Petition for Exemption of the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport

Issuing agencies

Abstract

Federal Aviation Administration (FAA) is granting JetBlue Airways Corporation's (JetBlue) and Spirit Airlines, LLC's (Spirit) (together, the carriers) joint petition for an exemption from the prohibition on transferring Operating Authorizations (slots) at LaGuardia Airport (LGA) beyond the duration of the applicable order. The relief permits the carriers to consummate a transaction in which Spirit would transfer to JetBlue 22 slots at LGA. The relief is granted on the condition that JetBlue is prohibited from leasing or trading any of those 22 slots to any carrier until after April 2028.

Full Text

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<title>Federal Register, Volume 91 Issue 194 (Thursday, October 8, 2026)</title>
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[Federal Register Volume 91, Number 194 (Thursday, October 8, 2026)]
[Notices]
[Pages 64452-64454]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20664]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

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


Petition for Exemption of the Terms of the Order Limiting 
Scheduled Operations at LaGuardia Airport

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

ACTION: Notice of grant of petition with condition.

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SUMMARY: Federal Aviation Administration (FAA) is granting JetBlue 
Airways Corporation's (JetBlue) and Spirit Airlines, LLC's (Spirit) 
(together, the carriers) joint petition for an exemption from the 
prohibition on transferring Operating Authorizations (slots) at 
LaGuardia Airport (LGA) beyond the duration of the applicable order. 
The relief permits the carriers to consummate a transaction in which 
Spirit would transfer to JetBlue 22 slots at LGA. The relief is granted 
on the condition that JetBlue is prohibited from leasing or trading any 
of those 22 slots to any carrier until after April 2028.

DATES: This exemption is effective October 8, 2026.

FOR FURTHER INFORMATION CONTACT: <a href="/cdn-cgi/l/email-protection#7d331213191418532f533518100d151411113d1b1c1c531a120b"><span class="__cf_email__" data-cfemail="6e2001000a070b403c40260b031e060702022e080f0f40090118">[email&#160;protected]</span></a>, Office of 
Rulemaking, Federal Aviation Administration, 800 Independence Avenue 
SW, Washington, DC 20591, at 202-267-9677.

SUPPLEMENTARY INFORMATION:

The Proposed Transaction and the Exemption Request

    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 slots to carriers and establishes rules 
for the use and operation of slots. The Order allows for a temporary 
lease or trade for consideration of a slot between carriers, subject to 
FAA approval, 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 transfer a slot at LGA beyond the duration of 
the Order and any extension(s) thereof is through an exemption from the 
Order.
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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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    Spirit ceased all passenger operations on May 2, 2026, and began a 
wind-down and liquidation. Spirit, therefore, ceased operating its 22 
slots at LGA. Based on the unique circumstances of this case, FAA 
granted relief from the use-or-lose requirements to allow Spirit to 
continue holding the slots and pursue an appropriate sale via the 
bankruptcy process--subject to further review and approval by FAA. 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.\3\ 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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    \3\ Even when a carrier is the holder of a slot, the carrier 
only has a limited interest in that slot. During a bankruptcy 
proceeding, the FAA may opt to automatically withdraw the slot for 
non-usage or when it is in the public interest rather than allowing 
an auction to proceed. FAA v. Gull Air, Inc., 890 F.2d 1255, 1260 
(1st Cir. 1989).
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    On July 23, 2026, JetBlue and Spirit petitioned the Department of 
Transportation (the Department) and FAA for an exemption from the 
prohibition on transferring slots beyond the duration of the Order at 
LGA.\4\ The carriers requested, in part, an exemption to allow them to 
consummate a transaction in which Spirit would sell 22 slots to 
JetBlue. JetBlue also requested relief from the use-or-lose 
requirements in the Order through April 2027 due to the need to address 
administrative and operational factors prior to conducting operations.
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    \4\ A copy of the petition was placed in Docket FAA-2026-9043 
and its contents were summarized and analyzed in the Notice. 91 FR 
55968 (Aug. 31, 2026).
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FAA's Tentative Determination

    On August 31, 2026, FAA published a ``Notice of petition for 
exemption and solicitation of comments on grant of petition with 
conditions'' (Notice).\5\ In the Notice, FAA tentatively approved the 
proposed transfer subject to a condition prohibiting JetBlue from 
trading or leasing the slots until after April 2028. Consistent with 
prior slot transfer proceedings, FAA tentatively found 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.\6\ Moreover, FAA tentatively approved the sale because, 
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.
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    \5\ Id.
    \6\ See 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. ``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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    FAA found that an approval of the request would directly support 
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

[[Page 64453]]

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.\7\
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    \7\ See 49 U.S.C. 40101(a)(4), (6), (10), and (13).
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    FAA also tentatively determined it would waive the use-or-lose 
requirements in the Order, and any extension(s) thereof, through April 
2027 to allow 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 made it clear that any transferred slots would be subject to 
the Order and extension(s) thereof, including the requirements 
governing use-or-lose and the need to obtain FAA approval prior to any 
transfer of a slot. Moreover, any purchased slots remain subject to 
FAA's authority, superior interest, and absolute control, including 
FAA's ability to withdraw the slots for non-usage or when it 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).\8\ 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.\9\ These 
goals have been public policy since at least the time of adoption of 
the Airline Deregulation Act of 1978 \10\ and they include (among 
others) maximizing reliance on competitive market forces; avoiding 
unreasonable industry concentration and excessive market domination; 
and encouraging entry into air transportation markets by new carriers.
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    \8\ 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).
    \9\ See, e.g., Delta Air Lines v. CAB, 674 F2d 1 (D.C. Cir. 
1982).
    \10\ 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.\11\ 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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    \11\ See, e.g., South Dakota v. Dole, 483 U.S. 203, 208 (1987).
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Comments

    FAA received eleven comments in response to the petition. Three 
were from individuals, two were from carriers (Frontier Airlines, Inc. 
and Breeze Airways), two were from associations/industry groups 
(Association of Value Airlines and Airports Council International--
North America (ACI-NA)), one was from the Port Authority of New York 
and New Jersey (Port), and three were from Exhaustless. Of the nine 
commenters, six either supported or did not oppose the transfer.\12\
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    \12\ FAA notes its appreciation for the Port's comment stating 
it will be able to accommodate JetBlue's operations.
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    Two individuals argued that the slots should go to an ultra-low-
cost (ULCC) carrier or other discount carrier. The first commenter 
stated that FAA did not consider ``prioritizing low fares, market 
entry, and robust competition over private transaction outcomes.'' 
Specifically, this commenter stated that ``JetBlue's hybrid business 
model and higher cost structure do not substitute for Spirit's low-fare 
presence.'' The same commenter concluded by stating that, by not 
awarding the slots to Frontier Airlines, the designated Alternate 
Bidder at the auction, FAA would wholly eliminate the footprint of 
ULCCs at LGA, eliminating low-fare competition. The second commenter 
stated that JetBlue's fares are not affordable for many and passengers 
would need to travel outside of the New York City area to obtain 
reasonable fares. This commenter stated that Frontier Airlines should 
have been approved to purchase the 22 slots.
    Under Sec.  40109(b), FAA must determine that an exemption is in 
the public interest. FAA public interest analysis is guided by the 
policy goals in 49 U.S.C. 40101(d) and 49 U.S.C. 40101(a)(4), (6), (10-
13). In this case, FAA had to determine whether the transfer of 22 
slots to JetBlue beyond the duration of the Order and any extension(s) 
thereof was in the public interest. The commenters are now asking FAA 
to determine whether the transfer offers the greatest public benefit or 
whether another carrier could generate more low-fare competition. Under 
the public interest standard and consistent with previous relief, it is 
not necessary for FAA to ensure that the proposed transfer provides the 
greatest public benefit or to evaluate alternative transfers when 
determining whether a transfer is in the public interest.
    Regardless, FAA did consider fares, market entry, and robust 
competition when tentatively finding the transfer beyond the duration 
of the Order and any extension(s) thereof was in the public interest, 
as discussed in detail above and in the Notice. FAA found that JetBlue 
has a proven low-fare business model. Moreover, FAA determined that, 
due in part to JetBlue's ``less than 5 percent'' slot share, 
``[a]pproving 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.'' Finally, Frontier Airlines continues to provide services at 
LGA.
    Several commenters requested that FAA amend the conditions of the 
relief by requiring any future transfer to go to an ULCC to preserve 
competition and to prohibit JetBlue from trading or leasing the slots 
for a period of five years. The Port, while agreeing with the transfer, 
wanted FAA to extend the prohibition on future transfers because ``[a] 
five year period of operation would allow customers to build awareness 
of JetBlue's operations and allow time for competitive pricing 
pressure.'' Others argued that requiring any future transfer to go to a 
ULCC would be ``consistent with previous decisions requiring the 
divestment of slots to new entrants or carriers meeting the `less than 
5 percent' slot share.''
    The current condition limits JetBlue from trading or leasing the 
slots through April 2028. Imposing this condition on

[[Page 64454]]

JetBlue goes further than prior exemptions in which FAA did not attach 
any restrictions on the transfer of purchased slots.\13\ FAA's position 
is that restricting the transfer of these slots and requiring JetBlue 
to operate these slots through April 2028 is sufficient to ensure that 
the traveling public will receive the benefits of the service and price 
competition provided by JetBlue.\14\ Regardless, any slot transferred 
under this exemption will be subject to the Order and any extensions 
thereof. Under the Order, any trade or lease of a slot is subject to 
FAA approval and JetBlue would remain the holder of the slots. If 
JetBlue seeks to transfer the slots beyond the duration of the Order 
and any extension(s) thereof, FAA would evaluate whether the transfer 
is in the public interest, which would likely include an evaluation of 
the transfer's impact on competition and the need for divestiture.
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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. FAA-2014-0074; Grant of Waiver 
(Dec. 2, 2013), Docket No. FAA-2013-1011
    \14\ While 14 CFR part 93 is not controlling at LGA, the 
operating requirements/restrictions on transfers contained in 14 CFR 
93.221(a)(5) are analogous here and show that the outermost limit 
FAA imposes is 24 months.
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    FAA also received several comments that are outside the scope of 
this exemption. ACI-NA and the Port, which did not oppose the transfer, 
advocated that FAA consider rulemaking. The Port advocated for 
rulemaking to provide ``more predictable outcomes in the future and 
allow for slots to be distributed based on policy goals such as 
competition and market access rather than simply by which airline is 
willing to pay the most.'' ACI-NA called for a rulemaking, in part, to 
(1) ensure slots and facilities are decoupled, (2) prevent the 
bankruptcy process from circumventing criteria FAA otherwise considers, 
(3) ensure ``[a] high bid is not a public-interest proxy'', and (4) to 
avoid bypassing the established internationally used slot-allocation 
framework.
    FAA appreciates ACI-NA's and the Port's comments and will take into 
consideration the issues they raised, to the extent practicable, when 
implementing or revising the slot regulatory scheme. With regard to the 
commenters' specific concerns about the auction process and slots going 
to the highest bidder, FAA did consider fares, market entry, and robust 
competition when tentatively finding the transfer was in the public 
interest, as discussed in detail above and in the Notice. Although 
JetBlue was the ``Successful Bidder'' at the auction, the bid amount 
was not relevant to FAA's determination.
    Finally, Exhaustless argued that the entire transfer was 
impermissible. To the extent that Exhaustless questions FAA's authority 
to manage slots and facilitate schedules or seek to supersede this 
proceeding entirely by encouraging the federal government to establish 
broader aviation industry recovery policies and/or change the 
regulatory policy landscape for managing slots and schedule 
facilitation in the United States, such comments are deemed to be 
outside the scope of this proceeding.
    However, FAA nevertheless reiterates that the FAA Administrator is 
required to ``develop plans and policy 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,'' and to issue regulations for ``using the navigable airspace 
efficiently.'' 49 U.S.C. 40103(b). FAA's administration of the runway 
slot program is adopted under the Administrator's mandate to 
efficiently manage the NAS.

Summary of Findings and Conditions

    FAA finds that the proposed transfer does not impact aviation 
safety and offers important benefits to the public. Air traffic control 
procedures ensure the safety of operations conducted at LGA regardless 
of the number or operator of slots authorized and the transfer of the 
22 slots would not increase the number of operations at LGA. Moreover, 
approving the transfer of the slots beyond the duration of the Order 
and any extension(s) thereof 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. Accordingly, FAA has 
found that relief should be granted, subject to the condition set forth 
below.
    The relief from the Order's prohibition on transferring the slots 
beyond the duration of the Order and any extension(s) thereof, 
contained in this exemption terminates when the subject slot transfer 
to JetBlue is completed. The Order and any extensions thereof, will 
control any future transfers, including the prohibition on sale or 
purchase. As such, any transferred 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.
    FAA 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 subject 
to the terms of the Order and any extension(s) thereof, including the 
requirement to obtain FAA approval of a transfer, JetBlue is precluded 
from further sale of these slots unless proper relief is obtained 
pursuant 49 U.S.C. 40109.
    Finally, while these slots will be subject to the minimum usage 
requirements contained in the Order and any extension(s) thereof, FAA 
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.

    Issued in Washington, DC.
Brett T. Daee,
Principal Deputy Chief Counsel.
[FR Doc. 2026-20664 Filed 10-6-26; 4:15 pm]
BILLING CODE 4910-13-P


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