To amend title 49, United States Code, to authorize the Secretary of Transportation to oversee the competitive activities of air carriers following a concentration in the airline industry, and for other purposes.

Summary: Airline Competition Preservation Act of 2001 - Amends Federal transportation law to authorize the Secretary of Transportation, on his own initiative or on a complaint, to: (1) investigate whether an air carrier is charging an unreasonably high fare or an average fare for interstate air transportation on a route; and (2) upon an affirmative finding, order the carrier to reduce the fare, offer the reduced fare for a specific number of seats on the route, and offer rebates to individuals who have been charged the fare.Prescribes fare offering requirements for a dominant air carrier (which accounts for more than 50 percent of total annual boardings) that institutes or changes its fares with respect to a route in interstate air transportation to or from a hub airport in a manner that: (1) results in fares lower than or comparable to fares offered by a new entrant air carrier; and (2) increases the passenger capacity at which such fares are offered on the route to a level two or more times the capacity previously offered by the air carrier at such fares on the route, and two or more times the total capacity offered by the new entrant air carrier on the route. Requires such a dominant air carrier to continue (in the two-year period beginning on the date that such fares and additional capacity are instituted) to offer such fares with respect to not less than 80 percent of the highest number of seats per week for which the dominant air carrier has offered them.Authorizes the Secretary, on his own initiative or on complaint, to: (1) investigate whether a dominant air carrier at a hub airport is charging higher than average fares at the airport; and (2) upon an affirmative finding, order the carrier to take specified actions to increase opportunities for competition at the hub airport.Makes this Act effective immediately upon the Secretary's determination that three or fewer air carriers account for 70 percent or more of the scheduled revenue passenger miles in interstate air transportation as a result of specified consolidations, mergers, or acquisitions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Airline Competition Preservation Act 
of 2001''.

SEC. 2. OVERSIGHT OF AIR CARRIER PRICING.

    (a) In General.--Chapter 415 of title 49, United States Code, is 
amended by adding at the end the following:
``Sec. 41512. Oversight of air carrier pricing
    ``(a) Effective Date.--
            ``(1) In general.--This section shall take effect 
        immediately upon a determination by the Secretary of 
        Transportation that 3 or fewer air carriers account for 70 
        percent or more of the scheduled revenue passenger miles in 
        interstate air transportation as a result of--
                    ``(A) the consolidation or merger of the properties 
                (or a substantial portion of the properties) of 2 or 
                more of the 7 air carriers that account for the highest 
                number of scheduled revenue passenger miles in 
                interstate air transportation into a single entity that 
                owns or operates the properties previously in separate 
                ownership; or
                    ``(B) the acquisition (by purchase, lease, or 
                contract to operate) of the properties (or a 
                substantial portion of the properties) of 1 or more of 
                the 7 air carriers described in subparagraph (A) by 
                another of such carriers.
            ``(2) Use of data.--For the purpose of determining the 
        number of scheduled revenue passenger miles under paragraph 
        (1), the Secretary shall use data from the latest year for 
        which complete data is available.
            ``(3) Determination of air carrier concentration.--In 
        making a determination under paragraph (1), the Secretary shall 
        attribute to an air carrier those scheduled revenue passenger 
        miles in interstate air transportation of the air carrier that 
        is consolidated, merged, or acquired that are associated with 
        routes adopted by the remaining carrier.
    ``(b) Fares of Air Carriers.--
            ``(1) In general.--On the initiative of the Secretary or on 
        a complaint filed with the Secretary, the Secretary may 
        undertake an investigation to determine whether an air carrier 
        is charging a fare or an average fare for interstate air 
        transportation on a route that is unreasonably high.
            ``(2) Considerations.--In determining whether a fare or an 
        average fare of an air carrier for interstate air 
        transportation on a route is unreasonably high, the Secretary 
        shall consider, among other factors, whether--
                    ``(A) the fare or average fare is higher than the 
                fare or average fare charged by the carrier on other 
                routes in interstate air transportation of comparable 
                distances;
                    ``(B) the fare or average fare has increased by a 
                significant amount in excess of any increase in the 
                cost to operate flights on the route; and
                    ``(C) the range of fares specified on the route or 
                the carrier's entire fare system offers a reasonable 
                balance and a fair allocation of costs between 
                passengers who are primarily price sensitive and 
                passengers who are primarily time sensitive.
            ``(3) Actions in response to unreasonable fares.--If the 
        Secretary determines that an air carrier is charging a fare or 
        an average fare for interstate air transportation on a route 
        that is unreasonably high, the Secretary, after providing the 
        carrier an opportunity for a hearing, may order the carrier--
                    ``(A) to reduce the fare;
                    ``(B) to offer the reduced fare for a specific 
                number of seats on the route; and
                    ``(C) to offer rebates to individuals who have been 
                charged the fare.
            ``(4) Period of effectiveness of order.--An order issued by 
        the Secretary under this subsection shall remain in effect for 
        a period to be determined by the Secretary.
    ``(c) Actions of Dominant Air Carriers in Response to New 
Entrants.--If, with respect to a route in interstate air transportation 
to or from a hub airport, a dominant air carrier at the airport--
            ``(1) institutes or changes its fares for air 
        transportation on the route in a manner that results in fares 
        that are lower than or comparable to the fares offered by a new 
        entrant air carrier for such air transportation; and
            ``(2) increases the passenger capacity at which such fares 
        are offered on the route to a level which is--
                    ``(A) 2 or more times the capacity previously 
                offered by the carrier at such fares on the route; and
                    ``(B) 2 or more times the total capacity offered by 
                the new entrant air carrier on the route, the dominant 
air carrier, in the 2-year period beginning on the date that such fares 
and additional capacity are instituted, shall continue to offer such 
fares with respect to not less than 80 percent of the highest number of 
seats per week for which the dominant air carrier has offered the 
fares.
    ``(d) Ensuring Competition at Hub Airports.--
            ``(1) In general.--On the initiative of the Secretary or on 
        a complaint filed with the Secretary, the Secretary may 
        undertake an investigation to determine whether a dominant air 
        carrier at a hub airport is charging higher than average fares 
        at the airport.
            ``(2) Higher than average fares.--For purposes of paragraph 
        (1), the Secretary may determine that a dominant air carrier is 
        charging higher than average fares at a hub airport if the 
        carrier is charging, with respect to 20 percent or more of its 
        routes in interstate air transportation that begin or end at 
        the airport, an average fare that is at least 5 percent higher 
        than the average fare being charged by all air carriers on 
        routes in interstate air transportation of comparable distances 
        and density, after adjustments for costs that are carrier or 
        airport specific, such as passenger facility charges or 
        employee compensation.
            ``(3) Actions in response to unfair competition.--If the 
        Secretary determines under paragraph (1) that a dominant air 
        carrier is charging higher than average fares at a hub airport, 
        the Secretary, after providing the carrier an opportunity for a 
        hearing, may order the carrier to take actions to increase 
        opportunities for competition at the hub airport, including--
                    ``(A) requiring the carrier to make gates, slots, 
                and other airport facilities available to other air 
                carriers on reasonable and competitive terms;
                    ``(B) requiring adjustments in the commissions paid 
                by the carrier to travel agents;
                    ``(C) requiring adjustments in the carrier's 
                frequent flyer program; and
                    ``(D) requiring adjustments in the carrier's 
                corporate discount arrangements and comparable 
                corporate arrangements.
    ``(e) Definitions.--In this section, the following definitions 
apply:
            ``(1) Dominant air carrier.--The term `dominant air 
        carrier', with respect to a hub airport, means an air carrier 
        that accounts for more than 50 percent of the total annual 
        boardings at the airport in the preceding 2-year period or a 
        shorter period specified in paragraph (3).
            ``(2) Hub airport.--The term `hub airport' means an airport 
        that each year has at least .25 percent of the total annual 
        boardings in the United States.
            ``(3) Interstate air transportation.--The term `interstate 
        air transportation' includes intrastate air transportation.
            ``(4) New entrant air carrier.--The term `new entrant air 
        carrier', with respect to a hub airport, means an air carrier 
        that accounts for less than 5 percent of the total annual 
        boardings at the airport in the preceding 2-year period or in a 
        shorter period specified by the Secretary if the carrier has 
        operated at the airport less than 2 years.''.
    (b) Conforming Amendment.--The analysis for such chapter is amended 
by adding at the end the following:

``41512. Oversight of air carrier pricing.''.