[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
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Subject Proposed rule
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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.
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3. Summary of Preliminary Regulatory Analysis
[[Page 29972]]
Summary of Monetized Costs and Monetized Benefits Over 10 Years,
Discounted at 7 Percent
[Millions $]
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Provisions Costs Benefits
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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
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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.
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\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.
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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.
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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