Document ID: FAA-2008-0221-0091
Agency: faa
Document Type: Rule
Title: Operating Limitations at Newark Liberty International Airport
Posted Date: 2008-05-21T04:00Z

[Federal Register: May 21, 2008 (Volume 73, Number 99)]
[Notices]               
[Page 29550-29566]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my08-104]                         

[[Page 29550]]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2008-0221]

 
Operating Limitations at Newark Liberty International Airport

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Order Limiting Scheduled Operations at Newark Liberty 
International Airport.

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SUMMARY: In a proposed order published on March 18, 2008, the Federal 
Aviation Administration (FAA) tentatively identified the parameters of 
an order that would temporarily limit scheduled flight operations at 
Newark Liberty International Airport (EWR).\1\ The FAA issued the 
proposal as a result of persistent congestion and delays at EWR during 
the peak operating hours, as well as a dramatic projected increase in 
flight delays at the airport during the summer of 2008 if proposed 
schedules were implemented as requested by carriers. After evaluating 
the written comment submitted to the public docket in this matter, the 
FAA is issuing this final Order, which will take effect at 6 a.m., 
Eastern Time, on June 20, 2008.
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    \1\ 73 FR 14,552 (Mar. 18, 2008).
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    If you wish to review the background documents or comments received 
in this proceeding, you may go to http://www.regulations.gov at any 
time and follow the online instructions for accessing the electronic 
docket. You may also go to the U.S. Department of Transportation's 
Docket Operations in Room W12-140 on the ground floor of the West 
Building at 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. 
and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Gerry Shakley, System Operations 
Services, Air Traffic Organization; telephone--(202) 267-9424; e-mail--
gerry.shakley@faa.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    EWR has historically experienced a significant number of delays 
relative to the other airports in the domestic system. When ranked 
according to the proportion of delayed operations, EWR has frequently 
been the most delayed airport in the country. Moreover, EWR's on-time 
performance has deteriorated in recent years. The percent of on-time 
gate arrivals within 15 minutes of the scheduled time decreased from 
70.66% in fiscal year (FY) 2000 to 63.97% in FY 2006 and to 61.71% in 
FY 2007. The average daily counts of arrival delays greater than one 
hour were 54 in FY 2000; 79 in FY 2006; and 93 in FY 2007, an increase 
of almost 18% in the last fiscal year alone.
    One of the factors contributing to the EWR's declining performance 
has been the carriers' scheduling practices at the airport. Daily 
operations have been relatively stable while delays have continued to 
increase. In Fiscal Year (FY) 2000, there were 1,253 average daily 
operations. In FY 2007, there were 1,219 average daily operations, a 
decrease of about 3 percent. Demand during the most desirable peak 
hours, however, approached or exceeded the average runway capacity 
resulting in volume-related delays. The cumulative impact of such 
scheduling by all carriers can result in delays even under ideal 
weather conditions. However, the resulting delays become even more 
pronounced when weather or other operating conditions reduce the 
airport's capacity below optimal levels.
    During the summer of 2007, in addition to the delays experienced at 
EWR, another New York-area airport, John F. Kennedy International 
Airport (JFK), also experienced significant congestion-related delays. 
Based on both airports' summer 2007 performance, and in the absence of 
any major capacity enhancing projects, the FAA designated the airports 
as Level 2, Schedules Facilitated Airports for the summer 2008 
scheduling season, in accordance with the International Air Transport 
Association (IATA) Worldwide Scheduling Guidelines.\2\ In designating 
the airports as IATA Level 2, Schedules Facilitated Airports, the FAA 
required all U.S. and foreign air carriers to report to the FAA their 
proposed summer 2008 scheduled operations at the airports during 
designated hours. With respect to EWR, the FAA specifically noted that 
it intended to work with carriers on the flight operations planned from 
7 until 10 a.m. and from 2 until 10 p.m., Eastern Time.\3\ The FAA 
further specified that it was considering its options to ``further 
address congestion and improve operational performance at EWR, 
including the timing of flights at the airport and their impact on the 
airport's operation.'' \4\
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    \2\ 72 FR 54,317 (Sept. 24, 2007).
    \3\ Id., at 54,318.
    \4\ Id.
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    The information that U.S. and foreign air carriers reported to the 
FAA regarding their proposed operations at EWR reflected a significant 
increase in scheduled operations, especially during the most 
oversubscribed hours when the airport routinely experienced delays. 
U.S. and foreign air carriers requested about 100 new operations, 
adding to the schedules that produced pronounced delays during summer 
2007. The proposed schedules in the afternoon and evening period were 
of the greatest concern. For example, several consecutive hours would 
have had demand for arrivals or departures in the mid-90s and others in 
the upper 80s. By contrast, EWR's adjusted average airport capacity 
reflects that, from September 2006 through August 2007, the airport 
handled or was capable of handling an average of 83 operations per 
hour.
    The FAA modeled the level of delays that passengers transiting EWR 
could expect if the carriers were to operate the summer 2008 schedules 
that they proposed. When compared with EWR's modeled baseline delays 
during the summer of 2007, the average arrival delays would have 
increased 38% to 35 minutes; the average number of arrival delays of at 
least one hour would have increased 50%; and the mean arrival delay 
would have reached almost 80 minutes by 7 p.m. The proposed schedules 
also would have negatively affected departures.\5\
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    \5\ As with previous aircraft queuing model runs produced for 
the FAA by the MITRE Corporation's Center for Advanced Aviation 
System Development, it was assumed that no scheduled operation was 
cancelled.
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    In response to the U.S. and foreign air carriers' proposed summer 
2008 schedules, the FAA held discussions with many of the carriers to 
validate their schedule requests and to ask them to reconsider their 
proposed timings in light of the airport's capacity limitations. 
Although there were some modest revisions to the proposed schedules, it 
was clear that demand would continue to exceed capacity without further 
action, as some carriers indicated that they would operate as proposed 
despite the FAA's concern about the impact on delays. In addition, the 
FAA anticipated that carriers might try to add still more operations at 
EWR when a forthcoming operational limitation took effect at nearby 
JFK,\6\ in effect shifting a portion of that problem to an already 
oversubscribed EWR. As a result, the FAA elected to modify EWR's IATA 
designation to a Level 3, Coordinated Airport for summer 2008.\7\ This 
designation provided notice, in accordance with international norms, 
that the FAA would focus proposed new operations at the airport on 
hours during which airport capacity is

[[Page 29551]]

available and to deny proposed new operations during oversubscribed 
hours. Some carriers, including Continental Airlines, the primary hub 
carrier at EWR, moved flights from historic peak hours to less 
congested times in order to assist with delay reduction. The FAA 
published in the appendix to the proposed order the results of the 
discussions with U.S. and foreign air carriers and our approved 
schedules reflecting very limited peak-hour growth.\8\ While the 
proposed order, through the appendix, provided the public with notice 
of the state of the FAA's discussions with carriers under the IATA 
Worldwide Scheduling Guideline process, the principal purpose of the 
proposed order was to describe and to raise for public comment a series 
of practical considerations that the FAA must address when it 
undertakes to place a temporary limit on operations at an airport.
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    \6\ 73 FR 3,510 (Jan. 18, 2008) (order limiting scheduled 
operations at JFK).
    \7\ 72 FR 73,418 (Dec. 27, 2007).
    \8\ 73 FR at 14,558-65.
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II. Summary and Analysis of the Comments

    As of May 1, 2008 the FAA received in the public docket 78 written 
comments on the FAA's proposed order. The vast majority of the 
commenters support the FAA's effort, as a general matter, to control 
congestion and delays at EWR. A small number of comments question 
certain aspects of the FAA's proposal.
    One commenter--Virgin America, Inc.--expresses its preference that 
the FAA had followed a different process in limiting operations at EWR. 
Virgin America specifically would prefer that the FAA had conducted a 
scheduling reduction meeting for scheduled operations at EWR, as the 
FAA did in limiting scheduled operations at JFK.
    The FAA holds a number of options in controlling congestion at a 
particular airport. As the FAA articulated when it requested the 
carriers' anticipated summer 2008 schedules involving EWR, the FAA 
considered them all in selecting its course with respect to EWR. There 
is no requirement that the FAA pursue a particular avenue in addressing 
airport congestion, and small differences in a particular airport's 
operations can argue for a slightly different solution. The FAA's 
election to improve the carriers' scheduling and EWR's performance 
through a combination of the IATA scheduling process and a voluntary 
drawing down of carriers' schedules during the oversubscribed hours was 
a rational method of addressing congestion-related delay at the 
airport. Moreover, and equally important, it was both an expedient 
course and a permissible exercise of the FAA's discretion.
    Nor is it apparent that conducting a scheduling reduction meeting 
like that held for JFK would have led to a different result than that 
expressed in the proposed order for EWR. The FAA published both JFK's 
and EWR's designation as IATA Level 2, Schedules Facilitated Airports 
in the same document.\9\ The starting point for the FAA's discussions 
with carriers at the subsequent scheduling reduction meeting for JFK 
was the proposed schedules that the carriers submitted pursuant to 
JFK's designation as an IATA Level 2, Schedules Facilitated Airport. 
Many carriers at JFK, including those with the largest presence at the 
airport, agreed to reduce flights during the most desirable hours in 
order to improve operational performance and to benefit all operators. 
At the same time, the FAA ensured that other carriers were restricted 
from adding new flights during the previously oversubscribed hours, 
which would have offset the delay reduction that the other carriers' 
schedule adjustments achieved. The FAA accommodated a few timely 
requested new operations during the hours of peak demand.
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    \9\ Although Virgin America identified its intention to conduct 
operations at JFK during summer 2008, it filed no such intention in 
response to EWR's IATA Level 2 designation. After the FAA declared 
EWR an IATA Level 3, Fully Coordinated Airport, Virgin America 
indicated for the first time a desire to provide scheduled service 
there.
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    The FAA applied the same general policy approach at EWR, with the 
objective of preventing a further degradation in operational 
performance by keeping demand within the average available capacity. We 
recognize Virgin America's position that it did not take advantage of 
the IATA schedule submission requirement or the initial ensuing IATA 
schedule discussions regarding EWR. As a result, in consideration of 
Virgin America's newly advanced request for scheduled operations, the 
FAA attempted to accommodate Virgin America during the hours that are 
scheduled below the airport's adjusted average hourly capacity. The 
discussions leading to the FAA's proposed order, including the 
conversations with Virgin America, necessarily had the same tenor as a 
scheduling reduction meeting's discussions. If the FAA were to conduct 
a scheduling reduction meeting for EWR, we do not expect that the 
product would differ materially from the results published in the 
appendix to the proposed order.
    Virgin America and the Air Carrier Association of America also 
state that the proposed order diminishes the ability of new entrants to 
compete at EWR and strengthens the position of EWR's hub carrier. In 
particular, Virgin America notes the potential that more established 
carriers could abuse the proposed mechanisms of retiming operations and 
permitting operational growth at EWR. Virgin America and the Air 
Carrier Association of America recommend a periodic withdrawal and 
redistribution of Operating Authorizations to stimulate competition. We 
emphasize, however, that we intended the proposed order to describe a 
short-term vehicle to preserve realistic scheduling at EWR while longer 
term solutions are applied to relieve EWR's congestion and delay. The 
mechanisms that we identified to permit operational flexibility and 
growth within the airport's capacity, if applied fairly and without 
discrimination, should provide opportunities during the relatively 
brief duration of this final Order. While we anticipate that all 
carriers will conduct their transactions under this Order in a 
principled way, the FAA will closely monitor the operation of the 
airport and the application of the mechanisms for the trade and lease 
of Operating Authorizations while this Order remains in effect. If we 
detect unfair or anticompetitive behavior, we will not hesitate to take 
corrective action and to propose more stringent controls on such 
transactions in the future.
    One commenter--Porter Airlines, Inc.--requests an amendment to the 
appendix of the proposed order to grant it fourteen total operations at 
EWR during the time periods that it originally requested of the FAA. 
Porter contends that it received an approved schedule from the EWR 
Terminal/Gate Schedules Facilitator and that the FAA should allow it to 
operate that schedule. Porter, as well as the Air Transport Association 
of Canada, also contends that the FAA's proposed allocations would 
violate the U.S.-Canada Open Skies Agreement. In a supplemental filing, 
Porter asks the FAA to reconsider the allocation of Operating 
Authorizations to Porter if any Operating Authorization becomes 
available in the future, such as by the revised operating plans of 
other carriers.\10\
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    \10\ Eos Airlines, for example, recently ceased operations after 
April 27, 2008. Eos does not have historic scheduled operations at 
EWR, and it has not commenced the operations it planned to conduct 
at EWR this summer and for which the FAA proposed to allocate 
Operating Authorizations. Because Eos has ceased to conduct 
scheduled operations, the FAA is not allocating Operating 
Authorizations to Eos in the appendix to this final Order.

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[[Page 29552]]

    Throughout the process that led to the FAA's proposed order, the 
FAA's representatives were candid during and after the IATA Schedules 
Conference in November 2007 regarding the potential for restricted 
operations at EWR, particularly in the already oversubscribed afternoon 
and evening hours. The FAA expressly made Porter aware that it was not 
granting approval, based on runway capacity, for all Porter's proposed 
new operations during the peak hours, that the FAA was continuing to 
seek voluntary moves by carriers to retime schedule requests, and that 
any plans to conduct scheduled operations during those periods would be 
at Porter's own risk. Consistent with the FAA's preliminary assessment 
of the operational impact of the carriers' proposed schedules, the FAA 
determined that it was necessary to modify EWR's designation from Level 
2 to Level 3 when it became clear that voluntary schedule adjustments 
by the carriers to avoid the overscheduling of EWR's peak hours were 
not achievable.
    With respect to the FAA's proposed allocation of Operating 
Authorizations, the U.S.-Canada Open Skies Agreement requires the FAA 
to accord fair and equal, not preferential, treatment. Contrary to 
Porter Airlines' suggestion, the FAA's proposal treats Porter Airlines 
identically to all air carriers that are similarly situated at EWR. In 
addition, like all other carriers, Porter Airlines will retain the 
flexibility under this Order to trade, to lease, and to request 
retimings of its scheduled operations to enhance its competitive 
posture. Retiming of an approved Operating Authorization for any 
carrier, however, would be granted only if capacity exists, if the FAA 
determines that it does not diminish the efficiency of the airport's 
operations, and if it is otherwise consistent with the provisions and 
policies expressed in this Order.
    Porter's request in its supplemental filing for an additional two 
Operating Authorizations in the 5 p.m. and 7 p.m. hours and its request 
to retime an approved arrival in the 9 p.m. half hour to the 8 p.m. 
hour are denied. Shifting a 9 p.m. half hour flight to the earlier, 
more problematic hours would increase congestion and would not be 
equitable to other carriers that are unable to make similar moves. As a 
carrier that did not have any historic operations at EWR but that 
timely indicated that it would provide summer 2008 service, Porter 
Airlines was permitted one new roundtrip during the airport's busiest 
period, from 3 p.m. through 8:59 p.m. The FAA proposed similar 
allocations for two other new entrant carriers that timely indicated 
their intention to initiate service at EWR. By contrast, other 
carriers, including those with a limited existing presence at the 
airport, were not permitted to add new flights during those hours. In 
addition, other carriers either removed or rescheduled some 
historically conducted operations during that period to reduce delays. 
Adding even a few flights to that period diminishes the delay reduction 
benefits that the voluntary moves of other carriers have achieved. 
Accordingly, the FAA's manner of accommodating new entrant carriers at 
EWR is adopted as proposed.
    Air Canada, the Air Transport Association of America, and American 
Airlines recommend adjustments to the FAA's proposed 80% usage 
requirement for Operating Authorizations. They request that the FAA 
consider an Operating Authorization as used if the carrier elects to 
cancel a flight due to a ground delay program. The Air Transport 
Association and American Airlines further request that the FAA consider 
an Operating Authorization used if the carrier elects to cancel a 
flight because a de-icing program is in effect.
    For the present time, the FAA has decided not to amend the proposal 
to include categorical exclusions from the minimum usage requirement 
for flight cancellations for reasons such as ground delay or de-icing 
programs. In arriving at this conclusion, we understand that, during 
extreme conditions of extended delays or reduced capacity, carriers may 
find it necessary or practical to cancel a flight rather than conduct 
it several hours later. In such situations, carriers might accommodate 
passengers efficiently on other flights, permitting carriers to work on 
overall network recovery through a tactical use of flight 
cancellations. Moreover, under these circumstances, flight 
cancellations may deliver operational benefits to the National Airspace 
System, because delays would be even longer for all system users absent 
flight cancellations during reduced capacity conditions.
    Nevertheless, we must balance these considerations against the 
overall efficient use of a scarce operational resource. The proposed 
minimum usage requirement permits carriers to suspend flights for 
operational reasons up to 20% of the time. Furthermore, the FAA may 
waive the usage requirement in the face of highly unusual and 
unpredictable conditions that are beyond the control of the carriers 
and that affect carrier operations for at least five consecutive days. 
Under normal circumstances, this degree of flexibility should be 
sufficient to absorb the occasional cancellation of a scheduled 
operation and still permit carriers to meet the minimum usage 
threshold, if the planned usage is near 100%. Carriers that do not 
schedule operations for all their assigned authority increase the risk 
of falling below the minimum usage threshold, and it is not the FAA's 
intention to facilitate a carrier's underutilization of an Operating 
Authorization by granting additional usage exceptions.\11\ While this 
Order is in effect, the FAA invites carriers to highlight specific 
instances in which the available measures appear insufficient. Such 
information may provide the good cause necessary to modify this Order.
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    \11\ We further note that, under this Order, carriers may return 
Operating Authorizations to the FAA on or before the seasonal 
deadline for the periods during which the carriers do not intend to 
use them. This allows carriers to adjust their seasonal allocation 
to match more precisely the carriers' known schedules at the time of 
the deadline. Additionally, this Order creates a secondary market 
for the transfer of Operating Authorizations to another carrier that 
is able to use them.
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    The Air Transport Association and American Airlines submitted 
comments on the FAA's proposed termination of the Order on October 24, 
2009. In their opinion, the FAA could avoid the lack of certainty that 
a potential series of short-term extensions would cause if the FAA 
would tie the Order's expiration date to the effective date of a 
replacement rule. They note that such an approach was effective in the 
FAA order capping scheduled operations at LaGuardia Airport.
    The FAA originally considered whether the termination date of this 
Order should be open-ended, tied to the adoption of a replacement rule, 
or as proposed, identified as a date certain. We rejected the notion of 
leaving this Order open-ended or tying its expiration to the effective 
date of a replacement rule. This Order is constructed to provide short-
term relief from the congestion that EWR would otherwise experience. We 
do not deem it appropriate as a longer-term structure for EWR's 
operations. Accordingly, we will retain the Order's proposed expiration 
date.
    American Airlines suggests that the FAA's proposal to require 
carriers to use an Operating Authorization for 90 days before leasing 
or transferring it should be changed. Because Operating Authorizations 
were not previously assigned at EWR, American Airlines instead contends 
that a 90-day usage requirement in this context should look back to the 
period that carriers conducted the underlying historic

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operations before the final Order takes effect. According to American 
Airlines, the market for Operating Authorizations would otherwise be 
suppressed for most of the summer 2008 scheduling season--a prospect 
that Porter Airlines also views negatively in its comments.
    To facilitate the secondary market for Operating Authorizations 
during the summer of 2008, the FAA agrees that this limitation should 
be amended to permit an earlier lease or transfer of Operating 
Authorizations that correspond to historically conducted operations 
with one caveat. In particular, we remain concerned about a potential 
abuse here and in the future of the process under which the FAA arrives 
at the final allocations, whereby a carrier could accept Operating 
Authorizations to conduct new operations while also attempting to 
control via lease the operator of the carriers' historically conducted 
operations. This could serve as a disincentive for carriers to discuss 
their schedule plans in good faith, it is unfair to carriers that have 
concrete plans to serve the airport, and it could afford a carrier 
control over a greater share of the airport's operations than any 
portion that the carrier ever conducted there. Therefore, the FAA will 
amend the final Order to permit the lease or transfer of Operating 
Authorizations whenever the carrier can demonstrate that it operated 
the flight that corresponds to the Operating Authorization at least 80% 
of the 90-day period immediately preceding the lease or transfer. 
However, we will monitor the net effect of the carriers' lease 
transactions with respect to their newly allocated Operating 
Authorizations. If it is apparent that a carrier requested Operating 
Authorizations that it did not intend to utilize, the FAA may consider 
that circumstance in assessing the carrier's future representations 
with respect to its need for capacity at this or other airports.
    Kalitta Air, LLC, comments that it is uniquely burdened by the 
proposed order due to its contract with the United States Postal 
Service (USPS) to carry mail for the U.S. military. It indicates that 
it regularly operates 10 or more departures from EWR each week but that 
the number and time of the flights may vary to meet the contractual 
requirements. Kalitta further notes that some periods of the year, such 
as the December holidays, have historically generated more flights and 
that it must operate additional flights to accommodate the mail during 
other times, as well. Kalitta cites as possible solutions a large pool 
of authority for day-of unscheduled operations, the use of ``extra 
section'' authority, and a reduction in the hours when operational 
limits will apply at EWR. Kalitta also indicates it would like to 
revise its historic summer 2007 schedules to operate at different 
times.
    The FAA understands that all carriers may need to revise their 
plans to conduct scheduled operations at EWR after this Order takes 
effect. The FAA intends to issue a proposal to institute a reservations 
system for unscheduled flights, and some of the issues that Kalitta 
raises regarding the availability of last-minute operations will be 
addressed in that context. A finite number of reservations are expected 
for unscheduled operations during the peak hours; however, there is a 
potential for additional reservations for last-minute unscheduled 
operations if operating and delay conditions permit. We expect that the 
ultimate structure for scheduled and unscheduled operations will 
accommodate the historic patterns of demand that cargo operators 
experience during particular times of year, such as the months of 
November and December, but some retiming of proposed schedules may be 
required.
    The type of operational flexibility that Kalitta seeks to conduct 
operations during EWR's busiest hours is not practical, given the 
airport's limited capacity and trend toward congestion-related delays. 
The service that Kalitta provides to meet its USPS contract may be 
unique in its individual circumstances, but it does not materially 
differ as a practical matter from the limitations imposed on other 
operators. In some respects, cargo operations may have options that are 
not reasonably available to passenger-carrying and other operators, 
permitting flights at less-congested times. To this degree, it may be 
easier for a cargo operator to trade for or lease Operating 
Authorizations at favorable times than is the case for other carriers 
operating at EWR.
    As with other carriers, the FAA will not accept changes from a 
cargo operator's historic operations if the net result would be 
increased congestion. For example, the FAA cannot approve Kalitta's 
request to move a flight from the 9 p.m. hour to the 7 p.m. hour. 
Nevertheless, the FAA will work with Kalitta--as it will continue to do 
with other carriers--on schedule adjustments, but those adjustments 
must recognize the limits under this Order.
    A number of the commenters express opinions regarding the FAA's 
future allocation of Operating Authorizations at EWR. American Airlines 
advocates the FAA's long-term use of the IATA Worldwide Scheduling 
Guidelines at all congested airports, whereas the Air Carrier 
Association of America opposes the FAA's reliance on the Worldwide 
Scheduling Guidelines. The Air Transport Association of America, the 
Air Transport Association of Canada, and American Airlines oppose the 
FAA's use of auctions to allocate new or returned capacity at EWR, and 
the Air Carrier Association of America identifies alternative market-
based allocation concepts.
    The FAA's principal purpose in issuing the proposed order was to 
curb the overscheduling that passengers transiting EWR would experience 
during the summer of 2008 if the FAA failed to intervene. This final 
Order will result in significantly better performance at the airport 
than would occur if carriers were to implement the schedules that they 
originally proposed. The manner in which the FAA will allocate 
operational authority to conduct scheduled operations after this Order 
expires will be the subject of a rulemaking proceeding in a separate 
docket. Carriers that wish to register an opinion regarding that 
proposal should file their responsive written comments in the public 
docket that the FAA will open for that proceeding.
    Regarding the language in the proposed order that refers to a 
future auction of new and returned capacity at EWR while this final 
Order remains in effect, the FAA does not anticipate the immediate 
availability of a significant volume of new or returned capacity at 
EWR. However, the FAA expects that the need may arise to conduct an 
auction of new or returned capacity at EWR or JFK before the end of 
this calendar year. If this proves to be true, we anticipate that we 
would allocate such capacity for a 5- to 10-year term. The FAA has 
authority to lease real and personal property, including intangible 
property, to others. 49 U.S.C. 106(l)(6) and 106(n). Because the 
auction would address an FAA lease of Operating Authorizations awarded 
by the FAA under its leasing authority rather than under an 
administrative allocation, notice to the interested parties will be 
governed by applicable procurement law, rather than by the 
Administrative Procedure Act. The details regarding a potential auction 
will be disclosed when the FAA is ready to proceed with an auction. In 
accordance with the FAA's Acquisition Management System, the FAA will 
publicly announce its intention to conduct an auction on a particular 
date or over the course of a particular period of time. The FAA will 
also announce its proposed auction procedures and solicit comments on

[[Page 29554]]

those procedures. The FAA will consider the comments that it receives 
and then publish the final auction procedures. Any interested party 
will have an avenue to protest the procedures up until the date of the 
auction, in accordance with 49 U.S.C. 40110(d)(4) and 14 CFR Part 17.
    The individual and non-airline organizational commenters express 
nearly universal support for the proposed limit on scheduled operations 
at EWR, primarily because they view it as an alternative to the delay 
reduction anticipated from New York-New Jersey-Philadelphia airspace 
redesign. The airspace redesign project to which they refer is an 
initiative that is independent of this temporary limitation on flights 
at EWR, and it will reduce congestion-related delay in that region over 
the long term. The FAA will implement elements of the airspace redesign 
over five years, and as a result, the full benefit of the redesign will 
be realized in stages. By contrast, this Order will provide temporary 
relief from the heightened delays that the region would experience as 
early as this summer if carriers were permitted to operate the 
schedules that they proposed. The FAA does not intend this Order to 
serve as a long-term solution to congestion-related delay at and around 
EWR.
    Accordingly, with respect to scheduled flight operations at EWR, it 
is ordered that:
    1. This Order assigns operating authority to conduct an arrival or 
a departure at EWR during the affected hours to the U.S. air carrier or 
foreign air carrier identified in the appendix to this Order. The FAA 
will not assign operating authority under this Order to any person or 
entity other than a certificated U.S. or foreign air carrier with 
appropriate economic authority and FAA operating authority under 14 CFR 
Part 121, 129, or 135. This Order applies to the following:
    a. All U.S. air carriers and foreign air carriers conducting 
scheduled operations at EWR as of the date of this Order, any U.S. air 
carrier or foreign air carrier that operates under the same designator 
code as such a carrier, and any air carrier or foreign-flag carrier 
that has or enters into a codeshare agreement with such a carrier.
    b. All U.S. air carriers or foreign air carriers initiating 
scheduled or regularly conducted commercial service to EWR while this 
Order is in effect.
    c. The Chief Counsel of the FAA, in consultation with the Vice 
President, System Operations Services, is the final decision-maker for 
determinations under this Order.
    2. This Order governs scheduled arrivals and departures at EWR from 
6 a.m. through 10:59 p.m., Eastern Time, Sunday through Saturday.
    3. This Order takes effect at 6 a.m., Eastern Time, on June 20, 
2008, and expires at 11:59 p.m., Eastern Time, on October 24, 2009.
    4. Under the authority provided to the Secretary of Transportation 
and the FAA Administrator by 49 U.S.C. 40101, 40103 and 40113, we 
hereby order that:
    a. No U.S. air carrier or foreign air carrier initiating or 
conducting scheduled or regularly conducted commercial service at EWR 
may conduct such operations without an Operating Authorization assigned 
by the FAA.
    b. Except as provided in the appendix to this Order, scheduled U.S. 
air carrier and foreign air carrier arrivals and departures will not 
exceed 81 per hour from 6 a.m. through 10:59 p.m., Eastern Time.
    c. The Administrator may change the limits if he determines that 
capacity exists to accommodate additional operations without a 
significant increase in delays.
    5. For administrative tracking purposes only, the FAA will assign 
an identification number to each Operating Authorization.
    6. A carrier holding an Operating Authorization may request the 
Administrator's approval to move any arrival or departure scheduled 
from 6 a.m. through 10:59 p.m. to another half hour within that period. 
Except as provided in paragraph seven, the carrier must receive the 
written approval of the Administrator, or his delegate, prior to 
conducting any scheduled arrival or departure that is not listed in the 
appendix to this Order. All requests to move an allocated Operating 
Authorization must be submitted to the FAA Slot Administration Office, 
facsimile (202) 267-7277 or e-mail 7-AWA-Slotadmin@faa.gov, and must 
come from a designated representative of the carrier. If the FAA cannot 
approve a carrier's request to move a scheduled arrival or departure, 
the carrier may then apply for a trade in accordance with paragraph 
seven.
    7. A carrier may lease or trade an Operating Authorization to 
another carrier for any consideration and for a period that does not 
exceed the duration of this Order. A carrier may not lease an Operating 
Authorization to another carrier unless it has actually used the 
authorization to conduct flights to or from Newark at least 80% of the 
time over the preceding 90-day period. The FAA may waive the 90-day 
usage requirement of the Operating Authorization if the transferring 
carrier can demonstrate that it has operated the flight that 
corresponds to the Operating Authorization at least 80% of the time 
over the 90 days preceding the proposed transfer of the Operating 
Authorization. Notice of a trade or lease under this paragraph must be 
submitted in writing to the FAA Slot Administration Office, facsimile 
(202) 267-7277 or e-mail 7-AWA-Slotadmin@faa.gov, and must come from a 
designated representative of each carrier. The FAA must confirm and 
approve these transactions in writing prior to the effective date of 
the transaction. The FAA will approve transfers between carriers under 
the same marketing control up to five business days after the actual 
operation, but only to accommodate operational disruptions that occur 
on the same day of the scheduled operation.
    8. A carrier may not buy, sell, trade, or transfer an Operating 
Authorization, except as described in paragraph seven.
    9. Historical rights to Operating Authorizations and withdrawal of 
those rights due to insufficient usage will be determined on a seasonal 
basis and in accordance with the schedule approved by the FAA prior to 
the commencement of the applicable season.
    a. For each day of the week that the FAA has approved an operating 
schedule, any Operating Authorization not used at least 80% of the time 
over the period authorized by the FAA under this paragraph will be 
withdrawn by the FAA for the next applicable season except:
    i. The FAA will treat as used any Operating Authorization held by a 
carrier on Thanksgiving Day, the Friday following Thanksgiving Day, and 
the period from December 24 through the first Saturday in January.
    ii. The Administrator of the FAA may waive the 80% usage 
requirement 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 consecutive days or more.
    b. Each carrier holding an Operating Authorization must forward in 
writing to the FAA Slot Administration Office a list of all Operating 
Authorizations held by the carrier and for each Operating 
Authorization. These reports must include:
    i. The dates within each applicable season on which it intends to 
start and to cease scheduled operations.
    A. For the Summer 2008 scheduling season, the report must be 
received by the FAA no later than June 20, 2008.
    B. For the Winter 2008/2009 scheduling season, the report must be

[[Page 29555]]

received by the FAA no later than August 15, 2008.
    C. For the Summer 2009 scheduling season, the report must be 
received by the FAA no later than January 15, 2009.
    ii. The completed operations for each day of the applicable 
scheduling season:
    A. Via an interim report filed no later than September 1 for the 
Summer scheduling season;
    B. Via an interim report filed no later than January 15 for the 
Winter scheduling season.
    iii. A final report of the completed operations for each day of the 
scheduling season within 30 days after the last day of the applicable 
scheduling season.
    10. In the event that a carrier surrenders to the FAA any Operating 
Authorization assigned to it under this Order or if there are 
unallocated Operating Authorizations, the FAA will determine whether 
the unallocated Operating Authorizations should be reallocated. The FAA 
may temporarily allocate an Operating Authorization if it determines 
that such allocation will not increase congestion at the airport. Such 
temporary allocations will not be entitled to historical status for the 
next applicable scheduling season under paragraph 9.
    11. If the FAA determines that a reduction in the number of 
allocated Operating Authorizations is required to meet operational 
needs, such as reduced airport capacity, the FAA will conduct a 
weighted lottery to withdraw Operating Authorizations to meet a reduced 
hourly or half-hourly limit for scheduled operations. The FAA will 
provide at least 45 days' notice unless otherwise required by 
operational needs. Any Operating Authorization that is withdrawn or 
temporarily suspended will, if reallocated, be reallocated to the 
carrier from which it was taken, provided that the carrier continues to 
operate scheduled service at EWR.
    12. The FAA will enforce this Order through an enforcement action 
seeking a civil penalty under 49 U.S.C. 46301(a). A carrier that is not 
a small business as defined in the Small Business Act, 15 U.S.C. Sec.  
632, will be liable for a civil penalty of up to $25,000 for every day 
that it violates the limits set forth in this Order. A carrier that is 
a small business as defined in the Small Business Act will be liable 
for a civil penalty of up to $10,000 for every day that it violates the 
limits set forth in this Order. The FAA also could file a civil action 
in U.S. District Court, under 49 U.S.C. 46106, 46107, seeking to enjoin 
any air carrier from violating the terms of this Order.
    13. The FAA may modify or withdraw any provision in this Order on 
its own or on application by any carrier for good cause shown.

    Issued in Washington, DC, on May 15, 2008.
Robert A. Sturgell,
Acting Administrator, Federal Aviation Administration.
BILLING CODE 4910-13-P

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[FR Doc. 08-1278 Filed 5-16-08; 12:00 pm]

BILLING CODE 4910-13-C