ORDER 2012
- 2
- 21 Served: February 24, 2012 

### UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

ESTABLISHMENT OF SLOT EXEMPTION PROCEEDINGS AT RONALD REAGAN WASHINGTON NATIONAL AIRPORT PURSUANT TO 49 U.S.C. § 41718 Docket DOT
- OST
- 2012
- 0029

ORDER On February 14 , 2012, President O bama signed into law the FAA Modernization and Reform Act of 2012 (FAA 2012), P ub

. L. No. 112

- 9 5

. Section 414 of FAA 2012 directs the Department to grant a total of 16 additional slot 1 exemptions at Ronald Reagan Washington National Airport (DCA) for nonstop service between DCA and airport s beyond the 1,250

- mile perimeter

. There are two categories for these new exemptions: eight are reserved for service to be provided by new entrant and limited incumbents, while the other eight are reserved for non

- l imited incumbent carriers up to a maximum of two each, the operation of which are condition ed upon the carrier’s discontinuing use of an equivalent number of existing slot s currently used for service between DCA and a large hub airport within the 1,250 mile perimeter of DCA

. 2 By this Order , we are requesting applications from new entrant and limited incumbent carriers 3 for the eight additional beyond

- perimeter slot exemptions made available under 49 U

. S

. C

. § 41718(g)(2). Because Section 414 requi res the Department to grant the exemptions not later than 90 days after enactment of FAA 2012, we must establish an expedited schedule for the application process. Accordingly, c ompleted applications for any of these eight exemptions must be filed in Docket DOT
- OST
- 2012
- 0029 b y March 12 , 2012 , and comments with respect to any such application are due March 27 , 2012

. NOTE: Docket DOT
- OST
- 2000
- 7181 was earlier established for beyond
- perimeter DCA slot exemption matters. For this proceeding, a new docket has been established and filings sh all be directed t o DOT
OST
- 2012
- 0029
. As to the remaining eight slot exemptions, FAA 2012 directs the Secretary to make these available to incumbent carriers qualifying for status as a non

- limited incumbent carrier at DCA as of the date of enactment of the statute. 4 We have determined that four air carriers meet that description : American Airlines, Delta Air Lines, United Air L ines, and US Airways. Under FAA 2012, each of these carriers is entitled to operate up to a maximum of 2 of the newly authorized exemptions subject to the conditions set forth in 49 U.S.C. § 41718(g)

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1 A slot is a reservation for an instrument flight rule takeoff or landing. Therefore, two slots are required to operate a round trip. 49 U.S.C. § 41714(h)(4). A slot exemption is an exemption from the slot limitations in the Federal Aviation Administrat ion’s High Density Rule, 14 CFR Part 93, subparts K and S. 2 The first eight are governed by the conditions set out under 49 U.S.C. § 41718(g)(2) as added by section 414, while the second eight are governed by the conditions set out in 49 U

. S

. C

. § 41718(g) (3). 3 See also 14 CFR §§ 93.213 (a)(5), 93.223 (c), and 93.225 (h), and 49 U.S.C

. § 41714(h) , as amended by FAA 2012

. 4 49 U.S.C. § 41718(g)(3). 5 Under 49 U.S.C. § 41718(g)(3)

- (5 ), the use of the exemptions are conditioned upon, among other things, that the incumbent carrier (1) discontinue the use of a slot for service between DCA and a large hub airport within the perimeter and operate, in place of such- 2

- We therefore grant these exemptions by this Order ; t he operation of these exemptions are subject to these conditions as well as to all other applicable requirements in 14 CFR subparts K and S, including the slot use or lose provisions

. With the creation of these sixteen beyond

- perimeter DCA slot exempt ions, a total of 40 take

- offs or landin g s at DCA for service beyond 1,250 m il es have been authorized by law. 6
This Order provides information to U.S. and Canadian air carriers regarding these exemptions. Recent Developments FAA 2012, among other things, made several significant changes to laws regarding slot and slot exemptions at DCA, and we briefly summarize the most significant changes below. First, as discussed above, the legislation directs the Secretary to grant 16 additional beyond

- perimeter slot exemptions. Of those, eight are to be granted to limited incumbent/new entrant carriers to serve airports beyond the 1,250

- mile perimeter, with the other eight reserved for non
- limited incumbents to trade

- in up to two inside

perimeter slots for two beyond

- perimeter slot exemptions

. Second, three new criteria (E, F and G) have been added to those already in place for the Secretary to consider in deciding which FAA 2012 beyond

- perimeter exemptions to grant to new entrant and limited incumbent carriers

. These are : to enhance options for nonstop travel to and from the beyond

- perimeter airports that will be served; to have a positive impact on the overall level of competition in the markets that will be served; and t o produce public benefits, including lower fares, higher capacity, and a variety of service options. Below , under “Application Process , ” are the seven criteria verbatim from FAA 2012. Third, none of the FAA 2012 beyond

- perimeter slot exemptions may be used to operate multi

- aisle or widebody aircraft.
Fourth , departures conducted by new entrants and limited incumbents utilizing the eight beyond

- perimeter DCA slot exemptions (as well as previously authorized beyond

- perimeter and within

- perimeter slot exemptions) may not be scheduled between the hours of 10:00 p.m. and 7:00 a.m.
Fifth , operations conducted utilizing DCA slot exemptions may not increase the total number of operations at DCA in any 1

- hour period betw een 7:00 a.m. and 9:59 p.m. by more than five operations. The existing hourly limit for operations conducted utilizing slot exemptions is three

. Lastly , Section 414(c) of FAA 2012 amended the definition of a L imited Incumbent C arrier by increasing the threshold of slots held or operated by an air carrier or commuter carrier, not including slot exemptions, slots

service, service between DCA and an airport located beyond the perimeter; (2) file a notice of intent with the Office of the Secretary of Transportation specifying the market to be served and the service to be discontinued; (3) not operate a multi

- aisle or widebody aircraft in con ducting such beyond

- perimeter service; (4) not transfer the rights to its beyond

- perimeter exemptions pursuant to Section 41714(j) , and (5) if utilizing an exemption under this section for an arrival permitted between the hours of 10:01 p.m. and 11:00 p.m. , discontinue use of an existing slot during the same time period the arrival exemption is operated

. 6 Of these 40 beyond

- perimeter slot exemptions, 32 will have resulted in a net increase in DCA operations. The eight newly

- created slot exemptions for non

- limited incumbents correspond to a discontinuance of eight existing slot allocations. 49 U.S.C. § 41718(a), added by Section 231 of AIR

- 21, provided that the Secretary shall, subject to certain findings, grant 12 slot exemptions to air carriers for the p rovision of air transportation outside the 1,250

- mile perimeter established for air transportation under 49 U.S.C. § 49109. By Order 2000

- 7

- 1, Order 2001

- 6

- 20, and Order 2002

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- 20, the Department fully allocated these 12 beyond

- perimeter slot exemptions. Vision 100 directed the Department to distribute an additional 12 DCA beyond

- perimeter slot exemptions. By Order 2004

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- 1, the Department fully allocated those 12 additional beyond

- perimeter slot exemptions.- 3

- operated under certain fee

- for

- service arrangement s for another carrier, or slots held under a sale and license

back financing arrangement with another carrier, from f ewer than 20 to fewer than 40. 7 Application Process for New Entrant and Limited Incumbent Air Carriers The Department will consider applications and grant a total of eight DCA beyond

- perimeter slot exemptions from new entrant and limited incumbent air carriers as made available by FAA 2012

. 8 The statutory criteria 9 require that the granted exemptions will : ( A ) provide air transportation with domestic network benefits beyond the 1,250 mile perimeter; ( B ) incre ase competition in multiple markets; ( C ) not reduce travel options for communities served by small hub airports and medium hub airports within the 1,250 mile perimeter; ( D ) not result in meaningfully increased travel delays ; (E) enhance options for nonstop travel to and from the beyond

perimeter airports that will be served; (F) have a positive impact on the overall level of competition in the markets that will be served; or (G) produce public benefits, including lower fares, higher capacity, and a variety of service options

. Applications for the eight beyond

- perimeter slot exemptions must utilize single

- aisle and narrowbody aircraft and must be filed in Docket DOT

- OST

- 2012

- 0029 by March 12 , 2012 . C omments with respect to any timely filed request for the slot exemptions must be filed by March 27 , 2012 . We will also require applicants to submit a schedule for their pro posed operations, including takeoff and landing times at DCA. In light of the limited time afforded by statute, the Department intends to proceed directly to a final decision regarding these eight exemptions. Exemptions Granted to Incumbent Carriers We hereby grant to incumbent carriers qualifying under 49 U.S.C. § 41718(g)(3) up to two exemptions for beyond perimeter use. The e xercise of the exemptions is subject to the conditions set forth in the statute, and as required by 49 U.S.C. § 41718(g)(3)

- (4), the incumbent carriers must file a notice of intent with the Office of the Secretary of Transportation that specifies the beyond perimeter destination to be served and the slots the carrier will discontinue using to serve a large hub airport located w ithin the perimeter. The carriers should file their notices of intent in Docket DOT

- OST

- 2012

- 0029

. Incumbent carrie rs are to contact the Federal Aviation Administration (FAA) Slot Administration Office for approval of the substitution and flight times. Scheduling Priority
As a fina l matter, we note that Section 414 (b) of FAA 2012 allows us to assign two additional slot exemption s per one hour period (for a total of five ) , an increase from the three per hour authorized in Vision 100

- Century of Aviation Reauthorization Act, P.L. 108

- 176

. We anticipate multiple requests for the same slot periods, and there fore, may not be able to accommodate all requests for slot exemption times. There are 15 h ourly periods beginning at 7 : 00 a.m. and ending at 9:59 p.m. , and all slot exemptions must fit into those 75 slot times. In applying for specific times, applicants granted slot exemptions may be asked to specifically justify their requests. Applicants should keep these constraints in mind prior to submitting any proposals and should understand that these slot

- time constraints may cause some proposals not to be viabl e. In coordination with FAA’s Slot Administration Office, we shall assign slot times corresponding with the authority granted in these proceedings , and in accordance with the requirements of FAA 2012, in a noti ce subsequent to our decision.

7 See 49 U.S.C. § 41714(h)(5). 8 New entrant air carriers and limited incumbent air carriers may apply for any number of these eight slot exemptions. 9 See Section 414 of FAA 2012

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Environmental Issu es Although 49 U.S.C. § 41718(e) specifically exempts our action here from review under the N ational Environmental Policy Act, 10 we remain sensitive to the environmental impact of increased operations at DCA. As required by statute, DCA slot exemption s must be operated by Stage 3 compliant aircraft, and these m ay not be multi

- aisle or widebody in type. Also, under 49 U.S.C. § 47117(e), the Department will give DCA priority in making grants for airport noise compatibility planning and programs.
This O rder is issued under authority delegated in 49 CFR 1.56(a).

ACCORDINGLY , 1. U.S. and Canadian a ir carriers qualifying as new entrants or limited incumbents under 49 U.S.C. § 41718(h) (3) and (5), as amended by FAA 2012, that are interested in applying for the eight additional beyond

- perimeter slot exemptions made available under 49 U.S.C. § 41718(g)(2) are directed to file their applications in Docket DOT

- OST

- 2012

- 0029 by March 12 , 2012

. 2. Comments with respect to any timely filed request are due March 27 , 2012

. 3

. The Department grants two exemptions from 14 CFR Part 93, Subparts K and S, to each of American Airlines, Delta Air Lines, United Air Lines, and US Airways, incumbent carriers qualifying under 49 U.S.C. § 41718(g)(3) for beyond perimeter use. The exercise of the exemptions is subject to the conditions set forth in 49 U.S.C. § 41718(g), including that the incumbent carrier (a) discontinue the use of a slot for service between DCA and a large hub airport within the perimeter and operate, in place of such service, service between DCA and an airp ort located beyond the perimeter; (b) file a notice of intent with the Office of the Secretary of Transportation specifying the market to be served and the service to be discontinued; (c) not operate a multi

aisle or widebody aircraft in conducting such be yond

- perimeter service; (d) not transfer the rights to its beyond

perimeter exemptions pursuant to 49 U.S.C . § 41714(j) ; and (e) if utilizing an exemption under this section for an arrival permitted between the hours of 10:01 p.m. and 11:00 p.m., discontin ue use of an existing slot during the same time period the arrival exemption is operated

.

The incumbent carriers should file their notices of intent in Docket DOT

- OST

- 2012

- 0029

.

4. We direct i ncumbent carriers acting pursuant to the exemptions granted in paragraph 3 to contact the Federal Aviation Administration (FAA) Slot Administration Office for approval of the substitution and flight times.
5

. None of the FAA 2012 beyond

- perimeter slot exemptions may be used to operate multi

- aisle or widebody aircraft. 6. An air carrier granted a beyond

- perimeter slot exemption under FAA 2012 is prohibited from transferring the rights to its beyond

- perimeter exemptions pursuant to 49 U.S.C. § 41714(j).

10 Section 41718(e) states, “ Neither the request for, nor the granting of an exemption, under this section shall be considered for purposes of any Federal law a major Federal action significantly affecting the quality of the human environment.”- 5

- 7. The authority granted under these exemptions is subject to all of the other requirements delineated in 14 CFR Part 93, Subparts K and S, including the slot use or lose pro visions.
8

. This Order is effective immediately, and shall remain in effect until further order of the Departme nt.
9 . We may amend, modify, or revoke this Order at any time and without hearing.
10

. We shall serve a copy of this Order on U.S. and Canadian air carriers , the Metropolitan Washington Airports Authority, and the FAA’s Slot Administration Office.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation and International Affairs

Dated: February 24 , 2012

(SEAL)

An electronic version of this document will be available on the World Wide Web at: http:// www.regulations.gov