[Federal Register Volume 71, Number 248 (Wednesday, December 27, 2006)]
[Notices]
[Pages 77854-77861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9863]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2006-25755]


Operating Limitations at New York LaGuardia Airport; Notice of 
Order

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of order.

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SUMMARY: On September 11, 2006, the FAA issued a proposed order, which 
requested written views on the FAA's tentative determination to place 
temporary limitations on flight operations at New York's LaGuardia 
Airport (LaGuardia). The temporary limits are intended to prevent the 
congestion-related delays that would otherwise occur during the 
interval between the expiration of the High Density Rule and the 
effective date of a long-term regulation. In response to comments, the 
FAA is issuing a final order (the Order) that adopts the proposed 
limitations with some modifications. The limitations will permit 75 
scheduled and six unscheduled operations per hour between 6 a.m. 
through 9:59 p.m., Eastern time, Monday through Friday and from 12 noon 
through 9:59 p.m., Eastern Time, on Sundays.

FOR FURTHER INFORMATION CONTACT: Komal K. Jain, Office of the Chief 
Counsel, Regulations Division, AGC-240, Federal Aviation 
Administration, 800 Independence Avenue, SW., Washington, DC 20591; 
telephone (202) 267-3073.

SUPPLEMENTARY INFORMATION: LaGuardia's runway capacity cannot 
accommodate the number of flight operations that carriers would like to 
operate without the development of significant congestion. Rules 
adopted by the FAA have long limited the number of LaGuardia operations 
during peak demand periods. By statute enacted six years ago, those 
rules will terminate as of January 1, 2007. The FAA has proposed a 
long-term rule in a separate docket that would limit the number of 
scheduled and unscheduled operations at LaGuardia.\1\ We are currently 
soliciting comments on that notice of proposed rulemaking. Because the 
FAA will be unable to complete that rulemaking by January 1, carrier 
operations at LaGuardia would be unrestricted unless the FAA adopts 
temporary limits that will remain in place until the rulemaking's 
completion. Without such operational limitations, the FAA expects that 
severe congestion-related delays will occur, both at LaGuardia and at 
other airports throughout the National Airspace System (NAS) as a 
result of capacity constraints at LaGuardia. The FAA therefore has 
proposed to adopt short-term limitations on LaGuardia flights while 
that rulemaking is completed, and, after considering the comments, is 
issuing this final Order limiting LaGuardia operations.
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    \1\ Docket FAA-2006-25709.
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    The FAA's authority to limit the number of flight operations at 
LaGuardia is an essential component of the FAA's statutory 
responsibilities.\2\ The FAA holds broad authority under 49 U.S.C. 
40103(b) to regulate the use of the navigable airspace of the United 
States. This provision authorizes the FAA to develop plans and policy 
for the use of navigable airspace and, by order or rule, to regulate 
the use of the airspace as necessary to ensure its efficient use.
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    \2\ No one commented on the FAA's statutory authority to adopt 
an Order limiting flights at LaGuardia.
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I. Background

    LaGuardia's runway capacity cannot accommodate the number of flight 
operations that carriers would like to operate without the development 
of significant congestion. Rules adopted by the FAA have long limited 
the number of LaGuardia operations during peak demand periods. By 
statute enacted six years ago, those rules will terminate as of January 
1, 2007. The FAA has proposed a long-term rule in a separate docket 
that would limit the number of scheduled and unscheduled operations at 
LaGuardia.\3\ We are currently soliciting comments on that notice of 
proposed rulemaking. Because the FAA will be unable to complete that 
rulemaking by January 1, carrier operations at LaGuardia would be 
unrestricted unless the FAA adopts temporary limits that will remain in 
place until the rulemaking's completion. Without such operational 
limitations, the FAA expects that severe congestion-related delays will 
occur, both at LaGuardia and at other airports throughout the National 
Airspace System (NAS) as a result of capacity constraints at LaGuardia. 
The FAA therefore has proposed to adopt short-term limitations on 
LaGuardia flights while that rulemaking is completed, and, after 
considering the comments, is issuing this final Order limiting 
LaGuardia operations.
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    \3\ Docket FAA-2006-25709.
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    The FAA's authority to limit the number of flight operations at 
LaGuardia is an essential component of the FAA's statutory 
responsibilities.\4\ The FAA holds broad authority under 49 U.S.C. 
40103(b) to regulate the use of the navigable airspace of the United 
States. This provision authorizes the FAA to develop plans and policy 
for the use of navigable airspace and, by order or rule, to regulate 
the use of the airspace as necessary to ensure its efficient use.
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    \4\ No one commented on the FAA's statutory authority to adopt 
an Order limiting flights at LaGuardia.
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    As a result of LaGuardia's history of congestion-related delays, 
the FAA, over the course of nearly forty years, applied increasingly 
detailed rules to govern the allocation and use of the limited capacity 
at the airport.\5\ These regulations, collectively known as the High 
Density Rule (HDR) and the Buy-Sell Rule (or slot rules), effectively 
controlled congestion at LaGuardia. In 2000, however, out of concern 
with the collateral effects of the slot rules at LaGuardia on airport 
access and competition, Congress included a provision in the Wendell H. 
Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) 
that terminates the LaGuardia slot rules as of January 1, 2007.\6\ 
Congress simultaneously directed the U.S. Department of Transportation, 
effective immediately, to grant exemptions from the HDR for flights 
that would serve small hub and non-hub airports with aircraft with less 
than 71 seats and to grant a limited number of applications for slot 
exemptions from new entrant and limited incumbent carriers.\7\
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    \5\ See 33 FR 17896 (Dec. 3, 1968); 34 FR 2603 (Feb. 26, 1969); 
cf. 14 CFR 93.121-93.133, 93.211-93.227 (2006).
    \6\ 49 U.S.C. 41715(a)(2), enacted by Pub. L. No. 106-181, Sec.  
231, 114 Stat. 61, 106-10 (2000).
    \7\ 49 U.S.C. 41716.
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    As carriers began using the slot exemptions permitted under AIR-21, 
the number of scheduled flight

[[Page 77855]]

operations at LaGuardia began to far exceed the airport's capacity even 
under optimal operating conditions.\8\ By the fall of 2000, carriers 
had already added over 300 scheduled flights at LaGuardia and planned 
to add even more.\9\ With no new airport infrastructure or air traffic 
control procedures, overall airport capacity remained the same while 
the number of aircraft operations and delays soared. The average 
minutes of delay for all arriving flights at LaGuardia increased 144% 
from 15.52 minutes in March 2000 (the month before AIR-21 was enacted) 
to 37.86 minutes in September 2000.\10\ The increase in delays at 
LaGuardia also affected flights at other airports and in adjacent 
airspace. By September 2000, flight delays at LaGuardia accounted for 
25 percent of the nation's delays, compared to 10 percent for the 
previous year.\11\
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    \8\ The increase in scheduled operations at LaGuardia is 
described more fully at 66 FR 31731 (June 12, 2001).
    \9\ 71 FR 51361.
    \10\ Source: FAA's Aviation System Performance Metrics (ASPM).
    \11\ Calculated from FAA's Air Traffic Operations Network 
Database (OPSNET).
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    In order to address the growing congestion at LaGuardia, the FAA 
intervened in November 2000. The FAA reduced the number of daily 
exemptions from the HDR at LaGuardia to 159 during peak operating hours 
and distributed the exemptions via lottery.\12\ The 159 daily 
operations reflected an increase of almost eleven hourly operations 
above the limits in place before the statutory amendments. Even with 
the FAA's partial rollback of the number of exemption flights, 
LaGuardia is now operating at capacity during most hours, and continues 
to have a relatively serious delay problem.
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    \12\ 65 FR 69126 (Nov. 15, 2000). This was extended through 
December 31, 2006. 70 FR 36998 (June 27, 2005).
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    Although LaGuardia lacks the capacity to handle additional flight 
operations beyond the current peak hour limits, the expiration of the 
HDR at LaGuardia as of January 1, 2007, will eliminate the scheduling 
and reservation mechanisms that currently sustain the airport's 
operational balance.\13\ Accordingly, on August 29, 2006, the FAA 
proposed a new rule to maintain the number of operations at LaGuardia's 
current hourly limits.\14\ An order that temporarily maintains 
LaGuardia's current operational limits during the interval between the 
High Density Rule's expiration and the effective date of the proposed 
replacement rule is necessary to avoid any increase in the number of 
operations or a significant rescheduling of existing flights that would 
cause unacceptable delay levels, as explained below in our discussion 
of the comments.
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    \13\ The FAA maintains safe operations through the use of air 
traffic control procedures. Traffic management initiatives would be 
applied as needed but would result in significant aircraft and 
passenger delays.
    \14\ 71 FR 51360.
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    After considering the comments received on the proposed Order, the 
FAA has determined to adopt this Order. Under this Order, the FAA (1) 
Maintains the current hourly limits on scheduled (75) and unscheduled 
(six) operations at LaGuardia during peak periods; (2) imposes an 80 
percent minimum usage requirement for Operating Authorizations; (3) 
provides for a lottery to reallocate withdrawn, surrendered or 
unallocated Operating Authorizations; and (4) allows for trades and 
leases of Operating Authorizations for consideration for the duration 
of the Order. The FAA is not allowing carriers to buy and sell 
Operating Authorizations during the term of this Order. The FAA also is 
not restricting the use of any Operating Authorizations for flights to 
certain destinations or flights with aircraft of a particular size.

II. Discussion of Written Submissions and the Final Order

    In response to our request for written comments, 18 respondents 
expressed views on the FAA's proposed Order. The respondents included 
10 air carriers (American Airlines, U.S. Airways, Delta Air Lines, 
Northwest Airlines, Colgan Air, United Airlines, Republic Airways Group 
(Republic Airline, Chautauqua Airlines, Shuttle America Corp.), and 
AirTran Airways), three air carrier organizations (Regional Airline 
Association (RAA), Air Carrier Association of America (ACAA) and Air 
Transport Association of America (ATA)), two airports (Akron-Canton 
Airport and Newport News/Williamsburg International Airport), the Port 
Authority of New York and New Jersey (Port Authority), City of Canton, 
the Medina County Ohio Economic Development Corporation, the Stark 
Development Board, Inc, and Indiana Senator Richard G. Lugar and 
Congresswoman Julia M. Carson.

Need for Limits on LaGuardia Flight Operations

    As explained in the proposed Order, the FAA continues to believe 
that carrier demand for LaGuardia substantially exceeds the number of 
flights that can be operated at the airport without creating 
unacceptable delays. Commenters generally agreed that LaGuardia flights 
should be limited, and no commenter disputed the FAA's tentative 
conclusion under the proposed Order that the existing hourly limits 
should be maintained. The Port Authority, for example, stated, ``There 
is a lesson to be learned from the extreme congestion, bordering on 
gridlock, that took place after the enactment of AIR-21 `` LaGuardia 
most certainly would once again face crippling delays and congestion, 
if no form of operational limitation (or other demand management tool) 
is in place when the HDR expires at the end of the year.'' Port 
Authority Comments at 4. This Order accordingly adopts the proposed 
hourly limits on scheduled operations at LaGuardia.

Term of the Order

    By statute, the HDR expires as of January 1, 2007. Therefore, the 
FAA proposed the Order take effect on January 2, 2007. Multiple air 
carrier slot and slot exemption transactions expire on December 31, 
2006, as do the FAA limits on AIR-21 slot exemptions. If the effective 
date of January 2, 2007, were adopted, as proposed, carriers would have 
to enter into one-day slot transfers to bridge the break in dates or 
adjust their schedules to meet their slot holdings. In order to provide 
the most seamless transition between the HDR and AIR-21 slot exemption 
rules and this Order and to avoid additional administrative burdens for 
a one-day period, the Order will take effect on January 1, 2007.
    The FAA also is modifying the Order's termination date. Based on 
the original rulemaking schedule established for the Congestion 
Management Rule for LaGuardia, the FAA proposed that the Order 
terminate on September 30, 2007. Several air carriers, as well as ATA 
and RAA, commented on the proposed expiration date of the Order. They 
assert that the airlines would benefit if the duration of the Order 
were tied directly to the effective date of the final rule replacing 
the Order rather than the FAA establishing a fixed date, which could be 
subject to extension if the rule is not published as planned. 
Commenters also emphasized that the air carriers will need time to 
transition from one regulatory regime to another, and any transition 
should occur when the carriers make their seasonal schedule changes.
    The FAA recognizes that carriers require sufficient notice to plan 
schedules, market and sell tickets, and allocate aircraft, crew and 
airport resources. The FAA seeks to ensure that carriers are afforded 
adequate time to

[[Page 77856]]

minimize disruptions caused by implementation of a new rule at 
LaGuardia, and we recognize that adjusting to a new rule will be more 
difficult for carriers if the adjustment must occur in the middle of a 
scheduling season. Thus, as specifically requested by United, American, 
Northwest, and ATA, the Order will expire at the first change of 
scheduling season, as defined in 14 CFR, part 93, subpart B, occurring 
no less than 90 days after the issuance of a final rule.
    While the FAA is extending the term of this Order, the FAA 
recognizes the need to complete the rulemaking, because the final 
decision in that proceeding should establish a more rational basis for 
the regulation of flight operations at LaGuardia. The rulemaking 
process will give the FAA and the commenters a better opportunity to 
consider and develop a better long-term policy on LaGuardia operations.

Hours of the Cap and Hourly Limits

    The FAA proposed a limit of 75 scheduled operations per hour, the 
current cap on scheduled operations in effect under the slot rules. 
This limit is based on the optimal airport runway capacity of 81 
operations per hour, including unscheduled flights. The FAA is adopting 
this limit under the final Order, and as discussed later, will assign 
Operating Authorizations for arrival and departures on a 30-minute 
basis consistent with current practices. The FAA's Air Traffic 
Organization may adjust the half-hour arrival and departure totals 
within the hourly limit based on operating conditions.
    The FAA made a preliminary determination to apply the operational 
limits at LaGuardia beginning at 6:30 a.m. on weekdays rather than at 
the historic 6 a.m. start under the HDR. American and U.S. Airways 
requested the Order's limitations begin earlier, at 6 a.m., expressing 
concern that additional operations in the 6 to 6:29 a.m. half-hour, if 
unrestricted, might cause unacceptable delays. The FAA reviewed the 
potential delay scenarios with unconstrained operations before 6:30 
a.m. and agrees that starting the limitations at 6:30 a.m. each weekday 
would create a risk of serious delays. Although overnight aircraft 
parking positions are a constraint, there is the potential that greater 
utilization of existing overnight positions or the establishment of new 
ones might facilitate additional morning departures. Therefore, the FAA 
concludes that beginning the limits at 6 a.m. hour is warranted.\15\ 
For conformity, the FAA also will begin the limits for unscheduled 
operations at 6 a.m.
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    \15\ We recognize that the FAA's proposed rule for LaGuardia 
would begin limits at 6:30 a.m. on weekdays. The FAA expects to 
complete a similar review of capacity and possible delay 
implications in the context of that proceeding.
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    The FAA also considered the Port Authority's comment that the 
limits should apply on Saturday mornings before noon. We recognize that 
traffic levels have increased on Saturday mornings, but our review 
indicates that airport demand remains within the airport's capacity. 
The FAA will continue to monitor operations and congestion during the 
non-controlled hours at LaGuardia. Should a problem begin to 
materialize, the FAA believes that there will be sufficient time to 
adopt an amendment to this Order that would prevent undue congestion.

Assignment of Operating Authorizations \16\
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    \16\ Proposed Ordering Paragraph 4 stated that FAA would assign 
identification numbers to each Operating Authorization. These 
numbers would be used for administrative purposes such as 
identifying Operating Authorizations for trades and transfers and 
for usage monitoring. Under the HDR and the Chicago O'Hare final 
rule, the FAA also used randomly assigned identification numbers for 
potential withdrawal if capacity reduction is required to meet FAA's 
operational needs. While the FAA is not specifically adopting a 
similar withdrawal priority mechanism for the purposes of this 
Order, Operating Authorizations remain subject to FAA control and 
may be withdrawn to meet FAA's operational needs. Should capacity be 
reduced on an on-going basis, the FAA will adopt procedures to 
withdraw Operating Authorizations.
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    Under ordering paragraph 3 of the proposed Order, an Operating 
Authorization would be assigned to the air carrier that holds the 
equivalent slot or slot exemption authority, or if a non-air carrier 
holds such authority to the air carrier assigned the operational 
authority by the non-air carrier. The FAA will use the records of 
allocations under the High Density Rule or FAA slot exemptions rules as 
of January 1, 2007.
    The FAA has determined to adopt its proposal to assign Operating 
Authorizations only to carriers. The FAA believes that it can more 
easily and effectively administer the Operating Authorization regime if 
the operating rights are held only by carriers. Because this provision 
raised several questions of applicability, the FAA provides the 
following clarification.
    Each slot currently has a ``holder'' status and an ``operator'' 
status. The same air carrier might be both holder and operator of a 
slot (or Operating Authorization). In many cases, however, the air 
carrier holder transfers the operator status to another carrier on a 
one-for-one basis for a slot at another time, on a lease, or for 
operation by a regional/commuter affiliate air carrier. Under the HDR, 
some slots also are held by non-air carrier entities who arrange for a 
carrier to operate the slots. Historically, transfer of ``operator'' 
status from a non-air carrier holder to an air carrier has been for a 
multi-year period.
    If a carrier is using a slot ``held'' by another carrier, the 
Operating Authorization will be assigned to the carrier who actually 
holds the slot, i.e., the air carrier that has operational authority, 
assigned by the FAA, to conduct scheduled operations at LaGuardia on a 
particular day of the week, during a specific time of the day. In other 
words, carriers that currently ``hold'' slots or slot exemptions will 
continue to ``hold'' the equivalent Operating Authorizations under the 
Order even if those authorizations are currently leased or licensed to 
other airlines for scheduled flight operations at LaGuardia. If a non-
air carrier holds the slot, the FAA will assign the Operating 
Authorization to the carrier that was directly authorized by the non-
air carrier to operate the slot even if that carrier subsequently 
transferred the slot temporarily to another carrier under the HDR. As 
discussed under the following ``Secondary Market'' section, the FAA is 
prohibiting the buying and selling of Operating Authorizations; 
therefore, the ``holder'' status remains with the initially assigned 
carrier under this Order unless an Operating Authorization is returned 
or withdrawn by FAA for nonuse.
    In the case of AIR-21 slot exemptions allocated for service between 
LaGuardia and small hub and non-hub airports, the initial allocations 
were made to marketing air carrier groups including American/American 
Eagle, Delta/Delta Connection, Northwest/Northwest Airlink, and U.S. 
Airways/US Airways Express. The particular air carrier providing the 
service within those groups may have changed from time to time but the 
marketing carrier has remained the same. Therefore, in these cases, the 
FAA will assign Operating Authorizations to the primary marketing air 
carrier, i.e., American Airlines, Delta Air Lines, Northwest Airlines, 
and U.S. Airways.
    ATA asked whether the FAA would interpret an air carrier holder as 
including subsidiaries or affiliates of certificated air carriers that 
now hold slots. ATA provided the following example: Calair L.L.C., a 
wholly-owned subsidiary of Continental Airlines, currently holds the 
slots under the HDR that are operated by Continental. Calair

[[Page 77857]]

is not a certificated air carrier. As indicated in the proposed 
LaGuardia Order and similar rulemaking proceedings for Chicago O'Hare, 
the FAA believes that the assignment of operational authority under FAA 
adopted capacity limitations should be restricted to air carriers. In 
fact, the FAA did not assign slots to non-air carriers under the 
HDR'that was accomplished solely through carrier transactions in the 
secondary market. However, the FAA will look at the chain of ownership 
and see if there is a direct relationship between the affiliate or 
subsidiary to a certificated air carrier. Thus, in this example and 
under the provisions of this Order, Calair cannot receive the initial 
assignment of Operating Authorizations because it is not a certificated 
air carrier; rather the Operating Authorizations would be given to 
Continental because it would be the air carrier with the most direct 
relationship with Calair. In instances where the affiliate or 
subsidiary organization is owned by more than one air carrier, the air 
carriers will have to notify the FAA prior to the assignment of 
Operating Authorizations whom they want designated as the ``holder''.
    Alternatively, if a carrier is operating a slot that is held by an 
entity that is not a certificated carrier, and the holder has no direct 
relationship with a parent airline company, the Operating Authorization 
will be assigned to the carrier designated as the operator by the non-
air carrier holder under the HDR. This recognizes that a non-air 
carrier slot holder cannot operate the slots because actual flight 
operations must be by an air carrier. The FAA does not agree with 
certain commenters'claims that this allocation of Operating 
Authorizations will interfere with on-going business relationships. 
Carriers and other persons have long known that any rights held under 
the slot rules would end on December 31, 2006. The statutory 
termination date for the slot rules has meant that all financial and 
security interests in slots will inevitably end on that date, so no one 
could have reasonably expected that existing business and financial 
arrangements based on the slot rules could continue after this year. In 
any event, this Order is not intended to prohibit an air carrier from 
contractually arranging to pledge an interest in an Operating 
Authorization to a person, for use as collateral or otherwise, for the 
duration of the Order.
    The Republic Group asked that trusts be recognized under the Order. 
Specifically, we were asked to allow for Operating Authorizations to be 
held by trust so long as the beneficial ownership of the Operating 
Authorizations is held by an air carrier. The FAA is unsure how these 
types of trust operate in the market place, how they would differ from 
other arrangements whereby non-air carriers might seek to hold 
Operating Authorizations, what documentation might be required in order 
to meet any standards adopted by the FAA, and whether alternative 
agreements could readily be crafted to replace a trust. The Republic 
Group did not provide sufficient background information in order for us 
to make an educated decision distinguishing the requested beneficial 
trust scenario from other potential non-air carrier holders.

Secondary Market

    The slot rules have a buy-sell provision that allows carriers to 
buy and sell slots for consideration. The recently-adopted rules 
limiting operations at O'Hare permit buying and selling of operating 
rights (``arrival authorizations''), but only under a blind-auction 
procedure overseen by the FAA.\17\ Our proposal on long-term rules for 
LaGuardia proposed a similar blind-auction requirement but also asked 
for comment on whether carriers should be able to buy and sell 
operating rights directly, as they have been able to do under the slot 
rules. Our order, however, proposed to allow carriers only to engage in 
one-for-one trades of Operating Authorizations and to lease Operating 
Authorizations, but stated that any such trade or lease would terminate 
when the Order terminated.
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    \17\ 71 FR 51382 (August 29, 2006).
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    All air carriers and carrier associations, except for AirTran and 
ACAA, requested that the FAA permit the transfer and trading of 
Operating Authorizations without restriction. Commenters pointed to the 
FAA rules permitting such exchanges under the HDR and a recent 
amendment to the FAA Order on scheduling limitations at Chicago 
O'Hare.\18\ AirTran and ACAA, on the other hand, supported limits on 
the buying/selling and leasing of Operating Authorizations because they 
believe it would increase competition. At a minimum, they argued that 
any sales of Operating Authorizations must be made through a blind-
auction process similar to the procedures required under the secondary 
market for arrival authorization at Chicago O'Hare and the proposed 
rule for LaGuardia.
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    \18\ 71 FR 60600 (October 13, 2006).
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    The FAA has considered a secondary market that permitted the 
purchase and sale of Operating Authorizations. We have assessed whether 
we should allow leases, trades, and transfers to extend beyond the 
duration of the Order. We also have considered whether a blind transfer 
mechanism similar to the one adopted for Chicago O'Hare would address 
the concerns raised by ACAA and AirTran even if Operating 
Authorizations were not subject to expiring lives under the Order.
    The FAA has decided to permit leases and trades of Operating 
Authorizations provided that all Operating Authorizations revert no 
later than the expiration of this Order.\19\ Permanent sales, 
purchases, or transfers of Operating Authorizations will not be 
permitted. We also are clarifying that carriers may offer any form of 
consideration in the lease and trade transactions negotiated under this 
Order.
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    \19\ Because the FAA is adopting this Order without a fixed 
expiration date, the latest reversion date of any approved leases, 
trades, or other transfers will coincide with the Order's 
expiration.
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    This Order is not intended to create a long-term solution for 
LaGuardia congestion. Because the Operating Authorizations established 
under this Order should not create long-term rights at LaGuardia, the 
FAA does not wish to allow or encourage carriers to engage in 
transactions that assume that a carrier purchasing Operating 
Authorizations, or leasing them under a long-term lease, will acquire 
potential rights to continue operating flights after this Order is 
replaced by a new rule. The FAA determined that only through a limited 
secondary market permitting temporary transfers of Operating 
Authorizations could we protect various aspects of the proposed rule 
for LaGuardia, including the various proposals regarding small 
community access and the initial assignment of Operating 
Authorizations. The FAA is aware there is potential for changes to 
small community service levels during the life of the Order. Although 
the FAA proposed in the NPRM a category of Operating Authorizations 
reserved for use to small communities based on October 2006 services, 
we believe the likelihood of small community service change increases 
if we were to permit the permanent buying and selling of Operating 
Authorizations. While prohibiting the permanent or long-term transfer 
of Operating Authorizations under the Order does not prevent small 
community impacts, it does reduce the likelihood.

Minimum Use Requirements

    The FAA proposed that Operating Authorizations be subject to a 
minimum use requirement of 80 percent over a consecutive two-month 
reporting

[[Page 77858]]

period. Operating Authorizations not meeting this minimum would be 
withdrawn by the FAA and would be reallocated using a lottery. Most 
commenters supported an 80 percent use or lose requirement in order to 
ensure the use of the airport's capacity. No one opposed having a 
minimum-use requirement. The Port Authority, however, supported 
increasing the minimum usage to 90 percent. Otherwise the FAA would be 
allowing a carrier to keep an afternoon Operating Authorization that it 
used for only 4.8 flights per week when the slot rules now require that 
the equivalent slot be used for 5.6 flights per week.
    The FAA has decided to adopt the proposed 80 percent minimum usage 
requirement. Our experience in applying the HDR, as well as information 
on cancellations presented by the Port Authority, is that carriers 
typically operate slots well in excess of 80 percent. In particular, 
weekday slots under the HDR have historically been used more than 
weekend ones. We have no reason to believe carrier usage patterns will 
not continue for the duration of this Order. Therefore, absent any 
demonstrated changes in service patterns, we are reluctant to increase 
the usage requirement beyond the proposed 80 percent for the duration 
of this Order. We note that the FAA's minimum-use requirement in its 
O'Hare rules adopted the 80 percent level and that level is prescribed 
at slot-controlled airports throughout much of the world.
    United Airlines requested clarification on whether a carrier 
holding an Operating Authorization for scheduled service could use it 
for unscheduled service, and if so, report it on use or lose reports. 
The FAA clarifies that an air carrier may do as United seeks'operate 
charters and other unscheduled services and have it count toward 
minimum usage.
    The FAA also proposed that any Operating Authorizations withdrawn 
for failing to meet the minimum usage requirements would be reallocated 
by lottery using the procedures in 14 CFR 93.225. The FAA is adopting 
this procedure with one change to provide that any Operating 
Authorizations assigned by lottery to new entrants and limited 
incumbents under the Order would not automatically revert to the FAA at 
the expiration of this Order.\20\ A new entrant/limited incumbent 
carrier might choose not to initiate service under the Order if it 
could not continue that service after a final rule. This would be 
contrary to past FAA actions to promote new entry and competition.
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    \20\ The FAA recognizes this conflicts with the proposed rule 
for LaGuardia which uses slot holdings and operations during October 
1-6, 2006, as the base for initial assignment of Operating 
Authorizations at the effective date of the rule. Similarly, the FAA 
recognizes that a carrier that has an Operating Authorization 
withdrawn for nonuse during the duration of the Order should not be 
assigned an equivalent Operating Authorization at the effective date 
of the rule. The FAA will resolve these issues during our rulemaking 
proceedings.
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    Finally, the proposed Order provided that the Administrator could 
waive the 80 percent usage requirement in the event of a highly unusual 
and unpredictable condition beyond the control of the carrier and which 
exists for a period of 5 consecutive days or more. We adopt the 
proposal to permit usage waivers based on unusual circumstances.

Provisions for New Entrants and Limited Incumbents

    AirTran and ACAA requested several modifications to the proposed 
Order that would give limited incumbent air carriers and new entrants a 
better opportunity to obtain Operating Authorizations. As discussed 
elsewhere in this Order, they also urged the FAA to adopt other 
provisions, such as a blind-auction procedure for any sales of 
Operating Authorizations that would give airlines with a smaller 
presence at LaGuardia a better chance to compete with the airport's 
dominant carriers. Insofar as awarding additional Operating 
Authorizations to smaller carriers is concerned, ACAA asked that the 
FAA:
    <bullet> Withdraw ten percent of all slots held by carriers holding 
more than forty (40) slots and distribute those slots to limited 
incumbents operating aircraft with at least 110 seats;
    <bullet> Allow limited incumbent carriers that operated slots held 
by other carriers during the October 1-6, 2006, period for full-size 
aircraft service to small communities to continue using those slots 
until a final rule is issued.
    ACAA argued that its reallocation proposal was reasonable, because, 
among other things, the Order proposed to end the requirements that the 
major carriers use their slot exemptions only for flights operated to 
smaller communities with smaller aircraft.
    AirTran further asks that the FAA provide at least ten additional 
Operating Authorizations to each limited incumbent carrier to operate 
full-size jets. AirTran did not indicate how the FAA would create these 
authorizations while maintaining our cap on operations. Alternatively, 
they asked that we withdraw Operating Authorizations from other larger 
carriers. Senator Richard G. Lugar and Congresswoman Julia M. Carson 
supported an allocation of additional operating authority to permit 
AirTran to serve the LaGuardia/Indianapolis market.
    The reallocations proposed for by ACAA and AirTran incorporate 
elements of the NPRM that are currently subject to comment. The 
rulemaking, not this Order, is intended to establish flight 
restrictions for the long term at LaGuardia. In the rulemaking the FAA 
has proposed that Operating Authorizations expire in a periodic fashion 
and be subject to reallocation. The pending rulemaking will give 
interested persons a better opportunity to present their economic and 
policy views on potential reallocation and withdrawal issues, and 
enable the FAA to consider such matters more fully on the basis of a 
better record. The FAA accordingly prefers to consider in that 
proceeding whether LaGuardia operating rights should be reallocated.

Small Community Service

    The Order did not propose to designate Operating Authorizations 
that would be restricted to small community service or limited to 
smaller aircraft. The HDR air carrier and commuter slot categories 
would be merged into a single category of Operating Authorizations. 
Likewise, AIR-21 restrictions granting certain slot exemptions for 
services to small hub and non-hub airports using smaller aircraft would 
expire along with the HDR. Therefore, carriers could choose to adjust 
existing schedules and markets during the duration of this Order 
without regard to the market and aircraft restrictions that existed 
under the HDR. In addition to several proposals that urge the FAA to 
grant Operating Authorizations for service to specific communities, as 
discussed below, several commenters--AirTran, Colgan Air, ACAA, and the 
Port Authority--argued that the FAA should adopt provisions that would 
protect service to small community airports while the Order is in 
effect. Their comments included suggestions such as retaining the 
restrictions requiring AIR-21 slot exemptions to be used for flights to 
small hub and non-hub airports.
    The FAA shares the concerns about continuing LaGuardia service to 
smaller communities. The commuter slot pool under the HDR was 
established, in part, to recognize historic service to small 
communities and provide a level of protection for that service by 
restricting the use of the slots with larger turbojet aircraft 
typically used for larger communities. The AIR-21 slot exemption 
authority reflected congressional interest for increased

[[Page 77859]]

service opportunities to small communities seeking access to LaGuardia, 
and the FAA's lottery system for allocating those exemptions provided 
for an equitable distribution of exemptions between carriers serving 
small communities and new entrants.
    The pending rulemaking includes three options for ensuring that 
small communities will continue to have service to LaGuardia. The 
number and timing of operations conducted by air carriers to the 
various small hub and non-hub airports during October 1-6, 2006, would 
be the base period for establishing the small community pool under the 
final rule. We expect to receive comments under that proceeding as to 
the appropriate level of protection for small communities served from 
LaGuardia Airport. Therefore, the FAA did not propose a specific set-
aside for small communities under the Order since the appropriateness 
and make-up of such a designation was already the subject of a 
rulemaking that is intended to be more comprehensive and long-term. 
Some of the comments on the proposed Order suggest the FAA should 
continue the AIR-21 limits on small hub and non-hub airport slot 
exemptions while the comments on the NPRM are considered. Absent those 
restrictions, carriers would be free to use larger aircraft to serve 
larger size airports and might discontinue the small community services 
gained under AIR-21. While the FAA understands there is a potential for 
this to occur, the final rule, in all probability, would use for its 
initial assignment of Operating Authorizations a base period when 
various protections existed for small community service. Thus, carriers 
might alter service plans to small hub and non-hub airports during the 
Order only to face a final rule designating certain Operating 
Authorizations for historic small community service levels. Carriers 
may consider the benefits of schedule stability at smaller airports 
during the duration of this Order. Furthermore, the FAA agrees with the 
Port Authority's suggestion that it should monitor changes in small 
community service during the term of this Order. The FAA intends to do 
so.
    Finally, as indicated earlier, the FAA is not increasing the 
proposed hourly limits on flight operations in order to ensure that 
small communities would continue to have all of the service at 
LaGuardia that they have had in the past. Such an accommodation would 
increase delays and fail to meet the congestion management objectives 
of this Order. The airport's capacity limitations prevent us from 
authorizing additional flights, even when they would serve a worthy 
purpose.

Flights to Specific Communities

    Several commenters urged the FAA to adopt provisions that would 
protect service to small community airports while the Order is in 
effect. Newport News/Williamsburg Airport and Akron-Canton Airport each 
filed comments requesting that the FAA allocate two Operating 
Authorizations to each airport. They would allow AirTran to reinstate 
roundtrip flights that it can no longer operate because it does not 
hold or lease the necessary slots, and accordingly, will not be 
assigned operating authorizations for such operations under this 
Order.\21\
---------------------------------------------------------------------------

    \21\ The City of Canton, the Medina County Economic Development 
Corporation, and the Stark Development Board, Inc. among others also 
support the request.
---------------------------------------------------------------------------

    The FAA is unwilling in this Order to create additional Operating 
Authorizations to ensure that specific communities obtain additional 
service to LaGuardia. While the FAA understands the desire of the 
Akron-Canton and Newport News/Williamsburg groups to maintain the 
recent air service levels between LaGuardia and their respective 
airports, the FAA has not used congestion management rules to provide 
service to specific communities. Like a slot under the HDR, an 
Operating Authorization under the Order is the operation authority 
assigned by the FAA to a carrier to conduct a scheduled arrival or 
departure operation and has no specific city-pair limitations. To honor 
the request made by these airports would be tantamount to a radical 
change in the congestion management program. Further, unlike the 
situation at Ronald Reagan Washington National Airport, where the 
Department of Transportation is directed to grant certain slot 
exemptions for ``selected routes'' beyond the perimeter and to airports 
within the perimeter,\22\ there is not such statutory basis for the FAA 
to require that a carrier operate to a certain market from LaGuardia. 
The FAA therefore declines to do adopt the suggestion of Akron-Canton 
and Newport News/Williamsburg.
---------------------------------------------------------------------------

    \22\ 49 U.S.C. 41718 (a) and (b).
---------------------------------------------------------------------------

Unscheduled Operations

    In addition to limits on scheduled operations, the FAA proposed 
adopting limits for unscheduled operations to ensure that demand is 
spread reasonably throughout the day. The FAA proposed the same hourly 
limits that applied under the HDR using similar reservation procedures 
described in FAA Advisory Circular 93-1, ``Reservations for Unscheduled 
Operations at High Density Traffic Airports.'' The FAA's Airport 
Reservation Office at the David J. Hurley Air Traffic Control System 
Command Center would manage the reservation process using the existing 
e-CVRS system.
    No comments were received opposing the establishment of the 
reservation requirements and proposed procedures for allocating 
reservations for unscheduled flights. United Airlines commented that 
the number of hourly reservations established for unscheduled 
operations conflicts with other stated agency objectives of ensuring 
efficient utilization of limited airport resources and increasing 
passenger throughput. We proposed the historic set aside of six 
reservations for unscheduled operations and adopt this allocation under 
this final Order, because it is consistent with the treatment of the 
scheduled operations during the time this order will be temporarily in 
place. As a result, the FAA is adopting the proposed allocation for 
unscheduled flights.
    United Airlines also requested clarification that it could conduct 
charters and other unscheduled operations using its Operating 
Authorizations for scheduled service. We agreed and addressed United's 
comment in the section on Minimum Use.
    The FAA is adopting the proposed limits and reservation procedures 
with minor editorial changes. Information on procedures for obtaining 
the appropriate reservations for unscheduled flights will be available 
prior to the effective date of this Order via the Internet on the FAA's 
Web site at http://www.fly.faa.gov/ecvrs.

III. Conclusion

    On September 11, 2006, the FAA issued a proposed Order, which 
solicited written views on the FAA's tentative determination to place 
temporary limitations on flight operations at LaGuardia Airport. After 
considering the responses, the FAA has determined to issue a final 
Order adopting operating limitations at New York LaGuardia Airport.

A. Scheduled Operations

    With respect to scheduled operations at LaGuardia:
    1. The final Order governs scheduled arrivals and departures, 
except helicopters, at LaGuardia from 6 a.m. through 9:59 p.m., Eastern 
Time, Monday through Friday and from 12 noon through 9:59 p.m., Eastern 
Time, Sunday. Seventy-five (75) Operating

[[Page 77860]]

Authorizations are available per hour and will be assigned by the FAA 
on a 30-minute basis.
    2. The final Order takes effect on January 1, 2007, and will expire 
at the first change of scheduling season, as defined in 14 CFR, part 
93, subpart B, occurring no less than 90 days after the issuance of a 
final rule regulating congestion at LaGuardia.
    3. The FAA will assign operating authority to conduct an arrival or 
a departure at LaGuardia during the affected hours to the air carrier 
that holds equivalent slot or slot exemption authority under the High 
Density Rule or FAA slot exemption rules as of December 31, 2006; to 
the primary marketing air carrier in the case of AIR-21 small hub/non-
hub airport slot exemptions; or to the air carrier operating the 
flights as of December 31, 2006, in the case of a slot held by a non-
air carrier. If the slot is held by a subsidiary or affiliate of an air 
carrier, the FAA will assign the operating authority to the carrier 
that has the most direct relationship with that non-air carrier holder. 
The FAA will not assign operating authority under the final Order to 
any person or entity other than a certificated U.S. or foreign air 
carrier with appropriate economic authority to conduct scheduled 
passenger service and FAA operating authority under 14 CFR part 121, 
129, or 135. The Chief Counsel of the FAA will be the final decision 
maker regarding the initial assignment of Operating Authorizations.
    4. For administrative tracking purposes only, the FAA will assign 
an identification number to each Operating Authorization.
    5. An air carrier can lease or trade an Operating Authorization to 
another carrier for any consideration, not to exceed the duration of 
the final Order. Notice of a trade or lease under this paragraph would 
be submitted in writing to the FAA Slot Administration Office, 
facsimile (202) 267-7277 or e-mail <a href="/cdn-cgi/l/email-protection#ac9b81edfbed81ffc0c3d8cdc8c1c5c2eccacdcd82cbc3da"><span class="__cf_email__" data-cfemail="d8eff5998f99f58bb4b7acb9bcb5b1b698beb9b9f6bfb7ae">[email protected]</span></a>, and must 
come from a designated representative of each air carrier. The air 
carriers are required to receive written confirmation from the FAA 
prior to operating under the traded operating authority.
    6. Every air carrier holding an Operating Authorization must 
forward in writing to the FAA Slot Administration Office a list of all 
Operating Authorizations held by the carrier along with a listing of 
the Operating 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. Any 
Operating Authorization not used at least 80 percent of the time over a 
two-month period will be withdrawn by the FAA. The FAA Administrator 
can waive the 80 percent usage requirement 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.
    7. In the event that Operating Authorizations are withdrawn for 
non-use, surrendered to the FAA or are unassigned, the FAA will 
determine whether any of the available Operating Authorizations should 
be reallocated. If so, the FAA will conduct a lottery using the 
provisions specified under 14 CFR 93.225. The FAA may retime an 
Operating Authorization prior to reallocation in order to address 
operational needs. When the final Order expires, any Operating 
Authorizations reassigned under this paragraph, except those assigned 
to new entrants or limited incumbents, will revert to the FAA for 
reallocation according to the reallocation mechanism prescribed in the 
final rule that succeeds the final Order.
    8. The FAA will enforce the final Order through an enforcement 
action seeking a civil penalty under 49 U.S.C. 46301(a). An air carrier 
that is not a small business as defined in the Small Business Act, 15 
U.S.C. 632, would be liable for a civil penalty of up to $25,000 for 
every day that it violates the limits set forth in the final Order. An 
air carrier that is a small business as defined in the Small Business 
Act would be liable for a civil penalty of up to $10,000 for every day 
that it violates the limits set forth in the final Order. The FAA also 
could file a civil action in U.S. District Court, under 49 U.S.C. 
46106, 46107, seeking to enjoin any air carrier from violating the 
terms of the final Order.

B. Unscheduled Operations \23\
---------------------------------------------------------------------------

    \23\ Unscheduled operations are operations other than those 
regularly conducted by an air carrier between LaGuardia and another 
service point. Unscheduled operations include general aviation, 
public aircraft, military, charter, ferry, and positioning flights. 
Helicopter operations are excluded from the reservation requirement. 
Reservations for unscheduled flights operating under visual flight 
rules (VFR) are granted when the aircraft receives clearance from 
air traffic control to land or depart LaGuardia. Reservations for 
unscheduled VFR flights are not included in the limits for 
unscheduled operators.
---------------------------------------------------------------------------

    With respect to unscheduled flight operations at LaGuardia:
    1. The final Order applies to all operators of unscheduled flights, 
except helicopter operations, at LaGuardia from 6 a.m. through 9:59 
p.m., Eastern Time, Monday through Friday and from 12 noon through 9:59 
p.m., Eastern Time, Sunday.
    2. The final Order takes effect on January 1, 2007, and will expire 
at the first change of scheduling season occurring no less than 90 days 
after the issuance of a final rule regulating congestion at LaGuardia.
    3. No person can operate an aircraft other than a helicopter to or 
from LaGuardia unless the operator has received, for that unscheduled 
operation, a reservation that is assigned by the David J. Hurley Air 
Traffic Control System Command Center's Airport Reservation Office 
(ARO). Additional information on procedures for obtaining a reservation 
is available via the Internet at http://www.fly.faa.gov/ecvrs.
    4. Six (6) reservations are available per hour for unscheduled 
operations at LaGuardia. The ARO will assign reservations on a 30-
minute basis.
    5. The ARO receives and processes all reservation requests. 
Reservations are assigned on a ``first-come, first-served'' basis, 
determined as of the time that the ARO receives the request. A 
cancellation of any reservation that will not be used as assigned is 
required.
    6. Filing a request for a reservation does not constitute the 
filing of an instrument flight rules (IFR) flight plan, as separately 
required by regulation. After the reservation is obtained, an IFR 
flight plan can be filed. The IFR flight plan must include the 
reservation number in the ``remarks'' section.
    7. Air Traffic Control will accommodate declared emergencies 
without regard to reservations. Non-emergency flights in direct support 
of national security, law enforcement, military aircraft operations, or 
public-use aircraft operations will be accommodated above the 
reservation limits with the prior approval of the Vice President, 
System Operations Services, Air Traffic Organization. Procedures for 
obtaining the appropriate reservation for such flights are available 
via the Internet at http://www.fly.faa.gov/ecvrs.
    8. Notwithstanding the limits in paragraph 4, if the Air Traffic 
Organization determines that air traffic control, weather, and capacity 
conditions are favorable and significant delay is not likely, the FAA 
can accommodate additional reservations over a specific period. Unused 
Operating Authorizations can also be temporarily made available for 
unscheduled operations. Reservations for additional operations are 
obtained through the ARO.

[[Page 77861]]

    9. Reservations cannot be bought, sold, or leased.

    Issued in Washington, DC, on December 13, 2006.
Rebecca Byers MacPherson,
Assistant Chief Counsel for Regulation.
[FR Doc. 06-9863 Filed 12-20-06; 3:29 pm]
BILLING CODE 4910-13-P


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