Policy Regarding Airport Rates and Charges

FAA-2008-0036

January 14, 2008

Notice of Proposed Amendment to Policy Statement

Bookmarked "Unofficial" Copy

As Filed at the Federal Register January 16, 2008

As Published in the Federal Register January 17, 2008

This action proposes to amend the Department of Transportation “Policy Regarding the Establishment of Airport Rates and Charges” published in the Federal Register on June 21, 1996 . This action proposes three amendments to the 1996 Rates and Charges Policy (two modifications and one clarification). These amendments are intended to provide greater flexibility to operators of congested airports to use landing fees to provide incentives to air carriers to use the airport at less congested times or to use alternate airports to meet regional air service needs. Any charges imposed on international operations must also comply with the international obligations of the United States.

By: Mary Peters

May 2007

Capacity Needs in the National Airspace System - FAA Analysis

An analysis of Airports and Metropolitan Area Demand and Operational Capacity in the Future.

This study has identified a number of airports where additional capacity will be needed to handle expected future demand. The solution at each airport will be different, and can only be identified through consideration of local factors and concerns. The FAA is prepared to work with local airport operators to address their capacity and demand issues and to seek innovative approaches to their needs.

By: Marion Blakely

January 22, 2008

Appendix to Notice - ARP Metro Areas for Fiscal Year 2008 Flight Plan - Secondary Airports

By: Rebecca B MacPherson, 800 Independence Avenue S.W.
Washington, DC 20591
rebecca.macpherson@faa.gov
202-267-3073

Appendix to Notice - Aircraft Vertically Separated?Approaches [VSA] -Takeoffs [VST] and Split-Runway [SR] Operations - PowerPoint File

Presented at:
46th AIAA Aerospace Science Meeting and Exhibit
Reno, Nevada
January 7-10, 2008

Author: Daniel Gellert
P.O. Box 3640
Sequim, WA 98382

Appendix to Notice - Airports that Accounted for 1 Percent or More of Total Delayed Operations for Proposed Amendment to Rate and Charges Policy / 2001 Airport Capacity Benchmark Report

By: Rebecca B MacPherson, 800 Independence Avenue S.W.
Washington, DC 20591
rebecca.macpherson@faa.gov
202-267-3073

January 30, 2008

Request of Airline Associations to Extend Public Comment Period

The Air Transport Association of America, Inc., the Cargo Airline Association, the National Air Carrier Association, and the Regional Airline Association on behalf of their members, have a strong interest in the proposed amendments to the Department of Transportation's 1996 Policy Regarding the Establishment of Airport Rates and Charges" published in the Federal Register on January 17, 2008. Although the Federal Register notice characterizes the proposed amendments as "two modifications and one clarification," taken together they present a policy change that demands careful consideration. In fact, the Rates and Charges Policy has been the subject of much controversy since it was first proposed, and was challenged by ATA and others in the U.S. Court of Appeals. That litigation led to portions of the policy being vacated because of DOT's failure to adequately explain the basis for its distinction between airfields and other facilities with respect to valuation. Given this history and the controversy that remains today regarding what costs an airport may include in fair and reasonable rates and charges, DOT should provide a more ample comment period.

Because the central policy issue at stake here - influencing airline market decisions through airport pricing - is inherently complex and historically has been controversial, we believe that it merits additional time to fully develop comments reflecting the views of industry stakeholders.

Furthermore, the notice as published lacks two critical pieces of information needed to assess its applicability. First, the definition of "congested airport" incorporates by reference two separate lists of airports, one issued in 2001 and the other in 2007, as well as a threshold based on delay statistics for the most recent year for which data is available. This multi‑prong definition requires a complicated analysis subject to multiple interpretations to get even an initial sense of how many airports might be subject to the proposed amendments today and in the future. Second, the notice refers to the current list of secondary airports eligible for inclusion in the rate base of a congested airport as included as an appendix to the notice; but no such list appears in the Federal Register of January 17, 2008 or in the version of the notice posted on FAA's web site.

These ambiguities and omissions, coupled with the already complex nature of the policy and legal issues presented by the proposed amendments, make it especially challenging to develop and coordinate meaningful comments in the 45 days allocated. ATA, RAA and NACA therefore request that the public comment period for this proceeding be extended for an additional 30 days, until April 2, 2008.

Counsel: ATA, David Berg

February 4, 2008

Request of The International Air Transport Association to Extend Public Comment Period

The DOT proposal includes significant presentation on DOT’s interpretation of the case law in this highly litigated area.  It also raises implications in terms of the impact these changes could have on existing U.S. aviation bilateral agreements. Both areas require a significant commitment of time and resources of the organization.  We do not believe that we can consult with member airlines and complete this research in a reasonable and useful fashion by the March 3, 2008 deadline.

Given all of the above, IATA respectfully requests that the public comment period for this proceeding be extended for an additional 30 days, until April 2, 2008.

Counsel: IATA, Douglas Lavin

On File at Federal Register February 7, 2008

Notice of Proposed Amendment to Policy Statement and Extension of Comment Period

As Published in the Federal Register February 8, 2008

This action extends the comment period for a proposed amendment to the "Policy Regarding the Establishment of Airport Rates and Charges" that was published on January 17, 2008. In that document, the DOT and FAA proposed to amend "The Policy Regarding the Establishment of Airport Rates and Charges" published in the Federal Register on June 21, 1996. The DOT and the FAA proposed three amendments to the 1996 Rates and Charges Policy (two modifications and one clarification).

This extension is a result of a request from the Air Transport Association of America, the Cargo Airline Association, the National Air Carrier Association and the Regional Airline Assocation on behalf of their members, to extend the comment period for thirty days.

The comment period for the Notice of proposed amendment to Policy Regarding the Establishment of Airport Rates and Charges published on January 17, 2008 (73 FR 3310) was scheduled to close on March 3, 2008, and is extended until April 3, 2008.

By: Rebecca MacPherson

February 7, 2008

Re: Response of the Aviation Assembly - Informal Group of 34 Emabassies in Washington, DC

We have to note our concern that this proposal could lead to a situation where domestic and foreign carriers alike will be charged increased landing fees that are not necessarily linked in any way to the services provided for that fee.

The proposal would allow airports in certain circumstances to increase their fee to include infrastructure under construction but not yet benefiting those carriers. One interpretation of the proposal would not confine such infrastructure to a direct link to easing congestion. Indeed, it would allow an operator of multiple airports to use fees raised at one site to fund construction at another. The proposal therefore raises doubts about compliance with ICAO principles on airport charges, which allow for pre-funding of infrastructure investments only in specific circumstances. In any event, we believe that fee increases should be moderate and that any changes to their application should not distort competition.

The Assembly would favour an approach to easing congestion that focuses on some of the issues identified earlier by the DOT, in particular voluntary limited caps on movements at peak hours and the introduction of slot co-ordination at congested airports, as provided for by lATA's Worldwide Scheduling Guidelines. These guidelines provide a harmonised set of rules that govern allocation of scarce capacity throughout the world. Many of the airports based in the territory of members of the Assembly have suffered from serious congestion. We therefore have considerable experience in trying to alleviate such problems and renew our offer to share this with the DOT if this would be welcome.

By: British Embassy, Clive Wright

March 3, 2008

Comments of the San Diego County Regional Airport Authority

We believe that a major flaw with the proposed amendment is its effect on low cost carriers. These carriers now represent a significant percentage of traffic at airports like SAN (and a large portion of aviation traffic throughout the country). Many of these carriers do not have options to up-gauge aircraft. In addition, many routes are operated on thin margins. Any additional rates and charges imposed during periods of congestion could make such marginal routes unprofitable. While network carriers can absorb such additional charges into their system, many low cost carriers could not. This leads us to the conclusion that the proposed amendment would put low cost carriers at a competitive disadvantage.

By: Thella Bowens

March 4, 2008

Re: Comments of Air Transport Association of Canada

ATAC regards the proposed amendment as flawed and possibly in contravention of the bilateral treaty between Canada and the U.S.A. on air transport signed March 12, 2007. In addition, the proposal violates ICAO's policies on airport charges as set out in Doc 9082.

The various Bilateral Air Transport Treaties between Canada and the USA explicitly ensures access to New York LaGuardia Airport and Washington National Airport for Canadian air carriers. This proposal may be seen as a Sub Rosa attempt to limit access to these congested airports.

By: Michael Skrobica

March 12, 2008

Re: Comments of Tri-Cities Regional Airport

For small markets, such as the Tn‑Cities region of Northeast Tennessee and Southwest Virginia (Kingsport, Johnson City and Bristol), nonstop access to key business markets is critical for economic development and stability in a highly competitive world. Without easy access to these key markets, smaller communities are extremely disadvantaged.

The proposed policy clearly states that "a two‑part fee would serve as an incentive for carriers to use larger aircraft and increase the number of passengers served with the same or fewer operations." Airline economics typically dictate the use of regional jets and smaller aircraft in smaller communities, and in this volatile economy it is already extremely difficult for smaller communities to gain nonstop service to cities such as Chicago and New York. If the large hubs are allowed to add an additional layer of cost penalizing carriers for using smaller aircraft, it will block virtually all small markets from gaining non‑stop access to these key business centers‑a. situation that could be considered discriminatory for large segments of the population that live in smaller communities.

This amendment assumes that by raising airport landing fees, it will deter airlines from scheduling at certain "peak" periods at big airports. But at connecting hub airports, the 'peaks" are connecting banks scheduled by the carriers to allow all communities to have viable air access to the world. Not only are small communities at risk of being completely blocked from "nonstop" access to key hubs, if successful, this amendment may very well artificially restrict small communities like TRJ from having sufficient "connecting" access to international markets.

By: Tri-Cities

March 19, 2008

Comments of San Francisco International Airport

It is critical, in SFO's view, for the DOT to acknowledge that there is no "one size fits all" solution that can be implemented at the national level. Instead, the DOT should reaffirm and expand the ability of local airport proprietors to respond to the unique problems of congestion and delay they are experiencing. The DOT should encourage airport sponsors to take account of local circumstances and, when their airports face problems of congestion and delay, to exercise their proprietary rights to set reasonable, not unjustly discriminatory rates and charges in ways that create incentives to optimize the use of scarce airfield (or terminal) capacity.

SFO is therefore pleased that the DOT has proposed to enhance the ability of local governments that operate congested airports - such as the City and County of San Francisco - to use landing fees to provide economic incentives to air carriers to (a) alter their schedules to reduce operations at congested times, (b) use congested airfields more efficiently by up-gauging their aircraft and (c) shift service to less congested secondary airports within the region. The increasing problems of congestion and delay at SFO could be reduced significantly if the air carriers serving the Airport reduced the frequency of operations during congested hours; improved their efficiency by carrying more passengers on fewer, larger aircraft; and began to offer more service to the region from alternate secondary airports.

The DOT's proposal underscores and reinforces the legal right of local airport proprietors to make airport pricing decisions that are expected and intended to influence airline market decisions - always subject, of course, to the requirement that airport rates and charges remain reasonable and not unjustly discriminatory.

By: SFO

March 21, 2008

Comments of The Reason Foundation

While we support the Department’s concept of permitting costs of facilities under construction in the rate base, we would like to suggest one modification, based on the following thoughts. The way in which the Federal Register notice is worded seems to be driven by a perceived need to keep the airport’s runway charging system revenue-neutral. We suggest that is not a wise policy, for the following reason. In order for a congestion pricing system to be effective, there should be no arbitrary limit on the amount of revenue that it produces. To constrain the design of a pricing system via a revenue-neutrality requirement is to inherently limit its effectiveness in bringing about the desired
efficiency-increasing changes in decisions by aircraft operators about when and how to make use of the congested airport’s runways. Second-generation congestion pricing systems (to deal with even higher congestion in the future) might need to separately price both landings and take-offs, as suggested by Reason’s modeling of such pricing at JFK and EWR. That more extensive model of pricing would clearly not be revenue-neutral. Stated differently, congestion imposes a real cost on passengers and airlines alike, and unless airports account for that cost, we will not have the proper price signals to direct resources into needed capacity expansion.

By: Robert Poole

March 26, 2008

Re: Comments of The National Air Transportation Association

The members of NATA do not support the Federal Aviation Administration’s proposed policy to increase airport rates based on congestion occurring at specific times of day at certain airports across the county, otherwise known as congestion pricing.

Although the proposed amendments are intended to provide greater flexibility to operators of congested airports and to encourage the use of alternative airports to meet regional air service needs, NATA is opposed to any change in airport rates for the foregoing reasons.

By: Eric Byer

March 26, 2008

Comments of Roger Beatty

As an airline operational control professional with years of experience in the development and operation of Air Traffic Control Ground Delay Programs, and after discussion with many industry colleagues, I submit the following comments, questions and some suggested investigative proposals.

By: Roger Beatty, 1821 Dunn Street, Grapevine, TX 76051

March 27, 2008

Comments of Craven County Regional Airport

I strongly suggest that DOT withdraw its rates and changes amendment in the interest of fairness. In my opinion, the hard work of our civil servants would be more productive for the future if focused on enhancing the capacity of our system to handle the increase in air traffic that will come with the growth of our population and international business.

We do not have the space required to extend the runway to accept large jets. Additionally, large jets would mean fewer of them which would not provide the business and tourism industries with the frequency and connections that support their continued growth.

By: Airport Director, Tom Braaten

March 27, 2008

Comments of Republic Airways

We applaud the DOT’s desire to mitigate the effects of gridlock. However, we oppose this proposed amendment because it attempts to treat only the symptoms of the problem while disregarding the underlying threat to dwindling capacity. Whether by straining local economies and passengers with increased fares, eroding the market value of regional aircraft, mistiming flights or halting service altogether, congestion pricing would be a major step backward at a time the U.S. aviation industry should be focused on the very real opportunity to take a leap forward through a fully functional, modern ATC system that will address congestion delay problems for the long term.

By: Republic, Warren Wilkinson

March 27, 2008

Comments of the Washington Airports Task Force | Corrected Copy

The Washington Airports Task Force respectfully recommends against the congestion pricing proposed in the "Policy Regarding the Establishment of Airport Rates and Charges."

When congestion pricing for aviation is considered against the realities of market, political, and international needs, it's not likely to provide a practical solution. However, a revised High Density Rule - possibly a variation on the lATA system - that fixed the number of flights permitted per hour, would encourage the use of larger aircraft when warranted by market demand, and encourage the efficient use of available capacity. Any revised High Density Rule should allow, as indicated earlier, for new entrants, for international obligations at gateway airports, and for a balance between regional and mainline service.

By: Leo Schefer

March 28, 2008

Comments of the Regional Airport Planning Committee

We understand that there are several potential issues with congestion fees: 1) airlines may choose to simply pass on the extra costs to the customer with no changes to their operations, and 2) the peak period fees may not be large enough to influence operations, as they would be limited by FAA's current airport cost policy requiring revenue neutrality. Since it is not known how the market will actually react to this new approach, the policy would provide real world experience. which could then lead to further changes in the policy. In the absence of other mechanisms for managing congestion, RAPC believes allowing airports to institute a two-part landing fee is a reasonable and needed change in policy that will also inform future demand management approaches. Absent an effective market based system, it seems the only other solution would be to revert to slot controls at congested airports, which have their own set of issues. However, before slot controls are considered again, airports should be allowed to experiment with true congestion pricing where fees can be set at a level that would have a significant effect on demand. Because these fees could generate excess airport revenues, the FAA's policy on revenue neutrality would need to be altered. However, if the policy change requires that these additional revenues be used to enhance airport and airspace capacity, there would be a reasonable nexus between the fees and the benefits to airport users.

By: RAPC, Rich Garbarino, 510-817-5700

March 31, 2008

Re: Note from Swiss International Airlines

Swiss as Airline supports the activities of IATA in this matter. We are concerned that these amendements have a negative inpact on our costs at the airport in US where we operate to.

By: Urs Roth, Operational Charges

April 1, 2008

Re: Comments of Pittsburgh International Airport

Pittsburgh International Airport sees the effects of airspace congestion in the northeast United States on a regular basis. It is not unusual for flights in and out of Pittsburgh to be delayed by the situation in the Northeast.  This is a situation that is affecting the travel habits of our customers. We would like to make the following comments to the NPRM.

By: Bradley Penrod

April 1, 2008

Comments of The International Air Transport Association

We believe that the DOT proposal is an unjustified attempt to circumvent long held policies in order to encourage airports to use “market mechanisms” to manage airport congestion. No direct evidence has been offered to prove that the implementation of these pricing policies is more likely to control congestion than making the economic and political investments in enhanced technology, infrastructure and procedures at congested airports and in congested airspace. Removing needed restrictions on monopoly-based charging, while at the same time pursuing federally sanctioned auctions of new capacity will ensure an uncoordinated, non-standardized, costly and likely unsuccessful effort to address the serious and growing issue of airport congestion. It will also likely result in increased costs and decreased options for the substantial portion of the public that relies on air transport to support its business and leisure travel.

By: Douglas Lavin

April 2, 2008

Comments of the George Mason University Regulatory Studies Program

In principle, allocating more costs to flights at congested times would help reduce the social costs of congestion. In practice, this cost allocation could either over- or under-adjust the prices airlines pay to use airport facilities. To reduce both possibilities, the department should require an airport that wants to charge a fee per flight operation to estimate the new revenues this fee would produce and compare them to an estimate of the social costs of congestion at that airport. If the new revenues exceed the social cost of congestion, the fee is likely too high, even if the airport’s total revenues do not exceed its total costs. If the social costs of congestion exceed the new fee revenues, the new fee may be too low.

By: Jerry Ellig, 703-993-4925, jellig@gmu.edu

April 2, 2008

Comments of the International Air Transport Association

IATA is disappointed with how the DOT Proposal was presented to the commercial aviation community.  The first time the industry was appraised of this approach was via a brief presentation during a meeting of the 2007 Aviation Rulemaking Committee.  No advance notice of the presentation was provided and little time was set aside for discussion or consideration.  Given the time and expense dedicated to the ARC process by the airlines and their trade associations, and the airlines nearly unanimous rejection of pricing as an effective means to manage aviation congestion, we feel justified in our expectation that there would have been a more comprehensive review of these proposals by the ARC stakeholders prior to their publication in the Federal Register.

The DOT Proposal undermines both the letter and spirit of these monopoly controls by significantly expanding the list of allowable costs against which an airport can charge its users.  This in turn offers airports the ability to circumvent appropriate financial controls in the name of congestion management.  This would likely result in   increased costs for airlines and their passengers, disruption/elimination of service (particularly to local communities) and discrimination against certain classes of airlines and aircraft.  Equally troubling is the fact that the DOT Proposal does not offer any promise that this radical change in DOT rates and charges policy will have a significant impact on managing airport congestion.

We believe that the DOT proposal is an unjustified attempt to circumvent long held policies in order to encourage airports to use “market mechanisms” to manage airport congestion.  No direct evidence has been offered to prove that the implementation of these pricing policies is more likely to control congestion than making the difficult economic and political investments in enhanced technology, infrastructure and procedures at congested airports and in congested airspace.  Removing needed restrictions on monopoly-based charging, while at the same time pursuing federally sanctioned auctions of new capacity will ensure an uncoordinated, non-standardized, costly and likely unsuccessful effort to address the serious and growing issue of airport congestion.

Counsel: IATA, Douglas Lavin, 202-628-9292

April 2, 2008

Comments of Kuwait Airways - Kuwait Airways Filed IATA's Comments

Kuwait Airways fully support IATA attached view on the subject matter for the possible negative implication on worldwide travel industry if applied as proposed.

By: Kuwait, Khaled Alajmi, PO Box 394, Safat, Kuwait

April 2, 2008

Comments of Lufthansa

Whereas Lufthansa rejects the measures of the Proposed Amendments as not being the effective instruments to mitigate congestion, Lufthansa reaffirms the validity of the current ICAO’s Policies on Charges for Airports and Air Navigation Services (Seventh Edition 2004, Doc 9082/7) and supports the current industry best practices set forth in the IATA Worldwide Scheduling Guidelines and reflected in EU Council Regulation 95/93 (on common rules for the allocation of slots at EU airports) for successfully managing congested airports around the world. These Guidelines offer a framework for the collaboration between airports and airlines necessary to ensure that carriers can plan future schedules with reliability based on historic flight patterns. The Guidelines also provide the requisite flexibility to accommodate ongoing adjustments in response to changes in the marketplace demand in order to better serve the needs of our passengers around the world. Lufthansa looks forward to continuing to actively participate in the critical dialogue needed to resolve airport capacity issues and to work with airports, other airlines, and governments to ensure the challenges of airport capacity can be met with sound solutions that support a vital and growing global airline industry.

Counsel: Lufthansa, Natalie Hartman

April 2, 2008

Comments of Newport News-Williamsburg International Airport

Operators of multiple airports are currently allowed to cross subsidize reliever airports. It is a small leap to include other than designated reliever airports in a local system of airports. While this policy puts a price on access to scarce system resources, it is non-discriminatory because it still allows access in the system.

Newport News is concerned with the statement that "it would not appear to be appropriate to permit an airport that is not congested in 2005 to rely on provisions applicable to congested airports in setting fees today." This purported policy would treat airports differently, including those airports considering funding expansion as opposed to fees that can be charged at "congested" airports. The Department should also consider airport rate mechanics that would allow airports to provide incentives for more point-to-point service from non-congested airports, to other airports. This would also relieve some congestion at "congested" airports by allowing flights to bypass congested hubs.

By: Airport Director, James Smith, 757-877-0221

April 3, 2008

Comments of Air France

We have great concerns about these proposed amendments, and we urge the Department of Transportation to withdraw them, as we believe they are inconsistent with international law and do not represent effective solutions for controlling congestion in US airports.

By: Georges Lachenaud, 45 RUE DE PARIS, F-95747 ROISSY CDG CEDEX - FRANCE

April 3, 2008

Comments of Air Tahiti Nui

Air Tahiti Nui respectfully submits that DOT's proposed amendments fail to adhere to U.S. and international standard requiring that airport charges must be (1) revenue neutral; (2) cost based; (3) not unreasonable or discriminatory; and (4) tied to services actually provided. In addition, Air Tahiti Nui points out that airfares are currently extremely competitive and the industry as a whole has experienced an overall decrease in airfares since September 11, 2001.

Although the downward trend has somewhat reversed in the past two years, the gains have been insufficient to keep pace with rising fuel costs. The increased landing fees proposed by DOT would result in further diminished profitability for an industry which already operates on slim profits margins. Air Tahiti Nui recognizes that congestion is a serious problem at several U.S. airports, and respectfully suggests that DOT address the problem by making the difficult political and economic investments in enhanced technology, infrastructure and procedures at congested airports. Further Air Tahiti Nui suggests that DOT utilize the Worldwide Scheduling Guidelines which has been successfully applied at the world's most congested airports rather than implementing its proposed amendments that significantly depart from well‑established international practice.

Counsel: Eckert Seamans, Evelyn Sahr

April 3, 2008

Comments of All Nippon Airways

All Nippon Airways Co., Ltd would like to comment to the US DOT's "Notice of Proposed Amendment to Policy Statement" (FAA-2008-0036). We concur and support the IATA position on this matter. We think that international carriers scheduling time window is limited due to geographical factors and therefore the proposed pricing concept would not solve the congestion.

By: ANA, Satoru Endo

April 3, 2008

Comments of American Airlines - Bookmarked

The Department’s desire to implement a system of congestion pricing at the nation’s airports is no secret. To the contrary, the Department presses the issue at every opportunity, touting congestion pricing as a market-based solution to air transportation delays. The Department has likened congestion pricing at airports to peak/off-peak pricing of toll roads cell phones. Unfortunately, such comparisons ignore the unique operational complexities of commercial aviation, particularly as compared to a commuter’s decision on which road to take, or the time a person decides to make a phone call. Congestion pricing would not be an effective solution to the delay problems plaguing the air traffic system. This conclusion has generated rare consensus among scheduled airlines and general aviation alike.

Any congestion pricing scheme implemented under the Rates and Charges Policy must be cost based and revenue neutral. This requirement makes it unlikely that airport operators could possibly raise fees in peak hours enough to change airlines’ scheduling behavior while remaining revenue neutral. Recognizing this fact, the Department proposes allowing airport users to be charged for facilities that are under construction or located at other airports for purpose of boosting fees - a policy that it had previously described as being “unreasonable” (61 Fed. Reg. 32002). The proposed amendment is also an attempt to circumvent the legislative process, and would create a short-term spike in landing fees at best. The Department should not take a bad idea – congestion pricing – and make it even worse by applying it in a manner that would deliver little more than higher prices to consumers.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

March 20, 2008

Comments of Cathay Pacfic Airways

Cathay Pacific Airways is extremely concerned about the proposed changes. We support the reduction or removal of the weight element in ATC charges becau there is no direct relation between aircraft weight and costs. It would serve as an incentive for carriers to use larger aircraft and increase the number of passengers as a whole. However, this should not be a way of increasing profit of the airports and it should not violate the long accepted revenue neutrality requirement.

The proposal suggests expanding the ability of the operator of a congested airport to include in the airfield fees of a congested airport a portion of the airfield costs of other, underutilized airports owned and operated by the same proprietor. This is simply a cross subsidization that we cannot agree to. The long accepted principle is that airfield charges should be cost related. Cross‑subsidization leads to imbalance of the level playing field and results in airlines as '‑well as their passengers paying for facilities and services that they do not use and will not benefit from. It ignores the difficulty of international carriers whose ability to use secondary airports is often more limited and it could also result in competition distortions between full service carriers and low cost carriers.

By: P.L. Ching, Manager Contracts & Services, pl_ching@cathaypacific.com

April 2, 2008

Comments of Dane County Regional Airport (Madison, WI)

While this NPRM raises issues of concern to all airports, particularly “congested airports” as defined in the NPRM, it also fails to address the possible degradation of airline service for smaller communities resulting from the implementation of the provisions within the proposed rule. Airports that serve small communities typically have a reduced menu of air service options, and the majority of service opportunities frequently are to “congested airports” which are critical for providing access to worldwide destinations and business hubs and assure access to the worldwide economy.

Additionally, regional jets are the predominant aircraft providing service for these routes with schedules operating during peak periods to maximize the benefit to the connecting hub especially in scenarios where there are a minimal number of flight options. Optimally, airline schedules are generally designed to allow domestic business travelers to complete their travel and business to major east coast and central destinations, if necessary, in one day which is an important ingredient in community economic development. Small community air service development is difficult to sustain and may not be feasible if there are requirements for higher fees or larger aircraft on existing or future routes. The NPRM does not allow the creation of local exemptions for small communities.

By: Airport Director, Bradley Livingston, 608-246-3380

April 1, 2008

Comments of Halifax-Stanfield International Airport

The proposed rule would have a significant negative impact on the economic viability of providing air service between the major airports and smaller communities and could result in a loss of air service to these centers. Numerous studies have previously been conducted that stress the importance of air service on the economic growth of these communities. These small communities rely on the air service provided by the hub operations of the major airlines to provide connections to other centers where passenger traffic demand volumes are insufficient to provide direct point-to-point service.

Supporters of this mie change have argued that the proposed changes will serve to merely encourage the air carriers to replace the regional aircraft with larger aircraft operating on reduced frequencies and will not result in a loss of air service or negatively impact the provision of air service. We disagree with this argument. The airline industry has made significant progress in achieving operational efficiency by right-sizing aircraft to the markets being served. If the demand for air passenger travel in these markets was such that the use of larger aircraft on that route was viable, the airiines would already be using the larger aircraft.

Given the questionable economic viability of this course of action and the ability to raise the necessary capital, a move to proceed as proposed is not acceptable.

By: Tom Ruth

April 2, 2008

Comments of KLM Royal Dutch Airlines

Looking specifically at the DOT Order, subsidization of secondary airports via primary airport fees will likely result in competition distortions between full service carriers (that normally serve the primary hub airports) and low cost carriers (that normally serve underutilized secondary airports). It would also tend to distort competition between U.S. carriers (that have the right to fly to secondary airports) and international carriers (whose ability to us,e secondary airports is often more limited.

In short, the proposals do not address the issue at hand - which is reducing congestion - and will lead to overcharging and discrimination of airlines. We suggest that alternative methods are applied, such as investments in enhanced technology, infrastructure and procedures at congested airports and airspace and secondly by full implementation of the lATA Worldwide Scheduling Guidelines, which is a proven and worldwide accepted method of congestion management.

By: Kees van Dooren

April 2, 2008

Comments of Korean Air

Korean Air is very concerned that DOT'S proposed amendments to the "Policy Regarding Airport Rates and Charges" will be negatively impacted to the commercial aviation community if the proposed amendments are implemented without more detailed discussion and thorough consideration.

We believe tliat DOT's three primary proposals - Landing fee increase during peak hours, Pre-flnancing of airport investment. Cross subsidization - cannot be right solution to congestion problem and should be reexamined promptly. We feel that the best way to address airport congestion is to concentrate on expanding and improving infrastiructure with air traffic control modernization not introducing "high cost & low effect" charging scheme known as cogestion pricing.

By: C.K. Park

April 3, 2008

Comments of The National Business Travel Association | Word

In summary, NBTA strenuously opposes the proposal to allow airports to impose new costs on air carriers which will be passed along to the traveling public and business travelers in particular.  The increased costs and likely reduction in flight options for business travelers would be a dual blow to NBTA members who are already suffering under an antiquated aviation system that the proposed rule cannot and will not solve.  Moreover, NBTA does not believe that the proposal would actually alleviate congestion in the particular airports and regions that are the most affected by current traffic woes.

By: Shane Downey

April 2, 2008

Comments of Ottawa International Airport Authority

We are particularly concerned that the proposed policy contravenes the US/Canada Bilateral Air Transport Agreement, specifically Article 9. In that, the proposed fees will discriminate against operators of small aircraft. All flights operated from the Ottawa International Airport to the United States use regional aircraft, i.e. smaller aircraft. Currently, there are 32 daily departures from Ottawa to the United States. Smaller markets such as Ottawa risk loosing their Canada/US air service as the proposed fixed charge does not constitute "Equitable Treatment" under Article 9 and does in fact discriminate against smaller aircraft operations.

The Canada/US bilateral explicitly ensures access to both New York LaGuardia and Washington Reagan airports for Canadian carriers. This proposal may well end up limiting access to these congested airports.

By: Paul Benoit

April 3, 2008

Comments of Philippine Airlines

Philippine Airlines supports the comments submitted by the International Air Transport Association with respect to the DOT Proposal. In addition, we would respectfully recommend that the US DOT consider providing incentives to airlines to operate during off-peak periods rather than increasing the rates for peak hour operations. We believe that an incentive scheme may be more effective in influencing airline scheduling practices.

We likewise believe that airports exist to serve the transportation requirements of communities, hence user airlines should not be required to finance the infrastructure. However, if user airlines are required to finance such facilities, then the said user airlines should be entitled to just compensation for such financing.

By: Jaime Bautista

April 3, 2008

Comments of the Regional Airline Association - Bookmarked | Corrected Comments - Bookmarked

No passenger or community should be denied access to the national air transportation system because of the government's failure to modernize and expand the Air Traffic Control System. By putting forth the three congestion pricing proposals, the Department is essentially giving up on a comprehensive, long-term solution in favor of a short-term fix aimed at curbing demand. Rather than focus its attention on such short-term fixes, which not only limit demand but reduce consumer choices and airline competition, the Department should be focusing on solutions that will have a positive effect on the U.S. economy and competition.

The critical question is how can America's ATC system expand in a way that keeps pace with passenger demand? Blaming one aviation industry sector takes the focus off of that critical question, and congestion pricing fails to address it. Instead the Department must take other steps, including taking advantage of modern technologies such as GPS. Moving from land-based to satellite-based technology is critically important and will not happen overnight; however, fast-tracking programs such as RNAV would allow planes to move more efficiently.

FAA's NYINJ/PHL Airspace Redesign will create more efficient arrival and departure routes and improve use of available runways. The agency itself predicts that, "Benefits, in the form of reduced delays, are estimated to reach 20 percent by the year 2011 compared to the amount of delays the air traffic system would have without such changes."

By: RAA, Roger Cohen, cohen@raa.org

April 2, 2008

Comments of Vancouver Airport Authority

We are writing in support of Air Canada Jazz's request to have the proposed congestion rate and policy at U.S. airports withdrawn. If this proposal is approved it could be seriously detrimental to the carrier's transborder operations at YVR and at other Canadian airports. In particular this could jeopardize the viability of regional services connecting smaller markets.

We sincerely urge the U.S. Department of Transportation to reconsider the new congestion rate and policy change proposal. We deem that the amendments will be especially detrimental to regional-sized aircraft, which have been a key driver to our transborder passenger growth in recent years. If the growth of regional-sized aircraft to U.S. airports is constrained this will ultimately inhibit cross border travel, trade linkages, and prove detrimental to the economic fortunes of both U.S. and Canadian communities.

By: Larry Berg

April 3, 2008

Comments of the Aircraft Owners and Pilots Association

AOPA is opposed to the DOT proposal for "congestion pricing." The proposal does nothing to improve the national air transportation system and could have an adverse effect on general aviation's access to airports. Thc possibility that this policy could expand to reliever airports and other general aviation facilities that are part of an air camer airport system implementing congestion pricing is alanning. While we recognize that current airport ratcs and charges guidelines pennit airports to establish different landing fees during various times of the day, general aviation, the airlines and even some airport operators have opposed expanding this principle to a congestion pricing scheme. Instead the Department should work with the aviation community to quickly add capacity and improve system perfomlance as an appropriate response to congestion.

By: Andrew Cebula, 301-695-2000

April 3, 2008

Comments of the American Association of Airport Executives

AAAE generally supports efforts to reduce Federal restrictions on airport pricing flexibility. However, AAAE has a number of concerns about the specifics of the Department’s proposal. We are concerned that the proposed amendments will have limited impact on service patterns at existing airports, and that the impact might be felt disproportionately on routes-serving small communities and on new entry decisions by carriers. The Department needs to protect small community service and new entry. In addition, it should consider additional changes that would allow airports to increase the financial incentives for carriers to change the way they use their airports during periods of congestion.

By: AAAE, Todd Hauptli

April 3, 2008

Comments of British Airways

The Notice does not address the fundamental issue of congestion and the creation of capacity. Cross subsidy and pre financing do not encourage new capacity creation.

BA remains strongly opposed to congestion pricing by either the U.S. Government or local airport authorities. Congestion pricing will not reduce congestion. It will only drive up prices for airlines and their customers.

BA is particularly concerned that DOT/FAA appears to be pursuing auction procedures for new capacity at JFK and EWR. Auction procedures and other congestion pricing experiments have never been demonstrated to effectively address congestion.

At the very least, DOT/FAA should request appropriate Congressional authorization before implementing the fundamental policy change that would be reflected by adoption of any auction or congestion pricing procedures.

By: Simon Cox

April 3, 2008

Comments of the Cargo Airline Association

The Cargo Airline Association recognizes the need to address the issues of congestion and delay in the short term and believes that the NPRM at least form the basis for further discussion of these problems. However, the proposals to permit airports to include the costs of unfinished airport projects in the airport's rate base, and the proposal to transfer costs from secondary to primary airports, cannot be justified and must be rejected out of hand. In addition, the definition of "congested airport" is overly broad and must be rewritten to provide a realistic basis for determining precisely where the proposed rules would be applicable.

By: CAA, Stephen Alterman, 202-293-1030

April 3, 2008

Comments of the City of Chicago

Where it is possible, capacity enhancement should be the primary tool used to mitigate delay and meet forecast demand. To reduce delays and meet forecast demand at O'Hare, the City is implementing the O'Hare Modernization Program. The OMP is a program that mitigates existing delays and proactively provides the capacity necessary to meet forecast demand.

Additional runway capacity would better serve the traveling public allowing for more frequent and competitive air service. This is particularly important to airports like O'Hare that serve as access points to the national aviation system for many small and medium sized communities.

In the absence of necessary capacity, airpolis need to have the ability to set rates appropriate to their unique circumstances with sufficient flexibility to generate funding for projects that would enhance airport capacity. As long as the rates and charges set by an airport are reasonable and not unjustly discriminatory, the airport should have broad flexibility to set its rates.

However, having the ability to charge differential prices should not be viewed as a mandatory obligation. In fact, rates should be set based on the specific needs of the airport. For the most part, an airport financial model is designed to hold the cost-perenplaned passenger within a competitive range of its peers. An obligation to increase rates could signiticantly disturb a well-crafted competitive market position for the airport. Airports are best suited to determine if, when, and what kind of additional rates should be implemented.

The City is pleased that the USDOT has proposed to clarify and enhance the ability of airports to use landing fees to implement capacity projects. This action would provide economic incentives to the carriers to better utilize the airport during times of congestion.

By: City of Chicago Department of Aviation, Nuria Fernandez, 773-686-8060

April 3, 2008

Comments of City of Des Moines

While this NPRM raises issues of concern to all airports, particularly “congested airports” as defined in the NPRM, it also fails to address the possible degradation of airline service for smaller communities resulting from the implementation of the provisions within the proposed rule. Airports that serve small communities typically have a limited number of air service options, and the majority of service opportunities frequently are to “congested airports” which are critical for providing access to worldwide destinations and business hubs.

Optimally, airline schedules are generally designed to allow domestic business travelers to complete their travel and business to major east coast and central destinations, if necessary, in one day which is an important ingredient in community economic development. Small community air service development is difficult to sustain and may not be feasible if there are requirements for higher fees or larger aircraft on existing or future routes. The NPRM does not allow the creation of local exemptions for small communities.

By: Aviation Director, Craig Smith

April 3, 2008

Comments of City of Philadelphia

We understand that PHL would be classified as a congested airport under the definition in the proposed amendment by virtue of PHL being included in the FAA’s report Capacity Needs in the National Airspace System 2007-2025 (FACT2) as an airport needing additional capacity by 2015. However, the City is concerned that PHL would not necessarily be defined as congested in the future and so would not be able to take advantage of the provisions of the proposed amendment. Also, as written, the definition in the proposed amendment could apparently give rise to a counterproductive situation in which the City imposes an airline charge permitted by the proposed amendment, achieves a reduction in delays as a result of the charge (or as a result of making other airfield improvements), finds itself no longer congested under the definition, and is then required to rescind the charge.

The proposed amendment is silent on the question of whether the proposals would supersede the provisions of any extant use or lease agreements between an airport operator and the airlines serving the airport. The City’s Airline-Airport Use Agreement runs through June 2011. Other airports have longer-term agreements. The City suggests that the proposed amendments be enacted so as to allow the FAA’s airport rates and charges policy to supersede the provisions of airport-airline agreements.

By: Rina Cutler

April 3, 2008

Comments of Edmonton Airports

Edmonton Airports believes short-term tactical pricing initiatives or aircraft restrictions will only serve to weaken established services, threaten future growth and potentially have a negative impact In the communities in which these services operate.

Any legislative changes that weaken the viability of these regional services between our two countries should be considered with great caution. The economic and social value of these services, both direct and indirect, to communities across Canada and the U.S. is tremendous. Our collective efforts need to be focused on keeping operating costs low and Transborder skies open.

By: Reg Milley

April 3, 2008

Comments of Emirates

Emirates is concerned about the international precedent that the Department would establish by allowing U.S. airport operators to impose what could effectively be a form of congestion pricing. Such a move could prompt foreign governments to implement responsive or retaliatory airport charging measures, potentially including charges based on congestion pricing. Emirates respectfully urges the Department not to deviate from established ICAO policy and principles by allowing for any form of congestion pricing.

Emirates joins lATA and others in requesting that the Department withdraw the Proposal and instead rely on the lATA Worldwide Scheduling Guidelines to manage congestion at key U.S. gateway airports. If the Department wishes to revise its established policy on airport rates and charges, it should first ensure that any changes are consistent with ICAO policy and U.S. obligations under bilateral and multilateral air transport agreements.

Counsel: Wilmer Hale, David Heffernan, 202-663-6360, david.heffernan@wilmerhale.com

April 3, 2008

Comments of Japan Airlines International

Foreign carriers have a great disadvantage in avoiding “congested hours” in the U.S., as the arrival and departure time “SLOT ALLOCATION” of their own respective countries must be considered along with providing a convenient schedule for the traveling public.

Increasing rates for carriers operating within the “congested hours” should be assessed to the carriers with the heaviest traffic during the designated hours.

The pre-collection of fees appropriated for airport development of future plan as a facility fee is unacceptable and an unfair practice as mentioned by IATA. As there are no guarantees that all the carriers operating would benefit from the pre-collection and may create an environment where carriers ceases operation into the facility.

The practice of collecting additional fees to support “Secondary” airports from the “Primary” airports is unacceptable as its future affects has not been clearly defined.

By: JAL

April 3, 2008

Comments of Los Angeles World Airports

LAWA respectfully suggests that the DOT should not limit its consideration to congestion problems that are tied to airfield capacity and rate-setting responses that are implemented only through restructured methods of calculating landing fees. At some airports, such as LAX, congestion is not just rooted in the inadequacy of airfield capacity, and the introduction of innovative methods of recovering both airfield and non-airfield aeronautical costs may be warranted.

The specific rate-setting tools that are described by the DOT in its NPRM are interesting and will be useful for many airport proprietors, including LAWA, to have in their toolboxes. But they are not the full set of tools that LAWA may choose to use at LAX. The introduction of a two-part landing fee designed to induce up-gauging of aircraft would not be expected to provide much immediate benefit at LAX because the current mix of gate types at the airport is not well-suited to a systematic increase in average aircraft size. While the ability to engage in forward-financing of airfield projects would benefit LAX, LAWA would also benefit from the ability to forward-finance non-airfield projects that before long will increase the effective capacity of the airfield at LAX. LAWA could benefit from enhanced ability to recover at LAX the costs of secondary airports it owns or operates, notably LA/ONT, and applauds the DOT's proposal to make its rule on the recovery of airport system costs more flexible.

By: LAWA, Gina Marie Lindsey, 310-646-6250, gmlindsey@lawa.org

April 3, 2008

Comments of the National Business Aviation Association

Peak period pricing at airports is a bad idea with no positive consequences and the limitless possibility of unintended negative consequences. The assumptions the proposal is based on are without support, including the assumption that, at least as proposed, it would be lawful. NBAA urges the FAA and the Department to put this idea aside and to focus on the continuing challenge of expanding infrastructure.

By: Ed Bolen

April 3, 2008

Comments or Orange County, California

What is not immediately clear is whether the Department would conclude that airfieldrelated fees (i.e., landing fees) that incorporate the cost of airfield facilities under construction, which are neither intended to nor capable of reducing airport congestion (e.g., runway overlay; taxiway improvements) are fair and reasonable. That is, we seek clarification as to whether the inclusion of construction-related costs is stricdy limited to those airfield improvements that directly reduce congestion, or whether die costs of other, more generally beneficial improvements may be included, as well.

The County believes that even those airfield improvements that would not directly alleviate congestion should be permitted, particularly as the line between "congestion alleviating" and "non-congestion alleviating" airfield improvements may not always be distinct. In addition, and in order to remedy the ambiguity discussed in the above paragraph, the County recommends that the proposed Policy be revised to more expressly address whether the Department intends this proposed Policy, which expressly is premised upon and contemplates congestion reduction, to recognize the benefit conferred by those improvements not directly aimed at congestion reduction, but rather providing safer and more efficient facilities for ongoing airport operations.

Counsel: Gatzke Dillon & Ballance, Lori Ballance

April 3, 2008

Comments of the Phoenix-Mesa Gateway Airport

Phoenix Mesa urges the Department to revise its definition of “secondary airport” to extend to commercial service airports within a metropolitan area in which one or more airports are considered “congested.”  (Alternatively, FAA’s Flight Plan could begin to track the Phoenix metropolitan area.)  Phoenix-Mesa would support any similar revision that would give airport sponsors within a regional area to devise and implement regional solutions to address congestion and delays.   As revised, the Department’s policy should allow Phoenix Sky Harbor to include in its rate base a portion of the costs to develop the airfield at Phoenix-Mesa to accommodate its projected increase in commercial service.

Counsel: Patton Boggs, Gregory Walden, 202-457-6135, gwalden@pattonboggs.com

April 3, 2008

Comments of the Port Authority of New York and New Jersey

Although The Port Authority of New York and New Jersey supports the FAA’s efforts to provide more flexibility in the calculation of fees and charges for use of airport facilities, it is crucial that any modifications to the current policy be clearly defined. Without such clarity on how the policy can be implemented, the proposed policy would not be a speedy fix by next, but would be a recipe for years of litigation between the airports and the airlines.

Congestion pricing will not necessarily solve the problem of airport delays at the nation’s most congested airports. First, as is the case for JFK, LaGuardia and Newark Liberty, many of the nations’ busiest airports experience congestion throughout most of the day. Second, given that airport costs are a comparably small portion of the cost structure of the airline, the effects of congestion pricing might be substantially reduced, if not eliminated by much larger economic factors such as fuel costs.

Clearly, flight delays plague the nation’s aviation system. As many in the industry have observed, what is needed is technological and other improvements to increase capacity at our nations’ airports, rather than methods of redistributing the current resources.

By: PANYNJ, Cheryl Yetka, 212-435-4275, cyetka@panynj.gov

April 2, 2008

Comments of the Province of Nova Scotia

Please be advised that the Province of Nova Scotia is very concerned about this initiative. We urge you to consider withdrawing this proposal, and focus instead on expanding capacity and improving the air traffic control system to address the congestion issue.

Although it is not our normal practice to comment upon such matters in another jurisdiction, we feel compelled to let you know that the implementation of such a proposal would have serious implications for the continued operation of many regional air services between our two countries. In practical terms, we believe it is likely air access between the United States and Canada, including Nova Scotia, would suffer resulting in negative implications for tourism and trade in many communities on both sides of the border.

By: Transportation and Infrastructure Renewal Minister, Murray Scott

Comments of Air Canada - Bookmarked

Air Canada urges the FAA to re-evaluate the need at this time for a wholesale change to the policies concerning fee-setting at U.S. airports. The existing rates and charges policy incorporates many long-standing principles that protect against unfair, unreasonable, and unjustly discriminatory fees. Other alternatives that are less discriminatory than the proposed amendments exist (e.g., the flight limitation orders in place or proposed for LaGuardia, JFK, and Newark Airports, which together cause up to one-third of all delays across the country), and Air Canada would like to see the FAA focus on implementing those measures in the New York-area before disturbing well-settled rate-setting practices at airports in other regions.

Counsel: Holland & Knight, Anita Mosner, 202-419-2604, anita.mosner@hklaw.com

April 3, 2008

Comments of the Air Transport Association of America - Bookmarked

DOT’s objective is to foist upon airport users a form of congestion pricing which DOT has no authority to impose directly. Moreover, DOT has not established through this proposal or any other guidance how airports can impose such pricing under current law. ATA does not believe that congestion pricing, even if fully implemented, could be effective in addressing airport congestion and delay, due to unique aspects of the industry including the complexity of airline business decisions and the lack of direct relationship between airport fees and consumer preferences regarding air travel. However, to the extent that the proposed amendments would result in airport fees that are intended to influence airline and passenger behavior, the proposal as a whole is unlawful and poor public policy.

The intended effect of any of these pricing strategies (particularly if used in combination at a single airport) is to price certain types of carriers offering certain kinds of air service out of the airport by making it cost-prohibitive to continue operating, or at least putting them at a competitive disadvantage vis-à-vis other carriers. The fact that DOT’s goal of influencing airline business decisions might not be possible to achieve given the other statutory prohibitions and requirements on airport rate-setting does not in any way make the intention less objectionable or render the proposal valid.

For this reason, as well as all of the other flaws in the proposal described in the foregoing comments, the proposal should be withdrawn.

Counsel: ATA, David Berg, 202-626-4000, dberg@airlines.org

April 3, 2008

Comments of the Airports Council International - North America - Bookmarked

While the DOT can encourage airport proprietors to negotiate, the DOT cannot require them to do so. The DOT should explicitly reaffirm in its final rule that in the absence of an airline agreement, airport proprietors have a unilateral right to impose reasonable, non-discriminatory rates by ordinance, statute, resolution or regulations, and that airport proprietors have no obligation to make rate-setting agreements with the airlines.

These problems have nationwide consequences, but varied and particularized local roots, as a few examples illustrate: At JFK, there was a surge in demand when the High Density Rule was phased out; when this was coupled with a shift toward increasing domestic service, altering the pattern of arrivals and departures and reducing operational efficiency, JFK became a severely congested airport. At ORD – which is in the midst of a massive modernization program – problems of delay have been ascribed to overscheduling by both hub and non-hub carriers. At SFO, the delay problem has its roots in a unique combination of the airport’s runway configuration, local patterns and airline scheduling practices. At LAX, the problem is not limited to the capacity of its runways; instead, the configuration of the airfield, the capacity of passenger terminals, the number and mix of gates and other non-airfield constraints contribute to congestion and delay.

These differences in local circumstances have powerful implications. There is no “one size fits all” solution. Because of the idiosyncratic, varying nature of airport delay and congestion problems, it is particularly important that the proprietors of congested airports have the flexibility to set rates or adopt other demand management programs that are custom-fit to specific local circumstances.

Counsel: Anderson & Kreiger, Scott Lewis, 617-621-6560, slewis@andersonkreiger.com

April 3, 2008

Comments of FedEx Express

FedEx is a member ofthe Cargo Airline Association which represents the interests ofthe U.S. all-cargo air carrier industry. The CAA has filed comments to the Public Docket concerning the NPRM, and those comments are fully supported and adopted by FedEx. FedEx does not intend to reiterate the specific comments filed by the CAA, but concurs with the CAA's general arguments that the definition of a "congested airport" is ill-defined; that the NPRM does not appropriately limit airport authority to impose both weight-based and operational charges at non-congested airports; that the NPRM should not allow airports to impose charges on airport facilities and projects not yet completed; and that the NPRM provisions pertaining to the use of under-utilized secondary airports will be very difficult to implement for all-cargo air carriers, particularly express carriers.

Counsel: FedEx, Mark Hansen, 901-434-8583

March 30, 2008

Comments of Kent State University College of Technology

The implementation of a two-part landing fee structure, consisting of an operation charge and
a weight-based charge, would have a negative impact on GA pilots who operate non-revenue
flights whose costs are direct out-of-pocket expenses of most GA operators on training flights.
This amendment is intended to serve as an incentive for air carriers to use larger gauge aircraft
and increase the number of passengers served with the same or fewer operations; while this may be possible for some of the larger, more established air carriers it would harm smaller aircraft. When air carriers are charged higher landing fees and the flights are still not full, the air carriers could pass along the increased cost to the passengers through increased ticket prices.

By: Dr. I. Richmond Nettey and Lannie Megan Marsh, 330-672-9476, inettey@kent.edu

April 3, 2008

Comments of the Massachusetts Port Authority

The current Proposal appears to proscribe an airport proprietor from importing any costs of the reliever airport into the rate base of the congested airport, except during times of congestion. That disregards the distinct possibility that it may be the very availability of the proprietor's second (or third, as in some cases) airport that is permitting the first to operate without congestion. Overall systemic efficiency is enhanced if some of the cost of the secondary reliever airport is borne by the benefited one, particularly if the reliever airport operates at a deficit. The proposed policy appears not to properly recognize the potential of a financially interdependent proprietor-owned multi-airport system to affect congestion. By restricting what may be imported into the primary airport's rate base to only the reliever airport's airfield costs, the ability to use such an airport system for congestion relief is diminished. We recommend that any such limitation be eliminated from the final policy. In addition, the inability of an airport system proprietor to import any cost of the operation of the reliever airport into the rate base of the primary airport until unacceptable peak period delay or congestion occurs, may effectively prevent the proactive planning decisions and financial commitments by the airport system proprietor that would prevent or mitigate congestion from developing at the primary airport. That ought not to be the Policy's legacy. We suggest that the Department reconsider that limitation in favor of an approach that would encourage and enable, at least from a financial standpoint, the implementation of prophylactic measures designed to forestall or minimize congestion and delay within its system.

Counsel: Ropes & Gray, Richard Lettien, 617-951-7000

April 3, 2008

Comments of the National Air Carrier Association

Despite the best intentions of the Department to work to expand capacity at our nation’s airports, we believe that a congestion pricing scheme does not, in the long run, adequately address expanding capacity. Rather, this scheme seeks to apportion a commodity for the highest price, without regard to the effect on air service and consumer choice. The real focus of the government and industry’s attention should be to providing a long-term solution for increasing the capacity of the NAS. We renew our commitment to the Department to work towards a long-term reauthorization legislation that will provide the necessary resources to increase capacity throughout the NAS.

By: NACA, Thomas Zoeller, 703-358-8060

April 2, 2008

Comments of South African Airways

SAA cannot readily shift flights to other time slots or to another airport. For example, SAA must, as a matter of law, operate to and from only those U.S. airports that have federal inspection facilities and Customs personnel. As a result, SAA expects that the landing fees it pays would increase with no corresponding increase in airfield facilities or services. Moreover, the higher landing fees SAA would be forced to pay would act as a subsidy to other airlines (most likely domestic airlines that operate many, many more flights) that can more readily shift operations to secondary airports. To require SAA to pay fees at one airport that go to support another airport that the airline will never be able to use (and that would provide, at best, minimal secondary benefits) would be beyond the pale. As is the case with the other elements of the proposal, higher fees that are not related to higher costs are unreasonable. Moreover, such fees would be unjustly discriminatory in their impact on SAA.

Accordingly, SAA would urge that the Notice be withdrawn, and that the FAA promptly consider other less discriminatory means of alleviating air service congestion.

Counsel: Holland & Knight, Anita Mosner, 202-419-2604, anita.mosner@hklaw.com

April 3, 2008

Comments of United Air Lines - Bookmarked

United believes that unilateral imposition of landing fees that reflect the proposed amendments would be questionable as a matter of law and policy. Rather than solving true congestion-related problems of delay, raising landing fees on the basis of the proposed amendments would disrupt established patterns of service and impose new costs (and higher fares) on current airline users (and their passengers) at a broad array of airports that DOT - without any real analysis - has arbitrarily defined as "congested." The proposal should therefore be withdrawn. All three of the points covered by the proposed amendments can, of course, be reflected in landing fees by agreement of the parties - without raising any legal or policy concerns. Consistent with the Rates and Charges Policy's goal of encouraging meaningful negotiations between airport proprietors and airport users, that is the approach DOT should take - leaving it to the affected parties to incorporate these points into landing fee charges where they determine that it is in their mutual interests to do so.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com

April 3, 2008

Comments of US Airways - Bookmarked

The Department's proposal to address the serious problem of congestion through major revision of its longstanding rates and charges policy raises a series of important and unanswered questions. Aside from the lack of justification for the pronounced policy shift, the proposal reflects little understanding of the complex realities of network airline operations and the potential impact of proposed congestion‑related fees on carriers and passengers. Furthermore, there is no basis to believe that the congestion‑related fees that form the core of the proposal can actually be effective. Given the myriad deficiencies of the proposal, and for the reasons stated elsewhere in these comments and those of the Air Transport Association, US Airways respectfully urges the Department to reconsider and revise or withdraw its Proposal Regarding Airport Rates and Charges.

Counsel: US Airways, Howard Kass

April 3, 2008

Comments of Virgin Atlantic Airways

Virgin Atlantic is extremely concerned with all three elements of the ‘Proposed Amendment to Policy Statement’ as published on the 17th January 2008. Virgin Atlantic does not believe that such proposals adhere to existing and agreed ICAO policies. For Virgin Atlantic, such amendments represent an ill-considered, unjustified attempt to circumvent existing policies to encourage airports to use market mechanisms to manage airport congestion.

In addition, we do not believe that evidence has been presented to prove that implementation of such pricing policies will effectively control congestion in comparison to enhanced technology, infrastructure and procedures at congested airports and in congested airspace.

For Virgin Atlantic, pursuing federally sanctioned auctions of new capacity whilst concurrently proposing amendments which alleviate the required restrictions on monopoly-based charges represents, little more than an uncoordinated and unsuccessful attempt to address the growing issue of airport congestion will be achieved, whilst airport users and their passengers will be required to pay the costs.

By: VA, Nigel Milton, The Office, Manor Royal, Crawley, West Sussex, UK, RH10 9NU

Signed July 8, 2008 | On File at Federal Register July 10, 2008

Notice of Amendment to Policy Statement - Bookmarked

Notice of Amendment to Policy Statement - Public Inspection Copy (Does Not Have Attachments)

This action amends the Department of Transportation "Policy Regarding the Establishment of Airport Rates and Charges" published in the Federal Register on June 21, 1996. This action adopts three amendments to the 1996 Rates and Charges Policy (two modifications and one clarification). These amendments are intended to provide greater flexibility to operators of congested airports to use landing fees to provide incentives to air carriers to use the airport at less congested times or to use alternate airports to meet regional air service needs.

After review of the public comments, the Office of the Secretary of Transportation and the FAA have determined that the proposed amendments to the 1996 Rates and Charges Policy should be adopted, with revisions to address concerns and suggestions raised in the comments. The amendments do not alter one of the fundamental principles of the 1996 Rates and Charges Policy: that reasonable airfield fees must be based on the capital and operating costs of the facilities for which the fees are assessed. None of the amendments will permit an airport to generate revenues in excess of the allowable costs of providing airfield facilities and services at the congested airport and its related airport system, as defined in accordance with the 1996 Rates and Charges Policy.

The effect of each of these modifications is to allow the airport operator to increase the cost of landing at a congested airport during periods of congestion, even if congestion lasts through much of the day. By raising the costs of using the congested facilities at peak times, the airport operator would provide an incentive for current or potential aircraft operators to (1) adjust schedules to operate at less congested times (if they exist); (2) use less congested secondary or reliever airports to meet regional air service needs; or (3) use the congested airport more efficiently by up-gauging aircraft. The three amendments are not intended to be mutually exclusive. In other words, if the circumstances justify doing so, an airport proprietor might use a combination of two, or even all three, charges in setting landing fees during periods of congestion. Any charges imposed on international operations, whether using this proposed flexibility or not, would also have to comply with the international obligations of the United States, including requirements that the charges be just, reasonable, and equitably apportioned among categories of users.

By: Mary Peters

Order 1997-3-26 - Miami International Airport Rates Proceeding
Air Canada v. DOT - DC Circuit Court 1998 (Erratum to Order)
Order 2007-6-8 - Alaska Airlines et al v. Los Angeles World Airports
Order 1995-9-24 - Los Angeles International Airport Rates Proceeding
City of Los Angeles v. DOT - DC Circuit Court 1999
Order 2005-6-11 - Brendan Airways et al v. Port Authority of NY & NJ
Port Authority of NY & NJ v. DOT - DC Circuit Court 2007