21026 Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 

information and recommendation 

submitted by the Committee and other 

available information, it is hereby found 

that this rule, as hereinafter set forth, 

will tend to effectuate the declared 

policy of the Act. 

Pursuant to 5 U.S.C. 553, it also found 

and determined that good cause exists 

for not postponing the effective date of 

this rule until 30 days after publication 

in the Federal Register because the 

2007–08 fiscal period began on August 

1, 2007, and the marketing order 

requires that the rate of assessment for 

each fiscal period apply to all onions 

handled during such fiscal period. In 

addition, the Committee needs to have 

sufficient funds to pay its expenses 

which are incurred on a continuous 

basis. Further, handlers are aware of this 

action which was unanimously 

recommended at a public meeting and 

is similar to other assessment rate 

actions issued in past fiscal periods. 

Also, a 15-day comment period was 

provided for in the proposed rule. 

List of Subjects in 7 CFR Part 959 

Marketing agreements, Onions, 

Reporting and recordkeeping 

requirements. 

■ For the reasons set forth in the 

preamble, 7 CFR part 959 is amended as 

follows: 

PART 959—ONIONS GROWN IN 

SOUTH TEXAS 

■ 1. The authority citation for 7 CFR 

part 959 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. Section 959.237 is revised to read 

as follows: 

§ 959.237 Assessment rate. 

On and after August 1, 2007, an 

assessment rate of $0.03 per 50-pound 

equivalent is established for South 

Texas onions. 

Dated: April 15, 2008. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 08–1149 Filed 4–15–08; 12:13 pm] 

BILLING CODE 3410–02–P 

DEPARTMENT OF TRANSPORTATION 

Office of the Secretary 

14 CFR Part 250 

[Docket No. DOT–OST–01–9325] 

RIN No. 2105–AD63 

Oversales and Denied Boarding 

Compensation 

AGENCY: Office of the Secretary (OST), 

Department of Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: The Department of 

Transportation (DOT or Department) is 

amending its rules relating to oversales 

and denied boarding compensation to 

increase the limits on the compensation 

paid to ‘‘bumped’’ passengers, to cover 

flights by certain U.S. and foreign air 

carriers operated with aircraft seating 30 

through 60 passengers, which are 

currently exempt from the rule, and to 

make other changes. These changes are 

intended to maintain consumer 

protection commensurate with 

developments in the aviation industry. 

This action is taken on the Department’s 

initiative and in response to a petition 

from the Air Transport Association. 

DATES: This rule is effective May 19, 

2008. 

FOR FURTHER INFORMATION CONTACT: Tim 

Kelly, Aviation Consumer Protection 

Division, Office of the General Counsel, 

Department of Transportation, 1200 

New Jersey Ave., SE., Washington, DC 

20590, 202–366–5952 (voice), 202–366–

5944 (fax), tim.kelly@dot.gov (e-mail). 

SUPPLEMENTARY INFORMATION: 

Background 

Part 250 establishes minimum 

standards for the treatment of airline 

passengers holding confirmed 

reservations on certain U.S. and foreign 

carriers who are involuntarily denied 

boarding (‘‘bumped’’) from flights that 

are oversold. In most cases, bumped 

passengers are entitled to compensation. 

Part 250 sets the minimum amount of 

compensation that is required to be 

provided to passengers who are bumped 

involuntarily. Until now the rule has 

not applied to flights operated with 

aircraft with a design capacity of 60 or 

fewer passenger seats. 

In adopting the original rule in the 

1960s, the Civil Aeronautics Board 

(CAB), the Department’s predecessor in 

aviation economic regulation, 

recognized the inherent unfairness in 

carriers selling more ‘‘confirmed’’

reservations for a flight than they have 

seats. Therefore, the CAB sought to 

reduce the number of passengers 

involuntarily denied boarding to the 

smallest practicable number without 

prohibiting deliberate overbooking or 

interfering unnecessarily with the 

carriers’ reservations practices. Air 

travelers receive some benefit from 

controlled overbooking because it 

allows flexibility in making and 

canceling reservations as well as buying 

and refunding tickets. Overbooking 

makes possible a system of confirmed 

reservations that can almost always be 

honored. It allows airlines to fill more 

seats, reducing the pressure for higher 

fares, and makes it easier for people to 

obtain reservations on the flights of their 

choice. On the other hand, overbooking 

is the major cause of oversales, and the 

people who are inconvenienced are not 

those who do not show up for their 

flights, but passengers who have 

conformed to all carrier rules. The 

current rule allocates the risk of being 

denied boarding among travelers by 

requiring airlines to solicit volunteers 

and use a boarding priority procedure 

that is not unjustly discriminatory. 

In 1981, the CAB amended the 

oversales rule to exclude from the rule 

all operations using aircraft with 60 or 

fewer passenger seats. (ER–1237, 46 FR 

42442, August 21, 1981.) At the time of 

that proceeding, the impact of the rule 

on carriers operating small aircraft was 

found to be significant. If a passenger 

was denied boarding on a typical smallaircraft short-haul flight and 

subsequently missed a connection to a 

long-haul flight, the short-haul carrier 

usually had to compensate the 

passenger in an amount equal to twice 

the value of the passenger’s remaining 

ticket coupons to his or her destination, 

subject to a maximum limitation. For 

example, if the short-haul fare was $50 

and the connecting long-haul fare was 

$500, the first carrier often had to pay 

the passenger denied boarding 

compensation in an amount far greater 

than $50, depending on whether 

alternate transportation could be 

arranged to arrive within a short time, 

despite the minimal fare that the first 

carrier received for its flight. The 

problem was exacerbated by the fact 

that most commuter airline flights at the 

time were on small turboprop and 

piston engine aircraft which were 

affected by weight limitations in high 

temperature/humidity conditions to a 

greater extent than jets and, therefore, 

might require bumping even when the 

carrier did not book beyond the seating 

capacity of the aircraft. 

Part 250 has tended to reduce 

passenger inconvenience and financial 

loss occasioned by overbooking without 

imposing heavy burdens on the airlines 

or significant costs on the traveling 


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Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 21027 

1 It is important to note that the maximum 

involuntary denied boarding amounts set forth in 

Part 250 are amounts below which carriers cannot 

set their maximum compensation. Airlines have 

been and continue to be free, as a competitive tool, 

to voluntarily set their maximum compensation 

levels at amounts greater than that provided in the 

Department’s rule. With the exception of JetBlue 

Airways, whose recently changed policy is 

described below, we are not aware of any carrier 

that has elected to do so. 

public. In focusing only on the 

treatment of passengers whose boarding 

is involuntarily denied, we have 

avoided regulating carriers’ reservations 

practices. Overall, it appears that the 

rule has served a useful purpose; 

however, in light of recommendations 

from various sources, including 

Congress, the Department’s Inspector 

General, and major airlines themselves, 

we reviewed the rule and have decided 

to revise certain aspects of the rule that 

we believe are outdated. In view of the 

passage of time since the rule was last 

revised and changes in commercial air 

travel over that time, we have decided 

to increase the compensation 

maximums and extend the rule to cover 

a broader range of aircraft. The 

Department is also making certain other 

changes of lesser impact. 

The Current Denied Boarding 

Compensation Rule 

The purpose of the Department’s 

denied boarding compensation rule is to 

balance the rights of passengers holding 

reservations with the desirability of 

allowing air carriers to minimize the 

adverse economic effects of ‘‘no-shows’’

(passengers with reservations who 

cancel or change their flights at the last 

minute, or who fail to appear and 

provide no notice). The rule sets up a 

two-part system. The first encourages 

passengers to voluntarily relinquish 

their confirmed reservations in 

exchange for compensation agreed to 

between the passenger and the airline. 

The second requires that, where there is 

an insufficient number of volunteers, 

passengers who are bumped 

involuntarily be given compensation in 

an amount specified in the rule. In 

addition, the Department requires 

carriers to give passengers notice of 

those procedures through signs and 

written notices provided with tickets 

and at airports, and to report the 

number of passengers denied boarding 

to the Department on a quarterly basis. 

The Civil Aeronautics Board (CAB) 

first required payments to bumped 

passengers over 46 years ago. In Order 

No. E–17914, dated January 8, 1962, the 

CAB conditioned its approval of ‘‘noshow penalties’’ for confirmed 

passengers on a requirement that 

bumped passengers be compensated. An 

oversales rule was adopted in 1967 as 

14 CFR Part 250 (ER–503, 32 FR 11939, 

August 18, 1967) and revised 

substantially in 1978 and 1982 after 

comprehensive rulemaking proceedings 

(ER–1050, 43 FR 24277, June 5, 1978 

and ER–1306, 47 FR 52980, November 

24, 1982, respectively). The key features 

of the current requirements are as 

follows: 

(1) In the event of an oversold flight, 

the airline must first seek volunteers 

who are willing to relinquish their seats 

in return for compensation of the 

airline’s choosing. 

(2) If there are not enough volunteers, 

the airline must use non-discriminatory 

procedures (‘boarding priorities’) in 

deciding who is to be bumped 

involuntarily. 

(3) Most passengers who are 

involuntarily bumped are eligible for 

denied boarding compensation, with the 

amount depending on the price of each 

passenger’s ticket and the length of his 

or her delay. If the airline can arrange 

alternate transportation that is 

scheduled to arrive at the passenger’s 

destination within 1 hour of the 

planned arrival time of the oversold 

flight, no compensation is required. If 

the alternate transportation is scheduled 

to arrive between 1 and 2 hours after the 

planned arrival time of the oversold 

flight (between 1 and 4 hours on 

international flights), the compensation 

equals 100% of the passenger’s one-way 

fare to his or her next stopover or final 

destination, with a $200 maximum. If 

the airline cannot meet the 2 (or 4) hour 

deadline, the compensation rate doubles 

to 200% of the passenger’s one-way fare, 

with a $400 maximum. This 

compensation is in addition to the value 

of the passenger’s ticket, which he or 

she can use for alternate transportation 

or have refunded if not used. 

Discussion 

On July 10, 2007, the Department 

published an Advance Notice of 

Proposed Rulemaking (ANPRM) seeking 

comment on several issues associated 

with the oversales rule; see 72 FR 

37491. We received over 1,280 

comments in response to the ANPRM. 

About 20 of the comments were from 

organizations, with the rest from 

individuals. Most of the comments from 

the organizations, including those from 

air carriers and organizations 

representing air carriers, expressed the 

opinion that the rule serves a useful 

purpose and had benefited the industry 

and the public. Many of the individual 

comments did not express an opinion 

on the specific issues discussed in the 

ANPRM but rather urged that 

overbooking be banned, described their 

own negative air travel experiences, or 

commented on other issues (e.g., flight 

delays). 

On November 20, 2007, the 

Department published a Notice of 

Proposed Rulemaking (72 FR 65237) in 

which we proposed several specific 

changes to the Oversales rule. We did 

not propose to ban overbooking as many 

individual commenters urged. As 

indicated in the ‘‘Background’’ section 

above, air travelers receive some benefit 

from controlled overbooking. We are not 

aware of levels of consumer harm that 

require such a sweeping solution at this 

time, and we believe that the additional 

oversale protections that we are 

adopting here will address the principal 

issues related to this regulation that 

require action by the Department. 

The issues that were presented in the 

NPRM and a summary of the comments 

appear below. 

The Maximum Amount of Denied 

Boarding Compensation 

It has been 25 years since the rule was 

last revised, and the existing $200 and 

$400 limits on the amount of required 

denied boarding compensation for 

passengers involuntarily denied 

boarding have not been raised since 

1978. The Department has received 

recommendations from various sources 

that it reexamine its oversales rule and, 

in particular, the maximum amounts of 

compensation set forth in the rule. In 

this regard, in a sense-of-the-Senate 

amendment to the Department of 

Transportation and Related Agencies 

Appropriations Act of 2000, Public Law 

106–69, the Senate noted its sense that 

the Department should amend its 

denied boarding rule to double the 

applicable compensation amounts. 

Legislation has also been introduced in 

Congress to require the Department to 

review the rule’s maximum amounts of 

compensation. (See S. 319, reported in 

the Senate April 26, 2001.) In addition, 

in his February 12, 2000, Final Report 

on Airline Customer Service 

Commitments, the Department’s 

Inspector General (IG) recommended, 

among other things, that the airlines 

petition the Department to increase the 

amount of denied boarding 

compensation payable to involuntarily 

bumped passengers. In response thereto, 

and citing the length of time since the 

maximum amounts of denied boarding 

compensation were last revised, the Air 

Transport Association (the trade 

association of the larger U.S. airlines) 

filed a petition with the Department on 

April 3, 2001, requesting that a 

rulemaking be instituted to examine 

those amounts.1 (Docket DOT–OST–


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21028 Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 

2This report tracks the denied boarding rate of air 

carriers that each account for at least 1% of 

domestic scheduled-service passenger revenues for 

the previous year. Consequently, the list of carriers 

whose performance is tracked in this report can 

change from year to year. 

2001–9325.) More recently, the IG on 

November 20, 2006, issued his ‘‘Report 

on the Follow-up Review Performed of 

U.S. Airlines in Implementing Selected 

Provisions of the Airline Customer 

Service Commitment’’ in which he 

recommended that we determine 

whether the maximum denied boarding 

compensation (DBC) amount needs to be 

increased and whether the oversales 

rule needs to be extended to cover 

smaller aircraft. 

The CAB’s decision in 1978 to double 

the maximum amount of denied 

boarding compensation to $400 was 

based on its determination that the 

previous maximum was inadequate to 

redress the inconvenience to bumped 

passengers and that the increase would 

provide a greater incentive to carriers to 

reduce the number of persons 

involuntarily bumped from their flights. 

Following promulgation of the 

amendment to the rule in 1978 requiring 

the solicitation of volunteers and 

doubling the compensation maximum, 

the overall industry rate of involuntary 

denied boardings per 10,000 

enplanements in fact declined for many 

years. Until 2007, the rate for the past 

decade has been slightly below the level 

of involuntary bumping reported 10 

years ago. In this regard, 55,828 

passengers were involuntarily bumped 

from their flights in 2006 on the 19 

largest U.S. airlines (carriers whose 

denied boarding rate is tracked in the 

Department’s monthly Air Travel 

Consumer Report 2). Additional 

passengers were bumped by other 

airlines, whose denied boarding rate is 

not tracked in this report but whose 

bumped passengers are subject to the 

compensation rates in the DOT rule. 

The annual rate of involuntary denied 

boardings per 10,000 enplanements for 

the carriers tracked in the report has 

increased in each of the past three years 

and in 2007 was at the highest level in 

the past ten years. Involuntary denied 

boarding rates from the Air Travel 

Consumer Report for that period appear 

below: 

Year 

Invol. DB’s 

per 10,000 

passengers 

1997 ...................................... 1.06 

1998 ...................................... 0.87 

1999 ...................................... 0.88 

2000 ...................................... 1.04 

2001 ...................................... 0.82 

2002 ...................................... 0.72 

Year 

Invol. DB’s 

per 10,000 

passengers 

2003 ...................................... 0.86 

2004 ...................................... 0.86 

2005 ...................................... 0.89 

2006 ...................................... 1.01 

2007 ...................................... 1.12 

Likely contributing to this upward 

trend is the fact that flights are fuller: 

from 1978 to 2006 the system-wide load 

factor (percentage of seats filled) for U.S. 

airlines increased from 61.5% to 79.2%, 

with most of this increase taking place 

since 1994. The most-recently reported 

monthly load factors have been in the 

mid-80% range. 

With respect to the denied boarding 

compensation limits, inflation has 

eroded the value of the $200 and $400 

limits that were established in 1978. 

Using the Consumer Price Index for All 

Urban Consumers (CPI–U, the basis for 

the inflation adjustor in the 

Department’s domestic baggage liability 

rule, 14 CFR 254.6), $400 in 1978 was 

worth $128 at the time of the NPRM 

($125 today). See the Bureau of Labor 

Statistics Inflation Calculator at http:// 

www.bls.gov/cpi/home.htm. Stated 

another way, in order to have the same 

purchasing power today as in 1978, 

$400 would have needed to be $1,248 as 

of the time of the NPRM ($1,272 today). 

At the same time, however, air fares 

have not risen to the same extent as the 

CPI–U. While historical comparisons of 

air fares are problematic, one frequentlyused index for changes in air fares is 

passenger yield. Yield is passenger 

revenue divided by revenue passenger 

miles—the revenue collected by airlines 

for carrying one passenger for one mile. 

According to the Air Transport 

Association, system-wide nominal yield 

(i.e., not adjusted for inflation) for all 

reporting U.S. air carriers was 8.29 cents 

per revenue passenger mile in 1978 and 

12.69 cents per revenue passenger mile 

in 2006 (latest available data)—an 

increase of 53.1% from the 1978 figure. 

Applying the CPI–U calculation to the 

current $200 and $400 DBC limits that 

were established in 1978 would have 

produced updated limits of $624 and 

$1,248, respectively, at the time of the 

NPRM. However, the NPRM noted that 

applying the 53.1% increase in 

passenger yield through 2006 to the 

current $200 and $400 limits would 

have produced updated limits of $306 

and $612. It is important to note that the 

$200 and $400 figures in Part 250 are 

merely limits on the amount of denied 

boarding compensation required under 

the rule; the compensation rate is 100% 

or 200% of the passenger’s fare 

(depending on how long he or she was 

delayed by the bumping). In the 

ANPRM, the Department requested 

comment on whether the maximums in 

the rule should be increased so that that 

a higher percentage of denied boarding 

compensation payments are not 

‘‘capped’’ by the limits. 

In the ANPRM the Department sought 

comment on five options with respect to 

the monetary limits on denied boarding 

compensation—increasing the limits 

based on the CPI–U or on the increase 

in fare yields, doubling the current 

limits, eliminating the limits (i.e., so 

there would be no cap on denied 

boarding compensation payments), or 

making no change to the current limits. 

In the NPRM the Department proposed 

to amend the oversales rule to double 

the limits on involuntary denied 

boarding compensation from $200 to 

$400 for passengers who are rerouted 

within two hours (four hours 

internationally) and from $400 to $800 

for passengers who are not rerouted 

within these timeframes. As many 

commenters to the ANPRM pointed out, 

there is a significant air-fare component 

to the denied boarding compensation 

formula (100%/200% of the bumped 

passenger’s fare), and air fares have 

risen less than the CPI. As indicated 

above, system-wide nominal yield (not 

adjusted for inflation) for all reporting 

U.S. air carriers, which is a frequently 

used index for changes in air fares, was 

8.29 cents per revenue passenger mile in 

1978 and 12.69 cents per revenue 

passenger mile in 2006, an increase of 

53.1%. Nonetheless, we did not propose 

the ‘‘fares/yield’’ option from the 

ANPRM as the sole method for updating 

the compensation caps. 

Denied boarding compensation is 

intended in part to compensate for the 

passenger’s inconvenience, lost time, 

and lost opportunities. The value of 

these considerations is linked to general 

inflation as well as to the cost of air 

fares. Therefore, the arguments of the 

carrier organizations about the decline 

in real (i.e., inflation-adjusted) air fares 

during that period are somewhat off the 

mark, because consumers live with 

some of the consequences of denied 

boarding in today’s dollars, not 1978 

dollars. As we indicated in the ANPRM, 

30 years of inflation have taken their toll 

on the value of the existing limits. As 

noted above, $400 in 1978 was worth 

$128 at the time of the NPRM, based on 

the change in the CPI–U. Therefore, we 

proposed to base part of an increase in 

the compensation caps on the CPI–U. 

By doubling the existing limits we 

would blend these two approaches. The 

limits proposed in the NPRM fall 

between the higher figures that would 

be produced by the CPI option and the 


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Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 21029 

3See http://www.raa.org. 

lower numbers that would result from 

the ‘‘fares/yield’’ option. We sought 

comment on this proposal, including 

any comments and justifications that 

were not already provided in response 

to the ANPRM about alternative 

amounts or methodologies. 

It is important to note that this 

proposal concerning limits on 

compensation for involuntary denied 

boardings would not necessarily require 

carriers to offer more compensation to 

the great majority of passengers affected 

by overbooking because most such 

situations are handled through 

volunteers who agree to give up their 

seat in exchange for mutually-agreed 

compensation, typically at the departure 

gate. Nor would it affect the significant 

proportion of involuntarily bumped 

passengers—possibly the majority—

with fares low enough that the formula 

for involuntary denied boarding 

compensation would not exceed the 

current limits. Finally, even with 

respect to involuntarily bumped 

passengers whose denied boarding 

compensation might increase with 

higher maximums, many such 

passengers accept a voucher for future 

travel on that airline (often in a face 

amount greater than the legally required 

denied boarding compensation) in lieu 

of a check. Carriers make such offers 

because vouchers do not entail the same 

cost as cash compensation given rates of 

non-use and inventory-management 

restrictions. 

Comments 

Our proposal to double the denied 

boarding compensation limits was 

endorsed by the American Society of 

Travel Agents (ASTA), the Airports 

Council International—North America 

(ACI–NA), the Aviation Consumer 

Action Project (ACAP), the Coalition for 

an Airline Passenger Bill of Rights 

(CAPBOR), Jet Airways (India), and all 

of the individuals who commented on 

this issue. ACAP also endorsed a 

minimum DBC amount of $100. ASTA 

remarked that the reasoning in the 

Regulatory Evaluation is sound and 

suggested that for lengthy delays (e.g., 

next day), DBC should be higher, e.g. 

perhaps based on the CPI concept. ACI–

NA asserted that incentives against 

unreasonable overbooking levels must 

remain effective because current high 

load factors make rerouting more 

difficult. The National Business Travel 

Association (NBTA) favored an increase 

in DBC limits but believed that the 

Department’s proposal did not go far 

enough—the Association noted that 

business travelers often pay high fares 

and book peak flights that it contended 

are more likely to be oversold and 

consequently favored limits of $400/ 

$800 (the NPRM proposal) or half of that 

passenger’s fare, whichever is higher. 

The Air Transport Association stated 

that it did not oppose the basic elements 

of the NPRM but had objections to 

certain proposals (see below) that were 

not related to the adjustment of the 

compensation limits. 

The proposal to double the limits was 

opposed by most other organizations 

that commented on this issue. (No 

individual commenters opposed the 

proposal, although one felt that the 

limits should be removed altogether and 

several said that overbooking should be 

banned.) The Air Carrier Association of 

America (ACAA) stated that the 

increased limits are unfair to smaller 

carriers that have fewer rerouting 

options that would permit them to limit 

DBC to the 100% rate. ACAA said that 

the limits should be increased no more 

than 25%, although it gave no basis for 

this figure. The Regional Airline 

Association (RAA) said that involuntary 

denied boardings are rare and the 

current system is working, but if the 

limits are increased the adjustment 

should be based on historical increases 

in fares/yield rather than $400/$800. 

The National Air Carrier Association 

said that the limits should be increased 

only for carriers that consistently bump 

a high number of passengers. Delta Air 

Lines stated that there is no justification 

for an increase in the limits, but echoed 

RAA’s contention (as did China Eastern 

Airlines) that any increase that does 

take place should be based on increases 

in fares rather than the $400/$800 

proposal. Philippine Airlines wanted an 

increase of no more than 10%. 

Response to Comments 

After careful consideration of all of 

the comments, we have decided to 

double the current DBC limits as 

proposed. The limits have not been 

adjusted in nearly 30 years, and the 

purchasing power of the limits has 

eroded. Air fares have increased by 

more than 50% in that time, and thus 

a higher percentage of bumped 

passengers is undoubtedly having their 

DBC capped at a figure lower than the 

100% or 200% DBC rate. The 

Department has been urged to 

reexamine the limits by the Senate, the 

Department’s Inspector General, and the 

airlines themselves (see ATA’s petition 

for rulemaking in this proceeding). As 

ACI–NA noted in its comments, 

unrealistic deterrents in the rule could 

produce more oversales—and indeed 

the rate of involuntary denied boardings 

has increased 30% in the past three 

years. Carriers whose schedules make it 

difficult to reroute passengers in time to 

limit DBC to the 100% rate are 

nonetheless in control of their 

overbooking rates and of the 

attractiveness of the compensation that 

they offer to prospective volunteers. 

With respect to the comments that urge 

us to base the increase in the limits 

solely on the increase in fares/yields, as 

noted above, denied boarding 

compensation is intended in part to 

compensate for the passenger’s 

inconvenience, lost time, and lost 

opportunities, and the value of these 

considerations is linked to general 

inflation as well as to the cost of air 

fares. 

The Small-Aircraft Exclusion 

The oversales rule originally issued 

by the CAB did not contain an exclusion 

for small aircraft. In 1981 that agency 

amended Part 250 to exclude operations 

with aircraft seating 60 or fewer 

passengers. The CAB determined that 

without this exclusion the denied 

boarding rule imposed a proportionately 

greater financial and operational burden 

on these small-aircraft operators than on 

carriers operating larger aircraft. In 

addition, because of the lower revenues 

generated by these small aircraft, the 

financial burden of denied boarding 

compensation placed certificated 

carriers operating aircraft with 60 or 

fewer seats at a competitive 

disadvantage relative to commuter 

carriers (non-certificated) operating 

similar equipment and on similar routes 

which were not subject to Part 250. The 

number of flights that was excluded by 

the amendment was small and most 

such flights were operated by small 

carriers that operated small aircraft 

exclusively. Thus, Part 250 currently 

applies to certificated U.S. carriers and 

foreign carriers holding a permit, or 

exemption authority, issued by the 

Department, only with respect to 

operations performed with aircraft 

seating more than 60 passengers. 

The majority of the aircraft operated 

by the regional airline industry have 60 

or fewer seats and thus are exempt from 

the denied boarding rule. However, this 

sector has experienced tremendous 

growth. According to the Regional 

Airline Association 3, passenger 

enplanements on regional carriers have 

increased more than 100% since 1995, 

and regional airlines now carry one out 

of every five domestic air travelers in 

the United States. RAA states that 

revenue passenger miles on regional 

carriers have increased 40-fold since 

1978 and increased 17 percent from 

2004 to 2005 alone. As noted in the 

NPRM, regional jets have fueled much 


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4 DOT Form 41, schedule T–100. 

of the recent growth. According to RAA, 

from 1989 to 2004 the number of 

turbofan aircraft (regional jets) in the 

regional-airline fleet increased from 54 

to 1,628 and regional jets now make up 

59% of the regional-carrier fleet. 

Although many regional jets have more 

than 60 passenger seats and thus are 

subject to Part 250, the ubiquitous 50- 

seat and smaller regional jet models 

have driven much of the growth of the 

regional-carrier sector. Moreover, most 

regional jets are operated by regional 

carriers affiliated with a major carrier 

via a code-share agreement, a fee-forservice arrangement, and/or an equity 

stake in the regional carrier. RAA asserts 

that 99% of regional airline passengers 

traveled on code-sharing regional 

airlines in 2005. 

DOT statistics also demonstrate the 

growth in traffic on flights operated by 

aircraft with 31 through 60 seats. From 

the fourth quarter (4Q) of 2002 (earliest 

available consistent data) to 4Q2006, the 

number of flights using aircraft with 31 

through 60 seats increased by 13.5% 

while the number of flights using 

aircraft with more than 60 seats rose 

only 3.4%. The number of passengers 

carried on flights using aircraft with 31 

through 60 seats increased by 34.9% 

from 4Q 2002 through 4Q 2006, while 

the number of passengers carried on 

flights using aircraft with more than 60 

seats rose by only 12.1% during that 

period.4

As noted in the NPRM, the increased 

use of jet aircraft in the 30-to-60 seat 

sector accompanied by the increase in 

the ‘‘branding’’ of those operations with 

the codes and livery of major carriers 

has blurred the distinction between 

small-aircraft and large-aircraft service 

in the minds of many passengers. There 

would seem to be little, if any, 

difference to a consumer bumped from 

a small aircraft or a large aircraft—the 

effect is the same. Therefore, the NPRM 

proposed to extend the applicability of 

the oversales rule to flights using 

aircraft having 30 or more seats. 

Comments 

This proposal was supported by the 

ACAA, NBTA, ACI–NA, and by the two 

individuals who commented on this 

issue. ACAA stated that the current 

exclusion for these aircraft is unfair to 

smaller carriers that do not have aircraft 

of a size that benefit from the exclusion. 

The initiative was opposed by RAA, 

Delta Air Lines, and Peninsula Airways. 

RAA said that the proposal would have 

disparate cost impact on regional 

carriers that cannot always raise fares 

due to competition from automobiles. 

RAA asserted that cost increases will 

cause marginal routes to be dropped, 

reducing competition and leaving some 

small points without service. The 

organization was concerned that DBC on 

connecting flight may exceed a regional 

carrier’s fare. It noted that the small 

aircraft and short runways frequently 

used by regional carriers cause seats to 

be figuratively ‘‘roped off’’ (i.e., to have 

to exclude passengers from those seats) 

for safety-related weight/balance 

reasons more frequently than is the case 

for larger aircraft, but under the current 

rule DBC must still be paid. Delta also 

noted this latter issue and suggested that 

if this proposal is finalized, the 

Department should amend the 

‘‘substitution of equipment’’ exception 

to DBC to include passengers bumped as 

a result of the need to limit payload for 

safety-related weight/balance reasons. 

Peninsula Airways (an Alaskan 

operator) stated that aircraft with less 

than 35 seats should remain excluded 

from the rule, but if the proposal to 

include aircraft with 30–60 seats is 

adopted, the rule should exclude 

commuter operations with propeller 

aircraft solely within the state of Alaska. 

This would capture regional jets, the 

commenter noted, while maintaining 

the current relief for small turboprops. 

Peninsula contended that this is 

justified for the same reasons that CAB 

originally excluded aircraft with 60 

seats or less. Peninsula also disputed 

the statement in the NPRM that on a 

codeshare ‘‘the major carrier is 

responsible for providing denied 

boarding compensation on the flights of 

the smaller carrier.’’ Peninsula says that 

this is true only on fee-for-service 

arrangements, and Peninsula uses a prorate system. 

Response to Comments 

For the reasons described above, we 

are extending the applicability of the 

oversales rule to flights using aircraft 

with 30 or more passenger seats. Since 

the time that the CAB exempted this 

sector of the industry from the rule in 

1981, the vast majority of operations at 

this level has become affiliated and 

integrated with the ‘‘brand’’ of a major 

carrier. In recent times, aircraft with 30 

through 60 seats (to a large extent 

regional jets) have been substituted for 

larger airplanes on numerous routes. 

The great majority of the traffic that 

would be covered by this initiative is 

carried by airlines that are owned by or 

affiliated with a major carrier or its 

parent company. In its comments on the 

ANPRM, JetBlue asserted that 57% of 

the flights operated in August 2007 for 

American, Continental, Delta, 

Northwest, United and U.S. Airways 

were on regional jets. Some of those 

regional jets no doubt have more than 

60 seats and thus are already subject to 

the oversales rule, but many are not. In 

its comments on the ANPRM, ACAA 

provided data showing that regional jets 

account for half or nearly half of all 

departures at most hub airports. 

A significant amount, if not most, of 

the service on small-aircraft flights 

operated for major carriers is provided 

under a ‘‘fee-for-service’’ arrangement 

such as Peninsula Airways referred to, 

where a major carrier dictates the 

market, the schedule, and the price of 

the flight. Under such an arrangement 

the tickets are not sold under the 

regional carrier’s code, so that the 

passenger’s contract of carriage covering 

the transportation is solely with the 

major carrier. In such circumstances, the 

flights are for purposes relevant to this 

rule flights of the major carrier, not the 

regional airline, in which case the major 

carrier is responsible for providing 

denied boarding compensation on the 

flights of the smaller carrier. 

As a result of changes in the 

marketplace, we now believe that 

consumers who purchase transportation 

in this aircraft class are entitled to the 

protections of the oversales rule. 

Carriers that use small aircraft to operate 

flights for a major carrier can protect 

themselves contractually by negotiating 

a mutually acceptable sharing of risk 

with the major airline. However, we are 

sensitive to the operational challenges 

faced by operators of aircraft with 30 

through 60 seats. As certain commenters 

noted, these aircraft are more 

susceptible than larger airplanes to the 

need to limit payload in certain 

situations, typically hot weather, 

especially at higher altitudes. These 

situations, which cannot be reliably 

forecast when reservations are being 

taken weeks and months in advance, 

sometimes cause passengers to have to 

be bumped. Consequently, as suggested 

by Delta, we will revise the existing 

DBC exception in our oversales rule for 

substitution of aircraft of lesser capacity 

to include situations where the aircraft 

is not substituted, but payload must be 

limited for safety reasons and 

passengers are bumped as a result. We 

expect carriers to keep adequate records 

that will demonstrate the legitimate use 

of this exception to DBC when it is 

employed. Consistent with our 

obligations under the Regulatory 

Flexibility Act to assess the impact of 

rules on operators of aircraft having 60 

or fewer seats (see 14 CFR 399.73), this 

new relief will be limited to flights 

operated with aircraft having 60 or 

fewer seats. Larger aircraft are affected 

by unpredictable payload restrictions 


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less often, and operators of those aircraft 

are not the subject of the Regulatory 

Flexibility Act. 

We will not exempt flights using 

aircraft with less than 35 seats or 

commuter-carrier operations using 

propeller aircraft solely within the state 

of Alaska, as was suggested by 

Peninsula Airways. We believe that 

carriers serving Alaska have sufficient 

experience with the operational 

considerations in that environment to be 

able to implement overbooking practices 

that do not expose the carrier to undue 

risk, and we are reluctant to deny 

Alaskan travelers the benefits of the 

rule. The new exemption for denied 

boardings caused by safety-related 

payload restrictions on flights using 

aircraft with 60 or fewer seats (see 

above) should address many of the 

situations about which Peninsula was 

concerned. 

Boarding Priorities 

Boarding priority rules determine the 

order in which various categories of 

passengers will be involuntarily 

bumped when a flight is oversold. Part 

250 states that boarding priority rules 

must not provide any undue or 

unreasonable preference. The IG in his 

2000 report identified possible 

ambiguities in the Department’s 

requirements regarding boarding 

priority rules, and he recommended that 

we provide examples of what we 

consider to be an undue or unreasonable 

preference. The IG was also concerned 

that the amounts of compensation 

provided passengers who are 

involuntarily bumped was in some 

cases less than the face value of 

vouchers given to passengers who 

volunteer to give up their seats. He 

therefore recommended, in addition to 

raising the maximum compensation 

amounts for involuntarily bumped 

passengers, as discussed above, that we 

require carriers to disclose orally to 

passengers, at the time the airline makes 

an offer to volunteers, what the airline 

is obligated to pay passengers who are 

involuntarily bumped. 

Our boarding priority requirement 

was designed to give carriers the 

maximum flexibility to set their own 

procedures at the gate, while affording 

consumers protection against unfair and 

unreasonable practices. Thus, the rule 

(1) requires that airlines establish their 

own boarding priority rules and criteria 

for oversale situations consistent with 

Part 250’s requirement to minimize 

involuntary bumpings and (2) states that 

those boarding priority rules and criteria 

‘‘shall not make, give, or cause any 

undue or unreasonable preference or 

advantage to any particular person or 

subject any particular person to any 

unjust or unreasonable prejudice or 

disadvantage in any respect 

whatsoever.’’ (14 CFR 250.3(a)) 

Although we are not aware of any 

problems resulting from this rule as 

written, we agree that guidance 

regarding this provision would be useful 

to the industry and public alike. In the 

NPRM we requested comment on 

whether the Department should list in 

the rule, as examples of permissible 

boarding priority criteria, the following: 

• A passenger’s time of check in 

(first-come, first-served); 

• Whether a passenger has a seat 

assignment before reaching the 

departure gate for carriers that assign 

seats; 

• A passenger’s fare; 

• A passenger’s frequent flyer status; 

and 

• Special priorities for passengers 

with disabilities, within the meaning of 

14 CFR Part 382, or for unaccompanied 

minors. 

We stated that the five examples 

proposed here are illustrative only, and 

not exclusive. We did not intend by 

these examples to foreclose the use by 

carriers of other boarding priorities that 

do not give a passenger undue 

preference or unjustly prejudice any 

passenger. 

Comments 

Philippine Airlines and ACI–NA 

favored the proposal. RAA said that it 

is not necessary but that the 

organization did not oppose it. ASTA 

opposed the proposal, stating that 

passengers with low fares or no 

frequent-flyer miles on that carrier are 

no less inconvenienced by bumping and 

should not be singled out. 

Response to Comments 

For the reasons described above, we 

will adopt this proposal. With respect to 

ASTA’s comment, airlines set their own 

boarding priorities and the longstanding 

ability of airlines to have boarding 

priorities based on passengers’ fares or 

frequent-flyer status is not at issue in 

this proceeding. Airlines have had such 

boarding priorities for years, and the 

Department has not found this to be 

inconsistent with the mandate in 

section 14 CFR 250.3(a) described 

above. The proposal in this proceeding 

is simply intended to clarify and 

provide improved access to this policy 

by including it in the rule. 

Notice to Volunteers 

Accurately notifying passengers of 

their rights in an oversale situation is 

important, so that they can make an 

informed decision. Part 250 already 

contains requirements designed to 

accomplish that objective and to protect 

passengers from being involuntarily 

bumped if they have not been accorded 

adequate notice. Section 250.2b(b) 

prohibits a carrier from denying 

boarding involuntarily to any passenger 

who was earlier asked to volunteer 

without having been informed about the 

danger of being denied boarding 

involuntarily and the amount of 

compensation that would apply if that 

occurred. While this provision would 

appear to provide adequate incentive for 

airlines to provide complete notice to 

passengers who are asked to volunteer, 

and to protect those passengers not 

provided such notice, we saw some 

merit in the suggestion to make this 

notice requirement more direct. 

Accordingly, in the NPRM we sought 

comment on whether we should amend 

section 250.2b to affirmatively require 

that, no later than the time a carrier asks 

a passenger to volunteer, it inform that 

person whether he or she is in danger 

of being involuntarily bumped and, if 

so, the compensation the carrier is 

obligated to pay. 

Comments 

RAA and ATA strongly objected to 

this proposal. Both organizations said 

that it is unrealistic and would impede 

passenger processing at airports without 

providing any consumer benefit. RAA 

asserted that it would be highly 

burdensome to determine the risk to 

each prospective volunteer of being 

bumped involuntarily and would 

increase delays at the gate. Most carriers 

make general announcements rather 

than soliciting individual passengers, 

RAA claimed, and individual presolicitation notice is impossible in those 

circumstances. ATA said that volunteers 

have already decided to give up their 

reservation in exchange for the offered 

compensation, and the risk of being 

bumped is irrelevant. 

The Aviation Consumer Action 

Project said that potential volunteers 

should be given a written statement 

summarizing the DOT rule, with 

monetary penalties payable to the 

passenger if this is not done. 

There were no individual consumer 

comments on this issue. 

Response to Comments 

For the reasons summarized above, 

and consistent with the 

recommendation of the IG, we will 

finalize the proposal. Commenters’

concerns about the practicality of the 

provision appear to result from a 

misunderstanding of what we proposed. 

Informing a prospective volunteer 

‘‘whether he or she is in danger of being 


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involuntarily denied boarding’’ need not 

entail a precise calculation of the 

probability of that person being 

involuntarily bumped. Carriers may still 

make general announcements seeking 

volunteers and, if the need arises to 

accept the offer of any of those who 

indicate a willingness to volunteer, it 

would be sufficient for a carrier to tell 

a volunteer just before handing him or 

her the volunteer compensation that 

there is a reasonable chance that he or 

she may have been bumped 

involuntarily (if that is true), and if that 

were to be the case the compensation 

would be $X. The oversales regimen 

relies in large part on consumers being 

able to make informed decisions and 

this is no more than what is required 

under the current rule. 

Reporting 

Section 250.10 of the current rule 

requires all carriers that are subject to 

Part 250 to file a quarterly report (Form 

251) on oversale activity. Due to staffing 

limitations, for many years the only 

carriers whose oversale data have been 

routinely reviewed, entered into an 

automated system, or published by the 

Department are the airlines that are 

subject to the on-time performance 

reporting requirement. Those are the 

U.S. carriers that each account for at 

least 1 percent of total domestic 

scheduled-service passenger revenues—

currently 20 airlines (see 14 CFR 234). 

For a current list of these carriers, see 

the Department’s Air Travel Consumer 

Report at http:// 

airconsumer.ost.dot.gov/reports/ 

index.htm. This report provides data for 

these airlines in four areas: On-time 

performance, baggage mishandling, 

oversales, and consumer complaints. 

The oversale data for that report are 

derived from the Form 251 reports 

mandated by Part 250. The data in the 

Form 251 reports filed by the other 

carriers is not keypunched, 

summarized, published, or routinely 

reviewed. 

In the NPRM the Department 

proposed to revise section 250.10 to 

relieve all carriers of this reporting 

requirement except for the airlines 

whose data is being used, i.e., U.S. 

carriers reporting on-time performance 

under Part 234. Those airlines account 

for the vast majority of domestic traffic 

and bumpings, so the Department 

would still receive adequate information 

and the public would continue to have 

access to published data for the same 

category of carriers as before. Such 

action would be consistent with the 

Paperwork Reduction Act and the 

Regulatory Flexibility Act. It would also 

result in consistent carrier reporting 

requirements for all four sections of the 

Air Travel Consumer Report. 

Comments 

Three airlines and two airline 

associations commented on this issue; 

all of them favored the proposal. 

Response to Comments 

For the reasons summarized above, 

we will revise the rule to relieve all 

carriers of this reporting requirement 

except for ‘‘reporting carriers’’ as 

defined in 14 CFR 234.2 and any carrier 

that voluntarily submits data pursuant 

to section 234.7 of that part. At the 

present time this is 20 airlines. The 

carriers that are being relieved of this 

requirement need not file a Form 251 

report for the quarter during which this 

amendment goes into effect. 

All other comments on the various 

issues in this proceeding were beyond 

the scope of the NPRM. 

Overbooking Notice 

Section 250.11 specifies the text of a 

notice that carriers must use on signs at 

ticket-selling locations and in notices 

accompanying tickets to disclose 

overbooking and describe denied 

boarding procedures. One portion of 

this notice states that there are 

exceptions to the requirement to pay 

denied boarding compensation. In the 

NPRM we proposed to revise that 

section of the notice to state that failing 

to comply with the carrier’s check-in 

deadline is one such exception and to 

require carriers to either include their 

check-in deadline in the notice or state 

in the notice that the airline’s check-in 

deadline is available upon request from 

the carrier. 

Comments 

The Air Transport Association 

objected to this proposal. It said that 

check-in times can vary, especially 

between domestic and international 

operations; that the information is 

available on carriers’ Web sites; that air 

travelers have become used to checking 

in early since 9/11; and that most of the 

notices would be displayed at airports 

and by the time a traveler sees the 

notice at the airport it is too late. 

Response to Comments 

We have decided to finalize the 

proposal. We believe that it is important 

for consumers to be aware that missing 

the carrier’s check-in deadline 

disqualifies them from eligibility for 

denied boarding compensation if they 

should be involuntarily denied 

boarding. A great deal of consumer 

information is available on carrier Web 

sites, but this does not obviate the 

usefulness of affirmatively pointing out 

key information in notices of this type. 

Airlines that find it burdensome to 

include their specific check-in 

deadline(s) in the notice can simply 

state that the deadlines are available 

from the carrier upon request, as stated 

in the NPRM. Finally, this revised 

notice is not limited to airports; 

pursuant to section 250.11(b) of the 

existing rule (which is not being 

revised), the sec. 250.11(a) notice 

described in the NPRM must also 

accompany tickets. 

Technical Changes 

We are revising the definition of 

‘‘Carrier’’ in section 250.1 to (1) 

explicitly include commuter air carriers 

(with respect to the extension of the rule 

to flights using aircraft with 30 through 

60 seats), (2) remove citations to the 

Federal Aviation Act, a statute that no 

longer exists under that name, and (3) 

reduce the range of sections cited in this 

definition as the source of DOT 

authority for foreign air carriers to the 

one section that is most applicable. (The 

other sections cited in the foreigncarrier citation are procedural in nature 

and are not necessary in this definition.) 

Regulatory Notices 

A. Executive Order 12866 (Regulatory 

Planning and Review) and DOT 

Regulatory Policies and Procedures 

This action has been determined to be 

significant under Executive Order 12866 

and the Department of Transportation 

Regulatory Policies and Procedures. It 

has been reviewed by the Office of 

Management and Budget under that 

Order. A discussion of possible costs 

and benefits of the proposed rule is 

presented in the preamble and in the 

accompanying Regulatory Evaluation, a 

copy of which has been placed in the 

docket. The Regulatory Evaluation 

concluded that the benefits of the rule 

appear to exceed the costs. It noted that 

the absolute number of involuntary 

denied boardings, the rate of such 

denied boardings per 10,000 

enplanements and the ratio of 

involuntary to voluntary denied 

boardings have all increased 

substantially in recent years, suggesting 

that the 30-year-old caps on involuntary 

denied boarding compensation that are 

being updated here have been 

encouraging carriers to resort to 

involuntary denied boardings more 

frequently. The average one-way fare 

(all domestic and international flights) 

was $232 in the 2nd Quarter of 2007, 

above the $200 compensation limit that 

pertains to the 2-hour deadline. Due to 

the regulatory caps on denied boarding 


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Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 21033 

compensation, a passenger flying at or 

above an above-average fare will not 

receive the full amount of compensation 

derived from the fare-based formula in 

the rule. Similarly, the air carriers are 

not subject to the disincentive of the 

loss of a higher-than-average fare if a 

passenger is bumped. 

The added cost of doubling of the 

denied boarding compensation caps 

would be approximately four cents per 

passenger even if every single passenger 

who is involuntarily denied boarding 

receives the maximum compensation 

(which is not the case). The monetary 

cost for this option would result in a 

corresponding dollar-for-dollar 

monetary benefit for the bumped 

passengers. It is not expected that an 

additional four-cent charge on a $200 

ticket would make a material difference 

in ticket demand or air carrier net 

revenues from ticket sales. 

B. Executive Order 13132 (Federalism) 

This Final Rule has been analyzed in 

accordance with the principles and 

criteria contained in Executive Order 

13132 (‘‘Federalism’’). This amendment 

does not: (1) Have a substantial direct 

effect on the States, the relationship 

between the national government and 

the States, or the distribution of power 

and responsibilities among the various 

levels of government; (2) impose 

substantial direct compliance costs on 

State and local governments; or (3) 

preempt state law because states are 

already preempted from regulating in 

this area under the Airline Deregulation 

Act (ADA), 49 U.S.C. 41713. Therefore, 

the consultation and funding 

requirements of Executive Order 13132 

do not apply. 

C. Executive Order 13084 

This Final Rule has been analyzed in 

accordance with the principles and 

criteria contained in Executive Order 

13084 (‘‘Consultation and Coordination 

with Indian Tribal Governments’’). 

Because nothing in this rule would 

significantly or uniquely affect the 

communities of the Indian tribal 

governments and would not impose 

substantial direct compliance costs, the 

funding and consultation requirements 

of Executive Order 13084 do not apply. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires an agency to 

review regulations to assess their impact 

on small entities unless the agency 

determines that a rule is not expected to 

have a significant economic impact on 

a substantial number of small entities. 

Certain elements of this rule may 

impose new requirements on certain 

small air carriers, but the Department 

believes that the economic impact will 

not be significant. All air carriers have 

control over the extent to which the rule 

impacts them because they control their 

own overbooking rates. Carriers can 

mitigate the cost of denied boarding 

compensation by obtaining volunteers 

who are willing to give up their seat for 

less (or different) compensation than 

what the rule mandates for passengers 

who are bumped involuntarily, and by 

offering travel vouchers in lieu of cash 

compensation. 

The vast majority of the traffic that 

will be covered by the oversales rule for 

the first time as a result of this 

amendment is carried by airlines that 

are owned by or affiliated with a major 

carrier or its parent company. Moreover, 

a significant amount, if not most, of the 

service on such flights is provided 

under a ‘‘fee-for-service’’ arrangement, 

where a major carrier dictates the 

market, the schedule, and the price of 

the flight. Under such an arrangement 

the tickets are not sold under the 

regional carrier’s code, so that the 

passenger’s contract of carriage covering 

the transportation is solely with the 

major carrier. In such circumstances, the 

flights are, for all legal and practical 

purposes, flights of the major carrier, 

not the regional airline, in which case 

the major carrier is responsible for 

providing denied boarding 

compensation on the flights of the 

smaller carrier. The monetary costs of 

most of these options result in a 

corresponding dollar-for-dollar 

monetary benefit for members of the 

public who are bumped from their 

confirmed flights and for small 

businesses that employ some of them. 

The options provide an economic 

incentive for carriers to use more 

efficient overbooking rates that result in 

fewer bumpings while still allowing the 

carriers to fill seats that would go 

unsold as the result of ‘‘no-show’’

passengers. At the same time, this final 

rule provides that the oversales 

requirements will not apply when a 

passenger is denied boarding on an 

aircraft with a designed capacity of 30 

through 60 passenger seats due to a 

need to reduce the number of 

passengers for safety purposes (e.g., 

weight/balance, maximum takeoff 

weight). This exemption greatly reduces 

the financial burden of the oversales 

rule on operators of small aircraft , 

whether by small entities (who by 

definition only operate aircraft of 60 

seats or fewer) or other carriers. This is 

particularly true with respect to events 

that are not easy to predict at the time 

reservations are taken (e.g., hot weather) 

that affect safety-related payload limits. 

Finally, it is worth noting that one 

provision in this Final Rule relieves an 

existing reporting requirement for all 

but the largest carriers. For all these 

reasons, I certify that this rule will not 

have a significant economic impact on 

a substantial number of small entities. 

E. Paperwork Reduction Act 

DOT has long-standing OMB 

clearance for the reporting requirements 

in Part 250 (OMB No. 2138–0018). Prior 

to issuance of this final rule, we 

estimated a reporting burden of 1600 

hours annually for 40 U.S. carriers and 

600 hours annually for 100 foreign 

carriers. This final rule is reducing 

reporting requirements so that only 20 

U.S. carriers will continue to report 

denied boarding information for a total 

of 800 hours annually. We will modify 

our paperwork inventory for this rule 

accordingly. 

F. Unfunded Mandates Reform Act 

The Department has determined that 

the requirements of Title II of the 

Unfunded Mandates Reform Act of 1995 

do not apply to this notice. 

List of Subjects in 14 CFR Part 250 

Air carriers, Consumer protection, 

Reporting and recordkeeping 

requirements. 

■ For the reasons set forth in the 

preamble, we amend 14 CFR Part 250 as 

follows: 

PART 250—[AMENDED] 

■ 1. The authority citation for part 250 

continues to read as follows: 

Authority: 49 U.S.C. Chapters 401, 411, 

413, 417. 

■ 2. In § 250.1 the definition for ‘‘Large 

aircraft’’ is removed and the definition 

for ‘‘Carrier’’ is revised to read as 

follows: 

§ 250.1 Definitions. 

* * * * * 

Carrier means: (1) a direct air carrier, 

except a helicopter operator, holding a 

certificate issued by the Department of 

Transportation pursuant to 49 U.S.C. 

41102 or that has been found fit to 

conduct commuter operations under 49 

U.S.C. 41738, or an exemption from 49 

U.S.C. 41102, authorizing the scheduled 

transportation of persons; or (2) a 

foreign air carrier holding a permit 

issued by the Department pursuant to 49 

U.S.C. 41302, or an exemption from that 

provision, authorizing the scheduled 

foreign air transportation of persons. 

* * * * * 

■ 3. Section 250.2 is revised to read as 

follows: 


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21034 Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 

§ 250.2 Applicability. 

This part applies to every carrier, as 

defined in § 250.1, with respect to 

scheduled flight segments using an 

aircraft that has a designed passenger 

capacity of 30 or more passenger seats, 

operating in (1) interstate air 

transportation or (2) foreign air 

transportation with respect to nonstop 

flight segments originating at a point 

within the United States. 

■ 4. In § 250.2b, paragraph (b) is 

amended by removing the last sentence 

and by adding a new first sentence to 

read as follows: 

§ 250.2b Carriers to request volunteers for 

denied boarding. 

* * * * * 

(b) Every carrier shall advise each 

passenger solicited to volunteer for 

denied boarding, no later than the time 

the carrier solicits that passenger to 

volunteer, whether he or she is in 

danger of being involuntarily denied 

boarding and, if so, the compensation 

the carrier is obligated to pay if the 

passenger is involuntarily denied 

boarding. * * * 

■ 5. In § 250.3 paragraph (b) is added to 

read as follows: 

§ 250.3 Boarding priority rules. 

* * * * * 

(b) Boarding priority factors may 

include, but are not limited to, the 

following: 

(1) A passenger’s time of check-in; 

(2) Whether a passenger has a seat 

assignment before reaching the 

departure gate for carriers that assign 

seats; 

(3) The fare paid by a passenger; 

(4) A passenger’s frequent-flyer status; 

and 

(5) A passenger’s disability or status 

as an unaccompanied minor. 

■ 6. Section 250.5(a) is revised to read 

as follows: 

§ 250.5 Amount of denied boarding 

compensation for passengers denied 

boarding involuntarily. 

(a) Subject to the exceptions provided 

in § 250.6, a carrier to whom this part 

applies as described in § 250.2 shall pay 

compensation to passengers denied 

boarding involuntarily from an oversold 

flight at the rate of 200 percent of the 

fare (including any surcharges and air 

transportation taxes) to the passenger’s 

next stopover, or if none, to the 

passenger’s final destination, with a 

maximum of $800. However, the 

compensation shall be one-half the 

amount described above, with a $400 

maximum, if the carrier arranges for 

comparable air transportation [see 

§ 250.1], or other transportation used by 

the passenger that, at the time either 

such arrangement is made, is planned to 

arrive at the airport of the passenger’s 

next stopover, or if none, the airport of 

the passenger’s final destination, not 

later than 2 hours after the time the 

direct or connecting flight from which 

the passenger was denied boarding is 

planned to arrive in the case of 

interstate air transportation, or 4 hours 

after such time in the case of foreign air 

transportation. 

* * * * * 

■ 7. Section 250.6(b) is revised to read 

as follows: 

* * * * * 

(b) The flight for which the passenger 

holds confirmed reserved space is 

unable to accommodate that passenger 

because of substitution of equipment of 

lesser capacity when required by 

operational or safety reasons; or, on an 

aircraft with a designed passenger 

capacity of 60 or fewer seats, the flight 

for which the passenger holds 

confirmed reserved space is unable to 

accommodate that passenger due to 

weight/balance restrictions when 

required by operational or safety 

reasons; 

* * * * * 

■ 8. Section 250.9(b) is revised to read 

as follows: 

§ 250.9 Written explanation of denied 

boarding compensation and boarding 

priorities. 

* * * * * 

(b) The statement shall read as 

follows: 

Compensation for Denied Boarding 

If you have been denied a reserved 

seat on (name of air carrier), you are 

probably entitled to monetary 

compensation. This notice explains the 

airline’s obligation and the passenger’s 

rights in the case of an oversold flight, 

in accordance with regulations of the 

U.S. Department of Transportation. 

Volunteers and Boarding Priorities 

If a flight is oversold (more passengers 

hold confirmed reservations than there 

are seats available), no one may be 

denied boarding against his or her will 

until airline personnel first ask for 

volunteers who will give up their 

reservation willingly, in exchange for a 

payment of the airline’s choosing. If 

there are not enough volunteers, other 

passengers may be denied boarding 

involuntarily in accordance with the 

following boarding priority of (name of 

air carrier): (In this space the carrier 

inserts its boarding priority rules or a 

summary thereof, in a manner to be 

understandable to the average 

passenger.) 

Compensation for Involuntary Denied 

Boarding 

If you are denied boarding 

involuntarily, you are entitled to a 

payment of ‘‘denied boarding 

compensation’’ from the airline unless: 

(1) you have not fully complied with the 

airline’s ticketing, check-in and 

reconfirmation requirements, or you are 

not acceptable for transportation under 

the airline’s usual rules and practices; or 

(2) you are denied boarding because the 

flight is canceled; or (3) you are denied 

boarding because a smaller capacity 

aircraft was substituted for safety or 

operational reasons; or (4) on a flight 

operated with an aircraft having 60 or 

fewer seats, you are denied boarding 

due to safety-related weight/balance 

restrictions that limit payload; or (5) you 

are offered accommodations in a section 

of the aircraft other than specified in 

your ticket, at no extra charge (a 

passenger seated in a section for which 

a lower fare is charged must be given an 

appropriate refund); or (6) the airline is 

able to place you on another flight or 

flights that are planned to reach your 

next stopover or final destination within 

one hour of the planned arrival time of 

your original flight. 

Amount of Denied Boarding 

Compensation 

Passengers who are eligible for denied 

boarding compensation must be offered 

a payment equal to their one-way fare to 

their destination (including connecting 

flights) or first stopover of four hours or 

longer, with a $400 maximum. 

However, if the airline cannot arrange 

‘‘alternate transportation’’ (see below) 

for the passenger, the compensation is 

doubled ($800 maximum). The fare 

upon which the compensation is based 

shall include any surcharge and air 

transportation tax. 

‘‘Alternate transportation’’ is air 

transportation (by any airline licensed 

by DOT) or other transportation used by 

the passenger which, at the time the 

arrangement is made, is planned to 

arrive at the passenger’s next scheduled 

stopover of 4 hours or longer or, if none, 

the passenger’s final destination, no 

later than 2 hours (for flights between 

U.S. points, including territories and 

possessions) or 4 hours (for 

international flights) after the 

passenger’s originally scheduled arrival 

time. 

Method of Payment 

Except as provided below, the airline 

must give each passenger who qualified 

for involuntary denied boarding 


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Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations 21035 

compensation a payment by cash or 

check for the amount specified above, 

on the day and at the place the 

involuntary denied boarding occurs. If 

the airline arranges alternate 

transportation for the passenger’s 

convenience that departs before the 

payment can be made, the payment 

shall be sent to the passenger within 24 

hours. The air carrier may offer free or 

discounted transportation in place of 

the cash payment. In that event, the 

carrier must disclose all material 

restrictions on the use of the free or 

discounted transportation before the 

passenger decides whether to accept the 

transportation in lieu of a cash or check 

payment. The passenger may insist on 

the cash/check payment or refuse all 

compensation and bring private legal 

action. 

Passenger’s Options 

Acceptance of the compensation may 

relieve (name of air carrier) from any 

further liability to the passenger caused 

by its failure to honor the confirmed 

reservation. However, the passenger 

may decline the payment and seek to 

recover damages in a court of law or in 

some other manner. 

■ 9. In § 250.10, remove the word 

‘‘carrier’’ and replace it with the phrase 

‘‘reporting carrier as defined in 14 CFR 

234.2 and any carrier that voluntarily 

submits data pursuant to § 234.7 of that 

part.’’

■ 10. Section 250.11(a) is revised to read 

as follows: 

§ 250.11 Public disclosure of deliberate 

overbooking and boarding procedures. 

(a) Every carrier shall cause to be 

displayed continuously in a 

conspicuous public place at each desk, 

station and position in the United States 

which is in the charge of a person 

employed exclusively by it, or by it 

jointly with another person, or by any 

agent employed by such air carrier or 

foreign air carrier to sell tickets to 

passengers, a sign located so as to be 

clearly visible and clearly readable to 

the traveling public, which shall have 

printed thereon the following statement 

in boldface type at least one-fourth of an 

inch high: 

Notice—Overbooking of Flights 

Airline flights may be overbooked, 

and there is a slight chance that a seat 

will not be available on a flight for 

which a person has a confirmed 

reservation. If the flight is overbooked, 

no one will be denied a seat until airline 

personnel first ask for volunteers willing 

to give up their reservation in exchange 

for compensation of the airline’s 

choosing. If there are not enough 

volunteers, the airline will deny 

boarding to other persons in accordance 

with its particular boarding priority. 

With few exceptions, including failure 

to comply with the carrier’s check-in 

deadline (carrier shall insert either ‘‘of 

l minutes prior to each flight segment’’

or ‘‘(which are available upon request 

from the air carrier)’’ here), persons 

denied boarding involuntarily are 

entitled to compensation. The complete 

rules for the payment of compensation 

and each airline’s boarding priorities are 

available at all airport ticket counters 

and boarding locations. Some airlines 

do not apply these consumer 

protections to travel from some foreign 

countries, although other consumer 

protections may be available. Check 

with your airline or your travel agent. 

* * * * * 

Issued this 14th day of April, 2008, at 

Washington, DC. 

Michael W. Reynolds, 

Acting Assistant Secretary for Aviation and 

International Affairs. 

[FR Doc. 08–1145 Filed 4–16–08; 9:08 am] 

BILLING CODE 4910–9X–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 748 and 774 

[Docket No. 080307395–8515–01] 

RIN 0694–AE32 

Technical Corrections to the Export 

Administration Regulations Based 

Upon a Systematic Review of the CCL 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: This rule amends the Export 

Administration Regulations (EAR) to 

make various technical corrections and 

clarifications to the EAR as a result of 

a systematic review of the Commerce 

Control List (CCL) that was conducted 

by the Bureau of Industry and Security 

(BIS). This rule is the first phase of the 

regulatory implementation of the results 

of a review of the CCL that was 

conducted by BIS starting in 2007. The 

BIS CCL review benefited from input 

received from BIS’s Technical Advisory 

Committees (TACs) and comments that 

were received from the interested public 

in response to the publication of a BIS 

notice of inquiry on July 17, 2007 (72 FR 

39052). 

DATES: Effective Date: This rule is 

effective: April 18, 2008. Although there 

is no formal comment period, public 

comments on this regulation are 

welcome on a continuing basis. 

ADDRESSES: You may submit comments, 

identified by RIN 0694–AE32, by any of 

the following methods: 

E-mail: publiccomments@bis.doc.gov 

Include ‘‘RIN 0694–AE32’’ in the subject 

line of the message. 

Fax: (202) 482–3355. Please alert the 

Regulatory Policy Division, by calling 

(202) 482–2440, if you are faxing 

comments. 

Mail or Hand Delivery/Courier: 

Timothy Mooney, U.S. Department of 

Commerce, Bureau of Industry and 

Security, Regulatory Policy Division, 

14th St. & Pennsylvania Avenue, NW., 

Room 2705, Washington, DC 20230, 

Attn: RIN 0694–AE32. 

Send comments regarding the 

collection of information associated 

with this rule, including suggestions for 

reducing the burden, to David Rostker, 

Office of Management and Budget 

(OMB), by e-mail to 

David_Rostker@omb.eop.gov, or by fax 

to (202) 395–7285; and to the U.S. 

Department of Commerce, Bureau of 

Industry and Security, Regulatory Policy 

Division, 14th St. & Pennsylvania 

Avenue, NW., Room 2705, Washington, 

DC 20230. Comments on this collection 

of information should be submitted 

separately from comments on the final 

rule (i.e. RIN 0694–AE32)—all 

comments on the latter should be 

submitted by one of the three methods 

outlined above. 

FOR FURTHER INFORMATION CONTACT: 

Timothy Mooney, Office of Exporter 

Services, Bureau of Industry and 

Security, U.S. Department of Commerce; 

by telephone: (202) 482–2440; or by fax: 

202–482–3355. 

SUPPLEMENTARY INFORMATION: 

Background 

This rule amends the Export 

Administration Regulations (EAR) to 

make various technical corrections and 

clarifications to the EAR as a result of 

a systematic review of the Commerce 

Control List (CCL) that was conducted 

by the Bureau of Industry and Security 

(BIS) beginning in 2007. This rule is the 

first phase of the regulatory 

implementation of the results of that 

review. This rule focuses on making 

needed technical corrections and 

clarifications to the CCL. The BIS CCL 

review benefited from input received 

from BIS’s Technical Advisory 

Committees (TACs) and public 

comments received in response to a BIS 

notice of inquiry (July 17, 2007, 72 FR 

39052). 

BIS intends to publish another rule 

later this year that will implement the 


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