2534 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

DEPARTMENT OF TRANSPORTATION 

Office of the Secretary 

14 CFR Parts 250 and 254 

[Docket DOT–OST–2020–0251] 

RIN 2105–AE81 

Implementing Certain Provisions of the 

TICKETS Act and Revisions to Denied 

Boarding Compensation and Domestic 

Baggage Liability Limits 

AGENCY: Office of the Secretary (OST), 

Department of Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: This final rule amends the 

U.S. Department of Transportation’s (or 

the Department’s) oversales rule by 

clarifying that the maximum amount of 

Denied Boarding Compensation (DBC) 

that a carrier may provide to a passenger 

denied boarding involuntarily is not 

limited, and by prohibiting airlines from 

involuntarily denying boarding to a 

passenger after the passenger’s boarding 

pass has been collected or scanned and 

the passenger has boarded, subject to 

safety and security exceptions. Further, 

pursuant to existing regulations, this 

final rule raises the liability limits for 

denied boarding compensation that U.S. 

and foreign air carriers may impose 

from the current figures of $675 and 

$1,350 to $775 and $1,550. Also, in 

accordance with existing regulations, 

this final rule raises the liability limit 

U.S. carriers may impose for 

mishandled baggage in domestic air 

transportation, adjusting the limit of 

liability from the current amount of 

$3,500 to $3,800. 

DATES: This rule is effective on April 13, 

2021. 

FOR FURTHER INFORMATION CONTACT: 

Clereece Kroha, Senior Attorney, Office 

of the General Counsel, Department of 

Transportation, 1200 New Jersey Ave. 

SE, Washington, DC 20590; 202–366– 

9041, clereece.kroha@dot.gov. 

SUPPLEMENTARY INFORMATION: 

I. Clarifying That the Department’s 

Oversales Rule Does Not Limit the 

Maximum Amount of DBC Carriers 

May Offer to Passengers Denied 

Boarding Involuntarily, and Related 

Provisions 

Section 425(e) of the FAA 

Reauthorization Act of 2018 (Pub. L. 

115–254, October 5, 2018), which 

includes the Transparency 

Improvements and Compensation to 

Keep Every Ticketholder Safe Act of 

2018 (TICKETS Act), requires the 

Department to complete a rulemaking to 

clarify that (1) there is no maximum 

level of compensation an air carrier or 

foreign air carrier may pay to a 

passenger who is involuntarily denied 

boarding as the result of an oversold 

flight, and (2) the DBC compensation 

levels set forth in the regulation are the 

minimum levels of compensation an air 

carrier or foreign air carrier must pay to 

a passenger who is involuntarily denied 

boarding as the result of an oversold 

flight. ‘‘Maximum’’ DBC amount and 

DBC ‘‘limit’’ are terms found in various 

provisions of the Department’s oversales 

rule in 14 CFR part 250. The concept of 

‘‘maximum’’ DBC amount that a carrier 

is required to pay and a ‘‘limit’’ imposed 

on DBC calculation results were 

intended to (1) ensure passengers 

involuntarily denied boarding receive, 

at a minimum, a DBC amount required 

by the regulation when the DBC 

calculation resulted in a higher amount; 

and (2) allow carriers to impose a limit 

on the amount that they are liable for 

compensating eligible passengers in the 

event of involuntary denied boarding, if 

carriers choose to do so. Part 250 was 

never intended to prohibit carriers from 

voluntarily paying an amount of DBC 

that is higher than the ‘‘maximum’’ DBC 

amounts or DBC ‘‘limits’’ set forth in 

part 250. 

Although during the many decades 

since the promulgation of the oversales 

rule, the Department has seen no 

evidence of industry confusion about 

the meaning of these terms, by passing 

the TICKETS Act, Congress is requiring 

DOT to revise the rule for clarity to 

avoid any potential public confusion 

about whether carriers may choose to 

pay a higher amount of DBC. 

Accordingly, in this final rule, the 

Department is making some editorial 

changes to the regulatory text in part 

250 to make this point clear. 

Specifically, this final rule eliminates 

words and phrases such as ‘‘maximum’’ 

or ‘‘no more than’’ from § 250.5 to 

clarify that carriers are permitted to pay 

more than the amounts set by the 

regulations. Instead of using these 

terms, the amended part 250 states that 

carriers are required to provide to 

eligible passengers at least the lower 

amount of: (1) 200% of the passenger’s 

one-way fare or $775 for delays of more 

than one hour but less than two hours 

for domestic flights and delays of more 

than one hour but less than four hours 

for international flights, and (2) 400% of 

the passenger’s one-way fare or $1550 

for delays of more than two hours for 

domestic flights and delays of more than 

four hours for international flights. 

Further, the Department is replacing the 

term ‘‘maximum denied boarding 

compensation’’ and ‘‘denied boarding 

compensation limit(s)’’ with the term 

‘‘denied boarding compensation liability 

limit(s)’’ or ‘‘DBC liability limit(s).’’ The 

new terms make clear that the monetary 

amounts prescribed by the rule are 

intended to allow carriers to limit the 

amount they are required to compensate 

passengers that are involuntarily denied 

boarding if the carriers choose to do so, 

and that the terms are not intended to 

impose a ceiling for the amount of 

compensation a carrier may offer and a 

passenger may receive. Further, by this 

final rule, the Department is adding 

paragraph (g) in § 250.5 to state that 

nothing in the rule prohibits carriers 

from offering denied boarding 

compensation in an amount more than 

the amount calculated according to part 

250, or the denied boarding 

compensation liability limits provided 

by part 250. Similar amendments are 

made for the written denied boarding 

notice prescribed in § 250.9. 

Like the denied boarding 

compensation liability limit, the 

domestic baggage liability limit 

provided in 14 CFR part 254 is intended 

to permit carriers to adopt a ceiling that 

caps their liability for delayed, lost, or 

damaged bags in domestic air 

transportation, and it is not intended to 

prohibit them from offering a 

compensation that is a higher amount 

than the adopted ceiling amount. As 

such, the Department is also removing 

the terms ‘‘minimum limit of [baggage] 

liability’’ and ‘‘minimum liability 

amount’’ used in 14 CFR 254.6, and 

replacing them with the term ‘‘domestic 

baggage liability limit.’’ 

The TICKETS Act also requires the 

Department to complete a rulemaking to 

ensure that carriers must proactively 

offer to pay compensation to a passenger 

who is voluntarily or involuntarily 

denied boarding on an oversold flight, 

rather than waiting until the passenger 

requests the compensation. The 

Department has carefully reviewed the 

existing rule text and its enforcement 

records, and believes that the 

Department’s oversales rule already 

imposes such requirements on carriers. 

Specifically, with respect to passengers 

denied boarding voluntarily, § 250.2b 

provides that, in the event of an 

oversold flight, carriers shall request 

volunteers for denied boarding before 

using any other boarding priority. The 

rule further defines a ‘‘volunteer’’ as ‘‘a 

person who responds to the carrier’s 

request for volunteers and who 

willingly accepts the carrier’s offer of 

compensation, at any amount, in 

exchange for relinquishing the 

confirmed reserved space (emphasis 

added).’’ In other words, for a carrier to 

fulfill its obligation of soliciting for 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2535 

1 Instead of incorporating the statutory language 

verbatim, the Department made certain necessary 

editorial changes to the statutory language when 

codifying the statute into the rule text. The changes 

made are: (1) Deleting the effective date of the 

requirements in the statute which is ‘‘the date of the 

enactment of this Act’’ because the effective date of 

the requirements as codified in 14 CFR part 250 is 

the date that is 90 days from the publication date 

of this final rule; and (2) changing the lead sentence 

in the ‘‘Limitation’’ paragraph from ‘‘The 

prohibition pursuant to subsection (b) shall not 

apply . . .’’ to ‘‘The prohibition pursuant to 

paragraph (a) of this section shall not apply. . . .’’ 

2The Department does not believe that Congress 

intended to apply the broader scope of section 

40102 definitions to section (e) of the TICKETS Act, 

which relates to denied boarding compensation. It 

is our understanding that should Congress intend 

to require carriers that are not currently covered by 

part 250 to provide denied boarding compensations 

to passengers, it would have stated so specifically. 

3The term ‘‘DBC limit’’ in the current rule text 

will be revised to ‘‘DBC liability limit’’ to clarify 

that carriers are permitted to limit their liability to 

the amount provided by regulation, or to offer a 

higher amount, consistent with the requirement of 

the TICKETS Act. 

volunteers before denying any passenger 

boarding involuntarily, carriers must 

first request volunteers with an offer of 

compensation. Further, with respect to 

passengers denied boarding 

involuntarily, § 250.8 provides that 

carriers must tender to passengers DBC 

on the day and in the place the denied 

boarding occurs, or within 24 hours 

after the denied boarding occurs. 

Carriers are required to do so even if the 

eligible passenger is not aware of the 

entitlement to DBC and therefore does 

not make a request for compensation. 

Although the Department’s Office of 

Aviation Consumer Protection interprets 

part 250 as requiring carriers to offer, 

proactively, compensation to passengers 

voluntarily and involuntarily denied 

boarding, the Department is amending 

§ 250.2b to require explicitly that 

carriers must provide compensation 

proactively instead of waiting for 

passengers to request the compensation 

in an oversale situation. The 

Department will continue to enforce 

part 250 to ensure that passengers that 

have volunteered to be denied boarding 

in response to carriers’ offers of 

compensation and passengers denied 

boarding involuntarily receive proper 

compensations due to them. 

For a carrier that imposes a liability 

limit to its denied boarding 

compensation and mishandled domestic 

baggage compensation, the limits must 

be updated to these new amounts for 

transportation taking place on or after 

the effective date (as opposed to tickets 

sold on or after the effective date). All 

notices to passengers required by parts 

250 and 254 as they pertain to the new 

DBC liability limits and domestic 

baggage liability limit must be updated 

by the effective date of this final rule. 

II. Codifying Sections 425(b)–(d) of the 

TICKETS Act Prohibiting Removal of 

Passengers Who Already Boarded 

Flights 

Section 425(b) of the TICKETS Act 

contains a self-effectuating provision 

that prohibits airlines from denying 

boarding to a revenue passenger 

traveling on a confirmed reservation or 

involuntarily removing that passenger 

from a flight, if the passenger checked 

in before the check-in deadline and had 

a ticket or boarding pass collected or 

electronically scanned and accepted by 

the gate agent. Pursuant to sections 

425(c) and (d) of the TICKETS Act, this 

prohibition is subject to safety, security, 

or health risk exceptions and it may not 

be construed as a limitation on the 

responsibility or authority of a pilot in 

command of an aircraft under 14 CFR 

121.533. This prohibition also may not 

limit a penalty imposed on an 

individual for interfering with flight 

crew members and attendants, as 

provided in 49 U.S.C. 46504. The 

requirements in sections 425(b)–(d) of 

the TICKETS Act became effective on 

October 5, 2018, the effective date of the 

FAA Reauthorization Act of 2018. This 

final rule codifies these requirements 

exactly as provided in the FAA 

Reauthorization Act of 2018 1 in 14 CFR 

part 250, and makes it enforceable by 

the Department. 

Covered Carriers Under the TICKETS 

Act 

The Department’s oversales rule, 14 

CFR part 250, applies to direct air 

carriers and foreign air carriers with 

respect to scheduled flight segments 

using an aircraft that has a designed 

passenger capacity of 30 or more 

passenger seats, operating in interstate 

air transportation, or foreign air 

transportation with respect to nonstop 

flight segments originating at a point 

within the United States. In contrast, 

pursuant to section 402 of the FAA 

Reauthorization Act of 2018, ‘‘covered 

air carrier’’ as used in the TICKETS Act 

means an air carrier or a foreign air 

carrier as those terms are defined in 49 

U.S.C. 40102. Under 49 U.S.C. 40102, an 

‘‘air carrier’’ means a citizen of the 

United States undertaking by any 

means, directly or indirectly, to provide 

air transportation; and a ‘‘foreign air 

carrier’’ means a person, not a citizen of 

the United States, undertaking by any 

means, directly or indirectly, to provide 

foreign air transportation. This means 

that more air carriers and foreign air 

carriers are covered under the TICKETS 

Act than carriers covered under the 

existing requirements of part 250. The 

requirement of sections (b)–(d) of the 

TICKETS Act apply to all direct and 

indirect air carriers and foreign air 

carriers that fall under the definitions of 

section 40102.2 As such, we are revising 

the applicability section of part 250, 

§ 250.2, to specify that the requirements 

regarding removing a revenue passenger 

from a flight, as codified under 14 CFR 

250.7, has a broader scope than the 

other provisions of part 250. 

Ticket or Boarding Pass Collected or 

Electronically Scanned and Accepted by 

the Gate Agent 

According to the TICKETS Act, 

airlines are prohibited from removing a 

passenger or denying a passenger 

boarding after the passenger’s ticket or 

boarding pass is ‘‘collected or 

electronically scanned and accepted by 

the gate agent’’ (emphasis added). 

Therefore, a carrier agent’s physical 

collection of a paper boarding pass 

alone does not indicate an acceptance of 

the passenger to board the aircraft. 

Similarly, when a carrier uses electronic 

devices of any kind to scan a boarding 

pass (e.g., a paper boarding pass, an 

electronic boarding pass on a mobile 

device), the scanning itself alone does 

not indicate that the carrier has 

accepted the passenger for boarding. 

After the physical collection or 

electronic scanning, the gate agent may 

have reasons to not permit a passenger 

to board (e.g., the agent may find out 

that the passenger was trying to board 

a wrong flight, or may find out that the 

passenger has been selected to be 

involuntarily denied boarding). In those 

situations, the carrier may legally deny 

the passenger boarding because the 

passenger has not been accepted by a 

gate agent. Alternatively, if the gate 

agent accepts a passenger for boarding 

after collecting or scanning the 

passenger’s boarding pass, the carrier is 

prohibited from removing the passenger 

from the flight thereafter. 

III. Revision of Carriers’ Liability 

Limits for Denied Boarding 

Compensation 

The Department’s oversales rule, 14 

CFR part 250, requires that the DBC 

liability limit amounts be periodically 

adjusted to reflect changes in the 

Consumer Price Index for All Urban 

Consumers (CPI–U). Specifically, 14 

CFR 250.5(e) provides for the review of 

denied boarding compensation every 

two years through a specific formula to 

calculate the revised DBC liability limit 

amounts. The formula is below: 

Current DBC limit 3 in § 250.5(a)(2) 

multiplied by (a/b) rounded to the 

nearest $25 

2536 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

4 80 FR 30144. 

5Section 250.5(a)(2) provides that the liability 

limit amount for DBC is $675 for passengers who 

are denied boarding involuntarily on a domestic 

flight by a carrier who offers alternate 

transportation that is planned to arrive at the 

passenger’s first stopover or final destination more 

than one hour but less than two hours after the 

planned arrival time of the passenger’s original 

flight. Section 250.5(a)(3) provides that the liability 

limit amount for DBC is $1,350 for passengers who 

are denied boarding involuntarily on a domestic 

flight by a carrier who offers alternate 

transportation that is planned to arrive at the 

passenger’s first stopover or final destination more 

than two hours after the planned arrival time of the 

passenger’s original flight. 

Where: 

a = July CPI–U of year of current adjustment 

b = the CPI–U figure in August 2011 when 

the inflation adjustment provision was 

added to part 250. 

Section 250.5(e) specifies that the 

DBC liability limit in § 250.5(a)(3) shall 

be twice the revised limit for 

§ 250.5(a)(2), the DBC liability limit in 

§ 250.5(b)(2) shall be the same as the 

revised limit for § 250.5(a)(2), and the 

DBC liability limit in § 250.5(b)(3) shall 

be twice the revised limit in 

§ 250.5(a)(2). 

In a final rule issued on May 27, 2015, 

the Department reviewed the DBC 

liability limit amounts then in effect 

($650 and $1,300). Based on the formula 

prescribed in § 250.5(e), using the CPI– 

U for July 2014, the Department 

determined that the DBC liability limit 

amounts should be raised to $675/ 

$1,350.4

For this review, we are using the CPI– 

U for July 2020, which was issued by 

the Bureau of Labor Statistics on August 

12, 2020. In this review, we apply the 

formula using the CPI–U from August 

2011 (the basis month required by the 

formula) and July 2020. The results of 

this calculation require that the DBC 

liability limit amounts be raised. 

Specifically, the appropriate inflation 

adjustment for the amount provided in 

§ 250.5(a)(2) is $675 × 259.101/226.545 

[$675 × 1.1437], which yields $772. The 

base amount of $675 in the formula was 

the denied boarding compensation 

liability limit amount in § 250.5(a)(2),5

as adjusted by the 2015 final rule; 

259.101 was the CPI–U for July 2020, 

and 226.545 was the CPI–U for August 

2011. Section 250.5(e) requires us to 

round the adjustment to the nearest $25, 

which is $775 in this case. Section 250.5 

under paragraphs (a)(3) and (b)(3) 

provide that for passengers who are not 

rerouted to reach their destination 

within two hours of the planned arrival 

time of their original domestic flight 

(four hours for international 

transportation), the DBC liability limit 

amount is twice the amount provided by 

§ 250.5(a)(2) and (b)(2); therefore, under 

the formula adjustment, this amount is 

twice $775, or $1,550. 

IV. Revision of Domestic Baggage 

Liability Limit 

The baggage liability limit that air 

carriers may apply to domestic air 

service is established by 14 CFR part 

254. This limit applies to a carrier’s 

liabilities towards any provable direct or 

consequential damages resulting from 

the disappearance of, damage to, or 

delay in delivery of a passenger’s 

baggage that was in a carrier’s custody 

during domestic air transportation. Like 

the requirements regarding the 

provision of DBC to passengers in 

appropriate circumstances, this 

requirement has never limited the 

maximum amount of compensation a 

carrier may provide a passenger in 

connection with mishandled baggage. It 

merely provides a regulatory minimum 

liability limit that carriers may set. 

Section 254.6 requires review every two 

years of the limit of liability prescribed 

in part 254 and revision of the limit of 

liability, if necessary, to reflect changes 

in the CPI–U as of July of each review 

year through a specific formula. The 

formula is below: 

$2500 × (a/b) rounded to the nearest 

$100 

Where: 

a = July CPI–U of year of current adjustment 

b = the CPI–U figure in December 1999 when 

the inflation adjustment provision was 

added to part 254. 

The application of the formula during 

the 2014–2015 review of the domestic 

baggage liability limit raised the amount 

from $3,400 to the current amount of 

$3,500. The current review requires 

another inflation adjustment. Applying 

the formula using the consumer price 

index for December 1999 (the basis 

month required by the formula) and July 

2020, the appropriate inflation 

adjustment is $2,500 × 259.101/168.30 

[$2,500 × 1.5395], which yields 

$3,848.75. The base amount of $2,500 in 

the formula was the minimum liability 

limit in part 254 at the time that this 

biennial indexing provision was added 

to the rule in 1999, 259.101 was the 

CPI–U for July 2020, and 168.30 was the 

CPI–U for December 1999. Section 254.6 

requires rounding the adjustment to the 

nearest $100, which is $3,800. 

V. Regulatory Analyses and Notices 

A. Good Cause for Issuing Rule Without 

Prior Notice and Comment 

Section 553 of the Administrative 

Procedure Act (APA) (5 U.S.C. 553) 

provides that when an agency, for good 

cause, finds that notice and public 

procedure thereon are impractical, 

unnecessary, or contrary to the public 

interest, the agency may issue a final 

rule without providing notice and an 

opportunity for public comment (5 

U.S.C. 553(b)(3)(B)). The Department 

has determined that there is good cause 

to issue this final rule without notice 

and an opportunity for public comment 

because such notice and comment 

would be unnecessary. 

This rule implements section 425(e) 

of the TICKETS Act by making 

conforming changes to the rule text of 

14 CFR part 250 to clarify that the 

Department’s oversales regulation does 

not impose a ceiling on the amount of 

denied boarding compensation an 

airline may provide to a passenger 

involuntarily denied boarding. These 

editorial changes do not amend what 

the rule previously required and is not 

expected to impact carriers’ current 

practice. This rule also implements 

sections 425(b)–(d) of the TICKETS Act 

by incorporating, virtually verbatim, the 

statutory language prohibiting airlines 

from involuntarily denying boarding to 

a passenger after the passenger’s 

boarding pass has been collected or 

scanned and the passenger has boarded. 

Since the Department is exercising no 

discretion to implement these TICKETS 

Act provisions, public comment is 

unnecessary. 

The Department has also determined 

that under 5 U.S.C. 553(b)(3)(B) good 

cause exists for dispensing with a notice 

of proposed rulemaking and public 

comment for the inflation adjustments 

herein as the application of this rule 

does not involve any agency discretion. 

These adjustments are a ministerial 

inflation update based on the terms and 

formulas set by 14 CFR 250.5 and 14 

CFR 254.6. Those formulas were subject 

to notice and comment in the 

rulemaking proceedings during which 

they were added to the baggage liability 

and oversales rules. Accordingly, 

because this is purely a formula update, 

we find that there is good cause to 

dispense with notice and comment for 

this rulemaking. 

B. Executive Order 12866 

This final rule has been evaluated 

following existing policies and 

procedures, and is considered not 

significant under Executive Order 12866 

and DOT’s Regulatory Policies and 

Procedures. Therefore, the rule has not 

been reviewed by the Office of 

Management and Budget (OMB) under 

Executive Order 12866. This regulation 

conforms with the policies and 

procedures of DOT’s administrative rule 

on rulemakings. 49 CFR part 5. 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2537 

6Source: Air Travel Consumer Report, February 

2020 edition, page 38. https://

www.transportation.gov/individuals/aviationconsumer-protection/february-2020-air-travelconsumer-report. 

7The information provided to the Department by 

carriers in 2013 was based on the number of 

mishandled baggage reports (MBRs) filed with 

carriers by passengers, which was consistent with 

the reporting requirement in effect then pursuant to 

14 CFR part 234. The number of MBRs in general 

is equal to the number of passengers who 

experienced mishandled bags. In 2016, the 

Department revised part 234 by requiring reporting 

carriers to report the number of mishandled bags 

instead of MBRs. See, Final Rule, Reporting of Data 

for Mishandled Baggage and Wheelchairs and 

Scooters Transported in Aircraft Cargo 

Compartments, 81 FR 76300, Nov. 2, 2016. The new 

reporting requirement became effective in 2019. As 

one MBR may contain multiple mishandled bags, 

the number of mishandled bags is in general 

slightly larger than the number of MBRs. 

Revisions Implementing the TICKETS 

Act 

The rule revises 14 CFR part 250 to 

implement certain provisions of the 

TICKETS Act, but does not impose 

additional costs on carriers. The 

revision clarifies the meaning of 

‘‘maximum’’ DBC and DBC ‘‘limits,’’ but 

does not affect the amounts carriers 

must compensate passengers. Instead, 

the clarification is intended to prevent 

any potential misunderstanding from 

the public. The revision also prohibits 

removing passengers after their boarding 

passes are accepted by carriers or after 

they board aircraft, codifying a selfeffectuating statutory provision. 

Removing passengers after their 

boarding passes are accepted is not a 

common practice among carriers, and 

the revision will not require carriers to 

alter their behavior meaningfully. Thus, 

the benefits and costs associated with 

implementing the TICKETS Act 

provisions are de minimis. 

Denied Boarding Compensation 

Liability Limits 

The rule provides for an inflation 

adjustment to the DBC liability limit 

amounts that air carriers and foreign air 

carriers must pay passengers who are 

involuntarily denied boarding. The 

inflation adjustment is required by 

regulation and does not involve any 

exercise of discretion or interpretation. 

Because the Department does not have 

the flexibility to alter the inflation 

adjustment, it did not consider 

regulatory alternatives. The rule 

increases transfers from carriers to 

passengers to the extent that it increases 

compensation; any increase, however, 

would be minimal. In 2019, 20,868 

passengers—24 passengers per 

1,000,000 enplaned passengers—were 

involuntarily denied boarding on 

scheduled domestic and outbound 

international flights.6 Many of those 

passengers qualified for compensation 

amounts below the DBC liability limit, 

and their compensation would not have 

been affected by the increase in the 

limits. 

Domestic Baggage Liability 

The rule provides for an inflation 

adjustment to the amount of the 

minimum limit on baggage liability that 

air carriers may assert in cases of 

mishandled baggage. The adjustment is 

required by current regulation, with no 

opportunity for interpretation. The rule 

increases transfers from carriers to 

passengers to the extent that it increases 

mishandled baggage compensation. This 

increase would be limited, however, 

because the majority of mishandled 

baggage cases do not result in claims 

that meet the liability limit. Based on 

information provided by carriers during 

an inflation adjustment review to the 

domestic baggage limit in 2013, slightly 

more than half of one percent of 

mishandled bags qualify for the current 

limit.7

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(5 U.S.C. 601–612) requires an 

assessment of the impact of proposed 

and final rules on small entities unless 

the agency certifies that the proposed 

regulation will not have a significant 

economic impact on a substantial 

number of small entities. An air carrier 

or a foreign air carrier is a small 

business if it provides air transportation 

only with small aircraft (i.e., aircraft 

with up to 60 seats/18,000-pound 

payload capacity). See 14 CFR 399.73. 

The revisions of the baggage liability 

amounts affect flight segments operated 

with large aircraft, i.e., more than 60 

seats. The revisions of the DBC amounts 

affect flight segments operated with 

aircraft designed to have passenger 

capacity of 30 or more. As a result, 

many operations of small entities, such 

as air taxis and many commuter air 

carriers, are not covered by the rule. 

Moreover, any additional costs for small 

entities associated with the rule will be 

minimal and, in the case of baggage 

liability, may be covered by insurance. 

Accordingly, I hereby certify that this 

action will not have a significant 

economic impact on a substantial 

number of small entities. 

D. Paperwork Reduction Act 

This final rule imposes no new 

reporting or record keeping 

requirements necessitating clearance by 

OMB. 

E. National Environmental Policy Act 

The Department has analyzed the 

environmental impacts of this proposed 

action pursuant to the National 

Environmental Policy Act of 1969 (42 

U.S.C. 4321, et seq.), and has 

determined that it is categorically 

excluded pursuant to DOT Order 

5610.1C, Procedures for Considering 

Environmental Impacts (44 FR 56420, 

Oct. 1, 1979) available at https://

www.transportation.gov/office-policy/ 

transportation-policy/proceduresconsideringenvironmental-impacts-dotorder-56101c. Categorical exclusions are 

actions identified in an agency’s NEPA 

implementing procedures that do not 

normally have a significant impact on 

the environment, and therefore do not 

require either an environmental 

assessment (EA) or environmental 

impact statement (EIS). See 40 CFR 

1508.1(d). In analyzing the applicability 

of a categorical exclusion, the agency 

must also consider whether 

extraordinary circumstances are present 

that would warrant the preparation of 

an EA or EIS. Id. Paragraph 4.c.6.i of 

DOT Order 5610.1C provides that 

‘‘[a]ctions relating to consumer 

protection, including regulations’’ are 

categorically excluded. The purpose of 

this rulemaking is to adjust the amounts 

for denied boarding compensation and 

the minimum domestic baggage liability 

limit. The Department does not 

anticipate any environmental impacts, 

and there are no extraordinary 

circumstances present in connection 

with this rulemaking. 

List of Subjects 

14 CFR Part 250 

Air carriers, Consumer protection, 

Reporting and recordkeeping 

requirements. 

14 CFR Part 254 

Air carriers, Administrative practice 

and procedure, Consumer protection, 

Reporting and recordkeeping 

requirements. 

Accordingly, the Department of 

Transportation amends 14 CFR parts 

250 and 254 as follows: 

PART 250—OVERSALES 

■ 1. The authority citation for 14 CFR 

part 250 continues to read as follows: 

Authority: 49 U.S.C. 329 and chapters 

41102, 41301, 41708, 41709, and 41712 

■ 2. Revise § 250.2 to read as follows: 

§ 250.2 Applicability. 

Except for § 250.7, this part applies to 

every carrier, as defined in § 250.1, with 

respect to scheduled flight segments 

2538 Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 

using an aircraft that has a designed 

passenger capacity of 30 or more 

passenger seats, operating in interstate 

air transportation or foreign air 

transportation with respect to nonstop 

flight segments originating at a point 

within the United States. Section 250.7 

applies to any air carrier or foreign air 

carrier as those terms are defined in 49 

U.S.C. 40102. 

■ 3. Amend § 250.2b by adding 

paragraph (d) to read as follows: 

§ 250.2b Carriers to request volunteers for 

denied boarding. 

* * * * * 

(d) Carriers must proactively offer to 

pay compensation to a passenger who is 

voluntarily or involuntarily denied 

boarding on an oversold flight, rather 

than waiting until the passenger 

requests the compensation. 

■ 4. Amend § 250.5 by revising 

paragraphs (a)(2) and (3), (b)(2) and (3), 

and (e) and adding paragraph (g) to read 

as follows: 

§ 250.5 Amount of denied boarding 

compensation for passengers denied 

boarding involuntarily. 

(a) * * * 

(2) Compensation shall be at least 200 

percent of the fare to the passenger’s 

destination or first stopover, or $775, 

whichever is lower, if the carrier offers 

alternate transportation that, at the time 

the arrangement is made, is planned to 

arrive at the airport of the passenger’s 

first stopover, or if none, the airport of 

the passenger’s final destination more 

than one hour but less than two hours 

after the planned arrival time of the 

passenger’s original flight; and 

(3) Compensation shall be at least 400 

percent of the fare to the passenger’s 

destination or first stopover, or $1,550, 

whichever is lower, if the carrier does 

not offer alternate transportation that, at 

the time the arrangement is made, is 

planned to arrive at the airport of the 

passenger’s first stopover, or if none, the 

airport of the passenger’s final 

destination less than two hours after the 

planned arrival time of the passenger’s 

original flight. 

(b) * * * 

(2) Compensation shall be at least 200 

percent of the fare to the passenger’s 

destination or first stopover, or $775, 

whichever is lower, if the carrier offers 

alternate transportation that, at the time 

the arrangement is made, is planned to 

arrive at the airport of the passenger’s 

first stopover, or if not, the airport of the 

passenger’s final destination more than 

one hour but less than four hours after 

the planned arrival time of the 

passenger’s original flight; and 

(3) Compensation shall be at least 400 

percent of the fare to the passenger’s 

destination or first stopover, or $1,350, 

whichever is lower, if the carrier does 

not offer alternate transportation that, at 

the time the arrangement is made, is 

planned to arrive at the airport of the 

passenger’s first stopover, or if not, the 

airport of the passenger’s final 

destination less than four hours after the 

planned arrival time of the passenger’s 

original flight. 

* * * * * 

(e) The Department of Transportation 

will review the denied boarding 

compensation liability limit amounts 

prescribed in this part every two years 

except for the first review, which will 

take place in 2012, to put the reviews 

specified in this section on the same 

cycle as the reviews of domestic baggage 

liability limits specified in 14 CFR 

254.6. The Department will use any 

increase in the Consumer Price Index 

for All Urban Consumers (CPI–U) as of 

July of each review year to calculate the 

increased denied boarding 

compensation liability limit amounts. 

The Department will use the following 

formula: 

(1) Current Denied Boarding 

Compensation liability limit in 

paragraph (a)(2) of this section 

multiplied by (a/b) rounded to the 

nearest $25 where a = July CPI–U of 

year of current adjustment and b = the 

CPI–U figure in August 2011 when the 

inflation adjustment provision was 

added to this part. 

(2) The Denied Boarding 

Compensation liability limit in 

paragraph (a)(3) of this section shall be 

twice the revised limit for paragraph 

(a)(2) of this section. 

(3) The Denied Boarding 

Compensation liability limit in 

paragraph (b)(2) of this section shall be 

the same as the revised limit for 

paragraph (a)(2) of this section, and the 

Denied Boarding Compensation liability 

limit in paragraph (b)(3) of this section 

shall be twice the revised limit for 

paragraph (a)(2) of this section. 

* * * * * 

(g) Nothing in this part prohibits 

carriers from offering denied boarding 

compensations in an amount more than 

the amount calculated according to 

paragraphs (a) through (d) of this 

section, or more than the denied 

boarding compensation liability limit 

amounts effective at the time of denied 

boarding. 

■ 5. Add § 250.7 to read as follows: 

§ 250.7 Provision to implement the 

Transparency Improvements and 

Compensation to Keep Every Ticketholder 

Safe Act of 2018. 

(a) Boarded passengers. A covered air 

carrier may not deny a revenue 

passenger traveling on a confirmed 

reservation permission to board, or 

involuntarily remove that passenger 

from the aircraft, once a revenue 

passenger has: 

(1) Checked in for the flight prior to 

the check-in deadline; and 

(2) Had their ticket or boarding pass 

collected or electronically scanned and 

accepted by the gate agent. 

(b) Limitations. The prohibition 

pursuant to paragraph (a) of this section 

shall not apply when: 

(1) There is a safety, security, or 

health risk with respect to that revenue 

passenger or there is a safety or security 

issue requiring removal of a revenue 

passenger; or 

(2) The revenue passenger is engaging 

in behavior that is obscene, disruptive, 

or otherwise unlawful. 

(c) Rule of construction. Nothing in 

this section may be construed to limit or 

otherwise affect the responsibility or 

authority of a pilot in command of an 

aircraft under 14 CFR 121.533, or limit 

any penalty under section 46504 of title 

49, United States Code. 

■ 6. Amend § 250.9(b) in the statement 

under ‘‘AMOUNT OF DENIED 

BOARDING COMPENSATION’’ by 

revising the entries for ‘‘Domestic 

Transportation’’ and ‘‘International 

Transportation’’ to read as follows: 

§ 250.9 Written explanation of denied 

boarding compensation and boarding 

priorities, and verbal notification of denied 

boarding compensation. 

* * * * * 

(b) * * * 

Amount of Denied Boarding 

Compensation 

Domestic Transportation 

Passengers traveling between points 

within the United States (including the 

territories and possessions) who are 

denied boarding involuntarily from an 

oversold flight are entitled to: (1) No 

compensation if the carrier offers 

alternate transportation that is planned 

to arrive at the passenger’s destination 

or first stopover not later than one hour 

after the planned arrival time of the 

passenger’s original flight; (2) at least 

200 percent of the fare to the passenger’s 

destination or first stopover, or $775, 

whichever is lower, if the carrier offers 

alternate transportation that is planned 

to arrive at the passenger’s destination 

or first stopover more than one hour but 

less than two hours after the planned 

Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations 2539 

1Public Law 114–74, sec. 701, 129 Stat. 599 

(2015). The Act amends the Federal Civil Penalties 

Inflation Adjustment Act (‘‘FCPIAA’’), Public Law 

101–410, 104 Stat. 890 (codified at 28 U.S.C. 2461 

note). 

2 81 FR 42476 (2016); 82 FR 8135 (2017); 83 FR 

2902 (2018); 84 FR 3980 (2019), 85 FR 2014 (2020). 

3 16 CFR 1.98. 

arrival time of the passenger’s original 

flight; and (3) at least 400 percent of the 

fare to the passenger’s destination or 

first stopover, or $1,550, whichever is 

lower, if the carrier does not offer 

alternate transportation that is planned 

to arrive at the airport of the passenger’s 

destination or first stopover less than 

two hours after the planned arrival time 

of the passenger’s original flight. 

0 to 1 hour arrival delay ................ No compensation. 

1 to 2 hour arrival delay ................ 200% of one-way fare (carriers may limit this amount to $775 if it is higher than $775).* 

Over 2 hours arrival delay ............ 400% of one-way fare (carriers may limit this amount to $1,550 if it is higher than $1,550).* 

* Nothing in the Department of Transportation’s regulation prohibits carriers from offering denied boarding compensations in an amount 

more than the amount calculated according to the chart above, or more than the denied boarding compensation liability limit amounts 

stated in the chart. 

International Transportation 

Passengers traveling from the United 

States to a foreign point who are denied 

boarding involuntarily from an oversold 

flight originating at a U.S. airport are 

entitled to: (1) No compensation if the 

carrier offers alternate transportation 

that is planned to arrive at the 

passenger’s destination or first stopover 

not later than one hour after the planned 

arrival time of the passenger’s original 

flight; (2) at least 200 percent of the fare 

to the passenger’s destination or first 

stopover, or $775, whichever is lower, if 

the carrier offers alternate transportation 

that is planned to arrive at the 

passenger’s destination or first stopover 

more than one hour but less than four 

hours after the planned arrival time of 

the passenger’s original flight; and (3) at 

least 400 percent of the fare to the 

passenger’s destination or first stopover, 

or $1,550, whichever is lower, if the 

carrier does not offer alternate 

transportation that is planned to arrive 

at the airport of the passenger’s 

destination or first stopover less than 

four hours after the planned arrival time 

of the passenger’s original flight. 

0 to 1 hour arrival delay ................ No compensation. 

1 to 4 hour arrival delay ................ 200% of one-way fare (carriers may limit this amount to $775 if it is higher than $775).** 

Over 4 hours arrival delay ............ 400% of one-way fare (carriers may limit this amount to $1,550 if it is higher than 1,550).** 

** Nothing in the Department of Transportation’s regulation prohibits carriers from offering denied boarding compensations in an 

amount more than the amount calculated according to the chart above, or more than the denied boarding compensation liability limit 

amounts stated in the chart. 

* * * * * 

PART 254—DOMESTIC BAGGAGE 

LIABILITY 

■ 7. The authority citation for 14 CFR 

part 254 continues to read as follows: 

Authority: 49 U.S.C. 40113, 41501, 41504, 

41510, 41702, and 41707. 

§ 254.4 [Amended] 

■ 8. Section 254.4 is amended by 

removing ‘‘$3,500’’ and adding ‘‘$3,800’’ 

in its place. 

§ 254.5 [Amended] 

■ 9. Section 254.5(b) is amended by 

removing ‘‘$3,500’’ and adding ‘‘$3,800’’ 

in its place. 

■ 10. Section 254.6 is revised to read as 

follows: 

§ 254.6 Periodic adjustments. 

The Department of Transportation 

will review the domestic baggage 

liability limit prescribed in this part 

every two years. The Department will 

use the Consumer Price Index for All 

Urban Consumers as of July of each 

review year to calculate the revised 

domestic baggage liability limit amount. 

The Department will use the following 

formula: $2500 × (a/b) rounded to the 

nearest $100, where a = July CPI–U of 

year of current adjustment and b = the 

CPI–U figure in December 1999 when 

the inflation adjustment provision was 

added to this part. 

Issued in Washington, DC, on this 15th day 

of December 2020, pursuant to authority 

delegated in 49 CFR 1.27(n). 

Steven G. Bradbury, 

General Counsel. 

[FR Doc. 2020–28001 Filed 1–12–21; 8:45 am] 

BILLING CODE 4910–9X–P 

FEDERAL TRADE COMMISSION 

16 CFR Part 1 

Adjustments to Civil Penalty Amounts 

AGENCY: Federal Trade Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Trade 

Commission (‘‘FTC’’ or ‘‘Commission’’) 

is implementing adjustments to the civil 

penalty amounts within its jurisdiction 

to account for inflation, as required by 

law. 

DATES: Effective January 13, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Kenny A. Wright, Attorney (202–326– 

2907), or Marie Choi, Attorney (202– 

326–3368), Office of the General 

Counsel, FTC, 600 Pennsylvania 

Avenue NW, Washington, DC 20580. 

SUPPLEMENTARY INFORMATION: The 

Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 1 directs agencies to adjust the civil 

penalty maximums under their 

jurisdiction for inflation every January. 

Accordingly, the Commission issues 

annual adjustments to the maximum 

civil penalty amounts under its 

jurisdiction.2

Commission Rule § 1.98 sets forth the 

applicable civil penalty amounts for 

violations of certain laws enforced by 

the Commission.3 As directed by the 

FCPIAA, the Commission is issuing 

adjustments to increase these maximum 

civil penalty amounts to address 

inflation since its prior 2020 

adjustment. The following adjusted 

amounts will take effect on January 13, 

2021: 

• Section 7A(g)(1) of the Clayton Act, 

15 U.S.C. 18a(g)(1) (premerger filing 

notification violations under the HartScott-Rodino Improvements Act)— 

Increase from $43,280 to $43,792; 

• Section 11(l) of the Clayton Act, 15 

U.S.C. 21(l) (violations of cease and 

desist orders issued under Clayton Act 

section 11(b))—Increase from $22,994 to 

$23,266; 

• Section 5(l) of the FTC Act, 15 

U.S.C. 45(l) (unfair or deceptive acts or 

practices)—Increase from $43,280 to 

$43,792; 

• Section 5(m)(1)(A) of the FTC Act, 

15 U.S.C. 45(m)(1)(A) (unfair or