21146 Federal Register / Vol. 77, No. 68 / Monday, April 9, 2012 / Notices 

mail (separately or in combination) 

between any point or points in Japan 

and any point or points in the United 

States and between any point or points 

in the United States and any point or 

points in any third country; and, (iii) 

other charters. 

Renee V. Wright, 

Program Manager, Docket Operations, 

Federal Register Liaison. 

[FR Doc. 2012–8453 Filed 4–6–12; 8:45 am] 

BILLING CODE 4910–9X–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

[Docket No. FAA–2011–0361] 

Policy and Procedures Concerning the 

Use of Airport Revenue: Petition of the 

Clark County Department of Aviation 

to Use a Weight-Based Air Service 

Incentive Program 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Partial granting of petition; 

Disposition of comments. 

SUMMARY: On April 14, 2011, the FAA 

issued a Notice in the Federal Register 

(76 FR 21,420, April 15, 2011) seeking 

comment on a petition submitted by 

Clark County Department of Aviation 

(CCDOA), owner and operator of Las 

Vegas McCarran International Airport 

(Airport). The petition requested a 

determination by the Federal Aviation 

Administration (‘‘FAA’’) that its 

proposed air service incentives program 

(‘‘Incentives Program’’), intended to 

induce increases in landed weight by air 

carriers at McCarran International 

Airport (the ‘‘Airport’’ or ‘‘LAS’’) in Las 

Vegas, is consistent with Federal law 

and policies on the use of airport 

revenue and on airport rates and 

charges. In its petition, CCDOA 

proposed the FAA amend its 

interpretation of ‘‘new air service’’ to 

include ‘‘increases in landed weight.’’ 

The FAA has interpreted these 

policies, and the underlying Federal 

statutes, to permit a temporary waiver of 

standard airport fees for carriers that 

provide new air service at an airport, as 

an incentive to begin or expand air 

service. In September 2010, the agency 

issued the Air Carrier Incentive Program 

Guidebook to provide specific guidance 

to airport operators on the use of air 

service incentive programs. That 

guidance restates FAA’s previously 

issued opinions regarding what 

constitutes new service as characterized 

in the FAA’s Policy and Procedures 

Concerning the Use of Airport Revenue 

(Revenue Use Policy) (64 FR 7,696 (Feb. 

16, 1999)). Since the inception of the 

Revenue Use Policy in 1999, the FAA 

has defined new air service as: (a) 

Service to an airport destination not 

currently served, (b) nonstop service 

where no nonstop service is currently 

offered, (c) new entrant carrier, and/or 

(d) increased frequency of flights to a 

specific destination. The FAA’s 

interpretation has not permitted an 

airport operator to offer an incentive 

program that provides discounts based 

on increased aircraft weight or an 

increased number of seats on existing 

flights. CCDOA proposes an incentive 

program that would reward air carriers 

for an increase in landed weight. An 

increase in landed weight could result 

from an increase in the size of aircraft 

used, or ‘‘upgauging,’’ on existing 

flights, consolidation of existing flights, 

and/or added flights. CCDOA requests 

that the FAA amend existing guidance 

to make clear that its proposed incentive 

plan is consistent with Federal law and 

existing agency policies on the use of 

airport revenue and on airport rates and 

charges. 

This notice responds to the comments 

received and grants a portion of the 

petition as written. 

ADDRESSES: Comments received on the 

petition [identified by Docket Number 

FAA–2011–0361] are available for 

public review in the Docket Operations, 

Room W12–140 on the ground floor of 

the West Building, 1200 New Jersey 

Avenue SE., Washington, DC 20590, 

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

through Friday, except Federal holidays. 

Also, you may review public dockets on 

the Internet at http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Kevin Willis, Manager, Airport 

Compliance Division, ACO–100, Federal 

Aviation Administration, 800 

Independence Avenue SW., 

Washington, DC 20591, telephone (202) 

267–3085; facsimile: (202) 267–5257. 

SUPPLEMENTARY INFORMATION: 

I. The Petition 

On February 14, 2011, the Federal 

Aviation Administration (FAA) received 

a letter and a 13-page memorandum 

from counsel for CCDOA, the owner and 

operator of McCarran International 

Airport in Las Vegas, Nevada, 

requesting a determination from the 

FAA that CCDOAs proposed air service 

incentive program does not conflict 

with Federal obligations 

In brief, CCDOA stated that the 

‘‘objective of the proposed Incentives 

Program is to provide an incentive at the 

margin to promote additions to 

scheduled air service seat capacity.’’ 

The program provides, subject to certain 

terms and exceptions, that: 

* * * all monthly scheduled service 

landed weight, by airline, in excess of that 

operated in the same month of the prior year, 

would receive a credit of up to 100% of the 

landing fee (currently $2.26 per 1,000 pounds 

of landed weight) paid on the incremental 

landed weight. 

In addition to new flights, the credit 

would apply to existing flights for 

which an increase in aircraft size 

resulted in an increase in landed 

weight. 

In its petition, CCDOA makes the 

argument that upgauging should be an 

eligible incentive because it is 

considered new service. CCDOA reasons 

in its petition, ‘‘Air travelers, as well as 

airports, reasonably regard an upgrade 

in the size of equipment used on a flight 

to constitute ‘‘new service(s).’’ CCDOA 

stated the Revenue Use Policy does not 

provide for nor does it exclude 

upgauging as a form of new air service. 

Finally, the CCDOA argued the 

proposed petition is not contradictory to 

statute, grant assurance obligations, and 

the FAA’s Revenue Use Policy. 

The FAA published the Petition and 

sought comments on it prior to issuing 

a determination. 

II. Discussion 

A. Summary of Comments 

In addition to the CCDOA’s 

comments, seven comments were 

received in the docket. Five comments 

generally supported the petition; two 

opposed it. The four airport operator 

commenters generally supported the 

petition or greater flexibility for 

operators to design air service incentive 

programs. Of the two airline 

commenters, ATA opposed the petition, 

while British Airways supported it. One 

citizen opposed the petition because it 

would not result in savings for 

passengers. 

Comments in Support of the Petition 

In its petition, the CCDOA states it is: 

concerned with a temporary, but 

precipitous, drop in air service at (LAS) that 

has not rebounded as quickly as at other 

airports. Landed weight at LAS was down 

approximately 17% from Calendar Year 2007 

through the 12-month period ending in 

September 2010. While some individual 

carriers have expanded operations, these 

initiatives have fallen well short of restoring 

McCarran operations to previous levels. This 

drop-off in operations has meant that the 

Airport’s airside and terminal facilities are 

not optimally utilized. The shortfall in traffic 

has also caused a significant drop in Airport 

revenue, particularly non-aeronautical 


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revenue. While load factors at LAS are high, 

the service cutbacks by the carriers are 

reflected in a drop in passengers. On average, 

the Airport generates approximately $9 per 

passenger in non-aeronautical revenue (rental 

cars, concessions, taxi fees, gaming, etc.). 

Because of the decline in passenger volume, 

annual revenue from these sources declined 

by approximately $20 million or 10% over a 

two year period from FY 2008 to FY 2010. 

Additionally, the CCDOA stated the 

proposed program is needed to: 

to help induce expansion in air carrier 

operations, and thus promote effective 

utilization of airside and terminal facilities 

and generate additional passengers that, in 

turn, increase non-airline revenues that can 

be applied to further reduce air carrier 

costs(.) (T)he Department has developed the 

Incentive Program to provide temporary 

relief from fees for increased air service to 

LAS. The Department views the downturn in 

operations as a short-term anomaly, and the 

proposed incentives will be discontinued 

when traffic is back on track. 

In addition to the Petitioner, two 

other airport operators generally 

supported the petition or greater 

flexibility to allow operators to design 

air service incentive programs. The 

Wayne County Airport Authority 

(WCAA) supported the petition in full. 

The WCAA agreed with Petitioner that 

the proposal meets the requirements of 

federal law and grant agreements, is not 

barred by law or other FAA policies, is 

not preempted by the Airline 

Deregulation Act (ADA), and is not 

discriminatory unless one carrier 

obtains the incentive and another is 

denied the incentive. WCAA also 

supported Petitioner’s assertion that the 

FAA should interpret ‘‘new service’’ to 

include upgauge flights. 

The City of St. Louis, owner and 

operator of Lambert-St. Louis 

International Airport (STL) generally 

supported the CCDOA’s Petition to use 

weight-based incentive programs. STL 

cites its own air carrier use agreement, 

which allows for mitigation of landing 

fees with increased levels of total 

landed weight at the airport. It is 

important to note that the STL rate 

structure differs from the Petition 

because is not an exception nor an 

incentive but the basic fee structure 

agreed to by all carriers. Also, the trigger 

for STL’s program is total landed weight 

at the airport, not an individual carrier’s 

landed weight. However, STL asserts 

the justification is the same as that in 

the Petition and supports a weightbased incentive permitted by federal 

law. 

The Airport Council International, 

North America (ACI–NA), supported the 

petition and urged FAA to increase 

‘‘flexibility in air service incentive 

programs.’’ ACI–NA did not believe the 

proposal was discriminatory and did 

not believe it conflicted with Federal 

law. 

Although the American Association of 

Airport Executives (AAAE) did not 

specifically state it supported the 

petition, it did comment that airports 

should have maximum flexibility to 

structure incentive plans to attract and 

retain air service. The FAA views its 

comments as generally in favor of 

allowing changes to the FAA’s 

definitions of the type of service that 

qualify. 

Finally, the foreign air carrier, British 

Airways expressed support for the 

petition stating that such incentives will 

encourage carriers to consider increased 

capacity and/or frequency. 

Comments Not Supporting the Petition 

The Air Transport Association urged 

the FAA to deny the petition stating the 

petition lacked a policy rationale, since 

the incentive plan is designed only to 

increase concession revenue from 

passengers, not to obtain new air 

service. ATA’s also argued that service 

with more seats is not currently defined 

as ‘‘new service,’’ and should not be so 

defined, because it is not in itself new 

entry into new markets. ATA discounts 

the CCDOA’s references to FAA’s prior 

determinations in Wichita and Port of 

Portland, and claims these documents 

no not address the question whether 

incremental increase in landed weight 

may be considered new service. ATA 

also states an incremental increase 

incentive would be discriminatory, 

because some carriers will not be able 

to upgauge. 

Both proponents and opponents 

weighed in on the proposal’s 

compliance with the Airline 

Deregulation Act of 1978. (Pub. L. 95– 

504) 

A member of the general public 

objected to the petition stating the 

benefits provided to carriers will not be 

passed on to passengers. 

B. Summary of Relevant Law, Grant 

Assurance Obligations and Applicable 

Policy 

Airport sponsors that accept federal 

funds under the FAA’s Airport 

Improvement Program [49 U.S.C. 47101, 

et seq., and 49 U.S.C. 40103(e)], agree to 

a set of standard grant assurances. These 

include an assurance that airport 

revenue will be used for the capital and 

operating costs of the airport or airport 

system, or certain other purposes. They 

also include assurances that fees 

charged air carriers will be reasonable, 

not unjustly discriminatory, and 

substantially comparable to fees charged 

other carriers making similar use of the 

airport. Additionally, they prohibit 

exclusive rights and encourage airports 

to create a fee and rental structure to be 

as self-sustaining as possible. In 

reviewing this petition, the FAA 

determined applicable assurances may 

include: 

Grant Assurance 22, Economic 

Nondiscrimination, implements the 

provisions of 49 U.S.C. 47107(a)(1) through 

(6). The intent of the assurance and statute 

is to address both the reasonableness of 

airport access and the prohibition of adopting 

unjustly discriminatory conditions as a 

potential for limiting access as well as air 

carrier agreements. 

Grant Assurance 23, Exclusive Rights, 

implements the provisions of 49 U.S.C. 

40103(e) and 47107(a) (4) and prohibits 

airport sponsors from granting exclusive 

rights to airport users. 

Grant Assurance 24, Fee and Rental 

Structure, implements Title 49 U.S.C. 

47107(a)(13) by addressing selfsustainability. The intent of the assurance 

and statute is for the airport operator to 

charge fees that are sufficient to cover as 

much of the airport’s costs as is feasible 

while maintaining a fee and rental structure 

consistent with the sponsor’s other federal 

obligations. 

Grant Assurance 25, Airport Revenue Use, 

implements Title 49 U.S.C. 47107(b)(1) 

which requires that grant agreements for 

airport development grants include an 

assurance that ‘‘the revenues generated by a 

public airport will be expended for the 

capital or operating costs of—(A) The airport; 

(B) the local airport system; or (C) other local 

facilities owned or operated by the airport 

owner or operator and directly and 

substantially related to the air transportation 

of passengers or property.’’ 

In addition to the grant assurance 

obligations, FAA reviewed the petition’s 

compliance with FAA’s Policy 

Regarding Airport Rates and Charges 

and the Revenue Use Policy. 

1. Policy Regarding Airport Rates and 

Charges (Rates and Charges Policy) 

The Department of Transportation 

published the Rates and Charges Policy 

on June 21, 1996 (61 FR 31,994), which 

was amended on July 14, 2008 (73 FR 

40,430). The 2008 amendments were 

intended to provide greater flexibility to 

operators of congested airports to use 

landing fees to provide incentives to air 

carriers to use the airport at less 

congested times or to use alternate 

airports to meet regional air service 

needs. The policy as amended does not 

specifically refer to incentive programs 

or fee waivers, but provides in part: 

3. Aeronautical fees may not unjustly 

discriminate against aeronautical users or 

user groups. 


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2. Policy and Procedures Concerning the 

Use of Airport Revenue (Revenue Use 

Policy) 

In the FAA Authorization Act of 1994, 

Congress expressly prohibited ‘‘the use 

of airport revenues for general economic 

development, marketing and 

promotional activities unrelated to 

airports or airport systems.’’ [49 U.S.C. 

47107(1)(2)(b)]. In accordance with 

Congressional direction, the Department 

of Transportation and the FAA 

published FAA’s Policy and Procedures 

Concerning the Use of Airport Revenue. 

This policy stood up the air carrier 

incentive program. Specifically under 

Section V.A.2, Permitted uses of Airport 

Revenue, the policy states: 

expenditures for the promotion of an airport, 

promotion of new air service and 

competition at the airport, and marketing of 

airport services are legitimate costs of an 

airport’s operation. [64 FR 7703] 

Section VI.B.12 of the policy, 

Prohibited Uses of Airport Revenue, 

specifically prohibits the direct subsidy 

of air carriers with airport revenues, but 

notes: 

Prohibited direct subsidies do not include 

waivers of fees or discounted landing or 

other fees during a promotional period. Any 

fee waiver or discount must be offered to all 

users of the airport, and provided to all users 

that are willing to provide the same type and 

level of new services consistent with the 

promotional offering. [64 FR 7720] 

As stated in the Revenue Use Policy, 

The FAA continues to believe that the costs 

of operating aircraft, or payments to air 

carriers to operate certain flights, are not 

reasonably considered an operating cost of an 

airport. In addition, payment of subsidy for 

air service can be viewed as general regional 

economic development and promotion, 

rather than airport promotion. [See, 64 FR 

7709–7710] 

Finally, in its analysis of the petition, 

the FAA applied the 1978 Airline 

Deregulation Act (ADA), specifically the 

preemption provision, [See, 49 U.S.C. 

41713(b)] which states that State and 

local governments are prohibited from 

enacting or enforcing any provision 

having the force or effect of law related 

to a ‘‘price, route, or service of an air 

carrier.’’ 

C. Discussion/Analysis 

FAA’s Revenue Use Policy 

specifically permits airport operators to 

offer certain limited term incentives, 

using airport revenue, to air carriers that 

opt to participate in incentive programs. 

Each incentive program is developed 

individually and independently by 

airport operators; however, the Revenue 

Use Policy specifically limits the goals 

of incentive programs to encourage (1) 

new service and/or (2) competition. 

Over the past decade, FAA has defined 

new service to include: 

(1) Service to a new airport; 

(2) Nonstop service where no nonstop 

service currently is offered; 

(3) New entrant carrier; and/or 

(4) Increased frequency of flight(s) to 

a specific destination. 

CCDOA petitioned the FAA to expand 

the definition of new service to include 

‘‘increases in landed weight.’’ CCDOA’s 

petition stated an increase in landed 

weight could result from an increase in 

the size of the aircraft a carrier uses— 

also known as ‘‘upgauging’’—on 

existing routes, consolidation of existing 

flights, and/or added flights. CCDOA 

requested the FAA amend its existing 

guidance to make clear that its proposed 

incentive plan is consistent with 

Federal law and existing agency 

policies. 

CCDOA did not request FAA amend 

the Revenue Use Policy; instead, 

CCDOA asked the FAA make a finding 

that would expand the agency’s 

interpretation of new service. FAA has 

the legal authority to amend or modify 

interpretations of Policy. It is under this 

authority that the FAA considered 

CCDOA’s petition. 

1. Legal Issues 

In its request, the CCDOA argues 

increases in seats through increases in 

landed weight meets the definition of 

new air service as prescribed in the 

Revenue Use Policy. The Revenue Use 

Policy permits airports to offer 

incentives to airlines for establishing 

‘‘new service’’ to (a) increase travel 

using the airport or (b) promote 

competition at the airport. 

In consideration of CCDOA’s request, 

the FAA has reviewed the petition 

based on the goals of the air carrier 

incentive program as defined in the 

Revenue Use Policy, as well as in 

accordance with FAA’s airport sponsor 

assurances and the Rates and Charges 

Policy. 

Previously, FAA opined that an 

addition of seats on existing flights was 

not new service. Moreover, since the 

publication of the Revenue Use Policy 

in 1999, FAA has been requested on 

several occasions to opine on its 

definition of ‘‘new service.’’ Over the 

past thirteen years, FAA has defined 

‘‘new service’’ to include: (a) Service to 

an airport destination not currently 

served; (b) nonstop service where no 

nonstop service is currently offered; (c) 

new entrant carrier; and/or (d) increased 

frequency of flights to a specific 

destination, if incentivized by an airport 

would clearly set out to achieve the 

goals of the air carrier incentive 

program. However based on a 

thoughtful review, FAA agrees that an 

increase in seats by adding flights, 

which results in increases in landed 

weight, can be regarded as new service. 

The petition argues that an airport 

sponsor should be permitted to offer 

incentives to air carriers based on 

increases in landed weight. The FAA 

separated the petition into two 

arguments based on comments received 

and FAA’s position that adding seats 

through adding flights is considered 

new service. First, the FAA analyzed 

CCDOA’s position that an air carrier 

should be eligible for incentives solely 

based on increases in landed weight. 

Second, FAA analyzed whether 

increases in passenger yields as a result 

of increases in landed weight, whether 

through adding more flights or 

upgauging existing flights, should be 

eligible for incentives. 

In analyzing the first argument, FAA 

determined, that air carriers could 

increase landed weight, yet reduce the 

number of flights and the number of 

seats, which amounts jointly and 

individually to a reduction in service. 

As such, this argument could actually 

undermine one of the two goals of the 

incentive program allotted for under the 

current Policy (new service or 

competition). 

FAA then analyzed the second 

argument, limiting the scope of review 

to the premise that upgauging 

individual flights may provide more 

passenger seats to a designated market 

or to an airline’s overall operation, thus 

potentially increasing use of an airport. 

Under certain conditions, the FAA has 

determined such a program may meet 

the goals of new service and/or 

competition in conformance with an 

airport sponsor’s federal obligations and 

existing policy. Adding more passenger 

seats to an air carrier’s existing flight 

schedule through upgauging may 

provide more opportunity for the flying 

public, which the FAA agrees may 

increase travel using the airport. 

However, if an airline decides to 

consolidate a schedule to a given market 

while adding passenger seats through 

upgauging, the airline would be 

reducing service offered to the flying 

public or limiting air travel options. 

This is contrary to the goals of the 

program, which is to encourage new 

service and increase competition. An 

existing, and unchallenged definition of 

new service, is adding new flights to 

existing routes. Allowing flights to be 

consolidated on existing routes may 

result in more seats but fewer travel 

options for the traveling public. The 

FAA cannot view actions that actually 

reduce options to be beneficial to the 


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traveling public. Therefore, the FAA has 

determined that such a program may 

conflict with program goals specifically 

identified in existing Policy as well as 

the airport sponsor’s grant obligations 

even conducted without any controls. 

Thus FAA reviewed the petition in 

light of comments received and FAA’s 

existing position, to determine if 

upgauging with certain conditions 

would be a viable option for expanding 

the definition of new service, as the 

CCDOA requested in its petition. As a 

stand-alone incentive, upgauging could 

possibly be viewed as unjustly 

discriminatory or conferring an 

exclusive right because some airlines 

may not have the ability to upgauge 

based on the fleet of aircraft used to 

operate. It is important to understand it 

is not the role of FAA to accommodate 

the manner in which an airline or any 

aviation-based service provider 

structures its enterprise. However, when 

using airport revenue to incentivize new 

service, it is the FAA’s role to ensure 

sponsors do so in a manner consistent 

with their federal obligations, including 

the Revenue Use Policy. After FAA’s 

extensive review, with consideration of 

the incentive program’s goals, as well as 

an airport’s federal obligation to be not 

unjustly discriminatory and not to 

confer an exclusive right, the FAA has 

determined the definition of new 

service can be expanded to include 

upgauging with certain conditions that 

ensure compliance goals. 

In permitting use of airport revenue 

for incentive programs, the Revenue Use 

Policy specifically ties the use to the 

goal of increasing travel or promoting 

competition at the airport. Thus, when 

FAA analyzed the argument that 

upgauging may allow sponsors more 

options to increase travel and therefore, 

use of the airport, the FAA recognized 

the logical conclusion that more seats 

on larger aircraft would be a potential 

means to that goal. It is critical to note 

that the FAA recognizes that the 

existence of more seats on an existing 

route does not necessarily result in more 

passengers. However, the agency has 

determined that more seats on larger 

aircraft serving existing routes may 

indeed allow sponsors to create 

incentive programs with more options, 

as noted by many commenters to the 

petition, in pursuit of the program’s 

goals. 

Balancing the sponsors’ goal of 

increasing travel in accordance with its 

federal obligations and the Revenue Use 

Policy, with the airline’s business 

decisions, the FAA has determined that 

an incentive program may include 

incentives for upgauging as an 

expanded definition of ‘‘new service’’ 

with certain conditions. The FAA has 

determined that incentive programs 

cannot target upgauging as the specific 

goal of the program; instead, the goal 

must be expanded or added new 

service. In the petition before the 

agency, the measurable goal would be to 

increase use of the airport by increasing 

total landed-weight, through upgauging 

on currently served routes and/or 

additional flights. Such a program 

would offer all airlines, regardless of 

aircraft fleet, the ability to participate 

and thus meet the airport’s obligations 

under Grant Assurances 22 and 23. Any 

decreases in service on incentive routes 

is not eligible for participation in the 

incentive program. 

FAA’s granting of the CCDOA Petition 

in part represents a modification to the 

agency’s interpretation of the definition 

of ‘‘new service,’’ which is not defined 

in the Revenue Use Policy. 

2. Implementation 

In granting the CCDOA Petition in 

part, FAA has determined an incentive 

program may implement the goal of 

encouraging new service by offering 

incentives to air carriers opting to either 

upgauge existing flights to aircraft 

offering more seats and/or adding a new 

flight. When an incentive program 

allows air carriers the option to upgauge 

aircraft on existing flights to increase 

seats and/or adding an additional flight, 

the FAA has determined such a program 

may meet the definition of new air 

service as prescribed in the Revenue 

Use Policy with certain conditions. 

Previously, the FAA opined that an 

addition of seats on an existing flight 

was not new service. This is a change 

in interpretation on a definition not 

defined in the Policy. 

An air carrier incentive program that 

includes the following conditions may 

achieve the goals of the air carrier 

incentive program as defined in the 

Revenue Use Policy, and in accordance 

with statute cited herein: 

D A condition permitting an airport 

sponsor to use airport revenue as part of 

a comprehensive incentive program to 

encourage air carriers to increases seats 

on existing flights though upgauging 

must preclude upgauging from being the 

only component of the incentive 

program. In other words, upgauging 

cannot be the stand alone piece of the 

incentive program. The program must 

also include offering similarly 

formulated incentives for adding new 

flights. 

D A condition permitting an airport 

sponsor to use airport revenue as part of 

a comprehensive incentive program 

includes prohibiting air carriers 

participating in the incentive program 

from cancelling existing service on the 

route(s) for which the airport sponsors 

is offering incentives. To be eligible for 

incentives to upgauge, an air carrier 

must demonstrate an increase in service 

above and beyond the baseline set by 

the market(s) targeted by the incentive 

program. 

D A condition prohibiting air carriers 

from receiving incentives for ‘‘new’’ 

flights to other markets targeted under 

the incentive program when it reduces 

service in other markets targeted. The 

goal is for airport sponsor’s to increase 

use of the airport, thus incentivizing 

carriers for swapping service to extend 

incentives is not congruent with the 

airport sponsor’s goal. 

In its review, FAA agrees air carrier 

incentive programs should include, as a 

matter of compliance, a provision to 

ensure air service is not lost nor 

substituted. In response to the CCDOA’s 

petition, the FAA agrees that an airport 

sponsor may exercise oversight and 

judgment to ensure its air carrier 

incentive program is administered in a 

nondiscriminatory manner. Any 

allegations of unjustly discriminatory 

treatment or other assurance violations 

remain within the jurisdiction of the 

FAA. The oversight described by the 

CCDOA in its petition would allow the 

airport operator the ability to set 

parameters for carriers for certain 

landed weight of different aircraft type. 

The FAA believes the manner in which 

CCDOA plans to implement its 

oversight on landed weight will achieve 

the goal of nondiscriminatory 

application. While the FAA is 

comfortable with CCDOA’s stated 

intent, the FAA is not opining on the 

actual implementation of the plan. FAA 

must remain objective should a 

complaint be filed alleging 

inconsistences with CCDOA’s plan and 

federal obligations. 

3. Unintended Consequences 

The air carrier incentive program was 

not created to test the upper limit of 

what a market will yield with respect to 

the number of passenger seats 

demanded. As such, an incentive 

program that allows for upgauging of 

aircraft must be constructed in a manner 

that does not allow for a perpetual 

upgauging of aircraft. Once the 

incentive period expires, upgauging 

aircraft as a means of offering new 

service cannot again be incentivized. 

This determination is consistent with 

the Revenue Use Policy and Grant 

Assurance 24 as it relates to the addition 

of flights to a markets schedule as well. 

While a sponsor’s air carrier incentive 

program may be ongoing for several years, 

each air carrier’s incentive period should be 


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limited to no more than two years except 

under special circumstances (e.g., new 

entrants). 

The air carrier incentive program was 

never intended to be a maximum 

sustainable market growth-incentive 

program where airlines would be 

incentivized to test the limits of a 

markets demands. Rather the program 

was offered to airports to encourage 

airlines to test new markets and offer 

passengers more travel options and in 

turn promote more travel using the 

airport. The limits on allowable 

incentive periods have been vetted by 

FAA and deemed reasonable timeframes 

for airlines to assess the demand for a 

‘‘new service’’ and evaluate the 

sustainability to continue that service 

without incentives in accordance with 

existing policy, grant assurance 

obligations, and statute. 

III. Conclusion 

Incentive programs must walk the fine 

line between allowing sponsors the 

ability to enhance the viability of new 

service through temporary incentives 

and simply buying increased use of the 

airport. The air carrier incentive 

program, as currently constituted, 

ensures properly structured programs 

will meet the goals for which an air 

carrier incentive program is allowed. 

FAA has viewed the CCDOAs petition 

in order to ensure its proposal will meet 

the same goals. As such, FAA agrees 

that, with certain conditions in place, 

incentive programs may include 

opportunities for air carriers to upgauge 

existing service. The conditions must 

require flight schedules are not 

contracted while allowing airlines to 

receive proportional credit for 

upgauging existing flight(s) to targeted 

market(s) within the schedule to 

provide more capacity. 

While FAA agrees to expand its 

interpretation of ‘‘new service’’ to 

include upgauging with stated 

parameters as an accepted form of new 

service, the onus to create an incentive 

program that is not unjustly 

discriminatory must be borne by the 

sponsor responsible for the airportspecific air carrier incentive program. 

The conditions included within this 

notice are guidance. 

All existing guidance not addressed 

herein remains applicable. FAA 

reminds airport sponsors: Incentives 

must not be offered in an unjustly 

discriminatory manner; incentives must 

be applied similarly to similarly 

situated carriers participating in 

incentive programs; new entrants are 

deemed similarly situated to 

incumbents after one year; and 

additional incentives for incumbents are 

limited to one year in accordance with 

past guidance. 

Issued in Washington, DC on April 3, 2012. 

Randall Fiertz, 

Director, Airport Compliance and 

Management Analysis. 

[FR Doc. 2012–8399 Filed 4–6–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Maritime Administration 

[Docket No. MARAD 2012 0048] 

Requested Administrative Waiver of 

the Coastwise Trade Laws: Vessel 

ASPIRE; Invitation for Public 

Comments 

AGENCY: Maritime Administration, 

Department of Transportation. 

ACTION: Notice. 

SUMMARY: As authorized by 46 U.S.C. 

12121, the Secretary of Transportation, 

as represented by the Maritime 

Administration (MARAD), is authorized 

to grant waivers of the U.S.-build 

requirement of the coastwise laws under 

certain circumstances. A request for 

such a waiver has been received by 

MARAD. The vessel, and a brief 

description of the proposed service, is 

listed below. 

DATES: Submit comments on or before 

May 9, 2012. 

ADDRESSES: Comments should refer to 

docket number MARAD–2012–0048. 

Written comments may be submitted by 

hand or by mail to the Docket Clerk, 

U.S. Department of Transportation, 

Docket Operations, M–30, West 

Building Ground Floor, Room W12–140, 

1200 New Jersey Avenue SE., 

Washington, DC 20590. You may also 

send comments electronically via the 

Internet at http://www.regulations.gov. 

All comments will become part of this 

docket and will be available for 

inspection and copying at the above 

address between 10 a.m. and 5 p.m., 

E.T., Monday through Friday, except 

Federal holidays. An electronic version 

of this document and all documents 

entered into this docket is available on 

the World Wide Web at http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Joann Spittle, U.S. Department of 

Transportation, Maritime 

Administration, 1200 New Jersey 

Avenue SE., Room W21–203, 

Washington, DC 20590. Telephone 202– 

366–5979, Email Joann.Spittle@dot.gov. 

SUPPLEMENTARY INFORMATION: As 

described by the applicant the intended 

service of the vessel ASPIRE is: 

Intended Commercial Use of Vessel: 

‘‘Six pack charter for sport fishing.’’ 

Geographic Region: ‘‘Washington, 

Oregon, California.’’ The complete 

application is given in DOT docket 

MARAD–2012–0048 at http:// 

www.regulations.gov. Interested parties 

may comment on the effect this action 

may have on U.S. vessel builders or 

businesses in the U.S. that use U.S.-flag 

vessels. If MARAD determines, in 

accordance with 46 U.S.C. 12121 and 

MARAD’s regulations at 46 CFR part 

388, that the issuance of the waiver will 

have an unduly adverse effect on a U.S.- 

vessel builder or a business that uses 

U.S.-flag vessels in that business, a 

waiver will not be granted. Comments 

should refer to the docket number of 

this notice and the vessel name in order 

for MARAD to properly consider the 

comments. Comments should also state 

the commenter’s interest in the waiver 

application, and address the waiver 

criteria given in § 388.4 of MARAD’s 

regulations at 46 CFR Part 388. 

Privacy Act 

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). 

By Order of the Maritime Administrator. 

Dated: April 2, 2012. 

Julie P. Agarwal, 

Secretary, Maritime Administration. 

[FR Doc. 2012–8454 Filed 4–6–12; 8:45 am] 

BILLING CODE 4910–81–P 

DEPARTMENT OF TRANSPORTATION 

Maritime Administration 

[Docket No. MARAD 2012 0047] 

Requested Administrative Waiver of 

the Coastwise Trade Laws: Vessel SIR 

MARTIN II; Invitation for Public 

Comments 

AGENCY: Maritime Administration, 

Department of Transportation. 

ACTION: Notice. 

SUMMARY: As authorized by 46 U.S.C. 

12121, the Secretary of Transportation, 

as represented by the Maritime 

Administration (MARAD), is authorized 

to grant waivers of the U.S.-build 

requirement of the coastwise laws under 

certain circumstances. A request for 


pmangrum on DSK3VPTVN1PROD with NOTICES