Gao-12-902, Slot-Controlled
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United States Government Accountability Office Report to the Committee on Commerce, GAO Science, and Transportation, U.S. Senate September 2012 SLOT-CONTROLLED AIRPORTS FAA’s Rules Could be Improved to Enhance Competition and Use of Available Capacity GAO-12-902 September 2012 SLOT-CONTROLLED AIRPORTS FAA’s Rules Could Be Improved to Enhance Competition and Use of Available Capacity Highlights of GAO-12-902, a report to the Committee on Commerce, Science, and Transportation, U.S. Senate Why GAO Did This Study What GAO Found To help manage airport congestion, The 16 new beyond-perimeter flights that were authorized in 2012 for Reagan airlines operating at four U.S. National Airport are likely to have a limited effect on the airports in the airports—Washington’s Reagan Washington, D.C., area. Reagan National has sufficient runway capacity to National and the three major New York accommodate the new beyond-perimeter flights and, with some improvements to City area airports—must obtain baggage handling and security screening facilities, will have sufficient terminal operating authorizations called slots capacity. Reagan National is routinely operating below 67 hourly takeoffs and from FAA to take off or land. Airlines landings (“slots”)—the maximum number authorized in any one hour—mostly operating out of Reagan National also because general aviation or other unscheduled aircraft operations decreased may not operate flights beyond a substantially after new security restrictions were imposed following the 1,250-mile perimeter without September 11, 2001, terrorist attacks. GAO’s analysis found that the new congressional approval. In addition to beyond-perimeter flights could add a maximum of about 5 percent of 2011 the 24 flights (12 round trips) passenger levels at Reagan National, and if all of that increase came from previously approved, Congress passengers moving from Dulles International or Baltimore-Washington recently authorized 16 more beyond- International Thurgood Marshall, these airports could experience a maximum perimeter flights (8 round-trips) at decline of 4.1 percent of 2011 passenger levels. As a result, because Reagan Reagan National—flights that the airport authority fears will adversely National and Dulles generally do not share what are largely fixed costs, affect Reagan National and the passengers shifting from Dulles to the new beyond-perimeter flights at Reagan authority’s ability to continue servicing National would, in the worst-case scenario, increase average airline costs to use its debt. Some airlines seeking to Dulles by about 4 percent. Similarly, the new beyond-perimeter flights are not serve slot-controlled airports assert likely to affect the Washington Metropolitan Airports Authority’s (MWAA) ability to that slot control rules cause the service its $5.2 billion debt for the two airports. Finally, because half of the new airports to be underutilized or used beyond-perimeter flights were awarded to low cost airlines, thereby increasing inefficiently. GAO was asked to review competition, these new flights could have a positive effect on airfares on routes (1) the effects of adding more beyond- where new flights were added. perimeter flights from Reagan National and (2) how well slot control rules are Slot control rules help the Federal Aviation Administration (FAA) manage working to reduce congestion, while congestion at these four airports by limiting the number of takeoffs and landings maximizing capacity and encouraging that airlines may make per hour. The rules, however, in effect, allow some competition. GAO analyzed slot existing airport capacity to go unused, and this capacity is therefore unavailable allocation and airline schedule data, to other airlines because airlines are not required to schedule a flight for each of developed a statistical model, and their slots, but instead are only required to use their slots 80 percent of the time. interviewed FAA officials and others. Moreover, FAA’s recordkeeping and its process for reviewing airlines’ self- reported slot utilization data do not provide sufficient assurance that FAA can What GAO Recommends identify instances when airlines do not meet the 80 percent utilization Among other things, GAO requirement or determine how much capacity is going unused. In addition, FAA’s recommends that FAA improve its allowing airlines to apply the requirement collectively to their pool of slots, rather administration of the slot control rules, than individual slots, further contributes to slots going unused and provides an including applying the utilization advantage to airlines with large slot holdings. In addition to some existing requirement to individual slots. capacity going unused, flights at the slot-controlled airports, even when operated, Department of Transportation (DOT) tend to be scheduled in such a way that available capacity is used more and FAA provided technical comments, inefficiently than at like-sized airports that are not slot-controlled, thereby limiting which GAO incorporated as passenger growth and access by new-entrant airlines that could offer new appropriate, and agreed to consider service or lower fares. For example, GAO found that flights operated at slot- the recommendations. controlled airports tend to be scheduled with smaller aircraft. Using statistical analyses, GAO found that scheduled passenger flights at slot-controlled airports View GAO-12-902. For more information, are 75 percent more likely to be scheduled by airlines using an aircraft with fewer contact Susan Fleming at (202) 512-2834 or than 100 seats than flights at other like-sized airports that are not slot-controlled. [email protected] Slot-controlled airports also tend to have certain routes that are flown at higher daily rates and aircraft that are less full. United States Government Accountability Office Contents Letter 1 Background 4 Reagan National Can Accommodate New Beyond-Perimeter Flights, Which Are Likely to Have a Limited Effect on Other Washington, D.C., Area Airports 16 Slot Control Rules Help Manage Congestion, but Allowing Airlines Not to Use Some Slots May Hinder Competition 29 Conclusions 53 Recommendations for Executive Action 54 Agency Comments and Our Evaluation 55 Appendix I Objectives, Scope, and Methodology 58 Appendix II Comparative Information on Major Airports in the New York City and Washington, D.C., Area 64 Appendix III History of Slot Control Rules and Related Actions 65 Appendix IV Trends in Average Annual Passenger Traffic and Airfares at Selected Washington, D.C., Area Airports 75 Appendix V Logistic Regression Analysis of Slot-Controlled Airports and Aircraft Size 99 Appendix VI Comments from the Metropolitan Washington Airports Authority 107 Appendix VII Comments from the Port Authority of New York and New Jersey 111 Page i GAO-12-902 Airport Slot Controls Appendix VIII GAO Contact and Staff Acknowledgments 112 Tables Table 1: Selected Slot Control Rule Provisions for the Four U.S. Slot-Controlled Airports 10 Table 2: Hourly Aircraft Operations (Takeoffs and Landings) Allowed at Reagan National 17 Table 3: Impact of New Beyond-Perimeter Exemptions on Average Peak and Non-Peak Hour Slot Allocations at Reagan National for the Summer 2012 Season 18 Table 4: Projected Impact of the New Beyond-Perimeter Flights at Reagan National on the Cost per Enplaned Passenger in 2013 and 2014 25 Table 5: Percentage Difference in Flights at Slot-Controlled Airports That Use Small Aircraft Compared with Flights at Non-Slot-Controlled Airports, 2011 42 Table 6: Percentage Difference in Likelihood of a Flight’s Using Small Aircraft at Slot-Controlled Airports Compared with Non-Slot-Controlled Airports 44 Table 7: Logistic Regression Results for Slot-Controlled-Airport and Aircraft-Size Model, Small Aircraft with 100 Seats or Fewer 104 Table 8: Logistic Regression Results for Alternative Slot- Controlled-Airport Variable Definitions, Small Aircraft with 100 Seats or Fewer 104 Table 9: Logistic Regression Results for Alternative Slot- Controlled-Airport Variable Definitions, Small Aircraft with 124 Seats or Fewer 105 Table 10: Logistic Regression Results for Alternative Slot- Controlled-Airport Variable Definitions, Small Aircraft with 80 Seats or Fewer 106 Figures Figure 1: Annual Percentage of Late Arrivals and Flight Cancellations at the Four Slot-Controlled Airports Compared with All Airports from 2002 through 2011 6 Figure 2: Nonstop Beyond-Perimeter Slot Exemption Destinations from Reagan National from 2000 through 2012 15 Figure 3: Areas of Unused Capacity at Slot-Controlled Airports 32 Page ii GAO-12-902 Airport Slot Controls Figure 4: Airports’ Share of Scheduled Flights to or from the Same Destination by the Same Airline within 15 Minutes or 30 Minutes of One Another, February 2011 47 Figure 5: Average Load Factors at Large Hub Airports for Scheduled Flights during 2011 48 Figure 6: Proportion of Legacy and Other Airline Passenger Traffic at Slot-Controlled and Non-Slot-Controlled Large Hub Airports, 2011 50 Figure 7: Timeline of Major Actions Taken Regarding Slot Controls and Perimeter Rules at the Major New York City Area Airports and Reagan National 66 Figure 8: Indexed Average Passenger Traffic for All BWI Domestic Flights and Flights between BWI and Denver International Airport, 2000 to 2011 75 Figure 9: Indexed Average Annual Airfare for All BWI Domestic Flights and Flights between BWI and Denver International Airport, 2000 to 2011 76 Figure 10: Indexed Average Annual Passenger Traffic for All BWI Domestic Flights and Flights