UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Order 2012

- 4

- 18 Action on IATA Agreement Issued by the Department of Transportation on the 13 th day of April , 2012 Served: April 13, 2012

Docket 32851, Agreemen t CAB 1175 Docket OST

- 2006

- 25307 Docket OST

- 2006

- 26404

Docket OST

- 2010

- 0114

Docket OST

- 201 2

- 0058

APPLICATION FOR FURTHER EXEMPTION FROM CONDITION #2

By application filed in Docket OST

- 2010

- 0 1 14 on May 3, 2010, the In ternational Air Transport Association (“IATA”) proposes that the Department grant IATA and its member airlines a broad prospective exemption from Condition #2, one of the existing conditions imposed upon its traffic conference system as part of the Departm ent’s continued approval of its “Provisions for the Conduct of the IATA Traffic Conferences” (“by

- laws”). 1 The requested exemption is

1 Order 85

- 5

- 32 (May 6, 1985). The various traffic conferences are the means through which IATA’s member airlines have traditionally met, discussed and agreed upon resolutions and recommended practices to be followed

Agreements Adopted by the International Air Transport Association Relating to the Traffic Conferences

Application for Exemption Under 49 U.S.C. 40109 From the Conditions of Ord er 68

- 7

- 55 Relating to the IATA Traffic Conferences

Notice of IATA Traffic Conference Actions Tentatively Exempted From Filing for Approval2

designed to facilitate prompt implementation of routine but essential standard setting and interline coordination agreeme nts without antitrust immunity , while preserving public notice and regulatory options

.
Condition #2, most recently imposed on the by

- laws by Order 68

- 7

- 55 (July 12, 1968) and affirmed by Order 85

- 5

- 32
, provides:

That the U.S. air carrier members of IATA shall submit to the [Department] for appropriate action all recommended practices, agreements and resolutions adopted by IATA and each of its conferences and permanent conference committees. 2

The term “appropriate action” has been construed to mean either approval under 49 U.S.C. section 41309, or exemption from the antitrust laws under 49 U.S.C. s ections 41308
, prior to the agreement being declared effective by IATA or implemented by its members. 3 This advance filing condition applies to all traffic conf erence actions worldwide, except in markets where the Department has given an exemption from condition #2 for certain agreements or kinds of agreements resulting from approved conference activities. 4

IATA’s Application

IATA states that its airline member s annually reach a large number of interline agreements within the traffic conferences, which are designed under its current by

- laws to facilitate the interline movement of passengers and cargo
, primarily without the need for antitrust immunity under U.S. law
, as recognized by the Department in Order 2007

- 3

- 23. According to IATA, when first imposed, condition #2 tracked and complemented statutory requirements requiring the filing and regulatory review of all agreements of U.S. airlines in foreign air trans portation, but these sections of the Code no longer require such filings and make the grant of antitrust immunity discretionary in many cases. 5 It emphasizes that many of these conference agreements no longer present the types of legal and policy concern s that have prompted close regulatory scrutiny by the Department and its predecessor agency since the general filing

by the airlines under grants of antitrust immunity. The traffic conferences are administratively divided into agency, services and tariff conferences, which are in turn structured geographically. Separate conferences are held for passenger and cargo transportation.
2 Related conditions on the by

- laws require that minutes of the Conferences and other associated in formation be filed with the agreements.
3 U.S. air carrier members of IATA have given IATA a power

- of

- attorney to make such submissions on their behalf. Where IATA declares an agreement effective without prior Department action, that agreement will not b e deemed to have been approved by the Department and will not enjoy immunity from application of the U.S. antitrust laws.
4 In addition, certain kinds of conference activities have been proscribed altogether in some markets by Department order. See, e.g. O rder 2007

- 3

- 23 (March 30, 2007) , which disapproved the traditional IATA price

setting process in most U.S.

- European and U.S.

- Australian markets . Other restrictions, such as those on agency conference activities, are described in Order 2006

- 7

- 3 at pp

. 3

- 14

. 5 Title 49 U.S.C., sections 41309 and 41308

.3

requirement was first imposed and
, consequently
, that the need for U.S. regulatory oversight before conference agreements may be implemente d has diminished significantly

.
As noted by IATA, the recent focus of its by

- laws on facilitation of interline services by airlines acting in service and pricing areas has allowed the Department to grant both specific and more general exemptions from c ondition #2 in areas where regulatory concerns have diminished or disappeared, particularly in the numerous services conferences. A s a prime example IATA notes that it and the Department have already worked together to identify categories of service confe rence resolutions that need only be filed for information in a public docket before being declared effective under IATA procedures, without antitrust immunity. 6 It also notes that DOT exempted from filing, on a worldwide basis, all resolutions adopted by IATA’s passenger and cargo agency conferences. 7 IATA further notes that even in the competition

- sensitive area of interlin e able fares, IATA has moved to a market

- based “Flex F are” system which it has made effective without antitrust immunity pursuant to D epartment orders exempting Flex F are resolutions from condition #2. 8

Yet, IATA points out that condition #2 still has broad application, and most traffic conference agreements must still be submitted well in advance of their proposed effective date for DO T review, even though the Department has been increasingly disposed to grant ad hoc filing exemption relief to allow implementation without antitrust immunity. IATA recognizes that the time and effort required for Department action, even on IATA matters n ot involving significant policy issues, is still substantial , and delays are common . IATA submits that eliminating delay to the extent possible in implementing non

- controversial agreements, including amendments and revalidations, will benefit the travelin g and shipping public by reducing delay and uncertainty for the carriers and reducing the resources now devoted by the Department to the review of such agreements, while fully satisfying both the public’s and the Department’s needs for information on IATA Traffic Conference activities
, and providing for pre

- effectiveness review and Department action in the case of agreements perceived by the Department to raise significant competitive , consumer and other issues. Such a balance, IATA asserts, makes its
prop osed prospective exemption from condition #2 in the public interest.

IATA’s Proposal

IATA proposes, by means of a carefully tailored exemption from condition #2, to establish a three

- tiered system for the filing and implementation of traffic conference a greements.

The first tier would include all traffic conference agreements except those included in tiers two and three . IATA would file all first

- tier agreements, and related IATA documentation such as conference minutes , “for information” in a master public docket maintained by the

6 See e.g. O rders 2002

- 1

- 15 (February 1, 2002); 2002

- 7

- 3 (July 5, 2002); 2002

- 8

- 16 (August 20, 2002); 2003

- 6

- 15 (June 13, 2003); 2003

- 7

- 22 (July 23, 2003); 2003

- 11

- 9 (November 20, 2003) and 2005

- 7

- 20 (July 25, 2005).
7 Order 2008

- 4

- 45 (May 5, 2008).
8 See e.g. Orders 2006

- 12

- 24 (January 2, 2007), 2009

- 10

- 9 (October 22, 2009) and others discussed infra

.4

Department, at least 30 days prior to their intended effective date s . The Department and interested parties would then have a minimum of 30 days to review each agreement. At its discretion, the Department could advise IATA on or before the thirtieth day after the date of filing to delay the effective date for an additional period of up to 60 days to allow further time for Department consideration. At any time during the review period, the Department could advise IATA to re

- file the agreement in a separate docket for Department review and action. Such filings would then have to await Department action. If the Department d id not give IATA notice to postpone the effective date or to re

- file the agreement, then IATA would be able to declare the agreement effective according to its terms, without further Department action. Such agreements could then be implemented, but would not have antitrust immunity.

The second tier would consist of any agreements in specific subject areas listed by IATA in its application . These are subject areas which the Department has indicated that it still chooses to review on a case

- by

- case basis before implementation. T his category would include all amendments or modifications to recommended pract ices, agreements and/or resolutions listed in IATA’s application , and all new recommended practices, agreements and resolutions addressing substantially similar subjects. Examples of such subject areas include conditions of carriage for passengers and car go, ticket notices, air waybills, carriage of cargo using electronic data interchange, cargo security, carriage of passengers requiring special assistance, and Flex Fares in U.S. markets. 9

The third tier would be those recommended practices, agreements or resolutions that IATA still wishes to file with the Department for approval and antitrust immunity under sections 41308 and 41309 of the Code. As is the case now, all such filings would have to await Department review and appropriate action before implem entation. 10

Decision

We have decided to grant the exemption from condition #2 essentially as proposed by IATA. For the reasons identified by IATA, and elaborated below, we find that the exemption, subject to several conditions and understandings, is in t he public interest. 11 The exemption is set forth in full at Appendices A and B to this order.

9 IATA’s proposal contemplates that the Department may amend the second

- tier subject areas at its discretio n, upon written notice to IATA. Our procedures in this regard are discussed, infra
, at page 9 , and in Appendix A, Section B.
10 Such action could include a determination to grant a sua sponte exemption from review, as discussed below.
11 Comments were sub mitted in Docket 2010

- 0114 on August 29, 2011, by Jocelyn D. Curtis, and on October 6, 2011, by Basil Devine. Both are self

- described consumers who believe that the IATA process requires more “transparency,” such as allowing consumers free and easy access to detailed transcripts and/or audio recordings of the discussions that take place in the conferences. Although late, we will accept the comments in the interests of a complete record. As described in this Order, the Department believes that the expande d exemption adopted here, as conditioned, provides both enhanced transparency and effective consumer protections.5

The expedited filing process we are implementing here through this expanded exemption is a logical extension of many actions we have taken over the years to refi ne our areas of regulatory concern and to develop appropriate responses to evolving traffic conference activities. 12

Condition #2 was initially imposed on the by

- laws to insure that the C ivil Aeronautics Board had review authority over all IATA traffic con ference actions worldwide, even though by statute only agreements involving U.S. carriers affecting “foreign air transportation” were required to be filed. The broader scope was deemed necessary to insure that neither worldwide conditions of service, nor fare rules between foreign points, operated to prejudice U.S

. consumers. With deregulation and the easing of bilateral governmental constraints on both service and price competition, fueling growth in air travel, IATA conference activities have focused in creasingly

on technical standard setting and the facilitation of interline travel rather than setting fares by agreement among competitors . Following statutory changes to make all agreement filing voluntary and the grant of antitrust immunity discretionar y in most cases, the Department sharpened its criteria to distinguish facilitative functions from those more problematic to competition and consumers , and to narrow the scope of IATA agreements covered by Condition #2

.
A step toward a new approach to IATA activities was taken in 1998 when the Department continued its approval of IATA’s Articles of Incorporation but withdrew their antitrust immunity. 13 Thereafter, IATA and the Department investigate d the possibility of exempting specific categories of servi ce conference resolutions from the advance filing and approval requirement where the resolutions did not raise public interest issues or need antitrust immunity for implementation.

In Order 2002

- 1

- 15, February 1, 2002, the Department approved IATA’s req uest for an exemption from condition #2 to adopt and implement future changes in 37 specified resolutions and recommended practices (RPs) of its Worldwide Passenger Services Conference (PSC) without filing them for review. Such resolutions and RPs retain their previously

- granted antitrust immunity until they are amended or revalidated. The Department agreed with IATA that the kinds of agreements exempted by the order “are generally among those that have been approved consistently in the past...which have no t presented consumer protection, competitive or other problems under aviation regulations and policy, and which have been identified by IATA as not raising legal difficulties under U.S antitrust laws.” The Department concluded that “It is our judgment tha t the antitrust laws are a sufficient protection against abuse of the discussion authority which DOT has continued to give to the services conferences with regard to the subject matter of these agreements.”

12 An example of this evolution is the treatment of agency conferences. The CAB disapproved certain IATA resolutions jointly setting travel ag ent commissions to/from the U.S. in 1978, and in 1981 the CAB denied antitrust immunity to all agency conference activities affecting carrier

- agent relations within the U.S. U.S. carriers have since refrained from any participation in agreements fixing or recommending travel agent commissions outside the U.S., removing the CAB’s chief concern. By Order 2008

- 4

- 45, May 5, 2008, the Department exempted from filing under condition #2 all resolutions by IATA’s passenger and cargo agency conferences applicable worldwide.
13 Order 98

- 6

- 6, June 5, 1998.6

The Department granted the prospective exemption subject to two understandings. First, it

cover ed only the specific resolutions and RPs identified in the application, “and their present subject matter.” If resolutions were combined, or changed significantly in terms of subject matter, the Department a nd the public needed sufficient information to determine whether they f e ll under the exemption. 14 S econd, IATA would identify separately in any submission of conference agreements those resolutions and RPs which ha d been exempted and whose changes were bei ng filed “for information” only, and those which had not been exempted and which were being filed for review and prior approval before implementation.

Subsequently, t he Department exempt ed additional groups of resolutions and RPs of the worldwide passenge r and cargo services conferences that we found present ed no significant competitive or U.S. aviation policy issues, subject to the same understandings. See O rders 2002

- 7

- 3 (July 5, 2002), 2003

- 6

- 15 (June 13, 2003), and 2005

- 7

- 20 (July 25, 2005) exempting a total of 83 resolutions and recommended practices from passenger services conferences, and O rders 2002

- 8

- 16 (August 20, 2002), 2003

- 7

- 22 (July 23, 2003, and 2003

- 11

- 9 (November 20, 2003) exempting a total of 29 resolutions and RPs from the cargo services conferences.

In several orders dealing with agreements of both the services conferences and the traditionally more sensitive tariff conferences , the Department found it appropriate to grant specific exemptions from condition #2 on an ad hoc basis

. Some of the exemptions were granted at IATA’s request and others were granted sua sponte

. By Order 2008

- 9

- 26 (September 26, 2008) the Department determined that several resolutions rescinding rules on free and reduced

- rate travel, and amending certain fare con struction rules, did not involve the kind of conduct prohibited by Order 2007

- 3

- 23 and should be exempted from filing, subject, however, to the continuation of previously imposed conditions on the various resolutions, whether directly or through permanent effectiveness Resolution 001. By Order 2008

- 11

- 16 (November 26, 2008)

a nother sua sponte exemption was given to a composite agreement adopting technical currency changes that raise d no competitive issues and facilitate d interline service. Order 2009

- 2

- 6 (February 13, 2009) reviewed RP 1601 (C onditions for C arriage for C argo ) , adopted for foreign markets by the cargo services conference and filed for normal review by IATA. The Department found that antitrust immunity was not necessary and instead exempted the agreement from filing. Similarly, by Order 2009

- 6

- 8 (June 15, 2009) the Department exempted from filing amended R esolution 724 creating a new worldwide passenger ticket notice, adopted by the passenger services conference. By Order 2009

- 9

- 20 (Octobe r 5, 2009) the Department
approv ed and immuni zed a temporary extension of existing baggage allowance R esolution s 300 and 301 but exempted, subject to two conditions, new R esolution 302 which created a formula for selecting which baggage rules apply to an i nterline journey. Order 2010

- 5

- 21 (May 21, 2010) exempted a technical amendment to RP 1601 while approving a new RP 1630 ( Cargo Security)

. M ore recently, by Order 2011

- 3

- 3 (March 1, 2011) the Department reviewed a mixture of

14 The order directed IATA to assign new identification numbers to new, significantly changed, or consolidated resolutions and recommended practices, and either file an amended exemption application for them or file them for specific approval and immunity.7

technical amendments to existi ng ticketing resolutions and new recommended practices dealing with data exchanges and passengers with disabilities adopted by the passenger services conference, approving and granting immunity to most, subject to conditions, but granting a sua sponte fili ng exemption to one new recommended practice.

I n a series of orders the Department has exempted from filing for approval the establishment of fully

- flexible interline fares (“Flex F ares”) through a new IATA process designed to eliminate direct discussion s or other identifiable information sharing among airlines of the type proscribed for major markets by Order 2007

- 3

- 23. 15 As described in Order 2008

- 7

- 4 (July 7, 2008), Flex F ares for particular markets are derived by aggregating individual carrier interli n e able fares charged in each market, applying an algorithm to the distribution, and adding a n interline premium set by IATA . Changes to the algorithm or the interline premium

are adopted through an anonymous internet voting platform

.

T he Department, at IATA’s request, exempted Flex F are resolutions in foreign

- to

- foreign markets from filing for approval on the basis that IATA fares for travel between non

- U.S. markets typically present no public interest concerns involving U.S. passengers under U.S. aviat ion policy or U.S. antitrust laws to justify our review, and that the new process is unlikely to affect fares in U.S. markets and is also constrained by foreign competition law. 16

Subsequently, t he Department also exempted Flex Fares in U.S. markets, co ncluding that the mechanism does not appear to present the type of conduct we prohibited in major U.S. markets in Order 2007

- 3

- 23. The Flex Fares system is a mechanistic, computer

- driven process that involves no direct contact between carriers. It produc es IATA interline fares based on adjusted averages of market fares, rather than negotiations among competitors. A nnual and exceptional updates to the fares, as well as amendments to the methodology or the interline premium, likewise involve no direct cont acts between carriers, and the process is open to participation by non

- IATA carriers. Compared to traditional IATA tariff conference activities, there is much less risk that the Flex Fares process, or the resulting IATA interline fares, will have a signif icant spillover effect on individual airline prices. For each geographic Flex Fares market, our orders granted an exemption from condition #2 to the Flex Fares resolutions, future amendments to the resolutions, and the fares periodically produced by the a greements. In addition, there is no reason to believe that non

- IATA interline fares will cease to be widely available. However, the order imposed two express conditions on the exemption. To avoid the possibility that Flex F ares could be adopted in marke ts at issue where traditional tariff conferences were still authorized under previous orders, resulting in two overlapping forms of coordination in the same market, the Flex F are exemption was granted only upon non

-

15 Order 2007

- 3

- 23 disapproved the traditional IATA price

- setting process in most U.S.

- European and U.S.

- Australian markets.
16 Order s 2008

- 7

- 4 (July 7, 2008 ), 2006

- 12

- 24 (January 2, 2006), 2007

- 9

- 16 (September 19, 20 07), and 2008

- 4

- 45 (May 5, 2008).8

application of the by

- law procedures in t he subject markets. S econd, all previous conditions placed on other IATA resolutions and recommended practices continued to apply

. 17

Because Flex F ares are the product of a process, not a one

- time agreement, the filing exemptions we have granted broadl y included “any amendments to the agreements” to permit normal technical changes in the algorithm, the timing of Flex Fare updates, the interline premium, and the resulting fares, so long as there is no direct contact or identifiable information

- sharing b etween airlines. However, a doption and implementation of amendments to Flex Fares under our broad exemption requires IATA to exercise judgment to ensure that such changes do not involve the kind of conduct proscribed by Order 2007

- 3

- 23. F or example, IATA informally contacted the Department to discuss the possibility of adopting a “national carrier exception” in U.S. Flex fares markets similar to that which it had adopted in a number of foreign

- to

- foreign Flex Fares markets. 18 Under this exception to the n ormal process for selecting qualifying market fares, fares of national carriers in a market that fall outside the permitted distribution are nevertheless included. This clearly could have an impact on the average fare; moreover, in some city pairs the nat ional carrier fare could became the benchmark Flex Fare. Although this modification to the basic process was carrier

- neutral, the Department informed IATA that, regardless of the mechanics, it believed that the likely effect of the exception would be to p revent the undercutting of national carrier s’ fares and thus appeared tantamount to the kind of price

- setting activity that could have anticompe titive effects on other fares. IATA responded promptly to remove the “national carrier” provisions from all pro spective Flex Fare agreements, in both U.S. and foreign

- to

- foreign markets
, including those previously exempted

.
IATA’s application includes U.S. Flex Fares in the second tier of agreements, where changes would have to be filed for Department review and a ppropriate action before being implemented. As proposed, this would require all Flex Fare changes applicable to U.S. points
, including the annual and exceptional fare updates, as well as the interline premiums and the underlying methodology, to be filed f or Department action. However, a s granted herein, the exemption will apply that requirement only to changes in the underlying methodology and its procedures , while fare updates and changes in the interline premiums will be included in the first tier (fi ling for information, with implementation after a 30

- day waiting period ). This will

e nsure that the Department and interested parties have notice, in a separate docket, of any changes in the Flex Fare methodology or process that could have an impact on th e prices U.S. consumers might pay or the services they might receive, without und uly delaying implementation of F lex Fares under the existing method. Flex Fare agreements limited to non

U.S. markets will normally be included in tier one
, but we expect IAT A to continue to exercise judgement concerning changes in the non

- U.S. Flex Fares methodology or procedures that could have knock

- on anticompetitive effects on other fares.

17 Order 2008

- 7

- 24 (July 28, 2008)

. To illustrate, the order mentioned conditions limiting or negating fare construction and advertising and sales restrictions, citing Order 99

- 7

- 8 (July 14, 1999), Order 85

- 3

- 79 (March 28, 1985), and Order 82

- 2

- 130 (February 26, 1982). These and other conditions continue to apply under the exemption to all IATA fares, including Flex Fares

. 18 Under our broad exemption language , those exceptions had not been filed.9

Implementation

The structure and details of the expanded, blanket exemption from condition #2 are set forth in Appendix A and Appendix B to this order. In essence, the procedures implementing the expedited filing and implementation regime being established by this exemption are consistent with the procedures and requirements already in place for exempted agreements of the passenger and cargo services conferences
, and the procedures, requirements and conditions also in place for Flex F are and other exempted agreements of the passenger and cargo tariff conferences. The Director, Office of International Aviation, under assigned authority, will exercise the initial discretion to interpret the conditions of the exemption should clarification be needed. 19

Pursuant to authority duly delegated under the Department’s regulations, 49 CFR 1.54(b )(1) and 14 CFR 385.13:

We find that granting the exemption from condition #2 requested by the International Air Transport Association in this docket, subject to the understandings and conditions described in the body of this order and set forth in Appen dix A and Appendix B to th is order, is in the public interest.

ACCORDINGLY,

1. W e exempt the International Air Transport Association and its member carriers from Condition #2 imposed upon IATA’s Provisions for the Conduct of the IATA Traffic Conferences, A greement 1175, as amended by Order 68

- 7

- 55, to the extent that IATA need not file agreements adopted by any Traffic Conference
, within the scope of Section A of Appendix A hereto
, with the Department for its review and approval prior to a declaration of ef fectiveness by IATA, provided that the terms and conditions of A ppendices A and B hereto are observed;

2. T his exemption may be revoked in whole or in part at any time, and

3. This Order will be served on the International Air Transport Association.

Persons e ntitled to petition the Department for review of this order, under 14 CFR 385.30, may file petitions within seven days after the date of service of this order.

This order shall become effective and become the action of the Department of Transportation upo n expiration of the above period, unless within such period a petition for

19 49 CFR 1.54(b)(1) and 14 CFR 385.13.10

review is filed or the Assistant Secretary for Aviation and International Affairs gives notice that she will review this order on her own motion.

By:

Paul L. Gretch Director, Office of International Aviation

An electronic version of this document is available on the World Wide Web at http:/dms.dot.gov//reports/reports_aviation.aspAppendix A

Blanket Exemption from Condition #2

Terms and conditions

Tier 1 Agreements

A. E xcept as provided in sections B and C below, IATA shall file each resolution, recommended practice or other agreement reached by any traffic conference after the date of service of this order in a master public docket specified as Docket OST

- 201 2

- 0058 , “Not ice of IATA Traffic Conference Actions Tentatively Exempted from Filing for Approval” subject to the following procedures and conditions:

1. Each such resolution, recommended practice or other agreement shall be filed in the master docket at least thirty (30 ) days in advance of the date on which IATA seeks to declare the agreement effective; 1

2. Such agreements shall include the IATA minutes and/or meeting reports associated with their adoption, including records of any further actions taken with respect to

suc h agreements; 2

3. Each resolution, recommended practice or other agreement filed in the master docket shall be clearly identified either as one that has already been exempted from Condition #2 by previous Department action, or one that has not;
4. Agreements p revio usly e xempted shall identify the docket and order number s granting their exemption;
5. Resolutions and recommended practices previously exempted that have been combined with others or changed significantly in terms of subject matter shall be assigned ne w identification numbers and accompanied by information sufficient for the Department to determine whether they continue to fall within the previous exemption; 3

6. Each such resolution, recommended practice or other agreement may be declared by IATA to be ef fective according to IATA procedures for implementation by its members not less than 30 days from the date of filing, provided that effectiveness

1 IATA shall simultaneously send electronic notifications of such filings to John.Kiser@dot.gov and Della.Davis@dot.gov

. 2 IATA will file with the Departm ent the same complete package of text amendments, revalidations or other changes to agreements, as well as minutes of meetings, that are sent to the carrier members of IATA.
3 Significant changes would include the extension of the agreements to other IATA conference areas or other markets, as well as the inclusion of other fares, rates or subject matter.shall not be declared if the Department notifies IATA by electronic means on or before the 30 th day after fili ng that either : (1) The Department requires up to sixty (60) additional days to review such resolution, recommended practice or other agreement, in which case IATA shall defer declaration of effectiveness for the additional days requested by the Department, or (2) The Department, within the initial 30

- day filing period, or such additional period the Department has requested, requires such resolution, recommended practice or other agreement to be filed in a public docket for review and appropriate action, in which c ase IATA shall not declare such resolution, recommended practice or other agreement effective for implementation by its members until appropriate action is taken by the Department

. 4

7. Resolutions, recommended practices or other agreements previously exempt ed shall retain any antitrust immunity previously granted, subject to conditions imposed, until they are amended, revalidated or otherwise modified and declared effective

. A ny such changed resolutions, recommended practices or other agreements shall be

s o identified in the master docket; and
8. All resolutions, recommended practices and other agreements filed in accordance with this s ection and permitted to be declared effective by IATA remain subject to conditions previously imposed by the Department.

Tier 2 Agreements

B. IATA shall file all resolutions, recommended practices, and other agreements in the specific subject areas listed in Appendix B for review and appropriate action by the Department , before declarations of effectiveness by IATA and implementati on by
carriers . This category of agreements include s all amendments or modifications to such resolutions, recommended practices, and other agreements, and all new agreements addressing substantially similar subjects.

As noted in the order, the Department reserves the right to modify the list in Appendix B from time to time, by adding, subtracting or refining the subject areas, through issuance of an advance notice in the master docket. It may also, through such notice, interpret and clarify the scope and meaning of the list . As is the case now with service conference agreements granted an exemption from condition #2, the Director, Office of

4 IATA shall send notifications of such re

- filings to John.Kiser@dot.gov and Della.Davis@dot.gov

.International Aviation, has the initial authority to act on these matters, subject to staff action review procedure s.

Tier 3 Agreements

C. Tier three agreements, those for which IATA seeks approval , or approval and antitrust immunity, will continue to be governed by 49 U.S.C. 41308 and 41309, 14 CFR Part 303, and the Department’s conditions on the IATA by

- laws.

Fees

D. Tier 1 agreements shall incur no filing fees. Tier 2 and 3 agreements , including those previously filed in Tier 1 that the Department subsequently requires IATA to file for
review and appropriate action, shall incur filing fees under 14 CFR Part 389.Appendi x B

Tier 2 Agreements

1. Flex Fare s to or from the United States or its T erritories (Resolution 111 series)

.

2. Air Waybill

– Conditions of C ontract (Resolution 600b).

3. Carriage C oncluded and E videnced by E lectronic M eans
– Conditions of C ontract (Resolution 60 0i).

4. Acceptance and C arriage of P assengers R equiring S pecial A ssistance (Resolution 700).

5. Carriage of Passenger s with Reduced Mobility and Escorts Requirement (Recommended Practice 170 0 b).

6. Seat Assignment for Passengers With Reduced Mobility and for Esc orts (Recommended Practice 1700 c).

7. Passengers with Reduced Mobility Group Travel (Recommended Practice 170 0 d).

8. Publication in Airline Guides of Rates and Conditions Relating To Travel of Passengers with Reduced Mobility (Recommended Practice 170 0 e).

9. Pas senger Assistance List (PAL) and Change Assistance List (CAL) (Recommended Practice 1708a)

10. Ticket N otices (Resolution 724).

11. Acceptance of Power D riven Wheelchairs or Other Battery Powered Mobility Aids as Checked Baggage (Resolution 745b)

12. Conditions of C arriage for C argo (Recommended Practice 1601)
, if applicable to or from the United States or its territories

.

13. Cargo S ecurity (Recommended Practice 1630).

14. Carriage of C argo using E lectronic D ata I nterchange (Recommended Practice 1670).

15. General C ondition s of C arriage ( P assenger and B aggage) (Recommended Practice 1724).

16. Carriage of Carry

- on Baggage (Recommended Practice 1749)

17. Denied Boarding Compensation (Recommended Practice 1799).