Friday, January 9, 2015

FAA proposes new rules for slots at New York-area airports

FAA is proposing new rules for three New York-area airports that would increase slot utilization at the slot-constrained facilities and create a more transparent mechanism for transferring slots.
A Notice of Proposed Rulemaking (NPRM), published Jan. 8, proposes new rules to allocate and increase existing-slot utilization at New York JFK, Newark Liberty (EWR) and New York LaGuardia (LGA) airports. The agency is inviting comments from stakeholders on the slot utilization and secondary-market proposals.

The new rules would do away with holiday exemptions and require carriers to operate a slot 80% of the time in the previous scheduling season. Currently, the 80% use-or-lose threshold is waived for holidays. The NPRM also limits carriers’ abilities to shift flights to slots at other times in the day to meet the 80% threshold.

The last point would provide carriers with incentive to shed under-used slots by potentially providing financial recompense for the slots rather than FAA simply seizing them. To this end, the agency has proposed five potential secondary markets.

The first proposal would allow airlines to trade slots at one of the three airports for slots at another foreign or domestic slot-constrained airport. In the second scenario, FAA would create a “bulletin board,” on which airlines would post the terms of slot sales or trades. The third scenario would allow carriers to negotiate privately before posting the terms of a proposed slot trade or sale to the bulletin board.

The fourth and fifth proposals create a more robust market. In the fourth, carriers would post the terms of their intended slot transfer or sales to the bulletin board and interested airlines would then post bids and counterbids.

The fifth proposal is similar, but it would require the seller and bidders to be anonymous and thus would necessitate all-cash transactions to preserve this anonymity.

The NPRM also would maintain the hourly flight caps at JFK and EWR at 81 flights, and 71 flights per hour at LGA. The rules would, however, impose daily flight caps of 1,205 at EWR and JFK and 1,136 at LGA. Currently, no formal daily flight cap exists at any of the three airports.

Although FAA acknowledges that airspace reform and the Next-Gen air traffic management modernization project could increase potential flight operations and reduce delays, the agency said neither of these programs will yield short-term benefits. The NPRM seeks to reform the slot allocations rather than taking “repeated and piecemeal approaches,” FAA said.

Airlines potentially affected by the NPRM are reviewing it. “The New York/New Jersey region is a key market for United and our customers,” a spokesman for United Airlines, which operates 73% of the flights at EWR, said. “We are reviewing the proposal and look forward to a final rule that serves the best interests of our customers.”

Delta Air Lines, American Airlines and JetBlue Airways declined to comment on the rule beyond saying they are reviewing it. Delta operates 31% of flights at JFK and 45% of flights at LGA, according to FAA data. American operates 17% of flights at JFK and 29% of flights at LGA, while JetBlue operates 26% of flights at JFK, FAA data show.

(Madhu Unnikrishnan - ATWOnline News)

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