Charter Rules for Foreign Direct Air Carriers, 5780-5787 [06-972]
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3907, and 3909; 15 U.S.C. 1681s, 1681w,
6801 and 6805.
Department of the Treasury
Office of the Comptroller of the
Currency
Appendix F to Part 225—[Amended]
12 CFR Chapter I
6. In Supplement A to Appendix F,
amend footnote 6 by removing ‘‘12 CFR
part 314’’ and adding in its place ‘‘16
CFR part 314’’.
I
Authority and Issuance
For the reasons set out in the joint
preamble, the OCC corrects part 30 of
chapter I of title 12 of the Code of
Federal Regulations by making the
following correcting amendments:
I
Federal Deposit Insurance Corporation
12 CFR Chapter III
PART 30—SAFETY AND SOUNDNESS
STANDARDS
1. The authority citation for part 30
continues to read as follows:
I
Authority: 12 U.S.C. 93a, 371, 1818, 1831p,
3102(b); 15 U.S.C. 1681s, 1681w, 6801,
6805(b)(1).
Authority and Issuance
For reasons set out in the joint
preamble, the FDIC corrects part 364 of
chapter III of title 12 of the Code of
Federal Regulations by making the
following correcting amendments:
I
PART 364—STANDARDS FOR SAFETY
AND SOUNDNESS
Appendix B to Part 30—[Amended]
2. In Supplement A to Appendix B,
amend footnote 6 by removing ‘‘12 CFR
part 314’’ and adding in its place ‘‘16
CFR part 314’’.
I
7. The authority citation for part 364
continues to read as follows:
I
Federal Reserve System
Authority: 12 U.S.C. 1819 and 1819
(Tenth); 15 U.S.C. 1681b, 1681s, and 1681w.
12 CFR Chapter II
Appendix B to Part 364—[Amended]
Authority and Issuance
8. In Supplement A to Appendix B,
amend footnote 6 by removing ‘‘12 CFR
part 314’’ and adding in its place ‘‘16
CFR part 316’’.
I
For the reasons set out in the joint
preamble, the Board corrects parts 208
and 225 of chapter II of title 12 of the
Code of Federal Regulations by making
the following correcting amendments:
I
PART 208—MEMBERSHIP OF STATE
BANKING INSTITUTIONS IN THE
FEDERAL RESERVE SYSTEM
(REGULATION H)
Department of the Treasury
Office of Thrift Supervision
12 CFR Chapter V
Authority and Issuance
For reasons set out in the joint
preamble the OTS corrects part 570 of
chapter V of title 12 of the Code of
Federal Regulations by making the
following correcting amendment to read
as follows’’
I
3. The authority citation for part 208
continues to read as follows:
I
Authority: 12 U.S.C. 24, 36, 92a, 93a,
248(a), 248(c), 321–338a, 371d, 461, 481–486,
601, 611, 1814, 1816, 1820(d)(9), 1823(j),
1828(o), 1831, 1831o, 1831p–1, 1831r–1,
1831w, 1831x, 1835a, 1882, 2901–2907,
3105, 3310, 3331–3351, and 3906–3909, 15
U.S.C. 78b, 781(b), 781(g), 781(i), 78o–4(c)(5),
78q, 78q–1, 78w, 1681s, 1681w, 6801 and
6805; 31 U.S.C. 5318, 42 U.S.C. 4012a, 4104a,
4104b, 4106, and 4128.
PART 570—SAFETY AND SOUNDNESS
GUIDELINES AND COMPLIANCE
PROCEDURES
Appendix D–2 to Part 208—[Amended]
9. The authority citation for part 570
continues to read as follows:
4. In Supplement A to Appendix D–
2, amend footnote 6 by removing ‘‘12
CFR part 314’’ and adding in its place
‘‘16 CFR part 314’’.
Authority: 12 U.S.C. 1462a, 1463, 1464,
1467a, 1828, 1831p–1, 1881–1884; 15 U.S.C.
1681s and 1681w; 15 U.S.C. 6801 and
6805(b)(1).
PART 225—BANK HOLDING
COMPANIES AND CHANGE IN BANK
CONTROL (REGULATION Y)
Appendix B to Part 570—[Amended]
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I
5. The authority citation for 12 CFR
part 225 continues to read as follows:
I
I
10. In Supplement A to Appendix B,
amend footnote 6 by removing ‘‘12 CFR
part 314’’ and adding in its place ‘‘16
CFR part 314’’.
I
Authority: 12 U.S.C. 1817(j)(13), 1818,
1828(o), 1831i, 1831p–1, 1843(c)(8), 1844(b),
1972(1), 3106, 3108, 3310, 3331–3351, 3906,
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Dated: January 24, 2006.
Julie L. Williams,
First Senior Deputy Comptroller and Chief
Counsel.
By order of the Board of Governors of the
Federal Reserve System, January 17, 2006.
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 31st day
January, 2006.
Robert E. Feldman,
Executive Secretary.
Dated: January 30, 2006.
Deborah Dakin,
Senior Deputy Chief Counsel.
[FR Doc. 06–1009 Filed 2–2–06; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 6714–10–P;
6720–01–P
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 212
[Docket No. OST–2002–11741]
RIN 2105–AD38
Charter Rules for Foreign Direct Air
Carriers
Office of the Secretary, DOT.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Department is amending
its charter regulations by adding
definitions of sixth- and seventhfreedom charters to the definitions
section of 14 CFR Part 212, and by
requiring foreign air carrier applicants
for charter authority to provide updated
reciprocity statements and operational
data relative to its homeland-U.S.
services.
The rule shall become effective
April 4, 2006.
FOR FURTHER INFORMATION CONTACT:
Brian Hedberg, Office of International
Aviation (X–40), U.S. Department of
Transportation, 400 7th Street, SW.,
Washington, DC 20590; (202) 366–7783.
SUPPLEMENTARY INFORMATION:
DATES:
Background
On January 21, 2005, the Department
of Transportation issued a Notice of
Proposed Rulemaking (NPRM) [70 FR
3158, January 21, 2005] which proposed
to (1) Clarify the definition of ‘‘fifth
freedom charter’’ by adding definitions
of ‘‘sixth- and seventh-freedom
charters’’ in § 212.2; (2) modify OST
Form 4540 (Foreign Air Carrier
Application for Statement of
Authorization) by requiring updated
reciprocity statements by foreign air
carriers seeking a statement of
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authorization under Part 212; and (3)
require foreign air carrier applicants for
a statement of authorization under Part
212 to include historical data relative to
the applicant’s U.S.-home country
operations.
The proposed definitional
amendments to Part 212 would clarify
that sixth-freedom charter means a
charter flight carrying traffic that
originates and terminates in a country
other than the country of the foreign air
carrier’s home country, provided the
flight operates via the home country of
the foreign air carrier; and that seventhfreedom charter means a charter flight
carrying traffic that originates and
terminates in a country other than the
foreign air carrier’s home country,
where the flight does not have a prior,
intermediate, or subsequent stop in the
foreign air carrier’s home country.
The proposed revision of OST Form
4540 would require that at the time of
application for fifth-freedom charter
authorization, the applicant foreign air
carrier must present certification from
its homeland government (or cite
certification previously submitted to the
Department that is dated within the
previous 90-day period), that indicates
that the carrier’s homeland grants to
U.S. carriers a privilege similar to that
requested by the applicant. The revision
would also require applicant carriers to
indicate on the application the number
of third- and fourth-freedom flights the
carrier has operated in the previous
twelve-month period.
Our issuance of the NPRM was taken
in response to a petition for rulemaking
filed by the National Air Carrier
Association (NACA) on behalf of its
member carriers. In the NPRM, after
considering comments filed by
interested parties in response to NACA’s
petition, the Department proposed to
make some, but not all, of the changes
sought by NACA. In its comments
concerning the NPRM, NACA stated
that ‘‘We are grateful to the Department
for the grant of NACA’s petition. While
the Department clarifies that it is not
granting all of the changes requested in
NACA’s petition, the changes satisfy
several of the more important concerns
that NACA expressed in its petition.’’ 1
We address each of our proposed
regulatory changes, in turn, below.
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Proposed Modification to the
Definitions in 14 CFR 212.2
Summary of Comments
Most of the commenters supported,
did not object to, or were silent on our
proposed definitional changes. Only
1 NACA
comments of March 22, 2005, at 1.
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two comments to the NPRM explicitly
opposed the changes. The supporters
said that the new definitions would
serve to better delineate between
different types of services, fifth-, sixthand seventh-freedom, in both the
scheduled and charter areas. NACA and
AFL–CIO Transportation Trades
Department (AFL–CIO TTD), although
supporting the proposed new
definitions for sixth- and seventhfreedom charters, would have us go
further by having us define fifthfreedom charter so that it no longer
encompasses flights that do not have
any stops in the foreign air carrier’s
homeland. The opponents, First Choice
Airways and GWV Travel (GWV), assert
that the new definitions go beyond the
officially recognized ICAO ‘‘freedoms of
the air,’’ are not required, and could
cause confusion, including in the case
of bilateral agreements that rely on the
existing meaning of fifth-freedom.
DOT Decision on 14 CFR 212.2
We will finalize the changes to 14
CFR 212.2, as proposed. We find that
the new definitions are an accurate
reflection of the meaning of the terms
presented, and should serve to better
delineate the different forms of service
involved without causing confusion. We
further find that this action is consistent
with Section 820 of the Vision 100—
Century of Aviation Reauthorization
Act, which conveyed the sense of
Congress that the Department should
formally define fifth-, sixth-, and
seventh-freedom consistently for both
scheduled and charter passenger traffic.
We do not find that the commenters
have presented persuasive arguments
that our new definitions will generate
confusion. In this regard, we find the
general lack of opposition on the part of
most commenters—many of whom will
be using or be affected by the new
definitions—to be significant. We will
not, however, further amend this section
to make changes to the definition of
fifth-freedom charters as NACA and
AFL–CIO TTD have suggested. While
both commenters noted a degree of
overlap in the definitions, we saw
nothing in the comments received from
other interested parties to indicate that
they anticipated problems in applying
or complying with the new definitions
as proposed. In our NPRM we stated
that we were proposing to amend our
charter definitions because ‘‘even a
limited degree of confusion is best
avoided.’’ 70 FR 3158, 3163. We
believed that specifically delineating the
meaning of sixth- and seventh-freedom
charters while not altering the longestablished and widely-recognized
definition of fifth-freedom charters was
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the best means to minimize confusion.
Taking into account all the comments
filed in response to our NPRM, we are
persuaded to finalize our definitions as
proposed. We are confident that the
definitional changes that we are making
should be adequate to address our
public interest objectives in this
rulemaking proceeding.
Proposed Modifications to OST Form
4540
Evidence of Reciprocity
Summary of Comments
NACA, Airports Council
International—North America (ACI–
NA), AFL–CIO TTD, one U.S. indirect
carrier (Apple Companies), and one U.S.
direct air carrier (Amerijet) filed
comments generally supporting our
proposed change on evidence of
reciprocity. They believe that the
Department’s existing practice requires
a finding of reciprocity and that the
proposed revision only serves to
formalize that existing practice. AFL–
CIO TTD states that the requirement
will provide a key decisional element to
the record at the time of application.
ACI–NA specifies that it does not
object to the Department’s requirement
of a reciprocity statement so long as it
is not burdensome to carriers. First
Choice Airways, for its part, states that
while it is not opposed to an initial
reciprocity certification, once a
determination of reciprocity is made it
should remain valid until challenged.
While NACA supports our proposed
change, it nevertheless suggests that our
proposed 90-day recertification
requirement be extended to require
recertification every six months.
Air Transportation Association of
America (ATA), one U.S. carrier (Atlas),
three U.S. indirect carriers (GWV,
Vacation Express, and TNT Vacations),
and seven foreign direct carriers
(Antonov Design Bureau (Antonov), Air
Atlanta Icelandic, Condor Flugdienst
(Condor), Grupo TACA, Skyservice
Airlines, and Thomas Cook UK) filed
comments in opposition. ATA suggests
that no reciprocity statement be
required unless a U.S. carrier lodges a
challenge.
ATA, Atlas, and some foreign direct
air carriers expressed their preference
for maintaining the current system in
which reciprocity is determined by the
Department and aided by U.S. carrier
objections on the record (when they feel
that reciprocity is lacking) because they
are aware of no problems that have
arisen in relation to fifth-freedom
charter operations. Some U.S. indirect
carriers comment that instituting an
official reciprocity requirement might
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lead foreign governments to impose like
requirements on U.S. carriers, thus
redounding to the detriment of
liberalized U.S. aviation policies. Some
U.S. indirect carriers and foreign direct
carriers state that a reciprocity
certification requirement could become
burdensome and in some cases even be
unobtainable, especially given the shortnotice nature of many fifth-freedom
charter applications, thus chilling
business, preventing market entry, and
limiting competitive choices.
Many foreign direct carriers believe
that the reciprocity verification
requirement does not serve any useful
purpose and is inconsistent with the
Department’s open-skies policy. Grupo
TACA asserts that obtaining such
certification is unnecessary given the
small numbers of charters conducted by
foreign carriers relative to the volume of
charters provided by U.S. carriers in
foreign markets. Yet others suggest that
it will be difficult to obtain such a
statement from foreign officials,
especially in markets where the U.S.
presence is minimal. Another feels that
the Department has provided
insufficient guidance as to what type of
certification is necessary. One foreign
direct carrier suggested that it be
permitted to cite the certification
provided by a foreign government to
another carrier for these purposes.
DOT Decision on Evidence of
Reciprocity
We will finalize our requirement that
applicants provide certification of
reciprocity. Our NPRM states
unequivocally that ‘‘reciprocity on the
part of the applicant’s home country is
the primary criterion for approval of the
type of charter requests involved here.’’
70 FR 3158, 3162. In this, the NPRM
was simply repeating longstanding
Department policy and practice. Clearly,
in evaluating the primary criterion for
reaching a decision, the public interest
calls for our having access to
meaningful, reliable evidence.
Given the short-notice nature of many
of the requests for these types of
services, we have found that we simply
could not be assured that potentially
interested parties, or we ourselves,
might have the wherewithal in the
limited time available to verify that an
applicant’s assertion of reciprocity was
justified in the specific circumstances
presented. While input from aggrieved
U.S. carriers or our own knowledge of
a particular bilateral relationship can, of
course, be informative—indeed in some
instances fully dispositive, cases may
well arise where the best available
source of information on reciprocity
will be the applicant itself.
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While we have every confidence that
the applicants provide information on
Form 4540 to the best of their ability
and knowledge and in good faith, the
fact remains that the presence or lack of
reciprocity is a matter resting within the
control not of the applicant itself, but of
its government. The applicant is at best
a ‘‘second-hand’’ provider of such
information. Our proposed rule
provides a means for ensuring that the
first-hand source for information on this
essential element of our decisional
process exist in the record to speak for
itself.
We are confident that in situations
where reciprocity truly is not an issue,
concerned governments will be able to
work with their carriers to ensure that
a streamlined process exists for getting
the necessary statements to us in a way
that should cause little if any additional
burden or delay. Indeed, the nature of
the exercise, by introducing into the
record more probative evidence on this
central issue, could serve to expedite
the decisional process.
Saying this, we have reflected on
whether we need to see the reciprocity
affirmations ‘‘refreshed’’ every 90 days.
We believe that the commenters
provided adequate evidence to persuade
us to extend the length of validity of a
reciprocity certification from 90 days to
six months. We have concluded that
changing to a six-month period should
still provide sufficiently current
information for the purposes presented,
while addressing the concerns of some
of the commenters who asserted that our
90-day requirement was exceedingly
burdensome. Of course, as we stated in
the NPRM, if intervening events give
reason to doubt the continuing validity
of a particular verification, we will
expect applicants to seek a new
verification, even if their subsequent
request is submitted within six months
of a previous verification.
Reporting of Third- and Fourth-Freedom
Statistics
Summary of Comments
NACA, ACI–NA, one U.S. direct
carrier (Amerijet), and one U.S. indirect
carrier (Apple Companies) submitted
comments generally supporting our
proposed change. These commenters
acknowledge that carriers currently
provide information to the Department
regarding third- and fourth-freedom
operations in the form of T–100 data,
but note that the data are not readily
accessible due to the delay in T–100
data availability. NACA asserts that
access to timely data can help carriers
and the Department in evaluating
applications for fifth-, sixth-, and
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seventh-freedom charter operations and
can speed the approval process.
ACI–NA specifies that it has no
problem with the proposed reporting
requirement so long as it does not prove
burdensome to carriers. Antonov states
that it ‘‘does not object in principle to
providing this information.’’ It is
concerned, however, that considering
the unique nature of outsized cargo
services, information regarding thirdand fourth-freedom charter flight
information may provide an inadequate
record for the Department to make a
public interest determination regarding
a carrier’s ‘‘undue reliance’’ on fifth-,
sixth-, or seventh-freedom operations.
ATA, three U.S. indirect carriers
(GWV, Vacation Express, and TNT
Vacations), and three foreign direct
carriers (Air Atlanta Icelandic, Grupo
TACA and Skyservice Airlines)
submitted comments in opposition.
They believe that the data we are
requesting are already collected by the
Department in the form of T–100 data,
and thus our amendment to Form 4540
is unnecessary and redundant. They
comment that the reporting requirement
imposes expense and delay on carriers
without providing any added benefit.
Vacation Express and TNT Vacations
also suggest that the reporting
requirement could have a chilling effect,
discouraging carriers from applying and
then likely limiting the services
available to the public. Grupo TACA
asserts that the additional reporting
required by this revision to Form 4540
is unnecessary, considering the relative
dominance of U.S. charters operating in
the U.S.-Central American market, and
given that nearly all its members are
domiciled in open-skies countries.
DOT Decision on Reporting of Thirdand Fourth-Freedom Operations
In our NPRM, we specifically said
that, in addition to reciprocity, the
Department ‘‘also examines other factors
that may be relevant in specific cases
(for example, the extent of the
applicant’s reliance on fifth-freedom
operations in relation to its third- and
fourth-freedom services).’’ 70 FR 3158,
3162. In this regard, we proposed to
amend OST Form 4540 so that
applicants would specify the number of
third- and fourth-freedom flights they
have provided over the preceding
calendar year. We expressly called upon
applicants to present the information
with sufficient clarity ‘‘for any
commenting parties and the Department
to readily evaluate the proposed
services against the historical data.’’ Id.,
at 3163.
As our NPRM indicated, the issue of
excessive reliance on fifth-, sixth- and
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`
seventh-freedom operations vis-a-vis
third- and fourth-freedom operations
remains an element of our public
interest analysis for applications of this
type. As such, interested parties are
entitled to have information that would
enable them to offer meaningful
comments on the record in this issue,
and we ourselves would want to have
data that permit us to give this issue
appropriate consideration in our
decisional process.
We find that the reporting
requirement we proposed should
achieve those objectives. While we
recognize, as some of the commenters
point out, that T–100 data might cover
some of the same terrain, they are no
substitute. The T–100 program was
never designed to provide a readily
accessible data base for undue reliance
evaluations in the context of the often
short-notice, quick turnaround filings
that characterize our charter approval
process. It is entirely reasonable to
expect that the data we are requesting
should be in the applicant’s possession
and that the applicant should be in a
position readily to provide it. Given the
role that such data might play in our
public interest determination, and the
absence of equivalent alternatives in the
circumstances presented, on balance,
we conclude that whatever burden may
be entailed by this new requirement is
clearly outweighed by the public
benefits produced. We are not
persuaded that this result will engender
any form of chilling effect. The data at
issue are data that carriers are already
required to collect and transmit to us.
Furthermore, our standards (including
our standards as to undue reliance) are
not changing; nor is the way in which
we intend to apply these standards. Our
amendment is essentially an
administrative measure designed to
promote an enhanced record and more
efficient decision-making.
Other Issues
In addition to commenting on the
specific aspects of our proposed rule,
several commenters also offered other
comments, either questioning aspects of
our overall approach or requesting that
we go even further in our proposed
remedies.
For example, Antonov objected to the
Form 4540 changes applying to cargo
charters as well as passenger charters.
Antonov asserts that there are
significant commercial and aeropolitical
differences between cargo and passenger
flights and that ‘‘it would harm U.S. and
foreign carrier interests alike if the
freely functioning global cargo charter
market were suddenly subject to more
burdensome and more restrictive new
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administrative flight requirements by
the United States.* * * 2
We have decided not to create a
different Form 4540 regime for cargo
charters. As we said above, the materials
we are seeking are either within the
possession of the applicant foreign
carrier or are materials that they should
be able to arrange readily for the
homeland governments to provide.
Therefore, we are unpersuaded that our
changes will create an unworkable or
unfair burden. We emphasize that we
are not changing our applicable
decisional standards or the nature of the
findings we would need to make to
support those decisions. Our changes go
entirely to ensuring that those findings
rest on a firmer evidentiary foundation.
We regard this as entirely consistent
with the public interest.
NACA and Atlas would have us
modify the rule to require significantly
more detailed evidence from the foreign
carrier applicant describing the cargo to
be carried, bulk versus outsized. They
are concerned that we are approving
flights because of their asserted outsized
cargo, when in fact the outsized cargo
may actually represent only a portion of
the actual cargo carried. Furthermore,
Atlas states that given the typical shortnotice nature of many fifth-freedom
cargo charter requests, interested parties
cannot file meaningful, timely responses
unless that application includes more
detailed information about the cargo to
be carried.
Antonov opposes this proposed
change. It states that such a change
would mean that applications could
only be filed at the very last minute
when packing lists were finalized and
that even then numerous changes could
still occur because shippers and
charterers generally operate on the
understanding that they are contracting
for the entire aircraft and use this
flexibility to make packing list changes
right up to the time of departure.
Antonov states that a cargo-specific
approval requirement accordingly
would be burdensome: Cumbersome for
applicants, U.S. cargo carriers (who
would need to be polled regarding the
changes), and the Department. Antonov
also comments that it would greatly
impede the flow of commerce and cause
costly delays to time-sensitive
shipments.
We will not adopt the modification
proposed by NACA and Atlas. Unlike
our other proposed changes, which we
see as involving materials readily
available or obtainable in ways that we
are not persuaded would interfere with
our existing regulatory approach, we are
2 Antonov
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unconvinced that the proposed NACA
and Atlas change could be achieved
without introducing the type of
regulatory burden and delay we would
wish to avoid.
We reach a similar result with regard
to the comments of Amerijet. Amerijet
raises a procedural due process issue
over the awarding of seventh-freedom
cargo rights through bilateral
negotiations and also raises policy
questions relating to our approach on
awarding fifth-, sixth-, and seventhfreedom charters. We regard these issues
as well beyond the scope of the
specifically focused regulatory
procedural measures we announced in
our NPRM—which Amerijet expressly
‘‘welcomes and supports.’’ 3
Consequently, we will not pursue them
here.
An additional comment beyond the
scope of our contemplated changes is
the ACI–NA recommendation that we
consider amending our rules to cite the
value of a proposed international
charter to U.S. airports and their local
economies as one of the public interest
factors to be considered when we
receive foreign carrier charter
applications. We note this as essentially
a suggestion offered for our future
consideration.
Finally, we note that commenters,
such as TACA, wondered whether some
of our proposed changes should even
apply to them given prevailing openskies regimes, and perhaps, also,
bilateral seventh-freedom charter rights.
We are certainly not seeking by this rule
to impose filing requirements when
none would be necessary from a public
interest standpoint. Parties who believe
there are clearly delineated bilateral
rights, and that, therefore, they should
not need to seek prior approval at all for
certain charter operations are free to
make appropriate requests for waivers
or for adjustments to their underlying
operating authority.
Regulatory Analyses and Notices
Executive Order 12866 (Regulatory
Planning and Review) and DOT
Regulatory Policies and Procedures
Executive Order 12866, Regulatory
Planning and Review, directs the
Department to assess both the costs and
the benefits of a regulatory change. We
are not allowed to propose or adopt a
regulation unless we make a reasoned
determination that the benefits of the
intended regulation justify the costs.
This rule is a significant regulation
under Executive Order 12866 and DOT’s
Regulatory Policies and procedures
3 Amerijet
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because of public interest. The NPRM
was reviewed by the Office of
Management and Budget under
Executive Order 12866. Our assessment
of this rulemaking indicates that its
economic impact is minimal because
the rule will impose only minimal
incremental new costs on applicant
carriers, and codifies, in part, existing
practice. The rule clarifies, by
definition, the types of charters being
conducted; requires that applicant
foreign carriers cite certification from
the carrier’s homeland government
stating that it affords reciprocity to U.S.
fifth-freedom charters; and, requires that
foreign air carriers accurately represent
the number of third- and fourth-freedom
flights conducted in the previous
twelve-month period.
The definitional changes will not
affect the manner in which foreign air
carriers conduct business; nor will it
affect our decision-making process.
Reciprocity is a public interest criterion
already considered in evaluating fifth-,
sixth- and seventh-freedom charter
applications. The required certification
will be required only once every six
months. The data regarding third- and
fourth-freedom flights we now require
should be in the applicant’s possession
and the applicant should be in a
position readily to provide it at the time
of application.
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Executive Order 13132 (Federalism
Assessment)
The Department has analyzed this
rulemaking action in accordance with
the principles and criteria set forth in
Executive Order 13132 and has
determined that it does not have
sufficient federalism implications to
warrant consultation with State and
local officials. The Department
anticipates that any action taken will
not preempt a State law or State
regulation or affect the States’ ability to
discharge traditional State government
functions.
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 impact on
a substantial number of small entities.
Because this rule does not subject U.S.
carriers to new procedures or reporting
requirements, the Department certifies
that this rule will not have a significant
economic impact on a substantial
number of U.S. small businesses.
The Department notes, however, that
this rule imposes a minimal additional
paperwork burden on foreign air
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carriers, that may or may not maintain
offices in the U.S., because they must
report data regarding the number of
third- and fourth-freedom flights
provided in the most recent twelvemonth period. Although the affected
carriers must record this information for
other reporting requirements on a
monthly basis, the significant time delay
in collecting, analyzing, and publicly
issuing these data significantly reduces
the value of the data for purposes of
evaluating fifth-freedom charter
applications. With minimal burden, the
affected carriers can provide a record of
the number of flights provided within
the last twelve-month period by adding
the numbers reported to the Department
for each of the previous twelve months,
and recording the sum on application
OST Form 4540, thus providing all
interested parties with current, detailed
information vital to proper evaluation of
applications. Furthermore, this
reporting requirement will have no net
effect on the way in which foreign air
carriers conduct business or on the
manner in which the Department
evaluates the merits of fifth-freedom
charter applications.
Regulation Identifier (RIN)
A regulation identifier (RIN) is
assigned to each regulatory action listed
in the Unified Agenda of Federal
Regulations. The Regulatory Information
Service Center publishes the Unified
Agenda in April and October of each
year. The RIN contained in the heading
of this document can be used to crossreference this action with the Unified
Agenda.
Unfunded Mandates Reform Act
The changes proposed would not
impose any unfunded mandates for the
purpose of the Unfunded Mandates
Reform Act of 1995.
Paperwork Reduction Act
Under the Paperwork Reduction Act
of 1995, 44 U.S.C. 3501–3520, Federal
agencies must obtain approval from the
Office of Management and Budget
(OMB) for each collection of
information they conduct, sponsor, or
require through regulations. This rule
contains information collection
requirements. As required by the
Paperwork Reduction Act, the
Department will submit this
requirement to the Office of Information
and Regulatory Affairs of the OMB for
review, and reinstatement, with change,
of a previously approved collection.
OST Form 4540 is a required
Application for Statement of
Authorization for foreign air carriers to
file with the Department prior to
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engaging in certain charter operations to
and from the United States. The
Department grants or denies the
authorization to the foreign air carrier.
Foreign air carriers file this form as
often as necessary whenever they wish
to perform charter flights for which
prior Department approval is required
by Part 212. This form is required for all
foreign air carriers seeking Department
authority to conduct certain types of
charter flights, and does not require a
significant amount of time to complete,
and is not burdensome to complete.
OMB Number: 2106–0035.
Title: 14 CFR Part 212—Charter Rules
for U.S. and Foreign Direct Air Carriers.
Burden hours: 1000.
Affected public: Business or other forprofit.
Cost: $400,000.00.
Description of Paperwork: The
proposed changes to the rulemaking and
the form are intended to improve the
Department’s ability to assess the merits
of applications filed under Part 212, and
will ensure that the Department has the
most current information on the state of
reciprocity for each foreign carrier
applicant for charter authority filed
under Part 212. These proposed changes
will also enhance the Department’s
decision-making process without
imposing an undue burden on
applicants or affecting the public
benefits that the Department’s rules now
provide. The collection of historical
data relative to the applicant’s U.S.home country operations will allow the
Department to satisfy any concerns it
might have as to the applicant’s reliance
on fifth-, sixth- and seventh-freedom
operations.
List of Subjects in 14 CFR Part 212
Air carriers, air transportation, charter
flights, reporting and recordkeeping
requirements.
I For the reasons set forth in the
preamble, the Department amends Part
212 as follows:
PART 212—CHARTER RULES FOR
U.S. AND FOREIGN DIRECT AIR
CARRIERS
1. The authority citation for 14 CFR
part 212 continues to read as follows:
I
Authority: 49 U.S.C. 40101, 40102, 40109,
40113, 41101, 41103, 41504, 41702, 41708,
41712, 46101.
2. Amend § 212.2 by adding, in
alphabetical order among the existing
definitions, a definition of ‘‘Seventh
freedom charter’’ and a definition of
‘‘Sixth freedom charter.’’
I
§ 212.2
*
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Definitions.
*
*
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*
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Seventh-freedom charter means a
charter flight carrying traffic that
originates and terminates in a country
other than the foreign air carrier’s home
country, where the flight does not have
a prior, intermediate, or subsequent stop
in the foreign air carrier’s home country.
*
*
*
*
*
Sixth-freedom charter means a charter
flight carrying traffic that originates and
terminates in a country other than the
country of the foreign air carrier’s home
country, provided the flight operates via
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5785
the home country of the foreign air
carrier.
*
*
*
*
*
I 3. In § 212.9, revise paragraph (b) (1)
to read as follows:
Issued this 27th day of January, 2006 in
Washington, DC.
Michael W. Reynolds,
Acting Assistant Secretary for Aviation and
International Affairs.
§ 212.9
The following OST Form 4540 will
not appear in the Code of Federal
Regulations.
Prior authorization requirements.
*
*
*
*
*
(b) * * *
(1) Fifth-, sixth- and/or seventhfreedom charter flights to or from the
United States;
*
*
*
*
*
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[FR Doc. 06–972 Filed 2–2–06; 8:45 am]
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Federal Register / Vol. 71, No. 23 / Friday, February 3, 2006 / Rules and Regulations
]]>Agencies
[Federal Register Volume 71, Number 23 (Friday, February 3, 2006)]
[Rules and Regulations]
[Pages 5780-5787]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-972]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 212
[Docket No. OST-2002-11741]
RIN 2105-AD38
Charter Rules for Foreign Direct Air Carriers
AGENCY: Office of the Secretary, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department is amending its charter regulations by adding
definitions of sixth- and seventh-freedom charters to the definitions
section of 14 CFR Part 212, and by requiring foreign air carrier
applicants for charter authority to provide updated reciprocity
statements and operational data relative to its homeland-U.S. services.
DATES: The rule shall become effective April 4, 2006.
FOR FURTHER INFORMATION CONTACT: Brian Hedberg, Office of International
Aviation (X-40), U.S. Department of Transportation, 400 7th Street,
SW., Washington, DC 20590; (202) 366-7783.
SUPPLEMENTARY INFORMATION:
Background
On January 21, 2005, the Department of Transportation issued a
Notice of Proposed Rulemaking (NPRM) [70 FR 3158, January 21, 2005]
which proposed to (1) Clarify the definition of ``fifth freedom
charter'' by adding definitions of ``sixth- and seventh-freedom
charters'' in Sec. 212.2; (2) modify OST Form 4540 (Foreign Air
Carrier Application for Statement of Authorization) by requiring
updated reciprocity statements by foreign air carriers seeking a
statement of
[[Page 5781]]
authorization under Part 212; and (3) require foreign air carrier
applicants for a statement of authorization under Part 212 to include
historical data relative to the applicant's U.S.-home country
operations.
The proposed definitional amendments to Part 212 would clarify that
sixth-freedom charter means a charter flight carrying traffic that
originates and terminates in a country other than the country of the
foreign air carrier's home country, provided the flight operates via
the home country of the foreign air carrier; and that seventh-freedom
charter means a charter flight carrying traffic that originates and
terminates in a country other than the foreign air carrier's home
country, where the flight does not have a prior, intermediate, or
subsequent stop in the foreign air carrier's home country.
The proposed revision of OST Form 4540 would require that at the
time of application for fifth-freedom charter authorization, the
applicant foreign air carrier must present certification from its
homeland government (or cite certification previously submitted to the
Department that is dated within the previous 90-day period), that
indicates that the carrier's homeland grants to U.S. carriers a
privilege similar to that requested by the applicant. The revision
would also require applicant carriers to indicate on the application
the number of third- and fourth-freedom flights the carrier has
operated in the previous twelve-month period.
Our issuance of the NPRM was taken in response to a petition for
rulemaking filed by the National Air Carrier Association (NACA) on
behalf of its member carriers. In the NPRM, after considering comments
filed by interested parties in response to NACA's petition, the
Department proposed to make some, but not all, of the changes sought by
NACA. In its comments concerning the NPRM, NACA stated that ``We are
grateful to the Department for the grant of NACA's petition. While the
Department clarifies that it is not granting all of the changes
requested in NACA's petition, the changes satisfy several of the more
important concerns that NACA expressed in its petition.'' \1\
---------------------------------------------------------------------------
\1\ NACA comments of March 22, 2005, at 1.
---------------------------------------------------------------------------
We address each of our proposed regulatory changes, in turn, below.
Proposed Modification to the Definitions in 14 CFR 212.2
Summary of Comments
Most of the commenters supported, did not object to, or were silent
on our proposed definitional changes. Only two comments to the NPRM
explicitly opposed the changes. The supporters said that the new
definitions would serve to better delineate between different types of
services, fifth-, sixth- and seventh-freedom, in both the scheduled and
charter areas. NACA and AFL-CIO Transportation Trades Department (AFL-
CIO TTD), although supporting the proposed new definitions for sixth-
and seventh-freedom charters, would have us go further by having us
define fifth-freedom charter so that it no longer encompasses flights
that do not have any stops in the foreign air carrier's homeland. The
opponents, First Choice Airways and GWV Travel (GWV), assert that the
new definitions go beyond the officially recognized ICAO ``freedoms of
the air,'' are not required, and could cause confusion, including in
the case of bilateral agreements that rely on the existing meaning of
fifth-freedom.
DOT Decision on 14 CFR 212.2
We will finalize the changes to 14 CFR 212.2, as proposed. We find
that the new definitions are an accurate reflection of the meaning of
the terms presented, and should serve to better delineate the different
forms of service involved without causing confusion. We further find
that this action is consistent with Section 820 of the Vision 100--
Century of Aviation Reauthorization Act, which conveyed the sense of
Congress that the Department should formally define fifth-, sixth-, and
seventh-freedom consistently for both scheduled and charter passenger
traffic. We do not find that the commenters have presented persuasive
arguments that our new definitions will generate confusion. In this
regard, we find the general lack of opposition on the part of most
commenters--many of whom will be using or be affected by the new
definitions--to be significant. We will not, however, further amend
this section to make changes to the definition of fifth-freedom
charters as NACA and AFL-CIO TTD have suggested. While both commenters
noted a degree of overlap in the definitions, we saw nothing in the
comments received from other interested parties to indicate that they
anticipated problems in applying or complying with the new definitions
as proposed. In our NPRM we stated that we were proposing to amend our
charter definitions because ``even a limited degree of confusion is
best avoided.'' 70 FR 3158, 3163. We believed that specifically
delineating the meaning of sixth- and seventh-freedom charters while
not altering the long-established and widely-recognized definition of
fifth-freedom charters was the best means to minimize confusion. Taking
into account all the comments filed in response to our NPRM, we are
persuaded to finalize our definitions as proposed. We are confident
that the definitional changes that we are making should be adequate to
address our public interest objectives in this rulemaking proceeding.
Proposed Modifications to OST Form 4540
Evidence of Reciprocity
Summary of Comments
NACA, Airports Council International--North America (ACI-NA), AFL-
CIO TTD, one U.S. indirect carrier (Apple Companies), and one U.S.
direct air carrier (Amerijet) filed comments generally supporting our
proposed change on evidence of reciprocity. They believe that the
Department's existing practice requires a finding of reciprocity and
that the proposed revision only serves to formalize that existing
practice. AFL-CIO TTD states that the requirement will provide a key
decisional element to the record at the time of application.
ACI-NA specifies that it does not object to the Department's
requirement of a reciprocity statement so long as it is not burdensome
to carriers. First Choice Airways, for its part, states that while it
is not opposed to an initial reciprocity certification, once a
determination of reciprocity is made it should remain valid until
challenged. While NACA supports our proposed change, it nevertheless
suggests that our proposed 90-day recertification requirement be
extended to require recertification every six months.
Air Transportation Association of America (ATA), one U.S. carrier
(Atlas), three U.S. indirect carriers (GWV, Vacation Express, and TNT
Vacations), and seven foreign direct carriers (Antonov Design Bureau
(Antonov), Air Atlanta Icelandic, Condor Flugdienst (Condor), Grupo
TACA, Skyservice Airlines, and Thomas Cook UK) filed comments in
opposition. ATA suggests that no reciprocity statement be required
unless a U.S. carrier lodges a challenge.
ATA, Atlas, and some foreign direct air carriers expressed their
preference for maintaining the current system in which reciprocity is
determined by the Department and aided by U.S. carrier objections on
the record (when they feel that reciprocity is lacking) because they
are aware of no problems that have arisen in relation to fifth-freedom
charter operations. Some U.S. indirect carriers comment that
instituting an official reciprocity requirement might
[[Page 5782]]
lead foreign governments to impose like requirements on U.S. carriers,
thus redounding to the detriment of liberalized U.S. aviation policies.
Some U.S. indirect carriers and foreign direct carriers state that a
reciprocity certification requirement could become burdensome and in
some cases even be unobtainable, especially given the short-notice
nature of many fifth-freedom charter applications, thus chilling
business, preventing market entry, and limiting competitive choices.
Many foreign direct carriers believe that the reciprocity
verification requirement does not serve any useful purpose and is
inconsistent with the Department's open-skies policy. Grupo TACA
asserts that obtaining such certification is unnecessary given the
small numbers of charters conducted by foreign carriers relative to the
volume of charters provided by U.S. carriers in foreign markets. Yet
others suggest that it will be difficult to obtain such a statement
from foreign officials, especially in markets where the U.S. presence
is minimal. Another feels that the Department has provided insufficient
guidance as to what type of certification is necessary. One foreign
direct carrier suggested that it be permitted to cite the certification
provided by a foreign government to another carrier for these purposes.
DOT Decision on Evidence of Reciprocity
We will finalize our requirement that applicants provide
certification of reciprocity. Our NPRM states unequivocally that
``reciprocity on the part of the applicant's home country is the
primary criterion for approval of the type of charter requests involved
here.'' 70 FR 3158, 3162. In this, the NPRM was simply repeating
longstanding Department policy and practice. Clearly, in evaluating the
primary criterion for reaching a decision, the public interest calls
for our having access to meaningful, reliable evidence.
Given the short-notice nature of many of the requests for these
types of services, we have found that we simply could not be assured
that potentially interested parties, or we ourselves, might have the
wherewithal in the limited time available to verify that an applicant's
assertion of reciprocity was justified in the specific circumstances
presented. While input from aggrieved U.S. carriers or our own
knowledge of a particular bilateral relationship can, of course, be
informative--indeed in some instances fully dispositive, cases may well
arise where the best available source of information on reciprocity
will be the applicant itself.
While we have every confidence that the applicants provide
information on Form 4540 to the best of their ability and knowledge and
in good faith, the fact remains that the presence or lack of
reciprocity is a matter resting within the control not of the applicant
itself, but of its government. The applicant is at best a ``second-
hand'' provider of such information. Our proposed rule provides a means
for ensuring that the first-hand source for information on this
essential element of our decisional process exist in the record to
speak for itself.
We are confident that in situations where reciprocity truly is not
an issue, concerned governments will be able to work with their
carriers to ensure that a streamlined process exists for getting the
necessary statements to us in a way that should cause little if any
additional burden or delay. Indeed, the nature of the exercise, by
introducing into the record more probative evidence on this central
issue, could serve to expedite the decisional process.
Saying this, we have reflected on whether we need to see the
reciprocity affirmations ``refreshed'' every 90 days. We believe that
the commenters provided adequate evidence to persuade us to extend the
length of validity of a reciprocity certification from 90 days to six
months. We have concluded that changing to a six-month period should
still provide sufficiently current information for the purposes
presented, while addressing the concerns of some of the commenters who
asserted that our 90-day requirement was exceedingly burdensome. Of
course, as we stated in the NPRM, if intervening events give reason to
doubt the continuing validity of a particular verification, we will
expect applicants to seek a new verification, even if their subsequent
request is submitted within six months of a previous verification.
Reporting of Third- and Fourth-Freedom Statistics
Summary of Comments
NACA, ACI-NA, one U.S. direct carrier (Amerijet), and one U.S.
indirect carrier (Apple Companies) submitted comments generally
supporting our proposed change. These commenters acknowledge that
carriers currently provide information to the Department regarding
third- and fourth-freedom operations in the form of T-100 data, but
note that the data are not readily accessible due to the delay in T-100
data availability. NACA asserts that access to timely data can help
carriers and the Department in evaluating applications for fifth-,
sixth-, and seventh-freedom charter operations and can speed the
approval process.
ACI-NA specifies that it has no problem with the proposed reporting
requirement so long as it does not prove burdensome to carriers.
Antonov states that it ``does not object in principle to providing this
information.'' It is concerned, however, that considering the unique
nature of outsized cargo services, information regarding third- and
fourth-freedom charter flight information may provide an inadequate
record for the Department to make a public interest determination
regarding a carrier's ``undue reliance'' on fifth-, sixth-, or seventh-
freedom operations.
ATA, three U.S. indirect carriers (GWV, Vacation Express, and TNT
Vacations), and three foreign direct carriers (Air Atlanta Icelandic,
Grupo TACA and Skyservice Airlines) submitted comments in opposition.
They believe that the data we are requesting are already collected by
the Department in the form of T-100 data, and thus our amendment to
Form 4540 is unnecessary and redundant. They comment that the reporting
requirement imposes expense and delay on carriers without providing any
added benefit. Vacation Express and TNT Vacations also suggest that the
reporting requirement could have a chilling effect, discouraging
carriers from applying and then likely limiting the services available
to the public. Grupo TACA asserts that the additional reporting
required by this revision to Form 4540 is unnecessary, considering the
relative dominance of U.S. charters operating in the U.S.-Central
American market, and given that nearly all its members are domiciled in
open-skies countries.
DOT Decision on Reporting of Third- and Fourth-Freedom Operations
In our NPRM, we specifically said that, in addition to reciprocity,
the Department ``also examines other factors that may be relevant in
specific cases (for example, the extent of the applicant's reliance on
fifth-freedom operations in relation to its third- and fourth-freedom
services).'' 70 FR 3158, 3162. In this regard, we proposed to amend OST
Form 4540 so that applicants would specify the number of third- and
fourth-freedom flights they have provided over the preceding calendar
year. We expressly called upon applicants to present the information
with sufficient clarity ``for any commenting parties and the Department
to readily evaluate the proposed services against the historical
data.'' Id., at 3163.
As our NPRM indicated, the issue of excessive reliance on fifth-,
sixth- and
[[Page 5783]]
seventh-freedom operations vis-[agrave]-vis third- and fourth-freedom
operations remains an element of our public interest analysis for
applications of this type. As such, interested parties are entitled to
have information that would enable them to offer meaningful comments on
the record in this issue, and we ourselves would want to have data that
permit us to give this issue appropriate consideration in our
decisional process.
We find that the reporting requirement we proposed should achieve
those objectives. While we recognize, as some of the commenters point
out, that T-100 data might cover some of the same terrain, they are no
substitute. The T-100 program was never designed to provide a readily
accessible data base for undue reliance evaluations in the context of
the often short-notice, quick turnaround filings that characterize our
charter approval process. It is entirely reasonable to expect that the
data we are requesting should be in the applicant's possession and that
the applicant should be in a position readily to provide it. Given the
role that such data might play in our public interest determination,
and the absence of equivalent alternatives in the circumstances
presented, on balance, we conclude that whatever burden may be entailed
by this new requirement is clearly outweighed by the public benefits
produced. We are not persuaded that this result will engender any form
of chilling effect. The data at issue are data that carriers are
already required to collect and transmit to us. Furthermore, our
standards (including our standards as to undue reliance) are not
changing; nor is the way in which we intend to apply these standards.
Our amendment is essentially an administrative measure designed to
promote an enhanced record and more efficient decision-making.
Other Issues
In addition to commenting on the specific aspects of our proposed
rule, several commenters also offered other comments, either
questioning aspects of our overall approach or requesting that we go
even further in our proposed remedies.
For example, Antonov objected to the Form 4540 changes applying to
cargo charters as well as passenger charters. Antonov asserts that
there are significant commercial and aeropolitical differences between
cargo and passenger flights and that ``it would harm U.S. and foreign
carrier interests alike if the freely functioning global cargo charter
market were suddenly subject to more burdensome and more restrictive
new administrative flight requirements by the United States.* * * \2\
---------------------------------------------------------------------------
\2\ Antonov comments of March 22, 2005, at 5.
---------------------------------------------------------------------------
We have decided not to create a different Form 4540 regime for
cargo charters. As we said above, the materials we are seeking are
either within the possession of the applicant foreign carrier or are
materials that they should be able to arrange readily for the homeland
governments to provide. Therefore, we are unpersuaded that our changes
will create an unworkable or unfair burden. We emphasize that we are
not changing our applicable decisional standards or the nature of the
findings we would need to make to support those decisions. Our changes
go entirely to ensuring that those findings rest on a firmer
evidentiary foundation. We regard this as entirely consistent with the
public interest.
NACA and Atlas would have us modify the rule to require
significantly more detailed evidence from the foreign carrier applicant
describing the cargo to be carried, bulk versus outsized. They are
concerned that we are approving flights because of their asserted
outsized cargo, when in fact the outsized cargo may actually represent
only a portion of the actual cargo carried. Furthermore, Atlas states
that given the typical short-notice nature of many fifth-freedom cargo
charter requests, interested parties cannot file meaningful, timely
responses unless that application includes more detailed information
about the cargo to be carried.
Antonov opposes this proposed change. It states that such a change
would mean that applications could only be filed at the very last
minute when packing lists were finalized and that even then numerous
changes could still occur because shippers and charterers generally
operate on the understanding that they are contracting for the entire
aircraft and use this flexibility to make packing list changes right up
to the time of departure. Antonov states that a cargo-specific approval
requirement accordingly would be burdensome: Cumbersome for applicants,
U.S. cargo carriers (who would need to be polled regarding the
changes), and the Department. Antonov also comments that it would
greatly impede the flow of commerce and cause costly delays to time-
sensitive shipments.
We will not adopt the modification proposed by NACA and Atlas.
Unlike our other proposed changes, which we see as involving materials
readily available or obtainable in ways that we are not persuaded would
interfere with our existing regulatory approach, we are unconvinced
that the proposed NACA and Atlas change could be achieved without
introducing the type of regulatory burden and delay we would wish to
avoid.
We reach a similar result with regard to the comments of Amerijet.
Amerijet raises a procedural due process issue over the awarding of
seventh-freedom cargo rights through bilateral negotiations and also
raises policy questions relating to our approach on awarding fifth-,
sixth-, and seventh-freedom charters. We regard these issues as well
beyond the scope of the specifically focused regulatory procedural
measures we announced in our NPRM--which Amerijet expressly ``welcomes
and supports.'' \3\ Consequently, we will not pursue them here.
---------------------------------------------------------------------------
\3\ Amerijet comments of March 22, 2005, at 5.
---------------------------------------------------------------------------
An additional comment beyond the scope of our contemplated changes
is the ACI-NA recommendation that we consider amending our rules to
cite the value of a proposed international charter to U.S. airports and
their local economies as one of the public interest factors to be
considered when we receive foreign carrier charter applications. We
note this as essentially a suggestion offered for our future
consideration.
Finally, we note that commenters, such as TACA, wondered whether
some of our proposed changes should even apply to them given prevailing
open-skies regimes, and perhaps, also, bilateral seventh-freedom
charter rights. We are certainly not seeking by this rule to impose
filing requirements when none would be necessary from a public interest
standpoint. Parties who believe there are clearly delineated bilateral
rights, and that, therefore, they should not need to seek prior
approval at all for certain charter operations are free to make
appropriate requests for waivers or for adjustments to their underlying
operating authority.
Regulatory Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
Executive Order 12866, Regulatory Planning and Review, directs the
Department to assess both the costs and the benefits of a regulatory
change. We are not allowed to propose or adopt a regulation unless we
make a reasoned determination that the benefits of the intended
regulation justify the costs.
This rule is a significant regulation under Executive Order 12866
and DOT's Regulatory Policies and procedures
[[Page 5784]]
because of public interest. The NPRM was reviewed by the Office of
Management and Budget under Executive Order 12866. Our assessment of
this rulemaking indicates that its economic impact is minimal because
the rule will impose only minimal incremental new costs on applicant
carriers, and codifies, in part, existing practice. The rule clarifies,
by definition, the types of charters being conducted; requires that
applicant foreign carriers cite certification from the carrier's
homeland government stating that it affords reciprocity to U.S. fifth-
freedom charters; and, requires that foreign air carriers accurately
represent the number of third- and fourth-freedom flights conducted in
the previous twelve-month period.
The definitional changes will not affect the manner in which
foreign air carriers conduct business; nor will it affect our decision-
making process. Reciprocity is a public interest criterion already
considered in evaluating fifth-, sixth- and seventh-freedom charter
applications. The required certification will be required only once
every six months. The data regarding third- and fourth-freedom flights
we now require should be in the applicant's possession and the
applicant should be in a position readily to provide it at the time of
application.
Executive Order 13132 (Federalism Assessment)
The Department has analyzed this rulemaking action in accordance
with the principles and criteria set forth in Executive Order 13132 and
has determined that it does not have sufficient federalism implications
to warrant consultation with State and local officials. The Department
anticipates that any action taken will not preempt a State law or State
regulation or affect the States' ability to discharge traditional State
government functions.
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 impact on a substantial number of small entities. Because
this rule does not subject U.S. carriers to new procedures or reporting
requirements, the Department certifies that this rule will not have a
significant economic impact on a substantial number of U.S. small
businesses.
The Department notes, however, that this rule imposes a minimal
additional paperwork burden on foreign air carriers, that may or may
not maintain offices in the U.S., because they must report data
regarding the number of third- and fourth-freedom flights provided in
the most recent twelve-month period. Although the affected carriers
must record this information for other reporting requirements on a
monthly basis, the significant time delay in collecting, analyzing, and
publicly issuing these data significantly reduces the value of the data
for purposes of evaluating fifth-freedom charter applications. With
minimal burden, the affected carriers can provide a record of the
number of flights provided within the last twelve-month period by
adding the numbers reported to the Department for each of the previous
twelve months, and recording the sum on application OST Form 4540, thus
providing all interested parties with current, detailed information
vital to proper evaluation of applications. Furthermore, this reporting
requirement will have no net effect on the way in which foreign air
carriers conduct business or on the manner in which the Department
evaluates the merits of fifth-freedom charter applications.
Regulation Identifier (RIN)
A regulation identifier (RIN) is assigned to each regulatory action
listed in the Unified Agenda of Federal Regulations. The Regulatory
Information Service Center publishes the Unified Agenda in April and
October of each year. The RIN contained in the heading of this document
can be used to cross-reference this action with the Unified Agenda.
Unfunded Mandates Reform Act
The changes proposed would not impose any unfunded mandates for the
purpose of the Unfunded Mandates Reform Act of 1995.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520,
Federal agencies must obtain approval from the Office of Management and
Budget (OMB) for each collection of information they conduct, sponsor,
or require through regulations. This rule contains information
collection requirements. As required by the Paperwork Reduction Act,
the Department will submit this requirement to the Office of
Information and Regulatory Affairs of the OMB for review, and
reinstatement, with change, of a previously approved collection.
OST Form 4540 is a required Application for Statement of
Authorization for foreign air carriers to file with the Department
prior to engaging in certain charter operations to and from the United
States. The Department grants or denies the authorization to the
foreign air carrier. Foreign air carriers file this form as often as
necessary whenever they wish to perform charter flights for which prior
Department approval is required by Part 212. This form is required for
all foreign air carriers seeking Department authority to conduct
certain types of charter flights, and does not require a significant
amount of time to complete, and is not burdensome to complete.
OMB Number: 2106-0035.
Title: 14 CFR Part 212--Charter Rules for U.S. and Foreign Direct
Air Carriers.
Burden hours: 1000.
Affected public: Business or other for-profit.
Cost: $400,000.00.
Description of Paperwork: The proposed changes to the rulemaking
and the form are intended to improve the Department's ability to assess
the merits of applications filed under Part 212, and will ensure that
the Department has the most current information on the state of
reciprocity for each foreign carrier applicant for charter authority
filed under Part 212. These proposed changes will also enhance the
Department's decision-making process without imposing an undue burden
on applicants or affecting the public benefits that the Department's
rules now provide. The collection of historical data relative to the
applicant's U.S.-home country operations will allow the Department to
satisfy any concerns it might have as to the applicant's reliance on
fifth-, sixth- and seventh-freedom operations.
List of Subjects in 14 CFR Part 212
Air carriers, air transportation, charter flights, reporting and
recordkeeping requirements.
0
For the reasons set forth in the preamble, the Department amends Part
212 as follows:
PART 212--CHARTER RULES FOR U.S. AND FOREIGN DIRECT AIR CARRIERS
0
1. The authority citation for 14 CFR part 212 continues to read as
follows:
Authority: 49 U.S.C. 40101, 40102, 40109, 40113, 41101, 41103,
41504, 41702, 41708, 41712, 46101.
0
2. Amend Sec. 212.2 by adding, in alphabetical order among the
existing definitions, a definition of ``Seventh freedom charter'' and a
definition of ``Sixth freedom charter.''
Sec. 212.2 Definitions.
* * * * *
[[Page 5785]]
Seventh-freedom charter means a charter flight carrying traffic
that originates and terminates in a country other than the foreign air
carrier's home country, where the flight does not have a prior,
intermediate, or subsequent stop in the foreign air carrier's home
country.
* * * * *
Sixth-freedom charter means a charter flight carrying traffic that
originates and terminates in a country other than the country of the
foreign air carrier's home country, provided the flight operates via
the home country of the foreign air carrier.
* * * * *
0
3. In Sec. 212.9, revise paragraph (b) (1) to read as follows:
Sec. 212.9 Prior authorization requirements.
* * * * *
(b) * * *
(1) Fifth-, sixth- and/or seventh-freedom charter flights to or
from the United States;
* * * * *
Issued this 27th day of January, 2006 in Washington, DC.
Michael W. Reynolds,
Acting Assistant Secretary for Aviation and International Affairs.
The following OST Form 4540 will not appear in the Code of Federal
Regulations.
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[GRAPHIC] [TIFF OMITTED] TR03FE06.056
[FR Doc. 06-972 Filed 2-2-06; 8:45 am]
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