BEFORE THE FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C.

Transcription

1 BEFORE THE FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C In the Matter of : : PROPOSED RULEMAKING FOR CONGESTION : MANAGEMENT AT JOHN F. KENNEDY : FAA INTERNATIONAL AND NEWARK : LIBERTY INTERNATIONAL AIRPORTS : : 14 C.F.R. Part 93 : COMMENTS OF AMERICAN AIRLINES, INC. Communications with respect to this document should be addressed to: HENRY C. JOYNER WILLIAM K. RIS, JR. Senior Vice President - Senior Vice President Planning Government Affairs American Airlines, Inc. American Airlines, Inc. P.O. Box , MD th Street, N.W. DFW Airport, Texas Suite 600 Washington, D.C WALTER J. AUE Vice President - CARL B. NELSON, JR. Capacity Planning Associate General Counsel American Airlines, Inc. American Airlines, Inc. P.O. Box , MD th Street, N.W. DFW Airport, Texas Suite 600 Washington, D.C RANDY J. ESSELL (202) Managing Director - carl.nelson@aa.com Capacity Planning American Airlines, Inc. R. BRUCE WARK P.O. Box , MD 5544 Associate General Counsel DFW Airport, Texas JEFFREY A. OGAR (817) Senior Attorney randy.essell@aa.com American Airlines, Inc. P.O. Box , MD 5675 DFW Airport, Texas (817) jeff.ogar@aa.com July 21, 2008

2 BEFORE THE FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C In the Matter of : : PROPOSED RULEMAKING FOR CONGESTION : MANAGEMENT AT JOHN F. KENNEDY : FAA INTERNATIONAL AND NEWARK : LIBERTY INTERNATIONAL AIRPORTS : : 14 C.F.R. Part 93 : COMMENTS OF AMERICAN AIRLINES, INC. American Airlines, Inc. files these comments in opposition to the Notice of Proposed Rulemaking ( JFK/EWR NPRM ) in the above-captioned docket (73 Fed. Reg ). American remains committed to working with the FAA to implement meaningful reforms of air traffic management, and hopes that the FAA will work with the industry in achieving this critically important goal. The FAA should be focused on: (a) determining the level of operations at which New York airports can function without chronic delays and congestion; and (b) taking steps to increase capacity at all three major New York airports LaGuardia, JFK and Newark. Untried and unlawful auction schemes would accomplish neither, and would serve only to distract the FAA and stakeholders from important work that needs to be done. Accordingly, the FAA should withdraw the JFK/EWR NPRM and focus on managing congestion not competition.

3 -2- INTRODUCTION American was extremely disappointed by the FAA s decision to expand its plan to confiscate and auction slots at LaGuardia to JFK and Newark. Given the resounding criticism that the LGA NPRM received from all sides airlines, the Port Authority and consumers it was obvious that the LGA NPRM needed a complete overhaul in order to address the concerns that had been raised. American continues to strongly oppose unnecessary and unlawful auction schemes that would do nothing to help manage or reduce congestion. American s comments make three major points. First, the JFK/EWR NPRM violates federal law. The FAA is explicitly forbidden from implementing slot auctions without specific Congressional authorization (a fact the FAA admitted in the LGA NPRM), while the JFK/EWR NPRM itself violates the Administrative Procedure Act ( APA ) and Executive Order Second, the JFK/EWR NPRM focuses on a nonexistent problem with competition in the New York region rather than the actual problem of congestion and delays. Finally, a single slot regulation for LaGuardia, JFK and Newark should be implemented with caps on operations that bring delays and cancellations down to a manageable level, while utilizing the non-controversial Worldwide Scheduling Guidelines to allocate capacity as do slot controlled airports in the rest of the world.

4 -3- I. THE JFK/EWR NPRM VIOLATES SUBSTANTIVE AND PROCEDURAL FEDERAL LAW A. Congress Has Expressly Forbidden The FAA From Implementing Slot Auctions A Fact Admitted In The LGA NPRM 1. The FAA Has No Authority To Implement Slot Auctions In the LGA NPRM, the FAA admitted that legislation would be necessary before market-based approaches such as auctions or congestion pricing could be implemented (71 Fed. Reg ). This is because Congress has not given the FAA the statutory authority to assess market-clearing charges for a landing or departure authorization (Id.). To the contrary, Congress has expressly forbidden slot auctions by conditioning annual FAA funding on the agency s compliance with a prohibition on new aviation user fees not specifically authorized by law (73 Fed. Reg ). This provision dates back to 1998, and was specifically intended to prevent the FAA from charging for the use of navigable airspace. Slot auctions which would require airlines to pay a new user fee clearly fall within the scope of this Congressional directive. While the JFK/EWR NPRM ignores this issue altogether, the FAA conceded in the LGA SNPRM that it continues to believe that it cannot rely on a market-based allocation method under a purely regulatory approach (73 Fed. Reg ). In fact, under any approach regulatory or otherwise - the FAA would have to point to a statute specifically authorizing a slot auction (Id.). This is why the FAA stated that it would seek Congressional approval for auctions or congestion pricing before fully implementing the LGA NPRM (71 Fed Reg 51362). The same policy should have been applied to the JFK/EWR NPRM (as well as the LGA SNPRM).

5 -4-2. Congress Has Not Specifically Authorize[d] Slot Auctions Despite the FAA s commitment in its initial LGA NPRM to obtain Congressional authority to conduct slot auctions before trying to implement them, no such legislation has been enacted. In fact, key Members of Congress have been vocal critics: Senator Charles Schumer: DOT plans to auction off take off and landing time slots at New York City s three area airports. This will in NO WAY reduce congestion in New York s airspace. Instead, this plan could limit consumer choices and have a dire impact on service to small communities. And I will act quickly to prevent this plan from being implemented.... [T]his is an ideological, untested experiment from those in an Ivory Tower. There is no proof that DOT s auctions plan will do anything to reduce congestion, yet DOT insists that this market-based solution is the only effective proposal. The DOT s misguided plan to sell take-off and landing slots to the highest bidder won t make your plane take off faster, it will just cost New Yorkers more to fly and throw LaGuardia, JFK and Newark into chaos.... It is time to put an end to this scheme once and for all. (Statement, Subcommittee on Aviation, 6/18/08) Congressman James Oberstar: I have several serious concerns with the Department s slot auction proposal.... FAA needs to explain what statutory authority it has for assessing this type of charge.... [A]uctions could increase the monetary cost to travelers in the New York-metro area, with no guarantee of delay reduction and a potential loss of flights and service options. (Statement, Subcommittee on Aviation, 6/18/08) Congressman Jerry Costello: Auctioning slots is a bad deal for consumers. During these tough financial times for our carriers, consumers are being asked to pay more for less. Any additional costs to access these markets more than likely would be passed on to consumers, resulting in higher fares and absolutely no guarantee of congestion and delay reductions. Further, service to small communities has already been affected by carriers pulling down capacity because of increased fuel prices. Should auctioning be allowed, carriers could potentially limit service to small communities in favor of access to more lucrative markets (Statement, Subcommittee on Aviation, 6/18/08)

6 -5- Despite the fact that Congressional approval is required before the FAA could conduct slot auctions (and such approval has not been forthcoming), the JFK/EWR NPRM nonetheless tries to move forward with the forced confiscation and reallocation of slots. This is an obvious attempt to usurp Congressional authority. The FAA should only proceed with a slot regulation that complies with existing law. 3. The JFK/EWR NPRM Would Circumvent Congressional Authority By Shoehorning Slot Auctions Into Statutes Not Specifically Intended To Authorize Such A Scheme Rather than waiting for Congressional approval to conduct slot auctions (as the LGA NPRM clearly admitted is necessary), the JFK/EWR NPRM claims that the FAA can use its transaction authority to allow for reallocation of slots via a market-based mechanism (73 Fed. Reg ). Yet this transaction authority is nothing more than a transparent attempt to graft the FAA s authority to regulate the use of airspace onto laws intended for entirely different purposes. 1 Congress certainly did not intend for these administrative statutes to be used to circumvent an express prohibition on new user fees that has been in place for the past decade. None of the statutes cited in the JFK/EWR NPRM contain the specific authorization required before the FAA can conduct slot auctions. 1 Moreover, the U.S. Supreme Court has consistently rejected similarly creative attempts by government agencies to avoid Congressional limits on their power. See Cleveland v. United States, 531 U.S. 12, 15 (2000) (holding that while licenses may be property in the recipient s hand, they are not in the hands of the official licensor ); see also United States v. Schwartz, 924 F.2d 410, 417 (2d Cir. 1991) (holding that the mere issuance of a document designed to formalize the government s regulation does not thereby create a property interest for the government ).

7 -6- a. 49 U.S.C. 106 The JFK/EWR NPRM claims that under 49 U.S.C. 106(l)(6) and 106(n), the FAA has authority to lease real and personal property, including intangible property, to others (73 Fed. Reg ). This statute deals with Personnel and Services not slot auctions and is found in the chapter of Title 49 concerning the FAA s internal organization. This is hardly the sort of specific authorization that Congress has required in its annual appropriations bills as an express condition for any new user fees. For example, 49 U.S.C. 106(l)(6) allows the FAA Administrator to enter into and perform such contracts, leases, cooperative agreements, 2 or other transactions as may be necessary to carry out the functions of the Administrator and the Administration. Other topics in this subjection include hiring officers, employees and consultants, transportation, per diem expenses and the use of personnel from other agencies and volunteers (49 U.S.C. 106(l)(1)-(5)). Given the context of this subsection personnel and services the statute is clearly intended to permit leasing items such as office equipment or automobiles not slots. 2 The JFK/EWR NPRM cites to the Federal Grants and Cooperative Agreements Act (73 Fed. Reg ), which by its own terms is limited to transferring assets to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease or barter) property or services for the direct benefit or use of the United States Government (31 U.S.C. 6305). American fails to see how its commercial air transport services can be construed as a public purpose of support or stimulation authorized by a law of the United States.

8 -7- Likewise, 49 U.S.C. 106(n) says nothing about slots or auctions. Rather, it allows the FAA Administrator: to acquire... air traffic control facilities and equipment... research and testing sites and facilities... such other real and personal property (including office space and patents)... eating facilities and other necessary facilities for the welfare of employees of the Administration at the installations of the Administration, and to acquire, operate, and maintain equipment for these facilities. Again, this refers to acquisitions of property used for internal FAA administration. The FAA cannot claim that a statute allowing it to acquire eating facilities for its employees also authorizes the confiscation and reallocation of slots by auction. b. 49 U.S.C The FAA s general procurement authority is contained in 49 U.S.C Subsection (a)(2) provides that the FAA may dispose of an interest in property for adequate compensation. This does not provide for slot auctions and certainly does not justify the JFK/EWR NPRM. The FAA s Acquisition Management System is clearly intended to apply to transactions involving property such as land and the appurtenant airspace, housing units and public buildings (49 U.S.C (a)(1), (b), (c)(3)). Like 49 U.S.C. 106, this statute cannot be read to facilitate slot leases and auctions that Congress has specifically prohibited.

9 -8-4. The Proposed Leases Would Violate Federal Law Even if the JFK/EWR NPRM s interpretation of 49 U.S.C. 106 and were correct, the proposed slot leases are defective. Both leases have the stated purpose of allocat[ing] airport capacity, yet fail to explain how the FAA has a right to lease a property interest held by the Port Authority. 3 Assuming that the JFK/EWR NPRM s proposed leases would convey the right to use navigable airspace, Congress has explicitly prohibited new aviation user fees not specifically authorized by law (73 Fed. Reg ). 4 Thus, any lease of the right to use the navigable airspace would have to be made without consideration. Yet such a lease is expressly forbidden by 49 U.S.C (a)(2), which requires adequate compensation. Either way, the proposed leases would violate federal law. 3 The FAA has the power to regulate access to navigable airspace not to allocate airport capacity (New England Legal Foundation v. Mass. Port Authority, 883 F.2d 157, 172 (1st Cir. 1989) (noting that local governments not the FAA have the authority to set and collect landing fees). In fact, the JFK/EWR NPRM bases its creation of slots on this power to regulate navigable airspace not airport capacity (73 Fed. Reg , citing 49 U.S.C ). 4 In contrast, Congress specifically authorized the Federal Communications Commission to auction the public airwaves (47 U.S.C. 309(j)). This demonstrates that where Congress intends to authorize auctions, it has done so clearly and explicitly.

10 -9- B. The JFK/EWR NPRM Violates Both The Administrative Procedure Act And Executive Order The JFK/EWR NPRM Fails To Provide Adequate Notice Under The Administrative Procedure Act The Administrative Procedure Act ( APA ) requires an agency rulemaking notice to include either the terms or substance of the proposed rule or a description of the subject and issues involved (5 U.S.C. 553(b)(3)). This is necessary in order for interested parties to have an adequate opportunity to participate in the rulemaking process (5 U.S.C. 553(c)). The JFK/EWR NPRM must provide enough detail to fairly apprise interested persons of the issues raised by the proposed rule (United Steelworkers v. Marshall, 647 F.2d 1189, 1221 (D.C. Cir. 1980)). Yet the JFK/EWR NPRM is woefully incomplete; for example, it fails to provide complete details about the proposed leases or the proposed auction process both of which are core elements of the proposed rule. American fails to comprehend why the FAA is in such a rush to finalize the rule proposed in the JFK/EWR NPRM. It is far more important for the FAA to get this important rulemaking done right than done fast. Operations at JFK and Newark are already subject to FAA limits. The JFK/EWR NPRM would not increase capacity or reduce operations JFK or Newark, and thus would do nothing to reduce delays and congestion that has not already been accomplished by the interim orders. Since the JFK/EWR NPRM is focused entirely on regulating competition through governmental confiscation and reallocation of slots, American sees no basis for conducting a hasty rulemaking based on an incomplete record.

11 The JFK/EWR NPRM Violates Executive Order Because The Independent Regulatory Evaluation Is Fundamentally Flawed Executive Order requires federal agencies to assess all costs of available regulatory alternatives and to propose and adopt a regulation only upon a reasoned determination that the benefits of the regulation justify its costs (58 Fed. Reg ). This assessment - contained in the FAA s Independent Regulatory Evaluation ( IRE ) is both inaccurate and inadequate. On the benefit side, the IRE assumes a baseline of no slot regulation at JFK or Newark (IRE, p. 23). Yet the two FAA orders currently limiting JFK and Newark operations should plainly be viewed as the baseline. The JFK/EWR NPRM cannot legitimately take credit for benefits already gained from the existing operational limits at JFK and Newark. The proposed rule would have no impact on delays or congestion when measured against the proper baseline. On the cost side, the IRE provides no estimate of the amount airlines would be forced to pay in order to provide service at JFK or Newark (including the price of slots and the cost of cancelling service for slots that have been confiscated). Furthermore, by confiscating all JFK and Newark slots from carriers after ten years, the JFK/EWR NPRM would have an immediate chilling effect on long-term investment in routes and facilities. These costs which would inevitably be passed on to consumers must be taken into account. Even the cost of conducting the auctions is entirely speculative, as the JFK/EWR NPRM provides no details about the auction process, and the FAA has not even selected a vendor to design the process.

12 -11- II. DELAYS NOT A LACK OF NEW ENTRY PLAGUE COMMERCIAL AVIATION IN NEW YORK AND GOVERNMENT ATTEMPTS TO MANAGE COMPETITION ARE BAD PUBLIC POLICY INCONSISTENT WITH A DEREGULATED INDUSTRY To read the JFK/EWR NPRM, it appears that the FAA s greatest concern about commercial aviation in the New York region is the amount of competition not congestion. This is puzzling, as New York is one of the most competitive aviation markets in the world. Despite this undeniable fact (Comments of American Airlines, FAA , 12/22/06, pp. 6-13), the JFK/EWR NPRM is focused entirely on confiscating capacity from incumbents and reallocating it in an auction process that is anything but market-based. At the same time, the JFK/EWR NPRM proposes nothing that would actually contribute to solving the problem that the FAA needs to address longer and more frequent delays and cancellations that impact almost every trip to or through the New York region. A. Delays And Congestion In New York Are At All Time Highs, While Competition Has Never Been More Robust 1. New York Is One Of The Most Competitive Aviation Markets In The World New York consumers can choose among a wide range of carriers serving the region s three major airports. LaGuardia is served by a dozen carriers, including three comprehensive and competing networks operated by US Airways, American and Delta. Few airports in the world boast such a high level of domestic competition. Adding to this vibrant marketplace are hubs operated by Continental at Newark and by both Delta and JetBlue at JFK. Low cost carriers have a strong presence as well, with AirTran, Frontier, JetBlue and Virgin America all serving the region. Internationally, more foreign flag carriers

13 -12- serve JFK and Newark than any other U.S. gateway. By any measure - concentration, load factors or average fares New York is extremely competitive and there is no reason for the FAA to conclude otherwise. 2. New York Consumers Suffer From Record Delays Caused By The Failure To Adequately Manage The Airspace While the JFK/EWR NPRM is wrongly focused on regulating competition, the New York City Comptroller s office has estimated that despite the outstanding air connections with the rest of the nation and the world enjoyed in the New York region, delays cost passengers over $200 million in lost productivity last year (Press Release, Soaring Flight Delays Diminish NYC s International And Domestic Competitiveness While Increasing Local Pollution, NYC Comptroller s Office, 12/2/07). Thus, despite enjoying the benefits of vigorous competition, consumers are suffering from a lack of efficiently managed airspace. There are only two ways to solve this problem increase capacity or cap operations at a level the FAA can handle without persistent delays. Unfortunately, the JFK/EWR NPRM would do neither. B. Maximum Reliance On Competitive Market Forces Will Be Achieved Through A Free Secondary Market Not Forced Divestiture The FAA has a clear mandate to place maximum reliance on competitive market forces and on actual and potential competition (49 U.S.C (a)(6)). The JFK/EWR NPRM interprets this as authorizing the FAA to take steps to ensure that there are, in fact, competitive market forces and actual and potential competition (73 Fed. Reg ). Further twisting the FAA s statutory mandate, the JFK/EWR NPRM claims that the FAA believes that it is well within the

14 -13- agency's authority in 49 U.S.C to provide some mechanism for slot reallocation (73 Fed. Reg ). Nothing could be further from a competitive market than an economic system in which the government systematically confiscates slots from some to be auctioned off to others. The FAA should foster a system in which an incumbent s investments in its network are respected not arbitrarily seized by the government and sold off to the highest bidder. Such a system existed under the High Density Rule, which allowed the buying, selling, leasing and securitization of slots. The FAA itself admitted that there is a secondary market at each [of the five slot controlled] airports, permitting air carriers to lease the operating rights to another carrier for a period of time.... This option would continue to promote competition... (Letter from Kerry Long to American Airlines, 7/3/08, emphasis added). Unfortunately, the FAA s constant handout of slots to new entrants under AIR-21 greatly hampered the secondary market s effectiveness, as there was no reason to buy what the government would give away for free. The same perverse incentives would exist under the JFK/EWR NPRM an airline seeking slots has no reason to negotiate a fair deal with an incumbent if the FAA would confiscate that asset and force its sale.

15 -14- III. THE FAA SHOULD IMPLEMENT A WORKABLE SLOT REGULATION RATHER THAN INVITE CERTAIN LITIGATION OVER AN UNTESTED, UNLAWFUL AND UNNECESSARY AUCTION SCHEME A. The Best Way To Reduce Delays Is For The FAA To Set A Manageable Number Of Operations Per Hour At New York Airports And Then Work Toward Increasing Capacity While the JFK/EWR NPRM is focused entirely on managing competition through government regulation, the FAA should instead set a manageable cap on operations and work toward increasing capacity at all three major New York airports. For example, while operations at LaGuardia have remained relatively constant since 2004, delays and cancellations have soared (as set forth below): Dependability At LaGuardia Is Falling Even With No Increase In Total Operations Statistic Operations (x1,000) Delayed Departures 18% 22% 25% 29% Avg. Departure Delay 58 min. 60 min. 59 min. 61 min. Delayed Arrivals 27% 33% 36% 42% Avg. Arrival Delay 57 min. 58 min. 58 min. 59 min. Cancellations 3.4% 4.0% 3.7% 5.2% 2008* (vs. 2004) (3.9% lower) 28% (55.6% worse) 62 min. (6.9% worse) 42% (55.6% worse) 60 min. (5.3% worse) 5.2% (52.9% worse) * 12 months ended April 2008 Source:

16 -15- Despite a slight decline in the number of operations at LaGuardia since 2004, every measure of dependability has gotten worse. This should be no surprise prior to April 2000, LaGuardia was capped at 62 hourly operations 80% of the current cap. The increase to its current level of 75 operations per hour made LaGuardia the least dependable airport in the country. In fact of the 35 major Operational Evolution Partnership ( OEP ) airports in the United States, only four are scheduled with arrivals scheduled above 85% of maximum capacity LaGuardia, Newark, JFK and O Hare. There is a direct correlation between the scheduling levels and dependability: Schedules At 85+% Of Maximum Capacity Inevitably Lead To Delays Airport Schedule As % Of Maximum Capacity Rank (Worst) A+14 Rank (Worst) LGA 101.1% #1 58.5% #1 EWR 99.0% #2 59.5% #2 JFK 98.9% #3 62.8% #3 ORD 97.8% #4 65.9% #4 Source: Schedules: (Year 2007/Weekdays/ ) Arrivals: (Year 2007)

17 -16- The correlation between scheduled arrivals as a percentage of capacity and delays increases exponentially above 80%-85%, as shown below: Impact of Airport Capacity on Operational Dependability 100% OEP Airports, Year 2007 Airport A+14 (All DOT Domestic Arrivals) 90% 80% 70% 60% 50% EWR ORD JFK LGA 40% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% Scheduled Arrivals as % of Airport Arrival Capacity (Weekdays, ) This graph shows a clear trend as schedules exceed 80%-85% of an airport s maximum arrival capacity, dependability begins to plummet. This suggests that an airport s optimal capacity would be set at 80%-85% of the maximum. 5 Not only do delays become more frequent beyond this threshold, but each delay becomes longer inflicting more pain on consumers, flight crews and airlines: 5 This can be seen in the recent increase in ground delay programs at JFK after the FAA recently changed runway rules for arrivals and departures for safety reasons. If JFK were scheduled at its optimal not maximum capacity, the airport would not be thrown into operational chaos by changes in runway use.

18 Impact of Airport Capacity on Operational Dependability OEP Airports, Year EWR Average Arrival Delay (Minutes) PHL ATL ORD JFK LGA 5 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% Scheduled Arrivals as % of Airport Arrival Capacity (Weekdays, ) While JFK and Newark may be able to handle 81 operations per hour in ideal conditions, this limit significantly overstates both airports current optimal capacity. Thus, the FAA should revisit the issue of how many operations JFK and Newark can be accommodated safely and dependably and then set a cap at that level leaving flexibility to increase the cap as long overdue improvements are made in managing New York airspace. A lower cap of scheduled operations per hour (with similar adjustments for LaGuardia) would improve dependability in the region. Optimal caps should be set using the methodologies established by IATA slot coordinators, which have been successful in reducing delays in Europe and elsewhere. It is this approach not auctions that will help solve the problem of congestion and delays.

19 -18- B. The Worldwide Scheduling Guidelines Should Be Used To Allocate All Slots At JFK And Newark Consistent With The Practice At Slot Constrained Airports In Other Countries The JFK/EWR NPRM would utilize the Worldwide Scheduling Guidelines to reallocate new and returned capacity, but not slots that have been arbitrarily seized from incumbents (73 Fed. Reg ). Yet there is no good reason why the Worldwide Scheduling Guidelines should not be used in their entirety in lieu of the JFK/EWR NPRM. Such a solution would make far more sense than the untested, unnecessary and unlawful proposed rule. Even academic proponents of auctions admit that the European system works well. For example, Professor George Donohue states that [i]f you look at Europe, they run about the same level of operations and number of passengers as the United States, but they have about one-tenth of the delays and a much more predictable system (Can Anyone Fix The Air Traffic System?, MSNBC.com, 5/13/08). Professor Donohue places the blame for U.S. delays on the fact that [t]he United States is the only country in the industrialized world that doesn t have slot controls at its major airports (Id.).

20 -19- While Professor Donohue is right about the need for slots, he fails to make a case for slot auctions. 6 Slots at European airports are allocated through application of the Worldwide Scheduling Guidelines. 7 Such a system would work just as well in the United States and there has been absolutely no explanation for why this country should allocate slots in a manner so radically different than the long-established system that works well abroad. Turning U.S. airports into a laboratory for economics professors to experiment with untested theories at a time when the industry has never been more competitive and jet fuel never more expensive would be extremely poor public policy. CONCLUSION American is and will continue to be a strong supporter of the FAA s efforts to reduce delays and to manage congestion. However, American is concerned that the JFK/EWR NPRM represents a fundamental misunderstanding of the role of government in commercial aviation. Despite being touted as a market-based mechanism, the confiscation and auction proposal in the JFK/EWR NPRM is more akin to collectivization. 6 Professor Donohue also incorrectly ignores the existence of slot controls at five major U.S. airports LaGuardia, JFK, Newark, O Hare and Reagan. 7 The FAA s failure to apply the Worldwide Scheduling Guidelines would create unfair discrimination against U.S. flag carriers, as few if any foreign flag carriers could possibly approach the twenty slot baseline (73 Fed. Reg ). Since those carriers are regulated by the Worldwide Scheduling Guidelines in their home countries, U.S. flag carriers should be accorded comparable treatment by their own government.

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