INITIAL REGULATORY FLEXIBILITY ANALYSIS

FOR

PROPOSED CONSUMER RULEMAKING 

REGARDING

TRANSPARENCY OF AIRLINE ANCILLARY FEES 

AND OTHER CONSUMER PROTECTION ISSUES

April 16, 2014 

Prepared by

HDR

For

The United States Department of Transportation
HDR|DECISION ECONOMICS i

TABLE OF CONTENTS

Acronyms and Abbreviations............................................................................................................ ii

Executive summary...........................................................................................................................1

1. Introduction ..............................................................................................................2

2. Reason for Agency Action.........................................................................................2

3. Proposed Regulation.................................................................................................4

4. Types and Numbers of Affected Small Entities.........................................................6

5. Impacts on Small Entities..........................................................................................8

6. Reporting and Recordkeeping ................................................................................11

7. Alternatives Considered and Steps Undertaken to Minimize Impact on 

Small Businesses.....................................................................................................12
HDR|DECISION ECONOMICS ii

ACRONYMS AND ABBREVIATIONS

ANPRM – Advance Notice of Proposed Rulemaking

BLS – Bureau of Labor Statistics

BTS – Bureau of Transportation Statistics

CPI – Consumer Price Index

FAA – Federal Aviation Administration

NPRM – Notice of Proposed Rulemaking

NPV – Net Present Value

OMB – Office of Management and Budget

OTA – Online Travel Agent

RIA – Regulatory Impact Analysis

TMC – Travel Management Company
Initial Regulatory Flexibility Analysis For Proposed Consumer Rulemaking 

Regarding Transparency of Airline Ancillary Fees and other Consumer Protection Issues March 2013

HDR|DECISION ECONOMICS 1

EXECUTIVE SUMMARY

This document presents the Initial Regulatory Flexibility Analysis to accompany the US 

Department of Transportation’s (the Department) Notice of Proposed Rulemaking (NPRM) to 

enhance airline passenger protections in relation to: the display of airline-imposed ancillary 

service fees; customer service plans for ticket agents; code-share disclosure; and expanding the 

pool of carriers that report information to the Department, and the information they report. As 

directed by the Regulatory Flexibility Act of 1980, as amended by the Small Business Regulatory 

Enforcement Fairness Act of 1996 (SBREFA), as well as Executive Order 13272, the Department 

is required to consider the potential impact of its regulations on small entities, including small 

businesses, small nonprofit organizations and small governmental jurisdictions. 

The Department has explicit authority to protect consumers from unfair or deceptive practices 

and to ensure safe and adequate service in air transportation. The Department has published 

Final Rule in both 2009 and 2011 aimed at enhancing airline passenger protections. The 2009 

and 2011 Rules were met with strong positive consumer response and have been followed by 

significant improvements in some measures of airline performance (such as notable decreases 

in lengthy on-tarmac delays). 

Yet the Department continues to receive significant numbers of complaints regarding 

transparency of air ticket price, fee and information, and indications of complaints regarding 

travel agencies related to the sale of air travel. In addition, the United States Government 

Accountability Office (GAO) has issued two reports which make recommendations regarding 

the need for greater price and fee transparency for air travel purchases. 1

The DOT believes that regulation is warranted to ensure fair advertising and communication of 

critical information to air travel consumers as well as minimum customer service standards 

such that consumers are protected from unfair treatment. 

This Rule will impact small carriers. For regulatory evaluations, small carriers are those that 

operate service with planes with 60 or fewer seats.2 

Provisions 3 and 4 are estimated to impact three small carriers and cost $0.9 million in the first 

year and $1.9 million over ten years (discounted at 7%). Provision 2 is estimated to impact 

approximately 87 carriers at a cost of $3.2 million during the first year and $23.8 million over a 

ten year period (discounted at 7%). The total estimated impact is thus $5.1 million in the first 

year and $24.7 million over ten years.

 

1

Airline Passenger Protections: More Data and Analysis Needed to Understand Effects of Flight Delays, Sept 2011 

and Consumers Could Benefit from Better Information about Airline-Imposed Fees and Refundability of 

Government-Imposed Taxes and Fees, 2010.

2

 See 14 CFR Chapter 11. Note that the Small Business Administration definition of small carriers is not used.
Initial Regulatory Flexibility Analysis For Proposed Consumer Rulemaking 

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1. Introduction

This document presents the Initial Regulatory Flexibility Analysis to accompany the US 

Department of Transportation’s (the Department) Notice of Proposed Rulemaking (NPRM) to 

enhance airline passenger protections in relation to: the display of airline-imposed ancillary 

service fees; customer service plans for ticket agents; code-share disclosure; and expanding the 

pool of carriers that report information to the Department, and the information they report. 

The Regulatory Flexibility Act of 1980, as amended, requires Federal agencies to conduct a 

separate analysis of the economic impact of rules on small entities. The Regulatory Flexibility 

Act requires that Federal Agencies take small entity’s particular concerns into account when 

developing, writing, publicizing, promulgating, and enforcing regulations. To this end, the Act 

requires that agencies detail how they have met these concerns, by including an (Initial and 

later a Final) Regulatory Flexibility Analysis (RFA). The Initial RFA must include:

1. A succinct statement of the need for, and objectives of, the rule.

2. A description and an estimate of the number of small entities to which the rule will 

apply (or an explanation of why no such estimate is available).

3. A description of the compliance requirements of the rule and their costs.

4. A description of the steps the agency has taken to minimize the significant adverse 

economic impact on small entities.

2. Reason for Agency Action

The Department has explicit authority to protect consumers from unfair or deceptive practices 

and to ensure safe and adequate service in air transportation. The Final Rules published in 2009 

and 2011 aimed at enhancing airline passenger protections were designed to ensure minimum 

levels of consumer comfort and customer service, and more transparent information flow 

between consumers and air carriers. The Department undertook these rulemakings in response 

to a history of persistent flight delays, significant on-board delays, increasing customer 

complaints, and a report by the DOT Inspector General in 2000 which concluded that carriers 

had not done enough to ensure minimum passenger care. The 2009 and 2011 Rules were met 

with strong positive consumer response and have been followed by significant improvements in 

some measures of airline performance (such as notable decreases in lengthy on-tarmac delays). 

Yet the Department continues to receive significant numbers of complaints regarding 

transparency of air ticket price, fee and information, and indications of complaints regarding 

travel agencies related to the sale of air travel. 

In addition, the United States Government Accountability Office (GAO) has issued two reports 

which make recommendations regarding the need for greater price and fee transparency for air 

travel purchases. In September 2011, the GAO issued a report, Airline Passenger Protections: 

More Data and Analysis Needed to Understand Effects of Flight Delays, which recommended 

that DOT “collect and publicize more comprehensive on-time performance data” and suggested 

requirements similar to two of the provisions of this Rule (“requiring airlines with a smaller 
Initial Regulatory Flexibility Analysis For Proposed Consumer Rulemaking 

Regarding Transparency of Airline Ancillary Fees and other Consumer Protection Issues March 2013

HDR|DECISION ECONOMICS 3

percentage of the total domestic scheduled passenger service revenue, or airlines that operate 

flights for other airlines, to report flight performance information.”)

The GAO’s July 2010 report, Consumers Could Benefit from Better Information about AirlineImposed Fees and Refundability of Government-Imposed Taxes and Fees, included 

recommendations that DOT gather greater information on carrier fees, issue additional 

requirements to gather greater information on carrier fees, and ensure that the disclosure of 

baggage and other optional fees and that such information “be consistently disclosed across all 

distribution channels used by the airline.” This recommendation is very similar to provision 6 of 

this proposed Rule.

The DOT believes that regulation is warranted to ensure fair advertising and communication of 

critical information to air travel consumers as well as minimum customer service standards 

such that consumers are protected from unfair treatment. 

A Balanced Approach to Air Travel Information Transparency 

If the market for airline services met textbook definitions of “perfect competition” and “perfect 

rationality,” consumers would bring about “welfare-maximizing” outcomes through their role in 

the automatic dynamics of demand and supply. Product attributes such as customer service 

and airline transparency about prices and conditions of supply would satisfy consumer 

expectations without the need for government regulatory intervention. 

The ability to access full information related to a transaction, whether or not each consumer 

actually does access and use that information, is a pre-requisite of “perfect competition.”

Yet, the volume of passenger complaints regarding certain attributes of customer service and 

product transparency convinces the Department that the market is not, at present, delivering 

welfare-maximizing outcomes. But it is not certain whether this is the result of imperfect 

competition (such monopoly or oligopolistic behavior) or imperfect rationality (i.e. just 

businesses making ‘bad’ or not smart choices). The difference between the two is not trivial and 

helps dictate the degree to which government intervention is warranted. If monopolistic 

behavior of the airlines (or GDSs) were the main reason behind the consumer issues examined 

here, a strong or ‘aggressive’ regulatory response would be justified. On the other hand, if 

airlines or GDSs are simply behaving, as consumers often do, with a degree of myopia, shortsightedness or other such “heuristics” of real-life, then the preferred approach would be one 

that seeks the basic consumer protections through minimal government intervention, allowing 

the forces of the marketplace to work to greater market efficiency. 

The Department reached out extensively to air travel stakeholders, including individual carriers, 

airline trade associations, and consumer groups. Considerable comment and significant 

disagreements were voiced on provision 2, regarding the display of ancillary service fee 

information. Some stakeholders presented the department with the argument that 

monopolistic practices (such as price shrouding and obfuscation) explain the absence of full 

disclosure and transactabilty of ancillary service fees on GDSs and OTAs. Other evidence 

suggests that airlines are exhibiting a form of behavior known as myopia, in which they focus on 
Initial Regulatory Flexibility Analysis For Proposed Consumer Rulemaking 

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the short-run benefits (greater control of access to customers, or decreased fees to GDSs) to 

their long-term detriment (greater overall consumer satisfaction and demand). 

The airline industry is concentrated among a small number of firms, which itself might create 

the conditions for monopolistic behavior. On the other hand, the federal government 

deregulated the airline industry in 1978 on the grounds that, while the industry is indeed 

concentrated, the market for air travel is sufficiently “contestable” to sustain competitive 

outcomes. The Department of Justice is examining this issue further.

The poor market outcomes being witnessed today in terms of product transparency and 

transactability are at the partially the result of what Behavioral Economists call rationalitylimiting heuristics – essentially decision-making short cuts that are based on previous 

experience, not on a rational examination of all possibilities – though they could also be the 

product of more anti-competitive behavior. Research conducted for this analysis was 

inconclusive regarding the degree to which observed industry behavior is only a result of 

myopia; or delayed contesting actions by some carriers; or of a fundamental problem with 

current industry structure. Therefore, it is recommended that the Department adopt an 

incremental approach, one that will hopefully ‘nudge’ carriers, GDSs and travel agents into 

developing a private industry-based solution. 

3. Proposed Regulation

In this rulemaking, the Department is considering further enhancing the protections afforded to 

passengers in several areas:

1. Clarify and incorporate into regulation the definition of a “ticket agent” under USDOT 

regulations; 

2. Require that carriers provide the necessary information regarding their basic ancillary 

service fees to either:

o All ticket agents to whom they provide flight purchase information so that the 

ticket agents can display those ancillary service fees; or

o All ticket agents to whom they provide flight purchase information and that sell 

air transportation (provision of information to GDSs not required)

3. Expand the pool of carriers that report on-time performance, mishandled baggage, 

denied boarding and oversales data to the Department (often called “reporting 

carriers”) from carriers which account for at least 1.0% of domestic scheduled 

passenger revenues (as currently required) to those carriers which account for at least 

0.5% of domestic scheduled passenger revenues;

4. Expand reporting requirements for reporting carriers to include that the carriers file an 

additional set of reports that includes their domestic code-share partners’ on-time 

performance, mishandled baggage, denied boarding and oversales data;

5. Set minimum customer service standards for ticket agents (similar to those required of 

carriers);
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6. Ensure the disclosure of code-share segments in all marketing carriers’ schedules, 

advertisements and communications with consumers; 

7. Additional display requirements for ticket agents to disclose to consumers all carriers 

marketed (for which the Department is only seeking comments and not proposing rule 

text):

8. Prohibit undisclosed display bias by ticket agents; and

9. Prohibit post-purchase price increase of baggage fees in connection with the broader 

prohibition on post-purchase price increases.

In the Regulatory Impact Evaluation prepared to accompany the Proposed Rule, the 

Department considered adopting, or not adopting, each component individually, as well as 

three alternative scenarios to specific provisions which were considered but not proposed. 

These provisions, plus the three alternative scenarios are summarized in the table below.

Table 1: Proposed Provisions and Alternatives

Provision Requirement Description

1 Definition of Ticket Agent

2

Carriers provide basic ancillary service fee information to ticket agents: either to all 

ticket agents to which it provides its fare information, including GDSs, or all ticket agents 

to which it provides its fare information, if the ticket agent sells to consumers

Alt C Carriers provide ancillary service fee information to ticket agencies and GDSs, so that 

consumers can purchase ancillary services from ticket agencies/GDSs

3

Expand the definition of a “reporting carrier” to one which accounts for at least 0.5 

percent of domestic scheduled passenger revenues (the current requirement stipulates 

only carriers with at least 1.0 percent of domestic scheduled passenger revenues)

4

Expand reporting requirements for reporting carriers to include an additional, combined 

set of reports for both the carrier’s own flights and its code-share partners flights’ on-time 

performance, mishandled baggage, and denied boarding and oversales

Alt A Expand the definition of a “reporting carrier” to include all those which account for at 

least 0.25 percent of domestic scheduled passenger revenues.

Alt B Expand reporting requirements for reporting carriers to include an additional, separate set 

of reports which contains data only for carriers’ code-share flights 

5 Minimum customer service standards for ticket agents

6

Disclosure of code-share segments in schedules, advertisements and communications 

with consumers

7 Disclosure of carriers marketed by ticket agents

8 Prohibition on undisclosed biasing

9 Prohibition of post-purchase price increase for ancillary service fees 
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4. Types and Numbers of Affected Small Entities

This Rule will impact small carriers. The Department defines small carriers based on the 

standard published in 14 CFR 399.73: ‘‘For the purposes of the Department’s implementation of 

chapter 6 of title 5, United State Code (Regulatory Flexibility Act), a direct air carrier or foreign 

air carrier is a small business if it provides air transportation only with small aircraft as defined 

in § 298.3 of this chapter (up to 60 seats/18,000 pound payload capacity).’’ 3

Small travel agencies and tour operators are explicitly excluded from the provisions that might 

otherwise impact them.

Several provisions of this Proposed Rule apply only to “reporting carriers,” so called because of 

specific requirements to report additional information to the US Department of Transportation. 

Reporting carriers must report information to BTS monthly on lengthy tarmac delays, on-time 

performance, and baggage handling, and or quarterly for denied boarding and oversales and 

incidents relating to transport of animals. Currently, reporting carriers are those carriers with 

at least 1% of domestic scheduled passenger service revenues. As the airline industry has 

undergone consolidation in recent years, the number of reporting carriers in the U.S. has 

decreased from 16 carriers in 2011 to 13 carriers in 2012 (Table 2). In the past two years,

United has acquired Continental, ExpressJet has acquired Atlantic Southeast, and Southwest 

has acquired AirTran. Among the current 13 reporting carriers, six are mainline carriers (Alaska, 

American, Delta, Hawaiian, United, and US Airways), four are low-cost model major airlines 

(Frontier, JetBlue, Southwest, and Virgin America), and three are regional carriers (American 

Eagle, ExpressJet, and SkyWest).

 

3

 See 14 CFR Chapter 11. Note that the Small Business Administration definition of small carriers is not used.
Initial Regulatory Flexibility Analysis For Proposed Consumer Rulemaking 

Regarding Transparency of Airline Ancillary Fees and other Consumer Protection Issues March 2013

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Table 2: Reporting Carriers: Domestic Passenger Carriers (At Least 1.0% Of Domestic 

Scheduled Passenger Revenues), 2012

2012 Reporting Air Carriers:

1 Alaska

2 American

3 American Eagle

4 Delta

5 Frontier

6 Hawaiian

7 Jet Blue

8 Sky West

9 Southwest /AirTran*

10 United/Continental*

11 US Airways

12 Express Jet/ Atlantic Southeast*

13 Virgin America

Notes; U.S. air carriers that have at least one percent of total domestic scheduled-service passenger revenues. 

* indicates Airlines that were merged. Comair was a reporting carrier in 2011, but no longer is one in 2012.

Source: US DOT

The reporting carriers represent a substantial portion of the entire market in the U.S. While 

reporting carriers only reflect approximately a fifth of carriers with scheduled passenger service 

in the U.S., they account for nearly 60% of all departures and more than 80% of all 

enplanements (see Table 3). 

Table 3: Scheduled Passenger Service on U.S. Carriers (domestics and international), 2010

Carriers Departures Enplanements Avg.

Enplanements

Number per Departure

Percent 

of Total Number 

Percent 

of Total Number 

Percent 

of Total

Reporting 

Carriers 13 22% 6,032,139 59% 604,351,061 82% 100

Other U.S. 

Carriers 46 78% 4,153,659 41% 130,830,733 18% 31

Total 59 10,185,798 735,181,794 72

Source: Air Carriers: T-100 Segment (US Carriers Only), 2010, RITA, TranStats
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These figures also indicate that a substantial minority of carriers (78%), departures (41%) and 

enplanements (18%) relate to carriers which do not report much of the additional statistics to 

BTS which allow the government and consumers to better understand carrier performance.

Provision 3 would expand the definition of a reporting carrier to those with at least 0.5% of 

domestic passenger service revenues. This would require some small carriers (as per the 

definition used for regulatory analyses) to begin collection and reporting additional data to BTS, 

to post additional information on their website, and other requirements to which they were 

previously not subject. Provision 4, expands the reporting requirements for all reporting 

carriers (under old and new definition), which also impacts some small carriers. Table 4 lists 

those carriers which would newly become ‘reporting carriers’ under the proposed rule, as well 

as the carriers which would become ‘reporting carriers’ under an alternative scenario which

was not adopted.

Table 4: Additional Small Airlines If Extend the “Reporting Pool”

Airline Name

Minimum Passenger 

Seats per Departure

Additional Carriers (under 0.5% threshold)

AIR WISCONSIN 50

HORIZON 70

MESA 37

PINNACLE 49

Additional Carriers (under 0.25% threshold)

COLGAN 34

MESABA 34

PSA 50

Source: BTS, T-100 Segment data, calculated by HDR study team, 2011.

Several of the provisions differentiate between marketing and non-marketing carriers and/or 

their code-share partners. In 2010, there were 59 U.S. carriers provided scheduled passenger 

and cargo services within, to and from the U.S. Approximately half of those carriers sell tickets 

directly to the public and are thus considered ‘marketing carriers.’ Carriers that do not sell 

tickets directly to the public operate their flights under code-share agreements with other

marketing carriers and are listed on the contracting carriers’ schedules. For example, among 

the 13 reporting carriers, three carriers do not sell tickets to the public and operate flights for 

their code-share partners: American Eagle operates flights for Alaska, American and Delta; Sky 

West operates flights for Airtran, Alaska, Delta, United and U.S. Air; ExpressJet operates flights 

for United and U.S. Air and Delta. A few small regional carriers, such as Mesa and Great Lakes,

operate both under contract and independently-marketed flights. 

5. Impacts on Small Entities

Provision 1 is a codification and clarification of an accepted use of the term ticket agent, and as 

such is not expected to have any impact on any small carriers or ticket agents.
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Provision 2 would require that carriers provide information on their ancillary service fees to 

ticket agents. This provision is expected to cost an average of approximately $36,000 per 

carrier, a figure which was originally estimated for large carriers. Since this provision will apply 

to all carriers that market tickets in US, small carriers would be impacted.

For this analysis, the number of impacted small carriers is estimated using previous calculations 

of the share of total number carriers which are classified as small carriers. According to analysis 

prepared for the Enhancing Airline Passengers Protections (EAPP) II, approximately 52% of U.S. 

carriers’ fleets only contained aircrafts with less than 60 seats in 2009.4 Assuming that 52% of 

the current estimated number of carriers that would be impacted are small carriers (87 

carriers), the estimated costs to those small carriers would total $3.2 million for the first year 

and $23.8 million over a 10-year period (discounted at 7 percent).

Table 5: Estimated Costs for Small Entities to Provide Ancillary Service Fee Information to Ticket 

Agents

Small Entities 2013-2022 2013

Number of Impacted Carriers 167 167

% of carriers are small carriers 52% 52%

Estimated number of small carriers impacted by provision 87 87

Annual labor hours to provide information to ticket agents 8.00 8

Hourly Labor Cost for Reporting $90.10 $97.97

Annual cost each airline needs to pay to ATPCO to transmit 

ancillary service fees to GDS $36,000 $36,000

Total Component Costs (millions)

Total Component Undiscounted Costs (millions) $31.7 $3.2

Total Component Discounted Costs (millions) (7%) $23.8 $3.2

Under the proposed Provisions 3 and 4, the total estimated costs to small carriers would be 

$0.9 million for the first year and $1.9 million for a 10-year period (discounted at 7 percent) if 

the reporting carrier threshold is 0.5% of domestic scheduled passenger service revenues. The 

costs to small carriers would be up to $1.4 million for the first year and $3.9 million for the 10-

year study period (discounted at 7 percent) if the threshold were to be changed to 0.25% of 

domestic scheduled passenger service revenues, an alternative considered by the Department 

but not adopted.

If Provision 4 requires marketing and code-share data to be reported in a combined format, 

there would be no extra cost for those new impacted reporting carriers as they don’t market

their code-share partners’ tickets.

 

4 U.S. DOT, Consumer Rulemaking: Enhancing Airline Passenger Protections II, 2011
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Regarding Transparency of Airline Ancillary Fees and other Consumer Protection Issues March 2013

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Table 6: Estimated Costs for Small Entities if Extending the Reporting Threshold to 0.5%

Small Entities (0.5% reporting threshold) 2013-2022 2013

Newly added carriers that has plane less than 60 seats (0.5% 

threshold) 3 3

Set-up costs (large carriers only) $100,762.91 $100,762.91 

Hourly Labor Cost for Reporting $96.87 $90.10 

Annual Hours for Form 234 On-time Performance per Carrier 538 480

Annual Hours for Form 251 On-time Performance per 

Oversales per Carrier 16 16

Cost of Posting Delay Information on Line $419,394.32 $419,394.32

Number of New Reporting Carriers that market their own 

tickets 1 1

Total Component Costs (millions)

Total Component Undiscounted Costs (millions) $2.3 $0.9

Total Component Discounted Costs (millions) (7%) $1.9 $0.9

Table 7: Estimated Costs for Small Entities if Extending the Reporting Threshold to 0.25% (Alternative 

Provision 3)

Small Entities (0.25% reporting threshold) 2013-2022 2013

Newly added carriers that has plane less than 60 seats (0.25% 

threshold) 7 7

Set-up costs (large carriers only) $100,762.91 $100,762.91 

Hourly Labor Cost for Reporting $96.87 $90.10 

Annual Hours for Form 234 On-time Performance per Carrier 538 480

Annual Hours for Form 251 On-time Performance per 

Oversales per Carrier 16 16

Cost of Posting Delay Information on Line $419,394.32 $419,394.32

Number of Newly Reporting Carriers that market their own 

tickets 2 2

Total Component Costs (millions)

Total Component Undiscounted Costs (millions) $4.9 $1.4

Total Component Discounted Costs (millions) (7%) $3.9 $1.4

Provision 5 applies only to travel agents or tour operators with annual revenues of more than 

$100 million, which explicitly excludes small entities.

Provision 6 is already in enforcement, and thus should require no new compliance efforts by 

small carriers.

Provision 7 is only seeking comments, and therefore no costs are estimated.

Provision 8 applies to the display of airfare information by ticket agents. The cost of this provision 

is not estimated in this RIA.
Initial Regulatory Flexibility Analysis For Proposed Consumer Rulemaking 

Regarding Transparency of Airline Ancillary Fees and other Consumer Protection Issues March 2013

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Provision 9 prohibits post-purchase in increases in ancillary service fees applies to the display of 

airfare information by ticket agents. The cost of this provision is not estimated in this RIA. As the 

Department is proposing to codify existing guidance, all carriers are supposed to be complying 

with the substance of the requirement already and there should be no additional costs or 

benefits from this provision

Table 8: Total Estimated Costs for Small Entities Under All Provisions

Provision

Discounted Costs (millions) 

(7% discount rate)

2013-2022 2013

Provision 1 n/a n/a

Provision 2 $23.8 $3.2

Provisions 3 and 4 $1.9 $0.9 

Provision 5 n/a n/a

Provision 6 n/a n/a

Provision 7 n/a n/a

Provision 8 n/a n/a

Provision 9 n/a n/a

TOTAL $25.7 $4.1

6. Reporting and Recordkeeping

Provision 3 of this Rule would require small carriers to report information to BTS monthly on 

lengthy tarmac delays, on-time performance, and baggage handling, and or quarterly for denied 

boarding and oversales and incidents relating to transport of animals. 

Provision 4 of this Rule would require small carriers to provide additional data for the codeshare partners as well as for themselves as part of the regular monthly and quarterly reporting 

to BTS. 

Provision 5 of this Rule, which would require large travel agents to adopt minimum customer 

service standards, does not to apply to small ticket agents.
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7. Alternatives Considered and Steps Undertaken to Minimize 

Impact on Small Businesses

The Department has taken several steps to minimize the impact on potentially affected small 

entities:

 For Provisions 3 and 4, the Department considered but did not adopt an alternative 

scenario in which 0.25% of domestic scheduled passenger service revenues.

 For Provision 5, which requires customer service standards for ticket agents, the 

Department explicitly excludes small ticket agents but specifying that the requirement 

applies only to ticket agents with revenues of over $100 million annually.

DOT believes that potential costs to small carriers are not significant, and notes that most 

passengers fly with large carriers. DOT considered several alternatives to exempt small carriers 

from the Rule. One alternative covered only carriers that operate service with at least one 

aircraft of 60 or more seats, and thus, no small carriers. Another alternative which considered 

and then incorporated into the proposed rule, required customer services standards only for 

large travel agencies.