[Federal Register Volume 62, Number 189 (Tuesday, September 30, 1997)]
[Notices]
[Page 51175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25903]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary


Foreign Air Carriers; Unfair and Deceptive Advertising; 
Enforcement Policy

AGENCY: Office of the Secretary (DOT).

ACTION: Notice.

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SUMMARY: The Department's Office of Aviation Enforcement and 
Proceedings issues this notice to clarify its enforcement policy with 
regard to the advertising of service to or from the U.S. by foreign 
carriers. The notice advises foreign carriers that advertising service 
for which they lack the requisite economic authority from the 
Department violates the authority provisions of 49 U.S.C. Sec. 41301 
and is an unfair and deceptive practice under 49 U.S.C. Sec. 41712 that 
may warrant enforcement action, even if the carrier has an application 
for such authority pending before the Department.

FOR FURTHER INFORMATION CONTACT: Nicholas Lowry, Office of Aviation 
Enforcement and Proceedings, U.S. Department of Transportation, 400 7th 
St. SW., Washington, DC 20590. Tel. No. (202) 366-9349.

United States of America, Department of Transportation, Office of the 
Secretary, Washington, D.C.

Advertising of Scheduled Service in Foreign Air Transportation--Use of 
the Notation ``Subject to Government Approval''

Notice
    During a recent investigation, it came to the attention of the 
Office of Aviation Enforcement and Proceedings (AEP) that some foreign 
air carriers may be holding out service from the U.S. to foreign points 
for which they lack U.S. economic authority under 49 U.S.C. Sec. 41301. 
The issue arose in connection with listings by a foreign carrier on the 
internet and in the Official Airline Guide (OAG) which related to 
service that was the subject of its application for authority. The 
application was pending at the time the advertisements appeared. The 
carrier included with the listings in question a statement that the 
service was ``subject to government approval,'' to indicate that the 
service was contingent on receiving Department approval and might not 
be provided. It also stated to AEP that it accepted no reservations for 
the service in the U.S. We asked the carrier to remove the listings in 
question and it agreed. Since similar practices may be widespread, we 
believe it appropriate to disseminate AEP's policy on matters of this 
kind to all foreign carriers operating or planning to operate from the 
U.S.
    AEP has in the past applied and will continue to apply the same 
standards to the advertisement of proposed service by foreign carriers 
as it currently applies under Department regulations to U.S. applicants 
for certificate authority. Section 201.5 of the Department's rules (14 
CFR 201.5) provides that U.S. applicants for certificate authority may 
not ``advertise, list schedules or accept reservations'' or ``accept 
payment or issue tickets'' for their proposed service until the 
relevant application has been approved by the Department. <SUP>1</SUP> 
Although section 201.5 is specifically limited to U.S. applicants for 
air carrier authority, we will continue our practice of following a 
consistent policy in evaluating the advertisements and schedule 
listings of foreign air carriers. We will therefore consider it an 
unfair and deceptive practice and an unfair method of competition 
within the meaning of 49 U.S.C. Sec. 41712, as well as a violation of 
the authority provisions of 49 U.S.C. Sec. 41301, for a foreign air 
carrier to hold out service in the U.S. for which it does not have all 
requisite authorizations from the Department at the time of the holding 
out.
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    \1\ Section 201.5 further prohibits issuance of tickets or 
acceptance of payment for a carrier's proposed service until its 
authority has become effective or the Department specifically 
authorizes sales. Under the rule, after Department approval but 
prior to receipt of effective authority, a carrier may advertise, 
take reservations and publish schedules (but not accept payment), 
provided such advertising or schedules prominently state the 
following: ``This service is subject to receipt of government 
operating authority.''
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    By the term ``holding out,'' we refer to listing or advertising 
service in any medium reasonably likely to reach the U.S. public, such 
as computer reservations systems (CRSs), the internet, or published 
media, such as the Official Airline Guide. Clearly, if the appropriate 
authority is the subject of an application pending with the Department, 
the service may not be listed or advertised. A note stating that the 
listed service is ``subject to government approval'' where an 
application is pending within the Department is not sufficient to avoid 
a violation of 49 U.S.C. Sec. 41712 and Sec. 41301. Moreover, a 
violation is not avoided by refusing to take reservations or accept 
payment for tickets. On the other hand, a carrier may hold out service 
with a notation that service is ``subject to government approval'' if 
the carrier has the requisite U.S. authority but is awaiting approvals 
from foreign governments only for the service advertised.
    Questions regarding this notice may be addressed to the Office of 
Aviation Enforcement and Proceedings, C-70, 400 7th St., S.W., 
Washington, D.C. 20590. A copy of this notice will be published in the 
Federal Register.

    Dated: September 24, 1997.

    By:

Samuel Podberesky,
Assistant General Counsel for Aviation Enforcement and Proceedings.

    An electronic version of this document is available on the World 
Wide Web at http://www.dot.gov.
[FR Doc. 97-25903 Filed 9-29-97; 8:45 am]
BILLING CODE 4910-62-P