Applications and Petitions: None Answers and Replies: Policy Regarding Airport Rates and Charges - Comments of the AAAE, AOPA, British Airways, CAA, City of Chicago, City of Des Moines, City of Philadelphia, Edmonton Airports, Emirates, JAL, LAWA, NABA, Orange County, CA, PANYNJ, Phoenix-Mesa Gateway Airport and Province of Nova Scotia Orders and Notices: None Rules and Regulations: None Grant of Petitions: None

	Policy Regarding Airport Rates and Charges FAA-2008-0036 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 Index