[Federal Register: May 21, 2008 (Volume 73, Number 99)]
[Proposed Rules]
[Page 29625-29651]
[DOCID:fr21my08-24]

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Part III

Department of Transportation

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Federal Aviation Administration

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14 CFR Part 93

Congestion Management Rule for John F. Kennedy International Airport
and Newark Liberty International Airport; Proposed Rule

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 93

[Docket No. FAA-2008-0517; Notice No. 08-05]
RIN 2120-AJ28

Congestion Management Rule for John F. Kennedy International
Airport and Newark Liberty International Airport

AGENCY: Federal Aviation Administration (FAA).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to establish procedures to address congestion
in the New York City area by assigning slots at John F. Kennedy (JFK)
and Newark Liberty (Newark) International Airports in a way that allows
carriers to respond to market forces to drive efficient airline
behavior. This proposal is a companion to a separate rulemaking
initiative addressing congestion mitigation at New York's LaGuardia
airport. Today's proposal is similar to what we have proposed for
LaGuardia airport, but it takes into consideration the characteristics
of both JFK and Newark, including the large number of international
flights at these airports and our international obligations. The FAA
proposes to extend the caps on the operations at the two airports,
assign to existing operators the majority of slots at the airports, and
create a market by annually auctioning off a limited number of slots in
each of the first five years of this rule. The FAA is proposing two
alternatives.
    Under the first alternative, the assignment of slots at JFK and
Newark would be conducted through a uniform mechanism. The FAA would
auction off a portion of the slots and would use the proceeds to
mitigate congestion and delay in the New York City area. Under the
second alternative, the same auction procedure would apply at Newark as
under the first alternative but at JFK the auction proceeds would go to
the carrier holding the slot rather than to the FAA. For both
alternatives, this proposal also contains provisions for minimum usage,
capping unscheduled operations, and withdrawal for operational need.
The FAA proposes to sunset the rule in ten years.

DATES: Send your comments on or before July 21, 2008.

ADDRESSES: You may send comments identified by Docket Number FAA-2008-
0517 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, 1200 New Jersey Avenue, SE., Room W12-
140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Bring 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<PHONE_NUMBER>.

For more information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. Using the search function of our docket Web site, anyone can
find and read the electronic form of all comments received into any of
our dockets, including the name of the individual sending the comment
(or signing the comment for an association, business, labor union,
etc.). You may review the Department of Transportation's complete
Privacy Act Statement in the Federal Register published on April 11,
2000 (65 FR 19477-78) or you may visit http://DocketsInfo.dot.gov.
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time and follow the online
instructions for accessing the docket. Or, go 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.

FOR FURTHER INFORMATION CONTACT: For technical questions regarding this
rulemaking, contact: Molly W. Smith, Federal Aviation Administration,
800 Independence Avenue, SW., Washington, DC 20591; telephone (202)
267-3275; e-mail<EMAIL_ADDRESS>For legal questions concerning
this rulemaking, contact: Rebecca MacPherson, FAA Office of the Chief
Counsel, 800 Independence Ave., SW., Washington, DC 20591; telephone
(202) 267-3073; e-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Later in this preamble, under the Additional
Information section, we discuss how you can comment on this proposal
and how we will handle your comments. Included in this discussion is
related information about the docket and the handling of proprietary or
confidential business information. We also discuss how you can get a
copy of this proposal and related rulemaking documents.

Authority for This Rulemaking

    The FAA has broad authority under 49 U.S.C. 40103 to regulate the
use of the navigable airspace of the United States. This section
authorizes the FAA to develop plans and policy for the use of navigable
airspace and to assign the use that the FAA deems necessary for its
safe and efficient utilization. It further directs the FAA to prescribe
air traffic rules and regulations governing the efficient utilization
of the navigable airspace.

I. Background

A. History of Congestion Management Initiatives at JFK

    JFK has historically been a constrained airport. From 1969 through
2006, the FAA managed congestion there during the five hours of peak
transatlantic demand--3 p.m. through 7:59 p.m., Eastern Time under the
High Density Rule (HDR). 14 CFR part 93 subparts K and S.
    In 1994, Congress began to relax the HDR by authorizing the
Secretary of Transportation, upon making a public interest finding, to
grant exemptions from the HDR to enable new entrant carriers \1\ to
provide air transportation at certain slot-controlled airports,
including JFK. 49 U.S.C. 41714. In 1999, pursuant to this authority,
the Department issued an order that authorized new flight operations at
JFK by granting 75 slot exemptions to JetBlue Airways (JetBlue), a new
entrant carrier, to be phased in over a five-year period.\2\ The order
stated that JetBlue would operate the majority of its flights outside
the five HDR slot-controlled hours.
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    \1\ 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).
    \2\ 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
(September 16, 1999).
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    In 2000, the Wendell H. Ford Aviation Investment and Reform Act for
the 21st Century (AIR-21), Public Law No. 106-181, ended the
application of the HDR at JFK, effective January 1, 2007. 49 U.S.C.
41715(a)(2).\3\ AIR-21 also

directed the Secretary to grant exemptions from the HDR's flight
restrictions for operations by new entrant carriers or for flights
serving Small-Hub and Non-Hub airports as long as the aircraft used had
less than 71 seats. Additionally, it preserved the FAA's authority to
impose flight restrictions by stating that ``[n]othing in this section
* * * shall be construed * * * as affecting the Federal Aviation
Administration's authority for safety and the movement of air
traffic.'' 49 U.S.C. 41715(b).
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    \3\ The phase-out also included LaGuardia, as of January 1,
2007. 49 U.S.C. 41715(a)(2). The HDR at Chicago O'Hare International
Airport was directed to be phased out by July 1, 2002. 49 U.S.C.
41715(a)(1).
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    Until recently, most operations at JFK took place during relatively
pronounced arrival and departure banks corresponding to the operating
windows of transatlantic flights. Maximum efficiency at JFK has been
achieved with the use of 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 historic
transatlantic traffic flows.
    Since the spring of 2006, U.S. air carriers serving JFK have
significantly increased their domestic scheduled operations throughout
the day. Most of the increase has come from the two largest operators
at the airport, Delta Airlines (Delta) and JetBlue. The new traffic
patterns affect the efficient use of JFK's four runways, impeding the
use of the three-runway configurations (two arrival/one departure, or
one arrival/two departure) for maximum utility of active runways.
    As a result of the increase in scheduled operations at JFK, the
summer 2007 demand exceeded the airport's capacity during many periods
of the day. During morning hours, volume-related delays were routine
from 7 a.m. through 9 a.m. The afternoon and evening demand exceeded
the airport's optimal capacity until about 10 p.m. This prevented the
airport from having an evening period to recover from congestion-
induced delays.
    During fiscal year 2007, the average daily operations at JFK
increased 21 percent over fiscal year 2006. Corresponding to the
increased operations, on-time performance and other delay metrics have
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. For the entire fiscal year, the average daily arrival
delays exceeding one hour increased by 87 percent over fiscal year 2006
levels. 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 an hour in
duration.
    The increased congestion and associated delays at JFK impact other
airports in the region and the National Airspace System (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. The delays that cascade from this
area throughout the NAS are costly and far-reaching, as detailed in the
recently approved airspace redesign plan for the New York/New Jersey/
Philadelphia metropolitan area.\4\ The FAA has taken steps to implement
airspace redesign, which will provide efficiency and congestion relief
by, among other things, opening additional arrival and departure routes
in the New York area. Further, the FAA, working with stakeholders, is
implementing 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 will offer an immediate or complete solution.
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    \4\ See: http://www.faa.gov/airports--airtraffic/air--traffic/
nas--redesign/regional--guidance/eastern--reg/nynjphl--redesign/.
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    On September 24, 2007, the FAA re-designated JFK as a Level 2
Schedules Facilitated Airport \5\ for the summer 2008 scheduling season
in accordance with the International Air Transport Association
Worldwide Scheduling Guidelines (IATA WSG). 72 FR 54317. Under the WSG,
carriers must inform the coordinator 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.
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    \5\ An airport, where demand is approaching capacity and a more
formal level of cooperation is required to avoid the circumstances
of over-capacity, is designated an IATA Level 2 Schedules
Facilitated Airport. At a Level 2-designated airport, a schedules
facilitator seeks the cooperation and voluntary agreement of
airlines serving the airport to avoid congestion.
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    Also in September 2007, the Administrator determined that JFK was a
severely congested airport and that a scheduling reduction meeting,
under 49 U.S.C. 41722, was necessary to discuss flight reductions with
U.S. air carriers to reduce over-scheduling and flight delays at JFK
during peak operating hours. On October 12, 2007, the Secretary of
Transportation determined that a scheduling reduction meeting was
necessary to meet a serious transportation need or to achieve an
important public benefit. On October 22, the FAA opened a docket for
information on the establishment of flight reduction targets at JFK
during peak hours. 72 FR 59579. In order to address increases in demand
by foreign air carriers, the FAA determined that a Level 3 Coordinated
Airport declaration was warranted on October 25, 2007.\6\ 72 FR 60710.
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    \6\ Where demand for an airport exceeds capacity, voluntary
cooperation is unlikely to resolve the problem, and short term
capacity enhancements are not available, the airport is designated
an IATA Level 3 Coordinated Airport.
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    In order to address increases in demand by domestic carriers, the
FAA convened the scheduling reduction meeting with U.S. carrier
participants on October 23-24, 2007. Subsequent in-person and
telephonic meetings took place as well. At the sessions, American
Airlines, Delta and JetBlue, which together account for three-quarters
of the total operations at JFK, withdrew the schedule increases each
had proposed for summer 2008 during the airport's 3 p.m. to 7:59 p.m.
peak hours. They also adjusted the timing of operations during those
hours and others to smooth out peaks. Other airlines also agreed to
retime peak operations. The FAA offered capacity during other hours to
carriers who re-timed operations or added additional flights.
    As a result of the agreements reached at that meeting and other
discussions held with carriers regarding their projected summer 2008
schedules, the FAA issued a temporary Order limiting scheduled
operations at JFK, effective 6 a.m., Eastern Time, March 30, 2008,
through 11:59 p.m., Eastern Time, October 24, 2009, to U.S. and foreign
air carriers serving the airport and generally capping scheduled
operations at 81 per hour. 73 FR 3519 (Jan. 18, 2008), as amended 73 FR
8737 (Feb. 14, 2008). This Order temporarily responds to the carriers'
desire to regularly schedule flights 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, and provides for a more
efficient use of airspace.

B. History of Congestion Management at Newark

    Newark was once subject to the HDR although the FAA suspended the
application of the rule at Newark due to sufficient airport capacity to
meet demand. 35 FR 16591 (Oct. 24, 1970). Over the past several years,
however, Newark has grown to be one of the most delay-prone airports in
the country. Current and anticipated demand during peak hours
approaches or exceeds the average runway capacity, resulting in volume-
related delays. These delays are aggravated by weather or other adverse
operating conditions.
    Comparing FY 2007 to FY 2000, average daily operations at the
airport decreased about 3 percent (from 1,253 to 1,219) but performance
nevertheless suffered. The percent of on-time gate arrivals decreased
from 70.66 percent to 61.71 percent; arrival delays greater than one
hour increased from 54 to 93 per day on average.
    In 2007, for example, Newark's on-time arrival performance was 61.8
percent, the second worst among the top 35 airports. Based on ``the
airport's performance metrics and imbalance between air traffic control
(ATC) capacity and demand that is expected to continue in the near
term,'' the FAA designated Newark a Level 2 IATA Schedules Facilitated
Airport for the summer 2008 scheduling season.\7\ The FAA explained
that ``increased levels of air traffic operations, congestion and delay
at [both JFK and Newark] airports and a tangible decrease in
operational performance'' warranted this designation.\8\ The FAA found
the morning hours of 7 a.m. to 10 a.m. and the afternoon and evening
hours of 2 p.m. to 10 p.m. were particularly constrained, but that
capacity otherwise was available for retiming of flights or new
operations.
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    \7\ 72 FR 54317 (Sept. 24, 2007).
    \8\ Id.
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    The FAA modeled the proposed summer 2008 schedule requests against
Newark's average runway capacity, and delay projections for the summer
of 2008 indicated a potential increase of almost 50 percent. The FAA
also discussed carriers' future schedule plans at Newark and asked
carriers to consider scheduling flights at times where there was
available capacity. It was clear that some carriers intended to proceed
with their plans to begin operations according to their proposed
schedules during the busiest hours, regardless of the potential impact
on delay. Based on the requested schedules for Newark and anticipated
additional demand for Newark due to the operating limits underway at
JFK, the FAA determined that the anticipated summer 2008 demand would
overtax Newark's capacity, warranting a Level 3 Coordinated Airport
designation. 72 FR 73418 (Dec. 27, 2007). After the designation, a
series of discussions with the FAA led some carriers, including the hub
carrier, Continental, to move some of their historic flights from the
most oversubscribed hours. The movement of these flights tended to
smooth the scheduling peaks and valleys at Newark.
    The information provided by the carrier for the summer 2008
scheduling season reflected a projected increase in flight schedules
during the summer of 2008, especially during the peak hours. U.S. and
foreign carriers had planned about 100 new operations per day at
Newark, many during the afternoon and early evening hours for the
summer of 2008.\9\ That number of new flights, along with proposed
retiming of historic flights into busier time periods, would have
caused massive delays, because they would have exceeded the airport's
optimal rate of handling flights over multiple, consecutive hours. For
several consecutive hours, the number of hourly arrivals and departures
would have reached the upper 80s to the mid-90s. These operations would
have significantly exceeded the airport's average capacity of 83 total
operations over the 12-month period ending August 2007. These
additional flights would have caused a spike in congestion and delays
at Newark and would also have had an adverse effect on other airports
in the New York region and on the NAS.
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    \9\ Requests for additional flights or retiming of flights into
peak periods were received after the FAA's announced schedule
submission deadline of October 11, 2007. These requests were
accommodated only if there was available capacity remaining after
consideration of historic operations and on-time requests.
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    Consequently, on March 18, 2008, the FAA proposed to place
temporary caps on peak hour operations at Newark to mitigate persistent
congestion and delays at the airport.\10\ 73 FR 14552. The cap would
limit scheduled operations during constrained hours to an average of 81
per hour.\11\ The FAA stated that it identified Newark's average
capacity by considering 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.'' 73 FR 14552, 14554. The measurement
reflected ``the airport's demonstrated and potential performance over
time under actual meteorological and operational conditions.'' Id. The
FAA committed to closely monitoring the gains in efficiency and delay
reductions from implementing the airspace redesign and other air
traffic control or airport operational changes to ensure that the
scheduling limits reflect the available capacity.
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    \10\ 73 FR 14552 (March 18, 2008).
    \11\ The appendix to the order included a few operations for
summer 2008 above the 81 per hour limit.
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    The FAA has adopted its March 18, 2008, proposal to impose a
temporary cap on scheduled operations at Newark. The cap takes effect
30 days after publication and expires 11:59 p.m. Eastern Time, October
24, 2009. The cap limits peak hour scheduled operations to an average
of 81 per hour, except as provided in the appendix to the Order, and
total scheduled and unscheduled operations to an average of 83. As
indicated in the proposed order, the FAA intends to use the hours with
scheduled operations below the limit of 81 for delay mitigation and
would lease new capacity over 81 pursuant to an auction.

C. New York Aviation Rulemaking Committee

    In addition to the regulatory initiatives discussed above, on
September 25, 2007, the Acting FAA Administrator established an
Aviation Rulemaking Committee (ARC) to explore various options,
including market-based mechanisms, for addressing airspace congestion
in the New York area. The ARC was comprised of officials from the FAA
and the Office of the Secretary of Transportation (OST), the Port
Authority of New York and New Jersey (Port Authority), representatives
of carriers and operators serving JFK, Newark, LaGuardia, and Teterboro
airports, airport and aviation industry trade associations, and
consumer groups.
    By design, the ARC provided opportunity for extensive input by all
stakeholders, having members from major air carriers in the United
States and their trade organizations (the Air Transport Association,
the Regional Airline Association, the Air Carrier Association of
America, the National Air Carrier Association), foreign carriers and
their worldwide trade organization (IATA), the Port Authority, and the
Airports Council International-North America. Through the ARC process,
these stakeholders played a key role in

exploring ideas to address congestion and ensuring that any actions
contemplated by the Department and the FAA would be fully informed. The
ARC worked throughout the fall and submitted a report to the Secretary,
dated December 13, 2007, discussing its findings. A copy of the ARC
Report may be found at: http://www.dot.gov/affairs/FinalARCReport.pdf.

II. Discussion of Proposed Rule

    Today's proposal would replace the Orders imposing operating
limitations at JFK and Newark and establish a rule limiting unscheduled
operations at those airports. The Orders are scheduled to expire on
October 24, 2009. If adopted, the proposed rule would apply to all
operations at JFK and Newark between the hours of 6 a.m. and 10:59
p.m., every day. For reasons set out in the Newark and JFK Orders,
discussed above, the FAA has determined that capacity is constrained at
these airports for this entire period.
    The following table briefly summarizes today's proposal and
identifies differences between the two options.

                                     Proposed Regulation for JFK and Newark
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                                                                                JFK
               Feature                          Newark         -------------------------------------------------
                                                                        Option 1                 Option 2
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Base Schedule........................  Seasonal schedule, as    Seasonal schedule, as    Same as Option 1.
                                        approved by the FAA,     approved by the FAA,
                                        for summer 2008 and      for summer 2008 and
                                        winter 2008/2009.        winter 2008/2009.
Slot.................................  Defined as right to      Defined as right to      Same as Option 1.
                                        land or depart (not      land or depart (not
                                        both) in a 30-minute     both) in a 30-minute
                                        time window.             time window.
Number of Slots......................  81/hour + 1 to 2         81/hour + 1 to 2.......  Same as Option 1
                                        unscheduled.
Slots definition.....................  Common Slots: The        Common Slots: the        Common Slots: The
                                        Baseline (up to 20       Baseline (up to 20       Baseline (up to 20
                                        slots per carrier)       slots per carrier)       slots per carrier)
                                        plus 90% of slots        plus 90% of slots        plus 80% of slots
                                        above 20 have 10 year    above 20 have 10 year    above 20 would have 10
                                        leases; Limited Slots:   leases; Limited Slots:   year leases; Limited
                                        10% would have shorter   10% would have shorter   Slots 20% would have
                                        leases and be            leases and be            shorter leases and
                                        auctioned over five      auctioned over five      then be reallocated
                                        years (2% each) (after   years (2% each) (after   via auction over five
                                        which they convert to    which they convert to    years (4%/yr).
                                        Unrestricted Slots).     Unrestricted Slots).
Slot Time of Day.....................  6:00 a.m. through 10:59  6:00 a.m. through 11:59  Same as Option 1.
                                        p.m., everyday; no       p.m., everyday; no
                                        more than 81 in any      more than 81 in any
                                        one hour or 44 in any    one hour or 44 in ay
                                        half-hour.               half-hour.
Mechanics............................  ``Fair'' initial         ``Fair'' initial         Same as Option 1.
                                        distribution with half   distribution with half
                                        of slots with less       of slots with less
                                        than 10 years life       than 10 years life
                                        selected by carriers;    selected by carriers;
                                        the other half           the other half
                                        selected by FAA          selected by FAA
                                        according to specified   according to specified
                                        rules.                   rules.
Auction..............................  Limited Slots would be   Limited Slots would be   Same as Option 1.
                                        auctioned among          auctioned among
                                        carriers.                carriers.
Auction Proceeds.....................  Auction funds to FAA to  Auction funds to FAA to  Auction funds (net of
                                        defray costs of          defray costs of          auction costs) to
                                        auction, then to NY      auction, then to NY      incumbent holder;
                                        capacity/projects.       capacity/projects.       incumbent cannot bid
                                                                                on own slots.
Use/Lose.............................  Only on grandfathered    Only on grandfathered    As as Option 1.
                                        slots as consideration   slots as consideration
                                        for slots.               for slots.
Term.................................  Program is through       Program is through       As as Option 1.
                                        March 2019; slot lives   March 2019; slot lives
                                        are whatever             are whatever
                                        proportion of 10 years   proportion of 10 years
                                        remain upon              remain upon
                                        reallocation.            reallocation.
Bidders..............................  Airlines...............  Airlines...............  As as Option 1.
Holders..............................  Holders of record (not   Holders of record (not   As as Option 1.
                                        marketing carrier).      marketing carrier).
New or returned capacity.............  IATA WSG...............  IATA WSG...............  As as Option 1.
Secondary market.....................  Transparent not blind:   Transparent not blind:   Same.
                                        carrier notifies FAA     carrier notifies FAA
                                        of intent to sublease;   of intent to sublease;
                                        FAA makes slot           FAA makes slot
                                        availability known;      availability known;
                                        bilateral                bilateral
                                        negotiations; final      negotiations; final
                                        terms disclosed to OST   terms disclosed to OST
                                        for monitoring.          for monitoring.
Logistical swaps of slots............  Permitted..............  Permitted..............  Same.
----------------------------------------------------------------------------------------------------------------

    The rule would apply to carriers at JFK and Newark. A U.S. air
carrier conducting operations solely under another carrier's market
control with unified inventory control would not be considered a
separate carrier, an approach that is consistent with how carriers have
been treated historically under the various slot regimes. The same
would not be true for foreign air carriers. This difference in
treatment reflects the commercial realities of JFK and Newark where
there are foreign air carriers that share a common owner but hold out
service to the public as separate commercial entities. Treating foreign
air carriers with common ownership as separate carriers for purposes of
slot allocation is an accepted practice in the international arena. The
recent SNPRM on LaGuardia airport, as well as the LaGuardia Order,
treats carriers with common ownership as a single carrier.

    As we have explained, we do not anticipate that airport and
airspace system improvements scheduled to come on line during the next
year and a half will be sufficient to meet the demand for flights at
either JFK or Newark for the foreseeable future. Therefore, if we let
the Orders expire according to their terms, we believe carriers will
once again schedule flights well in excess of the respective capacities
of both JFK and Newark and unscheduled operations would grow during
peak hours. Historic experience strongly suggests that congestion and
delays during peak operating hours would result, requiring the FAA to
step in and address unacceptable operational performance yet again.
    Rather than taking repeated, piecemeal approaches to limit and
manage operations at JFK and Newark on a short-term basis, we believe
it is prudent to adopt a longer-term rule dealing with the congestion
and delays we expect to persist at those airports. The FAA's preference
in addressing congestion resulting from capacity shortfalls is to
expand the airport and airway system capacity and to increase the
efficient use of existing resources. This is by far the most effective
way to serve the traveling public and to promote a strong airport and
airway system. Although both the FAA and the Port Authority are working
to implement these capacity improvements, this rule would complement
those efforts and mitigate projected airport congestion.
    We propose to treat the three major New York City-area airports
similarly by capping operations and introducing market mechanisms to
allocate some slots. While we have provided two different versions of
the draft regulatory text to present two alternatives for market
allocation, Newark would be treated the same under both versions.
Accordingly, all discussion of alternative 2 will be limited to JFK.
    The FAA believes it is necessary to address congestion and delays
at LaGuardia, JFK, and Newark in a coordinated manner. Congestion and
delays at each of the three airports affect the other two airports as
well as the NAS as a whole. The airports are all located relatively
close to each other and consistently have been among the nation's most
delay-prone airports.
    Excluding any one of the three major New York-area airports from
the imposition of caps would simply shift the problem to the non-slot
controlled airport, as it would become very attractive to carriers
wanting to start or add service in the New York market. The likely
result would be an overburdening of that airport and the system. We
propose to award capacity at JFK and Newark through mechanisms that
rely, in part, on the market. These mechanisms resemble those in the
proposal for LaGuardia Airport, but are modified to reflect the
respective characteristics of JFK and Newark.
    Today's proposal will ensure that the scarce airspace resources are
used for operations by the carriers valuing the resources most highly.
Additionally, over the course of the ten-year life of the proposed
rule, we will monitor the need to maintain the caps and may increase
the number of scheduled operations in response to technological,
operational, or capacity plans or improvements or to other factors that
may warrant such action.
    We note that both JFK and Newark are already capped under the
respective Orders at 81 scheduled operations per hour (except as
provided in the Appendices to the Orders). Today's proposal, if
adopted, will replace those Orders. The FAA believes the summer of 2007
served as a stark reminder that the demand for access to New York City
is exceptional and cannot be managed without these caps at an
acceptable level of delay.
    The NPRM proposes to apply the limits of the recent JFK and Newark
Orders, except where the Administrator determines under Sec.  93.163 of
subpart N and Sec.  93.183 of subpart O that additional slots can be
accommodated. In addition, there would be no more than 44 slots in any
30-minute period at JFK and Newark, or more than 81 in a 60-minute
period. We have proposed to specify the 30- and 60-minute limitations
in addition to the hourly maximum to avoid excessive bunching of slots,
which can cause unnecessary delays. Section 93.163(d) of subpart N and
Sec.  93.183 of subpart O sets out the authority of the Administrator
to increase the number of slots as airport conditions warrant. No
additional rulemaking would be required for any increase.
    JFK and Newark have similar demand profiles, with an early morning
peak that typically clears by mid-morning. Demand approaches capacity
in the early afternoon and typically continues until about 10 p.m.
Scheduled requests submitted by carriers to the FAA for summer 2008
showed marked increases throughout the day. Modeling and experience
demonstrate that delays grow exponentially and have a cascading effect
on airport operations and individual flights at the airport. As part of
the discussions with the carriers regarding summer 2008 schedules,
carriers decided to schedule flights at off-peak hours since the FAA
was unwilling to authorize new peak hour flights. Based on demand and
the modeling showing the potential for increased delays, the FAA
determined that the appropriate hours to limit flights would cover much
of the operating day.
    The FAA proposes that the final rule, if adopted, would terminate
at 11 p.m. on March 30, 2019. 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. 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
successfully impact delays and air traffic efficiency within the next
ten years, and we should not prejudge the market response. The FAA
plans to evaluate the effects of the slot program proposed today on the
distribution of slots and entry into JFK and Newark. The agency intends
to take this experience into account in all congestion management
activities.

III. Proposal for Efficient Allocation of Capacity at JFK and Newark

A. Need for More Efficient Allocation

    Congress has directed the Department to place ``maximum reliance on
competitive market forces and on actual and potential competition.'' 49
U.S.C. 40101(a)(6). The ability of carriers to initiate or expand
service at the airport is hindered, in large part, by the imposition of
a cap. Accordingly, the FAA believes it must strike a balance between
(1) promoting competition and permitting access to new entrants and (2)
recognizing historical investments in the airport by carriers and the
need to provide continuity. It is not the role of the Government either
to dictate particular business models or to constrain a market and
provide no means for others to enter that limited market. Simply
imposing a cap and then doing nothing to ensure that there are
competitive market forces and actual and potential competition is
unacceptable.
    Not only is the FAA required to assure the efficient use of the
NAS, but it must do so in a manner that does not penalize all potential
operators at the airport by effectively shutting them out of the
market. Accordingly, the FAA believes that it is well within the
agency's authority in 49 U.S.C. 40103 to

provide some mechanism for slot reallocation. Today's proposal attempts
to strike the appropriate balance by actively developing a market that
values the limited asset that the FAA created.

B. Authority To Assign Slots at JFK and Newark

    The FAA has statutory authority to dispose of property. Because of
the congressional mandate in 49 U.S.C. 40101(a)(6) to rely to the
maximum extent possible on competitive market forces, the FAA is
tailoring its approach at the two airports. Today the agency is
requesting comment on an approach whereby the FAA would establish a cap
on operations and address, through a regulation, which slots would
revert to the FAA for reallocation but would use its transaction
authority to allow for reallocation of slots via a market-based
mechanism.
1. Authority To Determine the Best Use of the Airspace
    The United States Government holds exclusive sovereignty over
United States airspace. 49 U.S.C. 40103. Citizens of the United States
have a public right of transit through navigable airspace, but the FAA
is authorized to assign the use of the airspace necessary to ensure the
efficient use of airspace. To the extent these needs can be met without
specifying which citizen may transit or reserve a particular segment of
airspace at a particular time, there was no need for the FAA to place
constraints such as slots on the use of the airspace--this remains the
case for the vast majority of the NAS.
    As described above, however, at New York-area airports, in order to
ensure the efficient use of airspace, FAA has had to impose constraints
by assigning to carriers operational authority to conduct a scheduled
arrival or departure operation on a particular day of the week during a
specified 30-minute period. These reservations of airspace were called
slots under the HDR. After the FAA issued the ``buy/sell rule'', 14 CFR
part 93, subpart S, these slots were treated not only as property of
the United States Government, but also as if the carriers had a
property interest, albeit an interest that was heavily encumbered by
the restrictions imposed by the FAA. The nature of this property
interest, however, has always been somewhat unclear. To encourage the
most efficient use of constrained airspace, the FAA is clarifying the
proprietary interest that the FAA is willing to transfer to airlines
for a limited period of time. However, the FAA has determined that in
order to assure the efficient use of airspace, it cannot simply permit
those whom it grants authority to use the airspace to treat that
authority as their own; it is the United States Government that has
sovereignty over, and control of, the airspace. Such an approach would
not only ignore the inherently valuable nature of an airspace usage
assignment, but allows a select few to profit from a governmental
interest to the detriment of their competitors and the public as a
whole.
2. Authority To Enter Into Leases and Cooperative Agreements
    The FAA has authority to lease real and personal property,
including intangible property, to others. 49 U.S.C. 106(l)(6) and
106(n). When disposing of an interest in property, however, the FAA
must receive adequate compensation. 49 U.S.C. 40110(a)(2).
Nevertheless, the FAA also has broad authority to enter into
cooperative agreements on such terms and conditions as the FAA may
consider appropriate. 49 U.S.C. 106(l)(6). Under the Federal Grants and
Cooperative Agreements Act, a cooperative agreement is to be used when
the principal purpose of the agreement is to transfer a thing of value
to a recipient, either public or private, to carry out a public purpose
of support or stimulation authorized by law, instead of acquiring (by
purchase, lease or barter) property or services for the direct use or
benefit of the agency, and there is substantial Federal involvement in
the activity.
    Because we must balance the need to promote market forces with the
value of continuity and certainty of services, the FAA believes this is
the appropriate vehicle to use to transfer most of the slots as
described in the following options, for a ten-year period, to the
carriers that currently have operating authorizations at JFK and
Newark. Doing so will recognize these carriers' historical investment
in JFK and Newark, and the public interest that has been served by that
investment. In addition, it would prevent disruption to the national
air transportation system that might otherwise occur, allowing the
public to benefit from continued certainty of readily available air
transportation to and from these airports. There will, however, be
substantial ongoing Federal involvement with these slots, as the FAA
will retain ATC responsibilities for assuring that the use of these
segments of airspace for their specified times is done safely and with
maximum possible efficiency.\12\
---------------------------------------------------------------------------

    \12\ Under the cooperative agreements FAA will be transferring a
leasehold interest in the slots, but FAA will not entirely dispose
of its property. Receiving compensation from these transfers is
antithetical to the definition of a cooperative agreement.
Nonetheless, to the degree that adequate compensation might be
considered required under 49 U.S.C. 40110(a)(2), the compensation
will be the carriers' agreement to be bound by the terms in the
cooperative agreement as well as FAA's recognition of the public
value received by the carriers' historical investment at JFK and
Newark.
---------------------------------------------------------------------------

C. Description of the Proposal

1. Categories of Slots
    Today's proposal would create three categories of slots: Common
Slots, Limited Slots, and Unrestricted Slots. All three categories
would be held by carriers pursuant to a lease. While the overwhelming
percentage of slots will be Common Slots, many carriers would hold
slots in all three categories.
    Common Slots would be assigned to carriers currently serving the
airports, and would be leased for the duration of the rule, i.e., ten
years. Once the rule sunsets, all interests would revert to the FAA,
assuming the rule is not replaced by a different regulatory regime.
Unlike slots allocated under the HDR and Operating Authorizations
allocated under the JFK and Newark Orders, carriers would be granted
clear property rights to Common Slots, allowing the slots to be
collateralized or subleased to another carrier for consideration.
However, Common Slots would be subject to reversion to the FAA under
the rule's minimum usage provision and could be withdrawn for
operational reasons.
    Leases for Limited Slots would also be assigned by cooperative
agreements between the FAA and the carriers, but during each of the
first five years of the rule, a percentage of Limited Slots would be
made available by auction, at which point they would be converted to
Unrestricted Slots. Limited Slots would consist only of those slots
operated on a daily, year-round basis. Thus, slots used on a seasonal
or on a less-than-daily basis would not be designated as Limited Slots.
The FAA arrived at this tentative proposal because we seek to populate
the auction pool with those slots that are most economically valuable
to carriers seeking to serve New York City. Slots only available on
certain days or during one scheduling season would likely have value
only to small subsets of operators at any given time, thus limiting the
effectiveness of the market. Although slots would be awarded to
carriers through the auction for daily, year-round operation, the

acquiring carrier may sublet to other carriers any portion of that
award.
    Under alternative 1, as currently proposed, 10 percent of the slots
above the baseline operations \13\ at both JFK and Newark would be
designated as Limited Slots, and thus could become Unrestricted Slots.
Under alternative 2, 20 percent of the slots at JFK above the baseline
operations would be designated as Limited Slots.
---------------------------------------------------------------------------

    \13\ ``Baseline operations'', as defined in Sec.  93.162 and
Sec.  93.182, are up to 20 slots per day.
---------------------------------------------------------------------------

    The FAA recognizes that the percentage of slots that the agency
proposes to reallocate represents a relatively small percentage of the
total number of slots at the two airports, particularly since each
carrier's first 20 slots, at each airport, will not be subject to
reversion. Accordingly, we specifically invite commenters to address
the desirability of assigning different percentages for both JFK and
Newark under both alternatives. For example, should we increase the
percentages to be auctioned under alternative 1 to 20 percent?
Additionally, the FAA seeks comment on whether the proposed percentages
are sufficient to ensure the opportunity for new entry and an efficient
allocation of slots among all carriers at the airports, such that each
slot is allocated to the user who values it the most highly. Increasing
the percentage of slots for auction would further facilitate the use of
market forces to allocate capacity, which is a major goal of this
rulemaking. On the other hand, lowering the number of slots withdrawn
for auction would be less disruptive to the carriers currently
operating at JFK and Newark, and would allow the agency to gain
experience with the auction process. The agency also seeks input on the
appropriate percentages of slots available for auction (both in total
and annually) sufficient to assure an efficient allocation of this
scarce resource. The final rule may provide for the reversion of a
higher or lower percentage of slots available for auction than we have
proposed under either alternative in this document.
    Following a review of the comments and further consideration, we
may provide in a Final Rule for an auction of a greater percentage of a
carrier's Limited Slots. As with Common Slots, Limited Slots could be
withdrawn under the proposed minimum usage provision, or for
operational reasons.
    Unrestricted Slots are slots that a carrier would lease directly
from the FAA under the auction processes under both alternatives. These
slots would not be withdrawn by the FAA either under the minimum usage
provisions or for operational reasons because carriers are required to
purchase them due to government action. As with Common Slots,
Unrestricted Slots would expire when the rule sunsets.
2. Initial Assignment of Capacity
    Upon the rule's effective date, each carrier at JFK and Newark
would automatically be assigned up to 20 slots. Carriers whose approved
schedules under the JFK and Newark orders call for fewer than 20
operations would be assigned the same number of slots as they are
approved to operate under the respective orders. These slots would
constitute carrier's baseline operations. Slots above a carrier's
baseline operations would be designated as Common or Limited Slots as
described above. The FAA believes this is a rational approach to
assuring that no carrier is affected at a level that could seriously
disrupt its existing operations at the airports.
    The number of slots to be designated as Limited Slots would be
calculated after subtracting the slots in each carrier's baseline
operations of up to 20 slots per day. In other words, if a carrier has
30 slots at JFK or Newark, 20 would be protected at that airport. Under
alternative 1, 10 percent of the remainder, or one slot, would become a
Limited Slot. Under alternative 2, 20 percent of the remainder, or two
slots, would become Limited Slots at JFK. Of course, most carriers hold
a number of slots that would not be evenly divisible by applying a 10-
or 20-percent rule. In such situations, the FAA would round the number
of slots to be designated as Limited Slots up or down to the nearest
whole number. As a practical matter, a carrier would have to have at
least 25 slots under alternative 1 or 23 slots under alternative 2,
before any would be designated as Limited Slots.
    Given the seasonality of operations at these airports, both in
terms of differences between summer and winter operations and within-
season variability (which is much greater than at LaGuardia), the
determination of which carrier is entitled to which slot will be based
on the seasonal schedules approved by the FAA for summer 2008 and
winter 2008/2009. The FAA has tentatively decided to assign the
majority of slots at the airport to existing carriers in order to
minimize disruption and to recognize the carriers' historical
investments in both the airport and the community.
    No later than the final rule's effective date, the FAA will inform
all carriers that will have Limited Slots of the number of Limited
Slots they will have. The designations as Limited Slots would be made
by both carriers and the FAA. Once the total number of Limited Slots is
communicated to each carrier, the carrier would designate 50 percent of
the total by notifying the FAA within 10 days which of the slots in its
slot pool it designates as Limited Slots. During the subsequent 10
days, the FAA would determine the remainder of slots that will be
designated as Limited Slots for each carrier. In making this
determination, the FAA would initially exclude from consideration slots
held during all hours where carriers have collectively determined two
or more slots should be Limited Slots. This approach will assure that
slots will be available for auction throughout the day. The time
windows for the Limited Slots would be distributed evenly over the day
to the extent possible.
    Limited Slots would expire on designated dates and the duration of
each Limited Slot would be arranged to ensure that each affected
carrier's aggregate lease duration would be approximately equal to that
of the other affected carriers. The FAA would publish a list showing
the expiration date for each Limited Slot. In this way, all carriers
would know within 20 days of the rule's effective date what slots will
become available for purchase, and when.
    A technical report more fully explaining how Limited Slots could be
categorized and allocated was prepared for the LaGuardia rulemaking. A
copy of that report has been placed in the docket for this rulemaking.
Commenters are encouraged to review and comment on that document.
3.Market-Based Award of Capacity
    For the first five years of the rule, the FAA would conduct an
annual auction of Limited Slots. Section 93.165(c) of subpart N and
Sec.  93.185 of subpart O provides for the conversion of Limited Slots
to Unrestricted Slots. In accordance with the schedule published under
Sec.  93.164, one-fifth of the identified Limited Slots would revert to
the FAA for auction each year. Both the auction and secondary market
would be open to any carrier in order to avoid artificially restricting
any carrier's flexibility to acquire Unrestricted Slots for its
services, and to offer carriers wishing to initiate or expand
operations at JFK or Newark the full range of opportunities to acquire
slots.
    Under alternative 1, the FAA is proposing to have 10 percent of the
carriers' slots above its baseline operations revert to the FAA over
the first five years of the rule. The FAA would auction the reverting
Limited

Slots, with FAA retaining proceeds of the sale. After recouping its
auction costs, the FAA plans to spend the remainder of the proceeds on
aviation congestion and delay management initiatives in the New York
City area.
    Alternative 1 would make approximately 19 slots available for
auction at JFK and 18 slots available at Newark each year. Carriers
typically require pairs of slots, so alternative 1 would provide the
equivalent of approximately 9 round trips per day at both airports.
Under alternative 1, any carrier could bid on a slot in an auction that
is blind to the participants and it would be awarded in the form of an
Unrestricted Slot to the highest responsive bidder. The winning carrier
could commence operations using the newly acquired slot at the
beginning of the next summer scheduling season.
    Alternative 2 proposes a different auction procedure for JFK that
would provide that the holder of a Limited Slot would retain the
proceeds of its sale in the auction. The only deduction from the sale
price would be for the FAA's costs associated with conducting the
auction.
    Under this alternative, 20 percent of the carriers' slots above the
baseline operations at JFK would revert to the FAA over the first five
years of the rule. Therefore, approximately 179 slots would be
available at JFK, of which approximately 36 slots would be available
for auction each year. Carriers typically require pairs of slots, so
alternative 2 as proposed would provide the equivalent of 18 round
trips per day at JFK.
    Under alternative 2, Unrestricted Slots would be awarded to the
highest responsive bidders in a blind auction. Only cash could be bid
for a slot. Since the goal of this rulemaking is to impose marketplace
discipline on the use of slots, the FAA has proposed certain
restrictions in alternative 2 to reduce anticompetitive behavior. For
example, carriers may not set minimum bids for the slots, so they
cannot impose a price so prohibitively high as to effectively preclude
any sales. For similar reasons, carriers would not be permitted to bid
on their own slots; otherwise, knowing that no actual payment would be
made, they could bid unrealistic amounts that no competitor could
match. With unrealistic bids, the fair market value of the slot would
not be identified.
    Although the prohibition against a carrier bidding on its own slots
would mean that the carrier would no longer have that slot, any carrier
could negotiate for subleases or transfers from other carriers in the
secondary market or bid on other slots concurrently up for auction and
held by other carriers.\14\
---------------------------------------------------------------------------

    \14\ The FAA will attempt to auction an even number of slots
during each hour to provide an opportunity for a carrier to replace
a slot that it is auctioning. This may not always be possible.
---------------------------------------------------------------------------

    The FAA believes that the above procedures could not be applied at
Newark, because the current market profile there would diminish the
likelihood that the auction would bring the beneficial effects of
market forces that this proposal seeks to stimulate. At JFK (and at
LaGuardia), no one carrier provides the vast majority of slots that
would be up for auction, and any carrier that values a slot at a
particular time could have the opportunity to bid on an equivalent slot
that is held by another carrier. At Newark, however, Continental would
have approximately 174 of its slots up for auction if 20 percent of its
slots reverted to the FAA, but would be unable to bid on those slots or
on an equivalent number of slots because only 19 slots would be
available from any other carrier. Under this circumstance, the prices
paid for slots at Newark may not be reflective of their actual value,
with no meaningful slot market developing.
    Among the specific questions on which we request comment is whether
under alternative 2, 20 percent of a carrier's slots above its baseline
at Newark should revert to the FAA for auction, even though the
reallocation mechanism would be the same as under the first
alternative. The agency also requests comment on whether alternative 2,
in its entirety, should be adopted at Newark.
    The FAA considered using a transparent auction procedure for both
alternatives 1 and 2. The FAA believes that such transparency with
respect to identity of the bidders and their corresponding bids would
encourage gaming of the auction and significantly reduce the economic
value of the initial auction of slots. The FAA also believes that an
auction where the identity of the bidders is not known assists new
entrants seeking to enter the market. Therefore, under Alternative 1,
the identity of bidders would not be known to other bidders. Since the
FAA will accept the highest responsive bid, regardless of who that
bidder is, there is no need to keep bidders' identities from the
agency. Under Alternative 2, the identity of bidders would be known
only to the auctioneer, and then only for administrative purposes.
    The FAA does not propose to auction slots after the first five
years because it believes that ideally slots should transfer from one
carrier to another through the secondary market. Not only will the
auctions help create a market for slots, but all carriers will be able
to assess the true market value of a slot. Armed with information on
how much a given slot is likely to be worth on the open market,
carriers (and their shareholders) will be in an even better position to
determine how best to use their slots based on commercial
considerations.
    In the unlikely event no bids were received for a slot, we propose
that the FAA retire the slot until the next auction to assist in delay
mitigation. We request comment on whether, in the alternative, the
carrier that previously held the slot should retain the slot for use
until the next season.
4. New and Returned Capacity
    As mentioned above, the FAA may raise the caps at JFK or Newark
based on an analysis of delay statistics, aircraft operations at the
respective airports, airport and airspace improvements, and other
pertinent factors. The agency believes there is unlikely to be much, if
any, returned capacity because carriers can sublease slots that they do
not utilize efficiently rather than surrender them to the FAA because
of inadequate usage. It is impossible at this time to estimate with any
certainty how much new capacity is likely to come online; but it is
unlikely there will be much new capacity in the near-term. Over a
longer period of time, the realization of new capacity is dependent
upon NextGen technologies. The efficiencies realized from the New York/
New Jersey/Philadelphia Metropolitan Area Airspace Redesign project
will benefit delay reduction and will not be used to add new capacity
at the airports.
    The auction method proposed for LaGuardia, whereby all new and
returned capacity would be auctioned, maximizes the total number of
slots available for auction and would, in turn, increase the
efficiencies that the proposal is intended to generate. However, the
FAA believes the character of operations at JFK and Newark justifies a
different approach. At both airports, a substantial percentage of air
traffic is international. Historically, the FAA has used the IATA
Worldwide Scheduling Guidelines (WSG) to allocate slots for
international operations at slot constrained airports to the extent
they did not conflict with the rules imposing caps at the affected
airports.
    The use of the WSG to assign new slots could affect carriers'
scheduling incentives and reduce the efficiency of the market for
existing slots. However, given the amount of new capacity that

is likely to be available during the rule's timeframe, this effect is
likely to be small. Given the significant international presence at
both airports, the FAA proposes to follow procedures for assigning
newly available or returned slots that are largely derived from the
WSG. A new entrant would be defined as a carrier holding or operating
eight slots or fewer, assigned by the FAA, during the constrained
hours. The FAA understands that in order to maintain viable operations
at JFK or Newark, a carrier would need four to six slots for domestic
operations, and at least two slots for an international operation. The
five slots contemplated under the WSG provide little opportunity for a
new entrant carrier to establish its operations before losing new
entrant status and thereafter being able to expand in the New York
market only through the purchase of a lease. Setting a limit of eight
slots administratively assigned by the FAA as the cut-off for new
entrant status allows a carrier to maintain its operations and provides
some ability to grow without jeopardizing the carrier's access to slots
through the WSG.
    The agency is proposing that carriers lose their new entrant status
if, at any point during the duration of the proposed rule, the FAA
assigns a total of more than eight Common or Limited Slots on a
particular day. Thus, if a carrier were awarded six Common Slots on a
given day of the week, it could only be eligible for assignment of two
more slots for that day through the WSG before losing its new entrant
status, even if it subsequently subleased some of those Common Slots to
another carrier, giving it less than eight total slots. However, the
same carrier could be assigned six Common Slots, acquire any number of
additional slots through the secondary market, and still be eligible to
receive two additional slots under the WSG as a new entrant. This
provision is intended to prevent carriers from continuing to gain an
advantage as a new entrant by transferring holdings for which they have
provided no monetary consideration. On the other hand, since only those
slots administratively assigned by the FAA, and not those awarded by
auction or through a lease with another carrier, would be considered in
determining new entrant status, carriers with eight or fewer of these
slots will not be discouraged from entering into lease agreements with
other carriers, contributing to the development of a robust secondary
market. A carrier's new entrant status would not be affected by one-
for-one trades, which the agency believes are necessary for operational
efficiency, which do not result in either a gain or reduction in
operations, and for which no consideration may be given. The FAA seeks
comment on whether carriers should be allowed to retain their new
entrant status if they have subleased or otherwise transferred slots
originally allocated to them by the FAA.
    After allowing for retimings and accommodating requests by new
entrants, the FAA would evaluate the efficiency of the requested
assignment in determining which carriers should receive the slot. We
would consider the effective period of operation, the extent and
regularity of the proposed usage, and the carrier's schedule
constraints.
    Using a WSG-based approach would facilitate the continued smooth
integration of JFK and Newark into the international slot allocation
system. Based on discussions during the ARC, we believe that the WSG
approach is well-understood and is an internationally-recognized system
of allocation at airports.
    We recognize that this method of allocation differs from the method
proposed for new and returned capacity in the companion proposal at
LaGuardia. We also recognize that several commenters to the LaGuardia
NPRM argued that any administrative allocation of capacity could dilute
the viability of the secondary market. Accordingly, the FAA may adopt
an allocation method that allocates new and returned capacity via an
auction. This was the approach favored in the LaGuardia SNPRM. Under
that approach, the slots would be auctioned as Unrestricted Slots.
During the first five years of the rule, this new capacity would be
auctioned at the same time as the slots that revert to the FAA under
today's proposal. Should insufficient capacity be available to justify
the expense of conducting an auction in the last five years of the
rule, the FAA would retain the slots until sufficient capacity was
available for a meaningful auction. The FAA invites comment as to
whether the final rule should specify that new and returned capacity at
JFK and Newark be allocated by auction instead of by the WSG-method
method described above.

D. Auction Procedures

    The FAA is currently engaged in procuring the services of a
contractor to conduct auctions of the proposed Limited Slots.\15\ The
details regarding the specifics of any potential auction will be
disclosed after the contractor has developed and validated an auction
process and the FAA is ready to proceed with an auction.\16\
---------------------------------------------------------------------------

    \15\ As indicated in the Order Limiting Operations at John F.
Kennedy International Airport, 73 FR 3510 (1/18/08) and the Notice
of Proposed Order Limiting Scheduled Operations at Newark Liberty
International Airport, 73 FR 14552 (3/18/08), the FAA intends to
auction new or returned capacity, if any, under those orders. The
contract would cover auctions at all possible airports. The FAA is
not waiting until this rule is finalized to award the contract,
because this proposal and the two orders contemplate potentially
conducting the first auction before the end of the year.
    \16\ Since the auction will address the lease of slots awarded
by the FAA under its leasing authority rather than under any
administrative allocation, notice to interested parties will be
governed by applicable procurement law rather than the
Administrative Procedure Act.
---------------------------------------------------------------------------

    In order to ensure that auction participants understand how the
auction process works, the FAA anticipates the contractor would have to
conduct a training seminar and a mock auction prior to each auction. A
single training seminar and mock auction would not suffice since
presumably not every carrier will participate in every auction. The
auction would also have to be structured to prevent gaming. This would
likely be accomplished through the use of activity rules.
    Finally, the contractor would have to provide and maintain a secure
communication mechanism for conducting the auction and develop a
website that provides information on the availability of slots and the
logistics of the auction.
    At present, the FAA is contemplating requiring bidding carriers to
provide up-front payments as a prerequisite to participating in the
auction and requiring full payment for the slots at the time of award.
The Federal Communications Commission (FCC) has experienced problems
with bidders who were not financially secure or who were otherwise
unwilling or unable to pay for the awards. The upfront payment could
also discourage bid-sniping by preventing carriers from adding slots to
their bid package beyond the amount of the upfront payment. The FAA
recognizes that paying for the entire lease at one time could be
expensive; however, it also believes that serious bidders should be
able to obtain the requisite financing.

E. Secondary Trading

    All slots will have value in the secondary market. To the extent
that the secondary market is not mature and the value of slots is not
well-known, the auction should inform potential buyers of the value of
these slots and stimulate the secondary market. The FAA believes that
ultimately the best way to maximize competition is with the

development of a robust secondary market. Through the years, the FAA
has received complaints that carriers were unaware of possible
opportunities to buy or lease slots at slot-controlled airports and
that incumbent carriers were colluding to keep new entrant carriers out
of the airport.
    We believe some measures must be taken to assure access to the
secondary market. All carriers interested in initiating operations at
JFK and Newark, or increasing their operations there, should have an
opportunity to participate in any transactions. Accordingly, the FAA
proposes to (1) permit carriers to include Common Slots for sale in the
auction, organized by the FAA, and (2) establish a ``secondary-market''
bulletin-board system whereby carriers seeking to sublet slots, or to
acquire such subleases, would notify the FAA, which would then post the
relevant information on its Web site.
    If a carrier wishes to include some of its slots in the auction,
these slots will be treated in the same manner as other slots being
auctioned by the FAA. However, the carrier would be able to specify a
minimum price for these slots so that it need not give up the slots
unless they command a price that the carrier is willing to accept.
    The FAA has tentatively decided that transactions via the bulletin-
board-system would not have to be blind, and the transaction could
include both cash and non-cash payments. While it may be argued that
transparency among parties to the transaction encourages anti-
competitive behavior, the FAA believes that a blind, cash-only
requirement could be unduly restrictive. In particular, the FAA
believes that non-cash bids promote competition by enlarging the pool
of potential bidders. Thus, non-cash transactions should result in both
more bidders and potentially higher bids. However, it is critical that
the identities of parties be known if non-cash assets are permitted
because that is the only way to value those assets. In addition, the
non-cash aspect of the transaction would require direct negotiating.
    The FAA believes that these concerns could be met in a blind
secondary market. For example, the agency could adopt a hybrid scheme
whereby the initial offer and acceptance would be blind and limited to
a cash offer, but the parties could negotiate non-cash assets after the
offer had been accepted. Such an approach may be workable. During the
posting of the lease and subsequent bidding for the slots, the parties'
identities would not be known. Once the auction closed, the FAA would
forward the highest bid to the sublessor without any bidder
identification. The sublessor would have a set number of business days
to accept the bid. At that point, the parties' identities would be
revealed, and they would have a set period of time to negotiate the
possibility of non-cash assets in lieu of money as consideration for
the lease. If the parties were unable to come to an agreement, the
lease would have to proceed on a cash basis. The FAA seeks comment on
this and other viable alternatives.
    The FAA recognizes that non-blind transactions could facilitate,
and even encourage, collusion. The Department has the authority under
49 U.S.C. 41712 to investigate, prohibit, and impose penalties on an
air carrier for an unfair or deceptive practice or an unfair method of
competition in air transportation or the sale of air transportation.
The Department has consistently held that this authority empowers it to
prohibit anticompetitive conduct (1) that violates the antitrust laws,
(2) that is not yet serious enough to violate the antitrust laws but
may do so in the future, or (3) that, although not a violation of the
letter of the antitrust laws, is close to a violation or contrary to
their spirit.\17\
---------------------------------------------------------------------------

    \17\ See United Airlines, Inc. v. Civil Aeronautics Board, 766
F. 2d 1107, 1112, 1114 (7th Cir. 1985) and cases cited therein; see
also H.R. Rep. No. 98-793, 98th Cong., 2d Sess. (1984) at 4-5, Order
2002-9-2, Complaint of the American Society of Travel Agents, Inc.,
and Joseph Galloway against United Air Lines, Inc, et al. (Docket
No. OST-99-6410) and Complaint of The American Society of Travel
Agents, Inc., and Hillside Travel, Inc. against Delta Air Lines, et
al. (Docket No. OST-02-12004) (September 4, 2002) at 22-23.
---------------------------------------------------------------------------

    In order to assure that the Department can conduct adequate
oversight, today's proposal would require carriers to file with the
Department a detailed breakdown of all lease terms and asset transfers
for each transaction, and the subletting carrier would have to disclose
all bids submitted in response to its solicitation. The slot could not
be operated by the acquiring carrier until all documentation has been
received, and the FAA has approved the transfer. The FAA has considered
whether to publicly disclose non-confidential business information so
that all carriers have an assessment of the relative value of the slots
that are being traded. We have not included language to this effect in
the proposed regulatory text. However, we seek comment on whether it
would be helpful for this type of information to be disclosed.
    Under proposed Sec.  93.168 and Sec.  93.188, trades among U.S. air
carriers with unified marketing control (marketing carriers) would not
have to be advertised, because they are considered a single carrier for
the purpose of this rule and these trades do not have the
characteristics of a normal arm's-length transaction. Since foreign air
carriers are considered separate carriers, they would not be able to
take advantage of this provision. As it has done historically, the FAA
would approve these transactions after it has received written evidence
from each carrier that it consents to the transfer. The receiving
carrier could not use the slot until the FAA has provided written
approval of the transfer. Same day transactions among marketing
carriers that address emergency situations, such as maintenance
problems, adverse weather, or other unforeseen operational issues,
could take place without prior approval by the FAA, but carriers would
have to notify the FAA of the trade within five business days.
    One-for-one trades between any two carriers would similarly not be
subject to the restrictions of the secondary market. Such trades
enhance the operational efficiency of the airport. However, the
proposed rule would not allow consideration other than slots to be
offered. When monetary or other compensation is involved in a slot
transfer, the transaction would have to be handled as a sublease under
Sec.  93.168 of subpart N and Sec.  93.188 of subpart O. As with
subleases and trades between marketing carriers, the slot could not be
used by the new carrier until the FAA provides written confirmation of
the transfer.

IV. Unscheduled Operations

    The FAA intends to limit unscheduled operations into and out of JFK
and Newark during the constrained hours. Unscheduled operations at
Newark would be limited to two per hour between 6 a.m. and 11:59 a.m.
and between 10 p.m. and 10:59 p.m. and one per hour between 12 noon and
9:59 p.m. At JFK, there would 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. and one per hour between 2 p.m. and 9:59 p.m. Under today's
proposal, reservations would be required to use the airport (except for
emergency operations) and could be obtained up to 72 hours in advance.
    To the extent ATC can handle additional requests (for example, in
good weather) it will do so without regard to the reason for the
request. However, there is no guarantee that the FAA would accept more
than the specified number of 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 and would be assigned by the FAA's e-CVRS system. Additional
information of procedures for obtaining reservations will be available
on the Internet at http://fly.faa.gov/ecvrs.
    The FAA proposes to allow Public Charter operators to reserve an
allowable operation up to six months in advance. Since the reservation
pool consists of operations planned well in advance and last-minute
operations, the number of reservations made available to public charter
flights up to six months in advance would be limited to no more than
one in any hour and no more than 25 percent of the total reservations
from 12 noon to 9:59 p.m. local time. A 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 carrier could also elect to use one of its assigned slots
or obtain a slot from another carrier in the secondary market.

V. Other Issues

A. 30-Minute Windows

    Consistent with the existing JFK and Newark Orders, we propose to
assign slots at JFK and Newark in 30-minute windows. The FAA cautions,
however, that peaking within the 30-minute windows could lead to
increased congestion. The FAA will continue to monitor operations and
will address any significant operational issues through discussions
with carriers.

B. Use-or-Lose

    Consistent with the approach taken in the JFK and Newark Orders,
which is based on the WSG, the FAA is proposing a use-or-lose
requirement for JFK and Newark that takes into consideration the
seasonal nature of international, as well as some domestic, operations
at those airports. Carriers would be expected to operate their Common
Slots and Limited Slots in accordance with approved schedules at least
80 percent of the time. However, proposed Sec.  93.170 of subpart N and
Sec.  93.190 of subpart O would consider the summer and winter
schedules separately. Carriers would be allocated slots on the days and
for the time periods set out in their summer 2008 and winter 2008/2009
schedules approved by the FAA. The carriers will be subject to the use-
or-lose requirement only for those slot times that are allocated to
them. Unrestricted Slots would not be subject to usage requirements.
    The proposed rule would allow for limited waivers of the minimum
usage requirements in the event that the carrier experiences an unusual
and unpredictable condition that prevents it from using the slot for at
least five consecutive days. If weather conditions prevented
operations, for example, an operator might be granted a waiver of the
use-or-lose provisions.
    To enable carriers to make necessary operational adjustments, the
usage requirements will not apply for the first 90 days after a carrier
receives a slot under a sublease. However, a transfer between carriers
under Sec.  93.168(f) of subpart N and Sec.  93.188(f) of subpart O of
this part, in which one carrier holds marketing and inventory control
of the flights operated by another carrier, is not a sublease for the
purpose of this section. Therefore, there would be no 90-day waiver of
the minimum use requirements following a transfer between them.
Likewise, there would be no waiver for slots acquired via the WSG
because carriers would have ample time after the slots were allocated
to take the steps necessary to initiate the new operations.

C. Usage Reporting Requirements

    The minimum usage requirement for JFK and Newark would be
calculated on a seasonal basis. Therefore, we are proposing to require
carriers to file reports with the FAA for each scheduling season. In
accordance with Sec.  93.172 of subpart N and Sec.  93.192 of subpart
O, carriers would report the usage of Common and Limited Slots. An
interim report would be due no later than September 1 for the summer
scheduling season and no later than February 1 for the winter
scheduling season. Carriers would also be required to file final usage
reports within 30 days of the last day of the applicable scheduling
season.

D. Administrative Provisions

    The FAA may withdraw or suspend slots at JFK or Newark for
operational reasons pursuant to Sec.  93.167 of subpart N and Sec.
93.187 of subpart O. The FAA would assign a withdrawal priority number
to each Common and Limited Slot by a random lottery. If a reduction in
operations becomes necessary, slots would be withdrawn starting with
the highest number. The Common or Limited Slot with the lowest assigned
numbers would be the last to be withdrawn. The FAA would provide at
least 45 days' notice of its intention to withdraw or temporarily
suspend a slot, unless the operational circumstances necessitate a
shorter notice period. Given that a number of operators will have only
a limited number of slots at JFK and Newark, we are requesting 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 to avoid the possibility of marginalizing or excluding such
operators from the airport.

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
proposed rule would 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 between $256 million and $267 million at JFK and between
$207 million and 218 million at Newark from 2009 to 2019. The costs of
the rule, with a present value between $11 and $22 million each at JFK
and 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.
    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 proposed rule would 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 $686 million from 2009
to 2019. At Newark, this proposed rule would 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 $705 million from 2009-2019.\18\ 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.
---------------------------------------------------------------------------

    \18\ Estimates based on a 7 percent discount rate. All results
reported in this analysis are cost-beneficial at a 7 percent
discount rate; using a 3 percent rate would make them even more so,
with a present value net benefit of about $836 million from 2009-
2019 for JFK and $859 million from 2009-2019 for Newark.
---------------------------------------------------------------------------

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
and Newark.
     All communities with air service to JFK and Newark.
     Passengers of scheduled flights to JFK and Newark.
     The Port Authority of New York and New Jersey, which
operates the airport.

Key Assumptions

     Base Case: No operating authorizations or caps.
     Cap on operations provides delay improvement.
     Alternative 1: 100 percent of slots held by a carrier with
fewer than 21 slots at either JFK or Newark would be reassigned to the
carrier with 10 years of life; for holders with 21 or more slots at
either airport, 100 percent of the first 20 slots at each airport would
reassigned to the carrier with leases of 10 years and 90 percent of
slots above the 20 slot base for the carrier would be reassigned to the
carrier with leases of 10 years. Ten percent of slots above the 20 slot
base would be designated as Limited Slots and would be auctioned: one-
fifth immediately upon the implementation of the rule.\19\ The
remaining four-fifths of the Limited Slots would be assigned to the
carrier which held them previously, but with leases of 1 to 4 years of
life. The FAA would auction the Limited Slots to the highest bidder in
annual auctions beginning in January 2009 and ending in January 2013.
FAA would use the net revenues of the annual auctions to invest in
capacity in the New York area.
---------------------------------------------------------------------------

    \19\ The slots auctioned in January 2009 under both alternatives
would become available beginning in the summer season of 2009. Until
that time, the air carrier that formerly held the Limited Slot could
continue to use it.
---------------------------------------------------------------------------

     Alternative 2: For JFK, 100 percent of slots held by
carriers with fewer than 21 slots at JFK would be reassigned to the
carrier with leases of 10 years; for holders with 21 or more slots, 100
percent of the first 20 slots would be reassigned to the carrier with
leases of 10 years and 80 percent of slots above the 20 slot base for
the carrier would be reassigned to the carrier with leases of 10 years.
Twenty percent of slots above the 20 slot base would be designated as
Limited Slots and would be auctioned: one-fifth immediately upon the
implementation of the rule. The remaining four-fifths of the Limited
Slots would be assigned to the carrier which held them previously, but
with leases of 1 to 4 years of life. The FAA would auction the Limited
Slots to the highest bidder in annual auctions beginning in January
2009 and ending in January 2013. Carriers at JFK could not bid on slots
they formerly held but would retain the net revenues generated by the
sale of the former leases. As Newark would be treated the same under
either approach, the key assumptions for Newark are the same as under
Alternative 1.
     For the purposes of this evaluation, the effective date is
12/01/08.

Other Important Assumptions

     Discount Rate--3 and 7 percent in real (net of inflation)
terms.
     Period of Analysis: 2009 to 2019.
     Assumes 2008 constant year (real) dollars.
     Passenger Value of Travel Time--$28.60 per hour at JFK and
Newark.\20\
---------------------------------------------------------------------------

    \20\ GRA, Incorporated ``Economic Values for FAA Investment and
Regulatory Decisions, A Guide,'' prepared for FAA Office of Aviation
Policy and Plans, (October 3, 2007). Passenger value of time is for
``all purposes,'' reflecting a mix of business and leisure travel.
---------------------------------------------------------------------------

Alternatives We Have Considered

     No Action: This alternative would let the current orders
restricting operations at JFK and Newark expire on October 24, 2009
without replacing the limitations. The FAA expects that, without caps,
air carriers would expand flight operations at these two airports to
levels equal to or exceeding those experienced in the summer of 2007,
causing increasingly severe delays at these airports and throughout the
National Airspace System (NAS).
     Caps: This alternative would permanently impose caps at 81
scheduled operations per hour each at JFK and Newark, plus up to two
unscheduled operations per hour at each airport, every day from 6 a.m.
to 10:59 p.m.; it would grandfather current holders of operating
authorizations to operate at the airports.
     Alternative 1: This alternative would institute caps at
both JFK and Newark as described above and reallocate 10 percent of
eligible capacity via five annual auctions beginning in January 2009.
The FAA would retain the net proceeds of the auctions for use on
congestion and delay management initiatives in the New York City area.
     Alternative 2: This alternative would institute caps at
JFK as above and reallocate 20 percent of eligible slots at JFK, via
five annual auctions beginning in January 2009. The carrier holding a
slot to be reallocated would not be able to bid on its own slots, but
would retain the net auction proceeds. Under alternative 2, the regime
of Newark would be the same as in alternative 1.
    We are requesting comment from industry on the range of
alternatives considered.

Benefits of This Rulemaking

    The primary benefits of this rulemaking would be 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 proposed 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. FAA specifically requests comment on the impacts from the
reduction in scheduled flights.

Paperwork Reduction Act

    This proposal contains the following new information collection
requirements. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), the FAA has submitted the information requirements
associated with this proposal to the Office of Management and Budget
for its review.
    Some of the information requirements in today's notice are similar
to those originally proposed in the SNPRM ``Congestion Management Rule
for LaGuardia Airport'' (Docket No. FAA-2006-25707; Notice No. 08-04).
The FAA has applied these requirements and summarized them below.
    Title: Congestion Management Rule for John F. Kennedy International
Airport and Newark Liberty International Airport.
    Summary: The FAA proposes to grandfather the majority of operations
at JFK and Newark and develop a secondary market by annually auctioning
off a limited number of slots at each airport. This proposal also
contains provisions for use-or-lose and withdrawal for operational
need. The FAA proposes to sunset the rule in ten years. More
information on the proposed requirements is detailed elsewhere in
today's notice.
    Use of: The information is reported to the FAA by scheduled
operators holding slots 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 proposed information
requirements in today's notice 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; (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); and (6) request for
assignment of slots available on a temporary basis.
    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
SNPRM ``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).

Section 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
proposed level of baseline operations each carrier would be
grandfathered under today's proposal, we assumed the four carriers with
the most operations at JFK would expend up to 10 days of planning time
each, potentially 80 hours, to develop and submit their designations of
50 percent of their Limited Slots, for a total of 320 hours. This
designation would occur once, 10 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 proposed level of baseline operations each carrier would be
grandfathered under today's proposal, 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, 10 days after the final rule effective date.

Section 93.165(c) Initial Assignment of Slots

    We assumed that the 77 carriers operating at JFK and 39 carriers
operating at Newark would expend time submitting and collecting
information to participate in the proposed auctions for slot
assignments. The FAA is currently in the process of procuring auction
software and services. The FAA will make available burden estimates for
information requirements relating to auction participation in a
separate notice.

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 1\1/2\ 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 1/\1/2\ hours for each occurrence of a lease or transfer of a
slot. For the largest operator, we assumed that a lease or transfer of
4 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 1\1/2\ hours 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 1\1/2\ hours 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
4 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 93.171 Unscheduled Operations

    This section of the proposed rule requires unscheduled and public
charter operations at JFK and Newark to be reserved using the Airport
Reservation Office (ARO) or, for public charters seeking reservations
up to six months in advance, through the Slot Administration Office. It
is the FAA's intention, however, to require these reservation
procedures at JFK and Newark regardless of and apart from the outcome
of this rulemaking. Accordingly, the FAA will make available burden
estimates relating to unscheduled and public charter operations in a
separate rulemaking notice.

Section 93.172(a)-(b) Reporting Requirements

    JFK
(77 carriers) * (1.5 hours per submittal) * (4 occurrences per year) =
462 hours.
    Based on burden estimates from the ``Congestion Management Rule for
LaGuardia Airport'' (Docket No. FAA-2006-25709; Notice No. 08-04), we
assumed the 77 carriers operating at JFK would expend, on average, 1\1/
2\ 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.
    Based on burden estimates from the ``Congestion Management Rule for
LaGuardia Airport'' (Docket No. FAA-2006-25709; Notice No. 08-04), we
assumed the 39 carriers operating at Newark would expend, on average,
1\1/2\ hours every two months to submit the data required by Sec.
93.172.

Summary

    JFK
    Total First Year Hourly Burden--320 Hours.
    Total Recurring Annual Hourly Burden (per year for 10 years)--1,032
Hours.
    Newark
    Total First Year Hourly Burden--640 Hours.
    Total Recurring Annual Hourly Burden (per year for 10 years)--582
Hours.
    The burden estimates for JFK and Newark do not include the time
required to participate in the annual auctions. The FAA will make
available burden estimates for information requirements relating to
auction participation in a separate notice.
    The agency is soliciting 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 July 21, 2008, and should direct
them to the address listed in the ADDRESSES section of this document.
Comments also should be submitted to the Office of Information and
Regulatory Affairs, OMB, via facsimile at<PHONE_NUMBER>, 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.

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, Sec.  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 proposed rule most directly affects four scheduled operators at
JFK (Delta Air Lines, JetBlue Airways, American Airlines, and United
Airlines) and five scheduled operators at Newark (Continental Airlines,
American Airlines, United Airlines, Delta Air Lines, and U.S. Airways).
These carriers would 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 two scheduled operators (CommutAir and EOS Airlines) 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). Of
the two scheduled operators at JFK, 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.
    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 operators. 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. Section 93.171(g) of
subpart N and Sec.  93.191(g) of subpart O enables the FAA to determine
that additional reservations may be accommodated for a specific time
period, and allows unused slots to be available temporarily for
unscheduled operations. In summary, while the proposed 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. We have 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.
    Therefore, the FAA certifies that this proposed rule would 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 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 proposed 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, if adopted, would not impose
costs or barriers to international entities within the national
airspace system.
    Foreign entities at both JFK and Newark would not have any slots
classified as Limited Slots under either alternative 1 or 2 under the
terms of Sec.  93.164 of subpart N and Sec.  93.184 of subpart O of the
proposed rule. 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.

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 proposed rule under the principles and
criteria of Executive Order 13132, Federalism. We determined that this
action would 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.

Regulations That Significantly Affect Energy Supply, Distribution, or
Use

    The FAA has analyzed this NPRM 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 it is
not a ``significant regulatory action'' under Executive Order 12866,
and it is not likely to have a significant adverse effect on the
supply, distribution, or use of energy.

Additional Information

    Comments Invited: The FAA invites interested persons to participate
in this rulemaking by submitting written comments, data, or views. We
also invite 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, please send only one copy of written comments, or
if you are filing comments electronically, please submit your comments
only one time.
    We will file in the docket all comments we receive, as well as a
report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. Before acting on this proposal, we
will consider all comments we receive on or before the closing date for
comments. We will consider comments filed after the comment period has
closed if it is possible to do so without incurring expense or delay.
We may change this proposal in light of the comments we receive.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be
proprietary or confidential business information. Send or deliver this
information directly to the person identified in the FOR FURTHER
INFORMATION CONTACT section of this document. You must mark the
information that you consider proprietary or confidential. If you send
the information on a disk or CD ROM, mark the outside of the disk or CD
ROM and also identify electronically within the disk or CD ROM the
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information
filed with a comment, we do not place it in the docket. We hold it in a
separate file to which the public does not have access, and we place a
note in the docket that we have received it. If we receive a request to
examine or copy this information, we treat it as any other request
under the Freedom of Information Act (5 U.S.C. 552). We process such a
request under the DOT procedures found in 49 CFR part 7.

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
proposed rule, including economic analyses and technical reports, from
the internet through the Federal eRulemaking Portal referenced in
paragraph (1).

List of Subjects in 14 CFR Part 93

    Air traffic control, Airports, Navigation (air).

Proposed Regulatory Text

    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

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

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

Proposed Amendment--Alternative 1

    2. Subpart N is added 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 subpart.
    (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 [final rule effective date], that do not exceed 20
operations per day.
    Carrier is a U.S. or foreign air carrier with authority to conduct
scheduled service under parts 121, 129, or 135 of this chapter and the
appropriate economic authority for scheduled service under 14 CFR
chapter II and 49 U.S.C. chapter 411.
    Common Slot (C-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 and/or departure reservations for
unscheduled operations at JFK, Newark, and other designated airports.
    Limited Slot (L-slot) is a slot operated 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 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 air carriers that
is arranged and sponsored by a public charter operator.
    Public Charter Operator is defined in 14 CFR 380.2 as a U.S. or
foreign public charter operator.
    Reservation is an authorization received by a carrier or other
operator of an aircraft, excluding helicopters, in accordance with
procedures established by the FAA to operate an unscheduled arrival or
departure on a particular day of the week during a specific 30-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 arrival or departure operation at JFK or
Newark on a particular day of the week during a specific 30-minute
period.
    Summer Scheduling Season begins on the last Sunday of March.
    Unrestricted Slot (U-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
subpart: 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