I
106TH CONGRESS
2D SESSION
H. R. 4978
To amend title 49, United States Code, to authorize the Secretary of Trans-
portation to oversee the competitive activities of air carriers following
a concentration in the airline industry, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 26, 2000
Mr. OBERSTAR introduced the following bill; which was referred to the
Committee on Transportation and Infrastructure
A BILL
To amend title 49, United States Code, to authorize the
Secretary of Transportation to oversee the competitive
activities of air carriers following a concentration in the
airline industry, and for other purposes.
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
Preservation Act of 2000’’.
SEC. 2. OVERSIGHT OF AIR CARRIER PRICING.
(a) IN GENERAL.—Chapter 415 of title 49, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 41512. Oversight of air carrier pricing
‘‘(a) EFFECTIVE DATE.—
‘‘(1) IN GENERAL.—This section shall take ef-
fect immediately upon a determination by the Sec-
retary of Transportation that 3 or fewer air carriers
account for 70 percent or more of the scheduled rev-
enue passenger miles in interstate air transportation
as a result of—
‘‘(A) the consolidation or merger of the
properties (or a substantial portion of the prop-
erties) of 2 or more of the 7 air carriers that
account for the highest number of scheduled
revenue passenger miles in interstate air trans-
portation into a single entity that owns or oper-
ates the properties previously in separate own-
ership; or
‘‘(B) the acquisition (by purchase, lease, or
contract to operate) of the properties (or a sub-
stantial portion of the properties) of 1 or more
of the 7 air carriers described in subparagraph
(A) by another of such carriers.
‘‘(C) to offer rebates to individuals who
have been charged the fare.
‘‘(4) PERIOD OF EFFECTIVENESS OF ORDER.—
An order issued by the Secretary under this sub-
section shall remain in effect for a period to be de-
termined by the Secretary.
‘‘(c) ACTIONS OF DOMINANT AIR CARRIERS IN RE-
SPONSE TO NEW ENTRANTS.—If, with respect to a route
in interstate air transportation to or from a hub airport,
a dominant air carrier at the airport—
‘‘(1) institutes or changes its fares for air
transportation on the route in a manner that results
in fares that are lower than or comparable to the
fares offered by a new entrant air carrier for such
air transportation; and
‘‘(2) increases the passenger capacity at which
such fares are offered on the route to a level which
is—
‘‘(A) 2 or more times the capacity pre-
viously offered by the carrier at such fares on
the route; and
‘‘(B) 2 or more times the total capacity of-
fered by the new entrant air carrier on the
route, the dominant air carrier, in the 2-year
period beginning on the date that such fares
and additional capacity are instituted, shall con-
tinue to offer such fares with respect to not less
than 80 percent of the highest number of seats
per week for which the dominant air carrier has
offered the fares.
‘‘(d) ENSURING COMPETITION AT HUB AIRPORTS.—
‘‘(1) IN
GENERAL.—On the initiative of the
Secretary or on a complaint filed with the Secretary,
the Secretary may undertake an investigation to de-
termine whether a dominant air carrier at a hub air-
port is charging higher than average fares at the
airport.
‘‘(2) HIGHER
THAN
AVERAGE
FARES.—For
purposes of paragraph (1), the Secretary may deter-
mine that a dominant air carrier is charging higher
than average fares at a hub airport if the carrier is
charging, with respect to 20 percent or more of its
routes in interstate air transportation that begin or
end at the airport, an average fare that is at least
5 percent higher than the average fare being
charged by all air carriers on routes in interstate air
transportation of comparable distances and density,
after adjustments for costs that are carrier or air-
port specific, such as passenger facility charges or
employee compensation.
‘‘(3) ACTIONS IN RESPONSE TO UNFAIR COM-
PETITION.—If the Secretary determines under para-
graph (1) that a dominant air carrier is charging
higher than average fares at a hub airport, the Sec-
retary, after providing the carrier an opportunity for
a hearing, may order the carrier to take actions to
increase opportunities for competition at the hub
airport, including—
‘‘(A) requiring the carrier to make gates,
slots, and other airport facilities available to
other air carriers on reasonable and competitive
terms;
‘‘(B) requiring adjustments in the commis-
sions paid by the carrier to travel agents;
‘‘(C) requiring adjustments in the carrier’s
frequent flyer program; and
‘‘(D) requiring adjustments in the carrier’s
corporate discount arrangements and com-
parable corporate arrangements.
‘‘(e) DEFINITIONS.—In this section, the following
definitions apply:
‘‘(1) DOMINANT AIR CARRIER.—The term ‘dom-
inant air carrier’, with respect to a hub airport,
means an air carrier that accounts for more than 50
percent of the total annual boardings at the airport
in the preceding 2-year period or a shorter period
specified in paragraph (3).
‘‘(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) INTERSTATE AIR TRANSPORTATION.—The
term ‘interstate air transportation’ includes intra-
state air transportation.
‘‘(4) NEW ENTRANT AIR CARRIER.—The term
‘new entrant air carrier’, with respect to a hub air-
port, means an air carrier that accounts for less
than 5 percent of the total annual boardings at the
airport in the preceding 2-year period or in a shorter
period specified by the Secretary if the carrier has
operated at the airport less than 2 years.’’.
(b) CONFORMING AMENDMENT.—The analysis for
such chapter is amended by adding at the end the fol-
lowing:
‘‘41512. Oversight of air carrier pricing.’’.
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