Overflight Fee Notice

AGENCY:

Federal Aviation Administration.

ACTION:

Notice of agency plans to consult with users on Overflight Fees.

SUMMARY:

The recently enacted statute reauthorizing the Federal Aviation Administration (FAA) contains a provision that, among other things, directs the FAA to consult with users and other interested parties regarding the consistency of the FAA's Overflight Fees with the international obligations of the United States. This Notice announces the FAA's plans for conducting those consultations, including the specific date(s), location, and advance registration procedures.

Registering for Consultations

These consultations will be held on Tuesday, September 14, 2004, and if necessary on Wednesday, September 15, 2004, in Washington, DC at the Holiday Inn Capitol, 550 C Street, SW., Washington DC, 20024. To facilitate discussion and allow for a meaningful dialogue, the FAA will limit the number of attendees at any one session to no more than 50 to 60, but will schedule an additional session if necessary to satisfy demand and accommodate all registered participants. The first, and possibly only, meeting will be held on Tuesday, September 14, 2004. A second meeting will be held if needed the following day.

We are uncertain as to the level of interest and the number of people who will want to participate. For this reason, although the consultations are open to all users and other interested parties, the FAA reserves the right to limit attendance to no more than two persons representing any one organization. Parties wishing to attend should register as soon as possible—and no later than Friday, August 20, 2004—by sending an e-mail reply to 9-AWA-ABA-Overflight-Fee-Consultations@FAA.Gov or, if e-mail is not available, by calling Kristin Terrell at Phaneuf Associates at (703) 412-9100. Please provide your name and title and the name of the company or organization on whose behalf you will be attending. In the case of attorneys or consultants attending on behalf of clients, please provide (1) the name of your law firm or company; (2) the name of your client; and (3) the names and titles of those wishing to attend.

It is essential that anyone wishing to attend these consultations respond to this Notice so we can plan properly for the expected number of attendees. Whether or not a second session will be necessary will depend upon the number of interested parties requesting to attend. We will, as promptly as possible, inform all who have registered of the exact date, time and location of the session they can attend, as well as other information about the Holiday Inn Capitol in case they want to stay there overnight. (The Hotel's phone number for reservations is (202) 479-4000.) We cannot guarantee that anyone not registered for the consultations in advance will be able to attend a session.

FOR FURTHER INFORMATION CONTACT:

David Lawhead, Overflight Fee Program Manager (ABU-40), Federal Aviation Administration, 800 Independence Avenue, SW., Washington DC 20591, (202) 267-9759.

SUPPLEMENTARY INFORMATION:

History

The Federal Aviation Reauthorization Act of 1996 directs the FAA to establish by Interim Final Rule (IFR) a fee schedule and collection process for air traffic control and related services provided to aircraft, other than military and civilian aircraft of the U.S. Government or of a foreign government, that fly in U.S.-controlled airspace but neither take off from, nor land in, the United States (49 U.S.C. 45301, as amended by Pub. L. 104-264). Such flights are commonly referred to as “Overflights.”

The FAA began charging Overflight Fees in May 1997. The IFR under which the fees were established was challenged in court by the Air Transport Association of Canada (ATAC) and seven foreign air carriers. On January 30, 1998, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion in Asiana Airlines v. FAA, 134 F.3d 393 (D.C. Cir. 1998), vacating the IFR, finding that FAA's methodology for allocating certain costs did not comport with statutory requirements. The FAA subsequently refunded all fees (nearly $40 million) collected under the IFR.

Although the 1997 IFR was withdrawn, the statutory requirement that FAA establish Overflight Fees by IFR remained in effect. In 1998, the FAA began developing a new IFR on Overflight Fees using a different methodology. The fees were derived from cost data produced by the FAA's new Cost Accounting System. FAA issued a new IFR in May 2000 and began charging fees again on August 1, 2000. Thereafter, the ATAC and seven foreign air carriers (six of the original seven, plus one new one) challenged the IFR and the legality of the fees assessed thereunder and petitioned the U.S. Court of Appeals for the District of Columbia Circuit to invalidate the new IFR. The petitions were consolidated into a single case (ATAC v. FAA, No. 00-1334).

While this case was ongoing, the FAA issued a Final Rule that became effective on August 20, 2001. The rule reduced fees more than 15%, reflecting accounting adjustments, and provided additional information that the Court had stated should appear in the administrative record to support the agency's schedule of Overflight Fees. The eight Petitioners sought judicial review to invalidate the Final Rule, which became the second case captioned ATAC v. FAA (No. 01-1446) and was combined with the first. On April 8, 2003, the Court of Appeals issued a decision setting aside both the IFR and the Final Rule, finding that the FAA had failed to demonstrate that the Overflight Fees were directly related to FAA's costs (ATAC v. FAA, 323 F.3d 1093 (D.C. Cir. 2003)). The decision did not address any international agreements or commitments of the United States.

Vision 100 Legislation

On December 12, 2003, the President signed into law H.R. 2115, the “Vision 100—Century of Aviation Reauthorization Act” (Pub. L. 108-176; 117 Stat. 2490). Section 229 of that Act contains several provisions relating to Overflight Fees. One of those provisions in effect clarifies that, under earlier legislation the Overflight Fees need only be “reasonably,” not “directly” related to FAA's costs of providing the services, and shields the Administrator's determinations of such costs from judicial review. Another provision of section 229 provides that the IFR and Final Rule are “adopted, legalized, and confirmed” by Congress “as of the date those rules were originally issued,” that is, May 30, 2000, and August 13, 2001, respectively.

Section 229 of the Act also provides that before the FAA may resume the actual collection of Overflight Fees, it must first report to Congress on the issues raised by the Court in ATAC v. FAA and “consult with users and other interested parties regarding the consistency of the fees under such section with the international obligations of the United States.” With this Notice, the FAA is establishing the process of consultation required by the new statute.

Future Actions

In addition to the September 2004 consultations announced in this Notice, which will be narrowly focused on the consistency of the current fees with the international obligations of the United States, the FAA is now in the process of establishing an aviation rulemaking committee (ARC) on Overflight Fees. The purpose of the Overflight Fees ARC will be to provide a forum for in-depth review and discussion of the data and analytic framework used by the FAA in establishing Overflight Fees. Representatives of air carriers, foreign air carriers, other system users, and aviation associations will be members of the ARC. The ARC will be tasked with providing advice and recommendations to the FAA regarding possible changes to Overflight Fees in light of methodological improvements, more recent data on costs, changes in the scope of the services provided by the FAA, and other factors that may be relevant to revising fees.