Commercial Air Tour Limitation in the Grand Canyon National Park Special Flight Rules Area

SUMMARY: This document proposes to limit the number of commercial air

tours that may be conducted in the Grand Canyon National Park Special

Flight Rules Area (SFRA) and to revise the reporting requirements for

commercial air tours in the SFRA. These proposed changes would allow

the FAA and the National Park Service (NPS) to limit and further assess

the impact of aircraft noise on the Grand Canyon National Park (GCNP).

In addition, this action proposes non-substantive changes to 14 CFR

part 93, subpart U to improve the organization and clarity of the rule.

This document is one part of an overall strategy to control aircraft

noise on the park environment and to assist the NPS in achieving the

statutory mandate imposed by Public Law 100-91 to provide substantial

restoration of natural quiet in the GCNP.

DATES: Comments must be received on or before September 7, 1999.

ADDRESSES: Comments on this NPRM should be mailed or delivered, in

triplicate, to: U.S. Department of Transportation Dockets, Docket

No., [ ], 400 Seventh Street SW., Room Plaza 401, Washington, DC

20590. Comments may also be sent electronically to the following

Internet address: [email protected] Comments may be filed and

examined in Room Plaza 401 between 10:00 a.m. and 5:00 p.m. weekdays,

except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Alberta Brown, AFS-200, Office of Flight Standards, Federal Aviation

Administration, 800 Independence Avenue, SW., Washington, DC 20591;

Telephone: (202) 267-8321.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to participate in this proposed

rulemaking by submitting such written data, views, or arguments, as

they may desire. Comments relating to the environmental, energy,

federalism, or economic impact that may result from adopting the

proposals in this notice are also invited. Comments that provide the

factual basis supporting the views and suggestions presented are

particularly helpful in developing reasoned regulatory decisions.

Comments should identify the regulatory docket number and be submitted

in triplicate to the above-specified address. A report summarizing any

substantive public contact with FAA personnel on this rulemaking will

be filed in the docket. The docket is available for public inspection

both before and after the closing date for receiving comments.

Before taking any final action on this proposal, the Administrator

will consider all comments made on or before the closing date for

comments, and the proposal may be changed in light of the comments

received.

The FAA will acknowledge receipt of a comment if the commenter

includes a self-addressed, stamped postcard with the comment. The

postcard should be marked ``Comments to Docket No. .'' The FAA will

date, time stamp, and return the postcard.

Availability of the NPRM

Any person may obtain a copy of this NPRM by submitting a request

to the Federal Aviation Administration, Office of Rulemaking, 800

Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-

9677. Communications must identify the notice number of this NPRM.

Persons interested in being placed on a mailing list for future FAA

NPRMs should request a copy of advisory Circular No. 11-2A, Notice of

Proposed Rulemaking Distribution System, which describes application

procedures.

An electronic copy of this document may be downloaded using a modem

and suitable communications software from the FAA regulations section

of the Fedworld electronic bulletin board service (telephone: (703)

321-3339) or the Federal Register's electronic bulletin board service

(telephone: (202) 512-1661). Internet users may access the FAA's

Internet site at http://www.faa.gov or the Federal Register's Internet

site at http://www.access.gpo.gov/su__docs for access to recently

published rulemaking documents.

Public Meetings

The FAA intends to hold two public meetings to provide interested

members of the public an additional opportunity to comment on this

proposal. The details pertaining to the public meetings will be

announced in the notice section of the Federal Register. For more

information, contact Mark Lawyer at (202) 493-4531 by telephone or

[email protected] by email.

I. History

A. FAA's Actions

Beginning in the summer of 1986, the FAA initiated regulatory

action to address increasing air traffic over Grand Canyon National

Park (GCNP). On March 26, 1987, the FAA issued Special Federal Aviation

Regulation (SFAR) No. 50 establishing a special flight rules area and

other flight regulations in the vicinity of the GCNP (52 FR 9768). The

purpose of the SFAR was to reduce the risk of midair collision and

decrease the risk of terrain contact accidents below the rim level.

These requirements were modified and extended by SFAR 50-1 (52 FR

22734; June 15, 1987).

In 1987 Congress enacted Public Law (Pub. L.) 100-91, commonly

known as the National Parks Overflights Act. Public Law 100-91 stated,

in part, that ``noise associated with aircraft overflights at Grand

Canyon National Park [was] causing a significant adverse effect on the

natural quiet and experience of the park and current aircraft

operations at the Grand Canyon National Park have raised serious

concerns regarding public safety, including concerns regarding the

safety of park users.''

Section 3 of Public Law 100-91 required the Department of Interior

(DOI) to submit to the FAA recommendations to protect resources in the

Grand Canyon from adverse impacts associated with aircraft overflights.

The law mandated that the recommendations provide for, in part,

``substantial restoration of the natural quiet and experience of the

park and protection of public health and safety from adverse effects

associated with aircraft overflights,''

In December 1987, the DOI transmitted its ``Grand Canyon Aircraft

Management Recommendation'' to the FAA, which included both rulemaking

and non-rulemaking actions. Public Law 100-91 required the FAA to

prepare and issue a final plan for the management of air traffic above

the Grand Canyon, implementing the recommendations of DOI without

change unless the FAA determined that executing the recommendation

would adversely affect aviation safety.

On May 27, 1988, the FAA issued SFAR No. 50-2, revising the

procedures for aircraft operation in the airspace above the Grand

Canyon (53 FR 20264; June 2, 1988). SFAR No. 50-2 did the following:

(1) Extended the Special

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Flight Rules Area (SFRA) from the surface to 14,499 feet above mean sea

level (MSL) in the area of the Grand Canyon; (2) prohibited flight

below a certain altitude in each of the five sectors of this area, with

certain exceptions; (3) established four flight-free zones from the

surface to 14,499 feet MSL; (4) provided for special routes for air

tours; and (5) contained certain communications requirements for

flights in the area.

A second major provision of section 3 of Public Law 100-91 required

the DOI to submit a report to Congress discussing ``whether the plan

has succeeded in substantially restoring the natural quiet in the park;

and * * * such other matters, including possible revisions in the plan,

as may be of interest.'' On September 12, 1994, the DOI submitted its

final report and recommendations to Congress. This report, entitled,

``Report on Effects of Aircraft Overflights on the National Park

System'' (Report to Congress), was published in July, 1995. The Report

to Congress recommended numerous revisions to SFAR No. 50-2 in order to

substantially restore natural quiet in the GCNP.

Recommendation No. 10, which is of particular interest to this

rulemaking, states: ``Improve SFAR 50-2 to Effect and Maintain the

Substantial Restoration of Natural Quiet at Grand Canyon National

Park.'' This recommendation incorporated the following general

concepts: simplification of the commercial sightseeing route structure;

expansion of the flight-free zones; accommodation of the forecasted

growth in the air tour industry; proposing phase-in of noise efficient/

quiet technology aircraft; temporal restrictions (``flight-free'' time

periods); use of the full range of methods and tools for problem

solving; and institution of changes in approaches to park management,

including the establishment of an acoustic monitoring program by the

NPS in coordination with the FAA.

On June 15, 1995, the FAA published a final rule that extended the

provisions of SFAR No. 50-2 to June 15, 1997 (60 FR 31608), pending

implementation of the final rule adopting DOI's recommendations.

On December 31, 1996, the FAA issued the final rule (61 FR 69302)

implementing many of the recommendations set forth in the DOI report

including: flight-free zones and corridors; minimum flight altitudes;

general operating procedures; curfews in the Dragon and Zuni Point

corridors; reporting requirements; and a cap on the number of

``commercial sightseeing'' aircraft that could operate in the SFRA. The

FAA subsequently issued a written interpretation stating that the

aircraft cap applied to the number of aircraft operating in the SFRA at

a given time.

This final rule was issued concurrently with a Notice of Proposed

Rulemaking regarding Noise Limitations for Aircraft Operations in the

Vicinity of Grand Canyon National Park; a Notice of Availability of

Proposed Commercial Air Tour Routes for Grand Canyon National Park and

Request for Comments; and the Environmental Assessment. The final rule

was originally scheduled to become effective May 1, 1997. On February

26, 1997, the FAA published a delay of the effective date to January

31, 1998 (62 FR 8861), for the establishment of an acoustic monitoring

program by the NPS in coordination with the FAA.

On June 15, 1995, the FAA published a final rule that extended the

provisions of SFAR No. 50-2 to June 15, 1997 (60 FR 31608), pending

implementation of the final rule adopting DOI's recommendations.

On December 31, 1996, the FAA issued the final rule (61 FR 69302)

implementing many of the recommendations set forth in the DOI report

including: flight-free zones and corridors; minimum flight altitudes;

general operating procedures; curfews in the Dragon and Zuni Point

corridors; reporting requirements; and a cap on the number of

``commercial sightseeing'' aircraft that could operate in the SFRA. The

FAA subsequently issued a written interpretation stating that the

aircraft cap applied to the number of aircraft operating in the SFRA at

a given time.

This final rule was issued concurrently with a Notice of Proposed

Rulemaking regarding Noise Limitations for Aircraft Operations in the

Vicinity of Grand Canyon National Park; a Notice of Availability of

Proposed Commercial Air Tour Routes for Grand Canyon National Park and

Request for Comments; and the Environmental Assessment. The final rule

was originally scheduled to become effective May 1, 1997. On February

26, 1997, the FAA published a delay of the effective date to January

31, 1998 (62 FR 8861), for those portions of the December 31, 1996,

final rule which define the Grand Canyon SFRA (14 CFR Sec. 93.301),

define the flight-free zones and flight corridors (14 CFR Sec. 93.305),

and establish minimum flight altitudes in the vicinity of the GCNP (14

CFR Sec. 93.307). The February 26, 1997, final rule also reinstated the

corresponding sections of SFAR 50-2 until January 31, 1998 (flight-free

zones, the Special Flight Rules Area, and minimum flight altitudes). On

December 17, 1997, the effective date for these sections was delayed to

January 31, 1999 (62 FR 66248). On December 7, 1998, the effective date

for 14 CFR Secs. 93.301, 93.305, and 93.307, was delayed until January

31, 2000 (63 FR 67543).

The FAA's final rule published in 1996 was challenged before the

U.S. Court of Appeals for the District of Columbia Circuit by the

following petitioners: Grand Canyon Air Tour Coalition; the Clark

County Department of Aviation and the Las Vegas Convention and Visitors

Authority; the Hualapai Indian Tribe; and seven environmental groups

led by the Grand Canyon Trust. See Grand Canyon Air Tour Coalition v.

FAA, 154 F.3d 455 (D.C. Cir., 1998). In general, the petitioners

charged that the FAA mis-applied Public Law 100-91 in implementing the

final rule and committed several procedural errors during the

rulemaking process. The Court ruled in favor of the FAA and upheld the

final rule.

B. Interagency Working Group

On December 22, 1993, the then Secretary of Transportation,

Federico Pena, and Secretary of the Interior, Bruce Babbitt, formed an

interagency working group (IWG) to explore ways to limit or reduce the

impacts from overflights on national parks, including the GCNP.

Secretary Babbitt and Secretary Pena concurred that increased flight

operations at GCNP and other national parks have significantly

diminished the national park experience for some park visitors, and

that measures can and should be taken to preserve a quality park

experience for visitors, while providing access to the airspace over

the national parks. The FAA has been working closely with the NPS to

identify and address the impacts of commercial air tours on the GCNP.

C. President's memorandum

The President, on April 22, 1996, issued a Memorandum for the Heads

of Executive Departments and Agencies to address the impact of

transportation in national parks. Specifically, the President directed

the Secretary of Transportation to issue proposed regulations for the

GCNP that would place appropriate limits on sightseeing aircraft to

reduce the noise immediately, and to make further substantial progress

towards restoration of natural quite, as defined by the Secretary of

the Interior, while maintaining aviation safety in accordance with

Public Law 100-91.

This memorandum also indicated that, with regard to overflights of

the

[[Page 37306]]

GCNP, ``should any final rulemaking determine that issuance of a

further management plan is necessary to substantially restore natural

quite in the Grand Canyon National Park, [the Secretary of

Transportation, in consultation with heads of relevant departments and

agencies] will complete within 5 years a plan that addresses how the

Federal Aviation Administration and the National Park Service'' will

achieve the statutory goal not more than 12 years from the date of the

directive (i.e., 2008).

II. Purpose of This NPRM

The government has analyzed the noise situation at the GCNP over

the last two years and has decided that a greater effort must be made

to reach the statutory goals of Public Law 100-91, especially in light

of the President's Memorandum. Noise generated by aircraft conducting

commercial air tours presents a specific type of problem because these

aircraft generally are operated repeatedly at low altitudes over the

same routes. Thus, the FAA issued its 1996 final rule and instituted

the aircraft cap as a means to limit aircraft noise generated by air

tours.

In the 1996 final rule, however, the FAA underestimated the number

of aircraft operated in the SFRA by commercial air tour operators. This

problem was identified in the Notice of Clarification issued October

31, 1997 (62 FR 58,898). In fact, the FAA concluded in this Notice that

``there is enough excess capacity in terms of aircraft numbers for air

tours to increase by 3.3 percent annually for the next twelve years if

the demand exists (62 FR 58902).'' The FAA went on to state that ``in

the aggregate, and for most individual operators, the number of air

tours provided can continue to increase while the number of aircraft

remains the same.'' In light of this conclusion, the IWG recommended

that the FAA and NPS develop a rule that will temporarily limit

commercial air tours in the GCNP SFRA at the level reported by the air

tour operators for the period May 1997-April 1998.

The agencies' goal through this rulemaking is to prevent an

increase in aircraft noise by limiting the number of commercial air

tours. Concurrently with this NPRM, the FAA also is issuing a Notice of

Availability to Routes which indicates certain modifications to

aircraft routes through the SFRA and an NPRM modifying airspace in the

SFRA. Additionally, the FAA is issuing a draft supplemental

Environmental Assessment which assesses the environmental impact of the

route modifications, the proposed commercial air tours limitation and

the airspace modifications. The FAA also continues to work on the

rulemaking initiated on December 31, 1996 proposing quiet technology

aircraft. All of these steps are aimed at controlling or reducing the

impact of aircraft noise in the GCNP.

In addition to preventing the noise situation from worsening,

controlling the overall number of commercial air tours in the GCNP SFRA

will facilitate the analysis of noise conditions in the GCNP and aid in

the design of the noise management plan. Once the commercial air tour

limitation and the new routes are implemented, the FAA and NPS will be

better able to consider future noise mitigation strategies.

The proposed rule is premised on the National Park Service's noise

evaluation methodology for Grand Canyon National Park, which was

published in the Federal Register on January 26, 1999 (64 FR 3969). The

NPS is reviewing comments submitted in response to that notice. If, on

completion of that review, the NPS determines not to adopt the

methodology described in the notice (such as the two-zone system and

accompanying noise thresholds), the FAA will reevaluate the proposal

and Draft Supplemental Environmental Assessment in light of whatever

final action is taken by the NPS.

The Proposal

A. Overview

This NPRM would temporarily limit commercial air tours in the GCNP

Special Flight Rules Area (SFRA) at the level reported to the FAA by

the operators for the year May 1, 1997-April 30, 1998 (the base year),

pending implementation of the Comprehensive Noise Management Plan (see

discussion in III.B. below). During the implementation of this

commercial air tour limitation, the FAA and the NPS would collect

further information regarding commercial SFRA operations and aircraft

noise in the GCNP. The NPS and the FAA would use the information

collected during this time to determine whether the ``substantial

restoration of natural quiet'' has been achieved at the GCNP. In the

event that the agencies determine that the statutory goal is not met

through the various noise mitigation techniques adopted, the FAA and

NPS would need to take further steps to achieve the substantial

restoration of natural quiet. This could mean that the commercial air

tour limitation would become permanent and/or that commercial air tours

would be further limited. This commercial air tour limitation would

replace the current aircraft cap set forth in Sec. 93.316(b).

In addition to the limitation on commercial air tours, this

rulemaking would add a requirement for certificate holders to file a

visual flight rules (VFR) flight plan to provide the FAA with a

mechanism for monitoring and enforcing the limitation. This rule also

would modify the current reporting requirements to require certificate

holders authorized to conduct commercial air tours in the GCNP SFRA to

report air tour and other flights that enter the SFRA. This data would

be used to assess the noise situation in the GCNP and further develop

the Comprehensive Noise Management Plan.

The NPRM also would make a number of non-substantive changes to

Part 93, subpart U. These changes consist of the following: renumbering

paragraphs; moving subparagraphs into new sections; and amending

section headings. These changes are intended to make the rule easier to

read and understand and to reflect the changes proposed herein.

B. Comprehensive Noise Management Plan

The Comprehensive Noise Management Plan (CNMP) is the overall

process that the government would use to control and monitor noise

conditions in the GCNP to achieve the statutory goal of substantial

restoration of natural quiet. This plan is part of NPS' overall effort

to reduce noise levels from all sources within the park, as called for

in the NPS' 1995 General Management Plan.

As part of the CNMP, the FAA and NPS are working together to

develop a noise management program that addresses noise from commercial

air tour overflights. To ensure development of a flexible and adaptive

approach to noise mitigation and management, this plan will, at a

minimum do the following: (1) Address development of a reliable

aircraft operations and noise database; (2) validate and document the

most effective uses for FAA and NPS noise models in GCNP; (3) explore

how the conversion to noise efficient/quiet technology aircraft can

most effectively contribute to the substantial restoration of natural

quiet while allowing for growth in the industry; and (4) determine how

to provide operators with incentives to purchase noise efficient/quiet

technology aircraft. In developing this plan, the FAA and NPS are

committed to an open process that will provide for full public

involvement and consultation with the public and affected Native

American tribes.

[[Page 37307]]

As discussed above, the effective date for a portion of the 1996

final rule was delayed. Additionally, the NPRM for Noise Limitations

for Aircraft Operations in the Vicinity of Grand Canyon National Park

has not been finalized. A noise management plan also has not been fully

implemented yet. Work to date has primarily focused on developing a

database of commercial air tours and developing a plan to improve noise

modeling at the GCNP.

C. Definitions

Three new definitions would be added to current Sec. 93.303 and

would be applicable to part 93, subpart U. Definitions would be added

for the terms ``allocation'', ``commercial air tour'' and ``commercial

SFRA operation.'' Additionally, the paragraph designations would be

removed to simplify administration of this section.

1. Allocation

The term ``allocation'' would be defined as the authorization to

conduct a commercial air tour in the Grand Canyon National Park (GCNP)

Special Flight Rules Area (SFRA). Each certificate holder reporting

base year (May 1, 1997--April 30, 1998) air tours to the FAA would

receive one allocation for each commercial air tour reported.

2. Commercial Air Tour

The term ``commercial air tour'' would be defined as any flight

conducted for compensation or hire in a powered aircraft where a

purpose of the flight is sightseeing. If the operator of a flight

asserts that the flight is not a commercial air tour, the Administrator

during an administrative review may consider a number of factors in

determining whether the flight is actually a commercial air tour.

Factors that the Administrator may consider include, but are not

limited to--(1) Whether there was a holding out to the public of

willingness to conduct a sightseeing flight for compensation or hire;

(2) whether a narrative was provided that referred to areas or points

of interest on the surface; (3) the area of operation; (4) the

frequency of flights; (5) the route of flight; (6) the inclusion of

sightseeing flights as part of any travel arrangement package; or (7)

whether the flight or flights in question would or would not have been

canceled based on poor visibility of the surface. The Administrator may

give more weight to some factors than others in making this

determination. This definitional change would be consistent with other

rulemakings that the FAA is working on.

The current rules at 14 CFR, part 93, subpart U use the term

``commercial sightseeing flight'' at Secs. 93.305 (Flight-free zones

and flight-free corridors); 93.307 (Minimum flight altitudes); 93.315

(Commercial sightseeing flight operations); 93.316 (Commercial

sightseeing limitations); and 93.317 (Commercial sightseeing flight

reporting requirements). This NPRM would replace the term ``commercial

sightseeing flight'' with the term ``commercial air tour'' throughout

part 93, subpart U.

The proposed definition would clarify which flights are considered

commercial air tours. The current rules do not define the term

``commercial sightseeing flight''. Instead, the FAA has assumed that

flights operated on the Blue, Black and Green routes that are reported

to the FAA under Sec. 93.317 are commercial air tour flights with the

following exceptions: (1) flights using the Blue Direct and Blue Direct

South routes generally are presumed to be flights to reposition

aircraft or transportation flights to move passengers from point A to

point B; and (2) flights using the Green 3 route are operated under an

FAA Form 7711-1, Certificate of Waiver or Authorization (Form 7711)

issued by the Las Vegas Flight Standards District Office in support of

Supai Village and the Havasupai Tribe. The FAA also believes that most

flights operated on the Brown routes are operated under a Form 7711,

typically in support of the Canyon's river rafting operations. On

occasion, a commercial air tour may transition to a Brown route as part

of a more extensive tour. There are only two east/west routes proposed

that would be used for all types of commercial SFRA operations. Hence,

because it will be more difficult to identify air tours based on the

route flown, the FAA intends to define the term ``commercial air

tour''.

3. Commercial SFRA Operations

Public Law 100-91 recognizes that noise associated with ``aircraft

overflights'' at the GCNP is causing ``a significant adverse effect on

the natural quiet and experience of the park.'' In order to improve

noise management in the GCNP, the agencies believe it is necessary to

impose some requirements on all flights conducted in the SFRA by air

tour operators, regardless of whether an air tour is actually conducted

on that flight. Therefore, the FAA proposes to adopt a new term to

apply to all commercial operations conducted by certificate holders

authorized to conduct commercial air tours and occurring within the

GCNP SFRA.

The term ``Commercial Special Flight Rules Area Operation''

(Commercial SFRA Operation) would be defined as any portion of a flight

within the GCNP SFRA that is conducted by a certificate holder that has

operations specifications authorizing air tours within the GCNP SFRA.

This term is broader than the term ``commercial air tour'' as it

includes air tours as well as transportation, repositioning,

maintenance, and training/proving flights. The types of flights covered

by this term would be defined in the ``Las Vegas Flights Standards

District Office Grand Canyon National Park Special Flight Rules Area

Procedures Manual'' (see discussion at III.F re: definitions). The term

``commercial SFRA operations'' does not include supply and

administrative flights conducted under contract with the Native

Americans, or other flights conducted under a Form 7711. The FAA

proposes to create this new term so that it can better account for the

types of operations occurring within the park other than commercial air

tours.

Examples 1 and 2 (below) illustrate the types of commercial SFRA

operations and how air tours are defined.

Example 1. A commercial air tour operator conducts a commercial air

tour through the GCNP SFRA from point A to point B, drops off

passengers for a ground tour at point B and returns to point A without

passengers. A subsequent aircraft completes a second tour from point A

to point B and unloads its passengers at point B. The aircraft then

picks up the passengers from the first tour, and returns them through

the GCNP SFRA from point B to point A, completing the round trip air

tour for these passengers. The initial trip by the first aircraft from

point A to point B is a commercial air tour. The return trip of the

first aircraft, without passengers, from point B to point A is a

repositioning trip. The first trip of the second aircraft is a

commercial air tour. The return trip of the second aircraft is a

transportation trip because it moves passengers from point B to point

A. The two commercial air tours each use one allocation. The other

flights do not use allocations.

Example 2. A commercial air tour operator conducts a flight within

the GCNP SFRA solely for the purpose of performing a flight check on a

new pilot. During the flight, the aircraft develops mechanical problems

and makes a precautionary landing. A second aircraft is dispatched with

a pilot and mechanic to perform any necessary repairs. The first flight

is a training flight. The second flight is a

[[Page 37308]]

maintenance flight. The return flights for both aircraft are

repositioning flights. No allocations are used.

D. Requirements Specific to Commercial SFRA Operations

Section 93.315 would be reorganized and revised to remove the

capacity limitation on aircraft and to delete the reference to the

outdated SFAR 38-2. The current language only applies to aircraft

having a passenger-seat configuration of 30 or fewer seats. The FAA

believes that removal of the capacity restriction is necessary because

it is aware that some air tour operators are beginning to use larger

capacity aircraft. The FAA wants to ensure that each air tour operator,

regardless of the capacity of aircraft, is held to the same operational

and safety standards. This section would continue to require commercial

air tour operators to be certificated under 14 CFR part 119 to operate

in accordance with either 14 CFR part 121 or part 135 and to hold

appropriate GCNP SFRA operations specifications.

Section 93.317 of the NPRM would maintain the current curfew hours

in the Dragon and Zuni Point corridors (current Sec. 93.316(a)). This

curfew would now apply to commercial SFRA operations. Currently, the

curfew applies to ``commercial sightseeing operations,'' which is an

undefined term. The FAA believes that amending this curfew to include

commercial SFRA operations would improve management of aircraft noise

in the Dragon and Zuni Point corridors. With the removal of this

language from Sec. 93.316 to proposed Sec. 93.317, Sec. 93.316 would be

removed and reserved.

Section 93.325 would require certificate holders conducting

commercial air tours in the GCNP SFRA to report their commercial SFRA

operations to the FAA on a quarterly basis. As discussed below, this

reporting requirement is similar to that in current section 93.317 and

would enable the government to assess more accurately the noise level

and airspace use in the GCNP and further the development of the

Comprehensive Noise Management Plan.

E. Operations Limitation

This NPRM would limit all commercial air tours in the GCNP SFRA on

a twelve month basis to the number of air tours reported in accordance

with current Sec. 93.317 for the year May 1, 1997--April 30, 1998. This

time period is being used as the basis for determining the allocations

because it is the first twelve months for which the FAA has air tour

data that has been fully compiled and analyzed. Proposed Sec. 93.319

would establish this commercial air tour limitation. The number of

commercial air tours that a certificate holder could conduct would be

shown on the certificate holder's operations specifications as

allocations.

The FAA is proposing that these allocations would remain unchanged

by the FAA for a twenty-four month period from the effective date of

this rule. After that time, all certificate holders' allocations may be

revised based on the following: (1) Data submitted under proposed

Sec. 93.325; (2) updated noise analysis; and/or (3) the status of the

Comprehensive Noise Management Plan. Any change in the overall

allocations to all certificate holders would be subject to notice and

comment rulemaking.

The FAA and NPS realize that commercial air tour operators need

consistency to justify equipment investment and make other business

plans. In devising the proposed two-year term for the allocations, the

FAA considered two other alternatives including revising the

allocations annually or on an ad hoc time basis thereafter. The FAA

rejected both of these alternatives because it was concerned that

neither alternative would achieve the proper balance between providing

the certificate holders with the latitude necessary to conduct

business, and controlling noise in the GCNP. The FAA solicits comments

on this matter.

1. Initial Allocation

Under this NPRM, each commercial air tour would be represented by

an allocation. Thus, each certificate holder that reported commercial

air tours to the FAA in accordance with current Sec. 93.317 for the

base year would receive one allocation for each air tour. The total

number of commercial air tours that were reported by all of the

operators to the FAA for that base year was 88,000. This number does

not include flights in support of air tour operations such as

transportation flights, training flights, maintenance flights, and

repositioning flights or flights conducted under a Form 7711.

To prevent a worsening of noise conditions in the park during the

peak season, the FAA, in consultation with the NPS, proposes to

establish a peak season cap that prevents the movement of allocations

from off-peak season into the peak season. Peak season allocations,

however, would be permitted to be used during the off-peak season as

noise during the off-peak season generally is substantially less than

during the peak season. The FAA proposes that the peak season be

defined as the period from May 1-September 30; the off-peak season

would be the period October 1-April 30. This peak/off-peak season

definition is consistent with the summer and winter season for curfew

purposes. Peak/off-peak allocations would be determined from the

information reported to the FAA for the base year. There were 52,500

commercial air tours reported for May through September in the base

year.

This restriction helps to eliminate the potential that noise would

become worse during the peak season months because operators could

maximize their allocation use during the time. Additionally, the

restriction reduces the potential of an airspace congestion problem

caused by an operator using all of its allocations during the peak

season and shutting down its business during the off-peak season. This

was deemed advisable after the FAA utilized its Airport and Airspace

Simulation Computer Model (SIMMOD), which demonstrated significant use

of the routes during the peak season.

In developing the peak/off-peak season distributions, the FAA and

NPS considered three alternatives: (1) the proposed 5 month peak season

(May-September); (2) a three month (July-September) peak season; and

(3) a uniform year with no peak/off-peak delineation. The base year

data indicates that the July-September time period is the most active

period. A shorter peak, however, may limit the ability of the operators

to maximize the use of their allocations since they would not be able

to use peak season air tour allocations during the off-peak season.

Consequently, the FAA requests comment specifically on the definition

of peak/off-peak season.

Under the proposed rule, allocations also would be separated into

those that may be used in the Dragon and Zuni Point corridors and those

that may be used in the rest of the SFRA. Dragon and Zuni Point

allocations again would be determined based on the number of air tours

an operator conducted and reported in these corridors for the base

year. Only operators who reported air tours in these corridors for the

base year would receive allocations for these corridors. There were

approximately 43,000 commercial air tours reported for the Dragon and

Zuni Point corridors for the base year; approximately 29,500 of those

tours were reported for the peak season.

The NPS and the FAA believe it is necessary to restrict allocations

for the Dragon and Zuni Point corridors because the airspace is already

[[Page 37309]]

congested. The agencies believe that this restriction would help

maintain the number of air tours in these corridors at a level that

does not pose a congestion problem and that minimizes the likelihood

that aircraft noise in this region of the park will increase.

The FAA believes the initial allocation phase would proceed in a

manner similar to the example below:

Assuming the FAA adopts the 5-month proposed peak season.

Throughout the base year, Operator A reported that half of its air

tours each month were conducted in the Dragon and Zuni Point corridors.

Operator B did not report any Dragon and Zuni Point air tours for the

base year. The following information was reported to the FAA under

current Sec. 93.317 for theMay 1, 1997-April 30, 1998 time period:

Example of Initial Allocations

------------------------------------------------------------------------

Operator A Operator B

------------------------------------------------------------------------

Reported operations

Peak:

May................................. 75 50

June................................ 150 100

Jul................................. 300 250

Aug................................. 300 200

Sep................................. 200 100

-------------------------------

Subtotal........................ 1025 700

Off-Peak:

Oct................................. 75 25

Nov................................. 25 ..............

Dec................................. 50 25

Jan................................. 25 ..............

Feb................................. .............. ..............

Mar................................. .............. ..............

Apr................................. 50 25

-------------------------------

Subtotal........................ 225 75

-------------------------------

Total....................... 1250 775

Dragon/Zuni Point....................... 625 None

------------------------------------------------------------------------

Allocations

Overall:

Total............................... 1250 775

Peak Season......................... 1025 700

Dragon/Zuni Point:

Total............................... 625 None

Peak................................ 513 None

------------------------------------------------------------------------

2. Certificate Holders Receiving Allocations

The FAA is not reporting each certificate holder's individual

allocation in this NPRM. Instead, this NPRM will identify those

certificate holders who reported air tours to the FAA for the base year

period and are scheduled to receive initial allocations to continue to

conduct commercial air tours. These certificate holders are, in

alphabetical order, as follows:

Air Bridge, Inc.; Air Grand Canyon, Inc.; Air Nevada Airlines, Inc.;

Air Star Helicopters (includes Air Star Airlines); Aladdin Air

Services, Inc.; AVI, Inc.; Aviation Ventures, Inc. (dba Vision Air);

Bruce Adams (dba Southwest Safaris); Eagle Canyon Airlines; Grand

Canyon Airlines; Heli USA Airways, Inc. (dba HeliUSA); Kenai

Helicopters, Inc.; King Airlines, Inc.; Lake Meade Air, Inc; Las Vegas

Airlines, Inc.; Las Vegas Helicopters, Inc.; Maverick Helicopters,

Inc.; Papillon Airways, Inc. (includes Papillon Grand Canyon

Helicopters); Scenic Airlines, Inc. (includes Las Vegas, Page and all

other operations); Sundance Helicopters, Inc.; Temple Air Service,

Inc.; Vista Airlines, Inc.; and Westwind Aviation, Inc.

Only certificate holders identified above are scheduled to receive

an initial allocation under this rule.

Based on its additional research, the FAA believes that one

certificate holder who reported air tours to the FAA during the base

year period is no longer in business. Its allocation would be

distributed among the remaining certificate holders, proportionate to

the size of each certificate holder's allocation, unless the

certificate holder listed below as not receiving allocations notifies

the Manager, Air Transportation Division, AFS-200, Federal Aviation

Administration, 800 Independence Ave., S.W. Washington, D.C. 20591.

This written notification must be received on or before the NPRM

comment deadline and indicate that the certificate holder intends to

conduct commercial air tours in the GCNP SFRA and is authorized to do

so. Thus, the following certificate holder will NOT receive an

allocation UNLESS it notifies the FAA before the close of the comment

period:

** Flagstaff Safe Flyers, Inc.

Certificate holders identified as receiving allocations to conduct

air tours in the SFRA will receive a written notification by certified

mail, return receipt requested, informing them of the following: (1)

Total number of air tours allocated in the SFRA; (2) Number of air

tours allocated in the Dragon and Zuni Point corridors; and (3) Peak

season allocation for both the total SFRA and Dragon and Zuni Point

corridors. This notification will be sent out concurrently with

publication of this NPRM.

The FAA also will attempt to notify the certificate holder

identified above as not receiving allocations via certified

[[Page 37310]]

mail, return receipt requested, directed to the last known business

address.

3. Requesting Modification of Initial Allocation

The FAA recognizes that the air tour business in the GCNP is

constantly changing. In fact, the FAA is aware that since the time

period reflected in the base year data, some businesses have been

bought and sold. Additionally, the FAA is aware that some operators

have expanded their business into Las Vegas or modified the focus of

their business to include some flights in the Dragon and Zuni Point

corridors. Thus, due to mergers/acquisitions, bankruptcies, or other

reasons that affect operations, certificate holders may believe that

data they submitted for the base year does not reflect their current

business. The FAA is striving to be fair in assessing the allocations.

Therefore, it is permitting any certificate holder who believes that

the base year data does not reflect its current operations as of the

date of this notice to submit a written request to the Manager, Air

Transportation Division requesting reassessment and indicating why the

base year data is not an accurate representation. Such a request must

be supported by written documentable evidence (i.e., contracts, leases,

or other legal documentation). The FAA anticipates that any

modifications will only result in redistribution of allocations among

certificate holders affected by the merger or acquisition, etc., or

within a certificate holder's allocation distribution (e.g., transfer

of business operations prior to this NPRM into the Dragon or Zuni Point

sector).

Certificate holders requesting modification of the initial

allocation must submit the information described above in writing to

Manager, Air Transportation Division, AFS-200, Federal Aviation

Administration, 800 Independence Ave., SW Washington DC 20591. All

requests for modification must be received on or before the comment

deadline. Requests for modifications received after the comment

deadline will not be considered. The Manager will review the

information to determine whether the party has provided substantive,

documentable evidence that the information relied on for the initial

allocation is not an appropriate standard of measure. Any transfer of

allocations due to prior mergers, acquisitions, etc. must be agreed to

by all involved parties. The FAA will not consider increasing an

initial allocation because of changes in consumer demand or the fact

that the base year was not a busy year, operationally.

One example of how the above process would work is set forth below:

There are four certificate holders reporting commercial air tours

in the GCNP SFRA, Operators A, B, C and D. In December, 1998 (post

base-year) Operator A purchased all of Operators C's operations.

Operator B reported no air tours in the Dragon and Zuni Point corridors

for the base year but transferred 50% of its operations to the Dragon

and Zuni Point corridors in November, 1998. Operator D has turned in

its operations specifications.

Because all of these changes occurred post base year, they would

not be reflected by the data used by the FAA to allocate air tours.

Hence the certificate holders should do the following:

Operator A should submit a request to the Manager, Air

Transportation Division to have its allocation re-assessed. It should

provide copies of all documents relating to the purchase of Operator

C's business operations and indicate how it believes the numbers should

be reallocated. Operator A should also submit a statement from Operator

C supporting the transfer. Operator B should submit a request to the

Manager, Air Transportation Division requesting that its allocation be

redistributed so that it receives an allocation for the Dragon and Zuni

Point corridors. Operator B should submit any written evidence

documenting its shifting of operations from one area of the GCNP to the

Dragon and Zuni Point corridors. Operator C is no longer in business.

Operator D's allocation would be retained by the FAA and be

redistributed among all remaining operators.

F. Flight Plans

Proposed Sec. 93.323 would require each certificate holder

conducting a commercial SFRA operation to file an FAA visual flight

rules (VFR) flight plan with an FAA Flight Service Station for each

flight. Each flight segment (one take-off and one landing) would

require a flight plan. Each certificate holder filing a VFR flight plan

would be responsible for indicating in the ``remarks'' section of the

flight plan the purpose of the flight. There would be at least five

possible purposes: commercial air tour; transportation; repositioning;

maintenance; and training/proving. The term ``commercial air tour''

would be as already defined in the proposed rule. The other five terms

would be defined in the ``Las Vegas Flight Standards District Office

Grand Canyon National Park Special Flight Rules Area Procedures

Manual'' as follows:

1. Transportation--A flight transporting passengers for

compensation or hire from point A to point B on a flight other than air

tour.

2. Repositioning--A non-revenue flight for the purpose of

repositioning the aircraft (e.g., a return flight without passengers

after an air tour and that is conducted to reposition the aircraft for

the next air tour).

3. Maintenance flight--A flight conducted under a special flight

permit, or a support flight to transport necessary repair equipment or

personnel to an aircraft that has a mechanical problem.

4. Training/proving--A flight taken for one of the following

purposes: (1) Pilot training in the SFRA; (2) checking the pilot's

qualifications to fly in the SFRA in accordance with FAA regulations;

or (3) an aircraft proving flight conducted in accordance with section

121.163 or 135.145.

The information obtained from the flight plan would be used to

ensure compliance with the commercial air tours limitation. Certificate

holders may wish to develop ``canned'' flight plans that may be opened

and closed quickly. Copies would not have to be maintained.

The FAA considered requiring certificate holders conducting

commercial air tours to complete a form prior to each commercial air

tour conducted in the GCNP SFRA. Under this proposal, a certificate

holder identified as receiving an allocation would receive one form for

each air tour reported for the base year. The forms would be serialized

and carbonized. Prior to each commercial air tour, the certificate

holder would complete the form with the required information, retain a

copy of its files and keep a copy with the pilot. The information that

would have been required would have been almost identical to the

information required for the quarterly reporting at proposed

Sec. 93.325.

The FAA rejected the form alternative because it would impose

burdensome reporting and recordkeeping requirements on the certificate

holders. The FAA believes that the VFR flight plan requirement is less

burdensome. At this time, the FAA believes that flight plan filing is a

feasible approach.

G. Reporting

The reporting requirement currently contained in Sec. 93.317 would

be moved to proposed Sec. 93.325 and expanded to cover certificate

holders conducting transportation flights, repositioning flights,

maintenance flights or training/proving flights in the GCNP SFRA. The

information reported would be similar to that currently required by

Sec. 93.317.

[[Page 37311]]

Commercial SFRA operations can originate in one time zone and cross

time zones so the FAA wants to ensure that the times reported are

consistent. At this time, the FAA is proposing that time be shown in

Universal Coordinated Time (UTC). The FAA seeks comment on whether UTC

would be the appropriate time measurement or whether an alternative

time zone (i.e., Mountain Standard Time) should be used.

The reporting required by proposed Sec. 93.325 would be submitted

to the Las Vegas Flight Standards District Office on a quarterly basis.

Currently, certificate holders are required to report three times a

year. A number of certificate holders, however, have commented to the

FAA that quarterly filing would be preferred because the timing would

be consistent with other government reporting requirements (IRS, Social

Security, etc.). The information submitted on these quarterly reports

would be used by the FAA and NPS to assess the noise situation in the

GCNP and in development of the Comprehensive Noise Management Plan.

Certificate holders would continue to submit the reports in written

form. Electronic transmission (diskettes, email, etc.) is preferable

and encouraged.

Certificate holders conducting flights in the SFRA under Form 7711

would not be required to report under Sec. 93.325; however, the FAA is

considering establishing such reporting as a condition of the waiver.

This reporting would provide the agencies with a clearer picture of the

types and numbers of flights operating in the SFRA. The FAA seeks

comment on this matter.

H. Transfer and Termination of Allocations

Allocations to conduct commercial air tours in the GCNP SFRA would

be an operating privilege granted to certificate holders who conducted

and reported commercial air tours during the base year. As proposed,

the allocations would be subject to reassessment after two years.

Allocations to conduct commercial air tours in the GCNP SFRA would not

be a property interest.

The FAA recognizes that air tour operators often utilize a variety

of contracting/subcontracting methods to handle passenger loads during

busy periods. Thus, the FAA proposes to allow an allocation to be

transferred among certificate holders, subject to three restrictions.

First, all certificate holders would be required to report any

transfers to the Las Vegas Flight Standards District Office in writing.

Permanent transfers (mergers/acquisitions, etc.) would require FAA

approval through the modification of the operations specifications.

Temporary transfers (seasonal leases, etc.) would be effective without

FAA approval. The FAA would not modify the operations specifications

for temporary arrangements. Second, all certificate holders would be

subject to all other applicable requirements in the Federal Aviation

Regulations. Third, allocation authorizing commercial air tours outside

the Dragon and Zuni Point corridors would not be permitted to be

transferred into the Dragon and Zuni Point corridors, however, could be

used outside the Dragon and Zuni Point corridors. This restriction is

necessary to ensure that flight within these corridors do not increase,

thus, posing a potential safety and noise problem. A certificate holder

may increase its peak season allocation outside the Dragon and Zuni

Point corridors by transferring Dragon and Zuni Point allocations in

the rest of the SFRA.

Examples of the interrelationship between the Dragon and Zuni Point

restriction and the peak season restriction is as follows:

Example 1: Operator A has a total of 1250 GCNP SFRA allocations to

operate in the SFRA, with 625 designated for the Dragon and Zuni Point

corridors. The total peak season GCNP SFRA allocations for Operator A

is 1025. The Dragon and Zuni Point peak season allocations are 513 (of

the 1025 GCNP SFRA peak). The Operator may reallocate its Dragon and

Zuni Point peak allocations in the peak season for the rest of the GCNP

SFRA. It may also reallocate its Dragon and Zuni Point allocations to

the off-peak season for use in the rest of the GCNP SFRA.

Example 2: Operator A has the same allocations as described in

Example 1 above. Operator A, however, decides to lease for 1 year 100

peak season allocations for the Dragon and Zuni Point corridors to

Operator B. Operator B has 50 peak season allocations designated on its

operations specifications for these corridors. This is permitted since

Operator A and Operator B both have current Dragon and Zuni Point

allocations. Thus, Operator A's peak season allocations for these

corridors decrease to 413 (513-100) for the length of the lease.

Operator B's Dragon and Zuni Point Corridor peak season allocations

increase to 150 (50+100) for the length of the lease.

Example 3: Operator A has the same allocations as described in

Example 1 above. In year 1 Operator A experiences high consumer demand

between January and April (off season) for the east/west routes

(outside the Dragon and Zuni Point corridors). Therefore, Operator A

decides to use 100 peak season allocations for the Dragon and Zuni

Point corridors in the off-peak season to operate on the east/west

routes outside these corridors. This reduces the amount of Dragon and

Zuni Point allocations it can use during the peak season to 413 in year

1. In year 2, Operator A experiences a very slow off-peak season

between the months of January and April and does not use all of its

off-peak allocations. In the peak season, however, demand in the Dragon

and Zuni Point corridors is high. Thus, Operator A can use all 513 of

its peak season Dragon and Zuni Point allocations during this time.

Certificate holders who voluntarily cease conducting commercial air

tours in the GCNP SFRA for any consecutive 180-day period would lose

their allocations. This use or lose provision recognizes that the FAA

is the sole controller of these allocations. If not used, the holder

would lose its operating privilege and the FAA would then assert its

control and decide whether to redistribute the allocations. The FAA

considered proposing a time period shorter than 180 days, however,

given the seasonal nature of the air tour business the FAA believes

that a shorter time could be prejudicial against the certificate

holders. The FAA believes that 180 days is a reasonable accommodation

to the certificate holders and allows them the flexibility to manage

their business. The FAA seeks comment on this matter.

The FAA also would retain the right to redistribute, reduce or

revoke allocations based on the need to carry out its statutory mandate

to regulate for efficiency of airspace or aviation safety.

Additionally, the FAA could redistribute, reduce or revoke allocations

if the certificate holder voluntarily surrendered the allocation or in

the event of an involuntary cessation of business. (i.e., FAA shuts

down an operator following an FAA enforcement action). This last factor

likely would occur when the FAA enforced its regulations against a

certificate holder to improve airspace efficiency or aviation safety.

I. Specific Matters for Comment

While the FAA seeks comment on all parts of the NPRM, there are a

number of matters that it specifically would like commenters to

address:

(1) Whether the FAA should use a 5 month peak season (May-Sept), a

three month peak season (July-September), or no peak season for

purposes of assigning allocations.

[[Page 37312]]

(2) Whether the time reported on the quarterly report should be

expressed in Universal Coordinated Time (UCT), Mountain Standard Time,

or another time measurement.

(3) Whether reporting should be imposed as a condition of a Form

7711 and, if so, whether the requirements of proposed Sec. 93.325 would

be appropriate for such operations.

(4) Whether 180 days is a proper measurement of time for the use or

lose provision proposed in Sec. 93.321.

(5) Whether the initial allocation reflects business operations as

of the date of this notice.

(6) Whether the allocations should remain unchanged for any

specific period of time.

Following a review of the comments and further consideration, the

final rule may incorporate changes based on the above questions.

IV. Environmental Review

The FAA has prepared a draft environmental assessment (EA) for this

proposed action to ensure conformance with the National Environmental

Policy Act of 1969. Copies of the draft EA will be circulated to

interested parties and a copy has been placed in the docket, where it

will be available for review.

V. Regulatory Evaluation Summary

Changes to Federal Regulations must undergo several economic

analyses. First, Executive Order 12866 directs that each Federal agency

shall propose or adopt a regulation only upon a reasoned determination

that the benefits of the intended regulation justify its costs. Second,

the Regulatory Flexibility Act requires agencies to analyze the

economic effect of regulatory changes on small businesses and other

small entities. Third, the Office of Management and Budget directs

agencies to assess the effect of regulatory changes on international

trade. These analyses are summarized here in the preamble, and the full

Regulatory Evaluation is in the docket.

Because of the continued high public interest surrounding GCNP

regulations and the potential implications within a small locality, the

FAA has determined that this Notice of Proposed Rulemaking (NPRM) would

be ``a significant regulatory action'' as defined in the Executive

Order and the Department of Transportation Regulatory Policies and

Procedures. The FAA also has determined that this NPRM would have a

significant economic impact on a substantial number of small entities

(commercial air tour operators conducting flights within Grand Canyon

National Park), and warrants an initial regulatory flexibility analysis

(IRFA).

In conducting these analyses, the FAA has also determined that this

proposed rule: (1) would not constitute a barrier to international

trade; and (2) would not contain any Federal intergovernmental or

private sector mandate.

A. Benefits

The primary intended benefit of this proposed rule is its

contribution toward achieving the public mandate imposed by Public Law

100-91 to substantially restore natural quiet in the GCNP. This is one

of three actions currently being taken by the FAA to move toward that

goal. One of the other two actions is issuance of a notice of proposed

rulemaking to make certain modifications of the airspace designations

in GCNP. The other action is notification of modifications to air tour

routes in the park. In addition to a discussion of restoration of

natural quiet, a quantified analysis is given in this benefits section

of the increased value that less aircraft noise may provide to ground

visitor in the park. The FAA has estimated potential benefits two ways

in this analysis. First, restoration of natural quiet is discussed.

Second, a quantified estimate is made of the increased value of trips

to the park by ground visitors if this proposal were implemented.

The FAA's benefits analysis is limited to commercial air tour

aircraft noise, because only commercial air tours would be affected by

this proposed rule. It is recognized that other aircraft operate in the

vicinity of the Grand Canyon, either above the SFRA or along designated

corridors (general aviation (GA)) through the SFRA. This noise has not

been measured on included in the noise models used to obtain the

estimates contained in this analysis because the FAA believes the

amount of noise produced by these aircraft is very small compared to

that of commercial all tour aircraft. GA traffic accounts for about 3

percent of all aircraft traffic in the GCNP according to the Las Vegas

FSDO. The FAA does not believe that this amount of noise would affect

the accuracy of its estimates. The FAA welcomes comments on this

matter.

1. Restoration of Natural Quiet

The policy decision of GCNP is that a substantial restoration

requires that 50% or more of the park achieve ``natural quiet'' (i.e.,

no aircraft audible) for 75-100 percent of the day. That level of

``quiet'' (50 percent) does not exist today in the park, in spite of

past actions to limit noise. Based on noise modeling, the FAA estimates

that today only about 32 percent of the park area has had natural quiet

restored. Furthermore, if no additional action is taken estimated

future air tour growth will reduce even that number to about 25 percent

in nine to ten years. On the other hand, noise modeling indicates that

this proposal, together with the other two FAA actions, would increase

the restoration of natural quiet to slightly more than 41 percent and

maintain that level in the future. The FAA will monitor future

operations in the park to determine the actual level of natural quiet

that is restored. It necessary, further actions will be taken to

ultimately achieve the goal of substantial restoration of natural

quiet.

2. Increased Value of Ground Visit Analysis

The benefits of noise reduction attributable to this rulemaking can

be broadly categorized as use and non-use benefits. Use benefits are

the benefits perceived by individuals from the direct use of a resource

such as hiking, rafting, or sightseeing. Non-see benefits are the

benefits perceived by individuals from merely knowing that a resource

exists, or is perserved, in a given state. The act benefits of this

rulemaking have been estimated and are presented below. The non-use

benefits attributable to this rulemaking have not been estimated.

The available visitation data for GCNP permits the categorization

of visitors into backcountry users, river users, and other visitors.

The activities included in the ``other visitors'' category primarily

involves sightseeing, as well as other activities such as hiking or

camping not related to background or river use. The number of visitor-

days (defined as one visitor to a location for all or any part of one

day) in 1997 for these visitor groups is presented below.

Number of Visitor-Days--Grand Canyon National Park, 1997

------------------------------------------------------------------------

Visitor-

Visitor group days

------------------------------------------------------------------------

Backcountry................................................ 99,137

River...................................................... 182,481

Other...................................................... 5,788,187

------------

Total................................................ 6,069,805

------------------------------------------------------------------------

Source: National Park Service.

While the FAA, based on its projections on air traffic growth at

the airports around GCNP, assumes that the number of air tours would

increase at an annual rate of 3.3 percent, the FAA nevertheless,

assumes that the number of visitor-days at GCNP would remain constant

at 1997 levels throughout the evaluation period of this rulemaking.

This assumption is considered to

[[Page 37313]]

reasonable because of the actions the NPS is taking to control visitor

growth.

Permits for backcountry and river use are limited to a maximum

number that can be issued each year. Also, the NPS plans to prevent

cars from entering GCNP. Rim visitors will be required to park outside

GCNP and take a shuttle into the Park. This will greatly reduce or

possibly eliminate any future growth in the number of rim visitors.

Last, an assumption of constant visitation is a conservative approach

that would not bias the indicated net benefits of the rulemaking upward

and would also probably results in benefits being somewhat

underestimated.

The GCNP visitor survey indicates that these different visitor

groups are variously affected by aircraft noise (HBRS, Inc. and Harris,

Miller, Miller, & Hanson, Inc. 1993). This survey asked respondents to

classify the interference of aircraft noise with their appreciation of

the natural quiet of GCNP as either ``not at all,'' ``slightly,''

``moderately,'' very much,'' or ``extremely.'' The percent of visitors

indicating these impacts is presented below by visitor group.

Visitors Affected by Aircraft Noise--Grand Canyon National Park

------------------------------------------------------------------------

Percent of visitors by category

--------------------------------------

Impact Backcountry River Other

(percent) a (percent) b (percent)

------------------------------------------------------------------------

Not At All....................... 41.0 45.5 76.0

Slightly......................... 15.0 16.5 11.0

Moderately....................... 13.5 10.0 4.0

Very Much........................ 14.5 12.5 4.0

Extremely........................ 16.0 15.5 5.0

------------------------------------------------------------------------

a Average for summer and fall users.

b Average for motor and oar users.

Source: HBRS, Inc. and Harris, Miller, Miller, & Hanson, Inc. 1993.

The economic studies selected for use in the benefits transfer, and

their indicated visitor-day values, are listed below. These values are

also known as ``consumer surplus.'' Consumer surplus is the maximum

amount an individual would be willing to pay to use a resource, minus

the actual costs of use. It is a measure of the net economic benefit

gained by individuals from participating in recreational activity.

Estimated Visitor-Day Values (Consumer Surplus)--Grand Canyon National Park

----------------------------------------------------------------------------------------------------------------

Visitor-day

Visitor group Study Activity value (1998 $)

----------------------------------------------------------------------------------------------------------------

Backcountry............................. Bergstrom and Cordell 1991 Backpacking (national $37.13

survey).

River................................... Bureau of Reclamation 1995 River use in Grand Canyon 92.44

NP.

Other................................... Haspel and Johnson 1982... Visit to Bryce Canyon NP.. 48.72

----------------------------------------------------------------------------------------------------------------

All values indexed to 1998 using the Consumer Price Index for all urban consumers.

The visitor-day value for backcountry use, $37.13, was derived from

a national study of outdoor recreation (Bergstrom and Cordell 1991).

That study estimated an average of $25.88 per visitor-day in consumer

surplus for backpacking (1987). That value indexed to 1998 is $37.13

per visitor-day.

The visitor-day value for river use, $92.44, was derived from the

economic analysis contained in the Final Environmental Impact Statement

for Glen Canyon Dam operations (Bureau of Reclamation 1995).

Originally, the value per visitor-day for river use was $77.24 in 1991.

That value indexed to 1998 is $92.44 per visitor-day.

The visitor-day value for all other visitor uses in GCNP, $48.72,

was derived from an economic analysis of recreation at Bryce Canyon

National Park. The visitor uses addressed by that analysis were

considered to closely match those included in the ``other visitors''

category for GCNP, primarily sightseeing. That analysis estimated two

consumer surplus values, $71.00 and $62.00 per vehicle in 1980, using

alternative techniques. The average of those two values, $66.50 per

vehicle, was used in the present analysis. An average of 2.7 visitors

per vehicle per vehicle for Bryce Canyon National Park was then used to

convert that average to a visitor-day value, $24.63 ($66.50 per vehicle

divided by 2.7 visitors per vehicle). That value indexed to 1998 is

$48.72 per visitor-day.

The FAA assumed that these visitor-day values represent the net

economic benefits obtained from recreational uses in GCNP absent any

impacts from commercial air tour aircraft noise. Therefore, these

values potentially under-state recreational benefits to the extent that

the were estimated in conditions where aircraft noise was present.

There is no known economic study that estimates the reduction in

the value of recreational uses due to commercial air tour aircraft

noise for areas similar to GCNP. The reductions shown in the chart

below were assumed in the present analysis.

Assumed Reductions in Visitor-Day Values--Grand Canyon National Park

------------------------------------------------------------------------

Reduction

Impact (percent)

------------------------------------------------------------------------

Slightly................................................... 20

Moderately................................................. 40

Very Much.................................................. 60

Extremely.................................................. 80

------------------------------------------------------------------------

These data and assumptions imply the following total loss in value

from aircraft noise in 1998. The total loss in value of $34.5 million

was calculated as the product of the number of visitor-days, the

proportion of visitors affected by aircraft noise, the visitor-day

value, and the assumed proportional reduction in the visitor-day value,

for respective impact levels and visitor categories.

[[Page 37314]]

Estimated Total Lost Value (Consumer Surplus) From Aircraft Noise--Grand Canyon National Park, 1997

[In $ thousands]

----------------------------------------------------------------------------------------------------------------

Visitor category

-----------------------------------------------------------------------------------------------------------------

Impact Backcountry River Other Total

----------------------------------------------------------------------------------------------------------------

Slightly.................................................... $110 $557 $6,204 $6,871

Moderate.................................................... 199 675 4,512 5,386

Very Much................................................... 320 1,265 6,768 8,353

Extremely................................................... 471 2,092 11,280 13,843

---------------------------------------------------

Total................................................. 1,100 4,589 28,764 34,453

----------------------------------------------------------------------------------------------------------------

The benefit of this rulemaking is the reduction of the total lost

value associated with the resulting lower future levels of noise from

commercial air tour aircraft. Through aircraft noise modeling, FAA has

predicted the number of square miles within GCNP that would be affected

by various levels of aircraft noise, both with and without the

commercial air tour limitation and change in routes. These noise levels

were quantified by a nonlinear measure. The average linearized noise

measure, weighted by the number of affected square miles, is presented

below.

Predicted Future Noise Reductions in Grand Canyon National Park Due to the Commercial Air Tour Limitation and

New Routes

----------------------------------------------------------------------------------------------------------------

Weighted average linearized Noise

noise measure reduction due

-------------------------------- to the

Year limitation and

Limitation and No action change

route change (percent)

----------------------------------------------------------------------------------------------------------------

1998............................................................ 1,219.23 1,496.04 18.50

2000............................................................ 1,219.23 1,577.47 22.71

2003............................................................ 1,219.23 1,713.06 28.83

2008............................................................ 1,219.23 1,943.88 37.28

----------------------------------------------------------------------------------------------------------------

These percentage reductions in commercial air tour aircraft noise

were applied to the total lost consumer surplus value from aircraft

noise in 1998 ($34.45 million) to estimate the current use benefits for

future years. Linear interpolation was used to estimate levels of noise

reduction for years of the evaluation period not shown in the table

above. This calculation assumes that benefits increase linearly with

noise reduction (i.e., a constant marginal benefit from noise

reduction). A three percent discount rate was then applied to calculate

the present value of use benefits (discounted to the year 1999) over

the ten-year evaluation period. A three percent discount rate is

supported by the economics literature for natural resource valuation

(e.g., Freeman 1993). Federal rulemakings also support a three percent

discount rate for lost natural resource use valuation (61 FR 453; 61 FR

20584). The resulting use benefit estimates are presented below.

Estimated Use Benefits at 3%--Commercial Air Tour Limitation Grand

Canyon National Park

[In $ millions]

------------------------------------------------------------------------

Estimated

Year benefits Present value

------------------------------------------------------------------------

2000.................................... $7.82 $7.60

2001.................................... 8.53 8.04

2002.................................... 9.23 8.45

2003.................................... 9.93 8.82

2004.................................... 10.51 9.09

2005.................................... 11.10 9.29

2006.................................... 11.68 9.50

2007.................................... 12.26 9.68

2008.................................... 12.83 9.84

2009.................................... 13.43 9.90

-------------------------------

Total............................... 107.32 90.29

------------------------------------------------------------------------

It is important to recognize significant uncertainties in this

estimation. One area of uncertainty relates to the percentage

reductions in visitor-day values that can be attributed to commercial

air tour aircraft noise. It was assumed above that there is a 20

percent reduction for visitors affected ``slightly,'' a 40 percent

reduction for visitors affected ``moderately,'' a 60 percent reduction

for visitors affected ``very much,'' and an 80 percent reduction for

visitors affected ``extremely.'' In recognition of the uncertainty

surrounding this assumption, one-half of these percentage reductions

were used to calculate an alternative benefit estimate. Additionally,

in recognition of the discount rate recommended in OMB Circular A-94,

alternative benefit estimates were calculated using a seven percent

discount rate. These alternative benefit estimates are presented below.

[[Page 37315]]

Alternative Estimates of Use Benefits

[In $ millions]

----------------------------------------------------------------------------------------------------------------

Visitor-Day Value Reduction Assumption Discount rate

----------------------------------------------------------------------------------------------------------------

Slightly Moderately Very much Extremely 3% 7%

----------------------------------------------------------------------------------------------------------------

Total Present Value Over the 10-Year Evaluation Period

----------------------------------------------------------------------------------------------------------------

20% 40% 60% 80% $90.29 $72.98

10% 20% 30% 40% 45.14 36.49

----------------------------------------------------------------------------------------------------------------

Total Present Value Over the Five-Year Evaluation Period

----------------------------------------------------------------------------------------------------------------

20% 40% 60% 80% 42.00 37.37

10% 20% 30% 40% 21.00 18.67

----------------------------------------------------------------------------------------------------------------

Total Present Value Over the Two-Year Evaluation Period

----------------------------------------------------------------------------------------------------------------

20% 40% 60% 80% 15.63 14.76

10% 20% 30% 40% 7.82 7.38

----------------------------------------------------------------------------------------------------------------

The use benefits discussed above assume that the commercial air

tour limitation and the change in routes would occur at about the same

time. The rule being analyzed, however, only limits commercial air

tours. Hence, benefit estimates were calculated using the same

methodology described above, but only applying the predicted noise

reduction due to the commercial air tour limitation. These alternative

benefit estimates are presented below.

Alternative Estimates of Use Benefits

[In $ millions]

----------------------------------------------------------------------------------------------------------------

Visitor-Day Value Reduction Assumption Discount rate

----------------------------------------------------------------------------------------------------------------

Slightly Moderately Very much Extremely 3% 7%

----------------------------------------------------------------------------------------------------------------

Total Present Value Over the 10-Year Evaluation Period Commercial Air Tour Limitation Only

----------------------------------------------------------------------------------------------------------------

20% 40% 60% 80% $44.05 $34.61

10% 20% 30% 40% 22.03 17.31

----------------------------------------------------------------------------------------------------------------

Total Present Value Over the Five-Year Evaluation Period Commercial Air Tour Limitation Only

----------------------------------------------------------------------------------------------------------------

20% 40% 60% 80% 15.68 13.78

10% 20% 30% 40% 7.84 6.89

----------------------------------------------------------------------------------------------------------------

Total Present Value Over the Two-Year Evaluation Period Commercial Air Tour Limitation Only

----------------------------------------------------------------------------------------------------------------

20% 40% 60% 80% 4.22 3.97

10% 20% 30% 40% 2.11 1.98

----------------------------------------------------------------------------------------------------------------

In addition to these use benefits, this rulemaking may generate

significant no-use benefits. The FAA does not have adequate data to

estimate the non-use benefits of aircraft noise reduction at GCNP.

However, there are other studies that suggest potentially significant

non-use benefits that might be attributed to this rulemaking. One such

study was done for the Bureau of Reclamation regarding the operation of

the Glen Canyon Dam (Hagler Bailly Consulting 1995). A national survey

was conducted for this study, indicating significant non-use benefits

for changes in Glen Canyon Dam operations. While the magnitude of non-

use benefits estimated in that study are not directly applicable to

this rulemaking, potentially significant non-use benefits associated

with aircraft noise reduction are suggested.

B. Costs of Compliance and Initial Regulatory Flexibility Determination

and Analysis

The proposed rule would impact all business entities conducting

commercial air tours over the GCNP. Data collected for the base year

period (May 1997 to April 1998) shows that there were 25 such entities

(24 operators, one of whom operated as a fixed wing operator as well as

a helicopter operator) at that time. This time period will be

considered the baseline for the analysis. All of the entities are

``small'' as defined by the Small Business Administration (SBA). Since

every air tour operator doing business in the GCNP would be

significantly impacted and they all satisfy the definition of a ``small

business'', the FAA concludes that there would be a significant

economic impact on a substantial number of small entities.

Consequently, the FAA has conducted this analysis of compliance costs

to include an initial regulatory flexibility analysis as required by

the Regulatory Flexibility Act.

The total cost of this rulemaking would largely depend on how

commercial air tour operators respond to the changes. After reviewing a

number of operating alternatives the FAA has concluded that the cost of

the proposed regulation (e.g., five-month peak season) would be a

reduction in net operating revenue of $177.6 million or $114.6 million

discounted over the next ten years. There may be some additional cost

associated with implementing the proposed alternative (i.e.,

activating, filing, and closing a flight plan). This is not expected to

be

[[Page 37316]]

a significant cost but the FAA is unable to measure fully the cost

impact at this time and requests public comment. For other provisions

of the proposed rule ((1) requesting modification and initial

allocations and (2) transfer and termination of allocations), the ten-

year cost to air tour operators would be $30,000 or $23,000,

discounted. Finally, the FAA costs over the next ten years (including

initial allocations) would be $1,445,900 or $1,016,900 discounted. In

sum, the total cost of this proposed rulemaking over the next ten years

would be $179.1 million or $115.6 million, discounted.

1. Revenue Impact of Compliance Model

The main economic impact resulting from limiting commercial air

tours in the GCNP SFRA is the reduction in projected net operating

revenue. This number can be calculated by subtracting the net operating

revenue associated with the projected future number of operations under

the operations limitation from the net operating revenue associated

with the projected future number of operations without the operations

limitation.

The number of commercial air tours conducted during the May 1997-

April 1998 base year period was used for determining the base number of

air tours in this analysis. This information, by operator and by route,

was provided to the FAA in accordance with current section 93.317 of

Title 14, Code of Federal Regulations (14 CFR). Under the proposed

rule, each air tour operator that conducted and reported an air tour

during that period under existing section 93.317 would receive one

allocation for each air tour reported.

A certificate holder's total allocations would be divided up into

peak and off-peak season. The FAA proposes that the peak season be

defined as the period from May 1-September 30; and the off-peak season

would be the period October 1-April 30. This peak/off-peak definition

coincides with the summer and winter season for curfew purposes. Peak/

off-peak allocations would be based on the information reported to the

FAA for the same time period during the base year.

Under the proposed rule, allocations also would be separated into

those that may be used in the Dragon and Zuni Point corridors and those

that may be used in the rest of the SFRA. Dragon and Zuni Point

corridors allocations again would be based on the number of air tours

an operator conducted and reported in those corridors during the base

year period. Operators reporting no commercial air tours in these

corridors during the base year period would receive no allocations for

the Dragon and Zuni Point corridors.

The baseline number of passengers was estimated for each operator

in this analysis in a four-step process using data provided from

interviews and surveys of the affected air tour operators. First, the

FAA determined how many aircraft and which aircraft, by route, were

used in the base year time period. Second, the FAA identified the

maximum number of passengers that each aircraft could legally carry.

Next, the FAA determined the load factor for type of aircraft on each

route by operator (in some cases, air tour operators were able to

provide the FAA this estimate by time of year). After calculating the

number of passengers for each route and for each type of aircraft, the

FAA was able to sum this information and determine the baseline number

of passengers. The FAA estimates the baseline number of passengers to

be about 616,000.

The baseline gross operating revenue was calculated for each

operator for each route in this analysis using data provided from

published advertisements from air tour operators on the price of each

type of air tour. The base period gross operating revenue by route was

calculated by multiplying the estimated number of passengers that flew

on a specific route for a specific operator by the published retail

fare. No discounts are assumed.

Variable operating costs for GCNP air tour operators are defined as

the costs for crews, fuel and oil, and maintenance per flight hour. The

data by type of aircraft can be found on Table 4-20 of Economic Values

for Evaluation of Federal Aviation Administration Investment and

Regulatory Programs published by the Federal Aviation Administration,

FAA-APO-98-8, June 1998. Estimates of the time taken to fly a

particular route were obtained from air tour pilots and individuals in

the Las Vegas Flight Standards District Office (FSDO). To calculate the

variable operating cost for a particular route and type of aircraft,

the FAA multiplied the hourly variable operating costs by the time to

fly the particular route. In a few instances, the travel time was

unavailable--the FAA estimated the time using information from other

air tours and the time it took to complete those tours.

Baseline net operating revenue for each aircraft by route is the

difference between the gross operating revenue for each route by

aircraft and the variable operating costs for each route by aircraft.

An air tour operator's total net operating revenue is the sum of the

net operating revenues from all of the routes used by that air tour

operator.

The FAA forecast rate of compound annual growth in the GCNP is

estimated at 3.3 percent per year. This growth rate was derived from a

composite of tower operations of four Las Vegas vicinity airports and

those of Tusayan as reported in the 1994 Tower Activity Forecast (TAF).

It represents different rates of growth at the West and East ends of

the GCNP. The FAA estimated the future number of monthly operations

without the proposed rule using projections as described above for each

route by aircraft type and by operator.

The model does not take into consideration that air tour operators

could switch from smaller-sized aircraft to larger-sized aircraft.

Consequently, in this analysis, the number of available seats is fixed

throughout the entire time period. Holding the number of seats constant

and assuming that more individuals would want to take air tours in the

future implies that air tour operators should be able to raise air tour

prices. The model does not consider a new equilibrium price given that

supply becomes fixed while demand increases. Consequently, this model

assumes a worst case analysis.

2. Cost of Various Alternatives to Operators

a. Peak Season Limitations

The costs of the three operating scenarios considered in this

rulemaking are discussed below. Each of the operating scenarios

considers an alternative delineation of the annual commercial air tours

against which the proposed operations limitation would be applied. The

three alternatives are as follows: (1) The proposed 5-month peak season

(May 1-September 30) with a 7-month off-peak season (October 1-April

30); (2) a uniform year; e.g., no peak/off-peak seasonal delineation;

and (3) a 3-month peak season (July 1-September 30) with a 9-month off-

peak season (October 1-June 30).

(1) The Proposed Five-Month Peak Season (May 1 to September 30)

The proposed rule would limit all commercial air tours in the GCNP

SFRA on a 12-month basis to the number of air tours reported in

accordance with current section 93.317 of 14 CFR for the twelve-month

period from May 1, 1997 to April 30, 1998. Proposed section 93.319 of

14 CFR would establish this commercial tour limitation. The number of

commercial air tours that a certificate holder could conduct would be

shown

[[Page 37317]]

on the certificate holder's operations specifications as an allocation.

A certificate holder's total allocations would be divided up into

peak season and off-peak season. Under the proposed rule, the peak

season would be defined as the period from May 1 to September 30; the

off-peak season would be the period October 1 to April 30. This peak/

off-peak definition would coincide with the summer and winter season

curfew purposes. Peak/off-peak allocations would be based on the

information reported to the FAA for the time period during the base

year period. Off-peak allocations could not be used during peak season;

however, peak season allocations could be used during off-peak. Under

the proposed rule, allocations also would be separated into those that

may be used in the Dragon and Zuni Point corridors and those that may

be used in the rest of the SFRA but not in the Dragon and Zuni Point

corridors. Dragon and Zuni Point allocations again would be determined

based on the number of commercial air tours an air tour operator

reported in this region for the base year period. Operators reporting

no commercial air tours in these corridors for the base year would

receive no allocations for these corridors.

The FAA is proposing that these allocations would be valid for a

two-year period. After that time, the certificate holder's allocations

may be revised or removed based on the data submitted under proposed

section 93.325; an updated noise analysis; and/or the status of the

Comprehensive Noise Management Plan. In this analysis, the FAA assumed

that this operation process would continue for ten years.

(2) A Uniform Year With No Peak/Off Peak Delineation

The first operating alternative to the proposed rule would limit

all commercial air tours in the GCNP SFRA on a 12-month basis to the

number of air tours reported in accordance with current section 93.317

for the year May 1, 1997 to April 30, 1998. As discussed under the

proposed rule, the number of commercial air tours that a certificate

holder could conduct would be shown on the certificate holder's

operations specifications as an allocation. Air tour operators, under

this alternative could compress all of their air tour allocations into

the most active period should they desire. It is also assumed, as

discussed under the proposed rule, that allocations would be separated

into those that may be used in the Dragon and Zuni Point corridors and

those that may be used in the rest of the SFRA.

It is assumed that these allocations would also be valid for a two-

year period. After that time, the certificate holder's allocations may

be revised based on the data submitted under proposed Sec. 93.325; an

updated noise analysis; and/or the status of the Comprehensive Noise

Management Plan.

The FAA is not currently able to estimate how this alternative

would impact net revenue differently than the proposed rule's impact on

net revenue. Nevertheless, the FAA is aware that this alternative would

allow an operator to shift air tour operations from the off-peak,

winter season to the peak, summer season. The incentive to do this

would be particularly strong if prices are higher during the peak,

summer season or if aircraft have more passengers per flight, than

during off-peak, winter season.

If prices are higher or aircraft are flown with more passengers per

flight during the peak, summer season, an operator could reduce the

proposed regulation's impact on its net revenues by shifting operations

from the off-peak, winter season to the peak, summer season.

Unfortunately, if the air tour operators were allowed to shift

operations from the winter to the summer, then aircraft noise would

also be shifted from the winter (when aircraft noise is less of a

problem) to the summer (when aircraft noise is more a problem).

(3) A Three-Month Peak Season (July 1 to September 30)

Another operating alternative to the proposed rule would also limit

all commercial air tours in the GCNP SFRA on a 12-month basis.

Commercial air tours conducted by certificate holders in the SFRA would

not exceed the amount of air tours reported in accordance with current

section 93.317 for the year May 1, 1997 to April 30, 1998. As discussed

under the previous alternative, the number of air tours that a

certificate holder could conduct would be shown on the certificate

holder's operations specifications as an allocation.

Under this alternative, as with the other alternatives, a

certificate holder's total allocations would also be divided up into

peak season and off-peak season.

Allocations also would be separated into those that may be used in

the Dragon and Zuni Point corridors and those that may be used in the

rest of the SFRA. Dragon and Zuni Point allocations again would be

determined based on the number of air tours an operator reported in

this region for the base year. Only operators who reported air tours in

these corridors for the base year would receive allocations for these

corridors.

It is assumed that these allocations would also be valid for a two-

year period. After that time, the certificate holder's allocations may

be revised based on the data submitted under proposed Sec. 93.325; an

updated noise analysis; and/or the status of the Comprehensive Noise

Management Plan.

The FAA is not currently able to estimate how this three-month peak

seasion alternative would impact net revenue in a different way than

the proposed rule's impact on net revenue. Nevertheless, the FAA is

aware that this alternative would allow an operator to shift commercial

air tours from the off-peak winter season to May and June. The

incentive to do this would be strong if prices are higher during May

and June or if aircraft have more passengers per commercial air tour

during May and June than during the off-peak, winter season. If prices

are higher during May or June or if aircraft can be flown with more

passengers per flight during these two months, then an operator could

reduce the proposed regulation's impact on net revenue by shifting air

tour allocations from the off-peak winter season to May and June. If

commercial air tour operators were allowed to shift air tours from the

winter to May and June, then aircraft noise would also be shifted from

the winter (when there is less aircraft noise) to these two months.

b. Cost of Various Reporting Requirements Alternatives to Operators

The FAA considered two reporting requirement alternatives in the

proposed rule. They are quarterly reporting and trimester reporting.

The existing rule requires certificate holders to report three times

annually. Since the existing rule already requires certificate holders

to establish a system to implement the reporting requirement, there are

assumed to be no start-up costs.

(1) Reporting on a Trimester Basis

It is assumed that the information for these reports is currently

being updated throughout the entire timeframe. The total amount of time

needed to update this information is a function of the number of

aircraft maintained by each operator. The FAA assumes that it takes

each operator about five minutes per aircraft per day regardless of the

season to record the updated information into a master spreadsheet. The

total cost of the existing rule in 1997 dollars for this task is

$753.000 or $529,000 discounted over ten years at 7 percent. This is a

[[Page 37318]]

current requirement of the regulations (adopted in 1996) and these

costs were previously accounted for in the regulatory evaluation

prepared for the 1996 final rule.

The written information would have been provided to the Las Vegas

FSDO three times per year. The FAA assumes that each operator would

have to collate and verify the information that they had been

collecting throughout the year. The time it takes to complete these two

tasks would be two hours per operator regardless of the number of

aircraft and assumes that the operators would have been recording the

information throughout the year. The total cost to the industry of the

existing rule is estimated at $34,000 for ten years or $24,000

discounted.

In sum, the FAA estimates that the cost associated with regular

updating and trimester reporting for the existing rule is $787,000 or

$552,000 discounted over ten years. The FAA is, however, proposing to

replace the trimester reporting requirement with a quarterly reporting

requirement.

(2) Reporting on a Quarterly Basis

As stated previously under the section on trimester reporting, it

is assumed that updating is taking place throughout the entire

timeframe. The total amount of time needed to update this information

would be a function of the number of aircraft maintained by each

operator. The FAA assumes that it would take each operator about five

minutes per aircraft per day regardless of the season to record the

updated information onto a master spreadsheet. The total cost in 1997

dollars absent the existing rule for this task would be $753,000 or

$529,000 discounted over ten years at 7 percent.

Under this reporting requirement scenario, which is the proposed

rule, the written information would have to be provided to the Las

Vegas FSDO four times per year. The FAA assumes that each operator

would have to collate and verify the information that they have been

collecting throughout the year. The time it takes to complete these two

tasks would be two hours per operator regardless of the number of

aircraft and assumes that the operators would have been recording the

information throughout the year. Given the wage rate of a Director of

Operations at $22.50 per hour, the FAA estimates that this provision

would cost each operator $180 per year ($22.50/hour x 2 hours x 4

times/year=$180 per operator; 200 hours/year to the industry, assuming

the operator of the mixed fleet reports fixed-wing and helicopter tour

business separately) absent the existing rule. The total cost to the

industry is estimated at $45,000 for ten years or $31,600 discounted.

In sum, the FAA estimates that the cost associated with regular

updating and quarterly reporting absent the existing rule would be

$798,000 or $560,000, discounted over ten years.

The incremental cost of reporting three times annually versus four

times annually is the difference in costs shown previously. The total

incremental cost to industry of the proposed rule is estimated at

$11,000 for ten years or $8,000 discounted. For the first year, the

incremental costs are approximately $1,000. The two-year costs are

estimated at $2,000. The five-year costs are estimated at $5,000 or

$4,000 discounted.

Some commercial air tour operators stated that trimester reporting

would be more burdensome than quarterly reporting because trimester

reporting does not correspond with other business reporting

requirements. However, because an additional fourth report would be

required, quarterly reporting would be more costly.

c. Cost of Implementing the Rule

The FAA considered two means of monitoring the allocation usage--a

form method and a flight plan method. The flight plan method is

proposed in this rule. The following is a discussion of these two

methods.

(1) Form Method

The form method would require certificate holders conducting

commercial air tours in the Special Flight Rules Area (SFRA) to

complete an SFRA Operation Form provided by the FAA prior to the

beginning of each commercial SFRA operation. A commercial SFRA

operation would consist of a point-to-point flight of the aircraft.

The FAA estimates that it would take about one minute for the

certificate holder to complete each form because much of the

information would have been pre-printed. Based on the previously noted

operators' reports for the base year period, the FAA estimates that no

more than approximately 88,000 commercial air tours would have to be

reported annually. The FAA estimates that the total annual cost in 1997

dollars would be between $29,000 and $30,000 [$20.00/hour x 88,000

forms x 1 minute per form]/60 = $29,300/year; 1,467 hours per year to

the industry) or about $27,400 discounted in the first year. The total

cost would be $293,000 over ten years or $206,000, discounted. The two-

year costs are estimated at $58,600 or $53,000 discounted. The five-

year costs are estimated at $146,500 or $120,300 discounted.

(2) Flight Plan Method

Section 93.323 of the proposed rule would require each certificate

holder of a commercial SFRA operation to file a visual flight rules

(VFR) flight plan with an FAA flight Service Station for each flight. A

flight consists of one take-off and one landing. The ``remarks''

section of the flight plan would be completed to indicate the purpose

of the flight out of five designated purposes. These purposes would be:

(1) commercial air tour; (2) transportation; (3) repositioning; (4)

maintenance; and (5) training/proving. The information obtained from

the flight plan would be used to ensure compliance with the commercial

air tour limitation. Copies would not have to be maintained or carried

on board by the certificate holder.

The extent to which an operator would be impacted by these costs

would depend upon the volume of commercial air tour business in the

GCNP and the number of aircraft and pilots providing air tour service.

Additionally, the cost impact would be influenced by whether the

operator conducts air tours daily on a regular frequency.

Relying on information from the Las Vegas flight Standards District

Office (FSDO), the FAA has identified the following four principal

areas where start up costs for the larger, more regularly scheduled

operators would be incurred: (a) Creation of ``canned'' VFR flight

plans (templates) to be filed with the Reno or Prescott Flight Service

Station; (b) rewriting of existing General Operations Manuals to

incorporate the new procedures; (c) set-up of a pilot training program;

and (d) training of pilots. The FAA assumes each operator's Director of

Operations (DO) would be responsible for the first three tasks and

possibly the fourth, the instructing of the pilots in the new

procedures.

The FAA estimates that the amount of time required of the DO to

create and file a template with the Flight Service Stations (task `a')

is about 2 days. Task `b' would require 2 days for part 121 operators

and part 135 operators; and task `c', the development of pilot

instruction in VFR flight plan procedures would require 2 days.

Finally, the FAA believes that the VFR flight plan procedures could be

presented to the pilots currently conducting air tours in the Canyon

through an operational bulletin. Presentation of the procedures to new

hires would be part of an operator's on-going costs; the FAA assumes

each

[[Page 37319]]

operator would incorporate this into the periodic review, modification,

and update of plans as noted in the next section.

The FAA estimates that the total start-up costs to the Grand Canyon

air tour operators for the VFR flight filing requirements would be

about $22,320 or $20,850 discounted.

The VFR flight filing procedures requires the following sequence of

activities: (1) Filing a flight plan; (2) activating the flight plan;

and (3) closing the flight plan. The opening and closing of a flight

plan would be the responsibility of the pilot-in-command and would be a

part of normally assigned duties. This usually takes about one to five

minutes.

The FAA is unable to accurately assess the variable or on-going

costs of the VFR flight filing plan procedures at this time.

Specifically, the FAA cannot precisely account for the costs incurred

by opening and closing a flight plan, nor can the FAA accurately

account for the costs each operator would typically incur in filing a

flight plan. The FAA, therefore, requests public comment.

The FAA believes there would also be additional on-going

requirements and costs imposed on the Las Vegas FSDO with proposed

Sec. 93.323. Coordinating and cross referencing the daily air tour

activity recorded by the Flight Service Station with the operator

reporting requirements, and monitoring the activity for potential

enforcement action would add requirements to the Las Vegas FSDO's

current mission that would task current staffing levels. Some of these

activities (not enforcement) could be a part of the workload of a

senior analyst/statistician assigned to manage the reporting

requirements.

d. Cost of Other Provisions to Operators

Operators would incur costs associated with (1) requesting

modification to initial allocations and (2) transfer of allocations.

The FAA estimates that the cost of these provisions could be up to

$20,000 or $14,000 discounted over ten years. The following is a

discussion of the costs associated with these two provisions.

(1) Requesting Modification to Initial Allocations

The FAA recognizes that the air tour business in the GCNP is

constantly changing. Due to mergers/acquisitions, bankruptcies, etc.,

certificate holders may believe that the data submitted for May 1997 to

April 1998 does not reflect their current business operations.

Therefore, the FAA would permit any certificate holder who believes

that the base year data does not reflect its current business operation

to submit a written request to the Manager, Air Transportation Division

that its allocation be reassessed. The request should explain why the

base year reported data does not properly reflect its current

operations. The operator must provide supporting documentation.

The FAA estimates that as many as five operators may request

modifications to their initial allocations. The FAA estimates that each

operator would incur one-time costs of between $500 and $1,000 to

complete and provide the required information to the FAA. Therefore the

one-time cost to the industry would be between $2,500 and $5,000 or

between $2,300 and $4,700, discounted. The FAA requests information

from affected air tour operators on the validity of this estimate.

(2) Transfer of Allocations

Allocations to conduct air tours in the GCNP SFRA would be

considered an operating privilege initially granted to certificate

holders, who conducted commercial air tours during the base year and

reported them to the FAA. As proposed, the allocation would be subject

to reassessment no earlier than two years after the effective date of

the rule. The FAA recognizes that air tour operators often utilize a

variety of contracting/subcontracting methods to handle passenger loads

during busy periods. Thus, the FAA proposes to allow allocations to be

transferred among certificate holders, subject to several restrictions.

Under the proposed rule a certificate holder would be required to

report any transfer of allocations to the Las Vegas FSDO in writing.

The FAA distinguishes between temporary and permanent transfers of

allocations. In the former case, the FAA recognizes the current

business practice of air tour operators to occasionally sell, exchange

or otherwise transfer air tour bookings (usually to an overflow

operator) to accommodate unexpected surges in demand.

Temporary transfers would not require FAA approval, nor would the

FAA modify the involved operators' operations specifications. The FAA

assumes any operator costs associated with temporary transfers to be

part of the on-going business cost of conducting air tours of the Grand

Canyon. The FAA also assumes any costs associated with notifying the

Las Vegas FSDO of such temporary transfers would be de minimus.

Similarly, FAA costs associated with the processing of these written

notices concerning temporary transfers would be de minimus.

Permanent transfers of allocations resulting from mergers/

acquisitions, bankruptcies, etc. would require FAA approval through the

modification of the operations specifications in addition to the

required reporting to the Las Vegas FSDO in writing. The FAA cannot

predict how many such permanent transfers might occur or estimate

associated costs. The FAA, however, is aware of two acquisitions that

occurred during the base period and offers the following example of

what costs might result if no more than two operators were to submit

requests for permanent transfers of allocations to the FAA annually.

The FAA requests operator comment regarding the likely costs of a

permanent transfer.

If each operator would incur costs of between $500 and $1,000

(which includes two days effort per operator) to complete and provide

the required information to the FAA, then the annual cost to the

industry would be between $1,000 and $2,000 annually (about 32 hours

annually) or between $900 and $1,900 discounted. The cost over 10 years

would be between $10,000 and $20,000 or between $7,000 and $14,000,

discounted. The two-year costs are estimated at between $2,000 and

$4,000 or between $1,800 and $3,600 discounted. The five-year costs are

estimated at between $5,000 and $10,000 or between $4,100 and $8,200,

discounted.

3. Cost of Proposed Rule to the FAA

The FAA, as a result of this proposed rule, would incur costs in

four ways. The FAA would incur costs associated with the initial

allocation, recording and tracking, filing of flight plans, and

transfer of allocations. Over the next ten years, FAA costs are

expected to be $1,445,900 or $1,016,900, discounted. The following is a

discussion of these cost components.

a. Initial allocation, and recording and tracking

The FAA would need to develop an allocation process and prepare the

necessary information to send to each air tour operator. This one time

administrative work would require analyst, clerk, legal and management

resources. The FAA estimates that this would result in an agency cost

of $3,700 in the first year only. The discounted cost is $3,500.

In addition, the FAA would incur recurring annual costs from the

recording and tracking of the information provided by the operators.

Again, this would require analyst, clerk,

[[Page 37320]]

management and legal resources. For the purpose of this cost

assessment, the FAA assumes that one additional agency employee would

be required at the GS-14 grade level. Based on FAA resources required

to record and track data provided by operators since 1997, the agency

estimates that the total cost for the FAA of these elements would be

about $138,000 annually or $1,379,000 over ten years ($968,587,

discounted).

b. Transfer of Allocations

The FAA estimates that on average it would spend about 80 hours

managing each transfer of allocations or 160 hours annually assuming

two permanent transfers. Based upon the salary of a GS-13 employee of

$39.50/hour, the FAA estimates that cost would be about $6,300

annually, $63,200 over ten years or $44,400, discounted.

In sum, the FAA would incur costs associated with the initial

allocation, tracking and monitoring, filing a flight plan, and transfer

and termination of allocations. Over the next ten years, FAA costs are

expected to be $1,445,900 or $1,016,900, discounted.

C. Summary of Benefits and Costs

Public Law 100-91 was adopted to substantially restore natural

quiet and experience in Grand Canyon National Park. The primary

intended benefit of this proposed rule is its contribution toward

restoring natural quiet and experience in Grand Canyon National Park.

The estimated 10-year use benefits (benefits derived from hiking,

rafting, or sightseeing) as a result of this proposed rule and the

other two accompanying proposed rules would be about $73 million,

discounted at seven percent over ten years (about $35 million if this

proposed rule is adopted alone). The FAA does not have adequate data to

estimate the non-use benefits of aircraft noise reduction at GCNP, but

believes this rulmaking may generate significant non-use benefits.

Studies cited in the Regulatory Evaluation suggest potentially

significant non-use benefits associated with aircraft noise reduction

in GCNP as a result of this rulemaking.

The estimated 10-year cost of this proposed regulation would be

$179.1 million or $115.6 million discounted. The majority of the costs

of this proposed regulation, would be $177.6 million, ($114.6 million,

discounted) in projected lost revenue (net of variable operating

costs). The estimated 10-year cost of the other provisions to air tour

operators which includes (1) reporting four times annually, (2) filing

of flight plans, (3) transfer of allocations and (4) requesting

modifications and initial allocations is $30,000, or $23,000

discounted. FAA costs include those associated with initial

allocations, annual recording and tracking, and transfer of

allocations. These FAA costs are estimated at $1,445,900 or $1,016,900,

discounted.

Initial Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (RFA) was enacted by

Congress to ensure that small entities (small business and small not-

for-profit government jurisdictions) are not unnecessarily and

disproportionately burdened by Federal regulations. The RFA, which was

amended March 1996, requires regulatory agencies to review rules to

determine if they have ``a significant economic impact on a substantial

number of small entities,'' FAA's interim regulatory flexibility policy

and guidelines establish threshold costs and small entity size

standards for complying with RFA requirements. This guidance defines

small entities in terms of size thresholds, significant economic impact

in terms of annualized cost thresholds, and substantial number as a

number which is not less than eleven and which is more than one-third

of the small entities subject to the proposed or final rule.

The Small Business Administration defines small entities to be

those airlines with 1,500 or fewer employees for the air transportation

industry. For this proposed rule, the small entity group is considered

to be operators conducting commercial air tours in the GCNP and having

1,500 or fewer employees. The FAA has identified a total or 25 such

entities (24 operators, one of whom operated as a fixed-wing operator

as well as a helicopter operator) that meet this definition.

The FAA has estimated the annualized cost impact on each of these

25 small entities potentially impacted by the proposed rule. The

proposed rule is expected to impose an estimated total cost of $177.6

million or $114.6 million, discounted over the next 10 years. The

annualized cost over ten years is estimated at about $25.5 million for

all of the affected entities. The FAA has determined that the proposal

would have a significant impact on a substantial number of small

entities, and has performed on initial regulatory flexibility analysis.

All 25 small entities would incur an economically significant impact.

Under Section 603(b) of the RFA (as amended), each initial

regulatory flexibility analysis is required to address these points:

(1) reasons why the FAA is considering the proposed rule, (2) the

objectives and legal basis for the proposed rule, (3) the kind and

number of small entities to which the proposed rule would apply, (4)

the reporting, and other compliance requirements of the proposed rule,

and (5) all Federal rules that may duplicate, overlap, or conflict with

the proposed rule.

1. Reasons Why the FAA Is Considering the Proposed Rule

Public Law 100-91 recognizes that noise associated with ``aircraft

overflights'' at the GCNP is causing ``a significant adverse effect on

the natural quiet and experience of the park.'' This legislation

directed the FAA and NPS to work together to achieve substantial

restoration of natural quiet in the GCNP. In order to stabilize noise

levels in the SFRA while further noise analysis is conducted, the FAA

and NPS believe it is necessary to impose a commercial air tour

limitation.

2. The Objectives and Legal Basis for the Proposed Rule

The objective of the proposed rule is to limit commercial air tours

in the GCNP SFRA. Commercial air tours conducted by certificate holders

in the SFRA are not to exceed the amount of air tours reported in

accordance with current section 93.317 for the period from May 1, 1997

through April 30, 1998.

The legal basis for the proposed rule is found in Public Law 100-

91, commonly known as the National parks Overflights Act. Public Law

100-91 stated in part, that ``noise associated with aircraft

overflights at GCNP [was] causing a significant adverse effect on the

natural quiet and experience of the park and current aircraft

operations at the Grand Canyon National Park has raised serious

concerns regarding public safety, including concerns regarding the

safety of park users.'' Further congressional direction is discussed in

the history section of the full regulatory evaluation.

3. The Kind and Number of Small Entities to Which the Proposed Rule

Would Apply

The proposed rule applies to 24 potentially affected part 135 and

121 commercial air tour operators, each having 1500 or fewer employees.

The FAA estimates that all 24 of these operators (25 entities) would be

impacted by the proposal.

4. The Projected Reporting and Other Compliance Requirements of the

Proposed Rule

Each of the 24 operators affected by this proposal would need to

comply with certain reporting and

[[Page 37321]]

recordkeeping requirements. Certificate holders conducting commercial

air tours in the GCNP SFRA would complete a flight plan for each

flight. The FAA estimates this compliance effort would occur at the

beginning of a flight and would impose an additional one to five

minutes on the part of the certificate holder per operation for each of

the 25 small entities during each year of compliance, for a total of

10,956 hours annually. This estimate is limited to compliance

associated with commercial air tours.

Certificate holders conducting commercial air tours would need to

report quarterly to the FAA certain information on the total operations

conducted in the GCNP SFRA to the FAA. The FAA estimates that this

compliance effort would take place four times per year (one additional

time compared to the existing rule) and would impose an additional 50

hours of labor on the industry annually. This provision would cause an

operator, regardless of the number of aircraft, to expend an additional

two hours of labor annually (including record maintenance).

The initial assigned allocation could involve operator requests for

modifications in some instances that the FAA estimates would impose

about 80 hours total the first year on five operators. The FAA

estimates that the paperwork burden to each of these operators would be

about 16 hours (see earlier discussion).

Finally, the FAA expects that two operators would enter the

industry and would leave the industry through mergers, acquisitions or

bankruptcies. The FAA estimates that two operators would spend about 32

hours annually.

Excluding the provisions that impose a one-time burden (initial

allocations would affect five operators the first year annually; 80

hours total), each certificate holder would have imposed an additional

annual reporting burden on average of 581 hours of labor. This

estimate, however, is highly dependent upon how many aircraft and how

many operations the certificate holder flies per year. For a period of

10 years, a total of approximately 143,750 hours would be spent.

5. All Federal Rules That May Duplicate, Overlap, or Conflict With the

Proposed Rule

The FAA is unaware of any federal rules that either duplicate,

overlap, or conflict with the proposed rule. The FAA welcomes comment

on this.

6. Affordability Analysis

For the purpose of this Initial Regulatory Flexibility Analysis, an

affordability analysis is an assessment of the ability of small

entities to meet costs imposed by the proposed rule. There are two

types of costs imposed by the rule--(1) out-of-pocket costs (actual

expenditures) associated with certain documentation and (2) loss of

potential future operating revenue above current levels associated with

a freeze in the level of operations. This latter burden may be

significant to financial viability for companies that depend on growth

in operating revenue to provide cash needed to meet long-term

obligations such as equipment purchase loans.

An operator's short-run financial strength is substantially

influenced, among other things, by its working capital position and its

ability to pay short-term liabilities. Unfortunately, data is not

available on the amount of working capital that these operators have to

finance changes in short term costs.

There is an alternative perspective to the assessment of

affordability based on working capital of the proposed rule. The

alternative perspective pertains to the size of the annualized costs of

the proposed rule relative to annual revenues. The lower the relative

importance of those costs, the greater the likelihood of implementing

either offsetting cost saving efficiencies or raising fares to cover

increased costs without substantially decreasing passengers.

This analysis assesses affordability by examining the annualized

cost of compliance relative to an estimate of total Grand Crayon

commercial air tour operating revenues for each of the 25 small

entities. (Note: There are 24 operators covered by this rule, but one

operator conducts helicopter operations under one business entity and

airplane operations under another separate business entity.) The

annualized change in net operating revenues corresponds to foregoing

the anticipated three percent per year growth of undiscounted net

operating revenues. This number is relatively constant across all air

tour operators because the majority of the negative impact (lost

revenues) imposed by this rulemaking is directly related to the number

of air tours that are being conducted. For these operators, there may

be some prospect of absorbing the cost of the proposed rule through

fare increases (especially since the cost model does not account for

increasing demand with a fixed supply).

It appears that given the current state of the industry, changes in

net operating revenues may be offset by increased prices. The limit on

air tours would restrict the future supply of Grand Canyon air tours

while demand for air tours is expected to increase. No clear conclusion

can be drawn with regard to the abilities for small entities to afford

the reductions in net operating revenues that would be imposed by this

NPRM because the FAA is not able at this time to estimate the amount of

revenue increase obtained through price increases. The FAA requests

small entities to provide better information supporting this assertion

or any alternative.

7. Disproportionality Analysis

The FAA does not believe that reporting requirements imposed by the

proposed rule would disadvantage any of the 25 small entities relative

to large operators because there are no affected large operators.

The smallest operators are expected to incur some higher costs

relative to their size than larger operators do. This is because while

all operators have periodic reporting requirements, the smallest

operators would not be able to spread their reporting costs across as

many operations as the larger operators. Consequently, the periodic

reporting requirements would be proportionately greater for the

smallest operators compared to the other small operators. However,

these reporting costs are a relatively small portion of the economic

impact of this rulemaking. As a result this cost disadvantage to the

small operators is not expected to be significant.

8. Competitiveness Analysis

All air tour operators currently operating in the GCNP are small

entities. All these operators would be proportionately impacted by the

commercial air tour limitation provision of this rulemaking (the

limitation has the greatest impact of all provisions of this

rulemaking). The small operators would not be put at a disadvantage

relative to the larger operators as a result of this provision. There

are some paperwork costs that impact each operator equall, regardless

of size. In this case the larger operators could have an advantage over

the smaller operators since the larger operators could spread these

costs among more passengers. However, these particular paperwork costs

are small and any relative advantage that the larger operators could

have as a result of the paperwork cost would be insignificant.

[[Page 37322]]

This proposed rulemaking has one feature that impacts

competitiveness. The operation limitation would protect established

operators from competition from wholly new entrants. Under this

proposed rule, a new entrant could conduct commercial air tours in the

GCNP SFRA only if it were able to purchase allocations from another

operator and satisfy all other requirements of the Federal Aviation

Regulations. Thus, the potential maximum number of air tours conducted

in the GCNP SFRA would not change.

The FAA solicits comments on this matter. Specifically, commenters

are asked to provide information on the impact this proposed rule would

have on the continued ability of small airlines to compete in the

existing market. The FAA requests that supporting data on markets and

cost be provided with the comments.

D. Summary of Costs of Compliance

The estimated 10-year cost of the proposed regulation, which

divides the year into a five-month peak season and a seven-month off-

peak season would be $177.6 million, ($114.6 million, discounted) in

lost revenue (net of variable operating costs). The estimated 10-year

cost of the non-operators alternatives which includes (1) Reporting

four times annually, (2) filing of flight plans, (3) transfer of

allocations and (4) requesting modifications to initial allocations is

$30,000, or $23,000 discounted. In sum, the estimated 10-year cost to

air tour operators as a result of this proposed rule would be $178.4

million or $115.2 million, discounted.

FAA costs include those associated with initial allocations, annual

recording and tracking, transfer and terminations of allocations, and

filing of flight plans. These FAA costs are estimated at $1,445,900 or

$1,016,900, discounted. In sum, the FAA estimates that the 10-year cost

of this proposed rule would be $179.1 million or $115.6 million

discounted.

E. International Trade Impact Assessment

The FAA has determined that the rulemaking would not affect non-

U.S. operators of foreign aircraft operating outside the United States

nor affect U.S. trade. It could, however, have an impact on commercial

air tours at the GCNP, much of which includes foreign tourists.

The United States Air Tour Association estimates that 60 percent of

all commercial air passengers in the United States are foreign

nationals. The Las Vegas FSDO and some operators, however, believe this

estimate to be considerably higher at the Grand Canyon, perhaps as high

as 90 percent. To the extent the proposed operational limitation

rulemaking dampens foreign visitor demand for commercial air tours of

the Grand Canyon, the commercial air tour industry could potentially

experience an additional loss of revenue beyond what is expected as a

result of the operations limitation.

The FAA is unable to determine the loss of commercial air tour

revenue that might result from lowered foreign demand for commercial

air tours at GCNP for reasons unrelated to this proposed rulemaking.

F. Unfunded Mandates Assessment

Title II of the Unfunded Mandates Reform Act of 1995 (the Act),

enacted as Public Law 104-4 on March 22, 1995, requires each Federal

agency, to the extend permitted by law, to prepare a written assessment

of the effects of any Federal mandate in a proposed or final agency

rule that may result in the expenditure of $100 million or more (when

adjusted annually for inflation) in any one year by State, local, and

tribal governments in the aggregate, or by the private sector. Section

204(a) of the Act, 2 U.S.C. 1532(a), requires the Federal agency to

develop an effective process to permit timely input by elected officers

(or their designees) of State, local, and tribal governments on a

proposed ``significant intergovernmental mandate.'' A ``significant

intergovernmental mandate'' under the Act is any provision in a Federal

agency regulation that would impose an enforceable duty upon State,

local and tribal governments in the aggregate of $100 million (adjusted

annually for inflation) in any one year. Section 203 of the Act, U.S.C.

1533, which supplements section 204(a), provides that, before

establishing any regulatory requirements that might significantly or

uniquely affect small governments, the agency shall have developed a

plan, which, among other things, must provide for notice to potentially

affected small governments, if any, and for a meaningful and timely

opportunity for these small governments to provide input in the

development of regulatory proposals.

This proposed rule does not contain any Federal intergovernmental

or private sector mandates. Therefore, the requirements of Title II of

the Unfunded Mandates Reform Act of 1995 do not apply.

VI. Federalism Implications

This proposed rule would not have substantial effects on the

States, on the relationship between the national government and the

States, or on the distribution of power and responsibilities among the

various levels of government. Therefore, in accordance with executive

Order 12612, it is determined that this proposed rule would not have

sufficient federalism implications to warrant the preparation of a

Federalism Assessment.

VII. Paperwork Reduction Act

This proposal contains the following new information collection

requirements subject to review by the Office of Management and Budget

(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C.

Sec. 3507(d)).

Proposed Sec. 93.321 would require each operator that receives an

allocation from another operator to report the transfer in writing to

the Las Vegas Flight Standards District Office before the transferee

may use the allocation. Temporary transfers would require FAA

notification but no FAA approval. Permanent transfers (mergers,

acquisitions, etc.) would require FAA notification and FAA approval.

The FAA estimates that the cost of the paperwork burden associated with

initial allocations would be $450 (a one-time cost during the first

year only). The FAA estimates that there would be approximately two

permanent transfers per year at a total cost per year of $720.

Proposed Sec. 93.323 would require each of the affected commercial

air tour operators to file a visual flight rules (VFR) flight plan for

each flight and list the purpose of the flight in the ``remarks''

section. There would be no requirement for the operator to keep a copy

of the flight plan nor for the pilot to carry a copy of the flight plan

during flight. The flight plan could be ``canned'' so that it would be

on file and could be activated easily. Computations assume that all air

tour operators would use ``canned'' flight plans. Opening and closing

flight plans would be part of the normal duties of a pilot, a

dispatcher, or other person designated by the certificate holder. The

FAA estimates that filing of flight plans with an FAA Flight Service

Station and activation of these flight plans for each flight would

require 368 hours per year at a cost of $8,280.

Proposed Sec. 93.325 would require each operator to report to the

FAA on a quarterly basis. This would increase the existing reporting

requirement by one report per year. It would also add the make and

model of aircraft and further divides flights into segments based on

departure airports. The previous requirement (93.317) was only for

sightseeing flights. The proposed rule would require all flights in the

Special

[[Page 37323]]

flight Rules Area, which includes transportation flights, repositioning

flights, maintenance ferries, and training/proving flights. The

quarterly aspect of reporting is at the operators' request. Existing

Sec. 93.317 requires reporting three times per year. The operators

expressed a preference for quarterly reporting as this more closely

matches how they do business and report to other government entities.

The FAA estimates that this additional burden will require 46 hours per

year at a cost of $1,035 for all operators.

The total estimated annual cost of the paperwork burden for the

proposed rule is $10,485.

The agency is soliciting comments to (1) evaluate whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

information will have practical utility; (2) evaluate the accuracy of

the agency's estimate of the burden; (3) enhance the quality, utility,

and clarity of the information to be collected; and (4) minimize the

burden of the collection of information on those who are to respond,

including through the use of appropriate automated, electronic,

mechanical, or other techological collection techniques or other forms

of information technology (for example, permitting electronic

submission of responses). Individuals and organizations may submit

comments on the information collection requirement by September 7,

1999, to the address listed in the ADDRESSES section of this document.

An agency may not conduct or sponsor and a person is not required

to respond to a collection of information unless it displays a

currently valid Office of Management and Budget (OMB) control number.

The public will be notified of the OMB control number when it is

assigned.

List of Subjects

14 CFR Part 93

Air traffic control, Airports, Navigation (Air), Reporting and

Recordkeeping requirements.

The Proposed Amendment

For the reasons set forth above, the Federal Aviation

Administration proposes to amend part 93, chapter 1 of title 14, Code

of Federal Regulations, as follows:

PART 93--SPECIAL AIR TRAFFIC RULES AND AIRPORT TRAFFIC PATTERNS

1. The authority citation for part 93 continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502,

44514, 44701, 44719, 46301.

2. Section 93.303 is revised to read as follows:

Sec. 93.303 Definitions.

For the purposes of this subpart:

Allocation means authorization to conduct a commercial air tour in

the Grand Canyon National Park (GCNP) Special Flight Rules Area (SFRA).

Commercial air tour means any flight conducted for compensation or

hire in a powered aircraft where a purpose of the flight is

sightseeing. If the operator of a flight asserts that the flight is not

a commercial air tour, factors that can be considered by the

Administrator in making a determination of whether the flight is a

commercial air tour include, but are not limited to--

(1) Whether there was a holding out to the public of willingness to

conduct a sightseeing flight for compensation or hire;

(2) Whether a narrative was provided that referred to areas or

points of interest on the surface;

(3) The area of operation;

(4) The frequency of flights;

(5) The route of flight;

(6) The inclusion of sightseeing flights as part of any travel

arrangement package; or

(7) Whether the flight in question would or would not have been

canceled based on poor visibility of the surface.

Commercial SFRA Operation means any portion of any flight within

the GCNP SFRA that is conducted by a certificate holder that has

operations specifications authorizing air tours within the GCNP SFRA.

This term does not include operations conducted under an FAA Form 7711-

1, Certificate of Waiver or Authorization. The types of flights covered

by this definition are set forth in the ``Las Vegas Flight Standards

District Office Grand Canyon National Park Special Flight Rules Area

Procedures Manual'' available from the Las Vegas Flight Standards

District Office.

Flight Standards District Office means the FAA Flight Standards

District Office with jurisdiction for the geographical area containing

the Grand Canyon.

Park means Grand Canyon National Park.

Special Flight Rules Area means the Grand Canyon National Park

Special Flight Rules Area.

3. Section 93.305 is amended by revising the last sentence in

paragraph (a) and in paragraph (b) to read as follows (Note: The

instructions in this amendment refer to Sec. 93.305 as it currently

exists. But if adopted, these changes would be made in addition to the

changes in Notice No. 99-11 published elsewhere in this issue):

Sec. 93.305 Flight-free zones and flight corridors.

* * * * *

(a) * * *

(a) * * * This corridor is 2 nautical miles wide for commercial air

tour flights and 4 nautical miles wide for transient and general

aviation operations.

(b) * * * This corridor is 2 nautical miles wide for commercial air

tour flights and 4 nautical miles wide for transient and general

aviation operations.

* * * * *

4. Section 93.307 is amended by revising the headings of paragraphs

(a)(1) and (b)(1) to read as follows:

Sec. 93.307 Minimum flight altitudes.

* * * * *

(a) * * *

(1) Commercial air tours--

* * * * *

(b) * * *

(1) Commercial air tours--

* * * * *

5. Section 93.315 is revised to read as follows:

93.315 Requirements for Commercial Special Flight Rules Area

operations.

Each person conducting commercial Special Flight Rules Area

operations must be certificated in accordance with Part 119 for Part

135 or 121 operations and hold appropriate Grand Canyon National Park

Special Flight Rules Area operations specifications.

Sec. 93.316 [Removed and reserved]

6. Section 93.316 is removed and reserved.

7. Section 93.317 is revised to read as follows:

Sec. 93.317 Commercial Special Flight Rules Area operation curfew.

Unless otherwise authorized by the Flight Standards District

Office, no person may conduct a commercial Special Flight Rules Area

operation in the Dragon and Zuni Point corridors during the following

flight-free periods:

(a) Summer season (May 1-September 30)--6 p.m. to 8 a.m. daily; and

(b) Winter season (October 1-April 30)--5 p.m. to 9 a.m. daily.

8. Section 93.319 is added to read as follows:

Sec. 93.319 Commercial air tour limitations.

(a) No certificate holder certificated in accordance with part 119

for part 121 or 135 operations may conduct more commercial air tours in

any calendar

[[Page 37324]]

year than the number of allocations specified on the certificate

holder's operations specifications.

(b) The Administrator determines the number of initial allocations

for each certificate holder based on the total number of commercial air

tours conducted by the certificate holder and reported to the FAA

during the period beginning on May 1, 1997 and ending on April 30,

1998.

(c) Certificate holders who conducted commercial air tours during

the base year and reported them to the FAA receive an initial

allocation.

(d) Allocations are apportioned between peak season and off-season.

Peak season allocations may be used in the off-season, but off-season

allocations may not be used in the peak season. For the purposes of

this section seasons are defined as follows:

(1) Peak-Season: May 1-September 30

(2) Off-Season: October 1-April 30

(e) A certificate holder must use one allocation for each flight

that is a commercial air tour.

(f) Each certificate holder's operation specifications will

identify the following information, as applicable:

(1) Total SFRA allocations;

(2) Dragon corridor and Zuni Point corridor allocations;

(3) Peak season allocations for the SFRA; and

(4) Peak season allocations for the Dragon and Zuni Point

corridors.

9. Section 93.321 is added to read as follows:

Sec. 93.321 Transfer and termination of allocations.

(a) Allocations are not a property interest; they are an operating

privilege subject to absolute FAA control.

(b) Allocations are subject to the following conditions:

(1) The Administrator will re-authorize and re-distribute

allocations no earlier than two years from the effective date of this

rule.

(2) Allocations that are held by the FAA at the time of

reallocation may be distributed among remaining certificate holders,

proportionate to the size of each certificate holder's allocation.

(3) The aggregate SFRA allocations will not exceed the number of

operations reported to the FAA for the base year beginning on May 1,

1997 and ending on April 30, 1998.

(4) Allocations may be transferred among Part 135 or Part 121

certificate holders, subject to the following:

(i) Such transactions are subject to all other applicable

requirements of this chapter.

(ii) Allocations authorizing commercial air tours outside the

Dragon and Zuni Point corridors may not be transferred into the Dragon

and Zuni Point corridors. Allocations authorizing commercial air tours

within the Dragon and Zuni Point corridors may be transferred outside

of the Dragon and Zuni Point corridors.

(iii) A certificate holder must notify in writing the Las Vegas

Flight Standards District Office within 10 calendar days of a transfer

of allocations. This notification must identify the parties involved,

the type of transfer (permanent or temporary) and the number of

allocations transferred. Permanent transfers are not effective until

the Flight Standards District Office reissues the operations

specifications reflecting the transfer. Temporary transfers are

effective upon notification of the Flight Standards District Office.

(5) An allocation will revert to the FAA upon voluntary cessation

of commercial air tours within the SFRA for any consecutive 180-day

period.

(6) The FAA retains the right to re-distribute, reduce, or revoke

allocations based on:

(i) efficiency of airspace;

(ii) voluntary surrender of allocations;

(iii) involuntary cessation of operations; and

(iv) aviation safety.

10. Section 93.323 is added to read as follows:

Sec. 93.323 Flight plans.

Each certificate holder conducting a commercial SFRA operation must

file a visual flight rules (VFR) flight plan in accordance with

Sec. 91.153. The flight plan must be on file with a FAA Flight Service

Station prior to each flight. Each VFR flight plan must identify the

purpose of the flight in the ``remarks'' section according to one of

the types set forth in the ``Las Vegas Flight Standards District Office

Grand Canyon National Park Special Flight Rules Area Procedures

Manual'' available from the Las Vegas Flight Standards District Office.

11. Section 93.325 is added to read as follows:

Sec. 93.325 Quarterly reporting.

(a) Each certificate holder must submit in writing, within 30 days

of the end of each calendar quarter, the total number of commercial

SFRA operations conducted for that quarter. Quarterly reports must be

filed with the Las Vegas Flight Standards District Office.

(b) Each quarterly report must contain the following information:

(1) Make and model of aircraft;

(2) Identification number (registration number) for each aircraft;

(3) Departure airport for each segment flown;

(4) Departure date and actual Universal Coordinated Time, as

applicable for each segment flown;

(5) Type of operation; and

(6) Route(s) flown.

Issued in Washington, DC, on July 1, 1999.

L. Nicholas Lacey,

Director, Office of Flight Standards.

[FR Doc. 99-17319 Filed 7-6-99; 12:06 pm]

BILLING CODE 4910-13-M