51382 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 93 

[Docket No.: FAA–2005–20704; Amendment 

No. 93–85] 

RIN 2120–AI51 

Congestion and Delay Reduction at 

Chicago O’Hare International Airport 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: The FAA is adopting 

regulations to address persistent flight 

delays from overscheduling at O’Hare 

International Airport (O’Hare). This 

final rule is intended to be an interim 

measure only, and the FAA anticipates 

that the rule will yield to longer term 

solutions to traffic congestion at the 

airport. Such solutions include plans by 

the City of Chicago to modernize the 

airport and reduce levels of delay, both 

in the medium term and long term. For 

this reason, the final rule includes 

provisions allowing for the limits it 

imposes to be gradually relaxed, and in 

any event the regulation will sunset in 

2008. 

DATES: This amendment becomes 

effective October 29, 2006. Affected 

parties, however, do not have to comply 

with the information collection 

requirements in §§ 93.23, 93.25, 93.27, 

93.28, 93.29, 93.30, 93.31, and 93.32 

until the FAA publishes in the Federal 

Register the control number assigned by 

the Office of Management and Budget 

(OMB) for this information collection 

requirement. Publication of the control 

number notifies the public that OMB 

has approved this information 

collection requirement under the 

Paperwork Reduction Act of 1995. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Jeffrey Wharff, Office of Policy and 

Plans, APO–200, Federal Aviation 

Administration, 800 Independence 

Avenue, SW., Washington, DC 20591; 

telephone (202) 267–3274. 

SUPPLEMENTARY INFORMATION: 

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); 

Visiting the Office of Rulemaking’s 

Web page at http://www.faa.gov/avr/ 

arm/index.cfm; or 

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 amendment number or 

docket number of this rulemaking. 

Anyone is able to search the 

electronic form of all comments 

received into any of our dockets by the 

name of the individual submitting the 

comment (or signing the comment, if 

submitted 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 (Volume 

65, Number 70; Pages 19477–78) or you 

may visit http://dms.dot.gov. 

Small Business Regulatory Enforcement 

Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996 requires FAA to comply with 

small entity requests for information or 

advice about compliance with statutes 

and regulations within its jurisdiction. If 

you are a small entity and you have a 

question regarding this document, you 

may contact your local FAA official, or 

the person listed under FOR FURTHER

INFORMATION CONTACT. You can find out 

more about SBREFA on the Internet at 

http://www.faa.gov/avr/arm/sbrefa.cfm. 

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 policies for the use 

of navigable airspace and to assign the 

use we deem 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 this broad statutory 

authority 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 

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). 

Background 

On March 25, 2005, the FAA 

published a notice of proposed 

rulemaking (NPRM) (70 FR 15521) 

which would limit the number of 

scheduled arrivals at O’Hare during 

peak operating hours and establish an 

allocation system, including transfer 

and usage requirements. 

Since publishing the NPRM in March 

2005, the FAA twice has extended the 

Order published in August 2004 that set 

operation limits on domestic and 

Canadian scheduled arrivals into O’Hare 

International Airport. The Order most 

recently was extended to October 29, 

2006, which coincides with the effective 

date of this rule (71 FR 16405; March 

31, 2006). 

History 

The High Density Traffic Airports Rule 

at O’Hare 

Until July 2002, the FAA managed 

congestion and delay at O’Hare by 

means of the High Density Rule (HDR), 

which was codified in 14 CFR part 93, 

subpart K. The FAA adopted the HDR 

under its broad authority to ensure the 

efficient use of the nation’s navigable 

airspace (49 U.S.C. 40103). The HDR 

took effect in 1969, and while it 

originally was a temporary rule, it 

became permanent in 1973. 

The HDR established limits on the 

number of all take-offs and landings 

during certain hours at five airports, 

including O’Hare. In order to operate a 

flight during the restricted hours, an 

airline needed a reservation, commonly 

known as a slot. Slots were initially 

allocated through scheduling 

committees, operating under thenauthorized antitrust immunity, where 

all the airlines would agree to the 

allocation. After the Airline 

Deregulation Act in 1978, new entrant 


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Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 51383 

airlines formed and the pre-existing, or 

legacy carriers, sought to expand. This 

increased competition made it 

increasingly difficult for airlines to 

reach agreement, and the scheduling 

committees began to deadlock. 

In 1984, the FAA amended the HDR 

to increase the hours in which 

limitations at O’Hare would apply and 

to increase the number of take-offs and 

landings permitted at that airport (49 FR 

8237, March 6, 1984). The next year, a 

new Subpart S was added to Part 93 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. 

Statutory Changes Ending the High 

Density Rule at O’Hare 

In 2000 Congress relaxed the slot 

rules at the high density airports and 

phased out the specific regulations then 

in place at three of them, including 

O’Hare (49 U.S.C. 41715, 41717). With 

respect to O’Hare, Congress directed 

that: 

(1) Beginning May 1, 2000, 

exemptions be granted to airlines to 

provide air service to small airports 

with 70-seat or smaller aircraft; 

(2) 30 slot exemptions be granted to 

new entrant or limited incumbent air 

carriers; 

(3) After May 1, 2000, slots no longer 

be required to provide international air 

service; 

(4) Beginning July 1, 2001, the slot 

control restrictions be limited to the 

period between 2:45 p.m. and 8:14 p.m.; 

and 

(5) Slot restrictions be lifted entirely 

after July 1, 2002. 

In phasing out the HDR, however, 

Congress recognized the possibility that 

there could be an increase in congestion 

and delays at the affected airports. 

Therefore, in the section that phased out 

the rule, it made clear 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).) 

Resurgence of Unacceptable Levels of 

Congestion 

As a result of the 2000 legislation, the 

slot restrictions of the HDR lapsed at 

O’Hare as of July 1, 2002. The absence 

of these restrictions allowed airlines 

operating at the airport to add flights, 

which over time led to a dramatic 

increase in airline delays. These delays 

reverberated throughout the national air 

transportation system. 

Initially, lifting the HDR had a 

minimal impact on delays due to the 

lingering effects of the 9/11 terrorist 

attacks on airline passenger traffic. But 

by 2003, the two air carriers operating 

hubs at O’Hare, American Airlines 

(‘‘American’’) and United Airlines 

(‘‘United’’), had added a large number of 

operations and retimed other flights, 

resulting in congestion during peak 

hours of the day. From April 2000 

through November 2003, American 

increased its scheduled operations at 

O’Hare between the hours of 12 p.m. 

and 7:59 p.m. by nearly 10.5 percent. 

Over the same period, United increased 

its scheduled operations at O’Hare by 

over 41 percent. 

The increases in operations by 

American and United did not result in 

a corresponding increase in seat 

capacity. During the peak period, these 

two carriers added 375 regional jet 

operations per day. Overall, American 

and United added over 600 regional jet 

operations per day. At the same time as 

they added regional jet operations, they 

reduced mainline jet operations. The 

result was actually a decrease in seat 

capacity by each carrier at O’Hare of 

more than 5.5 percent from April 2000 

to November 2003 while flights 

increased by an average of 150 per day. 

In November 2003, more than 40 

percent of American’s and United’s 

O’Hare flights were operated with 

regional jets, many to large and medium 

hubs. The significant increases in 

scheduled operations during this time 

period resulted in excessive delays and 

congestion at O’Hare. 

By November 2003, O’Hare had the 

worst on-time performance of any major 

airport. O’Hare arrivals were on time 

only 57 percent of the time, well below 

the FAA goal of 82 percent. Departures 

were little better. They were on time 

only 67 percent of the time, well below 

the average of 85 percent at other major 

airports. These delays averaged about an 

hour in duration. Published schedules 

for February 2004 indicated that the 

problem would be exacerbated by the 

addition of even more flights. 

Recognizing congestion was again 

becoming a significant issue, Congress 

enacted legislation that included a 

mechanism to help reduce delays and 

improve the movement of air traffic at 

congested airports (49 U.S.C. 41722). 

That statutory provision authorized the 

Secretary of Transportation (Secretary) 

to request that scheduled air carriers 

meet with the FAA to discuss flight 

reductions at severely congested 

airports to reduce over-scheduling and 

flight delays during hours of peak 

operation, if the Administrator 

determines that it is necessary to 

convene such a meeting and the 

Secretary determines that the meeting is 

necessary to meet a serious 

transportation need or achieve an 

important public benefit. 

In early 2004, the Secretary and the 

FAA Administrator determined that a 

schedule reduction meeting was 

necessary to deal with congestionrelated delays at O’Hare. Before such a 

meeting could be convened, however, 

United and American each agreed in 

separate discussions with agency 

officials to reduce their scheduled 

flights voluntarily. Accordingly, the 

schedule reduction meeting was 

deferred. Instead, the FAA issued an 

order implementing the voluntary 

agreement of the two air carriers, Docket 

FAA–2004–16944–55; 69 FR 5650 

(2004). The FAA order required a 5 

percent reduction in the two carriers’

scheduled operations. This reduction 

was to be effective between 1 p.m. and 

8 p.m. for six-months, beginning no 

later than March 4, 2004. 

The FAA again reviewed O’Hare’s ontime performance in March 2004 in light 

of the ordered schedule reductions. That 

review showed that the total delay 

minutes would have been as much as 30 

percent higher without the reductions 

but that delays still remained more than 

double the level of a year earlier and 

represented more than a third of the 

total delays in the national airspace 

system. 

In light of the continued problems at 

O’Hare, the agency officials again 

discussed the situation with American 

and United to consider additional flight 

reductions to improve on-time 

performance at the airport. As a result, 

on April 21, 2004, the FAA issued an 

amendment to the previous order in 

Docket FAA–2004–16944. This 

amendment required additional flight 

reductions. Specifically, beginning no 

later than June 10, 2004, it required (1) 

An additional schedule reduction of 2.5 

percent of each carrier’s total operations 

in the 1 p.m. through 7:59 p.m. hours 

including arrival reductions during 

specific times; (2) a reduction in the 

number of scheduled arrivals in the 12 

p.m. hour; and (3) reductions to 

continue through October 30, 2004. 

Prior to the implementation of the 

June flight reductions, delays at O’Hare 

continued. In May, there were a record 

14,495 total delays. While the numbers 

in June and July improved, as the last 

round of cutbacks by American and 

United took effect, the FAA determined 

that the overall trend of delays remained 

unacceptably high. 

Meanwhile, some airlines that were 

not party to the agreement involving 

American and United continued to add 


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1See 71 FR 16405, March 31, 2006; 70 FR 59798, 

October 13, 2005; and 70 FR 15540, March 25, 2005. 

flights, making it unlikely that those two 

carriers would extend their voluntary 

schedule reductions without similar 

commitments by other carriers. 

Published schedules for November 

indicated that during several times of 

the day scheduled arrivals would 

approach or exceed the airport’s highest 

arrival capacity. Accordingly, in July, 

the Secretary and FAA Administrator 

determined that the scheduling 

reduction meeting that had previously 

been deferred now needed to be held 

(69 FR 46201, August 2, 2004). 

The meeting between DOT and the 

carriers convened on August 4, 2004, 

and was followed by meetings between 

Federal officials and individual airlines. 

As a result, United and American agreed 

to reschedule and further reduce 

scheduled arrivals by about 5 percent 

during peak hours and other airlines 

agreed to some flight re-timings and not 

to increase the number of their 

scheduled arrivals. New entrants and 

limited incumbents were permitted to 

add a small number of scheduled 

flights. Based on the information 

provided through the meetings and 

submissions filed in the docket, the 

FAA issued a comprehensive order on 

scheduled arrivals at O’Hare on August 

18, 2004, limiting scheduled arrivals by 

U.S. and Canadian air carriers to 88 

during most hours of the day and 

implementing the above agreement 

(August 2004 Order). The Order took 

effect November 1, 2004, and was to 

expire on April 30, 2005. The FAA 

extended this Order on three separate 

occasions to permit full consideration of 

the issues and comment on the NPRM.1

On each occasion the agency sought the 

views of interested persons on the 

advisability of extending the August 

2004 Order in Docket FAA–2004–16944. 

As indicated in the October 2, 2005, 

extension of the Order, significant 

operational benefit has been achieved 

since the voluntary schedule reductions 

took effect on November 1, 2004. The 

subsequent extensions of the Order were 

necessary to maintain the scheduling 

limits set in August 2004 and achieve 

delay—reduction and operational 

benefits pending completion of this 

rulemaking. 

Related Activity 

On July 8, 2005, the FAA published 

in the Federal Register Special Federal 

Aviation Regulation (SFAR) 105, 

‘‘Reservation System for Unscheduled 

Operations at Chicago’s O’Hare 

International Airport,’’ (70 FR 39610). 

This SFAR limits unscheduled arrivals 

at the airport to four per hour and 

provides an allocation mechanism for 

operators to obtain reservations for 

those operations. SFAR 105 was 

extended through March 31, 2006 (70 

FR 66253). 

On September 30, 2005, the FAA 

issued the Record of Decision for O’Hare 

Modernization providing final agency 

determinations and unconditional 

approval of the revised Airport Layout 

Plan and other certain Federal actions 

by the FAA necessary for the proposed 

improvement of O’Hare, as provided in 

Alternative C presented to the agency 

(the O’Hare Modernization Plan and 

other components of the City’s Airport 

Master Plan.). The O’Hare 

Modernization Plan (OMP) provides for 

certain capacity enhancement actions to 

result in new capacity by 2008. 

Phased implementation of the OMP 

will provide incrementally increasing 

operational benefits. The FAA’s analysis 

projects that the addition of the first 

new OMP runway will, by 2008, allow 

the airfield to accommodate over 50,000 

additional forecast operations with an 

average annual delay per aircraft no 

higher than exists today. With the 

completion of Phase 1 of the OMP, the 

FAA’s analysis projects that the airfield 

will accommodate, by the 2010 time 

frame, approximately 90,000 additional 

forecast operations (over today’s activity 

level) with a decrease in average annual 

delay per aircraft of approximately 33% 

below today’s delay per aircraft at 

O’Hare. Finally, with the completion of 

OMP Phase 2 in 2013, the FAA’s 

analysis projects that the airfield will 

accommodate approximately 1.12 

million annual forecast operations (an 

increase of more than 140,000 annual 

operation over today’s activity level) 

with an average annual delay per 

aircraft nearly 70% below today’s delay 

per aircraft. 

Summary of Comments 

The FAA published the NPRM, 

‘‘Congestion and Delay Reduction at 

Chicago O’Hare International Airport,’’

on March 25, 2005. The comment 

period closed on May 24, 2005. During 

that period, we received 22 comments 

from interested parties including 

airlines, industry organizations, 

individuals, members of Congress and 

the City of Chicago (City). We also 

received five additional comments after 

the close of the comment period. 

In the NPRM, we requested comment 

on several specific aspects of the 

proposed rule, as well as any general 

comments. Comments to the NPRM are 

addressed below by topic. Only one 

commenter supported the proposal 

entirely; he is a student and pilot. 

Overall, most commenters agreed that 

before the recent schedule reductions at 

O’Hare, congestion and delays had 

become intolerable. Some clearly 

disliked the proposal and questioned 

whether less intrusive methods were 

available to address short-term 

congestion and delay. Nearly all 

commenters agreed that governmental 

limits on flights are not the preferred 

approach and increasing air traffic 

capacity at O’Hare is the best way to 

solve the problem of congestion and 

delays. Some commenters suggested 

that the Order only accomplished what 

market forces ultimately would have 

dictated carriers to do if given 

appropriate time. 

Comments expressing concern that 

the NPRM amounted to a reimposition 

of the HDR were received from Senators 

Richard Durbin and Barack Obama, and 

Representatives Dennis Hastert, Jesse 

Jackson, Jr., Jerry Costello, John 

Shimkus, Jerry Weller, Melissa Bean, 

Danny K. Davis, Henry Hyde, Judy 

Biggert, Timothy Johnson, Daniel 

Lipinski, Luis V. Gutierrez, Lane Evans, 

Bobby L. Rush, Rahm Emanuel, Mark 

Kirk, and Donald A. Manzullo 

(Members of Congress). The Members 

did not oppose a short-term limit on 

flights, with certain modifications, 

provided that the rule sunset (as 

proposed) no later than April 2008. 

Expiration of the August 2004 Order (No 

Further Governmental Action) 

We questioned in the NPRM whether 

the limitations established in the August 

2004 Order should be allowed to expire 

of their own accord with no 

governmental intervention to address 

the operational environment at the 

airport. Under this approach, carriers 

would be free to determine the number 

and timing of flights at O’Hare. 

The Department of Justice (DOJ) and 

the Air Carrier Association of America 

(ACAA) objected to allowing the Order 

to expire with no mechanism in place 

to manage demand at O’Hare. DOJ 

argued that allowing the Order to expire 

with no plan in place to deal with the 

airport’s limited capacity would lead to 

more congestion and significant delays 

for passengers throughout the country. 

ACAA contended that both American 

and United would add flights to block 

competition at any cost and that smaller 

carriers have fewer options to cancel 

flights or re-route passengers through 

other airports and consequently suffer 

disproportionate delays. 

The City argued the opposite. The 

City requested that the FAA accelerate 

the OMP approval process, allow the 

Order to expire, and let free market 

forces manage flight levels. The City 


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Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 51385 

2The City comments that each carrier could be 

returned to November 2004 flight levels to ensure 

that there are not incentives for carriers to 

overschedule. However, if the August 2004 Order 

expires, we expect the target and the base schedules 

would be issues during the negotiations. 

also countered that the airlines have 

learned their lesson from past 

overscheduling and are not likely to 

repeat that practice. However, if delays 

were to reach unacceptable levels again, 

the City suggested that the FAA 

negotiate a new temporary scheduling 

agreement like the one that resulted in 

the August 2004 Order. The Airports 

Council International-North America 

(ACI–NA) supported the comments filed 

by the City. 

The FAA has determined that a rule 

limiting arrivals at O’Hare is necessary. 

After the phase-out of the HDR at 

O’Hare, carriers had the opportunity to 

add flights and adjust schedules as they 

saw appropriate, which resulted in 

extensive delays for all operators at 

O’Hare and wide-ranging effects on the 

NAS. In contrast, since the limits on 

scheduled and unscheduled arrivals 

took effect on November 1, 2004, air 

traffic delays have decreased and ontime arrival performance has increased. 

Through October 2005, the average 

minutes of arrival delay at O’Hare 

decreased by approximately 24 percent 

when compared to the same 12-month 

period the year before. The longest 

arrival delays lasting more than one 

hour have decreased by 28 percent. 

Overall, the on-time arrival performance 

at O’Hare has increased by almost 7 

percentage points. As a result, O’Hare is 

now performing near the average of the 

rest of the major airports in the NAS, a 

dramatic improvement from the 

airport’s bottom-tier performance during 

much of 2004. 

The FAA could permit the current 

scheduling limits to expire and allow 

carriers to individually determine the 

number and timing of their flights at 

O’Hare as advocated by some of the 

commenters. Safety would be 

maintained through air traffic control 

(ATC) procedures and congestion would 

be managed as needed through various 

traffic management initiatives. However, 

based on the history of scheduled 

demand, we forecast that flights would 

increase and that delays, cancellations, 

and disruptions at O’Hare and other 

airports are likely and would be 

unacceptable to the industry and the 

flying public. As indicated by the 

previous statistics, the limits imposed 

by the August 2004 Order have resulted 

in measurable reductions in delay. We 

are mindful that other factors have 

contributed to the decrease in delay, 

including additional flight reductions 

by some carriers beyond those specified 

in the Order, and increased operational 

capacity in some periods due to 

improved weather and other system 

efficiency gains. 

We are not persuaded by the City’s 

argument that the carriers at O’Hare will 

be able to resist the short-term 

marketplace incentives to add flights 

during peak hours, particularly if one or 

more of the hub carriers significantly 

changes its schedule or the other 

carriers introduce new service to 

O’Hare. Carriers typically respond to 

competition by matching frequency 

and/or fares. At O’Hare, the hubbing 

carriers have reduced flights 

significantly since November 2003, and 

if the Order expired, might resume 

previous flight frequencies or enter new 

markets to respond to other carriers’

schedules. 

In the event that flights were added 

and delays increased significantly, we 

could initiate schedule discussion 

meetings similar to the August 2004 

discussions while continuing to manage 

delays on a daily basis. This process, 

however, would be counterproductive 

to our mandate to manage the use of the 

navigable airspace efficiently, 

particularly since it is very likely that 

carriers would launch new operations 

once the August 2004 Order expired. 

Furthermore, our ability to secure a new 

voluntary schedule reduction agreement 

is at best uncertain in view of the 

comments submitted in this rulemaking. 

Consequently, we dismissed this option 

as a feasible solution. 

American noted that other airports 

experience more delay than O’Hare and 

that the FAA has not intervened there. 

American questions why O’Hare was 

singled out for such action. United 

commented that the operational limits 

at O’Hare, which is its primary hub, 

limit its ability to increase operations 

for new market opportunities or high 

passenger load factors. 

The agency is addressing congestion 

at other delay prone airports. A single 

approach to manage congestion and 

delay at all airports cannot be 

realistically achieved at present. As 

articulated previously and elsewhere in 

the document, the deteriorating 

situation at O’Hare had impacts far 

beyond that airport. Delays at other 

airports on the other hand, generally do 

not lead to delays throughout the 

nation’s air transportation system. Given 

the competitive stance of the major 

carriers, we believe that it was unlikely 

to be solved without government 

intervention. Our preference is to use 

whichever methods for addressing 

congestion are best suited for a 

particular airport. These methods may 

include increasing airport capacity and 

system efficiencies, or in the case at 

O’Hare, addressing through regulatory 

limits the impact of schedule 

adjustments by the largest operators at 

the airport. 

Extend the August 2004 Order 

No commenter specifically 

recommended that we simply extend 

the August 2004 Order until 2008. The 

City did suggest this action as an 

alternative if the current Order were 

allowed to expire and operations grew 

causing the airport to return to a critical 

state. DOJ stated that this option would 

be better than doing nothing; but it 

would lead to inefficient use of the 

airport’s limited capacity and is not 

likely to result in any significant new 

entry or expansion by smaller carriers. 

After considering this option, we 

concluded that it would be difficult to 

maintain the current agreement or 

negotiate yet another voluntary 

schedule reduction agreement that 

would limit operations until new airport 

capacity is in place. We agree with DOJ 

that while the continuation of the Order 

would achieve the objective of limiting 

overall operations at the airport, it 

would not necessarily result in any new 

entry by smaller carriers for the duration 

of the proposal. Also, this option would 

not necessarily promote the most 

efficient use of the operating authorities 

at O’Hare, given that the existing Order 

does not include provisions for usage, 

allocation, or market-based transfer 

mechanisms. 

Any future scheduling discussions 

would start with current operational 

levels and the FAA’s scheduling targets 

proposed for those discussions would 

apply.2 As indicated in the comments, 

carriers of all sizes have expressed a 

desire to expand their operations at 

O’Hare, or at least preserve their option 

to grow. A scheduling meeting would 

confront us with complex and 

controversial determinations as to 

which carriers would have access to 

new capacity as it became available and 

how any new capacity would therefore 

be allocated. This is a complicated 

obstacle to overcome in the context of 

attempting to obtain a voluntary 

agreement from competing air carriers. 

The FAA and the Office of the 

Secretary of Transportation are 

continuing the evaluation of marketbased mechanisms, such as auctions or 

congestion pricing that may improve on 

prior methods of allocating available 

capacity at constrained airports. This 

evaluation includes an assessment of 

the research conducted by the 


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3NEXTOR is a consortium of universities 

contracted by the FAA to research various aviation 

issues. 

4 49 U.S.C. 40103. 

5 33 FR 17896; December 3, 1968. 

6 49 U.S.C. 41715(b)(1). 

7The schedule reduction meeting was convened 

under 49 U.S.C. 41722. 

8 During this period, scheduled arrivals are not to 

exceed 50 during each half-hour beginning at 7 a.m. 

and ending at 7:59 p.m. Scheduled arrivals are not 

to exceed 88 within any two consecutive 30-minute 

periods. 

9There were 89 arrivals modeled during the 1 

p.m., 3 p.m., and 6 p.m. hours and 98 arrivals in 

the 8 p.m. hour. Four arrivals per hour were added 

for unscheduled flights. The modeled results also 

included the impact of schedule agreements based 

on a 15-minute distribution. While that limitation 

was not incorporated as a condition in the August 

2004 Order, it largely has been maintained by air 

carriers through on-going consultation with FAA on 

proposals to move arrivals between 15 minute 

periods. 

Department’s contractor, National 

Center of Excellence for Aviation 

Operations Research (NEXTOR),3 in 

conjunction with various air carriers 

and the Port Authority of New York and 

New Jersey, on options to manage 

demand at LaGuardia upon the 

expiration of the HDR at that airport. A 

market-based approach represents a 

much longer-term option that is not 

needed at this point in time at O’Hare, 

given the expectation of capacity 

improvement through the OMP. 

As it would be unwise to let the limits 

simply expire, we find it necessary to 

invoke our authority to manage the 

efficient use of the navigable airspace 

and to impose peak hour scheduling 

limits at O’Hare so as to prevent 

overscheduling given the airport’s 

current capacity. Even with the FAA 

approval of the OMP, there are no viable 

capacity enhancement efforts 

(procedural or technological) expected 

during the effective period of this rule 

that will result in sufficient capacity 

gains to completely meet the airport 

demand experienced during 2003 and 

2004. Moreover, the uniqueness of 

O’Hare (as a major, dual hub airport) 

and its critical role in the National 

Airspace System (NAS) warrant special 

attention and careful measures to 

manage operations at that airport until 

new capacity comes on-line. 

We stress that as a policy matter the 

Department promotes the efficient 

utilization of existing system capacity 

and the development of new capacity to 

meet aviation demand. We also prefer to 

address operational and airport 

congestion issues on a local level with 

airport operators and customers to the 

greatest extent practicable. This rule 

provides a temporary regulatory 

solution necessary to maintain an 

acceptable level of operations at O’Hare 

without congestion and delay impacting 

the entire NAS. 

Authority To Cap Arrivals at the Airport 

America West and Continental 

opposed all government-imposed 

restrictions on airport access. These 

carriers, along with others, argued that 

the NPRM is contrary to Congressional 

intent in the Wendell H. Ford Aviation 

Investment and Reform Act for the 21st 

Century (AIR–21), which phased out the 

slot regulations at O’Hare. They also 

argue that as the HDR has been 

eliminated at O’Hare, the FAA may not 

implement a rule that is substantially 

similar to the HDR. 

In carrying out our plenary authority 

to manage the safe and efficient use of 

the navigable airspace,4 we properly 

may impose limits on flights at O’Hare 

to reduce delays and congestion. The 

HDR, which was also promulgated 

under this authority, addressed delays 

and congestion at five main airports.5

While AIR–21 provided for the 

termination of the HDR at O’Hare and 

the New York airports, it also included 

a proviso that the FAA’s ‘‘authority for 

safety and the movement of air traffic’’

was not to be affected by the phase out 

and termination of the HDR at O’Hare 6

or other HDR airports. There is no 

indication that Congress intended to 

narrow the FAA’s authority to manage 

the use of the navigable airspace or to 

prohibit its use of this authority at 

O’Hare. AIR–21 by its terms only 

terminated the HDR then in place and 

did not restrict the FAA’s authority to 

regulate the use of the airspace. The 

legislative history to the House version 

of AIR–21 (H.R. 1000), 106th Cong., Rpt. 

106–167 indicates Congress’ intent 

simply to place O’Hare on the same 

‘‘playing field’’ as other airports. 

Since AIR–21 the FAA has exercised 

its authority to manage the efficient use 

of the navigable airspace by capping the 

flood of AIR–21 slot exemptions filed 

for LaGuardia Airport (in November 

2000), and by ordering schedule 

reductions in August 2004 at O’Hare.7

In Vision 100—Century of Aviation 

Reauthorization Act (Pub. L. 108–176), 

Congress gave the Secretary and 

Administrator new authority to convene 

industry-wide scheduling meetings at 

O’Hare and elsewhere; these meetings, 

however, can only result in effective 

action if implemented through orders 

limiting flight operations. This basis for 

this new authority would not make 

sense if Congress had intended to take 

away the Administrator’s authority to 

restrict operations at O’Hare. In all of 

these matters, as with the HDR in 1969, 

the agency was faced with delays at 

certain key airports that transcended 

those airports and disrupted the 

efficiency of the NAS. We conclude that 

the FAA retains its full authority to 

adopt this rule limiting flights at 

O’Hare. 

Operational Cap 

The FAA proposed to limit the 

number of scheduled arrivals at O’Hare 

to 88 per hour, between the hours of 7 

a.m. and 7:59 p.m. Monday through 

Friday and 12 p.m. and 7:59 p.m. 

Sunday.8 The limit on scheduled 

arrivals would increase to 98 arrivals 

per hour in the 8 p.m. hour, Monday 

through Friday. These are the same 

hourly quotas imposed by the August 

2004 Order. In setting the hourly arrival 

cap under the Order and proposing the 

same for the NPRM, the FAA relied on 

analyses of actual, weekday, hourly 

arrivals and departures at O’Hare in late 

2003 and in 2004. (This is when 

scheduled demand at O’Hare was at its 

peak and pressure on the ATC system to 

accommodate that demand is reflected 

in actual airport hourly traffic counts.) 

We also relied on analyses preformed by 

MITRE Corporation’s Center for 

Advanced Aviation System 

Development (CAASD), which ran 

computer modelling on behalf of the 

FAA to simulate the effect of 

hypothetical schedule reductions on the 

level of flight delays at O’Hare given the 

established air traffic control procedures 

and airport capacity.9

The models predicted that constraints 

used in the August 2004 Order and the 

NPRM would reduce delays at the 

airport by approximately 20 percent 

from the levels attributed to schedules 

in effect at the time the August 2004 

Order was imposed. MITRE/CAASD 

also simulated the results of a 

completely unconstrained schedule, 

using the industry’s proposed November 

2004 schedules and calculated that 

delays under the Order would be 

approximately 43 percent less than 

would be experienced if no action were 

taken and schedules similar to the 

November 2003 schedules were allowed 

to take effect. 

The City commented that the 

proposed hourly limits do not take 

advantage of present available capacity 

at the airport. The City contended that 

the airport could accommodate 92 

scheduled arrivals per hour and 

accommodate international and 

unscheduled arrivals above that level. 

ACI–NA supports the City’s comments. 

We have reviewed the operational 

performance of O’Hare, including the 

percentage of flights arriving and 


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10We note that there would also be an average of 

four unscheduled arrivals per hour. 

11The NPRM proposed no more than 67 Arrival 

Authorizations between 8 and 8:30 p.m. 

12The hourly limit of 88 scheduled arrivals per 

hour includes international arrivals scheduled for 

the Summer 2004 scheduling season. 

13Third extension of the Order dated March 27, 

2006. 

departing the gate within 15 minutes of 

scheduled time, the percentage of flights 

delayed for more than one hour, recent 

actual arrival and departure rates, and 

have considered whether there have 

been any material capacity 

enhancements that would provide a 

basis for a higher hourly cap on 

scheduled arrivals. Our review 

indicated there have been variations in 

delay levels, airport acceptance rates, 

and weather patterns since the Order 

took effect in November 2004 but no 

significant capacity enhancement 

measures have been realized. 

As stated, the City proposed a new 

cap of 92 scheduled domestic (and 

Canadian arrivals) per hour and no 

limits on international arrivals of either 

domestic or foreign air carriers.10 The 

combined arrival demand under such a 

scenario could be accommodated only 

under optimal weather conditions and 

then, with some delays. Such a proposal 

would significantly increase delays over 

current levels in non-optimal 

conditions. 

We noted in the NPRM that if during 

the pendency of this rulemaking, the 

actual performance of O’Hare—as 

indicated in the cumulative delay 

statistics and modeling results—

demonstrated that an increase in the cap 

on operations would still allow for 

acceptable operational performance, 

then the arrival cap might be raised in 

the final rule. The final rule, however, 

adopts the proposed limits of 88 

scheduled arrivals per hour and no 

more than 50 scheduled arrivals in each 

half-hour period beginning at 7 a.m. The 

final rule also adopts the higher limit of 

98 arrivals during the 8 p.m. hour but 

amends the half-hour limit in that hour 

to be the same as in the other halfhours.11 Accordingly, in the 8 p.m. 

hour, each half-hour cannot exceed 50 

scheduled arrivals. 

The limits proposed in the NPRM 

mirror those reached during the August 

2004 schedule discussions and 

incorporated in the August 19, 2004 

Order, as amended. We accepted the 

higher limit in the 8 p.m. hour in the 

negotiated agreement and in recognition 

that the following hour had sufficient 

capacity to quickly absorb any potential 

delays. The actual flight schedules 

during the half-hour limits for 8 p.m. 

proposed in the NPRM, however, were 

not balanced. In reviewing the 

operational impact of the compression 

of arrivals in the first part of the 8 p.m. 

hour, we conclude that it is not 

appropriate to adopt the proposed 

higher, half-hour limit for this hour. 

While we will assign Arrival 

Authorizations in accordance with the 

carrier limits established in the Order, 

should any Arrival Authorizations in 

the 8 p.m. hour, or any other hour, be 

returned or withdrawn, they will be 

reassigned but within the half-hourly 

limit not to exceed 50 Arrival 

Authorizations. 

Some periods may have minor 

variations from the adopted hourly or 

half-hourly limits based on the Arrival 

Authorizations initially assigned. Some 

periods may be slightly over the 

adopted limits, while others are slightly 

under. We do not expect any new, major 

operational impacts, but we expect that 

some of these variations will be resolved 

over time as we consider schedule 

adjustments by carriers. 

We are also adopting provisions to 

accommodate newly requested 

international arrivals above the hourly 

limits,12 and we will also assign Arrival 

Authorizations for international arrivals, 

as described later. We have decided not 

to withdraw Arrival Authorizations 

from domestic operations in order to 

accommodate new international 

arrivals, as the Department expects the 

number of new international arrivals to 

be minimal during the life of this rule. 

The FAA intends to work with operators 

of international flights to minimize any 

potential impacts during peak hours but 

ultimately expects to accommodate 

these new flights even if there may be 

some operational or delay impacts. 

Additional discussion on the adopted 

rules that apply to international arrivals 

appears in a later section. 

Although overall performance of the 

airport has exceeded the modeled 

results, several hours have scheduled 

arrivals below the levels permitted by 

the Order. Some carriers are not 

utilizing all their authorized scheduled 

arrival times, resulting in periods when 

the airport could accommodate 

additional flights. This rule adopts a 

usage provision in addition to a blind 

buy/sell/lease provision, which we 

expect to increase the actual utilization 

of the Authorizations (because carriers 

will either use them for their own flights 

or sell/lease them to other carriers). 

Some Arrival Authorizations are 

available and will be assigned at the 

time of initial assignment under this 

rule. Requests for Arrival 

Authorizations for new international 

service will be accommodated first and 

any remaining Arrival Authorizations 

will then be assigned using a preferred 

lottery. Both of these assignment 

mechanisms and our rationale 

supporting the use of these mechanisms 

are fully described further in this 

document. 

In the third extension of the Order,13

the FAA specifically addressed the ten 

Arrival Authorizations previously 

operated by Independence Air and 

explained why those operations are not 

excess capacity. Independence Air 

ceased operations all operations on 

January 6, and because Arrival 

Authorizations cannot be sold, leased, 

or transferred except on a one-for-one 

basis under the August 2005 order, they 

have been unused since that date. We 

concluded that all the subject Arrival 

Authorizations may not be available for 

reallocation because when negotiating 

scheduled reductions in anticipation of 

the August 2004 order, the FAA had to 

allocate Arrival Authorization in some 

peak afternoon and evening hours at 

levels that exceed the peak-hour target 

of 88 scheduled arrivals per hour. 

Furthermore, foreign carriers whose 

operations were not affected by the 

Order, have adjusted their schedules 

from August 2004 resulting in increased 

scheduled arrivals during certain hours. 

The Arrival Authorizations assigned to 

Independence Air, particularly in the 

peak afternoon and evening hours will 

offset these periods of continued 

scheduling over the operational target. 

We expect that approximately four 

Arrival Authorizations that were 

operated by Independence Air will be 

available in the morning hours for 

assignment under this rule. 

As proposed, the FAA will semiannually review the operational 

performance metrics for O’Hare, as well 

as any new, procedural or other capacity 

enhancement measures, to determine if 

additional Arrival Authorizations may 

be assigned. The FAA intends to 

increase the cap on operations when 

doing so is supported by the operational 

analyses performed in these reviews and 

our delay reduction objectives. We 

believe that various provisions of this 

rule discussed above adequately address 

the City’s concern about utilizing 

existing capacity at the airport. 

This rule adopts a caveat in the 

provisions governing the initial 

assignment of Arrival Authorizations 

that was not proposed in the notice. The 

NPRM proposed that carriers 

conducting scheduled service to O’Hare 

under the August 2004 Order would 

receive corresponding Arrival 

Authorizations for that service. Recent 


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14See 49 U.S.C. 40101(a)(4), (6), (10–13)). 

15See FAA’s ‘‘Special Slot Withdrawal and 

Reallocation Procedures,’’ 51 FR 8632 (1986). 

16See High Density Airports; Notice of Extension 

for the Lottery Allocation and Notice of Lottery for 

Limited Slot Exemptions at LaGuardia Airport 66 

FR 41294 (Aug. 7, 2001) (expanding the scope of 

new entrants eligible to participate in the lottery to 

those that did not participate in the Dec. 4, 2000 

lottery and those that had not applied for the AIR–

21 slot exemptions by Dec. 4, 2000); High Density 

Airports, 67 FR 65826 (Oct. 28, 2002) (adopting the 

new entrant preference procedure for reallocating 

by lottery withdrawn or returned exemption slots 

at LaGuardia). 

events have required that we 

contemplate a situation for which a 

carrier was operating at ORD under the 

Order but has since terminated all 

service at O’Hare prior to our 

concluding this rulemaking. In such a 

case, we conclude such carrier(s) should 

not be entitled to corresponding Arrival 

Authorizations under this rule. Arrival 

Authorizations are not property and in 

view of such, the agency has expressly 

limited opportunities to monetize and 

collateralize this authority under the 

rule adopted here. In the above 

situation, permitting a carrier to 

‘‘retain’’ this authority under the rule 

would provide the carrier with the 

ability to unfairly monetize its operating 

authority at the expense of other carriers 

seeking to operate at O’Hare or increase 

service. We do not find it fair or in the 

public interest to provide a carrier that 

is not serving the airport with the 

opportunity to monetize and 

collateralize the authority under the rule 

adopted here. Consequently, we have 

included a provision to require that for 

a carrier to receive an initial assignment 

of Arrival Authorizations, the carrier 

must be conducting some level of 

service at the airport as of October 29, 

2006. 

New Entrant/Limited Incumbent 

Preference for New Capacity 

The proposal contemplated initially 

assigning all of the Arrival 

Authorizations based on the airport’s 

existing scheduling limits and according 

to the carriers’ existing operations. This 

assignment would benefit all of the 

incumbent carriers, especially United 

and American, which would hold the 

vast majority of Arrival Authorizations. 

The Notice proposed that any Arrival 

Authorizations withdrawn or returned 

to the FAA would be reallocated by 

lottery to new entrants and to carriers 

with few operations (‘‘limited 

incumbents’’). In addition, the Notice 

proposed that, with respect to 

additional capacity created by an 

increase in operational caps from 88 to 

89 or 90 arrivals per hour, the resulting 

additional Arrival Authorizations also 

be assigned by lottery to new entrants 

and limited incumbents. Under both 

scenarios, those Arrival Authorizations 

remaining after lottery would be 

assigned to incumbent carriers and then 

on an interim basis until the next 

lottery. Under the proposal, with respect 

to additional capacity created by an 

increase in operational caps above 90 

arrivals per hour, the additional Arrival 

Authorizations would be assigned by 

lottery with no preference based on 

carrier identity. 

We invited comments on whether the 

preference for new entrants and limited 

incumbents would promote 

competition. Specifically, we asked 

whether the service benefits potentially 

obtainable from incumbent carriers’

networks argue against use of a lottery 

that prefers new entrant and limited 

incumbent carriers. 

We first address our authority to 

adopt such a preference and then 

address the policy considerations 

supporting the preference. Lastly, we 

address arguments relating to 

allegations of an unconstitutional taking 

of property or deprivation of due 

process. 

1. Authority to impose a preference 

for new entrants/limited incumbents. 

American and United challenged the 

FAA’s authority to impose a preference 

and argued that the FAA cannot engage 

in economic regulation by favoring 

some carriers over others to ‘‘promote 

competition.’’

Any scheme to limit flights at O’Hare 

must allocate those operating authorities 

according to some criteria. We expect 

that any set of criteria adopted would 

benefit certain carriers to the detriment 

of others and no one formula would be 

universally acceptable to all affected 

carriers. The FAA’s statutory authority 

to regulate the navigable airspace does 

not expressly direct the agency to 

consider any specific factor in allocating 

airspace rights. Absent such expression, 

we must look to the public interest in 

determining criteria for assignment of 

these Arrival Authorizations. In 

considering the public interest, we are 

guided by the policy goals prescribed 

for the Secretary 14 and the procompetition policies followed by 

Congress in adopting legislation on 

matters such as slot exemptions and 

airport grant programs. See, e.g., Delta 

Air Lines v. CAB, 674 F.2d 1 (D.C. Cir. 

1982). The courts have approved the 

Secretary’s reliance on the procompetition polices in allocating slots 

under the HDR. Northwest Airlines v. 

Goldschmidt, 645 F.2d 1309, 1315 (8th 

Cir. 1980). 

As we articulated in the August 2004 

Order, Congress has set forth a policy of 

promoting deregulation and competition 

in the airline industry by means of the 

Airline Deregulation Act of 1978 and 

subsequent legislation. In AIR–21, 

Congress authorized the award of slot 

exemptions at the HDR airports to new 

entrants and limited incumbents—i.e., 

those carriers that have little or no 

presence at the slot-controlled airports. 

(See 49 U.S.C. 41714(c), (h), 41716(b), 

41717(c), 41718(b)(1).) Congress also 

included similar provisions in statutes 

governing airport grants and passenger 

facilities charges, designed to encourage 

airports to adopt policies that will 

promote competition. (See 49 U.S.C. 

40117(k), 47106(f), and 47107(s).) 

The Department’s prior 

pronouncements and decisions on the 

efficient use of the airspace have 

frequently cited concerns about airport 

access and competition. For example, 

under the HDR, we established a 

regulatory framework that included a 

buy/sell provision to address the goals 

of access, competition and small 

community service. Also, under the 

HDR, the Department sought to alleviate 

the advantage that incumbent carriers 

gained under the initial allocation of the 

HDR—which ‘‘grandfathered’’ hundreds 

of slots for existing operations)—and to 

afford new entry at the slot-controlled 

airports. We did so by withdrawing up 

to 5 percent of the air carrier slots at 

LaGuardia, O’Hare and Washington 

National Airport to allocate by lottery to 

new entrants and limited incumbents.15

More recently, in response to the 

escalating number of AIR–21 slot 

exemptions filed for LaGuardia Airport 

in December 2000, the FAA issued 

orders governing the allocation of those 

slot exemptions that took into account 

the need to promote competition.16

2. Policy considerations concerning 

the new entrant/limited incumbent 

preference. 

This part of the proposal received the 

most comment. Support for the 

preference came from those air carriers 

or their representatives that could 

benefit from the proposal, such as 

Alaska Airlines, America West, 

Independence Air, and ACAA. Those 

opposed to the preference include 

American, Delta Air Lines (Delta), US 

Airways, United, LECG LLC (in 

coordination with United), Regional 

Airline Association (RAA), the City, and 

Members of Congress. 

Alaska Airlines strongly supported 

our reliance on competition 

considerations and argued that the 

preference is fair, appropriate and 

supports a key public interest objective. 

America West urged the FAA to 


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17US Airways does not indicate specifically why 

having 17 arrivals is unique relative to other nonhub carriers. Air Canada has 16 arrivals; Northwest 

has 20; Delta has 21; and Continental has 22. 

18Hub cities included in the LECG analysis 

include: New York, Chicago, Denver, Philadelphia, 

Houston, Dallas, Charlotte, Detroit, Minneapolis, 

Atlanta, and Cincinnati. 

19According to the LECG analysis, ‘‘In 2004 

Midway offered non-stop service to all but two of 

the 25 large hubs with non-stop service from O’Hare 

(Honolulu and Salt Lake City).’’

20 DOJ argued in its comments that transparency 

in the market, market power vested in the 

incumbents, and repeated use of temporary 

administrative allocation mechanisms (that do not 

create long-term property rights) all contributed to 

the insufficiency liquidity of the secondary market 

under the HDR. 

establish a system by which Arrival 

Authorizations are withdrawn from 

incumbent carriers if any new entrant or 

limited incumbent requests one and 

none are available. America West 

further commented that new entrants 

and limited incumbents should have 

first access to all new Arrival 

Authorizations even if they exceed 90 

per hour. ACAA supported preferential 

treatment for new entrants and limited 

incumbents and asked that Arrival 

Authorizations held by American and 

United be withdrawn and redistributed 

at the rate of 2 additional Arrival 

Authorizations per hour. Additionally, 

ACAA asked that 5% of those Arrival 

Authorizations held by American and 

United be withdrawn and redistributed 

to new entrants and limited incumbents 

each year the rule is in place. 

The City argued, in contrast, that the 

FAA should not discriminate among 

types of carriers and noted that O’Hare 

is one of the most competitive markets 

in the nation. The City also was 

concerned that the proposed preference 

would discourage incumbent carriers 

from working on meaningful delay 

reduction (that is, capacity enhancing) 

technological, and/or procedural 

changes at O’Hare, given that any 

resulting new capacity would initially 

benefit its competitors. The City also 

noted that allocation by random lottery 

may not result in the highest and best 

use of a limited resource. 

Members of Congress commented that 

the proposal treats foreign carriers, new 

entrants, and limited incumbents 

preferentially and severely 

disadvantages the hub carriers, who 

have invested heavily in O’Hare. They 

also commented that Chicago is a highly 

competitive marketplace and all but 

four of the major U.S. carriers are 

represented in this region. 

American commented that it and 

United had both reduced operations 

throughout 2004 while other carriers 

were allowed to increase operations 

without any constraint. American 

refuted the assertion in the NPRM that 

it can shift flights in response to 

consumer demand stating that, as 

O’Hare is its hub airport, the timing of 

flights is critically important to creating 

the maximum number of potential 

connecting opportunities. American 

contended that it reduced its schedule 

to meet the agency’s scheduling target 

under the August 2004 Order and that 

Arrival Authorizations in excess of 88 

per hour do not realistically represent 

‘‘new’’ capacity. 

Delta commented that the preference 

for allocating capacity does not place 

‘‘maximum reliance upon competitive 

market forces and competition’’ as 

stated in the NPRM. Delta argued that 

the proposal undermines competition 

by favoring some carriers over others, 

and that future capacity should be 

distributed using the same public 

auction procedure proposed for buy/sell 

transactions, with all carriers permitted 

to compete equally for those rights. 

US Airways commented that it is 

uniquely disadvantaged by the 

preference for new entrants and limited 

incumbents. US Airways argues that 

new entrants and limited incumbents 

could get new capacity and large 

incumbent carriers could operate 

flexibly with their larger holdings, but it 

could not respond competitively 

because it is neither a limited 

incumbent nor a large carrier at 

O’Hare.17 US Airways noted that the 

NPRM did not provide any analysis 

indicating new entrant and limited 

incumbent carriers would, in fact, offer 

the travelling public more benefits than 

the network carriers or any analysis 

assessing the impact of Midway Airport. 

US Airways would prefer that all 

additional Arrival Authorizations be 

allocated through a no-preference 

lottery available to all carriers. US 

Airways claimed the stated policy 

directive to rely on competitive market 

forces and the pro-competition policies 

in the Airline Deregulation Act are not 

served by the proposed preferred lottery 

because it favors certain types of 

competitors at the expense of others. 

United also argued that adequate 

competition clearly exists at O’Hare and 

that findings presented in comments 

filed by LECG show Chicago to have the 

‘‘second highest penetration of low fare 

carriers out of 11 major hub cities and 

it also has the lowest weighted average 

fare of any of the 11 major hub cities 

examined.’’ 18 United contended that 

the FAA offered contradictory 

arguments by acknowledging Chicago as 

a competitive market in the cost-benefit 

analysis while proposing preferential 

treatment for certain carriers in the 

name of competition. Additionally, 

United asked the FAA to take Midway 

Airport into account when considering 

competition.19

United also expressed concern that 

the inability to obtain new Arrival 

Authorizations could put it at a 

competitive disadvantage while demand 

for international service grows and that 

it would have to decrease its service to 

small and mid-size communities in 

order to compete internationally. 

We have decided to retain the 

proposed lottery preference. The rule 

will give new entrants and limited 

incumbents a relatively small advantage 

in obtaining additional Arrival 

Authorizations from a pool that, at most, 

will be 30 Arrival Authorizations per 

day—out of the more than 1,200 

scheduled peak hour arrivals at O’Hare. 

By way of contrast, American and 

United each operate more than 400 

arrivals per day. Additionally, both 

carriers conduct international 

operations and might benefit by 

receiving Authorizations for those 

flights outside the operational cap. (See 

discussion on international allocation in 

this document.) Unlike airlines with 

only a few flights at O’Hare, these 

carriers also have the ability to maintain 

their market presence by substituting 

larger jets for regional jets on some of 

their flights. 

New entrants and limited incumbents 

will receive a preference in the 

reassignment of available Arrival 

Authorizations created by any increase 

in the hourly limitation from 88 to 89 

or 90 authorizations per hour. In 

addition, we are adopting a ‘‘blind’’

buy/sell mechanism for transactions 

involving Arrival Authorizations by 

shielding the identity of parties to 

proposed transactions. This process 

should give a greater opportunity for 

smaller carriers to purchase or lease 

necessary arrival privileges. In this 

regard, we are influenced by the views 

of DOJ and others criticizing the lack of 

a robust secondary market under the 

HDR and urging us to adopt procedures 

that will result in an efficient allocation 

of slots and competitive entry at 

constrained airports.20 At the same time, 

however, by leaving the current 

assignment of arrival privileges 

essentially unchanged from our existing 

orders, the vast majority of operating 

privileges will be held by the two largest 

carriers at the airport. 

Entry, particularly by low-fare 

airlines, is an essential ingredient for 

airline competition. Studies of airline 

industry competition under 

deregulation have concluded that lowfare entry has a substantial impact on 

price and service. For instance, 


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51390 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 

21 21 United states that the FAA Chief Counsel 

has characterized airline operations as ‘valuable 

assets’ [n. 62 to United’s Comments]. The Chief 

Counsel, however, stated instead that the High 

Density buy-sell rule had the collateral effect of 

creating a valuable asset. Andrew B. Steinberg & 

James W. Tegtimeier, Dealing With Airport 

Congestion: The Regulatory Challenger of Demand 

Management, 19 Air & Space Law. 1, 16 (Winter 

2005). 

22Connolly v. Pension Benefit Guaranty Corp., 

475 U.S. 211, 224–225 (1986); Concrete Pipe & 

Products v. Construction Laborers Pension Trust, 

508 U.S. 602 (1993). 23Connolly, 475 U.S. at 225. 24Cf. Connolly, 475 U.S. at 226–227. 

Southwest initiated service into 

Philadelphia in May 2004, and since 

that time the fares in Philadelphia have 

shifted from being 19 percent higher to 

2 percent lower than fares in 

comparable domestic markets 

(comparing the Fourth Quarter 2003 to 

the Fourth Quarter 2004). A policy that 

fails to provide any special treatment for 

new entry, the approach recommended 

by United and other larger incumbents, 

would curtail competition that leads to 

substantial fare reductions, increased 

service, and enables more people to 

travel. 

The final rule also differs from our 

proposal in two other respects: First, we 

are not adopting the provision that 

would have required a new entrant or 

limited incumbent carrier to forfeit 

Arrival Authorizations obtained in a 

preferred lottery upon an agreement 

providing for the sale, merger, or 

acquisition by another person of more 

than 50 percent ownership or control of 

that carrier. The final rule provides for 

a 12-month limitation on the sale and 

lease of Arrival Authorizations obtained 

in a preferred lottery and we do not 

believe it is necessary to adopt further 

limitations, as doing so might interfere 

with normal business decisions by a 

carrier. Second, we are clarifying that an 

incumbent carrier who obtains Arrival 

Authorizations on an interim basis may 

use them for at least a year before the 

Authorizations would again be made 

available to new entrant and limited 

incumbent carriers in another lottery. 

This should provide some schedule 

stability without creating a material 

obstacle to potential new entry. 

3. Takings Clause and Due Process 

Claims 

United has claimed that the FAA 

would be violating the carrier’s 

substantive due process rights by 

limiting its operations and giving 

competitors preferential access to 

Arrival Authorizations. United also 

argues that its flight schedules and 

operating rights at O’Hare are intangible 

property that the FAA confiscated 

without due process of law.21 U.S. 

Airways also argued that the proposal 

could violate the takings clause of the 

Constitution, because ‘‘an economically 

unsupported government policy is 

undermining the value of years of 

investment and business planning that 

was premised on the ability to compete 

at ORD on a national and international 

basis.’’

We responded to a similar argument 

from United in the August 2004 Order. 

Our analysis set forth in that Order is 

essentially the same here. The Supreme 

Court instructs us to consider three 

factors in determining whether 

government action constitutes a taking 

requiring compensation: the action’s 

character, its economic impact, and the 

extent to which the action interferes 

with investment-backed expectations.22

These standards do not suggest a 

plausible Takings Clause claim here. 

This rule, not unlike other rules or the 

August 2004 Order, adjusts the benefits 

and burdens of economic life in order to 

promote the common good. This rule 

limits flights at O’Hare in order to 

relieve the congestion that choked a key 

airport and caused delays throughout 

the NAS. This rule will benefit the 

industry and the travelling public. This 

rule codifies the current level of 

operations mandated by the August 

2004 Order and does not require 

additional flight reductions. Since the 

Order has been in effect, O’Hare has 

experienced more than a 20 percent 

delay reduction from the delays 

experienced prior to the issuance of the 

Order. Furthermore, this rule will be in 

effect for a relatively short period so as 

not to unduly interfere with the 

marketplace more so than necessary. 

This type of regulation is not normally 

deemed a taking of property.23 And, 

unlike the governmental action in 

Eastern Enterprises v. Apfel, 524 U.S. 

498 (1998), we are not unfairly singling 

out an air carrier based on its conduct 

far in the past and unrelated to any 

future commitments or injury it caused. 

Rather, the two largest O’Hare air 

carriers significantly increased their 

flights starting in late-2003, causing over 

scheduling and delay conditions. 

The second element of the Court’s 

standard involves the rule’s economic 

impact. There is no evidence that 

restricting O’Hare flights for a limited 

period of time will have an unduly 

harmful impact on any air carrier. To 

the extent there is an economic impact 

by virtue of this rule, it may be 

mitigated and moderated by the reduced 

operating costs resulting from prior 

congestion and the potential 

opportunities for limited growth during 

the life of this rule. 

The third element of the Court’s 

standard concerns whether the rule will 

interfere with a firm’s investment 

expectations.24 That is not the case here. 

We have repeatedly used our authority 

to manage the efficient use of the 

airspace to administer the HDR at 

O’Hare and three other major airports 

and done so over many years. More 

recently, we imposed additional 

restrictions at LaGuardia because of 

increased delays at that airport, and 

from time to time have taken other steps 

to cause airlines to reduce flights in 

order to prevent unacceptable levels of 

delays. Further, even though the Airline 

Deregulation Act of 1978 terminated the 

Government’s regulation of air carriers’

rates, routes, and services, the 

Department and the FAA nonetheless 

have extensive regulatory authority over 

domestic airline operations. The 

Department and the FAA, for example, 

regulate in the areas of certificates, 

compliance, handicapped 

discrimination, records on the 

movement of traffic, carrier 

management, unfair and deceptive 

practices, unfair methods of 

competition, and airline safety. The 

Department and the FAA’s regulation of 

airport development and noise also 

affect an airline’s investment 

expectations. 

As we stated in the August 2004 

Order, no airline owns the airspace at 

O’Hare and no airline has a license to 

operate a specific number of flights at 

the airport. The circumstances at O’Hare 

do not indicate that any carrier holds a 

cognizable ‘‘property interest’’ in 

maintaining its schedules at the airport. 

O’Hare has long been subject to slot 

rules, it has never had unlimited 

capacity, and carriers should have 

known that large increases in service 

could lead to new controls on the use 

of the airport’s capacity. Therefore, 

United and U.S. Airways could not have 

reasonably believed they would be able 

to add or operate all the flights they 

wanted in perpetuity. 

In any event, United’s argument that 

the regulation is tantamount to a taking 

without just compensation is contrary to 

Takings Clause precedent. Continental 

Air Lines v. Dole, 784 F.2d 1245 (5th 

Cir. 1986). The Continental decision 

quoted Justice Holmes’ statement, 

‘‘Government hardly could go on if to 

some extent values incident to property 

could not be diminished without paying 

for every such change in the general 

law.’’ 784 F. 2d at 1252 (quoting 

Pennsylvania Coal Co. v. Mahon, 260 

U.S. 393, 413 (1922)) 

United also claimed that the 

regulation discriminates against 

incumbents in violation of United’s 


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25 FCC v. Beach Communications, Inc., 508 U.S. 

307, 313 (1993). 

26 Lingle v. Chevron U.S.A. Inc., S. Ct. No. 04–

163, slip op. at 12 (2005). 

Equal Protection rights. The test for 

determining whether an economic 

classification is vulnerable to an Equal 

Protection clause challenge is if it 

‘‘proceeds along suspect lines [or] 

infringes fundamental constitutional 

rights’’ and ‘‘if there is any reasonably 

conceivable state of facts that could 

provide a rational basis for the 

classification.’’ 25 An incumbent air 

carrier is not a ‘‘suspect’’ class within 

the meaning of the Constitution’s Equal 

Protection clause. Further, an air carrier 

has no fundamental constitutional right 

to an operation at a particular airport. 

There is a rational basis for the 

preference in this regulation. The 

limited preference will benefit 

consumers because it will promote entry 

and new competition at O’Hare and new 

entry has the potential to lower airfares 

at O’Hare. It is consistent with the 

public policies established by Congress. 

Finally, it does not impose significant 

harm on the incumbent carriers since 

the allocation to them of their November 

2004 operations enables them to 

continue to operate their networks. 

Further, United has not shown that the 

regulation is ‘‘so arbitrary or irrational 

that it runs afoul of the Due Process 

Clause’’ and ‘‘fails to serve any 

legitimate governmental objective.’’ 26

This regulation serves to meet the 

recognized need of addressing persistent 

flight delays related to over scheduling 

at O’Hare, and is intended as an interim 

measure because the FAA anticipates 

that the rule will yield to longer-term 

solutions to traffic congestion at the 

airport. 

Limited Incumbent Carriers 

The NPRM proposed to define a 

limited incumbent carrier as a carrier 

that operates eight or fewer Arrival 

Authorizations at O’Hare and has never 

sold or given up an Arrival 

Authorization. In the proposed rule we 

stated our belief that this approach 

represented a fair approach to carriers 

that are not new entrants but should be 

afforded some additional consideration 

due to their limited presence at the 

airport. We also noted that the proposed 

term is consistent with the August 2004 

Order. 

America West commented that a cap 

of eight Arrival Authorizations for 

limited incumbents would be 

inadequate to generate sustained price 

competition at O’Hare. Furthermore, the 

carrier argued that the proposal does not 

satisfy Congress’ objective to promote 

competition, because Congress (in AIR–

21) capped limited incumbents at 20 

slot exemptions at LaGuardia, which is 

a smaller airport than O’Hare. America 

West then argued that Arrival 

Authorizations should be withdrawn 

from incumbents to fulfill requests from 

new entrants and limited incumbents. 

Conversely, American argued that the 

definition of limited incumbent should 

be consistent with the International Air 

Transport Association (IATA) 

Worldwide Scheduling Guidelines and 

the European Union’s slot regulation 

(EU 793/2004), which define a new 

entrant carrier as a carrier that holds 

fewer than five slots at an airport on the 

day for which they are requested. 

Independence Air and Alaska Airlines 

requested that the definition be 

expanded to include a carrier that 

operates 10 or fewer flights. 

Independence Air pointed out that the 

modest increase of two arrivals would 

bring that carrier into the scope of the 

definition of this category. The carrier 

also argued that this small change 

supports the public interest of fostering 

competition by affording the carrier a 

preference in a lottery to counter the 

vast number of Arrival Authorizations 

held by the two dominant carriers. 

We proposed eight Arrival 

Authorizations as the threshold for 

determining limited incumbent status, 

as that was the number set forth in the 

August 2004 Order. There is no bright 

line test for limited incumbency and the 

initial selection of eight Arrival 

Authorizations was consistent with the 

pro-competition goals of AIR–21. We do 

not view it necessary to create a more 

generous exception for such carriers, 

nor are we persuaded by the arguments 

of the carriers to increase this number 

to 10. Had we proposed 10 Arrival 

Authorizations in the notice, it is likely 

that carriers (other than Independence 

Air) would have sought a higher 

number. We note that although AIR–21 

changed the definition of a ‘‘new 

entrant/limited incumbent’’ carrier to a 

carrier that holds 20 slots and slot 

exemptions; it was very different in its 

provisions for slot exemptions for new 

entrants at O’Hare. At O’Hare, AIR–21 

slot exemptions for new entrants were 

limited to 30 in total, in contrast to the 

statutory provisions for LaGuardia and 

JFK, which capped new entrants at 20 

slot exemptions each. Consequently, we 

reiterate the rationale behind our test for 

limited incumbency as proposed in the 

NPRM and in the August 2004 Order 

and, with minor edits for clarity, we 

adopt the definition of limited 

incumbent as proposed. 

Alaska Airlines supported the 

proposal, as stated in the NPRM, to 

allocate flights initially to the carrier 

actually operating the flight, except 

where the operating carrier does not 

market its service independently and in 

its own name. Alaska stated that it has 

full control over the flights it operates 

at O’Hare and it should not be penalized 

because some flights also carry the 

American code. 

Alaska’s comment is consistent with 

how we proposed to treat code share 

arrangements in the NPRM. We 

proposed that, with limited exception, 

Arrival Authorizations would be 

allocated solely to the carrier that 

actually operated the flight, regardless 

of any code sharing agreements. We 

further proposed that in making our 

initial Arrival Authorization 

determinations, we do not intend to 

assign Arrival Authorizations to a 

carrier that is essentially operating its 

service as a contractor for another 

carrier and does not market its service 

independently and in its own name. We 

have been presented with no 

information that would suggest this 

distinction is invalid. Therefore, this 

rule adopts our proposal that where the 

operating carrier conducts the flight 

solely under the control of another 

carrier, the carrier controlling the 

inventory of the flight will receive the 

Arrival Authorization. 

We also find it necessary to adopt 

some minor edits to the definition for 

clarity. In defining this term, we resort 

to using the phrase ‘‘U.S. or Canadian 

air carrier that holds or operates, on its 

own behalf, 8 or fewer Arrival 

Authorizations * * *’’ As this rule also 

permits leasing, it is critical to 

characterize a carrier’s rights respective 

to the operating authority accurately. In 

addition, the rule clarifies that for an 

Arrival Authorization held or operated 

by a U.S. or Canadian carrier to count 

towards limited incumbent status, the 

relevant carrier must hold or operate 

that authorization on its own behalf. 

This will not penalize a carrier that 

conducts service at O’Hare primarily as 

a contractor for another carrier and does 

not market its service independently 

and in its own name from the ability to 

obtain authorizations in its own name in 

a lottery. 

Blind Buy/Sell Market 

Under the proposed rule, we provided 

that the purchase and sale of Arrival 

Authorizations would be allowed to 

promote maximum reliance on market 

forces and efficient utilization of the 

Arrival Authorizations. To ensure that 

all carriers have a chance to obtain these 

valuable privileges, sales of Arrival 

Authorizations would be permitted only 

through a ‘‘blind market’’ overseen by 


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the FAA in which the only 

consideration for transactions would be 

monetary. Thus, under the proposal, the 

identity of the bidder would be 

confidential and the transaction could 

not involve real property, such as gates, 

non-monetary assets, or other services 

in lieu of cash. In the NPRM, we did not 

propose specific regulatory text to 

permit the leasing of Arrival 

Authorizations but put out the concept 

for comment. 

The majority of commenters did not 

object to use of a blind secondary 

market as proposed for the buying and 

selling of Arrival Authorizations. A 

majority of commenters did, however, 

object to the prohibition on using nonmonetary assets as payment and the 

proposed limits on the use of Arrival 

Authorizations as collateral for loans. 

DOJ urged the Department to move 

aggressively to adopt either congestion 

pricing or an auction to allocate scarce 

airport/airspace capacity at O’Hare, 

cautioning that anything short would 

lead to an inefficient allocation. DOJ 

also stated that while the ‘‘blind’’ aspect 

of the secondary market may remedy 

problems associated with the bidding 

process, this proposal does nothing to 

encourage the two largest carriers to sell 

Arrival Authorizations. According to 

DOJ, other carriers that also have a 

presence at O’Hare, generally use that 

access to connect their hubs with 

Chicago and therefore, place high value 

on those Arrival Authorizations and 

thus are unlikely to sell. Consequently, 

DOJ does not see that this rule would 

result in many sales. 

American supported the concept of a 

market for Arrival Authorizations but 

opposed the proposal to regulate and 

govern the operation of that market, 

arguing for an independent, free, and 

competitive market similar to the HDR. 

U.S. Airways, United and Delta argued 

that under the HDR, carriers selling slots 

in the secondary market of necessity 

evaluated the total compensation 

package being offered before choosing 

the successful bid. Moreover, U.S. 

Airways believed that given the 

industry’s liquidity problems and the 

operational needs of carriers at various 

airports, an airline selling or buying an 

Arrival Authorization ought to be able 

to accept or offer non-monetary 

consideration (i.e. services, ground 

handling) as part of the bid. 

United suggested a revised approach 

to conducting the secondary market and 

alternatively proposed that the FAA 

serve as the clearinghouse through 

which sales of Arrival Authorizations 

are completed. In this alternative, a 

carrier wishing to sell (or to buy) an 

Arrival Authorization would notify the 

FAA of the relevant details and the FAA 

would post such notice to potentially 

interested air carriers. United suggested 

a similar process for carriers seeking to 

obtain Arrival Authorizations. United 

also commented that restricting the sale 

to an all-cash-basis unnecessarily limits 

the flexibility of buyers and sellers and 

could effectively freeze some buyers out 

of the bidding entirely. Under United’s 

proposal, sellers would be presented 

with all bids that are received by FAA, 

but the identity of the bidders would 

not be disclosed. Once the seller 

selected the offer it deems most 

attractive, the identity of the bidder 

would be disclosed to the seller and the 

transaction could be completed. United 

similarly urged the FAA to permit 

leasing/subleasing because it would 

allow carriers to adjust their schedules 

based on seasonal and market 

fluctuations. Lastly, United submitted 

that the secondary market will not be 

robust as long as new entrants, limited 

incumbents, and foreign carriers get 

Arrival Authorizations free of charge 

from the government. 

RAA commented that the current 

system of buying, selling, leasing, and 

sub-leasing slots at HDR airports has 

worked effectively and does not warrant 

any change for the limited duration of 

this proposed rule. At the very least, 

RAA suggested that if sales are to be 

blind, there is no reason to preclude 

non-cash considerations for Arrival 

Authorizations. 

Independence Air contended that 

buyers will ‘‘undoubtedly wish to 

negotiate terms, including but not 

limited to, the terms of any warranties, 

the definition of what constitutes a 

default under the purchase agreement, 

limitations of liability, customary 

representations as to corporate 

authorization, approval and agreement 

enforceability, and damages for any 

breach of the agreement and other 

commercially and legally important 

matters prudently included in any 

significant purchase and sale 

agreement.’’ Independence Air 

suggested that the FAA is not in a 

position to broker the details of a 

commercial arrangement and should not 

adopt a rule that cannot be readily 

enforced and that can so easily be 

manipulated by carriers. Independence 

Air also did not support the proposed 

cash only basis for transactions. 

The ACAA supported the blind 

market system and stated that this 

market mechanism is reasonable and 

available to all carriers. ACAA further 

argued that American and United 

should be blocked from acquiring 

additional Arrival Authorizations if any 

other carrier submits a bid in any sale 

so that these two carriers cannot bid 

higher to block entry of low-fare 

carriers. 

The City supported the buying and 

selling of Arrival Authorizations, but 

requested that as airport operator it be 

given a consultative role with the 

airlines in the process of a significant 

sale or lease of Arrival Authorizations 

(or at least advance notice of such a sale 

or lease), with a portion of the funds 

reserved for the airport. 

America West also supported the 

proposed secondary market but 

commented that the FAA, not the 

selling carrier, should keep the proceeds 

of sales on the blind secondary market. 

America West explained that proceeds 

from the sale of Arrival Authorizations 

could be directed to enhancing capacity 

at O’Hare. Alternatively, if proceeds 

from the sale went to the selling 

carrier(s), America West said there 

would be a perverse incentive for 

airlines to resist expansion of airports 

because such expansion would 

eliminate the ‘‘paper value’’ of their 

Arrival Authorizations. 

A constant criticism of the HDR buy/ 

sell provision was that it did not ensure 

a ‘‘fair’’ distribution of slots across the 

industry because the largest slot-holders 

(typically, legacy carriers) could 

consider the identity of would-be buyers 

or lessees and choose not to provide 

them with slots—so as to deprive 

potential new entrants of airport access. 

Smaller carriers informed us that they 

were not even made aware when slots 

were available for sale or lease. The 

blind aspect of the buy/sell provision 

established by this rule should 

ameliorate this problem, at least to some 

degree, by making it more difficult for 

slot holders to consider the would-be 

buyer/lessee’s likely use of Arrival 

Authorizations. 

We acknowledge that our proposal to 

restrict the use of non-monetary 

considerations in transactions involving 

Arrival Authorizations (i.e., the ‘‘cashonly’’ aspect of our rule) was unpopular 

among the commenters. Most of the 

comments suggested that each air carrier 

should be allowed to consider the value 

of specific gates, baggage handling, 

marketing arrangements, and other 

potential offers in lieu of cash. (Under 

our proposal carriers may, of course, 

continue to pursue business 

opportunities in the ordinary course so 

as to exchange services or facilities at 

O’Hare or other airports, but they cannot 

use Arrival Authorizations as part of 

any such discussions.) Although there is 

merit to this position, nevertheless we 

continue to be concerned that the 

uniqueness of non-monetary assets, 

proposed as consideration in potential 


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Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 51393 

27Consolidated Appropriations Act, 2005, Pub. L. 

108–447, Federal Aviation Administration, 

Operations, Title I, Division H, 118 Stat. 2809, 3201 

(2204) 

transactions, would effectively 

undermine the ‘‘blind’’ nature of the 

secondary market. The inclusion of such 

non-monetary assets would make it 

virtually impossible to hide identities 

during the bid evaluation process unless 

the FAA chose to ascribe a monetary 

value to non-monetary assets, a difficult 

and protracted exercise that would not 

be useful given the short duration of this 

rule. Therefore, the ‘‘cash-only’’ aspect 

of our proposal is unchanged in the 

final rule. 

We reject United’s suggested 

approach for similar reasons. Under 

United’s approach, all bids would be 

forwarded to the selling carrier for 

review and selection. Once the selling 

carrier selected a bid, the identity of the 

selected bid would be released and the 

affected carriers would be free to 

consummate the transaction. United’s 

approach only makes sense if nonmonetary assets are permitted in the 

bidding package. If, however, the bids 

are strictly limited to money, nothing is 

gained by receiving all the bids because 

the only relevant bid is the highest one. 

United also suggested that the FAA 

establish a corresponding process that 

would allow a carrier seeking to 

purchase or lease an Arrival 

Authorization to advise the FAA with 

that information to be made public in a 

similar (blind) manner. We accept this 

suggestion and provide for such 

notification in this rule. As in the case 

for sales or leases, we will not disclose 

the identity of the carrier but will 

include information such as time and 

frequency desired, effective date, 

reserve price, or other pertinent 

information. This information will be 

posted within two business days and for 

a period of at least 10 days. All offers 

of Arrival Authorizations for sale or 

lease will be processed in accordance 

with the adopted rules. 

America West recommended that the 

FAA retain all proceeds from the sale of 

Arrival Authorizations for use in 

capacity expansion projects at the 

airport. While this proposal has appeal, 

the FAA is currently prohibited by 

statute from promulgating rules that 

result in the agency collecting userfees 27 and accepting revenue for the 

sale of Arrival Authorizations. 

With respect to the City’s requests, the 

required public posting of the available 

Arrival Authorizations will provide all 

interested parties, including the City, 

with notice of transactions. The City 

may exercise its proprietary powers as 

airport operator with respect to 

managing the efficient utilization of 

gates and related facilities, including 

directing sharing of unused gate space, 

overseeing subleasing requests, and 

otherwise negotiating gate assignments 

or conversions to common-use, where 

practicable. Requiring advance airlineairport consultations otherwise would 

interfere with the efficient assignment 

mechanism we anticipate to occur in the 

blind market. Given our limited options, 

a lottery system provides the fairest and 

most unbiased process for allocating 

new capacity while the blind buy-sell 

market provides potential opportunities 

for carriers that value the Arrival 

Authorizations the most. 

Leasing of Arrival Authorizations 

The comments supported allowing 

leasing of Arrival Authorizations and 

cited positive experiences with leasing 

arrangements under the HDR. Delta 

argued that if leasing is prohibited, 

incumbent carriers facing temporary 

market conditions or seasonal 

fluctuations in demand for their service 

at the airport would be forced to operate 

sub-optimal service patterns to preserve 

their airport access rights until 

conditions improved. Furthermore, 

Delta commented that the opportunity 

to lease Arrival Authorizations gives 

carriers the flexibility to test marginal 

new markets without committing the 

potentially significant capital 

investment that a purchase-only rule 

would impose. 

RAA commented that leasing and subleasing should be permitted as they play 

a crucial role in allowing carriers to 

adopt seasonal changes in demand. 

Independence Air echoed other 

carriers and urged the agency to permit 

leasing as it is a logical and necessary 

means to make an efficient market and 

urged the FAA to allow leasing in the 

final rule. However, Independence Air 

did not believe the FAA can effectively 

match lessors and lessees simply on the 

basis of which lessee is willing to pay 

the most for the Arrival Authorization. 

As with buying/selling Arrival 

Authorizations, Independence Air 

contended that there are many 

commercial and legal considerations 

that impact a lessor’s motivation to 

enter into an Arrival Authorization lease 

agreement. 

As discussed in the NPRM, leasing of 

arrival privileges would allow the 

carriers to accommodate seasonality and 

market fluctuations inherent in airline 

operations. Leasing permits access to 

the airport that some carriers may not 

otherwise have. Leasing also can result 

in higher efficiencies and lower costs to 

the carriers holding the Arrival 

Authorizations. Allowing leases and 

sub-leases of Arrival Authorizations also 

makes sense given the minimum usage 

requirement. 

As specified in the adopted 

regulations, leasing will be permitted 

subject to the same conditions as the 

buying or selling of Arrival 

Authorizations. A carrier seeking to 

lease Arrival Authorizations must notify 

the FAA, and the agency will post the 

solicitation (including relevant 

information) and accept all timely-filed 

bids. Only the highest bid will be 

forwarded to the potential seller or 

lessor, and the only permitted 

consideration is monetary. If the 

relevant carriers agree to negotiate or 

contract other details of the transaction 

that do not violate or infringe upon the 

applicable regulations, they may do so 

without FAA involvement. 

In addition, we adopt several 

modifications in this section. 

First, carriers that have Arrival 

Authorizations available for sale or lease 

may submit a base reserve price for 

Arrival Authorizations to the FAA for 

posting on the Web site along with other 

relevant information. Including a base 

reserve price provides a floor for the 

bids and facilitates the process. 

Second, we have deleted the 

requirement that a carrier must notify 

the FAA 30 days before the planned sale 

date. Upon review, we concluded that 

the 30 day requirement could be unduly 

restrictive, particularly for carriers that 

may want to lease an Arrival 

Authorization and, for scheduling 

reasons, may not be in a position to 

provide 30 days notice. 

Third, as a usage requirement is also 

adopted in this rule, carriers may need 

to shorten the duration of the bidding/ 

selection process. Therefore, we have 

included two modifications: (1) The 

FAA will post notice of available 

Arrival Authorizations within two 

business days; and (2) the bidding 

period will be open for 10 business 

days. The NPRM did not specify the 

timeframe for bids to be submitted. We 

chose 10 business days, which should 

allow carriers sufficient time to 

assimilate data and make decisions. The 

10 business-day period is not excessive 

and is intended to expedite the 

transaction process. 

Fourth and as discussed earlier, 

carriers may advise the FAA of their 

interest in obtaining Arrival 

Authorizations in the market and 

request that the agency post the 

information that a carrier is seeking 

Arrival Authorizations. 

The FAA will post listings of Arrival 

Authorizations for sale or lease through 

the blind market at http:// 


jlentini on PROD1PC65 with RULES2
51394 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 

www.Demand-ManagementAirports.faa.gov. Users may register 

with the Web site to receive immediate 

notification of information posted on 

this site. 

Pledging of Arrival Authorizations 

United, Delta, U.S. Airways, and JP 

Morgan Chase & Co. (JP Morgan) all 

commented unfavourably on the 

proposal’s prohibition on the pledging 

of Authorizations as collateral. They 

argued that preventing the 

collateralization of these ‘‘assets’’ will 

not reduce barriers to entry but rather 

contribute to the barriers. They 

contended that carriers may need access 

to this financing option in order to 

purchase Authorizations under the rule 

and that this prohibition eliminates this 

option for affected carriers. 

We have withdrawn the prohibition 

on pledging Arrival Authorizations as 

collateral in this rule. We do not seek 

to eliminate options available to carriers 

to secure needed financing. Arrival 

Authorizations are an operating 

privilege and we recognize that the 

buying, selling and leasing of these 

privileges may be advantageous to 

facilitate the carriers’ efficient use of 

these privileges. 

As proposed, the final rule permits 

Arrival Authorizations to be assigned 

only to eligible air carriers and not other 

entities. Since collateralization 

arrangements are strictly a matter of 

contract between the affected carriers 

and other parties, we will not record 

changes to the holder/operator status to 

reflect any pledging of these Arrival 

Authorizations. Carriers are free to 

structure the pledging of these 

Authorizations, subject to other 

requirements of this rule. 

International Arrivals 

In the NPRM, we proposed the 

following two options for assigning 

Arrival Authorizations to foreign air 

carriers: 

Administrative Option—The FAA 

would accommodate requests by foreign 

air carriers for new or additional access 

administratively. If an Arrival 

Authorization was not available within 

the time period requested by a foreign 

carrier, an Arrival Authorization would 

be withdrawn from a domestic carrier to 

accommodate that request. 

Elective Option—Foreign air carriers 

seeking additional Arrival 

Authorizations above the initial 

assignment of Arrival Authorizations 

could elect: (1) To obtain Arrival 

Authorizations as described above 

under the Administrative Option; or (2) 

or obtain Arrival Authorizations in the 

same manner prescribed to U.S. and 

Canadian air carriers, which is through 

the blind market and the lottery 

mechanisms. 

Operations by Canadian air carriers 

were excluded from these proposed 

options because Annex II of the 1995 

bilateral aviation agreement between the 

U.S. and Canadian governments 

provides that Canadian air carriers be 

treated in the same manner as U.S. air 

carriers under airport access rules for 

domestic operations at O’Hare. 

Therefore, arrivals at O’Hare from 

Canada by U.S. and Canadian air 

carriers are assigned under the same 

procedures that apply to domestic and 

transborder flights. 

The proposal treated foreign air 

carriers differently than U.S. and 

Canadian air carriers for several reasons. 

First, air service agreements between 

U.S. and foreign governments obligate 

both parties to ensure fair and equal 

opportunity to compete in a market. 

Second, foreign air carrier operations 

have remained relatively constant over 

the last several years while at the same 

time, domestic operations have 

increased significantly. Third, U.S. air 

carriers have the ability to make 

international service decisions based on 

their allocated base of total Arrival 

Authorizations if additional Arrival 

Authorizations were not available for 

assignment by the FAA. This is not an 

option for foreign air carriers that have 

a limited presence at O’Hare. For most 

international operations, Chicago’s 

Midway Airport is not a practical 

alternative airport for serving Chicago 

since Midway’s runways could not 

accommodate the wide body aircraft 

serving many of the international points 

from O’Hare. 

Other elements of the NPRM 

applicable to Arrival Authorizations 

assigned to foreign air carriers, 

irrespective of the option, were: (1) 

Initial Arrival Authorizations would be 

assigned to foreign air carriers based on 

historical seasonal schedules; (2) Arrival 

Authorizations could not be bought, 

sold, or leased; (3) Arrival 

Authorizations would not be subject to 

a minimum usage requirement. 

However, if they are not used for more 

than a 15-day period, under the 

proposal they must be returned to the 

FAA. 

The Department faced this issue 

previously under the HDR. At O’Hare, 

foreign and domestic carriers were 

initially treated equally in that slots 

were withdrawn to accommodate 

international requests from both foreign 

and domestic carriers if not otherwise 

available. We subsequently amended 

the HDR to limit withdrawals for 

international operations for the benefit 

of carriers with 100 or more slots at 

O’Hare. Congress later capped the total 

number of domestic slots that could be 

withdrawn and reallocated for 

international service. Concurrently, 

Congress also authorized the Secretary 

of Transportation to grant exemptions 

from the HDR for foreign air carriers 

serving O’Hare. The Secretary exercised 

this authority as needed and until May 

2000, when the slot requirements for 

international flights were eliminated at 

O’Hare. 

Several commenters supported 

preferences or exemptions from the 

established cap for international arrivals 

without distinguishing between 

operations conducted by U.S. carriers 

and foreign air carriers. 

KLM Royal Dutch Airlines, as one of 

two foreign carriers to comment, did not 

favor any particular allocation option 

for foreign carriers. KLM did, however, 

support the August 2004 Order and 

suggested that the FAA follow IATA 

Worldwide Scheduling Guidelines, 

which most countries follow in 

allocating slots at constrained airports 

throughout the world. IATA expressed 

concern that the proposals could 

discriminate between U.S. and foreign 

air carriers. 

The other foreign air carrier to 

comment was Air France, who strongly 

supported an administrative assignment 

for new Arrival Authorizations and 

acknowledged that this could be 

accomplished under either Option 1 or 

2. Air France currently operates one 

daily passenger flight between O’Hare 

and Paris, but has offered two such 

flights in the past. Air France stated that 

initiating international service requires 

significant investment and that foreign 

carriers may hesitate to make such an 

investment if they are unsure they can 

obtain an Arrival Authorization at 

O’Hare under the market or lottery 

systems. Air France argued that it is 

necessary to guarantee foreign carriers 

access to an Arrival Authorization at 

O’Hare should they decide to expand 

service there. Air France did not oppose 

the proposed prohibition on buying/ 

selling, or leasing assigned Arrival 

Authorizations; nor did it oppose the 

return of Arrival Authorizations to the 

FAA if not used for more than 15 

consecutive days. 

American and United agreed that the 

allocation provisions should not 

discriminate against foreign carriers, but 

argued that the proposed administrative 

option unduly rewards foreign carriers 

at the expense of U.S. carriers. 

Furthermore, they complained that they 

would be restricted from adding new 

international services unless they 

reduced domestic flights. They 


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28Access to serve the Chicago area must generally 

be through O’Hare due to runway or facility 

constraints at other Chicago area airports. 

29Canadian carriers’ scheduled arrivals were 

limited by the Order but do not include arrivals 

from points outside Canada. Therefore, no 

adjustments are needed under this provision. 

submitted that foreign air carriers 

providing similar international services 

would continue to receive preferred 

treatment, which places U.S. carriers at 

a competitive disadvantage. 

United also pointed out that Congress 

had previously prohibited the Secretary 

of Transportation from withdrawing 

slots from domestic carriers to 

accommodate international operations 

while O’Hare was limited under the 

HDR. (See 49 U.S.C. 41714(b)(2)). 

United disputed our reliance on 

international air services agreements as 

a rationale for the proposed 

Administrative Option, observing that 

other countries do not interpret the 

bilateral agreements as requiring them 

to make slots available for U.S. air 

carriers. United commented that this 

proposal is not in the national interest 

because it weakens an already 

unfavorable trade balance by shifting 

carriage of international passengers (and 

their revenue) from U.S. carriers to 

foreign corporations. United prefers 

exempting all international arrivals, 

which would not arguably violate any 

international air service agreement. 

Lastly, United noted that U.S. carriers 

have been denied access to foreign 

airports when capacity is limited. 

The City also argued for exempting all 

international flights because 

international operations are a small 

portion of the total flights at O’Hare and 

that the gate, immigration and terminal 

facilities at Terminal 5 would provide a 

natural limit to these flights. 

We have reviewed the number of 

international arrivals conducted by 

foreign air carriers and domestic carriers 

during the peak hours. Together, these 

arrivals account for six percent of total 

arrivals at O’Hare. This six percent is 

almost equally divided between foreign 

air carrier arrivals and U.S. air carriers. 

We note that while some foreign air 

carriers have periodically dropped 

service, other foreign air carriers have 

added service, such that the overall 

level has remained constant for several 

scheduling seasons. International 

operations by U.S. air carriers have also 

been relatively constant over the past 

several years. 

We do not agree with United’s 

assertion that our reliance on 

international air service agreements was 

erroneous and misguided. We are bound 

by our agreements with foreign 

governments to ensure that the flag 

carriers of each party have a fair and 

equal opportunity to compete in the 

market.28 In particular, as the 

Department seeks to expand Open Skies 

agreements, we do not want to adopt 

limits that might preclude either 

domestic or foreign air carriers from 

taking advantage of new opportunities. 

At the same time, we are mindful that 

U.S. carriers are also constrained by 

facilities or slot constraints at some 

foreign airports and do not always get to 

operate their preferred schedules. We 

prefer to address those issues on a caseby-case basis rather than set up a 

regulatory framework that makes U.S.- 

constrained airports more difficult to 

access. 

In view of the comments, we are 

adopting a revised approach that treats 

all international arrivals the same, 

regardless of whether operated by a 

foreign or domestic air carrier, a 

position which is also consistent with 

international air service agreements. An 

Arrival Authorization will be required 

for any international arrival at O’Hare 

and will be assigned at the requested 

time or in the adjacent hour if one is not 

otherwise available. Under the rule we 

may also assign a time for new or 

rescheduled international arrivals 

within an hour of the requested time if 

needed to address operational 

efficiencies and facilitate schedule depeaking. 

As this approach does not involve any 

withdrawal of Arrival Authorizations 

from domestic carriers to accommodate 

new international arrivals, it may result 

in operations exceeding the adopted 

hourly limits. In adopting this approach, 

we weighed the public interest in 

maintaining our international 

obligations under various air service 

agreements with our congestion and 

delay reduction goals of this rule. Given 

the relative stability in the number of 

international arrivals since 2002 and the 

limited duration of this rule, we do not 

expect a dramatic increase in requests 

for Arrival Authorizations. As this rule 

is an interim measure, it is expected that 

new airport capacity will address this 

issue for the longer-term. We 

acknowledge that this approach may 

have some impact on the congestion and 

delay reduction goals of this rule. 

However, we believe that the public 

interest supports the offset of our delay 

reduction goals to accommodate our 

international obligations. We will 

consider the effect of any additional 

international arrivals as we conduct the 

semi-annual operational performance 

and capacity review. 

As a result of this new approach in 

addressing international arrivals, we 

must modify how we proposed to 

initially assign Arrival Authorizations 

for domestic use and for international 

use initially under this rule. In 

calculating the proposed cap of 88 

arrivals per hour, we included all 

international operations scheduled for 

August 2004 during the O’Hare 

schedule reduction meeting. Foreign air 

carriers, except Canadian air carriers, 

were not affected by the FAA’s Order, 

and subsequently have added new 

flights and adjusted schedule times that 

will be reflected in the initial 

assignment under this rule. 

International operations by U.S. carriers 

were included in the August 2004 Order 

as part of the overall carrier limits, and 

each carrier could choose the 

international market, domestic market, 

or transborder Canadian market to serve 

within those limits.29 Consequently, we 

will review each U.S. air carrier’s 

operations under the August 2004 Order 

and assign Arrival Authorizations as 

either domestic or international, as 

appropriate. New international arrivals 

by U.S. carriers after the effective date 

of this rule will be eligible for 

assignment above the operational limits. 

The combined total of each U.S. air 

carriers’ (initially assigned) Arrival 

Authorizations (domestic and 

international) will not exceed the total 

authorized for that carrier under the 

Order. We will make a similar 

determination to assign Arrival 

Authorizations for foreign air carrier 

operations using published schedules or 

other information available to the FAA 

for the base for the Summer 2006 and 

Winter 2006 scheduling seasons. 

Beginning with the Summer 2007 

scheduling season, and for every season 

thereafter, we will publish a notice in 

the Federal Register announcing the 

submission deadline for priority 

consideration for the assignment of 

historic and new international arrivals. 

This is similar to the IATA process 

followed by most slot-constrained 

airports outside the U.S. In assigning 

Arrival Authorizations for international 

arrivals, we expect to follow the 

procedures and processes of the IATA 

Guidelines to the extent those 

Guidelines do not conflict with this 

rule. All carriers must request Arrival 

Authorizations, in accordance with the 

scheduling season and information 

published by the FAA in the Federal 

Register. 

As proposed, we adopt the provision 

that the Secretary of Transportation may 

withhold the assignment of an Arrival 

Authorization to any foreign air carrier 

of a country that does not provide 


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equivalent rights of access to its airports 

for U.S. air carriers. 

As proposed, Arrival Authorizations 

assigned for international use may not 

be bought, sold, leased or otherwise 

transferred. Carriers may, however, 

trade these Arrival Authorizations 

assigned for international use on a onefor-one basis. We clarify that domestic 

Arrival Authorizations may be traded 

within the carrier’s base subject to FAA 

approval. Arrival Authorizations 

assigned for international arrivals must 

be returned if not used for a 15-day 

period. 

Lastly, we revise the definition of the 

scheduling seasons to recognize the 

change in U.S. daylight saving time start 

and end dates beginning in March 2007 

(Energy Policy Act of 2005, Pub. L. 109–

58). 

Minimum Usage Requirements 

In the NPRM, we sought comment on 

whether a minimum usage requirement 

would be necessary, and if so, whether 

an 80 percent or 90 percent usage 

requirement over a bimonthly reporting 

period would be appropriate. As an 

alternative to the above usage 

requirement, we proposed a periodic 

withdrawal of the least used Arrival 

Authorizations for redistribution. 

The majority of commenters objected 

to having no usage requirement. The 

City argued that the landing rights 

represent scarce and valuable assets 

under this rule and that it is not prudent 

to omit a usage requirement. Delta 

commented that this option presented 

the risk that carriers that have more 

Arrival Authorizations than they can 

profitably use will simply hoard them 

and waste valuable capacity. 

DOJ agreed that a usage requirement 

could prevent Arrival Authorizations 

from going totally unused, but argued 

that a usage requirement was unlikely to 

prevent the hoarding of Arrival 

Authorizations to deprive competitors 

of these assets. DOJ also maintained that 

a usage requirement does nothing to 

increase the liquidity in the market and 

allow entry by more efficient carriers. 

Most commenters responded that a 

usage requirement in the 80–90 percent 

range is appropriate. U.S. Airways, 

American, Delta and Independence Air 

supported the 80 percent requirement. 

The City, RAA and America West 

supported a 90 percent standard. United 

supported a usage requirement of 85 

percent. 

American contended that the rule 

should conform to international 

minimum usage standards and 

seasonality. American supported an 80 

percent usage standard, which is used 

by IATA and the European Union (EU) 

slot regulations on a seasonal basis. 

American also argued that since the 

FAA conceded in the NPRM that most 

slots (under the HDR) were operated 90 

percent of the time, it is nonsensical to 

use a new standard over one that is 

already universally known and 

accepted. In addition, the usage period 

should be consistent with the IATA 

designated summer (seven months) and 

winter (five months) scheduling 

seasons. American stated that domestic 

service patterns now follow the 

seasonality patterns for international 

operations and that failure to recognize 

this is not efficient or equitable. 

Consequently, under American’s 

suggestion, it would be logical to lose an 

Arrival Authorization for a season, if a 

carrier is not using it for that period, 

rather than force the carrier to 

inefficiently schedule a flight just to 

avoid losing the Arrival Authorization. 

While American’s suggestion to adopt 

a usage period similar to the IATA biannual scheduling season may be of 

some benefit, no other carrier has 

indicated that a two-month reporting 

period was unworkable. We also believe 

that the adoption of leasing provisions 

will assist carriers that experience some 

seasonal fluctuations in that they may 

choose to lease the Arrival 

Authorizations for the relevant period. 

We conclude that a minimum usage 

requirement is necessary, as these 

Arrival Authorizations will represent a 

scarce resource and our desire is to 

ensure the efficient utilization of these 

privileges for the duration of this rule. 

Our experience at O’Hare under the 

August 2004 Order is that some carriers 

did not utilize their authorities and this 

resulted in unused capacity. Moreover, 

adoption of a minimum usage standard 

complements the ability to lease Arrival 

Authorizations, which is adopted in this 

rule and previously discussed. 

There is not a marked difference in 

projected slot utilization at a 90 percent 

versus an 80 percent usage requirement 

over a two-month reporting period. We 

reviewed scenarios of an Arrival 

Authorization held Monday through 

Friday over a two-month reporting cycle 

and found that the difference in usage 

from 80 to 90 percent resulted in 

approximately 3–4 additional 

operations over the reporting period. 

Carriers, both domestic and foreign, 

have a lot of experience with an 80 

percent usage requirement, as provided 

under the HDR and internationally. As 

American argued, most carriers exceed 

the 80 percent usage standard under the 

HDR, and we do not see that increasing 

the standard will result in a more 

efficient utilization record that warrants 

deviation from the present industry 

standard. Consequently, this rule adopts 

an 80 percent minimum usage 

requirement over a two-month reporting 

period. 

There was no support in the 

comments for the alternative of 

periodically withdrawing the least 

utilized Arrival Authorizations. 

Comments viewed this option as 

disruptive to their businesses. Also, the 

City pointed out that even with the one 

percent withdrawal, there may still be 

‘‘inefficiently’’ utilized Arrival 

Authorizations that are not withdrawn 

because they are not in the bottom one 

percent. 

In the NPRM, we proposed that those 

Arrival Authorizations assigned to new 

entrants and limited incumbents via 

lottery would not be subject to the usage 

requirement for the first 90 days after 

assignment. For Arrival Authorizations 

assigned to incumbent carriers via 

lottery, the usage requirement would be 

waived only for the first 60 days. United 

argued all carriers experience the same 

issues in starting new service, including 

the publishing, promotion and selling of 

that service and that incumbents should 

not be afforded less time to deal with 

similar issues. Furthermore, United 

argued that this waiver period should 

apply to Arrival Authorizations 

obtained via purchase, not just via 

lottery. 

We agree with United that different 

waiver periods are not warranted and 

that the 90-day waiver period should 

apply to Arrival Authorizations received 

by lottery and by purchase. We have 

determined not to extend this waiver to 

Arrival Authorizations involved in a 

lease because carriers involved in the 

lease transaction can determine the 

transaction effective date to include this 

issue. 

Arrival Authorizations assigned for 

international use are not subject to the 

usage requirement. Arrival 

Authorizations assigned for 

international use are allocated 

seasonally and must be returned to the 

FAA if not used for more than a twoweek period. We think that this 

approach adequately addresses usage for 

these operations. 

In addition, we proposed two 

methods for reassigning Arrival 

Authorizations that do not meet a usage 

minimum, if adopted. Under the first 

method, the agency would conduct a 

lottery consisting 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 the airport. 


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Under the second method, carriers 

losing Arrival Authorizations for failing 

to meet the usage requirement would be 

required to sell them using the blind 

market process. New entrants and 

limited incumbents would have 

preference in purchasing the subject 

Arrival Authorizations and the proceeds 

of a sale would go to the air carrier that 

lost the Arrival Authorizations. Any 

unsold Arrival Authorizations would be 

returned to the carrier that lost them. 

Both Delta and United preferred the 

option that would permit carriers to be 

compensated for the loss of the Arrival 

Authorization, particularly if the Arrival 

Authorization was purchased on the 

market, rather than have the Arrival 

Authorizations withdrawn by the FAA. 

Furthermore, Delta contended that the 

mandatory sale will ensure that the 

Arrival Authorizations go to the highest 

bidder—a lottery makes no such 

assurance. 

We have reviewed this proposal in 

light of the other amendments adopted 

in this rule and conclude that neither 

option is necessary. Since this rule 

adopts a provision that permits leasing, 

carriers have an option that will result 

in compensation, and that can address 

market fluctuations, seasonality, and 

simple usage issues. Carriers are far 

more likely to lease Arrival 

Authorizations, rather than entertain a 

forced sale and loss of the them. 

Therefore, this rule provides that 

Arrival Authorizations not meeting the 

usage requirement will be withdrawn by 

the FAA for reassignment. 

America West also commented that 

carriers may circumvent a usage 

requirement by using Arrival 

Authorizations originally allocated for 

large aircraft operations with small 

aircraft. Consequently, America West 

requested that the rule provide that an 

Arrival Authorization will be 

withdrawn if its use is converted from 

large aircraft to small aircraft. 

ACAA supported a 90 percent usage 

requirement for air carriers with more 

than 50 Arrival Authorizations because 

large carriers have too many options to 

protect Arrival Authorizations if the 

usage requirement is lower. 

We do not support America West’s 

suggestion that Arrival Authorizations 

for larger aircraft should receive 

different treatment under our usage 

requirements. This rule does not divide 

Arrival Authorizations into separate 

categories based on aircraft size. 

Furthermore, the initial assignment and 

subsequent reassignment of Arrival 

Authorizations does not contemplate 

aircraft size for the particular operation. 

Unlike the HDR, carriers have complete 

discretion under this rule to operate the 

aircraft they see fit for the service using 

the Arrival Authorizations. Regulating 

the aircraft size to use these Arrival 

Authorizations is unnecessary at this 

airport to meet the stated objectives of 

this rulemaking. 

Likewise, we have not adopted 

ACAA’s suggestion that the 90 percent 

usage requirement apply to air carriers 

with more than 50 Arrival 

Authorizations. The purpose of the 

usage requirement is to ensure that 

these resources are being used 

efficiently, consistently and universally. 

The rule offers some opportunity to new 

entrants and limited incumbents to gain 

new or additional access to O’Hare. 

ACAA’s proposal could undermine the 

efficiency goal of the universal usage 

requirement, and would not necessarily 

result in additional Authorizations 

being available for new entrant and 

limited incumbents. 

The City stated that given their 

fluidity, scheduled cargo operations, in 

comparison to schedule passenger 

operations, merit a lower usage 

minimum. We disagree. As discussed 

above, if cargo operators find that their 

scheduled operation cannot use the 

frequencies for which they hold the 

Arrival Authorization, the carriers are 

encouraged to make the frequencies 

available to other carriers via leasing. 

We do not see a need to establish a 

separate usage requirement for these 

flights. 

In the NPRM, we proposed to waive 

the usage requirement for a specific 

carrier in the event of a strike or labor 

dispute. Although we did not receive 

any comments on this provision, upon 

reconsideration, we have decided to 

withdraw this part of the proposal as the 

term, ‘‘labor dispute’’ was so broad that 

it could apply to the filing of a 

grievance, a stop work action or other 

events that may or may not result in a 

strike. By including the provision that 

permits waiver in the event of a highly 

unusual and unpredictable condition 

that exceeds 5 consecutive days, the 

rule provides carriers with latitude and 

flexibility to deal with unpredictable 

conditions, while maintaining the 

integrity and purpose of the usage 

requirement. 

Finally, we will waive the usage 

requirement for all carriers through 

December 31, 2006, which covers the 

first two months reporting period under 

the rule. The August 2004 Order does 

not contain any usage requirement and 

some carriers are not fully utilizing their 

permitted number of arrivals. Carriers 

typically complete their schedule 

planning process several months in 

advance of actual operations and most 

carriers have already finalized their 

November /December 2006 schedules. 

While it is possible that some flights 

might be added to meet the usage rules, 

other carriers may decide to use the 

sale/lease options under the rule. We 

conclude that a limited waiver of the 

usage requirement is warranted to 

provide for minimal disruption of 

carrier schedules during the transition 

from the August 2004 Order and the 

rule adopted here. Therefore, the first 

report detailing usage of the Arrival 

Authorizations will be for the January–

February 2007 period. 

Sunset Date 

We proposed to terminate this rule on 

April 6, 2008. This date was selected for 

several reasons: (1) The City had 

proposed an O’Hare Modernization 

Program (OMP) that would increase the 

airport capacity and reduce the level of 

delays at the airport and the first phase 

would come on-line by the beginning of 

2008 (the proposal was subsequently 

approved in the FAA’s Record of 

Decision for the OMP dated September 

30, 2005); (2) improvements in the 

Instrument Landing System for runways 

27L and 27R are expected to improve 

the performance of the airport in 

adverse weather conditions; and (3) the 

proposed date in 2008 would allow 

regulation to address the present 

conditions at the airport until the 

benefits of these capacity enhancements 

are realized at the airport. Alternatively, 

if the OMP does not move forward in a 

timely manner, the proposed date 

would allow the FAA time to develop 

an alternative to this rulemaking. 

Some carriers questioned whether the 

rule would really be temporary. The 

City opposed the sunset date and argued 

that the date is too long for ‘‘an invasive 

rule to constrain operations at O’Hare.’’

The City preferred termination of the 

rule after one year of the rule’s effective 

date and argued that the sunset 

provision should include a contingency 

on changes in operating conditions at 

O’Hare, i.e., if operations significantly 

decrease, the rule would sunset. 

As stated in the Notice, the agency’s 

preferred approach to reducing delay 

and congestion is to enhance airport 

infrastructure, so that capacity meets 

demand. See, 49 U.S.C. 47101(a)(9). If 

the desired capacity does not 

materialize within the timeframe of this 

rule, we may consider other congestion 

management techniques to replace this 

rule. We are also open to revisiting this 

date if changes to the airline industry 

obviate the need for a congestion 

management rule at O’Hare. 

We cannot support a one-year rule at 

this point, as there will not be any 

measurable increase in capacity in such 


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51398 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 

30Public Law 109–58 amends the start and end 

dates of U.S. daylight savings time beginning March 

2007. 

a short period. We find it appropriate to 

extend the termination date of this rule 

through October 31, 2008, to reflect the 

current schedule for commissioning of 

the first runway (Runway 9L/27R). This 

date coordinates the rule with end of the 

summer scheduling season and U.S. 

daylight savings time, as amended by 

Public Law 109–58.30 Therefore, we 

adopt October 31, 2008 at 9 p.m., as the 

sunset date for this rule. 

Paperwork Reduction Act 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the FAA submitted a copy of 

the new information collection 

requirements(s) in this final rule to the 

Office of Management and Budget 

(OMB) for its review. OMB is still 

reviewing the submission and will 

provide an OMB Control Number when 

the review is complete. 

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. 

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 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 (5 U.S.C. 5601, et seq.) 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 final rule (1) Has 

benefits that justify its costs; is not an 

economically significant regulatory 

action as defined by Executive Order 

12866; and is ‘‘significant’’ as defined in 

DOT’s Regulatory Policies and 

Procedures; (2) will not have a 

significant economic impact on a 

substantial number of small entities; (3) 

will not adversely affect international 

trade; and (4) will 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 final rule will 

result in a 32% reduction in delay at 

O’Hare, generating present value 

benefits of $475.6 million relative to 

November 2003 delays. 

The estimated present value cost of 

this final rule is less than $1.0 million. 

Who Is Potentially Affected by This 

Rulemaking 

• Operators of scheduled, domestic 

and Canadian flights at O’Hare. 

• Domestic and foreign air carriers. 

• All communities, including small 

communities with air service to O’Hare. 

• Passengers of scheduled, domestic 

and Canadian flights to O’Hare. 

• Chicago Department of Aviation. 

• FAA Air Traffic Control. 

Key Assumptions 

• Baseline Flight Operations—Official 

Airline Guide (OAG) Schedule 

November 20, 2003 of 1,464 daily 

arrival flights (OAG plus 96 

unscheduled). 

• Daily Flight Completion Factor: 

97%/Daily Flight Cancellation Factor: 

3%. 

• No lost revenue due to cancelled 

flights—All Passengers are rebooked or 

rerouted to their destination. 

• Delay improvements are 9.6 

minutes per flight and equivalent to a 

32% improvement in delay. We derive 

delay improvements from MITRE’s 

Queuing Delay Model, which measures 

queuing delays against the OAG flight 

schedule. 

• For this evaluation, the effective 

date is 10/29/06 and the sunset date is 

10/31/08. We adjust annual estimates to 

reflect the 1.5 days per week when the 

limits are not in effect (all-day Saturday 

and until noon on Sunday). 

Other Important Assumptions 

• Discount Rate—7%. 

• Assumes 2005 Current Year Dollars. 

• Final rule will sunset October 31, 

2008. 

• Ground and Airborne average cost 

per hour—$1,935. 

• Passenger Value of Time—$28.60 

per hour. 

Alternatives We Have Considered 

• Alternative #1—This alternative 

would have let the August 18, 2004, 

order expire on April 30, 2005. Based on 

history, FAA expects that operators 

would most likely continue to expand 

operations, further increasing airport 

delays. 

• Alternative #2—The FAA is 

continuing to explore the feasibility of 

a market-based solution such as an 

auction or congestion pricing. 

• Alternative #3—The FAA 

implements this final rule providing an 

interim solution while capacity 

enhancement measures and marketbased mechanisms are reviewed. 

Benefits of This Rulemaking 

The primary benefits of this rule will 

be the airline and passenger delay cost 

savings. The benefits reflect a prorating 

of the 5.5 days per week for which the 

operational limits are in effect, and the 

flight completion factor of 97%. The 

total estimated benefits, shown in table 

1 are $475.6 million in present value 

dollars. 


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TABLE 1.—TOTAL PRESENT VALUE BENEFITS OF FINAL RULE

Airline delay cost 

savings 

Passenger delay 

cost savings Total benefits 

2006 ..................................................................................................................... $19,094,170 $21,212,339 $40,306,510 

2007 ..................................................................................................................... 111,337,400 124,436,227 235,773,627 

2008 ..................................................................................................................... 82,300,269 117,219,790 199,520,059 

Total .............................................................................................................. 212,731,839 262,868,357 475,600,196 

The total airline delay cost savings of 

$212.7 million is shown in Table 2. The 

total passenger delay costs savings of 

$262.9 million is shown in Table 3. 

TABLE 2.—AIRLINE DELAY COST SAVING

Avg total 

delay (minutes) per 

day 

Avg total 

delay 

(hours) per 

Day 

Avg variable 

cost per 

hour 

Prorated annual 

airline delay cost 

savings 

Prorated present 

value of airline 

delay cost saving 

2006 ..................................................................................... 13,772 230 $1,935 $20,430,762 $19,094,170 

2007 ..................................................................................... 13,772 230 1,935 127,470,189 111,337,400 

2008 ..................................................................................... 13,772 230 1,935 100,821,369 82,300,269 

Total .............................................................................. .................... .................... .................... 248,722,320 212,731,839 

TABLE 3.—PASSENGER DELAY COST SAVINGS

Total 

daily arrivals 

Average 

AC seats 

Average 

AC load 

factor 

Passengers 

per flight 

Passengers 

per day 

Avg delay 

arrival 

Total 

delay minutes 

Total 

delay 

hours 

Annual 

daily hours 

(prorated 

days rule 

is in effect) 

Pax value 

of time 

Daily pax 

delay 

costs 

Prorated annual 

pax passenger 

delay reduction 

Prorated PV of 

pax delay reduction 

2006 ............... 1,420 104.3 0.728 75 107,827 9.6 1,035,142 17,252 3,864,528 $28.60 $493,417 $22,697,203 $21,212,339 

2007 ............... 1,420 104.5 0.731 76 108,479 9.6 1,041,400 17,357 4,981,365 28.60 496,401 142,467,037 124,436,227 

2008 ............... 1,420 104.9 0.734 76 109,341 9.6 1,049,677 17,495 1,399,569 28.60 500,346 143,599,283 117,219,790 

Total ........ ............... ............... ............... ................. ................. ................. ................. ................. ................. ................. ................. 308,763,523 262,868,357 

Costs of This Rulemaking 

The major costs of this final rule cover 

the blind market costs incurred by 

buyers and sellers of Arrivals 

Authorizations, the public costs of 

developing and managing the blind 

market, and other administrative and 

compliance costs. FAA believes that 

market pressures as well as provisions 

in this rule should mitigate the potential 

impact of this final rule on competition 

and airfares at O’Hare. The total present 

value costs of less than $1.0 million are 

shown in the last column of Table 4. 

TABLE 4.—PRESENT VALUES OF TOTAL ANNUAL COSTS

FAA E-Bid 

develop. 

costs 

E-Bid system 

operating costs 

FAA E-Bid 

admin. 

costs 

Other 

admin. 

costs 

Reporting 

costs Total costs 

2006 ....................................................................... $147,196 $23,364 $25,037 $125,183 $29,684 $350,464 

2007 ....................................................................... 0 43,672 46,797 233,987 15,734 340,189 

2008 ....................................................................... 0 20,407 21,868 109,339 12,254 163,868 

Total ................................................................ 147,196 87,444 93,702 468,509 57,672 854,522 

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 will have a significant economic 

impact on a substantial number of small 

entities. If the agency determines that it 

will, 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 


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determination, and the reasoning should 

be clear. The basis for such FAA 

determination follows. 

The final rule affects all scheduled 

operators at O’Hare, more than just a 

few of which are small entities (where 

‘‘small entities’’ are firms with 1,500 or 

fewer employees). The arrivals of all 

carriers currently providing service at 

O’Hare will be accommodated, thereby 

minimizing the impact on their 

schedules. For their given schedules, 

this final rule will lower their fuel burn 

costs substantially by reducing the 

number and magnitude of delays below 

those experienced prior to the August 

2004 Order. 

If Arrival Authorizations are returned 

or withdrawn for nonuse, new entrants 

and limited incumbents (many of which 

are likely to be small entities) receive a 

preference in the reassignment of those 

authorities. If additional (new) capacity 

becomes available during the duration 

of this final rule, new entrants, limited 

incumbents and incumbents have equal 

opportunity to receive additional 

Arrival Authorizations through a lottery. 

Carriers with a limited number of 

operations at O’Hare are also protected 

from withdrawal of Arrival 

Authorizations if the FAA determines it 

is operationally necessary to reduce the 

number of flights at the airport. 

Therefore, this rule affords limited 

preference to small entity operators for 

the assignment of available capacity and 

again favors these small entity operators 

if airport operations are reduced. 

In ‘‘grandfathering’’ the air carriers’

existing schedules, the final rule enables 

airlines to continue operating all 

existing air service to airports of 

communities with populations less than 

50,000. Consequently, we do not expect 

this final rule to negatively impact 

airports in small communities. 

Therefore, the FAA certifies that this 

final rule will not have a significant 

economic impact on a substantial 

number of small entities. 

International Trade Impact Assessment 

The Trade Agreement 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. This rule 

excludes future growth in non-Canadian 

international arrivals from the hourly 

caps imposed. Thus, the FAA has 

assessed the potential effect of this final 

rule and determined that it will not 

create unnecessary obstacles to the 

foreign commerce of the United States. 

Unfunded Mandates Assessment 

The Unfunded Mandates Reform Act 

of 1995 (the Act) is intended, among 

other things, to curb the practice of 

imposing unfunded Federal mandates 

on State, local, and tribal governments. 

Title II of the Act requires each Federal 

agency to prepare a written statement 

assessing the effects of any Federal 

mandate in a proposed or final agency 

rule that may result in an expenditure 

of $100 million or more (adjusted 

annually for inflation) in any one year 

by State, local, and tribal governments, 

in the aggregate, or by the private sector; 

such a mandate is deemed to be a 

‘‘significant regulatory action.’’ The 

FAA currently uses an inflationadjusted value of $128.1 million in lieu 

of $100 million. 

This final rule does not contain such 

a mandate. Therefore, the requirements 

of Title II of the Unfunded Mandate 

Reform Act of 1995 do not apply. 

Executive Order 13132, Federalism 

The FAA has analyzed this final rule 

under the principles and criteria of 

Executive Order 13132, Federalism. We 

determined that this action will not 

have a substantial direct effect on the 

States, or 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 does 

not have federalism implications. 

Environmental Analysis 

FAA Order 1050.1E 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 312F, Regulations, standards, 

and exemptions (excluding those which 

if implemented may cause a significant 

impact on the human environment). 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 final rule 

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 Amendment 

■ In consideration of the foregoing, the 

Federal Aviation Administration adds 

Subpart B to part 93 of Chapter II of 

Title 14, Code of Federal Regulations, as 

follows: 

■ 1. The authority citation for this 

amendment continues to read as 

follows: 

Authority: 49 U.S.C. 106(g), 40103, 40106, 

40109, 40113, 44502, 44514, 44701, 44719, 

46301 

■ 2. Subpart B is added to read as 

follows: 

Subpart B—Congestion and Delay 

Reduction at Chicago O’Hare 

International Airport 

Sec. 

93.21 Applicability. 

93.22 Definitions. 

93.23 Arrival Authorizations. 

93.24 [Reserved] 

93.25 Initial assignment of Arrival 

Authorizations to U.S. and Canadian air 

carriers for domestic and U.S./Canada 

transborder service. 

93.26 Reversion and withdrawal of Arrival 

Authorizations. 

93.27 Sale and lease of Arrival 

Authorizations. 

93.28 One-for-one trade of Arrival 

Authorizations. 

93.29 International Arrival Authorizations. 

93.30 Assignment provisions for domestic 

and U.S./Canada transborder service. 

93.31 Minimum usage requirement. 

93.32 Administrative provisions. 

93.33 [Reserved] 

Subpart B—Congestion and Delay 

Reduction at Chicago O’Hare 

International Airport 

§ 93.21 Applicability. 

(a) This subpart prescribes the air 

traffic rules for the arrival of aircraft 

used for scheduled service, other than 

helicopters, at Chicago’s O’Hare 

International Airport (O’Hare). 

(b) This subpart also prescribes 

procedures for the assignment, transfer, 

sale, lease, and withdrawal of Arrival 

Authorizations issued by the FAA for 


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scheduled operations by U.S. and 

foreign air carriers at O’Hare. 

(c) The provisions of this subpart 

apply to O’Hare during the hours of 7 

a.m. through 8:59 p.m. Central Time, 

Monday through Friday, and 12 p.m. 

through 8:59 p.m. Central Time on 

Sunday. No person shall operate any 

scheduled arrival into O’Hare during 

such hours without first obtaining an 

Arrival Authorization in accordance 

with this subpart. 

(d) Carriers that have Common 

Ownership shall be considered to be a 

single U.S. air carrier or foreign air 

carrier for purposes of this rule. 

(e) The provisions of this subpart are 

applicable beginning October 29, 2006, 

and terminate at 9 p.m. on October 31, 

2008. 

§ 93.22 Definitions. 

For the purposes of this subpart, the 

following definitions apply: 

Arrival Authorization is the 

operational authority assigned by the 

FAA to a U.S. or foreign air carrier to 

conduct one scheduled arrival operation 

on a specific day of the week during a 

specific 30-minute period at O’Hare. 

Carrier is a U.S. air carrier, Canadian 

air carrier or foreign air carrier with 

authority to conduct scheduled service 

at O’Hare under Parts 121, 129, 135 of 

the Chapter and the appropriate 

economic authority for scheduled 

service under Title 49 of the United 

States Code. 

Common Ownership with respect to 

two or more carriers means having in 

common at least 50 percent beneficial 

ownership or control by the same entity 

or entities. 

Incumbent is any U.S. or Canadian air 

carrier that is not a New Entrant or 

Limited Incumbent. 

International Arrival Authorization is 

the operational authority assigned by 

the FAA to a Carrier to conduct one 

scheduled arrival operation at O’Hare 

from a foreign point or a continuation of 

a flight that began at a foreign point, 

except for arrivals at O’Hare from 

Canada by U.S. and Canadian air 

carriers. 

Limited Incumbent is any U.S. or 

Canadian air carrier that holds or 

operates, on its own behalf, 8 or fewer 

Arrival Authorizations provided that it 

has not sold or otherwise transferred 

Arrival Authorizations, other than onefor-one transfers permitted in this 

subpart. Any Limited Incumbent that 

sells or otherwise transfers an Arrival 

Authorization shall thereafter be treated 

as an Incumbent for purposes of this 

rule. 

New Entrant is any U.S. or Canadian 

air carrier that does not hold or operate, 

and has never held or operated any 

Arrival Authorization at O’Hare, on its 

own behalf. 

Preferred Lottery is a lottery 

conducted by the FAA to assign Arrival 

Authorizations, with initial preference 

for New Entrants and Limited 

Incumbents. 

Scheduled Arrival is the arrival 

segment of any operation regularly 

conducted by a carrier between O’Hare 

and another point regularly served by 

that carrier. 

Summer Scheduling Season is the 

period of time from the first Sunday in 

April until the last Sunday in October. 

Beginning March 11, 2007, the summer 

scheduling season is the period of time 

from the second Sunday in March until 

the first Sunday in November. 

Winter Scheduling Season is the 

period of time from the last Sunday in 

October until the first Sunday in April. 

Beginning March 11, 2007, the winter 

scheduling season is the first Sunday in 

November until the second Sunday in 

March. 

§ 93.23 Arrival Authorizations. 

(a) Except as otherwise established by 

the FAA under paragraph (d) of this 

section and § 93.29 of this subpart, the 

number of Arrival Authorizations shall 

be limited to: 

(1) 88 per hour between the hours of 

7 a.m. and 7:59 p.m. Monday through 

Friday and 12 p.m. and 7:59 p.m. 

Sunday, 

(i) Not to exceed 50 during each halfhour beginning at 7 a.m. and ending at 

7:59 p.m. 

(ii) Not to exceed 88 within any two 

consecutive 30-minute periods. 

(2) 98 between 8 p.m. and 8:59 p.m. 

Monday through Friday, and Sunday, 

not to exceed 50 between 8 p.m. and 

8:29 p.m. and 50 between 8:30 p.m and 

8:59 p.m. 

(b) An Arrival Authorization is a 

temporary operating privilege subject to 

FAA control. Only Carriers may hold 

Arrival Authorizations. Arrival 

Authorizations may not be bought, sold, 

leased, or otherwise transferred to 

another Carrier, except as provided in 

§§ 93.27 and 93.28 of this subpart. 

(c) Beginning six months from the 

effective date of this rule and on each 

six-month anniversary thereafter, the 

FAA shall conduct a review of existing 

capacity at O’Hare, to determine 

whether to increase the number of 

Arrival Authorizations. The FAA will 

consider the following factors: 

(1) The number of delays; 

(2) The length of delays; 

(3) Weather conditions; 

(4) On-time arrivals and departures; 

(5) The number of actual arrival 

operations; 

(6) Runway utilization and capacity 

plans; and 

(7) Other factors relating to the 

efficient management of the national air 

space system. 

(d) Notwithstanding paragraph (a), the 

Administrator may increase the number 

of Arrival Authorizations based on the 

review conducted in paragraph (c) of 

this section. 

§ 93.24 [Reserved] 

§ 93.25 Initial assignment of Arrival 

Authorizations to U.S. and Canadian air 

carriers for domestic and U.S./Canada 

transborder service. 

(a) The FAA shall assign to each U.S. 

and Canadian air carrier, conducting 

scheduled service at O’Hare, as of the 

effective date of this rule, Arrival 

Authorizations for each scheduled 

arrival that it published for either 

domestic or U.S./Canada transborder 

service for any day during the 7-day 

period of November 1 through 7, 2004, 

as evidenced by the FAA’s records, not 

to exceed the peak-day limits for each 

carrier established under the August 18, 

2004, ‘‘Order Limiting Scheduled 

Operations at O’Hare International 

Airport.’’ A carrier’s total assignment 

under this paragraph will be reduced 

accordingly by any international Arrival 

Authorizations assigned under 

§ 93.29(a). 

(b) If a U.S. or Canadian air carrier did 

not publish a scheduled domestic or 

U.S./Canada transborder arrival during 

the period of time referenced in 

paragraph (a) of this section, but was 

entitled to do so under the August 18, 

2004, ‘‘Order Limiting Scheduled 

Operations at O’Hare International 

Airport,’’ and is conducting scheduled 

service at O’Hare as of the effective date 

of this rule, a corresponding Arrival 

Authorization shall be assigned for that 

arrival. 

(c) Arrival Authorizations will be 

assigned to the U.S. or Canadian air 

carrier that actually operated the flight 

regardless of any codeshare or 

marketing arrangement unless such 

carrier did not market the flight under 

its own code and the inventory of the 

flight was under the control of another 

Carrier. If the inventory was under the 

control of another Carrier, the FAA shall 

assign the Arrival Authorization to that 

Carrier. Carriers may subsequently 

transfer Arrival Authorizations for use 

by other Carriers under their marketing 

control in accordance with § 93.2(m). 

(d) Any Arrival Authorization not 

assigned under paragraphs (a) or (b) of 

this section will be assigned to carriers 

conducting scheduled international 

service under § 93.29. Any remaining 


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Arrival Authorizations will be assigned 

by preferred lottery under § 93.30. 

(e) The FAA Vice President, System 

Operations Services, is the final 

decision-maker for determinations 

under this section. 

§ 93.26 Reversion and withdrawal of 

Arrival Authorizations. 

(a) A U.S. or Canadian air carrier’s 

Arrival Authorizations assigned under 

§§ 93.25 or 93.27 revert automatically to 

the FAA 30 days after the Carrier has 

ceased all operations at O’Hare for any 

reason other than a strike. 

(b) The FAA may withdraw or 

temporarily suspend Arrival 

Authorizations at any time as a result of 

reduced airport capacity or to fulfill 

operational needs. Whenever Arrival 

Authorizations must be withdrawn, they 

will be withdrawn in the required 30- 

minute Arrival Authorization time 

periods in accordance with the priority 

list established under § 93.32 of this 

subpart. 

(c) Any Arrival Authorization that is 

withdrawn or temporarily suspended 

under paragraph (b) will, if reassigned, 

be reassigned to the Carrier from which 

it was taken, provided that the Carrier 

continues to conduct scheduled 

operations at O’Hare. 

(d) The FAA shall not withdraw or 

temporarily suspend under paragraph 

(b) any Arrival Authorizations if the 

result would be to reduce a Carrier’s 

total number of Arrival Authorizations 

below eight. 

(e) Except as otherwise provided in 

paragraph (a) of this section, the FAA 

will notify the affected Carrier before 

withdrawing or temporarily suspending 

any Arrival 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. 

§ 93.27 Sale and lease of Arrival 

Authorizations. 

(a) No U.S. or Canadian air carriers 

may sell or lease its Arrival 

Authorizations at O’Hare except in 

accordance with the procedures in this 

section and in the manner prescribed by 

the FAA. Carriers may not buy, sell, 

lease or otherwise transfer control of 

Arrival Authorizations assigned under 

§ 93.29. 

(b) Only monetary consideration may 

be provided in any transaction 

conducted under this section. 

(c) New Entrants and Limited 

Incumbents may not sell, lease, or 

otherwise transfer control of any Arrival 

Authorizations assigned through a 

Preferred Lottery within 12 months of 

such assignment, except to another New 

Entrant or Limited Incumbent. One-forone trades to other Carriers under 

§ 93.28 are permitted. 

(d) A U.S. or Canadian air carrier 

seeking to sell or lease an Arrival 

Authorization must provide the 

following information in writing to the 

FAA: 

(1) Arrival Authorization number and 

time; 

(2) Frequency; 

(3) Planned effective date(s) of 

transfer; 

(4) Minimum reserve price, if 

established by the offering carrier; 

(5) Other pertinent information, if 

applicable; and 

(6) Carrier’s authorized representative. 

(e) The FAA will post a notice of the 

available Arrival Authorization and 

specific information concerning the 

proposed sale or lease transaction on the 

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

The Web site will include information 

regarding registration to be advised of 

posted transactions, and other relevant 

information pertaining to this section. 

The FAA will post the notice within 

two business days after receipt of all 

required information from the U.S or 

Canadian air carrier offering the Arrival 

Authorization for sale or lease. The 

notice will provide ten business days for 

bids to be received and will specify a 

bid closing date and time. Only U.S. and 

Canadian air carriers may bid on Arrival 

Authorizations. Information identifying 

the Carrier providing the Arrival 

Authorization for sale or lease will not 

be posted or released by the FAA until 

after the FAA has approved the transfer. 

(f) All bids must be sent to the FAA 

electronically, via the FAA Web site, by 

the closing date and time, and no 

extensions of time will be granted. Late 

bids will not be considered. All bids 

will be held confidential, with each 

bidder certifying in a form acceptable to 

the FAA that its bid has not been 

disclosed to any person not its agent. 

(g) The FAA will forward the highest 

qualifying bid to the selling or leasing 

U.S. or Canadian air carrier without 

identifying the bidder. The selling or 

leasing Carrier will have up to three 

business days to accept or reject the bid. 

The selling or leasing Carrier must 

notify the FAA via the Web site or in 

writing of its acceptance no later than 5 

p.m. Eastern Time on the third business 

day. If the selling or leasing Carrier does 

not notify the FAA of its acceptance 

within the allotted time, the transaction 

will terminate. 

(h) Upon acceptance, the FAA will 

notify the U. S. or Canadian air carrier, 

who submitted the highest bid, and 

request that the buyer/lessee and the 

seller/lessor submit to the FAA the 

information (such as Arrival 

Authorization number, frequency and 

effective date(s) of transfer) required to 

transfer the Arrival Authorization. 

(i) Each U.S. or Canadian air carrier 

must provide the FAA evidence of its 

consent and each Carrier must certify 

that only monetary consideration will 

be or has been exchanged. 

(j) The FAA will approve requested 

transfers of Arrival Authorizations that 

comply with these regulations. The 

recipient U.S. or Canadian air carrier of 

the transfer may not use the Arrival 

Authorization until the conditions in 

paragraph (i) of this section have been 

met and the FAA has approved the 

transfer. 

(k) The FAA will keep a record of all 

bids received and of each Arrival 

Authorization transfer, including the 

identity of both Carriers and the 

winning bid price, all of which will be 

made available to the public. 

(l) U.S. or Canadian air carriers may 

request the FAA post notice that it is 

seeking to lease or purchase an Arrival 

Authorization at O’Hare. The Carrier 

may submit information in writing or 

via the FAA’s Web site. This 

information may include the effective 

date, number or timing of Arrival 

Authorizations sought, whether a 

Carrier is seeking to purchase or lease, 

maximum price offered, or other 

pertinent information. The FAA may 

edit any submissions, or choose not to 

post certain information, in order to 

ensure the integrity of the solicitation 

process. Information identifying the 

Carrier seeking an Arrival Authorization 

for sale or lease will not be posted or 

released by the FAA. The FAA will post 

such requests within two business days 

of receipt for a period of at least 30 days. 

Any resulting offers to sell or lease 

Arrival Authorizations shall be 

conducted in accordance with this 

subsection. 

(m) A U.S. or Canadian air carrier may 

transfer an Arrival Authorization to 

another U.S. or Canadian air carrier that 

conducts operations at O’Hare solely 

under the transferring Carrier’s 

marketing control, including the entire 

inventory of the flight. Each Carrier 

must provide written evidence of its 

consent to the transfer. The FAA will 

approve requested transfers that comply 

with these regulations. The FAA Vice 

President, System Operations Services, 

is the final decision-maker for 

determinations under this subsection. 

The recipient Carrier of the transfer may 

not use the Arrival Authorization until 

the FAA has provided written 

confirmation. A record of each Arrival 

Authorization will be kept on file by the 


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FAA and made available to the public 

on request. 

§ 93.28 One-for-one trade of Arrival 

Authorizations. 

(a) Except as otherwise provided in 

this subpart, any Carrier may exchange 

an Arrival Authorization it has been 

assigned with another Carrier on a onefor-one basis for the purpose of 

conducting that operation in a different 

half-hour time period. 

(b) Written evidence of each Carrier’s 

consent to the transfer must be provided 

to the FAA. 

(c) The FAA will approve requested 

transfers of Arrival Authorizations that 

comply with these regulations. The 

recipient Carrier of the transfer may not 

use the Arrival Authorization until 

written confirmation has been received 

from the FAA. 

(d) A U.S. or Canadian air carrier 

assigned Arrival Authorizations under 

§ 93.29 may trade on a one-for-one basis 

within its own base of Arrival 

Authorizations subject to FAA approval, 

provided that the purpose is to operate 

the arrival flight from a foreign point 

outside Canada in a different half-hour 

time period than assigned. The FAA 

must confirm the transfer prior to 

operation. 

(e) A record of each Arrival 

Authorization exchange will be kept on 

file by the FAA and made available to 

the public upon request. 

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

no other consideration will be or has 

been provided for the exchange. 

§ 93.29 International Arrival 

Authorizations. 

(a) Except as otherwise provided in 

paragraph (d) of this section, the FAA 

shall make an initial assignment of 

Arrival Authorizations to U.S. and 

Canadian carriers arriving from a foreign 

point, excluding Canada, or any other 

foreign carrier arriving from a foreign 

point or the continuation of a flight that 

begins at a foreign point for the winter 

and summer scheduling seasons as 

follows. This section does not apply to 

arrivals at O’Hare from Canada by U.S. 

or Canadian air carriers. 

(1) Winter Scheduling Season. Upon 

request, the FAA shall assign to each 

Carrier that published a scheduled 

arrival during the Winter 2006 

Scheduling Season, as evidenced by the 

FAA’s records, a corresponding Arrival 

Authorization for the Winter 2007 

Scheduling Season. 

(2) Summer Scheduling Season. Upon 

request, the FAA shall assign to each 

Carrier that published a scheduled 

arrival for the Summer 2006 Scheduling 

Season, as evidenced by the FAA’s 

records, a corresponding Arrival 

Authorization for the Summer 2007 

Scheduling Season. 

(3) Arrival Authorizations will be 

assigned to the Carrier that actually 

operated the flight regardless of any 

codeshare or marketing arrangement 

unless the flight was predominately 

marketed, by contract, under the control 

of another Carrier. If the flight was 

under the marketing control of another 

Carrier or the entire inventory was 

under the control of another Carrier, the 

FAA shall assign the Arrival 

Authorization to that Carrier. 

(4) The FAA Vice President, System 

Operations Services, is the final 

decision-maker for determinations 

under this subsection. 

(b) Notwithstanding the limit on 

Arrival Authorization in § 93.23(a), any 

U.S. or Canadian air carrier arriving at 

O’Hare from a foreign point, excluding 

Canada, shall be assigned an Arrival 

Authorization under this section for that 

flight. 

(c) Notwithstanding the limit on 

Arrival Authorizations in § 93.23(a), any 

non-Canadian, foreign air carrier 

conducting scheduled service and 

arriving at O’Hare shall be assigned an 

Arrival Authorization under this section 

for that flight. 

(d) The Department of Transportation 

reserves the right to withhold the 

assignment of an Arrival Authorization 

to any foreign air carrier of a country 

that does not provide equivalent rights 

of access to its airports for U.S. air 

carriers, as determined by the Secretary 

of Transportation. 

(e) For each scheduling season, 

Carriers must request Arrival 

Authorizations under this section in 

accordance with the procedures 

announced by the FAA in the Federal 

Register. A Carrier may request to 

operate more flights from foreign points 

than the number for which it received 

Arrival Authorizations under § 93.29(a) 

or to operate historic arrivals in a 

different half-hour than initially 

assigned for the previous corresponding 

scheduling season. The Arrival 

Authorizations will be assigned at the 

time requested unless: 

(1) An Arrival Authorization is 

available within one hour of the 

requested time, in which case, the 

unassigned Arrival Authorization will 

be used to satisfy the request; or 

(2) Operational efficiencies support 

assignment within one hour of the 

requested period. The FAA Vice 

President, System Operations Services, 

is the final decision-maker for 

determinations under this subsection. 

(f) Each request for Arrival 

Authorizations under this section shall 

specify the complete flight information 

including the carrier identifier, flight 

number, complete flight itinerary, 

frequency, scheduled arrival time, 

aircraft and service type, effective dates 

and whether the Arrival Authorization 

is for a new or historic flight. 

(g) Arrival Authorizations assigned 

under this section cannot be bought, 

sold, leased or transferred under § 93.27 

but subject to FAA approval may be 

traded on a one-for-one basis under 

§ 93.28 to meet the Carrier’s operational 

needs. 

(h) Arrival Authorizations assigned 

under this section are not subject to 

minimum usage requirements of § 93.31 

of this subpart but will revert to the 

FAA if not used for 15 consecutive days. 

Arrival Authorizations assigned under 

this section may only be used for a flight 

arriving from a foreign point or for nonCanadian, foreign air carriers, the 

continuation of a flight that begins at a 

foreign point. 

§ 93.30 Assignment provisions for 

domestic and U.S./Canada transborder 

service. 

(a) Whenever the FAA has determined 

that sufficient Arrival Authorizations 

are available, they will be assigned by 

lottery in accordance with this section. 

Only U.S. and Canadian air carriers are 

eligible to participate in a lottery. U.S. 

and Canadian air carriers must hold 

appropriate economic authority for 

scheduled service under Title 49 of the 

U.S.C. and FAA operating authority 

under parts 121, 129, or 135 of this 

chapter to select Arrival Authorizations 

in a lottery. 

(b) Arrival Authorizations not 

assigned under § 93.25, or returned to 

the FAA under §§ 93.26(a) or 93.31 for 

reassignment shall be assigned by a 

Preferred Lottery. 

(c) Any Arrival Authorization 

available as the result of an increase in 

the hourly limits under § 93.23(a) of this 

part from 88 Arrival Authorizations to 

89 or 90 shall be assigned by Preferred 

Lottery. 

(d) Any Arrival Authorizations 

available as the result of an increase 

above 90 in the hourly limits specified 

in § 93.23(a) of this subpart shall be 

assigned by lottery that is open to all 

U.S. and Canadian air carriers eligible to 

participate. 

(e) The FAA will publish a notice in 

the Federal Register announcing the 

lottery dates and any special procedures 

for the lotteries. 

(f) Any U.S. or Canadian air carrier 

seeking to participate in any lottery 

must notify the FAA in writing, and 


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51404 Federal Register / Vol. 71, No. 167 / Tuesday, August 29, 2006 / Rules and Regulations 

such notification must be received by 

the FAA 15 days prior to the lottery 

date. The U.S. or Canadian air carrier 

must specify if it is requesting to 

participate in a lottery as a New Entrant 

or Limited Incumbent. The U.S. or 

Canadian air carrier must also disclose 

in its notification whether it has 

Common Ownership with any other 

Carrier and, if so, identify such Carrier. 

(g) A random lottery shall be held to 

determine the order in which 

participating Carriers shall select an 

Arrival Authorization. 

(h) In any Preferred Lottery, each New 

Entrant and Limited Incumbent will 

have the opportunity to select Arrival 

Authorizations, if available as provided 

in paragraph (i) of this section, until it 

holds a total of eight Arrival 

Authorizations. Arrival Authorizations 

remaining after all New Entrants and 

Limited Incumbents have been 

accommodated may be assigned to any 

other Carrier participating in the lottery. 

Arrival Authorizations remaining after 

all New Entrants and Limited 

Incumbents have been accommodated 

may be assigned to any U.S. or Canadian 

air carrier participating in the lottery for 

a minimum of 12 months, and then 

until the next lottery, when such Arrival 

Authorizations would again be available 

on a preferred basis to New Entrants and 

Limited Incumbents. 

(i) At the lottery, each Carrier must 

make its selection within 5 minutes 

after being called or it shall lose its turn. 

If Arrival Authorizations still remain 

after each Carrier has had an 

opportunity to select Arrival 

Authorizations, the assignment 

sequence will be repeated in the same 

order. A Carrier may select one Arrival 

Authorization during each sequence, 

except that New Entrants may select two 

Arrival Authorizations, if available, in 

the first sequence of a Preferred Lottery. 

(j) If there are available Arrival 

Authorizations for a temporary period, 

for example, Arrival Authorizations 

pending assignment in a lottery or 

international arrivals that are 

temporarily returned, the FAA may 

assign these Authorizations on a nonpermanent, first-come, first-served basis. 

§ 93.31 Minimum usage requirement. 

(a) Except as provided in § 93.29 and 

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

any Arrival Authorizations not used at 

least 80 percent of the time over a twomonth period shall be withdrawn by the 

FAA. 

(b) Paragraph (a) of this section does 

not apply to Arrival Authorizations 

obtained under § 93.30 or bought under 

§ 93.27 during the first 90 days after 

assignment. 

(c) Paragraph (a) of this section does 

not apply to Arrival Authorizations of 

U.S. or Canadian air carrier forced by a 

strike to cease operations using those 

Arrival Authorizations. 

(d) Every U.S. and Canadian air 

carrier holding Arrival Authorizations 

shall forward in writing to the FAA Slot 

Administration Office in a format 

specified by the FAA a list of all Arrival 

Authorizations held by the Carrier along 

with a listing of the Arrival 

Authorizations actually operated for 

each day of the 2-month reporting 

period within 14 days after the last day 

of the 2-month reporting period 

beginning January 1 and every 2 months 

thereafter. The report shall identify for 

each assigned Arrival Authorization the 

withdrawal priority number and halfhour period, the flight number, 3-letter 

identifier of the operating Carrier used 

for air traffic control communications, 

scheduled time of operation, origin 

airport, and whether a scheduled arrival 

was actually operated by the Carrier on 

a specified day. The report shall identify 

any Common Ownership or control of, 

by, or with any other carrier. A senior 

official of the Carrier shall sign the 

report. 

(e) The Administrator may waive the 

requirements of paragraph (a) of this 

section in the event of a highly unusual 

and unpredictable condition which is 

beyond the control of the Carrier and 

which exists for a period of 5 

consecutive days or more. Examples of 

conditions that could justify 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) The FAA will treat as used any 

Arrival 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. 

§ 93.32 Administrative provisions. 

(a) The FAA will assign, by random 

lottery, withdrawal priority numbers for 

the recall priority of Arrival 

Authorizations at O’Hare. The lowest 

numbered Arrival Authorization will be 

the last withdrawn. Newly created 

Arrival Authorizations will be assigned 

a priority withdrawal number and that 

number will be higher than any other 

Arrival Authorization withdrawal 

number previously assigned. Each 

Arrival Authorization will be assigned a 

designation consisting of the applicable 

withdrawal priority number, and the 30- 

minute time period for the Arrival 

Authorization. The designation will also 

indicate, as appropriate, if the Arrival 

Authorization is daily or for certain 

days of the week only; and is a summer 

or winter Arrival Authorization. 

(b) All transactions regarding Arrival 

Authorizations under this subpart must 

be in a written or electronic format 

approved by the FAA. 

§ 93.33 [Reserved] 

Issued in Washington, DC, on August 21, 

2006. 

Marion C. Blakey, 

Administrator. 

[FR Doc. 06–7138 Filed 8–23–06; 9:00 am] 

BILLING CODE 4910–13–P 


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