A new traffic control rule proposed by the FAA for New York La Guardia Airport would replace the current system of slot allocation with “operating authorizations,” a mechanism that would allow the authority to exclude airlines that fly too many regional jets. The rule, which could take effect early next year, would keep the present hourly limit of 75 scheduled flights and six non-scheduled flights, but it would also require operators to meet airport-wide aircraft size targets. The rule would not apply to Saturdays and before noon on Sundays, and it would exempt small communities deemed threatened with loss of service.

Under the plan, authority for which the FAA will likely ask Congress as part of next year’s reauthorization bill, airlines that do not meet average aircraft size targets based on engineering measures of ground facility capacities would lose operating authorizations. The proposed target would range from 105 to 122 seats per aircraft, depending on which alternatives for proposed exemptions for non-hub and small-hub airports the FAA ultimately adopts. Today’s average airplane at La Guardia seats 98 passengers.

On Jan. 1, 2008, or one year after the final rule takes effect, carriers would have to report their use of operating authorizations during the previous year. However, the agency would not enforce the target until Jan. 1, 2009, at which point any carrier that does not comply would fall subject to a so-called “Use or Lose” provision.

Under the use-or-lose clause, the FAA would first withdraw operating authorizations using the smallest aircraft in the fleet in question. The number of authorizations withdrawn would depend on the degree of noncompliance. The FAA would take only the number of operating authorizations required to raise the average seat capacity to the target level.

Even though union contract scope clauses have relaxed considerably in recent years, regional airlines still must work with the fleets they built while they faced severe restrictions on airplanes carrying more than 50 seats, leaving many with limited flexibility to use larger airplanes. If the rule passes, airlines such as American, for example, will need to find a way to replace 50-seat jets with 70- and 90-seaters or drop regional jets in favor of less-frequent service with mainline narrowbodies.

But perhaps most disturbing to La Guardia’s incumbent airlines is the provision in the NPRM that would assign the operating authorizations expiration dates ranging from 2010 to 2019. As an authorization expires, the FAA would simply reallocate it with a renewed 10-year lifespan unless the holder sells it in a so-called blind auction under which only the FAA would know the identities of the sellers and bidders. According to the FAA, that, along with the use-or-lose provision, would promote efficient use of scarce airport resources because the carriers that value them the most will use the operating authorizations.

Perhaps more to the point, no longer could an airline control slots in perpetuity and choose its own competition–or lack thereof. Comments on the NPRM are due by October 30.