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106TH CONGRESS

1ST SESSION H. R. 1678

To amend title 49, United States Code, to require the Secretary of Transportation to initiate investigations of unfair methods of competition by

major air carriers against new entrant air carriers.

IN THE HOUSE OF REPRESENTATIVES

MAY 4, 1999

Mr. SWEENEY introduced the following bill; which was referred to the

Committee on Transportation and Infrastructure

A BILL

To amend title 49, United States Code, to require the Secretary of Transportation to initiate investigations of unfair methods of competition by major air carriers against

new entrant air carriers.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Airline Competition

5 and Fairness Act of 1999’’.
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1 SEC. 2. UNFAIR METHODS OF COMPETITION AGAINST NEW

2 ENTRANT AIR CARRIERS.

3 Section 41712 of title 49, United States Code, is

4 amended—

5 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

6 ‘‘On the initiative’’; and

7 (2) by adding at the end the following:

8 ‘‘(b) UNFAIR METHODS OF COMPETITION AGAINST

9 NEW ENTRANT AIR CARRIERS.—

10 ‘‘(1) IN GENERAL.—In any case in which a

11 major air carrier is competing with a new entrant

12 air carrier in providing air transportation on a route

13 between a hub airport of the major air carrier and

14 another airport, the Secretary shall initiate an inves15 tigation under subsection (a) to determine whether

16 the major air carrier has been or is engaged in an

17 unfair method of competition if the Secretary finds

18 that—

19 ‘‘(A) the major air carrier has added seat

20 capacity on the route and has sold such a large

21 number of seats on the route at very low fares

22 that the ensuing self-diversion of revenue has

23 resulted in lower local revenue than would have

24 resulted from a reasonable alternative response

25 by the major air carrier to the competition;
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1 ‘‘(B) the number of passengers that the

2 major air carrier has carried on the route at the

3 new entrant air carrier’s low fares (or at similar

4 fares that are substantially below the major air

5 carrier’s previous fares) has exceeded the new

6 entrant air carrier’s total seat capacity on the

7 route, resulting, through self-diversion, in lower

8 local revenue than would have resulted from a

9 reasonable alternative response by the major air

10 carrier to the competition; or

11 ‘‘(C) the number of passengers that the

12 major air carrier has carried on the route at the

13 new entrant air carrier’s low fares (or at similar

14 fares that are substantially below the major air

15 carrier’s previous fares) has exceeded the num16 ber of low-fare passengers carried by the new

17 entrant air carrier on the route, resulting,

18 through self-diversion, in lower local revenue

19 than would have resulted from a reasonable al20 ternative response by the major air carrier to

21 the competition.

22 ‘‘(2) EXCEPTION.—Even if the Secretary makes

23 a finding described in paragraph (1), the Secretary

24 is not required to initiate an investigation in accord25 ance with paragraph (1) if the Secretary also finds
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1 that there are strong reasons to believe that the

2 major air carrier’s response to competition from the

3 new entrant air carrier does not violate subsection

4 (a).

5 ‘‘(c) DEFINITIONS.—In this section, the following

6 definitions apply:

7 ‘‘(1) NEW ENTRANT AIR CARRIER.—The term

8 ‘new entrant air carrier’ means an air carrier that

9 has been providing air transportation according to a

10 published schedule for less than 10 years and pur11 sues a competitive strategy of charging low fares.

12 ‘‘(2) HUB AIRPORT.—The term ‘hub airport’

13 means an airport that each year has at least .25

14 percent of the total annual boardings in the United

15 States.

16 ‘‘(3) MAJOR AIR CARRIER.—The term ‘major

17 air carrier’ means a passenger air carrier that is cer18 tificated under chapter 411 of this title and included

19 in Carrier Group III under criteria contained in sec20 tion 04 of part 241 of title 14, Code of Federal Reg21 ulations.’’.

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