## Animal Incident Reporting Requirements ( 14 CFR Part 235 )

Final Rule to Amend Requirement to Report Incidents Involving Animals



## FINAL REGULATORY IMPACT ANALYSIS

U.S. Department of Transportation

March 20141 Introduction In 2003 and 2005, t he U.S. Department of Transportation (DOT) adopted rules requiring airlines to report on the loss, injury, or death of animals in air transport. These rules implemented requirements of
the Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century (P.L. 106

- 81). DOT implemented these requirements through regulations found in 14 CFR 234.13. These requirements obligate U.S. airlines offering scheduled passenger service to file reports with DOT regarding incidents involving the loss, injury, or death of animals during air transportation. DOT, through the Aviation Consumer Protection Division, publishes these reports monthly and then forwards t hem to the U.S. Department of Agriculture which enforces the Animal Welfare Act.

T h is Final Regulatory Impact Analysis ( F RIA) is in support of the f inal r ule to amend the se r eporting

r equirements

. The original purpose of the A ct was to give consumers inf ormation on the relative safety
of a irline s that transport household pets . The purpose of these amendments is to expand the universe of reportable incidents and reporting carriers and hence provide consumers with more information to make this comparison. Table 1 below shows a comparison matrix between old requirements and new changes.

The primary impact of the final r ule is to expand the number of potential reportable incidents. It does so by including all dogs and cats (including those transported by non

- owners/guardians), and by expanding the number of affected carriers. A lesser impact are the requirements that all covered carriers state in their December reports the total number of animals that were lost, injured, or died during air transport and t he total number of animals transported in the calendar year. The next sections
will describe current baseline information

, then the economic effect of the new requirements

.2 Table 1

– Animal Reporting Rulemaking Matrix (major items)

REPORTING INCIDENTS Previous Requirement New Requirement Impact U.S. air carriers offering scheduled passenger service that account for ≥ 1% of domestic scheduled

- service passenger

revenues submit a report for any month in which they experience any incidents involving loss

, injury, or death of animal. If there are no incidents, they do not report. Expand reporting to all incidents from all U.S. air carriers that operate scheduled passenger service with at least one aircraft with a designed seating capacity of more than 60 se ats, including incidents on flights that are operated with aircraft having 60 or fewer seats. Expands number of reportable incidents by including more
passenger carriers. Current requirements only app ly to carriers with about 90 percent of
passenger reven ues.

Definition of animal is a live warm/cold blooded animal being kept as a pet by a family household in the U.S. Expand to include all cats and dogs transported in the cargo compartment in scheduled passenger air transportation. Expands number of report able incidents by including cats and dogs that are not household pets , e.g., shipped by breeders and handlers.
CALENDAR

- YEAR REPORT Previous Requirement New Requirement Impact
None Require covered carriers to provide in their December report
a summary of the total number of animal losses, injuries and deaths for the year

. Each covered carrier will have to submit a report at the time of the December report even if they had no December incidents (this information may be included in any report that the

car rier may file for the loss, injury, or death of animals during the month of December)

. Slightly expands what carriers must include in the December report. Carriers will simply add up all animals incidents they reported throughout the year.
None Require covered carriers to report the total number of animals transported in the calendar year in the December reports. Expands what carriers must include in the December report

, and carriers will need to tally all animals transported throughout the year.
None R equire covered carriers to file a December report even if the carrier did not have any incidents involving the loss, injury, or death of an animal during that year. Each covered carrier will have to submit a report at the time of the December report even i f the carrier did not experience any incidents involving animals and/or carried no animals during that month or even that year.3 Baseline Number of Animals Transported There are three categories for transporting pets by air. Airlines allow a limited numb er of passengers per flight to transport small pets in the cabin (“unassigned in the cabin”). These animals remain in a
kennel with their passenger for the duration of the flight. Cats, smaller dogs, household birds and other small pets (depends on airlin e) fit this category. Except for service animals used by passengers with disabilities, a irlines tend to prohibit larger animals (usually larger dogs ) from flying in the cabin. Airlines also allow passengers to check their pets as baggage (“accompanied bag gage”) or to ship animals as a “live cargo shipment” in the cargo compartment. Live cargo transport is usually without an accompanying human on the flight. While “live cargo” and “accompanied baggage” can be different areas of the cargo hold of an airplan e, the primary differences between these two categories are shipping procedures and price points.

The World Organization for Animal Health (OIE) 1 reports that all live animals make up less than 0 .1 percent of the value of air cargo. 2 This is not a large trade. G ood data are not immediately available as to the total number of animals that air carriers currently transport. Neither trade associations for animal transportation providers (viz., the International Pet and Animal Transportation Association and the Animal Transportation Association) or for aviation (viz., Airlines for America) collect data on the number of animals transported annually by air.

DOT also contacted trade (e.g. pet transportation firms) and industry (airlines) sources. They est imate the actual number of pets that carriers transport annually at up to 800,000. Pets travelling in the cabin as “unassigned” make up anywhere from a quarter to half of this total. Pets traveling as “accompanied baggage” make up to a quarter of the tot al. Up to half of the total is from unaccompanied live cargo shipments. Up to half of the unaccompanied live cargo shipments are dogs and cats that breeders and handlers transport (e.g.

, to a new owner or to a dog show). Relocation is a primary reason th at owners transport their pets; this is especially so for those who do not travel in the cabin.

Baseline Number of Incidents

For 201 2 , the Aviation Consumer Protection Division reported 56 total incidents , comprising 2 9 deaths,
26 injuries, and one loss . Table 2 below shows the annua l number of incidents since 2008

.

1 This organization, originally known as the Office International des Epizooties, was founded in 1924 and changed its name in 2003 to the World Organization for Animal Health, but kept its original acronym.

2 http://www.oie.int/doc/en_document.php?numrec=38890034 Table 2

– Annual Number of Incidents of Animals from Air Transportation

Year Deaths Injuries Loss Total RPMs (billions) Total Incidents P/RPMs
2008 30 10 3 43 806 .053
2009 23 6 3 32 763 .042
2010 39 13 5 57 792 .072
2011 35 9 2 46 809 .057
2012 29 26 1 56 818 .068
5

- Year Average (rounded) 31 13 3 47 798 .058

Source: Reported incidents from Aviation Consumer Protection Division and RPMs from the Bureau of Transportation Statistics (BTS) for Revenue Passenger

- miles by U.S. Carriers at all airports ( http://www.transtats.bts.gov/Data_Elements.aspx?Data=3 ).

As can be seen, the annual totals vary quite a lot. This variance is not a function of total air travel. For example

, the variability of total incidents per billion Revenue Passenger Miles (RPM) tracks the year

- to

year variations in the number of incidents . Consequently, these incidents are somewhat infrequent and
random. To provide an idea about the number of carrier s affected, in DOT’s monthly Air Travel Consumer Reports between 2008 and 2012

, t he total number of carriers that had incidents in a given

year was nine in 2008

- 2009
, ten in 2010
, and six in 2011

- 2012. Previously , carriers only had to prepare a report for the month of December if they have incidents in that month

.

Survey of Pet Carriage Market OIE reports that only 40 percent of the commercial air fleet has the appropriate environmental controls to carry animals in the hold. 3 In the U nited S tates , not all larger carriers accept animals in the cargo compartment (either as accompanied baggage or as live cargo shipment). Carriers that do not accept animals as cargo do so for their own business reasons. This includes the size of the market and the c ost involved with adequately equipping cargo holds for the transportation of animals.

Animals traveling as cargo on commercial passenger carriers generally do not fly on regional/commuter
aircraft

. As a rule, carriers generally do not accept live animals as cargo on aircraft not equipped with pressurized, temperature

- controlled cargo compartments

. The cargo area of a small regional jet (RJ) or turboprop aircraft might not be a controlled environment. 4 Carriers using smaller aircraft can choose
whether o r not to equip their aircraft with such cargo holds in such a manner . However, trade sources report that most new and larger RJs are adequately equipped. Larger turbo

- props (e.g. Dash

- 8) might be adequately equipped but we could not verify the exten t to w hich this is the cases. If a carrier has a mix
of adequately and inadequately equipped RJs in its fleet, it will probably not transport animals as baggage/cargo on any of the routes served by RJs. For example, this is United’s policy regarding its
Embraer RJ f le et (many which are adequately equipped)

.

3 http://www.oie.int/doc/en_d ocument.php?numrec=3889003

4 http://www.wikihow.com/Minimize

- Risk

- to

- a

- Pet

- in

- the

- Cargo

- Area

- of

- an

- Airplane5 The previous reporting rule required air carriers that have at least one percent of domestic scheduled

service passenger revenues (“1% carriers”) to report animal incidents. T hese carriers have over 90 percent of the domestic market (by Revenue Passenger Miles). United has the best known and possibly largest program known as “ Pet Safe

. ” Table 3 below shows a listing of most reporting carriers and their policy on transporting pets. While not exhaustive, it does serve to demonstrate current business practices. Most of these carriers do not limit themselves to dogs and cats, and either state “pets” generally or list individually covered species of animals

, usually including bir ds but in many cases also including animals such as rabbits and hamsters. As can be seen from Table 3, several carriers (and correspondingly a significant portion of the passenger market) were effectively not subject to the old requirements (and would not be subject to the new requirements) because they only accept pet s in the
cabin and do not take custody of the animal from the passenger

.

Table 3

– Pet Transporting Practice s for Reporting Air Carriers
Carrier Cabin Transport Accompanied Bag gage Live Cargo 2012 Domestic Market Share

(%)
Air Tran √ 2.8 Alaska Air/Horizon √ √ √ 3.9 American √ √ √ 12.9 Delta √ √ (except on 767s) √ (except on 767s) 16.3 Frontier √ √ 1.7 Hawaiian √ (inter

- island and flights leaving the island only) 1.5

Jet Blue √ 5.0 SkyWest √ √ 2.3 Southwest √ 15. 1 United √ √ √ 16.1 US Airways/America
West √ 8.1

Source: www.petfriendlytravel.com/airtravel and individual airline websites . Bureau of T ransportation Statistics (BTS) for
market share based on RPMs ( http://www.transtats.bts.gov/carriers.asp?pn=1 )

Table 3 does not list reporting carriers such as American Eagle

, which is an affiliate of American Airlines

, and Virgin America

, which only allows pets in the cabin . It also does not list carriers such as ExpressJet
Airlines (Delta Connection/United Express) or Mesa 5 (primarily United Express and US Airways Express )
that are code

- sharing partners with major carriers

. Together, these carriers account for roughly six percent of the domestic market. All of these regional carriers (except M esa) exclusively fly regional jets while Mesa flies regional jets and Dash

- 8 turboprops. It is uncertain what prop o rtion of their fleets is adequately equipped to transport pets

. We also could no t verify pet transportation policies from their

5 Mesa voluntarily reports although it is not required to do so.6 websites. Howe ver, industry sources indicate equipage is high and that they can transport pets on many
of the routes that these carriers serve.

Prices for transporting pets vary by airline. An August 26, 2009, article in USA TODAY reported that prices for transporting pets “unassigned” in the cabin as a carry

- on vary between $75 and $2 50 each

way. 6 Prices for transporting as accompanied baggage cabin are generally higher; f or example within
North America

, United charges $250 each way

. 7 Unaccompanied pets travel as live cargo. The main
difference between the latter two is that with live cargo the animal travels through the airline cargo system and they are dropped off and p icked up at the cargo facility. 8 Fees vary based on weight, size,
and destination and are usually much higher than for accompanied baggage

.

There are also “niche” carriers that do not offer scheduled passenger service that are not subject to the reportin g requirements. The s e are Part 135 charter carriers that allow accompanied pets to travel in the cabin (usually non

- kenneled). The fees for these carriers are more than larger carriers charge. Trade sources indicate this is a small, but growing niche ma rket. Trade sources indicate that all

- cargo carriers are not in the business of transporting household pets. For example, websites for large integrated shippers such as U PS , DHL, and FedEx report that they do not ship dogs, cats, or other household pets.
The f inal r ule will not apply to all

- cargo flights.

Effect of Rule Changes and Cost of Compliance

- REPORTING INCIDENTS
The rule expand s reporting requirements to all U.S. air carriers that operate scheduled passenger service
with at least one aircraft w ith a designed seating capacity of more than 60 seats, including flights by
those carriers that are operated with aircraft having 60 or fewer seats. The old requirements applied to
1 5 carriers with over 90 percent of the domestic market. Consequently, th e expansion would theoretically not affect a great deal of new traffic.

The scope of this rule is illuminated by a DOT rule requiring air carriers to report annually to the Department on the number of disability

- related consumer complaints that those ai rlines receive. This is

an Air Carrier Access Act (ACAA) reporting rule. With respect to U.S. air carriers, this disability complaint reporting requirement applies to certificated U.S. air carriers conducting passenger operations (both
scheduled and non

- scheduled) with at least one aircraft having a designed seating capacity of more than 60 passengers. The 201 2 Annual Report on Disability

- Related Air T ravel Complaints stated that 49 U.S.
carriers submitted data for 2011

. 9 The ACAA reporting rule requires these ca rriers to file negative
reports; i.e., if they had no complaints there are required to report “0.” Thus, the ACAA reporting rule

covers up to 3 5 more firms than the animal incident reporting rule

.

However , the scope of the animal incident report ing rule will be substantially less than the ACAA reporting rule because the animal incident reporting rule only requires monthly reporting if there is an

6 http://traveltips.usatoday.com/much

- airline

- ticket

- dogs

- 62519.html

7 http://www.farecompare.com/travel

- advice/flying

- with

- pets/

8 In the case of United , it is actually a specialized pet transport service.

9 http://airconsumer.dot.gov/publications/2012Report/2011ComplaintSummaryUS.pdf7 incident and it does not cover non

- scheduled airlines

. A review of carrier and other websites found that only 12 of th e 35 carriers covered by the ACAA reporting rule ar e currently U.S carriers that account for at least 1 percent of domestic scheduled passenger revenue

. The others are non

- scheduled charter
operators and other non

- covered or non

- operatin g carriers (e.g. lapsed c ertificate). W ebsite s for two of
the se carriers
, Spirit Airlines and Virgin America, report that they do not currently transport pets as accompanied baggage or live cargo. Two oth ers (Allegiant and Sun Country ) fly exclusively to vacation and resort type destinations. Both airlines do accept pets in the cabin (Sun Country also accepts pets as checked baggage); however, we think they would be unlikely to be transporting as many pets as cargo as other carriers s ince relocation is a primary purpose of this business

. The eight other carriers fly connecting operations for major carriers (e.g. Delta Connection). One of these fl ies exclusively as US Airways Express so they would likely follow US Airways policy and n ot transport pets as cargo. Mesa Airlines flies as a regional carrier for Delta, US Airways Express, and United Express but pets are allowed on their flights. 10 The six additional carriers affected by the amendments have fleets based entirely on regional jets and turboprop aircraft so there is some uncertainty about their current capacity for
transport ing pets

. 11 C arriers’ respective websites do not provide any independent information regarding policy on transporting pets as cargo. However, as with the larger reporting regional
connectors, w e would expect that most of the m can transport pets on many of the routes they serve

.

Expanding the requirement to include all dogs and cats transported in passenger air transportation (and dogs and cat s transported by breeders and handlers) may have more of an effect. Trade sources indicate that this category may be up to 1⁄2 of all the dogs, cats, and other household pets that scheduled passenger carriers currently transport as live cargo and one third of all pets transported in the cargo
hold (i.e. not in the cabin)

. The increase from having up to 12 additional carriers report will be likely
much less. T he combined economic impact will be small. The average number of incidents since 200 8 is
47 per yea r. For P aperwork Reduction Act (PRA) burden reporting purposes, DOT had previously
estimated this reporting burden at one hour per filing. Even if we doubled the number of reportable annual incidents, a n additional 4 7 incidents will result in an increase d burden of 4 7 hours

. Based on average wage rate (including benefits) of $ 38.86 for a Paralegal working in Scheduled Air Transportation, the additional costs of reporting are about $1, 826 per year. 12

Most of these new incidents will be on carriers already subject to the reporting rule . Consequently, we do not expect that there will be many additional costs in establishing reporting procedures for carriers that had not been subject to the requirements. To the extent new carriers report, they already report disability

- related passenger complaints to DOT so most procedures would already be in place.

10 http://www.paylessflights.com/en/airli nes/Mesa

- Airlines/118/

11 The seven carriers are Colgan Air, Compass Air, Executive Airlines, GoJet, Mesaba, Pinnacle, and Shuttle America.

12 We estimate this rate by taking the applicable Bureau of Labor Statistics (BLS) hourly wage rate for the category ( $ 27.33 ). We then account for ben efits by multiplying it by 1.422 (based on the December 201 2 BLS Employer Costs for Employee Compensation).8 Effect of Rule Changes and Cost of Compliance

- DECEMBER REPORT The final rule also requires carriers to report in the December report a summary of the total number of animal losses, injuries

, and deaths during the past calendar year. The only impact of this new requirement on covered carriers will be to add up all animal incidents that were reported thro ughout the year. Over the past several years, the number of carriers that submitted a report for December was
between 6 and 10 . This means that many reporting carriers currently submit a December report. An additional requirement is that all carriers mu st submit a report for December even if the carrier did not experience any incidents involving animals and/ or carried no animals during that year. However, t hese requirements are not likely to constitute a significant burden. At a m aximum , the 27 carrier s subject to these requirements will need to submit a year

- end report

. We estimate this reporting burden at one hour per report. If a carrier had one or more animal incidents in a year, it will be required to submit a report totaling the number of incide nts. We estimate that reporting burden will be a half

- hour per report. In the worst

- case scenario, the additional reporting burden will total no more than 40.5 hours ( 27 hours for each carrier to report either any or zero incidents in a given year plus 1 3 .5 additional hours if every carrier had at least 1 incident in the calendar year). We estimate that the additional industry reporting costs of thes e reports will be no more than $ 1,573.83 per year. 13

The final rule also requires covered carriers to report the total number of animals transported in the calendar year in the December reports. T his requirement is likely more substantial since it will require carriers to create and maintain a system that c an record the number of animals it transports. We estimate that first year start

- up costs for the computer hardware and sof tware would be approximately $27 0,000 ( $ 2012) for the entire industry based on an estimate from the 2007 Supporting Statement for
th e Disability Reporting Requirement

. 14 Subsequent yearly costs for maintenance are expected to be minimal. One commenter estimated that it would cost about $40,000 for one large carrier to implement this recording system with annual maintenance costs of $9 ,500 per year. We expect that approximately
27 firms would be responsible for recording the number of animals transported each year; however, not all these firms are large so costs would likely be much less. 15 Even if we assumed that annu al
maintenance co sts averaged $40 ,000 for the entire industry , the total cost of maintenance over 20 years discounted at 7% would be about $ 424,000

. 16 Factoring in the initial $ 270 ,000 start

- up cost brings the total cost of this requirement to about $ 694, 000.

13 Based off the same hourly wage rate for a paralegal as estimated above.

14 This rule required air carriers to rec ord and report any disability

- related complaint data to the Department. The supporting statement estimated that the first year start

- up costs would range from $242,957 to $254,738 in 2007.

15 We expect that some firms may already have systems set up that c an collect this data and will not incur large
start

- up costs as a result. Generally, firms with more flights will need larger databases; however, firms with less market share will likely not need to spend as much to comply with the requirements of this ru le.

16 We use the formula for the present value of an ordinary annuity ( http://en.wikipedia.org/wiki/Annuity_(finance_theory)) . For a constant benefit stream over 20 years at a 7% discount rate, the discount factor is 10.594.9 Costs and Benefits (REPORTING INCIDENTS and DECEMBER REPORT)

Total Costs of the Rule:

• Reporting Incidents:

o $1,826 per year

o $19,345 over 20 years at 7% discount rate

• December Report:

o Reporting Requirement:

 $1,573 per year

 $16, 664 over 20 years at 7% discount rate

o Database:

 $270,000 in start

- up costs

 $40,000 in annual maintenance costs ($423,760 over 20 years at 7% discount rate)

 $693,760 over 20 years at 7% discount rate (start

- up + maintenance)

• Total Cost: $729, 769 over 20 years at 7% discount rate

• Annualized Cost: $68, 885 at a 7% discount rate

The benefits of the rule are that it will provide consumers with a fuller picture of the safety record of airlines in transporting pets, in particular dogs and cats. The old definition of pets may have exclude d up to half of the dogs and cats that passenger carriers transport in the cargo compartment . By including
incidents involving dogs and cats transported by breeders and handlers in the reporting requirements

, this will no longer be the case. Expanding the rule to smaller carriers will help to close a data gap while not affecting carriers classified as small entities by the Department (see the Regulatory Flexibility Analysis below). Requiring negative reporting in the recap in the December report over a sig nature and certification of an official of that airline provides an additional incentive for complete and accurate reporting by carriers. Additionally, since the Department shares these reports with the U.S. Department of Agriculture which enforces the An imal Welfare Act, all of these measures should produce an opportunity for more comprehensive enforcement of that statute, with resulting benefits for pets and
their owners.

While we cannot put a monetary value on the benefit of improved information on ri sks to animals being transported on various airlines, we would note that our estimates above indicate that there are in
excess of 800,000 animals transported each year by U.S. airlines. Dogs and cats transported by breeders and handlers may make up betwe en 200,000 and 500,000 of these. If the benefit of expanding reporting requirements to dogs and cats shipped to these individuals were as little as 34 ₵ per animal shipped ($68, 885 ÷ 200,000) , the benefits of the rule would exceed the costs.

REGULATORY FL EXIBILITY ANALYSIS 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 is10 required to consider the potential impact o f its regulations on small entities, including small businesses, small nonprofit organizations and small governmental jurisdictions. A direct air carrier is a small business if it provides air transportation only with small aircraft (up to 60 seats capacity/18,000 pounds payload capacity) ; see 14 CFR 399.73

. The final rule expand s reporting requirements to all U.S. air carriers that operate scheduled passenger service with at least one aircraft with a designed se ating capacity of more than 60 seats, including incidents on flights that are operated with aircraft having 60 or
fewer seats. By definition (no aircraft with a capacity more than 60 seats) carriers that are small business will not be subject to the rule amendments.

Even for somewhat larger carriers, th e provisions of the new requirements will not impose significant costs on airlines. The total costs are not significant and we expect they will primarily apply to carriers who already are subject to the req uirements. These carriers all have at least one percent of domestic scheduled

- service passenger revenues and all have fleets with larger aircraft

. None of these carriers are small companies.

Consequently, the rule will not have any impact on small carriers as defined for RFA purposes

. We hereby certify that the rule will not have a significant economic impact on a substantial number of small entities.