chilling, the FAA believes that even in a robust market it needs to
track and provide oversight of the market. This oversight will ensure
access remains available to all interested parties and the slots are
actually being used in the manner represented to the FAA. Since Common
and Limited Slots may be transferred in the secondary market, the
underlying policy considerations supporting the FAA's decision to award
them under a cooperative agreement rather than for monetary
consideration remain, even if the operating carrier has changed.
    Trades among marketing carriers and one-for-one trades do not have
to be advertised. Marketing carriers should not have to open up
transactions to the carrier community as a whole any more than a single
carrier should have to disclose its scheduling decisions to other
carriers. The FAA will approve these transactions, as it has done
historically. As is the case with longer-term transfers among different
carriers, the FAA only approves the transaction to maintain accurate
information on which carrier is operating a particular slot.
    Same day trades among marketing carriers that address emergency
situations such as maintenance problems or other unforeseen operational
issues may take place without prior approval by the FAA, but carriers
must notify the FAA of the trade within five business days. One-for-one
trades among carriers will not be subject to the restrictions of the
secondary market because they enhance the operational efficiency of the
airport. However, the exchange of slots on a one-for-one basis cannot
be for consideration, since they would then take on the characteristics
of lease agreements negotiated in the secondary market. Nonetheless,
carriers must notify the FAA of all such trades so that the agency can
maintain accurate information on which carrier is operating a
particular slot.
    United Parcel Service (UPS) expressed its concern that the
provisions of section 93.168 must be flexible enough to accommodate its
demand peak during the period between Thanksgiving and Christmas. It
notes that slot trades among U.S. air carriers with unified marketing
control do not need to be advertised, because the carriers are
considered to be a single unit for the purposes of this rule. Since UPS
enters into contracts with other cargo carries to handle its increased
volume, it would like to receive similar treatment for these
arrangements. UPS appears to misunderstand the rationale for our
proposal. Trades between carriers under the same marketing control are
not lease transfers within any common-sense meaning of the term. There
is, for these purposes, only a single carrier with multiple operations.
That is quite different from the situation UPS describes for its peak
period, where it enters into contracts with separately owned and
operated carriers that, for much of the year, are its competitors. In
any event, our rule should not affect UPS's ability to contract with
other carriers to handle its additional cargo, and we believe that no
change to the rule language is necessary. Although a carrier seeking to
sublet or transfer a slot will be required to post the bid through the
FAA Web site, we believe that any additional burden is minimal and
outweighed by the value of the of the transparency of the process. In
addition, the transaction is not blind; and the carrier is not required
to accept the highest submitted bid.

C. Usage Requirements

    The FAA is adopting the usage requirements proposed in the NPRM.
Specifically, Common and Limited Slots must be used 80 percent of the
time over a season unless the FAA waives the usage requirements due to
unusual and unforeseeable circumstances beyond the carrier's control.
The impact of these events must extend beyond five consecutive days.
Unrestricted Slots will not be subject to the usage requirements.
    Under this rule each slot will be assigned a corresponding
scheduled operation. Carriers will be required to report a series of
flights under a single slot number rather than in the aggregate. In
this way the FAA will be able to more accurately track a slot's usage
with the flight it was scheduled against. Carriers will be permitted to
operate a charter, maintenance, or ferry operation in lieu of a
scheduled operation and not have that operation discounted as long as
they do not abuse the privilege.
    Several commenters, including the ATA, the Port Authority, and
several carriers noted that the proposal to exclude Unrestricted Slots
from the usage requirement is inconsistent with the current practice of
requiring all slots, even those purchased in the secondary market, to
be subject to the use-or-lose requirements. These commenters suggested
that all slots should be subject to usage requirements. The Port
Authority also suggested that the proposal to exclude Unrestricted
Slots from the usage requirement could lead to the dominant carriers
placing bids with the effect of driving away or blocking new entrants
and limited incumbents from JFK and EWR. The price of a slot could be
determined by the value that a dominant carrier would assign to
eliminating competitors rather than from the use of the slot itself, as
there is no usage requirement. The Port Authority added that this could
lead to a decrease in the number of airlines and destinations served at
an airport, resulting in higher fares.
    We understand the concerns of some persons that carriers may
attempt to use Unrestricted Slots which are not subject to a usage
requirement to monopolize operations at an airport. We do not believe
this risk is sufficiently large to attach a usage requirement on
Unrestricted Slots. Since the FAA wishes to introduce a market-based
means of addressing slot allocation, both initially and in the
secondary market, the agency believes the Unrestricted Slot should be
just that--unrestricted. Furthermore, slots acquired at auction will
have a known and provable market value. That fact will be clear to the
carriers' management and stockholders, who are both likely to resist
the waste of a valuable (and salable) company asset. Our rule should
encourage the use of slots at JFK and Newark for their highest and best
purpose. The FAA does not believe there is a need to treat all slots
equally when they are not all allocated under the same terms and
conditions.\28\
---------------------------------------------------------------------------

    \28\ Unrestricted Slots could potentially have a higher value in
the secondary market than Common or Limited Slots because they are
not subject to the same restrictions.
---------------------------------------------------------------------------

    The Department has the authority to ensure that carriers do not use
their ability to permit such slots to remain idle to unlawfully
restrict competition. The Department's mandate under 49 U.S.C. 41712 to
prohibit unfair methods of competition authorizes it to stop carriers
from engaging in conduct that can be characterized as anticompetitive
under antitrust principles. If the Department is presented with clear
and convincing evidence that a carrier is hoarding slots to monopolize
operations at an airport it will pursue enforcement action against the
carrier. In order to assist the Department in determining whether a
carrier is engaging in anticompetitive behavior, we are expanding the
requirement in the regulatory text to report usage to include
Unrestricted Slots as well as Common and Limited Slots. While a carrier
would not risk losing an Unrestricted Slot for failure to report, the
FAA could take civil enforcement action consistent

with its authority to take enforcement action for any violation of a
regulatory requirement.

D. Unscheduled Operations

    As proposed in the NPRM, unscheduled operations at JFK and Newark
will be restricted. Two unscheduled operations will be permitted at
Newark between 6 a.m. and 11:59 a.m. and between 10 p.m. and 10:59
p.m.; one operation per hour will be permitted between 12 noon and 9:59
p.m. At JFK, there will be two unscheduled operations permitted per
hour between 6 a.m. and 1:59 p.m. and between 10 p.m. and 10:59 p.m.
Between 2 p.m. and 9:59 p.m., the limit is one unscheduled operation.
Under today's rule, reservations are required to use the airport
(except for emergency operations) and may be obtained up to 72 hours in
advance. The reservations will be available on an hourly, rather than
half-hourly, basis. This will provide additional flexibility with
minimal operational impacts overall.
    To the extent Air Traffic Control (ATC) can handle additional
requests (for example in good weather), it will do so without regard to
the reason for the request. In addition, ATC may decide special
circumstances justify an additional flight. However, there is no
guarantee that the FAA will accept more than one or two reservations
per hour, and the determination to handle more traffic would likely be
made on that day. Reservations for all non-emergency flights would
still be required. The FAA will allow public charter operators to
reserve up to 25 percent of available allowable afternoon and evening
reservations up to six months in advance. If more than one public
charter operation is desired for a given hour, the public charter
operator without the advance reservation could attempt to secure a
reservation within the three-day window that is available for all other
unscheduled operations.
    A large portion of the unscheduled operations comes from general
aviation, and Aircraft Owners and Pilots Association (AOPA) stated in
its comments that our rule will cause an increase in the number of
operations at airports elsewhere in the region, to levels beyond the
capacity of those airports. While we agree that there may be some
increased demand for other airports, we are aware of no reason to
believe this demand will exceed the capacity available. We note that no
other airports in the region have expressed any such concerns in
comments to this rulemaking.
    The FAA does not believe that public charter operators and on
demand charter operators should be treated similarly. Unlike on demand
charters, public charters may not be marketed until prospectuses are
filed with the Department and they are marketed to individual consumers
long in advance of the dates of operation. Public charters are also
generally limited to operating from larger airports. Thus, in the New
York area, public charters cannot be operated from many of the local
airports, such as Teterboro, that are available to on demand charter
flights. For these reasons, we believe public charter operators should
have a significantly earlier opportunity to obtain slots for their
operations under this rule than on demand charters.
    Additionally, unscheduled flights produce roughly the same delay
costs as scheduled flights at the same time. However, unscheduled
flights can be accommodated if operators are flexible in their arrival
or departure times. In response to public comment we have assessed the
impact on business if unscheduled flights are restricted based upon the
FAA's record of actual operations in the agency's Enhanced Traffic
Management System (ETMS) for year ended May 31, 2008. FAA has indicated
that it should be able to accommodate more unscheduled operations in
visual meteorological conditions (VMC) (capacity permitting). In the
analysis of ETMS, FAA assumes that unscheduled flights would be
accommodated in VMC weather or if there is available capacity in an
adjacent hour (one hour either side of the actual hour of operation in
the data.) based on the year June 1, 2007 through May 31, 2008, ETMS
data show the number of unscheduled operations per year where there was
insufficient capacity in the adjacent two hours to handle demand beyond
the levels specified in today's rule was 87 at Newark and 23 at JFK.
This represents well below one operation per day. These flights may
have to divert to another airport, change their time of arrival or
departure by more than one hour or be cancelled. The concern about peak
seasonal demand expressed above by UPS also was raised by comments to
this portion of the NPRM. NACA, the Cargo Airline Association, and four
carriers believe that the limits in the rule are insufficient to meet
demand in the period leading up to the Christmas holiday. With only one
reservation per hour during certain hours, Polar and the Cargo Airline
Association (CAA) also argue that the rule effectively prohibits any
unscheduled cargo flights. Although there are other airports in the
region, NACA claims that they do not offer a viable alternative for a
commercial service operation.
    While we sympathize with these concerns, we do not believe that
they will materialize in the dire manner predicted. The FAA has
reviewed cargo operations at JFK and Newark during the peak holiday
season, and we believe that capacity exists on various days or through
temporary returns by other carriers to accommodate some flights above
historically operated levels. ETMS data collected during the holiday
period November 26, 2007 through December 31, 2007 shows that at Newark
75 percent of the controlled hours had available capacity for
unscheduled operations (i.e., at least one available reservation ) and
at JFK 82 percent of the controlled hours had available capacity for
unscheduled operations. In addition, most cargo operators have already
received temporary slot allocations from the FAA for the November-
December 2008 period under the existing orders and there is no reason
to believe this would not remain a viable option under today's rule.
Demand for passenger flights is lower in portions of November and
December, and the rule allows carriers to return slots to the FAA for a
portion of a scheduling season without subjecting the slots to the use-
or-lose requirements if they provide notice prior to the commencement
of the applicable scheduling season. Additionally, the unscheduled
reservation system for JFK and Newark grants authority to the Vice
President, System Operations Services, to allow additional reservations
for unscheduled operations. These can be authorized if there are
available carrier slots, such as those temporarily returned to the FAA,
or based on a finding that additional flights would not significantly
increase delay. The FAA will regularly assess operations on a daily
basis to determine if additional reservations could be made available
for unscheduled operations. We note as well that, under the previous
rules at JFK and Chicago O'Hare, cargo and passenger carriers routinely
requested slots for additional operations. Carriers often have
scheduling flexibility, and the FAA has worked with them when possible
to time flights during periods of minimal operational impact. Our rule
here will provide additional flexibility to carriers, by making it
easier for them to purchase or sublease slots to supplement any direct
slot allocation from the FAA. Short-term slot trades and leases are
common at U.S. slot controlled airports and are often used to
accommodate different scheduling patterns by carriers. Therefore, we do

not believe that there is any need to include any special provisions
for holiday operations.

E. Sunset Provision

    This rule terminates at 11 p.m. on March 30, 2019. As we stated in
the NPRM, this approach will allow for future determinations by the FAA
as to whether a cap is still needed and, if so, whether changes are
needed to more efficiently manage the scarce resource. When the New
York/New Jersey/Philadelphia Metropolitan Area Airspace Redesign
project and NextGen technologies are fully implemented, we expect they
will significantly alleviate delays and improve air traffic efficiency.
When we see the impact of these improvements over the next ten years,
we will take that into account along with our experience with
effectiveness of the rule on the distribution of slots and entry into
JFK and Newark.
    This rule will expire in ten years. One of the criticisms of the
HDR was that it was a temporary rule that has lasted almost 40 years.
As such, it became difficult to manage, particularly as it was amended
to address changes in business models. We believe the public interest
is better served by directly providing the rule will sunset in ten
years. This approach will allow for future determinations by the FAA as
to whether a cap is still needed and, if so, whether changes are needed
to more efficiently allocate and constrain the scarce resource. At
present it is impossible to determine what changes in business models
may occur over the next ten years. In addition, full implementation of
the New York/New Jersey/Philadelphia Metropolitan Area Airspace
Redesign project and NextGen technologies are expected to mitigate and
improve air traffic efficiency within the next ten years, and we should
not prejudge the market response.
    The ATA questioned why this rule is implemented on a temporary
basis if the agency believes it represents the best solution for the
airport. Additionally, several commenters noted that temporary slot
lives reduce the value of slots. They argued the short-term nature of
the proposal and the uncertainty of future slot operations at JFK and
Newark would have a chilling effect on the value given to slots and
gates in relation to capital flow and collateralization. Several
carriers were concerned that financial institutions would lose
confidence in slots as collateral and reduce or eliminate a carrier's
ability to fully collateralize the asset.
    The FAA believes providing a date certain through which slots will
be awarded actually increases the certainty of the holding. The
assumption seems to be that regulatory inactivity is the solution to
all the carriers' concerns, and that therefore, the FAA should just
maintain the status quo. This is not an acceptable solution. The
capping orders at JFK and Newark temporarily froze the slot allocations
at the airports to serve as temporary solutions. The FAA believes it is
important for carriers and those who provide financing to realize that
slots at a constrained airport are not intended to be a permanent
response to solving congestion, with the incumbents being afforded
unlimited rights.

F. Other Issues

1. Withdrawal for Operational Need and for Future Reductions in the Cap
    The FAA is adopting its proposal to retain the right to temporarily
withdraw Limited and Common Slots for operational need. We requested
comment on whether the FAA should establish a level of slots that would
not be subject to withdrawal or temporary suspension to fulfill
operational needs. We were concerned about the possibility of
marginalizing or excluding small operators from the airport. No
comments were received on this issue. For that reason, we conclude that
it is not necessary to establish such a reserve.
    The FAA has historically retained the right to withdraw slots for
operational need, although it has rarely, if ever, been exercised. This
provision is included to allow the FAA to immediately address a
situation where it cannot handle the usual amount of traffic on a
temporary basis. This provision would typically be invoked because of
problems with the landside infrastructure, such as a closed runway or
terminal, or changes to air traffic control procedures that would
result in sustained capacity reductions.
    The FAA is also retaining the right to further reduce the cap on
operations should the airport remain unduly delayed and the
Administrator determines that the cap on operations remains too high.
The FAA anticipates it would call for a Schedule Reduction Meeting
should further reductions be warranted. In any case, the FAA would
fully meet its obligations under the APA at that time, and this rule
does not provide a means for further cap reductions absent subsequent
action on the part of the agency. For the reasons discussed earlier,
this provision is limited to Common Slots.
2. Impact of the Final Rule on the Port Authority's Ability To Run Its
Airport
    The ACI-NA and the Port Authority both claim that the proposal to
auction slots interferes with the Port Authority's ability to run the
airport and constitutes an impermissible infringement on the Port
Authority's right to collect revenue for use of the airport facilities.
The ACI-NA believes that market-based access issues should remain
within the exclusive purview of the airport's proprietor. The Port
Authority expressed similar sentiments in its comments to the NPRM
suggesting it develop a method of allocation at the airport.
    The FAA has never proposed to deny carriers gate access at JFK or
Newark, nor has it proposed to otherwise address issues associated with
the facilities at the airport. The FAA recognizes that the Port
Authority bears responsibility for the terminal-side portion of the
airport. However, it is the FAA, and not the Port Authority, that has
responsibility for managing the airspace. While the Port Authority
claims that slot auctions would somehow be disruptive to the airport,
it fails to explain how, in terms of making arrangements for gates and
other airport facilities, acquiring a slot via an auction is any
different from acquiring a slot via the secondary market, or for that
matter, via a lottery, as was the case under the HDR.
    To the extent public policy goals could arguably be better achieved
by an airport proprietor rather than the FAA, the agency notes that
this rule provides for no special carve-outs. To the extent an airport
could address these policy issues through a market-based, or even
administratively based mechanism, it is free to do so consistent with
its grant obligations and any other restrictions imposed by Federal
law, policy and our international obligations.
3. Minimum Usage Requirements for Slots Acquired Through Sublease
    In the NPRM, the FAA proposed to provide for a 90 day waiver of the
minimum usage requirement for common and limited slots acquired by
sublease. We have subsequently determined that there is no need for
such a provision. The starting date of a sublease is fully within the
control of the contracting carriers and can be easily negotiated to
address any possible concerns related to starting new service.
Moreover, in the event of highly unusual or unpredictable
circumstances, a carrier may apply under Sec.  93.170(c) for a waiver
of the minimum usage requirements.

V. Potential Loss of Service to Small Communities

    Several commenters expressed their concern that this rule may
adversely affect service to small communities because the rule will
make operating at JFK and EWR more expensive. AAAE suggests that this
will serve as a disincentive for airlines to bid for slots for flights
to small communities because the smaller number of seats that typically
fly to small communities. Several foreign carriers further note that a
reduction in service to small communities may negatively affect their
opportunities to provide a wide variety of services with their U.S.
carrier partners. ACI-NA suggests that the FAA take action to protect
services to small communities.
    Although not directly related to the loss of service to small
communities, the FAA notes the Canadian Airports Council (CAC)
expressed concern that air service to Canada would be jeopardized
because the major Canadian cities are much smaller than their U.S.
counterparts and cannot sustain larger aircraft. The CAC further
suggests that that we grant an exemption to the rule for international
flights, including transborder flights. This rule does not violate our
international obligations, we will therefore not grant such an
exemption.
    The FAA recognizes the importance of small community service at JFK
and Newark and believes that this rule will provide adequate
opportunity for services to small communities because 90 per cent of
slots will not be affected, and the remaining 10 percent of slots will
be auctioned over the first five years of the rule. Under these
conditions carriers will have the opportunity to adjust their services
to continue services as the market warrants. Furthermore, the agency
continues to believe that a system whereby upgauging to larger aircraft
is completely voluntary decreases the likelihood of a whole-sale
withdrawal from smaller markets.
    Although there may be a slight reduction to small community service
by not dedicating slots for those particular cities, we believe market
conditions and fuel prices are the primary motivation for any reduction
in service, and not a consequence of federal action in this rule. Due
to these facts, and the Administration's decision to rely on the market
to allocate slots according to their highest and best use, we do not
believe it is appropriate to develop a separate class of slots
specifically for use to and from small communities. The FAA wishes to
avoid any unintended consequences on a carrier's marketing and network
decisions that could result from set asides or exemptions for small
communities.

VI. Regulatory Notices and Analyses

    Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs that each Federal agency
shall propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs. Second,
the Regulatory Flexibility Act of 1980 requires agencies to analyze the
economic impact of regulatory changes on small entities. Third, the
Trade Agreements Act (19 U.S.C. 4 2531-2533) prohibits agencies from
setting standards that create unnecessary obstacles to the foreign
commerce of the United States. In developing U.S. standards, the Trade
Act requires agencies to consider international standards and, where
appropriate, to be the basis of U.S. standards. Fourth, the Unfunded
Mandate Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare
a written assessment of the costs, benefits, and other effects of
proposed or final rules that include a Federal mandate likely to result
in the expenditure by State, local, or tribal governments, in the
aggregate, or by the private sector, of $100 million or more annually
(adjusted for inflation).
    In conducting these analyses, FAA has determined this final rule
(1) has benefits that justify its costs, is a ``significant regulatory
action'' as defined in Sec.  3(f) of Executive Order 12866, which is
also known as an ``economically significant regulation action,'' and is
``significant'' as defined in DOT's Regulatory Policies and Procedures;
(2) would not have a significant economic impact on a substantial
number of small entities; (3) would not adversely affect international
trade; and (4) would not impose an unfunded mandate on State, local, or
tribal governments, or on the private sector. These analyses, set forth
in this document, are summarized below.

Total Costs and Benefits of This Rulemaking

    Through implementation of an auction, FAA estimates that this final
rule will result in a long-term improvement in the allocation of scarce
slot resources at JFK and Newark. The estimated present value of net
benefits of improved slot allocation by auctions is $272 million at JFK
and $225 million at Newark from 2009 to 2019. The costs of the rule,
with a present value of $34 million at JFK and $20 million at Newark,
are due to the design, implementation and participation in an auction
of slots. These costs assume that the full cost of setting up the
auction mechanism and participating in the auctions are individually
borne at each airport; in fact, if auctions are conducted at more than
one airport in the New York area, the costs of the setting up and
participating in the auctions could be shared among the users of the
airports and would be lower on a per airport basis. The net benefits of
the auctions are, therefore, $238 million at JFK and $205 million at
EWR.
    This regulatory impact analysis assumes as a baseline that in the
absence of this rulemaking, the FAA would not otherwise impose long-
term caps on aircraft operations at JFK and Newark. Therefore, the FAA
estimates that, through the long-term implementation of a cap on
aircraft operations, this final rule will result in about a 25 percent
reduction in the average delay per operation at JFK relative to a
situation with no cap. After allowing for the lost consumer and
producer surplus due to a reduction in air service caused by the caps,
the net value of the savings in average delay attributable to the cap
generates a present value net benefit of about $1,629 million from 2009
to 2019. At Newark, this final rule will result in about a 23 percent
reduction in the average delay per operation at Newark relative to a
situation with no cap, generating a present value net benefit (after
deducting lost producer and consumer surplus from reductions in air
service) of about $634 million from 2009-2019. The benefits are
estimated by comparing the no-rule scenario (similar to the situation
at JFK and Newark in August 2007) with the proposed cap.

Who Is Potentially Affected by This Rulemaking

     Operators of scheduled and non-scheduled, domestic and
international flights, and new entrants who do not yet operate at JFK
or EWR.
     All communities, including small communities with air
service to JFK or EWR.
     Passengers of scheduled flights to JFK or EWR.
     The Port Authority of New York and New Jersey, which
operates the airports.
     Passengers on scheduled and unscheduled flights in New
York airspace.

Key Assumptions

     Baseline JFK: No operating authorizations or caps (the
rule will generate approximately $1,867 billion in net benefits
compared to this case, of

which approximately $238 million is due to reallocation benefits
associated with the auctions and the balance due to the caps).
     Baseline EWR: No operating authorizations or caps (the
rule will generate approximately $839 billion in net benefits compared
to this case, of which approximately $205 million is due to
reallocation benefits associated with the auctions and the balance due
to the caps).
     A cap on operations from 81 scheduled operations plus one
to two unscheduled operations per hour at each airport, which features:
     100 percent of slots \29\ held by carriers with fewer than
21 slots at each airport will be reassigned to the carrier with 10
years of life;
---------------------------------------------------------------------------

    \29\ A ``slot'' is defined as the right to land or depart (not
both) in IFR conditions in a 30-minute time window.
---------------------------------------------------------------------------

     For holders with 21 or more slots, 90 percent of slots
above the baseline of 20 slots will be reassigned to the carrier with
leases of 10 years and ten percent of slots above the baseline will be
assigned to the carrier with shorter leases and then auctioned over
five years.
     For the purposes of this evaluation, the effective date is
(11/1/08).

Other Important Assumptions

     Discount Rates--7%
     Period of Analysis--2009 through 2019 (The rule will
sunset in ten years)
     Assumes 2008 Constant Year Dollars.
     Passenger Value of Travel Time--$30.02 per hour.\30\
---------------------------------------------------------------------------

    \30\ GRA, Incorporated ``Economic Values for FAA Investment and
Regulatory Decisions, A Guide'', prepared for FAA Office of Aviation
Policy and Plans, (October 3, 2007). The passenger value of time
reflects a mix of business and leisure travel developed for the New
York area.
---------------------------------------------------------------------------

Alternatives We Have Considered

     No caps: The FAA expects that without regulatory caps,
operators would expand operations at both airports above current
levels, and hence further worsen airport delays.
     Caps without auctions: This alternative would impose caps
at 81 scheduled operations plus one to two unscheduled operations per
hour; it would implicitly assign operations to current holders of
operating authorizations at the airports.
     Caps with auctions: This alternative would permanently
impose caps at 81 scheduled operations plus one to two unscheduled
operations per hour; it would assign the large majority of operations
to current holders of operating authorizations at the airport; and
would auction a small but consistent number of slots for the first five
years of the rule.

Benefits of This Rulemaking

    Since publishing the NPRM, we have updated our benefit estimates,
with a significant upward adjustment to the cap benefits at JFK. This
adjustment was necessary because the FAA identified a calculation error
attributable to an incorrect reference to an output value in the
airport delay model. We also made a smaller, downward adjustment to the
Newark cap benefits. Finally, we reduced the estimated net benefits of
improved slot allocation caused by the auctions at both airports
relative to those recorded in the NPRM. These latter reductions
resulted from the higher estimates of airline auction participation
costs that we used in the final regulatory evaluation for this final
rule.
    A detailed discussion of the applied methodology as related to
consumer and producer surplus can be found in the final regulatory
evaluation. The primary benefits of this rulemaking are due to the
delay reduction from the caps on operations and an improvement in the
efficiency of allocation of scarce slot resources through the use of an
auction mechanism and secondary slot subleasing markets characterized
by clearly defined property rights.

Costs of This Rulemaking

    The major costs of this final rule are the costs to the public and
private sectors of designing, implementing and participating in the
auction. Additionally, the implementation of caps under this rulemaking
will lead to a reduction in flights into JFK and Newark compared to
what would occur without the caps. The FAA has estimated the value of
these scheduled flight reductions and has deducted them from the delay
benefits of the caps at each airport to calculate overall net benefits
of the caps.

Paperwork Reduction Act

    This proposal contains the following new information collection
requirements. As required by the Paperwork Reduction Act of 1995 (PRA)
(44 U.S.C. 3507(d)), the FAA has submitted the information requirements
associated with this proposal to the Office of Management and Budget
for its review.
    The ATA claimed that the FAA's estimate of the paperwork burden of
the rule is ``totally flawed'' and understated. It cited what it
believed to be an inconsistency in the PRA estimates for both JFK and
EWR in which the first year burden hours were not added to recurring
annual hours in the NPRM. In fact, the FAA believed it was clear in its
presentation that the first year and annual recurring numbers were
additive for the first year. However, to avoid misunderstanding, the
combined first year and recurring year burdens for both airports are
given a separate line item in this final rule.
    The ATA claimed that realistically, management of this program will
take at a minimum 50% of a management employee's time and could require
a full time employee, depending on the final rule. The FAA notes that
the analysis of paperwork burden does not attempt to include the time
required to participate in auctions, only the reporting requirements to
the government. The full assessment of time that an airline might spend
in its voluntary participation in an auction is provided in the Final
Regulatory Evaluation of this rule. However, the FAA has added a
significant recurring burden of 32 hours per carrier per year at each
airport in which an auction occurs (inserted in the paperwork
requirements of Section 93.165(c) below). The FAA made this change to
reflect the paperwork required if a carrier actually participates in an
auction. This addition of time to the PRA estimate leads to a
considerable increase in the total labor hours assigned to PRA purposes
under this rule.
    The ATA also noted that there will be significant legal fees
associated with negotiating, drafting, executing and monitoring the
secondary market. The FAA believes that the reporting labor
requirements estimated under Section 93.168 for the PRA reflect the
actual reporting requirement burden, noting that the negotiating of the
sublease itself is not an activity involving reporting to the
government. The FAA reemphasizes that participation in the auction and
secondary market are not requirements of this rule. A carrier with
existing slots at JFK and EWR is permitted to continue operations at
the airport using the common slots provided to them as part of this
final rule. Carriers will only need to engage in the secondary market
and auctions if they choose to buy, lease or sell slots.
    The information requirements in today's rule are similar to those
specified in the just-issued final rule for congestion management at
LaGuardia Airport. The FAA has modified these requirements for JFK and
EWR and summarized them below.
    Title: Congestion Management Rule for John F. Kennedy International
Airport and Newark Liberty International Airport.

    Summary: The FAA is assigning the majority of operational slots at
JFK and Newark to current occupants and developing a secondary market
by annually auctioning off a limited number of slots at each airport.
This rule also contains provisions for use-or-lose and withdrawal for
operational need. The rule will sunset in ten years. More information
on the requirements adopted today is detailed elsewhere in today's
notice.
    Use of: The information is reported to the FAA by scheduled
operators holding slots at JFK and Newark. The FAA logs, verifies, and
processes the requests made by the operators.
    This information is used to allocate, track usage, withdraw, and
confirm transfers of slots among the operators and facilitates the
transfer of slots in the secondary market. The FAA also uses this
information in order to maintain an accurate accounting of operations
to ensure compliance with the operations permitted under the rule and
those actually conducted at the airports.
    Respondents: The respondents to the information requirements in
today's rule are scheduled carriers with existing service at JFK and
Newark, carriers that plan to enter the JFK and Newark markets (by
auction or secondary market), and carriers that enter the JFK and
Newark market in the future. There are currently seventy-seven (77)
carriers with existing scheduled service at JFK and thirty-nine (39)
carriers with existing scheduled service at Newark. Various carriers
included in these totals have service at both airports.
    Frequency: The information collection requirements of the rule
involve scheduled carriers notifying the FAA of their use of slots.
Each carrier must notify the FAA of its: (1) Designation of 50 percent
of its Limited Slots, if applicable, as well as auction paperwork
requirements; (2) request for confirmation to sublease slots; (3)
consent to transfer slots under the transferring Carrier's marketing
control; (4) requests for confirmation of one-for-one slot trades; (5)
slot usage (operations); (6) request for assignment of slots available
on a temporary basis; and (7) usage rate as detailed in the rule.
    Annual Burden Estimate: The annual reporting burden for each
subsection of the rule is presented below. Annual burden estimates
presented in today's notice are based on burden estimates from the
final rule ``Congestion Management Rule for LaGuardia Airport'' (Docket
No. FAA-2006-25709; Notice No. 08-04).
    The burden is calculated by the following formula:
    Annual Hourly Burden = ( of respondents) * (time involved)
* (frequency of the response).

Sec.  93.164(c)(2)  Categories of Slots: A Carrier shall designate 50
percent of its Limited Slots

JFK

    (4 carriers with Limited Slots) * (80 hours per submittal) = 320
hours.
    Based on the current allocation of Operating Authorizations and the
level of baseline operations each carrier would be assigned under
today's proposal, we assumed the four carriers with the most operations
at JFK would expend up to ten days of planning time each, potentially
80 hours, to develop and submit their designations of 50 percent of its
Limited Slots, for a total of 320 hours. This designation would occur
once, ten days after the final rule effective date.

Newark

    (1 carrier) * (240 hours per submittal) = 240 hours.
    (5 carriers) * (80 hours per submittal) = 400 hours.
    Total Annual Hourly Burden = 640 hours.
    Based on the projected allocation of Operating Authorizations and
the level of baseline operations each carrier will be assigned under
today's rule, we assumed that one carrier, Continental Airlines, with
the most operations at Newark would expend up to 30 days of planning
time, potentially 240 hours, to develop and submit its designation of
50 percent of its Limited Slots. The remaining five carriers required
to designate Limited Slots would each expend up to 10 days of planning
time, potentially 80 hours each, to develop and submit their
designation of 50 percent of their Limited Slots. These five carriers
would therefore need 400 hours. In total, the six carriers at Newark
required to designate Limited Slots would require 640 hours of effort
to make the designation. This designation would occur once, ten days
after the final rule effective date.

Section 93.165(c) Initial Assignment of Slots

JFK

    (77 carriers) * (32 hours per carrier) * (1 occurrence per year) =
1,462 hours
    Whereas the FAA does not believe that all carriers, or even a
majority, will participate in each auction, we have assumed for this
exercise that the 77 carriers operating at JFK will expend be required
to allocate some time to develop and submit the paperwork required if a
carrier actually participates in an auction. Specifically, this
paperwork includes the Auction Expression of Interest and the bid file
to FAA auction system. These paperwork submission requirements will be
filed electronically. Note that the estimate below does not include
auction participation labor and costs. Participation in auctions is
voluntary and these hours and costs (which encompass those for
paperwork requirements) are quantified and treated as a cost of the
rule in the Final Regulatory Evaluation.

Newark

    (39 carriers) * (32 hours per carrier) * (1 occurrence per year) =
1,248 hours

Section 93.166(b)-(c) Assignment of New or Returned Slots

    We made no assumptions about additional workload for carriers at
either airport associated with the IATA-like administrative process for
assigning new or returned slots. Workload would vary depending on how
many (if any) new or returned slots were to develop at either airport
over the 10 year period of the proposed rule. In any case, carriers are
already familiar with and use IATA-like allocation methods and would
handle them in the course of normal operations at JFK and Newark.

Section 93.168 (b),(d),(f) Sublease and Transfer of Slots

JFK

    (18 carriers) * (1.5 hours per submittal) * (4 occurrences per
year) = 108 hours.
    (59 carriers) * (1.5 hours per submittal) * (2 occurrences per
year) = 177 hours.
    Total Annual Hourly Burden = 285 hours.
    Based on burden estimates from ``Congestion Management Rule for
LaGuardia Airport,'' we assumed the 77 carriers operating at JFK would
expend one and one half hours for each occurrence of a lease or
transfer of a slot. For each operator with 6 or more slots (18 carriers
total), we assumed that a lease or transfer of a slot would occur on
average quarterly. For each operator with fewer than 6 slots (59
carriers total), we assumed that a lease or transfer of a slot would
occur on average biannually. The total annual hourly burden for all
carriers collectively would be 285 hours.

Newark

    (1 carrier) * (1.5 hours per submittal) * (16 occurrences per year)
= 24 hours.
    (12 carriers) * (1.5 hours per submittal) * (4 occurrences per
year) = 72 hours.

    (26 carriers) * (1.5 hours per submittal) * (2 occurrences per
year) = 78 hours.
    Total Annual Hourly Burden = 174 hours.
    As with JFK, we assumed the 39 carriers operating at Newark would
expend one and one half hours for each occurrence of a lease or
transfer of a slot. For the largest operator, we assumed that a lease
or transfer of four slots would occur on average quarterly. For those
operators at Newark with 6 or more slots (12 carriers total, excluding
Continental Airlines), we assumed that a lease or transfer of a slot
would occur on average quarterly. For each operator with fewer than 6
slots (26 carriers total), we assumed that a lease or transfer of a
slot would occur on average biannually. The total annual hourly burden
for all carriers collectively would be 174 hours.

Section 93.169 (b), (d) One-for-One Trades of Slots

JFK

    (18 carriers) * (1.5 hours per submittal) * (4 occurrences per
year) = 108 hours.
    (59 carriers) * (1.5 hours per submittal) * (2 occurrences per
year) = 177 hours.
    Total Annual Hourly Burden = 285 hours.
    Based on burden estimates from ``Congestion Management Rule for
LaGuardia Airport,'' we assumed the 77 carriers operating at JFK would
expend one and one half hours on paperwork for each occurrence of a
one-for-one trade of a slot. For each operator with 6 or more slots (18
carriers total), we assumed that a one-for-one slot trade would occur
on average quarterly. For each operator with fewer than 6 slots (59
carriers total), we assumed that a one-for-one slot trade would occur
on average biannually. The total annual hourly burden would be 285
hours.

Newark

    (1 carrier) * (1.5 hours per submittal) * (16 occurrences per year)
= 24 hours.
    (12 carriers) * (1.5 hours per submittal) * (4 occurrences per
year) = 72 hours.
    (26 carriers) * (1.5 hours per submittal) * (2 occurrences per
year) = 78 hours.
    Total Annual Hourly Burden = 174 hours.
    As with JFK, we assumed the 39 carriers operating at Newark would
expend one and one half hours on paperwork for each occurrence of a
one-for-one trade of a slot. For the largest operator, we assumed that
a one-for-one trade of four slots would occur on average quarterly. For
those operators at Newark with 6 or more slots (12 carriers total,
excluding Continental Airlines), we assumed that a one-for-one slot
trade would occur on average quarterly. For each operator with fewer
than 6 slots (26 carriers total), we assumed that a one-for-one slot
trade would occur on average biannually. The total annual hourly burden
would be 174 hours.

Section 93.172(a)-(b) Reporting Requirements

JFK

    (77 carriers) * (1.5 hours per submittal) * (4 occurrences per
year) = 462 hours
    This estimate is based on burden estimates from the ``Congestion
Management Rule for LaGuardia Airport'' (Docket No. FAA-2006-25709;
Notice No. 08-04). We assume the 77 carriers operating at JFK would
expend, on average, one and one half hours two times per summer and
winter season to submit the data required by Sec.  93.172.

Newark

    (39 carriers) * (1.5 hours per submittal) * (4 occurrences per
year) = 234 hours.
    This estimate is based on burden estimates from the ``Congestion
Management Rule for LaGuardia Airport'' (Docket No. FAA-2006-25709;
Notice No. 08-04). We assume the 39 carriers operating at Newark would
expend, on average, one and one half hours every two months to submit
the data required by Sec.  93.172.

Summary

JFK

    Total First Year Hourly Burden--320 Hours.
    Total First Year Hourly Burden Plus Recurring Cost in First Year--
3,816 Hours.
    Total Recurring Annual Hourly Burden (per year for 10 years)--3,496
Hours.

Newark

    Total First Year Hourly Burden--640 Hours.
    Total First Year Hourly Burden Plus Recurring Cost in First Year--
2,470 Hours.
    Total Recurring Annual Hourly Burden (per year for 10 years)--1,830
Hours.
    The burden estimates for JFK and Newark do not include the time
required to participate in the annual auctions. The FAA provides
participation hour and cost estimates in its Final Regulatory
Evaluation for this rule.
    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.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a
principle of regulatory issuance that agencies shall endeavor,
consistent with the objective of the rule and of applicable statutes,
to fit regulatory and informational requirements to the scale of the
business, organizations, and governmental jurisdictions subject to
regulation.'' To achieve that principle, the RFA requires agencies to
solicit and consider flexible regulatory proposals and to explain the
rationale for their actions. The RFA covers a wide-range of small
entities, including small businesses, not-for-profit organizations, and
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or
final rule would have a significant economic impact on a substantial
number of small entities. If the agency determines that it would, the
agency must prepare a regulatory flexibility analysis as described in
the Act.
    However, if an agency determines that a proposed or final rule is
not expected to have a significant economic impact on a substantial
number of small entities, section 605(b) of the 1980 RFA provides that
the head of the agency may so certify and a regulatory flexibility
analysis is not required. The certification must include a statement
providing the factual basis for this determination, and the reasoning
should be clear. The basis for such FAA determination follows.
    The final rule most directly affects four scheduled operators at
JFK (Delta Air Lines, JetBlue Airways, American Airlines, and United
Airlines) and six scheduled operators at Newark (Continental Airlines,
American Airlines, United Airlines, Delta Air Lines, U.S. Airways, and
Northwest Airlines). These carriers will receive one or more Limited
Slots. None of these carriers are small businesses. However, the FAA
considered that some small regional operators affiliated with these
carriers and using slots provided by these carriers could be affected.
Based on a review of the number of employees for each scheduled
operator, the FAA

found that only one scheduled operator (CommutAir) at JFK, and none at
Newark, are considered small by Small Business Administration size
standards (in this case, firms with 1,500 or fewer employees).
CommutAir operates under the name Continental Connection for
Continental Airlines. Continental Airlines has fewer than 20 operations
per day at JFK and therefore neither it nor CommutAir is affected by
this rule.
    As discussed in more detail in the final rule, several commenters
expressed their concern that this rule may adversely affect service to
small communities because the rule will make operating at JFK and EWR
more expensive, particularly because such communities are served by
smaller aircraft with higher per seat costs.
    The FAA believes that this rule will provide adequate opportunity
for services to small communities because more than 90 percent of slots
at JFK and EWR will not be affected, and the remaining less than 10
percent of slots will be auctioned in 2 percent increments over the
first five years of the rule. Moreover, once auctioned, a carrier may
or may not upgauge a slot. The agency believes that a system whereby
upgauging to larger aircraft is completely voluntary decreases the
likelihood of a wholesale withdrawal from smaller markets.
    There may be a slight reduction in small community service by not
dedicating slots for those particular cities, but we believe market
conditions and fuel prices are the primary motivation for any reduction
in service rather than a consequence of federal action in this rule. We
believe market forces will generate appropriate allocations of slots
and do not believe it is appropriate to develop a separate class of
slots specifically for use to and from small communities.
    Using Enhanced Traffic Management System (ETMS) data, the FAA has
determined that there are approximately 54 identifiable unscheduled
operators at JFK and 61 identifiable unscheduled operators at Newark
who could be affected by this rule. While some of these operators may
be small businesses, the FAA does not believe they will be
significantly impacted by this rulemaking. These operators typically
have greater flexibility to adjust operations and carry out very few
operations during peak hours compared to scheduled opearators. During
peak hours in the summer of 2007, there were fewer than two average
unscheduled operations per hour at each airport, whereas the proposed
rule would allow 1 to 2 operations per hour. In summary, while the
final rule reduces the number of unscheduled operations per hour, it
does not significantly affect the overall number of current unscheduled
operations that take place at each airport.
    Using 2007 Census data, the FAA has also reviewed whether there
would be interruptions to service to communities with a population of
less than 50,000. We do not know if there will be any service
interruptions as a result of the rule. In the IRE, we reviewed
population statistics for every city served from JFK and Newark in
August 2007 (the base for initial allocation of slots under the
proposal) and found none with a population of less 50,000. The ATA,
however, identified two cities--Bangor, Maine, and Burlington,
Vermont--that it stated fell below 50,000 in population. The FAA notes,
however, that the metropolitan areas of these cities are well above
50,000, with Bangor at 91,000 as of 2000 and Burlington at 169,000.
    The ATA identified an inconsistency in the definition of small
community that was used in the NPRM and the IRE. The FAA concedes that
the definition of a small community used in the IRE was too expansive,
involving any community served by a small or non-hub airport. The
correct definition for this rulemaking is the 50,000 threshold value
used in the NPRM.
    Therefore, the FAA certifies that this rule will not have a
significant economic impact on a substantial number of small entities.

International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing any 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 or engaging in related activities is not considered as
creating unnecessary obstacles to the foreign commerce of the United
States, so long as the standards and activities have a legitimate
domestic objective, such as the protection of safety, and do 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
notes the rule to establish slots and limited auctions of slot leases
at JFK and Newark is necessary for the efficient utilization of the
national airspace system, and has assessed the effects of this
rulemaking to ensure that the final rule will not impose costs or
barriers to international entities within the national airspace system.
    Foreign entities at both JFK and Newark will not have any slots
classified as Limited Slots. Foreign carriers might benefit from the
rule if they choose to participate in the proposed auction to acquire
additional slots or to sublease slots in the secondary market. Several
foreign carriers further note that a reduction in service to small
communities could negatively affect their opportunities to provide a
wide variety of services with their U.S. carrier partners. As explained
above, the FAA believes that this rule will provide adequate
opportunity for services to small communities. Foreign trade will not
be adversely affected.

Unfunded Mandate Assessment

    The Unfunded Mandate Reform Act of 1995 (the Act) is intended,
among other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and tribal governments. Title II of the Act
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed or final agency rule
that may result in an expenditure of $100 million or more (adjusted
annually for inflation) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently
uses an inflation-adjusted value of $136.1 million in lieu of $100
million. This final rule does not contain such a mandate. The
requirements of Title II do not apply.

Executive Order 13132, Federalism

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

Environmental Analysis

    FAA Order 1050.1E, ``Environmental Impacts: Policies and
Procedures'' identifies FAA actions that are normally categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act (NEPA) in the absence of extraordinary circumstances. The FAA has
determined that this rulemaking qualifies for the categorical
exclusions

identified in paragraph 312d ``Issuance of regulatory documents (e.g.,
Notices of Proposed Rulemaking and issuance of Final Rules)'' covering
administration or procedural requirements (does not include Air Traffic
procedures; specific Air Traffic procedures that are categorically
excluded are identified under paragraph 311 of this Order)'' and
paragraph 312f, ``Regulations, standards and exemptions (excluding
those which if implemented may cause a significant impact on the human
environment.)'' It has further been determined that no extraordinary
circumstances exist that may cause a significant impact and therefore
no further environmental review is required. The FAA has documented
this categorical exclusion determination. A copy of the determination
and underlying documents has been included in the Docket for this
rulemaking. FAA received no comments explicitly addressing the
documented categorical exclusion. Minor changes have been made to the
documentation that was available for the NPRM. FAA Order 1050.1E,
``Environmental Impacts: Policies and Procedures'' identifies FAA
actions that are normally categorically excluded from preparation of an
environmental assessment or environmental impact statement under the
National Environmental Policy Act (NEPA) in the absence of
extraordinary circumstances.
    The FAA has determined that this rulemaking qualifies for the
categorical exclusions identified in paragraph 312d ``Issuance of
regulatory documents (e.g., Notices of Proposed Rulemaking and issuance
of Final Rules)'' covering administration or procedural requirements
(does not include Air Traffic procedures; specific Air Traffic
procedures that are categorically excluded are identified under
paragraph 311 of this Order)'' and paragraph 312f, ``Regulations,
standards and exemptions (excluding those which if implemented may
cause a significant impact on the human environment.)'' It has further
been determined that no extraordinary circumstances exist that may
cause a significant impact and therefore no further environmental
review is required. The FAA has documented this categorical exclusion
determination. A copy of the determination and underlying documents
will be included in the Docket for this rulemaking. FAA received no
comments explicitly addressing the documented categorical exclusion.
Minor changes have been made to the documentation that was available
for the NPRM.

Regulations That Significantly Affect Energy Supply, Distribution, or
Use

    The FAA has analyzed this rule under Executive Order 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). We have determined that it is not
a ``significant energy action'' under the executive order because while
a ``significant regulatory action'' under Executive Order 12866, it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy.

Availability of Rulemaking Documents

    You can get an electronic copy of rulemaking documents using the
Internet by--
    1. Searching the Federal eRulemaking Portal (http://
www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies web page at http://
www.faa.gov/regulations_policies/; or
    3. Accessing the Government Printing Office's web page at http://
www.gpoaccess.gov/fr/index.html.
    You can also get a copy by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue, SW., Washington, DC 20591, or by calling<PHONE_NUMBER>. Make
sure to identify the docket number, notice number, or amendment number
of this rulemaking.
    You may access all documents the FAA considered in developing this
final rule, including economic analyses and technical reports, from the
internet through the Federal eRulemaking Portal referenced in paragraph
(1).

VII. Regulatory Text

List of Subjects in 14 CFR Part 93

    Air traffic control, Airports, Navigation (air).

0
In consideration of the foregoing, the Federal Aviation Administration
amends Chapter I of Title 14, Code of Federal Regulations, as follows:

PART 93--SPECIAL AIR TRAFFIC RULES

0
1. The authority for part 93 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502,
44514, 44701, 44719, 46301.

0
2. Part 93 is amended by adding Subpart N to read as follows:
Subpart N--John F. Kennedy International Airport and Newark Liberty
International Airport Traffic Rules
Sec.
93.161 Applicability.
93.162 Definitions.
93.163 Slots for scheduled arrivals and departures.
93.164 Categories of slots.
93.165 Initial assignment of slots.
93.166 Assignment of new or returned slots.
93.167 Reversion and withdrawal of slots.
93.168 Sublease and transfer of slots.
93.169 One-for-one trade of slots.
93.170 Minimum usage requirements.
93.171 Unscheduled operations.
93.172 Reporting requirements.
93.173 Administrative provisions.

Subpart N--John F. Kennedy International Airport and Newark Liberty
International Airport Traffic Rules

Sec.  93.161  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)
and Newark Liberty International Airport (Newark).
    (b) This subpart also prescribes procedures for the assignment,
transfer, sublease and withdrawal of slots issued by the FAA for
scheduled operations at JFK and Newark.
    (c) The provisions of this subpart apply to JFK and Newark during
the hours of 6 a.m. through 10:59 p.m., Eastern Time. No person shall
operate any scheduled arrival or departure into or out of JFK or Newark
during such hours without first obtaining a slot in accordance with
this subpart. No person shall conduct an unscheduled operation to or
from JFK or Newark during such hours without first obtaining a
reservation.
    (d) A U.S. Air Carrier conducting operations solely under another
carrier's marketing control with unified inventory control shall not be
considered a separate carrier for purposes of this rule.
    (e) The slots assigned under this subpart terminate at 11 p.m. on
March 30, 2019.

Sec.  93.162  Definitions.

    For purposes of this subpart, the following definitions apply:
    Airport Reservation Office (ARO) is an operational unit of the
FAA's David J. Hurley Air Traffic Control System Command Center. It is
responsible for the administration of reservations for unscheduled
operations at JFK and Newark.
    Baseline operations are those common slots held by a carrier at JFK
or Newark on December 9, 2008, that do not exceed 20 operations per
day.
    Carrier is a U.S. or foreign carrier with authority to conduct
scheduled service

under parts 121, 129, or 135 of this chapter and the appropriate
economic authority for scheduled service under 14 CFR chapter II and 49
U.S.C. chapter 401, 411 and 413.
    Common slot is a slot that is assigned by the FAA as a lease under
its cooperative agreement authority for the length of this rule.
    Enhanced Computer Voice Reservation System (e-CVRS) is the system
used by the FAA to make arrival or departure reservations for
unscheduled operations at JFK, Newark, and other designated airports.
    Limited slot is a slot held every day, the lease for which expires
prior to the expiration of this rule for subsequent award by the FAA as
an unrestricted slot.
    New Entrant is any carrier that is administratively allocated a
total of 8 or fewer slots on any day of the week at JFK or Newark,
respectively, during controlled hours at any point during the duration
of the rule.
    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 public charter operator.
    Public Charter Operator is defined in 14 CFR 380.2 as a U.S. or
foreign public charter operator.
    Reservation is an authorization received by a carrier or other
operator of an aircraft, excluding helicopters, in accordance with
procedures established by the FAA to operate an unscheduled arrival or
departure on a particular day of the week during a specific 60-minute
period.
    Scheduled operation is the arrival or departure segment of any
operation regularly conducted by a carrier between either JFK or Newark
and another point regularly served by that carrier.
    Slot is the operational authority assigned by the FAA to a carrier
to conduct one scheduled operation or a series of scheduled operations
at JFK or Newark on a particular day(s) of the week during a specific
30-minute period.
    Summer Scheduling Season begins on the last Sunday of March.
    Unrestricted slot is a slot that is awarded to a carrier by the FAA
via the auction of a lease.
    Unscheduled operation is an arrival or departure segment of any
operation that is not regularly conducted by a carrier or other
operator of an aircraft, excluding helicopters, between JFK or Newark
and another service point. The following types of carrier operations
shall be considered unscheduled operations for the purposes of this
rule: public, on-demand, and other charter flights; hired aircraft
service; extra sections of scheduled flights; ferry flights; and other
non-passenger flights.
    Winter Scheduling Season begins on the last Sunday in October.

Sec.  93.163  Slots for Scheduled Arrivals and Departures.

    (a) During the hours of 6 a.m. through 10:59 p.m., Eastern Time, no
person shall operate any scheduled arrival or departure into or out of
JFK or Newark without first obtaining a slot in accordance with this
subpart.
    (b) Except as otherwise established by the FAA under paragraph (c)
of this section, the number of slots shall be limited to no more than
eighty-one (81) per hour at JFK and eighty-one (81) per hour at Newark.
At JFK, the number of slots may not exceed 44 in any 30-minute period,
and 81 in any 60-minute period. At Newark, the number of slots may not
exceed 44 in any 30-minute period and 81 in any 60-minute period. The
number of arrival and departure slots in any period may be adjusted by
the FAA as necessary based on the actual or potential delays created by
such number or other considerations relating to congestion, airfield
capacity and the air traffic control system.
    (c) Notwithstanding paragraph (b) of this section, the
Administrator may increase the number of slots based on a review of the
following:
    (1) The number of delays;
    (2) The length of delays;
    (3) On-time arrivals and departures;
    (4) The number of actual operations;
    (5) Runway utilization and capacity plans; and
    (6) Other factors relating to the efficient management of the
National Airspace System.

Sec.  93.164  Categories of Slots.

    (a) General. Each slot shall be designated as a common slot,
limited slot or unrestricted slot and shall be allocated to the carrier
under a lease agreement. A lease for a common or limited slot shall be
assigned via a cooperative agreement. A lease for an unrestricted slot
shall be awarded via an auction.
    (b) Common slots.
    (1) All slots within any carrier's baseline operations, as
determined on December 9, 2008, shall be designated as common slots.
    (2) Ten percent of the slots at JFK and Newark on December 9, 2008
not otherwise designated as common slots under paragraph (b)(1) of this
section shall be designated as limited slots. All other slots shall be
designated as common slots.
    (c) Limited slots. Those slots assigned to a carrier subject to
return to the FAA under Sec.  93.165(c) shall be designated as limited
slots until the date of their reallocation by the FAA as unrestricted
slots. A carrier may continue to use a limited slot that has reverted
to the FAA until the date of its reallocation.
    (1) Each carrier with a total number of daily operations at JFK or
Newark in excess of its baseline operations will be notified by no
later than December 9, 2008 how many of its slots will be designated as
limited slots pursuant to paragraphs (c)(2) and (3) of this section.
    (2) A carrier shall designate 50 percent of its limited slots. The
carrier must notify the FAA of its determination by December 19, 2008.
    (3) The FAA will designate the remaining limited slots initially
excluding those hours in which two or more slots have been designated
as limited slots by the carriers.
    (4) No later than December 29, 2008, the FAA will publish a list of
all limited slots and the dates upon which they will expire.
    (d) Unrestricted slots. Unrestricted slots are slots acquired by a
carrier through a lease with the FAA awarded via an auction.
Unrestricted slots are not subject to withdrawal by the FAA.

Sec.  93.165  Initial assignment of slots.

    (a) Except as provided for under paragraphs (b) and (c) of this
section, any carrier utilizing operating rights allocated under the
Order limiting operations at JFK or the Order limiting operations at
Newark as evidenced by the FAA's records, will be assigned
corresponding slots in 30-minute periods consistent with the limits
under Sec.  93.163(b) and its summer and winter season schedules as
approved by the FAA. If necessary, the FAA may utilize administrative
measures such as voluntary measures or a lottery to re-time the
assigned slots within the same hour to meet the 30-minute limits under
Sec.  93.163(b). The FAA Vice President, System Operations Services, is
the final decision-maker for determinations under this section.
    (b) If a carrier was allocated operating rights under the Order
limiting operations at JFK or the Order limiting operations at Newark,
but the operating rights were held by another carrier, then the
corresponding slots will be assigned to the carrier that held the
operating rights for that period, as evidenced by the FAA's records.
    (c) Starting January 13, 2009, and every year thereafter through
2013, one-fifth of the total number of Limited slots shall revert to
the FAA in accordance with the schedule published under

Sec.  93.164(c)(4) and be auctioned as unrestricted slots by the FAA.
Any slot receiving no responsive bids will be retired until the next
auction. An affected carrier will be allowed to use the limited slot
until the date of its reallocation by the FAA as an unrestricted slot.

Sec.  93.166  Assignment of new or returned slots.

    (a) This section describes the process by which the FAA assigns new
slots, as well as slots returned to the FAA pursuant to the provisions
of Sec.  93.170. These slots will be assigned by the FAA to requesting
carriers for the summer and winter scheduling seasons.
    (b) Requests for the new slots or returned slots or both must be
submitted to the Federal Aviation Administration, Slot Administration
Office, AGC-200, 800 Independence Avenue, SW., Washington, DC 20591
(Facsimile:<PHONE_NUMBER>; e-mail: 7-awa-slotadmin@faa.gov), by the
deadline as published by the FAA in a Federal Register notice for each
summer and winter scheduling season. The requesting carrier must submit
its entire schedule at JFK and Newark for the particular season, noting
which requests are in addition to, or changes from, the previous
corresponding season at the respective airports.
    (c) Before assigning new or returned slots under this section, the
FAA will first accommodate carrier requests to retime slots for
operational reasons or to bring the flight time closer to the time
originally requested by the applicant carrier in previous corresponding
seasons, as reflected in FAA records.
    (d) After accommodating carrier requests for retiming of slots, the
FAA will assign 50% of the new slots and returned slots to new
entrants, unless requests by new entrants constitute fewer than 50% of
available slots.
    (e) With the remaining available slots, if all requests for slots
under this section cannot be accommodated, the FAA will give priority
to requests to introduce year-round service or to extend an existing
operation to a year-round operation.
    (f) Thereafter, the FAA will assign slots considering all relevant
factors including:
    (1) The effective period of operation;
    (2) The extent and regularity of intended use of a slot;
    (3) Schedule constraints of carriers requesting slots.

Sec.  93.167  Reversion and withdrawal of slots.

    (a) This section does not apply to unrestricted slots.
    (b) A carrier's common slots or limited slots at JFK or Newark
revert back to the FAA 30 days after the carrier has ceased all
operations at the respective airport(s) for any reasons other than a
strike.
    (c) The FAA may retime, withdraw, or temporarily suspend common
slots and limited slots at any time to fulfill operational needs.
    (d) Common slots and limited slots temporarily withdrawn for
operational need will be withdrawn in accordance with the priority list
established under Sec.  93.173 and international obligations.
    (e) Except as otherwise provided in paragraph (a) of this section,
the FAA will notify an affected carrier before withdrawing or
temporarily suspending a common slot or limited slot and specify the
date by which operations under the common slot or limited slot must
cease. The FAA will provide at least 45 days' notice unless otherwise
required by operational needs.
    (f) Any common slot or limited slot that is temporarily withdrawn
under this paragraph will be reassigned, if at all, only to the carrier
from which it was withdrawn, provided the carrier continues to conduct
scheduled operations at the respective airport.
    (g) Should the Administrator determine that the cap on scheduled
operations at Newark or JFK is too high, he may withdraw common slots
to reduce the cap. Any such action by the Administrator shall be
subject to the notice and comment provisions of the Administrative
Procedure Act.

Sec.  93.168  Sublease and transfer of slots.

    (a) A carrier may sublease its slots to another carrier in
accordance with this section and subject to the provisions of the
carrier's lease agreement with the FAA. The character of the slot
(e.g., common slot) will not change.
    (b) A carrier must provide notice to the FAA to sublease a slot.
Such notice must contain: the slot number and time, effective dates
and, if appropriate, the duration of the lease. The carrier may also
provide the FAA with a minimum bid price.
    (c) The FAA will post a notice of the offer to sublease the slot
and relevant details on the FAA Web site at http://www.faa.gov. An
opening date, closing date and time by which bids must be received will
be provided.
    (d) Upon consummation of the transaction, written evidence of each
carrier's consent to sublease must be provided to the FAA, as well as
all bids received and the terms of the sublease, including but not
limited to:
    (1) The names of all bidders and all parties to the transaction;
    (2) The offered and final length of the sublease;
    (3) The consideration offered by all bidders and provided by the
sublessee.
    (e) The slot may not be used until the conditions of paragraph (d)
of this section have been met, and the FAA provides notice of its
approval of the sublease.
    (f) Slots may be transferred among a U.S. carrier and another
carrier that conducts operations at JFK or Newark solely under the
transferring carrier's marketing control, including the entire
inventory of the flight. Each party to such transfer must provide
written evidence of its consent to the transfer and the FAA must
confirm and approve these transfers in writing prior to the effective
date of the transaction. However, the FAA will approve transfers under
this paragraph up to five business days after the actual operation to
accommodate operational disruptions that occur on the same day of the
scheduled operation. The FAA Vice President, System Operations Services
is the final decision-maker for any determinations under this section.
    (g) A carrier wishing to sublease a slot via an FAA auction under
Sec.  93.165, rather than pursuant to this section, may do so. The
carrier shall retain the proceeds and the slot shall retain the same
designation that it had prior to the carrier placing it up for auction.

Sec.  93.169  One-for-one trade of slots.

    (a) A carrier may trade a slot with another carrier on a one-for-
one basis.
    (b) Written evidence of each carrier's consent to the trade must be
provided to the FAA.
    (c) No recipient of the trade may use the acquired slot until
written confirmation has been received from the FAA.
    (d) Carriers participating in a one-for-one trade must certify to
the FAA that no consideration or promise of consideration was provided
by either party to the trade.

Sec.  93.170  Minimum usage requirements.

    (a) This section does not apply to unrestricted slots.
    (b) Any common slot or limited slot included in a summer or winter
season schedule approved by the FAA that is not used at least 80
percent of the time during the period for which it is assigned will be
withdrawn by the FAA.
    (c) The FAA may waive the requirements of paragraph (b) of this
section in the event of a highly unusual and unpredictable condition
which is beyond the control of the carrier and which affects carrier
operations for a period of five or more consecutive days.

Examples of conditions which could justify a waiver under this
paragraph are weather conditions that result in the restricted
operation of the airport for an extended period of time or the
grounding of an aircraft type.
    (d) The FAA will treat as used any common slot or limited slot held
by a carrier on Thanksgiving Day, the Friday following Thanksgiving
Day, and the period from December 24 through the first Sunday of
January.

Sec.  93.171  Unscheduled operations.

    (a) During the hours of 6 a.m. through 10:59 p.m. Eastern Time, no
person may operate an aircraft other than a helicopter to or from JFK
or Newark unless he or she has received, for that unscheduled
operation, a reservation that is assigned by the Airport Reservation
Office (ARO) or in the case of public charters, in accordance with the
procedures in paragraph (d) of this section. Requests for reservations
will be accepted through the e-CVRS beginning 72 hours prior to the
proposed time of arrival to or departure from JFK or Newark. 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 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 between 6 a.m. and 1:59 p.m.
and between 10 p.m. and 10:59 p.m. and one reservation per hour between
2 p.m. and 9:59 p.m.
    (2) At Newark, two reservations per hour between 6 a.m. and 11:59
a.m. and between 10 p.m. and 10:59 p.m. and one reservation per hour
between 12 noon and 9:59 p.m.
    (c) The ARO will receive and process all reservation requests for
unscheduled arrivals and departures at JFK and Newark. Reservations are
assigned on a ``first-come, first-served'' basis determined by the time
the request is received at the ARO. Reservations must be cancelled if
they will not be used as assigned.
    (d) One reservation per hour will be available for assignment to
public charter operations prior to the 72-hour reservation window in
paragraph (a) of this section. No more than 25 percent of the
reservations available from 12 noon through 9:59 p.m. will be made
available to public charter operations under this paragraph.
    (1) The public charter operator may request a reservation up to six
months in advance of the date of the flight operation. Reservation
requests should be submitted to Federal Aviation Administration, Slot
Administration Office, AGC-200, 800 Independence Avenue, SW.,
Washington, DC 20591. Submissions may be made via facsimile to (202)
267-7277 or by e-mail to<EMAIL_ADDRESS>    (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(s), the airport served
immediately prior to or after JFK or Newark, 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) If reservations under paragraph (d)(1) of this section have
already 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 flights in direct support
of national security, law enforcement, military aircraft operations, or
public-use aircraft operations may be accommodated above the
reservation limits with the prior approval of the Vice President,
System Operations Services, Air Traffic Organization. Procedures for
obtaining the appropriate waiver will be available on the Internet at
http://www.fly.faa.gov/ecvrs.
    (g) Notwithstanding the limits in paragraph (b) of this section, if
the Air Traffic Organization determines that air traffic control,
weather and capacity conditions are favorable and significant delay is
unlikely, the FAA may determine that additional reservations may be
accommodated for a specific time period. Unused slots may also be made
available temporarily for unscheduled operations. Reservations for
additional operations must be obtained through the ARO.
    (h) Reservations may not be bought, sold or leased.

Sec.  93.172  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
common slot or limited 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) Such reports, in a format acceptable to the FAA, must contain
the following information for each common slot or limited slot:
    (1) The slot number, time, and arrival or departure designation;
    (2) The operating carrier;
    (3) The date and scheduled time of each of the operations conducted
pursuant to the slot, including the flight number, and origin/
destination, and aircraft type identifier; and
    (4) Whether a flight was actually operated.
    (c) The FAA may withdraw the slot of any carrier that does not meet
the reporting requirements of paragraph (a) of this section.

Sec.  93.173  Administrative provisions.

    (a) Each slot shall be assigned a number for administrative
convenience.
    (b) The FAA will assign priority numbers by random lottery for
common slots and limited slots at JFK and Newark. Each common slot and
limited slot will be assigned a withdrawal priority number, and the 30-
minute time period for the common slot or limited slot, frequency, and
the arrival or departure designation.
    (c) If the FAA determines that operations need to be reduced for
operational reasons, the lowest assigned priority number common slot or
limited slot will be the last withdrawn.
    (d) Any slot available on a temporary basis may be assigned by the
FAA to a carrier on a non-permanent, first-come, first-served basis
subject to permanent assignment under this subpart. Any remaining slots
may be made available for unscheduled operations on a non-permanent
basis and will be assigned under the same procedures applicable to
other operating reservations.
    (e) All transactions under this subpart must be in a written or
electronic format approved by the FAA.

    Issued in Washington, DC, on October 6, 2008.
Robert A. Sturgell,
Acting Administrator.
 [FR Doc. E8-24046 Filed 10-9-09; 8:45 am]

BILLING CODE 4910-13-P