FAA Fallout From LB Filling Vacant Airport Flight Slots:
FAA Calls LB's 2001 JetBlue Flight Slot Action "Questionable" Under Fed'l Reqts. But Lets LB Implement 2003 Flight Slot Settlement Agreement Between Carriers, Says It Resolves Claims, Avoids Litigation & Moots Issue, Avoids Ruling On Whether City Violated Fed'l Obligations; FAA Limits Action To Settlement Agreement
FAA Says It May Review LB Airport Ordinance For Consistency With Fed'l Grant And Access Reqts.; Could Do So On Its Own, On Complaint By Others, Or After Reviewing Oct. '03 City Analysis Of Noise Budget Targets (i.e. When Supplemental Flights Above 41 Could Be Allocated)
Previously Indicated Goals
We Post FAA Ten-Page Letter Verbatim.
City Hall Reaction
(May 2, 2003, add'l May 4) -- The Federal Aviation Administration (FAA) called "questionable" City Hall's 2001 JetBlue flight slot action but stopped short of declaring it illegal under federal requirements and let LB implement a 2003 Settlement Agreement allocating flight slots between three current Airport carriers as resolving disputes, avoiding litigation and mooting the issue from the agency's perspective.
An FAA letter to LB Airport from the office of FAA Deputy Chief Counsel James W. Whitlow, released by LB City Hall, says in pertinent part:
"[T]he FAA will not act to prevent the implementation of the [settlement] agreement, as it does not currently present an issue of noncompliance under ANCA [Airport Noise & Capacity Act of 1990] or the City's [federal] grant assurances."
LBReport.com posts the FAA letter verbatim in pdf form on a link below.
The FAA's action lets a Settlement Agreement, hammered out by the city's legal team with three current Airport carriers (previously reported by LBReport.com, link below) go into effect, avoiding the risk of a court challenge to LB's Airport ordinance. City Hall and the air carrier parties to the Agreement conditioned its implementation on FAA approval.
LB Mayor Beverly O'Neill called the FAA action important in preserving LB's flight limits, telling LBReport.com:
"This is a significant development in maintaining our control of our Airport, something other communities do not have. It avoids litigation that might have tried to threaten our Airport ordinance which we have long been committed to protecting."
However the FAA letter stopped short of offering agency protection for LB's Airport Noise Ordinance which City Hall previously indicated it had as a goal...and it arguably did the opposite.
In its letter, the FAA indicates it may review LB's flight limits for consistency with federal grant and access requirements [congressionally mandated and/or in FAA generated rules]...either acting on its own, or on complaint by others, or after its own review of LB's forthcoming Oct. '03 analysis of noise budget targets on which additional flights (above the current 41 for large aircraft) might be authorized.
The FAA states:
Our review of the City's compliance with its [federal airport improvement] grant assurances is limited to the settlement agreement, as requested; it does not extend to the basic document governing access at the airport, Chapter 16.43 [of LB's Municipal Code, the Airport Noise Compatibility Ordinance]. We take Chapter 16.43 as a given, and we review the agreement only as a settlement of issues arising under implementation of Chapter 16.43 to resolve a dispute that would otherwise have almost certainly resulted in litigation. However, because the agreement is based on Chapter 16.43 and several actions taken under that ordinance in the past two years, we consider it necessary to address certain issues arising under Chapter 16.43 before addressing the agreement itself in order to clarify the limited extent of the opinions expressed in this letter.
Although a federal appeals court upheld LB's noise budgeted flight limits in 1991 as not unconstitutional, the FAA arguably invited a new line of attack: if a potential new carrier believes LB's Airport noise ordinance were a barrier to entry [federal statutory and administrative requirements], the FAA said the carrier could bring a complaint to the FAA for alleged violation of the statutory or FAA requirements...which would require City Hall to defend the reasonableness of its ordinance, change it, or consider other courses of action.
This reiterates existing procedures and has always been a theoretical possibility, but it is the opposite of what City Hall previously indicated it hoped for: an FAA declaration that LB's noise budgeted flight slot system -- considered enlightened and progressive by many -- is valid in the agency's eyes.
Instead, the FAA letter said:
The parties have not requested the FAA to address the consistency of Chapter 16.43 with grant assurances, and it is unnecessary at this time for the FAA to take a position on whether Chapter 16.43 meets Federal requirements for Airport access. At some point in the future, however, the FAA may be presented with a complaint from a third party under 14 C.F.R. Part 16 [FAA rules], or may have reason to review Chapter 16.43 from a compliance standpoint on its own initiative. The FAA thus reserves the right to review the consistency of Chapter 16.43 with Federal law in the future. That review would not be affected by the opinions in this letter related to the settlement terms. In other words, the FAA would not revisit the settlement terms, but the current finding that the settlement is a reasonable action under existing Chapter 16.43 would not prevent an analysis of whether the provisions of Chapter 16.43 themselves meet Federal access requirements, if that issue were to be raised.
And in a significant section the FAA letter added:
The existing "defacto" limit of 41 regular slots (described as a "minimum" rather than a limit in Chapter 16.43) has largely been the driver of the dispute over slot allocation that led to the recent negotiations and settlement agreement. While the limit of 41 regular slots is accepted as a given for purposes of the FAA's consideration of the agreement, the FAA may separately consider the continuing basis for that limit after we have had the opportunity to review the City's analysis of the effect of current operations on the noise budget targets.
The FAA will continue to offer its services to the City at any time to identify potential compliance issues and means by which they can be avoided.
The FAA addressed the allocation of 27 slots to JetBlue as follows:
In May 2001, the City allocated all 27 of the then-remaining regular slots at the airport to JetBlue in a single allocation. That allocation was made in accordance with Chapter 16.43, which provides for allocation of available regular slots to a requesting carrier on a first-come, first-served basis. It is questionable whether the allocation of all remaining slots to a single carrier was consistent with the City's obligations to provide reasonable access to the airport in the future, particularly given the simultaneous action to permit JetBlue 24 months before it had to use the slots, as discussed below. However, the FAA has not issued an opinion on whether the allocation to JetBlue was consistent with the City's Federal obligations, because competing slot requests by other carriers were accommodated through settlement discussions that resulted in the settlement agreement. The agreement resolves all competing claims for all existing regular slots at the airport, and we consider the issue of the May 2001 allocation moot under the circumstances. Therefore, the FAA will not take any further action on the allocation.
The FAA letter indicated that the agency has informally advised that the City Council's 2001 expansion of the "use or lose" slot period from six month to two years is likely unreasonable under federal law and policy...and directed it be changed. In so doing, the agency reiterated that "we express no opinion on whether the number of regular slots under current Chapter 16.43, or the provision for limiting newly available capacity to one-year supplemental slots, provides reasonable access under the grant assurance requirements."
The FAA letter noted:
If at some point in the future a potential new entrant carrier believes that it is Chapter 16.43 [LB's Airport Noise Compatibility Ordinance] itself that is the barrier to entry, that carrier is free to challenge Chapter 16.43 by bringing a complaint to the FAA under 14 C.F.R. Part 16 [FAA rules]. In that case, the City could defend the reasonableness of Chapter 16.43, make modifications thereto, or consider other courses of action.
To view the FAA letter in its entirety in pdf form, click: FAA April 30, 2003 letter (Caveat: 10 pages, roughly 1.5 MB, with modem long download). Salient portions of the letter are especially on pp. 5-6 and extend thereafter.
In a telephone conversation with LBReport.com, LB Mayor Beverly O'Neill said the FAA action upholding the settlement agreement is an important step in preserving LB's flight limits.
"It avoids litigation that might have tried to threaten our Airport ordinance which we have long been committed to protecting," Mayor O'Neill said, adding "This is a significant development in maintaining our control of our Airport, something other communities do not have. It reflects an enormous amount of work by our legal team, the Council and city staff over several months."
At City Hall press briefing, attended by the Mayor, Councilmembers Webb, Kell and Carroll, Dep. City Attorney Mike Mais and Airport Mgr. Chris Kunze, reporters were given a press kit, that included the FAA letter and City Hall prepared "Highlights of the FAA Opinion Letter." The Highlights indicated the FAA had concluded:
The City's basic noise ordinance governing operations at LGB is "grandfathered" under provisions of the federal Airport Noise and Capacity Act ("ANCA") and therefore, "exempted [from] the notice, review, and approval requirements set forth in ANCA and Part 161 [of FAA rules]
The settlement agreement is also exempt from ANCA's federal review and approval requirements under relevant ANCA exemptions.
The FAA indicated that it was concerned about the fact that the City permitted JetBlue a 24 month period to fully implement its initial allocation of slots, but concluded that the settlement "...agreement resolved all competing claims for all existing regular slots at the airport, and we consider the issue of the May 2001 allocation [to JetBlue] moot under the circumstances.
FAA concluded that the agreement does not violate the City's AIP [federal] grant assurance obligations. In part, FAA reaches this conclusion by recognizing the special and in many respects unique circumstances at LGB, and noting that "[i]mplementation of the agreement avoids the delays and risks associated with litigation, and provides all three interested carriers with the ability to begin desired new service immediately. This new service significantly expands competition and air services for users of Long Beach Airport.
This is an important and significant result for the City in its continuing efforts to provide a reasonable level of commercial air service for the citizens of Long Beach and other members of the air traveling public using LGB, while respecting the environmental and quality-of-life interests of local residents who live around the airport.
This result was possible because of the cooperation of the airlines involved in the dispute. In addition, the FAA has worked closely and cooperatively with the City and airlines to resolve the dispute which threatened to jeopardize the City's continuing control over aircraft noise generated by operations at LGB...
At its February 4, 2003 Council meeting, previously reported and detailed by LBReport.com, Councilmembers voted 8-1 (Uranga dissenting) to adopt the settlement agreement b/w Alaska Airlines, American Airlines, JetBlue Airways & City Hall. (LBReport.com has posted the agreement in pdf form at Feb. 2003 agreement (Alaska, AA, JetBlue) re allocation of flight slots, 11 pages, 932 kB).
We post excerpts of the February 4 Council meeting below:
City Attorney Bob Shannon
...This issue received some prominence when some airlines threatened to sue the City of Long Beach after having been denied certain flight slots at the Long Beach Airport. The lawsuit which was actually prepared -- and which we saw -- would have sought to invalidate the city's noise ordinance which limits flights in and out of Long Beach Airport...
Our purpose was to resolve the issues before us of course, and the focus given to us by the City Council, and our efforts, were directed at avoiding litigation if possible, and most important of all, to preserve the integrity of the [LB] Noise Ordinance [which limits flights]...
[The settlement] agreement provides a mechanism to resolve a dispute between the City of Long Beach and various commercial air carriers regarding the allocation of flight slots at the Long Beach Airport. It avoids threatened litigation and confirms the integrity of the City's Airport Noise Ordinance...When the terms as set forth in the Agreement are approved by the FAA, the City's existing Noise Compatibility Ordinance will effectively be strengthened and less vulnerable to a successful court challenge.
I don't think you can over-emphasize that latter point. The FAA is a very, very...important part of this process, because once the FAA, if you will,...blesses [our ordinance] if you will, any future court action will permit us to involve the FAA and permit us to tell the Court that the FAA has indicated that our ordinance is valid and that will be very significant in any possible future court action...