Airport Privatization Pilot Program

AGENCY:

Federal Aviation Administration (FAA) DOT.

ACTION:

Available of record of decision for the participation of Stewart International Airport, Newburg, New York, in the airport privatization pilot program.

SUMMARY:

The Federal Aviation Administration (FAA) has approved the final application by the State of New York for Stewart International Airport (SWF) as one of the five airports eligible to participate in the airport privatization pilot program. An exemption is issued from certain provisions of 49 U.S.C. section 47134(b).

49 U.S.C. section 47134 establishes an airport privatization pilot program and authorizes the Department of Transportation to grant exemptions from certain Federal statutory and regulatory requirements for up to five airport privatization projects. The application procedures require the FAA to approve the final application and issue an exemption under 49 U.S.C. section 47134 after the execution of all documents necessary to fulfill the requirements of section 47134 and other laws and regulation within the FAA's jurisdiction.

DATES:

The FAA Record of Decision was signed on March 31, 2000. The New York State Department of Transportation transferred Stewart International Airport to SWF Airport Acquisition, Inc. under a 99 year lease agreement on April 1, 2000.

ADDRESSES:

The Record of Decision is available for public review in the Federal Aviation Administration, Office of Chief Counsel, Attention: Rules Docket (AGC-200), Docket No. 29088, 800 Independence Avenue SW., Washington, DC 20691.

FOR FURTHER INFORMATION CONTACT:

Kevin C. Willis, Compliance Specialist (AAS-400), (202-267-8741) Airport Compliance Division, Office of Airport Safety and Standards, Federal Aviation Administration, 800 Independence Ave. SW., Washington, DC 20591.

SUPPLEMENTARY INFORMATION:

Introduction and Background

Section 149 of the Federal Aviation Administration Authorization Act of 1996, Pub. L. No. 104-264 (October 9, 1996) (1996 Reauthorization Act) added a new section § 47134 to Title 49 of the U.S. Code. Section 47134 authorizes the Secretary of Transportation, and through delegation, the FAA Administrator, to exempt a sponsor of a public use airport that has received Federal assistance from certain Federal requirements in connection with the privatization of the airport by sale or lease to a private paty. Specifically, the Administrator may exempt the sponsor from all or part of the requirements to use airport revenues for airport-related purposes (upon approval of 65 percent of the air carriers serving the airport and having 65 percent of the landed weight), to pay back a portion of Federal grants upon the sale of an airport, and to return airport property deeded by the Federal Government upon transfer of the airport. The Administrator is also authorized to exempt the private purchaser or lessee from the requirement to use all airport revenues for airport-related purposes, to the extent necessary to permit the purchaser or lessee to earn compensation from the operations of the airport. (No air carrier approval is necessary for the latter exemption.)

On September 16, 1997, the FAA issued a notice of procedures to be used in applications for exemption under the Airport Privatization Pilot Program (62 FR 48693). The notice of procedures and its public comments are available for review in FAA Rules Docket No. 28895.

On December 16, 1997, the FAA issued a notice accepting for review the Stewart International Airport preliminary application (62 FR 65845, Docket Number 29088). This action permitted NYSDOT to select a private operator, negotiate an agreement, and submit a final application to the FAA for exemption. The filing date of the NYSDOT preliminary application was October 23, 1997, the date the FAA received the preliminary application. On January 10, 1999, NYSDOT filed its final application for the privatization of SWF. The final application provides for a 99-year lease agreement between NYSDOT and Stewart Airport Acquisition, Inc. (SWFAA) a wholly owned subsidiary of National Express Group. In return for the right to lease the airport, National Express Group (NEG) and its subsidiary will pay NYSDOT a $35 million payment and beginning in the tenth year of the agreement provide annual payments totaling five percent of gross airport income. As a part of its proposal SWFAA proposes a $48.6 million capital improvement program over the initial five-year period with a proposed rate of return ranging between 3% and 35% on the private operator's contribution. SWFAA will provide marketing support and all management, administrative and operational personnel to operate the airport.

On February 16, 1999, in an effort to clarify certain parts of the application, FAA staff requested responses to 5 questions from the NYSDOT and to 12 questions from NEG. Ten of the questions posed to the private operator required it to utilize confidential business or financial information in order to respond. In accordance with the airport privatization pilot program application procedures, (62 FR 48693, 48706, September 16, 1997), NEG requested confidential treatment of this information. As a result, the responses to these 10 questions were not available for public comment. Copies of the 17 questions and the 7 responses available for public view and comment are included in Attachment 15 of the sponsor's final application for review.

After reviewing this information, the FAA determined that the application was substantially complete.

On April 8, 1999, the Federal Aviation Administration published in the Federal Register a Notice of Receipt of Final Application of Stewart International Airport, Newburgh, New York; Request for Comments under the Airport Privatization Pilot Program (64 FR 17208). The notice made known the availability of the final application for Stewart International Airport for public comment and review. Comments were originally requested for submittal by June 7,1 999. The comment period was later extended to June 28, 1999, following a public meeting held on June 12, 1999, at the request of several members of Congress to allow the FAA to receive testimony from the local community and elected officials. The FAA also solicited and received comments at the public meeting held on June 12, 1999. Verbatim transcripts of the meeting have been included in the docket of this proceeding.

The Agency received 96 comments in response to the notice. The FAA response to the comments received is incorporated in the Record of Decision.

On March 30, the FAA signed a Record of Decision approving the participation of the airport in the Pilot Program, and issued an Airport Operating Certificate under 14 CFR part 139 to SWF Airport Acquisition, Inc.