[Federal Register Volume 70, Number 32 (Thursday, February 17, 2005)]
[Proposed Rules]
[Pages 8140-8198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2861]



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Part II





Department of Transportation





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Office of the Secretary



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14 CFR Parts 241 and 249



Aviation Data Modernization; Proposed Rule

  Federal Register / Vol. 70, No. 32 / Thursday, February 17, 2005 / 
Proposed Rules  

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 241 and 249

[Dockets No. OST-1998-4043]
RIN 2105-AC71


Aviation Data Modernization

AGENCY: Office of the Secretary, Department of Transportation.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The Department of Transportation (the Department) is proposing 
to revise the rules governing the nature, scope, source, and means for 
collecting and processing aviation traffic data. Those reporting 
requirements are known as the: Origin--Destination Survey of Airline 
Passenger Traffic (O&D Survey); and Form 41, Schedule T-100--U.S. Air 
Carrier Traffic and Capacity Data by Nonstop Segment and On-flight 
Market and Form 41, Schedule T-100(f)--Foreign Air Carrier Traffic Data 
by Nonstop Segment and On-flight Market (collectively, the T-100/T-
100(f)). Current traffic statistics no longer adequately measure the 
size, scope and strength of the air travel industry. This NPRM proposes 
to simplify the requirements placed upon Carriers reporting the O&D 
Survey. The proposed O&D Survey will eliminate the ambiguity in the 
identification of the Participating Carrier and eliminate the need for 
manual data collection by designating the Issuing Carrier as the 
Participating Carrier. It will also increase accuracy by expanding the 
volume of data to 100 percent of Ticketed Itineraries, and make the 
data more useful to Department, airport, and industry planners by 
collecting broader information about the Ticketed Itinerary sale and 
the scheduled itinerary details. The proposed T-100/T-100(f) will 
improve the quality of the data by maximizing the congruence of the O&D 
Survey and the T-100/T-100(f).

DATES: Comments must be submitted by April 18, 2005.

FOR FURTHER INFORMATION CONTACT: Richard Pittaway, Office of Aviation 
Analysis, 400 Seventh St. SW., Room 6401, Washington, DC 20590, (202) 
366-8856.

SUPPLEMENTARY INFORMATION:

Electronic Access

    You can view and download this document by going to the Web site of 
the Department's Docket Management System (http://dms.dot.gov/). On 
that page, click on ``simple search.'' On the next page, type in the 
last four digits of the docket number shown on the first page of this 
document, 4043. Then click on ``search.'' An electronic copy of this 
document also may be downloaded from http://regulations.gov and from 
the Government Printing Office's Electronic Bulletin Board Service at 
(202) 512-1661. Internet users may reach the Office of the Federal 
Register's home page at: http://www.archives.gov/federal_register/index.html and the Government Printing Office's database at: http://www.gpoaccess.gov/fr/index.html.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
Department's complete Privacy Act Statement in the Federal Register 
published on April 11, 2000 (65 FR 19477-78) or you may visit http://dms.dot.gov.

Public Meeting

    Based on the significant proposed changes to the O&D reporting 
system, the Department is considering holding a public meeting. If 
necessary, the public meeting would allow the Department to gather 
additional input from the Air Carriers and other stakeholders. Any 
meeting would be open to the public and a record of the meeting would 
be placed in the rulemaking docket. If the Department decides a public 
meeting is necessary, the Department will publish a notice announcing 
the meeting in the Federal Register.

Table of Contents

A. Authority
B. Background
    1. Current Method of Collecting O&D Survey Data
    2. Current Method of Collecting T-100/T-100(f)
    3. Office of Inspector General's Report
    4. Advanced Notice of Proposed Rulemaking
C. Need for Data Modernization
    1. Background
    2. Review of Deficiencies in the Current O&D Survey
D. O&D Survey Data Usage
    1. The Department
    2. Other Government Agencies
    3. Other Stakeholders
E. Limitations of O&D Survey and T-100/T-100(f)
F. Need for Regulatory Action
G. Development of the Record in this Rulemaking
H. Scope of this Rulemaking
I. O&D Survey Redesign
    1. Summary of the Proposed O&D Survey
    2. Discussion of the Proposed O&D Survey
    3. Reporting Requirements
    4. Significant Issues Related to the Data to Be Collected
    5. Transition Period
J. T-100/T-100(f) Considerations
    1. Background
    2. T-100/T-100(f) Changes to be Considered
K. Data Dissemination
    1. Dissemination of Data by Month
    2. Proposed Construction of One-way Trips
    3. Proposed Proration Method
    4. Proposed Changes to Confidentiality
L. Rulemaking Analyses and Notices
M. Glossary
N. Proposed Rule

A. Authority

    The Civil Aeronautics Board Sunset Act of 1984 (Pub. L. 98-443) 
requires the Department of Transportation (the Department), under the 
authority of the Secretary for Transportation (49 U.S.C. 329(b)(1)), to 
collect and disseminate information on civil aeronautics and aviation 
transportation in the U.S., other than that collected and disseminated 
by the National Transportation Safety Board. The Department must, at 
minimum, collect information on the origin and destination of 
passengers and information on the number of passengers traveling by air 
between any two points in air transportation. Additionally, the 
Department must be responsive to the needs of the public and 
disseminate information to make it easier to adapt the air 
transportation system to the present and future needs of the commerce 
of the U.S. (49 U.S.C. 40101(a)(7)). In meeting this responsibility, 
the Department collects data submitted under 14 CFR Part 217 (Reporting 
Traffic Statistics by Foreign Air Carriers in Civilian Scheduled, 
Charter, and Nonscheduled Services), 14 CFR Part 241 (Uniform System of 
Accounts and Reports for Large Certificated Air Carriers) and 14 CFR 
Part 298 (Exemptions for Air Taxi and Commuter Air Carriers).
    Under 14 CFR Part 217, Foreign Air Carriers that are authorized by 
the Department to provide scheduled passenger services to or from the 
U.S. must file Form 41 Schedule T-100(f) ``Foreign Air Carrier Traffic 
Data by Nonstop Segment and On-flight Market,'' accumulated in 
accordance with the data elements prescribed in Section 217.5 (14 CFR 
Part 217 section 217.3). These requirements reflect changes made to 
international data submissions by large Air Carriers (Docket No. OST-
1996-1049, RIN 2105-AC34, 62 FR 6715; Docket No. OST-1998-4043, RIN 
2139-AA08, 67 FR 49217).
    Under 14 CFR Part 241, all U.S. certificated and commuter U.S. Air 
Carriers must report their traffic

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movements in the T-100. Under 14 CFR Part 217, all Foreign Air Carriers 
that operate to the U.S. must report their traffic movements involving 
a U.S. point in the T-100(f). Participation in the O&D Survey is 
required by 14 CFR Part 241 Section19-7. The source documents are 
airline tickets ending in double-zero (major domestic markets) or zero 
(all other markets), reported only by the first honoring and Operating 
Air Carrier, which shall report the required data for the entire 
Ticketed Itinerary.

B. Background

    This NPRM is part of an effort by the Department to conduct a 
broad-based review of the requirements for aviation data and to 
modernize the way the Department collects, processes and disseminates 
aviation data. Specifically, it addresses the collection and processing 
of traffic reporting requirements described in the O&D Survey and T-
100/T-100(f). It reflects prior analyses of the aviation data collected 
and processed by the Department and the effective use of that data by 
the government, the airline industry, consumers, and other 
stakeholders, which indicate a need to revise and update the O&D Survey 
and T-100/T-100(f).

1. Current Method of Collecting O&D Survey Data

    The O&D Survey collects a sample of itineraries quarterly from 
large certificated U.S. Air Carriers. Foreign Air Carriers granted 
antitrust immunity as part of code-share agreements with U.S. Air 
Carriers contribute O&D Survey data under a similar but separate 
program. The current method of gathering data for the O&D Survey 
requires large certificated Air Carriers that transport passengers 
(i.e. ``Participating Carriers'') to examine each flight coupon to 
determine whether the ticket, or Ticketed Itinerary, is reportable. 
Reportable tickets are those with a ticket number ending in a double-
zero (major domestic markets) or zero (all other markets). In practice, 
tickets ending in zero are reported, presumably representing ten 
percent of all Ticketed Itineraries. The ticket must be reported unless 
it is apparent that another Participating Carrier has already reported 
it. If it is not apparent, then the Participating Carrier must report 
the ticket. Data are reported quarterly.
    If the Participating Carrier issued the ticket, it will likely have 
saved the itinerary data for use in reporting the ticket to the 
Department's O&D Survey. If the Participating Carrier did not issue the 
ticket, the Carrier must either receive the necessary data from the 
Carrier that issued the ticket or employ staff to examine the physical 
passenger document and transcribe as much of the Ticketed Itinerary as 
possible from a used flight coupon.

2. Current Method of Collecting T-100/T-100(f)

    The current method of gathering data for the T-100/T-100(f) 
requires Reporting Carriers (e.g. all Carriers required by 14 CFR Part 
217, 14 CFR Part 241, and 14 CFR Part 298 to report operating 
statistics) to report the movement of traffic in accordance with the 
uniform classifications prescribed. They are compiled by Flight-Stage 
as actually performed and represent 100 percent of operations. The 
requirements reflect revisions made to T-100/T-100(f) reporting 
requirements for both Foreign and Domestic Air Carriers (Docket No. 
OST-1996-1049, RIN 2105-AC34, 62 FR 6715; Docket No. OST-1998-4043, RIN 
2139-AA08, 67 FR 49217). Data are submitted monthly.

3. Office of Inspector General's Report

    At the request of The Bureau of Transportation Statistics (BTS), 
the Office of the Inspector General (OIG) audited the Passenger Origin-
Destination Survey (O&D Survey) data submitted by the Air Carriers to 
the Department. The OIG report, released in February 1998, acknowledged 
that passenger data was critical for basic departmental 
responsibilities and for making sound policy decisions. It declared the 
O&D Survey to be insufficiently reliable for use in supporting these 
decisions. Specifically, the OIG report concluded that ``[a]lthough O&D 
data are used by Department analysts to provide quantitative support 
for key policy and funding decisions, we found that O&D data are 
unreliable for use in making these important decisions.'' (Office of 
Inspector General Audit Report Number AV-1998-086 Feb. 24, 1998 p.iii).

4. Advanced Notice of Proposed Rulemaking

    In July 1998, the Office of the Assistant Secretary for Aviation 
and International Affairs and BTS jointly issued an advance notice of 
proposed rulemaking (ANPRM) (July 15, 1998, 63 FR 28128) as a first 
step in reviewing aviation data collected by the Department (Docket 
OST-1998-4043-1). The Department solicited comments about (1) whether 
the existing airline traffic and financial data should be amended, 
supplemented or replaced; (2) whether selected forms and reports should 
be retained, modified, or eliminated; (3) whether aviation data should 
be filed electronically; and (4) how the aviation data system should be 
reengineered to enhance efficiency and reduce costs for both the 
Department and the airline industry. The ANPRM explored not only the 
scope of traffic and financial information, but also the sources of 
data, the timing of the reporting of data, the methods of processing 
data, and the release of data to the public. The Department 
subsequently conducted additional outreach and research activities to 
further assess data requirements and potential improvements to the 
reporting and processing systems. In the ANPRM, the Department stated 
its goal that the aviation data systems should be reviewed and 
modernized to adapt to the present and future needs of commerce.
    As a result of the ANPRM, the Department issued an NPRM on August 
28, 2001, to assessment changes to the T-100/T-100(f) Traffic Reporting 
System (Docket No. OST-1998-4043, RIN 2139-AA08, 66 FR 45201). On July 
30, 2002, the Department issued a final rule modifying the T-100/T-
100(f) Traffic Reporting System (Docket No. OST-1998-4043, RIN 2139-
AA08, 67 FR 49217). This NPRM proposes additional data modernization 
changes that were not previously addressed in prior rulemakings.

C. Need for Data Modernization

    In 1947, the U.S. Government under the Civil Aeronautics Board 
(CAB) began keeping information about the origin and destination of 
passenger air travel based on passenger reservations. In 1968, the O&D 
Survey was overhauled and the basis of counting passengers was changed 
to the present system of counting sold tickets reported after first 
use. With the exception of a few added data elements to record code-
share ticketing, the O&D Survey collected today has changed little 
since 1968, although some changes were made to the T-100/T-100(f) 
(Docket OST-1996-1049, RIN 2105-AC34, 62 FR 6715; Docket OST-1998-4043, 
RIN 2139-AA08, 67 FR 49217). The industry, however, has changed a great 
deal since then.

1. Background

    Worldwide, the scheduled air transportation industry is divided 
into those Carriers that share passengers with one another on the same 
Air Travel Ticket, a practice called interlining, and those Carriers 
that operate independently without interline agreements. For both types 
of Carriers, only one Carrier serves as the Issuing Carrier, but for 
interlining Carriers, the

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Issuing Carrier plays a coordinating role for all other Carriers 
included in the Ticketed Itinerary. The Issuing Carrier is responsible 
for holding the ticket purchaser's funds until they are earned, paying 
taxes due to government agencies, and paying the travel agent 
commission, if any. The Issuing Carrier is also known as the plating 
Carrier because, in the age when flight coupons had red carbon paper 
backing, the Issuing Carrier's three-digit identifier was stamped on a 
metal plate that travel agents and airline ticket agents used to 
imprint the first three positions of a 13-digit ticket number of an Air 
Travel Ticket.
    The Issuing Carrier holds the ticket purchaser's funds until they 
have been earned by providing transportation to the passenger. When the 
passenger's travel plans include travel on multiple Carriers on the 
same Ticketed Itinerary, the Carrier that transports the passenger 
provides evidence to the Issuing Carrier that the passenger has been 
transported in order to receive its share of the funds. This process is 
called ``interline settlement'' or ``interline billing.'' When 
presented with evidence that the passenger has been transported, the 
Issuing Carrier credits the billing Carrier with its prorated share of 
the passenger's fare. Since sharing passengers internationally is 
common, the interline billing process is standardized worldwide across 
all Carriers that choose to interline passengers. Because travel 
agencies all over the world sell tickets on Carriers located in many 
countries, and because passenger travel plans often involved multiple 
Carriers, interlining Carriers and travel agents worldwide created the 
standard agent ticket, which is used universally by interlining 
Carriers. These Carriers use identical, or near identical, billing 
processes to facilitate the handling of shared tickets. Even when 
travel is scheduled on a single Carrier, extenuating circumstances due 
to weather, mechanical, or other operational difficulties can result in 
passengers being transported on multiple Carriers. After accommodating 
a displaced passenger, the Carriers use standard interline billing 
processes to transfer funds from the Issuing Carrier to the Carrier 
that transported the passenger. Carriers that do not choose to 
interline passengers and that do not rely on travel agents to 
distribute their travel products are not bound by these standard 
procedures and agreements, but most Carriers choose to use industry 
standard procedures nonetheless.
    Tax authorities generally require the Issuing Carrier to remit all 
taxes and fees associated with the Air Travel Ticket on behalf of all 
Carriers that appear on the Ticketed Itinerary. The Issuing Carrier, 
regardless of the identity of the Carrier that will operate each Flight 
Coupon Stage, will remit the tax tied to each Flight Coupon Stage. A 
case in point is the Aviation and Transportation Security Act (ATSA), 
Public law 107-71. Under the ATSA, the Issuing Carrier remits the 
September 11th Security fee. Even though the fee is calculated based 
upon the number of Flight Coupon Stages in the Air Travel Ticket, 
carriers that transport the passengers have no responsibility for 
collecting and remitting this fee.
    For example, a passenger purchasing non-stop service transportation 
from Washington to St. Louis and back will be assessed the September 
11th Security Fee one time for each One-way Trip. The Issuing Carrier 
will remit the September 11th Security Fee within 60 days of the 
purchase of the ticket, regardless of the scheduled travel date. Here, 
if U.S. Airways, Inc. (US Airways) issues a Ticketed Itinerary with 
outbound travel on US Airways and return travel scheduled several 
months later on United Air Lines (United), it is the responsibility of 
US Airways, as the Issuing Carrier, to remit the September 11th 
Security fees for travel on both outbound and return travel. Passengers 
pay the September 11th Security fee based on the number of enplanements 
described in the Ticketed Itinerary, not on the number of actual 
enplanements that the exigencies of travel actually require the 
passenger to make. If, on the day the passenger leaves Washington, a 
problem arises that results in the passenger traveling to another city 
(and, perhaps, on another Carrier) to change planes before continuing 
on to St. Louis, the passenger is not assessed a second September 11th 
Security Fee because the assessment of the September 11th Security Fee 
was made by the Issuing Carrier when the itinerary was issued.
    It is a misnomer to say that travel agents issue tickets. Travel 
agents distribute (sell or issue for free) Ticketed Itineraries on 
behalf of an Issuing Carrier, and send the pertinent information about 
the sale, and the proceeds of the sale, to the Issuing Carrier. 
Originally, travel agents remitted funds directly to Issuing Carriers. 
With growing numbers of airlines, the international nature of air 
travel, and growing numbers of travel agencies, Carriers and travel 
agencies throughout the world formed clearing houses, which came to be 
known as Bank Settlement Plans (BSPs), to provide a central location 
for handling Air Travel Tickets distributed (sold) by travel agents. 
There is a BSP for each country or, sometimes, clusters of countries. 
Travel agencies in North America remit sales to the Airlines Reporting 
Corporation (ARC), organized in the early 1980s, which operates in much 
the same way that BSPs operate in other parts of the world.
    When the current O&D Survey was established in the 1960s, the most 
common accounting system was a lift-based system. The airline industry 
used flown flight coupons, also known as lifts, as the primary source 
of accounting and marketing data. It was customary to make a 
reservation, and then ticket the reservation at a later time. The 
ticket consisted of one flight coupon for each enplanement and a 
summary or auditor's coupon. Every flight coupon contained all the 
information about the itinerary.
    Moving all evidence of the ticket sale to each airline's accounting 
center was time-consuming and laborious. In the years prior to the 
widespread use of computers, tickets sold in the U.S. took weeks to 
reach the Carrier; tickets sold in foreign countries would typically 
take months. Some ticket sales were processed within a week or two, but 
very often sales took so long that the passenger had completed the 
journey before the Issuing Carrier processed the sale of the Air Travel 
Ticket. In contrast, after each flight departure, the airport personnel 
sent a flight envelope containing all the flight coupons to the 
Operating Air Carrier's accounting offices for processing. The flown 
flight coupons came to the accounting center organized in flight 
envelopes for flights departed mostly in the prior week. By virtue of 
the ubiquitous red carbon paper, every flight coupon included a copy of 
the entire itinerary. Therefore, in a pre-computer environment, a lift-
based accounting system organized around the lifted flight coupons made 
sense. Taxes and commissions had to wait until the sale records reached 
the Issuing Carrier, but in a lift-based accounting system, a Carrier's 
accounting and market data needs were met with the information on the 
lifted flight coupon.
    In 1968, the CAB designed the O&D Survey around the lifted flight 
coupon to reflect the standard procedures that were in use in the 
airline industry. Collecting the ticket sale data after one coupon had 
been used was not only in line with Carrier accounting practices of the 
time but also had two other advantages. First, this collection method 
grouped the reported tickets together in a date close to the 
passenger's use of a flight coupon rather than the ticket issue date. 
Second, it kept fully refunded and

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fully exchanged tickets from being included in the O&D Survey.
    The CAB also recognized that manual procedures are labor intensive 
and expensive. In keeping with the desire to minimize the burden of 
collection, the CAB specified very few elements from the ticket for 
collection, required only 10 percent of the tickets to be examined, and 
limited the number of surveys to four a year.
    The Carriers were early adopters of computer systems. The first of 
the customer interactions to be automated was the reservation process. 
The major Carriers built large reservation systems to match passengers 
to departing aircraft. The reservations system computers had an 
operating system that was designed specifically for the requirements of 
Carrier reservation systems. Passengers and travel agents worldwide 
called Carriers to make a reservation and the airline employees entered 
the passenger information. Several of the Carriers eventually packaged 
their systems as a product, called a Computer Reservation System (CRS). 
They sold the ability to access the reservations system to the travel 
agents. Marketed as Sabre, PARS, Apollo, and System One, the CRS owners 
gained revenue from others' access to the system, and Carriers lowered 
their costs because travel agents, rather than airline employees, were 
now entering the passenger information into the reservations system.
    When the reservations systems began to issue automated tickets, the 
travel agent and the airline ticket counters achieved higher efficiency 
and productivity. Automated ticketing lowered costs by copying data 
already in the reservations system onto a paper ticket. However, since 
the reservations computer operating system was incompatible with the 
Carrier accounting computers, the information from the ticketing record 
had to be copied again onto an electronic record that was transmitted 
to the Carrier's accounting computer systems. Since the accounting 
system received a copy of the ticket data but not a direct link to the 
reservations system, the accounting system had no direct way of 
recording changes made in the reservation system.\1\ Changes to the 
passenger's reservation that were important enough to cause an agent to 
re-issue the ticket would, in turn, generate a new ticket record that 
would be forwarded to the accounting system. Changes to the passenger's 
reservation that did not cause an agent to re-issue the ticket would 
not be communicated to the accounting system. Nevertheless, whereas 
moving manual ticket data from the ticket sellers to the Carriers had 
been laborious, slow, and costly, the automated computerized ticketing 
process opened up new possibilities to move ticket information quickly, 
efficiently, and at low cost to Carriers.
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    \1\ This was true at some carriers until the advent of 
electronic ticketing in the mid-1990s.
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    Automated ticket processing opened up cost saving opportunities in 
passenger revenue accounting. The huge cost of rewriting an accounting 
system from lift-based to sales-based was justified, in part, because 
the lift-based accounting system required hundreds of employees trained 
to process the lifted flight coupons. Because a sales-based accounting 
system makes use of information already stored in the computer, 
Carriers gradually shifted away from reliance on information from 
lifted flight coupons and toward reliance on information stored from 
the ticket sale. By 2004, Carriers use sales-based accounting systems 
almost exclusively.
    Regardless of the accounting system, there remained a gap in data 
when the itinerary included multiple Carriers. Only the Carrier that 
issued the ticket had a complete computer record of it. A Carrier that 
transported a passenger on a ticket that it did not issue had to employ 
staff to enter the itinerary into its computer system. In the 1980s, 
American Airlines initiated agreements to share ticket information 
about shared passengers with Trans World Airlines, United Air Lines and 
Eastern Airlines to avoid the cost of manually re-typing each other's 
tickets. In 1990, the system of sharing ticket information was 
formalized with an industry standard record structure for all Carriers 
called Transmission Control Number (TCN) record. Whenever a Carrier 
needed to share information about a ticket with the other Carriers in 
the itinerary, a TCN record could be sent between Carriers. 
Responsibility to oversee the data sharing was given to the Airline 
Tariff Publishing Company (ATPCO). ATPCO would forward TCN records to 
the operating Carriers in the itinerary on behalf of the Issuing 
Carrier. The ATPCO TCN exchange service was offered to all Carriers, 
although not all Carriers decided to participate.
    The TCN data sharing was created as an optional service to 
facilitate more efficient information exchange among interlining 
Carriers electing to use the service, not as a compulsory system. 
Tickets continued to be created without a corresponding TCN record. 
Conversely, multiple TCNs were sometimes created to describe a single 
sale. Sometimes this happened because TCN records were generated for 
tickets for customers who failed to complete the purchase. Other times, 
customers demanded a change that resulted in a second TCN being created 
while the first could not reliably be nullified. Testing can generate a 
TCN or, sometimes, TCNs by the thousands, for which there was no ticket 
sale. Carriers' passenger revenue accounting systems were designed to 
find the TCNs they needed for accounting purposes, ignore the 
extraneous TCNs, and still be able to accept manual data on tickets for 
which no TCN exists. Not all Carriers used TCN records in the course of 
business. Of those that did, some created TCNs for their own 
internally-issued tickets, while other Carriers did not.
    After the CRSs became known as Global Distribution Systems (GDSs) 
in the 1990s, they inherited the responsibility to create the TCN 
records for travel agency tickets. With this development, TCNs became 
the vehicle to send information about the ticket from the travel 
agencies to the Issuing Carrier as well as to any other Carrier that 
participated in the itinerary. The GDSs sell the TCN information to the 
Carriers for a small fee. The GDSs also sell the travel agent's 
reservation information. The product, called marketing information data 
tapes (MIDT), contains no information about the price of the travel 
except the selling class codes and is limited to segments booked 
through travel agencies. The MIDT data are marketed to Carriers for use 
in business planning activities.
    While increasing computerization simplified many of the carriers' 
data collection, processing, and exchange activities, manual collection 
of the O&D Survey information became more difficult for the 
Participating Carriers. With reliance on computerized ticketing and the 
shift to sales-based accounting systems, there was little interest or 
need to continue the practice of using carbon paper to print the whole 
itinerary on all of the ticket's flight coupons. Examination of 
coupons, standard procedure in the old lift-based system, is not 
necessary in the normal course of business when using a sales-based 
accounting system. Since the Department's O&D Survey continued to 
require the Operating Air Carrier to provide information from the 
lifted flight coupons, it became increasingly vital for the Operating 
Air Carrier to receive information about the issuance of the ticket 
from the Issuing Carrier. If the first Participating Carrier is not the 
Issuing Carrier or did not receive that sale information from the 
Issuing

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Carrier, then the Participating Carrier is required to employ staff to 
locate that lifted flight coupon. This is an intensely manual process, 
and it is a significant burden on limited human and financial resources 
of the Operating Air Carrier. In the pre-computer era, Carriers could 
draw on accounting department employees trained in obtaining 
information from lifted flight coupons, but increasing reliance on 
computer records and sales-based accounting systems left Carriers with 
only a small number of employees with sufficient training to glean the 
O&D Survey information from a lifted flight coupon. Sales processing by 
computer has become so reliable that as of May 2004, the GDSs no longer 
print a paper version of the auditor's coupon. Employees with the 
skills needed to extract the necessary information from visual 
examination of a lifted flight coupon have become increasingly scarce.
    The level of effort that the current O&D Survey imposes on an 
Operating Air Carrier to identify whether it is the first Participating 
Carrier in the itinerary is compounded by the number of Carriers the 
Department exempts from reporting to the O&D Survey. Tens of thousands 
of passengers fly each day on commuter Carriers and Foreign Air 
Carriers operating under code-share agreements. As a result of code-
share ticketing procedures, the identity of the Operating Air Carrier 
is often hidden from an outside observer. When the Issuing Carrier does 
not provide the itinerary details to the Operating Air Carrier, via a 
TCN record or other means, then it is difficult for the Operating Air 
Carrier to determine whether any of the other Carriers whose Airline 
Designator appears on the ticket as the Marketing Carrier is scheduled 
to operate the flight. A Participating Carrier may not be aware that a 
Code-Share partner is scheduled to operate a flight. The CFR 
specifically absolves the Participating Carrier from the burden of 
determining the scheduled Operating Air Carrier if the Issuing Carrier 
did not notify it and it is not a Carrier involved in the code-share 
agreement.

    If the reporting carrier does not know the operating carrier on 
a downline code-share segment, it would use the ticketed carrier's 
code for both the operating and the ticketed carriers. The reporting 
carrier is not responsible for knowing the operating carrier of a 
downline code-share where it is not a party to the code-share 
segment.

--14 CFR Sec 19-7 V. Selection of Sample and Recording of Data 
(D)(2)(b)

    In addition to the higher cost, examination of a printed paper 
coupon to obtain information that is usually transferred by computer 
yields less information than it did in the 1960s, when manual 
processing was the norm. Electronic ticketing has become the standard 
practice for most U.S. Air Carriers. However, when authorization to 
board a plane must be communicated between Carriers, and electronic 
means are for any number of reasons unavailable, issuing a paper flight 
coupon remains the standard practice of the industry.
    The O&D Survey requires Participating Carriers to report 
information about an entire ticket based on the knowledge of the flight 
coupon they have in hand. Paper coupons today generally only contain 
the information for a single flight segment. The itinerary must be 
deciphered by examining the pricing area of the ticket. Unfortunately, 
the pricing area lists city codes instead of airport codes. For cities 
with only one airport, the limitation poses no problem, but for cities 
such as New York, the pricing area will list the price to NYC. The use 
of NYC obscures whether the passenger is scheduled to arrive at 
LaGuardia (LGA) or Kennedy (JFK) or, for that matter, at Newark (EWR) 
or Newburgh (SWF) airports.
    The passengers' purchased itinerary has always been limited to four 
segments per ticket because only four could be printed plainly on 
carbon paper copies. If a passenger's itinerary required more than four 
flight coupons, the Carriers used two or more tickets in conjunction 
with each other. When the itinerary was long enough to require spanning 
two tickets, the information from the second ticket was never available 
to the Participating Carrier. Recognizing this, the Department exempted 
the Participating Carrier from reporting the second and subsequent 
conjuncted tickets from the O&D Survey. However, even when some 
portions of the Ticketed Itinerary go unreported, the total amount 
collected for the ticket is still reported in full. Reported flight 
coupons are artificially over-valued when the full ticket value, but 
only the partial itinerary, is reported. The number of partially 
reported itineraries currently being reported in the O&D Survey is 
assumed to be low, but since they are not detectable, there is no 
ability to quantify them, and, therefore, the impact of exempting long 
itineraries on the current O&D Survey is unknown.
    Reliance on the ability of the Operating Air Carrier to examine the 
lifted flight coupons no longer provides the best reasonably obtainable 
economic information about the purchase of air travel on scheduled 
Carriers. The Department acknowledges that the current O&D Survey 
burdens Participating Carriers with obligations to examine the details 
of lifted flight coupons that they would not ordinarily do in the 
course of their business.
    Significant among these burdens is the obligation to determine 
first Participating Carrier. Under the requirements of the current O&D 
Survey, the only way to meet the obligation of determining whether an 
Operating Air Carrier is the first Participating Carrier is for each 
Operating Air Carrier to examine the complete routing of every Ticketed 
Itinerary that was used to transport passengers in the quarter. There 
is no other way for Operating Air Carriers to determine whether or not 
it is apparent that another Participating Carrier has already reported 
the ticket.

    The Survey data are taken from the coupon that is lifted by a 
participating carrier, unless it is apparent from the lifted coupon 
that another participating carrier has already recorded and reported 
the data, in which instance the ticket coupon is non-reportable for 
the second honoring/participating carrier.

--14 CFR Sec 19-7 Appendix A (I.) General Description of O&D Survey 
(B) Narrative Description

    The ``unless it is apparent'' standard for determining whether an 
Operating Air Carrier is responsible for reporting a Ticketed Itinerary 
is a difficult standard to meet. Every Operating Air Carrier must 
diligently examine every Ticketed Itinerary to find out whether it has 
a ticket number ending in zero. For ticket numbers ending in zero, when 
the Operating Air Carrier is the initial Carrier in the routing, then 
clearly it should report the Ticketed Itinerary. When the Operating Air 
Carrier is the second or third Carrier in the routing, it must compare 
the identifiers of the previous Carriers in the routing to the list of 
Participating Carriers provided by the Department's Office of Airline 
Information (OAI). Under the current regulation, even the most diligent 
Participating Carrier will not report all O&D Survey tickets correctly 
if there is an unrecognized code-share flight present in the itinerary, 
the itinerary spans multiple physical tickets (known as conjuncted 
tickets), or the itinerary includes cities with multiple airports.

2. Review of Deficiencies in the Current O&D Survey

    Respondents to Docket OST-1998-4043-1 (ANPRM, July 15, 1998; 63 FR 
28128) agreed that the O&D Survey, as it exists, exempts too many 
passengers from the report, is cumbersome and expensive to compile, and 
fails to collect key elements of information. In addition, the results 
of the O&D Survey

[[Page 8145]]

published by the Department are unwieldy to use. The Department wishes 
to address problems such as those identified in the 1998 OIG report, 
which concluded that O&D data were unreliable for use in key policy and 
funding decisions.\2\ For example, the Inspector General determined 
that of 8,894 city pairs, the O&D Survey report on 6,661 city pairs (69 
percent) did not meet the Department's accuracy criteria when using 
enplanement statistics as a benchmark. The Inspector General (IG) used 
the enplanement statistics as a reliable comparison because they are 
also used by the Carriers for aircraft operational purposes. The IG 
cited several reasons for the inaccuracies, most of which were 
attributed to the fact that the basic reporting requirements of the O&D 
Survey have not been aligned with current industry practices.
---------------------------------------------------------------------------

    \2\ Office of Inspector General Audit Report Number AV-1998-086 
Feb. 24, 1998 p. iii.
---------------------------------------------------------------------------

a. Reporting Exemptions
    Exemptions from reporting, granted in the 1960s, have become a 
major problem in today's O&D Survey. For example, Carriers flying 
planes with 60 or fewer seats are exempt from reporting. As such, 
passengers whose entire itineraries are flown on smaller Carriers will 
not be reported, yet their participation in the air transportation 
system is critical. Similarly, code-share agreements between large and 
small Carriers were non-existent when the current O&D Survey was 
designed. Today, Carriers of all sizes are connected to a global air 
transportation system through global alliances and international ticket 
agreements. This intertwining of service adds complexity and increases 
the potential for error when reporting Ticketed Itineraries.
    For example, the IG pointed out that a Participating Carrier is 
exempt from proper reporting of the code-share relationship if it has 
no knowledge of that relationship. In a code-share situation, the 
Carrier that transports the passenger (Operating Air Carrier) is not 
the Carrier printed on the itinerary (Marketing Carrier). The Carrier 
that issues the ticket is responsible for knowing when this is 
occurring and notifying the passenger of the code-share situation. 
However, when the Participating Carrier is not the Issuing Carrier, the 
Participating Carrier cannot always report the code-share portions of 
the Ticketed Itinerary properly.
    Code-sharing with regional Carrier partners has created a situation 
wherein customers can begin travel on a regional Carrier that does not 
report the O&D Survey because of size exemptions. In that case, the 
second Carrier in an itinerary should report the ticket. However, the 
second Carrier may not be a code-share partner with the regional 
Carrier that first transported the passenger. The second Carrier will 
believe the ticket to have been reported by the first Carrier when, in 
fact, it has not been reported. This causes the entire itinerary to go 
unreported.
    Exceptions for Foreign Air Carriers also impact the accuracy of the 
O&D Survey, and the IG cited this exception as a prominent problem. 
Excluding those Foreign Air Carriers granted antitrust immunity for 
alliances with U.S. carriers, Foreign Air Carriers may transport 
passengers without reporting their Origin and Destination traffic to 
the Department. In consequence, some travelers bound for foreign 
countries are counted in the Department's statistics, and some are not. 
Excluding these passengers introduces a bias into the statistics that 
is difficult to evaluate. As the code-share and marketing alliances 
between U.S. and Foreign Air Carriers developed throughout the 1990s, 
this reporting gap became even more significant.
b. Sample Size
    The IG pointed out that having Participating Carriers report only 
those tickets ending in zero or double-zero is not an appropriate 
sample design. It is not certain that those tickets will be randomly 
distributed across all Ticketed Itineraries. A survey must be based on 
a random sample of the population if the results of the survey are to 
be generalized to the entire population. Unfortunately, there are 
indications that the sample used in the existing O&D Survey is not 
entirely random, although it is not always clear how this non-
randomness occurs.
    When the O&D Survey was established, ticket numbers were preprinted 
sequentially on paper ticket stock. As each customer appeared, each had 
an equal chance of receiving a ticket number ending in zero. Since 
ticket numbers are now assigned by a computer program, the possibility 
that ticket numbers are assigned for reasons other than randomness 
arises. For example, a tour operator might use its block of ticket 
numbers to issue all the ticket numbers that end in the same digit to 
members of a particular tour, resulting in all those tickets being 
selected for the sample or excluded from the sample depending on which 
tour was assigned ticket numbers ending in zero. One Carrier has 
analyzed its ticket numbers and found that 11 percent end in zero, 
which would not occur if the numbers were entirely random. While the 
sample is intended to be 10 percent of all tickets, analysis by BTS' 
Office of Statistical Quality in 2001 concluded that the actual sample 
size ranged from 10.1 percent in 1999 to 9.6 percent in 2000. This is a 
larger variation than one would expect purely from normal sampling 
error, suggesting some non-randomness in the creation or selection of 
ticket numbers.
c. Definition of Origin and Destination
    The common understanding of a True O&D is a passenger who is 
traveling from the origin of the trip to arrive at the destination of 
the trip where the individual intends to conduct business or engage in 
leisure activity. Passengers generally prefer to arrive at the True O&D 
destination in the fewest possible Flight-Stages, but often a passenger 
travels over many Flight-Stages, many Flight Coupon Stages, and, 
sometimes, many modes of transportation to reach the True O&D 
destination, and in the case of a very remote destination, the journey 
might take several days. The Department's intent has always been to 
track, to the greatest extent possible, the passenger's intended True 
O&D.
    Carriers, airports, the Department, and other stakeholders use 
various methodologies to approximate the passenger's True O&D. The 
standard approximation is known as a One-way Trip. The principal 
determination of One-way Trip is based on the time spent on the ground 
between sequential Flight-Coupon Stages. A short time between 
sequential Flight-Coupon Stages implies a connection in a continuing 
One-way Trip. A long time on the ground between sequential Flight-
Coupon Stages implies an end of the prior One-way Trip and a beginning 
of the next One-way Trip. Flight Number and Fare Basis Code are 
sometimes used, in addition to time on the ground, to calculate a One-
way Trip. The One-way Trip is usually completed in a single day, 
although the definition of One-way Trip encompasses the possibility 
that travel continues overnight and into the following day(s).
    However, the information Carriers currently supply in the 
Department's O&D Survey is devoid of flight number, travel date, 
departure time and arrival time, so the data collected by the 
Department has left it without the ability to use time spent on the 
ground to establish a One-way Trip. As a result, since the beginning of 
the O&D Survey, the Department has used continuous direction of travel 
as its approximation of True O&D. This methodology is known as 
Directional Passenger construction. In a regulated airline

[[Page 8146]]

environment, determining passenger trips by measure of least circuity 
was an adequate measure of passenger travel. In that environment, 
passengers had no incentive to travel in any direction other than 
toward their destination as efficiently as possible. However, following 
the extensive development of hub-and-spoke systems following 
deregulation, passengers are often motivated by price or incentivized 
by Carrier loyalty programs that reward taking circuitous connecting 
flights even when a non-stop flight is offered.
    The Department's Directional Passenger concept considers a 
passenger to be on a continuous trip so long as the passenger continues 
in the same direction regardless of the number of days the journey 
takes, subject to certain circuity rules that allow some backtracking. 
For example, the Department's circuity based rules consider an 
itinerary of Albuquerque to Denver to Reno to be a single Directional 
Passenger trip. However, an itinerary of Albuquerque to Denver to Las 
Vegas will never be considered as a single directional trip because the 
location of Las Vegas airport in relation to Albuquerque causes the 
circuity check to break the trip into two directional passenger trips. 
Because the Department does not collect flight date or flight time, the 
O&D Survey always identifies Albuquerque to Denver to Reno as a single 
Directional Passenger trip, regardless of the number of days the 
passenger stays in Denver. On the other hand, regardless of the short 
number of hours spent in Denver, the O&D Survey always identifies 
Albuquerque to Denver to Las Vegas as one Albuquerque to Denver 
Directional Passenger trip and counts the Denver to Las Vegas stage as 
a separate Directional Passenger trip.
    Itinerary construction and circuity rules together determine 
Directional Passengers. When an Albuquerque-Las Vegas passenger 
purchases a round trip ticket traveling through Denver on both the 
outbound and the return trip, then the directional passenger rules will 
recognize the pattern, and determine that the outbound journey should 
be considered a single Albuquerque-Las Vegas trip and the return trip 
to be a single Las Vegas-Albuquerque trip. However, when an 
Albuquerque-Las Vegas passenger purchases a round trip ticket with the 
outbound journey changing planes in Denver and a return trip changing 
planes in San Francisco, then the directional passenger rules will 
interpret the outbound journey to be an Albuquerque-Denver trip, the 
return trip will be a San Francisco-Albuquerque trip with a separate 
Denver-San Francisco trip sandwiched between them. In this situation, 
the Directional Passenger construction views Las Vegas as a connecting 
city and does not recognize the passenger's true intention to visit Las 
Vegas. Itineraries like Albuquerque to Denver to Las Vegas have 
increased as a result of the development of extensive hub-and-spoke 
operations by incumbent carriers. Clearly, approximating True O&D using 
the Directional Passenger method is less accurate in the current 
environment than it was when it was instituted.
    The Department cannot approximate True O&D consistently across all 
itineraries using the O&D Survey as it is currently collected. 
Furthermore, the Department cannot determine Directional Passengers on 
a consistent basis because travel that is part of a stand alone 
Directional Passenger trip is treated differently than if that travel 
is part of a round trip, and round trips are treated differently 
depending on the airport in which a passenger might choose to change 
planes.
    In authorizing Passenger Facility Charges (PFCs), the Congress 
recognized the concept of One-way Trip in civil aviation law. No PFC on 
any passenger may be imposed for more than two boardings on a One-way 
Trip (14 CFR 158.9(a)(1)). The concept of One-way Trip was further 
ensconced in Federal law on November 19, 2001, when Congress 
established the September 11th Security Fee. Section 44940(b) and (c) 
of ATSA provides that the fee may not exceed $2.50 per enplanement or 
$5.00 per One-way Trip. Congress did not specify the definition of One-
way Trip, but it is commonly understood that it was to be a journey 
from the passenger's point of view, concomitant with common practice.
    The Carriers assess PFCs and September 11th Security Fees using 
time in hub as the principal determinant of a One-way Trip. The 
Department believes that the Carrier's method of determination for the 
One-way Trips is an acceptable methodology. However, because the 
Department uses directional travel as the determinant of its passenger 
counts, it cannot effectively monitor the enforcement of these Federal 
laws. Since the Department's Directional Passenger methodology for 
determining passenger counts does not match the One-way Trip 
methodology for determining passenger counts being used by the Air 
Carriers to assess the fees, the Department's counts can, at best, 
predict only the approximate value of the fees due to government 
agencies.
    The Department's inability to measure One-way Trips consistent with 
industry standards leaves it without an adequate measure of passenger 
demand for air travel in the U.S. The OIG issues reports on airline 
metrics \3\ that use the number of air travelers enplaned as the 
measure of air traffic demand. While the number of enplanements can be 
an accurate measure of passenger demand at individual airports, it has 
unfortunate implications when used as a measure of nationwide air 
traffic demand. When Carriers discontinue non-stop service between two 
airports, leaving connecting service as the sole option of passengers 
traveling between these airports, the number of enplanements doubles 
since passengers must now enplane a second aircraft. When enplanements 
are used as the sole measure of nationwide air travel demand, 
discontinuing direct service has the perverse effect of making it 
appear as if air travel demand is increasing. Thus the reduction in the 
true number of persons traveling after September 11, 2001 likely would 
be underestimated when using enplanements as a measure of demand, 
because the airlines' reduction in the number of non-stop flights 
caused the travelers to enplane more times to reach their destination. 
The Department believes that some of the perceived lack of accuracy in 
the O&D Survey is a result of measuring passenger traffic in terms of 
the Directional Passenger in an era when airlines are providing 
incentives for passengers to use circuitous connecting services.
---------------------------------------------------------------------------

    \3\ For example, Airline Industry Metrics, Trends on Demand and 
Capacity, Aviation System Performance, Airline Finances, and Service 
to Small Airports Number: CC-2004-006 (http://www.oig.dot.gov/show_pdf.php?id=1237).
---------------------------------------------------------------------------

d. Fares, Taxes, and Fees
    Taxation of scheduled passenger aviation today is a combination of 
percentage of fare, ticket tax, itinerary-specific taxes such as 
international departure tax, and enplanement fees such as September 
11th Security Fees, subject to limitations on the number of charges and 
fees that can be assessed on a One-way Trip. Because the O&D Survey 
commingles taxes and fees with the fare amount, exact measurement of 
the portion of the ticket price that represents tax has been an 
educated guess even when taxes were based on a percentage of the fare.
e. Passengers Versus Passenger Trips
    It is generally believed that all the passenger counts reported in 
a quarter represent passengers scheduled to fly in that quarter. 
Rather, the current O&D Survey bundles all the travel on a Ticketed 
Itinerary in a single quarter. The complete itinerary is reported as if

[[Page 8147]]

it took place entirely within the quarter in which travel commences. 
Therefore, a misunderstanding often exists between passengers reported 
and passenger trips. For example, all passengers who travel to a 
destination in December and return in January have all their travel 
reported in the December quarter; none of the passengers' journeys are 
reported in the first quarter of the next year.
f. Reporting Consistency
    Different Carriers report data elements in different ways. For 
example, some Carriers with single-service cabins report all service as 
first-class, while others with single service cabins report all service 
as coach. Additional reliability problems occur because the Issuing 
Carrier sometimes provides the Participating Carrier with the 
information saved when the Ticketed Itinerary was issued, and sometimes 
it does not. When the Issuing Carrier does not provide information to 
the Participating Carrier, the Participating Carrier can only know what 
is printed on the lifted flight coupon and may find it difficult to 
report an itinerary correctly. Lack of correct knowledge is explicitly 
excused in the CFR.
    When the Participating Carrier attempts to decipher the city codes 
for the complete itinerary using the pricing area of the ticket, 
inaccuracies can result. The designated city codes--not the airport 
codes--are present in the pricing section of the ticket. When the 
Carrier serves multiple airports in a metropolitan area, such as Dulles 
and Reagan National Airports in Washington, the pricing area displays 
WAS instead of the airport code. The segment's actual airport in that 
circumstance is unknown to the Participating Carrier. This is also the 
case with bulk tickets. Participating Carriers that are also Issuing 
Carriers can report the ticket price accurately, while Participating 
Carriers that did not issue the ticket, and did not receive a TCN, 
cannot report the actual amount paid. If the ticket value is not 
printed on the paper document, the Participating Carrier cannot know 
how to report it correctly.
    The majority of users of the government's O&D Survey data purchase 
the data from third-party providers, which use internal decision rules 
to interpret the data. These independent companies obtain the data from 
the Department and reprocess it for sale. These companies make 
assumptions about the distortions that are inherent therein. For 
example, the third party providers perform extensive analysis on the 
data to separate the amount that was likely paid as fare from the 
amount that was likely paid as tax. Because the decision rules are 
specific to third-party providers, different interpretations of the 
same original data exist.

D. O&D Survey Data Usage

    A diverse group of stakeholders including the Executive Branch and 
Congress use traffic data to help them in making decisions that affect 
the national air transportation system and the U.S. economy. Most 
responses to the ANPRM, including airports, labor unions, equipment 
manufacturers and industry consultants, identified the Department's 
aviation data as their most important source of data. These 
stakeholders depend upon the Department to provide accurate, timely, 
and comprehensive aviation data.

1. The Department

    Air transportation is a significant sector of the nation's economy. 
Despite wars and economic downturns, the nation continues to experience 
long-term increases in demand for air travel. Through its efforts to 
measure economic activity, the Department affirms its role in fostering 
opportunities for transportation providers to create and maintain the 
best transportation system in the world and to enhance the quality of 
life of the American people, today and into the future. The Department 
uses aviation data to carry out its mandates, among them (1) improving 
international air services by seeking market liberalization, (2) 
ensuring the benefits of a deregulated, competitive domestic airline 
industry, and (3) developing policies to improve air service and/or 
access to the commercial aviation system for small and rural 
communities.
    In particular, the Department uses O&D Survey information and the 
T-100/T-100(f):
     To exercise the Department's responsibilities for economic 
oversight of the airline industry as mandated under 49 U.S.C. 40101, 
including, but not limited to:
     (7A) ``Developing and maintaining a sound regulatory 
system that is responsive to the needs of the public and in which 
decisions are reached promptly to make it easier to adapt the air 
transportation system to the present and future needs of the commerce 
of the United States'';
     (9) ``Preventing unfair, deceptive, predatory, or 
anticompetitive practices in air transportation'';
     (10) ``Avoiding unreasonable industry concentration, 
excessive market domination, monopoly powers, and other conditions that 
would tend to allow at least one air carrier * * * unreasonably to 
increase prices, reduce services, or exclude competition in air 
transportation'';
     (12A) ``Encouraging, developing, and maintaining an air 
transportation system relying on actual and potential competition to 
provide efficiency, innovation, and low prices'';
     (13) ``Encouraging entry into air transportation markets 
by new and existing air carriers and the continued strengthening of 
small air carriers to ensure a more effective and competitive airline 
industry''; and
     (16) ``Ensuring that consumers in all regions of the 
United States, including those in small communities and rural and 
remote areas, have access to affordable, regularly scheduled air 
service'';
     As a base of information to assess, maintain, and preserve 
competition in the airline industry and in specific aviation markets, 
under various federal laws and programs, such as:
     To investigate allegations of unfair and deceptive 
practices and unfair methods of competition, under 49 U.S.C. 41712;
     To review proposed mergers and acquisitions to assess 
their competitive effect;
     To review code-share and marketing agreements between 
domestic major Air Carriers, under 49 U.S.C. 41720; and
     To review applications for antitrust immunity between U.S. 
and Foreign Air Carriers, under 49 U.S.C. 41308;
     To administer the Essential Air Services program assessing 
the air service needs of small communities (49 U.S.C. 41743);
     To administer the Small Community Air Service Development 
Program;
     To administer funds under the Aviation Investment and 
Reform Act for the 21st Century;
     To administer the Air Transportation Safety and System 
Stabilization Act;
     To monitor the trends and developments in the operating 
and competitive structures to ensure that Department policies remain 
consistent with commercial developments;
     To determine an Air Carrier's initial fitness to provide 
air transportation and review an Air Carrier's continuing fitness to 
provide air transportation (49 U.S.C. 41102);
     To evaluate certificate transfer applications (49 U.S.C. 
41105);
     To grant or deny permits for Foreign Air Carriers to 
provide transportation as a Foreign Air Carrier to

[[Page 8148]]

the U.S. by determining whether the public interest is being served in 
granting the permit (49 U.S.C. 41302) and to approve the transfer of 
such permit to another Foreign Air Carrier by determining whether the 
public interest is served (49 U.S.C. 41303); and
     To assemble information and prepare reports required and 
requested by the President and the Congress.
    The O&D Survey and T-100/T-100(f), as currently collected, 
particularly impact the Department's evaluation of Air Carrier service 
to smaller communities. The Essential Air Services program (EAS) and 
the Small Community Air Service Development Program are directed 
towards smaller markets and require evaluation of service and fares. 
For example, under EAS, the Department determines the minimum level of 
service required at each eligible community by specifying a hub through 
which the community is linked to the national network, and specifying a 
minimum service level in terms of flights and available seats. Where 
necessary, the Department pays a subsidy to an Air Carrier to ensure 
that the specified level of service is provided. Similarly, research 
activities such as The Rural Air Fare Study,\4\ which was conducted 
pursuant to Section 1213 of the Federal Aviation Administration 
Reauthorization Act of 1996, require data on all passenger air travel, 
including many smaller markets served exclusively by airlines operating 
only aircraft having fewer than 60 seats.
---------------------------------------------------------------------------

    \4\ Summary may be found at http://ostpxweb.dot.gov/aviation/rural/scexec.pdf).
---------------------------------------------------------------------------

    The Federal Aviation Administration's (FAA) mandates include (1) 
regulating civil aviation to promote safety, (2) encouraging and 
developing civil aeronautics, including new aviation technology, (3) 
developing and operating a system of air traffic control and navigation 
for both civil and military aircraft, (4) researching and developing 
the National Airspace System and civil aeronautics, (5) developing and 
carrying out programs to control aircraft noise and other environmental 
effects of civil aviation, and (6) regulating U.S. commercial space 
transportation.
    The FAA also administers the Airport Improvement Program (AIP) 
(authorized by 49 U.S.C. Chapter 471), which has the broad objective of 
assisting in the development of a nationwide system of public-use 
airports adequate to meet the currently projected growth of civil 
aviation. It also provides funding for airport planning and development 
projects. In addition, medium and large airports where one or two 
Carriers control more than 50 percent of passenger boardings must 
submit a written competition plan to receive approval to impose a 
Passenger Facility Charge (PFC) or to receive a grant under the AIP. 
All aspects of qualifying, planning, allocating, and monitoring of AIP 
funds rely on the integrity of the data that the Department collects.
    The FAA uses O&D data for forecasting long-term growth in air 
travel demand and for determining corresponding needs for airport 
development and airspace system improvements. FAA also uses O&D data 
for conducting cost-benefit analyses of proposed safety rulemakings, 
infrastructure investments, and air traffic control improvements.
    Within the Department, BTS has specific statutory responsibilities 
(49 U.S.C. 111(c)) to measure traffic flows, travel times, travel 
costs, and variables influencing traveling behavior and to collect data 
relating to the performance of transportation systems. BTS is 
specifically required to collect data that are suitable for conducting 
cost-benefit analyses.
    BTS uses O&D data, together with other sources of passenger travel 
data (such as its National Household Travel Survey), to analyze 
passenger travel by all modes of transportation. Since passengers 
periodically shift the modes of transportation that they use (as they 
did after the terrorist attacks of September 11, 2001), passenger 
travel patterns by air are of great importance not only to airlines and 
airports, but also to transportation planners in other modes as well, 
such as highways and rail. BTS uses the O&D data to better understand 
what factors influence passengers' choices about which mode of 
transportation to use, so that transportation planners can plan 
appropriately.
    The O&D data are used to measure the prices that passengers pay for 
air travel. These travel cost data are the basis of the Air Travel 
Price Index (ATPI), the price index developed for measuring airline 
prices.
    Finally, the Department's Research and Special Programs 
Administration (RSPA) administers the Civil Reserve Air Fleet (CRAF) 
program, which provides civilian aircraft to the Federal government for 
use in war or other emergency situations. RSPA uses the T-100 to 
determine which Carriers can make what aircraft available, while 
minimizing the adverse effect that these commitments make to the 
airlines' normal civilian operations. Estimating these adverse effects 
requires data on the revenue that would be affected by the cancellation 
of any particular flight.

2. Other Government Agencies

a. The Department of Justice
    The Department of Justice (DOJ) uses aviation statistics to assist 
in the prevention of anti-competitive conduct that is subject to 
criminal and civil action under the Sherman and Clayton Acts. The 
Department's aviation statistics have been one of the Justice 
Department's most important tools used to enforce various criminal 
statutes related to Sherman Act violations. DOJ also uses them to 
review mergers and acquisitions.
b. The Department of Homeland Security
    The Department of Homeland Security (DHS) uses the Department's 
aviation data to help predict revenues from the collection of September 
11th Security Fees. Because the Department's system bases its 
determination of passenger trips on least circuity, and the passengers 
are paying these fees on the basis of the industry standard One-way 
Trip, the Department's data provide poor predictions of these revenues. 
The current O&D Survey concept of Directional Passenger, which does not 
consistently predict the number of passengers arriving at the airport 
to change planes, which hampers DHS' airport security manpower 
forecast. The ability to discern the difference between connecting 
passengers at a given airport versus passengers beginning their journey 
at that airport is critical to effectively managing security staffing 
and other resources at the airport. In addition, the O&D Survey cannot 
currently provide the critical time-of-day and day-of-week passenger 
volume data required by DHS to plan and forecast the manpower 
requirements of airport screeners.
    Furthermore, the Air Transportation Safety and System Stabilization 
Act (Pub. L. 107-42) assigns the responsibility to remit the September 
11th Security Fees for all travel described on the Air Travel Ticket to 
the Carrier that issues the ticket. Since the Department's O&D Survey 
information does not identify the Carrier that issued the ticket, the 
Department's data provide insufficient information for DHS to monitor 
the Carriers responsible for remitting the fees. Since the Federal 
government does not collect statistics about Carriers issuing tickets, 
the DHS uses the tickets reported in the O&D Survey as the best 
available substitute.
c. The Department of Commerce
    The Department of Commerce's (DOC) ability to carry out its mandate 
to promote tourism is hindered by the

[[Page 8149]]

Department's inability to know with certainty the beginning and ending 
of One-way Trips. Significant numbers of tourists travel by scheduled 
air transportation, and the Department's data collection policies leave 
DOC using only guesses about origins and destinations based on the 
Department's directional passenger counts.
    The DOC's Bureau of Economic Analysis is also responsible for 
producing the official U.S. Government estimate of the Gross Domestic 
Product (GDP), and to adjust these estimates for inflation using the 
GDP Deflator. The GDP Deflator is a price index, similar to the Bureau 
of Labor Statistics' Consumer Price Index (CPI) that covers a broad 
range of prices, including prices not paid directly by consumers. The 
accuracy of the GDP Deflator would benefit from more accurate price 
data and more timely data. The reporting process proposed in this 
rulemaking would allow DOT to provide data that are more accurate to 
DOC. By the time the current quarterly O&D Survey data become 
available, it is no longer current, and, therefore, cannot be used in 
the GDP Deflator.
d. The Bureau of Labor Statistics
    The Bureau of Labor Statistics (BLS) has a critical need for 
passenger O&D pricing information on a monthly basis, available 
promptly, so that it can achieve a more accurate index of air travel 
prices for incorporation into the monthly CPI. The proposed rule would 
provide these more accurate price data on a timely monthly basis. BLS' 
ability to evaluate the cost of air travel and incorporate those 
evaluations into the consumer price index and the producer price index 
is compromised by the Department's current statistical techniques. 
Furthermore, the policy of reporting all travel in the quarter when 
travel commences compromises the attempt to allocate the cost of air 
travel to the proper travel month. The Producer Price Index (PPI) is 
supposed to be calculated net of taxes, but the Department's 
statistical data does not collect information to enable BLS to separate 
fares and taxes. Because BLS computes separate price indexes for 
purchases by consumers (the CPI) and purchases by producers (the PPI), 
it is important for BLS to be able to separate the purpose for which an 
airline trip is taken--whether business or leisure. The existing O&D 
data do not provide such information. The proposed rule would collect 
information that would enable better analysis of the purpose of travel.
    BLS would like to adjust its monthly international price program 
for Exports by the amount paid by U.S. resident travelers to the 
Foreign Air Carriers on all routes. Because of the reporting exemptions 
granted to Foreign Air Carriers flying to the U.S., some U.S. citizens 
traveling to foreign destinations on Foreign Air Carriers are counted 
in the O&D Survey and some U.S. citizens are not. Lack of consistent 
Foreign Air Carrier statistics hinders BLS' ability to keep its 
published statistics accurate and effective.
e. The Department of State
    The Department of State (DOS) uses the Department's aviation data 
to provide the information base for policy decisions in international 
aviation negotiations.
f. The Government Accountability Office
    The U.S. Government Accountability Office (GAO) uses O&D data to 
conduct special studies of the airline industry at the request of 
Congress. The quality of the analysis that GAO provides to Congress 
would be substantially improved by the additional and higher quality 
data collected under the proposed rule.

3. Other Stakeholders

    Other stakeholders, such as public and private sector individuals, 
organizations, and agencies, rely on aviation data.
a. Existing and Potential Carriers
    Carriers use the Department's data for traffic forecasting and 
evaluation of new routes. Evaluation of new market opportunities by 
Carriers is dependent on the O&D Survey. Even with their access to many 
internal sources of data, Air Carriers still report that they depend on 
the O&D Survey data. Almost all Carriers rely on the Department's data 
as the fundamental, and least expensive, source of industry demand 
data. For new Carriers, as well as smaller and low cost Air Carriers 
for which MIDT data is prohibitively expensive, the O&D Survey is the 
only viable source of traffic data. Third-party providers have 
developed new tools that enable smaller Carriers to participate in 
sophisticated route and strategic planning at a much lower cost. The 
success of such planning exercises is dependent, in part, upon the 
quantity and quality of data available to the Carriers. In addition, 
evaluation of traffic and routes is an essential component of aircraft 
acquisition planning.
b. Airports
    Department traffic data provide the basis for analysis by the 
nation's airports. The O&D Survey, with its fare information, is the 
only source of information for airports to study price elasticity. In 
addition, the O&D Survey is the airports' primary source of data for 
evaluating new routes. The proposed O&D Survey would provide 
information about passengers originating at an airport and passengers 
transiting through an airport, an important distinction when planning 
for services that the passengers demand. Route evaluations are used to 
encourage new service from Carriers, and thereby improve their service 
to the consumer.
    Smaller airports have a particular need for information about the 
destinations of passengers. Airports that do not have passenger volumes 
high enough to substantiate service to multiple cities need to 
establish service to cities in the region where the passengers using 
that airport want to go. When the airport can establish service only to 
a large city in one direction and most of the potential travelers in 
the area tend to travel in another direction, then the small airport 
that might have been viable on its own merits if it had service to the 
city in the appropriate direction may find that it must rely on the 
Federal government's small airport subsidy to remain viable. The O&D 
Survey is the primary source of destination information available to 
small airports.
    Airports and state aeronautical agencies use the data to understand 
their customers and the airport's role in its regional transportation 
market. Airports must ensure that Air Carriers have reasonable access 
to essential airport facilities, so statistical forecasting of 
passengers is essential. Airport local and regional planning functions 
use, in part, Department O&D Survey and T-100/T-100(f) data to plan 
buildings and runways that are vital to expanding the nation's air 
transportation system into the future. Smaller airports, served 
primarily by Carriers that are exempt from current O&D Survey reporting 
requirements, are particularly hampered by the lack of relevant 
aviation data.
c. Consumers and the General Public
    Consumers benefit from the availability and analyses of accurate 
and complete aviation data. In the past, the Department received 
numerous inquiries from the public regarding domestic airline fares. In 
response, the Department began issuing a quarterly report called The 
Domestic Airline Fares Consumer Report based on the Department's 
traffic data. It provides information about average prices being paid 
by consumers in the top 1,000 domestic city pair markets in the

[[Page 8150]]

continental U.S. Similarly, Carriers have a vested interest in True O&D 
to effectively conduct route and other strategic planning. If Carriers 
are better able to accurately plan their services, consumers will be 
better served.
    In addition, manufacturers, industry associations, consultants, 
academics, researchers, financial analysts, investors, and the general 
public use the Department's aviation data as the statistical base for a 
variety of studies on topics related to aviation.
d. Labor Unions
    Labor unions consider the Department's data as a vital component of 
their negotiation strategies. Accurate and timely data are also crucial 
during times of economic downturn, particularly when Air Carriers 
request concessions from their unions.
e. Equipment Manufacturers
    Because demand and traffic patterns reflect utilization of 
aircraft, demand and traffic data in the O&D Survey provide fundamental 
information on air transport markets that are vital in planning future 
products. Consequently, aircraft manufacturers are a prime user of the 
Department's traffic statistics.

E. Limitations of the O&D Survey and T-100/T-100(f)

    The deficiencies of the O&D Survey and the T-100/T-100(f) have been 
known for some time. While changes were made to the T-100 and T-100(f) 
on July 30, 2002, the O&D Survey has not been substantially updated to 
reflect changes in the industry. It has become apparent that the cost 
of inadequate passenger and traffic information is significant for both 
the government and private sector aviation communities who rely on this 
data to fulfill their responsibilities and grow their businesses. 
Furthermore, recent changes in information technology and Carrier 
reservation and accounting systems have significantly reduced the cost 
of revising the Department's data collection requirements such that the 
benefits to all stakeholders of updating the system to provide more 
timely, accurate, and useful data far exceed the costs.
    The current aviation era is characterized by rapid change. Carrier 
pricing can change multiple times a day. Carrier strategies sometimes 
change from month to month and require increasingly sophisticated 
analysis to support and evaluate business decisions and cases. The 
growth in the number of third-party providers of airline analytical 
software to evaluate the viability of new routes and other strategic 
decisions has made sophisticated Carrier analysis commonplace at even 
the smallest of Carriers. These software models, used by Carriers, 
consulting firms, and government agencies, require more detailed, 
timely, and comprehensive passenger demand data to optimize analyses of 
a dynamic industry and plan for its future. The Department's 
responsibility to identify and evaluate emerging trends in commercial 
aviation is constrained by traffic statistics that are only collected 
by month and by quarter and that are insufficiently comprehensive and 
detailed. The continuation of collecting insufficient, quarterly data 
to measure the transportation industry will severely hamper the ability 
of Federal, state, and local governments to provide the infrastructure 
to allow the airline industry to contribute to economic growth. 
Decisions on aviation infrastructure worth billions of dollars 
increasingly require more sophisticated analysis for which more 
accurate, timely, and comprehensive data are critical.
    The nation is becoming more dependent on fast, efficient air 
travel. The nation's economy functions with the understanding that any 
person or any shipment of goods can be delivered across the nation 
within hours. Adequate quantitative data about the movement of 
passengers will help the Department prepare for the future needs of the 
transportation system.
    Prior to September 11, 2001, delays associated with the capacity 
constraints of the air transportation system were undermining the 
efficiency of the system. These capacity constraints are now beginning 
to reemerge as demand recovers. Furthermore, the events of September 
11, 2001, and the subsequent effects of those events on the aviation 
industry, further support the need for additional data modernization. 
Not only was the collection of data elements inadequate to measure 
important aspects of the aviation industry, vital information was not 
available in a timely fashion to interpret the short and medium term 
impacts of these events. It was also impossible to observe the recovery 
of the air transportation system in those crucial days after the system 
was restored.
    More specifically, the data was inadequate for the following 
reasons: first, neither T-100/T-100(f) data (reported monthly) nor O&D 
Survey data (reported quarterly for ten percent, or less, of completed 
tickets) revealed daily changes in traffic and fares following 9/11. 
Without the ability to assess daily traffic levels, the Department 
could not fully assess the return of passengers to the nation's air 
transportation system and the extent to which the recovery was 
progressing differently in various regions of the country. Second, 
without any information about the sale of the Ticketed Itineraries, it 
was impossible to differentiate between the post September 11th 
passengers who purchased non-refundable tickets prior to September 11th 
and those travelers that purchased their Ticketed Itineraries after 
September 11th and thereby gauge the level of passenger confidence. 
Third, quarterly data submissions resulted in a significant delay in 
the Department's analysis of the impact of September 11th. The third 
quarter of 2001 O&D Survey data showed the 20 days most directly 
impacted by the events of September 11th mixed with the 71 days prior. 
The next data available in the O&D Survey could not be released until 
the end of the following quarter. Fourth, in implementing the 
provisions of the Air Transportation Safety and System Stabilization 
Act (Public Law 107-42), Congress and the Department exclusively relied 
on T-100 in providing assistance to Air Carriers and other industry 
participants. Even though the O&D Survey information is more useful in 
measuring some aspects of the nation's aviation economy, data collected 
only quarterly made it unusable for purposes of fulfilling the Air 
Transportation Safety and System Stabilization Act or for adequately 
monitoring the recovery of the industry following the terrorist 
attacks.
    Although the events of September 11, 2001 were unprecedented, the 
need for more detailed, and more time-specific traffic data to monitor 
the impact of significant events on the industry and its recovery from 
them is not unique to that situation. Since the terrorist attacks, the 
industry has experienced the SARS outbreak, the Iraq war, and various 
elevated code orange alerts. In order to monitor the impact of these 
extraordinary events on the industry, the Department had to issue 
requests for supplemental data from the Carriers. Not only do these 
supplemental requests burden the industry with additional reporting 
requirements, they also highlight the fundamental need for the 
Department to routinely collect more detailed, time-specific data to 
fulfill its statutory obligations to monitor the health of the airline 
industry and respond to requests from Congress and other government 
agencies about the impact of such events on an industry that is vital 
to the U.S. economy. The current data collection

[[Page 8151]]

systems are inadequate for providing timely answers to any question 
with more precision than a month for the T-100/T-100(f) and more 
precision than a quarter for the O&D Survey. Reliance on data that is 
only available quarterly for purposes of measuring the dynamics of 
airline prices is a critical shortcoming of the O&D Survey. The ATPI, 
for example, is severely handicapped by the limits of quarterly data. 
Flight date is an important element of the value of a flight and 
therefore an important factor in the computation of the ATPI.
    The Transportation Security Administration (TSA) requires 
information about passenger travel by time-of-day and by day-of-week to 
plan airport security screener staffing requirements. The current T-
100/T-100(f) averages data across a month and the O&D Survey averages 
data across an entire calendar quarter, so that variability over time 
within the calendar quarter cannot be measured. Variability over time 
and dates can only be measured if the Department begins collecting data 
about time and date of travel. The volume of passenger traffic varies 
by time-of-day and day-of-week and lack of information about passenger 
volumes can result in passenger delays due to too few screeners or in a 
useless expenditure of Federal dollars due to overstaffing at certain 
times.
    TSA requires some method of forecasting the collection of revenue 
from the Air Carriers. The September 11th Security fee is remitted by 
the ticket's Issuing Carrier, but Issuing Carrier is not one of the 
data elements collected in either the O&D Survey or the T-100/T-100(f), 
making it difficult for TSA to forecast or monitor the proper 
remittance of tax dollars.
    Neither the O&D Survey nor the T-100/T-100(f) provide any 
information about the sale of new tickets (e.g., changes in passenger 
booking windows), a key measure of traveler confidence in the air 
transportation system. Such information is critical to evaluating the 
likely financial impact of exogenous events, such as September 11th or 
SARS, on Carriers. In addition, these data limitations preclude the 
Department from precisely evaluating the impacts of even endogenous 
industry events such as potential strikes or Carrier shutdowns.
    The problem resulting from the reporting exemption given to Air 
Carriers so long as they do not operate aircraft with more than 59 
seats is illustrated by the emergence of Air Carriers flying 
substantial fleets of regional jets. For example, the commencement of 
operations by Independence Air in June of 2004 caused a profound 
adjustment of fares in small, medium and large markets in the Eastern 
half of the U.S. However, because Independence Air did not operate 
aircraft with more than 59 seats, it did not have to report O&D Survey 
data, thereby resulting in an incomplete picture of the effects of this 
Air Carrier's start of operations. When a major realignment of fares 
can result from the actions of an Air Carrier that qualifies for the 
small aircraft size exemption, then the small aircraft size exemption 
must be reevaluated.
    The FAA acknowledged these and other issues at its 2001 Commercial 
Aviation Forecast Conference.\5\ Accurate and detailed data on the flow 
of passengers through the air transportation system is critical to 
addressing congestion and developing ways to make the system more 
efficient. The FAA requires data on the number of passengers flying at 
specific times of day and specific days of the week, allowing it to 
calculate more accurately the costs and benefits of safety regulations, 
infrastructure investments, operational changes, and other FAA actions.
---------------------------------------------------------------------------

    \5\ Information may be obtained from http://apo.faa.gov/2001ConferenceProc/proc2001/procdoc.htm.
---------------------------------------------------------------------------

    Lack of information about catchment areas impacts the Department's 
ability to assess the effects of competitive services and alternative 
airports. A number of government agencies are charged with monitoring 
the airline industry and providing sufficient infrastructure to 
accommodate its growth. The use of secondary airports increasingly 
shapes the operating and competitive structures of the airline 
industry. These agencies increasingly require information that allows 
them to identify and analyze changes in the catchment areas of various 
airports, thereby understanding how such changes impact industry 
structure and airport and airway infrastructure planning and 
development. For the same reasons, such information would also be 
enormously useful to other users of the data, including airports, 
airlines, and aviation consulting firms.
    BTS is specifically directed to gather data that are relevant to 
cost-benefit analysis. One requirement of cost-benefit analysis is 
estimating the number of people that are affected by a particular 
proposed regulation or infrastructure improvement or technology 
investment. A major weakness of the existing O&D Survey is that it does 
not provide flight-specific data, so it is not possible to estimate how 
many people are flying on any particular day of the week or at any 
particular time. Since infrastructure and air traffic control 
investments are most likely to produce benefits at times when the 
airspace system is congested, it is important to be able to measure how 
many people are flying at these times to measure of the number of 
people affected by proposed infrastructure and air traffic control 
improvements.
    BTS' current On-Time Data Base allows analysis of the particular 
flights that are affected by delays, but does not have the ability to 
know the number of passengers affected by delays. Since the number of 
passengers affected is likely to be greatest when congestion and delays 
are highest, current data are likely to understate the impact of delays 
on the traveling public. Information about the number of people 
traveling by time-of-day is vital to understanding the dynamics of the 
air transportation system.
    The 10 percent sample is inadequate for fulfilling the Department's 
mandates and hampers the data quality of the O&D Survey. These data 
quality issues have a strong effect on programs that include 
measurements of air service to small communities. The EAS program is 
particularly impacted. Other programs affected include BTS' quarterly 
research series (ATPI), an experimental measure currently under 
development. The ATPI uses O&D Survey data and is dependent upon 
accurate data for all markets.
    The Department's inability to measure True O&D according to the 
industry standards using One-way Trips hinders its ability to 
accurately measure nationwide air travel demand. Nationwide measures of 
air travel demand, airport improvements financed by PFC revenue, and 
improved airport security financed by the September 11th Security fees 
all depend on the Department's ability to identify One-way Trips. 
However, the Department's T-100/T-100(f) statistics count enplanements, 
while the O&D Survey statistics count Directional Passengers. 
Consequently, the government is without any method of properly 
forecasting tax revenue and without means to monitor the effects of tax 
policy.

F. Need for Regulatory Action

    The Department is obligated to collect and disseminate information 
about civil aeronautics including, at a minimum, information on (1) the 
origin and destination of passengers in interstate air transportation, 
and (2) the number of passengers traveling by air between any two 
points in interstate air transportation (49 U.S.C. 329 (b)). In 
addition, the Department allocates

[[Page 8152]]

airport improvement funds, provides essential air service subsidies and 
allocates funds to the air traffic control system. The requirement that 
the Department judge the need for, and consequences of, a regulation 
based on accurate statistical information presupposes that sound 
economic information exists.
    The Department has a unique role in collecting transportation 
industry information. The need for a statutory mandate to collect 
traffic statistics is underscored by the extensive differences between 
the various airline business models and the level of technical 
sophistication that make the task of gathering comprehensive industry-
wide data on air transportation a very formidable task for private 
industry or an industry trade group to undertake. The only other 
government entities in a position to gather traffic statistics are the 
nation's airports. Airports are operated by a variety of State, 
Municipal, County and Regional authorities. Collectively, they do not 
have the resources to process statistics on all of the passengers 
flowing through them on a daily basis, and it would be cost prohibitive 
for each of the major airports to develop parallel statistical systems. 
It would be a burden on the Air Carriers to require reporting to more 
than four hundred airports, and a burden on the airports to reassemble 
the data into a nationwide view of passenger air travel. Although 
third-party providers offer ``enhanced'' aviation data, the original 
sources of third-party provider data remain the T-100/T-100(f) and O&D 
Survey. The underlying need for traffic information cannot be satisfied 
anywhere else because there are no other sources of comprehensive 
traffic data available in the aviation industry. We therefore conclude 
that the changes proposed in this NPRM are required to provide accurate 
statistical information.
    Respondents to the Department's ANPRM overwhelmingly agreed that 
the O&D Survey and T-100/T-100(f) segment data are essential. Most 
named the T-100/T-100(f) and the O&D Survey as the basis for all 
analytical work done in their organizations. Those that have access to 
other sources of data reported that they generally crosschecked those 
sources with information from either the T-100/T-100(f) or the O&D 
Survey. The Department's traffic data provides the press and consumer 
groups with the ability to monitor prices and advise the public about 
low price alternatives to high fares, which fosters a more competitive 
industry that benefits all consumers. The traffic data and the press 
and consumer group analysis of the data strengthen American companies 
by allowing companies to negotiate with airlines on fares. The traffic 
data benefits consumers by providing new entrant Air Carriers with the 
ability to demonstrate the strength of their business plan to 
investors.
    The O&D Survey, however, was singled out most often in responses to 
the ANPRM as the data source most in need of improvement. The abundance 
of complaints about the deficiencies that exist in the O&D Survey has 
caused the public and the aviation industry to be cautious about any 
conclusions that can be drawn from this data, yet a wide range of 
stakeholders use it because it is the only available source of economic 
information that describes key aspects of scheduled air passenger 
transportation. Data inaccuracies have doubtlessly led to sub-optimal 
decisions by stakeholders that are as impossible to quantify as they 
are essential to correct. We therefore conclude that the changes 
proposed in this NPRM are made necessary by compelling need to improve 
the safety and economic well being of the American people.
    Furthermore, OMB has published guidelines for ensuring that Federal 
agencies establish practices for ensuring and maximizing the quality, 
objectivity, utility and integrity of information disseminated by 
Federal agencies. Disseminated information must be accurate, clear, 
complete, and presented in an unbiased manner. Where appropriate, data 
should have full, accurate, transparent documentation and error sources 
affecting data quality should be identified and disclosed to users. The 
IG has declared that the Department's O&D Survey does not meet the 
Department's standard of acceptability of 95 percent accuracy. Since 
the O&D Survey and T-100/T-100(f) remain the key measure of the 
economics of the passenger air travel industry, the Department is under 
obligation to provide the most accurate statistical information that it 
can reasonably provide. The 1998 OIG report, the 1998 ANPRM, and 
subsequent outreach activities support the necessity of aviation data 
modernization. The IG found that to compensate for the unreliable O&D 
data, Department aviation analysts often requested Air Carriers to 
provide supplemental data, but they sometimes simply used their 
experience to apply adjustment factors to the unreliable data. Lack of 
consistent data collection over time decreases the utility of that 
data, while every request for supplemental information increases the 
Air Carriers' and the Department's costs. We therefore conclude that 
the changes proposed in this NPRM are necessary to implement Congress' 
intent for the law.
    Because the Executive Branch and Congress utilize this data to form 
and implement public policies to foster a safe, healthy, efficient, and 
competitive air transportation system that contributes to aviation 
safety, national security, and the U.S. economy, agency investment in 
aviation information is critical. The private markets and other 
government and quasi-governmental agencies agree that this information 
is also critical for their needs, but private markets are unable to 
provide adequate statistical information to address this need. The 
unreliability of the data undermines the Department's ability to 
perform its statutory mandate to disseminate information that enables 
the transportation system to adapt to the present and future needs of 
commerce and to ensure that public policy remains consistent with 
changing commercial reality.

G. Development of the Record in This Rulemaking

    The Department received 48 comments in Docket OST-1998-4043 in 
response to its ANPRM (July 15, 1998, 63 FR 28128) from Air Carriers, 
Foreign Air Carriers, airports, industry consultants, trade 
associations, and unions. Typical of the responses was that of American 
Airlines, which, as both a supplier and a user of data, expressed full 
support of the Department's effort to simplify the data submissions and 
ensure the accuracy and integrity of the data disseminated to the 
public. The Regional Airline Association pointed out that it had long 
advocated modernizing the data. Delta Air Lines supported the 
initiative so long as it did not require the incursion of unreasonable 
computer programming costs. The Air Line Pilots Association and the 
Association of Flight Attendants favored any change that would improve 
data quality and integrity over the current data.
    Comments received about the O&D Survey under the ANPRM indicate 
that there is significant concern about the data. Even while 
emphasizing the importance of having access to the Department's traffic 
data statistics, the respondents stressed that the O&D Survey has 
serious weaknesses. Respondents repeatedly mentioned that the data 
elements collected were insufficient to meet the data needs of the 
public and the aviation industry. There was consensus that the 
reporting exemptions granted to some Carriers significantly affected 
the reliability and completeness of the data. There was near universal 
agreement that the data

[[Page 8153]]

collected by the Department suffer from a lack of both quality and 
consistency. Specific comments point to the O&D Survey's outdated 
design, which affects the quality and accuracy of data gathered. This 
is amply demonstrated by the list of improvements that were put forth 
in the ANPRM. The suggested modifications to make the O&D Survey more 
reliable include:
     Change the source of data;
     Decrease the data reporting exemptions;
     Improve data validation;
     Improve definitions of data elements to enhance 
uniformity;
     Improve enforcement of timely receipt of data to guarantee 
timely release of data;
     Expand the number of elements collected to increase the 
usefulness in measuring the industry;
     Increase the accuracy of the data to make it more 
reliable; and
     Decrease the complexity of the form of the published data 
to make it more useful for decision making.
    Stakeholders agree that the collection, processing, and 
dissemination of aviation data, particularly through the O&D Survey and 
T-100/T-100(f), are critical to the continued function and well being 
of the U.S. airline industry. There was general affirmation that the 
suggestions the Department proposed in the ANPRM were acceptable. 
Furthermore, Executive Order 12866 obligates the Department to collect, 
process, and disseminate accurate, timely, and relevant aviation data. 
The Department's data is insufficient to accurately determine a 
consistent measure of passenger travel using its same general direction 
of travel passenger counting methodology. Therefore, it is unable to 
fulfill its mandate to provide the most relevant aviation data within 
the current reporting requirements.
    The air travel industry has grown rapidly since deregulation. 
Deregulated markets, code-share and other cooperative marketing 
agreements, new airline business models, and the adoption of the hub-
and-spoke model and the rolling hub variation of that model have 
changed the fundamental economics of the airline industry. These 
changes have left the Department attempting to measure an aviation 
economy that is not the economy that the existing data were designed to 
measure. As such, 14 CFR Part 241, Section 19-7 (``Passenger origin-
destination survey'') has outlived the economic model for which it was 
designed. Despite some adjustments (specifically, Docket No. OST-1996-
1049, RIN 2105-AC34, 62 FR 6715; Docket No. OST-1998-4043, RIN 2139-
AA08, 67 FR 49217), these metrics have not kept pace with changes in 
the industry, nor do they measure essential features of aviation 
economics as we know them today. Therefore, the Department is issuing 
this NPRM.

H. Scope of This Rulemaking

    The purpose of this rulemaking is to (1) reduce the reporting 
burden on the Participating Carriers, (2) make the O&D Survey more 
relevant and useful, (3) reduce the time it takes to disseminate the 
information and (4) achieve maximum congruence between the O&D Survey 
and the T-100/T-100(f). In so doing, the rulemaking will aid industry 
and government users by collecting the most accurate and consistently 
obtainable economic information about the purchase of air travel on 
scheduled Carriers to or from, or within, the U.S. This rulemaking will 
address the identification of the responsible reporting entity, the 
identification of the data elements required to measure economic 
activity in the scheduled passenger air transportation industry, and 
the identification of exemptions that shall be allowed in the reporting 
process.
    The Department seeks to achieve these goals by making the O&D 
Survey more relevant and useful to all stakeholders. Specific concerns 
associated with the current O&D Survey reporting requirements include 
(1) minimizing the number of reporting exemptions, (2) increasing the 
level of detail, (3) increasing the quantity and quality of information 
collected, (4) eliminating the need for data providers to resort to 
manual data collection, thereby reducing reporting costs, (5) 
establishing more uniform reporting by updating guidelines and 
instructions to the Carriers, (6) achieving maximum congruence between 
the O&D Survey and the T-100/T-100(f), and (7) updating the means of 
submission to enhance the timeliness of data release.

I. O&D Survey Redesign

    The Department believes that an accurate O&D Survey based on 
Revenue Passenger tickets is now both desirable and possible in light 
of recent changes in airline information technology.

1. Summary of the Proposed O&D Survey

a. Who Shall Report
    The Department proposes that all U.S. Air Carriers, and Foreign Air 
Carriers reporting data under antitrust immunity granted under 49 
U.S.C. 41308, that are operating at least one aircraft with 15 or more 
seats and issuing tickets for travel on scheduled interstate passenger 
services to or from, or within, the U.S. participate in the O&D Survey. 
By this change, the Department proposes to abandon the concept of first 
Participating Carrier reporting a portion of Ticketed Itineraries in 
favor of the Issuing Carrier reporting all eligible Ticketed 
Itineraries. In light of substantial changes in airline ticketing and 
revenue accounting practices, this alternative is the most efficient 
and cost effective, allowing for the broadest possible data 
availability with a minimum of ongoing reporting effort.
b. Data To Be Collected
    The Department believes that a fundamental restructuring of the 
data collected under the O&D Survey is necessary for the Department to 
fulfill its Congressional mandate to ensure a healthy, safe, efficient, 
accessible, and competitive transportation system that meets our vital 
national interests and enhances the quality of life of the American 
people. The Department acknowledges that this mandate includes meeting 
the needs of the aviation community that relies on this data, and we 
have endeavored to incorporate as many of its suggestions as possible 
in this proposal. The Department recognizes its obligation to measure 
passenger travel utilizing techniques that Congress, the industry, and 
the public recognize as valid, current, and reasonable industry 
measurements. In order to do this, the Department proposes to collect 
information about the issuance of the Ticketed Itinerary and to collect 
additional information about the travel described in the itinerary. 
With these changes, the Department proposes to abandon the concept of 
Directional Passenger in favor of One-way Trips to define True O&D.
    The Department proposes to expand the scope of data that, 
currently, results in an insufficient volume of data to meet basic 
tests of validity and reliability. Therefore, the Department is 
abandoning the reliance on a 10 percent sample and is proposing 100 
percent reporting of eligible Ticketed Itineraries. The Department 
intends to eliminate the limitations imposed on the scope of data that 
resulted in an overabundance of exceptions that compromised data 
quality. Therefore, the Department is removing the various exceptions 
for reporting long itineraries and non-standard itineraries and 
eliminating alternative data sample collection techniques for travel in 
major markets.
    The Department proposes to expand the scope of data in order to 
gather data

[[Page 8154]]

elements required to understand and disseminate useful information 
about passenger travel and thereby proposes to eliminate the bundling 
of ticket taxes and fees with the ticketed fare.
    The current O&D Survey includes the following data elements: (1) 
Point of origin, (2) Carrier on each flight-coupon stage, (3) fare-
basis code for each flight-coupon stage, (4) points of stopover or 
connection (interline and intraline), (5) point of destination, (6) 
number of passengers, and (7) total dollar value of ticket. The 
proposed revision of the O&D Survey includes additional traffic 
elements that occur for each Flight-Stage and sale elements that occur 
only once for an individual itinerary.
c. Proposed Traffic Elements
    1. Flight-Stage Sequence Number. A two-character ordinal sequence 
number beginning with 01 that the Participating Carriers will assign to 
each Flight-Stage of a Ticketed Itinerary.
    2. Airport Codes. a. Flight-Stage Origin Airport. The airport's 
IATA location identifier from which a Flight-Stage departs. The 
Department proposes to accept a city code in lieu of airport code only 
when the Flight-Stage flight number is OPEN, the itinerary uses a City 
Code instead of an airport code, and the scheduled Carrier serves 
multiple airports within the city making the origin airport unknowable.
    b. Flight-Stage Destination Airport. The airport's IATA location 
identifier at which a Flight-Stage arrives. The Department proposes to 
accept a city code in lieu of airport code only when the Flight-Stage 
flight number is OPEN, the itinerary uses a City Code instead of an 
airport code, and the scheduled Carrier serves multiple airports within 
the city making the destination airport unknowable.
    3. Carrier Codes. a. Operating Carrier. The IATA issued Airline 
Designator code of the U.S. Air Carrier or Foreign Air Carrier 
operating the equipment used on the Flight-Stage.
    b. Marketing Carrier. The IATA issued Airline Designator code of 
the U.S. Air Carrier or Foreign Air Carrier marketing the Flight-Stage.
    4. Scheduled Flight Date. The date on which the Flight-Stage is 
scheduled to depart.
    5. Scheduled Departure Time. The scheduled local flight departure 
time of the Flight-Stage.
    6. Master Flight Number. The Airline Designator code and flight 
number under which the flight inventory is managed.
    7. Scheduled Arrival Date. The date on which the Flight-Stage is 
scheduled to arrive.
    8. Scheduled Arrival Time. The scheduled local arrival time of the 
Flight-Stage.
    9. Fare Basis Code/Ticket Designator. The alphanumeric code 
identifying the fare by class, qualification, and restriction 
associated with the Flight-Stage.
    10. Ticketing Class of Service. A one-character code indicating the 
service cabin within the aircraft in which the passenger is scheduled 
to be seated under the fare rules stated for each Flight-Stage of the 
Ticketed Itinerary.
d. Proposed Sale Elements
    1. Issuing Carrier Identifier. The Issuing Carrier's assigned IATA 
recognized airline numeric code.
    2. Ticketed Itinerary Identifier. The alphanumeric identifier for 
the Ticketed Itinerary. This identifier identifies a unique itinerary 
for each Issuing Carrier Identifier and Date of Issue.
    3. Date of Issue. The local date on which the Ticketed Itinerary 
was issued.
    4. Fare Amount. The Fare Amount is the monetary amount the Issuing 
Carrier receives from the ticket purchaser on behalf of all the U.S. 
Air Carriers or Foreign Air Carriers included in the itinerary. The 
Fare Amount includes the Carrier-imposed fees and surcharges, such as 
fuel surcharges, for the carriage of a passenger and allowable free 
baggage on the passenger's complete itinerary, denominated in U.S. 
dollars, and accurate to two decimal places, rounded. The Fare Amount 
excludes taxes and fees imposed by Federal, state, local and foreign 
governments and excess baggage fees.
    5. Government Taxes and Fees. a. Government Imposed Tax/Fee 
Identifier. The government tax or fee identifier. The Department's 
codes will be listed in the Passenger Origin-Destination Survey 
Directives issued by the Department.
    b. Government Imposed Taxes/Fee Amount. This field will contain the 
value of the tax or fee specified by the identifier that precedes it, 
denominated in U.S. dollars and accurate to two decimal places, 
rounded.
    6. Ticketing Entity Outlet Type. The identifying code of the 
distribution channel through which the Ticketed Itinerary was issued. 
The Department's codes will be listed in the Passenger Origin-
Destination Survey Directives issued by the Department.
    7. Customer Loyalty Program Identifier. The program identification 
code assigned to the airline customer loyalty program or alliance 
customer loyalty program under which the passenger accrues benefits.
    8. Customer Loyalty Program Award Ticket Indicator. The one-
character identifying code to indicate that customer loyalty program 
credits were expended in obtaining the Ticketed Itinerary.
    9. Number of Passengers. The numeric value representing the number 
of passengers traveling on the Ticketed Itinerary. If multiple 
passengers have flown on a ticketed itinerary, we are considering 
requiring carriers to report separate records, with separate fares, for 
any groups of passengers on the itinerary that have flown under 
differing fare basis codes or under special discount fares. For 
example, if lower fares are paid for children within a tour group, the 
children's fares should be reported in a separate data record with a 
separate fare. When the projected number of passengers on a group 
ticket differs from the actual number, we are considering requiring 
carriers to report the actual number of passengers who flew on the 
group ticket as of the reporting event. BTS believes that these 
disaggregations are necessary to calculate its air travel price index. 
We seek comment on carrier practices and handling of group tickets and 
on the feasibility of the methodology we are considering.
    10. Itinerary Copy Date. The date that the Participating Carrier 
copied the Ticketed Itinerary data for submission to the Department.

2. Discussion of the Proposed O&D Survey

a. Traffic Elements
    In its comments to the Department's ANPRM, the Regional Airline 
Association (Docket OST-1998-4043-11) stated that the measure of 
passenger traffic used in the O&D Survey fails to satisfy the 
industry's need for timely and relevant information. Unisys Corporation 
(Docket OST-1998-4043-22) and Delta Air Lines (Docket OST-1998-4043-21) 
stated that the O&D Survey should adopt the True O&D concept. The Port 
of Portland (Docket OST-1998-4043-19) urged the recognition of multi-
carrier O&Ds. In requesting that the Department begin using ``relevant 
information,'' ``True O&D,'' and ``multi-carrier O&D'' to measure 
passenger traffic, these respondents made clear that, for the aviation 
industry, the Directional Passenger is no longer an acceptable measure 
of True O&D. The Department agrees with the Regional Airline 
Association that, if we are to provide relevant information about the 
scheduled air transportation industry, we must change the basic 
calculation of the True O&D used in the O&D Survey to the calculation 
of One-way Trip

[[Page 8155]]

commonly used in the air travel industry.
    Scheduled Air Carriers in the U.S. use a variety of methodologies 
to construct One-way Trips in order to comply with the provisions of 
collecting September 11th Security Fees. The most widely accepted is a 
methodology based on ``time in hub.'' Here, the number of hours spent 
in an airport is the gauge by which it is determined whether the 
passenger (1) intended to continue the trip by changing planes, or (2) 
intended to remain in that city for other purposes. It is sometimes 
known as ``the four hour rule'' methodology because four hours is the 
most common maximum domestic connection time allowed with this method. 
In this methodology, certain other decision criteria are applied to 
supplement the time in hub determination, such as special rules for 
itineraries in which there are no stops that exceed the time allowance, 
itineraries with ``void'' and ``OPEN'' coupons, and itineraries that 
backtrack over the same set of airports.
    The Department proposes to define a One-way Trip in terms of time 
spent in transit, subject to certain other rules. All other 
methodologies that are in use at Carriers require proprietary knowledge 
or were uniquely adapted to the needs of a particular Carrier, and 
would not apply industry-wide to all Carriers. These characteristics 
make the other methodologies unsuitable for use by the Department on a 
universal basis. The Department seeks comments from the industry and 
the public regarding the optimal method for constructing a One-way 
Trip. We will consider all the suggestions for appropriate 
determination of a One-way Trip, and establish a consensus of the 
guidelines provided by the industry to use in processing data in the 
O&D Survey for dissemination. We propose to require the following data 
elements for each segment of the Ticketed Itinerary as input for the 
One-way Trip determination: (1) Flight-Stage Sequence Number, (2) 
Airport Codes, (3) Carrier Codes, (4) Scheduled Flight Date, (5) Master 
Flight Number, (6) Scheduled Departure Time, (7) Scheduled Arrival 
Date, (8) Scheduled Arrival Time, (9) Fare Basis Code/Ticket 
Designator, and (10) Ticketing Class of Service.
    1. Flight-Stage Sequence Number. Every Flight-Stage of an itinerary 
must have a sequence number assigned to it by the Issuing Carrier. 
Should problems arise, a positive identifier, assigned by the provider 
of the data, will help facilitate communication and resolution. Flight-
Stage Sequence Number will begin each itinerary with Flight-Stage 01 
and continue with sequential Flight-Stages. Surface Flight Coupon 
Stages (known within the industry as surface segments, including those 
provided by designated surface carriers such as railroads) that are 
included in the itinerary will be included in the numbering sequence. 
Voids (also known as arrival unknown segments, or ARNK segments) and 
OPEN segments are to be included in the numbering sequence.
    2. Airport Code. Airport code for both Flight-Stage Origin Airport 
and Flight-Stage Destination Airport will be identified by the IATA 
location identifier that uniquely identifies that airport. American 
Airlines (Docket OST-1998-4043-5) and others commented that the 
presence of City Codes in the itinerary in lieu of airport codes 
resulted in data inconsistency. In the current O&D Survey, 
Participating Carriers from time to time had to attempt to decipher the 
itinerary using the pricing area of the ticket. The Department believes 
that our proposed change, which designates the Issuing Carrier as the 
Participating Carrier, will eliminate the problem caused by manual 
examination of the pricing area. However, the Department recognizes 
that when a Carrier sells an itinerary known as an ``OPEN'' itinerary, 
where (1) the itinerary is purchased but not booked, (2) the purchased 
itinerary includes a City Code instead of an airport code, and (3) the 
scheduled Carrier provides service to multiple airports at that city, 
then the airport code is unknowable. In this case, the Air Carrier must 
issue a ticket where the appropriate value is a City Code and the 
Department proposes to accept in the O&D Survey the reporting of City 
Codes in the itinerary only under this circumstance.
    3. Carrier Code. Where once Carrier Code would have been described 
simply as the Airline Designator of the U.S. Air Carrier or Foreign Air 
Carrier that transported the passenger, the onset of code-sharing has 
introduced multiple Carriers into the ticketing process. The Marketing 
Carrier Code is the Carrier identifier that the passenger sees when 
examining the Ticketed Itinerary. The Operating Carrier is the Carrier 
that operates the aircraft that transports the passenger. Marketing 
Carrier and Operating Carrier will be identified by the IATA Airline 
Designator assigned to them. If the Carrier has no IATA Airline 
Designator code, then the Department will assign a reporting code. When 
a Carrier markets surface transportation as an extension of its air 
transportation service, and the transportation is (1) provided by a 
common carrier that is not an Air Carrier or Foreign Air Carrier, and 
(2) described on the Ticketed Itinerary and included in the total fare, 
then the surface carrier's IATA Airline Designator will serve as the 
Operating Carrier and the Carrier's IATA Airline Designator will serve 
as the Marketing Carrier.
    4. Scheduled Flight Date. The Department's ability to determine 
One-way Trips from the O&D Survey information is crippled by a lack of 
information about Scheduled Flight Date. The lack of information about 
Scheduled Flight Date makes it impossible to know which passengers pass 
through a location on their itinerary to stay only long enough to 
change planes, and which passengers remain multiple days at a location.
    In its comments, Data Base Products, Inc. (Docket OST-1998-4043-36) 
cited another inaccuracy, mentioning that the O&D Survey passengers are 
counted in the quarter in which the first departure took place 
regardless of the flight date scheduled in the itinerary. It pointed 
out that this inaccuracy is most noticeable in the transition from 
fourth quarter to first quarter where all trips are reported in the 
fourth quarter despite a large number of people departing in December 
who are ticketed to return in January. The scheduled air transportation 
industry does not always fluctuate in orderly monthly cyclic patterns. 
Holidays such as Thanksgiving and Easter have a great effect on air 
travel patterns and thereby require daily data.
    Monthly data are problematic in other ways. From time to time, 
including times of emergency such as September 11th, the Department has 
found it necessary to request flight data at the weekly or daily level. 
Complying with these ad hoc data requests imposes a burden on Air 
Carriers. By routinely collecting data by flight date instead of by 
flight month, the Department will be able to avoid the need for special 
reporting requests by flight date. The ability to analyze air travel by 
day-of-week and in seven day moving averages will enable the Department 
to facilitate more robust economic measurement and analysis and be 
prepared to analyze the effects on air transportation when significant 
economic, weather and security related shocks to the nation occur. 
Because the determination of One-way Trips is critical to the 
Department's assessment of the air transportation industry, the 
Department proposes to collect information by Scheduled Flight Date.
    5. Scheduled Departure Time. The Department's ability to determine 
One-way Trips from the O&D Survey

[[Page 8156]]

information is also crippled by a lack of information about Scheduled 
Departure Time. The lack of information about Scheduled Departure Time 
makes it impossible to know which passengers pass through a location on 
their itinerary to stay only long enough to change planes, and which 
passengers remain for an extended period at a location.
    Knowledge of the scheduled time of departure helps the Department 
understand the economics of the air travel industry. The FAA oversees 
the development of the nation's air travel infrastructure, and 
knowledge of Scheduled Departure Time allows it to calculate the costs 
and benefits of safety regulations and infrastructure improvements. 
Similarly, departure time will assist the TSA in meeting the needs of 
airports and Air Carriers with the appropriate staff levels for airport 
security. Flight-Coupon Stages where the travel plans are OPEN will be 
assigned an early morning departure time to be determined later, and 
the results of that determination will be published in the Passenger 
Origin-Destination Survey Directives issued by the Department.
    6. Master Flight Number. Master Flight Number shall consist of the 
two-character Airline Designator of the Carrier that manages the 
inventory and the flight number under which that Carrier manages the 
flight. In flights that are not involved in a code-share and not 
involved in starburst or funnel flight operations, the Master Flight 
Number will be the same as the Marketing Flight Number. When code-
shares, funnel flights and starburst flights are involved, this data 
element will be used to identify the Airline Designator and true flight 
number under which the flight inventory is controlled. The Department 
proposes to collect this data element to fill in the gap between the 
data the industry uses to track flights and the data the Department 
collects.
    The term ``code-share'' is not sufficiently precise to describe 
what has become two distinct concepts. For purposes of this rulemaking, 
the term Alliance Code-Share will be used to describe the code-share 
relationship wherein each Carrier keeps its identity and livery 
distinct from one another and wherein each Carrier has the opportunity 
to market the other's flights. The term Franchise Code-Share will be 
used to describe the code-share relationship wherein the Franchise 
Code-Share Partner never appears as the Marketing Carrier and 
generally, although not necessarily, paints its aircraft in the livery 
of the Mainline Partner.
    At the inception of code-sharing, the scheduled air passenger 
industry coined the term Marketing Carrier to distinguish it from the 
Operating Air Carrier that transported the passenger. According to the 
ATPCO TCN Ticket Exchange Service Specifications Guide instructions for 
populating the data element ``Coupon/Segment Marketing Carrier'' 
(glossary reference MCAR), the Marketing Carrier is:

    The carrier that appears as the Carrier for a segment on the 
ticket. In a code-sharing arrangement, if a CRS knows the Servicing 
Carrier (CARR) and the Marketing Carrier (MCAR) both elements CARR 
and MCAR should be populated. If the CRS only knows the Marketing 
Carrier (MCAR), Marketing Carrier should be populated and Servicing 
Carrier should be blank.

    According to the ATPCO TCN Ticket Exchange Service Specifications 
Guide instructions for populating data element ``Coupon/Segment Carrier 
Code'' (glossary reference CARR), the Carrier is:

    The Carrier that carried the passenger. A CRS will populate this 
element with the same code as the Marketing Carrier (MCAR) unless 
the CRS knows of a code-sharing arrangement. If the CRS knows of a 
code-sharing arrangement, the CRS will code the Carrier that appears 
on the ticket as the Marketing Carrier (MCAR) and the Carrier that 
carries the passenger as the Carrier Code (CARR).

    The Department, recognizing the importance of keeping track of 
code-share relationships on Ticketed Itineraries, amended the O&D 
Survey to provide for code-share ticketing practices. The Department 
defined the term ``Ticketed air carrier'', which functions as the 
equivalent of the industry term Marketing Carrier. The definition of 
Ticketed Air Carrier in 14 CFR Part 241 Section 19-7 Appendix A, X. 
Glossary of Terms is:

    Under a code-share arrangement, the air carrier whose two-
character air carrier code is used for a flight segment, whether or 
not it actually operates the flight segment.

    However, the Department diverged from standard industry practice 
when we defined Operating Air Carrier in a way that is slightly 
different than the industry term Coupon/Segment Carrier Code. Operating 
Air Carrier 14 CFR Part 241 Section 19-7 Appendix A, X. Glossary of 
Terms is:

    Under a code-share arrangement, the air carrier whose aircraft 
and flight crew are used to perform a flight segment.

    In an Alliance Code-Share, the industry's definition of Marketing 
Carrier is the equivalent of the Department's Ticketed Air Carrier, and 
the industry's definition of Coupon/Segment Carrier is the equivalent 
of the Department's Operating Air Carrier. However, in a Franchise 
Code-Share, the industry data is populated as if the relationship is a 
wet-lease and, therefore, the Airline Designator of the Mainline 
Partner serves as both the Marketing Carrier and the Coupon/Segment 
Carrier. Although the Department rules require the Issuing Carrier (or 
Issuing Carrier's agent) to notify the passenger of the identity of 
each Operating Air Carrier in the routing, standard industry practice 
does not list the Franchise Code-Share Partner's Airline Designator on 
the Ticketed Itinerary. Nevertheless, the O&D Survey rules require the 
Participating Carrier to report the Airline Designator of the Franchise 
Code-Share Partner Carrier as the Operating Air Carrier, and report the 
Airline Designator of the Mainline Partner as the Marketing Carrier.
    The difference in the treatment of data between the industry and 
the Department's O&D Survey is most clear when examining an itinerary 
that includes both an Alliance Code Share and a Franchise Code-Share. 
For example, if Lufthansa German Airlines (Lufthansa) had authority to 
sell a code-share itinerary from Frankfurt (FRA) to Dulles (IAD) to 
Norfolk (ORF), and the IAD to ORF portion is on an aircraft operated by 
Mesa Airlines (Mesa), then the O&D Survey submission would show two 
flights. The FRA to IAD portion would be reported as Ticketing Air 
Carrier of Lufthansa and Operating Air Carrier of Lufthansa. The IAD to 
ORF portion of the travel would be reported as Ticketing Air Carrier of 
Lufthansa and the Operating Air Carrier of Mesa. The Department does 
not know the identity of the Mainline Partner Air Carrier. Logically, 
in this case, a user would assume Mesa is operating as United Express 
but there is nothing to preclude Mesa from flying IAD to ORF as US 
Airways Express, so such assumptions are not to be relied on. The 
Department's data is used for time series analysis over many years and 
no user of the data can logically deduce an Air Carrier's livery and 
operations over many years of service.
    The Department has a statutory responsibility to monitor airline 
code-share relationships. As regional Carriers have increasingly taken 
multiple Mainline Partner Carriers into code-share arrangements, 
Franchise Code-Shares have become increasingly difficult for the 
Department to monitor. When an Air Carrier takes on a Franchise Code-
Share relationship with two Mainline Partners that, in turn, have 
Alliance code-share relationships

[[Page 8157]]

with each other, the need for a new data element in the O&D Survey is 
clear. When a Carrier operates as a Franchise Code-Share Partner for 
both US Airways and United Air Lines (United), the O&D Survey data 
records cannot distinguish between (1) flying in the livery of United, 
ticketed as a US Airways flight and (2) flying in the livery of US 
Airways, ticketed as a US Airways flight. In situation (1), the 
identity of the Mainline Partner (United, in this case) is lost. In 
situation (2), the identity of the Mainline Partner (US Airways, in 
this case) is not lost, but there is no way for the user of the data to 
know that. Since the user is provided no ability to distinguish between 
a record reported in situation (1) and a record reported in situation 
(2), the value of the data in assessing code-share travel partnerships 
is greatly diminished.
    To further illustrate how Carriers would report the Marketing 
Carrier, Operating Carrier, and Master Flight Number data elements 
under this proposed system, consider the following hypothetical 
examples of itineraries involving a single US Airways Express flight 
operated by Mesa. Under this scenario, US Airways contracts with Mesa 
(IATA Airline Designator YV) to operate regional jet service between 
Charlotte (CLT) and Charleston, SC (CHS) on a fee per departure basis. 
Mesa operates the aircraft but the aircraft is painted in US Airways' 
livery. US Airways is wholly responsible for managing the inventory on 
the flight and bears all of the revenue risk associated with the 
flight. US Airways markets this flight to its customers as US Airways 
Express flight 2808. Mesa does not market this flight to the public 
under its own designator code and has no responsibility for managing 
the inventory. US Airways' alliance partners United and Lufthansa 
market US Airways Express flight 2808 as United 7808 and Lufthansa 
8808, respectively. Although United and Lufthansa sell seats on US 
Airways flight 2808 under their respective designators, neither Carrier 
has any responsibility for managing the inventory on this flight. The 
following itinerary examples illustrate how the proposed system would 
work in practice.

    Itinerary 1: Lufthansa marketed Munich-Charleston One-way Trip with 
connection over Charlotte to US Airways Express flight 2808. Under this 
scenario, the passenger buys a ticket from Munich to Charlotte on 
LH100, a Lufthansa operated flight. In Charlotte, the passenger will 
connect to Charleston on LH8808, which is the Lufthansa marketing 
flight number for US Airways Express flight US2808 operated by Mesa. 
For the LH8808 Flight-Stage, the Participating Carrier would populate 
the Marketing Carrier, Operating Carrier, and Master Flight Number data 
elements as follows:
    Marketing Carrier: LH.
    Operating Carrier: YV.
    Master Flight Number: US2808.

    Itinerary 2: United marketed Chicago-Charleston One-way Trip with 
connection over Charlotte to US Airways Express flight 2808. Under this 
scenario, the passenger buys a ticket from Chicago to Charlotte on 
UA200, a United operated flight. In Charlotte, the passenger will 
connect to Charleston on UA7808, which is the United marketing flight 
number for US Airways Express flight US2808 operated by Mesa. For the 
UA7808 Flight-Stage, the Participating Carrier would populate the 
Marketing Carrier, Operating Carrier, and Master Flight Number data 
elements as follows:
    Marketing Carrier: UA.
    Operating Carrier: YV.
    Master Flight Number: US2808.

    Itinerary 3: US Airways marketed Charlotte-Charleston One-way Trip, 
Non-stop on US Airways Express flight 2808. Under this scenario, the 
passenger buys a ticket from Charlotte to Charleston on US2808. For the 
US2808 Flight-Stage, the Participating Carrier would populate the 
Marketing Carrier, Operating Carrier, and Master Flight Number data 
elements as follows:
    Marketing Carrier: US.
    Operating Carrier: YV.
    Master Flight Number: US2808.

    In all three of the situations described above, if the US Airways 
flight from Charlotte to Charleston were to be operated by US Airways 
itself (i.e. with mainline equipment rather than by one of its regional 
affiliates) as hypothetical flight US Airways 518, the Operating 
Carrier field in all of the above examples would instead reflect 
``US.'' The Master Flight Number field would reflect ``US518.''
    It is also important to know the Master Flight Number when Carriers 
use funnel flights and starburst flights to market their product to 
consumers. Correlations between the T-100/T-100(f) would be very 
difficult if the O&D Survey is only reported under the various flight 
numbers that are assigned in funnel flights and starburst flights. 
Knowing the Master Flight Number will provide the common element needed 
for accurate correlation.
    The Department must require this data element to fulfill its 
mandate to protect consumers by monitoring code-share ticketing and 
other marketing practices. Therefore, the Department proposes to 
collect the Master Flight Number, which will consist of the Airline 
Designator and true flight number of the Mainline Partner that manages 
the inventory of the flight. The Department invites comment on this 
topic and on the efficacy and difficulty of populating this data 
element.
    7. Scheduled Arrival Date. The Department's ability to determine 
One-way Trips is dependent on knowing when a scheduled flight arrives 
in an airport. Scheduled Arrival Time is meaningless without Scheduled 
Arrival Date.
    8. Scheduled Arrival Time. The Department's ability to determine 
One-way Trips from the O&D Survey information is further crippled by a 
lack of information about Scheduled Arrival Time. The lack of 
information about Scheduled Arrival Time makes it impossible to know 
which passengers pass through a location on their itinerary to stay 
only long enough to change planes, and which passengers remain for an 
extended period at a location.
    Flight-Coupon Stages where the travel plans are OPEN will be 
assigned an arrival time to be determined later and the results of that 
determination will be published in the Passenger Origin-Destination 
Survey Directives issued by the Department.
    9. Fare Basis Code/Ticket Designator. The Department requires fare 
basis code and ticket designator to understand the restrictions placed 
on the purchase of travel and the economics of the air travel industry. 
Several respondents to the ANPRM requested that the Department collect 
information that will enable it to provide a classification of fares. 
The Fare Basis Code is the alphanumeric code identifying the fare by 
class, qualification, and restrictions associated with the travel 
segment. The Ticket Designator is the code indicating that the fare 
basis code is modified by rules associated with the ticket designator 
code. Ticket Designator is specified in the ATPCO TCN Ticket Exchange 
Service Specifications Guide instructions for populating data element 
``Coupon/Segment Fare Basis/Tkt Designator'' (glossary reference FBTD) 
as the code that appears in the same field as the Fare Basis Code 
separated by an oblique ``/''.
    10. Ticketing Class of Service. In order to understand service 
demand and to understand the quality of services to communities, the 
Department proposes to continue the practice of collecting information 
about class of service, also known as cabin class. In response to the 
ANPRM, American Airlines (Docket

[[Page 8158]]

OST-1998-4043-5) and others noted that non-standard reporting of class 
of service degrades the usefulness of the published data. The most 
expensive class of service, generally provided in the cabin located 
nearest the nose of the plane, is typically referred to as the first 
class cabin. The least expensive class of service (coach/economy/main) 
cabin is typically located in the aft-most section of the aircraft. 
Sometimes a Carrier will avoid offering a class of service marketed as 
first class, and choose to market the front cabin as business class 
instead. To further complicate matters, more than one Carrier markets 
the front cabin of its narrowbody aircraft flying on a domestic route 
and the front cabin of its widebody aircraft flying on an international 
route with the same ``first class'' designation. Today, certain 
Carriers offer ``premium coach'' seating and in the future, Carriers 
may offer an ``ultra-premium'' (i.e. more expensive than first class) 
cabin. We are unaware of an objective class of service definition 
maintained anywhere in the industry that distinguishes between these 
classes of service. Indeed, currently there is no objective class of 
service definition that would prohibit a Carrier providing only a 
single class of service from calling it first class, even if that 
single class of service was comparable to coach class at a Carrier that 
offers multiple classes of service.
    The Department desires to change the class of service designations 
to make them as objective and as meaningful as possible. However, we 
believe the marketplace is the best arbiter of a Carrier's claim to 
offer first class service. We do not wish to codify a particular 
standard of service or seat pitch as the point that differentiates a 
first class accommodation from a business class accommodation. The 
Department seeks consistent class of service designations but there are 
no objectively defined designations in the industry. Therefore, the 
Department proposes to provide a framework in which each airline will 
assign a number to the service cabins in its fleet from the least 
expensive to the most expensive, such that the least expensive cabin 
(usually the aft-most cabin) is designated as ``1'' and each defined 
cabin class above cabin 1 (i.e. those that the Carrier markets at 
higher price points and that are generally physically located toward 
the front of the aircraft) will be designated with the next highest 
ordinal number. The number ``2'' will generally designate what has 
heretofore been described as premium coach. The number ``3'' will 
generally designate what has heretofore been described as business 
class or first class of a two cabin aircraft. The number ``4'' will 
generally designate what has been described as first class of a three 
cabin aircraft. The number ``5'' will designate ultra-premium first 
class. The Carriers would provide the Department with up to date 
definitions of its 5 class of service designations and would use their 
own internal class of service codes to classify their passengers. When 
a Carrier operates a fleet of aircraft with a class of service that is 
arguably similar to the class of service offered by competing Carriers, 
and if the Department believes a compelling public interest is served 
by re-designating the passengers as having been transported in a 
different class of service, the Department reserves the right to re-
designate passengers on such an airline into a different class of 
service. The Department seeks comment from Carriers and the public on 
the efficacy of this proposal.
b. Sale Elements
    1. Issuing Carrier Identifier. Every Carrier that issues Ticketed 
Itineraries must have a unique three-digit numeric identifier. The 
Issuing Carrier is responsible for the ticket stock on which the 
itinerary is issued. The Department proposes to identify the Issuing 
Carrier with the Carrier's assigned IATA three-digit code. This code 
also serves as the first three digits of the 13-digit ticket number on 
a standard agent ticket.
    2. Ticketed Itinerary Identifier. Carriers assign a ticket number 
or Passenger Name Record (PNR) identifier to every Ticketed Itinerary 
that is unique when used in conjunction with an Issuing Carrier 
Identifier and the Date of Issue. This data element will contain the 
value of that identifier. The Department requires a unique identifier 
to facilitate communication with the Participating Carriers in the 
Department's effort to monitor the data and the Participating Carrier 
requires a unique identifier to facilitate communication with the 
Department when data must be corrected and resubmitted. The Ticketed 
Itinerary Identifier is necessary for effective resolution of problems.
    3. Date of Issue. The Department proposes to require Date of Issue 
because it is part of the unique identifier of the Ticketed Itinerary. 
In the past, the Department has often had to require Air Carriers to 
provide supplemental information about travel because it lacked 
information about ticket sales dates. DOJ and DOC both require 
knowledge of the date of sale in the course of carrying out their 
mandates. The date the Ticketed Itinerary is issued is an important 
component of understanding the economics of the airline industry. 
Falling passenger counts or rising passenger counts have traditionally 
been the measure of the economic engine that travel provides to the 
economy. However, for some purposes, the rising and falling volume of 
daily ticket sales over time is a better measure of industry economics. 
Another key element of air transportation economics is the measurement 
of the number of days between ticket sale and first use of the Ticketed 
Itinerary. Known as the booking window, or advance purchase window, the 
increase or decrease of the booking window year over year is an 
important measure of consumer confidence. To understand the dynamics of 
rising and falling volume of itineraries sold and the size of the 
booking window, the Department must collect the Date of Issue.
    4. Fare Amount. The Department's ability to measure fare 
information independent of taxes collected is vital to the 
understanding of aviation commerce. Carriers shall convert fares paid 
in currencies other than U.S. Dollars into U.S. Dollars using whatever 
currency conversion methods the Carrier customarily uses in its normal 
course of business. The current O&D Survey requires Participating 
Carriers to truncate the cents from the reported total amount. This 
practice artificially lowers the Department's estimate of total amount 
collected because an unknown number of cents have been dropped from 
millions of tickets. Rounding to the nearest cent will allow some 
imprecision to remain, but the Department believes that losing 
fractions of one half cent is an acceptable degree of imprecision. Fare 
amounts have customarily not been whole dollar amounts even when they 
do not require currency conversion to U.S. dollars. Therefore, the 
Department proposes to collect fare information independent of tax 
information, and further proposes to collect fare information accurate 
to two decimal places rounded.
    5. Government Imposed Taxes/Fees. The ability to identify each and 
every tax, passenger facility charge, and fee that the consumer must 
pay is central to the Department's understanding of the economics of 
travel. Disaggregating taxes and government-imposed fees from the fare 
will enable the Department to more accurately monitor changes in 
airfares and separately monitor the changes in taxes and fees paid, 
both of which have substantial policy considerations.
    On January 9, 2003, Captain Duane Woerth, President of the Air Line 
Pilots Association International, testified

[[Page 8159]]

before the Senate Committee on Commerce, Science, and Transportation 
that airline taxes were choking the industry.\6\ He testified that, 
according to the Air Transport Association (ATA), taxes on a $100 
domestic ticket could be as high as 44 percent of the amount collected. 
Without improvements to the O&D Survey, it is impossible to use 
Department data to precisely determine whether the testimony was based 
on an example of a typical ticket or an extreme case, and whether it is 
indicative of an industry-wide trend affecting a substantial number of 
passengers.
---------------------------------------------------------------------------

    \6\ Source: http://commerce.senate.gov/pdf/woerth010903.pdf.
---------------------------------------------------------------------------

    The Department proposes to adopt the industry's standard Government 
imposed tax/fee identifiers as documented in the ATPCO TCN Ticket 
Exchange Service Specifications Guide instructions for populating data 
element ``Tax/Miscellaneous Fee Type'' (glossary reference TMFT). 
Carriers shall convert amounts paid in currencies other than U.S. 
Dollars into U.S. Dollars using whatever currency conversion methods 
the Carrier customarily uses in its normal course of business. The 
Department proposes to require the reporting of taxes and fees 
collected by the Carriers on behalf of government entities and further 
proposes to collect tax and fee information accurate to two decimal 
places rounded.
    6. Ticketing Entity Outlet Type. BLS (Docket OST-1998-4043-54), 
American Airlines (Docket OST-1998-4043-5), and Northwest Airlines 
(Docket OST-1998-4043-49), among others, specifically requested that 
the O&D Survey include a distribution channel component. The Department 
has conducted studies of airline marketing and distribution practices 
and how they affect the cost structure of Carriers as well as the 
associated impact on consumers. Knowledge of the distribution channel 
used to deliver the ticket to the passenger has become an important 
part of aviation analysis.
    The Department has lacked the data to sufficiently examine such 
changes precisely at a time when they have become an important part of 
the Carrier's efforts to reduce costs. The Department proposes to 
collect an indicator that identifies the type of location responsible 
for issuing the Ticketed Itinerary. The Department seeks comment 
regarding the efficacy of using codes based on those already in use in 
the industry as listed in ATPCO's TCN Ticket Exchange Service 
Specifications Guide instructions for populating data element 
``Ticketing Entity Outlet Type'' (glossary reference TIOT).
     A = Airline office
     B = Business corporate account
     C = Consolidator
     D = Direct dial in locations (Consumers, PC Users)
     E = End user access via third party (Internet, Minitel, 
etc)
     G = General sales office
     I = Internal CRS locations
     M = Multi-access
     N = Non-IATA agents
     P = Pending agents
     S = Self service machine
     T = IATA travel agent
     U = Unknown
     V = Vendor (car, hotel)
     W = Wholesaler or tour operator
    The codes will be listed in the Passenger Origin-Destination Survey 
Directives issued by the Department.
    7. Customer Loyalty Program Identifier. Some users of the O&D 
Survey data have requested a data element to record the program name 
when a passenger has declared a membership in a loyalty program. The 
need to monitor domestic and international alliances and the causes and 
consequences of share shift associated with the alliance have become 
critical in understanding industry trends and discerning their 
competitive impact. The Department proposes to collect the name of the 
program in which the passenger is earning credit. We are unaware of any 
industry standard loyalty program identifiers. The ATPCO TCN Ticket 
Exchange Service Specifications Guide instructions for populating data 
element ``Coupon/Segment Frequent Flyer Reference'' (glossary reference 
FFRF) indicate that the reference include the ``Airline Designator of 
the airline that assigned the Frequent Flyer Number'' which presupposes 
that loyalty programs belong to an airline rather than an alliance of 
airlines.
    We propose to use the industry standard loyalty program identifiers 
if a consensus exists, otherwise, the Department will maintain and 
publish a list of loyalty programs and appropriate identifying codes 
for those programs. We are aware that not all ticket purchasers declare 
their membership in a loyalty program at the time the itinerary is 
ticketed. Passengers that identify themselves as members of a program 
after the Ticketed Itinerary has been submitted to the O&D Survey will 
remain unrecognized in the Department's statistics. The Department 
seeks comment from the industry and the public regarding the ability of 
the Carriers to reliably populate this element.
    8. Customer Loyalty Program Award Ticket Indicator. The Department 
believes that, to carry out its mandate, it must know when a passenger 
has expended mileage points or award credits to obtain a Ticketed 
Itinerary. The Department proposes the values of ``A'' when the 
customer paid no fare at all, ``P'' when the customer pays partially 
with award credits, and ``U'' when the passenger paid the appropriate 
fare for passage, but used award credit to upgrade to a more exclusive 
class of service. The Department seeks comment from the industry and 
the public regarding the ability of the Carriers to reliably populate 
this element.
    9. Number of Passengers. The majority of Ticketed Itineraries are 
issued to one passenger, but some Ticketed Itineraries describe the 
travel of multiple passengers traveling together on the same itinerary. 
The Department must collect the count of passengers included in the 
Ticketed Itinerary. Without knowledge of this value, the data from 
several of the other elements, particularly the Fare Amount, become 
invalid.
    10. Itinerary Copy Date. Since Ticketed Itinerary databases are 
operational databases for the Carriers, and since operational systems 
are by their nature constantly updating data, and since the Department 
is requiring a copy of the Participating Carrier's Ticketed Itinerary 
data to be taken at a given point in time, it is important to have that 
point in time recorded. The copy date will also facilitate the 
correction of data. Participating Carriers wishing to replace 
previously submitted data can do so more easily if the Department can 
identify old and new copies of records using the copy date.
    We explored the possibility of omitting this data element on the 
assumption that the Department could record the date that the data was 
received. However, this option would record the date of successful data 
transmission rather than record the date the Participating Carrier's 
operational data was copied. To best facilitate communication, the Date 
of Submission must be set by the Participating Carrier at the date the 
data is copied, not by the Department at the date the data is received. 
Knowledge of the Itinerary Copy Date will help alleviate questions and 
concerns about data quality.
c. Other Suggested Elements
    Various members of the air transportation community have suggested 
the following as elements the Department should collect. The Department 
does not propose to collect

[[Page 8160]]

these data elements, but we seek further comment advocating the 
inclusion of these suggested elements, and we will consider including 
any one or all of these elements in the list of mandatory elements 
collected under this rule.
    1. Passenger Type. The airline industry has an established 
passenger type code that is used as an indicator of the characteristics 
of the passenger based on a pricing decision. ATPCO's TCN Ticket 
Exchange Service Specifications Guide instructions for populating data 
element ``Passenger Type'' (glossary reference PAST) describes this as 
a three-digit code indicating the type of passenger (e.g., ADT for 
adult fares, CHD for child fares, MIL for military fares and GOV for 
government fares.) Several Carriers and airports that responded to the 
ANPRM requested some kind of information about the type of passenger 
traveling on the Ticketed Itinerary. The Department would also benefit 
from having passenger data type in planning for air transportation 
needs of the future. From time to time, the Department is required to 
conduct reviews of government fares. For example, on at least one 
occasion, the Department has been asked to supply information on the 
number of children that fly on commercial Carriers.
    The National Transportation Safety Board has recommended that BTS 
improve the quality of exposure data available for safety analysis (See 
National Transportation Safety Board, Transportation Safety Databases, 
Report No. SR-02-02, September 11, 2002, p. 38). Exposure data (i.e., 
the number of passengers exposed to the risk of an accident in any 
particular type of transportation) are essential for measuring the 
accident rate for different types of transportation and measuring the 
benefits of safety improvements. Aviation safety analysts are 
particularly interested in certain data that would be collected under 
the proposed rule on characteristics of airline passengers (e.g., 
whether the passengers are adults, children, or infants), so that they 
can estimate the likelihood that passengers would take an alternative 
mode of transportation if safety regulations increased the cost of 
flying. BTS believes that information about passenger type will help it 
calculate a more meaningful ATPI. The Department is considering 
collecting passenger type as a data element and, therefore, we seek 
comment on the availability of passenger information, the consistency 
with which it is populated in airline systems proposed as the source 
for O&D Survey data in this rulemaking, and the reliability of the 
Carriers maintaining a uniform understanding about what each value 
signifies.
    2. Fare Basis Category. The Department currently collects class of 
service information and rudimentary fare classification information in 
a dual-use field called fare basis code. The current classification has 
seven possible values: C (Unrestricted Business Class), D (Restricted 
Business Class), F (Unrestricted First Class), G (Restricted First 
Class), X (Restricted Coach/Economy Class), and Y (Unrestricted Coach/
Economy Class), plus U (Unknown). The dual-use codes indicate (1) the 
class of service (also known as cabin class) appropriate to the fare 
basis the passenger purchased and (2) whether or not the passenger's 
fare basis was issued under one or more restrictions, such as the 
fare's minimum advance purchase requirement or the fare's eligibility 
to be refunded. We continue to believe that Ticketing Class of Service 
is an important element to collect, and we have proposed collecting it 
as explained under section I.(2)(a)(10) of this document. In addition, 
we are considering collecting information about fare basis 
restrictions. We believe that policy makers and the aviation industry 
as a whole would benefit from information about the purpose for which 
the passenger is traveling.
    Several Air Carriers requested fare categorization in their ANPRM 
comments. The most often mentioned classification was a business or 
leisure dichotomy classification. The Department believes that the 
business--leisure dichotomy is a useful but very subjective evaluation, 
which is very difficult to categorize in a standardized manner 
industry-wide, given the data currently available. Our understanding of 
the difficulties faced by the Air Transport Association in its attempt 
to build criteria for categorizing business and leisure fares based on 
existing data elements in Carrier reservations and accounting systems 
tends to verify that belief.
    We believe that classification based on objective and verifiable 
criteria would provide a more useful classification methodology. The 
current classification has only a single aspect, ``restricted'' or 
``unrestricted.'' This, though verifiable, is so broad that it provides 
very little understanding of passenger fares in the current aviation 
environment. We are, therefore, considering and requesting comment on, 
classifications based on a combination of three criteria (1) travel 
eligibility date, (2) purchase eligibility restrictions, and (3) 
refundability/exchangeability. We believe that knowledge of these three 
aspects of a fare would enable a comparison of fares across Carriers 
and provide useful ``passenger type'' data while relying on common 
information stored in carrier accounting and reservations systems.
    The Department believes that categorization of fares would be 
extremely useful to the government and industry users alike, but we 
recognize that there are substantial difficulties in collecting, 
categorizing, and validating the data given current data in Carrier 
reservation and accounting systems. First, the Department would 
necessarily rely on Carriers' classification designations. The 
Department cannot independently edit or validate the Carriers' 
classifications beyond issuing guidelines, which would be as specific 
as possible, but would necessarily be fairly general in nature. Second, 
the complexity and diversity of fare basis codes is enormous. Some fare 
basis codes are designated for single markets. Some are designated for 
a group of markets. Some are designated for all markets, but carry 
restrictions that apply only in some markets. Third, the volume of fare 
basis codes on file for many Carriers is huge. It is not uncommon for 
an individual carrier to have thousands of fare basis codes and 
combinations of codes. The volume of fare basis codes in combination 
with their complexity and diversity make classification of fares a very 
challenging task. Fourth, fare basis codes do not have a universal 
meaning across all Carriers in the industry. Pricing structures are 
unique within each Carrier. A given set of fare basis codes reflects 
the pricing structure only within the context of the given Carrier.
    One approach to a classification plan would be for each carrier to 
submit its list of fare hierarchies to the Department. The list or 
lists would include the fare basis codes and the attendant rules for 
these fare basis codes as expressed in terms of the Department's three 
classification criteria or some other set of classification criteria 
suggested by members of the industry. With an understanding of the 
fares included in each category across multiple Carriers, the 
Department could publish a map of fares that would serve as the 
industry fare basis category for purposes of classifying the value of 
fares across all carriers.
    There appear to be two options for collecting this type of data, 
(1) retain the existing system of classification of ``restricted'' or 
``unrestricted'', or (2) use the fare basis codes as a means for 
establishing more accurate comparisons across carriers. Given the 
inconsistency of fare basis code application from

[[Page 8161]]

Carrier to Carrier, some method of mapping by the Department would be 
required. Whenever possible, the Department prefers data elements that 
can be objectively collected and consistently validated industry-wide.
    The Department seeks further comment on the utility and efficacy of 
collecting Fare Basis Category based on an aggregated fare basis 
classifications as well as any other data element that could prove 
useful to users of the O&D Survey in understanding the nature and 
purpose of passenger air travel in the U.S. Comments should address (1) 
the usefulness and efficacy of the continuation of collecting the 
current ``restricted'' or ``unrestricted'' fare designation only, and 
(2) the usefulness and efficacy of establishing a new system based on 
some form of mapping fare basis codes according to similar values 
assigned to different codes by various Carriers by periodically 
collecting and publishing comprehensive fare hierarchies from each 
Participating Carrier. We request that comments be as specific as 
possible in outlining any proposed methodologies and that they address 
issues involved in making industry-wide comparisons accurate and 
meaningful.
    3. Commission Amount. This data element represents the amount paid 
by the Issuing Carrier to the travel agent for selling a Ticketed 
Itinerary on its behalf. The Department recognizes that, in general, 
the role of sales commissions paid to the travel agents on the issuance 
of a Ticketed Itinerary have diminished in the U.S. However, commission 
payments have not disappeared from the air travel industry. In light of 
this, the Department seeks comment regarding the efficacy of collecting 
this information.
    4. Form of Payment Type. As shifts occur between payment by cash, 
credit card, or one of the new forms of Internet payment, collection of 
this data may provide insight into ticket purchasing behavior. The 
Department seeks comment on the efficacy of collecting this 
information.
    5. Electronic Ticket Indicator. This element, used in conjunction 
with ticketing entity outlet type, could help isolate information about 
selling and distribution channels. The Department seeks comment on the 
collection of an indicator to determine information about electronic 
ticketing. The proposed values would be the ones used in ATPCO's TCN 
Ticket Exchange Service Specifications Guide instructions for 
populating data element ``Electronic Ticket Indicator'' (glossary 
reference ETKI).
    6. Passenger Citizenship Nation. BLS requested citizenship 
information to determine whether a trip constitutes an export 
transaction or an import transaction. DOC's International Trade 
Administration (ITA) requested citizenship information to help in its 
mandate to facilitate trade and tourism. DOS, which negotiates air 
treaties with foreign governments, would benefit from citizenship data. 
The Department seeks comment regarding the efficacy of collecting 
statistical information about passenger citizenship.
    7. Country Code and Area Code of the Passenger's Phone Number. US 
Airways, United Air Lines, Southwest Airlines, the Sabre Group, 
Northwest Airlines, Continental Airlines, and American Airlines all 
included in their ANPRM comments their desire that the Department 
obtain information about the passenger's point of origin. BLS needs 
citizenship information to determine whether a trip constitutes an 
export transaction or an import transaction. The passenger's phone 
number area code, in conjunction with passenger's phone number country 
code, is one indication of passenger point of origin. In light of the 
increasing use of cell phones and the increasing disassociation between 
the area in which a passenger resides and the geographical area of the 
cell phone's area code, the Department seeks comment regarding the 
efficacy and the cost/benefit proposition of collecting this 
information as an indication of passenger residence in general, and in 
light of announced DHS requirements.
    8. Passenger Zip Code/Postal Code. Sabre, US Airways, American, 
Continental, Northwest, and Southwest commented in the ANPRM that they 
would like to have some measure of the passenger's place of origin. 
Carriers, such as US Airways and Northwest, identified this need as 
generic point of sale information. Academics, consultants and Carriers 
alike want to study point of origin demographics.
    United, Airports Council International--North America, and airports 
that supplied ANPRM comments specifically requested passenger zip code 
as a point of sale identification to identify the geography of the area 
served by the airport. Several comments from airports declared that 
this element would be a vital component of their ability to serve their 
communities. The Department believes that this element is the best 
indicator of passenger point of origin, and, perhaps, the single most 
important data element needed for prudent infrastructure planning and 
investment. The Department's mandate to ensure that the transportation 
system is healthy, efficient, and competitive cannot be fully realized 
until we know where the users of the system reside. The Department's 
ability to study the region in which an airport's customers reside, or 
catchment area analysis, is not currently possible.
    The passenger is not currently required to declare a Zip Code/
Postal Code as a precondition of purchasing a Ticketed Itinerary from a 
Carrier, and, therefore, this data element is not available. DHS may 
seek specific individual identification data on airline passengers that 
would require the Carriers to collect and store passenger residential 
Zip Code, among other elements, for a system designed to use passenger 
information to increase homeland security. If it could be collected 
without impinging on individual privacy rights, Zip Code/Postal Code 
would make important point of origin information available for 
statistical purposes for the first time.
    If the Carriers develop the capability to collect and store Zip 
Code/Postal Code, then the cost of collecting it for statistical 
purposes will not be significant. In light of the many benefits to the 
industry, the Department would consider collecting this data element. 
However, since it is not a data element that is routinely collected by 
the Carriers we are not proposing to collect this data element at this 
time. We seek comment regarding the continued interest in collecting 
this information for statistical purposes.

3. Reporting Requirements

a. Data Source Criteria
    One of the most critical questions asked in the ANPRM was whether 
the Department should change its source of data for the O&D Survey. 
Heretofore, the Department has required the Operating Air Carrier to 
use a data stream created specifically for reporting the O&D Survey. 
The Department has three objectives for the data provided by Carriers. 
First, the data available to the Department must meet the OMB quality 
objectives of accuracy, reliability, completeness and non-bias to the 
extent that it is practical. Second, the source of data must be 
selected in a way that minimizes the burden of collection on the 
Participating Carriers. Third, the Department must minimize the effects 
of changes to itineraries over time, because changes that take place 
following the reporting event are invisible to the O&D Survey. All 
sources of data, including alternative data sources proposed in 
responses to the

[[Page 8162]]

ANPRM, must be evaluated on these three criteria.
b. Discussion of Interactions Between the Carriers and Their Customers
    The source of data is inextricably linked to the event that 
triggers the creation of that data. Each source of data suggested in 
the ANPRM comments represents data captured at a point in time where an 
interaction between the passenger and the Carrier, or one of its 
agents, takes place. Adopting a new source of data necessarily means 
that we accept the state of the data as it existed when that data 
source was created or introduce a procedure to report subsequent 
changes to the itinerary.
    For an electronic ticket sold over the Internet at the Carrier's 
website, the creation of a reservation, the creation of the ticket, the 
financial payment transaction, and the recording of the itinerary by 
the revenue accounting system of the Issuing Carrier all occur 
simultaneously when the customer agrees to purchase the itinerary. 
However, for itineraries sold through other outlets or provided gratis 
by the Carrier, some of the events occur simultaneously and some occur 
serially. In a handwritten ticket, all of these events are separate and 
distinct. It is important to be aware of these distinctions because the 
Department must establish its procedures and data sources to be equally 
valid when collecting information about all passengers from all 
Carriers with the least amount of procedural or statistical bias.
c. Problems in the Current Source of Data
    The Department created the current source of O&D data for the 
express purpose of collecting the O&D Survey. The problems that result 
in designating an Operating Air Carrier as the Participating Carrier 
have already been discussed. Since the Operating Air Carrier does not 
always know enough about the Ticketed Itinerary to report it correctly, 
unless it is also the Issuing Carrier or the Issuing Carrier provides 
the necessary information, the Department has been forced to code a 
large number of reporting exemptions in the current O&D Survey 
methodology that we now seek to eliminate.
    The current CFR grants reporting exemptions for itineraries that 
are flown entirely on some Carriers. Every Participating Carrier 
transporting the passenger must examine the itinerary to determine 
whether it is the first Carrier in the itinerary that is listed by the 
Department as a Participating Carrier. The Air Carrier is exempted from 
reporting a Ticketed Itinerary if another designated Participating 
Carrier precedes it in the scheduled itinerary. A Ticketed Itinerary 
is, in effect, exempted from reporting when the code-share ticketing 
situation makes it appear as if the itinerary has already been reported 
when, in fact, the itinerary has not been reported. The current system 
also grants exemptions for reporting all of the travel on reportable 
Ticketed Itineraries if the Participating Carrier is unable to obtain 
information about the entire itinerary from the Issuing Carrier and is 
unable to obtain the information from looking at the passenger's 
documents. Roberts Roach and Associates, Inc. (Docket OST-1998-4043-4) 
summed up the frustration of most users of Department data when, in its 
comments to the ANPRM, it advocated that the Department allow no 
exceptions whatsoever.
    Exemptions are not the only problems associated with the O&D 
Survey's source data. Under the current rule, the Department requires 
the full amount collected for the Ticketed Itinerary to be reported 
even when the full itinerary was not, which causes the reported 
portions of the itinerary to be overvalued. For example, conjuncted 
tickets consist of more than four Flight-Stages and require multiple 
ticket documents. If the first reporting Carrier is not the Issuing 
Carrier, and can view a partial list of airports but a full fare 
amount, the identified portion of the Ticketed Itinerary will be 
overvalued.
    Equally troublesome, the Department requires the full itinerary 
reported, even if the full amount collected for the Ticketed Itinerary 
is not known. For example, when the Ticketed Itinerary is issued as a 
bulk ticket, the amount collected is either not shown or appears as 
zero amount collected. Usually, a bulk ticket is reported by the 
Issuing Carrier, in which case the fare amount would be known. However, 
in some circumstances, a passenger who possesses a bulk ticket may be 
diverted or transferred to another carrier. Under the current rule, 
should this situation occur, the Participating Carrier will not know 
the amount of fare collected and will report the amount collected as 
zero dollars.
    The Department recognizes that designating an Operating Air Carrier 
as the Participating Carrier necessitates that the Department grant 
reporting exemptions for conditions that exist when the Operating Air 
Carrier does not and cannot know some of the data elements. Therefore, 
the Department believes that the currently designated reporting entity, 
the Operating Air Carrier, does not have sufficient information to 
reliably produce a source of data for the Department's O&D Survey.
d. Discussion of the Sources of Data Proposed by ANPRM Respondents
    In the ANPRM, the Department solicited input on alternative data 
sources for the O&D Survey. The following data sources were proposed: 
(1) The computer reservation systems', or GDS', marketing information 
data tapes (MIDT) data triggered by the creation of a reservation, (2) 
Airlines Reporting Corporation's (ARC) sales tapes triggered by the 
sale of a ticket by a travel agency, (3) ATPCO's TCN records triggered 
by the creation of a ticket, (4) a new data stream from Carriers that 
issue electronic tickets triggered by the recording of the ticket in 
the Carrier's accounting system, and (5) a new data stream of passenger 
boardings triggered by the Operating Carrier's records from each flight 
segment.
    1. MIDT. Metropolitan Washington Airports Authority and the 
Airports Council International--North America (Docket OST-1998-4043-68) 
suggested using the GDS systems' MIDT data as a source of data. The GDS 
MIDT records include customers' travel schedule information and 
obtaining it from these systems would impose a relatively small burden 
on industry. However, MIDT data represent only those bookings made 
through the reservations systems. Tickets purchased directly from the 
Carriers and through other outlets not connected to the MIDT would be 
excluded. This, in effect, would create an exemption for the reporting 
of tickets that were not created through the GDS distribution channel, 
and would deflate travel statistics. There is no reliable method of 
measuring the number of Ticketed Itineraries created through non-GDS 
distribution channels in order to gain a sense of the total number of 
Ticketed Itineraries issued. The reliability of the O&D Survey would 
suffer because the proportion of under-reported travel to actual travel 
would be unmeasurable. Even if the Department made an estimation of 
that proportion, the proportion of MIDT reservations as a percentage of 
the universe of tickets would fluctuate over time, which would 
invalidate the estimates.
    As airlines encourage more bookings made directly with the Carrier, 
the number of tickets captured by MIDT is declining. Moreover, some 
Carriers' bookings are not represented in the MIDT data due to almost 
total reliance on direct sales. These situations would cause this 
source of data to under-report travel in an unmeasurable degree.

[[Page 8163]]

Conversely, American Airlines (Docket OST-1998-4043-5) stated that many 
reservations are never ticketed. The IG estimated the number of 
unticketed reservations at 15 percent of CRS-based travel 
reservations.\7\ These unused reservations that inflate the passenger 
travel statistics would cause the O&D Survey to over-report travel. The 
proportion of this over-reported travel to actual travel would be as 
unmeasurable as the under-reported travel. It has been argued that the 
over-reporting of travel might balance out the under-reporting of 
travel, but the extent to which that would happen is unmeasurable, 
leaving the ratio of reservations to tickets sold in a constant state 
of statistical instability. In addition, the level of over-or under-
reporting may disproportionately affect different types of markets 
(e.g., predominantly leisure versus predominantly business markets) 
further reducing the validity of the survey for the analytical purpose 
it was intended to serve. In addition, MIDT data do not include 
information about fare or about taxes charged. Therefore, MIDT data 
cannot meet the content, validity, and reliability needs of the O&D 
Survey.
---------------------------------------------------------------------------

    \7\ ``Passenger Origin-Destination Data Submitted by Carriers. 
AV-1998-086 issued Feb. 24, 1998 pp. 33.
---------------------------------------------------------------------------

    2. ARC Travel Agent Sales Data. Some respondents to the ANPRM 
suggested that the ARC sales tapes be used as a source of data. ARC is 
a clearinghouse that receives ticket sales data from travel agency 
sales reports, processes those sales on behalf of Carriers, and re-
combines all the agency ticket data into a comprehensive set of ticket 
data for each Carrier. The ARC ticket data is limited to tickets sold 
in North America. The proponents of this method suggested that ARC 
sales could be supplemented with travel agent data from other countries 
and regions, known as BSPs, but tickets issued through any other 
outlets would, in effect, be excluded from reporting. As with the MIDT 
data, even if the proper proportion of agency issued tickets to all 
valid tickets could be calculated, this plan would presume that the 
character of agency sold tickets would exactly mirror the character of 
tickets purchased through other outlets. For the extrapolation to be 
valid, tickets purchased directly from the Carriers or through direct 
links via third parties such as Orbitz' Supplier Link tickets and those 
purchased from other overseas outlets would have to statistically 
mirror agency-sold tickets for all markets for all Carriers.
    Even if a valid extrapolation could be made with extensive testing, 
the proportion of agency issued tickets as a percentage of all issued 
tickets has continuously fluctuated and has been steadily declining as 
Carriers cut costs by providing incentives to passengers to book 
directly with the Carrier. Calculating the constantly fluctuating 
sample size, (i.e. the proportion of tickets issued through travel 
agencies as a percentage of all tickets issued each month) when the 
count of all tickets is unknown, would be impossible.
    It should be noted that, in 2004, ARC and several Carriers began 
testing a product called the ``AIA First & Final Interline Billing 
Service'' based on ARC's Compass data warehouse. This product might 
assist some Carriers who elect to use it to provide some O&D Survey 
data to the Department. This is a fundamentally different proposition 
than using ARC travel agent sales as the sole source of data for the 
O&D Survey.
    3. Transmission Control Number (TCN) records. Most of the Air 
Carriers that responded to the ANPRM either endorsed or acknowledged 
the possibility of using GDS TCN records combined with TCN records 
generated by the Carriers. A TCN is a supplementary record created to 
carry information about a Ticketed Itinerary between interested 
parties. The information on a TCN record is a copy of the information 
used to create a Ticketed Itinerary, but the presence of a TCN record 
does not necessarily guarantee that a Ticketed Itinerary was issued. 
This distinction is important. An issued Ticketed Itinerary is a legal 
contract for carriage. Whereas each Ticketed Itinerary will generate 
exactly one sale record in the Issuing Carrier's accounting system, 
some Ticketed Itineraries will have generated multiple TCNs and some 
Ticketed Itineraries will have generated no TCN at all.
    The Carriers' passenger revenue accounting systems record the 
issuance of a Ticketed Itinerary when the company itself issues a 
Ticketed Itinerary or when it is notified by a travel agent that a 
Ticketed Itinerary was sold on their ticket stock. The sharing of TCN 
records in the industry is based on the concept that the TCN is 
supplementary information about a Ticketed Itinerary, and it is not, 
itself, a Ticketed Itinerary. The Carrier accounting systems are built 
to anticipate that there will be missing TCN records and duplicate TCN 
records in the TCN exchanges between Carriers. Accounting systems are 
designed to handle these contingencies with a variety of supporting 
subsystems. Using TCNs as a surrogate for actual Ticketed Itineraries 
in these situations would over-report travel when duplicate TCNs are 
present. Ticketed Itineraries that are issued for which there is no 
corresponding TCN compound the problem. As with the unreported 
reservations in the MIDT data, Ticketed Itineraries created under 
circumstances in which a TCN is not generated result in under-reporting 
of travel. Like the MIDT, the proportion of over-reported travel and 
the proportion of under-reported travel are both unmeasurable and, 
again like the MIDT, we cannot assume that the over- and under-reported 
tickets are equivalent.
    Proponents of this method advocate that the Department require 
Carriers to manufacture TCNs for tickets for which a TCN does not 
already exist. Mandating participation of all Carriers in what is now a 
voluntary TCN exchange could constitute a significant cost for 
Carriers, particularly those Carriers with a business model that does 
not benefit them to participate in the TCN system in their usual course 
of business. A less burdensome alternative for Carriers that do not now 
participate in the TCN exchange system would be for these Carriers to 
format an alternate simpler record structure rather than require the 
Carrier to format the TCN record. The simpler record would be designed 
specifically for submitting data to the O&D Survey and would be less 
burdensome to create than the more complex TCN record, which supports 
the needs of the Carriers' passenger revenue accounting.
    TCNs contain sensitive personal identification and financial 
information that, while an important component of the Carriers' 
accounting needs, is unwanted by the Department. The Carriers would 
have to purge the personal information from records prior to 
transmission to the Department. Purging this data makes the TCN unfit 
for the use it was designed to serve. Several respondents to the ANPRM 
endorsed the concept of employing a third party to perform this task on 
behalf of the Carriers. However, Continental Airlines (Docket OST-1998-
4043-44), supported by Wayne County Detroit Metropolitan Airport 
(Docket OST-1998-4043-23), pointed out that the ultimate burden to 
accurately report a ticket is on the Carrier. Proposing that a third 
party cleanse TCNs does not absolve the Carrier of its ultimate 
responsibility to properly report to the Department. The third party 
processor would have to be the agent of the Carriers not an agent of 
the Department because the Department holds the Carriers responsible 
for the integrity of the data. Thus, introducing

[[Page 8164]]

a third party to purge personal data would complicate the Carriers' 
administrative burden because of the added responsibility to select and 
to monitor a third party processor.
    The GDSs create the TCNs for Ticketed Itineraries distributed by 
travel agents, but the Department holds the Carriers responsible for 
accurate O&D Survey reporting. In order to improve the accuracy of its 
O&D Survey data, the Department may have to require Carriers to accept 
TCNs from the GDSs and match them to their internal list of tickets to 
verify that a TCN and a Ticketed Itinerary had been created before 
reporting the itineraries to the Department. Introducing the additional 
verification step would be an added burden. Carriers that rely on 
travel agencies to distribute their Ticketed Itineraries would likely 
find that it would be less burdensome to create original records for 
its Ticketed Itineraries, and submit them directly to the Department, 
rather than sort through the GDS generated TCNs from travel agencies to 
determine whether any TCN records were missing and whether any TCN 
records did not have a corresponding Ticketed Itinerary. Thus, should 
the Department use TCN exchange records, Carriers even that now 
participate in the TCN exchange system might find it less burdensome to 
simply generate O&D reporting records from their accounting system.
    A TCN record contains data that are a copy of itinerary data that 
was valid as of the date the record was created. Passengers often 
change plans after the ticket purchase, necessitating the passenger 
initiate changes to the Ticketed Itinerary. Some changes are considered 
minor and Carriers, typically, do not perform the exchange transaction 
for minor changes. Conversely, some subsequent changes to the 
passenger's itinerary prompt the generation of a new Ticketed Itinerary 
in exchange for the existing one. Each Carrier makes that determination 
based on its own needs and performs the exchange transaction according 
to its own business practices. If the Department uses TCN records as 
its reporting mechanism, the Department's data needs would necessitate 
that the Carriers notify the Department of the intended change in 
travel plans. The need for standardized reporting would, in turn, 
necessitate standardization of Ticketed Itinerary exchange policies in 
the industry. Carriers that exchange Ticketed Itineraries would 
necessarily have to follow the same set of decision criteria in order 
to standardize the collection of passenger statistics. Carriers with 
business practices that do not now require the exchange of Ticketed 
Itineraries when passengers make significant itinerary changes would 
have to create a process to simulate such a Ticketed Itinerary 
exchange.
    The TCN system that the Carriers use to share data among themselves 
efficiently serves its intended purpose. Imposing a requirement to mold 
the Carriers' TCN data exchange system to the Department's purpose 
would impose a significant cost and administrative burden to the 
Carriers, and the increased volume could possibly degrade some of the 
efficiency of the existing TCN system. As modified, the Carriers' TCN 
exchange system would be less useful for its original intent yet be 
less robust than the Department requires. The expense of forcing a 
functioning system to adapt to a new use would be unwarranted when 
other sources of data are available.
    United (Docket OST-1998-4043-15) acknowledged the problem of over 
counting passengers due to changed routings, and refunded tickets and 
stated that the data inaccuracies could easily be addressed. ``Air 
carriers' internal use of TCN reports has shown that relatively simple 
adjustment factors can be employed to obtain an accurate measure of 
actual traffic lift.'' The Department acknowledges that individual 
Carriers could and do use the information from the TCN exchange system 
as a substitute for actual Ticketed Itinerary sales for decision 
support functions. When a Carrier can use its other internal data for 
validation and its unique experience with TCNs arriving from various 
sources, it could find information from TCNs quite useful. However, the 
knowledge and experience of each Carrier within its route structure and 
within its operating experience is a fundamental requirement of making 
TCN data a useful source of information. Furthermore, the Carriers have 
the ability to use information from their accounting systems to edit, 
supplement, or purge the TCN records they use as the input to their 
decision support systems. The Department cannot duplicate that ability 
nor can we duplicate each Carrier's experience and knowledge of the 
mathematical relationship between the numbers of TCN records to the 
numbers of actual passengers. If the Department does not require TCN 
records to be verified by a sale record by the carrier prior to being 
submitted to the O&D Survey, then using TCN records that are unverified 
by an actual sale would require that the Carriers maintain a complex 
set of adjustment factors. Each Carrier's experience with TCN 
adjustments would have to be submitted so that it can be included in 
the Departmental adjustment factor. Since the flow and composition of 
TCN's changes from month to month and season to season, each 
Participating Carrier would have to calculate and provide to the 
Department an accurate adjustment on a monthly basis.
    We believe that using unverified TCN's with adjustment factors 
would be a significant burden on the Participating Carriers without 
providing the accuracy the Department requires. We believe that using 
TCN's verified by actual sales would cause a significant burden on the 
Carrier's existing TCN exchange system, and would also necessitate 
standardization of exchange ticketing practices that would enable the 
Department to set up a system to remove exchanged tickets and refunded 
tickets from the database. Neither of these two options is as 
compelling as the simple requirement to report tickets verified by a 
sale and first use of the ticket for travel, and therefore, we are not 
advocating the use of TCN records as the basis of reporting the O&D 
Survey.
    Nevertheless, the Department recognizes the key role of the 
Carrier's TCN project in standardizing data elements regarded as 
important to the Ticketed Itinerary and the industry wide agreement on 
the definitions of those elements. The Department seeks comment to 
incorporate this standardized consensus to the extent possible in its 
proposal to revise the O&D Survey in accordance with established 
industry practice.
    4. Electronic Tickets. Continental Airlines (Docket OST-1998-4043-
44) proposed that a survey consisting exclusively of electronic tickets 
would be sufficient data for the O&D Survey. Electronic tickets are 
widespread in the aviation industry and would include the majority of 
Ticketed Itineraries sold in the U.S. and used on U.S. Air Carriers. 
However, not all Ticketed Itineraries are electronic. Non-electronic 
Ticketed Itineraries would, in effect, be exempt from reporting. In 
addition, electronic tickets only contain information about Ticketed 
Itineraries issued through a particular set of circumstances. Even if 
the proper proportion of electronic tickets to all valid Ticketed 
Itineraries could be calculated, this plan would presume that the 
character of electronic tickets would exactly mirror the character of 
Ticketed Itineraries purchased through other means. Interline 
itineraries and Ticketed Itineraries issued in foreign countries would 
be disproportionately represented in the non-electronic Ticketed 
Itineraries. Since these

[[Page 8165]]

populations are likely to have travel patterns that differ from the 
travel patterns of electronic ticket holders, it is very unlikely that 
the character of non-electronic Ticketed Itineraries would be mirrored 
in electronic tickets. The level of over-reporting or under-reporting 
could disproportionately affect different types of markets (e.g., 
predominantly leisure versus predominantly business markets), further 
reducing the validity of the survey for the analytical purposes it was 
intended to serve. Even if we could validate the extrapolation of known 
electronic ticket data to unknown non-electronic Ticketed Itinerary 
data, the proportion of electronic tickets as a percentage of all 
issued Ticketed Itineraries would continuously fluctuate. Calculating 
the constantly fluctuating proportion when the count of all Ticketed 
Itineraries is unknown would be impossible.
    5. Actual Passenger Transportation. Many of the airports that 
responded to the ANPRM advocated that the Carrier that operates the 
passenger's flight perform the O&D Survey reporting as each flight 
takes place. However, the Carrier that transports the passenger does 
not always have the itinerary information that would make it possible 
to determine the True O&D of the One-way Trip from any given passenger 
flight segment. Even if it did, operational problems, weather problems, 
and an uncountable variety of human errors or situations involving 
airport security or even city traffic beyond the passenger's control 
can affect the way a passenger completes scheduled travel. The 
supporters of this technique did not suggest a method to reassemble the 
various segments of a single passenger's journey, reported at various 
times by multiple Carriers, into a coherent One-way Trip. Diverted 
flights, delayed flights, and lost flight envelopes would make it 
impossible to decipher the intended One-way Trip without a lift/sale 
match system. Carriers that have built lift/sale match database systems 
have found it to be a long and expensive undertaking. United Air Lines 
(Docket OST-1998-4043-15) commented that it firmly believed that 
reconciling to actual lift was both difficult and unnecessary.
    The Department believes that construction of a lift/sale match 
system on an industry-wide basis would be a significant burden for both 
the Department and the Carriers, which would not be offset by the 
benefits. Moreover, for purposes of analyzing traffic flows and 
understanding market size and characteristics (the primary uses of the 
O&D Survey), the Department believes that it is more valuable to know 
the itinerary the customer purchased than to know all of the exigencies 
of air travel that have interfered with the passenger's stated travel 
intention. American Airlines (Docket OST-1998-4043-5) and US Airways 
(Docket OST-1998-4043-7) commented that there would likely be an 
undesirable time lag incurred in obtaining, reassembling, and 
processing acceptable accurate Flight-Coupon Stage information. The 
Department believes that the potential problems of gathering the data 
from multiple sources, the expense of building the database for re-
assembling the itinerary data from the multiple sources, and the 
potential undesirable time lag associated with such a system render the 
use of this data source for the O&D Survey impractical.
e. Review of Existing Data Sources
    By far the least intrusive way of obtaining aviation data from the 
industry is through the use of existing sources of industry data. Each 
of the existing sources of data the respondents suggested as a source 
of data for the O&D Survey provides information at minimal cost to the 
Carriers. However, none is a comprehensive source of information and 
therefore fails the test of accuracy, reliability, and completeness. In 
investigating each proposed data source, the Department has considered 
the possibility of supplementing each data stream. However, the effort 
required of the Carriers to supplement the data to enhance the quality 
adds complexity and cost. In every case, the data still fall short of 
OMB guidelines for ensuring quality of information disseminated by 
Federal agencies.
    Furthermore, Carrier participation in these sources of data is not 
universal. The Department's use of any of those data sources would, 
effectively, mandate Carrier participation in processes in which they 
have chosen not to participate to date, or have participated at a very 
low level. Moreover, a Carrier's level of participation in the selected 
data source might result in varying levels of representation of its 
passengers in the data reported to the O&D Survey. This would 
disproportionately disadvantage a particular Carrier, or group of 
Carriers. The Department seeks comment as to whether the O&D Survey can 
be satisfactorily revised by reusing another collection of industry 
data compiled for a purpose other than the O&D Survey (e.g. TCN, MIDT, 
ARC, etc.). Comments should specify the extent to which the existing 
industry source of data will (1) maximize accuracy, reliability, 
completeness, and non-bias, (2) minimize the burden of collection on 
the Participating Carriers, and (3) minimize the effects of changes to 
itineraries over time, as well as the specific modifications required 
of that data source. Comments should also specify the costs and 
benefits of using an existing source of industry data, including the 
costs and benefits of modifications to the existing data source to meet 
the three criteria described above.
f. Designating the Issuing Carrier as the Participating Carrier
    The Port of Portland (Docket OST-1998-4043-19) recommended that the 
selling Carrier be incorporated into the O&D Survey. The Department 
prefers the term ``Issuing Carrier'' to ``selling Carrier'', since some 
Revenue Passengers travel on Ticketed Itineraries for which no funds 
change hands. Nevertheless, we believe this suggestion has merit. This 
suggestion would require creating a dedicated source of data such as 
the current one the Department requires from the Operating Air Carrier. 
It has several advantages, notably the simplicity of gathering 
information from the Issuing Carrier. A data source created by the 
Issuing Carrier easily meets two of the three criteria for selection of 
an appropriate data source for the O&D Survey (See Section I.3--O&D 
Survey Redesign: Reporting Requirements). The data quality concerns, 
criterion number one, are minimized because the Issuing Carrier has the 
most accurate and reliable knowledge of the passenger itinerary. The 
burden on the Carriers, criterion number two, is less than the burden 
heretofore placed on the Operating Air Carrier because it removes the 
burden of requiring the Operating Air Carrier to obtain information 
from the Issuing Carrier before reporting the itinerary. The changes 
that take place in an itinerary over time, criterion number three, 
remain a concern, depending on when the data is copied for submission 
to the O&D Survey. In all sources of data, a change that takes place 
after triggering the reporting event is invisible to the O&D Survey.
g. Issuing Carrier's Ticketed Itineraries at the Time of Sale
    We considered an O&D Survey design that requires the Issuing 
Carrier to report the Ticketed Itinerary triggered at the time when the 
Ticketed Itinerary is entered into its passenger revenue accounting 
system. Depending on the Carrier, from zero to five percent of Ticketed 
Itineraries issued are refunded, and between five percent and 20 
percent

[[Page 8166]]

of Ticketed Itineraries are changed after the itinerary is issued. The 
Department considered ignoring refunds and changes subsequent to the 
issue date, but determined that doing so would introduce unacceptable 
unreliability. The number of refunded tickets is small, but five 
percent of issued tickets are not inconsequential. The itinerary 
changes pose a more significant problem.
    Carrier systems handle passenger-initiated changes to a Ticketed 
Itinerary in two ways. In some cases the change will be noted in the 
existing itinerary record, and in some cases the change will cause a 
new Ticketed Itinerary to be issued in lieu of the previous one.
    When the existing itinerary is changed after it has been reported, 
then the changes will not be reported to the O&D Survey. Once the O&D 
reporting criteria are encountered, the Participating Carrier copies 
the information to a submission record and subsequent changes are 
invisible to the O&D Survey. In some cases, however, a new Ticketed 
Itinerary is issued in exchange for the previous one, and the 
Department would have to formulate a policy to address these cases. 
Unless the original Ticketed Itinerary is removed when the newly issued 
itinerary is added, the passenger is counted twice when the reissued 
Ticketed Itinerary is reported to the O&D Survey. There is inconsistent 
handling of data between Carriers that issue new tickets in exchange 
for the previous tickets and Carriers that alter tickets in place. If 
the reissued ticket is ignored, then it becomes, in effect, an exempted 
ticket.
    The Department considered requiring that Carriers provide the 
Department with the identifiers of refunded Ticketed Itineraries and 
identifiers of Ticketed Itineraries that were replaced in an itinerary 
reissue transaction so that these could be removed from the data and 
the new Ticketed Itinerary entered instead. The undertaking would be 
the equivalent of a nation-wide ticket database matching system, and 
would involve the Department in the accounting details of the revenue 
accounting peculiarities of each of the Participating Carriers. The 
diversity of the Carrier business models is reflected in the diversity 
of their passenger revenue accounting procedures, which would 
necessitate that correspondingly complex procedures be in place at the 
Department to handle the various situations that arise from each 
airline passenger revenue accounting system.
    The Department believes processing itinerary changes after the 
reporting event would greatly compound the complexity and substantially 
increase the expense of the O&D Survey reporting system to both 
industry and government. Recording all of these changes would appear to 
increase the accuracy of the statistics, but would require considerably 
more effort and expense from the Carriers and impose dramatically more 
effort, complexity, and expense on the Department. The Department must 
consider the possibility that the increase in complexity may increase 
the incidence of errors that would, in reality, decrease accuracy. 
Finding and removing previously issued Ticketed Itinerary from the data 
would be similar in complexity to matching lifted flight coupons to 
Ticketed Itinerary records. The ANPRM comments by American Airlines 
(Docket OST-1993-4043-5) and US Airways (Docket OST-1998-4043-7) 
indicate that the attempt to match the sale and actual use would be 
time consuming as well as complex. Therefore, the Department believes 
that maintaining multiple reporting events for the same Ticketed 
Itinerary would interfere with the Department's goal of processing and 
disseminating data in a timely fashion. In light of the significant 
complexity, significant cost, the risk of introducing reporting errors, 
and the risk of introducing timing delays, the Department is not 
proposing to undertake a nation-wide ticket database matching system to 
track changed itineraries. However, we seek comment from industry and 
the public on the merits of these issues.
h. Issuing Carrier's Ticketed Itineraries at the Time of First Use
    An alternative to tracking multiple changes to a Ticketed Itinerary 
is to delay the reporting of the itinerary until the last acceptable 
point at which a reliable trigger for a reporting event can be 
designated. The last unambiguous event that can reasonably be used as a 
reliable trigger for reporting is the first use of the Ticketed 
Itinerary. The final use of an itinerary is not acceptable as a 
reporting event trigger because many months can separate the first use 
of a Ticketed Itinerary from the final use. If the Department collects 
data at first use, we can hold the information about subsequent flights 
until the appropriate month for the Flight-Stage of travel to be 
disseminated. If the Department collects data at final use, we would be 
confronted with knowledge of Flight-Stages that occurred from one to 11 
months earlier. It is not a reasonable alternative to hold the 
reporting of all data for 11 months in order to collect data from 
Ticketed Itineraries with widely spaced travel, it is not reasonable to 
be constantly updating data that has already been released and it is 
not reasonable to ignore all data from the outbound portions of 
Ticketed Itineraries that describe travel that is spaced more than one 
month apart. Therefore the first use of a Ticketed Itinerary is the 
last reasonable and unambiguous event that can be used as a reporting 
event.
    The first use of the Ticketed Itinerary for travel is the 
triggering event for reporting in the current O&D Survey. Refunds and 
reissued tickets that occur subsequent to the reporting event are 
currently ignored. Fortunately, the numbers of refunds and exchanges 
that take place after a passenger has already begun the journey are 
extremely low. Whereas we have accumulated ample evidence that naming 
the Operating Carrier as the Participating Carrier is the root of many 
of the reporting problems found in the O&D Survey, we have no 
accumulation of evidence that indicates that the first use of the 
Ticketed Itinerary for transportation is unsuitable as the trigger for 
the reporting event. The Carriers have confirmed that the preponderance 
of refunds and exchanges take place prior to the first flight, and the 
Department deems the small number of missed itinerary changes due to 
subsequent refunds and travel changes to be marginal. The Air Carriers 
have indicated that the most common change request that occurs after 
the commencement of travel is for a different return flight that is 
within a few hours of the original. Therefore, the Department has 
concluded that the designation of first use of the ticket for travel 
should continue to serve as the trigger for the reporting event.
i. Proposed Source of Data for the O&D Survey
    The Department agrees with the Port of Portland (Docket OST-1998-
4043-19) that the selling/issuing Carrier should be incorporated into 
the O&D Survey. Standard industry accounting practices require that the 
Issuing Carrier hold the passenger's funds in an unearned revenue 
account until the passenger flies, or exchanges or seeks a refund, of 
one or more of the Flight-Coupon Stages. The Operating Carrier notifies 
the Issuing Carrier when the Operating Carrier transports the passenger 
on a Flight-Stage. When the Operating Carrier is the Issuing Carrier, 
the notification is an internal transaction; when the Operating Carrier 
and the Issuing Carrier are different companies, the notification is an 
external transaction. In either case, the Issuing Carrier is notified 
that an Operating Carrier has transported a passenger on a Flight-
Coupon Stage. The Issuing Carrier will have knowledge

[[Page 8167]]

of the triggering event--the first use of the Ticketed Itinerary for 
travel--because worldwide industry accounting practices already dictate 
that the Operating Carrier notify the Issuing Carrier that passenger 
travel has taken place. Moreover, the Issuing Carrier is the only 
Carrier that has full knowledge of the Ticketed Itinerary, fare, and 
taxes. Therefore, the Department proposes that the O&D Survey (1) 
continue to require a dedicated reporting file format, (2) continue to 
use the Ticketed Itinerary as the source of data, (3) continue to use 
the first use of the ticket to travel as the trigger for the reportable 
event, but (4) designate the Issuing Carrier as the reporting entity.
    The change in designated reporting entity from Operating Carrier to 
Issuing Carrier, while keeping the same reporting event trigger, has 
significant advantages. For Carriers that operate only as Franchise 
Code-Share Partners on behalf of larger Mainline Partners and do not 
issue tickets on their own ticket stock, the task of reporting the 
Code-Share passengers will shift to the respective Mainline Partners. 
For Carriers that do not interline passengers with other Carriers, the 
Department anticipates that the change in reporting entity will require 
very little change in current procedure beyond gathering the additional 
data elements. This change is a significant improvement for carriers 
that maintain interline agreements because tickets from re-
accommodating passengers as a result of irregular operations represent 
a large portion of the most troublesome and time consuming itineraries 
to report. Under this proposal, responsibility for reporting the 
itineraries of those re-accommodated passengers will go to the Issuing 
Carrier.
    The most significant advantage of the change in reporting 
responsibility for interlining Carriers is that the identification of 
the Carrier with the responsibility to report data is no longer 
ambiguous. The current system requires each itinerary to be scanned to 
determine whether it is apparent that another Participating Carrier has 
already reported the Ticketed Itinerary. This is a complex task that 
requires examination of the itinerary for the presence of other 
Participating Carriers scheduled earlier in the itinerary. The task 
requires knowing whether the other Carriers present are Participating 
Carriers and whether there are any code-share relationships to be 
considered.
    The current O&D System discourages early reporting because Issuing 
Carriers must have sufficient time to send data to the Participating 
Carrier. This proposed O&D Survey encourages early reporting because 
the Participating Carrier is the Issuing Carrier. The most cost 
efficient method of reporting is to enable the sale/lift match 
procedure to copy the requisite data as soon as the Issuing Carrier 
realizes that the lifted Flight-Stage coupon is the first use of the 
Ticketed Itinerary for travel. This is a single, clearly identifiable 
reporting event.
    Usually, the knowledge that a Ticketed Itinerary has been issued 
precedes the first evidence of use of the Ticketed Itinerary in a 
Carrier's passenger revenue accounting system. However, the Department 
recognizes that information about the Ticketed Itinerary's issuance 
sometimes arrives after the evidence of first use. This happens most 
frequently in itineraries sold in foreign countries. Although the 
reporting event trigger remains the passenger's use of the ticket, the 
Department's intent is to obtain the best possible data. Therefore, we 
propose that the Participating Carrier match the first evidence of 
flown use with the information from the Ticketed Itinerary's issuance 
by whatever means the Issuing Carrier creates the match in its normal 
course of business. The itinerary must be reported when the Issuing 
Carrier's accounting system resolves the problem. Monitoring for first 
use includes interline billing notification that a Flight-Stage coupon 
was used for transportation on another Carrier, including those that 
were flown on other Carriers as a re-accommodation.
    The Department believes that ignoring itinerary changes after the 
commencement of travel is an acceptable trade off for the simplicity 
and lower cost of reporting. Continuing the practice of ignoring 
itinerary changes subsequent to the commencement of travel is 
consistent with the current O&D Survey. This will minimize 
disarticulation that will occur in the transition from the old O&D 
Survey data to the proposed O&D Survey data. The Department seeks 
comment from the industry and the public as to the advantages or 
disadvantages of changing the reporting source or changing the 
reporting event. We request that recommendations of alternative 
reporting sources or alternative reporting events discuss the explicit 
and implicit reporting exemptions inherent in the recommended source of 
data, and the efficacy of processing itinerary changes that may take 
place after the triggering of the recommended reporting event.

4. Significant Issues Related to the Data To Be Collected

a. Proposed End to Sampling
    There are several factors that support the redesign of the current 
sample selection procedures. There are concerns with bias related to 
the current sample. The current rule requires a Ticketed Itinerary to 
be selected when the Ticketed Itinerary number ends in zero. This 
methodology assumes that all Carriers use ticket numbers, and it 
assumes that ticket numbers are randomly distributed (i.e., that each 
passenger has an equal chance of obtaining a Ticketed Itinerary number 
ending in a specific digit). When the O&D Survey was established, these 
assumptions were, in all likelihood, valid. All Participating Carriers 
used carefully controlled and guarded ticket stock that was pre-printed 
with ticket numbers. There was little incentive to deviate from the 
simplicity of taking each ticket sequentially from the box for each new 
customer. Thus, drawing a sample of tickets ending in zero lent itself 
to obtaining a random 10 percent sample of the passengers.
    At least one Participating Carrier that uses ticket numbers on 
standard agent tickets is aware that ticket numbers ending in a zero 
constitute 11 percent of their total Ticketed Itineraries, but does not 
know the cause of the variance from the expected 10 percent. Ticket 
numbers are assigned to travel agencies and Carriers in blocks of 
assigned numbers. When a ticket distributor (a ticket agency or Carrier 
itself) uses preprinted ticket number stock, then the actual paper 
tickets are physically delivered to the entity that distributes the 
Ticketed Itineraries. In the air travel industry today, the use of 
preprinted paper ticket stock is very low. The ticket distributors are 
assigned a set of numbers that are applied to Automated Ticket and 
Boarding Pass (ATB) ticket stock and a set of numbers that are applied 
to electronic tickets. The basis of sampling every Ticketed Itinerary 
with a number ending in zero assumes that ticket numbers continue to be 
assigned sequentially to passengers, but there is no guarantee that 
this assignment process is followed by all ticketing systems.
    Members of a travel group, such as an inclusive tour group, might 
be assigned ticket numbers in some systematic way, such as grouping 
them according to the final digit of their ticket numbers. Such use 
would invalidate the Department's assumption that each passenger has an 
equal chance of being assigned a ticket number ending in zero. We are 
unaware of any practice of systematic group

[[Page 8168]]

assignment of ticket numbers to Ticketed Itineraries other than random 
assignment, but we are also unaware of a prohibition on such assignment 
of numbers.
    However, currently, three Participating Carriers have requested 
permission to use non-standard sampling under the current O&D Survey 
rules because these Carriers do not assign traditional ticket numbers 
to their Ticketed Itineraries. Because some Carriers do not use ticket 
numbers, and because there is no longer a compelling reason to believe 
that ticket numbers are assigned sequentially, or assigned randomly, 
the Department proposes to discontinue the use of ticket number as a 
determinant of a 10 percent sample of Ticketed Itineraries.
    Even if it were possible to draw an unbiased 10 percent sample, a 
10 percent sample is inadequate for fulfilling the Department's 
mandates, particularly with respect to programs designed to foster air 
service to small communities. The IG (AV-1998-086, page 26) stated ``in 
these `thin' markets, the number of passengers, and therefore sample 
tickets, is relatively small. As a result, errors from a 10% sample are 
likely to be significant so that the sampling results are unreliable.'' 
The Department has calculated that using a valid, random, 10 percent 
sample, the smallest market in which a 10 percent change in the market 
could be detected with 95 percent confidence is a market of 
approximately 29,000 passengers. The fourth quarter 2003 O&D Survey 
measured 94,347,000 Directional O&D passengers accommodated on 31,385 
routes in the 48 contiguous states in that quarter. Of the 31,385 
routes, 754 (2.4 percent) had 29,000 or more passengers in the quarter. 
This means that the Department can measure a 10 percent change in 
passengers with 95 percent confidence from quarter to quarter on only 
2.4 percent of the total number of routes in the 48 contiguous states.
    When researching a market with multiple airlines, the minimum 
number of passengers must exceed 29,000 on each airline in order for 
the research to attain this level of validity. There are considerably 
fewer than 754 routes wherein all the Carriers are transporting 29,000 
passengers. These 754 routes accounted for more than half the total 
passengers traveling between the 48 states in that quarter, but the 
Department's mandate to adapt the air transportation system to the 
present and future needs of commerce requires the study of many of the 
remaining 97.6 percent of routes. Of the remaining 97.6 percent of 
markets, those that suffer the most distortion are ones where the 
passenger count is low, such as small city markets. Increasing the 
sample size would enable more precise measurement of smaller markets. 
However, detecting a 10 percent change with 95 percent confidence in a 
study of a market with an estimated total of 10,000 passengers would 
require a 24.4 percent sample.
    The Essential Air Services program (EAS) and the Small Community 
Air Service Development Program are the two primary examples 
illustrating the Department's need for more comprehensive data. These 
programs are focused on smaller markets and require evaluation of 
service and fares. Under EAS, the Department determines the minimum 
level of service required at each eligible community, by specifying (1) 
a hub through which the community is linked to the national network and 
(2) a minimum service level in terms of flights and available seats. 
Where necessary, the Department pays a subsidy to a U.S. Air Carrier to 
ensure that the specified level of service is provided. The Federal 
government budget for EAS exceeds $100 million each year.
    All but a handful of the EAS markets are less than 20,000 
passengers annually, and the majority of EAS markets are less than 
10,000 passengers annually. While decisions about EAS markets could be 
made at confidence levels much lower than 95 percent, the Department 
has long acknowledged that the 10 percent sample is not sufficiently 
valid for use in monitoring the EAS program. The candidate Carriers 
provide fare and destination information to the Department as part of 
the application process. The O&D Survey is not generally used to 
validate or refute the Carriers' assertions because the sample size of 
10 percent is not sufficiently accurate. Aggregating data to an annual 
basis from a quarterly basis increases the validity of the O&D Survey 
data. However, even on an annual basis, for most EAS decisions, 
increasing the sample size to 24.4 percent is still insufficient to 
validate the Carriers' assertions with a high level of confidence.
    While EAS and the Small Community Air Service Development Program 
specifically focus on markets served by smaller carriers, the 
Department's statutory responsibility to adapt the air transportation 
system to the present and future needs of commerce is much more 
extensive than the needs of the EAS program. Because these markets are 
inadequately represented in the current O&D Survey, the Department's 
mandate requires a disproportionately high amount of time and resources 
in studying markets with lower than average traffic volume.
    The Department considered the possibility of reducing the cost of 
the O&D Survey by creating a sample that would collect less data 
overall and still fulfill the data needs of the users of the O&D 
Survey. Ideally, the Department could reduce the cost of collection by 
obtaining samples of varying sizes depending on the markets to be 
studied. To achieve that efficiency, a system of assigning various 
sample sizes to corresponding market sizes would need to be 
established. The Department could develop an algorithm where samples 
larger than 10 percent could be drawn for those markets where the 10 
percent sample is inadequate. The process of increasing the sampling 
rates disproportionately for relatively rarer subgroups, in order to 
have adequate sample sizes for estimation, is called oversampling.
    In order to oversample specific itineraries based on selected 
characteristics, the Carriers will have to know those characteristics 
for every individual itinerary. A collection of all the eligible units 
that have a known probability of sampling, along with the 
characteristics that will be used to draw the sample, is known as a 
sampling frame. Thus, a sampling frame of all itineraries with the 
relevant sampling variables (characteristics that would determine the 
oversample such as arrival and departure airports and date of travel) 
must be assembled. Once this was done, each Carrier would have to apply 
the different sampling rates for the different subgroups and draw the 
sample.
    Finding a reasonable way to oversample subgroups to obtain 
estimates for all affected markets would be difficult. The Carriers 
submit data in the form of Ticketed Itineraries to the O&D Survey. 
Airport pairs of varying sizes and combinations appear on a single 
Ticketed Itinerary. Collecting the portion of the Ticketed Itinerary 
that corresponds to the specific sample size for that market is a 
complicated task. In April 1986, Department regulations began allowing 
a stratified sample, but continued to collect data by collecting whole 
itineraries instead of portions of itineraries appropriate to the 
stratified sample. The rule stated that large markets were to be 
sampled at one percent when the Ticketed Itinerary consisted of travel 
only within that large market, and all itineraries that included travel 
to any other destination, or combination of destinations, were to be 
sampled at 10 percent. All Participating Carriers decided that the 
simplicity of using a single reporting selection

[[Page 8169]]

criterion outweighed any savings that might accrue from sending the 
smaller volume of data. This illustrates the Department's position that 
due to the technical complexities and additional burden for the Issuing 
Carriers associated with differential sampling rates, it is less 
burdensome for Participating Carriers to apply a single sampling rate. 
Given the need for details on all smaller markets, the only sampling 
rate that will lead to the fulfillment of both the Department's and 
industry's needs is a census or 100 percent sample.
    Furthermore, as market sizes change over time, the designated 
sample size for a market would have to be adjusted. Determining market 
size is not a simple operation. In effect, Ticketed Itineraries have 
multiple components. In Ticketed Itineraries that include outbound and 
return travel that are scheduled to be at least 30 days apart, the 
return portion of travel is reported at least 30 days in advance. 
Ticketed Itineraries would be sampled at the rate that was in effect 
when that Ticketed Itinerary was reported. When the designated sample 
size for one component of the itinerary is adjusted based on changes in 
that market, Ticketed Itineraries reported before the change would be 
sampled at the rate in effect before the change, but the Ticketed 
Itineraries that were reported after the change would be sampled at the 
rate that was in effect after the change. The sampling at differential 
rates would occur for up to 11 months, which is the number of months a 
Ticketed Itinerary can be sold in advance of travel.
    Users of the data in those changing markets would have to find a 
way to properly account for varying sample sizes for Ticketed 
Itineraries submitted before and after the market sample size was 
adjusted. Therefore, even if a way could be found for the Participating 
Carriers to report portions of Ticketed Itineraries appropriate to the 
stratified sample, the changes in market size over time could make the 
data very difficult to use. Even if the Carriers were able to implement 
such a sample design, the complexities associated with weighting make a 
sample less attractive for Carriers, the Department, and other 
stakeholders. The Participating Carriers would have to provide data 
about the entire sampling frame in order for the Department to create 
correct sampling weights. These sampling weights are necessary when a 
sample of itineraries is selected instead of all itineraries. Sampling 
weights would be necessary to ensure that the O&D Survey provides 
accurate estimates of the total number of itineraries nationally and 
for each market. In comparison, we believe that sending the entire 
census of itineraries will be simpler and much less burdensome than 
stratified sampling for Participating Carriers.
    The Department has considered conducting a census for small markets 
and a sample for the remaining larger markets. Any parallel system of 
differential sampling, whether it is in one single survey or multiple 
related surveys, will lead to a greater burden on Carriers due to the 
need for a sampling frame with all the necessary sampling variables. 
However, the cost to Participating Carriers would increase considerably 
because two systems would be required. Participating Carriers declined 
use of multiple sample rates in 1986, citing the relatively low expense 
of transmitting additional records compared to the relatively high 
expense of additional computer programming work. Since the relative 
cost of storage and transmission of data has continued to decline, 
especially compared to the increasing cost of programmers, we believe 
that the increased complexity of applying multiple sampling rates would 
be far more burdensome to Participating Carriers than keeping a single 
O&D reporting system.
    The sampling process must be changed in order to draw an unbiased 
sample. Yet, there is evidence that a 10 percent sample provides 
insufficient accuracy for the needs of the Department and other users 
of the O&D Survey data. Using multiple sampling rates adds undue burden 
upon Participating Carriers. Because the airline ticketing and 
accounting systems are all computerized, the Department feels that a 
census would be the most efficient and least burdensome solution for 
the Participating Carriers and the Department. We therefore propose to 
end the sampling process and begin the collection of 100 percent of 
Ticketed Itineraries.
    The Department is willing to reconsider sampling, subject to 
comments from the industry and the public regarding the suitability of 
continuing to use a sample. The Department's data collection guidelines 
state that data collection of 100 percent of the population of 
inferences is the most accurate approach, but that the cost of 
collection and other resource restrictions should be considered when 
making this decision. If the cost of collection and transmission of 100 
percent of Ticketed Itineraries is unacceptably high, then a sample 
design based on sampling theory, making use of a methodology other than 
ticket number for selection, will be needed to address the goals of 
efficiency and accuracy. The sample design should ensure that there are 
enough sample cases for reliable information about small markets. The 
Department seeks comment regarding the continuation of a sampling 
methodology, and requests that these comments make detailed proposals 
on methods of revising the sampling. Proposals should suggest a 
probability sample based on established sampling theory, including 
methods of estimating the variance and taking into account the nature 
of the missing data. The proposed methodology must give all members of 
the target group a known non-zero probability of being represented in 
the sample taking into consideration the tremendous variations in 
relevant Carrier business models and practices, geographic markets, and 
sales distribution outlets.
b. Effect of Proposed Changes on Small Entities
    The development of hub-and-spoke networks increased the demand for 
small- and medium-sized aircraft to feed the hubs, which, in turn, over 
time fostered the growth of the Carriers specializing in the operation 
of these aircraft. Regional Carriers have substantially changed their 
business model to one heavily based on the ``fee for departure'' 
service in which a larger Mainline Partner pays the regional Carrier 
for operating flights under a long term contract using the Mainline 
Partner branded livery. The Mainline Partner typically assumes all 
responsibility for pricing, selling, marketing and inventory management 
for its regional partner's flights. However, most importantly, the 
Mainline Partners have assumed the role of Issuing Carrier for the 
Ticketed Itineraries issued to passengers for travel on their regional 
partners. The passengers on these smaller Carriers represent a 
significant portion of the passengers worldwide although, historically, 
most have not been obligated to report passengers to the O&D Survey.
    It is common now for a regional Carrier, operating as a Franchise 
Code-Share Partner, to acquire jet aircraft having 60 or more seats on 
behalf of one of its Mainline Partners and thereby acquire O&D Survey 
reporting status for all its flights for all its Mainline Partners. 
More often than not, however, the Franchise Code-Share Partner is not 
in a position to report passengers because the ``fee for departure'' 
arrangements leave the necessary passenger data in the hands of its 
Mainline Partners. Currently, the larger Mainline Partner typically 
prepares the O&D Survey report on behalf of the

[[Page 8170]]

Franchise Code-Share Partner and sends it to the Franchise Code-Share 
Partner, which in turn forwards it to the Department. The Department's 
designation of the Operating Air Carrier as the Participating Carrier 
requires the Mainline Partner and the Franchise Code-Share Partner to 
take these additional steps to get the appropriate data transmitted by 
the Participating Carrier, adding cost and complexity while providing 
no added value.
    When a regional Carrier negotiates code-share arrangements with two 
or more Mainline Partners, the Franchise Code-Share Partner may qualify 
for reporting because of the acquisition of an aircraft operated on 
behalf of one of its Mainline Partners. Once qualified as a 
Participating Carrier, however, it must begin reporting all passengers 
for all Mainline Partners. This causes added complexity to be placed on 
all Mainline Partners, even if the regional Carrier does not fly 60 
seat aircraft for all its Mainline Partners. Even worse, relinquishing 
its aircraft of more than 60 seats returns a regional Carrier to non-
Participating status for all its Mainline Partners. In the past, the 
increase and decrease in the volume of Ticketed Itineraries being 
reported as a result of acquisitions and divestitures of larger or 
smaller aircraft have created significant problems for users of the O&D 
Survey data.
    The responses to the ANPRM expressed the unanimous opinion that the 
exemption for small Carriers requires significant revision. Northwest 
Airlines (Docket OST-1998-4043-49) stated that smaller aircraft are 
serving meaningful markets. The City of Chicago (Docket OST-1998-4043-
27) pointed out that the 60-seat limit is irrelevant and outmoded. Los 
Angeles World Airports (Docket OST-1998-4043-28) noted that some 
Carriers are important to an airport regardless of whether they meet 
current reporting criteria. The Regional Airline Association (Docket 
OST-1998-4043-11) in its ANPRM comments objected to the 60 seat rule 
stating, ``It is clear that for the U.S. regional airline industry, the 
current data collection process is both inappropriate and inconsistent. 
The current structure of reporting rules and regulations offer what the 
Association considers to be an approach to information gathering that 
is out of step with the current operating environment for regional 
airlines.'' It further stated, ``A vestige of a bygone era, the 60-seat 
distinction is ill-suited to the regional airline industry of today, 
but perhaps more importantly, that envisioned for the future.'' The 
entire aviation community has noted that, to understand passenger 
flows, it is crucial to include in the O&D Survey passengers traveling 
on Carriers that operate aircraft with fewer than 60 seats.
    The opinions provided in the responses to the ANPRM varied widely 
regarding the point at which a regional Carrier's passengers are no 
longer significant enough to be counted. The Regional Airline 
Association (Docket OST-1998-4043-11) stated that any Carrier with 
annual revenues of $20 million should report its tickets. ALPA (Docket 
OST-1998-4043-18) recommended a $10 million cutoff. The Port Authority 
of New York and New Jersey (Docket OST-1998-4043-25) would set the 
revenue cutoff at $1 million so long as the Carrier did not operate any 
aircraft with more than ten seats. The Allied Pilots Association 
(Docket OST-1998-4043-16) recommended defining the threshold as any 
carrier operating aircraft having at least 30 seats and transporting at 
least 100,000 annual passengers. Delta Air Lines (Docket OST-1998-4043-
21) and US Airways (Docket OST-1998-4043-7) both recommended that any 
passenger carried on a jet aircraft should be reported. Los Angeles 
World Airports (Docket OST-1998-4043-28) recommended using a revenue 
threshold or a given number of flights in lieu of the size of aircraft 
the Carrier operates, but left the calculation of the specific 
threshold to the Department.
    Metropolitan Washington Airports Authority (Docket OST-1998-4043-
38) recommended reporting by Carriers that operate aircraft with 25 or 
more seats or that are owned by Participating Carriers. Oakland 
International Airport (Docket OST-1998-4043-14) and R.W. Mann & Company 
(Docket OST-1998-4043-13) both recommended a proposal similar to the 
Metropolitan Washington Airports Authority proposal, but both used 30 
seats as the cutoff, and both believed that code-share Carriers should 
report regardless of their Mainline Partner's position. Daniel Kasper 
(Docket OST-1998-4043-62), an industry analyst who filed a response, 
echoed the 30-seat cutoff, but recommended that operators of 30-seat 
aircraft would only have to report if they transported 100,000 annual 
passengers. Wayne County and Detroit Metropolitan Airport (Docket OST-
1998-4043-23) was even more stringent, recommending that Carriers 
transporting 100,000 annual passengers, operating under a code-share 
agreement with a Mainline Partner, or operating aircraft with 15 or 
more seats should report. American Airlines (Docket OST-1998-4043-5), 
the City of Chicago (Docket OST-1998-4043-27), John Brown Company 
(Docket OST-1998-4043-33), Norfolk Airport Authority (Docket OST-1998-
4043-31), Northwest Airlines (Docket OST-1998-4043-49), The Port 
Authority of New York and New Jersey (Docket OST-1998-4043-25) (the 
latter in conjunction with the $1,000,000 cutoff mentioned above) 
endorsed 10-seat aircraft as the criterion for reporting. The National 
Transportation Safety Board (Docket OST-1998-4043-48) provided the most 
rigid recommendation. It recommended that every U.S. certificated Air 
Carrier should report regardless of size, even air taxis.
    The Department believes that moving the threshold of reporting from 
operators of 60-seat aircraft to operators of 15-seat aircraft will not 
be a significant reporting burden on small Carriers if the reporting 
responsibility is shifted to the Issuing Carrier. Since the majority of 
small Carriers are not Issuing Carriers, under the proposed system they 
would not be required to report the O&D Survey. Nonetheless, small 
Carriers, such as non-scheduled air taxis and other similarly small 
operations, represent a significantly different transportation market. 
The Department acknowledges that passengers in this market must be 
measured differently than the passengers in the global scheduled air 
transportation market. We do not wish to burden the truly small airline 
operations serving local needs. Rather, the Department wishes to reduce 
the ambiguity in the definition and classification of a Participating 
Carrier. Moving into and out of the Participating Carrier 
classification over time is problematic for both the Carrier concerned 
and the users of the O&D Survey. Therefore, we propose that (1) 
Carriers flying strictly intra-state service, (2) Carriers flying no 
aircraft with 15 or more seats, (3) non-scheduled air taxi service, and 
(4) non-scheduled helicopter service will continue to be exempt from 
reporting the O&D Survey.
c. Timeliness of Reporting
    Respondents representing all constituencies indicated that the 
erratic publication schedule maintained by the Department was a 
problem. The Allied Pilots Association (Docket OST-1998-4043-16), Back 
Associates, Inc. (Docket OST-1998-4043-3), the City of Chicago (Docket 
OST-1998-4043-27), and United Air Lines (Docket OST-1998-4043-15), 
among others, noted the delays in the release of data. United Air Lines 
cited the timeliness of the data release as the most important factor 
the Department could address to make the data more useful. Both Carrier 
and non-

[[Page 8171]]

Carrier respondents indicated that the data should be released on a 
monthly schedule instead of a quarterly schedule.
    The Department is aware that each Participating Carrier must verify 
its Issued Ticketed Itineraries that were first used for travel during 
a reporting month. It is our understanding that the majority of 
Participating Carriers will require some period of time, following the 
end of a month, for this verification process. However, the erratic 
receipt of data from Participating Carriers affects the Department's 
release of data to all stakeholders. For example, BLS produces the all-
items CPI, an important economic indicator which includes an airfare 
index. BTS has begun publishing a quarterly experimental research air 
travel price index (ATPI) that uses O&D Survey data. When monthly O&D 
Survey data become available, BTS intends to forward its ATPI to BLS 
for possible inclusion in the CPI. Because BLS requires all index 
components to be submitted no later than the fifth day of the month 
following the reference month, we are considering requiring each 
Participating Carrier to submit O&D Survey data for each month no later 
than the 5th day of the following month so that BTS can submit its ATPI 
within the time constraints of the CPI production schedule. Under this 
option, we would permit daily, weekly, and/or monthly data submissions 
by Participating Carriers. We are aware that weekly reporting cycle for 
travel agents would cause some passengers who purchase air travel near 
the end of the month and fly within the month to remain unreportable on 
the fifth day of the month due to missing information about the sale of 
the Ticketed Itinerary. We seek comment on the costs and benefits of 
requiring Participating Carriers to submit O&D Survey data for a 
particular month by the 5th day of the following month. Comments 
advocating alternative reporting due dates should include information 
addressing both the alternative due date's influence on the timeliness 
and on the accuracy of the data.
    The Department proposes that Participating Carriers will provide 
the name and contact information for a Designated Carrier Liaison to 
act on behalf of the Participating Carrier in operational matters 
pertaining to the company's collection and submission of the O&D 
Survey. In order to maintain its own data dissemination schedule, the 
Department will monitor the receipt of Participating Carrier data very 
closely, and contact the Designated Carrier Liaison promptly when 
problems arise. Exact deadlines for reporting will be published in 
Passenger Origin-Destination Survey Directives issued by the 
Department.
d. Data Monitoring
    Guidelines in the Paperwork Reduction Act of 1995 direct agencies 
to develop information resource management procedures for reviewing and 
substantiating the quality of information before it is disseminated. 
The IG (AV-1998-086) found that a lack of quality control by Carriers 
was responsible for chronic inaccuracies in the O&D Survey. In the 
responses to the ANPRM, the most common request after removal of the 
60-seat Carrier exemption and reporting exemption for Foreign Air 
Carriers was to improve the Department's monitoring of the data that is 
received. The Port of Portland (Docket OST-1998-4043-19) stated this 
succinctly: ``Enforce data quality standards by filing carriers''. The 
Department will, therefore, initiate a rigorous process of monitoring 
and enforcement to maximize the quality of the data submitted to the 
Department.
    It is too early in the planning process to discuss specific data 
quality monitoring. However, the Department proposes to establish 
mechanisms to monitor (1) the timeliness of Carrier submissions and (2) 
the composition of submitted Ticketed Itineraries to ascertain the 
reasonableness of a Carrier's reporting. The Department will adopt a 
basic standard of quality and take appropriate steps to enforce the 
quality criteria subject to an acceptable degree of imprecision. Some 
late reporting of itineraries will be expected, and, therefore, the 
degree of promptness and precision that is tolerated may be reduced or 
increased depending on the circumstances. Established guidelines and 
methods will be made publicly available and uniformly enforced. The 
Department will use these guidelines to determine the expected number 
of late reported itineraries and initiate an investigation when we 
detect Carriers to be outside those guidelines.
e. Certification of Accuracy
    In accordance with OMB guidelines, the Department proposes to 
establish administrative mechanisms allowing affected stakeholders to 
seek and obtain correction of information disseminated in the O&D 
Survey. Since the public relies on accurate Carrier data, we propose to 
maintain a mechanism of ongoing communications with Participating 
Carriers through designated representatives. Therefore, each 
Participating Carrier will provide the name and contact information for 
its Designated Company Official, who will certify the accuracy of the 
data submissions. The Participating Carrier will also supply the name 
and contact information for its Designated Carrier Liaison, who will 
have the responsibility for resolving day to day operational issues 
with the Participating Carrier's submitted data.
    The Department proposes to collect and record information from 
Carriers from time to time that the Department deems necessary to 
adequately monitor the Carrier's data submissions. The requirements 
will be published in the Passenger Origin-Destination Survey Directives 
issued by the Department, although this Carrier-provided information 
will be kept confidential. The information retained in this manner 
includes, but is not limited to: (1) The Carrier's IATA Issuing Carrier 
numeric code, also known in the industry as the Carrier's three-digit 
code; (2) The Carrier's Airline Designator, also known in the industry 
as the Carrier's two character code; (3) The name and contact 
information of the Designated Company Officer who certifies the 
accuracy of the data; (4) The name and contact information of the 
Designated Carrier Liaison who resolves operational submission issues; 
(5) The means, method, and timing the Carrier has selected for data 
submission; (6) The source and accuracy statement that discloses the 
Participating Carrier's (a) data source, (b) data collection 
methodology, and (c) measures to assure data quality; and (7) The 
methodology the Carrier uses to convert foreign currencies into U.S. 
Dollars.
f. Licensed Foreign Air Carrier Participation
    While foreign ownership restrictions have led the world's Carriers 
to share the task of transporting passengers across international 
boundaries, making international aviation one of the most global of 
industries, tremendous changes in both regulatory and business 
practices have dramatically reconfigured the operating and competitive 
structure of global aviation. Open Skies agreements, now in place 
between the U.S. and growing numbers of countries, are producing 
enormous benefits for consumers. Liberalization of air service 
agreements has enabled Carriers around the world to deepen their 
cooperative agreements with their foreign counterparts. International 
operations are becoming an increasingly important component of network 
Carrier operations. The distinctions between domestic and international 
networks are increasingly blurred as the interline partnerships provide 
seamless services

[[Page 8172]]

through code-sharing, marketing, and strategic alliance agreements.
    As a result, policy makers, international airlines, and consumers 
would all benefit from the capability to better understand and map 
global traffic flows that would promote sound public policy and 
business decisions. Not surprisingly, the ANPRM responses from U.S. Air 
Carriers advocated that their foreign-based counterparts be included in 
contributing data to the O&D Survey. Similarly, comments received from 
the nation's airports and airport consultants were unified in 
requesting that Foreign Air Carriers' exemption from reporting be 
ended. The enthusiasm with which they endorsed Foreign Air Carrier 
reporting is all the more pronounced because the airports, as a group, 
refrained from offering opinions on ANPRM topics on which they did not 
feel that they had sufficient expertise or that did not directly affect 
their needs. The Norfolk Airport Authority (Docket OST-1998-4043-31) 
fully endorsed a change of policy to require Foreign Air Carriers to 
report. Operators of larger international gateway airports made 
commensurately stronger statements. The City of Chicago (Docket OST-
1993-4043-27) wrote, ``The City strongly supports including the O&D 
data of Foreign Air Carriers * * *. The lack of foreign airline O&D 
data is arguably the greatest gap in our knowledge of the market''. 
When asked to list everything that would make the O&D Survey data more 
functional, Los Angeles World Airports (Docket OST-1998-4043-28) 
responded with only a single item: ``collect information from all 
domestic and international carriers''. John Brown Company (Docket OST-
1998-4043-33), an airport management consultant, wrote, ``given the 
open-skies posture of the U.S. government toward international air 
service, it would be appropriate and not unreasonable to require the 
same standards of traffic reporting by Foreign Air Carriers operating 
air service at U.S. airports as for U.S. Air Carriers. U.S. airports 
need a complete picture of their existing air traffic flows in order to 
identify opportunities and develop proposals for new routes''.
    Advocates of the collection of more international aviation data 
were not limited to Air Carriers and airports. The DOC (Docket OST-
1998-4043-37) commented that, ``to provide comprehensive, quality data 
to DOT and the industry, both U.S. flag and foreign flag carriers 
should be providing traffic data. Without the foreign flag data, DOT 
cannot truly assess the market''. ALPA (Docket OST-1998-4043-18) wrote, 
``In ALPA's view, one of the significant gaps in DOT's data collection 
system is that Foreign Air Carriers are not, as a general rule, 
required to file O&D data''. Comments to the ANPRM reveal that all the 
users of the O&D Survey data, including unions, airports, consultants, 
carriers, and other government agencies, agreed that the lack of 
Foreign Air Carrier data is a significant flaw in the usefulness of the 
data and that this flaw should not be underestimated. In addition to 
the ANPRM comments, the IG (Office of Inspector General Audit Report 
Number AV-1998-086) noted in its 1998 report on the O&D Survey that, 
``the Department is at a disadvantage in reviewing and negotiating 
international air route awards to ensure U.S. carriers retain 
competitive parity with Foreign Air Carriers''.
    In the past, the Department has declined to impose the same burden 
of direct reporting of the O&D Survey on Foreign Air Carriers given the 
manual processes involved. The Department issues licenses to Foreign 
Air Carriers to authorize them to sell Ticketed Itineraries for travel 
to the U.S. as specified in 49 U.S.C. 41301, but the license does not 
include a responsibility to report information about the Ticketed 
Itineraries they issue. The Department decided to forgo knowledge about 
the U.S citizens that Foreign Air Carriers transport from U.S. gateway 
cities when the passenger does not interline on a U.S. Air Carrier. 
There is a special provision for reporting O&D information imposed on 
Foreign Air Carriers that operate under antitrust immunity granted 
under 49 U.S.C. Sections 41308 and 41309, but the provision only 
requires a Foreign Air Carrier to report the Ticketed Itineraries it 
issues, thus avoiding the more complicated requirements imposed on U.S. 
Air Carriers to report interline tickets. The data from those reporting 
Foreign Air Carriers, in combination with the O&D Survey reports from 
U.S. Air Carriers, give the Department only limited insight into the 
global airline industry. Furthermore, Foreign Air Carrier data are kept 
highly confidential and are restricted to internal Department analysis 
related to the monitoring of these alliances.
    Instead of burdening the Licensed Foreign Air Carriers, the 
Department requires that U.S. Air Carriers assume the burden of 
obtaining the passenger information from the Foreign Air Carrier when 
the U.S. Air Carrier transports an interline passenger on Ticketed 
Itineraries issued by a Licensed Foreign Air Carrier. For example, the 
Department does not require Licensed Foreign Air Carriers, such as 
British Airways, to report the Ticketed Itineraries of its passengers 
transported from U.S. gateway airports, such as those in Washington or 
New York. However, we do require U.S. Air Carriers, such as US Airways, 
to report the Ticketed Itineraries of passengers that they bring from 
interior airports, such as those in Knoxville or Harrisburg, to the 
gateway airports where passengers connect to British Airways flights. 
Since the Carrier that transports the passenger on the international 
Flight-Stage is customarily the Issuing Carrier on tickets with 
connecting passengers, in this example British Airways, the current 
regulation burdens the U.S. Air Carriers with the task of obtaining O&D 
Survey information from these Foreign Air Carriers. By requiring the 
U.S. Air Carriers to report tickets issued by Foreign Air Carriers, the 
current regulation has been able to fully account for domestic 
passengers and international passengers that begin their journey at 
interior airports. Even so, passengers that begin their travel at U.S. 
gateway airports traveling on Foreign Air Carriers are missing from the 
current O&D Survey.
    Similarly, when Foreign Air Carriers issue Ticketed Itineraries for 
travel to the U.S. to residents of other countries, the current 
regulation burdens the U.S. Air Carriers with the task of reporting 
those Ticketed Itineraries. For example, when SN Brussels issues 
Ticketed Itineraries on its ticket stock to passengers traveling to the 
U.S. on its ticket stock, it does so under its license to issue 
Ticketed Itineraries granted under the authority of 49 U.S.C. 41301. If 
a U.S. Air Carrier, such as American Airlines, participates in the 
itinerary, then the current regulation requires American Airlines to 
obtain a copy of the Ticketed Itinerary from SN Brussels and report it. 
If all of the transportation is on a non-reporting Foreign Air Carrier, 
such as Aer Lingus, then information about that passenger will go 
unreported in the O&D Survey.
    Additional complexity in the current system is created because U.S. 
Air Carriers report Ticketed Itineraries directly to the O&D Survey 
while Foreign Air Carriers reporting Ticketed Itineraries under 49 
U.S.C. Sections 41308 and 41309 participate in a similar, but 
different, program. When a reporting Foreign Air Carrier issues a 
Ticketed Itinerary that includes a U.S. Air Carrier in the itinerary, 
the current regulation requires the Foreign Air Carrier to report the 
Ticketed Itinerary to the alternative O&D Survey created for non-U.S. 
Carriers. It also requires the U.S. Air Carrier to report the same 
Ticketed Itinerary to the O&D Survey.

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Because of the dual reporting system established for the Ticketed 
Itineraries flown on Foreign Air Carriers, the Department must, when 
monitoring alliance activity, weed out the duplicates before compiling 
combined statistics.
    If a Foreign Air Carrier, such as SN Brussels in the previous 
example, issues a Ticketed Itinerary to be flown on a Foreign Air 
Carrier required to report by agreement under 49 U.S.C. Sections 41308 
and 41309, such as KLM, the passenger would go unreported because KLM 
is only required to report the Ticketed Itineraries for which it is the 
Issuing Carrier. Continuing this example, if the itinerary includes a 
connection to a U.S. Air Carrier, such as Northwest, at the gateway, 
then the Ticketed Itinerary will be reported to the O&D Survey by 
Northwest. If, however, a U.S. Air Carrier is not in the itinerary, 
then the Department will not receive this itinerary in its O&D reports. 
The current O&D Survey does not require SN Brussels to report the 
Ticketed Itinerary because SN Brussels did not transport the passenger 
to the U.S. Similarly, the current O&D Survey does not require KLM to 
report the Ticketed Itinerary because KLM did not issue that itinerary. 
Ticketed Itineraries are not reported with specific identifiers, and 
thus the Department can only presume that Ticketed Itineraries issued 
by Foreign Air Carriers are (1) reported twice when they are supposed 
to be reported twice, (2) reported once when they are supposed to be 
reported once, and (3) not reported when they are not supposed to be 
reported. Since Ticketed Itineraries are reported in aggregate, without 
unique identifiers, it is very difficult for the Department to verify 
the presumption that the Carriers are properly reporting the Ticketed 
Itineraries. Our presumptive dropping of duplicate itineraries on the 
assumption that they were reported twice adds to the uncertainty 
surrounding the statistics reported from the current system.
    Licensed Foreign Air Carriers indirectly contribute itinerary data 
about their passengers. While U.S. Air Carriers use the O&D Survey in 
planning and marketing their services to and from the U.S., Foreign Air 
Carriers are at a distinct disadvantage in not being able to use this 
information. Confidentiality rules ban the sharing of data with non-
U.S. entities. If all Licensed Foreign Air Carriers contributed data to 
the O&D Survey, then the confidentiality rule banning dissemination of 
information to Foreign Air Carriers could be lifted. This would benefit 
foreign entities, including Foreign Air Carriers. The anticipated 
further liberalization of aviation markets intensifies the need of 
governments and airlines for accurate traffic data as they seek to 
understand commercial developments and accommodate growth in 
international air travel. As alliances further develop and integrate, 
understanding their impact on non-aligned Carriers and on the 
industry's operating and competitive structures is increasingly more 
challenging. The effect of such developments as strategic alliances 
between U.S. and Foreign Air Carriers having antitrust immunity cannot 
be adequately evaluated without more complete and accurate traffic data 
for all Carriers. It is difficult to determine the impact of a subset 
of the market without an accurate picture of the whole market.
    The competitive effects of these dynamic international alliances 
and their impact on competition, traffic flows, and aviation 
infrastructure cannot be effectively evaluated in isolation. Monitoring 
and planning both business and public policy decisions in a global 
network industry requires more complete data on international traffic 
flows between, behind, and beyond U.S. and foreign gateway airports. 
The global air transportation marketplace represents an important 
component of air transportation for U.S citizens and the U.S. economy. 
Having properly imposed the burden of reporting the O&D Survey on the 
Issuing Carrier, we are reluctant to re-impose an undue burden on U.S. 
Air Carriers by (1) continuing the practice of requiring them to report 
the O&D Survey in the current manner for Foreign Air Carrier issued 
itineraries and (2) requiring to report in the new manner as Issuing 
Carriers for their own Ticketed Itineraries. Imposing a dual reporting 
burden on U.S. Air Carriers would be particularly onerous because it 
would require continuation of all the antiquated current reporting 
processes in addition to instituting the new reporting processes. This 
scenario would further require the Participating Carrier to examine 
each Ticketed Itinerary to identify the appropriate reporting process 
for that itinerary. Even worse, it is these itineraries, issued on the 
ticket stock of Foreign Air Carriers, that are responsible for most of 
the reporting problems that occur in the current O&D Survey system. 
However, by not imposing the dual reporting burden, the Department 
would continue to miss O&D Survey information about travelers to 
gateway airports as well as begin to miss O&D Survey information about 
passengers traveling on domestic routes on itineraries issued by 
Licensed Foreign Air Carriers.
    The Department is therefore considering requiring Foreign Air 
Carriers licensed under 49 U.S.C. Section 41301 to report O&D Survey 
data. There does not appear to be an alternative workaround that is 
more efficient than the simple requirement for all Issuing Carriers to 
report the tickets they issue for travel to and from, and within, the 
U.S. The Foreign Air Carriers required to report their issued Ticketed 
Itineraries as a condition of immunity with a U.S. Air Carrier partner 
have complied with this requirement and managed to adapt accordingly. 
The new system, designed specifically to interface with the common 
industry information technology infrastructure, should reduce the 
reporting burden for the currently reporting Foreign Air Carriers.
    In addition, recent developments in the interline settlement 
processes would further assist Foreign Air Carriers in reporting the 
O&D Survey data. An alliance of Carrier-owned industry organizations--
ATPCO, International Air Transport Association (IATA) and ARC--in 
October 2003 launched a comprehensive, global solution for financial 
settlement of interline travel to streamline inter-airline accounting. 
The interline accounting settlement service offers the possibility that 
Foreign Air Carriers can create a cost effective vehicle to provide the 
necessary data, and thus enable Foreign Air Carriers to minimize the 
cost of complying with the Department's reporting requirement. It is 
possible that combining the reporting processes with interline 
settlement processes will reduce the reporting burden to such a level 
that the cost would be far less than the benefits derived from having 
access to the information.
    With full participation of the affected Carriers, the Department 
could provide access to the international data to all Participating 
Carriers and all stakeholders. As the largest aviation market, the U.S. 
is a key component in global aviation traffic flows. Complete O&D data 
to and from the U.S. would be an extremely valuable resource for global 
Carriers in planning their services. This is especially true as MIDT 
data, the current industry standard, decreases in utility as more 
bookings circumvent the GDSs. The Department seeks comment on the 
efficacy of requiring O&D Survey reports from Licensed Foreign Air 
Carriers in terms of costs and benefits and we seek comment on 
alternatives that would enable the Department to obtain the information 
it needs from Ticketed

[[Page 8174]]

Itineraries issued by Licensed Foreign Air Carriers.
g. Charter Flights
    In their responses to the ANPRM, the airports noted that passengers 
on non-scheduled flights merit inclusion in the O&D Survey. They 
observe that there are extensive public charter operations that operate 
on such a regular basis that differentiating a regularly scheduled 
charter from regularly scheduled passenger service is difficult. Even 
if they are a relatively small component of the national air 
transportation system, some charter Carriers transport a significant 
number of passengers to certain destinations.
    Respondents have requested that these categories of passengers be 
counted in the O&D Survey in order to supply a complete picture of 
domestic and international aviation.
    The Department believes that including charter Carriers would 
represent a considerable expansion of the scope of the O&D Survey. We 
further believe that doing so would most certainly impose a significant 
burden on small entities since charter operations generally qualify as 
small businesses. In addition, the advancing coverage of low cost 
Carriers into the markets that traditionally were most attractive to 
charter Carriers could potentially reduce the number of passengers 
charter services transport, further reducing the impact of charter 
services on the national transportation system. In light of this, we do 
not propose to expand the scope of the O&D Survey to include charter 
services, but we invite further comment on this issue.
h. Reporting by Flight-Stage
    Several respondents to the ANPRM commented on inconsistencies that 
are allowed to exist in the O&D Survey because of funnel flight and 
starburst flight situations. American Airlines (Docket OST-1998-4043-5) 
noted that the root of the inconsistency is the generally accepted, 
albeit little known, practice of reporting single flight segments with 
multiple Flight-Stages as if they were a single flight segment with one 
Flight-Stage. For example, a passenger traveling from Washington Dulles 
(IAD) to Los Angeles International (LAX) might travel on a non-stop 
flight, represented as IAD-LAX. However, another passenger might travel 
from Washington to Los Angeles on a direct one-stop by way of St. Louis 
under a single flight number and a single flight coupon. Since the 
passenger in the second example does not deplane in St. Louis, both 
example itineraries will be reported as IAD-LAX in the O&D Survey.
    The Department believes that checking the congruency of the O&D 
Survey with the T-100/T-100(f) is the best method of verifying the 
accuracy of both sets of data. Since the Ticketed Itineraries that 
describe nonstop travel are indistinguishable from Ticketed Itineraries 
that describe one-stop or two-stop travel, checking the O&D Survey 
against the statistics in the T-100/T-100(f) is very difficult. For 
example, passengers can be routed from Washington Dulles to Los Angeles 
International by way of any of a dozen or more airports. Each Ticketed 
Itinerary will describe that one-stop travel as IAD-LAX to the O&D 
Survey but as the actual route in the T-100. In this same way, one-stop 
and two-stop travel is available in practically all of the airports in 
the U.S. and in foreign countries. The Department must collect O&D 
Survey data on a stage-by-stage basis (wheels up to wheels down) rather 
than the current coupon-by-coupon basis (passenger enplanement to 
passenger deplanement) in order to attain the desired congruency with 
the T-100/T-100(f).
    This change in reporting requirements will have minor impact on 
those Carriers that store information about the intermediate stops that 
exist in the passengers' Ticketed Itineraries. Carriers that do not 
store information about the intermediate stops that their customers are 
making will have to either retain that information from the passengers' 
flight reservations or re-acquire the information from a source of 
flight schedule data such as that provided by the Official Airline 
Guide (OAG). In its ANPRM comments, the OAG (Docket OST-1998-4043-43) 
offered its services in determining the identity of Franchise Code-
share Partner Carriers and we believe that their services or those of 
other organizations could be similarly utilized to determine 
information about intermediate stops.
    To obtain the highest level of accuracy when knowledge of hidden 
intermediate stops must be re-acquired, that process should take place 
in a time frame commensurate with the creation of the Ticketed 
Itinerary. Flight schedules change over time, and the shortest possible 
time lag between the creation date of the Ticketed Itinerary and the 
time when knowledge of intermediate stopping is re-acquired will 
provide the fewest possible instances of flights not found in the 
schedule data.
    The missing Flight-Stage information has significant effect on the 
quality and reliability of the information required and disseminated by 
the Department. Therefore, we propose to collect data on a Flight-Stage 
basis rather than the current Flight-Coupon Stage basis. We seek 
comments from the industry and the public regarding how the Flight-
Stage Origin Airport and Flight-Stage Destination Airport should be 
determined.
i. Data Retention
    The Department's policy on data quality recognizes that no data 
system is free of data errors. The Department must have the means of 
redressing a problem found in the data quality. The data submitted 
under the provisions of the proposed O&D Survey and the T-100/T-100(f) 
will be subject to regulations under 14 CFR Part 249--Preservation of 
Air Carrier Records. The Department's procedure concerning the requests 
for correction of information gives stakeholders the right to request 
correction of information disseminated by the Department.

5. Transition Period

    The Department proposes to establish a transition period, also 
known as concurrent processing, between initialization of the proposed 
O&D Survey and discontinuation of the current O&D Survey. During the 
transition period, the Department will begin collecting data under the 
rules of the new O&D Survey. The transition period will consist of a 
test phase for initial testing, sometimes called unit testing, and a 
test phase for large volume testing, sometimes called system testing. 
The current survey must continue to be produced during both phases of 
the transition to the new system.
    There are two primary objectives for the transition period. The 
first is to ensure that the data being reported under the new system 
are accurate, complete, and comparable across Carriers using different 
internal accounting systems. The second objective is to ensure, to the 
extent possible, the relative comparability between data submitted 
under the current O&D Survey and data submitted under the proposed O&D 
Survey. Many stakeholders rely on the Department's aviation traffic 
data to discern broad trends in services, fares, and capacity. The 
modernization of aviation data must therefore ensure that the ability 
to use the data to perform such critical time series analyses is 
preserved both in terms of the databases maintained by the Department 
as well as in the traffic data products it disseminates. Time series 
analyses are required for critical government and business decisions, 
which are predicated on identifying and

[[Page 8175]]

understanding trend changes. We believe we can preserve time-series 
continuity by disseminating the same data in both formats, helping the 
users assess the full impact of the change in the O&D Survey and, 
thereby, mitigating the need for a long transition period collecting 
data under dual systems. Because continued integrity in data collected 
in the current system is crucial to the testing of the new system, 
reduced attentiveness to reporting accuracy on the part of the current 
Participating Carriers may lengthen the transition period.
    The need for concurrent processing is self-evident. Statistics must 
continue in the current format while the new statistical system is 
being tested and validated. During the test phase of the transition 
period, the Department will begin accumulating data from all 
Participating Carriers and correlate that data with data from the 
enhanced T-100/T-100(f). Meanwhile, data continuity will be preserved 
with continued O&D Survey submissions under the current rule. The 
Department will be accepting data from a variety of systems and we 
anticipate that it will take some time to establish communications and 
data validity checks appropriate for each Carrier.
    In addition to testing the quality of the data received from each 
Carrier, the Department will use the time in the test phase to 
accumulate data that will be necessary for the commencement of the 
large volume testing phase. Since Ticketed Itineraries are purchased in 
advance of travel date, data must necessarily be collected over the 
length of time each Carrier allows for advance purchase. For example, 
Carriers with a four-month advance purchase availability, or booking 
window, would provide full test data for the four months to accumulate 
a full set of passenger data for the Department to test. Carriers with 
an 11-month booking window, however, would send the appropriate data 
for 11 months. The Department cannot begin conducting meaningful 
overall comparisons between the data from the current O&D Survey and 
the proposed system until it has accumulated data over the length of 
the advance booking windows.
    Once the Department is satisfied that 100 percent of the data from 
each Participating Carrier has been collected and processed, the second 
phase of the transition can begin. During this full-volume testing 
phase, the Department will evaluate the new stream of data over time to 
ensure that the methodology and technology are robust, after which the 
old system can be shut down.
    Users of O&D Survey data will require a period in which they can 
understand the impact of the change in data and data processes by 
comparing the results of the new O&D Survey with the existing O&D 
Survey. This continuity is equally important for Participating Carriers 
since Carriers are users as well as suppliers of data. The Department 
is aware of the advantages of a long full-volume testing phase, but we 
are also aware that these advantages come at the cost of running two 
data collection systems in parallel. We acknowledge that requiring the 
Carriers to supply data for two systems simultaneously will require 
extraordinary efforts on their part. Recognizing the burden to file 
data under both reporting systems, the Department wishes to minimize 
the length of the second transition phase. However, we acknowledge that 
data suppliers have many constraints and data users have many data 
testing needs of which we are unaware. Therefore, the Department seeks 
comment regarding the proposed length of the second transition phase.

J. T-100/T-100(f) Considerations

    The T-100/T-100(f), consisting of Form 41, Schedule T-100--U.S. Air 
Carrier Traffic and Capacity Data by Nonstop Segment and On-flight 
Market and Schedule T-100(f)--Foreign Air Carrier Traffic Data by 
Nonstop Segment and On-flight Market, contains monthly segment and 
market traffic data (Part 217). The proposed changes to the O&D Survey 
will provide the Department with information about the numbers of 
passengers scheduled to use the air transportation system by flight and 
by day, but the proposed NPRM does not provide any capability, except 
when aggregated to the month of travel, to cross check the scheduled 
passengers with the actual passengers carried on the aircraft. The 
Department is considering modifying the T-100/T-100(f) to enable us to 
validate the data that will be collected under the O&D Survey to ensure 
the data's accuracy.

1. Background

    The T-100/T-100(f) collects summarized flight stage data and on-
flight market data. The Reporting Carriers collect these traffic 
statistics for each revenue Flight-Stage as actually performed and 
compile them for reporting to the Department. Since the statistics are 
collected by counting the people who board an aircraft, nothing can be 
known about other flights the passenger may have taken prior to 
boarding that aircraft and nothing can be known about flights the 
passenger may be taking as part of the same itinerary subsequent to 
disembarking from that aircraft. Significantly, nothing can be known 
about what the passenger paid for the transportation on the current 
aircraft. The Carriers collect this information on each Flight-Stage 
departure each day, and at the end of the month, they summarize it by 
(1) equipment type, (2) class of service, and (3) airport pair, all 
without regard to individual flight number for the month.

2. T-100/T-100(f) Changes To Be Considered

    The O&D Survey, in contrast to the T-100/T-100(f) report of actual 
passengers boarded, collects copies of the passenger's scheduled 
itinerary. O&D Survey passenger reports are copied and reported after 
the passenger's initial departure on that Ticketed Itinerary. Since the 
bulk of the passenger's itinerary has not yet been flown at the time of 
initial departure, the O&D Survey collects information about 
itineraries as they are scheduled to be performed, not as they are 
actually performed. As has been previously described in this 
rulemaking, two significant features of the O&D Survey are (1) the 
information about the passenger's connecting flights that enable users 
to obtain a sense of the passenger's true origin and true destination 
and (2) the information about the fare that the passenger paid that 
enable users to assign a value to air transportation. The contrasting 
differences, between the narrow source of information about passengers 
that are actually transported and the robust source of information 
about passengers that are scheduled to be transported, make the T-100/
T-100(f) and the O&D Survey ideal companion data products that the 
Department makes available to the industry and the public.
    Making the changes to the O&D Survey proposed in this rulemaking 
without making commensurate changes in the T-100/T-100(f) would leave 
the two data collection systems focused on two different levels of 
aggregation and would severely limit the advantages now enjoyed by 
having companion data products. The current O&D Survey is validated by 
knowledge of the established relationships between passengers scheduled 
to fly between a set of airport pairs and passengers actually on board 
flights between those airport pairs. The proposed revisions allow the 
users of the O&D Survey to have knowledge of passengers scheduled to 
fly between airports by time-of-day and day-of-week, which is a level 
of detail that the T-100/T-100(f) does not possess. Without 
commensurate changes in the T-100/T-

[[Page 8176]]

100(f), the desired match between the O&D Survey and the T-100/T-100(f) 
data will be limited to highly aggregated monthly comparisons. The 
Department is concerned about its inability to validate the receipt of 
flight date and flight number elements into the O&D Survey as proposed 
in this rulemaking. For example, one of the most important new features 
of the O&D Survey is the ability to disseminate data by One-way Trips. 
The Department's ability to validate the data that goes into deriving 
the One-way Trips is dependent on getting commensurate robust T-100/T-
100(f) information by flight and by date.
    In addition to the need to keep the data congruent for validation 
purposes, knowing the on-board count of passengers by flight and by 
date on the T-100/T-100(f) would be helpful for the Department in 
planning airport capacity expansion. The usefulness of knowing the 
passengers flying between airports for an entire month is limited to 
long range planning functions. For example, the FAA would use the T-
100/T-100(f) in long-range planning where trends measured to the 
nearest month are useful. The data would be more useful if it included 
details that could help with facility planning by time-of-day and by 
day-of-week.
    The Department has provided information about the costs and 
benefits of collecting and disseminating the T-100/T-100(f) data by 
flight and by day (See section L(3)). Preserving data validity and 
accuracy by flight and by day by coordinating the O&D Survey with the 
T-100/T-100(f) to the highest degree practicable will benefit the 
Department and the public. To this end, the Department is considering 
the collection of T-100/T-100(f) data by Master Flight Number and by 
flight date. We seek comments on the efficacy of this possible course 
of action.

K. Data Dissemination

    The Department proposes to continue to disseminate O&D Survey 
products from the data collected under this rulemaking to serve the 
needs of various stakeholders in the aviation community. If the 
significant enhancements proposed in this rulemaking were adopted, 
these products would be substantially richer in content, more timely, 
and more accurate than the products disseminated under the current 
system. While it would be premature to identify the precise nature and 
format of such products, they would certainly not be less detailed than 
the data products disseminated under the current system, including 
dissemination of data by itinerary, within the constraints of Vision 
100 regarding flight-specific data. We have spent considerable effort 
to understand the data needs of various user groups and recognize that 
different users have diverse requirements in terms of the level of data 
granularity most suitable to their needs. The Department therefore 
seeks detailed comments and suggestions on aviation data products, 
based on our proposed changes, that would satisfy the various needs of 
different types of users.
    We recognize that, in order to be able to comment effectively, 
interested parties require further information on key methods that will 
be applied to the data, particularly those which will be used to 
determine a passenger's True O&D using the industry standard One-way 
Trip methodology. Among these important methods are: (1) Dissemination 
of data by month according to the scheduled flight date, (2) grouping 
of flights by One-Way Trip instead of by Directional Passenger trip, 
and (3) reporting the fare obtained by the Carrier(s) using an industry 
standard proration methodology rather than relying on the current 
practice of reporting the total fare amount collected with the total 
itinerary. The processes by which data are collected and disseminated 
affect the accuracy of those data. Since such methods define the 
utility of the fundamental data elements, we outline our proposals in 
each of these areas in detail. We seek comment on our proposed 
methodology, the resulting aviation data products, and the composition 
of these disseminated products.

1. Dissemination of Data by Month

    The Department has heretofore disseminated all data about travel in 
the quarter in which it was reported. Although the Department proposes 
to continue to collect Ticketed Itinerary data on a ticket basis in the 
month it is first used for travel, we propose to disseminate the data 
on the basis of the month in which travel is scheduled to take place. 
This dissemination is made possible because the proposed rule expands 
the data collected for each Ticketed Itinerary. At this time, we are 
considering disseminating data by month in at least two formats: (1) 
The Ticketed Itinerary (similar to the DB1B Ticket file) and (2) the 
One-way trip (similar to the DB1B Market file) aggregations, subject to 
Vision 100 constraints on the dissemination of flight-specific data. To 
create a market file, the Department proposes to separate the Ticketed 
Itinerary into One-way Trips, allocate the itinerary fare to the One-
way Trips, and store the One-way Trips for dissemination at the 
appropriate time. The Scheduled Flight Date of the first Flight-Stage 
in a One-way Trip will serve as the flight date for that One-way Trip. 
We seek comment about the construction and dissemination of these data 
products.

2. Proposed Construction of One-Way Trips

    As explained in the proposed data elements discussion (Section 
I.2.a.--O&D Survey Redesign: Discussion of the Proposed O&D Survey) for 
the One-way trip format, each Ticketed Itinerary will be divided into a 
series of one or more One-way Trips according to the guidelines 
published in the final rule. We anticipate basing these guidelines on 
industry consensus and seek comment about methods of constructing One-
way Trips.
    The Department proposes to use four hours in an airport as the 
maximum amount of time to consider that airport as a connecting airport 
in a domestic U.S. airport to U.S. airport itinerary, or between a U.S. 
airport and an airport in either Canada or Mexico. The Department 
proposes to use 24 hours in an airport as the maximum amount of time to 
consider that airport as a connecting airport in a Ticketed Itinerary 
for international travel.

3. Proposed Proration Method

    The current O&D Survey is published on a Ticketed Itinerary basis. 
The amount collected is summed for the itinerary. In the proposed One-
way trip format, the Department will divide the Ticketed Itinerary into 
One-way Trips. To perform meaningful analysis, the fare amount must be 
allocated to the One-way Trips in an equitable manner. The industry 
term for the process of allocating the fare to the One-way Trips is 
proration.
    Four proration techniques are widely used in the industry: (1) 
Straight rate prorate, (2) international prorate factors, (3) mileage, 
and (4) square root of the miles. Each has advantages and 
disadvantages. Straight rate prorate methodology compares, for each 
itinerary, the Carrier's unrestricted fares, for each local Flight-
Coupon Stage, that are in effect when the Ticketed Itinerary is issued 
to the total fare collected. A ratio is established between all the 
Flight-Coupon Stages using the unrestricted local fares and the 
resulting ratios are applied to the fare that was actually collected 
for the itinerary being processed. In international prorate factors, 
instead of looking up the fares to establish a ratio, the ratios are 
already established and they are referenced and applied. In mileage 
prorate, the ratio is obtained by using the number of miles

[[Page 8177]]

distant between airports. In the square root of the miles methodology, 
the ratio used for dividing the fares is established by using the 
square root of the number of miles distant between cities.
    Unlike a Carrier that can chose a proration method that is most 
advantageous to its own situation and needs, the Department is 
constrained by its requirement to be able to apply one technique with 
equanimity for all Carriers across all conceivable itineraries. 
Further, the Department is constrained by a requirement that its 
processes be repeatable (i.e., a Ticketed Itinerary processed through 
the system today must provide the same result as it will if processed 
again several months later). Since straight rate prorate and 
international prorate factors require inputs from outside systems that 
change over time, the Department would have to keep copies of all 
possible permutations of those inputs by day in order to meet the 
repeatable standard. This would clearly be costly, and in light of 
other available proration methods, excludes these methods from further 
consideration.
    The mileage and square root of the miles methodologies have a 
distinct advantage, because the miles between airports change very 
rarely. In the previous decade, only the opening of a new airport in 
Denver and the relocation of the terminal in Pittsburgh have had an 
effect on the number of miles between airports in the U.S. The 
Department considers this to be an acceptable level of variance 
inherent in these two proration techniques. Of the two, the Department 
prefers the square root of the miles methodology over a mileage 
proration methodology. When there are two Flight-Stages in a trip, and 
the Flight-Stages are of equal distance, both techniques will allocate 
half the money to each leg. When there are two Flight-Stages of a trip, 
and one stage length is significantly longer than the other, mileage 
allocates the short stage length a miniscule amount of the fare while 
square root of the miles allocates a bit more and tends to be more 
consistent with prorate agreements between Carriers.
    For example, in a hypothetical 850-mile trip with two Flight-Stages 
that are 425 miles distant, both techniques will give each 425-mile 
stage one half of the fare amount. In another hypothetical 850-mile 
trip with one flight stage of 729 miles and one of 121 miles, the 
mileage prorate gives 85.8 percent of the fare amount to the longer leg 
and 14.2 percent to the shorter stage. The square root of the miles on 
that same itinerary gives the longer stage 71 percent of the fare 
amount while the shorter stage gets 29 percent. The square root of the 
miles prorate calculation mimics typical Carrier revenue allocations 
more closely than does the mileage prorate.
    The Department seeks comment on the best practices in the 
application of proration methodology in the scheduled air 
transportation industry. Respondents that advocate a methodology other 
than the one proposed by the Department, the square root of miles, must 
consider in their recommendation the Department's constraints: (1) The 
methodology must treat all carriers with equanimity and (2) the 
methodology must be repeatable.

4. Proposed Changes to Confidentiality

    One of the most critical elements of the Department's proposed 
changes to the O&D Survey involves addressing data confidentiality. The 
current O&D Survey data confidentiality rules (14 CFR Sec 19-7(d)) 
exist to preclude international data from being disclosed since Foreign 
Air Carriers were excluded from reporting. Domestic data in the current 
O&D Survey are released in full after a certain period of time elapses.
    In its response to the ANPRM, the Allied Pilots Association (Docket 
OST-1998-4043-16) pointed out that the time lags under the current O&D 
Survey reduce the usefulness of the data. There was a divergence of 
opinion on how long the data should remain confidential, but most 
advocated a short confidentiality period for all data. No respondent 
registered strong disapproval of a short confidentiality period. Short 
confidentiality periods were endorsed by Airports Council 
International--North America (Docket OST-1998-4043-6), American 
Airlines (Docket OST-1998-4043-5), Continental Airlines (Docket OST-
1998-4043-26), and Metropolitan Washington Airports Authority (Docket 
OST-1998-4043-38). The Air Line Pilots Association (Docket OST-1998-
4043-18) said the data should be released no later than 6 months after 
the report date. Respondents that went on record to say that the 
confidentiality period should not be greater than six months are Delta 
Air Lines (Docket OST-1998-4043-21), Oakland International Airport 
(Docket OST-1998-4043-14), BACK Associates, Inc. (Docket OST-1998-4043-
3), John Brown and Company (Docket OST-1998-4043-33), Los Angeles World 
Airports (Docket OST-1998-4043-28), Port Authority of New York and New 
Jersey (Docket OST-1998-4043-25), Port of Portland (Docket OST-1998-
4043-19), and Wayne County and Detroit Metropolitan Airport (Docket 
OST-1998-4043-23).
    Any changes to the present reporting system must satisfy the 
statutory requirements of Section 805 of Vision 100--Century of 
Aviation Reauthorization Act (Pub. L. 108-176; 117 Stat. 2490). Section 
805 mandates that, if the Secretary requires Carriers to provide 
flight-specific information, the Department will not: (1) Make public 
the flight-specific fare information until at least nine months after 
the flight date and (2) issue a rule requiring public dissemination of 
flight-specific fare information without giving due consideration to 
and addressing the Carriers' confidentiality concerns.
    The Department recognizes that Carriers will view flight-specific 
fare information as ``sensitive,'' in that a competitor could 
potentially exploit this information in the marketplace. The Department 
also recognizes that, when combined with other data elements, the 
combined data elements could raise certain competitive confidentiality 
concerns. The Department believes there exists a wide range of opinion 
about data elements that should be withheld from public dissemination 
and the appropriate holding period. The Department's initial position 
is that, while it may be appropriate to withhold some of the new data 
elements from public dissemination for a time, all data should 
eventually be released into the public domain. We seek comment 
regarding the timing of the release of flight-specific fare 
information.
    The Department is cognizant of the sensitive nature of any data 
element that could be used to identify any specific individual 
passenger. No data requested in this rulemaking will include any 
personal information on a specific passenger that would enable the 
identification of a specific individual. We have declined to propose 
collection of any of the elements that were suggested in ANPRM comments 
as point of sale identifiers (these are Passenger Citizenship, Phone 
Number, and Zip Code/Postal Code.) Furthermore, if the Department were 
to collect the any of these elements, it would never release any data 
that could be used to identify an individual passenger. The Department 
will only use such data for statistical purposes. These passenger data 
will be protected under the Confidential Information Protection and 
Statistical Efficiency Act of 2002 (CIPSEA), which appears as Title V 
of the E-Government Act of 2002. We invite comment from the industry 
and public on issues of confidentiality of passenger information.

[[Page 8178]]

    The expanded amount of information that the Department proposes to 
collect is required to fulfill the Department's statutory mandates. 
However, the O&D Survey information to be disseminated to the public 
has not yet been fully determined. We anticipate releasing data that 
are of immediate economic value, but do not disclose competitive 
positions, as soon as the data are received and processed for 
dissemination, subject to the constraints mandated by law. The 
Department seeks comment on a proposal to release aggregated data on a 
monthly basis in the shortest possible time needed to process the data. 
We are also requesting public comments on whether certain, and if so 
which, data elements should be withheld from public dissemination and 
the appropriate holding period. We invite comment from the industry 
regarding public dissemination of flight-specific fare information 
according to the provisions of Vision 100--Century of Aviation 
Reauthorization Act.

L. Rulemaking Analyses and Notices

    In order to increase efficiency and effectiveness; improve the 
integrity, quality, and utility of the information available; and 
reduce information collection costs to the Carriers; the Department 
proposes to modernize its data collection products. The legal authority 
for the proposed rule is provided by the Civil Aeronautics Board Sunset 
Act of 1984 (Pub. L. 98-443), which requires the Department, under the 
authority of the Secretary (49 U.S.C. 329(b)(1)), to collect and 
disseminate information on civil aeronautics and aviation 
transportation in the U.S., other than that collected and disseminated 
by the National Transportation Safety Board. The Department must, at 
minimum, collect information on the origin and destination of 
passengers and information on the number of passengers traveling by air 
between any two points in air transportation. Additionally, the 
Department must be responsive to the needs of the public and 
disseminate information to make it easier to adapt the air 
transportation system to the present and future needs of commerce of 
the U.S. (49 U.S.C. 40101(a)(7)). In meeting this responsibility, the 
Department collects data submitted under 14 CFR Part 217 (Reporting 
Traffic Statistics by Foreign Air Carriers in Civilian Scheduled, 
Charter, and Nonscheduled Services), 14 CFR Part 241 (Uniform System of 
Accounts and Reports for Large Certificated Air Carriers) and 14 CFR 
Part 298 (Exemptions for Air Taxi and Commuter Air Carriers).
    The purpose of the proposed rule is to improve the accuracy and 
utility of reported traffic data while reducing the burden on the 
Carriers. For the O&D Survey, this objective is achieved by replacing 
14 CFR Part 241 Section 19-7 with Section 26, which modifies the set of 
existing data elements, revises reporting time frames, and redefines 
the set of Carriers that report the O&D Survey in accordance with 
industry standards and practice. We are considering changes to the T-
100/T-100(f) to enhance congruency between the O&D Survey and the T-
100. The changes we are considering would amend 14 CFR Part 241 Section 
25, thus modifying the set of existing data elements reported on the T-
100 and amend 14 CFR Part 217 Section 5, thus modifying the set of 
existing data elements reported on the T-100(f).
    The proposed modernization of the Department's aviation data will 
bring the data gathering process into alignment with current airline 
industry accounting practices. It will provide more accurate, more 
timely, and more complete data for all stakeholders. Furthermore, it is 
the least intrusive informational alternative sufficient to accomplish 
the statutory objective of gathering accurate information about air 
travel. The proposed rule has been evaluated under the following Acts, 
Executive Orders, and Departmental Policies. We seek comment from 
interested parties about the rulemaking analyses contained in this 
section.

1. Affected Carriers

    The Carriers that would, under the proposed changes to the O&D 
Survey, be required to report the O&D Survey are those defined in 
Section I.3. (O&D Survey Redesign: Reporting Requirements) as 
Participating Carriers. These Participating Carriers are (1) U.S. Air 
Carriers that issue tickets for travel on scheduled interstate 
passenger services to or from, or within, the U.S. and operate aircraft 
with 15 seats or more for scheduled service and (2) Foreign Air 
Carriers that operate under 49 U.S.C. Sections 41308 and 41309 and are 
required, under the grant of antitrust immunity, to report itineraries 
involving a U.S. point. The group of Participating Carriers consists of 
Currently Participating Carriers and Newly Participating Carriers. 
Because the proposed rule changes the criteria defining which Carriers 
shall report the O&D Survey, there will be 38 Participating Carriers 
(25 U.S. Air Carriers, versus the 34 U.S. Air Carriers that submitted 
the O&D Survey in Third Quarter 2003, and 13 Foreign Air Carriers) 
under the proposed rule, compared to 47 Carriers under the current 
rule.
    Currently Participating Carriers are those U.S. Air Carriers and 
Foreign Air Carriers that report the O&D Survey under the current rule 
and would continue to report the O&D Survey under the proposed rule. 
Newly Participating Carriers are (1) those U.S. Air Carriers that do 
not currently report the O&D Survey but would begin to report under the 
proposed rule and (2) those Foreign Air Carriers that would report the 
O&D Survey if they operate under antitrust immunity pursuant to 49 
U.S.C. Sections 41308 and 41309 for alliance(s) with U.S. Air 
Carrier(s). In addition, under the proposed rule, 13 U.S. Air Carriers 
that currently report the O&D Survey would no longer be required to 
report. These carriers are identified as Formerly Participating 
Carriers.
    The Department is considering modifying the data elements reported 
by U.S. Air Carriers on the T-100 and by Foreign Air Carriers on the T-
100(f). The additional data elements being considered would, in 
combination with the proposed changes to the O&D Survey, enhance the 
validity and reliability of the Department's aviation data and benefit 
all stakeholders. We have included the regulatory impact of the 
potential changes to the T-100/T-100(f) in this section, although we 
note that these changes have not been specifically proposed within this 
NPRM.
    The Department is also considering requiring Foreign Air Carriers 
that: (1) Are licensed to hold out service to the U.S. under 49 U.S.C. 
Section 41301; (2) do not have antitrust immunity for an alliance with 
a U.S. Air Carrier; and (3) operate aircraft with 15 seats or more for 
scheduled service to or from, or within, the U.S. to report all 
itineraries involving a U.S. point to the O&D Survey. At this time, we 
have not included these Foreign Air Carriers in the Regulatory Analyses 
contained in Section L. We seek comment on the costs and benefits of 
including in, or excluding from, the O&D Survey data from these Foreign 
Air Carriers.

[[Page 8179]]



                        Table 1.--Carriers Affected by Proposed Changes to the O&D Survey
----------------------------------------------------------------------------------------------------------------
                                                               Continue to                          No longer
                                                                 report        Begin to report     required to
                                                               (currently          (newly       report (formerly
                                                              participating     participating     participating
                                                                carriers)         carriers)         carriers)
----------------------------------------------------------------------------------------------------------------
U.S. Air Carriers.........................................                21                 4                13
Foreign Air Carriers......................................                13                 0                 0
Total Carriers............................................                34                 4                13
----------------------------------------------------------------------------------------------------------------

    The Carriers that would, under the changes we are considering to 
the T-100/T-100(f), be required to report the T-100/T-100(f) are those 
defined in Section J.1. (T-100/T-100(f):--Background) as Reporting 
Carriers. Because the proposed rule does not alter the definition of 
Reporting Carrier, no Carriers would be added as Reporting Carriers 
based solely on the possible changes to the T-100/T-100(f). There were 
282 Reporting Carriers in Third Quarter 2003. However, 52 of those 
Carriers are all-cargo Carriers. Because the additional data elements 
being considered for the T-100/T-100(f) are flight-specific and would 
be used, in part, to match the O&D Survey to the T-100/T-100(f), all-
cargo Carriers would not have to report these elements. The changes 
that we are considering making to the T-100/T-100(f) would, therefore, 
affect the remaining 230 Reporting Carriers (121 U.S. Air Carriers and 
109 Foreign Air Carriers) that are not all-cargo Carriers.

            Table 2.--Carriers That Would Be Affected by Changes Being Considered for T-100/T-100(f)
----------------------------------------------------------------------------------------------------------------
                                                               Continue to                          No longer
                                                                 report        Begin to report     required to
                                                               (currently     (newly reporting  report (formerly
                                                                reporting         carriers)         reporting
                                                                carriers)                           carriers)
----------------------------------------------------------------------------------------------------------------
U.S. Air Carriers.........................................               121                 0                 0
Foreign Air Carriers......................................               109                 0                 0
Total Carriers............................................               230                 0                 0
----------------------------------------------------------------------------------------------------------------

2. The Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, codified at 2 U.S.C. 
1531-1538, requires Federal agencies to prepare a written assessment of 
the costs, benefits, and other effects of proposed or final rules that 
include a Federal mandate likely to result in expenditures by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of more than $100 million annually.
    The proposed changes to the O&D Survey and the changes we are 
considering making to the T-100 would not result in expenditures by 
State, local, or tribal governments because no such government operates 
a Carrier subject to the proposed regulation. While the proposed 
changes to the O&D Survey and the changes we are considering making to 
the T-100(f) will affect Foreign Air Carriers, some of which are 
operated (in whole or in part) by foreign governments, the Unfunded 
Mandates Reform Act of 1995 does not apply to foreign governments.

3. Regulatory Evaluation

a. Executive Order 12866, Regulatory Planning and Review
    Executive Order 12866, Regulatory Planning and Review (58 FR 51735; 
September 30, 1993) defines a significant regulatory action as one that 
is likely to result in a rule that may have an annual effect on the 
economy of $100 million or more or adversely affect, in a material way, 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities. Regulatory actions are also considered 
significant if they are likely to create a serious inconsistency or 
interfere with the actions taken or planned by another agency or if 
they materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of the 
recipients of such programs.
    The proposed changes to the O&D Survey are estimated to 
collectively cost U.S. Air Carriers approximately $1.3 million in the 
first year, including initial costs and annual reporting costs, and 
approximately $281,000 each year thereafter. If these changes are not 
made, the collective reporting costs to U.S. Air Carriers are estimated 
to be approximately $509,000 each year. When Foreign Air Carriers that 
operate under 49 U.S.C. Sections 41308 and 41309 and are required, 
under grant of antitrust immunity, to report itineraries involving a 
U.S. point are included, the proposed changes to the O&D Survey are 
estimated to collectively cost the world airline industry approximately 
$1.9 million in the first year, including initial costs and annual 
reporting costs, and approximately $427,000 each year thereafter. If 
these changes are not made, the collective reporting costs to the world 
airline industry are estimated to be approximately $704,000. Thus, if 
we make no changes to the current O&D Survey, we will continue to 
collect data under that rule. The collective annual costs to U.S. 
carriers will continue to be approximately $509,000 per year and the 
collective annual costs to the world airline industry will continue to 
be approximately $704,000. Table 3 compares the annual costs of the 
proposed changes to the O&D Survey to the annual costs of continuing 
the current O&D Survey collection. These costs are further detailed in 
Tables 8 and 9.

[[Page 8180]]



   Table 3.--Collective Costs for U.S. Air Carriers and World Airline
        Industry Proposed Changes Versus Current Rule O&D Survey
------------------------------------------------------------------------
                                         First year
                                      collective costs   Subsequent year
                                          (including    collective costs
                                       initial costs)
------------------------------------------------------------------------
Proposed O&D:
    U.S. Air Carriers...............        $1,273,110          $280,800
    World Airline Industry..........         1,915,336           426,816
Current O&D:
    U.S. Air Carriers...............           509,184           509,184
    World Airline Industry..........           703,872           703,872
------------------------------------------------------------------------

    The changes that we are considering making to the T-100/T-100(f) 
are estimated to collectively cost U.S. Air Carriers approximately $1 
million in the first year, including initial costs and annual reporting 
costs, and approximately $204,000 each year thereafter. If these 
changes are not made, the collective reporting costs to U.S. Air 
Carriers are estimated to be approximately $159,000 each year. When 
Foreign Air Carriers are included, the changes that we are considering 
making to the T-100/T-100(f) are estimated to collectively cost the 
world airline industry approximately $1.9 million in the first year, 
including initial costs and annual reporting costs, and approximately 
$387,000 each year thereafter. If these changes are not made, the 
collective reporting costs to the world airline industry are estimated 
to be approximately $301,000. Thus, if we do not make the changes to 
the T-100/T-100(f) that we are considering, we will continue to collect 
data under the existing rule. The collective annual costs to U.S. 
carriers will continue to be approximately $159,000 per year and the 
collective annual costs to the world airline industry will continue to 
be approximately $301,000. Table 4 compares the annual costs of the 
changes to the T-100/T-100(f) that we are considering making to the 
annual costs of continuing the current T-100/T-100(f) collection. These 
costs are further detailed in Tables 10 and 11.

   Table 4.--Collective Costs for U.S. Air Carriers and World Airline
     Industry Considered Changes versus Current Rule T-100/T-100(f)
------------------------------------------------------------------------
                                         First year
                                      collective costs   Subsequent year
                                          (including    collective costs
                                       initial costs)
------------------------------------------------------------------------
Proposed:
    U.S. Air Carriers...............        $1,002,460          $203,860
    World Airline Industry..........         1,905,503           387,503
Current:
    U.S. Air Carriers...............           158,559           158,559
    World Airline Industry..........           301,392           301,392
------------------------------------------------------------------------

    Because the proposed changes to the O&D Survey and the changes we 
are considering making to the T-100/T-100(f) will not collectively cost 
members of the private sector more than $100 million in the first year 
of effectiveness under the proposed rule, the Department finds that the 
changes would not, collectively or separately, place a significant 
burden on the world-wide airline industry. The Department also finds 
that the benefits of the proposed changes outweigh the potential costs. 
Therefore, the proposed rule should not be considered an economically 
significant regulatory action under Executive Order 12866. However, 
regulatory actions that raise novel legal or policy issues can be 
considered significant. Because the proposed changes to the O&D Survey, 
as well as the changes we are considering for the T-100/T-100(f), 
change the collection procedures of influential aviation data, this 
NPRM is considered a significant regulatory action under Executive 
Order 12866 and was reviewed by the Office of Management and Budget.
    Net Present Value Analysis. The current rule is expected to cost 
approximately $1 million each year. The cost of the current O&D Survey 
is estimated by multiplying the average annual reporting burden of 960 
hours per reporting Carrier by an estimated hourly wage of $15.60. The 
total burden, for the 47 Carriers that report the O&D Survey under the 
current rule, is $703,872. The cost of the current T-100/T-100(f) is 
estimated by multiplying the average annual reporting burden of 84 
hours per reporting Carrier by an estimated hourly wage of $15.60. The 
total burden for the 230 Carriers that report the T-100/T-100(f) under 
the current rule is $301,392.
    As shown in Tables 8, 9, 10, and 11, the proposed changes to the 
O&D Survey and the changes we are considering making to the T-100/T-
100(f) are expected to cost the affected Carriers approximately $3.82 
million in the first year and $814,320 in each subsequent year. That 
is, while the proposed changes to the O&D Survey and the changes we are 
considering making to the T-100/T-100(f) will require a one-time 
investment of about $3.82 million, annual reporting costs for the 
initial and subsequent years would decrease, collectively by about 
$71,000 per year and individually by about 240 hours per Carrier.
    Table 5, below, shows the present value costs, using a 7 percent 
discount rate, under (1) the current rule, (2) the proposed rule, and 
(3) the proposed rule if Carriers engage in one year of concurrent 
processing. As discussed in Section I.5. (O&D Survey Redesign:

[[Page 8181]]

Transition Period), a transition period may be required. During that 
time, both Formerly Participating Carriers and Currently Participating 
Carriers would report under the current rule, while Currently 
Participating Carriers and Newly Participating Carriers would also 
report under the proposed rule. For the purposes of present value cost 
analyses, we estimate a concurrent test period of one year.

                                     Table 5.--Estimated Present Value Costs
                          [Including changes being considered for the T-100/T-100(f).]
----------------------------------------------------------------------------------------------------------------
                                                                                                 Proposed rule
                                                                                                  (with 1 year
                       Elapsed time                          Current rule     Proposed rule        concurrent
                                                                                                  processing)
----------------------------------------------------------------------------------------------------------------
5 Years:
    Total Present Value Cost..............................      $4,121,781         $6,148,705         $7,088,204
        (incremental cost over current rules).............  ..............        + 2,026,924         +2,966,423
10 Years:
    Total Present Value Cost..............................       7,060,544          8,529,275          9,468,774
        (incremental cost over current rules).............  ..............        + 1,468,731        + 2,408,230
15 Years:
    Total Present Value Cost..............................       9,155,858         10,226,588         11,116,087
        (incremental cost over current rules).............  ..............        + 1,070,730        + 1,960,229
20 Years:
    Total Present Value Cost..............................      10,649,781         11,436,749         12,376,249
        (incremental cost over current rules).............  ..............          + 786,968        + 1,726,468
----------------------------------------------------------------------------------------------------------------

    The initial reporting burden associated with the proposed changes 
to the O&D Survey and the changes considered for the T-100/T-100(f) 
results in higher present value costs. However, the benefits to 
Participating Carriers and Reporting Carriers, as well as to the 
Department, Federal agencies, airports, consultants, academics, State 
and local transportation planners, other State and local agencies, 
consumers, and other stakeholders, are significant and immediately 
available (See Sections L.3.d.2. and L.3.e.2.). Because these benefits 
are less readily quantifiable, Table 6 contains the present value 
benefits, using a 7% discount rate, under three possible scenarios, for 
the proposed rule.
    The first scenario assumes a total annual benefit, as a result of 
the proposed and considered changes, of $250,000 per year. If the 
Participating Carriers were assumed to be the sole beneficiaries, each 
would, under this very conservative scenario, receive annual benefits 
of about $6,600 a year. We believe that information about 100 percent 
of Ticketed Itineraries issued for travel to or from, or within, the 
U.S. by U.S. Air Carriers operating aircraft with 15 seats or more is 
likely worth much more than approximately $7,000 per year. In fact, we 
are certain that the cost to purchase this degree of information, for a 
12-month period and from a GDS or other source not based on the O&D 
Survey, would be considerably more expensive. Again, if we assume the 
only beneficiaries to be the Participating Carriers, the second 
scenario would attribute annual benefits to those 38 Participating 
Carriers of about $13,200 per year. Based on our knowledge of non-
Departmental data sources, we find this estimated benefit to be 
conservative.
    We find the third scenario, total annual benefits of $1,000,000 for 
all stakeholders, to be more realistic. This estimate is the equivalent 
of about $27,000 of annual benefits per stakeholder if only the 38 
Participating Carriers are considered. Furthermore, submission of 100 
percent of Ticketed Itineraries by Participating Carriers significantly 
reduces the likelihood that the Department will need to request 
supplemental data about markets not represented in the O&D Survey. 
Participating Carriers will be able to apply resources previously 
dedicated to supplemental data request to other internal priorities. 
Assigning an estimated total annual benefit of $1,000,000 per year only 
to Participating Carriers, however, ignores the benefits to the 
Department's regular analyses of competition in the aviation industry 
and its EAS and Small Community Air Service Development Program. In 
addition, we have not enumerated the annual benefit, to the FAA, DOJ, 
DOS, DOC, DHS, BLS, and other Federal agencies and programs, of having 
100 percent of Ticketed Itineraries issued by Participating Carriers.
    Therefore, we base our assessment of the costs and benefits of the 
proposed changes to the O&D Survey and the changes being considered for 
the T-100/T-100(f) on the moderate estimate of $1,000,000 of total 
annual benefits for all stakeholders. We seek comment about the 
estimated benefits, for individual stakeholders as well as 
collectively, used in this regulatory evaluation.

                      Table 6.--Estimated Present Value Benefits Under Proposed O&D Survey
                            [Including changes being considered for T-100/T-100(f).]
----------------------------------------------------------------------------------------------------------------
                                                     Estimated total annual benefits for all stakeholders
                                            --------------------------------------------------------------------
                Time period                                               Conservative
                                                Very conservative       $500,000 per year   Moderate  $1,000,000
                                              $250,000 per year  ($)           ($)              per year ($)
----------------------------------------------------------------------------------------------------------------
5 Years Total Present Value Benefits.......                1,025,049             2,050,099             4,100,197
10 Years Total Present Value Benefits......                1,755,895             3,511,791             7,023,582
15 Years Total Present Value Benefits......                2,276,979             4,553,957             9,107,914
20 Years Total Present Value Benefits......                2,648,504             5,297,007            10,594,014
----------------------------------------------------------------------------------------------------------------


[[Page 8182]]

    As shown in Table 7, the net present value of the proposed rule is 
positive in the majority of estimated scenarios. For example, the 
proposed rule alone yields a positive net present value within five 
years for two of the three benefit estimates and under all benefit 
estimates within 10 years. Using the moderate estimate of $1,000,000 
total annual benefits for all stakeholders, the net present value of 
the proposed changes to the O&D Survey and changes being considered for 
the T-100/T-100(f) is positive within five years--even when including 
one year of concurrent processing.

                                  Table 7.--Net Present Value Proposed Changes to the O&D Survey and Estimated Benefits
                                                [Including changes being considered for T-100/T-100(f).]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Total Net Present Value
                                             -----------------------------------------------------------------------------------------------------------
                                               Very conservative $250,000 total      Conservative--$500,000 total      Moderate--$1,000,000 total annual
                                                        annual benefits                     annual benefits                        benefits
                Elapsed time                 -----------------------------------------------------------------------------------------------------------
                                                               Proposed rule + 1                   Proposed rule + 1                   Proposed rule + 1
                                               Proposed rule    year concurrent    Proposed rule    year concurrent    Proposed rule    year concurrent
                                                    ($)               ($)               ($)               ($)               ($)               ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5 Years.....................................       -1,001,874         -1,941,373           23,175           -916,324        2,073,274          1,133,775
10 Years....................................          287,174           -652,325        2,043,070          1,103,571        5,554,861          4,615,361
15 Years....................................        1,206,248            266,749        3,484,227          2,543,728        8,037,184          7,097,685
20 Years....................................        1,861,535            922,036        4,510,039          3,570,540        9,807,046          8,867,547
--------------------------------------------------------------------------------------------------------------------------------------------------------

    It is our conclusion that the benefits of the proposed rule will 
significantly outweigh the costs. We also conclude that, because the 
present value costs for the proposed rule clearly do not exceed $100 
million, for total or incremental costs and even when including one 
year of concurrent processing, the proposed rule should not be 
considered an economically significant regulatory action under 
Executive Order 12866.

b. Vision 100--Century of Aviation Reauthorization Act

    Vision 100--Century of Aviation Reauthorization Act (Pub. L. 108-
176) recognizes the need for the U.S. to increase its investment in 
research and development to revitalize the aviation industry as well as 
to improve aviation information collection. Section 805(a) states that, 
if the Secretary requires Carriers to provide flight-specific 
information, the Department will not: (1) Make public the flight-
specific fare information until at least nine months after the flight 
date and (2) issue a rule requiring public dissemination of flight-
specific fare information without giving due consideration to and 
addressing the Carriers' confidentiality concerns. Moreover, Section 
805(b)--Effective Date stipulates that the amendment to 49 U.S.C. 
Section 329(b)(1), stated in Section 805(a), shall become effective on 
the date of the issuance of a final rule to modernize the O&D Survey. 
The final rule, pursuant to the ANPRM (RIN 2105-AC71; 63 FR 28128, July 
15, 1998), must propose change that ``reduces the reporting burden for 
air carriers through electronic filing of the survey data collected 
under Section 329(b)(1) of Title 49, U.S.C.'' The calculations for 
burden reduction are shown in Sections L.3.d.1. (Regulatory Analysis--
O&D Survey: Regulatory Assessment--Costs) and L.3.e.1. (Regulatory 
Analysis--T-100/T-100(f): Regulatory Assessment--Costs), below.
    The proposed changes to the O&D Survey support electronic filing 
and reduce manual activity and paperwork. The Issuing Carrier 
possesses, within its internal systems, the data elements required by 
the proposed rule. By designating the Issuing Carrier as the 
Participating Carrier, the proposed rule eliminates the need for the 
Participating Carrier to manually examine, and obtain information from 
other carriers about Ticketed Itineraries that were not issued by the 
Participating Carrier.
    We find that the proposed changes to the O&D Survey and the changes 
considered for the T-100/T-100(f) meet the requirements of Vision 100, 
specifically Section 805(b), in that the changes ``reduce the reporting 
burden for air carriers through electronic filing of the survey data 
collected under Section 329(b)(1) of Title 49, U.S.C.'' There are three 
tests of ``reduction of reporting burden for air carriers through 
electronic filing of the survey data'': (1) Net present costs, (2) net 
present value, and (3) change in annual reporting burden. We base our 
conclusion on the third test--the change in annual reporting burden for 
affected carriers. We seek comment about our definition of ``reduction 
of reporting burden for air carriers through electronic filing of the 
survey data'' and our conclusion that the proposed changes to the O&D 
Survey and the changes being considered for the T-100/T-100(f) meet the 
requirement of Vision 100, Section 805(b).
    i. Annual Collective Industry Reporting Burden. We believe that the 
proposed rule reduces the collective reporting burden for the airline 
industry, for both U.S. Air Carriers and Foreign Air Carriers, even if 
we include the reporting burden associated with the T-100/T-100(f) 
changes we are considering. Under the current rule, 47 Carriers (U.S. 
Air Carriers and Foreign Air Carriers) report the O&D Survey and 230 
Carriers report the T-100/T-100(f). Collectively, the industry faces a 
total annual reporting burden under the current rule of 64,440 hours. 
Under the proposed changes to the O&D Survey, 38 Carriers would report 
the O&D Survey. Under the changes to the T-100/T-100(f) that we are 
considering, 230 Carriers would report the T-100/T-100(f). Under both 
the proposed changes to the O&D Survey and the changes being considered 
for the T-100/T-100(f), the industry would face a total annual 
reporting burden of 52,200 hours. The proposed rule, including the 
changes being considered for the T-100/T-100(f) decreases the 
industry's collective annual reporting burden by 12,240 hours, or about 
18 percent.
    The collective annual reporting burden for affected U.S. Air 
Carriers alone also decreases. Under the current rule, the total annual 
reporting burden for 34 Carriers reporting the O&D Survey and 121 
Carriers reporting the T-100 is 42,804 hours. Under the proposed rule, 
including the changes being considered for the T-100/T-100(f), the 
total annual reporting burden for the 25 Carriers reporting the O&D 
Survey and the 121 Carriers reporting the T-100 would 31,068 hours. 
This is a collective decrease of 11,736 hours, or about 27 percent.

[[Page 8183]]

    ii. Annual Individual Carrier Reporting Burden. The proposed 
changes to the O&D Survey result in substantial decreases for U.S. Air 
Carriers and Foreign Air Carriers that will continue to report, or 
cease to report, the O&D Survey. First, the total number of 
Participating Carriers is reduced from 47 to 38. Second, by designating 
the Issuing Carrier as the Participating Carrier, the proposed rule 
reduces the manual processing and intervention inherent in the current 
rule, thereby simplifying electronic filing.
    For informational purposes, we have calculated the annual reporting 
burden for the changes being considered for the T-100/T-100(f). While 
these changes would, if adopted, increase the annual reporting burden 
for each U.S. Air Carrier and each Foreign Air Carrier that will report 
only the T-100/T-100(f) from 84 hours to 108 hours, they would maximize 
congruence with the proposed O&D Survey.
    The average annual reporting burden of each U.S. Air Carrier or 
Foreign Air Carrier that currently reports both the O&D Survey and the 
T-100/T-100(f) will decrease by 216 hours, or about 20 percent, (from 
1,044 hours under the current rule to 828 hours under the proposed 
rule, even when the changes being considered for the T-100/T-100(f) are 
included. Similarly, under the proposed changes to the O&D Survey and 
the changes being considered for the T-100, the average annual 
reporting burden of each of the 13 U.S. Air Carriers that will cease to 
report the O&D Survey, but continue to report the T-100, will decrease 
from 1,044 hours to 108 hours, or about 89 percent. Excluding the 
changes being considered for the T-100, these 13 U.S. Air Carriers 
would see their annual reporting burden decrease by 91 percent.
c. Departmental Regulatory Policies and Procedures
    The Department's Regulatory Policies and Procedures (initially 
issued February 26, 1979, 44 FR 11034; restated May 22, 1980, DOT Order 
2100.5) establish objectives to be pursued in reviewing existing 
regulations and in issuing new regulations. The objectives include the 
identification of a regulation as a (1) significant regulation, (2) 
emergency regulation, or (3) non-significant regulation. One key issue 
in the determination of a significant rulemaking is the extent to which 
the affected information is influential. Influential information will 
have or does have a clear and substantial impact on important public 
policies or important private sector decisions. The aviation data 
collected by the O&D Survey and the T-100/T-100(f) are critical for 
policy makers, Carriers, airports, and other stakeholders (See Section 
D--O&D Survey Data Usage and Section J--T-100/T-100(f)). Because the 
proposed changes to the O&D Survey, as well as the changes we are 
considering for the T-100/T-100(f), change the collection procedures of 
influential aviation data, this NPRM is considered a significant 
regulatory action under the Department's Regulatory Policies and 
Procedures.
d. Regulatory Analysis--O&D Survey
    The proposed rule defines a Participating Carrier for the O&D 
Survey as (1) a U.S. Air Carrier that issues Ticketed Itineraries for 
travel on scheduled interstate passenger services to or from, or 
within, the U.S. and operates aircraft with 15 seats or more for 
scheduled service and (2) a Foreign Air Carrier that has an alliance 
with a U.S. Air Carrier (pursuant to 49 U.S.C. 41308 and 41309) and is 
required to report itineraries involving a U.S. point. Under the 
proposed rule, the total number of Participating Carriers would 
decrease by about 19 percent, from 47 to 38. The specific costs and 
benefits of the proposed changes to the O&D Survey are discussed in the 
following sections.
    i. Regulatory Assessment--Costs. For Currently Participating 
Carriers, we estimated (1) the initial costs of revising the reporting 
systems to include the proposed new data items and enable monthly 
reporting of the full universe of issued tickets and (2) the annual 
costs of monthly submissions of the proposed O&D Survey for 100 percent 
of Ticketed Itineraries for travel to or from, or within, the U.S. For 
Newly Participating Carriers, we estimated (1) the initial costs of 
obtaining systems to include all data elements and enable monthly 
reporting of the full universe of issued tickets containing a U.S. 
point and (2) the annual costs of monthly submissions of the proposed 
O&D Survey for 100 percent of Ticketed Itineraries for travel to or 
from, or within, the U.S. The initial and annual reporting costs for 
Formerly Participating Carriers are, of course, zero.
    We estimate the total initial reporting costs for the O&D Survey 
for all Participating Carriers to be approximately $1.49 million, of 
which approximately $993,000 would be expended by Participating U.S. 
Air Carriers. We estimate the annual reporting costs for the proposed 
O&D Survey for all Participating Carriers to be approximately $427,000, 
of which approximately $281,000 would be expended by Participating U.S. 
Air Carriers.
    We recognize that the initial and annual reporting costs of 
individual Participating Carriers are likely to differ and, for some 
Participating Carriers, may be smaller than our estimates. 
Nevertheless, we have applied a single cost estimate in our regulatory 
assessment. We recognize that some Participating Carriers may choose to 
utilize third-party providers, for the initial systems development and/
or for monthly data submission, but we do not include estimates of 
third-party provider costs in this regulatory assessment. However, we 
are aware that third-party providers already serve the airline industry 
with systems that collect, bundle, process, and transfer data between 
Carriers and between Carriers and the Department. Thus, third-party 
providers may choose to customize or adjust existing data systems, 
already used by Participating Carriers, to meet the submission 
requirements of the proposed rule. We assume Participating Carriers 
would select this option only if its costs were lower; as such, it is 
possible that Participating Carriers that decide to use third parties 
would incur lower costs than those we have estimated. We seek comment 
about the costs and benefits of the use of third-party providers under 
the proposed O&D Survey.
    Initial Reporting Burden. Currently Participating Carriers would 
incur an initial reporting burden, based on the systems changes 
required to expand one and add seven ticketed itinerary-level data 
elements and to expand three and add six Flight Stage-level data 
elements (See Section I.2.--O&D Survey: Discussion of the Proposed O&D 
Survey). The proposed data elements are available within the Currently 
Participating Carriers' internal systems and, therefore, we anticipate 
that Currently Participating Carriers will be able to access the data 
elements.
    We anticipate that the Currently Participating Carriers will create 
new automated processes to produce the proposed O&D Survey rather than 
simply modify the current processes. This is because the proposed 
procedures will no longer require continual information updates from 
sources outside the Participating Carrier's control, such as ticketing 
information from Issuing Carriers, and because the proposed procedures 
are simpler. In its response to the ANPRM, United Air Lines (Docket 
OST-1998-4043-15) estimated that ``there would be a moderate one time 
development effort

[[Page 8184]]

to create and implement the software which would create a TCN-like file 
each day containing internal [carrier] * * * sales and non-automated 
agency sales''. We agree, and estimate a ``moderate effort'' to be the 
equivalent of two and one-half work months \8\ of internal development 
and testing and one and one-half work months \9\ of external testing 
and coordination with the Department, for a total of four work months, 
or 694 staff-hours. We do not estimate the costs of materials or other 
resources.
---------------------------------------------------------------------------

    \8\ One work month = 173.3 staff hours = ((40 hours per week * 
52 weeks) divided by 12 months).
    \9\ One work month = 173.3 staff hours = ((40 hours per week * 
52 weeks) divided by 12 months).
---------------------------------------------------------------------------

    Newly Participating Carriers will incur an initial reporting burden 
based on the O&D Survey data collection and reporting requirements. As 
with Currently Participating Carriers, Newly Participating Carriers are 
expected to have the majority of this data present within their 
internal sales-based systems and TCN records. Furthermore, in 1997, as 
part of the Rural Airfare Study (Federal Aviation Administration 
Reauthorization Act of 1996, Section 1213; Pub. L. 104-264), the 
Department began to collect 100 percent of Ticketed Itineraries for 
domestic passengers from all certificated and commuter carriers 
providing scheduled passenger service to communities in the continental 
U.S. (Docket OST-1997-2767; Order 97-7-27, July 28, 1997). We note that 
two of the four Newly Participating Carriers were affected by this 
order and, therefore, are familiar with data submission requirements 
that are similar to those requested in the proposed rule.
    In its response to the ANPRM, United Air Lines (Docket OST-1998-
4043-15) stated that a non-CRS participating Carrier could create 
similar files from its own revenue accounting-type data, ``which should 
not be a major difficulty. Indeed, it should be no more difficult than 
complying with the present O&D Sampling requirements.'' We also note 
that, when conducting its Rural Airfare Study, the Department solicited 
comments about the costs of compliance--that is, the cost to submit 100 
percent of domestic continental U.S. Ticketed Itineraries. No comments 
about the costs of complying with this data request were received 
(Collectively, Docket OST-97-2767).
    We agree that Newly Participating Carriers should not find the task 
of obtaining systems to report the proposed O&D Survey more onerous 
than obtaining systems for the current O&D Survey. However, we 
recognize that Newly Participating Carriers will face some development 
and testing challenges that Currently Participating Carriers will not. 
We therefore estimate the equivalent of three work months \10\ of 
internal development and testing and two work months of external 
testing and coordination with the Department, for a total of five work 
months, or 867 staff-hours. We do not estimate the costs of materials 
or other resources.
---------------------------------------------------------------------------

    \10\ One work month = 173.3 staff hours = ((40 hours per week * 
52 weeks) divided by 12 months).
---------------------------------------------------------------------------

    Under the Service Contract Act of 1965 (as amended), the U.S. 
Department of Labor sets the minimum hourly rate, excluding benefits, 
for Federal Contracts. In 2004, DOL estimated an hourly rate of $27.62 
per hour for the positions of Computer Programmer IV and Computer 
Systems Analyst III.\11\ We recognize that the carriers' hourly costs 
are likely to be higher, particularly for skilled employees with 
specialized knowledge of aviation data and reporting. Thus, we estimate 
an industry hourly cost for a computer programmer/analyst of $55.00 per 
hour.
---------------------------------------------------------------------------

    \11\ Source: http://www.procurement.irs.treas.gov/tirno04r00005/amend04/wage_determination.txt. Although these rates are for West 
Virginia, they are the most recent wages established by the 
government and are comparable, in the past, to rates assigned to 
other states and districts. We believe that they represent an 
accurate estimate of wages for this set of positions, effective in 
2004. Furthermore, we do adjust the wages for this employment 
category to reflect the specialized requirements of the airline 
industry.
---------------------------------------------------------------------------

    Given these assumptions, we estimate the initial reporting costs 
for the proposed O&D Survey to be $38,170, or 694 hours, per Currently 
Participating Carrier. For Newly Participating Carriers, we estimate 
the initial reporting costs to be $47,685, or 867 hours, per Newly 
Participating Carrier. These estimated costs are based on staff hours 
only and do not include estimates for materials or other resources. We 
seek comment about the methods used to determine these initial 
reporting costs under the proposed rule.
    Annual Reporting Burden. The proposed changes to the O&D Survey 
would require Participating Carriers to report additional data elements 
for each reported Ticketed Itinerary. The proposed rule would also 
require Participating Carriers to report 100 percent of all Ticketed 
Itineraries for travel involving a U.S. point, compared to the 10 
percent sample required by the current rule, and to report those 
itineraries monthly rather than quarterly. However, even though the 
reporting frequency and total volume of reported data for a 
Participating Carrier would increase under the proposed rule, we 
believe that the total annual reporting burden for individual Carriers 
will decrease.
    For example, in 1997, as part of the Rural Airfare Study (Federal 
Aviation Administration Reauthorization Act of 1996, Section 1213; Pub. 
L. 104-264), the Department estimated the average annual cost to 
carriers to comply with data submissions of the Rural Airfare Study 
\12\ at approximately 113 hours per carrier (Docket OST-1997-2767-1; 
Order 97-7027, July 28, 1997). We recognize that the costs of 
submitting 100 percent of Ticketed Itineraries and incorporating the 
proposed additional data items would be higher than the costs of 
submitting monthly Rural Airfare study itineraries. However, we also 
believe that costs to Participating Carriers under the proposed rule 
would be lower than those costs under the current rule.
---------------------------------------------------------------------------

    \12\ Federal Aviation Administration Reauthorization Act of 
1996, Section 1213 (Pub. L. 104-264).
---------------------------------------------------------------------------

    We estimate that the total annual reporting burden for individual 
Participating Carriers would decrease from 960 hours (current rule) to 
720 hours (proposed rule), a total decrease of 240 hours per year per 
Participating Carrier compared to our 2003 OMB estimate. While this 
estimation seems counter-intuitive, we believe that such savings are 
possible. We attribute the 240 hour per year reduction in annual 
reporting burden for an individual Participating Carrier to (1) the 
designation of Issuing Carrier, rather than Operating Carrier, as 
Participating Carrier (192 hours) and (2) the more efficient process by 
which Issuing Carriers will report 100 percent of Ticketed Itineraries 
in monthly, rather than quarterly, submissions (48 hours).
    As discussed in Section C.1. (Need for Data Modernization: 
Background), under the current rule, the level of effort required by an 
Operating Air Carrier to identify whether it is the first Participating 
Carrier in the itinerary is complex and time-consuming. If the first 
Participating Carrier is not the Issuing Carrier and did not receive 
that sale information, then the Participating Carrier is required to 
employ staff to locate that lifted flight coupon. This is an intensely 
manual process, and it is a significant burden on limited human and 
financial resources of the Operating Carrier. Employees with the skills 
needed to extract information from visual examination of a lifted 
flight coupon have become increasingly scarce.
    On any given day, tens of thousands of passengers fly on commuter 
carriers and foreign air carriers operating under

[[Page 8185]]

code-share agreements. As a result of code-share ticketing procedures, 
the identity of the Operating Air Carrier is often hidden from an 
outside observer. When the Issuing Carrier does not provide the 
itinerary details to the Operating Air Carrier, via a TCN record or 
other means, then it is difficult for the Operating Air Carrier to 
determine whether any of the other Carriers whose Airline Designator 
appears on the ticket as the Marketing Carrier is scheduled to operate 
the flight. The industry has evolved into Code-Share agreements between 
Franchise Code-Share Partners and Mainline Partners, wherein the 
Mainline Partner holds the itinerary information yet the current rule 
holds the Franchise Code-Share Partner responsible for reporting the 
Ticketed Itinerary. The current rule, in effect, requires a Mainline 
Partner to prepare multiple O&D Survey reports because it must prepare 
one for itself and one for each Franchise Code-Share Partner.
    We believe that the proposed designation of the Issuing Carrier as 
the Participating Carrier will result in significantly less manual 
intervention, matching, and processing than is required under the 
current rule. Participating Carriers will report those Ticketed 
Itineraries that they themselves issued and for which they have full 
information present in their internal systems. Removing the need for 
Mainline Partners to prepare O&D Survey reports for their Franchise 
Code-Share Partners is the reason why data can be gathered from 13 
fewer Carriers without loss of information from missing Ticketed 
Itineraries. We therefore estimate that each Currently Participating 
Carrier will see a reduction in its annual reporting burden of 192 
hours per year. Under the proposed reporting frequency, this equates to 
a reduction of 16 hours per month. Similarly, we estimate a Newly 
Participating Carrier's annual reporting burden to be equal to that of 
a Currently Participating Carrier.
    We further anticipate that the costs of incorporating the proposed 
additional data elements are included in the initial reporting costs 
associated with the configuration of the reporting system. In addition, 
under the current rule, Participating Carriers are required to submit a 
10 percent sample of Ticketed Itineraries using specific sampling 
methods (49 U.S.C. Part 241 Section 19-7, Appendix A). We believe that 
the burden to a Carrier of extracting the prescribed 10 percent sample, 
particularly for Carriers that do not use ticket numbers, is greater 
than that of generating a dataset containing the full universe of 
tickets. We therefore expect that the incremental costs of reporting 
100 percent of Ticketed Itineraries, rather than a specified 10 percent 
sample of Ticketed Itineraries, will be extremely small and that the 
total costs of electronically submitting 12 monthly reports should be 
very similar to the total costs of electronically submitting 4 
quarterly reports.
    Identifying the specific cost savings or cost increases associated 
with each of these issues is complex. However, we note that changes 
within the industry itself, as well as changes in Carriers' internal 
data processing systems, often yield considerable savings in the annual 
reporting burden. In its 2000 submission to OMB (65 FR 19961; April 13, 
2000), the Department estimated a 200-hour per year per carrier, or 17 
percent, reduction in annual reporting burden, from 1,152 hours to 952 
hours. This estimated burden reduction was based on conversations with 
several large U.S. Air Carriers.
    As part of our outreach activities, we spoke with the majority of 
U.S. Air Carriers about their current internal sales, accounting, and 
reservations systems and about their system requirements. These 
discussions were based, in part, on the comments we received in 
response to the ANPRM. As a result of these conversations, we estimate 
that these proposed changes--more data elements reported more 
frequently for all Ticketed Itineraries--to the O&D Survey, when 
combined with the processing changes inherent in the new reporting 
systems, are unlikely to result in cost increases and are more likely 
to yield relatively small savings. We estimate these savings to be 48 
hours per year, or 4 hours per month, per Participating Carrier.
    In its most recent submission to OMB (68 FR 49543; August 13, 
2003), the Department estimated an average annual hourly burden of 960 
hours per Participating Carrier. This is an increase of 8 hours per 
year over the estimate submitted to OMB in 2000 and was based on the 
changed mix of reporting carriers (several smaller Carriers ceased 
reporting, thus increasing the average reporting burden for all 
Carriers). We make no adjustments to the average burden based on the 
mix of Participating Carriers because, although four small carriers are 
Newly Participating Carriers under the proposed rule, four of the 
Formerly Participating Carriers are also small Carriers. We define a 
small Carrier as a entity employing 1,500 or fewer employees (Air 
Passenger Carriers, Scheduled; NAICS Code 481111; SAIC Code 4512), as 
specified by the Small Business Administration's Table of Small 
Business Size Standards.
    We therefore anticipate that the annual reporting burden for 
Participating Carriers, under the proposed rule, of preparing and 
submitting monthly O&D Survey data sets containing the proposed data 
elements and 100 percent of Ticketed Itineraries would not exceed 720 
hours on an annual basis for each Participating Carrier. The resulting 
annual reporting cost per Participating Carrier would be approximately 
$11,232 (based on an estimated industry salary rate of about $15.60 per 
hour \13\). These estimated costs are based on staff hours only and do 
not include estimates for materials or other resources. We seek comment 
about the methods used to determine these annual reporting costs under 
the proposed rule.
---------------------------------------------------------------------------

    \13\ The average hourly wage for the industry was estimated to 
be $10.40 in 1997 (See 62 FR 6718, February 13, 1997). While wages 
have, in general, increased over the past seven years, many 
employees in the airline industry have experienced wage reductions 
and concessions. We therefore estimate the average hourly wage for 
the airline industry today to be $15.60 (a 50% increase over the 
1997 average hourly wage).
---------------------------------------------------------------------------

    Reporting Burdens for Participating Carriers. Under the proposed 
O&D Survey, we estimate a total initial reporting burden for all 38 
Participating Carriers of $1,488,520, or 27,064 hours. We estimate a 
total annual reporting burden for all 38 Participating Carriers of 
$426,016, or 27,360 hours. Tables 8 and 9 (below) break out the 
reporting costs for Participating U.S. Air Carriers and Participating 
Foreign Air Carriers.

[[Page 8186]]



                                      Table 8.--Estimated Reporting Costs for Proposed O&D Survey U.S. Air Carriers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Initial reporting costs                         Annual reporting costs
                                                         -----------------------------------------------------------------------------------------------
                                                             Hours per                                       Hours per
                                                              carrier       Total hours     Total cost        carrier       Total hours     Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
21 Currently Participating U.S. Air Carriers............             694          14,574        $801,570             720          15,120        $235,872
4 Newly Participating U.S Air Carriers..................             867           3,468         190,740             720           2,880          44,928
25 Participating U.S. Air Carriers......................  ..............          18,042         992,310             720          18,000         280,800
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Table 9.--Estimated Reporting Costs for Proposed O&D Survey Foreign Air Carriers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Initial reporting costs                         Annual reporting costs
                                                         -----------------------------------------------------------------------------------------------
                                                             Hours per                                       Hours per
                                                              carrier       Total hours     Total cost        carrier       Total hours     Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
13 Currently Participating Foreign Air Carriers.........             694           9,022        $496,210             720           9,360        $146,016
0 Newly Participating Foreign Air Carriers..............             867               0               0             720               0               0
13 Participating Foreign Air Carriers...................  ..............           9,022        $496,210             720           9,260         146,016
--------------------------------------------------------------------------------------------------------------------------------------------------------

    ii. Regulatory Assessment--Benefits. The proposed rule (1) Expands 
the number of data elements reported on the O&D Survey, (2) expands the 
number of annual data submissions of the O&D Survey from four 
(quarterly) to twelve (monthly), and (3) expands the number of O&D 
Survey records reported by an individual carrier from a ten percent 
sample to the full universe of Ticketed Itineraries involving a U.S. 
point. Our initial regulatory assessment indicates that the benefits of 
the expanded information that would be collected under the proposed 
rule would accrue to the Department, other Federal government agencies 
and offices, Carriers, airports, and other stakeholders. These benefits 
substantially outweigh the additional costs associated with the initial 
reporting burden of reconfiguring existing, or obtaining new, systems 
to report the proposed O&D Survey.
    The first benefit is associated with a reduction in annual hourly 
reporting burden. Under the proposed rule, a Currently Participating 
Carrier will see a 240-hour per year reduction in its annual hourly 
reporting burden, from 960 hours to 720 hours (See Section L.3.d.1.). 
The second benefit is the reduction in the set of Participating 
Carriers. Because the proposed rule designates the Carrier that issued 
the Ticketed Itinerary as the Participating Carrier, nine, or 
approximately 19 percent, fewer Carriers will submit the O&D Survey 
under the proposed rule. That is, under the proposed rule, fewer 
Participating Carriers with reduced annual burdens would provide more 
detailed information than is available under the current rule. Other 
benefits are likely as well.
    The change in reporting time frame will benefit reporting carriers 
by providing key industry data in a more timely fashion. We are 
proposing that data be disseminated as discussed in Section K.--Data 
Dissemination. Furthermore, data will be available by month of travel, 
rather than quarter of first travel, enabling a more fine-grained 
assessment of travel demand.
    As discussed in Sections D.1. and D.2., a number of agencies within 
the Department, other Federal agencies, and other stakeholders rely on 
timely and accurate aviation data when making a variety of policy and 
business decisions. Monthly data releases will enhance both the 
usefulness and quality of the O&D Survey. That is, users will be able 
to assess travel at the monthly level, facilitating more precise 
analyses. Monthly data further clarify the changes in traffic flows due 
to seasonality, Carrier route changes, and preferred Carrier. O&D 
Survey data used in international negotiations would be more timely 
(i.e., at most three months old) and aid the U.S.' position in these 
sensitive negotiations.
    Monthly O&D submissions will enable the Department to respond more 
quickly to errors, late submissions, and other data quality concerns. 
In addition, because of the changes that are being considered for the 
T-100/T-100(f), monthly O&D submissions could be validated against 
monthly T-100/T-100(f) submissions. Carriers utilize these data to plan 
their businesses, accurately forecast potential new services, and, for 
new entrants, devise more accurate business plans based on real 
industry demand data. Moving to monthly O&D Survey reporting and 
dissemination enhances the air carriers' access to this critical 
information. Furthermore, in their responses to the ANPRM, a number of 
Carriers recommended more timely reporting and more frequent 
availability of the data.
    Carriers rely not only on timely data but also on detailed 
information to create more efficient and competitive markets, as well 
as to estimate the impact of new services at alternative airports. We 
believe that the proposed new data elements will provide valuable 
additional data for Carriers as they evaluate market entry and exit. 
Other stakeholders, discussed in Section D.3., also rely on these data.
    The Department has been reporting Directional Passenger trips in 
the O&D Survey as the best substitute for True O&D since the inception 
of the O&D Survey. The additional data elements will enable the 
department to report True O&D according to the One-way Trip methodology 
widely used in the industry. This provides a much closer approximation 
to the True O&D than did the Directional Passenger trip methodology.
    Flight arrival and departure times will provide a more accurate and 
useful view of passenger air travel. Similarly, the proposed change 
from a Directional Passenger to a One-way Passenger (See Section K.2.--
Data Dissemination: Proposed Construction of One-way Trips) will enable 
the FAA and TSA to more effectively plan airport staffing requirements. 
The identification of passengers as traveling through an airport versus 
deplaning and remaining will support airport facility planning.

[[Page 8187]]

State and local transportation planners could also use this information 
for planning purposes.
    Periodically, the Department has requested special data submissions 
from Carriers because national economic interests are at stake, but the 
O&D Survey and T-100/T-100(f) do not provide the requisite information. 
The 2003 SARS outbreak was one such instance. The war in Iraq is 
another example of a time when the Department has requested more 
detailed data. Responses to special requests for data, such as the 
previous examples, are costly in terms of time and other resources. The 
more robust data gathered by the O&D Survey and the T-100 under the 
proposed rule would largely eliminate the need for such requests.
    The increase in the volume of data to be reported under the 
proposed rule will result in substantial benefits to Carriers as well 
as other stakeholders. Carriers currently must generate samples meeting 
the specific requirements of 14 CFR Section 19-7, Appendix A. The 
complex sampling methodology introduces the likelihood of sample 
errors. Furthermore, Carriers themselves have chosen more simplistic 
reporting processes when available. For example, although the 
Department permitted alternative sampling methodologies beginning in 
April 1986, such as sampling at least one percent of Ticketed 
Itineraries in major domestic markets, all Carriers reporting the O&D 
Survey have decided that the simplicity of using a single reporting 
selection criterion outweighs any savings that might accrue from 
sending the smaller volume of data. Similarly, we expect the process of 
submitting 100 percent of Ticketed Itineraries will be simpler and more 
efficient than the creation of more complex sampling techniques, such 
as stratified sampling or oversampling, intended to capture more 
representative samples of all markets, despite the larger volume of 
data.
    The proposed changes will also reduce the burden of reporting for 
Participating Carriers by bringing the responsibility to report a 
Ticketed Itinerary into alignment with standard global Carrier 
accounting practices. These practices are based on the presumption that 
the Issuing Carrier has all the necessary information to report a 
Ticketed Itinerary; therefore, the Participating Carriers will 
generally be self-sufficient and able to report the itinerary.
    Many Carriers can appear as Operating Carriers on a Ticketed 
Itinerary, but only one Carrier is the Issuing Carrier. When there are 
multiple Operating Carriers in an itinerary, the second and subsequent 
Operating Carriers cannot know with certainty whether the first 
Operating Carrier reported the itinerary. There is a considerable 
burden placed on Operating Carriers in the current methodology to 
determine whether or not they have a responsibility to report any given 
multiple-Carrier itinerary. The proposed change in Participating 
Carrier dramatically lowers the burden to report by shifting the 
reporting responsibility to the Carrier that issued the Ticketed 
Itinerary and away from the Carrier that transported the passenger. 
This change will reduce the burden of reporting for Participating 
Carriers because it eliminates ambiguity.
    Currently, if Carriers operate no aircraft with more than 60 seats, 
they are exempt from reporting. Since 1993, at least one carrier has 
gone from non-reporting (operating no aircraft with more than 60 seats) 
to reporting (operating some aircraft with more than 60 seats) to non-
reporting (ceasing operation of all aircraft with more than 60 seats). 
As Carriers reconfigure existing equipment or increase their use of 
smaller aircraft, the threshold of 60 seats excludes Ticketed 
Itineraries that provide critical information about passenger air 
travel and fares. For example, the commencement of operations by 
Independence Air in June 2004 caused a profound adjustment of fares in 
small, medium and large markets in the Eastern half of the U.S. 
However, because Independence Air does not currently operate aircraft 
with more than 60 seats, it does not have to report O&D Survey data, 
thereby resulting in an incomplete picture of the effects of this 
Carrier's start of operations. When a major realignment of fares can 
result from the actions of a Carrier that qualifies for the small 
aircraft size exemption, then the small aircraft size exemption must be 
reevaluated.
    When passengers fly their entire itineraries on smaller Carriers 
that are not required to report the O&D Survey, their travel will not 
be included under the existing system. Yet, their participation in the 
air transportation system is significant. By requiring all U.S. Air 
Carriers issuing tickets for travel to or from, or within, the U.S. 
operating aircraft with 15 or more seats to report O&D Survey data, the 
resulting passenger traffic database will contain the majority of 
Ticketed Itineraries issued by U.S. Air Carriers. The resulting data 
will capture the increasing role played by regional jets and regional 
Carriers in the domestic air transportation system.
    EAS and the Small Community Air Service Development Program are 
directed towards smaller markets and require evaluation of service and 
fares. The Department's statutory responsibility to adapt the air 
transportation system to the present and future needs of commerce is 
much more extensive than the needs of the EAS program. Because these 
markets are inadequately represented in the current O&D Survey, the 
Department's mandate requires a disproportionately high amount of time 
and interest in studying markets with lower than average traffic. By 
requiring Participating Carriers to submit 100 percent of Ticketed 
Itineraries, the Department will have more accurate and reliable data 
for small markets impacted by Federal programs. The Department will 
also be able to compare data for small markets served by EAS or the 
Small Community Air Service Development Program with similar small 
markets that are not direct beneficiaries of these programs.
    We seek to capture the complex interrelationships between Operating 
Carrier, Marketing Carrier, and Issuing Carrier. The reduced ambiguity 
obtained by requiring the Issuing Carrier to report the Ticketed 
Itinerary should eliminate the possibility that an itinerary will not 
be reported. In addition, the Issuing Carrier will have all of the 
necessary data present in its internal systems, maximizing the 
efficiency and accuracy of data reporting. The increasing role played 
by code-share agreements will be represented in the O&D Survey.
    The benefits to all Carriers and all other stakeholders accrue from 
the first dissemination of data. Participating Carriers will have 
access to aggregated monthly data (See Section K--Data Dissemination) 
for the full universe of Ticketed Itineraries issued by Participating 
Carriers. Other stakeholders would also have access to more timely and 
more complete data.
    The overall annual reporting burden for the 34 currently 
Participating Carriers decreases by 8,160 hours and $127,296. Although 
we are asking four U.S. Air Carriers to begin reporting the O&D Survey, 
the proposed rule will no longer require 13 U.S. carriers to report. 
The annual savings for those 13 carriers are estimated to be 12,480 
hours and $194,688. These savings are 433 percent greater than the 
total estimated annual reporting cost for the four newly Participating 
U.S. Air Carriers.
    Although the initial reporting burden for the 38 Participating 
Carriers is approximately $1.49 million, the number of Participating 
Carriers will decrease. Under the current rule, 47 Participating 
Carriers have a collective

[[Page 8188]]

annual reporting burden of 45,120 hours. The 38 Participating Carriers 
would, under the proposed rule, have a collective annual reporting 
burden of 27,360 hours. The proposed rule, therefore, decreases the 
annual reporting burden by approximately 39%. That is, collectively, 
the 38 Participating Carriers would expend 17,760 hours per year less 
under the proposed rule. In the first year, these Participating 
Carriers face a one-time initial reporting burden of 27,260 hours.
    We seek comment about these, and other, benefits that would accrue 
to any or all stakeholders as a result of the proposed rule.
e. Regulatory Analysis--T-100/T-100(f)
    We are considering changes to the set of data elements reported 
under the T-100/T-100(f). These changes would not affect the definition 
of Reporting Carrier in 14 CFR Part 217 Section 217.3 and 14 CFR Part 
241 Section 19-1. However, because the data elements being considered 
are flight-specific and are associated with scheduled passenger air 
transportation, all-cargo Carriers would not be affected by the 
proposed rule. Should we adopt the changes to the T-100/T-100(f) 
discussed in this NPRM, the remaining 230 Currently Reporting Carriers 
would be affected. Accordingly, although we are only considering, and 
not proposing, the additional data items for the T-100/T-100(f), we 
include estimates of the cost to Reporting Carriers (U.S. Air Carriers 
and Foreign Air Carriers) of including the data elements in their T-
100/T-100(f) submissions.
    i. Regulatory Assessment--Costs. For the 230 Currently Reporting 
Carriers, we estimated (1) the initial costs of revising the reporting 
systems to include the new data items being considered and (2) the 
annual costs of submitting the additional data elements that are being 
considered. The changes being considered do not change the reporting 
requirements and do not expand the set of Reporting Carriers; 
therefore, no estimates are made for Newly Reporting Carriers.
    We estimate the total initial reporting costs for the changes being 
considered for the T-100/T-100(f) for all Currently Reporting Carriers 
to be approximately $1.52 million, of which approximately $799,000 
would be expended by Currently Reporting U.S. Air Carriers. We estimate 
the annual reporting costs for the changes being considered for the T-
100/T-100(f) for all Currently Reporting Carriers to be approximately 
$387,504, of which approximately $203,861 would be expended by 
Currently Reporting U.S. Air Carriers. The incremental cost of the 
changes being considered for the T-100/T-100(f) is approximately 
$86,000 for all Currently Reporting Carriers.
    We recognize that the initial and annual reporting costs of 
individual Reporting Carriers are likely to differ and, for some 
Reporting Carriers, may be smaller than our estimates. Nevertheless, we 
have applied a single cost estimate in our regulatory assessment. In 
the past, the Department has provided to Reporting Carriers software to 
enable reporting of the T-100/T-100(f). Because the Department has not 
yet determined whether the modifications necessary under the proposed 
rule would be made to Department-provided T-100/T-100(f) reporting 
software, we do not assume that modified software would be made 
available to Reporting Carriers.
    We recognize that some Reporting Carriers may choose to utilize 
third-party providers, for the initial system reconfiguration or for 
monthly data submission but we do not include estimates of third-party 
provider costs in this regulatory assessment. We are aware that third-
party providers already serve the airline industry with systems that 
collect, bundle, process, and transfer data between Carriers and 
between Carriers and the Department. Thus, third-party providers may 
choose to customize or adjust existing data systems, already used by 
Reporting Carriers, to meet T-100/T-100(f) submission requirements if 
the changes being considered are adopted. We assume Reporting Carriers 
would select this option only if its costs were lower; as such, it is 
possible that Reporting Carriers that decide to use third parties would 
incur lower costs than those we have estimated. We seek comment about 
the costs and benefits of the use of third-party providers for 
submission of the T-100/T-100(f) should the changes we are considering 
be adopted.
    Initial Reporting Burden. Currently Reporting Carriers will incur 
an initial reporting burden, based on the system changes that would be 
required to add the two data elements we are considering adding to the 
current T-100/T-100(f). However, should we adopt the changes being 
considered, Currently Reporting Carriers are expected to have these 
data elements within their internal systems and, therefore, we 
anticipate that Reporting Carriers would be able to access the data 
elements.
    We anticipate that, if the changes we are considering are adopted, 
the Currently Reporting Carriers would create supplemental automated 
processes to produce the expanded T-100/T-100(f) to access the 
additional data elements. The Department had previously (Docket OST-
1996-1049-2) estimated that the addition of two capacity data items, 
available seats and available payload capacity, would not be an 
unreasonable burden because the data elements were not difficult to 
calculate or determine and were readily available to all air carriers 
through computer access. We believe the data elements that we are 
considering, Master Flight Number and flight date, should also be 
readily available to Carriers.
    The cost to link the sources of Master Flight Number and flight 
date to Currently Reporting Carriers' existing T-100/T-100(f) reporting 
systems will be based on a number of factors, including the current 
level of integration of individual Carriers' systems. We believe that 
this cost would be significantly less than the cost estimated for the 
one-time changes to the O&D Survey reporting systems. We therefore 
estimate that Reporting Carriers would require, should the changes we 
are considering be adopted, the equivalent of two work weeks \14\ of 
internal development and testing and one work week of external testing 
and coordination with the Department, for a total of three work weeks, 
or 120 staff hours, to incorporate the changes into their systems.
---------------------------------------------------------------------------

    \14\ One work week = 40 hours.
---------------------------------------------------------------------------

    Under the Service Contract Act of 1965 (as amended), the U.S. 
Department of Labor establishes the minimum hourly rate, excluding 
benefits, for Federal Contracts. In 2004, DOL estimated an hourly rate 
of $27.62 per hour for the positions of Computer Programmer IV and 
Computer Systems Analyst III. \15\ We recognize that the carriers' 
hourly costs are likely to be higher, particularly for skilled 
employees with specialized knowledge of aviation data and reporting. 
Thus, we estimate an industry hourly cost for a computer programmer/
analyst of $55.00 per hour.
---------------------------------------------------------------------------

    \15\ Source: http://www.procurement.irs.treas.gov/tirno04r00005/amend04/wage_determination.txt. Although these rates are for West 
Virginia, they are the most recent wages established by the 
government and are comparable, in the past, to rates assigned to 
other states and districts. We believe that they represent an 
accurate estimate of wages for this set of positions, effective in 
2004. Furthermore, we do adjust the wages for this employment 
category to reflect the specialized requirements of the airline 
industry.
---------------------------------------------------------------------------

    Given these assumptions, we estimate that, should the changes we 
are considering making to the T-100/T-100(f) be adopted, the initial 
reporting cost for the revised T-100/T-100(f) would be $6,600, or 120 
hours, per

[[Page 8189]]

Currently Reporting Carrier. This estimated cost is based on staff 
hours only, and does not include estimates for materials or other 
resources. We seek comment about the methods used to determine the 
initial reporting cost under the changes being considered for the T-
100/T-100(f).
    Annual Reporting Burden. The current structure of the T-100/T-
100(f) Market file groups traffic data by carrier, entity, Origin, 
Destination, and service class. The current structure of the T-100/T-
100(f) Segment file further groups traffic data by aircraft type. The 
total number of records reported for each file type is dependent upon 
the extent to which traffic data can be grouped during the reporting 
period.
    Hypothetically, in a given 31-day month, a Carrier operates one 
daily flight with one service class between a particular Origin Airport 
and Destination Airport. Under the current T-100/T-100(f) it would 
report one Market record summarizing the traffic data for that Carrier, 
entity, Origin, Destination, and service class for the entire month. It 
would report the number of Segment records corresponding to the 
different numbers of aircraft types used to service that route in that 
month. If the Carrier used only one aircraft type, it would report one 
Segment record. If it used two different aircraft types, it would 
report two Segment records, and so forth, for a maximum of 31 Segment 
records.
    In the final rule adopting the T-100/T-100(f) reporting system (53 
FR 46294, November 16, 1988; Referenced in Docket OST-96-1049-13), the 
Department estimated that the reporting burden for the entire T-100/T-
100(f) system would vary between one hour and 20 hours per month per 
Reporting Carrier, with an average of seven hours per monthly response. 
Therefore, submitting Segment records and Market records, grouped as 
described above, takes an average of seven hours per month, or 84 hours 
per year, per Reporting Carrier.
    The changes that we are considering making to the T-100/T-100(f) 
would group Market records and Segment records by Master Flight Number 
and flight date, expanding the total number of records reported. As in 
the previous example, for a 31-day month, a hypothetical Carrier 
operates one daily flight, with a single Master Flight Number, with one 
service class, between a particular Origin Airport and Destination 
Airport. For that month, because there are 31 flight dates for that 
Master Flight Number, the Carrier would report 31 Market records 
(grouped by carrier, entity, Origin, Destination, service class, Master 
Flight Number, and flight date). It would report 31 Segment records 
(grouped by carrier, entity, Origin, Destination, service class, 
aircraft type, Master Flight Number, and flight date).
    The estimated increase in annual reporting costs, for Currently 
Reporting Carriers, associated with the changes we are considering 
making to the T-100/T-100(f) is based on the increased costs to 
identify, store, and transmit records that are specific by Master 
Flight Number and flight date. We anticipate that these costs would be 
reduced through efficient reporting systems. We incorporate that 
assumption into our estimates of the initial reporting costs that 
Currently Reporting Carriers would incur if the changes we are 
considering are adopted. We therefore estimate that the monthly 
reporting would increase by 2 hours per month, or 24 hours per year, 
for a total of 9 hours per month, or 108 hours per year.
    Given these assumptions, we estimate the annual reporting cost for 
the T-100/T-100(f) would increase by $375, or 24 hours, per Currently 
Reporting Carrier if the changes we are considering are adopted. This 
estimated cost is based on staff hours only and does not include 
estimates for materials or other resources. We therefore anticipate 
that the annual reporting burden for Reporting Carriers, should the 
changes we are considering be adopted, of preparing and submitting 
monthly T-100/T-100(f) data sets containing the additional data 
elements would average 108 hours, or approximately $1,685 (based on an 
estimated industry salary rate of about $15.60 per hour \16\), per 
Currently Reporting Carrier. These estimated costs are based on staff 
hours only and do not include estimates for materials or other 
resources. We seek comment about the methods used to determine these 
annual reporting costs given the changes we are considering making to 
the T-100/T-100(f).
---------------------------------------------------------------------------

    \16\ The average hourly wage for the industry was estimated to 
be $10.40 in 1997 (See 62 FR 6718, February 13, 1997). While wages 
have, in general, increased over the past seven years, many 
employees in the airline industry have experienced wage reductions 
and concessions. We therefore estimate the average hourly wage for 
the airline industry today to be $15.60 (a 50% increase over the 
1997 average hourly wage).
---------------------------------------------------------------------------

    Reporting Burden for Reporting Carriers. We are considering the 
addition of two data elements to the T-100/T-100(f). Should those 
changes be adopted, we estimate a total initial reporting burden for 
the 230 Currently Reporting Carriers of $1,518,000, or 27,600 hours. We 
further estimate that adoption of the changes being considered would 
result in an annual reporting burden for all 230 Reporting Carriers of 
24,840 hours, or $387,504. This is an increase of 5,520 hours, or 
approximately $86,000. In Tables 10 and 11, below, we break out the 
initial reporting costs and annual reporting costs for U.S. Air 
Carriers and Foreign Air Carriers.

                                     TABLE 10.--Estimated Reporting Costs for Changes Being Considered for the T-100
                                                                   [U.S. Air Carriers]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Initial reporting costs                             Annual reporting costs
                                                   -----------------------------------------------------------------------------------------------------
                                                       Hours per                                          Hours per
                                                        carrier        Total hours       Total cost        carrier        Total hours       Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
121 Currently Reporting U.S. Air Carriers.........             120           14,520         $798,600              108           13,068         $203,860
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 8190]]


                                   TABLE 11.--Estimated Reporting Costs for Changes Being Considered for the T-100(f)
                                                                 [Foreign Air Carriers]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Initial reporting costs                             Annual reporting costs
                                                   -----------------------------------------------------------------------------------------------------
                                                       Hours per                                          Hours per
                                                        carrier        Total hours       Total cost        carrier        Total hours       Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
109 Currently Reporting Foreign Air Carriers......             120           13,080         $719,400              108           11,772         $183,643
--------------------------------------------------------------------------------------------------------------------------------------------------------

    iii. Regulatory Assessment--Benefits. We recognize that, by 
considering the collection of T-100/T-100(f) data by Master Flight 
Number and flight date, we would increase the total number of records 
to be submitted by Current Reporting Carriers. However, the addition of 
Master Flight Number and flight date would enable the T-100/T-100(f) to 
continue to be used to verify the O&D Survey. The proposed data 
elements will improve the quality and use of traffic data in decision 
making by enabling a maximum congruence between the T-100/T-100(f) and 
the O&D Survey. As such, it supports the benefits associated with the 
proposed changes to the O&D Survey (Section L.3.d.2). The changes being 
considered for the T-100/T-100(f) would, through data specific to 
Master Flight Number and flight date, provide additional information 
for airport and air traffic control planning. Stakeholders would have 
information about aircraft size, number of passengers, and flow of 
passengers and aircraft by time of day.

4. Regulatory Flexibility Act of 1980, Small Business Regulatory 
Enforcement Fairness Act of 1996, Executive Order 13272

    The Regulatory Flexibility Act (RFA) of 1980 (Pub. L. 96-354; 94 
Stat. 1164; codified at 5 U.S.C. 601) requires agencies to consider the 
impact of their regulatory proposals on small entities, analyze 
effective alternatives that minimize the impact on small entities, and 
make their analyses available for public comment. It does not, however, 
seek preferential treatment for small entities, require agencies to 
adopt regulations that impose the least burden on small entities, or 
mandate exemptions for small entities.
    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 amended the Regulatory Flexibility Act of 1980. The Department has 
established a Guidance Manual on SBREFA.
    Executive Order 13272 (67 FR 52462, August 16, 2002) requires each 
agency to establish written procedures and policies to promote 
compliance with the Regulatory Flexibility Act and to ensure that 
potential impacts of draft rules on small entities will be properly 
considered. The Department has established Policies and Procedures for 
Implementing Executive Order 13272. We define a small Carrier as an 
entity employing 1,500 or fewer employees (Air Passenger Carriers, 
Scheduled; NAICS Code 481111; SAIC Code 4512), as specified by the 
Small Business Administration's Table of Small Business Size Standards.
a. Affected Businesses
    The changes we are considering making to the T-100/T-100(f) would 
affect all Air Carriers that are required to report the T-100/T-100(f) 
under the current rule. The definition of Reporting Carrier is not 
affected by the possible changes. Previous changes to the T-100/T-
100(f) were expected to affect approximately 100 small entities, and 
were certified as not having a significant economic impact on a 
substantial number of small entities (Docket OST-1998-4043; 67 FR 
49217, July 30, 2002). Therefore, we believe that, if the changes we 
are considering making to the T-100/T-100(f) are adopted, there will 
likely be no significant economic impact on a substantial number of 
small entities.
    The proposed changes to the O&D Survey would affect all Carriers 
operating aircraft with 15 or more seats and issuing tickets for travel 
on scheduled interstate passenger services to or from, or within, the 
U.S. Four small entities would cease to report the O&D Survey, while 
four different small entities would begin to report the O&D Survey. 
Small entities represent 9.5 percent of Participating Carriers under 
the proposed rule, and 100 percent of Newly Participating Carriers 
under the proposed rule. Our proposed rules do contain direct 
reporting, recordkeeping, or other compliance requirements that would 
affect small entities. However, the Department cannot exempt all small 
carriers from reporting the passengers they carry without jeopardizing 
the completeness and accuracy of the traffic statistics. Small entities 
are integrated into the fabric of the global aviation industry. Many 
passengers carried by large U.S. Air Carriers begin their journeys on 
small Carriers. Exemption of that category of Ticketed Itineraries from 
reporting affects the integrity of the statistical data and would 
affect some markets disproportionately, thereby introducing bias into 
the data. The Department believes that the best way to minimize the 
negative effects of regulation on small entities is to correct the 
Department's reliance on Directional Passengers, change the reporting 
responsibility to the Issuing Carrier, and obtain information about 100 
percent of Ticketed Itineraries.
    Small entities benefit from cost-effective access to better 
information that is critical to making sound business decisions. Small 
entities are more dependent on the Department's data than are larger 
competitors which can afford alternative data sources. However, all 
Carriers must be confident that the statistical and financial data 
disseminated by the Department measure the industry accurately. The 
Department must use the correct metrics to reflect the global airline 
industry and must disseminate industry statistics in ways that are 
useful and understandable for all stakeholders. The proposed changes to 
the O&D Survey and the changes being considered for the T-100/T-100(f) 
will increase the efficiency of all Carriers. More complete data reduce 
the need for supplemental reports and specialized data processing, 
which are a greater burden to smaller Carriers. Our new rules would 
also benefit most Carriers because, within confidentiality constraints, 
all Carriers will have access to data that accurately and completely 
reflect the state of the airline industry, including traffic and 
operating data. More timely data submission (by carriers) and data 
dissemination (by the Department) will enhance the usefulness of the 
collected data. Furthermore, small entities will benefit from complete 
(e.g., 100 percent) data for the markets they themselves serve.
    Section 213(a) of SBREFA requires the Department to assist small 
entities in understanding the proposed rule so that they can better 
evaluate its effects of them and participate in the rulemaking process. 
We encourage small entities to

[[Page 8191]]

contact Richard Pittaway at the address listed under FOR FURTHER 
INFORMATION CONTACT with any questions about the proposed rule, its 
provisions, or options for compliance.
b. Initial Regulatory Flexibility Statement
    We do not anticipate that the changes we are considering making to 
the T-100/T-100(f) will have a significant economic impact on a 
substantial number of small businesses. Although we anticipate that the 
proposed changes to the O&D Survey, and therefore the proposed rule, 
may have a significant economic impact on the four small entities that 
will become Newly Participating Carriers, we believe that the benefits 
gained by all small entities, including these four Carriers, offset the 
additional costs. Because four small entities will become Participating 
Carriers while four other small entities will no longer be required to 
report the O&D Survey, we believe that the net impact of the proposed 
rule is relatively small. Accordingly, I certify that the proposed rule 
will not have a significant economic impact on a substantial number of 
small entities. Interested persons may address our conclusions under 
the Regulatory Flexibility Act in their comments submitted in response 
to this notice of proposed rulemaking.
c. O&D Survey
    Inherent in the RFA is a desire to remove barriers to competition. 
New entrant competitors are the lifeblood of the airline industry, 
bringing innovations and new business concepts to the marketplace. 
Within the aviation sector, small entities are disadvantaged relative 
to larger entities. Large carriers have the resources and longevity to 
research and develop markets using costly information independent of 
the statistical data disseminated by the Federal government.
    Small and new entrant Carriers depend on the Department's traffic 
data to a greater degree in planning their businesses than do larger 
and incumbent Carriers. Inaccurate and incomplete data disseminated by 
the Department disproportionately hinders small and new entrant 
Carriers. The Regional Airline Association (Docket OST-1998-4043-11), 
an association of small and medium-sized Carriers, stated in its ANPRM 
comments that ``it is clear that for the U.S. regional airline 
industry, the current data collection process is both inappropriate and 
inconsistent. The current structure of reporting rules and regulations 
offer what the Association considers to be an approach to information 
gathering that is out of step with the current operating environment 
for regional airlines.''
    Smaller airports are also disadvantaged under the current reporting 
requirements. These airports are often predominantly served by smaller, 
non-reporting Franchise Code-Share Partners; trips taken on non-
reporting Carriers are missing from the O&D Survey data. Small airports 
that are served from only one hub are more vulnerable to circuity 
factors inappropriately identifying a break in the direction of travel. 
Even if every part of a Ticketed Itinerary were reported correctly, 
small airports would still be disadvantaged because the 10 percent 
sample is less accurate and reliable for the small number of passengers 
traveling there. Without accurate and complete scheduled passenger 
traffic data, smaller airports are less able to schedule services, 
assess facilities demand, and identify growth opportunities.
    As shown in Table 1, 38 U.S. Air Carriers will be affected by the 
proposed changes to the O&D Survey. Of the 13 formerly Participating 
Carriers (i.e., those Carriers that would no longer submit the O&D 
Survey under the proposed rule), four are considered small business 
entities under the Small Business Administration's Table of Small 
Business Size Standards. The remaining nine have more than 1,500 
employees and/or are subsidiaries of parent companies where the total 
employees are more than 1,500 employees.
    All four of the newly Participating Carriers are considered small 
business entities under the Small Business Administration's Table of 
Small Business Size Standards. Because four small entities will no 
longer be required to report, and four different small entities will 
become Participating Carriers, there is a net addition of zero small 
business entities as Participating Carriers for the O&D Survey.
    We anticipate that the proposed changes to the O&D Survey may have 
a significant economic impact on the small businesses affected. Small 
entities represent 100 percent of the newly Participating Carriers and 
9.5 percent of Participating Carriers under the proposed rule. We 
believe that the annual reporting burden will be less for smaller 
entities because they generate, process, store, and submit fewer 
Ticketed Itineraries than larger entities. However, we recognize that 
the initial reporting burden will be proportionately greater for both 
the currently participating small entities and newly participating 
small entities.
    The Department believes that the most significant reporting burden 
on small Carriers will be removed by shifting the reporting 
responsibility to the Issuing Carrier. The vast majority of small 
carriers, under the proposed system, would not be required to report 
the O&D Survey at all. Nonetheless, Carriers that issue Ticketed 
Itineraries on their own ticket stock remain a concern under SBREFA.
    The Department recognizes that the markets served by Air Taxis and 
other similarly small operations represent a significantly different 
transportation market. The Department acknowledges that passengers in 
this market must be measured differently than the passengers in the 
global air transportation market. We do not wish to burden these truly 
small carriers serving local needs and have therefore not proposed to 
require them to report data. The Department wishes to reduce the 
ambiguity in a Carrier's classification as a Participating Carrier. 
Moving into and out of the Participating Carrier classification from 
time to time is problematic for both the Carrier concerned and for the 
community of users of the O&D Survey. This ambiguity in the current 
system has had a disproportionately negative impact on smaller entities 
since they are more likely to be affected by the current reporting 
threshold. Therefore, we propose that (1) carriers only flying planes 
within a single state, (2) carriers flying no aircraft with 15 or more 
seats, (3) non-scheduled air taxi services, and (4) non-scheduled 
helicopter carriers will continue to be exempt from reporting the O&D 
Survey.
    Because small Carriers provide service to smaller markets, they 
will benefit from the additional traffic data that will be available 
under the proposed rule. EAS and the Small Community Air Service 
Development Program are directed towards smaller markets and require 
evaluation of service and fares. Under EAS, the Department determines 
the minimum level of service required at each eligible community by 
specifying a hub through which the community is linked to the global 
air transportation system, and specifying a minimum service level in 
terms of flights and available seats. Where necessary, the Department 
pays a subsidy to a Carrier to ensure that the specified level of 
service is provided. More detailed data will assist the Department in 
its allocation of funds to these programs and to eligible Carriers 
participating in them.

[[Page 8192]]

d. T-100/T-100(f)
    As shown in Table 2, 121 U.S. Air Carriers would be affected by the 
changes we are considering making to the T-100. Because the proposed 
rule makes no change in the criteria for Reporting Carrier, we conclude 
that the number of small entities that would be impacted if the changes 
we are considering making are adopted is not affected by the content of 
those potential changes. Eighty-nine of the 121 U.S. Air Carriers that 
would be affected if the changes were adopted are small entities under 
the Small Business Administration's Table of Small Business Size 
Standards. Nine of the 121 entities are subsidiaries of larger airlines 
and the total employee base is greater than 1,500. Twenty-nine of the 
121 entities have 1,500 or more employees. Of the remaining 89, 24 have 
been confirmed as having fewer than 1,500 employees and 59 are presumed 
to have fewer than 1,500 employees based on the total number of 
aircraft operated by the individual Carrier. Sources include internal 
departmental counts of Carriers' employees, the Regional Airline 
Association (http://www.raa.org/members/AirlineDirectory.htm) and 
Reference USA (http://www.referenceusa.com).
    As with the proposed O&D Survey, we believe that the annual 
reporting burden associated with the changes we are considering making 
for the T-100/T-100(f) will be less for smaller entities because they 
operate fewer flights and, therefore, generate, process, store, and 
submit fewer records than larger entities. The estimated initial 
reporting burden, assuming adoption of the changes being considered, 
would be approximately 120 hours, or $6,600 per carrier. However, we 
note that BTS has, in the past, provided T-100 reporting software to 
Carriers upon request. Small entities that have, in the past, relied 
upon BTS software to reduce or even eliminate the initial reporting 
burden associated with past changes to the T-100/T-100(f) may be able 
to continue to do so.
    Furthermore, we note that when approximately 100 small entities 
first began to report the T-100, in place of Form 298-C, Schedule T-1, 
we found that change would not have a significant economic impact on a 
substantial number of small entities (67 FR 49217, July 30, 2002). 
Therefore, we conclude that the changes we are considering making to 
the T-100/T-100(f) would not, if adopted, have a significant economic 
impact on the small businesses affected.

5. Paperwork Reduction Act of 1995

    The Paperwork Reduction Act of 1995 (Pub. L. 104-113; 5 CFR 1320.0; 
44 U.S.C. 3501 et seq.) requires each Federal agency to (1) Establish a 
process, independent of program responsibility, to evaluate proposed 
collections of information; (2) manage information resources to reduce 
information collection burdens on the public; and (3) ensure that the 
public has timely and equitable access to information products and 
services. Its purposes include (1) The minimization of the paperwork 
burden resulting from the collection of information by or for the 
Federal government; (2) ensuring the greatest possible public benefit 
from and maximization of the utility of information created, collected, 
maintained, used, shared and disseminated for or by the Federal 
government; (3) improving the quality and use of Federal information to 
strengthen decision making, accountability, and openness in government 
and society; (4) minimization of the cost to the Federal government of 
the creation, collection, maintenance, use, dissemination, and 
disposition of information; and (5) providing for the dissemination of 
public information on a timely basis, on equitable terms, and in a 
manner that promotes the utility of the information to the public and 
makes effective use of information technology.
    The proposed changes to the O&D Survey and the changes being 
considered for the T-100/T-100(f) contain collection-of-information 
requirements subject to the Paperwork Reduction Act. Under the 
Paperwork Reduction Act, a person is not required to respond to a 
collection of information by a Federal agency unless the collection 
displays a valid OMB control number. The reporting and recordkeeping 
requirement associated with this proposed rule is being sent to OMB for 
approval in accordance with the Paperwork Reduction Act, under OMB NO: 
2139-0001 (for the O&D Survey) and OMB NO. 2138-0040 (for the T-100/T-
100(f)).
    The proposed changes to the O&D Survey are estimated to reduce the 
annual reporting for U.S. Air Carriers from 960 hours per year (240 
hours per submission, with data reported quarterly) to 720 hours per 
year (60 hours per submission, with data reported monthly). In 
addition, by designating the Issuing Carrier as the Participating 
Carrier, the proposed changes to the O&D Survey are estimated to reduce 
the number of Participating U.S. Air Carriers by nine (13 U.S. Air 
Carriers would cease to report while four U.S. Air Carriers would begin 
to report). In sum, under the proposed changes to the O&D Survey, the 
collective annual reporting burden for U.S. Air Carriers is estimated 
at 18,000 hours. When Foreign Air Carriers that operate under 49 U.S.C. 
41308 and 41309 and are required, under grant of antitrust immunity, to 
report itineraries involving a U.S. point are included, the proposed 
changes to the O&D Survey are estimated to result in a collective 
annual reporting burden for the world airline industry of 27,360 hours. 
These data are detailed in Tables 8 and 9. If these changes are not 
made, the collective annual reporting burden for U.S. Air Carriers is 
estimated to be 32,640 hours and the collective annual reporting burden 
for the world airline industry is estimated to be 45,120.
    The changes that we are considering making to the T-100/T-100(f) 
are estimated to increase the annual reporting burden for Reporting 
Carriers by 2 hours per month, or a total of 24 hours per year. If we 
were to make the changes to the T-100/T-100(f) that we are considering, 
the collective annual reporting burden for U.S. Air Carriers would be 
13,068 hours and the collective annual reporting burden for the world 
airline industry would be 24,840. These data are detailed in Tables 10 
and 11. If we do not make the changes we are considering, the 
collective annual reporting burden under the T-100/T-100(f) would be 
10,164 hours for U.S. Air Carriers and 19,320 for the world airline 
industry.
    Table 12, below, compares the collective annual reporting burden 
for the proposed O&D Survey changes to the collective annual reporting 
burden under the current rule. Table 13, below, compares the collective 
annual reporting burden for the changes we are considering making to 
the T-100/T-100(f) to the collective annual reporting burden under the 
current rule.

[[Page 8193]]



 Table 12.--Collective Annual Reporting Burden for U.S. Air Carriers and World Airline Industry Proposed Changes
                                         Versus Current Rule O&D Survey
----------------------------------------------------------------------------------------------------------------
                                                                Proposed changes to O&D     Current O&D survey
                                                                   survey collective        collective annual
                                                                annual reporting burden      reporting burden
                                                                         (hours)                 (hours)
----------------------------------------------------------------------------------------------------------------
U.S. Air Carriers.............................................                   18,000                   32,640
World Airline Industry........................................                   27,360                   45,120
----------------------------------------------------------------------------------------------------------------


    Table 13.--Collective Annual Reporting Burden for U.S. Air Carriers and World Airline Industry Considered
                                   Changes Versus Current Rule T-100/T-100(f)
----------------------------------------------------------------------------------------------------------------
                                                                Proposed changes to O&D     Current O&D survey
                                                                   survey collective        collective annual
                                                                annual reporting burden      reporting burden
                                                                         (hours)                 (hours)
----------------------------------------------------------------------------------------------------------------
U.S. Air Carriers.............................................                   13,068                   10,164
World Airline Industry........................................                   24,840                   19,320
----------------------------------------------------------------------------------------------------------------

a. O&D Survey
    Agency: Office of the Secretary.
    Title: Passenger Origin-Destination Survey Report.
    Type of Request: Revision of a currently approved collection.
    Affected Public: Businesses.
    OMB Clearance Number (Current): 2139-0001 (expires 12/31/06).
    OMB Clearance Number (Proposed): To be determined.
    Requested Expiration Date of Approval: Three years from the date of 
approval.
    Proposed Use of Information: Electronic Dissemination to 
Transportation Planners and Analysts.
    Frequency: Monthly.
    Summary of the Collection of Information: We are proposing that 
Issuing Carriers operating aircraft with at least 15 seats report 100 
percent of the ticketed itineraries that they issue involving at least 
one Origin and/or Destination in the U.S. and to do so monthly. Data 
from the O&D Survey are used by the Department to fulfill its aviation 
mission.
    Description of the Need for the Information and Proposed Use of the 
Information: To capture the proliferation of code-sharing and increased 
use of regional carriers, we will collect information on the Issuing 
Carrier, Marketing Carrier, and Operating Carrier as well as flight-
specific data and information about passenger catchment areas.
    Description of the Likely Respondents: Respondents are U.S. Air 
Carriers issuing tickets for service to, from, or within the U.S. and 
operating aircraft with 15 or more seats and Foreign Air Carriers that 
operate service involving a U.S. Point under 49 U.S.C. Sections 41308 
and 41309.
    Estimate of the Total Annual Reporting and Recordkeeping Burden 
Resulting from the Collection of Information: We estimate the total 
annual burden to 25 U.S. Air Carriers and 13 Foreign Air Carriers 
resulting from the proposed rule to be 27,260 hours and $426,816. For 
Carriers reporting under the current rule, the proposed rule results in 
a net decrease of 240 hours per year per Carrier.
b. T-100/T-100(f)
    Agency: Office of the Secretary.
    Title: Passenger Report of Traffic and Capacity Statistics--The T-
100/T-100(f) System.
    Type of Request: Revision of a currently approved collection.
    Affected Public: Businesses.
    OMB Clearance Number (Current): 2138-0040 (expires 7/31/05).
    OMB Clearance Number (Proposed): To be determined.
    Requested Expiration Date of Approval: Three years from the date of 
approval.
    Proposed Use of Information: Electronic Dissemination to 
Transportation Planners and Analysts.
    Frequency: Monthly.
    Summary of the Collection of Information: We are considering 
requiring Carriers subject to T-100/T-100(f) reporting submit expanded 
T-100/T-100(f) reports containing two additional data elements. Data 
from the T-100/T-100(f) are used by the Department to fulfill its 
aviation mission.
    Description of the Need for the Information and Proposed Use of the 
Information: The T-100/T-100(f) provides information about the movement 
of aircraft and passengers through the national air space system. The 
additional data elements will allow a more detailed view of this 
traffic and enable the continuation of validating the enhanced O&D 
Survey with the T-100/T-100(f) reports.
    Description of the Likely Respondents: Respondents are those U.S. 
Air Carriers subject to reporting under 14 CFR Part 241 and Foreign Air 
Carriers subject to reporting under 14 CFR Part 217.
    Estimate of the Total Annual Reporting and Recordkeeping Burden 
Resulting from the Collection of Information: We estimate that, should 
the changes we are considering to the T-100/T-100(f) be adopted, the 
total annual burden would increase by 5,520 hours and $86,112.

6. The National Environmental Protection Act of 1969

    The Department has analyzed the proposed changes to the O&D Survey 
and the changes being considered for the T-100/T-100(f) for the purpose 
of the National Environmental Protection Act (Pub. L. 91-190 as 
amended; 42 U.S.C. 4321-4347). The proposed amendments will not have 
any impact on the quality of the human environment.

7. Executive Order 13132

    Executive Order 13132, Federalism (64 FR 43255, August 10, 1999), 
requires Federal agencies to adhere to the fundamental federalism 
principles set out in Section 2 as well as to adhere to the criteria 
specified in Section 3.
    The proposed changes to the O&D Survey and the changes being 
considered for the T-100/T-100(f) have been analyzed in accordance with 
the principles and criteria contained in Executive Order 13132. We have 
determined that the proposed rule will have no substantial direct 
effects on the States, on the relationship between the

[[Page 8194]]

national government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, we 
have determined that it does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment or 
to warrant consultations with State and local governments.

8. Executive Order 12630

    Executive Order 12630, Government Actions and Interference with 
Constitutionally Protected Property Rights (53 FR 8859, March 15, 1998; 
3 CFR 1988 Comp., p.554), specifies that Federal Agencies should be 
sensitive to, anticipate, and account for, the obligations imposed the 
Just Compensation Clause of the Fifth Amendment in planning and 
carrying out governmental actions, among other purposes.
    The proposed changes to the O&D Survey and the changes being 
considered for the T-100/T-100(f) would not effect a taking of private 
property or otherwise have taking implications under Executive Order 
12630.

9. Executive Order 12988

    Executive Order 12988, Civil Justice Reform (61 FR 4729, February 
7, 1996), seeks to improve legislative and regulatory drafting to enact 
legislation and promulgate regulations that do not unduly burden the 
Federal Court System, among other purposes.
    The proposed changes to the O&D Survey and the changes being 
considered for the T-100/T-100(f) meet applicable standards in Sections 
3(a) and Section 3(b)(2), of Executive Order 12988, to minimize 
litigation, eliminate ambiguity, and reduce burden.

10. Executive Order 13045

    We have analyzed the proposed changes to the O&D Survey and the 
changes being considered for the T-100/T-100(f) under Executive Order 
13045, Protection of Children From Environmental Health Risks and 
Safety Risks (62 FR 19883, April 23, 1997). The proposed changes to the 
O&D Survey and the changes being considered for the T-100/T-100(f) do 
not concern an environmental risk to health or risk to safety that may 
disproportionately affect children.

11. Executive Order 13175

    The proposed changes to the O&D Survey and the changes being 
considered for the T-100/T-100(f) will not have tribal implications, 
will not impose substantial direct compliance costs on Indian tribal 
governments, and will not preempt tribal law. Therefore, they are 
exempt from the consultation requirements of Executive Order 13175, 
Consultation and Coordination With Indian Tribal Governments (65 FR 
67249, November 9, 2000). If tribal implications are identified during 
the comment period, we will undertake appropriate consultations with 
the affected Indian tribal officials.

12. Executive Order 13211

    We analyzed the proposed changes to the O&D Survey and the changes 
being considered for the T-100/T-100(f) under Executive Order 13211, 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that the proposed changes to 
the O&D Survey and the changes being considered for the T-100/T-100(f) 
are not classified as a ``significant energy action'' under that order 
and would not have a significant adverse effect on the supply, 
distribution, or use of energy.

13. OMB Circular No. A-76 (Revised)

    We have analyzed the proposed changes to the O&D Survey and the 
changes being considered for the T-100/T-100(f) under Circular No. A-76 
(revised), Performance of Commercial Activities. It is the policy of 
the Federal government to ensure that the American people receive 
maximum value for their tax dollars by subjecting certain activities of 
the government to competition. We find that the activity of collection 
of data under the proposed changes to the O&D Survey and the changes 
being considered for the T-100/T-100(f) may be deemed a commercial 
activity.

14. Regulation Identifier Number

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number 2105-AC71 contained in 
the heading of this document can be used to cross-reference this action 
with the Unified Agenda.

M. Glossary

    1. Air Carrier. Any citizen of the United States who undertakes, 
whether directly or indirectly or by lease or any other arrangement to 
engage in air transportation.
    2. Airline Designator. The two character airline identifier as 
listed in the IATA Airline Coding Directory.
    3. ARC. Airlines Reporting Corporation (ARC) is a clearinghouse 
owned collectively by Carriers to collect ticket information and funds 
from individual travel agencies and distribute the information and 
funds to the appropriate Carriers.
    4. ARNK. Arrival unknown.
    5. Carrier. A U.S. Air Carrier or Foreign Air Carrier.
    6. City Code. The IATA location identifier assigned to a city 
associated with multiple airports.
    7. Currently Participating Carrier. An Air Carrier or Foreign Air 
Carrier that is required to report the O&D Survey under the current 
rule and would be required to report the O&D Survey proposed in this 
rulemaking.
    8. Currently Reporting Carrier. An Air Carrier or Foreign Air 
Carrier that is required to report the T-100/T-100(f) under the current 
rule and would be required to report the T-100/T-100(f) under the rule 
proposed in this rulemaking.
    9. Designated Carrier Liaison. An individual authorized to act on 
behalf of the Participating Carrier in operational matters pertaining 
to the Carrier's collection of data and subsequent submission of the 
data to the Department.
    10. Directional Passenger. A passenger's continuous trip in the 
same direction regardless of the number of days the journey takes, but 
subject to certain circuity rules designed to approximate the 
passenger's True O&D.
    11. Fare Category. A summary category of fare basis codes.
    12. Franchise Code-Share. A code-share relationship wherein one 
Carrier markets air travel as a wet-lease on another Carrier's flights 
whether or not a wet-lease agreement per se actually exists, and 
wherein one of the Carrier's partners will never appear as the 
Marketing Carrier for the other.
    13. Franchise Code-Share Partner. In a Franchise Code-Share, the 
Carrier that is reported in the O&D Survey as the Operating Carrier but 
not as the Marketing Carrier.
    14. Flight-Coupon Stage. The portion of a Ticketed Itinerary that 
lies between two sequential points of a Ticketed Itinerary. A 
passenger's Flight-Coupon Stage may involve multiple takeoffs and 
landings. A Flight-Coupon Stage may be on any scheduled transportation 
held out and ticketed by the Issuing Carrier.
    15. Flight-Stage. The operation of an aircraft from takeoff to 
landing. Technical stops are disregarded.
    16. Flight-Stage Origin Airport. The airport identifier of the 
airport from which a Flight-Stage departs. For intermodal ticketed 
ground stations, such as a bus station or a train station,

[[Page 8195]]

that station should be treated as an airport.
    17. Flight-Stage Destination Airport. The airport identifier of the 
airport in which a Flight-Stage arrives. For intermodal ticketed ground 
stations, such as a bus station or a train station, that station should 
be treated as an airport.
    18. Foreign Air Carrier. An airline that is not a U.S. Air Carrier.
    19. Formerly Participating Carrier. An Air Carrier or Foreign Air 
Carrier that is required to report the O&D Survey under the current 
rule but would not be required to report the O&D Survey under the rule 
proposed in this rulemaking.
    20. Formerly Reporting Carrier. An Air Carrier or Foreign Air 
Carrier that is required to report the T-100/T-100(f) under the current 
rule but would not be required to report the T-100/T-100(f) under the 
rule proposed in this rulemaking.
    21. Issuing Carrier. The Air Carrier or Foreign Air Carrier that is 
responsible for the ticket stock on which the Ticketed Itinerary is 
issued and that is responsible for collecting the remuneration for the 
fare and the taxes and fees. Also known as plating carrier.
    22. Issuing Carrier Identifier. The IATA assigned code that 
identifies the Carrier that issued a Ticketed Itinerary.
    23. Licensed Foreign Air Carrier. A Foreign Air Carrier with a 
permit issued under the requirement described in 49 U.S.C. 41301.
    24. Mainline Partner. In a Franchise Code-Share, the Mainline 
Partner is the Carrier that appears as the marketing carrier.
    25. Marketing Carrier. The Carrier that appears as the Carrier for 
a Flight-Coupon Stage on a Ticketed Itinerary, whether or not it 
actually operates the flight.
    26. MIDT. The Marketing Information Data Tape is information, sold 
by a GDS, about air travel reservations made through travel agents.
    27. Newly Participating Carrier. An Air Carrier or Foreign Air 
Carrier that is not required to report the O&D Survey under the current 
rule but would be required to report the O&D Survey under the rule 
proposed in this rulemaking.
    28. Newly Reporting Carrier. An Air Carrier or Foreign Air Carrier 
that is not required to report the T-100/T-100(f) under the current 
rule but would be required to report the T-100/T-100(f) under the rule 
proposed in this rulemaking.
    29. One-way Trip. A collection of information about a journey of 
one or more Flight-Stages of a Ticketed Itinerary, which are associated 
with one another using a standard methodology that is designed to 
approximate the passenger's True O&D.
    30. One-way Trip Origin. The first airport of a One-way Trip.
    31. One-way Trip Destination. The final airport of a One-way Trip.
    32. Operating Carrier. The Carrier whose aircraft and flight crew 
are used to perform a Flight-Coupon Stage.
    33. Participating Carrier. An Air Carrier or Foreign Air Carrier 
that is required to report the O&D Survey.
    34. Passenger, Nonrevenue. A person traveling free or under token 
charges, except those expressly named in the definition of Revenue 
Passenger; a person traveling at a fare or discount available only to 
employees or authorized persons of air carriers or their agents or only 
for travel on the business of the carriers; and an infant who does not 
occupy a seat. The definition includes, but is not limited to following 
examples of passengers when traveling free or pursuant to token 
charges:
    a. Directors, officers, employees, and others authorized by the air 
carrier operating the aircraft;
    b. Directors, officers, employees, and others authorized by the air 
carrier or another carrier traveling pursuant to a pass interchange 
agreement;
    c. Travel agents being transported for the purpose of familiarizing 
themselves with the carrier's services;
    d. Witnesses and attorneys attending any legal investigation in 
which such carrier is involved;
    e. Persons injured in aircraft accidents, and physicians, nurses, 
and others attending such persons;
    f. Any persons transported with the object of providing relief in 
cases of general epidemic, natural disaster, or other catastrophe;
    g. Any law enforcement official, including any person who has the 
duty of guarding government officials who are traveling on official 
business or traveling to or from such duty;
    h. Guests of an air carrier on an inaugural flight or delivery 
flights of newly-acquired or renovated aircraft;
    i. Security guards who have been assigned the duty to guard such 
aircraft against unlawful seizure, sabotage, or other unlawful 
interference;
    j. Safety inspectors of the National Transportation Safety Board or 
the FAA in their official duties or traveling to or from such duty;
    k. Postal employees on duty in charge of the mails or traveling to 
or from such duty;
    l. Technical representatives of companies that have been engaged in 
the manufacture, development or testing of a particular type of 
aircraft or aircraft equipment, when the transportation is provided for 
the purpose of in-flight observation and subject to applicable FAA 
regulations;
    m. Persons engaged in promoting air transportation;
    n. Air marshals and other Transportation Security officials acting 
in their official capacities and while traveling to and from their 
official duties; and
    o. Other authorized persons, when such transportation is undertaken 
for promotional purpose.
    35. Passenger, Revenue. A passenger for whose transportation an air 
carrier receives commercial remuneration. This includes, but is not 
limited to, the following examples:
    a. Passengers traveling under publicly available tickets including 
promotional offers (for example two-for-one) or loyalty programs (for 
example, redemption of frequent flyer points);
    b. Passengers traveling on vouchers or tickets issued as 
compensation for denied boarding or in response to consumer complaints 
or claims;
    c. Passengers traveling at corporate discounts;
    d. Passengers traveling on preferential fares (Government, seamen, 
military, youth, student, etc.);
    e. Passengers traveling on barter tickets; and
    f. Infants traveling on confirmed-space tickets.
    36. Reporting event. The event that signals the Participating 
Carrier to report a Ticketed Itinerary.
    37. Reporting Carrier. An Air Carrier or Foreign Air Carrier that 
is required to report the T-100/T-100(f).
    38. TCN. The Transmission Control Number record is a record used to 
share information about a Ticketed Itinerary between a GDS and multiple 
Carriers or between one Carrier and multiple Carriers.
    39. Ticketed Itinerary. The collection of information from an Air 
Travel Ticket, issued by an Air Carrier or Foreign Air Carrier to a 
Revenue Passenger. The collection of information about a journey shall 
be unique for the Issuing Carrier for the Date of Issue.
    40. True O&D. A passenger's view of a purposeful trip of one or 
more Flight-Stages, one or more of which include travel by scheduled 
air transportation, measured from the beginning of the trip (origin) 
until the end of the trip (destination), where the individual intends 
to conduct business or engage in leisure activity.
    41. United States. The States of the United States, the District of 
Columbia,

[[Page 8196]]

and the territories and possessions of the United States, including the 
territorial sea and the overlying airspace.

List of Subjects

14 CFR Part 241

    Air carriers, Reporting and recordkeeping requirements, Uniform 
System of Accounts.

14 CFR Part 249

    Air carriers, Reporting and recordkeeping requirements, Truth in 
lending, Uniform System of Accounts.

N. Proposed Rule

    Accordingly, the Department proposes to amend 14 CFR chapter II as 
follows:

PART 241--UNIFORM SYSTEM OF ACCOUNTS AND REPORTS FOR AIR CARRIERS

    1. The authority citation for part 241 continues to read as 
follows:

    Authority: 49 U.S.C. 329 and chapters 401, 411, 417.

    2. Sections 26-1 through 26-5 and an undesignated center heading 
are added to read as follows:

Passenger Origin--Destination Survey

Section 26-1 Applicability

    (a) Participating Carriers shall provide data for the Passenger 
Origin-Destination Survey (O&D Survey). Participating Carriers shall 
prepare information from Ticketed Itineraries for submission as 
described in Appendix A to this section and as described in the 
Passenger Origin-Destination Survey Directives issued by the Department 
of Transportation.
    (b) Participating Carriers with special operating characteristics 
may request a waiver and propose an alternative O&D Survey collection 
and reporting procedure to the Department. Such departures from the 
prescribed O&D Survey practices shall not be authorized unless approved 
in writing by the Department.
    (c) A Participating Carrier in the O&D Survey shall include:
    (1) All Air Carriers issuing Ticketed Itineraries for interstate or 
international scheduled passenger services and that operate aircraft 
with 15 or more seats, and
    (2) Foreign air carriers licensed to hold out service to the U.S. 
under 49 U.S.C. 41301 and that have been granted antitrust immunity for 
an alliance with a U.S. Air Carrier partner under 49 U.S.C. 41308 and 
41309 and operate aircraft with 15 or more seats when issuing Ticketed 
Itineraries that include an airport within the U.S.
    (d) Carriers that qualify as a Participating Carrier after the 
effective date of this regulation will be required to:
    (1) File O&D Survey data for testing purposes no more than 30 days 
after qualifying as a Participating Carrier and
    (2) File O&D Survey data as of the first day of the month that 
begins more than 60 days and no more than 91 days after the month the 
carrier qualifies as a Participating Carrier.

Section 26-2 Submission of Reports to the O&D Survey

    (a) Each Participating Carrier shall submit to the Department, in 
the manner specified in the Passenger Origin-Destination Survey 
Directives, information about Ticketed Itineraries it issues. The 
information about Ticketed Itineraries to be reported is found in 
Appendix A of this section.

Section 26-3 Certification and Authentication

    (a) Certification. (1) Each Participating Carrier shall designate 
an elective officer, an executive or a director or such other person as 
may be authorized by the carrier to serve as the Designated Company 
Official. The Participating Carrier shall disclose the individual's 
name, title and such contact information as the Department specifies in 
the Passenger Origin-Destination Survey Directives.
    (2) The Participating Carrier's Designated Company Official shall:
    (a) Certify the authenticity and accuracy of the Participating 
Carrier's submission of O&D Survey data to the Department,
    (b) Maintain the accuracy of the Participating Carrier's 
information on file with the Department,
    (c) Provide the Department with a source and accuracy statement, 
and
    (d) Authorize a Designated Carrier Liaison to act on behalf of the 
Participating Carrier in operational matters pertaining to the 
company's collection and submission of the O&D Survey.
    (3) The certification of the reports, embodied in Schedule A 
thereof, shall read as follows: I, the undersigned (Title of certifying 
official) of the (Full name of the Participating Carrier) do certify 
that reports and supporting documents which are submitted for the O&D 
Survey are prepared under my direction: that I carefully examined them 
and that they correctly reflect the accounts and records of the 
company, and to the best of my knowledge and belief are a complete and 
accurate statement of the Ticketed Itineraries to be reported in the 
periods reported; that the various items herein reported were 
determined in accordance with the standard accounting practices of the 
company; and that the data contained herein are reported on a basis 
consistent with that of the preceding report except as specifically 
noted in explanations that preceded the submission of the Ticketed 
Itineraries.
    (b) Source and Accuracy Statement. The Participating Carrier's 
Source and Accuracy Statement shall disclose the Participating 
Carrier's data source, data collection methodology, and measures to 
assure data quality.
    (c) Designated Company Official. A Participating Carrier's 
Designated Company Official may authorize an agent to prepare and to 
file the O&D Survey information on behalf of the Participating Carrier. 
Such an arrangement does not alter the obligation of the Participating 
Carrier to deliver the information properly, deliver the information 
promptly, and certify the completeness and accuracy of the information.
    (d) Designated Carrier Liaison. The Participating Carrier's 
Designated Carrier Liaison will serve as the point of contact between 
the Department and the Participating Carrier for the resolution of 
reporting issues.

Section 26-4 Retention and Accessibility of Data

    Each Participating Carrier shall maintain its prescribed operating 
statistics in a manner and at such locations as will permit ready 
accessibility for examination by representatives of the Department. The 
record retention requirements are prescribed in part 249 of this 
chapter.

Section 26-5 Confidentiality of Data.

    Data covering the operations of Air Carriers and Foreign Air 
Carriers will not be available to the public when the data would cause 
damaging competitive impact on the Air Carriers or Foreign Air Carriers 
and when adverse effects upon the public interest would result from 
disclosure of the data.
    3. Appendix A to section 26 is added to read as follows:

Appendix A to Section 26--Instructions to Participating Carriers for 
Collecting and Reporting Passenger Origin-Destination Survey Statistics

    I. Participating Carriers shall provide data for the O&D Survey. 
The authority for these instructions is found in 14 CFR part 241, 
section 26, and in the CAB Sunset Act of 1984 (Pub. L. 94-443).
    (a) Submission of reportable itineraries.

[[Page 8197]]

    (1) All Ticketed Itineraries issued by the Participating Carrier 
shall be submitted to the Department as described in the Passenger 
Origin-Destination Survey Directives issued by the Department of 
Transportation.
    (2) The source of information for the O&D Survey data shall be 
the information recorded about a Ticketed Itinerary issued to a 
Revenue Passenger by a Participating Carrier. The Participating 
Carrier shall record the information about the complete routing of 
the Ticketed Itinerary by Flight-Stage the first time the 
Participating Carrier receives evidence that the passenger has used 
the Ticketed Itinerary for transportation. Evidence that the 
passenger has used the Ticketed Itinerary for transportation shall 
include notification from the Participating Carrier's own accounting 
function or flight boarding control function that the passenger has 
been transported or notification from another Air Carrier or Foreign 
Air Carrier that the Ticketed Itinerary has been used for 
transportation.
    (b) Information about Ticketed Itineraries to be reported.
    (1) The data to be recorded and reported from Participating 
Carriers shall include the following data elements for each Ticketed 
Itinerary:
    a. Issuing Carrier Identifier: The Issuing Carrier's assigned 
IATA recognized three-character identification code.
    b. Ticketed Itinerary Identifier: The alphanumeric identifier 
for the Ticketed Itinerary.
    c. Date of Issue: The local date on which the Ticketed Itinerary 
was issued.
    d. Fare Amount: The monetary amount the Issuing Carrier receives 
from the ticket purchaser, excluding government imposed taxes and 
fees, and including the carrier-imposed fees and surcharges, such as 
fuel surcharges, for the carriage of a passenger and allowable free 
baggage on the passenger's complete itinerary, denominated in U.S. 
dollars, and accurate to two decimal places, rounded.
    e. Ticketing Entity Outlet Type: The location type code for the 
distribution channel that issued the Ticketed Itinerary. The 
Department's codes for use in this data element will be listed in 
the Passenger Origin-Destination Survey Directives issued by the 
Department and will be consistent with standard industry practice.
    f. Customer Loyalty Program Identifier: The Carrier or alliance 
customer loyalty program identifying code under which the passenger 
accrues benefits. The Department's codes for use in this data 
element will be listed in the Passenger Origin-Destination Survey 
Directives issued by the Department.
    g. Customer Loyalty Program Award Indicator: The one character 
identifying code to indicate that customer loyalty program credits 
were expended in obtaining the Ticketed Itinerary.
    h. Number of Passengers: The count of passengers traveling on 
the Ticketed Itinerary.
    i. Itinerary Copy Date: 02-14-05 the date that the Participating 
Carrier copied O&D Survey information from the Ticketed Itinerary.
    (2) The data to be recorded and reported, as many times as 
necessary, from Participating Carriers shall include the following 
data elements repeated for each tax or fee imposed by local, state, 
and national government authorities in all countries that are 
applicable to the Ticketed Itinerary:
    a. Government-imposed tax/fee identifier: The identification 
code of each government-imposed tax and government-imposed fee. The 
Department's codes for use in this data element will be listed in 
the Passenger Origin-Destination Survey Directives issued by the 
Department.
    b. Government-imposed tax/fee amount: This field will contain 
the value of the tax or fee specified by the identifier that 
precedes it, denominated in U.S. dollars and accurate to two decimal 
places, rounded.
    (3) The data to be recorded and reported, as many times as 
necessary, from Participating Carriers shall include the following 
data elements for each Flight-Stage in the order that they appear in 
the Ticketed Itinerary:
    a. Flight-Stage Sequence Number: The two character ordinal 
sequence number beginning with 01 that uniquely identifies the 
Flight-Stage of a Ticketed Itinerary.
    b. Flight-Stage Origin Airport: The IATA location identifier of 
the airport from which a Flight-Stage departs. For intermodal 
ticketed ground stations, such as a bus station or a train station, 
that station should be treated as an airport.
    c. Flight-Stage Destination Airport: The IATA location 
identifier of the airport in which a Flight-Stage arrives. For 
intermodal ticketed ground stations, such as a bus station or a 
train station, that station should be treated as an airport.
    d. Marketing Carrier Code: The IATA Airline Designator of the 
Air Carrier or Foreign Air Carrier marketing the Flight-Stage.
    e. Operating Carrier Code: The IATA Airline Designator of the 
Air Carrier or Foreign Air Carrier operating the equipment used on 
the Flight-Stage.
    f. Scheduled Flight Date: The date on which the Flight-Stage is 
scheduled to depart.
    g. Master Flight Number: The scheduled Carrier Code and true 
flight number under which the flight inventory is managed.
    h. Scheduled Departure Time: The local time the flight is 
scheduled to depart from the Flight-Stage Origin Airport.
    i. Scheduled Arrival Time: The local time the flight is 
scheduled to arrive at the Flight-Stage Destination Airport.
    j. Scheduled Arrival Date: The local date on which the flight is 
scheduled to arrive at the Flight-Stage Destination Airport.
    k. Fare Basis Code/Ticket Designator: The carrier-assigned 
alphanumeric code identifying the fare by class, qualification, and 
restriction associated with the Flight-Stage.
    l. Ticketing Class of Service: a one-character code indicating 
the service cabin within the aircraft in which the passenger is 
scheduled to be seated under the fare rules stated for each Flight-
Stage of the Ticketed Itinerary.
    (c) Means of reporting.
    (1) Participating Carriers shall report data in an electronic 
Report Transmission according to the instructions in the Passenger 
Origin-Destination Survey Directives issued by the Department of 
Transportation.
    (d) Corrections to reported information.
    (1) When Participating Carriers discover that data have been 
incorrectly reported or improperly reported, the Participating 
Carrier shall immediately notify the Department of Transportation 
according to the instructions found in the Passenger Origin-
Destination Survey Directives issued by the Department. The 
Participating Carrier shall correct the problem and resend the 
complete record of information about the incorrectly or improperly 
reported Ticketed Itineraries according to the procedures found in 
the Passenger Origin-Destination Survey Directives.

II. Glossary

    Airline Designator means an airline's IATA identifier for the 
purpose of marketing flights and listing them in standard 
publications such as the OAG.
    Air Travel Ticket means one or more paper or electronic 
documents or other evidence of contract issued by an Air Carrier or 
Foreign Air Carrier to record information about a passenger's 
complete itinerary of travel when air travel comprises at least one 
part of the journey.
    Customer Loyalty Program Identifier means the identifying code 
of the Carrier or alliance customer loyalty program under which the 
passenger accrues benefits.
    Date of Issue means the date an Air Carrier or Foreign Air 
Carrier issued the Ticketed Itinerary to a passenger.
    Designated Carrier Liaison means the individual that will serve 
as the point of contact between the Department and the Participating 
Carrier for the resolution of operational submission issues.
    Designated Company Official means an elective officer, an 
executive or a director or such other person as may be authorized by 
the carrier to certify the accuracy of information supplied to the 
Department and to specify a Designated Carrier Liaison.
    Fare Amount means the monetary amount the Issuing Carrier 
receives from the ticket purchaser, excluding government-imposed 
taxes and fees, and including the Carrier-imposed fees and 
surcharges, such as fuel surcharges, for the carriage of a passenger 
and allowable free baggage on the passenger's complete itinerary 
denominated in U.S. dollars and accurate to two decimal places, 
rounded.
    Fare Basis Code/Ticket Designator means the alphanumeric code 
identifying the fare by class, qualification, and restriction 
associated with the Flight-Stage.
    Fare Category means a summary category of fare basis codes.
    Flight-Coupon Stage means the portion of an itinerary that lies 
between two sequential points of a Ticketed Itinerary. A passenger's 
Flight-Coupon Stage may involve multiple takeoffs and landings. A 
Flight-Coupon Stage may be on any scheduled transportation held out 
and ticketed by the Issuing Carrier.
    Flight-Stage Destination Airport means the airport identifier of 
the airport in which a Flight-Stage arrives. For intermodal ticketed 
ground stations, such as a bus station or a

[[Page 8198]]

train station, that station should be treated as an airport.
    Flight-Stage Origin Airport means the airport identifier of the 
airport from which a Flight-Stage departs. For intermodal ticketed 
ground stations, such as a bus station or a train station, that 
station should be treated as an airport.
    Flight-Stage Sequence Number means the two character ordinal 
sequence number beginning with 01, followed by 02 etc. that uniquely 
identifies each Flight-Stage of a Ticketed Itinerary in the sequence 
to be traveled by the passenger. Government-Imposed Tax/Fee Amount 
means the monetary amount of the tax or fee associated with the 
corresponding Government-Imposed Tax/Fee Identifier, denominated in 
U.S. Dollars and accurate to two decimal places, rounded.
    Government-Imposed Tax/Fee Identifier means the identification 
code of a tax or fee.
    Issuing Carrier means the plating Air Carrier or Foreign Air 
Carrier that is responsible for the ticket stock on which the 
itinerary is issued. Also, the Air Carrier or Foreign Air Carrier 
that is responsible for collecting the remuneration for the fare and 
the taxes and fees from the purchaser of a Ticketed Itinerary.
    Issuing Carrier Identifier means the IATA recognized 
identification code on file at the Department that uniquely 
identifies the carrier that issued the Ticketed Itinerary.
    Itinerary Copy Date means the date that the Participating 
Carrier copied O&D Survey information from the Ticketed Itinerary.
    Marketing Carrier Code means the IATA Airline Designator of the 
Air Carrier or Foreign Air Carrier that appears on a Ticketed 
Itinerary as if it will operate the Flight-Stage, whether or not it 
actually operates the Flight-Stage.
    Marketing Flight Number means the number assigned by the 
Marketing Carrier to the Flight-Stage that appears in the Ticketed 
Itinerary.
    Master Flight Number means the scheduled Carrier Code and true 
flight number under which the flight inventory is managed.
    Number of Passengers means the count of passengers traveling on 
a Ticketed Itinerary.
    One-way Trip means a journey taken by a Passenger, described on 
Ticketed Itinerary, from the One-way Trip Origin to the One-way Trip 
Destination.
    One-way Trip Origin means the first airport of a One-way Trip.
    One-way Trip Destination means the final airport of a One-way 
Trip.
    Operating Carrier Code means the carrier code of the Air Carrier 
or Foreign Air Carrier operating the equipment used on the Flight-
Stage.
    Participating Carrier means an Air Carrier or Foreign Air 
Carrier that is required to report the O&D Survey.
    Report Transmission means a regularly scheduled electronic 
transmission of information about a collection of Ticketed 
Itineraries including the transmission identification information 
specified in the Passenger Origin-Destination Survey Directives 
issued by the Department.
    Scheduled Arrival Time means the local time at which the Flight-
Stage is scheduled to arrive at the Flight-Stage Destination 
Airport.
    Scheduled Departure Time means the local time at which the 
Flight-Stage is scheduled to depart from the Flight-Stage Origin 
Airport.
    Scheduled Flight Date means the local date on which the Flight-
Stage is scheduled to depart.
    Source and Accuracy Statement means a disclosure of the 
Participating Carrier's data source, data collection methodology, 
and measures taken to assure the quality of the data submitted to 
the Department.
    Ticketed Itinerary means the collection of information from an 
Air Travel Ticket, issued by an Air Carrier or Foreign Air Carrier 
to a Revenue Passenger.
    Ticketed Itinerary Identifier means the primary identifier of a 
Ticketed Itinerary. The Ticketed Itinerary Identifier must be unique 
for the Air Carrier or Foreign Air Carrier for the Date of Issue. 
The Ticketed Itinerary Identifier may a combination of alphanumeric 
characters and blanks.
    Ticketing Class of Service means a one-character code indicating 
the service cabin within the aircraft in which the passenger is 
scheduled to be seated for each Flight-Stage of the Ticketed 
Itinerary.
    Ticketing Entity Outlet Type means the identifier of the 
distribution channel through which the Ticketed Itinerary was 
issued.

PART 249--PRESERVATION OF AIR CARRIER RECORDS

    4. The authority citation for part 249 continues to read as 
follows:

    Authority: 49 U.S.C. 329 and chapters 401, 411, 413, 417.


Sec.  249.20  [Amended]

    5. Amend the table in Sec.  249.20 by adding a new entry 11 to read 
as follows:


Sec.  249.20  Preservation of records by certificated air carriers.

* * * * *

                           Schedule of Records
------------------------------------------------------------------------
           Category of records                    Retention period
------------------------------------------------------------------------
 
                                * * * * *
11. All books, records, and other source   7 years
 and summary documentation that support
 the carrier's T-100 reports filed under
 Rural Service Improvement Act of 2002
 (Pub. L. 107-206).
 
                                * * * * *
------------------------------------------------------------------------


    Issued in Washington, DC on: January 31, 2005.
Norman Y. Mineta,
Secretary.
[FR Doc. 05-2861 Filed 2-16-05; 8:45 am]
BILLING CODE 4910-62-P