I

107TH CONGRESS

1ST SESSION H. R. 204

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

JANUARY 3, 2001

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 2001’’.
2

•HR 204 IH

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 by adding at the end the following:

5 ‘‘(c) UNFAIR METHODS OF COMPETITION AGAINST

6 NEW ENTRANT AIR CARRIERS.—

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

8 major air carrier is competing with a new entrant

9 air carrier in providing air transportation on a route

10 between a hub airport of the major air carrier and

11 another airport, the Secretary shall initiate an inves12 tigation under subsection (a) to determine whether

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

14 unfair method of competition if the Secretary finds

15 that—

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

17 capacity on the route and has sold such a large

18 number of seats on the route at very low fares

19 that the ensuing self-diversion of revenue has

20 resulted in lower local revenue than would have

21 resulted from a reasonable alternative response

22 by the major air carrier to the competition;

23 ‘‘(B) the number of passengers that the

24 major air carrier has carried on the route at the

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

26 fares that are substantially below the major air
3

•HR 204 IH

1 carrier’s previous fares) has exceeded the new

2 entrant air carrier’s total seat capacity on the

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

4 local revenue than would have resulted from a

5 reasonable alternative response by the major air

6 carrier to the competition; or

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

8 major air carrier has carried on the route at the

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

10 fares that are substantially below the major air

11 carrier’s previous fares) has exceeded the num12 ber of low-fare passengers carried by the new

13 entrant air carrier on the route, resulting,

14 through self-diversion, in lower local revenue

15 than would have resulted from a reasonable al16 ternative response by the major air carrier to

17 the competition.

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

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

20 is not required to initiate an investigation in accord21 ance with paragraph (1) if the Secretary also finds

22 that there are strong reasons to believe that the

23 major air carrier’s response to competition from the

24 new entrant air carrier does not violate subsection

25 (a).
4

•HR 204 IH

1 ‘‘(d) DEFINITIONS.—In this section, the following

2 definitions apply:

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

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

5 has been providing air transportation according to a

6 published schedule for less than 10 years and pur7 sues a competitive strategy of charging low fares.

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

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

10 percent of the total annual boardings in the United

11 States.

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

13 air carrier’ means a passenger air carrier that is cer14 tificated under chapter 411 of this title and included

15 in Carrier Group III under criteria contained in sec16 tion 04 of part 241 of title 14, Code of Federal Reg17 ulations.’’.

Æ