Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  18-000877

 

MEETING DATE:

09/11/18

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

2

SUBMITTING Agency/Department:

John Wayne Airport   (Approved)

Department contact person(s):

Barry A. Rondinella (949)252-5183 

 

 

Eric Freed (949)252-5043

 

 

Subject:  John Wayne Airport Capacity Allocations for 2019 Plan Year

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

                    Concur

No Legal Objection

Consent Calendar

 

 

3 Votes Board Majority

 

 

 

    Budgeted: N/A

Current Year Cost:     N/A

Annual Cost:               N/A

 

 

 

    Staffing Impact:

No

# of Positions:             

Sole Source:                 N/A

    Current Fiscal Year Revenue: N/A

  Funding Source:        N/A

County Audit in last 3 years: No

 

 

    Prior Board Action:                   10/17/2017 #6, 10/25/2016 #12, 10/27/2015 #8, 10/06/2015 #23

 

RECOMMENDED ACTION(S):

 

 

1.

Find that Final Environmental Impact Report 617, previously certified by the Board of Supervisors on September 30, 2014, reflects the independent judgment of the County of Orange and satisfies the requirements of California Environmental Quality Act for the John Wayne Airport Capacity Allocations for the 2019 Plan Year, which is a necessarily included element contemplated as part of the whole of the action.

 

 

a.

The circumstances of the project are substantially the same as described in Environmental Impact Report 617, which adequately addressed the effects of the proposed project.  No substantial changes have been made in the project or in the circumstances under which the project is being undertaken.  Furthermore, no new information of substantial importance to the project which was not known or could not have been known when the previous Environmental Impact Report 617 was adopted has become known and no further environmental review is required.

 

 

b.

Environmental Impact Report 617 is adequate to satisfy the requirements of California Environmental Quality Act for the John Wayne Airport Capacity Allocations for Plan Year 2019.

 

 

c.

All mitigation measures are fully enforceable pursuant to California Environmental Quality Act (Public Resources Code) Section 21081.6(b) and have either been adopted as conditions, incorporated as part of the project design, or included in the procedures of project implementation.

 

2.

Authorize the Airport Director to allocate Class A and Class E Average Daily Departures and Seat Capacity to Qualified Commercial Passenger and Commercial Cargo Air Carriers and Passenger Capacity to Qualified Commuter Passenger Air Carriers for the 2019 Plan Year (January 1, 2019, through December 31, 2019), as reflected on Attachments A and B, and in a manner consistent with the terms of the Phase 2 Commercial Airline Access Plan and Regulation.

 

3.

Authorize the Airport Director to withdraw Seat Capacity during the 2019 Plan Year if it becomes necessary to ensure compliance with the 10.8 million annual passenger limit at John Wayne Airport, consistent with the requirements set forth in Section 6 of the Phase 2 Commercial Airline Access Plan and Regulation.

 

4.

Authorize the Airport Director to allocate or reallocate any additional Regular or Supplemental Average Daily Departures and any necessary associated Seat Capacity, which may become available during the 2019 Plan Year in a manner consistent with the terms of the Phase 2 Commercial Airline Access Plan and Regulation.

 

5.

Authorize the Airport Director to allocate additional Supplemental Seat Capacity to Qualified Commercial Passenger Air Carriers during the 2019 Plan Year if he determines that such allocations can be made without jeopardy to the 10.8 million annual passenger limitation of the Phase 2 Commercial Airline Access Plan and Regulation.

 

6.

Authorize the Airport Director to waive Section 5.1.1 of the Phase 2 Commercial Airline Access Plan and Regulation and allocate up to 30 Remain Overnight positions for Commercial Air Carrier use during the 2019 Plan Year, pursuant to Section 5.1.1, as reflected on Attachment A, and provide authority to withdraw the additional three Remain Overnight positions for safety or operational purposes, as required.

 

7.

Authorize the Airport Director to allocate additional Supplemental Passenger Capacity and Remain Overnight positions to Qualified Commuter Carriers during the 2019 Plan Year if he determines that such allocations can be made without jeopardy to the 10.8 million annual passenger limitation.

 

8.

Find that the County retains and reaffirms its sole and exclusive discretion to require mandatory withdrawals of operational capacity in any form if the County determines such action to be appropriate to ensure continued compliance with the 10.8 million annual passenger limitation or for any other reason, consistent with the requirements set forth in Section 6 of the Phase 2 Commercial Airline Access Plan and Regulation.

 

 

 

 

SUMMARY:

 

Approval of the proposed allocation of Regulated Average Daily Departures, Seat Capacity, Remain Overnight Capacity and Passenger Capacity to scheduled Commercial Passenger Air Carriers, Commercial Cargo Carriers and Commuter Passenger Air Carriers will provide John Wayne Airport with the necessary authority to ensure compliance with the County's Phase 2 Commercial Airline Access Plan and Regulation for the 2019 Plan Year (January 1, 2019, through December 31, 2019).

 

 

 

BACKGROUND INFORMATION:

 

County regulation of a maximum permissible number of Average Daily Departures (ADDs) is one of two principal restraints imposed on John Wayne Airport (JWA) operations by the County to control aircraft noise in residential areas around JWA.  Limitation on the maximum permissible number of ADDs has been an element of the County’s regulation of JWA since 1972.   

 

There are presently two defined classes of ADDs in the Phase 2 Commercial Airline Access Plan and Regulation (Phase 2 Access Plan), Class A and Class E.  The class of aircraft permitted the highest relative single event noise level is Class A.  The quietest class of aircraft is Class E.  The County allocates up to 14 permanent Class E ADDs, however the absolute number of maximum permissible Class E Authorized Departures is not directly regulated by the County, instead the maximum permissible number of Class E Authorized Departures is limited by the current million annual passengers (MAP) limitation of 10.8 MAP under the 1985 Settlement Agreement, as amended.

 

The Phase 2 Access Plan identifies both “Regular” and “Supplemental” capacity allocations.  The principal difference is that Regular ADDs are those, which are allocated on a long-term basis, while Supplemental ADDs are allocated on a short-term basis, usually for one Plan Year.  The Regular ADDs form the foundation for commercial operations at JWA, while the Supplemental ADDs are allocated each Plan Year to maximize operational capacity while maintaining sufficient flexibility to ensure that total passenger service level remains within the MAP limitation.

 

The Board of Supervisors (Board) previously approved capacity allocations on October 17, 2017, October 25, 2016, October 27, 2015, and October 6, 2015.  In connection with the annual process for allocating operating capacity for the 2019 Plan Year, and consistent with past Plan Year allocations, JWA requested that each interested incumbent and new entrant Air Carrier and Commuter Carrier submit its capacity requests for the 2019 Plan Year.  JWA staff has carefully reviewed those requests and all related information. This report contains JWA's specific allocation recommendations for the 2019 Plan Year and a discussion of the basis for those recommendations. 

 

The recommendations provided in this report achieve several objectives: (1) accommodate, to the extent possible, the ADD, Seat Capacity, Remain Overnight (RON) and Passenger Capacity requests received from the incumbent Air Carriers and Commuter Carriers; (2) provide internal County controls in order to ensure compliance with the 10.8 MAP limitation and the annual cap on numbers of Regulated ADDs; and (3) meet all other legal and regulatory obligations.

 

Attachment A identifies the specific ADD, Seat Capacity and RON allocations for Qualified Air Carriers recommended by JWA.  The recommended Passenger Capacity and RON allocations to Qualified Commuter Carriers are set forth in Attachment B.

 

New Entrant Allocations

The Phase 2 Access Plan provides that potential new entrant Air Carriers and Commuter Carriers have priority on the Air Carrier and Commuter Carrier waiting list based upon the dates when the County first received their written requests to commence service at JWA. Although JWA has, both in recent Plan Years and historically, been able to provide new entrant opportunities for Air Carriers on the waiting list, based upon the allocation requests of the incumbent Air Carriers for the 2019 Plan Year, the unfulfilled allocation requests for the upcoming Plan Year, and the limited County-controlled capacity that is currently available for allocation to new entrants, JWA is not recommending a capacity allocation to a new entrant Air Carrier for the 2019 Plan Year. 

 

Associated Operating Group Provisions

The Phase 2 Access Plan allows Air Carriers and Commuter Carriers operating at JWA to declare annually the formation of an Associated Operating Group (AOG) for purposes of conducting operations at JWA.  AOGs are typically formed by Air Carriers interested in sharing capacity among AOG members.  Alaska/Horizon and Delta/Compass have requested to continue to operate as members of two separate AOGs during the 2019 Plan Year. 

 

The Access Plan includes a number of regulations, which apply to the allocation of capacity to, and operation of, AOGs.  These provisions require that Air Carriers and Commuter Carriers conducting operations as an AOG be treated as a single carrier with respect to the allocation of capacity.  The historical purpose for these provisions is to ensure against a group of Affiliated Carriers gaining an advantage over competitors solely because of the way in which they have chosen to organize themselves for business purposes. 

 

The recommended allocation of capacity to these Air Carriers reflects AOG provisions of the Phase 2 Access Plan.  The AOG allocations are set forth in Attachment A.

 

Allocation of Permanent Class E ADDs

The Access Plan allows an allocation of a total of 14 permanent Class E ADDs by means of a trade-out voluntarily undertaken by the Air Carriers.  Specifically, one Class A ADD can be traded for two new permanent Class E ADDs.  Southwest Airlines currently operates all 14 of these permanent Class E ADDs through December 31, 2020, as set forth in Attachment A. 

 

Allocation of Class A ADDs Currently Under Direct County Control

As a result of Air Carrier operational decisions and changes in the airline industry that have occurred over the past few years, the County currently has within its control three Class A ADDs.  In recent Plan Years, JWA has requested authorization to allocate County-controlled Class A ADD capacity on a supplemental basis for a period of one Plan Year. However, because of the amount of Seat Capacity requested for use during the 2019 Plan Year, including the maximum presumptive seat capacity that has been requested and allocated for use during the 2019 Plan Year, and in order to maintain JWA’s MAP limitation, JWA is only able to allocate one additional County-controlled Class A ADD to the Commercial Passenger Air Carriers on a supplemental basis for use during the 2019 Plan Year. Based on the reallocation priority list, this County-controlled Class A ADD will be allocated to United for use during the 2019 Plan Year. Two County-controlled Class A ADDs will remain in County control and JWA is requesting the ability to allocate this capacity on a supplemental short-term basis in the event JWA determines that it can allocate this capacity on a short-term basis and still maintain JWA’s MAP limitation.  

 

Allocation of Class A Departures for Commercial Cargo Operations                 

The Phase 2 Access Plan provides the County with the ability to allocate up to four Commercial Cargo Class A ADDs and the discretion to allocate up to two of these four Commercial Cargo Class A ADDs to passenger carriers when not needed for cargo operations at JWA.  This capacity, however, may only be allocated on a supplemental basis for one Plan Year in any year where those ADDs have not been requested by Commercial Cargo Carriers.

 

Neither FedEx nor UPS has requested any additional operating capacity beyond the two Cargo Class A ADDs, one each, that have been allocated to them through December 31, 2020.  Although JWA has, both in recent Plan Years and historically, been able to provide Cargo Class A ADD capacity for incumbent Air Carriers on a supplemental basis, because of the amount of Seat Capacity requested for use during the 2019 Plan Year, including the maximum presumptive Seat Capacity that has been requested and allocated for use during the 2019 Plan Year, and in order to maintain JWA’s MAP limitation, JWA is not able to allocate the two Cargo Class A ADD capacity for use on a supplemental basis during the 2019 Plan Year.  These two Cargo Class A ADDs will remain in County control and JWA is requesting the ability to allocate this capacity on a supplemental short-term basis in the event JWA determines that it can allocate this capacity on a short-term basis during the 2019 Plan Year and still maintain JWA’s MAP limitation. 

 

Seat Capacity Allocations

A total of 15,601,041 seats were requested by the Air Carriers as part of the 2019 Plan Year allocation process. JWA is requesting authorization to allocate a total of 12,609,763 seats for the 2019 Plan Year.  Historically, the number of seats allocated exceeds the 10.8 MAP limitations because Air Carrier load factors (seats filled vs. seats available) is less than 100%. 

 

A total of 10,606,301 seats are recommended for allocation in support of Class A operations.  A total of 2,003,462 seats are recommended for allocation in support of Class E operations. The recommended Seat Capacity allocation would accommodate all of the seats requested for use during the 2019 Plan Year with the exception of 2,407,868 seats requested by Southwest Airlines, 248,414 seats requested by Delta Air Lines and 334,996 seats requested by Alaska. The specific Seat Capacity allocation recommendations for the Air Carriers are reflected in Attachment A. 

 

Section 6 of the Phase 2 Access Plan provides provisions, which permit the County to withdraw operational capacity at such times, on such conditions, and for such reasons as the County, in its sole and exclusive discretion, determines are appropriate to ensure that the MAP limitation is not exceeded during any Plan Year, or for any other reason. Whenever the Airport Director determines that there is a substantial risk that Regularly Scheduled Commercial Users operating at JWA will exceed the MAP limitation during any Plan Year for any reason other than the violation of the Phase 2 Access Plan by any specific Air Carrier or Commuter Carrier, the Airport Director will advise all Air Carriers of recommendations for capacity withdrawals.  In formulating and presenting recommendations for capacity withdrawals, the Airport Director will attempt to formulate recommendations which, to the extent practical and feasible:  (i) maintain an appropriate level of equity and fairness among all approved users of JWA; (ii) will best serve the interests of the air traveling public using JWA; and (iii) which are consistent with the policies and objectives of the County in its management and operation of JWA.

 

Although there is no capacity withdrawal priority among the operational categories set forth below, and as further described in Section 6 of the Phase 2 Access Plan, in many circumstances, JWA presently expects that it generally will prefer and recommend capacity withdrawals, to the extent necessary and required, in the following order: (i) Seat Blocks; (ii) Supplemental Authorized Departures; (iii) Supplemental Passenger Capacity; (iv) Regulated ADDs; and then (v) Passenger Capacity. However, if capacity withdrawals are required by the County, any withdrawal recommendations will be structured in a manner that best serves the interests of the County, local communities, and the air traveling public; and the withdrawal will be structured in light of then-existing circumstances, facts and commercial operation patterns at JWA.    

 

Air Carrier RON Allocations

The allocation of RON parking positions to the Air Carriers and Commuter Carriers has long been a commercially and operationally significant issue to the carriers.  The limited physical facilities available at JWA for overnight parking of Air Carrier and Commuter Carrier aircraft requires that the County, in the interests of safe and efficient operations at JWA, and in support of the appropriate mix of uses of JWA, limit the number of Air Carrier and Commuter Carrier RON positions, control the location and use of Air Carrier and Commuter Carrier RON positions, and place certain other restrictions on RON activity at JWA.

 

A total of 28 RON positions were requested for allocation for the 2019 Plan Year.  Although the Phase 2 Access Plan provides for an allocation of only 27 Air Carrier RONs, JWA is requesting authority from the Board to waive the Section 5.1.1 RON limit for the 2019 Plan Year and requesting that the Board provide JWA with the authorization to allocate up to 30 RONs for use during the 2019 Plan Year in accordance with the Section 5.3 of the Phase 2 Access Plan and consistent with past Plan Year allocation requests. The recommended RON allocations (gate and apron) for Air Carriers fulfill all 28 of the gate and apron RON position requests for the 2019 Plan Year and are reflected in the last two columns of Attachment A.

 

If JWA determines at any time during the 2019 Plan Year that the allocation of up to 30 RON positions will jeopardize, in any manner, the safe and efficient operations at JWA or will place undue restrictions on RON activity at JWA, JWA requests authorization to withdraw any RON capacity over the 27 RON positions that the Phase 2 Access Plan currently authorizes for allocation. 

 

Passenger Capacity Allocations to Commuter Carriers

Two Qualified Commuter Air Carriers, SkyWest Airlines (United Express) and Delux (JetSuiteX), have requested Passenger Capacity allocations for the 2019 Plan Year.  SkyWest has requested an allocation of 47,210 passengers.  Delux has requested an allocation of 95,070 passengers.

 

Section 3.5.1 of the Phase 2 Access Plan creates a priority for the allocation of 400,000 Authorized Passengers to Commuter Carriers in each Plan Year. The incumbent Commuter Carriers have requested an allocation of passengers below the 400,000 passengers that have been “prioritized” for use by Commuter Carriers; therefore, JWA recommends that 47,210 passengers be allocated to SkyWest and 95,070 passengers be allocated to Delux for use during the 2019 Plan Year, consistent with the Commuter Carrier’s request.  Therefore, JWA recommends that a total of 142,280 passengers be allocated for Commuter Carrier use during the 2019 Plan Year.  This proposed allocation of Commuter Carrier capacity is reflected in Attachment B.

 

JWA also requests authority to make supplemental allocations of additional Authorized Passengers during the 2019 Plan Year if additional Commuter Carrier capacity requests are received and if actual operations during the Plan Year indicate that supplemental capacity allocations would not jeopardize the 10.8 MAP limitations. 

 

RON Allocations to Commuter Carriers

In addition to its Passenger Capacity request, Delux has requested an allocation of two RON positions for the 2019 Plan Year. Consistent with this request, JWA requests authority to allocate two RON positions to Delux for the 2019 Plan Year.

 

Based on the above, JWA seeks Board approval of the proposed Capacity Allocations for the 2019 Plan Year.

 

Compliance with CEQA: This project is a necessarily included element of the project considered in Final EIR No. 617, certified by the Board of Supervisors on September 30, 2014, for the JWA Settlement Agreement Amendment, which adequately addressed the effects of the proposed project. No substantial changes have been made in the project, no substantial changes have occurred in the circumstances under which the project is being undertaken, and no new information of substantial importance to the project which was not known or could not have been known when the Final EIR No. 617 was certified has become known; therefore, no further environmental review is required.

 

 

 

 

FINANCIAL IMPACT:

 

N/A

 

 

 

STAFFING IMPACT:

 

N/A

 

 

 

ATTACHMENT(S):

 

Attachment A - Plan Year 2019 Commercial Carrier and Commercial Cargo Carrier Capacity Allocation
Attachment B - Plan Year 2019 Commuter Carrier Capacity Allocation