DOT ISSUES NOTICE OF PROPOSED EXTENSION FOR MINIMUM SLOT USAGE REQUIREMENT WAIVER
January 5, 2021
On December 22, 2020, the FAA published a Notice in the Federal Register, available here, seeking comment on a proposed extension of its waiver of the slot usage requirements at slot controlled high density Level 3 airports (JFK, LGA, DCA) as well as designated IATA Level 2 airports in the United States (ORD, LAX, EWR, SFO).
By way of background, before an air carrier can operate scheduled service to a Level 3 slot controlled airport, it must first obtain specific time slots from the FAA for its schedule. Slot times are reissued with priority by the FAA each season (the FAA divides each year into a Summer and Winter season) to carriers that have operated them during the previous season. However, if a carrier does not use their slot times at a rate of at least 80%, the carrier will lose their right to use the slots in the future, and the FAA will not reissue the slots to the carrier the following season. Minimum slot usage requirements do not apply at Level 2 airports, and while voluntary, carriers are expected to seek and obtain schedule approval in the Level 2 process. Additionally, instead of submitting historic slot data like Level 3 airports, carriers submit a proposed schedule which is analyzed with all submissions for any potential delays.
Since the COVID-19 pandemic has dramatically disrupted the schedules of foreign and domestic carriers, the FAA created a path for carriers to seek a waiver of the usage requirements for their slot times at Level 3 airports Carriers are able to notify the FAA that due to issues related to the COVID-19 pandemic, they will not be able operate their slots, and the FAA will allow the carrier to maintain their right to the slot times for use in future seasons. In addition, at designated IATA Level 2 airports, the FAA determined that it would prioritize flights canceled due to COVID-19 for purposes of establishing a carrier’s operational baseline in the next corresponding season.
The initial waiver order was issued in March 2020 and lasted until May 31, 2020. It was then extended to October 24, 2020, and then further extended until March 27, 2021. The FAA is now considering extending the Order to October 30, 2021 and is seeking comments on whether to extend the waiver through the full duration of the Summer 2021 scheduling season, as well as on two separate proposals for the waiver structure.
The first option would be to maintain the status quo, through which a carrier may seek a waiver from the slot usage requirements simply by informing the FAA which slots it will not use due to COVID-19 related issues, subject to the following conditions: (1) Carriers must return the slots they do not intend to use to the FAA four weeks prior to start of the FAA approved operation; (2) The waiver does not apply to newly allocated slots; and (3) The waiver does not apply to slots that have been leased to another carrier.
The second option is a set of conditions proposed by the Worldwide Airport Slot Board (WASB) including (1) Carriers holding slots may return those they will not use to the FAA on or before February 8, 2021 (approximately 7 weeks before the start of the season) and will be able to retain them for future use. Similar to the current rules, newly allocated slots are not eligible for the waiver, nor are slots leased to another carrier; (2) For slots that are not returned before February 8, 2021, the usage threshold will be reduced from 80% to 50%; and (3) There will also be an exception to the 50% usage requirement for circumstances that may prevent airlines from operating scheduled flights for reasons other than commercial cancellations.
The comment period closed on December 29, 2020 and a number of entities commented, including the Star Alliance, which believes that FAA should extend the exemption in its current form, as a “continuation would avoid drastic schedule adjustments that would have ramifications throughout the system and disruptions to air connectivity.” While the Star Alliance prefers an extension of the current requirements, they recognized the WASB proposal as “an important industry compromise and [give their] support as a fall-back option.”
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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