Aviation and Airport Development Law

GAO Reports That FAA's "Voluntary Airport Low Emissions" Program Has Yet To Meet Expectations

staber@calairlaw.com (Steven Taber) — Thu, 13 Nov 2008 06:00:00 -0800

The GAO released its Report to Congressional Committees on the FAA's "Voluntary Airport Low Emissions" (VALE) program on November 10, 2008. Entitled Aviation and the Environment: Initial Voluntary Low Emissions Program Projects Reduce Emissions, and FAA Plans to Assess the Program's Overall Performance as Participation Increases, the GAO reports on how the VALE has been implemented and the outcomes attributable to it.

In 2003, Congress established VALE to reduce airport ground emissions at commercial service airports in areas failing to meet or maintain air quality standards. FAA administers the program and provides funding for it through Airport Improvement Program grants or Passenger Facility Charges. Participating airports receive credits for the emission reductions achieved through VALE projects. Airports can then use these credits to offset emissions resulting from development projects to comply with federal Clean Air Act requirements.

The GAO reports that as of September, 2008, only 9 of the 160 airports that were eligible had or were planning to initiate a VALE project. Those airports are:

Bush Intercontinental Airport, Houston, TX
Hobby Airport, Houston, TX
Detroit Metropolitan Airport, Detroit, MI
Erie International Airport, Erie, PA
Greater Rochester International Airport, Rochester, NY
Albany International Airport, Albany, NY
Stewart International Airport, Newburgh, NY
Westchester County Airport, White Plains, NY
Philadelphia International Airport, Philadelphia, PA

Although FAA expects participation in VALE to increase as more airports become familiar with the program, GAO reported that non-participating airports stated they were aware of the program, but did not want to participate. One reason for the lack of participation is that some airports have a misperception that VALE projects compete with other projects for AIP funding, thereby limiting the funds an airport could receive for other projects. VALE projects, however, are funded through discretionary AIP set-aside for noise and emission projects.

This is not to say that VALE is not without success. Houston Hobby Airport and Bush Intercontinental Airport have both taken advantage of the program to obtain emission credits for planned construction projects. Likewise, Philadelphia International Airport plans to use the program to satsify CAA conformity requirements to offset emissions produced in the constructionof its ongoing capacity enhancement project.

Despite the marked lack of participation, FAA seeks to use VALE as a "new model for government efforts to promote clean fuels and technology." For this reason, the FAA and the GAO point out that EPA is recommending in current proposed revisions to its General Conformity Regulations that the VALE system for granting emissions credits be expanded to all action subject to General Conformity Regulations.

Would Re-Regulating Airlines Decrease Their Woes?

blichman@calairlaw.com (Barbara E. Lichman) — Sat, 08 Nov 2008 18:00:58 -0800

Anyone who has recently traveled for business, read the business section of the local newspaper, or watched CNN knows that the airline industry is in dire economic straits. Pundits typically attribute that weakness to increased fuel prices. But the reality is that the deterioration began at almost the same time as the passage of the Airline Deregulation Act in 1978 and results from at least two major factors: (1) predatory competition pitting legacy carriers against startups; and (2) the airlines' flawed business model which depends on "hubbing," an expensive process of concentrating resources in a few locations to aggregate as much demand as possible (versus "point to point" operations, a model used consistently and successfully for the entire period since the advent of deregulation).

The Airline Deregulation Act was Congress' test of the viability of transforming the airline industry, an industry that had, until that time, been considered in the nature of a regulated utility, into a model of the benefits of economic competition. Specifically, the ADA eliminated Federal control over airline routes and pricing, and prohibited any local or state government from exercising that control. Its intended purpose was to increase competition thus expanding service and lowering prices to the public.

The fundamental problem with this conversion from utility to free market is that is ignores the fundamental reality that airlines like other transportation industry components have never been able to survive for long without government subsidies. They are continuously subsidized out of the taxpayers' pockets in at least two ways: (1) construction and improvement of airports upon which airlines operate are paid for 80-90% by grants from the Federal Aviation Administration ("FAA"), to which development airlines contribute through landing fees and other charges; and (2) in times of economic upheaval such as the aftermath of 9/11, they received direct gifts from the government to keep them afloat. Until September/October, 2008, when banks began getting Federal government handouts, airlines were among the principal U.S. businesses relying upon such taxpayer largesse.

A debate has now arisen within the airline industry cncerning the wisdom of some form of re-regulatoin. On the one hand, Robert Crandall, former President of American Airlines, argues, in his article of June 16, 2008, in Aviation Week and Space Technology, that "unfettered competition does not work. Airlines are more like utilities," and that "a fundamental problem is how the industry prices its product. The instant perishability of empty seats and the impossibility of quickly reducing fixed costs when demand falters, create a temptation to sell seats too cheaply." He suggest, among other things, some combination of "modest price regulation," and "capacity controls at congested airports, revised bankruptcy and labor laws, and a more accommodating stance toward industry collaboration." Id., see also, Aviation Week and Space Technology, October 27, 2008.

On the other hand, those who disagree contend that deregulation should be extended to "completing the move to deregulation in areas as foreign investment [in U.S. airlines] laws, security mandates, bankruptcy reform, and operational restrictions." Id.

Whichever way it goes in the future, the traveler is being squeezed now. Aircraft operations are being cut back, services are being eliminated, delays are increasing, baggage incurs additional charges, and, adding insult to injury, travelers are paying "fuel surcharges." Ironically, however, deregulation has also allowed airlines to consolidate, thus freezing out startups, and raising prices to the public, the opposite of the effect deregulation was supposed to have had. No one argues that airlines are not an indispensable part of the nation's transportation system. It is, therefore, clear tha they will have to continue to survice and, hopefully, to thrive. However, the question raised by Bob Crandall, i.e., whether a heavily subsidized airline industry can survive in the guise of free market enterprises, still hangs in the air.

Remarks of Michael E. Levine, "Airline Survival in a Tough World." Speech before the The International Aviation Club, July 29, 2008.
"The 'Tragedy of the Commons' and Airport Congestion Management," Steven M. Taber. Blog post, September 22, 2008.
"The Threat of Latter-Day 'Progressives' to an Authentically Liberal Economic Policy," Alfred E. Kahn. Working Paper 08-03, January, 2008, Reg-Markets Center.

FAA's 2009-2013 Flight Plan Includes 5 More Airports Due for an Airspace Redesign

staber@calairlaw.com (Steven Taber) — Mon, 03 Nov 2008 20:45:22 -0800

On October 28, 2008, Acting FAA Administrator Bobby Sturgell rolled out the FAA's 2009-20013 "Flight Plan" at a speech in Oklahoma City, Oklahoma. The "Flight Plan," in which FAA sets goals for itself, is "the strategic plan for the agency, the plan to help [the agency] prepare for the future." In the past year, for example, as Acting Administrator Sturgell pointed out, the FAA "reached 25 out of 29 goals," with the remaining goals "probably" being achieved by November 20, 2008. In other words, the goals set in the Flight Plan are projects and issues that the FAA has good reason to believe it can achieve over the stated planning horizon.

Priority one, according to the Flight Plan, is "dealing with congestion and delays . . . both in the air and on the ground. Toward that end, the FAA plans to "identify and address capacity-constrained airports and metropolitan areas." The FAA has identified Atlanta, Chicago Midway, Fort Lauderdale, John Wayne Orange County (CA), Las Vegas, Long Beach, Oakland, Phoenix, San Diego and San Francisco as being "capacity constrained" and provided these airports with a "toolbox" which includes "technological, procedural, and infrastructure improvements to be considered for implementation at airports based on additional capacity needs in the future."

In addition, in FY 2009, the FAA plans to "increase aviation capacity and reduce congestion in the 7 metro areas and corridors that most affect total system delay." Those areas are: San Francisco, Los Angeles, Las Vegas, Chicago, Charlotte, New York and Philadelphia. Apart from continuing the controversial airspace redesign for the New York/New Jersey/Philadelphia Metropolitan area, and the slot auctions for JFK, Newark and LaGuardia, which all spawned lawsuits, the FAA plans on moving forward with the redesign of the airspace for the remaining 7 metro areas.

The FAA notes that are eleven projects in the planning or environmental stage at the largest airports including:

In addition, the FAA states that three airport proprietors have planning studies underway to examine how their metropolitan areas will accommodate future demand for aviation. They include (1) Chicago, (2) Atlanta, and (3) San Francisco. Thus, expanding airports play a large role in the FAA's Flight Plan to increase capacity.

The FAA also plans on addressing the environmental issues associated with capacity enhancements. It targets two issues in this area: (1) reducing the number of people exposed to significant noise by 4 % through FY 2013, as measured by a three-year moving average; and (2) improve aviation fuel efficiency by another 1% over FY 2008 level through FY 2009, and 1% each subsequent year through FY 2013 to 11%. While these goals are laudable, the FAA does not offer much in terms of specific programs to reach the goals. The only specific program it mentions is working with several airports (Los Angeles, San Diego, Louisville, Charleston, and Atlanta) to implement Continuous Descent Arrival for night operations. The rest of the FAA's initiatives center around research, developing standards, and "implementing management systems."

In the end, FAA is relying heavily on its rollout of the NextGen system to meets its goals, especially with regard to safety. The FAA believes that NextGen will allow it to transition "from air traffic control to air traffic management."

Other new articles about the FAA's Flight Plan:

FAA 'Flight Plan' for 2009 Focuses on Safety and Capacity, Flying Magazine

California Air Resources Board Seeks Comments on Its Climate Change Proposed Scoping Plan

staber@calairlaw.com (Steven Taber) — Thu, 30 Oct 2008 16:26:19 -0800

The Global Warming Solutions Act of 2006 (AB 32) designated the California Air Resources Board (CARB) as the lead agency for its implementation. The next milestone for CARB is developing a Scoping Plan outlining California's strategy to achieve the 2020 greenhouse gas (GHG) emissions limit. So on October 15, 2008, CARB published its Climate Change Proposed Scoping Plan: A Framework for Change. The Scoping Plan contains the main strategies California will use to reduce the greenhouse gases that cause climate change. Since this plan has the potential to affect just about every sector of California, CARB is seeking the public's comments. Comments on the Scoping Plan are due no later than December 10, 2008. The Scoping Plan will be presented for approval at the CARB’s December 11, 2008, meeting

The Scoping Plan proposes a comprehensive set of actions designed to reduce overall greenhouse gas emissions in California. Among the solutions it proposes are "improving our state's infrastructure, transitioning to cleaner and more secure sources of energy, and adopting 21st century land use planning and development practices." Moreover, CARB lists as the key elements of its recommendations:

Establishing targets for transportation-related greenhouse gas emissions for regions throughout California, and pursuing policies and incentives to achieve those targets;
Developing a California cap-and-trade program that links with other Western Climate Initiative partner programs to create a regional market system; including California's clean car standards, goods and movement measures, and the Low Carbon Fuel Standard;
Adopting and implementing measures pursuant to existing State laws and policies,
Expanding and strengthening existing energy efficiency programs as well as building and appliance standards;
Achieving a statewide renewables energy mix of 33 percent; and
Creating targeted fees, including a public goods charge on water use, fees on high global warming potential gases, and a fee to fund the administrative costs of the State's long term commitment to AB 32 implementation.

Noticeably absent from the Scoping Plan is any mention of airports or aircraft. This is due to the CARB's perceived inability to do much about airports and aircraft due to FAA's pre-empting the field. Indeed, about the only mention of airports and aircraft in the AB 32 materials comes in Appendix C of the Draft Scoping Plan:

Emissions from the fuel used in planes is an important consideration, however, the State does not have regulatory authority over aviation. ARB has not identified aviation specific measures; however, successful deployment of High Speed Rail could divert some air passengers to rail.

Draft Proposed Scoping Plan, Appendix C, p. C-21. Nor does the Scoping Plan take the emissions of aircraft have while they are in air.

As a final note, there will be a public hearing on the Scoping Plan on November 20, 2008, in Sacramento, to consider the AB 32 Scoping Plan to reduce Greenhouse Gas emissions in California. Click here for the Agenda.

California's Proposal for Interim Significance Thresholds for Greenhouse Gases Will Affect Airport Planning

staber@calairlaw.com (Steven Taber) — Wed, 29 Oct 2008 17:40:46 -0800

As part of the California Air Resources Board's (CARB) "Climate Change Proposed Scoping Plan," the Board, on October 24, 2008, released its Preliminary Draft Staff Proposal on recommended approaches for setting Interim significance thresholds for greenhouse gases under the California Environmental Quality Act (CEQA). Since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

California law provides that climate change is an environmental effect subject to the CEQA. Lead agencies, such as Airport Land Use Commissions, are therefore obligated to determine whether a project's climate change-related effects may be significant, thereby requiring preparation of an Environmental Impact Report and to impose feasible mitigation to substantially lessen any significant effects.

CARB is specifically requesting participation from the public stakeholders and local lead agencies. The Preliminary Draft Staff Proposal suggests a "sector approach" due to the fact that "(1) some sectors contribute more substantially to the problem, and therefore should have a greater obligation for emissions reductions, and (2) looking forward, there are differing levels of emissions reductions expected from different sectors in or to meet California's climate objectives."

The PDSP includes flowcharts that address CARB's "threshold concepts" for industrial projects and for residential and commercial projects. The PDSP also states that that the staff is working on a proposal for an interim approach for thresholds for transportation projects. CARB proposes, for example, a significance threshold of 7,000 metric tons of CO2e/year. For Projects that go over that amount, an EIR would have to be prepared and "all feasible GHG mitigation measures implemented."

CARB has identified a few questions to solicit public comment, but notes that the "list is not exhaustive."

Will the recommended approaches have any unintended consequences, for example, encouraging the piecemealing of projects?
As set out in the attachments to the Staff Proposal, staff proposes to define certain performance standards (e.g., for energy efficiency) by referencing or compiling lists from existing local, State or national standards. For some sub-sources of GHG emissions (e.g., construction, transportation, waste), ARB staff has not identified reference standards. How should the performance standards for these sub-sources be defined?
Are any of the industrial, residential, or commercial project types eligible for categorical exemptions likely to contribute more significantly to climate change than staff's preliminary analysis indicates?
For residential and commercial projects, staff has proposed that the GHG emissions of some projects that meet GHG performance standards might under some circumstances still be considered cumulatively considerable and therefore significant. What types of projects might still have climate change-related impacts?

As noted above, since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

Legal Analysis of the FAA's Slot Auction Rule for JFK and Newark Part 2

staber@calairlaw.com (Steven Taber) — Tue, 28 Oct 2008 19:27:28 -0800

Analysis of Legal Issues Regarding Slot Auctions, Part Two.

Having established previously that the FAA does not have specific authority to lease or otherwise dispose of slots, FAA turns to its general power to dispose of property in order to justify its auctioning of the slots. Under 49 U.S.C. 106 FAA is authorized to:

acquire, construct, improve, repair, operate, and maintain . . . real and personal property . . . and to lease to others such real and personal property . . .” as well as to enter into “such contracts, leases, cooperative agreements, or other transactions as may be necessary to carry out the functions of FAA.

49 U.S.C. 106(l). In addition 49 U.S.C. 40110 authorizes FAA “[to] dispose of an interest in property for adequate compensation . . .” Thus, the FAA theorizes, if a slot is “property,” then by virtue of these three provisions it has all the authority it needs to dispose of the “property.”

Leaving aside the statutory construction arguments that the FAA’s property disposition authority does not extend to such evanescent and intangible property rights as “slots,” the real legal question comes down to this: Are slots a property right owned by the FAA?

The controversy turns an interpretation of Cleveland v. United States, 531 U.S. 12 (2000), which was mentioned in the GAO Legal Opinion, IATA’s comments and ATA’s comments. Cleveland stands for the proposition that the government’s regulatory powers to issue licenses to do something which otherwise would not be permitted does not create a property right for the government. It only becomes a property right to the licensee after the issuance of the license. In Cleveland, Louisiana claimed that licenses it issued to run video poker devices were its “property.” The U.S. Supreme Court saw it a little differently:

Without doubt, Louisiana has a substantial economic stake in the video poker industry. The State collects an upfront “processing fee” for each new license application . . ., a separate “processing fee” for each renewal application . . ., an “annual fee” from each device owner . . ., an additional “device operation” fee . . ., and, most importantly, a fixed percentage of net revenue from each video poker device . . . It is hardly evident, however, why these tolls should make video poker licenses “property” in the hands of the State. The State receives the lion share of its expected revenue not while the licenses remain in its own hands, but only after they have been issued to licensees. Licenses pre-issuance do not generate an ongoing stream of revenue. At most, they entitle the State to collect a processing fee from applicants for new licenses. Were an entitlement of this order sufficient to establish a state property right, one could scarcely avoid the conclusion that States have property rights in any license or permit requiring an up front fee, including drivers’ licenses, medical licenses, and fishing and hunting licenses. Such licenses, as the Government itself concedes, are “purely regulatory.”

531 U.S. at 22. In other words, absent a statutory provision, so long as the “property” (the license in Cleveland) is the product of the Government’s regulatory power, or its police powers, it is not property while it is in the Government’s hands. In this case, it would seem, based on Cleveland, that since the FAA derives its authority to assign slots from its regulatory authority over “navigable airspace,” slots are not property rights in the hands of the FAA.

FAA attempts to get around Cleveland by asserting that “Section 40110(a)(2) does not speak to whether the FAA actually owns property that is being disposed of. It only speaks to the disposal of a property interest. Only the FAA has authority to assign the use of navigable airspace under section 40103.” 73 Fed.Reg. at 60549. The FAA concludes that even though the property right is created “at the time of transference” of the slot, it still falls within its property disposition power under 40110(a)(2) since it is “disposing of” a “property right.” This however, ignores the fact that the FAA has no property interest to “dispose of,” and that in assigning slots it carrying out its regulatory duties with respect to the airspace.

Similar to the FAA, in Cleveland, Louisiana tried to compare its interest in video poker licenses to a patent holder’s interest in a patent that she has not yet licensed. The court rejected that argument:

Louisiana does not conduct gaming operations itself, it does not hold video poker licenses to reserve that prerogative, and it does not “sell” video poker licenses in the ordinary commercial sense. Furthermore, while a patent holder may sell her patent . . ., the State may not sell its licensing authority. Instead of patent holder’s interest in an unlicensed patent, the better analogy is to the Federal Government’s interest in an unissued patent. That interest, like the State’s interest in licensing video poker operations, surely implicates the Government’s role as sovereign, not as property holder.

531 U.S. at 23-24. In other words, if it is not a property right until after it is sold or licensed, you do not have a “property right” to “dispose of.” The FAA’s assigning use of navigable airspace “implicates the Government’s role as sovereign, not as property holder.” Thus, it seems that since the Supreme Court has spoken on this issue, the FAA will be hard pressed to successfully argue that it can auction slots by virtue of its property disposition authority.

Next Post: Even if slots are FAA property, does the FAA violate the IOAA by accepting money for them?

Legal Analysis of the FAA's Slot Auction Rule for JFK and Newark Part 1

staber@calairlaw.com (Steven Taber) — Sun, 26 Oct 2008 15:59:15 -0800

Pt. 1: Setting The Stage

When the FAA adopted its slot auction rules for LaGuardia, JFK and Newark Airports, it did so despite the fact that the GAO had issued a legal opinion stating that it believed that the FAA did not have a legal basis to conduct auctions of slots at the airports.

Needless to say, the FAA's decision brought some criticism from Congress. Rep. James Oberstar (D-Minn.) and Rep. Patty Murray (D-Wash.) sent a letter to the FAA Inspector General, Hon. Calvin Scovel, requesting that he look into the matter and assess whether the FAA's actions were "potential willful violations of the Purpose Statute [31 U.S.C. 1301(a)] and the Antideficiency Act [31 U.S.C. 1341(a)(1)(A)]."

The stakes got higher when, on October 10, 2008, the Port Authority of New York and New Jersey filed a Petition for Review in the U.S. Court of Appeals for the District of Columbia. That Petition was followed on October 14, 2008, by similar Petitions for Review filed by the International Air Transport Association and the Air Transport Association of America. All of the Petitions for Review were consolidated by the Court on October 27, 2008.

There seems to be agreement among all of the parties that the FAA has the regulatory authority to impose caps on hourly arrival and departure slots based on its authority under 49 U.S.C. 40103(b)(1) and (2), which allows the FAA to "ensure efficient use of the airspace." The issue that separates the FAA from GAO, IATA, ATA and PANYNJ is whether the FAA may raise funds in connection with its assignment of slots through a slot auction, imposing a user fee, assessing a tax, or by some other mechanism.

In analyzing this fundamental disagreement some consensus emerges. It is agreed that Congress has granted FAA explicit statutory authority to collect fees in several different situations, but that FAA has no explicit authority to impose fees related to the assignment of slots. Indeed, the FAA has long sought such explicit authorization from Congress, which Congress has not yet granted. See, e.g., 71 Fed.Reg. 51362 (Aug. 29, 2006) ( ". . . the FAA currently does not have the statutory authority to assess market-clearing charges for a landing or departure authorization"). It is FAA's efforts to get around the fact that it lacks explicit authority that is at the heart of the matter.

In order to claim authority to collect funds in connection with its assignment of slots, FAA makes two connected arguments. First, FAA claims that a "slot" is an "intangible" form of property that it may lease pursuant to its "property disposition" power granted to it by Congress under 49 U.S.C. 106(l)(6) and (n) and 40110(a)(2). Second, since the slot is a property right being leased, it is not an "user fee" or "tax." Therefore, it is not subject to the Independent Offices Appropriations Act (IOAA), 31 U.S.C. 9701 et seq. The opposing parties have claimed that the FAA is wrong on both counts.

Next Post: Analysis of FAA's claims that it possesses a property interest in slots at airports.

FAA Publishes a Draft Environmental Impact Statement for Palm Beach International Airport's Airfield Enhancement Project

staber@calairlaw.com (Steven Taber) — Sun, 26 Oct 2008 08:53:56 -0800

On September 26, 2008, the FAA published a Draft Environmental Impact Statement (DEIS) for the construction and operation of proposed airfield improvements to Palm Beach International Airport (PBIA) “to accommodate existing and projected aviation demand.” Comments on the DEIS are due no later than November 24, 2008. Since the Airport Sponsor (Palm Beach County) seeks to enhance capacity at PBIA, one would think that there would be a concomitant increase in environmental effects of the project over what would be considered the "no action" alternative, i.e., not doing the project. However, the FAA claims that there will be a net decrease in environmental effects (after construction) because the project will not increase capacity above what is already planned and delays will be reduced. See below for an analysis of that issue. That being said, the FAA admits to there being a shift in the noise contours and an increase in air pollution created by the airport, at least temporarily by the construction created by the Project.

The major "airfield improvements" that the FAA is requesting approval for are:

Modifications to Runway 9R/27L. Relocate and construct Runway 9R/27L 100 feet south of its existing location to length of 8,000 feet and a width of 150 feet.
Modifications to Runway 13/31. Shorten the southeast end of Runway 13/31 currently 6,932 in length) by 3,412 to provide a standard Runway Safety Area and extend the northwest end of Runway 13/31 by 480 feet. The total adjusted length of Runway 13/31 would be 4,000 feet.

According to the DEIS, "once constructed and operational, the improved Runway 9R/27L would be primarily used as an arrival runway, and existing Runway 9L/27R would be used as the primary departure runway. Because of its shortened length . . . Runway 13/31 would be used only by small, G[eneral] A[viation]-type aircraft."

The FAA admits that Proposed Project will result in significant increases in noise. In 2013, the Proposed Project would cause 386 housing units and 957 people to experience a DNL 1.5 increase or greater. By 2018 the number of affected housing units will increase by 423 and another 1,049 people. Both of these increases are considered to be "significant impacts" under FAA criteria. For these people, the FAA is deciding whether to offer:

Acquisition and relocation of homes;
Purchase of an avigation easement;
Sound insulation in exchange for an avigation easement; or
Purchase assistance.

Moreover, there will be impacts on property that do not experience an increase of DNL 1.5. FAA criteria does not consider these impacts to be significant, therefore no mitigation will be proposed for the Project. The FAA states that the "Airport Sponsor [Palm Beach County] may initiate an update to their current FAR Part 150 Noise Compatibility Program to mitigate noise impacts to these additional homes."

The FAA relies heavily on the assumption that the Proposed Project will not increase capacity beyond what is already forecast. Thus, it claims environmental benefits based on the reduction of time that aircraft spend idling and taxiing due to a decrease in delays created by the Proposed Project. This assumption, however, ignores the economic principle "induced demand," that is, if delay times are decreased during peak hours, then the airlines will, most likely, schedule additional flights thereby increasing the number of aircraft on the runways, which will increase idling and taxi time. This is not a concept that is foreign to the FAA, since it includes in its Benefit Cost Analysis Guidance for Airport Sponsor a specific formula that equates a decrease in delay time with an increase in aircraft operations. See, p.41 and Appendix C of FAA Benefit Cost Analysis Guidance.

With respect to air quality, although the FAA admits to a short-term rise in emissions due to construction of the Proposed Project, the FAA claims that the Proposed Project will result in fewer emissions than if the Project is not constructed. This outcome is based on the FAA's assumption that increasing the capacity of the airport will not cause the airlines to schedule additional flights over and above those already forecast. Thus, the decrease in emissions "is due to the reduced aircraft taxiing times associated with the planned improvements to the airports." Thus, if the airlines schedule flights over and above those already forecast, this benefit is eliminated or, at least, seriously diminished. This would be an increase not only of "criteria pollutants" (i.e., Volatile Organic Compounds, Nitrous Oxides, and Particulate Matter) but also of "Hazardous Air Pollutants" and greenhouse gases.

Moreover, despite recent studies indicating that emission of pollutants above 3,500 feet above ground level has an effect on air pollutant levels on the ground (click here for a summary of the Taubman and the Clark studies, click here (on p.3) for a summary of the University of Maryland study), the FAA ignores the effect that such high level emissions will have.

In addition, although the FAA did "inventory" Hazardous Air Pollutants (HAPs) at PBI, it did not perform a Human Health Assessment. The FAA claims that because the EPA has not set a "National Ambient Air Quality Standard" (NAAQS) under the Clean Air Act, it need not assess the impact that the Proposed Project will have on the emission of HAPs. However, this ignores the NEPA requirement that all environmental effects of a federal project must be assessed. NEPA does not limit the air quality assessment solely to "criteria pollutants." Thus, a Human Health Assessment of the HAPs would be appropriate in this case.

A couple of final notes:

Comments on the DEIS are due no later than November 24, 2008.
That being said, it should also be noted that if one were to bring a lawsuit against the FAA after the FAA decides to implement this Project, that person is limited to raising issues before the court that he or she raised before the FAA. In other words, if no one comments on the Project on a particular issue prior to the FAA making its final decision, that issue may not be raised in a subsequent lawsuit.

More information regarding the Project can be found at the Project web site http://www.pbia-eis.com. Here are links to the separate Chapters, Figures and Appendices, if you do not want to download the entire DEIS.

Draft Environmental Impact Statement for the "Capacity Enhancement Project" at Philadelphia International Airport is Published

staber@calairlaw.com (Steven Taber) — Sat, 18 Oct 2008 10:01:28 -0800

The FAA recently published the Draft Environmental Impact Statement (DEIS) for its "Capacity Enhancement Project" (CEP) (warning! this is a large file, the DEIS is broken up into Chapters at the end of this post) at the Philadelphia International Airport (PHL). Comments on the DEIS are due no later than November 10, 2008. Since, as its title suggests, the FAA seeks to increase capacity at PHL, there is a concomitant increase in environmental effects of the project over what would be considered the "no action" alternative,i.e., not doing the project. In particular, there will be increases in noise in certain areas and an increase in air pollution created by the airport, not only by the increase in aircraft once the project is finished, but also by the construction created by the Project.

After dismissing several options as not meeting the "Purpose and Need" of the Project, the FAA offers two alternatives, both involve:

the addition of a new 12,000-foot runway 9C-27C;
relocating the Air Traffic Control, Tinicum Island Road, Island Avenue, and the UPS terminal;
closing Hog Island Pier and and extending Fort Mifflin Pier; and,
closing Conrail line south of the Airport and constructing new rail line northeast of the Airport.

The major differences between the two alternatives are:

Alternative B eliminates the 6,500-foot runway, Runway 17-35; and
Alternative B would tear down the existing terminal and create a terminal system similar to that at Atlanta Hartfield with terminal "islands" connected by a People Mover;

Although the FAA claims that the total population and housing units exposed to DNL 65 dB and greater would decrease substantially under both alternatives, those decreases "would occur primarily north of the Airport in Philadelphia County, Pennsylvania as a result of eliminating Runway 17-35 or significantly reducing its use." That being said, the FAA admits that there would be "significant impacts" under both alternatives to people and housing units in Delaware County thus shifting the noise contours from Philadelphia County to Delaware County. In addition, both Camden and Gloucester Counties would experience increases in noise levels during the twelve years of construction.

Likewise, with respect to air quality, the FAA admits that there will be an increase in emissions of pollutants, especially during the construction phase of the project. This is an increase not only of "criteria pollutants" (i.e., Volatile Organic Compounds, Nitrous Oxides, and Particulate Matter) but also of "Hazardous Air Pollutants" and greenhouse gases. Moreover, despite recent studies indicating that emission of pollutants above 3,500 feet above ground level has an effect on air pollutant levels on the ground (click here for a summary of the Taubman and the Clark studies, click here (on p.3) for a summary of the University of Maryland study), the FAA ignores the effect that such high level emissions will have.

Humans will not be the only ones effected by the project. The DEIS also reports that natural resources such as wetlands, and parks, as well as endangered and threatened species will be impacted by the Project.

A couple of final notes:

The DEIS does not mention coordination with any local agency outside the City of Philadelphia. This is despite the fact that although the City of Philadelphia operates PHL, most of the Airport is actually located in Delaware County, Pennsylvania.
Comments on the DEIS are due no later than November 10, 2008. That being said, it should also be noted that if one were to bring a lawsuit against the FAA after the FAA decides to implement this Project, that person is limited to raising issues before the court that he or she raised before the FAA. In other words, if no one comments on the Project on a particular issue prior to the FAA making its final decision, that issue may not be raised in a subsequent lawsuit.

More information regarding the Project can be found at the Project web site http://www.phl-cep-eis.com. Here are links to the separate Chapters, Figures and Appendices, if you do not want to download the entire DEIS.

Executive Summary
Abstract
Chapter 1Introduction and Background
Chapter 1 Figures
Chapter 2 Purpose and Need
Chapter 2 Figures
Chapter 3 Alternatives
Chapter 3 Figures
Chapter 4 Affected Environment
Chapter 4 Figures A
Chapter 4 Figures B
Chapter 5 Environmental Consequences
Chapter 5 Figures A
Chapter 5 Figures B
Chapter 5 Figures C
Chapter 5 Figures D
Chapter 6 Mitigation
Chapter 6 Figures
Glossary, Index, References, List of Preparers, and Distribution List
Appendices

Despite GAO Ruling FAA Issues Congestion Management Rules for JFK, Newark and LaGuardia

staber@calairlaw.com (Steven Taber) — Sun, 12 Oct 2008 18:48:56 -0800

In a gutsy move that is sure to draw the ire of Congressional leaders as well as the Air Transport Association, the FAA announced last Friday, October 10, 2008, that it had promulgated two "congestion management" rules: one for LaGuardia Airport, and the other for JFK and Newark Airports. In these rules, the FAA stated that it would proceed with its auctions of slots at the airports despite the GAO Report indicating that it was unlawful to do so. (See, GAO Declares FAA Does Not Have Legal Authority to Auction Slots).

The Rule for JFK and Newark and the Rule for Newark, which both become effective December 9, 2008, establish procedures to address "congestion in the New York City area by assigning slots" at the three airports in a way that the FAA believes will allow "carriers to respond to market forces to drive efficient airline behavior." The JFK/EWR Rule extends the caps on the operation at the two airports, assigns to existing operators the majority of slots at the airports, while the LGA Rule grandfathers the majority of operations at the airport. The FAA claims that both Rules will develop a "robust" secondary market by annually auctioning off a limited number of slots in each of the first five years of this rule. The FAA states that the proceeds of the auction will be used to mitigate congestion and delay in the New York City area. Finally, the Rule also contains provisions for minimum usage, capping unscheduled operations, and withdrawal for operational need. Leases obtained in the first auction will start on October 25, 2009.

Most of the Federal Register notice announcing the promulgation of the Rules is spent justifying the Rules in the face of the GAO's report that concluded that the FAA did not have the authority to auction the slots. The FAA concludes that "the issues involved represent novel legal issues upon which reasonable poeple, and agencies, acting in good faith, have disagreed. The FAA disagrees with the GAO conclusions and has decided to proceed with the adoption of this final rule."

An analysis of the legal statements will be forthcoming in future blogs.

GAO Declares FAA Does Not Have Legal Authority to Auction Slots

staber@calairlaw.com (Steven Taber) — Wed, 01 Oct 2008 11:20:41 -0800

The GAO, in a legal opinion issued September 30, 2008, declared that "FAA currently lacks the authority to auction arrival and departure slots, and thus also lacks authority to retain and use auction proceeds." This legal opinion came as a result of a Congressional request.

In April and May, 2008, the FAA issued proposed regulations to conduct auctions of the airport arrival and departure slots at LaGuardia, JFK and Newark airports. (See, FAA Proposes Congestion Management Rule for JFK and Newark Liberty). Since then, the FAA indicated in August that that it was proceeding with an auction of two specific slots at Newark airport on September 3, 2008. Although that action was administratively stayed (See, FAA Suspends Auction of Flight Slot at Newark Airport), the stay (issued by the FAA's Office of Dispute Resolution for Acquisition) was subsequently lifted on September 30, 2008. Moreover, the FAA, on September 16, 2008, announced that it "may" auction slots at Newark, LaGuardia and JFK starting on January 12, 2009.

The FAA claimed that the slots are "intangible property" that it "constructs, owns, and may lease" for "adequate compensation under 49 U.S.C. 106(l)(6) and (n) and 40110(a)(2). The GAO stated:

An examination of those statutes read as a whole, however, makes clear that Congress was using the term "property" to refer to traditional forms of property. It was not referring to FAA's regulatory authority to assign airspace slots, no matter how valuable those slots may be in the hands of the regulated community. Related case law confirms our conclusion.

The GAO concluded that if the auctions were to go ahead, and the FAA retained the proceeds that the the GAO "would raise exceptions under its account settlement authority for violations of the 'purpose statute,' 31 U.S.C. 1301(a), and the Antideficiency Act, 31 U.S.C. 1341(a)(1)(A)."

Needless to say the Department of Transportation was not too pleased with the outcome, stating that the GAO did not have time to do a thorough review given the "complexities of aviation law." If the GAO had the opportunity to reflect, the DOT was "confident that GAO will better understand both the validity and the effectiveness of [the FAA's] approach."

On the other side of the fence, both the Air Transport Association and the Port Authority of New York and New Jersey issued press releases applauded the GAO's legal opinion. Rep. James Oberstar (D-Minn.), the Chairman of the U.S. House Transportation and Infrastructure Committee, said in a press release that the "FAA should now reconsider its plan to auction slots in light of the GAO finding."

(For my commentary on the situation, see the blog post The "Tragedy of the Commons" and Airport Congestion Management)

GAO Issues Report To House Committee on Transportation Regarding FAA's Issuance of Medical Certification Decisions

staber@calairlaw.com (Steven Taber) — Tue, 30 Sep 2008 21:17:13 -0800

The Government Accountability Office issued a report to the Chairman of the U.S House Committee on Transportation and Infrastructure entitled "FAA Has Taken Steps to Determine That It Has Made Correct Medical Certification Decisions" on September 30, 2008.

In 2005, a joint investigation known as "Operation Safe Pilot" was conducted by the Department of Transportation Office of the Inspector General, Social Security Administration's Office of Inspector General, and California's U.S. Attorney Office. That investigation revealed that the FAA had issued medical certificates to a small percentage of pilots who had disqualifying medical conditions that they did not report on their medical certification applications. Calling some of the medical certificate cases "egregious," the DOT IG stated that 45 individuals identified as having falsified their certificates were prosecuted criminally as a result of the investigation.

In March, 2007, the House Committee issued a report showing that a significant number of pilots were flying with fraudulent medical certificates and asked the GAO to assess FAA's efforts for screening medical certification applicants and identifying medically unqualified pilots. The Report published on September 30, 2008, is the result of that request.

In sum, the GAO reported that the FAA has developed programs to help it determine whether it has properly issued medical certificates. In particular, the FAA has instituted two quality assurance review programs, one to evaluate certificate that the Aviation Medical Examiners issued and a second to evaluate certificate decisions made by FAA application examiners. In addition, the FAA checks each pilot applicant against the National Driver Register to look for drug- and alcohol-related motor vehicle actions and indications of substance abuse.

However, due to "recently resolved litigation," the FAA currently does not check federal disability benefits databases for indications that pilots may have disqualifying medical conditions. The GAO's analysis of the Social Security Administration's disability databases found that 1,246 of the 394,985 medically certified pilots were receiving disability benefits. Since this was the crux of the DOT IG's "Safe Pilot" investigation, the GAO's recommendation that "federal disability data bases can provide useful information on potentially disqualifying medical conditions" is a bit of an understatement. That being said, the GAO correctly points out that just because a pilot is receiving disability benefits does not automatically mean that they are medically unfit to fly.

On September 26, 2008, Chairman James Oberstar (D-Minn.) issued a press release stating that although he was pleased that progress is being made, the fact that there are still medical certificates being issued to unfit applicants is troubling. “Progress is good, but progress must lead to a goal,” Oberstar said. “In this case, the goal should be 100 percent certainty that certificates are not obtained fraudulently or erroneously. Perhaps that is an impossible goal, but it should be our goal nonetheless.”

House Aviation Subcommittee Conducts Hearing on Runway Safety

staber@calairlaw.com (Steven Taber) — Fri, 26 Sep 2008 05:00:00 -0800

The U.S. House Subcommittee on Aviation met on September 25, 2008 to receive testimony on runway safety. This hearing was a follow-up to the Subcommittee's February 13th hearing. Rep. Jerry Costello (D-Ill.) stated in his opening remarks that although the U.S. air transportation system is the safest in the world, there remain many issues to be addressed to keep it that way. In particular, he was concerned about the fact that although air traffic is down by 3% for the first six months of 2008 compared with 2007, runway incursions are up slightly. While agreeing that the FAA is headed in the right direction with respect to the development and the deploying of new runway technology, Rep. Costello wanted the FAA to address the very real human factors that the GAO raised in the previous hearing, i.e., the air traffic controller shortage and the adequacy of the training of air traffic controllers. Rep. Costello specifically mentioned the serious runway incursion that occurred at Lehigh Valley International Airport in Allentown, Pennsylvania, on September 19, 2008, where a trainee failed to notice that a small single engine airplane had not yet vacated the runway prior to allowing a regional jet to take-off on the same runway. It was reported that 35% of the controllers at the tower at Allentown are trainees.

With respect to the increase of runway incursions, Hank Krakowski, FAA's Chief Operating Officer, explained that after the FAA adopted the International Civil Aviation Organization's (ICAO) definition of "runway incursion," it has seen a spike in incursions due to the more inclusive nature of the ICAO definition. That being said, Mr. Krakowski spent most of his time offering an update about the technological innovations and the progress on the testing in the field. However, Mr. Krakowski did not address Rep. Costello's concerns head-on. Although he addressed some of the "human factors," by mentioning certain procedural changes and a "first ever" fatigue symposium (which are, by all accounts, steps in the right direction), he did not mention anything about staffing levels and quality of the training.

The necessity of the FAA to increase its focus on the "human factors" was echoed in Dr. Gerald Dillingham's, GAO's Director of Physical Infrastructure Issues, testimony. Dr. Dillingham stated that the FAA is making progress in continuing to develop and test new technology, promoting changes in airport layout, markings, signage and lighting and issuing new air traffic procedures, but still could focus more on the human factors. The GAO believes that increased training for pilots and air traffic controllers could help address the human factors issues.

Mr. Patrick Forrey, President of NATCA, found himself in the position of reiterating NATCA's previous recommendation. Mr. Forrey called for Local Airport Committees for Runway Incursion Prevention, proper staffing of Air Traffic Control Towers, increased modernization of technological components, use of "end-around" taxiways and staggered arrivals into intersecting runways.

Written Testimony provided by:

Mr. Hank Krakowski, Chief Operating Officer, Air Traffic Organization, Federal Aviation Administration;
Dr. Gerald L. Dillingham, Director Physical Infrastructure Issues, Government Accountability Office;
Mr. Patrick Forrey, President, National Air Traffic Controllers Association;
Capt. John Prater, President, Air Line Pilots Association, International;
Mr. James M. Crites, Executive Vice President of Operations, Dallas/Fort Worth International Airport.

For a video of the hearing click here.

FAA Proposes to Have Airports Include a List of Based Aircraft On All AIP Grant Applications

staber@calairlaw.com (Steven Taber) — Thu, 25 Sep 2008 05:00:00 -0800

On September 8, 2008, the FAA published a notice in the Federal Register (73 Fed.Reg. 52074) that it is proposing to modify the standard grant application requirements that are required of a sponsor of a non-primary airport before receiving a grant under the Airport Improvement Program (AIP). This modification would require that a sponsor of a nonprimary airport submit a list of the aircraft (both fixed wing and rotary wing) that are based on the airport. The FAA invites public comments on this proposed modification. Comments must be submitted on or before October 8, 2008.

FAA believes that this information is necessary because "accurate information on based aircraft is an important element of justification for many proposed AIP projects at nonprimary airports." In addition, the FAA posits that the information regarding based aircraft "supports the airport's importance in the biennial Report to Congress - The National Plan of Integrated Airport Systems (NPIAS) and in the Airport Master Record."

FAA defines "based aircraft" as an "operational aircraft that is registered in the FAA Aircraft Registry that is at the airport the majority of the year." The proposal is that the FAA may require a sponsor for a nonprimary airport to include the "N-number" for each based aircraft or to update the list of based aircraft submitted with the most recent Form 5010 inspection. Unfortunately, the Notice does not provide definition of how airports are to determine which aircraft are "based aircraft." The FAA concludes the Notice by stating that it will consider a failure to provide the information "as a factor when considering a request from the airport for discretionary funding."

Comments can be sent or delivered to FAA, Airports Financial Assistance Division, APP-500, Room 619, 800 Independence Avenue, SW., Washington D.C. 20591. Comments can also be submitted electronically by clicking here and then clicking on "Send a Comment or Submission." This will take you to the Regulations.gov page for docket number FAA-2008-0972-0001.

The "Tragedy of the Commons" and Airport Congestion Management

staber@calairlaw.com (Steven Taber) — Mon, 22 Sep 2008 11:59:18 -0800

In 1968, Garrett Hardin, a professor of Human Ecology at University of California at Santa Barbara, wrote an influential article for the journal Science that described a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared resource even where it is clear that it is not in anyone’s long term interest for this to happen. Prof. Hardin titled this dilemma and his article the “Tragedy of the Commons.” The current situation at this country’s busiest airports, a shared resource, is a graphic example of the Tragedy of the Commons.

In Prof. Hardin’s article, the central theme is that herders share a common parcel of land, i.e., the commons, on which they are all entitled to let their cattle graze. It is in each herder’s interest to put as many cattle as possible onto the commons, even if it is damaged as a result. The herder receives all of the benefits from the additional cattle, but damage to the commons is shared by the entire group. If all the herders make this individually rational decision, however, the commons is destroyed.

A parallel can be drawn to the sttructure of the United States air transportation system with respect to congestion management. It is in the each airline’s interest to schedule as many flights as possible during the busiest time of day, even if those flights are substantially delayed as a result thereby overloading the airspace system and the airport, taxing customers’ patience, and damaging the airline’s reputation. Each of the airlines receives benefits from the additional flights, but the damage to the airport, the airspace system and the airlines is shared by the entire group.

In this scenario, cooperation among the airlines does not lead to tangible benefits. Aside from the legal restrictions of anti-trust laws, this is the result of a “prisoner’s dilemma.” The prisoner’s dilemma is:

when two prisoners are told that if they cooperate and testify against the other prisoner, they will go free.
If one of them cooperates and testifies, and the other does not, then the non-testifying prisoner receives a harsh sentence.
If both cooperate and testify, they both will receive a average sentence. If they both refuse to testify, they both will receive a very light sentence.

The outcome is that it is in the interest of each of the prisoners to cooperate and testify against the other, since the worse that could happen is that he would receive an average sentence, whereas the best outcome would be he would be set free.

Such is the case with the airlines and overscheduling during peak hours. Although the airlines would benefit if all airlines did not overschedule during peak hours, the risk that another airline would schedule too many flights to obtain a larger market share is too great. Moreover, since the damage created by overscheduling is shared, the rational behavior for the airline would be to schedule as many flights as possible before the damage gets too great. The possibility is for the airlines to support enhancing capacity at the airports (i.e., enlarging the “commons”), but this increases the cost to the parties other than airlines. Witness the surfeit of litigation surrounding the expansion of O’Hare and the East Coast Airspace Redesign.

In most cases, the Tragedy of Commons leads to an increase in government intervention. Since it is in the airlines’ rational best interest to schedule additional flights, someone needs to regulate their behavior for the best interests of the community. Thus, slot restrictions (i.e., limiting the number of “cattle” allowed on the commons and when they are allowed) would seem to make sense to resolve the problem. However, this solution is not one that is preferable to the airlines, since the government is deciding the highest and best use of the airports and mandating the result irrespective of the outcomes the airlines desire and economic benefits or losses. (for the purposes of this post, I put aside the legal and philosophical issue of who “owns” the slots). There are, however, two possible solutions to the problem that can be derived from economic theory and from solutions to the Tragedy of the Commons.

First, a possible solution is the application of the Coase Theorem, which is well-known to lawyers through its application in United States v. Carroll Towing Co, 159 F.2d 169 (2nd Cir. 1947), where Judge Learned Hand decided that tort liability could be assigned using economic analysis. At its most basic, the Coase Theorem states that the individual who can make the highest and best use of a resource will pay the most for it. It was used in the 1950s when the government was deciding how to regulate radio frequencies so that radio stations did not overlap. The conclusion was to auction the radio frequencies, since the individual or company who thought that they could make the most profit from the particular frequency would incur the highest transaction cost.

Similarly, slot auctions where the slots for arrivals and departures are auctioned off for the peak hours at the busiest airports would seem to be a solution that would resolve the Tragedy of the Commons. Airlines would have to take a careful look at their needs and desires to assess properly the value that they would place on any particular slot. This method of resource allocation is not favored by the airlines because they would end up paying for a resource that they currently get for free. However, the price for the slot would be determined by the market, i.e., if the airline places a high degree of value on a particular slot, then it will end up paying for it. On the contrary, the airline that can make its business plan work using slots that either cost less or are not during the peak hours, will pay less. The Coase Theorem as applied to airports, may result in larger aircraft being flown during the peak hours, if that is what the market can bear.

Second, Prof. Hardin proposed in his article, which addressed overpopulation, that the solution to the problem is “mutual coercion, mutually agreed upon” and result in the “relinquishing of the freedom to breed.” The “freedom to breed” in the airport context is the ability of the airlines to schedule flights ad infinitum during peak hours at the busiest airports. Thus, the relinquishment of the freedom to breed would be a cap on the number of arrivals and departures during the peak hours. This would be determined on the basis of the airport’s capacity, throughput and safety as well as the air traffic controller’s workload. Then it would be up to the airlines to divvy up the arrivals and departures amongst themselves. In this way, the airlines would avoid slot auctions and slot restrictions, but would have to cooperate among themselves to coerce each other to behave in a manner that supports their mutual good, rather than just the good of a single airline. This also resolves the prisoner’s dilemma issue, since studies have shown that in “iterative prisoner’s dilemma” cases, i.e., where the “game” is conducted in a series, cooperative behavior is rewarded where there is penalty assessed for non-cooperative behavior. Thus, so long as the government provides the stick if the airlines do not cooperate, then the result would be the most beneficial. In addition, this solution has the advantage of more limited governmental involvement, since it is only setting the cap based on its values (safety and capacity), but getting in the business of actually scheduling flights and deciding who can fly when.

This article is not intended to offer an in-depth exhaustive survey into the problems surrounding congestion management, but merely to place the problem into a context for discussion recognizing the basic principles of human behavior and economics.

U.S. House Subcommittee Investigates Alleged Regulatory Lapses in the Certification and Manufacture of the Eclipse EA-500

staber@calairlaw.com (Steven Taber) — Thu, 18 Sep 2008 09:51:38 -0800

Rep. Jerry Costello (D-IL), Chairman of the Aviation Subcommittee remarked in his opening statement that it is: “inexcusable and unacceptable to ignore rules, regulations and standard practices to accommodate those you have responsibility to regulate especially when you have people’s lives in your hands.” With that in mind, the Subcommittee heard testimony from the Office of the Inspector General (OIG) that the FAA had “alarming problems” and “severe lapses” in judgment in its certification process for the Eclipse EA-500, a Very Light Jet (VLJ). VLJs have been heavily promoted as a potential solution to congestion around larger airports, and as a means tobring a convenient, fast transportation alternative to smaller communities that cannot support network commercial air service.

In particular, the OIG made three findings concerning the EA-500 certification process. First, OIG found that the FAA permitted exceptions to its usual design certification process. For example, the FAA accepted an “IOU” from Eclipse that it would meet accepted standard at a later date for the avionics software. For an aircraft that relies heavily on software, the OIG would have expected the FAA to perform rigorous analysis and testing. Second, the OIG found that the FAA awarded Eclipse a production certificate even though the company failed to demonstrate the ability to replicate the approved design. This was despite that fact that Eclipse encountered numerous problems replicating its won aircraft design on the assembly floor both before and after receiving its certificate. Finally, Senior FAA management identified Eclipse as a priority certification and appeared to be lenient with the manufacturer.

Nicholas Sabatini, Associate Administrator for Safety, and John J. Hickey, Director of the Aircraft Certification Service, offered excuses for the Eclipse EA-500 certification process. Mr. Sabatini told the Subcommittee that he assembled a “Special Certification Review” team, headed by Jerry Mack, a former Boeing executive. That team concluded, according to Mr. Sabatini, that the FAA’s certification was appropriate because it did meet the required standards. That being said, what was not mentioned in Mr. Sabatini’s remarks were the SCR’s criticisms of the process and what changes he believes need to be made to the process.

At its core, the Committee seemed to have the FAA’s “Customer Service Initiative” in its sights. That Initiative, whereby the airlines and aircraft manufacturers are treated more as the FAA’s “customers” as opposed to regulated entities have become firmly rooted in recent FAA culture, has come under scrutiny with respect to the safety inspections conducted on the airlines. In the end, the investigation and hearing is less about Eclipse, and more about the regulatory failure of the FAA, once again, to adhere to its primary mission of safety and protection of the flying public.

Also testifying were:

Clyde R. Kizer, Retired Aerospace Executive

Peg Billson, President and General Manager, Manufacturing Division, Eclipse Aviation Corporation

Thomas Haueter, Director, Office of Aviation Safety, National Transportation Safety Board

Maryetta Broyles, Technical Program Management Specialist, Federal Aviation Administration, Aircraft Certification Service, SW Region Rotorcraft Directorate, Manufacturing Inspection Office

Ford J. Lauer III, Manager, Federal Aviation Administration, Manufacturing Inspection District Office

Dennis Wallace, Federal Aviation Administration, Software Engineer,

David A. Downey, Vice President, Flight Safety, Bell Helicopter – Textron, formerly Manager of the FAA Rotorcraft Directorate.

For a video of the full hearing, click here.