about the 

potential use of auctions at LaGuardia. 

However, several advantages to an 

auction also were noted. For example, 

auctions effectively allocate scarce 

resources under market conditions and 

thus seem less arbitrary in nature than 

allocating slots under an administrative 

solution (such as a lottery). Another 

benefit to auctions is that they rely on 

markets, which are more robust and 

responsive to industry changes than 

administrative regulations. These 

potential benefits have been echoed by 

the Department of Justice in its 

comments on another congestion 

management rulemaking involving 

operations at Chicago’s O’Hare 

International Airport. In its comments, 

the Department stated that, ‘‘a welldesigned slot auction would both assign 

prices and allocate efficiently scarce 

airport resources, and limit the 

maintenance or accumulation of market 

power by individual carriers.’’ 4

Thus, if the complexities associated 

with implementing an auction at 

LaGuardia can be resolved, an auction 

could provide an economically efficient 

mechanism for allocating ‘‘Operating 

Authorizations’’ 5 at the airport in the 

future. 

2. Congestion Pricing Forum 

The FAA arranged a forum in 

February 2005 to explore the use of 

congestion pricing at airports. The series 

of presentations addressed the 

applicability of congestion pricing to 

control aviation capacity, with a focus 

on LaGuardia, and included 

presentations on the Massachusetts Port 

Authority’s (Massport) congestion 

pricing proposal for Logan International 

Airport, as well as highway and energy 

peak period pricing programs. Several 

participants believed that Massport’s 

model could not be successfully 

deployed at LaGuardia because the level 

of demand at LaGuardia is perceived to 

be too high to implement a revenueneutral congestion pricing policy, as 

adopted at Boston Logan Airport. 

However, other participants believed a 

congestion pricing mechanism was 

feasible and would provide benefits 

associated with allowing the market to 

allocate capacity without the need for 

government imposed slot restrictions. 

3. National Center of Excellence for 

Aviation Operations Research 

The FAA and OST also contracted 

with the National Center of Excellence 

for Aviation Operations Research 

(NEXTOR) to conduct research on 

various proposals to implement at 

LaGuardia upon the expiration of the 

HDR. As part of that research, NEXTOR 

has conducted a number of strategic 

simulations with industry in an effort to 

design and assess the potential 

effectiveness of various allocation 

mechanisms. These mechanisms 

include auctions, congestion pricing, 

and various administrative measures. 

In November 2004, NEXTOR 

conducted a 2-day simulation of 

congestion pricing and various 

administrative measures at LaGuardia. 

The FAA, OST, several industry 

stakeholders and airlines attended the 

workshop. The simulation measured 

airline responses to a variety of 

congestion pricing fees and 

administrative rules. 

In February 2005, NEXTOR 

conducted a second strategic simulation 

in which it demonstrated how an 

auction model could be used to allocate 

capacity. The simulation was structured 

around a mock auction for arrival and 

departure slots at LaGuardia. The 

purpose of this simulation was to 

familiarize the relevant industry and 

government communities with auction 

processes and the specifics of modern 

slot auction design. The exercise also 

elicited views from industry and 

government representatives on the 

overall policy of using auctions to 

allocate arrival and departure capacity. 

The feedback gathered during this 

simulation exercise has generated 

further FAA and OST research on 

auctions. In particular, more work has 

been done to better anticipate the 

impact of aligning ‘‘slots’’ with 

necessary gate space. Additionally, the 

FAA and OST have worked with 

NEXTOR to develop auction rules that 

could incorporate exemptions for 

service to small communities. 

This information will also be 

incorporated in a legislative proposal to 

Congress that will seek authority to 

utilize market-based mechanisms at 

LaGuardia in the future. Such 

legislation would be necessary to 

employ market-based approaches such 

as auctions or congestion pricing at 

LaGuardia because the FAA currently 

does not have the statutory authority to 

assess market-clearing charges for a 

landing or departure authorization. If 

Congress approves the use of marketbased mechanisms as we plan to 

propose, a new rulemaking would be 

necessary to implement such measures 

at LaGuardia. 

II. Continued Need To Limit Operations 

at LaGuardia 

Today’s proposal anticipates the 

complete phase-out of the HDR at 

LaGuardia on January 1, 2007, as 

required by AIR–21. In response, the 

FAA could simply allow the HDR to 

expire and to let events run their course 

without FAA intervention. This 

approach would permit each individual 

airline to manage (and potentially 


ajbrown on PROD1PC63 with PROPOSAL_3
Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 51363 

6The FAA has not had the occasion to issue a 

final opinion on Massport’s program since the 

program has not yet been implemented. 

increase) its own flights. Air traffic 

control procedures and traffic 

management initiatives such as ground 

delay programs, miles-in-trail 

restrictions, and aircraft re-routing, 

would help to ensure that any 

additional flights did not affect air 

safety. However, the congestion and 

delays experienced in the wake of AIR–

21 flight additions would likely recur if 

limitations on the hourly operations at 

LaGuardia were not adopted. Indeed, 

because the delays in late 2000 resulted 

from just two types of operations, it is 

likely that a complete expiration of the 

HDR would lead to even greater delays 

absent a regulation designed to avert 

precipitous growth in operations. 

Because the cost of delays is not fully 

internalized by any individual carrier, 

both experience and theory suggest that 

without any constraint, each carrier 

would, at least initially, continue 

adding flights despite an unacceptable 

level of congestion and delay. This was 

precisely the situation in 2000, and the 

airport cannot accommodate, nor can 

the FAA permit, such unrestrained 

growth at LaGuardia. Delays at 

LaGuardia have a significant 

detrimental impact on the rest of the 

national airspace system, leading to 

nationwide delay and inefficiency. 

Because simply allowing the HDR to 

expire is not a desirable option at 

LaGuardia, the FAA believes that some 

regulatory action to limit congestion at 

the airport is necessary. 

LaGuardia cannot realistically expand 

its runway infrastructure because it 

borders on Bowery Bay and Flushing 

Bay. Thus, an airport expansion project 

like that proposed for Chicago’s O’Hare 

International Airport is not feasible. 

Because of these groundside constraints, 

air traffic management improvements 

such as airspace redesign or changes to 

separation standards would permit 

minimal capacity increases at most. 

Even if these efficiencies can be 

realized, operating constraints likely 

still will be needed at LaGuardia 

because of its physical limitations, 

including runway and taxiway 

constraints. 

The FAA is committed to ensuring 

that excessive delays and congestion do 

not return at LaGuardia after the HDR 

expires. The FAA and OST are 

evaluating appropriate market-based 

mechanisms, such as auctions or 

congestion pricing, for allocating 

capacity at LaGuardia over the longterm. The FAA currently does not have 

full legislative authority to employ such 

mechanisms at LaGuardia or at other 

airports, although the Port Authority 

could currently implement revenueneutral congestion pricing or other 

mechanisms regarding operating rights 

so long as such changes did not require 

a fee or assessment by the Federal 

Government and the Port Authority’s 

program otherwise would be reasonable, 

nonarbitrary and nondiscriminatory; 

would not create an undue burden on 

interstate or foreign commerce; would 

maintain the safe and efficient use of the 

navigable airspace; would not conflict 

with any existing Federal statute or 

regulation including Federal grant 

agreements; and would not create an 

undue burden on the national aviation 

system. As discussed above, Massport 

has developed a revenue-neutral 

congestion pricing program for use at 

Boston’s Logan airport; 6 however, we 

do not believe that a revenue-neutral 

policy would be effective at LaGuardia. 

The demand for access at LaGuardia is 

so high that carriers may simply pay any 

fee imposed in a revenue-neutral model 

rather than changing their practices. 

Consequently, we are seeking the 

legislative authority to conduct auctions 

or congestion pricing at LaGuardia in 

the future. If Congress approves the use 

of market-based mechanisms, a new 

rulemaking would be necessary to 

implement such measures at LaGuardia. 

The FAA has broad authority under 

49 U.S.C. 40103 to regulate the use of 

the navigable airspace of the United 

States. This authority is exclusive to the 

FAA. Section 40103 authorizes the FAA 

to develop plans and policy for the use 

of navigable airspace and to assign the 

use that the FAA deems necessary to 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. The FAA interprets its broad 

statutory authority to ensure the 

efficient use of the navigable airspace to 

encompass management of the 

nationwide system of air commerce and 

air traffic control. AIR–21, while 

phasing out the HDR, did not strip the 

FAA of its authority to place operating 

limitations on air carriers to preserve 

the efficient utilization of the National 

Airspace System (NAS). Indeed, the 

FAA has, out of necessity, restricted the 

number of exemptions to the HDR since 

2001 at LaGuardia, and no one has 

challenged its authority to do so at that 

airport. 

In addition to the FAA’s authority and 

responsibilities over the efficient use of 

airspace, the Secretary of Transportation 

is required to consider several other 

objectives as being in the public 

interest, including: Keeping available a 

variety of adequate, economic, efficient, 

and low-priced air services; placing 

maximum reliance on competitive 

market forces and on actual and 

potential competition; avoiding airline 

industry conditions that would tend to 

allow at least one air carrier 

unreasonably to increase prices, reduce 

services, or exclude competition in air 

transportation; encouraging, developing, 

and maintaining an air transportation 

system relying on actual and potential 

competition; encouraging entry into air 

transportation markets by new and 

existing air carriers and the continued 

strengthening of small air carriers to 

ensure a more effective and competitive 

airline industry; maintaining a complete 

and convenient system of scheduled air 

transportation for small communities; 

ensuring that consumers in all regions 

of the United States, including those in 

small communities and rural and 

remote areas, have access to affordable, 

regularly scheduled air service; and 

acting consistently with obligations of 

the U.S. Government under 

international agreements. See 49 U.S.C. 

40101(a)(4), (6), (10)–(13) and (16), and 

40105(b). 

III. Summary of Proposed Rule 

The FAA proposes to cap hourly 

operations at LaGuardia. Under the 

proposed rule, the FAA would limit the 

number of scheduled flight arrivals and 

departures at LaGuardia Monday 

through Friday from 6:30 a.m. to 9:59 

p.m. and Sunday from noon to 9:59 p.m. 

Similar limits would be placed on 

unscheduled arrivals and departures, 

excluding helicopters, conducted under 

instrument flight rules (IFR). The FAA 

would create ‘‘Operating 

Authorizations’’ according to the hourly 

limit on operations of 75 scheduled 

operations and 6 ‘‘Reservations’’ for 

unscheduled operations. The Operating 

Authorizations would be allocated to 

carriers at the airport based on historic 

usage subject to adjustments required to 

meet the proposed limits. The Operating 

Authorizations would be allocated in 

15-minute increments (i.e., 6:30 a.m. 

through 6:44 a.m., 6:45 a.m. through 

6:59 a.m.), with specified arrivals and 

departures, in order to minimize 

congestion from schedule peaking. The 

FAA believes that the relationship of 

schedule peaks and delays at LaGuardia 

is particularly significant since the 

current airport demand approaches the 

airport’s optimal, good weather 

capacity. Reservations would be 

allocated on a half-hourly basis using a 

reservation system similar to the one 

currently in effect for unscheduled 

flights at the high density airports, 

Chicago O’Hare International Airport, 


ajbrown on PROD1PC63 with PROPOSAL_3
51364 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 

7Source: OAG, August 2001 and August 2005. 

8Average seat size would be equal to the total 

number of seats offered over the year divided by the 

total Operating Authorization days in the year. For 

further detail on the average seat size calculation 

see the ‘‘Use or Lose Requirements’’ section in the 

pages below. 

9For example, if the airport-wide target was 100, 

and a carrier’s average seat size over all its 

Operating Authorizations was 99 seats then the air 

carrier would not have met the ‘‘target’’ and FAA 

would withdraw the Operating Authorization(s) 

that used the smallest aircraft. If one Operating 

Authorization was withdrawn and the air carrier’s 

average aircraft size was re-calculated to equal 100 

seats or more, that carrier would only lose a single 

Operating Authorization. If the re-calculation did 

not result in an average aircraft size of 100 seats or 

more, the FAA would withdraw a second Operating 

Authorization. This process would be repeated 

until the carrier’s average aircraft size was equal to 

or greater than the ‘‘target.’’

10The FAA has also proposed a congestion 

management rule at Chicago O’Hare (Docket No. 

FAA–2005–20704). This proposed rule differs from 

that which was proposed at O’Hare because the 

operational characteristics at LaGuardia and O’Hare 

are significantly different. The primary differences 

between these two proposed rules are (1) that the 

rule at LaGuardia would not be temporary (as is 

anticipated at O’Hare) because increased capacity is 

not expected at LaGuardia, (2) Operating 

Authorizations at LaGuardia would expire and be 

reallocated, and (3) air carriers would be required 

to meet an airport-wide ‘‘target’’ aircraft size at 

LaGuardia. 

and at airports under special traffic 

management programs, whereby an 

operator may obtain a Reservation 

beginning 72 hours in advance of the 

proposed operation. 

To encourage efficient use of scarce 

airspace, holders of Operating 

Authorizations would be required to 

meet an airport-wide average aircraft 

size target annually. Passenger demand 

for access to LaGuardia airport exceeds 

the number of passengers being 

accommodated today. Although the 

airport cannot currently, or in the 

foreseeable future, accommodate a 

greater number of flight operations, the 

airport’s terminal and other groundside 

facilities could accommodate a greater 

number of passengers on the existing 

number of flights. 

The use of commuter equipment 

(aircraft with fewer than 71 seats) 

arriving at LaGuardia from medium and 

large hub airports has increased by more 

than 50 percent since August 2001.7

This trend has resulted in the 

underutilization of airport facilities at 

LaGuardia. 

For example, on April 19, 2005, there 

were 16 flights to Baltimore, MD (a large 

hub) on aircraft with an average of 38 

seats. Similarly, on the same day, there 

were 44 operations to Raleigh-Durham, 

NC (medium hub) on aircraft with an 

average of 50 seats, and 20 flights to 

Philadelphia, PA (large hub) on aircraft 

with an average of 58 seats. While we 

recognize that service to non-hub and 

Small-Hub Airports may only support 

commuter aircraft, serving medium and 

large hub airports repeatedly throughout 

the day with the smaller gauge aircraft 

does not maximize passenger 

throughput or the use of a constrained 

resource. For this reason, the proposed 

rule explicitly encourages the use of 

larger aircraft within the constrained 

operating environment. 

Through this rule the FAA therefore 

proposes to encourage airlines to use 

larger aircraft, on average, than are being 

operated at the airport now (and in the 

recent past) so that a larger share of 

consumer demand will be satisfied. 

Compliance with the airport-wide target 

would be enforced through a Use-orLose provision, which would require 

carriers to report the average number of 

seats offered on all non-exempt 

Operating Authorizations each year.8

Each carrier’s annual ‘‘average seat size’’

would have to be equal to or greater 

than the airport-wide target or the FAA 

would withdraw Operating 

Authorizations from the carrier. The 

FAA first would withdraw the 

Operating Authorization(s) operated 

using the smallest aircraft. The number 

of Operating Authorizations withdrawn 

would depend on how far off the target 

the carrier’s operations were over the 

preceding year. If removing one 

Operating Authorization was sufficient 

to raise the carrier’s average seat size to 

the target level, only that Operating 

Authorization would be withdrawn. If 

more withdrawals were needed in order 

to meet the target, additional Operating 

Authorizations would be withdrawn 

until the target was met.9

While an important goal of this rule 

is to promote efficiency at LaGuardia, 

another objective is to avoid the 

elimination of service to the small and 

non-hub communities that rely on 

service at the airport. Accordingly, the 

FAA proposes that Operating 

Authorizations used for service to 

certain small and non-hub communities 

are exempt from the target aircraft size 

requirement. 

The proposed rule would assign 

expiration dates to all Operating 

Authorizations. Operating 

Authorizations would be allocated in 

2007 with expiration dates ranging from 

2010 through 2019. As Operating 

Authorizations expire they would be 

reallocated with a renewed life span of 

ten years. Establishing a finite lives for 

Operating Authorizations can improve 

efficiency at LaGuardia over time by 

encouraging all airlines to maximize the 

use of a scarce resource and to 

maximize their investment at the 

airport. The authorization’s finite life 

would influence carriers to recognize 

the present value of operating at 

LaGuardia because an Operating 

Authorization ultimately expires, at 

which point it would be worth nothing 

to the existing holder. If a carrier is not 

able to use an Operating Authorization 

profitably, the carrier may sell the 

authorization on the secondary market 

rather than hold the authorization and 

operate it at a loss. This incentive, 

coupled with the Use-or-Lose provision 

which enforces usage of Operating 

Authorizations, would promote efficient 

use of scarce airport resources because 

the carriers that value them the most 

will use the Operating Authorizations.10

IV. The Proposal To Limit Operations 

at LaGuardia 

A. Initial Allocation of Operating 

Authorizations 

Upon expiration of the HDR on 

January 1, 2007, slots will no longer 

exist at LaGuardia. Under today’s 

proposed rule, the FAA would place an 

hourly cap on operations at LaGuardia 

to prevent unacceptable delay that 

would impact the National Airspace 

System. The proposed number of 

operations is consistent with the cap 

that has been in place since January 

2001—75 scheduled operations per 

hour. The FAA’s procedures for 

allocating AIR–21 slot exemptions since 

January 31, 2001, accommodate some 

new entrant carriers’ operations above 

the hourly limit. Under this proposed 

rule, these operations would be 

‘‘grandfathered’’ within the allocated 

hour. However, any Operating 

Authorizations that revert to the FAA in 

those hours would be moved to an hour 

with fewer than 75 operations prior to 

reallocation and assigned within the 

adopted 15 and 30 minute limits. 

Arrival and departure authorizations 

would be distributed in fifteen-minute 

time increments, and Reservations 

would be limited to six per hour. 

The existing cap at LaGuardia 

represents the FAA’s estimate of the 

maximum number of operations that 

can be accommodated at the airport 

with its current configuration and 

without causing excessive additional 

congestion and delay. The FAA is not 

proposing to increase the cap at this 

time, because it is premised on 

favorable weather conditions. 

Furthermore, even with the existing cap 

of 75 scheduled and 6 unscheduled 

operations per hour, LaGuardia has 

consistently been one of the top five 

delayed airports in the United States. In 

fiscal year 2005, LaGuardia ranked as 

the third most delayed airport in the 


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11Source: ASPM. The Inspector General’s FY 

2006 Top Management Challenges also recently 

highlighted the fact that LaGuardia Airport is 

severely delayed. The report points out that in the 

summer of 2005 LaGuardia Airport ranked as the 

fifth most delayed airport in terms of percentage of 

delayed flights and had the longest average minutes 

of delay, with an average of 70.03 minutes of delay 

(p. 23). 

12The FAA has determined that delays are not so 

excessive that it is necessary to reduce the hourly 

cap at the airport at the outset of this proposed rule 

but there would be some schedule depeaking 

required to meet the proposed 15-minute limits. If 

the FAA reduced hourly operations, this would 

impede current service levels and disadvantage the 

carriers as well as the traveling public. 

13A slot ‘‘holder’’ is the air carrier that has 

operational authority, assigned by the FAA, to 

conduct scheduled arrival or departure operations 

at LaGuardia on a particular day of the week during 

a specific time of the day. Each FAA slot under the 

HDR has both a ‘‘holder’’ status and an ‘‘operator’’

status. The ‘‘holder’’ status typically reflects longterm slot rights and does not need to be an air 

carrier. The ‘‘operator’’ status reflects which 

particular carrier is authorized to utilize a slot on 

a particular day. Operator status commonly differs 

from holder status to reflect the assignment of slots 

to a commuter affiliate or partner airline, the lease 

or transfer of slots for a defined period of time, or 

one for one trades or swaps of slots with other 

carriers to accommodate schedule changes. 

nation, with only 71 percent of 

operations arriving on time.11

Operating Authorizations and 

Reservations would not be required on 

Saturdays or Sunday mornings, as there 

is a significant drop in traffic on those 

days, and we have not experienced nor 

do we expect to experience excessive 

congestion during those times. 

However, the FAA would consider 

additional rulemaking to cap operations 

on those days if traffic and delays 

become unacceptable. 

Although operations would be kept at 

the current level of service at LaGuardia, 

the FAA would have the authority 

under this proposal to retain expired 

and returned Operating Authorizations, 

or to retime them to less congested 

periods, if necessary to reduce 

congestion and delays. Operational or 

navigational improvements could 

mitigate the need to retain or retime 

expired or returned Operating 

Authorizations, and the FAA believes 

that such efficiency enhancements may 

be possible. However, this authority 

would enable the FAA to take 

appropriate action against growing 

delay and to manage capacity over the 

life of this rule.12

1. ‘‘Grandfather’’ Provision 

Operating Authorizations initially 

would be grandfathered to each carrier 

at LaGuardia operating slots and slot 

exemptions based on schedules as of 

October 1–6, 2006, provided that the 

published schedules are consistent with 

the 15 and 30 minute limits in this 

proposal. Since carriers are currently 

able to schedule flights anytime within 

the 30-minute slot window, these 

schedules may contribute to the current 

congestion and delays at the airport 

because this practice occasionally 

allows operations to exceed the airport’s 

capacity. This is particularly apparent 

in the peak morning and early evening 

periods. Further, because we will use 

October 1–6, 2006, schedules, which are 

not currently finalized, there is potential 

for the 15-minute schedule peaks to 

increase. One objective of this rule is to 

improve operational performance at the 

airport, and we do not believe it would 

be prudent to grant historic status to 

schedule levels that are not realistic. 

While one way to improve 

performance would be to reduce the 

permitted number of hourly scheduled 

and/or unscheduled operations, we are 

proposing instead to spread demand in 

certain peak periods. If it is necessary to 

de-peak the October 1–6, 2006 

schedules to meet the 15 and 30 minute 

limits in this proposal, we do not 

propose to require any carrier to reduce 

overall hourly operations below its 

initial base or to operate in a different 

hour from the hour allocated under the 

HDR. To achieve the necessary depeaking, the FAA proposes to call for 

voluntary measures to reallocate the 

grandfathered Operating Authorizations 

to less congested time periods within 

the same hour or proposes an 

administrative mechanism such as a 

lottery. We seek comment on these 

options. 

In the event that the HDR expires 

prior to the publication of a Final Rule, 

the FAA would continue to rely on the 

October 1–6, 2006 timeframe as the 

basis for future grandfathering of aircraft 

Operating Authorizations. If a carrier 

were using a slot that is ‘‘held’’ by 

another carrier, the Operating 

Authorization would be grandfathered 

to the carrier that actually holds the 

slot.13 Alternatively, if a carrier were 

using a slot that is held by an entity that 

is not a certificated carrier, the operating 

carrier would be grandfathered the 

Operating Authorization. The FAA 

proposes grandfathering operating rights 

to carriers in an effort to preserve 

service to communities with existing 

service at LaGuardia and to minimize 

disruption at the airport and to the 

traveling public. Although the initial 

‘‘grandfathering’’ of Operating 

Authorizations to incumbent carriers 

does not provide new entrant carriers 

with immediate access to the airport, 

other aspects of this rule, such as finite 

Operating Authorization lives, would 

give those carriers not already operating 

at LaGuardia access to the airport as 

Operating Authorizations expire and are 

reallocated. 

2. Finite Operating Authorizations 

Under the proposed rule, Operating 

Authorizations would have finite lives. 

Operating Authorizations would be 

allocated initially in 2007 with an 

expiration date ranging from the year 

2010 through 2019. The initial 

authorizations would be distributed 

based on actual operations and FAA slot 

allocation records for LaGuardia by 

scheduled carriers as of the week 

October 1–6, 2006. Operating 

Authorizations would then be divided 

into regular Operating Authorizations 

and Operating Authorizations that are 

exempt from the minimum airport seat 

targets. Each authorization would then 

be assigned an expiration date using the 

method discussed below (see ‘‘Schedule 

of Expiration Dates for Grandfathered 

Operating Authorizations’’). The 

method for determining when initial 

allocations expire would ensure that the 

expiration of Operating Authorizations 

is evenly distributed among all carriers 

so that no carrier loses a 

disproportionate number of Operating 

Authorizations at any one time. 

Operating Authorizations that are 

initially allocated in 2007 would be 

granted a life of three to thirteen years. 

The fourth year after the rule is in effect 

(2010), 10 percent of the authorizations 

would expire and be reallocated with a 

renewed ten-year life. Each year 

thereafter, 10 percent of the Operating 

Authorizations would expire and be 

reallocated for 10 years. 

This reallocation approach should 

encourage dynamic access to air 

services at LaGuardia. Determining the 

percentage of capacity that should be 

subject to reallocation annually requires 

establishing a balance between exposing 

airport access to market forces, 

providing access for new entrants, and 

preserving stability at the airport. The 

first three years after the initial 

grandfathering in 2007 would provide 

incumbent carriers with a degree of 

certainty regarding operations at the 

airport. The FAA believes that after 

2009, use of ten-year operating lives 

would strike an appropriate balance 

between very large annual withdrawals 

of Operating Authorizations (which 

could make it less attractive for carriers 

to develop service at the airport) and 

very slow (or no) turnover of Operating 

Authorizations (which could result in 

barriers to entry to the airport). 

Operating Authorizations need to expire 

at varying times so that air service at 

LaGuardia remains stable even as some 

authorizations are subject to 

reallocation. We expect that any 


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51366 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 

14Federal Register, Vol. 70, No. 57 page 15523: 

‘‘Congestion, Delay Reduction and Operating 

Limitations at Chicago O’Hare Airport.’’

15For 10 year Operating Authorizations the 

average ‘‘life’’ would be 5.5 years. The average 

‘‘life’’ is calculated as follows: (Year 1*10%) + (year 

2*10%) + (year 3*10%) + (year 4*10%) + (year 

5*10%) + (year 6*10%) + (year 7*10%) + (year 

8*10%) + (year 9*10%) + (year 10*10%) = 5.5 years 

(the first Operating Authorizations expire in 2010 

so their ‘‘life’’ after 2009 is zero years. The last 

Operating Authorizations to expire from the initial 

grandfathering will expire in 2019 so their ‘‘life’’ is 

ten years. 

reallocation process adopted through 

subsequent rulemaking would provide 

sufficient lead time for an orderly 

schedule planning process by the 

impacted carrier(s). We invite comments 

and analysis on the appropriate lifespan 

of Operating Authorizations. 

If carriers were granted perpetual 

operating rights they may not have 

sufficient incentive to sell or lease 

Operating Authorizations on the 

secondary market to a competitor 

placing a higher value on their use. The 

expiration and reallocation of Operating 

Authorizations should drive carriers to 

maximize the value of their 

authorization because the authorization 

would no longer represent an infinite 

investment interest. The revolving 

allocation process also would provide 

new entrant airlines and incumbent 

airlines wishing to expand service at 

LaGuardia the opportunity to acquire 

Operating Authorizations at LaGuardia 

because there would be a new stock of 

authorizations available each year after 

2010. Establishing finite life for 

Operating Authorizations also meets the 

Department’s mandate of ‘‘placing 

maximum reliance on the competitive 

market forces and on the actual and 

potential competition in airline 

markets.’’ 14

The first Operating Authorizations 

would not expire at LaGuardia until 

2010. The FAA is planning to seek 

legislative authority to provide the 

opportunity for market-based solutions 

to address congestion at LaGuardia. 

Should the agency receive this 

authority, a market-based process would 

be the agency’s preferred reallocation 

methodology, and we would issue a 

proposed rule to implement measures 

for redistributing expired Operating 

Authorizations at that time. 

3. Schedule of Expiration Dates for 

Grandfathered Operating Authorizations 

On January 1, 2007, when the 

Operating Authorizations initially are 

allocated to the carriers, the FAA also 

would establish a schedule for when 

each Operating Authorization would 

expire. This procedure for assigning 

rolling expiration dates would only 

occur one time, at the initial 

grandfathering of Operating 

Authorizations, because as the 

grandfathered Operating Authorizations 

expire each one would be reallocated 

with a 10-year life. 

All ‘‘grandfathered’’ Operating 

Authorizations would have a minimum 

life of 3 years. Beginning in 2010, 10 

percent of the total Operating 

Authorizations allocated to all carriers 

would be withdrawn annually and then 

redistributed. The life of each 

‘‘grandfathered’’ Operating 

Authorization, anywhere from three to 

13 years, would be determined using the 

methodology explained below. 

Under the expiration schedule, each 

carrier’s holdings of Operating 

Authorizations would satisfy two 

conditions: (1) The average ‘‘life’’ of the 

Operating Authorizations would be 

approximately the same for all carriers; 

and (2) expiration of Operating 

Authorizations would be staggered so 

that no carrier would lose a 

disproportionate number of Operating 

Authorizations in a given time period. 

In order to assign expiration dates to 

‘‘grandfathered’’ Operating 

Authorizations the FAA would 

segregate each carrier’s schedule. Nonhub and Small Community Operating 

Authorizations (service to Small-Hub or 

Non-Hub Airports) would be separated 

from the other Operating 

Authorizations. All Operating 

Authorizations would be assigned a 

scheduled expiration date, but 

segregating the authorizations should 

ensure that a disproportionate number 

of Small Community Operating 

Authorizations do not expire any given 

year. 

Each carrier would be entitled to 

authorization life (beyond 2009) on 

average equal to 5.5 years for the 

Operating Authorizations that they 

hold. The average life of Operating 

Authorizations would be equal to 5.5 

years because that is the arithmetic 

mean between one and ten years of life 

beyond 2009. (If Operating 

Authorizations expired over 20 years 

then 5 percent of the Operating 

Authorizations would expire each year 

and the average ‘‘life’’ of an Operating 

Authorization would be 10.5 years.) 15

The expiration dates of the 

authorizations in each quarter-hour 

would be assigned as follows: 

(1) The number of Operating 

Authorizations is equal to the average 

number of ‘‘slot and slot exemption’’

operations held under the HDR in each 

quarter-hour time period; 

(2) The average remaining years of life 

(beyond 2009) for all authorizations is 

roughly 5.5 years; and 

(3) The total years of remaining life 

among all authorizations would be 

distributed so that 10 percent of the 

total Operating Authorizations at the 

airport expire each year. 

The following example illustrates 

how an individual carrier’s Operating 

Authorizations would be assigned 

expiration dates in each quarter-hour 

time period. 

ALLOCATION CARRIER A’S COMMERCIAL OPERATING AUTHORIZATION EXPIRATION DATES

Time window 9:00–9:14 . . . 14:00–14:14 

Carrier A’s Operating Authorization (OA) Holdings .............................. 4 OAs 2 OAs 

Expiration Dates .................................................................................... OA 1—expiration in 2 years.

OA 2—expiration in 3 years. 

OA 3—expiration in 8 years. 

OA 4—expiration in 9 years. 

OA 1—expiration in 2 years. 

OA 2—expiration in 9 years. 

Average = 5.5 years. Average = 5.5 years. 

In this example, Carrier A has 4 slots 

in the 9:00 to 9:14 time period and 2 

slots in the 14:00–14:14 time period. 

The carrier would initially be 

grandfathered these 6 operations (in the 

same time periods) as Operating 

Authorizations under this rule. On 

average, these new authorizations 

would have 5.5 years of life remaining 

after 2009. An equitable allocation for 

this carrier’s 9:00–9:14 Operating 

Authorizations that would average 5.5 

years of life would be the following 

years of remaining life beyond 2009: 2, 

3, 8, and 9. In this case the four 


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16This illustration provides one possible 

distribution of expiration dates for the given 

Operating Authorizations although not the only 

possible expiration schedule; several combinations 

of expiration dates could generate the same 

‘‘remaining life’’ outcome of 5.5 years. 

17Anomalies could occur in order to balance 

these criteria. Rather than 10% of Operating 

Authorizations expiring in a particular quarter hour 

it might be 10% plus or minus 1% in order to get 

the proper total integrated number of Operating 

Authorizations. 

18Reporting requirements are discussed in the 

Use-or-Lose section in the pages below. 

19According to the Port Authority’s 2004 Airport 

Traffic Report, 24.5 million domestic and 

international passengers flew through LaGuardia in 

2004. In various forums the Port Authority has 

indicated that approximately 28.5 million 

passengers could be accommodated at the airport 

on existing facilities and infrastructure. 

20An annual increase to the target aircraft size of 

up to 3 seats per year provides sufficient flexibility 

to adjust the target, if necessary. If it were 

determined that a more significant target increase 

were appropriate in any given year, FAA would 

publish the proposed target increase in the Federal 

Register and seek comments on the proposed target. 

operating authorizations would expire 

at the end of 2011, 2012, 2017, and 

2018. Likewise, an equitable allocation 

for Carrier A’s 14:00–14:14 Operating 

Authorizations would be 2 years and 9 

years; therefore these Operating 

Authorizations would expire in 2011 

and 2018.16 It should be noted that the 

allocation in this case would depend on: 

(1) Satisfying this carrier’s existing 

number of both arrival and departure 

authorizations in each quarter-hour of 

the day; (2) satisfying all other carriers’

existing operations in that quarter-hour; 

and (3) ensuring that 10 percent of all 

authorizations expire each year. The 

FAA is developing a programming tool 

to solve this allocation process.17

The same process would be repeated 

in order to assign expiration dates to the 

Non-hub and Small Community 

Operating Authorizations. 

The programming tool would use two 

objective functions to guide the 

allocation process. The first measures 

the discrepancy between the total of all 

authorization lifetimes allocated to each 

carrier in a quarter-hour and a presumed 

preferred distribution based on that 

carrier’s current holdings. The second 

measures the discrepancy between the 

total of all authorization lifetimes 

allocated to each carrier over the entire 

day and the presumed preferred total for 

the day. By defining two objective 

functions the procedure is able to 

compensate in a later period for any 

discrepancies from the ideal in an 

earlier period. 

B. Congestion Management Upgauging 

Rule at LaGuardia 

1. Average Aircraft Size 

To encourage efficient use of scarce 

air traffic system capacity at LaGuardia, 

the FAA, in consultation with the Port 

Authority, intends to set an airport-wide 

target for the average aircraft size used 

by carriers on scheduled Operating 

Authorizations. The size of an aircraft 

would be measured by the number of 

seats that are offered for sale on the 

aircraft. The target for average fleet seat 

capacity would be based on a passenger 

throughput target for the airport, based 

on the limitations on various terminal 

and ground facilities to handle 

passengers. Thus, the target would be 

based on engineering measures of the 

capacities of the ground facilities. The 

target would be phased in so that 

carriers at LaGuardia would have 

sufficient time to make adjustments to 

their fleets and service routes. The target 

also needs to be consistent with safety 

issues associated with runway length, 

takeoff performance, and landing 

performance. 

The proposed target would range from 

105 seats to 122 seats per aircraft 

depending on which alternatives for the 

proposed exemptions for Non-Hub and 

Small-Hub Airport services is adopted, 

as explained below in the discussion of 

more options. On January 1, 2008, one 

year after the Final Rule is in effect, 

carriers would have to report their use 

of Operating Authorizations over the 

preceding year.18 However, the ‘‘target’’

would not be enforced until the 

following year, January 1, 2009. At that 

point, any carrier that fails to meet the 

‘‘target’’ would be subject to the 

provisions outlined in the Use-or-Lose 

requirement. The FAA believes that this 

phase-in period provides carriers a 

sufficient amount of time after 

publication of the Final Rule to adjust 

their operations as necessary to meet the 

airport-wide target. An FAA required 

average aircraft size target would 

encourage efficient use of the airport 

facilities by increasing passenger 

throughput at LaGuardia and by 

providing incentives for more efficient 

use of the airport’s physical 

infrastructure. 

The preference for larger aircraft is a 

special approach to a unique situation at 

LaGuardia. Demand at LaGuardia 

exceeds the airport’s capacity for flight 

operations throughout the day, and 

there is no prospect for any significant 

increase in capacity for aircraft 

operations at the airport because of its 

physical limitations. On the other hand, 

the airport’s groundside facilities can 

handle more passengers than now use 

the airport.19 Promoting larger aircraft is 

the only means to increase passenger 

access to LaGuardia. Accordingly, in 

these limited circumstances, the 

increase in passenger throughput can be 

considered as a measure of efficiency of 

the use of airspace, and is within the 

FAA’s authority under 49 U.S.C. 

40103(b) to establish regulations for the 

efficient use of airspace. 

The upgauging policy proposed for 

LaGuardia is based on the FAA’s 

authority for efficient management of 

airspace under 49 U.S.C. 40103. This 

limited application of an upgauging 

policy under the FAA’s airspace 

management authority is unrelated to 

airport proprietary authority. The FAA’s 

exercise of its statutory authority for 

efficient airspace management does not 

affect the obligation of airport sponsors 

under Airport Improvement Program 

(AIP) sponsor assurances to provide 

access to all types, kinds, and classes of 

aeronautical use on reasonable and not 

unjustly discriminatory terms. 

The average aircraft size target would 

be monitored on an annual basis, which 

would afford carriers the business 

flexibility to meet the overall average 

fleet goal with whatever combination of 

aircraft they determine is right for each 

route and service over the course of the 

year. Each year, carriers would be 

required to operate, on average, aircraft 

with at least as many seats as specified 

by the target aircraft size or they would 

lose one or more Operating 

Authorizations. 

Every twelve months, the FAA, after 

consultation with the Port Authority, 

would re-evaluate the target and modify 

it as necessary to account for changes in 

the airport’s operations or modifications 

to the capacity at the airport. For 

example, if gate usage requirements 

change or airport infrastructure is 

developed that allows more efficient use 

(e.g., terminal modifications), the target 

could be adjusted upward. In fact, the 

effectiveness of this rule could be 

augmented by sponsor gate use policies 

that maximize the potential of the 

infrastructure. Alternatively, if the 

operations at the airport were negatively 

impacted due to an overly optimistic 

target, the FAA would have the ability 

to adjust the target downward. Because 

the target affects carrier planning of fleet 

mix, routes, staffing requirements, and 

gate usage, the FAA would limit target 

increases to no greater than a 3-seat 

increase in any year.20 On the other 

hand, a decrease in the ‘‘target’’ would 

likely only occur if it were necessary to 

correct unforeseen problems that result 

from an inflated ‘‘target.’’ Carriers 

would not be penalized from operating 

aircraft that are larger than the airportwide target, so a decrease in the target 


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21Carriers that have 10 or fewer Operating 

Authorizations would not be subject to the airport 

target since all their Operating Authorizations 

would be considered ‘‘baseline’’ operations. 

22Operations to these communities are typically 

on smaller-sized aircraft. 

23There are several HDR slot categories that limit 

aircraft size. For example, Commuter Turboprop 

Slots require aircraft with less than 75 seats; 

Commuter Turbojet Slots limit seats to 55 or less; 

and AIR–21Small Hub/Non-Hub Airport 

exemptions require aircraft with 70 seats or less. 

24A Non-Hub Airport is a commercial service 

airport that has more than 10,000 annual passenger 

boardings but less than 0.05% of the total United 

States annual passenger boardings. 

25Small-Hub Airports are locations with at least 

.05%, but less than .25% of annual passenger 

boardings. Small Hub Airports that are within 300 

miles of LaGuardia and have existing service 

include: Albany, Burlington, Portland, Richmond, 

Rochester, Syracuse, and Newport News/ 

Williamsburg. Source: T–100 Data, April 2004–

March 2005. 

26Nantucket, Bangor, Charlottesville, Hyannis, 

Wilmington, Ithaca, Lebanon, and Martha’s 

Vineyard are Non-Hub Airports with existing 

service at LaGuardia. Source: T–100 Data, April 

2004–March 2005. 

is not expected to have a negative 

impact on carriers. 

To assess the impact of upgauging at 

LaGuardia, NEXTOR has conducted 

simulations that examine the behavior 

of the airport runway, taxiway, and gate 

operations in the presence of a ‘‘highdemand’’ schedule when 25 percent of 

the regional jets are upgauged to 

narrow-body jets. By extending several 

Official Airline Guide (OAG) schedules 

to a representative ‘‘high-demand’’

arrival and departure schedule, 

NEXTOR analyzed the impact of 

upgauging using Total Airport & 

Airspace Modeler (TAAM) for 

LaGuardia. Experts from the FAA air 

traffic control tower and representatives 

from the Port Authority validated the 

operational assumptions regarding gate, 

taxiway, and runway utilization 

parameters used in the TAAM 

simulation model. Results show that 

representative upgauging by the airlines 

from regional jets to narrow-body jets 

could result in increased passenger 

throughput without negative impact on 

LaGuardia airport operations, flight 

delays or passenger delays. 

2. Services Not Subject to the Average 

Aircraft Size Target 

a. Baseline Operations. Each carrier 

would be granted a ‘‘baseline’’ of up to 

10 Operating Authorizations per day 

that would not be subject to the target 

aircraft size requirement in this 

proposed rule.21 The FAA has 

tentatively determined that each carrier 

should be assessed a minimum number 

of takeoffs and landings that are not at 

risk should its overall operations not 

meet the airport-wide target. While that 

number should be sufficiently large to 

permit minimal fleet and route 

flexibility, it should not overshadow the 

goal of increased throughput. A baseline 

of 10 Operating Authorizations per day 

should provide carriers with a stable 

base of operations, minimizing the 

disruption on carrier schedules and 

operations at the airport while not 

compromising the goal of increased 

passenger throughput at the airport. 

Each year, carriers would notify FAA 

which of their Operating Authorizations 

they intend to designate as ‘‘baseline’’

operations, and these operations would 

not be subject to the target and Use-orLose provisions of the rule based on 

average aircraft size target. 

A baseline is particularly important 

for carriers that have operated at 

LaGuardia for decades and developed 

their networks to include service at the 

airport. Similarly, carriers with limited 

ability to adjust their fleet size would be 

assured that their baseline operations 

would not be at risk of being withdrawn 

for non-compliance with the target 

aircraft size requirement. New entrants 

and carriers with a limited number of 

Operating Authorizations at LaGuardia 

may not have much fleet versatility at 

the airport, particularly if they do not 

have excess over-night parking and gate 

space that can be used to interchange 

aircraft. Although the airport target 

would not bind baseline operations, 

carriers would not be restricted from 

operating aircraft equal to or larger than 

the target aircraft size with these 

baseline Operating Authorizations. 

b. Non-Hub and Small-Hub Airport 

Services. While a primary goal of this 

rule is to promote efficient use of the 

airport, the DOT’s mandate to consider 

the public interest requires us to 

encourage the maintenance of 

scheduled services to small 

communities. Congress recognized this 

public interest when it required 

exemptions from the HDR in AIR–21 for 

small community service. Because 

regular demand to and from LaGuardia 

from these communities may not be 

sufficient for a carrier to meet the 

airport-wide target,22 some type of relief 

may be needed. 

In an effort to preserve service to 

these communities, the FAA is 

proposing to create a separate pool of 

Operating Authorizations, to be used to 

provide service to non-hub and smallhub communities, that would be 

excepted from the target aircraft size 

requirement. Unlike the HDR or the 

AIR–21 slot exemption provisions, air 

carriers would not be limited to 

operating aircraft of a certain size.23

Instead, carriers with Non-Hub and 

Small-Hub Airport operations would 

have the flexibility to fly aircraft of 

whatever size they want to these 

communities. 

The FAA requests comments on the 

relative merits of three non-hub and 

small-hub options, as well as any 

combination of the three: 

(1) The FAA would create a pool of 

Operating Authorizations for service to 

Non-Hub Airports. These Operating 

Authorizations would be excused from 

the target aircraft size requirement. The 

pool of non-hub Operating 

Authorizations would be based on the 

service level to Non-Hub Airports 

during the week of October 1–6, 2006; 

although any Non-Hub Airport would 

be eligible for service under this target 

exemption.24

(2) The FAA would create a pool of 

Operating Authorizations for service to 

Non-Hub Airports and all Small-Hub 

Airports within 300 miles of 

LaGuardia 25 (‘‘Local Small 

Communities’’). These Operating 

Authorizations would not be subject to 

the target aircraft size requirement. The 

pool of Non-Hub and Local Small 

Community Operating Authorizations 

would be based on the service level to 

Non-Hub and Local Small Communities 

during the week of October 1–6, 2006. 

However, any Non-Hub Airport SmallHub Airport within 300 miles of 

LaGuardia would be eligible for service 

under this target exemption. 

(3) The FAA would create a pool of 

Operating Authorizations for service to 

Non-Hub Airports, Small-Hub Airports 

that have existing service at LaGuardia, 

and Small-Hub Airports within 300 

miles of LaGuardia (‘‘Local Small 

Communities’’). The pool of Non-Hub 

and Local Small Community Operating 

Authorizations would be based on the 

service level to Non-Hub and Small-Hub 

Airports during the week of October 1–

6, 2006. However, any Non-Hub Airport 

or Small-Hub Airport would be eligible 

for service under this target exemption. 

Under the first option, the FAA would 

exclude operations arriving and 

departing from Non-Hub Airports from 

the proposed target aircraft size 

requirement. The number of Operating 

Authorizations that would be excluded 

from the target for Non-Hub Airport 

service would be based on level of 

operations to non-hub cities during the 

week of October 1–6, 2006.26 Although 

we cannot fully anticipate what may be 

the level of operations for October 1–6, 

2006, we believe the levels during the 

twelve month period of April 2004 

through March 2005 are representative. 

Over the twelve-month period of April 

2004 through March 2005 there was an 


ajbrown on PROD1PC63 with PROPOSAL_3
Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 51369 

27Source: T–100 Data, April 2004–March 2005. 

28Small Hub Airports that are within 300 miles 

of LaGuardia and have existing service include: 

Albany, Burlington, Portland, Richmond, Rochester, 

Syracuse and Newport News/Williamsburg. (NonHub Airports with existing service are listed in 

footnote above). Source: T–100 Data, April 2004–

March 2005. 

29Source: T–100 Data, April 2004–March 2005. 

30FAA believes that there is merit in preserving 

nonstop service to non and small hub cities within 

300 miles of LaGuardia. If passengers in these cities 

had to make a connection in order to fly into 

LaGuardia, they likely would fly further away from 

LaGuardia to reach the connecting airport. 

31Non Hub and Small Hub Operating 

Authorizations could only be used for service to 

qualifying airports; service to medium and large 

hubs would not be permitted with this pool of 

Operating Authorizations. 

32The following non hub and small hub airports 

have existing service to and from LaGuardia: 

Nantucket, MA; Bangor, ME; Charlottesville, VA; 

Hyannis, MA; Wilmington, NC; Ithaca, NY; 

Lebanon, NH; Martha’s Vineyard, MA; Albany, NY; 

Burlington, VT; Portland, ME; Richmond, VA; 

Rochester, NY; Syracuse, NY; Newport News/ 

Williamsburg, VA; Birmingham, AL; Columbia, SC; 

Akron/Canton, OH; Charleston, SC; Dayton, OH; 

Greensboro, NC; Greenville-Spartanburg, SC; 

Lexington Blue Grass, KY; Myrtle Beach, SC; 

Roanoke, VA; Savannah, GA; Knoxville, TN; and 

Fayetteville, AR. Source: T–100 Data, April 2004–

March 2005. 

33Source: T–100 Data, April 2004–March 2005. 

34This Non Hub and Small Hub option would 

provide the greatest number of target-exemptions 

for service to small communities (approximately 

200 per day). These Non Hub and Small 

Community Operating Authorizations combined 

with the target-exemptions for ‘‘baseline’’

operations would equate to approximately 30% of 

the Operating Authorizations at the airport. 

average of forty-five operations arriving 

and departing to Non-Hub Airports per 

day.27 Although the pool of Operating 

Authorizations that would be excluded 

from the target aircraft size requirement 

would remain fixed, any Non-Hub 

Airport could be served through these 

target exclusions. Additional flights to 

or from these non-hub cities (beyond the 

fixed number of Operating 

Authorizations that are excluded from 

the target) would be subject to the target 

aircraft size requirement. This approach 

maintains a level of service to Non-Hub 

Airports (that typically do not support 

operations on large aircraft) while 

preserving the possibility for other NonHub Airports that do not currently have 

service at LaGuardia to gain this same 

access to the airport. 

The pool of Operating Authorizations 

that would be excluded from the target 

for service to non-hub communities 

would be allocated in the same manner 

as the other Operating Authorizations. 

Air carriers currently providing service 

to non-hub communities would be 

allocated Operating Authorizations for 

‘‘Non-hub’’ service at the October 1–6, 

2006, level. If an air carrier with a Nonhub Operating Authorization wanted to 

sell or lease the Operating Authorization 

in the secondary market, it could do so, 

but the Operating Authorization would 

have to be sold or leased as a ‘‘Nonhub’’ Operating Authorization. 

Therefore, the pool of ‘‘Non-hub’’

exemptions would remain fixed 

throughout the life of the rule. 

The second option is similar to the 

first; however, it provides a larger pool 

of Operating Authorizations that would 

be excused from the average aircraft size 

target. The pool of Operating 

Authorizations in this option would be 

equivalent to the October 1–6, 2006, 

level of service to Non-Hub Airports and 

to Small-Hub Airports within 300 miles 

of LaGuardia.28 Over the twelve-month 

period of April 2004 through March 

2005 there was an average of 121 

operations arriving and departing to 

these airports per day.29 Although the 

pool of exempt Operating 

Authorizations would be fixed to 

October 1–6, 2006, level of service, air 

carriers could use these Non-hub and 

Local Small Community Operating 

Authorizations to provide service to any 

Non-Hub Airport or any Small-Hub 

airport within 300 miles of the airport; 

they would not be restricted to serving 

just the non-hub and small-hub cities 

that have service at LaGuardia as of 

October 1–6, 2006.30

However, as under the first option, 

the number of target-exempt flights to 

Non-hubs and Local Small Communities 

would be limited to the number of 

Operating Authorizations in the Nonhub and Local Small Community pool. 

Additional flights to or from these cities 

would be subject to the seat size 

requirement of this rule. 

Because the pool of Non-hub and 

Local Small Community Operating 

Authorizations would remain fixed, if 

an air carrier wanted to start new 

service to a qualified Small or Non-Hub 

Airport it could do so using these 

excluded Operating Authorizations, but 

it would have to forego another NonHub or Small-Hub Airport. As a result, 

the amount of service to or from a 

particular non-hub or small-hub 

community might vary over time, but 

the total number of exempt operations 

to such communities would remain the 

same.31

Operating Authorizations for service 

to non-hub and Local Small 

Communities would be allocated in the 

same manner as described in the first 

option. Similarly, if an air carrier wishes 

to sell or lease a Non-hub and Small 

Community Operating Authorization on 

the secondary market, it would be 

leased or sold as such. 

The third exemption option would 

provide the greatest number of 

exemptions to small and non-hub 

communities. The FAA would exempt 

flights to all Non-Hub Airports, all 

Small-Hub Airports that have service at 

LaGuardia as of October 1–6, 2006, and 

any Small-Hub Airports within 300 

miles of LaGuardia.32 Operating 

Authorizations would be 

‘‘grandfathered’’ to carriers that provide 

service to these airports as October 1–

6, and the transfer of these Non-hub and 

Local Small Community Operating 

Authorizations in the secondary market 

would be subject to the same type of 

restrictions as described in the two 

previous alternatives. The total number 

of such exemptions would be fixed but 

the number of operations to any one 

Non-Hub or Small-Hub Airport might 

vary over time. 

The pool under this third exemption 

option would be equal to the October 1–

6, 2006, level of service from LaGuardia 

to Non-Hub and Small-Hub Airports. 

Over the twelve-month period of April 

2004 through March 2005 there was an 

average of 200 operations arriving and 

departing to these airports per day.33

This approach would maximize service 

to small communities, but could remove 

as much as 30 percent of the overall 

fleet from the population of aircraft 

required to meet a minimum average 

seat size.34 In order to increase 

passenger throughput, the airport-wide 

target may be so large as to be 

impractical because the higher the 

airport-wide target, the more gate 

limitations (certain gates can only 

accommodate small to medium sized 

aircraft). Additionally, the FAA is aware 

that fewer markets support operations 

on large aircraft than on small-medium 

sized aircraft. 

The FAA seeks comment on the 

merits and practicality of the three nonhub and small-hub exemption 

alternatives outlined above. We want to 

make clear in any event that we are not 

proposing to limit service to non-hub or 

small communities with aircraft meeting 

the targeted size. 

3. Calculation of the Average Aircraft 

Size Target 

The airport-wide target for the average 

aircraft size at LaGuardia is dependent 

on which of the Non-hub and Small-hub 

alternatives is ultimately adopted in the 

Final Rule. The target would vary 

because the number of exempt 

Operating Authorizations is different in 

each scenario. The first scenario, which 

only provides target exemptions for 

Non-Hub Airports, would produce the 

lowest airport-wide target since there 

would only be a limited number of 


ajbrown on PROD1PC63 with PROPOSAL_3
51370 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 

35The Port Authority has indicated that passenger 

demand for access to the airport is forecasted at 30 

million annual passengers (FAA’s Terminal Area 

Forecast (TAF) concurs that passenger demand at 

LaGuardia will reach 30 million annual passenger 

in the next couple of years). However, landside 

limitations on the terminals and roadways of the 

airport restrict passenger throughput to 

approximately 28.5 million passengers per year. 

36Part 121 and scheduled Part 135 departure data 

is submitted by carriers to the Office of Airline 

Information (OAI) within the Bureau of 

Transportation Statistics (BTS) under 14 CFR Parts 

241 and 298, respectively. The airlines submit the 

data on Form 41, Schedule T–100 ‘‘ U.S. Air Carrier 

Traffic and Capacity Data By Nonstop Segment and 

On-flight Market and Form 41, Schedule T–100 

(f)—Foreign Air Carrier Traffic and Capacity Data 

by Nonstop Segment and On-flight Market. 

37Operating Authorization days would be 

Monday through Friday and Sunday afternoons. 

38Because unused Operating Authorizations must 

be included in the average seat size calculation the 

Use-or-Lose requirement ensures Operating 

Authorizations are used and not sitting idle. 

39The following example illustrates the average 

seat size computation for an air carrier that holds 

three evening Operating Authorizations that are not 

excluded from the target. 

Each year there would be approximately 313 

Operating Authorization days for each of the 

Operating Authorizations (365 days ¥52 

Saturdays). 

*If the carrier offered a total of 33,000 seats over 

the year on the first Operating Authorization the 

average seat size on that Operating Authorization 

would be: 33,000/313 days = 105 seats per aircraft; 

*If the carrier offered a total of 40,000 seats over 

the year on the second Operating Authorization the 

average seat size on that Operating Authorization 

would be: 40,000/313 days = 128 seats per aircraft; 

and 

*If the carrier offered 27,000 seats over the year 

on the third Operating Authorization the average 

seat size on that Operating Authorization would be: 

27,000/313 days = 86 seats per aircraft. 

*The air carrier’s average seat size over all three 

Operating Authorizations would be equal to: 

100,000 seats/939 Operating Authorization Days = 

107 seats per aircraft. 

40 It should be noted that several airlines that 

responded to the Chicago O’Hare Notice of 

Proposed Rulemaking (Docket No. FAA–2005–

20704) supported a Use-or-Lose requirement at 

O’Hare when presented with the option of not 

having a usage requirement at the airport. It was 

generally suggested that a minimum usage 

requirement should be included to prevent carriers 

from retaining Arrival Authorizations for which 

they have no use. 

Operating Authorizations exempt from 

the target. Alternatively, the third 

scenario, which would also exempt all 

Small-Hub Airports that have existing 

service at LaGuardia and Local Small 

Communities, produces the largest 

target because roughly 30 percent of the 

daily operations would be removed 

from the target requirement at the 

airport. The targets under each of these 

three scenarios are presented in the 

table below. 

The FAA computed the target aircraft 

size for LaGuardia using an airport 

passenger throughput target, as 

determined by the Port Authority, of 

28.5 million passengers per year.35 T–

100 data from April 2004 through March 

2005 reports roughly 372,000 

commercial operations over the twelvemonth period.36 In order to calculate the 

target size, the FAA assumed the 

number of commercial operations at 

LaGuardia would remain constant at 75 

per hour. Using T–100 data to track 

historic usage patterns and service 

routes, the FAA has tentatively 

determined that the following airportwide targets are appropriate, depending 

on which small community exemption 

alternative is ultimately adopted. 

Currently, aircraft operating at 

LaGuardia have 98 seats, on average. 

Option 1: Non-Hub Airports and up to 

10 Baseline Operations per Carrier 

would be Exempt 

Target Average Aircraft Size = 105 

Seats 

Option 2: Non-Hub Airports, Small-Hub 

Airports < 300 Miles and up to 10 

Baseline Operations per Carrier 

would be Exempt 

Target Average Aircraft Size = 116 

Seats 

Option 3: Non-Hub Airports, Small-Hub 

Airports with Existing Service, 

Small-Hub Airports < 300 Miles 

and up to 10 Baseline Operations 

per Carrier would be Exempt 

Target Average Aircraft Size = 122 

Seats 

The FAA seeks comments on each of 

the non-hub and small-hub exemption 

alternatives and the corresponding 

airport-wide targets. 

4. Use-or-Lose Requirements 

a. Use-or-Lose Requirement Based on 

Average Aircraft Size. The FAA is 

proposing a requirement to obtain 

compliance with the ‘‘target’’ aircraft 

size requirement at the airport. The FAA 

would administer the requirement on an 

annual basis. Carriers would be required 

to submit annual reports of usage, 

including a record of (1) the FAA 

assigned priority number, time, and 

arrival or departure designation; (2) the 

operating carrier; (3) the aircraft-type; 

(4) the number of passenger seats on the 

aircraft for each operation; (5) the date 

and time of each of its operations using 

an Operating Authorization, including 

flight number, and origin/destination; 

and (6) the average number of seats 

flown for all operations over the year. 

Statistics on the use of baseline 

authorizations and target exclusions for 

service to Non-Hub and Small-Hub 

Airports would be required in the 

report, although the number of seats 

flown on these operations would not be 

included in the carrier’s average seat 

size calculation. The annual report 

would be due to the FAA no later than 

March 1st of each year, starting March 

1, 2008. 

The average seat size would be 

computed by totaling the number of 

seats flown over the year (on each 

Operating Authorization, excluding 

baseline operations and operations that 

serve Non-Hub and Small-Hub 

Airports), divided by the total number 

Operating Authorization days.37

Operating Authorizations that are not 

used on any given day would be 

presumed to have a zero seat capacity.38

A carrier’s average number of seats on 

all Operating Authorizations combined 

during the year must meet the annual 

airport-wide for the carrier to be in 

compliance with the utilization 

requirement.39

If a carrier fails to meet the average 

seat size requirement for the year, it 

would be required to give up sufficient 

Operating Authorization(s) beginning 

with those that use the smallest average 

aircraft size until the remainder meet 

the target from the preceding year. (If 

two or more Operating Authorizations 

have the same average aircraft size and 

are tied as having the smallest average 

seat size, the carrier could chose which 

of those Operating Authorization(s) 

would be withdrawn unless the FAA 

determines that there is an operational 

need to withdraw one Operating 

Authorization over another.) The FAA 

would provide 45 days notice to the 

carrier prior to withdrawing Operating 

Authorization(s). The Use-or-Lose 

requirement would be waived during 

the Thanksgiving, Christmas, and New 

Year’s holiday periods. The Use-or-Lose 

requirement could also be waived 

during a strike, or in other 

circumstances outside a carrier’s 

control, as determined by the FAA. 

b. Use-or-Lose Requirement for 

‘‘Baseline’’ and ‘‘ Small Community’’ 

Operating Authorizations. The FAA 

believes that a minimum usage 

requirement is appropriate for Operating 

Authorizations excluded from the target 

aircraft requirement. Although these 

operations are not subject to the 

upgauging aspect of the rule, these 

resources should be used effectively. 

Depending on which non-hub and 

small-hub exemption scenario is 

selected in the final rule, a significant 

number of Operating Authorizations 

may not be subject to the airport-wide 

target. Therefore, the omission of a Useor-Lose requirement on these exempt 

Operating Authorizations as well as the 

Baseline Operations would pose a risk 

that a sizable number of Operating 

Authorizations could be used 

inadequately.40


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Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 51371 

41This lottery differs from that which was 

proposed in the congestion management rule at 

Chicago’s O’Hare. The lottery to reallocate 

withdrawn operations at O’Hare would consist of 

two rounds. In the first round, only new entrants 

and limited incumbents would be permitted to 

participate. In the second round any remaining 

Arrival Authorizations would be assigned by lottery 

to incumbent carriers at O’Hare. 

The lottery proposed herein for LaGuardia also 

provides a preference for limited incumbents and 

new entrants, but does not preclude incumbent 

carriers from participating in the first round of the 

lottery. Since this proposed rule is expected to have 

a longer duration than that which was proposed at 

O’Hare, the FAA determined that it is important to 

implement a lottery that provides all carriers access 

to reallocated/withdrawn Operating Authorizations. 

42Carrier D’s weight in the lottery is calculated 

as follows: 

Carrier D’s share = 2 Operating Authorizations/ 

80 Operating Authorizations = .025. 

Carrier D’s weight in the lottery = 1/.025 = 40. 

The FAA proposes to adopt a Use-orLose provision that would require air 

carriers to utilize each authorization 

they hold at least 80 percent of the time 

over a two-month reporting period. Any 

Operating Authorization used less 

frequently would be withdrawn after 

notice to the holder. Under this 

alternative, the 80 percent usage 

requirement would apply only during 

the restricted hours (i.e. Saturdays and 

Sunday mornings would be excluded 

from the usage requirement). The 

Thanksgiving, Christmas, and New 

Year’s holiday periods could also be 

excluded. The Use-or-Lose requirement 

would also be waived during a strike, or 

in other circumstances as determined by 

the FAA. 

This proposed Use-or-Lose 

requirement mirrors one of the 

minimum usage alternatives presented 

in the Chicago O’Hare NPRM and 

widely supported by the commenters. 

Nevertheless, FAA seeks comment 

regarding the appropriate minimum 

usage requirement for Operating 

Authorizations that are not subject to 

the aircraft size target at LaGuardia. 

5. Lottery for the Reallocation of Certain 

Operating Authorizations 

The FAA is proposing to implement 

a weighted lottery for reassigning 

authorizations that are returned to the 

FAA, withdrawn as a result of failing to 

meet the usage requirements under the 

Use-or-Lose provision of the rule, or not 

assigned by the FAA as part of the 

initial allocation. Under this system, 

each carrier’s weight in the lottery 

would be inversely proportional to the 

carrier’s share of total operations at 

LaGuardia. If a potential new entrant 

wishes to participate in the lottery, its 

weight would equal that of a carrier 

with a single roundtrip flight at the 

airport. 

An inversely weighted lottery would 

provide preferences to carriers that do 

not have a presence at LaGuardia and to 

those carriers with a limited number of 

Operating Authorizations at the 

airport.41 This approach meets the 

Secretary of Transportation’s public 

interest objectives by keeping available 

a variety of adequate, economic, 

efficient, and low-priced air services; 

placing maximum reliance on 

competitive market forces and on actual 

and potential competition; encouraging 

entry into air transportation markets by 

new and existing air carriers; and 

continuing to strengthen small air 

carriers to ensure a more effective and 

competitive airline industry. See 49 

U.S.C. 40101(a)(4), (6), (10)–(13) and 

(16), and 40105(b). To further these 

goals and to assure efficient and 

effective use of the authorizations, 

Operating Authorizations obtained 

through a weighted lottery may not be 

bought, sold, leased, or otherwise 

transferred until one year has elapsed 

from their assignment. 

An inverse lottery disadvantages 

those carriers with the largest presence 

at LaGuardia because they will always 

be less likely to win an Operating 

Authorization than other carriers with a 

smaller presence. However, an inverse 

lottery is appropriate in this limited 

circumstance because under our 

proposal the incumbent carriers at the 

airport would have already received 

numerous Operating Authorizations in 

the initial allocation process. 

This lottery approach is limited to 

Operating Authorizations that are lost 

via the Use-or-Lose provision or are 

otherwise returned to the FAA for nonuse and to any Operating Authorizations 

that are not assigned by the FAA as part 

of the initial allocation. Those Operating 

Authorizations that revert back to the 

FAA as a function of the Operating 

Authorizations’ finite life are not 

impacted by this lottery. The method for 

reallocating expired Operating 

Authorizations has not been decided; 

however, the FAA preliminarily finds 

that an inverse lottery would not be 

appropriate for reallocation. The FAA 

believes it may be unfair to impose an 

inverse lottery on those withdrawals 

because the incumbent carriers would 

repeatedly be penalized as the lowest 

weighted lottery participant. 

The following provides an illustration 

of how weights would be assigned to 

each carrier in the lottery if there were 

three carriers participating in the 

lottery. Assume Carrier A has 50 

Operating Authorizations, Carrier B has 

20 Operating Authorizations, and 

Carrier C has 10 Operating 

Authorizations, for a total of 80 

Operating Authorizations. 

Carrier A’s share is 50/80 = 0.600 

Carrier B’s share is 20/80 = 0.250 

Carrier C’s share is 10/80 = 0.125 

The inverse of each carrier’s market 

share determines each carrier’s weight 

in the lottery. Thus: 

Carrier A’s weight in the lottery is: 1 / 0.6 = 

1.67 

Carrier B’s weight in the lottery is: 1 / 0.25 = 

4.0 

Carrier C’s weight in the lottery is: 1 / 0.125 

= 8.0 

Each carrier’s odds of winning the 

lottery are a function of their weight in 

the lottery. In this example, Carrier A 

holds the greatest number of Operating 

Authorizations at LaGuardia, and 

therefore has the lowest odds of 

winning the lottery. The odds that each 

carrier would win are as follows: 

Carrier A’s chances of winning are 1.67 / 

13.67 = 12.22% 

Carrier B’s chances of winning are 4 / 13.67 

= 29.26% 

Carrier C’s chances of winning are 8 / 13.67 

= 58.52% 

If a new entrant carrier, Carrier D, also 

enters the lottery it would be assigned 

a weight as if it had one round trip flight 

(2 Operating Authorizations) at the 

airport. The odds that each carrier 

would win are adjusted as follows: 

Total weight in the lottery would be 

increased to 13.67 + 40 = 53.67 42, so: 

A’s chances of winning are 1.67 / 53.67 = 

3.1% 

B’s chances of winning are 4 / 53.67 = 7.5% 

C’s chances of winning are 8 / 53.67 = 14.9% 

D’s chances of winning are 40 / 53.67 = 

74.5% 

Alternatively, the FAA is considering 

permitting the sale of Operating 

Authorizations that would otherwise be 

withdrawn or returned in a blind 

secondary market. This approach has 

the benefit of not penalizing, even 

marginally, carriers with sizeable 

Operating Authorizations because their 

acquisition opportunity would not be 

hampered by their existing holdings. 

However, this mechanism would not 

provide any advantage for new carriers 

or for those carriers with only a few 

Operating Authorizations. 

Under the blind secondary market 

scenario, if a carrier did not meet the 

target aircraft size requirement, the FAA 

would provide 45 days advance notice 

to the carrier that it has failed to meet 

the usage requirement and an Operating 

Authorization(s) was to be withdrawn. 

The Operating Authorization would 

then be posted for sale in the blind 


ajbrown on PROD1PC63 with PROPOSAL_3
51372 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Proposed Rules 

43 ‘‘Transparency means that the identity of 

buyers and sellers is known. Transparency in the 

secondary market permits strategic sales, leases, 

and purchases by incumbents to prevent new 

entry.’’ Comments of the United States Department 

of Justice in Docket No. FAA–2005–20704. May 24, 

2005, pp. 5–9. 

44 Id. 

45We learned under the O’Hare rulemaking that 

most commenters believe that each carrier should 

be allowed to consider the value of specific gates, 

baggage handling, marketing arrangements, and 

other potential offers in lieu of cash. 46 49 U.S.C. 47107(a). 

auction (see details of Alternative 1 in 

the Secondary Market discussion 

below). Proceeds of a sale would go to 

the airline that lost the Operating 

Authorization and any unsold Operating 

Authorizations would revert to the FAA 

and be reallocated in a lottery. 

The FAA requests comments on the 

relative merits of these two 

reassignment methodologies for 

withdrawn Operating Authorizations. 

C. Commercial Options for Carriers 

1. Secondary Market 

Under the HDR, the Department 

received complaints about the buy/sell 

process as it was implemented. The rule 

permitted the buyer and seller to deal 

directly with each other. Incumbent 

carriers would refuse to sell to a new 

entrant or a competitive airline 

according to the reports received by the 

Department, raising concerns with the 

‘‘transparency’’ 43 of the existing 

secondary market. There was no 

requirement for the seller to advise 

parties that slots were available, limiting 

opportunity for other carriers to make 

an offer for the slot. Finally, the terms 

of a transaction were not disclosed 

making it more difficult to develop 

future bidding strategies, which may 

have included cash and non-cash assets. 

The Department of Justice submitted 

comments in the O’Hare rulemaking, 

which supported the use of a blind 

market or a non-transparent market, 

because the secondary markets at 

LaGuardia and O’Hare under the HDR 

have not been ‘‘sufficiently liquid.’’ 44 A 

blind secondary market effectively 

eliminates non-cash assets to be bid. We 

acknowledge that a proposal to prohibit 

the use of non-monetary considerations 

in transactions involving Operating 

Authorizations may be unpopular.45

Cash equivalent consideration allows 

the buyer of an Operating Authorization 

to offer items that may be mutually 

beneficial and less ‘‘cost’’ than cash. 

Perhaps, given the industry’s liquidity 

problems and the operational needs of 

carriers at various airports, an airline 

selling or buying an Operating 

Authorization ought to be able to accept 

or offer non-monetary consideration (i.e. 

services, ground handling) as part of the 

bid. By opening the auction to pledges 

of assets other than money, we would 

widen the auction market to cashstrapped airlines. 

Nevertheless, we are concerned that 

the uniqueness of non-monetary assets, 

such as baggage handling and marketing 

arrangements, would effectively 

undermine any form of a ‘‘blind’’

secondary market. The inclusion of nonmonetary assets would make it virtually 

impossible to hide identities during the 

bid evaluation process. In order for the 

buyer to put together an attractive 

package and assign a value to non-cash 

assets, the seller must be known. 

Similarly, a seller cannot assess the 

value of an asset if it does not know 

who is specifically offering the asset and 

how the asset would be transferred. 

Furthermore, if non-cash assets are 

pledged, the parties would want to 

negotiate terms, including but not 

limited to, the terms of any warranties, 

approval and agreement enforceability, 

and damages for any breach of the 

agreement. It is unreasonable to assume 

that the FAA, or any other entity, could 

independently appraise the value of a 

package for the buyer or seller. In fact, 

the FAA would not be in a position to 

judge the value of an offer to the selling 

carrier since that involves access to the 

carrier’s strategic plan and internal 

documents that would not be readily 

available. 

We are seeking comment on three 

alternative secondary market provisions 

for this proposed rule. Differences under 

each proposed alternative include 

whether the sale or lease is blind and 

whether non-cash assets could be 

included in the buyers’ bids. 

• Alternative 1 would be a blind, 

cash-only secondary market. The 

identity of the seller and the bidders 

would be maintained until the seller 

accepts the highest bid at the close of 

the auction. Sellers would be expected 

to close the sale in good faith regardless 

of whom the buyer may be. 

• Alternative 2 would permit noncash assets to be bid, and the parties 

identities would be known throughout 

the process. When the FAA posted 

notice of the sale of an Operating 

Authorization, the seller would be 

identified. As each bid was posted, the 

identity of the bidders would be 

disclosed. Consideration for the 

transaction could be any combination of 

money, real property and non-monetary 

assets. An estimated value of these 

assets would have to be provided under 

each bid. Because the FAA would not be 

in a position to deem what bid is of 

highest value to the seller, all bids 

would be posted at the close of each 

day. Within five business days of the 

close of the auction, the seller, in good 

faith, would have to identify to the FAA 

which bid is most competitive. The 

seller and buyer then would have 10 

business days to negotiate the 

provisions of the sale. 

• Alternative 3 is a hybrid of the first 

two alternatives described above. This 

option provides for up-front anonymity 

and cash-only bids, but it would 

eventually allow the parties to negotiate 

non-cash terms. During the posting of 

the sale or lease and the subsequent 

bidding of an Operating Authorization, 

the party’s identities would not be 

known. Once the auction closed, the 

FAA would forward the highest bid to 

the seller without any bidder 

identification. The seller would have 

three business days to accept the bid. 

The parties’ identities would then be 

revealed, and they would have 10 

business days to negotiate the 

possibility of non-cash assets in lieu of 

money as consideration for the sale or 

lease. If, however, the parties did not 

come to agreement on the non-cash 

assets, sale or lease of the Operating 

Authorization would have to proceed on 

a cash-only basis. 

The advantage of Alternative 3 is that 

it responds to concerns that the buy/sell 

arrangements that currently occur under 

the HDR are too transparent; thereby 

allowing incumbent carriers to fence out 

new entrants or other airlines that could 

pose a competitive threat. At the same 

time, it releases restrictions on the use 

of non-monetary considerations. Again, 

because of the uniqueness of nonmonetary assets, the identity of the 

buyer and seller eventually have to be 

disclosed so that they can come to terms 

on the possible non-cash aspects of the 

package. If, however, the parties cannot 

come to agreement on non-monetary 

consideration, both parties are fully 

expected to follow through on the 

transaction on a cash-only basis. While 

this may mean that cash-strapped 

carriers without the credit-worthiness to 

obtain liquidity on a secured or 

unsecured basis would not be able to 

participate in the process because they 

risk having to come up with 100% cash, 

it does allow for some flexibility. 

Under either Alternatives 2 or 3, we 

would preclude the direct trading in 

gate leasehold interests. Under the terms 

of the FAA-airport grant assurances, 

airports have agreed to make their 

facilities available for public use under 

reasonable terms and conditions.46 This 

assurance obligates an airport to make 

its facilities available to a requesting 

carrier, whether an incumbent carrier 

that is seeking to expand at the airport 


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47The DOT has docketed three petitions on this 

subject in recent years. Dockets OST–2004–18586, 

OST–2002–13650, and FAA–2001–9156. The 

petitions are available for review on the DOT’s Web 

site. 

48Requiring the winning bidder to participate in 

all rounds of the auction encourages sincere 

bidding. 

49The secondary market that is being proposed 

for use at LaGuardia differs somewhat from the 

blind secondary market that was proposed at 

Chicago O’Hare because the proposed rule at 

LaGuardia will be permanent and the O’Hare rule 

is scheduled to sunset in 2008. We believe that it 

is appropriate to implement a more sophisticated 

auction-style secondary market at LaGuardia 

considering the long-term nature of the rule. 

50Unscheduled operations are operations other 

than those regularly conducted by a carrier between 

LaGuardia and another service point. The 

unscheduled operations include general aviation, 

public aircraft, military, charter, ferry, and 

positioning flights. (An air carrier also could use an 

Operating Authorization for a ferry, positioning, or 

other non-revenue flight. An air carrier may choose 

to do so if a Reservation is not available.) Helicopter 

operations are excluded from the reservation 

requirement. Reservations for unscheduled flights 

operating under visual flight rules (VFR) are granted 

when the aircraft receives clearance from air traffic 

control to land or depart LaGuardia. Reservations 

for unscheduled VFR flights are not included in the 

limits for unscheduled operators. 

or a new entrant seeking access. By 

facilitating requested accommodations, 

an airport is able to provide 

opportunities for airline competition 

and thereby confer benefits on the 

traveling public and help to stimulate 

economic growth. Since gates are a 

necessary part of access, the FAA 

expects airports to assert and maintain 

control over each airline’s use of and 

leasehold interests in the gates and to 

notify all interested carriers when a gate 

is underutilized or otherwise becomes 

available. Implementing fair and 

transparent procedures for gate access 

assures that dominant carriers do not 

control access to the airport to the 

exclusion of competitors. We believe 

that permitting a carrier to trade its gate 

leasehold rights for an operating 

authorization at LaGuardia would 

diminish the control of the airport 

operator over its facilities and could 

denigrate competitive opportunities at 

the airport served by the bidding airline. 

The general process under any of the 

alternatives would be as follows: 

The FAA would serve as the 

clearinghouse through which sales and 

leases of Operating Authorizations are 

completed, which would address 

complaints by some airlines and other 

entities that under the HDR, they were 

not even aware of opportunities to 

purchase or lease slots.47 A carrier 

wishing to sell, lease or buy an 

Operating Authorization would notify 

the FAA of the relevant details—the 

Operating Authorization number, time, 

frequency, expiration date and effective 

date the Operating Authorization would 

transfer to the winning bidder—and the 

FAA would post advance notice of the 

opening and closing dates for bids to all 

airlines and afford all airlines an equal 

opportunity to bid. A Small Community 

Operating Authorization must be sold, 

bought and leased as a Small 

Community Operating Authorization. 

Selling carriers may also provide the 

FAA with a minimum bid price, which 

the FAA would post. 

Carriers would be permitted to 

continue bidding until the closing date 

of the auction. To insure against 

participants bidding at the last moment 

(known as ‘‘bid-sniping’’), the 

‘‘winning’’ bidder must participate in 

the bidding from the first day of the 

auction, rather than submitting a bid in 

the final minutes before the bidding is 

closed.48 In order to qualify, bids must 

meet the minimum price if one is 

specified. The FAA proposes that each 

auction would last for 3 business days. 

Upon acceptance of a bid and 

ratification of the sale or lease, both 

airlines would have to submit the 

necessary information to the FAA for 

transfer of the Operating Authorization 

in a timely manner. A record of each 

sale and lease would be kept on file by 

the FAA and be available to the public 

upon request. Only airlines would be 

allowed to participate in this market. 

The FAA welcomes comments from the 

public on these or other appropriate 

auction design features.49

2. One-for-One Trades 

In addition, the proposed rule would 

permit the one-for-one exchange of 

Operating Authorizations between 

airlines so long as no additional 

consideration was provided. Under the 

proposal, these exchanges must be 

publicly disclosed and could take place 

outside of the secondary market because 

many of these arrangements are for 

operational reasons and could be 

accomplished only through multicarrier trades. Such exchanges would be 

an effective way to deal with variations 

in seasonal demand and airline business 

strategies. The authorizations could not 

be used until written confirmation of 

the transaction is received from the 

FAA. Both parties would have to attest 

that no other consideration or promise 

of consideration was provided by either 

party to the trade. 

D. Unscheduled Operations 

The FAA is proposing to implement 

a Reservation system for unscheduled 

operations to ensure that demand is 

spread reasonably throughout the day to 

support the FAA’s established 

operational cap for scheduled and 

unscheduled flights.50 Therefore, the 

FAA proposes a limit of 6 unscheduled 

operations per hour between the hours 

of 6:30 a.m. and 9:59 p.m. The FAA 

recognizes that there is often greater 

flexibility in the timing of these flights 

and there are many factors that impact 

the proposed time of these unscheduled 

flights. The FAA believes that a halfhour allocation period would be 

appropriate and proposes to limit 

Reservations in each half-hour period to 

no more than 3 operations (arrivals and 

departures). 

The allocation mechanism for 

unscheduled operations proposed in 

this NPRM is similar to the procedures 

the FAA currently follows in allocating 

unscheduled reservations for airports 

subject to the provisions of the HDR 

(particularly LaGuardia Airport and 

John F. Kennedy International Airport). 

The proposed procedures are also 

similar to the measures that were 

implemented at Chicago O’Hare in 

Special Federal Aviation Regulation 

(SFAR) 105. 

A Reservation would be allocated on 

a 30-minute basis during the peak hours 

for which the restrictions would be in 

place. The FAA’s Airport Reservation 

Office (ARO) would receive and process 

all Reservations. The Reservations 

would be allocated on a first-come, firstserved basis, determined by the time the 

request is received by the ARO. 

Operators can obtain a Reservation: (1) 

through the Internet; or (2) by calling 

the ARO’s interactive computer system 

via touch-tone telephone. Operators 

would provide the date and time of the 

proposed operation and other 

identifying information concerning the 

aircraft and the intended flight. 

Reservations could be made no more 

than 72 hours in advance of the 

proposed flight time. The assigned 

Reservation number would be included 

in the ‘‘Remarks’’ section of the flight 

plan. Reservations must be cancelled if 

they will not be used as assigned so that 

another operator has an opportunity to 

operate to or from the airport. The FAA 

would not permit a secondary market in 

Reservations in order to prevent abuse 

of the system or the bundling of airport 

Reservations with other flight-related 

services. 

The FAA is not proposing to include 

a limited exception to the 72-hour 

window for public charter operators to 

obtain a Reservation, as was adopted 

under SFAR 105 for Chicago’s O’Hare 

International Airport. There is more 

connecting and international passenger 


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51An air carrier could sell off its Operating 

Authorizations as part of a liquidation strategy, if 

it does so before failing to meet the Use-or-Lose 

requirements of the rule. However, if an air carrier 

ceases all operations and subsequently fails to meet 

the Use-or-Lose requirement, the Operating 

Authorizations would revert to the FAA and they 

could not be sold. 

traffic at O’Hare than at LaGuardia, 

which has more point-to-point, shorthaul traffic. Therefore, it is important 

that public charter operations flying into 

O’Hare be able to connect to 

commercially scheduled flights 

(domestic or international) and arrive at 

O’Hare at their intended arrival time so 

passengers can make their flight. Also, 

many of these public charter flights at 

O’Hare operate to international 

destinations, representing key access for 

service to those points from the Chicago 

area. However, charter operations that 

fly to the New York City area to connect 

to international or long-haul domestic 

flights, or to serve international 

destinations more on a origin/ 

destination basis, are more likely to fly 

into Newark Liberty International or 

John F. Kennedy International (which 

house those operations in the New York 

area), rather than LaGuardia. 

Consequently, the nature of public 

charter operations at LaGuardia does not 

warrant treatment different than any 

other unscheduled operation. 

The allocation of a Reservation does 

not constitute an Air Traffic Control 

clearance nor does it replace the need to 

file an IFR flight plan. The FAA would 

accommodate declared emergencies 

without regard to reservations. Nonemergency flights in direct support of 

national security, law enforcement, 

military operations, or public-use 

aircraft operations may be 

accommodated above the reservation 

limits with the prior approval of the 

FAA. The FAA may authorize 

additional Reservations for unscheduled 

operations if permitted by operating 

conditions or if there are temporarily 

available Operating Authorizations. 

E. Administrative Reversion of 

Operating Authorizations 

Operating Authorizations are 

temporary operating privileges. As such, 

they remain subject to FAA control. We 

propose allowing them to be bought and 

sold, subject to FAA secondary market 

restrictions, in order to promote their 

most efficient use. However, they may 

be withdrawn at any time to fulfill 

operational needs such as eliminating 

operations due to reduced capacity. If 

the FAA determines that capacity must 

be reduced for a specified period of 

time, for example if a runway were 

temporarily closed, Operating 

Authorizations would be withdrawn. 

Once the capacity is resumed, the 

withdrawn Operating Authorizations 

would be returned to the carriers from 

which they were withdrawn provided 

they continued to conduct scheduled 

service at the airport. The FAA would 

assign, by random lottery, priority 

numbers for withdrawal of Operating 

Authorizations, if necessary to reduce 

capacity for operational reasons. If it 

was necessary to withdraw Operating 

Authorizations, they would be 

withdrawn in the specified 15-minute 

time periods in accordance with the 

priority list. Carriers with a limited 

presence at the airport would be 

protected from the withdrawal of 

Operating Authorizations. Carriers with 

fewer than 10 Operating Authorizations 

would not have authorizations 

withdrawn from them under these 

provisions of the rule. 

The proposal also provides that all of 

the Operating Authorizations held by 

any carrier would revert to the FAA if 

that carrier ceases all operations at 

LaGuardia for any reason other than a 

strike or labor dispute.51

Paperwork Reduction Act 

This proposal contains the following 

new information collection 

requirements. As required by the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(d)), the FAA has submitted 

the information requirements associated 

with this proposal to the Office of 

Management and Budget for its review. 

Title: Congestion Management Rule 

for LaGuardia Airport. 

Summary: The FAA is proposing a 

new rule to address the potential for 

increased congestion and delay at New 

York’s LaGuardia Airport (LaGuardia) 

when the High Density Rule (HDR) 

expires there on January 1, 2007. The 

rule, if adopted, would establish an 

operational limit on the number of 

aircraft landing and taking off at the 

airport. To offset the effect of this limit, 

the proposed rule would increase 

utilization of the airport by encouraging 

the use of larger aircraft through 

implementing an airport-wide, average 

aircraft size requirement designed to 

increase the number of passengers that 

may use the airport within the overall 

proposed operational limits. 

Use of: The information is reported to 

the FAA by operators holding Operating 

Authorizations. 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 Operating Authorizations 

among the operators and facilitates the 

buying and selling of Operating 

Authorizations in the secondary market. 

The FAA also uses this information in 

order to maintain an accurate base of 

operations to ensure compliance with 

the operations permitted under the rule 

and those actually conducted at the 

airport. 

Respondents (including number of:) 

The likely respondents to this proposed 

information requirement are scheduled 

carriers with existing service at 

LaGuardia, carriers that plan to enter the 

LaGuardia market (and participate in 

the lottery or secondary market), and 

carriers that enter the LaGuardia market 

in the future. There are currently 

fourteen (14) carriers with existing 

scheduled service at LaGuardia. 

Frequency: The information collection 

requirements of the rule involve 

scheduled carriers notifying the FAA of 

their use of Operating Authorizations. 

The carriers must notify the FAA of: (1) 

Requests to be included in a lottery for 

available Operating Authorizations; (2) 

requests for confirmation of one-for-one 

Operating Authorization trades; (3) 

usage of Operating Authorizations that 

are subject to the airport-wide 

upgauging target, and compliance with 

that target (on an annual basis); (4) 

usage of Operating Authorizations that 

are not subject to the airport-wide target 

(on a bi-monthly basis); and (4) 

participation in the secondary market. 

Annual Burden Estimate: The annual 

reporting burden for each subsection of 

the rule is presented below. 

The reporting burden was calculated 

by the following formula: 

Annual Hourly Burden = (# of 

respondents) * (time involved) * 

(frequency of the response). 

Section 93.67(c) Sale and Lease of 

Operating Authorizations 

(16 carriers) * (1.5 hours per submittal) 

* (4 occurrences per year) = 96 

hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours for each 

occurrence of a sale or lease of an 

Operating Authorization. For each 

operator, we assumed that a sale or lease 

of an Operating Authorization would 

occur quarterly. 

Section 93.68(b) One-for-One Trades 

of Operating Authorizations 

(16 carriers) * (1.5 hours per submittal) 

* (4 occurrences per year) = 96 

hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours for each 

occurrence of a one-for-one trade of an 

Operating Authorization. For each 


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operator, we assumed that a one-for-one 

trade of an Operating Authorization 

would occur quarterly. 

Section 93.72(a) Reporting 

Requirements 

(16 carriers) * (1.5 hours per submittal) 

* (1 occurrence per year) = 24 hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours for each annual 

occurrence of the data required in 

§ 93.72(a)(1) and § 93.72(a)(2). 

Section 93.72(b) Reporting 

Requirements 

(16 carriers) * (1.5 hours per submittal) 

* (6 occurrences per year) = 144 

hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours every two 

months of the data required by 

§ 93.72(b). 

Section 93.72(c) Reporting 

Requirements 

(16 carriers) * (1.5 hours per submittal) 

* (1 occurrence per year) = 24 hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours for each annual 

occurrence of the data required in 

§ 93.72(c). 

Section 93.73(d) Weighted Lottery 

(16 carriers) * (1.5 hours per submittal) 

* (4 occurrence per year) = 96 hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours every quarter for 

participation in a lottery for an 

Operating Authorization. 

Section 93.74(d) Administrative 

Provisions 

(16 carriers) * (1.5 hours per submittal) 

* (4 occurrence per year) = 96 hours 

We assumed that the 16 marketing 

carriers operating at LaGuardia expend 

one and one half hours every quarter for 

administrative provisions. 

Summary—Total Annual Hourly 

Reporting Burden—576 Hours 

The agency is soliciting comments 

to—

(1) Evaluate whether the proposed 

information requirement is necessary for 

the proper performance of the functions 

of the agency, including whether the 

information will have practical utility; 

(2) Evaluate the accuracy of 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 October 30, 

2006, 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, New Executive Building, Room 

10202, 725 17th Street, NW., 

Washington, DC 20053, 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. 

International Compatibility 

In keeping with U.S. obligations 

under the Convention on International 

Civil Aviation, it is FAA policy to 

comply with International Civil 

Aviation Organization (ICAO) Standards 

and Recommended Practices to the 

maximum extent practicable. The FAA 

has determined that there are no ICAO 

Standards and Recommended Practices 

that correspond to these proposed 

regulations. 

Economic Assessment, Regulatory 

Flexibility Determination, Trade Impact 

Assessment, and Unfunded Mandates 

Assessment 

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, this 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 proposed rule (1) 

has benefits that justify its costs, is a 

‘‘significant regulatory action’’ as 

defined in section 3(f) of Executive 

Order 12866, 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 

FAA estimates that this proposed rule 

would result in about a 37% decrease in 

the average delay per operation at 

LaGuardia. Present value net benefits 

are estimated at $4.3 billion from 2007–

2019; net benefits over an infinite time 

horizon total about $7.5 billion. The 

benefits are estimated by comparing the 

no-rule scenario (similar to the situation 

at LaGuardia in 2001) with the proposed 

upgauging scenario. 

There are almost no costs associated 

with the proposed rule. The only 

exception is for the cost of designing 

and carrying out periodic lotteries that 

may be required to assign unused 

operating authorizations. These present 

value costs total about $11.3 million 

through 2019, and $19.4 million over an 

infinite time horizon. 

Who Is Potentially Affected by This 

Rulemaking 

• Operators of scheduled and nonscheduled, domestic and international 

flights, and new entrants who do not yet 

operate at New York’s LaGuardia 

Airport (LaGuardia). 

• All communities, including small 

communities with air service to 

LaGuardia. 

• Passengers of scheduled, domestic 

flights to LaGuardia. 

• New York and New Jersey Port 

Authority. 

• FAA Air Traffic Control. 

Key Assumptions 

• Base Case Flight Operations and 

Delay-Adjusted Official Airline Guide 

(OAG) Schedule, December 2000 (1,373 

daily operations). 


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52 GRA Inc. of Jenkintown, Pennsylvania. 

53 ‘‘Draft Economic Value for FAA Investment and 

Regulatory Decisions, A Guide’’ December 31, 2004, 

weighted using LaGuardia shares of 51% leisure 

and 49% business travel. 

54http://www.faa.gov/arp/planning/stats/ 

index.cfm?nav=cargo#apttype. 

• Current Scenario Case Flight 

Operations and Delay—OAG Schedule, 

April 19, 2005 (1,194 daily operations). 

• Delay improvements are about 9.2 

minutes per flight, equivalent to a 37% 

improvement in delay. This delay 

improvement estimate was derived from 

GRA’s 52 Delay Model. 

• For this evaluation, the proposed 

rule’s effective date is January 1, 2007. 

Other Important Assumptions 

• Discount Rate—7%. 

• Period of Analysis—2007 through 

2019. 

• Assumes 2005 Current Year Dollars. 

• Passenger Value of Travel Time—

$30.86 per hour.53

• For this evaluation, all flights to 

Non-Hub Airports with existing service 

at LaGuardia, as well as a baseline 

exemption of 10 flights for each carrier 

would be exempt from the aircraft 

upgauging target. 

Alternatives We Have Considered 

• Alternative #1—This alternative 

would have let the High Density Rule 

order expire on January 1, 2007. Based 

on history, under this alternative, we 

expected operators would most likely 

continue to expand operations, and 

therefore further worsen airport delays. 

We are presenting this alternative as the 

base case for calculation of costs and 

benefits associated with this 

rulemaking. 

• Alternative #2—This alternative 

would exempt operations to Non-Hub 

Airports with existing service at 

LaGuardia from the target aircraft size 

calculation. 

• Alternative #3—This alternative 

would exempt operations to Non-Hub 

Airports with existing service at 

LaGuardia and Small-Hub Airports 

within 300 miles of LaGuardia from the 

target aircraft size calculation. 

• Alternative #4—This alternative 

would exempt operations to Non-Hub 

Airports with existing service at 

LaGuardia, Small-Hub Airports within 

300 miles of LaGuardia, and Small-Hub 

Airports with existing LaGuardia service 

from the target aircraft size calculation. 

We are seeking comment from 

industry on alternatives #2 through #4 

to promote efficient use of the airspace 

through equipment type upgauging, but 

not at the expense of removing service 

to small and non-hub communities. 

Benefits of This Rulemaking 

The primary benefits of this rule 

would be the airline and passenger 

delay cost savings. The benefits reflect 

a prorating of the 5.5 days per week the 

operational limits are in effect. The total 

estimated net benefits in present value 

dollars are about $4.3 billion when 

compared to 2001 delays over the 13- 

year analysis interval. 

Costs of This Rulemaking 

The major costs of this proposed rule 

cover the costs of implementing a 

lottery system for unutilized operating 

authorizations. The estimated present 

value cost of this final rule is about 

$11.3 million over the 13-year analysis 

interval. 

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, section 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 affects all 

scheduled operators at LaGuardia. A 

review of the number of employees for 

each operator shows that the following 

are ‘‘small entities’’ (defined as firms 

with 1,500 or fewer employees): 

Carrier Employees 

Commutair ................................ 340 

Carrier Employees 

Colgan Air ................................. 546 

Under the proposed rule, all 

operators’ Operating Authorizations 

would be ‘‘grandfathered’’ for at least 

three years. Further, service to Non-Hub 

Airports would be exempt from the 

upgauging incentive where smaller 

entities are operating. Thus most of the 

LaGuardia markets operated by existing 

small entities would be exempt from 

upgauging. 

The FAA has also reviewed whether 

there would be interruptions to service 

to communities with a population of 

less than 50,000. Because of the 

exemption from the upgauging incentive 

Non-Hub Airports would receive, only 

one such community is exposed. 

Burlington, Vermont has a population 

less than 50,000, but because it is a 

small-hub community 54 it would not be 

eligible for the exemption. But, 

Burlington is a dynamic economy, has 

existing service from both Newark and 

JFK airports, and service from 

LaGuardia may well be viable at this 

airport even without the exemption. 

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 

prohibits Federal agencies from 

establishing any standards or engaging 

in related activities that create 

unnecessary obstacles to the foreign 

commerce of the United States. 

Legitimate domestic objectives, such as 

safety, are not considered unnecessary 

obstacles. The statute also requires 

consideration of international standards 

and, where appropriate, that they be the 

basis for U.S. standards. The FAA has 

assessed the potential effect of this 

proposed rule and determined that it 

would impose the same costs on 

domestic and international entities and 

thus have a neutral trade impact. 

Unfunded Mandate Assessment 

The Unfunded Mandate Reform Act of 

1995 (the Act) is intended, among other 

things, to curb the practice of imposing 

unfunded Federal mandates on State, 

local, and tribal governments. Title II of 

the Act requires each Federal agency to 

prepare a written statement assessing 

the effects of any Federal mandate in a 

proposed or final agency rule that may 

result in an expenditure of $100 million 

or more (adjusted annually for inflation) 


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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 $128.1 

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 

categorically excluded from preparation 

of an environmental assessment or 

environmental impact statement under 

the National Environmental Policy Act 

in the absence of extraordinary 

circumstances. The FAA has 

determined this rulemaking action 

qualifies for the categorical exclusion 

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.)’’. It 

has been determined that no 

extraordinary circumstances exist that 

may cause a significant impact and 

therefore no further environmental 

review is required. 

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. 

List of Subjects in 14 CFR Part 93 

Air traffic control, Airports, Alaska, 

Navigation (air), Reporting and 

recordkeeping requirements. 

The Proposed Amendment 

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. 

2. Subpart C is added to read as 

follows: 

Subpart C—Performance Based Upgauging 

Rule for New York LaGuardia Airport 

Sec. 

93.61 Applicability. 

93.62 Definitions. 

93.63 Operating Authorizations for 

Scheduled Arrivals and Departures. 

93.64 Initial Allocation and Reallocation of 

Operating Authorizations. 

93.65 Duration of Operating Authorizations. 

93.66 Reversion and Withdrawal of 

Operating Authorizations. 

93.67 Sale and Lease of Operating 

Authorizations. 

93.68 One-for-One Trades of Operating 

Authorizations. 

93.69 Average Aircraft Size Target. 

93.70 Minimum Usage Requirements for 

Small and Community and Baseline 

Operating Authorizations. 

93.71 Unscheduled Operations. 

93.72 Reporting Requirements. 

93.73 Weighted Lottery. 

93.74 Administrative Provisions. 

Subpart C—Performance Based 

Upgauging Rule for New York 

LaGuardia Airport 

§ 93.61 Applicability. 

(a) This subpart prescribes the air 

traffic rules for the arrival and departure 

of aircraft, other than helicopters, 

operating at New York’s LaGuardia 

Airport (LaGuardia). 

(b) This subpart also prescribes 

procedures for the assignment, transfer, 

sale, lease, reversion and withdrawal of 

Operating Authorizations issued by the 

FAA for Scheduled Operations by 

Carriers at LaGuardia. 

(c) The provisions of this subpart 

apply to LaGuardia during the local 

hours of 6:30 a.m. through 9:59 p.m., 

Monday through Friday, and 12 p.m. 

through 9:59 p.m. on Sunday. No person 

shall conduct a Scheduled Operation to 

or from LaGuardia during such hours 

without obtaining an Operating 

Authorization. No person shall conduct 

an Unscheduled Operation to or from 

LaGuardia during such hours without 

obtaining a Reservation. 

(d) Carriers that have Common 

Ownership shall be considered a single 

U.S. air carrier or foreign air carrier for 

purposes of this subpart. 

§ 93.62 Definitions. 

For purposes of this subpart the 

following definitions apply: 

Airport Reservation Office (ARO) is an 

operational unit of the FAA’s David J. 

Hurley Air Traffic Control System 

Command Center. It is responsible for 

the administration of Reservations for 

Unscheduled Operations at LaGuardia. 

Average Aircraft Size Target is the 

required average number of passenger 

seats per aircraft offered for sale for each 

Scheduled Operation at LaGuardia. The 

target is calculated as the annual 

passenger seats divided by the total 

number of Operating Authorizations 

held over the year excluding all 

Baseline Operations and Small 

Community Operating Authorizations. 

Baseline Operations are Operating 

Authorizations excluded from the 

Average Aircraft Size Target. Annually, 

each Carrier may designate up to 10 

Operating Authorizations per day as its 

Baseline Operations. 

Carrier is a U.S. air carrier or foreign 

air carrier with authority to conduct 

scheduled service at LaGuardia under 

Parts 121, 129, 135 of this Chapter and 

has economic authority to operate 

scheduled service under 14 CFR chapter 

II and 49 U.S.C. chapter 411. 

Carrier’s Average Aircraft Size is the 

total number of passenger seats offered 

under all Operating Authorizations 

(excluding Baseline Operations and 

Small Community Operating 

Authorizations) over the calendar year, 

divided by the total number of 

Operating Authorizations held over the 

year. 

Common Ownership with respect to 

two or more air carriers or foreign air 

carriers means having in common at 

least 50 percent beneficial ownership or 

control by the same entity or entities. 

Enhanced Computer Voice 

Reservation System (e-CVRS) is the 

system used by the FAA to make arrival 

and/or departure Reservations for 

Unscheduled Operations at LaGuardia 

and other designated airports. 

Non-Hub Airport is a commercial 

service airport that has more than 

10,000 annual passenger boardings but 

less than 0.05% of the total annual 

United States passenger boardings. 

Operating Authorization is the 

operational authority assigned by the 

FAA to a Carrier to conduct one 


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scheduled instrument flight rules (IFR) 

arrival or departure operation at 

LaGuardia on a particular day of the 

week during a specific 15-minute period 

during the hours of 6:30 a.m. through 

9:59 p.m., Monday through Friday, and 

12 p.m. through 9:59 p.m. on Sunday. 

Reservation is an authorization 

received by a Carrier or other operator 

of an aircraft, excluding helicopters, in 

accordance with procedures established 

by the FAA to operate an unscheduled 

arrival or departure to or from 

LaGuardia on a particular day of the 

week during a specific 30-minute period 

during the hours of 6:30 a.m. through 

9:59 p.m., Monday through Friday, and 

12 p.m. through 9:59 p.m. on Sunday. 

Scheduled Operation is the arrival or 

departure segment of any operation 

regularly conducted by a Carrier 

between LaGuardia and another point 

regularly served by that Carrier. 

Small Community Operating 

Authorizations are the designated 

Operating Authorizations excluded from 

the Average Aircraft Size Target but 

subject to the minimum usage 

requirement. These Operating 

Authorizations are designated by the 

FAA effective January 1, 2007 and may 

only be used to operate to a Non-Hub 

and Small-Hub Airports. 

Small-Hub Airport is a commercial 

service airport with at least 0.05% but 

less than .25% of total annual United 

States passenger boardings. 

Unscheduled Operation is an arrival 

or departure segment of any operation 

that is not regularly conducted by a 

Carrier or other operator of an aircraft, 

excluding helicopters, between 

LaGuardia and another service point. 

The following types of Carrier 

operations shall be considered 

Unscheduled Operations for the 

purposes of this rule: Public, ondemand, and other charter flights; hired 

aircraft service; extra sections of 

scheduled flights; ferry flights; and 

other non-passenger flights. 

Weighted Lottery is a lottery 

conducted by the FAA to reassign to 

Carriers’ Operating Authorizations that 

are initially unassigned, returned to the 

FAA or withdrawn as a result of the 

Average Aircraft Size Target 

requirements or minimum use 

requirements. A weighted lottery 

assigns Operating Authorizations to a 

Carrier based on its inverse proportion 

of the Carrier’s share of total Operating 

Authorizations at LaGuardia. 

§ 93.63 Operating Authorizations for 

Scheduled Arrivals and Departures. 

(a) During the hours of 6:30 a.m. 

through 9:59 p.m., Monday through 

Friday, and 12 p.m. through 9:59 p.m. 

on Sunday, no person may operate an 

aircraft other than a helicopter, as a 

Scheduled Operation to or from 

LaGuardia unless he or she has received 

an Operating Authorization for that 

operation. 

(b) Seventy-five (75) Operating 

Authorizations are available per hour at 

LaGuardia. The number of Operating 

Authorizations may not exceed 19 in 

any 15-minute period; 38 in any 30- 

minute period; and 75 in any 60-minute 

period. The number of arrival and 

departure Operating Authorizations in 

any period may be adjusted by the FAA 

if 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. 

§ 93.64 Initial Allocation and Reallocation 

of Operating Authorizations. 

(a) Except as provided for under 

paragraphs (b) and (c) of this section, 

any Carrier allocated operating rights 

under 14 CFR part 93, subpart K, and 49 

U.S.C. 41716 during the week of 

October 1–6, 2006, as evidenced by the 

FAA’s records, will be assigned 

corresponding Operating 

Authorizations, by hour, effective 

January 1, 2007. The FAA will assign 

Operating Authorizations in 15-minute 

periods consistent with the limits under 

§ 93.63(b) of this section. If necessary, 

the FAA may utilize administrative 

measures such as voluntary measures or 

a lottery to re-time the grandfathered 

Operating Authorizations within the 

same hour to meet the 15-minute and 

30-minute limits under § 93.63(b) of this 

section. 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 14 CFR part 93, subpart K, 

and 49 U.S.C. 41716 during the week of 

October 1–6, 2006, but the operating 

rights were held by another carrier, then 

the corresponding Operating 

Authorizations will be assigned to the 

carrier that held the operating rights for 

that period, as evidenced by the FAA’s 

records. 

(c) If a carrier was allocated operating 

rights under 14 CFR part 93 during the 

week of October 1–6, 2006, and those 

operating rights were held by an entity 

other than a certificated carrier, then 

corresponding Operating Authorizations 

will be assigned to the operating carrier, 

as evidenced by the FAA’s records. 

(d) Any Operating Authorizations that 

are returned to the FAA or withdrawn 

as a result of the Average Aircraft Size 

Target requirement under § 93.69 of this 

subpart or the minimum use 

requirement for Operating 

Authorizations to or from Non-Hub and 

Small-Hub Airports under § 93.70 of 

this subpart will be reallocated by a 

Weighted Lottery. 

§ 93.65 Duration of Operating 

Authorizations. 

(a) Operating Authorizations initially 

assigned to Carriers on January 1, 2007, 

have a minimum term of three years 

unless withdrawn or returned in 

accordance with this subpart. 

(b) By January 1, 2007, the FAA will 

establish the expiration schedule for all 

Operating Authorizations assigned to 

Carriers on January 1, 2007. Ten percent 

of these Operating Authorizations will 

expire annually beginning on December 

31, 2009. 

(c) Each expired Operating 

Authorization will be reallocated and 

thereafter shall carry a 10-year operating 

term. 

§ 93.66 Reversion and Withdrawal of 

Operating Authorizations. 

(a) A Carrier’s Operating 

Authorizations revert automatically to 

the FAA 30 days after the Carrier has 

ceased all operations at LaGuardia for 

any reasons other than a strike. 

(b) The FAA may retime, withdraw or 

temporarily suspend Operating 

Authorizations at any time to fulfill 

operational needs. 

(1) Operating Authorizations will be 

withdrawn in accordance with the 

priority list established under § 93.74 of 

this subpart. 

(2) Except as otherwise provided in 

paragraph (a) of this section, the FAA 

will notify the affected Carrier before 

withdrawing or temporarily suspending 

an Operating Authorization and specify 

the date by which operations under the 

authorizations must cease. The FAA 

will provide at least 45 days’ notice 

unless otherwise required by 

operational needs. 

(3) Any Operating Authorization that 

is temporarily withdrawn under this 

paragraph will be reassigned, if at all, 

only to the Carrier from which it was 

withdrawn, provided that the Carrier 

continues to conduct Scheduled 

Operations at LaGuardia. 

(c) The FAA shall not withdraw or 

temporarily suspend any Operating 

Authorizations under paragraph (b) of 

this section from any Carrier if the result 

would reduce the Carrier’s total number 

of Operating Authorizations below ten 

per day. 

§ 93.67 Sale and Lease of Operating 

Authorizations. 

(a) Carriers may buy, sell or lease 

Operating Authorizations in accordance 

with this section. 


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(b) Only monetary consideration may 

be provided in any transaction 

conducted under this section. 

(c) A Carrier must provide notice to 

the FAA to sell or lease an Operating 

Authorization. Such notice must 

contain: the Operating Authorization 

number and time, effective dates and, if 

appropriate, the duration of the lease 

and the minimum size aircraft that must 

be used for the operation. The Carrier 

also may provide the FAA with a 

minimum bid price. 

(d) The FAA will post a notice of the 

sale or lease of the Operating 

Authorization and relevant details on 

the FAA Web site at http://www.faa.gov. 

An opening date, closing date and time 

by which bids must be received will be 

provided. Information identifying the 

seller or lessor of the Operating 

Authorization will not be released until 

after the transfer of the Operating 

Authorization. 

(e) The FAA must receive all bids 

electronically, via the FAA Web site, by 

the closing date and time. Eligibility 

requires a bidding Carrier to participate 

on the first day of the bidding process. 

Late bids will not be considered. All 

bids will be held confidential, with each 

bidder certifying to the FAA that its bid 

has not been disclosed to any person. 

(f) The FAA will forward the highest 

bid to the seller or lessor without any 

information about the identity of the 

bidder. The seller or lessor has three 

business days to accept or reject the bid. 

(g) Upon acceptance, the FAA will 

notify the buyer/lessee. 

(h) Written evidence of each Carrier’s 

consent to the transfer must be provided 

to the FAA, and each Carrier must 

certify that only monetary consideration 

will be exchanged. 

(i) The Operating Authorization may 

not be used until the conditions of 

paragraph (h) of this section have been 

met, and the FAA provides notice of its 

approval of the transfer. 

(j) A Carrier may transfer an Operating 

Authorization to another Carrier that 

conducts operations at LaGuardia 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. 

The FAA Vice President, System 

Operations Services, is the final 

decision maker for any determinations 

under this subsection. The recipient 

Carrier of the transfer may not use the 

Operating Authorization until the FAA 

has provided written confirmation. 

§ 93.68 One-for-One Trades of Operating 

Authorizations. 

(a) A Carrier may trade an Operating 

Authorization with another Carrier on a 

one-for-one basis. 

(b) Written evidence of each Carrier’s 

consent to the transfer must be provided 

to the FAA. 

(c) The recipient of the transfer may 

not use the Operating Authorization 

until written confirmation has been 

received from the FAA. 

(d) Carriers participating in a one-forone transfer must certify to the FAA that 

no consideration or promise of 

consideration was provided by either 

party to the trade. 

§ 93.69 Average Aircraft Size Target. 

(a) On an annual basis, beginning in 

2008, each Carrier’s Average Aircraft 

Size must meet or exceed the Average 

Aircraft Size Target established by the 

FAA for LaGuardia. The FAA will 

publish the target in the Federal 

Register at least 90 days before the 

beginning of the calendar year. 

(b) Baseline Operations and Small 

Community Operating Authorizations 

are excluded from the Carrier’s Average 

Aircraft Size calculation. 

(c) Beginning January 1, 2009, if a 

Carrier’s Average Aircraft Size does not 

meet the Average Aircraft Size Target 

over the preceding year, the FAA will 

withdraw Operating Authorization(s) 

from the Carrier until the target is met. 

(1) The FAA will withdraw the 

Operating Authorization(s) that used the 

aircraft with the smallest seating 

capacity. 

(2) Unless there is an operational need 

identified by the FAA, the Carrier may 

designate which Operating 

Authorization is withdrawn. 

(d) Paragraph (a) of this section does 

not apply to Operating Authorizations 

that are not used by a Carrier because 

of a strike. 

(e) The FAA may waive the 

requirements of paragraph (a) of this 

section in the event of a highly unusual 

and unpredictable condition that is 

beyond the control of the Carrier and 

that persists for a period of 5 

consecutive days or more. Examples of 

conditions which could justify a waiver 

under this paragraph are weather 

conditions that result in the restricted 

operation of an airport for an extended 

period of time or the grounding of any 

aircraft type. 

(f) Paragraph (a) of this section does 

not apply to Operating Authorizations 

that are held by a Carrier on 

Thanksgiving Day, the Friday following 

Thanksgiving Day, and the period from 

December 24 through the first Sunday in 

January. 

(g) Paragraph (a) of this section does 

not apply to the first 90-day period after 

assignment of Operating Authorizations 

obtained in a Weighted Lottery or 

through a sale. 

§ 93.70 Minimum Usage Requirements for 

Small Community and Baseline Operating 

Authorizations. 

(a) Any Small Community or Baseline 

Operating Authorization that is not used 

at least 80 percent of the time over a 

consecutive two-month period will be 

withdrawn by the FAA. 

(b) Paragraph (a) of this section does 

not apply to the first 90-day period after 

assignment of Operating Authorizations 

obtained in a Weighted Lottery or 

through a sale. 

(c) Paragraph (a) of this section does 

not apply to Operating Authorizations 

that are not used by a Carrier because 

of a strike. 

(d) The FAA may waive the 

requirements of paragraph (a) of this 

section in the event of a highly unusual 

and unpredictable condition that is 

beyond the control of the Carrier and 

that persists for a period of 5 

consecutive days or more. Examples of 

conditions which could justify a waiver 

under this paragraph are weather 

conditions that result in the restricted 

operation of an airport for an extended 

period of time or the grounding of any 

aircraft type. 

(e) The FAA will treat as used any 

Operating Authorization held by a 

Carrier on Thanksgiving Day, the Friday 

following Thanksgiving Day, and the 

period from December 24 through the 

first Sunday in January. 

§ 93.71 Unscheduled Operations. 

(a) During the hours of 6:30 a.m. 

through 9:59 p.m., Monday through 

Friday, and 12 p.m. through 9:59 p.m. 

on Sunday, no person may operate an 

aircraft other than a helicopter to or 

from LaGuardia unless he or she has 

received, for that Unscheduled 

Operation, a Reservation that is assigned 

by the Airport Reservation Office (ARO). 

Additional information on procedures 

for obtaining a Reservation will be 

available on the Internet at http:// 

www.fly.faa.gov/ecvrs. 

(b) Six (6) Reservations are available 

per hour. The ARO will assign 

Reservations on a 15-minute basis. 

(c) The ARO will receive and process 

all Reservation requests for unscheduled 

arrivals and departures at LaGuardia. 

Reservations are assigned on a ‘‘firstcome, 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) The filing of a request for a 

Reservation does not constitute the 


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filing of an IFR flight plan as required 

by regulation. The IFR flight plan must 

be filed only after the Reservation is 

obtained, include the Reservation 

number in the ‘‘Remarks’’ section, and 

be filed in accordance with FAA 

regulations and procedures. 

(e) Air Traffic Control will 

accommodate declared emergencies 

without regard to Reservations. Nonemergency flights in direct support of 

national security, law enforcement, 

military aircraft operations, or publicuse 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. 

(f) 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 not likely, the FAA may 

determine that additional Reservations 

may be accommodated for a specific 

time period. Unused Operating 

Authorities may also be temporarily 

made available for Unscheduled 

Operations. Reservations for additional 

operations must be obtained through the 

ARO. 

(g) Reservations may not be bought, 

sold, or leased. 

§ 93.72 Reporting Requirements. 

(a) Carrier’s Aircraft Size Target. (1) 

Annually, beginning March 1, 2008, 

each Carrier holding an Operating 

Authorization must report, in a format 

specified to the FAA, the following 

information for each Operating 

Authorization held during the previous 

calendar year: 

(i) The Operating Authorization 

number, time, and arrival or departure 

designation; 

(ii) The operating Carrier; 

(iii) The aircraft-type; 

(iv) The number of passenger seats 

offered on the aircraft for each 

operation; and 

(v) The date and time of each of its 

operations using an Operating 

Authorization, including flight number, 

and origin/destination. 

(2) Annually, beginning March 1, 

2008, each Carrier holding an Operating 

Authorization must report, in a format 

specified by the FAA, the average 

number of seats flown over all 

Operating Authorizations that are 

subject to the Average Aircraft Size 

Target. 

(b) Minimum Usage Requirements for 

Small Community and Baseline 

Operating Authorizations. Each Carrier 

holding a Small Community or Baseline 

Operating Authorization must, within 

14 days after the last day of the 2-month 

period beginning January 1, 2007, and 

every 2 months thereafter report, in a 

format acceptable to the FAA, the 

following for each Operating 

Authorization held: 

(1) The Operating Authorization 

number, time, and arrival or departure 

designation; 

(2) The operating Carrier; 

(3) The aircraft-type; 

(4) The number of passenger seats 

offered on the aircraft for each 

operation; and 

(5) The date and time of each of its 

operations using an Operating 

Authorization, including flight number, 

and origin/destination. 

(c) Annually, by March 1, 2008, each 

Carrier must designate ten Operating 

Authorizations as its Baseline 

Operations and report to the FAA the 

Operating Authorization number, time, 

and arrival or departure. 

(d) The FAA may withdraw the 

Operating Authorizations of any Carrier 

that does not report its utilization of 

Operating Authorizations in accordance 

with this section. 

§ 93.73 Weighted Lottery. 

(a) The FAA will reassign by 

Weighted Lottery Operating 

Authorizations not assigned by the FAA 

as part of the initial allocation and those 

returned to the FAA or withdrawn, as 

described under § 93.66 of this subpart 

or withdrawn under § 93.69 and § 93.70 

of this subpart. 

(b) Each Carrier’s weight in the lottery 

is inversely proportional to its share of 

total Operating Authorizations at 

LaGuardia. Any Carrier that does not 

hold or operate Operating 

Authorizations under its own name as 

of the announced date of a Weighted 

Lottery, and has not held or operated 

Operating Authorizations at LaGuardia 

since [EFFECTIVE DATE OF FINAL 

RULE], its weight is equal to that of a 

Carrier with two Operating 

Authorizations (a single roundtrip 

flight). 

(c) The FAA will publish a notice in 

the Federal Register announcing the 

lottery dates and any special procedures 

for the lotteries. 

(d) Any Carrier seeking to participate 

in a lottery must notify the FAA in 

writing, and such notification must be 

received by the FAA 15 days prior to the 

lottery date. The Carrier must report—

(1) If it currently operates scheduled 

service at LaGuardia or has operated 

scheduled service at LaGuardia since 

[EFFECTIVE DATE OF FINAL RULE]; 

(2) The number of Operating 

Authorizations it holds (if any); and 

(3) If there is common ownership with 

any other Carrier, and if so, the identify 

of such Carrier. 

(e) Operating Authorizations obtained 

under this section may not be bought, 

sold, leased, or otherwise transferred 

until one year has elapsed from their 

assignment. 

§ 93.74 Administrative Provisions. 

(a) The FAA will assign priority 

numbers by random lottery for 

Operating Authorizations at LaGuardia. 

Each Operating Authorization will be 

assigned a withdrawal priority number, 

and the 15-minute time period for the 

Operating Authorization, frequency, and 

the arrival or departure designation. 

(b) If FAA determines that operations 

need to be reduced for operational 

reasons, the lowest assigned priority 

number Operating Authorization will be 

the last withdrawn. 

(c) Any Operating Authorizations 

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 

Operating Authorizations 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. 

(d) All transactions under this subpart 

must be in a written or electronic format 

approved by the FAA. 

Issued in Washington, DC on August 23, 

2006. 

Nan Shellabarger, 

Director of Aviation Policy and Plans. 

[FR Doc. 06–7207 Filed 8–25–06; 9:00 am] 

BILLING CODE 4910–13–P 


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