[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 415 Reported in Senate (RS)]

                                                       Calendar No. 300
107th CONGRESS
  1st Session
                                 S. 415

                          [Report No. 107-130]

  To amend title 49, United States Code, to require that air carriers 
    meet public convenience and necessity requirements by ensuring 
competitive access by commercial air carriers to major cities, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 28, 2001

 Mr. Hollings (for himself, Mr. McCain, Mr. Dorgan, Mr. Grassley, Mr. 
  Reid, and Mr. Wyden) introduced the following bill; which was read 
     twice and referred to the Committee on Commerce, Science, and 
                             Transportation

            December 19 (legislative day, December 18), 2001

              Reported by Mr. Hollings, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
  To amend title 49, United States Code, to require that air carriers 
    meet public convenience and necessity requirements by ensuring 
competitive access by commercial air carriers to major cities, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Aviation Competition 
Restoration Act''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    The Congress makes the following findings:</DELETED>
        <DELETED>    (1) The airline industry continues to evolve into 
        a system dominated by a few large air carriers and a handful of 
        smaller, niche air carriers. Absent Congressional action, 
        access to critical markets is likely to be 
        foreclosed.</DELETED>
        <DELETED>    (2) In testimony before the Commerce Committee in 
        1978, the then-President of Eastern Airlines testified that the 
        top 5 air carriers had 68.6 percent of the domestic market. If 
        the mergers and acquisitions proposed in 2000 and 2001 are 
        consummated, the 5 largest network airlines in the United 
        States will account for approximately 83 percent of the air 
        transportation business (based on revenue passenger miles flown 
        in 1999).</DELETED>
        <DELETED>    (3) According to Department of Transportation 
        statistics, taking into account the proposed mergers of United 
        Airlines and US Airways, and of American Airlines and TWA, 
        there will be at least 20 large hub airports in the United 
        States where a single airline and its affiliate air carriers 
        would carry more than 50 percent of the passenger 
        traffic.</DELETED>
        <DELETED>    (4) The continued consolidation of the airline 
        industry may inure to the detriment of public convenience and 
        need, and the further concentration of market power in the 
        hands of even fewer large competitors may lead to unfair 
        methods of competition.</DELETED>
        <DELETED>    (5) A more concentrated airline industry would be 
        likely to result in less competition and higher fares, giving 
        consumers fewer choices and decreased customer 
        service.</DELETED>
        <DELETED>    (6) The Department of Transportation has 
        documented that air fares are relatively higher at those main 
        hub airports where a single airline carries more than 50 
        percent of the passenger traffic, and studies indicate that 
        unfair methods of competition are more likely to occur at such 
        airports, thus inhibiting competitive responses from other 
        carriers when fares are raised or capacity reduced.</DELETED>
        <DELETED>    (7) The General Accounting Office has conducted a 
        number of studies that document the presence of both high fares 
        and problems with competition in the airline industry at 
        dominated hub airports.</DELETED>
        <DELETED>    (8) The National Research Council of the 
        Transportation Research Board has recognized that higher fares 
        exist in short haul markets connected to concentrated hub 
        airports.</DELETED>
        <DELETED>    (9) A Department of Transportation study indicates 
        that the entry and existence of low fare airline competitors in 
        the marketplace has resulted in a reported $6.3 billion in 
        annual savings to airline passengers.</DELETED>
        <DELETED>    (10) While the antitrust rules generally govern 
        mergers and acquisitions in the air carrier industry, and will 
        continue to do so, the public concern about the importance of 
        air transportation, the impact of over scheduling, increasing 
        flight delays and cancellations, poor service, and continued 
        hub domination requires the Department of Transportation to 
        assert its authority in analyzing proposed transactions among 
        air carriers that affect consumers.</DELETED>

<DELETED>SEC. 3. PUBLIC INTEREST REVIEW OF AIR CARRIER ACQUISITIONS AND 
              MERGERS.</DELETED>

<DELETED>    (a) In General.--Subchapter I of chapter 417 of title 49, 
United States Code, is amended by adding at the end thereof the 
following:</DELETED>
<DELETED>``Sec.  41722. Mergers and acquisitions</DELETED>
<DELETED>    ``(a) Protection of Public Interest; Competition Test.--
</DELETED>
        <DELETED>    ``(1) In general.--An air carrier may not acquire, 
        directly or indirectly, any voting securities or assets of 
        another air carrier if, after the acquisition, the air carrier 
        resulting from the acquisition would have more than 10 percent 
        of the passenger enplanements in the United States (based on 
        projections from the most recent annual data available to the 
        Secretary of Transportation) if the Secretary determines that 
        the effect of the acquisition--</DELETED>
                <DELETED>    ``(A) would be substantially to lessen 
                competition, or</DELETED>
                <DELETED>    ``(B) would result in unreasonable 
                industry concentration, excessive market domination, 
                monopoly powers, or other conditions that would tend to 
                allow at least 1 air carrier unreasonably to increase 
                prices, reduce services, or exclude competition in air 
                transportation at any large hub airport (as defined in 
                section 47134(d)(2)) or in at least 10 percent of the 
                top 500 markets for passenger air transportation in the 
                United States.</DELETED>
        <DELETED>    ``(2) Exception.--Notwithstanding paragraph (1), 
        such an acquisition may proceed if the Secretary finds that--
        </DELETED>
                <DELETED>    ``(A) the anticompetitive effects of the 
                proposed transaction are outweighed in the public 
                interest by the probable effect of the acquisition in 
                meeting significant transportation conveniences and 
                needs of the public; and</DELETED>
                <DELETED>    ``(B) those significant transportation 
                conveniences and needs of the public may not be 
                satisfied by a reasonably available alternative having 
                materially less anticompetitive effects.</DELETED>
<DELETED>    ``(b) Dominant Carriers Required To Relinquish Some Gates, 
Facilities, and Assets at Hub Airport.--</DELETED>
        <DELETED>    ``(1) In general.--An air carrier may not acquire, 
        directly or indirectly, any voting securities or assets of 
        another air carrier if, after the acquisition, the air carrier 
        resulting from the acquisition would be a dominant air carrier 
        at any large hub airport (as defined in section 47134(d)(2)) 
        unless the Secretary of Transportation finds that--</DELETED>
                <DELETED>    ``(A) the air carrier resulting from the 
                acquisition will provide gates, facilities, and other 
                assets at that hub airport on a fair, reasonable, and 
                nondiscriminatory basis to another air carrier that--
                </DELETED>
                        <DELETED>    ``(i) holds a certificate issued 
                        under chapter 411 authorizing it to provide air 
                        transportation for passengers;</DELETED>
                        <DELETED>    ``(ii) has fewer than 15 percent 
                        of the average daily passenger enplanements at 
                        that airport; and</DELETED>
                        <DELETED>    ``(iii) is able, or will be able, 
                        to utilize the gate, facility, or other asset 
                        provided to it at a reasonable level of 
                        utilization; or</DELETED>
                <DELETED>    ``(B) gates, facilities, and other assets 
                are available, or will be made available in a timely 
                manner, on a fair, reasonable, and nondiscriminatory 
                basis to accommodate competitive access to that airport 
                by other air carriers.</DELETED>
        <DELETED>    ``(2) Limitation.--Paragraph (1) does not require 
        an air carrier to relinquish control, or otherwise dispose, of 
        more than 10 percent of the gates, facilities, and other assets 
        controlled by that air carrier at any airport, as determined by 
        the Secretary.</DELETED>
        <DELETED>    ``(3) Plan required.--Before the Secretary may 
        make a finding under paragraph (1), the acquiring air carrier 
        and the air carrier being acquired shall file a joint plan in 
        writing with the Secretary that states with such specificity as 
        the Secretary may require exactly how the air carrier resulting 
        from the acquisition will comply with the requirements of 
        paragraph (1).</DELETED>
        <DELETED>    ``(4) Enforcement of plan.--If the Secretary 
        determines, more than 90 days after the date on which an 
        acquisition described in paragraph (1) is completed, that the 
        air carrier has failed substantially to carry out the plan 
        submitted under paragraph (3), the Secretary may--</DELETED>
                <DELETED>    ``(A) withdraw approval of the 
                acquisition;</DELETED>
                <DELETED>    ``(B) withdraw authority for the air 
                carrier to serve international markets; or</DELETED>
                <DELETED>    ``(C) take such other action as may be 
                necessary to compel compliance with the plan.</DELETED>
<DELETED>    ``(c) Notification; Waiting Period; Final Rule.--
</DELETED>
        <DELETED>    ``(1) In general.--In order for the Secretary to 
        be able to make the determination required by subsection (a)--
        </DELETED>
                <DELETED>    ``(A) each air carrier (or in the case of 
                a tender offer, the acquiring air carrier) shall submit 
                a notification to the Secretary, in such form and 
                containing such information as the Secretary may 
                require; and</DELETED>
                <DELETED>    ``(B) wait until the waiting period 
                described in paragraph (2) has expired before effecting 
                the acquisition.</DELETED>
        <DELETED>    ``(2) Waiting period.--</DELETED>
                <DELETED>    ``(A) In general.--The waiting period 
                begins on the date of receipt by the Secretary of a 
                completed notification required by paragraph (1)(A) and 
                ends on the thirtieth day after that date, or (in the 
                case of a cash tender offer) the fifteenth day after 
                that date.</DELETED>
                <DELETED>    ``(B) Waiver; modification.--The Secretary 
                may waive the notification requirement, shorten the 
                waiting period, or extend the waiting period (by not 
                more than 180 days), in order to coordinate action 
                under this subsection with the Department of Justice 
                under the antitrust laws of the United 
                States.</DELETED>
        <DELETED>    ``(3) Coordination with DOJ.--The Secretary and 
        the Attorney General may enter into a memorandum of 
        understanding to ensure that the determination required by 
        subsection (a) is made within the same time frame as any 
        Department of Justice review of a proposed acquisition under 
        section 7A of the Clayton Act (15 U.S.C. 18a).</DELETED>
        <DELETED>    ``(4) Final action within 180 days.--The Secretary 
        shall take final action with respect to any acquisition 
        requiring a determination under subsection (a) within 180 days 
        after the date on which the Secretary receives the notification 
        required by paragraph (1)(A).</DELETED>
<DELETED>    ``(d) AIR 21 Competition Plan Review.--The Secretary shall 
examine any hub airport affected by a proposed acquisition described in 
subsection (a) to determine whether that airport has complied with the 
competition plan requirement of sections 47106(f) or 40117(k) of title 
49, United States Code, and whether gates and other facilities are 
being made available at costs that are fair and reasonable to air 
carriers in accordance with the requirements of section 41712(c)(3). 
The sponsor (as defined in section 47102(19)) of any hub airport shall 
cooperate fully with the Secretary in carrying out an examination under 
this subsection.</DELETED>
<DELETED>    ``(e) Definitions.--In this section:</DELETED>
        <DELETED>    ``(1) Dominated hub airport.--The term `dominated 
        hub airport' means an airport--</DELETED>
                <DELETED>    ``(A) that each year has at least .25 
                percent of the total annual boardings in the United 
                States; and</DELETED>
                <DELETED>    ``(B) at which 1 air carrier accounts for 
                more than 50 percent of the enplaned 
                passengers.</DELETED>
        <DELETED>    ``(2) Dominant air carrier.--The term `dominant 
        air carrier' means an air carrier that accounts for more than 
        50 percent of the enplaned passengers at an airport.</DELETED>
        <DELETED>    ``(3) Control.--With respect to whether a 
        corporation or other entity is considered to be controlled by 
        another corporation or other entity, the term `control' means 
        that more than 10 percent of the ownership, voting rights, 
        capital stock, or other pecuniary interest in that corporation 
        or entity is owned, held, or controlled, directly or 
        indirectly, by such other corporation or entity.</DELETED>
        <DELETED>    ``(4) Enplanements.--The term `passenger 
        enplanements' means the annual number of passenger 
        enplanements, as determined by the Secretary of Transportation, 
        based on the most recent data available.</DELETED>
        <DELETED>    ``(5) Asset.--The term `asset' includes slots (as 
        defined in section 41714(h)(4)) and slot exemptions (within the 
        meaning of section 41714(a)(2)).''.</DELETED>
<DELETED>    (b) Special Rule.--For the purpose of applying section 
41722 of title 49, United States Code, to an acquisition or merger 
involving major air carriers proposed after January 1, 2000, that has 
not been consummated before February 15, 2001--</DELETED>
        <DELETED>    (1) subsection (c) of that section shall not 
        apply; but</DELETED>
        <DELETED>    (2) the Secretary of Transportation shall require 
        such information from the acquiring air carrier and the 
        acquired air carrier, or the merging air carriers, as may be 
        necessary to carry out that section, and shall complete the 
        review required by that section within a reasonable period that 
        is not to exceed 180 days from the date on which the Secretary 
        receives the requested information from all parties.</DELETED>
<DELETED>    (c) Conforming Amendment.--The chapter analysis for 
chapter 417 of title 49, United States Code, is amended by adding at 
the end the following;</DELETED>

                              <DELETED>``41722. Mergers and 
                                        acquisitions''.

<DELETED>SEC. 4. COMPETITIVE ACCESS TO GATES, FACILITIES, AND OTHER 
              ASSETS.</DELETED>

<DELETED>    (a) Subchapter I of chapter 417, as amended by section 3, 
is further amended by adding at the end thereof the 
following:</DELETED>
<DELETED>``Sec.  41723. Competitive access to gates, facilities, and 
              other assets</DELETED>
<DELETED>    ``(a) DOT Review of Gates, Facilities, and Assets.--Within 
90 days after the date of the enactment of Aviation Competition 
Restoration Act, the Secretary of Transportation shall investigate the 
assignment and usage of gates, facilities, and other assets by major 
air carriers at the largest 35 airports in the United States in terms 
of air passenger traffic. The investigation shall include an assessment 
of--</DELETED>
        <DELETED>    ``(1) whether, and to what extent, gates, 
        facilities, and other assets are being fully utilized by major 
        air carriers at those airports;</DELETED>
        <DELETED>    ``(2) whether gates, facilities, and other assets 
        are available for competitive access to enhance competition; 
        and</DELETED>
        <DELETED>    ``(3) whether the reassignment of gates, 
        facilities, and other assets to, or other means of increasing 
        access to gates, facilities, and other assets for, air carriers 
        (other than dominant air carriers (as defined in section 
        41722(e)(2)) would improve competition among air carriers at 
        any such airport or provide other benefits to the flying public 
        without compromising safety or creating scheduling, efficiency, 
        or other problems at airports providing service to or from 
        those airports.</DELETED>
<DELETED>    ``(b) Authority of Secretary To Make Gates, Etc., 
Available.--The Secretary shall require a major air carrier, upon 
application by another air carrier or on the Secretary's own motion to 
make gates, facilities, and other assets available to other air 
carriers on terms that are fair, reasonable, and nondiscriminatory to 
ensure competitive access to those airports if the Secretary 
determines, on the basis of the investigation conducted under 
subsection (a), that such gates, facilities, and other assets are not 
available and that competition would be enhanced thereby at those 
airports.</DELETED>
<DELETED>    ``(c) Definitions.--</DELETED>
        <DELETED>    ``(1) Major air carrier.--In this section the term 
        `major air carrier' means an air carrier certificated under 
        section 41102 that accounted for at least 1 percent of domestic 
        scheduled-passenger revenues in the 12 months ending March 31 
        of each year, as reported to the Department of Transportation 
        pursuant to part 241 of title 14, Code of Federal Regulations, 
        and identified as a reporting carrier periodically in 
        accounting and reporting directives issued by the Office of 
        Airline Information.</DELETED>
        <DELETED>    ``(2) Asset.--The term `asset' includes slots (as 
        defined in section 41714(h)(4)) and slot exemptions (within the 
        meaning of section 41714(a)(2)).''.</DELETED>
<DELETED>    (b) Conforming Amendment.--The chapter analysis for 
chapter 417 of title 49, United States Code, is amended by inserting 
after the item relating to section 41722 the following:</DELETED>

                              <DELETED>``41723. Competitive access to 
                                        gates, facilities, and other 
                                        assets''.

<DELETED>SEC. 5. UNFAIR METHODS OF COMPETITION IN AIR 
              TRANSPORTATION.</DELETED>

<DELETED>    (a) Unfair Competition Through Use of Gates, Facilities, 
and Other Assets.--Section 41712 of title 49, United States Code, is 
amended by adding at the end the following:</DELETED>
<DELETED>    ``(c) Underutilization of Gates, Facilities, or Other 
Assets.--</DELETED>
        <DELETED>    ``(1) In general.--It is an unfair method of 
        competition in air transportation under subsection (a) for a 
        dominant air carrier at a dominated hub airport--</DELETED>
                <DELETED>    ``(A) to fail to utilize gates, 
                facilities, and other assets fully at that airport; 
                and</DELETED>
                <DELETED>    ``(B) to refuse, deny, or fail to provide 
                a gate, facility, or other asset at such an airport 
                that is underutilized by it, or that will not be fully 
                utilized by it within 1 year, to another carrier on 
                fair, reasonable, and nondiscriminatory terms upon 
                request of the airport, the other air carrier, or the 
                Secretary.</DELETED>
        <DELETED>    ``(2) Requesting carrier must file with dot.--An 
        air carrier making a request for a gate, facility, or other 
        asset under paragraph (1) shall file a copy of the request with 
        the Secretary when it is submitted to the dominant air 
        carrier.</DELETED>
        <DELETED>    ``(3) Availability of gates and other essential 
        services.--The Secretary shall ensure that gates and other 
        facilities are made available at costs that are fair and 
        reasonable to air carriers at covered airports where a 
        `majority-in-interest clause' of a contract or other agreement 
        or arrangement inhibits the ability of the local airport 
        authority to provide or build new gates or other essential 
        facilities.</DELETED>
        <DELETED>    ``(4) Definitions.--In this subsection:</DELETED>
                <DELETED>    ``(A) Dominant air carrier.--The term 
                `dominant air carrier' has the meaning given that term 
                by section 41722(e)(2).</DELETED>
                <DELETED>    ``(B) Dominated hub airport.--The term 
                `dominated hub airport' has the meaning given that term 
                by section 41722(e)(1).</DELETED>
                <DELETED>    ``(C) Covered airport.--The term `covered 
                airport' has the meaning given that term by section 
                47106(f)(3).</DELETED>
                <DELETED>    ``(D) Asset.--The term `asset' includes 
                slots (as defined in section 41714(h)(4)) and slot 
                exemptions (within the meaning of section 
                41714(a)(2)).''.</DELETED>
<DELETED>    (b) Conforming Amendment.--Section 155 of the Wendell H. 
Ford Aviation Investment and Reform Act of the 21st Century (49 U.S.C. 
47101 nt) is amended by striking subsection (d).</DELETED>

<DELETED>SEC. 6. AIP COMPETITION FUNDING.</DELETED>

<DELETED>    (a) In General.--Subchapter I of chapter 471 of title 49, 
United States Code, is amended by adding at the end the 
following:</DELETED>
<DELETED>``Sec.  47138. Competition enhancement program</DELETED>
<DELETED>    ``(a) In General.--The Secretary of Transportation shall 
make project grants under this subchapter from the Airport and Airway 
Trust Fund for gates, related facilities, and other assets to enhance 
and increase competition among air carriers for passenger air 
transportation.</DELETED>
<DELETED>    ``(b) Secretary May Incur Obligations.--The Secretary may 
incur obligations to make grants under this section.</DELETED>
<DELETED>    ``(c) Authorization of Appropriations.--There are 
authorized to be appropriated from the Airport and Airway Trust Fund 
$300,000,000 for fiscal year 2002, such amount to remain available 
until expended.''.</DELETED>
<DELETED>    (b) AIP Grants.--Section 47107 of title 49, United States 
Code, is amended by adding at the end the following:</DELETED>
<DELETED>    ``(q) Gates, Facilities, and Other Assets.--</DELETED>
        <DELETED>    ``(1) In general.--The Secretary of Transportation 
        may approve an application under this subchapter for an airport 
        development project grant at a dominated hub airport only if 
        the Secretary--</DELETED>
                <DELETED>    ``(A) receives appropriate assurances that 
                the airport will provide gates, facilities, and other 
                assets on fair, reasonable, and nondiscriminatory terms 
                to air carriers, other than a dominant air carrier, to 
                ensure competitive access to essential facilities; 
                or</DELETED>
                <DELETED>    ``(B) determines that gates, facilities, 
                and other assets are available at that airport on a 
                fair, reasonable, and nondiscriminatory basis to air 
                carriers other than a dominant air carrier.</DELETED>
        <DELETED>    ``(2) Definitions.--In this subsection:</DELETED>
                <DELETED>    ``(A) Dominant air carrier.--The term 
                `dominant air carrier' has the meaning given that term 
                by section 41722(e)(2).</DELETED>
                <DELETED>    ``(B) Dominated hub airport.--The term 
                `dominated hub airport' has the meaning given that term 
                by section 41722(e)(1).</DELETED>
                <DELETED>    ``(C) Asset.--The term `asset' includes 
                slots (as defined in section 41714(h)(4)) and slot 
                exemptions (within the meaning of section 
                41714(a)(2)).''.</DELETED>
<DELETED>    (c) PFC Funds.--Section 40117 of title 49, United States 
Code, is amended by adding at the end the following:</DELETED>
<DELETED>    ``(l) Facilities for Competitive Access.--</DELETED>
        <DELETED>    ``(1) In general.--The Secretary may approve an 
        application under subsection (c) for a project at a dominated 
        hub airport only if the Secretary--</DELETED>
                <DELETED>    ``(A) receives appropriate assurances that 
                the airport will provide gates, facilities, and other 
                assets on fair, reasonable, and nondiscriminatory terms 
                to air carriers, other than a dominant air carrier, to 
                ensure competitive access to essential facilities; 
                or</DELETED>
                <DELETED>    ``(B) determines that gates, facilities, 
                and other assets are available at that airport on a 
                fair, reasonable, and nondiscriminatory basis to air 
                carriers other than a dominant air carrier.</DELETED>
        <DELETED>    ``(2) Definitions.--In this subsection:</DELETED>
                <DELETED>    ``(A) Dominant air carrier.--The term 
                `dominant air carrier' has the meaning given that term 
                by section 41722(e)(2).</DELETED>
                <DELETED>    ``(B) Dominated hub airport.--The term 
                `dominated hub airport' has the meaning given that term 
                by section 41722(e)(1).</DELETED>
                <DELETED>    ``(C) Asset.--The term `asset' includes 
                slots (as defined in section 41714(h)(4)) and slot 
                exemptions (within the meaning of section 
                41714(a)(2)).''.</DELETED>
<DELETED>    (d) Conforming Amendment.--The chapter analysis for 
subchapter I of chapter 471 of such title is amended by inserting after 
the item relating to section 47137 the following:</DELETED>

                              <DELETED>``47138. Competition enhancement 
                                        program''.

</DELETED>SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Aviation Competition Restoration 
Act''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) The airline industry continues to evolve into a system 
        dominated by a few large air carriers and a handful of smaller, 
        niche air carriers. Absent Congressional action, access to 
        critical markets is likely to be foreclosed.
            (2) In testimony before the Commerce Committee in 1978, the 
        then-President of Eastern Airlines testified that the top 5 air 
        carriers had 68.6 percent of the domestic market. If the 
        mergers and acquisitions proposed in 2000 and 2001 are 
        consummated, the 5 largest network airlines in the United 
        States will account for approximately 83 percent of the air 
        transportation business (based on revenue passenger miles flown 
        in 1999).
            (3) According to Department of Transportation statistics, 
        taking into account the proposed mergers of United Airlines and 
        US Airways, and of American Airlines and TWA, there will be at 
        least 20 large hub airports in the United States where a single 
        airline and its affiliate air carriers would carry more than 50 
        percent of the passenger traffic.
            (4) The continued consolidation of the airline industry may 
        inure to the detriment of public convenience and need, and the 
        further concentration of market power in the hands of even 
        fewer large competitors may lead to unfair methods of 
        competition.
            (5) A more concentrated airline industry would be likely to 
        result in less competition and higher fares, giving consumers 
        fewer choices and decreased customer service.
            (6) The Department of Transportation has documented that 
        air fares are relatively higher at those main hub airports 
        where a single airline carries more than 50 percent of the 
        passenger traffic, and studies indicate that unfair methods of 
        competition are more likely to occur at such airports, thus 
        inhibiting competitive responses from other carriers when fares 
        are raised or capacity reduced.
            (7) The General Accounting Office has conducted a number of 
        studies that document the presence of both high fares and 
        problems with competition in the airline industry at dominated 
        hub airports.
            (8) The National Research Council of the Transportation 
        Research Board has recognized that higher fares exist in short 
        haul markets connected to concentrated hub airports.
            (9) A Department of Transportation study indicates that the 
        entry and existence of low fare airline competitors in the 
        marketplace has resulted in a reported $6.3 billion in annual 
        savings to airline passengers.
            (10) While the antitrust rules generally govern mergers and 
        acquisitions in the air carrier industry, and will continue to 
        do so, the public concern about the importance of air 
        transportation, the impact of over scheduling, increasing 
        flight delays and cancellations, poor service, and continued 
        hub domination requires the Department of Transportation to 
        assert its authority in analyzing proposed transactions among 
        air carriers that affect consumers.

SEC. 3. COMPETITIVE ACCESS TO GATES, FACILITIES, AND OTHER ASSETS.

    (a) In General.--Subchapter I of chapter 417 is amended by adding 
at the end thereof the following:
``Sec.  41722. Competitive access to gates, facilities, and other 
              assets
    ``(a) DOT Review of Gates, Facilities, and Assets.--Within 90 days 
after the date of the enactment of Aviation Competition Restoration 
Act, the Secretary of Transportation shall investigate the assignment 
and usage of gates, facilities, and other assets by major air carriers 
and their affiliated carriers (other than commuter air carriers) at the 
largest 35 airports in the United States in terms of passenger 
enplanements. The investigation shall include an assessment of--
            ``(1) whether, and to what extent, gates, facilities, and 
        other assets are being fully utilized by major air carriers and 
        their affiliated carriers at those airports;
            ``(2) whether gates, facilities, and other assets are 
        available for competitive access to enhance competition; and
            ``(3) whether the reassignment of gates, facilities, and 
        other assets to, or other means of increasing access to gates, 
        facilities, and other assets for, air carriers (other than 
        dominant air carriers) would improve competition among air 
        carriers at any such airport or provide other benefits to the 
        flying public without compromising safety or creating 
        scheduling, efficiency, or other problems at airports providing 
        service to or from those airports.
    ``(b) Authority of Secretary To Make Gates, etc., Available.--
            ``(1) In general.--The Secretary shall require a major air 
        carrier and its affiliated carrier, upon application by another 
        air carrier or on the Secretary's own motion, to relinquish 
        gates, facilities, and other assets available so that those 
        facilities may be leased by the airport sponsor, or, in the 
        case of slots, be reallocated by the Secretary, to other air 
        carriers on terms that are fair, reasonable, and 
        nondiscriminatory to ensure competitive access to those 
        airports if the Secretary determines, on the basis of the 
        investigation conducted under subsection (a), that such gates, 
        facilities, and other assets are not available, or are 
        underutilized, and that competition would be enhanced thereby 
        at those airports.
            ``(2) Protection of small communities.--Paragraph (1) does 
        not apply to any gate, facility, or asset exclusively used by a 
        commuter air carrier.
    ``(c) Definitions.--
            ``(1) Major air carrier.--In this section the term `major 
        air carrier' means an air carrier certificated under section 
        41102 that accounted for at least 1 percent of domestic 
        scheduled-passenger revenues in the 12 months ending March 31 
        of each year, as reported to the Department of Transportation 
        pursuant to part 241 of title 14, Code of Federal Regulations, 
        and identified as a reporting carrier periodically in 
        accounting and reporting directives issued by the Office of 
        Airline Information.
            ``(2) Dominant air carrier.--The term `dominant air 
        carrier' means an air carrier that accounts for more than 50 
        percent of the enplaned passengers at an airport.
            ``(3) Commuter air carrier.--The term `commuter air 
        carrier' has the meaning given it by section 41714(h)(1).
            ``(4) Asset.--The term `asset' includes slots (as defined 
        in section 41714(h)(4)) and slot exemptions (within the meaning 
        of section 41714(a)(2)).
            ``(5) Affiliated carrier.--The term `affiliated carrier' 
        has the meaning given it by section 41714(k).
            ``(6) Passenger enplanements.--The term `passenger 
        enplanements' means the annual number of passenger 
        enplanements, as determined by the Secretary of Transportation, 
        based on the most recent data available.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 417 of 
title 49, United States Code, is amended by inserting after the item 
relating to section 41721 the following:

``41722. Competitive access to gates, facilities, and other assets.''.

SEC. 4. UNFAIR METHODS OF COMPETITION IN AIR TRANSPORTATION.

    (a) Unfair Competition Through Use of Gates, Facilities, and Other 
Assets.--Section 41712 of title 49, United States Code, is amended by 
adding at the end the following:
    ``(c) Underutilization of Gates, Facilities, or Other Assets.--
            ``(1) In general.--It is an unfair method of competition in 
        air transportation under subsection (a) for a dominant air 
        carrier at a dominated hub airport--
                    ``(A) to fail to utilize gates, facilities, and 
                other assets fully at that airport; and
                    ``(B) to refuse, deny, or fail to provide a gate, 
                facility, or other asset at such an airport that is 
                underutilized by it, or that will not be fully utilized 
                by it within 1 year, to another carrier on fair, 
                reasonable, and nondiscriminatory terms upon request of 
                the airport, the other air carrier, or the Secretary.
            ``(2) Requesting carrier must file with dot.--An air 
        carrier making a request for a gate, facility, or other asset 
        under paragraph (1) shall file a copy of the request with the 
        Secretary when it is submitted to the dominant air carrier.
            ``(3) Availability of gates and other essential services.--
        The Secretary shall ensure that gates and other facilities are 
        made available on terms that are fair and reasonable to air 
        carriers at covered airports where a `majority-in-interest 
        clause' of a contract or other agreement or arrangement 
        inhibits the ability of the local airport authority to provide 
        or build new gates or other essential facilities.
            ``(4) Definitions.--In this subsection:
                    ``(A) Dominant air carrier.--The term `dominant air 
                carrier' has the meaning given that term by section 
                41722(c)(2).
                    ``(B) Dominated hub airport.--The term `dominated 
                hub airport' means an airport--
                            ``(i) that each year has at least .25 
                        percent of the total annual boardings in the 
                        United States; and
                            ``(ii) at which 1 air carrier accounts for 
                        more than 50 percent of the enplaned 
                        passengers.
                    ``(C) Covered airport.--The term `covered airport' 
                has the meaning given that term by section 47106(f)(3).
                    ``(D) Asset.--The term `asset' includes slots (as 
                defined in section 41714(h)(4)) and slot exemptions 
                (within the meaning of section 41714(a)(2)).''.
    (b) Conforming Amendment.--Section 155 of the Wendell H. Ford 
Aviation Investment and Reform Act of the 21st Century (49 U.S.C. 47101 
nt) is amended by striking subsection (d).

SEC. 5. AIP COMPETITION FUNDING.

    (a) In General.--Subchapter I of chapter 471 of title 49, United 
States Code, is amended by adding at the end the following:
``Sec.  47138. Competition enhancement program
    ``(a) In General.--Notwithstanding any provision of this title to 
the contrary, the Secretary of Transportation may make project grants 
under this subchapter from the Airport and Airway Trust Fund for gates, 
related facilities, and other assets to enhance and increase 
competition among air carriers for passenger air transportation, 
selected by the Secretary on a case-by-case basis, at airports 
described in section 41722(a). In carrying out this subsection, the 
Secretary shall give priority to gates that will enhance service to 
small and medium-sized communities.
    ``(b) Secretary May Incur Obligations.--The Secretary may incur 
obligations to make grants under this section.
    ``(c) Consistency of Requirements.--
            ``(1) In general.--The Secretary shall make gates eligible 
        for project funding under chapter 471 at any airport described 
        in section 41722(a) where the Secretary determines that such 
        funding is necessary to ensure competitive access at that 
        airport.
            ``(2) Parity between aip-financed and pfc-financed gates.--
        The Secretary shall by regulation require that projects related 
        to gates described in paragraph (1) are subject, to the extent 
        appropriate, to the requirements set forth in Appendix A to 
        part 158 of title 14 of the Code of Federal Regulations for--
                    ``(A) non-exclusivity of contractual agreements;
                    ``(B) carryover provisions; and
                    ``(C) competitive access.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated from the Airport and Airway Trust Fund $300,000,000 for 
fiscal year 2002, such amount to remain available until expended.''.
    (b) Conforming Amendment.--The chapter analysis for subchapter I of 
chapter 471 of such title is amended by inserting after the item 
relating to section 47137 the following:

``47138. Competition enhancement program.''.




                                                       Calendar No. 300

107th CONGRESS

  1st Session

                                 S. 415

                          [Report No. 107-130]

_______________________________________________________________________

                                 A BILL

  To amend title 49, United States Code, to require that air carriers 
    meet public convenience and necessity requirements by ensuring 
competitive access by commercial air carriers to major cities, and for 
                            other purposes.

_______________________________________________________________________

            December 19 (legislative day, December 18), 2001

                       Reported with an amendment