AAAE Survey on FAA’s Draft Policy on Air Carrier Incentive Programs
Responses are appreciated on or before Wednesday, March 22.
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1. Guiding General Principles: Under the draft policy, FAA would consider five general principles when determining whether an ACIP complies with an airport’s grant obligations. These principles include: (1) discrimination between carriers participating in an ACIP and non-participating carriers must be justified and time-limited; (2) a sponsor may not use airport revenues to subsidize air carriers; (3) a sponsor may not cross-charge non-participating carriers or other aeronautical users to subsidize ACIP carriers; (4) the terms of an ACIP should be made public; and (5) use of airport funds for an ACIP must not adversely affect airport operations or maintenance. Do you agree with this proposal? If not, please explain.
2. “New Service” Definition: Under the draft policy, FAA would revise the definition of “new service” as “any nonstop service to an airport destination not currently served with nonstop service, or any service to an airport by a new entrant carrier.” Do you agree with this proposal? If not, please explain.
3. “Seasonal Service” Definition: Under the draft policy, FAA would add a new definition for “seasonal service”—defined as “nonstop service that is offered for less than 6 months of the calendar year.” FAA would permit airports to provide incentives for seasonal service for 3 seasons, up to 3 years from the start of the service. Do you agree with this proposal? If not, please explain.
4. Incentives for New Cargo Service: Under the draft policy, FAA would clarify that an ACIP may be offered for “new cargo service,” separate from any ACIP offered for new passenger service. Do you agree with this proposal? If not, please explain.
5. ACIP Transparency: Under the draft policy, FAA would require airport sponsors to provide notification of the availability and implementation of ACIPs to incumbent and potential new entrant carriers. This includes publicly disclosing incentives offered; the program eligibility criteria; identification of the targeted or desired new service; and for incentives awarded, a period listing of all carriers benefiting from the ACIP, the incentives received, and identification of the incentivized service. Do you agree with this proposal? If not, please explain.
6. Airport Assistance to Non-Sponsor ACIPs: Under the draft policy, FAA would allow airport staff to provide their expertise to help non-airport entities administer ACIPs because non-airport entities typically lack the industry knowledge that is needed to make informed decisions about what new service should be incentivized at different airports. However, airport staff could not participate in decision-making processes or handle non-airport funds. Do you agree with this proposal? If not, please explain.
7. Payments for Marketing New Service: Under the draft policy, FAA would clarify that marketing funds need to flow directly to the marketing provider to avoid impermissible subsidy to air carriers. This was previously a recommendation in the 2010 ACIP Guidebook; it would become a requirement if the draft policy were finalized. Do you agree with this proposal? If not, please explain.
8. Upgauging Practices: Under the draft policy, FAA would allow airport sponsors to continue implementing an ACIP that induces increases in landed weight of air carrier aircraft, known as “upgauging,” under certain conditions. Do you agree with this proposal? If not, please explain.
9. Limited Budget for ACIP: Under the draft policy, FAA would eliminate FAA’s preference for use of an RFP to select a carrier for incentives because, according to the agency, other processes may be acceptable. For example, FAA would allow an airport sponsor implementing an ACIP limited to one carrier to publish information on the ACIP at least 30 days prior to entering into a carrier agreement for incentives. Do you agree with this proposal? If not, please explain.
10. Restart of Service: Under the draft policy, FAA would permit airport sponsors to provide incentives for air service previously offered but cancelled as a result of the COVID-19 pandemic. Do you agree with this proposal? If not, please explain.
11. Please share any additional feedback, concerns, comments, or questions with us regarding the draft policy.
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