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1This slot program was not implemented under 

the HDR, but rather under SFAR 44 and was related 

to the limitations on air traffic control services 

resulting from the controller’s strike. 

2Commenters appear to have forgotten this 

rulemaking action when arguing that the 

withdrawal of slots for reallocation is 

unprecedented. 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 93 

[Docket No. FAA–2006–25709; Amendment 

No. 93–87] 

RIN 2120–AI70 

Congestion Management Rule for 

LaGuardia Airport 

AGENCY: Federal Aviation 

Administration (FAA). 

ACTION: Final rule. 

SUMMARY: Today the FAA is publishing 

a final rule to address congestion at New 

York’s LaGuardia Airport (LaGuardia). 

The rule grandfathers the majority of 

operations at the airport and will 

develop a robust secondary market by 

annually auctioning off a limited 

number of slots; the FAA plans to use 

the proceeds from the auctions to 

mitigate congestion and delay in the 

New York City area. In addition, the 

hourly cap on scheduled operations will 

be reduced to 71 per hour during the 

regulated hours. This reduction will 

lead to an estimated 41 percent 

reduction in modeled delay at the 

airport. This rule also contains 

provisions for use-or-lose, unscheduled 

operations, and withdrawal for 

operational need. The rule will sunset 

in ten years. 

DATES: This rule becomes effective 

December 9, 2008. 

FOR FURTHER INFORMATION CONTACT: For 

technical questions regarding this 

rulemaking, contact: Nan Shellabarger, 

Office of Aviation Policy and Plans, 

APO–200, Federal Aviation 

Administration, 800 Independence 

Avenue, SW., Washington, DC 20591; 

telephone (202) 267–7294; e-mail 

nan.shellabarger@faa.gov. For legal 

questions concerning this rulemaking, 

contact: Rebecca MacPherson, FAA 

Office of the Chief Counsel, 800 

Independence Ave., SW., Washington, 

DC 20591; telephone (202) 267–3073; email rebecca.macpherson@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Authority for this Rulemaking 

The FAA has broad authority under 

49 U.S.C. 40103 to regulate the use of 

the navigable airspace of the United 

States. This section authorizes the FAA 

to develop plans and policy for the use 

of navigable airspace and to assign the 

use that the FAA deems necessary for its 

safe and efficient utilization. It further 

directs the FAA to prescribe air traffic 

rules and regulations governing the 

efficient utilization of the navigable 

airspace. 

Table of Contents 

I. Background 

II. Summary of the Final Rule 

III. Authority To Retire and Reallocate 

Capacity 

A. The FAA Is Legally Authorized To 

Allocate Slots Through an Auction 

Mechanism 

1. Slots Are a Form of Property That May 

Be Leased by the FAA to Others 

2. FAA Leases Are Not Covered by IOAA 

and This Rule Is Not in Violation of Any 

Current Appropriations Restrictions 

3. Leases Are Not Taxes 

4. The FAA’s Authority To Give Slots to 

Air Carriers Through Cooperative 

Agreements 

5. Leases That Terminate by Their Own 

Terms Are Not a ‘‘Taking’’ of Property 

6. The Draft Lease Terms Included in the 

NPRM Were for Illustrative Rather Than 

Probative Purposes 

B. The FAA Has Authority To Retain the 

Amounts Received From the Lease and 

Disposal of Property and To Use Those 

Proceeds for Congressionally Authorized 

Purposes 

C. The Auction of Slots Does Not Affect the 

Proprietary Rights of the Port Authority 

D. The FAA Has Complied With the 

Administrative Procedure Act 

1. The Docket Contained Adequate 

Information for Meaningful Comment on 

the Rulemaking Proposal 

2. The Discussion of the Auction Process 

Provided Sufficient Detail for 

Meaningful Comment on the Rulemaking 

Proposal 

3. The FAA Adequately Considered 

Alternatives 

IV. Discussion of the Final Rule 

A. Allocation of Slots at LaGuardia 

1. Proposed Options 

2. Categories of Slots 

3. Initial Allocation of Slots 

4. Retirement of Slots 

5. Market-Based Reallocation of Slots 

a. Network Effects of Auctions 

b. Impacts of Auctions on Competition 

c. Alternatives to Reallocation 

B. Secondary Trading 

C. Usage Requirements 

D. Unscheduled Operations 

E. Sunset Provision 

F. Other Issues 

1. Withdrawal for Operational Need and 

for Future Reductions in the Cap 

2. Limit on Arrivals and Departures 

3. Common Ownership 

4. Impact of the Final Rule on the Port 

Authority’s Ability To Run Its Airport 

V. Potential Loss of Service to Small 

Communities 

VI. Regulatory Notices and Analyses 

VII. Regulatory Text 

I. Background 

This final rule is the latest action in 

a long history of congestion 

management at one of the most delayed 

airports in the United States. Although 

service at LaGuardia is almost 

exclusively domestic, access to the 

airport is highly sought after. These two 

factors have forced the FAA to address 

a dilemma: how can the agency reduce 

delays while providing some measure of 

access to carriers wishing to operate at 

the airport, thus ensuring competition? 

While there are many factors 

contributing to the delays and 

congestion at LaGuardia, demand for the 

associated airspace has long outstripped capacity. 

The FAA managed congestion at 

LaGuardia under the High Density Rule 

(HDR) from 1969 through 2006. 14 CFR 

part 93 subparts K and S. However, not 

until deregulation of the airline industry 

did the FAA need to step in and provide 

for air carrier access to the airspace 

immediately surrounding the airport. 

Prior to 1985 the carriers at the airport, 

operating under antitrust immunity, 

determined who would be allowed to 

operate and when. The FAA’s role was 

limited to determining how many 

operations air traffic control could 

reasonably handle during congested 

periods and enforcing operator 

compliance with the rules. The HDR 

divided the allowable operation (slots) 

by categories of users (i.e., air carriers 

other than air taxis, scheduled air taxis, 

and others). 33 FR 17896 (December 3, 

1968). In 1982, the FAA imposed a 

minimum usage requirement for the first 

time. 47 FR 7816 (February 22, 1982). 

Also in 1982, the FAA implemented an 

experimental buy-sell rule, under which 

approximately 190 slots were 

transferred among carriers over six 

weeks of the program. 47 FR 29814 (July 

8, 1982).1

The FAA established more permanent 

allocation procedures for slots under the 

HDR in 1985 when it adopted the Buy/ 

Sell Rule. 50 FR 52195, December 20, 

1985. In a companion rulemaking to the 

Buy/Sell Rule (SFAR 88), the FAA 

provided for the withdrawal of up to 

five percent of the slots at the slotconstrained airports through a reverse 

lottery so as to provide a pool of slots 

for new entrants and limited 

incumbents. SFAR 88, 51 FR 8630 

(March 12, 1986). 2 The Buy/Sell Rule 

included use-or-lose provisions and, 

while explicitly stating that the slots 

were not the carriers’ property and did 

not constitute a proprietary right, the 

FAA allowed carriers to buy, sell or 

lease the slots on the secondary market. 


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3There are two hours during the day when 

scheduled operations exceed 75. At 9 a.m. there are 

a total of 76 scheduled operations, and at 5 p.m. 

there are a total of 77. 

4The LaGuardia Order was amended on 

November 8, 2007 (72 FR 63224) and again on 

August 19, 2008 (73 FR 48248). 

For the next 15 years the agency relied 

primarily on the secondary market 

authorized by the Buy/Sell Rule to 

address access issues at the airport. 

However, the Buy/Sell Rule created 

market distortions by creating categories 

of carriers entitled to preferential 

treatment under an administrative 

reallocation mechanism which severely 

limited these carriers’ access to slotcontrolled airports other than on the 

open market. Affected carriers 

complained to the FAA that by 

grandfathering 95 percent of the slots at 

the slot-controlled airports to incumbent 

carriers, there was insufficient capacity 

available for reallocation. The Buy/Sell 

Rule also failed to foster a robust 

secondary market because it did not 

require any transparency. Accordingly, 

carriers were able to keep out 

competitors by arranging private 

transactions. This resulted in carriers 

interested in initiating or expanding 

service at the airports often being 

unaware that slots were potentially 

available for sale or lease. Some carriers 

also complained that they were 

effectively being denied access to the 

airport because their competitors 

refused to sell slots or provide 

meaningful lease terms. 

On April 5, 2000, Congress enacted 

the Wendell H. Ford Aviation and 

Investment Reform Act of the 21st 

Century (AIR–21 or the Act). The Act 

phased out the HDR at LaGuardia 

effective January 1, 2007. In addition to 

phasing out the HDR, AIR–21 directed 

the Secretary of Transportation to grant 

two types of exemption from the HDR’s 

flight restrictions. The first type of 

exemption was designed to promote 

more competition at slot-constrained 

airports and required the Secretary to 

grant exemptions to a new entrant or 

limited incumbent for 20 flights per 

carrier. The second type of exemption 

was aimed at improving service to small 

communities and required the Secretary 

to grant exemptions to a carrier 

operating an aircraft with less than 71 

seats to Small-Hub or Non-Hub airports 

for an unrestricted number of flights. 

The Act also preserved the FAA’s 

authority to impose flight restrictions by 

stating that ‘‘[n]othing in this section 

* * * shall be construed * * * as 

affecting the Federal Aviation 

Administration’s authority for safety 

and the movement of air traffic.’’ 49 

U.S.C. 41715(b). 

Although the slot exemptions 

mandated by Congress under AIR–21 

opened up access to LaGuardia; they 

also resulted in a significant increase in 

delays at the airport as the number of 

small community exempted operations 

soared throughout 2000. Using its 

authority in 49 U.S.C. 40103, the FAA 

capped AIR–21 slot exemptions at 

LaGuardia. While the number of 

allowable scheduled operations under 

the HDR remained constant at 62 per 

hour, the actual number of scheduled 

operations rose to 75 per hour 3 even 

though there were no significant 

increases in the airspace or airport 

capacity. Thus, Congress’ actions to 

improve access resulted in significantly 

higher delays at LaGuardia than there 

were before 2000. 

Slots allocated under the HDR at 

LaGuardia were scheduled to expire on 

January 1, 2007. Based on its experience 

in 2000, the FAA determined that 

simply lifting the HDR at LaGuardia 

would result in a significant increase in 

delays and adversely impact the 

airspace around New York City and on 

the National Airspace System (NAS) as 

a whole. Accordingly, on August 29, 

2006, the FAA published a notice of 

proposed rulemaking (NPRM) proposing 

continuation of the existing cap of 75 

scheduled and six unscheduled hourly 

operations as well as a new method of 

allocating capacity (71 FR 51360). In 

addition to retaining the existing cap, 

the FAA proposed to impose an average 

minimum aircraft size requirement for 

much of the fleet serving the airport. By 

incentivizing carriers to use larger 

aircraft, the proposal would have 

maximized passenger throughput 

consistent with the airport’s physical 

constraints. The FAA also proposed to 

implement a limit on the duration of the 

slots that would assure ten percent of 

the capacity at the airport would be 

available annually for reallocation based 

on an undetermined market mechanism 

that the FAA intended to administer via 

regulation. 

The FAA recognized that it did not 

have clear statutory authority to 

implement a wide array of market-based 

mechanisms and that, absent authority 

beyond that contained in 49 U.S.C. 

40103, any reallocation via a marketbased mechanism could lead to a 

challenge that the FAA had violated the 

‘‘user fee prohibition’’ attached to the 

agency’s annual appropriations 

legislation since 1998. The FAA did not 

address the agency’s authority to 

dispose of interests in property, as 

provided in the Air Traffic Management 

System Performance Improvement Act 

of 1996. Public Law No. 104–264, 

codified at 49 U.S.C. 106(l)(6). However, 

it did refer to its statutory 

reauthorization proposal, which was 

part of a comprehensive change to how 

the FAA would be financed. The FAA’s 

proposed reauthorization package, the 

Next Generation Air Transportation 

System Financing Reform Act of 2007, 

would substitute new user fees for 

passenger ticket taxes, would permit the 

airport operators (such as the Port 

Authority of New York and New Jersey 

(Port Authority)) at constrained and 

delayed airports to assess market-based 

fees, and would also allow the FAA, 

under certain circumstances, to impose 

market-based mechanisms. This 

legislative proposal, in giving authority 

directly to airport proprietors to assess 

and use market-based fees, was 

profoundly different from the terms of 

this final rule. Rather, this rule 

recognizes the property interest the FAA 

acquires or constructs in the navigable 

airspace for scheduled flight operation 

and provides for the assignment of this 

property interest through lease 

agreements with the carriers. The FAA’s 

reauthorization legislation has been 

held up for reasons unrelated to this 

rulemaking, and the proposed 

legislation was never adopted. 

The FAA recognized that it would be 

unable to complete its rulemaking by 

January 1, 2007, when the HDR was 

scheduled to expire. Indeed, since the 

agency had extended the comment 

period at the request of several 

interested parties, the comment period 

for the NPRM did not close until 

December 29, 2006. On December 27, 

2006, after providing for notice and 

comment, the agency published an FAA 

Order Operating Limitations at New 

York LaGuardia Airport (LaGuardia 

Order) (71FR 77854).4 The LaGuardia 

Order retained the existing cap at the 

airport of 75 scheduled operations and 

imposed a reservation system for 

unscheduled operations that permitted 

six unscheduled operations per hour. 

The LaGuardia Order did not 

distinguish between operations 

conducted pursuant to HDR slots and 

AIR–21 slot exemptions; rather, flights 

conducted pursuant to the exemptions 

were rolled into the hourly cap without 

restriction. The slots and exemptions 

were grandfathered to the current holder 

as ‘‘Operating Authorizations’’. The 

Order also explicitly linked its duration 

to the publication of a final rule and 

noted that no rights to Operating 

Authorizations allocated under the 

Order would survive beyond the Order. 

No one challenged the FAA’s authority 

to re-impose caps at the airport 


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5This rule will withdraw 16.5 percent of carriers’ 

existing Operating Authorizations above the base of 

operations. Currently unallocated capacity will also 

be available for auction or retirement. This 

represents approximately 15 percent of the total 

number of slots at the airport. 

following the expiration of the HDR or 

the terms of the Order. 

In 2007 flight delays in the New York 

City metropolitan area soared. Delays 

impacted all three major commercial 

airports and cascaded throughout the 

NAS. The summer of 2007 became the 

second worst on record nationally for 

flight delays. On September 27, 2007, 

the Secretary of Transportation 

announced the formation of the New 

York Aviation Rulemaking Committee 

(NYARC) to help the Department of 

Transportation (Department) and the 

FAA explore available options for 

congestion management and how 

changes to current policy at all three 

major commercial New York City 

airports would affect the airlines and 

the airports. 

By design, the NYARC provided 

ample opportunity for extensive input 

by aviation stakeholders, having 

members from every major air carrier in 

the United States as well as foreign 

carriers, passenger groups, and the Port 

Authority. Through the ARC process, 

these stakeholders played a key role in 

exploring ideas to address congestion 

and ensuring that any actions 

contemplated by the Department and 

the FAA would be fully informed. In 

addition to holding weekly meetings of 

the full NYARC, five working groups 

regularly met to explore ways to address 

both congestion and allocation of the 

available airspace. The NYARC worked 

throughout the fall and submitted a 

report to the Secretary, dated December 

13, 2007, discussing its findings. A copy 

of the NYARC Report may be found at 

http://www.dot.gov/affairs/ 

FinalARCReport.pdf. 

After evaluating the comments 

received to the 2006 NPRM and the 

input of the NYARC, the FAA moved 

forward with its rulemaking action to 

address congestion at LaGuardia. Rather 

than pursue its earlier proposal to 

require upgauging and reallocate ten 

percent of the existing capacity each 

year, the FAA published a supplemental 

notice of proposed rulemaking (SNPRM) 

on April 16, 2008 proposing to lease the 

majority of operations at the airport to 

the historic operators for non-monetary 

consideration under its cooperative 

agreement authority. The agency also 

proposed to develop a robust market 

and induce competition by annually 

auctioning off leases for a limited 

number of slots during the first five 

years of the rule. The FAA proposed 

two different options. Under the first 

option, the FAA, after retiring a small 

portion of the slots, would auction off 

eight percent of the slots to any carrier 

serving or wishing to serve LaGuardia 

and would use the proceeds to mitigate 

congestion and delay in the New York 

City area (after the FAA recouped the 

cost of the auction). Under the second 

option, the FAA would not retire any 

slots and would conduct an auction of 

twenty percent of the slots. The 

proceeds would go to the carrier holding 

the slot after the FAA recouped the cost 

of the auction. The SNPRM also 

contained provisions for use-or-lose, 

unscheduled operations, and 

withdrawal for operational need. The 

FAA proposed to sunset the rule in ten 

years. 

The comment period for the SNPRM 

closed June 16, 2008. Despite numerous 

requests, the FAA decided against 

extending the comment period, 

although it noted that it historically has 

considered comments filed after the end 

of a comment period as long as such 

consideration did not lead to delay. In 

denying these requests, the FAA 

provided draft copies of the lease 

agreements that would result from the 

initial allocation and reallocation of 

slots in the final rule. The FAA 

reiterated that any auction would be 

conducted under the agency’s 

acquisition authority. The agency also 

reiterated that interested parties to the 

auction would be afforded the 

opportunity to comment on any 

proposed auction procedures within the 

context of the agency’s Acquisition 

Management System. 

Twenty-six interested parties filed 

comments to the docket addressing the 

SNPRM. The majority of comments 

were consistent in rejecting the 

proposal. Many commenters said that 

the FAA had failed to demonstrate how 

the proposal would achieve any 

significant relief from congestion. 

Rather, according to the commenters, 

the SNPRM would impose an untested 

and unproven auction process on 

airlines that would not address the 

fundamental airspace congestion issues 

in the New York metro area. While other 

commenters did not completely object 

to an auction mechanism, they did note 

that the timing was not right or that the 

auction procedures needed to be fully 

developed prior to conducting any 

auction. 

Effective August 28, 2008, the FAA 

reduced the number of reservations 

available for unscheduled operations 

from six to three. 73 FR 48428. 

On September 30, 2008 the FAA’s 

Office of Dispute Resolution for 

Acquisition (ODRA) issued a decision 

responding to protests that had been 

filed by air carriers, the ATA, the Port 

Authority, and the New York Aviation 

Management Association challenging 

the FAA’s legal authority to conduct a 

proposed auction of two slots at 

Newark. ODRA concluded that the 

FAA’s statutory authority and its 

Acquisition Management System 

authorized agency disposal of property 

rights by way of a lease as well as the 

use of a competitive auction process to 

determine who the lessee should be. 

ODRA did not, however, issue an 

opinion on whether the underlying slots 

constituted property. 

On the same day the General 

Accountability Office (GAO) released an 

opinion letter in response to a 

congressional request that concluded 

that the FAA currently lacks authority 

to auction slots under either its property 

disposition authority or its user fee 

authority. The issues involved represent 

novel legal issues upon which 

reasonable people, and agencies, acting 

in good faith, have disagreed. The FAA 

disagrees with the GAO conclusions 

because it does not believe the auction 

of a slot constitutes a user fee and 

because the GAO appeared to apply an 

exceptionally narrow definition of 

property that ignores expansive 

statutory provisions within the agency’s 

various enabling statutes and the fact 

that carriers have treated slots as 

property for approximately 25 years. 

Accordingly, the FAA has decided to 

proceed with the adoption of this final 

rule. 

II. Summary of the Final Rule 

Today’s rule considers not only the 

concerns raised by commenters in 

response to the NPRM and SNPRM, but 

also takes into account the extensive 

discussions and issues raised by 

members of the NYARC. The FAA is 

imposing a cap on scheduled operations 

of 71 per hour from 6 a.m. to 9:59 p.m., 

effective March 8, 2009. Until that date, 

the cap on scheduled operations will 

remain at 75 per hour. This reduction in 

the cap represents a five percent 

retirement of existing slots at the airport 

and should significantly improve delays 

at the airport. Unscheduled operations 

continue to be capped at three per hour, 

with additional flights authorized when 

conditions permit. 

In addition, approximately 85 

percent 5 of the total number of slots 

currently in use at the airport will be 

‘‘grandfathered’’ to carriers who hold 

the corresponding Operating 

Authorization under the LaGuardia 

Order pursuant to cooperative lease 

agreements for a period of ten years. 

These slots are called ‘‘Common Slots’’. 


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6A federal agency’s power to dispose of property 

includes the power to lease that property, even 

without express Congressional authority. 

Ashwander v. Tennessee Valley Authority, 297 U.S. 

288, 331 (1936). 

7This section of law describes the policies that 

the Department of Transportation must take into 

consideration when carrying out its economic 

regulaory authority over the aviation industry. This 

section also is a clear statement by Congress of a 

valid public policy aim the FAA is permitted to 

take into consideration. 

8The fact that Congress excluded insurance 

premiums and fees, which are not amounts assessed 

under chapter 453 of title 49, expresses Congress’ 

plain and unambiguous intent for the FAA to 

deposit all amounts it collects into this account, not 

just the amounts assessed under the user fee 

provisions of chapter 453. 

9Statements were also made in environmental 

assessments in 2005 and 2007 that indicated that 

legislation might be needed to implement marketbased approaches to congestion management. These 

statements are too vague to determine whether they 

are correct with respect to the issue at hand. 

Carriers will not pay any monetary 

consideration for these slots. Of the 

remaining 15 percent of slots, one-third 

(or five percent of existing capacity) will 

be retired at the end of the winter 

scheduling season. These slots are 

called ‘‘Limited Slots’’, as are the 

remaining approximately ten percent of 

the slots, which will be terminated and 

reallocated over a five year period, 

commencing March 8, 2009. The FAA 

intends to conduct the first auction of 

these slots in January 2009, and the 

affected carrier will be permitted to use 

the slot until the successful bidder 

acquires it in March. The reallocated 

slots, called ‘‘Unrestricted Slots’’ after 

reallocation, will be awarded to the 

successful bidder(s) via lease 

agreements that will last until this rule 

expires, March 9, 2019. 

All slots may be transferred via a 

secondary market. Carriers may 

continue to engage in direct 

negotiations. To facilitate opportunities 

for participation in the secondary 

market, however, all available slot subleases must be advertised on an FAArun bulletin board, and the Department 

will monitor transactions for anticompetitive behavior. 

As proposed, Limited and Common 

Slots will be subject to an 80 percent 

usage requirement and may be 

withdrawn for operational need. In 

addition, Common Slots may be subject 

to reversion, following notice and an 

opportunity to comment, should the 

FAA determine the cap at the airport is 

too high. 

III. Authority To Retire and Reallocate 

Capacity 

The Air Transport Association of 

America (ATA), the Port Authority, 

American Airlines, Delta Airlines and 

United Airlines asserted that the FAA’s 

proposed methods of allocating slots are 

not lawful for several reasons including: 

Prior statements by Government 

officials indicating that the FAA would 

need additional legislation to be able to 

auction slots; the FAA cannot create 

property by exercising its regulatory 

power to regulate the use of navigable 

airspace; slots are not property when 

created and held by the Government but 

only become property when transferred 

to an air carrier; the proposed lease of 

slots for fair market value would be a 

new user fee in violation of an 

appropriations restriction on using a 

particular appropriation to finalize or 

implement a regulation to establish a 

new user fee and in violation of the 

Independent Offices Appropriations Act 

(IOAA) (the latter of which it is asserted 

is the FAA’s only authority to charge for 

the lease of slots); the leases would be 

an unconstitutional usurpation of 

Congress’ authority to levy taxes; the 

return of slots to the Government at the 

end of the term of their leases would 

constitute an unconstitutional taking of 

property; the Federal Grants and 

Cooperative Agreements Act does not 

provide authority for the FAA to give 

slots to air carriers through cooperative 

agreements; and the FAA lacks 

authority to retain the proceeds from the 

lease of slots and use those proceeds to 

improve capacity in the New York 

airspace area. 

The FAA has the authority to dispose 

of property interests under 49 U.S.C. 

40110(a)(2). The FAA also has the 

authority to ‘‘enter into and perform 

such contracts, leases, cooperative 

agreements, or other transactions as may 

be necessary to carry out the functions 

of the Administrator and the 

Administration.’’ 49 U.S.C. 106(l)(6).6

The FAA has determined that the 

allocation of a relatively small number 

of slots via the auction of a leasehold 

best effectuates the efficient allocation 

of slots, both through the initial 

allocation and through the development 

of a robust secondary market. 

An auction is intended simply to 

distribute slots to the air carriers who 

value them the most, thus encouraging 

their most efficient use. An auction also 

satisfies the direction of Congress to 

‘‘place maximum reliance on 

competitive market forces and on actual 

and potential competition * * * to 

provide the needed air transportation 

system * * * ’’ 49 U.S.C. 

40101(a)(6)(A).7 This section of law 

describes the policies that the 

Department must take into 

consideration when issuing economic 

regulations. This rule is not an 

economic regulation. However, the 

statutory provision is a clear statement 

by Congress of a valid public policy aim 

that the FAA is permitted to take into 

consideration when issuing regulations 

under section 40103. The FAA does not 

intend to set a reserve price on slots so 

as to assure itself that it recovers its 

costs associated with either the auction 

or with providing air traffic services. 

The FAA instead aims to allocate all of 

the slots put up for auction, thus 

allowing for possible new entrants to 

compete with the incumbent air carriers 

at LaGuardia and to accommodate 

changes in the business strategies of air 

carriers using LaGuardia airport. 

A. The FAA Is Legally Authorized To 

Allocate Slots Through an Auction 

Mechanism 

Several commenters quote a statement 

made in 1985 that the FAA did not 

propose an auction mechanism because 

legislation would be required for the 

collection and disposition of the 

proceeds (50 FR 52183 (December 20, 

1985)), and a more recent statement in 

the NPRM that the FAA ‘‘currently does 

not have the statutory authority to 

assess market-clearing charges for a 

landing or departure authorization’’. 71 

FR 51360, 51362, 51363 (August 29, 

2006). 

In 1985, the FAA lacked clear 

authority to collect and dispose of the 

proceeds from an auction. Rather, any 

amounts collected by the agency would 

need to be deposited into the General 

Receipts account in accordance with 31 

U.S.C. 3302. Additionally, while the 

FAA had authority to dispose of an 

interest in property, it was not clear that 

such interests included leaseholds. 

In the Air Traffic Management System 

Performance Improvement Act of 1996, 

Public Law 104–264, the FAA gained 

express authority to lease property to 

others. 49 U.S.C. 106(l)(6), 106(n). The 

same law also gave the FAA an 

exemption from 31 U.S.C. 3302, and an 

account was established specifically for 

all amounts the FAA collects other than 

the insurance premiums and fees that it 

is required to deposit into the Aviation 

Insurance Revolving Fund. 49 U.S.C. 

45303(c). This account is available not 

just for fees assessed under chapter 453, 

but for ‘‘all amounts’’ other than 

insurance premiums and fees.8 Thus, 

the statement made in 1985 is no longer 

correct. 

The circumstances surrounding the 

statement made in 2006,9 did not 

address the authorities conferred on the 

FAA by the Acquisition Management 

System Act. The FAA has authority to 

lease property to others, and to receive 

adequate compensation for this 

temporary disposal of property, 


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10The Regional Airline Association (RAA) makes 

a similar argument. In addition, RAA states that the 

FAA lacks the authority to regulate the types of 

aircraft and routes to be served in air transportation. 

The FAA disagrees with the premise of RAA’s 

position, since the FAA may rely on a rational basis 

to allocate the use of navigable airspace under 49 

U.S.C. 40103. Nevertheless, this rule does not 

attempt to regulate the type of aircraft or the routes 

served in any manner. 

11The Port Authority also uses the language in 

the preamble to the SNPRM as evidence that the 

slots are not property because the FAA states that 

there was no Fifth Amendment Takings issue with 

the proposed slot auction. The FAA’s statement, in 

context, went to the fact that the air carrieres have 

no property interests in the slots after expiration of 

the current Order until FAA provides them with 

new slots. It did not imply that the slots were not 

property; just that the air carriers possess no 

property interests beyond those accorded them 

under the Order. 

12As the preamble to the current SNPRM states, 

the earlier Order and NPRM used the ‘‘Operating 

Authorizations’’ to describe what are called slots 

under the SNPRM. Both Operating Authorizations 

and slots represent property interests, but the FAA 

has deferred to common usage by reverting to the 

term ‘‘slots.’’ 

13The airline commenters agree with ATA’s 

assessment that the slots are property of the airlines 

not of the FAA. See, Comments of U.S. Airways 

Group, Inc. at 24. But see, Comments of American 

Airlines at 7 stating that the Port Authority holds 

the property interest. 

including the authority to lease the slots 

at LaGuardia. 

As briefly discussed in the SNPRM, 

the FAA initially believed that imposing 

a market-based reallocation mechanism 

as part of the regulation could be 

problematic. However, as delays soared 

in the region in 2007 and Congress 

failed to pass long-term reauthorization 

legislation, the FAA reevaluated its 

options. One option was to simply 

extend the existing LaGuardia Order 

indefinitely. The agency rejected this 

option because the Order was never 

intended to be a long-term solution and 

it perpetuates the inefficiencies 

contained within the HDR. Likewise, 

the FAA could have pursued a final rule 

that would establish an administrative 

reallocation mechanism, but the agency 

concluded that approach also failed to 

resolve the inefficiencies contained 

within the HDR. Finally, the FAA could 

revisit all of its statutory authorities and 

determine whether it had the ability to 

allocate slots under its existing legal 

authorities. 

This final approach was the one the 

agency pursued because the FAA 

believes it is both legal and best 

represents the interests of passengers 

flying in and out of the airport. The 

FAA also believes this approach best 

effectuates the FAA’s mandate to 

provide for the efficient use of the NAS, 

coupled with the Department’s mandate 

to consider competitive effects. The 

agency can either foster a market-based 

allocation mechanism and develop a 

robust secondary market, or it can walk 

away from the airport after imposing a 

cap and providing for a very limited 

administrative reallocation mechanism. 

It has decided to follow the more free 

market approach. 

The commenters also refer to the fact 

that the FAA sought additional 

legislative authority to conduct auctions 

which it is has not yet received. The 

authority sought by the FAA was part of 

a comprehensive change to how the 

FAA would be financed and how 

market-based mechanisms would be 

used by both the FAA and congested 

airports. This rule, however, relies on 

the FAA’s Acquisition Management 

System authorities and does not require 

the FAA to use any of the proposed 

legislative provisions it sought. 

1. Slots Are a Form of Property That 

May Be Leased by the FAA to Others 

Both the Port Authority and the ATA 

submit that the FAA has no property 

rights in the slots the FAA proposes to 

auction.10 While the ATA does not 

question that the slots are property (it 

disputes ownership), the Port Authority 

states that the slots are ‘‘neither physical 

property, real property, intellectual 

property, nor an intangible property 

recognized in common law.’’ 11

The Port Authority is incorrect; slots 

are an intangible form of property that 

may be leased. On December 27, 2006, 

the FAA issued an Order limiting 

operations at LaGuardia pursuant to its 

broad authority to regulate the use of 

navigable airspace under 49 U.S.C. 

40103(b). 71 FR 77854 (December 27, 

2006). That Order defines an Operating 

Authorization 12 as ‘‘the operation 

authority assigned by the FAA to a 

carrier to conduct a scheduled arrival or 

departure operation. * * * .’’ Id. at 

77859. The Order expressly allows the 

trading and leasing of Operating 

Authorizations. Id. at 77860. Although 

the Order does not permit the 

permanent sale or purchase of Operating 

Authorizations, it permits any form of 

consideration to be used in the lease or 

trade of these Operating Authorizations. 

Id. at 7857. In addition, the Order states 

that it ‘‘is not intended to prohibit an air 

carrier from contractually arranging to 

pledge an interest in an Operating 

Authorization to a person, for use as 

collateral or otherwise, for the duration 

of the Order.’’ Id. 

This Order reflects the FAA 

Administrator’s determination that 

Operating Authorizations are a form of 

property that may be leased or traded 

for consideration, and used as collateral. 

Indeed, the ATA’s own members have 

treated Operating Authorizations, and 

the HDR slots that predated them, as a 

form of at least intangible property: 

leasing and trading them for 

consideration; using them as a form of 

collateral; and disclosing them as assets 

on their balance sheets. Bankruptcy 

courts have held that slots are property. 

The Port Authority cites Executive 

Order 13132 for the proposition that the 

FAA is ignoring the traditional role of 

States as sovereigns that can create 

property and has not closely examined 

the effect the rulemaking would have on 

the State instrumentality. The creation 

of property rights, however, is not the 

sole responsibility of the states. Federal 

law determines what constitutes 

property for the purpose of applying 

federal statutes. Ross L. Blair, et al. v. 

United States, Docket 2007–5049 (Fed. 

Cir. 2008), citing United States v. 

Kimbell Foods, Inc., 440 U.S. 715, 726 

(1979) and United States v. Craft, 535 

U.S. 274, 278–79 (2002). The United 

States Government, pursuant to 49 

U.S.C. 40103, has exclusive sovereignty 

over the navigable airspace, and the 

FAA exercises plenary powers over that 

airspace. 

Unlike the Port Authority, the ATA 

does not dispute that the slots constitute 

a property interest; rather it argues that 

the property interest is not the FAA’s, 

because it is created at or after the 

transfer to an air carrier.13 Section 

40110(a)(2) does not speak to whether 

the FAA actually owns property that is 

being disposed of. It only speaks to the 

disposal of a property interest. Only the 

FAA has authority to assign the use of 

navigable airspace under section 40103. 

Even assuming that the property interest 

is created at the time of transference, it 

is still a property interest that falls 

within the FAA’s authority to dispose of 

under section 40110(a)(2). 

As with certain other valuable public 

property not expressly owned in fee by 

the U.S. Government, the Government 

may allow the use of public property 

and frequently does so using leases. In 

fact, the Government routinely 

‘‘licenses’’ and ‘‘permits’’ the use of 

property over which it exercises 

exclusive sovereignty. In doing so, 

unless otherwise specified by law, the 

Government charges market rates in 

accordance with OMB Circular A–25. 

For example, under 36 CFR 251.53— 

Authorities, the Chief of the Forest 

Service (USDA) issues special use 

authorizations (e.g., permits, term 

permits, leases) for National Forest 

System land. The USDA also issues 

grazing permits under the Taylor 

Grazing Act (TGA) of 1934 to allow the 

permit/lease holder to use publicly 

owned forage. The Federal 


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14The FCC, like the FAA, had a statutory 

preference for competition prior to the requirement 

that it conduct auctions. 

15Such as authorized access to particular radio 

frequencies and authorized use of intellectual 

property. 

16ATA also suggests that by finalizing or 

implementing this rule, the FAA would violate the 

Anti-Deficiency Act. The Anti-Deficiency Act 

would only be violated if the FAA obligated or 

expended funds in excess or in advance of an 

available appropriation, fund, apportionment or 

other applicable administrative subdivision of 

funds. 31 U.S.C. 1341, 1517. The FAA may not use 

its operations appropriation to finalize or 

implement a rule to promulgate a new user fee not 

specifically authorized by law, but this rule simply 

reduces the number of slots (lowers the cap) at 

LaGuardia, defines the different types of slots, 

establishes a reversion of 15% of the slots, and 

discusses the FAA’s intent to auction new or 

returned slots. This rule does not require or impose 

on any entity a requirement to pay the FAA to 

obtain a service or even a slot. If the FAA does 

conduct an auction as contemplated by this rule, it 

will do so using its pre-existing authorities and 

regulation. The use of its operations appropriation 

to finalize and implement this rule therefore does 

not violate the Anti-Deficiency Act. 

17American Airlines reads 49 U.S.C. 106 as more 

limited in scope regarding the types of property that 

fall under its purview. The statute does not limit 

its scope to any particular type(s) of property that 

fall under its purview. The FAA has for years, 

without challenge, interpreted its authority broadly 

under the statute in support of Congress’ intention 

of allowing the Administrator to acquire, lease, 

enter into cooperative agreements and other 

transactions as may be necessary to carry out the 

Agency’s functions. This interpretation is known to 

Congress, which has repeatedly reauthorized the 

FAA without making a change to this section. 

Another commenter raised the fact that the heading 

of section 106(l) refers to ‘‘Personnel and Services’’ 

which the commenter says means that 

subparagraph (6) of that section does not provide 

the FAA any contracting or leasing authority. It has 

been long recognized by the courts, however, that 

the headings of statutes have little if any weight in 

statutory interpretation. As other paragraphs of this 

section deal with personnel matters, the heading is 

not erroneous, but it does not in any way dilute the 

broad grant of contracting, leasing, cooperative and 

other transaction agreement authority Congress gave 

the FAA in paragraph (6). 

18The FAA implemented its regulation to lease 

its property to others on April 1, 1996, well prior 

to the first time a restriction was included in the 

FAA’s appropriation concerning the FAA’s ability 

to use the operations funds appropriated to develop 

or implement a new user fee. 

Communications Commission licenses 

portions of the broadcast spectrum, and 

since 1993 (four years before Congress 

mandated the use of auctions) has 

frequently done so using auctions.14

The General Services Administration 

issues licenses and permits for the use 

of its buildings and property, see, e.g., 

41 CFR 101–47.901, 101–47.309; see 

also, GSA form 1582, ‘‘Revocable 

License for Non-federal Use of Real 

Property.’’ The FAA similarly uses 

‘‘licenses’’ to, in effect, lease its real 

property to non-federal users. See, 1.3.7 

of the FAA’s Real Estate Guidance, 

http://fast.faa.gov/realestate/index.htm. 

In short, licenses frequently are used 

to provide non-federal parties access to 

public property regardless of whether 

that property be real or personal 

(including intangible) 15 and whether 

the Government owns the property in 

the traditional sense or is simply its 

guardian. The FAA selected the word 

‘‘lease’’ rather than ‘‘license’’ to describe 

the documents that will transfer slots to 

air carriers because the FAA is 

conveying a longer term interest, with 

fewer rights by the Government to 

terminate that interest, than is usually 

done when the Government licenses a 

non-federal entity to use public property 

(licenses of property are usually 

terminable at will). 

2. FAA Leases Are Not Covered by 

IOAA and This Rule Is Not in Violation 

of Any Current Appropriations 

Restriction 

The ATA argues that the only 

authority by which the FAA may charge 

for the lease of slots is as a user fee 

under the Independent Offices 

Appropriations Act (IOAA) and that the 

only amount that could be charged is 

the cost of administering the lease. The 

ATA is incorrect on both points, but the 

issue is not relevant because the FAA 

does not rely on IOAA authority to 

conduct auctions but on its other 

authorities. 

The ATA similarly argues that this 

regulation falls within the parameters of 

an appropriation provision that 

prohibits the FAA from using funds 

from its operations appropriation to 

finalize or implement a regulation that 

establishes a new user fee not 

specifically authorized by law.16

Consolidated Appropriations Act, 2008, 

Public Law 110–161. The ATA also 

suggests that the wording of 49 U.S.C. 

106(l)(6) 17 means this authority may not 

be used because the FAA may only 

enter into leases using this authority if 

the leases ‘‘may be necessary to carry 

out the functions of the Administrator 

and the Administration.’’ 49 U.S.C. 

106(l)(6). The ATA argues that the only 

necessary function is a regulatory 

function to assign airspace under 49 

U.S.C. 40103. However, there are several 

other statutory functions, such as using 

procedures that provide for an efficient 

air traffic system, 49 U.S.C. 44505, and 

the desirability of placing maximum 

reliance on competitive market forces 

and on actual and potential competition 

to provide the needed air transportation 

system, 49 U.S.C. 40101(a)(6), that make 

the use of the FAA’s commercial 

authority to lease property to others 

appropriate. See also, the legislative 

history and findings of Congress when 

it granted the FAA the authority to lease 

property to others in Public Law 104– 

264. Having created slots, and 

determined the number of available 

slots should be limited because of the 

resulting strain on the NAS from the 

scheduling of more flights per hour than 

can be handled under current 

conditions at LaGuardia, the function of 

disposing of its interest in the slots 

becomes applicable. 

Even if the only ‘‘necessary function 

of the Administrator or Administration’’ 

were a regulatory one, the FAA has not 

violated the appropriations restriction. 

Simply put, a lease is not a user fee. A 

user fee is imposed for a particular 

service the Government provides to a 

particular party. A lease on the other 

hand, is a transfer of a possessory 

interest in real, personal or intangible 

property that allows the lessee the use 

of that property to the exclusion of 

others including the lessor. In 

transferring slots to air carriers for 

defined periods of time, the FAA is not 

providing any air traffic or other service 

to the recipients. To the contrary, the 

FAA’s air traffic controllers will not be 

policing or otherwise cognizant of 

which air carrier owns which slot and 

will provide their services in 

accordance with the FAA’s Orders and 

policies (predominantly first come, first 

served). In transferring slots to air 

carriers, the FAA is allowing that air 

carrier to schedule or reserve access to 

that segment of navigable airspace that 

is necessary to take off or land an 

aircraft at LaGuardia during a particular 

half hour of time. In short, the FAA is 

leasing rather than providing a service 

to air carriers when it transfers slots to 

them. 

A user fee is calibrated to recover the 

cost to the government of providing a 

service or specific benefit to an 

identifiable recipient. See, e.g., United 

States v. Sperry Corp., 493 U.S. 52, 60 

(1989); Seafarers International Union of 

North America v. Coast Guard, 81 F. 3d 

179, 182–83 (DC Cir., 1996). The 

assignment of a use of navigable 

airspace for scheduled flight operations 

is not a ‘‘user fee’’ under the principles 

articulated in those cases.18 The cost 

associated with purchasing a particular 

slot does not constitute a user fee. First, 

the cost associated with procuring a slot 

at auction is not associated with the cost 

of providing air traffic services for that 

particular take off or landing. Rather, air 

traffic services are paid for already 

through the Airport and Airway Trust 

Fund receipts. Second, the FAA is not 

creating assignments of the use of 

navigable airspace for scheduled flight 

operations (slots) for the purpose of 

raising revenue by leasing them to air 


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19As discussed in the general discussion of the 

auction procedures posted under the FAA’s 

Acquisition Management System, the FAA will set 

a reserve price to assure that, in the event only a 

single bid is received for a particular slot, the 

bidding carrier does not actually pay the bid price. 

In that instance, the winning bidder would pay only 

the reserve price. 

20The preamble to the SNPRM also addresses this 

issue and provides the Supreme Court decisions 

supporting the FAA’s position. 

carriers. More precisely, the FAA has 

imposed a cap and designated slots for 

the purpose of allocating the efficient 

use of navigable airspace. Most of these 

slots will be awarded to current 

operators to prevent disruption of air 

services into and out of LaGuardia. The 

FAA is leasing a relatively small 

number of them, by means of an 

auction, to air carriers in order to draw 

in new entrant carriers and provide an 

opportunity for expansion by carriers 

already at the airport, thereby inducing 

airline competition at LaGuardia and 

ensuring that airlines winning the slots 

make the highest and best use of them. 

The auction is also designed to assure 

that air carriers will rationalize the use 

of their slots in accordance with the 

value attached to them in the auctions, 

and ultimately, in the secondary market. 

In the end, the travelling public will 

benefit. 

3. Leases Are Not Taxes 

A tax is generally defined as an 

enforced obligation to support the 

government. See United States v. La 

Franca, 282 U.S. 568 (1931); see also 

United States v. Butler, 297 U.S. 1, 61 

(1937); Head Money Cases, 112 U.S. 

580, 596 (1884); Rural Telephone 

Coalition v. FCC, 8388 F. 2d 1307, 1313 

(DC Cir., 1988); United States v. City of 

Huntington, 999 F. 2d 71, 73 (4th Cir., 

1993). A lease acquired through a slot 

auction, however, is not a tax. It is not 

an amount being levied on all members 

of the industry nor is it a mandatory 

payment as a tax would be. Further, the 

lease is not ‘‘imposed’’ as a tax is, and 

is not designed for revenue-raising 

purposes. 

The auction of a limited number of 

slots at the airport was never designed 

to provide the FAA with a new source 

of revenue. Indeed, in the SNPRM, one 

of the options proposed by the FAA was 

to allow the carriers to keep all revenue 

after covering the FAA’s costs in 

conducting the auction. Rather, the 

auction mechanism is intended to use 

market forces to best allocate this 

limited asset to those carriers who value 

it the most, placing the asset to its best 

and highest use. The FAA believes the 

slots auctions will inform the airlines of 

the market value of their LaGuardia 

slots so that slot utilization can be 

rationalized. While it is true that under 

today’s rule, that the FAA may realize 

some revenue from the auction, the 

agency has also committed to putting 

that revenue back into aviation capacity 

enhancement and delay mitigation 

projects in the New York metropolitan 

area. 

Unlike a tax, which imposes an 

obligation on affected citizens or 

consumers to pay money to the state, 

the slot auction imposes no burden on 

a carrier based on its citizenship or use 

of the airport. The slot auction lease 

payments are voluntary: the FAA does 

not require a carrier to participate in an 

auction in order to serve LaGuardia. 

Carriers serving LaGuardia presently 

will be given slots through cooperative 

agreements and slightly less than ten 

percent of the total number of slots at 

the airport will be auctioned. Only the 

carriers winning the bids at the slot 

auctions will pay for the lease, and that 

amount of money will have been 

determined by the free market. The FAA 

will not have pre-determined a lease 

amount and will not attempt to cover its 

costs in conducting the auction by 

setting a reserve price.19

4. The FAA’s Authority To Give Slots to 

Air Carriers Through Cooperative 

Agreements 

A few commenters stated that the 

Federal Grants and Cooperative 

Agreements Act does not provide the 

FAA authority to give slots as 

cooperative agreements. The Federal 

Grants and Cooperative Agreements Act 

defines when a cooperative agreement is 

to be used. The FAA’s broad authority 

to award cooperative agreements, was 

given to the FAA in the Air Traffic 

Management System Performance 

Improvement Act of 1996, and codified 

as 49 U.S.C. 106(l)(6). This Act 

expressly confers on the FAA 

Administrator the authority to ‘‘enter 

into and perform such * * * 

cooperative agreements, and other 

transactions as may be necessary to 

carry out functions of the Administrator 

and Administration. The Administrator 

may enter into such * * * cooperative 

agreements, and other transactions with 

* * * any person, firm, association, 

corporation * * * on such terms and 

conditions as the Administrator may 

consider appropriate.’’ 49 U.S.C. 

106(l)(6). There are several functions of 

the Administrator for which it may be 

‘‘necessary’’ to enter into a cooperative 

agreement. One such function is to 

encourage the development of civil 

aeronautics. 49 U.S.C. 40104. By giving 

up to 20 slots to all air carriers currently 

operating at the airport, and 85 percent 

of the remaining slots to the air carriers 

currently operating at LaGuardia in 

proportion to their current operations, 

the FAA is encouraging those air 

carriers to continue their development 

of civil aeronautics at the airport and in 

the routes served to and from that 

airport. As several commenters noted, 

there is substantial economic value both 

to New York and the communities 

served by flights from LaGuardia. 

American Airlines raised an 

additional concern about the use of 

cooperative agreements, based upon the 

language in 49 U.S.C. 40110(a)(2) that 

requires the FAA to receive ‘‘adequate 

compensation’’ for the disposal of 

property interests. The FAA finds that it 

is receiving ‘‘adequate compensation’’ 

through the minimum slot usage 

requirements. In addition, the slots are 

being given in order to promote civil 

aeronautics. 

5. Leases That Terminate by Their Own 

Terms Are Not a ‘‘Taking’’ of Property 

The ATA and the air carriers argue 

that the proposed auctions constitute a 

taking by the government and that the 

taking is prohibited for several reasons 

including that it is not for a legitimate 

purpose, it lacks due process, and fair 

value is completely absent in the 

proposed option 1 and inadequate in 

option 2. The FAA strongly disagrees 

with the contention that the slot 

auctions contemplated in this rule are in 

any way an impermissible taking.20 First 

and foremost, in order to be a taking, the 

air carriers would need to have a 

possessory interest in the slots and they 

do not. For bankruptcy purposes, air 

carriers may have acquired a property 

interest in slots, as discussed above, but 

as also cited in those cases, if that 

interest expires under the terms under 

which it was granted, then there has 

been no property right to be taken. The 

Order establishing Operating 

Authorizations at LaGuardia was of a 

fixed duration and any rights the air 

carriers may have had in those operating 

authorizations will automatically 

terminate when this rule becomes final. 

Slots transferred to air carriers using 

cooperative agreements or leases 

awarded as the result of auctions will 

similarly have express automatic 

termination provisions. For slots 

transferred using cooperative 

agreements, the air carriers’ property 

interest would automatically terminate 

if the specified ‘‘use or lose’’ provisions 

are not met or one of the other 

conditions specified in the cooperative 

agreements arises. If those provisions 

are satisfied, then most of these slots 

will terminate in 10 years. A few will 


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21Perhaps more accurately, the determination of 

which of these slots have which of the specified 

termination dates will follow the process described 

in this rule. 

22U.S. Airways Group’s main contention is that 

the slots are property of the airlines because they 

have held them ‘‘more or less continuously’’ for 40 

years. 

23Unlike the operating authorizations provided 

under the LaGuardia Order, where the date of the 

termination of the carriers’ property interest could 

not be known with absolute certainty other than it 

would be when this final rule becomes effective (it 

admittedly has taken longer than the FAA 

contemplated to issue this final rule) the slots that 

will be awarded as the result of an auction have a 

firm term of ten years, with little right by the FAA 

to terminate prior to the end of that term. Most of 

the cooperative agreements will similarly have a ten 

year firm term. 

24Section 45303(a) directs that all fees imposed 

and amounts collected under chapter 453 are 

payable to the Administrator of the FAA. 

25Fees collected under the authority of 49 U.S.C. 

45302, namely fees for issuing airmen certifications 

and registration of aircraft, in accordance with the 

express language in that section and language that 

historically has been in each appropriation, are 

credited to FAA’s operations appropriation. 

have varying termination dates as 

agreed upon by the FAA and each 

carrier.21 When the termination date 

arrives, any property interest the air 

carrier may have in the slot similarly 

automatically ends. There is no more a 

taking of air carrier property than there 

would be in the eleventh year of a ten 

year lease of FAA real property to an air 

carrier. 

The ATA and the air carriers provide 

little support for the proposition that 

Operating Authorizations or slots 

awarded to carriers under an order with 

a fixed duration results in entitlement to 

those slots in perpetuity.22 To the extent 

that these commenters allege harm 

(such as having made investments in 

airport infrastructure) based on the 

unreasonable assumption that the status 

quo would remain forever even though 

the Order explicitly said it would 

expire, that harm is the responsibility of 

the air carriers. These carriers took a 

risk, for which they have received a 

return on their investment based on 

their use of the Operating 

Authorizations for the period specified 

in the Order. If these commenters do not 

wish to incur a significantly smaller 

risk 23 for a relatively small percentage 

of the slots that will be initially be 

transferred to them through cooperative 

agreements, and then returned to the 

FAA as those agreements expire in order 

to be auctioned, the carriers are free not 

to apply for these cooperative 

agreements. 

The ATA and the air carriers rely on 

what they perceive as a three pronged 

test established in Penn Central Transp. 

Co v. New York City, 438 U.S. 104 

(1978). In Penn Central the Court found 

that there was no compensable taking 

when the City’s Landmarks Preservation 

Law would not allow additional stories 

to be added to Grand Central Station. 

Even using the three prong test 

articulated by the commenters, for the 

reasons stated above, the activities 

described in this rule would not 

constitute a Fifth Amendment taking. 

The ATA also overstates the extent of 

the alleged harm. Under the option 

selected in this rule, air carriers will get 

to keep, at a minimum, approximately 

85 percent of their current slots and for 

all but eight airlines, they will get to 

keep 100 percent of their current slots. 

The Port Authority cites to Air 

Pegasus of D.C., Inc. v. United States, 

424 F.3d 1206 (Fed. Cir. 2005), for the 

proposition that the Federal 

Government’s sovereignty over airspace 

is not ownership in fee, but rather 

navigational servitude. Air Pegasus, 

however, stands for the proposition that 

there is no private property right of 

access to navigable airspace. If the FAA 

legitimately exercises this authority to 

prohibit the use of a segment of 

navigable airspace, there is no property 

taken for Fifth Amendment purposes. In 

Air Pegasus a heliport operator was 

found to have no private property rights 

in its facility even though it lost all 

opportunity to generate revenue (and 

went out of business) after the FAA shut 

down much of the airspace around 

Washington, DC following the attacks of 

September 11, 2001. 

6. The Draft Lease Terms Included in 

the NPRM Were for Illustrative Rather 

Than Probative Purposes 

The ATA also uses the draft Lease 

agreement as evidence that the FAA 

does not have the authority to lease the 

slots. The ATA places far too much 

reliance on an early draft document that 

was provided to give commenters some 

idea of the type of lease the FAA was 

considering. For example, the standard 

clauses in the FAA’s Acquisition 

Management System (AMS) use the 

word ‘‘contract’’ instead of ‘‘lease’’ 

because leases are a form of contract. 

The AMS, however, by its explicit terms 

applies to the acquisition and lease of 

property. See, Section 4.2 of the 

Acquisition Management System, and 

Real Estate Guidance, http:// 

fast.faa.gov/realestate/index.htm and 

T3.8.1 of the FAA’s Procurement 

Guidance, also located at http:// 

fast.faa.gov. The FAA acknowledges 

that some of the terms in the sample 

lease that the FAA provided for 

illustration were not appropriate for a 

lease of slots, and will modify any 

proposed leases accordingly. An 

additional opportunity to comment on 

these terms will be provided prior to 

any auction. These sample terms, 

however correct or incorrect, have no 

bearing on whether the FAA has the 

authority to enter into leases. Similarly, 

because Attachment A was not included 

in the sample lease, the ATA argues that 

is evidence that there is no property the 

FAA can lease. Attachment A will be 

the particular slots each carrier receives. 

Each Attachment A will be unique for 

each particular airline. Before the slots 

are given or auctioned, there is no way 

to tell what any particular Attachment 

A will look like, therefore no 

Attachment A was provided. Instead the 

sample lease simply provided notice 

that there will be an attachment that 

will describe which slots the lessee (or 

cooperative agreement holder) will 

have. 

B. The FAA Has Authority To Retain the 

Amounts Received From the Lease and 

Disposal of Property and To Use Those 

Proceeds for Congressionally 

Authorized Purposes 

The commenters assert that the FAA 

has no authority to retain the amounts 

received from the lease of slots, and that 

31 U.S.C. 3302 requires all amounts 

received by an agency be deposited into 

the General Receipts account. The FAA, 

however, has an express exemption 

from 31 U.S.C. 3302 that it was given in 

276 of the Air Traffic Management 

System Performance Improvement Act 

of 1996, Public Law 104–264, codified 

at 49 U.S.C. 45303(c). Section 276 states 

that ‘‘Notwithstanding section 3302 of 

Title 31, all fees and amounts collected’’ 

by the FAA, except for a few specified 

exceptions such as insurance premiums, 

‘‘shall be credited to a separate account 

established in the Treasury and made 

available for Administration activities; 

* * * .’’ 49 U.S.C. 45303(c). These 

amounts are available immediately for 

expenditure for Congressionally 

authorized purposes and remain 

available until expended. Id. 

This paragraph of section 45303, by 

its unambiguous terms, applies to all 

amounts collected by the FAA, whether 

or not they are amounts from fees 

established under chapter 453. This is 

in contrast to the first paragraph of this 

section of law, which only applies to 

fees and amounts collected under 

chapter 453. 24 Fees collected under 

chapter 453 include fees for air traffic 

control services provided to planes that 

neither take off from nor land in the 

United States (overflight fees), and fees 

for airmen certificates and registration 

of aircraft.25 The FAA, however, collects 

amounts under authorities contained in 


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other chapters of law, such as insurance 

premiums and other amounts which are 

collected under chapter 443 of Title 49, 

amounts from the disposal of an interest 

in property for adequate consideration 

under chapter 401, and amounts 

provided from other air traffic service 

providers also under chapter 401, as 

well as federal, state and local 

governments and private entities under 

chapter 1 of Title 49. 

It is a well established principle of 

statutory interpretation that laws ought 

‘‘to be so construed that, if it can be 

prevented, no clause, sentence, or word 

shall be superfluous, void, or 

insignificant.’’ TRW Inc. v. Andrews, 

534 U.S. 19, 32 (2001). Interpretations of 

statutes should ‘‘give effect, if possible, 

to every clause and word of a statute.’’ 

United States v. Menasche, 348 U.S. 

528, 538–39 (1955) (citing Inhabitants of 

Montclair Tp. v. Ramsdell, 107 U.S. 147, 

152 (1883)). Using this principle, effect 

must be given, if possible, to the words 

‘‘all fees and amounts’’ except for those 

specifically excluded, should be 

deposited into the account established 

by 49 U.S.C. 45303(c). The only 

amounts the FAA is expressly 

authorized under this paragraph to 

exclude from this account are the 

insurance premiums and related fees it 

collects and deposits into the Aviation 

Insurance Revolving Fund. A plain 

meaning interpretation which gives 

effect to all the words in that paragraph 

is that all fees and other amounts 

collected by the FAA under authorities 

contained in other chapters of Title 49 

or other titles should be deposited into 

the account established by 45303(c). 

This would include any amounts 

collected from the lease of FAA 

property under the authority of 49 

U.S.C. 106(n) and 49 U.S.C. 40110(a)(2). 

C. The Auction of Slots Does Not Affect 

the Proprietary Rights of the Port 

Authority 

Similarly, both the Port Authority and 

the Airports Council International— 

North America (ACI–NA) as well as 

American Airlines believe that the 

SNPRM impinges on the proprietary 

rights of the Port Authority. The ACI– 

NA believes that the FAA’s powers 

under 49 U.S.C. Section 40103 do not 

allow us to auction slots. In support of 

its position, the ACI–NA also cites to 

Western Air Lines v. Port Authority of 

New York and New Jersey, 658 F. Supp. 

952, 956–57 (S.D.N.Y. 1986), aff’d, 817 

F.2d 222 (2nd Cir. 1987). The FAA 

maintains that Western supports its 

position more than that proffered by the 

ACI–NA. Western concluded that the 

perimeter rule established by the Port 

Authority was a valid restraint exercised 

in accordance with the Port Authority’s 

proprietary interest. Western did not 

suggest that the proprietary interests of 

the Port Authority take precedence over 

FAA regulation; instead Western 

explicitly states that ‘‘[t]his Court 

concludes that, in the absence of 

conflict with FAA regulations, a 

perimeter rule, as imposed by the Port 

Authority to manage congestion in a 

multi-airport system, serve an equally 

legitimate local need and fits 

comfortably with that limited role, 

which Congress has reserved to the local 

proprietor.’’ Id. at 958. Therefore, even 

if there were a conflict between the 

proposed rule and the Port Authority’s 

proprietary rights, the FAA’s rule would 

prevail under Western. 

The establishment of slots under 

§ 40103 is consistent with the authority 

that the FAA has exercised at LaGuardia 

for the past several decades. Western is 

easily distinguishable from the current 

rulemaking in that this rulemaking does 

not affect in any way how the Port 

Authority deals with its airport 

including use of its terminals. In fact, 

there will be 95 percent of the air traffic 

coming into the airport during the same 

time periods as currently exists at the 

airport. The only change will be the 

result of the five percent reduction in 

capacity. 

The Port Authority’s assertion is that 

changing the airlines that come in or the 

number of flights interferes with its 

proprietary interests. However, through 

its regulatory process in certifying 

airlines or capping arrivals and 

departures, the FAA can and has 

affected the air traffic in and out of 

LaGuardia and neither the Port 

Authority nor any other entity has 

challenged the FAA’s responsibility to 

issue certifications or control the flow of 

air traffic, much less suggested it affects 

the proprietary rights of airport 

authorities. Additionally, the Port 

Authority has always had to 

accommodate carriers under the HDR by 

accommodating airlines that leased, 

purchased, or traded slots under the 

HDR; that received slots through FAArun lotteries; or that were granted slot 

exemptions under 49 U.S.C. 47174 and 

41716. Furthermore, the Port Authority 

is obliged to file competitive access 

reports to the Secretary if it denies 

access to a requesting carrier at 

LaGuardia. Accordingly, the Port 

Authority may not claim that the fact 

that a slot is acquired through an 

auction presents any unusual 

accommodation issues that it has not 

routinely dealt with in the past. 

D. The FAA Has Complied With the 

Administrative Procedure Act 

1. The Docket Contained Adequate 

Information for Meaningful Comment 

on the Rulemaking Proposal 

Several commenters also claimed the 

FAA failed to meet the requirements of 

the Administrative Procedure Act (APA) 

(5. U.S.C. 551, et seq.). The Port 

Authority claimed that relevant 

documents either were not submitted to 

the docket at all, or in a form and time 

insufficient to permit adequate analysis 

by interested parties. In particular, the 

Port Authority suggested the draft lease 

documents were submitted to the docket 

well after the initiation of the comment 

period, contained vague terms, and did 

not adequately set forth the conditions 

for default. The Port Authority 

maintained the default conditions are 

critical because of the impact of a 

default on the Port Authority’s gate 

leasing agreements. The Port Authority 

also claimed that it could not 

adequately evaluate the appropriateness 

of the proposed usage requirement and 

the potential impact on small 

communities because relevant 

documentation was, in the first 

instance, not submitted at all, and in the 

second instance, submitted for the first 

time only days before the close of the 

comment period. 

The ATA commented that the 

technical report explaining how slots 

would initially be allocated does not 

adequately describe how the FAA 

intends to draw down operations in 

excess of 75 per hour (in the 0900 and 

1700 periods) under Option 2. It 

claimed this omission calls into 

question whether the FAA truly meant 

to cap operations at 75 under Option 2. 

The FAA believes the docket 

submissions provided interested parties 

with sufficient information to 

meaningfully comment on the proposal. 

The draft lease agreement for 

Unrestricted Slots, while provided 

relatively late during the comment 

period, is directly related to the FAA’s 

potential auctioning of the slots under 

its acquisition authority. The draft 

cooperative agreement, which would 

govern the lease terms of the Common 

and Limited Slots, is arguably more 

directly related to the instant 

rulemaking since they will initially be 

allocated to carriers under this rule. 

While the Port Authority questions the 

comprehensiveness of these draft leases, 

they are in fact, largely complete. The 

FAA is intentionally placing only 

limited constraints on the slots. The 

goal of this rulemaking is not to impose 

complicated and intrusive constraints 

on the slots. Rather it is to allow for a 


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more efficient air traffic system in and 

around LaGuardia while permitting 

some access to new entrants and 

stimulating the free market. In order to 

maximize efficiencies, the FAA must 

assure that the majority of the slots have 

a usage requirement. That requirement, 

which is mandated by today’s rule, is 

the primary restriction on the Common 

Slots. Limited Slots are granted for a 

shorter period of time, but otherwise 

largely mimic the Common Slots. The 

Unrestricted Slots are even less 

constrained with no usage requirement. 

As to the Port Authority’s assertion 

that the potential impact on small 

community service was only provided 

days before the comment period closed, 

the Port Authority is mistaken. This 

documentation was submitted a second 

time at the Port Authority’s request. It 

had claimed that it could not read the 

data in the original submission. 

However, neither the FAA nor any other 

commenter to the rulemaking claimed to 

have any difficulty reading the original 

document. The second submission was 

filed as a courtesy to the Port Authority. 

As to the Port Authority’s final claim 

that it was unable to evaluate the 

appropriate usage rate because there 

was no documentation in the docket, 

the FAA continues to believe that the 

Port Authority is uniquely situated to 

evaluate the extent to which carriers 

utilize the existing slots because it 

controls the gates at the airport. The 80 

percent usage requirement at the airport 

has been in place at LaGuardia for 

approximately 25 years, and the FAA 

has not historically seen a need to 

further increase the usage requirement. 

The FAA’s suggestion in the SNPRM 

that the Port Authority demonstrate why 

it believed that the existing usage 

requirement was too lenient was based 

on the fact that the Port Authority made 

this claim without any data. The FAA 

assumed that, as the airport proprietor, 

the Port Authority had some basis for its 

claim and suggested the airport provide 

any relevant data. Thus, the FAA is 

puzzled as to why the Port Authority 

would now claim that it needs to see 

data generated by the FAA to 

substantiate its claims. 

As to the ATA’s claim that the 

technical report failed to describe how 

the FAA would pull down a total of 

three operations under proposed Option 

2 when the report explained how those 

same three operations would be pulled 

down under proposed Option 1, the 

FAA believes that the technical report 

was sufficiently clear. In any event, the 

FAA has decided against adopting 

Option 2 and providing a separate 

reduction in capacity in the two hours 

where existing scheduled operations 

exceed 75. 

2. The Discussion of the Auction 

Process Provided Sufficient Detail for 

Meaningful Comment on the 

Rulemaking Proposal 

US Airways argued the FAA provided 

insufficient time to comment on the 

details of the auction process. United 

claimed that the SNPRM should have 

proposed dates as to when the auctions 

would be conducted and should have 

committed to providing a certain 

amount of advance notice. The ATA 

claimed that the FAA violated the APA 

by failing to account for carrier’s costs 

in participating in an auction. 

In the SNPRM the FAA provided only 

a general discussion of the procedures 

that would govern any future auction. 

This general discussion was provided 

only to give interested parties a context 

for the rulemaking. One of the primary 

complaints about the NPRM was that 

the FAA failed to give any detail about 

the market-based mechanism it 

intended to use under that proposal. 

Consequently, the commenters provided 

very little analysis of the proposal to 

have ten percent of the slots at the 

airport expire every year, other than to 

say that it was overly disruptive. 

Because the FAA intended at that point 

to impose a market-based reallocation 

mechanism by regulation, the FAA 

believes the commenters complaints 

were valid. The agency does not believe 

that complaint was valid with regard to 

the SNPRM. However, the agency was 

also concerned that while the SNPRM 

did not propose to implement a marketbased reallocation mechanism, 

commenters would continue to 

complain that they could not 

meaningfully comment if context were 

not provided. Thus, the FAA decided to 

provide a general description of the 

likely auction procedures to encourage 

meaningful comment on the underlying 

proposal, which is that after imposing a 

ten-year cap to address congestion, a 

certain number of slots would revert to 

the FAA for retirement or reallocation. 

The FAA has provided a more detailed 

discussion of the procedures that would 

be used in an auction. 73 FR 53477. 

September 16, 2008. The agency 

provided for a 15-day comment period 

which closed on October 1, 2008. Based 

on the comment submissions, the FAA 

may decide to refine any final auction 

procedures. That refinement, however, 

does not impact this rule. 

Some commenters claimed that 

because the FAA has not fully 

developed the auction process, the FAA 

cannot finalize the proposed rule. Like 

the ATA and the draft lease documents, 

these commenters place far too much 

reliance on procedures unrelated to the 

rulemaking. The SNPRM discussed in 

detail the process for providing slots at 

LaGuardia: approximately 85 percent of 

them will be provided to incumbent air 

carriers operating at that airport through 

cooperative agreements and the 

remaining ones will be either 

transferred via lease or retired. The 

particulars of the auction process (e.g., 

will it all be via the internet or will 

paper bids be allowed, will the help 

desk be available 24/7 or only during 

normal business hours, the exact day 

when the auction will take place, 

whether successive rounds of bidding 

will be allowed, whether multiple bids 

from the same carrier will be permitted) 

are not relevant to this rule. The FAA 

will, in accordance with its Acquisition 

Management System, continue to 

provide adequate notice of its planned 

auction procedures and solicit comment 

on those procedures prior to conducting 

any auction. 

The ATA’s claim that not ascribing 

the costs of the auction to the rule 

violates the APA likely stems from 

unclear drafting on the part of the FAA. 

We have included the auction costs and 

reallocation benefits in the final 

regulatory evaluation for this rule. 

3. The FAA Adequately Considered 

Alternatives 

Despite the fact that the FAA has 

proposed a total of three different 

allocation methods in this rulemaking, 

several commenters claimed that the 

agency failed to adequately explore 

additional alternatives in violation of 

the APA. An agency is not required to 

consider all possible alternatives when 

engaging in rulemaking. The fact that 

the commenters dislike the alternatives 

considered does not mean that the FAA 

has pre-decided the outcome by failing 

to recognize that there may be other 

alternatives. In fact, the agency 

proposed multiple options. In addition, 

it has considered many of the 

alternatives that the commenters 

recommended in response to the 

SNPRM. As discussed later in this 

document, the FAA has decided against 

adopting these approaches in lieu of 

proceeding with a final rule. However, 

aspects of many of these 

recommendations have been 

incorporated into the rule or are being 

addressed elsewhere. 

IV. Discussion of the Final Rule 

A. Allocation of Slots at LaGuardia 

The FAA believes that at least for the 

next several years, LaGuardia will likely 

be oversubscribed in terms of its 


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physical ability to handle aircraft. 

Simply put, expansion of the airport by 

adding runways is not a viable option 

given its location. Accordingly, a cap on 

operations at the airport is necessary to 

provide for the efficient use of the NAS. 

No commenter has suggested that 

there is no need to cap the airport. 

While the ATA had initially claimed in 

2006 that there was inadequate 

justification to retain the cap, no 

commenter, including the ATA, still 

appears to believe the cap should be 

lifted. 

Rather, the dispute surrounding this 

rulemaking revolves around the FAA’s 

proposal to either retire or reallocate 

slots at the airport. Simply put, 

incumbents at the airport are largely 

satisfied with the status quo. While 

there were mixed opinions about 

whether any slots should be retired, the 

vast majority of air carriers opposed any 

measure that would result in a carrier 

holding fewer slots under the final rule 

than it held under the LaGuardia Order. 

Of those carriers who were open to 

reallocation, they tended to support an 

administrative reallocation mechanism, 

noting the controversy surrounding the 

market-based allocation mechanism 

proposed in the SNPRM. 

The Port Authority noted that the 

FAA has asserted that the proposed 

measures were designed to address 

severe delays, preserve consumer 

choice, maintain airline competiveness 

and preserve the affordability of airfares. 

Most commenters agreed, in some form, 

with the Port Authority’s assessment 

that the proposal achieved none of these 

objectives. Rather, most commenters 

noted that the reallocation mechanism 

did nothing to address congestion and 

could have the unintended consequence 

of harming competition and restricting 

passenger access because of the loss of 

service to small communities. 

United argued that rather than 

encouraging a market-based allocation 

method with a robust secondary market, 

the proposal would have the opposite 

effect—imposing a new and more 

market-intrusive regulatory scheme. To 

the extent there is any market failure at 

LaGuardia, it posited that failure is a 

capacity problem that is best remedied 

by the imposition of a cap. 

Not only is the FAA required to 

ensure the efficient use of the NAS, but 

it must do so in a manner that does not 

penalize all potential operators at the 

airport by effectively shutting them out 

of the market. The FAA cannot simply 

walk away from an airport once it has 

imposed caps, but rather should take 

steps to ensure that there are, in fact, 

competitive market forces and actual 

and potential competition. Competition 

at an airport benefits the flying public 

by providing price competition and 

expanded service. The ability of carriers 

to initiate or expand service at the 

airport is hindered, in large part, by the 

imposition of the cap. Accordingly, the 

FAA believes it must strike a balance 

between (1) promoting competition and 

permitting access to new entrants and 

(2) recognizing historical investments in 

the airport and the need to provide 

continuity. It is not the role of the 

Government either to dictate particular 

business models or to constrain a 

market and provide no means for others 

to enter that limited market. 

The FAA believes that it is well 

within the agency’s authority in 

49 U.S.C. 40103 to provide some 

mechanism for reallocation. As was the 

case with the HDR, the LaGuardia Order 

provides for a lottery of new and 

returned capacity but does not provide 

for the reallocation of capacity that is 

actively being used. The FAA believes 

this allocation method may be justified 

as a short-term measure, but it is 

inadequate for any cap intended to last 

for more than a couple of years. Indeed, 

Congress appears to have shared similar 

concerns when it allowed for slot 

exemptions in AIR–21. Today’s 

proposal attempts to strike the 

appropriate balance by actively 

developing a robust secondary market 

that properly values the limited asset 

that the FAA created. 

1. Proposed Options 

The FAA proposed two different 

options for allocating slots in the 

SNPRM. Under both options the vast 

majority of slots would have been 

grandfathered to existing carriers at the 

airport, with a relatively small minority 

either retired or auctioned off in the free 

market. Both options allowed for a 

carrier base of operations for which up 

to 20 slots would be automatically 

allocated to the carrier as Common 

Slots. These slots would not count 

toward the calculation of slots that 

would revert to the FAA for retirement 

or reallocation. 

Under Option 1, ten percent of a 

carrier’s Operating Authorizations above 

its base of operations would revert to 

the FAA over a five-year period. The 

FAA proposed that eight percent would 

be used for reallocation and two percent 

would be retired for delay mitigation. 

The FAA also noted that the amount of 

delay mitigation with a two percent 

retirement rate may be too low to 

adequately address congestion and 

noted that it may increase that number. 

The monies collected under an auction 

of reallocated slots would be utilized by 

the FAA for delay-mitigation efforts in 

the New York metropolitan area. Some 

of these efforts could involve a number 

of initiatives identified by the NYARC 

as measures that could reduce 

congestion in the area. 

Under Option 2, 20 percent of a 

carrier’s Operating Authorizations above 

its base of operations would revert to 

the FAA over five years. All twenty 

percent would be reallocated, but the 

carrier would retain the net proceeds, 

rather than the FAA. The carrier 

initially allocated the slot would be 

unable to bid on the slot because it 

could bid unreasonably high amounts in 

order to keep out competitors, knowing 

that the money would come back to it 

as auction proceeds. 

The FAA continues to believe that 

under either option a sufficient number 

of slots would be available for 

reallocation to permit access to the 

airport and establish a fair market value 

for slots that could then translate into a 

robust secondary market. While Option 

2 allowed for an even greater number of 

available slots, it also had the potential 

to prevent the most interested carrier, 

i.e., the one initially allocated the slot, 

from bidding on it. While the FAA 

anticipated that a carrier could obtain a 

comparable slot, either through the FAA 

auction or on the secondary market, 

there was no guarantee that would 

happen. This concern was raised by 

several commenters who noted that the 

inability for the carrier to bid on its 

previously held slots is even more 

troubling because that carrier may have 

the greatest incentive to retain the slot 

based on established service. Several 

commenters, including the ATA, Delta 

and US Airways, suggested that the 

FAA should not limit the number of 

bidders and possibly the most interested 

bidder. 

Several commenters questioned why 

ten percent of slots would have expired 

under Option 1 but 20 percent of slots 

would have expired for reallocation 

under Option 2. Specifically, ATA 

commented that if the FAA believes that 

ten percent of slots are enough to create 

a secondary market, then why did it 

propose Option 2? Additionally, Delta 

suggested that selecting twenty percent 

of slots in Option 2 is arbitrary and 

cannot be reconciled with the selection 

of ten percent of slots in Option 1. 

Unique among the commenters was 

United, who argued that Option 1 was 

particularly unfair because the carrier 

initially holding the slot would not be 

entitled to receive any compensation for 

its loss. 

As noted above, the FAA believes 

either approach would help stimulate a 

secondary market and would lead to a 

proper assessment of the slots’ true 


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26Twenty percent of the Limited Slots that will 

be reallocated will not be leased to carriers as 

Limited Slots. This is because the FAA intends to 

auction them as Unrestricted Slots shortly after the 

final rule takes effect. Likewise, the Limited Slots 

scheduled for retirement will not be leased to 

carriers, although the carrier will be entitled to use 

the slot until March 8, 2009. 

27 In the SNPRM, the FAA had proposed that it 

would initially exclude hours where carriers had 

collectively identified two slots as Limited Slots. 

Since generally four slots will be retired in every 

hour, the FAA believes it is appropriate to increase 

that number from two to five. 

value. The agency also believes that 

either approach would have a minimal 

impact on operations at the airport and 

would avoid much of the potential 

disruption associated with its proposals 

in the NPRM. However, the agency is 

persuaded that Option 1 maximizes the 

efficiency of the slot because the carrier 

who may value it the most may be the 

one who held it initially. The FAA has 

decided to adopt the first option, except 

that it will retire five percent of the 

airport’s capacity by lowering the 

hourly cap for scheduled operations to 

71. The rule also provides for the 

reversion of approximately ten percent 

of the total number of slots currently at 

the airport to provide access. 

2. Categories of Slots 

Under today’s rule, the FAA will lease 

property interests in slots to carriers for 

a period of up to ten years, the date the 

rule sunsets. There will be three 

categories of slots: Common Slots, 

Unrestricted Slots, and Limited Slots. 

Common Slots are those slots 

grandfathered to carriers currently at the 

airport. They will be awarded to the 

carriers under a cooperative agreement 

for the duration of the rule. The 

cooperative agreement will provide 

carriers with a ten-year leasehold 

interest. Once the rule sunsets, all 

interests will revert to the FAA. Unlike 

slots allocated under the HDR and 

Operating Authorizations allocated 

under the LaGuardia Order, carriers will 

be granted clear property rights to 

Common Slots, which could be 

collateralized or subleased to another 

carrier for consideration. These property 

rights, however, will not be absolute. 

Common Slots will be subject to 

reversion to the FAA under the rule’s 

minimum usage provision, may be 

temporarily withdrawn for operational 

reasons, and could be subject to 

retirement should the FAA need to 

further reduce the cap. 

Those slots not categorized as 

Common Slots will be categorized 

initially as Limited Slots and then as 

Unrestricted Slots once they are 

reallocated. 

Unrestricted Slots are slots that a 

carrier would acquire as a leasehold. 

Unlike slots allocated under a 

cooperative agreement, these slots will 

require monetary consideration to the 

FAA. Since a carrier leasing an 

Unrestricted Slot will be required to do 

so because of government action, these 

slots will not be withdrawn by the FAA 

under the use-or-lose provisions, for 

operational reasons, or to further reduce 

the cap should such reductions be 

necessary. As with Common Slots, 

Unrestricted Slots will expire when the 

rule sunsets. 

Limited Slots are slots that are 

identified for retirement or auction. 

Those Limited Slots identified for 

auction will be leased to the carriers 

under a cooperative agreement for a 

period of 1–4 years 26 so that they can 

be reallocated after that period of time. 

Limited Slots will convert to 

Unrestricted Slots after they are 

reallocated. As with Common Slots, 

Limited Slots may be withdrawn under 

the proposed use-or-lose provision, or 

for operational reasons. Because they 

are already awarded for less than five 

years, they will not be used to reduce 

capacity should additional reductions to 

the cap be necessary. 

3. Initial Allocation of Slots 

No later than this rule’s effective date, 

the FAA will notify all carriers which 

slots they will initially be allocated 

under the rule. The FAA will make this 

determination based on slots usage of 

the underlying Operating 

Authorizations the week of September 

28 through October 4, 2008. The FAA 

proposed in the NPRM to make this 

determination based on operations the 

first full week of 2007, but believes the 

later date better assesses the operating 

status of carriers now. One carrier that 

held Operating Authorizations in 

January 2007 is no longer in business, 

although it continues to hold an air 

carrier certificate. While those 

Operating Authorizations are currently 

being operated by another carrier solely 

within its marketing control, the FAA 

believes it is simply cleaner to allocate 

the slots to the holder of the Operating 

Authorization only if the carrier is still 

operating at the airport. Likewise, some 

Operating Authorizations have been or 

may be returned to the FAA under the 

LaGuardia Order’s use-or-lose 

provisions and will not be allocated to 

the carrier that held them nearly two 

years ago. 

Upon the rule’s effective date, each 

carrier at LaGuardia will automatically 

be awarded up to 20 Common Slots, 

which will constitute the carrier’s base 

of operations. The FAA believes this is 

a rational approach to assuring that no 

carrier is impacted at a level that could 

seriously disrupt its existing operations. 

Air Canada will be awarded an 

additional 22 Common Slots because of 

the United States’ international 

obligations with Canada. Eighty-five 

percent of the remaining slots will also 

be grandfathered as Common Slots to 

the carrier holding the corresponding 

Operating Authorization under the 

LaGuardia Order. The FAA has decided 

to grandfather the majority of slots at the 

airport in order to minimize disruption 

and to recognize the carriers’ historical 

investments in both the airport and the 

community. 

As noted above, the remaining slots 

will be categorized as Limited Slots. 

Approximately one third of the Limited 

Slots will be retired by the FAA on 

March 8, 2009, the beginning of the 

2009 Summer Scheduling Season. The 

remaining Limited Slots will be 

reallocated via auction over a five-year 

period. The number of slots that a 

particular carrier will have classified as 

Limited Slots is based proportionally on 

the carrier’s presence at the airport, 

taking into consideration each carrier’s 

base of operations. The FAA will inform 

all carriers that will be awarded Limited 

Slots how many Limited Slots they will 

have no later than the rule’s effective 

date. 

An affected carrier will have ten days 

to identify 50 percent of the total 

number of Limited Slots. During the 

following ten days, the FAA will 

determine through a randomized 

process the remainder of slots that will 

be categorized as Limited Slots, taking 

into account the need to retire some 

slots at every hour and the need to have 

capacity available for reallocation 

throughout the day. 

In determining which slots should be 

designated as Limited Slots, the FAA 

will initially exclude from consideration 

slots held during all hours where 

carriers have collectively determined 

five or more slots should be Limited 

Slots.27 This approach will assure slots 

will be available for auction throughout 

the day. The FAA will also determine in 

what year (0–4) each Limited Slot will 

revert to the FAA for reallocation and 

which slots will be retired. In this way, 

all carriers will know within 20 days of 

the rule’s effective date what slots will 

become available for purchase and 

when. 

The time windows for the Limited 

Slots will be evenly distributed over the 

day to the extent possible. The duration 

of each Limited Slot will be assigned by 

a fair allocation process such that each 

affected carrier’s aggregate lease 


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duration will be approximately equal to 

that of the other affected carriers. 

Although most stakeholders are 

opposed to any slots being withdrawn 

and auctioned, two respondents thought 

the auction proposals might be too 

restricted or limited. The National Air 

Carrier Association supported 

encouraging more competition at 

LaGuardia but questioned whether a 

sufficient number of slots will be 

available for auction to result in more 

competition. The Federal Trade 

Commission suggested that the ability 

for auctions to improve allocative 

efficiency at LaGuardia is limited by the 

small number of slots being auctioned. 

Additionally, the Federal Trade 

Commission is concerned that the few 

slots that are available for auction are 

biased towards the least valuable slots. 

The FAA believes the fair allocation 

methodology resolves that concern. 

The FAA recognizes that the overall 

number of slots that will be auctioned 

is relatively small, particularly when 

compared to its original proposal to 

reallocate ten percent of the airport’s 

total capacity every year. Such an 

approach would not only have assured 

access to the airport, but would arguably 

maximize the efficiency of the system, 

assuming no other constraints. 

However, as discussed in the SNPRM, 

the carriers would in fact face other 

constraints. Based on the comments of 

the Port Authority to the original 

proposal, the largest constraint could be 

the ability of the Port Authority to 

handle its facility as airport proprietor. 

The ATA claimed that carriers need to 

know which of its slots are Limited 

Slots 90 days before the effective date of 

the rule in order to be compliant with 

the rule on the effective date. While the 

rule becomes effective on December 9, 

2008, carriers can continue their 

operations without change until March 

8, 2009, the first day of the summer 

scheduling season. Accordingly, the 

FAA believes carriers will have no 

problems setting a compliant schedule 

well in advance of the summer 

scheduling season. 

4. Retirement of Slots 

In the NPRM and SNPRM, the FAA 

proposed to cap weekday and Sunday 

afternoon operations at 81 per hour (75 

for scheduled operations and six for 

general aviation). The airport is already 

capped under the LaGuardia Order at 78 

(75 for scheduled operations and three 

for unscheduled operations). This rule 

replaces that Order, although carriers 

will be allowed to use the slots held 

under the Order until March 8, 2009. On 

that day, the cap on scheduled 

operations will decrease to 71 per hour. 

This represents a five percent reduction 

in capacity at the airport. Based on the 

modeled results, lowering the hourly 

cap from 75 to 71 could reduce mean 

delays by approximately 41 percent 

compared to modeled delays in August 

2007. The FAA selected the new cap of 

71 hourly scheduled operations because 

delays begin to increase sharply after 

that level of sustained demand. The 

hourly reductions will not result in 

eliminating all delay at the airport, 

especially when operating conditions, 

such as adverse weather, reduce 

capacity. However, congestion-related 

delays are expected to be measurably 

reduced. 

The FAA does not intend to raise the 

new cap unless conditions at the airport 

improve sufficiently to permit 

additional operations without undue 

delay. The FAA also specifically 

reserves the right to further lower the 

cap should operations at the airport 

remain unduly delayed. The FAA 

anticipates it would call for a Schedule 

Reduction Meeting should further 

reductions be warranted. In any case, 

the FAA would fully meet its 

obligations under the APA at that time, 

and this rule does not provide a means 

for further cap reductions absent 

subsequent action on the part of the 

agency. 

The Port Authority claimed in 

response to the NPRM that 75 scheduled 

operations per hour are too high; 

American Airlines echoed this concern 

in its comments on the SNPRM. United 

argued against retiring any existing 

slots. It claimed that any reduction in 

the number of slots is contrary to market 

efficiencies because it would eliminate 

an economically valuable asset. 

The ATA argued that the FAA 

provided no justification for lowering 

the cap: If the FAA believes there is a 

need to reduce capacity below the cap, 

the need would exist regardless of 

allocation mechanism and should be 

fully explained. Many of the 

commenters also argued that the 

SNPRM results in almost no reduction 

in delays, with average delays reduced 

by less than one minute. 

American Airlines supported an 

overall reduction in the existing cap at 

the airport, noting that delays were too 

high. It also supported a flexible system 

to raise the cap if sufficient 

improvements are made to the airspace. 

United, on the other hand, was critical 

of the FAA’s proposal to increase the 

cap when greater efficiencies in the 

airspace are realized and suggested the 

agency instead engage in rulemaking 

prior to increasing the cap. The ATA 

agreed with United that the FAA should 

not raise the cap without seeking input 

from stakeholders. United also linked 

the proposal to increase the cap with the 

proposed auction mechanism. 

The FAA recognizes that both the 

NPRM and SNPRM primarily focused 

on the efficient allocation of slots and 

did not propose to significantly reduce 

delay from levels established under the 

HDR after AIR–21 and the LaGuardia 

Order. Even under Option 1, the level of 

delay mitigation would have been 

minimal, with only 18 slots retired after 

five years. The agency estimated that at 

the end of the scheduled retirements, 

the average minutes of delay would be 

reduced by approximately one minute 

as the result of scheduled retirements. 

The FAA specifically noted in the 

SNPRM that reducing the cap could be 

the best way to address delay 

mitigation. Accordingly, the agency 

specifically requested comment as to 

whether it should reduce the maximum 

number of scheduled operations from 75 

to a lower number. In addition, the 

agency sought comment on whether it 

should maintain a maximum number of 

scheduled operations at 75 per hour but 

increase the number of slots that would 

be retired. Finally, there are a few hours 

where there are slightly fewer than 75 

scheduled operations. The FAA sought 

comment on whether these slots should 

be retired or reallocated via an auction. 

The FAA has decided that the cap at 

LaGuardia is too high and the type of 

reductions anticipated under proposed 

Option 1 were too low, and would be 

achieved over too long a period of time, 

to be meaningful. Prior to the 

implementation of AIR–21, scheduled 

hourly operations at the airport were 

limited by the HDR to 62. While the 

FAA does not believe the delay 

modeling currently justifies a reduction 

to these levels, it does believe the 

modeling justifies a greater reduction 

than proposed in the SNPRM. Based on 

the same modeling technique used to 

determine the appropriate cap at JFK 

and Chicago O’Hare International 

Airport in Schedule Reduction Meetings 

addressing those airports, the FAA has 

determined that the appropriate cap on 

scheduled operations at LaGuardia is 

71. 

In the SNPRM, the FAA proposed to 

randomly select operations in excess of 

75 in those hours where there are more 

than 75 scheduled operations. These 

operations would have been designated 

as Limited Slots and would have been 

retired, so that there are no hours where 

there are more than 75 scheduled 

operations. The FAA has decided there 

is no need to treat these slots differently 

from the other slots that are retired to 

reduce the hourly cap on operations. 

Rather, the impact of reducing the 


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28Cf., DotEcon Ltd., Auctioning Airport Slots—A 

Report for HM Treasury and the Department of the 

Environment, Transport and the Regions, April 

2001; Whalen and Carlton, Economic Analysis 

Group Discussion Paper—Proposal for a MarketBased Solution to Airport Delays, October 2007; 

Brueckner, Slot-Based Approaches to Airport 

Congestion Management, May 2008. 

29The agency anticipates that there may be 

additional slots available for auction because of 

returned or unallocated capacity. 

hourly cap is that, for these two hours, 

five or six slots will be retired rather 

than four. 

5. Market-Based Reallocation of Slots 

As discussed earlier, the FAA 

proposed two separate options for 

reallocating slots at LaGuardia. The 

FAA has decided to adopt a modified 

version of Option 1. The commenters 

have largely combined the two goals of 

this rulemaking, to address congestion 

and to provide for a more equitable and 

efficient allocation of capacity, into a 

single goal. Many commenters, 

including the ATA, United and 

American Airlines, said that it is the cap 

on hourly operations and not auctions 

that will reduce delays at LaGuardia. 

Furthermore, they contended that the 

cap and the auction are distinct 

proposals, with distinct costs and 

benefits; while a cap may reduce delays, 

an auction will merely add costs to 

carriers. 

US Airways claimed that the FAA is 

more interested in experimenting with 

auctions at LaGuardia than improving 

congestion and delays. Similarly, 

American Airlines said that the level of 

competition in the New York market 

appears to be the FAA’s greatest concern 

rather than the amount of congestion. 

According to American Airlines, 

although the New York-area airports are 

some of the most competitive, the 

SNPRM suggests nothing that would 

reduce congestion and delays. 

The ATA claimed that the only 

congestion-related measure included in 

this proposal is the cap on operations, 

which is already in place under the 

LaGuardia Order and the retirement of 

a small number of slots. It also argued 

that the FAA has not articulated how its 

auctions will translate into delay 

mitigation or why the high costs of 

auctions are worth the burden and risk. 

The FAA fully agrees that the 

reallocation method, regardless of what 

it is, will not have a direct impact on 

controlling delays. That type of control 

is achieved by extending the cap beyond 

the LaGuardia Order, which was never 

intended to be anything more than a 

bridge between the HDR and a final 

rule. While some commenters have 

argued that it is unreasonable for the 

FAA to even contemplate a situation in 

which LaGuardia is unconstrained, that 

is exactly the result that the expiration 

of the HDR, without further regulatory 

action, achieves. Because the FAA will 

now be reducing the size of the cap, the 

delay reduction will be even more 

significant. The FAA believes that the 

reallocation mechanism may lead to an 

air transportation system that is more 

efficient for the travelling public, even 

though that mechanism does not reduce 

the number of aircraft flying in and out 

of the airport. It is possible that carriers 

may decide, at least on some routes, to 

increase the size of the aircraft they are 

using. While nothing in today’s rule 

dictates this result, it is certainly at least 

generally foreseeable. 

While most of the carriers were 

categorically opposed to a market-based 

reallocation mechanism, that opposition 

was not universal. The FTC argued in 

favor of an auction mechanism, 

recognizing the value associated with 

providing a carrier with a direct 

financial incentive to maximize the 

value of a slot. 

The FAA has decided to finalize its 

proposal because it believes that a 

market-based mechanism such as an 

auction is the best way to assure that 

this scarce resource is allocated to the 

user who values it the most. As a 

steward of public property, the FAA has 

an obligation to strive toward getting the 

best value for that property. Other 

Federal agencies have used auctions to 

determine who values Federal property 

the highest. In addition, a number of 

papers regarding the societal value of 

allocating slots via an auction have been 

published over the past several years,28

and the FAA finds the arguments made 

in favor of auctions in those papers 

compelling. Simply put, a carrier who is 

required to purchase a slot, will value 

it more highly than a carrier who 

received the slot at no cost. 

Accordingly, the carrier will ensure the 

slot’s best economic use, i.e., putting it 

to the use valued most highly by the 

traveling public. If the carrier cannot 

profitably use the slot, it will 

presumably sublease the slot to another 

carrier who can maximize its efficient 

use. In addition, a carrier wishing to 

gain a presence at an airport can 

purchase the lease from the government 

directly rather than attempting to obtain 

slots solely from its competitors, 

increasing competition at the airport. 

The value associated with allocating a 

scarce government resource via an 

auction was also recognized by Congress 

in the telecommunications context 

when it passed the Licensing 

Improvement Act of 1993. In the 

section-by-section analysis of the 

statute, the committee report 

specifically references promotion of 

efficient and intensive use of the 

electromagnetic spectrum as one of the 

objectives the committee believed the 

new legislation would achieve. 1993 

USCCAN at 580. 

As noted earlier, the agency’s own 

experiences with slot-controlled airports 

under the HDR are consistent with the 

observations made in the literature. 

Under the Buy/Sell Rule, carriers 

wishing to enter the market complained 

they were unable to gain market-share, 

and the underutilization of those slots 

allocated to the carriers at no cost forced 

the agency to impose a usage 

requirement. 

The auction process contemplated by 

today’s rule will guarantee carriers 

wishing to initiate or extend operations 

at the airport an opportunity to acquire 

slots. In January 2009 there will be at 

least 24 slots available in the auction. In 

the following four years there will be at 

least 22 slots available.29 Since carriers 

need pairs of slots, this is equivalent to 

11 to 12 round-trips per day. Assuming 

a minimum competitive pattern of 

service is between two and three roundtrips per day, the equivalent of four to 

five routes would be available per year. 

Carriers would be free to supplement 

their holdings in the secondary market, 

which the agency believes will be 

stimulated by this rule. 

The FAA intends to auction off 20 

percent of the Limited Slots that are not 

retired annually. Any carrier may bid on 

the slot, and it will be awarded to the 

highest responsive bidder. The winning 

parties may commence operations using 

the newly acquired slots on the second 

Sunday of the following March. In the 

unlikely event no bids are received, the 

FAA will retire the slot until the next 

auction. Allowing the carrier holding 

the Limited Slot to retain it, as 

suggested by some commenters, could 

encourage the carrier to simply not bid 

on the slot. The FAA will retain all 

auction proceeds. After recouping its 

costs, the FAA intends to spend the 

remainder of the proceeds on congestion 

and delay management initiatives in the 

New York City area. The FAA has 

already established a receipt account for 

these proceeds. 

The FAA will not reallocate slots after 

the first five years (other than those 

returned under the rule’s use-or-lose 

provisions) because it believes that 

ideally slots should transfer from one 

carrier to another through the secondary 

market. The FAA has decided to be 

involved in a limited number of slot 

transactions during the first five years of 

the rule to help establish that market. 


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30 If any slots were not bid on in the final year 

of the annual auction, the FAA would retire those 

slots until it reallocated new or returned capacity. 

The agency does not yet know if enough new or 

returned capacity would be available to justify an 

annual reallocation. 

Not only will the auctions help create a 

market for slots, but all carriers will be 

able to assess the true market value of 

a slot. Armed with information on how 

much a given slot is likely to be worth 

on the open market, carriers (and their 

shareholders) will be in a better position 

to determine whether to continue 

operating marginally-performing flights 

or to sublease the corresponding slot. 

The FAA believes that merely relying 

on the secondary market to accurately 

establish the value of slots, as some 

commenters have suggested, is 

problematic. A fundamental problem 

with the secondary market cannot be 

addressed without first addressing the 

primary market. Incumbents have 

significant incentives not to sell or lease 

out slots to airlines that will compete 

with their networks to a substantial 

degree. Thus, incumbents rationally 

foreclose entry both to other incumbents 

and to new entrants. One of our 

objectives in this rule is to change those 

incentives and reduce the likelihood 

that incumbents can foreclose entry and 

potential competition indefinitely. 

In addition, in the secondary market 

a carrier may rely on tangible assets that 

do not have the same monetary value for 

all carriers or even non-tangible assets, 

such as goodwill or a pre-existing 

relationship, when evaluating whether 

to lease a slot. Thus, while the slot may 

have a real value for the carriers 

engaged in the negotiations, that value 

cannot be translated into a ‘‘fair market 

value’’ that can be relied on throughout 

the industry as a reasonable valuation of 

the slot. The agency believes that it 

should not take more than five years for 

a robust secondary market to develop. 

Given the physical constraints at the 

airport and the carriers’ ability to 

sublease slots if the operations 

associated with the slots are not 

financially productive, the FAA 

anticipates that there will be little new 

or returned capacity for most of the time 

the rule is in effect. With the advent of 

NextGen technology, there may be new 

capacity in the later years of the rule. To 

the extent there is any new or returned 

capacity, the FAA intends to auction off 

that capacity, and will categorize the 

slots as Unrestricted Slots.30

a. Network Effects of Auctions 

The potential for auctions to have 

adverse network effects was a concern 

for many stakeholders. The Federal 

Trade Commission noted that network 

effects are likely to be complex since the 

worth of one particular flight is 

dependent on other flights. Accordingly, 

the Federal Trade Commission 

cautioned that auctions at LaGuardia 

might not lead to an efficient outcome. 

US Airways noted that the network 

and route systems of airlines required 

substantial investments and many years 

to build. Carriers rely on routes from 

smaller cities to provide passengers to 

their hubs at airports such as LaGuardia. 

This structure, according to US 

Airways, is at risk should the FAA 

complete its rulemaking as proposed in 

the SNPRM. US Airways also objected 

to the possibility that a carrier could 

lose slots that are important feeder 

flights into its hub at LaGuardia. 

Furthermore, according to US Airways, 

the loss of just a few passengers could 

jeopardize service to some smaller 

markets. 

United Airlines commented that slots 

are essential to allow airlines to provide 

flights between LaGuardia and other 

cities and the carrier may even be forced 

to discontinue service to some 

communities because of the loss of slots. 

The ATA added that some carriers have 

made large investments in their 

schedules with the expectation that they 

will be able to continue serving 

LaGuardia and that these schedules will 

compliment their other daily operations. 

The FAA recognizes that any 

reallocation of slots through an auction, 

or any other allocation mechanism, can 

affect the network structure of an 

airline. We are also aware that several 

carriers at the airport have made 

investments in the infrastructure at 

LaGuardia based on their previous slot 

holdings under the HDR. However, 

when Congress phased out the HDR as 

part of AIR–21, it was clear to all 

stakeholders that slots and slot 

allocations under that rule would no 

longer exist as of January 2007. 

In an effort to ensure a smooth 

transition between the expiration of the 

HDR and a new allocative regime, the 

FAA grandfathered use of all slots to 

carriers on a temporary basis. This final 

rule will continue to allocate a majority 

of slots to the incumbent slot holders. 

To the extent that a carrier’s Limited 

Slot reverts to the FAA, there is nothing 

in this rule that precludes that carrier 

from bidding in the auctions to acquire 

the same or a comparable slot for the 

purpose of maintaining the status quo. 

Similarly, we believe the rule will 

promote a robust secondary market, 

which will provide further opportunity 

for carriers to acquire slots to satisfy 

their network needs. 

b. Impact of Auctions on Competition 

The SNPRM assumed that auctions 

will lead to efficient airline behavior. 

The Port Authority opinion differs. The 

Port Authority commented that auctions 

may exacerbate anti-competitive 

conditions, which would lead to 

reduced opportunities for new entrant 

and limited incumbent airlines to enter 

the airport. They claimed that the large 

incumbent carriers with the majority of 

slots at LaGuardia could use their 

relatively stronger balance sheets to 

outbid the smaller, non-legacy airlines 

that help stimulate competition. The Air 

Carrier Association of America’s 

(ACAA) comments echo this concern. 

According to the Port Authority and 

the ACAA, the SNPRM provides the 

legacy incumbent carriers the incentive 

to bid prices beyond the level carriers 

with a limited presence at the airport 

can afford, then trade the slots they win 

among themselves to maintain their 

current schedules. The result could be 

a significant increase in airfares and a 

decrease in the number of destinations 

served. 

Offering a different view, US Airways 

commented that there is already 

significant competition at LaGuardia, 

and new entrants have more the 50 

daily roundtrips from this airport. US 

Airways also suggested that competition 

from new entrants at LaGuardia has 

helped moderate fares for the New York 

City region. It also asserted that there is 

no evidence that new entrants cannot 

enter the market, or that the reallocation 

proposal would address that concern 

even if it were valid. 

Unlike most of the commenters, the 

ACAA was not opposed to the 

consideration of auctions. However, it 

believes that too many questions exist 

about auctions as a method to promote 

competition for this proposal to move 

forward. The ACAA was primarily 

concerned with providing low-cost 

carriers access to entry in LaGuardia, 

particularly now that all three of the 

major New York metro airports are 

capped. 

US Airways argued that the 20-slot 

base of operations is clearly designed to 

protect new entrant carriers at the 

expense of other carriers and ignores the 

fact that these new entrants already 

have a significant presence both at 

LaGuardia and in the New York 

metropolitan area as a whole. The FAA 

notes that the base of operations was 

intentionally designed to promote at 

least some competition at the airport by 

ensuring limited incumbents retain the 

opportunity to serve the airport. 

However, this degree of competition, 

when viewed in the context of the total 


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number of operations at the airport, 

negatively impacts no one. Thus, the 

FAA finds US Airways’ argument that 

the 20-slot base of operations is 

detrimental to carriers who have a larger 

presence at the airport is disingenuous. 

All carriers, regardless of the size of 

their operations at the airport, are 

entitled to the base of operations. For 

slots above this level, Limited Slots are 

assigned on a proportional basis, so that 

larger carriers will have more Limited 

Slots only because they will be 

grandfathered a greater number of total 

slots at the airport. In addition, while 

the base of operations provision protects 

up to 20 slots per carrier, it does not 

allow a carrier with fewer than 20 

operations to increase their holdings 

unless they are willing to lease them 

from another carrier or participate in an 

auction. 

The FAA disagrees with the assertion 

that the limited number of auctions 

contemplated in this rule will reduce 

competition at the airport. The HDR, in 

place at LaGuardia airport for decades, 

was criticized for not providing 

sufficient opportunity for new entrant or 

limited incumbent carriers to enter or 

expand service at the airport. We 

believe there is merit to these criticisms. 

To encourage greater competition and 

expand opportunities for entry at the 

airport, the FAA intends to reallocate by 

auction a portion of existing slots from 

those carriers who held the majority of 

slots under the HDR. The auction is 

designed to provide greater competition 

at the airport because it uses the market 

to reallocate limited resources to those 

who value the asset most. 

We understand the concerns of some 

persons that carriers may attempt to use 

Unrestricted Slots which are not subject 

to a usage requirement to monopolize 

operations at an airport. The 

Department has the authority to ensure 

that carriers do not use their ability to 

permit such slots to remain idle to 

unlawfully restrict competition. The 

Department’s mandate under 49 U.S.C. 

41712 to prohibit unfair methods of 

competition authorizes it to stop carriers 

from engaging in conduct that can be 

characterized as anticompetitive under 

antitrust principles. If the Department is 

presented with clear and convincing 

evidence that a carrier is hoarding slots 

to monopolize operations at an airport 

it will pursue enforcement action 

against the carrier. 

c. Alternatives to Reallocation 

The Port Authority commented that a 

notice of proposed rulemaking that 

solicits comment on a single solution 

when other significant solutions have 

been recently proposed is inherently 

flawed. It noted the NYARC, through 

working group 5, evaluated the use of 

the IATA Worldwide Scheduling 

Guidelines (WSG) but that approach 

was not even referred to in the SNPRM, 

despite near unanimous support among 

NYARC members for that alternative. 

American Airlines similarly suggested 

the FAA adopt the WSG under a slot 

rule addressing all three New York 

metropolitan airports rather than relying 

on auctions to reallocate capacity. Delta 

also suggested that the FAA take steps 

to improve the secondary market in 

conjunction with the existing Order 

before adopting a final rule based on the 

SNPRM. Echoing Delta’s sentiment, U.S. 

Airways suggested the buy/sell 

mechanisms implemented under the 

HDR could be improved or modified to 

address concerns about competition. 

Many stakeholders said that the FAA 

should use other approaches instead of 

auctions to reduce delays at LaGuardia. 

In particular, the FAA should focus on 

implementing operational procedures 

and investments to enhance capacity. 

The American Association of Airport 

Executives said that the FAA should 

proceed with implementing ADS–B and 

other air traffic control technologies. 

The Regional Airline Association said 

that rather than auctioning slots, the 

FAA should focus on completing 

NextGen. Similarly, the ATA suggests 

that the FAA continue to implement the 

77 New York Aviation Rulemaking 

Committee improvements and continue 

implementing NextGen. 

Delta suggested several alternatives to 

addressing a perceived inability to 

access the market. Even though it did 

not support any of the alternatives, it 

suggested they were both legal and less 

disruptive than the proposal. While 

some of the ideas associated with 

improving the transparency of the 

secondary market have already been 

proposed by the FAA and are 

incorporated in today’s rule, Delta also 

suggested that all transactions in the 

secondary market could be negotiated 

via an FAA-managed auction or that a 

carrier be required to place a set number 

of slots up for auction, but be allowed 

to set a reserve price. The ATA 

suggested the agency adopt a slightly 

modified version of the existing Order 

and have the FAA act as a clearinghouse for the secondary market, but 

impose no constraints on the 

transactions. 

The ACAA argued that some 

reallocation mechanism other than an 

auction should be provided since all 

three major New York metropolitan area 

airports are capped. It noted that there 

should be some slots available to 

limited incumbents because the larger 

carriers are drawing down service and 

exploring merger possibilities. The FAA 

has historically provided for the 

administrative allocation of slots. We 

could have proposed such an approach 

in this rulemaking. However, the 

auction allows the market to allocate 

resources, which is the standard way 

virtually all resources are allocated in 

the U.S. economy. 

The WSG approach has never been 

used at a domestic airport like 

LaGuardia. While the FAA could adopt 

a domestic equivalent of the WSG, the 

FAA has decided against this approach 

because, like the lottery provisions of 

the HDR, it does not provide for a 

sufficient amount of capacity available 

for reallocation to stimulate the 

secondary market. The ATA is correct 

that of the many members of the ARC 

working group, five supported using the 

WSG at LaGuardia. However, several 

carriers not on the working group were 

opposed to that approach and some of 

their concerns are included in the 

NYARC report. 

As to the suggestion that the FAA 

focus on the various technological and 

physical improvements identified by the 

NYARC, many of these initiatives are 

already underway. However, we do not 

believe that they will address the 

congestion issues at LaGuardia 

sufficiently to merit lifting the cap on 

operations. It is the cap that creates the 

need for reallocation. 

Finally, as to the suggestions that the 

FAA leave the LaGuardia Order in place 

but make improvements to the 

secondary market, the FAA has already 

implemented several changes to the 

existing provisions controlling the 

secondary market in this rule. 

B. Secondary Trading 

All slots will have value in the 

secondary market. To the extent that the 

secondary market is not mature and the 

value of slots is not well-known, the 

auction should inform potential buyers 

of the value of these slots and stimulate 

the secondary market. The FAA believes 

that ultimately the best way to 

maximize competition is with the 

development of a robust secondary 

market. To that end, the agency did not 

propose a system of set-asides and 

exemptions that would be available to 

new entrants and limited incumbents. 

We believe some measures must be 

taken to assure access to the secondary 

market. The system of preferences and 

exemptions developed under the HDR 

and AIR–21 may have significantly 

diluted the viability of the secondary 

market ostensibly created under the 

HDR’s Buy/Sell Rule as several 

commenters claim, but we do not 


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31See United Airlines, Inc. v. Civil Aeronautics 

Board, 766 F. 2d 1107, 1112, 1114 (7th Cir. 1985) 

and cases cited therein; see also H.R. Rep. No. 98– 

793, 98th Cong., 2d Sess. (1984) at 4–5, Order 2002– 

9–2, Complaint of the American Society of Travel 

Agents, Inc., and Joseph Galloway against United 

Air Lines, Inc, et al. (Docket No. OST–99–6410) and 

Complaint of The American Society of Travel 

Agents, Inc., and Hillside Travel, Inc. against Delta 

Air Lines, et al. (Docket No. OST–02–12004) 

(September 4, 2002) at 22–23. 

believe that was the sole culprit. The 

Buy/Sell Rule permitted transactions 

that were never advertised and the 

terms of which were never monitored 

for anti-competitive behavior. 

We believe all carriers interested in 

initiating operations at LaGuardia, or 

increasing their operations there, should 

have an opportunity to participate in 

any transactions. Accordingly, the FAA 

will permit carriers to include Common 

Slots for sale in the auction organized 

by the FAA. If a carrier wishes to 

include some of its Common Slots in the 

auction, these slots will be treated in the 

same manner as other slots being 

auctioned by the FAA. The carrier 

would be able to specify a minimum 

price for these slots so that it need not 

give up the slots unless they command 

a price that the carrier is willing to 

accept and it would retain the proceeds. 

In addition, the FAA will establish a 

bulletin-board system whereby carriers 

seeking to sublet slots outside the 

auction process, or to acquire such 

subleases, would notify the FAA, which 

would then post the relevant 

information on its Web site. The FAA 

has decided that transactions via the 

bulletin-board-system do not have to be 

blind, and the transaction may include 

both cash and non-cash payments. 

The ACAA commented that any 

mechanisms geared toward a secondary 

market must include a blind sale/ 

transfer allocation system for any 

proposed sale or lease of slots. Other 

carriers, including U.S. Airways and 

American Airlines, noted that the 

secondary market should be as 

transparent as possible since even a 

hybrid system, whereby the lessor 

would accept the highest cash bid and 

then negotiate the value of nonmonetary assets after the bid was 

accepted, would close interested lessees 

out of the transaction. 

We continue to have reservations 

about the adequacy of the value 

associated with non-monetary assets 

when the leasing carrier is not a direct 

competitor versus when the potential 

lessee competes directly against the 

carrier offering to lease the slot. 

However we also believe non-cash 

transactions should result in both more 

bidders and potentially higher bids. 

Since the non-cash aspect of a 

transaction would require direct 

negotiating, parties would need to be 

disclosed. 

In order to preclude the type of 

collusion that appears to have been 

present, at least some of the time, under 

the Buy/Sell Rule, the Department will 

monitor trades on the secondary market. 

The Department already has the 

authority under 49 U.S.C. 41712 to 

investigate, prohibit, and impose 

penalties on an air carrier for an unfair 

or deceptive practice or an unfair 

method of competition in air 

transportation or the sale of air 

transportation. The Department has 

consistently held that this authority 

empowers it to prohibit anticompetitive 

conduct (1) that violates the antitrust 

laws, (2) that is not yet serious enough 

to violate the antitrust laws but may do 

so in the future, or (3) that, although not 

a violation of the letter of the antitrust 

laws, is close to a violation or contrary 

to their spirit.31

Today’s rule requires carriers to file 

with the Department a detailed 

breakdown of all lease terms and asset 

transfers for each transaction, and the 

subletting carrier must disclose all bids 

submitted in response to its solicitation. 

The requirement is needed so that the 

Department can adequately monitor the 

secondary market. The slot may not be 

operated by the acquiring carrier until 

all documentation has been received, 

and the FAA has approved the transfer. 

The approval process is required to 

assure the FAA has up-to-date 

information on who is operating the 

flight. The FAA will not limit its 

approval based on any substantive 

provisions in the document. Although 

the ATA claimed the provisions 

governing the secondary market are 

unduly intrusive and chilling, the FAA 

believes that even in a robust market it 

needs to track and provide oversight of 

the market. This oversight will ensure 

access remains available to all interested 

parties and the slots are actually being 

used in the manner represented to the 

FAA. Since Common and Limited Slots 

may be transferred in the secondary 

market, the underlying policy 

considerations supporting the FAA’s 

decision to award them under a 

cooperative agreement rather than for 

monetary consideration remain, even if 

the operating carrier has changed. 

Trades among marketing carriers and 

one-for-one trades do not have to be 

advertised. Marketing carriers should 

not have to open up transactions to the 

carrier community as a whole any more 

than a single carrier should have to 

disclose its scheduling decisions with 

other carriers. The FAA will approve 

these transactions, as it has done 

historically. As is the case with longerterm transfers among different carriers, 

the FAA only approves the transaction 

to maintain accurate information on 

which carrier is operating a particular 

slot. 

Same day trades among marketing 

carriers that address emergency 

situations such as maintenance 

problems or other unforeseen 

operational issues may take place 

without prior approval by the FAA, but 

carriers must notify the FAA of the trade 

within five business days. One-for-one 

trades among carriers will not be subject 

to the restrictions of the secondary 

market because they enhance the 

operational efficiency of the airport. 

However, the exchange of slots on a 

one-for-one basis cannot be for 

consideration, since they would then 

take on the characteristics of lease 

agreements negotiated in the secondary 

market. Nonetheless, carriers must 

notify the FAA of all such trades so that 

the agency can maintain accurate 

information on which carrier is 

operating a particular slot. 

C. Usage Requirements 

The FAA is adopting the usage 

requirements proposed in the SNPRM. 

Specifically, Common and Limited Slots 

must be used 80 percent of the time over 

a two-month reporting period unless the 

FAA waives the usage requirements due 

to unusual and unforeseeable 

circumstances beyond the carrier’s 

control. The impact of these events must 

extend beyond five consecutive days. 

Unrestricted Slots will not be subject to 

the usage requirements. 

Under this rule each slot will be 

assigned a corresponding scheduled 

operation. Carriers will be required to 

report a series of flights under a single 

slot number rather than in the aggregate. 

In this way the FAA will be able to more 

accurately track a slot’s usage with the 

flight it was scheduled against. Carriers 

will be permitted to operate a charter, 

maintenance, or ferry operation in lieu 

of a scheduled operation and not have 

that operation discounted as long as 

they do not abuse the privilege. 

Several commenters, including the 

ATA and the Port Authority, noted that 

the proposal to exclude Unrestricted 

Slots from the usage requirement is 

inconsistent with the current practice of 

requiring all slots, even those purchased 

in the secondary market, to be subject to 

the use-or-lose requirements. These 

commenters suggested that all slots 

should be subject to usage requirements. 

The Port Authority added that given 

current market conditions of higher 

fares, driven by higher fuel costs, there 

is a possibility that the auction bid 


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32Unrestricted Slots could potentially have a 

higher value in the secondary market than Common 

or Limited Slots because they are not subject to the 

same restrictions. 

33On July 3, 2008, the FAA denied a request 

submitted by six air carriers, seeking a waiver of the 

minimum usage requirements at all U.S. airports 

that have such requirements as a result of rapidly 

escalating fuel prices. The FAA’s denial of the air 

carrier’s request is available in docket FAA–2008– 

0656. In addition, on August 6, 2008, the FAA 

denied a separate request by AirTran Airways for 

a temporary waiver of the minimum usage 

requirement at LaGuardia based on the 

construction-related closure of a jetway that was 

dedicated to AirTran’s operations. 

prices may be sufficiently low to cause 

a large incumbent carrier to make low 

bids for various slots, and then simply 

not use them as a means of blocking 

future competition after markets 

improve from the current depressed 

condition. 

We understand the concerns of some 

persons that carriers may attempt to use 

Unrestricted Slots which are not subject 

to a usage requirement to monopolize 

operations at an airport. We do not 

believe this risk is sufficiently large to 

attach a usage requirement on 

Unrestricted Slots. One hundred percent 

of the slots allocated under the HDR and 

then converted into Operating 

Authorizations under the LaGuardia 

Order were initially allocated by the 

FAA at no cost to the carrier. Because 

the slots were free, carriers were 

incentivized to hoard slots in order to 

keep competitors out, and the FAA was 

forced to implement a usage 

requirement. Since the FAA wishes to 

introduce a market-based means of 

addressing slot allocation, both initially 

and in the secondary market, the agency 

believes the Unrestricted Slot should be 

just that—unrestricted. The FAA does 

not believe there is a need to treat all 

slots equally when they are not all 

allocated under the same terms and 

conditions.32

The Department has the authority to 

ensure that carriers do not use their 

ability to permit such slots to remain 

idle to unlawfully restrict competition. 

The Department’s mandate under 49 

U.S.C. 41712 to prohibit unfair methods 

of competition authorizes it to stop 

carriers from engaging in conduct that 

can be characterized as anticompetitive 

under antitrust principles. If the 

Department is presented with clear and 

convincing evidence that a carrier is 

hoarding slots to monopolize operations 

at an airport it will pursue enforcement 

action against the carrier. In order to 

assist the Department in determining 

whether a carrier is engaging in 

anticompetitive behavior, we are 

expanding the requirement in the 

regulatory text to report usage to include 

Unrestricted Slots as well as Common 

and Limited Slots. While a carrier 

would not risk losing an Unrestricted 

Slot for failure to report, the FAA could 

take civil enforcement action consistent 

with its authority to take enforcement 

action for any violation of a regulatory 

requirement. 

The Port Authority continues to 

argue, without support, that the usage 

requirement should be higher than 80 

percent. It commented to the SNPRM 

that it has an interest in maximizing use 

of its runways. Although it is not 

reasonable to expect 100 percent 

utilization, the Port Authority believes 

that a 90 percent utilization standard, 

applied against aggregate slot use would 

assure five-day-per-week use of slots. 

The Port Authority also proposed that 

the FAA report data on slot usage at 

least at the aggregate level. It stated it 

could use these data to evaluate the 

relationship of slot usage and the FAA’s 

exercise of authority to enforce the useor-lose provisions. We have not seen a 

need to increase the usage requirement 

beyond 80 percent. The waiver 

provisions of this rule are quite limited. 

In addition, the agency has recently 

demonstrated that it intends to apply 

these provisions narrowly.33 The usage 

requirement is designed to address 

legitimate problems that arise in the 

regular course of business and includes 

flight cancellations due to maintenance 

problems, poor weather, or missed 

connections. Given the likelihood that 

the FAA will not grant a waiver request 

except under exceptionally tight 

conditions, a carrier has every incentive 

to use the slot as much as possible to 

preserve a cushion for the types of 

problems it can reasonably expect to 

encounter. We acknowledge the Port 

Authority’s request to see usage data, 

but that request does not fall within the 

ambit of this rulemaking. 

Finally, in the SNPRM, the FAA 

proposed to provide for a 90 day waiver 

of the usage requirement for common 

and limited slots acquired by sublease. 

We have subsequently determined that 

there is no need for such a provision. 

The starting date of a sublease is fully 

within the control of the contracting 

carriers and can be easily negotiated to 

address any possible concerns related to 

starting new service. 

D. Unscheduled Operations 

As proposed in the SNPRM, the FAA 

is limiting unscheduled operations into 

and out of LaGuardia during the 

constrained hours. Historically these 

operations have been restricted via the 

LaGuardia Order to six per hour, but the 

FAA has recently reduced that number 

to three under the LaGuardia Order. 

Under today’s rule, reservations are 

required to use the airport (except for 

emergency operations) and may be 

obtained up to 72 hours in advance. The 

reservations will be available on an 

hourly, rather than half-hourly, basis. 

This will provide additional flexibility 

with minimal operational impacts 

overall. 

To the extent Air Traffic Control 

(ATC) can handle additional requests 

(for example in good weather), it will do 

so without regard to the reason for the 

request. In addition, ATC may decide 

special circumstances justify an 

additional flight. However, there is no 

guarantee that the FAA will accept more 

than three reservations per hour, and 

the determination to handle more traffic 

would likely be made on that day. 

Reservations for all non-emergency 

flights would still be required. The FAA 

will allow public charter operators to 

reserve one of the three available 

allowable operations up to six months 

in advance. If more than one public 

charter operation is desired for a given 

hour, the public charter operator 

without the advance reservation could 

attempt to secure a reservation within 

the three-day window that is available 

for all other unscheduled operations. 

The Aircraft Owners and Pilots 

Association (AOPA), NetJets and the 

National Air Transportation Association 

(NATA) commented that the number of 

unscheduled arrivals is overly 

restrictive. According to AOPA, 

although general aviation is less than 

four percent of total operations at 

LaGuardia, the number of unscheduled 

arrivals is reduced by fifty percent. 

Similarly, NetJets suggested that 

although general aviation makes a 

negligible contribution to congestion in 

the New York area, the SNPRM has a 

disproportionate impact on general 

aviation compared with scheduled 

carriers. It also asserts that the FAA has 

not linked the reduction in permitted 

operations with any delay reduction 

benefit nor evaluated the potential cost 

impact on affected businesses. These 

commenters do not believe an objective 

analysis of the historical usage rate for 

unscheduled operations has been 

provided to justify the proposed 

decrease and therefore, the FAA may 

have underestimated the negative effect 

of a 50 percent reduction in 

unscheduled operations. The Port 

Authority claimed the FAA did not look 

at the proposed reduction in 

unscheduled services at LaGuardia in 

light of similar restrictions at JFK and 

Newark Airports. 

Contrary to the Port Authority’s 

assertion, the proposal to reduce 


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34 73 FR 41156 (July 17, 2008). 

unscheduled operations at LaGuardia 

was generated by the agency’s concern 

on managing operations within the 

region. Consistent with this action, the 

FAA proposed limits for unscheduled 

operations at JFK and Newark.34 At 

these airports, the FAA proposed 

reductions in the number of 

unscheduled operations in the most 

congested hours. The FAA finds it 

reasonable to limit unscheduled 

operations at LaGuardia to their 2007 

usage levels. In the New York area, the 

FAA must balance fair and reasonable 

access against congestion reduction and 

management goals. To reach these goals, 

the number of unscheduled operations 

cannot grow at LaGuardia, JFK or 

Newark. While permissible 

unscheduled operations at the airport 

are reduced by 50 percent, actual 

operations are reduced little, if at all. 

In addition, NATA objected to the 

proposal to allow public charter carriers 

to reserve one of the three available 

hourly slots up to six months in 

advance, while Part 135 on-demand air 

carriers will only be able to reserve slots 

up to 72 hours in advance. NATA 

believes that passengers on Part 135 ondemand aircraft should have the same 

ability to pre-plan their arrival and 

departure times as passengers on 

scheduled airlines and public charters. 

The FAA does not believe that public 

charter operators and on demand 

charter operators should be treated 

similarly. Unlike on demand charters, 

public charters may not be marketed 

until prospectuses are filed with the 

Department and they are marketed to 

individual consumers long in advance 

of the dates of operation. Public charters 

are also generally limited to operating 

from larger airports. Thus, in the New 

York area, public charters cannot be 

operated from many of the local 

airports, such as Teterboro, that are 

available to on demand charter flights. 

For these reasons, we believe public 

charter operators should have a 

significantly earlier opportunity to 

obtain slots for their operations under 

this rule than on demand charters. 

Additionally, unscheduled flights 

produce roughly the same delay costs as 

scheduled flights at the same time. 

However, unscheduled flights can be 

accommodated if operators are flexible 

in their arrival or departure times. In 

response to public comment we have 

assessed the impact on business if 

unscheduled flights are restricted based 

upon the FAA’s record of actual 

operations in the agency’s Enhanced 

Traffic Management System for year 

ended May 31, 2008. The total number 

of hours where unscheduled operations 

exceed available slots was 174. The 

number of hours where there was 

insufficient capacity in the adjacent two 

hours to handle excess demand was 

zero. Thus, if an unscheduled flight 

changes its flight plan slightly, it will be 

accommodated and this operator would 

not incur costs. 

The ATA commented that helicopters 

should be subject to this proposal 

because they also take up valuable air 

traffic control services. The FAA 

recognizes that helicopter operations 

can add to a controller’s workload. 

However, because the FAA did not 

propose, or even suggest, that 

helicopters would be covered by this 

rule, there would have been no reason 

for helicopter operators to comment on 

the rule and there is inadequate scope 

to add them at this time. 

E. Sunset Provision 

This rule will expire in ten years. One 

of the criticisms of the HDR was that it 

was a temporary rule that has lasted 

almost 40 years. As such, it became 

difficult to manage, particularly as it 

was amended to address changes in 

business models. We believe the public 

interest is better served by directly 

providing the rule will sunset in ten 

years. This approach will allow for 

future determinations by the FAA as to 

whether a cap is still needed and, if so, 

whether changes are needed to more 

efficiently allocate and constrain the 

scarce resource. At present it is 

impossible to determine what changes 

in business models may occur over the 

next ten years. In addition, full 

implementation of the New York/New 

Jersey/Philadelphia Metropolitan Area 

Airspace Redesign project and NextGen 

technologies are expected to mitigate 

and improve air traffic efficiency within 

the next ten years, and we should not 

prejudge the market response. 

The ATA questioned why this rule is 

implemented on a temporary basis if the 

agency believes it represents the best 

solution for the airport. Additionally, 

several commenters noted that 

temporary slot lives reduce the value of 

slots. They argued the short-term nature 

of the proposal and the uncertainty of 

future slot operations at LaGuardia 

would have a chilling effect on the 

value given to slots and gates in relation 

to capital flow and collateralization. 

Several carriers were concerned that 

financial institutions would lose 

confidence in slots as collateral and 

reduce or eliminate a carrier’s ability to 

fully collateralize the asset. 

The FAA is somewhat puzzled by the 

carriers’ assertion that having the rule 

sunset in ten years is somehow more 

detrimental to their interests than 

keeping in place an order whose 

expiration date is linked to a final rule 

that could be issued at any time. The 

FAA believes providing a date certain 

through which slots will be awarded 

actually increases the certainty of the 

holding. The assumption seems to be 

that regulatory inactivity is the solution 

to all the carriers’ concerns, and that 

therefore, the FAA should just maintain 

the LaGuardia Order status quo. This is 

not an acceptable solution. The 

LaGuardia Order was issued as a bridge 

document and was never intended to 

stay in place for more than a year or 

two. Accordingly, the FAA simply froze 

all operations at the airport under the 

HDR conditions, except that the carriers 

are precluded from selling their 

Operating Authorizations. The Order 

was not subjected to the type of policy 

rigor or economic analysis that justifies 

any rule intended to be more than an 

initial measure. In addition, the FAA 

believes it is important for carriers and 

those who provide financing to realize 

that slots at a constrained airport are not 

intended to be a permanent response to 

solving congestion, with the incumbents 

being afforded unlimited rights. 

F. Other Issues 

1. Withdrawal for Operational Need and 

for Future Reductions in the Cap 

The FAA is adopting its proposal to 

retain the right to temporarily withdraw 

Limited and Common Slots for 

operational need. The FAA has 

historically retained this right, although 

it has rarely, if ever, been exercised. 

This provision is included to allow the 

FAA to immediately address a situation 

where it cannot handle the usual 

amount of traffic on a temporary basis. 

This provision would typically be 

invoked because of problems with the 

landside infrastructure, such as a closed 

runway or terminal, or changes to air 

traffic control procedures that would 

result in sustained capacity reductions. 

As discussed earlier, the FAA is also 

retaining the right to further reduce the 

cap on operations should the 

Administrator determine that the cap on 

operations remains too high. For the 

reasons discussed earlier, this provision 

is limited to Common Slots. 

2. Limit on Arrivals and Departures 

In response to the NPRM, American 

Airlines and The City of New York 

suggested the final rule should regulate 

arrivals only. The FAA explained in the 

SNPRM why it continues to believe that 

the sequencing of flights at LaGuardia is 

so tight that the FAA does not believe 

it can merely limit arrivals. American 


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Airlines continues to assert that only 

constraints on arrivals are needed. 

Nevertheless, the FAA continues to 

believe both arrivals and departures 

should be slot-controlled. 

3. Common Ownership 

The proposal defines ‘‘common 

ownership’’ as requiring at least 50 

percent beneficial ownership or control 

by the same entity or entities. ATA 

commented that this definition would 

not cover many of the network carriers’ 

regional partners as very few have at 

least a 50 percent beneficial ownership 

or control of these independent 

companies. The FAA will treat 

commonly owned carriers as single 

entities for determining a carrier’s base 

of operations or whether transfers are 

appropriate. Independent carriers, such 

as those cited by the ATA, will each be 

entitled to a base of operations of up to 

20 slots regardless of whether they offer 

services under their own names or 

under a code-share agreement with 

another carrier. Transfer provisions 

between commonly owned and 

affiliated carriers receive similar 

treatment. 

4. Impact of the Final Rule on the Port 

Authority’s Ability To Run Its Airport 

The ACI–NA and the Port Authority 

both claim that the proposal to auction 

slots interferes with the Port Authority’s 

ability to run the airport and constitutes 

an impermissible infringement on the 

Port Authority’s right to collect revenue 

for use of the airport facilities. The ACI– 

NA believes that market-based access 

issues should remain within the 

exclusive purview of the airport’s 

proprietor. The Port Authority 

expressed similar sentiments in its 

comments to the NPRM suggesting it 

develop a method of allocation at the 

airport. 

The FAA has never proposed to deny 

carriers gate access at LaGuardia, nor 

has it proposed to otherwise address 

issues associated with the facilities at 

the airport. The FAA recognizes that the 

Port Authority bears responsibility for 

the terminal-side portion of the airport. 

However, it is the FAA, and not the Port 

Authority, that has responsibility for 

managing the airspace. While the Port 

Authority claims that slot auctions 

would somehow be disruptive to the 

airport, it fails to explain how, in terms 

of making arrangements for gates and 

other airport facilities, acquiring a slot 

via an auction is any different from 

acquiring a slot via the secondary 

market, or for that matter, via a lottery, 

as was the case under the HDR. 

To the extent public policy goals 

could arguably be better achieved by an 

airport proprietor rather than the FAA, 

the agency notes that this rule provides 

for no special carve-outs. To the extent 

an airport could address these policy 

issues through a market-based, or even 

administratively-based mechanism, it is 

free to do so consistent with its grant 

obligations and any other restrictions 

imposed by Federal law. 

V. Potential Loss of Service to Small 

Communities 

Several stakeholders were concerned 

about the adverse effects of this SNPRM 

on service to small communities. The 

ATA noted that at least one destination 

is served by Essential Air Service (EAS) 

from LaGuardia. The one EAS 

community currently with service to 

LaGuardia (Lebanon, New Hampshire) 

will receive service to a new hub airport 

in another city as of November 4, 2008. 

Several carriers, their associations and 

ACI–NA commented that if carriers 

prioritize which service to continue, it 

is likely that carriers will continue the 

most profitable routes, the dense routes 

connecting to large markets, and drop 

service to smaller markets. Commenters 

argued that both the provision that 

Limited Slots revert to the FAA and the 

market-based allocation of Unrestricted 

Slots would result in a loss of small 

community service. 

United noted that the ‘‘confiscation’’ 

of slots would lead to carriers 

eliminating flights, most likely to 

smaller communities. It claimed the 

argument in the initial regulatory 

evaluation that carriers would keep 

these flights because they are currently 

profitable is flawed; faced with a 

reduction in the overall number of 

flights, which could only be recouped at 

a cost, carriers will reprioritize its 

current interests and will likely drop 

service to smaller communities. 

US Airways also remarked that the 

SNPRM proposed a form of a ‘‘forced 

upgauging’’ on LaGuardia and that will 

almost inevitably lead to diminished 

service to small and medium-sized 

markets. US Airways went on to state 

that this loss of service would be 

exacerbated by the auctioning of slots at 

other New York area airports. The 

commenter argued that the auction 

could end up actually increasing 

system-wide congestion because there 

would be more flights between 

LaGuardia and other airports that are 

already congested because the service to 

smaller, non-congested airports would 

no longer make sense economically. 

Several commenters noted that 

service to small communities is 

provided on smaller aircraft. The Port 

Authority estimated that with auctions, 

the cost per seat for carriers could be 

from two to six times higher for small 

aircraft. The Regional Airline 

Association commented that many 

communities are served exclusively by 

small regional aircraft and that it is only 

through these smaller planes that there 

can be any meaningful competition in 

smaller communities. 

Both the Port Authority and the 

American Association of Airport 

Executives raised concerns about the 

potential impact to communities within 

300 miles of New York City. These 

commenters noted that alternative hubs 

are not a realistic option for cities 

within a 300 mile radius of LaGuardia; 

and the Port Authority noted that 

service to these communities has 

already declined 14 percent in the past 

year. They also noted that the concern 

that a particular community could lose 

existing service to LaGuardia was raised 

by several smaller municipalities and 

their community organizations in 

response to the NPRM. In particular, the 

Port Authority noted the assessment by 

Newport News/Williamsburg 

International Airport that the loss of one 

third of AirTran’s service to the 

community could result in the loss of 

approximately $20 billion per year to 

the region. 

Finally, NetJets commented that 

limiting unscheduled operations will 

also negatively impact small 

communities. According to NetJets, 

many of the smallest markets have no 

commercial air service to the New York 

City area and general aviation is the 

only air link to the region. Additionally, 

NetJets noted that general aviation is 

going to become more important for 

service to New York City as scheduled 

carriers reduce the reach of their 

networks because of high fuel prices. 

While not directly related to the loss 

of service to small communities, the 

Canadian Airports Council expressed 

concern that air service to Canada 

would be jeopardized because the major 

Canadian cities are much smaller than 

their U.S. counterparts and cannot 

sustain larger aircraft. 

The FAA recognizes that there is a 

significant level of small community 

service at LaGuardia. We believe small 

community service is an important 

sector of aviation. The FAA has made 

several changes to its original proposal 

to address the potential loss of services. 

Not only did the agency withdraw the 

requirement for aircraft upgauging at 

LaGuardia, but it also reduced the 

number of slots that would be 

reallocated from 100 percent of slots 

every ten years to 10 percent of slots in 

the first five years, with no reallocation 

thereafter. The SNPRM did not provide 

any carve-outs for small community 


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35 GRA, Incorporated ‘‘Economic Values for FAA 

Investment and Regulatory Decisions, A Guide’’ 

prepared for the FAA Office of Aviation Policy and 

Plans (October 3, 2007). Value is weighted using 

LaGuardia shares of 51 percent leisure and 49 

percent business travel. 

service like the upgauging proposal of 

the NPRM, and we do not adopt any 

today. The agency continues to believe 

that a system whereby upgauging to 

larger aircraft is completely voluntary 

decreases the likelihood of a whole-sale 

withdrawal from smaller markets. 

We note that the AIR–21 exemptions 

from the HDR, which permitted 

additional flights by new entrant 

carriers and by carriers serving small 

hub and non-hub airports with smaller 

aircraft have expired. Until the spring/ 

summer of 2008, when the cost of oil 

reached unprecedented levels, we had 

not seen a reduction in service to small 

communities under the LaGuardia 

Order, which allows commercial 

decisions by the carriers and does not 

classify Operating Authorizations by 

class of user. Therefore, although there 

may be a slight reduction in small 

community service by not dedicating 

slots for those particular cities, we 

believe market conditions and fuel 

prices are the primary motivation for 

any reduction in service, and not a 

consequence of federal action in this 

rule. 

Furthermore, several air carriers have 

noted in public fora that service to small 

communities from LaGuardia is 

profitable and an important part of their 

network operations. Due to these facts, 

and the Administration’s decision to 

rely on the market to allocate slots 

according to their highest and best use, 

we do not believe it is appropriate to 

develop a separate class of slots 

specifically for use to and from small 

communities. The FAA wishes to avoid 

any unintended consequences on a 

carrier’s marketing and network 

decisions that could result from set 

asides or exemptions for small 

communities. 

The FAA acknowledges the Canadian 

Airports Council’s concern about 

service to smaller sized Canadian cities. 

However, Air Canada will be allocated 

42 common slots because of the United 

States’ bilateral obligations with 

Canada. Consequently, Air Canada, the 

only Canadian carrier currently serving 

LaGuardia, will have continued access 

to the slots they have historically 

operated and will not be affected by the 

reallocation aspect of this final rule. 

VI. Regulatory Notices and Analyses 

Changes to Federal regulations must 

undergo several economic analyses. 

First, Executive Order 12866 directs that 

each Federal agency shall propose or 

adopt a regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs. 

Second, the Regulatory Flexibility Act 

of 1980 requires agencies to analyze the 

economic impact of regulatory changes 

on small entities. Third, the Trade 

Agreements Act (19 U.S.C. 4 2531–2533) 

prohibits agencies from setting 

standards that create unnecessary 

obstacles to the foreign commerce of the 

United States. In developing U.S. 

standards, this Trade Act requires 

agencies to consider international 

standards and, where appropriate, to be 

the basis of U.S. standards. Fourth, the 

Unfunded Mandate Reform Act of 1995 

(Pub. L. 104–4) requires agencies to 

prepare a written assessment of the 

costs, benefits, and other effects of 

proposed or final rules that include a 

Federal mandate likely to result in the 

expenditure by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

annually (adjusted for inflation). 

In conducting these analyses, FAA 

has determined this final rule (1) has 

benefits that justify its costs, and is a 

‘‘significant regulatory action’’ as 

defined in Executive Order 12866 both 

because it is economically significant 

and because it raises the type of novel 

policy issues contemplated under that 

executive order. Accordingly, OMB has 

reviewed this final rule. The rule is also 

‘‘significant’’ as defined in DOT’s 

Regulatory Policies and Procedures. The 

final rule will not have a significant 

economic impact on a substantial 

number of small entities and will not 

adversely affect international trade or 

impose an unfunded mandate on State, 

local, or tribal governments, or on the 

private sector. 

The FAA received numerous 

comments regarding its regulatory 

analysis of this rulemaking action. 

These comments are addressed in the 

Final Regulatory Evaluation and readers 

are directed to that document to see 

how they are addressed. 

Among the concerns raised by 

commenters was that the analysis of the 

SNPRM did not satisfy Executive Order 

12866. Executive Order 12866 directs 

that each Federal agency shall propose 

or adopt a regulation only upon a 

reasoned determination that the benefits 

of the intended regulation justify its 

costs. The FAA complied with this 

order by making its determination in the 

SNPRM regulatory evaluation based 

upon the quantified benefits exceeding 

the quantified costs. In addition we 

have taken into account public 

comments in our final evaluation and 

have updated our cost and benefits 

estimates. 

Total Costs and Benefits of This 

Rulemaking 

We evaluate the costs and benefits of 

this rule using two baselines. One 

baseline assumes no operating 

constraints at the airport; this is the 

same baseline as the NPRM and 

SNPRM. The second baseline preferred 

by some commenters assumes the 

current operating limits at the airport 

continue into the foreseeable future. 

When we evaluate this final rule using 

the same baseline as in the SNPRM, the 

net total benefits are $3.2 billion. When 

we use the alternative baseline, the total 

estimated net benefits are $1.3 billion. 

The net present value benefits of the 

auction are $65.4 million. As the sale of 

a slot is a transfer (no change to gross 

national product), we assign no costs to 

those purchasing a slot. While the total 

present value auction costs are $24 

million, the slot reallocation benefits 

that offset these costs are $89.3 million. 

Who Is Potentially Affected by This 

Rulemaking 

• Operators of scheduled and nonscheduled flights to LaGuardia and new 

entrants who do not yet operate at 

LaGuardia. 

• All communities, with air service to 

LaGuardia (including small 

communities). 

• Passengers of scheduled flights to 

LaGuardia. 

• The Port Authority of New York 

and New Jersey, which operates the 

airport. 

• Passengers on scheduled and 

unscheduled flights transiting New York 

airspace. 

Base Case 

• Base Case 1: No operating 

authorizations or caps (the rule will 

generate $3.2 billion in net benefits, of 

which $65.4 million is attributable to 

reallocation benefits associated with 

auctions and the balance to the cap on 

operations). 

• Base Case 2: Indefinite extension of 

the current LaGuardia Order (the rule 

will generate $1.3 billion in net benefits, 

of which $65.4 million are attributable 

to reallocation benefits associated with 

auctions and the balance to the cap on 

operations). 

Assumptions 

• Discount Rate—seven percent. 

• Assumes 2008 Constant Year 

Dollars. 

• Passenger Value of Travel Time— 

$30.86 per hour.35

• 85 percent of current slots will be 

‘‘grandfathered’’ to carriers who hold 


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the corresponding Operating 

Authorization under the LaGuardia 

Order pursuant to a cooperative lease 

agreement for a period of ten years. 

Alternatives We Have Considered 

• No caps (no action): Based on past 

history, the FAA expects operators 

would expand operations and further 

worsen airport delay. 

• 2006 NPRM: The 2006 NPRM 

would have instituted caps, provided 

for mandatory upgauging, and 

withdrawn 10 percent of slots annually 

for reallocation. We have amended the 

SNPRM proposal in favor of the one 

finalized here. 

• Caps with no reallocation: This 

alternative would permanently impose 

caps at 75 scheduled operations and 

three unscheduled operations per hour. 

It would grandfather all current 

Operating Authorizations, assigning 

them to carriers currently operating at 

the airport. This alternative would stifle 

actual and potential competition. 

Benefits of This Rulemaking 

The primary benefits of this 

rulemaking will be due to the delay 

reduction from the reduction in the cap 

on operations and an improvement in 

the allocation of scarce slot resources 

through the use of an auction 

mechanism. 

Since publishing the NPRM and the 

SNPRM, we have updated our cost and 

benefit estimates. A detailed discussion 

of the applied methodology as related to 

consumer and producer surplus can be 

found in the NPRM regulatory 

evaluation. The total net benefits of this 

final rule are summarized in the 

following table. The baseline costs and 

benefits from setting the cap of 75 

scheduled operations and 6 

unscheduled operations, plus reducing 

the cap, and the net benefits from the 

auction result in net benefits of $3.2 

billion. The net benefits from reducing 

the cap and from the auction are $1.2 

billion based on the current capped 

operation level. This is the alternative 

baseline suggested by commenters. 

NET BENEFITS OF THE RULE ($2008 MIL) 

Net Benefit of a Cap: 75 scheduled; 6 Unscheduled .......................................................................................................................... $1,862.5 

Net Benefit of Reducing Cap: 71 scheduled; 3 unscheduled ............................................................................................................. 1,226.7 

Net Benefit of the Auction ................................................................................................................................................................... 65.4 

TOTAL NET BENEFITS of CAP, CAP Reduction and Auction ................................................................................................... 3,154.6 

TOTAL NET BENEFITS of CAP Reduction and Auction ............................................................................................................ 1,292.1 

Costs of This Rulemaking 

Since the SNPRM, and at the request 

of commenters, we have re-estimated 

the costs associated with this rule. 

These costs include the costs to the 

public and private sectors of designing, 

implementing and participating in the 

auction. The total present value costs 

are $23.9 million. As the costs of 

purchasing a slot are a transfer from one 

entity to another, these costs are not 

included. However, we include a 

discussion of slot values in the Final 

Regulatory Evaluation. We estimate $6.2 

million as the nominal auction costs to 

the FAA. The nominal cost for carriers 

is $21.7 million. 

Paperwork Reduction Act 

This proposal contains the following 

new information collection 

requirements. As required by the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(d)), the FAA has submitted 

the information requirements associated 

with this proposal to the Office of 

Management and Budget for its review. 

ATA believes the FAA’s estimate of 

the paperwork burden is understated. 

ATA noted that there will also be 

significant legal fees associated with 

negotiating, drafting, executing and 

monitoring the secondary market. Based 

on this, ATA believes the estimated 

burden should be between 50 percent to 

100 percent of a full-time management 

employee’s time. 

FAA does not agree with ATA’s 

assessment of the time necessary to 

participate in the secondary market. The 

secondary market being adopted in this 

final rule does not vary much in scope 

from the secondary market in place at 

the airport over the past several years. 

We do, however, acknowledge that 

participation in the government auction 

will require airlines to dedicate 

employee time and resources in order to 

prepare and submit their bids. It should 

be noted, however, that participation in 

the auction and secondary market are 

not requirements of this rule. A carrier 

with existing slots at LaGuardia is 

permitted to continue operations at the 

airport using the common slots 

grandfathered to them as part of this 

final rule. Carriers will only need to 

engage in the secondary market and 

auction if they choose to buy, lease or 

sell slots. 

Some of the information requirements 

in today’s rule are similar to those 

originally proposed in the 2006 notice. 

The FAA has updated these 

requirements and summarized them 

below. 

Title: Congestion Management Rule 

for LaGuardia Airport. 

Summary: The rule grandfathers the 

majority of operations at the airport and 

will develop a robust secondary market 

by annually auctioning off a limited 

number of slots; the FAA plans to use 

the proceeds from the auctions to 

mitigate congestion and delay in the 

New York City area. In addition, the 

hourly cap on scheduled operations will 

be reduced to 71 per hour during the 

regulated hours except. This reduction 

will lead to an estimated 41 percent 

reduction in modeled delay at the 

airport. This rule also contains 

provisions for use-or-lose, unscheduled 

operations, and withdrawal for 

operational need. The rule will sunset 

in ten years. 

More information on the proposed 

requirements is detailed elsewhere in 

today’s notice. 

Use of: The information is reported to 

the FAA by scheduled operators holding 

slots. The FAA logs, verifies, and 

processes the requests made by the 

operators. 

This information is used to allocate, 

track usage, withdraw, and confirm 

transfers of slots among the operators 

and facilitates the buying and selling of 

slots in the secondary market. The FAA 

also uses this information in order to 

maintain an accurate accounting of 

operations to ensure compliance with 

the operations permitted under the rule 

and those actually conducted at the 

airport. 

Respondents: The respondents to the 

proposed information requirements in 

today’s notice are scheduled carriers 

with existing service at LaGuardia, 

carriers that plan to enter the LaGuardia 

market (by auction or secondary 

market), and carriers that enter the 

LaGuardia market in the future. There 

are currently fourteen (14) carriers with 

existing scheduled service at LaGuardia. 

Frequency: The information collection 

requirements of the rule involve 


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scheduled carriers notifying the FAA of 

their use of slots. The carriers must 

notify the FAA of: (1) Its designation of 

50 percent of its Limited Slots; (2) 

request for confirmation to sublease 

slots; (3) its consent to transfer slots 

under the transferring Carrier’s 

marketing control; (4) requests for 

confirmation of one-for-one slot trades; 

(5) slot usage (operations); (6) request 

for assignment of slots available on a 

temporary basis; and (7) participation in 

FAA auctions. 

Annual Burden Estimate: The annual 

reporting burden for each subsection of 

the rule is presented below. Annual 

burden estimates presented in today’s 

notice are based on burden estimates 

from the 2006 notice. 

The burden is calculated by the 

following formula: 

Annual Hourly Burden = (# of 

respondents) * (time involved) * 

(frequency of the response). 

Section 93.64(c)(3) Categories of Slots: 

50 percent designation of Limited Slots 

(6 carriers) * (80 hours per submittal) 

= 480 hours. 

Based on the current allocation of 

Operating Authorizations and the level 

of baseline operations each carrier 

would be grandfathered under today’s 

rule, we assumed the 6 carriers with the 

most operations at LaGuardia would 

expend up to 10 days of planning time 

each, potentially 80 hours, to develop 

and submit its designation of 50 percent 

of its Limited Slots. This designation 

would occur once, ten days after the 

final rule effective date. 

Sections 93.65(c)–(d) and 93.66(a) 

Initial Assignment of Slots and 

Assignment of New or Returned Slots 

We assumed 50 carriers will expend 

time submitting and collecting 

information to participate in the 

proposed auctions for slot assignments. 

For the overall auction activity, a carrier 

would likely assemble a 

multidisciplinary team of existing staff 

that would consist of an auction 

manager, an operations research 

specialist, and a corporate lawyer. The 

assembled team involved in the auction 

would not be dedicated entirely to the 

auction process and could continue to 

work on existing projects and 

responsibilities. The information 

collection is 32 hours per carrier and is 

a subset of the overall carrier auction 

costs. It consists of submitting an 

expression of interest (8 hours) and 

submitting bids (24 hours). 

We estimate the annual auctions 

would require approximately 32 hours 

for the assembled team of resources to 

submit the Auction Expression of 

Interest and submit the bid file to FAA 

auction system. Both of these paperwork 

submission requirements will be filed 

electronically. 

(50 bidding carriers) * (32 hours per 

carrier ) * (1 occurrence per year) = 

1,600 hours. 

Section 93.68(b)–(f) Sublease and 

Transfer of Slots 

(14 carriers) * (1.5 hours per 

submittal) * (4 occurrences per year) = 

84 hours. 

Based on burden estimates from the 

2006 notice, we assumed the 14 carriers 

operating at LaGuardia would expend 

one and one half hours for each 

occurrence of a lease or transfer of a 

slot. For each operator, we assumed that 

a lease or transfer of a slot would occur 

on average quarterly. 

Section 93.69(b) One-for-One Trades 

of Operating Authorizations 

(14 carriers) * (1.5 hours per 

submittal) * (4 occurrences per year) = 

84 hours. 

Based on burden estimates from the 

2006 notice, we assumed the 14 

marketing carriers operating at 

LaGuardia expend one and one half 

hours for each occurrence of a one-forone trade of a slot. For each operator, we 

assumed that a one-for-one trade of a 

slot would occur quarterly. 

Section 93.72(a) Reporting 

Requirements 

(14 carriers) * (1.5 hours per 

submittal) * (6 occurrences per year) = 

126 hours. 

Based on burden estimates from the 

2006 notice, we assumed the 14 carriers 

operating at LaGuardia expend one and 

one half hours every two months of the 

data required by § 93.72(a). 

Section 93.73(d)–(e) Administrative 

Provisions 

(14 carriers) * (1.5 hours per 

submittal) * (4 occurrences per year) = 

84 hours. 

Based on burden estimates from the 

2006 notice, we assumed the 14 carriers 

operating at LaGuardia expend one and 

one half hours every quarter for 

administrative provisions. 

Summary 

Total First Year Hourly Reporting 

Burden—2,458 Hours; 

Total Recurring Annual Hourly 

Reporting Burden (years 2–5)—1,978 

Hours; 

Total Recurring Annual Hourly 

Reporting Burden (after fifth year)—378 

Hours. 

According to the 1995 amendments to 

the Paperwork Reduction Act (5 CFR 

1320.8(b)(2)(vi)), an agency may not 

collect or sponsor the collection of 

information, nor may it impose an 

information collection requirement 

unless it displays a currently valid OMB 

control number. OMB has assigned 

control number 2120–0719 to this 

information collection. 

Regulatory Flexibility Determination 

The Regulatory Flexibility Act of 1980 

(Pub. L. 96–3540) (RFA) establishes ‘‘as 

a principle of regulatory issuance that 

agencies shall endeavor, consistent with 

the objective of the rule and of 

applicable statutes, to fit regulatory and 

informational requirements to the scale 

of the business, organizations, and 

governmental jurisdictions subject to 

regulation.’’ To achieve that principle, 

the RFA requires agencies to solicit and 

consider flexible regulatory proposals 

and to explain the rationale for their 

actions. The RFA covers a wide-range of 

small entities, including small 

businesses, not-for-profit organizations, 

and small governmental jurisdictions. 

Agencies must perform a review to 

determine whether a proposed or final 

rule would have a significant economic 

impact on a substantial number of small 

entities. If the agency determines that it 

would, the agency must prepare a 

regulatory flexibility analysis as 

described in the Act. 

However, if an agency determines that 

a proposed or final rule is not expected 

to have a significant economic impact 

on a substantial number of small 

entities, section 605(b) of the 1980 RFA 

provides that the head of the agency 

may so certify and a regulatory 

flexibility analysis is not required. The 

certification must include a statement 

providing the factual basis for this 

determination, and the reasoning should 

be clear. 

This final rule will not have a 

significant impact on a substantial 

number of entities as there is only one 

small entity that might be affected. 

Although there are three scheduled 

operators whose employee total is less 

than 1,500 (the SBA criterion for small 

entity airline), all three of these 

operators are subsidiaries of larger 

companies with employees exceeding 

1,500. In January, 2007 there was one 

destination, Nantucket Memorial 

Airport, whose surrounding community 

was substantially less than the SBA 

criterion of 50,000 for communities. 

When we checked Official Airline 

Guide for July, 2008 we found one 

additional destination, Martha’s 

Vineyard, with seasonal service having 

a surrounding-community population 

less than 50,000. We conclude that there 

is only one community with year-round 


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service that qualifies as a small entity 

and no airline operator is a small entity. 

Since the comments to the SNPRM 

referenced small communities, 

operators, and small equipment, we will 

now discuss those comments within the 

context of the requirements of the 

Regulatory Flexibility Act. We have 

already provided more general 

responses to the comments earlier in 

this document. 

The FAA received one comment 

claiming that the FAA failed to 

adequately consider alternatives in 

violation of the Regulatory Flexibility 

Act. This commenter was not a small 

entity. Because the agency has 

determined that the rule will not have 

a significant economic impact on a 

substantial number of small entities, no 

further analysis as required under the 

Act. However, as discussed earlier, the 

agency has considered multiple 

alternatives in developing this rule. 

Several commenters noted that 

service to small communities is 

provided using smaller aircraft. The Port 

Authority estimated with auctions, the 

cost per seat for carriers could be from 

two to six times higher for small aircraft. 

The Regional Airline Association (RAA) 

commented many communities are 

served exclusively by small regional 

aircraft and that it is only through these 

smaller planes that there can be any 

meaningful competition in smaller 

communities. US Airways also 

remarked the SNPRM will be a form of 

a ‘‘forced upgauging’’ on LaGuardia and 

that to the extent the other New York 

area airports use auctions, it will 

preclude nonstop service from many 

smaller communities. 

Finally, NetJets commented limiting 

unscheduled operations will also 

negatively impact small communities. 

According to NetJets, many of the 

smallest markets have no commercial 

air service to the New York City area 

and general aviation is the only air link 

to the region. 

This final rule helps ensure service to 

small communities as we dropped the 

requirement for aircraft upgauging at 

LaGuardia and we reduced the number 

of slots for reallocation from 100 percent 

of slots in ten years to ten percent of 

slots in five years. A majority of slots at 

the airport will be grandfathered to 

current slot-holders for the duration of 

the rule. The reduction of slots to be 

reallocated, and the withdrawal of 

upgauging will help ensure service to 

small community airports. This rule is 

not designed to force carriers to serve 

particular communities. Ultimately this 

rule allows the market to allocate scarce 

resources. Just as is the case today, the 

rule allows an operator to make a 

business decision to retain, add, or 

remove service to a small community. In 

the case a small community loses 

service, they can apply for Essential Air 

Service from the Department of 

Transportation to restore service. 

Currently neither the airport at Martha’s 

Vineyard with its seasonal service nor 

Nantucket Memorial Airport receives 

Essential Air Service. 

The changes contained in this final 

rule also help operators flying smaller 

equipment. With only ten percent of the 

slots subject to reallocation, the initial 

impact on all operators is substantially 

reduced. Although there will be no rule 

requirement regarding the size of 

airplane, the operator might decide to 

fly a larger, or smaller airplane. This 

decision belongs to the operator. With a 

reduced number of slots to be 

reallocated and the removal of 

upgauging, the impact on all operators 

and especially those flying smaller 

equipment has been reduced. 

Lastly most of NetJet’s comments are 

directed toward the nonscheduled 

service requirement. After reviewing 

LaGuardia nonscheduled service, nearly 

all service can be accommodated at 

preferred times under the final rule. For 

those few cases where the preferred 

hour is not possible, almost all service 

can be accommodated in the adjacent 

hours. Lastly, in the rare case where the 

adjacent hour will not accommodate the 

overflow, a 2- to 3-hour window should 

permit the operation. The rule does 

allow all operators, including NetJet the 

opportunity to buy a slot to ensure 

operations to New York. Such an 

opportunity is very difficult in today’s 

environment. 

In summary, the FAA has mitigated 

the impact on all operators, especially 

those flying smaller equipment, and 

there is only one small entity who 

would potentially be affected by this 

rule. Nantucket Memorial receives yearround service and the surrounding 

community is less than 50,000. 

However, as one small entity is not a 

substantial number, as the acting FAA 

Administrator, I certify this final rule 

will not have a significant economic 

impact on a substantial number of small 

entities. 

International Trade Impact Assessment 

The Trade Agreements Act of 1979 

prohibits Federal agencies from 

establishing any standards or engaging 

in related activities that create 

unnecessary obstacles to the foreign 

commerce of the United States. 

Legitimate domestic objectives, such as 

safety, are not considered unnecessary 

obstacles. The statute also requires 

consideration of international standards 

and, where appropriate, that they be the 

basis for U.S. standards. The FAA has 

assessed the potential effect of this 

proposed rule and determined that it 

would impose no costs on international 

entities and thus have a no trade impact. 

Canadian entities are the only foreign 

operators at LaGuardia and their slots 

are protected by a bilateral aviation 

agreement and not affected by the rule. 

They might benefit from the rule if they 

choose to participate in the proposed 

auction to acquire additional slots. 

Unfunded Mandate Assessment 

The Unfunded Mandate Reform Act of 

1995 (the Act) is intended, among other 

things, to curb the practice of imposing 

unfunded Federal mandates on State, 

local, and tribal governments. Title II of 

the Act requires each Federal agency to 

prepare a written statement assessing 

the effects of any Federal mandate in a 

proposed or final agency rule that may 

result in an expenditure of $100 million 

or more (adjusted annually for inflation) 

in any one year by State, local, and 

tribal governments, in the aggregate, or 

by the private sector; such a mandate is 

deemed to be a ‘‘significant regulatory 

action.’’ The FAA currently uses an 

inflation-adjusted value of $136.1 

million in lieu of $100 million. This 

final rule does not contain such a 

mandate. The requirements of Title II do 

not apply. 

Executive Order 13132, Federalism 

The FAA has analyzed this rule under 

the principles and criteria of Executive 

Order 13132, Federalism. We 

determined that this action will not 

have a substantial direct effect on the 

States, on the relationship between the 

national Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, and, therefore, 

does not have federalism implications. 

Environmental Analysis 

FAA Order 1050.1E, ‘‘Environmental 

Impacts: Policies and Procedures’’ 

identifies FAA actions that are normally 

categorically excluded from preparation 

of an environmental assessment or 

environmental impact statement under 

the National Environmental Policy Act 

(NEPA) in the absence of extraordinary 

circumstances. The FAA has 

determined that this rulemaking 

qualifies for the categorical exclusions 

identified in paragraph 312d ‘‘Issuance 

of regulatory documents (e.g., Notices of 

Proposed Rulemaking and issuance of 

Final Rules) covering administration or 

procedural requirements (does not 

include Air Traffic procedures; specific 

Air traffic procedures that are 


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categorically excluded are identified 

under paragraph 311 of this Order)’’ and 

paragraph 312f, ‘‘Regulations, standards, 

and exemptions (excluding those which 

if implemented may cause a significant 

impact on the human environment.)’’ It 

has further been determined that no 

extraordinary circumstances exist that 

may cause a significant impact and 

therefore no further environmental 

review is required. The FAA has 

documented this categorical exclusion 

determination. A copy of the 

determination and underlying 

documents has been included in the 

Docket for this rulemaking. 

The Port Authority estimates that 

there would be a five to fifteen percent 

increase in night operations as a result 

of the proposed auction alternatives in 

the SNPRM. A resident of a 

neighborhood near LaGuardia said that 

there are already many flights until 

midnight and that flights in these later 

hours adversely affect the quality of life 

of neighbors. The FAA does not believe 

there is a reasonable projection that the 

final rule will result in additional 

nighttime operations for the following 

reasons. First, there are currently 14 

unused slots in the 8 p.m. and 9 p.m. 

hours that could be used for scheduled 

operations; we therefore believe it is 

unlikely that the number of nighttime 

operations will increase to a point 

where the currently unallocated slots 

are filled and additional operations are 

added in the later evening hours. 

Second, there are a limited number of 

remote overnight parking positions at 

the airport, which physically bounds 

the number of nighttime operations that 

can be accommodated at LaGuardia. 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use 

The FAA has analyzed this rule under 

Executive Order 13211, Actions 

Concerning Regulations that 

Significantly Affect Energy Supply, 

Distribution, or Use (May 18, 2001). We 

have determined that it is not a 

‘‘significant energy action’’ under the 

executive order because while a 

‘‘significant regulatory action’’ under 

Executive Order 12866, it is not likely 

to have a significant adverse effect on 

the supply, distribution, or use of 

energy. 

Additional Information 

Availability of Rulemaking Documents 

You can get an electronic copy of 

rulemaking documents using the 

Internet by— 

1. Searching the Federal eRulemaking 

Portal (http://www.regulations.gov); 

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.gpoaccess.gov/fr/index.html. 

You can also get a copy by sending a 

request to the Federal Aviation 

Administration, Office of Rulemaking, 

ARM–1, 800 Independence Avenue, 

SW., Washington, DC 20591, or by 

calling (202) 267–9680. Make sure to 

identify the docket number, notice 

number, or amendment number of this 

rulemaking. 

You may access all documents the 

FAA considered in developing this rule, 

including economic analyses and 

technical reports, from the internet 

through the Federal eRulemaking Portal 

referenced in paragraph (1). 

List of Subjects in 14 CFR Part 93 

Air traffic control, Airports, 

Navigation (air). 

VIII. Regulatory Text 

■ In consideration of the foregoing, the 

Federal Aviation Administration 

amends Chapter I of Title 14, Code of 

Federal Regulations, as follows: 

PART 93—SPECIAL AIR TRAFFIC 

RULES 

■ 1. The authority citation for part 93 

continues to read as follows: 

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

40109, 40113, 44502, 44701, 44719, 46301. 

■ 2. Subpart C is added to read as 

follows: 

Subpart C—LaGuardia Airport Traffic Rules 

Sec. 

93.35 Applicability. 

93.36 Definitions. 

93.37 Slots for scheduled arrivals and 

departures. 

93.38 Categories of slots. 

93.39 Initial assignment of slots. 

93.40 Assignment of new or returned slots. 

93.41 Reversion and withdrawal of slots. 

93.42 Sublease and transfer of slots. 

93.43 One-for-one trade of slots. 

93.44 Minimum usage requirements. 

93.45 Unscheduled operations. 

93.46 Reporting requirements. 

93.47 Administrative provisions. 

Subpart C—LaGuardia Airport Traffic 

Rules 

§ 93.35 Applicability. 

(a) This subpart prescribes the air 

traffic rules for the arrival and departure 

of aircraft used for scheduled and 

unscheduled service, other than 

helicopters, at LaGuardia Airport 

(LaGuardia). 

(b) This subpart also prescribes 

procedures for the assignment, transfer, 

sublease and withdrawal of Slots issued 

by the FAA for scheduled operations at 

LaGuardia. 

(c) The provisions of this subpart 

apply to LaGuardia during the hours of 

6:00 a.m. through 9:59 p.m., Eastern 

Time, Monday through Friday and from 

12 noon through 9:59 p.m., Eastern 

Time, Sunday. No person shall operate 

any scheduled arrival or departure into 

or out of LaGuardia during such hours 

without first obtaining a slot in 

accordance with this subpart. No person 

shall conduct an unscheduled operation 

to or from LaGuardia during such hours 

without first obtaining a reservation. 

(d) Carriers that have common 

ownership shall be considered a single 

air carrier for purposes of this rule. 

(e) The slots assigned under this 

subpart terminate at 10:00 p.m. on 

March 9, 2019. 

§ 93.36 Definitions. 

For purposes of this subpart, the 

following definitions apply: 

Airport Reservation Office (ARO) is an 

operational unit of the FAA’s David J. 

Hurley Air Traffic Control System 

Command Center. It is responsible for 

the administration of reservations for 

unscheduled operations at LaGuardia. 

Base of operations are those common 

slots held by a carrier at LaGuardia on 

December 9, 2008, that do not exceed 20 

operations per day and all slots 

guaranteed under The Air Transport 

Agreement between the Government of 

the United States of America and the 

Government of Canada. 

Carrier is a U.S. or foreign air carrier 

with authority to conduct scheduled 

service under Parts 121, 129, or 135 of 

this chapter and the appropriate 

economic authority for scheduled 

service under 14 CFR chapter II and 49 

U.S.C. chapters 411 and 413. 

Common ownership with respect to 

two or more carriers means having in 

common at least 50 percent beneficial 

ownership or control by the same entity 

or entities. 

Common slot is a slot that is allocated 

by the FAA as a lease under its 

cooperative agreement authority for the 

length of this rule. 

Enhanced computer voice reservation 

system (e–CVRS) is the system used by 

the FAA to make arrival and/or 

departure reservations for unscheduled 

operations at LaGuardia and other 

designated airports. 

Limited slot is a slot, the lease for 

which expires prior to the expiration of 

this rule for retirement or subsequent 

allocation by the FAA as an unrestricted 

slot. 

Public charter is defined in 14 CFR 

380.2 as a one-way or roundtrip charter 


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flight to be performed by one or more 

direct air carriers that is arranged and 

sponsored by a public charter operator. 

Public charter operator is defined in 

14 CFR 380.2 as a U.S. or foreign public 

charter operator. 

Reservation is an authorization 

received by a carrier or other operator of 

an aircraft, excluding helicopters, in 

accordance with procedures established 

by the FAA to operate an unscheduled 

arrival or departure on a particular day 

during a specific 60-minute period. 

Scheduled operation is the arrival or 

departure segment of any operation 

regularly conducted by a carrier 

between LaGuardia and another point 

regularly served by that carrier. 

Slot is the operational authority 

assigned by the FAA to a carrier to 

conduct one scheduled operation or a 

series of scheduled operations at 

LaGuardia on a particular day(s) of the 

week during a specific 30-minute 

period. 

Unrestricted slot is a slot that is 

allocated to a carrier by the FAA via the 

auction of a lease. 

Unscheduled operation is an arrival 

or departure segment of any operation 

that is not regularly conducted by a 

carrier or other operator of an aircraft, 

excluding helicopters, between 

LaGuardia and another service point. 

The following types of carrier 

operations shall be considered 

unscheduled operations for the 

purposes of this rule: Public, ondemand, and other charter flights; hired 

aircraft service; extra sections of 

scheduled flights; ferry flights; and 

other non-passenger flights. 

§ 93.37 Slots for scheduled arrivals and 

departures. 

(a) During the hours of 6 a.m. through 

9:59 p.m., Eastern Time, Monday 

through Friday and from 12 noon 

through 9:59 p.m., Eastern Time, 

Sunday, no person shall operate any 

scheduled arrival or departure into or 

out of LaGuardia without first obtaining 

a slot in accordance with this subpart. 

(b)(1) Prior to March 8, 2009, the 

number of slots shall be limited to no 

more than seventy-five (75) per hour 

unless otherwise provided by the 

Administrator. The number of slots may 

not exceed 38 in any 30-minute period, 

and 75 in any 60-minute period. 

(2) Effective March 8, 2009, and 

except as otherwise established by the 

FAA under paragraph (c) of this section, 

the number of slots available from 6 

a.m. through 9:59 p.m. shall be limited 

to no more than seventy-one (71) per 

hour. The number of slots may not 

exceed 38 in any 30-minute period, and 

71 in any 60-minute period. The 

number of arrival and departure slots in 

any period may be adjusted by the FAA 

as necessary based on the actual or 

potential delays created by such number 

or other considerations relating to 

congestion, airfield capacity and the air 

traffic control system. 

(c) Notwithstanding paragraph (b) of 

this section, the Administrator may 

increase the number of slots based on a 

review of the following: 

(1) The number of delays; 

(2) The length of delays; 

(3) On-time arrivals and departures; 

(4) The number of actual operations; 

(5) Runway utilization and capacity 

plans; and 

(6) Other factors relating to the 

efficient management of the National 

Airspace System. 

§ 93.38 Categories of slots. 

Each slot shall be designated as a 

common slot, limited slot or 

unrestricted slot and shall be assigned 

to the carrier under a lease agreement. 

A lease for a common or limited slot 

shall be assigned via a cooperative 

agreement. A lease for an unrestricted 

slot shall be awarded via an auction. 

(a) Common slots. 

(1) All slots within any carrier’s base 

of operations as determined on 

December 9, 2008 shall be designated as 

common slots. 

(2) 176 slots at LaGuardia on 

December 9, 2008 shall be designated as 

limited slots or unrestricted slots. All 

other slots shall be designated as 

common slots. 

(b) Limited slots. Those slots assigned 

to a carrier subject to return to the FAA 

under § 93.39(c) and (d) shall be 

designated as limited slots until the date 

of their reassignment by the FAA as 

unrestricted slots or their retirement by 

the FAA. A carrier may continue to use 

a limited slot that has reverted to the 

FAA until the second Sunday in the 

following March. 

(1) Each carrier with a total number of 

daily operations at LaGuardia in excess 

of its base of operations, will be notified 

by no later than December 9, 2008 how 

many of its slots will be designated as 

limited slots pursuant to paragraphs 

(b)(3) and (4) of this section. 

(2) A carrier shall designate 50 

percent of its limited slots. The carrier 

must notify the FAA of its designation 

by December 19, 2008. 

(3) The FAA will designate the 

remaining limited slots, initially 

excluding those hours in which five or 

more slots have been designated as 

limited slots by the carriers. 

(4) No later than December 29, 2008, 

the FAA will publish a list of all limited 

slots and the dates upon which they 

will expire. 

(c) Unrestricted slots. Unrestricted 

slots are slots acquired by a carrier 

through a lease with the FAA awarded 

via an auction. Unrestricted slots are not 

subject to withdrawal by the FAA. 

§ 93.39 Initial assignment of slots. 

(a) Except as provided for under 

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

any carrier allocated operating rights 

under the Order, Operating Limitations 

at New York LaGuardia Airport, during 

the week of September 28–October 4, 

2008, as evidenced by the FAA’s 

records, will be assigned corresponding 

slots in 30-minute periods consistent 

with the limits under § 93.37(b). If 

necessary, the FAA may utilize 

administrative measures such as 

voluntary measures or a lottery to retime the assigned slots within the same 

hour to meet the 30-minute limits under 

§ 93.37(b). The FAA Vice President, 

System Operations Services, is the final 

decision-maker for determinations 

under this section. 

(b) If a carrier was allocated operating 

rights under the Order Limiting 

Operations at LaGuardia Airport during 

the week of September 28–October 4, 

2008, but the operating rights were held 

by another carrier regularly conducting 

operations at the airport as of that week, 

then the corresponding slots will be 

assigned to the carrier that held the 

operating rights for that period, as 

evidenced by the FAA’s records. 

(c)(1) In accordance with the schedule 

published under § 93.38(b)(4), 

(i) Twenty-four (24) limited slots shall 

revert to the FAA on January 13, 2009 

and be auctioned as unrestricted slots 

by the FAA. 

(ii) Every year thereafter, twenty-two 

(22) limited slots shall revert to the FAA 

and be auctioned as unrestricted slots 

by the FAA. 

(2) Any slot receiving no responsive 

bids will be retired until the next 

auction. 

(3) An affected carrier will be allowed 

to use the limited slot until the 

following second Sunday in March. 

(d) On March 8, 2009, the FAA will 

retire 64 of the limited slots returned to 

the FAA under § 93.38(b). 

§ 93.40 Assignment of new or returned 

slots. 

(a) New capacity or capacity returned 

to the FAA pursuant to the provisions 

of § 93.44 will be reassigned by the FAA 

via an auction. Slots acquired from the 

FAA under the auction proceeding shall 

be designated as unrestricted slots. 

(b) The FAA may decide to 

accumulate a quantity of slots prior to 

conducting an auction. 


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§ 93.41 Reversion and withdrawal of slots. 

(a) This section does not apply to 

unrestricted slots. 

(b) A carrier’s common slots or 

limited slots revert back to the FAA 30 

days after the carrier has ceased all 

operations at LaGuardia for any reasons 

other than a strike. 

(c) The FAA may retime, withdraw or 

temporarily suspend common slots and 

limited slots at any time to fulfill 

operational needs. 

(d) Common slots and limited slots 

temporarily withdrawn for operational 

need will be withdrawn in accordance 

with the priority list established under 

§ 93.47. 

(e) Except as otherwise provided in 

paragraph (a) of this section, the FAA 

will notify an affected carrier before 

withdrawing or temporarily suspending 

a common slot or limited slot and 

specify the date by which operations 

under the common slot or limited slot 

must cease. The FAA will provide at 

least 45 days’ notice unless otherwise 

required by operational needs. 

(f) Any common slot or limited slot 

that is temporarily withdrawn under 

this paragraph will be reassigned, if at 

all, only to the carrier from which it was 

withdrawn, provided the carrier 

continues to conduct scheduled 

operations at LaGuardia. 

(g) Should the Administrator 

determine that the cap on scheduled 

operations at LaGuardia is too high, he 

may withdraw common slots to reduce 

the cap. Any such action by the 

Administrator shall be subject to the 

notice and comment provisions of the 

Administrative Procedure Act. 

§ 93.42 Sublease and transfer of slots. 

(a) A carrier may sublease its slots to 

another carrier in accordance with this 

section and subject to the provisions of 

the carrier’s lease agreement with the 

FAA. The character of the slot (e.g., 

common slot) will not change. 

(b) A carrier must provide notice to 

the FAA to sublease a slot. Such notice 

must contain: The slot number and 

time, effective dates and, if appropriate, 

the duration of the lease. The carrier 

may also provide the FAA with a 

minimum bid price. 

(c) The FAA will post a notice of the 

offer to sublease the slot and relevant 

details on the FAA Web site at http:// 

www.faa.gov. An opening date, closing 

date and time by which bids must be 

received will be provided. 

(d) Upon consummation of the 

transaction, written evidence of each 

carrier’s consent to sublease must be 

provided to the FAA, as well as all bids 

received and the terms of the sublease, 

including but not limited to: 

(1) The names of all bidders and all 

parties to the transaction; 

(2) The offered and final length of the 

sublease; 

(3) The consideration offered by all 

bidders and provided by the sublessee. 

(e) The slot may not be used until the 

conditions of paragraph (d) of this 

section have been met, and the FAA 

provides notice of its approval of the 

sublease. 

(f) A carrier may transfer a slot to 

another carrier that conducts operations 

at LaGuardia solely under the 

transferring carrier’s marketing control, 

including the entire inventory of the 

flight. Each party to such transfer must 

provide written evidence of its consent 

to the transfer, and the FAA must 

confirm and approve these transfers in 

writing prior to the effective date of the 

transaction. However, the FAA will 

approve transfers under this paragraph 

up to five business days after the actual 

operation to accommodate operational 

disruptions that occur on the same day 

of the scheduled operation. The FAA 

Vice President, System Operations 

Services is the final decision maker for 

any determinations under this section. 

(g) A carrier wishing to sublease a slot 

via an FAA auction under § 93.39(c), 

rather than pursuant to this section may 

do so. The carrier shall retain the 

proceeds and the slot shall retain the 

same designation that it had prior to the 

carrier placing it up for auction. 

§ 93.43 One-for-one trade of slots. 

(a) A carrier may trade a slot with 

another carrier on a one-for-one basis. 

(b) Written evidence of each carrier’s 

consent to the trade must be provided 

to the FAA. 

(c) No recipient of the trade may use 

the acquired slot until written 

confirmation has been received from the 

FAA. 

(d) Carriers participating in a one-forone trade must certify to the FAA that 

no consideration or promise of 

consideration was provided by either 

party to the trade. 

§ 93.44 Minimum Usage Requirements. 

(a) This section does not apply to 

unrestricted slots. 

(b) Any common slot or limited slot 

that is not used at least 80 percent of the 

time over a consecutive two-month 

period shall be withdrawn by the FAA. 

(c) The FAA may waive the 

requirements of paragraph (b) of this 

section in the event of a highly unusual 

and unpredictable condition which is 

beyond the control of the carrier and 

which affects carrier operations for a 

period of five or more consecutive days. 

Examples of conditions which could 

justify a waiver under this paragraph are 

weather conditions that result in the 

restricted operation of the airport for an 

extended period of time or the 

grounding of an aircraft type. 

(d) The FAA will treat as used any 

common slot or limited slot held by a 

carrier on Thanksgiving Day, the Friday 

following Thanksgiving Day, and the 

period from December 24 through the 

first Sunday of January. 

§ 93.45 Unscheduled operations. 

(a) During the hours of 6 a.m. through 

9:59 p.m., Monday through Friday, and 

12 noon through 9:59 p.m. on Sunday, 

no person may operate an aircraft other 

than a helicopter to or from LaGuardia 

unless he or she has received, for that 

unscheduled operation, a reservation 

that is assigned by the Airport 

Reservation Office (ARO) or in the case 

of public charters, in accordance with 

the procedures in paragraph (d) of this 

section. Requests for reservations will 

be accepted through the e-CVRS 

beginning 72 hours prior to the 

proposed time of arrival to or departure 

from LaGuardia. Additional information 

on procedures for obtaining a 

reservation is available on the Internet 

at http://www.fly.faa.gov/ecvrs. 

(b) Three reservations are available 

per hour, including those assigned to 

public charter operations under 

paragraph (d) of this section. The ARO 

will assign reservations on a 60-minute 

basis. 

(c) The ARO will receive and process 

all reservation requests for unscheduled 

arrivals and departures at LaGuardia. 

Reservations are assigned on a ‘‘firstcome, first-served’’ basis determined by 

the time the request is received at the 

ARO. Reservations must be cancelled if 

they will not be used as assigned. 

(d) One reservation per hour will be 

available for allocation to public charter 

operations prior to the 72-hour 

Reservation window in paragraph (a) of 

this section. 

(1) The public charter operator may 

request a reservation up to six months 

in advance of the date of flight 

operation. Reservation requests should 

be submitted to Federal Aviation 

Administration, Slot Administration 

Office, AGC–200, 800 Independence 

Avenue, SW., Washington, DC 20591. 

Submissions may be made via facsimile 

to (202) 267–7277 or by e-mail to 

7-awa-slotadmin@faa.gov. 

(2) The public charter operator must 

certify that its prospectus has been 

accepted by the Department of 

Transportation in accordance with 14 

CFR part 380. 

(3) The public charter operator must 

identify the call sign/flight number or 


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aircraft registration number of the direct 

air carrier, the date and time of the 

proposed operation(s), the airport 

served immediately prior to or after 

LaGuardia, and aircraft type. Any 

changes to an approved reservation 

must be approved in advance by the 

Slot Administration Office. 

(4) If reservations under paragraph 

(d)(1) of this section have already been 

allocated, the public charter operator 

may request a reservation under 

paragraph (a) of this section. 

(e) The filing of a request for a 

reservation does not constitute the filing 

of an IFR flight plan as required by 

regulation. The IFR flight plan may be 

filed only after the reservation is 

obtained, must include the reservation 

number in the ‘‘Remarks’’ section, and 

must be filed in accordance with FAA 

regulations and procedures. 

(f) Air Traffic Control will 

accommodate declared emergencies 

without regard to reservations. Nonemergency flights in direct support of 

national security, law enforcement, 

military aircraft operations, or publicuse aircraft operations may be 

accommodated above the reservation 

limits with the prior approval of the 

Vice President, System Operations 

Services, Air Traffic Organization. 

Procedures for obtaining the appropriate 

waiver are available on the Internet at 

http://www.fly.faa.gov/ecvrs. 

(g) Notwithstanding the limits in 

paragraph (b) of this section, if the Air 

Traffic Organization determines that air 

traffic control, weather and capacity 

conditions are favorable and significant 

delay is unlikely, the FAA may 

determine that additional reservations 

may be accommodated for a specific 

time period. Unused slots may also be 

made available temporarily for 

unscheduled operations. Reservations 

for additional operations must be 

obtained through the ARO. 

(h) Reservations may not be bought, 

sold or leased. 

§ 93.46 Reporting requirements. 

(a) Within 14 days after the last day 

of the two-month period beginning 

January 1, 2009 and every two months 

thereafter, each carrier must report, in a 

format acceptable to the FAA, the 

following information for each slot: 

(1) The slot number, time, and arrival 

or departure designation; 

(2) The operating carrier; 

(3) The date and scheduled time of 

each of the operations conducted 

pursuant to the slot, including the flight 

number and origin/destination; 

(4) The aircraft type identifier. 

(b) The FAA may withdraw the 

common slot or limited slot of any 

carrier that does not meet the reporting 

requirements of paragraph (a) of this 

section. 

§ 93.47 Administrative provisions. 

(a) Each slot shall be assigned a 

number for administrative convenience. 

(b) The FAA will assign priority 

numbers by random lottery for common 

slots and limited slots at LaGuardia. 

Each common slot and limited slot will 

be assigned a withdrawal priority 

number, and the 30-minute time period 

for the common slot or limited slot, 

frequency, and the arrival or departure 

designation. 

(c) If the FAA determines that 

operations need to be reduced for 

operational reasons, the lowest assigned 

priority number common slot or limited 

slot will be the last withdrawn. 

(d) Any slot available on a temporary 

basis may be assigned by the FAA to a 

carrier on a non-permanent, first-come, 

first-served basis subject to permanent 

assignment under this subpart. Any 

remaining slots may be made available 

for unscheduled operations on a nonpermanent basis and will be assigned 

under the same procedures applicable to 

other operating reservations. 

(e) All transactions under this subpart 

must be in a written or electronic format 

approved by the FAA. 

Issued in Washington, DC, on October 6, 

2008. 

Robert A. Sturgell, 

Acting Administrator. 

[FR Doc. E8–24048 Filed 10–9–08; 8:45 am] 

BILLING CODE 4910–13–P 


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