Aviation Data Modernization, 8140-8198 [05-2861]

Agencies

• Office of the Secretary
• DEPARTMENT OF TRANSPORTATION

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



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Part II





Department of Transportation





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Office of the Secretary



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14 CFR Parts 241 and 249



Aviation Data Modernization; Proposed Rule

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

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 241 and 249

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


Aviation Data Modernization

AGENCY: Office of the Secretary, Department of Transportation.

ACTION: Notice of proposed rulemaking (NPRM).

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

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

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

SUPPLEMENTARY INFORMATION:

Electronic Access

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

Public Meeting

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

Table of Contents

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

A. Authority

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

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

B. Background

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

1. Current Method of Collecting O&D Survey Data

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

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

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

3. Office of Inspector General's Report

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

4. Advanced Notice of Proposed Rulemaking

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

C. Need for Data Modernization

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

1. Background

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 8145]]

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

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

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

[[Page 8146]]

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

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

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

[[Page 8147]]

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

D. O&D Survey Data Usage

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

1. The Department

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

[[Page 8148]]

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

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

    The Federal Aviation Administration's (FAA) mandates include (1) 
regulating civil aviation to promote safety, (2) encouraging and 
developing civil aeronautics, including new aviation technology, (3) 
developing and operating a system of air traffic control and navigation 
for both civil and military aircraft, (4) researching and developing 
the National Airspace System and civil aeronautics, (5) developing and 
carrying out programs to control aircraft noise and other environmental 
effects of civil aviation, and (6) regulating U.S. commercial space 
transportation.
    The FAA also administers the Airport Improvement Program (AIP) 
(authorized by 49 U.S.C. Chapter 471), which has the broad objective of 
assisting in the development of a nationwide system of public-use 
airports adequate to meet the currently projected growth of civil 
aviation. It also provides funding for airport planning and development 
projects. In addition, medium and large airports where one or two 
Carriers control more than 50 percent of passenger boardings must 
submit a written competition plan to receive approval to impose a 
Passenger Facility Charge (PFC) or to receive a grant under the AIP. 
All aspects of qualifying, planning, allocating, and monitoring of AIP 
funds rely on the integrity of the data that the Department collects.
    The FAA uses O&D data for forecasting long-term growth in air 
travel demand and for determining corresponding needs for airport 
development and airspace system improvements. FAA also uses O&D data 
for conducting cost-benefit analyses of proposed safety rulemakings, 
infrastructure investments, and air traffic control improvements.
    Within the Department, BTS has specific statutory responsibil