[Federal Register Volume 70, Number 93 (Monday, May 16, 2005)]
[Rules and Regulations]
[Pages 25765-25773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9655]


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

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 201, 203, 205, 215, 298, 380, 385, and 389

[Docket No. OST-2004-19426]
RIN 2105-AD43


Elimination of Commuter Air Carrier Registrations

AGENCY: Office of the Secretary (OST), Department of Transportation 
(DOT).

ACTION: Final rule.

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

SUMMARY: This action amends the regulations governing air taxi 
operators and commuter air carriers to eliminate the requirement that 
commuter air carriers file initial and amended registration forms. The 
information provided on such forms is duplicative of information that 
commuter air carriers are separately required to file under other 
regulations. Accordingly, this amendment simplifies the process of 
applying for and maintaining commuter air carrier authority. This 
action also makes conforming amendments to other rules affected by the 
amendment, as well as to make other minor administrative, editorial, 
clarifying, and organizational changes to rules applicable to air taxi 
operators and commuter air carriers.

DATES: This final rule becomes effective June 15, 2005.

FOR FURTHER INFORMATION CONTACT: Vanessa R. Wilkins, Air Carrier 
Fitness Division, Department of Transportation, 400 Seventh Street, 
SW., Washington, DC 20590, (202) 366-9721.

SUPPLEMENTARY INFORMATION:

Background

Notice of Proposed Rulemaking

    These amendments follow a Notice of Proposed Rulemaking (NPRM) 
published in the Federal Register on October 28, 2004 (69 FR 62833). In 
that NPRM, the Department proposed to amend Part 298 of Title 14 of the 
Code of Federal Regulations (14 CFR) to eliminate the requirement that 
commuter air carriers file initial and amended registration forms, as 
currently required, thus relieving commuters from the often duplicative 
burden of filing registration forms and amendments, as well as initial 
and updated fitness information with the Department. Presently, 
approximately 35 air carriers hold commuter authority from the 
Department.
    In the NPRM, the Department explained that in addition to meeting

[[Page 25766]]

the registration and insurance requirements of Part 298, a commuter air 
carrier must also be found ``fit, willing, and able'' to conduct its 
scheduled passenger operations. In making that fitness determination, 
the Department requires companies proposing to operate as a commuter 
air carrier to file an application with the Department in accordance 
with 14 CFR Parts 201 and 204. Once the Department determines that the 
company is fit to provide its proposed scheduled passenger operations, 
the Department issues a Commuter Air Carrier Authorization with 
accompanying terms, conditions, and limitations. Additionally, Part 298 
requires commuter air carriers to notify the Department of any 
substantial changes in their operations, ownership, or management.
    All of the information reported on the air taxi/commuter air 
carrier registration form, OST Form 4507, is filed by commuter air 
carriers in connection with their fitness determinations. Therefore, 
the Department concluded that it is redundant to require commuter air 
carriers to file both registration forms and fitness data.

Discussion of Comments

    One comment from an individual was received in response to the 
NPRM. The commenter argued that the Department's air operator 
classifications for economic authority (air taxi, commuter air carrier, 
and certificated air carrier) differ significantly from those of the 
Federal Aviation Administration (FAA), and contends that such 
differences in classifications are extremely confusing to the aviation 
industry. The commenter urges the Department to amend its 
classifications to coincide with those of the FAA.
    We have reviewed the arguments made by the commenter, and find 
that, although the concerns raised are related to air carrier 
classifications, the commenter's proposed actions are beyond the scope 
of this rulemaking action, which is intended to alleviate the burden on 
commuter air carriers to file duplicative information with the 
Department. We will retain the commenter's recommendations, however, 
for consideration should we pursue a future rulemaking action that 
addresses the issues raised.

Discussion of the Final Rule

    This final rule adopts the amendments proposed in the NPRM without 
any modifications or changes. Specifically, this action (1) 
reclassifies commuter air carriers from being a subset of air taxi 
operators to their own air carrier class that operates small aircraft 
in scheduled passenger service; (2) removes the requirement in Part 298 
for commuter air carriers to file air taxi registrations (and 
amendments) with the Department; and (3) makes conforming amendments to 
other rules affected by these changes to commuter air carrier economic 
authority.

Paperwork Reduction Act

    This final rule contains information collection requirements that 
are subject to review by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (Pub. L. 104-13). In the 
NPRM, the Department requested comments on the estimated information 
collection burden associated with this rulemaking action, which is 
summarized below. No comments were received. Since this final rule is 
relieving in nature and reduces the paperwork burden associated with 
OST Form 4507, the Department has requested OMB approval of the reduced 
paperwork burden.
    OMB Information Collection Number: 2120-0633.
    Title of Information Collection: Exemptions for Air Taxi and 
Commuter Air Carrier Operations.
    Affected Public: Commuter air carriers and applicants for commuter 
air carrier authority.
    Brief Abstract: Applicants for authority to operate as an air taxi 
operator or commuter air carrier under 14 CFR Part 298 are required to 
submit a registration form (OST Form 4507) that asks for basic 
information about the company (such as, name, address, telephone/fax 
numbers, types of operations being performed, Federal Aviation 
Administration (FAA) operating certificate, aircraft operated, and 
whether the company is a U.S. citizen). Once registered with the 
Department, the air taxi or commuter air carrier is required to submit 
an amendment to the Department when information on the registration 
changes. This final rule eliminates this registration requirement for 
commuter air carriers--since the information required on the 
registration is duplicative of information provided to the Department 
elsewhere--thus resulting in a reduction in the above-noted paperwork 
collection.
    Burden Hours: This amendment results in a diminution of the 
regulatory burden on affected parties. There are approximately 35 
currently-authorized commuter air carriers subject to this reporting 
requirement, and new applicants for commuter authority over the past 
three years have averaged approximately four per year. The paperwork 
burden of this reporting requirement on commuter air carriers varies 
depending on the extent to which the information on the registration 
changes. A carrier does not need to submit further forms if the 
information contained in a registration does not change. As a result, 
the number of registration forms filed will vary. Based on our recent 
experience in this area, we have estimated approximately two amended 
registrations per currently-authorized commuter air carrier plus one 
registration for each new commuter applicant. Thus, we estimate the 
reduction in the paperwork burden for these carriers to be, on an 
annual basis, approximately 74 responses (4 new and 70 amended OST 
Forms 4507s) and 37 burden hours (74 responses x .5 hours per 
response).
    Cost to the Respondents: We have previously estimated the average 
cost of completing and submitting a new or amended OST Form 4507 to be 
approximately $20.00. Thus, we estimate the cost savings to respondents 
of the proposed elimination of commuter registrations to be 
approximately $1,480 (74 responses x $20 per response).

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is the Department's policy to comply 
with International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The Department 
has determined that there are no ICAO Standards and Recommended 
Practices that correspond to these amendments.

Executive Order 12866 and DOT Regulatory Policies and Provisions

    Executive Order 12866, Regulatory Planning and Review, directs the 
Department to assess both the costs and the benefits of a regulatory 
change. We are not allowed to propose or adopt a regulation unless we 
make a reasoned determination that the benefits of the intended 
regulation justify the costs. Our assessment of this rulemaking 
indicates that its economic impact is minimal because the rule will not 
impose any new costs on the affected commuter air carriers; in fact, it 
relieves them of a filing requirement with the attendant costs and 
burdens. The remaining changes are administrative and editorial in 
nature and primarily reflect organizational and procedural changes 
within the Department. This rulemaking is non-significant under DOT 
policies and procedures and was not reviewed by the Office of

[[Page 25767]]

Management and Budget under Executive Order 12866.

Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act of 1980 (RFA) directs the Department 
to fit regulatory requirements to the scale of the business, 
organizations, and governmental jurisdictions subject to the 
regulation. We are required to determine whether a proposed or final 
action will have a ``significant economic impact on a substantial 
number of small entities'' as they are defined in the Act. If we find 
that the action will have a significant impact, we must do a 
``regulatory flexibility analysis.''
    This final rule relieves commuter air carriers from filing 
registration forms and amendments, and reorganizes some of the 
regulations applicable to commuter air carriers. Since elimination of 
this requirement will affect fewer than 40 companies, we certify that 
this action will not have a significant economic impact on a 
substantial number of small entities.

Trade Impact Assessments

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in related activities that 
create unnecessary obstacles to the foreign commerce of the United 
States. Legitimate domestic objectives, such as safety, are not 
considered unnecessary obstacles. The statute also requires 
consideration of international standards and, where appropriate, that 
they be the basis for U.S. standards. The Department has assessed the 
potential effect of this rulemaking and has determined that it will 
have only a domestic impact and therefore no effect on any trade-
sensitive activity.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act) is intended, 
among other things, to curb the practice of imposing unfunded Federal 
mandates on State, local, and tribal governments. Title II of the Act 
requires each Federal agency to prepare a written statement assessing 
the effects of any Federal mandate in a proposed or final agency rule 
that may result in an expenditure of $100 million or more (adjusted 
annually for inflation) in any one year by State, local, and tribal 
governments, in the aggregate, or by the private sector; such a mandate 
is deemed to be a ``significant regulatory action.''
    This final rule does not contain such a mandate. The requirements 
of Title II of the Act, therefore, do not apply.

Executive Order 13132, Federalism

    The Department has analyzed these amendments under the principles 
and criteria of Executive Order 13132, Federalism. We have determined 
that this rulemaking action would not have a substantial direct effect 
on the States, on the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government.

List of Subjects

14 CFR Part 201

    Air carriers, Reporting and recordkeeping requirements.

14 CFR Part 203

    Air carriers, Air transportation, Foreign relations, Insurance, 
Reporting and recordkeeping requirements.

14 CFR Part 205

    Air carriers, Freight, Insurance, Reporting and recordkeeping 
requirements.

14 CFR Part 215

    Air carriers, Reporting and recordkeeping requirements, Trade 
names.

14 CFR Part 298

    Air taxis, Reporting and recordkeeping requirements.

14 CFR Part 380

    Charter flights, Reporting and recordkeeping requirements, Surety 
bonds.

14 CFR Part 385

    Organization and functions (Government agencies).

14 CFR Part 389

    Administrative practice and procedure, Reporting and recordkeeping 
requirements.

The Amendment

0
In consideration of the foregoing, the Department amends Title 14, 
Chapter II of the Code of Federal Regulations as follows:

PART 201--AIR CARRIER AUTHORITY UNDER SUBTITLE VII OF TITLE 49 OF 
THE UNITED STATES CODE

0
1. The authority citation for part 201 continues to read as follows:

    Authority: 5 U.S.C. 1008; 49 U.S.C. Chapters 401, 411, 413, 415, 
417.


Sec.  201.1  [Amended]

0
2. In Sec.  201.1(b), remove the word ``registration'' in the first 
sentence.

PART 203--WAIVER OF WARSAW CONVENTION LIABILITY LIMITS AND DEFENSES

0
3. The authority citation for part 203 continues to read as follows:

    Authority: 49 U.S.C. Chapters 401, 411, 413, 415, 417.

Sec.  203.3  [Amended]

0
4. In Sec.  203.3, in the second sentence remove the words ``with the 
Department's Office of Aviation Analysis'' and add, in their place, 
``in accordance with the provisions of those parts'', and remove the 
last sentence.

PART 205--AIRCRAFT ACCIDENT LIABILITY INSURANCE

0
5. The authority citation for Part 205 continues to read as follows:

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


0
6. Amend Sec.  205.4 as follows:
0
A. Revise paragraph (a) to read as set forth below;
0
B. Amend paragraph (b) by removing the words ``Department's Office of 
Aviation Analysis'' in the first sentence and adding, in their place, 
``Department at the addresses specified in paragraph (c) of this 
section''; and
0
C. Revise paragraph (c) to read as set forth below.
    The revisions read as follows:


Sec.  205.4  Filing of evidence of insurance.

    (a) A U.S. or foreign air carrier shall file a certificate of 
insurance or a complete plan for self-insurance with the Department. 
Each carrier shall ensure that the evidence of aircraft accident 
liability coverage filed with the Department is correct at all times. 
The Department will normally notify the carrier within 20 days of 
receipt if the certificate or plan does not meet the requirements of 
this part. Certificates of Insurance shall be filed on OST Form 6410 
for U.S. air carriers, including commuter air carriers and air taxi 
operators, and OST Form 6411 for foreign air carriers, including 
Canadian air taxi operators. The Department may return the certificate 
or self-insurance plan to the carrier if it finds for good cause that 
such certificate or plan does not show adequate evidence of insurance 
coverage under this part. Forms may be obtained from and should be 
filed with the Department at the addresses specified in paragraph (c) 
of this section. Forms may also be obtained on the Internet at http://ostpxweb.dot.gov.
* * * * *

[[Page 25768]]

    (c) Certificates of insurance and endorsements required in 
paragraphs (a) and (b) of this section shall be submitted to the 
Department of Transportation, Federal Aviation Administration, Program 
Management Branch, AFS-260, 800 Independence Avenue, SW., Washington, 
DC 20591. For those air carriers that have a mailing address in the 
State of Alaska, the forms shall be submitted to the Department of 
Transportation, Federal Aviation Administration, Alaskan Region 
Headquarters, AAL-230, 222 West 7th Avenue, Box 14, Anchorage, Alaska 
99513. For Canadian air taxis, the forms shall be submitted to the 
Department of Transportation, Special Authorities Division, X-46, 400 
7th Street, SW., Washington, DC 20590.
* * * * *


Sec.  205.7  [Amended]

0
7. In Sec.  205.7(a), remove the words ``Department's Office of 
Aviation Analysis (or, for Alaskan air taxi operators, to the 
Department's Alaska Field Office)'' and add, in their place the words 
``Department at the addresses specified in Sec.  205.4(c)''.

PART 215--USE AND CHANGE OF NAMES OF AIR CARRIERS, FOREIGN AIR 
CARRIERS AND COMMUTER AIR CARRIERS

0
8. The authority citation for part 215 continues to read as follows:

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


Sec.  215.3  [Amended]

0
9. In Sec.  215.3, in the second sentence, remove the words ``Except as 
provided in Sec. Sec.  221.21(j) and 221.35(d) of this chapter,''.


Sec.  215.4  [Amended]

0
10. In Sec.  215.4(a), in the second sentence, remove the words ``, as 
well as any commuter air carrier registration or amendment filed under 
part 298,'' and add the word ``commuter'' after ``certificate,'' in the 
fourth sentence.


Sec.  215.6  [Amended]

0
11. In Sec.  215.6, remove the words ``or in approving the commuter 
registration,'' in the first sentence.

PART 298--EXEMPTIONS FOR AIR TAXI & COMMUTER AIR CARRIER OPERATIONS

0
12. The authority citation for part 298 continues to read as follows:

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


0
13. Amend part 298 by revising subparts A through E to read as follows:
Subpart A--General
Sec.
298.1 Applicability of part.
298.2 Definitions.
298.3 Classification.
298.4 Requests for statement of authority.
Subpart B--Exemptions
298.11 Exemption authority.
298.12 Duration of exemption.
Subpart C--Registration for Exemption by Air Taxi Operators
298.21 Filing for registration by air taxi operators.
298.22 Processing by the Department.
298.23 Notifications to the Department of change in operations.
298.24 Cancellation of the registration.
Subpart D--Limitations and Conditions on Exemptions and Operations
298.30 Public disclosure of policy on consumer protection.
298.31 Scope of service and equipment authorized.
298.32 Limitations on operations to eligible places.
298.33 Security requirements
298.34 [Reserved]
298.35 Limitations on carriage of mail.
298.36 Limitations on use of business name.
298.37 Prohibition of services not covered by insurance.
298.38 Financial security arrangements for operating Public 
Charters.
Subpart E--Commuter Air Carrier Authorizations
298.50 Applications.
298.51 Processing by the Department.
298.52 Air taxi operations by commuter air carriers.
298.53 Suspension or revocation of authority.

Subpart A--General


Sec.  298.1  Applicability of part.

    This part establishes classifications of air carriers known as 
``air taxi operators'' and ``commuter air carriers,'' provides certain 
exemptions to them from some of the economic regulatory provisions of 
Subtitle VII of Title 49 of the United States Code (Transportation), 
specifies procedures by which such air carriers may obtain authority to 
conduct operations, and establishes rules applicable to their 
operations in interstate and/or foreign air transportation in all 
States, Territories and possessions of the United States. This part 
also establishes reporting requirements for commuter air carriers and 
small certificated air carriers.


Sec.  298.2  Definitions.

    As used in this part:
    Air taxi operator means an air carrier as established by Sec.  
298.3(a).
    Air transportation means interstate air transportation, foreign air 
transportation, or the transportation of mail by aircraft as defined by 
the Statute.\1\
---------------------------------------------------------------------------

    \1\ Interstate air transportation is defined in section 
40102(a)(25) as the transportation of passengers or property by 
aircraft as a common carrier for compensation, or the transportation 
of mail by aircraft (1) between a place in (i) a State, territory, 
or possession of the United States and a place in the District of 
Columbia or another State, territory, or possession of the United 
States; (ii) Hawaii and another place in Hawaii through the airspace 
over a place outside Hawaii; (iii) the District of Columbia and 
another place in the District of Columbia; or (iv) a territory or 
possession of the United States and another place in the same 
territory or possession; and (2) when any part of the transportation 
is by aircraft. Note: Operations wholly within the geographic limits 
of a single State are not considered interstate air transportation 
if in those operations the carrier transports no more than a de 
minimus volume of passengers or property moving as part of a 
continuous journey to or from a point outside the State.
    Foreign air transportation is defined in section 40102(a)(23) of 
the Statute as the transportation of passengers or property by 
aircraft as a common carrier for compensation, or the transportation 
of mail by aircraft, between a place in the United States and a 
place outside the United States when any part of the transportation 
is by aircraft.
    Air transportation also is defined to include the transportation 
of mail by aircraft. Section 5402 of the Postal Reorganization Act, 
39 U.S.C. 5402, authorizes the carriage of mail by air taxi 
operators and commuter air carriers in some circumstances under 
contract with the U.S. Postal Service.
---------------------------------------------------------------------------

    Aircraft-hours means the airborne hours of aircraft computed from 
the moment an aircraft leaves the ground until it touches the ground at 
the end of a flight stage.
    Aircraft miles means the miles (computed in airport-to-airport 
distances) for each flight stage actually completed, whether or not 
performed in accordance with the scheduled pattern.
    Certificated air carrier means an air carrier holding a certificate 
issued under section 41102 of the Statute.
    Citizen of the United States means:
    (1) An individual who is a citizen of the United States;
    (2) A partnership each of whose partners is an individual who is a 
citizen of the United States; or
    (3) A corporation or association organized under the laws of the 
United States or a state, the District of Columbia, or a territory or 
possession of the United States, of which the president and at least 
two-thirds of the board of directors and other managing officers are 
citizens of the United States, which is under the actual control of 
citizens of the United States, and in which at least 75 percent of the 
voting interest is owned or controlled by persons that are citizens of 
the United States.
    Commuter air carrier means an air carrier as established by Sec.  
298.3(b) that

[[Page 25769]]

carries passengers on at least five round trips per week on at least 
one route between two or more points according to its published flight 
schedules that specify the times, days of the week, and places between 
which those flights are performed.
    Departure means takeoff from an airport.
    Eligible place means a place in the United States that--
    (1)(i) Was an eligible point under section 419 of the Federal 
Aviation Act of 1958 as in effect before October 1, 1988;
    (ii) Received scheduled air transportation at any time after 
January 1, 1990; and
    (iii) Is not listed in Department of Transportation Orders 89-9-37 
and 89-12-52 as a place ineligible for compensation under Subchapter II 
of Chapter 417 of the Statute; or
    (2) Was determined, on or after October 1, 1988, and before the 
date of the enactment of the Wendell H. Ford Aviation Investment and 
Reform Act for the 21st Century, by the Department to be eligible to 
receive subsidized small community air service under section 41736(a) 
of the Statute.
    Flight stage means the operation of an aircraft from takeoff to 
landing.
    Large aircraft means any aircraft originally designed to have a 
maximum passenger capacity of more than 60 seats or a maximum payload 
capacity of more than 18,000 pounds.
    Maximum certificated takeoff weight means the maximum takeoff 
weight authorized by the terms of the aircraft airworthiness 
certificate.\2\
---------------------------------------------------------------------------

    \2\ This weight may be found in the airplane operating record or 
in the airplane flight manual, which is incorporated by regulation 
into the airworthiness certificate.
---------------------------------------------------------------------------

    Maximum passenger capacity means the maximum number of passenger 
seats for which an aircraft is configured.
    Maximum payload capacity means: (1) The maximum certificated take-
off weight of an aircraft, less the empty weight,\3\ less all 
justifiable aircraft equipment, and less the operating load (consisting 
of minimum fuel load, oil, flight crew, steward's supplies, etc.). For 
purposes of this part, the allowance for the weight of the crew, oil, 
and fuel is as follows:
---------------------------------------------------------------------------

    \3\ Empty weight is defined in section 03 of part 241 as 
follows: the weight of the airframe, engines, propellers, and fixed 
equipment. Empty weight excludes the weight of the crew and payload, 
but includes the weight of all fixed ballast, unusable fuel supply, 
undrainable oil, total quantity of engine coolant, and total 
quantity of hydraulic fluid.
---------------------------------------------------------------------------

    (i) Crew--200 pounds per crew member required under FAA 
regulations,
    (ii) Oil--350 pounds,
    (iii) Fuel--the minimum weight of fuel required under FAA 
regulations for a flight between domestic points 200 miles apart,\4\
---------------------------------------------------------------------------

    \4\ Assumes VFR weather conditions and flights not involving 
extended overwater operations.
---------------------------------------------------------------------------

    (2) Provided, however, That in the case of aircraft for which a 
maximum zero fuel weight is prescribed by the FAA,\5\ maximum payload 
capacity means the maximum zero fuel weight, less the empty weight, 
less all justifiable aircraft equipment, and less the operating load 
(consisting of minimum flight crew, steward's supplies, etc., but not 
including disposable fuel or oil).
---------------------------------------------------------------------------

    \5\ The maximum zero fuel weight is the maximum permissible 
weight of an airplane with no disposable fuel or oil. The zero fuel 
weight figure may be found in the FAA's type certificate data 
sheets, and/or in FAA-approved flight manuals.
---------------------------------------------------------------------------

    Mile means a statute mile, i.e., 5,280 feet.
    Nonrevenue passenger means 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. (This definition is for 14 CFR part 298 traffic-
reporting purposes and may differ from the definitions used in other 
parts by the Federal Aviation Administration and the Transportation 
Security Administration for the collection of Passenger Facility 
Charges and Security Fees.) The definition includes, but is not limited 
to, the following examples of passengers when traveling free or 
pursuant to token charges:
    (1) Directors, officers, employees, and others authorized by the 
air carrier operating the aircraft;
    (2) Directors, officers, employees, and others authorized by the 
air carrier or another carrier traveling pursuant to a pass interchange 
agreement;
    (3) Travel agents being transported for the purpose of 
familiarizing themselves with the carrier's services;
    (4) Witnesses and attorneys attending any legal investigation in 
which such carrier is involved;
    (5) Persons injured in aircraft accidents, and physicians, nurses, 
and others attending such persons;
    (6) Any persons transported with the object of providing relief in 
cases of general epidemic, natural disaster, or other catastrophe;
    (7) 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;
    (8) Guests of an air carrier on an inaugural flight or delivery 
flights of newly-acquired or renovated aircraft;
    (9) Security guards who have been assigned the duty to guard such 
aircraft against unlawful seizure, sabotage, or other unlawful 
interference;
    (10) Safety inspectors of the National Transportation Safety Board 
or the FAA in their official duties or traveling to or from such duty;
    (11) Postal employees on duty in charge of the mails or traveling 
to or from such duty;
    (12) 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;
    (13) Persons engaged in promoting air transportation;
    (14) Air marshals and other Transportation Security officials 
acting in their official capacities and while traveling to and from 
their official duties; and
    (15) Other authorized persons, when such transportation is 
undertaken for promotional purpose.
    Passengers carried means passengers on board each flight stage.
    Point when used in connection with any territory or possession of 
the United States, or the States of Alaska and Hawaii, means any 
airport or place where aircraft may be landed or taken off, including 
the area within a 25-mile radius of such airport or place; when used in 
connection with the continental United States, except Alaska, it shall 
have the same meaning except be limited to the area within a 3-mile 
radius of such airport or place: Provided, That for the purposes of 
this part, West 30th Street Heliport and Pan Am Building Heliport, both 
located in New York City, shall be regarded as separate points.
    Reporting carrier for Schedule T-100 purposes means the air carrier 
in operational control of the flight, i.e., the carrier that uses its 
flight crews under its own FAA operating authority.
    Revenue passenger means a passenger for whose transportation an air 
carrier receives commercial remuneration. (This definition is for 14 
CFR part 298 traffic-reporting purposes and may differ from the 
definitions used in other parts by the Federal Aviation Administration 
and the Transportation Security Administration for the collection of 
Passenger Facility Charges

[[Page 25770]]

and Security Fees.) This includes, but is not limited to, the following 
examples:
    (1) Passengers traveling under publicly available tickets including 
promotional offers (for example two-for-one) or loyalty programs (for 
example, redemption of frequent flyer points);
    (2) Passengers traveling on vouchers or tickets issued as 
compensation for denied boarding or in response to consumer complaints 
or claims;
    (3) Passengers traveling at corporate discounts;
    (4) Passengers traveling on preferential fares (Government, seamen, 
military, youth, student, etc.);
    (5) Passengers traveling on barter tickets; and
    (6) Infants traveling on confirmed-space tickets.
    Revenue passenger-mile means one revenue passenger transported one 
mile. Revenue passenger-miles are computed by multiplying the aircraft 
miles flown on each flight stage by the number of revenue passengers 
carried on that flight stage.
    Revenue seat-miles available means the aircraft-miles flown on each 
flight stage multiplied by the number of seats available for sale on 
that flight stage.
    Revenue ton-mile means one ton of revenue traffic transported one 
mile. Revenue ton-miles are computed by multiplying the aircraft-miles 
flown on each flight stage by the number of pounds of revenue traffic 
carried on that flight stage and converted to ton-miles by dividing 
total revenue pound-miles by 2,000 pounds.
    Revenue ton-miles available means the aircraft-miles flown on each 
flight stage multiplied by the number of pounds of aircraft capacity 
available for use on that stage and converted to ton-miles by dividing 
total pound-miles available by 2,000 pounds.
    Scheduled service means transport service operated over routes 
pursuant to published flight schedules or pursuant to mail contracts 
with the U.S. Postal Service.
    Small aircraft means any aircraft originally designed to have a 
maximum passenger capacity of 60 seats or less or a maximum payload 
capacity of 18,000 pounds or less.
    Small certificated air carrier means an air carrier holding a 
certificate issued under section 41102 of the Statute that provides 
scheduled passenger air service within and between only the 50 States 
of the United States, the District of Columbia, the Commonwealth of 
Puerto Rico, and the U.S. Virgin Islands with small aircraft as defined 
in this section.
    Statute means Subtitle VII of Title 49 of the United States Code 
(Transportation).
    Ton means a short ton, i.e., 2,000 pounds.
    Wet-Lease Agreement means an agreement under which one carrier 
leases an aircraft with flight crew to another air carrier.


Sec.  298.3  Classification.

    (a) There is hereby established a classification of air carriers, 
designated as ``air taxi operators,'' which directly engage in the air 
transportation of persons or property or mail or in any combination of 
such transportation and which:
    (1) Do not directly or indirectly utilize large aircraft in air 
transportation;
    (2) Do not hold a certificate of public convenience and necessity 
and do not engage in scheduled passenger operations as specified in 
paragraph (b) of this section;
    (3) Have and maintain in effect liability insurance coverage in 
compliance with the requirements set forth in part 205 of this chapter 
and have and maintain a current certificate of insurance evidencing 
such coverage on file with the Department;
    (4) If operating in foreign air transportation or participating in 
an interline agreement, subscribe to Agreement 18900 (OST Form 4523 or 
OST Form 4507) and comply with all other requirements of part 203 of 
this chapter; and
    (5) Have registered with the Department in accordance with subpart 
C of this part.
    (b) There is hereby established a classification of air carriers, 
designated as ``commuter air carriers,'' which directly engage in the 
air transportation of persons, property or mail, and which:
    (1) Do not directly or indirectly utilize large aircraft in air 
transportation;
    (2) Do not hold a certificate of public convenience and necessity;
    (3) Carry passengers on at least five round trips per week on at 
least one route between two or more points according to its published 
flight schedules that specify the times, days of the week, and places 
between which those flights are performed;
    (4) Have and maintain in effect liability insurance coverage in 
compliance with the requirements set forth in part 205 of this chapter 
and have and maintain a current certificate of insurance evidencing 
such coverage on file with the Department;
    (5) Have and maintain in effect and on file with the Department a 
signed counterpart of Agreement 18900 (OST Form 4523) and comply with 
all other requirements of part 203 of this chapter; and
    (6) Hold a Commuter Air Carrier Authorization issued in accordance 
with subpart E of this part.
    (c) A person who does not observe the conditions set forth in 
paragraph (a) or (b) of this section shall not be an air taxi operator 
or commuter air carrier within the meaning of this part with respect to 
any operations conducted while such conditions are not being observed, 
and during such periods is not entitled to any of the exemptions set 
forth in this part.


Sec.  298.4  Requests for statement of authority.

    In any instance where an air taxi operator or commuter air carrier 
is required by a foreign government to produce evidence of its 
authority to engage in foreign air transportation under the laws of the 
United States, the Director, Office of Aviation Analysis (X-50), Office 
of the Secretary, 400 7th Street, SW, Washington, DC 20590, will, upon 
request, furnish the carrier with a written statement, outlining its 
general operating privileges under this part for presentation to the 
proper authorities of the foreign government.

Subpart B--Exemptions


Sec.  298.11  Exemption authority.

    Air taxi operators and commuter air carriers are hereby relieved 
from the following provisions of the Statute only if and so long as 
they comply with the provisions of this part and the conditions imposed 
herein, and to the extent necessary to permit them to conduct air taxi 
or commuter air carrier operations:
    (a) Section 41101;
    (b) Section 41504; except that the requirements of that section 
shall apply to:
    (1) Tariffs for through rates, fares, and charges filed jointly by 
air taxi operators or commuter air carriers with air carriers or with 
foreign air carriers subject to the tariff-filing requirements of 
Chapter 415; and
    (2) Tariffs required to be filed by air taxi operators or commuter 
air carriers which embody the provisions of the counterpart to 
Agreement 18900 as specified in part 203 of this chapter;
    (c) Section 41702, except for the requirements that air taxi 
operators and commuter air carriers shall:
    (1) Provide safe service, equipment, and facilities in connection 
with air transportation;
    (2) Provide adequate service insofar as that requires them to 
comply with parts 252 and 382 of this chapter;

[[Page 25771]]

    (3) Observe and enforce just and reasonable joint rates, fares, and 
charges, and just and reasonable classifications, rules, regulations 
and practices as provided in tariffs filed jointly by air taxi 
operators or commuter air carriers with certificated air carriers or 
with foreign air carriers; and
    (4) Establish just, reasonable, and equitable divisions of such 
joint rates, fares, and charges as between air carriers participating 
therein which shall not unduly prefer or prejudice any of such 
participating air carriers;
    (d) Section 41310, except that the requirements of that subsection 
shall apply to through service provided pursuant to tariffs filed 
jointly by air taxi operators or commuter air carriers with 
certificated air carriers or with foreign air carriers and to 
transportation of the handicapped to the extent that that is required 
by part 382 of this chapter;
    (e) Section 41902;
    (f) Section 41708.


Sec.  298.12  Duration of exemption.

    The exemption from any provision of the Statute provided by this 
part shall continue in effect only until such time as the Department 
shall find that enforcement of that provision would be in the public 
interest, at which time the exemption shall terminate or be conditioned 
with respect to the person, class of persons, or service (e.g., 
limited-entry foreign air transportation market) subject to the 
finding.

Subpart C--Registration for Exemption by Air Taxi Operators


Sec.  298.21  Filing for registration by air taxi operators.

    (a) Every air taxi operator who plans to commence operations under 
this part shall register with the Department not later than 30 days 
prior to the commencement of such operations, unless, upon a showing of 
good cause satisfactory to the Manager, Program Management Branch (AFS-
260), Federal Aviation Administration, registration within a lesser 
period of time is allowed.
    (b) The registration of an air taxi operator shall remain in effect 
until it is amended by the carrier or canceled by the Department.
    (c) Registration by all air taxi operators shall be accomplished by 
filing with the Department at the address specified in paragraph (d) of 
this section the following:
    (1) Air Taxi Registration (OST Form 4507), executed in 
duplicate.\6\ This form shall be certified by a responsible official 
and shall include the following information:
---------------------------------------------------------------------------

    \6\ OST Form 4507 can be obtained from the Manager, Program 
Management Branch, Federal Aviation Administration, AFS-260, or on 
the World Wide Web at http://www.faa.gov/avr/afs/afs200/afs260/Part298.cfm.
---------------------------------------------------------------------------

    (i) The name of the carrier and its mailing address;
    (ii) The carrier's principal place of business, if different from 
its mailing address, and its telephone number and fax number;
    (iii) The carrier's FAA certificate number, if any, and the address 
and telephone number of the carrier's local FAA office;
    (iv) The type of service the carrier will offer (scheduled 
passenger,\7\ scheduled cargo, mail under a U.S. Postal Service 
contract, on-demand passenger, on-demand cargo, or other service such 
as air ambulance operations, firefighting or seasonal operations);
---------------------------------------------------------------------------

    \7\ Companies proposing to provide scheduled passenger service 
at the level established by this Part for commuter air carriers are 
not permitted to conduct such operations under their air taxi 
registration; such companies must first be found fit, willing and 
able to operate and be issued a Commuter Air Carrier Authorization 
by the Department.
---------------------------------------------------------------------------

    (v) A list of the aircraft that the carrier proposes to operate, 
or, in the case of an amendment to the registration, the aircraft that 
it is currently operating in its air taxi operations, and the aircraft 
type, FAA registration number and passenger capacity of each aircraft;
    (vi) For initial registration, the proposed date of commencement of 
air taxi operations;
    (vii) For amendments, whether the carrier has carried passengers in 
foreign air transportation during the previous 12 months;
    (viii) Whether the carrier is a citizen of the United States; and
    (ix) A certification that the registration is complete and accurate 
and that, if the carrier is engaged in foreign air transportation, or 
participating in an interline agreement, it subscribes to the terms of 
Agreement 18900 (see OST Form 4523).
    (2) A certificate of insurance (OST Form 6410) which is currently 
effective (or in case of initial registration, is to become effective), 
as defined in part 205 of this chapter;
    (3) An 8 dollar ($8) registration filing fee in the form of a 
check, draft, or postal money order payable to the Department of 
Transportation.
    (d) Registrations required in paragraph (c) of this section shall 
be submitted to the Department of Transportation, Federal Aviation 
Administration, Program Management Branch (AFS-260), 800 Independence 
Avenue, SW., Washington, DC 20591. For those air taxi operators that 
have a mailing address in the State of Alaska, the registrations shall 
be filed with the Department of Transportation, Federal Aviation 
Administration, Alaskan Region Headquarters (AAL-230), 222 West 7th 
Avenue, Box 14, Anchorage, Alaska 99513.


Sec.  298.22  Processing by the Department.

    After examination of the OST Form 4507 submitted by the carrier, 
the Department will stamp the effective date of the registration on the 
form and return the duplicate copy to the carrier to confirm that it 
has registered with the Department as required by this part. The 
effective date of the registration shall not be earlier than the 
effective date of the insurance policy or policies named in the 
certificate of insurance filed by the carrier under Sec.  298.21(c)(2).


Sec.  298.23  Notifications to the Department of change in operations.

    (a) If any of the information contained on its registration 
changes, an air taxi operator shall submit an amendment reflecting the 
updated information. This amendment shall be filed no later than 30 
days after the change occurs. There is no filing fee for submitting an 
amendment.
    (b) An amendment shall be made by resubmitting OST Form 4507 to the 
Department of Transportation, Federal Aviation Administration, Program 
Management Branch (AFS-260), 800 Independence Avenue, SW., Washington, 
DC 20591. If the air taxi operator has a mailing address in the State 
of Alaska, the form shall be mailed to the Department of 
Transportation, Federal Aviation Administration, Alaskan Region 
Headquarters (AAL-230), 222 West 7th Avenue, Box 14, Anchorage, Alaska 
99513.


Sec.  298.24  Cancellation of the registration.

    The registration of an air taxi operator may be canceled by the 
Department if any of the following occur:
    (a) The operator ceases its operations;
    (b) The operator's insurance coverage changes or lapses;
    (c) The operator fails to file an amended registration when 
required by Sec.  298.23;
    (d) The operator's Air Carrier Certificate and/or Operations 
Specifications is revoked by the Federal Aviation Administration;
    (e) The operator fails to qualify as a citizen of the United 
States;
    (f) The Department determines that it is otherwise in the public 
interest to do so.

[[Page 25772]]

Subpart D--Limitations and Conditions on Exemptions and Operations


Sec.  298.30  Public disclosure of policy on consumer protection.

    (a) Every air taxi and commuter air carrier shall cause to be 
displayed continuously in a conspicuous public place at each desk, 
station and position in the United States that is in charge of a person 
employed exclusively by it, or by it jointly with another person, or by 
any agent employed by it to sell tickets to passengers, a sign located 
so as to be clearly visible and readable to the traveling public, 
containing a statement setting forth the air taxi and commuter air 
carrier's policy on baggage liability and denied boarding compensation.
    (b) An air taxi or commuter air carrier shall provide a written 
notice on or with a passenger's ticket concerning baggage liability as 
provided in Sec.  254.5 of this chapter. These ticket notices are 
required only for passengers whose ticket includes a flight segment 
that uses large aircraft (more than 60 seats).
    (c) If the substantive terms of the counter sign and ticket notice 
required by this section differ, the terms contained in the required 
ticket notice govern.


Sec.  298.31  Scope of service and equipment authorized.

    Nothing in this part shall be construed as authorizing the 
operation of large aircraft in air transportation, and the exemption 
provided by this part to air taxi operators and commuter air carriers 
that register with the Department extends only to the direct operation 
in air transportation in accordance with the limitations and conditions 
of this part of aircraft originally designed to have a maximum 
passenger capacity of 60 seats or less or a maximum payload capacity of 
18,000 pounds or less.


Sec.  298.32  Limitations on operations to eligible places.

    No person shall provide scheduled passenger service as a commuter 
air carrier at an eligible place unless it has been found by the 
Department to be fit, willing, and able to conduct such service and 
issued a Commuter Air Carrier Authorization as provided in subpart E of 
this part.


Sec.  298.33  Security requirements.

    In conducting operations under this part, an air taxi operator or a 
commuter air carrier is required to adhere to all security requirements 
established by the Department of Transportation and the Department of 
Homeland Security applicable to such operations.


Sec.  298.34  [Reserved]


Sec.  298.35  Limitations on carriage of mail.

    An air taxi operator or commuter air carrier is not authorized to 
carry mail except pursuant to contract with the U.S. Postal Service 
entered into pursuant to section 5402 of the Postal Reorganization Act 
(39 U.S.C. 5402).


Sec.  298.36  Limitations on use of business name.

    (a) An air taxi operator or commuter air carrier in holding out to 
the public and in performing its services in air transportation shall 
do so only in the name or names in which its air carrier certificate is 
issued pursuant to section 44702 of the Statute by the Federal Aviation 
Administration, and in which it is registered with the Department under 
this part, or in which its Commuter Air Carrier Authorization is issued 
or other trade name is registered.
    (b) Slogans shall not be considered names for the purposes of this 
section, and their use is not restricted hereby.
    (c) Commuter air carriers are subject to the provisions of part 215 
of this chapter with regard to the use and change of air carrier names.
    (d) Neither the provisions of this section nor the grant of a 
permission hereunder shall preclude Department intervention or 
enforcement action should there be evidence of a significant potential 
for, or of actual, public confusion.


Sec.  298.37  Prohibition of services not covered by insurance.

    An air taxi operator or commuter air carrier shall not operate in 
air transportation or provide or offer to provide air transportation 
unless there is in effect liability insurance which covers such 
transportation and which is evidenced by a current certificate of 
insurance on file with the Department as required by part 205 of this 
chapter.


Sec.  298.38  Financial security arrangements for operating Public 
Charters.

    When an air taxi operator or commuter air carrier performs a Public 
Charter under part 380 of this chapter, either:
    (a) The air taxi operator or commuter air carrier shall meet the 
bonding or escrow requirements applicable to certificated air carriers 
as set forth in Sec.  212.8 of this chapter; or
    (b) The air taxi operator or commuter air carrier shall ensure that 
it does not receive any payments for the charter until after the 
charter has been completed. In this case, its contracts with the 
charter operator and the charter operator's depository bank, if any, 
shall state that the charter operator or bank, as applicable, shall 
retain control of and responsibility for all participant funds intended 
for payment for air transportation until after the charter has been 
completed, notwithstanding any provision of part 380 of this chapter.

Subpart E--Commuter Air Carrier Authorizations


Sec.  298.50  Application.

    (a) Any person desiring to provide air transportation as a commuter 
air carrier must first obtain a Commuter Air Carrier Authorization. 
This shall be accomplished by filing with the Department--
    (1) An application in accordance with the requirements of parts 201 
and 302 of this chapter;
    (2) Data in accordance with part 204 of this chapter to support a 
determination by the Department that the person is ``fit, willing, and 
able'' to operate the proposed commuter service; and
    (3) A $670 filing fee in the form of a check, draft, or postal 
money order payable to the Department of Transportation.
    (b) An executed original and two true copies of an application for 
a Commuter Air Carrier Authorization shall be filed with Department of 
Transportation Dockets, 400 7th Street SW, PL-401, Washington, DC 
20590.


Sec.  298.51  Processing by the Department.

    In processing applications filed in accordance with Sec.  298.50, 
the Department will generally follow the procedures set forth in 
Sec. Sec.  302.207 through 302.211 of this chapter.


Sec.  298.52  Air taxi operations by commuter air carriers.

    (a) A commuter air carrier that holds an effective Commuter Air 
Carrier Authorization and otherwise meets the requirements of this part 
is also authorized to conduct air taxi operations (e.g., scheduled 
cargo, mail under a U.S. Postal Service contract, on-demand passenger, 
on-demand cargo, or other service such as air ambulance operations, 
firefighting or seasonal operations) without having to meet the 
registration requirements of subpart C of this part, except as provided 
in paragraph (b) of this section.
    (b) Should a commuter air carrier cease conducting all scheduled 
passenger operations and its Commuter Air Carrier Authorization is 
suspended pursuant to Sec. Sec.  298.53 and/or 204.7 of this chapter, 
it may continue to conduct air taxi operations provided that the 
carrier maintains in effect liability insurance coverage as required 
for such operations by part 205 of this chapter

[[Page 25773]]

and, within 10 days of the cessation of scheduled passenger operations, 
registers as an air taxi operator in accordance with subpart C of this 
part; and provided further that the carrier continues to hold authority 
from the Federal Aviation Administration to conduct such air taxi 
operations.


Sec.  298.53  Suspension or revocation of authority.

    A Commuter Air Carrier Authorization may be suspended or revoked if 
any of the following occur:
    (a) The operator fails to maintain insurance coverage as required 
by part 205 of this chapter for commuter operations;
    (b) The scheduled passenger authority under the operator's Air 
Carrier Certificate is suspended or revoked by the Federal Aviation 
Administration;
    (c) The operator does not commence operations for which it has been 
found fit, or the operator ceases those operations as provided in Sec.  
204.7 of this chapter;
    (d) The Department finds that the carrier is not fit, willing, and 
able to conduct scheduled service or fails to qualify as a citizen of 
the United States; or
    (e) The Department determines that it is otherwise in the public 
interest to do so.

PART 380--PUBLIC CHARTERS

0
14. The authority citation for part 380 continues to read as follows:

    Authority: 49 U.S.C. 40101, 40102, 40109, 40113, 41101, 41103, 
41301, 41504, 41702, 41708, 41712, 46101.


Sec.  380.2  [Amended]

0
15. In Sec.  380.2, in the definition of Direct Air Carrier add the 
word ``, commuter'' after ``certificated''; remove the words ``or 
commuter air carrier'' and add ``authorization,'' between 
``certificate'' and ``permit''.

PART 385--STAFF ASSIGNMENTS AND REVIEW OF ACTION UNDER ASSIGNMENTS

0
16. The authority citation for part 385 continues to read as follows:

    Authority: 49 U.S.C. Subtitle I, Chapters 401, 411, 413, 415, 
417.


Sec.  385.12  [Amended]

0
17. In Sec.  385.12(e), remove the words ``and commuter air carriers''.

PART 389--FEES AND CHARGES FOR SPECIAL SERVICES

0
18. The authority citation for part 389 continues to read as follows:

    Authority: Sec. 204, 1002, Pub. L. 85-726, as amended, 72 Stat. 
743, 797; 49 U.S.C. 1324, 1502. Act of August 31, 1951, ch. 376, 65 
Stat. 268; 31 U.S.C. 483a.


Sec.  389.25  [Amended]

    19. In Sec.  389.25(a), in the table, under the entry for Code 7, 
remove the words ``Scheduled Passenger Commuter Registration'' and add, 
in their place, ``Commuter Air Carrier Authorization''.

    Issued on May 10, 2005.
Karan K. Bhatia,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 05-9655 Filed 5-13-05; 8:45 am]
BILLING CODE 4910-62-P