40430 Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 

DEPARTMENT OF STATE 

[Public Notice 6288] 

Culturally Significant Objects Imported 

for Exhibition; Determinations: ‘‘The 

Dead Sea Scrolls’’

ACTION: Notice, Correction. 

SUMMARY: On June 20, 2008, notice was 

published on page 35189 of the Federal 

Register (volume 73, number 120) of 

determinations made by the Department 

of State pertaining to the exhibit, ‘‘The 

Dead Sea Scrolls.’’ The referenced 

notice is corrected as to an additional 

object to be included in the exhibition. 

Pursuant to the authority vested in me 

by the Act of October 19, 1965 (79 Stat. 

985; 22 U.S.C. 2459), Executive Order 

12047 of March 27, 1978, the Foreign 

Affairs Reform and Restructuring Act of 

1998 (112 Stat. 2681, et seq.; 22 U.S.C. 

6501 note, et seq.), Delegation of 

Authority No. 234 of October 1, 1999, 

Delegation of Authority No. 236 of 

October 19, 1999, as amended, and 

Delegation of Authority No. 257 of April 

15, 2003 [68 FR 19875], I hereby 

determine that the additional object to 

be included in the exhibition ‘‘The Dead 

Sea Scrolls’’, imported from abroad for 

temporary exhibition within the United 

States, is of cultural significance. The 

additional object is imported pursuant 

to a loan agreement with the foreign 

owners or custodians. I also determine 

that the exhibition or display of the 

exhibit object at The Jewish Museum, 

New York, New York, from on or about 

September 21, 2008, until on or about 

January 4, 2009, and at possible 

additional exhibitions or venues yet to 

be determined, is in the national 

interest. Public Notice of these 

Determinations is ordered to be 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the exhibit objects, contact Wolodymyr 

Sulzynsky, Attorney-Adviser, Office of 

the Legal Adviser, U.S. Department of 

State (telephone: (202) 453–8050). The 

address is U.S. Department of State, SA–

44, 301 4th Street, SW., Room 700, 

Washington, DC 20547–0001. 

Dated: July 7, 2008. 

C. Miller Crouch, 

Principal Deputy Assistant Secretary for 

Educational and Cultural Affairs, Department 

of State. 

[FR Doc. E8–16004 Filed 7–11–08; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF TRANSPORTATION 

Office of the Secretary; Federal 

Aviation Administration 

[Docket No. FAA–2008–0036] 

RIN 2120–AF90 

Policy Regarding Airport Rates and 

Charges 

AGENCY: Department of Transportation, 

Office of the Secretary and Federal 

Aviation Administration. 

ACTION: Notice of amendment to policy 

statement. 

SUMMARY: This action amends the 

Department of Transportation 

(‘‘Department’’) ‘‘Policy Regarding the 

Establishment of Airport Rates and 

Charges’’ published in the Federal 

Register on June 21, 1996 (‘‘1996 Rates 

and Charges Policy’’). This action 

adopts three amendments to the 1996 

Rates and Charges Policy (two 

modifications and one clarification). 

These amendments are 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. Any charges imposed 

on international operations must also 

comply with the international 

obligations of the United States. 

DATES: This policy statement is effective 

July 14, 2008. 

ADDRESSES: Docket: To read background 

documents or comments received, go to 

http://www.regulations.gov at any time 

or to Room W12–140 on the ground 

floor of the West Building, 1200 New 

Jersey Avenue, SE., Washington, DC, 

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

through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Charles Erhard, Manager, Airport 

Compliance Division, AAS–400, Federal 

Aviation Administration, 800 

Independence Avenue, SW., 

Washington, DC 20591, telephone (202) 

267–3187; facsimile: (202) 267–5769; email: charles.erhard@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Availability of Documents 

You can get an electronic copy of this 

notice and all other documents in this 

docket using the Internet by: 

(1) Searching the Federal 

eRulemaking portal (http:// 

www.regulations.gov/search); 

(2) Visiting the FAA’s Regulations and 

Policies Web page at http:// 

www.faa.gov/regulations_policies; or 

(3) Accessing the Government 

Printing Office’s Web page at http:// 

www.access.gpo.gov/su_docs/aces/ 

aces140.html. 

You can also get a copy by sending a 

request to the Federal Aviation 

Administration, Office of Rulemaking, 

ARM–1, 800 Independence Avenue, 

SW., Washington, DC 20591, or by 

calling (202) 267–9680. Make sure to 

identify the docket number, notice 

number, or amendment number of this 

proceeding. 

Authority for This Proceeding 

This notice is published under the 

authority described in Subtitle VII, Part 

B, Chapter 471, section 47129 of Title 49 

United States Code. Under subsection 

(b) of this section, the Secretary of 

Transportation is required to publish 

policy statements establishing standards 

or guidelines the Secretary will use in 

determining the reasonableness of 

airport fees charged to airlines under 

section 47129. 

Background 

On January 17, 2008, the Department 

of Transportation published a notice in 

the Federal Register proposing to 

amend the Department of 

Transportation (‘‘Department’’) ‘‘Policy 

Regarding the Establishment of Airport 

Rates and Charges’’ published in the 

Federal Register on June 21, 1996, 

(‘‘1996 Rates and Charges Policy’’ or 

‘‘1996 Policy’’). (73 FR 3310, January 17, 

2008). The comment period on the 

notice was extended to April 3, 2008. 

(73 FR 7626, February 8, 2008). The 

notice proposed three amendments to 

the 1996 Policy (technically two 

modifications and one clarification). 

These 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 notice noted that 

any charges imposed on international 

operations must also comply with the 

international obligations of the United 

States. 

Specifically, the notice first proposed 

to clarify the 1996 Policy by explicitly 

acknowledging that airport operators are 

authorized to establish a two-part 

landing fee structure consisting of both 

an operation charge and a weight-based 

charge, in lieu of the standard weightbased charge. Such a two-part fee would 

serve as an incentive for carriers to use 

larger aircraft and increase the number 

of passengers served with the same or 

fewer operations. Second, the notice 

proposed to expand the ability of the 

operator of a congested airport to 

include in the airfield fees of a 

congested airport a portion of the 


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Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 40431 

airfield costs of other, underutilized 

airports owned and operated by the 

same proprietor. Third, the notice 

proposed to permit the operator of a 

congested airport to charge users of a 

congested airport a portion of the cost 

of airfield projects under construction. 

Under the existing policy, costs of new 

or reconstructed airfield facilities could 

be included in airfield charges only 

when the new or reconstructed facilities 

are completed and in use, unless 

carriers at the airport agree otherwise. 

This notice proposed two alternatives 

for charges for projects under 

construction. The first would permit the 

costs to be included in the rate base 

only during periods when the airport 

experiences congestion. At some 

airports, such as Chicago O’Hare or New 

York LaGuardia, this could occur 

throughout the normal operating day. 

The second would permit these costs to 

be included in the rate base of the 

congested airport at all times of the day. 

Because the latter two proposed 

amendments would apply only at 

congested airports, the notice proposed 

to add a definition of ‘‘congested 

airport’’ in the Applicability section of 

the 1996 Policy based upon 49 U.S.C. 

47175(2). 

Legal Requirements for Airport Rates 

and Charges 

All commercial service airports 

operating in the United States and most 

other airports that are open to the public 

have accepted grants for airport 

development under the Airport 

Improvement Program, authorized in 

Title 49 of the United States Code, 

Subtitle VII, Part B, Chapter 471. Under 

§ 47107, in exchange for receiving grant 

funds, airport operators must give a 

variety of assurances regarding the 

operation of their airports and the 

implementation of grant funded 

projects. Among other things, airport 

operators pledge to make the airport 

‘‘available for public use on reasonable 

conditions and without unjust 

discrimination.’’ 49 U.S.C. 47107(a)(1). 

This obligation encompasses the 

obligation to establish reasonable and 

not unjustly discriminatory fees and 

charges for aeronautical use of the 

airfield. The Department’s rules of 

practice and procedure for enforcement 

proceedings involving Federally 

assisted airports are set forth in 14 CFR 

Part 16. 

Section 47129 authorizes the 

Department to review the 

reasonableness of airport fees charged to 

air carriers, upon a complaint or request 

for determination and a finding of a 

significant dispute, and directs the 

publication of policies or guidelines for 

determining reasonable fees and 

development of expedited hearing 

procedures to resolve airport fee 

disputes. The Department’s procedures 

applicable to a proceeding concerning 

airport fees are contained in Subpart F, 

Title 14 CFR 302.601–302.609. 

The Policy Regarding Airport Rates and 

Charges 

The Department published the 1996 

Rates and Charges Policy in the Federal 

Register at 61 FR 31994 on June 21, 

1996. The statement of policy was 

required by section 113 of the Federal 

Aviation Administration Authorization 

Act of 1994, Public Law 103–305 

(August 23, 1994), now codified at 49 

U.S.C. 47129. The publication of the 

1996 Rates and Charges Policy followed 

publication of a notice of proposed 

policy (59 FR 29874, June 9, 1994). That 

proposal predated enactment of section 

47129. After enactment of section 

47129, the Department published a 

supplemental notice of proposed policy 

(59 FR 51836, October 12, 1994); an 

Interim Policy (60 FR 6906, February 3, 

1995); and a further supplemental 

notice of proposed policy (60 FR 47012, 

September 8, 1995). 

The Air Transport Association of 

America (ATA), on behalf of its member 

airlines, and the City of Los Angeles, 

operator of Los Angeles International 

Airport, both challenged elements of the 

1996 Rates and Charges Policy in the 

United States Court of Appeals for the 

District of Columbia. The court vacated 

portions of the 1996 Rates and Charges 

Policy in Air Transport Ass’n of 

America v. DOT, 119 F.3d 38, amended 

by 129 F.3d 625 (D.C. Cir. 1997). 

The 1996 Rates and Charges Policy 

specified that, unless otherwise agreed 

to by an airport user, fees for airfield use 

must be based on costs calculated using 

the historic cost accounting (HCA) 

methodology. However, under 

paragraphs 2.2, 2.4, and 2.5.1, for other 

airport facilities and services the airport 

proprietor was free to use any 

reasonable methodology to determine 

fees, if justified and applied on a 

consistent basis. 1996 Rates and Charges 

Policy, para. 2.6. Petitioners in the court 

case challenged the disparate treatment 

of airfield fees and other fees. The court 

determined that this distinction had not 

been adequately justified. Air Transport, 

119 F.3d at 44. At the Department’s 

request, the Court vacated only the 

specific provisions of the 1996 Rates 

and Charges Policy that petitioners 

challenged as implementing that 

distinction. Air Transport, 129 F.3d at 

625. 

Since the court’s ruling, the 

Department has addressed significant 

airport-airline fee disputes through caseby-case adjudication. The Department’s 

decisions are informed by the statutory 

limitations imposed on airport fees. One 

limitation derives from requirements of 

the Airport Improvement Program (AIP) 

grant assurances, 49 U.S.C. 47107. In 

particular, a federally assisted airport 

sponsor must give the Secretary of 

Transportation and the Federal Aviation 

Administration (FAA) certain 

assurances, including the assurance that 

the airport will be available for public 

use on fair and reasonable terms and 

without unjust discrimination. The 

other limitation arises from the 

proprietor’s exception to the Anti-Head 

Tax Act, 49 U.S.C. 40116, which allows 

the airport proprietor to collect only 

reasonable rental charges, landing fees, 

and other service charges from aircraft 

operators for the use of airport facilities. 

Our past cases have established some 

guidelines for our analysis of fees 

challenged by airlines. Our cases have 

examined fees and fee methodologies 

that we considered reasonable as well as 

those we considered not to be 

reasonable. See Miami International 

Airport Rates Proceeding, Order 97–3–

26 (March 19, 1997), aff’d sub nom., Air 

Canada v. DOT, 148 F.3d 1142 (D.C. Cir. 

1998); Alaska Airlines, Inc., et al. v. Los 

Angeles World Airports, Order 2007–6–

8 (June 15, 2007) (LAX III), on appeal to 

the United States Court of Appeals for 

the District of Columbia Circuit). 

Additionally, we have established 

some guidance on unreasonable airline 

fees. Second Los Angeles Int’l Airport 

Rates Proceeding, Order 95–9–24 (Sept. 

22, 1995, (LAX II), aff’d sub nom, City 

of Los Angeles v. DOT, 165 F.3d 972 

(D.C. Cir. 1999); Brendan Airways, LLC 

v. Port Authority of New York and New 

Jersey, Order 2005–6–11 (June 14, 2005), 

aff’d in part, Port. Auth. of New York 

and New Jersey v. DOT, 479 F.3d 21 

(D.C. Cir. 2007). 

The Secretary has also determined 

whether or not certain disputed fees 

were unjustly discriminatory. Brendan 

Airways, op cit., Order 2005–6–11; LAX 

III. 

Rationale for the Proposal 

The January 17 notice offered a twopart justification for the proposed policy 

changes: First, the increasing congestion 

and operating delays at major airports in 

the U.S., and second, the potential that 

peak period pricing has to address that 

congestion. Excess demand has already 

resulted in congestion at certain airports 

to the point that the FAA has taken 

action to limit access. These airports 

include LaGuardia, JFK International, 

O’Hare International, and Newark 

Liberty International. A recent study, 


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40432 Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 

Capacity Needs in the National 

Airspace System 2007–2025: An 

Analysis of Airports and Metropolitan 

Area Demand and Operational Capacity 

in the Future, conducted by the Federal 

Aviation Administration as part of the 

Future Airport Capacity Task (FACT) 2, 

indicates metropolitan areas and regions 

along the East and West Coasts are 

experiencing large amounts of growth in 

population and economic activity that 

cause chronic congestion. Based on 

studies and analyses associated with 

FACT 2, conditions are projected to 

worsen in the future in these coastal 

regions, primarily concentrated at 

Operational Evolution Partnership 

(OEP) airports. Fourteen of the 35 OEP 

airports and eight metropolitan areas are 

forecasted to be capacity-constrained in 

2025. Of the fourteen airports identified 

as capacity-constrained in the study, 

several are further constrained by 

conditions, either physical (New York 

LaGuardia) or environmental (Long 

Beach-Daugherty Field), that prevent 

additional runway capacity from being 

built. 

The January 17 notice noted that one 

way of addressing congestion of an 

airport’s airside facilities is by the 

pricing of those facilities. By raising the 

cost of operating a flight during 

congested periods, an airport owner/ 

operator can increase the efficient 

utilization of the airport in a number of 

ways. First, by charging higher landing 

fees during periods of peak congestion, 

the airport proprietor gives aircraft 

operators the incentive to reschedule 

their flights to less congested periods or 

to use secondary airports. The degree to 

which aircraft operators reschedule will 

in large part depend on their network 

structure and access to secondary 

airports. Second, if airports structure 

their airfield charges to reflect scarcity 

by combining per-operation charges 

with weight-based charges, they will 

provide an incentive for air carriers to 

use congested airfield facilities more 

efficiently by increasing the size of 

aircraft operating during periods of 

congestion. Third, even where 

expansion is not feasible, the industry 

and users benefit if adjustment of prices 

during congested periods increases the 

efficiency with which congested airfield 

facilities are used. 

The January 17 notice made clear that 

the proposed actions did not represent 

true congestion pricing because they did 

not authorize airport proprietors to set 

fees to balance demand with capacity 

without regard to allowable costs of 

airfield facilities and services. However, 

enabling proprietors at congested 

airports to assign additional, but still 

appropriate, costs to the airfield could 

encourage more efficient use of these 

airports. Airport sponsors would still 

need to assure that the airport is 

available to the public on reasonable 

terms and without unjust discrimination 

and that fees charged for international 

operations comply with the 

international obligations of the United 

States. 

Comments on the Proposals, FAA 

Docket 2008–0036 

The Department received more than 

70 substantive comments on the 

proposals, from U.S. and foreign air 

carriers, foreign governments and 

airport operators, U.S. airport operators, 

general aviation aircraft operators, local 

government agencies, trade and 

nonprofit associations, private citizens, 

an aircraft manufacturer, and a 

university. 

The comments covered a broad range 

of subjects, but tended to fall within five 

general issue areas: 

1. Legal authority to adopt the 

proposed policies. 

2. Adequacy of the guidance 

contained in the notice. 

3. Effectiveness of the proposals to 

achieve the stated goals. 

4. Whether the proposed policies are 

unjustly discriminatory toward 

particular categories of operators and 

particular markets. 

5. Whether the notice properly 

acknowledged the discretionary 

authority of airport operators to set 

rates. 

This summary of comments reflects 

the major issues raised and does not 

restate each comment received. The 

Department considered all comments 

received even if not specifically 

identified and responded to here. 

1. Legal Authority 

Several airlines argued that the 

proposed policy is preempted by the 

Airline Deregulation Act’s preemption 

provision, which prohibits States or 

localities from regulating airline rates, 

routes, or services. They contended that 

airports are thereby preempted from 

pricing airfield access in order to 

modify airline conduct and that the 

Department accordingly lacks the 

authority to permit an airport to price 

landing areas to affect airline behavior. 

They disputed the premise that the 

‘‘proprietor’s exception’’ to the 

preemption provision allowed an 

airport to take congestion into account 

in formulating its charges. They also 

argued that the Anti-Head Tax Act 

constrains an airport’s ability to 

implement market-based congestion 

pricing or slot auctions. 

Comment: The proposals are in 

essence congestion pricing, and neither 

the Department nor airport operators 

are authorized to use congestion pricing 

in establishing airfield charges. Many of 

the carrier comments equated the 

proposals to market-based congestion 

pricing. One association submitted a 

legal opinion concluding that neither 

the Department nor airports have the 

authority to impose such congestion 

pricing. 

Response: The notice made clear that 

the purpose of the proposed policies 

was to provide an airport operator with 

greater flexibility to allocate new 

categories of cost to peak hour landing 

fees, thereby providing an additional 

means to address peak hour congestion. 

The financing of airfield projects under 

construction and inclusion of airfield 

costs of secondary airports would use 

new and non-traditional cost allocations 

to achieve some of the effects of 

congestion pricing. The proposals allow 

an airport proprietor to assign certain 

costs to airfield charges, but not to 

charge fees that exceed those costs. 

Thus, the proposals represent pricing 

based upon costs of providing facilities 

and services rather than use of marketclearing rates to set prices. Although the 

intent of applying those costs to peak 

hours at a congested airport is to 

encourage changes in airline scheduling 

or use of larger aircraft, the fees utilized 

are cost-based, and therefore are not 

congestion pricing. 

Comment: Even if cost-based, the 

proposals depart from established 

ratemaking in two general ways: 

charging carriers for facilities they are 

not using, because the facilities are at 

another airport or are not yet built; and 

charging fees higher than direct costs for 

the express purpose of achieving the 

airport operator’s goals relating to 

airline scheduling and fleet mix. Some 

commenters argued that the assignment 

of future costs or the costs of another 

airport to carriers at a congested airport 

goes beyond the established principles 

of cost-based ratemaking, and the 

Department cannot, therefore, consider 

the proposals to reflect cost recovery. 

Response: The proposed policies 

depart from past practice only in 

expanding the ability of an airport 

proprietor to rate-base certain costs in 

the landing fee and to expressly permit 

congested airports to include a greater 

portion of those costs in landing fees 

during congested periods. The result is 

not additional revenue to the airport, 

because fees remain limited to actual, 

aggregate costs. Clearly, the Department 

has the authority to amend its policy on 

airport-airline fee reasonableness. The 

Supreme Court has recognized that the 


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Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 40433 

Secretary of Transportation is 

responsible for administering the 

aviation laws and in County of Kent, 

made clear that the Department could 

adopt policies that would change the 

rules under which the court was 

deciding that case. Northwest Airlines v. 

County of Kent, 510 U.S. 355, 366–367 

(1994): 

The Secretary of Transportation is 

charged with administering the federal 

aviation laws, including the AHTA. His 

Department is equipped, as courts are 

not, to survey the field nationwide, and 

to regulate based on a full view of the 

relevant facts and circumstances. If we 

had the benefit of the Secretary’s 

reasoned decision concerning the 

AHTA’s permission for the charges in 

question, we would accord that decision 

substantial deference. See Chevron 

U.S.A. Inc. v. Natural Resources Defense 

Council, Inc., 467 U.S. 837, 842–845, 

104 S. Ct. 2778, 2781–2783, 81 L. Ed.2d 

694 (1984). 

The Supreme Court has also called 

the Department of Transportation the 

‘‘superintending agency’’ for purposes 

of applying the Airline Deregulation 

Act’s preemption provision over state 

and municipal regulation of airline 

rates, routes and services. American 

Airlines, Inc. v. Wolens, 513 U.S. 219, 

229, fn.6 (1995). 

Lower courts have recognized the 

superintending role of the Secretary of 

Transportation in administering the 

Anti-Head Tax Act, particularly with 

respect to fees imposed by airports on 

airlines. See, Port Authority of New 

York and New Jersey v. U.S. Department 

of Transportation, 479 F.3d 21, 27 (D.C. 

Cir., 2007); Southwest Air Ambulance, 

Inc. v. City of Las Cruces 268 F.3d 1162, 

1170 (10th Cir. 2001); City of Los 

Angeles v. U.S. Dept. of Transp., 165 

F.3d 972, 978 (D.C. Cir. 1999); Air 

Canada v. U.S. Dept. of Transp., 148 

F.3d 1142, 1150–1151; (D.C. Cir. 1998); 

and New England Legal Foundation v. 

Massachusetts Port Authority, 883 F.2d 

157, 172 (1st Cir. 1989). 

Commenters also argued that the 

purpose of the proposed charges—

which they identify as approximating 

the effect of congestion pricing at 

congested airports—was beyond the 

proprietary authority of airport 

operators. This is based on judicial 

opinions— e.g., Massport—holding that 

local governments may charge fees to 

defray their airport costs but not to 

regulate air traffic. 

The Anti-Head Tax Act gives airport 

proprietors clear and express authority 

to charge airline users landing fees and 

other charges for use of their airport. 49 

U.S.C. 40116(e)(2). County of Kent, 510 

U.S. at 365; Wardair Canada, Inc. v. 

Florida Department of Revenue, 477 

U.S. 1, 15–16 (1986). The proposals 

would change the way costs are 

allocated but would not depart from a 

system in which the airport operator 

charged for actual costs. 

Under our policy, an airport 

proprietor may establish peak period 

landing fees, for the purpose of reducing 

congestion, provided the fees are 

properly structured and revenueneutral. (Note: While the terms ‘‘peak 

period’’ and ‘‘congested hours’’ are used 

interchangeably on an informal basis in 

this preamble and in responding to 

comments, the final policy defines and 

uses only the term ‘‘congested hours.’’) 

The Department has permitted such fees 

to be charged when they do not exceed 

the aggregate costs of airfield facilities. 

The Massport case upheld the 

Department Decision finding that 

‘‘while it may be appropriate to raise 

fees in order to invoke market responses 

during periods when the airport is 

congested, to do this during times when 

there is no shortage of runway capacity 

penalizes smaller aircraft users when 

they are not imposing congestion related 

costs on other users.’’ Investigation into 

Massport’s Landing Fees, Opinion and 

Order, FAA Docket 13–88–2 (December 

22, 1988). The Massport case stands for 

the proposition that a properly 

structured peak period pricing system 

could be found reasonable and not 

unjustly discriminatory. Reasonable 

peak period fees would not be 

preempted under 49 U.S.C. 41713 

notwithstanding some impact on air 

carrier rates, routes or services. Opinion 

and Order at 11; New England Legal 

Foundation at 165. 

The Airline Deregulation Act does not 

prevent an airport proprietor from 

charging users for use of the airport 

facilities and services, including peakperiod charges. The Deregulation Act’s 

preemption provision contains a savings 

clause permitting an airport proprietor 

to exercise its proprietary powers and 

rights. An airport may use its 

proprietary powers in a manner that is 

reasonable, is nondiscriminatory, is not 

an undue burden on interstate 

commerce, and is designed not to 

conflict with the Airline Deregulation 

Act and its policies. Arapahoe County 

Public Airport Authority v. FAA, 242 

F.3d 1213, 1221–1222 (10th Cir. 2001). 

The policy defines congested airports 

and contains other safeguards to assure 

that these fees fulfill the Department’s 

priorities for alleviating congestion in 

the national air transportation system. 

Any fees adopted by an airport pursuant 

to the Department’s Policy would have 

to be consistent with the goals of that 

Policy. 

Several recent rules and policies 

issued by the Department show that it 

has consistently interpreted Federal law 

to authorize properly structured peak 

period pricing programs. First, in 

promulgating regulations to implement 

the 1990 Airport Noise and Capacity Act 

(ANCA) (49 U.S.C. 47521, et seq.), the 

Department determined that a peakperiod pricing program, where the 

objective is to align the number of 

aircraft operations with airport capacity, 

does not constitute an airport noise or 

access restriction subject to FAA review 

and approval. 14 CFR 161.5, definition 

of ‘‘noise or access restriction.’’

Second, the current Policy on Airport 

Rates and Charges provides that a 

properly structured peak pricing 

program that allocates limited resources 

using price during periods of congestion 

will not be considered to be unjustly 

discriminatory. An airport proprietor 

may, consistent with the policies 

expressed in the policy statement, 

establish fees that enhance the efficient 

utilization of the airport. 61 FR 31994, 

32021, § 3 (1996). 

The Airline Deregulation Act’s 

preemption provision does not bar 

airports from taking reasonable, 

nondiscriminatory measures for a 

purpose within their proprietary 

authority merely because those 

measures would influence airline 

behavior. Reasonable, not unjustly 

discriminatory measures taken by an 

airport operator to align capacity and 

demand consistent with the 

Department’s policy and in order to 

alleviate congestion in the national air 

transportation system are in accordance 

with Federal policy and are not 

prohibited because those measures have 

the purpose and effect of influencing 

airlines to change aircraft scheduling 

practices. See Massport, 883 F.2d at 165, 

173–174. 

One commenter cited San Diego 

Unified Port District v. Gianturco (651 

F.2d 1306, 9th Cir. (1981)); cert. den. 

455 U.S. 1000 (1982) for the proposition 

that an airport’s proprietary functions 

are limited to measures designed to 

insulate an airport proprietor from 

liability. We disagree. 

Gianturco stands for the proposition 

that a non-airport proprietor (in that 

case, the State of California) may not 

direct an airport proprietor (i.e., the San 

Diego Unified Port District) to impose a 

curfew on aircraft flights. The decision 

acknowledged that because an airport 

proprietor bears the monetary liability 

for excessive aircraft noise, it has the 

proprietary powers to adopt reasonable 

noise regulations. Gianturco did not 

hold that an airport proprietor’s powers 

were limited to the adoption of noiseVerDate Aug<31>2005 17:08 Jul 11, 2008 Jkt 214001 PO 00000 Frm 00151 Fmt 4703 Sfmt 4703 E:\FR\FM\14JYN1.SGM 14JYN1

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based measures only; similarly, it did 

not hold that an airport proprietor was 

limited to adopting measures solely 

designed to insulate itself from liability. 

Airport proprietors of course have 

powers in addition to noise controls, 

including setting fees for the use of the 

airfield. The Anti-Head Tax Act 

provides that authority. 49 U.S.C. 

40116(e)(2). See, County of Kent, 510 

U.S. 355. 

Commenters also claimed that airportairline charges must relate to the costs 

imposed and benefits received from the 

charged carrier, citing EvansvilleVanderburgh Airport Auth. Dis. v. Delta 

Airlines, 405 U.S. 707 (1972) and 

County of Kent. This test of 

reasonableness was based on the 

Commerce Clause, and the Supreme 

Court expressly acknowledged that it 

was within the Department’s powers to 

adopt another test of reasonableness, 

under the Anti-Head Tax Act. The 

Evansville-Vanderburgh court pointed 

out that the charges did not conflict 

with any federal policies on uniform 

regulation of air transportation, and 

noted: 

No federal statute or specific congressional 

action or declaration evidences a 

congressional purpose to deny or pre-empt 

state and local power to levy charges 

designed to help defray the costs of airport 

construction and maintenance. * * * At 

least until Congress chooses to enact a 

nation-wide rule, the power [to have 

interstate commerce share a fair share of 

airport costs] will not be denied to the States. 

405 U.S. at 721. 

The United States Court of Appeals 

for the District of Columbia Circuit 

explained, in the Air Canada case, that 

the Department was not obligated to 

apply a cost-benefit formula for 

purposes of deciding the reasonableness 

of Miami International Airport’s fee 

allocation methodology. Referring to the 

County of Kent decision, the DC Circuit 

stated: 

[T]he Court made clear that it was not 

establishing a standard for reasonableness 

under the Anti-Head Tax Act, and that the 

Secretary could establish another standard, 

whether more or less stringent than the 

standard the Court adopted in Northwest 

Airlines, so long as it was a permissible 

construction of the statute. We need not 

delve into whether Northwest Airlines 

requires a cost-benefit analysis or any other 

particular study, nor whether the 

Department’s reasonableness standards are 

consistent with those applied by the 

Supreme Court in Northwest Airlines, 

because the Department was not bound to the 

standards in that case. [fn. omitted] 148 F.3d 

1142 at 1151–52. 

Comment: The proposals are 

inconsistent with International Civil 

Aviation Organization (ICAO) standards 

for airport pricing and violate standard 

provisions in bilateral agreements. 

Every foreign airline that commented on 

the notice, 34 embassies, the 

Washington delegation of the European 

Commission, U.S. carriers and others 

argued that the proposals were not 

consistent with ICAO pricing guidelines 

or provisions in U.S. bilateral 

agreements (although several foreign 

carriers expressed a preference for peroperation fees over weight-based fees). 

Some U.S. carriers assumed the charges 

could not apply to foreign carriers due 

to bilateral agreements, and that the 

charges would, therefore, discriminate 

against U.S. carriers. One association 

filed comments refuting the assertion 

that ICAO and bilateral provisions 

prohibit the proposed charges. 

Response: For the reasons discussed 

in part above under Legal Authority, the 

Department believes the proposed 

charges can be applied to U.S. and 

foreign air carriers alike, consistent with 

ICAO guidance and with U.S. bilateral 

agreement obligations. First, those 

documents contain provisions for 

charges like those proposed, as 

described below. Second, the United 

States Government maintains a formal 

and comprehensive system for 

regulation of airport charges, including 

administrative and legal forums in 

which both foreign and U.S. parties may 

challenge the reasonableness of any 

airport charge. See 14 CFR part 16 and 

49 U.S.C. 47129. The United States 

Government is fully committed to 

compliance with its international 

obligations regarding airport charges, 

and the final policy, as adopted by this 

action, includes in its basic statement of 

principles a clear reminder of the 

requirement that U.S. airport charges 

comply with those obligations. 

Two-part landing fee. The two-part 

landing fee will be based on the same 

long-unchallenged rate base as a weightbased fee, so it is clearly cost-based. 

Some foreign carriers argued the fee 

would disproportionately affect foreign 

carriers by reducing small-aircraft feed 

traffic in peak hours, but that effect 

would apply to both U.S. and foreign 

carriers, and to both international and 

domestic long-haul flights. Accordingly, 

we do not find that a two-part landing 

fee would have a disproportionate effect 

on foreign carriers. 

Moreover, the proposal is consistent 

with ICAO guidance, which expressly 

states, ‘‘Landing charges should be 

based on the weight formula. * * * 

However, allowance should be made for 

the use of a fixed charge per aircraft or 

a combination of a fixed charge with a 

weight-related element, in certain 

circumstances, such as at congested 

airports and during peak periods.’’

ICAO’s Policies on Charges for Airports 

and Air Navigation Services, Doc 9082/ 

7 (7th Ed. 2004), ¶; 26 (i). It also is 

consistent with ICAO guidance on 

airport charging systems, which 

provides that charges ‘‘should be 

determined on the basis of sound 

accounting principles and may reflect, 

as required, other economic principles, 

provided that these are in conformity 

with Article 15 of the Convention on 

International Civil Aviation and other 

principles in the present Policies.’’ Id., 

¶ 23(iii). 

Charges for facilities under 

construction. ICAO guidance expressly 

allows for pre-funding of airport 

projects particularly those that are longterm and of a large-scale. ICAO’s 

Policies on Charges for Airports and Air 

Navigation Services, Doc 9082/7 (7th 

Ed. 2004), ¶ 24 states: 

* * * notwithstanding the principles of 

cost-relatedness for charges and of the 

protection of users from being charged for 

facilities that do not exist or are not provided 

* * *, prefunding of projects may be 

accepted in specific circumstances where 

this is the most appropriate means of 

financing long-term, large-scale investment, 

provided that strict safeguards are in place, 

including the following: 

(i) Effective and transparent economic 

regulation of user charges and the related 

provision of services, including performance 

auditing and ‘‘benchmarking’’ (comparison of 

productivity criteria against other similar 

enterprises); 

(ii) Comprehensive and transparent 

accounting, with assurances that all aviation 

user charges are, and will remain, earmarked 

for civil aviation services or projects; 

(iii) Advance, transparent and substantive 

consultation by providers and, to the greatest 

extent possible, agreement with users 

regarding significant projects; 

(iv) Application for a limited period of 

time with users benefiting from lower 

charges and from smoother transition in 

changes to charges than would otherwise 

have been the case once new facilities or 

infrastructure in place. 

The Department believes that 

charging for the costs of airfield projects 

under construction as those costs are 

incurred, exclusively at congested 

airports for the primary purpose of 

relieving current congestion, can be a 

‘‘most appropriate means of financing 

long term large scale projects’’ because 

it can address current congestion 

without increasing total charges to users 

over time. In fact, financing airfield 

projects under construction through 

peak hour charges will ultimately result 

in lower charges to carriers, by reducing 

interest costs that would otherwise be 

capitalized and added to project debt 

charged to airlines through landing fees 

after the project is completed. 


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We note that the proposal adopted by 

this action to allow recovery of 

construction costs before a project is in 

use is not ‘‘pre-funding’’ or ‘‘prefinancing,’’ as those terms are used in 

ICAO guidance and elsewhere. The 

adopted policy does not allow the 

accumulation of funds before a project 

begins, to be used later. Rather, the 

policy requires that costs be incurred for 

construction before the charges can be 

assessed, and limits the charges to a 

reasonable annual amortized amount for 

the costs actually incurred. 

Moreover, the U.S. system of 

regulation of airport fees, through the 

grant assurances and 49 U.S.C. 40116, 

provides the safeguards recommended 

by ICAO. U.S. obligations under 

bilateral air services agreements and 

FAA’s AIP program provide the means 

by which user fees can be regulated and 

transparent accounting can be assured. 

As noted in the proposed policy, ‘‘[t]he 

Department strongly encourages all 

airports to comply with the obligations 

* * * to engage in meaningful 

consultation with carriers * * * to 

justify their fees and to exchange 

appropriate financial information to 

enable carriers to fully evaluate * * * 

proposed fees.’’ The Department also 

strongly encourages substantive 

consultations between airports and 

users. Finally, the provisions in 

proposed section 2.5.3(a) are consistent 

with ICAO safeguard (iv), above. 

As to the requirement of U.S. air 

services agreements, the majority of U.S. 

air services agreements specifically 

recognize that user charges may reflect 

but not exceed the full cost to the 

competent charging authorities of 

providing the appropriate airport 

services. (Others simply require that 

charges be just, reasonable and nondiscriminatory.) These provisions do 

not preclude funding facilities that are 

still under construction if the charging 

authority is already incurring costs. We 

note also that the policy requires that all 

planning and environmental approvals 

have been obtained, that financing has 

been obtained, and that construction has 

actually commenced, all of which go to 

assure that the airfield facilities charged 

for will actually be provided. 

Some foreign airlines complained that 

the provision allowing charges for 

facilities under construction would 

permit an airport to build facilities that 

would not ease congestion, such as 

terminal facilities. Airfield charges are 

limited to airfield facilities, however, 

and this applies to facilities under 

construction as well as those in use. 

Charges for a secondary airport. 

Bilateral air services agreements 

recognize that user charges may reflect 

but not exceed the full cost to the 

competent charging authorities of 

providing the appropriate airport 

services ‘‘at the airport or within the 

airport system.’’ This language clearly 

indicates that these agreements 

contemplate charges at one airport for 

costs at another, as long as the charges 

are justified and in compliance with the 

other standards of the agreement, 

including equitable apportionment. 

2. Adequacy of Guidance 

Several airline commenters stated that 

the proposals were too vague to provide 

useful guidance on implementation, and 

would simply lead to litigation. Airport 

commenters that generally supported 

the proposals asked for additional 

guidance about how the costs of projects 

under construction would actually be 

allowed in current charges, and what 

airports would be eligible to use the 

proposed fees. 

Comment: Revise the definition of 

congested airport. Several commenters 

found the definitions of congested 

airport and congested hours incomplete 

or unsatisfactory. A carrier association 

commented that the definition included 

many airports that did not have a 

congestion problem justifying 

extraordinary pricing increases, and 

some airports with no congestion at all, 

such as St. Louis and Pittsburgh. The 

commenter also questioned the policy of 

defining airports as congested based on 

their contribution of one percent or 

more of the national delay total, on the 

basis that many factors could contribute 

to delay other than airfield 

infrastructure capacity. In contrast, 

some commenters representing airports 

argued for an expansion of the 

definition, to include airports with 

congestion issues as defined by the 

airport operator, and airports with local 

congestion but no role in national 

system delays at all. 

Response: The Department 

understands why the definition 

proposed in the January 17 notice was 

not considered sufficiently precise to 

identify an appropriate list of airports 

eligible for the proposed charges. The 

Department is clarifying here that it 

interprets 49 U.S.C. 47175(2) to refer to 

the most recent 2004 Airport Capacity 

Benchmark Report, which has replaced 

the 2001 report. The 2004 report 

includes 35 airports while the 2001 

report examined 31. We expect to 

update section 47175(2) as part of the 

agency’s reauthorization legislation. In 

response to these comments, 

particularly given the status of the 

reauthorization legislation, the 

Department has revised the definition of 

congested airports. The final policy 

adopts a definition that contains two 

criteria, one relating to existing 

congestion and the other to future 

congestion. An airport qualifies as 

currently congested if it accounts for at 

least one percent of system delays 

nationally or is listed in table 1 of the 

FAA’s Airport Capacity Benchmark 

Report 2004. Whether these criteria are 

met should be determined using the 

most recent year for which delay data 

are available and the most recent 

Airport Capacity Benchmark Report 

available. An airport is considered 

congested in the future if it is forecasted 

to meet a defined threshold level of 

congestion in the FACT 2 study or the 

most recent update of that study. The 

two criteria produce lists of specific 

airports, current versions of which have 

been placed in the public docket. The 

group of airports produced by the 

definition is finite, identifiable, and a 

relatively small portion of the several 

hundred commercial airports in the U.S. 

However, the list includes not only 

airports that are now congested, but 

airports that have a real expectation of 

becoming congested in the foreseeable 

future and would have an interest in 

planning to prevent a congested 

condition before it occurs. 

We note that two of the fourteen 

additional airports that qualify as 

congested based upon the 2004 report 

do not currently have congested hours. 

On balance, it is reasonable to adopt the 

same definition here that Congress used 

to define congested airports for 

purposes of environmental streamlining 

in the Vision 100—Century of Aviation 

Reauthorization Act. First, the policy 

amendments, like the environmental 

streamlining provisions in Vision 100, 

are intended to help reduce airport 

congestion and delays. Use of a 

narrower definition would reduce the 

utility of this policy in achieving these 

goals. Second, any viable definition of a 

congested airport has to reflect the 

dynamic nature of the aviation industry. 

This means any definition adopted by 

the Department should, like 49 U.S.C. 

47175(2), consider not only which 

airports account for the most current 

delays in any given year, but also which 

airports are the largest in terms of size 

and activity level and have historically 

played a significant role in the national 

air transportation system. The FAA took 

these latter factors into account in 

identifying the 35 airports in the 2004 

report. There is no other comparable 

list. Third, the FAA currently uses this 

list of airports, known as the operational 

evolution partnership (OEP) airports, to 

monitor progress in adding capacity as 

part of its strategic planning. Finally, 


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the overall list remains viable in terms 

of identifying the largest airports that 

handle the vast majority of operations. 

The OEP airports include all of the large 

hub airports, which have 1% or more of 

the total annual passenger 

enplanements in the country, and 5 

medium hub airports, which have at 

least .25% but less than 1% of passenger 

enplanements. All but two of the 

airports that qualify as congested 

airports only because they are OEP, 

Pittsburgh and San Diego, ranked among 

the 50 busiest in the country in 2006, 

according to FAA OPSNET data (http:// 

www.aspm.faa.gov/opsnet/sys/ 

main.asp). St. Louis and Pittsburgh 

simply illustrate the point that there is 

a twofold test for using the new fees. 

The new fees may not be imposed at an 

airport that does not have congested 

hours, even if it is on the list of 

‘‘congested airports’’ developed by the 

FAA for planning purposes. 

In response to comments, the 

Department is also adding a definition 

for congested hours. A congested hour 

is an hour during which demand 

approaches or exceeds average runway 

capacity resulting in volume-related 

delays. This will typically occur during 

the most desirable peak hours of 

operation at a congested airport, 

although some like LaGuardia Airport 

experience congestion throughout the 

operating day. 

We continue to believe the threshold 

of one percent of national delays is a 

reliable indicator of an airport’s ability 

to accommodate demand. While factors 

other than the airfield may contribute to 

performance—an example offered was 

typical low visibility in morning hours 

at San Francisco International Airport—

those factors can have a direct effect on 

efficiency and be beyond the ability of 

the airport proprietor or the FAA to 

change. Accordingly, it is appropriate to 

use a performance measure that takes 

into account all factors that contribute 

to airfield performance, and the 

percentage of national delays is a 

reliable indicator of airfield 

performance. 

The Department is not adopting the 

recommendation to delegate to airport 

operators the responsibility to 

determine whether there is sufficient 

congestion to justify the proposed 

charges. Because the policies will 

increase fees for some users at peak 

hours, the Department believes they 

should be applied only where 

objectively justified as effective in 

reducing or preventing congestion that 

would have a significant effect on 

delays in the national system. The FAA 

is in the best position to make 

determinations on this effect, and 

believes the definition of congested 

airport for this purpose should remain 

a responsibility of the Department. 

The Department also declines to 

extend the proposed pricing options to 

general aviation airports and other 

commercial airports with little or no 

national impact. This expansion of the 

pricing policies would have no effect on 

the primary issues the Department is 

trying to address: congestion and delays 

experienced at peak periods at the most 

heavily used airports, and the ripple 

effect of those delays throughout the 

national system. 

Comment: The notice did not make 

clear or place sufficient limits on the 

kinds of costs at a secondary airport in 

the local system that could be included 

in the rate base at a congested airport. 

Response: The Department agrees that 

the proposed policy will be more useful 

if it contains more specific guidance 

about what costs could be included in 

the proposed peak hour charges. 

Paragraph 2.4 of the 1996 Rates and 

Charges Policy listed specific costs that 

could be charged to the airfield, but that 

paragraph was vacated by the Air 

Transport Association decision. Clearly 

only the airfield costs at a secondary 

airport could be included in landing 

fees at the congested airport airfield, as 

a matter of reasonableness in a costbased system of charges. Within that 

limitation, the airfield costs that may be 

recovered in the landing fee at the 

congested airport would be the same 

types of costs that are recoverable from 

operators at the primary airport. 

Accordingly, as clarification, the final 

policy adopted notes only that costs of 

the second airport that may be included 

in the rate base of the first airport are 

limited to customary airfield cost center 

charges for the first airport. If the 

airfield costs rated-based at the first 

(congested) airport are reasonable, they 

are reasonable for the airfield at the 

secondary airport as well. If carriers had 

agreed in a lease and use agreement to 

include other, non-airfield costs in a 

landing fee, those costs at the secondary 

airport could not be included in the fee 

at the primary airport (unless the 

carriers agree), because they are not 

costs of the airfield itself. 

Comment: The proposed policy lacks 

guidance on how principal and interest 

costs of projects under construction 

could be rate-based in current charges, 

and how much of the project cost could 

be included. 

Response: First, we would expect 

airports to conform as closely as 

possible to current commercial practice 

in recovering project costs after a project 

is completed and in use. Typically a 

project under construction would be 

financed by interim financing until the 

project is completed, at which time the 

total costs would be capitalized and 

financed through a long-term bond 

issue. When the project is completed, 

carriers would be charged the annual 

debt service over the amortization 

period of the bonds. For charges 

imposed on carriers while the project is 

under construction, the final policy 

states that the amount of project costs 

included in charges during the 

construction period cannot exceed an 

amount corresponding to debt service 

calculated in accordance with a 

commercially reasonable amortization 

period, which would consider the 

expected period of the permanent 

financing and not simply the time 

required for construction. The policy 

continues to make clear that project 

costs paid for during the construction 

period will be deducted from total costs 

financed later. We believe this guidance 

is sufficient to prevent excessive annual 

charges for project costs during 

construction. 

Comment: It is not clear whether the 

three proposed charges can be used in 

combination. 

Response: The preamble to the notice 

noted that the three proposals are not 

intended to be mutually exclusive. In 

other words, if the circumstances justify 

doing so, an airport proprietor might use 

a combination of two, or even all three, 

proposals in setting landing fees during 

periods of congestion. 

3. Effectiveness 

Many air carriers and carrier 

associations commented that at least 

some of the proposals would not have 

any effect on congestion, but would 

simply increase costs. Some airports 

and airport associations, even though 

supportive of the additional flexibility 

in addressing peak hour congestion, 

expressed concern about the 

effectiveness of the proposals in 

influencing carrier scheduling in peak 

hours. 

Comment: Charging for facilities 

under construction and costs of a 

secondary airport would still not 

produce landing fees high enough to 

induce carriers to move flights out of 

peak hours. The basic comment on 

effectiveness of two of the proposals—

forward financing and support of 

secondary airports—is that the 

increased costs of peak period operation 

would still not be enough to induce 

carriers to schedule fewer flights in 

those hours, or to move flights to a 

secondary airport. As long as the fees 

must remain revenue-neutral, even with 

added costs in the peak hours, they 

cannot be set at an effective marketVerDate Aug<31>2005 17:08 Jul 11, 2008 Jkt 214001 PO 00000 Frm 00154 Fmt 4703 Sfmt 4703 E:\FR\FM\14JYN1.SGM 14JYN1

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clearing rate. Reasons offered in support 

of this conclusion included: 

• There are too many negative 

consequences for carriers of not 

maintaining flights at peak hours, 

including coordination with schedules 

throughout the system, and marketing 

considerations of how flights appear in 

reservation systems; 

• Landing fees are only a portion of 

carrier costs for a flight; 

• Carriers have investment in 

facilities at the airport that must be 

productively used; 

• The costs of higher landing fees at 

one airport would be absorbed by 

carriers on a system-wide basis, and 

would not directly affect the calculation 

of benefits of the targeted flights at that 

airport; 

• Increased landing fees for carriers 

have no disincentive effect on 

passengers, who are the actual drivers of 

demand for service in peak hours; 

• Even if fees are passed on directly 

to passengers, those passengers are still 

likely to absorb the additional cost for 

the convenience of traveling at desired 

times. 

Response: Other commenters argued 

that the increased fees did not have to 

have an effect on all operators or flights 

to be effective. Rather, a decision by 

carriers to cancel or reschedule just a 

few marginally profitable operations 

would be sufficient to achieve some 

beneficial effect on congestion in peak 

hours. 

We agree. The notice did not claim 

that the proposed policies would have 

the exact effect of real congestion 

pricing, because they would not result 

in setting rates at the perfect marketclearing price. Without any 

differentiation between peak and offpeak fees, which is the almost universal 

case at present, there is no incentive for 

airlines to reschedule even the most 

marginally profitable operation to avoid 

peak hours. If an increase in fees 

adversely affected the cost-effectiveness 

of even a few of these operations, there 

would be a positive effect on congestion 

and a reduction in delays during peak 

hours. 

Comment: The proposal to allow a 2- 

part landing fee does not require that 

the airport be congested, which would 

permit a landing fee that discriminates 

against smaller aircraft when there is no 

justification related to congestion. 

Response: The existing policy does 

not expressly limit the forms in which 

airport fees can be imposed, as long as 

they are reasonable, not unjustly 

discriminatory, and limited to recovery 

of appropriate airport costs. 

Conventional weight-based fees meet 

these tests. The policy amendments 

make clear that a 2-part fee can be 

justified in a situation where demand 

exceeds capacity in peak hours, and 

smaller aircraft serving relatively fewer 

passengers contribute to the peak hour 

congestion. In this case a 2-part fee 

could be justified by its beneficial effect 

on peak hour congestion without 

significantly affecting the number of 

passengers able to travel at peak hours. 

The amendments do not limit the use of 

a 2-part fee to congested hours, but it is 

not clear what other circumstances 

might justify such a fee. In any event, 

the fee should be justified based upon 

meaningful consultation with carriers, 

including exchange of appropriate 

financial information. The fee, if 

challenged, would require evidence that 

it is reasonable, not unjustly 

discriminatory, and based upon 

legitimate objectives. 

Comment: If the proposed charges are 

adopted as final policy, the Department 

should adopt Option 1, limiting charges 

for secondary airports to peak hours, to 

avoid unfairly penalizing carriers 

already operating outside of peak hours. 

Carriers that already operate outside of 

peak hours noted that imposing the 

costs of secondary airports and projects 

under construction in all hours, rather 

than just congested hours, would 

increase costs for operators that have no 

operations in peak hours. Thus the 

proposed policy would simply increase 

costs for these operators with no 

incentive effect on peak hour 

congestion. 

Response: We agree. This comment 

argues for limiting the additional 

proposed charges to flights in congested 

hours, Option 1. Otherwise, cargo 

operators and other operators that are 

already avoiding congested time periods 

would be penalized without any related 

incentive effect. Charging the additional 

costs in all hours would also result in 

the off-peak operators subsidizing 

operations during peak hours, actually 

reducing the intended disincentive for 

operation during those peak hours. 

Limiting charges for secondary airports, 

as well as facilities under construction, 

to peak hours maximizes the potential 

differentiation between peak and offpeak charges within a revenue-neutral 

system, and best serves the purpose for 

which these charges are authorized. 

Comment: The Department did not 

conduct any analysis of the effects of 

the proposal showing that it would have 

the intended effect on airport 

congestion. 

Response: This comment is 

technically correct but presumes that 

the Department needed quantitative 

analysis before it could conclude that 

the proposals would reduce congestion. 

The premise of the proposal that added 

costs would result in fewer operations is 

based on general pricing theory, and on 

the reliable conclusion that at some 

level of cost and unprofitability, a 

carrier will discontinue or reschedule 

an operation. The Department did not 

attempt a study of the proposals, 

because a conclusion on the 

effectiveness at an airport would 

depend entirely on the circumstances at 

each airport and the details of the 

charges imposed. A simulation of the 

effect of pricing at an airport was 

conducted by the FAA Center of 

Excellence for Operations Research 

(NEXTOR) in 2004. This research was 

done in cooperation with a number of 

stakeholders, including airline 

participants. While the simulation was 

necessarily a simplification of an actual 

airport situation, the results did indicate 

that peak period pricing would affect 

carrier use of peak hours. 

The Department agrees with 

commenters that the proposed policies 

should not be used to increase costs to 

operators at a particular airport unless 

there is reason to believe they would 

have an actual positive effect on 

congestion. That effect could be either 

to relieve existing congestion and 

reduce delays to an acceptable level, or 

to prevent that level of congestion if it 

would otherwise occur. The final policy 

language adopted incorporates two 

changes to reinforce that policy. 

Both charges for facilities under 

construction and charges for a 

secondary airport are authorized only if 

they would have the effect of reducing 

or preventing a level of congestion 

serious enough for the airport to be 

identified on an FAA list of airports that 

either have or are forecasted to have 

among the highest level of operating 

delays at U.S. airports. The fact alone 

that an airport is congested within the 

definition of the policy is not in itself 

sufficient to justify imposing the fees; 

the airport proprietor must have reason 

to believe that the added fees in peak 

periods would have an actual effect in 

reducing or preventing that congestion. 

The airport proprietor may implement 

the added fees as it would any other fee 

change. We expect the airport proprietor 

to engage in meaningful consultation 

with airport users before implementing 

new or increased fees, particularly by 

using a new fee methodology. As we 

discussed in the Notice of Proposed 

Amendment, the airport proprietor 

should provide adequate information to 

enable the airlines to evaluate the 

proprietor’s justification for the new 

charges and to assess their 

reasonableness. Each side should 

thoroughly consider the views of the 


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other. As we indicated in the 1996 Rates 

and Charges Policy, at paragraph 1.1.1, 

and in Appendix 1 to that Policy, we 

encourage the airport operator to 

provide certain historic financial 

information for the airport, economic, 

financial, and/or legal justification for 

change in fee methodology or level of 

fees, traffic information, and planning 

and forecasting information. In 

determining the reasonableness of any 

new fee instituted under this policy, we 

will consider the effectiveness of the fee 

in addressing congestion. Even in the 

absence of a complaint, the FAA may 

request a report on the effectiveness of 

a fee imposed under these amendments, 

under the FAA’s authority in 49 U.S.C. 

47107(a)(15) and the AIP grant 

assurances. 

The policy amendments adopted here 

include new language emphasizing the 

importance of providing this 

information to carriers in proposing 

higher peak period fees, including 

justification for the fees. While the 

airport proprietor’s objective 

justification of the peak period fee is not 

technically required by regulation, it 

may serve to rebut a prima facie case of 

unreasonableness if the fee is 

challenged by a carrier in a proceeding 

before the Department under 49 U.S.C. 

47129, or in an FAA grant assurance 

investigation under 14 CFR part 16. 

We note that one commenter observed 

that the Department had in fact found 

that revenue-neutral peak period pricing 

would not work, in an analysis of peak 

period pricing in connection with the 

environmental impact statement for a 

proposed runway extension project at 

Philadelphia International Airport. 

However, that analysis determined not 

that such pricing would not work at all, 

but rather that it would not reduce 

delays so as to meet the purpose and 

need of the proposed runway project. 

Specifically, the analysis showed that 

peak period pricing would reduce 

general aviation and turboprop 

operations on the shorter runways but 

would have no impact on congestion on 

the primary air carrier runways and 

therefore would not reduce delays at the 

airport. That example is not pertinent to 

the policies adopted here. As discussed 

below in more detail, runway 

development projects are the preferred 

response to demand. Pricing should 

only be used when new runways cannot 

be made available in time to prevent 

significant delays that would adversely 

affect the national air transportation 

system. Moreover, that analysis 

assumed charges only for traditional 

current airfield costs at the congested 

airport itself, and not the additional 

costs of projects under construction and 

secondary airports under consideration 

here. So, the Philadelphia analysis does 

not have any relevance for the policies 

adopted here, and certainly does not 

indicate they would not have an effect 

on congestion at PHL or any other 

airport. 

An airline employee involved in 

scheduling noted the complexities of 

airline scheduling and suggested that a 

carrier’s response would not necessarily 

be what the airport intends. The 

Department recognizes that airline 

scheduling is indeed complex, and that 

carriers take a number of factors into 

account in deciding where and when to 

use a certain aircraft. However, we 

continue to believe that the cost of 

operating at a particular airport at a 

particular time will become a factor at 

some price point. If the proposed 

policies allow an airport operator to 

reach that price point for even a small 

number of marginally efficient 

operations in peak hours, the purpose of 

the policies will have been served. 

A carrier association noted that 

because landing fees work as an 

incentive only on landings, departures 

in peak hours would be unaffected and 

actually subsidized by operators with 

more arrivals in a congested period. The 

Department believes that there will 

typically be enough of a balance 

between arrivals and departures that an 

incentive that works only on arrivals 

would still work in most cases. 

Presumably this issue would be 

addressed in an airport operator’s 

consideration of the fees before they 

were adopted. We note that the 

Massport peak period pricing rule 

applies congestion fees to both arrivals 

and departures, which is permitted 

under the Department Rates and 

Charges Policy as long as total fees do 

not exceed aggregate airfield costs. 

Commenters who concluded that the 

proposals would not reduce congestion 

had different views about what that 

meant. Many carriers argued that 

because the proposed policy changes 

would not achieve their stated purpose 

and would simply increase costs to 

industry and travelers, the Department 

should not adopt the changes. Some 

airports and associations reached the 

opposite conclusion—that because a 

revenue-neutral pricing system could 

not raise fees enough to affect 

scheduling, the Department should 

abandon the requirement for revenue 

neutrality and allow airports to set fees 

high enough to be effective. 

The Department is required to provide 

guidance on reasonable fees based on 

our survey of the nationwide aviation 

field, and we have found that airfield 

fees nationwide typically are based on 

capital costs plus recurring costs 

associated with maintenance, 

upgrading, repaving, and installation of 

safety and security systems. The costbased system of user fees also conforms 

to U.S. international obligations. As 

mentioned above, the Department 

believes that the newly allowed charges 

that may be incorporated in peak fees 

can have an effect on enough operations 

to affect congestion, at least at some 

airports, and should be available to the 

operator of a congested airport where 

that effect can be reasonably predicted 

and ultimately demonstrated. 

Comment: The two-part landing fee 

would simply impose additional costs 

without resulting in schedule changes 

for smaller aircraft as intended. The 

effectiveness of the two-part landing fee 

is a somewhat different issue from the 

two facilities charges. Most commenters 

seemed to accept that a 2-part landing 

fee would have the effect of 

discouraging use of smaller aircraft in 

peak hours, as intended, although they 

did not agree on the fairness or benefits 

of that effect (discussed under 4. Unjust 

discrimination below). However, 

carriers providing international service 

argued that it is not realistic to expect 

feeder flights that use smaller aircraft to 

move out of peak hours, because of the 

inconvenience to international and 

long-haul passengers. So, they argued, it 

is not clear that the increased fees per 

seat for smaller aircraft would have the 

intended effect, at least for some small 

aircraft operators at international 

airports. 

Response: The Department cannot 

anticipate the reaction of each carrier to 

a change in landing fees at peak periods, 

because of the many different factors 

each carrier would need to consider in 

evaluating the costs and benefits of a 

schedule change. The Department 

continues to believe that higher peak 

period fees will affect scheduling for 

some flights of smaller aircraft, even if 

not all, and the effect on some can be 

sufficient to have a positive effect on 

congestion. 

Comment: If airfield costs at a 

secondary airport are charged to 

carriers at a congested airport, the 

resulting below-cost fees at the 

secondary airport might attract new 

service at the secondary airport, rather 

than promoting relocation of flights 

from the congested airport as intended. 

This new service would be in 

competition with carriers at the primary 

airport, as well as being subsidized by 

them. 

Response: This result is theoretically 

possible but is not a reason not to 

permit the charges as proposed, if those 

charges would be effective in relieving 


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congestion at the main airport in the 

system, to the benefit of the carriers 

operating there. 

Comment: The ability of airport 

proprietors to raise landing fees to 

control congestion, as proposed, acts as 

a disincentive for airport proprietors to 

invest in new capacity, which should be 

the primary solution for congestion. 

Response: First, the airport proprietor 

will not actually receive more funds 

over time and across the airport system 

under the policies adopted, although 

current fees at the congested airport may 

be greater than before. The Department 

does agree that building new runways 

and otherwise generating new capacity 

is the preferred response to demand, 

and that pricing should be used only 

where airport development projects 

cannot be built and made available in 

time to prevent congestion. The policies 

adopted should not undercut an airport 

operator’s incentives to add runways 

and expand capacity, because they will 

not allow the airport operator to 

increase system revenue over time. The 

adopted policy is designed to augment 

tools available to local governments 

who operate airports to resolve capacity 

issues. 73 FR at 3312. 

Comment: The January 17 notice 

stated that generation of additional 

revenue for capacity enhancement was 

a stated objective, or at least a benefit, 

of the proposed policies. Airports are 

fully able to recover costs and fund new 

projects now, and do not need 

additional revenue to support capacity 

expansion projects. 

Response: The notice observed that an 

airport proprietor would have 

additional revenue for development, as 

a result of the ability to charge for 

facilities under construction. The notice 

did not claim that result as a purpose of 

the proposals, but did suggest that it 

was a corollary benefit. We agree with 

the comment that generation of revenue 

is not the purpose of the proposals. The 

final policy amendments adopted are 

intended to relieve congestion at peak 

periods at congested airports, not 

generate additional revenue for airports. 

The new charges, if adopted, would 

increase costs for some carriers for peak 

hour operations, but would not increase 

aggregate carrier costs for airfield 

facilities and services in a local airport 

system over time. 

4. Unjust Discrimination 

Many of the comments that criticized 

the proposals cited the unfair and 

disproportionate burden on some 

operators, concluding that the proposed 

landing fees, if adopted by an airport, 

would be unjustly discriminatory 

toward one or more categories of 

operators. As some commenters noted, 

the proposed fees are in part actually 

intended to be discriminatory, so their 

legality depends on whether or not the 

discrimination is sufficiently justified to 

be ‘‘justly discriminatory.’’ A corollary 

issue is whether an otherwise justified 

discriminatory fee has unintended 

adverse effects on operators that do not 

contribute to the congestion problem 

being addressed. 

Typical comments claiming 

discrimination were: 

Comment: The proposed fee increases 

would not induce any movement out of 

the congested hours, so they would 

unfairly raise carrier costs for no reason. 

Response: The fees authorized under 

this policy may be justified in terms of 

having the potential to reduce delays in 

congested hours, including by 

encouraging use of larger aircraft, as 

well as being supported by actual costs. 

As noted above, however, the policy 

changes are adopted based on the 

Department’s belief that the charges can 

have some beneficial effect, because 

some carriers will decide not to pay the 

higher charges to operate in peak hours. 

This conclusion is reinforced by our 

strongly urging airport operators to 

justify and explain to carriers the 

methodology for any fee increase before 

imposing it at a particular airport. 

Comment: The proposed fee increases 

would force some operators to move out 

of the peak hours, even though their 

customers want to travel then. 

Response: This comment is partially 

correct although we add that operators 

scheduling several flights during peak 

periods with smaller aircraft may decide 

to consolidate some flights with larger 

aircraft and thereby not inconvenience 

passengers. The Department 

understands that moving flights out of 

peak hours means moving some 

passenger trips out of peak hours. The 

flights and passengers that are able to 

continue to use peak hours will 

experience less delay, and whether or 

not their fares are increased will be 

determined by the competition, the 

gauge of aircraft used, and other factors. 

Comment: Some operators can move 

flights and others cannot, and the 

higher pricing in peak hours unfairly 

impacts categories of operation that 

cannot move flights out of peak hours or 

to secondary airports. 

Response: From a market standpoint, 

this is essentially another way of saying 

that operation in peak hours has a 

higher value for some operators than for 

others. Charging a higher price in peak 

hours results in the allocation of peak 

hour flights to the carriers that value 

operation in those hours the most. This 

is the market working, not an 

indiscriminate side-effect of higher 

charges. It is true that there are some 

operations that may not be able to 

reschedule or operate at an alternative 

secondary airport However, those 

operations receive the same benefit as 

all other operations from a reduction in 

peak hour congestion at the congested 

airport. 

Comment: If costs for facilities under 

construction and secondary airport 

airfields are included in the proposed 

charges applied to all operations 

throughout the day, some categories of 

operation will be penalized by higher 

fees even though they have no role in 

the current congestion or the intended 

solution. 

Response: We agree. Accordingly, the 

final policy permits charges for facilities 

under construction and the costs of a 

secondary airport only in peak hours at 

the congested airport, i.e., hours in 

which that airport experiences delays 

that qualify it as a congested airport 

(Option 1 for the proposed charge for 

facilities under construction). 

Comment: Under a 2-part landing fee, 

some carriers and categories of 

operation will have no ability to 

upgauge, and will simply have to absorb 

higher fees or cease operation in the 

market. 

Response: This may be true for some 

operators. The effect is mitigated with 

respect to markets subsidized under the 

Essential Air Service (EAS) Program, 

because the final policy allows an 

airport operator to exempt those markets 

from the three new policies (although 

such operations would still be subject to 

conventional landing charges). 

However, for other operations, carriers 

will need to assess the feasibility of each 

flight with a particular aircraft type, 

taking into consideration the effect of 

the per-operation component of the 

landing fee at the airport. 

Commenters also offered specific 

examples of how the proposed charges 

would result in a discriminatory effect 

for some operators. Some examples 

cited in the comments are: 

Comment: Raising costs to encourage 

use of larger aircraft unfairly targets 

operators of regional jets and the 

markets they serve. One association and 

carriers operating regional jets argued 

that segments of the national air service 

market depend on that size aircraft, and 

that efforts to eliminate small jet 

operations are inconsistent with 

§ 40101(a)(16), which establishes a 

policy of ensuring that residents of 

small and rural communities have full 

access to the national air transportation 

system. Several small U.S. airports and 

communities complained that the 

pricing incentive to upgauge from 


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regional jets to larger aircraft, if 

effective, would jeopardize their 

connections to hub airports, because the 

market and sometimes the airport would 

not accommodate larger jets. Some 

airport representatives commented that 

the Department should develop a list of 

criteria for small communities to be 

eligible for exemption from higher 

landing fees, and allow airport operators 

to incorporate those exemptions in their 

fees to protect small community access. 

Some commenters argued that carriers 

and passengers want to have regional jet 

service, and that the Department, 

therefore, should ‘‘let the market work’’

by not allowing airports to create a 

disincentive to that service. 

Response: The notice did not directly 

address the potential impact on small 

community service. We agree that 

higher peak period charges, or a higher 

per-operation landing fee, could be a 

disincentive to operation of smaller 

aircraft types in peak hours—that is one 

purpose of the proposed policy. While 

it is not the Department’s intention to 

adopt a policy that would adversely 

affect service in any particular market, 

we understand the possibility that 

higher peak period landing fees could 

result in a reduction or even loss of 

service in marginally profitable markets. 

The final policy adopted permits an 

airport operator to exempt flights from 

the added peak period charges, if the 

flights are being subsidized under the 

EAS Program. The ability of an airport 

operator to exempt EAS-subsidized 

flights from peak period pricing has 

been recognized by the Department 

previously. Not all of the markets served 

by regional jets and smaller aircraft will 

be eligible for this exemption, however, 

and airport proprietors may not extend 

the exemption to non-EAS markets, 

because that action would be considered 

local regulation of air carrier rates, 

routes and services. Accordingly, it is 

possible that service in some markets 

could be adversely affected as described 

in the comments. 

As a result, actually ‘‘letting the 

market work’’ may well not provide the 

broadest or most uniform distribution of 

service to all markets from the 

congested airport. It will, however, 

come closer to providing the most 

economically efficient use of the 

congested airport for the greatest 

number of travelers. Arguably, open 

access for all to the scarce resource of 

a congested hub airport at peak hours, 

when demand for access exceeds airport 

capacity, is itself a distortion of the 

market. Conversely, a requirement to 

pay more for that resource during 

periods of congestion is actually closer 

to letting the market work. 

Comment: Foreign carriers will be 

disproportionately affected by the 

proposed charges, because they cannot 

avoid them or absorb costs across a 

larger domestic system. Foreign carriers 

and governments commented that these 

carriers could not use off-peak hours 

because of the restrictions on operation 

in European and Asian airport markets, 

and could not operate at secondary 

airports because those airports would 

not be U.S. ports of entry. Accordingly, 

these carriers would bear the full effect 

of the increased landing fees, with no 

ability to avoid the costs or to spread the 

costs across other flights as U.S. 

competitors could do. 

Response: We agree that there may be 

limits on foreign carriers’ ability to 

avoid the fees, although they are not 

unique in that regard. International 

flights by U.S. carriers will be affected 

in exactly the same way. To the extent 

that higher charges at peak periods 

reduce congestion, carriers operating 

international service will benefit from 

the resulting reduction in operating 

delays and greater scheduling 

reliability. The policy allowing airport 

operators to charge higher fees in peak 

congested hours recognizes that many 

operators will choose to pay the higher 

fees to retain access to peak hours, for 

a variety of business reasons; the need 

for international flights to operate in 

those hours is one such reason. Those 

carriers get something in return for the 

higher fees: a reduction in operating 

delays. 

U.S. carriers claimed that the 

increased fees would unfairly fall on 

U.S. carriers, because foreign carriers 

would necessarily be exempted from the 

fees in order to comply with ICAO 

standards and air service agreements. As 

discussed in part in this notice under 

Legal Authority, we do not believe ICAO 

guidance or air service agreements 

require exemption of any operators from 

the proposed charges, so there would be 

no difference in the fees charged to U.S. 

and foreign carriers. 

Comment: The proposed policies 

would adversely affect transborder 

Canadian service disproportionately, 

because many flights between Canada 

and major U.S. airports use regional 

jets. This is similar to the complaints by 

U.S. carriers that use regional jets and 

cities those carriers serve, but with the 

additional consideration of provisions 

in the bilateral agreement with Canada. 

Canadian carriers, airports, and a carrier 

association argued that the U.S.-Canada 

bilateral agreement would prohibit the 

application of some or all of the three 

proposed policies to transborder flights. 

Response: The U.S.-Canada bilateral 

agreement is similar to other U.S. air 

service agreements. For the reasons 

discussed above under Legal Authority, 

the Department does not believe the 

terms of those agreements prohibit the 

proposed charges, and reaches the same 

conclusion with respect to the U.S.- 

Canada bilateral agreement. There is no 

language in the agreement that 

specifically requires weight-based 

landing fees or prohibits other 

methodologies for landing fees. The 

agreement contains the standard 

requirement that fees be equitably 

apportioned among categories, but that 

in itself does not prohibit a peroperation component in the landing fee 

with justification based on the 

circumstances existing at the airport. 

With respect to charges for facilities 

under construction, the agreement 

provides only that charges may not 

exceed the costs of providing 

appropriate airport services. We believe 

the policy allowing an operator of a 

congested airport to impose the costs of 

airfield facilities already under 

construction is not inconsistent with 

this language. Finally, we note that the 

agreement permits charges for services 

‘‘at the airport or within the airport 

system,’’ and thus does not prohibit 

appropriate charges for a secondary 

airport in a system where the primary 

airport is congested due to excess 

demand. 

We recognize that the proposed 

policies could have some effect on 

carrier decisions regarding transborder 

service, as with service in U.S. markets 

at congested airports. However, the 

policies would apply to Canadian 

markets and Canadian carriers in 

exactly the same way as they would to 

U.S. markets and carriers, and would 

not be prohibited by antidiscrimination 

or other provisions in the U.S.-Canada 

bilateral agreement. One commenter 

expressed concern about the effect on 

access by Canadian carriers to Reagan 

Washington National and LaGuardia 

Airports, which is expressly guaranteed 

by the agreement. Both airports are 

included on the list of congested 

airports. However, as Reagan 

Washington National does not currently 

have any congested hours, these policies 

would not be used there at this time. . 

Any peak hour charges adopted by the 

Port Authority of New York and New 

Jersey at LaGuardia would need to take 

into consideration the terms of our 

bilateral aviation agreement with 

Canada. 

Comment: Carriers that operate a 

single aircraft type have no opportunity 

to up-gauge, and would simply pay 

higher fees for the same operation, or 

cancel some operations. 


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Response: The policy allowing airport 

operators to charge higher fees in peak 

periods is not directed toward any 

particular operator, but will have an 

effect on any operator using aircraft that 

are not economically feasible with those 

fees in effect. The fact that an operator’s 

entire fleet will be affected to some 

degree is not a persuasive reason to 

guarantee that operator lower-cost 

access to peak hours at a congested 

airport by exempting it from the general 

effect of the pricing regime. Some 

operators will find it beneficial to pay 

the higher peak fees to continue peak 

hour operations, along with a reduction 

in operating delays in those hours, but 

others may not. The Department does 

not consider that possibility a reason to 

deny airport operators the use of the 

proposed policies to enhance the effect 

of peak period pricing at their airports, 

when justified by peak hour congestion. 

Comment: If the costs of future 

projects and secondary airports are 

added to charges throughout the day at 

the primary airport, rather than just 

during peak hours, then the burden falls 

unfairly on operators that do not 

contribute to the problem. Cargo 

operators operate largely in night hours 

when there is no issue of congestion. 

Response: As discussed under 

Effectiveness above, the final policy 

avoids this result by limiting the 

application of the additional costs to 

operations in peak hours. 

Comment: The fees would make 

operations in peak hours far more 

expensive for general aviation and ondemand air taxi operators, even though 

those operators make no significant 

contribution to the current congestion. 

Response: The policy adopted, like 

the 1996 Rates and Charges Policy as a 

whole, does not include any general 

exception for general aviation. However, 

airfield charges must be reasonable and 

not unjustly discriminatory. Presumably 

an analysis of a proposed peak period 

fee by the airport proprietor would 

reach some conclusion about whether 

general aviation flights are contributing 

to peak hour congestion at the airport or 

not, and support a corresponding 

pricing policy for general aviation 

flights. Proposed charges on general 

aviation could reflect, for example, 

whether general aviation flights at the 

airport compete with air carrier aircraft 

for use of the same runways. For this 

reason it is more appropriate to consider 

general aviation charges through actual, 

case-by-case analyses of their activity 

and impacts on congestion at each 

airport, rather than define a separate 

policy for general aviation in this policy 

statement. 

5. Comments That the Proposals Should 

Define an Airport Proprietor’s Authority 

More Broadly 

Operators of large airports and 

associations representing airports 

generally commented favorably on the 

intent of the proposed policy to clarify 

and expand the ability of airport 

operators to impose higher fees in peak 

hours at a congested airport. However, 

some commenters requested that a final 

policy be revised to avoid actually 

limiting an airport operator’s existing 

proprietary authority. Some commenters 

further requested that the final policy 

contain language expressly expanding 

the airport operator’s flexibility to 

impose fees beyond what the 

Department proposed. 

Comment: The policy should clarify 

that an airport operator may use a 

‘‘limitless’’ variety of methods to set 

landing fees, including a purely peroperation fee. Specifically allowing a 2- 

part fee suggests airports cannot impose 

other kinds of fees besides weight-based 

and 2-part weight-based and peroperation fees. Also, the policy should 

not rule out innovative fees such as 

negative landing fees at off-peak hours. 

Response: The policy does not define 

the universe of kinds of landing fee an 

airport operator may impose, but only 

clarifies that a 2-part landing fee may be 

used at peak hours to relieve congestion, 

without necessarily being considered to 

be unjustly discriminatory. Other kinds 

of landing fees are possible, but any 

such fee would need to be both 

reasonable and not unjustly 

discriminatory. ‘‘Negative landing fees’’

would necessarily involve cash 

subsidies to carriers operating in offpeak hours, generated by fees on other 

operations in peak hours. Such 

subsidies, even if considered 

nondiscriminatory, could be 

inconsistent with requirements for use 

of airport revenue and would be likely 

to raise issues under U.S. international 

obligations. Negative landing fees were 

not proposed in the notice, and are not 

included in the final policy. 

Comment: Clarify that airport 

operators are not preempted from using 

landing fees to create economic 

incentives for carriers to alter schedules 

at peak times, up-gauge aircraft types, 

or shift service to less congested 

airports. A landing fee can affect carrier 

business and marketing decisions not 

only indirectly, but also with the stated 

purpose of having a direct effect on 

carrier decisions. 

Response: As discussed under Legal 

Authority above, an airport operator 

pursuing a legitimate objective in the 

exercise of its proprietary authority 

consistent with its other responsibilities 

under Federal law has some ability to 

influence carrier decisions. So, an 

airport proprietor can charge a higher 

landing fee in peak hours to influence 

carriers to use less congested hours, 

because reducing excess demand that 

results in a high level of operating 

delays on the airfield at peak hours is 

a legitimate objective of the Department 

and the airport proprietor. However, 

that authority is not unlimited, given 

the prohibition on airport regulation of 

airline rates, routes, and services in 49 

U.S.C. 41713(b). A landing fee designed 

to implement a preference for certain 

aircraft types, but not justified by any 

condition or purpose related to the 

functioning of the airfield itself would 

be preempted under § 41713(b). 

Comment: The Department should 

abandon the limitation on airfield fees 

to historic cost valuation and revenueneutral airfield fees, and allow airports 

to use market pricing. 

Response: The policies proposed were 

intended to permit airport proprietors 

some flexibility to use pricing to manage 

conditions of serious peak hour 

congestion, without deviating from the 

policy of cost-recovery, revenue-neutral 

charges. See 1996 Policy, ¶ 2.2. 

Moreover, the requested authority 

would be unnecessary to implement the 

policies proposed in the notice. 

Comment: In allowing charges for 

facilities under construction, the 

Department should Adopt Option 2 for 

financing future construction, to permit 

the higher fees to be imposed 

throughout the day. Also, the policy 

should extend future financing to 

include new airports, not just new 

facilities. 

Response: The final policy adopts 

Option 1, which provides that the added 

charges will be considered reasonable 

only in hours of peak congestion. The 

purpose of the policy is not cost 

recovery or revenue generation; rather 

the purpose is to allow for increased 

differentiation between peak and nonpeak period pricing at the airport. 

Adding the charges of future facilities in 

off-peak hours works against this goal, 

and against the incentive for 

encouraging off-peak operation. It also 

penalizes operators already operating 

outside congested hours, by imposing 

unnecessary costs on those operators 

with no possible incentive effect on 

scheduling. As airports typically adjust 

their fees regularly and can capitalize 

the project costs remaining after 

construction, limiting the charges to 

hours of peak congestion is not expected 

to be difficult or increase administrative 

burdens on airports. 


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With respect to allowing charges for 

the costs of future airports under 

construction, we do not see the need for 

a statement of general policy on this 

issue. Cases in which the policy might 

be applied would rarely occur, and any 

decision on the reasonableness of the 

charges might be highly dependent on 

the facts of a particular case. The final 

policy adopts the provision on charges 

for facilities under construction as 

proposed—limited to facilities at the 

airport where the charges are imposed. 

Comment: In allowing charges for the 

costs of secondary airports in the region, 

the Department should extend the list of 

secondary airports eligible for crosssubsidy to regional airports not owned 

by the same sponsor as the primary, 

congested airport. The final policy 

should allow airport operators to enter 

into agreements, approved by the 

Department, for support of one airport 

with fees from another. 

Response: The FAA has traditionally 

not allowed airports with different 

owners to enter into agreements that 

affect access to the airports, primarily 

because one airport sponsor cannot 

delegate its responsibility for reasonable 

access under its grant assurances to 

another airport operator, or guarantee 

access at an airport it does not control. 

This new request is similar in that an 

airport operator would be charging its 

carriers for the access benefits at another 

airport, and the costs of operation of 

that airport, when it had no control over 

the access to or costs at that second 

airport. The final policy adopts the 

provision as proposed, limiting charges 

to the costs of airports owned or 

operated by the same airport proprietor 

that operates the congested airport. 

Comment: The Department should 

clarify that the proposed fees could be 

implemented outside the airport’s 

existing lease and use agreements. 

Response: The Department assumes 

that airport proprietors would take into 

account any existing agreements with 

carriers before imposing any new 

charges, and could only impose those 

charges as the agreements provided or 

when they expired. Accordingly, the 

final policy amendment does not 

include the requested language. 

Comment: The notice stated that an 

airport proprietor ‘‘may consider the 

presence of congestion at the 

[congested] airport when determining 

the portion of the airfield costs of the 

other airport to be paid by the users of 

the first airport during periods of 

congestion.’’ This can be understood to 

mean that the airport can impose the 

opportunity costs of congestion in its 

landing fees. 

Response: This statement in the 

notice was intended merely to refer to 

a determination of the portion of the 

second airport’s costs that could be 

included in fees at the congested 

airport. Nothing in the proposed 

amendments would authorize an airport 

proprietor to charge airfield fees that 

include any amount in excess of the 

airport proprietor’s actual system costs. 

Other commenters expressed confusion 

about the intended meaning of this same 

language, and it is not included in the 

final amendment. 

The Policy Amendments Adopted 

After review of the public comments, 

the Office of the Secretary of 

Transportation and the FAA have 

determined that the proposed 

amendments to the 1996 Rates and 

Charges Policy should be adopted, with 

revisions to address concerns and 

suggestions raised in the comments. The 

amendments do not alter one of the 

fundamental principles of the 1996 

Rates and Charges Policy: That 

reasonable airfield fees must be based 

on the capital and operating costs of the 

facilities for which the fees are assessed. 

None of the amendments will permit an 

airport to generate revenues in excess of 

the allowable costs of providing airfield 

facilities and services at the congested 

airport and its related airport system, as 

defined in accordance with the 1996 

Rates and Charges Policy. 

The effect of each of these 

modifications is to allow the airport 

operator to increase the cost of landing 

at a congested airport during periods of 

congestion, even if congestion lasts 

through much of the day. By raising the 

costs of using the congested facilities at 

peak times, the airport operator would 

provide an incentive for current or 

potential aircraft operators to (1) adjust 

schedules to operate at less congested 

times (if they exist); (2) use less 

congested secondary or reliever airports 

to meet regional air service needs; or (3) 

use the congested airport more 

efficiently by up-gauging aircraft. The 

three amendments are not intended to 

be mutually exclusive. In other words, 

if the circumstances justify doing so, an 

airport proprietor might use a 

combination of two, or even all three, 

charges in setting landing fees during 

periods of congestion. Any charges 

imposed on international operations, 

whether using this proposed flexibility 

or not, would also have to comply with 

the international obligations of the 

United States, including requirements 

that the charges be just, reasonable, and 

equitably apportioned among categories 

of users. 

The Department continues to consider 

airport development and expansion of 

airport capacity to be the most 

appropriate and the preferred long-term 

action to address airport congestion and 

delay. However, at airports that meet the 

definition of congested airports when 

development projects are planned but 

will not be available in time to prevent 

increasing delays, and at those 

congested airports where capacity 

expansion is simply not feasible, the 

amendments adopted in this action will 

provide the airport proprietor additional 

tools to manage available capacity. 

Principles Applicable to Airport Rates 

and Charges 

The amendments adopted include a 

new paragraph 6 in the statement of 

basic principles applicable to airport 

rates and charges. The new paragraph 

affirms the requirement that all airport 

charges imposed on international air 

transportation in the United States 

comply with the international 

obligations of the United States. This is 

not a change in policy, because this 

requirement has always applied. 

However, in view of the many 

comments expressing concern that the 

proposed charges would not comply 

with international agreements and other 

authority, the Department is revising the 

amendments to include provisions 

affirming the strong commitment of the 

United States to meet its international 

obligations in the oversight of airport 

charges in the U.S. The amendments 

adopted, therefore, include an express 

statement of the requirement for fees at 

U.S. airport to meet all U.S. 

international obligations regarding 

airport charges, in the same terms used 

in U.S. bilateral air service agreements. 

These obligations, of course, apply to 

the entire Rates and Charges Policy and 

not just the amendments adopted in this 

action. 

Special Provisions Applicable to 

Congested Airports 

The amendment adds a new section 6, 

Congested Airports. Paragraph 6 defines 

a congested airport for the purposes of 

the Rates and Charges Policy according 

to two criteria, one relating to existing 

congestion and the other to future 

congestion. An airport qualifies as 

currently congested if it accounts for at 

least one percent of system delays 

nationally or is listed in table 1 of the 

FAA’s Airport Capacity Benchmark 

Report 2004. Whether these criteria are 

met should be determined using the 

most recent year for which delay data 

are available and the most recent 

Airport Capacity Benchmark Report 

available. An airport is considered 


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Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 40443 

congested in the future if it is forecast 

to meet a defined threshold level of 

congestion in the FACT 2 study or the 

most recent update of that study. This 

revised definition responds, in part, to 

comments that the proposed definition 

included some airports that were not 

congested. Note that while the 

definition defines an eligible category of 

airport for use of fees to control 

congestion, there must be a congestion 

problem and those fees must still be 

reasonable. The new fees may not at this 

time be imposed at airports like Reagan 

Washington National, St. Louis, and 

Pittsburgh that do not currently have 

congested hours. An airport could not 

impose fees today based on a forecast 

that it will become congested years in 

the future. It could, however, put in 

place measures to address future 

congestion that would become effective 

when it met the definition of congested 

or was about to do so. Section 6 also 

defines ‘‘congested hour’’ as an hour 

during which demand exceeds average 

runway capacity resulting in volumerelated delays or is anticipated to do so. 

New paragraph 6.1 emphasizes the 

importance of providing operators an 

explanation or justification for any use 

of the peak period fees authorized in 

this policy change and of consultations 

with carriers as already provided in the 

Rates and Charges Policy. The 

paragraph expressly references 

Appendix 1 to the Policy, containing a 

list of the information the Department 

would expect the airport proprietor to 

provide to carriers and other operators. 

New paragraph 6.2 clarifies that an 

airport proprietor may adopt measures 

to address congestion even before 

conditions would justify peak period 

pricing, as long as that pricing does not 

take effect until the conditions 

described in that paragraph are met. 

Such a measure would include a 

specified condition, such as number and 

severity of chronic operating delays, 

that triggered the implementation of the 

pricing. Advance consideration of the 

need for peak period pricing not only 

allows full time for consultation with 

users, but also allows users to adjust 

schedules well in advance to avoid 

congestion that would trigger the peak 

period pricing. 

New paragraph 6.3 provides that an 

airport operator that imposes peak 

period charges for facilities under 

construction, or for the costs of a 

secondary airport in the system, can 

exempt from those charges any flights 

operated under an Essential Air Service 

(EAS) Program subsidy, in accordance 

with 49 U.S.C. 41731–41735. The 

Department has previously 

acknowledged that an airport proprietor 

may exempt EAS subsidized flights 

from general fee increases that would 

jeopardize that service. That 

determination is based on the 

Supremacy Clause of the U.S. 

Constitution and the interpretation that 

the proprietary exception to Federal 

preemption only permits an airport 

proprietor to take actions consistent 

with the implementation of a Federal 

program, and not to make its own 

decision about preferences for certain 

markets. As discussed in the response to 

comments above, the Department sees 

no authority for an exemption beyond 

the EAS Program eligible airports. 

Two-Part Landing Fee 

Paragraph 2.1 is amended by adding 

a new paragraph 2.1.4 as proposed, to 

clarify that an airport proprietor may 

impose a landing fee that incorporates 

both weight-based and per-operation 

elements. There are conditions on the 

use of a two-part fee: It must reasonably 

allocate costs to users on a rational and 

economically justified basis, and it may 

not generate fees in excess of allowable 

airfield costs. 

New subparagraph 2.1.4(a) notes that 

a positive effect on congestion 

reduction, such as enhancing the 

number of passengers accommodated 

during congested hours, may justify a 

fee incorporating a substantial peroperation component, such as the twopart landing fee. The policy does not 

limit the use of two-part landing fees to 

congested airports, although the 

Department does not currently see any 

alternative justification for such fees. 

New subparagraph 2.1.4(b) provides 

for the exemption of EAS-subsidized 

markets from the application of a twopart landing fee, and provides guidance 

on how such flights would otherwise be 

charged for their share of airfield costs. 

Exemption from the two-part fee would 

not be a waiver of all fees, but rather an 

exemption from the fee increase due to 

the per-operation component of the twopart fee. The assumption is that under 

an exemption, an EAS operator would 

continue to pay the weight-based charge 

in effect before adoption of the two-part 

fee (or that would have been in effect if 

all carriers were paying a weight-based 

charge). The paragraph also makes clear 

that where an exemption results in 

lower charges for EAS operators, the 

resulting loss in revenue cannot be 

made up by an increase in the landing 

fees charged to other operators. 

Charges for Facilities Under 

Construction 

The policy as amended would replace 

paragraph 2.5.3, which was vacated by 

the court of appeals, with a new 

paragraph addressing charges for 

facilities under construction, as 

proposed in the notice. For the reasons 

explained in the notice, the replacement 

language is consistent with the court’s 

opinion that vacated the original 

paragraph 2.5.3. The final policy adopts 

Option 1 in the notice, limiting the 

added charges for facilities under 

construction to hours when peak hour 

pricing would be justified. The 

paragraph as adopted includes the three 

conditions in the proposal that serve to 

limit the charges to facilities that are 

approved and under construction. This 

effectively limits additional landing fees 

to projects for which the airport 

operator is already incurring 

construction costs, and which will be in 

use in the relatively near future. In 

response to comments, paragraph 2.5.3 

as adopted also includes a new fourth 

condition not in the notice: That the 

added costs for current operators would 

have the effect of reducing or preventing 

congestion and operating delays at the 

airport. While the notice limited this 

charge to congested airports, it did not 

contain an express condition that the 

charge actually have a positive effect on 

congestion, although that condition was 

implied. This new language adds an 

express statement of that condition. For 

a new charge, the effect could be 

predicted using information available. 

For a charge that had been in effect for 

some time, there would be actual 

performance data available for review of 

the effectiveness of the charge. 

New paragraph 2.5.3(a) is adopted as 

proposed, simply requiring that any 

construction costs reimbursed during 

the construction period not be included 

in the final project cost when 

completed. 

The final policy deletes the proposed 

paragraph 2.5.3(b), which suggested that 

an airport proprietor consult the ICAO 

Airport Economics Manual. The 

Department strongly urges that charges 

be constructed in accordance with this 

Manual; however, the new paragraph 6 

of the Principles, stating clearly the 

broad obligation to comply with all U.S. 

international obligations, makes the 

reference to one ICAO manual too 

limiting. 

The policy adopted includes a new 

paragraph 2.5.3(b) clarifying that a 

charge for a facility under construction 

cannot exceed the actual costs as 

incurred by the airport proprietor. It 

indicates that the costs can be recovered 

as they are incurred, but the airport 

proprietor could not accumulate funds 

in advance of requirements. Second, 

charges are limited to the debt service 

over a conventional amortization period 

which takes into account the expected 


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40444 Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 

term of the permanent financing. Some 

air carriers commented that the policy 

did not prevent an airport proprietor 

from charging all costs of construction 

as incurred, even though the finished 

project would normally be financed and 

paid off through debt service over a 

period of years. While the policy does 

not prescribe in detail any particular 

methodology, it does limit the added 

charge in any year to a commercially 

reasonable amount for debt service on 

the financing for the particular project 

amount involved. 

The final policy as adopted includes 

a conforming amendment to paragraph 

2.4.4 not included in the notice. 

Paragraph 2.4.4, relating to recovery of 

costs for debt service, contains a 

parenthetical ‘‘(for facilities in use),’’

which states the general policy limiting 

charges to facilities that are completed 

and in use by the operators being 

charged. To assure internal consistency 

of the amendments, the final policy 

amends the parenthetical to read, ‘‘(for 

facilities in use or in accordance with 

paragraph 2.5.3),’’ to provide for the 

limited exception for facilities under 

construction at congested airports. 

Charges for the Costs of a Secondary 

Airport 

As stated in the notice, paragraph 

2.5.4 of the 1996 Rates and Charges 

Policy permits the operator of an airport 

to include in the rate base of that airport 

costs of another airport currently in use 

if three conditions are met: (1) The two 

airports have the same proprietor; (2) 

the second airport is currently in use; 

and (3) the costs of the second airport 

to be included in the first airport’s ratebase are reasonably related to the 

aviation benefits that the second airport 

provides or is expected to provide to the 

aeronautical users of the first airport. 

Subparagraph (a) further provides that 

the third condition will be presumed to 

be satisfied if the second airport is 

designated as a reliever airport to the 

first in the FAA’s National Plan of 

Integrated Airport Systems (NPIAS). 

The notice proposed to amend 

subparagraph 2.5.4(a) to add another 

category of airports to the 

presumption—those that the FAA has 

designated as secondary airports serving 

cities, metropolitan areas, or regions 

served by congested airports. The three 

conditions in paragraph 2.5.4 continue 

to apply to this new presumption. The 

final policy includes the proposed 

amendments with one change: To 

satisfy the presumption that the 

secondary commercial airport benefits 

users of the congested airport, the policy 

as adopted provides that the added costs 

in peak hour charges at the congested 

airport must also have the effect of 

reducing or preventing further 

congestion and operating delays at that 

airport. The notice assumed that the 

proposed charges would have the effect 

of relieving congestion at the congested 

airport, but did not actually make that 

effect a requirement for the use of the 

charges by the operator of a congested 

airport. As with the charges for facilities 

under construction, for a new charge the 

effect could be predicted using 

information available. For a charge that 

had been in effect for some time, there 

would be actual performance data 

available for review of the effectiveness 

of the charge. 

FAA has identified the secondary 

airports that would meet the first two 

criteria for the presumption in 

paragraph 2.5.4(a)(2) (i.e., the first 

airport is congested, and the secondary 

airport serves the same community or 

region), and monitors development 

projects at these airports in the FAA 

strategic plan or ‘‘Flight Plan.’’ The 

current list of secondary airports has 

been placed in the public docket. The 

FAA has also posted the current list of 

designated secondary airports on its 

Web site, and will keep it up to date. 

The notice also proposed to add a 

new subparagraph 2.5.4(e) stating, first, 

that the proprietor of a congested airport 

may consider the presence of congestion 

when determining the share of the 

airfield costs of the secondary airport to 

be included in the rate base of the 

congested airport during periods of 

congestion, and second, that in no event 

would the airport operator be allowed to 

generate more revenue from airfield 

charges imposed at the two airports than 

the costs of operating the two airfields. 

Commenters were confused by the first 

part of that sentence, and some 

commenters entirely misunderstood its 

intended meaning. In lieu of the 

language as proposed, the final policy 

adopted contains a more direct 

statement in paragraph 2.5.4(a)(2) that 

charges for a secondary commercial 

airport may be used only when they 

have an actual effect in relieving or 

preventing congestion. 

The final policy includes a new 

paragraph 2.5.4(e), which includes a 

slight revision of the second part of 

proposed paragraph (e) to expressly 

limit total charges to the allowable costs 

of the congested and secondary airport 

combined. New paragraph (e) adds new 

language clarifying that the allowable 

charges for a secondary airport are 

limited to customary airfield cost center 

charges. Some commenters expressed 

concern at the lack of guidance on costs 

of the secondary airport that could be 

charged to operators at the congested 

airport. The Department has not 

attempted to prescribe detailed 

guidance, in consideration of the 

variation in local rate methodologies at 

airports. In lieu of detailed guidance, 

the policy limits charges to airfield 

costs, and to those airfield costs which 

would be customary for the 

methodology in effect in that airport 

system. We believe that guidance will 

be sufficient to evaluate the 

reasonableness of a proposed peak hour 

charge that includes costs at a secondary 

airport. 

Finally, the final policy adopted 

includes a conforming amendment to 

paragraph 2.2 of the Rates and Charges 

Policy. Existing paragraph 2.2 states the 

general rule that airfield charges cannot 

exceed the costs to the airport proprietor 

of providing airfield services and assets 

currently in use unless users agree 

otherwise. The final policy makes the 

carrier approval paragraph 2.2(a), and 

adds a paragraph 2.2(b) with an 

alternate exception: if the charge is 

imposed in accordance with paragraph 

2.5.3, for facilities under construction, 

or paragraph 2.5.4(a), for the costs of a 

secondary airport. With these limited 

exceptions, the general rule limiting 

charges to facilities currently in use 

continues to apply. 

Amendment of the Rates and Charges 

Policy 

In consideration of the foregoing, the 

Department of Transportation amends 

the Policy Regarding Airport Rates and 

Charges, published at 61 FR 31994 (June 

21, 1996) as follows: 

Policy Regarding Airport Rates and 

Charges 

Principles Applicable to Airport Rates 

and Charges 

1. In Principles Applicable to Airport 

Rates and Charges, add a new paragraph 

6 to read as follows: 

6. Fees imposed on international 

operations must also comply with the 

international obligations of the United 

States, which include the requirements 

that the fees be just, reasonable, not 

unjustly discriminatory, equitably 

apportioned among categories of users, 

no less favorable to foreign airlines than 

to U.S. airlines, and not in excess of the 

full cost to the competent charging 

authorities of providing the facilities 

and services efficiently and 

economically at the airport or within the 

airport system. 

Fair and Reasonable Fees 

2. Amend subsection 2.1 by adding a 

new paragraph 2.1.4 as follows: 

2.1.4 An airport proprietor may 

impose a two-part landing fee consisting 


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Federal Register / Vol. 73, No. 135 / Monday, July 14, 2008 / Notices 40445 

of a combination of a per-operation 

charge and a weight-based charge 

provided that (1) the two-part fee 

reasonably allocates costs to users on a 

rational and economically justified 

basis; and (2) the total revenues from the 

two-part landing fee do not exceed the 

allowable costs of the airfield. 

(a) The proportionately higher costs 

per passenger for aircraft with fewer 

seats that will result from the peroperation component of a two-part fee 

may be justified by the effect of the fee 

on congestion and operating delays and 

the total number of passengers 

accommodated during congested hours. 

(b) An airport proprietor may exempt 

flights subsidized under the Essential 

Air Service Program from the general 

application of a 2-part landing fee, and 

instead charge those flights a landing fee 

that would have been charged if a 

conventional weight-based fee was in 

effect. To the extent an exemption 

reduces total airfield fees recovered, the 

difference may not be recovered by 

increasing charges to other operators 

currently operating at the airport. 

3. Revise paragraph 2.2 to read: 

Revenues from fees imposed for use of 

the airfield (‘‘airfield revenues’’) may 

not exceed the costs to the airport 

proprietor of providing airfield services 

and airfield assets currently in 

aeronautical use unless: 

(a) Otherwise agreed to by the affected 

aeronautical users; or 

(b) The fee includes charges in 

accordance with paragraph 2.5.3 or 

paragraph 2.5.4(a), and there is a 

corresponding reduction in fees for 

users that would otherwise have paid 

those charges. 

4. Amend paragraph 2.4.4 by revising 

the parenthetical phrase to read: 

‘‘ * * * (for facilities in use or in 

accordance with paragraph 2.5.3) 

*** ’’

5. Add a new paragraph 2.5.3 to read 

as: 

2.5.3. The proprietor of a congested 

airport may include in the rate-base 

used to determine airfield charges 

during congested hours a portion of the 

costs of an airfield project under 

construction so long as (1) all planning 

and environmental approvals have been 

obtained for the project; (2) the 

proprietor has obtained financing for the 

project; (3) construction has commenced 

on the project; and (4) the added costs 

for current operators would have the 

effect of reducing or preventing 

congestion and operating delays at that 

airport. 

(a) The airport proprietor must deduct 

from the total costs of the projects any 

principal and interest collected during 

the period of construction in 

determining the amount of project costs 

to be capitalized and amortized once the 

project is commissioned and put in 

service. 

(b) The amount of project costs 

included in current charges may not 

exceed an amount corresponding to 

costs actually incurred during the 

construction period, calculated in 

accordance with a commercially 

reasonable amortization period based on 

the expected term for the permanent 

financing of the project. 

6. Amend paragraph 2.5.4(a) to read 

as follows: 

(a) Element no. 3 above will be 

presumed to be satisfied if: 

(1) The other airport is designated as 

a reliever airport for the first airport in 

the FAA’s National Plan of Integrated 

Airport Systems (‘‘NPIAS’’); or 

(2) The first airport is a congested 

airport; the other airport has been 

designated by the FAA as a secondary 

airport serving the community, 

metropolitan area or region served by 

the first airport; and adding airfield 

costs of the second airport to the rate 

base of the first airport during congested 

hours would have the effect of reducing 

or preventing congestion and operating 

delays at that airport in those hours. 

7. Add a new subparagraph 2.5.4(e) to 

read as follows: 

(e) Costs of the second airport that 

may be included in the rate base of the 

first airport are limited to customary 

airfield cost center charges. The total 

airfield revenue recovered from the 

users of both airports cannot exceed the 

total allowable costs of the two airports 

combined. 

8. Add a new Section 6, Congested 

Airports to read as follows: 

Congested Airports 

6. Congested Airports 

(a) The Department considers a 

currently congested airport to be—

(1) An airport at which the number of 

operating delays is one per cent or more 

of the total operating delays at the 55 

airports with the highest number of 

operating delays; or 

(2) An airport identified as congested 

by the Federal Aviation Administration 

listed in table 1 of the FAA’s Airport 

Capacity Benchmark Report 2004, or the 

most recent version of the Airport 

Capacity Benchmark Report. 

(b) The Department considers an 

airport to be a future congested airport 

if an airport is forecasted to meet a 

defined threshold level of congestion 

reported in the Future Airport Capacity 

Task 2 study entitled Capacity Needs in 

the National Airspace System 2007–

2025: An analysis of Airports and 

Metropolitan Area Demand and 

Operational Capacity in the Future 

(FACT 2 Report), or any update to that 

report that the FAA may publish from 

time-to-time. 

(c) A congested hour is an hour 

during which demand exceeds average 

runway capacity resulting in volumerelated delays, or is anticipated to do so. 

6.1. Because charges provided in 

paragraphs 2.1.4, 2.5.3 and 2.5.4 to 

address congestion can result in higher 

fees for some or all operators, it is 

especially important for airport 

operators proposing such charges to 

provide carriers in advance the 

information listed in Appendix 1, with 

special emphasis on data, analysis and 

forecasts used to justify the charges. 

6.2. The proprietor of a future 

congested airport may adopt measures 

to address congestion in accordance 

with paragraphs 2.1.4, 2.5.3 and 2.5.4 of 

this policy, if the measures will not take 

effect or have any effect on airfield 

charges until a time when the airport 

meets the definition of a congested 

airport in paragraph 6 (a) or is 

anticipated to do so. This kind of 

measure would typically identify the 

specific condition, e.g., operating delays 

that regularly exceed a certain level at 

the airport that would trigger the 

implementation of the special charges to 

address congestion. 

6.3 An airport proprietor may exempt 

flights subsidized under the Essential 

Air Service Program from charges 

imposed under paragraphs 2.5.3 and 

2.5.4 of this policy. 

Issued in Washington, DC on July 8, 2008. 

Mary E. Peters, 

Secretary of Transportation. 

Robert A. Sturgell, 

Acting Administrator, Federal Aviation 

Administration. 

[FR Doc. 08–1430 Filed 7–10–08; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Burlington International Airport, South 

Burlington VT; FAA Approval of Noise 

Compatibility Program 

AGENCY: Federal Aviation 

Administration, DOT. 

ACTION: Notice. 

SUMMARY: The Federal Aviation 

Administration (FAA) announces its 

findings on the noise compatibility 

program submitted by the City of 

Burlington VT under the provisions of 

Title I of the Aviation Safety and Noise 

Abatement Act of 1979 (Pub. L. 96–193) 


pwalker on PROD1PC71 with NOTICES