High Density Slots - Petition of Air Carrier Association to Block Transfer

Order 05-02-01
OST-04-18586 - Petition of Air Carrier Association to Block Transfer

Issued and Served February 1, 2005

Order

The first two of ACAA’s requests are properly before the FAA. That agency has the authority and primary responsibility under 49 U.S.C. §40103(b) to ensure the efficient use of the navigable airspace and to assign its use by rule or order. The HDR was promulgated in 1969 under this authority. The Buy/Sell Rule is part of Subpart S of 14 CFR Part 93, which is the regulatory scheme governing the allocation of IFR operations at HDR airports such as DCA and LGA. The FAA and the Office of the Secretary will give the same careful, thorough consideration to the competitive issues ACAA raises here that they gave to competitive issues when considering whether to allow slots to be bought, sold, and leased, as documented in the regulatory history of the Buy/Sell Rule. See 50 FR 52180 at 52182- 52186 (December 20, 1985).

As for ACAA’s third and fourth requests, we must decline to grant them. The petition, read as a whole, primarily challenges the Buy/Sell Rule and only tangentially invokes 49 U.S.C. 41712, the Department’s authority to investigate and prohibit unfair or deceptive practices and unfair methods of competition. The Buy/Sell Rule allows carriers that hold slots to sell or lease them without first informing the government, the public, or all air carriers of their intent to dispose of the slots and without making the details of sale or lease agreements public. As noted, the FAA and OST adopted this rule after giving due consideration to all competitive issues raised, and it is the FAA, again in conjunction with OST, that will now be considering whether the rule should be amended along the lines ACAA proposes. The pleadings here do not provide sufficient grounds for the Enforcement Office to institute an investigation into whether slot-holding carriers at DCA and LGA have been engaging in unfair methods of competition within the meaning of 49 U.S.C. 41712. Moreover, even if we were to institute such an investigation, we would not have the authority to suspend slot transactions pending its completion. Section 41712 empowers the Department to order carriers to stop offensive practices only after finding the practices to be violations, which in turn it can only do after providing the carriers with notice and an opportunity for a hearing.

For all of these reasons, we dismiss ACAA’s petition insofar as it asks the Department to investigate whether slot-holding carriers at DCA have been engaging in unfair methods of competition within the meaning of 49 U.S.C. 41712 and to suspend slot trades while this investigation is in process. We take no action on the remainder of ACAA’s petition, as it is properly before the FAA.

By: Samuel Podberesky

FAA-2001-9854 - Manage LGA Operations after Rule's Expiration
OST-2002-13650 - Petition of ACAA to Block Transfer of Slots at DCA