[Federal Register Volume 67, Number 22 (Friday, February 1, 2002)]
[Rules and Regulations]
[Pages 4899-4901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2652]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 330

[Docket OST-2001-10885]
RIN 2105-AD06


Procedures for Compensation of Air Carriers

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule; amendment.

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SUMMARY: On September 22, 2001, President Bush signed into law the Air 
Transportation Safety and System Stabilization Act (``the Act''). The 
Act makes available to the President funds to compensate air carriers, 
as defined in the Act, for direct losses suffered as a result of any 
Federal ground stop order and incremental losses beginning September 
11, 2001, and ending December 31, 2001, resulting from the September 11 
terrorist attacks on the United States. In order to fulfill Congress' 
intent to expeditiously provide compensation to eligible air carriers, 
the Department used procedures set out in Program Guidance Letters to 
make initial estimated payments amounting to about 50 percent of the 
authorized funds. On October 29, 2001, the Department published a final 
rule and request for comments establishing application procedures for 
air carriers interested in requesting compensation under this statute. 
On January 2, 2002, the Department published amendments to the final 
rule responding to comments and establishing a deadline for submitting 
applications by indirect air carriers and wet lessors. This document 
further amends the final rule to allow additional time for indirect air 
carriers and wet lessors to submit applications for compensation.

DATES: This rule is effective February 1, 2002.

FOR FURTHER INFORMATION CONTACT: Steven Hatley, U.S. Department of 
Transportation, Office of International Aviation, 400 7th Street, SW., 
Room 6402, Washington, DC 20590. Telephone 202-366-1213.

SUPPLEMENTARY INFORMATION: As a consequence of the terrorist attacks on 
the United States on September 11, 2001, the U.S. commercial aviation 
industry suffered severe financial losses. These losses placed the 
financial survival of many air carriers at risk. Acting rapidly to 
preserve the continued viability of the U.S. air transportation system, 
President Bush sought and Congress enacted the Air Transportation 
Safety and System Stabilization Act (``the Act''), Public Law 107-42.
    Under section 101(a)(2)(A-B) of the Act, a total of $5 billion in 
compensation is provided for ``direct losses incurred beginning on 
September 11, 2001, by air carriers as a result of any Federal ground 
stop order issued by the Secretary of Transportation or any subsequent 
order which continues or renews such stoppage; and the incremental 
losses incurred beginning September 11, 2001 and ending December 31, 
2001, by air carriers as a direct result of such attacks.'' The 
Department of Transportation previously disbursed initial estimated 
payments of nearly $2.5 billion of the $5 billion amount that Congress 
authorized, using procedures set forth in the Department's Program 
Guidance Letters that were widely distributed and posted on the 
Department's web site.
    On October 29, 2001 (66 FR 54616), the Department published in the 
Federal Register a final rule and request for comments to establish 
procedures for air carriers who had received or wished to receive 
compensation under the Act. On January 2, 2002 (67 FR 250), the 
Department published amendments to the final rule responding to 
comments and establishing a deadline for submitting requests for 
compensation by indirect air carriers and wet lessors. Under the 
amended

[[Page 4900]]

final rule, indirect air carriers and wet lessors could submit an 
application for compensation within 14 days of the January 2, 2002 
publication date.

Request for Extension of Time

    On January 16, 2002, the Department received a ``Request for 
Extension of Time to Submit Applications for Compensation Pursuant to 
14 CFR Part 330'' from the New York/New Jersey Foreign Freight 
Forwarders and Brokers Association, Inc., the J.F.K. Airport Customs 
Broker Association Inc., and the South Florida Non-Vessel-Operating 
Common Carriers and Non-Aircraft-Operating Common Carriers Association, 
Inc. In the request, the Associations cite the lack of notice that 
indirect air carriers would be considered ``eligible'' for compensation 
and that 14 days is an inadequate amount of time to ``prepare, identify 
shipments (actual and lost), properly document all losses related to 
air cargo operations during the Act's stated time period (September 11 
through December 31, 2001), and submit all required materials prior to 
the January 16, 2002 deadline.'' The Associations requested an 
extension through January 30, 2002.

DOT Response

    After reviewing the request for extension of time, the Department 
has determined that a reasonable basis exists for extending the time 
period. First, although the compensation provisions of the Act had been 
implemented soon after its enactment, the Associations are correct that 
the first indication that indirect air carriers and wet lessors could 
be eligible for compensation--albeit under narrow circumstances--did 
not occur until January 2. Second, the Department is sensitive to the 
fact that small businesses may not have had the opportunity to 
thoroughly review the regulations and collect the necessary information 
within the 14 days provided. Third, extending the time period for 
indirect air carriers and wet lessors to submit a compensation 
application is consistent with the longer time period we gave air taxis 
(which are also primarily small businesses) to submit a compensation 
application. Finally, we believe that any potential prejudice to other 
carriers that have applied for compensation can be largely mitigated by 
proceeding with further payments of estimated compensation under the 
Act based on an estimate of the maximum number of revenue ton-miles 
(RTM) that could be reasonably claimed by both present and new 
applicants.
    Accordingly, the Department hereby amends the final rule to allow 
an additional 7 calendar days from the date of this publication for 
indirect air carriers and wet lessors to submit a compensation 
application. However, we will adhere strictly to this new deadline. The 
Department will not accept late submissions unless an indirect air 
carrier or wet lessor demonstrates to the satisfaction of the 
Department that extremely unusual, extenuating circumstances, 
completely beyond its control, prevented it from making a timely 
submission and the Department determines that accepting the application 
is in the public interest.

Information Applicants Must Submit

    Like all other applicants, indirect carriers and wet lessors (air 
carriers who provide ``lift'' to other air carriers under wet leases) 
applying under Sec. 330.21(d), which is the section that contains the 
application deadline being extended today, should be careful to meet 
the documentation requirements of the regulations.
    In administering the regulatory requirements, DOT is aware that the 
financial situations of some carriers may be extremely precarious, and 
that Congress intended they be afforded prompt action on their 
applications for relief. However, DOT must be scrupulous in assuring 
that public funds are disbursed in strict accord with statutory 
requirements. Thus, applicants should be aware that DOT will not 
process applications that fail to provide all of the information 
required. That information was set out in Part 330, and for all-cargo 
indirect air carriers and wet lessors, the data submission requirements 
of section 330.31 require particular attention.
    A carrier that claims RTMs must document the RTMs generated for its 
own account, which was flown on its all-cargo flights, and it must 
identify the RTMs generated by other air carriers (under Aircraft, 
Crew, Maintenance, Insurance (ACMI) wet lease lift arrangements or 
other agreements). This information must be presented by carrier name 
and carrier code, with the number of RTMs clearly stated and segregated 
between RTMs generated by the claiming carrier and RTMs generated by 
other air carriers. Finally, applicants are again reminded that their 
applications must be accompanied by a certified statement, from the 
company's Chief Executive Officer, Chief Financial Officer, or Chief 
Operating Officer or, if those titles are not used, the equivalent 
officer, that the information was prepared under his or her supervision 
and is true and accurate under penalty of law. The claimant should also 
provide a similar certified statement from the other air carrier(s) 
stating that these RTMs were not claimed and will not be claimed by the 
other air carrier.
    In meeting these requirements, applicants should especially ensure 
that written evidence is submitted that: (1) Demonstrates that the 
applicant meets the United States citizenship requirements to be an 
``air carrier'' (49 U.S.C. Sec. 40102); (2) clearly establishes the 
number of RTMs actually flown, segregated as necessary by the identity 
of the reporting carrier; (3) clearly establishes that the RTMs were 
generated on all-cargo flights only and not generated as ``belly 
cargo'' on combined passenger/cargo flights; \1\ and (4) clearly 
establishes, in writing, both the carrier's entitlement to the RTMs and 
that no other carrier has claimed or will claim the RTMs.
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    \1\ Congress set out separate eligibility schemes for passenger 
and cargo carriers, and included combined passenger-cargo flights 
within the passenger-only category. Compensation for passenger 
flights--including ``combi'' flights--is based upon available seat-
miles, not RTMs, making it clear that Congress did not intend 
separate compensation for belly-cargo.
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Regulatory Analysis and Notices

    This rule is an economically significant rule under Executive Order 
12886, since it will facilitate the distribution of more than a billion 
dollars into the economy during the 12-month period following its 
issuance. Because of the need to move quickly to provide compensation 
to air carriers for the purpose of maintaining a safe, efficient, and 
viable commercial aviation system in the wake of the events of 
September 11, 2001, we are not required to provide an assessment of the 
potential cost and benefits of this regulatory action. The Department 
has determined that this rule is being issued in an emergency 
situation, within the meaning of Section 6(a)(3)(D) of Executive Order 
12866. However, this impact is expected to be a favorable one: making 
these funds available to air carriers to compensate them for losses 
resulting from the terrorist attacks of September 11th.
    Because a notice of proposed rulemaking is not required for this 
rulemaking under 5 U.S.C. 553, we are not required to prepare a 
regulatory flexibility analysis under 5 U.S.C. 604. However, we do note 
that this rule may have a significant economic effect on a substantial 
number of small entities. Among the entities in question are many 
indirect air carriers, wet lessors and air taxis, as well as some 
commuters and small certificated air carriers. In

[[Page 4901]]

analyzing small entity impact for purposes of the Regulatory 
Flexibility Act, we believe that, to the extent that the rule impacts 
small air carriers, the impact will be a favorable one, since it will 
consist of receiving compensation. We have facilitated the 
participation of small entities in the program by allowing a longer 
application period for indirect air carriers, wet lessors and air 
taxis, which are generally the smallest carriers covered by this rule 
and which generally do not otherwise report traffic or financial data 
to the Department. The Department has also concluded that this rule 
does not have sufficient Federalism implications to warrant the 
consultation requirements of Executive Order 13132.
    We are making this rule effective immediately, without prior 
opportunity for public notice and comment. Because of the need to move 
quickly to provide compensation to air carriers for the purpose of 
maintaining a safe, efficient, and viable commercial aviation system in 
the wake of the events of September 11, 2001, prior notice and comment 
would be impractical, unnecessary, and contrary to the public interest. 
Consequently, prior notice and comment under 5 U.S.C. 553 and delay of 
the effective date under 5 U.S.C. 801, et seq., are not being provided. 
On the same basis, we have determined that there is good cause to make 
the rule effective immediately, rather than in 30 days.
    The Office of Management and Budget has approved the information 
collection requirements of this rule, with Control Number 2105-0546.

List of Subjects in 14 CFR Part 330

    Air carriers, Grant programs--transportation, Reporting and 
recordkeeping requirements.

    Issued this 30th day of January, 2002, at Washington, DC.
Read C. Van de Water,
Assistant Secretary for Aviation and International Affairs.

    For the reasons set forth in the preamble, the Department amends 14 
CFR part 330 as follows:

PART 330--PROCEDURES FOR COMPENSATION OF AIR CARRIERS

    1. Authority citation for Part 330 continues to read as follows:

    Authority: Pub. L. 107-42, 115 Stat. 230 (49 U.S.C. 40101 note); 
sec. 124(d), Pub. L. 107-71, 115 Stat. 631 (49 U.S.C. 40101 note).


    2. Revise Sec. 330.21(d) introductory text to read as follows:


Sec. 330.21  When must air carriers apply for compensation?

* * * * *
    (d) Notwithstanding any other provision of this section, if you are 
an eligible air carrier that did not submit an application or wishes to 
amend its application, you may do so by February 8, 2002 if you are one 
of the following:
* * * * *
[FR Doc. 02-2652 Filed 1-30-02; 4:57 pm]
BILLING CODE 4910-62-P