Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  06-002599

 

MEETING DATE:

12/19/06

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

2

SUBMITTING Agency/Department:

John Wayne Airport   (Approved)

Department contact person(s):

Alan L. Murphy 

 

 

(949) 252-5183

 

 

Subject:  JWA Capacity Allocations for 2007-2008 Plan Year

 

      ceo Concur

County Counsel Review

Clerk of the Board

Concur

Approval Not Required

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

 

    Prior Board Action: February 7, 2006

 

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 these CEQA 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 Air Carriers, as reflected on Exhibit A, and in a manner consistent with the terms of the Phase 2 Commercial Airline Access Plan and Regulation ("Phase 2 Access Plan" or "Access Plan"). 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allocations above the presumptive Seat Capacity provided for by the Access Plan are the first allocations to be withdrawn if Seat Capacity withdrawals are required during the 2007-08 Plan Year.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 2007-08 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 2007-08 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 2007-08 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.

 

 

 

SUMMARY:

 

John Wayne Airport ("JWA" or "Airport") requests that the Board Supervisors approve allocation of Regulated Class A ADDs, Seat Capacity, RON Capacity and Passenger Capacity to scheduled Commercial Air Carriers and Commuter Air Carriers under the County's Phase 2 Access Plan for the 2007-08 Plan Year (April 1, 2007 through March 31, 2008) and other related actions.

 

 

 

BACKGROUND INFORMATION:

 

The purpose of this ASR is to present JWA's recommendations for the allocation of Regulated ADDs, Seat Capacity, RON Capacity, and Passenger Capacity to scheduled Commercial Carriers and Commuter Carriers under the County's Phase 2 Access Plan for the Plan Year which begins on April 1, 2007 and ends on March 31, 2008 (the "2007-08 Plan Year").

 

The Access Plan calls for the Board of Supervisors to allocate operating capacity, in a variety of forms, for each Plan Year, including:  ADDs, Seat Capacity, RON positions and Passengers.    An Average Daily Departure (ADD) equates to 365 authorized departures.  Seat Capacity is calculated based on the number of ADDs a carrier operates and is allocated separately from ADDs to provide: (i) flexibility to Air Carriers in selecting aircraft types and (ii) a fair and clearly defined mechanism for the withdrawal of capacity if needed to enforce the 10.3 million annual passenger (MAP) limitation. Remain-Over-Night (RON) positions are allocated in a manner that “guarantees” at least one (1) loading bridge for each requesting Air Carrier; allocations over and above the first RON are made based on a variety of operational criteria.   Commuter Carriers receive their operating capacity in the form of Passenger Capacity and RONs.   All Air Carriers and Commuter Carriers must operate their capacity in compliance with the parameters defined in the Access Plan.

 

The recommended actions provided in this report are intended to achieve several objectives: (i) accommodate, to the maximum extent possible, ADD, Seat Capacity, RON and Passenger Capacity requests received from the incumbent Air Carriers and Commuter Carriers; (ii) provide internal controls necessary to ensure compliance with the Airport’s annual passenger ("MAP") and ADD caps; and (iii) meet all other legal and regulatory obligations.

 

As the first step in the process for allocating operating capacity for the 2007-08 Plan Year, JWA requested that each interested incumbent Air Carrier and Commuter Carrier submit its capacity request. The Airport Director and staff have carefully reviewed these requests and all related information. This report contains the Airport’s recommendations for capacity allocations for the 2007-08 Plan Year and a discussion of the basis for those recommendations.

 

Exhibit A to this report identifies the specific ADD, Seat Capacity and RON allocations for Qualified Air Carriers recommended by JWA.  Recommendations regarding Passenger Capacity and RON allocations to Qualified Commuter Carriers are set forth in Exhibit B. 

 

The recommended allocations accommodate all of the requested capacity requests except for: (i) Southwest Airlines, which may receive less Class E capacity (1,052,662 seats) than it requested for use during the 2007-08 Plan Year; (ii) the America West/Continental/Mesa AOG, which may receive one (1) less RON position than it requested for use during the 2007-08 Plan Year; and (iii) American Eagle Airlines, which may receive less Passenger Capacity (23,914 passengers) than it requested for use during the 2007-08 Plan Year.  These situations are discussed in more detail below.

 

Allocation Issues and Recommendations:

 

1.      Associated Operating Group (AOG) 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.  Alaska Airlines and Northwest Airlines will continue to operate as members of an AOG during the 2007-08 Plan Year.  In addition, America West Airlines, Continental Airlines and Mesa Airlines will continue to operate as members of an AOG during the 2007-08 Plan Year.

 

2.      Reallocation of Class A ADDs Currently Under Direct County Control and Supplemental              Class A ADD Allocations

 

The County currently has within its control four (4) 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. The Airport would like  to continue to maintain control of these four (4) Class A ADDs and recommends the allocation of these ADDs on a supplemental Plan Year basis (April 1, 2007, through March 31, 2008), as set forth in Exhibit A to this staff report and consistent with the reallocation priority list.  Specifically, JWA recommends that a supplemental Class A ADD be allocated to each of the following on a supplemental, one (1) year basis:   United Airlines, the America West Airlines/Continental Airlines/Mesa Airlines AOG, Aloha Airlines, and Frontier Airlines.  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, 2008. 

 

3.      Allocation of Class A Departures for Commercial Cargo Operations

 

The 2003 Settlement Agreement amendments provide the County with the discretion to allocate up to two (2) Class A ADDs to Commercial Passenger Carriers when not needed for Commercial 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.

 

Neither FedEx nor UPS has requested any additional operating capacity beyond the single cargo Class A ADD each Cargo Carrier currently operates.  The Airport recommends the allocation of one (1) of the additional cargo Class A ADDs to each of the next two Commercial Passenger Carriers on the reallocation priority list:  Southwest Airlines and the Alaska/Northwest Airlines AOG.  These two (2) Cargo Class A ADDs would be allocated on a supplemental one (1) year basis and would be subject to withdrawal, if necessary, in order to ensure compliance with the Airport’s MAP limitation.

 

4.      Presumed Seat Capacity and Supplemental Seat Capacity (Class E) Allocations

 

A portion of the available Seat Capacity is associated with allocation of Class A ADDs and permanent Class E ADDs to the Air Carriers.  The remainder of the Seat Capacity is allocated in accordance with the Access Plan provisions related to Supplemental Class E operations by Air Carriers.  It is important to note that Supplemental Seat (Class E) capacity is typically the first capacity subject to withdrawal, if and as necessary, to ensure compliance with the Airport’s MAP limitations.

 

A total of 14,235,334 seats were requested by the Air Carriers for the 2007-08 Plan Year.  The Airport recommends allocation of 13,182,672 seats for the year.  If the County allocates the 13,182,672 seats as recommended, the Airport projects that it would serve about the same number of passengers (9.6 million) in the 2007-08 Plan Year as it expects serve in the current Plan Year.  This projection is based upon the Airport’s analysis of historical Air Carrier load factors.  In the 2006-07 Plan Year, the Air Carriers’ average load factor is projected to be 73.2%.  (Over the past three years, load factors have ranged from 70.4% to 74.9%.) 

 

The recommended Seat Capacity allocation would accommodate all of the seats requested for use in the 2007-08 Plan Year, with one exception:  Southwest Airlines would not receive 1,052,662 of the seats it requested.  As a result, Southwest Airlines would be placed on the waiting list for additional Seat Capacity if and when it becomes available. 

 

Based on the load factor analysis, JWA believes it is appropriate to accommodate most, but not all, the Supplemental Seat Capacity requests for the 2007-08 Plan Year and that, by doing so, the Airport can provide continued air travel opportunities to the public without jeopardizing the Airport’s 10.3 MAP limitation. 

 

5.      Air Carrier RON Allocations

 

The limited physical facilities available at the Airport for over-night parking of Air Carrier and Commuter Carrier aircraft requires that the County: (i) limit the number of Air Carrier and Commuter Carrier RON positions; (ii) control the location and use of Air Carrier and Commuter Carrier RON positions; and (iii) place certain other restrictions on RON activity at the Airport. 

 

The Access Plan provides for the allocation of 27 Air Carrier RONs.  However, during the 1999-00 through 2006-07 Plan Years, the Board approved allocation of, and the Air Carriers utilized, a total of thirty (30) RON positions.  The Airport is again recommending the allocation of thirty (30) RONs for use during the 2007-08 Plan Year (April 1, 2007, through March 31, 2008).  RON allocation recommendations are presented in the last three columns of Exhibit A.

 

A total of thirty-one (31) RON positions were requested by Air Carriers for the 2007-08 Plan Year.   The Airport’s recommendations for both loading bridge and apron RON position allocations to Air Carriers would fulfill all of the RON requests for the 2007-08 Plan Year with one exception: the America West/Continental/Mesa AOG.  JWA recommends that this AOG be placed on the waiting list for one (1) RON position in the 2007-08 Plan Year. 

 

If the Airport Director determines at any time during the 2007-08 Plan Year that the allocation of thirty (30) RON positions would jeopardize, in any manner, safety and/or efficiency at JWA, the Airport Director requests authorization to withdraw any RON capacity over the twenty-seven (27) RON positions that the Access Plan currently authorizes.  Because the thirty (30) RONs recommended for allocation during the 2007-08 Plan Year includes three (3) RONs beyond the capacity defined in the Access Plan, these RONs (America West/Continental/Mesa AOG (one) and United Airlines (two) will be subject to early and first withdrawal, if necessary.

 

Consistent with the Access Plan provisions, Air Carriers will be provided with the opportunity to make specific loading bridge and apron RON position assignments, by consensus, within thirty days from the date when the capacity allocations are made by the Airport Director.  However, if the Air Carriers fail to reach a consensus during this period, the Airport Director shall provide the specific loading bridge and apron RON position assignments in a manner, and within a time frame, that he determines is appropriate.

 

 

6.      Passenger Capacity Allocations to Commuter Airlines 

 

Two Qualified Commuter Air Carriers, American Eagle Airlines and SkyWest Airlines (dba: Delta Connection and United Express), have requested an allocation of Passengers for the 2007-08 Plan Year.  American Eagle requested 298,194 passengers.  SkyWest requested 225,717 passengers.

 

Section 3.5.1 of the 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  recommends that a total of 500,000 Authorized Passengers be allocated: 274,283 passengers to American Eagle and 225,717 passengers to SkyWest for use during the 2007-08 Plan Year.  This recommendation is reflected on Exhibit B of this staff report.

 

JWA also requests authority to make supplemental allocations of additional Authorized Passengers during the 2007-08 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 2007-08 Plan Year scheduling and equipment allocation decisions.

 

7.      RON Allocations to Commuter Airlines

 

American Eagle Airlines and SkyWest Airlines have each requested one (1) RON position for the 2007-08 Plan Year.  The Airport Director requests authority to allocate two (2) RON positions to Commuter Air Carriers as follows: one (1) RON to American Eagle Airlines and one (1) RON to SkyWest Airlines for the 2007-08 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

 

EXHIBIT(S):

 

Exhibit A - Plan Year 2007-08 Commercial Carrier and All-Cargo Carrier Capacity Allocation

Exhibit B - Plan Year 2007-08 Commuter Carrier Capacity Allocation