I
106TH CONGRESS
1ST SESSION
H. R. 1678
To amend title 49, United States Code, to require the Secretary of Transpor-
tation to initiate investigations of unfair methods of competition by
major air carriers against new entrant air carriers.
IN THE HOUSE OF REPRESENTATIVES
MAY 4, 1999
Mr. SWEENEY introduced the following bill; which was referred to the
Committee on Transportation and Infrastructure
A BILL
To amend title 49, United States Code, to require the Sec-
retary of Transportation to initiate investigations of un-
fair methods of competition by major air carriers against
new entrant air carriers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Airline Competition
and Fairness Act of 1999’’.
SEC. 2. UNFAIR METHODS OF COMPETITION AGAINST NEW
ENTRANT AIR CARRIERS.
Section 41712 of title 49, United States Code, is
amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘On the initiative’’; and
(2) by adding at the end the following:
‘‘(b) UNFAIR METHODS OF COMPETITION AGAINST
NEW ENTRANT AIR CARRIERS.—
‘‘(1) IN
GENERAL.—In any case in which a
major air carrier is competing with a new entrant
air carrier in providing air transportation on a route
between a hub airport of the major air carrier and
another airport, the Secretary shall initiate an inves-
tigation under subsection (a) to determine whether
the major air carrier has been or is engaged in an
unfair method of competition if the Secretary finds
that—
‘‘(A) the major air carrier has added seat
capacity on the route and has sold such a large
number of seats on the route at very low fares
that the ensuing self-diversion of revenue has
resulted in lower local revenue than would have
resulted from a reasonable alternative response
by the major air carrier to the competition;
‘‘(B) the number of passengers that the
major air carrier has carried on the route at the
new entrant air carrier’s low fares (or at similar
fares that are substantially below the major air
carrier’s previous fares) has exceeded the new
entrant air carrier’s total seat capacity on the
route, resulting, through self-diversion, in lower
local revenue than would have resulted from a
reasonable alternative response by the major air
carrier to the competition; or
‘‘(C) the number of passengers that the
major air carrier has carried on the route at the
new entrant air carrier’s low fares (or at similar
fares that are substantially below the major air
carrier’s previous fares) has exceeded the num-
ber of low-fare passengers carried by the new
entrant air carrier on the route, resulting,
through self-diversion, in lower local revenue
than would have resulted from a reasonable al-
ternative response by the major air carrier to
the competition.
‘‘(2) EXCEPTION.—Even if the Secretary makes
a finding described in paragraph (1), the Secretary
is not required to initiate an investigation in accord-
ance with paragraph (1) if the Secretary also finds
that there are strong reasons to believe that the
major air carrier’s response to competition from the
new entrant air carrier does not violate subsection
(a).
‘‘(c) DEFINITIONS.—In this section, the following
definitions apply:
‘‘(1) NEW ENTRANT AIR CARRIER.—The term
‘new entrant air carrier’ means an air carrier that
has been providing air transportation according to a
published schedule for less than 10 years and pur-
sues a competitive strategy of charging low fares.
‘‘(2) HUB
AIRPORT.—The term ‘hub airport’
means an airport that each year has at least .25
percent of the total annual boardings in the United
States.
‘‘(3) MAJOR AIR CARRIER.—The term ‘major
air carrier’ means a passenger air carrier that is cer-
tificated under chapter 411 of this title and included
in Carrier Group III under criteria contained in sec-
tion 04 of part 241 of title 14, Code of Federal Reg-
ulations.’’.
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