[Federal Register Volume 61, Number 13 (Friday, January 19, 1996)]
[Proposed Rules]
[Pages 1309-1312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-546]
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DEPARTMENT OF TRANSPORTATION
14 CFR Chapter II
[Docket No. OST-96-993; Notice 96-1]
RIN 2105-AC36
Ticketless Travel: Passenger Notices
AGENCY: Office of the Secretary, DOT.
ACTION: Request for Comments.
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SUMMARY: The Department is seeking comment on passenger notice
requirements as applied to ticketless air travel. This action is taken
on the Department's initiative.
DATES: Comments on the issues discussed in this document should be
received by March 19, 1996. Late-filed comments will be considered to
the extent practicable.
ADDRESSES: Comments should be sent to Docket Clerk, Docket No. OST-96-
993, Room PL-401, Department of Transportation, 400 Seventh Street SW,
Washington, DC 20590. For the convenience of persons who will be
reviewing the docket, it is requested that commenters provide an
original and three copies of their comments. Comments can be inspected
from 9:00 a.m. to 5:00 p.m. Commenters who wish the receipt of their
comments to be acknowledged should include a stamped, self-addressed
postcard with their comments. The docket clerk will date-stamp the
postcard and mail it to the commenter. Comments should be on 8\1/2\ by
11 inch white paper using dark ink and should be without tabs and
unbound.
FOR FURTHER INFORMATION CONTACT: Tim Kelly, Aviation Consumer
Protection Division, Office of Aviation Enforcement and Proceedings,
Office of the General Counsel, Department of Transportation, 400
Seventh Street SW, Room 10405, Washington, DC 20590, telephone (202)
366-5952.
SUPPLEMENTARY INFORMATION:
Background
Various DOT regulations require U.S. and foreign air carriers to
provide consumer notices on or with passenger tickets. These notices
provide information about protections afforded by federal regulations,
limitations on carrier liability, and contract terms that passengers
may not otherwise be aware of. These ticket notice requirements are
listed below.
Subject/Source (14 CFR)
Oversales--Sec. 250.11
Domestic baggage liability--Sec. 254.5
International baggage liability--Sec. 221.176
Domestic contract of carriage terms--Sec. 253.5
Terms of electronic tariff (international)--Sec. 221.177(b)
Refund penalties (domestic)--Sec. 253.7
Fare increases (international)--Sec. 221.174
Death/injury liability limits (international)--Sec. 221.175
Over the past few years, a number of airlines have begun selling
air service with ``ticketless travel,'' also known as ``electronic
ticketing.'' Under this concept a passenger or travel agent calls the
airline, makes a reservation and purchases the transportation during
the call, typically by credit card. No ``ticket,'' as that document has
traditionally been configured, is issued. Instead, the passenger is
orally given a confirmation number and/or is sent a written itinerary.
Upon checking in at the airport the passenger simply provides his or
her name, furnishes identification, and is given a boarding pass or
other document that is used to gain access to the aircraft.
The Department of Transportation supports the development of
ticketless travel. The process has the potential to reduce carrier and
agent costs, and thereby costs to consumers, and to make air
transportation easier to purchase. At the same time, the Department has
been concerned that necessary information in the passenger notices
described above be provided to all passengers in a ticketless
environment at a time and in a manner that makes the information
useful. A number of carriers that offer ticketless travel have
approached the Department and asked what procedures we would find to be
acceptable in this area. In response, we have pointed out the
importance of providing the same general level and timeliness of notice
that is presently required for traditionally-ticketed passengers, as
indicated in the discussion that follows. As far as we are aware,
virtually all carriers that offer ticketless travel are providing those
notices in the manner and at the time that we have recommended.
We realize that this is a dynamic area of air transportation. We
are publishing this Federal Register notice in order to seek comment on
all aspects of the issue of consumer notices in a ticketless air travel
environment so that unnecessary documentation burdens can be
eliminated, consistent with providing needed information to consumers
in a timely fashion.
Discussion
At the time that the various passenger notice requirements
described above were issued, all passengers received tickets. It
appears that the ticket was chosen as the means for conveying required
consumer information simply because tickets were a universally-
available medium for documenting the carrier/passenger contract of
carriage and providing notice in writing to individual passengers. We
have found no evidence that the use of the word ``ticket'' in these
notice rules contemplated that only airline passengers who receive
traditional tickets are able and entitled to benefit from the
information in these notices.
Indeed, there is ample evidence that these notice requirements were
enacted in order to provide important information to all airline
passengers. In issuing a rule requiring a ticket notice disclosing
baggage liability limits, the Civil Aeronautics Board noted:
As we stated in EDR-182, inadequate knowledge by the traveling
public of the limits on liability for loss of or damage to baggage
has been a recurring source of consumer complaints and this
continues to be the case. [T]he Board has determined that the
traveling public is entitled to effective notice of both Warsaw
Convention and other baggage liability limitations. [ER-691 issued
August 24, 1971; 36 FR 17034.]
In 1977 the Board issued a rule requiring a ticket notice
disclosing overbooking practices. The agency stated:
* * * while we find nothing unlawful in a carrier's attempt to
insulate itself against a common law action of fraudulent
misrepresentation by filing a tariff rule, such carrier and its
agents should be required to provide the passenger with actual
notice of its overbooking practices. Although, as the carriers point
out, a passenger may be legally presumed to have knowledge of a
carrier's tariffs, it is clearly unrealistic to expect passengers to
have actual knowledge of the contents of tariffs. [ER-987 issued
February 28, 1977; 42 FR 12420.]
In 1982, as domestic tariffs were being phased out, the Board
issued a rule permitting carriers to continue to incorporate terms by
reference into contracts with passengers, as they had with tariffs, but
requiring a ticket notice disclosing the existence of the incorporated
terms. The rule also required specific notice of certain terms
affecting the refundability of the fare. The Board stated that it
wanted to:
[[Page 1310]]
* * * make sure that the traveling public are able to find out
the terms they are ``buying into'' whenever they purchase an airline
ticket, so that they can make an informed choice of carrier, class
and flight, and protect themselves (for example, by buying extra
insurance) against undesired risks * * * This rule is intended to
alert passengers, and prospective passengers, that important terms
are incorporated in ticket contracts * * * [ER-1302 issued September
27, 1982; 47 FR 52134; 14 CFR Part 253.]
One of the primary concerns of airlines at the time that the rule
permitting continued incorporation of contract terms (14 CFR Part 253)
was adopted was the possibility of being subjected to widely divergent
standards involving notice of contract terms by the courts of many
different states which might have jurisdiction over their contracts.
Part 253 preempts state courts from involvement in the issue of notice
of contract terms, so long as carriers comply with its provisions.
Presumably, carriers that offer ticketless travel want to incorporate
contract terms by reference and take advantage of liability limitations
to the same extent as carriers that issue tickets. However, it is open
to question whether courts will view a carrier's contract of carriage
to be enforceable by a carrier if a consumer does not receive timely
written notice of its applicability to the air transportation being
purchased. At this point, we continue to believe that Part 253 strikes
a balance between the Department's responsibility to protect consumers
and its desire to allow airlines the maximum flexibility possible for
their business decisions. Accordingly, for the same reasons that were
cited when the part 253 disclosure rules were enacted, both carriers
and passengers could face increased risks if notice of the incorporated
contract of carriage terms were not to be provided to ticketless
passengers in a timely fashion. We seek comment on whether carriers
selling ticketless travel expect that their respective contracts of
carriage will apply to the purchased transportation. We also seek
comment on the costs and the benefits of providing notice of any
incorporated contract of carriage terms to ticketless passengers within
a few days after the purchase transaction, and the methods by which
this could be accomplished. In addition to comments on all of the above
issues, we specifically ask for comment on the issue of preemption if
carriers do not provide written notice to ticketless passengers similar
to that required under part 253.
In addition to conveying consumer notices, an airline ticket serves
as a record of the passenger's reservation. The definition of
``confirmed reserved space'' in the Department's denied boarding rule
(14 CFR Sec. 250.1) is:
* * * space on a specific date and on a specific flight and
class of service of a carrier which has been requested by a
passenger and which the carrier or its agent has verified, by
appropriate notation on the ticket or in any other manner provided
therefor by the carrier, as being reserved for the accommodation of
the passenger.
Thus, if a passenger has a ticket reflecting confirmed reserved
space (generally indicated by the notation ``OK'' in the Status field),
that passenger has a reservation for purposes of our denied boarding
rule even if the carrier cannot locate the reservation in the computer.
Under that rule, that passenger is entitled to compensation if not
boarded. Ticketless passengers could be at a disadvantage in this
regard if there is no evidence in their possession of having a
reservation on a particular flight. The confirmation number provided at
the time of the purchase may help the carrier locate the reservation,
but if the computer record cannot be found, the confirmation numbers
now being used may not establish that the passenger has a reservation
on the specific flight for which he or she is checking in. Therefore,
failure to provide confirmed passengers with an adequate written record
of the confirmation could lead to numerous disputes between airlines
and passengers regarding entitlement to denied boarding compensation as
required by part 250. Such a written record could be the confirmation
number alone, if the carrier has a system that allows airport agents to
use a confirmation number to determine the status of the reservation
associated with that number without resort to its computer reservation
system (e.g., by using a coded confirmation number). However, if a
carrier does not have a procedure free of reliance on a single computer
reservation system, in order to achieve the same end it may be
advisable for a written record of the reservation to be sent to the
passenger at the time of the purchase to identify the specific flights,
dates and classes of service purchased by the passenger, consistent
with section 250.1. We ask for comments on whether passengers in a
ticketless environment should receive evidence of their confirmed
reservation independent of a carrier's computer reservation system and,
if so, by what means.
Another issue raised by ticketless travel is that the passenger may
have no record issued by the carrier or its agent of the fare that was
quoted to and accepted by the passenger during the telephone call or
other transaction when the transportation was purchased. The charge
record from the passenger's credit card company may not arrive in the
mail until after the flight, and should there be a disagreement at
check-in over the correct fare, the passenger would have no evidence of
the amount that he or she had agreed to pay. Although airline tickets
contain fare information, no existing rule requires such a written
record of the fare, and thus some carriers may not wish to create one
for ticketless passengers. However, to the extent that written material
is given to ticketless passengers in order to address other issues
discussed here, providing a written record of the fare (perhaps
generated from the record of the purchase transaction) would obviate
many potential disputes over the amount of the fare. Comments are
invited on how carriers deal with fare disputes with all passengers,
but particularly with passengers who purchase tickets by phone, and on
how often such disputes occur.
To the extent that carriers revise their systems as a result of any
of the issues discussed in this Notice, it may be easier to incorporate
fare information now than to have to add it later. It is likely that
many business travelers will need a written statement of the fare for
expense reports in any event. Providing fare documentation on a
ticketless transaction may encourage more business travelers to use the
system, which may in turn reduce carrier costs. We seek comment on the
desirability and practicality of providing fare information in writing
to ticketless passengers.
Article 3, section 2 of the Warsaw Convention (49 Stat. 3000, 49
U.S.C.A. 1502) requires that before a carrier can assert Warsaw
liability limits for personal injury or death or for lost or damaged
baggage with respect to a particular international passenger, the
carrier must provide that passenger a ticket which states, inter alia,
that the transportation is subject to the Convention's rules. This
issue will need to be addressed.
Ticketless carriers that are providing consumer notices as we have
recommended have been furnishing those notices in writing. We have
advised those carriers that written notice could be provided through
electronic text media such as ``e-mail'' and faxes. Oral notice during
a telephone transaction alone would not meet the requirements of the
current regulations that apply to ticket notices. The consumer notices
that currently
[[Page 1311]]
appear on tickets are lengthier than the brief oral notice now required
for code-sharing (14 CFR Sec. 399.88) and the more detailed notices
proposed for code-sharing and change-of-gauge service (59 FR 40836 and
60 FR 3778). In addition, the code-sharing and change-of-gauge
disclosures are alerts about a single fact, while the ticket notices
contain more-detailed information that passengers may want to refer to
during check-in or even after the flight (e.g., in the event of a
problem). Finally, a written notice avoids disputes over what was said.
To the extent that information in the notices currently required on
tickets is provided to ticketless passengers, we seek comment on
whether we should specify the methods by which this information should
be transmitted and the timing of such notice.
We have stated to carriers that have contacted us about ticketless
travel that the intent of the current regulations for notices on
tickets is to ensure that the notices to passengers are provided in
conjunction with the purchase transaction. Consistent with this
concept, we have advised these carriers that we believe that on a
ticketless sale the notices should be sent to the purchaser (via mail,
fax, ``e-mail,'' personal delivery, or other timely means) within a few
days after the purchase transaction. The purposes of the consumer
notices may not be served if they are handed to passengers as they
check in at the airport, or put in a queue to be mailed just before
each passenger's flight. It is at the time of the purchase transaction
that a passenger puts his or her money at risk on a restricted fare,
and also enters into a contract. Passengers may wish to take certain
actions before the flight as a result of reading the consumer notices,
such as purchasing additional insurance or packing differently (e.g.,
putting expensive items in a carry-on bag). At the same time, we have
also advised carriers that we recognize that if a passenger makes a
ticketless purchase only a few days before departure and it would be
impossible or unreasonably costly to get the required written material
to him or her before the day of the flight, it may be necessary to
provide this written material upon check-in at the airport. Such a
procedure is similar to that now followed when tickets purchased by
telephone within a few days of departure cannot be mailed due to the
lack of time. We seek comment on the question of when any notices, if
required, should be provided.
Some carriers have introduced machines that accept a credit card or
``smart card.'' If the machine delivers a standard ticket, the required
information must be on the ticket, pursuant to the Department's current
regulations on ticket notices. If the machine processes a ticketless
sale, a page containing the required information could be printed out
with each transaction, or the machine could print the passenger-
specific data (i.e., confirmation information and fare) on a receipt
and a supply of the consumer notices could be kept in a container
attached to the machine with a sign asking customers to take one. We
seek comment on whether written notices, if required, should be
provided during such transactions, and how they should be furnished.
Should passengers who read and sign special ``disclosure forms,'' which
provide all currently required notices, in order to obtain a ``smart
card'' also receive notices with each air transportation purchase?
Several airlines and Computer Reservations System vendors allow
subscribers of commercial online services to make reservations and
purchase air transportation (both ticketed and ticketless) online. A
number of airlines have established home pages on the World Wide Web,
raising the prospect of electronic sales of air transportation via that
medium. To the best of our knowledge, most current online sales of air
transportation result in the mailing of a ticket, which should normally
include the required notices. However, in the case of an online
ticketless purchase (as opposed to simply a reservation), the question
arises whether the consumer information that currently appears on or
with tickets should be provided, and if so, how. One way to do this
would be to offer a prominent, convenient and inexpensive (in terms of
connect-time charges) option for the passenger to download or print the
notices during the purchase transaction. Another would be to ``e-mail''
the notices to the passenger's ``e-mail'' address. Simply advising the
customer that the consumer information is available to be read
elsewhere online may not be adequate, just as it would not be
satisfactory in a conventional ticketing transaction for the seller to
tell the passenger where he or she could locate the required notices.
Comments on these issues are invited.
The current regulations concerning ticket notices state that the
notices must appear on tickets issued by travel agents. In two recent
rulemakings the Department has proposed new written notices to be given
to passengers who book code-sharing flights or change-of-gauge flights.
Those proposed rules specifically take ticketless travel into account,
and they would, if adopted, require that the written disclosure
proposed in those rules be given to persons who book through travel
agents. See 59 FR 40836, August 10, 1994, ``Disclosure of Code-Sharing
Arrangements and Long-Term Wet Leases,'' and 60 FR 3778, January 19,
1995, ``Disclosure of Change-of-Gauge Services.'' Those who comment on
this notice on ticketless travel should be aware that the conclusions
and analysis set forth here do not reflect any of the comments filed in
the two dockets cited above. Any party that filed comments in those
dockets on the issue of disclosure by travel agents is invited to file
similar comments here.
We are currently of the view that providing timely written notice
to ticketless passengers should not be unduly burdensome to carriers.
The various procedures discussed in this Notice would represent no
increase in required passenger notices; implementing the procedures
(which we have previously recommended to carriers) would simply mean
that the written information that has in the past been required to be
provided to all passengers should continue to be provided to all
passengers. We believe that virtually all carriers that offer
ticketless travel have been following all of the procedures described
in this Notice since last year, and doing so does not appear to have
inhibited their ticketless programs. The high level of adherence to the
ticketless travel notice procedures recommended by us and described in
this Notice is, in part, attributable to the fact that it is in the
best interests of the carriers and their customers to adopt such a
system, as well as the apparent ease of following those procedures.
The notices in question would easily fit on the front and back of a
single 8\1/2\ by 11 inch sheet of paper. If formatted differently or if
the international notices are not provided to domestic passengers, the
notices fit on the front of a single sheet. (The Department's Aviation
Consumer Protection Division has created a sample sheet which is
available by contacting the individual listed at the beginning of this
notice under ``For Further Information.'' It is also available
electronically through the World Wide Web at http://www.dot.gov/
dotinfo/general/rules/aviation.html)
Some airlines that have implemented or studied ticketless travel
have stated that most of the cost savings result from the elimination
of ``back office'' processing of ticket coupons, physical security for
ticket stock, and cumbersome procedures for refunding lost tickets,
rather than from simply eliminating the printing of tickets
[[Page 1312]]
themselves. Those advantages would be unaffected by notice procedures
such as those described in this document. We request specific comments
on the monetary costs and the benefits of implementing the notice
procedures discussed above.
The procedures discussed in this Notice are not new ones. As
indicated above, over the past year we have communicated our views on
this issue to several carriers that offer ticketless travel, and we
have shared them with the Air Transport Association of America. In the
two recent rulemakings mentioned above in which the Department has
proposed new written notices to be given to passengers on code-sharing
flights or change-of-gauge flights, the proposed provisions have been
phrased to require the notices ``at the time of sale'' rather than on
or with a ``ticket.'' The code-sharing proposal states in the
Supplementary Information section that ``[T]he separate written notice
requirement would apply whether or not the consumer is given an actual
ticket to evidence the transportation * * * ''
It has been suggested that requiring ticketless passengers to be
given written information is inconsistent with the fact that many
airline passengers make reservations in advance but pick up their
tickets at the airport. We seek comment on this point, because we see
no direct inconsistency. The existing rules on ticket notices state
that the notices are to be provided on or with the ticket. If the
ticket is not furnished until the passenger arrives at the airport,
that is when the passenger completes the contract with the carrier and
should receive the notices, even if he or she had made a telephone
reservation two weeks earlier. A passenger who makes a reservation by
phone but purchases the ticket at the airport is not putting his or her
money at risk at the time of the telephone reservation, nor is he or
she entering into a contract at that point.
On the other hand, we recognize that it may not be uncommon for a
passenger to purchase a ticket by credit card over the telephone a few
days before departure, leaving insufficient time for the ticket to be
mailed and requiring that it be picked up at the airport, at which time
the required notices would first be provided. We ask for comments on
the number of travelers who may purchase air travel in this manner and
whether there have been any specific problems associated with such
travelers not receiving required notices until they receive their
ticket upon arrival at the airport. We ask that commenters address
specific reasons for any problems or lack of problems experienced by
travelers in this area (e.g., Are short-notice purchases likely to be
most common among business persons or other frequent travelers who may
already be familiar with contract terms provided in required notices?).
It has also been suggested that there is no justification for
requiring such written notices on ticketless transactions in the
airline industry when reservations for hotel rooms and rental cars are
routinely made by telephone, with merely a confirmation number being
given to the customer. However, these services are seldom paid for in
full at the time of the reservation, and there is generally more
flexibility to change reservations than is the case on a discount
airline ticket. Also, few hotel or car rental transactions are subject
to the terms of a 50-page contract of carriage as is common in air
travel. Finally, state and local governments are not preempted from
regulating hotel stays and car rentals, but those levels of government
are preempted by federal law from regulating air carrier rates, routes
or services. Nonetheless, comments on this issue are welcome.
The Department wishes to arrive at the most efficient and flexible
means of delivering necessary consumer information without hindering
the development of ticketless travel. To that end, we seek comment on
all aspects of the agency views expressed in this Notice, especially
with respect to any increased costs that may be imposed by adherence to
the notice procedures which we have recommended and which are discussed
above.
An electronic version of this document is available at http://
www.dot.gov/dotinfo/general/rules/aviation.html
Issued this 5th day of January, 1996 at Washington, DC.
Mark L. Gerchick,
Acting Assistant Secretary for Aviation and International Affairs.
[FR Doc. 96-546 Filed 1-18-96; 8:45 am]
BILLING CODE 4910-62-P