Operating Limitations at Newark Liberty International Airport

FAA-2008-0221

On File at Federal Register March 12, 2008

Notice of Proposed Order Limiting Scheduled Operations and Request for Comments

As Published in the Federal Register - March 18, 2008

The Federal Aviation Administration has tentatively determined that it is necessary to place a temporary limitation on scheduled flight operations at Newark Liberty International Airport. The FAA is issuing this proposal as a result of persistent congestion and delays at EWR during the peak operating hours, as well as a dramatic projected increase in flight delays at the airport during the summer of 2008 if proposed schedules were implemented as requested by carriers. We intend this proposed limitation on scheduled operations to relieve the substantial inconvenience to the traveling public caused by excessive congestion-related flight delays at the airport, which magnify as they spread through the National Airspace System. Among other things, this proposal will ensure that projected delays do not increase significantly and provide for a more efficient use of the nation's airspace. The final Order would take effect at 6:00 a.m., Eastern Time, on June 1, 2008, and would expire at 11:59 p.m., Eastern Time, on October 24, 2009.

This proposed limitation on scheduled operations is necessary to prevent an increase in scheduled flights during peak hours. Flights in certain hours in summer 2007 were in excess of the airport's capacity, and scheduling is a factor in the high level of delays historically experienced at the airport. The proposed limits would apply to all U.S. and foreign air carriers' scheduled operations, excluding helicopters, from 6:00 a.m., Eastern Time, through 10:59 p.m., Eastern Time. A final Order would be enforceable under the FAA's civil penalty authority. In a separate docket, the FAA intends to propose limits on unscheduled flights at EWR during the same hours, as well as a system to allocate the reservations for the available unscheduled operations. The FAA anticipates that the total number of operations at EWR will be limited to an average of 83 per hour.

By: Robert Sturgell

March 26, 2008

Comments of the New Jersey Coalition Against Aircarft Noise

We believe that capping operations as a means to reduce delays would mitigate the need to implement the new low altitude departure and arrival patterns over residential communities that the FAA is in the process of implementing with its Airspace Redesign plan that are the cause of great public concern.

By: NJCAAN, Jerome Feder

March 27, 2008

Comments of Air Canada

Under the proposed terms of the Order, each carrier must forward a list of all Operating
Authorizations held and report the dates within each applicable season on which the carrier
intends to start and to cease scheduled operations. FAA will use this information to calculate
each carrier's usage of its allocated Operating Authorizations. For each day of the week that
the FAA has approved an operating schedule, any Operating Authorization not used at least
80% of the time over the period authorized by the FAA will be withdrawn for the next
applicable season.

The Notice does not address how the FAA would handle cancellations due to Ground
Delay Programs, which are common at EWR and the other New York-area airports. Air Canada
recommends that the FAA amend the Proposed Order to treat flights that are cancelled on the
day-of-flight due to Ground Delay Programs as a completed operation for purposes of
calculating a carrier's usage of its allocated Operating Authorizations. An Operating
Authorization should not be subject to the use-or-lose provision when a carrier cancels a flight
to assist Air Traffic Control and reduce congestion. To facilitate this recommendation, carriers
could note in their interim and season-end reports that an Operating Authorization as
"scheduled by cancelled due to GDP."

Air Canada urges the FAA to amend its Order to consider the needs of carriers that have
worked cooperatively with the FAA in managing and responding to delays at EWR. Accordingly,
the FAA must ensure that carriers that trim their EWR schedules at the FAA's request are not
penalized for such cooperation under the "use it or lose it" provisions of the new rules.

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

March 31, 2008

Re: The Legislature of Rockland County (Minority) Support for Flight Caps

April 1, 2008

Comments of Air Transport Association

As the FAA is well aware from ATA’s submissions and comments during the New York Aviation Rulemaking Committee, our considered view is that the FAA does not have the statutory authority to mandate OA auctions, congestion pricing or any other socalled “market mechanism” to allocate airport access. The FAA now proposes to auction OAs and relies on the very statutory provision, 49 U.S.C. § 40103(b)(1), it previously stated does not provide the necessary authority. FAA’s revised view of its authority - that its responsibility to ensure the efficient use of the national airspace authorizes it to auction airport access - is plainly wrong and misses the point. Impositions such as the auctions proposed by the Order that are intended to discourage an activity are, in fact, “in the nature of taxes.”

Even assuming that FAA has authority to auction access to Newark, a proposition we do not accept, additional rulemaking is required to implement such a scheme. An auction mechanism does not exist and cannot be employed without the FAA first going through a notice-and-comment rulemaking proceeding. The discussion of lease auctions is found only in the Order’s preamble, and it fails to address issues such as who would receive the auction proceeds and how those proceeds would be used. The FAA appears to recognize this deficiency by stating it will “provide additional information about leasing procedures and the relevant statutory authorities before conducting any auction.” 73 Fed. Reg. 14555. Thus, in addition to the fundamental absence of authority to impose lease auctions, the Order’s effectiveness concerning auctions is dubious.

Due to the controversial and unsubstantiated nature of an auction methodology, there is a clear danger of delay and capacity being withheld from carriers prepared to use returned or new capacity while auctions are being considered. Again, the WSG procedures provide an immediate workable solution that would allow FAA to reallocate capacity. Also, FAA has not provided stakeholders with the process due under the Administrative Procedure Act to implement an auction mechanism, and many important questions remain unanswered. We urge the FAA to abandon this proposal. We also urge the FAA to adopt the changes to the Order that we recommend in Section II of these comments, and to conform the FAA’s orders with respect to operating limitations at JFK and LaGuardia so that, to the extent practicable, procedures and terms are uniform across the three New York area airports.

By: David Berg

April 1, 2008

Comments of American Airlines

American does not support incomplete and ineffective piecemeal solutions to the overall problem of airport congestion in the New York City area, and congested airspace throughout the country. Rather, American supports a long-term solution including adoption of the Worldwide Scheduling Guidelines at New York area airports and any other region with chronic delay problems. This process has been proven to work around the world, and its adoption at Newark would be far easier for airlines to administer than an entirely new regulatory scheme (such as auctions or congestion pricing) that is untried and unnecessary.

Operational caps are needed at Newark because of the existing limits at LaGuardia and JFK. Given the delays experienced at all three airports, anything less than comprehensive limits would give carriers an incentive to shift flights to another already congested New York airport. This would do nothing to reduce delays. In order to be effective, the schedule restrictions ordered in this docket should be linked to those ordered for New York generally (including Islip, Stewart and Teterboro as needed).

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

April 1, 2008

Re: Assembly of The State of New York - Eilen Jaffe

April 1, 2008

Rockland County Residents in Support of Newark Cap - Form Letters

April 1, 2008

Comments of Kalitta Air

Unlike scheduled passenger service, where both passengers and the airlines are best served when flights depart on time and on schedule, regularity does not equate to efficiency or superior customer service for Kalitta's EWR military mail operations. Currently, Kalitta operates a flight scheduled for 7:00 p.m. on a daily basis, and a second flight, scheduled for 3:00 p.m. (all times local), approximately three times per week. In order to transport the greatest amount of mail in a timely and efficient manner, these scheduled flights do not always operate on time. Moreover, under the current practice at EWR, Kalitta is able to add flights when needed, and at times that allow it to carry all available mail, thus maximizing usage of its aircraft. Under the proposed order, Kalitta would lose this flexibility.

Although Kalitta can predict that it will operate at least one flight a day from EWR, and may be able to operate that flight within a 30-minute allowed Operating Authorization window, the carrier cannot predict how frequently it will need to operate a second (or further) daily flight, or at what time sufficient mail will have been tendered to Kalitta to make such a flight necessary, or feasible. Thus, even if Kalitta were to receive GAs for a second daily flight, the carrier very well may not be in a position to operate such flights more than 80% of the time. Under the proposed order's "use it or lose it" provisions, Kalitta would therefore be stripped of the opportunity to conduct such flights when necessary. This problem would be heightened during the high-volume holiday season, when the carrier temporarily needs to operate multiple daily flights.

Counsel: Sher & Blackwell, Mark Atwood, 202-463-2513

April 1, 2008

Comments of the Legislature of Rockland County - Majority

We are writing to support the proposed Newark Airport Flight Caps and the imposition of Operating Limitations at Newark Liberty International Airport in Newark, New Jersey scheduled to take effect on June 1, 2008. We believe that such flight caps will both improve operational safety, convenience and efficiency at Newark Airport and also benefit the health, welfare and safety of the surrounding communities which are under the flight paths and are serviced by Newark Airport, including the residents of Rockland County.

In addition, we are of the strongly held view that implementation of the proposed caps should override the need for the proposed NY/NJ/PHL FAA Airspace Redesign Plan which has been proposed and which would send hundreds of flights headed for Newark Airport over Rockland County each day. As you know, the Rockland County Legislature is already on record as being strongly opposed to such Redesign Plan as it will adversely and negatively impact many Rockland County residents due to extreme noise and safety concerns. Rockland County is currently engaged in litigation opposing the implementation of such Redesign Plan and, given the congestion in the air corridor serviced by Newark Airport and the other New York airports, it is clear that imposing flight caps is a more sensible approach to managing the congestion of the affected air space than the proposed Redesign Plan.

By: Legislature

April 1, 2008

Comments of Porter Airlines - Bookmarked

Porter is a new entrant to the U.S. market, having commenced scheduled operations from Toronto to Newark on March 31, 2008. Porter operates seven daily roundtrips to Newark on a schedule that was approved during the Summer 2008 IATA Schedules Conference. As a new entrant, it is critically important that Porter be permitted to continue operating its existing previously approved schedule (see Exhibit A) upon which Porter has relied in its decision to commence its Newark service. Porter exclusively operates brand new state of the art Bombardier Q400 turboprop aircraft – an advanced turboprop aircraft uniquely situated to perform most operations on runway 11/29 – not, as seems to have been contemplated in the FAA’s Order, Newark’s longer parallel runways. The effect of the Order on Porter’s schedule is that its most important weekday and Sunday departure and arrival have been eliminated, and other flights have been moved too late in the evening to operate within the limits of the Toronto City Centre Airport’s curfew, resulting in the unintended reduction of Porter’s round-trip flights from seven to five. This proposed reduction would eliminate all Porter departures from Newark after 16:00. The FAA’s Final Order should be amended to include the previously approved and currently operated 17:30 arrival and 18:30 departure as well as to readjust the 21:00 arrival back to 20:00 and the 21:30 departure back to 20:30 to ensure Porter can continue operating these flights within the confines of the mandatory Toronto City Centre Airport curfew.

The proposed changes to Porter’s previously approved schedule in the draft Order will undermine the viability of its operations at a critical stage in its development and result in a schedule that is not economically viable. In addition, the FAA must recognize its obligation under the U.S. – Canada Open Skies Agreement to provide Porter with a fair and equal opportunity to participate and compete in the trans-border air transportation marketplace.

Counsel: Zuckert Scoutt, John Gillick, 202-973-7939, jegillick@zsrlaw.com

April 1, 2008

Comments of Virgin America - Bookmarked

Virgin America believes the Proposed Order should be modified because it (i) failed to follow proper administrative procedure, established during the very recent and comparable JFK scheduling reduction efforts; (ii) effectively shuts out new domestic entrants at Newark, while erecting a formidable new barrier to entry; and (iii) enhances the market power of Continental, the dominant legacy carrier at Newark. Continental now maintains a 72% market share at Newark; over one-half of all domestic non-stop routes at Newark are already total or near monopolistic routes.

If the FAA instead finalizes the Proposed Order, the result will be direct and predictable: consumers will pay a heavy price, as fares out of Newark—now among the highest in the country—will increase to the highest in the country. Virgin America believes this anti-competitive result flies in the face of the pro-consumer goals of this Administration. Consumers should not have to suffer from the unintended consequences of governmental congestion management, nor should legacy carriers be permitted to extract monopoly rents from already suffering consumers, as the direct result of their own over-scheduling, frozen by flight caps. Flight caps are the bluntest form of congestion management, and should not be used at single carrier, hub dominated airports to further harm and thwart competition.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-663-8000, kquinn@pillsburylaw.com

April 3, 2008

Comments of The Air Carrier Association of America

It is essential that we create a first rate system that makes flying easier and reduces congestion. At the same time, we must continue the dream of deregulation. All action taken must ensure that competition is not blocked. A proposal to address delays and congestion by closing Newark Airport and auctioning off any new capacity would close the door on competition and impede the growth of small carriers. Special care must be taken to ensure that this does not happen. Our dream is to create a high tech, safe, "delay free" and secure system that maximizes consumer choices and ensures that low fares are available to all.

Public interest will not be served if a few carriers are allowed to increase their stranglehold over all New York/New Jersey airports while their competitors are blocked from entering the airport. Moreover, there is no public interest in letting the nation's largest carriers decide which competitor may enter this closed market and thus prevent other carriers from adding service to markets the largest carriers dominate.

Counsel: ACAA, Edward Faberman

April 16, 2008

Comments of the Air Transport Assocation of Canada

We believe that the restriction of operations at Newark Liberty International Airport is a violation of the Open Skies Bilateral Air Agreement between Canada and the United States of America. The Treaty, signed March 12, 2007, calls for "fair and equal" opportunity to compete. The restriction (and the related slot auction, which we will comment on later) constitute a barrier to Canadian operations into Newark. Canadian air traffic to that airport is generally conducted by regional aircraft and the size of the aircraft will make participating in the costs of a slot auction prohibitive.

The root cause of the congestion faced at Newark stems from the lack of investment in new infrastructure required by consumers. Both airport and Air Navigation Services have been underfunded by the various agencies which manage the airport and ANS respectively. We would point out that "off airport" expenditures made by the Port Authority is contributing to this deficiency in capital.

By: Sam Barone, 613-233-7727

May 1, 2008

Supplemental Comments of Porter Airlines

On April 1, 2008, Porter Airlines submitted comments on the Proposed Order Limiting Scheduled Operations at Newark Liberty International Airport issued by the Federal Aviation Administration on March 12, 2007, in the above referenced proceeding. In its comments, Porter pointed out the serious adverse impact on the traveling public that would result if the allocation of Operating Authorizations proposed for Porter in that Order were finalized, and requested that Porter be allocated a revised set of Operating Authorizations in the Final Order that would permit Porter to continue to provide the full complement of service it began in the Newark-Toronto market on March 31, 2008. Since the filing of those comments, there have been several significant developments related to the use of Newark Operating Authorizations, and Porter respectfully submits these supplemental comments to discuss these developments and their implications for carriers such as Porter.

Porter very much appreciates the FAA’s efforts to address the continuing problem of the constrained airspace in and around Newark Liberty International Airport, and the opportunity to provide these and its prior comments on the Proposed Order. These new developments which have occurred over the past few weeks provide the FAA with a unique opportunity to address the impact of the Proposed Order on Porter’s ongoing operations. Porter respectfully urges the FAA to take the steps discussed more fully herein to assure that Porter can continue to provide its high-quality, low-cost, low-fare, competitive service in the Newark-Toronto market and thereby serve the important pro-competitive goals of the U.S.-Canada Open Skies Agreement.

Counsel: Zuckert Scoutt, John Gillick, 202-973-7939

May 5, 2008

Additional Comments of Porter Airlines - Bookmarked

In essence, the Proposed Order, if finalized, would force Porter, but not its competitors, to cancel four of its fourteen daily flights in the Newark-Toronto market, constituting 29 percent of its total service and four of the six flights for which there is the greatest demand by the traveling public. The FAA can eliminate this serious adverse impact on the traveling public and Porter in the Final Order by (1) allocating to Porter the Operating Authorizations proposed to be given to Eos Airlines, Inc. (a carrier which ceased all operations on April 27, 2008) and (2) revising Porter's current proposed allocation of a 21:00 arrival and 21:30 departure to a 20:00 or 20:30 arrival and a 21:00 departure.

Counsel: Zuckert Scoutt, John Gillick, 202-973-7939, jegillick@zsrlaw.com