Airline Deregulation Act
PL 95-504 (S.2493), enacted 10/24/1978

PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1705 
Public Law 95-504 
95th Congress 
An Act 
To amend the Federal Aviation Act of 1958, to encourage, develop, and attain 
Oct. 24, 1978 
an air transportation system which relies on competitive market forces to 
[S. 2493] 
determine the quality, variety, and price of air services, and for other 
purposes. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assemhled, 
Airline 
SHORT TITLE 
Deregulation 
Act of 1978. 
SECTION 1. This Act may be cited as the "Airline Deregulation Act 49 USC 1301 
of 1978". 
note. 
DEFINITIONS 
SEC. 2. (a) Section 101 of the Federal Aviation Act of 1958 (49 
U.S.C. 1301) is amended— 
(1) by inserting after paragraph (13) the following new 
paragraphs: 
"(14) 'Charter air carrier' means an air carrier holding a certificate 
of public convenience and necessity authorizing it to engage in charter 
air transportation, 
"(15) 'Charter air transportation' means charter trips, including 
inclusive tour charter trips, in air transportation, rendered pursuant 
to authority conferred under this Act under regulations prescribed 
by the Board."; 
(2) by inserting after paragraph (32) the following new 
paragraph: 
" (33) 'Predatory' means any practice which would constitute a viola-
tion of the antitrust laws as set forth in the first section of the Clayton 
Act (15U.S.C. 12)."; 
(3) by inserting after paragraph (35) the following new para-
graph : 
"(36) 'State agency' means that department, agency, officer, or 
other entity of a State government which has been designated accord-
ing to State law as— 
"(A) the recipient of any notice required under title IV of this 
Act to be given to a State agency; or 
"(B) the representative of the State in any matter about which 
the Board is required, under such title IV, to consult with or con-
sider the views of a State agency."; and 
(4) by striking out paragraphs (36) and (37). 
(b) Section 101 of such Act is amended by renumbering the para-
graphs of such section, including all references thereto, as paragraphs 
(1) through (41), respectively. 
DECLARATION OF POLICY 
SEC. 3. (a) Section 102(a) of the Federal Aviation Act of 1958 (49 
LT.S.C. 1302 (a)) is amended to read as follows: 
92 STAT. 1706 
PUBLIC LAW 95-504—OCT. 24, 1978 
"FACTORS FOR INTERSTATE AND OVERSEAS AIR TRANSPORTATION 
"SEC. 102. (a) In the exercise and performance of its powers and 
duties under this Act with respect to interstate and overseas air trans-
portation, the Board shall consider the following, among other things, 
' \^ 
as being in the public interest, and in accordance with the public con-
venience and necessity: 
"(1) The assignment and maintenance of safety as the highest 
priority in air commerce, and prior to the authorization of new 
air transportation services, full evaluation of the recommenda-
tions of the Secretary of Transportation on the safety implica-
tions of such new services and full evaluation of any report or 
Post, p. 1709. 
recommendation submitted under section 107 of this Act. 
"(2) The prevention of any deterioration in established safety 
procedures, recognizing the clear intent, encouragement, and dedi-
1
,
, „, 
cation of the Congress to the furtherance of the highest degree of 
safety in air transportation and air commerce, and the mainte-
nance of the safety vigilance that has evolved within air trans-
portation and air commerce and has come to be expected by the 
traveling and shipping public. 
" (3) The availability of a variety of adequate, economic, efficient, 
and low-price services by air carriers without unjust discrimina-
tions, undue preferences or advantages, or unfair or deceptive 
practices, the need to improve relations among, and coordinate 
transportation by, air carriers, and the need to encourage fair 
wages and equitable working conditions. 
" (4) The placement of maximum reliance on competitive market 
forces and on actual and potential competition (A) to provide the 
needed air transportation system, and (B) to encourage efficient 
and well-managed carriers to earn adequate profits and to attract 
capital. 
"(5) The development and maintenance of a sound regulatory 
environment which is responsive to the needs of the public and in 
which decisions are reached promptly in order to facilitate adap-
tion of the air transportation system to the present and future 
needs of the domestic and foreign commerce of the United States, 
the Postal Service, and the national defense. 
"(6) The encouragement of air service at major urban areas 
through secondary or satellite airports, where consistent with 
regional airport plans of regional and local authorities, and when 
such encouragement is endorsed by appropriate State entities 
encouraging such service by air carriers whose sole responsibility 
in any specific market is to provide service exclusively at the 
secondary or satellite airport, and fostering an environment which 
reasonably enables such carriers to establish themselves and to 
develop their secondary or satellite airport services. 
"(7) The prevention of unfair, deceptive, predatory, or anti-
competitive practices in air transportation, and the avoidance of— 
" (A) unreasonable industry concentration, excessive market 
domination, and monopoly power; and 
"(B) other conditions; 
that would tend to allow one or more air carriers unreasonably to 
increase prices, reduce services, or exclude competition in air 
transportation. 
" (8) The maintenance of a comprehensive and convenient system 
of continuous scheduled airline service for small communities and 
for isolated areas, with direct Federal 
assistance 
where 
appropriate. 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1707 
"(9) The encouragement, development, and maintenance of an 
air transportation system relying on actual and potential competi-
tion to provide efficiency, innovation, and low prices, and to deter-
mine the variety, quality, and price of air transjportation services. 
"(10) The encouragement of entry into air transportation 
markets by new air carriers, the encouragement of entry into addi-
tional air transportation markets by existing air carriers, and the 
continued strengthening of small air carriers so as to assure a more 
ejffective, competitive airline industry.". 
(b) Section 102 of such Act is amended by adding at the end thereof 49 USC 1302: 
the following new subsection: 
"FACTORS FOR FOREIGN AIR TRANSPORTATION 
"(c) In the exercise and performance of its powers and duties under 
this Act with respect to foreign air transportation, the Board shall 
consider the following, among other things, as being in the public 
interest, and in accordance with the public convenience and necessity: 
" (1) The encouragement and development of an air transporta-
tion system properly adapted to the present and future needs of 
the foreign and domestic commerce of the United States, of the 
Postal Service, and of the national defense. 
"(2) The regulation of air transportation in such manner as to 
recognize and preserve the inherent advantages of, assure the high-
est degree of safety in, and foster sound economic conditions in, 
such transportation, and to improve the relations between and 
coordinate transportation by air carriers. 
"(3) The promotion of adequate, economical, and efficient serv-
ice by air carriers at reasonable charges, without unjust discrimi-
nations, undue preferences or advantages, or unfair or destructive 
competitive practices. 
"(4) Competition to the extent necessary to assure the sound 
development of an air transportation system properly adapted to 
the needs of the foreign and domestic commerce of the United 
States, of the Postal Service, and of the national defense. 
" (5) The promotion of safety in air commerce. 
"(6) The promotion, encouragement, and development of civil 
aeronautics.". 
(c) That portion of the table of contents contained in the first section 
of such Act which appears under the side heading 
"SEC. 102. Declaration of Policy: The Board." 
is amended by striking out 
" (a) General factors for consideration. 
"(b) Factors for all-cargo air service." 
-
and inserting in lieu thereof 
" (a) Factors for interstate and overseas air transportation. 
"(b) Factors for all-cargo air service. 
"(c) Factors for foreign air transportation.". 
FEDERAL PREEMPTIONT 
SEC. 4. (a) Title I of the Federal Aviation Act of 1958 (49 U.S.C. 
1301 et seq.) is amended by adding at the end thereof the following 
new section: 
92 STAT. 1708 
PUBLIC LAW 95-504—OCT. 24, 1978 
( 
"FEDERAii 
P R E E M P T I O N 
" P R E E M P T I O N 
49 use 1305. 
"SEC. 105. (a) (1) Except as provided in paragraph (2) of this sub-
section, no State or political subdivision thereof and no interstate 
agency or other political agency of two or more States shall enact or 
enforce any law, rule, regulation, standard, or other provision having 
the force and effect of law relating to rates, routes, or services of any 
49 use 1371. 
air carrier having authority under title I V of this Act to provide inter-
state air transportation. 
"(2) Except with respect to air transportation (other than charter 
air transportation) provided pursuant to a certificate issued by the 
49 use 1371. 
Board under section 401 of this Act, the provisions of paragraph (1) 
of this subsection shall not apply to any transportation by air of per-
sons, property, or mail conducted wholly within the State of Alaska. 
"PROPRIETARY POWERS AND RIGHTS 
"(b) (1) Nothing in subsection (a) of this section shall be construed 
to limit the authority of any State or political subdivision thereof or 
any interstate agency or other political agency of two or more States 
as the owner or operator of an airport served by any air carrier certifi-
cated by the Board to exercise its proprietary powers and rights. 
"(2) Any aircraft operated between points in the same State (other 
than the State of Hawaii) which in the course of such operation crosses 
a boundary between two States, or between the United States and any 
other country, or between a State and the beginning of the territorial 
Avaters of tlie United States, shall not, by reason of crossing such 
boundary, be considered to be operating in interstate or overseas air 
transportation. 
"EXISTING STATE AUTHORITY 
"(c) When any intrastate air carrier which on August 1, 1977, was 
operating primarily in intrastate air transportation regulated by a 
State receives the authority to provide interstate air transportation, 
any authority received from such State shall be considered to be part of 
its authority to provide air transportation received from the Board 
under title TV of this Act, until modified, suspended, amended, or ter-
minated as provided under such title. 
"DEFINITION 
"(d) For purposes of this section, the term 'State' means any State, 
the District of Columbia, the Commonwealth of Puerto Rico, the 
Commonwealth of the Northern Mariana Islands, Guam, the Virgin 
Islands, and any territory or possession of the United States.". 
(b) That portion of the table of contents contained in the first sec-
tion of such Act which appears under the center heading 
"TITLE I—GENERAL PROVISIONS"' 
is amended by adding at the end thereof 
"See. 105. Federal preemption. 
"(a) Preemption. 
"(b) Proprietary powers and rights. 
"(c) Existing State authority. 
"(d) Definition.". 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1709 
REPORT ON SUBSIDY COST-SHARING, STUDY OF LEVEL OF AIR SAFETY, 
AND REPORT ON AIR CARRIER MARKETING OF TOURS 
SEC. 5. (a) Title I of the Federal Aviation Act of 1958 (49 U.S.C. 
1301 et seq.) is further amended by adding at the end thereof the 
following new sections: 
" R E P O R T O N SUBSIDY COST-SHARING 
"SEC. 106. Not later than January 1, 1980, the Board and the Secre-
tary of Transportation, shall, separately or jointly, submit a compre-
hensive report to the Congress on the feasibility and appropriateness 
of devising formulas by which States and their political subdivisions 
could share part of the costs being incurred by the United States 
under sections 406 and 419 of this Act, Such report shall include 
any recommendations of the Board and the Secretary for the imple-
mentation of such cost-sharing formulas. 
"SAFETY STUDY 
"POLICY 
"SEC. 107. (a) The Congress intends that the implementation of the 49 USC 1307. 
Airline Deregulation Act of 1978 result in no diminution of the high 
standard of safety in air transportation attained in the United States 
at the time of the enactment of such Act. 
49 use 1306. 
49 USC 1376. 
Post, p. 1732. 
'REPORT 
"(b) Not later than January 31, 1980, and each January 31 there-
after, the Secretary of Transportation shall prepare and submit to 
the Congress and the Board a comprehensive annual report on the 
extent to which the implementation of the Airline Deregulation Act 
of 1978 has affected, during the preceding calendar year, or will Ante, p. 1705. 
affect, in the succeeding calendar year, the level of air safety. Each 
such report shall, at a minimum, contain an analysis of each of the 
following: 
"(1) All relevant data on accidents and incidents occurring 
during the calendar year covered by such report in air transpor-
tation and on violations of safety regulations issued by the Secre-
tary of Transportation occurring during such calendar year. 
"(2) 
Current and anticipated 
personnel requirements 
of 
the Administrator with respect to enforcement of air safety 
regulations. 
"(3) Effects on current levels of air safety of changes or pro-
posals for changes in air carrier operating practices and proce-
dures which occurred during the calendar year covered by such 
report. 
"(4) The adequacy of air safety regulations taking into con-
sideration changes in air carrier operating practices and proce-
dures which occurred during the calendar year covered by such 
report. 
Based on such report, the Secretary shall take those steps necessary 
to ensure that the high standard of safety in air transportation 
referred to in subsection (a) of this section is maintained in all aspects 
of air transportation in the United States. 
92 STAT. 1710 
PUBLIC LAW 95-504—OCT. 24, 1978 
Review and 
report to 
congressional 
committees. 
49 use 1371. 
"RECOMMENDATIONS 
"(c) Not later than January 31, 1980, and each January 31 there-
after, the Secretary of Transportation shall submit to the Congress 
and the Board recommendations with respect to the level of sur-
veillance necessary to enforce air safety regulations and the level of 
staffing necessary to carry out such surveillance. The Secretary of 
Transportation's recommendations shall include proposals for any 
legislation needed to implement such recommendations. 
"REGULATIONS AND INSPECTION PROCEDURES 
"(d) Not later than July 1, 1979, the Secretary of Transportation 
shall complete a thorough review, and submit a report thereon to the 
appropriate authorizing committees of the Congress and to the 
Administrator, of the safety regulations and inspection procedures 
applicable to each class of air carriers subject to the provisions of title 
IV of this Act, in order to ensure that all classes of air carriers are 
providing the highest possible level of safe, reliable air transporta-
tion to all the communities served by those air carriers. Based on 
such review, the Administrator shall promulgate such safety regu-
lations and establish such inspection procedures as the Administrator 
deems necessary to maintain the highest standard of safe, reliable air 
transportation in the United States. 
u 
REPORT ON AIR CARRIER M A R K E T I N G o r TOURS 
49 use 1308. 
"SEC. 108. Not later than May 1, 1979, the Board shall prepare and 
submit a report to the Congress which sets forth the recommenda-
tions of the Board on whether this Act and regulations of the Board 
should be amended to permit air carriers to sell tours directly to the 
public and to acquire control of persons authorized to sell tours to the 
public. The report shall evaluate the effects on the following groups 
. 
; , 
of allowing air carriers to sell tours: 
" (1) The traveling public. 
" (2) The independent tour operator industry. 
" (3) The travel agent industry. 
" (4) The different classes of air carriers.", 
(b) That portion of the table of contents contained in the first sec-
tion of such Act which appears under the center heading 
"TITLE I—GENEBAL PEOVISIONS" 
is amended by adding at the end thereof 
"Sec. 106. Report on subsidy cost-sharing. 
"Sec. 107. Safety study. 
"(a) Policy. 
r 
"(b) Report. 
"(c) Recommendations. 
"(d) Regulations and inspection procedure. 
"Sec. 108. Report on air carrier marketing of tours.". 
APPLICATION FOR CERTIFICATE 
SEC. 6. Section 401(b) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371 (b)) is amended— 
(1) by striking out "and shall be so verified"; and 
(2) by inserting ", and upon any community affected" immedi-
ately before the period. 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1711 
ROUTE APPLICATIONS 
SEC. 7. (a) Section 401(c) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371 (c)) is amended to read as follows: 
"ROUTE APPLICATIONS 
"(c) (1) Upon the filing of any application pursuant to subsection Public notice, 
(b) of this section, the Board shall give due notice thereof to the 
public by posting a notice of such application in the office of the 
secretary of the Board and to such other persons as the Board may 
by regulation determine. The Board shall— 
" (A) set such application for a public hearing; 
"(B) begin to make a determination with respect to such appli-
cation under the simplified procedures established by the Board 
in regulations pursuant to subsection (p) ; or 
" (C) dismiss such application on the merits; 
not later than ninety days after the date the application is filed with 
the Board. Any interested person may file with the Board a protest 
or memorandum of opposition to or in support of the issuance of the 
certificate requested by such application. Any order of dismissal of 
an application issued by the Board without setting such application 
for a hearing or beginning to make a determination with respect to 
such application under such simplified procedures, shall be deemed 
a final order subject to judicial review in accordance with the provi-
sions of section 1006 of this Act. 
49 use 1486. 
"(2) If the Board determines that any application should be set for 
a public hearing under clause (A) of the second sentence of paragraph 
(1) of this subsection, an initial or recommended decision shall be 
issued not later than one himdred and fifty days after the date of such 
determination by the Board. Not later than ninety days after the Final order, 
initial or recommended decision is issued, the Board shall make its 
final order with respect to such application. If the Board does not 
act within such ninety-day period— 
"(A) in the case of an application for a certificate to engage in 
interstate or overseas air transportation, the initial or recom-
mended decision shall become the final decision of the Board and 
shall be subject to judicial review in accordance with the provi-
sions of section 1006 of this Act; and 
" (B) in the case of an application for a certificate to engage 
in foreign air transportation, the initial or recommended decision 
shall be transmitted to the President pursuant to section 801 of 
this Act. 
49 use 1461. 
"(3) Not later than the one-hundred-eightieth day after the Board 
begins to make a determination with respect to an application under 
the simplified procedures established by the Board in regulations pur-
suant to subsection (p) of this section, the Board shall issue its final 
order with respect to such application. 
"(4) If an applicant fails to meet the procedural schedule adopted 
by the Board in a particular proceeding, the applicable period pre-
scribed in paragraph (2) or (3) of this subsection may be extended by 
the Board for a period equal to the period of delay caused by the 
applicant. In addition to any extension authorized by the preceding 
sentence, in extraordinary circumstances, the Board may, by order 
delay an initial or recommended decision for not to exceed thirty days 
beyond the final date on which the decision is required to be made.". 
(b) The amendments made by subsection (a) of this section shall 49 USC 1371 
92 STAT. 1712 
PUBLIC LAW 95-504—OCT. 24, 1978 
apply to any application filed under section 401(b) of the Federal 
49 use 1371. 
Aviation Act of 1958 on or after the one-hundred-eightieth day after 
the date of enactment of this Act. 
(c) That portion of the table of contents contained in the first sec-
tion of such Act which appears under the side heading 
"Sec. 401. Certificate of public convenience and necessity." 
is amended by striking out 
"(c) Notice of application." 
and inserting in lieu thereof 
i 
"(c) Route applications." 
ISSUANCE OF CERTIFICATE 
SEC. 8. Paragraphs (1), (2), and (3) of section 401 (d) of the Fed-
eral Aviation Act of 1958 (49 U.S.C. 1371(d) (l)-(3)) are amended to 
read as follows: 
"(d) (1) The Board shall issue a certificate authorizing the whole or 
any part of the transportation covered by the application, if it finds 
that the applicant is fit, willing, and able to perform such transporta-
tion properly and to conform to the provisions of this Act and the 
rules, regulations, and requirements of the Board hereunder, and that 
such transportation— 
"(A) in the case of interstate or overseas air transportation, is 
; 
consistent with the public convenience and necessity; and 
"(B) in the case of foreign air transportation, is required by the 
public convenience and necessity; 
otherwise such application shall be denied. 
" (2) In the case of an application for a certificate to engage in tem-
porary air transportation, the Board may issue a certificate author-
izing the whole or any part thereof for such limited periods— 
"(A) in the case of an application for interstate or overseas air 
transportation, as is consistent with the public convenience and 
necessity; and 
"(B) in the case of an application for foreign air transporta-
tion, as may be required by the public convenience and necessity; 
if it finds that the applicant is fit, willing, and able properly to perform 
such transportation and to conform to the provisions of this Act and 
the rules, regulations, and requirements of the Board hereunder. 
"(3) In the case of an application for a certificate to engage in 
charter air transportation, the Board may issue a certificate to any 
I i.:, applicant, not holding a certificate under paragraph (1) or (2) of this 
subsection on January 1, 1977, authorizing interstate air transporta-
tion of persons, which authorizes the whole or any part thereof— 
"(A) in the case of an application for interstate or overseas air 
transportation, for such periods, as is consistent with the public 
convenience and necessity; and 
" (B) in the case of an application for foreign air transportation, 
for such periods, as may be required by the public convenience 
and necessity; 
if it finds that the applicant is fit, willing, and able properly to perform 
the transportation covered by the application and to conform to the 
provisions of this Act and the rules, regulations, and requirements of 
the Board hereunder.". 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1713 
THROUGH SERVICE AND JOINT FARES 
SEC. 9. Paragraph (4) of section 401(d) of the Federal Aviation 
Act of 1958 (49 U.S.C. 1371(d)(4)) is amended to read as follows: 
"(4)(xV) Notwithstanding any other provision of this Act, any 
citizen of the L^nited States who undertakes, within any State, the car-
riage of persons or property as a conunon carrier for compensation or 
hire with aircraft capable of carrying thirty or more persons pursuant 
to authority for such carriage within such State granted by the appro-
priate State agency is authorized— 
"(i) to establish services for persons and property which 
includes transportation by such citizen over its routes in such 
State and transportation by an air carrier or a foreign air carrier 
in air transportation; and 
"(ii) subject to the requirements of section 412 of this title, to 49 USC 1382. 
enter into an agreement with any air carrier or foreign air carrier 
for the establishment of joint fares, rates, or services for such 
through services. 
''(B) The joint fares or rates established under clause (ii) of sub-
paragraph (A) of this paragraph shall be the lowest of— 
"(i) the sum of the applicable fare or rate for service in the 
State approved by the appropriate State agency, and the appli-
cable fare or rate for that part of the through service provided 
by the air carrier or foreign air carrier; 
"(ii) a joint fare or rate established and filed in accordance 
with section 403 of this Act; or 
49 USC 1373. 
'"(iii) a joint fare or rate established by the Board in accord-
ance with section 1002 of this Act.". 
49 USC 1482. 
UNUSED AUTHORITY 
SEC. 10. (a) Section 401(d) of the Federal Aviation Act of 1958 
(49 U.S.C. 1371(d)) is amended by adding at the end thereof the 
following new paragraph: 
"(5) (A) Except as provided in subparagraphs (B) and (G) (i) of 
this paragraph, if an air carrier is authorized by its certificate to 
provide round trip service nonstop each way between any two points 
in the forty-eight contiguous States or between any tw^o points in 
overseas air transportation and if such air carrier fails to provide 
such service pursuant to published flight schedules at a minimum 
of five round trips per week for at least thirteen weeks during any 
twenty-six-week period (other than such a period during which serv-
ice was interrupted by a labor dispute which lasted more than six 
w^eeks) the last day of which ends on or after the date of enactment of 
this paragraph and if such service, at a minimum of five round trips 
per week, has been provided betw^een such points for at least thirteen 
weeks during such twenty-six-week period, pursuant to published 
flight schedules, by no more than one other air carrier, then the Board 
shall issue a certificate to the first applicant who, within thirty days 
after the last day of such twenty-six-week period, submits an appli-
cation which certifies that its aircraft meet all requirements estab-
lished by the Secretary of Transportation for the carriage by aircraft 
of persons or property as a common carrier for compensation or hire 
or the carriage of mail by aircraft in commerce and that it is able to 
conform to the rules, regulations, and requirements of the Board 
promulgated pursuant to this Act. 
39-194 O—80—pt. 2 
28 : QL3 
92 STAT. 1714 
PUBLIC LAW 95-504—OCT. 24, 1978 
"(B) Except as provided in subparagraph (G) (ii) of this para-
graph, if an air carrier is authorized to provide seasonal round trip 
service nonstop each way between any two points in the forty-eight 
contiguous States in interstate air transportation or between any two 
points in overseas air transportation and if such air carrier fails to pro-
vide such service pursuant to published flight schedules at a minimum 
of five round trips per week during half of the weeks during such sea-
son (other than such a season during which service was interrupted by 
a labor dispute which lasted more than 25 per centum of such season) 
the last day of which ends on or after the date of enactment of this 
paragraph and if such service, at a minimum of five round trips per 
week, has been provided between such points for at least half of the 
weeks during such season, pursuant to published flight schedules, by 
no more than one other air carrier, then the Board shall issue a certifi-
cate to the first applicant who, within thirty days after the last day of 
such season, submits an application which certifies that its aircraft meet 
all requirements established by the Secretary of Transportation for 
the carriage by aircraft of persons or property as a common carrier for 
compensation or hire or the carriage of mail by aircraft in commerce 
and that it is able to conform to the rules, regulations, and requirements 
of the Board promulgated pursuant to this Act. 
Final order. 
"(C) With respect to any application which is submitted pursuant to 
subparagraph (A) or (B) of this paragraph, except as provided in 
subparagraph (G), the Board shall issue a final order granting such 
certificate within fifteen days of the date of such application. 
"(D) Except as provided in subparagraphs (E) and (G) (i) of this 
paragraph, if an air carrier is authorized by its certificate to provide 
round trip service nonstop each way betw^een any two points in the 
forty-eight contiguous States or between any two points in overseas 
air transportation and if such air carrier fails to provide such service 
pursuant to published flight schedules at a minimum of five round trips 
per week for at least thirteen weeks during any twenty-six-week period 
(other than such a period during which service was interrupted by a 
labor dispute which lasted more than six weeks) the last day of which 
ends on or after the date of enactment of this paragraph and if such 
service, at a minimum of five round trips per week, has been provided 
between such points for at least thirteen weeks during such twenty-six-
week period, pursuant to published flight schedules, by two or more 
other air carriers, then the Board, subject to subparagraph (F) of this 
paragraph, shall issue a certificate to the first applicant who, within 
thirty days after the last day of such twenty-six-week period, submits 
an application which certifies that its aircraft meet all requirements 
established by the Secretary of Transportation for the carriage by air-
craft of persons or property as a common carrier for compensation or 
hire or the carriage of mail by aircraft in commerce and that it is able 
to conform to the rules, regulations, and requirements of the Board 
promulgated pursuant to this Act. 
"(E) Except as provided in subparagraph (G) (ii) of this para-
graph, if an air carrier is authorized to provide seasonal round trip 
service nonstop each way between any two points in the forty-eight 
contiguous States in interstate air transportation or between any two 
points in overseas air transportation and if such air carrier fails to 
provide such service pursuant to published flight schedules at a mini-
mum of five round trips per week during half of the weeks during such 
season (other than such a season during which service was interrupted 
by a labor dispute which lasted more than 25 per centum of such sea-
^r^^v^".! f 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1715 
son) the last day of which ends on or after the date of enactment of 
this paragraph and if such service, at a minimum of five round trips 
per week, has been provided between such points for at least half of the 
weeks during such season, pursuant to published flight schedules, by 
two or more other air carriers, then the Board, subject to subpara-
graph (F) of this paragraph, shall issue a certificate to the first appli-
cant who, within thirty days after the last day of such season, submits 
an application which certifies that its aircraft meet all requirements 
established by the Secretary of Transportation for the carriage by air-
craft of persons or property as a common carrier for compensation or 
hire or the carriage of mail by aircraft in commerce and that it is able 
to conform to the rules, regulations, and requirements of the Board 
promulgated pursuant to this Act. 
"(F) (i) Except as provided in subparagraph (G) of this para-
graph, with respect to any application which is submitted pursuant 
to subparagraph (D) or (E) of this paragraph, the Board shall issue 
a final order granting such certificate within sixty days of the date of 
such application, unless the Board finds that the issuance of such 
certificate is inconsistent with the public convenience and necessity. 
Prior to issuing such final order, the Board shall afford adequate Notice, 
notice and opportunity for interested persons to file appropriate writ-
ten evidence and argument, but the Board need not hold oral eviden-
tiary hearings. 
"(ii) For purposes of clause (i) of this subparagraph, there shall 
be a rebuttable presumption that any transportation covered by an 
application for a certificate submitted pursuant to subparagraph (D) 
or (E) of this paragraph is consistent with the public convenience 
and necessity. 
"(G) (i) if, after the failure of any air carrier to provide the mini- Notice, 
mum level of service between any pair of points for the period of time 
specified in subparagraph (A) or (D) of this paragraph and before 
the Board receives an application from any applicant for a certificate 
under such subparagraph to provide air transportation between such 
points, the Board receives notice from such air carrier that it intends 
to commence service within thirty days of such notice and to provide 
a minimum of five round trips per week for thirteen consecutive weeks 
between such points and the Board has not previously received notice 
from such air carrier with respect to such points, the Board shall not 
approve such application for a certificate to provide service between 
such points during such thirteen-week period based upon such failure, 
unless such air carrier fails to provide such service during such 
thirteen-week period. 
"(ii) If, after the failure of any air carrier to provide the minimum 
level of service between any pair of points for the period of time speci-
fied in subparagraph (B) or (E) of this paragraph and before the 
Board receives an application from any applicant for a certificate 
under such subparagraph to provide air transportation between such 
points, the Board receives notice from such air carrier that it intends 
to commence service within fifteen days of the first day of the next 
season and to provide a minimum of five round trips per week for the 
first half of such season between such points and the Board has not 
previously received notice from such air carrier with respect to such 
points, the Board shall not approve such application for a certificate 
to provide service between such points during the first half of such 
period based upon such failure, unless such air carrier fails to provide 
such service during the first half of such period. 
92 STAT. 1716 
PUBLIC LAW 95-504—OCT. 24, 1978 
"(H) (i) Whenever the Board issues a certificate pursuant to sub-
paragraph (A) or (D) of this paragraph, the air carrier receiving 
such certificate shall commence service pursuant to such certificate 
Revocation of 
within forty-five days of such issuance. If such air carrier fails to 
certificate. 
commence service within such period, the Board shall revoke such 
certificate. 
"(ii) Whenever the Board issues a certificate pursuant to subpara-
graph (B) or (E) of this paragraph to provide seasonal service, the 
air carrier receiving such certificate shall commence service pursuant 
to such certificate within fifteen days after the beginning of the first 
Revocation of 
such season which begins on or after the date of such issuance. If such 
certificate. 
air carrier fails to commence service within such period, the Board 
shall revoke such certificate. 
"(I) Not more than one certificate shall be issued under this para-
graph for round trip nonstop service between two points in inter-
state air transportation based upon the failure of the same air carrier 
to provide such service between such points. 
"(J) Whenever the Board issues a certificate pursuant to sub-
paragraph (A) of this paragraph based upon the failure of any air 
carrier to provide the round trip service described in such subpara-
graph, the Board shall suspend the authority of such air carrier to 
provide such service, and suspend the authority of any other air 
carrier which failed to provide such service during the same twenty-
six-week period for twenty-six weeks after the date of issuance of 
such certificate pursuant to subparagraph (A), or until such time 
within such twenty-six weeks as the air carrier to which a certificate 
is issued under such subparagraph fails to provide such service at 
a minimum of five round trips per week for at least thirteen weeks, 
whichever first occurs, except that the Board shall not suspend the 
authority of such air carriers under this subparagraph if the Board 
finds that such suspension is not necessary to encourage continued 
service between such points by the air carrier which received a certifi-
cate under subparagraph (A).". 
(b) Section 401(f) of such Act is amended by striking out "herein-
after provided" and inserting in lieu thereof "provided in this section". 
FILL-UP RIGHTS 
SEC. 11. Section 401(d) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371(d)) is further amended by adding at the end thereof the 
following new paragraph: 
"(6) Any air carrier holding a valid certificate to engage in foreign 
air transportation is authorized, on any scheduled flight in foreign 
air transportation, to transport persons, property, and mail between 
points in the United States between which it is authorized to operate 
during such flight. The authority described in the preceding sentence 
shall be limited to one round-trip flight per day between any such pair 
of points, unless the Board authorizes more than one round-trip flight 
per day between any such pair of points.". 
AUTOMATIC MARKET ENTRY PROGRAM 
SEC. 12. Section 401(d) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371(d)) is further amended by adding at the end thereof the 
following new paragraph: 
"(7) (A) After the first business day of each of the calendar years 
1979. 1980, and 1981 and before the thirtieth day of such calendar 
year— 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1717 
"(i) any air carrier which (I) has operated during the preced-
ing calendar year in accordance with a certificate issued by the 
Board under this section which has been in force during such 
entire preceding calendar year, and (II) has provided air trans-
portation of persons during such calendar year; and 
"(ii) any intrastate air carrier which has a valid certificate or 
license issued by a State regulatory authority to engage in intra-
state air transportation and which has operated more than one 
hundred million available seat-miles in intrastate air transporta-
tion in the preceding calendar year; 
may apply to the Board for a certificate under this subparagraph to 
engage in nonstop service between any one pair of points in interstate 
or overseas air transportation (other than a pair of points either point 
of which is in the State of Hawaii) in addition to any pair of points 
authorized by any existing certificate or license held by such air car-
rier or intrastate air carrier, except that no air carrier may apply to 
engage in nonstop service between such pair of points if any air car-
rier has filed written notice to the Board pursuant to subparagraph 
(C) of this paragraph with respect to such pair of points. Not later 
than the sixtieth day after the date on which the Board receives an 
application from an applicant under this subparagraph, the Board 
shall issue a certificate to such applicant for the nonstop service speci-
fied in such application, unless within such sixty-day period the Board 
determines that tlie applicant is not fit, willing, and able to provide 
such nonstop service and to conform to the provisions of this Act and 
the rules, regulations, and requirements of the Board issued under 
this Act. 
"(B) Not later than the one-hundred-twentieth day of calendar 
year 1979, 1980, or 1981, any air carrier which submitted an applica-
tion to the Board in accordance with subparagraph (A) of this para-
graph in such calendar year and— 
"(i) which did not receive a certificate to provide service 
between the pair of points set forth in the application because of a 
determination by the Board nnder such subparagraph (A); or 
"(ii) which received a certificate to provide service between 
such pair of points, but was not the only air carrier to receive a 
certificate under such subparagraph (A) during such calendar 
year to provide nonstop service between such pair of points; 
may reapply to the Board for a certificate to engage in nonstop service 
between any one pair of points in interstate or overseas air transporta-
tion (other than the pair of points specified in the first application 
submitted to the Board by such air carrier in such calendar year and 
other than a pair of points either point of which is in the State of 
Hawaii) in addition to any pair of points authorized by any existing 
certificate or license held by such air carrier or intrastate aii" carrier, 
except that no air carrier may apply to engage in nonstop service 
between such pair of points if any air carrier has filed written notice 
to the Board pursuant to subparagi-aph (C) of this paragraph with 
respect to such pair of points. Not later than the sixtieth day after 
the date on Avhich the Board receives an application under this sub-
paragraph, the Board shall issue a certificate to the applicant for such 
nonstop service, unless within such sixty-day period the Board makes 
a determination with respect to the issuance of such certificate in 
accordance with the second sentence of subparagraph (A) of this para-
graph. If the Board issues a certificate to an applicant under this 
subparagraph, it shall revoke any authority in any certificate which 
it granted to such applicant in the same calendar year under subpara-
graph (A) of this paragraph. 
92 STAT. 1718 
PUBLIC LAW 95-504—OCT. 24, 1978 
Written notice. 
Ante, p. 1712. 
Public 
availability. 
Program 
modification. 
Study of 
procedure. 
49 u s e 1302. 
Ante, p. 1712. 
"(C) (i) Subject to clause (ii) of this subparagraph, any air carrier 
which is authorized pursuant to paragraph (1) or (2) of this subsec-
tion to engage in nonstop service between any pair of points in inter-
state or overseas air transportation on the first business day of 
calendar year 1979, 1980, or 1981 and which wants to preclude any 
other air carrier from obtaining authority under subparagraph (A) or 
(B) of this paragraph to engage in nonstop service between such pair 
of points during such calendar year may, on such day, file written notice 
to the Board which sets forth such pair of points. Upon receipt of 
any written notice under the preceding sentence, the Board shall make 
such notice available to the public. 
" (ii) No air carrier may file a written notice under clause (i) of this 
subparagraph during any calendar year with respect to more than one 
pair of points in interstate or overseas air transportation. 
" (D) (i) The Board shall, on an emergency basis, by rule, modify the 
program established by this paragraph, if the Board finds that— 
" (I) the operation of such program is causing substantial public 
harm to the national air transportation system, or a substantial 
reduction in air service to small and medium sized communities in 
any region of the country; 
"(II) the modification proposed by the Board is required by 
the public convenience and necessity in order to alleviate such 
harm or reduction; and 
"(III) such harm or reduction identified by the Board cannot 
be rectified by any reasonably available means other than the modi-
fication proposed by the Board. 
Any emergency modification proposed by the Board under this sub-
paragraph shall modify such program only to the minimum extent nec-
essary to rectify the harm or reduction identified by the Board. 
Any emergency modification of such program may be limited to any 
pair of points. 
"(ii) The findings of fact by the Board in any proceeding held pur-
suant to this subparagraph, if supported by substantial evidence, shall 
be conclusive, No objection to a modification of the program proposed 
by the Board under this subparagraph shall be considered by a court 
unless such objection shall have been submitted to the Board, of if it 
was not so submitted, unless there were reasonable grounds for failure 
to do so. 
"(E) The Board shall conduct a study of the procedure for certifi-
cation of air carriers and intrastate air carriers set forth in subpara-
graphs (A) and (B) of this paragraph to evaluate— 
"(i) whether such procedure is consistent with the criteria set 
forth in section 102 of this Act; and 
"(ii) the relative effectiveness of such procedure as compared 
with other procedures for certification set forth in this Act, includ-
ing but not limited to, the procedures set forth in paragraphs (5) 
and (6) of this subsection and in subsection (p) of this section. 
Not later than December 31,1980, the Board shall complete such study 
and report the results of such study to the Congress.". 
EXPERIMENTAIi CERTIFICATES 
i 
SEC. 13. Section 401(d) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371(d)) is further amended by adding at the end thereof the 
following new paragraph: 
"(8) The Board may grant an application under subsection (d) (1), 
(2), or (3) of this section (whether the application be for permanent 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1719 
or temporary authority) for only a temporary period of time whenever 
the Board determines that a test period is desirable in order to deter-
mine if projected services, efficiencies, methods, rates, fares, charges, or 
other projected results will in fact materialize and remain for a sus-
tained period of time, or to assess the impact of the new services on the 
national air route structure, or otherwise to evaluate the proposed new 
services. In any case where the Board has issued a certificate under any 
one of such subsections on the basis that the air carrier holding such 
certificate Avill provide innovative or low-priced air transportation 
under such certificate, the Board, upon petition, or its own motion, may 
review the performance of such air carrier, and may alter, amend, 
modify, suspend, or revoke such certificate or authority in accordance 
with the procedures prescribed in section 401(g) of this title, on the 49 USC 1371. 
grounds that such air carrier has not provided, or is not providing, 
such air transportation.-'. 
DETERMINATIONS FOR ISSUANCE OF CERTIFICATES 
> • 
SEC. 14. Section 401(d) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371(d)) is further amended by adding at the end thereof the 
following new paragraph: 
"(9) (A) In any determination as to whether or not any applicant 
is fit, willing, and able to perform properly the air transportation 
specified in the application for a certificate described in paragraph 
(1) (A), (2) (A), or (3) (A) of this subsection and to conform to the Ante, p. 1712. 
provisions of this Act, the applicant shall have the burden of showing 
that it is so fit, willing, and able. 
"(B) In any determination as to whether the air transportation 
specified in any application for a certificate described in paragraph 
(1) (A), (2) (A), or (3) (A) of this subsection is or is not consistent 
with the public convenience and necessity, an opponent of the applica-
tion shall have the burden of showing that such air transportation is 
not consistent w^th the public convenience and necessity. 
"(C) Transportation covered by any application for a certificate 
described in paragraph (1) (A), (2) (A), or (3) (A) of this subsection 
shall, for the purposes of such paragraphs, be deemed to be consistent 
with the public convenience and necessity, unless the Board finds based 
upon a preponderance of the evidence that such transportation is not 
consistent with the public convenience and necessity.". 
TERMS AND CONDITIONS OF CERTIFICATES 
SEC. 15. (a) Paragraph (3) of section 401(e) of the Federal Avia-
tion Act of 1958 (49 U.S.C. 1371(e) (3)) is amended by striking out 
"supplemental air transportation" and inserting in lieu thereof "for-
eign charter air transportation". 
(b) Paragraph (4) of section 401(e) of such Act is amended by 
striking out the semicolon and all that follows down through the period 
and inserting in lieu thereof a period. 
(c) Paragraph (6) of section 401(e) of such Act is amended by 
striking out "supplemental air carrier" and inserting in lieu thereof 
"charter air carrier". 
REMOVAL o r 
RESTRICTIONS 
SEC. 16. Section 401(e) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371 (e)) is further amended by adding at the end thereof the 
following new paragraph: 
92 STAT. 1720 
PUBLIC LAW 95-504—OCT. 24, 1978 
"(7) (A) On and after the date of enactment of this paragraph, the 
Board shall not attach a closed-door restriction to any certificate 
issued under this section. Any closed-door restriction attached to any 
certificate issued before such date shall, on and after such date, have 
no force or effect. This subparagraph shall not apply to (i) a closed-
door restriction applicable to air transportation between two points 
both of which are in the State of Hawaii, or (ii) a closed-door restric-
tion in effect on such date which resulted from a sale, exchange, or 
transfer by any air carrier of its authority to provide air transporta-
tion to another air carrier. 
"(B) Upon application of any air carrier seeking removal or modifi-
cation of a term, condition, or limitation attached to a certificate issued 
under this section to engage in interstate, overseas, or foreign air trans-
portation, the Board shall, within sixty days after the filing of such 
application, set such application for oral evidentiary hearings on the 
record or begin to consider such application under the simplified 
procedures established by the Board in regulations pursuant to sub-
section (p) of this section for purposes of eliminating or modifying 
any such term, condition, or limitation which it finds is inconsistent 
49 use 1302. 
with the criteria set forth in section 102 of this Act. Applications 
under this paragraph shall not be subject to dismissal pursuant to 
Ante, p. 1711. 
section 401 (c) (1) of this Act. 
"Closed-door 
"(C) For purposes of this paragraph, the term 'closed-door restric-
restriction." 
tion' means any condition attached to a certificate to provide inter-
state or overseas air transportation issued to any air carrier under 
this section which prohibits such air carrier from providing local 
passenger service between any pair of points between which it is 
authorized to operate pursuant to such certificate.". 
EFFECTIVE DATE AND DURATION OF CERTIFICATE 
SEC. 17. Section 401(f) of the Federal Aviation Act of 1958 (49 
U.S.C. 1371(f)) is amended by striking out "ceased:" and all that 
follows down through the period and inserting in lieu thereof 
"ceased.". 
AUTHORITY TO MODIFY, SUSPEND, OR REVOKE 
SEC. 18. The first sentence of section 401 (g) of the Federal Aviation 
Act of 1958 (49 U.S.C. 1371 (g)) is amended by inserting "or pursuant 
to the simplified procedures under subsection (p) of this section" 
after "notice and hearings". 
TERMINATIONS, REDUCTIONS, AND SUSPENSIONS OF SERVICE 
SEC. 19. (a) Section 401 (j) of the Federal Aviation Act of 1958 
is amended to read as follows: 
" T E R M I N A T I O N S , REDUCTIONS, AND SUSPENSIONS OF SERVICE 
" (j) (1) No air carrier holding a certificate issued under this section 
shall— 
"(A) terminate or suspend all air transportation which it is 
providing to a point under such certificate; or 
"(B) reduce any such air transportation below that which the 
Board has determined to be essential air transportation for such 
point; 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1721 
unless such air carrier has first given the Board, any community Notice. 
affected, and the State agency of the State in which such community 
is located, at least 90 days notice of its intent to so terminate, suspend, 
or reduce such air transportation. The Board may, by regulation 
or otherwise, authorize such temporary suspension of service as may 
be in the public interest. 
"(2) If an air carrier holding a certificate issued pursuant to section 
401 of this Act proposes to terminate or suspend nonstop or single- 49 USC 1371. 
plane air transportation between two points being provided by such 
air carrier under such certificate, and such air carrier is the only air 
carrier certificated pursuant to such section 401 providing nonstop 
or single-plane air transportation between such points, at least sixty 
days before such proposed termination or suspension, such air carrier 
shall file with the Board and serve upon each community to be directly 
affected notice of such termination or suspension.". 
(b) That portion of the table of contents contained in the first 
section of such Act which appears under the side heading 
"Sec. 401. Certificate of public convenience and necessity." 
is amended by striking out 
"(j) Application for abandonment." 
and inserting in lieu thereof 
"(j) Terminations, reductions, and suspensions of service.". 
ADDITIONAL POWERS AND DUTIES OF BOARD WITH RESPECT TO 
CHARTER AIR CARRIERS 
SEC. 20. (a) The center heading for section 401 (n) of the Federal 49 USC 1371. 
Aviation Act of 1958 is amended by striking out "SUPPLEMENTAL" and 
inserting in lieu thereof "CHARTER". 
(b) Paragraphs (1) through (4) of section 401 (n) of such Act are 
amended to read as follows: 
"(n) (1) No air carrier providing air transportation under a cer-
tificate issued under this section shall commingle, on the same flight, 
passengers being transported in interstate or overseas charter air 
transportation with passengers being transported in scheduled inter-
state or overseas air transportation, except that this subsection shall 
not apply to the carriage of passengers in air transportation under 
group fare tariffs. 
"(2) No rule, regulation, or order issued by the Board shall restrict 
the marketability, flexibility, accessibility, or variety of charter trips 
provided under a certificate issued under this section except to the 
extent required by the public interest, and shall in no event be more 
restrictive than those regulations regarding charter air transportation 
in effect on October 1,1978. 
" (3) Notwithstanding any other provision of this title, no certificate 
issued under this section shall authorize the holder thereof to provide 
charter air transportation between two points within the State of 
Alaska unless, and then onljr to the extent to which, the Board, in issu-
ing or amending such certificate, may authorize after determining 
that such charter air transportation is required by the public con-
venience and necessit}^. This subsection shall not apply to a certificate 
issued under this section to a person who, before July 1, 1977, main-
tained its principal place of business within the State of Alaska and 
conducted air transport operations between points within the State 
of Alaska with aircraft having a certificated gross takeoff weight of 
more than 40,000 pounds. 
92 STAT. 1722 
PUBLIC LAW 95-504—OCT. 24, 1978 
- 
"(4) No certificate issued under this section shall permit a charter 
air carrier to sell or offer for sale an inclusive tour in air transportation 
by selling or offering for sale individual tickets directly to members 
of the general public, or to do so indirectly by controlling, being con-
trolled by, or under common control with, a person authorized by the 
Board to make such sales.". 
49 use 1371. 
(c) Paragraph (5) of section 401 (n) of such Act is amended— 
(1) in the first sentence, by striking out "a supplemental air 
carrier to comply with the provisions of paragraph (1), (3), or 
(4) of this subsection" and inserting in lieu thereof "a charter 
air carrier to comply with the provisions of subsection (q) or (r) 
of this section"; and 
(2) in the last sentence, by striking out "paragraphs (1), (3), 
and (4) of this subsection" and inserting m lieu thereof "sub-
sections (q) and (r) of this section". 
(d) (1) Section 401 of such Act is amended by adding at the end 
thereof the following new subsections: 
a 
INSURANCE AND LIABILITY 
"(q) (1) No certificate shall be issued or remain in effect unless the 
applicant for such certificate or the air carrier, as the case may be, 
complies with regulations or orders issued by the Board governing the 
filing and approval of policies of insurance or plans for self-insurance 
in the amount prescribed by the Board which are conditioned to pay, 
within the amount of such insurance, amounts for which such appli-
cant or such air carrier may become liable for bodily injuries to or the 
death of any person, or for loss of or damage to property of others, 
resulting from the operation or maintenance of aircraft under such 
certificate. 
" (2) In order to protect travelers and shippers by aircraft operated 
by certificated air carriers, the Board may require any such air car-
rier to file a performance bond or equivalent security arrangement, 
in such amoimt and upon such terms as the Board shall prescribe, to 
be conditioned upon such air carrier's making appropriate compensa-
tion to such travelers and shippers, as prescribed by the Board, for 
failure on the part of such carrier to perform air transportation serv-
ices in accordance with agreements therefor. 
"CONTINUING REQUIREMENT 
"(r) The requirement that each applicant for a certificate or any 
other authority under this title must be found to be fit, willing, and 
able to perform properly the transportation covered by its application 
and to conform to the provisions of this Act and the rules, regulations, 
and requirements of the Board under this Act, shall be a continuing 
requirement applicable to each such air carrier with respect to the 
Notice and 
transportation authorized by the Board. The Board shall by order, 
hearing. 
entered after notice and hearing, modify, suspend, or revoke such 
certificate or other authority, in whole or in part, for failure of such 
air carrier to comply with the continuing requirement that the air 
carrier be so fit, willing, and able, or for failure to file such reports as 
the Board may deem necessary to determine whether such air carrier 
is so fit, willing, and able.". 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1723 
(2) That portion of the table of contents contained in the first sec-
tion of such Act which appears under the side heading 
"Sec. 401. Certificates of public convenience and necessity." 
r . 
is amended— 
(A) by striking out 
"(n) Additional powers and duties of Board with respect to supple-
mental air carriers." 
and inserting in lieu thereof 
"(n) Additional powers and duties of Board with respect to charter 
air carriers."; 
and 
(B) by adding at the end thereof 
., 
"(q) Insurance and liability, 
"(r) Continuing requirement.". 
PROCEDURES FOR PROCESSING APPLICATIONS 
SEC. 21. (a) (1) Section 401 of the Federal Aviation Act of 1958 (49 
U.S.C. 1371) is amended by adding at the end thereof the following 
new subsection: 
" P R O C E D U R E S F O R PROCESSING APPLICATIONS FOR CERTIFICATES 
"(p) (1) The Board shall promulgate rules establishing simplified Rules, 
procedures for— 
"(A) the disposition of applications for a certificate to engage 
in air transportation pursuant to subsection (d) (1), (2), or (3) 
of this section; and 
Ante, p. 1712. 
"(B) the alteration, amendment, modification, suspension, or 
transfer of all or any part of any certificate pursuant to subsection 
(f), (g), or (h) of this section. 
_ 
49 USC 1371. 
Such rules shall provide for adequate notice and an opportunity for 
any interested person to file appropriate written evidence and argu-
ment, but need not provide for oral evidentiary hearings. Such rules 
may provide that such written evidence and argument shall be filed 
by such person as part of a protest or memorandum filed with respect 
to such application under subsection (c) of this section. 
" (2) The Board may use such simplified procedures in any case if the 
Board determines that the use of such simplified procedures is in the 
public interest. The rules adopted by the Board pursuant to this sub-
section shall, to the extent the Board finds it practicable, set forth the 
standards it intends to apply in determining whether to employ such 
simplified procedures, and in deciding cases in which such procedures 
are employed.". 
(2) That portion of the table of contents contained in the first section 
of such Act which appears under the side heading 
"Sec. 401. Certificate of public convenience and necessity." 
is amended by inserting at the end thereof 
" (p) Procedures for processing applications for certificates.". 
(b) (1) Section 402 of the Federal Aviation Act of 1958 (49 U.S.C. 
1372) is amended by adding at the end thereof the following new sub-
section : 
92 STAT. 1724 
PUBLIC LAW 95-504—OCT. 24, 1978 
"PROCEDURES FOR PROCESSING APPLICATIONS rOR PERMITS 
Rules. 
"(h) The Board shall promulgate rules establishing simplified pro-
cedures for— 
"(1) the disposition of applications for a permit to engage in 
foreign air transportation pursuant to this section; and 
"(2) the alteration, amendment, modification, suspension, or 
transfer of all or any part of any permit pursuant to subsection 
(f) of this section. 
Notice. 
Such rules shall provide for adequate notice and an opportunity for 
all interested persons to file appropriate written evidence and argu-
ment, but need not provide for oral evidentiary hearings.". 
(2) That portion of the table of contents contained in the first sec-
tion of such Act which appears under the side heading 
"Sec. 402. Permits to foreign air carriers." 
is amended by inserting at the end thereof 
"(h) Procedures for processing applications for permits.". 
NOTICE OF TARIFF CHANGES 
SEC. 22. Section 403(c) of the Federal Aviation Act of 1958 (49 
U.S.C. 1373 (c)) is amended to read as follows: 
u 
NOTICE OF TARIFF CHANGES 
"(c) (1) Except as provided in paragraph (2) of this subsection, no 
change shall be made in any rate, fare, or charge, or any classification, 
rule, regulation, or practice affecting such rate, fare, or charge, or 
the value of the service thereunder, specified in anj^ effective tariff 
•
, 
; 
of any air carrier until thirty days after notice of the proposed change 
has been filed, posted, and published in accordance with subsection (a) 
of this section, except the Board may establish an alternative notice 
- • ' 
requirement, of not less than twenty-five days, to allow an air carrier 
to match the fares or charges specified in another air carrier's pro-
posed tariff. Any notice specified under this subsection shall plainly 
state the change proposed to be made and the time such change will 
take effect. 
"(2) If the effect of any proposed tariff change would be to insti-
tute a fare that is outside of the applicable range of fares specified in 
subparagraphs (A) and (B) of section 1002(d)(4) of this Act, or 
specified by the Board under section 1002(d) (7) of this Act, or would 
be to institute a fare to which such range of fares does not apply, then 
such proposed change shall not be implemented except after sixty 
days' notice filed in accordance with regulations prescribed by the 
Board. 
"(3) In exercising its power to suspend tariffs under sections 
49 use 1482. 
1002(g) and 1002(j) of this Act, the Board shall file and deliver a 
statement in writing of its reasons for such suspension, as required 
under section 1002(g), at least thirty days before the date on which 
the affected tariff would otherwise go into effect.". 
RATES OF CARRIAGE FOR PERSONS AND PROPERTY 
SEC. 23. Section 404(a) (1) of the Federal Aviation Act of 1958 (49 
U.S.C. 1374(a) (1)) is amended by inserting "authorized to engage in 
scheduled air transportation by certificate or by exemption under sec-
49 use 1386. 
tion 416 (b) (3) of this title" immediately before the first semicolon. 
•-V »-««i^a^»^"'^ 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1725 
3IAIL AND COMPENSATION 
SEC. 24. (a) (1) Clause (3) of the second sentence of section 406(b) 
of the Federal Aviation Act of 1958 (49 U.S.C. 1376(b)) is amended 
to read as follows: " (3) the need of each such air carrier (other than a 
charter air carrier) for compensation for the transportation of mail 
'^'.r* 
sufficient to insure the performance of such service, and— 
"(A) durino; the period beginning on the date of enactment of 
this clause and ending on January 1, 1983, both dates inclusive, 
together with all other revenue of the air carrier from the service 
for which the compensation is being paid; and 
"(B) after January 1, 1983, together with all other revenue of 
the air carrier; 
to enable such air carrier under honest, economical, and efficient man-
agemeiit, to provide (except for modifications wdth respect to an indi-
vidual point determined after January 1, 1983, to be required by the 
public interest, after giving interested parties an opportunity for an 
evidentiary hearing with respect to air transportation for such individ-
ual point) air transportation of at least the same extent, character, and 
quality as that provided during the year ending December 31, 1977, to 
maintain and continue the development of air transportation to the 
extent and of the character and quality required for the commerce of 
the L'nited States, the Postal Service, and the national defense.". 
(2) Section 406(b) of the Federal Aviation Act of 1958 is amended 
by inserting after the second sentence the following new sentences: 
''Xotwithstanding any other provision of this section, rates of compen-
sation paid to any carrier under this section for service performed 
between the date of enactment of this sentence and January 1, 1983, 
shall be based on the subsidy need of such carrier with respect to service 
performed to points for which such carrier was entitled to receive 
compensation for sei-ving during calendar year 1977. In the case of any 
local service carrier, such subsidy need shall be based on the adjusted 
eligible need of such carrier determined in a matter consistent with 
the provisions of Local Service Class Subsidy Kate VIII, with techni-
cal adjustments, and in the case of any other carrier receiving compen-
sation during the twelve months ended June 30,1978, such subsidy need 
shall be determined pursuant to the method in effect during the tAvelve 
months ended June 30, 1978. Any air carrier receiving compensation 
from the Board pursuant to this section which, before January 1,1986, 
terminates service to a point for which such compensation is paid shall 
not, if such service is resumed by such air carrier, be eligible for com-
pensation from the Board under this section for such service. Nothing 
in this subsection shall be construed as prohibiting any air carrier speci-
fied in the preceding sentence from applying for and receiving com-
pensation for such service under section 419 of this title.". 
(b) Subsection (c) of such section 406 (49 U.S.C. 1376(c)) is 
amended by adding at the end thereof the following new sentence: 
"The Board shall make no payments under this section for any services 
performed after January 1, 1986.". 
LOCAL SERVICE AIR CARRIER COMPENSATION 
SEC. 25. (a) The last sentence of section 406(b) of the Federal Avia-
tion Act of 1958 (49 U.S.C. 1376(b)) is amended as follows: 
(1) By striking out "the year 1966" and inserting in lieu thereof 
"the years 1964,1965, and 1966". 
92 STAT. 1726 
PUBLIC LAW 95-504—OCT. 24, 1978 
(2) By striking out "Rate III-A" and inserting in lieu thereof 
"Rates III and III-A". 
(3) By striking out "order E-23850 (44 CAB 637 et seq.)" and 
inserting in lieu thereof "orders E-21311 and E-23850 (41 CAB 
138 et seq. and 44 CAB 637 et seq.)". 
49 use 1376 
(b) Section 12(b) of Public Law 95-163, Ninety-fifth Congress, 
°*'*®- 
approved November 9, 1977, is amended by striking out "the year 
1966" and inserting in lieu thereof "the year 1964,1965, or 1966". 
MERGERS AND CONTROL 
SEC. 26. (a) Section 408 of the Federal Aviation Act of 1958 (49 
U.S.C. 1378) is amended as follows: 
(1) Subsection (a) of such section 408 (49 U.S.C. 1378(a)) is 
amended to read as follows: 
, 
. 
; » .> f 
" A C T S PROHIBITED 
"SEC. 408. (a) Except as provided in subsection (b) of this section, it 
shall be unlawful— 
" (1) for two or more air carriers, or for any air carrier and any 
other common carrier or any person substantially engaged in the 
business of aeronautics, to consolidate or merge their properties, 
or a substantial portion thereof, into one person for the ownership, 
management, or operation of the properties previously in separate 
ownerships; 
"(2) for any air carrier, any person controlling an air carrier, 
any other common carrier, or any person substantially engaged in 
the business of aeronautics, to purchase, lease, or contract to 
operate all or a substantial portion of the properties of any air 
carrier; 
"(3) for any air carrier or person controlling an air carrier to 
purchase, lease, or contract to operate all or a substantial portion 
of the properties of any person substantially engaged in the busi-
ness of aeronautics otherwise than as an air carrier; 
"(4) for any foreign air carrier or person controlling a foreign 
air carrier to acquire control in any manner whatsoever of any 
citizen of the United States substantially engaged in the business 
of aeronautics; 
" (5) for any air carrier or person controlling an air carrier, any 
other common carrier, or any person substantially engaged in the 
business of aeronautics to acquire control of any air carrier in any 
manner whatsoever; 
- 
"(6) for any air carrier or person controlling a certificated air 
carrier to acquire control, in any manner whatsoever, of any person 
substantially engaged in the business of aeronautics other than as 
an air carrier; or 
" (7) for any person to continue to maintain any relationship 
established in violation of any of the foregoing paragraphs of 
t i l l s SUll^SGCtlOIl • 
(2) Subsection (b) of such section 408 (49 U.S.C. 1378(b)) is 
amended to read as follows: 
u 
POWER OF BOARD 
"(b) (1) In any case in which one or more of the parties to a con-
solidation, merger, purchase, lease, operating contract, or acquisition 
of control, specified in subsection (a) of this section is an air carrier 
•"I****"" 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1727 
holding a valid certificate issued by the Board under section 401(d) of 
this section to engage in interstate or overseas air transportation, a Ante, p. 1712. 
foreign air carrier, or a person controlling, controlled by, or under 
common control with, such an air carrier or a foreign air carrier, the 
person seeking approval of such transaction shall present an applica-
tion to the Board, and, at the same time, a copy to the Attorney General 
and the Secretary of Transportation, and thereupon the Board shall 
notify the persons involved in the transaction and other persons known 
to have a substantial interest in the proceeding, of the manner in 
which the Board will proceed in disposing of such application. Unless, 
after a hearing, the Board finds that th^ transaction Avill not be con-
sistent with the public interest or that the conditions of this section 
will not be fulfilled, it shall, by order, approve such transaction, upon 
such terms and conditions as it shall find to be just and reasonable 
and with such modifications as it may prescribe, except the Board 
shall not approve such transaction— 
" (A) if it would result in a monopoly or would be in furtherance Monopolization, 
of any combination or conspiracy to monopolize or to attempt to 
monopolize the business of air transportation in any region of the 
United States; or 
"(B) the effect of which in any region of the United States may Competition, 
be substantially to lessen competition, or to tend to create a monop-
oly, or which in any other manner would be in restraint of trade, 
unless the Board finds that the anticompetitive effects of the pro-
posed transaction are outweighed in the public interest by the 
probable effect of the transaction in meeting significant transpor-
tation conveniences and needs of the public, and unless it finds 
that such significant transportation conveniences and needs may 
not be satisfied by a reasonably available alternative having, mate-
rially less anticompetitive effects. 
The party challenging the transaction shall bear the burden of provin/^r 
the anticompetitive effects of such transaction, and the proponents of 
the transaction shall bear the burden of proving that it meets the sig-
nificant transportation conveniences and needs of the public and that 
such conveniences and needs may not be satisfied by a less anticompeti-
tive alternative. 
" (2) In any case in which the Board determines that the transaction 
which is the subject of the application does not affect the control of an 
air carrier directly engaged in the operation of aircraft in air trans-
portation, and determines that neither the Attorney General, nor the 
Secretary, nor any other person disclosing a substantial interest in the 
transaction then currently is requesting a hearing, the Board, no sooner 
than 30 days after publication in the Federal Register of notice of the 
Board's intention to dispose of such application without a hearing (a 
copy of which notice shall be furnished by the Board to the Attorney 
General and the Secretary not later than the day following the date 
of such publication), may determine that the public interest does not 
require a hearing and, in accordance with the standards set forth in 
subparagraphs (A) and (B) of paragraph (1) of this subsection, by 
order, approve or disapprove such transaction. 
"(3) (A) In any case in which none of the parties to a consolidation, 
merger, purchase, lease, operating contract, or acquisition of control, 
specified in subsection (a) of this section, is an air carrier holding a 
valid certificate issued by the Board under section 401(d) of this title 
to engage in interstate or overseas air transportation, a foreign air 
carrier, or a person controlling, controlled by, or under common con-
trol with, such an air carrier or a foreign air carrier, any person seeking 
Notice. 
Publication 
in Federal 
Register. 
92 STAT. 1728 
PUBLIC LAW 95-504—OCT. 24, 1978 
approval of such transaction shall file with the Board not later than 
" ; 
the forty-fifth day before the effective date of such transaction, a state-
ment of its intent to enter into any of the prohibited acts set forth in 
Application 
subsection (a) of this section. The Board may, within forty-five days 
filing. 
after the date of such filing, require such person to file an application 
for approval pursuant to the requirements of paragraph (1) of this 
subsection if it finds either that the proposed transaction may monop-
olize, tend to monopolize, or otherwise restrain competition in air 
transportation in any section of the country or that the person may 
not be fit, willing, and able to properly perform the transportation 
authorized by any license which is a part of such transaction and to 
conform to the provisions of this Act and the rules, regulations, and 
requirements of the Board issued pursuant to this Act. Subject to 
subparagraph (B) of this paragraph, if the Board fails to require 
such person to file an application pursuant to such paragraph (1) 
within such forty-five days, the proposed transaction shall not be 
. :- . 
subject to subsection (a) of this section. 
" ( B ) If the Board determines that any transaction is not subject to 
subsection (a) of this section as a result of the last sentence of subpara-
graph (A) of this paragraph and such transaction received such statu-
tory exemption due to any fraud, misrepresentation, or omission of 
relevant and material facts, the Board may, pursuant to rules which it 
is authorized to prescribe, make such transaction subject to subsection 
(a) of this section.". 
49 use 1378. 
(b) Section 408 (c) of such Act is amended by inserting "any person 
controlling such air carrier," after "air carrier," the first place it 
appears in such subsection. 
INTERLOCKS 
SEC. 27. (a) Section 409 of the Federal Aviation Act of 1958 (49 
IJ.S.C. 1379) is amended by striking out the center heading of such 
section and the center heading for subsection (a) of such section and 
inserting in lieu thereof the following section center heading: 
"INTERLOCKING 
RELATIONSHIPS". 
(b) Section 409 of the Federal Aviation Act of 1958 is also amended 
by striking out "SEC. 409. ( a ) " and inserting in lieu thereof "SEC. 
409.". 
(c) Section 409 (as amended by subsections (a) and (b) of this sec-
tion) is amended as follows: 
(1) Paragraphs (1), (2), and (3) are each amended by striking 
out "is engaged in any phase of" and inserting in lieu thereof 
"is substantially engaged in the business of". 
(2) Paragraphs (4), (5), and (6) are each amended by striking 
out "engaged in any phase of" and inserting in lieu thereof "sub-
stantially engaged in the business of". 
Repeal. 
(d) Section 409(b) of the Federal Aviation Act of 1958 (49 TJ.S.C. 
1379 (b)) is hereby repealed. 
(e) That portion of the table of contents contained in the first section 
of the Federal Aviation Act of 1958 which appears under the center 
heading 
"TITLE IV—AIR CARRIER ECONOMIC REGULATION" 
is amended by striking out 
"Sec. 409. Prohibited interests. 
> 
"(a) Interlocldng relationships. 
"(b) Profit from transfer of securities." 
and inserting in lieu thereof 
"Sec. 409. Interlocking relationships.". 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1729 
AGREEMENTS 
SEC. 28. (a) Section 412(a) of the Federal Aviation Act of 1958 (49 
U.S.C. 1382(a)) is amended— 
(1) by inserting in the subsection center heading "AFFECTING 
FOREIGN AIR TRANSPORTATION" immediately after "AGREEMENTS"; 
and 
(2) by inserting "foreign" immediately after "affecting". 
(b) Section 412(b) of such Act is amended by inserting "affecting 
foreign air transportation" immediately after "agreement" each place 
it appears in such section. 
- ^ 
(c) Section 412 of such Act is further amended by adding at the end 
thereof the following new subsections: 
" F I L I N G 
A N D 
A P P R O V A L 
O F A G R E E M E N T S A F F E C T I N G INTERSTATE OR 
OVERSEAS AIR TRANSPORTATION 
"(c) (1) Any air carrier may file with the Board a true copy, or, if 
oral, a true and complete memorandum, of any contract or agreement 
(whether enforceable by provisions for liquidated damages, penalties, 
bonds, or otherwise), or a request for authority to discuss possible 
cooperative working arrangements, affecting interstate or overseas air 
transportation and in force on the effective date of this subsection, or 
thereafter entered into, or any modification or cancellation thereof, 
between such air carrier and any other air carrier, foreign air carrier, 
or other carrier. 
"(2) (A) The Board shall by order disapprove any contract, agree-
ment, or request filed pursuant to paragraph (1) of this subsection, 
whether or not previously approved by it, that it finds to be adverse 
to the public interest or in violation of this Act, and shall by order 
approve any contract, agreement, or request, or any modification or 
cancellation thereof, that it does not find to be adverse to the public 
interest, or in violation of this Act, except that.— 
"(i) the Board may not approve or, after periodic review, con-
tinue its approval of any such contract, agreement, or request, or 
any modification or cancellation thereof, which substantially 
reduces or eliminates competition, unless it finds that the contract, 
agreement, or request is necessary to meet a serious transportation 
need or to secure important public benefits and it does not find 
that such need can be met or such benefits can be secured by reason-
ably available alternative means having materially less anticom-
petitive effects; 
"(ii) the Board may not approve any contract or agreement 
between an air carrier not directly engaged in the operation of 
aircraft in air transportation and a common carrier subject to the 
Interstate Commerce Act, as amended, governing the compensa-
tion to be received by such common carrier for transportation 
services performed by it; and 
"(iii) the Board may not approve any such contract or agree-
ment, or any modification or cancellation thereof, that limits the 
level of capacity among air carriers in markets in which they 
compete, that fixes rates, fares, or charges between or among air 
carriers (except for joint rates, fares, or charges). 
"(B) In any proceeding before the Board involving the application 
of the standards set forth in subparagraph (A) (i) of this paragraph, 
the party opposing the proposed contract, agreement, or request shall 
have the burden of proving the reduction or elimination of competi-
tion, and the availability of alternative means having less anticompeti-
39-194 O—80—pt. 2—-29 : QL3 
92 STAT. 1730 
PUBLIC LAW 95-504—OCT. 24, 1978 
Written 
notice. 
Hearings. 
tive effects, and the party defending the proposed contract, agreement, 
or request shall have the burden of proving transportation need or 
public benefits. 
"(C) The findings required by subparagraph (A) (i) of this para-
graph, shall be included in any order of the Board approving or 
disapproving any contract or agreement, or any memorandum of any 
contract or agreement, or any modification or cancellation thereof, or 
any request. 
"PROCEEDINGS UPON 
FILING 
"(d) Upon the filing of any contract or agreement, or any modifica-
tion or cancellation thereof, or any request for authority to discuss 
possible cooperative working arrangements, pursuant to subsection 
(a) or (c) of this section, the Board, in accordance with regulations 
which it prescribes, shall provide to the Attorney General and the 
Secretary of Transportation written notice of, and an opportunity to 
submit written comments on, the filed document. The Board may, upon 
its own initiative or if requested by the Attorney General or such 
Secretary, hold a hearing, in accordance with regulations prescribed 
by the Board, to determine if a contract or agreement, or request for 
discussion authority, whether or not previously approved, is consistent 
with the provisions of this Act.". 
(d) That portion of the table of contents which appears under the 
side heading 
"Sec. 412. Pooling and other agreements." 
is amended by striking out 
i-
"(a) Filing of agreements required. 
' 
"(b) Approval by Board." 
• 
: 
and inserting in lieu thereof 
"(a) Filing of agreements affecting foreign air transportation 
required. 
"(b) Approval by Board. 
; V 
"(c) Filing and approval of agreements affecting interstate 
or overseas air transportation. 
"(d) Proceedings upon filing.". 
MUTUAL AID AGREEMENTS 
SEC. 29. (a) Section 412 of the Federal Aviation Act of 1958 (49 
U.S.C. 1382) is amended by adding at the end thereof the following 
new subsection: 
"MUTUAL AID AGREEMENTS 
"(e) (1) Notwithstanding any other provision of law, any mutual 
aid agreement between air carriers which was approved by the Board 
before the date of enactment of this subsection and which is in effect 
on such date of enactment shall be deemed disapproved and not in 
effect on and after such date of enactment. 
"(2) No air carrier shaU enter into any mutual aid agreement with 
any ottier air carrier, unless such air carrier files a true copy of such 
agreement with the Board and the Board approves such agreement 
pursuant to the provisions of this section. Notwithstanding subsection 
(c) of this section, the Board shall not approve any such agreement 
unless such agreement provides (A) that any air carrier will not 
receive payments for any period which exceed 60 per centum of the 
direct operating expenses during such period, (B) that benefits under 
the agreement are not payable for more than eight weeks during 
any labor strike, and that such benefits may not be for losses incurred 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1731 
during the first thirty days of any labor strike, and (C) that any 
party to such agreement will agree to submit the issues causing any 
labor strike to binding arbitiation pursuant to the Railway Labor 
Act if the striking employees request such binding arbitration. 
45 USC 151. 
" (3) For purposes of this subsection, the term— 
" (A) 'mutual aid agreement' means any contract or agreement "Mutual aid 
between air carriers which provides that any such air carrier will agreement." 
receive paymejits from the other air carriers which are parties to 
such contract or agreement for any period during which such 
air carrier is not engaging in air transportation, or is providing 
reduced levels of service in air transportation, due to a labor 
strike; and 
"(B) 'direct operating expenses' includes interest expenses but "Direct 
does not include depreciation or amortization expenses.". 
operating 
(b) That portion of the table of contents contained in the first sec- expenses." 
tion of the Federal Aviation Act of 1958 which appears under the 
side heading 
"Sec. 412. Pooling and other agreements." 
is amended by inseiting at the end thereof 
"(e) Mutual aid agreements.". 
ANTITRUST 
EXEMPTION 
SEC. 30. (a) Section 414 of the Federal Aviation Act of 1958 (49 
U.S.C. 1384) is amended to read as follows: 
"ANTITRUST EXEMPTION 
"SEC. 414. In any order made under section 408, 409, or 412 of this 
Act, the Board may, as part of such order, exempt any person affected 
by such order from the operations of the 'antitrust laws' set forth in 
subsection (a) of the first section of the Clayton Act (15 U.S.C, 12) to 
the extent necessary to enable such person to proceed with the trans-
action specifically approved by the Board in such order and those 
transactions necessarily contemplated by such order, except that the 
Board may not exempt such person unless it determines that such 
exemption is required in the public interest.". 
(b) That portion of the table of contents contained in the first 
section of such Act which appears under the center heading 
"TITLE IV—AIK CARRIER ECONOMIC REGULATION" 
is amended by striking out 
"Sec. 414. Legal restraints." 
and inserting in lieu thereof 
:• 
"Sec. 414. Antitrust exemption.". 
EXEMPTION 
AUTHORITY 
SEC. 31. (a) Section 416(b) (1) of the Federal Aviation Act of 1958 
(49 U.S.C. 1386(b) (1)) is amended to read as follows: 
49 USC 1378, 
1379, 1382. 
'EXEMPTIONS 
"(b) (1) Except as provided in paragraph (2) of this subsection, the 
Board, from time to time and to the extent necessary, may exempt from 
the requirements of this title or any provision thereof, or any rule. 
92 STAT. 1732 
PUBLIC LAW 95-504—OCT. 24, 1978 
regulation, term, condition, or limitation prescribed thereunder, any 
person or class of persons if it finds that the exemption is consistent 
with the public interest. 
49 use 1386. 
(b) Section 416(b) of such Act is amended by adding at the end 
thereof the following new paragraph: 
"(3) The Board may by order relieve foreign air carriers who are 
not directly engaged in the operation of aircraft in foreign air trans-
portation from the provisions of this Act to the extent and for such 
periods as such relief may be in the public interest.". 
COMMUTER EXEMPTION 
SEC. 32. Section 416(b) of the Federal Aviation Act of 1958 (49 
TJ.S.C. 1386(b)) is further amended by adding at the end thereof the 
following new paragraphs: 
"(4) Subject to paragraph (5) of this subsection, any air carrier in 
air transportation which provides (A) passenger service solely with 
aircraft having a maximum passenger capacity of less than fifty-six 
passengers, or (B) cargo service in air transportation solely with 
aircraft having a maximum payload capacity of less than eighteen 
thousand pounds, shall be exempt from the requirements of subsection 
49 use 1371. 
(a) of section 401 of this title, and of such other sections of this Act 
as may be prescribed in regulations promulgated by the Board, if such 
air carrier conforms to such liability insurance requirements and such 
other reasonable regulations as the Board shall from time to time 
adopt in the public interest. The Board may by regulation increase 
the passenger or property capacities specified in this paragraph when 
the public interest so requires. 
"(5) The exemption from section 401 of this title or any other 
requirement of this Act shall not apply to any air transportation by 
any air carrier between points both of which are in the State of Alaska, 
or one of which is in the State of Alaska and the other in Canada, 
unless such air carrier also holds authority to provide such air trans-
portation from the State of Alaska. 
"(6) Any air carrier operating within the State of Alaska pursuant 
to the exemption from section 401 of this title shall not be subject to 
any limitation, promulgated by the Board, on the number or location 
of points to be served by such air carrier, or any limitation on the 
frequency of service by such air carrier to points within such State, 
unless the Board, after a hearing, finds that the opefa.tion of such air 
carrier substantially impairs the ability of a certificated air carrier to 
provide the service authorized by its certificate, including but not 
limited to, the minimum service requirement for such State specified 
Infra. 
in Section 419(c)(2) of this title.". 
SMALL COMMUNITY AIR SERVICE 
SEC. 33. (a) Title IV of the Federal Aviation Act of 1958 is amended 
by adding at the end thereof the following new section. 
"SMALL COMMUNITY AIR SERVICE 
"GUARANTEED ESSENTIAL AIR TRANSPORTATION 
"Eligible point." 
"SEC. 419. (a) (1) For purposes of this subsection, the term 'eligible 
49 use 1389. 
point' means any point in the United States to which, on the date of 
enactment of this section, any air carrier— 
" (A) is providing service pursuant to a certificate issued to such 
carrier under section 401 of this title; or 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1733 
"(B) is authorized pursuant to such certificate to provide such 
service, but such service is suspended on such date of enactment. 
"(2) (A) With respect to each eligible point which on the date of 
enactment of this section is served by not more than one air carrier 
holding a certificate issued under section 401 of this title, not later 49 USC 1371. 
than the last day of the one-year period beginning on such date of 
enactment, the Board, after considering the views of any interested 
community and the State agency of the State in which such community 
is located, shall determine what is essential air transportation for such 
point. 
"(B) With respect to any eligible point which on the date of enact-
ment of this section is served by more than one air carrier holding a 
certificate issued under section 401 of this title and which thereafter 
receives service by not more than one such air carrier, not later than 
the last day of the six-month period beginning on the date on which 
the Board receives notice that service to such point will be provided by 
not more than one such air carrier, the Board, after considering the 
views of any interested community and the State agency of the State 
in which such community is located, shall determine what is essential 
air transportation to such point. 
"(C) The Board shall periodically review the determination of Review, 
what is essential air transportation to each eligible point, and may, 
based upon such review and consultations with any interested com-
munity and the State agency of the State in which such community is 
located, make appropriate adjustments as to what is essential air 
transportation to such point. 
"(3) No air carrier shall terminate, suspend, or reduce air trans-
portation to any eligible point below the level of essential air transpor-
tation established by the Board under paragraph (2) unless such air 
carrier— 
" (A) if such air carrier— 
"(i) holds a certificate issued under section 401 of this 
title, or 
"(ii) does not hold such a certificate, but is receiving com-
pensation pursuant to paragraph (5) of this subsection for 
service to such eligible point, 
has given the Board, the appropriate State agency or agencies, 
and the communities affected at least ninety days notice prior to 
such termination, suspension, or reduction; and 
"(B) if such air carrier does not hold such a certificate and is 
not receiving compensation pursuant to paragraph (5) of this 
subsection for service to such eligible point, has given the Board, 
the appropriate State agency or agencies, and the communities 
affected at least thirty days notice prior to such termination, 
suspension, or reduction. 
_ " (4) Whenever the Board determines that essential air transporta-
tion will not be provided to any eligible point without compensation— 
"(A) the Board shall provide notice that applications may be 
submitted by any air carrier which is willing to provide essential 
air transportation to such point for compensation under this sub-
section. In selecting an applicant to provide essential air trans-
portation to such point for compensation the Board shall, among 
other factors, specifically consider— 
"(i) the desirability of developing an integrated linear 
system of air transportation whenever such a system most 
adequately meets the air transportation needs of the communi-
ties involved; 
92 STAT. 1734 
PUBLIC LAW 95-504—OCT. 24, 1978 
49 use 1386. 
Compensation 
rate, 
establishment. 
Service 
extension. 
Ante, p. 1720. 
49 u s e 1376. 
Losses, 
compensation. 
49 use 1371. 
" (ii) the experience of the applicant in providing scheduled 
air service in the vicinity of the communities for which essen-
tial air transportation is proposed to be provided; and 
"(iii) notwithstanding the provisions of clause (ii), with 
respect to any eligible point in the State of Alaska, the experi-
ence of an applicant in providing scheduled air service, or 
significant patterns of nonscheduled air service pursuant to an 
exemption granted pursuant to section 416 of this title, in 
Alaska; and 
"(B) the Board shall establish, in accordance with the guidelines 
promulgated under subsection (d) of this section, a rate of com-
pensation 
to be paid 
for 
providing 
such 
essential 
air 
transportation. 
"(5) The Board shall make payments of compensation under this 
subsection at times and in a manner determined by the Board to be 
appropriate. The Board shall continue to pay compensation to any air 
carrier to provide essential air transportation to any eligible point 
only for so long as the Board determines it is necessary in order to 
maintain essential air transportation to such eligible point. 
"(6) Notwithstanding section 401 (j) of this title, if an air carrier 
has provided notice to the Board under paragraph (3) of such air 
carrier's intention to suspend, terminate, or reduce service to any eli-
gible point below the level of essential air transportation to such point, 
and if at the conclusion of the applicable period of notice the Board 
has not been able to find another air carrier to provide essential air 
transportation to such point, the Board shall require the carrier which 
provided such notice to continue such service to such point for an 
additional 30-day period, or until another air carrier has begun to 
provide essential air transportation to such point, whichever first 
occurs. If at the end of such 30-day period the Board determines that 
no other air carrier can be secured to provide essential air transporta-
tion to such eligible point on a continuing basis, either with or without 
compensation, then the Board shall extend such requirement for such 
additional 30-day periods (making the same determination at the end 
of each such period) as may be necessary to continue air transportation 
to such eligible point until an air carrier can be secured to provide 
essential air transportation to such eligible point on a continuing basis. 
" (7) (A) If any air carrier (i) which is providing air transportation 
to any eligible point, and (ii) which is receiving compensation under 
this subsection or under section 406 of this title for providing such air 
transportation to such point, is required by the Board to continue serv-
ice to such point beyond the date on which such air carrier would, but 
for paragraph (6) of this subsection, be able to suspend, terminate, or 
reduce service to such point below the level of essential air transporta-
tion to such point, then after such date such air carrier shall continue 
to receive such compensation until the Board finds another air carrier 
to provide essential air transportation to such point. 
"(B) If the Board requires an air carrier which holds a certificate 
issued under section 401 of this title and which is providing air trans-
portation to any eligible point without compensation pursuant to para-
graph (5) of this subsection or section 406 of this title to continue to 
provide essential air transportation to such point beyond the 90-day 
notice period after which, but for paragraph (6) of this subsection, 
such air carrier would be able to suspend, terminate, or reduce service 
to such point below essential air transportation for such point, then 
the Board shall compensate such air carrier for any losses that the air 
carrier incurs in complying with this subparagraph after the last day 
of such 90-day period, except that the Board shall not make any pay-
PUBLIC LAW 95-504^OCT. 24, 1978 
92 STAT. 1735 
ments under this subparagraph, to any trunk air carrier for service 
to such point after the last day of the one-year period beginning on 
the date on which any payment is made to such air carrier under this 
subparagraph for service to such point. 
"(C) If the Board requires an air carrier which does not hold a 
certificate issued under section 401 of this title, but which is providing 49 USC 1371. 
air transportation to any eligible point without compensation pursu-
ant to paragraph (5) of this subsection or section 406 of this title to 49 USC 1376. 
continue to provide essential air transportation to such point beyond 
the 30-day notice period after which, but for paragraph (6) of this 
subsection, such air carrier would be able to suspend, terminate, or 
reduce service to such point below essential air transportation for such 
point, then the Board shall compensate such air carrier for any losses 
that such air carrier incurs in complying with this paragraph after 
the last day of such 30-day period. 
"(9) During any period for which the Board requires any air 
carrier to continue providing air transportation to an eligible point 
which such air carrier has proposed to terminate, reduce, or suspend, 
the Board shall continue to make every effort to secure an air carrier 
to provide at least essential air transportation to such eligible point, 
on a continuing basis. 
"(10) Unless the Board has determined what is essential air trans- Petition, 
portation for any eligible point pursuant to paragraph (2) of this 
subsection, the Board shall, upon petition of any appropriate repre-
sentative of such point, prohibit any termination, suspension, or 
reduction of air transportation which reasonably appears to deprive 
such point of essential air transportation, until the Board has com-
pleted such determination. 
"(11) (A) After January 1,1983, any air carrier may file an applica-
tion with the Board seeking to have any compensation provided under 
section 406 of this title to the air carrier then serving an eligible point 
terminated in order to allow the applicant air carrier to provide air 
transportaton to that eligible point for compensation under this sec-
tion. The Board shall grant such application, after notice and a hear-
ing if requested by the air carrier receiving subsidy under section 406, 
taking into consideration the objectives specified in subparagraphs 
(A) (i) and (ii) of paragraph (5) of this subsection, if the applicant 
can show that termination of the compensation being paid under sec-
tion 406, and that the provision of service by such applicant with 
compensation under this section, will result in a substantial— 
" (i) improvement in the air service being provided such eligible 
point; and 
"(ii) decrease in the amount of compensation that will be 
required to continue essential air transportation to such eligible 
point. 
"(B) After January 1, 1983, any air carrier may file an application Application, 
with the Board seeking to have the compensation provided under this 
section to the air carrier then serving an eligible point, and which has 
been serving such eli^^ible point for at least two years preceding the date 
on which such application is filed, terminated in order to allow the 
applicant air carrier to provide essential air transportation to such 
eligible point for compensation under this section. The Board shall Notice and 
grant such application, after notice and a hearing if requested by an air hearing, 
carrier receiving compensation under this section, taking into con-
sideration the objectives specified in subparagraphs (A) (i) and (ii) of 
paragraph (4} of this subsection, if the applicant air carrier can show 
that termination of the compensation being provided to the air carrier 
Application. 
Notice and 
hearing. 
92 STAT. 1736 
PUBLIC LAW 95-504—OCT. 24, 1978 
then serving such eligible point, and the provision of essential air trans-
portation for compensation under tliis section by the applicant air 
carrier will result in a substantial— 
"(i) improvement in the air transportation being provided such 
eligible point with no increase in the amount of compensation then 
being paid; or 
"(ii) decrease in the amount of compensation that will be 
required to continue essential air transportation to that eligible 
point. 
"(C) In disposing of each application filed under this subsection, the 
Board shall, in addition to considering the objectives specified in sub-
paragraphs (A) (i) and (ii) of paragraph (4), solicit and give great 
weight to the opinions of the communities affected by the proposed 
replacement of an air carrier under this subsection. 
u 
Eligible point 
designation, 
rules. 
OTHER AIR SERVICE 
"Eligible point." 
"(b)(1) For purposes of this subsection, the term 'eligible point' 
means— 
"(A) any point in the United States which has been deleted 
49 use 1371. 
from a certificate issued under section 401 of this title between 
July 1, 1968, and the date of enactment of this section, both dates 
inclusive, and which the Board designates pursuant to paragraph 2 
of this subsection; and 
"(B) any other point in the State of Alaska or Hawaii desig-
nated by the Board under paragraph 2 of this subsection. 
"(2) (A) Not later than January 1,1980, after considering the views 
of State agencies and other interested parties, the Board shall, by rule, 
establish objective criteria for designating points as eligible points. In 
establishing or modifying such criteria, the Board shall consider, 
among other factors, the level of traffic generated by the point con-
cerned, its future traffic generating potential, the cost to the Federal 
Government of providing essential air transportation to such point, 
the alternative means of transportation available to the residents of 
such point for access to the national transportation system and its 
principal communities of interest, and the degree of isolation of such 
point from the national air transportation system. The Board may, 
from time to time, by rule, modify the criteria established by it under 
this subparagraph. 
"(B) Not later than January 1,1980, the Board shall begin to review 
each point described in paragraph (1)(A) of this subsection to 
determine whether such point shall be designated as an eligible point 
under the criteria established under subparagraph (B) of this para-
graph. The review and designation of each such point shall be com-
pleted before January 1,1982. 
"(C) On or after January 1, 1982, the Board, upon application by 
any interested party, may designate any point an eligible point under 
the criteria established under subparagraph (B) of this paragraph 
(i) if such point is in the State of Alaska or the State of Hawaii, and 
(ii) if such designation would not increase the total number of points 
49 use 1376. 
receiving a subsidy under this section and section 406 of this title above 
the total number of points receiving a subsidy under such section 406 
on July 1, 1968. 
Withdrawal. 
"(3) The designation of any point b^ the Board under paragraph 
(2) oi this subsection as an eligible point may be withdrawn if the 
point no longer meets the criteria for designation as an eligible point. 
Review. 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1737 
"(4) (A) With respect to any point which the Board designates as 
an eligible point pursuant to paragraph (2) of this subsection, not 
later than the last day of the six-month period beginning on the date 
on which the Board makes such designation, tlie Board, after consid-
ering the views of any interested community and the State agency of 
the State in which such community is located, shall determine what 
is essential air transportation to such point. 
"(B) The Board shall periodically review the determination of 
what is essential air transportation to each eligible point, and may, 
based upon such review and consultations with any interested com-
munity and any State agency of the State in which such community 
is located, make appropriate adjustments as to what is essential air 
transportation to such point. 
"(5) Whenever the Board determines that essential air transporta-
tion will not be provided to any eligible point without compensation— 
"(A) the Board shall provide notice that applications may be 
submitted by any air carrier which is willing to provide essential 
air transportation to such point for compensation under this sub-
section. In selecting an applicant to provide essential air trans-
portation to such point for compensation, the Board shall, among 
other factors, specifically consider— 
"(i) the desirability of developing an integrated linear 
system of air transportation whenever such a system most 
adequately meets the air transportation needs of the commu-
nities involved; 
"(ii) the experience of the applicant in providing sched-
uled air service in the vicinity of the communities for which 
essential air transportation is proposed to be provided; and 
"(iii) notwithstanding the provisions of clause (ii), with 
respect to any eligible point in the State of Alaska, the 
experience of an applicant in providing scheduled air service, 
or significant patterns of nonscheduled air service pursuant 
to an exemption granted pursuant to section 416 of this title, 
in Alaska; and 
"(B) the Board shall establish, in accordance with the guide-
lines promulgated under subsection (d) of this section, a rate of 
compensation to be paid for providing such essential air 
transportation. 
"(6) The Board shall make payments of compensation under this 
subsection at times and in a manner determined by the Board to be 
appropriate. The Board shall continue to pay compensation to any air 
carrier to provide essential air transportation to any eligible point only 
for so long as the Board determines it is necessary in order to maintain 
essential air transportation to such eligible point. 
"(7) Prior to terminating, suspending, or reducing essential air 
transportation to any eligible point, an air carrier— 
" (A) if such air carrier— 
"(i) holds a certificate issued under section 401 of this 
title, or 
"(ii) does not hold such a certificate, but is receiving com-
pensation pursuant to paragraph (6) of this subsection for 
service to such eligible point, shall give the Board, the appro-
priate State agency or agencies, and the communities affected 
at least ninety days notice prior to such termination, suspen-
sion, or reduction; and 
"(B) if such air carrier does not hold such a certificate and is 
not receiving compensation pursuant to paragraph (6) of this 
subsection for service to such eligible point, shall give the Board, 
Determination, 
consultation. 
Review. 
Notice. 
Applicant 
selection. 
49 u s e 1386. 
Compensation 
rate, 
establishment. 
Payments. 
Notice. 
49 u s e 1371. 
92 STAT. 1738 
PUBLIC LAW 95-504—OCT. 24, 1978 
Application. 
Notice and 
hearing. 
the appropriate State agency or agencies, and the communities 
affected such notice (not to exceed 30 days), as the Board shall 
by regulation prescribe. 
"(8) (A) After January 1,1983, any air carrier may file an applica-
tion with the Board seeking to have the compensation provided under 
this subsection to the air carrier then serving an eligible point, and 
which has been serving such eligible point for at least 2 years preceding 
the date on which such application is filed, terminated in order to allow 
the applicant air carrier to provide essential air transportation to such 
eligible point for compensation under this subsection. The Board shall 
grant such application, after notice and a hearing if requested by an 
air carrier receiving compensation under this section, taking into 
consideration the objectives specified in subparagraphs (A) (i) and 
(ii) of paragraph (5) of this subsection, if the applicant can show 
that termination of the compensation being provided to the air carrier 
then serving such eligible point, and that the provision of essential air 
transportation for compensation under this subsection by the appli-
cant, will result in a substantial— 
" (i) improvement in the air transportation being provided such 
eligible point with no increase in the amount of compensation then 
being paid; or 
"(ii) decrease in the amount of compensation that Avill be 
required to continue essential air transportation to that eligible 
point. 
"(B) In disposing of each application filed under this paragraph, 
the Board shall, in addition to considering the objectives specified in 
subparagraphs (A) (i) and (ii) of paragraph (5), solicit and give 
great weight to the opinions of the communities affected by the pro-
posed replacement of an air carrier under this subsection. 
u 
"Commuter air 
carrier." 
Ante, p. 1732. 
Compensation 
and 
service, 
conditions. 
Safety 
standard 
regulations. 
LEVEL o r 
SAFETY 
"(c)(1) For purposes of this subsection the term 'commuter air 
carrier' means an air carrier exempt from any requirement of this Act 
under section 416(b) (3) of this title. 
"(2) Notwithstanding section 416(b) of this title, the Board shall 
not provide an;^ compensation under this section to any commuter air 
carrier to provide service to any eligible point, and the Board shall 
prohibit any commuter air carrier from providing service to any 
eligible point, unless the Board determines that such commuter air 
carrier— 
"(A) is fit, willing, and able to perform such service; and 
" (B) that all aircraft which will be used to perform such service 
and all operations relating to such service will conform to the 
safety standards established by the Administrator under para-
graph (3) of this subsection. 
"(3) Not later than the one-hundred-eightieth day after the date of 
enactment of this paragraph, the Administrator, by regulation, shall 
establish safety standards (A) for aircraft being used by commuter 
air carriers to provide any service described in paragraph (2) of this 
subsection, and (B) for all operations relating to such service. Such 
safety standards shall become effective not later than the last day of 
the eighteenth month which begins after such date of enactment and 
shall impose requirements upon such commuter air carriers to assure 
that the level of safety provided to persons traveling on such commuter 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1739 
air carriers is, to the maximum feasible extent, equivalent to the level 
of safety provided to persons traveling on air carriers which provide 
service pursuant to certificates issued under section 401 of this title. 49 USC 1371. 
"GUIDKLTNES FOR COMPENSATION 
"(d) The Board shall, by rule, establish guidelines to be used by the Rule. 
Board in computing the fair and reasonable amount of compensation 
required to insure the continuation of essential air transportation to 
any eligible point. Such guidelines shall include expense elements based 
upon representative costs of air carriers providing scheduled air trans-
portation of persons, property, and mail, using aircraft of the type 
determined by the Board to be appropriate for providing essential air 
transportation to the eligible point. 
a 
INSURANCE 
"(e) No air carrier shall receive any compensation under this section 
unless such air carrier complies with regulations or orders issued by 
the Board governing the filing and approval of policies of insurance or 
plans for self-insurance in the amount prescribed by the Board which 
are conditioned to pay, within the amount of such insurance, amounts 
for which such air carrier may become liable for bodily injuries to or 
the death of any person, or for loss of or damage to property of others, 
resulting from the operation or maintenance of aircraft. 
a 
DEFINITION 
"(f) For purposes of this section, the term 'essential air transporta- "Essential air 
tion' means scheduled air transportation of persons to a point provided transportation, 
under such criteria as the Board determines satisfies the needs of the 
community concerned for air transportation to one or more com-
munities of interest and insures access to the Nation's air trans-
portation system, at rates, fares, and charges which are not imjust, 
unreasonable, unjustly discriminatory, unduly preferential, or unduly 
prejudicial, and— 
"(1) with respect to air transportation to any point (other than 
in the State of Alaska), in no case shall essential air transportation 
be specified as fewer than two daily round trips, 5 days per week, 
< 
or the level of service provided by air carriers to such point based 
on the schedules of STich air carriers in effect for calendar year 
1977, whichever is less; and 
"(2) with respect to air transportation to any point in Alaska, 
essential air transportation shall not be specified at a level of 
service less than that which existed for such point during calendar 
year 1976, or two round trips per week, whichever is greater, 
unless otherwise specified under an agreement between the Board 
and the State agency of the State of Alaska, after consultation 
with the community affected. 
"^ ; 
a. 
DURATION OF PR0GRA3I 
" (g) This section shall cease to be in effect after the last day of the 
ten-year period which begins on the date of enactment of this section.". 
(b) That portion of the table of contents Avhich appears under the 
center heading 
92 STAT. 1740 
PUBLIC LAW 95-504—OCT. 24, 1978 
"TITLE IV—AIR CAKRIEB ECONOMIC REGULATION 
is amended by adding at the end thereof 
"Sec. 419. Small community air service. 
"(a) Guaranteed essential air transportation. 
"(b) Other air service. 
"(c) Level of safety. 
"(d) Guidelines for compensation. 
"(e) Insurance. 
"(f) Definitions. 
"(g) Duration of program.". 
PRESIDENTIAL REVIEW OF INTERNATIONAL ROUTE CASES 
SEC. 34. Section 801(a) of the Federal Aviation Act of 1958 (49 
U.S.C. 1461 (a)) is amended to read as follows: 
"THE PRESIDENT OF THE UNITED STATES 
"SEC. 801. (a) The issuance, denial, transfer, amendment, cancella-
tion, suspension, or revocation of, and the terms, conditions, and limi-
tations contained in, any certificate authorizing an air carrier to engage 
in foreign air transportation, or any permit issuable to any foreign air 
49 use 1372. 
carrier under section 402 of this Act, shall be presented to the Presi-
Disapproval, 
dent for review. The President shall have the right to disapprove any 
issuance. 
such Board action concerning such certificates or permits solely upon 
the basis of foreign relations or national defense considerations which 
are within the President's jurisdiction, but not upon the basis of eco-
nomic or carrier selection considerations. Any such disapproval shall 
be issued in a public document, setting forth the reasons for the disap-
proval to the extent national security permits, within sixty days after 
submission of the Board's action to the President. Any such Board 
action so disapproved shall be null and void. Any such Board action 
not disapproved within the foregoing time limits shall take effect as 
action of the Board, not the President, and as such shall be subject to 
49 use 1486. 
judicial review as provided in section 1006 of this Act.". 
ASSESSMENT OF CIVIL PENALTIES 
Notice and 
SEC. 35. (a) Paragraph (1) of subsection (a) of section 901 of the 
hearing. 
Federal Aviation Act of 1958 (49 U.S.C. 1471(a) (1)) is amended by 
inserting after the fourth sentence thereof the following new sentences: 
"The amount of any such civil penalty for any violation of any pro-
49 use 1371. 
vision of title I V of this Act, or any rule, regulation, or order issued 
49 use 1482. 
thereunder, or under section 1002 (i) of this Act, or any term, condition, 
or limitation of any permit or certificate issued under title I V shall 
be assessed by the Board only after notice and an opportunity for a 
hearing and after written notice upon a finding of violation by the 
Board. Judicial review of any order of the Board assessing such a 
penalty may be obtained only pursuant to section 1006 of this Act.". 
Compromise. 
(b) Paragraph (2) of subsection (a) of such section 901 is amended 
to read as follows: 
"(2) Any civil penalty may be compromised by the Secretary of 
Transportation in the case of violations of title I I I , V, VI, or X I I 
49 use 1341, 
of this Act, or any rule, regulation, or order issued thereunder, or by the 
1401, 1421, 
National Transportation Safety Board in the case of violations of title 
1441. 
V I I of this Act, or any rule, regulation, or order issued thereunder, 
or by the Postmaster General in the case of regulations issued by him. 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1741 
Unjust or 
unreasonable 
fares, findings. 
The amount of such penalty when finally determined or fixed by order 
of the Board, or the amount agreed upon in compromise, may be 
deducted from any sums which the United States owes to the person 
charged.". 
PROCEDURES FOR CIVIL PENALTIES 
SEC. 36. (a) The first sentence of subsection (b) (1) of section 903 of 
the Federal Aviation Act of 1958 (49 U.S.C. 1473(b) (1)) is amended 
by inserting "or assessed" immediately after "imposed". 
(b) The second sentence of subsection (b) (1) of such section 903 is 
amended by inserting "with respect to proceedings involving penalties 
other than those assessed by the Board," immediately after "except 
that". 
RATES 
SEC. 37. (a) Subsection (d) of section 1002 of the Federal Aviation 
Act of 1958 (49 U.S.C. 1482 (d)) is amended— 
(1) in paragraph (1), by inserting "or (4)" immediately after 
"paragraph (2)"; and 
(2) by adding at the end thereof the following new paragraphs: 
"(4) The Board shall not have authority to find any fare for inter-
state or overseas air transportation of persons to be unjust or unreason-
able on the basis that such fare is too low or too high if— 
" (A) with respect to any proposed increase filed with the Board 
on or after July 1, 1979 (other than any proposed increase in any 
fare filed by any air carrier if such proposed fare is for air trans-
portation between any pair of points and such air carrier provides 
air transportation to 70 per centum or more of the persons travel-
ing in air transportation between such points on aircraft operated 
by air carriers with certificates issued under section 401 of this 
Act), such proposed fare would not be more than 5 per centum 49 USC 1371 
higher than the standard industry fare level for the same or essen-
tially similar class of service, except that, while no increase of 
any fare within the limits specified in this subparagraph may be 
suspended, an increase in such fare, above the standard industry 
fare level shall be found unlawful if that increase results in a fare 
which is unduly preferential, unduly prejudicial, or unjustly 
discriminatory; or 
"(B) with respect to any proposed decrease filed after the date 
of enactment of this paragraph, the proposed fare would not be 
more than 50 per centum lower than the standard industry fare 
level for the same or essentially similar class of service, except that 
this provision shall not apply to any proposed decrease in any fare 
if the Board determines that such proposed fare would be 
predatory. 
In determining whether any fare for air transportation of persons is 
unjust or unreasonable on the basis that it is too high, the Board shall 
take into consideration reasonably estimated or foreseeable future 
costs and revenues for a reasonably limited future period during which 
the fare at issue would be in effect. 
"(5) In any Board proceeding under paragraph (1) of this subsec-
tion with respect to interstate or overseas air transportation of persons, 
the party opposing any fare or charge on the basis that it is too low 
shall have the burden of proving that the fare or charge is too low. 
"(6) (A) For purposes of paragraph (4) of this section, 'standai-d 
industry fare level' means the fare level (as adjusted only in accord-
ance with subparagraph (B) of-this paragraph) in effect on July 1, 
1977, for each interstate or overseas pair of points, for each class of 
"Standard 
industry 
fare level." 
92 STAT. 1742 
PUBLIC LAW 95-504—OCT. 24, 1978 
Adjustments. 
Service 
classes, 
rules. 
Rule. 
Complaint. 
49 u s e 1482. 
49 u s e 1302. 
Uniform 
method. 
49 u s e 1482a. 
49 u s e 1371. 
Notice. 
service existing on that date, and in effect on the effective date of the 
establishment of each additional class of service established after 
July 1,1977. 
"(B) The Board shall, not less than semiannually, adjust each stand-
ard industry fare level specified in subparagraph (A) by increasing 
or decreasing such fare level, as the case may be, by the percentage 
change from the last previous period in the actual operating cost per 
available seat-mile for interstate and overseas transportation combined. 
In determining the standard, the Board shall make no adjustment to 
costs actually incurred. 
"(C) Not later than July 1,1979, the Board shall issue rules modify-
ing the rules governing those classes of service in existence on July 1, 
1977, which classes provide lower fare levels during off-peak periods, 
so as to expand the period of availability of such classes. The Board 
shall allow any air carrier to establish additional classes of service in 
accordance with the objectives of subsection (e) (5) of this section or 
as may be otherwise consistent with the public interest. 
"(7) The Board may by rule increase the percentage specified in 
paragraph (4) (B) of this subsection. 
"(8) Whenever a complaint is filed with the Board by a civic party 
under this subsection alleging that any individual or joint fare or 
charge demanded, charged, collected, or received for interstate or over-
seas air transportation is or will be unjustly discriminatory, unduly 
preferential, unduly prejudicial, or predatory, the Board shall grant, 
deny, or dismiss such complaint within ninety days after such com-
plaint is filed.". 
(b) Subsection (e) of such section 1002 is amended to read as 
follows: 
(( 
RULE o r RATEMAKING 
"(e) In exercising and performing its power and duties with respect 
to determining rates, fares, and charges described in paragraph (1) of 
subsection (d) of this section, the Board shall take into consideration, 
among other factors— 
"(1) the criteria set forth in section 102 of this Act; 
"(2) the need for adequate and efficient transportation of per-
sons and property at the lowest cost consistent with the furnishing 
of such service; 
"(3) the effect of prices upon the movement of traffic; 
"(4) the desirability of a variety of price and service options 
such as peak and off-peak pricing or other pricing mechanisms to 
improve economic efficiency and provide low-cost air service; and 
"(5) the desirability of allowing an air carrier to determine 
prices in response to particular competitive market conditions on 
the basis of such air carrier's individual costs.", 
(c) (1) Whenever the Board pursuant to its authority under section 
1002 of the Federal Aviation Act of 1958 (49 U.S.C. 1482) prescribes 
a uniform method generally applicable to the establishment of joint 
fares, and the divisions thereof, between air carriers holding certifi-
cates issued under section 401 of such Act, it shall make such uniform 
method applicable to the establishment of joint fares, and the divisions 
thereof, between such air carriers and commuter air carriers. Any 
commuter air carrier which has an agreement with any air carrier to 
provide service for persons and property which includes transporta-
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1743 
tion over its routes and transportation by such air carrier in air trans-
portation shall provide at least ninety days notice to such air carrier 
and to the Board prior to modifying, suspending, or terminating such 
service, and if such commuter air carrier fails to provide such notice, 
any uniform method made applicable to the establishment of joint 
fares, and the divisions thereof, between air carriers and commuter 
air carriers in accordance with the preceding sentence shall not apply 
to such commuter air carrier. 
(2) For purposes of this subsection— 
(A) the terms "air carrier" and "Board" have the meanings 
given such terms in the Federal Aviation Act of 1958; and 
(B) the term "commuter air carrier" means any air carrier 
operating pursuant to section 416(b) (3) of the Federal Aviation 
Act of 1958 (49 U.S.C. 1386(b) (3)) who operates at least five 
round trips per week between one pair of points, pursuant to 
flight schedules. 
(3) Paragraph (1) of this subsection shall apply to any uniform 
method described in such paragraph which the Board prescribes on 
or after December 27.1974. 
Definitions. 
49 u s e 1301 
note. 
TIME REQUIREMENTS 
SEC. 38. (a) Title X of the Federal Aviation Act of 1958 (49 U.S.C. 
1481 et seq.) is amended by adding at the end thereof the following 
new section: 
"TIME REQUIREMENTS 
"SEC. 1010. In the case of any application or other written document 
submitted to the Board under section 408, 409, 412, or 416 of this Act 
on or after the one-hundred-eightieth day after the date of enact-
ment of this section, the Board shall— 
"(1) if the Board orders an evidentiary hearing, issue a final 
order or decision with respect to such written document, not later 
than the last day of the twelfth month which begins after the 
submission of such document, except in the case of an application 
submitted under section 408 of this Act, the Board shall issue its 
final order or decision not later than the last day of the sixth 
month after submission; or 
"(2) if the Board does not order an evidentiary hearing, issue 
a final order or decision with respect to such document, not later 
than the last day of the sixth month which begins after the date 
of the submission of such document.", 
(b) That portion of the table of contents contained in the first sec-
tion of such Act which appears under the center heading 
"TITLE X—PROCEDURE" 
is amended by adding at the end thereof 
"Sec. 1010. Time requirements.". 
Final order 
or decision, 
issuance. 
49 u s e 1490. 
49 u s e 1378, 
1379, 1382. 
WITHHOLDING OP INFORMATION 
SEC. 39. Section 1104 of the Federal Aviation Act of 1958 (49 U.S.C. 
1504) is amended to read as follows: 
92 STAT. 1744 
^ 
PUBLIC LAW 95-504—OCT. 24, 1978 
" W I T H H O L D I N G OF I N F O R M A T I O N 
49 use 1504. 
"SEC. 1104. Any person may make written objection to the public 
disclosure of information contained in any application, report, or 
document filed pursuant to provisions of this Act or of any informa-
tion obtained by the Board, the Secretary of State, or the Secretary of 
Transportation pursuant to the provisions of this Act stating the 
grounds for such objection. Any information contained in such applica-
tion, report, or document, or any such other information obtained by 
the Board, the Secretary of State, or the Secretary of Transportation, 
shall be withheld from public disclosure by the Board, the Secretary 
of State, or the Secretary of Transportation, as the case may be, if 
disclosure of such information would prejudice the formulation and 
presentation of positions of the United States in international negotia-
tions and adversely affect the competitive position of any air carrier in 
foreign air transportation. The Board, the Secretary of State, or the 
Secretary of Transportation, as the case may be, shall be responsible 
for classified information in accordance with appropriate law, except 
that nothing in this section shall authorize the withholding of informa-
tion by the Board, the Secretary of State, or the Secretary of Trans-
portation from the duly authorized committees of Congress.". 
SUNSET PROVISIONS 
SEC. 40. (a) The Federal Aviation Act of 1958 (49 U.S.C. 1301 et 
seq.) is amended by adding at the end thereof the following new title: 
"TITLE XVI—SUNSET PROVISIONS 
"TERMINATION OF CIVIL AERONAUTICS BOARD AND TRANSFER OF 
CERTAIN FUNCTIONS 
"TERMINATION OF AUTHORITY 
49 use 1551. 
"SEC. 1601. (a) (1) The following provisions of this Act (to the 
extent such provisions relate to interstate and overseas air transporta-
tion of persons) and the authority of the Board with respect to such 
provisions (to the same extent) shall cease to be in effect on Decem-
ber 31, 1981: 
Ante, p. 1712. 
"(A) Sections 401(d) (1), (2), and (3) of this Act (insofar as 
such sections require a determination of consistency with the pub-
lic convenience and necessity and insofar as section 401 (d) (3) pro-
hibits persons holding certificates under section 401 (d)(1) or 
(d)(2) from obtaining certificates to provide interstate or overseas 
charter air transportation of persons). 
"(B) Section 401 (d) (8) of this Act. 
"(C) Section 401(e)(1) of this Act (insofar as such section 
permits the Board to specify terminal and intermediate points). 
"(D) Section 401 (j) of this Act (except with respect to essential 
air transportation). 
"(E) Sections 401(n) (1) and (4) of this Act. 
^ 
"(F) Section 404 (a) of this Act (insofar as such section requires 
any air carrier to provide air transportation authorized by its 
certificate). 
49 use 1375. 
" (Gr) Section 405 (b) of this Act (insofar as such section requires 
the filing of any statement or schedule by any air carrier). 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1745 
"(2) The following provisions of this Act (to the extent such provi-
sions relate to interstate and overseas air transportation of persons) 
and the authority of the Board with respect to such provisions (to 
the same extent) shall cease to be in effect on January 1,1983: 
" (A) Section 403 of this Act. 
"(B) Section 404 of this Act (except insofar as such section 
requires air carriers to provide safe and adequate service). 
"(C) Section 407 (b) and (c) of this Act. 
"(D) Sections 1002 (d)(1) and (d)(2), (e), (g), (h),and (i) 
of this Act. 
"(3) The authority of the Board under sections 408 and 409 of this 
Act (relating to interstate and overseas air transportation) and the 
authority of the Board under section 414 of this Act (relating to such 
sections 408 and 409) is transferred to the Department of Justice on 
January 1,1983. 
" (4) Title II of this Act shall cease to be in effect on January 1,1985. 
49 use 1373. 
49 use 1374. 
49 use 1377. 
Ante, p. 1741. 
49 use 1378, 
1379. 
49 use 1384. 
49 use 1321. 
"TRANSFER OF CERTAIN AUTHORITY 
"(b) (1) The following authority of the Board is transferred to the 
following Federal departments and instrumentalities: 
"(A) The authority of the Board under sections 406 (b) (3) and 
(c) of this Act to provide compensation for air transportation to Ante, p. 1725. 
small communities and under section 419 of this Act is transferred Ante, p. 1732. 
to the Department of Transportation. 
"(B) The authority of the Board under this Act with respect to 
foreign air transportation is transferred to the Department of 
Transportation which shall exercise such authority in consulta-
tion with the Department of State. 
"(C) The authority of the Board under sections 408 and 409 of 
this Act (relating to foreign air transportation), the authority 
of the Board under section 412 of this Act, and the authority of 49 USe 1382. 
the Board under section 414 of this Act (relating to such sections 
408, 409, and 412) is transferred to the Department of Justice. 
"(D) The authority of the Board under this Act with respect to 
the determination of the rates for the carriage of mails in inter-
state and overseas air transportation is transferred to the Postal 
Service and such authority shall be exercised through negotiations 
or competitive bidding. 
"(2) Any authority transferred under paragraph (1) of this sub-
section shall take effect on January 1,1985. 
'REPORT AND ASSESSMENT BY BOARD 
"(c) Not later than January 1, 1984, the Board shall prepare and 
submit to the Congress a comprehensive review of the Boai-d's imple-
mentation of the provisions of this Act during the preceding initial 
period of this Act's existence, and a comprehensive review of each of 
the Board's programs under this Act. Each such review shall be made 
available to the committee or committees of the Senate and House 
of Representatives having jurisdiction with respect to the annual 
authorization of funds for the Board and its programs for the fiscal 
year beginning October 1,1983. 
Review, 
submittal 
to eongress. 
39-194 O—80—pt. 2 
30 : QL3 
92 STAT. 1746 
PUBLIC LAW 95-504—OCT. 24, 1978 
'ELEMENTS OF BOARD CONSIDERATION 
Review 
provisions. 
Ante, p. 1713. 
49 u s e 1382. 
Continuation, 
opinion and 
recommenda-
tions. 
49 u s e 1461. 
"(d) The comprehensive review of the Board's implementation of 
this Act, prepared for submission under subsection (c), shall include— 
"(1) a detailed comparison of the degree of competition within 
the airline industry as of the year preceding enactment of this 
section and the final year covered by the review; 
"(2) a comparison of the degree of pricing competition in the 
industry during those two one-year periods; 
"(3) a comparison of the extent of unused authority held by the 
industry during those two one-year periods, with details as to the 
number of nonstop route segments which have been transferred 
from one carrier to another under section 401(d) (5) of his Act; 
"(4) an assessment of the degree to which agreements approved 
under section 412 of this Act have affirmatively or negatively 
affected the degree of competition within the industry; 
"(5) a comparison of the extent of air transportation service 
provided to small communities during the two one-year periods 
specified above, together with details as to the comparative sub-
sidy costs during these two periods; 
"(6) an assessment of the degree, if any, to which the adminis-
trative process has been expedited under this Act; 
"(7) an assessment of the impact of the foregoing changes upon 
the national air transportation system in terms of benefits or 
detriments to the traveling and shipping public, the Postal Serv-
ice, and the national defense, and the benefits and detriments to 
air carriers, certificated and uncertificated; and 
"(8) the Board's opinion as to whether the foregoing changes 
in combination, have improved or harmed this Nation's domestic 
air transportation system and the United States-flag foreign air 
transportation system. 
This assessment shall be accompanied by a detailed opinion from the 
Board as to whether the public interest requires continuation of the 
Board and its functions beyond January 1, 1985, and, if it is the 
Board's conclusion that it should continue to exist, detailed recom-
mendations as to how the provisions of this Act should be revised to 
insure continued improvement of the Nation's air transportation 
system beyond January 1, 1985. The Board's assessment under this 
subsection shall also be accompanied by a comparative analysis of 
procedures under section 801 of this Act before and after the date 
of enactment of the Airline Deregulation Act of 1978, together with 
the Board's opinion as to the benefits of each set of procedures. 
"ELEMENTS FOR EACH COMPREHENSIVE REVIEW 
"' (e) Each comprehensive review of the Board's programs under this 
Act, prepared for submission under subsection (c) of this section, 
shall include— 
"(1) an identification of the objectives intended for the pro-
gram, and the problem or need which the program was intended 
to address; 
"(2) an identification of any other programs having similar 
or potentially conflicting or duplicative objectives; 
PUBLIC LAW 95-504—OCT. 24, 1978 
. 
92 STAT. 1747 
"(3) an assessment of alternative methods of achieving the 
purposes of the program; 
" (4) a justification for the authorization of new budget author-
ity, and an explanation of the manner in which it conforms to 
and integrates with other efforts; 
"(5) an assessment of the degree to which the original objec-
tives of the program have been achieved, expressed in terms of the 
performance, impact, or accomplishments of the program and 
of the problem or need which it was intended to address, and 
employing the procedures or methods of analysis appropriate to 
the type or character of the program; 
"(6) a statement of the performance and accomplishments of 
the program in each of the previous four completed fiscal years 
and in the year of submission, and of the budgetary costs incurred 
,.. , 
in the operation of the program; 
"(7) a statement of the number and types of beneficiaries or 
persons or entities by the program; 
"(8) an assessment of the effect of the program on the national 
economy, including, but not limited to, the effects on competition, 
economic stability, employment, unemployment, 
productivity, 
energy consumption and conservation, and price inflation, includ-
ing costs to consumers and to businesses; 
"(9) an assessment of the impact of the program on the 
Nation's health and safety; 
"(10) an assessment of the degree to which the overall admin-
istration of the program, as expressed in the rules, regulations, 
orders, standards, criteria, and decisions of the officers executing 
the program, are believed to meet the objectives of the Congress 
in enacting this Act; 
"(11) a projection of the anticipated needs for accomplishing 
the objectives of the program, including an estimate if applicable 
of the date on which, and the conditions under which, the program 
may fulfill such objectives; 
"(12) an analysis of the services which could be provided and 
performance which could be achieved if the program were con-
tained at a level less than, equal to. or greater than the existing 
level; and 
" (13) recommendations for necessary transitional requirements 
in the event that funding for such program is discontinued, 
including proposals for such executive or legislative action as may 
be necessary to prevent such discontinuation from being unduly 
disruptive.", 
(b) That portion of the table of contents contained in the first sec-
tion of such Act is amended by inserting at the end thereof 
"TITLE XVI—SUNSET PROVISIONS 
"SEC. 1601. Termination of Civil Aeronautics Board and transfer of certain 
functions. 
" (a) Termination of authority. 
"(b) Transfer of certain authority. 
"(c) Report and assessment by Board. 
"(d) Elements for Board consideration. 
"(e) Elements for each comprehensive review.". 
92 STAT. 174« 
PUBLIC LAW 95-504—OCT. 24, 1978 
Air carrier 
airport 
designation. 
49 use 1729. 
49 
use 
1371. 
49 
use 
1711. 
AMENDMENTS TO THE AIRPORT AND AIRWAY DEVELOPMENT ACT 
OF 1970 
SEC. 41. (a) Section 29 of the Airport and Airway Development Act 
of 1970 is amended— 
(1) by striking out "Notwithstanding" and inserting in lieu 
thereof the following: 
"(a) SERVICE BY INTRASTATE AIR CARRIER.—Notwithstanding"; and 
(2) by inserting at the end thereof the following new subsection: 
"(b) SUSPENDED OR DELETED SERVICE.—Notwithstanding any other 
provision of this title, any public airport which, on the date of enact-
ment of the Airline Deregulation Act of 1978, is regularly served by 
an air carrier (other than a charter air carrier) certificated by the 
Civil Aeronautics Board under section 401 of the Federal Aviation 
Act of 1958 shall be deemed to be an air carrier airport (other than 
a commuter service airport) for the purposes of this title. This 
subsection shall cease to be in effect after September 30,1980.". 
(b) Paragraph (1) of section 11 of the Airport and Airway Devel-
opment Act of 1970 is amended by striking out "(other than a supple-
mental air carrier)" and inserting in lieu thereof " (other than a charter 
air carrier)", 
Definitions. 
49 use 1324 
note. 
49 use 1301. 
GOVERNMENT GUARANTEE OF EQUIPMENT LOANS 
SEC. 42. (a)(1) The first sentence of the first section of the Act 
entitled "An Act to provide for Government guarantee of private 
loans of certain air carriers for purchase of modern aircraft and 
equipment, to foster the development and use of modern transport 
aircraft by such carriers, and for other purposes", approved Septem-
ber 7, 1957 (49 U.S.C. 1324 note) (hereinafter in this section referred 
to as the "Act"), is amended by inserting "and to promote the develop-
ment of local, feeder, and short-haul charter air transportation of 
cargo" after "and short-haul air transportation". 
(2) The second sentence of the first section of the Act is amended 
by inserting ", charter air carriers, commuter air carriers, and intra-
state air carriers" immediately after "air carriers", 
(b) Section 2 of the Act is amended to read as follows: 
"SEC. 2. As used in this Act— 
"(1) 'aircraft purchase loan' means any loan, or commitment 
in connection therewith, made for the purchase of commercial 
transport aircraft, including spare parts normally associated 
therewith; 
"(2) 'air carrier" means any air carrier holding a certificate of 
public convenience and necessity issued by the Civil Aeronautics 
Board under section 401(d)(1) of the Federal Aviation Act of 
1958 (49 U.S.C. 1371(d)(1)); 
"(3) 'charter air carrier' has the meaning given such term in 
section 101 (14) of the Federal x\viation Act of 1958; 
"(4) 'charter air transportation' has the meaning given such 
term in section 101(15) of the Federal Aviation Act of 1958; 
"(5) 'commuter air carrier' means any air carrier operating 
pursuant to section 416(b)(3) of the Federal Aviation Act of 
1958 (49 U.S.C. 1386(b) (3)) who operates at least five round trip 
flights per week between one pair of points in accordance with 
published flight schedules; 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1749 
"(6) 'intrastate air carrier' means any citizen of the United 
States who undertakes, whether directly or indirectly or by a 
lease or any other arrangement, to engage primarily in intrastate 
air transportation (as such term is defined in section 101(26) of 
the Federal Aviation Act of 1958); and 
"(7) 'Secretary' means the Secretary of Transportation.". 
(c) Section 3 of the Act is amended to read as follows: 
"SEC. 3. The Secretary is authorized to guarantee any lender against 
loss of principal or interest on any aircraft purchase loan made by 
such lender to— 
"(1) any air carrier whose certificate (A) authorizes such air 
carrier to provide local or feeder air service, (B) authorizes 
scheduled passenger operations the major portion of which are 
conducted within the State of Hawaii, (C) authorizes operations 
(the major portion of which is conducted either within Alaska 
or between Alaska and the forty-eight contiguous States), within 
the State of Alaska (including service between Alaska and the 
forty-eight contiguous States, and between Alaska and adjacent 
Canadian territory), or (D) authorizes metropolitan helicopter 
service, 
"(2) any charter air carrier for the purchase of any all-cargo 
nonconvertible aircraft, 
"(3) any commuter air carrier, or 
" (4) any intrastate air carrier. 
Such guarantee shall be made in such form, on such terms and con-
ditions, and pursuant to such regulations, as the Secretary deems nec-
essary and which are not inconsistent with the provisions of this Act.". 
(d) Section 4 of the Act is amended to read as follows: 
"SEC. 4. (a) Subject to subsection (b) of this section, no guaranty 
shall be made— 
" (1) extending to more than the unpaid interest and 90 percent 
of the unpaid principal of any loan; 
" (2) on any loan or combination of loans for more than 90 per-
cent of the purchase price of the aircraft, including spare parts, 
to be purchased therewith; 
"(3) on any loan whose terms permit full repayment more than 
15 years after the date thereof; 
"(4) wherein the total face amount of such loan, and of any 
other loans to the same air carrier, charter air carrier, commuter 
air carrier, or intrastate air carrier or corporate predecessor of 
such air carrier, charter air carrier, commuter air carrier, or intra-
state air carrier guaranteed and outstanding under the terms of 
this Act exceeds $100,000,000; 
"(5) unless the Secretary finds that, without such guaranty, in 
the amount thereof, the air carrier, charter air carrier, commuter 
air carrier, or intrastate air carrier would be unable to obtain 
necessary funds for the purchase of needed aircraft on reasonable 
terms; 
"(6) unless the Secretary finds that the aircraft to be purchased 
with the guaranteed loan is needed to improve the service and effi-
ciency of operation of the air carrier, charter air carrier, commuter 
air carrier, or intrastate air carrier; 
"(7) unless the Secretary finds that the prospective earning 
power— 
49 use 1301. 
Eligible 
lenders. 
49 use 1324 
note. 
Restrictions. 
49 use 1324 
note. 
92 STAT. 1750 
PUBLIC LAW 95-504—OCT. 24, 1978 
Termination 
date. 
49 use 1324 
note. 
Ante, p. 1749. 
Payment by 
Labor 
Secretary. 
49 use 1552. 
Eligibility. 
"(A) of the applicant air carrier or charter air carrier, 
together with the character and value of the security pledged, 
furnish (i) reasonable assurances of the applicant's ability to 
repay the loan within the time fixed therefor, and (ii) reason-
able protection to the United States; and 
"(B) of the applicant commuter air carrier or intrastate air 
carrier, together with the character and value of the security 
pledged, furnish (i) reasonable assurances of the applicant's 
ability and intention to repay the loan within the time fixed 
therefor, to continue its operations as a commuter air carrier 
or intrastate air carrier, and to the extent found necessary by 
the Secretary, to continue its operations as a commuter air 
carrier or intrastate air carrier between the same route or 
routes being operated by such applicant at the time of the loan 
guarantee, and (ii) reasonable protection to the United 
States; and 
" (8) on any loan or combination of loans for the purchase of any 
new turbojet-powered aircraft which does not comply with the 
noise standards prescribed for new subsonic aircraft in regulations 
issued by the Secretary acting through the Administrator of the 
Federal Aviation Administration (14 CFR part 36), as such regu-
lations were in effect on January 1,1977. 
"(b) No guaranty shall be made by the Secretary under subsection 
(a) of this section on any loan for the purchase of any all-cargo 
nonconvertible aircraft by any charter air carrier in an amount which, 
together with any other loans guaranteed and outstanding under this 
Act to such charter air carrier, or corporate predecessor of such charter 
air carrier, would result in the ratio of the total face amount of such 
loans to $100,000,000 exceeding the ratio of the amount of charter air 
transportation of such charter air carrier provided to medium, small, 
and non-hub airports during the twelve-month period preceding the 
date on which the application for such guaranty is made by such 
charter air carrier to the total amount of charter air transportation of 
such charter air carrier during such twelve-month period.", 
(e) Section 8 of the Act is amended to read as follows: 
"SEC. 8. The authority of the Secretary under section 3 of this Act 
shall terminate five years after the date of enactment of this section.". 
EMPLOYEE PROTECTION PROGRAM 
SEC. 43. (a). GENERAL RULE.— (1) The Secretary of Labor shall, 
subject to such amounts as are provided in appropriation Acts, make 
monthly assistance payments, or reimbursement payments, in amounts 
computed according to the provisions of this section, to each individual 
who the Secretary finds, upon application, to be an eligible protected 
employee. An eligible protected employee shall be a protected employee 
who on account of a qualifying dislocation (A) has been deprived of 
employment, or (B) has been adversely affected with respect to his 
compensation. 
(2) No employee who is terminated for cause shall receive any assist-
ance under this section. 
(b) MONTHLY ASSISTANCE COMPUTATION.— (1) An eligible protected 
employee shall, subject to such amounts as are provided in appropria-
tion Acts, receive a monthly assistance payment, for each month in 
which he is an eligible protected employee, in an amount computed by 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1751 
the Secretary. The Secretary, after consultation with the Secretary 
of Transportation, shall, by rule, promulgate guidelines to be used 
by him in determining the amount of each monthly assistance pay-
ment to be made to a member of each craft and class of protected 
employees, and what percentage of salary such payment shall consti-
tute for each applicable class or craft of employees. In computing 
such amounts for any individual protected employee, the Secretary 
shall deduct from such amounts the full amount of any unemployment 
compensation received by the protected employee. 
(2) If an eligible protected employee is offered reasonably compa-
rable employment and such employee does not accept such employ-
ment, then such employee's monthly assistance payment under this 
section shall be reduced to an amount which such employee would 
have beeen entitled to receive if such employee had accepted such 
employment. If the acceptance of such comparable employment would 
require relocation, such employee may elect not to relocate and, in lieu 
of all other benefits provided herein, to receive the monthly assistance 
payments to which he would be entitled if this paragraph were not in 
effect, except that the total number of such payments shall be the lesser 
of three or the number remaining pursuant to the maximum provided 
in subsection (e). 
(c) ASSISTANCE FOR RELOCATION.—If an eligible protected employee 
relocates in order to obtain other employment, such employee shall, 
subject to such amounts as are provided in appropriation Acts, receive 
reasonable moving expenses (as determined by the Secretary) for 
himself and his immediate family. In addition, such employee shall, 
subject to such amounts as are provided in appropriation Acts, receive 
reimbursement payments for any loss resulting from selling his prin-
cipal place of residence at a price below its fair market value (as deter-
mined by the Secretary) or any loss incurred in cancelling such 
employee's lease agreement or contract of purchase relating to his 
principal place of residence. 
(d) DUTY To HIRE PROTECTED EMPLOYEES.— (1) Each person who 
is a protected employee of an air carrier which is subject to regulation 
by the Civil Aeronautics Board who is f 
urloughed or otherwise termi-
nated by such an air carrier (other than for cause) prior to the last 
day of the 10-year period beginning on the date of enactment of this 
section shall have first right of hire, regardless of age, in his occu-
pational specialty, by any other air carrier hiring additional employees 
which held a certificate issued under section 401 of the Federal Avia-
tion Act of 1958 prior to such date of enactment. Each such air carrier 
hiring additional employees shall have a duty to hire such a person 
before they hire any other person, except that such air carrier may 
recall any of its own furloughed employees before hiring such a per-
son. Any employee who is furloughed or otherwise terminated (other 
than for cause), and who is hired by another air carrier under the pro-
visions of this subsection, shall retain his rights of seniority and right 
of recall with the air carrier that furloughed or terminated him. 
(2) The Secretary shall establish, ma;intain, ttnd periodically pub-
lish a comprehensive list of jobs available with air carriers certificated 
under section 401 of the Federal Aviation Act of 1958. Such list shall 
include that information and detail, such as job descriptions and 
required skills, the Secretary deems relevant and necessary. In addi-
tion to publishing the list, the Secretary shall make every effort to 
Guideline 
rules, 
consultation. 
Relocation. 
49 use 1371. 
Job list, 
establishment 
and 
publication. 
92 STAT. 1752 
PUBLIC LAW 95-504—OCT. 24, 1978 
Reports and 
data, filing. 
Negotiations. 
Submittal to 
Congress. 
"Legislative 
day." 
Appropriation 
authorization. 
assist an eligible protected employee in finding other employmenf. 
Any individual receiving monthly 
assistance payrnents, moving 
expenses, or reimbursement payments under this section shall, as a 
condition to receiving such expenses or payments, cooperate fully with 
the Secretary in seeking other employment. In order to carry out his 
responsibilities under this subsection, the Secretary may require each 
such air carrier to file with the Secretary the reports, data, and other 
information necessary to fulfill his duties under this subsection. 
(3) In addition to making monthly assistance or reimbursement 
payments under this section, the Secretary shall encourage negotiations 
between air carriers and representatives of eligible protected employees 
with respect to rehiring practices and seniority. 
(e) 
PERIOD OF MONTHLY ASSISTANCE PAYMENTS.— (1) 
Monthly 
assistance payments computed under subsection (b) for a protected 
employee who has been deprived of employment shall be made each 
month until the recipient obtains other employment, or until the end 
of the 72 months occurring immediately after the month such payments 
were first made to such recipient, whichever first occurs. 
(2) Monthly assistance payments computed under subsection (b) for 
a protected employee who has been adversely affected relating to his 
compensation shall be paid for no longer than 72 months, so long as 
the total number of monthly assistance payments made under this 
section for any reason do not exceed 72. 
(f) KuLES AND REGULATIONS.— (1) The Secretary may issue, amend, 
and repeal such rules and regulations as may be necessary for the 
administration of this section. 
(2) The rule containing the guidelines which is required to be pro-
mulgated pursuant to subsection (b) of this section and any other rules 
or regulations which the Secretary deems necessary to carry out this 
section shall be promulgated within six months after the date of enact-
ment of this section. 
(3) The Secretary shall not issue any rule or regulation as a final 
rule or regulation under this section until 30 legislative days after it 
has been submitted to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on Public Works and 
Transportation of the House of Representatives. Any rule or regula-
tion issued by the Secretary under this section as a final rule or regula-
tion shall be submitted to the Congress and shall become effective 60 
legislative days after the date of such submission, unless during that 60-
day period either House adopts a resolution stating that that House 
disapproves such rules or regulations, except that such rules or regula-
tions may become effective on the date, during such 60-day period, that 
a resolution has been adopted by both Houses stating that the Congress 
approves of them. 
(4) For purposes of this subsection, the term "legislative day" means 
a calendar day on which both Houses of Congress are in session. 
(g) 
AIRLINE EMPLOYEES PROTECTIVE ACCOUNT.—All payments 
under this section shall be made by the Secretary from a separate 
account maintained in the Treasury of the United States to be known 
as the Airline Employees Protective Account. There are authorized to 
be appropriated to such account annually, beginning with the fiscal 
year ending September 30,1979, such sums as are necessary to carry out 
the purposes of this section, including amounts necessary for the 
PUBLIC LAW 95-504—OCT. 24, 1978 
92 STAT. 1753 
49 use 1371. 
administrative expenses of the Secretary related to carrying out the 
provisions of this section. 
(h) DEFINITIONS.—For the purposes of this section— 
(1) The term "protected employee" means a person who, on the 
date of enactment of this section, has been employed for at least 4 
years by an air carrier holding^ a certificate issued under section 
401 of "the Federal Aviation Act of 1958. Such term shall not 
include any members of the board of directors or officers of a 
corporation. 
(2) The term "qualifying dislocation" means a bankruptcy or 
major contraction of an air carrier holding a certificate under sec-
tion 401 of the Federal Aviation Act of 1958, occurring during the 
first 10 complete calendar years occurring after the date of enact-
ment of the Airline Deregulation Act of 1978, the major cause of 
which is the change in regulatory structure provided by the Air-
line Deregulation Act of 1978, as determined by the Civil Aero-
nautics Board. 
(3) The term "Secretary" means the Secretary of Labor. 
(4) The term "major contraction" means a reduction by at least 
71/^ percent of the total number of full-time employees of an air 
carrier within a 12-month period. Any particular reduction of less 
than 71/^ percent may be found by the Board to be part of a major 
contraction of an air carrier if the Board determines that other 
reductions are likely to occur such that within a 12-month period 
in which such particular reduction occurs the total reduction will 
exceed 7^/2 percent. In computing a 7i/^-percent reduction under 
this paragraph, the Board shall not include employees who are 
deprived of employment because of a strike or who are terminated 
for cause. 
(i) TRANSFER OF AUTHORITY OF THE BOARD.—The authority of 
the 
Board under this section is transferred to the Department of Trans-
portation on January 1, 1985. 
(j) TERMINATION.—The provisions of this section shall terminate on 
the last day the Secretary is required to make a payment under this 
section. 
LABOR DISPUTE 
SEC. 44. Within ten days after the date of enactment of this section Emergency 
the President, pursuant to section 10 of the Railway Labor Act, shall board, 
create a board to investigate and report on the dispute between Wier 45 USC 160. 
Air Alaska, Incorporated, and the Air Line Pilots Association. Such 
board shall report its findings to the President within thirty days from 
the date of its creation. 
COLLECTION OF FEES, CHARGES, AND PRICES 
SEC. 45. Notwithstanding any other provisions of law, neither the Review and 
Secretary of Transportation nor the Administrator of the Federal approval by 
Aviation Administration shall collect any fee, charge, or price for Congress, 
any approval, test, authorization, certificate, permit, registration, "
^
^ ^^^ ^^^^ 
conveyance, or rating relating to any aspect of aviation (1) which is in 
excess of the fee, charge, or price for such approval, test, authoriza-
tion, certificate, permit, registration, conveyance, or rating which was 
in effect on January 1, 1973, or (2) which did not exist on January 1, 
note. 
92 STAT. 1754 
PUBLIC LAW 95-504—OCT. 24, 1978 
1973, until all such fees, charges, and prices are reviewed and approved 
by Congress. 
CONTINXJITY FOR CERTAIN CERTIFICATES 
49 use 1301 
SEC. 46. Any reference in any law, rule, regulation, or document of 
°ote. 
the United States to a supplemental air carrier or supplemental air 
transportation shall be deemed to be a reference to a charter air carrier 
^ 
or charter air transportation, respectively. 
EXISTING DETERMINATIONS 
49 use 1301 
SEC. 47. All orders, determinations, rules, regulations, permits, 
°o*«- 
contracts, certificates, rates, and privileges which have been issued, 
made, or granted, or allowed to become effective, by the President, the 
Civil Aeronautics Board, or the Postmaster General, or any court of 
competent jurisdiction, under any provision of law repealed or 
amended by this Act, or in the exercise of duties, powers, or functions, 
which are vested in the Board, and which are in effect at the time this 
Act takes effect, shall continue in effect according to their terms until 
modified, terminated, superseded, set aside, or repealed by the Board, 
or by any court of competent jurisdiction, or by operation of law. 
Approved October 24, 1978. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-1211 and No. 95-1211 pt. 2, accompanying H.R. 12611 
(Comm. on Public Works and Transportation) and No. 95-1779 
(Comm. of Conference). 
SENATE REPORT No. 95-631 (Comm. on Commerce, Science, and Transportation). 
CONGRESSIONAL RECORD, Vol. 124 (1978): 
Apr. 19, considered and passed Senate. 
Sept. 14, 21, H.R. 12611 considered and passed House; passage vacated and 
S. 2493, amended, passed in lieu. 
Oct. 14, Senate agreed to conference report. 
Oct. 15, House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 14, No. 43: 
Oct. 24, Presidential statement.