[Federal Register Volume 61, Number 107 (Monday, June 3, 1996)]
[Proposed Rules]
[Pages 27818-27821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13815]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 250

[Docket No. OST-96-1255 Notice 96-7]
RIN 2105-AC45


Oversales Signs

AGENCY: Office of the Secretary, DOT.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Department proposes to eliminate a consumer notice about 
airline oversales that is required to appear on signs at airports, city 
ticket offices, and travel agencies, on the basis that the information 
will continue to be

[[Page 27819]]

available through other means. This action is taken on the Department's 
initiative, as a result of the President's Regulatory Reinvention 
Initiative.

DATES: Comments on the issues discussed in this document should be 
received by July 18, 1996. Late-filed comments will be considered to 
the extent practicable.

ADDRESSES: Comments should be sent to Docket Clerk, Docket No. OST-96-
1255, 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 10:00 a.m. to 5:00 p.m. at the address listed for mailing 
comments. 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.
    An electronic version of this notice of proposed rulemaking will be 
available at http://www.dot.gov/dotinfo/general/rules/aviation.html 
shortly after publication in the Federal Register.

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 4107, Washington, DC 20590, telephone (202) 
366-5952.

SUPPLEMENTARY INFORMATION: Airlines overbook (accept more reservations 
than there are seats on a flight) in order to compensate for ``no 
shows'' (passengers with confirmed reservations who do not show up for 
their flight and do not cancel their reservation). Overbooking fills 
seats that would otherwise go empty, thus keeping load factors up and 
fares down. It also allows more passengers to obtain reservations on 
the flight of their choice.
    The Department of Transportation (Department or DOT) allows 
overbooking but regulates it; see 14 CFR Part 250. Section 250.11(a) of 
this regulation requires U.S. and foreign air carriers and travel 
agencies to display a notice about overbooking at every desk or 
position in the United States where tickets are sold. (The original 
document adopting this rule can be found at 42 FR 12422, March 4, 
1977.) The notice must be in boldface type at least one-fourth of an 
inch high, and must read as follows:

Notice--Overbooking of Flights

    Airline flights may be overbooked, and there is a slight chance 
that a seat will not be available on a flight for which a person has 
a confirmed reservation. If the flight is overbooked, no one will be 
denied a seat until airline personnel first ask for volunteers 
willing to give up their reservation in exchange for a payment of 
the airline's choosing. If there are not enough volunteers the 
airline will deny boarding to other persons in accordance with its 
particular boarding priority. With few exceptions persons denied 
boarding involuntarily are entitled to compensation. The complete 
rules for the payment of compensation and each airline's boarding 
priorities are available at all airport ticket counters and boarding 
locations. Some airlines do not apply these consumer protections to 
travel from some foreign countries, although other consumer 
protections may be available. Check with your airline or your travel 
agent.

    The oversale protections of Part 250 do not apply to inbound 
international flights to the United States. Section 250.11(e) states 
that any U.S. or foreign air carrier that chooses to fully comply with 
Part 250 on inbound international flights to the United States need not 
use the last two sentences of the above Sec. 250.11(a) notice.
    In his Regulatory Reinvention Initiative Memorandum of March 4, 
1995, President Clinton directed Federal agencies to conduct a page-by-
page review of all of their regulations and to ``eliminate or revise 
those that are outdated or otherwise in need of reform.'' In response 
to that directive, the Department has undertaken a review of its 
aviation economic and consumer regulations as contained in 14 CFR 
Chapter II. This rulemaking is one result of those efforts. Other 
rulemakings will address other regulations.
    Section 250.11(b) requires that the text of the oversales sign also 
appear on a notice that must accompany every ticket, and we plan to 
leave this ticket notice requirement in place. The Department has 
tentatively decided that it is no longer necessary to require this 
notice both on signs and in tickets, and consequently we are proposing 
to eliminate the requirement for the oversales sign for carriers and 
travel agencies that provide the ticket notice. Most carriers that 
offer ``ticketless'' transportation send passengers a copy of the 
consumer notices required by DOT rules, including the Sec. 250.11(b) 
notice.1 Where a carrier does not provide this notice in writing 
to each customer, however, the notice would have to continue to appear 
on signs at locations where that carrier sells tickets, e.g. airports 
and city ticket offices.
---------------------------------------------------------------------------

    \1\ On January 19, 1996, the Department published a Federal 
Register notice seeking comment on the issue of passenger notices as 
applied to ticketless travel. See 61 FR 1309; also available on the 
World Wide Web at http://www.dot.gov/dotinfo/general/rules/
aviation.html. The comment period for that Notice ended March 19, 
1996. After examining the comments in that proceeding, the 
Department will determine, among other things, whether ``ticket'' in 
the context of currently required ticket notices would include air 
transportation sold without a conventional paper ticket and, 
consequently, whether the existing rules require ticketless sales to 
be accompanied by the passenger notices that are currently required 
to be included on or with tickets.
---------------------------------------------------------------------------

    We have decided to propose elimination of the sign rather than the 
ticket notice because the ticket notice is normally provided earlier in 
the process, and it is a record that the passenger can retain. At 
airports, the oversales sign is sometimes placed in locations where it 
is difficult to read. In addition, there have been occasional 
objections from airports over the placement of required signage. 
Eliminating the requirement for the sign should be particularly 
beneficial to the more than 45,000 travel agencies in the United 
States, many of whom are small businesses.
    This revision should not impair consumer protection. Air travelers 
will continue to receive the same information via ticket notices. In 
addition, Sec. 250.9 requires carriers to give a lengthier written 
handout to anyone who is actually denied boarding, and to anyone else 
who requests this handout. (The ticket notice makes reference to this 
handout.) Finally, the substantive consumer protections of Part 250 
continue to apply even where specific passengers might not receive 
notice about those protections. In other words, during an oversale 
situation, carriers are under an affirmative obligation to solicit 
volunteers and pay compensation to all eligible passengers who are 
denied boarding involuntarily, not simply those who request these 
services as a result of reading a notice.
    As indicated above, the ticket notice requirement in Sec. 250.11(b) 
is being retained. The text of the ticket notice is not contained in 
current Sec. 250.11(b); instead, because the text of the ticket notice 
and the sign is identical, current Sec. 250.11(b) (the ticket notice 
provision) incorporates the notice text by reference to the text in 
Sec. 250.11(a) (the sign provision). Because Sec. 250.11(a) is being 
eliminated, we are proposing to move the text of the ticket notice to 
Sec. 250.11(b). We are also proposing to change the word ``notices'' in 
the first sentence of current Sec. 250.11(b) to ``notice''; the 
singular form is more accurate and is the form used in the remainder of 
current Sec. 250.11(b). Finally, we are proposing to remove the word 
``station'' from the phrase ``desk,

[[Page 27820]]

station or position'' in current Sec. 250.11(a) (proposed 
Sec. 250.11(b)) because it is confusing. This provision refers to an 
individual staffed counter position, whereas the airlines use 
``station'' to refer to a carrier's entire operation at a particular 
city.
    We are also taking this opportunity to propose changes to certain 
outdated language in Part 250. We are proposing to change references to 
the Civil Aeronautics Board, our predecessor in aviation economic 
regulation, to the Department of Transportation. Citations to sections 
of the Federal Aviation Act shall be changed to reflect the current 
section numbers of these statutory provisions in the United States 
Code, as a result of a 1994 recodification which absorbed that Act 
directly into the U.S. Code and renumbered its sections. A statutory 
change that occurred at the time of this recodification incorporated 
``overseas air transportation'' into ``interstate air transportation'' 
and eliminated the former term, and we are proposing to make 
corresponding changes to the term ``overseas air transportation'' 
wherever it occurs in Part 250.

Regulatory Analyses and Notices

    This NPRM is considered to be a non-significant rulemaking under 
DOT's regulatory policies and procedures, 44 FR 11034. The NPRM was not 
subject to review by the Office of Information and Regulatory Affairs 
pursuant to Executive Order 12866.
    The proposal would have minimal economic impact, and accordingly no 
regulatory evaluation has been prepared. The principal impact will be 
that several dozen air carriers and more than 45,000 travel agencies, 
many of whom are small businesses, will no longer have to display this 
sign. The economic impact is difficult to quantify. There has been no 
continuing direct cost associated with display of the signs, and thus 
elimination of this requirement will not produce an immediate monetary 
savings. Some carriers may choose not to incur the labor cost of 
removing signs, particularly since the information on the sign is still 
accurate. The major economic benefit will result from the fact that 
this sign will not have to be erected at future airline and travel 
agency locations. That will bring about both material and labor 
savings.
    The NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that it does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment.
    While the proposal would benefit a large number of small 
businesses, I certify that the proposal, if adopted, would not have a 
significant economic impact on a substantial number of small entities.

List of Subjects in 14 CFR Part 250

    Air carriers, Consumer protection.

    For the reasons set forth above, the Department proposes to amend 
title 14, chapter II, subchapter A, part 250 as follows:

PART 250--[AMENDED]

    1. The authority citation for part 250 would continue to read as 
follows:

    Authority: 49 U.S.C. chapters 401, 411, 413, 417.

    2. In Sec. 250.1, revise the definition of ``Carrier'' to read as 
follows:


Sec. 250.1  Definitions.

* * * * *
    Carrier means
    (1) A direct air carrier, except a helicopter operator, holding a 
certificate issued by the Department of Transportation pursuant to 49 
U.S.C. 41102 (formerly sections 401(d)(1), 401(d)(2), 401(d)(5) and 
401(d)(8) of the Federal Aviation Act of 1958), or an exemption from 49 
U.S.C. 41101 (formerly section 401(a) of the Act), authorizing the 
transportation of persons, or
    (2) A foreign route air carrier holding a permit issued by the 
Department pursuant to 49 U.S.C. 41301 through 41306 (formerly section 
402 of the Act), or an exemption from the appropriate provision of 49 
U.S.C. 41301 through 41306, authorizing the scheduled foreign air 
transportation of persons.


Sec. 250.2  [Amended]

* * * * *
    3. In Sec. 250.2, remove the words ``or overseas.''


Sec. 250.2  [Amended]

    4. In Sec. 250.2b(b), remove the word ``Board'' in the last 
sentence and add in its place ``DOT.''


Sec. 250.4  [Amended]

    5. In Sec. 250.4(c), remove ``the Board'' and add in its place 
``DOT.''


Sec. 250.5  [Amended]

    6. In Sec. 250.5(a), remove the words ``and overseas'' in the last 
sentence.


Sec. 250.9  [Amended]

    7. In Sec. 250.9(b), in the subsection entitled Compensation for 
Denied Boarding, remove the phrase ``Civil Aeronautics Board'' and add 
in its place ``Department of Transportation.''


Sec. 250.9  [Amended]

    8. In Sec. 250.9(b), in the subsection entitled Amount of Denied 
Boarding Compensation, remove ``the CAB'' and add in its place ``DOT.''


Sec. 250.11  [Amended]

    9. Section 250.11(a) is removed and reserved.
    10. Paragraph (b) of Sec. 250.11 is revised to read as follows:


Sec. 250.11  Public disclosure of deliberate overbooking and boarding 
procedures.

* * * * *
    (b) Every carrier shall include with each ticket sold in the United 
States the following notice, printed in at least 12-point type. The 
notice may be printed on a separate piece of paper, on the ticket 
stock, or on the ticket envelope. The last two sentences of the notice 
shall be printed in a typeface contrasting with that of the rest of the 
notice.

Notice--Overbooking of Flights

    Airline flights may be overbooked, and there is a slight chance 
that a seat will not be available on a flight for which a person has 
a confirmed reservation. If the flight is overbooked, no one will be 
denied a seat until airline personnel first ask for volunteers 
willing to give up their reservation in exchange for a payment of 
the airline's choosing. If there are not enough volunteers the 
airline will deny boarding to other persons in accordance with its 
particular boarding priority. With few exceptions persons denied 
boarding involuntarily are entitled to compensation. The complete 
rules for the payment of compensation and each airline's boarding 
priorities are available at all airport ticket counters and boarding 
locations. Some airlines do not apply these consumer protections to 
travel from some foreign countries, although other consumer 
protections may be available. Check with your airline or your travel 
agent.
    A ``ticketless'' carrier that does not provide a copy of this 
notice to passengers in writing in conjunction with air transportation 
purchased in the United States must display this notice continuously on 
a sign in a conspicuous public place at each desk and position in the 
United States staffed by its employees or its contractor (not including 
travel agencies) to sell transportation to passengers. The notice must 
be clearly visible and clearly readable to the traveling public and 
must be in boldface type at least one-fourth of an inch high.


Sec. 250.11  [Amended]

    11. In Sec. 250.11(c), remove the phrase ``paragraphs (a) and (b) 
of this section'' and add in its place ``paragraph (b) of this 
section.''

[[Page 27821]]

Sec. 250.12  [Amended]

    12. In Sec. 250.11(e), remove ``notices'' and add in its place 
``notice'' and remove the phrase ``paragraph (a) of this subsection'' 
and add in its place ``paragraph (b) of this section.''

    Issued this 1st day of April, 1996 at Washington, D.C.
Charles A. Hunnicutt,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 96-13815 Filed 5-31-96; 8:45 am]
BILLING CODE 4910-62-P