Document ID: FAA-2014-1073-0001
Agency: faa
Document Type: Proposed Rule
Title: Slot Management and Transparency: LaGuardia John F. Kennedy International and Newark Liberty International Airports
Posted Date: 2015-01-08T05:00Z

[Federal Register Volume 80, Number 5 (Thursday, January 8, 2015)]
[Proposed Rules]
[Pages 1273-1306]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-30378]

[[Page 1273]]

Vol. 80

Thursday,

No. 5

January 8, 2015

Part V

Department of Transportation

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Federal Aviation Administration

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14 CFR Part 93

Slot Management and Transparency for LaGuardia Airport, John F. Kennedy 
International Airport, and Newark Liberty International Airport; 
Proposed Rule

  Federal Register / Vol. 80 , No. 5 / Thursday, January 8, 2015 / 
Proposed Rules  

[[Page 1274]]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 93

[Docket No.: FAA-2014-1073; Notice No. 14-11]
RIN 2120-AJ89

Slot Management and Transparency for LaGuardia Airport, John F. 
Kennedy International Airport, and Newark Liberty International Airport

AGENCY: Federal Aviation Administration (FAA), Department of 
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to replace the Orders limiting scheduled 
operations at John F. Kennedy International Airport (JFK), limiting 
scheduled operations at Newark Liberty International Airport (EWR), and 
limiting scheduled and unscheduled operations at LaGuardia Airport 
(LGA). The Orders are scheduled to expire when this proposed rule 
becomes effective but not later than October 29, 2016. This proposal is 
intended to provide a longer-term and comprehensive approach to slot 
management at JFK, EWR, and LGA. The FAA proposes to maintain the 
limits on scheduled and unscheduled operations in place under the 
Orders, limit unscheduled operations at JFK and EWR, and require use of 
an allocated slot 80% of the time for the same flight or series of 
flights to retain historic precedence. The FAA also proposes five 
alternatives for a secondary market that would allow carriers to buy, 
sell, lease, and trade slots. The DOT proposes to review certain slot 
transfer transactions for significant anti-competitive effects and 
harms to the public interest. Finally, the FAA proposes minor 
miscellaneous amendments to remove inapplicable references in the High 
Density Rule.

DATES: Send comments on or before April 8, 2015.

ADDRESSES: Send comments identified by docket number FAA-2014-1073 
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your 
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at 202-493-2251.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments 
from the public to better inform its rulemaking process. DOT posts 
these comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at 
http://www.regulations.gov at any time. Follow the online instructions 
for accessing the docket or Docket Operations in Room W12-140 of the 
West Building Ground Floor 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: For technical questions concerning 
this action, contact Molly Smith, Office of Aviation Policy and Plans, 
Federal Aviation Administration, 800 Independence Avenue SW., 
Washington, DC 20591; telephone (202) 267-3274; email 
molly.w.smith@faa.gov; Susan Pfingstler, System Operations Services, 
Air Traffic Organization, Federal Aviation Administration, 600 
Independence Avenue SW., Washington, DC 20591; telephone (202) 267-
6462; email susan.pfingstler@faa.gov; or Peter Irvine, U.S. Department 
of Transportation, Office of Aviation Analysis, 1200 New Jersey Avenue 
SE., Washington, DC 20590; telephone (202) 366-3156; email: 
peter.irvine@dot.gov.
    For legal questions concerning this action, contact Robert Hawks, 
Office of the Chief Counsel, Regulations Division, Federal Aviation 
Administration, 800 Independence Avenue SW., Washington, DC 20591; 
telephone (202) 267-7143; email rob.hawks@faa.gov; or Cindy Baraban, 
U.S. Department of Transportation, Office of the General Counsel, 1200 
New Jersey Avenue SE., Washington, DC 20590; telephone (202) 366-9159; 
email cindy.baraban@dot.gov.

SUPPLEMENTARY INFORMATION: See the ``Additional Information'' section 
for information on how to comment on this proposal and how the FAA will 
handle comments received. The ``Additional Information'' section also 
contains related information about the docket, privacy, the handling of 
proprietary or confidential business information. In addition, there is 
information on obtaining copies of related rulemaking documents.

Authority for This Rulemaking

    This rulemaking is promulgated under the authority described in 
Title 49 of the United States Code, Subtitle VII, Part A, Subpart I, 
Sections 40101, 40103, 40105, and 41712
    The Secretary of Transportation (Secretary) is the head of the DOT 
and has broad oversight of significant FAA decisions.\1\ In addition, 
under 49 U.S.C. 41712, the Secretary has the authority to investigate 
and prohibit unfair and deceptive practices and unfair methods of 
competition in air transportation or the sale of air transportation. 
The Secretary is required to consider several objectives as being in 
the public interest, including, without limitation, the following: 
Keeping available a variety of adequate, economic, efficient, and low-
priced air services; placing maximum reliance on competitive market 
forces and on actual and potential competition; avoiding airline 
industry conditions that would tend to allow at least one air carrier 
unreasonably to increase prices, reduce services, or exclude 
competition in air transportation; encouraging, developing, and 
maintaining an air transportation system relying on actual and 
potential competition; encouraging entry into air transportation 
markets by new and existing air carriers and the continued 
strengthening of small air carriers to ensure a more effective and 
competitive airline industry; and ensuring that consumers in all 
regions of the United States, including those in small communities and 
rural and remote areas, have access to affordable, regularly-scheduled 
air service.
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    \1\ See 49 U.S.C. 102 and 106.
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    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 the FAA deems necessary for safe and 
efficient utilization. It further directs the FAA to prescribe air 
traffic rules and regulations governing the efficient utilization of 
navigable airspace. The FAA should ensure efficient use of navigable 
airspace in a manner that does not effectively shut out potential 
operators at the airport and in a manner that takes account of 
competitive market forces. The FAA should take steps to ensure the 
operational limits imposed and the rules

[[Page 1275]]

governing their allocation and transfer do not inefficiently constrain 
competitive market forces. 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 operations limits. 
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.
    These authorities empower the DOT to ensure the efficient 
utilization of airspace by limiting the number of scheduled and 
unscheduled aircraft operations at JFK, EWR, and LGA, while balancing 
between promoting competition and recognizing historical investments in 
the airport and the need to provide continuity. They also authorize the 
DOT to review proposed transfers of slots and to limit or prohibit 
transfers where they present a potential for significant 
anticompetitive effects or adverse effects on the public interest.

Table of Contents

I. Overview of Proposed Rule
II. Background
    A. High Density Rule and AIR-21
    B. LaGuardia Airport After AIR-21
    C. John F. Kennedy International Airport After AIR-21
    D. Congestion at Newark Liberty International Airport
    E. Exploration of Long-Term Congestion Management
    F. Congestion Management Rules of 2008
    G. Current Slot Management at LGA, JFK, and EWR
III. Discussion of the Proposal
    A. Hourly and Daily Slot Limits
    B. Allocation of Slots
    C. Usage Requirement
    D. Transfer of Slots
    E. Oversight of Competitive and Public Interest Issues
    F. Retiming, Suspension, and Withdrawal of Slots for Operational 
Reasons
    G. Unscheduled Operations
    H. Miscellaneous Amendments
IV. Regulatory Notices and Analyses
    A. Regulatory Evaluation
    B. Regulatory Flexibility Determination
    C. International Trade Impact Assessment
    D. Unfunded Mandates Assessment
    E. Paperwork Reduction Act
    F. International Compatibility and Cooperation
    G. Environmental Analysis
V. Executive Order Determinations
    A. Executive Orders 12866 and 13563
    B. Executive Order 13132, Federalism
    C. Executive Order 13211, Regulations That Significantly Affect 
Energy Supply, Distribution, or Use
VI. Additional Information
    A. Comments Invited
    B. Availability of Rulemaking Documents
VII. The Proposed Amendment

I. Executive Summary

    This proposed rule would replace the Orders limiting scheduled 
operations at JFK and EWR and the Order limiting scheduled and 
unscheduled operations at LGA. Those Orders remain effective until this 
proposed rule becomes effective but not later than October 29, 2016. If 
adopted, this proposed rule would apply to all scheduled and 
unscheduled operations every day at JFK and EWR between the hours of 
0600 and 2259, local time. This proposed rule would apply to all 
scheduled and unscheduled operations at LGA Monday through Friday 
between the hours of 0600 and 2159, local time, and Sunday between the 
hours of 1200 and 2159, local time. This proposed rule would apply, in 
large part, the International Air Transport Association (IATA) 
Worldwide Slot Guidelines (WSG) to administering slots at each airport.
    The following tables provide a comparison between requirements 
under the current Orders and under this proposal. The first table 
summarizes existing requirements for each airport under the Orders. The 
second table summarizes this proposal's establishment of an initial 
slot base based on carrier holdings under the Orders, the slot-
controlled periods, hourly and daily limits for scheduled operations, 
hourly limits for unscheduled operations, and the general processes 
that would be used to allocate slots or reservations for scheduled and 
unscheduled flights. It also identifies differences between the five 
potential alternatives for a secondary market to buy, sell, lease, or 
otherwise transfer slots between carriers and introduces a review of 
slot transfer transactions for significant anti-competitive effect.

                                      Current Orders for JFK, EWR, and LGA
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             Feature                          JFK                        EWR                       LGA
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Slot Base........................  Seasonal slot holdings,    Seasonal slot holdings,   Slot holdings, as
                                    as approved by the FAA.    as approved by the FAA.   approved by the FAA.
Slot (called Operating             Operational authority to   Operational authority to  Operational authority to
 Authorization under the Orders).   conduct an arrival or      conduct an arrival or     conduct an arrival or
                                    departure operation on a   departure operation on    departure operation
                                    particular day of the      a particular day of the   during a specific 30-
                                    week during a specific     week during a specific    minute period.
                                    30-minute period.          30-minute period.
Slot-controlled hours............  Daily: 0600 to 2259,       Daily: 0600 to 2259,      M-F: 0600 to 2159,
                                    Eastern time.              Eastern time.             Eastern time
                                                                                        Su: 1200 to 2159,
                                                                                         Eastern time.
Hourly slot limits...............  81 per hour or in any 60-  81 per hour or in any 60- 71 per hour or in any 60-
                                    minute period.             minute period.            minute period.
                                  ------------------------------------------------------------------------------
Daily slot limits................  Not formally set but based on accepted schedules and modeled delay when
                                    Orders adopted.
                                  ------------------------------------------------------------------------------
Hourly unscheduled operations      None.....................  None....................  3.
 limits.
Unscheduled operations             None.....................  None....................  Reservations available
 reservation system.                                                                     through the Enhanced
                                                                                         Computer Voice
                                                                                         Reservation System (e-
                                                                                         CVRS) 72 hours in
                                                                                         advance; reservations
                                                                                         for certain public
                                                                                         charter operations
                                                                                         available through the
                                                                                         Slot Administration
                                                                                         Office 6 months in
                                                                                         advance.
Allocation of slots..............  Adapted from IATA WSG....  Adapted from IATA WSG...  Lottery.
Scheduling season................  IATA WSG.................  IATA WSG................  Slot usage reporting on
                                                                                         bimonthly basis.
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Use-or-lose......................  Must use allocated slot 80% of the time throughout the previous corresponding
                                    season; waiver for highly unusual and unpredictable condition lasting 5 or
                                    more consecutive days; waiver for Thanksgiving, the Friday after
                                    Thanksgiving, and the period from December 24 through the first Sunday of
                                    January.
Secondary market.................  Privately-negotiated lease and trade that extend no longer than terms of
                                    Order; request for FAA approval.
Logistical slot swaps............  Permitted.
Competitive review...............  None.
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                                    Proposed Regulation for JFK, EWR, and LGA
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             Feature                          JFK                        EWR                       LGA
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Slot Base........................  Seasonal slot holdings, as approved by the FAA.
Slot.............................  Operational authority to conduct an arrival or departure operation on a
                                    particular day of the week during a specific 30-minute period.
                                  ------------------------------------------------------------------------------
Slot-controlled hours............  Daily: 0600 to 2259,       Daily: 0600 to 2259,      M-F: 0600 to 2159,
                                    Eastern time.              Eastern time.             Eastern time
                                                                                        Su: 1200 to 2159,
                                                                                         Eastern time.
Hourly slot limits...............  81 per hour or in any 60-  81 per hour or in any 60- 71 per hour or in any 60-
                                    minute period and 44 in    minute period and 44 in   minute period and 38 in
                                    any 30-minute period.      any 30-minute period.     any 30-minute period.
Daily slot limits................  1205 for hours 0600 to     1205 for hours 0600 to    1136.
                                    2159.                      2159.
Hourly unscheduled operations      2........................  1.......................  3.
 limits.
                                  ------------------------------------------------------------------------------
Unscheduled operations             Reservations available through the e-CVRS 72 hours in advance; reservations
 reservation system.                for certain public charter operations available through Slot Administration
                                    Office 6 months in advance.
Allocation of slots..............  Adapted from IATA WSG.
Scheduling season................  IATA WSG.
Use-or-lose......................  Must use allocated slot 80% of the time for the same flight or series of
                                    flights throughout the previous corresponding season; waiver for strike;
                                    waiver for highly unusual and unpredictable condition lasting 5 or more
                                    consecutive days; waiver for slot allocation or acquisition by new entrant
                                    carrier.
Secondary market (Alternative 1).  Privately-negotiated buy, sell, lease, and trade without prior public notice;
                                    request for FAA approval must include terms of transaction; terms of final
                                    transaction posted on the FAA Web site.
Secondary market (Alternative 2).  FAA publishes a bulletin board notice of buy, sell, lease, and trade; bidding
                                    and negotiation between seller and bidders after public notice; request for
                                    FAA approval must include terms of transaction; terms of final transaction
                                    posted on the FAA Web site.
Secondary market (Alternative 3).  FAA publishes a bulletin board notice of buy, sell, lease, and trade;
                                    negotiations prior to public notice permitted; bidding and negotiation
                                    between seller and bidders; request for FAA approval must include terms of
                                    transaction; terms of final transaction posted on the FAA Web site.
Secondary market (Alternative 4).  FAA publishes a bulletin board notice of buy, sell, lease, and trade; bids
                                    posted on bulletin board; request for FAA approval must include terms of
                                    transaction; terms of final transaction posted on the FAA Web site.
Secondary market (Alternative 5).  FAA publishes a bulletin board notice of buy, sell, and lease without
                                    identifying poster; cash-only bids posted on bulletin board without
                                    identifying bidders; seller must accept highest bid; request for FAA
                                    approval must include terms of transaction; terms of final transaction
                                    posted on the FAA Web site.
Logistical slot swaps............  Permitted.
Competitive/Public Interest        Performed by DOT based on submitted transaction terms; DOT has 14 days to
 review.                            decide whether to review transaction; DOT approval or non-objection required
                                    for FAA approval of transfer.
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    The FAA developed this analysis using 2009 data to model the 
behaviors of carriers based on meeting the minimum requirement of the 
proposed rule. Under this assumption, carriers would incrementally 
increase actual operations in year one to meet the new usage 
requirement, and this new operating level would grow by the FAA's 
Terminal Area Forecast (TAF) until it reached the daily limits. The 
analysis period is the first year because compliance cost is the 
highest in that year, and if benefits exceed the cost in the first 
year, this relationship will continue until passenger demand forces 
operations up to 100% of the available slots. In the first year, 
carrier utilization of slots will be at least 80%. Thereafter, 
increases in operations and slot utilization are a result of an 
increase in forecasted demand. Assuming the highest cost secondary 
market alternative (either alternative four or five) is adopted, the 
total benefits and costs are estimated at $74,696,596 ($65,242,900 
Present Value at 7%) for benefits and $53,056,768 ($46,341,836 Present 
Value at 7%) for costs. These costs and benefits result from the 
changed behavior concerning use-or-lose, secondary market, and 
reporting requirements under this proposal as compared to current 
behavior under the existing Orders for each airport. Moreover, the FAA 
believes that this rule would improve utilization of existing slots, 
possibly increase a carrier's penalty for retaining slots of limited 
value and thus result in the return of some slots, and would result in 
net benefits.

[[Page 1277]]

                    Total Cost and Benefits of Alternatives Four or Five of the Proposed Rule
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                                                   Present value                   Present value
           First year                Benefits          (7%)            Costs           (7%)        Net benefits
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Regulatory Case.................     $74,696,596     $65,242,900     $53,056,768     $46,341,836     $18,901,064
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II. Background

A. The High Density Rule and AIR-21

    To manage airspace congestion, in 1968, the FAA adopted the High 
Density Rule (HDR), which limited take-offs and landings at JFK, EWR, 
LGA, Washington National Airport (DCA), and Chicago O'Hare 
International Airport (ORD).\2\ In 1970, the FAA suspended the HDR's 
application at EWR because airport capacity could meet demand.\3\ To 
operate during the slot-controlled hours, a flight needed a 
reservation, commonly known as a ``slot.'' The HDR divided the 
allowable slots by categories of users (i.e., air carriers other than 
air taxis, scheduled air taxis, and others).\4\ These reservations 
applied to both scheduled and unscheduled (i.e., ``Other'') operations. 
While LGA, DCA, and ORD were constrained throughout much of the day, 
JFK was constrained for only 5 hours from 1500 through 1959, Eastern 
Time.
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    \2\ 33 FR 17896 (Dec. 3, 1968) (codified at 14 CFR part 93 
subpart K).
    \3\ 35 FR 16591 (Oct. 24, 1970).
    \4\ 33 FR 17896 (Dec. 3, 1968).
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    Under the HDR, air carrier slots were allocated through airline 
scheduling committees, operating under then-authorized antitrust 
immunity, and the airlines would agree to the allocation. The FAA's 
role was limited to determining how many operations air traffic control 
(ATC) could reasonably handle during congested periods and enforcing 
operator compliance with the rules. After the Airline Deregulation Act 
in 1978, new entrant airlines sought access to, and legacy carriers 
sought expansion at, slot-controlled airports. This increased 
competition made it more difficult for airlines to reach agreement on 
slot allocation, and the scheduling committees began to deadlock. The 
Civil Aeronautics Board or DOT periodically stepped in to resolve the 
deadlocks. In resolving a 1980 deadlock at DCA, the DOT divested a 
small percentage of slots from incumbent airlines and reallocated them 
to a requesting new entrant. The DOT noted that additional reduced fare 
service was likely to increase competition and thus be consistent with 
the general pro-competitive policy of the Airline Deregulation Act of 
1978.\5\ The U.S. Court of Appeals upheld the DOT's action on review 
following an airline challenge.\6\
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    \5\ SFAR 43, 45 FR 72637 (Nov. 3, 1980).
    \6\ Northwest Airlines, Inc. v. Goldschmidt, 645 F.2d 1309 (8th 
Cir. 1981).
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    In 1981, the FAA responded to a nationwide shortage of air traffic 
controllers by reducing the level of air traffic operations and 
imposing slot controls on the nation's 22 busiest airports.\7\ Through 
that experience, the FAA implemented new allocation and slot management 
methods. In 1982, the FAA utilized a lottery allocation and imposed a 
minimum usage requirement for the first time.\8\ Also in 1982, the FAA 
implemented an experimental ``Buy/Sell'' program, permitting transfers 
of slots in any number and for any consideration, to provide for 
``adjustments in slot assignments that may be occasioned by seasonal 
variation in demand, competitive pressures, or economic decisions of 
the carriers'' and to increase flexibility of the slot allocation 
system.\9\ For the 6 weeks the ``Buy/Sell'' program was in place, 
approximately 190 slots were transferred by sale among carriers.\10\ 
Thereafter, the FAA no longer permitted slot sales (though trades 
continued to be permitted) because the necessity for slots was 
diminishing as the ATC system was being restored.\11\
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    \7\ See SFAR 44, 46 FR 39606 (Aug. 4, 1981); SFAR 44-1, 46 FR 
44424 (Sept. 4, 1981); SFAR 44-2, 46 FR 48906 (Oct. 5, 1981). Those 
were then William B. Hartsfield Atlanta International Airport, 
Boston's Logan International Airport, ORD, Cleveland Hopkins 
International Airport, then Dallas/Fort Worth Regional Airport, 
Denver's Stapleton International Airport, Detroit Metropolitan Wayne 
County Airport, Fort Lauderdale-Hollywood International Airport, 
then Houston Intercontinental Airport, Kansas City International 
Airport, JFK, LGA, Las Vegas' McCarran International Airport, Los 
Angeles International Airport, Miami International Airport, 
Minneapolis/St. Paul International Airport, EWR, Philadelphia 
International Airport, Pittsburgh International Airport, San 
Francisco International Airport, Lambert-St. Louis International 
Airport, and DCA. SFAR 44-3, 47 FR 7816 (Feb. 22, 1982).
    \8\ SFAR 44-3, 47 FR 7816 (Feb. 22, 1982).
    \9\ 47 FR 19989 (May 10, 1982).
    \10\ 47 FR 29814 (Jul. 8, 1982).
    \11\ Id. at 29815.
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    The FAA established more permanent allocation procedures for slots 
under the HDR in 1985 when it adopted the Buy/Sell Rule, which allowed 
carriers to buy, sell, lease, and trade most slots.\12\ In a companion 
rulemaking to the Buy/Sell Rule, the FAA provided for the withdrawal of 
up to five percent of slots at slot-controlled airports through a 
reverse lottery to provide a pool of slots for new entrants and limited 
incumbents.\13\ The Buy/Sell Rule included use-or-lose provisions and 
explicitly stated slots were an operating privilege and not the 
carriers' property.
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    \12\ 50 FR 52195 (Dec. 20, 1985).
    \13\ SFAR 88, 51 FR 8630 (Mar. 12, 1986).
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    For the next 15 years the agency relied primarily on the secondary 
market authorized by the Buy/Sell Rule to address access issues at HDR 
airports, particularly for domestic operations. However, carriers 
without a substantial presence at HDR airports increasingly criticized 
the Buy/Sell Rule because their access to slot-controlled airports was 
severely limited. Those carriers complained to the FAA that 
grandfathering 95 percent of slots at slot-controlled airports to 
incumbent carriers left insufficient capacity available for 
reallocation. Carriers further criticized the Buy/Sell Rule for failing 
to foster a robust secondary market and complained about a lack of 
transparency that permitted private transactions arranged to reduce 
competition. Some carriers also complained they were unaware of slots 
potentially available for sale or lease even when they were seeking to 
initiate or expand service. Finally, a small number of carriers 
contended they were effectively denied access to the airports because 
their competitors refused to sell slots or provide meaningful lease 
terms.
    In 1994, Congress began to relax the HDR by authorizing the 
Secretary, upon making a public interest finding, to grant exemptions 
from the HDR to enable new entrant carriers \14\ to provide air 
transportation at certain slot-controlled airports, including JFK and 
LGA.\15\ At JFK, the DOT granted 75 slot exemptions to new entrant 
carrier JetBlue Airways (JetBlue) under this authority in 1999, which 
were phased in over a 5-year period.\16\ The order stated

[[Page 1278]]

that JetBlue would operate the majority of its flights outside the 5 
HDR slot-controlled hours. The Secretary also granted 30 slot 
exemptions at LGA to new entrant carriers.
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    \14\ The term ``new entrant carrier'' was defined as ``an air 
carrier that does not hold a slot at the airport concerned and has 
never sold or given up a slot at that airport after December 16, 
1985, and a limited incumbent carrier.'' 49 U.S.C. 41714(h)(3).
    \15\ Pub. L. 103-305 Sec.  206(a)(1) (Jan. 25, 1994) (codified 
at 49 U.S.C. 41714).
    \16\ Application of New Air Corporation for Exemption from 14 
CFR part 93, subparts K and S of 49 U.S.C. 41714(c), Order 99-9-11 
(Sep. 16, 1999).
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    On April 5, 2000, Congress enacted the Wendell H. Ford Aviation and 
Investment Reform Act of the 21st Century (AIR-21).\17\ AIR-21 phased 
out and terminated the HDR at JFK, LGA, and ORD.\18\ In phasing out the 
HDR, AIR-21 directed the Secretary to grant two types of exemptions 
from the HDR's flight restrictions at LGA and JFK. The first type of 
exemption was designed to promote more competition at slot-controlled 
airports and required the Secretary to grant exemptions to a new 
entrant or limited incumbent, defined as a carrier holding fewer than 
20 slots or slot exemptions.\19\ 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.\20\ AIR-21 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.'' \21\
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    \17\ Pub. L. 106-181.
    \18\ Congress directed the HDR phase-out for JFK and LGA by 
January 1, 2007. 49 U.S.C. 41715(a)(2). Congress directed the HDR 
phase-out for ORD by July 1, 2002. 49 U.S.C. 41715(a)(1). AIR-21 did 
not phase out the HDR at DCA, and it remains the only HDR airport.
    \19\ AIR-21 also granted authority for this type of exemption at 
DCA and ORD.
    \20\ AIR-21 also granted authority for this type of exemption at 
ORD.
    \21\ 49 U.S.C. 41715(b).
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B. LaGuardia Airport After AIR-21

    LGA, which provides almost exclusively domestic service,\22\ 
consistently has been one of the most congested airports in the nation. 
Its proximity to midtown Manhattan makes it a desirable airport for 
many travelers, and airlines attempt to meet that demand by operating 
many flights to LGA. Physical constraints of the airfield limit the 
ability to expand capacity.
---------------------------------------------------------------------------

    \22\ The Port Authority of New York and New Jersey limits the 
distance to which commercial flights may operate on a nonstop basis.
---------------------------------------------------------------------------

    The slot exemptions mandated by Congress under AIR-21 facilitated 
access for new entrants and small community service at LGA, but the 
trade-off for this service was increased airport congestion and delays. 
By fall 2000, carriers had added over 300 new scheduled flights at LGA 
and had plans to operate even more, resulting from more than 600 
exemption requests. While the number of allowable scheduled operations 
under the HDR remained constant at 62 per hour, the actual number of 
scheduled operations rose to over 100 in several hours with the 
additional AIR-21 slot exemptions. With no new airport infrastructure, 
overall airport capacity remained the same while the number of aircraft 
operations and delays soared. Additional operations following AIR-21 
resulted in significantly higher delays at LGA than existed before 
2000. The average minutes of delay for all arriving flights at LGA 
increased 144% from 15.52 minutes in March 2000 (the month before AIR-
21 was enacted) to 37.86 minutes in September 2000.\23\ The increase in 
delay as a result of AIR-21 was not limited to delays at LGA. Flights 
that arrived and departed late at LGA affected flights at other 
airports and in the national airspace system (NAS). By September 2000, 
flight delays at LGA accounted for 25 percent of the nation's delays, 
compared to 10 percent for the previous year.\24\
---------------------------------------------------------------------------

    \23\ FAA Aviation System Performance Metrics (ASPM).
    \24\ Calculated from the FAA's Air Traffic Operations Network 
Database (OPSNET).
---------------------------------------------------------------------------

    Using its authority under 49 U.S.C. 40103, and pending the 
development of a long-term solution, the FAA published a Notice of 
Intent in the Federal Register on November 15, 2000, announcing its 
intent to temporarily limit AIR-21 slot exemptions at LGA and to 
allocate them via a lottery.\25\ The lottery, which was conducted on 
December 4, 2000, was premised on the imposition of an airfield and 
airspace capacity management limit of 75 scheduled operations per hour 
(plus six unscheduled operations primarily used by the general aviation 
community) beginning January 31, 2001.\26\ This limit still allowed a 
significant increase in operations at the airport above the HDR's 
regulatory limits, thus serving Congressional objectives while 
stretching capacity to its practical limits. The number of AIR-21 slot 
exemptions at LGA was restricted to a total of 159 a day between the 
hours of 0700 and 2159. As a result of the hourly restrictions, the 
average number of aircraft delays at LGA fell from 330 per day in 
October 2000 to 98 per day in April 2001.
---------------------------------------------------------------------------

    \25\ 65 FR 69126 (Nov. 15, 2000).
    \26\ 65 FR 75765 (Dec. 4, 2000).
---------------------------------------------------------------------------

    Under AIR-21, slots allocated under the HDR at LGA were scheduled 
to expire on January 1, 2007. Based on its experience in 2000, the FAA 
determined that simply lifting the HDR at LGA would result in a 
significant increase in delays and adversely impact the airspace around 
New York City and the NAS as a whole.
    In August 2006, the FAA published a notice of proposed rulemaking 
(LGA NPRM) proposing a continuation of the existing cap of 75 scheduled 
and six unscheduled hourly operations as well as a new method of 
allocating capacity.\27\ 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 was designed to maximize passenger 
throughput consistent with the airport's physical constraints. The FAA 
also proposed to implement a limit on the duration of slots that would 
assure 10 percent of the capacity at the airport would be available 
annually for reallocation by the FAA.
---------------------------------------------------------------------------

    \27\ 71 FR 51360 (Aug. 29, 2006).
---------------------------------------------------------------------------

    The FAA recognized that it would be unable to complete its 
rulemaking by January 1, 2007, when the HDR was scheduled to expire. 
After providing for notice and comment, the agency published an FAA 
Order Operating Limitations at New York LaGuardia Airport (LGA 
Order).\28\ The LGA Order retained the existing limit of 75 scheduled 
operations and a reservation system for unscheduled operations that 
permitted six unscheduled operations per hour. The LGA Order did not 
distinguish between operations conducted pursuant to HDR slots and AIR-
21 slot exemptions; rather, flights conducted pursuant to exemptions 
were included in the hourly cap without restriction. The slots and 
exemptions were grandfathered to the then-current holder as ``Operating 
Authorizations.'' The LGA 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 terms of the LGA Order or the FAA's 
authority to re-impose caps at the airport following the expiration of 
the HDR.
---------------------------------------------------------------------------

    \28\ 71 FR 77854 (Dec. 27, 2006). The LGA Order was amended on 
November 8, 2007 (72 FR 63224), on August 19, 2008 (73 FR 48428), on 
January 15, 2009 (74 FR 2646), on October 7, 2009 (74 FR 51653), on 
April 4, 2011 (76 FR 18616), on May 14, 2013 (78 FR 28278), and on 
March 27, 2014 (79 FR 17222).
---------------------------------------------------------------------------

    In August 2008, the FAA reduced the number of reservations 
available for unscheduled operations at LGA from six

[[Page 1279]]

to three.\29\ In January 2009, the FAA reduced the limits on scheduled 
operations to 71 per hour.\30\ Although the FAA did not withdraw 
Operating Authorizations to reach 71 operations, it stated it would 
retire any returned Operating Authorizations to reach that limit. These 
two actions were intended to further reduce congestion and delays at 
LGA.
---------------------------------------------------------------------------

    \29\ 73 FR 48428 (Aug. 19, 2008).
    \30\ 74 FR 2646 (Jan. 15, 2009).
---------------------------------------------------------------------------

C. John F. Kennedy International Airport After AIR-21

    Until recently, most operations at JFK took place during relatively 
pronounced arrival and departure banks corresponding to the operating 
windows of transatlantic flights. The FAA accommodated those banks and 
achieved maximum efficiency by using either two arrival runways and one 
departure runway, or two departure runways and one arrival runway. Air 
traffic controllers have employed that configuration to facilitate the 
historical transatlantic traffic flows.
    Beginning in the spring of 2006, U.S. air carriers serving JFK 
significantly increased their domestic scheduled operations throughout 
the day, changing the historical arrival and departure patterns. For 
example, the traditional transatlantic arrival and departure periods 
now have significant levels of departing and arriving flights, 
respectively. While demand is somewhat more balanced, some loss of 
efficiency associated with a two-arrival or two-departure runway 
configuration has resulted.
    While operations at LGA remained capped throughout 2007, caps on 
afternoon operations at JFK were lifted on January 1, 2007, when the 
HDR expired at that airport. Operations at JFK already had begun to 
increase during the morning hours, but the increase in operations in 
the afternoon hours soon led to long delays, especially for departing 
flights during the evening transatlantic departure bank.
    During fiscal year 2007, the average daily operations at JFK 
increased 21 percent over fiscal year 2006. At the same time, on-time 
performance and other delay metrics declined year over year. The on-
time performance at JFK, which is defined as the arrival at the gate 
within 15 minutes of the scheduled time, declined from 68.5 percent in 
fiscal year 2006 to 62.19 percent in fiscal year 2007. On-time arrivals 
during the peak travel months of June, July, and August declined from 
63.37 percent in 2006 to 58.89 percent in 2007, while on-time 
departures declined from 67.49 percent to 59.89 percent during that 
period. For fiscal year 2007, the average daily arrival delays 
exceeding 1 hour increased by 87 percent over fiscal year 2006 levels. 
Additionally, taxi-out delays, which measure the time that aircraft 
wait prior to departing the runway, increased by 15 percent. Taxi-out 
delays in the evening departure periods frequently exceeded 1 hour in 
duration.
    In September 2007, the FAA re-designated JFK as a Level 2 Schedules 
Facilitated Airport \31\ for the summer 2008 scheduling season in 
accordance with the WSG.\32\ Under the WSG, carriers must inform the 
schedules facilitator of projected operations at a Level 2 airport for 
the next scheduling season. When submitting the required information, 
the airlines expressed their intent to add new flights at JFK during 
peak and off-peak hours for summer 2008.
---------------------------------------------------------------------------

    \31\ An airport is designated an IATA Level 2 Schedules 
Facilitated Airport when demand is approaching capacity, and a more 
formal level of cooperation is required to avoid the circumstances 
of over-capacity. At a Level 2-designated airport, a schedules 
facilitator seeks the cooperation and voluntary agreement of 
carriers serving the airport to avoid congestion.
    \32\ 72 FR 54317 (Sept. 24, 2007).
---------------------------------------------------------------------------

    Also in September 2007, the Secretary and the Administrator 
determined that a delay reduction meeting was necessary to discuss 
flight reductions with U.S. air carriers to reduce over-scheduling and 
flight delays at JFK during peak operating hours.\33\ On October 22, 
2007, the FAA opened a docket for information on the establishment of 
flight reduction targets at JFK during peak hours.\34\ To address 
increases in demand by U.S. and foreign air carriers and to provide a 
process for schedule actions, the FAA designated JFK a Level 3 
Coordinated Airport.\35\
---------------------------------------------------------------------------

    \33\ Under 49 U.S.C. 41722, the Secretary may request a delay 
reduction meeting if ``(1) the Administrator determines that it is 
necessary to convene such a meeting; and (2) the Secretary 
determines that the meeting is necessary to meet a serious 
transportation need or achieve an important public benefit.''
    \34\ 72 FR 59579 (Oct. 22, 2007).
    \35\ 72 FR 60710 (Oct. 25, 2007). When demand for an airport 
exceeds capacity, voluntary cooperation is unlikely to resolve the 
problem, and short-term capacity enhancements are not available, an 
airport may be designated as an IATA Level 3 to inform airlines that 
scheduling increases may be disallowed.
---------------------------------------------------------------------------

    To address the projected increased demand for summer 2008 and the 
previous over-scheduling in summer 2007 when the airport lacked 
scheduling limits, the FAA convened a scheduling reduction meeting on 
October 23-24, 2007. The FAA's goal was to obtain voluntary schedule 
reductions from historically operated and planned flights. Subsequent 
in-person and telephonic meetings took place as well. American 
Airlines, Delta Air Lines, and JetBlue, which together accounted for 
three-quarters of the total JFK operations, withdrew the schedule 
increases each had proposed for summer 2008 during the airport's 1500 
to 1959 peak hours. They also adjusted the timing of operations 
throughout the day to smooth out peaks. Other airlines agreed to retime 
peak operations. Consequently, the FAA was able to offer additional 
operations during non-peak hours, which increased the daily total of 
operations while decreasing delays over the previous summer season. As 
a result of the agreements reached at that meeting and other 
discussions held with carriers regarding their planned summer 2008 
schedules, the FAA issued a temporary Order limiting scheduled 
operations at JFK to 81 per hour from 0600 to 2259 (JFK Order).\36\ 
That temporary Order allocated slots to carriers operating at the 
airport based on the number and timing of operations negotiated during 
the schedule reduction meetings. Because the schedule reductions were 
voluntary, slot allocations in some hours exceeded 81. The Order 
permits the FAA to retire slots that exceed the hourly limit if those 
slots are returned to the FAA until the slot limit is reached. On 
February 14, 2008, the FAA amended the JFK Order to modify the use-or-
lose provisions so that they would correspond to the WSG.\37\ The JFK 
Order temporarily responds to the carriers' desire to schedule 
operations above the airport's capacity during peak operating hours, 
relieves the substantial inconvenience to the traveling public caused 
by excessive congestion-related flight delays at the airport (which 
rippled through the NAS), reduces the average length of delays, 
improves carriers' ability to plan operations and network connections, 
and provides for more efficient use of airspace.
---------------------------------------------------------------------------

    \36\ 73 FR 3519 (Jan. 18, 2008), as amended by 73 FR 8737 (Feb. 
14, 2008), 74 FR 51650 (Oct. 7, 2009), 76 FR 18620 (Apr. 4, 2011), 
78 FR 28276 (May 14, 2013), and 79 FR 16854 (Mar. 26, 2014).
    \37\ 73 FR 8737.
---------------------------------------------------------------------------

    In July 2008, the FAA proposed to limit unscheduled operations at 
JFK to two hourly reservations from 0600 through 1359, to one hourly 
reservation from 1400 through 2159, and to two from 2200 through 2259 
at JFK.\38\ The FAA never adopted that proposed Order, but the 
unscheduled limits were incorporated in the 2008 Congestion Management 
Rule for JFK and EWR, which is discussed later.
---------------------------------------------------------------------------

    \38\ 73 FR 41156 (Jul. 17, 2008).

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[[Page 1280]]

D. Congestion at Newark Liberty International Airport

    EWR has grown to be one of the most delay-prone airports in the 
country. In 2007, demand during peak hours approached or exceeded the 
average runway capacity, resulting in significant volume-related 
delays. These delays were aggravated by weather or other adverse 
operating conditions.
    Comparing fiscal year 2007 to fiscal year 2000, the percent of on-
time gate arrivals decreased from 70.66 percent to 61.71 percent, and 
arrival delays greater than one hour increased, on average, from 54 to 
93 per day. EWR's on-time arrival performance of 61.8 percent was the 
second worst among the 35 busiest airports. Based on ``the airport's 
performance metrics and imbalance between ATC capacity and demand that 
is expected to continue in the near term,'' the FAA designated EWR a 
Level 2 IATA Schedules Facilitated Airport for the summer 2008 
scheduling season.\39\ The FAA explained that ``increased levels of air 
traffic operations, congestion and delay at [both JFK and EWR] and a 
tangible decrease in operational performance'' warranted this 
designation.\40\ The FAA found the peak morning and afternoon hours 
were particularly congested, but that capacity otherwise was available 
for retiming of flights or new operations.
---------------------------------------------------------------------------

    \39\ 72 FR 54317 (Sept. 24, 2007).
    \40\ Id.
---------------------------------------------------------------------------

    The information provided by carriers for the summer 2008 scheduling 
season reflected a projected increase in flight schedules, especially 
during the peak hours. U.S. and foreign carriers had planned about 100 
new operations per day at EWR, many during the afternoon and early 
evening hours. For several consecutive hours, the number of hourly 
arrivals and departures would have reached between the upper 80s and 
mid-90s. These operations would have significantly exceeded the 
airport's average of 83 total operations per hour over the 12-month 
period ending August 2007. These additional flights would have caused a 
spike in congestion and delays at EWR and also would have adversely 
affected other airports in the New York-New Jersey region and the NAS.
    In the autumn of 2007, the FAA found it necessary to informally 
discuss summer 2008 schedules with carriers operating at EWR because it 
was concerned proposed operations would cause excessive congestion-
related delays. Modeling indicated a potential delay increase of almost 
50 percent if the scheduled flights were operated as planned. The FAA 
asked carriers to consider scheduling flights at times when there was 
available capacity. However, the FAA realized some carriers intended to 
proceed with their plans to begin operating their proposed schedules 
during the busiest hours, regardless of the potential impact on delay. 
The FAA also believed limiting operations at JFK would create a 
spillover effect at EWR, thus exacerbating historical and projected 
delays. To prevent carriers from adding flights to already 
oversubscribed hours at EWR and from shifting flights from JFK to EWR, 
the FAA designated EWR as a Level 3 Coordinated Airport effective for 
summer 2008.\41\ After the designation, a series of discussions with 
the FAA led some carriers to move a few of their historical flights 
from the most oversubscribed hours. The movement of these flights 
permitted addition of a few new entrant operations without a net 
increase in delays.
---------------------------------------------------------------------------

    \41\ 72 FR 73418 (Dec. 27, 2007).
---------------------------------------------------------------------------

    In May 2008, the FAA placed temporary limits on peak hour 
operations at EWR to mitigate persistent congestion and delays at the 
airport (EWR Order).\42\ The EWR Order limited scheduled operations 
during constrained hours to an average of 81 per hour.\43\ That 
temporary Order allocated slots to carriers operating at the airport 
based on the number and timing of operations negotiated during the 
schedule discussions. Because the schedule reductions and retimings 
were voluntary, slot allocations in some hours exceeded 81. The Order 
permits the FAA to retire slots that exceed the hourly limit if those 
slots are returned to the FAA until the slot limit is reached. The 
provisions regarding the use of the WSG for use-or-lose mirrored those 
in place for JFK. In July 2008, the FAA proposed to limit unscheduled 
operations at EWR to two hourly reservations from 0600 through 1159, to 
one hourly reservation from 1200 through 2159, and two from 2200 
through 2259.\44\ The FAA never adopted that proposed Order, but the 
unscheduled limits were incorporated in the 2008 Congestion Management 
Rule for JFK and EWR, which is discussed later.
---------------------------------------------------------------------------

    \42\ 73 FR 29550 (May 21, 2008), as amended by 74 FR 51648 (Oct. 
7, 2009), 76 FR 18618 (Apr. 4, 2011), and 78 FR 28280 (May 14, 
2013), and 79 FR 16857 (Mar. 26, 2014).
    \43\ The appendix to the Order included a few operations for 
summer 2008 above the 81 per hour limit.
    \44\ 73 FR 41156 (Jul. 17, 2008).
---------------------------------------------------------------------------

E. Exploration of Long-Term Congestion Management

    Following the enactment of AIR-21, the FAA and the DOT began 
investigating a long-term congestion management plan for the New York 
City area airports. In June 2001, the FAA published a variety of 
congestion management alternatives for public comment, including the 
use of auctions, congestion pricing, and administrative 
alternatives.\45\ Additionally, the FAA and the DOT, in conjunction 
with the National Center of Excellence for Aviation Operations Research 
(NEXTOR), conducted research initiatives of these alternatives.
---------------------------------------------------------------------------

    \45\ 66 FR 31731 (Jun. 12, 2001).
---------------------------------------------------------------------------

    The level of interest in a long-term plan increased as the sunset 
of the HDR neared and following the experience of increased operations 
at the airports. Nationally, the summer of 2007 was the second worst on 
record for flight delays. Delays impacted all three New York City area 
airports and cascaded throughout the NAS. On September 27, 2007, the 
Secretary announced the formation of the New York Aviation Rulemaking 
Committee (NYARC) to help the DOT and FAA explore available options for 
congestion management and how changes to current policy for JFK, EWR, 
and LGA would affect the airline access and utilization of the 
airports.
    The NYARC was designed to provide opportunity for extensive input 
by all stakeholders, having members from every major U.S. air carrier, 
several foreign carriers, associations representing different aviation 
interests, and the Port Authority of New York and New Jersey (Port 
Authority). The NYARC submitted a report of its findings and 
recommendations to the Secretary, dated December 13, 2007.\46\
---------------------------------------------------------------------------

    \46\ A copy of the ARC Report may be found at http://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/NY.ARC.Final.Report.20071213.pdf. The report contained 
recommendations for operational improvements for the airports and 
associated airspace; discussed the use of market-based systems to 
allocate airport capacity at the airports; explored a gate 
utilization system at LGA proposed by the Port Authority; explored a 
US Airways proposal to relax the LGA perimeter rule; examined 
priority air traffic preferences; and considered the adoption of 
IATA WSG at the airports.
---------------------------------------------------------------------------

    The increased congestion and associated delays at JFK, EWR, and LGA 
impact each other and the NAS. The airspace redesign for the New York/
New Jersey/Philadelphia metropolitan area, approved in 2007, documents 
the costs and far-reaching impacts of delays that originate from this 
area.\47\ Implementing

[[Page 1281]]

airspace redesign will provide increased efficiency and congestion 
relief by, among other things, opening additional arrival and departure 
routes in the New York City area, and the FAA has begun that process.
---------------------------------------------------------------------------

    \47\ See http://www.faa.gov/air_traffic/nas_redesign/regional_guidance/eastern_reg/nynjphl_redesign/documentation/.
---------------------------------------------------------------------------

    Further, the FAA continues to work with stakeholders to implement 
short-term initiatives to improve the efficiency of airport operations 
and air traffic control, particularly during severe weather. 
Additionally, the FAA has increased the use of a second departure 
runway at JFK when conditions permit. However, none of these 
initiatives offer an immediate or complete solution.

F. Congestion Management Rules of 2008

    With the three temporary Orders limiting operations in place, the 
FAA determined to pursue a long-term solution for limiting operations 
and allocating slots for all three airports. After evaluating comments 
to the LGA NPRM and input from the NYARC, the FAA decided not to adopt 
its earlier proposal to require upgauging aircraft size and to 
reallocate 10 percent of the existing capacity each year. Instead, the 
FAA published a supplemental notice of proposed rulemaking (LGA SNPRM) 
in April 2008.\48\ The LGA SNPRM proposed to allocate the majority of 
slots to historical operators. The agency also proposed to develop a 
robust market and encourage competition by withdrawing some slots and 
auctioning them during the first 5 years of the rule. The LGA SNPRM 
would have allocated any new or returned capacity via auctions. 
Finally, the FAA proposed to sunset the rule in 10 years.
---------------------------------------------------------------------------

    \48\ 73 FR 20846 (Apr. 17, 2008).
---------------------------------------------------------------------------

    In conjunction with the LGA SNPRM, the FAA published an NPRM for 
JFK and EWR that sought to provide a longer-term solution and address a 
number of congestion-related issues (JFK/EWR NPRM).\49\ Similar to the 
LGA SNPRM, the FAA proposed to continue the hourly limits on flight 
operations at JFK and EWR, and to allocate the majority of slots at 
each airport to the historical operators. Similar to the proposal in 
the LGA SNPRM, the agency proposed to develop a robust market and 
induce competition by annually auctioning a limited number of slots 
during the first 5 years of the rule. Given the significant 
international presence at both airports, the JFK/EWR NPRM proposed to 
use WSG procedures instead of auctions to allocate new or returned 
capacity. Additionally, the JFK/EWR NPRM contained provisions for 
adoption of the WSG for use-or-lose, historic precedence, unscheduled 
operations, and slot withdrawal for operational needs. The FAA proposed 
to sunset the rule in 10 years.
---------------------------------------------------------------------------

    \49\ 73 FR 29626 (May 21, 2008).
---------------------------------------------------------------------------

    The FAA issued a final rule for JFK and EWR, which was consistent 
with the JFK/EWR NPRM, in October 2008 with a published effective date 
of December 9, 2008.\50\ The FAA issued a final rule for LGA, which was 
consistent with the LGA SNPRM, in October 2008 with an effective date 
of December 9, 2008.\51\ Multiple parties challenged these final rules 
under the Administrative Procedure Act, and the U.S. Court of Appeals 
for the District of Columbia Circuit stayed their effectiveness pending 
litigation.\52\ The FAA rescinded both final rules on October 9, 
2009.\53\
---------------------------------------------------------------------------

    \50\ 73 FR 60544 (Oct. 10, 2008), amended by 73 FR 66516 (Nov. 
10, 2008).
    \51\ 73 FR at 60574 (Oct. 10, 2008), amended by 73 FR 66517 
(Nov. 10, 2008).
    \52\ 74 FR 52132 (Oct. 9, 2009) (JFK and EWR); 74 FR 52134 (Oct. 
9, 2009) (LGA).
    \53\ 74 FR 52132 (Oct. 9, 2009) (JFK and EWR); 74 FR 52134 (Oct. 
9, 2009) (LGA). The FAA rescinded the rules because of the 
uncertainty caused by an Omnibus Appropriations Act provision 
prohibiting the agency from conducting slot auctions and the 
possible impact of the significantly changed economic circumstances 
on the slot auction program. Id.; see also Division I, section 115 
of the Omnibus Appropriations Act of 2009, Pub. L. 111-8, 123 Stat. 
115 (Feb. 17, 2009).
---------------------------------------------------------------------------

G. Current Slot Management at LGA, JFK, and EWR

    Currently, the JFK and EWR Orders remain in effect, limiting 
scheduled operations to 81 per hour at each airport, until this 
proposed rule becomes effective.\54\ The LGA Order remains in effect, 
limiting scheduled operations to 71 per hour and unscheduled operations 
to three per hour, until this proposed rule becomes effective.\55\ The 
following tables show a comparison of allocated slots and average 
actual operations for each airport for August 2012.\56\
---------------------------------------------------------------------------

    \54\ 79 FR 16854 (Mar. 26, 2014) (JFK); 79 FR 16857 (Mar. 26, 
2014) (EWR).
    \55\ 79 FR 17222 (Mar. 27, 2014).
    \56\ Allocated slots represent slot allocations for Thursdays 
during August 2012 as reflected in slot records maintained by the 
FAA's Slot Administration Office. For actual operations, an average 
was calculated from Aviation System Performance Metrics (ASPM) data 
for each Thursday during August 2012. The ASPM data used for this 
comparison reflects runway arrival or departure time and may vary 
from a flight's scheduled arrival or departure (slot) time due to 
taxi time or other operational reasons.

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[[Page 1282]]

BILLING CODE 4910-13-P
[GRAPHIC] [TIFF OMITTED] TP08JA15.004

[[Page 1283]]

BILLING CODE 4910-13-C
    JFK and EWR currently have similar demand profiles, with an early 
morning peak followed by lower demand in the mid-morning. Demand then 
approaches the average runway capacity in the early afternoon and 
typically continues until about 2200. LGA, on the other hand, has 
consistently high demand at or above the average runway capacity 
throughout the entire day.
    To determine the scheduling limits and associated delay mitigation 
goals under the Orders, the FAA modeled congestion and delays for each 
airport.\57\ To determine the average adjusted capacity for an airport, 
the FAA considered the airport's capacity to be the higher value of 
either the aircraft throughput at the airport in a given hour or the 
number of arrivals and departures that ATC personnel identified as 
achievable in that hour. As a result, the FAA accepted the higher 
number when the airport's performance exceeded expectations, as well as 
when the airport's potential capacity exceeded demand. This measurement 
reflects the airport's demonstrated and potential performance over time 
under actual meteorological and operational conditions. The FAA 
reviewed weekday operations over a two-year period to capture the 
variables in daily ATC operations. Delay and congestion modeling used 
by the FAA assumes that all flights operate as scheduled. Average 
unscheduled demand is randomized within the hour. These assumptions 
ensure the modeling reflects full utilization of the airport under 
various limits and allows the modeled queuing delay to be measured 
consistently as the scheduling limits are varied against demand. The 
model calculates arrival delay and departure delay relative to 
schedule, mean delay, and delay greater than 0, 15, 60 and 120 minutes. 
The model shows delay by time of day to ensure consideration of peak 
period delays.
---------------------------------------------------------------------------

    \57\ This modeling used an aircraft queuing model produced for 
the FAA by the MITRE Corporation's Center for Advanced Aviation 
System Development (CAASD). When determining airport capacity, delay 
targets, and slot limits, the FAA relies on modeled delay data 
because it establishes the peak of congestion and delays. Modeled 
delay and actual delay may differ because a variety of things occur 
on the day of operation that a model cannot consider (such as not 
scheduled or cancelled operations). Actual delay statistics for 
airports are published by the Office of the Assistant Secretary for 
Research and Technology Bureau of Transportation Statistics and can 
be found at http://www.rita.dot.gov/bts/data_and_statistics/by_mode/airline_and_airports/index.html.
---------------------------------------------------------------------------

    When developing the scheduled and unscheduled limits (of 71 and 3, 
respectively) for LGA, modeling showed a reduction in the scheduled 
limit from 75 to 71 could generate a 41% decrease in mean delays. As 
discussed earlier, the FAA established a limit of 75 in December 2000 
to reduce delays associated with new flights operating under AIR-21 
slot exemptions.\58\ Subsequently the FAA reduced the hourly scheduled 
limit from 75 to 71 to provide an opportunity for delay reduction at 
LGA from voluntary returns or slots failing to meet the minimum usage 
rules.\59\ The FAA did not withdraw operating authority to achieve the 
lower limit, but reserved the authority to retire returned slots 
exceeding the limit.
---------------------------------------------------------------------------

    \58\ These hourly limits were adopted in the LGA Order.
    \59\ In early 2009, the FAA sought voluntary schedule reductions 
from carriers to reduce LGA delays. American Airlines voluntarily 
returned 13 Operating Authorizations in February 2009.
---------------------------------------------------------------------------

    When developing the scheduled limits for JFK, operational analysis 
showed that the average adjusted capacity was steadily increasing over 
time.\60\ Additionally, a procedural change in early 2007 allowed 
departures on Runway 31L beginning at Taxiway KK, thereby providing 
increased runway capacity and reduced departure delays. Modeling for 
JFK used the higher adjusted airport capacity numbers since early 2007, 
rather than over the two-year historical period initially reviewed to 
capture that increased capacity. The FAA conducted discussions with 
carriers to seek voluntary agreement to retime flights at JFK from the 
busiest hours to less congested times when they could be accommodated 
with a lower delay impact. The FAA also restricted carriers from adding 
flights in the peak periods. The FAA's goal was to reduce the peak 
evening departure delays from the summer 2007 average of about 80 
minutes.\61\ The limit of 81 scheduled operations per hour in the JFK 
Order reflected that goal and permitted a margin for unscheduled 
operations.\62\ As a result, modeled peak departure delays decreased to 
about 50 minutes, or by 30 minutes per flight when compared to summer 
2007. As part of the schedule discussions for JFK, the FAA accepted 
some flights that exceeded the scheduling limits but reserved the 
authority to retire returned slots exceeding the limits and work with 
carriers to continue to further depeak their schedules.
---------------------------------------------------------------------------

    \60\ The FAA reviewed JFK's hourly operations over a 2-year 
period, from July 2005 through July 2007. Over the entire period, 
the average adjusted capacity was 77 hourly operations. During the 
first year, from July 2005 through June 2006, the airport had an 
average adjusted capacity of 74 hourly operations. Over the final 6 
months of the period (February 2007 through July 2007), the average 
adjusted capacity increased to 81 hourly operations. Changes in 
capacity can result from a number of factors, and it often is 
difficult to determine the specific cause of the capacity change. 
These factors can include changes in runway configurations, taxiway 
configurations, ground movement procedures, airspace procedures, and 
the interplay of regional demand. The FAA strives to increase 
efficiency of operations at all airports with a specific focus on 
safely and efficiently meeting the daily operational demand.
    \61\ Schedules initially submitted by carriers for summer 2008 
would have increased the evening departure delays to more than 120 
minutes per flight.
    \62\ The Order also adopted an Appendix that contained the 
actual schedules then existing at the airport. In some hours, 
scheduled operations exceeded the limit of 81 scheduled operations.
---------------------------------------------------------------------------

    When developing the scheduled limits for EWR, modeling showed an 
average adjusted capacity of 83 total operations per hour with high 
sustained delays throughout the day. Additionally, the FAA modeled the 
proposed 2008 schedules and projected an even higher level of 
congestion and delays from those proposed schedules with EWR already 
one of the most delay-prone airports in the system. The FAA established 
a goal of no increase in delays at EWR while permitting additional 
operations to the extent practicable. The limit of 81 scheduled 
operations per hour reflected that goal and permitted a margin for 
unscheduled operations.\63\ Although the FAA accepted some flights 
above the hourly limits, it reserved the authority to retire returned 
slots exceeding the limits and work with carriers to depeak their 
schedules.
---------------------------------------------------------------------------

    \63\ The Order also adopted an Appendix that contained the 
actual schedules then existing at the airport. In some hours, 
scheduled operations exceeded the limit of 81 scheduled operations.
---------------------------------------------------------------------------

    The FAA has continued to monitor the three New York City area 
airports since the Orders were put in place to determine whether the 
limits continue to be appropriate. Actual performance in summer 2008 
through 2012 was compared to the modeled projections to ensure that the 
model results were consistent with actual experience. Adjusted airport 
capacity information for 2008 through 2012 was updated. This 
information includes hourly arrival and departure rates based on runway 
configuration, demand, operating conditions, and actual hourly runway 
operations. Peak summer unscheduled demand for each hour between 0600 
and 2259, Eastern time, was reviewed for 2008 through 2011.
    Performance at JFK and EWR has improved in each year when compared 
to summer 2007. In some cases, actual operations were below allocated 
slot levels, and this contributed to delay reduction. However, as 
discussed later in this proposal, underutilization of

[[Page 1284]]

slots at a carrier's discretion also has potential competitive and 
service consequences that must be considered along with delay 
mitigation goals. The 2012 analyses indicated that daily unscheduled 
flights have decreased slightly compared to 2008 while peak morning and 
afternoon demand are similar to 2007. The adjusted airport capacity 
analysis indicated modest changes at EWR and JFK, but the FAA is not 
proposing to change the current scheduling limits. The FAA will 
continue to monitor whether changes in adjusted airport capacity are 
long-term trends that warrant adjustment of the scheduling limits at 
one or more airports.
    During summer 2010, one of the main runways at JFK was closed or 
partially closed so a valid comparison to earlier periods is not 
practical. Carriers voluntarily reduced scheduled operations, and the 
FAA waived the usage requirements to mitigate delay impacts from the 
construction and reduced airport capacity. The FAA used non-preferred 
runway configurations and waived slot usage requirements to facilitate 
temporary carrier schedule reductions to mitigate delays. In addition, 
the Port Authority has adopted an automated departure queuing program 
at JFK to manage when aircraft are released from the gate. This program 
reduces taxi-out delays for aircraft waiting to depart. Many of these 
procedural changes, including the departure queuing program, have been 
permanently implemented.
    As stated earlier, delay modeling for EWR and JFK analyzed the 
effects of both scheduled and unscheduled operations. Although not 
adopted, the FAA had proposed limits on unscheduled operations at the 
airports, while accommodating existing scheduled operations without 
creating high levels of congestion and delays. For 2007, unscheduled 
operations at the two airports averaged two per hour with several hours 
exceeding that average. The FAA had proposed limits for each airport of 
one and two operations per hour depending on the time of day. For 
summer 2010, actual operations were down at JFK and EWR to an hourly 
average of roughly one unscheduled operation. Unscheduled operations 
averaged just less than two per hour at both airports during the 
afternoon hours.
    The current Orders limit a carrier's ability to transfer a slot 
(either by trade, lease, or sale) beyond the duration of the Orders. 
The Orders were intended as a short-term measure to allow time for 
development of a long-term, comprehensive rule that included a 
secondary market mechanism. The transfer mechanisms in place under the 
Orders differ significantly from those permitted under the HDR, 
currently in place only at DCA, which allow slots to be bought, sold, 
leased, or otherwise transferred for any duration and to any person.
    The following tables show the approximate percentage of slots held 
at each airport by carriers holding more than one percent of total 
slots.\64\ Since 2008, numerous carriers have obtained slots at EWR, 
JFK, and LGA through either FAA allocations or slot transactions with 
incumbent airlines.\65\ At EWR, new carriers include: Austrian 
Airlines, Avianca Airlines, Cathay Pacific Airways, Icelandair, Iceland 
Express Airlines, La Compagnie, Southwest Airlines, Virgin America, and 
Vision Airlines. At JFK, new carriers include: Arik Air, Brussels 
Airlines, Fly Jamaica Airways, Hawaiian Airlines, Hellenic Imperial 
Airways, Interjet, LAN Peru, Nippon Cargo Airlines, Nordic Global 
Airlines, Norwegian Air Shuttle, Qatar Airways, Transaero Airlines, 
Virgin America, WestJet, and XL Airways France. At LGA, new carriers 
include: Southwest Airlines, Virgin America, and WestJet.
---------------------------------------------------------------------------

    \64\ This information is current as of August 2014 as reflected 
in slot records maintained by the FAA's Slot Administration Office.
    \65\ This information is current as of August 2014 as reflected 
in slot records maintained by the FAA's Slot Administration Office. 
Not all indicated carriers may be currently operating at the 
airports.

                                   EWR
------------------------------------------------------------------------
                                                              Percent
------------------------------------------------------------------------
United Airlines.........................................              73
American Airlines.......................................               7
Delta Air Lines.........................................               5
JetBlue.................................................               2
FedEx...................................................               2
Air Canada..............................................               2
Porter Airlines.........................................               2
Southwest Airlines......................................               1
------------------------------------------------------------------------

                                   JFK
------------------------------------------------------------------------
                                                              Percent
------------------------------------------------------------------------
Delta Air Lines.........................................              31
JetBlue.................................................              26
American Airlines.......................................              17
United Airlines.........................................               4
British Airways.........................................               2
Virgin America..........................................               2
------------------------------------------------------------------------

                                   LGA
------------------------------------------------------------------------
                                                              Percent
------------------------------------------------------------------------
Delta Air Lines.........................................              45
American Airlines.......................................              29
United Airlines.........................................               8
Southwest Airlines......................................               5
Air Canada..............................................               4
JetBlue.................................................               3
Spirit Airlines.........................................               2
WestJet.................................................               1
Republic Airline........................................               1
Virgin America..........................................              12
------------------------------------------------------------------------

III. Discussion of the Proposal

    Because of the combination of high demand and limited ability to 
increase capacity at JFK, EWR, and LGA, the FAA must address a dilemma: 
How can the agency manage delays while promoting access to carriers 
wishing to operate at the airport, thus encouraging competition? This 
proposed rule attempts to address that dilemma.
    Ongoing implementation of the New York/New Jersey/Philadelphia 
Metropolitan Area Airspace Redesign project and Next Generation Air 
Transportation System (NextGen) technologies are expected to increase 
the efficiency and reliability of the airspace structure and ATC system 
and reduce delays within the next 10 years. Although the FAA continues 
to develop and implement these improvements, which it believes over 
time will reduce congestion and delays at the New York City area 
airports, it does not anticipate these airspace improvements will 
provide significant benefits at JFK, EWR, and LGA in the immediate 
future. Letting the Orders expire without replacing them with a more 
permanent solution likely would result in a growth in operations and 
consequently high levels of congestion and delays, as was experienced 
following AIR-21.
    Rather than take repeated and piecemeal approaches to manage slots 
and efficient use of airspace at JFK, EWR, and LGA, the FAA believes a 
longer-term and comprehensive rule is prudent. The FAA's longstanding 
preference for addressing capacity limitations is to expand airport 
infrastructure, increase airport throughput, and improve airspace and 
airport surface efficiency. The FAA currently is implementing ways to 
utilize the airspace in the New York City area more efficiently and to 
decrease delays, but there are physical limitations to expanding these 
airports in the foreseeable future. This proposed rule would complement 
planned airspace and airport capacity improvements by encouraging more 
efficient use of existing capacity.
    This proposed rule would treat all three New York City area 
airports

[[Page 1285]]

similarly. To achieve the goal of delay management, it would limit 
scheduled and unscheduled operations. To achieve the goals of promoting 
market access and competition, it would permit transfer of slots 
between carriers in a secondary market that encourages transparency. 
Proposed changes to the usage requirement also could improve 
competition and market access at the airports by increasing the number 
of scheduled operations that are actually operated. Under the current 
Orders, some slots are allocated but not scheduled and operated. The 
FAA believes it is necessary to address allocation and distribution of 
slots at JFK, EWR, and LGA in a coordinated manner because traffic at 
each of these airports affect each other and the NAS as a whole. The 
airports are located close to each other and consistently have been 
among the most delay-prone airports. This proposal presents five 
different alternatives the FAA is considering for how slot transfers 
would operate in a secondary market, and these alternatives are 
discussed in detail later in the preamble. The FAA intends that any 
final rule would become effective at the beginning of a scheduling 
season to facilitate the transition from the Orders to a final rule.
    Currently, hourly scheduled operations are limited under the Orders 
to 81 at JFK, 81 at EWR, and 71 at LGA, and hourly unscheduled 
operations at LGA are limited to three under the LGA Order. This 
proposal, if adopted, would replace those Orders. It would adopt the 
current limits on operations, limit hourly unscheduled operations to 
two at JFK and one at EWR, and establish daily limits on scheduled 
operations at all three airports.
    For seasonal allocations of available slots, the FAA proposes to 
substantially follow the WSG at each airport. The WSG generally 
provides a consistent, transparent, and fair method of slot allocation. 
This proposed rule specifically addresses the WSG processes being 
applied. For WSG processes not specifically addressed in this proposal 
or for future changes to the WSG, the FAA would consider whether they 
are consistent with this proposed rule or other U.S. statutes or 
regulations. The current allocation mechanisms at JFK and EWR generally 
are consistent with the WSG. The FAA proposes to extend this allocation 
approach to LGA, even though it is an overwhelmingly domestic airport, 
because these international guidelines are widely understood by 
carriers. One allocation mechanism for all airports also maintains 
consistency and reduces the opportunity for confusion on how slot 
management applies at an individual airport. The allocation mechanism 
is discussed later and any significant deviations from the WSG are 
noted.
    The FAA also proposes to retain the 80 percent usage requirement, 
which is consistent with the WSG, at each of the airports. The usage 
requirement would be applied to slots on an individual day-of-week 
basis over the entire season at each of the airports, similar to the 
method currently used at JFK and EWR. However, the FAA proposes a 
change in the way the utilization rules were applied under the Orders 
and under the HDR. The FAA proposes a specific flight or series of 
flights be identified for each requested slot throughout the entire 
season. Because each slot has a corresponding series of flights, a 
flight associated with one slot in the same 30-minute slot time period 
could not be used to help another slot meet the minimum usage rules.

A. Hourly and Daily Slot Limits

    Based on modeling of airport capacity and demand at each of the 
airports, the FAA has determined that limits should apply throughout 
most of the day. As discussed in the Background section, operational 
demand is steady and approaches airport capacity throughout the day. 
The FAA proposes to retain the slot-controlled hours as they exist 
under the Orders. Accordingly, the FAA proposes the following slot-
controlled hours: for JFK, daily from 0600 through 2259; for EWR, daily 
from 0600 through 2259; and for LGA, Monday through Friday from 0600 
through 2159 and Sunday from 1200 through 2159. All times are expressed 
in Eastern time, which is the local time for all three airports. The 
FAA would use the 24-hour clock because carriers currently submit 
schedules using that international standard in local time or 
Coordinated Universal Time (UTC).
    Although not proposed, the FAA is considering changing the slot-
controlled hours to daily from 0600 to 2259 for LGA to maintain 
consistency across all airports. The FAA believes a consistent approach 
across the three airports would reduce confusion for carriers as to 
when slots are required for an operation and reduce the carriers' 
burden when submitting slot requests. If the FAA changed the slot-
controlled hours at LGA, it would have to allocate slots in those new 
hours. The FAA tentatively is considering allocating daily slots to 
each carrier for the summer and winter scheduling seasons that 
correspond to the maximum number of flights that actually were operated 
by the carrier in that hour from the last Sunday in March 2014 through 
the first Saturday in September 2014. Carriers would be afforded an 
opportunity to return unneeded slots to the FAA. Any modifications to 
allocations in those hours due to operational changes between the 
publication of the NPRM and effective date of any final rule would be 
handled on an individual basis and could be temporarily allocated until 
a permanent (historic precedence) allocation is made for the subsequent 
corresponding season. The FAA requests comments, including specific 
benefits and drawbacks, on whether it should adopt a common definition 
of ``slot-controlled hours'' across the three airports.
    The FAA proposes to limit scheduled operations to no more than 81 
per hour (or any 60-minute period) at JFK, 81 per hour at EWR, and 71 
per hour at LGA. The FAA also proposes to assign slots specifically as 
an arrival or departure in 30-minute windows, a practice already in 
place under the Orders, to manage peaking of operations within the 
hour. These proposed schedule limits would be 44 in any 30-minute 
period at JFK, 44 in any 30-minute period at EWR, and 38 in any 30-
minute period at LGA. While the FAA does not propose to change the 
limits from those currently in effect, it may change them in the 
future. Enhanced capacity or delay reduction resulting from 
technological advances or procedural changes (e.g., NextGen or wake 
turbulence recategorization) may result in future increases in slot 
limits at the airports. The FAA will continue to review each airport's 
capacity and operations before each scheduling season when determining 
whether to change slot limits.
    The FAA acknowledges that allocated slots exceed these schedule 
limits in several hours at each airport, but the FAA does not propose 
to withdraw any allocated slots. As applies under the Orders, the FAA 
would reserve authority to retire any returned slots until allocations 
in an hour no longer exceed the limits. The FAA would continue to work 
with carriers and encourage retiming of operations to depeak individual 
time periods, as necessary to mitigate congestion and delays.
    The nature of operations at JFK, and to a lesser extent at EWR, is 
such that demand has historically been less in mid-morning and very 
early afternoon. Therefore, many of those lower demand hours have 
allocations below the hourly limits of 81. These low demand hours 
currently provide a recovery period that reduces delays and prevents 
them from continuing into the peak afternoon

[[Page 1286]]

hours. The FAA has determined that allowing allocations in these hours 
to grow to the limit would result in higher and sustained delays 
throughout the entire day because total operations would exceed the 
airport's actual capacity. To mitigate increasing delays while 
preserving historic allocations, the FAA proposes a daily slot limit. 
This daily limit would apply to the slot-controlled hours at LGA and 
from hours 0600 to 2159 at JFK and EWR. The FAA believes applying the 
daily limit to the 2200 hour at JFK and EWR is unnecessary because 
operations in that hour contribute little to cumulative daily delays. 
The daily limit would not affect operations outside of those hours. A 
daily limit would provide flexibility to carriers scheduling flights 
because the FAA could approve new flights or retime existing flights to 
less congested hours while preventing a build-up of the schedule across 
the day that would result in significant increases in delays.
    The FAA acknowledges the benefits of a daily limit at LGA are not 
as significant as at JFK and EWR because allocations in most hours at 
LGA currently are at or above the hourly limit. A daily LGA limit would 
limit additional allocations in hours that may be below 71 scheduled 
operations, now or in the future, providing modest delay-management 
benefits. Nevertheless, the FAA proposes a daily limit at LGA for 
consistency purposes and to ensure the operational impacts of 
additional flights are considered.
    The FAA considered actual allocations accepted in 2008 and what was 
currently operating at each airport to determine this daily limit. 
These 2008 allocations, and subsequent slot allocation decisions made 
with respect to the Orders, establish the upper bound of allocations at 
the airport to meet the established delay goals. The FAA proposes a 
daily slot limit of 1,205 at both JFK and EWR and 1,136 at LGA. This 
proposed limit would not result in any withdrawal of slots. Based on 
current allocations at JFK, there would be roughly 20 slots in low 
demand hours available for allocation. At EWR or LGA, there would be no 
slots available for allocation. Additionally, like the hourly limit at 
LGA, actual allocations currently exceed the LGA daily limit. Because 
slot allocation and usage are dynamic, this number of available slots 
is likely to change prior to the FAA issuing a final rule.

B. Allocation of Slots

    The FAA proposes to grandfather all existing slot allocations made 
under the Orders for both the summer and winter scheduling seasons. 
This grandfathering recognizes that carriers have made investment, 
marketing, operating, and business decisions based on the assignment of 
Operating Authorizations under the Orders and the expectation that 
those slots would continue to be available in future seasons subject to 
the usage and other general Order provisions. On the proposed rule's 
effective date, at JFK and EWR, the FAA would assign, according to its 
records, each carrier all slots for the summer scheduling season that 
had been approved for the previous summer scheduling season as amended 
through the slot allocation process. Similarly, the FAA would assign, 
according to its records, each carrier all slots for the winter 
scheduling season that had been approved for the previous winter season 
as amended through the slot allocation process. At LGA, for the hours 
of 0600 through 2159 or 1200 through 2159 on Sunday, the FAA would 
assign each carrier all slots held as of the effective date for both 
the summer and winter scheduling seasons and for each day-of-week.
    Temporary, one season-only, and other contingent allocations would 
not automatically receive historic precedence at the same times. For 
all other slots allocated under this transitional mechanism, carriers 
would have historic precedence, provided all other proposed conditions 
are met, for the subsequent corresponding scheduling season. The FAA 
tentatively has determined this is the most efficient method of 
transitioning from the temporary Orders to a more permanent regime. 
These allocated slots, however, would be subject to reversion to the 
FAA under the proposal's minimum usage requirements and could be 
withdrawn for operational reasons.
    When making decisions regarding the allocation of available slots, 
the FAA would seek to allocate in a manner that ensures efficient use 
of a scarce resource and maximizes the benefits to both airport users 
and the traveling public. Except as indicated in the following 
discussion, the proposed allocation priorities mirror current WSG 
priorities. The FAA believes the WSG approach is well-understood and is 
an internationally-recognized system of slot allocation at airports. 
These allocation procedures would apply to JFK, EWR, and LGA. A WSG-
like allocation process already applies under the JFK and EWR Orders 
because those airports have a significant international presence, and 
the WSG is commonly applied to international slot-controlled airports 
and understood by carriers with international service. Although a WSG 
procedure previously has not applied to LGA, the FAA proposes to do so 
to maintain consistency between the airports. A common approach to 
allocating slots reduces the administrative burden of multiple 
procedures for both the FAA and carriers. A common approach also 
reduces confusion with respect to the rules for each airport. The FAA 
understands that carriers with only domestic service would have some 
adjustment to the new rules at LGA, but most of these carriers already 
operate at JFK or EWR (and would have familiarity with the WSG at those 
airports). The FAA does not anticipate changing the allocation and 
usage mechanisms at LGA would be overly burdensome.
    Like the WSG, the FAA proposes to afford priority treatment for 
slot requests by new entrants. The FAA proposes to define a ``new 
entrant'' as a U.S. or foreign air carrier that holds or operates fewer 
than 20 slots on any day of the week, in any combination during the 
slot-controlled hours, at the respective airport. That number would 
include any slots that had been returned to FAA after the slot return 
deadline, or that had been revoked by the FAA for insufficient use, 
during the two corresponding scheduling seasons immediately preceding 
the scheduling season for which a slot allocation is being conducted. A 
carrier would not be eligible for slot allocation as a new entrant if 
it had returned slots to the FAA after the slot return deadline, or had 
slots revoked by the FAA for insufficient use, during the two 
corresponding scheduling seasons immediately preceding the scheduling 
season for which a slot allocation is being conducted.
    The proposed ``new entrant'' definition differs from the definition 
contemplated under the WSG, which sets a threshold of five slots, 
because the lower threshold would provide little opportunity for a new 
entrant to establish its operations before losing new entrant status 
and thereafter being able to expand in those markets only through slots 
obtained in the secondary market. With up to 20 slots, a carrier would 
have sufficient flexibility to establish a competitive presence at a 
large metropolitan airport such as LGA, JFK, or EWR, giving the carrier 
not only a basic foothold but also a critical mass of frequencies that 
would allow it to compete effectively. The FAA also proposes the 
definition be applicable at each airport, thus establishing a uniform 
definition that is easily understood by all stakeholders.
    For purposes of slot allocation, the FAA historically has treated 
U.S. air carriers conducting operations solely

[[Page 1287]]

under another carrier's marketing control with unified inventory 
control as a single carrier. Also, U.S. carriers having more than 50 
percent common ownership have been treated as a single carrier for slot 
allocation purposes; however, individual foreign carriers, regardless 
of their ownership, have been treated as separate carriers. Under 
international obligations, Canadian carriers are treated the same as 
U.S. carriers for slot purposes at U.S. high-density airports. The FAA 
does not propose to change this approach.
    Prior to the start of the scheduling season, and according to the 
schedule published by IATA, the FAA would publish a notice in the 
Federal Register announcing the deadline for submitting schedule 
requests for the upcoming season. Prior to announcing the submission 
deadline, the FAA would conduct an informal airport capacity review for 
each airport, which is consistent with its historical practice at JFK 
and EWR and with the WSG. The FAA also would provide each carrier with 
a listing of its historic slots. The method for calculating historic 
precedence is discussed in more detail later in this document. By the 
deadline stated in the Federal Register notice, each carrier would 
submit its proposed requests for each airport noting which requests are 
in addition to, or changes from, the previous corresponding season. If 
a carrier wishes to make a change from an historic slot, it should 
submit a request to retain that slot and indicate that it also is 
requesting the change to avoid losing the historic slot if the FAA 
could not confirm the change. Based on the FAA experience with 
carriers' slot trading when developing domestic schedules, the FAA 
believes that many carriers would not be ready to submit their 
schedules for LGA according to the IATA schedule, which requires slot 
request decisions several months before the start of the scheduling 
season. The FAA requests comment on whether the FAA should set a later 
submission deadline for LGA and what any later deadline should be.
    The FAA is not proposing a particular format for the submission of 
schedule requests because it wants to avoid an unnecessary burden, 
especially for carriers that operate a large number of slots at the 
airports, and wants to maximize carrier flexibility. However, each slot 
request would be required to indicate the effective dates of the 
request, proposed days of operation, proposed time of operation 
(indicated as either UTC or local time), whether the operation is an 
arrival or departure, flight number, and aircraft type. Although not 
required under this proposal, the FAA would accept schedule submissions 
in IATA Standard Schedules Information Manual (SSIM) format or another 
similar format.
    The FAA would accommodate these requests by allocating available 
slots according to the priorities set forth in proposed Sec.  93.41. 
First, the FAA would confirm any requests for historic slots, including 
those that have adjustments within the same 30-minute period or other 
minor changes that do not affect operations, prior to the IATA Slot 
Conference. The FAA then would split the remaining available slots into 
two pools: One pool for new entrants as defined in proposed Sec.  93.36 
and another pool for all carrier requests. The FAA acknowledges this 
method of establishing two pools prior to accommodating retimings 
differs from the WSG, but the FAA believes that it provides new 
entrants with a better opportunity to access desirable slot times. The 
FAA would allocate any available slots according to these priorities 
until there were no available slots remaining in each pool.
    Within each pool, the FAA first would accommodate carrier requests 
to retime slots for operational reasons. The FAA recognizes that a 
carrier may request a retiming of a slot in a particular time period 
that the FAA cannot accommodate, and the FAA may offer a slot in a 
different time period. The carrier may then trade the slot with another 
carrier to conduct its desired operation or may operate in the 
allocated time period. A carrier in this situation that makes a request 
for a retiming to its desired slot time for a subsequent corresponding 
season will receive priority treatment within the set of requests for 
retimings. The FAA would use the carrier's previous requests and slot 
transfer records to make this determination of priority.
    After addressing requests for retimings within each pool, the FAA 
then would accommodate requests by carriers to extend an allocated 
seasonal slot to year-round service. Consistent with the WSG, the FAA 
gives priority to requests for year-round service because that service 
most efficiently uses the scarce resource of available slots.
    Finally, the FAA would accommodate any remaining requests. The FAA 
would consider the extent and regularity of the intended slot use by 
giving priority to intended year-round service and greater weight to 
requests for daily service. The FAA would consider the effective period 
of operation by giving greater weight to intended use throughout the 
entire season. The FAA also would consider schedule constraints of the 
carriers requesting slots, especially if the carrier is operating to or 
from another slot-controlled airport. Finally, the FAA would consider 
the overall operational impacts of schedule requests, including the 
distribution of flights and mix of arrivals and departures. This 
holistic approach allows the FAA to best manage airport and airspace 
congestion.
    Because the FAA expects that requests for slots would exceed the 
number of slots available in most seasons, the FAA proposes to include 
some tie-breaker factors to aid in allocation decision-making. Although 
the FAA does not intend these factors to be determinative, it could 
consider airport facilities constraints (such as constraints on gates, 
terminals, aircraft parking, customs and immigration, and curfews) and 
impacts to competition and markets served when weighing which request 
to accommodate.

C. Usage Requirement

    The FAA proposes to retain the current 80% usage requirement for 
historic precedence, but the methodology for calculating usage would 
change. The proposed calculation method would be used to determine 
historic precedence only for slots allocated for summer and winter 
scheduling seasons after this proposed rule becomes effective. 
Determining historic precedence for the first summer and winter 
scheduling seasons after this proposed rule becomes effective would use 
the calculation method under the rules in effect when the slots were 
allocated and operated.
    The 80% usage requirement provides a reasonable allowance for 
planned and unplanned cancellations. The usage calculation would be 
applied on an individual day-of-week basis. This method currently is 
used for JFK and EWR slots, and using this method for LGA slots would 
ensure consistency among the airports and afford carriers greater 
flexibility for slot allocations.
    A carrier must use the allocated slot at least 80% of the time for 
the same flight or series of flights throughout the period for which it 
is allocated during the scheduling season. The same series of flights 
would be at least five flights at approximately the same time on the 
same day-of-week, generally with the same flight number, generally 
serving the same market, and distributed regularly in the same season 
(for example, a 1035 JFK-LAX flight on every Monday of the summer 
season). This definition of same series of flights allows the FAA to 
see the intent to operate a series of flights but is not intended to 
preclude a carrier from

[[Page 1288]]

changing the flight number, origin/destination, or flight time (within 
the same 30-minute slot time period) during the scheduling season. The 
requirement to identify markets served with a particular slot is not 
intended to restrict a carrier's service in a particular market; it is 
simply a tool to assist the FAA in tracking the use of a specific slot. 
The FAA recognizes tying a slot to a series of flights for usage 
calculation is a departure from how it has historically applied usage 
rules. This change, however, is consistent with the WSG in that a 
carrier should hold only slots it plans to operate. This change is 
intended to address actions by some carriers that report a series of 
flights in different slots on various days during the reporting period 
to record usage on multiple slots with a single flight. Although those 
actions are not prohibited by the current Orders, they artificially 
allow carriers to meet the minimum usage rules without scheduling a 
flight for each slot.
    The FAA has found that the practice of spreading individual flights 
over a set of slots to achieve 80% usage potentially underutilizes 
slots because the full allocation of slots is not being scheduled and 
operated. Theoretically, operating four flights 100% of the time could 
meet the 80% usage requirement for five slots, which could result in 
non-utilization of 20% of the allocated slots (thereby limiting market 
access). While the FAA acknowledges scheduling realities make 
underutilization to this extent impractical, the FAA has observed some 
underutilization behavior at JFK, EWR, and LGA. The FAA believes this 
behavior could adversely affect the opportunities for new entrants to 
begin service at a particular airport or could reduce the choices 
available to consumers.
    This proposal would better ensure that the scarce resource of slots 
is used optimally. The FAA acknowledges that requiring carriers to 
operate their full allocation of slots could increase the number of 
operations. However, any increase in delays over current levels should 
remain within the accepted delay levels that were modeled at the time 
the current Orders, and corresponding hourly slot limits, were 
implemented. This model assumed full slot usage. It is likely that any 
increase in flights also would increase the number of flight choices 
available to consumers. The FAA believes another result of the changed 
usage calculation could be that a carrier that operates fewer flights 
than its slot holdings could dispose of the excess slots on the 
secondary market. The exchange of these slots could increase 
competition at the airport and provide consumer benefits, especially if 
the slots were acquired by a new entrant. Although the FAA believes it 
unlikely, especially in the peak demand hours, a carrier with excess 
slots could return those slots to the FAA, and they could be retired in 
hours exceeding the slot limits (providing delay-reduction benefits) or 
could be allocated to other carriers (providing consumer and economic 
benefits).
    The FAA requests comment on whether the proposed usage rate is 
appropriate. Additionally, in theory, it is possible that usage 
requirements may encourage carriers to fly smaller-than-optimal 
aircraft or to fly less-than-full aircraft. The FAA requests comment on 
how the proposed usage requirement might impact utilization of slots. 
Please provide data supporting the comments.
    The FAA would have discretion to waive the usage requirements when 
a carrier ceases operation at an airport due to a strike. The FAA also 
would retain discretion to waive the usage requirements in the event of 
a highly unusual and unpredictable condition beyond the carrier's 
control and affecting operations for 5 or more consecutive days. These 
exceptions allow carriers and the FAA flexibility to adapt to unusual 
and unexpected cancellations in contrast to the usual localized weather 
and mechanical cancellations the 80-percent usage rule permits. These 
usage waivers are similar to those under the WSG, and they previously 
have been successfully applied at U.S. slot-controlled airports. In 
certain circumstances, the FAA also could waive the usage requirements 
for a period up to 180 days for a new entrant acquiring slots at an 
airport either through FAA allocation or the secondary market.
    Under the HDR and the Orders limiting operations, slots held by a 
carrier were treated as used on Thanksgiving Day, the Friday following 
Thanksgiving Day, and the period from December 24 through the first 
Sunday of January. Under those rules, a carrier was allocated slots for 
the entire season rather than according to the schedule submitted by 
the carrier. Under this proposed rule, a carrier may give back a slot 
to the FAA for short periods of time (e.g., the week between Christmas 
and New Year's Day) when the slot would not be scheduled. These periods 
of time are not included in the usage calculation. The carrier also 
would not receive historic precedence for the periods of time when the 
slot is given back to the FAA. However, because of the anticipated 
limited duration of these returns, the FAA believes it is unlikely the 
carrier would be prohibited from scheduling during that period in the 
subsequent corresponding season. Accordingly, the FAA proposes to 
eliminate general waivers for holiday periods. The FAA requests comment 
on whether the elimination of these general waivers would create a 
hardship on carriers that the FAA has not considered. Comments should 
be supported by specific data demonstrating a hardship.
    To aid in the usage calculation, the FAA proposes to require 
carriers to submit an interim and final usage report to the FAA, as is 
required under the JFK and EWR Orders. The interim report would be due 
by September 1 for the summer scheduling season and February 1 for the 
winter scheduling season. The final report would be due no later than 
30 days after the end of the respective scheduling season. The interim 
and final reports should detail slot usage for each day of the 
respective scheduling season and report the following information for 
each slot held: The slot number, airport code, time, and arrival or 
departure designation; the operating carrier; the date and scheduled 
time of the actual operation, the flight number, origin and 
destination, and aircraft type identifier; and whether the flight was 
actually conducted. These reporting requirements are similar to those 
under the HDR and Orders. In addition to analyzing slot usage reports, 
the FAA would monitor slot usage throughout the scheduling season.

D. Transfer of Slots

    When the FAA adopted the Buy/Sell Rule, it recognized slots have 
value in the secondary market. The FAA believes the development of a 
robust secondary market ultimately is the best way to maximize 
competition. Over the years, the FAA has received complaints that 
carriers were unaware of possible opportunities to buy or lease slots, 
that incumbent carriers were colluding to constrain new entrant 
carriers' market access to an airport, and that there was uncertainty 
about the value of slots. The DOT and FAA believe increased 
transparency in the secondary market would address these concerns as 
well as allow interested parties to better understand the nature of 
slot transactions. For these reasons, the FAA proposes a secondary 
market and offers five alternatives for proposed Sec.  93.45. The FAA 
requests comments on each of these alternatives and assumptions 
associated with these alternatives. The most helpful comments would 
include a weighing of the benefits and drawbacks of how each 
alternative

[[Page 1289]]

addresses transparency of the market, efficiency of the transfer 
process, and carrier flexibility in transferring slots to meet 
operational or business goals.
    Under the first alternative, the FAA would permit a carrier to buy, 
sell, or lease a slot to another carrier or to trade a slot with 
another carrier for a slot at any U.S. or foreign slot-controlled 
airport. This alternative is similar to what was permitted under the 
Buy/Sell Rule and would permit privately-negotiated transactions 
between carriers. The FAA believes this alternative creates the least 
administrative burden on carriers, but it does not address previously-
voiced concerns about lack of knowledge of opportunities to acquire 
slots. Transparency benefits would be realized largely through the 
transaction approval process, which is discussed later.
    Under the second alternative, a carrier seeking to sell, lease, or 
trade a slot with another carrier would be required to follow a formal 
process to negotiate the terms of the transaction. This alternative 
would require a public notice on an FAA-managed bulletin board system. 
The carrier would have to submit a notice to the FAA that it intended 
to engage in a slot transaction, and the notice would include the 
carrier's intended terms. These terms would include the slots available 
for transfer (slot time and slot number), the type of transfer intended 
(trade, sale, lease), the proposed duration of a lease if applicable, 
and the intended effective date. The FAA requests comments on any 
additional information that the transferring carrier should provide.
    The carrier would make its request to the FAA at least 4 months in 
advance of its intended effective date. The FAA would post a notice of 
the offer to transfer and relevant details on the FAA Web site. The FAA 
would post that notice at least 3 weeks in advance of the opening date 
for bidding, and the notice would state the opening and closing dates 
for bidding and the contact information for submitting bids. The 
bidding period would last 2 weeks unless the transferring carrier 
requested a longer period of time. Carriers (and other interested 
parties) would be able to register to receive automatic notices when a 
new posting is published on the FAA bulletin board. The transferring 
carrier would not be permitted to negotiate terms prior to the start of 
the bidding period. The FAA intends all bids would be submitted 
directly to the transferring carrier. The transferring carrier could 
conduct negotiations during the bidding period to clarify and refine 
the bid. The transferring carrier, however, would be able to consider 
and negotiate only bids submitted during the bidding period, but that 
carrier could request an extension of the bidding period. Once the 
bidding period closes, the transferring carrier could select its 
preferred offer and negotiate the final terms of the transaction.
    The proposed rule would allow the transferring carrier flexibility 
in determining the best offer. The FAA would not require the carrier to 
select the highest-dollar offer because a carrier could place a higher 
value on non-cash assets and on the overall impact of the proposed 
transaction on its operations.
    The FAA requests comments on the timeframes being proposed. Is a 4-
month advance notice to the FAA enough time to complete the proposed 
process for completing a transfer transaction? Is this advance notice 
period too long to be practical in light of operational necessity? Does 
a 3-week public notice provide sufficient time for a carrier to obtain 
necessary approvals to bid on a slot? With a system where bids are 
submitted directly to the transferring carrier for review and further 
negotiation, would a 1-week bidding period be sufficient?
    The third alternative is similar to the second alternative, except 
that carriers would be permitted to privately negotiate tentative terms 
of a transaction before publishing its intent to transfer slots on the 
bulletin board. Carriers could approach any prospective transferor or 
transferee to evaluate the market or assess how to package the slots 
for transfer. Those tentative terms would be submitted to the FAA and 
posted on the bulletin board, and other carriers would be permitted to 
submit counter-offers. The transferring carrier could then select its 
preferred offer and privately negotiate the final transaction terms. 
Like the second alternative, the transferring carrier would be able to 
consider only counter-offer bids submitted during the bidding period. 
Under this alternative, a carrier would be able to submit a notice of 
intent to engage in a slot transaction, as under Alternative 2, without 
prior private negotiation.
    The fourth alternative attempts to encourage the greatest 
transparency by requiring bidders to post their bids on the bulletin 
board during the bidding period. A carrier would submit a notice to the 
FAA that it intended to engage in a slot transaction, and the bidding 
time frames would be the same as under the second alternative. Bidding 
carriers would post their bids, and any counterbids, on the bulletin 
board. Therefore, negotiations in the form of iterative bids would be 
available to all registered interested parties. Because this 
alternative may require posting of proprietary or confidential business 
information, a bidding carrier would have the option of posting a 
summary bid with more detailed information submitted directly to the 
transferring carrier. The FAA requests comment on whether the option 
for submitting both a publicly-available summary bid and private 
detailed bid adequately ensures protection of proprietary or 
confidential business information. What level of detail for the 
publicly-available summary bid is adequate to inform other potential 
bidders of the transaction value?
    The fifth alternative is similar to the fourth alternative, but the 
identities of the offering carrier and bidders would not be revealed. 
Bids under this alternative would be cash only because non-monetary 
assets could reveal the identity of the parties. Under this 
alternative, the offering carrier would be required to accept the 
highest bid posted. This alternative would mitigate the possibility of 
any collusion between carriers (e.g., by a carrier signaling the 
precise value of its bid to the selling carrier). It would also ensure 
that the winning carrier is the carrier that places the greatest 
economic value on the slots, leading to more efficient use of slots. 
The FAA requests comment on whether a blind bidding process would 
facilitate a more robust secondary market.
    Under the bulletin board alternatives, the FAA anticipates the 
transferring carrier would structure its notice in a way that permits a 
transaction involving multiple slots in any desirable combination. For 
example, the transferring carrier could require multiple slots be 
transferred as a set or it would consider bids for smaller groupings of 
slots. The FAA intends to allow maximum flexibility for transferring 
slots provided prospective bidders have adequate information on which 
to act. The FAA expects that if the material terms of the transaction 
change during or after the bidding period, the transferring carrier 
would repost the notice of intent to transfer for a new bidding period. 
The FAA requests comment on whether it should implement additional 
procedures for a subsequent bidding period that included shorter notice 
and bidding time frames. Does allowing the transferring carrier to 
craft a notice in a way to allow transfer of multiple combinations of 
slots ensure both that the transferring carrier would have sufficient 
flexibility in transferring the slots, and that bidding carriers would 
have an adequate opportunity to acquire the slots?

[[Page 1290]]

    Under alternatives one through four, transactions could include 
both cash and non-cash consideration, and the transactions via the 
bulletin board would not have to be blind. A carrier also would need to 
know the identity of a bidder offering non-cash assets to accurately 
value those assets. The FAA requests comment on whether non-cash bids 
promote competition by enlarging the pool of potential bidders, which 
could result in more bidders and more valuable bids.
    Do the bulletin board processes adequately accommodate complex 
transactions involving consideration other than cash? Do the bulletin 
board processes adequately accommodate transactions that are initiated 
by the transferee? The FAA also is willing to consider additional 
proposals for, and comments on, alternative secondary market 
mechanisms. These additional proposals should encourage the efficient 
transfer and use of slots in a transparent environment that permits 
meaningful opportunities for all carriers to participate.
    Under each of these alternatives, the transferee would not be able 
to use the slot until the FAA approved the transaction.\66\ Each party 
to the negotiated transaction would submit a request for approval to 
the FAA along with the final terms of the transaction including the 
names of all parties, the consideration offered by each party, the 
effective date of the transfer, and, if appropriate, the length of the 
lease. This information would be publicly available to provide the 
market with information to better value slots as well as provide 
information to the DOT for determining any anti-competitive effect of 
the transaction, which is discussed later in more detail. The FAA 
believes this knowledge would help establish a more robust secondary 
market and reduce the likelihood of collusive or anti-competitive 
behavior.
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    \66\ Because the DOT would be able to review the terms of the 
transaction under this proposal, the FAA would strictly enforce the 
prohibition against using transferred slots prior to approval of the 
transfer transaction.
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    The FAA acknowledges submitting detailed terms of a transaction 
could in rare circumstances involve legitimate proprietary or 
confidential business information. A carrier may request confidential 
treatment of the request for approval while it is under review. The 
FAA's general practice has been to not make this type of information 
public until after approval is granted, consistent with the Freedom of 
Information Act. In addition to confidential treatment while the 
request is under review, the FAA requests comment on whether it should 
develop a process for confidential treatment of certain information 
after the transaction is approved. If so, under what limited 
circumstances should this confidential treatment be granted to ensure a 
transparent secondary market? The FAA also requests comment on whether 
the transaction terms should not be made publicly available for a 
period of time after the transaction is approved. If so, what is a 
reasonable period of time?
    Under alternatives two, three, four, and five, the FAA proposes 
some limited exceptions to using the bulletin board system. The FAA 
proposes these exceptions because it believes they would facilitate 
transfers made for operational reasons, or as part of a transaction 
that does not raise concerns about a transparent secondary market. A 
carrier may trade a slot on a one-for-one basis with another carrier 
without submitting a bulletin board notice, but no consideration or 
promise of consideration may be offered for these trades. A carrier 
also may lease a slot to another carrier for a period of time no longer 
than two scheduling seasons. The FAA would review a series of short-
term leases to determine whether a carrier is effectively engaging in a 
longer-term transaction. For example, a one-season transfer that is 
executed for multiple seasons would be construed as a longer-term 
transfer. In this situation, the FAA may disapprove the transaction. 
Carriers would have the option of posting a notice on the bulletin 
board and negotiating a new transaction. Trades among carriers with 
unified marketing control are permitted without using the bulletin 
board, thus effectively allowing those carriers to treat slots as one 
inventory because these transactions do not have the characteristics of 
a normal arms-length transaction. Finally, slot transfers that take 
place as a result of a carrier merger or acquisition would not be 
subject to the bulletin board requirements. These transactions are 
subject to Federal agency review under antitrust and other authorities. 
While the bulletin board process would be suitable for purposes of 
transparency and competitive opportunity for standalone slot 
transactions, the proposed process is not designed for slot transfers 
that result from a carrier merger or acquisition.
    Under these alternatives, it may be necessary for the DOT to 
conduct a public interest or competitive review of a transaction for 
anti-competitive effect, which is discussed later in this document. The 
FAA would not approve any transaction until it had received an approval 
or non-objection from the Secretary or the initial 14-day review period 
had elapsed. To be clear, the FAA would monitor compliance with any 
required bid procedures.
    The FAA requests comments on whether variations to the five 
alternatives presented would better achieve the stated goals of the 
rulemaking, including creating a vibrant secondary market. For example, 
under each alternative, the FAA would post the final terms of the 
transaction. Please comment on whether the availability of this 
information facilitates transactions in the secondary market.
    While the FAA seeks comment on the proposed secondary market 
alternatives noted above, the FAA also is open to other mechanisms to 
more efficiently allocate slots in the secondary market. For this 
reason, the FAA requests comments regarding lessons learned from the 
use of secondary markets in other regulated industries (such as market 
for pollution permits, CAFE credits, or wireless spectrum). This 
information may assist the FAA in designing a more robust, flexible, 
and efficient secondary market for slots. Additionally, the FAA 
requests comments regarding lessons learned from historical secondary 
market mechanisms implemented by the FAA (such as the HDR or 2006 
Chicago O'Hare final rule).
    The FAA acknowledges that many carriers have engaged in short-term 
trades and leases at JFK, EWR, and LGA that extend until the 
termination date of the Orders. Carriers may intend these transactions 
be permanent rather than temporary, if permitted by FAA rules. In many 
cases a permanent transaction has operational or competition-enhancing 
benefits, but the Orders prohibit a transaction lasting beyond their 
effective dates. To facilitate the transition of these transactions 
from the Orders to this proposed rule, the FAA proposes to waive any 
bulletin board requirements, if adopted, for 90 days after the 
effective date of the final rule to allow carriers to negotiate and 
execute these transfers. These transactions still would be subject to 
the FAA approval process and DOT review.
    Under the Orders, carriers must transfer slots among various 
carriers operating on behalf of the marketing carrier. Some of these 
carriers are commonly owned while others are contracted service 
providers. Because the carriers operate under their own DOT and FAA 
operating authorities and communicate with ATC using their discrete 
call signs, the FAA has a valid interest in ensuring that carriers 
operating at a slot-controlled airport have the proper slot 
authorizations. The FAA proposes a simplified process in

[[Page 1291]]

Sec.  93.46 for managing the slot holdings of carriers with unified 
inventory and marketing control. The FAA believes this process would 
reduce the administrative burden on both the FAA and on carriers and 
their regional partners. The marketing and operating carriers would 
provide advance information to the FAA including the planned 
airport(s), the flight number ranges that would be used for marketing 
and ATC purposes, statements by the carriers as to which carrier would 
be responsible for ensuring that a slot is available, and reporting 
after the fact which carrier(s) operated the slots. Only flights 
meeting the proposed criteria would be permitted an exception to the 
advance transfer requirements. Carriers would retain the option to 
transfer slots to carriers under their marketing control. The FAA 
requests comments on whether this simplified process would reduce the 
administrative burden.

E. Oversight of Competitive and Public Interest Issues

    Over the course of the last several years, the DOT has heard many 
airlines, communities, and airports express concerns that incumbent 
slot holders have acted to limit competitors' access to slots. 
Arguments have been made that incumbent carriers have chosen not to 
transact with low-cost carriers or new entrants, preferring instead to 
deal with other incumbent carriers that hold a large portfolio of slots 
in order to preserve a competitive position in the market and forestall 
more rigorous competition. Similarly, there have been complaints that 
incumbent slot holders transfer slots for short periods to avoid losing 
slots under the application of the usage requirement. Consequently, 
some have sought more rigorous oversight and transparency of slot 
transactions.
    This section describes the DOT's proposal to draw upon existing 
authority to review certain slot transactions at the New York City area 
airports that may raise potential competitive or public interest 
issues. First, this section will explain the DOT's authorities that 
allow for review of standalone transactions.\67\ In addition, this 
section will provide a summary of how DOT has previously exercised 
these authorities. Next, this section will set forth the DOT's proposal 
for reviewing standalone slot transactions for competition and public 
interest impacts. Finally, this section will explain the DOT's proposed 
processes for engaging with the public regarding tentative 
determinations and protecting confidential information submitted in the 
course of such reviews. Through this proposal, the DOT would establish 
a more consistent, transparent, and predictable procedure for all 
stakeholders.
---------------------------------------------------------------------------

    \67\ A standalone slot transaction is a slot transfer by one 
carrier to another carrier (whether by sale, purchase, lease, or 
trade), akin to monetizing a slot. The Delta/US Airways slot swap 
described below would be an example of a standalone slot 
transaction, for purposes of this NPRM. A standalone slot 
transaction would occur independently of any slot transfers that 
would result from a carrier merger or acquisition, defined as a 
transaction that combines the ownership/operation/control of two (or 
possibly more) carriers into a single entity. The term ``carrier 
merger or acquisition'' is drawn from the statutory provision 
governing transfers of HDR slot exemptions, prohibiting their 
purchase, sale, lease, or other transfers, but permitting such 
transfers ``through an air carrier merger or acquisition.'' See 49 
U.S.C. 41714(j). Slot divestitures undertaken in response to a DOJ 
investigation of an airline merger or acquisition under the Hart 
Scott Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, 
would not be considered standalone slot transactions, and thus, 
would be exempt from the secondary marketplace alternatives proposed 
in this rule, unless otherwise directed by DOJ.
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1. Legal Authorities for Reviewing Standalone Slot Transactions
    The DOT's authority to review slot transfers resulting from 
standalone slot transactions derives from several statutory provisions. 
The DOT has authority under 49 U.S.C. 41712 to prohibit airline conduct 
comparable to antitrust violations. Section 41712 authorizes the DOT to 
prohibit conduct that it determines is an ``unfair method of 
competition.'' \68\ Although the DOT has not, in the past, relied on 
Section 41712 to take enforcement action in the context of airline slot 
transactions, the DOT nonetheless will consider exercising this 
enforcement authority as appropriate.
---------------------------------------------------------------------------

    \68\ See 49 U.S.C. 41712, authorizing the DOT to investigate and 
prohibit any unfair or deceptive practice or an unfair method of 
competition of an air carrier, foreign air carrier, or ticket agent.
---------------------------------------------------------------------------

    In addition, the DOT is directed by statute, under 49 U.S.C. 
40101(a), to carry out the pro-competitive aspects of the Airline 
Deregulation Act, in the course of carrying out the agency's duties and 
responsibilities. These pro-competitive objectives include maintaining 
the availability of a variety of adequate, economic, efficient, and 
low-priced air services; placing maximum reliance on competitive market 
forces and on actual and potential competition; avoiding airline 
industry conditions that would tend to allow at least one air carrier 
unreasonably to increase prices, reduce services, or exclude 
competition in air transportation; encouraging, developing, and 
maintaining an air transportation system relying on actual and 
potential competition; encouraging entry into air transportation 
markets by new and existing air carriers and the continued 
strengthening of small air carriers to ensure a more effective and 
competitive airline industry.\69\
---------------------------------------------------------------------------

    \69\ See 49 U.S.C. 40101(a)(9), (10), (12), (13), and (16).
---------------------------------------------------------------------------

    Furthermore, the DOT also is directed by statute, under 49 U.S.C. 
40101(a), to consider certain factors as being in the public interest, 
in the course of carrying out the agency's duties and responsibilities. 
Many of these public interest considerations are enumerated in the 
statute, while others are left to the Secretary's discretion.\70\ 
Enumerated considerations include, among others, maintaining and 
enhancing service to small communities and encouraging transportation 
through secondary or satellite airports.\71\
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    \70\ See 49 U.S.C. 40101(a), which directs the Secretary to 
consider identified matters, ``among others,'' as being in the 
public interest.
    \71\ 49 U.S.C. 40101(a)(8), (11), (16).
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2. Historical Application of Authorities
    Recently, the DOT/FAA has had occasion to apply the Section 
40101(a) pro-competitive policy considerations in responding to joint 
requests of two carriers with large slot holdings to waive, under 49 
U.S.C. 40109,\72\ the prohibition on purchasing LGA slots.\73\ In that 
proceeding, Delta Air Lines and US Airways sought to exchange slot 
interests at LGA and DCA. The DOT evaluated the competitive impact of 
the transaction because of its unique scope and scale: the transaction 
would have dramatically enhanced the respective market positions of 
Delta at LGA and US Airways at DCA. The combination of an increased 
concentration of slot holdings at both airports, an increase in the 
number of monopoly or dominant markets in which increased pricing power 
could be exercised, and the potential for use of the transferred slot 
interests in an anti-competitive manner, led the DOT to seek remedy of 
the potential anti-competitive effects by requiring a divestiture of 
slot interest at LGA and DCA.\74\
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    \72\ Section 40109(b) authorizes the FAA to grant an exemption 
from Section 40103(b)(1), the FAA's authority over use of navigable 
airspace, ``when the Administrator decides the exemption is in the 
public interest.''
    \73\ See Notice of a Petition for Waiver of the Terms of the 
Order Limited Scheduled Operations at LaGuardia Airport, 75 FR 7306 
(Feb. 18, 2010); Notice on Petition for Waiver of the Terms of the 
Order Limiting Scheduled Operations at LaGuardia Airport, 75 FR 
26322 (May 11, 2010); Petition for Waiver of the Terms of the Order 
Limited Scheduled Operations at LaGuardia Airport, 76 FR 63702 (Oct. 
13, 2011).
    \74\ 75 FR at 26324 (May 11, 2010); 76 FR 63702 (Oct. 13, 2011). 
In reaching these conclusions, the DOT calculated each airline's 
share of slots and departures, finding that Delta's share of slot 
interests at LGA would increase substantially, while US Airways' 
share of slot interests at DCA would also increase substantially. 
The DOT noted that low-cost airlines have a limited presence at both 
airports, and the DOT determined that the transaction would further 
inhibit new entry because the airlines would have a greater interest 
in maintaining price premiums by forestalling new entry. See 75 FR 
at 7309-7310 (Feb. 18, 2010); 75 FR at 26329-26330 (May 11, 2010).

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[[Page 1292]]

    In the course of that process, the Department of Justice (DOJ) and 
the DOT informally agreed that the DOT would have primary 
responsibility to consider the carriers' waiver request and DOJ would 
consider the carriers' Hart-Scott-Rodino Act (HSR) notification and 
report.\75\ Under that arrangement, the DOT obtained waivers from the 
parties to the transaction and thereby gained access to the documents 
submitted to DOJ pursuant to the HSR process. Using the documents and 
its expertise in the airline industry, the DOT assisted DOJ in that 
agency's analysis of the transaction. DOJ also participated in the 
DOT's independent determination of the joint waiver request by 
submitting comments, as a party, to the DOT docket. In its 2010 grant 
of waiver with conditions, the DOT explained that its analysis was 
complementary to that of DOJ. Rather than attempting to enforce 
antitrust laws, the DOT explained that it was invoking its authority to 
protect the traveling public by fostering competition in the context of 
the requested waiver. Further, the DOT clarified that DOJ's authority 
under Section 7 of the Clayton Act to reject anticompetitive 
transactions ``did not remove the DOT's responsibility to carry out its 
programs consistently with the public interest criteria'' under the 
pro-competitive considerations in Section 40101.\76\ DOJ's submissions 
and analyses of the effects of the requested waiver on the availability 
of slots, competition between US Airways and Delta, low-cost carrier 
competition, fares, and mitigations of the anticompetitive effects were 
helpful to the DOT's decision-making process.
---------------------------------------------------------------------------

    \75\ See 15 U.S.C. 18a.
    \76\ See 75 FR at 26327.
---------------------------------------------------------------------------

3. Review of Standalone Slot Transactions for Competitive and/or Public 
Interest Factors
    With respect to standalone slot transactions between or among 
carriers, the DOT proposes to conduct reviews for purposes of 
evaluating the effects of the transaction based on competitive, or 
other public interest, factors. For purposes of the DOT's review based 
on competitive factors, the DOT proposes to limit its review to 
circumstances where the standalone slot transaction has the potential 
to substantially reduce competition or create unreasonable 
concentration. For purposes of the DOT's review based on public 
interest factors, the review may examine the adverse effects of the 
slot transfers on service to small communities, the traveling public, 
or other statutory public interest objectives.\77\ The DOT, however, 
would not review, on either competitive or public interest factors, 
certain routine types of actions involving small numbers of slots or a 
lease of slots to new entrants or limited incumbents, as explained 
further below.
---------------------------------------------------------------------------

    \77\ See 49 U.S.C. 40101(a).
---------------------------------------------------------------------------

    The FAA would forward each request for a standalone slot 
transaction approval and the final terms of the transaction, required 
under proposed Sec.  93.45, to the Office of the Secretary. The DOT 
would determine, within 14 days of receiving the request for approval, 
whether it needed to request and evaluate additional information for 
either competitive or public interest concerns, or both. As part of the 
Secretary's determination of those slot transactions for which 
additional review is necessary, the Secretary would specifically 
identify the additional information required. If the DOT requests 
additional information, the FAA would not approve the transaction, and 
any slots involved could not be operated by the transferee until the 
DOT notifies the parties and the FAA of its approval or non-objection. 
If the Secretary did not notify the parties and the FAA within 14 days 
of the DOT's receipt of the request for approval, the FAA could approve 
the transaction.
    The DOT would review the additional information as expeditiously as 
possible. The DOT's review process would be facilitated by the parties' 
timely information responses provided in a readable and workable 
format. For standalone slot transactions reviewed due to competition 
concerns, because the competitive factors would take antitrust law 
standards and policies into consideration, the DOT intends to 
coordinate and cooperate with DOJ to avoid unnecessary duplication of 
effort and burden by agencies and the parties concerned. If, after 
reviewing the additional information, the DOT determines the slot 
transaction raises no concerns, the Secretary would notify the parties 
and the FAA that the transaction may proceed. If the transaction raises 
concerns, the DOT would notify the parties of its concerns, propose 
remedies or other actions, and set appropriate procedures and timelines 
for review.
    For standalone slot transactions that raise competitive issues, the 
DOT would coordinate and consult with DOJ throughout the review 
process, to minimize the burden on the affected parties and to utilize 
Government resources efficiently. With respect to standalone slot 
transactions, the DOT would conduct a separate review under 49 U.S.C. 
40101, and may consider using its Section 41712 enforcement authority, 
as appropriate. The DOT requests comments and suggestions as to how 
best to minimize the burden on parties that may be subject to these 
reviews. The process that the DOT would use to conduct these reviews is 
proposed in Sec.  93.47 and further explained below.
    The DOT proposes to review competitive issues arising from 
standalone slot transactions having the potential for significant anti-
competitive effects, such as those that would significantly change the 
market structure at one of the slot-controlled airports, allow 
unreasonable industry concentration, permit one or two airlines to 
excessively dominate a market, or create an environment that would 
facilitate monopoly powers or practices that would tend to cause a 
carrier to unreasonably raise fares, reduce services, or exclude 
competition. Such transactions raise concerns because they may impede 
the pro-competitive goals of the Airline Deregulation Act.
    Among the issues that the DOT may consider in determining whether a 
particular standalone slot transaction merits further competitive 
review are those analyzed in connection with the Delta-US Airways slots 
swap, including whether:
     The transaction would increase the airline's already 
dominant position in a significant manner, or place the airline in a 
significantly dominant position;
     the transaction would significantly enhance an airline's 
ability to unreasonably increase its airfares in a manner unconstrained 
by competitors; or
     the transaction would enable slot interests to be used in 
an anti-competitive manner, such as by targeting smaller competitors.
The DOT requests comments on the use of these and other criteria to 
address competitive concerns.
    The DOT believes that the transparency of the transfer mechanisms 
proposed in some of the secondary market alternatives discussed earlier 
would allow a better understanding of the dynamics behind slot 
transactions. That additional transparency may protect against the kind 
of behavior

[[Page 1293]]

complained of by some. If the proposed transparent system to implement 
slot transfers reveals standalone slot transactions that have the 
potential to substantially reduce competition or create unreasonable 
industry concentration, the DOT has authority to investigate further 
and disapprove or approve with remedies that address the potential 
harm. The DOT also may monitor bulletin board postings, if that option 
is adopted in a final rule, to determine whether it suspects anti-
competitive behavior. These procedures for reviewing slot transfer 
transactions do not limit the Secretary's authority under 49 U.S.C. 
41712 to investigate and prohibit unfair or deceptive practices or 
unfair methods of competition.
    To prevent harm to the public interest pertaining to factors other 
than competition, the DOT is proposing to review standalone slot 
transactions for purposes of analyzing effects that may be inconsistent 
with the public interest objectives. The DOT's public interest review 
could consider adverse effects on the traveling public, service to 
small communities, service through secondary or satellite airports, or 
other areas covered by the public interest. The DOT requests comments 
on the use of these and other criteria to address public interest 
concerns.
4. Exceptions to Reviews of Standalone Slot Transactions
    The DOT expects very few proposed standalone transactions would 
raise significant competitive or public interest concerns. Accordingly, 
the DOT proposes to exempt from its review the more routine types of 
transactions involving small numbers of slots (such as those consisting 
of fewer than eight slots in total), involving limited terms (such as 
those extending over two or fewer scheduling seasons), involving one-
for-one trades among incumbents at any of the three airports, or 
involving a sale or lease entirely to a new entrant or incumbent that 
holds or operates a relatively small proportion of the slots at an 
airport. However, the DOT would consider multiple transactions within a 
period of a few years, including slot transfers to multiple carriers 
under the marketing or operational control of a single entity, as 
constituting a single aggregate transaction that could be subject to 
review. As with HSR filing guidance published by DOJ and the Federal 
Trade Commission, the DOT would seek to ensure that carriers not enter 
into multiple small transactions with the purpose of evading the review 
process; multiple transactions within a three-year period could be 
reviewed if they constituted a pattern and raised competitive or public 
interest issues.
    The DOT does not intend to review transactions that would be 
excepted from the bulletin board process. Nevertheless, it may conduct 
such reviews if it believes carriers have engaged in multiple 
transactions or have structured transactions to circumvent the 
competitive or public interest review process.
    The DOT requests comments on whether the exceptions described above 
create a sufficient safe harbor so that transactions enhancing 
competition and providing public benefits are encouraged, while still 
providing the DOT with an opportunity to review transactions that could 
impede competition, promote monopoly markets, unreasonably raise fares, 
reduce service, cause undue harm to small communities or service to 
secondary or satellite airports, or otherwise adversely impact the 
public interest. Are there alternative ways to describe the sorts of 
slot transfers that may be excluded from the review (that is, measured 
by the percentage gain in market share by an acquiring carrier)? Do the 
proposed timeframes for additional review permit carriers to plan slot 
transfers without discouraging those transactions?
5. Process
    With respect to the proposals outlined above regarding reviews of 
standalone transactions for competitive or public interest factors, if 
upon first examination, the DOT determines that review is necessary, 
the DOT anticipates using expedited procedures to conduct that review. 
The procedures may include an opportunity for public comment as in the 
Delta/US Airways slot swap proceeding, or, for example, as in a 
potential proceeding involving a tentative DOT decision that seeks 
public comment. The DOT intends to harmonize such proceedings with DOJ. 
The DOT requests comments on appropriate procedures to synchronize the 
process with DOJ and to avoid undue burden and duplication on the 
parties.
    With respect to information submitted by the parties to a 
transaction, the DOT proposes that parties could request that any 
information submitted to the DOT for review and designated as 
confidential not be disclosed to the public. The DOT, subject to the 
procedures at 49 CFR part 7, would keep such designated information 
confidential and not include it in any public proceeding. The DOT would 
treat a request to examine or copy this information as any other 
request under the Freedom of Information Act, 5 U.S.C. 552, and process 
the request under the DOT's procedures at 49 CFR part 7. The DOT would 
use the procedures described in proposed Sec.  93.47(e) for receiving, 
handling, and disclosing such confidential information. The procedures 
at 14 CFR 302.12 (commonly known as Rule 12) would not apply. The DOT 
requests comments on these proposed procedures, including the handling 
of confidential documents or alternative procedures, to ensure that 
decisions are made in a timely, effective, and transparent manner.

F. Retiming, Suspension, and Withdrawal of Slots for Operational 
Reasons

    The FAA proposes to reserve the authority to retime or temporarily 
suspend a slot if a reduction in operations during a particular time 
period is required. Events such as a runway or taxiway closure, a 
change in separation standards, or fleet mix change that could impact 
throughput \78\ at the airport may reduce the airport's capacity on a 
short-term basis. As it has done in the past, the FAA would first seek 
voluntary cooperation to retime or reduce operations at the airport 
through waivers of the usage requirements and temporary schedule 
reductions. If these voluntary measures were insufficient, the FAA 
would temporarily suspend slots until reaching the desired operational 
level. The FAA would conduct a lottery of slot holdings in the 
particular time period to determine which slot to suspend, and credit 
would be given for any voluntarily suspended slot. The FAA also would 
not suspend a slot held by a carrier that holds fewer than 20 slots on 
any day of the week at the airport. The FAA would provide notice 45 
days in advance of its intention to temporarily suspend a slot, unless 
the operational circumstances necessitate a shorter notice period. Once 
the situation requiring a reduction in operations ceases, any 
temporarily suspended slots would be returned to the carrier that held 
them provided that carrier still is operating at the airport.
---------------------------------------------------------------------------

    \78\ A fleet mix change could affect throughput in several ways. 
Introduction of larger aircraft with greater separation standards 
could reduce the number of aircraft that could use a runway. A fleet 
mix change also could change the runways available for use, which 
could affect the throughput.
---------------------------------------------------------------------------

    The FAA also reserves the authority to permanently withdraw slots 
at an airport. The FAA first would make a determination of decreased 
airport capacity that it does not expect to increase for an indefinite 
period of time.

[[Page 1294]]

The FAA expects to use a permanent withdrawal only in the most unusual 
circumstances when voluntary cooperation and a temporary suspension of 
slots is determined insufficient to address capacity constraints. The 
FAA would conduct a lottery of slot holdings in the particular time 
period to determine which slots to withdraw. The FAA would not withdraw 
a slot held by a carrier that holds fewer than 20 slots on any day of 
the week at the airport. The FAA would provide notice 45 days in 
advance of its intention to permanently withdraw a slot, unless the 
operational circumstances necessitate a shorter notice period. 
Following withdrawal, the slot would cease to exist.
    The FAA believes that a carrier that ceases all operations at an 
airport should not continue to hold a slot and earn rental income from 
it, just as it believes that non-carriers should not be permitted to 
hold slots. The FAA believes slots held in these ways undermine the 
FAA's promotion of efficient use of a scarce resource controlled by the 
U.S. Government. The FAA proposes to allow a carrier that ceases all 
operations to hold the slot at that airport for no longer than 2 years 
after the end of the season in which it ceased operations. The carrier 
could lease the slot during this period so that it does not permanently 
lose it. This 2-year period provides adequate time for the carrier to 
determine its long-term plans for operating at the airport and either 
resume operations at the airport, return the slot to the FAA, or sell 
the slot to another carrier. After the 2 years elapse, the slot would 
revert to the FAA, and any carrier operating the slot would have to 
cease that operation. Similarly, if a carrier's DOT economic authority 
or FAA operating certificate is suspended, surrendered, or revoked, any 
slots held by that carrier would revert to the FAA. The FAA has 
determined only operating carriers may hold slots. If that carrier had 
an existing agreement under which another carrier were operating the 
slots, the FAA could allocate the slots on a temporary, non-historical 
basis for the remainder of the scheduling season or up to the duration 
of the agreement to avoid disrupting operations or expectations of the 
operating carrier.

G. Unscheduled Operations

    The FAA proposes to limit unscheduled operations into and out of 
JFK, EWR, and LGA during the slot-controlled hours. Unscheduled 
operations already are limited at LGA by Order, and the FAA previously 
had proposed limits on unscheduled operations at JFK and EWR. Although 
unscheduled operations (including general aviation, passenger and cargo 
charter, ferry, and other ad hoc operations) are typically a small 
percentage of overall traffic, the FAA has determined these limits are 
necessary because any airport operation affects congestion and delays. 
Even a few additional operations during peak hours could result in 
significant additional delay, thus eroding the effectiveness of the 
slot limits. Accordingly, limitations on unscheduled operations should 
be part of any comprehensive plan to manage congestion and delays and 
ensure the effectiveness of limits on scheduled operations. A 
comprehensive plan should seek to balance airport access to all 
potential operators without permitting unreasonably increased 
congestion and delays in the absence of FAA oversight.
    The FAA believes most unscheduled operations can be accommodated 
under this proposed rule if operators are flexible in their arrival and 
departure times. Moreover, the FAA believes that general aviation 
demand and a segment of flights conducted as business and private 
charters can be accommodated within regional capacity, including 
operating at Westchester County Airport, Islip MacArthur Airport, 
Republic Airport, Stewart International Airport, Morristown Municipal 
Airport, and Teterboro Airport. Based on data from the FAA's Enhanced 
Traffic Management System (ETMS) for the year ended May 31, 2008,\79\ 
most unscheduled flights can be accommodated in the actual requested 
hour or through capacity in an adjacent hour (1 hour on either side of 
the actual hour of operation in the data), or through additional 
reservations available in visual meteorological conditions. If an 
operator cannot obtain a reservation for its preferred time, its 
planned flight times may need to be revised because of the limited 
available reservations.
---------------------------------------------------------------------------

    \79\ The FAA also reviewed unscheduled operations in summer 
2009, 2010 and 2012 and found slightly fewer unscheduled operations 
in those years. Therefore, the higher 2008 traffic is used for this 
analysis.
---------------------------------------------------------------------------

    Unscheduled operations at JFK would be limited to two per hour, at 
EWR to one per hour, and at LGA to three per hour. The proposed LGA 
limits are consistent with the limit that has been in place since 2009. 
Although the limits for JFK and EWR are lower than that for LGA, these 
limits generally correlate to actual hourly unscheduled operations at 
the airports in summer 2008. To the extent possible, ATC would permit 
additional operations (for example, in favorable weather conditions or 
if unallocated slots exist in a particular time period). Also, a 
secondary market alternative for unscheduled operations, in addition to 
the existing reservation system, could allow slot holders to exchange 
slots that they are not able to use on a particular day. The FAA 
requests comments on whether allowing slots to be exchanged in the 
secondary market to unscheduled operators would lead to a more 
efficient use of limited operational capacity.
    Reservations obtained through the FAA's Airport Reservation Office 
(ARO) would be required prior to conducting the operation (except in 
the case of emergency operations) and could be obtained up to 72 hours 
in advance. These reservations would allow an unscheduled operation 
(either arrival or departure) during a 60-minute period. The 
reservations would be allocated on a first-come, first-served basis, 
determined by the time the request is received by the ARO. When the ARO 
allocates a reservation, it would assign a unique reservation number. 
Operators would primarily obtain reservations through the ARO's 
interactive computer system accessed via the Internet or touch-tone 
telephone system. This system is known as the e-CVRS. Operators would 
provide the date and time of the proposed operation along with other 
identifying information concerning the aircraft and the intended 
flight. Additional reservations would be available in the e-CVRS 
system, but these reservations may not appear until close to the 
reservation time.
    All operations at the airport other than declared emergencies, 
whether under instrument flight rules (IFR) or visual flight rules 
(VFR), would require a reservation. However, non-emergency national 
security, law enforcement, military, public aircraft, or other similar 
mission-critical operations may be accommodated above the limits with 
prior FAA approval. In the case of diplomatic or other flights in 
direct support of foreign governments, the FAA would permit additional 
reservations, if necessary, to accommodate these flights but may 
approve an operation at a time other than the one initially requested.
    The filing of a request for reservation would not constitute the 
filing of an IFR flight plan as required under other rules. However, an 
IFR flight plan could not be filed until the reservation is obtained. 
The operator would include the reservation number in the ``Remarks'' 
section of the flight plan to indicate that it has a reservation for 
the operation.
    The FAA recognizes the needs of public charter operators to confirm

[[Page 1295]]

airport access for commercial planning and 14 CFR part 380 compliance 
purposes. Accordingly, the FAA proposes to allow public charter 
operators to obtain a reservation up to 6 months in advance for a 
planned individual operation or a series of operations occurring fewer 
than three times per month. Public charter operators planning to 
conduct a series of operations more than three times per month would 
need a slot for those operations.
    Public charter operations that seek a reservation more than 72 
hours and up to 6 months in advance of the planned operation, would 
submit their request to the FAA's Slot Administration Office. A public 
charter operator would be required to provide the Slot Administration 
Office with a certification that any required prospectus has been 
submitted to the DOT in accordance with 14 CFR part 380; the call sign/
flight number to be used for ATC communication by the direct air 
carrier conducting the operation; the date and time of the proposed 
arrival or departure; and the origin airport immediately prior to JFK, 
EWR, or LGA, or the destination airport immediately following JFK, EWR, 
or LGA; and aircraft type. A public charter operator also would be 
required to notify the Slot Administration Office of any changes to the 
above information after the reservation has been allocated.
    The number of reservations available in advance for public charter 
operations would be limited to one per hour at LGA and two per day at 
JFK and EWR. If a public charter operator were unable to obtain an 
advance reservation, it could attempt to obtain a reservation within 
the 3-day window that is open to all unscheduled operations. A public 
charter operator also could attempt to obtain a slot from another 
carrier in the secondary market under proposed Sec.  93.45.

H. Miscellaneous Amendments

    Because the HDR no longer is in effect for JFK, EWR, LGA, and ORD, 
the FAA proposes to remove references to these airports in part 93, 
subparts K and S. These out-of-date references have caused confusion 
for the public, and these amendments would reduce that confusion. 
Accordingly, the FAA proposes to remove references to these airports in 
Sec. Sec.  93.123 (including the table in Sec.  93.123(a)), 93.211, 
93.223, 93.226. The FAA also proposes to remove Sec. Sec.  93.133, 
93.215, 93.217, 93.218, and 93.221(e) because they do not apply to DCA, 
which is the only airport for which the HDR applies. None of these 
amendments would substantively change how the HDR applies to DCA.

IV. Regulatory Notices and Analyses

A. Regulatory Evaluation

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Orders 12866 and 13563 direct 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 (Pub. L. 96-354) 
requires agencies to analyze the economic impact of regulatory changes 
on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) 
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, that they be the basis 
of U.S. standards. Fourth, the Unfunded Mandates 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 with 
base year of 1995). This portion of the preamble summarizes the FAA's 
analysis of the economic impacts of this proposed rule. We suggest 
readers seeking greater detail read the full regulatory evaluation, a 
copy of which we have placed in the docket for this rulemaking.
    In conducting these analyses, the FAA has determined this proposed 
rule has benefits that justify its costs, and is a ``significant 
regulatory action'' as defined in section 3(f) of Executive Order 12866 
because it raises novel policy issues contemplated under that executive 
order. The rule is also ``significant'' as defined in the DOT's 
Regulatory Policies and Procedures. The proposed rule, if adopted, 
would not have a significant economic impact on a substantial number of 
small entities, would not create unnecessary obstacles to international 
trade and would not impose an unfunded mandate on state, local, or 
tribal governments, or on the private sector.
Total Benefits and Costs of This Rule
    The FAA developed this analysis using 2009 data to model the 
behaviors of carriers based on meeting the minimum requirement of the 
proposed rule. Under this assumption, carriers would incrementally 
increase actual operations in year one to meet the new use-or-lose 
requirement and this new operating level would grow by the FAA's 
Terminal Area Forecast (TAF) until it reached the daily limits. In the 
first year carrier utilization of slots will be at least 80%. After 
this year, any increase in operations and slot utilization is due to an 
increase in forecasted demand. Total benefits and costs for the 
regulatory case are estimated at $74,696,596 ($65,242,900 Present Value 
at 7%) for benefits and $53,056,768 ($46,341,836 Present Value at 7%) 
for costs, assuming the highest cost secondary market alternative 
(either alternative four or five) is adopted. Moreover, the FAA 
believes that this rule would improve utilization of existing slots, 
possibly increase a carrier's penalty for retaining slots of limited 
value and thus result in the return of some slots, and would result in 
net benefits over one year.

                    Total Cost and Benefits of Alternatives Four or Five of the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                   Present value                   Present value
            Year 2012                Benefits          (7%)            Costs           (7%)        Net benefits
----------------------------------------------------------------------------------------------------------------
Regulatory Case.................     $74,696,596     $65,242,900     $53,056,768     $46,341,836     $18,901,064
----------------------------------------------------------------------------------------------------------------

Who is potentially affected by this rule?
     Operators of scheduled and non-scheduled, domestic and 
international flights, and new entrants who do not yet operate at JFK, 
LGA, and EWR.
     All communities with air service to JFK, LGA, and EWR.
     Passengers of scheduled flights to JFK, LGA, and EWR.
     The Port Authority of New York and New Jersey, which 
operates the airports.
     FAA Air Traffic Control.

[[Page 1296]]

Assumptions
     All costs and benefits are in 2010 dollars.
     Costs and benefits estimated for the first year.
     Additional flights added to meet new usage requirement 
excludes weekends (Saturday and Sunday).
     Assume some flights rescheduled to meet new usage 
requirement.
     Present value discount rate of 7 percent is applied.
     Some unscheduled flights would be redirected.
     Carriers that would need to add a large number of flights 
in less desirable hours (hours 0600 and 2100) would return or sell 
those slots.
    The majority of the costs and benefits from this proposed rule are 
from changes to the usage requirement. The secondary market and new 
administrative and reporting requirements result in minor benefits and 
costs. Benefits include consumer benefits (measured as consumer 
surplus) from additional flights at JFK, EWR, and LGA. Costs are 
attributed to the additional operating costs carriers incur for these 
added flights to meet the proposed usage requirement, the additional 
minutes of delay and any administrative and reporting costs.

B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) 
establishes ``as a principle of regulatory issuance that agencies shall 
endeavor, consistent with the objectives of the rule and of applicable 
statutes, to fit regulatory and informational requirements to the scale 
of the businesses, organizations, and governmental jurisdictions 
subject to regulation. To achieve this principle, agencies are required 
to solicit and consider flexible regulatory proposals and to explain 
the rationale for their actions to assure that such proposals are given 
serious consideration.'' 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 rule will 
have a significant economic impact on a substantial number of small 
entities. If the agency determines that it will, the agency must 
prepare a regulatory flexibility analysis as described in the RFA.
    The initial regulatory flexibility analysis addresses:
     Description of reasons the agency is considering the 
action;
    The purpose of this rulemaking is to replace the current temporary 
Orders limiting operations at LGA, JFK, and EWR with a permanent rule. 
Under the existing Orders the hourly scheduled operations are limited 
to 81 at JFK, 81 at EWR, and 71 at LGA, and unscheduled operations are 
limited to 3 at LGA. This proposal, if adopted, would replace those 
Orders and continue the existing limits on scheduled operations in 
addition to limiting unscheduled operations to 2 per hour at JFK and 1 
at EWR and establishing daily scheduled operations limits. The FAA also 
intends to increase the use of slots through a revised usage 
requirement and secondary market.
     Statement of the legal basis and objectives of the 
proposed rule;
    This rulemaking is promulgated under the authority described in 
Title 49 U.S.C. Subtitle VII, Part A, Subpart I, Sections 40101, 40103, 
40105, and 41712 and in Title 15 U.S.C. Section 21. 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 the FAA deems necessary for safe and efficient 
utilization.
     Identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap or conflict with the 
proposed rule;
    This rule would replace existing FAA Orders and does not duplicate, 
overlap, or conflict with other federal rules.
     Description of the recordkeeping and other compliance 
requirements.
The FAA proposes a secondary market and offers five alternatives. The 
secondary market would permit a carrier to buy, sell, or lease a slot 
to another carrier or to trade a slot with another carrier. For all 
five alternatives, each carrier party to the negotiated transaction 
would be required to submit a request for approval to the FAA along 
with the final terms of the transaction including the names of all 
parties to the transaction, the consideration offered by each party, 
the effective date of the transfer, and, if appropriate, the length of 
the lease. For four of the alternatives, carriers would also submit 
information that would be submitted to the bulletin board through 
either the carrier or the FAA.
    The scheduled carrier would incur reporting costs for buying, 
selling, leasing or trading a slot. While these costs for an operator 
are minimal, largely voluntary, and can provide revenue opportunities 
for small operators, a full discussion of these costs now follows. For 
all five alternatives, each carrier party to the negotiated transaction 
would be required to submit a request for approval to the FAA along 
with the final terms of the transaction including the names of all 
parties to the transaction, the consideration offered by each party, 
the effective date of the transfer, and, if appropriate, the length of 
the lease. Each respondent would require 30 minutes, that includes 30 
minutes for the transferring carrier and 30 minutes for the receiving 
carrier. Given the legal nature of the agreement a lawyer would be 
retained with an hourly burden labor rate \80\ of $89.89.
---------------------------------------------------------------------------

    \80\ http://www.bls.gov/oes/current/oes532011.htm; Bureau of 
Labor Statistics Occupational Employment and Wages Statistics; 
Lawyer (May 2009); In May 2009, the Employee Benefit Research 
Institute, using a Bureau of Labor Statistics Survey of employee 
benefits estimated the total 2009 benefit as a percentage of payroll 
at 30.2 percent.
---------------------------------------------------------------------------

    For alternatives that require the bulletin board the FAA estimates 
that carriers would need at least one hour to report the buying, 
selling, or trading of a slot. As mentioned above the FAA estimates 
that carriers would post up to 25 trades. To estimate the annual 
reporting costs to carriers for buying, selling, or trading on the 
bulletin board, the FAA multiplied the estimated number of annual 
reports by the number of hours needed per report and the wage. The 
hourly burden labor rate was for a computer support specialist \81\ at 
$30.74. Total yearly cost to carriers, at all three airports, is 
estimated to be between $461 and $2,305. For alternative 4, there is 
also the added cost to carriers of submitting bids on the bulletin 
board. The bidding period would last 14 days, and the FAA estimates 
that bidders would spend approximately 2 hours dealing with the bid 
over the course of 14 days. Given the public nature of the bid, 
carriers would seek legal review before postings bids for an hourly 
burden labor rate for a lawyer \82\ of $89.89. The rate multiplied by 2 
hours per bid sums to $179.78. Again, the FAA estimated that there 
would be roughly 25 notices per airport a year with approximately 5 
bids per notice for a total of bids a year.
---------------------------------------------------------------------------

    \81\ http://www.bls.gov/oes/current/oes151041.htm, Occupational 
Employment and Wages, May 2009; (15-1041 Computer Support 
Specialists).
    \82\ http://www.bls.gov/oes/current/oes532011.htm; Bureau of 
Labor Statistics Occupational Employment and Wages Statistics; 
Lawyer (May 2009); In May 2009, the Employee Benefit Research 
Institute, using a Bureau of Labor Statistics Survey of employee 
benefits estimated the total 2009 benefit as a percentage of payroll 
at 30.2 percent.
---------------------------------------------------------------------------

     A description and estimated number of small entities to 
which the rule would apply.
    Any scheduled carrier, employing less than 1,500 employees, with 
existing slots or wanting a slot today would be affected by this rule. 
There are two

[[Page 1297]]

carriers operating scheduled service with less than 1,500 employees and 
one carrier with scheduled service that has slightly more than 1,500 
employees. Also, unscheduled operators that employ less than 1,500 
employees would be considered small entities.
    The delay costs for the small entities at the New York City area 
airports would not result in a significant economic impact. The annual 
delay cost equals the average of delay per flight, multiplied by the 
total number of flights, then by 50 percent attributed to ground delay, 
and then multiplied by the average airplane operating cost. When this 
total delay cost is divided by annual revenue the result is less than 2 
percent for the small entity scheduled operators. The FAA believes that 
compliance cost less than two percent of annual revenue is not a 
significant economic impact.
    A small number of unscheduled passenger flights planning to operate 
at EWR or JFK may have to operate at another New York City area 
airport, such as Teterboro, if they are unable to obtain a reservation. 
This change in plans may result in an additional ground transportation 
cost to or from the alternative airport. However, when considering the 
cost of travel by private jet compared to commercial passenger service, 
any additional ground transportation cost is not significant.
    The FAA believes the nonscheduled cargo carriers would not have a 
significant economic impact, as their flights would continue and most 
of their flights occur at night and would not incur delay costs.
    The FAA considered two alternatives to the proposed rule. The first 
alternative was to simply extend the existing Orders. This alternative 
was rejected because the FAA wanted to increase competition by making 
slots available to more operators. The FAA believes these operators are 
likely to be small entities. The second alternative was to remove the 
existing Orders. This alternative would result in unacceptable delay 
costs from the increase in operations.
    Thus, the FAA certifies that this proposed rule would not have a 
significant economic impact on a substantial number of small entities.

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the 
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal 
agencies from establishing standards or engaging in related activities 
that create unnecessary obstacles to the foreign commerce of the United 
States. Pursuant to these Acts, the establishment of standards is not 
considered an unnecessary obstacle to the foreign commerce of the 
United States, so long as the standard has a legitimate domestic 
objective, such the protection of safety, and does not operate in a 
manner that excludes imports that meet this objective. 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 the same costs on domestic and international entities 
and thus has a neutral trade impact.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) 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 
(in 1995 dollars) 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 $143.1 million in lieu of $100 
million. This proposed rule does not contain such a mandate; therefore, 
the requirements of Title II of the Act do not apply.

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the FAA consider the impact of paperwork and other information 
collection burdens imposed on the public. 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.
    This action contains the following proposed information collection 
requirements. As required by the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)), the FAA has submitted these proposed information 
collection amendments to OMB for its review.
    Title: Slot Management and Transparency for LaGuardia Airport, John 
F. Kennedy International Airport, and Newark Liberty International 
Airport.
    Summary: The FAA proposes to replace the current temporary Orders 
limiting operations with a permanent rule to address the issues of slot 
management at JFK, EWR, and LGA airports. The rule would limit 
scheduled and unscheduled operations. The FAA also proposes to adjust 
the usage requirements at the New York City area airports, establish a 
cap on unscheduled operations at JFK and EWR, and develop a secondary 
market for the exchange of slots. More information on the proposed 
requirements is detailed elsewhere in today's notice.
    Use of: The information is reported to the FAA by carriers holding 
slots at JFK, EWR, or LGA. This information is used to allocate, track 
usage, withdraw, and confirm transfers of slots among the operators and 
facilitates the transfer of slots in the secondary market. The FAA 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 airports.
    The FAA also uses this information to help provide access to 
unscheduled operators seeking access to these airports.
    The slot exchange information posted on the FAA's electronic 
bulletin board is designed to enhance competition by making the 
availability of slots known to new entrant and incumbent carriers 
seeking to serve these markets.
    Respondents: Respondents would be carriers with existing service at 
JFK, EWR, and LGA and new carriers initiating service at those airports 
in the future (by acquiring slots through slot allocation or the 
secondary market). Various carriers included in these totals have 
service at all three airports. There are 26 operating carriers at LGA, 
46 at EWR, and 75 at JFK.
    Respondents also would be unscheduled operators seeking to operate 
at LGA, JFK, or EWR. For the period from May through August 2010, there 
were approximately 50 unscheduled operators at LGA, 25 at JFK, and 30 
at EWR that used the respective airports for more than five operations.
    Frequency: The information collection requirements of the rule 
involve carriers notifying the FAA of their use of slots. Each carrier 
must notify the FAA of its: (1) Slot requests for the upcoming season; 
(2) slot usage (operations); (3) requests for approval of one-for-one 
slot trades; (4) requests for approval of slots transferred between 
carriers under the same marketing control; and (5) submissions of 
bulletin board notices of intent to transfer slots and requests for 
approval of secondary market transactions. The information collection

[[Page 1298]]

requirements also include reservation requests from unscheduled 
operators seeking access to the three airports during the slot-
controlled hours.
    Slot requests for the upcoming scheduling season would take place 
twice per year, before the winter and summer IATA scheduling seasons. 
Slot usage reporting would occur four times per year, with interim and 
final usage reports for each scheduling season. Requests for approval 
of one-for-one trades, request for approvals for slots transferred 
between carriers under the same marketing control, and submission of 
bulletin board notices regarding the intent to transfer slots would all 
be event-driven and would occur as frequently as secondary market 
transactions warrant. The FAA estimates there would be approximately 
2,700 secondary market transactions per year for all three airports. 
Similarly, reservation requests by unscheduled operators would also be 
event-driven and could occur as frequently as the hourly limit at the 
respective airport,
    Annual Burden Estimate: The annual reporting burden for each 
subsection of the rule is presented below. These burden estimates 
consist of costs that would result from the imposition of this proposed 
rule. These include: A reservation system for unscheduled operations at 
JFK, EWR, and LGA, schedule requests for the upcoming season, reporting 
and monitoring of the usage requirement, and the documentation required 
for the secondary market bulletin board at all three airports.
    Reservation system: 51 unscheduled operations per day (34 at JFK, 
17 at EWR). From prior experience with the reservation system at LGA 
the reporting time per reservation is two minutes. LGA would continue 
to have up to 48 unscheduled operations per day.
    JFK:
 (34 reservations per day) * (2 minutes per reservation) * (365 
days per year) = Total Annual Hourly Burden = 414 hours
    EWR:
 (17 reservations per day) * (2 minutes per reservation) * (365 
days per year)--Total Annual Hourly Burden = 207 hours
    LGA:
 Monday-Fridays: (48 reservations per day) * (2 minutes per 
reservation) * (5 days per week) * (52 weeks per year) = Total Annual 
Hourly Burden = 416 hours
 Sundays: (30 reservations per day) * (2 minutes per 
reservation) * (1 day per week) * (52 weeks per year) = Total Annual 
Hourly Burden = 52 hours
 Total burden (Mon-Fri, Sunday): = Total Annual Hourly Burden = 
468 hours
    Schedule Requests for Upcoming Season: The FAA estimates it would 
take each carrier approximately two hours per scheduling season to 
submit the required schedule request reports. These reports would be 
submitted to the FAA on a semiannual basis, corresponding with the 
winter and summer IATA scheduling seasons. There are 26 operating 
carriers at LGA, 46 at EWR and 75 at JFK for a total of 147 operating 
carriers at the three NY airports.
    (147 carriers) * (2 hours per report) * (2 scheduling seasons) = 
Total Annual Hourly Burden = 588 hours \83\
---------------------------------------------------------------------------

    \83\ This analysis does not assume that a carrier operating at 
more than one of the affected airports would recognize an economy of 
scale, thus reducing the estimated amount of time required to comply 
with the proposed requirements.
---------------------------------------------------------------------------

    Usage requirement: To confirm adherence to the usage requirement, 
the FAA proposes to require carriers to submit an interim and final 
usage report to the FAA, for each scheduling season. The interim report 
would be due by September 1 for the summer scheduling season and 
February 1 for the winter scheduling season. The final report would be 
due no later than 30 days after the end of the respective scheduling 
season. The interim and final reports should detail slot usage for each 
day of the respective scheduling season and report the following 
information for each slot held: the slot number, airport code, time, 
and arrival or departure designation; the operating carrier; the date 
and scheduled time of the actual operation, the flight number, origin 
and destination, and aircraft type identifier; and whether the flight 
was actually conducted.
    (147 carriers) * (1.5 hours per submittal) * (4 occurrences per 
year) = Total Annual Hourly Burden = 882 Hours
    Secondary market transactions: Reporting costs for the secondary 
market would vary according to which of the five alternatives the FAA 
chooses. Alternative 1 is the least costly. This alternative is very 
similar to current practices for lease agreements. This alternative 
does not include the costs for a bulletin board, rather carriers would 
privately-negotiate buy, sell, lease, and trade transactions. 
Alternatives 2, 3, 4, and 5 alternatively propose a bulletin board to 
post information on buy, sell, trade, and lease transactions. Costs 
include the reporting by carriers to the FAA.
    From prior experience, the FAA estimates that there would be 
approximately 2,700 slot transfer transactions yearly for all three 
airports. This amounts to roughly 575 transactions for EWR, 1480 for 
LGA, and 645 for JFK. Many transactions include trades among carriers 
with unified marketing control, and those carriers could use the 
simplified process under proposed Sec.  93.46 to reduce the reporting 
burden. The proposed oversight of secondary market competition may 
require submission of additional information, but the DOT expects few 
transactions would be reviewed.
    Secondary Market Trades (not via Bulletin Board):

 2,700 (total transactions) - 75 (bulletin board transactions) 
= 2,625 secondary market trades
2,625 (secondary market trades) * 1 hour per transaction (or 30 minutes 
per party) = 2,625 hours
    The FAA estimates that there would be roughly 25 notices per 
airport per year that would be posted to a bulletin board under 
alternatives 2, 3, and 4. The FAA estimates carriers would spend 2 
hours preparing and submitting those notices. For alternative 4, the 
FAA estimates approximately 5 bids per notice for a total of 375 bids 
at the three airports per year. The FAA estimates that bidders would 
spend approximately 2 hours dealing with each bid.
    Secondary Market Bulletin Board Transactions:
(125 bids per airport) * (2 hours to respond to bids) * (3 airports) = 
Total Annual Hourly Burden = 750 hours

Summary

    The agency requests comments to--
    (1) Evaluate whether the proposed information requirements are 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the agency's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Individuals and organizations may submit comments on the 
information collection requirement by March 9, 2015, and should direct 
them to the address listed in the ADDRESSES section of this document. 
Comments also should be submitted to the Office of

[[Page 1299]]

Information and Regulatory Affairs, OMB, via facsimile at (202) 395-
6974, Attention: Desk Officer for FAA.
    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. 
The OMB control number for this information collection will be 
published in the Federal Register, after the Office of Management and 
Budget approves it.

F. International Compatibility and Cooperation

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to conform to 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these proposed regulations.
    Executive Order 13609, Promoting International Regulatory 
Cooperation, promotes international regulatory cooperation to meet 
shared challenges involving health, safety, labor, security, 
environmental, and other issues and to reduce, eliminate, or prevent 
unnecessary differences in regulatory requirements. The FAA has 
analyzed this action under the policies and agency responsibilities of 
Executive Order 13609, and has determined that this action would have 
no effect on international regulatory cooperation.

G. Environmental Analysis

    FAA Order 1050.1E, Environmental Impacts: Policies and Procedures, 
identifies FAA actions that are categorically excluded from preparation 
of an environmental assessment or environmental impact statement under 
the National Environmental Policy Act in the absence of extraordinary 
circumstances. The FAA has determined this rulemaking action qualifies 
for the categorical exclusion 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 categorically excluded are identified under 
paragraph 311 of this Order.)''. It has been determined that no 
extraordinary circumstances exist that may cause a significant impact 
and therefore no further environmental review is required. A documented 
categorical exclusion has been filed in the docket.

V. Executive Order Determinations

A. Executive Orders 12866 and 13563

    See the ``Regulatory Evaluation'' discussion in the ``Regulatory 
Notices and Analyses'' section elsewhere in this preamble.

B. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. The agency has 
determined that this action would not have a substantial direct effect 
on the States, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government, and, therefore, would not have 
Federalism implications.

C. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

    The FAA analyzed this proposed rule under Executive Order 13211, 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). The agency has determined that it 
would not be a ``significant energy action'' under the executive order 
and would not be likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

VI. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. The agency 
also invites comments relating to the economic, environmental, energy, 
or federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. To ensure the docket does not contain 
duplicate comments, commenters should send only one copy of written 
comments, or if comments are filed electronically, commenters should 
submit only one time.
    The FAA will file in the docket all comments it receives, as well 
as a report summarizing each substantive public contact with FAA 
personnel concerning this proposed rulemaking. Before acting on this 
proposal, the FAA will consider all comments it receives on or before 
the closing date for comments. The FAA will consider comments filed 
after the comment period has closed if it is possible to do so without 
incurring expense or delay. The agency may change this proposal in 
light of the comments it receives.
    Proprietary or Confidential Business Information: Commenters should 
not file proprietary or confidential business information in the 
docket. Such information must be sent or delivered directly to the 
person identified in the FOR FURTHER INFORMATION CONTACT section of 
this document, and marked as proprietary or confidential. If submitting 
information on a disk or CD-ROM, mark the outside of the disk or CD-
ROM, and identify electronically within the disk or CD-ROM the specific 
information that is proprietary or confidential.
    Under 14 CFR 11.35(b), if the FAA is aware of proprietary 
information filed with a comment, the agency does not place it in the 
docket. It is held in a separate file to which the public does not have 
access, and the FAA places a note in the docket that it has received 
it. If the FAA receives a request to examine or copy this information, 
it treats it as any other request under the Freedom of Information Act 
(5 U.S.C. 552). The FAA processes such a request under Department of 
Transportation procedures found in 49 CFR part 7.

B. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from 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.
    Copies may also be obtained 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. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this proposed rule, 
including economic analyses and technical reports, may be accessed from 
the Internet through the Federal eRulemaking Portal referenced in item 
(1) above.

VII. The Proposed Amendment

List of Subjects in 14 CFR Part 93

    Air traffic control, Airports, Navigation (air).

[[Page 1300]]

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend chapter I of title 14, Code of Federal 
Regulations as follows:

PART 93--SPECIAL AIR TRAFFIC RULES

0
1. Revise the authority citation for part 93 to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40101, 40103, 40105, 40106, 
40109, 40113, 41712, 44502, 44514, 44701, 44715, 44719, 46301; 15 
U.S.C. 21.

0
2. Amend part 93 by adding subpart C to read as follows:

Subpart C--LaGuardia Airport, John F. Kennedy International Airport, 
and Newark Liberty International Airport Slot Management Rules
Sec.
93.35 Applicability.
93.36 Definitions.
93.37 Slots for scheduled arrivals and departures.
93.39 Determination of historic precedence.
93.41 Allocation of slots.
93.43 Reversion, suspension, and withdrawal of slots.
93.44 Reporting requirements.
93.45 Transfer of slots.
93.46 Operation of slots by carriers under common marketing control.
93.47 Oversight of competitive issues.
93.49 Unscheduled operations.

Subpart C--John F. Kennedy International Airport, Newark Liberty 
International Airport, LaGuardia Airport Slot Management Rules

Sec.  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 John F. Kennedy International Airport (JFK), 
Newark Liberty International Airport (EWR), and LaGuardia Airport 
(LGA).
    (b) This subpart prescribes procedures for the assignment, 
transfer, lease, and withdrawal of slots issued by the FAA for 
scheduled operations at JFK, EWR, and LGA.
    (c) This subpart applies to operations at:
    (1) JFK, daily from 0600 through 2259, Eastern time;
    (2) EWR, daily from 0600 through 2259, Eastern time; and
    (3) LGA, Monday through Friday from 0600 through 2159, Eastern 
time, and Sunday from 1200 through 2159, Eastern time.
    (d) A U.S. or, to the extent provided for by international 
agreements, foreign air carrier conducting operations solely under 
another carrier's marketing control with unified inventory control is 
not considered a separate carrier under this subpart.

Sec.  93.36  Definitions.

    For purposes of this subpart:
    Airport Reservation Office (ARO) is an operational unit of the 
FAA's David J. Hurley Air Traffic Control System Command Center. Its 
responsibilities include the administration of reservations for 
unscheduled operations at JFK, EWR, and LGA (excluding reservations for 
public charter operations allocated under Sec.  93.49(d)).
    Carrier is a U.S. or foreign air carrier with authority to conduct 
scheduled service or regularly conducted commercial service under parts 
121, 129, or 135 of this chapter and the appropriate economic authority 
under 14 CFR chapter II and 49 U.S.C. chapter 401, 411, and 413.
    Enhanced Computer Voice Reservation System (e-CVRS) is the FAA 
system used to make an arrival or departure reservation at JFK, EWR, or 
LGA. Reservations are made through a touch-tone telephone interface, an 
Internet Web interface, or directly through the ARO.
    New entrant is a U.S. or foreign air carrier that holds or operates 
fewer than 20 slots on any day of the week, in any combination during 
the slot-controlled hours, at the respective airport, with that number 
including any slots that have been returned to the FAA after the slot 
return deadline or had slots revoked by the FAA for insufficient use, 
during the two corresponding scheduling seasons immediately preceding 
the scheduling season for which a slot allocation is conducted.
    Public charter is defined in 14 CFR 380.2 as a one-way or roundtrip 
charter flight to be performed by one or more direct carriers that is 
arranged and sponsored by a 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 from the FAA to operate an 
unscheduled arrival to or departure from JFK, EWR, or LGA for a 
specific 60-minute period during the slot-controlled hours.
    Scheduled operation is the arrival or departure segment of any 
operation regularly conducted by a carrier between JFK, EWR, or LGA and 
another airport regularly served by the carrier.
    Scheduled series of flights is at least 5 operations on the same 
day-of-week that represent substantially the same scheduled service. 
These operations generally would be at the same time within a specific 
30-minute period, have the same flight number, serve the same market, 
and be distributed regularly throughout the season.
    Slot is the operational authority assigned by the FAA to a carrier 
to conduct one scheduled operation or a series of scheduled operations, 
or a series of public charter operations that are operated more than 
three times per month, at JFK, EWR, or LGA on a particular day(s) of 
the week during a specific 30-minute period.
    Slot-controlled hours are:
    (1) For JFK, daily from 0600 through 2259, Eastern time;
    (2) For EWR, daily from 0600 through 2259, Eastern time;
    (3) For LGA, Monday through Friday from 0600 through 2159, Eastern 
time, and Sunday from 1200 through 2159, Eastern time.
    Slot return deadline is the date by which a carrier must return a 
slot that it does not intend to operate. For the summer season, the 
deadline is January 15. For the winter season, the deadline is August 
15.
    Standalone slot transaction is a slot transfer by one carrier to 
another carrier (whether by sale, purchase, lease, or trade), akin to 
monetizing a slot. A standalone slot transaction would occur 
independently of any slot transfers that would result from a carrier 
merger or acquisition, defined as a transaction that combines the 
ownership/operation/control of two (or possibly more) carriers into a 
single entity. Specifically, slot divestitures undertaken in response 
to a DOJ investigation of an airline merger or acquisition under the 
Hart Scott Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, 
would not be considered standalone slot transactions.
    Summer scheduling season begins on the last Sunday of March.
    Unscheduled operation is an arrival or departure segment of any 
operation that is not regularly conducted by an air carrier, foreign 
air carrier, or other operator of an aircraft, excluding helicopters, 
between JFK, EWR, or LGA and another service point. Certain types of 
air carrier and foreign air carrier operations are considered 
unscheduled operations under this subpart including: on demand, public 
and other charter flights; hired aircraft services; extra sections of 
scheduled flights; ferry flights; and other non-passenger flights.
    Winter scheduling season begins on the last Sunday of October.

Sec.  93.37  Slots for scheduled arrivals and departures.

    (a) No person may operate certain public charters or any scheduled 
arrival into or departure out of JFK, EWR, or LGA during the slot-
controlled hours

[[Page 1301]]

without first obtaining a slot under this subpart.
    (b) Except as otherwise approved by the Administrator, the number 
of slots are limited to no more than 81 per hour at JFK, 81 per hour at 
EWR, and 71 per hour at LGA.
    (1) At JFK, the number of slots may not exceed 44 in any 30-minute 
period, 81 in any 60-minute period, or a total of 1,205 between the 
slot-controlled hours of 0600 and 2159.
    (2) At EWR, the number of slots may not exceed 44 in any 30-minute 
period, 81 in any 60-minute period, or a total of 1,205 between the 
slot-controlled hours of 0600 and 2159.
    (3) At LGA, the number of slots may not exceed 38 in any 30-minute 
period, 71 in any 60-minute period, or a total of 1,136 during the 
slot-controlled hours.
    (4) The FAA may adjust the number of arrival and departure slots in 
any period 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.

Sec.  93.39  Determination of historic precedence.

    (a) Any carrier holding operating authorizations (except for 
temporary, one-season-only, or other contingent operating 
authorizations) allocated under the Order limiting operations at JFK, 
the Order limiting operations at EWR, or the Order limiting operations 
at LGA, as evidenced by the FAA's records, will be assigned 
corresponding slots in 30-minute periods consistent with the limits 
under Sec.  93.37(b) and the carrier's summer and winter season 
schedules as approved by the FAA. The carrier will have historic 
precedence, subject to the requirements of this section, for these 
slots for the subsequent corresponding season.
    (b) To be eligible for historic precedence, an allocated slot must 
be used at least 80% of the time for which it is allocated during the 
scheduling period, subject to the following:
    (1) Absent approval by the FAA, the same flight or series of 
flights must be reported as used for an allocated slot throughout the 
summer or winter season.
    (2) For a series of flights operated on more than one day-of-week, 
each day-of-week is considered a separate series of flights.
    (3) The FAA will treat as used a slot held by a carrier that ceases 
operations using that slot due to a strike.
    (4) The FAA may waive these usage requirements in the event of a 
highly unusual and unpredictable condition which is beyond the 
carrier's control and which affects carrier operations for a period of 
five or more consecutive days.
    (5) The FAA may waive these usage requirements for a period of up 
to 180 days if a slot is allocated to or otherwise acquired by a new 
entrant carrier.
    (c) A slot allocated by the FAA under Sec.  93.41(i) does not have 
historic precedence for the subsequent corresponding season.

Sec.  93.41  Allocation of slots.

    (a) Requests for slots must be submitted to the FAA Slot 
Administration Office at the address and by the deadline published by 
the FAA in a Federal Register notice for each summer and winter 
scheduling season. The request must include the following minimum 
information:
    (1) The requesting carrier must submit its entire schedule at JFK, 
EWR, and LGA, as appropriate, for the particular season, noting which 
requests, if any, are in addition to, or changes from, the previous 
corresponding season at the respective airport.
    (2) Each slot request must indicate the effective dates of the 
request, proposed days of operation, proposed time of operation 
(indicated as either UTC or local time), whether the operation is for 
an arrival or departure, flight number, and aircraft type.
    (b) The FAA first will accommodate requests for slots for which the 
carrier has historic precedence and are for the same time period as the 
previous corresponding season.
    (c) After accommodating historic precedence slots, the remaining 
slots available for allocation will be divided into two pools:
    (1) Not less than 50% of the available slots will be for new 
entrants that have not returned slots to the FAA after the slot return 
deadline, or had slots revoked by the FAA for insufficient use, during 
the two corresponding scheduling seasons immediately preceding the 
scheduling season for which a slot allocation is being conducted; and
    (2) The remainder will be for any carrier.
    (d) Within each pool, the FAA first will accommodate carrier 
requests to retime slots for operational reasons.
    (e) Within each pool, the FAA next will accommodate carrier 
requests to extend an allocated seasonal slot to year-round service.
    (f) Within each pool, the FAA then will accommodate any remaining 
carrier requests. If all requests cannot be accommodated, the FAA will 
consider the following factors:
    (1) The effective period of operation;
    (2) The extent and regularity of intended slot use with priority 
given to year-round service;
    (3) Schedule constraints of carriers requesting slots; and
    (4) The operational impacts of scheduled demand, including the 
distribution of flights and the mix of arrivals and departures.
    (g) If an available slot cannot be allocated according to the 
factors in paragraph (f) of this section, the FAA may consider the 
following factors:
    (1) Airport facilities constraints including gates, terminals, 
parking, customs and immigration, and curfews; and
    (2) Competition and impacts to markets served.
    (h) A carrier allocated a slot under paragraph (f) of this section 
must operate that slot and may not transfer it for two corresponding 
seasons, except that carrier may engage in a one-for-one trade for 
operational reasons.
    (i) Notwithstanding paragraphs (a) through (g) of this section, the 
FAA may assign an available slot to a carrier on a non-permanent, 
first-come, first-served basis subject to permanent assignment under 
this subpart. Any remaining unassigned slots may be made available to 
unscheduled operations on a non-permanent basis according to the 
procedures in Sec.  93.49.
    (j) The FAA will assign each slot a designation that consists of 
the airport code, slot number, 30-minute time period, frequency, summer 
or winter season, and arrival or departure designation.
    (k) If directed by the Office of the Secretary of Transportation, 
the FAA will not apply the provisions of this section to any foreign 
air carrier or commuter operator of a country that provides slots to 
U.S. air carriers and commuter operators on a basis more restrictive 
than provided under this subpart.

Sec.  93.43  Reversion, suspension, and withdrawal of slots.

    (a) Absent prior approval by the FAA and except as otherwise 
provided in this subpart, a carrier that ceases all operations at an 
airport may transfer, sell, or lease any slots to another carrier as 
provided in Sec.  93.45, but the carrier may not hold any slots for a 
period exceeding 2 years after the season in which it ceases all 
operations at the respective airport.
    (b) If a carrier's DOT economic authority or FAA operating 
certificate is suspended, surrendered, or revoked, any slots held by 
that carrier revert to the FAA. If another carrier is operating

[[Page 1302]]

the slots under an agreement with the holding carrier, the FAA may 
allocate those slots on a temporary basis not exceeding the duration of 
the agreement.
    (c) The FAA may retime or temporarily suspend slots at any time to 
fulfill operational needs. The FAA will provide a 45-day notice, unless 
shorter notice is required for operational needs, to an affected 
carrier prior to temporarily suspending a slot that specifies the date 
by which operations using that slot must cease. The FAA will determine 
the suspended slots by lottery of slot holdings in the particular time 
period during which slots are being suspended. The FAA will reassign a 
suspended slot, if at all, only to the carrier from which it was 
suspended, provided the carrier continues to conduct scheduled 
operations at the respective airport.
    (d) If the FAA determines to reduce the number of allocated slots 
following a determination of decreased airport capacity, it may 
permanently withdraw slots to reach the accepted limit. The FAA will 
determine the withdrawn slots by lottery of slot holdings in the 
particular time period during which slots are being withdrawn. 
Following withdrawal, those slots would cease to exist.
    (e) The FAA will not retime, suspend, or withdraw slots, under this 
section, of a carrier that holds fewer than 20 slots on any day of the 
week at the respective airport.

Sec.  93.44  Reporting requirements.

    (a)(1) No later than September 1 for the summer scheduling season 
and February 1 for the winter scheduling season, each carrier holding a 
slot must submit an interim report of slot usage for each day of the 
applicable scheduling season.
    (2) No later than 30 days after the last day of the applicable 
scheduling season, each carrier must submit a final report of the 
completed operations for each day of the entire scheduling season.
    (b) The report required under paragraph (a) this section must 
contain, in a format acceptable to the FAA, the following information 
for each slot:
    (1) The slot number, airport code, time, and arrival or departure 
designation;
    (2) The operating carrier;
    (3) The date and scheduled time of each of the operations conducted 
with the slot, including the flight number, origin and destination, and 
aircraft type identifier; and
    (4) Whether the flight was actually conducted.
    (c) The FAA may withdraw the slots of any carrier that does not 
meet the reporting requirements of paragraph (a) of this section.

Sec.  93.45  Transfer of slots. [ALTERNATIVE ONE]

    (a) Except as otherwise provided in this subpart, a carrier may 
buy, sell, or lease a slot to another carrier for any consideration and 
for any time period, and a carrier may trade a slot with another 
carrier for a slot at any U.S. or foreign slot-controlled airport.
    (b) Requests for FAA approval of transfers under this section must 
be submitted in writing by all parties to the transaction to the FAA 
Slot Administration Office in a manner acceptable to the Administrator. 
Requests must provide the names of the transferor and recipient; 
business address and telephone number of the person representing the 
transferor and recipient; whether the slot is to be used for an arrival 
or departure; and the slot designation of the slot as described in 
Sec.  93.41(j).
    (c) The request for FAA approval also must include the final terms 
of the transaction including:
    (1) The names of all parties to the transaction;
    (2) The consideration offered by each party;
    (3) The effective date of the transfer; and
    (4) The length of the lease, if applicable.
    (d) Prior to approving the transfer, the FAA will confirm the 
transferred slots come from the transferor's FAA-approved slot holdings 
and that no transfer limitations apply.
    (e) The Secretary may review the final terms of the transaction for 
any anti-competitive effects or adverse public interest effects under 
Sec.  93.47. The FAA may not approve the transfer until the Secretary 
notifies the FAA of the Secretary's approval or non-objection or the 
14-day notice period under Sec.  93.47(b) elapses.
    (f) The slot may not be used by the transferee until the conditions 
of this section have been met, and the FAA provides notice of its 
approval of the transfer.

Sec.  93.45  Transfer of slots. [ALTERNATIVE TWO]

    (a) Except as otherwise provided in this subpart, a carrier may 
buy, sell, or lease a slot to another carrier for any consideration and 
for any time period, and a carrier may trade a slot with another 
carrier for a slot at any U.S. or foreign slot-controlled airport.
    (b) Except as permitted under paragraphs (c), (d), (e), (f), and 
(g) of this section, a carrier must provide notice to the FAA four 
months before its intended transaction date of its intent to transfer a 
slot prior to negotiating with another carrier. The notice of intent to 
transfer must include the slot number and time, effective date of the 
transfer, and, if applicable, the duration of the lease. The FAA will 
post a notice of the offer to transfer the slot and relevant details on 
the FAA Web site at http://www.faa.gov. The notice will state the 
opening and closing dates for bids and the contact information of the 
transferring carrier for bid submission. The offering carrier may 
accept any bid and negotiate the final terms of the transfer, but it 
may consider only bids submitted during the bidding period.
    (c) A carrier may trade a slot with another carrier on a one-for-
one basis without providing notice to the FAA under paragraph (b) of 
this section provided the request for FAA approval also includes a 
certification by both carriers that no consideration or promise of 
consideration was provided by either party to the trade.
    (d) A carrier may lease a slot to another carrier without notice to 
the FAA under paragraph (b) of this section provided the lease is 
effective for no longer than two scheduling seasons.
    (e) Carriers with agreements where one carrier operates solely 
under the other's marketing control may transfer a slot with another 
party subject to that agreement without notice to the FAA under 
paragraph (b) of this section provided the request for FAA approval 
also includes a certification of that agreement by both carriers.
    (f) Prior to [90 DAYS AFTER EFFECTIVE DATE], a carrier may buy, 
sell, or trade with another carrier a slot that was subject to a lease 
or short-term trade under the Order limiting operations at JFK, Order 
limiting operations at EWR, or Order limiting operations at LGA without 
notice to the FAA under paragraph (b) of this section.
    (g) Requests for FAA approval for transfers under this section must 
be submitted in writing by all parties to the transaction to the FAA 
Slot Administration Office in a manner acceptable to the Administrator. 
Requests must provide the names of the transferor and recipient; 
business address and telephone number of the person representing the 
transferor and recipient; whether the slot is to be used for an arrival 
or departure; and the slot designation of the slot as described in 
Sec.  93.41(j).
    (h) The request for FAA approval also must include the final terms 
of the transaction including, as applicable:

[[Page 1303]]

    (1) The names of all parties to the transaction;
    (2) A description of the transaction;
    (3) The consideration offered by each party;
    (4) The names of all bidders and consideration offered by each 
bidder;
    (5) The effective date of the transfer; and
    (6) The length of the lease.
    (i) Prior to approving the transfer, the FAA will confirm the 
relevant slots are part of the carrier's FAA-approved slot holdings and 
that no transfer limitations apply.
    (j) The Secretary may review the final terms of the transaction for 
any anti-competitive effects or adverse public interest effects under 
Sec.  93.47. The FAA may not approve the transfer until the Secretary 
notifies the FAA of the Secretary's approval or non-objection or the 
14-day notice period under Sec.  93.47(b) elapses.
    (k) The slot may not be used by the transferee until the conditions 
of this section have been met, and the FAA provides notice of its 
approval of the transfer.

Sec.  93.45  Transfer of slots. [ALTERNATIVE THREE]

    (a) Except as otherwise provided in this subpart, a carrier may 
buy, sell, or lease a slot to another carrier for any consideration and 
for any time period, and a carrier may trade a slot with another 
carrier for a slot at any U.S. or foreign slot-controlled airport.
    (b) Except as permitted under paragraphs (c), (d), (e), and (f) of 
this section, a carrier may negotiate tentative terms of a transfer 
without providing advance notice to the FAA. A carrier must provide 
notice to the FAA four months before its intended transaction date of 
these tentative transfer terms that includes the slot number and time, 
effective date of the transfer, consideration offered, and, if 
applicable, the duration of the lease. The FAA will post a notice of 
the relevant details of the transfer on the FAA Web site at http://www.faa.gov. The notice will state the opening and closing dates for 
bids and the contact information of the transferring carrier(s) for bid 
submission. The offering carrier may accept the tentative transaction 
or any counterbid and then negotiate the final terms of the transfer, 
but it may consider only bids submitted during the bidding period.
    (c) A carrier may trade a slot with another carrier on a one-for-
one basis without providing notice to the FAA under paragraph (b) of 
this section provided the request for FAA approval also includes a 
certification by both carriers that no consideration or promise of 
consideration was provided by either party to the trade.
    (d) A carrier may lease a slot to another carrier without notice to 
the FAA under paragraph (b) of this section provided the lease is 
effective for no longer than two scheduling seasons.
    (e) Carriers with agreements where one carrier operates solely 
under the other's marketing control may transfer a slot with another 
party subject to that agreement without notice to the FAA under 
paragraph (b) of this section provided the request for FAA approval 
also includes a certification of that agreement by both carriers.
    (f) Prior to [90 DAYS AFTER EFFECTIVE DATE], a carrier may buy, 
sell, or trade with another carrier a slot that was subject to a lease 
or short-term trade under the Order limiting operations at JFK, Order 
limiting operations at EWR, or Order limiting operations at LGA without 
notice to the FAA under paragraph (b) of this section.
    (g) Requests for FAA approval for transfers under this section must 
be submitted in writing by all parties to the transaction to the FAA 
Slot Administration Office in a manner acceptable to the Administrator. 
Requests must provide the names of the transferor and recipient; 
business address and telephone number of the person representing the 
transferor and recipient; whether the slot is to be used for an arrival 
or departure; and the slot designation of the slot as described in 
Sec.  93.41(j).
    (h) The request for FAA approval also must include the final terms 
of the transaction including:
    (1) The names of all parties to the transaction;
    (2) The consideration offered by each party;
    (3) The names of all bidders and consideration offered by each 
bidder, if applicable;
    (4) The effective date of the transfer; and
    (5) The length of the lease, if applicable.
    (i) Prior to approving the transfer, the FAA will confirm the 
transferred slots come from the transferor's FAA-approved slot holdings 
and that no transfer limitations apply.
    (j) The Secretary may review the final terms of the transaction for 
any anti-competitive effects or adverse public interest effects under 
Sec.  93.47. The FAA may not approve the transfer until the Secretary 
notifies the FAA of the Secretary's approval or non-objection or the 
14-day notice period under Sec.  93.47(b) elapses.
    (k) The slot may not be used by the transferee until the conditions 
of this section have been met, and the FAA provides notice of its 
approval of the transfer.

Sec.  93.45  Transfer of slots. [ALTERNATIVE FOUR]

    (a) Except as otherwise provided in this subpart, a carrier may 
buy, sell, or lease a slot to another carrier for any consideration and 
for any time period, and a carrier may trade a slot with another 
carrier for a slot at any U.S. or foreign slot-controlled airport.
    (b) Except as permitted under paragraphs (c), (d), (e), and (f) of 
this section, a carrier must provide notice to the FAA four months 
before its intended transaction date of its intent to transfer a slot 
prior to negotiating with another carrier. The notice of intent to 
transfer must include the slot number and time, effective date of the 
transfer, and, if applicable, the duration of the lease. The FAA will 
post a notice of the offer to transfer the slot and relevant details on 
the FAA Web site at http://www.faa.gov. The notice will state the 
opening and closing dates for bids and the contact information of the 
transferring carrier. Bids must be submitted through the bulletin board 
for public posting. The offering carrier may accept any bid and 
negotiate the final terms of the transfer, but it may consider only 
bids submitted during the bidding period.
    (c) A carrier may trade a slot with another carrier on a one-for-
one basis without providing notice to the FAA under paragraph (b) of 
this section provided the request for FAA approval also includes a 
certification by both carriers that no consideration or promise of 
consideration was provided by either party to the trade.
    (d) A carrier may lease a slot to another carrier without notice to 
the FAA under paragraph (b) of this section provided the lease is 
effective for no longer than two scheduling seasons.
    (e) Carriers with agreements where one carrier operates solely 
under the other's marketing control may transfer a slot with another 
party subject to that agreement without notice to the FAA under 
paragraph (b) of this section provided the request for FAA approval 
also includes a certification of that agreement by both carriers.
    (f) Prior to [90 DAYS AFTER EFFECTIVE DATE], a carrier may buy, 
sell, or trade with another carrier a slot that was subject to a lease 
or short-term trade under the Order limiting operations at JFK, Order 
limiting operations at EWR, or Order limiting

[[Page 1304]]

operations at LGA without notice to the FAA under paragraph (b) of this 
section.
    (g) Requests for FAA approval for transfers under this section must 
be submitted in writing by all parties to the transaction to the FAA 
Slot Administration Office in a manner acceptable to the Administrator. 
Requests must provide the names of the transferor and recipient; 
business address and telephone number of the person representing the 
transferor and recipient; whether the slot is to be used for an arrival 
or departure; and the slot designation of the slot as described in 
Sec.  93.41(j).
    (h) The request for FAA approval also must include the final terms 
of the transaction including:
    (1) The names of all parties to the transaction;
    (2) The consideration offered by each party;
    (3) The names of all bidders and consideration offered by each 
bidder, if applicable;
    (4) The effective date of the transfer; and
    (5) The length of the lease, if applicable.
    (i) Prior to approving the transfer, the FAA will confirm the 
transferred slots come from the transferor's FAA-approved slot holdings 
and that no transfer limitations apply.
    (j) The Secretary may review the final terms of the transaction for 
any anti-competitive effects or adverse public interest effects under 
Sec.  93.47. The FAA may not approve the transfer until the Secretary 
notifies the FAA of the Secretary's approval or non-objection or the 
14-day notice period under Sec.  93.47(b) elapses.
    (k) The slot may not be used by the transferee until the conditions 
of this section have been met, and the FAA provides notice of its 
approval of the transfer.

Sec.  93.45  Transfer of slots. [ALTERNATIVE FIVE]

    (a) Except as otherwise provided in this subpart, a carrier may 
buy, sell, or lease a slot to another carrier for currency only and for 
any time period, and a carrier may trade a slot with another carrier 
for a slot at any U.S. or foreign slot-controlled airport.
    (b) Except as permitted under paragraphs (c), (d), (e), and (f) of 
this section, a carrier must provide notice to the FAA four months 
before its intended transaction date of its intent to transfer a slot. 
The notice of intent to transfer must include the slot number and time, 
effective date of the transfer, and, if applicable, the duration of the 
lease. The FAA will post a notice of the offer to transfer the slot and 
relevant details on the FAA Web site at http://www.faa.gov. The notice 
will state the opening and closing dates for bids but not the identity 
of the transferring carrier. Bids must be submitted through the 
bulletin board for public posting. The identity of the bidders may not 
be disclosed during the bidding period. The offering carrier must 
accept the highest bid submitted during the bidding period.
    (c) A carrier may trade a slot with another carrier on a one-for-
one basis without providing notice to the FAA under paragraph (b) of 
this section provided the request for FAA approval also includes a 
certification by both carriers that no consideration or promise of 
consideration was provided by either party to the trade.
    (d) A carrier may lease a slot to another carrier without notice to 
the FAA under paragraph (b) of this section provided the lease is 
effective for no longer than two scheduling seasons.
    (e) Carriers with agreements where one carrier operates solely 
under the other's marketing control may transfer a slot with another 
party subject to that agreement without notice to the FAA under 
paragraph (b) of this section provided the request for FAA approval 
also includes a certification of that agreement by both carriers.
    (f) Prior to [90 DAYS AFTER EFFECTIVE DATE], a carrier may buy, 
sell, or trade with another carrier a slot that was subject to a lease 
or short-term trade under the Order limiting operations at JFK, Order 
limiting operations at EWR, or Order limiting operations at LGA without 
notice to the FAA under paragraph (b) of this section.
    (g) Requests for FAA approval for transfers under this section must 
be submitted in writing by all parties to the transaction to the FAA 
Slot Administration Office in a manner acceptable to the Administrator. 
Requests must provide the names of the transferor and recipient; 
business address and telephone number of the person representing the 
transferor and recipient; whether the slot is to be used for an arrival 
or departure; and the slot designation of the slot as described in 
Sec.  93.41(j).
    (h) The request for FAA approval also must include the final terms 
of the transaction including:
    (1) The names of all parties to the transaction;
    (2) The price offered by each bidder;
    (3) The effective date of the transfer; and
    (4) The length of the lease, if applicable.
    (i) Prior to approving the transfer, the FAA will confirm the 
transferred slots come from the transferor's FAA-approved slot holdings 
and that no transfer limitations apply.
    (j) The Secretary may review the final terms of the transaction for 
any anti-competitive effects or public interest effects under Sec.  
93.47. The FAA may not approve the transfer until the Secretary 
notifies the FAA of the Secretary's approval or non-objection or the 
14-day notice period under Sec.  93.47(b) elapses.
    (k) The slot may not be used by the transferee until the conditions 
of this section have been met, and the FAA provides notice of its 
approval of the transfer.

Sec.  93.46  Operation of slots by carriers under common marketing 
control.

    A carrier that operates solely under the marketing control of 
another carrier may operate the other carrier's slots without 
transferring the slots provided that:
    (a) The marketing carrier is responsible for ensuring that there 
are slots assigned for the planned operations of the carrier under its 
marketing control. The marketing carrier must submit information in 
advance to the FAA Slot Administration Office, at least on a seasonal 
basis, detailing the airport, carrier, marketed and operational flight 
number ranges, and effective dates.
    (b) The marketing carrier must submit changes throughout the 
reporting period.
    (c) The marketing carrier is responsible for submitting the usage 
reports required under Sec.  93.44.

Sec.  93.47  Oversight of public interest and competitive issues.

    (a) The Secretary may review a standalone slot transfer transaction 
conducted under Sec.  93.45, to determine adverse public interest and/
or anti-competitive effects, as described in 49 U.S.C. 40101(a). Small 
transactions of fewer than 8 slots in total or transfers extending for 
2 or fewer seasons) would not be subject to review under this section. 
However, the Secretary may consider multiple transactions within a 
three-year period as constituting a single aggregate transaction, 
including transactions that involve the transfer of slots to carriers 
under the marketing or operational control of a single entity.
    (b) The following procedures are used when conducting a review for 
public interest or competitive factors under paragraph (a) of this 
section.
    (1) Within 14 days of receiving from the FAA the final terms of a 
transaction under Sec.  93.45, the Secretary will notify

[[Page 1305]]

the parties of the Secretary's determination of whether to request and 
evaluate additional information. If the Secretary decides to request 
and evaluate additional information, the DOT will request the 
additional information.
    (2) After receiving notice of a slot transfer under Sec.  93.45, 
the FAA may not approve the transaction without further notice from the 
Secretary.
    (3) If the Secretary does not notify the parties and the FAA within 
14 days of the intent to request and evaluate additional information, 
the FAA may approve the transaction.
    (c) The procedures for objections to public disclosure of 
information at 14 CFR 302.12 do not apply to information submitted to 
the DOT under paragraphs (a) or (b) of this section. Any person seeking 
confidential treatment for information submitted to the DOT under 
paragraphs (a) or (b) of this section must clearly designate the 
information for which confidential treatment is sought by including 
appropriate markings on each page of the submission. The DOT will not 
disclose such designated information to the public, except as required 
under the Freedom of Information Act, 5 U.S.C. 552, and pursuant to the 
procedures in 49 CFR part 7.
    (d) Nothing in this section limits the authority of the Secretary 
to investigate and prohibit any unfair or deceptive practice or an 
unfair method of competition, as provided by 49 U.S.C. 41712.

Sec.  93.49  Unscheduled operations.

    (a) During the slot-controlled hours, no person may operate an 
aircraft other than a helicopter to or from JFK, EWR, or LGA unless he 
or she has received, for that unscheduled operation, a reservation that 
is assigned by the ARO or, in the case of certain public charters, in 
accordance with the procedures in paragraph (d) of this section. The 
FAA will accept requests for reservations through the e-CVRS beginning 
72 hours prior to the proposed time of arrival to or departure from the 
respective airport. Additional information on procedures for obtaining 
a reservation is available on the Internet at http://www.fly.faa.gov/ecvrs.
    (b) Reservations, including those assigned to certain public 
charter operations under paragraph (d) of this section, will be 
available to be assigned by the ARO on a 60-minute basis as follows:
    (1) At JFK, two reservations per hour during the slot-controlled 
hours.
    (2) At EWR, one reservation per hour during the slot-controlled 
hours.
    (3) At LGA, three reservations per hour during the slot-controlled 
hours.
    (c) The ARO will receive and process all reservation requests for 
unscheduled arrivals and departures and assign reservations on a first-
come, first-served basis determined by the time the request is received 
by the ARO.
    (d) One reservation per hour at LGA and two reservations per day at 
JFK and EWR will be available for assignment to certain public charter 
operations prior to the 72-hour reservation window in paragraph (a) of 
this section.
    (1) A public charter operator may request a reservation up to six 
months in advance of the date of the flight operation for a planned 
individual operation or a series of operations occurring fewer than 3 
times per month. Reservation requests must be submitted to the Federal 
Aviation Administration, Slot Administration Office, AGC-200, 800 
Independence Avenue SW., Washington, DC 20591. Requests may be made via 
facsimile at (202) 267-7277 or by email at 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 aircraft registration number of the direct air carrier; the 
date and time of the proposed operation; the airport served immediately 
prior to or after JFK, EWR, or LGA; aircraft type; and the nature of 
the operation (e.g., ferry or passenger). Any changes to an approved 
reservation must be approved in advance by the Slot Administration 
Office.
    (4) A series of operations occurring more than 3 times per month is 
required to have a slot allocated by the FAA as provided in Sec.  
93.37.
    (5) If all reservations available under paragraph (d)(1) of this 
section have been assigned, 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. Non-emergency national security, law 
enforcement, military, public aircraft, or other similar mission-
critical 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 will be available on the Internet at http://www.fly.faa.gov/ecvrs.
    (g) Notwithstanding the limits in paragraph (b) of this section, if 
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 also may be made available 
temporarily for unscheduled operations. Reservations for additional 
operations must be obtained through the ARO.
    (h) No reservations may be bought, sold, or leased.
    (i) A Reservation must be canceled if it will not be used as 
assigned.
0
3. Amend Sec.  93.123 to revise paragraphs (a), (b)(4) to read as 
follows:

Sec.  93.123  High density traffic airports.

    (a) Each of the following airports is designated as a high density 
traffic airport and, except as provided in Sec.  93.129 and paragraph 
(b) of this section, or unless otherwise authorized by ATC, is limited 
to the hourly number of allocated IFR operations (takeoffs and 
landings) that may be reserved for the specified classes of users for 
that airport:

                         IFR Operations per Hour
------------------------------------------------------------------------
                                                          Ronald  Reagan
                                                             Washington
                      Class of user                          National
                                                              Airport
------------------------------------------------------------------------
Air carriers............................................              37
Commuters...............................................              11
Other...................................................              12
------------------------------------------------------------------------

    (b) * * *
    (4) The allocation of IFR reservations for air carriers except 
commuters at Ronald Reagan Washington National Airport does not include 
extra sections of scheduled flights. The allocation of IFR reservations 
for scheduled commuters at Ronald Reagan Washington National Airport 
does not include extra sections of scheduled flights. These flights may 
be conducted without regard to the limitation upon the hourly IFR 
reservations at those airports.
* * * * *

Sec.  93.133  [Removed and Reserved]

0
4. Remove and reserve Sec.  93.133.
0
5. Amend Sec.  93.211 to revise paragraph (a) to read as follows:

[[Page 1306]]

Sec.  93.211  Applicability.

    (a) This subpart prescribes rules applicable to the allocation and 
withdrawal of IFR operational authority (takeoffs and landings) to 
individual air carriers and commuter operators at the High Density 
Traffic Airports identified in subpart K of this part.
* * * * *

Sec.  93.215, 93.217 and 93.218  [Removed and Reserved]

0
6. Remove and reserve Sec. Sec.  93.215, 93.217, and 93.218.
0
7. Amend Sec.  93.221 to remove paragraph (e).
0
8. Amend Sec.  93.223 to revise paragraph (b) to read as follows:

Sec.  93.223  Slot withdrawal.

    (b) Separate slot pools shall be established for air carriers and 
commuter operators at each airport. The FAA shall assign, by random 
lottery, withdrawal priority numbers for the recall priority of slots 
at each airport. Each additional permanent slot, if any, will be 
assigned the next higher number for air carrier or commuter slots, as 
appropriate, at each airport. Each slot shall be assigned a designation 
consisting of the applicable withdrawal priority number; the airport 
code; a code indicating whether the slot is an air carrier or commuter 
operator slot; and the time period of the slot. The designation shall 
also indicate, as appropriate, if the slot is daily or for certain days 
of the week only; is limited to arrivals or departures; and is 
allocated for international operations or for EAS purposes.
* * * * *
0
9. Amend Sec.  93.226 to revise paragraph (a)(3) introductory text to 
read as follows:

Sec.  93.226  Allocation of slots in low-demand periods.

    (a) * * *
    (3) For Ronald Reagan Washington National Airport:
* * * * *

    Issued in Washington, DC, on December 19, 2014.
Susan L. Kurland,
Assistant Secretary for Aviation and International Affairs.
Richard M. Swayze,
Assistant Administrator for Policy, International Affairs, and 
Environment.
[FR Doc. 2014-30378 Filed 1-6-15; 11:15 am]
BILLING CODE 4910-13-P