Petition for Exemption and Other Relief

Issuing agencies

Abstract

On July 23, 2026, JetBlue Airways Corporation (JetBlue) and Spirit Airlines, LLC (Spirit) (together, the carriers) petitioned the Department of Transportation (the Department) and Federal Aviation Administration (FAA) for an exemption from the prohibition on selling or purchasing Operating Authorizations (slots) at New York LaGuardia Airport (LGA). The carriers requested the exemption to allow them to consummate a transaction in which Spirit would sell 22 slots to JetBlue.

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<title>Federal Register, Volume 91 Issue 167 (Monday, August 31, 2026)</title>
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[Federal Register Volume 91, Number 167 (Monday, August 31, 2026)]
[Notices]
[Pages 55968-55970]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17800]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No.: FAA-2026-9043; Summary Notice No. 2026-23]


Petition for Exemption and Other Relief

AGENCY: Federal Aviation Administration (FAA), Department of 
Transportation (DOT).

ACTION: Notice of petition for exemption and solicitation of comments 
on grant of petition with conditions.

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SUMMARY: On July 23, 2026, JetBlue Airways Corporation (JetBlue) and 
Spirit Airlines, LLC (Spirit) (together, the carriers) petitioned the 
Department of Transportation (the Department) and Federal Aviation 
Administration (FAA) for an exemption from the prohibition on selling 
or purchasing Operating Authorizations (slots) at New York LaGuardia 
Airport (LGA). The carriers requested the exemption to allow them to 
consummate a transaction in which Spirit would sell 22 slots to 
JetBlue.

DATES: Comments on this petition must identify the petition docket 
number and must be received on or before September 21, 2026.

ADDRESSES: Send comments identified by docket number FAA-2026-9043 
using any of the following methods:
    <bullet> Federal eRulemaking Portal: Go to <a href="http://www.regulations.gov">http://www.regulations.gov</a> and follow the online instructions for sending your 
comments electronically.
    <bullet> Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation, 1200 New Jersey Avenue SE, Room W12-140, 
West Building Ground Floor, Washington, DC 20590-0001.
    <bullet> Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays.
    Docket: Background documents or comments received may be read at 
<a href="http://www.regulations.gov">http://www.regulations.gov</a> at any time. Follow the online instructions 
for accessing the docket or go to the Docket Operations in Room W12-140 
of the West Building Ground Floor at 1200 New Jersey Avenue SE, 
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: <a href="/cdn-cgi/l/email-protection#77391819131e125925593f121a071f1e1b1b3711161659101801"><span class="__cf_email__" data-cfemail="6d230203090408433f432508001d050401012d0b0c0c430a021b">[email&#160;protected]</span></a>, Office of 
Rulemaking, Federal Aviation Administration, 800 Independence Avenue 
SW, Washington, DC 20591, at 202-267-9677.

SUPPLEMENTARY INFORMATION:

Introduction

    FAA limits the number of scheduled and unscheduled operations 
during peak hours at LGA pursuant to an Order that was originally 
published in December 2006 and extended several times since (the 
Order).\1\ The Order allocates Operating Authorizations (slots) to 
carriers and establishes rules for the use and operation of slots. The 
Order allows temporary leases and trades of slots between carriers for 
consideration, provided the transfer does not extend beyond the 
duration of the Order. The Order prohibits the sale or purchase of 
slots.\2\ The only way for a carrier to sell or purchase a slot at LGA 
is through an exemption from the Order. Any slot FAA approves for 
transfer remains subject to FAA's authority, superior interest, and 
absolute control, and the Order and any extension(s) thereof, including 
FAA's ability to withdraw the slots for non-usage or when it is in the 
public interest.
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    \1\ Operating Limitations at New York LaGuardia Airport, 71 FR 
77854 (Dec. 27, 2006) as amended via 72 FR 63224 (Nov. 8, 2007) and 
72 FR 48,428 (Aug. 19, 2008). FAA extended the expiration date of 
the amended Order on October 7, 2009, April 4, 2011, May 14, 2013, 
March 27, 2014, May 25, 2016, September 18, 2018, September 18, 
2020, October 28, 2022, May 13, 2024, and June 23, 2026. 74 FR 
51653; 76 FR 18616, amended by 77 FR 30585 (May 23, 2012); 78 FR 
28278; 79 FR 17222; 81 FR 33126; 83 FR 47065; 85 FR 58255; 87 FR 
65159; 89 FR 41484; and 91 FR 37771.
    \2\ ``The FAA is not allowing carriers to buy and sell Operating 
Authorizations during the term of this Order.'' 71 FR 77854 (Dec. 
27, 2006).
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    FAA tentatively concludes that granting relief to the carriers from 
the prohibition on selling and purchasing slots in the Order, subject 
to certain conditions and limitations, is in the public interest.

Standard of Review; Legal Authority

    The FAA Administrator may grant an exemption from a rule or order, 
issued pursuant to 49 U.S.C. 40103(b), whenever ``the Administrator 
decides the exemption is in the public interest.'' 49 U.S.C. 40109(b). 
The Order was issued pursuant to FAA's authority to ``develop plans for 
the use of the navigable airspace'' and ``assign by regulation or order 
the use of the airspace necessary to ensure the safety of aircraft and 
the efficient use of airspace.'' 49 U.S.C. 40103(b)(1). The 
Administrator is also authorized to ``modify or revoke an assignment 
[of the use of airspace] when required in the public interest.'' 49 
U.S.C. 40103(b)(1). In considering what is in the public interest in 
this instance, FAA is guided by the policy goals prescribed for the 
Administrator for safety regulations in 49 U.S.C. 40101(d).\3\ However, 
this is not an exhaustive list as Congress did not preclude the FAA 
Administrator from considering the ``public interest'' to include 
factors beyond ``safety,'' ``national defense,'' and ``security.'' As 
such, FAA is also guided by the policy goals prescribed for the 
Secretary in 49 U.S.C. 40101(a)(4), (6), (10-13) and the pro-
competition policies followed by Congress in adopting legislation on 
matters such as slot exemptions and airport grant programs.\4\ These 
goals have been public policy since at least the time of adoption of 
the Airline Deregulation Act of 1978 \5\ and they include (among 
others) maximizing reliance on competitive market forces; avoiding 
unreasonable industry concentration and excessive market domination; 
and encouraging entry into

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air transportation markets by new carriers.
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    \3\ For a detailed history on the standard of review, the 
definition of public interest and the ability to impose conditions 
on a grant of relief, see Notice of a petition for waiver and 
solicitation of comments on grant of petition with conditions, 76 FR 
45313 (July 28, 2011).
    \4\ See, e.g., Delta Air Lines v. CAB, 674 F2d 1 (D.C. Cir. 
1982).
    \5\ Public Law 95-504 (92 Stat. 1705).
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    In granting an exemption, FAA may impose conditions to achieve its 
public interest objectives.\6\ Congress expressly allowed the 
Administrator to ``amend, modify, or suspend an order'' and to do so 
``in the way * * * the Administrator decides.'' 49 U.S.C. 46105(a). 
Accordingly, the Administrator may impose conditions on grants of 
exemption.
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    \6\ See, e.g., South Dakota v. Dole, 483 U.S. 203, 208 (1987).
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Background and Petition

    Spirit ceased all passenger operations on May 2, 2026, and began a 
wind-down and liquidation.\7\ Spirit, therefore, ceased operating its 
22 slots at LGA. On June 22, 2026, the U.S. Bankruptcy Court for the 
Southern District of New York approved competitive bidding and auction 
procedures for the disposition of Spirit's assets, including the 22 
slots. JetBlue participated in and became the ``Successful Bidder'' for 
the slots at the conclusion of the auction. Spirit notified interested 
parties of the auction's results through the bankruptcy proceeding. At 
a hearing on July 22, 2026, the Bankruptcy Court approved the transfer 
subject to necessary regulatory approvals.
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    \7\ In re Spirit Aviation Holdings, Inc, No. 25-11897 (Bankr. 
S.D.N.Y.).
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    On July 23, 2026, the carriers petitioned FAA and the Department 
for a grant of relief from the prohibition on the sale or purchase of 
slots under the Order. Specifically, the carriers requested that FAA 
and the Department permit the ``non-reversionary transfer'' of the 22 
slots, recognize JetBlue as the historical holder of the transferred 
slots for the remainder of the Order and any extension(s), and provide 
relief from the Order's usage requirements through April 2027. The 
carriers assert that the transfer will meet the public interest 
policies in 49 U.S.C. 40101 for the following reasons: ``scarce 
capacity will return to service; a limited incumbent will gain a 
sustainable platform for expanded lower-fare competition; LaGuardia's 
operating limits will remain unchanged.''
    The carriers argue that it is in the public interest to swiftly 
resolve this regulatory matter and, therefore, forego notice and 
comment on the exemption request. The carriers reference the expiration 
of the use-or-lose relief, past practice in similarly situated 
situations,\8\ and differentiate the facts at issue here from those 
involved in a 2011 decision.\9\
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    \8\ Joint Application of Delta Air Lines, Inc. & Aerov[iacute]as 
de M[eacute]xico, S.A. de C.V., Order 2016-12-13, at 25 & n.61 (Dec. 
14, 2016), Docket No. DOT-OST-2015-0070.
    \9\ Notice of a petition for waiver and solicitation of comments 
on grant of petition with conditions, 76 FR 45313 (July 28, 2011).
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    The carriers assert the transfer will preserve competition in the 
``heavily restricted New York market'' by keeping the slots with a 
``price-competitive limited incumbent'' that usually faces barriers to 
entry. The carriers cite a Government Accountability Office report 
stating that ``slot scarcity at slot-controlled airports creates an 
entry barrier for new entrants, particularly low-cost carriers, and 
that average fares at those airports ranked among the highest at large 
hubs.'' \10\ According to the carriers, the transfer would increase 
JetBlue's share of assigned slots at LGA to 4.6 percent and ``JetBlue's 
LaGuardia portfolio by approximately 71 percent, giving JetBlue a more 
sustainable base from which to compete while remaining below 5 percent 
of carrier-held Operating Authorizations.'' The carriers assert that 
the Department has previously used the below-5-percent benchmark to 
``identify eligible carriers with a limited airport presence'' and that 
those carriers' ability to obtain a ``sufficient `critical mass' of 
slots can support sustainable patterns of service and a competitive 
effect beyond the transferred slots themselves.'' \11\
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    \10\ July 23, 2026, JetBlue and Spirit Petition for Exemption 
citing U.S. Gov't Accountability Office, GAO-12-902 Slot-Controlled 
Airports: FAA's Rules Could Be Improved to Enhance Competition and 
Use of Available Capacity 49-50 (2012).
    \11\ Petition for Waiver of the Terms of the Order Limiting 
Scheduled Operations at LaGuardia Airport; Procedures for the 
Reallocation of Slots at Ronald Reagan Washington National Airport 
and LaGuardia Airport, 76 FR 63702 (Oct. 13, 2011).
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    The carriers also argue approval of the exemption request preserves 
the collateral financing framework for slots, gates, and routes without 
which ``[l]enders would respond with lower advance rates, additional 
collateral demands, high pricing, or less credit.'' The carriers claim 
that smaller and low-fare carriers would primarily be the group 
impacted by the inability of lenders to depend on that financing 
framework.
    The carriers argue that 14 CFR part 93, which they acknowledge is 
not applicable at LGA, provides regulatory flexibility and supports the 
ramp-up of operations when a carrier is bankrupt or ceases operations. 
Specifically, the carriers point out that part 93 suspends the 80 
percent usage requirements for bankruptcy or cessation of services and 
permits slots to be sold rather than withdrawing the slots to be 
distributed through an auction.
    Finally, JetBlue argues its request for relief from the use-or-lose 
requirement in the Order through April 2027 is justified due to the 
need to address administrative and operational factors prior to 
conducting operations. For example, JetBlue discusses the need to 
``integrate the Operating Authorizations into its network, assign 
aircraft and crews, complete schedule and revenue-management work, load 
and publish the flights through distribution channels, and market the 
service.''
    As outlined below, several of the public interest arguments the 
carriers assert are the same as those considered in prior relief and 
are relevant to this tentative decision.

Summary of Proposed Findings and Conditions and Limitations

    As described in more detail below, FAA tentatively finds that the 
proposed transaction offers important benefits to the public. Approving 
the sale of Spirit's 22 slots to JetBlue ensures that scarce public 
airspace resources are returned to active commercial service under a 
proven low-fare business model. Any purchased slot remains subject to 
FAA's authority, superior interest, and absolute control, and the Order 
and any extension(s) thereof, including FAA's ability to withdraw the 
slots for non-usage or when it is in the public interest. Accordingly, 
FAA has tentatively found that relief should be granted, subject to the 
conditions and limitations set forth below.\12\
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    \12\ FAA does not address arguments raised by the carriers that 
are not germane to its tentative decision or that it did not need to 
reach to tentatively find public interest. FAA's decision not to 
address those arguments do not convey agreement.
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    In the absence of a specific provision allowing for an exemption of 
a particular requirement or restriction, FAA applies the same standard 
as for granting an exemption under 14 part 11. Specifically, FAA 
applies the same standards for foregoing notice and comment under 14 
CFR 11.87 if FAA finds or the petitioner demonstrates good cause that 
FAA should not delay action on a petition. FAA also applies the same 
standard as for granting an exemption under 14 CFR 11.81. This standard 
requires the petitioner to demonstrate (1) why granting the request 
would not adversely affect safety or would provide an equivalent level 
of safety and (2) why a grant of the request is in the public interest.
    FAA finds there is no good cause to forego notice and comment based 
on past practice or the deadlines put forth. FAA has extended the use-
or-lose relief through October 31, 2026, and will

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continue to evaluate the need for future relief based on the regulatory 
proceedings. Also, where FAA found good cause in past circumstances, 
there was a robust administrative process leading up to the exemption 
requests during which the public could submit comments.\13\
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    \13\ Letter from Lorelei Peter, Assistant Chief Counsel for 
Regulations, Federal Aviation Administration, to Christopher Walker, 
Delta Airlines granting relief (May 4, 2017). See also, Grant of 
Waiver (Feb. 10, 2014), Docket No. FAAA-2014-0074; Grant of Waiver 
(Dec. 2, 2013), Docket No. FAA-2013-1011.
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    Air traffic control procedures ensure the safety of operations 
conducted at LGA regardless of the number or operator of slots 
authorized. Moreover, the transfer of the 22 slots would not increase 
the number of operations at LGA. Accordingly, FAA tentatively finds 
there is no adverse effect on safety.
    In prior slot transfer proceedings, the Department established that 
allocating scarce operating rights to carriers with limited access to 
congested markets directly serves the public interest by lowering 
average market fares, enhancing consumer choice, and disciplining 
legacy carrier pricing power.\14\ As in those prior proceedings where 
relief was granted, the proposed slot transfer at LGA would provide 
opportunities for greater competition at LGA by JetBlue.
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    \14\ See Id. and ``As we stated previously, we believe the 
competition induced by this action will bring many benefits, 
including lower fares, more throughput, higher utilization of scarce 
assets, more opportunities to develop flexible or common use airport 
facilities, and reduced opportunities for exclusionary behavior such 
as `babysitting.' '' Notice--Reassignment of Schedules at Newark-
Liberty International Airport, 86 FR 52285 (Sep. 20, 2021).
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    Approval of this request is consistent with previous decisions 
requiring the divestment of slots to new entrants or carriers meeting 
the ``less than 5 percent'' slot share.\15\ After the transfer, JetBlue 
would continue to hold less than five percent of the total slot 
interest holdings at LGA, does not code share on flights to or from LGA 
with any carrier that has five percent or more slot interest holdings, 
and is not a subsidiary, either partially or wholly-owned, of a company 
whose combined slot interest holdings are equal to or greater than five 
percent at LGA. Approving this transfer enables a limited incumbent, 
independent, non-aligned carrier to strengthen its competitive position 
against dominant competitors, which, with the benefit of greater slot 
resources, could pursue anticompetitive strategies such as 
significantly increasing existing services in any market entered by 
JetBlue. Approval of the request directly supports the public interest 
factors enumerated at 49 U.S.C. 40101(a) by enhancing the availability 
of a variety of adequate, economic, efficient, and low-priced services; 
placing maximum reliance on competitive market forces and on actual and 
potential competition; avoiding unreasonable industry concentration and 
excessive market domination; and by encouraging entry into air 
transportation markets by new and existing air carriers and the 
continued strengthening of small air carriers to ensure a more 
effective and competitive airline industry.\16\
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    \15\ Petition for Waiver and Other Relief, 76 FR at 63706-07, 
63711.
    \16\ See 49 U.S.C. 40101(a)(4), (6), (10), and (13).
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    FAA tentatively finds that as a condition of this relief, JetBlue 
is precluded from trading or leasing the slots to any carrier until 
after April 2028. While JetBlue may thereafter trade or lease these 
slots, the carrier is precluded from outright sale of these slots in 
the future. This restriction will help to ensure that the traveling 
public will receive the benefits of the service and price competition 
provided by JetBlue.
    If FAA issues a final exemption approving the transfer, JetBlue 
will become the holder of the slots. As such, FAA does not need to act 
on the carriers' request with regard to historics. Any purchased slots 
remain subject to FAA's authority, superior interest, and absolute 
control, and the Order and any extension(s) thereof, including FAA's 
ability to withdraw the slots for non-usage or when it is in the public 
interest.
    Finally, while these slots will be subject to the minimum usage 
requirements contained in the Order, FAA tentatively grants a waiver 
from the use-or-lose requirements through April 2027 in order for 
JetBlue to start up service at new markets or add service to existing 
markets. This waiver would allow the carriers to complete the 
transaction and JetBlue to ramp-up its new operations at LGA.
    FAA invites comments regarding the petition for exemption, its 
tentative decision, and any other relevant matters. FAA will issue a 
final decision after reviewing any relevant comments that it receives.

    Issued in Washington, DC.
Brett T Daee,
Principal Deputy Chief Counsel.
[FR Doc. 2026-17800 Filed 8-27-26; 4:15 pm]
BILLING CODE 4910-13-P


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