Enhancing Airline Passenger Protections III, 76800-76829 [2016-26178]

Agencies

• DEPARTMENT OF TRANSPORTATION
• Office of the Secretary

[Federal Register Volume 81, Number 213 (Thursday, November 3, 2016)]
[Rules and Regulations]
[Pages 76800-76829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26178]



[[Page 76799]]

Vol. 81

Thursday,

No. 213

November 3, 2016

Part III





Department of Transportation





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14 CFR Parts 234, 244, 250, et al.





 Enhancing Airline Passenger Protections III; Final Rule

Federal Register / Vol. 81 , No. 213 / Thursday, November 3, 2016 / 
Rules and Regulations

[[Page 76800]]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

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

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


Enhancing Airline Passenger Protections III

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Transportation is issuing a third 
``Enhancing Airline Passenger Protections'' final rule to enhance 
protections for air travelers and to improve the air travel environment 
as follows: Expanding the pool of reporting carriers for service 
quality data; requiring reporting carriers to include service quality 
data for their domestic scheduled flights operated by their code-share 
partners; enhancing the Department's code-share disclosure regulation 
to codify the statutory requirement that carriers and ticket agents 
must disclose any code-share arrangements on their Web sites on the 
first display presented in response to a search of a requested 
itinerary for each itinerary involving a code-share operation; and 
prohibiting undisclosed biasing based on carrier identity by carriers 
and ticket agents in any electronic displays of the fare, schedule or 
availability information of multiple carriers. The amendments to the 
reporting requirements in this rule will ensure that the Department 
obtains and provides to the public expanded and enhanced service 
quality data from the airlines. The provision to strengthen the 
Department's code-share disclosure rule will also enhance air travel 
consumer protection. Additionally, this final rule corrects certain 
drafting errors and makes minor changes to the Department's second 
Enhancing Airline Passenger Protections rule to better reflect the 
Department's intent. Other topics covered by the proposed rule that are 
not addressed by this final rule will be addressed in two separate 
rulemakings. Specifically, the Department will be issuing a 
Supplemental Notice of Proposed Rulemaking (SNPRM) to seek additional 
information on the disclosure of fees for basic ancillary services to 
consumers at all points of sale. The remaining topics discussed in the 
2014 notice of proposed rulemaking (e.g., customer service commitments 
by large ticket agents, prohibition on post-purchase price increases 
for ancillary services) will be addressed in another final rule that 
the Department plans to issue at a later date.

DATES: This final rule is effective December 5, 2016.

FOR FURTHER INFORMATION CONTACT: Clereece Kroha or Blane A. Workie, 
Office of the Assistant General Counsel for Aviation Enforcement and 
Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. 
SE., Washington, DC 20590, 202-366-9342 (phone), 202-366-7152 (fax), 
clereece.kroha@dot.gov (email) and blane.workie@dot.gov.

SUPPLEMENTARY INFORMATION: 

Executive Summary

(1) Purpose of the Regulatory Action

    This final rule enhances the performance quality information 
collected by the Department and made available to the public by 
expanding the reporting carrier pool and requiring performance data for 
code-share flights marketed by reporting carriers. These actions will 
ensure that smaller U.S. carriers' performance records are included in 
the monthly Air Travel Consumer Reports and that code-share flights' 
performance data will be reflected in their marketing carriers' records 
and rankings. This rule will also enhance information disclosure to air 
travel consumers by codifying the statutory requirement regarding 
disclosing code-share arrangements in online schedule displays, and 
prohibiting undisclosed bias when displaying air travel itinerary 
search results by carriers and ticket agents. These actions are taken 
under the statutory authorities for the Department to collect and 
collate transportation information that will contribute to the 
improvement of the transportation system of the United States (49 
U.S.C. 329 and sections 41708 and 41709), and to prohibit unfair and 
deceptive practices and unfair methods of competition in the provision 
of air transportation (49 U.S.C. 41712).

(2) Summary of Major Provisions

    In this final rule, the Department amends 14 CFR part 234 to 
require U.S. carriers that account for at least 0.5 percent of the 
domestic scheduled passenger revenue to file reports for the on-time 
performance and mishandled baggage for their flights and to post the 
on-time performance of their flights on their Web sites if they have 
Web sites marketing air transportation to the public. This is an 
expansion of the reporting carrier pool from its previous threshold of 
at least one percent of the domestic scheduled passenger revenue. 
Similarly, an amendment to 14 CFR part 250 will expand the reporting 
carrier pool for reporting oversales data.
    In addition, this rule amends parts 234 and 250 to require all 
reporting carriers that market code-share flights operated by another 
carrier to file separate reports for on-time performance, mishandled 
baggage, and oversales data for those code-share flights.
    With respect to disclosing code-share arrangements, this rule 
amends 14 CFR part 257 to codify a statutory requirement that code-
share arrangements in online itinerary search results must be disclosed 
on the first display following the search and in a format that is 
easily accessible to consumers.
    Finally, this rule adds 14 CFR part 256 that prohibits undisclosed 
bias by carriers and ticket agents when displaying fare, schedule or 
availability information online that includes multiple carriers.

(3) Costs and Benefits

    The Regulatory Impact Analysis estimates the total discounted 
costs, which could be monetized over a 10-year period. Cost could only 
be robustly estimated for the reporting requirements, and may not 
include some other potential costs which the Department expects to have 
minimal impact. The costs of the reporting requirements are estimated 
to total $7.74 million over ten years, which amounts to an annualized 
cost of $0.96 million, when discounted using a seven percent rate. 
Given these estimates, the rule is not expected to be economically 
significant. The benefits could not be quantified and monetized with 
reasonable accuracy for the rule. Benefits were evaluated qualitatively 
for all provisions. A summary of this rule's benefits and costs is 
presented in the following table.

[[Page 76801]]



                  Summary of Rule's Benefits and Costs
------------------------------------------------------------------------
                                                       Ten year costs
       Major provision              Benefits           (Discounted 7%)
------------------------------------------------------------------------
Additional Reporting          Improved ability of   Costs to carriers to
 Carriers for Service          consumers,            report the
 Quality Data.                 especially in rural   information
                               communities, to       estimated at $7.74
                               examine the past      million (10-year
                               performance of        cost discounted at
                               flights.              7 percent).* Costs
                              Potential improved     for some carriers
                               Department            to train employees
                               enforcement due to    and costs to
                               more complete         consumers to use
                               picture of industry   the information are
                               performance.          not estimated.
Data Reporting for Domestic   Improved ability of   See above.
 Code-Share Partner            consumers,
 Operations.                   especially in rural
                               communities, to
                               examine the past
                               performance of
                               flights.
                              Potential for
                               improved Department
                               enforcement due to
                               more complete
                               picture of industry
                               performance.
Transparency in Display of    Helps ensure that     Up-front programming
 Code-Share Operations as      all consumers         costs to redesign
 Required by 49 U.S.C.         purchasing via        mobile websites and
 41712(c).                     telephone, mobile     applications to
                               websites, and         incorporate the
                               applications are      code-share
                               aware of code-share   disclosure
                               arrangements at       information for
                               beginning of          those carriers
                               booking process;      which had not
                               some consumers may    interpreted statue
                               avoid time for        as applying to
                               additional flight     mobile websites and
                               searches.             mobile
                                                     applications;
                                                     potential costs for
                                                     telephone
                                                     reservations.
Prohibition of Undisclosed    Decrease in           Based on assumptions
 Bias.                         potential             with uncertainties,
                               distortion in         programing costs to
                               market of consumer    add statement(s)
                               unknowingly           for some carriers
                               choosing non-         and travel agents
                               optional flights      are estimated to
                               because of display    range from $947,000
                               order.                to $2.8 million
                                                     (undiscounted).
------------------------------------------------------------------------
* Costs were estimated for these two provisions together as their
  impacts are inter-related.

Background

    On May 23, 2014, the U.S. Department of Transportation (DOT) issued 
a notice of proposed rulemaking (NPRM), 79 FR 29970, to improve the air 
travel environment of consumers based on its statutory authority to 
prohibit unfair or deceptive practices in air transportation, 49 U.S.C. 
41712. This NPRM addressed several recommendations to the Department 
regarding aviation consumer protection made by two DOT Federal advisory 
committees--the Future of Aviation Advisory Committee (FAAC) and the 
Advisory Committee on Aviation Consumer Protection (ACACP). It also 
addressed two issues identified in the second Enhancing Airline 
Passenger Protections final rule--(1) disclosure of fees for certain 
ancillary services at all points of sale; and (2) post purchase price 
increases for ancillary services. See 76 FR 23110. More specifically, 
the Department's NPRM addressed and solicited public comments on the 
following issues: (1) Codification of the Department's interpretation 
of the statutory term ``ticket agent''; (2) Disclosure of certain 
ancillary service fee information to consumers in all channels of 
sales; (3) Expanding the reporting carrier pool for service quality 
data; (4) Requiring reporting of service quality data for code-share 
flights by the marketing carriers; (5) Applying customer service 
commitments to large ticket agents; (6) Enhancing the disclosure of 
code-share operations; (7) Disclosing carriers marketed by large ticket 
agents; (8) Prohibiting undisclosed carrier display bias by large 
ticket agents; (9) Prohibiting post purchase price increases for 
certain ancillary services.
    In response to this NPRM, the Department received over 750 comments 
from the following: U.S. air carriers and U.S. air carrier 
associations; foreign air carriers and foreign air carrier 
associations; consumer rights advocacy groups; travel agents, travel 
agent associations, and global distribution systems (GDSs); airports 
and various airport-related industry groups; and a number of individual 
consumers.
    The Department has carefully reviewed and considered the comments 
received. To ensure that the subjects identified in the NPRM are 
addressed through rulemaking as efficiently as possible, we have 
decided to split the issues addressed in the 2014 NPRM into three 
separate rulemakings. First, in this final rule, we are finalizing 
regulations on several subjects on which we have completed our review 
and analysis, including completing a regulatory analysis. Specifically, 
we are finalizing rules: Expanding the reporting carrier pool; 
requiring reporting of code-share flights by the marketing carriers; 
enhancing the disclosure of code-share operations; and prohibiting 
undisclosed display bias. Although we are not promulgating a 
requirement regarding disclosing on ticket agent Web sites that not all 
airlines are marketed by ticket agents at this time, that proposal is 
also addressed in this rulemaking. Second, we will be issuing a 
Supplemental Notice of Proposed Rulemaking (SNPRM) addressing 
disclosure of certain ancillary service fee information to consumers in 
all channels of sales (GDS issue). See RIN 2105-AE56. We believe the 
SNPRM is necessary in light of the complexity of the issues and 
additional considerations identified by comments submitted on the NPRM. 
The NPRM also proposed revisions to baggage fee disclosure provisions 
section 14 CFR 399.85(a)-(c). Any revisions to that section relating to 
baggage disclosure requirements will be addressed in the SNPRM as that 
rulemaking is focused on ancillary service fee disclosures. Finally, 
for several subjects on which we believe that we have obtained 
sufficient information but need additional time to complete the 
regulatory analysis, we are postponing the issuance of a final rule 
until a later date. These subjects include the following: Codification 
of the Department's interpretation of the statutory term ``ticket 
agent''; applying customer service commitments to large ticket agents; 
and prohibiting post purchase price increases for certain ancillary 
services, which includes addressing the ``mistaken fares'' issue. See 
RIN 2105-AE57.
    For those subjects that we are finalizing in this final rule, in 
the table below we provide a summary of the regulatory provisions and a 
summary of the regulatory analysis. Following that, we summarize the 
commenters' positions that are germane to the specific issues raised in 
the NPRM and the Department's responses.

[[Page 76802]]



                    Summary of Regulatory Provisions
------------------------------------------------------------------------
              Subject                            Final rule
------------------------------------------------------------------------
Additional Reporting Carriers for    Expands the pool of
 Service Quality Data.               reporting carriers from any carrier
                                     that accounts for at least 1% of
                                     domestic scheduled passenger
                                     revenue to any carrier that
                                     accounts for at least 0.5% of
                                     domestic scheduled passenger
                                     revenue.
                                     Mandates reporting of data
                                     for scheduled flights to and from
                                     all large, medium, small, and non-
                                     hub U.S. airports.
Data Reporting for Domestic Code-    Requires reporting carriers
 Share Partner Operations.           to separately report data for their
                                     domestic scheduled flights operated
                                     by their code-share partners:
                                       [cir] On-time Performance.
                                    [cir] Mishandled Baggage.
                                    [cir] Oversales.
                                     Allows a simplified data
                                     report for on-time performance of
                                     code-share flights if the operating
                                     carrier of the flights is a
                                     reporting carrier itself.
Transparency in Display of Code-     Amends the Department's
 Share Operations as Required by     code-share disclosure regulation to
 49 U.S.C. 41712(c).                 codify the statutory requirement
                                     that carriers and ticket agents
                                     must disclose any code-share
                                     arrangements on their websites.
                                    [cir] Requires disclosure on the
                                     first display presented in response
                                     to a search of a requested
                                     itinerary for each itinerary
                                     involving a code-share operation.
                                       [cir] Disclosure must be in a
                                        format that is easily visible to
                                        a viewer.
                                     Adopts a simplified format
                                     for display of code-share
                                     disclosures via mobile websites and
                                     apps by permitting disclosure of
                                     only corporate name of the
                                     operating carrier.
                                     Enhances code-share
                                     disclosure in oral communication by
                                     requiring the disclosure be
                                     provided at the first time the
                                     flight is offered by a carrier or
                                     ticket agent or inquired by a
                                     consumer.
Prohibition of Undisclosed Bias...   Prohibits undisclosed
                                     biasing by carriers and ticket
                                     agents in any online displays of
                                     the fare, schedule or availability
                                     information of multiple carriers.
------------------------------------------------------------------------

Summary of Regulatory Analysis

    The Final Regulatory Evaluation examined the economic impact, in 
terms of all benefits accruing to airline passengers, and costs to U.S. 
and foreign air carriers and other entities regulated under this 
proceeding. Although benefits could not be quantified and monetized 
with reasonable accuracy for the provisions in the rule, benefits were 
evaluated qualitatively for all provisions. Meanwhile, the total 
discounted costs which could be monetized over a 10-year period could 
only be robustly estimated for Provisions 1 and 2. The costs of 
Provisions 1 and 2 are estimated to total $7.74 million over ten years, 
which amounts to an annualized cost of $0.96 million, when discounted 
using a seven percent rate. Other costs are expected to be minimal. 
Benefits were not able to be quantified for the most part. Nonetheless, 
the Department believes that the rule is in the public interest as it 
will provide consumers with more information to make decisions about 
air transportation purchases.

Discussion

(1) Expanding the Definitions of ``Reporting Carrier'' and ``Reportable 
Flight'' Under 14 CFR Part 234

    The NRPM: 14 CFR parts 234 and 250 require certain large U.S. 
carriers--the ``reporting carriers''--to report data to the Department 
concerning on-time performance, mishandled baggage, and oversales. 
Currently, U.S. carriers with at least 1.0 percent of total annual 
domestic scheduled-passenger revenue are required to report. In the 
NPRM, we proposed to amend the definition of ``reporting carrier'' 
under part 234 to include carriers that account for at least 0.5 
percent of total annual domestic scheduled-passenger revenue. The 
purpose of this proposal is to increase the data reported by air 
carriers and published by the Department in order to provide the public 
with more information for making travel decisions. The proposed 
amendment to the definition of ``reporting carrier'' will not only 
affect the pool of carriers reporting on-time performance and 
mishandled baggage data to the Department and posting on-time 
performance information on the carrier's Web site pursuant to 14 CFR 
part 234, but will also affect the pool of carriers reporting oversales 
data to the Department under 14 CFR part 250. We sought public comments 
on whether 0.5 percent is a reasonable threshold to achieve our goal of 
maximizing the scope of data collection from the industry while 
balancing that benefit for consumers against the reporting burden for 
additional carriers, particularly smaller ones. If 0.5 percent is not 
the most reasonable threshold, we asked whether a more reasonable 
approach would be an even larger expansion, e.g., to 0.25 percent, or a 
smaller expansion to 0.75 percent, or even requiring all carriers that 
provide domestic scheduled passenger service to report to the 
Department. We especially invited comments that provide specific cost 
estimates or analysis by smaller carriers that would potentially be 
impacted by this proposal. We also requested comments regarding whether 
a carrier's share of domestic scheduled passenger revenue remains an 
appropriate benchmark or if we should use a carrier's share of domestic 
scheduled passenger enplanements instead.
    The current rule states that March 31 is the cutoff date for 
compiling a carrier's annual domestic scheduled passenger revenue 
percentage. However, for years, DOT's Bureau of Transportation 
Statistics (BTS) has been using June 30, instead of March 31, as the 
cutoff date. Currently carriers must report revenue information, 
including domestic scheduled passenger revenue, to DOT on a quarterly 
basis using Form 41. DOT uses this information to calculate each 
carrier's share of total domestic scheduled passenger revenue over the 
time period of July 1st to June 30th each year, and determines which 
carriers account for at least 1 percent of total domestic scheduled 
passenger revenue. The Department then provides notice to new reporting 
carriers of their obligation to report. In the NPRM we proposed to 
codify the June 30 as the cutoff date in the definition of ``reporting 
carrier.''
    Finally, in relation to the burden associated with implementing a 
reporting mechanism within a carrier's operation system, we requested 
comments on how much time a newly reporting carrier will likely need to 
prepare for the new reporting duties. Although not proposed in the rule 
text, we stated in the preamble of the NPRM that we were contemplating 
that should

[[Page 76803]]

this proposal be finalized, we would permit carriers that have not been 
reporting carriers but become a reporting carrier under a new threshold 
to file their first reports by February 15 for the first January that 
is at least six months after the effective date of this rule.
    In addition to expanding the pool of reporting carriers, the NPRM 
sought comments on whether we should expand the scope of ``reportable 
flights'' in relation to airports to include not only large hub 
airports (U.S. airports that account for at least 1% of domestic 
enplanements) that are mandated by the current rule, but also medium, 
small, and non-hub airports, or, alternatively, to include domestic 
scheduled flights to and from all U.S. airports where the reporting 
carriers operate. We also invited the public to provide information on 
the costs and benefits related to this matter.
    Comments: Among the consumer rights advocacy groups that provided 
comments on this proposal, four groups, U.S. Public Interest Research 
Group (U.S. PIRG) and Consumers Union (in their joint comments) and 
Travelers United and National Consumers League (in their joint 
comments), support the expansion of the reporting carrier threshold to 
0.5% of total domestic scheduled passenger revenue. Consumers Union and 
U.S. PIRG state that the information from newly covered carriers will 
be useful to consumers and regulators alike and that with current 
technology the compliance cost would be minimal and manageable. They 
also comment that, if feasible, the Department should require reports 
from all carriers providing domestic scheduled passenger flights from 
all airports. Travelers United and National Consumers League support 
the expansion because it would be beneficial to consumers by including 
airlines such as Spirit and Allegiant in the Department's Air Travel 
Consumer Report (ATCR) and it would enhance transparency and 
accountability of airline performance for consumers. Flyersrights.org 
recommends that the Department should require all carriers with over 
$100 million in revenue to file reports and that the reports should 
cover reporting carriers' flights to all airports. Flyersrights.org 
also states that flight cancellations that often cause significant 
delays to passengers should not be statistically reported as zero delay 
as the organization states they are under the existing reporting 
requirements.
    Among the comments submitted by airlines and airline associations, 
Airlines for America (A4A), Hyannis Air Service dba Cape Air (Cape 
Air), JetBlue Airways, Frontier Airlines, and Southwest Airlines in 
general support the proposal to expand the reporting carrier pool. A4A 
states that the Department should require all carriers providing 
domestic scheduled service to file reports because it would increase 
the total amount of information available to the public and any carrier 
that has the resources to obtain an operating certificate and to offer 
scheduled service should not find it overly burdensome to report to the 
Department basic information about its operations. A4A also supports 
eliminating ``reportable'' flights and simply mandating that reporting 
carriers report on all flights. Cape Air supports the expansion to 0.5% 
but does not believe a threshold beyond that level would provide 
substantial benefit to the public in comparison to the costs because 
expanding beyond the 0.5% threshold would create significant burden to 
small businesses. Frontier Airlines supports the expansion as the 
performance data are important for consumers to compare carriers. 
Frontier points out that under the existing reporting carrier 
threshold, Frontier is a reporting carrier but its competitors such as 
Spirit Airlines and Allegiant Air are not reporting carriers.\1\ 
JetBlue Airways supports including all carriers providing domestic 
scheduled passenger service in the universe of reporting carriers to 
increase transparency and available information to consumers. Southwest 
Airlines also supports the expansion, stating that today all carriers 
collect data and track on-time performance as a matter of business 
necessity and the performance indicators that are reported to the 
Department affect passengers without regard to the size of the carrier.
---------------------------------------------------------------------------

    \1\ On October 30, 2015, BTS issued its Reporting Technical 
Directive #25, effective January 1, 2016. Under that Directive, 
there are now 12 reporting carriers meeting the one percent domestic 
scheduled passenger revenue threshold: Alaska, American, Delta, 
ExpressJet, Frontier, Hawaiian, JetBlue, SkyWest, Southwest, Spirit, 
United, and Virgin America.
---------------------------------------------------------------------------

    In opposition to the proposed expansion, Republic Airways Holdings 
Inc. and its subsidiaries, Republic Airlines, Chautauqua Airlines, and 
Shuttle America (herein collectively ``Republic'') jointly filed 
comments asserting that the reporting requirements should not be 
extended to regional carriers that do not market flights and handle 
customer service under ``fee for service/capacity purchase agreements'' 
or ``CPAs'' as CPA carriers do not have information such as baggage 
handling or oversales. Republic further states that requiring CPA 
carriers to report data that mainline carriers are already reporting 
would be duplicative, imposing costs on CPA carriers and increasing 
potential consumer confusion with no corresponding regulatory benefits. 
As an alternative, Republic suggests that if the Department requires 
the CPA carriers to file reports, it should require the mainline 
carriers to provide certain data to CPA carriers. Regarding the cost 
and benefit aspect of the proposal, Republic states that the proposal 
will impose new technology and personnel costs and notes that the 
regulatory evaluation accompanying the NPRM concedes that the monetized 
cost of the two reporting-related proposals would far exceed their 
monetized benefits. With respect to the time needed by newly reporting 
carriers to prepare for filing the first report, Republic states that 
the Department should provide at least 18 months lead time so carriers 
have sufficient time to develop, test, and implement the reporting 
system. Allegiant Air opposes the expansion of reportable flights to 
cover smaller airports. Allegiant states that the expansion of 
reportable flights beyond large hub airports does not satisfy cost-
benefit analysis given the small number of passengers utilizing these 
airports, and it would place a burden on small carriers serving these 
markets, and ultimately result in higher prices for consumers. American 
Airlines, Delta Air Lines, and United Airlines submitted joint comments 
opposing any change in the current mishandled baggage reporting 
methodology. In its separate comment, Delta Air Lines asserts that any 
change to the current mishandled baggage reporting rules are 
unjustified and misleading.
    Several airport associations also commented on this proposal, all 
supporting the expansion of the reporting carrier pool to include all 
commercial airlines. Airports Council International-North America (ACI-
NA) states that the information is the same to passengers no matter the 
type of aircraft or the size of the airline. ACI-NA justifies its 
position by asserting that regional airlines now provide over half of 
daily domestic flights, and serve 70% of U.S. airports. Meanwhile, 
according to ACI-NA, technological enhancements in the last 25 years 
provide justification to require all carriers to report. The American 
Association of Airport Executives (AAAE) points out that the Government 
Accountability Office (GAO) concludes that airlines not required to 
report to DOT have higher delay, cancellation, and diversion rates,

[[Page 76804]]

and smaller communities are left out of the equation. Regarding costs 
and benefits, AAAE states that in the past paperwork was a limiting 
factor but modern technology now makes the process much easier and more 
efficient. California Airports Council states that with the significant 
growth of regional airlines at airports of all sizes, it is crucial for 
DOT to include all carriers' operations in consumer protection 
regulations and notifications. San Francisco International Airport also 
supports the expansion of the reporting carrier pool to cover all 
commercial airlines. It states that this expansion will improve the 
amount and quality of information available to passengers while 
encouraging open and fair competition among air carriers. It also 
points out that air carriers providing scheduled commercial service in 
the United States in 2014 are universally equipped with technology 
sufficient to provide service quality data and doing so should not 
create a burden.
    Marks Systems, Inc., d/b/a masFlight (masFlight), an industry 
provider of aviation operations analysis, recommends that the 
Department adopt a 0.25 percent threshold to capture all low-fare and 
significant regional carriers and to ensure fairness across the 
industry in transparency and regulatory compliance. In supporting this 
position, masFlight provides data from 2013 demonstrating that under 
the 0.25 percent threshold, an additional five carriers would be 
captured compared to the proposed 0.5 percent threshold (Shuttle 
America, Horizon, PSA, Chautauqua, and Sun Country), leaving only two 
carriers that are under the 0.25 percent threshold (GoJet and Compass). 
MasFlight cites the Initial Regulatory Impact Analysis for the NPRM 
that estimates the initial cost for a new reporting carrier to be $33 
million over a 10-year period, and asserts that this potential 
compliance cost would be excessive to a carrier that accounts for less 
than 0.25 percent of domestic scheduled passenger revenue. MasFlight 
also suggests that the Department maintain its current benchmark using 
domestic scheduled passenger revenue instead of changing to domestic 
scheduled passenger enplanements to minimize compliance cost. MasFlight 
supports expanding the definition of reportable flight to cover all 
U.S. airports.
    DOT Responses: Since their implementation, the reporting 
requirements in part 234 (for on-time performance and mishandled 
baggage) and part 250 (for oversales) have been effective tools for the 
Department to collect airline service and performance data. The 
Department also uses the information to monitor the quality of service 
provided to the flying public by each reporting carrier and to furnish 
the information to consumers via the Air Travel Consumer Report. This 
data also provides the Department necessary information used in 
connection with rulemakings and other important policy decisions. As 
stated in the NPRM, the current 1.0 percent domestic scheduled 
passenger revenue threshold was initially adopted in 1987 as a 
compromise in order to reduce the burden imposed on small businesses 
because at that time, small carriers were less likely to maintain their 
flight performance data in a computerized form. 52 FR 34056 (September 
9, 1987). The comments we received on this NPRM do not dispute that the 
more information the Department receives through its reporting 
mechanism, including service quality of small airlines, and information 
on flights to and from small airports, the greater the benefit to the 
public. We are confident that lowering the threshold for reporting to 
add certain smaller carriers' performance data to the data currently 
collected by BTS will enable the Department to obtain and provide to 
the flying public a more complete picture of the performance of 
scheduled passenger service in general. We are also optimistic that 
including smaller airlines' performance data in the Department's data 
collection will specifically benefit small communities and regional 
markets that are primarily served by these smaller airlines by 
increasing the level of public scrutiny of their performance quality 
and increasing their competitiveness.
    Furthermore, expanding the pool of reporting carriers responds to 
the recommendation by GAO in its September 2011 Report to Congressional 
Requesters.\2\ In that report, GAO states that the Department should 
collect and publicize more comprehensive on-time performance data to 
include information on most flights, to airports of all sizes. The 
Department shares GAO's view that expanding the reporting carrier pool 
would enhance the Department's ability to analyze the cause of flight 
disruptions such as delays and cancellations, particularly with respect 
to airports in smaller communities, at which consumers are more likely 
to be inconvenienced by flight irregularities due to less-frequent 
service.
---------------------------------------------------------------------------

    \2\ Airline Passenger Protections: More Data and Analysis Needed 
to Understand Effects of Flight Delays, September 2011, GAO. https://www.gao.gov/products/GAO-11-733.
---------------------------------------------------------------------------

    The comments opposing expansion of the reporting carrier pool 
mainly focus on the burden it will place on smaller carriers. In that 
regard and consistent with the approach taken by the Department in the 
1987 final rule, we have determined that there is a balance between 
obtaining the most useful information on flight performance quality and 
avoiding excessive burden and cost to smaller airlines. The Department 
concludes that the 0.5 percent threshold is appropriate in striking 
that balance, taking into consideration the technological advances 
during the past 29 years in tracking and recording flight performance 
data. Our decision also takes into account the fact that we are 
adopting the proposal requiring marketing carriers to report flight 
performance data for domestic flights operated under the marketing 
carrier's code by code-share partners, including smaller, non-reporting 
carriers, which will be discussed in the next section of this preamble. 
The chart below contains information on certificated carriers affected 
by these thresholds based on annual scheduled passenger revenue as 
reported to BTS for the 12-month period ending June 30, 2015:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
          Reporting Carriers Meeting the Existing 1% Threshold
------------------------------------------------------------------------
1....................................  Alaska.
2....................................  American.
3....................................  Delta.
4....................................  Express Jet.
5....................................  Frontier.
6....................................  Hawaiian.
7....................................  JetBlue.
8....................................  SkyWest.
9....................................  Southwest.
10...................................  Spirit.
11...................................  United.
12...................................  Virgin America.
------------------------------------------------------------------------
              Carriers Meeting the Expanded 0.5% Threshold
------------------------------------------------------------------------
1....................................  Air Wisconsin.
2....................................  Allegiant.
3....................................  Endeavor.
4....................................  Mesa.
5....................................  Envoy.
6....................................  Republic.
7....................................  Shuttle America.
------------------------------------------------------------------------
           Carriers Meeting the 0.25% Threshold (Not Adopted)
------------------------------------------------------------------------
1....................................  Horizon.
2....................................  PSA.
3....................................  Sun Country.
------------------------------------------------------------------------
 Carriers Accounting for Less Than 0.25% of Domestic Scheduled Passenger
                                 Revenue
------------------------------------------------------------------------
1....................................  Compass.
2....................................  GoJet.
------------------------------------------------------------------------

    Although the costs of maintaining and filing performance data with 
the Department has been reduced

[[Page 76805]]

significantly compared to what it was in 1987, the Department is aware 
that it is still not a negligible expense for smaller carriers under 
the 0.5 percent threshold. Technology developments such as automation 
of performance data tracking reduces the cost of human capital needed 
for the tasks. However, the initial cost of setting up a sophisticated 
system to aggregate the data meeting the Department's reporting 
criteria and adding personnel to file monthly and quarterly reports 
with the Department may disproportionately burden smaller carriers.
    In addition to the concerns about the burden to smaller carriers, 
we have also decided not to adopt a threshold lower than 0.5 percent as 
endorsed by some commenters because most of the flights operated by 
those carriers falling below the 0.5 percent threshold will be captured 
under the code-share flights reporting requirement, which is discussed 
in the next section. According to the current data, if we adopt a 0.5 
percent threshold, five smaller certificated carriers providing 
scheduled domestic passenger services (Horizon, PSA, Sun Country, 
Compass, and GoJet) \3\ will not be required to file reports directly 
with the Department. Four of these five carriers operate code-share 
flights on behalf of their marketing-carrier partners, which are all 
reporting carriers. Horizon operates solely for Alaska Airlines, PSA 
operates solely for American Airlines, Compass operates for American 
Airlines and Delta Air Lines, and GoJet operates for United Airlines 
and Delta Air Lines. All of those four smaller carriers' flight 
performance data will be reported by their marketing carriers. Sun 
Country is the only carrier among the five that does not operate code-
share flights and will not have its performance data reported to the 
Department under the 0.5 percent threshold. Sun Country accounted for 
only 0.32% of domestic scheduled passenger revenue. In other words, 
adopting a 0.5 percent threshold will allow the Department to capture 
in substance 99.68% of the flight performance data for domestic 
scheduled flights. We recognize that Horizon, PSA, Compass, and GoJet 
will likely incur certain expenses to assist their marketing carriers 
in compiling the reports. However, we consider the cost-sharing 
structure between the smaller operating carrier and large marketing 
carrier to be an effective and efficient way for the Department to 
obtain the data while limiting the burden imposed on smaller carriers.
---------------------------------------------------------------------------

    \3\ The list of carriers (based on 2015 domestic scheduled 
passenger revenue data) is for the purpose for illustrating the size 
and number of carriers that currently would and would not be 
affected by this change. Each year the Department's Bureau of 
Transportation Statistic's Office of Airline Information updates the 
list of reporting air carriers. Although the carriers that fall 
above or below the threshold may change from year to year, as 
historical data demonstrates, we don't expect the number of affected 
carriers to change drastically.
---------------------------------------------------------------------------

    Finally, as technology development appears to be the primary factor 
affecting the costs incurred by a carrier in tracking, compiling, and 
filing performance data with the Department, we will continue to 
monitor the effect of new technology on the cost of recordkeeping and 
the scope of carriers covered by the reporting requirements. We will 
consider expanding the reporting requirements to other carriers 
providing scheduled service if it becomes economically sound and 
necessary to obtain data beneficial to consumers.
    The Department appreciates the Republic carriers' comments 
regarding the CPA carriers' lack of firsthand information on customer 
service related data as these carriers may not handle customer services 
such as baggage handling or oversales. The Department further notes 
that the relationship between a CPA carrier and its code-share 
marketing-carrier partner is different from carrier to carrier, 
depending on each CPA's terms and conditions, and such a relationship 
has the potential to further evolve in the future. For example, a CPA 
carrier that currently does not handle baggage may begin to handle 
baggage in the future. As such, the Department does not believe it is 
appropriate to exempt the CPA operating carriers entirely from 
reporting baggage handling and oversales data at this time. Larger CPA 
carriers such as SkyWest or ExpressJet currently file reports including 
data that they obtain from their marketing partners, which indicates to 
the Department that a cooperative information collection and 
compilation structure between marketing and operating carriers is 
technically and economically workable. We anticipate that in the future 
carriers may include provisions in their CPA contracts for the 
marketing carrier to provide baggage handling and oversales data to the 
reporting operating carrier in a timely manner if that is relevant to 
the carriers' relationship. In the meantime, the Department expects 
carriers to work together in good faith to share information with each 
other in order to facilitate the required reporting.
    With respect to the question of whether the Department should use 
domestic scheduled passenger enplanements as a benchmark to define 
``reporting carrier'' in lieu of the current benchmark of domestic 
scheduled passenger revenue, we received no comments supporting such a 
change and we do not see any compelling reason for such a change. While 
keeping the current benchmark, we also adopt in this final rule the 
longstanding practice by BTS to use June 30 as the cutoff date for 
compiling a carrier's annual domestic scheduled-passenger revenue 
percentage, as opposed to March 31 as stated in the current rule. No 
adverse comments were received.
    With respect to the definition of ``reportable flight'' that 
currently only covers flights to and from large hub airports, the vast 
majority of comments are in support of including all airports in the 
reporting regime. We are unconvinced by Allegiant Air's assertion that 
we should exempt flights to and from smaller airports from the 
reporting requirements on the basis that such reporting imposes an 
excessive cost on the carriers. Exempting flights to and from smaller 
airports will render our inclusion of smaller carriers in the reporting 
carrier pool less meaningful. Further, we note that the current 
reporting carriers all have chosen to file reports for scheduled 
passenger flights to all U.S. commercial airports where they operate. 
As such, there is an argument to be made that a reporting carrier would 
incur more cost to separate flights operated out of large hubs from 
flights operated out of other airports for reporting purpose as 
compared to reporting all flights operated out of all airports. For 
these reasons, we adopt in this final rule a mandate to report the on-
time performance and mishandled baggage information for domestic 
scheduled flights marketed by a reporting carrier to and from all U.S. 
large, medium, small, and non-hub airports pursuant to part 234. By 
expanding the reportable flights under part 234 to these categories of 
airports, we are covering all domestic scheduled flights to and from 
U.S. commercial airports that have an annual passenger enplanements of 
10,000 or more. We note that this expansion of airports covered under 
part 234 does not affect the scope of airports covered under 14 CFR 
250.10, reporting oversales information, which covers and will continue 
to cover all domestic scheduled flights and all international scheduled 
flights departing a U.S. airport and using an aircraft that has a 
designed passenger capacity of 30 or more passenger seats.
    In response to Flyersrights.org's comment that flight cancellations 
are currently not statistically reported as flight delays, the 
Department wishes to clarify that the ATCR categorically treats

[[Page 76806]]

cancelled flights as flights not operated ``on time,'' along with 
flights that are diverted or are delayed for 15 minutes or more. See, 
Air Travel Consumer Reports, Footnote D of Footnotes for Tables 1 
Through 6 (Flight Delays) and 8 (Cancellations). In other words, under 
the current reporting structure, a cancelled flight counts as a delayed 
flight in a carrier's on-time performance percentage. Thus, we do not 
believe any change to that structure is necessary.
    The Department appreciates the comments submitted by United, Delta, 
and American, jointly, and by Delta, individually, on the rationale for 
the Department's proposal to change the matrix and the methodology of 
collecting mishandled baggage information. However, this rulemaking 
addresses which airlines and flights are subject to the reporting 
requirements contained in Parts 234 and 250, and it does not address 
what methodology the carriers are required to use to collect and report 
the data. A separate rulemaking, ``Reporting of Data for Mishandled 
Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo 
Compartments,'' RIN 2105-AE41 (formerly 2139-AA13), Docket No. DOT-
RITA-2011-0001, addresses the methodology for collection of mishandled 
baggage information. The Department fully reviewed and considered all 
substantive comments submitted to that docket (DOT-RITA-2011-0001), 
including comments by United, Delta, and American. The final rule on 
reporting of data for mishandled baggage and wheelchairs and scooters 
transported in aircraft cargo compartments is being published 
contemporaneously with this final rule. Because the Department's 
proposal to change the mishandled baggage reporting matrix was resolved 
in a separate rulemaking and the instant rulemaking on transparency of 
ancillary service fees and other consumer issues will not result in any 
change to the matrix on how to report mishandled baggage, please see 
the Department's final rule on ``Reporting of Data for Mishandled 
Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo 
Compartments'' for responses to comments concerning the reporting 
matrix.
    With respect to the compliance dates of this reporting threshold 
change, we have carefully considered the comments submitted and 
consulted with BTS on its estimated timeframe to fully implement a 
system capable of accepting and accommodating the newly included 
reporting carriers under this final rule. We have reached the 
conclusion that the new reporting carriers should be required to file 
their initial reports for on-time performance and mishandled baggage by 
February 15, 2018, for January 2018 operations; to file their initial 
reports for oversales by April 30, 2018, for the first quarter of 2018; 
and to load on-time performance disclosure data for each domestic 
scheduled flight marketed on their Web sites on Saturday, February 24, 
2018, for flights operated in January 2018. Consistent with the 
existing rule, carriers must load all subsequent flight performance 
information on the fourth Saturday of the month following the month 
that is being reported. Oral disclosure of on-time performance 
information upon consumers' reasonable inquiry during the course of 
reservations or ticketing discussions or transactions should begin no 
later than February 25, 2018. We believe this provides sufficient lead 
time to the new reporting carriers to set up the infrastructure and 
train their personnel to handle the reporting of this data. We also 
believe that requiring the initial monthly reports to start in January 
and the initial quarterly reports to start in the first quarter 
provides the benefit of preserving the consistency of the Department's 
data for a full calendar year during the transition. We note that with 
the exception of Allegiant Air, all new reporting carriers do not 
directly market flights they operate to the public and therefore are 
under no obligation to implement the disclosure requirements contained 
in 14 CFR 234.11.

(2) Carriers To Report Data for Certain Flights Operated by Their Code-
Share Partners

    The NPRM: The current reporting structures in Parts 234 and 250 
only require reporting carriers to report performance data for flights 
they operate and not for flights marketed under the reporting carrier's 
code but operated by a code-share partner. The NPRM proposed to require 
reporting carriers that market flights operated by their domestic code-
share partners to file a second and separate set of on-time 
performance, mishandled baggage, and oversales data reports that 
include the relevant data for both flights they operate and flights 
operated by their domestic code-share partners. We asked whether the 
second set of data should only contain data for code-share flights and 
whether it should include separate flight statistics for each code-
share partner. We also solicited comments on whether ``double 
counting'' is an issue under this proposal (e.g., a regional carrier 
operating a flight for more than one marketing carrier and therefore 
the same flight would be reported twice by the marketing carriers). 
Furthermore, we asked the public to provide comment about how to deal 
with the situation where a flight carries two large carriers' codes and 
is operated by one of the two carriers (mainline-to-mainline code-
share). Finally, as for the proposal to expand the reporting carrier 
pool, we asked what a reasonable implementation period is for the 
marketing carriers to comply with this new reporting requirement.
    Comments: All consumer rights advocacy groups that submitted 
comments on this proposal are generally in support of including code-
share flights service quality data in the marketing carrier's reports. 
Consumers Union and U.S. PIRG cite the monthly ATCR, which provides 
critical and helpful information to consumers about airline performance 
(including delayed and canceled flights, mishandled baggage, consumer 
complaints, and denied boardings), and state that this change will make 
the report even more useful for consumers. They also agree with the 
Department's proposition that this change will increase airline 
incentives to improve performance, not only in their own operations but 
also in the operations of the carriers with whom they partner. Further, 
Consumers Union and U.S. PIRG assert that the performance information 
on code-share flights would be of maximum usefulness if it is provided 
in aggregate for the mainline carrier and all of its code-share 
partners, and also disaggregated for each code-share partner 
separately. Consumers Union and U.S. PIRG question the soundness of the 
Department's proposal to limit the reporting of code-share flights data 
to non-stop flights operated by code-share partners and avers that the 
Department should include all flight segments that are marketed by 
mainline carriers.
    Travelers United and National Consumers League also support this 
proposal, stating that code-share flights now account for more than 
half of domestic flights, yet the poorest performance records of 
regional partners operating under legacy carriers' codes are not 
reflected in legacy carriers' performance reports. Travelers United and 
National Consumers League also strongly urge the Department to include 
international flights operated by code-share partners in the reporting 
mandate because joint ventures in international operations should not 
enjoy immunity from clear, understandable reporting requirements.
    Among comments submitted by carriers and carrier associations, A4A 
agrees with the Department's regulatory objective but believes there 
are equally

[[Page 76807]]

effective but less burdensome ways of achieving that objective. A4A 
states that the proposed reporting requirement for code-share flights 
would result in the submission of duplicate data by different carriers, 
create difficulty for the reporting carriers to certify and submit data 
provided by their code-share partners, and make it difficult for both 
carriers and BTS to process the newly required data. In that regard, 
A4A proposes an alternative means for the Department to collect data 
for code-share flights and attribute this data to the records of the 
marketing carriers. Under A4A's proposal, each mainline marketing 
carrier would provide to BTS a monthly list of the operating carriers 
and flight numbers of code-share flights operated by another carrier 
under the reporting carrier's code; BTS would then combine this list 
with the information submitted directly by the operating code-share 
partners to generate and publish the desired service information 
regarding the code-share flights of the mainline carrier. A4A avers 
that this approach would eliminate the prospect of two carriers 
submitting duplicate information, and BTS would have the complete data 
set earlier in the month and would not have to scrub the data to 
account for duplicate reports.
    A4A opposes including data for mainline-to-mainline code-share 
flights in a carrier's report. In support of this proposition, A4A 
points out that this type of code-share flight represents a small 
proportion of overall traffic (roughly 2%) and therefore, including or 
excluding this data will not likely change a carrier's data and ranking 
in the ATCR. Additionally, A4A states that reporting data for these 
flights would be exceptionally difficult due to lack of systems and 
data exchange. Further, A4A states that in the mainline-to-mainline 
code-share situations, the consumer purchased the ticket from a 
marketing carrier that does not operate the flight is typically very 
aware of the operating carrier brand and that the operating carrier is 
different from the marketing carrier, and if the consumer is interested 
in the other mainline operating carrier's statistics he/she can review 
reports for that carrier. Additionally, A4A states that the marketing 
carrier in the denied boarding context has no control over the 
inventory of the operating carrier if it does not have a capacity 
purchase agreement with that carrier. A4A concludes that for these 
reasons, the burden of collecting, sharing, verifying, and reporting 
data on both the operating and the marketing carriers in a mainline-to-
mainline code-share would be disproportionately burdensome relative to 
any public benefit.
    Regarding the time needed for carriers to prepare for the new 
reporting requirement, A4A argues that the implementation time proposed 
by the Department is a fraction of the time needed. According to A4A's 
estimate, if each carrier reports for itself, six months may be 
adequate for on-time performance and oversales reports; for baggage 
reporting, even using the current matrix, it will take 24-36 months. 
A4A also submitted comments opposing the Department's proposal to 
change the mishandled baggage reporting matrix contained in Docket DOT-
RITA-2011-0001 and those comments were considered in connection with 
that rulemaking.
    The Republic carriers (Republic, Shuttle America, and Chautauqua), 
Frontier Airlines, JetBlue Airways, and Southwest Airlines are all in 
support of the proposal. Republic supports the proposal to have the 
mainline marketing carriers report the service quality data for flights 
operated by their CPA code-share partners. In conjunction with its 
comments on the expansion of the reporting carrier pool, Republic 
states that the flights operated under CPAs are sold, marketed, and 
handled by the mainline carriers under their names and designator 
codes. In addition, Republic asserts that the mainline carriers also 
schedule and monitor the arrival and departure times for all flights 
operated under their codes. Therefore, according to Republic, the CPA 
operating carriers do not have possession of the customer service 
quality data required by the reports and have no ability to obtain such 
data from their marketing carriers. Frontier Airlines believes that 
this proposal will fill another data gap in the current monthly ATCR 
whereby reporting carriers only provide data for mainline operations 
but not code-share operations. Frontier further states that without 
this data the ATCR only provides a partial picture of the travel 
experience under the mainline carrier's brand. Frontier submits that 
the gap in data under the current reporting structure may incentivize 
mainline carriers to engage in certain unfair practices to boost their 
performance. In support of this proposal and the proposal to expand the 
reporting carrier pool, JetBlue states that at certain airports a 
majority of flights are sold to consumers by a legacy carrier and 
operated by a regional partner. JetBlue states that under the current 
rule, basic data, such as on-time performance, mishandled bags and 
other metrics, are not reported by either of these carriers, even 
though the consumer bought the ticket from a legacy carrier (i.e., a 
Part 234 reporting carrier). Southwest Airlines also supports the 
proposal and notes that it operates 100% of its domestic scheduled 
flights yet many legacy carriers have extensive code-share operations. 
Southwest argues that the current reporting structure may lead to 
consumer confusion or misrepresentation and hinder competition. 
Furthermore, Southwest believes that airports are also judged for on-
time performance in a market or region where airports are competing for 
customers; therefore, airport data should be complete and relevant. 
Regarding the costs and benefits of this proposal, Southwest states 
that the cost to mainline carriers may not be significant as they are 
already calculating the revenue derived from each code-share partner 
and they should be able to calculate those flights' on-time 
performance. In closing, Southwest states that if the Department 
concludes that such a requirement is too burdensome, it would support 
A4A's proposed alternatives.
    Cape Air, Delta Air Lines, and United Airlines submitted comments 
in opposition to this proposal. Cape Air asserts that it is not 
beneficial to require existing carriers to report their code-share 
flights because to include the data for smaller regional flights with 
the statistics of major carriers would skew the report by giving equal 
weight to flights that carry significantly fewer passengers, and the 
report would not reflect the experience of the majority of customers 
traveling on the reporting carrier's flights. Delta proposes that 
regional operating carriers should be required to report data for their 
flights as the marketing carriers are in a poor position to verify the 
accuracy and quality of data received from code-share partners. Delta 
also argues that dual reporting will result in duplicate data by 
different carriers. Regarding the Department's question on whether 
double counting is an issue under this proposal, Delta states that 
double counting is a problem with respect to mainline-to-mainline code-
share flights. Delta suggests that these flights should be exempted 
from reporting as the Department's primary regulatory interest on this 
issue is to collect and publish data from regional code-share flights. 
As with A4A's comment, Delta points out that these mainline-to-mainline 
flights only represent 2% of reportable flights and consumers are well 
informed that the mainline operating carrier is different from the 
marketing carrier.

[[Page 76808]]

    United Airlines also opposes the proposal to require mainline 
marketing carriers to report code-share flights data. United argues 
that the Department has provided little data or anecdotal evidence to 
support the hypothesis that the current reporting structure results in 
consumer confusion or misrepresentation. In addressing the 2011 GAO 
report and its recommendation for the Department to collect and 
publicize more comprehensive on-time performance data, United argues 
that such a goal can be accomplished by expanding the reporting carrier 
pool to include smaller carriers, as proposed in this rulemaking. 
United further argues that the GAO report only recommended additional 
on-time performance data collection and did not recommend that the 
Department expand the universe of mishandled baggage and oversales 
reporting to include code-share flights. United states that if the 
Department adopts the proposed requirement on code-share flights 
reporting, certain modifications should be made, in which the mainline 
carriers should not be responsible for reporting data for flights that 
they do not operate and the operating regional carriers should be 
reporting this data. With respect to the time a carrier may need for 
preparing for its initial report under this new reporting requirement, 
United avers that significant lead time is needed--at least 18-24 
months for on-time performance and oversales data reporting, and at 
least 36 months for the mishandled baggage reporting, assuming the 
Department adopts its proposal for reporting mishandled baggage as 
proposed in DOT-RITA-2011-0001. With respect to preparing reports for 
code-share flights following the initial report, United asserts that 
the carriers will need more than the current 15-day window. In that 
regard, United suggests that should the Department adopt the proposal 
to require marketing carriers to report data for code-share flights, 
the report deadline for this data should be expanded to at least 30 
days after the end of the month. United also opposes imposing the 
reporting requirement on ``non-branded'' (mainline-to-mainline) code-
share flights in which both operating carrier and non-operating carrier 
market and sell seats on the flights.
    All airports and airport associations that filed comments support 
this proposal. ACI-NA points out that over half of flights by the three 
largest carriers are operated by code-share partners and this change 
will provide more comprehensive information on which to base travel 
decisions without unduly burdening air carriers. AAAE asserts that 
requiring reporting of code-share performance data will have an overall 
positive operational impact, as on-time performance at large hub 
airports can differ between mainline and code-share flights. The 
commenter further asserts that including code-share flights performance 
data in the marketing carriers' reports will benefit consumers because 
consumers cannot discern the difference between mainline carriers and 
code-share operating carriers as mainline carriers manage marketing, 
ticketing, and ground operations. California Airports Council points 
out that regional carriers now provide the vast majority of scheduled 
services to California airports, and over half of all daily domestic 
flights in the United States. The organization argues that the current 
reporting requirements do not always provide accurate and comprehensive 
data to consumers as almost 50% of the domestic flights marketed by the 
nation's three largest airlines are operated by code-sharing partners. 
As an example, California Airports Council states that United Airlines' 
on-time arrival rate at San Francisco International Airport (SFO) would 
have been 6% lower in July 2014 if code-share flights were included 
compared to what was reported under the current regulation. The 
commenter states that some of its member airports serving small 
communities and SFO have a much lower on-time performance rate than the 
national average and that the relatively poor on-time performance of 
certain flights at those airports is being obscured by the current 
reporting process.
    MasFlight also commented on this proposal, stating that monthly air 
carrier information published by the Department that correctly groups 
both mainline and regional flights under the marketing carrier's code 
would be valuable from a consumer perspective and provide an apples-to-
apples comparison among airlines. However, masFlight states that such 
an objective can be accomplished in less costly ways as the 
Department's proposed method duplicates work, requires transfer of 
information among partner carriers and creates new overhead investment 
by the Department itself. MasFlight distinguishes two types of code-
share arrangements, ``regional code-share operations'' in which 
mainline carriers contract for exclusive or near exclusive capacity on 
flights operated by regional partners, and ``partnership operations'' 
in which the marketing carrier has limited inventory on the operating 
partner's flight. MasFlight supports the Department's view as stated in 
the NPRM that regional carriers' operating quality should be attributed 
to the marketing carriers' performance records but argues that only 
marketing carriers that control over 25% of the seats on a flight 
should have the operating records attributed to them.
    DOT Responses: The Department's monthly ATCR provides airline 
service quality data to the public and ranks reporting carriers' 
performance based on several categories. Three of the six categories 
ranked and reported in the ATCR--flight delays, mishandled baggage, and 
oversales--are based on data collected by BTS pursuant to 14 CFR part 
234 and part 250. The ATCR's performance tables, particularly the 
rankings, are widely accepted as important indicators of the carriers' 
quality of service, and are frequently referred to in news reports, 
industry analyses, academic studies, and consumer commentaries and 
forums. The ATCR data and rankings as reflected in news reports and 
institutional studies have a significant impact on a carrier's image 
and brand identity, which in turn has a potential effect on the 
decision making of many consumers when deciding to purchase air 
transportation. In the NPRM, we discussed the inadequate scope of 
current data collection, the most significant area being that a 
marketing carrier's flights operated by code-share partners are not 
included in the reported data. After reviewing the comments submitted 
on this subject, the Department is further convinced that it is in the 
public interest to address the discrepancy between legacy/mainline 
carriers' ATCR data that represent only 38%-55% \4\ of all domestic 
scheduled flights that are branded with the marketing carriers' codes, 
and low-cost carriers' ATCR data that often contain close to 100% of 
all flights sold by those carriers under their codes. Consequently, we 
are finalizing the proposal requiring mainline marketing carriers to 
report the service quality data for flights operated by their code-
share partners, which, in our view, will benefit consumers by providing 
them more information. Although consumer confusion is not always the 
case, we recognize that in many instances consumers may consider these 
code-share flights operated by code-share regional partners to be air 
transportation service provided by the mainline carriers to the same 
extent as the flights

[[Page 76809]]

actually operated by the mainline carriers. This is particularly true 
if, as in most cases, the mainline carriers also handle flight 
scheduling and virtually all aspects of ground operations including 
customer service related issues, such as dealing with oversales 
situations, providing denied boarding compensation, and addressing 
mishandled-baggage reports. This change will also benefit consumers 
because including performance data for these code-share flights in the 
marketing carriers' ATCR records will provide both the operating 
carriers and the marketing carriers the incentive to universally 
improve performance quality, regardless of whether the flights are 
operated by mainline carriers themselves or their code-share partners.
---------------------------------------------------------------------------

    \4\ Data based on 2015 operation information collected by the 
Department's Bureau of Transportation Statistics, Office of Airline 
Information.
---------------------------------------------------------------------------

    The Department also carefully considered the comments submitted 
regarding the difference between the ``fee-for-service'' code-share 
arrangements and the ``multiple-marketing-carrier/brand'' code-share 
arrangements. In the fee-for-service code-share arrangement, the sole 
marketing carrier contracts with the operating carrier to purchase all 
seats on the flights, sets the flight number with its own airline 
designator code, and brands the flight with the marketing carrier's 
brand name, often with the suffix of ``Express'' or ``Connection'' to 
identify that it is a regional-carrier flight. The marketing carrier is 
responsible for setting the flight schedules, in consideration of and 
in coordination with its network capacity, potential for connections, 
and overall efficiency. The marketing carrier's operation control 
center makes decisions on flight dispatching, and often handles many 
ground services such as checking in at the airport, baggage handling, 
boarding and deplaning. Passengers with service related issues will 
contact the marketing carrier's customer service center for assistance. 
The operating carrier is only in charge of the flight operation and 
onboard passenger services. In the Department's view, fee-for-service 
code-share flights are an integral part of the marketing carriers' 
networks and their performance quality is an important component of the 
marketing carriers' overall performance quality. The public will 
benefit from a complete view of a marketing carrier's performance 
record that includes the fee-for-service flights operated by another 
carrier, for which the marketing carrier has control over virtually 
every aspect of the air transportation service except the operation of 
the flight itself. Fee-for-service code-share arrangements allow a 
marketing carrier to reach regional markets without taking on expensive 
investments such as purchasing/leasing and operating aircraft or 
training and maintaining flight crews. Marketing carriers also have 
economically sound reasons to retain many ground handling tasks for 
code-share flights, such as maintaining consistent brand quality and 
fully utilizing existing ground personnel and equipment. For these 
reasons, the performance quality of these fee-for-service code-share 
flights should be attributed to the marketing carrier's ATCR records 
and rankings.
    In this final rule, we adopt the requirement for marketing carriers 
to report to the Department service quality data of domestic fee-for-
service code-share flights marketed under their codes. Accordingly, all 
reporting carriers will continue to file reports for on-time 
performance, mishandled baggage, and oversales for flights that they 
operate. Those reporting carriers that market fee-for-service flights 
operated by another carrier will be required to submit a second set of 
data for those flights. We specifically address the three reporting 
subjects as follows:
    On-time performance data: We have considered the comments by A4A 
and others about the burden to marketing carriers and determined that 
there are ways to address this issue while still obtaining the data 
that will achieve the goal of the Department. Specifically, for flights 
that are operated under the marketing carrier's code on a fee-for-
service basis by a reporting carrier, the Department will reduce the 
marketing carriers' reporting burden by requiring them to simply 
identify on a monthly basis those fee-for-service flights that they 
market. The Department's Bureau of Transportation Statistics (BTS) will 
extract the on-time performance data from the reports already submitted 
by those flights' operating carriers that are reporting carriers. For 
fee-for-service flights that are operated by a non-reporting carrier, 
it is the marketing carrier's responsibility to provide the full set of 
on-time performance data for each flight in the same manner as they 
report for the flights they operate on their own.
    Mishandled baggage and oversales data: For mishandled baggage and 
oversales data, because carriers are only required to file those 
reports in the aggregate (as opposed to filing on-time performance data 
on a flight by flight basis) we see no need to simplify the reporting 
data in the way that we did for on-time performance data. As such, the 
reporting carriers that market fee-for-service code-share flights must 
submit a second set of mishandled baggage monthly reports that contains 
the data for all reportable fee-for-service flights that they market, 
and a quarterly oversales report that contains the data for all 
reportable fee-for-service flights that they market. This final rule 
differs from the NPRM in which we proposed to have the marketing 
carriers report a second set of data that contains data for all flights 
they market, including not only the code-share flights but also the 
flights the marketing carriers operate. Requiring a second set of 
reports that contain only fee-for-service flight data potentially 
slightly reduces the burden on carriers by eliminating the need to 
prepare a report that combines data from the report on flights operated 
by the reporting carrier and data on flights operated by a code-share 
partner on a fee-for-service basis for the reporting carrier, while 
affording the Department the flexibility to add all flight data 
together, or to view flight data for reporting carriers' own flights 
and code-share flights separately.
    In contrast to fee-for-service code-share arrangements, the 
multiple-marketing-carrier code-share arrangements involve more than 
one marketing carrier for a single flight operation. Thus, under this 
type of code-share arrangement, a single flight is coded with more than 
one carrier's designator code and flight number. In the NPRM, we 
mentioned only the mainline-to-mainline code-share arrangements (in 
which two mainline carriers both market the same flight under each 
carrier's code and one of the mainline carriers also operates the 
flight) and sought comments on whether these flights should be included 
in the non-operating marketing carrier's reports. After viewing a 
snapshot of multiple-marketing-carrier code-share flights for the first 
quarter of 2015 compiled from the Official Airline Guide, part 234 
data, and the Origin and Destination Survey, we realize that several 
variations exist under the multiple-marketing-carrier code-share 
arrangements. Some of the flights are marketed under the codes of only 
two carriers, one of which operates the flight. In those situations, 
the carrier that is both marketing and operating the flight could be a 
mainline carrier (as referred to in the NPRM as ``mainline-to-
mainline'' code-share) or a regional carrier that markets a small 
number of seats on the flight. Another variation is multiple carriers 
market the flight and the operating carrier and non-operating carriers 
all sell a certain number of seats on the same flight. Yet another 
variation is the situation in which the operating carrier does not 
market the flight but

[[Page 76810]]

two or more non-operating carriers market the flight. In the 2015 first 
quarter data we reviewed, we found one flight that carried five 
different carriers' designator codes. With respect to each marketing 
carrier's share of seats on a flight, we found great variation as well. 
While a large percent of these flights have a ``main'' marketing 
carrier that sells the great majority of the seats, many flights with 
two marketing carriers split the seats approximately half and half, one 
third and two thirds, or a quarter and three quarters.
    At this point, the Department lacks information on how carriers 
share the control and responsibility for handling multiple-marketing-
carrier code-share flights under various arrangements, such as which 
carrier(s) determine the flight schedule and which carrier(s) handles 
baggage and oversales. We can only speculate that much of this 
information will depend on which carrier controls what percentage of 
seats on a given flight. We also lack information on how consumers 
perceive the multiple-marketing-carrier flights with respect to their 
brand identity. As stated in the NPRM, our primary regulatory interest 
at this time is collecting and publishing data on code-share service 
operated by the regional-carrier partners of the larger U.S. airlines. 
We recognize that this primary purpose is served by capturing the fee-
for-service flights' performance quality and attributing this 
information to the only marketing carrier's performance records. As the 
multiple-marketing-carrier code-share flights only count for a small 
percentage of the total number of code-share flights, we have decided 
that marketing carriers that are not the operating carrier will not be 
required to include those flights in their second set of reports. We 
will, however, continue to monitor how multiple-marketing-carrier code-
share arrangements evolve both with respect to their structures and 
their volumes. Should we see the need to include these code-share 
flights in any marketing carriers' performance reports, we will address 
this matter in a future rulemaking.
    Regarding Travelers United and National Consumer League's comment 
urging the Department to collect flight performance data for 
international flights, we note that the current part 234 reports cover 
only domestic scheduled flights and the current part 250 reports cover 
domestic scheduled flights and international scheduled flights 
departing a U.S. airport. To require reports for other international 
flights is beyond the scope of the NPRM.
    With respect to Consumers Union and U.S. PIRG's question on the 
soundness of the Department's proposal to limit the reporting of code-
share flights data to non-stop flights operated by code-share partners, 
we clarify that both the current reporting system and the final rule as 
adopted require carriers to report flight performance data on a per 
flight segment basis. As such, all domestic segments of a multi-segment 
direct flight are covered by the reporting requirement in the existing 
rule and in this final rule.
    With respect to the compliance date of this rule by which all 
marketing carriers that report to the Department under parts 234 and 
250 are required to file a second set of data for their fee-for-service 
code-share flights, we have fully considered the comments submitted and 
decided that it is reasonable to set the compliance date as 
transportation that takes place on or after January 1, 2018, coinciding 
with the compliance date for all reporting carriers to comply with the 
revised mishandled baggage reporting rule (Docket DOT-RITA-2011-0001). 
As with that rulemaking, we believe that choosing the first day of the 
year as an effective date will make future year-over-year comparisons 
more meaningful, and the carriers will have more than a year to work 
with their code-share partners to structure an internal system by which 
both carriers work together to compile the reports required from the 
marketing carriers. As such, all reporting carriers that market fee-
for-service code-share flights will be required to file a second set of 
data that contains those code-share flights' on-time performance and 
mishandled baggage information for the month of January 2018 by 
February 15, 2018, and to file a second set of data that contains those 
code-share flights' oversales information for the first quarter of 2018 
by April 30, 2018.

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

    The NPRM: Code-sharing is an arrangement whereby a flight is 
operated by a carrier other than the airline whose designator code is 
used in schedules and on tickets. In the NPRM, we proposed to amend 14 
CFR part 257 to codify 49 U.S.C. 41712(c) (added by Pub. L. 111-216, 
sec. 210, August 1, 2010), which requires U.S. and foreign air carriers 
and ticket agents to disclose code-share arrangements during Web site 
schedule searches ``on the first display of the Web site following a 
search of a required itinerary in a format that is easily visible to a 
viewer.'' In addition, we proposed the following interpretations of the 
statutory language: (1) Clarifying that this requirement covers any 
ticket agent ``doing business in the U.S.'' to include entities 
marketing to U.S. consumers via the internet even if the ticket agent 
does not have a physical presence in the United States; (2) clarifying 
that this requirement covers flight schedule information provided by 
carriers and ticket agents via mobile Web sites and mobile 
applications; and (3) clarifying that ``in a format that is easily 
visible for a viewer'' means the disclosure must appear in text format 
immediately adjacent to each code-share flight displayed. We sought 
comments on whether we should also specify minimum standards on the 
text size of the disclosure in relation to the text size of the 
schedule itself. DOT also proposed to explicitly state in the rule text 
that verbal disclosure of code-share arrangements must be made the 
first time a code-share flight is offered. Further, we proposed certain 
editorial revisions to the language of part 257 to reflect the 
technology changes in the airline industry's reservation and ticketing 
systems that have resulted in the predominant use of online reservation 
systems and electronic tickets.
    Comments: Five consumer rights advocacy groups submitted comments 
generally in support of the Department's proposals. In their joint 
comments, Consumers Union and U.S. Public Interest Research Group agree 
with the Department's view that the requirement of 49 U.S.C. 41712(c) 
as codified in part 257 should cover all Web sites that market to U.S. 
consumers. They also support having code-share information displayed or 
disclosed with equal prominence in all oral and written communications, 
Web site displays, printed flight schedules, and advertisements. 
Flyersrights.org states that airlines should be required to disclose 
the routes that they are flying, particularly over conflict zones. 
Travelers United and National Consumers League support the proposal to 
cover all carriers and ticket agents doing business with the U.S. 
public regardless of whether the business is domiciled in the United 
States. In their joint comments they also support the proposal to cover 
advertisements for flights to, from, and within the United States that 
are marketed to U.S. consumers. With respect to disclosures in Web site 
itinerary searches, the commenters support the proposal that 
disclosures must be immediately adjacent to each code-share flight. 
They recommend that the Department should extend the code-share 
disclosure to

[[Page 76811]]

boarding passes so passengers who are not directly involved in the 
ticket booking process will not be confused.
    A4A submitted comments on behalf of its member airlines expressing 
its concerns about the application of the regulation's requirements to 
mobile applications and noting that the statutory language does not 
expressly address mobile applications. A4A urges the Department to be 
flexible toward the application of the disclosure rule to mobile 
devices and software and suggests that instead of mandating minimum 
font sizes and requiring that the disclosure be immediately adjacent to 
the entire itinerary, the Department should prioritize all of the new 
disclosure requirements and consider how these disclosures will fit 
with one another and in different ticketing platforms. Delta Air Lines 
opposes the proposed change in rule text that specifically requires 
verbal disclosure of code-share arrangements to be made the first time 
a code-share flight is mentioned. Delta believes that the current rule 
requiring verbal disclosure to be made ``before booking 
transportation'' should be interpreted as ``at the end of the 
reservation process.'' Delta argues that the proposed language is a 
radical departure from the Department's stated policy of the past two 
decades, and that such a requirement will complicate and slow the 
reservation process, will increase reservations costs, and is contrary 
to the interests of consumers. Delta estimates that each disclosure 
statement would add approximately 5 seconds to a call and that it would 
incur $1 million additional annual recurring cost to its reservation 
department should the Department adopt the proposed language. In 
closing, Delta argues that the Department has shown no need for such a 
change and the current rule provides the appropriate notice to 
consumers at the appropriate time. Arab Air Carrier Association (AACA) 
opposes the idea that the Department should dictate code-share 
disclosure display format and font size on Web site itinerary search 
results. AACA argues that the format used by the agent should govern 
display formats and font sizes and any costs for changes to displays 
should not be passed on to carriers.
    Several ticket agents and ticket agent associations also submitted 
comments on this proposal. Travel Technology Association, American 
Express Global Business Travel, and Amadeus point out that the proposed 
rule text omitted language in the current rule that requires the 
airlines to provide code-share information to computer reservation 
systems (also known as Global Distribution Systems or GDSs) in which 
they participate. The commenters state that the Department should 
restore the language to make it clear that airlines must share code-
share information with the GDSs. With respect to code-share disclosure 
on mobile devices, Travel Technology Association and Amadeus state that 
the Department should take into consideration the limited space on 
mobile device displays, or the ever-changing ways in which information 
is disseminated to consumers through social media. These commenters 
state that they are not asking the Department to exempt these devices 
but to recognize the need for a more flexible approach. American 
Express Global Business Travel also urges the Department to carefully 
consider the impact of code-share disclosure requirements on mobile 
device platforms. TripAdvisor believes that the Department should 
exclude disclosure requirements for mobile devices less than 8 inches 
diagonally. In support of this position, TripAdvisor states that phones 
have extremely limited display space and may be further limited by the 
operating system and applications. In the alternative, TripAdvisor 
suggests that the Department should consider other disclosure methods 
for mobile devices such as disclosing on the first screen after a 
consumer selects a flight. The U.S. Tour Operators Association (USTOA) 
asserts that the Department's requirement for oral and telephone code-
share disclosure would impermissibly exceed the specific obligation 
imposed by Congress under Section 41712. The American Society of Travel 
Agents (ASTA) believes that the target of the disclosure requirement 
should be the purchasers of the air transportation instead of the 
passengers, as it stands now, because it is not always the purchasers 
who would be the passengers. ASTA states that the rule should clarify 
that the obligation of ticket agents is fulfilled when disclosure is 
made to the ticket purchaser.
    DOT Responses: The Department's current regulation on the 
disclosure of code-sharing and long term wet lease arrangements, 14 CFR 
257.5, was designed to ensure that consumers are aware of the identity 
of the airline actually operating their flight in code-sharing and 
long-term wet lease arrangements in domestic and international air 
transportation. Code-share disclosure is important because the identity 
of the operating carrier is a factor that affects many consumers' 
purchasing decisions. In that regard, we believe that codifying 49 
U.S.C. 41712(c) and strengthening the code-share disclosure 
requirements is an effective way to prevent potential consumer 
confusion. The Department has carefully reviewed all relevant comments 
on the proposed revisions of the code-share disclosure rule in 14 CFR 
part 257, and has decided to adopt the following revisions.
    Section 257.3 Definition: In the definitions section, 14 CFR 
257.3(g), we are replacing the term ``Transporting carrier'', which is 
used throughout section 257.5, with the term ``Operating carrier'' to 
refer to the carrier in a code-share or wet lease arrangement that has 
the operational control of a flight but does not market the flight in 
its own name. As explained in the NPRM, by such an amendment we are 
trying to achieve consistency with other recently amended consumer 
protection rules, see, e.g., 14 CFR 259.4(c) (code-share partners' 
responsibilities in tarmac delay contingency plans) and 14 CFR 
399.85(e) (notice of baggage fees for code-share flights). As the 
definitions in section 257.3 are arranged in alphabetical order, the 
definition for ``Operating carrier'' now is under section 257.3(f), and 
the definition for ``Ticket agent'', previously under section 257.3(f), 
is now under 257.3(g).
    Section 257.5(a) Notice in flight itineraries and schedules: In 
section 257.5(a) with respect to disclosure in flight itinerary and 
schedule displays, we are codifying the requirement of 49 U.S.C. 
41712(c) in the rule text of 14 CFR 257.5 by requiring that Web site 
itinerary search results provided by carriers and ticket agents must 
disclose any code-share arrangement on the first display of the Web 
site following such a search, in a format that is easily visible to a 
viewer.
    We are also adopting our proposed requirement that not only 
carriers but also all ticket agents doing business in the United States 
with respect to flights within, to or from the United States will be 
covered and must provide code-share disclosure. As we stated in the 
preamble of the NPRM, any ticket agent that markets to consumers in the 
United States, either from a brick-and-mortar office located in the 
United States or via an internet Web site that is marketed towards 
consumers in the United States, would be considered to be ``doing 
business in the United States.'' The requirement would cover any travel 
agent or other ticket agent that does not have a physical presence in 
the United States but has a Web site that is marketed to consumers in 
the United States and displays schedule, fare or availability 
information for flights within, to, or from the United States. We

[[Page 76812]]

believe this requirement is reasonable and appropriate given the 
expansion of e-commerce that effectively eliminated, in many cases, the 
necessity of having a physical presence in a certain country for 
providing intangible service products such as air travel reservation 
service to consumers in that country. To determine whether a Web site 
is marketed to U.S. consumers with respect to code-share disclosure 
requirements for itinerary display (in section 257.5(a)) and in airfare 
advertising (in section 257.5(c)) a variety of factors will be 
considered--for example, whether the Web site is in English, whether 
the seller of air transportation displays prices in U.S. dollars, 
whether the seller uses banner advertisements or highlights special 
deals for flights to or from the United States, whether the seller has 
an option on its Web site that differentiates sites or pages designed 
for U.S. and other consumers, and whether the Web site distinguishes 
between persons with addresses or telephone numbers in the United 
States and those outside the United States in the sales process. We 
note that this is consistent with the enforcement policy currently 
applied in connection with the Department's full fare advertising rule, 
14 CFR 399.84.
    The second requirement that we adopt here is that, for a code-share 
disclosure in an itinerary search result Web page to meet the section 
41712(c) requirement to be ``in a format that is easily visible to a 
viewer,'' the disclosure of the operating carrier must be immediately 
adjacent to the itinerary displaying the flight operated under a code-
share arrangement and in a font size that is not smaller than the font 
size of the flight identified under the marketing carrier's name and/or 
code in the itinerary display. Under this requirement, it is not 
sufficient to locate the disclosure elsewhere on the same Web page that 
displays all search results meeting the search criteria, such as at the 
very end of the Web page, with an asterisk or some other symbol next to 
each flight that has a code-share arrangement. In coming to this 
conclusion, we observed that quite often there are multiple flights 
that meet the search criteria so having code-share disclosures located 
elsewhere on the page, such as at the bottom of the page, is visually 
remote from the itineraries that include a code-share flight and would 
likely be overlooked by consumers. This is true particularly in the 
situation where the entire Web page does not fit on the screen display 
and the viewer must scroll to the bottom of the page to see the 
disclosure. In that case, we consider the disclosure located at the 
bottom of the page to not be on the ``first display'' following an 
itinerary search, as required by the statute. Accordingly, we consider 
disclosure of the operating carrier directly adjacent to each flight 
displayed with the marketing carrier's name and/or code to best meet 
our goal of clearly and prominently identifying all fights that are 
under a code-share arrangement.
    With respect to code-share disclosure in flight itinerary search 
results and flight schedule displays provided through mobile devices 
via Web sites specifically designed for mobile devices (mobile Web 
sites) or applications (apps), we appreciate the commenters' insight 
that mobile devices have limited screen display space and it is more 
difficult to fit all the information into one screen display. However, 
we also recognize that the use of mobile Web sites and apps is becoming 
more and more popular among consumers and we only expect this trend to 
continue with the development of technology that brings the convenience 
and accessibility of mobile devices to many more consumers' daily life. 
As such, it is important to ensure that displays on mobile devices 
include code-share disclosure, but it is also important to ensure that 
code-share disclosure requirements take into account the limitations of 
mobile Web sites and apps. As a compromise, we are adopting a 
simplified format for display of code-share disclosures via mobile Web 
sites and apps. Specifically, instead of disclosing the code-share 
arrangement as ``flight 123 is operated by Jane Doe Airlines d/b/a QRS 
Express,'' where ``Jane Doe Airlines'' is the corporate name of the 
operating carrier and ``QRS Express'' is the brand name of the domestic 
code-share network (e.g., American Eagle, Delta Connection, United 
Express), on mobile Web sites and apps, carriers and ticket agents will 
be permitted to simply disclose the corporate name of the operating 
carrier, e.g., ``flight 123 operated by Jane Doe Airlines.'' We believe 
this compromise is appropriate in striking a balance between 
sufficiently identifying the operating carrier while preserving some 
space on mobile displays which is more limited than space on computers. 
Carriers and ticket agents that are already displaying code-share 
disclosure information in the same manner as they are required to do on 
the desktop Web site are free to either maintain such a display format 
or switch to the simplified format as discussed above. The Department 
will continue to monitor the development of mobile Web sites and apps 
and consider amendments to this requirement as necessary.
    In connection with comments regarding the requirement for airlines 
to provide code-share information to the GDSs that they use, we 
acknowledge that the requirement was inadvertently omitted from the 
proposed rule text in the NPRM. We are adding the language back to the 
final rule text to make it clear that if an airline provides schedule 
information to a GDS, it is required to provide code-share information 
to the GDSs who can in turn provide the information to ticket agents 
and consumers.
    Section 257.5(b) Notice in oral communications with prospective 
consumers: Section 257.5(b) requires that carriers and ticket agents 
must identify the actual operator of a code-share flight to a 
prospective consumer, ``before booking air transportation,'' over the 
telephone, or through other means of oral communication. In the 
preamble of the 1999 final rule implementing this requirement, we 
explained that the phrase ``before booking transportation'' reflects 
the Department's enforcement policy: During a given encounter (phone 
call, visit, etc.) the agent or carrier may not wait until after the 
consumer has decided to make the reservation or purchase the ticket and 
disclose the code-sharing arrangement only when reading back the flight 
information. Instead, the disclosure must be made at the time that the 
schedule information is being provided to the consumer during the 
``information'' and ``decision-making'' portion of the conversation. We 
then specifically rejected a carrier's suggestion that disclosures 
should only be required during the booking process. See, 64 FR 12838, 
March 15, 1999 (emphasis added). We acknowledge that under the existing 
rule, carriers and ticket agents have a period of time starting from 
the first mention of a flight involving a code-share operation, through 
further discussion of the flights available until before the conclusion 
of the information and decision-making portion of the conversation to 
make the disclosure.
    In this final rule, we are clarifying and amending the existing 
requirement on oral disclosure of code-share arrangements by narrowing 
the time window carriers and ticket agents are allowed to provide the 
disclosure. Specifically, instead of having to make the disclosure at 
any point during the information-gathering and decision-making process, 
we are now requiring that the code-share information be provided the 
first time a code-share

[[Page 76813]]

flight is offered to a consumer or, if no such offer was made, the 
first time a consumer inquires about such a flight. In adopting the new 
standard, we believe that requiring disclosure at a certain point 
rather than during a window of time provides the regulated entities a 
clearer threshold for compliance. In addition, a clear rule that 
requires disclosure during an early stage of the process benefits 
consumers and aligns with the online display disclosure requirements of 
the statute.
    The Department views the statutory language in section 41712(c)(2) 
requiring code-share disclosure in internet schedule search to be on 
the first display as an indication of Congressional intent so such 
information will benefit consumers searching for airfares to the 
maximum extent in making purchasing decisions. Accordingly, we are 
extending this approach to code-share disclosure in oral communications 
to enhance information provided to consumers purchasing air 
transportation through telephone or in person.
    We reject some commenters' view that requiring disclosure of code-
share information the first time a code-share flight is mentioned will 
impose unreasonable cost on carriers and ticket agents. In our view, 
the cost is not unreasonable given the importance of the information. 
Delta commented that each disclosure will add 5 seconds to a telephone 
reservation call and estimated that complying with the disclosure 
requirement as proposed will add $1 million annual recurring cost to 
its reservations department. This assertion is not only unsubstantiated 
by underlying data, it also fails to consider that disclosing a code-
share arrangement for the first time right before the prospective 
customer confirms the reservation may potentially cost more to carriers 
and ticket agents because such information disclosed at the last minute 
may result in some consumers deciding to revisit all the travel 
arrangements already made and possibly begin the reservation process 
again to look for flights that are operated by a different carrier. In 
fact, according to Delta's interpretation of the current rule, a 
carrier or ticket agent may stay silent about any code-share 
arrangements included in a number of flights that a consumer can choose 
from, and only disclose the code-share nature of the one flight the 
consumer has selected for booking. This approach completely defeats the 
purpose of the code-share disclosure requirement, which is to provide 
complete and accurate material information that may affect consumers' 
decision making. It is the Department's policy determination that 
disclosing all material information about a flight early in the 
reservation process, including code-share arrangements, is the most 
efficient way to fully use the time of the reservation agents and the 
consumers.
    This section currently applies to, and, under this final rule, will 
continue to apply to, both U.S. and foreign air carriers, as well as 
ticket agents doing business in the United States, which is interpreted 
in the same manner as described in the discussion of that phrase in 
section 257.5(a) above. Consequently, a ticket agent that sells air 
transportation via a Web site marketed toward U.S. consumers (or that 
distributes other marketing material in the United States) is covered 
by section 257.5(b) even if the agent does not have a physical location 
in the United States, and such an agent must provide the disclosure 
required by section 259.5(b) during a telephone call placed from the 
United States even if the agent receives such calls at a foreign 
location.
    Section 257.5(c) Notice in ticket confirmations: We have received 
no comments on this section and we are adopting the changes to the rule 
text as proposed in the NPRM. Specifically, we retain the basic 
requirements listed in 14 CFR 257.5(c)(1) that requires written 
disclosure of code-share arrangements ``at the time of purchase''; each 
flight segment involving a code-share arrangement that has its own 
flight number must be identified individually with the disclosure 
information immediately adjacent to the flight number; and if a single-
flight-number service involves one or more code-share segments, each 
code-share segment must be identified individually with the disclosure 
information immediately adjacent to that flight if there are different 
operating carriers on the segments. We are also deleting the language 
in 14 CFR 257.5(c)(2), (c)(3), and (c)(4) that contain outdated 
references to paper tickets. As paper tickets have predominantly been 
replaced by electronic tickets, the Department considers a universal 
requirement to provide disclosure at the time of purchase through a 
notice automatically generated by the reservation systems to be 
reasonable and not overly burdensome.
    Section 257.5(d) Notice in city-pair specific advertisements: 
Paragraph (d) deals with disclosure requirements in city-pair specific 
advertisements. We are adopting the proposal in the NPRM to use the 
phrase ``written advertisement'' to replace the phrase ``printed 
advertisement,'' which in the current rule text refers to both 
advertisements printed on paper and advertisements published on the 
internet. We believe the word ``written'' is more accurate in 
describing both types of advertisements.
    In addition, we are adding a descriptive phrase--``marketed to 
consumers in the United States''--in an effort to reduce the 
possibility of misunderstanding by specifying the scope of the 
disclosure requirements on internet advertisements. This is meant to 
clarify that the disclosure requirement applies to all internet 
advertisements for flights within, to or from the United States that 
are marketed to consumers in the United States. Similar to the scope of 
the code-share disclosure requirement for flight itinerary and schedule 
displays, this approach is consistent with the intended scope of other 
air travel consumer protection rules, and ensures that internet 
advertisements marketed to consumers in the United States will be 
covered even if the hosting server for the Web site is located outside 
of the United States.
    We note that this standard will cover all advertisements appearing 
on a carrier's or a ticket agent's own Web site, as well as 
advertisements that are presented to U.S. consumers through other paid 
advertising venues on the internet (such as a news media Web site or a 
travel blog Web site) and social media Web sites (such as Facebook or 
Twitter). In the NPRM, we sought comments with regard to whether 
applying the same standard to advertisements on all of these Web sites 
is reasonable and technically practical in light of the brevity of 
these media posting formats and we received no specific comments. 
Although some social media communication formats impose a character 
limit on postings, we do not consider at this time that such limit 
would warrant a more relaxed code-share disclosure rule for city-pair 
specific advertisements through these social media formats.
    Another change proposed in this NPRM concerns the example 
disclosure statement in the rule text that a seller of air 
transportation must include in a radio or television broadcasting 
advertisement. The current sample statement includes the phrase 
``[s]ome services are provided by other airlines.'' Because the words 
``services'' and ``provided'' cover a wide range of activities, 
including ground operations, customer service, etc., they do not 
accurately convey the information we intended to relate, which was 
regarding the actual operation of a flight. Accordingly, we are 
changing the

[[Page 76814]]

sentence to read ``[s]ome flights are operated by other airlines.''
    Finally, we have decided not to adopt in this final rule the 
suggestion by Travelers United and National Consumers League to require 
carriers to provide code-share information on passengers' boarding 
passes. Passengers have access to, and likely retain a copy of their 
ticket confirmation before and during their travel even if they did not 
purchase the tickets themselves, and the relevant code-share 
information is provided in the ticket confirmation as required by the 
current rule. To add code-share information on boarding passes could 
enhance code-share disclosure but we are not sure it is necessary and 
cost effective.
    U.S. and foreign air carriers and ticket agents should be meeting 
these disclosure requirements for code-share arrangements by the 
effective date of the rule.

(4) Disclosure That Not All Carriers are Marketed

    The NPRM: In the NPRM, the Department stated that it was 
considering requiring large travel agents to disclose whether they 
display the airfares of all carriers serving any market that can be 
searched on the travel agents Web site. We stated that many online 
travel agents provide flight and fare information for a significant 
number of carriers--but not all carriers--serving a particular city-
pair market or, in some markets, online travel agents may not provide 
information regarding any carrier serving the market. Further, the 
Department stated that online travel agents do not necessarily identify 
the carriers whose schedule and fare information is or is not provided 
in search results. As a result, consumers may believe the search 
results provide all possible flight options for a particular city-pair 
market when in fact there may be other options available. As stated in 
the NPRM, the Advisory Committee for Aviation Consumer Protection 
recommended that DOT require ticket agents, including online ticket 
agents, to disclose the fact that they do not offer for sale all 
airlines' tickets, if that is the case, and to advise consumers that 
additional airlines may serve the route being searched, so that 
consumers know they may need to search elsewhere if they want to find 
all available air travel options. The Department sought comment on 
whether to create a disclosure requirement for all ticket agents or 
just large ticket agents, and if so, in what manner. Specifically, the 
Department asked for comment on whether to require ticket agents to 
prominently note on their Web sites that not all U.S. air carriers and 
non-U.S. air carriers serving the United States are displayed on the 
Web site or marketed by the travel agent or to prominently display a 
statement in connection with a search of a particular city pair that 
not all airlines serving those cities are displayed on the Web site or 
marketed by the travel agent. The Department also sought comment on 
whether to require online travel agents to specifically identify all of 
the airlines that it markets.
    Comments: Among airline commenters, some support the requirement to 
identify carriers marketed, while others oppose it. The Arab Air 
Carriers Organization, and some carriers, including Frontier, JetBlue, 
Southwest, and Spirit, support the proposal to require disclosure 
regarding carriers marketed. While A4A does not object to the 
requirement, it states that the Department should not require ticket 
agents to list carriers not sold. Spirit, in contrast, comments that 
the Department should require ticket agents to identify carriers not 
sold and the requirement should apply to all ticket agents, regardless 
of size. Spirit further argues that disclosure should be provided on 
every search page and, in support of its position, asserts that the 
lack of such a disclosure would disproportionately harm price-sensitive 
consumers who were not given the opportunity to learn about Spirit 
fares. Southwest states that consumers would benefit from knowing that 
search results may not include all possible flight options for a city-
pair and notes that the information may prompt consumers to visit Web 
sites such as Southwest.com. Southwest proposes that all ticket agents, 
regardless of size, should be required to include a generic statement 
in search results notifying consumers that the results only include 
certain carriers with which the ticket agent has an agreement. Frontier 
comments that some large travel agents create the impression that they 
market and sell air transportation of all airlines when in fact they do 
not; consumers are not informed that not all carriers are offered and 
therefore the fare or service options being presented are limited.
    Consumer advocacy organizations were also divided on this issue. 
Consumers Union and U.S. PIRG support the requirement and state that 
ticket agents should disclose all airlines that serve a particular 
route, and which of those airlines are included in the ticket agent's 
marketing. Travelers United and National Consumers League (NCL) oppose 
the requirement, stating that the requirement would not result in a 
consumer net benefit, citing Web site clutter, among other things.
    Ticket agents and their associations generally oppose requiring 
ticket agents to disclose carriers marketed. Travel Tech comments that 
no consumer harm that resulted from the lack of such a disclosure 
requirement has been shown. Travel Tech states that ``consumers are 
sophisticated enough to realize that not all carriers may be 
displayed'' and points out that, for example, Southwest advertises 
extensively that its fares are available only on its own Web site. 
Meanwhile, the Department's Office of Aviation Enforcement and 
Proceedings (Enforcement Office) has issued guidance (August 19, 2013, 
Display of Search Results on Ticket Agent Web sites) stating that 
Online Travel Agents (OTAs) should not use terms in search results 
suggesting that no flights exist that match the criteria provided by 
the consumer to search for and compare flight options from multiple 
carriers when flights may be available on carriers that the OTA does 
not market, so according to Travel Tech no new requirement is 
necessary. Travel Tech members Sabre and Travelport each filed separate 
comments opposing a requirement to disclose that not all carriers are 
marketed. Sabre states that such a requirement is unwarranted and 
unjustified while Travelport states that there is no evidence that the 
requirement will cure any particular harm and that consumers are 
already aware that not all carriers distribute through online travel 
agencies.
    ASTA also opposes the requirement, stating that there was no 
evidence of consumer confusion. Several individual travel agents oppose 
the requirement for the same reason and note that airlines are not 
required to disclose to consumers that travel agents may offer a 
greater variety of airlines and destinations from which to choose. ASTA 
further comments that if implemented, the requirement should be a 
generalized statement indicating that some carriers' services may not 
appear in search results.
    USTOA states that the requirement is unnecessary as the issue has 
been addressed through enforcement policy; however, if a regulation 
will replace the enforcement policy, USTOA states that it would support 
a requirement to include a statement on ticket agents' Web site 
displays stating that the displayed schedules ``may not reflect all 
carriers in the market.'' BCD Travel comments that it is unnecessary 
for corporate travel companies to disclose which carriers they market 
because these agents are incentivized to meet corporate clients' needs. 
Orbitz objects

[[Page 76815]]

to a requirement that applies only to large travel agents instead of 
all ticket agents and states that the Department's concern that 
consumers may mistakenly believe that they are provided with all 
possible flight options is not supported by the evidence. Orbitz 
further states that maintaining an accurate list of all of the hundreds 
of airlines it markets would require regular updates and would not be 
useful to consumers as most of the airlines listed would not serve the 
city-pair the consumer is searching. Skyscanner comments that it would 
not be feasible to display full lists of carriers that are featured on 
a particular flight search tool because markets are changing regularly 
and any list would quickly become out of date or inaccurate. According 
to Skyscanner, such a requirement would likely result in the display of 
inaccurate information to consumers, ``despite the best efforts and 
intention'' of the site displaying the information. Priceline comments 
that the requirement might make sense for ``consumer-facing'' Web sites 
but should not apply to corporate travel Web sites. Carlson Wagonlit 
Travel states that if such a requirement is implemented, it should 
apply to all ticket agents, regardless of size, and should be limited 
to a list on the ticket agent's Web site for consumers and should not 
apply to corporate travel. American Express Global Business Travel 
echoes Travel Tech's comments, stating that no specific consumer harm 
has been shown and ``consumers certainly are sophisticated enough to 
recognize that some carriers' services may not be available through a 
particular ticket agent distribution channel.''
    DOT Response: The Department has carefully considered all of the 
comments and has decided not to adopt a requirement that ticket agents 
provide disclosure on their Web sites that not all carriers are 
marketed on their site, if that is the case. The Department recognizes 
that some sophisticated consumers may realize that not all airlines are 
marketed on all online travel agents without disclosure by the travel 
agents, but not all consumers have the same level of sophistication 
regarding the marketing of air travel. The Department maintains the 
view that the information is important and should be provided to 
consumers by ticket agents. However, we are persuaded by commenters 
that a disclosure requirement resembling any of the alternatives on 
which we sought comment is not appropriate at this time. We are 
concerned that a general disclosure that not all carriers are marketed 
on a particular Web site may be confusing to consumers. For example, a 
general disclosure may result in wasted search time for some consumers 
whose particular search results do in fact include all carriers and 
flights that service a particular route/city-pair, but who continue 
searching because the disclosure indicates that not all carriers are 
marketed. In addition, by the time the consumer decides to purchase a 
flight option that was displayed in the initial search, that particular 
fare or flight option may no longer be available.
    Regarding a more specific disclosure for each individual city-pair 
searched, the Department is concerned that this requirement may be 
overly burdensome for ticket agents. Ticket agents often market the 
flights of several hundred carriers serving the United States. A ticket 
agent may not have all flight information for a particular carrier and 
the information could change without notice. For example, a carrier may 
begin serving a destination or exit a particular market without 
notifying ticket agents; may provide service only seasonally; or may 
temporarily stop serving a particular city. Accordingly, the Department 
has determined that it will continue to review this issue and may 
address it in a future rulemaking if appropriate. In addition, the 
Department will consider appropriate consumer outreach and education. 
For example, the Department's Enforcement Office may provide 
information to consumers that not all carriers are marketed on travel 
agent Web sites through its consumer publications like ``Fly Rights'' 
or consumer forums. These Department actions may be in addition to or 
instead of engaging in a rulemaking to impose a requirement on ticket 
agents to disclose airlines that they market.

(5) Prohibition on Undisclosed Airfare Display Bias by Ticket Agents 
and Carriers

    The NPRM: An electronic airline information system (EAIS) is 
defined in the NPRM as a system that combines air carrier or foreign 
air carrier schedule, fare, rule, or availability information for 
transmission or display via the internet or other communications system 
to air carriers or foreign air carriers, ticket agents, other business 
entities, or consumers. In the NPRM, the Department proposed 
prohibiting any undisclosed bias in any EAIS display of multiple 
carriers' schedules, fares, rules, or availability. The regulation 
would require any carrier or ticket agent that provides electronic 
display of airfare information to provide unbiased displays or disclose 
the biases in the display. It would apply to all electronic displays of 
multiple carriers' fare and schedule information, whether the display 
is available on an unrestricted basis, e.g., to the general public, or 
is only available to travel agents who sell to the public. The 
requirement to provide unbiased displays or disclose biases in the 
display would also apply to electronic displays used for corporate 
travel unless a corporation agrees by contract to biases in the display 
used by its employees for business travel. The requirements would apply 
to displays provided in response to airfare inquiries made by a 
consumer for a particular itinerary or airfare inquires made by a 
travel agent or other intermediary in the sale of air transportation 
for a particular itinerary. Although the regulation would require 
carriers and ticket agents that provide airfare information 
electronically to display the lowest generally available airfares and 
most direct routings that meet the parameters of the airfare search 
request, it would not prohibit displays that included biases selected 
by the consumer or the user of the display, such as a preferred 
carrier. The only prohibition would be on undisclosed biases. We sought 
comment on whether the prohibition on undisclosed display bias should 
be limited to airfare and routings and on the costs and benefits of 
such a prohibition.
    In addition to the proposal regarding undisclosed display bias, the 
Department requested comment on whether to require any ticket agent 
that decides to bias its displays and disclose the existence of bias to 
also disclose any incentive payments it is receiving for engaging in 
such a display bias. We sought comment on how such disclosure should be 
provided and what kind of disclosure of the existence of incentive 
payments would be most helpful for consumers.
    Existing Guidance: On February 1, 2011, and March 4, 2011, the 
Department's Enforcement Office issued guidance that stated that 
undisclosed display bias in search results for airline service would be 
considered by that office as an unfair and deceptive practice because 
it prevents consumers and travel agents who advise consumers from 
obtaining accurate and complete information on schedules and fares. 
Although the guidance was not mentioned in the NPRM, several commenters 
referred to it in their comments. The guidance provided that the manner 
of displaying itinerary information including carrier, lowest fares, 
departure times, arrival times, trip duration, or airports, must not 
favor or disfavor a particular carrier unless the bias is clearly and 
conspicuously

[[Page 76816]]

disclosed. The guidance was sent to ticket agent trade associations, 
major online travel agents, and the GDSs that provide fare, schedule, 
and availability information to ticket agents that market or sell air 
transportation to consumers. The guidance was also posted and remains 
available on the Enforcement Office Web site.
    Comments Regarding Disclosure of Bias: Consumer advocacy groups 
Consumers Union, US PIRG, and FlyersRights.org all support the 
Department's proposal to prohibit undisclosed display bias in search 
result displays. Consumers Union and US PIRG state that consumers 
should know ``whether the scales are being artificially tilted in favor 
of certain carriers.'' Farelogix, a third party technology provider to 
the airlines, also supports the prohibition, arguing that bias can 
cause significant economic damage to an airline and block third parties 
from creating innovative solutions for the industry. Farelogix comments 
that it has experienced the negative impact of undisclosed biasing 
directly. A4A supports the proposal as it applies to ticket agents but 
states it should not apply to carrier Web sites, commenting that in the 
past, for example, in the Computer Reservations System (CRS) 
rulemaking, the Department assumed the public was aware that a carrier 
would favor its own services on its own Web site over other carriers' 
services.
    Several airlines also support the proposal, including Frontier, 
JetBlue, and Spirit. Frontier states that it supports the display bias 
rule because if ticket agents bias they do so in favor of large legacy 
airlines that have greater bargaining power than smaller carriers and 
are able to pay for display bias, and that this creates an unfair 
disadvantage to smaller carriers and to consumers. Spirit comments that 
undisclosed bias distorts the air travel market and subjects consumers 
to unfair and misleading information when travel agents and consumers 
are not made aware that their search results are often tailored to 
favor certain carriers due to undisclosed contract arrangements or 
payments. Spirit states that if a carrier is not shown or incentives 
are provided to the ticket agent for more prominently displaying a 
particular carrier, disclosure is important to allow consumers and 
travel agents to make informed decisions. United does not support or 
oppose the proposal but states that the rule text does not clearly 
reflect the Department's intent as stated in the preamble of the NPRM 
regarding disclosure of biasing on corporate travel Web sites, i.e. 
that disclosure is only required to the extent the bias is not agreed 
to by contract regarding corporate travel. Lufthansa urges the 
Department to exclude from this proposed rule airline and airline-
alliance Web sites, as well as direct connections between ticket agents 
and airlines' internal reservations systems. Lufthansa argues that 
``consumers and ticket agents intuitively understand that an airline 
`biases' its Web site and internal reservations systems to prioritize 
and promote its own services and those of its code-share and alliance 
partner airlines. Consumers and ticket agents instinctively know that 
they will not be able to access fares and schedules of other airlines 
that compete against or are not aligned with the airline whose Web site 
(and, in the case of ticket agents, internal reservations systems) they 
access.'' Further, according to Lufthansa, there is no need for DOT to 
implement and apply anti-biasing rules for corporate travel 
arrangements that are contractually entered into by sophisticated 
entities that are well aware that the fares and schedules offered 
through their business travel programs are limited to certain airlines 
and do not provide the full range of available fares and schedules 
offered by other airlines that do not participate in a particular 
program.
    Delta also supports requiring disclosure of any bias in a ticket 
agent's display to the general public. However, Delta opposes 
regulations that would change existing business practices in the 
display algorithms used by agents, including GDSs, that do not bias 
based on carrier identity. Delta also opposes biasing restrictions on 
individual carrier Web sites. According to Delta, a customer shopping 
for tickets on delta.com ``knows and expects that Delta is marketing 
Delta flights in a manner advantageous to Delta over other carriers, 
but that otherwise best meets the customer's needs and search 
parameters.''
    Several commenters, including ticket agents and ticket agent 
associations, oppose the proposed regulation prohibiting undisclosed 
display bias. American Express Global Business Travel states that there 
is no need for rules prohibiting undisclosed display bias because the 
guidance issued in 2011 is sufficient, and that if any prohibition is 
adopted it should not cover corporate travel. USTOA also opposes the 
proposed regulation, stating that the existing guidance is sufficient 
and new regulation is not necessary, and noting that the Department 
decided against such a regulation in the CRS rulemaking. BCD travel 
also opposes the regulation, stating that it is not needed and should 
not apply to corporate travel arrangements where display bias is 
included in contractual arrangements. Carlson Wagonlit Travel also 
opposes the proposed regulation, noting that displaying information in 
a particular order is one of the services travel agents offer, and it 
inherently involves bias, which may be beneficial, and should be 
permitted, particularly in corporate travel which involves preferred 
vendors and other similar corporate programs.
    Travel Tech states that imposing such a disclosure requirement 
would ``micromanage airfare displays, constituting regulatory overkill 
that cannot be justified in the absence of any evidence of a 
significant problem warranting such market intrusion.'' Travel Tech 
states that the existing guidance is sufficient to adequately ensure 
transparency in the disclosure of carrier preferences in ticket agent 
displays, and it would not object to a simple rule applicable to any 
ticket agent that would require appropriate disclosure of the use of 
carrier identity as a ranking factor in ordering displays. Travel Tech 
identifies several specific concerns with the proposed rule text 
itself. Regarding ranking flights, the organization asserts that as 
drafted, the requirement to identify the lowest airfare including all 
mandatory fees but not including fees for optional services would not 
allow for sequential listings or ranking options by total cost 
including fees for optional services. As such, according to Travel 
Tech, significantly less desirable flights may be the first flights 
displayed, even if they involve circuitous routings, very long 
layovers, or two separate tickets which prevent checking through bags, 
or other drawbacks. Travel Tech's comments also indicate it is unclear 
how the rule would apply to queries for schedule and availability that 
don't seek fare information.
    Regarding the ordering criteria for identifying flights, Travel 
Tech states that the same ordering criteria should not be required for 
all markets because different criteria may identify flights that meet 
consumer needs in different markets (e.g., international, U.S. short 
haul, U.S. long haul). Regarding differentiating carriers, Travel Tech 
objects to the requirement to treat ``listed carriers'' that have no 
contractual relationship with the GDS or OTA creating the display the 
same as ``participating carriers'' that enter into a contract with a 
GDS or OTA. Travel Tech notes that a GDS or OTA may list schedules and 
fares (but not availability) of some carriers that are not 
participating carriers as a service to their users, even though the GDS 
or OTA does not sell the listed carriers'

[[Page 76817]]

services. Travel Tech also comments that the proposed rule text seems 
to create a violation in the event of an inadvertent but inevitable 
data error if a GDS or OTA does not include in its system all 
information provided by a carrier or inadvertently publishes inaccurate 
information, subjecting it to the risk of a penalty. In response to the 
question of whether any rule regarding display bias should be limited 
to airfare and routings, Travel Tech states that such limitation is 
appropriate.
    Finally, Travel Tech argues that there is no basis for applying a 
prohibition on undisclosed display bias to corporate booking tools. 
Amadeus also opposes this provision, commenting that the undisclosed 
display bias prohibition is not needed. According to Amadeus, the 
guidance on this matter issued by the Department's Enforcement Office 
in 2011 is sufficient. Amadeus further states that if undisclosed bias 
is prohibited, the rule should follow the 2011 guidance instead of the 
elaborate proposed rule that creates excessive regulatory intrusion 
into the market. As an example, Amadeus states that if it followed the 
proposed rule, flights with excessive connections or layovers would be 
displayed but the vast majority of consumers would find them 
unreasonable or unattractive. Travelport also opposes the prohibition, 
stating that the Department has not proven the inadequacy of the 
existing Enforcement Office guidance. Travelport states that the 
Department should ``outline the problem to be solved by additional 
regulation and allow the industry to examine the evidence.''
    Skyscanner argues that a display bias prohibition is not beneficial 
to consumers, because it is incorrect to assume that ``all consumers 
are interested in is price.'' To illustrate its point, Skyscanner 
compares flight search tools to other shopping search tools available 
on the internet that allow consumers to sort display results in a 
variety of ways. Skyscanner states that ``[s]ome display bias is 
essential for metasearch sites to ensure that served content is 
relevant to consumers.'' For example, Skyscanner points out that a 
consumer searching for a flight may be interested in criteria such as 
the travel duration, the number of transfers, the number of complaints 
against a carrier, whether the carrier can process a booking on the 
device being used by the consumer, and whether the route or carrier has 
been popular with other travelers. Skyscanner argues that metasearch 
algorithms are designed to provide the user with a high-quality 
snapshot of the products available, taking their chosen criteria into 
account. Skyscanner explains that bias describes the technical 
processes that allow consumers to benefit from combining a large data 
pool with their own preferences and notes that if price was consumers' 
only concern, metasearch entities would not spend time, money, and 
expertise developing what they find to be effective ways to provide 
search results. The Mercatus Center at George Mason University 
(Mercatus) also opposes the proposed requirement for similar reasons, 
stating that travel agencies compete by offering their best judgment to 
consumers but the proposed rule may limit travel agencies' ability to 
continue to provide such judgement. Mercatus concedes that consumers 
may be harmed if they believe a particular site provides unbiased 
information on all of the options that are available but states that 
``most consumers shop several sites for airfare.''
    Comments Regarding Disclosure of Incentives: Consumer advocacy 
groups Consumers Union and US PIRG favor disclosing incentive payments. 
Spirit Airlines also comments that disclosure of all companies 
providing incentives and a summary of the incentives should be 
required. However, many commenters oppose requiring disclosure of 
incentive payments. ASTA comments that any language at all regarding 
incentive payments would create a negative impression to consumers and 
would brand travel agents as untrustworthy. Travel Tech also opposes 
requiring disclosure of travel agency incentives received from 
airlines. Amadeus comments that a requirement to disclose incentive 
payments should not include GDS payments to ticket agents because the 
information is of no value to consumers and has little or no 
relationship to any biasing. BCD Travel acknowledges that it receives 
incentives and states it would be detrimental to industry to disclose 
specifics. Carlson Wagonlit Travel comments that disclosure of 
incentives would provide no clear benefit and would confuse and 
distract consumers. USTOA acknowledges that tour operators receive 
incentives that may influence the information they provide but states 
it would be detrimental to industry to disclose specifics and proposes 
that if there is any disclosure requirement, it should be general and 
not provide details of the incentives. Several smaller travel agencies 
also oppose the proposed requirement, arguing that a travel agent's 
first priority is its clients and that incentives always serve the 
interest of the clients by allowing an agent to provide cheaper service 
for a flight on a given airline, so to force disclosure of incentive 
payments would only serve to demonize what is otherwise a positive 
thing for consumers, agents, and airlines.
    DOT Response on Undisclosed Biasing: After reviewing and carefully 
considering the comments, the Department has decided to prohibit 
certain undisclosed bias in electronic displays that include 
combinations of multiple carriers' schedules, fares, or availability 
information, if the display is marketed to U.S. consumers or to ticket 
agents that market to U.S. consumers. In response to comments regarding 
the alleged overly prescriptive nature of the proposed rule and 
potential unintended consequences of adopting the rule as proposed, the 
Department has revised the rule text to clarify that entities still 
have flexibility to provide the type of routings consumers are 
interested in when purchasing air transportation. The rule only applies 
to undisclosed display bias by ticket agents or carriers, not bias 
requested by the users of the system. For example, if a user filters 
for a particular carrier, schedule, or other criteria, and certain 
airlines do not provide any flight options that meet that criteria, and 
are consequently not displayed in search results, the Department does 
not consider that to be a bias that must be disclosed. Only biasing by 
ticket agents or carriers based on carrier identity must be disclosed--
i.e., a system presents flight options that favor or disfavor 
individual carriers.
    As discussed in greater detail below, we have decided to prohibit 
any undisclosed display bias favoring particular carriers over others 
in search results because we agree with commenters noting that 
undisclosed bias distorts the air travel market and potentially harms 
consumers that are not aware of the biasing. This rule will apply not 
only to ticket agents' Web sites but also to airline and airline 
alliance Web sites. Our rule also applies to corporate booking tools as 
well as displays available to the general public, but is limited to 
undisclosed bias that is not based on contractual arrangements.
    Undisclosed display bias prevents consumers and travel agents who 
advise consumers from realizing that they are not receiving neutral 
information on schedules and fares and recognizing that they may have 
to look elsewhere, or take additional steps on the Web site, to find 
more accurate or complete information. Undisclosed display bias in 
flight search results may mislead consumers who rely on that flight 
search tool for neutral, complete and correct information, and result 
in their not looking on different Web sites or not taking additional 
steps

[[Page 76818]]

on the Web site to find flight options that better meet their 
preferences. Undisclosed display bias by a GDS may mislead travel 
agents who rely on the information provided by GDSs, which in turn 
causes misleading information on available service options being passed 
on to a significant number of consumers who rely on their travel 
agents. Undisclosed display bias on an airline or airline alliance Web 
site may lead a consumer to book on that Web site when a flight on, for 
example, a code-share partner's Web site, may better suit the 
consumer's needs. For example, an airline might bias its displays to 
favor flights that it operates over flights operated by a code-share 
partner even though the flights operated by the code-share partner may 
have a lower price or schedule that better suits the consumer. When 
travel agents or consumers are unaware that information they thought 
was neutral is, in fact, biased, they may decide to book relatively 
inferior flights when other flights might better meet those travelers' 
needs, for example, in terms of price or scheduling.
    In connection with biasing that results from business arrangements 
or business disputes, we recognize that commercial harm to airlines 
resulting from biasing may be a business matter but it also harms 
consumers if it is not disclosed. Further, to the extent undisclosed 
biasing is used to hinder competition in the distribution market, it 
potentially stifles innovation that would provide consumer benefits. 
Accordingly, the rule generally requires entities that operate systems 
displaying fare, schedule or availability information for multiple 
carriers to display the information for each carrier equitably with 
that of all other carriers marketed on that system. In the alternative, 
entities that wish to alter their displays to favor or disfavor any 
particular carrier are free to do so if the fact that a carrier is 
favored or disfavored is disclosed and there is no misrepresentation 
that the information is being displayed in a neutral manner.
    To the extent a carrier or ticket agent operating an EAIS engages 
in display bias based on carrier identity, it must clearly and 
conspicuously disclose that fact. This applies to both ticket agents 
and carriers. For example, if a ticket agent favors or disfavors a 
particular carrier, that bias must be disclosed. Similarly, in 
connection with systems operated by carriers or carrier alliances, if 
carrier-identity is a factor in how flights are displayed, that must be 
disclosed. The notice about display bias may not be in an obscure 
location as that would not provide sufficient notice to avoid consumer 
harm. Accordingly, if there is carrier identity bias, we require that 
the notice appear prominently at the top of the first search result 
display presented to the user in response to the user-selected search 
criteria. The notice must specifically state that the order of flights 
is not neutral with respect to carrier identity.
    Response to Display Issues Identified in the Comments: Some 
commenters identified rule text that appeared to impose requirements 
that would result in unintended consequences. For example, concerns 
were expressed that the proposed rule text would require an EAIS to 
display the lowest generally available airfare without allowing 
screening out of certain flight options based on unreasonably lengthy 
or circuitous routings or similar undesirable characteristics. Concerns 
were also expressed that the requirement to rank flights by the lowest 
airfare may not be the best ranking method for consumers as it may be 
more beneficial to rank by total cost which would include not only 
mandatory fees but also fees for optional services. We found these 
comments to be persuasive and have made changes to the final rule. This 
final rule does not contain a requirement for an EAIS to rank by the 
lowest generally available airfare, or any other specific parameter. 
Instead, it requires that each EAIS display information in an objective 
manner, based either on search criteria selected by the user (e.g., 
lowest fare, lowest cost, date and time of travel, class of service, 
stopovers, total elapsed time or duration of travel, number of stops, 
limitations on carriers to be used, particular airport(s), number of 
passengers, etc.) or default criteria established by the carrier or 
agent.
    Ranking Flight Options and Innovation in Displays: Regarding the 
ranking of flights, the rule requires systems to identify the flight 
options that meet the parameters set by the user of the system without 
ranking based on any undisclosed bias based on carrier identity. 
However, systems are not precluded from setting default display 
parameters that are not deceptive or offering users the option to 
choose a variety of display methods within those parameters. Just as 
systems already offer consumers many options, such as displaying only 
non-stop flights in search results, or ranking flights by cost, or 
elapsed time, or departure time, systems are not precluded from 
offering additional options for displaying search results. Similarly, 
as stated above, if a consumer specifies a particular carrier or 
carriers in search parameters, displaying responsive search results 
would not be considered undisclosed bias. Many commenters on the 
various proposals in this rulemaking have emphasized the importance of 
allowing innovation in the display of airfare and ancillary service fee 
information. We agree that innovation is beneficial to consumers and 
encourage systems to offer a variety of options for search result 
displays. Based on comments in this rulemaking and on public statements 
from a variety of industry participants, we understand that many 
airlines and ticket agents are already working on providing more 
options for consumers to choose in displaying search results. We 
anticipate in the future that systems will continue to add more sorting 
mechanisms that allow consumers to choose flight ranking options based 
on their specific need, for example, fare plus cost of specific 
ancillary services chosen by the consumer.
    We agree with Skyscanner that consumers will benefit from 
innovations that allow different entities to improve and expand on how 
to respond to consumer searches and to display search results. We 
encourage such innovation and note that the requirement to disclose any 
biases that are built into the system does not preclude creativity in 
designing displays. For example, existing flight search tools are 
already providing various display formats and sorting mechanisms that 
allow consumers to choose how they want their flight options 
prioritized.
    This is also relevant to Skyscanner's comment that consumers may be 
interested in a variety of factors when selecting a flight and that 
flight search tools offer a ``snapshot'' of options. We agree that 
consumers consider a variety of factors when searching for a flight and 
anticipate that flight search tools will continue to evolve, offering 
more and more information and ways to sort flight options. However, 
metasearch entities do not market flight search tools as offering a 
``snapshot,'' they market themselves as a neutral source of as much 
flight information as is available on the internet. Consumers should 
know about the factors that may impact or limit what flight information 
is displayed and how it is displayed.
    Ordering Criteria; Listed and Participating Carriers: Travel Tech's 
comments also state that the proposed rule text appears to require the 
same ordering criteria for identifying flights regardless of the market 
(e.g., international, U.S. short haul, U.S. long haul). We agree that 
as long as the criteria are not based on carrier identity, different 
criteria may better identify

[[Page 76819]]

flights that meet consumers' specific needs depending on the market. 
Accordingly, we are not requiring that the same ordering criteria be 
used for every market. Rather, the search results should match the 
user-selected criteria and disclose any bias based on carrier identity. 
Regarding differentiating carriers, Travel Tech objects to the 
requirement to treat ``listed carriers'' (carriers that have no 
contractual relationship with the GDS or OTA) the same as 
``participating carriers'' (carriers that enter into a contract with a 
GDS or OTA). Travel Tech suggests that if an OTA or GDS chooses to 
provide a ``listed'' carrier's fare and schedule information then there 
should be no requirement to display that carrier's flight information 
equitably with the information of participating carriers. We agree that 
there is no requirement to display a non-participating carrier's flight 
information. However, if an agent chooses to display a non-
participating carrier's flight information, then it must display it 
equitably or disclose that the information is not being displayed 
equitably because otherwise consumers could be misled or deceived into 
thinking that the information is being displayed in a neutral manner. 
Travel Tech also noted that in many cases the OTA or GDS does not have 
availability information for carriers that are only listed and not 
participating. To the extent ticket agents provide fare and schedule 
information without availability information, this rule requires that, 
absent disclosure about bias, the information must be provided in a 
manner that does not favor or disfavor a particular carrier. Finally, 
Travel Tech commented that ``[i]f adopted as proposed, the rule could 
encourage GDSs and OTAs to simply remove all information about non-
participating carriers from their systems, another perverse result that 
would clearly not benefit consumers.'' It is our understanding that 
GDSs and OTAs make a business decision to provide consumers with non-
participating carrier flight information even though those carriers do 
not provide all fare, schedule, and availability information and do not 
pay the same fees to GDSs or OTAs as participating carriers. To the 
extent that entities such as those represented by Travel Tech determine 
that they have a greater interest in not providing non-participating 
carriers' information rather than disclosing it in an unbiased manner 
or disclosing that the information is not provided in an unbiased 
manner, that is a business decision that must be made by each entity. 
However, we are not persuaded that this is sufficient reason to allow a 
GDS or OTA to bias displays in a manner that ranks differently those 
carriers that do not ``participate,'' or pay fees to the GDS or OTA, 
without disclosing that information to consumers.
    Biasing Based on Carrier-Identity on Airline and Airline Alliance 
Web sites: Regarding airline and airline alliance Web sites' displays 
that incorporate the flights of more than one carrier, we also believe 
consumers are entitled to be informed of any biasing that occurs in 
those displays. We note that most, if not all, alliance and carrier Web 
sites that display flight options for alliance or code-share flights 
already provide information regarding the carriers that are marketed on 
the Web site. The additional disclosure that would be necessary would 
be a statement regarding the manner in which the display favors or 
disfavors particular carriers. For example, if an alliance Web site 
marketed to U.S. consumers biases its displays to favor carriers that 
operate flights to and from the United States over carriers that only 
market flights to and from the United States that are operated by 
another carrier under the code of the marketing carrier, then that fact 
should be disclosed to consumers.
    Corporate Booking Tools: We disagree with the comments that there 
is no basis for applying a prohibition on undisclosed display bias to 
corporate booking tools. To the extent that bias is built into 
corporate booking tool displays pursuant to a contractual agreement 
that makes clear the parameters of the displays, we would not consider 
such bias to be biasing that must be disclosed to users of the system 
and agree that there is no need to disclose that information on every 
display of search results. However, if changes to a corporate booking 
tool display were made by the operator of the system so that flight 
options were biased based on carrier identity, we would consider that 
to be a violation of the rule and an unfair or deceptive practice 
unless the bias based on carrier identity was disclosed as required by 
the rule. For example, if an entity operates a corporate booking tool 
under a contract with a corporation, and the entity operating the tool 
is having a business dispute with a particular carrier, that entity may 
not remove the carrier's flights from search results or place them in a 
less favorable location in the search results, independent of any 
contractual terms to favor or disfavor particular carriers in that 
particular corporate booking tool, without providing disclosure to the 
users of the booking tool in the manner required by this rule. Business 
entities benefit from the requirement for biases to be disclosed as 
they may have policies that require selection of best available fare, 
or other financial, recordkeeping, or auditing requirements. Further, a 
business entity that does not have contracts providing benefits or 
discounts on a particular carrier may still rely on corporate 
management tools to book business travel as well as to integrate cost 
and booking data for its travel into its own systems. Those entities 
are also entitled to be informed if the flight options being displayed 
reflect bias based on carrier-identity.
    Incentives: We have decided not to require the disclosure of 
information regarding incentives. We have determined that the 
prohibition on undisclosed biasing is sufficient to protect consumers 
without mandating the disclosure of specific information about 
incentive payments. Regardless of the reasons for the biasing, whether 
due to undisclosed contract arrangements, commercial disputes, or 
financial incentives, consumers should be made aware when a display is 
not neutral with respect to carrier identity. Being informed that 
carrier identity is a factor in the display of flight options, 
regardless of underlying reason, likely would be useful to consumers. 
However, we do not see a benefit to requiring disclosure of incentives 
such as specific commercial arrangements or dollar amounts when there 
are a variety of other reasons, in addition to incentive payments, that 
may lead an entity to bias its display. We believe providing 
information on incentives might result in consumer confusion regarding 
the significance of the information and not necessarily provide 
information that would be helpful in making decisions about air travel 
purchases. We also agree with commenters that it would be difficult to 
define how and what types of incentives should be disclosed. Further, 
we acknowledge that disclosure may touch on sensitive commercial 
information. As such, this final rule does not require the disclosure 
of incentive payments but simply prohibits undisclosed biasing based on 
carrier identify.

(6) Amendments/Corrections to Second Enhancing Airline Passenger 
Protections Rule and Certain Other Provisions

a. Standard Applicable to Reportable Tarmac Delays Under Part 244
    In 14 CFR part 244, the Department requires U.S. and foreign air 
carriers to file Form 244 ``Tarmac Delay Report'' with the Department 
with respect to any

[[Page 76820]]

covered flight that experienced a lengthy departure or arrival delay on 
the tarmac at a large, medium, small, or non-hub U.S. airport. A 
``lengthy'' tarmac delay for purposes of this report is defined in part 
244 as any tarmac delay that lasts ``three hours or more.'' This 
standard is inconsistent with the standard applicable to the tarmac 
delay contingency plan requirements under 14 CFR part 259 and the 
existing reporting requirements of BTS, both of which refer to any 
tarmac delay of ``more than three hours.'' In a Frequently Asked 
Questions document issued by the Department following the issuance of 
the final rule for part 244, we acknowledged this discrepancy and 
stated that we intend to correct it in a future rulemaking. In the NPRM 
for the instant proceeding, we proposed to amend the rule text of part 
244 and to adopt the ``more than three hours'' standard so this part 
would be consistent with other parts of our rules. Under this action, 
any tarmac delay that lasts exactly three hours would not be covered 
under the requirements of part 244. We received no comments on this 
proposal and are adopting it as proposed.
b. Civil Penalty for Tarmac Delay Violations
    In the NPRM, we proposed to amend the tarmac delay rule to clarify 
that the Department may impose penalties for tarmac delay violations on 
a per-passenger basis. We received numerous comments opposing this 
proposal, primarily from carriers and carrier associations stating that 
the Department lacks statutory authority to impose such a civil penalty 
on a per-passenger basis.
    Since the tarmac delay rule became effective in 2011, the 
Department's Enforcement Office has maintained that even if all of the 
violations took place on a single flight, it is not limited to a single 
civil penalty per flight for tarmac delay violations. It has 
consistently exercised its discretion and assessed civil penalties for 
tarmac delay violations on a per-passenger basis, through consent 
orders that have become actions of the Department. The Enforcement 
Office has taken the position that the Department has the authority to 
assess a civil penalty on a per-passenger basis, based on 49 U.S.C. 
41712, which prohibits unfair or deceptive practices, and 49 U.S.C. 
42301, which requires that carriers adhere to their tarmac delay 
contingency plans.
    Nonetheless, the Department has decided not to amend the tarmac 
delay rule as we had proposed on this particular issue. Instead, the 
Enforcement Office will continue to exercise its discretion to enforce 
the tarmac delay rule as appropriate, on a case-by-case basis.
c. Required Oral Disclosure of Material Restrictions on Travel Vouchers 
Offered to Potential Volunteers in Oversale Situations Under Part 250
    The second Enhancing Airline Passenger Protections rule amended the 
Department's Oversales rule (14 CFR part 250) in a number of ways. One 
of the issues was requiring oral disclosure of any material 
restrictions on travel vouchers offered to both voluntarily and 
involuntarily bumped passengers. The preamble discussed extensively the 
reasons for adopting this new provision. But inadvertently, the rule 
text in part 250 only requires oral disclosures to passengers who are 
involuntarily denied boarding. The rule text, as it currently stands, 
allows carriers to provide such disclosure solely by written notice to 
passengers who are orally solicited to be volunteers in exchange for 
travel vouchers. We proposed in the NPRM to require carriers to provide 
oral notification of restrictions to these passengers who are solicited 
to volunteer.
    Travelers United and National Consumers League submitted joint 
comments in support of this proposal but urge the Department to go 
further by requiring gate agents to verbally disclose to passengers who 
are involuntarily denied boarding that they are eligible to receive the 
maximum amounts of denied boarding compensation in cash for domestic 
and international flights. The commenters state that such disclosure 
would put consumers in an educated position when dealing with denied 
boarding situations. The commenters further state that basic consumer 
rights involving compensation should be explained in writing by 
airlines on ticket itineraries and computer generated boarding passes 
to include compensation for lost luggage, denied boarding and flight 
delays from Europe to the United States and within Europe.
    Spirit Airlines opposes the Department's proposal to require gate 
attendants to provide a verbal explanation of the terms of vouchers 
given to volunteers in an overbooking situation. Spirit states that the 
Department lacks any demonstrable evidence that consumers are harmed by 
receiving only written disclosures. Spirit states that it would first 
ask the passengers being solicited to volunteer to read the terms of 
the vouchers and check a box to state that they agree to the terms and 
conditions. Spirit asserts that it is completely impractical to require 
a gate agent to give a private presentation of the material restriction 
applicable to the travel voucher to each potential volunteer.
    The Department continues to believe that oral notification of 
material restrictions of vouchers is necessary especially when 
passengers being solicited to volunteer their seats are constrained by 
time pressure to make a quick decision as to whether to volunteer. We 
further believe that the written notice that is often embedded in the 
printed contents of the travel voucher is hard for passenger to review 
and comprehend in a short time before he or she commits to the 
acceptance of the voucher. By adopting this requirement, we note that a 
brief oral summary of the material restrictions applicable to the 
travel vouchers delivered through the gate PA system following the 
announcement of a request for volunteers would not place an 
unreasonable burden on carriers and would benefit consumers by offering 
them a clear and precise summary description of what they are receiving 
in exchange for giving up their seats. Such verbal disclosure is not 
required to be provided individually to each potential volunteer. We 
expect such disclosure would reduce the likelihood of consumer 
confusion that in turn would reduce complaints filed with carriers and 
the cost associated with carriers' handling of these complaints. With 
respect to the suggestion of Travelers United and National Consumers 
League to require verbal disclosure of maximum denied boarding 
compensation amounts to passengers denied boarding involuntarily, and 
the suggestions to include compensation amounts on boarding passes, we 
decline to address these proposals in this final rule because they are 
beyond the scope of our Notice of Proposed Rulemaking.
d. Limitation of Flight Status Notification Requirement of 14 CFR 259.8
    Guidance in the Frequently Asked Questions that accompanied the 
second Enhancing Airline Passenger Protections final rule limits the 
flight status notification requirement in 14 CFR 259.8 to any qualified 
flight status changes that occur within seven calendar days prior to 
the scheduled date of the operation. In the NPRM for the instant 
proceeding, we proposed to codify this standard in the rule. We 
received no comments on this proposal. We adopt the ``seven-calendar-
day'' timeframe in this final rule as we recognize that the closer to 
the date of the scheduled operations, the more

[[Page 76821]]

important it is for carriers to provide notice of a flight status 
change promptly. Limiting the flights for which carriers are required 
to comply with section 259.8 according their departure timeframe will 
also reduce carriers' burdens and ensure that their primary focus is on 
those flights where the status change would have the most significant 
impact on consumers. We emphasize, however, that notifications of 
changes that occur earlier than the seven-day threshold are still 
required to be delivered to the passengers ``in a timely manner'' by 
the carriers as provided by 14 CFR 259.5(b)(10).
    We are also adopting some proposed editorial changes to section 
259.8 to clarify that flight status change notifications required in 
this section should be provided not only to passengers, but also to any 
member of the public who may be affected by the changes and who 
subscribes or attempts to subscribe to a flight status notification 
system, including persons meeting passengers at airports or escorting 
them to or from airports. In this regard, we are changing the word 
``passengers'' to ``consumers'' in the title of section 259.8, changing 
the first instance of the word ``passengers'' in subsection 259.8(a)(1) 
to the phrase ``passengers and other interested persons,'' and changing 
the second instance of that word to ``subscribers.''
e. Removing the Rebating Provision in Section 399.80(h)
    14 CFR 399.80(h) of DOT's Statements of General Policy states that 
it is an unfair or deceptive practice or unfair method of competition 
for a ticket agent to advertise or sell air transportation at less than 
the rates specified in the tariff of the air carrier, or offer rebates 
or concessions, or permit persons to obtain air transportation at less 
than the lawful fares and rates. In the NPRM for this proceeding, we 
proposed to remove this provision. It is a vestige of the period before 
deregulation of the airline industry. Domestic air fares were 
deregulated effective 1983, and in most cases international air fares 
to and from the United States are no longer included in tariffs that 
specify ``lawful'' fares. In those markets where international fares 
are still subject to regulation, carriers that do not comply with their 
tariff are potentially subject to enforcement action under 49 U.S.C. 
41510 concerning adherence to tariffs or 49 U.S.C. 41712 concerning 
unfair or deceptive practices and unfair methods of competition (the 
statutory basis for section 399.80(h)). The Department's Enforcement 
Office has said that it will pursue enforcement action against a 
carrier that does not comply with its tariff when there is clear 
evidence of a pattern of direct fraud against consumers or deception, 
invidious discrimination, or violations of the antitrust laws. It has 
been the longstanding policy of that office to decline to prosecute 
instances of noncompliance with tariff obligations that result in 
benefits to consumers absent clear evidence of such fraud, deception, 
discrimination or antitrust violations. (See the Frequently Asked 
Questions for ``Rule #2'' of the Enhancing Airline Passenger 
Protections regulation, www.transportation.gov/individuals/air-consumer/aviation-rules, section X, question 38a, footnote 1.) There 
have been no enforcement actions solely for tariff compliance for over 
20 years, and should such action become appropriate in the future, it 
can proceed under the authority of sections 41510 or 41712.
    The American Society of Travel Agents supported the proposal to 
remove this provision. There were no other comments on this issue. As 
indicated above, 14 CFR 399.80(h) is not necessary and consequently we 
are removing this provision.
f. Removing Part 255 Pursuant to Its Sunset Provision
    We are removing the rule text of 14 CFR part 255 pursuant to 
section 255.8 that provides that part 255 shall terminate on July 31, 
2004, unless extended by a document published in the Federal Register. 
We are replacing the text of part 255 with ``Reserved.''

Regulatory Analyses and Notices

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

    This action has been determined to be significant under Executive 
Order 12866 and the Department of Transportation's Regulatory Policies 
and Procedures. It has been reviewed by the Office of Management and 
Budget under that Executive Order and Executive Order 13563. This 
section contains a summary of costs and benefits associated with this 
final rule. More detail on the economic impact of this final rule can 
be found in the Regulatory Impact Analysis (RIA), which is available in 
the docket.
    The RIA provides information on the benefits and costs associated 
with the Final Rule. The rule is not economically significant, as the 
costs which were able to be quantified, which relate only to the 
requirements that expand the definition of ``reporting carrier'' and 
the reporting requirements for reporting carriers, totaled $7.74 over a 
ten-year period, or an annualized cost of $0.96 million, when 
discounted using a seven percent rate. Any potential additional costs 
which could not be quantified are expected to be minimal. The benefits 
could not be quantified and monetized with reasonable accuracy for the 
Rule and thus, were evaluated qualitatively.
Provision 1: Expand ``Reporting Carrier'' Pool and Provision 2: Expand 
Reporting Requirements for Reporting Carriers
    Provision 1 expands the ``reporting carrier'' threshold to include 
more carriers by lowering the threshold for ``reporting carrier'' to 
0.50 percent of domestic scheduled passenger revenues. Provision 2 
expands the information that each reporting carrier is required to 
submit to USDOT to include an additional set of performance data for 
the carrier's domestic code-share flight segments operated by a 
partner.
    Reporting carriers are required to submit the following flight 
performance data regularly:
     BTS Form 234 ``On-Time Performance Report'' on a monthly 
basis;
     Report baggage mishandling, statistics monthly;
     BTS Form 251 regarding denied boarding/oversales on a 
quarterly basis; and
     Lengthy tarmac delays and incidents relating to transport 
of animals, when/if they occur.
    In addition, reporting carriers are currently required to post on-
time performance data on their Web sites for each flight they operate 
and for each flight their U.S. code-share partners operate.
    Provisions 1 and 2 will lead to additional performance data 
reported to the BTS, and in turn made available to consumers through 
publication in the Air Travel Consumer Report. In addition, new 
reporting carriers that market directly to consumers will now post on-
time performance data on their Web sites for each flight they operate 
and for each flight its U.S. code-share partners operate. Several 
larger regional carriers and some of the smaller national carriers will 
provide a great deal of information regarding their performance to BTS. 
The public will now be able to compare the performance of these newly 
reporting carriers across a range of critical performance indicators 
(e.g. on-time performance, rate of mishandled baggage, etc.).
    The costs to carriers are calculated by multiplying the number of 
impacted carriers by the one-time programming cost to collect and 
report data and on-going costs to process and report data to

[[Page 76822]]

the Department. Additional costs associated with training for data 
gathering and for carriers to report performance data of code-share 
partners were identified but not quantified or monetized, but are not 
expected to be very significant.

                                 Table 1--Estimated Costs for Provision 1 and 2
----------------------------------------------------------------------------------------------------------------
                                                               2017 (first      2018 (second
                                                              year-- set-up    year-- ongoing    2017-2026 (ten
                                                                 costs)            costs)            years)
----------------------------------------------------------------------------------------------------------------
                                            Reporting Threshold 0.50%
----------------------------------------------------------------------------------------------------------------
                            Reporting Carriers to Provide Data for Code-Share Flights
----------------------------------------------------------------------------------------------------------------
Number of newly reporting carriers who market flights.....                 1  ................  ................
One-time set-up cost per carrier to post flight delay               $441,914  ................  ................
 information to consumers, $/carrier......................
                                                           -----------------------------------------------------
    Total one-time set-up costs for newly reporting                 $441,914  ................          $441,914
     carriers who market flights to post on-time
     performance information to consumers, $____..........
One-time set-up cost per carrier to be able to collect/             $106,173  ................  ................
 report performance data for USDOT, $/carrier.............
Number of newly reporting carriers........................                 7  ................  ................
 
    n,sTotal one-time set-up costs for all newly                   $743,213  ................          $743,213
     reporting carriers to collect/report performance data
     to USDOT, $____......................................
Per carrier one-time set-up costs for newly reporting                 $8,000  ................  ................
 carriers and code-share partners to set up system for
 revised reporting mishandled baggage rates...............
Number of newly reporting carriers........................                 7  ................  ................
Number of code share partnerings, for newly reporting                      8  ................  ................
 carriers only and their domestic code-share segments.....
                                                           -----------------------------------------------------
    Total one-time set-up costs for newly reporting                 $120,000  ................          $120,000
     carriers and code-share partners to set up system for
     revised reporting mishandled baggage rates...........
One-time setup cost to create a link between reporting              $106,173  ................  ................
 carriers and code-share partners to share code-share
 performance data.........................................
    Total links established between reporting carriers and                17  ................  ................
     code-share partners..................................
                                                           -----------------------------------------------------
    Total one-time set-up costs for reporting carriers and        $1,804,947  ................        $1,804,947
     code-share partners to establish links to transmit
     data, $____..........................................
Hours per carrier for filling performance data Form 234     ................               240  ................
 (on-time performance), Hrs/carrier.......................
Hours per carrier for filling performance data Form 251     ................                16  ................
 (denied boarding/oversales), Hrs/carrier.................
Hourly labor costs of reporting, $/Hr.....................  ................            $94.57  ................
                                                           -----------------------------------------------------
    Total ongoing labor costs for newly reporting carriers  ................          $169,464        $1,600,470
     to collect and report data on their own flights,
     $____................................................
Number of current or newly reporting carriers who have at   ................                 9  ................
 least one code-share partner.............................
Additional hours per reporting carrier to report            ................               384  ................
 performance data if filing separate reports for code-
 share partners and main carriers, Hrs/carrier............
                                                           -----------------------------------------------------
    Total ongoing labor costs for reporting carriers to     ................           $544,70        $5,144,368
     collect and report data on their code-share flights,
     $____................................................
Annual cost of Report Preparation for mishandled baggage..  ................            $2,969  ................
Number of newly reporting carriers........................  ................                 7  ................
                                                           -----------------------------------------------------
    Total costs for newly reporting carriers to prepare     ................           $20,783          $187,047
     annual reports for mishandled baggage................
Number of passengers on newly reporting carriers (0.5%)...  ................        64,122,957  ................
Passengers of newly reporting carriers with checked         ................           705,353  ................
 wheelchairs and scooters,................................
additional cost per item/passenger for the airlines to      ................            $0.036  ................
 enter data re wheelchairs and scooters...................
                                                           -----------------------------------------------------
    Total ongoing data entry costs for newly reporting      ................           $25,393          $251,795
     carriers to enter data re wheelchairs and scooters...
                                                           -----------------------------------------------------
    Total Component Costs (millions):
        Undiscounted costs................................             $3.11             $0.76            $10.29
                                                           -----------------------------------------------------
        Discounted costs (7%).............................             $2.91             $0.66             $7.74
----------------------------------------------------------------------------------------------------------------
* The hourly labor cost for reporting is an average of hourly rates presented in Enhancing Airline Passenger
  Protections Final Rule of April 25, 2011 RIA and 2003 hourly rates for this specific technical work provided
  by a reporting carrier which shared this confidential data under agreement that they would not be named
  publically. The hourly labor cost for reporting includes benefits and supervisory review time. It is adjusted
  in years going forward by 1.6 percent annually during the study period. Refer to the RIA for detailed
  information.


[[Page 76823]]

Provision 3: Disclosure of Code-Share Segments in Schedules, 
Advertisements and Communications With Consumers
    This provision of the Rule clarifies the Department's code-share 
disclosure regulation to ensure that carriers and ticket agents 
disclose any code-share arrangements in schedules, advertisements and 
communications with consumers. It amends the Department's code-share 
disclosure regulation to codify the statutory requirement that carriers 
and ticket agents must disclose any code-share arrangements on their 
Web sites, including mobile Web sites and applications; clarifies the 
format in which that information must be displayed; and adds a 
requirement that verbal codeshare disclosures be made the first time a 
flight involving a code-share arrangement is offered to consumers or 
inquired about by consumers during telephone or in person 
conversations. The provision is very similar to that presented in the 
NPRM, on which the public provided comments.
    Much of the substance of Provision 3 is already in effect, as 
existing statute (49 U.S.C. 41712(c)) already requires that carriers 
and ticket agents disclose their code-shared segments, and therefore 
all carriers and ticket agencies should already be complying with most 
of this requirement. The aspect of this provision which is new is the 
specification of when during the booking process a carrier or ticket 
agent must disclose the code-share information. The existing rule 
requires airlines and ticket agents to disclose code-share information 
to the consumer ``before booking transportation'' which the Department 
has explained means at any point during the information-gathering and 
decision-making process; the new rule's provision stipulates that the 
disclosure must be made at the first time a flight involving a code-
share arrangement is mentioned or offered to consumers. Benefits from 
this provision will arise from the requirement that verbal code-share 
disclosures should be made the first time a flight involving a code-
share arrangement is mentioned or offered to consumers and will include 
some time savings for a small number of consumers during ticket 
reservations and purchase. Since this provision mostly codifies and 
clarifies existing statute, there are few costs associated with it. 
Some costs will arise, though, as some carriers may have longer 
reservation calls and increased training costs. The most notable 
additional costs would be borne by those carriers and ticket agents 
that currently do not present code-share information at the first 
mention of a flight during a reservation call or in-person booking. 
These carriers and ticket agents may have slightly longer reservation 
calls and longer in-person bookings.
Provision 4: Prohibition on Undisclosed Biasing Based on Carrier 
Identity
    The Department is aware of instances in which GDSs and large OTAs 
have manipulated flight search results and provided biased or filtered 
flight and fare information that disfavored the flights of the airline 
that was the target of the biasing. These incidents occurred in the 
course of business disputes when certain GDSs and OTAs influenced and 
threatened to influence itinerary search results to disfavor particular 
carriers' flights or not display certain flights in search results. The 
display bias was not disclosed to consumers or ticket agents that 
market to consumers. Thus, the fifth provision of the rule prohibits 
undisclosed biasing by carriers and ticket agents in any online 
displays of the fare, schedule or availability information of multiple 
carriers. This provision applies to online travel agencies, corporate 
booking tools, and carrier and carrier alliance Web sites and is 
substantially the same as presented in the NPRM.
    Undisclosed bias in the display of flight search results can 
distort the air travel market and potentially harm consumers that are 
not aware of the biasing. If consumers assume that search results 
contain no bias and that flights are ranked by lowest fare (or other 
factors which they can select) they may not fully examine all the 
results, potentially missing some flights which are either cheaper or a 
better match for their criteria but are ranked lower. Ensuring that 
online ticket agents disclose whether they use criteria besides those 
chosen by the consumer for presenting search results will alert 
consumers to any potential bias. It would still be the consumers' 
responsibility to review the results carefully, but there will be 
greater transparency in the search results, decreasing chances of a 
misinformed consumer.
    Additional costs to carriers and travel agents of this provision 
should be minimal. The only additional costs of instituting this 
provision would be small programming costs to add a disclosure 
specifying what factors or biases, if any, beyond price and those which 
can be specified by the consumer are used to display search results. 
Since these disclosures should be relatively simple statements and are 
not expected to change frequently, these per entity programming costs 
should be small. Additionally, these costs would not be incurred by all 
carriers and ticket agents, only by those which use biases or other 
non-consumer specified factors when organizing flight search results.
Alternatives Considered
    The Department considered multiple alternatives to individual 
provisions of this Final Rule. Costs could only be quantitatively 
estimated for one of these alternatives--that of lowering the reporting 
threshold from 1.0 percent of domestic passenger revenue to 0.25 
percent, instead of to 0.5 percent as adopted in the final rule. Costs 
under this alternative increased from $7.74 million over ten years to 
$9.44 million (both discounted at 7 percent); or higher annualized 
costs of $1.18 million versus $0.96 million.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
agency to review regulations to assess their impact on small entities 
unless the agency determines that a rule is not expected to have a 
significant economic impact on a substantial number of small entities. 
This rule will impact a substantial number of small entities, but the 
economic impact will not be significant.
    The provisions of this rule are:
    1. Expand the pool of carriers that report on-time performance, 
mishandled baggage, and oversales data to the Department (often called 
``reporting carriers'') from carriers which account for at least 1.0 
percent of domestic scheduled passenger revenues (as currently 
required) to those carriers which account for at least 0.5 percent of 
domestic scheduled passenger revenues;
    2. Expand reporting requirements for covered carriers that market 
code-share flights to include an additional set of reports for the on-
time performance, mishandled baggage, and oversales data of their 
domestic code-share flights operated by partners;
    3. Ensure the disclosure of code-share arrangements in all 
marketing carriers' schedules, advertisements and communications with 
consumers; and
    4. Prohibit undisclosed display bias by airlines and ticket agents.
    This Rule will impact small carriers and small ticket agents that 
market air transportation. For purposes of rules promulgated by the 
Office of the Secretary of Transportation regarding aviation economic 
and consumer matters, an airline is a small entity for purposes of the 
Regulatory Flexibility Act if it provides air transportation only with 
aircraft having 60 or fewer seats and no more than 18,000 pounds

[[Page 76824]]

payload capacity. The Small Business Administration (SBA) size standard 
for small business for both travel agents and tour operators is $20.5 
million in average annual receipts (SBA does not have a size standard 
for ticket agents as defined by the Department; travel agents and tour 
operators are most applicable categories which such data was found).
    The Department determined that this final rule is not likely to 
have a significant economic impact, although it will impact a 
substantial number of small entities. Provisions 1 and 2 of the Rule 
will only affect one small carrier; the Department estimated that this 
carrier would experience a cost of $326,520 in the first year and 
$491,612 over a 10-year period (discounted at a 7 percent discount 
rate). A substantial number of small travel agencies and tour operators 
will be directly impacted by this Rule. However, the Department 
estimates that the costs of compliance will be minimal for each 
individual travel agency and/or tour operator.
    Since the Department could not estimate all of the costs to small 
entities of this rule, it prepared a FRFA. The Department considered 
multiple alternatives to individual provisions of this Final Rule. 
Costs could only be quantitatively estimated for one of the 
alternatives to Provision 1--that of lowering the reporting threshold 
from 1.0 percent of domestic passenger revenue to 0.25 percent, instead 
of to 0.5 percent as adopted in the final rule.

C. Executive Order 13132 (Federalism)

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

D. Executive Order 13084

    This 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 none of the 
provisions in the final rule significantly or uniquely affect the 
communities of the Indian tribal governments or impose substantial 
direct compliance costs on them, the funding and consultation 
requirements of Executive Order 13084 do not apply.

E. Paperwork Reduction Act

    As required by the Paperwork Reduction Act of 1995, the Department 
has submitted the Information Collection Request (ICR) abstracted below 
to the Office of Management and Budget (OMB). Before OMB decides 
whether to approve those proposed collections of information that are 
part of this final rule and issue a control number, the public must be 
provided 30 days to comment. Organizations and individuals desiring to 
submit comments on the information collection requirements should 
direct them to the Office of Management and Budget, Attention: Desk 
Officer for the Office of the Secretary of Transportation, Office of 
Information and Regulatory Affairs, Washington, DC 20503, and should 
also send a copy of their comments to: Department of Transportation, 
Office of Aviation Enforcement and Proceedings, Office of the General 
Counsel, 1200 New Jersey Avenue SE., Washington, DC 20590. OMB is 
required to make a decision concerning the collection of information 
requirements contained in this rule between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication.
    We will respond to any OMB or public comments on the information 
collection requirements contained in this rule. The Department may not 
impose a penalty on persons for violating information collection 
requirements which do not display a current OMB control number, if 
required. The Department intends to renew the OMB control number for 
the information collection requirements resulting from this rulemaking 
action. The OMB control number, when renewed, will be announced by 
separate notice in the Federal Register.
    The ICR was previously published in the Federal Register as part of 
the NPRM. See 79 FR 29995. The Department invited interested persons to 
submit comments on any aspect of each of these two information 
collections: The first collection of information is a requirement that 
more carriers report on-time performance, mishandled baggage, and 
oversales data to the Department (i.e., expansion of reporting carriers 
from any U.S. airline that accounts for at least one percent of annual 
domestic scheduled passenger revenue to any U.S. airline that accounts 
for at least 0.5 percent of annual domestic scheduled-passenger 
revenues). The second information collection is a requirement that 
mainline carriers provide enhanced reporting for flights operated by 
their domestic code-share partners including requiring reporting 
carriers to separately report on-time performance, mishandled baggage, 
and oversales data for all domestic scheduled passenger flights 
marketed by the reporting carriers but operated by domestic code-share 
partners.
    The final rule modifies the information collection titled 
``Reporting on-time performance/Reporting baggage-handling'' (OMB No. 
2138-0041), the information collection titled ``Reporting oversales'' 
(OMB No. 2138-0018), and the information collection titled ``Posting 
on-time performance data on carrier's Web site'' (OMB No. 2105-0561). 
The first collection of information contained in the final rule is a 
requirement that U.S. carriers that account for at least 0.5 percent 
but less than one percent of the domestic scheduled passenger revenue 
to report to the Department the on-time performance, mishandled 
baggage, and oversales information for the flights they operate. As 
discussed above, this requirement expands the reporting requirement 
from one percent of domestic scheduled passenger revenue to 0.5 
percent, and therefore expanding the number of reporting carriers from 
12 to 19 carriers, an increase of 7 carriers. The second collection of 
information requires reporting carriers that market codeshare flights 
operated by another carrier to file separate reports for on-time 
performance, mishandled baggage, and oversales for those flights. Seven 
of the 19 reporting carriers will be subject to this requirement. The 
third information collection is a requirement that U.S. carriers that 
account for at least 0.5 percent but less than one percent of the 
domestic scheduled passenger revenue to post on-time performance 
records on its Web site, if the carrier has a Web site marketing 
flights to the consumers. One carrier will be subject to this 
requirement because of this final rule.
First Information Collection
    Title: Reports by Carriers on On-time Performance and Mishandled 
Baggage Data for Flights Operated by Themselves and for Code-share 
Flights Operated by Another Carrier.
    OMB Control Number: 2138-0041.
    Type of Request: Modification of Information Collection Request.
    Respondents: U.S. carriers operate scheduled passenger service that

[[Page 76825]]

account for at least 0.5 percent and less than 1.0 percent of domestic 
scheduled passenger revenue will be required to report on-time 
performance and mishandled baggage data for flights that they operate. 
U.S. carriers operate scheduled passenger service and account for at 
least 0.5 percent of total domestic scheduled passenger service revenue 
that market code-share flights only carrying the carrier's code will be 
required to report separately on-time performance and mishandled 
baggage data for these code-share flights.
    Frequency: For each respondent, one information set each month for 
on-time performance for flights they operate and one information set 
each month for mishandled baggage for flights they operate; for each 
respondent that market code-share flight, one information set each 
month for on-time performance for code-share flights they market and 
one information set for mishandled baggage for code-share flights they 
market.
    Estimated Annual Burden on Respondents: Estimated Initial Set-up 
Cost in the First Year: The 7 non-marketing newly reporting carriers 
will incur an initial cost of 1,123 hours per carrier for setting up 
the reporting systems needed to collect data needed for on-time 
performance reporting and oversales (this figure is calculated from the 
estimated one-time cost of $106,173 per carrier to be able to collect/
report performance data for USDOT and divided by an hourly labor cost 
of $94.57, derived from which was derived from hourly labor cost 
estimates from a reporting carrier and research conducted for the 
Regulatory Evaluation in support of Consumer Rulemaking: Enhancing 
Airline Passenger Protections II]). The total for all newly reporting 
carriers will be 7,859 hours. Using an hourly labor rate of $94.57 
(derived from which was derived from hourly labor cost estimates from a 
reporting carrier and research conducted for the Regulatory Evaluation 
in support of Consumer Rulemaking: Enhancing Airline Passenger 
Protections II), the 7,859 hours will translate into a total of 
$743,213.
    All reporting carriers which have code-share partnerships will have 
set-up costs associated with establishing links to their partners for 
the necessary data reporting. The costs are estimated to be 
approximately $106,173 per link, and there will be 17 such links among 
all the reporting carriers. The total cost will be $1,804,947, or 
approximately 19,086 for all 15 reporting carriers with code-share 
partners.
    An additional $120,000 set-up costs for previously reporting 
carriers to create links to their code-share partners for mishandled 
baggage data, and for the seven newly reporting carriers to submit for 
mishandled baggage data to USDOT will total $120,000 in the first year, 
or approximately 1,269 hours. Thus, the total hour burden for this all 
carriers will total 28,215 hours, or $ $2,668,160 for first year set up 
costs.
    Annual on-going burden will total 5,624 hours per year, which 
includes 240 hours per carrier for the 7 newly marketing carriers to 
complete form 234 for their own operated flights, an estimated 488 per 
carrier in ongoing data entry costs for newly reporting carriers to 
enter data regarding wheelchairs and scooters; and a total of 3,456 for 
all carriers with code-share partners (varies by carrier based on 
number of code-share) for reporting on-time performance and mishandled 
baggage data, which is filed monthly. Using an hourly labor rate of 
$94.57 (derived from which was derived from hourly labor cost estimates 
from a reporting carrier and research conducted for the Regulatory 
Evaluation in support of Consumer Rulemaking: Enhancing Airline 
Passenger Protections II), the 5,624 will translate into a total of 
$531,871 first year set-up costs.
Second Information Collection
    Title: Reports by Carriers on Oversales Data for Flights Operated 
by Themselves and for Code-share Flights Operated by Another Carrier.
    OMB Control Number: 2138-0018.
    Type of Request: Modification of Information Collection Request.
    Respondents: U.S. carriers operate scheduled passenger service that 
account for at least 0.5 percent and less than 1.0 percent of domestic 
scheduled passenger revenue will be required to report oversales data 
for flights that they operate. U.S. carriers operate scheduled 
passenger service and account for at least 0.5 percent of total 
domestic scheduled passenger service revenue that market code-share 
flights only carrying the carrier's code will be required to report 
separately oversales data for these code-share flights.
    Frequency: For each respondent, one information set each quarter 
for oversales for flights they operate; for each respondent that market 
code-share flight, one information set each quarter for oversales for 
code-share flights they market.
    Estimated Annual Burden on Respondents: The set-up costs for newly 
reporting carriers to put into place systems for reporting oversales 
data are included in the set-up costs for reporting performance data, 
since they are no separate systems. The annual on-going burden will be 
approximately 16 hours per carrier per year, or 592 hours for all 8 
carriers, to report oversales data, which is filed quarterly. The 592 
hours translates into $56,000 per years when using an hourly labor cost 
of $94.57 (see above).
Third Information Collection
    Title: Posting on-time performance data on carriers' Web sites.
    OMB Control Number: 2105-0561.
    Type of Request: Modification of Information Collection Request.
    Respondents: U.S. carriers operate scheduled passenger service that 
account for at least 0.5 percent and less than 1.0 percent of domestic 
scheduled passenger revenue and marketing flight directly to consumers 
via a Web site will be required to post on-time performance records for 
the flights it markets on its Web site.
    Frequency: For each respondent, updating on-time performance 
records once a month on its Web site.
    Estimated Annual Burden on Respondents: The 1 newly reporting 
carrier which markets to consumers will incur approximately 4,673 hours 
to set up the Web site to post online the on-time performance records 
for flights marketed on their Web sites. (The estimate of 4,673 is 
calculated from the estimated one-time cost of posting delay 
information online of $400,000 in 2009, from U.S. DOT Final RIA 
Enhanced Airline Passenger Protections [https://www.dot.gov/sites/dot.gov/files/docs/Final_Rule_on_Enhancing_Airline_Passenger_Protections.pdf and brought 
forward to 2015 and divided by an hourly labor cost of $94.57, which 
was derived from hourly labor cost estimates from a reporting carrier 
and research conducted for the Regulatory Evaluation in support of 
Consumer Rulemaking: Enhancing Airline Passenger Protections II]). 
Ongoing costs for updating the Web site are assumed to be minimal once 
the systems are in place and the carrier is reporting its on-time 
performance to BTS as required elsewhere.

F. Unfunded Mandates Reform Act

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

G. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this final 
rule pursuant to the National Environmental Policy Act of 1969 (NEPA) 
(42 U.S.C. 4321 et seq.) and has determined that it is categorically 
excluded pursuant to DOT Order 5610.1C, Procedures for Considering 
Environmental Impacts (44 FR 56420, Oct. 1, 1979). Categorical

[[Page 76826]]

exclusions are actions identified in an agency's NEPA implementing 
procedures that do not normally have a significant impact on the 
environment and therefore do not require either an environmental 
assessment (EA) or environmental impact statement (EIS). See 40 CFR 
1508.4. In analyzing the applicability of a categorical exclusion, the 
agency must also consider whether extraordinary circumstances are 
present that would warrant the preparation of an EA or EIS. Id. 
Paragraph 3.c.6.i of DOT Order 5610.1C categorically excludes 
``[a]ctions relating to consumer protection, including regulations.'' 
The purpose of this rulemaking is to enhance protections for air 
travelers and to improve the air travel environment. The Department 
does not anticipate any environmental impacts, and there are no 
extraordinary circumstances present in connection with this rulemaking.

List of Subjects

14 CFR Part 234

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 244

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 250

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 255

    Air carriers, Antitrust.

14 CFR Part 256

    Air carriers, Air rates and fares, Antitrust.

14 CFR Part 257

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

14 CFR Part 259

    Air carriers, Air rates and fares, Consumer protection.

14 CFR Part 399

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

    Issued this 18th day of October 2016, in Washington, DC.
Anthony R. Foxx,
Secretary of Transportation.

    Accordingly, 14 CFR chapter II is amended as follows:

PART 234--[AMENDED]

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

    Authority: 49 U.S.C. 329 and Sections 41708 and 41709.

0
2. The definitions of ``reportable flight'' and ``reporting carrier'' 
in Sec.  234.2 are revised to read as follows:


Sec.  234.2   Definitions.

* * * * *
    Reportable flight. (1) Reportable flight for air transportation 
taking place before January 1, 2018 means any nonstop flight, including 
a mechanically delayed flight, to or from any airport within the 
contiguous 48 states that accounts for at least 1 percent of domestic 
scheduled-passenger enplanements in the previous calendar year, as 
reported to the Department pursuant to part 241 of this title. 
Qualifying airports will be specified periodically in accounting and 
reporting directives issued by the Office of Airline Information.
    (2) Reportable flight for air transportation taking place on or 
after January 1, 2018 means any domestic nonstop scheduled passenger 
flight, including a mechanically delayed flight, held out to the public 
under the reporting carrier's code, to or from any U.S. large, medium, 
small, or non-hub airport as defined in 49 U.S.C. 47102. Qualifying 
airports will be specified periodically in accounting and reporting 
directives issued by the Office of Airline Information.
    Reporting carrier. (1) Reporting carrier for air transportation 
taking place before January 1, 2018 means an air carrier certificated 
under 49 U.S.C. 41102 that accounted for at least 1 percent of domestic 
scheduled-passenger revenues in the most recently reported 12-month 
period as defined by the Department's Office of Airline Information, 
and as reported to the Department pursuant to part 241 of this title. 
Reporting carriers will be identified periodically in accounting and 
reporting directives issued by the Office of Airline Information.
    (2) Reporting carrier for air transportation taking place on or 
after January 1, 2018 means an air carrier certificated under 49 U.S.C. 
41102 that accounted for at least 0.5 percent of domestic scheduled-
passenger revenues in the most recently reported 12-month period as 
defined by the Department's Office of Airline Information, and as 
reported to the Department pursuant to part 241 of this chapter. 
Reporting carriers will be identified periodically in accounting and 
reporting directives issued by the Office of Airline Information.
* * * * *

0
3. Section 234.3 is revised to read as follows:


Sec.  234.3  Applicability.

    For air transportation taking place before January 1, 2018, this 
part applies to reportable flights as defined in Sec.  234.2 that are 
held out to the public by certificated air carriers that account for at 
least 1 percent of domestic scheduled passenger revenues. As stated in 
Sec.  234.7, certain provisions also apply to voluntary reporting of 
on-time performance by carriers. For air transportation taking place on 
or after January 1, 2018, this part applies to reportable flights as 
defined in Sec.  234.2 that are held out to the public by certificated 
air carriers that account for at least 0.5 percent of domestic 
scheduled passenger revenues. As stated in Sec.  234.7, certain 
provisions also apply to voluntary reporting of on-time performance by 
carriers.

0
4. Section 234.4 is amended by revising paragraph (a) introductory text 
and adding paragraph (k) to read as follows:


Sec.  234.4  Reporting of on-time performance.

    (a) Each reporting carrier shall file BTS Form 234 ``On-Time Flight 
Performance Report'' with the Office of Airline Information of the 
Department's Bureau of Transportation Statistics on a monthly basis, 
setting forth the information for each of its reportable flights 
operated by the reporting carrier and held out to the public on the 
reporting carrier's Web site and the Web sites of major online travel 
agencies, or in other generally recognized sources of schedule 
information. (See also paragraph (k) of this section.) The reportable 
flights include, but are not limited to, cancelled flights, 
mechanically cancelled flights, diverted flights, new flights and wet-
leased flights. The report shall be made in the form and manner set 
forth in accounting and reporting directives issued by the Director, 
Office of Airline Statistics, and shall contain the following 
information:
* * * * *
    (k) For air transportation taking place on or after January 1, 
2018, each reporting carrier shall also file a separate BTS Form 234 
``On-Time Flight Performance Report'' with the Office of Airline 
Information on a monthly basis, setting forth the information for each 
of its reportable flights held out with only the reporting carrier's 
airline designator code on the reporting carrier's Web site, on the Web 
sites of major online travel

[[Page 76827]]

agencies, or in other generally recognized sources of schedule 
information, and operated by any code-share partner that is a 
certificated air carrier or commuter air carrier. If the operating 
carrier of the flight is not a reporting carrier, the non-operating 
reporting carrier must file a BTS Form 234 ``On-time Flight Performance 
Report'' with the Office of Airline Information on a monthly basis, 
setting forth the information regarding those flights in a form and 
manner consistent with the requirements set forth in paragraph (a) 
through (j) of this section. If the operating carrier of the flight is 
a reporting carrier, the non-operating reporting carrier must file a 
simplified BTS Form 234 ``On-Time Flight Performance Report'' with the 
Office of Airline Information on a monthly basis, setting forth the 
information regarding those flights in a form and manner consistent 
with the requirements set forth in paragraph (a)(1) through (a)(4) and 
paragraph (a)(10) of this section, and in accordance with the 
requirements set forth in accounting and reporting directives issued by 
the Office of Airline Information.

0
5. Section 234.6 is amended by revising paragraph (b) to read as 
follows:


Sec.  234.6   Baggage-handling statistics.

* * * * *
    (b) For air transportation taking place on or after January 1, 
2018, each reporting carrier shall report monthly to the Department on 
a domestic system basis, excluding charter flights:
    (1) The total number of checked bags enplaned, including gate 
checked baggage, ``valet bags,'' interlined bags, and wheelchairs and 
scooters enplaned in the aircraft cargo compartment for the reportable 
flights operated by the reporting carrier and separately for the 
reportable flights held out with only the reporting carrier's airline 
designator code and operated by any code-share partner that is a 
certificated air carrier or commuter air carrier,
    (2) The total number of wheelchairs and scooters that were enplaned 
in the aircraft cargo compartment for the reportable flights operated 
by the reporting carrier and separately for the reportable flights held 
out with only the reporting carrier's airline designator code and 
operated by any code-share partner that is a certificated air carrier 
or commuter air carrier,
    (3) The number of mishandled checked bags, including gate-checked 
baggage, ``valet bags,'' interlined bags and wheelchairs and scooters 
that were enplaned in the aircraft cargo compartment for the reportable 
flights operated by the reporting carrier and separately for the 
reportable flights held out with only the reporting carrier's airline 
designator code and operated by any code-share partner that is a 
certificated air carrier or commuter air carrier, and
    (4) The number of mishandled wheelchairs and scooters that were 
enplaned in the aircraft cargo compartment for the reportable flights 
operated by the reporting carrier and separately for the reportable 
flights held out with only the reporting carrier's airline designator 
code and operated by any code-share partner that is a certificated air 
carrier or commuter air carrier.

PART 244--[AMENDED]

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

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

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


Sec.  244.2   Applicability.

    (a) * * * Covered carriers must report all passenger operations 
that experience a tarmac time of more than 3 hours at a U.S. airport.
* * * * *

0
8. Section 244.3 is amended by revising paragraph (a) introductory text 
to read as follows:


Sec.  244.3   Reporting of tarmac delay data.

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

PART 250--[AMENDED]

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

    Authority: 49 U.S.C. 329 and chapters 41102, 41301, 41708, 
41709, and 41712.

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


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

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

0
11. Section 250.5 is amended by adding a sentence at the end of 
paragraph (c)(3) to read as follows:


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

* * * * *
    (c) * * *
    (3) * * * (See also Sec.  250.9(c)).
* * * * *

0
12. Section 250.10 is revised to read as follows:


Sec.  250.10   Report of passengers denied confirmed space.

    (a) Each reporting carrier as defined in Sec.  234.2 of this 
chapter and any carrier that voluntarily submits data pursuant to Sec.  
234.7 of this chapter shall file, on a quarterly basis, the information 
specified in BTS Form 251. The reporting basis shall be flight segments 
originating in the United States operated by the reporting carrier. The 
reports must be submitted within 30 days after the end of the quarter 
covered by the report. The calendar quarters end March 31, June 30, 
September 30 and December 31. ``Total Boardings'' on Line 7 of Form 251 
shall include only passengers on flights for which confirmed 
reservations are offered. Data shall not be included for inbound 
international flights.
    (b) For air transportation taking place on or after January 1, 
2018, each reporting carrier and voluntary reporting carrier shall file 
a separate BTS Form 251 for all flight segments originating in the 
United States marketed under only the reporting carrier's code, and 
operated by a code-share partner that is a certificated air carrier or 
commuter air carrier using

[[Page 76828]]

aircraft that have a designed passenger capacity of 30 or more seats.

PART 255--[REMOVED AND RESERVED]

0
13. Under the authority of 49 U.S.C. 40101, 40102, 40105, 40113, and 
41712, part 255, is removed and reserved.

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

PART 256--ELECTRONIC AIRLINE INFORMATION SYSTEMS

Sec.
256.1 Purpose.
256.2 Applicability.
256.3 Definitions.
256.4 Prohibition on undisclosed display bias.
256.5 Minimum disclosure requirements for biased displays.
256.6 No requirement to provide access to systems.

    Authority:  49 U.S.C. 40101 and 41712.


Sec.  256.1   Purpose.

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


Sec.  256.2   Applicability.

    (a) This part applies to any air carrier, foreign air carrier, or 
ticket agent that operates an electronic airline information system, 
e.g., GDS, corporate booking tool, or internet flight search tool, that 
combines the schedules, fares or availability information of more than 
one air carrier or foreign air carrier for the distribution or sale in 
the United States of interstate or foreign air transportation.
    (b) This part applies only if the electronic airline information 
system is displayed on a Web site marketed to consumers in the United 
States or on a proprietary display available to travel agents, business 
entities, or a limited segment of consumers of air transportation in 
the United States.


Sec.  256.3   Definitions.

    For purposes of this part:
    Availability means information provided in displays with respect to 
the ability to make a reservation on a particular flight.
    Display means the presentation of air carrier or foreign air 
carrier schedules, fares, or availability to a consumer or agent or 
other individual involved in arranging air travel for a consumer by 
means of a computer or mobile electronic device.
    Electronic airline information system or EAIS means a system that 
combines air carrier or foreign air carrier schedule, fare, or 
availability information for transmission or display to air carriers or 
foreign air carriers, ticket agents, other business entities, or 
consumers.
    Integrated display means any display that includes the schedules, 
fares or availability of more than one listed carrier.


Sec.  256.4   Prohibition on undisclosed display bias.

    Each air carrier, foreign air carrier, and ticket agent that 
operates an EAIS must comply with the requirements of this section.
    (a) Each EAIS that uses any factor, not based on user selection or 
corporate contract travel arrangement, directly or indirectly relating 
to carrier identity in ordering the information contained in an 
integrated display must clearly disclose as provided for in Sec.  256.5 
that the identity of the carrier is a factor in the order in which 
information is displayed.
    (b) An EAIS's integrated display must not give any carrier's 
flights a system-imposed preference over any other carrier's flights in 
that market based on carrier identity unless the preference is 
prominently disclosed as provided for in Sec.  256.5.
    (c) Each EAIS must display information in an objective manner based 
on search criteria selected by the user (e.g., lowest fare, lowest 
total cost, date and time of travel, class of service, stopovers, total 
elapsed time or duration of travel, number of stops, limitations on 
carriers to be used, particular airport(s), number of passengers, etc.) 
When providing information in response to a search by a user of the 
EAIS, the EAIS must order the information provided so that the flight 
options that best satisfy the parameters of the user-selected search 
criteria are displayed conspicuously and no less prominently (e.g., in 
the same or larger font size and the same or more noticeable font 
color) than any other flight option displayed. Flight options may be 
presented in sequence, matrix, or other formats, but the flight options 
that best satisfy the parameters of the user-selected search criteria 
must be ranked in lists above other flight options, or identified more 
prominently than other flight options in a matrix or other format. This 
does not preclude systems from setting default display parameters that 
are not deceptive or offering users the option to choose a variety of 
display methods within those parameters.


Sec.  256.5   Minimum disclosure requirements for biased displays.

    To the extent an EAIS engages in display bias based on carrier 
identity, it must clearly and conspicuously disclose that fact at the 
top of each search result display presented to the user in response to 
the user-selected search criteria. The notice must state that the 
flights are not displayed in neutral order and that certain airlines' 
fare, schedule or availability information is given preferential 
treatment in how it is displayed.


Sec.  256.6   No requirement to provide access to systems.

    Nothing in this section requires an air carrier, foreign air 
carrier, or ticket agent to allow a system to access its internal 
computer reservation system or to permit ``screen scraping'' or 
``content scraping'' of its Web site; nor does it require an air 
carrier or foreign air carrier to permit the marketing or sale of the 
carrier's services through any ticket agent or other carrier's system. 
``Screen scraping'' as used in this paragraph refers to a process 
whereby a company uses computer software techniques to extract 
information from other companies' Web sites without permission from the 
company operating the targeted Web site.

PART 257--[AMENDED]

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

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


Sec.  257.3   [Amended]

0
16. Section 257.3 is amended by removing the term ``Transporting 
carrier'' and adding ``Operating carrier'' in its place, removing the 
paragraph designations [(a) through (g)] from the definitions in this 
section, and placing the definition of ``Operating carrier'' in 
alphabetical order after the definition of ``Long-term wet lease.''

0
 17. Section 257.5 is revised to read as follows:


Sec.  257.5   Notice requirement.

    (a) Notice in flight itineraries and schedules. Each air carrier, 
foreign air carrier, or ticket agent providing flight

[[Page 76829]]

itineraries and/or schedules for scheduled passenger air transportation 
to the public in the United States and to the Official Airline Guides 
and comparable publications, and, where applicable, computer 
reservation systems, shall ensure that each flight on which the 
designator code is not that of the operating carrier is clearly and 
prominently identified and contains the following disclosures. If there 
is more than one operating carrier for a particular flight (e.g., 
change of gauge), the required disclosures shall be made for each 
flight segment where the designator code is not that of the operating 
carrier.
    (1) In flight schedule information provided by an air carrier, 
foreign air carrier, or ticket agent to U.S. consumers on desktop 
browser-based Web sites or applications in response to any requested 
itinerary search, for each flight in scheduled passenger air 
transportation that is operated by a carrier other than the one listed 
for that flight, the corporate name of the transporting carrier and any 
other name under which the service is held out to the public must 
appear prominently in text format, with font size not smaller than the 
font size of the flight itinerary itself, on the first display 
following the input of a search query, immediately adjacent to each 
code-share flight in that search-results list. Roll-over, pop-up and 
linked disclosures do not comply with this paragraph.
    (2) In flight schedule information provided by an air carrier, 
foreign air carrier, or ticket agent to U.S. consumers on mobile 
browser-based Web sites or applications in response to any requested 
itinerary search, for each flight in scheduled passenger air 
transportation that is operated by a carrier other than the one listed 
for that flight, the corporate name of the transporting carrier must 
appear prominently in text format, with font size not smaller than the 
font size of the flight itinerary itself, on the first display 
following the input of a search query, immediately adjacent to each 
code-share flight in that search-results list. Roll-over, pop-up and 
linked disclosures do not comply with this paragraph.
    (3) For static written schedules, each flight in scheduled 
passenger air transportation that is operated by a carrier other than 
the one listed for that flight shall be identified by an asterisk or 
other easily identifiable mark that leads to disclosure of the 
corporate name of the operating carrier and any other name under which 
that service is held out to the public.
    (4) Each air carrier and foreign air carrier that provides flight 
schedule information to any computer reservation system or global 
distribution system that receives and distributes the U.S. or foreign 
carrier's fare, schedule, or availability information shall ensure that 
each flight on which the designator code is not that of the operating 
carrier is clearly and prominently identified and the corporate name of 
the transporting carrier and any other name under which the service is 
held out to the public appears prominently in text format, with font 
size that is not smaller than the font size of the flight itinerary 
itself, immediately adjacent to each code-share flight in that search-
results list.
    (b) Notice in oral communications with prospective consumers. In 
any direct oral communication in the United States with a prospective 
consumer, and in any telephone call placed from the United States by a 
prospective consumer, concerning a flight within, to, or from the 
United States that is part of a code-sharing arrangement or long-term 
wet lease, a ticket agent doing business in the United States or a 
carrier shall inform the consumer, the first time that such a flight is 
offered to the consumer, or, if no such offer was made, the first time 
a consumer inquires about such a flight, that the operating carrier is 
not the carrier whose name or designator code will appear on the ticket 
and shall identify the transporting carrier by its corporate name and 
any other name under which that service is held out to the public.
    (c) Notice in ticket confirmations. At the time of purchase, each 
selling carrier or ticket agent shall provide written disclosure of the 
actual operator of the flight to each consumer of scheduled passenger 
air transportation sold in the United States that involves a code-
sharing arrangement or long-term wet lease. For any flight on which the 
designator code is not that of the operating carrier the notice shall 
state ``Operated by'' followed by the corporate name of the 
transporting carrier and any other name in which that service is held 
out to the public. The following form of statement will satisfy the 
requirement of this paragraph:
    Important Notice: Service between XYZ City and ABC City will be 
operated by Jane Doe Airlines d/b/a QRS Express. At the purchaser's 
request, the notice required by this part may be delivered in person, 
or by fax, electronic mail, or any other reliable method of 
transmitting written material.
    (d) In any written advertisement distributed in or mailed to or 
from the United States (including those that appear on an internet Web 
site that is marketed to consumers in the United States) for service in 
a city-pair market that is provided under a code-sharing arrangement or 
long-term wet lease, the advertisement shall prominently disclose that 
the advertised service may involve travel on another carrier and 
clearly indicate the nature of the service in reasonably sized type and 
shall identify all potential operating carriers involved in the markets 
being advertised by corporate name and by any other name under which 
that service is held out to the public. In any radio or television 
advertisement broadcast in the United States for service in a city-pair 
market that is provided under a code-sharing or long-term wet lease, 
the advertisement shall include at least a generic disclosure 
statement, such as ``Some flights are operated by other airlines.''

PART 259--[AMENDED]

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

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

0
 19. Section 259.8 is amended by revising the second sentence in 
paragraph (a) introductory text, and paragraph (a)(1), to read as 
follows:


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

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

PART 399--[AMENDED]

0
20. The authority citation for part 399 continues to read as follows:

    Authority:  49 U.S.C. 41712.

0
21. Section 399.80 is amended by removing and reserving paragraph (h) 
to read as follows:


Sec.  399.80  Unfair and deceptive practices of ticket agents.

* * * * *
    (h) [Reserved]
* * * * *
[FR Doc. 2016-26178 Filed 11-2-16; 8:45 am]
 BILLING CODE 4910-9X-P