Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  06-000041

 

MEETING DATE:

02/07/06

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

John Wayne Airport   (Approved)

Department contact person(s):

Alan L. Murphy, (949) 252-5183 

 

 

 

 

 

Subject:  JWA Capacity Allocations for 2006-2007 Plan Year

 

      ceo Concur

County Counsel Review

Clerk of the Board

Concur

Approval Not Required

Discussion

 

 

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

 

    Prior Board Action: N/A

 

RECOMMENDED ACTION(S)

 

 

A.    Air Carrier Allocations and Related Actions

 

1.          Find that: (i) Final EIR 582 and Addendum 582-1, as revised by Final Supplemental EIR 582, previously certified on June 25, 2002, accepted on December 10, 2002, and certified on October 19, 2004, respectively, have been examined in relation to the proposed project; (ii) the proposed project's environmental effects were fully analyzed and disclosed in theseCEQA documents and the proposed project would not have any environmental effects beyond those analyzed and disclosed in these environmental documents; (iii) no further CEQA compliance is required for the proposed project. 

 

            2.         Authorize the Airport Director to make the Class A Average Daily Departures ("ADDs")  and Seat Capacity allocations to Qualified Commercial Passenger and All-Cargo Air Carriers, as reflected on Exhibit A,  in a manner consistent with the terms of the Phase 2 Commercial Airline Access Plan and Regulation ("Phase 2 Access Plan" or "Access Plan"),  and contingent upon the Air Carriers entering into a new airline lease with the County, acceptable to the Airport Director and approved by official action of the Board of Supervisors.  The Seat Capacity allocations above the presumptive Seat Capacity provided for by the Access Plan are the first allocations to be withdrawn if Seat Capacity withdrawals are required during the 2006-07 Plan Year.

 

            3.         Authorize the Airport Director to reallocate any additional Regular or Supplemental Departures (and any necessary associated Seat Capacity) which may become available during the 2006-07 Plan Year in a manner consistent with the terms of the Access Plan, and the related reallocation priority lists and County practices and procedures.

 

           4.          Authorize the Airport Director to allocate up to thirty (30) Remain Overnight ("RON") positions for Commercial Air Carrier use during the 2006-07 Plan Year, as reflected on Exhibit A. The RON allocations above the twenty-seven (27) RON positions provided for by the Access Plan are the first RON capacity to be withdrawn if RON withdrawals are required during the 2006-07 Plan Year.

 

B. Commuter Carrier Allocations and Related Actions

 

            5.         Authorize the Airport Director to make the allocations of Passenger Capacity and RONs to the Qualified Commuter Carriers, as reflected on Exhibit B, contingent upon the Commuter Carriers entering into a new airline lease with the County, acceptable to the Airport Director and approved by official action of the Board of Supervisors.

 

                    6.           Authorize the Airport Director to make additional supplemental allocations   of Passenger Capacity to Qualified Commuter Carriers during the 2006-07 Plan Year, if, in his discretion, he determines that such allocations can be made without jeopardy to the 10.3 million annual passenger ("MAP") Limitation of the Phase 2 Access Plan.

 

 

 

SUMMARY:

 

John Wayne Airport ("JWA" or "Airport") requests that the Board of Supervisors approve allocation of Regulated Class A ADDs, Seat Capacity, RON Capacity and Passenger Capacity to scheduled Commercial Passenger Carriers, Commercial Cargo Carriers and Commuter Carriers under the County's Phase 2 Access Plan for the 2006-2007 Plan Year (April 1, 2006 through March 31, 2007), and other related actions.

 

 

BACKGROUND INFORMATION:

 

The purpose of this Agenda Staff Report ("ASR" or "staff report") is to present the recommendations of JWA with respect to the allocation of Regulated ADDs, Seat Capacity, RON Capacity, and Passenger Capacity to scheduled Commercial Passenger Carriers, Commercial Cargo Carriers, and Commuter Carriers under the County's Phase 2 Access Plan for the Plan Year which begins on April 1, 2006, and ends on March 31, 2007 (the "2006-07 Plan Year"). 

 

The Airport is recommending that the capacity allocation be made subject to receipt of new Air Carrier leases approved and executed by official action of the Board. To the extent one or more Air Carrier(s) do not execute a new lease with the County prior to April 1, 2006, staff intends to return to the Board with a recommendation for redistribution of the remaining capacity.

 

In connection with the process for allocating operating capacity for the 2006-07 Plan Year, JWA has requested that each interested incumbent Air Carrier submit its capacity requests.   The Airport Director and staff have carefully reviewed those requests and all related information. Based upon that review, this report contains JWA's specific allocation recommendations for the 2006-07 Plan Year and a discussion of the basis for those recommendations.

 

The recommended actions provided in this report achieve several objectives as follows: (1) accommodate, to the maximum extent possible, ADD, Seat Capacity, 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 JWA annual passenger service level cap of 10.3 MAP; (3) provide internal County controls in order to ensure compliance with the annual cap on numbers of Regulated Departures; and (4) meet all other legal and regulatory obligations.

 

Exhibit A to this report 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 Exhibit B to this report.  The recommended allocations follow the provisions of the Access Plan, as amended.

 

The recommended allocations accommodate all of the requested capacity requests except for: (i) Southwest Airlines, which may receive less Class E capacity (554,530 seats) than it requested for use during the 2006-07 Plan Year; (ii) United Airlines, which may receive one (1) less loading bridge RON position than it requested for use during the 2006-07 Plan Year; and (iii) American Eagle Airlines, which may receive less Commuter Carrier Passenger capacity than it requested for use during the 2006-07 Plan Year.  These situations are discussed in more detail below. 

 

ALLOCATION ISSUES AND RECOMMENDATIONS:

 

1.0    Associated Operating Group and Affiliate Policy Provisions

 

On October 4, 1994, the Orange County Board of Supervisors approved a series of amendments to the Affiliate policy provisions of the Phase 2 Access Plan.  The amendments included a number of regulations which apply to the formation of, allocation of capacity to, and operation of Associated Operating Groups ("AOGs").  Alaska Airlines and Northwest Airlines will continue to operate as members of an AOG during the 2006-07 Plan Year.  In addition, America West Airlines, Continental Airlines and Mesa Airlines will continue to operate as members of an AOG during the 2006-07 Plan Year.

 

2.0  Reallocation of Class A ADDs Currently Under Direct County Control and

       Supplemental Class A ADD Allocations

 

The County currently has within its control nine (9) Class A ADDs.  In recent Plan Years, the Airport Director has requested authorization to allocate County-controlled Class A ADD capacity on a supplemental basis for a period of one (1) Plan Year.  In light of the number of Regulated ADDs currently within County control, the Airport Director is requesting authorization to allocate five (5) of the nine (9) Class A ADDs that are currently within its control for a term effective April 1, 2006, through March 31, 2011, rather on a supplemental Plan Year basis, as it has done over the past several years.  These five (5) Class A ADDs would be allocated to the Alaska Airlines/Northwest Airlines AOG, Aloha Airlines, the America West Airlines/Continental Airlines/Mesa Airlines AOG, Southwest Airlines, and United Airlines, as reflected in Exhibit A to this staff report. 

 

The County would continue to maintain control of four (4) Class A ADDs and would continue to allocate these ADDs on a supplemental Plan Year basis (April 1, 2006, through March 31, 2007), as set forth in Exhibit A to this staff report and consistent with the reallocation priority list.  These Class A ADDs will return to direct County control for possible reallocation to a new entrant Commercial Air Carrier or to an incumbent Commercial Air Carrier, effective April 1, 2007.  In addition, Delta Air Lines temporarily returned one (1) Class A ADD to the County for possible reallocation in connection with the 2006-07 allocation process.  The Airport Director is requesting authorization to allocate this one (1) Class A ADD on a supplemental basis through March 31, 2007.  The supplemental Class A ADDs would be allocated to the Alaska Airlines/Northwest Airlines AOG, Aloha Airlines, the America West Airlines/Continental Airlines/Mesa Airlines AOG, Southwest Airlines, and United Airlines on a supplemental one (1) year basis, as reflected in Exhibit A to this staff report.  

 

3.0    Allocation of Class A Departures for All-Cargo Operations

 

During the 2003 allocation process of the new capacity provided by the Settlement Amendment, the County provided the Airport with the discretion to allocate up to two (2) all-cargo Class A ADDs to Passenger Commercial Air Carriers when not needed for all-cargo operations at the Airport.  This capacity, however, may only be allocated on a supplemental basis for one (1) Plan Year in any year where those ADDs have not been requested by Commercial Cargo Air Carriers.

 

The County has not been informed of any interest by Commercial Cargo Air Carriers for any additional operating capacity beyond the two (2) cargo Class A ADDs, one each, that have been allocated to FedEx and UPS through December 31, 2015.  Therefore, the Airport Director is requesting authorization to allocate the two (2) additional cargo Class A ADDs currently available to the next two (2) Air Carriers on the reallocation priority list.  These two (2) cargo Class A ADDs would, therefore, be provided to the America West Airlines/Continental Airlines/Mesa Airlines AOG and Southwest Airlines on a supplemental one (1) year basis, as reflected in Exhibit A to this staff report.  These supplemental cargo Class A ADDs, however, would be subject to withdrawal, if necessary, in order to maintain the MAP limits required at the Airport. 

           

4.0  Presumed Seat Capacity and Supplemental Seat Capacity (Class E) Allocations

A total of 13,326,294 seats were requested as part of the 2006-07 Plan Year allocation process. The Airport Director is requesting authorization to allocate a total of 12,771,764 seats in response to Air Carrier capacity requests for the 2006-07 Plan Year.

A portion of this Seat Capacity is allocated in connection with the operation of Class A ADDs and permanent Class E ADDs by the Air Carriers. The remainder of the Seat Capacity, 2,752,532 seats, is allocated via the section of the Access Plan which creates Class E operations capacity for Air Carriers. The specific Seat Capacity allocation recommendations by Air Carriers are reflected in Exhibit A to this staff report.  As indicated in Exhibit A, this Seat Capacity allocation would accommodate all of the seats requested for use during the 2006-07 Plan Year, with the exception of Southwest Airlines, which would be on the waiting list for 554,530 seats.  The essential policy objective of this recommendation is to provide the maximum feasible operational capacity to the air traveling public within the limitations defined by existing Board policy. 

The Seat Capacity allocation requested for the 2006-07 Plan Year is the same as the Seat Capacity allocation for the current 2005-06 Plan Year.  At that level, the Airport is expected to complete the current 2005-06 Plan Year with a passenger level of approximately 10,038,690, based upon an expected actual average Air Carrier load factor of approximately 76.1%. 

If the County allocates 12,771,764 seats for the 2006-07 Plan Year, as recommended, the Airport is expected to complete the 2006-07 Plan Year with passengers-served levels similar to that for the 2005-06 Plan Year (See Footnote Number 1 Below). The Air Carrier load factors during the past eight (8) years have ranged from 60.1% to 73.5%.  Because load factors have continued to increase generally at JWA, it appears appropriate to accommodate most, but not all, of the Supplemental Seat Capacity requests, in order to provide additional air travel opportunities to the public without jeopardizing the 10.3 MAP limit of the Access Plan.  Supplemental Seat (Class E) capacity is one of the "safety valves" for first withdrawal of capacity, if necessary, to allow the County to match operations with the MAP limits.

________________________________

 

1. At the allocation level provided for in connection with the 2005-06 Plan Year process, the Airport would complete the 2005-06 Plan Year at the regulatory limit of 10.3  MAP only if the Air Carrier load factors at JWA exceeded 80% during the 2005-06 Plan Year and the Air Carrier operations utilized 97% of their Seat Capacity and the Commuter Carriers utilized an expected 480,903 passengers.

 

5.0  Air Carrier RON Allocation

 

The allocation of opportunities to the Commercial Air Carriers for aircraft to RON at JWA has long been a commercially and operationally significant issue to the Air Carriers at JWA.  The limited physical facilities available at JWA for over-night 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 the Airport, 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 the Airport. During the 1999-00 through 2005-06 Plan Years, the Board approved allocation of, and the incumbent Air Carriers utilized, a total of thirty (30) RON positions.

 

A total of thirty (30) RON positions were requested for allocation for the 2006-07 Plan Year.  Although the Access Plan provides for an allocation of only twenty-seven (27) Air Carrier RONs, the Airport Director is requesting authority from the Board to again waive the Section 5.1.1 RON limit for the 2006-07 Plan Year and is requesting that the Board provide the Airport Director with the authorization to allocate up to a maximum of thirty (30) RONs for use during the 2006-07 Plan Year (April 1, 2006, through March 31, 2007) in accordance with the Section 5.3 allocation provisions of the Access Plan. The recommended RON allocations (loading bridge and apron) for Air Carriers meet all of the RON requests for the 2006-07 Plan Year and are reflected in the last two (2) columns of Exhibit A.

 

As in past years, in order to accommodate thirty (30) RON positions, the movement of up to three (3) of the Air Carrier aircraft would be "dependent" on, rather than completely "independent" from, the movement of other Air Carrier aircraft. If the Airport Director determines at any time during the 2006-07 Plan Year that the allocation of thirty (30) RON positions will jeopardize, in any manner, the safe and efficient operations at JWA or will place undue restrictions on RON activity at the Airport, the Airport Director requests authorization to withdraw any RON capacity over the twenty-seven (27) RON positions that the Access Plan currently authorizes for allocation. 

 

Because the RON Capacity of thirty (30) RONs for use during the 2006-07 Plan Year includes three (3) RONs beyond the presumptive capacity of Section 5.1.1 (America West/Continental/Mesa AOG (two [2]) and United (one [1])), these RONs will be subject to early and first withdrawal (if necessary) under the conditions specified above.

 

United Airlines is the only Air Carrier currently on the "loading bridge" RON waiting list.  While United Airlines would receive the total number of RONs it requested, it would be allocated one (1) fewer loading bridge position than requested for the 2006-07 Plan Year. 

 

6.0   Commuter Allocations

 

     6.1   Passenger Capacity Allocations to Commuter Airlines

 

Two (2) Qualified Commuter Air Carriers, American Eagle Airlines and Skywest Airlines (Delta Connection/United Express), have requested an allocation for the 2006-07 Plan Year.  American Eagle's request is for a total of 330,663 passengers and SkyWest's request is for a total of 258,118 passengers.  Section 3.5.1 of the Phase 2 Access Plan creates a priority for the allocation of 500,000 Authorized Passengers to Qualified Commuter Air Carriers in each Plan Year. The Airport Director therefore recommends that a total of 500,000 Authorized Passengers be allocated to American Eagle and SkyWest, 250,000 each, for use during the 2006-07 Plan Year, consistent with the terms of the Access Plan.  This proposed allocation of Commuter Air Carrier capacity is reflected on Exhibit B of this staff report.  

 

JWA also requests authority to make supplemental allocations of additional Authorized Passengers during the 2006-07 Plan Year if additional Commuter Air Carrier capacity requests are received and if actual operations during the Plan Year indicate that supplemental capacity allocations would not jeopardize the 10.3 MAP limit.  However, no Commuter Air Carrier can, or should, rely on the availability of mid-Plan Year supplemental allocation of additional Authorized Passengers in making its 2006-07 Plan Year scheduling and equipment allocation decisions.

 

     6.2  Commuter RON Allocations

 

American Eagle Airlines and SkyWest Airlines have each requested a total of two (2) RON positions for the 2006-07 Plan Year.  Consistent with these requests, the Airport Director requests authority to allocate four (4) RON positions to Commuter Air Carriers as follows: two (2) RONs each to American Eagle Airlines and SkyWest Airlines for the 2006-07 Plan Year.

 

 

CEQA COMPLIANCE:

 

Final EIR 582, Addendum 582-1 and Final Supplemental EIR 582 previously certified on June 25, 2002, accepted on December 10, 2002, and certified on October 19, 2004, respectively, have been prepared for the Settlement Agreement Amendment and Settlement Amendment Implementation Plan ("proposed project"). Your Board is required to examine the subject project to determine whether its environmental effects were fully analyzed and disclosed in these previous CEQA documents and whether the subject project would have any environmental effects beyond those analyzed and disclosed in the previous environmental documents. If your Board concurs, no further CEQA compliance is required as noted in Recommended Action #1.

 

 

FINANCIAL IMPACT:

 

N/A

 

 

STAFFING IMPACT:

 

N/A

 

 

ATTACHMENT(S):

 

Exhibit A -Plan Year 2006-07 Commercial Carrier and All-Cargo Carrier Capacity Allocation

Exhibit B - Plan Year 2006-07 Commuter Carrier Capacity Allocation