Slot Changes Under AIR-21
Authors: Tom Zoeller, (703) 824-0504
The Wendell H. Ford Aviation and Investment Reform Act for the 21st Century (“AIR-21”) made substantial changes to the high-density rules at the nation’s four, high-density, slot controlled airports: Washington Reagan National, Chicago-O’Hare, and New York’s John F. Kennedy International and LaGuardia Airports.
Slot restrictions in at the two New York airports are eliminated January 1, 2007. In the interim, DOT is directed to provide exemptions to any airline flying to the two New York airports if it will use aircraft with 70 seats or less and will: 1) provide service to a small or non-hub that it did not previously serve, 2) provide additional flights to small or non-hub it already serves, or 3) provide service with a regional jet to a small or non-hub as a replacement for a prop plane. DOT is also directed to grant exemptions to new entrants and limited incumbents for service to New York.
Chicago O’Hare: Slot restrictions at O’Hare are eliminated after July 1, 2002. Under AIR-21, DOT is directed to provide exemptions for the same circumstances outlined at the New York airports. DOT is also directed to grant 30 exemptions to new entrants and limited incumbents for service to Chicago.
Washington Reagan National Airport: AIR-21 directed the DOT to grant 12 slot exemptions within the perimeter; 12 outside the perimeter, but no more than two additional flights per hour. Ten percent of entitlement funds at DCA must go to noise abatement. Initial exemptions, for service within the perimeter, were awarded to American Trans Air for service to Chicago Midway; two to Midway Airlines for service to Raleigh/Durham; two to Midwest Express Airlines for service to Des Moines; and four exemptions to Spirit Airlines -- two for service to either Melbourne, Fla., Fort Myers, West Palm Beach, Fort Lauderdale/Hollywood, or Myrtle Beach; and two for service only to Myrtle Beach or Melbourne.
On January 22, 2003, the DOT awarded slots at Reagan-Washington National Airport (DCA) to Corporate Airlines, Inc. and AirTran Airways. Corporate Airlines was awarded two slots for service to Wilmington, Jacksonville, or Fayetteville, North Carolina. AirTran was awarded four slots to provide non-stop service to Ft. Lauderdale, Fort Myers or West Palm Beach, Florida. These slots were awarded because the DOT had withdrawn the slot exemptions previously awarded to Midway Airlines and Spirit Airlines. The slot exemptions for Midway Airlines were withdrawn by the Department after finding that the terms of a regional jet agreement between Midway and US Airways would effectively transfer control of those slots to US Airways. Spirit Airlines’ slots were withdrawn when the airline failed to reinstate service to Washington within the required time following the terrorist attacks of September 11th.
New York-LaGuardia: While the elimination of slot restrictions was promoted as a deregulatory and pro-competitive measure, the cumulative effect of new flights at LaGuardia airport created a major capacity problem. Indeed, AIR-21 provided that new entrant carriers and airlines operating regional jets were able to add a potentially unlimited number of flights at LaGuardia, which now accounts for more than 20 percent of flight delays nationwide. Airlines added more than 200 daily flights as of November 1, 2000, and an additional 400 applications were pending at that point.
In response, the Port Authority of New York and New Jersey proposed a moratorium on new flights at LaGuardia during peak hours. The Federal Aviation Administration (“FAA”) claimed the Port Authority did not have the legal right to impose such a moratorium. As a result of discussions between the Port Authority and the FAA and the Department of Transportation, new slot restrictions were imposed to cap the number of new flights that were being added to LaGuardia.
The slot lottery (or “slottery”) was held on December 4, 2000. In June of 2001, the FAA released a NPRM to extend the existing "slottery" to October 26, 2001. It had been set to expire on September 15, 2001. Under the proposed extension, current slot allocations would be maintained with a new, "mini-slottery" that reallocates the approximately 20 slots that have been returned since December 2000.
In addition to the extension of the slottery, the FAA also outlined five proposed longer-term solutions to LaGuardia's ongoing capacity problem. Two are market-based initiatives offered by the Port Authority of New York/New Jersey, and the other three are administrative remedies suggested by the FAA. Additional information is included in the "Related Information and Links" section below.
As a result of the September 11, 2001, terrorist attacks, airport security was pushed to the forefront of the Congressional agenda. Issues such as the La Guardia slottery and capacity solutions, were temporarily set aside as Congress, the Administration, FAA and the industry continued to work to strengthen and improve airport security. Accordingly, on October 10, 2001, the FAA indefinitely suspended the closing date of the La Guardia NPRM. On March 22, 2002, however, as a result of a rise in traffic levels, FAA reopened the NPRM and established a new closing date for comments on capacity allocations at LaGuardia Airport.
AAAE responded to this notice on June 20, 2002. While we acknowledged in our comments that the unique character of LaGuardia may necessitate extraordinary measures, such as those proposed by the FAA (outlined below), we reemphasized that the only solution to aviation congestion and delays, that will not penalize overall economic growth, is to expand capacity at the nation’s busiest airports. We stated that demand management schemes should be considered a measure of last resort when adding capacity at an airport is not possible. In addition, we reaffirmed that if a market-based solution is employed, then AAAE strongly supports using some portion of the excess revenue for small community air service or essential air service programs.
For additional legislative developments, see the “Airport Capacity and Project Streamlining” Issue Brief. 
In the June 2001 notice, the Port Authority proposed either congestion-based fees or auctions be employed to alleviate congestion. Under the former, a premium fee of $300 - $2,000 would be assessed on top of existing fees. The latter converts slots to "reservations," approximately 83 percent of which are then allocated amongst existing carriers with the remaining 17percent auctioned off to the highest bidders. An illustration of this auction concept can be found here: http://airportnet.org/depts/regulatory/lgaauct.pdf
The FAA's administrative proposals include: (1) encouraging use of larger aircraft at LaGuardia; (2) streamlining the existing rule; or (3) reallocating slots under a replacement rule. All three options include provisions that would protect service to small communities. The FAA has a few options for favoring large aircraft. One would simply prioritize slot allocations based on the size of the aircraft using the slots. Another would eliminate use of commuter aircraft in air carrier slots under the existing High Density Rule (HDR)/AIR-21 framework. Alternatively, the commuter slot category could be eliminated altogether.
The FAA's second option is to streamline the existing rule by consolidating the high-density rule and AIR-21 exemptions to create two slot pools - one for air carriers and one for service to small communities. Under this proposal, new entrants would be accommodated via a lottery of a small percentage of slots withdrawn periodically from the air carrier pool.
The third option would reallocate slots under a replacement rule. Here again, the FAA would consolidate the high-density rule and AIR-21 slot exemptions. Approximately 95 to 98 percent of the current slot allocation would remain intact with the remaining 3 to 5 percent reallocated amongst new entrants and carriers serving small communities.
Related Information and Internet Links
Background Memo -- House Aviation Subcommittee Hearing on the LaGuardia Slot Lottery:
AAAE Hearing Report on House Aviation Subcommittee Hearing:
AAAE Regulatory Advisory on LaGuardia Slot Lottery:
Airport Capacity and Project Streamlining Issue Brief
FAA LaGuardia Letters
FAA Notice on LaGuardia Slot Lottery:
LaGuardia Slot Lottery Results and Carrier Codes:
Federal Register Notice:
 You can access AAAE’s comments at airportnet.org/depts/regulatory/new.htm. Also, for access to all comments filed on this issue, go to the DOT Dockets webpage at http://dms.dot.gov/search/searchFormSimple.cfm and put in the LGA docket number: 9854.