05/13/1985 - Airport Relations Commission �1
US. Department 800 Independence Ave., S.W.
of Transportation Washington, D.0 20591
Federal Aviation
Administration
MAY 1 3 1985
Mr. Thomas L. Hedges
City Administrator
City of Eagan
3830 Pilot Knob Road
Eagan, MN 55121
Dear Mr. Hedges:
Secretary Dole has asked me to reply to your letter to her urging that
the Federal Aviation Administration (FAA) strictly enforce its
aircraft noise compliance regulation (section 91.303 of the Federal
Aviation Regulations), in view of the strong public concern and support
for noise abatement.
The Congress, as part of the Conference Report which accompanied the
Aviation Safety and Noise Abatement Act of 1979, urged that special
consideration be given to hardship situations and noted five factors
which would constitute such situations. FAA has consistently followed
that guidance and will continue to apply the five hardship factors
identified by the Congress. I am enclosing a copy of FAA's first order
issued pursuant to the court's order, which fully explains FAA's appli-
cation of these factors to petitions for exemption from the noise
compliance regulation. This application of the Congressional guidance
provides a fair balance between the needs for noise control for airport
neighbors and the needs of our national system of air transportation.
FAA remains firmly committed to aviation noise control and to all
feasible actions which will reduce noise impacts on airport neighbors.
The actions which we are taking relative to new petitions for exemption
from the aircraft noise compliance regulation are fully consistent with
that commitment.
I hope this information is helpful.
Sincerely,
Donald R. Segner
Associate Administrator for Policy
and International Aviation
Enclosure
Exemption No. 4302
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
WASHINGTON, D. C. 20591
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
In the Matter of the Petition of x
x
LINEAS AEREAS DEL CARIBE, S. A. x Regulatory Docket
x No. 24028 -2
for an exemption from Section x
91.303 of the Federal Aviation x
Regulations x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
GRANT OF EXEMPTION
By petition dated April 11, 1985, filed by Ms. J. W. Young, Barrett Smith
Schapiro & Armstrong, 1201. Pennsylvania Avenue, N. W., Washington, D. C.
20004, on behalf of Lineas Aereas del Caribe, S. A. (hereinafter "LAC "),
petitioner requested an exemption from the January 1, 1985 noise level
compliance date contained in 14 CFR Part 91, Subpart E, section 91.303.
The provisions of section 91.303 prohibit any person, on or after January 1,
1985, from operating any subsonic turbojet airplane covered by Subpart E to
or from an airport in the United States unless that airplane has been shown
to comply with Stage 2 or Stage 3 noise levels under 14 CFR Part 36.
Petitioner conducts scheduled all -cargo air service, using aircraft that do
not comply with the noise level requirements. Under section 91.303, absent
an exemption, these aircraft cannot now legally be operated in the United
States.
On March 29, 1985, the United States Court of Appeals for the District of
Columbia Circuit entered its opinion in Airmark, et al. v. FAA, et al., No.
84 -1619, remanding to the FAA certain cases dealing with petitions for
exemption from the FAA's aircraft noise compliance rule. In that decision,
the Court indicated that the FAA had broad discretion both as to the manner
in which it could review newly filed exemption petitions and the criteria to
be applied in reviewing such petitions. The Court, on April 5, 1985, issued
an order concerning petitioner which required the FAA to show cause why the
FAA's January 3, 1985, denial of LAC's previous petition for exemption should
not be vacated.
In light of this background, this petition has not been published in the
Federal Register because the FAA has determined that it would be contrary to
the public interest to delay disposition of this petition pending publication
for comment. This grant contains information for petitioners, including
petitioners affected by orders entered by the Court of Appeals who are
confronted with early deadlines for filing new petitions with the FAA. Due
to the imminence of the Court's filing deadlines, the FAA finds that it is in
the public interest to make this information available as quickly as possible
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to those petitioners affected by the orders of the Court, as well as all
others. The FAA has determined, for good cause, that publication in advance
in the Federal Register should be waived in this case, only, and to issue the
exemption herewith since, as noted below, the FAA finds that this petitioner
meets the criteria set forth herein.
General Discussion.
In reviewing this petition and all other petitions, the FAA has determined
that two classes of petitions may warrant an exemption from section 91.303.
First will be those petitioners who satisfy all five of the criteria set out
by the Congress in the Conference Report on the Aviation Safety and Noise
Abatement Act (ASNA) (H.R. Rep. No. 715, 96th Cong., 1st Sess. 23, reprinted
in 1980 U.S. Code Cong. & Ad. News 115, 124). Second, those petitioners who
have been designated in U. S. Department of Transportation (DOT) orders to
serve routes determined to be essential service may be eligible for an
exemption from the noise rule for service on those routes without regard to
whether they otherwise satisfy the five criteria set out by Congress.
I. Congressional Criteria.
As stated previously, the ASNA Conferees indicated that the FAA in reviewing
petitions for exemption from the noise rule should give consideration to
hardship situations. The Conferees described a hardship situation as being
comprised of the following five necessary components all of which must apply
in each case:
- smaller carrier
- making a good faith compliance effort
- needed technology delayed or unavailable
- could suffer financial havoc
- performs valuable airline service.
The following is a discussion of the FAA's interpretation of these criteria.
A. The term "smaller carrier" means a carrier which, on January 1, 1985,
operated 9 or fewer transport category turbojet aircraft. A "smaller
carrier" may also be one which on that date had less than 1500 employees.
These definitions of "smaller carrier" are based upon the FAA's definition of
a small entity for purposes of implementing the Regulatory Flexibility Act of
1980 (FAA Order 2100.14, dated July 15, 1983) and the Small Business
Administration definition of "small business concern" contained in 15 U.S.C.
632 and in the Small Business Size Regulations promulgated by that
Administration on February 9, 1984 (49 Federal Register 5024). Although the
FAA and SBA standards were established for purposes other than the aircraft
noise rule, they can be used as reliable guidance utilizing available data on
industry size.
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B. The term "good faith compliance effort" requires that the petitioner have a
firm contract entered into no later than March 29, 1985 (the date of the U.S.
Court of Appeals decision in the Airmark case), for either hush kits or-
replacement complying aircraft supported by a non — refundable deposit of-at
least $75,000 for each affected aircraft, and that the delivery date is the
earliest possible date. Exemptions will be limited to aircraft which are the
subject of a hush kit or replacement contract. Further, a petitioner may not
obtain an exemption for more aircraft than the number of non — compliant aircraft
operated by it in the comparable period in 1984, since the purpose of ASNA is
to mitigate the noise impact of such aircraft. In addition, if the pertinent
contract is for a hush kit, the contract must be with a supplier which had
applied for a supplemental type certificate (STC) for the hush kits before
January 1, 1985, and is continuing active efforts to obtain the STC. This
requirement is necessary to ensure there be a serious likelihood that the
non —noise compliant aircraft can be brought into compliance in a reasonable
time — frame. Given the general experience of the FAA with the supplemental type
certification process and its specific experience with certification of hush
kits, any applicants who did not even apply for an STC prior to January 1,
1985, are faced with development efforts requiring a substantial amount of time
prior to certification. The clear Congressional intent of ASNA was to place a
policy premium on the expeditious delivery of improved noise technology to the
market. Allowing later filed STC's to qualify for this criterion would
contradict that legislative policy. Thus, to faithfully carry out the
Congressional intent, contracts with suppliers who do not fulfill this
requirement will not be considered by the FAA as constituting "good faith"
compliance efforts for purposes of satisfying this criterion.
C. The FAA has determined that the criterion "needed technology is delayed or
unavailable" is essentially net by all petitioners. Those petitioners having
aircraft for which the technology to manufacture hush kits was developed in
1973, meet this criterion because the commercial availability of the hush kits
has been delayed until recently. Those petitioners that have aircraft for
which there are no hush kits currently under development also meet this
criterion.
D. In determining whether a petitioner, absent an exemption, could suffer
"financial havoc," the FAA will:
1. Presume that, if 20% or more of the petitioner's total operations
during the same period in 1984 for which it is seeking an exemption in 1985
would be prohibited, then financial havoc would occur.
2. If, however, a petitioner cannot show that it would lose 20% or more of
its total operations, but still believes it will suffer financial havoc if
it does not receive an exemption, the FAA will apply the following test to
the data submitted by the petitioner:
Using publicly available data for 1984, delete revenue produced by
non — compliant U.S. operations which would have been barred by the
noise rule and which would not be permitted by any other exemption
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held by the petitioner, from the operator's financial database, along
with an equal percentage of variable costs. If the resulting figure
results in a net loss of greater than 10% of the operator's assets,
the FAA will presume that financial havoc exists in that case.
Given the fact that there are significant carrier -by- carrier variations in
economic make -up, (i.e. amount of accrued reserves, operating margins, etc.), a
single, overall test for financial havoc is inadequate. Rather, the FAA will
first apply a presumptive standard (20% of operations) which would reasonably
be viewed as resulting in financial havoc if met by a petitioner. However, if
an individual carrier fails to meet this presumptive standard, but still
believes that its individual situation will result in financial havoc, the
carrier may submit particularized information concerning its own profit and
loss (10% of assets).
Both the financial havoc tests use historical, publicly available data because
such data are sufficiently objective for the FAA to evaluate. Any projections
of 1985 operations or financial results would be so subjective that the agency
could not adequately determine their validity.
E. In the context of determining eligibility for an exemption from Section
91.303, the criterion "valuable airline service" is met by all petitioners who
operated aircraft in charter or scheduled air transportation before January 1,
1985. This date has been used because Congress obviously intended that the
service must have been provided prior to the effective date of the prohibition
to be deemed "valuable" within the context of the criteria.
II. Essential Air Service (EAS).
Notwithstanding the five criteria explained above, the FAA has determined that
carriers which have been designated in DOT orders to perform service on routes
which have been designated as EAS routes pursuant to section 419 of the Federal
Aviation Act of 1958, as amended, (49 U.S.C. 1389) warrant special
consideration in that maintenance of air service on such routes is, by statute,
deemed to be in the public interest. The Congress, in its passage of the
Airline Deregulation Act, considered essential air service to be a critical
element of the maintenance of air service to small and isolated communities.
Despite the primary thrust of the Act to restore competitive incentives to
civil aviation, Congress recognized the importance of ensuring that small
communities would be given access to the air transportation system, and
directed the Board (and now DOT) through section 419 to further:
It . .the congressional policy to encourage and foster the continuation of
safe and reliable scheduled air transportation for small communities and
isolated areas." S. RE °. No. 95 -631, 95th Cong., 2nd. Sess., 89 (1978).
The FAA also finds that the public interest requires that the objectives of the
ASNA and the aircraft noise abatement program established by the FAA, including
the aircraft noise operating rule contained in FAR section 91.303, must also be
met insofar as possible consistent with continuation of essential air service.
Therefore, the FAA will consider that an exemption from section 91.303 for a
designated essential air service route is in the public interest if the
petitioner shows that it:
- is operating noncomplying aircraft on a route for which it has been found
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by a DOT order to be providing essential air service, and
- has a firm contract with a hush kit manufacturer which, before January 1,
1985 applied for an STC; is continuing active efforts to obtain the STC;
and such contract is supported by a non- refundable deposit of at least
$75,000, fof the installation of hush kits on each of its aircraft at the
earliest available date, and
- acquired the aircraft for which it seeks an exemption prior to January 1,
1985.
III. Failure of Hush Kit Manufacturers to Obtain STC.
Some hush kit suppliers which applied for STC's prior to January 1, 1985 may be
unable, for various reasons, to obtain the STC that is required before their
hush kit can be used on aircraft engaged in air commerce. To this end,
included among the conditions and limitations contained in each exemption will
be a provision which permits exemption holders to obtain substitute contracts
if their hush kit suppliers are unable to obtain an STC.
Therefore, the FAA will, without affecting the validity of the exemption, allow
exemptions which are based on hush kit contracts that meet the good faith
compliance criterion, to obtain substitute contracts if the initial hush kit
supplier fails to obtain an STC by September 30, 1985. Those substitute
contracts must be with suppliers which have obtained STCs by September 30,
1985, be supported by a non - refundable deposit of at least $75,000, and be for
the earliest possible delivery date. If the hush kits from the substitute
supplier cannot be installed until after December 31, 1985, these exemption
holders will be able to continue operations under their exemptions until the
earliest available installation date after December 31, 1985. September 30,
1985, has been selected as the date by which the supplier must have received
its STC because that date represents the latest date by which a hush kit
purchaser may reasonably expect to obtain delivery positions for its aircraft
by December 31, 1985. In addition, based on the information the FAA now has
concerning the status of hush kit suppliers which applied for STC's before
January 1, 1985, September 30, 1985, is the latest date in calendar year 1985
that a hush kit supplier g can
to have
obtained its a
reasonable expectation being
that year.
IV. General Exemption Provisions.
All exemptions granted by the FAA will include, but not be limited to, the
following conditions and limitations:
- Operations allowed under the exemption will be the same number as in the
comparable period in 1984,1/ or in the case of essential air service, the
1/ Carriers that engaged in exempted international flights may, in addition,
conduct the same number of non-revenue of
the eling
that they did last year, at
operation of section 124 of Pub. L. 98 -473 (the Hawkins - Chiles amendment),
pursuant to which exempt carriers en route to Miami are allowed the same number
of refueling stops at Bangor that they had in the previous year.
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same number of operations for the essential route which was authorized in a
previous grant of exemption or, in cases of further DOT orders designating
EAS routes, the number of operations needed to meet the EAS requirements.
- All operations except those to Miami International Airport (MIA) and
Bangor International Airport (BIA) will be limited to the hours between
0700 and 2200 local time at all airports. The exception for MIA and BIA is
based on the Congressional intent evinced in Pub. L. 98 -473.
- The FAA will not grant an exemption beyond December 31, 1985, except
where the exemption holder has a firm hush kit delivery position after that
date, and the hush kit supplier has obtained its STC by September 30,
1985. 2/
- Certain reporting requirements will be required by the FAA to monitor the
compliance with the terms of the exemption.
Application of Criteria.
Smaller carrier. The FAA finds that the petitioner meets this criterion
because, on January 1, 1985 it operated nine or fewer transport category
turbojet aircraft.
Good faith compliance. The FAA finds that petitioner meets this criterion
because it has a firm contract, entered into on or before March 29, 1985, for
hush kits for the aircraft for which this exemption will be granted. The
contract is supported by a non - refundable deposit of at least $75,000. The hush
kit supplier applied to the FAA for a supplemental type certificate (STC) for
that product before January 1, 1985.
2/ Section 124 of Public Law 98 -473 required the Secretary to grant exemptions
from the noise rule to certain petitioners for operations to Miami or Bangor
International Airports. As mandated by that law, the FAA issued 25 exemptions
from Section 91.303 of the Federal Aviation Regulations. Section 124(e)
specifically provided that those exemptions shall expire no later than December
31, 1985,
"except that, if the Secretary determines that equipment to insure
compliance with the provisions of Public Law 96 -193 which has been
certified by the Department for that purpose will not be available to the
holder of the exemption by that date, the Secretary may extend such
exemption for such period as the Secretary determines is necessary to
insure compliance with such provisions."
Accordingly, in evaluating whether a particular exemption granted under
authority of Pub. L. 98 -473 should be extended beyond December 31, 1985, the
FAA will consider whether the exemption holder has a firm hush kit delivery
position after that date and whether the hush kit supplier has obtained the
necessary certification from the FAA. This provision assures that operators
acquire hush kits for their noncomplying aircraft at the earliest possible time
and that hush kit suppliers diligently work toward acquiring the STC.
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Needed technology is delayed or unavailable. The FAA finds that petitioner
meets this criterion because no hush kits for petitioner's aircraft are
commercially available.
Financial havoc. The FAA finds that petitioner meets this criterion because
more than twenty percent of petitioner's total operations during the same
period in 1984 for which it seeks this exemption would be prohibited by the
noise rule absent an exemption.
Valuable airline service. The FAA finds that petitioner meets this criterion
in that it operated aircraft in charter or scheduled air transportation before
January 1, 1985, and continues to do so.
In view of the foregoing matters, the FAA concludes that the petitioner has
demonstrated that the public interest requires it be granted an exemption from
section 91.303. Therefore, under the authority of sections 313(a), 601(c) and
611(b) of the Federal Aviation Act of 1958, as amended, which has been
delegated to me by the Administrator (14 CFR section 11.53), the petition of
Lineas Aereas del Caribe, S. A., for exemption from section 91.303 of the
Federal Aviation Regulations is hereby granted, subject to the following
conditions and limitations:
Conditions and Limitations.
1. This exemption shall apply only to the DC -8 -54F aircraft having the
following registration and serial number: HK -2632, 45768.
2. A copy of this Grant of Exemption shall be carried on board the above
aircraft at all times.
3. This exemption is valid only for the operation of the above aircraft within
the United States during the period between the date of this exemption and
December 31, 1985, the date by which petitioner states that hush kits will have
been installed on its aircraft.
4. This exemption is valid only for the number of operations within the U. S.
that petitioner performed between April 1 and December 31, 1984.
5. With respect to the aircraft identified in paragraph 1, above, this
exemption is valid only while the "SAI DC -8 Hush Kit Modification Contract"
dated January 16, 1985, between Snow Aviation International, Inc. (SAI) and
petitioner remains in effect, except that, should SAI fail to receive FAA
certification for its hush kits by September 30, 1985, the exemption for the
identified aircraft shall remain in effect for a period of sixty days after
such failure occurs. If, during the sixty day period, petitioner obtains and
submits to FAA a firm substitute contract, supported by a non - refundable
deposit of at least $75,000, for installation of hush kits by a hush kit
supplier which has obtained its STC by September 30, 1985, then the exemption
granted herein shall remain in effect until installation of those hush kits on
petitioner's aircraft. In all other cases, this exemption terminates on
December 31, 1985.
9,
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6. This exemption is valid only while petitioner retains line position
number 16 for the hush kits manufactured by SAI.
7. This exemption is valid only as long as petitioner remains the operator
of the aircraft described in paragraph 1, above, and shall terminate
immediately if petitioner sells, or otherwise disposes of said aircraft while
this exemption is in effect.
8. During the period this exemption remains in effect, petitioner shall
submit the following reports by an authorized official of the petitioner
certifying that they are true and complete (under penalty of 18 USC 1001):
(1) not later than May 10, 1985, a report which contains at least the
following information: the frequency of operations conducted by the
petitioner using noncomplying aircraft at the airports used by petitioner for
noncomplying aircraft during each of the twelve months preceding the date of
issuance of this exemption; and (2) not later than the tenth day of each
month commencing in May, 1985, reports containing at least the following
information: (a) the frequency of operations conducted by the petitioner at
each airport used by the petitioner for noncomplying aircraft during the
preceding calendar month; (b) the registration and serial numbers and the
number of operations of each . noncomplying aircraft used at the airports
reported under (a), above, during such month; (c) the status of petitioner's
contract with its hush kit supplier, including particularly whether any
change has occurred since the last monthly report in the expected date of
installation of the hush kits and, if so, exact details of such change.
9. Except at Miami and Bangor International Airports, this exemption is
valid only for landings or takeoffs of the above aircraft between the hours
of 0700 and 2200 local time.
Except as provided above, this exemption expires on December 31, 1985, the
scheduled date for delivery of the hush kits.
Issued at Washington, D. C. on APR 2 6 1985
esler
•irector of Environment and Energy