[Federal Register Volume 79, Number 100 (Friday, May 23, 2014)]
[Proposed Rules]
[Pages 29970-30002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-11993]



[[Page 29969]]

Vol. 79

Friday,

No. 100

May 23, 2014

Part III





 Department of Transportation





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14 CFR Parts 234, 244, et al.





Transparency of Airline Ancillary Fees and Other Consumer Protection 
Issues; Proposed Rule

  Federal Register / Vol. 79 , No. 100 / Friday, May 23, 2014 / 
Proposed Rules  

[[Page 29970]]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 234, 244, 250, 255, 256, 257, 259, and 399

[Docket No. DOT-OST-2014-0056]
RIN 2105-AE11


Transparency of Airline Ancillary Fees and Other Consumer 
Protection Issues

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department is seeking comment on a number of proposals to 
enhance protections for air travelers and to improve the air travel 
environment, including a proposal to clarify and codify the 
Department's interpretation of the statutory definition of ``ticket 
agent.'' By codifying the Department's interpretation, the Department 
intends to ensure that all entities that manipulate fare, schedule, and 
availability information in response to consumer inquiries and receive 
a form of compensation are adhering to all of the Department's consumer 
protection requirements that are applicable to ticket agents such as 
the full-fare advertising rule and the code-share disclosure rule.
    This NPRM also proposes to require airlines and ticket agents to 
disclose at all points of sale the fees for certain basic ancillary 
services associated with the air transportation consumers are buying or 
considering buying. Currently, some consumers may be unable to 
understand the true cost of travel while searching for airfares, due to 
insufficient information concerning fees for ancillary services. The 
Department is addressing this problem by proposing that carriers share 
real-time, accurate fee information for certain optional services with 
ticket agents.
    Other proposals in this NPRM to enhance airline passenger 
protections include: Expanding the pool of ``reporting'' carriers; 
requiring enhanced reporting by mainline carriers for their domestic 
code-share partner operations; requiring large travel agents to adopt 
minimum customer service standards; codifying the statutory requirement 
that carriers and ticket agents disclose any airline code-share 
arrangements on their Web sites; and prohibiting unfair and deceptive 
practices such as undisclosed biasing in schedule and fare displays and 
post-purchase price increases. The Department is also considering 
whether to require ticket agents to disclose the carriers whose tickets 
they sell in order to avoid having consumers mistakenly believe they 
are searching all possible flight options for a particular city-pair 
market when in fact there may be other options available. Additionally, 
this NPRM would correct drafting errors and make minor changes to the 
Department's second Enhancing Airline Passenger Protections rule to 
conform to guidance issued by the Department's Office of Aviation 
Enforcement and Proceedings (Enforcement Office) regarding its 
interpretation of the rule.

DATES: Comments must be received by August 21, 2014. Comments received 
after this date will be considered to the extent practicable.

ADDRESSES: You may file comments identified by the docket number DOT-
OST-2014-0056 by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting 
comments.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Ave., SE., Room W12-140, Washington, DC 
20590-0001.
     Hand Delivery or Courier: The Docket Management Facility 
is located on the West Building, Ground Floor, of the U.S. Department 
of Transportation,1200 New Jersey Ave. SE., Room W12-140, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
     Fax: 202-493-2251.
    Instructions: You must include the agency name and the Docket 
Number DOT-OST-2014-0056 or the Regulatory Identification Number (RIN) 
for the rulemaking at the beginning of your comment. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal information provided.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received in any of our dockets by the name of the individual 
submitting the comment (or signing the comment if submitted on behalf 
of an association, a business, a labor union, etc.). You may review 
DOT's complete Privacy Act statement in the Federal Register published 
on April 11, 2000 (65 FR 19477-78), or you may visit http://DocketsInfo.dot.gov.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov or to the street 
address listed above. Follow the online instructions for accessing the 
docket.

FOR FURTHER INFORMATION CONTACT: Kimberly Graber or Blane A. Workie, 
Office of the Assistant General Counsel for Aviation Enforcement and 
Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. 
SE., Washington, DC 20590, 202-366-9342 (phone), 202-366-7152 (fax), 
[email protected] or [email protected] (email).

SUPPLEMENTARY INFORMATION: 

Executive Summary

1. Purpose of the Regulatory Action

    The U.S. Department of Transportation (DOT) is issuing this notice 
of proposed rulemaking (NPRM) to improve the air travel environment of 
consumers based on its statutory authority to prohibit unfair or 
deceptive practices in air transportation, 49 U.S.C. 41712. The 
Department is taking action to strengthen the rights of air travelers 
when purchasing airline tickets from ticket agents, ensure that 
passengers have adequate information about regional carriers' 
operations to make informed decisions when selecting flights, increase 
notice to consumers of some of the fees carriers charge for optional or 
ancillary services, and prohibit unfair and deceptive practices such as 
post-purchase price increases and undisclosed biasing in fare and 
schedule displays.

2. Summary of Regulatory Provisions

------------------------------------------------------------------------
                 Subject                      Proposed rule
------------------------------------------------------------------------
1.......  Codification of the   Codifies the Department's broad
           Department's          interpretation of the statutory
           Interpretation of     definition of the term ``ticket agent''
           ``Ticket Agent''.     to include Global Distribution Systems
                                 (GDS), websites with flight metasearch
                                 engines, and similar intermediaries in
                                 the sale of air transportation, if the
                                 intermediary is compensated in
                                 connection with the sale of air
                                 transportation.
2.......  Disclosure of         Two alternative proposals regarding
           Certain Ancillary     disclosure of fee information for basic
           Fee Information to    ancillary services.
           Consumers (``GDS
           Issue'').
                                    Proposal 1:
                                    Requires carriers to disclose fee
                                    information for basic ancillary
                                    services to all ticket agents to
                                    which a carrier provides its fare
                                    information, including GDSs.

[[Page 29971]]

 
                                    Proposal 2:
                                    Requires carriers to disclose fee
                                    information for basic ancillary
                                    services to all ticket agents to
                                    which a carrier provides its fare
                                    information and which sell air
                                    transportation directly to
                                    consumers; this would exclude ticket
                                    agents that arrange but don't sell
                                    air transportation, such as GDSs.
                                Both proposals would:
                                    Define basic ancillary
                                    services as first checked bag,
                                    second checked bag, one carry-on
                                    item, and advance seat selection, to
                                    the extent these options are offered
                                    by the carrier.
                                    Not require a carrier to
                                    allow ticket agents to sell these
                                    services; or if a carrier permits
                                    ticket agents to sell those
                                    services, it would not require
                                    carriers to charge the same fee for
                                    the service as the agents. If a
                                    carrier is not selling the service
                                    through a ticket agent, the carrier
                                    and ticket agent are responsible for
                                    disclosing to consumers when and how
                                    fees should be paid, and for baggage
                                    fees, must honor the fee quoted at
                                    the time of purchase.
                                    Require all ticket agents
                                    and airlines that provide fare
                                    information to consumers to also
                                    provide fee information for basic
                                    ancillary services to consumers.
                                    This information should be made
                                    available to the consumer at the
                                    point in which fares are being
                                    compared.
                                    Prohibit ticket agents with
                                    existing contractual agreements with
                                    a carrier for the distribution of
                                    the carrier's fare and schedule
                                    information from charging additional
                                    or separate fees for distribution of
                                    information about basic ancillary
                                    services--i.e., a ticket agent
                                    cannot unilaterally change contract
                                    terms to require additional payments
                                    to upload and disseminate the
                                    required ancillary service fee
                                    information. Existing contracts
                                    should be honored until the contract
                                    expires unless mutually renegotiated
                                    by the parties.
3.......  Expansion of          Expands the pool of reporting carriers
           Reporting Carriers    from any carrier that accounts for at
           for Service Quality   least 1% of domestic scheduled
           Data.                 passenger revenue to any carrier that
                                 accounts for at least 0.5% of domestic
                                 scheduled passenger revenue.
                                (This definition would cover carriers
                                 such as Spirit Airlines, Allegiant
                                 Airlines, and Republic Airlines.)
4.......  Data Reporting for    Requires reporting carriers to include
           Domestic Code-Share   data for their domestic scheduled
           Partner Operations.   flights operated by their code-share
                                 partners:
                                    On-time Performance
                                    Mishandled Baggage
                                    Oversales
5.......  Customer Service      Requires large ticket agents (those with
           Commitments (Large    annual revenue of $100 million or more)
           Ticket Agents).       to adopt certain customer service
                                 commitments, including a commitment to:
                                    Provide prompt refunds where
                                    ticket refunds are due, including
                                    fees for optional services that
                                    consumers purchased from them but
                                    were not able to use due to flight
                                    cancellation or oversale situation;
                                    Provide an option to hold a
                                    reservation at the quoted fare
                                    without payment, or to cancel
                                    without penalty, for 24 hours;
                                    Disclose cancellation
                                    policies, seating configurations,
                                    and lavatory availability on
                                    flights;
                                    Notify customers in a timely
                                    manner of itinerary changes; and
                                    Respond promptly to customer
                                    complaints.
6.......  Transparency in       Amends the Department's code-share
           Display of Code-      disclosure regulation to codify the
           Share Operations as   statutory requirement that carriers and
           Required by 49        ticket agents must disclose any code-
           U.S.C. 41712(c).      share arrangements on their Web sites.
                                 Requires disclosure on the first
                                 display presented in response to a
                                 search of a requested itinerary for
                                 each itinerary involving a code-share
                                 operation. Disclosure must be in a
                                 format that is easily visible to a
                                 viewer.
7.......  Disclosure of the     Seeks comments regarding whether:
           Carriers Marketed
           (Applies to Large
           Travel Agents Only).
                                    To require large ticket
                                    agents to maintain and display lists
                                    of carriers whose tickets they
                                    market and sell; and if required,
                                    how to disclose the carriers that
                                    are marketed and sold by the ticket
                                    agent.
8.......  Prohibition of        Prohibits undisclosed biasing by
           Display Bias.         carriers and ticket agents in any
                                 Internet displays of the fare and
                                 schedule information of multiple
                                 carriers.
9.......  Prohibition on Post-  Revises the existing prohibition on post-
           Purchase Price        purchase increases with respect to the
           Increases For         price of ancillary services that are
           Ancillary Services.   not purchased with the air
                                 transportation so carriers and other
                                 sellers of air transportation are only
                                 prohibited from increasing the price
                                 for the carriage of baggage. The price
                                 for other ancillary services not
                                 purchased at the time of ticket
                                 purchase may be increased until the
                                 consumer purchases the service itself.
------------------------------------------------------------------------

3. Summary of Preliminary Regulatory Analysis

[[Page 29972]]



    Summary of Monetized Costs and Monetized Benefits Over 10 Years,
                         Discounted at 7 Percent
                              [Millions $]
------------------------------------------------------------------------
               Provisions                      Costs         Benefits
------------------------------------------------------------------------
1: Definition of ticket agent...........             N/A             N/A
2: Disclosure of certain ancillary fees          $ 46.15          $ 25.1
 information to consumers...............
3 & 4: Reduce reporting threshold to               29.75             N/A
 0.50% and submit additional set of
 reports that includes code-share
 partners...............................
5: Minimum customer service standards               2.97             N/A
 for ticket agents......................
6: Display bias prohibition.............             N/A             N/A
7: Disclosure of code-share segments in              N/A             N/A
 schedules, advertisements and
 communications with consumers..........
8: Disclosure of carriers marketed......             N/A             N/A
9: Prohibition of post-purchase price                N/A             N/A
 increase for ancillary services........
                                         -------------------------------
    Total (Proposed Provisions).........           80.51            25.1
------------------------------------------------------------------------

    The quantifiable costs of this rulemaking exceed the quantifiable 
benefits. However, when unquantified costs and benefits are taken into 
account, we anticipate that the benefits of this rulemaking would 
justify the costs. It was not possible to measure the benefits of the 
proposals in this rulemaking, except for the benefits for provision 2. 
For example, there are a number of unquantified benefits for the 
proposals such as improved on time performance for newly reporting 
carriers and code-share flights of reporting carriers, improved 
customer goodwill towards ticket agents, and greater competition and 
lower overall prices for ancillary services and products. There are 
also some unquantified costs such as increased management costs to 
improve carrier performance, increased staff time to address consumer 
complaints, and decreased carrier flexibility to customize services, 
though we believe these costs would be minimal. If the value of the 
unquantified benefits, per passenger, is any amount greater than one 
cent and the unquantified costs are minimal as anticipated, then the 
entire rule is expected to be net beneficial.

Background

    This NPRM addresses several recommendations to the Department 
regarding aviation consumer protection as well as two issues identified 
in the second Enhancing Airline Passenger Protections final rule. In 
that final rule, the Department instituted many passenger protections 
including expanding the rules regarding lengthy tarmac delays to non-
U.S. carriers, requiring U.S. and non-U.S. carriers to adopt and adhere 
to minimum customer service standards, increasing the amounts of 
involuntarily denied boarding compensation, enhancing Web site 
disclosures for baggage fees and other ancillary service fees, and 
prohibiting post-purchase price increases. See 76 FR 23110 (April 25, 
2011). However, the Department declined to impose a requirement on 
airlines to provide their fee information for ancillary services to 
Global Distribution Systems (GDSs), stating that the Department needed 
to learn more about the complexities of the issue. This NPRM addresses 
the issue of disclosure of ancillary services fee information. 
Additionally, subsequent to the publication of the 2011 final rule, in 
response to questions received regarding the post-purchase price 
increase rule, the Department's Office of Aviation Enforcement and 
Proceedings (Enforcement Office) issued Guidance on Price Increases of 
Ancillary Services and Products not Purchased with the Ticket on 
December 28, 2011 available at http://www.dot.gov/airconsumer. In that 
guidance, the Enforcement Office noted the Department's decision to 
revisit in this NPRM the rule as it relates to post-purchase price 
increases for certain ancillary services not purchased with the ticket.
    This NPRM also addresses certain recommendations made by two 
Federal advisory committees--the Future of Aviation Advisory Committee 
(FAAC) and the Advisory Committee on Aviation Consumer Protection. The 
FAAC was established on April 16, 2010, with the mandate to provide 
information, advice, and recommendations to the Secretary of 
Transportation on ensuring the competitiveness of the U.S. aviation 
industry and its capability to address the evolving transportation 
needs, challenges, and opportunities of the global economy. On December 
15, 2010, the FAAC delivered a report to the Secretary with 23 
recommendations. FAAC Recommendation 11 addressed disclosure of 
ancillary service fees, code-share operations, and air travel 
statistics. This NPRM incorporates many aspects of FAAC Recommendation 
11. For more information regarding the FAAC, please visit http://www.dot.gov/faac.
    More recently, on May 24, 2012, the Advisory Committee on Aviation 
Consumer Protection was established to advise the Secretary in carrying 
out activities related to airline customer service improvements. On 
October 22, 2012, this Committee submitted its first set of 
recommendations to the Secretary on a wide range of aviation consumer 
issues, including adopting FAAC Recommendation 11, which urged greater 
transparency in the disclosure of ancillary fees and code-share 
operations. This NPRM addresses the recommendations by the Committee to 
ensure transparency in air carrier pricing, to require on-time 
performance data be reported to the Department for all flights and 
airlines, and to mandate disclosures by online travel agencies and 
other agents as to which carriers' services they sell. Records relating 
to the advisory committee, including a transcript and minutes of its 
meetings and its full recommendation report, are contained in the 
Department's docket, which is available at http://www.regulations.gov 
under docket number DOT-OST-2012-0087.

Notice of Proposed Rulemaking

1. Clarifying the Definition of ``Ticket Agent''

    This NPRM proposes a regulatory definition for the statutory term 
``ticket agent'' to clarify for the industry what type of entity the 
Department considers to be a ticket agent and to ensure that its 
consumer protection regulations apply to all entities that hold out 
airfare, schedule, and availability information to consumers. Consumers 
and stakeholders in the air transportation industry have identified 
relatively new entities, such as meta-search engines, as primary 
information sources and entry points for the purchase of air 
transportation. However, such entities do not consistently provide the

[[Page 29973]]

information that the Department views as vital to consumer protection 
such as code-share disclosure. For example, consumers may begin their 
search for air transportation options by selecting their flights on one 
Web site and then completing their purchase on another Web site and, in 
the process, not be provided disclosures regarding code-share 
operations, baggage fee information, and other consumer protection 
information that the Department requires air carriers, foreign air 
carriers, and ticket agents provide to consumers early in the process.
    The Department is considering codifying in its regulations its 
interpretation of the statutory definition of ``ticket agent'' to make 
clear that all entities involved in the sale or distribution of air 
transportation, including those intermediaries that do not themselves 
sell air transportation but arrange for air transportation and receive 
compensation in connection with the sale of air transportation, are 
ticket agents subject to the Department's regulations regarding the 
display of airfare information. The definition would include all 
commercial entities that are involved in arranging for the sale of air 
transportation through the Internet (among other channels), regardless 
of whether an entity received a share of revenue from a third party for 
transactions that originated on the entity's Web site, or the entity 
charged a commission for each transaction that originated on its Web 
site, or the entity was simply compensated on a cost-per-click for 
advertisements, or was compensated on some other basis.
    The means by which airline itineraries are commonly displayed and 
sold has changed dramatically and continues to evolve. New entities 
that were not previously involved in the distribution of air 
transportation are now an important source of information for consumers 
as well as a means of distribution for carriers. Online entities, such 
as Web sites that provide a variety of travel information, advertising, 
and links as well as meta-search engines that provide flight search 
tools including fare and schedule information, are now frequently used 
by consumers to research airfares and schedules and to connect to the 
airline or travel agent Web site that ultimately books and/or fulfills 
the consumer's ticket purchase. Meanwhile, some airlines provide direct 
electronic access to their own internal systems providing fare, 
schedule, and availability information to certain Internet entities 
with the condition that when displaying that carrier's flight 
itineraries in flight search results, the entity must provide a link 
only to the airline's Web site and not to travel agent Web sites that 
have similar information. Staff members from the Department have been 
informed that, in some cases, entities such as meta-search engines and 
other Web sites that operate flight search tools receive a commission 
or some other compensation for transactions that originate on their Web 
sites, for example, from a flight search tool that allowed the consumer 
to select a particular itinerary. However, in other cases, entities 
that are involved in arranging for air transportation by allowing a 
consumer to select an itinerary using a flight search tool are 
compensated for advertising and not for the individual transaction. But 
regardless of the manner of compensation, consumers are increasingly 
relying on those Internet entities in making their air transportation 
purchasing decisions. In some cases, these Internet entities display 
schedules, fares and availability but direct consumers to other Web 
sites to purchase and are not the final point of sale for an airline 
ticket. They may be earning revenue through advertising sales and 
providing flight search capabilities based on data gathered from other 
sources. These entities would be included under our proposed definition 
of ticket agent along with traditional ticket agents. The Department 
seeks comment on the differences between traditional ticket agents and 
entities that provide flight search tools but direct consumers to 
another site to finalize their purchase. Are there considerations 
regarding entities that are not the final point of sale for air 
transportation that should be considered in connection with the 
regulations proposed in this rulemaking? DOT also seeks comment on the 
impact on these entities of complying with the Department's existing 
regulations applicable to ticket agents. For example, what are the 
impacts on ticket agents that are not the final point of sale for air 
transportation of the regulations in 14 CFR 399.80 (e.g., prohibition 
against misrepresentation of quality or kind of service, type or size 
of aircraft, time of departure or arrival, and so forth; prohibition 
against misrepresentation of fares and charges)? Are those impacts 
different from the impacts on traditional ticket agents or other agents 
that have a different business model?
    As noted above, consumers may begin their search by selecting their 
flights on one Web site and then completing their purchase on another 
Web site and, in the process, bypass the pages containing disclosures 
regarding code-share operations, baggage fee information, and other 
consumer protection information that the Department requires air 
carriers, foreign air carriers, and ticket agents to provide to 
consumers before an air transportation purchase is finalized. 
Accordingly, the Department is considering a definition of ``ticket 
agent'' that would clarify that global distribution systems, meta-
search Internet sites that offer a flight search tool and are 
compensated for advertisements that are displayed on the same Web site 
(even if the advertising content is not directly related to air 
travel), and other such compensated intermediaries, regardless of the 
manner in which they are compensated for their role in arranging air 
transportation, are ticket agents for the purposes of the Department's 
air transportation consumer protection regulations. Such a broad 
definition would ensure that all commercial entities that receive 
compensation in connection with air transportation advertising/
marketing and that are involved in arranging for air transportation 
would be required to provide consumers with certain essential 
information early in the process (e.g., information regarding code-
share operations, disclosure about baggage fees). A broad definition of 
``ticket agent'' would better ensure passengers are protected 
regardless of the path they choose to arrange for air transportation. 
Additionally, this rulemaking proposes to prohibit ticket agents from 
incorporating undisclosed bias into their displays, and solicits 
comment on whether ticket agents should be required to disclose 
information about incentive payments and/or identify the carriers the 
ticket agent markets or does not market.
    We are not aware of whether there is a widespread problem of 
consumers being confused by Web sites that do not sell tickets but do 
provide fare, schedule, and availability information that consumers are 
relying on in planning their travel. However, we believe that there is 
a risk of harm because some Web sites do not provide all of the 
disclosures required by the Department. We seek comment from any 
consumers who have faced these types of problems.
    Past litigation has made clear that GDSs are ticket agents. Sabre 
v. Department of Transportation, 429 F.3d 1113 (D.C. Cir. 2005). 
However, meta-search engines that offer a flight search tool have 
entered into the marketing and distribution of fare and schedule 
information. In addition, new entities have emerged that receive direct 
or indirect compensation from the advertising and/or sale of air 
transportation, while offering flight

[[Page 29974]]

search tools and fare displays. The Department sees a benefit in 
clarifying that those entities are ticket agents, regardless of whether 
or not they are the final point of sale for air transportation, and are 
required to comply with air transportation consumer protection 
regulations that apply to ticket agents. Additionally, at this point, 
the Department cannot predict the new types of entities that will 
engage in the marketing and distribution of fare and schedule 
information or how the marketing and distribution of fare and schedule 
information will change with new developments in technology. However, 
it appears that some of these entities may have taken, or will take in 
the future, a quasi-GDS role. Accordingly, the Department believes its 
regulations should be clear and should apply equally to entities that 
are new to the air transportation marketplace as well as existing 
entities already involved in the marketing and distribution of air 
transportation. To be clear, only entities operating Web sites that 
provide flight search tools that manipulate, manage, and display fare, 
schedule, and availability information and are tools that the Web site 
operator creates or manipulates and has ultimate control over would be 
covered. For example, entities such as Kayak and Google that offer 
flight search tools with fare, schedule, and availability information 
would be covered. An entity that operated a Web site that simply 
displayed airfare advertisements without actual flight search 
capability under its control would not be covered.
    The Department seeks comment on whether the definition of ``ticket 
agent'' should be codified in the regulation so as to clarify the 
Department's view that it is a broad term and includes entities such as 
meta-search engines that provide a flight search tool and other Web 
sites that act as intermediaries between consumers and the ultimate 
entity that sells the air transportation, whether an airline or another 
ticket agent. The Department also seeks comment on whether the proposed 
definition of a ticket agent, which includes an entity that arranges 
for or sells air transportation for compensation (regardless of the 
form of compensation), is sufficiently broad and meets the Department's 
goal of encompassing the variety of entities that use the Internet to 
arrange for the sale of air transportation. For example, under the 
proposed definition, an entity that provides a flight search tool that 
allows consumers to select an itinerary that can be purchased on 
another site and displays air transportation advertisements for which 
the entity is compensated on a ``cost-per-click'' basis would fall 
under the definition of a ticket agent. The Department also seeks 
comment on whether the definition of a ticket agent should include all 
entities that operate flight search tools that display itineraries and 
allow consumers to begin the booking process but are not compensated 
for the specific transaction. We also request comments on the costs and 
benefits to consumers, airlines, meta-search engines, and other 
entities involved in arranging for and selling air transportation, of 
codifying the definition of ``ticket agent'' to include air 
transportation intermediaries such as meta-search engines that offer a 
flight search tool.
    As a related matter, the Department is considering whether carriers 
should be prohibited from restricting the information provided by 
ticket agents when those ticket agents do not sell air transportation 
directly to consumers but rather provide consumers with different 
airlines' flight information for comparison shopping. For example, the 
Department has been informed that some carriers may not allow certain 
entities with Web sites that operate flight search tools to display the 
carrier's fare, schedule and availability information. Should carriers 
be prohibited from imposing restrictions on ticket agents that prevent 
ticket agents from including a carrier's schedules, fares, rules, or 
availability information in an integrated display?
    Also, we understand that a number of carriers restrict the links 
ticket agents may place next to a particular flight itinerary on a 
display, and in many cases only permit a link to the carrier's own Web 
site. Why might carriers place such restrictions on travel agents? 
Should the Department require carriers to allow ticket agents to 
provide links to the Web sites of the entities listed in an integrated 
display, including non-carrier Web sites?

2. Display of Ancillary Service Fees Through All Sales Channels

Need for Rulemaking

    Many services or products previously included in the price of an 
airline ticket such as checked baggage, advance seat assignments and 
priority boarding are now sold separately. Traditional and online 
travel agents generally access their airline ticket inventory through 
large Global Distribution Systems (GDSs) and often do not have access 
to the fees associated with ancillary services/products and thus cannot 
disclose this information to consumers without looking directly at 
carriers' Web sites. In discussions with the Department, consumers and 
corporate travel companies have identified the lack of complete 
transparency of fees for unbundled services and products as a problem. 
Specifically, when consumers are making decisions on whether to 
purchase air transportation and if so, from which entity, they continue 
to have difficulty determining the total cost of travel because the 
fees for the basic ancillary services are not available through all 
sales channels. This lack of transparency also creates challenges in 
the corporate and managed travel community. Currently, approximately 
50% of air transportation is booked through a channel that involves a 
ticket agent rather than the airline's own reservation agents or its 
Web site, whether it is through a traditional brick-and-mortar travel 
agency, a corporate travel agent, or an online travel agency.\1\ 
Consumers and corporate travel companies often search various Web sites 
to try to determine the fees for ancillary services. They have raised 
concerns with the Department regarding how the lack of clear disclosure 
of ancillary fees makes it difficult to determine the true cost of 
travel and compare different airline flight and fare options.
---------------------------------------------------------------------------

    \1\ According to estimates by PhoCusWright (2011), 31 percent of 
passengers purchased tickets through Travel Management Companies 
(TMCs) (e.g., American Express, Carlson Wagonlit), and 16 percent 
via an online travel agency (OTA). Since both TMCs and OTAs use GDSs 
to book air tickets, the share of passengers who will benefit from 
improved salience on ancillary service fees would be the total of 
both ticket distribution channels (47 percent), unless TMCs or OTAs 
connect directly to airlines. Other higher proxy estimates were also 
found. InterVISTAS estimated that 50 percent of US national round 
trip passengers book their ticket via a GDS.
---------------------------------------------------------------------------

    In the NPRM that led to the second Enhancing Airline Passenger 
Protections rule, the Department reiterated its goal of increasing 
notice to consumers of the fees carriers charge for optional or 
ancillary services, including checked baggage fees and carry-on baggage 
fees, by proposing a series of disclosure requirements related to 
ancillary service fees. When drafting the disclosure regime in the 
second Enhancing Airline Passenger Protections rule, the Department 
recognized that a problem in the marketplace existed because ticket 
agents did not have access to real-time and accurate fee data for 
ancillary services. Therefore, in the NPRM, the Department asked 
whether it should require that carriers provide fee information for 
ancillary services and products to the GDSs in which each carrier 
participates, in an up-to-date and useful fashion. Although the

[[Page 29975]]

Department did not propose rule text, it invited comment on the ``GDS 
proposal.'' The comment period closed on September 24, 2010.
    The Department received numerous comments regarding the GDS 
proposal from interested industry parties and consumer advocacy groups 
both before and after the closing of the comment period. The comments 
demonstrated to the Department that before it issued a final rule it 
needed more information on the contractual and historical relationships 
between the GDSs and the carriers, as well as an in-depth cost-benefit 
analysis of such a requirement. Therefore, in the Final Rule for 
Enhancing Airline Passenger Protections published in the Federal 
Register on April 25, 2011, 76 FR 23110, the Department did not include 
a requirement that carriers provide all ancillary service fee 
information to GDSs. Instead, it stated that it would continue to 
consider the issue, gather more information, and defer final action on 
this topic.
    In the 2011 final rule, the Department did impose various 
disclosure requirements on both carriers and travel agents via the new 
14 CFR 399.85. However, in recognition of the fact that the Department 
had not required the dissemination of ancillary service fee information 
through GDSs and, therefore, agents would not necessarily have access 
to the most up-to-date and accurate ancillary service fee information, 
the Department promulgated different baggage disclosure requirements 
for ticket agents from those required of carriers. For example, the 
rule allows ticket agents with Web sites marketed to consumers in the 
United States to disclose baggage fees through hyperlinks displayed 
with itinerary search results and included in e-ticket confirmations 
which link to static lists. Also, 14 CFR 399.85(a) requires carriers 
but not ticket agents to disclose on their homepage for three months 
any change to their baggage fees. Additionally, under 14 CFR 399.85(d), 
carriers must provide a listing of all optional service fees on one Web 
page. There must be a link to that listing on the homepage. Agents are 
not required to have this listing, as they do not necessarily have 
access to all carriers' current optional service fee information on a 
real-time basis.
    While the Department considers the disclosure requirements in its 
2011 final rule to be a step in the right direction, these requirements 
do not fully address the problem of lack of transparency of ancillary 
services and products. Consumers who book transportation through a 
ticket agent still do not receive accurate and real-time information 
about fees for ancillary services and products and are unable to 
determine the total cost of travel. Consumers also can't use the list 
of optional services and fees that airlines post on their Web site to 
determine the cost of travel since airlines generally provide a range 
of fees for ancillary services aside from baggage and acknowledge that 
the fees vary based on a number of factors such as the type of aircraft 
used, the flight on which a passenger is booked or the time at which a 
passenger pays for the service or product. Further, the list of 
optional services and fees that the airlines post on their Web sites 
are static lists. In many cases, it is not possible for consumers to 
know the specific fees that would apply to them based on these lists as 
there are numerous possible fare and fee combinations and routings for 
any given trip. With respect to baggage, the existing disclosure 
requirements mandate specific information, but passengers must still 
review lengthy and complex charts to determine the exact fee that they 
would be charged for their baggage.
    The Department remains of the view that as carriers continue to 
unbundle services that used to be included in the price of air 
transportation, passengers need to be protected from hidden and 
deceptive fees and allowed to price shop for air transportation in an 
effective manner. However, we lack sufficient data to be able to 
quantify the extent of this problem for consumers. We request comment 
from consumers about whether it is difficult to find baggage and seat 
assignment fee information and how much of an impact this has on their 
ability to comparison shop among carriers. The Department also requests 
comment from consumers on whether and how much the fee disclosures 
required of carriers and travel agents in Passenger Protections II have 
improved their ability to find information on fees.
    Consumers and consumer groups have reiterated to the Department 
through comments in the second Enhancing Airline Passenger Protections 
rulemaking and comments to the docket for the Advisory Committee on 
Aviation Consumer Protection the difficulty in determining the specific 
fees that apply to ancillary services. Additionally, members of 
Congress, representing their constituents, have expressed support for 
full disclosure of ancillary fees during the rulemaking period for the 
second Enhancing Airline Passenger Protections rule. The Department 
also receives consumer complaints that reflect the confusion consumers 
experience regarding fees for ancillary services, particularly in 
connection with baggage and seat assignments. For example, consumers 
complain that when shopping for air transportation they do not know how 
much it will cost them to book seats together for family members or to 
transport all of their baggage. Similarly, representatives of business 
travelers complain that it is difficult to advise clients on the best 
and most cost-effective flights because the fee information for seat 
assignments or baggage is not readily available. Additionally, the 
issue has been raised at meetings of the Advisory Committee on Aviation 
Consumer Protection by various industry stakeholders and consumer 
advocates. The Department believes that regulation is needed to address 
the lack of transparency regarding the true cost of air transportation 
and is proposing to require that fees for certain ancillary services be 
disclosed to consumers through all sale channels. The Department seeks 
input on this proposal as well as any innovative solutions that we may 
not have considered to address the problem of lack of transparency.

Current Airline Distribution System

    In the final rule that was issued on April 25, 2011, the Department 
announced its intention to address in a future rulemaking the 
transparency of ancillary fees at all points of sale. Since that time, 
the Department has met with numerous stakeholders with an interest in 
the distribution of ancillary service fee information and conducted an 
inquiry regarding current distribution models as well as the 
contractual and historical relationships between the GDSs and the 
carriers. Representatives of carriers, GDSs, consumer advocacy 
organizations, and trade associations, as well as other interested 
entities, including third-party technology developers, have met with 
Department staff to explain their views. They have also provided 
information to the Department's economists. The description of the 
current airline distribution system provided below is largely based on 
the information that the Department received from these stakeholders.
    Today, airlines sell airfares in two ways: Directly through their 
Web sites, call centers, or employees at airports or indirectly through 
ticket agents. Approximately 50% percent of airline tickets are 
purchased indirectly through ticket agents, whether it is through a 
traditional brick-and-mortar travel agency, a corporate travel agent, 
or an online travel agency. Ticket agents that display or sell air 
transportation

[[Page 29976]]

typically get the fare, schedule and availability information about the 
air transportation through a GDS. In the United States, three GDSs 
(Sabre, Travelport and Amadeus) control the distribution of the airline 
product for the ticket agent channel. In recent years, Sabre had more 
than 50 percent of the market, Travelport had approximately 40 percent 
and Amadeus had less than 10 percent of the market in the U.S. though 
Amadeus has a much larger percentage of the market worldwide.
    Most U.S. airlines use GDSs to distribute their products. Some low 
cost carriers \2\ such as Southwest participate on a selective basis in 
GDSs while other low cost carriers do not use GDSs, presumably because 
there are costs attached to each transaction. GDSs charge airlines a 
booking fee based on the total number of flight segments in the 
consumer's itinerary. Airlines presently pay booking fees that can 
range from a few dollars to much more for each flight segment. For 
example, if a booking fee is $5 per segment and a passenger purchases 
an itinerary that consists of four flight segments, the airline will be 
charged approximately $20 in booking fees. A transaction through an 
airline's own system costs the carrier less. However, GDSs have 
emphasized that there have been substantial discounts of domestic 
booking fees for the major airlines since 2005.
---------------------------------------------------------------------------

    \2\ Low-cost carriers operate under a generally recognized low-
cost business model, which may include a single passenger class of 
service, limited in-flight services, and use of smaller and less 
expensive airports.
---------------------------------------------------------------------------

    Nevertheless, airlines have expressed frustration about paying what 
they view as more in fees to GDS than the value they feel they receive 
now that technology provides new ways of selling fares and ancillary 
services. Still these airlines are not able to forgo using GDSs to 
aggregate flight schedule and fare information because airlines earn a 
large percentage of their revenue from business travelers, and the 
majority of the world's managed business travel is booked through 
travel management companies which use GDSs. Unlike Southwest, the 
legacy carriers do not have the option to participate on a selective 
basis in GDSs (i.e., only for business travel). Overall, airline 
revenue from the GDS channel is higher than direct channels mainly due 
to the greater proportion of high-yield business bookings.\3\
---------------------------------------------------------------------------

    \3\ GDSs process 64 percent of the total U.S. airline gross 
sales by revenue. PhoCusWright, The Role and Value of the Global 
Distribution Systems in Travel Distribution, 2009.
---------------------------------------------------------------------------

    Airlines' efforts to reduce their reliance on GDSs and transition 
to direct connections with travel agents have also been difficult. By 
direct connect, we are referring to agreements between an airline and a 
travel agent in which the airline provides fare, schedule and 
availability information to the travel agent directly, bypassing GDSs. 
Various airlines have reported to the Department that they as well as 
new-entrant travel technology firms, such as Farelogix, have had 
difficulty in facilitating direct connections to ticket agents because 
of highly restrictive agreements between GDSs and ticket agents. 
Similar assertions were made by other third party technology providers. 
GDSs have contracts with both airlines and travel agents for use of 
their services. These contracts tend to be long-term agreements that 
are renewed every 3 to 5 years. Historically, contracts between 
carriers and the GDSs generally provided that carriers compensate the 
GDSs per flight segment booked. These contracts also generally require 
that carriers offer the same fares through GDSs that are offered 
through other channels, even if it is cheaper for the carrier to 
distribute the fares in a different manner, such as direct connect. 
Contracts between travel agencies and GDSs generally provide for 
incentive payments to travel agencies for booking travel through GDSs. 
GDSs also provide travel agencies with the technology used for mid- and 
back- office solutions such as quality control and office accounting. 
GDSs do not view the contracts as a barrier to entry for travel 
technology firms. They assert that the direct connect services will 
succeed or fail based on whether they meet the needs of travel agencies 
and the consumers they serve.
    It is also worth noting that IATA has filed an application with the 
Department for approval of its Resolution 787, the agreement that 
establishes the framework for its New Distribution Capability (NDC). 
NDC would be based on a common XML based technical standard for direct 
connect services. Airlines contend that this new standard would allow 
airlines to custom-tailor product offers that would include different 
combinations of ancillary services in addition to air transportation 
and would include a total price. The new standard, if approved by the 
Department, will be available for use by any party. While the 
Department acknowledges that carriers are working towards technological 
solutions to distribute information, such solutions are prospective. 
Additionally, even if a standard is agreed upon, its use is optional 
and the information transmitted using the standard would be determined 
by each carrier. Accordingly, the development of a standard would not 
solve the immediate problem that some current consumers are not 
receiving the information that they need to determine the total cost of 
travel including the cost of certain ancillary services.
    While fare, schedule, and availability information is currently 
provided by the airlines to the GDSs, and by GDSs to the agents that 
display and sell to consumers, information about the cost of ancillary 
services is not typically shared. One reason, as it has been explained 
to Department staff by airline representatives, is that GDSs do not 
have the modern technology airlines need to merchandise and sell their 
products the way they choose. The GDSs disagree with the airlines' 
assessment and contend that they are capable of handling the most 
complex airline transactions and have worked with airlines, airline 
associations, and airline-owned intermediaries like ATPCO, ARC and IATA 
to establish technical standards for the distribution of their 
products, including ancillary offerings. While expressing a general 
willingness to distribute ancillary products to travel agents subject 
to assurances that the technology is in place to conduct transactions 
in an efficient and cost[hyphen]effective manner, airlines expressed 
the need for the flexibility to do so on terms that meet their business 
needs. Airlines prefer to negotiate with the GDSs for the business 
terms acceptable to them. They argue that market forces and not 
government mandates are the best way to ensure that information about 
ancillary services and fees reaches consumers using the travel agent 
channel.
    Various airlines and airline associations have also asserted to the 
Department that if it were to require carriers to provide ancillary 
service fee information to all ticket agents that the carrier permits 
to distribute its fare and schedule information, including GDSs, the 
Department would reinforce the existing distribution patterns and 
stifle innovation in the air transportation distribution marketplace. 
These carriers argue that since existing business arrangements provide 
significant benefits to most ticket agents, including GDSs, those 
entities would strive to retain existing distribution technology and 
transaction patterns. The carriers have also expressed concern that if 
they are required to provide information to GDSs, the GDSs will use 
existing contractual agreements and market power to pressure carriers 
to provide the

[[Page 29977]]

information in the existing format for fare filing. If that occurs, 
some stakeholders allege that carriers would no longer have sufficient 
financial incentive to invest in new distribution technologies which 
might ultimately provide more useful and responsive information to 
consumers by allowing carriers to differentiate their services from 
competitors. GDSs have disputed the carriers' assertions and contend 
that Department action is needed because airlines and ticket agents 
have been unable come to agreements that would allow fee information 
about ancillary services to be disclosed to consumers at all points of 
sale.
    We agree with the GDSs that there is a need for rulemaking because 
we believe that consumers continue to have difficulty finding ancillary 
fee information. The Department is striving to find the most beneficial 
disclosure rule for consumers while avoiding any adverse impact on 
innovations in the air transportation marketplace, contract 
negotiations between carriers and their distribution partners, and a 
carrier's ability to set its own fees and fares in response to its own 
commercial strategy and market forces. Also, despite the disputes 
regarding contract terms and distribution methods, both carriers and 
GDSs have assured the Department that they share our goal of 
transparency of ancillary service fee information.

Request for Public Input on Airline Fees

    Given our continuing concern that consumers may not be getting 
sufficient information about carriers' fees, we solicit comment from 
consumers on the following questions:
     Do you have a problem finding fee information? And if so, 
how significant is that problem? If you have a problem finding fees, 
how does it affect your ability to comparison shop?
     What types of fees would you most like to have more 
information about during the shopping process, prior to purchase?
     When would you like to see that information displayed in 
your search process--as soon as you see a list of fares or later in the 
process? How would you like to see the information regarding ancillary 
fees displayed--as a link, as a specific dollar amount shown with the 
airfare quote, as a table or menu on the homepage or flight search 
results list? Should the Department require a standardized format for 
disclosure?
     Do you feel that our proposed disclosure requirements 
would improve your search experience? Have we selected the most 
ancillary fees that are most important to your decision making process? 
Will disclosure of all these fees at the point of search cause further 
confusion on ticket agent Web sites (as defined in this proposal), or 
diminish your user experience (because of screen clutter, diminished 
usability features, etc.)?
     Is either of our co-proposals outlined below likely to 
make fees easy to find?

Proposed Solutions and Alternatives Considered

    Based on the information gathered, the Department is co-proposing 
two regulatory texts and seeking input regarding those two proposals. 
One proposal is to require each carrier to distribute certain ancillary 
service fee information to all ticket agents (including GDSs) that the 
carrier permits to distribute its fare, schedule, and availability 
information. Carriers would not be required to distribute ancillary fee 
information to any GDS or other ticket agent that the carrier did not 
permit to distribute its fare, schedule, and availability information. 
Additionally, under this proposal, the Department would not require 
carriers to allow ticket agents to sell/transact its ancillary services 
to consumers but rather would require carriers to provide ``usable, 
current and accurate'' information on fees for certain ancillary 
services to all ticket agents so this information can be disclosed to 
consumers at all points of sale. Each airline would continue to 
determine where and how its ancillary services may be purchased. For 
instance, if a carrier chooses to allow a ticket agent to sell its 
ancillary services directly to consumers, we expect that the carrier 
and ticket agent would determine through negotiation whether the ticket 
agent would offer the ancillary services at the same prices that the 
carrier offers those services. In other words, the proposal would 
require airlines to provide certain ancillary fee information to ticket 
agents, including GDSs, in order to enable disclosure to consumers of 
fees associated with certain ancillary services at all points of sale 
but would not require that these ancillary services be transactable. 
Carriers and ticket agents would negotiate regarding the ability of 
ticket agents to sell a carrier's ancillary services and the price at 
which those services would be sold.
    The second proposal is similar to the first in all ways except one. 
Unlike the first proposal, the second would omit the requirement that 
the information on ancillary fees be distributed to GDSs or other 
intermediaries since GDSs and similar intermediaries would not be 
subject to any direct consumer notification requirements. Instead, the 
second alternative would require carriers to distribute certain 
ancillary service fee information to all ticket agents that the carrier 
permits to distribute its fare, schedule, and availability information 
if the ticket agent sells the carrier's tickets directly to consumers. 
Although this proposal would not require carriers to provide ancillary 
fee information to entities that act as intermediaries and do not deal 
directly with the public such as GDSs, GDSs are the source through 
which most travel agents obtain their fare information, so as a 
practical matter, they may be the most efficient vehicle currently 
available for carriers to use for dissemination of information on 
ancillary fees. Additionally, the second proposal would not require 
carriers to provide ancillary fee information to entities such as meta-
search tools like Kayak and Google.
    The Department has proposed these two options as it remains of the 
view that as carriers continue to unbundle services that used to be 
included in the price of air transportation, passengers need to be 
protected from hidden and deceptive fees and allowed to price shop for 
air transportation in an effective manner. The Department believes that 
failing to disclose basic ancillary service fees in an accurate and up-
to-date manner before a consumer purchases air transportation would be 
an unfair and deceptive trade practice in violation of 49 U.S.C. 41712.
    Under both proposals, the Department recognizes that not all 
ancillary service fee information needs to be available through all 
channels. However, there are certain basic services that are intrinsic 
to air transportation that carriers used to include in the cost of air 
transportation but that they now often break out from the airfare, and 
the cost of those services is a factor that weighs heavily into the 
decision-making process for many consumers. We consider these basic 
ancillary services to consist of the first and second checked bag, one 
carry-on item and advance seat selection. This rulemaking would require 
U.S. and foreign air carriers to distribute to ticket agents the fees 
for these basic ancillary services. However, carriers would not be 
required to provide ticket agents information about individual 
customers, such as their frequent flyer status or type of credit card 
though these factors may impact the fee for an ancillary service. 
Carriers would, of course, be required to provide ticket agents the fee 
rules for particular passenger types (e.g., military, frequent flyers, 
or credit card holders). Under the proposal, the failure of airlines to 
share this fee information

[[Page 29978]]

in an up-to-date and accurate fashion would be considered an unfair and 
deceptive trade practice in violation of 49 U.S.C. 41712.
    As the requirement for carriers to distribute this information to 
agents would not be helpful to consumers without a disclosure 
requirement, the Department is also proposing to require all carriers 
and agents to disclose the fees for these basic ancillary services 
before the passenger purchases the air transportation. Airlines and 
agents that have Web sites marketed towards U.S. consumers must 
disclose, or at a minimum display by a link or rollover, the fees for 
these basic ancillary services on the first page on which a fare is 
displayed in response to a specific flight itinerary search request in 
a schedule/fare database. To comply with this proposed requirement, 
airlines and agents would have to modify their Web sites to display 
these basic ancillary service fees adjacent to the fare information on 
the first page on which a fare for the requested itinerary is 
displayed. We solicit comment on whether the Department should require 
the ancillary service fee information to be disclosed only upon the 
consumer's request, or require that the information be provided in the 
first screen that displays the results of a search performed by a 
consumer. The Department also seeks comments on whether it should limit 
the applicability of the disclosure requirement only to agent and 
carrier Web site displays marketed to members of the general public, or 
whether the disclosure requirement should include agent and carrier Web 
site displays that are not publicly available (e.g., displays used by 
corporate travel agents).
    Under both co-proposals, the fee information disclosed to consumers 
for a carry-on bag, the first and second checked bag, and advance seat 
assignment would need to be expressed as specific charges. Airlines 
would be required to disclose customer-specific fees for these services 
to the extent the customer provides identifying information, and if the 
customer does not provide that information, must disclose itinerary-
specific fees. Ticket agents would be required to disclose itinerary-
specific fees for these services. Ticket agents may also arrange/
negotiate with the airlines to obtain data that would enable them to 
give customer-specific fees for basic ancillary services. ``Customer-
specific'' refers to variations in fees that depend on, for example, 
the passenger type (e.g., military), frequent flyer status, method of 
payment, geography, travel dates, cabin (e.g., first class, economy), 
ticketed fare (e.g., full fare ticket--Y class), and, in the case of 
advance seat assignment, the particular seat on the aircraft if 
different seats on that flight entail different charges. In other 
words, the response to a specific flight itinerary search request by a 
consumer on a carrier's Web site would need to display next to the fare 
the actual fee to that consumer for his or her carry-on bag, first and 
second checked bags, and advance seat assignment. Nothing in this 
proposal would require carriers to compel consumers to provide the 
passenger-specific details before searching for airfare. Providing such 
details before conducting a search should be an option and not a 
requirement for consumers. We note that many carriers already offer 
seat maps during the online booking process on their Web site that 
permit consumers to obtain a seat assignment at that time and that 
disclose the charge for each seat. This process would comply with the 
proposed rule as long as there is a statement adjacent to the fare on 
the first screen where an itinerary-specific fare is displayed that 
informs the consumer that there are fees for advance seat assignments 
and direct links to the seat map.
    The fee information that ticket agents would be required to display 
to consumers differs from what would be required of airlines in that 
ticket agents would not be required to include variations in fees that 
depend on the attributes of the passengers such as the passenger type 
(e.g., military), frequent flyer status, or method of payment. Ticket 
agents would be required to take into account variations in fees that 
are related to the itinerary such as travel dates, geography, ticketed 
fare and cabin. In addition to providing itinerary-specific fees for a 
first checked bag, a second checked bag, a carry-on bag and an advance 
seat assignment, ticket agents would also be required to clearly and 
prominently disclose that these fees may be reduced or waived based on 
the passenger's frequent flyer status, method of payment or other 
characteristic. Ticket agents who have not negotiated an agreement with 
the airlines to sell advance seat assignments would also be required to 
disclose that seat availability and fees may change at any time until 
purchase of the seat assignment. In addition, it is worth noting that 
carriers and agents would be permitted to offer an ``opt out'' option 
for consumers who prefer to search for fare information only, without 
any ancillary fee information, and when this option is selected 
carriers and agents would not be required to present the fee 
information.
    We ask for comment on whether the Department should only require 
carriers and agents to provide information on standard baggage fees 
without taking into account variations based on frequent flyer 
discounts, loyalty card discounts, geography, ticketed fare, etc. If 
all of the varieties of baggage fees are displayed, how should the 
varying fees be arranged? Regarding advance seat assignments, the 
charges for which also may vary considerably based on, among other 
things, the location of the seat and how far in advance the seat 
assignment is purchased, should carriers and agents be required to 
display all possible advance seat assignment fees, or a range, or the 
fee for each seat assignment available at the time of the search for a 
particular city-pair? What is the technological feasibility and cost of 
providing this information to consumers in a usable fashion, 
particularly for ticket agents?
    As discussed earlier, neither of the Department's two alternative 
proposals would require that carriers enable agents to sell the 
carrier's ancillary services; in industry idiom, we are not proposing 
to require that the fees be ``transactable.'' The Department is 
addressing the harm caused to consumers of not knowing the true cost of 
travel before purchasing air transportation. Under the proposed 
disclosure regime, every point of sale for a particular carrier's fares 
would also provide access to the carrier's fee information for first 
and second checked bag, one carry-on bag, and an advance seat 
assignment. This requirement would place a legal obligation on carriers 
to disseminate this information to all of their agents; however, the 
Department is not stating the method the carriers must use to 
distribute the information, as long as it is in a form that would allow 
the fee information to be displayed on the first itinerary-specific 
results page in a schedule/fare database. Carriers would be free to 
develop cost-effective methods for distributing this information to 
their agents. Carriers could use existing channels, such as filing the 
fee information through the ATPCO, or they could develop their own 
systems to disseminate the information, in conjunction with the agents 
who would receive the information.
    Although neither of the Department's alternative proposals dictate 
the method that carriers must use to distribute the information, 
carriers should be mindful that whatever distribution method they might 
choose must be usable, accurate, and current so the information is 
accessible in real-time. Similarly, ticket agents must work in good 
faith with

[[Page 29979]]

carriers to come to agreement on the method used to transmit the 
ancillary service fee information. For example, ticket agents should 
not use contractual restrictions to prohibit travel agents, carriers, 
or applications software providers from integrating the ancillary fee 
information with information obtained from the GDSs. Since the 
Department's proposal would require ticket agents to provide the 
ancillary fee information to consumers, in cases where carriers and 
ticket agents are able to agree on a transmission mode for ancillary 
fee information other than through a GDS, we would expect GDSs to work 
in good faith with carriers and other ticket agents to permit the 
integration of information obtained from other sources with information 
obtained through the GDS and allow the distribution of fee information 
directly to the agents. Additionally, under the proposed disclosure 
requirement, to the extent that carriers have existing contractual 
relationships with ticket agents acting as intermediaries, such as 
GDSs, to distribute fare information, those ticket agents would be 
prohibited from imposing charges for the distribution of ancillary 
service fee information that are separate from or in addition to the 
existing charges for the distribution of fare information as it would 
be unlawful to provide fare information that does not include the fees 
for the basic ancillary services. The Department invites comments 
regarding the two proposals: (1) Requiring a carrier to disseminate 
certain ancillary service fee information to the agents that distribute 
the carrier's fare, schedule, and availability information and 
requiring both carriers and agents to disclose accurate and up-to-date 
fee information to consumers, or (2) requiring a carrier to disseminate 
certain ancillary service fee information to the agents that distribute 
the carrier's fare, schedule, and availability information and are a 
point of sale for the carrier's tickets to consumers, and requiring 
both carriers and agents to disclose accurate and up-to-date fee 
information to consumers. What are the costs and benefits of requiring 
carriers to provide ancillary fee information to all ticket agents, 
including entities that have not previously considered themselves to be 
regulated but would fall under the proposed definition of ``ticket 
agent,'' described above, and what are the costs and benefits of 
requiring carriers to provide ancillary fee information only to ticket 
agents that act as sales outlets? If DOT requires disclosure of certain 
ancillary service fees, but does not require the ability to purchase 
these services at the time of booking, what would be the preferred way 
for carriers to collect payment for such services? On the Internet 
through the airline Web sites prior to check-in, at the airport at the 
time of check-in, etc.?
    Proponents of the first alternative have argued that, because most 
carriers already rely on GDSs to transmit information to ticket agents 
that act as a point of sale, the Department could ensure that the 
information was disseminated in a quick and efficient manner by 
requiring carriers to provide the information to GDSs. They also assert 
that such a proposal would resolve the ``market failure'' that has 
prevented carriers and ticket agents from coming to agreements that 
would allow the information to be provided to consumers. Advocates of 
the second alternative state that permitting carriers to decide which 
intermediaries, if any, to use to provide ancillary fee information to 
ticket agents acting as sales outlets still provides for consumer 
disclosure but minimizes government interference with business 
arrangements. Additionally, they contend that the second proposal 
provides opportunities for the development of new and innovative 
technologies and methods of distribution of air transportation while 
allowing carriers the freedom to use traditional methods if it makes 
commercial sense for them to do so.
    In addition to the two alternative proposals under consideration, 
we also solicit comment on whether any of the alternatives rejected 
earlier in the rulemaking process better address the problem of lack of 
transparency of fees associated with ancillary services. For example, 
should the Department set design standards (e.g., filing of fees for 
ancillary services through ATPCO, EDIFACT, XML or some other 
technology) rather than using performance standards for transmission of 
ancillary fee data from airlines to ticket agents or from airlines and 
ticket agents to consumers? Under both alternative proposals, the 
Department does not prescribe particular standards in order to avoid 
stifling innovation and imposing more of a burden on industry 
participants than is necessary to solve the transparency problem. 
However, we are interested in comments on whether setting a specific 
technological/information standard could potentially enhance innovation 
and improve transparency, and if so, how. Would selecting a specific 
standard allow for new market entrants in the transmission or display 
of air travel information, by making fare and fee information more open 
and accessible?
    The Department also solicits comment on the issue of whether the 
basic ancillary services that are disclosed to consumers should also be 
transactable. Although the Department has tentatively determined that 
it would be sufficient to require carriers and agents to disclose 
certain basic ancillary fee information to consumers, it has not closed 
the door on the possibility of also requiring that those ancillary 
services be available for purchase through all channels that carriers 
decide should sell their fares. In other words, should we require these 
ancillary services to also be ``transactable''?
    Representatives of certain consumer advocacy groups and trade 
associations have argued to the Department that if consumers are not 
entitled to purchase the ancillary services at the time of booking air 
transportation, the carrier may increase the price of those ancillary 
services before the consumer has a chance to purchase the ancillary 
service on the carrier's Web site or through its reservation center. In 
the case of advance seat assignments, the problem is particularly acute 
because in addition to price increases, the consumer risks the 
possibility that the advance seat assignment that he or she wished to 
purchase will no longer be available.
    Carriers are prohibited from increasing the price of baggage fees 
after a consumer purchases air transportation under the current 14 CFR 
399.88, but under the Guidance on Price Increases of Ancillary Services 
and Products not Purchased with the Ticket issued by the Enforcement 
Office on December 28, 2011, and under the proposed change to section 
399.88 discussed below, carriers would not be prohibited from 
increasing the price of an advance seat assignment until the seat 
assignment itself is purchased. Prices for advance seat assignment are 
often dynamic and change based on route, aircraft size, availability, 
and time of purchase. Proponents of transactability argue that without 
the ability to purchase the seats at the time of ticket purchase, 
consumers will be further harmed because desired seats may not be 
available when the passenger decides to purchase them or is allowed by 
the carrier to purchase them or they may cost more. The Department 
seeks comment on requiring disclosure plus transactability of advance 
seat assignment fees at all points of sale. We also seek information on 
the costs and benefits of requiring transactability and how requiring 
transactability would affect existing contracts between the GDSs and 
the airlines. We also invite interested persons to provide their views 
on whether disclosure plus

[[Page 29980]]

transactability should be required not only for advance seat 
assignments but also for fees associated with first and second checked 
bags and carry-on bags. As noted above, of the ancillary services 
traditionally included in the price of a ticket, the Department views 
the first and second checked bag, one carry-on bag, and an advance seat 
assignment as the services that are intrinsic to air transportation and 
of primary importance to many consumers when making air transportation 
purchasing decisions. The Department invites comments on whether the 
list should be expanded to include services such as in-flight wireless 
Internet access, seating section upgrades, food and beverages, or 
priority boarding. If the list should be expanded, how should carriers 
and agents display the information related to these additional 
services?
    The Department also solicits comment on leaving the disclosure 
requirements established in 14 CFR 399.85 unchanged instead of adopting 
new proposed requirements for customer-specific information about one 
carry-on bag, the first and second checked bag, and an advance seat 
assignment. Under the existing regulation, consumers may visit 
individual carrier Web sites to ascertain all of the fees associated 
with ancillary services. This information is in a centralized location 
accessible from a link on each carrier's homepage. Leaving the existing 
requirements in place would not require carriers to enable agents to 
provide up-to-date and real-time pricing for ancillary services, but it 
would still require that passengers be made aware that ``baggage fees 
may apply'' on the first page on which a fare quote is given for a 
flight search. The Department asks consumers to comment on the existing 
requirements, particularly whether the disclosure requirements under 
section 399.85 have aided in their ability to price shop and their 
ability to understand the true cost of travel before purchasing. The 
Department also asks carriers and ticket agents to comment regarding 
whether they believe the current disclosure requirements are sufficient 
and effective and why or why not. The Department also asks agents to 
comment on how the current disclosure requirements are affecting their 
businesses and whether consumers are aided under the disclosure 
requirements. If the Department decides to maintain the current 
disclosure requirements, should the Department require carriers to list 
the fees for advance seat assignments in a more specific manner, rather 
than a range, on the page listing ancillary fees and on e-ticket 
confirmations? Comments on the cost and benefits of the proposal and 
all of the alternatives are invited. Further, we encourage interested 
parties to provide comment regarding any innovative alternatives/
solutions that Department may not have considered but that would 
address the lack of disclosure of ancillary service fees in all sales 
channels.

3. Expanding the Definition of ``Reporting Carrier'' Under 14 CFR Part 
234

    In 14 CFR Part 234, the Department sets forth requirements for 
``reporting carriers'' to file certain performance data with the 
Department and provide flight on-time performance information to the 
public. ``Reporting carrier'' is defined in 14 CFR 234.2 as an air 
carrier certificated under 49 U.S.C. 41102 that accounts for at least 
one percent of domestic scheduled-passenger revenues. In addition to 
reporting carriers, any carrier that does not reach the reporting 
carrier threshold may voluntarily file Part 234 reports, provided that 
the Department's Bureau of Transportation Statistics (BTS) is advised 
beforehand and such data will be submitted voluntarily for 12 
consecutive months.
    Pursuant to Part 234, reporting carriers are required to submit to 
BTS' Office of Airline Information their domestic scheduled passenger 
on-time performance data and mishandled baggage information, and 
provide on-time performance codes to computer reservation systems 
(CRS). These carriers also must disclose to consumers the on-time 
performance code, on a flight-by-flight basis, for all domestic 
scheduled flights that they market to the public, including the flights 
operated by code-share partners. The on-time performance codes must be 
disclosed to consumers during in-person or telephone communication 
(including but not limited to reservations or ticketing transactions) 
upon reasonable inquiry. For flight schedule Web site displays, the on-
time performance information must be provided either on the initial 
listing of the flights or via a prominent hyperlink. Furthermore, to 
implement a statutory requirement of the Wendell H. Ford Aviation 
Investment and Reform Act for the 21st Century (Pub. L. 106-81), the 
Department amended Part 234 in 2005 to require all U.S. air carriers 
(not only ``reporting carriers'') to file a report with the 
Department's Aviation Consumer Protection Division on any incident 
involving the loss, injury, or death of an animal during air 
transportation.\4\ Additionally, under 14 CFR Part 250, reporting 
carriers are also required to submit to the Department information on 
passengers denied boarding on their domestic and outbound international 
scheduled flights.
---------------------------------------------------------------------------

    \4\ On June 29, 2012, the Department issued a Notice of Proposed 
Rulemaking (RIN 2105-AE07, Docket No. DOT-OST-2010-0211), seeking 
comments on whether the Department should expand the reporting 
carrier pool for reporting animal death, loss and injury incidents 
to cover all U.S. carriers operating domestic and international 
scheduled passenger air transportation using at least one aircraft 
with a design capacity of more than 60 seats. See 77 FR 38747 (June 
29, 2012). Because our determination on the scope of reporting 
carrier with respect to animal death, loss or injury incidents will 
be addressed separately in the final rule of that rulemaking, 
interested parties should provide comments regarding animal 
reporting to the Department through the docket designated for RIN 
2105-AE07.
---------------------------------------------------------------------------

    Since their implementation, Parts 234 and 250 have been effective 
tools for the Department to collect on-time performance, mishandled 
baggage, and oversales data and use these data to monitor the quality 
of service provided by each reporting carrier to the flying public and 
to provide such information to consumers. On October 22, 2013, BTS 
issued a Technical Reporting Directive (Technical Directive 
23) to update the list of reporting air carriers that are 
required to file ``Airline Service Quality Performance Reports'' under 
14 CFR Part 234 for calendar year 2014. Technical Directive 23 
identified the following 14 air carriers that reached the reporting 
threshold of one percent of domestic scheduled-passenger revenue in the 
12-month period ending June 30, 2013: AirTran Airways, Alaska Airlines, 
American Airlines, American Eagle Airlines, Delta Air Lines, ExpressJet 
Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, 
SkyWest Airlines, Southwest Airlines, United Airlines, US Airways, and 
Virgin America.
    The one percent domestic scheduled-passenger revenue threshold for 
reporting carriers was set in a final rule that initiated the reporting 
requirements contained in Part 234. 52 FR 34056 (September 9, 1987). In 
that final rule, the Department considered some comments asserting that 
flight delays affect passengers without regard to the size of the 
carrier or the length of the flight. The Department concluded, however, 
that compliance with the rule was likely to be much more costly for 
small carriers than for large carriers, particularly due to the fact 
that, at the time when the rule was finalized, large carriers were more 
likely than small carriers to maintain their flight performance data in 
a computerized form. Therefore, the Department made the determination 
that as an initial matter, it would limit the application of

[[Page 29981]]

this rule to large air carriers. Nonetheless, the Department noted that 
it would continue to review the carriers covered and would extend the 
reporting requirements to smaller carriers if it became necessary.
    Twenty-five years have passed since the issuance of that final 
rule. Technology innovations that have fundamentally reshaped our world 
in many ways have also profoundly changed almost every aspect of the 
commercial aviation industry's operations. In 1987, for a small carrier 
to file data with the Department, it had to commit to either a 
significant capital investment in a comprehensive computer data 
tracking system or to a significant human resource investment so it 
could compile and file reports manually. Conversely, in this day and 
age, virtually all air carriers are using computerized recordkeeping 
methods to store and distribute data to file reports with the 
Department or are conducting internal performance evaluations, or both, 
which makes reporting data a much easier and less costly task.
    Moreover, we believe that requiring smaller carriers to report 
service quality data to the Department will greatly benefit the public 
in several ways. First, adding these smaller carriers' performance data 
to the data currently collected by BTS will enable the Department to 
obtain and provide to the flying public a more complete picture of the 
performance of scheduled passenger service in general. These data will, 
in turn, provide consumers with more meaningful information on which to 
base their purchasing decisions. For example, based on BTS-provided 
domestic scheduled passenger revenue and enplanement data for 2010, the 
carriers that reach the one percent threshold represent approximately 
90 percent of total domestic scheduled passenger revenue, and 80 
percent of total domestic scheduled passenger enplanements. If we were 
to lower the threshold to 0.5 percent of domestic scheduled passenger 
revenue, the reporting carrier pool would capture approximately 98 
percent of domestic scheduled passenger revenue and 94 percent of the 
domestic scheduled passenger enplanements.
    Further, the public benefits of including smaller carriers in the 
reporting pool were also recognized and supported by a September 2011 
Report to Congressional Requesters prepared by the Government 
Accountability Office (GAO). In the report titled Airline Passenger 
Protections, More Data and Analysis Needed to Understand Effects of 
Flight Delays, GAO recommended that in order to enhance aviation 
consumers' decision-making, the Department should collect and publicize 
more comprehensive on-time performance data to include information on 
most flights, to airports of all sizes. GAO specifically recommended 
that one way this goal could be accomplished was by requiring airlines 
with a smaller percentage of total domestic scheduled passenger service 
revenue, such as airlines that operate flights for other airlines, to 
report flight performance information. Furthermore, expanding the 
reporting carrier pool would enhance the Department's ability to 
analyze the cause of flight disruptions such as delays and 
cancellations, particularly with respect to airports in smaller 
communities and smaller airlines. For example, according to GAO's 
analysis of the performance record of two legacy airlines \5\ and their 
regional partners, the regional partners generally have worse on-time 
performance records. GAO further notes that while flight cancellations 
to smaller communities may inconvenience a relatively small number of 
passengers, they may result in long trip delays if those smaller 
communities have infrequent service. What's more, requiring smaller 
carriers to file on-time performance, mishandled baggage, and oversales 
data with the Department will increase the level of public scrutiny of 
these carriers' performance, which in turn will function as an 
incentive for these carriers to continuously improve the quality of 
their service. The enhanced service quality will increase these 
carriers' competitiveness and benefit the regional markets that they 
primarily serve.
---------------------------------------------------------------------------

    \5\ A ``legacy'' airline is a carrier that was operating when 
the industry was deregulated. They are typically large airlines with 
a hub-and-spoke route system.
---------------------------------------------------------------------------

    For these reasons, we are proposing in this NPRM to amend the 
definition of ``reporting carrier'' under Part 234 to include carriers 
that account for at least 0.5 percent of annual domestic scheduled-
passenger revenue. Additionally, since for years BTS has been using 
June 30, instead of March 31, as the cutoff date to compile a carrier's 
annual domestic scheduled-passenger revenue percentage, we propose to 
codify this change in the definition of ``reporting carrier.'' We seek 
public comments on whether 0.5 percent is a reasonable threshold to 
achieve our goal of maximizing the scope of data collection from the 
industry while balancing that benefit against the burden of increasing 
reporting requirements on carriers, particularly small businesses. If 
0.5 is not the most reasonable threshold, we seek comment on an even 
larger expansion, e.g., to 0.25 percent of domestic scheduled passenger 
revenue, or a smaller expansion to 0.75 percent of domestic scheduled 
passenger revenue. Additionally, we seek comment on whether we should 
require that all carriers that provide domestic scheduled passenger 
service report to the Department. We especially welcome comments that 
provide specific cost estimates or analysis by small carriers that 
would potentially be impacted by this proposal. We also request 
comments regarding whether a carrier's share of domestic scheduled 
passenger revenue remains an appropriate benchmark. Should we use a 
carrier's share of domestic scheduled passenger enplanements instead? 
If so, what percentage is a reasonable threshold for triggering the 
reporting obligation?
    Finally, in relation to the burden associated with implementing a 
reporting mechanism within a carrier's operation system, what is the 
approximate time period that a newly reporting carrier will likely need 
to prepare for the new reporting duties? Although not proposed in the 
rule text, we are contemplating that should this proposal be finalized, 
we would permit carriers that otherwise would not have been reporting 
carriers but become a reporting carrier under a new threshold to file 
their first Part 234 report by February 15 for the first January that 
is at least six months after the effective date of this rule. We 
believe this would provide carriers adequate time to implement 
necessary procedures for filing the reports and amending their Web 
sites to comply with the flight on-time performance disclosure 
requirements contained in section 234.11, to the extent that the Web 
sites directly market flights to consumers. Having the initial reports 
start in January would provide the added benefit of preserving the 
consistency of the Department's data for a full calendar year during 
the transition. We seek comments on whether this rationale for 
determining the compliance date for the reporting requirement would be 
helpful to newly reporting carriers.
    In addition to expanding the pool of reporting carriers, we are 
also contemplating expanding the scope of ``reportable flights'' in 
relation to airports. The current rule only requires reports for 
flights operated to and from U.S. airports that count for at least 1% 
of domestic enplanements (large hub airports). However, since the 
inception of the rule, the reporting carriers have chosen to file 
reports for scheduled passenger flights to all U.S. airports

[[Page 29982]]

where they operate. In this NPRM, we seek comments on whether we should 
eliminate the concept of reportable flights and simply mandate reports 
for all scheduled flights operated by reporting carriers to and from 
all U.S. airports. Without this amendment, the expansion of ``reporting 
carrier'' to include smaller carriers could be rendered less meaningful 
because a large percentage of flights operated by these smaller 
carriers are not to or from large hub airports. In addition to comments 
on whether and how such expansion of scope of reportable flights may 
benefit different stakeholders, we also welcome information on cost 
comparisons for carriers to report only flights to and from (1) large 
hub airports, (2) large, medium, small, and non-hub U.S. airports, and 
(3) all airports.

4. Carriers To Report Data for Certain Flights Operated by Their Code-
Share Partners

    The Department of Transportation provides information each month on 
the quality of services provided by the airlines through its Air Travel 
Consumer Report (ATCR). This Report is divided into six sections: 
Flight delays, mishandled baggage, oversales, consumer complaints, 
customer service reports to the Transportation Security Administration, 
and airline reports of the loss, injury, or death of animals during air 
transportation. The sections that deal with flight delays, mishandled 
baggage, and oversales are based on data collected by BTS pursuant to 
14 CFR Part 234 and Part 250. The section that deals with animal 
incidents during air transport is based on reports required by section 
234.13 and collected by the Aviation Consumer Protection Division.
    With respect to flight delay information, in addition to the 
monthly overview of each reporting carrier, the ATCR also ranks each 
reporting carrier's performance at all large hub U.S. airports from 
which it operates. These performance tables, particularly the rankings, 
are widely accepted as important indicators of the carriers' quality of 
service, and are frequently referred to in news reports, industry 
analyses, and consumer commentaries and forums. Moreover, it is not 
uncommon that these rankings are used as the key references in 
institutional studies, the results of which are often cited in news 
reports with attention-grabbing headlines such as ``The Best and Worst 
Airlines of the U.S.'' Although headlines like this tend to over-
simplify the complexity of airline operations, being named as one of 
``the best'' or ``the worst'' airlines in the country in a national 
news outlet does have a significant impact on a carrier's image and 
brand identity and either affords the carrier a great marketing tool or 
causes some consumers to avoid selecting that carrier's flights when 
making purchase decisions which acts as an incentive for the carrier to 
improve its performance.
    Because of the influence of the ATCR on consumer perception of 
carriers as well as its effect on the perception of carriers within the 
industry, it is vitally important that the information provided by 
these reports remains accurate. Since the Department began to issue the 
ATCR, the Aviation Consumer Protection Division and BTS have been 
working closely to ensure that the published reports accurately reflect 
the data received by the Department. However, this continuing effort 
does not address the growing problem of an inadequate scope of data 
collection, the most significant area being that a marketing carrier's 
data do not include its flights operated by code-share partners.
    The data that carriers file under Part 234 and Part 250 are the 
primary source from which each monthly ATCR is developed. A 
``reportable flight'' under Part 234 refers to any domestic scheduled 
nonstop flight reported to the Department by a reporting carrier 
pursuant to 14 CFR Part 241, Uniform System of Accounts and Reports for 
Large Certificated Air Carriers. Part 241 in turn defines a ``reporting 
carrier'' for the purpose of Form T-100 (U.S. air carrier traffic and 
capacity data by nonstop segment and on-flight market) as ``the carrier 
in operational control of the flight, i.e., the carrier that uses its 
flight crew under its own FAA operating authority.'' Therefore, the on-
time performance and mishandled baggage data collected under Part 234 
from each reporting carrier are limited to the data for a reporting 
carrier's domestic scheduled passenger nonstop flight segments operated 
by that reporting carrier. Part 250 also limits the oversales reporting 
requirement to reporting carriers, although it is not limited to 
domestic flights (see 14 CFR 250.10).
    If the reporting carrier engages in code-sharing arrangements in 
which the reporting carrier is the marketing carrier but not the 
operating carrier, the performance data for those flights are not 
included in the reporting carrier's Part 234 and Part 250 reports. If 
the operating carrier of a code-share flight is a reporting carrier 
itself, the performance data for its code-share flights that are also 
marketed by another carrier will be reported to the Department, but 
data for those flights will not be attributed to the marketing carrier. 
What's more, some operating carriers of code-share flights marketed by 
larger carriers do not meet the current reporting threshold of Part 
234, and a certain number of operating carriers of code-share flights 
marketed by larger carriers would not meet the proposed lower reporting 
threshold of 0.5 percent of annual domestic scheduled passenger 
revenue. Therefore, the on-time performance, mishandled baggage, and 
oversales data for those flights are not currently reported to the 
Department at all and, even under a revised reporting threshold, not 
all of those operating carriers of code-share flights marketed by 
larger carriers would necessarily be required to report performance 
data.
    The Department considers the current scope of reportable flights 
under Part 234 inadequate to truly capture many carriers' quality of 
service, so as to be accurately reflected in the ATCR. The limited 
scope of the current reporting requirements may result in consumer 
confusion or misperception. We note that the majority of legacy/
mainline U.S. carriers continue to seek brand consolidation, while 
still maintaining the ``hub and spoke'' operation structure. For 
economic reasons, those legacy carriers' regional short-haul flights 
are operated, in many markets, by code-share partners on a fee-for-
flight basis and these operating carriers do not engage in the sale of 
tickets at all. According to the data contained in the FAA's Aerospace 
Forecast for fiscal years 2012-2032, mainline carriers provided 16 
percent less domestic passenger capacity in 2011 than they did in 2001. 
Over the same ten-year period, however, regional carriers' capacity 
overall has increased to 153 percent of the 2001 level. Further, a 
recent Official Airline Guide (OAG) survey provides a snapshot of the 
current operations of mainline carriers and their regional partners and 
indicates the comparative scope of code-share operations. It shows that 
in 2011, each of the top five legacy carriers had more than 45% of its 
domestic scheduled flights operated by code-share regional partners, 
with the carrier on the top of the survey list having almost 70% of its 
domestic scheduled flights operated by code-share regional partners. 
The service quality data for these code-shared flights are not reported 
by the legacy carriers and are not attributed to these carriers' 
records and rankings in the ATCR. However, those flights are marketed 
by the legacy carriers with their own airline designator codes and 
usually their own brands, sometimes bearing trademarks such as

[[Page 29983]]

``Connection'' or ``Express'' in addition to the mainline carriers' 
trade names. In many instances, the mainline carriers also handle 
virtually all aspects of ground operations including scheduling and 
customer service related issues, such as dealing with oversales 
situations, providing denied boarding compensation, and resolving 
baggage claims. Consumers may consider these code-share flights 
operated by code-share regional partners to be air transportation 
service provided by the mainline carrier just as much as the flights 
actually operated by the mainline carriers.
    The Department is also concerned that the inadequacy of the scope 
of service quality reports may hinder competition. The Department is 
mindful that on-time performance data in the ATCR may have a limited 
influence on a consumer's purchase decision regarding a particular 
flight, because the consumer is more likely to refer to that specific 
flight's on-time performance record, which under 14 CFR 234.11 must be 
provided on a marketing carrier's Web site, regardless of whether it is 
operated by a code-share partner. Nonetheless, a carrier's ATCR ranking 
speaks of the carrier's performance quality from a macro perspective, 
and is often used by carriers as a powerful marketing tool in 
developing brand loyalty, recruiting talented employees, and 
negotiating with suppliers and airports, as well as promoting its 
service in a newly developed or targeted geographic market. Most 
importantly, the ATCR numbers and rankings are benchmarks carriers use 
to assess their performance among competitors and to seek effective 
ways to improve. As stated above, recent numbers show that virtually 
all legacy carriers have at least 45% of their domestic scheduled 
passenger flight segments operated by code-share partners, which means 
data for those flights are not reported by the marketing carriers under 
Part 234 and Part 250 or attributed to the carrier in the ATCR. By 
contrast, most relatively new carriers that are ranked in the ATCR 
operate a ``point-to-point'' network and follow a different business 
model, the so-called ``low cost'' model. Under this business model, 
carriers engage in very few, if any, code-share arrangements. As a 
result, the ATCR is comparing the service quality of all flights 
marketed by a low-cost carrier with the service quality of 55% or less 
of the flights marketed under legacy carriers' brands and codes. We 
will not seek to determine how including code-share flight records in 
the ATCR would affect legacy carriers' rankings, but we are of the 
tentative opinion that requiring all reporting carriers to report data 
for all flights marketed under that carrier's name and code would put 
carriers on an equal footing in this important competitive arena.
    Additional support for our proposal comes from the aforementioned 
final report by FAAC, which noted that the Competitiveness and 
Viability Subcommittee recommended that the Department should continue 
to require marketing carriers to provide clear and transparent 
notification of operations conducted by an air carrier other than the 
marketing carrier. Further, some subcommittee members also believed 
that more detailed disclosure regarding regional carriers' operations 
should be included in the ATCR, and that the report should include 
metrics organized not only by operating air carrier, but by the 
marketing air carrier.
    For the reasons stated above, we are proposing to expand the scope 
of ``reportable flight'' under Part 234, and consequently under Part 
250. Pursuant to this proposal, a reporting carrier would continue to 
file Form 234 and Form 251 (the oversales report required by Part 250) 
with respect to nonstop scheduled flights operated by the reporting 
carrier. In addition, each reporting carrier would file a separate Form 
234 and a separate Form 251 to include both flights that are operated 
by the reporting carrier itself and all nonstop scheduled flights that 
are operated by a code-share partner and sold under the reporting 
carrier's code. Reportable flights under Part 234 (on-time performance 
and baggage data) are limited to domestic nonstop flight segments. The 
Form 251 oversales report has always included data for outbound 
international flights from the United States, and that will continue to 
be the case for the proposed new report that would include service 
operated by code-share partners. However, this new report, like the 
original report, would be limited to service operated by ``a 
certificated carrier or commuter air carrier''--both of which are U.S. 
air carriers--and consequently the new report would not collect data on 
code-share flights operated for a reporting carrier by a foreign-
carrier code-share partner. Our primary regulatory interest at this 
time is collecting and publishing data on code-share service operated 
by the regional-carrier partners of the larger U.S. airlines. We are 
not proposing at this time to collect oversales data for flights from 
the United States (the oversales rule doesn't apply to inbound 
international flights to the United States) that are operated by large 
foreign carriers that do not already report these data.
    For this purpose it is irrelevant whether the actual operating 
carrier in the code-share arrangement is a reporting carrier itself and 
is required to file data for that flight under the reporting 
requirements applicable to the operating carrier. Under our proposed 
rule, the marketing carrier reporting data on flights operated by 
another carrier would not need to distinguish flights operated by 
different code-share partners. We are proposing to require the 
marketing carrier to provide aggregated consumer statistics for all 
flights operated under its code (i.e., flights it operates and flights 
operated by its code-share partners). This would be an additional 
reporting requirement (second set of reports) and is not intended to 
replace the existing requirement for a reporting carrier to provide 
separate data for flights it operates. We seek comment on whether the 
second sets of reports should only contain the performance records of 
all flights operated for the reporting carrier by its code-share 
partners but not the flights operated by the reporting carrier. 
Alternatively, rather than having all code-share partners' records in 
aggregation, we ask if we should require the marketing carrier to 
provide separate data on flights operated by each of its code-share 
partner's operations. What are the benefits of separating each code-
share partner's records and what are the costs, if any, added to the 
reporting carriers? Finally, since many regional carriers operate 
flights under the code of more than one large carrier, we seek comment 
on whether ``double-counting,'' i.e., situations where a given flight 
carries the code of more than one large carrier, is an issue and if so, 
how to avoid it. Do regional carriers that have code-share agreements 
with more than one large carrier ever operate a given flight for more 
than one marketing carrier, or on the other hand, do these flights 
always operate in discrete city-pair markets? How should we deal with 
the situation of large U.S. carriers that code-share with each other?
    Our proposal to expand the scope of reportable flights will 
necessitate amendments to the rule text of 14 CFR 234.6, Baggage 
Handling Statistics. On July 15, 2011, the Department issued an NPRM, 
Reporting Ancillary Airline Passenger Revenues (RIN 2105-AE31, Docket 
No. DOT-RITA-2011-0001) that proposes, among other things, to amend 
section 234.6 by changing the way it computes mishandled baggage rates, 
from mishandled baggage reports per unit of domestic enplanements to 
mishandled baggage per unit of checked

[[Page 29984]]

bags. The proposed amendments to section 234.6 also include a new and 
separate requirement for collecting statistics for mishandled 
wheelchairs and scooters used by passengers with disabilities. In this 
NPRM, our proposed amendments to section 234.6 are tentatively based on 
the proposed rule text in the ancillary revenues reporting NPRM. Our 
adoption of the rule text as proposed in RIN 2105-AE31 in this 
rulemaking is not indicative of whether we are going to adopt the text 
as proposed in the final rule for the ancillary revenue reporting 
proposal. Further, although that NPRM's comment period has ended, any 
comments regarding the proposed computation method for mishandled 
baggage and the proposed inclusion of mishandled wheelchairs and 
scooters in the reporting should be submitted to the ancillary revenue 
reporting rulemaking docket and will be considered to the extent 
practicable.
    We note that if the operating carrier is already a reporting 
carrier, the data for the code-share flights that will be added to the 
marketing carrier's report will have to be prepared and submitted to 
the Department by the operating carrier to meet the existing reporting 
requirement. In these instances, we expect that the cost to the 
marketing carrier to obtain this data would be negligible. With respect 
to flights operated by a code-share partner that is not a reporting 
carrier, we believe the cost of obtaining data would be higher but not 
significant, as most carriers, large or small, already have internal 
systems in place that track the major elements of flight performance 
quality. There are also costs related to compiling data for the code-
share flights and setting up the reporting infrastructure to file the 
compiled report with the Department. We seek comments from carriers and 
the public regarding the costs associated with adding data on flights 
operated by code-share partners to reports filed with the Department. 
We further note that 14 CFR 234.8 requires reporting carriers to 
calculate and assign an on-time performance code for each ``reportable 
flight.'' Currently section 234.8 only covers domestic scheduled 
flights operated by a reporting carrier, so our proposal to expand the 
scope of ``reportable flight'' under Part 234 will require that 
reporting carriers also calculate and assign an on-time performance 
code for each domestic scheduled flight operated by a code-share 
partner. However, since April 29, 2010, all current reporting carriers 
have been required by section 234.11 to disclose on their Web sites 
that provide schedule information detailed on-time performance records, 
on a monthly basis, for each domestic scheduled flight, including each 
domestic code-share flight. In this regard, we expect that these 
current reporting carriers are already adequately prepared to comply 
with requirement of section 234.8 with respect to code-share flights. 
Finally, we ask what the reasonable implementation period should be if 
this proposal becomes a final rule.

5. Minimum Customer Service Standards for Ticket Agents

    In the Department's first Enhancing Airline Passenger Protections 
final rule, 74 FR 68983, the Department required U.S. carriers in 14 
CFR 259.5 to adopt a customer service plan. In the second Enhancing 
Airline Passenger Protections final rule, 76 FR 23110, the Department 
extended this requirement to foreign carriers and required both U.S. 
and foreign carriers to adopt minimum standards for their customer 
service plans. Among other standards, the Department requires carriers 
to provide prompt ticket refunds where ticket refunds are due, in 
accordance with existing Department rules; hold a reservation at the 
quoted fare or permit the reservation to be cancelled without penalty 
for at least 24 hours after a customer books the ticket; disclose 
cancellation policies, seating configuration, and lavatory availability 
to consumers; notify travelers of changes in travel itineraries; and 
respond to consumer-related complaints in a timely manner. Section 
259.5 only applies to U.S. and foreign carriers that provide scheduled 
passenger service using at least one aircraft with an original designed 
passenger capacity of 30 or more seats. In a Frequently Asked Questions 
guidance document issued by the Department's Enforcement Office, in 
response to questions regarding whether section 259.5 applies to ticket 
agents, the Enforcement Office clarified that these customer service 
provisions are not applicable to agents. Therefore, agents are not 
currently required to hold a reservation for 24 hours or respond to 
consumer complaints or notify passengers of changes to travel 
itineraries.
    The Department is proposing to amend 14 CFR 399.80, which addresses 
unfair and deceptive practices by ticket agents, because the Department 
believes that all airline passengers should benefit from certain 
customer service plan protections. Not all of the customer service 
standards set forth in 14 CFR 259.5 should apply to agents, but the 
Department sees no reason not to extend the standards related to ticket 
purchases and information dissemination to ticket agents that sell air 
transportation. As such, the Department is proposing to require these 
ticket agents to adopt minimum customer service standards in select 
areas. The customer service standards would not apply to ticket agents 
that don't sell air transportation but rather arrange for air 
transportation and receive compensation in connection with air 
transportation sold by others. Additionally, as proposed, the standards 
would only apply to those ticket agents with annual revenue of $100 
million or more that market to the general public in the United States. 
A majority of U.S. travelers who bought their airline tickets through 
an avenue other than a carrier used large ticket agents.
    As carriers are already required to allow reservations to be held 
at the quoted fare without payment or cancelled without penalty for at 
least 24 hours after a reservation is made if the reservation is made 
one week or more prior to a flight's departure, the Department is 
proposing to extend this requirement to ticket agents that sell air 
transportation. The Department feels that such agents should be able to 
allow reservations to be held at the quoted fare, as carriers are 
already required to provide this option. Moreover, through this 
proposal, the benefits of reserving without payment or canceling 
without penalty will reach consumers who use an agent to book air 
transportation. Similar to carriers, this proposal would only require 
ticket agents that sell air transportation to hold the fare at the 
quoted price. The proposal would not require agents to hold for 24 
hours the price for other related items such as fees associated with 
ancillary services or tour components (e.g., hotel stay) although 
agents are, of course, free to do so if they wish. We solicit comment 
on whether the Department should require specific disclosure by agents 
and airlines about what is and is not being held for 24 hours.
    The Department also seeks comments on requiring both agents and 
carriers to inform consumers, when engaging in oral communications with 
them about changes to a reservation, of the consumer's right to cancel 
without penalty if applicable. The Department has received complaints 
alleging that airlines are not disclosing to consumers when they are 
eligible to change their reservation without penalty and charging 
consumers change fees when consumers are unaware that they can cancel 
without penalty and rebook. Should carriers and agents be required to 
disclose the 24-hold policy to a consumer who is making a change within 
24 hours of booking? Should the

[[Page 29985]]

Department require that the policy be prominently disclosed during the 
booking process? Currently, many carriers only disclose the policy in 
their ``Customer Service Commitment'' but not during the booking 
process. Would it be beneficial for consumers to have this information 
during booking?
    Additionally the Department is proposing to require agents to 
provide prompt refunds where ticket refunds are due. This requirement 
would mirror 14 CFR 259.5(b)(5), which requires carriers to submit a 
refund for a credit card purchase within 7 days of the complete refund 
request, and in the case of cash or check purchases, within 20 days of 
receiving a complete refund request. Oftentimes, if a consumer has to 
cancel a trip, and a refund is due, they find themselves going between 
the airline and the agent for the refund in cases where the passenger 
purchased the airline ticket through an agent. This requirement would 
prevent this type of hassle and back-and-forth for consumers and 
clarify the agent's responsibility in assisting consumers when ticket 
refunds are due.
    The Department is also proposing that agents disclose cancellation 
policies, seating configuration, and lavatory availability upon request 
to a passenger before a consumer books a selected flight. Many 
consumers who choose to book through a ticket agent are unaware of 
restrictions or fees associated with canceling the ticket. 
Additionally, consumers are not always aware that they are booking a 
flight on a smaller aircraft or an aircraft that may not have a 
bulkhead seat or lavatory available. As carriers are required to 
provide this information to consumers on their Web sites and upon 
request from their telephone reservation staff, the Department feels 
agents should also provide the information. Under this proposal, agents 
would have to make this information available on their Web sites that 
are marketed to U.S. consumers, and upon request for reservations made 
over the telephone. The Department invites interested parties to 
comment on this proposal, specifically whether agents already have this 
information to share with consumers. If agents do not have information 
about carriers' cancellation policies, aircraft seating configurations 
and lavatory availability, should the Department impose a requirement 
for carriers to provide their agents this information or should agents 
be required to provide links so that consumers can obtain that 
information? The Department also invites comments regarding the methods 
for disclosing cancellation policies, seating configurations, and 
lavatory availability information to consumers. Should the Department 
require that this information be placed at a particular location on a 
carrier's Web site, e.g., next to every flight in a search-result list 
for a particular itinerary?
    The Department is also proposing that agents adopt a customer 
service standard to notify consumers of changes in travel itineraries 
in a timely manner. A carrier is not required to notify a consumer 
about a change in his or her travel itinerary if the carrier does not 
have contact information for that individual, and an agent is not 
required to provide a client's contact information to an airline. 
Therefore, consumers who use agents that do not provide contact 
information to carriers may not receive direct or timely notice of 
changes to their itinerary. This requirement is intended to ensure that 
consumers are timely notified of such changes.
    Finally, the Department is proposing that agents be required to 
substantively respond to consumer complaints. Agents would be required 
to acknowledge receipt of a consumer-related complaint within 30 days 
of receipt of the complaint. Where the complaint (in whole or in part) 
is about the agent's service, the agent must substantively respond to 
the complaint within 60 days. If all or part of the complaint is about 
services furnished (or to be furnished) by an airline or other travel 
supplier, the agent must forward the complaint to that supplier for 
response. If no part of the complaint is about the agent's service and 
the agent sends the complaint to the appropriate supplier(s), the 
agent's substantive reply can consist of the agent informing the 
passenger that his or her complaint has been forwarded to the 
appropriate party and providing contact information to the passenger 
for that entity. This proposal closes the gap that exists in 14 CFR 
259.5(b)(11) and 259.7, which require carriers to respond to consumer 
complaints but do not provide for complaints related to a ticket 
agent's services.
    Although the subjects that we are proposing that ticket agents that 
sell air transportation address in their customer service plans are 
identical to those that carriers are already required to include in 
their customer service plans with respect to ticket purchases and 
information dissemination, we request comment on whether any of these 
subjects would be inappropriate if applied to ticket agents. Why or why 
not? Some of these items may be under direct control of the air 
carrier, and not the ticket agent. In commenting on these customer 
service commitments, large ticket agents should address the extent to 
which they are responsible for each of these items. Moreover, we seek 
comment on whether the Department should require that ticket agents 
address any other subjects in their customer service plans. For 
example, should ticket agents be required to prominently disclose to 
individuals who will be issued more than one ticket for their trip that 
their bags may not be checked through, as airlines typically check a 
passenger's baggage between the origin and destination points that are 
issued on a single ticket? Should ticket agents also be required to 
disclose to such individuals that they may have to pay multiple and 
different bag fees if ticketed separately as the Department's 
requirement for one set of baggage allowances and fees throughout a 
passenger's itinerary only applies when there is a single ticket? If 
so, when should this disclosure occur--before or after a ticket is 
purchased? We also seek comment on the appropriate form for such a 
disclosure (e.g., orally, on the ticket agent's Web site, on e-ticket 
confirmation). The Department is proposing to apply these customer 
service standards only to large ticket agents (those with annual 
revenue of $100 million or more) that market to the general public in 
the United States. The Department invites comment on whether the 
applicability should be expanded to cover other ticket agents, e.g., 
smaller ticket agents, or ticket agents who do not sell to members of 
the general public.
    The Department recognizes that requiring these minimum customer 
service standards for agents would place a cost burden on these 
agencies. However, the Department believes that the benefits to 
consumers of receiving timely information, permitting reservations to 
be held for 24 hours without risk, and having their complaints 
addressed outweigh the costs. These proposals put all airline 
passengers on an equal footing when it comes to customer service 
standards, regardless of how they purchased their tickets.
    The Department invites comments on the costs and benefits of these 
proposed customer service standards. For consumers who use agents, have 
you had problems in the past determining the cancellation policies 
associated with your ticket or being informed of changes in travel 
itineraries? For carriers, do you see any cost in sharing the 
information with the agents that the agents would be required to 
provide to consumers? For agents, what are the costs and benefits that 
you see in the proposal? Are you already receiving the information that

[[Page 29986]]

you would have to disclose to consumers from carriers? Should agents 
also be required to review their adherence to the customer service 
plans each year and retain the records of the audits for two years 
following the date of any audit, just as carriers are required to do 
today? Should agents be required to post their customer service plans 
on their Web sites if the Web sites are marketed towards U.S. 
consumers? Are there unforeseen consequences of the proposal, and, if 
so, what are they?

6. Codifying 49 U.S.C. 41712(c) Regarding Web site Disclosure of Code-
Share Service and Other Amendments to 14 CFR Part 257

    Code-sharing is an arrangement whereby a flight is operated by a 
carrier other than the airline whose designator code is used in 
schedules and on tickets. The Department's current regulation on the 
disclosure of code-sharing and long term wet lease arrangements, 14 CFR 
257.5, was initially issued in 1999. Based on the statutory prohibition 
against unfair and deceptive practices in the sale of air 
transportation, 49 U.S.C. 41712, the purpose of Sec.  257.5 is to 
ensure that consumers are aware of the identity of the airline actually 
operating their flight in code-sharing and long-term wet lease 
arrangements in domestic and international air transportation. See 64 
FR 12838 (March 15, 1999). The Department has long recognized the 
economic benefits of airline code-sharing and long term wet lease 
arrangements but has been aware that such arrangements may cause 
consumer confusion regarding the identity of the operating carrier of a 
flight. For simplicity, we refer to both code-sharing arrangements and 
long term wet lease arrangements (covered in Part 258) as ``code-
share'' arrangements, as the disclosure requirements for both types of 
operations are essentially identical. Code-share disclosure is 
important because the identity of the operating carrier is a factor 
that affects many consumers' purchasing decisions. In that regard, we 
believe that strengthening the code-share disclosure requirements by 
codifying requirements in Part 257 is an effective way to prevent 
potential consumer confusion.
    Pursuant to Sec.  257.5, carriers and ticket agents are required to 
inform consumers, when engaging in oral communications with the public, 
of code-share service ``before booking transportation'' and to 
``identify the transporting carrier by its corporate name and any other 
name under which that service is held out to the public'' (section 
257.5(b)). Written notice of code-sharing arrangements is also required 
when a ticket purchase is made, regardless of whether an itinerary is 
issued (section 257.5(c)). In ``printed'' advertisements, including 
those appearing on a Web site, the code-sharing relationship must be 
``prominently'' disclosed and an abbreviated notice must be included in 
any radio or television advertisement (section 257.5(d)). With respect 
to all schedule information that is publicly available in writing, 
including on Web site displays, section 257.5(a) requires that any 
code-share service be indicated with ``an asterisk or other easily 
identifiable mark and that the corporate name of the transporting 
carrier and any other name under which that service is held out to the 
public'' also be disclosed. As a matter of enforcement policy, since 
the issuance of section 257.5, we have permitted entities providing 
schedules on Web sites to provide disclosure of an operating carrier's 
corporate name and other pertinent names through rollover or 
hyperlinked displays.
    In February 2009, a flight operated by a regional air carrier under 
a mainline air carrier's code crashed during landing. In the aftermath 
of that fatal incident, family members of some victims questioned the 
adequacy of disclosure regarding the code-sharing nature of that 
operation. In response to these concerns and in recognition of the 
necessity of further strengthening the disclosure requirements of code-
sharing arrangements, Congress amended 49 U.S.C. 41712 in August 2010 
to add a subsection (c) that requires that in any oral, written, or 
electronic communications with the public, U.S. and foreign air 
carriers and ticket agents disclose the name of the carrier providing 
the air transportation for each flight segment prior to the ticket 
purchase. In addition, subsection (c) provides that if an offer to sell 
tickets is provided on a Web site, such information must be disclosed 
``on the first display of the Web site following a search of a 
requested itinerary in a format that is easily visible to a viewer.'' 
Airline Safety and Federal Aviation Administration Extension Act of 
2010, Public Law 111-216, Title II, section 210, 124 Stat. 2362 (August 
1, 2010). In light of Congress' specific requirement regarding Web site 
ticket offer disclosure, on January 14, 2011, the Department's 
Enforcement Office issued Guidance on Disclosure of Code-Share Service 
Under Recent Amendments to 49 U.S.C. 41712, in which the Enforcement 
Office revised its enforcement policy and explained that under the 
statute any disclosure of code-share service in the context of Web site 
displays by carriers and ticket agents must be on the same screen as 
the itinerary and immediately adjacent to that itinerary and to each 
alternative itinerary, if any. The guidance provided notice that 
carriers or ticket agents whose Web sites failed to provide full 
disclosure of code-share service arrangements or that provided 
disclosure only through rollovers or hyperlinks would potentially be 
subject to enforcement action.
    In this NPRM, we are proposing to amend 14 CFR 257.5 to codify the 
requirements of 49 U.S.C. 41712(c) and the Department's current 
enforcement policy with respect to Web site disclosure of code-share 
and long term wet lease arrangements. In addition, we are proposing to 
update certain other disclosure requirements of 14 CFR 257.5 in order 
to reflect the technology changes in the airline industry's reservation 
and ticketing systems that have resulted in the predominance of 
electronic ticketing and the significant use of online transactions. As 
noted in the background section of this NPRM, these proposals are also 
intended to implement the Future of Aviation Advisory Committee and the 
Advisory Committee on Aviation Consumer Protection recommendation that 
the Secretary should ensure transparency regarding flight operators, 
such as disclosure of the identity of the operator on regional-carrier 
code-share flights. See FAAC Final Report, April 11, 2011. It is 
important to emphasize that we believe the changes proposed in this 
NPRM to the text of section 257.5 are primarily non-substantive and 
would not affect what carriers and ticket agents are already obligated 
to do under the combination of the current section 257.5, the amended 
49 U.S.C. 41712, and the Department's guidance document.
(a) Disclosure in Flight Itinerary and Schedule Displays
    14 CFR 257.5 contains subsections (a) through (d), which deal with 
disclosure in schedule displays, oral notice to prospective consumers, 
written notice to ticket purchasers, and disclosure in advertisements, 
respectively. Most code-share disclosure requirements under 14 CFR 
257.5 cover both carriers and ticket agents, but section 257.5(a), 
notice in schedules, only covers U.S. air carriers and foreign air 
carriers. On the other hand, 49 U.S.C. 41712(c) (enacted in 2010), as 
well as the January 10, 2011, notice issued by the Department's 
Enforcement Office, are explicit that the same heightened requirements 
regarding

[[Page 29987]]

code-share disclosure, including Web site schedule display disclosure, 
apply to both carriers and ticket agents. As a result of this 
inconsistency, under the current rule, ticket agents that fail to 
adequately disclose code-share arrangements in schedule displays would 
violate section 41712 but not section 257.5(a).
    The inclusion of ticket agents in section 41712(c) reflects the 
fact that, through the growth and development of the Internet and 
related technologies, more and more ticket agents, especially online 
travel agencies (OTAs), are able to provide flight schedules and 
itinerary search functions to the public. The Department applauds new 
technologies that increase the number of venues from which consumers 
can search and compare airfares and schedules and perform one-stop 
shopping for airfares along with other components of travel packages. 
However, it is our firm belief that information is useful and 
beneficial to the public only if it is accurate and complete. As a 
result, we are proposing to codify the code-share disclosure 
requirement in section 41712(c) concerning schedule displays and make 
it applicable to both carriers and ticket agents doing business in the 
United States with respect to flights in, to, or from the United 
States. Although the rule text and the preamble of the final rule 
issued in 1999 did not specify what constitutes ``doing business in the 
United States,'' we are tentatively of the opinion that any ticket 
agent that markets and is compensated for the sale of tickets to 
consumers in the United States, either from a brick-and-mortar office 
located in the United States or via an Internet Web site that is 
marketed towards consumers in the United States, would be considered as 
``doing business in the United States.'' This interpretation would 
cover any travel agent or ticket agent that does not have a physical 
presence in the United States but has a Web site that is marketed to 
consumers in the United States for purchasing tickets for flights 
within, to, or from the United States. We also note that with the usage 
of mobile devices gaining popularity among consumers, our code-share 
disclosure requirement with respect to flight schedule and itinerary 
displays covers not only conventional Internet Web sites under the 
control of carriers and ticket agents, but also those Web sites and 
applications specifically designed for mobile devices, such as mobile 
phones and tablets.
    Furthermore, the text of section 257.5(a) states that any code-
sharing arrangements must be disclosed in flight schedules provided to 
the public in the United States, which we interpret to include 
electronic schedules on Web sites marketed to the public in the United 
States, by an asterisk or other easily identifiable mark. As discussed 
above, the new amendment to section 41712 and the guidance provided by 
the Enforcement Office make it clear that for schedules posted on a Web 
site in response to an itinerary search, disclosure though a rollover, 
pop-up window or hyperlink is no longer sufficient. Moreover, as stated 
in the rationale behind our recently amended price advertising rule, 14 
CFR 399.84, which ended the practice of permitting sellers of air 
transportation to disclose airfare taxes and mandatory fees through 
rollovers and pop-up windows, we believe that the extra step a consumer 
must take by clicking on a hyperlink or using a rollover to find out 
about code-share arrangements is cumbersome and may cause some 
consumers to miss this important disclosure.
    Our proposal codifies the requirement of section 41712(c)(2) that 
the code-share disclosure must appear on the first display of the Web 
site following an itinerary search. Further, section 41712(c)(2) 
requires that the disclosure on a Web site must be ``in a format that 
is easily visible to a viewer.'' In that regard, we are proposing that 
the disclosure must appear in text format immediately adjacent to each 
code-share flight displayed in response to an itinerary request by a 
consumer. We ask whether the proposed requirement is sufficient to meet 
the statutory requirement that the disclosure must be in a format that 
is easily visible by a viewer. We further seek comments on whether we 
should specify minimum standards on the text size of the disclosure in 
relation to the text size of the schedule itself. As an alternative to 
the proposed standard, we ask whether a code-share disclosure appearing 
immediately adjacent to the entire itinerary as opposed to appearing 
immediately adjacent to each code-share flight would be a sufficient 
way to meet the ``easily visible'' standard.
    With regard to flight schedules provided to the public (whether the 
schedules are in paper or electronic format), we propose that the code-
share disclosure be provided by an asterisk or other identifiable mark 
that clearly indicates the existence of a code-sharing arrangement and 
directs the readers' attention to another prominent location on the 
same page where the identity of the operating carrier is fully 
disclosed. We seek public comments on whether we should impose the same 
standard for flight schedules as for flight itineraries provided on the 
Internet in response to an itinerary search, i.e., requiring that the 
disclosure be provided immediately adjacent to each applicable flight.
(b) Disclosure to Prospective Consumers in Oral Communications
    Section 257.5(b) requires that carriers and ticket agents must 
identify the actual operator of a code-share flight the first time that 
a code-share flight is cited to a consumer in person, over the 
telephone, or through other means of oral communication. With respect 
to covered entities, this section currently applies to, and, under this 
proposal, will continue to apply to, both U.S. and foreign air 
carriers, as well as ticket agents doing business in the United States. 
We are not proposing any changes to this provision, but we propose to 
interpret the phrase ``ticket agent doing business in the United 
States'' in the same manner as described in the discussion of that 
phrase in section 259.5(a) above. Consequently, a ticket agent that 
sells air transportation via a Web site marketed toward U.S. consumers 
(or that distributes other marketing material in the United States) is 
covered by section 259.5(b) even if the agent does not have a physical 
location in the United States, and such an agent must provide the 
disclosure required by section 259.5(b) during a telephone call placed 
from the United States even if the call is to the agent's foreign 
location.
(c) Disclosure of Code-Share at Time of Purchase
    With respect to written notice of code-share arrangements provided 
to ticket purchasers, we propose to retain the basic requirements 
listed in 14 CFR 257.5(c)(1) but delete the language in 14 CFR 
257.5(c)(3). The basic requirements in section 257.5(c)(1) are as 
follows: if a code-share flight segment has its own designated flight 
number, the code-share disclosure must be immediately adjacent to that 
flight number; if a single-flight number service involves one or more 
code-share segments, each code-share segment must be identified 
immediately adjacent to that flight number in the format ``Service 
between XYZ City and ABC City will be operated by Jane Doe Airlines d/
b/a ORS Express.'' Section 257(c)(3) states that the written code-share 
notice required by section 257.5(c) must accompany the ticket if the 
transportation is purchased far enough in advance of travel to allow 
for advance delivery of the ticket. If time does not allow for advance 
delivery of the ticket, ``or in the case of ticketless travel,'' the 
required written notice is to be provided no later than the time that

[[Page 29988]]

the consumer checks in at the airport for the first flight in his or 
her itinerary.
    The first part of section 257.5(c)(3) appears to refer to paper 
tickets, as it speaks of the time required for delivery of the ticket, 
and it draws a contrast with ``ticketless travel'' in the next 
sentence. (Ticketless travel is a term that used to be used for what is 
now referred to as electronic ticketing or e-tickets.) We believe that 
the required written notice should in all cases be provided ``at the 
time of purchase'' as indicated at the beginning of section 257.5(c), 
regardless of whether a paper ticket is subsequently issued or the 
consumer will receive an e-ticket. Section 257.5(c)(2) states that if a 
consumer does not receive an itinerary, the selling carrier or ticket 
agent must provide a separate written notice that identifies the 
operating carrier. Thus, the existing rule anticipates situations in 
which the required written code-share notice is not automatically 
generated by industry purchase/ticketing systems and states that in 
such cases the selling carrier or ticket agent must manually generate 
and furnish a written disclosure of the identity of the carrier(s). We 
do not believe that a written code-share notice that is provided at the 
airport is sufficient though currently permitted under section 
257.5(c)(3) for passengers who purchase their air transportation in 
advance but do not receive a paper ticket until a date close to the 
scheduled departure date and for e-ticketed passengers including those 
who have purchased their transportation weeks or months in advance. 
Accordingly, we propose to make it clear that written code-share 
disclosure must be provided at the time of purchase.
(d) Disclosure in City-pair Specific Advertisements
    Subsection (d) deals with disclosure requirements in city-pair 
specific advertisements. We are proposing to use the phrase ``written 
advertisement'' to replace the phrase ``printed advertisement,'' which 
in the current rule text refers to both advertisements printed in paper 
and advertisements published on the Internet. We believe the word 
``written'' is more accurate in describing both formats of 
advertisements.
    In addition, we are proposing to add a descriptive phrase to 
specify the scope of the disclosure requirements on Internet 
advertisements in an effort to eliminate any possible ambiguity. 
Specifically, the current rule states that our requirements cover 
advertisements ``published in or mailed to or from the United States'' 
including those published on the Internet. As the Internet is a global 
information network, this language may leave it unclear what would 
constitute an Internet advertisement that is ``published'' in the 
United States. For example, a Web site that is hosted on a server 
located in the United States could arguably fall within the scope of 
our rule. Conversely, a Web site hosted on a server located outside of 
the United States could still be marketing airfares to consumers in the 
United States. For this reason, and to achieve consistency with the 
Department's other airline consumer protection rules, we are proposing 
to specify that our code-share disclosure requirements regarding 
advertisements published on the Internet would apply to advertisements 
for service in, to or from the United States that are marketed to 
consumers in the United States. This standard is consistent with the 
recently amended full-fare advertising rule, 14 CFR 399.84, which only 
covers Internet advertisements published on Web sites marketed to 
United States consumers. As explained in a Frequently Asked Questions 
document issued by the Department's Enforcement Office following the 
publication of that rule, we will look at a variety of factors to 
determine whether a Web site is marketed to United States consumers, 
such as whether the Web site is in English, whether the seller of air 
transportation displays prices in U.S. dollars, or whether sales can be 
made to persons with addresses or telephone numbers in the United 
States.
    We note that this proposed standard will cover all advertisements 
appearing on a carrier's or a ticket agent's own Web site, as well as 
advertisements that are presented to U.S. consumers through other paid 
advertising venues on the Internet (such as a news media Web site or a 
travel blog Web site) and social media Web sites (such as Facebook or 
Twitter). We seek comments with regard to whether imposing the same 
standard to advertisements on all of these Web sites is reasonable and 
technically practical. We specifically ask what type of code-share 
disclosure is considered adequate from a consumer's point of view, in 
light of the brevity of the Facebook and Twitter posting formats. 
Finally, we are proposing some editorial changes to 14 CFR 257.5. 
First, we propose to replace the term ``transporting carrier'', which 
is used throughout section 257.5, with the term ``operating carrier'' 
to refer to the carrier in a code-share or wet lease arrangement that 
has the operational control of a flight but does not market the flight 
in its own name. In doing so, we are trying to achieve consistency with 
other recently amended consumer protection rules, see, e.g., 14 CFR 
259.4(c) (code-share partners' responsibilities in tarmac delay 
contingency plans) and 14 CFR 399.85(e) (notice of baggage fees for 
code-share flights). Another stylistic change proposed in this NPRM 
concerns the example disclosure statement that a seller of air 
transportation must include in a radio or television broadcasting 
advertisement. The current sample statement includes the phrase 
``[s]ome services are provided by other airlines.'' Because the words 
'' services'' and ``provided'' cover a wide range of activities, 
including ground operations, customer service, etc., they do not 
accurately convey the information we intended to relate, which was 
regarding the actual operation of a flight. Accordingly, we propose to 
change the sentence to read ``[s]ome flights are operated by other 
airlines.''

7. Disclosure That Not All Carriers are Marketed and Identification of 
Carriers Marketed on Ticket Agent Web sites

    The Department is considering requiring large travel agents to 
disclose in online displays the fact that not all carriers that serve a 
particular market are marketed by the travel agent if that is the case. 
Consumers deserve complete information regarding whether a particular 
ticket agent provides flight and fare information for all carriers or 
just a subset of carriers. Many online travel agents provide flight and 
fare information for a significant number of carriers serving a 
particular city-pair market but not all carriers that serve that 
market. In some markets, they may not provide information regarding any 
carrier serving the market. Online travel agents do not necessarily 
identify the carriers whose schedule and fare information is or is not 
provided in search results. As a result, consumers may believe they are 
searching all possible flight options for a particular city-pair market 
when in fact there may be other options available. The Advisory 
Committee for Aviation Consumer Protection recommended that DOT require 
ticket agents, including online ticket agents, to disclose the fact 
that they do not offer for sale all airlines' tickets, if that is the 
case, and that additional airlines may serve the route being searched, 
so that consumers know they may need to search elsewhere if they want 
to find all available air travel options. Accordingly, the Department 
is considering requiring large ticket agents, such as online travel 
agents, that operate Web sites that display schedules or fares and/or 
sell tickets for air transportation of more than one carrier to 
disclose whether they display the airfares of all

[[Page 29989]]

carriers serving any market that can be searched on the travel agent's 
Web site. One alternative would be to merely require travel agents to 
prominently note on their Web sites that not all U.S. air carriers and 
non-U.S. air carriers serving the U.S. are displayed on the Web site or 
marketed by the travel agent. Another option would be to prominently 
display a statement in connection with a search of a particular city 
pair that not all air carriers serving those cities are displayed on 
the Web site or marketed by the travel agent. Alternatively, online 
travel agents could be required to specifically identify all of the air 
carriers that are marketed by the travel agent.
    The Department is not providing rule text for this proposal. 
Instead, it seeks comment on how such a requirement should be 
implemented. For example, should the disclosure be made with a general 
statement on the travel agent's home page with a link to more detailed 
information? Or should the disclosure be made through a statement on 
the search results page that displays itineraries in response to a 
consumer search? If the general disclosure statement is linked to a 
page with more detailed information, what additional information should 
be provided? Additionally, the Department seeks comment on whether such 
a rule should be limited to ticket agents of a certain size or should 
include all ticket agents, and if the rule should be limited to ticket 
agents of a certain size, what parameters should the Department use to 
define the ticket agents included in the requirement. The Department 
also seeks comment on the costs and benefits of requiring Web sites to 
state whether a particular carrier's schedule information is provided 
on that Web site and of identifying those air carriers that must be 
included in such disclosure. For example, what are the costs and 
benefits of a disclosure that says, ``These schedules do not include 
all carriers in these markets'' versus a disclosure that would list the 
carriers that are included?

8. Prohibition on Undisclosed Airfare Display Bias by Ticket Agents and 
Carriers

    In connection with electronic displays of multiple carriers' 
airfares and schedules, the Department is proposing to prohibit any 
undisclosed bias in any presentation of carrier schedules, fares, rules 
or availability. A Department prohibition on airfare display bias is 
not unprecedented. In the past, Department regulations contained a 
limited prohibition on bias of computer terminal displays provided to 
travel agents by computer reservation systems (CRSs), the precursors to 
GDSs. At that time, there was a concern that the owners of the CRSs 
(initially airlines and, subsequently, other entities) would 
potentially engage in display bias or other unfair, deceptive, 
predatory, or anticompetitive practices absent Department regulation of 
their operations (14 CFR Part 255). This rule prohibited CRSs used by 
travel agents from using factors relating to carrier identity in 
determining how airfares were displayed. Among other things, the CRSs 
were required to use the same editing and ranking criteria for ``both 
on-line and interline connections and not give on-line connections a 
system-imposed preference over interline connections.'' 14 CFR 
255.4(a)(1). However, Part 255 sunset on July 31, 2004 (see 14 CFR 
255.8).
    Recently, the Enforcement Office has been informed of allegations 
that certain ticket agents, including GDSs, have biased their displays 
to disadvantage certain airlines in the course of hard-fought contract 
negotiations. Those ticket agents have allegedly biased the listing of 
available itineraries displayed in response to searches by consumers or 
travel agents on their Web sites. The display bias allegedly resulted 
in consumers and travel agents being presented with favored carriers' 
fare and schedule information first. Complainants also assert that 
although some ticket agents may have received limited disclosure 
regarding certain instances of display bias, the general public 
received no notice or disclosure. Moreover, we are concerned that GDSs 
and other ticket agents could sell bias to certain airline competitors 
or bias displays toward carriers that pay higher segment fee 
compensation to GDSs and such bias could be difficult to detect. The 
prohibition would also apply to flight search tools operated by meta-
search engines and similar entities engaged in the distribution of 
certain air transportation information. As discussed earlier, the 
Department would view such entities as being ticket agents.
    The Department is considering a regulation that would require any 
carrier or ticket agent that provides electronic display of airfare 
information to provide unbiased displays or disclose the biases in the 
display. The regulation would apply to all electronic displays of 
multiple carriers' fare and schedule information, whether the display 
is available on an unrestricted basis, e.g., to the general public, or 
is only available to travel agents who sell to the public. The 
requirement to provide unbiased displays or disclose biases in the 
display would also apply to electronic displays used for corporate 
travel unless a corporation agrees by contract to biases in the display 
used by its employees for business travel. If not, the regulation would 
require carriers and ticket agents that provide airfare information 
electronically to display the lowest generally available airfares and 
most direct routings that meet the parameters of the search in response 
to an inquiry for an airfare quotation for a specific itinerary. It 
would also prohibit biasing displays such that less direct routings 
that are equivalently priced, or more expensive fares with an equally 
direct routing, and that meet the parameters of a search, are displayed 
more prominently or earlier in the search results list than a more 
direct routing or a lower fare simply to benefit a particular favored 
carrier or penalize a disfavored carrier. In the alternative, carriers 
and ticket agents could provide biased displays so long as they have 
prominent and specific disclosure of the bias. The requirements would 
apply to displays in response to airfare inquiries by a consumer for a 
particular itinerary and displays in response to airfare inquiries made 
by a travel agent or other intermediary in the sale of air 
transportation for a particular itinerary.
    Under this proposal, undisclosed display bias would not be 
permitted on displays publicly available directly to consumers or 
displays directed toward travel agents, such as those working for 
corporations or other travel management companies. To the extent the 
consumer or travel agent placed restrictions on the search, for 
example, by limiting to one or more specific carriers or classes of 
service, the display would not be considered to contain undisclosed 
display bias as long as the display disclosed the lowest available 
fares and most direct itineraries that met the search parameters. In 
addition to prohibiting display bias, the Department is considering 
requiring any ticket agent that decided to bias its displays and 
disclose the existence of bias to also disclose any incentive payments 
it is receiving. We seek comment on what kind of disclosure of the 
existence of incentive payments would be most helpful for consumers. 
When providing notice, should the ticket agent list the companies, air 
carriers, and foreign air carriers offering the incentives? If so, 
should the list rank companies in order of the company providing the 
incentives of the greatest monetary value? Or should it group them 
based on whether the incentive is provided in the form of payments, 
rebates, discounts, commissions, volume-based compensation, or another 
method? Should the requirement apply to

[[Page 29990]]

incentives earned by the travel agent in the previous calendar year or 
some other time period? Should it be limited to incentives with a 
certain monetary value?
    The Department seeks comment on whether the prohibition on display 
bias should be limited to airfare and routings. We also seek comment on 
the costs and benefits of a prohibition on display bias.

9. Prohibition on Post-Purchase Price Increases for Baggage Fees

    In the second Enhancing Airline Passenger Protections rule, the 
Department prohibited an air carrier or agent from increasing the price 
of air transportation after the passenger purchases a ticket. Under 14 
CFR 399.88, carriers and other sellers of air transportation are now 
prohibited from increasing the price of air transportation to a 
particular passenger after the purchase of a ticket, including but not 
limited to the price of a seat, the price for the carriage of passenger 
baggage, and the price for any applicable fuel surcharge. The rule 
includes a limited exception for an increase in a government-imposed 
tax or charge. In response to questions received after publication of 
the final rule, the Department's Enforcement Office clarified that 
there could not be an increase to a particular passenger in the charge 
for any ancillary service after a ticket is purchased, including 
services not purchased with the ticket. The reasoning behind this was 
twofold. First, by using the phrase ``including but not limited to'' 
when describing the types of items that sellers of air transportation 
are prohibiting from price increases after ticket purchase, the 
Department made it clear that these items are simply examples and not 
an exhaustive list. Second, under the disclosure requirements of 14 CFR 
399.85(c), sellers of air transportation are required to inform 
passengers about baggage charges on their e-ticket confirmations as a 
means of preventing consumers from being surprised about hidden fees. 
If these fees could change after the passenger purchases the ticket, 
the information provided in the e-ticket would be useless.
    However, after the rule became final, certain carriers raised 
concerns that had not been raised previously: That a prohibition on an 
increase in the price of any ancillary service after a ticket purchase 
could prove cumbersome for carriers in practice. For example, one 
passenger might be entitled to pay a lesser amount for a drink or a 
snack than the passenger sitting next to him or her. They contended 
that the cost of developing systems to keep track of the price of every 
ancillary service at the time of passenger purchase and charging those 
prices on an individualized basis would be prohibitive.
    In light of the problems in application of the rule as it relates 
to ancillary services that are not purchased with the ticket, the 
Enforcement Office issued Guidance on Price Increases of Ancillary 
Services and Products not Purchased with the Ticket on December 28, 
2011. In that guidance, the Department's Enforcement Office noted that 
the Department had decided to revisit the issue through a further 
rulemaking to examine the application of the rule to fees for ancillary 
services not purchased with the ticket. The Department also announced 
that with respect to fees for ancillary services that were not 
purchased with the air transportation, it would only enforce the 
prohibition on post-purchase price increases for carry-on bags and 
first and second checked bags. The application of the prohibition of 
the post-purchase price increase was also at issue in a lawsuit filed 
by two airlines against the Department. The court considered the rule 
as applied under the December 28, 2011, guidance and upheld the 
Department's rule prohibiting post-purchase price increases as it is 
currently being applied. Spirit Airlines, Inc., v. U.S. Dept. of 
Transportation (D.C. Cir. July 24, 2012), slip op. at 20-21. Petition 
for Writ of Certiorari denied on April 1, 2013.
    The Department is now proposing to modify 14 CFR 399.88 to prohibit 
a price increase after the purchase of air transportation for any 
mandatory charge the consumer must pay (such as the air fare or an 
applicable fuel surcharge), and the price for the carriage of any 
passenger baggage. Sellers of air transportation would also continue to 
be prohibited from increasing the price of any ancillary service after 
it is purchased. The logistical and financial burdens placed on 
carriers related to ancillary services other than baggage that are not 
purchased with the ticket are too great. Ensuring that in-flight crew 
have the information and tools to impose varying service fees depending 
on when a passenger purchased a ticket would likely lead to 
unreasonable costs for carriers, significant confusion, and ultimately 
consumer harm by incentivizing carriers to set prices for ancillary 
services artificially high. However, the Department believes that 
transporting baggage is intrinsic to air transportation and baggage 
fees are a major factor for consumers when deciding which air 
transportation to purchase, and should be subject to the rule 
prohibiting post-purchase price increases. Therefore, under the 
proposed rule, the price for the transportation of passenger baggage 
that applies when a passenger buys a ticket is the price that they will 
pay, even if they do not pay for the transportation of baggage at the 
time they purchase the ticket. This interpretation is consistent with 
guidance given by the Department in 2008 which states that ``[i]n no 
case should more restrictive baggage policies or additional charges be 
applied retroactively to a consumer who purchased his or her ticket at 
a time when the charges did not apply, or when a lower charge 
applied.'' Notice of the Assistant General Counsel for Aviation 
Enforcement and Proceedings, ``Guidance on Disclosure of Policies and 
Charges Associated with Checked Baggage,'' May 13, 2008.
    In addition, under the revised 14 CFR 399.88, after a ticket is 
purchased, carriers and other sellers of air transportation would 
continue to be prohibited from raising the price of the air 
transportation or of ancillary services that are purchased with the 
ticket. For example, if a passenger buys a ticket that costs $200 
(total fare, inclusive of taxes and fees) and pays an additional $25.00 
for a priority boarding pass, and the carrier subsequently increases 
the price of a priority boarding pass effective on a date before this 
passenger travels, the carrier cannot retroactively increase the price 
for the consumer who already purchased their priority boarding pass. 
The new 14 CFR 399.88 would still allow for the limited exception of an 
increase in the price of a ticket if there is an increase in a 
government-imposed tax or fee; that tax/fee could still be 
retroactively applied to the passenger's travel if the required notice 
is provided to consumers prior to the ticket purchase. However, any 
other increase in price of any already purchased ancillary service 
would constitute an unfair and deceptive practice.
    The Department is also considering the alternative of keeping the 
original interpretation of the rule. Under this interpretation, the 
price of ancillary services and products for a given consumer is capped 
at the time that he or she purchases the air transportation whether or 
not these items are purchased along with the air transportation, as the 
existence of a fee for other services or products related to the air 
transportation, as well as the amount of any such fee, can influence a 
customer's purchasing decision. The Department invites comments on the 
costs and benefits of retaining the rule as originally interpreted and 
on the new

[[Page 29991]]

proposal to prohibit only an increase in the price of the carriage of 
baggage if not purchased with the fare.
    Finally, the Department is also contemplating revising the post-
purchase price provision to better address the issue of ``mistaken 
fares.'' As explained above, section 399.88 essentially bans sellers of 
air transportation from increasing the price of an airline ticket to a 
consumer who has purchased and paid for the ticket in full. As a 
result, the Department's Enforcement Office explained in a guidance 
document that, under section 399.88, ``if a consumer purchases a fare 
and that consumer receives confirmation (such as a confirmation email 
and/or the purchase appears on their credit card statement or online 
account summary) of their purchase, then the seller of air 
transportation cannot increase the price of that air transportation to 
that consumer, even when the fare is a `mistake.' '' Since then, the 
Enforcement Office has investigated a number of incidents where 
passengers complained that airlines or ticket agents would not honor 
tickets that had been paid for in full because the sellers of the air 
transportation erroneously let them book flights for less than the 
actual value. The Enforcement Office has become concerned that 
increasingly mistaken fares are getting posted on frequent-flyer 
community blogs and travel-deal sites, and individuals are purchasing 
these tickets in bad faith and not on the mistaken belief that a good 
deal is now available. We solicit comment on how best to address the 
problem of individual bad actors while still ensuring that airlines and 
other sellers of air transportation are required to honor mistaken 
fares that were reasonably relied upon by consumers.
    Additionally, industry and consumers have raised questions 
regarding when transportation is considered to touch upon the United 
States and thus covered by the prohibition on post-purchase price 
increases. Currently, section 399.88 states that it is an unfair and 
deceptive practice for any seller of scheduled air transportation 
within, to, or from the United States or of a tour or tour component 
that includes scheduled air transportation within, to, or from the 
United States, to increase the price of that air transportation to a 
consumer after the air transportation has been purchased by the 
consumer, except in the case of a government-imposed tax or fee and 
only if the passenger is advised of a possible increase before 
purchasing a ticket. We are considering defining the phrase ``air 
transportation within, to, or from the United States'' for the purposes 
of this section to mean any transportation that begins or ends in the 
United States or involves a connection or stopover in the United States 
that is 24 hours or longer. We ask for comments on whether this new 
definition would provide greater clarity to members of the public and 
the regulated entities on when sellers of air transportation would be 
required to honor mistaken fares.

10. Amendments/Corrections to Second Enhancing Airline Passenger 
Protections Rule and Certain Other Provisions

    In response to questions and concerns from airlines and other 
regulated entities, the proposed amendments to the rules described 
below are intended to correct drafting errors, provide clarifications 
and reflect minor changes to the second Enhancing Airline Passenger 
Protections rule to increase consistency and conform to guidance issued 
by the Department's Enforcement Office regarding its interpretation of 
the rule. On its own initiative, the Department is also making 
administrative changes to another rule.
a. Baggage Disclosure Requirements Under Sections 399.85(a) and (b)
    In sections 399.85(a) and 399.85(b) the final rule inadvertently 
refers to Web sites that are ``accessible'' from the United States. In 
this NPRM, we are proposing to codify the guidance given in Frequently 
Asked Question 25, page 25, and amend sections 399.85(a) and 
399.85(b) to reflect the intended applicability of those sections to 
Web sites ``marketed to'' U.S. consumers. This change also makes 
sections 399.85(a) and 399.85(b) consistent with the other provisions 
in 14 CFR 399.85 that apply to Web sites that market air transportation 
to U.S. consumers. The Department invites comment on this proposal.
    In further regard to section 399.85(b), after issuing the rule and 
assisting carriers and online travel agents with their efforts to come 
into compliance, it became clear that the Enforcement Office needed to 
clarify two aspects of this disclosure rule. The first issue is when a 
carrier or agent needs to notify a passenger that ``baggage fees may 
apply.'' The rule text states that an agent or carrier must ``clearly 
and prominently disclose on the first screen in which the agent or 
carrier offers a fare quotation for a specific itinerary selected by a 
consumer that additional airline fees for baggage may apply and where 
consumers can see these baggage fees.'' Although section 399.85(b) may 
be amended in accordance with the proposal regarding the ``[d]isplay of 
ancillary service fees through all sales channels,'' if the Department 
decides not to adopt that proposal it would amend section 399.85(b) to 
conform to the guidance previously issued. In that case, section 
399.85(b) would state that the first screen on which the carrier offers 
a fare quotation after a passenger initiates a search for flight 
itineraries must include notification that baggage fees may apply. For 
example, if a passenger performs a search for flights from San 
Francisco to Dallas on a carrier or agent's Web site, the first page 
displayed in response to that search that includes a fare quote must 
also note that baggage fees may apply. The second issue is that the 
Department wishes to clarify that in showing ``where consumers can see 
these baggage fees,'' the search results screen of the Web site of the 
agent or carrier must include a hyperlink that takes the consumer to 
the up-to-date and accurate baggage fee listings. An agent may link to 
a chart of information that it generates itself, to a third party site 
containing the information, or to the carrier's page, as it is allowed 
to do under the current rule.
b. Standard Applicable to Reportable Tarmac Delays Under Part 244
    In 14 CFR Part 244, the Department requires U.S. and foreign air 
carriers to file Form 244 ``Tarmac Delay Report'' with the Department 
with respect to any covered flight that experienced a lengthy departure 
or arrival delay on the tarmac at a large, medium, small, or non-hub 
U.S. airport. A ``lengthy'' tarmac delay for purposes of this report is 
defined in Part 244 as any tarmac delay that lasts ``three hours or 
more.'' This standard is inconsistent with the standard applicable to 
the tarmac delay contingency plan requirements under 14 CFR Part 259 
and the existing reporting requirements of BTS, both of which refer to 
any tarmac delay of ``more than three hours.'' In a Frequently Asked 
Questions document issued by the Department following the issuance of 
the final rule for Part 244, we acknowledged this discrepancy and 
stated that we intend to correct it in a future rulemaking. In this 
NPRM, we are proposing to amend the rule text of Part 244 and to adopt 
the ``more than three hours'' standard so this Part would be consistent 
with other Parts of our rules. Under this proposal, any tarmac delay 
that lasts exactly three hours would not be covered under the 
requirements of Part 244.

[[Page 29992]]

c. Civil Penalty for Tarmac Delay Violations
    In the first and second Enhancing Airline Passenger Protections 
final rule, the Department stated that failure to comply with the 
assurances required by the tarmac delay rule will be considered an 
unfair and deceptive practice within the meaning of 49 U.S.C. 41712 
that is subject to enforcement action by the Department. Under 49 
U.S.C. 46301, the Department has authority to impose a civil penalty of 
``of not more than $27,500'' for each violation of the specifically 
listed aviation-related laws and regulations, which would include DOT's 
tarmac delay rule. Nevertheless, in recent years, there have been 
questions raised as to whether the Department has the authority under 
the civil penalty statute (49 U.S.C. 46301) to assess a civil penalty 
on a per passenger basis for tarmac delay violations. As such, we are 
amending the tarmac delay rule to clarify that the Department may 
impose penalties for tarmac delay violations on a per passenger basis.
    It has long been the Department's policy that each consumer 
affected by an unlawful carrier practice is a separate violation. For 
example, if a flight is canceled and ten people on that flight cannot 
be rerouted and thus are entitled to a refund of their unused 
transportation, and the carrier fails to comply with the Department's 
refund rules, each person whose refund was not provided in compliance 
with our rules would constitute a separate violation. Similarly, if 
five people were involuntarily denied boarding from an oversold flight 
and none were paid denied boarding compensation as required by our 
oversales rule that would be five violations. Our authority to 
calculate a civil penalty on a per passenger basis for tarmac delay 
violations is just as clear. Each passenger on a flight that 
experiences a tarmac delay that exceeds three hours for domestic 
flights or four hours for international flights experiences the 
inconvenience that this rule was designed to prevent and gives rise to 
a separate violation. Likewise, each passenger who is not offered food 
and water at the two-hour mark during a tarmac delay gives rise to a 
separate violation. Indeed, a number of carriers have recognized this 
fact and complained in public filings and press reports of the prospect 
of incurring $27,500 per passenger in fines for tarmac delay 
violations.
    The purpose of the tarmac delay rule is clearly to mitigate 
hardships for individual airline passengers during lengthy tarmac 
delays. To that end, the rule requires carriers to develop contingency 
plans for lengthy tarmac delays, and to provide an assurance that the 
carrier will not allow an aircraft to remain on the tarmac for more 
than three hours for domestic flights and for more than four hours for 
international flights without each passenger being given an opportunity 
to deplane. The preambles to both the first and second Enhancing 
Airline Passenger Protections final rules refer to protecting 
individual passengers. Carriers are also required to tell passengers 
what they can expect by posting their contingency plans on their Web 
site. To the extent that carriers do not live up to the assurances that 
they provided to any passenger, it is an unfair and deceptive practice 
with respect to each affected passenger and therefore a separate 
violation of 49 U.S.C. 41712 with respect to each such passenger.
d. Required Oral Disclosure of Material Restrictions on Travel Vouchers 
Offered to Potential Volunteers in Oversale Situations Under Part 250
    Another inconsistency in the second Enhancing Airline Passenger 
Protections final rule concerns the requirement in 14 CFR Part 250 to 
provide oral disclosure of any material restrictions on travel vouchers 
offered to any passenger a carrier solicits to voluntarily give up his 
or her confirmed reservation on an oversold flight. The preamble to the 
final rule discussed extensively the reason for requiring such oral 
disclosure to both voluntarily and involuntarily bumped passengers who 
are orally offered a voucher, but inadvertently, the new Part 250 rule 
text only requires oral disclosures to passengers who are involuntarily 
denied boarding. The rule text, as it currently stands, allows carriers 
to provide such disclosure solely by written notice to passengers who 
are orally solicited to be volunteers in exchange for travel vouchers. 
However, for the reasons discussed in the preamble to the second 
Enhancing Airline Passenger Protections rule, we are unconvinced that 
such written notice alone is adequate at times when the solicitation 
itself is oral and passengers are constrained by time pressure to make 
a quick decision as to whether to volunteer. Many times, the written 
notice is incorporated in the printed contents of the travel voucher, 
and the passenger frequently would not have time to review the notice 
before he or she commits to the acceptance of the voucher. We continue 
to believe that a brief oral summary of the material restrictions 
applicable to the travel vouchers that are orally offered to potential 
volunteers (as well as continuation of the requirement to orally 
disclose this information to involuntarily bumped passengers who are 
offered the option of a travel voucher) will provide further 
protections to these passengers so they can make an informed decision. 
As such, we are proposing to amend section 250.2b(c) to reflect this 
notion. Under this proposal, when carriers orally solicit volunteers 
and offer travel vouchers as incentives, they would also be required to 
orally describe any material restrictions applicable to the travel 
vouchers.
e. Limitation of Flight Status Notification Requirement of 14 CFR 259.8
    Section 259.8 requires that covered carriers must notify passengers 
and other interested persons of flight status changes within 30 minutes 
after the carrier becomes aware of such changes. Flight status changes 
in this section include a flight cancellation, a delay of more than 30 
minutes, or a diversion. Although the preamble and rule text did not 
specify how far in advance of the date of the scheduled operation 
carriers must comply with the notification requirements, the Frequently 
Asked Questions guidance document issued by the Enforcement Office in 
relation to the second Enhancing Airline Passenger Protections rule 
stated that, as an enforcement policy, the rule applies to any flight 
status changes that occur within seven calendar days of the scheduled 
date of the operation. See Frequently Asked Questions, Section VIII, 
2. We further explained that the purpose of this rule is to 
avoid or reduce unnecessary waits at, or pointless trips to, an 
airport, which are most likely to occur on the date of the scheduled 
travel. Therefore, the closer to the date of the scheduled operation, 
the more important it is for carriers to provide notice of a flight 
status change promptly. In this NPRM, we propose to codify this 
``seven-calendar-day'' timeframe as we believe that requiring carriers 
to provide notifications of schedule changes within 30 minutes after 
they become aware of such changes is not necessary if the changes occur 
more than seven days before the date of the operation. To require 
notifications within 30 minutes for changes occurring more than seven 
days in advance of the date of operation would likely greatly increase 
carriers' burden yet result in little additional benefit to the public. 
We do emphasize, however, that notifications of changes that occur 
earlier than the seven-day threshold are still required to be delivered 
to the

[[Page 29993]]

passengers in a timely manner; see 14 CFR 259.5(b)(10).
    We are also proposing some editorial changes to section 259.8 to 
clarify that flight status change notifications required in this 
section should be provided not only to passengers, but also to any 
member of the public who may be affected by the changes, including 
persons meeting passengers at airports or escorting them to or from 
airports. This is a point we made clear in the preamble of the final 
rule document but not in the rule text. In this regard, we are 
proposing to change the word ``passengers'' to ``consumers'' in the 
title of section 259.8, to change the first instance of the word 
``passengers'' in subsection 259.8(a)(1) to the phrase ``passengers and 
other interested persons,'' and to change the second instance of that 
word to ``subscribers.''
f. Removing the Rebating Provision in Section 399.80(h)
    Section 399.80(h) states that it is an unfair or deceptive practice 
or unfair method of competition for a ticket agent to advertise or sell 
air transportation at less than the rates specified in the tariff of 
the air carrier, or offer rebates or concessions, or permit persons to 
obtain air transportation at less than the lawful fares and rates. This 
provision is a vestige of the period before deregulation of the airline 
industry. Domestic air fares were deregulated effective 1983, and in 
most cases international air fares to and from the United States are no 
longer contained in tariffs that specify ``lawful'' fares. In those 
markets where international fares are still subject to regulation, 
carriers that do not comply with their tariff are potentially subject 
to enforcement action under 49 U.S.C. 41510 concerning adherence to 
tariffs or 49 U.S.C. 41712 concerning unfair or deceptive practices and 
unfair methods of competition (the statutory basis for section 
399.80(h)). The Department's Enforcement Office has said that it will 
pursue enforcement action against a carrier that does not comply with 
its tariff when there is clear evidence of a pattern of direct consumer 
fraud or deception, invidious discrimination, or violations of the 
antitrust laws. It has been the longstanding policy of that office to 
decline to prosecute instances of noncompliance with tariff obligations 
that result in benefits to consumers absent clear evidence of such 
behavior. (See the Frequently Asked Questions for ``Rule 2'' 
of the Enhancing Airline Passenger Protections regulation, www.dot.gov/individuals/air-consumer/aviation-rules, section X, question 38a, 
footnote 1.) There have been no enforcement actions solely for tariff 
compliance for over 20 years, and should such action become appropriate 
in the future it can proceed under the authority of sections 41510 or 
41712. 14 CFR 399.80(h) is not necessary, and consequently we are 
proposing to remove this provision.

Regulatory Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    This action has been determined to be significant under Executive 
Order 12866 and the Department of Transportation's Regulatory Policies 
and Procedures. It has been reviewed by the Office of Management and 
Budget under that Executive Order. The Regulatory Evaluation finds that 
the costs for the proposed rule exceed the monetized benefits as the 
benefits from all provisions, with the exception of provision 2, could 
not be measured and valued with confidence. The benefits which could be 
estimated for provision 2 do not include the value of all likely 
benefits, as values for some of those could not be adequately 
estimated. The total present value of monetized passenger benefits from 
the proposed requirements over a 10-year period at a 7% discount rate 
is $25.1 million and the total present value of monetized costs 
incurred by carriers and other sellers of air transportation over a 10-
year period at a 7% discount rate is $80.5 million. The net present 
cost of the rule for 10 years at a 7% discount rate is $53.8 million. 
However, if the value of the unquantified benefits, per passenger, is 
any amount greater than one cent, and unquantified costs are minimal, 
then the entire rule is net beneficial. In other words, if passengers 
are willing to pay, on average, one penny per trip for all eight 
provisions of the proposal, then the value of the proposal outweighs 
its costs.
    Below, we have included a table outlining the projected costs and 
benefits of this rulemaking.

                   Table--Summary of Costs and Benefits Over 10 Years, Discounted at 7 Percent
                                                  [Millions $]
----------------------------------------------------------------------------------------------------------------
                                                                              10 Year analysis period
                                                                 -----------------------------------------------
                           Provisions                                            7% Discount rate
                                                                 -----------------------------------------------
                                                                       Costs         Benefits      Net benefits
----------------------------------------------------------------------------------------------------------------
1 Definition of Ticket Agent
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................             N/A             N/A             N/A
----------------------------------------------------------------------------------------------------------------
2 Carriers provide ancillary fee information to ticket agencies for display
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................           $46.2           $25.1         ($21.1)
----------------------------------------------------------------------------------------------------------------
Unquantified/non-monetized benefits or costs                       Value of Unquantified Benefits per PAX Needed
    Greater Competition and Lower Overall Prices for Ancillary
     service fees                                                     for Benefits to Equal or Exceed Costs.
    Greater Efficiency by Consumers in Flight Purchases              Less than $0.00 (21.06 M net cost/1,666 M
Unquantified/non-monetized Costs:                                   travelers purchasing via internet--10 yrs).
    May Inhibit New Entrants
    May Decrease Carrier Flexibility to Customize Services
----------------------------------------------------------------------------------------------------------------
3 & 4 Expand reporting threshold to 0.50% and reporting as mainline carriers and code-share partners combined
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................           $29.8             N/A         ($29.8)
----------------------------------------------------------------------------------------------------------------

[[Page 29994]]

 
Unquantified/non-monetized benefits:                               Value of Unquantified Benefits per PAX Needed
    Improved On-Time Performance for Newly Reporting Carriers
     and Code-Share Flights                                           for Benefits to Equal or Exceed Costs.
     for All Reporting Carriers                                     $0.7 ($29.75 M net cost/43.9 M PAX on newly
    Improved Handling of Baggage for Newly Reporting Carriers
     and Code-Share Flights                                        reporting carriers 10 yrs) to Less than $0.00
     for All Reporting Carriers                                     ($29.75M net cost/7,335 M all domestic PAX
    Decrease in Oversales                                                            10 yrs).
    Improved Customer Good Will Towards Carriers
    Insurance Value
    Improved Public Oversight of the Industry
Unquantified/non-monetized Costs:
    Increased Training Costs for Gathering Data to Report (some
     carriers only)
    Increased Management Costs To Improve Carrier Performance
----------------------------------------------------------------------------------------------------------------
5 Minimum customer service standards for ticket agents
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................            $3.0             N/A          ($3.0)
----------------------------------------------------------------------------------------------------------------
Unquantified/non-monetized benefits:                               Value of Unquantified Benefits per PAX Needed
    Improved Customer Good Will Towards Ticket Agents                 for Benefits to Equal or Exceed Costs.
    Reduced Legal and Administrative Costs to Manage Complaints      Less than $0.00 (2.95 M net cost/3,405 M
    Faster Resolution of Complaints/Refunds                         domestic PAX purchasing via travel agents
    Potential Increase in Competitiveness of Travel Agents vs.
     Carriers with Customer                                                          10 yrs).
     Protections Similar to Carriers
Unquantified/non-monetized Costs:
    Increased Training Costs
    Increased Management Costs
    Increased Staff Time
----------------------------------------------------------------------------------------------------------------
6 Disclosure of code-share segments in schedules, advertisements and communications with consumers
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................             N/A             N/A             N/A
----------------------------------------------------------------------------------------------------------------
7 Disclosure of carriers marketed by ticket agents (no proposed rule text--seeking comments)
----------------------------------------------------------------------------------------------------------------
8 Prohibition on undisclosed biasing
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................             N/A             N/A             N/A
----------------------------------------------------------------------------------------------------------------
Unquantified/non-monetized benefits:
    Decrease in Incentive Payments to Ticket Agents from Carriers Potentially Leading to Lower Costs to
     Consumers
    Potential Decrease in Consumers Not Noticing Flights which Better Meet Their Criteria
Unquantified/non-monetized Costs:
    Programming Costs to Change Ranking Software/Systems or to Post Notice
    Legal Costs to Adjust Existing Contracts Currently Requiring Preferential Display
----------------------------------------------------------------------------------------------------------------
9 Prohibition of post-purchase price increase for ancillary service fees
----------------------------------------------------------------------------------------------------------------
Monetized Costs and Benefits....................................             N/A             N/A             N/A
----------------------------------------------------------------------------------------------------------------
Unquantified/non-monetized benefits:
    Improved Customer Good Will Towards Ticket Agents
    Reduced Legal and Administrative Costs to Manage Complaints
    TOTAL (All Proposed Provisions)*............................           $80.5           $25.1         ($53.8)
----------------------------------------------------------------------------------------------------------------
Value of Unquantified Benefits Per Passenger Needed for.........  ..............           $0.01  ..............
----------------------------------------------------------------------------------------------------------------
* Note: Details may not sum to totals in table due to rounding.

    We invite comment on the quantification of costs and benefits for 
each provision, as well as the methodology used to develop our cost and 
benefit estimates. We also seek comment on how unquantified costs and 
benefits could be measured. More detail on the estimates within this 
table can be found in the preliminary Regulatory Impact Analysis 
associated with this proposed rule.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
agency to review regulations to assess their impact on small entities 
unless the agency determines that a rule is not expected to have a 
significant economic impact on a substantial number of small entities. 
The regulatory initiatives discussed in this NPRM would have some 
impact on some small entities. A direct air carrier or foreign air 
carrier is a small business

[[Page 29995]]

if it provides air transportation only with small aircraft (i.e., 
aircraft with up to 60 seats/18,000 pound payload capacity). See 14 CFR 
399.73. A travel agency is considered to be small if it makes $3.5 
million or less in annual revenues. While most of the proposals in this 
rulemaking impact carriers, certain elements also impact ticket/travel 
agents.
    The Initial Regulatory Flexibility Analysis found that there are 
some costs, though not substantial, to certain small entities from 
provision 3 which would expand the definition of a reporting carrier to 
one that accounts for at least 0.5% of domestic scheduled passenger 
revenues; provision 4, which would expand the reporting requirements 
for reporting carriers to include an additional, combined set of 
reports for both the carrier's own flights and its code-share partner 
flights; and provision 2, which would require that U.S. and foreign air 
carriers and ticket agents disclose certain ancillary service fees to a 
consumer who requests such information.
    Our analysis estimates that a total of 87 small U.S. and foreign 
air carriers may be impacted by this rulemaking. We believe that the 
economic impact on these entities would not be significant. The 
estimated cost to small carriers from all the provisions would be $5.1 
million for the first year and $24.7 million for a 10-year period 
discounted at 7 percent. On the basis of this examination, I certify 
that this rulemaking would not have a significant economic impact on a 
substantial number of small entities. A copy of the Initial Regulatory 
Flexibility Analysis has been placed in docket.

C. Executive Order 13132 (Federalism)

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 (``Federalism''). This 
notice does not propose any provision that (1) has substantial direct 
effects on the States, the relationship between the national government 
and the States, or the distribution of power and responsibilities among 
the various levels of government; (2) imposes substantial direct 
compliance costs on State and local governments; or (3) preempts State 
law. States are already preempted from regulating in this area by the 
Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation 
and funding requirements of Executive Order 13132 do not apply.

D. Executive Order 13084

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13084 (``Consultation and 
Coordination with Indian Tribal Governments''). Because none of the 
options on which we are seeking comment would significantly or uniquely 
affect the communities of the Indian tribal governments or impose 
substantial direct compliance costs on them, the funding and 
consultation requirements of Executive Order 13084 do not apply.

E. Paperwork Reduction Act

    This NPRM proposes two new collections of information that would 
require approval by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (Pub. L. 104-13, 49 U.S.C. 3501 et 
seq.). Under the Paperwork Reduction Act, before an agency submits a 
proposed collection of information to OMB for approval, it must publish 
a document in the Federal Register providing notice of the proposed 
collection of information and a 60-day comment period, and must 
otherwise consult with members of the public and affected agencies 
concerning the proposed collection.
    The first collection of information proposed here is a requirement 
that more carriers report on-time performance, mishandled baggage, and 
oversales data to the Department (i.e., expansion of reporting carriers 
from any U.S. airline that accounts for at least one percent of annual 
domestic scheduled passenger revenue to any U.S. airline that accounts 
for at least 0.5 percent of annual domestic scheduled-passenger 
revenues). The second information collection is a requirement that 
mainline carriers provide enhanced reporting for their domestic code-
share partner operations including requiring reporting carriers to 
separately report on-time performance, mishandled baggage, and 
oversales data for all domestic scheduled passenger flights marketed by 
the reporting carriers.
    For each of these information collections, the title, a description 
of the respondents, and an estimate of the annual recordkeeping and 
periodic reporting burden are set forth below:
1. Requirement for More Carriers To Report On-Time Performance, 
Mishandled Baggage, and Oversales Data to the Department
    Respondents: U.S. carriers that operate passenger service and 
account for at least 0.5 percent of domestic passenger service, but 
less than 1 percent of domestic passenger service (eight new reporting 
carriers, among which five carriers do not market directly to consumers 
and three carriers market directly to consumers).
    Estimated Annual Burden on Respondents: The first-year cost for 
eight new reporting carriers would total 26,877 hours, or 3,360 hours 
on average (for eight carriers). For each of the five new reporting 
carriers that do not market directly to consumers, the costs would 
include the following: (1) One-time cost to set up systems to collect 
and report the data for each newly reporting carrier of 1,118 hours 
(set-up costs of $100,762 divided by hourly cost of $90.10, both 
figures derived from respondent interviews); and (2) an annual cost for 
each newly reporting carrier to report data regarding on-time 
performance, baggage, and oversales of 496 hours (480 hours to collect 
data for form 234 and 16 hours to collect data for form 251). For each 
of the three new reporting carrier that market directly to consumers, 
the costs would include the following: (1) One-time cost to set up 
systems to collect and report the data for each newly reporting carrier 
of 1,118 hours (set-up costs of $100,762 divided by hourly cost of 
$90.10, both figures derived from respondent interviews); (2) an annual 
cost for each newly reporting carriers to report data regarding on-time 
performance, baggage, and oversales of 496 hours (480 hours to collect 
data for form 234 and 16 hours to collect data for form 251); and (3) 
one-time cost for setting up systems to post flight on-time performance 
information on the carrier's Web site of 4,655 hours (set-up costs of 
$419,394 divided by hourly cost of $90.10).
    Estimated Total Annual Burden: First year costs total 26,877 which 
would include the system set-up costs for new reporting carriers of 
8,944 hours (8 carriers times 1,118 hours each), annual labor cost for 
new reporting carriers to report data of 3,968 hours (8 carriers times 
496 hours each), 13,965 hours (for three carriers to set up systems to 
post on-time performance data on their Web sites). Burdens for 
subsequent years would be 4,528 hours on average annually for reporting 
carriers to collect and report their own data regarding on-time 
performance, baggage, and oversales.
    Frequency: Monthly for on-time performance and baggage reports and 
posting on-time performance on marketing carriers' Web sites; quarterly 
for filing oversales report; estimates of burden are annual.

[[Page 29996]]

2. Requirement for Reporting Carriers That Market Code-Share Flights To 
Report Their Code-Share Flights in Addition to Their Own Flights To 
Provide Enhanced Reporting for Domestic Code-Share Partner Operations
    Respondents: U.S. carriers that operate passenger service and 
account for at least 0.5 percent of domestic passenger service and 
market code-share partners (9 existing reporting carriers that market 
code-share flights).
    Estimated Annual Burden on Respondents: The annual cost for each 
code-share partner to process and report data regarding on-time 
performance, mishandled baggage, and oversales to each separate 
marketing, reporting carrier with which it code-shares would be 496 
hours (480 hours to collect data for form 234 and 16 hours to collect 
data for form 251), whether or not the marketing carrier compensates 
its code-share partner for the costs or the code-share partner takes 
the burden itself.
    Estimated Total Annual Burden: The total first-year burden would be 
30,752 hours (62 code-share partners' times 496 hours each). Each year 
after the first year, the total average burden would be 34,731 hours 
(higher than the first year to reflect the rate of growth of flights 
and passengers over the 10 year period of analysis). These estimates 
likely overestimate the actual costs to some carriers that code-share 
with multiple partners. Carriers that code-share any flights with more 
than one code-share partners should experience some efficiencies in the 
collection, management, and reporting of data regarding those flights 
for use by multiple code-share partners.
    Frequency: Monthly reports for on-time performance and mishandled 
baggage; quarterly reports for oversales; estimates of burden are 
annual.
    The Department invites interested persons to submit comments on any 
aspect of each of these two information collections, including the 
following: (1) The necessity and utility of the information collection, 
(2) the accuracy of the estimate of the burden, (3) ways to enhance the 
quality, utility, and clarity of the information to be collected, and 
(4) ways to minimize the burden of collection without reducing the 
quality of the collected information. Comments submitted in response to 
this notice will be summarized or included, or both, in the request for 
OMB approval of these information collections.

F. Unfunded Mandates Reform Act

    The Department has determined that the requirements of Title II of 
the Unfunded Mandates Reform Act of 1995 do not apply to this NPRM.

    Issued this 21st day of May, 2014, in Washington, DC.
Anthony R. Foxx,
Secretary of Transportation.

List of Subjects

14 CFR Part 234

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 244

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 250

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 255

    Air carriers, Antitrust.

14 CFR Part 256

    Air carriers, Antitrust.

14 CFR Part 257

    Air carriers, Air rates and fares, Consumer protection, Reporting 
and recordkeeping requirements.

14 CFR Part 259

    Air carriers, Air rates and fares, Consumer protection.

14 CFR Part 399

    Administrative practice and procedure, Air carriers, Air rates and 
fares, Air taxis, Consumer protection, Small businesses.

PART 234--[AMENDED]

0
1. The authority citation for part 234 revised to read as follows:

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

0
2. In Sec.  234.2, the definition of ``reporting carrier'' is revised 
to read as follows:


Sec.  234.2  Definitions.

* * * * *
    Reporting carrier means an air carrier certificated under 49 U.S.C. 
41102 that accounted for at least 0.5 percent of domestic scheduled-
passenger revenues in the most recently reported 12-month period as 
defined by the Department's Office of Airline Information, and as 
reported to the Department pursuant to Part 241 of this title. 
Reporting carriers will be identified periodically in accounting and 
reporting directives issued by the Office of Airline Information.
* * * * *
0
3. Section 234.3 is revised to read as follows:


Sec.  234.3  Applicability.

    This part applies to certain domestic scheduled passenger flights 
that are held out to the public by certificated air carriers that 
account for at least 0.5 percent of domestic scheduled passenger 
revenues. Certain provisions also apply to voluntary reporting of on-
time performance by carriers.
0
4. Section 234.4 is amended by revising paragraph (a) introductory text 
and adding paragraph (k) to read as follows:


Sec.  234.4  Reporting of on-time performance.

    (a) Each reporting carrier shall file BTS Form 234 ``On-Time Flight 
Performance Report'' with the Office of Airline Information of the 
Department's Bureau of Transportation Statistics on a monthly basis, 
setting forth the information for each of its reportable flights 
operated by the reporting carrier and held out to the public on the 
reporting carrier's Web site and the Web sites of major online travel 
agencies, or in other generally recognized sources of schedule 
information. (See also paragraph (k) of this section.)
* * * * *
    (k) Each reporting carrier shall file a separate BTS Form 234 ``On-
Time Flight Performance Report'' with the Office of Airline Information 
on a monthly basis, setting forth the information for each of its 
reportable flights held out with the reporting carrier's code on the 
reporting carrier's Web site, on the Web sites of major online travel 
agencies, or in other generally recognized sources of schedule 
information, including reportable flights operated by any code-share 
partner that is a certificated air carrier or commuter air carrier. The 
report shall be made in a form and manner consistent with the 
requirements set forth in paragraphs (a) through (j) of this section.
0
5. Section 234.6 is revised to read as follows:


Sec.  234.6  Baggage-handling statistics.

    (a) Each reporting carrier shall report monthly to the Department 
on a domestic system basis, excluding charter flights, the total number 
of checked bags, including gate checked baggage, the total number of 
wheelchairs and scooters transported in the aircraft cargo compartment, 
the total number of mishandled checked bags, including gate checked 
baggage, and the number of mishandled wheelchairs and

[[Page 29997]]

scooters that were carried in the cargo compartment. Each reporting 
carrier shall submit a separate monthly report on the mishandled 
baggage, wheelchairs and scooters as described above for all domestic 
scheduled passenger flight segments that are held out with the 
reporting carrier's code on the reporting carrier's Web site, on the 
Web sites of major online travel agencies, or in other generally 
recognized sources of schedule information, including flights operated 
by code-share partners that are certificated air carriers or commuter 
air carriers. For flights operated by a code-share partner that also 
carry passengers ticketed under another carrier's code, the reporting 
carrier shall only report baggage information applicable to passengers 
ticketed under its own code.
    (b) This information shall be submitted to the Department within 15 
days after the end of the month to which the information applies and 
must be submitted with the transmittal letter accompanying the data for 
on-time performance in the form and manner set forth in accounting and 
reporting directives issued by the Director, Office of Airline 
Information.

PART 244--[AMENDED]

0
6. The authority citation for part 244 continues to read as follows:

    Authority: 49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, 
and 41712.

0
7. Section 244.2 is amended by revising the last sentence of paragraph 
(a) to read as follows:


Sec.  244.2  Applicability.

    (a) * * * Covered carriers must report all passenger operations 
that experience a tarmac time of more than 3 hours at a U.S. airport.
* * * * *
0
8. Section 244.3 is amended by revising paragraph (a) to read as 
follows:


Sec.  244.3  Reporting of tarmac delay data.

    (a) Each covered carrier shall file BTS Form 244 ``Tarmac Delay 
Report'' with the Office of Airline Information of the Department's 
Bureau of Transportation Statistics setting forth the information for 
each of its covered flights that experienced a tarmac delay of more 
than 3 hours, including diverted flights and cancelled flights on which 
the passengers were boarded and then deplaned before the cancellation. 
The reports are due within 15 days after the end of any month during 
which the carrier experienced any reportable tarmac delay of more than 
3 hours at a U.S. airport.
* * * * *

PART 250--[AMENDED]

0
9. The authority citation for part 250 is revised to read as follows:

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

0
10. Section 250.2b is amended by revising paragraph (c) to read as 
follows:


Sec.  250.2b  Carriers to request volunteers for denied boarding.

* * * * *
    (c) If a carrier offers free or reduced rate air transportation as 
compensation to volunteers, the carrier must disclose all material 
restrictions, including but not limited to administrative fees, advance 
purchase or capacity restrictions, and blackout dates applicable to the 
offer before the passenger decides whether to give up his or her 
confirmed reserved space on the flight in exchange for the free or 
reduced rate transportation. If the free or reduced rate air 
transportation is offered orally to potential volunteers, the carrier 
shall also orally provide a brief description of the material 
restrictions on that transportation at the same time that the offer is 
made.
0
11. Section 250.5 is amended by adding a sentence at the end of 
paragraph (c)(3) to read as follows:


Sec.  250.5  Amount of denied boarding compensation for passengers 
denied boarding involuntarily.

* * * * *
    (c) * * * (See also section 250.9(c)).
* * * * *
0
12. Section 250.10 is revised to read as follows:


Sec.  250.10  Report of passengers denied confirmed space.

    (a) Each reporting carrier as defined in Sec.  234.2 of this 
chapter and any carrier that voluntarily submits data pursuant to Sec.  
234.7 of this chapter shall file, on a quarterly basis, the information 
specified in BTS Form 251. The reporting basis shall be flight segments 
originating in the United States operated by the reporting carrier. The 
reports must be submitted within 30 days after the end of the quarter 
covered by the report. The calendar quarters end March 31, June 30, 
September 30 and December 31. ``Total Boardings'' on Line 7 of Form 251 
shall include only passengers on flights for which confirmed 
reservations are offered. Data shall not be included for inbound 
international flights.
    (b) Each reporting carrier and voluntary reporting carrier shall 
file a separate BTS Form 251 for all flight segments originating in the 
United States operated under the reporting carrier's code, including 
flight segments operated by a code-share partner that is a certificated 
air carrier or commuter air carrier using aircraft that have a designed 
passenger capacity of 30 or more seats. For code-share flight segments 
that also carry passengers ticketed under another carrier's code, the 
reporting carrier shall only report information applicable to 
passengers ticketed under its own code.

PART 255--[REMOVED AND RESERVED]

0
13. Under the authority of 49 U.S.C. chapters 401 and 417, part 255 is 
removed and reserved.

0
14. Part 256 is added to read as follows:

PART 256--ELECTRONIC AIRLINE INFORMATION SYSTEMS

Sec.
256.1 Purpose.
256.2 Applicability.
256.3 Definitions.
256.4 Accurate EAIS display of information and prohibition of 
undisclosed display bias.
256.5 Prohibition against inducing undisclosed bias.


    Authority:  49 U.S.C. chapters 401 and 417.


Sec.  256.1  Purpose.

    (a) The purpose of this part is to set forth requirements for the 
operation of electronic airline information systems that provide air 
carrier or foreign air carrier schedule, fare, rule, or availability 
information, including, but not limited to, global distribution systems 
(GDSs) and Internet flight search engines, for use by consumers, 
carriers, ticket agents, and other business entities as well as for 
related air transportation distribution practices so as to prevent 
unfair and deceptive practices in the distribution and sale of air 
transportation.
    (b) Nothing in this part exempts any person from the operation of 
the antitrust laws set forth in subsection (a) of the first section of 
the Clayton Act (15 U.S.C. 12).


Sec.  256.2  Applicability.

    (a) This part applies to any air carrier, foreign air carrier, or 
ticket agent that:
    (1) Creates or develops the content of an electronic airline 
information system that combines the schedules, fares, rules, or 
availability information of more than one air carrier or foreign air 
carrier for the distribution or sale in the United States of interstate 
and foreign air transportation; or

[[Page 29998]]

    (2) Operates an electronic airline information system, e.g., GDS or 
Internet flight search tool.
    (b) This part applies only if the electronic airline information 
system is displayed on a Web site marketed to consumers in the United 
States or on a proprietary display available to travel agents, business 
entities, or a limited segment of consumers of air transportation in 
the United States.


Sec.  256.3  Definitions.

    For purposes of this part,
    (a) Lowest fare generally available means the lowest price offered 
for air transportation between designated points including all 
mandatory taxes and fees but not ancillary fees for optional services. 
The term does not cover fares restricted to a limited category of 
travelers, (e.g., negotiated corporate or government fares or discount 
fares available only to travel agents).
    (b) Availability means information provided in displays with 
respect to the seats a carrier holds out as available for sale on a 
particular flight.
    (c) Display means the presentation of air carrier or foreign air 
carrier schedules, fares, rules or availability to a consumer or agent 
or other individual involved in arranging air travel for a consumer by 
means of a computer or mobile computing device.
    (d) Integrated display means any display that includes the 
schedules, fares, rules, or availability of more than one carrier.
    (e) Listed carrier means an air carrier or foreign air carrier 
whose schedules, fares, or availability is included in an electronic 
airline information system.
    (f) Electronic airline information system or EAIS means a system 
that combines air carrier or foreign air carrier schedule, fare, rule, 
or availability information for transmission or display to air carriers 
or foreign air carriers, ticket agents, other business entities, or 
consumers. It includes direct connections between a ticket agent and 
the internal reservations systems of an individual carrier if the 
direct connection provides schedules, fares, rules, or availability of 
more than one air carrier or foreign air carrier (unless all of the 
listed carriers are under the same ownership or the individual 
carrier's direct connection only provides information on flights 
operated under its own code).


Sec.  256.4  Accurate EAIS display of information and prohibition of 
undisclosed display bias.

    Each air carrier, foreign air carrier, and ticket agent that 
operates an EAIS that provides at least one integrated display must 
comply with the requirements of this section.
    (a) Each EAIS shall display accurately all schedule, fare, rules, 
and availability information provided by or on behalf of listed 
carriers or obtained from third parties by the EAIS operator.
    (b) Each EAIS that uses any factors directly or indirectly relating 
to carrier identity in ordering the information contained in an 
integrated display must clearly disclose that the identity of the 
carrier is a factor in the order in which information is displayed.
    (c) Undisclosed display bias in an integrated display is 
prohibited.
    (1) Each EAIS's integrated display must use the same editing and 
ranking criteria for each listed carrier's flights and must not give 
any listed carrier's flights a system-imposed preference over any other 
listed carrier's flights unless the preference is prominently 
disclosed.
    (2) EAISs may organize information on the basis of any service 
criteria that do not reflect carrier identity provided that the 
criteria are consistently applied to all carriers and to all markets. 
Unless any display bias is specifically and prominently disclosed, when 
providing information in response to a search by a user of the EAIS, 
the EAIS must order the information provided so that the lowest fare 
generally available that best satisfies the parameters of the request 
(e.g., date and time of travel, number of passengers, class of service, 
stopovers, limitations on carriers to be used or routing [e.g., nonstop 
only], etc.) is displayed conspicuously and no less prominently than 
any other fare displayed. To the extent the user (e.g., consumer or 
travel agent) is entitled to access to any fares restricted to a 
limited category of travelers, the lowest of those fares must also be 
displayed conspicuously and no less prominently than any other fare 
displayed.


Sec.  256.5  Prohibition against inducing undisclosed bias.

    (a) No air carrier, foreign carrier, or ticket agent may induce or 
attempt to induce the developer or operator of an EAIS to create a 
display that would not comply with the requirements of Sec.  256.4 of 
this part or provide inaccurate schedule, fare, rules, or availability 
information that would result in a display that would not comply with 
the requirements of Sec.  256.4.
    (b) Nothing in this section requires an air carrier, foreign air 
carrier, or ticket agent to allow a system to access its internal 
computer reservation system or to permit ``screen scraping'' or 
``content scraping'' of its Web site; nor does it require an air 
carrier or foreign air carrier to permit the sale of the carrier's 
services through any ticket agent or other carrier's system. ``Screen 
scraping'' refers to a process whereby a company uses computer software 
techniques to extract information from other companies' Web sites. In 
the travel industry, screen scraping companies generally extract 
schedule and fare information from the Web sites of airlines or online 
travel agencies (OTAs) in order to display the lowest rates on their 
own Web site and eliminate the need for consumers to compare offerings 
from site to site.

PART 257--[AMENDED]

0
15. The authority citation for part 257 continues to read as follows:

    Authority:  49 U.S.C. 40113(a) and 41712.


Sec.  257.3  [Amended]

0
16. In Sec.  257.3, paragraph (g) is amended by removing the term 
``transporting carrier'' and adding ``operating carrier'' in its place.
0
17. Section 257.5 is revised to read as follows:


Sec.  257.5  Notice requirement.

    (a) Notice in flight itineraries and schedules. Each air carrier, 
foreign air carrier, or ticket agent providing flight itineraries and/
or schedules for scheduled passenger air transportation to the public 
in the United States shall ensure that each flight segment on which the 
designator code is not that of the operating carrier is clearly and 
prominently identified and contains the following disclosures.
    (1) In flight schedule information provided to U.S. consumers on 
desktop browser-based or mobile browser-based Internet Web sites or 
applications in response to any requested itinerary search, for each 
flight in scheduled passenger air transportation that is operated by a 
carrier other than the one listed for that flight, the corporate name 
of the transporting carrier and any other name under which the service 
is held out to the public must appear prominently in text format on the 
first display following the input of a search query, immediately 
adjacent to each code-share flight in that search-results list. Roll-
over, pop-up and linked disclosures do not comply with this paragraph.
    (2) For static written schedules, each flight in scheduled 
passenger air transportation that is operated by a carrier other than 
the one listed for that flight shall be identified by an asterisk or 
other easily identifiable mark that leads to disclosure of the 
corporate

[[Page 29999]]

name of the operating carrier and any other name under which that 
service is held out to the public.
    (b) Notice in oral communications with prospective consumers. In 
any direct oral communication in the United States with a prospective 
consumer, and in any telephone call placed from the United States by a 
prospective consumer, concerning a flight within, to, or from the 
United States that is part of a code-sharing arrangement or long-term 
wet lease, a ticket agent doing business in the United States or a 
carrier shall inform the consumer, the first time that such a flight is 
offered to the consumer, that the operating carrier is not the carrier 
whose name or designator code will appear on the ticket and shall 
identify the transporting carrier by its corporate name and any other 
name under which that service is held out to the public.
    (c) Notice in ticket confirmations. At the time of purchase, each 
selling carrier or ticket agent shall provide written disclosure of the 
actual operator of the flight to each consumer of scheduled passenger 
air transportation sold in the United States that involves a code-
sharing arrangement or long-term wet lease. For any flight segment on 
which the designator code is not that of the operating carrier the 
notice shall state ``Operated by'' followed by the corporate name of 
the transporting carrier and any other name in which that service is 
held out to the public. In the case of single-flight-number service 
involving a segment or segments on which the designator code is not 
that of the transporting carrier, the notice shall clearly identify the 
segment or segments and the operating carrier by its corporate name and 
any other name in which that service is held out to the public. The 
following form of statement will satisfy the requirement of this 
paragraph (c): Important Notice: Service between XYZ City and ABC City 
will be operated by Jane Doe Airlines d/b/a QRS Express. At the 
purchaser's request, the notice required by this part may be delivered 
in person, or by fax, electronic mail, or any other reliable method of 
transmitting written material.
    (d) In any written advertisement distributed in or mailed to or 
from the United States (including those that appear on an Internet Web 
site that is marketed to consumers in the United States) for service in 
a city-pair market that is provided under a code-sharing arrangement or 
long-term wet lease, the advertisement shall prominently disclose that 
the advertised service may involve travel on another carrier and 
clearly indicate the nature of the service in reasonably sized type and 
shall identify all potential operating carriers involved in the markets 
being advertised by corporate name and by any other name under which 
that service is held out to the public. In any radio or television 
advertisement broadcast in the United States for service in a city-pair 
market that is provided under a code-sharing or long-term wet lease, 
the advertisement shall include at least a generic disclosure 
statement, such as ``Some flights are operated by other airlines.''

PART 259--[AMENDED]

0
18. The authority citation for part 259 continues to read as follows:

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, 
and 41712.

0
19. Section 259.4 is amended by revising paragraph (f) to read as 
follows:


Sec.  259.4  Contingency Plan for Lengthy Tarmac Delays.

* * * * *
    (f) Civil penalty. A carrier's failure to comply with the 
assurances required by this section and contained in its Contingency 
Plan for Lengthy Tarmac Delays will be considered to be an unfair and 
deceptive practice within the meaning of 49 U.S.C. 41712 with respect 
to each affected passenger and therefore a separate violation for each 
passenger for each unfulfilled assurance under 49 U.S.C. 46301.
0
20. Section 259.8 is amended by revising the second sentence in 
paragraph (a) introductory text and paragraph (a)(1) to read as 
follows:


Sec.  259.8  Notify consumers of known delays, cancellations, and 
diversions.

    (a) * * * A change in the status of a flight means, at a minimum, a 
cancellation, diversion or delay of 30 minutes or more in the planned 
operation of a flight that occurs within seven calendar days of the 
scheduled date of the planned operation. * * *
    (1) With respect to any U.S. air carrier or foreign air carrier 
that permits passengers and other interested persons to subscribe to 
flight status notification services, the carrier must deliver such 
notification to such subscribers, by whatever means the carrier offers 
that the subscriber chooses. * * *

PART 399--[AMENDED]

0
21. The authority citation for part 399 is revised to read as follows:

    Authority:  49 U.S.C. 40101 et seq.

0
22. Section 399.80 is amended by:
0
a. Revising the introductory text;
0
b. Removing and reserving paragraph (h);
0
c. Revising paragraph (1);
0
d. Adding paragraphs (o), (p), (q), and (r); and
0
e. Revising paragraph (s).
    The revisions and additions read as follows:


Sec.  399.80  Unfair and deceptive practices of ticket agents.

    It is the policy of the Department to regard the practices 
enumerated in paragraphs (a) through (m) of this section by a ticket 
agent of any size and the practices enumerated in paragraphs (o) 
through (r) of this section by a ticket agent that sells air 
transportation and has annual revenue of $100 million or more as an 
unfair or deceptive practice or unfair method of competition:
* * * * *
    (l) Failing or refusing to make proper refunds promptly when 
service cannot be performed as contracted or representing that such 
refunds are obtainable only at some other point, thus depriving persons 
of the timely use of the money to arrange other transportation, or 
forcing them to suffer unnecessary inconvenience and delay or requiring 
them to accept transportation at higher cost, or under less desirable 
circumstances, or on less desirable aircraft than that represented at 
the time of sale. For purposes of this subsection ``promptly'' means 
processing a credit card refund (e.g., forwarding a credit to the 
merchant bank) within seven business days and a cash, check or debit 
card refund within 20 days. These deadlines are calculated from the 
time that the ticket agent receives all information from the consumer 
that is necessary to process the refund. The ticket agent must request 
any missing information without delay. A ticket agent's need to collect 
information from its own records does not suspend these deadlines.
* * * * *
    (o) Failure to hold a reservation at the quoted fare without 
payment or to permit it to be cancelled without penalty for at least 24 
hours after the reservation is made if the reservation is made one week 
or more prior to a flight's departure. (The ticket agent may choose 
between these two methods; it need not offer both options to 
consumers.)
    (p) Failure to disclose cancellation policies applicable to a 
consumer's selected flights, the aircraft's seating configuration, and 
lavatory availability on the aircraft on its Web site, and upon 
request, from the telephone reservations staff.
    (q) Failure to notify consumers in a timely manner of carrier-
initiated changes to the consumer's air travel itinerary about which 
the carrier notifies

[[Page 30000]]

the agent or about which the agent becomes aware through other means.
    (r) Failure to respond to consumer problems by acknowledging 
receipt of a consumer complaint within thirty days of receiving the 
complaint and sending a substantive written response within sixty days 
of receiving the complaint. If all or part of the complaint is about 
services furnished (or to be furnished) by an airline or other travel 
supplier, the agent must send the complaint to that supplier for 
response. If no part of the complaint is about the agent's service and 
the agent sends the complaint to the appropriate suppliers, the agent's 
substantive reply can consist of advising the consumer where the agent 
has sent the complaint and why.
    (s) As used in this subpart G and in 14 CFR parts 257 and 258, 
``Air carrier'', ``foreign air carrier'', and ``ticket agent'' have the 
same definitions as set forth in 49 U.S.C. 40102. The term ``person . . 
. arranging for [,] air transportation'' as set forth in the definition 
of ``ticket agent'' in section 40102(40) includes any person that acts 
as an intermediary involved in the sale of air transportation directly 
or indirectly to consumers, including by operating an electronic 
airline information system, if the person holds itself out as a source 
of information about, or reservations for, the air transportation 
industry and receives compensation in any way related to the sale of 
air transportation (e.g., cost-per-click for air transportation 
advertisements, commission payment, revenue-sharing, or other 
compensation based on factors such as the number of flight segments 
booked, number of sales made, or number of consumers directed or 
referred to an air carrier, foreign air carrier, or ticket agent for 
the sale of air transportation). The term does not include persons who 
only publish advertisements of fares and are paid only per click for 
linking consumers to the Web sites of the carriers or agents that 
provided the advertisement.
0
23. Section 399.85 is amended by revising paragraphs (a), (b), and (c) 
to read as follows:


Sec.  399.85  Notice of baggage fees and other fees.

    (a) If a U.S. or foreign air carrier has a Web site marketed to 
U.S. consumers where it advertises or sells air transportation, the 
carrier must promptly and prominently disclose any increase in its fee 
for carry-on or first and second checked bags and any change in the 
first and second checked bags or carry-on allowance for a passenger on 
the homepage of that Web site (e.g., provide a link that says ``changed 
bag rules'' or similarly descriptive language that takes the consumer 
from the homepage directly to a pop-up or a place on another Web page 
that details the change in baggage allowance or fees and the effective 
dates of such changes).
    (b) All U.S. and foreign air carriers and ticket agents must 
disclose the current ancillary services fees for a first and second 
checked bag, for a carry-on bag, and for an advance seat assignment to 
a consumer who requests such information. On Web sites marketed to the 
general public in the U.S., the fees for a first checked bag, a second 
checked bag, one carry-on bag, and an advance seat assignment must be 
disclosed (and at a minimum displayed by a link or rollover) at the 
first point in a search process where a fare is listed in response to a 
specific flight itinerary request from a passenger, and on the summary 
page provided to the consumer at the completion of any purchase.
    (c) On all e-ticket confirmations for air transportation within, to 
or from the United States, including the summary page at the completion 
of an online purchase and a post-purchase email confirmation, an air 
carrier, foreign air carrier, agent of either, or ticket agent that 
advertises or sells air transportation in the United States must 
include information regarding the passenger's free baggage allowance 
and/or the applicable fee for a carry-on bag and the first and second 
checked bag, including size and weight limitations. Carriers and agents 
must provide this information in text form in the e-ticket 
confirmation.
* * * * *
0
24. Section 399.88 is amended by revising paragraph (a) to read as 
follows:


Sec.  399.88  Prohibition on post-purchase price increases.

    (a) It is an unfair and deceptive practice within the meaning of 49 
U.S.C. 41712 for any seller of scheduled air transportation within, to 
or from the United States, or of a tour (i.e., a combination of air 
transportation and ground or cruise accommodations), or tour component 
(e.g., a hotel stay) that includes scheduled air transportation within, 
to, or from the United States, to increase the price of that air 
transportation, tour or tour component to a consumer, including but not 
limited to an increase in the price of the airfare, an increase in the 
price for the carriage of passenger baggage, or an increase in an 
applicable fuel surcharge, after the air transportation has been 
purchased by the consumer, except in the case of an increase in a 
government-imposed tax or fee. A purchase is deemed to have occurred 
when the full amount agreed upon for the air transportation has been 
paid by the consumer. An itinerary that does not begin or end in the 
United States or include a stopover of 24 hours or more in the United 
States is not considered air transportation for purposes of this 
section. This prohibition on a post-purchase price increase extends to 
all mandatory fees and charges a consumer must pay in order to obtain 
air transportation and to fees associated with transporting baggage. 
This prohibition does not extend to fees for optional services 
ancillary to air transportation that are not purchased with the ticket 
except for baggage. The price for other ancillary services not 
purchased at the time of ticket purchase may be increased until the 
consumer purchases the service itself.
* * * * *
0
25. Section 399.90 is added to subpart G to read as follows:

Option A


Sec.  399.90  Transparency in airline pricing, including ancillary fees

    (a) The purpose of this section is to ensure that air carriers, 
foreign air carriers and ticket agents doing business in the United 
States clearly disclose to consumers at all points of sale the fees for 
certain basic ancillary services associated with the air transportation 
consumers are buying or considering buying. Nothing in this section 
should be read to require that these ancillary services must be 
transactable (e.g., purchasable online).
    (b) Each air carrier and foreign air carrier shall provide useable, 
current, and accurate information for certain ancillary service fees to 
all ticket agents that receive and distribute the U.S. or foreign 
carrier's fare, schedule, and availability information. For purposes of 
this section, the fees that must be provided are: fees for a first 
checked bag, a second checked bag, one carry-on bag, and an advance 
seat assignment. Fees for an advance assignment to a seat adjacent to a 
window or aisle, bulkhead seat, exit row seat, or any other seat for 
which a consumer must pay an additional fee to receive an advance seat 
assignment are to be provided.
    (c) Each ticket agent that provides a U.S. or foreign carrier's 
fare, schedule, and availability information to consumers in the United 
States must disclose the U.S. or foreign carrier's fees for a first 
checked bag, a second checked bag, one carry-on bag, and an advance 
seat assignment. The fee information disclosed to consumers for these 
ancillary services must be expressed as itinerary-specific charges. 
``Itinerary-

[[Page 30001]]

specific'' refers to variations in fees that depend on, for example, 
geography, travel dates, cabin (e.g., first class, economy), ticketed 
fare (e.g., full fare ticket -Y class), and, in the case of advance 
seat assignment, the particular seat on the aircraft if different seats 
on that flight entail different charges. Ticket agents must also 
disclose that advance seat assignment and baggage fees may be reduced 
or waived based on the passenger's frequent flyer status, method of 
payment or other characteristic. When providing the fees associated 
with advance seat assignments, ticket agents must also disclose that 
seat availability and fees may change at any time until the seat 
assignment is purchased.
    (d) Each U.S. or foreign air carrier that provides its fare, 
schedule and availability information directly to consumers in the 
United States must also disclose its fees for a first checked bag, a 
second checked bag, one carry-on bag, and an advance seat assignment. 
The fee information disclosed to a consumer for these ancillary 
services must be expressed as customer-specific charges if the consumer 
elects to provide his or her personal information to the carrier, such 
as name and frequent flyer number. ``Customer-specific'' refers to 
variations in fees that depend on, for example, the passenger type 
(e.g., military), frequent flyer status, method of payment, geography, 
travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., 
full fare ticket -Y class), and, in the case of advance seat 
assignment, the particular seat on the aircraft if different seats on 
that flight entail different charges. If a consumer does not provide 
his or her personal information and submits an anonymous shopping 
request, the fee information disclosed to that consumer for these 
ancillary services must be expressed as itinerary-specific charges.
    (e) If a U.S. or foreign air carrier or ticket agent has a Web site 
marketed to U.S. consumers where it advertises or sells air 
transportation, the carrier and ticket agent must disclose the fees for 
a first checked bag, a second checked bag, one carry-on bag, and an 
advance seat assignment as specified in paragraphs (c) and (d) of this 
section at the first point in a search process where a fare is listed 
in connection with a specific flight itinerary. Carriers and ticket 
agents may permit a consumer to opt out of seeing this basic ancillary 
fee information so that the consumer will see only fares. The opt-out 
option must not be pre-selected and must notify the consumer that fees 
may include charges for a first and second checked bag (including 
oversize and overweight charges), a carry-on bag, and an advance seat 
assignment.
    (f) In any oral communication with a prospective consumer and in 
any telephone calls placed from the United States, the carrier or 
ticket agent must inform a consumer, upon request, of the fees for a 
first checked bag, a second checked bag, one carry-on bag, and an 
advance seat assignment as specified in paragraphs (c) and (d) of this 
section.
    (g) Ticket agents with an existing contractual agreement with an 
air carrier or foreign air carrier for the distribution of that 
carrier's fare and schedule information shall not charge separate or 
additional fees for the distribution of the ancillary service fee 
information described in paragraph (b) of this section. Nothing in this 
paragraph should be read as invalidating any provision in an existing 
contract among these parties with respect to compensation.
    (h) Failure of an air carrier or foreign carrier to provide the 
ancillary fee information as described in paragraph (b) of this section 
to its ticket agents and failure of a U.S. carrier, foreign carrier, or 
ticket agent to provide the information to consumers as described in 
paragraph (c) and (d) of this section will be considered an unfair and 
deceptive practice in violation of 49 U.S.C. 41712.

Option B


Sec.  399.90  Transparency in airline pricing, including ancillary 
fees.

    (a) The purpose of this section is to ensure that air carriers, 
foreign air carriers doing business in the United States, and ticket 
agents doing business in the United States and selling a carrier's 
tickets directly to consumers clearly disclose to consumers at all 
points of sale the fees for certain basic ancillary services associated 
with the air transportation consumers are buying or considering buying. 
Nothing in this section should be read to require that these ancillary 
services must be transactable (e.g., purchasable online).
    (b) Each air carrier and foreign air carrier shall provide useable, 
current, and accurate information for certain ancillary service fees to 
all ticket agents that receive and distribute the U.S. or foreign 
carrier's fare, schedule, and availability information, and sell that 
carrier's tickets directly to consumers. For purposes of this section, 
the fees that must be provided are: fees for a first checked bag, a 
second checked bag, one carry-on bag, and an advance seat assignment. 
Fees for an advance assignment to a seat adjacent to a window or aisle, 
bulkhead seat, exit row seat, or any other seat for which a consumer 
must pay an additional fee to receive an advance seat assignment are to 
be provided.
    (c) Each ticket agent that provides a U.S. or foreign carrier's 
fare, schedule, and availability information to consumers in the United 
States and sells that carrier's tickets directly to consumers must 
provide the U.S. or foreign carrier's fees for a first checked bag, a 
second checked bag, one carry-on bag, and an advance seat assignment. 
The fee information disclosed to consumers for these ancillary services 
must be expressed as itinerary-specific charges. ``Itinerary-specific'' 
refers to variations in fees that depend on, for example, geography, 
travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., 
full fare ticket -Y class), and, in the case of advance seat 
assignment, the particular seat on the aircraft if different seats on 
that flight entail different charges. Ticket agents that sell the 
carrier's tickets directly to consumers must also disclose that advance 
seat assignment and baggage fees may be reduced or waived based on the 
passenger's frequent flyer status, method of payment or other 
characteristic. When providing the fees associated with advance seat 
assignments, such ticket agents must also disclose that seat 
availability and fees may change at any time until the seat assignment 
is purchased.
    (d) Each U.S. or foreign air carrier that provides its fare, 
schedule and availability information directly to consumers in the 
United States must also provide its fees for a first checked bag, a 
second checked bag, one carry-on bag, and an advance seat assignment. 
The fee information disclosed to a consumer for these ancillary 
services must be expressed as customer-specific charges if the consumer 
elects to provide his or her personal information to the carrier, such 
as name and frequent flyer number. ``Customer-specific'' refers to 
variations in fees that depend on, for example, the passenger type 
(e.g., military), frequent flyer status, method of payment, geography, 
travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., 
full fare ticket -Y class), and, in the case of advance seat 
assignment, the particular seat on the aircraft if different seats on 
that flight entail different charges. If a consumer does not provide 
his or her personal information and submits an anonymous shopping 
request, the fee information disclosed to that consumer for these 
ancillary services must be expressed as itinerary-specific charges.
    (e) If a U.S. or foreign air carrier, or ticket agent that sells 
such a carrier's

[[Page 30002]]

tickets directly to consumers, has a Web site marketed to U.S. 
consumers where it advertises or sells air transportation, the carrier 
and ticket agent must disclose the fees for a first checked bag, a 
second checked bag, one carry-on bag, and an advance seat assignment as 
specified in paragraphs (c) and (d) of this section at the first point 
in a search process where a fare is listed in connection with a 
specific flight itinerary. Carriers and ticket agents may permit a 
consumer to opt out of seeing this basic ancillary fee information so 
that the consumer will see only fares. The opt-out option must not be 
pre-selected and must notify the consumer that fees may include charges 
for a first and second checked bag (including oversize and overweight 
charges), a carry-on bag, and an advance seat assignment.
    (f) In any oral communication with a prospective consumer and in 
any telephone calls placed from the United States, the carrier and 
ticket agent that sells that carrier's tickets directly to consumers 
must inform a consumer, upon request, of the fees for a first checked 
bag, a second checked bag, one carry-on bag, and an advance seat 
assignment as specified in paragraphs (c) and (d) of this section.
    (g) Ticket agents that sell a carrier's tickets directly to 
consumers and have an existing contractual agreement with an air 
carrier or foreign air carrier for the distribution of that carrier's 
fare and schedule information shall not charge separate or additional 
fees for the distribution of the ancillary service fee information 
described in paragraph (b) of this section. Nothing in this paragraph 
should be read as invalidating any provision in an existing contract 
among these parties with respect to compensation.
    (h) Failure of an air carrier or foreign carrier to provide the 
ancillary fee information as described in paragraph (b) of this section 
to its ticket agents and failure of a U.S. carrier, foreign carrier, or 
ticket agent to provide the information to consumers as described in 
paragraph (c) and (d) of this section will be considered an unfair and 
deceptive practice in violation of 49 U.S.C. 41712.

[FR Doc. 2014-11993 Filed 5-21-14; 8:45 am]
BILLING CODE 4910-9X-P