Document ID: DOT-OST-2010-0140-2051
Agency: dot
Document Type: Rule
Title: Enhancing Airline Passenger Protections
Posted Date: 2011-04-25T04:00Z

[Federal Register Volume 76, Number 79 (Monday, April 25, 2011)]
[Rules and Regulations]
[Pages 23110-23167]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9736]

[[Page 23109]]

Vol. 76

Monday,

No. 79

April 25, 2011

Part IV

Department of Transportation

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14 CFR Parts 244, 250, 253 Et al.

Enhancing Airline Passenger Protections; Final Rule

  Federal Register / Vol. 76 , No. 79 / Monday, April 25, 2011 / Rules 
and Regulations  

[[Page 23110]]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 244, 250, 253, 259, and 399

[Docket No. DOT-OST-2010-0140]
RIN 2105-AD92

Enhancing Airline Passenger Protections

AGENCY: Office of the Secretary (OST), Department of Transportation 
(DOT).

ACTION: Final rule.

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SUMMARY: The Department of Transportation is issuing a final rule to 
improve the air travel environment for consumers by: Increasing the 
number of carriers that are required to adopt tarmac delay contingency 
plans and the airports at which they must adhere to the plan's terms; 
increasing the number of carriers that are required to report tarmac 
delay information to the Department; expanding the group of carriers 
that are required to adopt, follow, and audit customer service plans 
and establishing minimum standards for the subjects all carriers must 
cover in such plans; adding carriers to those required to include their 
contingency plans and customer service plans on their websites; 
increasing the number of carriers that must respond to consumer 
complaints; enhancing protections afforded passengers in oversales 
situations, including increasing the maximum denied boarding 
compensation airlines must pay to passengers bumped from flights; 
strengthening, codifying and clarifying the Department's enforcement 
policies concerning air transportation price advertising practices; 
requiring carriers to notify consumers of optional fees related to air 
transportation and of increases in baggage fees; prohibiting post-
purchase price increases; requiring carriers to provide passengers 
timely notice of flight status changes such as delays and 
cancellations; and prohibiting carriers from imposing unfair contract 
of carriage choice-of-forum provisions. The Department is taking this 
action to strengthen the rights of air travelers in the event of 
oversales, flight cancellations and delays, ensure that passengers have 
accurate and adequate information to make informed decisions when 
selecting flights, prohibit unfair and deceptive practices such as 
post-purchase price increases and contract of carriage choice-of-forum 
provisions, and to ensure responsiveness to consumer complaints.

DATES: This rule is effective August 23, 2011 except for the amendments 
to 14 CFR 399.84 which become effective October 24, 2011.

FOR FURTHER INFORMATION CONTACT: Blane A. Workie, Tim Kelly or Daeleen 
Chesley, Office of the Assistant General Counsel for Aviation 
Enforcement and Proceedings, U.S. Department of Transportation, 1200 
New Jersey Ave., SE., Washington, DC 20590, 202-366-9342 (phone), 202-
366-7152 (fax), tim.kelly@dot.gov or blane.workie@dot.gov (e-mail).

SUPPLEMENTARY INFORMATION: 

Background

    On December 30, 2009, the Department published a final rule in 
which it required certain U.S. air carriers to adopt contingency plans 
for lengthy tarmac delays; respond to consumer problems; post flight 
delay information on their websites; and adopt, follow, and audit 
customer service plans. The rule also defined chronically delayed 
flights and deemed them to be an ``unfair and deceptive'' practice. The 
majority of the provisions in that rule took effect on April 29, 2010. 
See 74 FR 68983 (December 30, 2009).
    In the preamble to that final rule, the Department noted that it 
planned to review additional ways to further enhance protections 
afforded airline passengers and listed a number of subject areas that 
it was considering addressing in a future rulemaking. On June 8, 2010, 
the Department published a notice of proposed rulemaking (NPRM), 75 FR 
32318, in which it addressed the following areas: (1) Contingency plans 
for lengthy tarmac delays; (2) reporting of tarmac delay data; (3) 
customer service plans; (4) contracts of carriage; (5) responding to 
consumer problems/complaints (6) oversales; (7) full fare advertising; 
(8) baggage and other ancillary fees; (9) post-purchase price 
increases; (10) notification to passengers of flight status changes; 
(11) choice-of-forum provisions; and (12) peanut allergies. In response 
to the NPRM, the Department received over 2100 comments, the vast 
majority of which were related to the proposal to address peanut 
allergies in air travel.
    The Department received comments on the NPRM from the following: 
U.S. carriers and U.S. carrier associations; foreign air carriers and 
foreign carrier associations; U.S. and foreign consumer groups; travel 
agents and members of organizations in the travel industry; airports 
and various airport-related industry groups; members of Congress; 
embassies; peanut industry groups and allergy associations; as well as 
a number of individual consumers. In addition, the Department received 
a summary of the public discussion on the NPRM proposals that occurred 
on the Regulation Room Web site, http://www.regulationroom.org. The 
Regulation Room site is a site where members of the public can learn 
about and discuss proposed federal regulations and provide feedback to 
agency decision makers. To support this Administration's open 
government initiative, the Department partnered with Cornell University 
in this pilot project to discover the best ways to use Web 2.0 and 
social networking technologies to increase effective public involvement 
in the rulemaking process.
    The Department has carefully reviewed and considered the comments 
received. The commenters' positions that are germane to the specific 
issues raised in the NPRM and the Department's responses are set forth 
below, immediately following a summary of regulatory provisions and a 
summary of the regulatory analysis.

Summary of Regulatory Provisions

------------------------------------------------------------------------
              Subject                            Final rule
------------------------------------------------------------------------
Tarmac Delay Contingency Plans....   Requires foreign air
                                     carriers operating to or from the
                                     U.S. with at least one aircraft
                                     with 30 or more passenger seats to
                                     adopt and adhere to tarmac delay
                                     contingency plans.
                                     Requires U.S. and foreign
                                     air carriers to not permit an
                                     international flight to remain on
                                     the tarmac at a U.S. airport for
                                     more than four hours without
                                     allowing passengers to deplane
                                     subject to safety, security, and
                                     ATC exceptions.
                                     Expands the airports at
                                     which airlines must adhere to the
                                     contingency plan terms to include
                                     small hub and non-hub airports,
                                     including diversion airports.
                                     Requires U.S. and foreign
                                     carriers to coordinate plans with
                                     Customs and Border Protection (CBP)
                                     and the Transportation Security
                                     Administration (TSA).

[[Page 23111]]

 
                                     Requires notification
                                     regarding the status of delays
                                     every 30 minutes while aircraft is
                                     delayed, including reasons for
                                     delay if known.
                                     Requires notification of
                                     opportunity to deplane from an
                                     aircraft that is at the gate or
                                     another disembarkation area with
                                     door open if the opportunity to
                                     deplane actually exists.
------------------------------------------------------------------------
Tarmac Delay Data.................   Requires all carriers that
                                     must adopt tarmac delay contingency
                                     plans to file data with the
                                     Department regarding lengthy tarmac
                                     delays.
------------------------------------------------------------------------
Customer Service Plans............   Requires foreign air
                                     carriers that operate scheduled
                                     passenger service to and from the
                                     U.S. with at least one aircraft
                                     with 30 or more passenger seats to
                                     adopt, follow and audit customer
                                     service plans.
                                     Establishes standards for
                                     the subjects U.S. and foreign air
                                     carriers must cover in customer
                                     service plans. Examples include:
                                        delivering baggage on
                                        time, including reimbursing
                                        passengers for any fee charged
                                        to transport a bag if the bag is
                                        lost;
                                        where ticket refunds are
                                        due, providing prompt refunds
                                        including refund of optional
                                        fees charged to a passenger for
                                        services that the passenger was
                                        unable to use due to an oversale
                                        situation or flight
                                        cancellation; and
                                        allowing reservations to
                                        be held at the quoted fare
                                        without payment, or cancelled
                                        without penalty, for at least
                                        twenty-four hours after the
                                        reservation is made if the
                                        reservation is made one week or
                                        more prior to a flight's
                                        departure date.
------------------------------------------------------------------------
Posting of Customer Service Plans    Requires foreign carriers
 and Tarmac Delay Contingency        to post their required contingency
 Plans.                              plans, customer service plans, and
                                     contracts of carriage on their
                                     websites as is already required of
                                     U.S. carriers.
------------------------------------------------------------------------
Response to Consumer Problems.....   Expands the pool of
                                     carriers that must respond to
                                     consumer problems to include
                                     foreign air carriers operating
                                     scheduled passenger service to and
                                     from the U.S. with at least one
                                     aircraft with 30 or more passenger
                                     seats (i.e., monitor the effects of
                                     irregular flight operations on
                                     consumers; inform consumers how to
                                     file a complaint with the carrier,
                                     and provide substantives responses
                                     to consumer complaints within 60
                                     days).
------------------------------------------------------------------------
Oversales.........................   Increases the minimum
                                     denied boarding compensation limits
                                     to $650/$1,300 or 200%/400% of the
                                     one-way fare, whichever is smaller.
                                     Implements an automatic
                                     inflation adjuster for minimum DBC
                                     limits every 2 years.
                                     Clarifies that DBC must be
                                     offered to ``zero fare ticket''
                                     holders (e.g., holders of frequent
                                     flyer award tickets) who are
                                     involuntarily bumped.
                                     Requires that a carrier
                                     verbally offer cash/check DBC if
                                     the carrier verbally offers a
                                     travel voucher as DBC to passengers
                                     who are involuntarily bumped.
                                     Requires that a carrier
                                     inform passengers solicited to
                                     volunteer for denied boarding about
                                     all material restrictions on the
                                     use of transportation vouchers
                                     offered in lieu of cash.
------------------------------------------------------------------------
Full Fare Advertising.............   Enforces the full fare
                                     advertising rule as written (i.e.,
                                     ads which state a price must state
                                     the full price to be paid).
                                     Carriers currently may exclude
                                     government taxes/fees imposed on a
                                     per-passenger basis.
                                     Clarifies the rule's
                                     applicability to ticket agents.
                                     Prohibits carriers and
                                     ticket agents from advertising
                                     fares that are not the full fare
                                     and impose stringent notice
                                     requirements in connection with the
                                     advertisement of ``each-way'' fares
                                     available for purchase only on a
                                     roundtrip basis.
                                     Prohibits opt-out
                                     provisions in ads for air
                                     transportation.
------------------------------------------------------------------------
Baggage and Other Fees and Related   Requires U.S. and foreign
 Code-Share Issues.                  air carriers to disclose changes in
                                     bag fees/allowances on their
                                     homepage for three months, to
                                     include information regarding the
                                     free baggage allowance.
                                     Requires carriers (U.S. and
                                     foreign) and ticket agents to
                                     include on e-ticket confirmations
                                     information about the free baggage
                                     allowance and applicable fees for
                                     the first and second checked bag
                                     and carry-on but allows ticket
                                     agents, unlike carriers, to do so
                                     through a hyperlink.
                                     Requires carriers (U.S. and
                                     foreign) and ticket agents to
                                     inform passengers on the first
                                     screen on which the ticket agent or
                                     carrier offers a fare quotation for
                                     a specific itinerary selected by a
                                     consumer that additional airline
                                     fees for baggage may apply and
                                     where consumers can go to see these
                                     baggage fees.
                                     Requires U.S. and foreign
                                     air carriers to disclose all fees
                                     for optional services to consumers
                                     through a prominent link on their
                                     homepage.
                                     Requires that the same
                                     baggage allowances and fees apply
                                     throughout a passenger's journey.
                                     Requires the marketing
                                     carrier to disclose on its website
                                     any difference between its optional
                                     services and fees and those of the
                                     carrier operating the flight.
                                     Disclosure may be made through a
                                     hyperlink to the operating
                                     carriers' websites that detail the
                                     operating carriers' fees for
                                     optional services, or to a page on
                                     its website that lists the
                                     differences in policies among code-
                                     share partners.
------------------------------------------------------------------------

[[Page 23112]]

 
Post-Purchase Price Increases.....   Bans the practice of post-
                                     purchase price increases in air
                                     transportation or air tours unless
                                     the increase is due to an increase
                                     in government-imposed taxes or fees
                                     and only if the passenger was
                                     provided full disclosure of the
                                     potential for the increase and
                                     affirmatively agreed to the
                                     potential for such an increase
                                     prior to purchase.
------------------------------------------------------------------------
Flight Status Changes.............   Requires U.S. and foreign
                                     air carriers operating scheduled
                                     passenger service with any aircraft
                                     with 30 or more seats to promptly
                                     notify consumers through whatever
                                     means is available to the carrier
                                     for passengers who subscribe to the
                                     carrier's flight status
                                     notification services, in the
                                     boarding gate area, on a carrier's
                                     telephone reservation system and on
                                     its website of delays of 30 minutes
                                     or more, cancellations and
                                     diversions within 30 minutes of the
                                     carrier becoming aware of a change
                                     in the status of a flight.
------------------------------------------------------------------------
Choice-of-Forum Provisions........   Prohibits U.S. and foreign
                                     air carriers from limiting a
                                     passenger's forum to pursue
                                     litigation to a particular
                                     inconvenient venue.
------------------------------------------------------------------------

Summary of Regulatory Analysis

    The regulatory analysis shows that the monetized benefits of the 
proposed requirements exceed their monetized costs, even without 
considering non-quantifiable benefits. This analysis, outlined in the 
table below, has determined that the present value of monetized net 
benefits for a 10 year period at a 7% discount rate is $14.3 million. 
At a 3% discount rate, the present value of monetized net benefits is 
estimated to be $20.3 million.

------------------------------------------------------------------------
                                                         Present value
                                                           (millions)
------------------------------------------------------------------------
Monetized Benefits..............  10 Years, 7%                     $45.0
                                   discounting.
                                  10 Years, 3%                      53.5
                                   discounting.
Monetized Costs.................  10 Years, 7%                      30.7
                                   discounting.
                                  10 Years, 3%                      33.2
                                   discounting.
Monetized Net Benefits..........  10 Years, 7%                      14.3
                                   discounting.
                                  10 Years, 3%                      20.3
                                   discounting.
------------------------------------------------------------------------

A comparison of the monetized benefits and costs for each of the final 
requirements is provided in the Regulatory Analysis and Notices 
section, set forth below, along with information on additional benefits 
and costs for which quantitative estimates could not be developed.

Comments and Responses

1. Tarmac Delay Contingency Plans

A. Entities Covered
    The NPRM: The NPRM proposed to require any foreign air carrier that 
operates scheduled passenger or public charter service to and from the 
U.S. using any aircraft originally designed to have a passenger 
capacity of 30 or more passenger seats to adopt and comply with a 
tarmac delay contingency plan for their flights to and from the U.S. 
that includes minimum assurances identical to those currently required 
of U.S. carriers. As proposed, it would apply to all of a foreign 
carrier's flights to and from a covered U.S. airport, including those 
involving aircraft with fewer than 30 seats if a carrier operates any 
aircraft originally designed to have a passenger capacity of 30 or more 
seats to or from the U.S.
    We sought comment on whether the requirement to have a contingency 
plan should be narrowed or expanded, and if so, the cost burdens and 
benefits of doing so. For example, we proposed to include foreign 
carriers that operate aircraft originally designed to have a passenger 
capacity of 30 or more seats to and from the U.S., but we invited 
interested persons to comment on whether, in the event that we adopt a 
rule requiring foreign carriers to have contingency plans, we should 
limit its applicability to foreign air carriers that operate large 
aircraft to and from the U.S.--i.e., aircraft originally designed to 
have a maximum passenger capacity of more than 60 seats. We also asked 
whether the requirement to adopt tarmac delay contingency plans should 
apply not only to U.S. and foreign air carriers but also to U.S. 
airports. We requested that proponents and opponents of these or other 
alternative proposals provide arguments in support of their positions.
    Comments: A number of U.S. and foreign airlines and airline 
associations support requiring airports to develop their own 
contingency plans to address lengthy tarmac delays but generally agree 
that these plans should be limited to coordinating with airlines and 
government agencies and assisting airlines during tarmac delays. Some 
of these commenters note that airports are in the best position to 
address the logistics associated with lengthy delays, particularly with 
respect to diverted flights. For example, they argue that an airport 
authority is most likely to know the areas in the airport where 
international passengers can be allowed to deplane without resulting in 
U.S. Customs and Border Protection (CBP) or Transportation Security 
Administration (TSA) concerns. Commenters also note that requiring only 
carriers to have a contingency plan unreasonably places the burden of 
the operations of the entire air transport industry on carriers. 
Consumer groups are also in favor of requiring airports to adopt 
contingency plans. Of the airport and airport industry commenters, 
Dallas/Fort Worth Airport generally supports requiring U.S. airports to 
adopt a tarmac delay contingency plan but notes that U.S. airports do 
not have direct contact with airline passengers when they are on the 
aircraft and have no control over deplaning. Airports Council 
International (ACI) supports the airlines' plans being coordinated with 
airports but does not support requiring airports to adopt separate 
plans. ACI believes that separate airport and airline contingency plans 
could result in confusion and states that it is committed to supporting 
airlines in the development of their plans.
    With regard to the adoption of a tarmac delay contingency plan by

[[Page 23113]]

foreign carriers, the views of foreign carrier associations and 
carriers differed significantly from those of other commenters. In 
general, the foreign carriers and foreign carrier association 
commenters object to the proposal that they adopt tarmac delay 
contingency plans as unnecessary and note that the same issues with 
tarmac delays do not arise as often with international flights as they 
do with domestic flights. The International Air Carrier Association 
(IACA) states that EU Regulation 261/2004 is an EU passenger rights 
provision to which EU carriers are subject on all their flights, 
including flights that depart from U.S. airports, and that the 
Department's proposals could conflict with EU laws. The International 
Air Transport Association (IATA) generally supports the principle of 
contingency plans, but believes such plans should be developed 
individually by each carrier according to its specific operations and 
conditions as opposed to having terms set by the government. The Arab 
Air Carrier Association (AACA) and the Latin American and Caribbean Air 
Transport Association (ALTA) concur with IATA, as do many foreign 
carriers. The Air Transport Users Council (AUC) and a number of 
European carriers point out, similar to IACA, that many of the 
provisions in the NPRM are covered under EU legislation. The National 
Airlines Council of Canada (NACC) supports the need for contingency 
plans in the event of irregular operations but states that they should 
be developed in the interest of enhanced customer service rather than 
being mandated by government regulation. TUI Travel notes that EU 
carriers must comply with EU regulations and asks that carriers 
originating outside the U.S. be excluded from the tarmac delay 
contingency plan rule. Monarch Airlines commented that an exception to 
any requirement should exist for flights that do not pick up passengers 
in the United States.
    U.S. carrier associations such as the Air Transport Association of 
America (ATA) and National Air Carrier Association (NACA) indicated 
their support for requiring foreign air carriers to meet the same 
standards as U.S. carriers for adopting tarmac delay contingency plans. 
Of the U.S. carriers that commented, Spirit Airlines supports extending 
the rule to foreign carriers, while Virgin America states that DOT 
should not adopt any of the proposals related to tarmac delays.
    Most of the comments received from individuals on this issue noted 
that a requirement to develop a tarmac delay contingency plan should be 
extended to foreign carriers because it is important to protect 
consumers on all flights to and from the United States, not merely on 
flights operated by U.S. airlines. Among the consumer group commenters, 
the Consumer Travel Alliance (CTA) supports the expansion of the tarmac 
delay rules to foreign carriers, as does the Association for Airline 
Passenger Rights (AAPR), National Business Travel Association (NBTA), 
Flyersrights.org, Consumers Union and Aviation Consumer Action Project 
(ACAP). The American Society of Travel Agents (ASTA) also supports 
extending the tarmac delay contingency plan provisions to foreign 
carriers and states that the rule should cover all aircraft types.
    Among the airports and airport industry commenters, ACI supports 
requiring foreign air carriers to adopt plans that include minimum 
assurances as required of U.S. airlines and strongly supports extending 
the rule to foreign air carriers operating aircraft with 30 or more 
seats. The American Association of Airport Executives (AAAE) agrees 
that foreign carriers should comply with specified contingency plans in 
order to provide equal and fair competition. The New York State 
Consumer Protection Board supports requiring foreign carriers to adopt 
tarmac delay contingency plans that provide for passengers to receive 
the same basic necessities that U.S. carriers are required to provide.
    DOT Response: After fully considering the comments received, the 
Department has decided not to promulgate a requirement that airports 
adopt contingency plans addressing lengthy tarmac delays. The 
Department is aware that many airports are voluntarily working with 
U.S. carriers to develop policies and procedures to address lengthy 
tarmac delays and to cooperate with U.S. carriers in the coordination 
of the carriers' contingency plans as required of U.S. airlines by the 
first tarmac delay rule. As such, it is not necessary to regulate in 
this area at this time.
    However, the Department thinks it is reasonable and necessary to 
require foreign carriers that operate scheduled passenger or public 
charter service to and from the U.S. to adopt and adhere to tarmac 
delay contingency plans. International air travel is a large and 
increasingly significant market sector, and customers who use non-U.S. 
airlines deserve no less protection from lengthy tarmac delays at U.S. 
airports than do customers of U.S. airlines. We also wish to be 
consistent with the application of our rules. The lengthy tarmac delays 
experienced by a number of foreign carriers at John F. Kennedy 
International Airport (JFK) during and after the December 26, 2010, 
blizzard highlights the need to extend the rule to those carriers.
    In order to address commenters' concerns that certain European laws 
(or laws of other countries) may conflict with this regulation, we want 
to clarify that the requirement to adopt and follow a plan applies only 
to tarmac delay events that occur at a covered U.S. airport. The rule 
should not conflict with EU Regulation 261/2004, the EU rule on 
compensation and assistance to be provided to passengers in the event 
of denied boarding, flight cancellation or long flight delays. The 
types of assistance required under the EU rule are for the most part 
services that would not be available on board an aircraft during a 
tarmac delay, e.g. phone calls, a hotel room, transportation between 
the airport and the hotel room, and rerouting on another flight. The 
context of the food and beverage requirement in regulation 261/2004 
suggests that these services are to be provided in the airport terminal 
during a normal (i.e., non-tarmac) flight delay before passengers have 
been boarded. As such, although EU 261/2004 applies to EU carriers 
departing from or traveling to an EU member state and to non-EU 
carriers departing from an EU member state airport, we see no conflict 
between that rule and this one. On a tarmac delay at a U.S. airport, EU 
and non-EU carriers can comply with all provisions of both rules.
    With regard to charter flights, we agree with Monarch Airlines and 
TUI Travel that an exception should exist for foreign-originating 
charters that operate to and from the United States but do not pick up 
any U.S. originating passengers. Consequently, carriers will not be 
required to adopt a tarmac delay contingency plan as long as their 
operations fall within these parameters. This is consistent with 14 CFR 
382.7(d) of the DOT rule on air travel by passengers with disabilities 
and with the minimal regulation of these flights by the Department's 
public charter rule in 14 CFR part 380.
B. Time Frame for Deplaning Passengers on International Flights
    The NPRM: Under the proposed rule, a covered foreign air carrier 
would be required to include in its tarmac delay contingency plan an 
assurance that it will not permit an aircraft to remain on the tarmac 
at a U.S. airport for more than a set number of hours as determined by 
the carrier in its plan before allowing passengers the opportunity to 
deplane. The proposal included appropriate safety, security, and ATC 
exceptions. This is already

[[Page 23114]]

required of U.S. carriers for their international flights under the 
Department's existing rule. As for domestic flights, U.S. carriers are 
required to provide an assurance that they will not permit an aircraft 
to remain on the tarmac for more than three hours without deplaning 
passengers subject to the same safety, security and ATC exceptions. In 
the NPRM, we noted that there are ongoing questions as to whether 
mandating a specific time frame for deplaning passengers on 
international flights as currently exists for domestic flights is in 
the best interest of the public. We asked for comments on whether any 
final rule that we may adopt should set a uniform standard for the time 
interval after which U.S. or foreign air carriers would be required to 
allow passengers on international flights to deplane rather than 
allowing the carriers to set their own tarmac delay time limit for such 
flights. We also asked commenters who support the adoption of a uniform 
standard to propose specific time limits and state why they believe 
these intervals to be appropriate.
    Comments: Of the U.S. carriers and carrier associations that 
commented, ATA objects to a hard time limit on tarmac delays for 
international flights. NACA supports requiring foreign air carriers to 
meet the same standards as U.S. carriers for adopting tarmac delay 
contingency plans.
    In general, the non-U.S. carriers and carrier associations object 
to the proposal as unnecessary, asserting that the same problems with 
tarmac delays do not exist with international flights as with domestic 
flights. For example, Condor Flugdienst Airlines (Condor) states that 
it sees no reason to enforce a mandatory deplaning requirement for a 
problem that occurs only very rarely. Many of these carriers also 
comment that a ``one size fits all'' approach is not practical and note 
that there are large differences between domestic and international 
operations, and between long-haul and short-haul operations. IATA and 
IACA object to a uniform time limit entitling passengers to deplane. 
IACA states that the proposal may conflict with EU passenger rights 
requirements since EU carriers must follow EU requirements on all their 
flights, including flights that depart from U.S. airports. The 
Association of European Airlines (AEA) and foreign airlines' comments 
are similar to IATA's. Many object to the proposal to require carriers 
to set a time limit to deplane due to various operational concerns. 
Specifically, a number of foreign industry groups and airlines noted 
the following:
     International flights operate less frequently and a 
cancellation could result in missed connections with serious 
consequences for passengers;
     Returning to the gate and/or a flight cancellation may 
result in the crew ``timing-out'' and many foreign carriers do not have 
U.S.-based crews, which could result in a delay of 24 hours or more;
     International flights have limited windows of opportunity 
to depart due to gate constraints at foreign airports;
     Larger aircraft used for international flights take much 
longer to enplane and deplane (up to 40 minutes), which can cause even 
further delay;
     International flights are often better equipped to meet 
passenger needs on-board the aircraft; and
     Long-haul and ultra-long haul operations can make up time 
while in the air.
    Some carriers, such as Air New Zealand, support a 3 hour time 
limit, but note that consideration should be given to crew restrictions 
and gate allocations, or situations where resolution of the delay is 
less than an hour away and deplaning would further delay the flight. 
Qantas also supports the 3 hour limit in principle, but thinks such an 
assurance is limited by the carrier's ability to control the 
circumstances. Of the travel agents and other industry group commenters 
that commented on this issue, ASTA agrees that a specific standard for 
international flights is important but supports a four hour rather than 
three hour rule.
    Among the consumer commenters, the Association for Airline 
Passenger Rights (AAPR) and Flyersrights.org strongly advocate for a 
maximum permissible tarmac delay of three hours for international 
flights. Flyersrights.org urges that tarmac delays of over three hours 
not be permitted for international flights and notes that the ``health 
and inconvenience problems'' are the same regardless of whether the 
flight is domestic or international. Consumer Action, along with 
Consumer Federation of America, the National Consumers League, Public 
Citizen, and U.S. PIRG support the extensive comments filed by 
Flyersrights.org. Some individual commenters also expressed concern 
about lengthy tarmac delays on international flights and advocated for 
a uniform time limit for deplaning passengers. Of the commenters on 
``Regulation Room,'' almost half noted, generally, that the Department 
should apply a uniform federal time limit on tarmac delays to all 
flights and airlines, regardless of aircraft size, airport size, and 
whether the flight is domestic or international.
    DOT Response: As noted above, the Department is expanding its 
requirement to adopt a tarmac delay contingency plan to foreign 
carriers, as we believe that it is important to ensure that passengers 
on these carriers are also afforded protection from unreasonably 
lengthy tarmac delays. With regard to a required time period for 
deplaning passengers on international flights operated by U.S. or 
foreign carriers, we are requiring that these carriers provide an 
assurance that they will not permit an aircraft to remain on the tarmac 
at a U.S. airport for more than four hours without providing passengers 
an opportunity to deplane. As in our initial rulemaking to enhance 
airline passenger protections, this new requirement will allow 
exceptions for safety and security considerations and in instances 
where Air Traffic Control advises the pilot-in-command that returning 
to the gate or permitting passengers to disembark elsewhere would 
significantly disrupt airport operations. We decided to impose a 
uniform time limit for deplaning passengers on international flights 
rather than allowing carriers to establish their own tarmac delay time 
limits because we believe the consistency in standard will provide 
passengers with clearer expectations as to when they would be allowed 
off aircraft in the event of a tarmac delay. A uniform standard will 
also make it clearer to the other stakeholders such as airports of the 
need to assist airlines in deplaning passengers on international 
flights before the four hour mark. Further, the Department believes 
that a uniform time limit will reduce or prevent lengthy tarmac delay 
incidents such as those that occurred at JFK during and after the 
December 26, 2010, blizzard and the resulting impact on passengers 
traveling on those flights.
    We decided to impose a four hour time limit for lengthy tarmac 
delays on international flights as opposed to the three hour limit that 
applies to lengthy tarmac delays on domestic flights for a number of 
reasons. First, because international flights are of much longer 
duration on average than domestic flights, it is possible that delays 
may not have as negative an impact on international passengers as they 
were already planning on spending a significant amount of time in the 
aircraft and some of the time spent on the tarmac can be made up while 
in the air. We also reviewed the contingency plans for the U.S. 
carriers as they are already required to establish their own tarmac 
delay time limits for international flights, and found that most of 
these carriers have chosen to set a four hour

[[Page 23115]]

time limit for deplaning passengers from their international flights 
that experience a tarmac delay. In addition, we are persuaded by 
comments of the different environment in which international flights 
operate and the need to provide greater leeway for international 
flights than we allow for domestic flights. For these reasons, we have 
decided to impose a four hour time limit for deplaning passengers on 
international flights and not allow U.S. and foreign carriers to 
establish their own longer tarmac delay time limits for international 
flights.
    As clarified in the first rule to enhance airline passenger 
protections, an international flight for purposes of this requirement 
is a nonstop flight segment that departs from the United States and 
lands in another country, or vice-versa, exclusive of non-traffic 
technical stops. For example, if a U.S. carrier operates a direct 
flight Chicago-New York-Frankfurt, with some Chicago-originating 
passengers destined for New York and others destined for Frankfurt, and 
the aircraft experiences a tarmac delay in Chicago, then we would 
consider the tarmac delay to be on a domestic flight. This is because 
Chicago-New York is a domestic flight segment even though the final 
destination of the flight is Frankfurt, Germany. If, on the other hand, 
the aircraft only stops for refueling or a crew change in New York and 
the flight carries no Chicago-New York traffic and no Frankfurt-bound 
passengers enplane in New York, then we would consider the tarmac delay 
in Chicago to be a tarmac delay on an international flight.
C. Provision for Adequate Food and Water, Operable Lavatories, and 
Medical Attention if Needed
    The NPRM: As proposed in the NPRM, the tarmac delay contingency 
plans adopted by foreign air carriers for international flights that 
depart from or arrive at a U.S. airport would need to include: (1) An 
assurance that the carrier will provide adequate food and potable water 
no later than two hours after the aircraft leaves the gate in the case 
of departure or touches down in the case of an arrival if the aircraft 
remains on the tarmac, unless the pilot-in-command determines that 
safety or security considerations preclude such service; (2) an 
assurance of operable lavatory facilities while the aircraft remains on 
the tarmac; and (3) an assurance of adequate medical attention if 
needed while the aircraft remains on the tarmac. These requirements 
already apply to U.S. carriers under the current rule.
    Comments: With regard to the provision for adequate food and water, 
ATA notes that generally aircraft used for international flights are 
able to comfortably accommodate passengers onboard for longer periods 
of time, with food service and entertainment options often available 
given the type of equipment used and the expected length of these 
flights. Among the foreign air carriers that commented, Condor Airlines 
notes that when a longer delay becomes inevitable, Condor has snacks 
and drinks available for passengers. Similarly, Qatar Airways notes 
that the logistics of the ultra long-haul flights operated to and from 
the U.S. already require that Qatar Airways provide extra catering and 
potable/bottled water to allow for extra time beyond that scheduled 
during which its customers and crew may have to spend in the aircraft. 
Qatar explains that it already ensures that its customers are regularly 
offered water and soft drinks by cabin crew. Qantas indicates that it 
too provides passengers access to potable water and refreshments during 
tarmac delays but does not consider it reasonable to impose a mandatory 
requirement to provide food to all passengers after two hours in all 
cases, as the commencement of a meal service may lead to further delays 
and missed opportunities for departure. The carrier also thinks that 
the term ``adequate food'' is too broad and open to different 
interpretations. South African Airways wants the Department to 
understand that foreign airlines have significantly less flexibility 
than U.S. airlines to store extra catering items onboard. In the 
absence of evidence that lengthy delays are a problem for passengers 
traveling on foreign airlines, the airline believes the Department is 
not justified in imposing the costs associated with these requirements.
    Regarding assurance of operable lavatory facilities, a number of 
carriers noted that this is a reasonable requirement and that they have 
working lavatories and toilet serviceability is maintained at the 
highest levels. However, one carrier expressed concern about unforeseen 
maintenance issues.
    With regard to providing medical attention, Condor states that its 
flight attendants are capable of providing basic first aid when needed 
and have access to remote medical advice for more serious medical 
emergencies. Similarly, Qatar Airways notes that its cabin crews are 
highly trained in first aid. Qantas Airlines believes that it is 
reasonable to require carriers to seek medical assistance for any 
onboard emergency and states that it engages the services of an 
external medical provider to provide advice and assistance as required, 
but thinks the extent of this requirement needs clarification. South 
African Airways expresses similar concerns as Qantas and notes that the 
NPRM is not clear regarding what comprises medical attention within the 
meaning of the proposal. South African Airways states that while its 
in-flight crewmembers have basic first-aid capabilities, the carrier 
relies on consultations with remote medical-care contractors and other 
passengers with medical training to provide good-Samaritan assistance. 
South African explains that it sees no practical way to ensure medical 
attention during tarmac delays that exceeds this basic assistance. The 
National Airlines Council of Canada (NACC) states that many airlines 
are not in a position to provide adequate medical attention as airlines 
are not medical organizations and in-flight staff in not medical staff. 
As such, it believes that such assistance is up to local authorities to 
provide.
    Among consumer groups and individual commenters, the AAPR urges the 
Department to require the tarmac delay contingency plans of U.S. and 
foreign air carriers contain minimum guidelines for accommodating 
passengers with disabilities. The New York State Consumer Protection 
Board states that foreign carriers should be required to adopt a plan 
that provides for passengers to receive the same basic necessities that 
U.S. carriers are required to provide, i.e., adequate food and water, 
operable lavatories, and medical attention if needed. By and large, 
individual commenters also support the Department imposing identical 
requirements for foreign and U.S. carriers. Of those that commented on 
Regulation Room, they generally support the Department requiring 
airlines to provide working bathrooms, water, beverages, snacks and, in 
some cases, meals on delayed flights. A few commenters also mention the 
need for adequate temperature control and the ability to walk around an 
aircraft during a delay in order to stretch and use the restroom.
    DOT Response: The Department continues to believe that passengers 
stuck on an aircraft during lengthy tarmac delays deserve to be 
provided some type of food, potable water, operable lavatories, and if 
necessary, medical care. It appears from the comments that most 
carriers already have procedures to provide food and water during long 
tarmac delays, and ensure that their lavatory facilities are operable 
while the aircraft remains on the tarmac. The concern expressed by 
South African Airways about storage

[[Page 23116]]

space for extra catering items seems to be based on a misconception 
that extensive supplies are needed. There also appears to be confusion 
as to what the Department means by the term ``adequate food.'' The 
Department would consider snack foods such as granola bars that 
carriers typically provide on flights to suffice as ``adequate'' food. 
Carriers are, of course, free to provide more complete meals to 
passengers if they so wish. We note that the requirement to provide 
food and water within two hours would not apply if the pilot-in-command 
determines that safety or security precludes such service, so the 
commencement of a meal service should not lead to further delays or 
missed opportunities for departure as feared by at least one commenter. 
As for the requirement to provide medical care if necessary, the 
Department's expectation is that carriers would have the capabilities 
to provide basic first aid assistance on the aircraft and would seek 
further medical assistance as necessary for any onboard emergency, 
including disembarking the passenger for treatment if needed with the 
assistance of airport emergency personnel.
D. Coordination With Covered Airports
    The NPRM: In the initial rulemaking to enhance airline passenger 
protections, we required U.S. carriers to have contingency plans for 
tarmac delays to large-hub and medium-hub airports, as well as 
diversion airports that the carrier serves or utilizes. In the NPRM for 
the current proceeding, we proposed to extend this requirement to small 
hub and non-hub airports and to require all covered carriers (U.S. and 
foreign) to coordinate their plans with each covered U.S. airport that 
they serve or utilize for diversions. In making this proposal, the 
Department noted its belief that the same issues and discomfort to 
passengers during an extended tarmac delay are likely to occur 
regardless of airport size or layout. We also noted our strong belief 
that it is essential that airlines involve airports in developing their 
plans in order to enable them to effectively meet the needs of 
passengers. We invited comment on whether it was workable to require 
covered carriers coordinate with small hub and non-hub airports to 
which they regularly operate scheduled passenger or public charter 
service. We also asked if the rule should be expanded to include other 
commercial U.S. airports (i.e., those with less than 10,000 annual 
enplanements). Finally, we specifically solicited comments from 
airlines, airports and other industry entities on whether there are any 
special operational concerns affecting such airports.
    Comments: Of the U.S. carriers and carrier association commenters, 
ATA supports expanding the number of airports where carriers must 
coordinate plans to include small hub and non-hub airports. The 
Regional Airline Association (RAA) opposes extending the rule to small-
hub and non-hub airports because it believes there is no evidence that 
doing so is necessary or beneficial and believes that the cost to 
expand tarmac delay contingency plans to smaller airports outweighs the 
benefits, as requiring regional and other carriers serving small 
airports to coordinate plans with all such airports would require 
significant resources.
    In general, non-U.S. carrier and carrier association commenters 
object to the proposal as unnecessary and note that they have limited 
presence or service at these smaller airports. Air France and KLM 
specifically oppose this provision. On the other hand, Alitalia 
supports the idea of coordination, but believes the proposal is 
extremely burdensome. Singapore Airlines supports coordinating 
contingency plans with airports to handle diverted flights, but states 
that the plans should focus on customer care such as swiftly 
disembarking passengers, returning baggage, accommodating passengers if 
necessary in hotels or on alternate flights, and ensuring that 
passengers continue their journey. Monarch Air disagrees and states 
that coordination with airports is not necessary, as it would let the 
airport determine what is best for the customer.
    Of the travel agent interests that commented, ASTA supports 
expanding contingency plan coordination obligations to include small 
hub and non-hub airports. TUI Travel states that coordinating 
contingency plans is not necessary, as the airport can determine what 
is in the best interest of the airline customer and notes restrictions 
on gate availability that may be determined on the day of arrival, so 
pre-coordination will reduce operational flexibility.
    Of the airport and airport industry commenters, Dallas/Fort Worth 
Airport supports requiring carriers to coordinate their contingency 
plans with all airports that they serve and notes that important 
airport factors such as terminal capacity, equipment, and government 
services are taken into account during such coordination. ACI also 
supports the need for airlines to coordinate with airports of all sizes 
and states that it is committed to supporting airline development of 
contingency plans with accurate and relevant information about the 
airports the carriers serve.
    Of the consumer and consumer group commenters, CTA supports the 
expansion of the tarmac-delay rules to smaller airports. AAPR and 
Flyersrights.org fully support increasing the number of covered 
airports to include small hub and non-hub airports. NBTA also supports 
these provisions. The New York State Consumer Protection Board supports 
expanding the rule to all airports, as do many Regulation Room 
commenters, some of whom state that airlines and airports should be 
required to work together to develop and implement tarmac delay 
contingency plans.
    DOT Response: The Department is adopting the requirement that 
covered carriers, both U.S. and foreign, include small hub and non-hub 
airports in their tarmac delay contingency plans and ensure that the 
plan has been coordinated with airport authorities at those airports. 
We continue to maintain that the same issues and discomfort to 
passengers during an extended tarmac delay are likely to occur 
regardless of airport size or layout. Similar to the expansion of the 
scope of the requirement to adopt contingency plans to include foreign 
carriers, this requirement will protect a greater number of passengers 
at more airports.
    We are not convinced by commenters' concerns that requiring 
carriers to coordinate their plans with small hub and non-hub airports 
will have a significant financial impact on carriers. U.S. carriers are 
already required to coordinate plans with large-hub and medium-hub 
airports and should be able to tailor existing plans to apply to these 
smaller airports. We recognize that the requirement to coordinate 
contingency plans with airports is a new requirement for foreign 
carriers, but expect that it will not be overly burdensome for foreign 
carriers as the large-hub and medium-hub airports are familiar with the 
coordination process after having worked with the U.S. carriers on 
tarmac delay contingency plans this past year. The need for such 
coordination was recently highlighted by the events at JFK airport 
following the December 26, 2010 blizzard. Also, during the past two 
years significant amount of work has been done through a project funded 
by the Federal Aviation Administration (FAA) to produce a best-practice 
guidance document for developing coordinated contingency plans for 
tarmac delays at small hub and non-hub airports.
    The benefit of airlines coordinating with airports on contingency 
plans becomes particularly clear when there are flight diversions. In 
situations where flights must be diverted from their

[[Page 23117]]

intended destination airports, it is imperative that airlines and the 
airports that regularly serve as their diversion airports have already 
discussed things such as locations within the airport where passengers 
are allowed to wait when TSA or CBP personnel are not present and the 
availability of equipment to deplane/bus passengers to the terminal to 
minimize the hardship to travelers. It is essential that airlines 
involve airports in developing their plans to enable them to 
effectively meet the needs of passengers. The rule on coordination with 
airports is also being clarified to ensure that at airports, like JFK, 
where operations such as snow removal and gate use are managed by 
entities other than the airport authority (e.g., a carrier, a 
consortium of carriers, or a contractor), carriers covered by this rule 
must also coordinate with these terminal operators.
E. Coordination With CBP and TSA
    The NPRM: As recommended by the Tarmac Delay Task Force,\1\ we 
proposed to require carriers to include TSA in their coordination 
efforts for any large, medium, small, and non-hub U.S. airports, 
including U.S. diversion airports which they regularly use. We also 
proposed to require carriers to coordinate with CBP for any U.S. 
airport that the carrier regularly uses for its international flights, 
including diversion airports. We proposed these measures as it had come 
to the Department's attention on more than one occasion that passengers 
on international flights were held on diverted aircraft for extended 
periods of time because there were reportedly no means to process those 
passengers and allow them access to terminal facilities. At that time, 
the U.S. Department of Homeland Security (TSA and CBP are part of DHS) 
had advised this Department that, subject to coordination with CBP 
regional directors, passengers on diverted international flights may be 
permitted into closed/sterile terminal areas without CBP screening. In 
the NPRM, we invited interested persons to comment on this proposal and 
asked what costs and benefits would result from imposing this 
requirement.
---------------------------------------------------------------------------

    \1\ In January 2008, the Department established a Tarmac Delay 
Task Force to coordinate and develop contingency plans to deal with 
lengthy delays. The Task Force comprising of individuals who 
represented airlines, airports and consumer groups issued a report 
that set forth guidelines for airlines, airports, and other 
stakeholders to use when dealing with long ground delays.
---------------------------------------------------------------------------

    Comments: Of the U.S. carriers and carrier associations that 
commented, ATA states that carriers already coordinate with TSA and CBP 
and will continue to do so but stresses that interagency coordination 
between CBP and TSA as well as coordination between the airports and 
CBP/TSA is needed in order to get diverted passengers who so desire off 
airplanes. USA3000 suggests that airports may not be properly staffed 
by CBP during irregular operations and urges DOT to review this issue 
with CBP and local airports.
    The non-U.S. carrier and carrier association commenters object in 
general to the proposal as unnecessary. IACA notes that tarmac delays 
of more than three hours are very rare and believes the NPRM imposes a 
disproportionate burden on airlines to coordinate plans not only with 
airports, but with federal agencies. IATA supports the need for the 
United States government to be more responsive to the needs of airline 
passenger who arrive at airports where TSA and CBP personnel are not 
normally stationed or are not present during off hours, but think it is 
the responsibility of those agencies to work together to put systems in 
place. The comments of the Association of European Airlines (AEA) and 
many foreign airlines' are similar to or support IATA, while NACA adds 
that DOT should work with CBP and other government agencies on a 
memorandum of understanding to address issues regarding extended tarmac 
delays. The National Airlines Council of Canada (NACC) adds that 
carriers have limited influence over TSA and CBP, so obligations should 
be on the U.S. government to ensure these agencies have their own 
contingency plans in place. The Arab Air Carrier Association (AACA) 
states that coordinating contingency plans with diversion airports as 
well as TSA and CBP will be very costly and suggests, along with other 
commenters, that TSA and CBP should design their own contingency plans 
for any airport that receives international flights.
    Some foreign carriers assert that this proposal is flawed because 
TSA and CBP can provide only limited assistance at some airports due to 
limited after-hours federal inspection capabilities or limited federal 
personnel available at the smaller airports. Carriers also ask how they 
can ensure that passengers will remain in one area of the airport or 
that a sterile area will be available for containing such passengers. 
British Airways supports the proposal that passengers on diverted 
international flights be permitted into closed terminal areas without 
CBP screening and notes, as do some other foreign carriers, that these 
carriers generally do not have a presence at diversion airports. As 
such, British Airways and other carriers assert that CBP and the 
airport operator should be responsible to ensure that passengers can 
disembark the aircraft. Cathay Pacific adds that the burden to 
coordinate plans should be on all the stakeholders, while Malaysia 
Airlines does not support coordinating delay contingency plans with CBP 
and TSA, but thinks those agencies should design their own plans. 
Cathay Pacific notes that not all airports can handle aircraft carrying 
300+ passengers and states that airports not suitable for deplaning 
international passengers should fall outside the scope of the proposed 
rules.
    Of the travel agents and other industry group commenters, ASTA 
supports extending the rule to include coordination with CBP and TSA. 
NBTA expresses concern that costs associated with requiring 
coordination with TSA and CBP may outweigh the benefits and may be 
passed on to the business traveler. As such, NBTA thinks DOT should 
develop a clearer picture of cost-benefits before implementing this 
provision. TUI believes that it is not necessary to coordinate plans 
with TSA or CBP, and is concerned that this would add another layer of 
planning.
    Of the consumer and consumer group commenters, CTA supports rules 
being promulgated by CBP and TSA that will allow passengers on inbound 
international flights forced to land at a diversion airport to be 
processed, as does the AAPR, Flyersrights.org and the Consumers Union. 
Dallas/Fort Worth Airport supports requiring carriers to coordinate 
plans with CBP and TSA and states that plans should be in place to deal 
with the process of handling international passengers and allowing them 
access to terminal facilities at small and medium size airports with no 
CBP services. ACI applauds DOT for proposing to expand coordination to 
TSA and CBP.
    DOT Response: After considering all the comments, the Department is 
adopting the requirement that carriers coordinate plans with CBP and 
TSA at large, medium, small, and non-hub airports that they regularly 
serve, including at diversion airports they plan to utilize. Because 
tarmac delays are a particular problem in situations where flights must 
be diverted from their intended destination airports, this rule 
requires carriers to coordinate their plans with airports that serve as 
diversion airports for such operations. As recommended by the Tarmac 
Delay Task Force, it is also important for carriers to include in their 
coordination efforts appropriate government authorities such as Customs 
and Border Protection and the Transportation

[[Page 23118]]

Security Administration, when appropriate.
    In adopting this requirement, we note that more than one incident 
of concern to the Department has occurred at a diversion airport where 
passengers could not deplane the aircraft due at least in part to 
security concerns or issues with processing international passengers. 
It is important to ensure that there is a contingency plan in place in 
order to address the objective of deplaning passengers in those 
situations. The Department is actively working with TSA and CBP to 
develop policies and procedures in order to assist carriers with 
coordinating their plans and complying with this regulation. We would 
consider an airline to have complied with the requirement to coordinate 
its plan with CBP and TSA if the carrier submits its plan to CBP's 
Regional Director and TSA's Federal Security Director for that airport 
and considers any issues raised in response to those agencies.
F. Passenger Notification
    The NPRM: In the NPRM we proposed to require that U.S. and foreign 
air carriers update passengers every 30 minutes during a tarmac delay 
regarding the status of their flight and the reasons for the tarmac 
delay. We also proposed that carriers announce that passengers have the 
opportunity to deplane the aircraft when the flight is delayed and the 
doors are open. In proposing these requirements, the Department gave 
consideration to passengers' frustration with lack of communication by 
carrier personnel about the reasons a flight is experiencing a long 
tarmac delay. We noted that it did not seem unreasonable or unduly 
burdensome to require carriers to address this issue and verbally 
inform passengers as to the flight's operational status on a regular 
basis during a lengthy tarmac delay. We did not anticipate that a 
carrier's flight crews will know every nuance of the reason for the 
delay, but we noted our expectation that they inform passengers of the 
reasons of which they are aware and make reasonable attempts to acquire 
information about the reasons for that delay.
    We also invited comment on whether carriers should be required to 
announce that passengers may deplane from an aircraft that is at the 
gate or other disembarkation area with a door open. The Department's 
Office of Aviation Enforcement and Proceedings had previously explained 
that a tarmac delay begins when passengers no longer have an option to 
get off an aircraft, which usually occurs when the doors of the 
aircraft are closed, and has encouraged carriers to announce to 
passengers on flights that remain at the gate with the doors open for 
lengthy periods that the passengers are allowed off the aircraft if 
that is the case. However, we noted that such an announcement is not 
explicitly required in the existing rule. Consequently, we sought 
comment on the benefit to consumers of mandating such announcements and 
asked commenters, including carriers and carrier associations, to 
address any costs and/or operational concerns related to implementing a 
rule requiring such announcements.
    Comments: Non-U.S. carrier and carrier association comments 
generally object to the proposal to update passengers every 30 minutes 
during a tarmac delay regarding the status of their flight and the 
reasons for the tarmac delay, characterizing it as unnecessary. IACA 
states that notifying passengers every 30 minutes as to reason for a 
tarmac delay is unnecessary overregulation. Some foreign carriers, such 
as Air France and KLM note that requiring announcements every 30 
minutes will have unintended consequences and state that keeping 
passengers informed is already important to carriers and a regulation 
is not needed. Other carriers, such as Qantas and JetStar, agree that 
notifying passengers every 30 minutes is reasonable, but state that too 
much detail may lead to false expectations on the part of the 
passengers. AACA expresses concern about the broad language regarding 
the format of communication and when a carrier should be aware of 
information to provide to the passenger, and the ability of airlines to 
prove they have relayed information to the passenger. NACC does not 
support updates every 30 minutes as this could result in relaying 
incomplete or inaccurate information to the passengers.
    U.S. carriers and carrier association commenters generally agree 
that it would be beneficial for passengers to be updated frequently on 
flight status changes when there is a tarmac delay but expressed 
concern that carriers are not always updated by FAA on a timely basis. 
Of the travel agents and other industry group commenters, ASTA supports 
the provision for carriers to make tarmac delay announcements every 30 
minutes. However, TUI Travel does not believe DOT should be overly 
prescriptive or detail the circumstances or time intervals upon which 
updates on delays should be given, but agrees that information needs to 
be given and updated at regular intervals.
    Consumers and consumer group commenters support a requirement to 
provide updates every 30 minutes. More specifically, AAPR and 
Flyersrights.org fully support requiring carriers to communicate with 
passengers during delays. Of the airport industry commenters, the AAAE 
agrees that essential communication with passengers is necessary. The 
New York State Consumer Protection Board adds that communication with 
passengers during a delay is important because failure to update the 
flight's status adds to the frustration caused by the situation. As 
such, it strongly supports the proposal that air carriers update 
passengers every 30 minutes during a delay.
    We received various differing comments on whether carriers should 
be required to announce that passengers may deplane from an aircraft 
that is at the gate or other disembarkation area with the door open. 
Spirit Airlines opposes DOT requiring carriers to permit passenger to 
leave an aircraft that remains at the gate for a delay of less than 
three hours but notes that its practice is to permit deplaning after 
two hours. It states that deplaning could create operational problems 
and raise costs and notes that the window of time to enplane may be 
small, passengers may be hard to locate and re-boarding will be time 
consuming and delay departure. Spirit believes that the airline can 
exercise the best judgment regarding whether passenger should be 
allowed to deplane.
    IATA also does not support the proposal to announce that passengers 
may deplane from an aircraft with the door open and states that the 
option to deplane raises a number of issues (e.g. removing baggage if a 
passenger doesn't travel, DHS personal data accountability issues, 
passenger manifest issues, length of time to deplane and enplane large 
aircraft, short windows for departure). Comments of AEA and foreign 
airlines' comments are similar to IATA's. Many foreign carriers object 
to the proposal to notify passengers that they can deplane due to 
various operational concerns similar to those posited by IATA and other 
foreign carrier associations. ALTA raises additional concerns with 
safety issues, and questions who will have control over passengers that 
temporarily deplane and, miss flights. Air France and KLM also state 
that a carrier should be given the option to make the announcement that 
passengers can deplane depending on the specific circumstances. Air 
Tahiti asks for clarification on whether there is a minimum duration an 
air carrier must wait for passenger to re-enplane the

[[Page 23119]]

aircraft and whether deplaned passengers' baggage must be deplaned.
    CTA states carriers should be required to communicate with 
passengers on a regular basis and agrees that carriers should inform 
passengers during delays while the aircraft is at a loading bridge with 
its doors open that they may deplane at any time, to stretch their 
legs, to be rebooked on another flight or to cancel their flight and 
get a refund. NBTA also supports this provision.
    DOT Response: After considering the comments received, the 
Department has decided to require that carriers notify passengers every 
30 minutes about the status of a tarmac delay, including the reasons 
for the delay if known. In implementing this requirement, we note that 
we expect the carrier to make reasonable attempts to acquire 
information about the status of the delay and to provide this 
information to consumers. A carrier would not be held responsible for 
failing to provide a status that was not known to it so long as the 
carrier made reasonable efforts to find out the status.
    We have also decided to require U.S. and foreign air carriers to 
notify passengers that they can deplane from an aircraft that is at the 
gate or another disembarkation area with the door open, if that is the 
case. The purpose of this requirement is to address problems that have 
arisen since the first tarmac delay rule has been in effect where U.S. 
carriers have asserted that the three hour clock should not yet be 
running but where passengers did not know that the door to the aircraft 
was open and that they had the option to get off of the aircraft, 
particularly on a departure delay at the gate or on large aircraft. We 
are not requiring carriers to provide passengers the opportunity to 
deplane in less than three hours but simply to inform them that the 
opportunity to deplane exists, if it does. Of course, in situations 
where an aircraft is at the gate with the door open and passengers are 
not allowed off the aircraft, the tarmac delay begins at the point when 
passengers are no longer permitted to deplane and not when the doors of 
the aircraft are shut.
    As for commenters' concerns with reconciling passenger manifests 
and dealing with the checked baggage of passengers who choose to 
deplane, we are not requiring airlines to re-board a passenger who 
chooses to deplane and therefore misses a flight, or to remove the 
checked baggage of a passenger that has deplaned. DHS/TSA also doesn't 
require that passenger's checked baggage be removed if the passenger is 
no longer on that flight. We encourage airlines to announce to 
passengers that they are deplaning at their own risk and that the 
flight could depart at any time without them if this is the case.
G. Code-Share Flights
    The NPRM: We sought comment on whether, in the case of a code-share 
flight, we should expand coverage of the requirement to adopt tarmac 
delay contingency plans so that the obligation to adopt such a plan and 
adhere to its terms is not only the responsibility of the operating 
carrier but also the carrier under whose code the service is marketed, 
if different.
    Comments: Of the U.S. carrier and carrier association commenters, 
ATA states that the operating carrier has sole operating authority and 
is in sole control of how a passenger is treated, so it is unreasonable 
to also hold the marketing carrier accountable, especially if the 
contingency plans differ or are in conflict. The U.S. carriers that 
commented on this issue concur with ATA. RAA disagrees and states that, 
if DOT insists that operating carriers adopt contingency plans, it 
should place primary responsibility for adoption and compliance with 
the plan on the marketing carrier. RAA asserts that carriers that hold 
out, sell and ticket passengers should have sole responsibility to the 
Department and that liability of the operating carrier should be 
determined by its contract with the marketing carrier.
    Of the non-U.S. carrier and carrier association commenters, IATA 
believes that only the operating carrier should be responsible for the 
terms of the contingency plan. AEA and ALTA, among others, concur with 
IATA. Of the foreign carriers that commented, most believe that only 
operating carriers should be responsible in a code-share situation 
based on their assertion that the operating carrier has responsibility 
for how the passengers are treated. Some commenters also note that the 
marketing carrier might not operate its own aircraft to all of the 
airports served by its code-share partners and thus would not have a 
relationship with those airport authorities. Others, such as Air Tahiti 
and Swiss International, note that the proposed regulations fail to 
consider the intricacies of the code-share relationship and suggest 
that there may be issues with collusion and antitrust concerns in some 
jurisdictions.
    We received few comments from travel agents and other travel 
industry commenters on this issue. ASTA believes that code-share 
partners should be responsible for harmonizing their consumer 
protection processes so consumers don't worry about which carrier does 
the marketing, ticketing or flying. Among the consumer and consumer 
group comments, CTA states that given the expansion of code-shares and 
with the antitrust immunity granted to airline alliances, there should 
be no difference between flights operated by U.S. or foreign carriers. 
AAPR supports expanding coverage of the requirement to adopt tarmac 
delay contingency plans to the carrier under whose code the service is 
marketed if different than the operating carrier.
    DOT Response: After considering all the comments, the Department 
has decided to require that the tarmac delay contingency plan of the 
carrier under whose code the service is marketed governs if different 
from the plan of the operating carrier, unless the marketing carrier 
specifies in its contract of carriage that the operating carrier's plan 
governs. In adopting this rule, we have considered the comments stating 
that the operating carrier should be responsible for following the 
terms of a plan, as it is in the best position to address passenger 
concerns in the event of a tarmac delay. However, on balance, we have 
concluded that the expectation of the types of services a passenger 
will be provided is based on the information given to him or her by the 
marketing carrier, as this is the carrier that held out, sold, and 
ticketed passengers for the flight. It is reasonable for a consumer to 
expect the marketing carrier's tarmac delay contingency plan to apply 
unless the marketing carrier specifies in its contract of carriage that 
the operating carrier's tarmac delay plan governs. Irrespective of 
whether the marketing carrier's or operating carrier's contingency plan 
governs in a particular situation, we intend to hold both the marketing 
carrier and the operating carrier (i.e., the carrier that sold the 
passenger a ticket under its name as well as the carrier that operates 
the aircraft in which that passenger travels) legally responsible. We 
encourage code-share partners to the extent possible to align their 
tarmac delay contingency plans. In situations where there are multiple 
marketing carriers on a single flight and the marketing carriers have 
not specified in their contracts of carriage that the operating 
carrier's plan governs, it becomes even more critical that the 
carriers' plans are aligned. If not, several different contingency 
plans may apply to passengers on the same flight.
H. Retention of Records
    The NPRM: As is the case for U.S. carriers under the existing rule, 
the NPRM proposed to require foreign carriers to retain for two years 
the following information on any tarmac

[[Page 23120]]

delay that lasts at least three hours: the length of the delay, the 
specific cause of the delay, and the steps taken to minimize hardships 
for passengers (including providing food and water, maintaining 
lavatories, and providing medical assistance); whether the flight 
ultimately took off (in the case of a departure delay or diversion) or 
returned to the gate; and an explanation for any tarmac delay that 
exceeded three hours, including why the aircraft did not return to the 
gate by the three-hour mark.
    Comments: We received few comments on this issue. Of the carriers 
and carrier associations that did comment, they expressed concerns that 
this provision would be burdensome and time consuming.
    DOT Response: The requirement to retain tarmac delay records 
already applies to U.S. carriers. We are extending it here to foreign 
carriers operating passenger service to and from the U.S. on at least 
one aircraft with a passenger capacity of 30 or more seats. The tarmac 
delay information that the Department is requiring foreign airlines to 
retain is not available to it through other means. This information 
will help the Department obtain a more complete picture about lengthy 
tarmac delays and ensure carrier compliance with the tarmac delay 
requirements. The Department also believes that the requirement to 
retain tarmac delay data would not be burdensome for carriers, since we 
believe most carriers would as a matter of good business practice, 
obtain this information for their own purposes and, in any event, there 
are relatively few tarmac delays of more than three hours. In addition, 
the Department is not prescribing the manner in which this information 
must be kept and there is no requirement that a carrier submit the 
information to the Department unless specifically requested to do so, 
all of which should reduce any costs associated with this requirement.

2. Tarmac Delay Data

    The NPRM: The proposed rule would require any U.S. or foreign 
carrier that operates passenger service (charter or scheduled) to, from 
or within the U.S. using any aircraft with a passenger capacity of 30 
or more seats to submit monthly to the Department a set of data 
regarding tarmac delays of three hours or more at a U.S. airport to the 
extent that the carrier doesn't already provide such data to the 
Department. If a covered carrier has no flight with 3-hour tarmac 
delays, the proposed rule would require the carrier to submit a 
negative report, i.e., a report stating there are no 3-hour tarmac 
times. The report would be due within 15 days after the end of each 
month being reported.
    Reporting carriers (carriers that account for at least one percent 
of domestic scheduled passenger revenue which in calendar year 2009 
consisted of the 16 largest U.S. carriers by scheduled passenger 
revenue plus two carriers that voluntarily file under Part 234) already 
file with the Department on-time flight performance data which includes 
all the data fields proposed to be reported here and more for their 
domestic scheduled flights pursuant to 14 CFR part 234. In recognition 
of this fact, the NPRM proposed that these U.S. carriers file tarmac 
delay data only for other types of transportation covered by the 
proposed rule, i.e., their charter and international flights. The NPRM 
proposed to require other U.S. carriers and foreign carriers to provide 
data on tarmac delays that occurred at a U.S. airport and lasted for 
three hours or more for any of their flights--scheduled and charter 
flights as well as domestic and international flights. We sought 
comments on whether we should limit the tarmac delay reporting 
requirement to U.S. and foreign air carriers that operate large 
aircraft, i.e., aircraft originally designed to have a maximum 
passenger capacity of 60 seats or more.
    Comments: Individual consumers or consumer groups who submitted 
comments on this proposal unanimously support this proposal. Consumers 
Union states that it supports expanding the pool of reporting carriers 
to all U.S. and foreign carriers that operate any aircraft with 30 or 
more seats. It maintains that such a requirement is particularly 
important because it will reach many airline passengers who are 
currently not protected by these policies. One individual commenter 
states that equal treatment for all carriers is necessary to ensure 
competitive equality. Consumers Union also supports requiring Part 234 
reporting carriers to provide tarmac delay data for public charter and 
international flights.
    The Association for Airline Passenger Rights points out that the 
Department is attentive to the potential burden to small carriers and 
has narrowed the data fields it proposed to be reported for tarmac 
delays from the comprehensive on-time reporting scheme that exists. One 
commenter adds that most carriers already collect some of the data 
required under this proposal so it should not be overly burdensome for 
carriers to comply with the requirements. Several commenters from the 
Regulation Room state that technology development makes compliance 
relatively easy.
    A few consumers and consumer organization commenters believe that 
the Department should go further in this respect. FlyersRights.org 
suggests that, in addition to filing reports under this Part and 
complying with the record retention requirement in Part 259, the 
Department should require carriers to submit a comprehensive written 
report within 14 days of the occurrence of any lengthy tarmac delay. 
One individual commenter asserts that data should be reported for 
tarmac delays of one hour or more to reflect a better picture of the 
tarmac delay problem.
    Among U.S. carriers and carrier associations that commented on this 
proposal, ATA states that it generally supports expanding the reporting 
carrier pool. RAA, on the other hand, argues that all carriers that are 
not required to report tarmac delay data under Part 234 should be 
exempted from this reporting requirement. RAA reasons that the new 
reporting requirements are not necessary because most carriers, 
including carriers not covered under Part 234, are already required to 
retain tarmac delay data for two years. Thus, according to RAA, the 
Department may request such information for policy-making purpose 
whenever necessary. Additionally, RAA contends that the Department 
failed to provide a quantifiable cost/benefit analysis in the NPRM to 
justify such a requirement. NACA expresses its uncertainty regarding 
the purpose of requiring smaller carriers (which it defines as those 
that operate fewer than 25 aircraft) to report tarmac delay data. As a 
compromise, NACA suggests that carriers should be required to file 
tarmac delay reports under any rule only if during any given month the 
occurrences of tarmac delays have exceeded a certain threshold, e.g., 
more than 10 incidents.
    Comments provided by foreign carriers and carrier associations 
generally oppose this proposal or request that the reporting obligation 
be limited. Several commenters contend that the Department has not 
provided justification as to how the proposed data collection from 
foreign carriers would address the causes of tarmac delays and benefit 
consumers. Some commenters take the position that requiring foreign 
carriers to report tarmac delay data is not necessary because 
international flights operate less frequently than domestic flights and 
tarmac delay incidents for international flights are rare. Thus, 
according to these commenters, the cost for carriers to set up a 
reporting infrastructure outweighs the benefit. Furthermore, they 
believe it is inappropriate to require smaller

[[Page 23121]]

carriers to submit and retain tarmac delay data due to their lesser 
administrative resources and the small segment of the market these 
carriers serve. A number of commenters state that tarmac delays usually 
occur as the result of airport infrastructure problems. Therefore, 
these commenters believe that the Department should require airports to 
report this data. Likewise, some carriers argue that the data collected 
from this proposal is readily available from FAA's Air Traffic Control 
System Command Center. A few commenters note that the burden on foreign 
carriers is increased if the Department maintains the proposal that 
negative reports must be filed when no reportable tarmac delay has 
occurred during a month.
    Qantas and JetStar Airways state that they would not oppose a rule 
if it imposed the reporting responsibility on operating carriers 
instead of the marketing code-share partners and limited the reporting 
fields to the identification of aircraft, airport, relevant times, and 
a brief explanation for the tarmac delay. They also request that easy 
methods of report submission should be permitted, such as email 
submission.
    Virgin Atlantic raises the concern that publishing reported data 
may be misleading to consumers who tend to judge a carrier's 
performance based on raw tarmac delay records, and overlook the causes 
for such delay, which could be factors that are not under carrier's 
control. Lufthansa also requests that any publication of the tarmac 
delay data by the Department should also include the cause of the 
delay. National Airlines Council of Canada further states that such 
misjudgments will cause undue commercial damage to Canadian carriers 
that face the most challenging weather conditions, which could 
contribute to more tarmac delays.
    Monarch Airlines and TUI Travel contend that foreign charter 
carriers that operate roundtrip flights to limited U.S. destinations 
should be exempted from the reporting requirements. In addition to 
consumers and industry commenters, NBTA and ACI-NA both provided 
comments in support of the Department's proposal.
    DOT Response: After thoroughly considering all the comments 
received, the Department continues to believe that the proposed data 
collection requirement is crucial to obtaining a more complete picture 
of the tarmac delays at U.S. airports. Without such data, we do not 
have adequate statistical foundations to support a determination 
regarding whether lengthy tarmac delays are or will be a significant 
problem for consumers on international flights or charter flights. We 
reiterate that the causes of lengthy tarmac delays are comprehensive 
and there is not a universal solution that would cure all problems at 
all airports. We continue to believe that a more complete picture of 
lengthy tarmac delays is the first step to obtaining a baseline that 
the Department can use to analyze the issue by carrier, by region/
airport, by month, or by the type of flight, as appropriate.
    We note that several recent tarmac delays that attracted 
significant public attention were international arrivals. Tarmac delays 
involving international flights, although rare, tend to be particularly 
lengthy and complicated. In that regard, we reiterate that collecting 
tarmac delay information for international flights is important. The 
data that we are seeking to obtain here are not available to us through 
other means. Commenters are mistaken when they assert that the FAA has 
this information readily available. Furthermore, the publication of the 
tarmac delay data would increase public awareness of the issue, 
providing incentives for airline management to focus on addressing 
tarmac delay problems.
    With respect to whether the costs for foreign carriers to set up 
the reporting infrastructure justifies the benefits obtained from such 
reports in light of the relatively less frequent occurrence of tarmac 
delay incidents on international flights, we note that none of the 
commenters opposing extension of the reporting requirement to foreign 
carriers has provided any cost/benefit analysis in support of their 
position. We understand that most data contained in the reporting 
fields under this proposal are already collected by the carriers 
internally. BTS already has a system in place to accept reports 
electronically. Reporting to the BTS would incur a one-time IT 
infrastructure setup cost and minimal maintenance expenditure. We do 
not expect these costs to be significant.
    We have also considered some commenters' suggestion that we should 
not require a negative report to be filed when no reportable tarmac 
delay occurred during a given month. Based on data submitted by the 
reporting carriers, during the past six months the total number of 
tarmac delay incidents that lasted for two hours or more at U.S. 
airports was less than 0.1% of the total domestic scheduled passenger 
flights operated by those carriers for each month. We agree that these 
data indicate that international flights that experience reportable 
tarmac delays will only represent a fraction of the total number of 
flights. As such, the vast majority of carriers filing reports if the 
rule is adopted as proposed would be filing a negative report for most 
months. Although negative reports are an effective enforcement tool for 
ensuring accurate reporting of tarmac delay, we have decided not to 
require negative reports to be filed, in order to further reduce the 
carriers' burden in complying with this rule.
    With respect to some foreign carriers' suggestion that for code-
share arrangements we should require the marketing carrier rather than 
the operating carrier to file the report, we are of the opinion that it 
is up to the code-share partners to designate who has the 
responsibility to file the report. Based on each carrier's resources 
and ability, it may be more convenient for a foreign carrier to use its 
U.S. code-share partner to file the reports, but the Department will 
not dictate which carrier has the reporting responsibility and will 
hold both marketing and operating carriers legally responsible if data 
for a reportable tarmac delay are not timely or accurately filed.
    Regarding some foreign carriers' comments on roundtrip charter 
services between foreign points and U.S. destinations, we agree that as 
long as these flights carry only passengers that originate at a foreign 
point and do not pick up any U.S.- originating passengers, tarmac 
delays on those flights will have minimal impact on U.S. consumers. 
Moreover, the Department is not applying its requirement for carriers 
to adopt contingency plans for lengthy tarmac delays to such 
operations. Therefore, we have decided that this reporting requirement 
should not apply to such flights.
    We have also considered some carriers' concern that publishing 
tarmac delay information may lead the public to compare carriers' 
performance quality based on the raw data, while carriers may not be at 
fault for all tarmac delay incidents. We are not convinced that this 
will create overall false perceptions. The public is generally well 
informed about the causes contributing to a lengthy tarmac delay, not 
only through Departmental reports and press releases, but also through 
supplemental resources such as the media and the Internet. This 
information will normally enable the public to look beyond the net 
number of tarmac delays by each carrier. Moreover, carriers are always 
free to provide the public information about the cause of their tarmac 
delays, so long as that information is correct and not misleading.

[[Page 23122]]

    To address the suggestion of some consumer commenters that we 
should require carriers to report tarmac delays of less than three 
hours, we note that the three-hour standard is consistent with the 
current tarmac delay contingency plan regulations and have reached the 
conclusion that this threshold represents the proper balance between 
the reporting burden placed on carriers and the benefits to the public. 
In addition, we do not believe it is necessary to mandate that a 
detailed explanation for each tarmac delay be filed with the tarmac 
delay report. Such detailed explanation is of little use to BTS, which 
is a data collecting and analysis agency. If the Department believes 
that a particular tarmac delay warrants further investigation, its 
Aviation Enforcement Office will request information from the carrier, 
which the carrier is required to retain for tarmac delays of more than 
3 hours.
    Finally, we would like to provide further clarification regarding 
the reporting duties for carriers that are currently filing Part 234 
Airline Service Quality Performance Reports. According to BTS Technical 
Directive 20, issued on November 5, 2010, and effective on 
January 1, 2011, there are 15 U.S. carriers whose domestic scheduled 
passenger revenues meet the threshold for mandatory filing of Part 234 
reports. These carriers are identified as Part 234 ``reporting air 
carriers.'' The carriers on this list may change from time to time due 
to carriers' revenue fluctuation and corporate restructuring, and BTS 
updates the list annually. In addition to the 15 reporting air 
carriers, Express Jet will submit on-time data under Part 234 in 2011 
as a ``volunteer air carrier.'' Although Part 234 only requires data 
for domestic scheduled passenger flights to and from a large hub U.S. 
airport, all reporting carriers, including the volunteer air carriers, 
are currently filing data for all domestic scheduled flights to and 
from all U.S. airports, including medium, small, and non-hub airports. 
As long as they continue to do so, they are only required to file 
tarmac delay data for international and charter flights to a U.S. 
airport under the new reporting regulation, 14 CFR part 244. However, 
if any Part 234 reporting carrier decides to report only the minimum 
required data under Part 234, i.e., on-time performance data for 
domestic scheduled flights to and from large hub U.S. airports, it must 
report any tarmac delay of three hours or more for domestic scheduled 
flights to and from a medium, small, or non-hub U.S. airport under Part 
244. The same rationale applies to any volunteer air carriers under 
Part 234. If a volunteer air carrier ceases to file any or all reports 
under 234, it must file tarmac delay data for reportable flights under 
Part 244. As we have explained in the NPRM, the purpose of Part 244 is 
to fill in the tarmac delay data gap that is not covered by Part 234. 
In that regard, no carrier is required to file both Part 234 and Part 
244 reports for the same flight.

3. Customer Service Plans

A. Entities Covered
    The NPRM: The NPRM proposed to increase the protections afforded 
consumers in the first Enhancing Airline Passenger Protections rule by 
requiring foreign air carriers to adopt, follow, and audit customer 
service plans, as covered U.S. carriers have been required to do since 
April 2010. We proposed to cover foreign air carriers operating 
scheduled passenger service to and from the U.S. that use any aircraft 
designed to have a passenger capacity of 30 or more. We noted that the 
rule would apply to all flights to and from the U.S. of those carriers, 
including flights involving aircraft with fewer than 30 seats, if a 
carrier operates any aircraft with 30 or more passenger seats to and 
from the U.S. We asked interested persons to comment on whether the 
proposed requirement for foreign air carriers to adopt, follow and 
audit customer service plans should be narrowed in any fashion. (e.g., 
should never apply to aircraft with fewer than 30 seats).
    Comments: Of the foreign-carrier industry commenters, the majority 
expressed their strong belief that the customer service plans 
requirement should not be extended to foreign carriers. IACA states 
that DOT's regulatory proposals ignore the fact that airlines have 
designed customer service in a way to attract their customer and 
asserts that these provisions intervene in the airline's business and 
service practices. IATA strongly opposes any customer service 
requirements being imposed on foreign carriers unless those 
requirements are harmonized with the regulations of other 
jurisdictions. IACA and IATA also assert that the proposals are 
extraterritorial in that they would apply to all flights to and from 
the U.S. and could be interpreted in such a way that these obligations 
would also cover sales generated outside the U.S. AACO, AEA and ALTA 
concur with IATA.
    Of the foreign air carrier commenters, LAN Airlines (LAN Ecuador, 
LAN Peru, LAN Argentina), Emirates, and SAS, among others, oppose DOT 
requiring them to adopt customer service provisions. Swiss 
International contends that the application of customer service plans 
to the conduct of foreign carriers on foreign soil or in foreign 
airspace poses several issues under U.S. and international law related 
to extraterritorial application of U.S. regulations. TAP Portugal makes 
similar comments regarding extraterritorial concerns, as do, among 
others, Lufthansa and Austrian Airlines. Other carriers, such as 
British Airways, note that they are already subject to customer service 
provisions in their own countries (e.g. EU provisions) and, therefore, 
the Department's proposal is unnecessary and redundant, as well as 
potentially inconsistent with those countries' requirements. Singapore 
Airlines adds that competition is more effective than government 
mandates in improving customer service, and the Department does not 
need to be involved in customer service matters.
    All Nippon states that the customer service provisions should apply 
only to sales made within the U.S. Qantas states that it is not 
necessary, practical or efficient to require foreign carriers to 
provide customers with additional or different customer service plans 
when carriers already have such provisions in place (e.g., Qantas has a 
Customer Charter on its website) and states that any requirement should 
be limited to carriers that do not already have a customer service plan 
in place. JetStar essentially concurs with Qantas. JAL makes similar 
comments and notes that some of its standards are more stringent than 
the service requirements proposed and that foreign airlines compete on 
service and should determine their own service standards. JAL also 
expresses concern about the potential costs associated with this 
provision, characterizes it as an intrusive service regulation and 
states that it is not justified. VivaAerobus opposes the Department 
requiring small carriers to have a customer service plan. The 
Washington Aviation Assembly, representing 35 Embassies in the U.S., 
notes general issues with extraterritoriality, operational consequences 
for foreign airlines, and the potential economic burden for foreign 
airlines if they are required to comply with the customer service 
provisions.
    As for U.S. airlines and associations, ATA expresses concern that 
DOT requiring foreign carriers to adopt a customer service plan could 
drive foreign governments to retaliate against U.S. carriers operating 
outside the U.S., which could create conflicting standards and 
unnecessarily drive additional costs. Among the travel agency interests 
that commented, ASTA

[[Page 23123]]

agrees that customer service plan rules and standards should apply 
equally to foreign air carriers, with no aircraft-size exceptions. ITSA 
supports in general the Department's efforts to provide passengers with 
the means to make better informed decisions and more informed choices 
in travel.
    Commenters on ``Regulation Room,'' who primarily identified 
themselves as air travelers, generally support DOT's proposal. However, 
some of those that commented oppose the regulation and fear the costs 
will be passed on to consumers. The consumer groups that commented on 
this issue generally supported the provision and note that passengers 
should have the ability to know that certain customer service standards 
will be defined and met regardless of the carrier that a passenger 
chooses to travel on. CTA notes that foreign carriers operating as 
members of any international airline alliance must be included in these 
rules. AAPR, Consumers Union and Flyersrights.org generally support the 
proposal to require foreign air carriers to adopt, follow, and audit 
customer service plans. NBTA supports extending customer service 
provisions to foreign carriers using aircraft with 30 or more passenger 
seats.
    DOT Response: After fully considering the comments, we have decided 
to require foreign carriers that operate scheduled passenger service to 
and from the U.S. using any aircraft with 30 or more seats to adopt, 
follow and audit customer service plans. As noted previously, a 
substantial number of passengers travel to and from the U.S. on flights 
operated by foreign air carriers and the Department continues to 
believe that it is important to protect these passengers, as well as to 
be consistent with the application of our consumer protection rules to 
both U.S. and foreign carriers.
    Foreign carriers' and others entities' concerns with 
extraterritoriality have persuaded us, however, that some 
clarifications are needed. First, we want to point out that out of the 
twelve customer service commitments in this final rule, the substance 
of two of them already applies to foreign air carriers under existing 
DOT rules, i.e., 14 CFR part 250 concerning passengers who are 
``bumped'' from flights that are oversold and 14 CFR part 382 which 
addresses air travel of passengers with disabilities. Prior to issuing 
those final rules, the Department addressed the issue of 
extraterritoriality and determined how best to apply each of these 
requirements to foreign air carriers. For instance, the Department 
determined not to apply its oversales rule to international flights 
inbound to the United States and determined not to apply U.S. 
disability rules to a foreign carrier simply because a foreign 
carrier's flight between two foreign points carried passengers under a 
code-sharing arrangement with a U.S. carrier. The manner in which we 
are applying these existing requirements to foreign air carriers 
through the customer service commitments is not new and is not an 
extraterritorial extension of U.S. jurisdiction.
    We note also that several of the other customer service commitments 
are merely reinforcing new requirements imposed elsewhere in this final 
rule, i.e., 14 CFR 259.8 which addresses notification of delays and 
cancellations, 14 CFR 259.4 which addresses lengthy tarmac delays, and 
14 CFR 259.7 which addresses responding to consumer complaints. 
Concerns with extraterritoriality are specifically addressed in those 
sections of this preamble that deal with those issues. In this final 
rule, for example, we explain in the tarmac delay section that the 
requirement to adopt and follow a tarmac delay contingency plan applies 
only to tarmac delay events that occur at a covered U.S. airport. 
Likewise, we clarify in the section on known delays, cancellations and 
diversions that the requirement to notify consumers of flight 
irregularities on a carrier's website and via the carrier's telephone 
reservation system applies to a foreign carrier only if the carrier 
markets to U.S. consumers. We also make clear that the requirement to 
make this information available in the boarding gate areas applies only 
to boarding gate areas at a U.S. airport. We believe that these types 
of clarifications address the foreign carriers' main objections, which 
are the application of the customer service plan to sales made outside 
the U.S. and to the conduct of foreign carriers on foreign soil.
    We have made similar changes to other customer service commitments 
that involve foreign carriers' websites and reservation centers to 
ensure that we are not applying U.S. rules to a foreign carrier when 
that carrier does not market its services to the U.S. For example, the 
customer service commitment to disclose, among other things, 
cancellation policies and frequent flyer rules on the selling carrier's 
website and upon request from the selling carrier's telephone 
reservations staff or the commitment to disclose the availability of 
the lowest fare on a carrier's website or through its reservation 
center will apply to a foreign carrier only if it markets its services 
to U.S. consumers. We are also making changes to the customer service 
commitments related to services to be provided generally or services to 
be provided at the ticket counter and boarding gate area to specify 
that such action is required only at U.S. airports.
    Finally, we want to clarify that for purposes of this section, 
except as otherwise provided in individual customer service provisions 
in this section, a ``flight'' that a foreign carrier operates to and 
from the U.S. means a continuous journey in the same aircraft or with 
one flight number that begins or ends at a U.S. airport. For example, 
if a carrier were to operate flight 100, a direct flight from San 
Francisco to Singapore with a stop in Hong Kong, the customer service 
plan applies to both segments of this flight with respect to U.S.-
originating passengers. It would not apply to any Hong Kong originating 
passengers who board the aircraft there and go to Singapore. On the 
reverse routing, the plan would apply to passengers who board in 
Singapore or Hong Kong and travel to the U.S.; it would not apply to 
passengers boarding in Singapore whose destination is Hong Kong. 
Temporarily deplaning at the intermediate stop on a direct flight (Hong 
Kong in the above example) does not break the journey for purposes of 
the applicability of the customer service plan requirements for 
passengers who re-board and continue on that same flight operation. If 
an international passenger whose journey originates or terminates in 
the U.S. makes a connection to a flight with a different flight number, 
the carrier's customer service plan applies only to the direct flight 
to or from the U.S. In the case of change of gauge, all flight segments 
with the same flight number that begin or end in the U.S. are covered 
by the Customer Service Plan even if passengers must change aircraft 
due to a change of gauge.
    As for the comments concerning the cost involved in adopting 
customer service plans, we note that a number of carriers state that 
they already have customer service plans or similar plans in place and 
that these plans contain provisions similar or more stringent than 
those the Department is requiring them to adopt, or that their 
governments have similar requirements. To the extent provisions in 
existing plans are more stringent than the minimum standards set in 
this rule, carriers are encouraged to continue to apply these more 
stringent provisions. To the extent provisions in existing plans vary 
from our requirements, even if they are similar to them, it does not 
seem overly burdensome for a carrier to amend those plans with respect 
to flights to and from the U.S. to comply with this rule. Also, while 
we understand that some foreign

[[Page 23124]]

countries have rules requiring customer service standards in air 
carriage, we are not aware, nor are we convinced based on the comments 
received, that any of those rules or standards conflict with the 
requirements of this provision in a manner that would prevent a carrier 
from complying with both requirements.
B. Content of Customer Service Plan
    The NPRM: In the NPRM, we noted that under the final rule published 
on December 30, 2009, U.S. carriers are required to adopt customer 
service plans for their scheduled flights that address, at a minimum, 
the following service areas: (1) Offering the lowest fare available; 
(2) notifying consumers of known delays, cancellations, and diversions; 
(3) delivering baggage on time; (4) allowing reservations to be held or 
cancelled without penalty for a defined amount of time; (5) providing 
prompt ticket refunds; (6) properly accommodating disabled and special-
needs passengers, including during tarmac delays; (7) meeting 
customers' essential needs during lengthy on-board delays; (8) handling 
``bumped'' passengers in the case of oversales with fairness and 
consistency; (9) disclosing travel itinerary, cancellation policies, 
frequent flyer rules, and aircraft configuration; (10) ensuring good 
customer service from code-share partners; (11) ensuring responsiveness 
to customer complaints; and (12) identifying the services they provide 
to mitigate passenger inconveniences resulting from flight 
cancellations and misconnections. We proposed to extend the requirement 
to address these twelve subjects in the customer service plan to 
foreign air carriers and requested comment on whether any of these 
subjects would be inappropriate if applied to a foreign carrier.
    The NPRM also proposed to require that U.S. and foreign carriers' 
customer service plans meet minimum standards to ensure that the plans 
are specific and enforceable. The minimum standards that we proposed 
are as follows: (1) Offering the lowest fare available on the carrier's 
website, at the ticket counter, or when a customer calls the carrier's 
reservation center to inquire about a fare or to make a reservation; 
(2) notifying consumers in the boarding gate area, on board aircraft, 
and via a carrier's telephone reservation system and its website of 
known delays, cancellations, and diversions; (3) delivering baggage on 
time, including making every reasonable effort to return mishandled 
baggage within twenty-four hours and compensating passengers for 
reasonable expenses that result due to delay in delivery; (4) allowing 
reservations to be held at the quoted fare without payment, or 
cancelled without penalty, for at least twenty-four hours after the 
reservation is made; (5) where ticket refunds are due, providing prompt 
refunds for credit card purchases as required by 14 CFR 374.3 and 12 
CFR part 226, and for cash and check purchases within 20 days after 
receiving a complete refund request; (6) properly accommodating 
passengers with disabilities as required by 14 CFR part 382 and other 
special-needs passengers as set forth in the carrier's policies and 
procedures, including during lengthy tarmac delays; (7) meeting 
customers' essential needs during lengthy tarmac delays as required by 
14 CFR 259.4 and as provided for in each covered carrier's contingency 
plan; (8) handling ``bumped'' passengers with fairness and consistency 
in the case of oversales as required by 14 CFR part 250 and as 
described in each carrier's policies and procedures for determining 
boarding priority; (9) disclosing cancellation policies, frequent flyer 
rules, aircraft configuration, and lavatory availability on the selling 
carrier's website, and upon request, from the selling carrier's 
telephone reservations staff; (10) notifying consumers in a timely 
manner of changes in their travel itineraries; (11) ensuring good 
customer service from code-share partners operating a flight, including 
making reasonable efforts to ensure that its code-share partner(s) have 
comparable customer service plans or provide comparable customer 
service levels, or have adopted the identified carrier's customer 
service plan; (12) ensuring responsiveness to customer complaints as 
required by 14 CFR 259.7; and (13) identifying the services it provides 
to mitigate passenger inconveniences resulting from flight 
cancellations and misconnections.
    In addition, we invited comment on whether the minimum standards 
for any of the subjects contained in the customer service plans should 
be modified or enhanced in some way. With regard to delivering baggage 
on time, we solicited comment on whether we should also include as 
standards (1) that carriers reimburse passengers the fee charged to 
transport a bag if that bag is lost or not timely delivered, as well as 
(2) the time when a bag should be considered not to have been timely 
delivered (e.g., delivered on the same or earlier flight than the 
passenger, delivered within 2 hours of the passenger's arrival). With 
regard to providing prompt refunds, we sought comment on whether we 
should also include as a standard that carriers refund ticketed 
passengers, including those with non-refundable tickets, for flights 
that are canceled or significantly delayed if the passenger chooses not 
to travel as a result of the travel disruption. In addition, we 
requested comment on whether it is necessary to include as a standard 
the requirement that when a flight is cancelled carriers must refund 
not only the ticket price but also any fees for optional services that 
were charged to a passenger for that flight (e.g., baggage fees, 
``service charges'' for use of frequent flyer miles when the flight is 
canceled by the carrier). With respect to notifying passengers on board 
aircraft of delays, we sought comment on how often updates should be 
provided and whether we should require that passengers be advised when 
they may deplane from aircraft during lengthy tarmac delays.
    Finally, we requested comment as to whether it is workable to set 
minimum standards for any of the subjects contained in the customer 
service plans and invited those that oppose the notion of the 
Department setting minimum standards for customer service plans as 
unduly burdensome to provide evidence of the costs that they 
anticipate. We also sought comment on whether the Department should 
require airlines to address any other subject in their customer service 
plans. We specifically asked if mandatory disclosure to passengers and 
other interested parties of past delays or cancellations of particular 
flights before ticket purchase should be a new subject area covered in 
customer service plans.
    Comments: U.S. carriers and carrier associations are generally 
opposed to the Department setting minimum standards for the customer 
service plans, particularly if the Department requires that the plans 
be incorporated into the carriers' contracts of carriage. ATA notes 
that, although U.S. carriers are already required under the current 
regulation to address each of the proposed customer service plan 
topics, the current regulation does not mandate minimum requirements 
and allows carriers to set their own standards for their customer 
service plans based on their own particular circumstances. ATA asserts 
that for the Department to set the minimum standards for carriers' 
plans would face a major change to existing carrier policies in areas 
where U.S. carriers currently compete and could dampen innovation, harm 
competition and reduce the flying public's options. Many U.S. carriers 
concur with ATA.
    RAA is opposed not only to the establishment of minimum standards 
but also to any continued requirement for its members to adopt customer

[[Page 23125]]

service plans. RAA explains that most regional carriers do not offer 
fares, take reservations, ticket passengers, receive payment from 
passengers, provide refunds to passengers, or have their own frequent 
flyer rules or cancellation policies. RAA maintains that the subjects 
to be addressed in the customer service plan would be inappropriate if 
applied to an airline that does not hold out, market, sell tickets for 
its operations and asks that the customer service requirements apply 
only to carriers that hold out, market, sell and ticket air 
transportation.
    Most foreign carriers and carrier associations expressed strong 
opposition both to the requirement to have a customer service plan and 
for that plan to meet minimum standards set by the Department. A number 
of foreign carriers such as Air Berlin and associations such as IATA 
and IACA raised the issue of extraterritoriality and argued that the 
Department was overreaching as the customer service requirements could 
be interpreted in such a way as to cover sales generated outside the 
U.S. and to cover the conduct of foreign carriers on foreign soil or in 
foreign airspace. There were also assertions that the Department's 
regulatory proposals ignore the fact that airlines have designed their 
customer service initiatives in a way to attract customers and the fact 
that carrier customer service plan provisions are a way for carriers to 
differentiate their services. South African Airways contends that 
prescriptive regulations should not take the place of competitive 
forces, especially when there is no evidence of market failure. Virgin 
Atlantic, while agreeing that defining a baseline standard is 
acceptable, states that forcing all carriers to be the same denies them 
the right to compete commercially and does not allow carriers to 
innovate.
    Others raised the existence of customer service requirements 
imposed by other entities as a reason for the Department not to issue a 
rule in this area. For instance, Air France and KLM state that the 
customer service proposals should not be finalized as to EU carriers 
where they are inconsistent with or more stringent than EU regulations. 
Still other foreign carriers raised concerns that some of the minimum 
service levels are impracticable for a carrier to meet (for example, if 
a carrier sells a number of tickets via a travel agent and the 
passenger contact information is not passed on then the carrier may not 
have that passenger's contact information in order to advise them of a 
change in itinerary). Some carriers also expressed concerns that 
certain provisions may be outside of a carrier's control (e.g., ``good 
customer service'' from a code-share partner).
    Travel agent organizations such as ASTA and consumer groups such as 
AAPR, Flyersrights.org, NBTA, and CTA all support requiring carriers to 
adopt customer service plans and for those plans to meet the minimum 
standards as proposed in the NPRM. Most individual commenters also 
support these DOT proposals, but a few oppose the regulation as 
burdensome and fear the costs will be passed on to consumers. Many 
``Regulation Room'' commenters want the Department to go further in 
setting minimum standards and prohibiting certain practices.
    The Department received a number of comments on some of the minimum 
standards proposed to be included in the customer service plans as well 
as some of the questions we posed on modifying or enhancing these 
standards and we address those issues more fully below.
1. Offering the Lowest Fare Available
    Many foreign air carrier associations, including AACO and NACC, 
contend that requiring carriers to offer the lowest fare on the 
carrier's website, at the ticket counter, or when a customer calls the 
carrier's reservation center to inquire about a fare or make a 
reservation would interfere in airline business practices. ALTA seeks 
clarification on the meaning of ``offering the lowest fare available'' 
and asserts that a ``one size fits all'' fare will prejudice passengers 
by increasing fares and limiting competition.
    Among the foreign air carriers that commented, Cathay Pacific 
states it can only publish the fare at the time a request is made, as 
fares are driven by complex inventory and fare managing systems and a 
fare guarantee cannot be made. JetStar basically concurs and states 
that the proposal fails to take account of legitimate distribution and 
pricing practices. Qantas strongly opposes this requirement on the 
basis that it fails to take into account the numerous possible options 
and fare constructions that may be applicable to a consumer, and there 
may be a false perception that a carrier is not quoting the best price 
when the lowest priced inventory sells out. It is also concerned that 
carriers will not be able to enforce the proposed requirement against 
ticket agents and should not be responsible for ticket agent actions. 
British Airways states that it offers the lowest fare that meets 
customers' needs and its website allows consumers to find the lowest 
fare. Similarly, JAL states that it already offers the lowest fare on 
its website, at the ticket counter and via telephone reservations as 
appropriate. Singapore Airlines states that, if this requirement is 
adopted, the Department should confirm that this provision is intended 
to conform with ATA's Customers First initiative and should make it 
clear that the airline does not have to offer to a customer shopping 
via one point-of-sale the lowest fare available in any channel.
    Of the U.S. carriers that commented, Spirit Airlines (Spirit) 
opposes a requirement that all fares available on its website should be 
made available through its telephone reservation service. Should DOT 
impose such a standard, it must be limited to a carrier's generally 
available fares and not apply to special sales fares because many of 
these lower fares cannot be purchased over higher-cost channels.
2. Allowing Reservations To Be Held at the Quoted Fare
    A number of foreign carriers and carrier industry groups also 
expressed serious concerns with the proposal to allow reservations to 
be held at the quoted fare without payment, or cancelled without 
penalty, for at least twenty-four hours after the reservation is made 
and thought this provision may lead to inconsistent sales policies. For 
example, Air New Zealand strongly opposes this provision because it 
takes inventory off the market for the duration of the refund period, 
blocking it from sale to other customers and risking that the seat may 
not be sold again. The carrier points out that passengers have the 
option to buy refundable fares, and choosing whether to allow a 
passenger to hold a reservation without payment is a commercial 
decision. Air France and KLM oppose this proposal primarily for the 
reasons stated above, as does Qatar Airways. Alitalia opposes this 
proposal and thinks the airline should be the party that establishes 
commercial terms and conditions with its customers. Singapore Airlines 
states that it is not set up to permit reservation holds and 
reprogramming the system to do so is costly. It also notes that this 
proposal interferes with the free market and deprives other passengers 
of the lowest fare, as well as compromises an airline's ability to 
adjust to overnight currency fluctuations. British Airways notes that 
its current selling systems do not allow for reservations to be held 
without penalty, but passengers that book via call centers have a ``24 
hour cooling off'' period. It also states that consumers that visit 
BA.com have several opportunities to review exactly what they are 
booking and to confirm knowledge of details prior to booking.

[[Page 23126]]

    ATA strongly objects to a CSP proposal that would require a carrier 
to hold a reservation ``at the quoted fare'' for 24 hours for the 
following reasons: it eliminates the carrier's ability to sell these 
seats to another willing buyer; the DOT has not demonstrated a market 
failure that merits this action; a consumer could hold a reservation 
during the last 24 hours and then cancel, resulting in a seat that will 
never be sold; and this requirement would effectively prevent re-
pricing, which ordinarily happens multiple times a day.
    Of the U.S. carriers that commented, US Airways does not support 
adoption of a 24-hour standard as a rigid rule. The carrier suggests 
that DOT allow airlines flexibility to restrict refunds in certain 
situations in order to assure that the largest number of potential 
passengers have access to seats. Spirit states this proposal is an 
effort to impose on all airlines a practice that was common prior to 
deregulation. As a low cost carrier, it states that almost all low-fare 
carriers require payments at time of booking to guarantee the fare and 
that making tickets non-refundable is a practice that is critical to 
its ability to keep fares low. Should a consumer choose to, he or she 
can buy refundable tickets at a higher price. The carrier states that 
travel agents that book via global distribution systems (GDS) can hold 
a reservation (space only) for 24 hours without penalty and Spirit 
offers a 24 hour courtesy refund for bookings made via GDS, but no 
other procedure for refunds via travel agents can be accomplished due 
to limited GDS functions. In order to comply with this provision, 
Spirit states that it would have to substantially change its business 
model and incur large IT cost.
    Hawaiian Airlines (Hawaiian) notes that it has ``on-demand'' or 
``walk-up'' flights that run on a high frequency basis. As proposed, 
this provision would put the carrier in the position of turning 
inventory over to passengers who will make several reservations for a 
flight (within a 24 hour time period) but will pay for only one of the 
reservations, even though Hawaiian must retain a seat for them on each 
flight. It notes the rule could result in forcing Hawaiian to oversell 
flights to protect against the loss of seats and revenue. The carrier 
suggests the proposal be modified to allow customers to hold seats for 
24 hours up until 72 hours before the departure of the flight. Similar 
to Hawaiian, JetBlue suggest that the proposal be modified and that the 
``24 hour rule'' apply not later than 120 hours prior to departure for 
carriers that have a no oversales policy. JetBlue explains that it does 
not oversell seats on its flights and it is the company's policy not to 
issue refunds to passengers that cancel their reservations (in return 
for a guaranteed seat on the flight). It notes that the proposal would 
allow customers to hold a reservation without making a financial 
commitment and could cause lower load factors, which would threaten 
JetBlue's business model. ASTA supports the 24 hour ``reservation 
hold'' rule applying to travel agent bookings.
3. Refunding the Ticket Price for Flights That Are Canceled or 
Significantly Delayed
    In discussing a commitment to provide prompt refunds, we asked for 
comments on whether we should require carriers to refund the ticket 
price for flights that are canceled or significantly delayed if the 
passenger chooses not to travel as a result of the travel disruption. 
ATA opposes including as a standard in the customer service plan a 
requirement that carriers automatically provide ticketed passengers 
holding non-refundable tickets a refund for flights that are canceled 
or significantly delayed. ATA notes that the regulatory effort to 
redefine restricted tickets as fully refundable even when cancellation 
is desirable due to impending weather or government order would impose 
obligations not present in any other mode of transportation. ATA adds 
that in most cases passengers on a cancelled flight are accommodated 
soon after the originally scheduled flight. In addition, ATA provides 
the following reasons for its opposition:
    [cir] The cause of the delay could be out of the carrier's control;
    [cir] Carriers often allow free rebooking for significant delays or 
cancellation;
    [cir] This is a marketplace issue;
    [cir] Imposing mandatory refunds when a passenger chooses not to 
fly would convert all tickets in cancel or delay situations to fully 
refundable tickets;
    [cir] Passengers have a choice of what type of ticket to buy; and
    [cir] The DOT is not authorized to interfere in the marketplace in 
this manner.
    Of the foreign carriers and carrier associations that commented, 
AACO asserts that this provision intrudes in business practices and 
raises a risk that carriers cannot resell the seat post-cancellation. 
NACC is also concerned about this proposal. Malaysia Airlines strongly 
opposes this proposal because delays are often beyond airlines' control 
and carriers already make efforts to mitigate their impact. Similarly, 
Qantas states that cancellations may also be out of the carrier's 
control.
    Lufthansa and Austrian state that, if imposed, the final rule 
should allow carriers to accommodate passengers in ways other than 
refunding the fare. JetStar contends that it is unfair to place the 
entire burden of costs of unforeseen delays and cancellations on the 
carriers and states that mandatory refunds may result in the operation 
of delayed flights empty or at a net loss. The carrier also believes 
that it is not unfair or deceptive for consumers to share some of the 
risk in return for lower priced non-refundable tickets, provided fare 
rules are disclosed prior to purchase. VivaAerobus states that it is a 
no frills ultra low-fare carrier that only sells non refundable tickets 
and its policy is disclosed on its website so customers can 
comparatively shop prior to purchase. The carrier asserts that it never 
overbooks flights and contends that it cannot give refunds.
    Of the U.S. carriers that commented, US Airways notes that many of 
its tickets are fully refundable and consumers that purchase non-
refundable tickets are clearly informed of the risk. While the carrier 
supports the Department's efforts in the NPRM to enhance disclosure, it 
does not think DOT should restrict options available to passengers or 
competition among carriers by requiring refunds of non-refundable 
tickets. Spirit Air opposes requiring carriers to make refunds to 
passengers who choose to purchase non-refundable tickets but decide not 
to fly because of a flight cancellation or significant delay. Rather, 
Spirit gives passengers the option of re-accommodation or a voucher or 
refund, or a passenger can purchase travel insurance.
    Of the consumers and consumer organizations that commented on this 
issue, Flyersrights.org thinks tickets should be refunded if the flight 
is cancelled or significantly delayed for reasons within the airline's 
control. However, it is concerned about passengers who don't receive 
refunds of taxes and fees collected by the government for services 
passengers do not receive due to cancelled reservations. Some 
``Regulation Room'' commenters favor airlines providing full refunds as 
well as reimbursement for hotel rooms and meals if there is a 
significant flight delay.
    With regard to defining a ``significant delay'' for purposes of 
ticket refunds, ATA opposes any definition of ``significant'' delay 
that would create a single government standard and eliminate a 
carrier's latitude to create its own policies on non-refundable tickets

[[Page 23127]]

that serve customer and commercial needs. It reiterates that the 
application of non-refundable tickets and carrier policies to re-
accommodate passengers during an event beyond the carrier's control is 
best left to the marketplace in a deregulated industry, which will 
leave customers with more options. Of the foreign carriers that 
commented on defining a ``significant delay,'' Cathay Pacific states 
the Department should take into account the length of delay, length of 
the flight and the circumstances. The longer the flight, then the 
greater the tolerance should be for the delay. TAP Portugal makes a 
similar comment and states that the definition should depend on the 
duration of the flight. It also notes that long-haul flights can make 
up for delays while in the air. Some commenters on ``Regulation Room'' 
suggest that any delay over three hours is ``significant,'' while 
others note they are willing to let the Department define the term.
4. Refunding Fees for Optional Services for Flights That Are Canceled
    In discussing prompt refunds, we specifically asked for comments on 
whether we should require, as part of any refund due a consumer, a 
refund of any optional fees charged a passenger in connection with the 
flight in question. ATA opposes including as a standard in the customer 
service plan that when a flight is cancelled carriers must refund not 
only the ticket price but also any fees for optional services that were 
charged to a passenger for that flight. ATA states that its members 
object to the Department's concept that cancellation in itself should 
create a right to the refund of optional fees. It urges the Department 
to clarify that a carrier has the opportunity to accommodate a 
passenger with other transportation options after a cancellation, 
instead of automatically refunding a ticket and ancillary fees. ATA 
also asks the Department to clarify that the proposed customer service 
plan requirement to provide prompt refunds ``where ticket refunds are 
due'' is meant to include only those situations where the passenger is 
unable to fly due to the carrier's decision to cancel. US Airways 
supports refunding fees for optional services for flights that are 
canceled, but only in cases where the services in question are not 
ultimately provided (e.g. baggage fees, seating fees). It asks the 
Department to clarify that if the services are provided, refunds are 
not mandated. Among the foreign carriers and carrier associations that 
commented, AACO states that fees should not be reimbursed for the 
ticket and ancillary services that have been provided. Malaysia 
Airlines also states that this proposal should not require refunds of 
fees for services already delivered. ASTA thinks mandated refunds 
should include ``optional fees'' paid by a passenger.
5. Delivering Baggage on Time, Compensating Passengers for Expenses Due 
To Delay in Delivery of Baggage and Refunding Baggage Fees
    Of the foreign air carriers and industry groups that commented, 
AACO states that the Department needs to define what ``on time'' 
delivery of baggage means and opposes any requirement that airlines 
bear the sole responsibility for areas of business that other parties 
have control over (e.g. bags may be handled by airport or TSA). Air 
Berlin notes that international baggage compensation is already 
governed by the Montreal Convention. South African Airways states that 
the proposal does not address Montreal or Warsaw and asks DOT to 
confirm that the rule does not apply where either Convention controls. 
Singapore Airlines offers similar comments. Air France and KLM state 
that the NPRM does not take into account vast differences between long-
haul international flights and domestic U.S./transborder flights, and 
as such, returning bags within 24 hours may be impossible due to 
limited frequencies to a specific destination, absence of local 
services, and/or a passenger with a multi-stop and multi-country 
itinerary.
    Among the U.S. industry groups and air carriers, US Airways 
believes that, before advancing new proposals in this area, DOT should 
articulate any additional facts warranting action beyond steps that the 
Department has already taken. It asserts that it is neither possible 
nor desirable to set a uniform maximum time for delivery of delayed 
bags or to impose remedies for failure to make delivery within a time 
frame because there are too many variables involved, and asks that the 
Department seek more input from stakeholders involved. Spirit Airlines 
notes that Part 254 already requires airlines to compensate passengers 
and airlines have incentives to locate and return bags. It also states 
that ``every reasonable effort'' to return bags is a vague standard, 
and points out that there is no evidence that the current rules are 
inadequate or passengers are being treated unfairly or with deception.
    ATA notes that its members oppose including as a standard in the 
customer service plan that carriers reimburse passengers the fee 
charged to transport a bag if that bag is lost or not timely delivered. 
ATA states that bag fees are a competitive issue and whether a carrier 
chooses to refund a fee in all instances is a matter the marketplace 
should determine. Spirit also opposes such a requirement although it 
notes that its policy is to refund fees when there is a delay in 
delivery. Flyersright.org states that fees should be refunded if the 
bag is not delivered on the same flight or an earlier one.
6. Notifying Passengers of Past Delays and Cancellations Prior to 
Ticket Purchase
    We already require the reporting carriers (i.e., largest U.S. 
carriers) to provide delay and cancellation information on their 
websites and upon request provide consumers on-time performance 
information during oral reservations. We asked for comment on whether 
all carriers required to have a customer service plan should be 
required to disclose past delays and cancellations of flights to 
consumers before the latter purchase a ticket. Many carriers oppose 
having a customer service commitment on disclosure to passengers of 
past delays or cancellations of particular flights before ticket 
purchase and do not see the need for it. They assert that past 
performance is not necessarily indicative of future performance. Swiss 
International also states that, if imposed, the requirement to disclose 
past delay and cancellation information should not apply to 
reservations agents via telephone because foreign carriers utilize call 
centers that often work with multiple carriers and the proposal is not 
feasible. Cathay Pacific does not support mandatory disclosure of past 
delays and cancellations before ticket purchase for international 
flights that have limited operations, but notes that for domestic 
services operated more frequently there may be value. ATA members 
oppose additional information notices regarding past flight delays or 
cancellations before purchase of a ticket, as the Department has 
recently adopted new flight information requirements and in accordance 
with those rules, the public will have access to information on flight 
delays, cancellations, and flights 30 minutes late more than 50% of the 
time before purchase on the largest U.S. carriers' websites. Of the 
U.S. carrier commenters, US Airways notes, similar to ATA, that this 
information is available on the carrier's website and that is 
sufficient to provide consumers with information. It also asserts that 
historic data is unreliable, the current rule is new and more time is 
needed to see how effective it is prior to initiating new rules, and 
DOT already decided further disclosures were not required.

[[Page 23128]]

7. Other Customer Service Provisions
    With regard to the customer service requirement to notify consumers 
of itinerary changes in a timely manner, British Airways expressed 
support for this provision, but thinks it should be limited to 
passengers for which the carrier has reliable contact information. In 
situations where a passenger books his/her ticket through a travel 
agent, British Airways states that the travel agent and not the carrier 
should be held responsible for notifying the passenger of any itinerary 
changes. With respect to disclosing aircraft configuration, among other 
things, to consumers on the selling carrier's website and upon request 
from the selling carrier's telephone reservations staff, Singapore 
Airlines contends that there is no reason for its telephone 
reservations staff to provide this information as its customers can 
find this information on the carrier's website. With regard to 
responding to consumer complaints, Air Berlin is concerned that as 
drafted the proposed definition would obligate a carrier to react to 
complaints from non-passengers.
    As for the requirement to ensure ``good customer service'' from 
code-share partners, a number of carriers and carrier associations 
expressed concerns with the definition of ``ensuring good customer 
service'' as it relates to code-share partners and claim that they 
cannot be held responsible for code-share partners' actions. More 
specifically, NACC contends that the provision to have ``comparable 
service plans'' could be an extraterritorial application of law if 
applied to more than flight segments to or from a U.S. airport. It 
states that the requirement to have comparable service is too 
prescriptive and is an unwarranted interference in commercial 
relationships, and may discourage such arrangements, leading to less 
flexibility and network connectivity. NACC also expresses concerns that 
aligning customer service plans with code-share partners may raise 
anti-trust issues. JetStar does not support requiring code-share 
participants to adopt each other's customer service plans or align 
their service levels and states that this is an issue of competition 
best left to the marketplace. It also notes that the marketing carrier 
has the primary relationship with the consumer. US Airways states that 
DOT should not adopt rules that marketing carriers are responsible for 
violations by operating carriers and says that marketing carriers 
cannot control the application of uniform standards of all operating 
carriers with which they work.
    DOT Response: Having fully considered the comments, the Department 
has decided to adopt a final rule largely along the lines set forth in 
the NPRM, with some clarifications to address comments received about 
extraterritorial application of U.S. law and the appropriateness of 
individual customer service commitments. In adopting this approach, we 
believe that our action strikes a proper balance between ensuring that 
the traveling public is provided an adequate level of service and is 
not subjected to unfair or deceptive practices, while ensuring the 
marketplace governs to the extent possible. We also view our approach 
as striking the proper balance between protecting consumers on nearly 
all flights to and from the United States by requiring not just U.S. 
carriers but also foreign carriers to adopt and adhere to customer 
service plans, while ensuring that these requirements do not involve an 
extraterritorial application of U.S. law by limiting their application 
to foreign carriers to flights to and from the U.S., sales made within 
the U.S., and to the conduct of foreign carriers on U.S. soil.
    Under the final rule, foreign carriers are required to address the 
same subjects in their customer service plan as U.S. carriers. The 
final rule also establishes minimum standards for the customer service 
plans of both U.S. and foreign carriers. In making this decision, we 
note that carriers are already required to address a number of the 
subjects and comply with the minimum standards imposed for these 
subjects through existing requirements [e.g., 14 CFR part 250, Part 254 
(for U.S. carriers), and Part 382] or requirements imposed by other 
sections of this rule (e.g., 14 CFR 259.4, 259.7, and 259.8). 
Additionally, based on the comments received, many carriers already 
address many of the requirements in the customer service plans and, in 
some cases, their customer service commitment is more stringent than 
those we are adopting. Consequently, we are not persuaded that it would 
be unduly burdensome for carriers to adopt and adhere to these 
standards.
    Commenters have convinced us that it is not appropriate to require 
U.S. or foreign air carriers to include in their customer service plans 
a commitment to ensure good customer service from their code-share 
partners by making certain that code-share partners have comparable 
customer service plans or provide comparable customer service levels. 
We agree with commenters that the requirement for code-share partners 
to have comparable service may unnecessarily restrict the marketplace 
and may unduly discourage code-sharing arrangements. We have also 
decided against requiring covered carriers to include in their customer 
service plans an assurance that they will notify consumers of past 
delays and cancellations. We are persuaded that the current 
availability of data about past delays and cancellations provided by 
the largest U.S. carriers on their websites as a result of action of 
our recent consumer rulemaking is sufficient and additional 
requirements in this area would not materially benefit consumers.
    While, as noted above, the Department has decided to establish 
minimum standards for the customer service plans of both U.S. and 
foreign carriers, we are modifying or clarifying a few of these 
standards based on comments received. For example, we are clarifying, 
as requested by U.S. and foreign carriers and associations, that the 
requirement to compensate passengers for reasonable expenses that 
result due to delay in baggage delivery comports with 14 CFR part 254 
for domestic transportation and applicable international agreements for 
international transportation. We are also adding as a standard that 
carriers must reimburse passengers for any fee charged to transport a 
bag if the bag is lost. We have decided against requiring carriers to 
reimburse passengers for any fee charged to transport a bag that is not 
timely delivered. Arguably, as is the case with transporting passengers 
themselves, while delay in receiving baggage may be inconvenient, once 
the carrier delivers a bag the service has been performed. Consumers 
may, of course, seek reimbursement for damages caused by delay in the 
delivery of their baggage by filing a claim with the airline or, if 
dissatisfied with the airline's resolution of the matter, with an 
appropriate civil court.
    With regard to carriers' obligation to notify passengers of known 
delays, cancellations and diversions, we specify that the minimum 
standard required to comply with this obligation is met through 
compliance with a requirement imposed elsewhere in this final rule, 
i.e., 14 CFR 259.8. Under section 259.8, we explain that the obligation 
to notify passengers of delays applies only to delays of 30 minutes or 
more and that the carrier has the obligation to inform passengers of 
such delays, cancellations and diversions within 30 minutes of the 
carrier becoming aware of a change in the status of a flight. We also 
explain that carriers must inform consumers of cancellations and delays 
of 30 minutes or more and diversions in the boarding gate area at U.S. 
airports, on board

[[Page 23129]]

aircraft, via a carrier's telephone reservation system and on its 
website, and through whatever means made available by the carrier for 
passengers who subscribe to the carrier's flight status notification 
services.
    With respect to providing prompt refunds, we conclude that the 
obligation to provide such refunds applies not only to refunding the 
basic price of a ticket but also to refunding optional fees charged to 
a passenger for services that the passenger is unable to use due to an 
oversale situation or a flight cancellation. For example, if a 
passenger pays for premium economy seating, but his flight is canceled 
or oversold and that seating is not available on the flight that he/she 
has agreed to be re-rerouted on, then the carrier must promptly refund 
the passenger the fee paid for the premium seating. In adopting this 
requirement, the Department believes it is unfair for a carrier to 
refuse to provide a refund to a passenger of fees paid for services not 
provided through no fault of the passenger.
    We continue to believe that there are circumstances in which 
passengers would be due a refund, including a refund of non-refundable 
tickets and optional fees associated with those tickets due to a 
significant flight delay. However, we have been persuaded by industry 
commenters that the Department should not adopt a strict standard of 
what constitutes a significant delay as such a delay is difficult to 
define. We agree with the contention of carriers and carrier 
associations that the definition of a significant delay depends on a 
wide variety of factors such as the length of the delay, length of the 
flight and the passenger's circumstances. The Department's Aviation 
Enforcement Office will continue to monitor how carriers apply their 
non-refundability provision in the event of a significant change in 
scheduled departure or arrival time, and will determine on a case by 
case basis based on the facts and circumstances of the delay whether a 
failure to provide a refund in response to such a delay is an unfair 
and deceptive practice.
    We reject some carriers' and carrier associations' assertions that 
carriers are not required to refund a passenger's fare when a flight is 
cancelled if the carrier can accommodate the passenger with other 
transportation options after the cancellation. We find it to be 
manifestly unfair for a carrier to fail to provide the transportation 
contracted for and then to refuse to provide a refund if the passenger 
finds the offered rerouting unacceptable (e.g., greatly delayed or 
otherwise inconvenient) and he or she no longer wishes to travel. Since 
at least the time of an Industry Letter of July 15, 1996 (see http://airconsumer.dot.gov/rules/guidance) the Department's Aviation 
Enforcement Office has advised carriers that refusing to refund a non-
refundable fare when a flight is canceled and the passenger wishes to 
cancel is a violation of 49 U.S.C. 41712 (unfair or deceptive 
practices) and would subject a carrier to enforcement action.
    We also have determined to modify the standard regarding the 
availability of the lowest fare from what was proposed in the NPRM. In 
the NPRM, we proposed that a carrier offer the lowest fare available on 
the carrier's website, at the ticket counter, or when a customer calls 
the carrier's reservation center to inquire about a fare or to make a 
reservation. Having taken into consideration the comments received 
about how this requirement could unduly interfere with airline business 
models by requiring airlines offer to a consumer shopping via one 
point-of-sale the lowest fare available via any channel, we are 
modifying this provision to require carriers to disclose to consumers 
who contact the carrier through any of these mediums that a lower fare 
may be offered by the carrier through another channel (for example, the 
carrier must reveal via its telephone reservation service that a lower 
fare may be available on the carrier's website if that is the case). Of 
course, wherever the carrier offers its lowest fare, the carrier should 
not state that the lowest fare may be available elsewhere as such a 
statement would likely confuse consumers and could result in increased 
search time by consumers for a nonexistent lower fare. In sum, we are 
not requiring carrier personnel to offer the lowest fare available via 
whatever sales channel a consumer chooses to use, but to inform all of 
its customers and prospective customers that a lower fare may be 
available elsewhere in the carrier's systems in order to give the 
consumer the opportunity to locate a lower fare offered by that 
carrier.
    We have also decided to modify the customer service proposal which 
would require carriers to allow reservations to be held at the quoted 
fare without payment, or cancelled without penalty, for at least 
twenty-four hours after the reservation is made. We agree with 
commenters who expressed concerns that allowing consumers to hold a 
seat without payment for twenty-four hours could result in loss of 
sales and revenue by carriers and prevent other passengers from 
purchasing the seat if the seat is not released in a timely manner 
prior to the flight. We find persuasive the comments submitted by 
JetBlue and Hawaiian Airlines suggesting that a set point in time 
should exist after which carriers would no longer be required to hold a 
passenger's reservation in order to give the carrier a more realistic 
opportunity to sell that seat in the final days before the flight 
departs. Accordingly, we are modifying this provision to require 
carriers to hold the reservation for twenty-four hours only if a 
consumer makes the reservation one week (168 hours) or more prior to a 
flight's scheduled departure. After that time, a carrier is no longer 
required to hold a reservation without payment for any period of time. 
The Department believes that this modification strikes the right 
balance between a consumer's desire to make travel plans and shop for a 
fare that meets his or her needs, and the carrier's need for adequate 
time to sell seats on its flights.
    As for the remaining seven customer service requirements, we 
received very few comments on them and we are adopting them as proposed 
in the NPRM. These seven customer service requirements pertain to 
accommodating passengers with disabilities, meeting customers' 
essential needs during lengthy tarmac delays, handling ``bumped'' 
passengers with fairness and consistency, disclosing cancellation 
policies, frequent flyer rules, aircraft configuration, and lavatory 
availability, notifying consumers of changes in their travel 
itineraries, ensuring responsiveness to customer complaints, and 
identifying the services the carrier provides to mitigate passenger 
inconveniences resulting from flight cancellations and misconnections. 
In adopting these customer service commitments as proposed, we note our 
disagreement with comments stating that the requirement for carriers to 
notify consumers of itinerary changes should be limited to passengers 
who book their tickets directly with the carrier and not apply to 
passengers who book their tickets through a travel agent. A passenger 
has a right to know and benefit from knowing about changes in his/her 
itinerary whether that person purchased the ticket directly from a 
carrier or from a travel agent. We also disagree with comments that the 
disclosure of aircraft configuration be limited to the selling 
carrier's website. While most consumers will have access to the 
Internet and be able to obtain this information from carriers' 
websites, we also see benefit in requiring that aircraft configuration 
information be made available upon request from the selling carrier's 
telephone reservations staff, particularly for those passengers who do

[[Page 23130]]

not have access to the Internet or are not familiar with how to use it. 
With regard to the concern expressed by a carrier that it may be 
required to respond to complaints from non-passengers, we want to point 
out that ``complaint'' is defined in section 259.7 as a specific 
written expression of dissatisfaction concerning a difficulty or 
problem which a person experienced when using or attempting to use an 
airline's services.
C. Self-Auditing of Plan
    The NPRM: The NPRM proposed that foreign air carriers audit their 
adherence to their customer service plan annually and make the results 
of their audits available for the Department's review upon request for 
two years following the audit completion date. U.S. carriers are 
already required to self-audit their plans and to make the audit 
results available for the Department's review upon request for two 
years.
    Comments: Of the foreign carriers that commented, TAP Portugal 
opposes self-auditing and contends that it is too burdensome to audit a 
dozen service standards, some of which involve hundreds of activities 
performed on a daily basis. Similarly, British Airways opposes self-
auditing customer service plans on the basis that the plans cover many 
services and involve different departments that are responsible for 
these services, and as such would necessitate coordination at 
significant additional costs. Qatar Airways states that global surveys 
regarding customer service standards already exist and audits specific 
to a limited number of international routes will not add value to 
consumers. Swiss International and Air Tahiti note that there is no 
guidance as to what a ``self-audit'' requires.
    A business travel organization supports requiring audits and states 
that its travel managers can provide their clients better protection on 
flights to and from the U.S. if they have this information available. 
Of the consumer groups, Flyersrights.org supports requiring foreign air 
carriers to audit customer service plans and thinks failure to adopt a 
plan, adhere to it, and make audit results available should be 
considered an unfair and deceptive practice.
    DOT Response: We have decided to adopt the self-auditing 
requirements as proposed in the NPRM. The final rule requires each 
carrier to audit its own adherence to its plan annually and to make the 
results of each audit available for the Department's review upon 
request for two years afterwards. The Department believes that a system 
for verifying compliance with the customer service plans is essential. 
As noted in the first rule to enhance airline passenger protections, we 
believe that requiring covered carriers to audit their plans annually 
will further ensure that carriers will live up to their commitments. It 
will also enable an airline to quickly take action if it learns that it 
is not in compliance with its customer service plans or if it is not 
effectively implementing its plan. A self-audit is essentially a system 
for the carrier to verify its compliance with its customer service 
plan. We are not requiring that such audits be conducted ``at similar 
times in the year'' or even that there be a single unified audit of all 
the subjects covered in the customer service plans, in order to allow 
each airline the flexibility to design an audit program that fits its 
particular operational environment.

4. Contracts of Carriage

    The NPRM: This NPRM was the second time that the Department 
proposed requirements regarding incorporation of tarmac delay 
contingency plans and customer service plans into carriers' contracts 
of carriage. In December 2008, the Department published in the Federal 
Register an NPRM proposing to require U.S. carriers to incorporate 
their tarmac delay contingency plans and customer service plans in 
their contracts of carriage, and make their contracts of carriage 
available on their websites. In December 2009, the Department issued a 
final rule where it decided not to require such incorporation. Instead, 
the Department strongly encouraged carriers to voluntarily incorporate 
the terms of their contingency plans and customer service plans in 
their contracts of carriage and required the carriers to post their 
plans and their contracts of carriage on their website. At that time, 
the Department also indicated its intention to address this matter 
again through rulemaking.
    In this proceeding, the Department again proposed to require 
carriers to include their tarmac delay contingency plans and customer 
service plans in their contracts of carriage, and for foreign air 
carriers that have a website to post their entire contract of carriage 
on their website in an easily accessible form. U.S. carriers are 
already required to post their contract of carriage on their website 
under the existing rule.
    The Department again sought comment on whether incorporation of the 
contingency plans and customer service plans in the contract of 
carriage would give consumers notice of what might happen in the event 
of a long delay on the tarmac and of passengers' rights under carriers' 
customer service plans. As in the past, we asked commenters to address 
whether and to what extent requiring the incorporation of contingency 
plans in carriers' contracts of carriage might weaken existing plans: 
that is, would the requirement encourage carriers to exclude certain 
key terms from their plans in order to avoid compromising their 
flexibility to deal with circumstances that can be both complex and 
unpredictable.
    Comments: RAA questions whether DOT has authority to impose a 
requirement for carriers to incorporate their tarmac delay contingency 
plans or customer service plans into their contracts of carriage. If 
the Department nevertheless adopts such a requirement, RAA states that 
it should not apply to regional carriers, as most regional passengers 
are subject to the ticketing carrier's contract of carriage.
    ATA contends that the Department would be exceeding its regulatory 
authority if it were to require that the contingency plans and customer 
service plans be incorporated into carriers' contracts of carriage as a 
means of creating a private right of action. ATA asserts that Congress 
did not create a private right of action for violations of 49 U.S.C. 
41712 and the Department cannot substitute a different enforcement 
process than the one Congress intended. ATA also states that the 
Department has failed to demonstrate how a carrier's failure to 
incorporate either its tarmac delay contingency plan or its customer 
service plan in its contract of carriage could be viewed as an unfair 
and deceptive practice under 49 U.S.C. 41712 . ATA points out that if 
the Department is interested in ensuring that passengers are more aware 
of their rights, then it should be sufficient that both the contingency 
plan and customer service plan are available on carrier websites.
    U.S. carriers that commented generally support ATA. For example, US 
Airways, like ATA, states that there is no reason to require 
incorporation of the contingency plans or customer service plans as 
U.S. carriers already post these plans on their websites. US Airways 
speculates that only a small percentage of visitors to its website 
review the page containing the Contract of Carriage, suggesting that 
the inclusion of the plans in carriers' contracts of carriage would not 
increase passenger awareness of their rights. US Airways as well as 
other carriers are particularly concerned that this requirement would 
create a private right of action and subject airlines to a multitude of 
lawsuits in a variety of jurisdictions.

[[Page 23131]]

    Similar to the U.S. carriers and carrier association, foreign 
carriers and carrier associations strongly oppose the proposed 
requirement to incorporate plans into carriers' contracts of carriage. 
IATA asserts that the DOT exceeds its authority in proposing this 
requirement and that it would substantially increase airlines' legal 
costs. IATA also states that international airlines cannot be expected 
to adopt multiple contracts of carriage for each territory into and out 
of which they fly and that contracts of carriage are contracts between 
a carrier and all of its passengers, not just those that fly into the 
U.S. AEA generally supports and agrees with IATA. IACA states that 
placing contingency and customer service plans in a contract of 
carriage will make the contracts unreadable, as they are already 
detailed and will result in too much information for the consumer. IACA 
also states, similar to IATA, that for many airlines U.S. flights make 
up only a small share of the total flights, so it is inappropriate to 
incorporate information that is valid only for U.S. flights. IACA also 
notes that EU regulations already require carriers to provide customers 
with details of their rights, so the proposal is superfluous and 
counterproductive. IACA suggests that foreign carriers be exempted from 
this requirement.
    The foreign air carriers that commented generally support IATA. 
Many carriers note that rules already exist in their countries 
regarding customer service issues. For example, Virgin Atlantic notes 
that EC Reg 261/2004 already has passenger rights requirements covering 
delays and oversales. Others raised concerns about extraterritoriality. 
More specifically, JAL and TAP Portugal note concerns about the 
proposal as their Conditions of Carriage are reviewed and approved by 
their homeland regulator and any changes would need to be approved by 
those bodies. Qatar Airways states that there should be global 
harmonization of different government regulatory standards before such 
plans are incorporated in each carrier's Contract of Carriage. Various 
carriers also expressed fears about the litigation risks that would 
exist. South African Airways notes that mandating terms of an airline's 
contract of carriage may improperly create a private right of action 
for minor lapses in service. Air France speculates that in order to 
avoid legal risks carriers may weaken plans if incorporation into 
carrier's contract of carriage is required. Air France as well as many 
other carriers who object to the proposal assert, similar to IATA, that 
the Department does not have authority to impose this requirement. In a 
similar fashion, Lufthansa strongly opposes the proposal and fully 
supports ATA's and IATA's comments, as do Alitalia, British Airways and 
various other foreign carriers.
    While most foreign air carriers are opposed to including the plans 
in their contract of carriage, a number of them did support the idea of 
placing the contingency plans and customer service plans on their 
respective websites or state that they have already done so. For 
example, Air France and KLM agree that the plans could be placed on a 
website. Virgin Atlantic states that its Conditions of Carriage are 
based on IATA standards and are available on its website, as does Qatar 
Airways. In addition, Virgin Atlantic suggests that contingency plans 
and customer service plans be provided, where there is a specific 
situation, to an affected passenger. South African Airways makes 
similar comments.
    Of the consumer groups that commented, CTA and AAPR generally 
support the proposal to include tarmac delay contingency plans and 
customer service plans in a carrier's contract of carriage, or in the 
alternative on their websites. CTA also states that code-share rules 
should be included in the contract of carriage. Flyersrights.org, and 
its individual members that filed comments, support the proposal that 
carriers place both the tarmac delay contingency plans and the customer 
service plans in their contracts of carriage. The organization warns, 
however, that requiring carriers to incorporate plans into their 
contracts of carriage may result in carriers excluding key terms from 
the plan so as to make the plans unenforceable and asks that the 
Department review and monitor the plans.
    DOT Response: Having considered all the comments, the Department 
has decided not to adopt the proposal requiring U.S. and foreign 
carriers to include their contingency plans and customer service plans 
in their contracts of carriage. In making this decision, we note that 
some carriers have voluntarily put not only their customer service 
plans but also their tarmac delay contingency plans into their 
contracts of carriage since we issued the first rule to enhance airline 
passenger protections. We will continue to monitor whether other 
carriers choose to do so, as well as determine if we need to revisit 
this issue in the future should a problem exist.
    Further, with regard to the need to incorporate customer service 
plans into the contract of carriage, the Department believes that our 
decision to set minimum standards for the provisions in a carrier's 
customer service plan gives consumers more certainty as to the quality 
and types of services they can expect. In addition, these minimum 
standards may make it easier for a consumer to demonstrate to the 
Department's Aviation Enforcement Office that a carrier has violated 
the law when that carrier does not meet its standard of service 
commitment as the requirements of the customer service plans are more 
exacting than in the past. If the minimum standards are not met by a 
given carrier, the Department can determine if enforcement action is 
appropriate in a given situation.
    Although we are not requiring tarmac delay contingency plans and 
customer service plans to be incorporated in contracts of carriage, the 
Department has decided to require foreign carriers to post their tarmac 
delay contingency plans, customer service plans and contracts of 
carriage on their websites. The December 2009 rule to enhance airline 
passenger protections already requires U.S. carriers to post these 
plans on their websites. The purpose of this requirement is to ensure 
that interested consumers can easily review an airline's contract of 
carriage, customer service plan, and/or tarmac delay contingency plan. 
By having the ability to review these documents, consumers can find out 
an airline's stated obligations to passengers and be better informed 
about their rights and a carrier's responsibilities before purchasing 
tickets and whenever problems occur (for example, the passenger's 
rights and carrier's responsibilities if an airline delays or cancels a 
flight or loses a bag). The Department believes that having the plans 
and contracts of carriage on websites will lead to a better informed 
consumer. The Department's Aviation Enforcement Office will 
periodically monitor carriers' websites to ensure that the required 
information is available.

5. Response to Consumer Problems

A. Designated Advocates for Passengers' Interests
    The NPRM: The NPRM proposed to require foreign air carriers that 
operate scheduled passenger service to and from the United States using 
any aircraft with 30 or more seats to designate an employee who will be 
responsible for monitoring the effects of flight delays, flight 
cancellations and lengthy tarmac delays on passengers. We proposed that 
this employee have input into decisions about which flights to cancel 
and which will be delayed the longest. U.S. carriers must comply with 
this requirement under the existing rules.

[[Page 23132]]

    Comments: IATA, IACA, and AEA generally state that the proposal to 
designate an advocate for passenger interests intervenes too much in an 
airline's operation as airlines organize themselves differently to 
monitor operational issues and address customer concerns. Lufthansa 
opposes this proposal and comments that the decision to designate an 
employee to monitor the effects of irregular operations should be left 
to the discretion of each carrier. Similarly, Air Tahiti states that 
requiring dedicated staff to monitor delays improperly interferes with 
internal airline operations. JAL does not think it makes sense to 
designate an employee for a non-problem and asks for additional 
information and clarification regarding the employee's 
responsibilities. Swiss International states that this proposal is a 
substantial burden and believes that one individual may not be 
effective because each airport has its own issues, so splitting these 
tasks makes more sense and would result in better data. The carrier 
urges the Department to require each airport to designate an employee 
responsible for monitoring delays and coordinate with carriers to 
reduce delays. Air France and KLM oppose this requirement and explain 
that it has limited resources in the U.S. to fulfill any such new role 
and contends that this requirement would impose substantial costs on 
foreign carriers. Air France and KLM state that, if this proposal is 
implemented, the Department should permit foreign carriers to comply by 
having an off-site employee in a specific department who is accessible 
by a specific telephone number assist in such matters, and by providing 
this advocacy only in the principal language of the carrier's homeland 
(French for Air France, Dutch for KLM) and in English. Of the travel 
agent interests that commented, ASTA generally supports the proposal to 
have a designated employee, but does not believe the employee should 
have to be available in the U.S. as long as he or she is accessible. We 
received a few comments from consumers and consumer groups, all of whom 
generally support the proposals.
    DOT Response: The final rule requires foreign air carriers 
operating scheduled passenger service to and from the U.S. using any 
aircraft with 30 or more passenger seats to designate an employee to 
monitor the effects of flight delays, flight cancellations, and lengthy 
tarmac delays on passengers and to have input into decisions on which 
flights to cancel and which will be delayed the longest. It applies to 
all of a covered foreign carrier's scheduled flights to and from the 
United States, including those involving aircraft with fewer than 30 
seats if a carrier operates any aircraft with 30 or more passenger 
seats to/from the U.S.
    We are not persuaded by commenters that the Department is 
excessively intervening in an airline's operation by requiring an 
employee or employees be designated to monitor performance of flights 
and that these employees have input into decisions such as which 
flights are cancelled or subject to the longest delays. Additionally, 
we have taken note of foreign carriers' concerns regarding the 
potential lack of carrier personnel located in the United States or at 
specific airports where the carrier does not have a large presence. We 
are not requiring that the employees responsible for monitoring 
irregular flight operations be located at a U.S. airport. As has been 
permitted for covered U.S. carriers, foreign carriers can determine 
where its employees are located, as long as the designated employees 
can monitor flight delays and cancellations for the carriers' flights 
to and from the U.S. throughout the carriers' system and have input 
into decisions regarding how to best meet the needs of passengers 
affected by any irregular operations. This requirement is intended to 
ensure that passenger interests are considered by carriers when 
decisions on irregular flight operations are made. We are not requiring 
that the designated employees make themselves available to speak with 
airport personnel or passengers and certainly are not prescribing the 
language to be used by the designated airline employees. By adopting 
this performance standard, the Department leaves it up to each carrier 
to determine the most efficient and effective method to monitor the 
effects of flight delays and cancellations (for example, designating 
one or more individuals at its systems operations center). This rule 
does not require carriers to hire new employees to comply with this 
provision as these responsibilities may be borne by current employees 
in addition to their other responsibilities.
B. Informing Consumers How To Complain
    The NPRM: Under the proposed rule, a foreign air carrier that 
operates scheduled passenger service to and from the U.S. using any 
aircraft with 30 or more passenger seats would be required to inform 
consumers how to file a complaint with the carrier (name of department, 
address, and email or web-mail address) on its website, on all e-ticket 
confirmations, and, upon request, at each ticket counter and gate.
    Comments: As with other sections of this proposal, carrier 
association commenters, such IATA, IACA, and AEA, generally state that 
the proposal to inform consumers how to complain unnecessarily and 
excessively intervenes in an airline's operations. Many foreign 
carriers concur. For example, Qantas and JetStar state that if a 
carrier has given a consumer reasonable access for lodging complaints, 
there is no need for the Department to mandate a particular form of 
communication. Qatar Airways, among others, notes that foreign carriers 
already offer passengers a number of means by which to file a 
complaint.
    Foreign carriers and carrier associations also oppose the 
requirement to inform consumers how to complain as an extraterritorial 
application of U.S. law. IATA asserts that this requirement would 
violate the Chicago Convention and U.S. Open Skies Agreement as it 
would necessitate foreign carriers modifying procedures and operations 
that take place outside the U.S. to meet U.S. regulatory requirements. 
For example, IATA states that this requirement would mandate that 
foreign carriers modify their home websites and foreign-issued tickets 
to include information mandated by the Department.
    NBTA generally supports the provisions, as do Consumers Union and 
AAPR. Flyersrights.org, in addition to supporting a requirement for 
foreign airlines to make the mailing address and email or web address 
for filing a complaint available on their website and e-ticket 
confirmations, thinks there should be contact information for the 
Department's Aviation Consumer Protection Division on e-ticket 
confirmations and boarding passes.
    DOT Response: The Department is extending this provision to foreign 
carriers as proposed in the NPRM, with some clarifications to address 
concerns about extraterritoriality. First, we are requiring foreign 
carriers to inform consumers how to complain, upon request, at each 
ticket counter and boarding gate at U.S. airports. We are not seeking 
to govern the activities of foreign carriers outside the United States. 
U.S. carriers are still required to inform consumers how to complain 
upon request at all ticket counters and boarding gates staffed by the 
carrier or a contractor of the carrier, whether or not those locations 
are within the U.S. We are also specifying that the requirement to make 
information about how to file a complaint available on a carrier's 
website applies to a foreign

[[Page 23133]]

carrier only if its website markets to U.S. consumers. Foreign carriers 
would not need to modify their home websites to ensure that they are 
complying with this requirement unless those sites market to U.S. 
consumers. We expect foreign carriers to follow U.S. law in the U.S. 
when marketing within the U.S. and when flights are entering, operating 
within or departing from the U.S.
    Also, while we acknowledge foreign commenters' concerns with the 
Department mandating avenues by which a consumer can file a complaint, 
we believe it is important that consumers have more than one avenue for 
registering their service-related concerns. As commenters note, since 
some foreign carriers already provide a number of means by which to 
file a complaint, the requirements of this rule should not prove overly 
burdensome. As with the December 2009 rule to enhance airline passenger 
protections, this rule requires carriers to only provide passengers 
their email or web-form address and their mailing address. We did not 
propose and are not now requiring that carriers provide passengers a 
telephone number for complaint calls because of concerns that telephone 
``talk time'' would impose a high cost on airlines when there are other 
more-efficient and effective complaint processing methods available. Of 
course, in addition to accepting complaints through the Internet and 
postal mail, airlines are free to voluntarily accept customer 
complaints through other methods such as telephone. We also point out 
that, as is currently allowed for U.S. carriers, a foreign carrier can 
comply with the requirement to provide contact information on an e-
ticket confirmation or itinerary by including a link to a website 
containing the complaint information in lieu of displaying the entire 
text of the contact information, which will take up even less space on 
an e-ticket and reduce cost. It is our opinion that requiring complaint 
contact information on e-tickets and, upon request, at each ticket 
counter and boarding gate instead of just on websites will be 
beneficial to consumers since a large number of passengers do not have 
access to the Internet while traveling and would not be able to access 
the complaint contact information through the airlines' websites.
    We are not adopting the suggestion that carriers be required to 
provide consumers information as a general matter on how to file 
complaints with DOT. That suggestion is beyond the scope of the notice 
and is not wise since it might direct consumers away from contacting 
carriers that are in the best position to quickly resolve problems.
C. Responding to Consumer Complaints
    The NPRM: Under the NPRM, a foreign air carrier that operates 
scheduled passenger service to and from the U.S. using any aircraft 
with 30 or more passenger seats would be required to acknowledge 
receipt of a complaint within 30 days of receiving it and send a 
substantive response to each complainant within 60 days of receiving 
it. We proposed to define a complaint as a specific written expression 
of dissatisfaction concerning a difficulty or problem which the person 
experienced when using or attempting to use an airline's services. We 
solicited comments on any operational difficulties U.S. and foreign 
airlines may face in responding to such complaints when received 
through social networking mediums such as Facebook and Twitter.
    Comments: We received a number of comments on this issue from 
foreign carriers and carrier associations, some of whom supported this 
requirement. IATA, IACA, AEA, and many foreign carriers generally state 
that the proposal to respond to consumer complaints within a set 
timeframe excessively intervenes into an airline's business practices 
and disregards procedures carriers already have in place to respond to 
consumer complaints. They also contend that the Department has not 
shown that this type of requirement is needed. More specifically, 
British Airways notes that the timeline is unnecessary and overly 
burdensome and would force carriers to divert personnel to unnecessary 
administrative and recordkeeping functions. Qantas states that it does 
not see the need to single out the airline industry for mandatory 
requirements related to customer response times and that the carrier 
already aims to provide substantive responses in less than 60 days. 
IATA suggests that, if adopted, any final rule should include a 
provision allowing an airline to stop the clock by providing a 
provisional response. Lufthansa makes a similar suggestion that the 
Department allow for a ``provisional'' response to a customer's 
concerns within the 60 day time frame in the event it cannot provide a 
full detailed response. A number of carriers such as Virgin Atlantic 
also recommend that any final rule adopted include an exception to the 
time frame established to respond to complaints for extraordinary 
circumstances, such as the Icelandic volcano incident, as the volume of 
complaints resulting from such events requires a longer response time.
    Some carriers generally agree with the proposal or note that they 
respond to consumers in a shorter time period. For example, Singapore 
Airlines states that it would not oppose the Department's proposal to 
provide a substantive response in 60 days if complaints are limited to 
actual customers and flights to or from the U.S. Japan Airlines states 
that its response time of 14 days surpasses the Department's proposal 
and that it has many mediums by which passengers can contact it. Air 
France notes that it tries to reply to complaints within 28 days. 
Virgin Atlantic states that it already has a robust complaint handling 
process and generally replies to all written complaints within 28 days 
of receipt. Air New Zealand states that the suggested timeframes to 
respond to complaints are generous.
    A number of carriers expressed concern regarding the definition of 
a complaint. Swiss International states that complaints need to include 
the passenger's name, mailing address or email address, a copy of the 
ticket or boarding pass and the applicable flight number. Qatar Airways 
generally supports the principles stated in the NPRM, but states that 
it should only have to respond to complaints from passengers who use 
its service, i.e., the definition of a complaint should be limited to a 
difficulty or problem which the person experienced when using an 
airline's service. Similarly, South African Airways and Condor state 
the proposal as drafted is burdensome and flawed because carriers would 
have to respond in 60 days to both customers and anyone else that 
``attempted'' to use their service. They also note that the proposal 
fails to give carriers any discretion in refusing to respond to 
repetitive or frivolous complaints. With regard to complaints received 
through social networking mediums, U.S. and foreign carriers and 
carrier associations all oppose any mandate to communicate to 
passengers through such mediums. They recommend that the definition of 
complaint exclude complaints sent by passengers to carriers' Facebook 
or Twitter accounts.
    The consumers and consumer groups that commented generally support 
requiring carriers to acknowledge and respond to complaints within the 
time frame set forth in the NPRM. Flyersrights.org states that U.S. 
passengers should have an avenue to file a complaint with a foreign 
carrier and to expect a timely and substantive response. CTA states 
that U.S. airline customer service personnel should be responsible for 
handling any foreign

[[Page 23134]]

alliance partner complaint and believes there should be a clear way to 
contact foreign carriers through the Internet or by telephone number 
provided on the homepage of the airline. Very few consumers or consumer 
groups commented on the issue of complaints sent through social 
networking sites. Of those that did, AAPR states that social networking 
sites are not an appropriate venue for filing complaints though it 
supports the requirement for foreign carriers to acknowledge a 
complaint within 30 days and send a substantive response within 60 
days, as does the NBTA.
    DOT Response: We have decided to require foreign carriers to 
acknowledge receipt of a complaint within 30 days and provide a 
substantive response to passengers within 60 days, as is currently 
required of U.S. carriers. We believe that 30 days to acknowledge a 
complaint and 60 days to provide a passenger with a substantive 
response allows carriers adequate time to investigate and respond 
appropriately. We are not convinced by arguments put forth by 
commenters that suggest 60 days is not enough time to provide a 
substantive response. We note that more than one carrier suggests that 
60 days is a reasonable amount of time in which to respond.
    We acknowledge and agree with industry commenters that it may not 
be possible in all instances to provide a final reply to a passenger 
within 60 days. The rule speaks of a substantive reply, which is not 
necessarily a final reply. By substantive response, we mean a response 
that addresses the specific problems about which the consumer has 
complained. This type of response often but not always results in a 
resolution of the complaint. If a carrier is actively investigating a 
complex complaint and is not able to conclude the investigation within 
60 days, it is still likely to know more at the 60-day point than it 
did when it acknowledged the complaint. The airline can update the 
complainant with all known information prior to the 60-day mark by 
sending a substantive response, continue its investigation, and 
thereafter send the final reply later. Regarding carriers' suggestions 
for an exception for complaints concerning unusual events such as the 
Icelandic volcano, the Department believes that such an exception is 
not necessary as many consumers complain about similar issues 
associated with such events (e.g., delays, cancellations) and carriers 
generally create form letters in which to respond substantively to most 
such complaints.
    As for the definition of a complaint to which carriers must 
respond, the Department continues to believe that it is important that 
this definition include not just problems which a person experiences 
when using an airline's services but also problems encountered by a 
person attempting to use an airline's services (for example, if he or 
she had problems while attempting to book or cancel a flight on the 
carrier's website). Carriers are not required to respond to general 
complaints from members of the public. We are requiring a carrier to 
respond to complaints from individuals that had a problem when they 
used or attempted to use its services. As with other portions of this 
section, foreign air carriers are only required to respond to 
complaints from consumers that are related to a carrier's services 
being marketed in the U.S. and its flight to or from the U.S.
    We are persuaded by the commenters that the Department should not 
mandate that U.S. and foreign carriers respond to complaints sent 
through social networking sites. Carriers do use such sites to invite 
the public to communicate with them and perhaps even to monitor public 
opinion about their practices. However, we can appreciate concerns that 
such sites are not intended to be a mechanism for handling individual 
consumer complaints. In recognition of these somewhat competing 
interests, the final rule makes it clear that U.S. and foreign carriers 
need not to respond to such complaints so long as (1) the carrier's 
primary page on that social networking site clearly indicates that it 
will not reply to complaints filed via that medium, and (2) on that 
page the carrier directs the consumer to the mailing address, e-mail 
address, or website location for filing written complaints. The 
Department believes this approach takes into account the difference 
between social networking sites and the traditional one-on-one methods 
of text communication (e.g. a letter, email, printed complaint form, or 
Internet complaint form) while ensuring passengers know how to file a 
complaint that will result in a response from the carrier.

6. Oversales

A. Denied Boarding Compensation Limits, Rates, and CPI-U Adjuster
    The NPRM: We proposed to increase the minimum for denied boarding 
compensation (DBC) limits from the current amounts of $400 or $800 
depending on the length of the bumped passenger's delay to $650/$1,300 
to take into account fully the increase in the Consumer Price Index--
All Urban Consumers (CPI-U) since 1978. We also proposed to implement 
an inflation adjuster for these minimum DBC limits. We sought comments 
on whether the proposed increases in the DBC limits and the periodic 
adjustment are called for and, if so, whether the increased amounts are 
reasonable. We asked whether we should completely eliminate the DBC 
limits and require carriers to pay DBC based on 100%/200% of a 
passenger's fare without limit, and whether the current 100%/200% 
formula (depending again on the length of the bumped passenger's delay) 
should be increased to, for example, 200%/400% of a passenger's fare.
    Comments: Eighteen individuals and consumer organizations, in 
addition to over 60 individuals who participated on the Regulation Room 
website, provided comments on the oversales proposals. The majority of 
these commenters support increasing DBC limits. Some commenters, 
however, oppose calculating DBC amounts based on the passenger's fare, 
arguing that it will provide carriers an incentive to bump passengers 
with the lowest fare. As an alternative, one individual suggests that 
DBC should be based on a fixed amount. Another commenter suggests that 
DBC amounts should be based on the length of delay.
    A number of individual commenters go further by suggesting that the 
Department should abandon the oversales rule and ban oversales. These 
commenters reason that a ticket is a contract between a passenger and a 
carrier and that when the carrier cannot honor the ticket, it should 
run a bid or auction by continuously increasing the offer to volunteers 
until enough volunteers come forward. Most commenters on Regulation 
Room support eliminating DBC limits though a number of these commenters 
support a DBC amount based on 200%/400% of the passenger's fare instead 
of the current 100%/200% of the passenger's fare.
    Among the few individual commenters who oppose increasing DBC 
limits, one commenter questions whether raising DBC limits would result 
in the reduction of the number of passengers being bumped. Another 
commenter states that increasing DBC limits to $650/$1,300 would only 
benefit passengers whose fare is more than the current limits (i.e., 
$400/$800 one way). One commenter is concerned about the possibility 
that in response to the raised DBC limits and amounts, carriers would 
increase the required check-in time for the purpose of being eligible 
for DBC.
    We also received comments on a variety of other issues. With 
respect to

[[Page 23135]]

the proposed bi-annual adjustment on DBC amounts based on CPI-U, 
Consumers Union as well as several commenters on Regulation Room 
expressed their full support for the proposal. FlyersRights.org 
suggests that we should declare it to be a deceptive practice to give 
boarding priority to passengers who checked in later but paid a higher 
fare. In addition, FlyersRights.org recommends that we ask carriers to 
increase offers to passengers solicited to volunteer.
    Nine U.S. carriers and carrier associations as well as 27 foreign 
carriers and carrier associations commented on the oversales proposals. 
ATA states that it does not oppose the proposed increase to the DBC 
limits to $650/$1,300 but questions the effectiveness of such an 
increase in reducing the number of passengers being involuntarily 
bumped. According to ATA, increasing DBC limits may provide incentives 
to passengers who would have otherwise volunteered to hold out, hoping 
to be bumped involuntarily. ATA opposes eliminating the DBC limits, 
contending that DBC is meant to compensate passengers for the loss of 
time only, because passengers retain the value of the fare by accepting 
alternate transportation provided by carriers. Delta Air Lines does not 
oppose the proposed increase of DBC limits but suggests that the new 
DBC limits should not be applied to airfare purchases that occur before 
the effective date of the final rule. On the other hand, the Regional 
Airline Association (RAA) opposes the increase of DBC limits to $650/
$1,300, asserting that these increases far exceed the costs of most 
regional airfares.
    Southwest Airlines asserts that the current 100%/200% of one-way 
fare formula works well and if the Department worries about the impact 
of fare unbundling practices on the DBC value, it should require that 
the carriers refund all ancillary fees in the event of oversales, 
instead of raising the 100%/200% rates to 200%/400%. RAA avers that the 
DBC limits should be 100%/200% of the fare, and any adjustment to DBC 
limits should be based on fare changes. Spirit Airlines and Virgin 
America both oppose the increase of DBC limits, questioning the 
economic soundness of such increases. Virgin America argues that the 
new proposal is a departure from the hybrid calculation method that the 
Department established in 2008. Virgin America also points out that in 
2007 the Department rejected the proposal to implement a CPI-based 
adjuster on the DBC limits. Spirit Airlines takes a similar position as 
Virgin America and further contends that as a result of the proposal, 
many consumers will be harmed by increased fares due to the windfall 
that the new DBC proposal will provide to a small number of passengers.
    The majority of foreign carriers and carrier associations oppose 
the proposed increase in the DBC limits to $650/$1,300. Several 
commenters argue that increasing DBC limits will reduce the number of 
passengers who volunteer to be denied boarding and in turn increase the 
number of passengers who are involuntarily bumped, a result that is 
counter to the goal of the oversales rule. Some commenters contend that 
the Department has failed to provide evidence showing that the current 
DBC amounts are inadequate and also failed to recognize that air fares 
have decreased in ``real'' terms during the past decade. IATA and 
several foreign carriers operating long haul international flights to 
and from the U.S. raise the concern that passengers on those flights 
will most likely get the higher limit of $1,300 in an oversales 
situation due to the infrequent schedule, and these passengers, 
according the commenters, will get a windfall for their mild 
inconvenience. Some long haul carriers also insist that the 
Department's proposal is aimed at addressing the fare unbundling 
practice by most U.S. carriers and these foreign carriers' bundled 
fares would be subject to inequitable and discriminatory treatment 
under this proposal. IATA further comments that the proposed $1,300 DBC 
limit is disproportionate to the value of time that a passenger denied 
boarding involuntarily may lose due to the delay. The Air 
Transportation Association of Canada and National Airline Council of 
Canada, on the other hand, argue that the increased DBC limits will 
penalize foreign carriers operating short flights, as these limits far 
exceed the cost of air fare for those flights. IACA argues that the 
proposal interferes with the European Union (EU) laws and may create 
uncertainty for carriers and passengers. Several European carriers 
suggest that the U.S. oversales rule should be harmonized with the EU 
rule.
    The majority of foreign carrier commenters firmly oppose 
eliminating DBC limits, averring that without a limit, the DBC amounts 
would be exorbitant, especially for many long-haul carriers who do not 
unbundle fares. Virgin Atlantic and Air New Zealand prefer a fixed 
amount for all involuntary denied boarding situations, reasoning that 
this approach will avoid the complexity in calculating DBC amounts 
based on fares.
    Most foreign carrier commenters also oppose the CPI-based bi-annual 
adjuster, arguing that air fare changes in the past are not related to 
CPI. The National Airlines Council of Canada argues that the proposal 
ignores the fact that fares paid by passengers are significantly lower 
than what they were ten or fifteen years ago, accounting for the 
inflation. Qantas and JetStar Airways state that the interval for the 
CPI-U based adjuster should be every five years instead of two years to 
avoid excessive administrative costs to implement the changes.
    DOT Response: With respect to the DBC limits increase, we have come 
to the conclusion that the proposed $650/$1,300 amounts are not only 
reasonable but also necessary. We disagree with carriers' remarks that 
the increase in the DBC limits is a disincentive for passengers to 
volunteer for denied boarding and will result in an increase in the 
number or rate of passengers who are involuntarily denied boarding. To 
the contrary, if the DBC limits are increased, carriers will have a 
greater incentive to seek volunteers through increasing the value of 
the compensation they offer to volunteers in order to avoid the higher 
DBC payments to involuntarily bumped passengers. The ultimate result is 
that involuntary denied boarding should decrease while both volunteers 
and passengers who must involuntarily be denied boarding will receive 
increased compensation that more accurately reflects their 
inconvenience.
    Although it is our firm belief that the DBC limits at the level of 
$400/$800 tend to be insufficient to compensate the passengers who are 
involuntarily denied boarding for their inconvenience and loss of time, 
we maintain that the basic structure of the regulatory regime for 
oversales remains sound. In that regard, we are declining to adopt the 
suggestion of some commenters that the Department should eliminate 
involuntary denied boarding and require carriers to run auctions until 
they obtain sufficient numbers of volunteers. As we have repeatedly 
stated in the past, the benefits to most consumers of a well-controlled 
oversales system outweigh the inconvenience experienced by a few. By 
contrast, an unlimited auction system could increase the cost of 
oversales to carriers to a prohibitive level, which would cause 
airlines to be much more conservative in overbooking flights. 
Considering the reduced schedule frequency and capacity during recent 
years, such an approach would result in fewer affordable seats being 
available to the public in general. Running an

[[Page 23136]]

unlimited auction for volunteers is both time-consuming and complex, 
and requiring such a system may impose other negative impacts on all 
passengers, such as causing more flight delays, increasing the number 
of misconnections, and requiring earlier check-in times.
    We are also not adopting some consumer commenters' suggestion that 
we should set a minimum standard for the amount of compensation offered 
to passengers solicited to volunteer for denied boarding. We maintain 
that other than the requirement that carriers must solicit volunteers 
before bumping any passengers involuntarily, the procedures for 
solicitation of volunteers and the amounts of incentive offered to 
potential volunteers should remain within carriers' discretion because 
this aspect of the system has worked well. The Department believes that 
the involuntary DBC rates and limits set by the regulation are 
effective tools to motivate carriers to offer adequate compensation for 
volunteers.
    This final rule also provides that carriers must pay DBC equal to 
200%/400% of the fare based on the length of delay experienced by 
passengers up to the maximum of $650/$1,300. We are unconvinced by the 
argument of some industry commenters that the regulatory mandated DBC 
limits should not be increased because airfares have not increased ``in 
real terms.'' Although the ``fare,'' in terms of the dollar amount 
reflected on a passenger's ticket confirmation or ticket receipt, may 
not seem to be increasing over the past decade, the actual cost for a 
passenger to travel by air, however, has indeed increased. Such 
increase in air travel cost is not reflected in the base ticket prices 
that are used as the basis for calculating DBC amounts. The increase of 
the cost to passengers is evident by the fact that a passenger now must 
pay, in addition to the base airfare, for many items that were included 
in the fare before the unbundling practice became widespread, such as 
for checked baggage, food and beverage, in-flight entertainment, 
preferred seating, advance seat selection, telephone reservations, etc. 
It is the Department's view that carriers may continue to explore other 
ways to further unbundle fares, thus leading to base ticket prices 
staying flat or declining. The Department believes that DBC amounts 
based on 100%/200% of the base fare are no longer adequate, under many 
circumstances, to address the inconvenience and consequential damages 
suffered by passengers who are denied boarding involuntarily, 
especially passengers who purchased the most deeply discounted fares, 
and who, by virtue of the low fares, are most likely to be selected as 
the candidates for involuntary denied boarding. Realistic DBC rates are 
also a necessary incentive to encourage careful overbooking practices 
on the part of carriers. Precisely for these reasons, we are raising 
the 100%/200% rates in the involuntary DBC calculation to 200%/400%. In 
our opinion, this new formula, in conjunction with the raised DBC 
limits of $650/$1,300, strikes a balance between permitting carriers to 
continue to overbook flights, but limiting the carriers' financial 
burden from compensating passengers due to oversales, and adequately 
protecting passengers' interests in oversales situations.
    We are aware that the amended DBC formula and limits may have a 
larger impact on carriers operating regional and international short-
haul flights, because these flights' base fares are lower in general 
than the fares of long haul flights. RAA has argued in its comments 
that the DBC amounts should be based on 100%/200% of the fare and that 
the $650/$1,300 limits far exceed the costs of tickets on most regional 
flights. Several Canadian carriers and carrier associations also 
contended that the oversales rule as proposed unfairly discriminates 
against carriers operating shorter flights by requiring the same limits 
of compensation depending on the length of delay, regardless of the 
length of the flights from which the passengers were involuntarily 
denied boarding. The Department has fully considered these comments but 
remains unconvinced that the consequences of our amendment would be 
detrimental to these carriers. It is important to understand that the 
$650/$1,300 limits come into play only when the DBC formula would cause 
a passenger's DBC to exceed the limit. To the extent the fare paid by a 
passenger is low, the new $650/$1,300 limits have no effect. Fares in 
the $49-$59 range are still regularly sold and even under the 400% 
calculation formula, the DBC amounts would not even come close to the 
$800 limit under the previous rule. Furthermore, compared to long-haul 
flights that are usually less frequently scheduled, regional and low 
cost carriers typically have more options with regard to finding 
alternate transportation in a timely fashion for passengers who are 
denied boarding involuntarily. Thus, passengers on these short haul 
flights often have a better chance of getting to their destination or 
the next stopover without extensive delay. Consequently, regional and 
low cost carriers have a better chance of limiting their DBC exposure 
to the lower rate of 200% of the fare with a $650 limit.
    To ensure that there isn't any confusion as to how DBC is 
calculated, we have added a definition for ``fare'' in section 250.1. 
Under this definition, carriers do not need to take into account any 
ancillary fees and/or charges for optional service paid by passengers 
when calculating DBC amounts based on the passenger's fare. In relation 
to this definition, however, we emphasize in section 250.5 that when a 
passenger is denied boarding involuntarily, the carrier must refund all 
unused ancillary fees paid by that passenger. Carriers do not have to 
refund any ancillary fees that will be applied to the alternate 
transportation to the extent those same services are provided to the 
passenger. For instance, when a passenger denied boarding involuntarily 
has paid for seat selection and checked baggage for the original 
flight, the passenger should receive a refund for the seat selection 
fee if the alternate transportation arranged by the carrier does not 
allow the passenger to select his/her seat. Conversely, the carrier 
does not need to refund the checked baggage fee if the passenger was 
able to check in the same number of bags for the substitute flight at 
no additional cost.
    We are also clarifying the meaning of the term ``minimum DBC 
amounts'' in this final rule as some commenters seem to be confused by 
the term. These commenters believe that the Department is mistaken in 
referring in the NPRM preamble to ``minimum'' DBC amounts when it 
should be referring to ``maximum'' DBC amounts. We recognize that the 
source of the confusion was the term ``maximum'' used in the rule text 
under section 250.5. The term ``minimum DBC amounts'' as used in the 
preamble of the NPRM refers to the lowest amount of DBC that is due an 
involuntarily oversold passenger when the DBC calculation based on the 
passenger's one-way fare results in an amount exceeding the DBC limits 
(previously $400/$800 and increased to $650/$1,300 in this Final Rule). 
For example, when a passenger on a domestic flight who paid $550 one-
way for a non-stop flight is delayed for 1 hour 20 minutes due to 
having been involuntary denied boarding, the initial calculation of DBC 
due is based on 200% of the fare, which amounts to $1,100. However, the 
maximum amount of DBC a carrier is required to pay this passenger under 
our rule would be $650. We continue to use the term ``maximum'' in the 
rule text. Accordingly, in order to avoid further

[[Page 23137]]

confusion, we have used the term ``DBC limits'' instead of the term 
``minimum DBC amounts'' in the preamble of this final rule.
    With regard to an automatic inflation adjustor for DBC limits, the 
Department has decided to adopt the proposed bi-annual adjustment on 
DBC limits. In doing so, we note our disagreement with some carriers' 
comments that such an adjuster is not justified because air fares do 
not reflect changes in the CPI-U. DBC is not meant to fully compensate 
passengers for the loss of transportation, because carriers are 
obligated to offer alternate transportation for the passengers or 
refund the passengers' fare; therefore, fare value change is not 
directly relevant. DBC is meant as a form of liquidated damages to 
compensate passengers for their inconvenience, loss of time, and other 
incidental and consequential costs associated with the delay (e.g., 
food, lodging, ground transportation, communication etc.). To simplify 
the DBC calculation and to expedite the process, the Department uses a 
formula that is tied to the one-way airfare paid by the passenger, 
which does not necessarily mean DBC amounts should be changed according 
to the levels at which the average airfare has changed. We observe that 
the costs for food, lodging and other accommodations and commodities 
passengers need in an oversales situation have all increased in 
correlation with inflation. In addition, as noted in the NPRM and 
further discussed above, the actual total cost of flying is likely to 
have increased, while what is commonly referred to as the ``fare'' may 
not have increased or increased as much as a result of the carriers' 
current practice of unbundling fares, i.e., charging extra for services 
once provided as part of the airfare. Our decision to adopt the bi-
annual inflation adjustment provision for DBC limits is also not 
contradictory to our decision made two years ago that we would take up 
the issue de novo. We have indeed taken a fresh look at the issue 
during this rulemaking and ultimately reached the conclusion that the 
bi-annual inflation adjustment is the most efficient way to address the 
impact of inflation on the DBC limits.
    We are also addressing the issue of airline travel vouchers vis-
[agrave]-vis DBC in this final rule. Carriers frequently offer free or 
reduced-rate air transportation, most commonly in the form of airline 
travel vouchers, to passengers denied boarding involuntarily as an 
alternative to the cash or check DBC payment required by our rule. Our 
previous rule required that the value of such a voucher must be equal 
to or greater than the cash or check DBC payment otherwise required. 
One issue we did not address in the previous rule is whether any 
mandatory fees, such as service fees, that some carriers charge for 
using the voucher should be taken into account when considering the 
value of the benefit of the voucher offered. In this final rule, we 
clarify that any fees that passengers must pay in order to use the 
voucher for future travel must be considered when determining the value 
of the voucher. For instance, if the cash or check DBC payment for a 
passenger involuntarily denied boarding is required to be $400 under 
the 200%/400% calculation, and the passenger agrees to accept a travel 
voucher in lieu of that cash or check payment and there is a service 
fee of $50 to redeem the voucher, the minimum voucher value that the 
carrier must offer to the passenger is $450. The carrier must inform 
passengers, whether volunteers or involuntarily oversold, of any 
restrictions imposed on the use of the voucher. In addition, as 
described in detail below, it is unfair and deceptive for a carrier to 
offer a travel voucher as compensation, particularly in an oversale 
situation, without advising the person to whom the voucher is offered 
of any restrictions that may apply to the use of the voucher, such as 
service fees to redeem the voucher, and advance notice requirements or 
expiration dates.
    Finally, we have made non-substantive revisions to the text of 
sections 250.5 and 250.9 in order to provide the most straightforward 
explanations of the methodology applicable under different 
circumstances for calculating DBC amounts. In a counterintuitive way, 
the previous rule describes the maximum DBC rate (200% at that time) 
and then states the circumstances under which the DBC amount will be 
reduced by half. We have encountered confusion on the part of both 
carriers and the public regarding this somewhat convoluted description. 
In this final rule, we discuss the DBC calculation for domestic flights 
and for international flights separately. In each category, we specify 
the amounts of DBC required under each of the three circumstances based 
on the length of delays incurred by a passenger using alternate 
transportation due to the involuntary denied boarding: no compensation; 
200% of the fare subject to the $650 limit; and 400% of fare subject to 
the $1,300 limit. These categories and classifications are summarized 
in the two tables that we added in the written notice that carriers 
must provide to passengers who are denied boarding involuntarily and to 
anyone else upon request. These tables are meant to be used by carriers 
as a quick reference to assist bumped passengers so they can better 
understand the DBC limits and calculations when those passengers may be 
confused and under time pressure during an involuntary bumping 
situation.
    We have also added a definition for ``alternate transportation'' in 
section 250.1 to capture the two components of this term. The first 
component is what was described as ``comparable air transportation'' 
under the previous rule. In order to qualify as ``alternate 
transportation'' and consequently allow the carrier to limit its DBC 
exposure to less than the 400% rate, any air transportation offered to 
passengers involuntarily denied boarding as a substitute for the 
original flight must be operated by a carrier as defined in Part 250, 
i.e., a U.S. certificated or commuter air carrier or a foreign carrier 
that has been duly authorized by the Department to operate scheduled 
air services. Thus, if the carrier offered a substitute flight operated 
by an air taxi operator that is not a commuter carrier, that flight 
would not qualify as ``alternate transportation.'' Furthermore, in 
order to qualify as ``alternate transportation'' carriers must offer a 
confirmed reservation on that alternative flight. The second component 
of the concept of ``alternate transportation'' includes non-air 
transportation (such as bus, rail, or taxi) and air transportation that 
does not meet the definition above of ``alternate transportation'' 
arranged by the carrier. In order for these modes of transportation to 
qualify as ``alternate transportation,'' the carrier must obtain the 
passenger's consent that the passenger will accept the proposed form of 
transportation in lieu of air transportation. To further explain the 
concept and application of ``alternate transportation,'' we emphasize 
that carriers are free to offer substitute transportation that does not 
meet the definition of ``alternate transportation'' in this rule (e.g., 
a flight on an air taxi that is not a commuter carrier, transportation 
on a scheduled flight without a confirmed reservation, or on a charter 
flight, or surface transportation), but the bumped passenger has ``veto 
rights'' over such arrangements. If the bumped passenger declines this 
``non-alternate'' transportation, he or she is due DBC at the 400% rate 
because the carrier did not offer ``alternate transportation'' as 
defined in section 250.1. However, if the passenger chooses to accept 
the carrier-offered transportation that does not

[[Page 23138]]

qualify as ``alternate transportation,'' the carrier is free to avail 
itself of the lower 200% DBC rate in the case of rerouting within 2/4 
hours, and need not pay DBC at all if the non-alternate transportation 
accepted by the passenger will arrive at the passenger's destination 
less than one hour after the planned arrival time of the passenger's 
original flight. The passenger has no such veto right over ``alternate 
transportation.'' If the carrier offers alternate transportation and 
the passenger declines it, the carrier is still free to limit DBC to 
200% or zero as applicable.
    Also in section 250.1, we have deleted the definitions for ``sum of 
the values of the remaining flight coupons'' and ``comparable air 
transportation'' as these terms are no longer used in the rule text.
B. Zero Fare Tickets
    The NPRM: We proposed to clarify in the rule text that DBC must be 
offered to ``zero fare ticket'' holders who are involuntarily denied 
boarding. We asked the public to comment on whether these passengers 
should be protected by the oversales rule, and whether the proposed 
calculation method for their DBC amounts is reasonable (i.e., the 
``passenger fare'' for purposes of DBC would be the fare of the lowest 
priced ticket paid for a comparable class of ticket on the same 
flight). We also invited the public to suggest any alternative method 
of establishing denied boarding compensation for zero fare ticket 
holders, including whether we should allow carriers to compensate these 
passengers using the same ``currency'' (e.g., frequent flyer miles or 
vouchers) in which the tickets were obtained.
    Comments: The individual and consumer organization commenters 
generally support affording zero fare ticket holders who are 
involuntarily denied boarding the same protection and rights as 
passengers with other tickets. Regarding the form of compensation, some 
commenters suggest that compensation may be in the same form of 
``currency'' as that was used in acquiring the tickets; others are in 
support of the Department's proposal, i.e., providing zero fare tickets 
holders DBC in the form of cash or check based on the lowest fare paid 
for a ticket on the same flight for a comparable class of service. Some 
commenters support payment in either form.
    The majority of the industry commenters do not oppose applying the 
oversales rule to zero fare ticket holders who are involuntarily denied 
boarding. However, these commenters are adamant that zero fare tickets 
covered under the oversales rule should not include non-revenue tickets 
such as airline employee passes. With respect to the form of DBC 
payment to zero fare ticket holders, several commenters are in support 
of compensating those passengers in the same form of ``currency'' that 
they used to acquire the tickets. ATA state that carriers should have 
the discretion to pay DBC in the same form of ``currency,'' in travel 
vouchers, in cash/check, or in any combination thereof. ATA reasons 
that a mandatory cash payment requirement would create problems for 
carriers because gate agents cannot assign a cash value to the 
passenger's fare as they do not have information on the lowest 
comparable fare sold on the same flight. On similar grounds, the 
National Airlines Council of Canada avers that it is virtually 
impossible to figure out the value of a ticket in the comparable class 
of service ``on the spot'' as it is subject to a wide range of 
variables.
    JAL opposes the inclusion of zero fare ticket holders under the 
oversales rule, stating that it should be left to a carriers' 
commercial judgment as to whether to compensate zero fare ticket 
holders; JAL further states that the Department should not assume that 
carriers' decisions would be adverse to passengers' interests. Also in 
opposition to the proposal, South African Airways states that such a 
requirement would drastically reduce the carriers' ability to offer 
zero fare tickets.
    DOT Response: The majority of commenters from both consumer and 
industry representatives seem to agree that certain types of zero fare 
ticket holders should be compensated when they are denied boarding 
involuntarily in an oversale situation. The Department agrees with most 
industry commenters that compensable zero fare tickets should exclude 
``non-revenue'' tickets as that term has traditionally been used in the 
industry. In that regard, we have added a definition in the final rule 
that defines ``zero fare tickets'' to cover only tickets acquired with 
frequent flyer miles and airline travel vouchers, as well as 
consolidator tickets that are purchased with money but do not display a 
dollar amount on the ticket. In our view and the view of most 
commenters, zero fare ticket holders provided something of value in 
exchange for their air transportation and when they are bumped, they 
should be compensated. The Department also wishes to point out that, 
for most non-revenue tickets such as airline employee and employee 
family travel vouchers, the terms and conditions accompanying these 
tickets have already explicitly excluded them from any compensation for 
involuntarily denied boarding. We note that under the definition of 
``zero fare ticket,'' a passenger who paid a nominal monetary amount in 
connection with a ticket may still qualify as a zero fare ticket 
holder. Therefore, a carrier must in those cases treat a passenger as a 
zero fare ticketholder even if the passenger's fare is not ``zero'' in 
a literal sense, e.g., where the passenger has paid by cash or credit 
card the requisite taxes or ``processing fees'' and ``service fees'' 
for the redemption of travel vouchers or frequent flyer miles. On the 
other hand, if a passenger has paid substantial monetary value for the 
air transportation, e.g., paid cash for an economy class seat and used 
frequent flyer miles to upgrade to a business class seat, this 
passenger should not be treated as a zero fare ticket holder if bumped 
from the flight and the amount of DBC the passenger receives should be 
based on the economy class fare paid by that passenger. However, the 
carrier must credit the amount of frequent flyer miles used for an 
upgrade back to the passenger's account if any substitute 
transportation provided is not in the class of service that he or she 
used the frequent-flyer miles to acquire.
    With respect to the form of DBC for zero fare ticket holders, some 
consumer commenters urge the Department to require all DBC to be paid 
in cash or check while many industry commenters either oppose paying 
DBC to zero fare ticket holders or at a minimum, argue that the 
Department should allow those passengers to be compensated by means 
other than cash or check. The Department has fully evaluated the 
reasons presented by the carriers for why we should not mandate cash or 
check DBC payments to zero fare ticket holders, but we have decided to 
apply the same DBC standard by requiring carriers to offer DBC to these 
passengers in the form of cash or check. DBC in non-monetary forms such 
as frequent flyer miles would not compensate a passenger for food, 
lodging and other expenses that may be associated with delays caused by 
the denied boarding. Furthermore, we reject some commenters' notion 
that requiring carriers to pay cash to these passengers may result in 
harm to consumers, such as making frequent flyer tickets more expensive 
and restrictive for consumers. We note that under section 250.5(c), 
carriers may offer free or reduced rate air transportation to any 
involuntarily bumped passengers, including zero fare ticket holders, in 
lieu of cash payment. Carriers should not assume that zero fare ticket 
holders would almost always opt to receive cash or check

[[Page 23139]]

compensation, as the cash or check DBC amount is calculated with the 
lowest comparable fare as the base amount. We also disagree with some 
carriers' suggestion that procedurally paying DBC in cash or by check 
based on the lowest comparable fare is unworkable because the gate 
agents may not have the lowest fare information ``on the spot.'' Just 
as is permitted for DBC payment to passengers who purchased their 
tickets with money, carriers are being afforded up to 24 hours after 
the involuntary denied boarding occurred to tender a check to the 
affected passengers. We believe the 24-hour window is sufficient for 
the carriers to obtain necessary fare information and calculate the 
appropriate DBC amount for the zero fare ticket holders.
    In calculating the DBC amounts for zero fare ticket holders, we 
clarify in the rule text as well as here that the applicable lowest 
comparable fare paid by cash, check, or credit card refers to the fare 
in the same class of service as the zero fare ticket. By adding a new 
definition for ``class of service,'' we explain that we are referring 
to the lowest fare within the same service class or cabin such as first 
class, business class, economy/coach class, or economy plus (premium 
economy) class. For instance, when a passenger holding a zero fare 
ticket in economy plus class is bumped, as the base fare for DBC 
calculation purposes, the carrier should identify the lowest fare paid 
by cash, check, or credit card in the economy plus class on that 
flight, not the economy class.
C. Disclosure Requirements
    The NPRM: In the NPRM we proposed to require that (1) carriers 
offer cash/check DBC options verbally if they verbally offer a travel 
voucher as DBC to passengers who are involuntarily denied boarding, and 
(2) carriers inform passengers solicited to volunteer for denied 
boarding about their principal boarding priority rules applicable to 
that specific flight, the availability of alternate transportation, and 
all material restrictions on the use of any transportation vouchers 
that may be offered as compensation for giving up the passenger's 
reservation. We asked whether there are any other forms of disclosure 
that may better inform passengers being solicited to volunteer or those 
involuntarily bumped of their rights and carriers' obligations.
    Comments: Most consumer advocacy groups and associations support 
imposing more disclosure rules regarding oversales. CTA proposes more 
disclosure to passengers solicited as volunteers, such as informing 
them of the oversales rule in writing and orally prior to the 
negotiation, and providing them information on whether they will 
receive confirmed seats and when they are expected to arrive at the 
destination on the alternative flight. CTA also recommends that 
carriers provide their boarding priority rules to the passengers when 
soliciting volunteers. FlyersRights.org suggests that carriers should 
be required to publish their principal boarding priority rules on their 
websites and inform passengers of their risks of being bumped before 
ticket sales. Comments posted on the website of Regulation Room 
generally support our proposal of requiring carriers to verbally inform 
passengers of the cash or check option for DBC payment if carriers 
verbally offer these passengers travel vouchers as DBC. These 
commenters also support the proposal that both passengers solicited as 
volunteers and passengers denied boarding involuntarily should be 
clearly informed of their options, the amount of compensation they can 
receive, and details of alternative flights. They also recommend 
enhancing disclosures regarding oversales prior to and at the time of 
ticket sales, such as requiring carriers to ask whether a passenger is 
willing to be bumped at the time of making the reservation and to 
provide notice to all passengers 24 hours before the departure if the 
flight is oversold.
    ASTA supports the idea of disclosing oversales rule at the time of 
ticket purchase and advising passengers of the risk involved if they do 
not secure a seat assignment. ASTA also recommends that carriers be 
prohibited from ``gaming the system'' by making it impossible to obtain 
seat assignments. ASTA points out that all disclosures regarding 
oversales should be made earlier because providing an explanation to 
passengers at the gate is time consuming and it may create chaos and 
passenger confusion.
    Most carrier and carrier association commenters oppose all the 
proposed verbal disclosure requirements. These commenters are generally 
concerned about the additional time they assert would be needed for 
gate agents to comply with the various verbal notification 
requirements, arguing that these requirements would impose hardship on 
the agents who are under time pressure to board passengers and close 
out the flight. These commenters also contend that this information is 
available in the written notice and assert that verbal notification is 
not necessary and may be hard to enforce. Some carriers also point out 
that if the gate agents are not familiar with the oversales rule, 
verbal notification may result in inaccurate or incomplete information 
being passed on to consumers, causing further confusion.
    DOT Response: As we have stated in the NPRM, we believe disclosure 
in an oversales situation is essential for the passengers to fully 
understand their rights and options. After thoroughly evaluating all 
the comments, we have decided to adopt some but not all of our 
proposals in this regard. We will discuss each proposal individually.
    With respect to the requirement that carriers must verbally offer 
the cash option when they verbally advise passengers bumped 
involuntarily that a carrier voucher as a form of DBC is available, we 
have reached the conclusion that this requirement is in fact critical 
to ensuring that passengers are fully informed when they are given the 
opportunity to choose what form of DBC they are willing to take. 
Although the cash option is clearly stated in the written notice that 
carriers are required to provide to passengers denied boarding 
involuntarily, it is likely that due to the time pressure and 
occasional confusion associated with involuntarily denied boarding, 
passengers may not have the opportunity to fully review the written 
notice before they choose the form of DBC that they are willing to 
accept. Thus, it is the Department's view that when carriers verbally 
offer a voucher option but omit (either inadvertently or intentionally) 
mentioning the cash option, it is unfair and deceptive to the 
passengers. Furthermore we consider that to the extent carriers are 
willing to explain to passengers their option of receiving carrier 
vouchers as DBC payment, the additional time needed to add a few words 
about the cash/check option should not be substantial. In any event, if 
carriers are concerned about the additional time needed to verbally 
inform passengers of all options, it is permissible to not verbally 
advise passengers of DBC options at all. They can simply hand the 
passengers a written notice.
    On similar grounds we have decided to adopt the proposed 
requirement that carriers must disclose any material restrictions on 
airline travel vouchers offered to both passengers solicited to be 
volunteers and passengers denied boarding involuntarily. Some carriers 
argue that the process of informing passengers is too time-consuming. 
The Department disagrees although we note that the more time-consuming 
such a notice is, the more restrictions must apply to the voucher, 
necessitating more than ever that notice of such restrictions be 
provided. To provide a brief summary covering all the material

[[Page 23140]]

restrictions on vouchers should not take more than a few moments. For 
example, when the carrier announces at the gate that it needs 
volunteers who will receive a roundtrip voucher for any destination 
within the continental U.S., to add a description of conditions on the 
use of vouchers such as ``the vouchers are not transferrable, subject 
to certain blackout dates and service charges and will expire after two 
years * * *'' would not require more than a few moments, and carriers 
may encourage anyone who wants to learn more details to speak to the 
gate agent directly. Typical examples of material restrictions and 
conditions are expiration dates, blackout dates, advance booking 
requirements, transferability restrictions, administrative fees and 
flight choice restrictions. We emphasize that this is not an exhaustive 
list and by the term ``material'' we refer to all the restrictions and 
conditions that might reasonably be expected to affect a passenger's 
decision regarding whether to accept the voucher.
    Since the substance of any restrictions and conditions on the 
airline vouchers varies by carrier and is not incorporated in the 
general written notice mandated by section 250.9, we require that any 
verbal offer of a travel voucher by carriers, either to passengers 
solicited to volunteer or to passengers denied boarding involuntarily, 
must be accompanied by a verbal explanation of any material 
restrictions and conditions imposed on that voucher. In the event 
carriers make a written offer of travel vouchers, but no verbal offer, 
carriers should provide a written explanation of the restrictions and 
conditions on travel vouchers, along with the general written notice 
required by section 250.9.
    In adopting these disclosure requirements, we clarify that we do 
not intend to require carriers to give every passenger who is in danger 
of being denied boarding involuntarily a ``personal presentation'' of 
their rights. The Department's goal is to ensure that when carriers opt 
to verbally provide any information to the passengers, the information 
is not presented in a misleading manner regarding any material terms.
    In the NPRM, we also proposed to require carriers to inform 
passengers solicited to volunteer of their principal boarding priority 
rules and the availability of comparable air transportation. Our 
intention in proposing these two requirements was to provide passengers 
more information upon which they would be able to determine whether 
volunteering to give up their confirmed reservations would be in their 
best interests. After considering all the comments in this regard, we 
are convinced that these proposals, as well as some other disclosure 
measures not proposed by us but recommended by consumer commenters, may 
not achieve the expected goal. Although we disagree with some carriers' 
comments that providing such information will only assist some 
passengers to ``game'' the system to the detriment of the majority of 
other passengers, we note that providing such information at the gate 
is time consuming and carriers' principal boarding priority rules can 
be found in the written notice prescribed in section 250.9, as well as 
on most carriers' websites and/or in the contracts of carriage. We 
conclude that the burden on carriers of verbally providing such 
information at the boarding gates outweighs the benefits. Furthermore, 
we reject some commenters' suggestions that all passengers should be 
informed of the carriers' principal boarding priority rules and whether 
a particular flight was oversold at the time they make their 
reservations. We note that oversales might not occur until close to the 
departure time or date and, due to no-shows, many overbooked flights 
will not be oversold on the day of departure. We believe requiring 
carriers to provide these two types of information through their 
reservation systems may not be beneficial to consumers yet will 
increase the operational costs of carriers, depress revenues and limit 
seat availability. These costs and restrictions ultimately will be 
borne by the consumers.
    Related to the boarding priority rule disclosure proposal, 
FlyersRights.org and some other consumer commenters also suggested that 
we should not allow carriers to set their boarding priority rules based 
on the amounts of passengers' fares. FlyersRights.org went further to 
urge the Department to declare that bumping a passenger who checked in 
earlier but who paid a lower fare is an unfair and deceptive practice. 
We cannot agree. With the exception of unlawful discrimination, the 
Department has traditionally allowed carriers extensive flexibility to 
set their boarding priority rules based on several criteria, including 
passengers' fares. We believe affording carriers such flexibility is an 
important marketplace tool and permits carriers to proactively control 
the costs of oversales so they are able to continue to offer the 
maximum numbers of seats to the traveling public. It makes perfect 
sense that passengers who pay more for a ticket to get the last 
available seat and the right to obtain a full refund also want to be 
assured that they will be the last person to be bumped from an oversold 
flight. We do agree that passengers seeking the lowest fare on a flight 
are most likely budget-conscious consumers and are most likely to be 
the ones bumped by some carriers. In this final rule, we have adopted 
provisions to increase the DBC limits and rates based on the 
passengers' fare which should help them.
    With respect to the proposal to require disclosure of the 
availability of alternate transportation at the time of volunteer 
solicitation, we have come to the conclusion that such a requirement is 
unworkable under most circumstances. The availability of alternate 
transportation is a fluid issue and is subject to many variables. Due 
to these variables, what carriers may offer at the time of volunteer 
solicitation could change by the time the alternate transportation is 
provided to the volunteer. Should such change occur, the expectation 
created by the earlier information may cause passengers further 
confusion and frustration. Thus, we are not going to require such 
information to be provided at the time of volunteer solicitation.
D. Covered Entities and Other Miscellaneous Issues
    The NPRM: The oversales rule currently covers scheduled passenger 
service using aircraft with 30 or more seats. We solicited comments on 
whether the oversales rule should be expanded, either in its entirety 
or partially, to cover scheduled services using aircraft with 19-29 
seats and whether we should allow these flights to be oversold at all.
    Comments: CTA believes that the oversales rule should apply to all 
flights of major carriers, regardless of the size of the aircraft. 
Comments from RegulationsRoom.org generally support applying the 
oversales rule to all aircraft sizes. Some of these commenters urge the 
Department to ban oversales on small aircraft, arguing that being 
bumped from those flights is more disruptive and costly to passengers. 
ASTA supports extending the oversales rule to aircraft with 19-29 
seats, stating that involuntary denied boarding on short-haul flights 
operated by small aircraft has drastic effects on passengers who are 
connecting to long-haul flights and these passengers are often 
surprised after being bumped to discover they have no protection from 
the Department's oversales rule.
    On the carriers' side, ATA supports maintaining the status quo, 
i.e., allowing overbooking on flights operated with aircraft with 19-29 
seats and not applying the oversales rule to

[[Page 23141]]

these flights. ATA argues that banning oversales on these flights will 
threaten the existence of small community air services and imposing the 
oversales rule on these flights would be too costly to carriers. RAA 
also opposes banning oversales on regional flights, arguing that such a 
ban would eliminate the ability of carriers to serve small communities, 
as carriers would not be able to bear the costs of running flights with 
empty seats. RAA also contends that the denied boarding risk is low on 
regional flights operated by small aircraft because regional carriers' 
load factors lag behind large aircraft operators.
    DOT Response: The Department has been persuaded that it should not 
extend the oversales rule to flights operated with aircraft with 19-29 
seats. Aircraft of this size make up a small and diminishing portion of 
scheduled-service operations, particularly in the case of the code-
share partners that were the predicate for this proposal. After being 
bumped from a short-haul segment, the cost of paying DBC based on the 
fare to a passenger's downline destination -- up to 400% of the fare 
and $1,300 under the final rule -- would be an unreasonable burden for 
operators of 19-29-seat aircraft. These carriers are most likely to be 
the very small entities to which the Regulatory Flexibility Act 
requires federal agencies to afford special consideration in 
rulemaking. Based on similar rationale, we have also decided that it is 
not in the best interests of the public to ban oversales on these 
flights because doing so will further reduce the capacity of flights 
serving smaller airports and communities and cause price increases.
    Although not proposed in the NPRM, there are several issues raised 
by the commenters that the Department feels it is important to address 
in order to clarify what appears to be confusion associated with the 
oversales rule. First, several foreign carriers urge the Department to 
harmonize its oversales rule with the rules of other jurisdictions, 
such as the European Union. The Department agrees in principle that the 
U.S. oversales rule should not conflict with the rules of other 
jurisdictions. The Department has worked diligently to that end, and 
sees no direct conflict between our oversales rule and the rules of 
other jurisdictions. We disagree with some commenters' claim that the 
rule as proposed and finalized here will cause confusion among carrier 
staff and passengers. With respect to both domestic and international 
flights, the U.S. rule applies only to denied boardings that occur at a 
U.S. airport, a relatively straightforward applicability standard that 
is similar to the approach taken in the EU oversales rule for flights 
of non-EU carriers. Thus, passengers are clear that when they are 
denied boarding at a U.S. airport, the U.S. oversales rule applies. The 
carriers have the responsibility to train their staffs to be familiar 
with rules of the jurisdictions to and from which they operate. We note 
that the EU oversales rule has an exception for denied boardings that 
are subject to compensation requirements of other jurisdictions. To the 
extent that flights of EU carriers from the U.S. to an EU state may 
also be subject to the EU oversales rule, those carriers should be able 
to comply with both the U.S. and EU rules (e.g., by paying the higher 
compensation amount if the required amounts differ).
    CTA and FlyersRights.org both suggest that the Department should 
not exempt carriers from complying with the oversales rule when the 
involuntary denied boarding is caused by an equipment change due to 
factors that are within carriers' control, e.g., crew schedule or 
maintenance issues. We have carefully examined this suggestion but are 
not convinced that this proposal is consistent with the underlying 
rationale of our oversales rule. The Department's longstanding policy 
of exempting carriers from paying DBC when an involuntary denied 
boarding was caused by equipment change is based on the grounds that in 
this situation, the resulting denied boardings were not caused by 
overbooking, a practice that absent compensation is fundamentally 
unfair to the passengers who have paid for confirmed seats but are not 
permitted to board the flight because their promised seat was sold to 
another person. Accordingly, we will not change our rule involving 
oversales that result from substitution of equipment of lesser 
capacity.
    Also raised by several foreign carriers is the issue of an 
alternative to ``cash'' payment of DBC. These carriers are under the 
impression that in order to comply with our rule, they must keep a 
large amount of cash (currency) at the U.S. airports they serve for the 
purpose of making cash payments to passengers denied boarding 
involuntarily. These carriers assert that such a cash reserve at their 
stations in U.S. airports, many of which are staffed by third-party 
contractors, imposes security concerns. Thus, these carriers urge the 
Department to allow them to tender DBC payments to passengers in the 
form of a debit card or other forms of electronic funds. The Department 
wishes to clarify that under our rule, carriers are permitted to tender 
a check, in lieu of cash payment, to passengers denied boarding 
involuntarily, and to do so up to 24 hours after the denied boarding 
occurred. The check may be mailed to the address that a passenger has 
provided. Therefore, it is not required that carriers maintain large 
amounts of cash at airports. We acknowledge the convenience and 
security features offered by electronic funds, but have not had the 
opportunity to fully examine the benefits and limitations of using this 
procedure as an alternative to cash/check DBC payments in this 
rulemaking proceeding. We may further explore this issue in future 
rulemaking.
    Finally, we have decided not to adopt Delta's recommendation that 
the revised oversales rule should be applied only to tickets purchased 
on or after the effective date of the final rule. Such application 
would inevitably result in the situation where passengers bumped from 
the same flight will be subject to different rules. Additional delays 
may occur at the boarding gates when the gate agents have to spend 
additional time to determine the purchase dates of the tickets in order 
to determine which rule applies. For this reason, we will require that 
all denied boardings and other DBC-related processes covered by this 
rule that occur on or after the effective date of the final rule must 
comply with the new rule, regardless of the transaction dates of the 
ticket sales.
    We note that this final rule also includes a technical amendment 
concerning reporting of oversales. We are correcting a technical 
inconsistency in the oversales reporting requirements in section 
250.10. One sentence in that section states ``The reporting basis shall 
be flights originating or terminating at or serving, a point within the 
United States.'' The last sentence of that section reads: ``No reports 
need be filed for inbound international flights on which the 
protections of this part do not apply.'' Apparently, when the rule was 
amended many years ago to remove applicability to international flights 
inbound to the United States, the second sentence quoted above was 
added but the first sentence was not revised to remove the reference to 
flights ``terminating in'' or ``serving a point within'' the United 
States. The intent and the practice has been not to include 
international flights that terminate in the U.S. (i.e., inbound 
international flights) in these Form 251 data. This has been clear in 
paragraphs (A) and (E) in the instructions to the form (see http://www.bts.gov/programs/airline_information/forms/pdf/form_251.pdf). We 
are not aware of any instances in which data for inbound international 
flights have been

[[Page 23142]]

inadvertently included in Form 251 reports.

7. Full Fare Advertising

A. Change in Enforcement Policy
    The NPRM: The Department's price advertising rule (14 CFR 399.84) 
states that any advertised price for air transportation, an air tour or 
an air tour component must be the entire price to be paid by the 
customer for that transportation, tour or tour component. However, the 
Department's enforcement policy with regard to this rule has permitted 
sellers of air transportation to state separately from the advertised 
price government-imposed taxes and fees, provided that they are not ad 
valorem in nature, are collected by the seller on a per-passenger 
basis, and their existence and amount are clearly indicated in the 
advertisement so that the consumer can determine the full price to be 
paid. The Department has prohibited sellers of air transportation from 
breaking out any other seller imposed fees, including fuel surcharges 
and service fees, and taxes imposed on an ad valorem basis.
    In the NPRM, the Department proposed enforcing the price adverting 
rule as it is written. This proposal would change the existing 
enforcement policy by ending the practice of permitting sellers to 
exclude government taxes and fees from the advertised price, and would 
instead require that the price advertised include all mandatory fees. 
The Department invited comments on how sellers of air transportation 
foresee this change in enforcement policy affecting the methods they 
use to advertise fares and how consumers view the change. The 
Department also requested comment on the potential cost of changing the 
current advertising structures that carriers and ticket agents have in 
place in order to adhere to the proposed policy shift.
    Comments: Individuals and consumer organizations such as 
Flyersrights.org, in addition to individuals who participated on 
Regulation Room, support the proposal that advertisements for air 
transportation state the total price to be paid by the consumer. Some 
commenters participating in discussions through Regulation Room 
reported that there were occasions when they thought they were going to 
pay one price for air transportation, but the final price was much 
higher due to additional taxes and fees. Regulation Room commenters 
also stated that the current advertising method borders on bait-and-
switch tactics. Some individual commenters expressed similar 
sentiments, noting how they have been surprised by the total amount to 
be paid at the end of a purchase online and their preference to know 
the total amount to be paid earlier. Some consumers and consumer groups 
go further by suggesting that the Department should require that the 
true cost of travel, including ancillary fees, be disclosed earlier in 
the booking process. For example, CTA states that even if the price 
advertising rule requires the disclosure of all mandatory fees, 
consumers may still have trouble finding out the true cost of travel 
due to the proliferation of many kinds of ancillary fees for optional 
services.
    U.S. carriers and carrier associations generally oppose the 
Department changing its enforcement policy to enforce the full price 
advertising rule as written. ATA states that its members support fare 
transparency, but notes that the Department declined to revise its 
full-fare rule four years ago and contends that the airfare advertising 
landscape has not changed since that time in a manner that would 
justify a change in 25 years of enforcement policy. ATA notes that 
several other industries advertise without including government-imposed 
taxes and fees, and states that the air transportation industry should 
not be treated differently. It asserts that this policy shift would 
suppress valuable information to consumers about how much of their 
total price consists of government-imposed taxes and fees. In addition, 
ATA argues that this policy shift would negatively impact competition 
because government-imposed taxes and fees vary from airport to airport 
and routing to routing. ATA contends that this means that an airline 
that has a competitive fare, but also has a routing that subjects the 
fare to higher taxes and fees, will be disadvantaged if it is required 
to include those taxes and fees in the advertised price. It remarks 
that this could negatively impact service to smaller communities. ATA 
also raised concerns about the cost implications of the proposal, 
because the proposal would require airlines to perform additional route 
pricing analysis, programming changes, website changes, and auditing 
and testing of changes. Many U.S. carriers raise similar points.
    The views of foreign carriers and associations varied, with many 
opposing the proposed mandate that the advertised fare be the full fare 
to be paid by the customer but some supporting it. IATA believes that 
there is no evidence of widespread advertising deception to justify a 
change in the Department's enforcement policy. Additionally IATA notes 
that the complexity of non-airline charges makes listing a full fare 
with ``all mandatory fees'' difficult, and would only confuse air 
travel consumers because this complexity prevents a true fare 
comparison as the actual fare is obscured by the additional government-
imposed taxes and fees. IATA also notes that passengers are made fully 
aware of the purchase price before purchase. Most foreign airlines 
support IATA's comments. Some foreign carriers, such as Singapore 
Airlines, Qatar Airways, and Jetstar Airways, support the proposed 
mandate that advertisements state the total price to be paid by the 
consumer. Many of these airlines state that they already advertise the 
total price to be paid by consumers due to regulations of other 
governments. Some foreign carriers expressed concerns about the 
applicability of this rule to advertisements on websites that are not 
domiciled in the United States or directed to United States customers.
    Among other industry interests that commented, ASTA and ITSA 
support this policy shift and note that full fare disclosure is the 
best way to eliminate passenger confusion and ensure that passengers 
understand the total cost of their air travel. ASTA asserts that the 
full fare displayed in advertisements should include all mandatory 
fees, regardless of their source. The United States Tour Operators 
Association (USTOA) disagrees and states that the proposed change will 
place costly burdens on travel agents while doing very little to ease 
customer confusion in airline pricing. USTOA contends, as does ATA and 
many U.S. airlines, that ending the practice of permitting sellers to 
exclude government taxes and fees from the advertised price is not 
justified because the airfare advertising landscape has not changed 
since the Department last declined to revise the full-fare advertising 
rule. USTOA states that tour operators would be especially negatively 
affected by this shift in policy because government-imposed fees vary 
widely depending on where the consumers choose to start their trip, and 
therefore a tour operator would not be able to advertise a tour 
effectively since the purchaser usually has the option of a number of 
gateways.
    DOT Response: The Department has decided to adopt the proposed 
policy change in relation to the full-fare advertising rule. We 
disagree with comments that the Department has not shown true harm to 
consumers in not having the full price quoted to them up front. On the 
contrary, comments from individual commenters and persons participating 
in Regulation Room show consumers feel deceived when the total

[[Page 23143]]

price, including taxes and fees, is not quoted to them after an initial 
fare inquiry. Many consumers feel that advertising fares that exclude 
mandatory charges is a ``bait and switch'' tactic by travel sellers. 
The Department has also received complaints regarding fare advertising, 
some of which specifically mention feeling deceived when they are not 
quoted the full price to be paid after an initial inquiry.
    Also, contrary to the assertions of some commenters, the Department 
has seen changes in the advertising methods used by sellers of air 
transportation since the Department declined to revise its full-fare 
rule in 2006. Sellers are now marketing air transportation through a 
variety of methods that they were not using then. For example, some 
carriers have started to sell tickets through Facebook and some have 
Twitter feeds dedicated solely to advertising sale fares. Additionally, 
in recent years, carriers are increasingly unbundling the cost of air 
travel, which further obscures the total fare to be paid by the 
consumer. Carriers and online travel agencies have also started to 
offer more complicated routings with multiple connections in order to 
provide the ``lowest'' airfare to consumers. However, with these 
changes in routings, taxes and fees can increase and become a 
significant portion of the price to be paid by consumers. In those 
cases, consumers need a full picture of the total price to be paid in 
order to compare fares and routings. In order to understand the true 
cost of travel, consumers need to be able to see the entire price they 
need to pay to get to their destination the first time the airfare is 
presented to them.
    We also are not persuaded by argument that the Department should 
not require that the advertised price for air transportation, a tour or 
tour component be the total price to be paid by the customer for that 
transportation, tour or tour component because other industries 
advertise without including government-imposed taxes and fees. Airfares 
are different from products in other industries for a variety of 
reasons, including the multitude of methods of advertising that sellers 
of air transportation employ and the various taxes and government fees 
that apply. We believe that consumers are deceived when presented with 
fares that do not include numerous required charges and, in our view, 
air travelers will be better able to make price comparisons when they 
can see the entire price of the air transportation, tour or tour 
component being advertised. The advertised fare under this policy shift 
must include all government-imposed taxes and fees as well as mandatory 
carrier-imposed charges, including booking fees if the only way the 
consumer can obtain the air transportation is by paying the booking 
fee. While a carrier or ticket agent generally is not required to 
include a booking fee in its advertised fare if there are other means 
for the passenger to obtain the air transportation (e.g., a booking fee 
only applies for tickets that are purchased over the telephone), where 
airfares are advertised via an Internet site that permits consumers to 
purchase fares, the fares advertised on the site must include all 
charges required to make the purchase on the site. For example, it 
would be unfair and deceptive to hold out on such an Internet site a 
fare that can be purchased only at airport ticket counters but that 
excludes a convenience fee that is applied to Internet sales.
    In regard to the costs related to this change, online travel 
agencies that will face many of the same marketing and programming 
challenges as carriers do, if not more, feel that the operational costs 
of adhering to the rule will be overly burdensome. Sellers of air 
transportation are constantly updating their fare matrices and the 
methods by which they display fares. In addition, we believe many 
carriers may already have programs in place to accommodate this policy 
shift, as some foreign governmental entities such as Australia and the 
European Union already require the total price to be shown to 
consumers. We note also that the requirement for advertisements to 
state the total price is limited to advertisements published in the 
United States, including via the Internet if accessible in the U.S. 
Further, recognizing the amount of print advertising slated for use by 
tour operators that would need to be pulled thereby increasing costs of 
print advertising revision, we have decided that the new full fare 
adverting requirements will not take effect until 180 days after the 
publication of this final rule in the Federal Register. This should 
reduce the costs related to this requirement.
    Some airlines were concerned that passengers would not know how 
much of their total price consists of government imposed taxes and 
fees. We want to assure these carriers that nothing in this rule 
prohibits them from making this information available to consumers. 
This final rule allows carriers to advise the public in their fare 
solicitations about government taxes and fees, or other mandatory 
carrier or ticket agent imposed charges applicable to their airfares. 
Sellers of air transportation may have pop-ups or links adjacent to an 
advertised price to take the consumer to a listing of such charges, or 
they may display these charges on the same page in fine print if they 
prefer. Such charges must accurately reflect the actual costs to the 
carrier of the service or matter covered, be displayed on a per 
passenger basis, and be displayed in a manner that otherwise does not 
deceive consumers. Consequently, the rule requires that any such 
listing not be displayed prominently and be presented in significantly 
smaller type than the listing of the total price to ensure that 
consumers are not confused about the total price they must pay. Also, 
we are prohibiting the presentation of any ``total'' fares in 
advertising that exclude taxes, fees or other charges since the major 
impact of such presentations is to confuse and deceive consumers.
B. Explicit Inclusion of Ticket Agents
    The NPRM: The Department proposed to explicitly apply the price 
adverting rule to ticket agents. We have for years considered ticket 
agents to be subject to the price advertising rule since the 
Department's statutory authority to prohibit unfair and deceptive 
practices and unfair methods of competition applies to both carriers 
and ticket agents. However, the Department's price advertising rule 
doesn't specifically indicate that ticket agents are covered by the 
rule.
    Comments: Comments received from airlines, travel agents, consumer 
groups and others all supported the inclusion of ticket agents in the 
price advertising rule. Air New Zealand and Qantas indicate that their 
support for including ticket agents in the rule is contingent on 
airlines not being responsible for the compliance of ticket agents.
    DOT Response: The final rule explicitly includes ticket agents in 
the price advertising rule. This is consistent with longstanding 
Department policy and we did not receive any adverse comments. This 
inclusion will ensure that consumers are more fully protected. With 
regard to the Air New Zealand and Qantas comment, airlines have always 
been legally responsible along with their agents for their agents' 
advertising violations and they will continue to be under the revised 
rule.
C. Each-Way Advertising
    The NPRM: The Department proposed to codify its enforcement policy 
on each-way airfare advertising. Under this policy, advertisement of an 
each-way airfare that is contingent on a round-trip purchase is an 
unfair and deceptive practice unless the airfare is advertised

[[Page 23144]]

as ``each way'' and the round-trip purchase requirement is clearly and 
conspicuously disclosed in a location that is prominent and proximate 
to the advertised fare amount. The Department invited interested 
parties to comment on this proposal and on whether the Department 
should adopt a similar rule for air/hotel packages that advertise a 
single price but are sold at that price on a double occupancy basis, 
i.e., two individuals must purchase the package to obtain the 
advertised fare.
    Comments: Individual consumers and consumer groups had divergent 
views on whether the Department should allow each-way airfare 
advertising even if the round-trip purchase requirement is clearly and 
conspicuously disclosed proximately and prominently to the advertised 
fare. Flyersrights.org opposes this proposal, believing that disclosure 
of the full round-trip purchase price is most helpful to consumers. 
Consumers Union and AAPR support the proposed regulation, as long as 
the round-trip purchase requirement is clear and conspicuous. Most of 
the commenters on Regulation Room and individual commenters generally 
support this proposal but some, like Flyersrights.org, suggest the 
Department require that the full round-trip purchase price be 
disclosed. Airlines, airline associations and travel agency groups 
express support for the each-way advertising regulation. ATA requests 
clarification as to whether ``one way'' advertising would be allowed if 
there was no round-trip purchase requirement. ASTA supports this 
proposal as well, noting that specifically prohibiting the use of ``one 
way'' to advertise fares that are contingent on round-trip purchases 
will allow consumers to better comparison shop among fare quotes.
    We received relatively few comments on whether the Department 
should adopt a rule requiring specific disclosure for air/hotel 
packages that advertise a single price but are sold at that price only 
on a double occupancy basis. Some commenters participating in the 
Regulation Room discussion state that clear and conspicuous disclosure 
concerning occupancy-related rates should be required. ASTA comments 
that double occupancy rates should still be allowed, as long as the 
``per person'' requirement is disclosed.
    DOT Response: The Department is codifying existing enforcement 
policy allowing sellers of air transportation to advertise an each-way 
price that is contingent on a round-trip ticket purchase so long as the 
round-trip purchase requirement is clearly and conspicuously disclosed 
in a location that is prominent and proximate to the advertised fare. 
This codification of longstanding enforcement policy allows sellers of 
air transportation to be flexible in the way they advertise round-trip 
fares while still requiring all pertinent disclosures to consumers. 
While the Department understands that some consumers would prefer the 
full round-trip price to be displayed, the Department has not found 
that the current regime has led to consumer confusion or deception and 
it does permit certain types of advertising that are beneficial. We 
note also that this final rule specifically prohibits referring to such 
an airfare as ``one way'' even if the round-trip purchase requirement 
is clearly disclosed, which should minimize or prevent consumer 
confusion. In response to ATA's request for clarification, we agree 
that ``one way'' advertising is allowed when purchase of that fare is 
not contingent on a round-trip purchase. We are deferring to a later 
date any requirement regarding double occupancy advertisements as we 
received few comments on this matter. We do not have enough information 
at this point to determine if consumers feel deceived by double 
occupancy rates, and consequently we will not formulate a specific 
regulation regarding the methods of such advertising at this time. 
``Double occupancy'' advertising will still be subject to the general 
provisions of 49 U.S.C. 41712.
D. Opt-Out Provisions
    The NPRM: The Department proposed to prohibit ``opt-out'' 
provisions by sellers of air transportation. ``Opt-out'' provisions 
involve situations where a consumer is purchasing air travel or an air 
tour package online and certain fees for ancillary services or products 
are pre-selected for the consumer and added to the total price to be 
paid by the consumer at the end of the transaction. The consumer is 
deemed to have selected these services (and the charges for them) 
unless the consumer ``unchecks'' the pre-selected box or boxes for the 
relevant services. The NPRM proposed prohibiting this practice as 
unfair and deceptive in violation of 49 U.S.C. 41712 and allowing 
carriers and ticket agents to add an optional service to the total 
airfare to be paid by the consumer only if the consumer affirmatively 
``opts in'' to accept and purchase that service.
    Comments: There was wide support among individual commenters and 
consumer groups for a prohibition against opt-out provisions. A few 
individual commenters noted that this prohibition will allow consumers 
to avoid unwanted fees. All of the individuals commenting through the 
discussion on Regulation Room stated that all optional services should 
be presented to consumers as an ``opt-in'' choice. Individual consumers 
recounted how they were sometimes faced with paying for travel 
insurance they did not need or a seat selection fee they were not aware 
of because those options were ``pre-selected'' by the seller of air 
transportation.
    Many industry commenters, though not all, also agree with a 
prohibition on ``opt-out'' features in advertising. ATA and most U.S. 
carriers, such as US Airways and Delta Air Lines, support this 
proposal. American Airlines states that non-aviation services should be 
offered on an ``opt in'' basis, but that aviation services that most 
consumers expect as part of their travel should be pre-selected. 
American notes that this will allow consumers to customize their travel 
options. IATA does not oppose the prohibition on opt-out provisions. 
AEA notes that EU Regulation 1008/2008 already has an opt-in 
requirement. Qantas Airlines opposes this regulation, stating that it 
feels customers appreciate pre-selected options. ASTA supports a 
prohibition on ``opt-out'' features in price advertising.
    DOT Response: The Department has decided to prohibit the use of 
opt-out provisions by carriers and ticket agents. The fact that 
consumers often don't realize that optional services are included in 
the total price of the ticket due to the deceptive nature of such opt-
out provisions, is borne out by consumer comments. Many industry 
organizations also support prohibiting opt-out provisions. In addition, 
this action will align the United States with the consumer protection 
laws of other jurisdictions which prohibit opt-out provisions, 
including the European Union through its regulation 1008/2008. We do 
not agree with airline comments that consumers like having certain 
airline related services preselected for convenience sake so that they 
can see the total cost of travel with those services. We believe that 
having opt-in selections achieves the same goals of allowing travelers 
to customize their air transportation packages to their travel needs 
and see the total cost of travel with those service while eliminating 
the unfair and deceptive practice of pre-selecting items that the 
consumer has not selected and does not necessarily realize are pre-
selected until late in the process -- sometimes after a purchase is 
complete. This rule would prohibit opt-out provisions for any ancillary 
fee for an optional service such as seat selection, seat upgrades, pre-
boarding, travel insurance, rental cars, and transfers to and from the 
airport. Under

[[Page 23145]]

this rule, an optional service can be added to the total airfare to be 
paid by the consumer only if the consumer affirmatively agrees to pay a 
fee for such service, i.e. by checking a box for that service or other 
concrete action.

8. Baggage and Other Fees and Related Code-Share Issues

A. Covered Entities
    The NPRM: In the NPRM, the Department proposed to require all U.S. 
and foreign air carriers that have websites accessible to the general 
public in the United States through which tickets are sold to provide 
notice to consumers about baggage fees and allowances and other 
ancillary fees that the carrier may charge. More specifically, the NPRM 
proposed: (1) Disclosure on the homepage for at least three months of 
any increase in the fee for passenger baggage or any change in the free 
baggage allowance for checked or carry-on baggage; (2) notice on e-
ticket confirmations regarding the free baggage allowance for that 
flight and any applicable fee for the first and second checked bag and 
carry-on bag; and (3) disclosure of all fees for optional services in 
one central place on the seller's website. The Department noted that 
the recent trend to unbundle services and charge separate fees for 
services that may have once been included in the cost of a ticket has 
led to consumers having difficulty determining the total price they 
must pay to travel by air. The Department requested comment on whether 
these requirements to disclose baggage and other fees should apply to 
ticket agents as well as carriers. We also invited comment on 
alternative proposals, including whether the Department should limit 
the applicability of the disclosure requirements to all flights 
operated by U.S. carriers, U.S. and foreign carriers that operate any 
aircraft with 60 or more seats, or U.S. and foreign air carriers that 
operate any aircraft with or 30 or more seats.
    Comments: Many consumers state that the type of fee disclosures 
contemplated in the proposed rule should apply to all sellers of air 
transportation. Some consumers relayed experiences where they felt fees 
were hidden when booking on online travel agency websites. CTA and BTC 
state that this section should apply to ticket agents as well as 
carriers, but they both note that the agents need accurate and up to 
date information from the airlines via the GDSs in order to provide 
accurate information to consumers.
    USTOA contends that the disclosure requirements, as proposed, 
should not be applied to ticket agents because the airlines are 
updating and changing fees constantly, and the cost to agents to ensure 
that the various airline fees they display are correct would be 
burdensome. USTOA proposes that instead ticket agents simply be 
required to inform consumers on their websites and on e-ticket 
confirmations that baggage and other charges may apply by stating that 
``airline fees for baggage and other optional services may apply to 
your journey; please consult with your airline for information on those 
fees.'' USTOA further states that in the event that the Department 
concludes that additional specific information should be provided by 
ticket agents, it should allow ticket agents to provide hyperlinks to 
the locations on the airline websites where specific information may be 
obtained. ITSA does not object to extending the requirements to 
disclose baggage and other fees to ticket agents, but notes that if the 
information is not provided to the GDSs, the costs associated with 
agencies constantly updating information are high and the possibility 
exists that the information may not be accurate. ASTA takes a similar 
position to ITSA in regards to applying the disclosure requirements to 
ticket agents.
    DOT Response: The Department has decided that the requirements to 
provide specific notice to consumers about baggage fees and allowances 
and other ancillary fees shall apply to all U.S. and foreign carriers 
that advertise or sell air transportation in the U.S. We are not 
limiting the applicability of the disclosure requirements to flights of 
only U.S. carriers, as the harm to the consumer is the same whether the 
lack of information about baggage and other ancillary fees involve 
flights operated by a U.S. carrier or a foreign carrier. We are also 
not limiting the applicability of these requirements based on the size 
of the aircraft that carriers operate as we believe that disclosure of 
add-on fees is an issue of sufficient significance to warrant 
application of this requirement to aircraft of all sizes. Consumers 
want to be informed of the fees that they will be required to pay for 
optional services regardless of the size of the aircraft on which they 
travel.
    The Department also believes that it is important to ensure that 
consumers are alerted to airline-imposed fees that may be applicable to 
itineraries purchased through ticket agencies. However, we are 
persuaded by USTOA and others to apply a more limited requirement to 
ticket agents, particularly since the Department is deferring decision 
on whether to require U.S. and foreign carriers to give ancillary fee 
information to GDSs. Therefore, unlike the case for U.S. and foreign 
air carriers, this final rule does not require ticket agents to 
disclose on their website information about changes in baggage fees or 
allowances or to list on their website all of the airlines' fees for 
optional services. The final rule does, however, require ticket agents 
(and carriers) to inform passengers on the first screen in which the 
ticket agent or carrier offers a fare quotation for a specific 
itinerary selected by a consumer that additional airline fees for 
baggage may apply and where consumers can go to see these baggage fees. 
This notification on the website must be clear, conspicuous and 
prominent. To comply with this requirement, ticket agents can choose 
between referring consumers to their own site where the baggage fees 
are displayed or to the airline websites where specific information may 
be obtained. This requirement is consistent with prior guidance 
provided by the Department's Aviation Enforcement Office. See, Notice 
of the Assistant General Counsel for Aviation Enforcement and 
Proceedings, Guidance on Disclosure of Policies and Charges Associated 
with Checked Baggage, May 13, 2008, http://airconsumer.dot.gov/rules/guidance.htm. The final rule also requires ticket agents (and carriers) 
to include on e-ticket confirmations information about the free baggage 
allowance and the applicable fee for the first and second checked bag 
and carry-on but allows ticket agents, unlike carriers, to do so 
through a hyperlink. We also want to make clear that when using the 
term ``ticket agents'' we are referring not only to agents of the 
carriers but also others who meet the definition of ``ticket agent'' 
contained at 49 U.S.C. 40102 (a)(40), i.e., one who as a principal 
sells, offers for sale, negotiates for or holds itself out as selling, 
providing or arranging for air transportation.
B. Disclosure of Baggage Fees
    The NPRM: In 2008, the Department's Aviation Enforcement Office 
issued guidance concerning the disclosure of baggage fees to the 
public. In that notice, the office stated that it views a carrier's 
failure to clearly disclose significant conditions applicable to air 
fares, such as baggage fees, to be an unfair and deceptive practice and 
unfair method of competition in violation of 49 U.S.C. 41712. It 
described steps that carriers should take to ensure that they are 
providing prominent and timely notice of their baggage policies and 
charges. For example, the office suggested carriers place a notice on 
the home page of their website highlighting new

[[Page 23146]]

baggage policies and charges. See, Notice of the Assistant General 
Counsel for Aviation Enforcement and Proceedings, Guidance on 
Disclosure of Policies and Charges Associated with Checked Baggage, May 
13, 2008, http://airconsumer.dot.gov/rules/guidance.htm.
    In the instant proceeding, the Department proposed to codify this 
guidance document by requiring carriers that maintain a website that is 
accessible to the general public to prominently disclose on the 
homepage of that website for at least three months any increase in the 
fee for passenger baggage or any change in the free baggage allowance 
for checked or carry-on baggage. The Department proposed that this 
notice could appear in its entirety on the home page or could be 
accomplished through a prominent, conspicuous hyperlink (e.g., 
``Revised Baggage Fees'') that leads to an explanation of the carrier's 
baggage policies and fees. The Department invited comment on this 
proposal, including comment on how long the notice should remain on the 
page and the best options for displaying the information to consumers.
    The NPRM also proposed to require carriers that issue e-ticket 
confirmations to include information on that confirmation regarding the 
free baggage allowance for that flight and the applicable fee for the 
first and second checked bag and carry-on bag. The goal of this 
proposed rule was to provide the specific information regarding a 
particular consumer's baggage allowance well before that consumer 
arrives at the airport with bags packed. The Department invited comment 
on this proposed section.
    Comments: Most individual commenters and commenters from consumer 
groups did not address this proposal specifically, but overwhelmingly 
commented that, in general, they supported more disclosures. Individual 
commenters, through the Docket and through Regulation Room, noted how 
they are sometimes surprised by additional baggage fees when they 
check-in at the airport. CTA states that two out of three travelers 
responding to their survey were surprised by fees upon checking in for 
a flight at the airport. Many commenters wanted the Department to limit 
the carrier's ability to unbundle certain fees from the base fare, 
particularly baggage fees for the first checked bag. These commenters 
feel that carriers are ``nickel and diming'' passengers instead of 
trying to improve service. Other commenters found value in the a la 
carte pricing models of carriers because the models allow travelers to 
customize their trips. The individual commenters who were not opposed 
to unbundling fees generally support more disclosure of fees to the 
consumer before purchase.
    ATA and most U.S. carriers support more disclosure regarding 
changes in baggage fees. ATA supports the proposal to put notice of fee 
changes on a carrier's homepage and states that the best method for 
providing this notice is to put a hyperlink on the homepage. ATA notes 
that three months is a long enough time to require the information on 
the change to be on the website. Most U.S. carriers submitted comments 
similar to ATA's on the proposal to disclose baggage fee changes. 
Virgin America states, however, that the Department should refrain from 
establishing too much specificity or detail because such a regulation 
would detract from competitive market forces on how airlines design and 
set up their own websites. Furthermore, Virgin America notes that many 
carriers are developing mobile applications where screen space is 
limited. Allegiant Airlines opposes what it sees as attempts by the 
Department to micromanage how websites appear and how information is 
shared with consumers in the absence of a clear attempt by carriers to 
deceive consumers.
    Foreign carriers and carrier associations generally were not in 
favor of what they view as increased U.S. government regulation of the 
appearance of websites that are not maintained in the United States. 
IATA warns that this proposal could be an extraterritorial application 
of U.S. law. IATA further states that most carriers already have 
baggage fee information readily available on their website, and most 
carriers do not charge for one or two checked pieces of baggage to or 
from the United States, so adding extra notice and advertising 
requirements to a carrier's website would increase costs greatly. The 
National Airlines Council of Canada agrees with disclosure of fees on 
websites, but disagrees with the requirement to place a link to the 
disclosure on the homepage. Jetstar Airways opposes posting notice 
about the change directly on the homepage of the carrier, asserting 
that space issues could limit airlines' ability to clearly disclose the 
changes and advertise products and services. Qantas raises similar 
concerns, noting that the Department should not dictate the content of 
a carrier's website or homepage. Lufthansa believes that the Department 
did not establish why these disclosure rules are necessary, but does 
note that it already provides most of this information. Condor 
Flugdienst notes its objection to requiring changes to baggage 
allowances to be posted on the homepage, stating that failure to 
provide notice of a change is a violation of 49 U.S.C. Sec.  41712 
under Department guidance and that there is no need, therefore, for the 
Department to codify this requirement. Air France and KLM contend that 
having the information regarding baggage fee changes stand alone on the 
homepage would be costly. Those carriers suggest that this 
information's location on the website should be left to the airline's 
discretion and that a time period of one to two months would be enough 
time for consumers to be aware of the change.
    With regard to disclosure of baggage information on e-ticket 
confirmations, as with the proposal to disclose such information on 
carriers' websites, most individual consumers and consumer groups 
support any provision that provides the consumer with more information 
and prevents consumers from being surprised about hidden fees. Some 
individuals specifically contend that baggage allowance disclosures 
should also include information regarding excess weight and excess 
baggage charges. Many consumers feel that the disclosure of baggage 
fees should occur earlier in the process, not after purchasing the 
ticket. One commenter noted that e-ticket confirmations are not 
required, and that some carriers still use paper tickets. This 
commenter noted that any requirement for disclosure of baggage fees on 
an e-ticket confirmation would not help consumers who are provided 
paper tickets because those consumers would not have that information. 
This commenter believes that the Department should clearly define what 
a ticket is, and then require baggage fee disclosures to be in the same 
method as the purchaser receives the ticket.
    ATA and most U.S. airlines do not have an objection to this 
requirement, as many carriers currently provide this information in the 
e-ticket confirmation. US Airways and Delta Air Lines support baggage 
disclosures on e-tickets. Spirit Airlines supports baggage fee 
disclosures on e-tickets through a hyperlink to baggage information. 
IATA is not opposed to a provision requiring airlines to include 
information regarding optional services in e-tickets after a purchase 
is complete. AEA also states that it is not opposed to providing this 
information on an e-ticket. AEA points out that EU Regulation 1008/2008 
mandates that optional price supplements be communicated in a ``clear, 
transparent and unambiguous

[[Page 23147]]

way.'' Some foreign carriers assert that requiring the information on 
the e-ticket confirmation is regulatory overkill, as a consumer cannot 
complete a purchase without becoming aware of the fees due to other 
government regulations. Other carriers state that due to the abundance 
of disclosure prior to completion of purchase, a carrier should not be 
required to provide all of the information in full on an e-ticket as 
that would be costly. All Nippon Airways expressed concerns about the 
costs of redesigning their e-ticket confirmations, noting that a recent 
overhaul cost upwards of $145,000. Some carriers, such as Air France 
and KLM, note that they already have a system in place to provide 
information about baggage on the e-boarding pass issued via Internet 
check-in.
    DOT Response: The Department has decided to require U.S. and 
foreign carriers that advertise or sell air transportation in the 
United States to promptly and prominently disclose any increase in its 
fees for carry-on or checked baggage and any change in the checked 
baggage allowance for a passenger on the carrier's homepage. Such 
notice must remain on the homepage for at least three months after the 
change becomes effective. This rule is consistent with current 
enforcement policies regarding the disclosure of changes in baggage 
fees. Additionally, the Department feels that this rule will prevent 
passenger surprise about changes in baggage fees or allowances. We 
agree with consumers and consumer groups, who advocate that greater 
disclosure of fees, and particularly baggage fees, is needed. 
Recognizing the concerns raised by carriers, particularly foreign 
carriers, about space on a carrier's homepage and a carrier's 
legitimate need to be able to design a website that is competitive and 
presents information in a clear way, the Department will allow carriers 
to fulfill the notice requirements by providing a link from the 
homepage directly to a pop-up or a place on another webpage that 
details the change in baggage allowance or fees and the effective dates 
of such changes. The link on the homepage needs to be descriptive, 
clear and conspicuous, i.e., easy for a consumer to locate. The link 
need only remain on the homepage for a period of three months after the 
change becomes effective. Most commenters agreed that three months is a 
long enough time to ensure that consumers are aware of any change in 
baggage fees or allowances.
    The Department disagrees with Air France and KLM, which suggest 
that the carriers be allowed to decide where on their website to 
display the information and that the information should only remain 
active on the website for one or two months. Changes that occur need to 
be posted on the website for a sufficient time in order to allow 
consumers to review the changes not only prior to choosing a flight but 
also after they chose a flight and are preparing to travel. The 
Department believes that allowing carriers to decide where the notice 
should be given may result in some carriers placing the information in 
an inconspicuous location on the website. If such information is 
difficult for consumers to find, they may not be aware of the change 
until after arrival at the airport and the consumer cannot evaluate the 
impact of the change in baggage fees and allowances on his or her 
scheduled transportation, which limits consumer choice.
    The Department has also determined that there is value in providing 
a consumer information regarding baggage fees and allowances after the 
consumer completes a purchase for air travel. Therefore, the final rule 
requires U.S. carriers and foreign carriers and ticket agents that 
advertise or sell air transportation in the United States to provide 
information on e-ticket confirmations regarding the passenger's free 
baggage allowance and/or the applicable fee for a carry-on bag and the 
first and second checked bag. By ``applicable fee,'' we mean the 
baggage fee information provided on the e-ticket confirmation cannot 
simply be a range of fees but must include information about any price 
that may exist for a carry-on bag and the first and second checked bag 
and any differing price that may exist depending on the passenger's 
status (e.g., frequent flyer, military personnel), on when the payment 
for the bag is made, or and on whether a consumer checks his or her bag 
online rather than at the airport. As explained in the section on 
covered entities, because they may not know the most recent carrier 
baggage policies, ticket agents may provide details on where to obtain 
this information by a hyperlink to the locations on the airline 
websites where specific information may be obtained since the airlines 
often update and change fees. The Department notes that this 
requirement will benefit consumers because it will reduce confusion 
over whether, and, if so, how much they will have to pay to check or 
carry-on bags. Additionally, this will save the time of both consumers 
and airline employees at the airport, because consumers will be 
notified in advance of check-in what the applicable fees are for a 
carry-on bag and the first and second checked bags. The Department 
notes that carriers are already providing this information to consumers 
in compliance with existing enforcement policies. We disagree with the 
assertion by some carriers that consumers cannot complete a purchase 
without first becoming aware of the applicable baggage fees. Given the 
advent of new fees, such as fees for carry-on bags, the differing price 
for first and second checked bags, and the price difference that 
sometimes exists if a consumer checks his or her bag online versus 
checking the bag in at the airport, the Department believes that it is 
not a simple matter for consumers to determine the total price to 
transport their baggage. Additionally, the Department disagrees with 
airlines that assert that the disclosure requirements are burdensome, 
as most carriers already provide this information in one form or 
another.
C. Disclosure of all Ancillary Fees
    The NPRM: The Department proposed to require carriers that have a 
website accessible to the general public to disclose all fees for 
optional aviation services in one central place on their website, so 
that consumers have an easily accessible reference guide for the cost 
of these services. This disclosure was proposed to be made through a 
link from the carrier's homepage directly to a listing of those fees. 
The Department invited general comment on this proposal. We also asked 
for comment on whether only ``significant'' fees for optional services 
should have to be listed and, if so, how to define a ``significant 
fee.'' The Department also asked for suggestions for alternatives to 
the easily accessible link from the homepage for this disclosure.
    Comments: Generally, the majority of consumers and consumer groups 
agreed with requiring carriers to disclose ancillary fees on their 
website. They contend that airlines hide their fees, and that requiring 
disclosure will benefit consumers' ability to comparison shop and avoid 
surprise fees. Many consumer commenters urge the Department to require 
that the listing of optional fees on carriers' websites be 
standardized. However, some commenters, commenting through the 
discussion on Regulation Room, expressed concern that a large fee table 
could be confusing to inexperienced or unsavvy casual travelers. Some 
consumers and consumer organizations assert that requiring the 
disclosure of ancillary fees does not go far enough and ask that the 
Department establish a list of ancillary services for which airlines 
are prohibited from charging a fee.

[[Page 23148]]

    ATA generally supports the proposal requiring airlines to disclose 
fees for ancillary services on a carrier's website through a link, but 
feels that disclosure of such fees on e-ticket confirmations would be 
burdensome. ATA contends that some fees vary based on the flight and 
itinerary, such as food and beverage items. ATA, as well as industry 
groups such as ASTA and ITSA, do not see a reason why the disclosure 
should be limited to significant fees. US Airways generally supports 
this proposal, but requests sufficient lead time to fully implement the 
website changes required to list the fee information. US Airways notes 
that if the Department requires disclosure of these fees earlier in the 
process, the programming costs would increase to cover the complexity 
of new programming, and sufficient lead time would be required. Delta 
states that it already has a page that lists these fees, and does not 
object to a requirement that all carriers maintain such pages.
    DOT Response: The Department has decided to require U.S. and 
foreign carriers to have one, central webpage on their website, linked 
from the carrier's homepage, which lists all ancillary fees. The reason 
for this requirement is that Department considers it too difficult 
currently for consumers to effectively comparison shop and determine 
the total cost for travel, including ancillary fees for optional 
services. Not all carriers provide information regarding charges for 
various services, such as seat assignments, extra leg room, priority 
boarding, telephone reservations, and seat upgrades in a centralized 
location so that it is easily accessible for the consumer to review 
prior to purchase. The Department considers it to be unfair and 
deceptive to charge an ancillary fee to a consumer, when that consumer 
had no simple, practical, and reasonable way of knowing about the fee 
prior to purchasing the ticket. Having a single listing of all of the 
ancillary fees that a carrier charges for optional services allows the 
consumer access to greater information without unduly burdening the 
carrier or stifling the carrier's need to compete on such services.
    The Department agrees with commenters that state that all fees 
should be listed. We believe that there is no practical way to identify 
what is ``significant,'' as each traveler, and even airline, might 
differ over what is significant. Therefore, the Department believes 
that to ensure adequate protection of consumers, as well as to ensure a 
level playing field among airlines, it is best to require carriers to 
list all fees. This includes, but is not limited to, fees for checked 
baggage, carry-on baggage, overweight bags, meals, on-board 
entertainment, Internet connections, pillows, blankets, advanced or 
upgraded seating assignments, telephone reservations, early boarding, 
canceling or changing reservations, unaccompanied minors, and pet 
transportation. ATPCO has identified more than a hundred optional 
services and assigned each of those services a code. While the ATPCO 
list may not be an exhaustive list of services that are now offered or 
that will in the future be offered, the Department suggests that 
carriers may wish to use the ATPCO list of charges as a reference in 
developing a list of all optional services and fees to put on their 
websites.
    The Department understands the carriers' concern that the 
availability and price of some items vary depending on a number of 
factors such as the type of aircraft being used, the frequent flyer 
elite status of a passenger, the flight on which a passenger is booked, 
or the time at which a passenger pays for the optional service. For 
non-baggage related optional services, carriers can provide a range of 
fees, acknowledging that they vary based on those types of factors. For 
example, if food and beverage service prices vary among flights, an 
airline can state that meals or snacks are available for purchase, and 
then give a range of prices for such meals and snacks.
    This use of a range of fees would not, however, be acceptable under 
the rule with regard to fees in connection with checked or carry-on 
baggage, which are so fundamental to air travel and have until 
relatively recently been included in the price paid for travel on all 
carriers. With regard to those fees, we are specifically requiring that 
carriers, at a minimum, provide information about (1) any differing 
price that may exist for the first, second, third, or more checked and 
carry-on bag or overweight/oversized bag and (2) any differing price 
and allocation (e.g., whether or not a bag checked for free counts 
toward overall allowance) that may exist for each bag depending on the 
passenger's status (e.g., frequent flyer, military personnel), on when 
the payment for the bag is made, or whether a consumer checks his or 
her bag online versus checking the bag at the airport. If an airline 
offers discounted baggage fees through status as a member in a paid or 
unpaid membership ``club,'' information regarding these programs should 
be offered as well. The Department believes that listing the fees in 
one place will allow consumers greater access to information, prevent 
the problem of hidden fees, and prevent confusion at the airport or in-
flight due to an unexpected charge. It should also enhance competition, 
as consumers will be better able to compare costs among carriers for 
the trip that they plan to take with the services that they would like 
to have. With regard to commenters who wanted the Department to mandate 
certain ancillary items that must be free, the law does not provide us 
the authority to do so.
D. Global Distribution Systems
    The NPRM: The Department stated in the NPRM that it was considering 
requiring carriers to make information about charges for optional 
services available to global distribution systems (GDSs). The 
Department considered this proposal due to the fact that a significant 
portion of consumers purchase their air travel and air tours though 
travel agencies, both online and traditional brick-and-mortar agencies. 
The Department invited comments on the ability of carriers to provide 
this information in a usable format and the potential costs and 
benefits associated with providing this information to GDSs.
    Comments: ATA and most of its members strongly oppose a requirement 
that forces airlines to provide ancillary fee information to GDSs. 
First, ATA notes that this is a competitive issue and would interfere 
with ongoing negotiations among carriers, GDSs, and travel agents, and 
would inject government regulation into private market decision making. 
ATA notes that GDSs already have a great share of the market for air 
transportation bookings, and warns that fares could increase to cover 
the charges the GDSs would likely levy on carriers that are required to 
provide this information to them. ATA also questions the existence of 
any unfair or deceptive practice this requirement would prevent.
    Most U.S. carriers agree with ATA's position. US Airways does not 
believe the Department should mandate disclosure in a particular 
format, seeing this as interference with market forces. Delta Air Lines 
believes that this rule would affect its bargaining position with the 
GDSs and their ability to explore different options for sharing of this 
information with the GDSs. American Airlines contends that a carrier 
should have the ability and power to decide how to market its ancillary 
services. American states that requiring disclosure would unfairly 
bolster the GDS market power. In a joint filing, American Airlines, 
Continental Airlines, Delta Air Lines, United Air Lines, and US Airways 
reiterate the carriers' commitment to providing fee information to 
consumers, but assert

[[Page 23149]]

that interfering in market negotiations would harm competition and 
ultimately would harm consumers. These airlines note that providing fee 
information about optional services to consumers is good for the 
airlines because airlines are in the business of selling tickets and 
selling these ancillary services. They assert that carriers should be 
allowed to market their services how they see fit and to decide how to 
provide their customers with the greatest access to information and 
choice. The carriers reiterate ATA's point that requiring airlines to 
furnish this information to GDSs would harm consumers by increasing 
airline distribution costs, arguing that GDSs would charge the airlines 
fees to upload the information into the GDS system. The carriers note 
that many travel agents, including online travel agents, already have 
access to and disclose fee information, referring to the Expedia 
website which has a chart of baggage fees. The carriers contend that 
the GDS distribution system is anti-competitive and not efficient, and 
that requiring the airlines to provide fee information will further 
bolster the market power of the GDSs without allowing for substantive 
competition from third-party vendors.
    Two U.S. carriers did not object to providing ancillary fee 
information to GDSs. Spirit Airlines does not oppose the proposal, 
unless it would impose significant costs on carriers to change the 
format the carriers already use to provide the information to the GDSs. 
Southwest Airlines supports limited transmittal of fee information to 
GDSs in order to provide information to all consumers, regardless of 
how they book their flights. Southwest states, however, that the 
requirement should only obligate carriers to furnish this information 
to existing GDS partners. Southwest opposes allowing GDSs to charge 
fees for collecting data on ancillary services. Southwest notes that 
carrier participation in GDSs and other distribution channels for 
selling air transportation is a strategic business decision by each 
carrier. The carrier also supports a provision that would require all 
carrier-imposed surcharges, such as seasonal fare adjustments, to be 
included in the fare information provided to GDSs.
    IATA and most of the other foreign air carrier organizations oppose 
requiring carriers to provide ancillary fee information to GDSs as 
well, although they support carriers providing information about 
ancillary fees and services on carrier websites. The National Airlines 
Council of Canada agrees with the disclosure of fees in general, but 
recommends that the Department not mandate the method of disclosure. It 
notes that this information is most effective when presented to the 
customer within the flow of the transaction, as Air Canada does on its 
website. Some carriers, such as Jetstar Airways and Qantas, oppose 
providing the fees for optional services to consumers via a static 
webpage, stating that it is more helpful for consumers and airlines to 
focus ancillary fee information to a particular booking. Other 
carriers, such as Virgin Atlantic, note that they already file this 
information with ATPCO, thus allowing for access by GDSs.
    The vast majority of consumers and consumer groups (e.g., BTC, CTA, 
Flyersrights.org) support the Department requiring airlines to disclose 
their ancillary fee information to the GDSs. BTC and CTA urge the 
Department to establish uniform standards for fee disclosures, on the 
basis that airlines may add new fees in the future. Both of those 
organizations state that airlines artificially deflate the cost of a 
fare so that they can tack on high ancillary fee charges that are 
hidden from the consumer during an initial fare search.
    ITSA and ASTA implore the Department to require airlines to share 
ancillary fees with the GDSs. ITSA notes that a passenger who wants to 
search for a fare that includes a checked bag and a pre-assigned seat 
will have to spend a great deal of time and have to be especially 
computer savvy to find the total amount he or she would have to pay for 
their travel because the fees are hidden on carriers' websites. ITSA, 
representing GDSs, states that at least 50% and possibly as high as 60% 
of the traveling public relies on travel agents to comparison shop for 
fares. ITSA argues that without this information from GDSs, brick and 
mortar travel agencies and online travel agencies cannot adequately 
state the total cost of travel to their clients. ITSA notes that the 
Department already requires information beyond the base fare to be 
provided to the GDSs such as code-share information and change of gauge 
information. ITSA asserts that the costs of this requirement would be 
low as it believes the technology is already in place to distribute the 
fee information. ITSA further adds that the Department's mandate to 
prevent unfair and deceptive practices trumps claims that disclosure 
should be left to private market negotiations. ITSA believes that 
merely requiring carriers to post the fee information on a webpage is 
not adequate to alleviate the problems of hidden fares or reduce the 
time it takes to comparison shop. Uniglobe Travel, Travizon, Inc., and 
individual travel agents that commented in the docket support the 
proposal to require that carriers provide ancillary fee information to 
GDSs.
    Many third party commenters submitted comments related to providing 
ancillary fee information to GDSs. Several members of Congress wrote in 
support of a requirement obligating carriers to submit their ancillary 
fee information to GDSs. A member of the European Parliament also 
expressed his support for issuing a rule so that passengers booking 
through a GDS system are aware of the total price of the ticket before 
purchase. The New York State Consumer Protection Board states a similar 
position that information about fees should be distributed to consumers 
through a wide variety of channels, not just through a link on the 
carrier's website.
    Farelogix, a third party distribution and management technology 
firm, opposes the proposal to require that the carriers provide 
information to GDSs. Farelogix believes that GDSs should coordinate 
directly with the airline. The firm does not think that the GDSs should 
be able to mandate the format of the information. Farelogix notes that 
the GDSs are resistant to third party technology to transfer 
information in order to preserve their place in the travel market, and 
states that this proposed requirement will further limit third parties 
from entering the travel technology marketplace. An airline consultant 
makes several similar points. This consultant points out that if the 
Department requires carriers to provide information about fees for 
optional services to GDSs, the airlines' bargaining leverage is eroded 
and the higher distribution costs the airlines will face will be passed 
on to consumers. The consultant notes that negotiations to sell 
ancillary services are working in some respects, using examples of 
United Airlines selling Economy Plus service through Sabre, Midwest 
Airlines selling seat assignments through Sabre, and Finnair selling 
ancillary services through Amadeus. This individual believes that these 
fees are not hidden, and notes that most of these fees are not charged 
until check-in or onboard the flight. A professor at Harvard Business 
School comments that compelling airlines to provide fee information to 
GDSs will have far-reaching and unintended consequences on existing 
contractual structures between airlines and GDSs. He believes that if a 
requirement to provide fees for optional services is adopted, the GDSs 
will mark up prices considerably because airlines will be

[[Page 23150]]

forced to disclose pursuant to government rule. The Airline Tariff 
Publishing Company (ATPCO), without taking a position on the merits of 
the proposal, notes that it has systems in place that could help 
implement any requirement regarding carriers sharing fee information 
with GDSs.
    DOT Response: We have decided to defer final action on this 
proposal. The Department's goal to protect consumers from hidden and 
deceptive fees and to allow consumers to price shop for air 
transportation in an effective manner remains paramount. The 
Department's goal is to provide all air travel consumers with easy 
access to information about fares and optional fees, particularly 
baggage fees. As discussed earlier, this final rule requires U.S. and 
foreign carriers to disclose on their website information about changes 
in baggage fees or allowances and to list on their website all of the 
airlines' fees for optional services. The final rule also requires both 
carriers and ticket agents to provide information on the first screen 
in which the ticket agent or carrier offers a fare quotation for a 
specific itinerary selected by a consumer that additional airline fees 
for baggage may apply and where consumers can go to access these 
baggage fees. In addition, ticket agents and carriers must include on 
e-ticket confirmations information about the free baggage allowance and 
the applicable fee for the first and second checked bag and carry-on. 
We believe that these steps partially address the problem of hidden and 
deceptive fees and allow consumers to price shop for air 
transportation. The Department is cognizant that some parties feel that 
requiring carriers to provide information on their ancillary fees to 
GDSs would be a reasonable way, if not the best way, to ensure 
consumers can easily comparison shop for air fares. We cannot at this 
time agree that it is in the public interest to mandate that step, 
since we lack information critical to a decision on the issue. Thus, in 
order to permit us time to obtain additional information about costs, 
benefits and consequences of requiring U.S. and foreign carriers to 
provide ancillary fee information to GDSs, including those involving 
competition, the Department is deferring final action on this matter. 
The Department wants to ensure that any action it takes does not have 
unintended consequences, particularly given the sensitive nature of the 
market and the negotiations currently taking place between carriers and 
the GDSs.
E. Display of Two Fares in Advertising
    The NPRM: The Department asked for comment on the costs and 
benefits of displaying two fares in airfare advertising. The first 
price would be the full fare (i.e., fare with all mandatory charges) 
and the second price would be that full fare plus the cost of baggage 
charges that traditionally have been included in the price of the 
ticket, if these prices differ. The Department asked whether the second 
fare should only include the price of baggage charges or whether it 
should also include other services traditionally included in air travel 
such as obtaining a seat assignment in advance. The Department also 
solicited comment on the cost and feasibility of requiring sellers of 
air transportation to allow consumers to conduct fare queries for their 
specific needs (e.g., airfare and two checked bags, or airfare, one 
checked bag and extra legroom) and select the services they wish to 
include in the price of the travel.
    Comments: Individual consumers and consumer groups are divided on 
the helpfulness of any requirement for a carrier to display two fares 
in response to a fare inquiry. Some commenters and groups assert that 
this type of fare display system could be helpful for comparison 
shopping. Commenters who participated in the discussion on the 
Regulation Room site were divided. Some state that such a dual fare 
display could be helpful, but others claim it would be confusing. 
Individuals commenting to the docket expressed similar opinions. Most 
were in favor of more robust disclosure, especially regarding baggage 
fees. Many who favored a dual fare disclosure disagreed, however, on 
what should be included in the second fare of a two-fare display 
system. Some state that just the cost of baggage should be included. 
Others contend that baggage, blankets, pillow, and a seat assignment 
should also be included. The idea that consumers could select the 
ancillary services they wished before receiving a fare quote had many 
supporters. CTA supports the approach to airfare searching that would 
allow a consumer to select the services and fees they wish to be 
included in their travel.
    ATA does not support the two-fare model. ATA states it would be 
confusing for passengers. It adds that the Department does not have 
enough information to impose this requirement. ATA and certain U.S. 
carriers note that there are questions and ambiguities as to what is 
``traditionally included in the price of a ticket.'' As many U.S. 
carriers noted, each passenger's needs are different, so the second 
fare would be confusing or of little help to many consumers.
    IATA contends that a two-fare display system could be confusing and 
should not be mandated, as many carriers already have an established 
online advertising regime that includes an online menu of optional 
services presented to the consumer through the course of their 
purchase. IATA asserts that requiring a two-fare model would be an 
unwarranted government intrusion on business practices. The Arab Air 
Carriers Organization states that a two-fare model would be unworkable 
and prohibitively expensive, as most carriers' reservations systems 
would have to be reworked to accommodate a two-fare requirement. Many 
individual foreign carriers echoed the sentiments of IATA, including 
South African Airways and Lufthansa, which note that a carrier can 
always choose to adopt a two-fare system. British Airways states that 
if this proposal were to become a requirement, the requirement should 
only apply to fares that do not include one checked bag, and this 
requirement should apply to GDSs and travel agents as well as carriers. 
ITSA is not opposed to a two-fare system, as long as the Department is 
clear about what would be included in the price. ATPCO notes that it 
has technology that could implement any required two-fare pricing model 
or a consumer self-selection model.
    DOT Response: The Department agrees with the commenters who feel 
that a ``two-fare'' display system would be too confusing for 
travelers. We agree that each traveler is unique with regard to what 
ancillary services he or she needs or wants on a particular flight, and 
therefore one ``all-inclusive'' price that includes baggage and a seat 
assignment may not be helpful to most passengers. The Department will 
also not require, at this time, that sellers of air transportation 
revise their online systems to allow consumers to conduct queries for 
specific optional services and the fees for those services before 
displaying a price. Although the Department understands that some Web 
sites may exist that have these capabilities and that some carriers 
utilize online menus for consumers from which to choose services during 
the booking process, the Department does not have enough information 
regarding the costs of implementing such a system to require that every 
carrier implement such an online system.

[[Page 23151]]

F. Services Provided by Code-Share Partners
    The NPRM: The Department sought comments as to whether in a code-
share situation the marketing/ticketing carrier should be required to 
disclose through reservation agents, Web sites, and/or e-ticket 
confirmations any differences in services and fees applicable to a 
consumer between the marketing carrier and the operating carrier. The 
Department also asked whether there were any ancillary fees for 
services that should not be permitted to vary among code-share 
partners, such as the allowances and charges for baggage. The 
Department noted that its policy states that, for passengers whose 
ultimate ticketed origin or destination is a U.S. point, the baggage 
rules that apply at the beginning of the itinerary apply throughout the 
itinerary and provides that the marketing carrier's rules take 
precedence.
    Comments: Most individual commenters and consumer groups, including 
Flyersrights.org, favor a rule that would require the marketing or 
ticketing carrier's fees to apply for the whole trip. Some commenters, 
through Regulation Room, expressed the opinion that the lesser of the 
two fees should apply if the marketing carrier's fees differ from the 
operating carrier's fees. Most commenters support greater notice 
requirements regarding differing fee structures between code-share 
partners. Some commenters on Regulation Room specifically felt that the 
marketing carrier should provide greater information, especially if the 
operating carrier has more stringent or restrictive luggage 
requirements.
    ATA believes that disclosure of fees between code-share partners 
can be accomplished effectively through a hyperlink on the marketing 
carrier's website directly to the operating carrier's fee list. It 
opposes any attempt by the Department to standardize optional fees 
amongst code-share partners. ATA notes that attempts at standardization 
would be counter to the goals of deregulation and could be anti-
competitive. It further states that standardization of fees could be 
impractical and costly for flights that have multiple code-share 
partners selling tickets on the same flight. US Airways comments that 
applying the marketing carrier's rule is not feasible and would create 
different classes of passengers on the same aircraft. Delta states that 
ancillary fees should not be uniform amongst carriers and code-share 
partners as that requirement would stifle competition.
    IATA states that requiring the marketing carrier to disclose fees 
of operating carriers is consistent with the Department's policy 
regarding code-share situations. IATA believes this notice can be 
accomplished through a hyperlink to the code-share partner's website 
that details their fees. Singapore Airlines notes that it already 
provides information to consumers regarding significant differences in 
services and fees among partners. It states that the best way to 
accomplish this is to provide a link to the partner's listing. The 
carrier also notes that its call center agents are trained to provide 
this information. However, Singapore Airlines states that if the 
Department proposes a harmonized scheme it should incorporate 
reasonable and commercially viable allowances and fees. Qatar Airways 
refers the Department to IATA Resolution 302 (``Baggage Provisions 
Selection Criteria'') which will go into effect in April 2011. The 
carrier states that under this resolution, there will be no standard 
baggage allowances or charges, and each carrier will publish its own 
rules. Qatar Airways notes that in the event of a conflict between 
baggage allowances, the provision of the ``Most Significant Carrier,'' 
as determined by the Resolution, would apply. Qatar Airways urges the 
Department to adopt a similar proposal. Many foreign carriers such as 
Qantas, Air France, and KLM oppose a Department rule that would 
prohibit differences in baggage fees between the marketing and 
operating carrier, but do support disclosure of any differences between 
the carriers.
    DOT Response: After considering the comments regarding the 
differences between the ancillary services and fees between code-share 
and interline carriers, the Department has decided not to require code-
share carriers to standardize their optional services and fees but to 
specify with respect to baggage which carrier's allowances and fees 
apply. We believe that baggage rules and fees should be treated 
differently from fees for other optional services, as variations in 
baggage fees among code-share and interline partners are likely to 
result in significant inconvenience and confusion for many passengers. 
The Department has received complaints from consumers who have been 
faced with multiple, differing, and uncertain baggage allowances and 
charges on both code-share and interline flights. Passengers experience 
significant difficulties when the baggage allowances and fees that 
apply at the beginning of their trip differ from what is applied later 
because their itineraries include sectors where the baggage rules 
differ, notwithstanding the fact that the passenger was traveling on a 
single, code-share or interline ticket, service that carriers continue 
to tout as ``seamless.''
    This final rule requires that for passengers whose ultimate 
ticketed origin or destination is a U.S. point, the baggage allowances 
and fees that apply at the beginning of the itinerary apply throughout 
the itinerary. In the case of code-share flights that form part of an 
itinerary whose ultimate ticketed origin or destination is a point in 
the U.S., the final rule requires that the baggage allowances and fees 
of the marketing carrier apply throughout the itinerary to the extent 
that they differ between the marketing carrier and the operating 
carrier. The Department is aware that these requirements may result in 
the situation foreseen by ATA and US Airways of consumers on the same 
flight being subject to different baggage allowances or fees. The 
Department does not find anything unfair or deceptive about passengers 
on the same flight being subject to different baggage provisions -- 
just as many passengers on the flight would have typically paid 
different fares. Further, we believe this method of determining baggage 
rules is consistent with Department policy and affords the greatest 
protection to consumers from unfair application of baggage rules 
throughout their itineraries. The Department also believes these 
requirements align with the goals of IATA Resolution 302, which was 
adopted by IATA members to bring transparency and clarity to baggage 
rules on code-share and interline itineraries.
    As to whether in the case of code-share flights whether the 
marketing/ticketing carrier should be required to disclose all of the 
operating carrier's fees for optional services, we have decided to 
require the marketing carrier to disclose on its website any difference 
between its optional services and fees and those of the carrier 
operating the flight. This disclosure may be made through providing a 
hyperlink to the operating carriers' websites that detail the operating 
carriers' fees for optional services, or to a page on its website that 
lists the differences in policies amongst code-share partners. A 
marketing/ticketing carrier may also choose to make this information 
available to consumers through notice on its own website of differences 
between its optional services and fees and those of the carrier 
operating the flight. We are not requiring disclosure of the fees for 
optional services of the operating carrier through reservation agents 
or e-ticket

[[Page 23152]]

confirmations because we believe the costs to carriers of providing 
this information in those formats far outweigh the benefit to 
consumers, particularly since this final rule already requires U.S. and 
foreign carriers to list on their website all of their fees for 
optional services. Further, of all the fees for optional services 
charged by airlines, consumers are generally most interested in fees 
charged for baggage and the final rule already requires ticket agents 
and carriers to disclose baggage fees and allowances on e-ticket 
confirmations. As discussed earlier, the final rule also requires 
carriers and ticket agents to inform passengers on the first screen in 
which the ticket agent or carrier offers a fare quotation for a 
specific itinerary selected by a consumer that additional airline fees 
for baggage may apply and where consumers can go to see these baggage 
fees.

9. Post-Purchase Price Increase

    The NPRM: The Department proposed to revise its current regulation 
in 14 CFR 253.7 which allows post purchase price increases as long as 
the consumer receives direct notice on or with the ticket of any 
contract of carriage term that allows a carrier to increase the price 
after purchase. Under the proposed rule, the Department would prohibit 
all post-purchase price increases by carriers, tour operators, or other 
sellers of air transportation, tours or tour components. The seller 
would be prohibited from increasing the price after the consumer 
completes the purchase. The Department asked for comment on the 
proposal to ban post-purchase price increases as well as two 
alternatives. The first proposed alternative would allow post-purchase 
price increases, as long as the seller of air transportation 
conspicuously disclosed to the consumer the potential for such an 
increase and the maximum amount of such increase before the consumer 
purchased the air transportation, and the consumer affirmatively agreed 
to such an increase prior to the completion of the purchase. The second 
alternative would allow post-purchase price increases (with disclosure) 
that the consumer agrees to in advance of purchasing the ticket, but 
would prohibit such an increase within thirty or sixty days of the 
first flight in the purchased itinerary.
    Comments: Individual travelers and consumer organizations 
representing travelers support the proposal to ban post-purchase price 
increases in air transportation or tours by carriers and ticket agents. 
Most consumer commenters state that an outright ban on post-purchase 
price increases is fair. One commenter asserts that the practice of 
increasing the price after purchase is egregious, especially in the 
case of tour operators that raise prices due to fuel surcharges. 
Another commenter asks for clarification on what an increase in the 
price of the ticket means, because the commenter is concerned about 
change fees being applied to an already purchased ticket. Most 
commenters participating in Regulation Room favor an outright ban, 
rejecting the alternatives that allow for conspicuous disclosure of a 
potential price increase. A small number felt that the proposed 
alternative of requiring conspicuous notice of a potential maximum 
amount of an increase would adequately protect consumers.
    We also received comments from carriers and carrier organizations 
regarding this proposal. ATA and its members support the primary 
proposal to ban post-purchase price increases outright, and do not feel 
that any alternative is necessary. ATA states that this is consistent 
with industry practice. IATA and many foreign carriers are not opposed 
to this proposal, but they do request that an exception be made for 
post-purchase imposition of government-imposed taxes and fees. AEA, 
ALTA, and AACO all support a limited exception to a complete ban in the 
case of an increase in government-imposed taxes and fees. IACA states 
that an outright ban on post-purchase increases is not consistent with 
the European Union regulations which allow post-purchase price 
increases in limited circumstances and with certain disclosures. IACA 
seems to support one of the alternatives which would allow some 
increase in the purchase price after purchase is completed.
    Air France, KLM and Qantas generally support the proposal with the 
exception of government-imposed taxes and fees. Additionally Air 
France, KLM and Qantas ask for clarification on when a ``purchase'' is 
complete. Both airlines suggest that a booking that is being ``held'' 
by the airline but has not been purchased should not be a completed 
purchase for purposes of this rule. Air New Zealand further comments 
that change fees should be allowed because those apply when a consumer 
is purchasing a new ticket and not traveling on the same ticket.
    USTOA is against the proposal for an outright ban without some 
contingency built into the rule regarding tax increases and partial 
customer payments. USTOA views a purchase as being complete if the 
consumer has paid in full. USTOA also states that an exception to a ban 
on post-purchase increases should be made for increases in government 
taxes and fees, provided that the consumer is made aware of such a 
potential increase. USTOA points out that the tour operators have no 
control over the increase of the price of scheduled air transportation. 
USTOA supports the alternatives, but believes that sellers should not 
be required to state the maximum amount of a price increase because the 
tour operator will not know the maximum amount.
    ASTA contends that in order to protect all sellers, a post-purchase 
price increase should only be applied on ticketed reservations, 
contracted group travel arrangements, and business to business 
transactions between tour operators and airlines. ASTA states that a 
travel agent does not impose the additional increases in price; rather, 
the government or carriers impose taxes, fees and fuel surcharges. ASTA 
prefers the first alternative which allows a post-purchase price 
increase with specific notice of the increase and a maximum amount of 
such increase identified to the consumer. ASTA suggests modifying the 
first alternative so that the sellers of air transportation also 
identify when they have imposed such post-purchase price increases in 
the past.
    DOT Response: After fully considering the comments received, the 
Department has decided to adopt the rule as proposed, but allow for an 
exception related to an increase in government-imposed taxes and fees. 
Although taxes and fees are not retroactively applied in the United 
States, the Department is aware that government-imposed taxes and fees 
levied by entities outside of the United States might be applied 
retroactively to a completed ticket purchase. As these fees and taxes 
are outside of the control of the seller of air transportation, the 
Department agrees with ASTA and foreign carriers that sellers should be 
protected from having to absorb the costs imposed by retroactive 
application of government taxes and fees. This exception to a total ban 
on post-purchase price increases is limited to government-imposed taxes 
and fees imposed on a per-passenger basis. It does not include 
increases in fuel surcharges or other carrier or ticket agent imposed 
charges. The Department recognizes that changes may be necessary in the 
way a tour operator prices or advertises packages to comply with the 
prohibition on post-purchase prices increases with an exception only 
for government-imposed taxes and fees imposed on a per-passenger basis.
    The final rule also requires sellers of air transportation to 
disclose the potential for a post-purchase price increase related to an 
increase in a

[[Page 23153]]

government-imposed tax or fee in a clear and conspicuous manner to the 
consumer. The consumer must affirmatively agree to the potential for 
such an increase prior to the purchase, for example by checking a box 
on the final page prior to purchase. After purchase, the seller of air 
transportation can only impose an increase due to government-imposed 
taxes or fees if such an increase applies to that particular consumer 
(e.g., the increase cannot be collected from consumers to whom a 
general increase did not apply because they had purchased and fully 
paid for their ticket months earlier, and/or because an increase has 
been announced but is not yet in effect). For purposes of this section, 
a purchase is not deemed to have occurred until the full amount agreed 
upon has been paid by the consumer. Therefore, in the context of a tour 
that contains an air component, a purchase is complete when the 
consumer tenders the entire amount paid for the tour to the tour 
operator. The Department finds it to be unfair for consumers to bear 
the brunt of any increase in price after they have paid the full amount 
agreed upon for air transportation or a tour.
    To further protect consumers, the final rule requires sellers of 
air transportation, tours or tour components to notify a consumer of 
the potential for a price increase that could take place prior to the 
time that the full amount agreed upon has been paid by the consumer, 
including but not limited to an increase in the price of the seat, an 
increase in the price for the carriage of passenger baggage, an 
increase in an applicable fuel surcharge, or an increase in a 
government-imposed tax or fee. These entities must provide the consumer 
an opportunity to decline the purchase without penalty or affirmatively 
agree to the potential for such an increase prior to making any payment 
for the scheduled air transportation, or tour or tour component that 
includes scheduled air transportation. The Department believes that 
such a disclosure will provide consumers with important information to 
help them determine whether they want to purchase the air 
transportation or tour and if so, the appropriate time to make payment.
    With regard to the comments relating to change fees, the Department 
agrees with commenters that change fees do not constitute an increase 
in the price of an already-purchased ticket, as technically the 
consumer is purchasing a new ticket for new travel. However, the 
Department considers it to be an unfair and deceptive practice within 
the meaning of 49 U.S.C. 41712 for a seller of air transportation to 
impose any fee on a consumer to change a travel itinerary unless this 
possibility was disclosed to the consumer prior to purchase. 
Additionally, to address the comments about the applicability of this 
section to tickets marketed and sold in Europe, the final rule 
specifies that with respect to ticket agents and foreign air carriers, 
these requirements only apply to advertising or selling in the United 
States of air transportation or tours.

10. Flight Status Change

    The NPRM: In the NPRM we proposed to require U.S. carriers that 
account for at least 1 percent of domestic scheduled passenger revenues 
(reporting carriers) to promptly provide passengers and other 
interested parties notice of flight status changes, defined as a 
cancellation of a flight or a delay of 30 minutes or more, for their 
domestic scheduled passenger flights. We proposed to require that this 
notification take place within 30 minutes after the carrier becomes 
aware or should have become aware of the status change. A carrier would 
be required to provide such information updates at boarding gate areas, 
on airport display boards that are under a carrier's control, on the 
homepage of a carrier's websites and through a carrier's telephone 
reservation systems. To the extent that carriers permit passengers and 
other interested persons to subscribe to receive flight information 
updates, we proposed that carriers provide those updates in a timely 
fashion, i.e., providing the information and subsequent updates within 
30 minutes after the carrier becomes aware or should have become aware 
of such information.
    We sought comments on whether these flight status notification 
requirements should be extended to smaller U.S. carriers and/or 
international operations of U.S. and foreign carriers, particularly 
since we proposed to require U.S. and foreign air carriers conducting 
scheduled passenger service with at least one aircraft with 30 or more 
seats to adopt a customer service plan that pledged to notify consumers 
in the boarding gate area, on board aircraft, via a carrier's telephone 
reservation system and on a carrier's website of known delays, 
cancellations and diversions. We specifically asked for information 
about the cost or benefit of applying these requirements to smaller 
carriers. We also asked for comments on whether the proposed means of 
notification, i.e., website, telephone reservation system, airport 
display boards under carriers' control, and boarding area, should be 
mandatory, or whether we should leave it to the carriers to determine 
what means they prefer to use. With respect to the timeliness standard, 
we invited the public to comment on whether ``within 30 minutes after 
the carrier becomes aware or should have become aware'' is a reasonable 
standard. We also sought public opinion on whether the proposed 
requirement that updated information should be provided for flight 
delays of 30 minutes or more is an appropriate standard.
    Comments: Comments from consumers and consumer rights advocacy 
groups overwhelmingly support our proposal for the largest U.S. 
carriers to promptly notify passengers of changes in the status of 
particular flights as a result of delays or cancellations. The New York 
State Consumer Protection Board, AAPR, FlyersRights.org, Consumers 
Union, and most commenters on RegulationRoom.org support expanding the 
requirements to cover smaller U.S. carriers and international 
operations of U.S. and foreign carriers. ACI-NA suggests that the rule 
should include small carriers that serve small and non-hub airports, 
arguing that the impact of delays and cancellation occurring at those 
airports may have great adverse effect on larger connection hubs.
    Several foreign carriers specifically oppose applying the 
notification requirements to foreign carriers. IACA states that the 
proposed rule may potentially be an extraterritorial application of 
U.S. law to activities in a foreign jurisdiction. Qantas and JetStar 
Airways aver that the rule should not apply to foreign marketing code-
share partners, as the operating carriers are in the best position to 
notify passengers of any flight status changes. ATA, on the other hand, 
states that the marketing carrier should have the responsibility to 
update flight information up until the date of flight departure, at 
which point the operating carrier should be responsible for the 
notification. ANA raises the issue of technical difficulties faced by 
foreign carriers in complying with the electronic notification rule 
when they must conduct extensive automation modifications including 
sharing data with code-share partners. Many carriers contend that when 
information is not timely transmitted to carriers by FAA, carriers 
should not be held liable. TUI Travel asks that foreign leisure travel 
charter operators be exempted from the rule based on its assertion that 
there are already established communication channels between passengers 
and carriers through the tour operators.
    With respect to the means of notification, many commenters from the

[[Page 23154]]

consumer side urge the Department to mandate all four methods (i.e., at 
gate boarding areas, on airport display boards that are under carrier's 
control, and through carriers' website and telephone reservation 
systems). The New York State Consumer Protection Board also recommends 
that we require carriers to offer passengers the opportunity to 
subscribe to flight status service updates via voicemail and electronic 
media. Industry commenters, however, argue that the Department should 
provide carriers flexibility in choosing what means they use. ATA 
specifically requests that the Department not require any new 
technology or program that is not currently implemented by the 
carriers.
    ATA raises concern that our proposal on flight status change 
notification may conflict with the Federal Communication Commission 
(FCC)'s Telephone Consumer Protection Act rule. In a March 2010 NPRM, 
the FCC proposed to require consumers' prior written consent for 
prerecorded calls, eliminating the exemption for parties that have 
already established business relationships (75 FR 13471, March 22, 
2010). If adopted, the FCC rule would prohibit carriers from leaving 
prerecorded telephone messages concerning flight delays and 
cancellations with any passengers from whom carriers do not have prior 
written consent.
    Regarding the proposed timeliness standard, the New York State 
Consumer Protection Board states that the 30-minute standard is good 
but urges the Department to adopt a more stringent standard that 
requires notification to be provided ``no later than 20 minutes'' after 
the carrier is aware or should have become aware of the flight status 
change. Other commenters from the consumer side generally welcome the 
30-minute standard as being reasonable and not too burdensome to the 
carriers. Among the carriers and carrier associations that commented on 
this proposal, there is little objection to the ``30 minutes after the 
carrier becomes aware'' requirement. However, most of those commenters 
are concerned about the ``30 minutes after the carrier should have 
become aware of the flight status change'' standard. IATA asks the 
Department to clarify the meaning of this standard, and ATA argues that 
this is a subjective standard that makes compliance difficult. 
Southwest Airlines supports ATA's position and states that this 
standard is too vague and is likely to be inconsistently applied and 
enforced.
    Regarding the proposal that notification should be provided to 
passengers for any flight delays that are expected to last for 30 
minutes or more, both consumers and carrier commenters are supportive 
of this standard. ATA also recommends that the Department require the 
airports to update display boards under the airports' control every 30 
minutes when a flight's status changes. ASTA supports ATA's position 
and states that it is important that the information provided by the 
carriers and airports be current in order to avoid passenger confusion.
    DOT Response: The final rule requires U.S. and foreign carriers 
conducting scheduled passenger service to and from the U.S. with any 
aircraft with 30 or more seats to make information available to 
passengers and other interested parties about a change in flight 
status. It is important for passengers as well as persons dropping 
passengers off for outbound flights or meeting passengers on incoming 
flights to stay informed on a timely basis of delays, diversions or 
cancellations affecting their flights in order to avoid unnecessary 
waits at, or pointless trips to, an airport. The need for, and 
importance of timely notification regarding flight delays, diversions 
and cancellations exists whether it is a U.S. or foreign carrier 
operating the flight and whether it is a non-reporting or reporting 
carrier operating the flight. On code-shares, the final rule leaves it 
up to the carriers to determine whether the marketing or operating 
carrier will provide the required notification about change in flight 
status. We expect that foreign carriers and non-reporting U.S. carriers 
will work with their code-share reporting-carrier partners, most of 
which already have the necessary systems in place, to comply with the 
notification requirements contained in this final rule. For enforcement 
purposes, the Department's Aviation Enforcement Office will hold both 
the code-share marketing carrier and the operating carrier responsible, 
jointly and severally, for failure to comply with this rule.
    The final rule mandates that the flight status notifications be 
provided through the four methods proposed: at the boarding gate area, 
on carriers' websites, through carriers' telephone reservations 
systems, and by airport display boards that are under the carriers' 
control. If an airport-controlled display system accepts flight status 
updates from carriers, covered carriers must furnish this information 
to that airport within the timeframes provided in this rule. We do not 
believe mandating all four methods is burdensome to carriers as it is 
our opinion that these four methods represent the most common ways used 
by carriers to communicate with passengers and other interested parties 
who seek and obtain information about the status of the schedules for 
their flights.
    These varied flight status notification methods make it more likely 
that passengers and other interested parties will be able to access 
this information when they need it. For example, individuals who do not 
have access to the Internet may call a carriers' reservation telephone 
system to learn about delays, cancellations, or diversions. 
Notification at the airports through the airport display boards and in 
the boarding gate area is also essential when passengers are already at 
the airports. Regarding notification at the boarding gate area, the 
responsibility of a carrier to notify passengers does not begin until 
the gate is staffed for the specific flight in question. With respect 
to notification provided through carriers' telephone reservation 
systems, we clarify that such notification is only required upon the 
request by a consumer.
    In addition to these four methods, we are also requiring carriers 
that offer passengers the opportunity to subscribe to a flight status 
update service to ensure that required information is provided promptly 
and accurately. We note that many carriers already have in place 
subscription services for passengers to receive flight status 
notifications through various widely used media, including computer-
generated telephone/voicemail, text messages and emails. To the extent 
such services are offered to the public, this final rule requires that 
the notifications be delivered to the passenger by whatever means is 
available to the carrier and of the passenger's choice within 30 
minutes after the carrier becomes aware of a change in the status of a 
flight. We do not believe, as asserted by some commenters, that 
applying this standard will dissuade carriers from voluntarily 
providing such subscription services for fear of the potential 
enforcement consequences. We are confident that market forces and 
competition will continue to be the driving force for carriers to 
improve the quality of their customer care.
    In response to ATA's concern that the Department's flight status 
notification requirement may conflict with the FCC's rule, the 
Department wishes to provide the following clarification. The 
Department has submitted comments on the FCC's rulemaking, requesting 
the FCC to maintain its current ``established business relationship'' 
exemption to the extent necessary to permit carriers to notify their 
customers of flight status

[[Page 23155]]

changes through telephone messages without obtaining each customer's 
prior written consent. To the extent FCC adopts a final rule as it 
proposed, the Department does not see a direct conflict between the FCC 
rule and our rule. In this final rule, we do not require carriers to 
call each passenger on the affected flight to notify them about the 
flight status change. Likewise we do not mandate subscription services. 
Therefore, if carriers choose to provide subscription services, they 
could either eliminate the voice message choice from the choices of 
contact available to subscribers, or obtain the subscribers' written 
consent at the time of subscription.
    Most carriers that commented on the proposals objected to the ``30 
minutes after the carrier should have become aware of flight status 
change'' standard for notifying consumers about the flight 
irregularity, arguing that it is vague and subjective. The Department 
agrees with the concerns expressed that this standard may become 
challenging to comply with and enforce. Therefore, we are removing the 
``should have become aware'' standard from the final rule. With respect 
to the ``30 minutes after the carrier becomes aware'' standard, we 
believe further clarification is necessary. For enforcement purpose, we 
consider that the carrier has become aware of the flight status change 
as soon as the carrier's system operation control center (SOCC) or 
equivalent facility, if it goes by another name, learns of it. We 
recognize that carriers cancel, delay and divert flights based on 
information from many sources, both internal as well as from third 
parties, such as FAA and airports. Whatever the source of information 
leading to the decision for a flight status change, it is the carrier's 
sole responsibility to distribute the information, within 30 minutes, 
to the downstream operational staff, such as webmasters, airport 
station managers, reservation system managers, and gate agents. A 
carrier has an affirmative duty at all times to keep track of flight 
status changes and maintain open channels of communication. We consider 
it an unfair and deceptive practice when the carrier's failure to 
obtain and pass on to consumers up-to-date and accurate information is 
caused by the carrier's own procedural shortcomings.
    Much less contested is our proposed standard that carriers notify 
passengers and other interested parties regarding flight delays of 30 
minutes or more. Many consumer and industry commenters agree that this 
is a reasonable standard that strikes a balance between providing the 
most useful and accurate update to the passengers and the costs 
incurred by the carriers associated with providing such information. 
Consequently, the final rule maintains this standard. We emphasize that 
this is a minimum standard and carriers are free to and urged to 
provide notification about briefer delays, as many already have done 
for their subscription services.
    Under the final rule, the ``30 minutes after the carrier becomes 
aware of the flight status change'' standard also applies to any 
information updates provided to passengers who have already received 
previous notification regarding the status change of their flights. We 
disagree with some commenters' contention that updating flight status 
change every 30 minutes if the flight is delayed again is not necessary 
if it is close to the scheduled departure time and passengers are 
already at the airport. This information is important for passengers 
whose flights downline depend on the schedule of aircraft used for the 
flight experiencing the irregularity, as well as for persons who may be 
meeting passengers on the affected flight. Finally, we note that the 
Department does not directly have the authority to require airports to 
provide flight status information to consumers as some commenters 
suggested.

11. Choice-of-Forum Provisions

    The NPRM: The Department proposed to codify the policy of the 
Department's Aviation Enforcement Office that choice-of-forum 
provisions are unfair and deceptive for air transportation sold in the 
U.S. when used to limit a passenger's legal forum to a particular 
inconvenient venue. The proposed rule would specifically permit 
consumers to file suit where they live provided that the carrier does 
business within that jurisdiction. The Department requested comments on 
this proposal and on the use of such choice-of-forum provisions in 
contracts of carriage.
    Comments: Consumer groups and individual consumers support this 
proposal. Flyersrights.org, while supporting the proposal, does not 
think the proposal goes far enough to address the real barrier to legal 
relief for consumers in court, which they say is Federal preemption of 
state laws. ATA and most carriers support this proposal, most noting 
that they do not have such restrictive choice-of-forum provisions in 
their contracts of carriage. Spirit Airlines opposes this provision. 
Spirit believes small carriers should not have to face the costs and 
burdens associated with litigating complaints in jurisdictions far from 
their headquarters location. IATA and IACA, in addition to many foreign 
airlines, expressed concerns about this provision's applicability to 
foreign airlines and interference with European rules governing the 
forum for claims. The Air Transport Association of Canada does not feel 
the use of choice-of-forum restrictions should be banned and feels that 
making clear the forum in which consumers must litigate consumer 
complaints is helpful to consumers.
    DOT Response: The Department has decided to adopt the rule as 
proposed, i.e., to prohibit a U.S. carrier from including language in 
its contract of carriage precluding a passenger from bringing a 
consumer-related claim involving a domestic flight against the carrier 
in any court of competent jurisdiction. The Department feels that if a 
carrier reaches out to do business in a particular jurisdiction, i.e., 
reaches out to solicit business within that jurisdiction, and sells 
tickets in a jurisdiction, then it is fair and reasonable to expect 
that the carrier can defend itself against litigation brought by a 
consumer who resides in that jurisdiction. The cost of this proposal is 
minimal, as most U.S. carriers already face litigation throughout the 
United States. As a point of clarification, the forum for consumer 
claims related to travel on international flights to or from the United 
States is governed by the Montreal Convention or Warsaw Convention, 
depending on the type of flight and its origination/destination. 
Additionally this change does not apply to charter flights. The choice 
of forum for charter flights can be addressed in the individual 
contracts between the charter operator and the participant.

12. Peanut Allergies

    The NPRM: In the NPRM, the Department described various measures to 
provide greater access to air travel for individuals with severe peanut 
allergies. The Department solicited comment on several alternatives to 
accommodate air travelers with severe peanut allergies including (1) 
banning the serving of peanuts and all peanut products by both U.S. and 
foreign carriers on flights covered by the Department's disability 
rule; (2) banning the serving of peanuts and all peanut products on all 
such flights where a passenger with a peanut allergy is on board and 
has requested a peanut-free flight in advance; or (3) requiring a 
peanut-free buffer zone in the immediate area of a passenger with a 
medically documented severe allergy to peanuts if the passenger has 
requested a peanut-free flight in advance. The Department asked several 
questions associated with accommodating passengers who have a

[[Page 23156]]

severe peanut allergy on flights. For instance, we asked about the 
likelihood of a person with a severe allergy experiencing a serious 
adverse health reaction due to exposure to airborne peanut particles 
onboard an aircraft. The Department asked about steps a person with a 
severe peanut allergy could take to prepare for a flight. We also asked 
about how we should define a peanut product if we chose to take action 
on the issue.
    Comments: Most of the comments regarding accommodations for persons 
with peanut allergies were from individual consumers who favor a total 
ban on peanuts and peanut products on aircraft, including peanut 
products that other passengers bring on board aircraft. Most of these 
consumers either suffer from a peanut allergy or are related to someone 
with an allergy. A smaller number of individual commenters oppose any 
ban on peanut products while others support prohibiting carriers from 
serving peanuts or peanut products on aircraft. Commenters who oppose a 
ban on peanut and peanut products as well as commenters who favor only 
a service ban on peanut and peanut products contend that a total ban on 
peanuts and peanut products is impractical and unenforceable because 
there is no way to stop passengers from bringing peanut products into 
the cabin. There was also disagreement as to whether peanut-free 
flights or peanut buffer zones are a viable option. Many commenters 
assert that neither peanut-free flights nor peanut buffer zones are a 
feasible option since the peanut protein could be present in the buffer 
zones or on the `peanut free' flight as residue from previous flights. 
These consumers state that it is unreasonable to expect, and unlikely, 
that a carrier would thoroughly clean the aircraft between each flight 
to ensure that all peanut residue is removed from the cabin.
    The peanut trade organizations, led by the American Peanut Council 
(APC), Peanut & Tree Nut Processors Association (PTNPA) and the Western 
Peanut Growers Association (WPGA), oppose any Department action that 
would limit the availability of peanuts on commercial aircraft. All 
three organizations point out the Department is restricted from issuing 
any regulation regarding the service of peanuts on aircraft per Public 
Law 106-69, which is discussed below. APC also states that research 
indicates that a severe anaphylactic reaction to peanuts can only occur 
when there is oral ingestion.
    The Food Allergy & Anaphylaxis Network (FAAN) states that the 
scientific literature does not, at this time, address whether a 
passenger would have a severe adverse reaction by being exposed to 
airborne peanut particles but notes that airborne reactions have been 
anecdotally reported. FAAN, and other allergy support organizations, 
believe that the most practical solution is for carriers not to serve 
packaged peanut snacks on flights. FAAN acknowledges that many 
carriers, both U.S. and foreign, are already taking this approach. FAAN 
is opposed to the creation of ``buffer zones'' as it believes that to 
be effective the seats in a buffer zone would need to be peanut-free 
for all flights on a particular aircraft.
    Twenty-five members of the U.S. House of Representatives submitted 
a joint letter expressing their opposition to any ban on peanuts and 
peanut products and requesting that the Department not proceed with a 
rulemaking or any other anti-peanut measures pending the completion of 
a peer-reviewed study as described in Public Law 106-69. Senator 
Christopher Dodd also commented, stating that a complete ban on peanuts 
and tree nuts would be the most direct solution but that this step is 
drastic in nature and impractical. Senator Dodd suggests that DOT 
encourage a focus on further education and training for airline 
employees regarding passengers with peanut allergies as well as a 
consistent application of policies by individual airlines.
    ATA, the Air Transport Association of Canada, and IACA are against 
a ban on peanuts, stating that carriers cannot ensure that other 
passengers will not bring their own peanut products on board for 
consumption. ATA and IACA also state that carriers have adopted their 
own policies and procedures to handle accommodations for peanut 
allergies. In general, individual carriers have deferred this topic to 
their respective trade organizations. However, some carriers such as 
Southwest and Delta point out that they already have voluntarily 
adopted policies regarding buffer-zones for peanut allergy sufferers. 
Some foreign carriers, such as Lufthansa, Air France and KLM, state 
that a service ban on peanut products is not efficient and would create 
increased burdens and costs for airlines. Additionally Lufthansa points 
out that the creation of a service ban on peanut products could give a 
passenger the false impression that the flight is totally safe and free 
of peanuts.
    DOT Response: On June 25, 2010, DOT published a clarification 
notice stating that the Department will comply with the requirements of 
the Department of Transportation and Related Agencies Appropriations 
Act of 2000, Public Law 106-69--Oct. 9, 1999. This law states:

    Hereafter, none of the funds made available under this Act, or 
any other Act, may be used to implement, carry out, or enforce any 
regulation issued under section 41705 of title 49, United States 
Code, including any regulation contained in Part 382 of title 14, 
Code of Federal Regulations, or any other provision of law 
(including any Act of Congress, regulation, or Executive order or 
any official guidance or correspondence thereto), that requires or 
encourages an air carrier (as that term is defined in section 40102 
of title 49, United States Code) to, on intrastate or interstate air 
transportation (as those terms are defined in section 40102 of title 
49, United States Code)--(1) provide a peanut-free buffer zone or 
any other related peanut-restricted area; or (2) restrict the 
distribution of peanuts, until 90 days after submission to the 
Congress and the Secretary of a peer-reviewed scientific study that 
determines that there are severe reactions by passengers to peanuts 
as a result of contact with very small airborne peanut particles of 
the kind that passengers might encounter in an aircraft.

    At this time, given the provisions of Public Law 106-69, the 
Department will decline to take action due to a lack of the peer-
reviewed study referred to in the law.

13. Effective Date of Rule

    The NPRM: In the NPRM, we proposed that the final rule take effect 
180 days after its publication in the Federal Register. We stated that 
we believe 180 days would allow sufficient time for carriers to comply 
with the various proposed requirements and invited comment on whether 
180 days is the appropriate interval for completing the changes.
    Comments: We received few comments on the effective date of the 
final rule. Among carrier and carrier association commenters, RAA 
states that its members need a minimum of 180 days to implement the new 
rule. On the consumer side, AAPR supports the Department's 180-day 
proposal. FlyersRights.org and its supporters suggest that the 
effective date should be no longer than 120 days after the final rule's 
publication date. CTA believes the rule should become effective 120-150 
days after the publication date so it will become effective before the 
summer travel season starts. One consumer stated that 180 days is 
reasonable for implementing most items but carriers may need additional 
time for some of the proposed changes.
    DOT Response: Based on our experience in implementing the December 
2009 final rule, which became effective on April 29, 2010, we believe 
that 120 days is sufficient for

[[Page 23157]]

U.S. and foreign carriers to implement the various requirements in this 
final rule, with the exception of the requirements pertaining to full-
fare advertising. The new full fare advertising requirements will not 
take effect until 180 days after the publication of this final rule in 
the Federal Register to mitigate the costs of print advertising 
revision by reducing the amount of advertising slated for use that will 
have to be pulled. We are imposing a 120-day effective date for the 
other requirements in the final rule to enable consumers to begin 
benefiting from these requirements as soon as possible.

Regulatory Analyses And Notices

A. Executive Order 12866 (Regulatory Planning and Review), DOT 
Regulatory Policies and Procedures, and Executive Order 13563 
(Improving Regulation and Regulatory Review)

    This action has been determined to be significant under Executive 
Order 12866 and the Department of Transportation's Regulatory Policies 
and Procedures. It has been reviewed by the Office of Management and 
Budget in accordance with Executive Order 12866 (Regulatory Planning 
and Review) and Executive Order 13563 (Improving Regulation and 
Regulatory Review) and is consistent with the requirements in both 
orders. Executive Order 13563 refers to nonquantifiable values, 
including equity and fairness. This rule promotes such values by 
improving transparency, and by preventing unexpected charges to 
passengers. The final Regulatory Evaluation concludes that the 
monetized benefits of the final rule exceed its monetized costs, even 
without considering non-quantifiable benefits. The expected present 
value of monetized passenger benefits from the final rule over a 10 
year period using a 7% discount rate is estimated at $45.0 million and 
the expected present value of monetized costs incurred by carriers and 
other sellers of air transportation to comply with the final rule over 
a 10 year period using a 7% discount rate is $30.7 million. The present 
value of monetized net benefits over a 10 year period at a 7% discount 
rate is $14.3 million.
    Below, we have included a table outlining the costs and benefits of 
the requirements in this final rule. A copy of the final Regulatory 
Evaluation has been placed in the docket.

    Comparison of Requirement-Specific Benefits and Costs, 2012-2021
          [Discounted at 7 percent annually to 2012 $ millions]
------------------------------------------------------------------------
                                                                Total
------------------------------------------------------------------------
Area 1: Expansion of tarmac contingency plan requirements
 and extension of EAPP1 requirements to cover foreign
 carriers:
    Monetized Benefits.....................................         $1.2
    Monetized Costs........................................          3.0
    Monetized Net Benefits.................................         -1.8
Additional unquantifiable benefits and costs that are
 directly or indirectly related to this rulemaking, which
 result in benefits that the Department has determined
 justify the costs:
    Improved Management of Flight Delays
    Decreased Anxiety With Regard to Flying
    Reduced Stress Among Delayed Passengers and Crew
    Improved Overall Carrier Operations
    Improved Customer Good Will Toward Carriers
    Additional Gate Return Costs Incurred by Carriers
    Time Required for Airport/Terminal Authorities, CBP/TSA
     to Coordinate Plans
Area 2: Expanded tarmac delay reporting and application to
 foreign carriers:
    Monetized Benefits*....................................          0.0
    Monetized Costs........................................          0.8
    Monetized Net Benefits.................................         -0.8
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Increased Efficiency of US DOT Oversight and
     Enforcement Office Operations
    Improved Management of Flight Delays
Area 3: Establishment of minimum standards for customer
 service plans (CSPs) and extension of EAPP1 Final Rule
 Areas to cover foreign carriers:
    Monetized Benefits.....................................          7.7
    Monetized Costs........................................          7.4
    Monetized Net Benefits.................................          0.3
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Decreased Confusion and Uncertainty Regarding
     Department CSP Requirements
    Improved Customer Service From Foreign Carrier Self-
     Auditing of Adherence to CSPs
    Improved Customer Good Will Toward Carriers
Area 4: Foreign carrier posting of tarmac delay contingency
 plans, CSPs, and contracts of carriage on websites:
    Monetized Benefits*....................................          0.0
    Monetized Costs........................................          1.0
    Monetized Net Benefits.................................         -1.0
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Decreased Occurrence of and Improved Resolution of
     Customer Complaints
Area 5: Extension of EAPP1 Final Rule Areas for carriers to
 respond to consumer complaints to cover foreign carriers:
    Monetized Benefits.....................................          0.0
    Monetized Costs........................................          1.9
    Monetized Net Benefits.................................         -1.9
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:

[[Page 23158]]

 
    Decreased Anger Toward Carriers During Resolution of
     Complaints
Area 6: Changes in denied boarding compensation (DBC)
 requirements:
    Monetized Benefits*....................................          0.0
    Monetized Costs........................................          1.0
    Monetized Net Benefits.................................         -1.0
Additional unquantifiable benefits and costs that are
 directly or indirectly related to this rulemaking, which
 result in benefits that the Department has determined
 justify the costs:
    Decreased Confusion Regarding DBC Provisions
    Decreased Resentment Among Some Passengers Regarding
     Different Compensation Received
    Programming and Training Costs for Foreign Carriers
Area 7: Full-fare advertising and prohibition on opt-out
 provisions:
    Monetized Benefits.....................................         29.0
    Monetized Costs........................................          6.8
    Monetized Net Benefits.................................         22.2
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Travelers Less Likely to Mistakenly Purchase Unwanted
     Services and Amenities
    Improved Customer Good Will Toward Carriers
Area 8: Expanded disclosure of baggage and other optional
 fees:
    Monetized Benefits*....................................          0.0
    Monetized Costs........................................          7.9
    Monetized Net Benefits.................................         -7.9
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Decreased Time at Check-in
    Improved Customer Good Will Toward Carriers
Area 9: Limitations on post-purchase price increases:
    Monetized Benefits.....................................          7.2
    Monetized Costs........................................          1.1
    Monetized Net Benefits.................................          6.1
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Improved Customer Good Will Toward Carriers
Area 10: Prompt passenger notification of flight status
 changes:
    Monetized Benefits*....................................          0.0
    Monetized Costs*.......................................          0.0
    Monetized Net Benefits.................................          0.0
Additional unquantifiable benefits that are directly or
 indirectly related to this rulemaking, which result in
 benefits that the Department has determined justify the
 costs:
    Greater Comfort and Certainty From Knowing That
     Information Will Be Available in Timely Manner
Area 11: Limitations on venue provisions in contracts of
 carriage:
    Monetized Benefits*....................................          0.0
    Monetized Costs*.......................................          0.0
    Monetized Net Benefits.................................          0.0
Additional unquantifiable benefits and costs that are
 directly or indirectly related to this rulemaking, which
 result in benefits that the Department has determined
 justify the costs:
    Improved Customer Good Will Toward Carriers
    Reduced Costs for Consumers to File/Adjudicate Claims
    Increased Costs for Carriers to Settle/Adjudicate
     Claims
Requirement Areas 1-11 Total:
    Monetized Benefits.....................................         45.0
    Monetized Costs........................................         30.7
    Monetized Net Benefits.................................         14.3
------------------------------------------------------------------------
* Monetized estimates could not be developed from the information
  available on the record.

B. 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. 
Our analysis identified a total of 50 small U.S. air carriers (i.e., 
carriers that provide air transportation exclusively with aircraft that 
seat no more than 60 passengers), 50 small airports (i.e., privately-
owned airports that have annual revenues of no more than $7 million or 
publicly-owned airports owned by jurisdictions with less than 50,000 
inhabitants), as many as 11,625 small travel agencies (i.e., travel 
agencies with no more than $3.5 million in annual revenues) and as many 
as 2,720 small tour operators (i.e., tour operators with no more than 
$7.0 million in annual revenues) potentially affected by the 
requirements of the final rule. While most regulation of the air 
transportation sector is concerned with carriers, certain elements of 
this final rule impose new requirements on small travel agents and tour 
operators. Small U.S. carriers will need to comply with additional 
requirements relating to coordination of tarmac contingency plans, 
reporting tarmac delays, specific customer service plan provisions, 
denied boarding compensation,

[[Page 23159]]

advertising of air fares, and disclosure of baggage and other optional 
fees. Small travel agents and tour operators will have to comply with 
the requirements relating to advertising of air fares, disclosure of 
baggage and other optional fees, and pre-purchase disclosures on price 
increases.
    The Department believes that the economic impact will not be 
significant for a number of reasons. First, most small U.S. air 
carriers operate passenger service exclusively with aircraft that have 
fewer than 30 seats. The requirements relating to tarmac contingency 
plans, reporting tarmac delays, specific customer service plan 
provisions, and denied boarding compensation will not apply to these 
carriers. In addition, the per-carrier and per-ticket agent compliance 
costs estimated in the final regulatory analysis for the remaining 
requirements are very small--less than $17,000 per affected small 
carrier operating aircraft with between 30 and 60 seats, less than 
$4,500 per small carrier operating aircraft with fewer than 30 seats, 
and about $3,500 per small travel agent or tour operator with online 
booking capability to achieve compliance during the first year the 
final rule takes effect and no more than a few hundred dollars to 
maintain compliance in subsequent years. On the basis of this 
examination, the Department certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
A copy of the Final Regulatory Flexibility Analysis has been placed in 
docket.
C. Executive Order 13132 (Federalism)
    This Final Rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132 (``Federalism''). This 
final rule does not include any provision that: (1) Has substantial 
direct effects 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) imposes 
substantial direct compliance costs on State and local governments; or 
(3) preempts State law. States are already preempted from regulating in 
this area by the Airline Deregulation Act, 49 U.S.C. 41713. Therefore, 
the consultation and funding requirements of Executive Order 13132 do 
not apply.
D. 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 this final rule 
does not significantly or uniquely affect the communities of the Indian 
Tribal governments or impose substantial direct compliance costs on 
them, the funding and consultation requirements of Executive Order 
13084 do not apply.
E. Paperwork Reduction Act
    As required by the Paperwork Reduction Act of 1995, DOT has 
submitted the Information Collection Requests (ICRs) abstracted below 
to the Office of Management and Budget (OMB). Before OMB decides 
whether to approve those proposed collections of information that are 
part of this final rule and issue a control number, the public must be 
provided 30 days to comment. Organizations and individuals desiring to 
submit comments on the collection information requirements should 
direct them to the Office of Management and Budget, Attention: Desk 
Officer for the Office of the Secretary of Transportation, Office of 
Information and Regulatory Affairs, Washington, DC 20503, and should 
also send a copy of their comments to: Department of Transportation, 
Office of Aviation Enforcement and Proceedings, Office of the General 
Counsel, 1200 New Jersey Avenue, SE., Washington, DC 20590. OMB is 
required to make a decision concerning the collection of information 
requirements contained in this rule between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication.
    We will respond to any OMB or public comments on the information 
collection requirements contained in this rule. OST may not impose a 
penalty on persons for violating information collection requirements 
which do not display a current OMB control number, if required. OST 
intends to renew current OMB control numbers for the three new 
information collection requirements resulting from this rulemaking 
action. The OMB control number, when renewed, will be announced by 
separate notice in the Federal Register.
    The ICRs were previously published in the Federal Register as part 
of NPRM (75 FR 32318, June 8, 2010) and the Department invited 
interested persons to submit comments on any aspect of each of these 
three information collections, including the following: (1) The 
necessity and utility of the information collection, (2) the accuracy 
of the estimate of the burden, (3) ways to enhance the quality, 
utility, and clarity of the information to be collected, and (4) ways 
to minimize the burden of collection without reducing the quality of 
the collected information.
    The final rule contains three new information collection 
requirements. The first is a requirement that foreign air carriers that 
operate passenger service (scheduled and charter) to or from the U.S. 
using any aircraft with 30 or more seats collect and retain for two 
years the following information about any ground delay that lasts at 
least three hours: the length of the delay, the precise cause of the 
delay, the actions taken to minimize hardships for passengers, whether 
the flight ultimately took off (in the case of a departure delay or 
diversion) or returned to the gate; and an explanation for any tarmac 
delay that exceeded 3 hours. The Department plans to use the 
information to investigate instances of long delays on the ground and 
to identify any trends and patterns that may develop. The assumptions 
upon which the calculations for this requirement are based as well as 
the information collection burden hours have changed. We have increased 
our estimate for the maximum number of tarmac delays that a single 
carrier may experience.
    The second is a requirement that U.S. carriers and foreign carriers 
that operate any aircraft originally designed to have a passenger 
capacity of 30 or more seats report monthly tarmac delay data to the 
Department with respect to their operations at a U.S. airport for any 
tarmac delay of three hours or more, including diverted flights. This 
requirement would apply to reporting carriers under 14 CFR part 234 
only with respect to their public charter service and international 
service, as reporting carriers already submit tarmac delay data to the 
Department for their domestic scheduled passenger service. The 
Department plans to use this information to obtain more precise data to 
compare tarmac delay incidents by carrier, by airport, and by specific 
time frame, for use in making future policy decisions and developing 
rulemakings. We have modified the information collection burden hours 
for this requirement because carriers are not required to file negative 
reports as proposed in the NPRM. Covered carriers will only need to 
submit the report if one or more flights experience delays that exceed 
3 hours.
    The third is a requirement that any foreign air carrier that 
operates scheduled passenger service to and from the U.S. using any 
aircraft with 30 or more seats adopt a customer service plan, audit its 
adherence to the plan annually, and retain the results of each audit 
for two years. The Department

[[Page 23160]]

plans to review the audits to monitor carriers' compliance with their 
plans and take enforcement action when appropriate. Although we have 
made some modest changes to the customer service plan requirements from 
what was proposed in the NPRM, these changes do not impact the 
assumption upon which the calculations for retaining the results of 
each audit are based. The information collection burden hours have 
increased slightly as our estimate of the number of carriers covered by 
this requirement has changed.
    For each of these information collections, the title, a description 
of the respondents, and an estimate of the annual recordkeeping and 
periodic reporting burden are set forth below:
    1. Requirement to retain for two years information about any ground 
delay that lasts at least three hours.
    Respondents: Foreign air carriers that operate passenger service to 
and from the U.S. using any aircraft originally designed to have a 
passenger capacity of 30 or more seats.
    Estimated Annual Burden on Respondents: A maximum of 54 hours per 
respondent.
    Estimated Total Annual Burden: 2,226 hours for all respondents.
    Frequency: One information set to retain per three hour plus tarmac 
delay for each respondent.
    2. Requirement that carrier report certain tarmac delay data for 
tarmac delays exceeding 3 hours to the Department on a monthly basis.
    Respondents: U.S. carriers that operate passenger service using any 
aircraft with 30 or more seats, and foreign air carriers that operate 
passenger service to and from the United States using any aircraft 
originally designed to have a passenger capacity of 30 or more seats.
    Estimated Annual Burden on Respondents: 0.5 to 10 hours per 
domestic respondent and 0.5 to 4.5 hours per foreign respondent.
    Estimated Total Annual Burden: 134 4 hours for all respondents.
    Frequency: One information set to submit per month for each 
respondent that experiences a tarmac delay of more than 3 hours at a 
U.S. airport.
    3. Requirement that carrier retain for two years the results of its 
annual self-audit of its compliance with its Customer Service Plan.
    Respondents: Foreign air carriers that operate scheduled passenger 
service to and from the U.S. using any aircraft originally designed to 
have a passenger capacity of 30 or more seats.
    Estimated Annual Burden on Respondents: 15 minutes per year for 
each respondent.
    Estimated Total Annual Burden: A maximum of 25 hours and 15 minutes 
for all respondents.
    Frequency: One information set to retain per year for each 
respondent.
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.

    Issued this 18th day of April 2011, in Washington, DC.
Ray LaHood,
Secretary of Transportation.

List of Subjects

14 CFR Parts 250 and 259

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 244

    Air carriers, Consumer protection, Tarmac delay data.

14 CFR Part 253

    Air carriers, Consumer protection, Contract of carriage.

14 CFR Part 399

    Administrative practice and procedure, Air carriers, Air rates and 
fares, Air taxis, Consumer protection, Small businesses.

    For the reasons set forth in the preamble, the Department amends 14 
CFR Chapter II as follows:

0
1. Add part 244 to read as follows:

PART 244--REPORTING TARMAC DELAY DATA

Sec.
244.1 Definitions.
244.2 Applicability.
244.3 Reporting of tarmac delay data.

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, 
and 41712.

Sec.  244.1  Definitions.

    Arrival time is the instant when the pilot sets the aircraft 
parking brake after arriving at the airport gate or passenger unloading 
area. If the parking brake is not set, record the time for the opening 
of the passenger door. Also, for purposes of section 244.3 carriers 
using a Docking Guidance System (DGS) may record the official ``gate-
arrival time'' when the aircraft is stopped at the appropriate parking 
mark.
    Cancelled flight means a flight operation that was not operated, 
but was listed in an air carrier or a foreign air carrier's computer 
reservation system within seven calendar days of the scheduled 
departure.
    Certificated air carrier means a U.S. carrier holding a certificate 
issued under 49 U.S.C. 41102 to conduct passenger service or holding an 
exemption to conduct passenger operations under 49 U.S.C. 40109.
    Commuter air carrier means a U.S. carrier that has been found fit 
under 49 U.S.C. 41738 and is authorized to carry passengers on at least 
five round trips per week on at least one route between two or more 
points according to a published flight schedule using small aircraft as 
defined in 14 CFR 298.2.
    Covered carrier means a certificated carrier, a commuter carrier, 
or a foreign air carrier operating to, from, or within the United 
States, conducting scheduled passenger service or public charter 
service with at least one aircraft having a designed passenger seating 
capacity of 30 or more seats.
    Diverted flight means a flight which is operated from the scheduled 
origin point to a point other than the scheduled destination point in 
the carrier's published schedule. For example, a carrier has a 
published schedule for a flight from A to B to C. If the carrier were 
to actually fly an A to C operation, the A to B segment is a diverted 
flight, and the B to C segment is a cancelled flight. The same would 
apply if the flight were to operate from A to an airport other than B 
or C.
    Foreign air carrier means a carrier that is not a citizen of the 
United States as defined in 49 U.S.C. 40102(a) that holds a foreign air 
carrier permit issued under 49 U.S.C. 41302 or an exemption issued 
under 49 U.S.C. 40109 authorizing direct foreign air transportation.
    Gate departure time is the instant when the pilot releases the 
aircraft parking brake after passengers have boarded and aircraft doors 
have closed. In cases where the flight returned to the departure gate 
before wheels-off time and departs a second time, the reportable gate 
departure time for purposes of this Part is the last gate departure 
time before wheels-off time. In cases of a return to the gate after 
wheels-off time, the reportable gate departure time is the last gate 
departure time before the gate return. If passengers were boarded 
without the parking brake being set, the reportable gate departure time 
is the time that the last passenger door was closed. Also, the official 
``gate-departure time'' may be based on aircraft movement for carriers 
using a Docking Guidance System (DGS). For example, one DGS records 
gate departure time when the aircraft moves more than 1 meter from the 
appropriate parking mark within 15 seconds. Fifteen

[[Page 23161]]

seconds is then subtracted from the recorded time to obtain the 
appropriate ``out'' time.
    Gate Return time means the time that an aircraft that has left the 
boarding gate returns to a gate or other position at an airport for the 
purpose of allowing passengers the opportunity to disembark from the 
aircraft.
    Large hub airport means an airport that accounts for at least 1.00 
percent of the total enplanements in the United States.
    Medium hub airport means an airport accounting for at least 0.25 
percent but less than 1.00 percent of the total enplanements in the 
United States.
    Non-hub airport means an airport with 10,000 or more annual 
enplanements but less than 0.05 percent of the total enplanements in 
the United States.
    Small hub airport means an airport accounting for at least 0.05 
percent but less than 0.25 percent of the total enplanements in the 
United States.
    Tarmac delay means the holding of an aircraft on the ground either 
before taking off or after landing with no opportunity for its 
passengers to deplane.

Sec.  244.2  Applicability.

    (a) Except as provided in paragraph (b) of this section, this part 
applies to U.S. certificated air carriers, U.S. commuter air carriers 
and foreign air carriers that operate passenger service to or from a 
U.S. airport with at least one aircraft that has an original 
manufacturer's design capacity of 30 or more seats. Covered carriers 
must report all passenger operations that experience a tarmac time of 3 
hours or more at a U.S. airport.
    (b) For foreign air carriers that operate charter flights from 
foreign airports to U.S. airports, and return to foreign airports, and 
do not pick up any new passengers in the U.S., the charter flights are 
not flights subject to the reporting requirements of this part.
    (c) U.S. carriers that submit Part 234 Airline Service Quality 
Performance Reports must submit 3-hour tarmac delay information for 
public charter flights and international passenger flights to or from 
any U.S. large hub airport, medium hub airport, small hub airport and 
non-hub airport. These carriers are already required to submit such 
information for domestic scheduled flights to or from U.S. large hub 
airports under art 234 of this chapter. These carriers that are covered 
by part 234 need only submit information for flights with tarmac delays 
of more than 3 hours under this part 244 for domestic scheduled 
passenger flights to or from any U.S. medium hub airport, small hub 
airport and non-hub airport to the extent they do not report such 
information under 14 CFR 234.7.

Sec.  244.3  Reporting of tarmac delay data.

    (a) Each covered carrier shall file BTS Form 244 ``Tarmac Delay 
Report'' with the Office of Airline Information of the Department's 
Bureau of Transportation Statistics on a monthly basis, setting forth 
the information for each of its covered flights that experienced a 
tarmac delay of three hours or more, including diverted flights and 
cancelled flights on which the passengers were boarded and then 
deplaned before the cancellation. The reports are due within 15 days 
after the end of the month during which the carrier experienced any 
tarmac delay of three hours or more. The reports shall be made in the 
form and manner set forth in accounting and reporting directives issued 
by the Director, Office of Airline Information, and shall contain the 
following information:
    (1) Carrier code
    (2) Flight number
    (3) Departure airport (three letter code)
    (4) Arrival airport (three letter code)
    (5) Date of flight operation (year/month/day)
    (6) Gate departure time (actual) in local time
    (7) Gate arrival time (actual) in local time
    (8) Wheels-off time (actual) in local time
    (9) Wheels-on time (actual) in local time
    (10) Aircraft tail number
    (11) Total ground time away from gate for all gate return/fly 
return at origin airports including cancelled flights
    (12) Longest time away from gate for gate return or canceled flight
    (13) Three letter code of airport where flight diverted
    (14) Wheels-on time at diverted airport
    (15) Total time away from gate at diverted airport
    (16) Longest time away from gate at diverted airport
    (17) Wheels-off time at diverted airport
    (b) The same information required by paragraph (a)(13) through (17) 
of this section must be provided for each subsequent diverted airport 
landing.

PART 250--OVERSALES

0
2. The authority citation for 14 CFR Part 250 continues to read as 
follows:

    Authority:  49 U.S.C. chapters 401, 411, 413 and 417.

0
3. Section 250.1 is amended by removing the definition of ``sum of the 
values of the remaining flight coupons'' and ``comparable air 
transportation,'' revising the definition for ``confirmed reserved 
space,'' and adding a definition for ``alternate transportation,'' 
``class of service,'' ``fare,'' and ``zero fare ticket'' to read as 
follows:

Sec.  250.1  Definitions.

* * * * *
    Alternate transportation means air transportation with a confirmed 
reservation at no additional charge, operated by a carrier as defined 
below, or other transportation accepted and used by the passenger in 
the case of denied boarding.
* * * * *
    Class of service means seating in the same cabin class such as 
First, Business, or Economy class, or in the same seating zone if the 
carrier has more than one seating product in the same cabin such as 
Economy and Premium Economy class.
    Confirmed reserved space means space on a specific date and on a 
specific flight and class of service of a carrier which has been 
requested by a passenger, including a passenger with a ``zero fare 
ticket,'' and which the carrier or its agent has verified, by 
appropriate notation on the ticket or in any other manner provided 
therefore by the carrier, as being reserved for the accommodation of 
the passenger.
    Fare means the price paid for air transportation including all 
mandatory taxes and fees. It does not include ancillary fees for 
optional services.
* * * * *
    Zero fare ticket means a ticket acquired without a substantial 
monetary payment such as by using frequent flyer miles or vouchers, or 
a consolidator ticket obtained after a monetary payment that does not 
show a fare amount on the ticket. A zero fare ticket does not include 
free or reduced rate air transportation provided to airline employees 
and guests.

0
4. Section 250.2b is amended by adding paragraph (c) to read as 
follows:

Sec.  250.2b  Carriers to request volunteers for denied boarding.

* * * * *
    (c) If a carrier offers free or reduced rate air transportation as 
compensation to volunteers, the carrier must disclose all material 
restrictions, including but not limited to administrative fees, advance 
purchase or capacity restrictions, and blackout dates applicable to the 
offer before the passenger decides whether to give up his or her 
confirmed reserved space on

[[Page 23162]]

that flight in exchange for the free or reduced rate transportation.

0
5. Section 250.5 is revised to read as follows:

Sec.  250.5  Amount of denied boarding compensation for passengers 
denied boarding involuntarily.

    (a) Subject to the exceptions provided in Sec.  250.6, a carrier to 
whom this part applies as described in Sec.  250.2 shall pay 
compensation in interstate air transportation to passengers who are 
denied boarding involuntarily from an oversold flight as follows:
    (1) No compensation is required if the carrier offers alternate 
transportation that, at the time the arrangement is made, is planned to 
arrive at the airport of the passenger's first stopover, or if none, 
the airport of the passenger's final destination not later than one 
hour after the planned arrival time of the passenger's original flight;
    (2) Compensation shall be 200% of the fare to the passenger's 
destination or first stopover, with a maximum of $650, if the carrier 
offers alternate transportation that, at the time the arrangement is 
made, is planned to arrive at the airport of the passenger's first 
stopover, or if none, the airport of the passenger's final destination 
more than one hour but less than two hours after the planned arrival 
time of the passenger's original flight; and
    (3) Compensation shall be 400% of the fare to the passenger's 
destination or first stopover, with a maximum of $1,300, if the carrier 
does not offer alternate transportation that, at the time the 
arrangement is made, is planned to arrive at the airport of the 
passenger's first stopover, or if none, the airport of the passenger's 
final destination less than two hours after the planned arrival time of 
the passenger's original flight.
    (b) Subject to the exceptions provided in Sec.  250.6, a carrier to 
whom this part applies as described in Sec.  250.2 shall pay 
compensation to passengers in foreign air transportation who are denied 
boarding involuntarily at a U.S. airport from an oversold flight as 
follows:
    (1) No compensation is required if the carrier offers alternate 
transportation that, at the time the arrangement is made, is planned to 
arrive at the airport of the passenger's first stopover, or if not, the 
airport of the passenger's final destination not later than one hour 
after the planned arrival time of the passenger's original flight;
    (2) Compensation shall be 200% of the fare to the passenger's 
destination or first stopover, with a maximum of $650, if the carrier 
offers alternate transportation that, at the time the arrangement is 
made, is planned to arrive at the airport of the passenger's first 
stopover, or if not, the airport of the passenger's final destination 
more than one hour but less than four hours after the planned arrival 
time of the passenger's original flight; and
    (3) Compensation shall be 400% of the fare to the passenger's 
destination or first stopover, with a maximum of $1,300, if the carrier 
does not offer alternate transportation that, at the time the 
arrangement is made, is planned to arrive at the airport of the 
passenger's first stopover, or if not, the airport of the passenger's 
final destination less than four hours after the planned arrival time 
of the passenger's original flight.
    (c) Carriers may offer free or reduced rate air transportation in 
lieu of the cash or check due under paragraphs (a) and (b) of this 
section, if--
    (1) The value of the transportation benefit offered, excluding any 
fees or other mandatory charges applicable for using the free or 
reduced rate air transportation, is equal to or greater than the cash/
check payment otherwise required;
    (2) The carrier fully informs the passenger of the amount of cash/
check compensation that would otherwise be due and that the passenger 
may decline the transportation benefit and receive the cash/check 
payment; and
    (3) The carrier fully discloses all material restrictions, 
including but not limited to, administrative fees, advance purchase or 
capacity restrictions, and blackout dates applicable to the offer, on 
the use of such free or reduced rate transportation before the 
passenger decides to give up the cash/check payment in exchange for 
such transportation.
    (d) The requirements of this section apply to passengers with 
``zero fare tickets.'' The fare paid by these passengers for purposes 
of calculating denied boarding compensation shall be the lowest cash, 
check, or credit card payment charged for a ticket in the same class of 
service on that flight.
    (e) The Department of Transportation will review the maximum denied 
boarding compensation amounts prescribed in this part every two years 
except for the first review, which will take place in 2012 in order to 
put the reviews specified in this section on the same cycle as the 
reviews of domestic baggage liability limits specified in 14 CFR 254.6. 
The Department will use any increase in the Consumer Price Index for 
All Urban Consumers (CPI-U) as of July of each review year to calculate 
the increased maximum compensation amounts. The Department will use the 
following formula:
    (1) Current Denied Boarding Compensation limit in section 
250.5(a)(2) multiplied by (a/b) rounded to the nearest $25 where:

a = July CPI-U of year of current adjustment
b = the CPI-U figure in August, 2011 when the inflation adjustment 
provision was added to Part 250.

    (2) The Denied Boarding Compensation limit in Sec.  250.5(a)(3) 
shall be twice the revised limit for Sec.  250.5(a)(2).
    (f) In addition to the denied boarding compensation specified in 
this part, a carrier shall refund all unused ancillary fees for 
optional services paid by a passenger who is voluntarily or 
involuntarily denied boarding. The carrier is not required to refund 
the ancillary fees for services that are provided with respect to the 
passenger's alternate transportation.

0
6 . In Sec.  250.9, the section heading and paragraph (b) are revised 
and paragraph (c) is added to read as follows:

Sec.  250.9  Written explanation of denied boarding compensation and 
boarding priorities, and verbal notification of denied boarding 
compensation.

* * * * *
    (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 compensation 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

[[Page 23163]]

    (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

Domestic Transportation

    Passengers traveling between points within the United States 
(including the territories and possessions) who are denied boarding 
involuntarily from an oversold flight are entitled to: (1) No 
compensation if the carrier offers alternate transportation that is 
planned to arrive at the passenger's destination or first stopover 
not later than one hour after the planned arrival time of the 
passenger's original flight; (2) 200% of the fare to the passenger's 
destination or first stopover, with a maximum of $650, if the 
carrier offers alternate transportation that is planned to arrive at 
the passenger's destination or first stopover more than one hour but 
less than two hours after the planned arrival time of the 
passenger's original flight; and (3) 400% of the fare to the 
passenger's destination or first stopover, with a maximum of $1,300, 
if the carrier does not offer alternate transportation that is 
planned to arrive at the airport of the passenger's destination or 
first stopover less than two hours after the planned arrival time of 
the passenger's original flight.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
0 to 1 hour arrival delay.................  No compensation.
1 to 2 hour arrival delay.................  200% of one-way fare (but no
                                             more than $650).
Over 2 hours arrival delay................  400% of one-way fare (but no
                                             more than $1,300).
------------------------------------------------------------------------

International Transportation

    Passengers traveling from the United States to a foreign point 
who are denied boarding involuntarily from an oversold flight 
originating at a U.S. airport are entitled to: (1) No compensation 
if the carrier offers alternate transportation that is planned to 
arrive at the passenger's destination or first stopover not later 
than one hour after the planned arrival time of the passenger's 
original flight; (2) 200% of the fare to the passenger's destination 
or first stopover, with a maximum of $650, if the carrier offers 
alternate transportation that is planned to arrive at the 
passenger's destination or first stopover more than one hour but 
less than four hours after the planned arrival time of the 
passenger's original flight; and (3) 400% of the fare to the 
passenger's destination or first stopover, with a maximum of $1,300, 
if the carrier does not offer alternate transportation that is 
planned to arrive at the airport of the passenger's destination or 
first stopover less than four hours after the planned arrival time 
of the passenger's original flight.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
0 to 1 hour arrival delay.................  No compensation.
1 to 4 hour arrival delay.................  200% of one-way fare (but no
                                             more than $650).
Over 4 hours arrival delay................  400% of one-way fare (but no
                                             more than $1,300).
------------------------------------------------------------------------

Alternate Transportation

    ``Alternate transportation'' is air transportation with a 
confirmed reservation at no additional charge (by any scheduled 
airline licensed by DOT), or other transportation accepted and used 
by the passenger in the case of denied boarding.

Method of Payment

    Except as provided below, the airline must give each passenger 
who qualifies for involuntary denied boarding 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.

    (c) In addition to furnishing passengers with the carrier's written 
statement as specified in paragraphs (a) and (b) of this section, if 
the carrier orally advises involuntarily bumped passengers that they 
are entitled to receive free or discounted transportation as denied 
boarding compensation, the carrier must also orally advise the 
passengers of any material restrictions or conditions applicable to the 
free or discounted transportation and that they are entitled to choose 
a check instead (or cash if that option is offered by the carrier).

0
7. Section 250.10 is revised to read as follows:

Sec.  250.10  Report of passengers denied confirmed space.

    Every reporting carrier as defined in Sec.  234.2 of this chapter 
and any carrier that voluntarily submits data pursuant to Sec.  234.7 
of this chapter shall file, on a quarterly basis, the information 
specified in BTS Form 251. The reporting basis shall be flight segments 
originating in the United States. The reports are to be submitted 
within 30 days after the end of the quarter covered by the report. The 
calendar quarters end March 31, June 30, September 30 and December 31. 
``Total Boardings'' on Line 7 of Form 251 shall include only passengers 
on flights for which confirmed reservations are offered. Data shall not 
be included for inbound international flights.

PART 253--NOTICE OF TERMS OF CONTRACT OF CARRIAGE

0
8. The authority citation for 14 CFR Part 253 continues to read as 
follows:

    Authority:  49 U.S.C. 40113; 49 U.S.C. Chapters 401, 415 and 
417.

0
9. Section 253.7 is revised to read as follows:

Sec.  253.7  Direct notice of certain terms.

    A carrier may not impose any terms restricting refunds of the 
ticket price, imposing monetary penalties on passengers, or raising the 
ticket price consistent with Sec.  399.87 of the chapter, unless the 
passenger receives conspicuous written notice of the salient features 
of those terms on or with the ticket.

0
10. Section 253.10 is added to read as follows:

Sec.  253.10  Notice of contract of carriage choice-of-forum 
provisions.

    No carrier may impose any contract of carriage provision containing 
a choice-of-forum clause that attempts to preclude a passenger, or a 
person who purchases a ticket for air transportation on behalf of a 
passenger, from bringing a claim against a carrier in any court of 
competent jurisdiction, including a court within the jurisdiction of 
that passenger's residence in the United States (provided that the 
carrier does business within that jurisdiction).

PART 259--ENHANCED PROTECTIONS FOR AIRLINE PASSENGERS

0
11. The authority citation for 14 CFR Part 259 continues to read as 
follows:

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, 
and 41712.

0
12. Section 259.2 is revised to read as follows:

[[Page 23164]]

Sec.  259.2  Applicability.

    This part applies to all the flights of a certificated or commuter 
air carrier if the carrier operates scheduled passenger service or 
public charter service using any aircraft originally designed to have a 
passenger capacity of 30 or more seats, and to all flights to and from 
the U.S. of a foreign carrier if the carrier operates scheduled 
passenger service or public charter service to and from the U.S. using 
any aircraft originally designed to have a passenger capacity of 30 or 
more seats, except as otherwise provided in this part. This part does 
not apply to foreign carrier charters that operate to and from the 
United States if no new passengers are picked up in the United States.

0
13. Section 259.3 is revised to read as follows:

Sec.  259.3  Definitions.

    Certificated air carrier means a U.S. carrier holding a certificate 
issued under 49 U.S.C. 41102 to conduct passenger service or holding an 
exemption to conduct passenger operations under 49 U.S.C. 41102.
    Commuter air carrier means a U.S. carrier that has been found fit 
under 49 U.S.C. 41738 and is authorized to carry passengers on at least 
five round trips per week on at least one route between two or more 
points according to a published flight schedule using small aircraft as 
defined in 14 CFR 298.2.
    Covered carrier means a certificated carrier, a commuter carrier, 
or a foreign air carrier operating to, from or within the United 
States, conducting scheduled passenger service or public charter 
service with at least one aircraft having a designed seating capacity 
of 30 or more seats.
    Foreign air carrier means a carrier that is not a citizen of the 
United States as defined in 49 U.S.C. 40102(a) that holds a foreign air 
carrier permit issued under 49 U.S.C. 41302 or an exemption issued 
under 49 U.S.C. 40109 authorizing direct foreign air transportation.
    Large hub airport means an airport that accounts for at least 1.00 
percent of the total enplanements in the United States.
    Medium hub airport means an airport accounting for at least 0.25 
percent but less than 1.00 percent of the total enplanements in the 
United States.
    Non-hub airport means an airport with 10,000 or more annual 
enplanements but less than 0.05 percent of the country's annual 
passenger boardings.
    Small hub airport means an airport accounting for at least 0.05 
percent but less than 0.25 percent of the total enplanements in the 
United States.
    Tarmac delay means the holding of an aircraft on the ground either 
before taking off or after landing with no opportunity for its 
passengers to deplane.

0
14. Section 259.4 is revised to read as follows:

Sec.  259.4  Contingency Plan for Lengthy Tarmac Delays.

    (a) Adoption of Plan. Each covered carrier shall adopt a 
Contingency Plan for Lengthy Tarmac Delays for its scheduled and public 
charter flights at each U.S. large hub airport, medium hub airport, 
small hub airport and non-hub airport at which it operates or markets 
such air service and shall adhere to its plan's terms.
    (b) Contents of Plan. Each Contingency Plan for Lengthy Tarmac 
Delays shall include, at a minimum, the following:
    (1) For domestic flights, assurance that the covered U.S. air 
carrier will not permit an aircraft to remain on the tarmac for more 
than three hours before allowing passengers to deplane unless:
    (i) The pilot-in-command determines there is a safety-related or 
security-related reason (e.g. weather, a directive from an appropriate 
government agency) why the aircraft cannot leave its position on the 
tarmac to deplane passengers; or
    (ii) Air traffic control advises the pilot-in-command that 
returning to the gate or another disembarkation point elsewhere in 
order to deplane passengers would significantly disrupt airport 
operations.
    (2) For international flights operated by covered carriers that 
depart from or arrive at a U.S. airport, assurance that the carrier 
will not permit an aircraft to remain on the tarmac at a U.S. airport 
for more than four hours before allowing passengers to deplane, unless:
    (i) The pilot-in-command determines there is a safety-related or 
security-related reason why the aircraft cannot leave its position on 
the tarmac to deplane passengers; or
    (ii) Air traffic control advises the pilot-in-command that 
returning to the gate or another disembarkation point elsewhere in 
order to deplane passengers would significantly disrupt airport 
operations.
    (3) For all flights, assurance that the carrier will provide 
adequate food and potable water no later than two hours after the 
aircraft leaves the gate (in the case of a departure) or touches down 
(in the case of an arrival) if the aircraft remains on the tarmac, 
unless the pilot-in-command determines that safety or security 
considerations preclude such service;
    (4) For all flights, assurance of operable lavatory facilities, as 
well as adequate medical attention if needed, while the aircraft 
remains on the tarmac;
    (5) For all flights, assurance that the passengers on the delayed 
flight will receive notifications regarding the status of the delay 
every 30 minutes while the aircraft is delayed, including the reasons 
for the tarmac delay, if known;
    (6) For all flights, assurance that the passengers on the delayed 
flight will be notified beginning 30 minutes after scheduled departure 
time (including any revised departure time that passengers were 
notified about before boarding) and every 30 minutes thereafter that 
they have the opportunity to deplane from an aircraft that is at the 
gate or another disembarkation area with the door open if the 
opportunity to deplane actually exists;
    (7) Assurance of sufficient resources to implement the plan; and
    (8) Assurance that the plan has been coordinated with airport 
authorities (including terminal facility operators where applicable) at 
each U.S. large hub airport, medium hub airport, small hub airport and 
non-hub airport that the carrier serves, as well as its regular U.S. 
diversion airports;
    (9) Assurance that the plan has been coordinated with U.S. Customs 
and Border Protection (CBP) at each large U.S. hub airport, medium hub 
airport, small hub airport and non-hub airport that is regularly used 
for that carrier's international flights, including diversion airports; 
and
    (10) Assurance that the plan has been coordinated with the 
Transportation Security Administration (TSA) at each U.S. large hub 
airport, medium hub airport, small hub airport and non-hub airport that 
the carrier serves, including diversion airports.
    (c) Code-Share Responsibility. The tarmac delay contingency plan of 
the carrier under whose code the service is marketed governs, if 
different from the operating carrier, unless the marketing carrier 
specifies in its contract of carriage that the operating carrier's plan 
governs.
    (d) Amendment of plan. At any time, a carrier may amend its 
Contingency Plan for Lengthy Tarmac Delays to decrease the time for 
aircraft to remain on the tarmac for domestic flights covered in 
paragraph (b)(1) of this section, for aircraft to remain on the tarmac 
for international flights covered in paragraph (b)(2) of this section, 
and for the trigger point for food and water covered in paragraph 
(b)(3) of this section. A carrier may also amend its plan to increase 
these intervals (up to the limits in this rule), in which case the

[[Page 23165]]

amended plan shall apply only to departures that are first offered for 
sale after the plan's amendment.
    (e) Retention of records. Each carrier that is required to adopt a 
Contingency Plan for Lengthy Tarmac Delays shall retain for two years 
the following information about any tarmac delay that lasts more than 
three hours:
    (1) The length of the delay;
    (2) The precise cause of the delay;
    (3) The actions taken to minimize hardships for passengers, 
including the provision of food and water, the maintenance and 
servicing of lavatories, and medical assistance;
    (4) Whether the flight ultimately took off (in the case of a 
departure delay or diversion) or returned to the gate; and
    (5) An explanation for any tarmac delay that exceeded 3 hours 
(i.e., why the aircraft did not return to the gate by the 3-hour mark).
    (f) Unfair and deceptive practice. A carrier's failure to comply 
with the assurances required by this rule and contained in its 
Contingency Plan for Lengthy Tarmac Delays will be considered to be an 
unfair and deceptive practice within the meaning of 49 U.S.C. 41712 
that is subject to enforcement action by the Department.

0
15. Section 259.5 is revised to read as follows:

Sec.  259.5  Customer Service Plan.

    (a) Adoption of Plan. Each covered carrier shall adopt a Customer 
Service Plan applicable to its scheduled flights and shall adhere to 
the plan's terms.
    (b) Contents of Plan. Each Customer Service Plan shall address the 
following subjects and comply with the minimum standards set forth:
    (1) Disclosing on the carrier's website, at the ticket counter, or 
when a customer calls the carrier's reservation center to inquire about 
a fare or to make a reservation, that the lowest fare offered by the 
carrier may be available elsewhere if that is the case;
    (2) Notifying consumers of known delays, cancellations, and 
diversions as required by 14 CFR 259.8 of this chapter;
    (3) Delivering baggage on time, including making every reasonable 
effort to return mishandled baggage within twenty-four hours, 
compensating passengers for reasonable expenses that result due to 
delay in delivery, as required by 14 CFR part 254 for domestic flights 
and as required by applicable international agreements for 
international flights, and reimbursing passengers for any fee charged 
to transport a bag if that bag is lost;
    (4) Allowing reservations to be held at the quoted fare without 
payment, or cancelled without penalty, for at least twenty-four hours 
after the reservation is made if the reservation is made one week or 
more prior to a flight's departure;
    (5) Where ticket refunds are due, providing prompt refunds, as 
required by 14 CFR 374.3 and 12 CFR part 226 for credit card purchases, 
and within 20 days after receiving a complete refund request for cash 
and check purchases, including refunding fees charged to a passenger 
for optional services that the passenger was unable to use due to an 
oversale situation or flight cancellation;
    (6) Properly accommodating passengers with disabilities, as 
required by part 382 of this chapter, and other special-needs 
passengers as set forth in the carrier's policies and procedures, 
including during lengthy tarmac delays;
    (7) Meeting customers' essential needs during lengthy tarmac delays 
as required by Sec.  259.4 of this chapter and as provided for in each 
covered carrier's contingency plan;
    (8) Handling ``bumped'' passengers with fairness and consistency in 
the case of oversales as required by part 250 of this chapter and as 
described in each carrier's policies and procedures for determining 
boarding priority;
    (9) Disclosing cancellation policies, frequent flyer rules, 
aircraft seating configuration, and lavatory availability on the 
selling carrier's website, and upon request, from the selling carrier's 
telephone reservations staff;
    (10) Notifying consumers in a timely manner of changes in their 
travel itineraries;
    (11) Ensuring responsiveness to consumer problems as required by 
Sec.  259.7 of this chapter; and
    (12) Identifying the services it provides to mitigate passenger 
inconveniences resulting from flight cancellations and misconnections.
    (c) Self-auditing of plan and retention of records. Each carrier 
that is required to adopt a Customer Service Plan shall audit its own 
adherence to its plan annually. Carriers shall make the results of 
their audits available for the Department's review upon request for two 
years following the date any audit is completed.

0
16. Section 259.6 is revised to read as follows:

Sec.  259.6  Posting of Contracts of Carriage, Tarmac Delay Contingency 
Plans and Customer Service Plans on websites.

    (a) Each U.S. air carrier that has a website and each foreign air 
carrier that has a website marketed to U.S. consumers, and that is 
required to adopt a contingency plan for lengthy tarmac delays, shall 
post its current contingency plan on its website in easily accessible 
form.
    (b) Each U.S. air carrier that has a website and each foreign air 
carrier that has a website marketed to U.S. consumers, and that is 
required to adopt a customer service plan, shall post its current 
customer service plan on its website in easily accessible form.
    (c) Each U.S. air carrier that has a website and each foreign air 
carrier that has a website marketed to U.S. consumers shall post its 
current contract of carriage on its website in easily accessible form.

0
17. Section 259.7 is revised to read as follows:

Sec.  259.7  Response to consumer problems.

    (a) Designated advocates for passengers' interests. Each covered 
carrier shall designate for its scheduled flights an employee who shall 
be responsible for monitoring the effects of flight delays, flight 
cancellations, and lengthy tarmac delays on passengers. This employee 
shall have input into decisions on which flights to cancel and which 
will be delayed the longest.
    (b) Informing consumers how to complain. Each covered carrier shall 
make available the mailing address and e-mail or web address of the 
designated department in the airline with which to file a complaint 
about its scheduled service. This information shall be provided on the 
U.S. carrier's website (if any) and the foreign carrier's website (if 
marketed to U.S. consumers), on all e-ticket confirmations and, upon 
request, at each ticket counter and boarding gate staffed by the 
carrier or a contractor of the carrier.
    (c) Response to complaints. Each covered carrier shall acknowledge 
in writing receipt of each complaint regarding its scheduled service to 
the complainant within 30 days of receiving it and shall send a 
substantive written response to each complainant within 60 days of 
receiving the complaint. A complaint is a specific written expression 
of dissatisfaction concerning a difficulty or problem which the person 
experienced when using or attempting to use an airline's services.
    (d) Social networking sites. Each covered carrier that uses a 
social networking site (e.g. Facebook, Twitter) and that does not 
intend for that site to be a vehicle for receipt of written consumer 
complaints subject to this section shall clearly indicate on the 
carrier's primary page on that social networking site that it will not 
reply to consumer complaints on that site and shall direct consumers to 
the carrier's mailing address and e-mail or website location for filing 
written complaints.

[[Page 23166]]

0
18. Section 259.8 is added to read as follows:

Sec.  259.8  Notify passengers of known delays, cancellations, and 
diversions.

    (a) Each covered carrier for its scheduled flights to, from or 
within the U.S. must promptly provide to passengers who are ticketed or 
hold reservations, and to the public, information about a change in the 
status of a flight within 30 minutes after the carrier becomes aware of 
such a change in the status of a flight. A change in the status of a 
flight means, at a minimum, cancellation of a flight, a delay of 30 
minutes or more in the planned operation of a flight, or a diversion. 
The flight status information must at a minimum be provided in the 
boarding gate area for the flight at a U.S. airport, on the carrier's 
website, and via the carrier's telephone reservation system upon 
inquiry by any person.
    (1) With respect to any U.S. carrier or foreign air carrier that 
permits passengers to subscribe to flight status notification services, 
the carrier must deliver such notification to such passengers, by 
whatever means is available to the carrier and of the passenger's 
choice, within 30 minutes after the carrier becomes aware of such a 
change in the status of a flight.
    (2) The U.S. carrier or foreign air carrier shall incorporate such 
notification service commitment into its Customer Service Plan as 
specified in section 259.5 of this chapter.
    (b) For its scheduled flights to, from or within the U.S, within 30 
minutes after the carrier becomes aware of a flight cancellation, a 
flight delay of 30 minutes or more, or a flight diversion, each covered 
carrier must update all flight status displays and other sources of 
flight information that are under the carrier's control at U.S. 
airports with information on that flight irregularity.
    (c) If an airport-controlled display system at a U.S. airport 
accepts flight status updates from carriers, covered carriers must 
provide flight irregularity information to that airport for the 
carrier's scheduled flights to, from or within the U.S. within 30 
minutes after the carrier becomes aware of such a change in the status 
of a flight. Flight irregularity refers to flight cancellations, flight 
delays of 30 minutes or more, and diversions.

PART 399--STATEMENTS OF GENERAL POLICY

0
19. The authority citation for 14 CFR Part 399 continues to read as 
follows:

    Authority:  49 U.S.C. 40101 et seq.

0
20. Effective October 24, 2011, Sec.  399.84 is revised to read as 
follows:

Sec.  399.84  Price advertising and opt-out provisions.

    (a) The Department considers any advertising or solicitation by a 
direct air carrier, indirect air carrier, an agent of either, or a 
ticket agent, for passenger air transportation, a tour (i.e., a 
combination of air transportation and ground or cruise accommodations) 
or tour component (e.g., a hotel stay) that must be purchased with air 
transportation that states a price for such air transportation, tour, 
or tour component to be an unfair and deceptive practice in violation 
of 49 U.S.C. 41712, unless the price stated is the entire price to be 
paid by the customer to the carrier, or agent, for such air 
transportation, tour, or tour component. Although charges included 
within the single total price listed (e.g., government taxes) may be 
stated separately or through links or ``pop ups'' on websites that 
display the total price, such charges may not be false or misleading, 
may not be displayed prominently, may not be presented in the same or 
larger size as the total price, and must provide cost information on a 
per passenger basis that accurately reflects the cost of the item 
covered by the charge.
    (b) The Department considers any advertising by the entities listed 
in paragraph (a) of this section of an each-way airfare that is 
available only when purchased for round-trip travel to be an unfair and 
deceptive practice in violation of 49 U.S.C. 41712, unless such airfare 
is advertised as ``each way'' and in such a manner so that the 
disclosure of the round-trip purchase requirement is clearly and 
conspicuously noted in the advertisement and is stated prominently and 
proximately to the each-way fare amount. The Department considers it to 
be an unfair and deceptive practice to advertise each-way fares 
contingent on a round-trip purchase requirement as ``one-way'' fares, 
even if accompanied by prominent and proximate disclosure of the round 
trip purchase requirement.
    (c) When offering a ticket for purchase by a consumer, for 
passenger air transportation or for a tour (i.e., a combination of air 
transportation and ground or cruise accommodations) or tour component 
(e.g., a hotel stay) that must be purchased with air transportation, a 
direct air carrier, indirect air carrier, an agent of either, or a 
ticket agent, may not offer additional optional services in connection 
with air transportation, a tour, or tour component whereby the optional 
service is automatically added to the consumer's purchase if the 
consumer takes no other action, i.e., if the consumer does not opt out. 
The consumer must affirmatively ``opt in'' (i.e., agree) to such a 
service and the fee for it before that fee is added to the total price 
for the air transportation-related purchase. The Department considers 
the use of ``opt-out'' provisions to be an unfair and deceptive 
practice in violation of 49 U.S.C. 41712.

0
21. Section 399.85 is added to read as follows:

Sec.  399.85  Notice of baggage fees and other fees.

    (a) If a U. S. or foreign air carrier has a website accessible for 
ticket purchases by the general public in the U.S., the carrier must 
promptly and prominently disclose any increase in its fee for carry-on 
or first and second checked bags and any change in the first and second 
checked bags or carry-on allowance for a passenger on the homepage of 
that website (e.g., provide a link that says ``changed bag rules'' or 
similarly descriptive language and takes the consumer from the homepage 
directly to a pop-up or a place on another webpage that details the 
change in baggage allowance or fees and the effective dates of such 
changes). Such notice must remain on the homepage for at least three 
months after the change becomes effective.
    (b) If a U.S. carrier, a foreign air carrier, an agent of either, 
or a ticket agent has a website accessible for ticket purchases by the 
general public in the U.S., the carrier or agent must clearly and 
prominently disclose on the first screen in which the agent or carrier 
offers a fare quotation for a specific itinerary selected by a consumer 
that additional airline fees for baggage may apply and where consumers 
can see these baggage fees. An agent may refer consumers to the airline 
websites where specific baggage fee information may be obtained or to 
its own site if it displays airlines' baggage fees.
    (c) On all e-ticket confirmations for air transportation within, to 
or from the United States, including the summary page at the completion 
of an online purchase and a post-purchase email confirmation, a U.S. 
carrier, a foreign air carrier, an agent of either, or a ticket agent 
that advertises or sells air transportation in the United States must 
include information regarding the passenger's free baggage allowance 
and/or the applicable fee for a carry-on bag and the first and second 
checked bag. Carriers must provide this information in text form in the 
e-ticket confirmation. Agents may provide this information in

[[Page 23167]]

text form in the e-ticket confirmations or through a hyperlink to the 
specific location on airline websites or their own website where this 
information is displayed. The fee information provided for a carry-on 
bag and the first and second checked bag must be expressed as specific 
charges taking into account any factors (e.g., frequent flyer status, 
early purchase, and so forth) that affect those charges.
    (d) If a U.S. or foreign air carrier has a website marketed to U.S. 
consumers where it advertises or sells air transportation, the carrier 
must prominently disclose on its website information on fees for all 
optional services that are available to a passenger purchasing air 
transportation. Such disclosure must be clear, with a conspicuous link 
from the carrier's homepage directly to a page or a place on a page 
where all such optional services and related fees are disclosed. For 
purposes of this section, the term ``optional services'' is defined as 
any service the airline provides, for a fee, beyond passenger air 
transportation. Such fees include, but are not limited to, charges for 
checked or carry-on baggage, advance seat selection, in-flight 
beverages, snacks and meals, pillows and blankets and seat upgrades. In 
general, fees for particular services may be expressed as a range; 
however, baggage fees must be expressed as specific charges taking into 
account any factors (e.g., frequent flyer status, early purchase, and 
so forth) that affect those charges.
    (e) For air transportation within, to or from the United States, a 
carrier marketing a flight under its identity that is operated by a 
different carrier, otherwise known as a code-share flight, must through 
its website disclose to consumers booked on a code-share flight any 
differences between its optional services and related fees and those of 
the carrier operating the flight. This disclosure may be made through a 
conspicuous notice of the existence of such differences on the 
marketing carrier's website or a conspicuous hyperlink taking the 
reader directly to the operating carrier's fee listing or to a page on 
the marketing carrier's website that lists the differences in policies 
among code-share partners.
    (f) The Department considers the failure to give the appropriate 
notice described in paragraphs (a) through (e) of this section to be an 
unfair and deceptive practice within the meaning of 49 U.S.C. 41712.

0
22. Section 399.87 is added to read as follows:

Sec.  399.87  Baggage allowances and fees.

    For passengers whose ultimate ticketed origin or destination is a 
U.S. point, U.S. and foreign carriers must apply the baggage allowances 
and fees that apply at the beginning of a passenger's itinerary 
throughout his or her entire itinerary. In the case of code-share 
flights that form part of an itinerary whose ultimate ticketed origin 
or destination is a U.S. point, U.S. and foreign carriers must apply 
the baggage allowances and fees of the marketing carrier throughout the 
itinerary to the extent that they differ from those of any operating 
carrier.

0
23. Section 399.88 is added to read as follows:

Sec.  399.88  Prohibition on post-purchase price increase.

    (a) It is an unfair and deceptive practice within the meaning of 49 
U.S.C. 41712 for any seller of scheduled air transportation within, to 
or from the United States, or of a tour (i.e., a combination of air 
transportation and ground or cruise accommodations), or tour component 
(e.g., a hotel stay) that includes scheduled air transportation within, 
to or from the United States, to increase the price of that air 
transportation, tour or tour component to a consumer, including but not 
limited to an increase in the price of the seat, an increase in the 
price for the carriage of passenger baggage, or an increase in an 
applicable fuel surcharge, after the air transportation has been 
purchased by the consumer, except in the case of an increase in a 
government-imposed tax or fee. A purchase is deemed to have occurred 
when the full amount agreed upon has been paid by the consumer.
    (b) A seller of scheduled air transportation within, to or from the 
United States or a tour (i.e., a combination of air transportation and 
ground or cruise accommodations), or tour component (e.g., a hotel 
stay) that includes scheduled air transportation within, to or from the 
United States, must notify a consumer of the potential for a post-
purchase price increase due to an increase in a government-imposed tax 
or fee and must obtain the consumer's written consent to the potential 
for such an increase prior to purchase of the scheduled air 
transportation, tour or tour component that includes scheduled air 
transportation. Imposition of any such increase without providing the 
consumer the appropriate notice and without obtaining his or her 
written consent of the potential increase constitutes an unfair and 
deceptive practice within the meaning of 49 U.S.C. 41712.

0
24. Section 399.89 is added to read as follows:

Sec.  399.89  Disclosure of potential for price increase before 
payment.

    Any seller of scheduled air transportation within, to or from the 
United States, or of a tour (i.e., a combination of air transportation 
and ground or cruise accommodations), or tour component (e.g., a hotel 
stay) that includes scheduled air transportation within, to or from the 
United States, must notify a consumer of the potential for a price 
increase that could take place prior to the time that the full amount 
agreed upon has been paid by the consumer, including but not limited to 
an increase in the price of the seat, an increase in the price for the 
carriage of passenger baggage, an increase in an applicable fuel 
surcharge, or an increase in a government-imposed tax or fee and must 
obtain the consumer's written consent to the potential for such an 
increase prior to accepting any payment for the scheduled air 
transportation, or tour or tour component that includes scheduled air 
transportation. Imposition of any such increase without providing the 
consumer the appropriate notice and obtaining his or her written 
consent to the potential increase constitutes an unfair and deceptive 
practice within the meaning of 49 U.S.C. 41712.

[FR Doc. 2011-9736 Filed 4-20-11; 8:45 am]
BILLING CODE P