3778 Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Proposed Rules

1Our X.400 e-mail address is as follows: G=dot/

S=dockets/OU1=qmail/O=hq/p=gov+dot/a=attmail/

c=us.

PART 71—[AMENDED]

1. The authority citation for Part 71

continues to read as follows:

Authority: 49 U.S.C. app. 1348(a), 1354(a),

1510; E. O. 10854; 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389; 49 U.S.C. 106(g); 14 CFR

11.69.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.09B,

Airspace Designations and Reporting

Points, dated July 18, 1994, and

effective September 16, 1994, is

amended as follows:

Paragraph 5000 Class D Airspace

* * * * *

AWP CA D Redding, CA [Revised]

Redding Municipal Airport, CA

(Lat. 40°30′32′′ N, long. 122°17′30′′ W)

That airspace extending upward from the

surface to and including 3,000 feet MSL

within a 4.3-mile radius of the Redding

Municipal Airport. This Class D airspace area

is effective during the specific dates and

times established in advance by a Notice to

Airmen. The effective date and time will

thereafter be continuously published in the

Airport/Facility Directory.

* * * * *

Issued in Los Angeles, California, on

January 6, 1995.

Richard R. Lien,

Manager, Air Traffic Division Western-Pacific

Region.

[FR Doc. 95–1268 Filed 1–18–95; 8:45 am]

BILLING CODE 4910–13–M

Office of the Secretary

14 CFR Part 258

[Dockets No. 47546, 49511, 49512, and

49513; Notice 95–3]

RIN 2105–AC17

Disclosure of Change-of-Gauge

Services

AGENCY: Department of Transportation,

Office of the Secretary (OST).

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: In order to ensure that

prospective airline consumers are given

pertinent information on the nature of

change-of-gauge services, i.e., services

with one flight number that require a

change of aircraft, the Department of

Transportation is proposing to codify

and augment its current disclosure

requirements. The Department is

requesting comments on the following

three proposed requirements, which

would apply to U.S. air carriers, foreign

air carriers, and where appropriate,

ticket agents (including travel agents)

doing business in the United States: (1)

that transporting carriers include notice

of required aircraft changes in their

written and electronic schedule

information provided to the public, to

the Official Airline Guide and

comparable publications, and to

computer reservations systems, (2) that

consumers be given reasonable and

timely notice before they book

transportation that a particular service

with a single slight number entails a

change of aircraft en route, and (3) that

written notice of the aircraft change be

provided at the time of sale. This

proposal constitutes the department’s

response to the petition of American

Airlines in Docket 47546 to ban the

practice of ‘‘funnel flights,’’ a type of

change-of gauge service. The

Department is also dismissing the

complaints of TACA International

Airlines, Aviateca, and Nicaraguense de

Aviacion (‘‘NICA’’) in Dockets 49511,

49512, and 49513, respectively, against

Continental Airlines for operating

funnel flights.

DATES: The Department requests

comments by March 20, 1995 and reply

comments by April 19, 1995. The

Department will consider late-filed

comments only to the extent practicable.

ADDRESSES: Comments should be filed

with the Docket Clerk, U.S. Department

of Transportation, Room 4107, Docket

No. 47546, 400 Seventh Street SW,

Washington, DC 20590. To facilitate

consideration of the comments, we ask

commenters to file twelve copies of each

submission. We also encourage

commenters to submit electronic

versions of their comments to the

Department through the Internet; our email address is

dotldockets@postmaster.dot.gov.1

Please note, however, that at this time

the Department considers only the

paper copies filed with the Docket Clerk

to be official comments. Comments will

be available for inspection at the above

address from 9:00 a.m. to 5:00 p.m.,

Monday through Friday. For

acknowledgment of receipt of

comments, include a stamped, selfaddressed postcard, which the Docket

Clerk will date-stamp and mail.

FOR FURTHER INFORMATION CONTACT:

Betsy L. Wolf, Senior Trial Attorney,

Office of Aviation Enforcement and

Proceedings (202–366–9356), Office of

the General Counsel, U.S. Department of

Transportation, 400 7th St. SW.,

Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Introduction

A change-of-gauge service is a type of

scheduled passenger air transportation

for which the operating carrier uses one

single flight number even though

passengers do not travel in the same

aircraft from origin to destination but

must change planes at an intermediate

stop. One-flight-to-one flight change-ofgauge service differs from ordinary

connecting service in that the carrier

will usually hold the second aircraft for

the arrival of the first one. Computer

Reservations System (CRS) Regulations,

Final Rule, 57 FR 43780, 43804

(September 22, 1992).

‘‘Change-of-gauge service is a longestablished practice in transportation.

The term itself originate with the

railroads when passengers had to

change trains due to differences in the

size of tracks. Change-of-gauge services

have been used in aviation for decades.

In 1972, the Civil Aeronautics Board

rejected the contention that change-ofgauge services were an unfair or

deceptive practice or an unfair method

of competition, as long as notice was

given, and it changed its rules to

accommodate them. Internationally, in

1978, the United States won an

international arbitration brought when

France attempted to limit the right of a

U.S. carrier to operate change-of-gauge

service. The tribunal found that the

agreement between the United States

and France permitted change-of-gauge

service by giving each country wide

discretion over operational aspects of

flight. Change-of-gauge services are

constantly used in cargo transportation,

where they sometimes entail changes

from one mode of transportation to

another. The policy of the United States

has been to permit intermodal changes

of gauge as long as shippers are not

mislead as to actual service.

In addition to one-flight-to-one flight

change-of-gauge services, change-ofgauge services can also involve aircraft

changes between multiple flight on one

side of the change point and one single

flight on the other side. Change-of-gauge

services with multiple origins or

destinations are called ‘‘Y’’ (i.e., two-forone), ‘‘W’’ (i.e., three-for-one), or

‘‘starburst’’ (i.e., unrestricted) changes of

gauge, depending on the shape of the

route patterns. Popularly, they are also

called ‘‘funnel flights.’’ The United

States has taken the lead in persuading

our bilateral aviation partners to move

beyond one-for-one change-of-gauge

services to allow carriers the flexibility

to operate multiple changes of gauge. As

with one-for-one change-of-gauge

services, the carrier assigns a single
Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Proposed Rules 3779

flight number for the passenger’s entire

itinerary even though the passenger

changes planes, but in addition, the

single flight to or from the exchange

point itself has multiple numbers: one

for each segment with which it connects

and one for the local market in which

it operates. That flight is thus listed in

CRSs under different numbers in

different city-pair markets. As an

example, an airline might operate three

flights to London from three European

cities: Flight 100 from Frankfurt, Flight

200 from Paris, and Flight 300 from

Rome. In London, passengers from all

three flights board a single aircraft

bound for New York. The London-New

York flight would carry all three flight

numbers plus its own number.

Schedules would show direct or

through flights to New York from

Frankfurt, Paris, and Rome as well as

the nonstop flight from London.

49 U.S.C. § 41712, formerly section

411 of the Federal Aviation Act,

authorizes the Department to identify

and ban unfair or deceptive practices or

unfair methods of competition on the

part of air carriers, foreign air carriers,

and ticket agents. Under § 41712, the

Department has adopted various

regulations and policies to prevent

unfair or deceptive practices or unfair

methods of competition, such as the

CRS rules (14 CFR Part 255) and our

policy on fare advertising (14 CFR

§ 399.84), for example., The

Department’s current CRS rules,

adopted in September of 1992, require

that CRS displays give notice of any

flight that involves a change of aircraft

en route Id at 43835; 14 CFR 255.4(b)(2).

In addition the Department requires as

a matter of policy that consumers be

given notice of aircraft changes for

change-of-gauge flights. See Order 89–

1–31 at 5.

Petition for Rulemaking

On May 16, 1991, American Airlines,

Inc., filed a petition for rulemaking to

prohibit funnel flights, claiming that

they deceive consumers and prejudice

airline competition. American

maintains that uninformed consumers

are harmed when they decide to buy

transportation on funnel flights, because

they mistakenly believe that they will be

traveling from origin to destination on

one plane, thus avoiding the risk that

they or their baggage will miss

connections. American maintains that

competing carriers suffer harm in two

ways. First, they fail to sell their own

connecting services of equivalent

quality to the misinformed passengers.

Second, in CRS displays for any citypair, they have only one listing for their

connecting services, whereas a funnel

flight is listed twice, both as a direct

flight with a single flight number and as

a connecting service. According to

American, this double listing not only

gives undue exposure to the funnel

flights but also pushes competitive

connecting services to later CRS screens

where they are less likely to be sold.

American acknowledges that CRSs in

the United States attempt to call funnel

flights to the attention of their travel

agent subscribers by including the

notation ‘‘CHG’’ with these flights’ CRS

listings. (The adoption of 14 CFR

255.4(b)(2) supra, occurred after

American filed its petition.) Despite this

precaution, however, American claims

that many consumers still buy tickets on

funnel flights without understanding

that they will be making a connection

and not remaining on one plane

throughout their journey. American

states that confusion may result for a

number of reasons: the travel agent may

fail to explain matters adequately to the

traveler; the person making the

reservation may not be the person taking

the trip, and even if the former

understands the situation, he or she may

fail to explain matters adequately to the

latter; or the traveler may become

confused upon receiving just one flight

coupon instead of the two that one

would normally expect for a connection.

American contends that funnel flights

offer no offsetting benefit to the

traveling public to justify their

existence. American also contends that

no carrier will forgo the practice as long

as any of its competitors maintains it.

Therefore, except in the case of ‘‘true’’

change-of-gauge flights that are

specifically authorized or required by

bilateral agreements to have a single

flight number, American urges that

funnel flights be prohibited. It proposes

that the Department adopt the following

language as a new paragraph (c) to

§ 399.81 of our regulations, ‘‘Unrealistic

or deceptive scheduling’’ (14 CFR

399.81):

(c) Except as otherwise expressly approved

by the Department, it is the policy of the

Department to regard as an unfair or

deceptive practice, and an unfair method of

competition, the use by an air carrier,

commuter air carrier, or foreign air carrier of

multiple flight numbers for a single aircraft

operating on any given day in a single citypair for interstate, overseas, or foreign air

transportation.

American proposes that this rule take

effect 90 days after its adoption in order

to allow for an orderly transition.

Comments and Reply Comments

Seven air carriers (Lufthansa German

Airlines, British Airways PLC, Delta Air

Line, Inc., Swissair [Swiss Air Transport

Company, Ltd.], Air France, Virgin

Atlantic Airways, Ltd., and Sabena

Belgian World Airlines), one group of

fourteen airlines (the Orient Airlines

Association), two other groups (the

American Society of Travel Agents, Inc.

[ASTA] and the Dallas/Fort Worth

Parties), one individual (Donald L.

Pevsner, Esq.), and one travel agency

(Magic Carpet Travel Agency) filed

comments in response to American’s

petition. Three carriers (American Trans

Air, Inc., Air Canada, and American)

filed reply comments. All of these

pleadings may be reviewed in the

docket. In reaching our decision to

propose the rule discussed below, the

Department has considered the

information provided and arguments

advanced by the commenters.

To summarize the pleadings, all

commenters except Air Canada support

a prohibition of funnel flights, although

some suggest variations on American’s

proposed language that would more

clearly permit code-sharing and blocked

space arrangements or that would ban

all change-of-gauge flights that are not

required by bilateral agreements. Some

suggest addressing funnel flights

through the CRS rules rather than by

amending our policy statement on

unrealistic or deceptive scheduling.

Several foreign carriers take the position

that foreign carriers are particularly

harmed by funnel flights and that this

practice violates the spirit if not the

letter of certain bilateral agreements. Mr.

Pevsner also asks the Department to go

so far as to ban all ticketing of two or

more flight segments on a singlecoupon, whether in interstate or foreign

air transportation.

Funnel Flight Complaints Against

Continental

On April 18, 1994, three foreign air

carriers filed nearly identical

complaints in which they ask the

Department to order Continental

Airlines, Inc. to cease and desist from

operating funnel flights between the

United States and Latin America. TACA

International Airlines, S.A., Aviateca,

S.A., and Nicaraguense de Aviacion,

S.A. (‘‘NICA’’) filed their complaints in

Dockets 49511, 49512, and 49513,

respectively. The three complainants

argue that Continental’s funnel flights

deceive and confuse consumers and

harm competition. Specifically, they

maintain that the funnel flights keep

consumers from buying the most

convenient transportation and give them

the mistaken impression that

Continental offers far more flights to

Latin America than it actually does.

They also maintain that Continental’s

funnel flights harm competition not
3780 Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Proposed Rules

only by misleading consumers but by

unfairly outranking other equivalent

services in CRS displays and displacing

such services to later CRS screens where

they are less likely to be sold. The

complainants also maintain that

Continental’s funnel flights deprive

them of a fair and equal opportunity to

compete.

Apart from the issue of funnel flights,

TACA charges Continental with

attempting to dominate the Texas-Latin

America market by unilaterally

terminating a prorate agreement

between the two carriers in the El

Salvador-Houston market, by engaging

in predatory pricing, by opposing

TACA’s expansion of service through

Honduran flights, and by opposing

TACA’s expansion of service at Dallas/

Fort Worth.

United and American both filed

consolidated answers supporting the

complaints but urging the Department to

ban funnel flights as a practice

industrywide rather than merely acting

on individual complaints.

Continental filed individual answers

opposing the complaints. Continental

maintains that its funnel flights are

entirely legal, as are the other activities

of which TACA complains. The carrier

also denies that its funnel flight service

receives preference over other on-line

connecting services in CRSs other than

SystemOne. As an affirmative defense,

Continental notes that the Department

has not acted on American’s petition for

rulemaking to ban funnel flights. In

addition, Continental asserts that TACA

owns a 30 percent share of Aviateca and

a 49 percent share of NICA, and it

maintains that the complaints represent

a concerted response to its own

opposition to TACA’s requests for extrabilateral authority to serve Dallas/Fort

Worth and all points in Honduras and

to its own complaint about lack of

access to jetways at San Salvador as

well. Continental also characterizes the

complaints as a concerted effort to limit

Continental’s ability to compete in the

U.S.-Central America market.

Notice of Proposed Rulemaking

Proposed Rule: By this notice, we

propose to require U.S. air carriers,

foreign air carriers, and, where

applicable, ticket agents (including

travel agents) doing business in the

United States to make the following

disclosures of all change-of-gauge

services, or services with a single flight

number that require changes of aircraft

en route (including funnel flights):

(1) notice by carriers of required

aircraft changes in written and electric

schedule information provided to the

public, to the Official Airline Guide and

comparable publications, and to

computer reservations systems,

(2) in any direct oral communication

with a consumer concerning a changeof-gauge service, notice before booking

transportation that the service requires a

change of aircraft en route, and

(3) written notice at the time of sale

of such service stating the following:

Notice: Change of Aircraft Required

For at least one of your flights, you must

change aircraft en route even though your

ticket may show only one flight number and

have only one flight coupon for that flight.

Further, in the case of some travel, one of

your flights may not be identified at the

airport by the number on your ticket, or it

may be identified by other flight numbers in

addition to the one on your ticket. At your

request, the seller of this ticket will give you

details of your change of aircraft, such as

where it will occur and what aircraft types

are involved.

We are thus proposing to codify

explicit requirements that all sellers of

air transportation make effective

disclosure to consumers that change-ofgauge itineraries, including funnel

flights, require a change of aircraft. The

contentions of American and the

various commenters, as confirmed by

our Consumer Affairs office, tentatively

persuades us that even with our current

policy requiring disclosure of aircraft

changes, too many consumers may be

buying transportation on these services

without realizing that they will be

changing planes. Also, despite our

adoption in 1992 of a rule requiring that

CRS displays must identify singlenumber flights requiring a change of

aircraft, it appears that travelers are still

not always informed of en route aircraft

changes, resulting in confusion and

hardship.

We tentatively find that the failure to

disclose required aircraft changes in

scheduled passenger air transportation

constitutes an unfair or deceptive

practice or an unfair method of

competition within the meaning of 49

U.S.C. 41712 (formerly section 411 of

the Federal Aviation Act). We intend for

the disclosure requirements proposed

here to complement our CRS rule. The

proposed rule should alleviate problems

of passenger deception or confusion and

any resultant harm to competition, and

it should enable all consumers to make

well-informed decisions when

purchasing travel.

We are not persuaded that we should

ban either single or multiple change-ofgauge services. The Department has

generally declined to foreclose carriers’

marketing and service innovations

unless these violate 49 U.S.C. 41712 or

otherwise contravene the public

interest. We do not agree with American

and the commenters that funnel flights

or other change-of-gauge services violate

49 U.S.C. 41712 or contravene the

public interest in and of themselves. We

tentatively find that any problems of

passenger deception or confusion that

can be attributed to the absence of

effective disclosure to prospective

passengers can and should be solved by

our proposed rule.

In calling for a ban on funnel flights

and other change-of-gauge services,

American and the commenters ignore

the public benefits that these services

provide. One-for-one change-of-gauge

services are superior to ordinary online

connections, because with the former,

the carrier will usually hold the second

aircraft for the arrival of the first one.

Both American Trans Air, which argues

that change-of-gauge services can

promote economic efficiency, and Delta

oppose banning these services. Multiple

change-of-gauge services can promote

economic efficiency by raising load

factors on the funnel segments. Higher

load factors in turn can enable carriers

to charge lower fares, serve more

markets, and increase frequency. A

higher level and scope of service

translate into increased competition,

which also benefits consumers. If, as

American argues, multiple change-ofgauge services really provide no benefits

for consumers, then with effective

disclosure, consumers will stop using

them, so carriers will stop offering them.

The carriers who favor a ban on single

and multiple change-of-gauge services

also ignore the costs of banning these

services. First, a ban on multiple

change-of-gauge services could lead to

higher fares in a significant number of

international city-pairs. The Department

exercises some control over the upward

movement of fares in international air

transportation on single-flight-number

services, since it can block—and has

blocked—fare increases that exceed the

levels allowable under the Standard

Foreign Fare Level for itineraries with

one flight number. Such regulatory

control does not extend to fares for

itineraries held out under two or more

flight numbers.

Second, a ban on multiple change-ofgauge services would sacrifice valuable

international route rights, to the

detriment of both the carriers and the

traveling public. The United States has

negotiated with our bilateral trading

partners—and paid by making various

concessions—for the rights to have its

carriers conduct change-of-gauge

services in foreign air transportation.

Many bilateral agreements not only

allow U.S. carriers to operate change-ofgauge services to and from points

beyond foreign gateways but actually
Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Proposed Rules 3781

require the beyond flights to be

continuations of flights that originate in

the United States or earlier legs of

flights that are destined for the United

States. Our bilateral agreement with

Great Britain expressly requires that

U.S. carriers use the same flight

numbers for all change-of-gauge sectors,

for example. This and similar

restrictions make through flight

numbers a necessity if U.S. carriers are

to redeem international route rights to

many points beyond foreign gateways.

Banning multiple change-of-gauge

services would sacrifice these rights and

deprive the traveling public of U.S.

carrier service. Moreover, most of the

bilateral agreements that allow multiple

change-of-gauge services do so for both

parties and specifically authorize

multiple flight numbers for a single

operation. To prohibit foreign flag

carriers from operating multiple changeof-gauge services in the United States

would breach these agreements. To

sacrifice U.S. carriers’ rights unilaterally

would contravene the public interest as

a matter of principle and in practice

could put U.S. carriers at a competitive

disadvantage.

The pleadings indicate that the

problems associated with change-ofgauge services lie not with the services

in and of themselves but with the failure

to inform passengers effectively that

these services entail a change of aircraft

en route. This failure, as stated above,

we tentatively find to be an unfair or

deceptive practice or an unfair method

of competition. The disclosure rules that

we are proposing should alleviate not

only most of the consumer problems

detailed by the commenters but also

whatever competitive problems may

now result from consumers’ mistaken

belief that they are purchasing singleplane transportation. For the reasons

discussed below, the other concerns

voiced by the commenters—i.e., CRS

display issues, the single-coupon

ticketing, the effects on foreign air

carriers, and the incomplete flight

displays at airports associated with

funnel flights and change-of-gauge

services—do not, in our view, warrant a

ban on these practices.

Those who comment on this notice

should be aware that the tentative

conclusions and analysis set forth here

do not reflect any of the comments filed

in Docket 49702, Disclosure of CodeSharing Arrangements and Long-Term

Wet Leases, Notice of Proposed

Rulemaking, 59 FR 40836 et seq.

(August 10, 1994). Rather, to the extent

that they may bear on this rulemaking,

we will consider these comments, as

well as our disposition of them in our

final action in the code-sharing

rulemaking, before we adopt any final

rule on disclosure of change-of-gauge

services.

In light of our tentative conclusion

that funnel flights do not violate 49

U.S.C. 41712 in and of themselves and

should not be banned, we dismiss the

complaints of TACA, Aviateca, and

NICA against Continental in Dockets

49511, 49512, and 49513, respectively.

Continental appears, moreover, to be

complying with our policy requiring

that passengers be informed of aircraft

changes. After reviewing the

complaints, we asked our Officer of

Consumer Affairs to investigate

Continental’s compliance by making

anonymous test calls, and that office

informs us that in all of its calls, the

aircraft change was disclosed. We also

dismiss TACA’s complaint because the

carrier has provided no evidence in

support of its charge of predatory

pricing and because the other acts with

which its charges Continental do not

violate 49 U.S.C. 41712, any other

provision of title 49 of the U.S. Code, or

the bilateral agreement between the

United States and El Salvador.

Passenger Confusion and Deception:

In requiring operators of change-ofgauge services to disclose aircraft

changes in their schedules and in

requiring all sellers of scheduled

passenger air transportation to make

oral disclosure of aircraft changes to

prospective passengers before booking

travel and to provide written notice at

the time of sale, we mean to eliminate

instances in which passengers choose

these types of transportation under a

mistaken impression that they will

remain on the same plane throughout

their journeys. We understand that in

some cases, passengers have only

learned that they must change aircraft

after they have begun their travel. The

written notice should also eliminate any

misunderstanding as to the nature of the

transportation that might otherwise

result from the receipt of only one flight

coupon for an itinerary that entails a

change of planes. It should eliminate or

reduce as well any confusion that

passengers might otherwise experience

if they see multiple flight numbers

listed at the airport for the same flight,

with or without their own flight

number. We have recently addressed

analogous concerns regarding the

sharing of airline designator codes by

proposing to require sellers of air

transportation to give passengers oral

and written notice of such

arrangements. See Disclosure of CodeSharing Arrangements and Long-Term

Wet Leases, Notice of Proposed

Rulemaking, supra.

The disclosure requirements proposed

here should thus address the problems

associated with passengers’

misunderstanding of the nature of their

transportation. Two other consumerrelated concerns cited by some

commenters do not, in our view, justify

a ban on one-for-one or multiple

change-of-gauge services. First, that

passengers are issued just one flight

coupon and therefore cannot switch

automatically to another carrier in the

event that the ongoing segment of their

transportation is cancelled or seriously

delayed does not justify banning onefor-one or multiple change-of-gauge

services. This restriction is not unique

to those services. Many widely-used

discount fares are not automatically

transferrable from one carrier to another,

either, but instead must be specially

endorsed by the issuing carrier in order

to be accepted by another carrier.

Second, we do not agree that we must

sacrifice the public benefits of multiple

change-of-gauge flights in order to

eliminate whatever confusion may

result from their incomplete listing in

some airports’ displays. This is an issue

that affected airports should address. In

any event, the written notice that our

proposed rule would require would

alert passengers to the possibility of

incomplete airport displays.

Competition: To the extent that

competition among airlines may be

affected when passengers reject other

connecting services in favor of one-forone or multiple change-of-gauge

services under the mistaken belief that

they will thereby avoid changing planes,

our proposed disclosure requirements

should correct this distortion.

American and the commenters also

cite padded displays in CRSs as a

competitive concern that warrants

banning these practices outright. We do

not agree, because the legitimacy of

change-of-gauge services in and of

themselves is a separate issue from the

way that such services are displayed in

CRSs. In fact, the issue of multiple CRS

listings has been raised in two recent

petitions for rulemaking: American and

Trans World Airlines have filed

petitions in Dockets 49620 and 49622,

respectively, for a CRS rule prohibiting

multiple listing of code-sharing services.

In that context, the Department will

consider the issue of display practices

as it involves both code-sharing services

and change-of-gauge services.

American and the commenters also

complain that funnel flights are

improperly given preference in CRSs

over on-line connecting services. As

noted above, though, Continental claims

that even though its funnel flights to

Latin America are displayed in CRSs as
3782 Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Proposed Rules

direct services with a change of

equipment no CRS except System One

gives them a preference over other

international on-line connecting

services. Moreover, out CRS rules allow

vendors to include change-of-gauge

services with connecting services on a

nondiscriminatory basis.

Effects on Foreign Air Carriers:

Several commenters argue that we

should ban multiple change-of-gauge

services because they disproportionately

harm foreign air carriers and because, in

violation of various bilateral

agreements, they deprive foreign air

carriers of a fair and equal opportunity

to compete. As we found in the CRS

rulemaking, however, ‘‘the right to a fair

and equal opportunity to compete does

not guarantee foreign air carriers the

exact same opportunities that U.S.

carriers have. [citations omitted]. . .

U.S. and foreign carriers must each

contend with the practical advantages of

route structure and market identity that

competing carriers have within their

own countries.’’ Computer Reservations

System (CRS) Regulations, Final Rule,

supra, at 43892–43893 (‘‘Prescribed

Algorithm’’). For example, any one

foreign carrier can generally offer

change-of-gauge and on-line connecting

service to the United States from far

more points behind its homeland

gateways than any U.S. carrier can

serve. Cf. id. at 43803 (‘‘On-Line

Preference’’). Furthermore, in an era of

increasing code-sharing arrangements

between U.S. and foreign air carriers—

arrangements which enable the

participants to offer the equivalent of

change-of-gauge and on-line service

between U.S. and foreign points behind

and beyond the participants’ gateways—

foreign carriers now have additional

opportunities to compete at interior-U.S.

points. See Disclosure of Code-Sharing

Arrangements and Long-term Wet

Leases, Notice of Proposed Rulemaking,

supra, 59 FR at 40837.

Request for Comments

We invite comments not only on the

merits of our proposed disclosure

requirements but also on the feasibility

and costs of implementing them.

Comments should be supported by

concrete data. Any economic analysis

should contain enough detail to allow

the Department to make an independent

evaluation of the position advocated.

Regulatory Analyses and Notices

The Department has determined that

this action is not a significant regulatory

action under Executive Order 12866 or

under the Department’s Regulatory

Policies and Procedures. The

Department has placed a regulatory

evaluation that examines the estimated

costs and effects of the proposal in the

docket.

The Department certifies that this

rule, if adopted, would not have a

significant economic effect on a

substantial number of small entities.

Although many ticket agents and some

air carriers are small entities, the

Department believes that the costs of

notification will be minimal. The

Department seeks comment on whether

there are effects on small entities that

should be considered. If comments

provide information that there are

significant effects on small entities, the

Department will prepare a regulatory

flexibility analysis at the final rule stage.

The Department does not believe that

the proposed rule has sufficient

federalism implications to warrant the

preparation of a federalism assessment.

Paperwork Reduction Act

The proposed rule does not contain

information collection requirements that

require approval by the Office of

Management and Budget under the

Paperwork Reduction Act (44 U.S.C.

2507 et seq.).

List of Subjects in 14 CFR Part 258

Air carriers, Foreign air carriers,

Ticket agents, and Consumer protection.

For the reasons set forth in the

preamble, the Department proposes to

amend Title 14, Chapter II, Subchapter

A by adding a new Part 258, to read as

follows:

PART 258—DISCLOSURE OF

CHANGE-OF-GAUGE SERVICES

Sec.

258.1 Purpose.

258.2 Applicability.

257.3 Definitions.

258.4 Unfair and Deceptive Practice.

258.5 Notice Requirement.

Authority: 49 U.S.C. 40113(a) and 41712.

§ 258.1 Purpose.

The purpose of this part is to ensure

that consumers are adequately informed

before they book air transportation or

embark on travel involving change-ofgauge services that these services

require a change of aircraft en route.

§ 258.2 Applicability.

This rule applies to the following:

(a) direct air carriers and foreign air

carriers that sell or issue tickets in the

United States for scheduled passenger

air transportation on change-of-gauge

services or that operate such

transportation; and

(b) ticket agents doing business in the

United States that sell or issue tickets

for scheduled passenger air

transportation on change-of-gauge

services.

§ 258.3 Definitions.

(a) Air transportation has the meaning

ascribed to it in 49 U.S.C. § 40102(5).

(b) Carrier means any air carrier or

foreign air carrier as defined in 49

U.S.C. 40102(2) or U.S.C. 40102(21),

respectively, that engages directly in

scheduled passenger air transportation.

(c) Change-of-gauge service means a

service that requires a change of aircraft

en route but has only a single flight

number.

(d) Ticket agent has the meaning

ascribed to it in 49 U.S.C. 40102(40).

§ 258.4 Unfair and deceptive practice.

The holding out or sale of scheduled

passenger air transportation that

involves change-of-gauge service is

prohibited as an unfair or deceptive

practice or an unfair method of

competition within the meaning of 49

U.S.C. § 41712 unless, in conjunction

with such holding out or sale, carriers

and ticket agents follow the

requirements of this part.

§ 258.5 Notice requirement.

(a) Notice in Schedules. Carriers

operating-of-gauge services to, from, or

within the United States shall ensure

that in the written and electronic

schedule information they provide to

the public, to the Official Airline Guide

and comparable publications, and to

computer reservations systems, these

services are shown as requiring a change

of aircraft.

(b) Oral Notice to Prospective

Consumers. In any direct oral

communication with a consumer in the

United States concerning a change-ofgauge service, any carrier or ticket agent

doing business in the United States

shall tell the consumer before booking

scheduled passenger air transportation

to, from, or within the United States that

the service requires a change of aircraft

en route.

(c) Written Notice. At the time of sale

in the United States of a change-ofgauge service, the selling carrier or

ticket agent shall provide written notice

stating the following:

Notice: Change of Aircraft Required

For at least one of your flights, you must

change aircraft en route even though your

ticket may show only one flight number and

have only one flight coupon for that flight.

Further, in the case of some travel, one of

your flights may not be identified at the

airport by the number on your ticket, or it

may be identified by other flight numbers in

addition to the one on your ticket. At your

request, the seller of this ticket will give you

details of your change of aircraft, such as
Federal Register / Vol. 60, No. 12 / Thursday, January 19, 1995 / Proposed Rules 3783

1Pipeline Service Obligations and Revisions to

Regulations Governing Self-Implementing

Transportation; and Regulation of Natural Gas

Pipelines After Partial Wellhead Decontrol, 57 FR

13267 (Apr. 16, 1992), III FERC Stats. & Regs.

Preambles ¶ 30,939 (Apr. 8, 1992), order on reh’g,

Order No. 636–A, 57 FR 36128 (Aug. 12, 1992), III

FERC Stats. & Regs. Preambles ¶ 30,950 (Aug. 3,

1992), order on reh’g, Order No. 636–B, 57 FR

57911 (Dec. 8, 1992), 61 FERC ¶ 61,272 (1992),

appeal re-docketed sub nom., Atlanta Gas Light

Company and Chattanooga Gas Company, et al. v.

FERC, No. 94–1171 (D.C. Cir. May 27, 1994).

2Order No. 636–A, III FERC Stats. & Regs.

Preambles at 30,553.

where it will occur and what aircraft types

are involved.

Issued under authority delegated in 49 CFR

1.56a(h)(2) in Washington, D.C. on January

12, 1995.

Patrick V. Murphy,

Acting Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 95–1331 Filed 1–18–95; 8:45 am]

BILLING CODE 4910–62–M

DEPARTMENT OF ENERGY

Federal Energy Regulatory

Commission

18 CFR Part 284

[Docket No. RM95–5–000]

Release of Firm Capacity on Interstate

Natural Gas Pipelines

January 12, 1995.

AGENCY: Federal Energy Regulatory

Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Energy

Regulatory Commission is proposing to

amend its capacity release regulations to

permit firm shippers of natural gas to

negotiate prearranged releases of

capacity for a full calendar month

without compliance with the

Commission’s advance posting and

bidding requirements. The amendment

would make it easier to negotiate shortterm capacity release transactions and

would ease the reporting burden on

industry.

DATES: Comments are due February 21,

1995.

ADDRESSES: An original and 14 copies of

comments must be filed and refer to

Docket No. RM95–5–000. Comments

should be addressed to: Office of the

Secretary, Federal Energy Regulatory

Commission, 825 North Capitol Street

NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:

Michael Goldenberg, Federal Energy

Regulatory Commission, 825 North

Capitol Street NE., Washington, DC

20426, (202) 208–2294

Joseph Vasapoli, Federal Energy

Regulatory Commission, 825 North

Capitol Street NE., Washington, DC

20426, (202) 208–0620.

SUPPLEMENTARY INFORMATION: In

addition to publishing the full text of

this document in the Federal Register,

the Commission also provides all

interested persons an opportunity to

inspect or copy the contents of this

document during normal business hours

in Room 3104, 941 North Capitol Street

NE., Washington DC 20426.

The Commission Issuance Posting

System (CIPS), an electronic bulletin

board service, provides access to the

texts of formal documents issued by the

Commission. CIPS is available at no

charge to the user and may be accessed

using a personal computer with a

modem by dialing (202) 208–1397. To

access CIPS, set your communications

software to 19200, 14400, 12000, 9600,

7200, 4800, 2400, 1200 or 300bps, full

duplex, no parity, 8 data bits, and 1 stop

bit. The full text of this document will

be available on CIPS for 60 days from

the date of issuance in ASCII and

WordPerfect 5.1 format. After 60 days

the document will be archived, but still

accessible. The complete text on

diskette in WordPerfect format may also

be purchased from the Commission’s

copy contractor, La Dorn Systems

Corporation, also located in Room 3104,

941 North Capitol Street NE.,

Washington DC 20426.

Notice of Proposed Rulemaking

January 12, 1995.

In Order No. 636,1 the Federal Energy

Regulatory Commission (Commission)

established a mechanism under which

firm holders of capacity could release

unneeded capacity they held on

interstate pipelines to other shippers

needing that capacity. The Commission

is proposing to amend one provision of

its capacity release regulations,

§ 284.243(h), to extend to one month the

time period for which shippers can

release firm capacity without having to

comply with the Commission’s advance

posting and bidding requirements. The

current regulations restrict this ability to

less than one calendar month.

I. Reporting Requirements

The proposed rule affects the

information required to be maintained

on pipeline electronic bulletin boards

(EBBs). The public reporting burden for

EBBs is contained in the information

requirement FERC–549(B), ‘‘Gas

Pipeline Rates: Capacity Release

Information.’’ If adopted, the proposed

rule would eliminate the need for the

industry to continue the current practice

of using two capacity release postings (a

less-than-one month release coupled

with a one-day release) to complete a

full month release transaction. Under

the proposed rule, full month releases

could be accomplished with only one

such posting. The Commission

estimates that approximately 1,500

paired release transactions occur per

year. At an average burden of one hour

per posting, the annual reduction in

burden as a result of this rule is

approximately 1,500 hours.

A copy of this proposed rule is being

provided to the Office of Management

and Budget (OMB). Interested persons

may send comments regarding the

burden estimates or any other aspect of

this collection of information, including

suggestions for further reductions of this

burden, to the Federal Energy

Regulatory Commission, 941 North

Capitol Street, N.E., Washington, D.C.

20426 [Attention: Michael Miller,

Information Services Division, (202)

208–1415, FAX (202) 208–2425].

Comments on the requirements of this

proposed rule may also be sent to the

Office of Information and Regulatory

Affairs of OMB, Washington, D.C. 20503

[Attention: Desk Officer for Federal

Energy Regulatory Commission (202)

395–6880, FAX (202) 395–5167].

II. Background

Under the regulations promulgated in

Order No. 636, holders of firm capacity

on pipelines could reassign that

capacity in two ways. The releasing

shipper could choose to have the

pipeline post the notice of release on the

pipeline’s Electronic Bulletin Board

(EBB) so other shippers could submit

bids for that capacity, with the capacity

awarded to the highest bidder. Or, the

releasing shipper could enter into a prearranged deal with another shipper

(replacement shipper) for the release of

capacity. For a pre-arranged release at

less than the maximum rate, the

pipeline had to post the release on its

EBB to permit other shippers to bid for

that capacity. If a shipper bid more than

the pre-arranged release rate, the

designated replacement shipper was

given the opportunity to match that bid

to retain the capacity.

In Order No. 636–A, several

petitioners requested an exemption from

the bidding process for short-term prearranged release transactions,

contending that the requirements for

advance posting and bidding are too

administratively difficult for such

transactions and could inhibit the

efficient allocation of capacity.2 In

response, the Commission promulgated

§ 224.243(h), permitting firm shippers to