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 of Aviation 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 of Aviation Enforcement and Proceedings

Paula Twidale, Collette Vacations

Blane Workie, Office of Aviation Enforcement and Proceedings

Summary of Conversation:

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On June 19,2014, Blane Workie spoke at the USTOA Congressional Caucus in Washington,

D.C. where she gave an overview of recent enforcement and rulemaking activities related to .

aviation economic, consumer protection and civil rights matters. As part of this overview, Ms.

Workie stated that the NPRM titled "Transparency of Airline Ancillary Fees and Other

Consumer Protection Issues," which she referred to as "Consumer III NPRM" 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 a request 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 in the NPRM. At the conclusion of Ms.

Workie's presentation, two comments/questions were made regarding the Consumer III NPRM.

Ms. Madhvi Buch of Travel Corporation asked Ms. Workie to clarify what the Department

means by the term "revenue" in the discussions of ticket agents with annual revenue in excess of

$100 million. Ms. Buch also asked whether the $100 million figure refers only to revenue

derived from the sale of the air transportation or to the broader category of revenue derived from

the sale of cruises, tours and other travel services. Ms. Workie replied that because of ex parte

communication restrictions she would only be able to discuss what is publicly available in the
NPRM and accompanying regulatory impact analysis. Ms. Workie stated that she would answer

this question fully in writing and place it in the rulemaking docket. I See question and answer

below .

.L Ouestion: First, can you clarify what the department means by the term "revenue" in the

discussions of ticket 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 in trust for an unaffiliated third party, such as bookings or sales subject to

commissions. The commissions or fees (not total dollar value of the transactions)

received and revenues from all other sources are included as receipts. A more detailed

explanation on how SBA calculates receipts for siZe standards 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 air transportation-related activity, to the broader category of funds derived

from the sale of cruises, tours and other travel services?

Answer: The $100 million refers to the broader category of funds. Table 7 in the 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 of the Department's Office of Public Affairs. The response

above has been provided.
* North American Industry Classification System. Travel Agencies comprises

establishments primarily engaged in acting as agents in selling 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 travel agencies or tour operators.

Travel or wholesale tour operators are included in this industry.

** Firms with annual revenue in excess 0/$100 million.

Source: Small Business Administration, 2007

During the question and answer portion, Ms. Paula Twidale of Collette Vacations noted her view

that the Department should require carriers to disclose fee information for basic ancillary

services to all ticket agents, including ODSs. She stated that if the DOT does not require that

this information be provided to the ODSs then it would not be possible for tour operators such as

her to abide by the requirement in the NPRM to disclose fees for these services to consumers.

Ms. Twidale asserted that it would impossible to connect directly with a multitude of carriers.