# Memorandum

US-Department of Transportation Office of the secretory of Transportation Subject: Notice of Communication:

(Docket: DOT-OST-2014-0056) Dale: June 

### 20,2014

From: Blane Workie,

Acting Assistant General Counsel Office ofAviation Enforcement and Proceedings
To: Chief, Dockets Please place this memorandum in th~ appropriate file and in the Docket. Participants: Attendees to USTOA's 2014 Congressional Caucus Madhvi Buch, Travel Corporation Jonathan Dols, Office ofAviation Enforcement and Proceedings Paula Twidale, Collette Vacations Blane Workie, Office ofAviation Enforcement and Proceedings Summary ofConversation: 

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On June 19,2014, Blane Workie spoke atthe USTOA Congressional Caucus in Washington, D.C. where she gave an overview ofrecent enforcement and rulemaking activities related to
. aviation economic, consumer protection and civil rights matters. As part ofthis overview, Ms. Workie stated that the NPRM titled "Transparency ofAirline Ancillary Fees and Other Consumer Protection Issues," which she referred to as "Consumer IIINPRM" was published in the Federal Register on May 23'd and comments are currently due on August 21. She also mentioned that DOT has received arequest from A4A, lATA, and RAA to extend the comment period for an additional 90 days but that no decisions have been made on this request. Ms. Workie proceeded to describe the main provisions inthe NPRM. Atthe conclusion ofMs. Workie's presentation, two comments/questions were made regarding the Consumer IIINPRM. Ms. Madhvi Buch ofTravel Corporation asked Ms. Workie to clarify what the Department means by the term "revenue" inthe discussions ofticket agents with annual revenue inexcess of $100 million. Ms. Buch also asked whether the $100 million figure refers only to revenue derived from the sale ofthe airtransportation orto the broader category ofrevenue derived from the sale ofcruises, tours and other travel services. Ms. Workie replied that because ofex parte communication restrictions she would only be able to discuss what is publicly available intheNPRM and accompanying regulatory impact analysis. Ms. Workie stated that she would answer

this question fully in writing and place itinthe rulemaking docket. I See question and answer below

. 

### .L Ouestion: First, can you clarify what the department means by the term "revenue" inthe discussions ofticket agents with annual revenue in excess of$IOO million? Answer: DOT used data from Small Business Administration in determining the firms likely to be affected by the rule provision that only applies to ticket agents with annual revenue in excess of$IOO million. In short, for Travel Agencies (NAICS 561510) and Tour Operators (NAICS 561520), receipts are measured by total revenues, but excluding funds received intrust for an unaffiliated third party, such as bookings or sales subject to commissions. The commissions or fees (not total dollar value ofthe transactions) received and revenues from all other sources are included as receipts. A more detailed explanation on how SBA calculates receipts for siZestandards is explained in 13 CFR Part 121.104. Click on this link for details on 13 CFR Part 121.104, and other size standard questions: http://www.ecfr.gov/cgi-bin/textidx?tpI=/ecfrbrowselTitle 13/13cfr 121 main 02.1pl

2. Ouestion: Second, can you clarify whether the department intends the $100 million to refer only to airtransportation-related activity, to the broader category offunds derived from the sale ofcruises, tours and other travel services? Answer: The $100 million refers to the broader category offunds. Table 7 inthe RIA summarizes the data we used in the RIA to estimate Travel Agencies with revenue greater than $100 million. We estimated based on data made available by the Small Business Administration, which used data collected by the Bureau of Census to estimate all firms, by industry, by detailed revenue category
.

.Table 7: Travel Agencies with Annual Revenue in Excess of$100 Million, 2007

NAICS Description* NAICS Total Firms Est. Receipt size c1asses,$100 M,+** Travel Agencies. 56151 11,803 57 Tour Operators. 56152 4,210,682 24

I Travel Weekly asked almost identical questions ofthe Department's Office of Public Affairs. The response above has been provided.

## *North American Industry Classification System. TravelAgencies comprises establishmentsprimarily engaged inacting as agents inselling travel, tour, and accommodation services to the general public and commercial clients. Tour Operators comprises establishments primarily engaged in arranging and assembling tours. The tours are sold through travelagencies or tour operators. Travelorwholesale touroperatorsareincludedinthisindustry. 

## **Firmswithannualrevenueinexcess0/$100 million. Source:SmallBusinessAdministration, 2007 During the question and answer portion, Ms. Paula Twidale ofCollette Vacations noted her view that the Department should require carriers to disclose fee information forbasic ancillary services to all ticket agents, including ODSs. She stated that ifthe DOT does not require that this information be provided to the ODSs then itwould not be possible for tour operators such as her to abide by the requirement inthe NPRM to disclose fees forthese services to consumers. Ms. Twidale asserted that itwould impossible to connect directly with amultitude ofcarriers.