Canadian Charter Air Taxi Operators, 49344-49347 [E6-13664]

Download as PDF 49344 Federal Register / Vol. 71, No. 163 / Wednesday, August 23, 2006 / Rules and Regulations 0901 UTC, November 23, 2006. The Director of the Federal Register approves this incorporation by reference action under 14 CFR 71.1, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL–538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513–7587; telephone number (907) 271–5898; fax: (907) 271–2850; e-mail: gary.ctr.rolf@faa.gov. Internet address: https://www.alaska.faa.gov/at. SUPPLEMENTARY INFORMATION: EFFECTIVE DATE: History On Monday, June 19, 2006, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) to revise Class E airspace upward from 700 ft. and 1,200 ft. above the surface at Barter Island, AK (71 FR 35225). The action was proposed in order to create Class E airspace sufficient in size to contain aircraft while executing two new and one amended SIAP for the Barter Island Airport. The new approaches are (1) Area Navigation (Global Positioning System) (RNAV (GPS)) RWY 07, Original; and (2) RNAV (GPS) RWY 25, Original. The amended approach is the Non Directional Beacon (NDB) RWY 07, Amendment 1. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Barter Island area is revised by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9N, Airspace Designations and Reporting Points, dated September 1, 2005, and effective September 15, 2005, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order. sroberts on PROD1PC70 with RULES The Rule This amendment to 14 CFR part 71 revises Class E airspace at the Barter Island Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing two new SIAPs and VerDate Aug<31>2005 15:49 Aug 22, 2006 Jkt 208001 one amended SIAP, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for Instrument Flight Rule (IFR) operations at Barter Island Airport, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a ‘‘significant regulatory action’’ under Executive Order 12866; (2) is not a ‘‘significant rule’’ under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA’s authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency’s authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the Barter Island Airport and represents the FAA’s continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: I PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: I PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9N, Airspace Designations and Reporting Points, dated September 1, 2005, and effective September 15, 2005, is amended as follows: * * * * * I Paragraph 6005 Class E airspace extending upward from 700 feet or more above the surface of the earth. * * * * * AAL AK E5 Barter Island, AK [Revised] Barter Island Airport, AK (Lat. 70°08′02″ N., long. 143°34′55″ W.) That airspace extending upward from 700 feet above the surface within a 4.7-mile radius of the Barter Island Edward Burnell Sr. Memorial Airport; and that airspace extending upward from 1,200 feet above the surface within a 83-mile radius of the Barter Island Airport, excluding that airspace east of 141° West Longitude. * * * * * Issued in Anchorage, AK, on August 14, 2006. Derril D. Bergt, Acting Director, Alaska Flight Service Information Office. [FR Doc. E6–13803 Filed 8–22–06; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF TRANSPORTATION Office of the Secretary 14 CFR Part 294 [OST Docket No. 2006–25691] RIN 2105–AD58 Canadian Charter Air Taxi Operators Department of Transportation (DOT); Office of the Secretary (OST). ACTION: Final rule. AGENCY: SUMMARY: DOT is updating its rule concerning Canadian charter air taxis to make the rule consistent with the 1995 U.S.-Canada bilateral aviation agreement. When promulgated in 1981, the rule comported with the 1974 U.S.Canada bilateral aviation agreement governing non-scheduled air services. However, the rule has not been updated to reflect the more liberal 1995 bilateral. Consequently, the rule, in its current form, contains certain restrictions on Canadian charter air taxis that are contrary to the 1995 bilateral. This final rule eliminates or amends those provisions. It also makes several other E:\FR\FM\23AUR1.SGM 23AUR1 Federal Register / Vol. 71, No. 163 / Wednesday, August 23, 2006 / Rules and Regulations technical changes to the rule and adds a provision making it clear that Canadian charter air taxis are exempt from the statutory requirement of foreign air carriers to file family assistance plans. DATES: Effective Date: This rule is effective on September 22, 2006. FOR FURTHER INFORMATION CONTACT: Jonathan Dols, Supervisory Trial Attorney, Office of the Assistant General Counsel for Aviation Enforcement and Proceedings, Office of the General Counsel, U.S. Department of Transportation, 400 7th Street, SW., Room 4116, Washington, DC 20590; (202) 366–9342 (Voice) or (202) 366– 7152 (Fax). SUPPLEMENTARY INFORMATION: Background sroberts on PROD1PC70 with RULES Part 294 of the Department’s aviation economic regulations (14 CFR part 294) exempts foreign air carriers that have registered with the Department as ‘‘Canadian charter air taxis’’ from various provisions in Title 49 of the United States Code, including the requirement in sections 41301 and 41302 to obtain a foreign air carrier permit before engaging in foreign air transportation. In 1981, when the Civil Aeronautics Board 1 (CAB) promulgated part 294, it intended to provide Canadian charter air taxis with a simplified and expedited economic licensing process. Central to the CAB’s reasoning in establishing this special licensing status for Canadian charter air taxis was its opinion that ‘‘we [the United States] have good aviation relations with our Canadian neighbors’’—a description that is even more apt today.2 On February 24, 1995, the United States and Canada greatly liberalized their commercial aviation relationship by signing the Air Transport Agreement Between the Government of the United States of America and the Government of Canada (hereinafter the ‘‘Agreement’’ or the ‘‘1995 Bilateral’’). Among other things, the Agreement granted American and Canadian air carriers, including Canadian charter air taxis, rights to conduct a wide array of operations not permitted under the countries’ previous bilateral agreement governing nonscheduled air services, which had been in force since 1974 (hereinafter the 1 The Department assumed the CAB’s jurisdiction over aviation economic matters when the CAB ‘‘sunsetted’’ on December 31, 1984. Civil Aeronautics Board Sunset Act of 1984, Public Law 98–443, October 4, 1984, and Airline Deregulation Act of 1978, Public Law 95–504, October 24, 1978. 2 Proposed Rule to Classify and Exempt Canadian Air Taxi Operators, 45 FR 80117, December 3, 1980. VerDate Aug<31>2005 15:49 Aug 22, 2006 Jkt 208001 ‘‘1974 Bilateral’’).3 On November 10, 2005, Delegations from the United States and Canada initialed an ad referendum protocol to the Agreement that would further expand the traffic rights of the air carriers of both nations (hereinafter the ‘‘Protocol’’).4 In 1981, at the time part 294 was promulgated, it comported with the 1974 Bilateral. However, part 294 has not been updated since then to reflect the more liberal aviation relationship between the U.S. and Canada that is set forth in the 1995 Bilateral. Consequently, although intended to facilitate the trans-border operations of Canadian charter air taxis, part 294 has ironically become, in some respects, an impediment to them. For example, the plain language of the following provisions of part 294 contradicts either the spirit or the language of the Agreement or the language as proposed by the Protocol: (1) Sections 294.81(b) and (b)(1) permit stopovers at points within the United States only on round-trip flights originating in Canada. The Agreement permits stopovers on one-way and round-trip flights originating in either country.5 Section 294.81(b)(2) requires that the same aircraft stay with its passengers throughout their journey. The Agreement contains no such restriction. (2) Section 294.82 prohibits registrants from transporting persons or property whose journey includes a prior, intervening, or subsequent movement by air to or from a point not in the United States or Canada. However, the Agreement allows the transportation of persons and property by airlines designated by each party to carry international charter traffic of passengers and cargo between any point or points in the territory of the other party and any point or points in a third country or countries, provided such traffic is carried via the territory of the party that has designated the airline and makes a stopover in that territory for at least two consecutive nights.6 Moreover, the Protocol would further expand third-country traffic rights by removing the two-night stopover requirement, 3 Non-Scheduled Air Service Agreement Between the Government of the United States of America and the Government of Canada, signed at Ottawa on May 8, 1974; entered into force May 8, 1974, with exchange of notes. 4 Protocol to the Air Transport Agreement Between the Governments of the United States of America and the Government of Canada, initialed ad referendum at Washington on November 10, 2005. The Protocol has not yet been signed by the two Governments. By its terms, it will not come into effect before September 1, 2006. 5 Annex III of the Agreement. 6 Id. PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 49345 and, instead, merely require that the flight in question make a traffic stop in the airline’s homeland.7 Accordingly, we are removing section 294.82, as described below, in order to make clear that the third-country traffic rights applicable to Canadian charter air taxis are coextensive with the rights of all Canadian airlines under the Agreement, or, when the Protocol becomes effective, the new rights under that Protocol. (3) Section 294.88 prohibits certain trans-border operations to or from points west of Blind River, Ontario, and east of the Ontario-Manitoba provincial line (the ‘‘Northwest Ontario restriction’’). The Agreement grants traffic rights to the carriers of both nations between any points or points in the United States and any point or points in Canada.8 The CAB included the Northwest Ontario restriction in part 294 because the Canadian Air Transport Committee had imposed a similar restriction on the operations of U.S. air taxis.9 We are aware of no such restriction today on U.S. air taxis and, therefore, see no basis for the Northwest Ontario restriction to remain in part 294. (4) Section 294.89 imposes an uplift ratio. The Agreement explicitly prohibits uplift ratios.10 These differences between part 294 and the Agreement have created confusion in the aviation industry and imposed unnecessary costs on Canadian charter air taxis.11 Moreover, they undermine the original intent of part 294, which was to expedite the licensing process for Canadian charter air taxis. Under present circumstances, there is a strong incentive for Canadian charter air taxis to eschew the ‘‘expedited’’ registration process of part 294 in favor of undertaking to meet the very requirements from which the CAB sought to relieve them, i.e., from having to obtain a foreign air carrier permit. In recognition of these issues, and because, as a general matter, the Department seeks to remove unnecessary regulatory burdens and to advance the United States-Canada air transport relationship, 7 Annex III of the Agreement, as proposed to be amended by Article 7 of the Protocol initialed at Washington, November 10, 2005. 8 Annex III. 9 Order 78–11–87, In the Matter of Charter Authority of Canadian Foreign Air Carriers, (CAB Docket 34051) (November 16, 1978). 10 Article 4 of the Agreement. 11 The Department has anecdotal evidence of Canadian charter air taxi operators turning down business otherwise permitted under the Agreement for fear of violating part 294. Some carriers have incurred the added legal costs of applying to the Department for exemptions from certain of the contradictory provisions in part 294 as a means of avoiding possible enforcement action for violating those provisions. E:\FR\FM\23AUR1.SGM 23AUR1 sroberts on PROD1PC70 with RULES 49346 Federal Register / Vol. 71, No. 163 / Wednesday, August 23, 2006 / Rules and Regulations the Department amends 14 CFR 294.81 and removes 14 CFR 294.82; 294.88; and 294.89. In addition, the Foreign Air Carrier Family Support Act of 1997 (Pub. L. 105–148) (hereinafter ‘‘FACFSA’’), added to Title 49 of the United States Code section 41313, ‘‘Plans to address needs of families of passengers involved in foreign air carrier accidents.’’ Section 41313 requires all foreign air carriers with authority to operate to or from the United States to develop and submit plans to the Department and the National Transportation Safety Board (NTSB) that address the needs of families of passengers involved in certain aircraft accidents. In 1998, the Department interpreted section 41313 as not applying to small aircraft operations and issued an order that exempted all foreign air carriers holding Departmental authority to conduct foreign air transportation using only small aircraft from the requirements of section 41313.12 Although this order was served on those Canadian charter air taxis that, at the time, were registered with the Department, the exemption was, through an administrative oversight, not subsequently codified in 14 CFR part 294. Therefore, the Department takes this opportunity to amend 14 CFR 294.10 (Exemption authority) to codify this order and, thereby, make it clear that Canadian charter air taxis are not required to submit family assistance plans to the Department or the NTSB. As a final matter, the Department hereby makes the following additional, non-substantive administrative changes to part 294: (1) Amend section 294.2(a) to reflect the current U.S.-Canada bilateral aviation agreement signed in 1995. (2) Amend sections 294.20, 294.20(b), 294.21(b), 294.22, and 294.40 to reflect the change in organizational structure that occurred when the Special Authorities Division, which is the Departmental program office that administers part 294, was transferred from the Office of Aviation Analysis to the Office of International Aviation. (3) Amend sections 294.3(e), 294.21(g), 294.50(d) to clarify that air carrier authority granted by the Government of Canada is a condition of receiving and maintaining an effective registration under part 294. (4) Amend sections 294.21(e)(1) to make clear that the onus rests on the carrier, not the Department, to provide 12 Order 98–1–31, In the Matter of the Foreign Air Carrier Family Support Act of 1997 Exemption Under 49 U.S.C. § 40109, (DOT Docket 98–3304) (January 29, 1998). VerDate Aug<31>2005 15:49 Aug 22, 2006 Jkt 208001 the Federal Aviation Administration with a copy of the carrier’s approved OST Form 4505. (5) Amend sections 294.22 to make clear that a refiling may be made using electronic mail, as well as by other means, so long as it is received by the Department within 30 days of a change in a carrier’s name or operations. (6) Amend sections 294.32 to identify the correct section in 14 CFR part 212 that covers the bonding and escrow requirements applicable to foreign air carriers. Regulatory Analysis and Notices The Administrative Procedure Act (APA) (5 U.S.C. 553) generally requires public notice and an opportunity for public comment before issuance of a final rule. It, however, provides an exception when an agency finds that there is good cause for dispensing with such procedures because they are impracticable, unnecessary, or contrary to the public interest. We have determined that, under 5 U.S.C. 553(b)(3)(B), it is unnecessary and contrary to the public interest to utilize the notice of proposed rulemaking and public comment procedures for this rule because it is a corrective action required to make the regulation consistent with an international agreement. The Department notes that, as a temporary measure, it has in the past granted carrier-specific exemptions obviating any problems for the recipient that would have been caused by the discrepancies between part 294 and the Agreement.13 In addition, the rule codifies an existing Departmental order exempting Canadian charter air taxis from the statutory requirement of foreign air carriers to file family assistance plans. Thus, in effect, the revised regulations merely codify current Departmental practice. All other changes are purely administrative in nature. Executive Order 12866 (Regulatory Planning and Review) and DOT Regulatory Policies and Procedures The Department has determined that the amendments to 14 CFR part 294 in the final rule are not a significant regulatory action under Executive Order 12866 or under the Department’s Regulatory Policies and Procedures. It has not been reviewed by the Office of Management and Budget. The amendments will impose no additional costs on the affected carriers. Rather, they will minimally reduce regulatory 13 See, e.g., Notice of Action Taken, London Air Services Limited, Exemption from 49 U.S.C. § 41301 (DOT Docket 2003–15123) (August 22, 2003). PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 compliance costs by eliminating any need for Canadian charter air taxis to apply for an exemption to the outdated provisions of 14 CFR part 294 that are not in consonance with the Agreement. Because these amendments will have minimal economic impact on the covered carriers, no further regulatory evaluation is necessary. Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an agency to assess the impact of regulation on small entities unless the agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities. The Department certifies that this final rule will not have a significant economic impact on a substantial number of small entities. The amendments to 14 CFR part 294 will not change U.S. law regarding the transborder operations of Canadian charter air taxis or the rights available to Canadian charter air taxis under the 1995 U.S.-Canada bilateral aviation agreement, nor will they add any regulatory requirements. Executive Order 13132 (Federalism) This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132. The Department has determined that this proposal will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, and therefore has no federalism implications. Executive Order 13084 This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (‘‘Consultation and Coordination with Indian Tribal Governments’’). Because this final rule will not significantly or uniquely affect the Indian tribal communities, and will not impose substantial direct compliance costs, the funding and consultation requirements of the Executive Order do not apply. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (the Act), enacted as Public Law 104–4 on March 22, 1995, requires each Federal agency, to the extent permitted by law, to prepare a written assessment of the effects of any Federal mandate in a proposed or final agency rule that may result in the expenditure by State, local, and tribal E:\FR\FM\23AUR1.SGM 23AUR1 Federal Register / Vol. 71, No. 163 / Wednesday, August 23, 2006 / Rules and Regulations governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule does not contain any Federal mandate that would result in such expenditures. Therefore, the requirements of Title II of the Act do not apply. Paperwork Reduction Act This final rule does not contain information collection requirements that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. 2507 et seq.). List of Subjects in 14 CFR Part 294 Air taxis, Canada, Charter flights, Reporting and recordkeeping requirements. I For the reasons set forth in the preamble, the DOT amends 14 CFR part 294 as follows: I 1.–2. The authority for 14 CFR part 294 continues to read as follows: Authority: 49 U.S.C. Chapters 401 and 417. 3. Revise paragraph (a) of § 294.2 to read as follows: I § 294.2 Definitions. * * * * * (a) Agreement means the Air Transport Agreement Between the Government of the United States and the Government of Canada, signed at Ottawa, February 24, 1995, with Annexes and any amendments, supplements, reservations, or supersessions to it. * * * * * I 4. Revise paragraph (e) of § 294.3 to read as follows: * * * * * (e) Has effective authority from the Government of Canada to conduct charter air service between the United States and Canada. * * * * * I 5. Add paragraph (d) to § 294.10 so that it reads as follows: § 294.10 Exemption authority. * * * * * (d) Section 41313 (aviation disaster family assistance plans for foreign air carriers) sroberts on PROD1PC70 with RULES § 294.20 [Amended] 6. Amend § 294.20 introductory text and paragraph (b) by removing the words ‘‘Office of Aviation Analysis’’ and adding in their place the words ‘‘Office of International Aviation.’’ I VerDate Aug<31>2005 15:49 Aug 22, 2006 Jkt 208001 I 7. In § 294.21, revise paragraph (b), paragraph (e)(1), and paragraph (g) to read as follows: foreign air carriers as set forth in § 212.8 of this chapter. * * * * * § 294.21 Procedure on receipt of registration form. § 294.40 * * * * * (b) Any person objecting to the registration of a Canadian charter air taxi operator shall file an objection with the Office of International Aviation, Special Authorities Division, and serve a copy on the applicant within 28 days after the Department receives the properly completed registration application. Objections shall include any facts and arguments upon which they are based. * * * * * (e) * * * (1) Issue the registration by stamping its effective date on OST Form 4505 and sending a copy of it to the carrier. * * * * * (g) A registration shall not be issued until the Department receives evidence that the applicant has effective authority issued by the Government of Canada. The applicant must provide copies of its Air Carrier Operating certificate and non-scheduled international license issued by the Government of Canada. * * * * * I 8. In § 294.22, revise the introductory text and paragraph (a)(1) to read as follows: § 294.22 Notification to the Department of change in operations or identifying information. § 294.3 General requirements for Canadian charter air taxi operators. 49347 Registrants shall refile a copy of OST Form 4505 with the Department’s Office of International Aviation, Special Authorities Division, upon any of the following events. The refiling shall be sent by electronic mail, or other means, so as to be received by the Department not later than 30 days after the reported event has occurred. (a) * * * (1) A registration ceases to be in effect unless the Government of Canada amends the registrant’s Air Carrier Operating Certificate to reflect the registrant’s new name within 60 days of the name change and the registrant submits to the Department a copy of its amended Canadian authority. * * * * * I 9. Revise paragraph (a) of § 294.32 to read as follows: § 294.32 Security arrangements for operating Public Charters. * * * * * (a) The Canadian charter air taxi operator shall meet the bonding or escrow requirements applicable to PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 [Amended] 10. Remove the words ‘‘Office of Aviation Analysis’’ in § 294.40 and add in their place the words ‘‘Office of International Aviation.’’ I 11. Revise paragraph (d) of § 294.50 to read as follows: I § 294.50 Cancellation, revocation, or suspension of registration. * * * * * (d) The Government of Canada terminates or suspends authority it granted to the registrant to conduct charter air service between the United States and Canada. * * * * * I 12. Revise paragraph (a) of § 294.60 to read as follows: § 294.60 Applications for authorization to conduct individual operations or programs not otherwise permitted by this part. (a) Where the terms, conditions, or limitations of this part, particularly § 294.81, require prior approval of individual flights or charter programs, the registrant shall apply for such approval by filing three copies of OST Form 4540 with the Office of International Aviation, Foreign Air Carrier Licensing Division. OST Form 4540 may be obtained from the Foreign Air Carrier Licensing Division. * * * * * § 294.81 [Amended] 13. Amend § 294.81 by revising paragraph (b) to read as follows: I § 294.81 Local traffic prohibited. * * * * * (b) A registrant may grant stopover privileges at any point or points in the United States to passengers and their accompanied baggage as part of a single continuous operation to or from Canada. § 294.82 I § 294.88 I [Remove] 15. Remove section 294.88. § 294.89 I [Remove] 14. Remove section 294.82. [Remove] 16. Remove section 294.89. Issued this 14th day of August, 2006, at Washington, DC, under authority delegated in 49 CFR 1.56a. Susan McDermott, Deputy Assistant Secretary of Transportation for Aviation and International Affairs. [FR Doc. E6–13664 Filed 8–22–06; 8:45 am] BILLING CODE 4910–62–P E:\FR\FM\23AUR1.SGM 23AUR1

Agencies

[Federal Register Volume 71, Number 163 (Wednesday, August 23, 2006)]
[Rules and Regulations]
[Pages 49344-49347]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-13664]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 294

[OST Docket No. 2006-25691]
RIN 2105-AD58


Canadian Charter Air Taxi Operators

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

ACTION: Final rule.

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SUMMARY: DOT is updating its rule concerning Canadian charter air taxis 
to make the rule consistent with the 1995 U.S.-Canada bilateral 
aviation agreement. When promulgated in 1981, the rule comported with 
the 1974 U.S.-Canada bilateral aviation agreement governing non-
scheduled air services. However, the rule has not been updated to 
reflect the more liberal 1995 bilateral. Consequently, the rule, in its 
current form, contains certain restrictions on Canadian charter air 
taxis that are contrary to the 1995 bilateral. This final rule 
eliminates or amends those provisions. It also makes several other

[[Page 49345]]

technical changes to the rule and adds a provision making it clear that 
Canadian charter air taxis are exempt from the statutory requirement of 
foreign air carriers to file family assistance plans.

DATES: Effective Date: This rule is effective on September 22, 2006.

FOR FURTHER INFORMATION CONTACT: Jonathan Dols, Supervisory Trial 
Attorney, Office of the Assistant General Counsel for Aviation 
Enforcement and Proceedings, Office of the General Counsel, U.S. 
Department of Transportation, 400 7th Street, SW., Room 4116, 
Washington, DC 20590; (202) 366-9342 (Voice) or (202) 366-7152 (Fax).

SUPPLEMENTARY INFORMATION: 

Background

    Part 294 of the Department's aviation economic regulations (14 CFR 
part 294) exempts foreign air carriers that have registered with the 
Department as ``Canadian charter air taxis'' from various provisions in 
Title 49 of the United States Code, including the requirement in 
sections 41301 and 41302 to obtain a foreign air carrier permit before 
engaging in foreign air transportation. In 1981, when the Civil 
Aeronautics Board \1\ (CAB) promulgated part 294, it intended to 
provide Canadian charter air taxis with a simplified and expedited 
economic licensing process. Central to the CAB's reasoning in 
establishing this special licensing status for Canadian charter air 
taxis was its opinion that ``we [the United States] have good aviation 
relations with our Canadian neighbors''--a description that is even 
more apt today.\2\
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    \1\ The Department assumed the CAB's jurisdiction over aviation 
economic matters when the CAB ``sunsetted'' on December 31, 1984. 
Civil Aeronautics Board Sunset Act of 1984, Public Law 98-443, 
October 4, 1984, and Airline Deregulation Act of 1978, Public Law 
95-504, October 24, 1978.
    \2\ Proposed Rule to Classify and Exempt Canadian Air Taxi 
Operators, 45 FR 80117, December 3, 1980.
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    On February 24, 1995, the United States and Canada greatly 
liberalized their commercial aviation relationship by signing the Air 
Transport Agreement Between the Government of the United States of 
America and the Government of Canada (hereinafter the ``Agreement'' or 
the ``1995 Bilateral''). Among other things, the Agreement granted 
American and Canadian air carriers, including Canadian charter air 
taxis, rights to conduct a wide array of operations not permitted under 
the countries' previous bilateral agreement governing non-scheduled air 
services, which had been in force since 1974 (hereinafter the ``1974 
Bilateral'').\3\ On November 10, 2005, Delegations from the United 
States and Canada initialed an ad referendum protocol to the Agreement 
that would further expand the traffic rights of the air carriers of 
both nations (hereinafter the ``Protocol'').\4\
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    \3\ Non-Scheduled Air Service Agreement Between the Government 
of the United States of America and the Government of Canada, signed 
at Ottawa on May 8, 1974; entered into force May 8, 1974, with 
exchange of notes.
    \4\ Protocol to the Air Transport Agreement Between the 
Governments of the United States of America and the Government of 
Canada, initialed ad referendum at Washington on November 10, 2005. 
The Protocol has not yet been signed by the two Governments. By its 
terms, it will not come into effect before September 1, 2006.
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    In 1981, at the time part 294 was promulgated, it comported with 
the 1974 Bilateral. However, part 294 has not been updated since then 
to reflect the more liberal aviation relationship between the U.S. and 
Canada that is set forth in the 1995 Bilateral. Consequently, although 
intended to facilitate the trans-border operations of Canadian charter 
air taxis, part 294 has ironically become, in some respects, an 
impediment to them. For example, the plain language of the following 
provisions of part 294 contradicts either the spirit or the language of 
the Agreement or the language as proposed by the Protocol:
    (1) Sections 294.81(b) and (b)(1) permit stopovers at points within 
the United States only on round-trip flights originating in Canada. The 
Agreement permits stopovers on one-way and round-trip flights 
originating in either country.\5\ Section 294.81(b)(2) requires that 
the same aircraft stay with its passengers throughout their journey. 
The Agreement contains no such restriction.
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    \5\ Annex III of the Agreement.
---------------------------------------------------------------------------

    (2) Section 294.82 prohibits registrants from transporting persons 
or property whose journey includes a prior, intervening, or subsequent 
movement by air to or from a point not in the United States or Canada. 
However, the Agreement allows the transportation of persons and 
property by airlines designated by each party to carry international 
charter traffic of passengers and cargo between any point or points in 
the territory of the other party and any point or points in a third 
country or countries, provided such traffic is carried via the 
territory of the party that has designated the airline and makes a 
stopover in that territory for at least two consecutive nights.\6\ 
Moreover, the Protocol would further expand third-country traffic 
rights by removing the two-night stopover requirement, and, instead, 
merely require that the flight in question make a traffic stop in the 
airline's homeland.\7\ Accordingly, we are removing section 294.82, as 
described below, in order to make clear that the third-country traffic 
rights applicable to Canadian charter air taxis are coextensive with 
the rights of all Canadian airlines under the Agreement, or, when the 
Protocol becomes effective, the new rights under that Protocol.
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    \6\ Id.
    \7\ Annex III of the Agreement, as proposed to be amended by 
Article 7 of the Protocol initialed at Washington, November 10, 
2005.
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    (3) Section 294.88 prohibits certain trans-border operations to or 
from points west of Blind River, Ontario, and east of the Ontario-
Manitoba provincial line (the ``Northwest Ontario restriction''). The 
Agreement grants traffic rights to the carriers of both nations between 
any points or points in the United States and any point or points in 
Canada.\8\ The CAB included the Northwest Ontario restriction in part 
294 because the Canadian Air Transport Committee had imposed a similar 
restriction on the operations of U.S. air taxis.\9\ We are aware of no 
such restriction today on U.S. air taxis and, therefore, see no basis 
for the Northwest Ontario restriction to remain in part 294.
---------------------------------------------------------------------------

    \8\ Annex III.
    \9\ Order 78-11-87, In the Matter of Charter Authority of 
Canadian Foreign Air Carriers, (CAB Docket 34051) (November 16, 
1978).
---------------------------------------------------------------------------

    (4) Section 294.89 imposes an uplift ratio. The Agreement 
explicitly prohibits uplift ratios.\10\
---------------------------------------------------------------------------

    \10\ Article 4 of the Agreement.
---------------------------------------------------------------------------

    These differences between part 294 and the Agreement have created 
confusion in the aviation industry and imposed unnecessary costs on 
Canadian charter air taxis.\11\ Moreover, they undermine the original 
intent of part 294, which was to expedite the licensing process for 
Canadian charter air taxis. Under present circumstances, there is a 
strong incentive for Canadian charter air taxis to eschew the 
``expedited'' registration process of part 294 in favor of undertaking 
to meet the very requirements from which the CAB sought to relieve 
them, i.e., from having to obtain a foreign air carrier permit. In 
recognition of these issues, and because, as a general matter, the 
Department seeks to remove unnecessary regulatory burdens and to 
advance the United States-Canada air transport relationship,

[[Page 49346]]

the Department amends 14 CFR 294.81 and removes 14 CFR 294.82; 294.88; 
and 294.89.
---------------------------------------------------------------------------

    \11\ The Department has anecdotal evidence of Canadian charter 
air taxi operators turning down business otherwise permitted under 
the Agreement for fear of violating part 294. Some carriers have 
incurred the added legal costs of applying to the Department for 
exemptions from certain of the contradictory provisions in part 294 
as a means of avoiding possible enforcement action for violating 
those provisions.
---------------------------------------------------------------------------

    In addition, the Foreign Air Carrier Family Support Act of 1997 
(Pub. L. 105-148) (hereinafter ``FACFSA''), added to Title 49 of the 
United States Code section 41313, ``Plans to address needs of families 
of passengers involved in foreign air carrier accidents.'' Section 
41313 requires all foreign air carriers with authority to operate to or 
from the United States to develop and submit plans to the Department 
and the National Transportation Safety Board (NTSB) that address the 
needs of families of passengers involved in certain aircraft accidents.
    In 1998, the Department interpreted section 41313 as not applying 
to small aircraft operations and issued an order that exempted all 
foreign air carriers holding Departmental authority to conduct foreign 
air transportation using only small aircraft from the requirements of 
section 41313.\12\ Although this order was served on those Canadian 
charter air taxis that, at the time, were registered with the 
Department, the exemption was, through an administrative oversight, not 
subsequently codified in 14 CFR part 294. Therefore, the Department 
takes this opportunity to amend 14 CFR 294.10 (Exemption authority) to 
codify this order and, thereby, make it clear that Canadian charter air 
taxis are not required to submit family assistance plans to the 
Department or the NTSB.
---------------------------------------------------------------------------

    \12\ Order 98-1-31, In the Matter of the Foreign Air Carrier 
Family Support Act of 1997 Exemption Under 49 U.S.C. Sec.  40109, 
(DOT Docket 98-3304) (January 29, 1998).
---------------------------------------------------------------------------

    As a final matter, the Department hereby makes the following 
additional, non-substantive administrative changes to part 294:
    (1) Amend section 294.2(a) to reflect the current U.S.-Canada 
bilateral aviation agreement signed in 1995.
    (2) Amend sections 294.20, 294.20(b), 294.21(b), 294.22, and 294.40 
to reflect the change in organizational structure that occurred when 
the Special Authorities Division, which is the Departmental program 
office that administers part 294, was transferred from the Office of 
Aviation Analysis to the Office of International Aviation.
    (3) Amend sections 294.3(e), 294.21(g), 294.50(d) to clarify that 
air carrier authority granted by the Government of Canada is a 
condition of receiving and maintaining an effective registration under 
part 294.
    (4) Amend sections 294.21(e)(1) to make clear that the onus rests 
on the carrier, not the Department, to provide the Federal Aviation 
Administration with a copy of the carrier's approved OST Form 4505.
    (5) Amend sections 294.22 to make clear that a refiling may be made 
using electronic mail, as well as by other means, so long as it is 
received by the Department within 30 days of a change in a carrier's 
name or operations.
    (6) Amend sections 294.32 to identify the correct section in 14 CFR 
part 212 that covers the bonding and escrow requirements applicable to 
foreign air carriers.

Regulatory Analysis and Notices

    The Administrative Procedure Act (APA) (5 U.S.C. 553) generally 
requires public notice and an opportunity for public comment before 
issuance of a final rule. It, however, provides an exception when an 
agency finds that there is good cause for dispensing with such 
procedures because they are impracticable, unnecessary, or contrary to 
the public interest. We have determined that, under 5 U.S.C. 
553(b)(3)(B), it is unnecessary and contrary to the public interest to 
utilize the notice of proposed rulemaking and public comment procedures 
for this rule because it is a corrective action required to make the 
regulation consistent with an international agreement. The Department 
notes that, as a temporary measure, it has in the past granted carrier-
specific exemptions obviating any problems for the recipient that would 
have been caused by the discrepancies between part 294 and the 
Agreement.\13\ In addition, the rule codifies an existing Departmental 
order exempting Canadian charter air taxis from the statutory 
requirement of foreign air carriers to file family assistance plans. 
Thus, in effect, the revised regulations merely codify current 
Departmental practice. All other changes are purely administrative in 
nature.
---------------------------------------------------------------------------

    \13\ See, e.g., Notice of Action Taken, London Air Services 
Limited, Exemption from 49 U.S.C. Sec.  41301 (DOT Docket 2003-
15123) (August 22, 2003).
---------------------------------------------------------------------------

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

    The Department has determined that the amendments to 14 CFR part 
294 in the final rule are not a significant regulatory action under 
Executive Order 12866 or under the Department's Regulatory Policies and 
Procedures. It has not been reviewed by the Office of Management and 
Budget. The amendments will impose no additional costs on the affected 
carriers. Rather, they will minimally reduce regulatory compliance 
costs by eliminating any need for Canadian charter air taxis to apply 
for an exemption to the outdated provisions of 14 CFR part 294 that are 
not in consonance with the Agreement. Because these amendments will 
have minimal economic impact on the covered carriers, no further 
regulatory evaluation is necessary.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
agency to assess the impact of regulation on small entities unless the 
agency determines that a rule is not expected to have a significant 
economic impact on a substantial number of small entities. The 
Department certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities. The 
amendments to 14 CFR part 294 will not change U.S. law regarding the 
trans-border operations of Canadian charter air taxis or the rights 
available to Canadian charter air taxis under the 1995 U.S.-Canada 
bilateral aviation agreement, nor will they add any regulatory 
requirements.

Executive Order 13132 (Federalism)

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132. The Department has 
determined that this proposal will not have a substantial direct effect 
on the States, on the relationship between the national government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government, and therefore has no federalism 
implications.

Executive Order 13084

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13084 (``Consultation and 
Coordination with Indian Tribal Governments''). Because this final rule 
will not significantly or uniquely affect the Indian tribal 
communities, and will not impose substantial direct compliance costs, 
the funding and consultation requirements of the Executive Order do not 
apply.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (the Act), 
enacted as Public Law 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure by State, local, and tribal

[[Page 49347]]

governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. This 
final rule does not contain any Federal mandate that would result in 
such expenditures. Therefore, the requirements of Title II of the Act 
do not apply.

Paperwork Reduction Act

    This final rule does not contain information collection 
requirements that require approval by the Office of Management and 
Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. 2507 et 
seq.).

List of Subjects in 14 CFR Part 294

    Air taxis, Canada, Charter flights, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, the DOT amends 14 CFR part 
294 as follows:
0
1.-2. The authority for 14 CFR part 294 continues to read as follows:

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


0
3. Revise paragraph (a) of Sec.  294.2 to read as follows:


Sec.  294.2  Definitions.

* * * * *
    (a) Agreement means the Air Transport Agreement Between the 
Government of the United States and the Government of Canada, signed at 
Ottawa, February 24, 1995, with Annexes and any amendments, 
supplements, reservations, or supersessions to it.
* * * * *

0
4. Revise paragraph (e) of Sec.  294.3 to read as follows:


Sec.  294.3  General requirements for Canadian charter air taxi 
operators.

* * * * *
    (e) Has effective authority from the Government of Canada to 
conduct charter air service between the United States and Canada.
* * * * *

0
5. Add paragraph (d) to Sec.  294.10 so that it reads as follows:


Sec.  294.10  Exemption authority.

* * * * *
    (d) Section 41313 (aviation disaster family assistance plans for 
foreign air carriers)


Sec.  294.20  [Amended]

0
6. Amend Sec.  294.20 introductory text and paragraph (b) by removing 
the words ``Office of Aviation Analysis'' and adding in their place the 
words ``Office of International Aviation.''

0
7. In Sec.  294.21, revise paragraph (b), paragraph (e)(1), and 
paragraph (g) to read as follows:


Sec.  294.21  Procedure on receipt of registration form.

* * * * *
    (b) Any person objecting to the registration of a Canadian charter 
air taxi operator shall file an objection with the Office of 
International Aviation, Special Authorities Division, and serve a copy 
on the applicant within 28 days after the Department receives the 
properly completed registration application. Objections shall include 
any facts and arguments upon which they are based.
* * * * *
    (e) * * *
    (1) Issue the registration by stamping its effective date on OST 
Form 4505 and sending a copy of it to the carrier.
* * * * *
    (g) A registration shall not be issued until the Department 
receives evidence that the applicant has effective authority issued by 
the Government of Canada. The applicant must provide copies of its Air 
Carrier Operating certificate and non-scheduled international license 
issued by the Government of Canada.
* * * * *

0
8. In Sec.  294.22, revise the introductory text and paragraph (a)(1) 
to read as follows:


Sec.  294.22  Notification to the Department of change in operations or 
identifying information.

    Registrants shall refile a copy of OST Form 4505 with the 
Department's Office of International Aviation, Special Authorities 
Division, upon any of the following events. The refiling shall be sent 
by electronic mail, or other means, so as to be received by the 
Department not later than 30 days after the reported event has 
occurred.
    (a) * * *
    (1) A registration ceases to be in effect unless the Government of 
Canada amends the registrant's Air Carrier Operating Certificate to 
reflect the registrant's new name within 60 days of the name change and 
the registrant submits to the Department a copy of its amended Canadian 
authority.
* * * * *

0
9. Revise paragraph (a) of Sec.  294.32 to read as follows:


Sec.  294.32  Security arrangements for operating Public Charters.

* * * * *
    (a) The Canadian charter air taxi operator shall meet the bonding 
or escrow requirements applicable to foreign air carriers as set forth 
in Sec.  212.8 of this chapter.
* * * * *


Sec.  294.40  [Amended]

0
10. Remove the words ``Office of Aviation Analysis'' in Sec.  294.40 
and add in their place the words ``Office of International Aviation.''

0
11. Revise paragraph (d) of Sec.  294.50 to read as follows:


Sec.  294.50  Cancellation, revocation, or suspension of registration.

* * * * *
    (d) The Government of Canada terminates or suspends authority it 
granted to the registrant to conduct charter air service between the 
United States and Canada.
* * * * *
0
12. Revise paragraph (a) of Sec.  294.60 to read as follows:


Sec.  294.60  Applications for authorization to conduct individual 
operations or programs not otherwise permitted by this part.

    (a) Where the terms, conditions, or limitations of this part, 
particularly Sec.  294.81, require prior approval of individual flights 
or charter programs, the registrant shall apply for such approval by 
filing three copies of OST Form 4540 with the Office of International 
Aviation, Foreign Air Carrier Licensing Division. OST Form 4540 may be 
obtained from the Foreign Air Carrier Licensing Division.
* * * * *


Sec.  294.81  [Amended]

0
13. Amend Sec.  294.81 by revising paragraph (b) to read as follows:


Sec.  294.81  Local traffic prohibited.

* * * * *
    (b) A registrant may grant stopover privileges at any point or 
points in the United States to passengers and their accompanied baggage 
as part of a single continuous operation to or from Canada.


Sec.  294.82  [Remove]

0
14. Remove section 294.82.


Sec.  294.88  [Remove]

0
15. Remove section 294.88.


Sec.  294.89  [Remove]

0
16. Remove section 294.89.

    Issued this 14th day of August, 2006, at Washington, DC, under 
authority delegated in 49 CFR 1.56a.
Susan McDermott,
Deputy Assistant Secretary of Transportation for Aviation and 
International Affairs.
 [FR Doc. E6-13664 Filed 8-22-06; 8:45 am]
BILLING CODE 4910-62-P

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