Foreign Air Operator Certificates Issued by a Regional Safety Oversight Organization, 101870-101880 [2024-29688]

Agencies

• Federal Aviation Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 89, Number 242 (Tuesday, December 17, 2024)]
[Rules and Regulations]
[Pages 101870-101880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29688]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 129

[Docket No.: FAA-2024-0176; Amdt. No. 129-55]
RIN 2120-AL93


Foreign Air Operator Certificates Issued by a Regional Safety 
Oversight Organization

AGENCY: Federal Aviation Administration (FAA), Department of 
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: This amendment will allow the FAA to review and, if acceptable 
to the Administrator, recognize as valid air operator certificates 
issued by a Regional Safety Oversight Organization to foreign air 
carriers when the State of the Operator is a member of that Regional 
Safety Oversight Organization, for purposes of evaluating foreign 
applicants for operating specifications.

DATES: Effective January 16, 2025.

ADDRESSES: For information on where to obtain copies of rulemaking 
documents and other information related to this final rule, see 
``Additional Information'' in the SUPPLEMENTARY INFORMATION section of 
this document.

FOR FURTHER INFORMATION CONTACT: Tim Shaver, International Program 
Division/International Operations Branch, Federal Aviation 
Administration, 800 Independence Avenue SW, Washington, DC, 20591; 
telephone (202) 267-1704; email [email protected].

SUPPLEMENTARY INFORMATION: 

I. Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety is found in 
title 49 of the United States Code. Subtitle I, section 106, describes 
the authority of the FAA Administrator. Subtitle VII, Aviation 
Programs, describes in more detail the scope of the FAA's authority.
    This rulemaking is issued under the authority described in subtitle 
VII, part A, subpart III, section 44701(a)(5). Under that section, the 
FAA is charged with promoting safe flight of civil aircraft in air 
commerce by prescribing regulations and minimum standards for 
practices, methods, and procedures the Administrator finds necessary to 
ensure safety in air commerce. This regulation is within the scope of 
that authority. Amending the regulations for applications for 
operations specifications under part 129 submitted by foreign air 
carriers or foreign persons, and the related standards for denial of

[[Page 101871]]

such an application for operations specifications authorizations, 
improves the FAA's ability to manage these authorizations. These 
operations specifications are issued to foreign air carriers operating 
within the United States and to foreign air carriers or foreign persons 
conducting operations of U.S.-registered aircraft solely outside the 
United States.

II. Executive Summary

A. Purpose of the Regulatory Action

    Prior to this action, FAA regulations required that foreign 
applicants for operations specifications must hold a valid air operator 
certificate (AOC) issued by the State of the Operator. See 14 CFR 
129.7(c)(5). Requiring the operator to hold an AOC issued by the State 
of the Operator is consistent with the standard in Annex 6, Volume 1 to 
the Convention on International Civil Aviation, which directs that an 
operator shall not engage in commercial transport operations unless in 
possession of a valid AOC issued by the State of the Operator.\1\
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    \1\ Annex 6, Volume 1, 4.2.1.1.
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    Some International Civil Aviation Organization (ICAO) Contracting 
States have joined together to form Regional Safety Oversight 
Organizations (RSOO). These organizations may provide a uniform 
regulatory structure for safety oversight and provide technical 
assistance and the execution of safety oversight functions for their 
member States. RSOOs have been established in many parts of the world. 
These organizations may be formed based on a variety of differing 
arrangements among member States. The institutional structures of these 
organizations range from highly formalized intergovernmental 
organizations established on the basis of formal legal agreements to 
less formalized organizations established under the ICAO Cooperative 
Development of Operational Safety and Continuing Airworthiness 
Program.\2\
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    \2\ Information for ICAO Cooperative Development of Operational 
Safety and Continuing Airworthiness Program (COSCAP) is contained in 
the ICAO Safety Oversight Manual, Part B, The Establishment and 
Management of a Regional Safety Oversight Organization, Doc. 9734, 
2011.
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    As stated in ICAO guidance, ``under the Chicago Convention, only 
the State has responsibility for safety oversight, and this 
responsibility may not be transferred.'' \3\ The guidance further 
states that, although the State may delegate specific safety oversight 
tasks and functions to an RSOO, such as inspections for the 
certification of an operator, the State must still retain the minimum 
capability required to carry out its responsibilities under the Chicago 
Convention. States must always be able to properly and effectively 
monitor the safety oversight functions delegated to the RSOO.\4\
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    \3\ Safety Oversight Manual, Part B, The Establishment and 
Management of a Regional Safety Oversight Organization, Doc. 9734, 
2011.
    \4\ Id. at 2.1.8.
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    States participating in RSOOs may delegate or transfer various 
functions or tasks to these organizations as stipulated in the RSOO's 
formation documentation. As provided in ICAO guidance, one of the 
functions member States may delegate or transfer to a highly formalized 
and more fully resourced RSOO is the issuance of AOCs for the State of 
the Operator.\5\
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    \5\ See id. at 4.1.10, which indicates that issuance of 
certificates may be delegated but states that ``the day-to-day 
surveillance of service providers remains the responsibility of the 
civil aviation authority (CAA) of member States.'' In addition, see 
Sections IV.D, IV.F., and V.C. for discussion of the FAA's intent to 
file a difference as the standard under the Chicago Convention 
directs issuance of an AOC by the State of the Operator.
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    In those instances where an AOC is issued by an RSOO rather than 
the member State, this regulation change now allows the FAA to review 
supporting documentation for applications for foreign air carrier 
operation specifications and, if acceptable to the Administrator, 
recognize as valid (i.e., ensure that it conforms to ICAO standards) 
AOCs issued by an RSOO to foreign air carriers if the State of the 
Operator is a member State of that RSOO.

B. Changes Made in This Final Rule

    This rule amends the regulations for applications by foreign air 
carriers and foreign persons for operations specifications under 14 CFR 
part 129 and amends regulations for the denial of applications for 
operations specifications. This rule amends three sections in subpart A 
of part 129: Sec.  129.1, Applicability and definitions; Sec.  129.7, 
Application, issuance, or denial of operations specifications; and 
Sec.  129.9, Contents of operations specifications. Based on the 
comments received in response to the notice of proposed rulemaking, the 
FAA has revised the rule language to clarify the requirements and 
remove any ambiguity regarding the intent of the amendments. See 
section III.C. of this preamble.

III. Background

A. Summary of the NPRM

    On May 22, 2024, the FAA published the notice of proposed 
rulemaking (NPRM) titled ``Foreign Air Operator Certificates issued by 
a Regional Safety Oversight Organization'' (89 FR 44935). The FAA also 
posted draft guidance material for the proposal, ``FAA Order 8900.1, 
Volume 12, Chapter 2, Section 2,'' for comment in the NPRM docket. The 
NPRM proposed to amend the regulations for applications by foreign air 
carriers and foreign persons for operations specifications under 14 CFR 
part 129 and the regulations for the denial of applications for 
operations specifications.

B. General Overview of Comments

    The FAA received four comments.\6\ The agency received comments 
from one individual and three associations representing industry and 
labor constituencies. One of the associations supported the rule. Two 
of the associations opposed the rule, as discussed more fully in 
section IV. The FAA received comments on the proposal that addressed: 
support for the rule change; International Aviation Safety Assessments 
(IASA) for RSOOs; the number of IASAs needed; legal basis concerns; 
validation of Safety Management Systems (SMS) in IASAs for RSOO member 
States; and safety concerns.
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    \6\ One comment concerning Boeing employment practices was 
outside the scope of this rulemaking.
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    In addition, on September 17, 2024, after the comment period 
closed, representatives of the Department of Transportation, Department 
of State, Department of Commerce, and Federal Aviation Administration 
met with representatives from Directorate-General Mobility and 
Transport (DG MOVE), European Aviation Safety Agency (EASA), and 
European Union (EU) Member States for a special meeting of the Joint 
Committee established by the U.S.--EU Air Transport Agreement. During 
the meeting, DG MOVE raised concerns with this rulemaking effort. A 
summary of the meeting has been posted to the docket for this 
rulemaking.

C. Differences Between the NPRM and the Final Rule

    In the NPRM, the FAA proposed to establish new definitions in 14 
CFR 129.1 for ``Regional Safety Oversight Organization'' and ``State of 
the Operator.'' As discussed more fully later in the preamble, the 
final rule revises the RSOO definition to clarify the relationship 
between a member State and an RSOO and the transfer of responsibilities 
between the entities to fully address the Air Line Pilots Association's 
(ALPA's) comment, which expressed concerns about a ``legal fiction.'' 
The FAA is finalizing the

[[Page 101872]]

definition of ``State of the Operator'' as proposed.
    As proposed in the NPRM, the FAA is amending Sec.  129.7 to 
accommodate the recognition as valid by the FAA of AOCs issued by an 
RSOO on behalf of the State of the Operator. Based on the comments 
received, the FAA is revising Sec.  129.7(c)(5) in the final rule to 
eliminate the term ``on behalf of'' to clarify the relationship 
between, and responsibilities of, the State of the Operator and an 
RSOO. This final rule also clarifies the FAA will accept an AOC only 
``if acceptable to the Administrator,'' whereas the NPRM limited this 
to the RSOO-issued AOCs and used the phrase ``as acceptable to the 
Administrator'' (emphasis added). The final rule adds ``if acceptable 
to the Administrator'' to Sec.  129.7(c)(5) and adds paragraphs 
(c)(5)(i) and (ii) to stipulate the FAA may accept an AOC issued by (i) 
the State of the Operator, or (ii) an RSOO if the State of the Operator 
is a member State of that RSOO.
    In the NPRM, the FAA proposed an additional amendment to Sec.  
129.7(d) to align the conditions for the FAA's denial of an application 
for operations specifications with the conditions for eligibility for 
issuance of operations specifications. This amendment is adopted as 
proposed.
    The FAA also proposed to amend Sec.  129.9(a)(3) to reflect the 
possible acceptance and recognition as valid by the FAA of AOCs issued 
by an RSOO on behalf of the State of the Operator. The final rule 
simplifies the regulatory text in Sec.  129.9(a)(3) and (b)(3) by 
removing the specification that an AOC may be issued by the State of 
the Operator or an RSOO. The FAA determined that the regulatory text in 
Sec.  129.7(c)(5) establishes the basis for the FAA to accept a valid 
AOC, if acceptable to the Administrator, issued by (i) the State of the 
Operator; or (ii) an RSOO if the State of the Operator is a member 
State of that RSOO. Repeating this language in Sec.  129.9 is 
unnecessary and redundant.

D. Related Actions

    Section 369 of the FAA Reauthorization Act of 2024 amended chapter 
447 of title 49 U.S.C. by adding section 44747, titled ``Aviation 
safety oversight measures carried out by foreign countries.'' \7\ This 
amendment codified the FAA's IASA program. The IASA program is the 
means by which the FAA determines whether another country's oversight 
of its air carriers that (1) operate, or seek to operate, services to/
from the United States using their own aircraft and crews, or (2) seek 
to display the code of a U.S. air carrier on any services, complies 
with safety standards established by ICAO. The published IASA results 
of a country's placement in Category 1 or Category 2 is the 
notification to the U.S. traveling public as to whether a foreign air 
carrier's State civil aviation authority (CAA) meets ICAO safety 
standards. A Category 1 rating indicates that the CAA meets ICAO safety 
standards for these operations, and a Category 2 rating indicates that 
the CAA does not meet ICAO safety standards.
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    \7\ Public Law 118-63 (May 16, 2024).
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    On August 16, 2024, the FAA published a notice in the Federal 
Register (89 FR 66546) announcing the agency's suspension of policy 
changes to the IASA program that had been announced in a September 28, 
2022,\8\ Policy Statement, and a second notice in the Federal Register 
on the same day inviting public comments on proposed changes to the FAA 
IASA program policy (89 FR 66645). The comment period for the proposed 
policy closed on September 16, 2024, and the FAA is currently 
considering the comments received.
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    \8\ 87 FR 58725.
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IV. Discussion of Comments and the Final Rule

A. Support for the Rule Change

    The National Business Aviation Association (NBAA) expressed support 
for the FAA's proposed changes to part 129 that would recognize AOCs 
issued by an RSOO. NBAA cited as an example the EASA, which has 
developed competency across a growing range of aviation capabilities, 
and with the further growth of mutual recognition of capabilities 
between FAA and EASA, the acceptance of certificates issued by EASA 
will greatly enhance process efficiency and approval consistency for 
European commercial operators seeking to access the United States. NBAA 
also stated that RSOOs meeting the requirements set forth in the 
proposed changes will benefit from this recognition along with 
commercial operators.
    NBAA stated that as regulators seek to improve safety oversight 
efficiency and reduce process redundancies for operators and government 
agencies, efforts like this rulemaking will allow governments and 
industry to more efficiently deploy safety resources to operate in a 
global environment.
    Allied Pilots Association (APA), while not supporting the 
rulemaking, acknowledged in its comment that it recognizes the vital 
importance of collaboration and cooperation when it comes to global 
aviation safety. As a result, APA indicated it understands the value 
that RSOOs can provide in promoting aviation safety oversight and 
stated APA's position on the proposed rule change should not be viewed 
as a criticism of RSOOs in general or the desire for ICAO member States 
to collaborate in the name of aviation safety.
    The FAA acknowledges the support of the rulemaking expressed by 
NBAA and the overall support of RSOOs and their contribution to safety 
oversight expressed by APA.

B. International Aviation Safety Assessments (IASA) for RSOOs

    ALPA commented the FAA must conduct a detailed inquiry of the level 
of participation of a State's CAA in the activities of the RSOO and all 
associated safety activities but stated the NPRM is unclear on whether 
the FAA would conduct an IASA of the RSOO itself.
    ALPA stated it is unclear whether any RSOO is currently equipped 
with the correct process, procedure, personnel, and financial stability 
to serve in the role as a permanent regulatory oversight agency ``on 
behalf of'' the State of the Operator. ALPA believed the FAA should 
ensure that the regional oversight entity has sufficient ``boots on the 
ground'' (auditors and line inspectors with the right skillsets and 
training, funded by adequate resources, and backed by management with 
the requisite will to ensure compliance) to be fit for the purpose of 
satisfying each of those States' treaty obligations.
    ALPA contended the FAA could determine all eleven of the ICAO-
recognized RSOOs to be IASA Category 1, by default, which would 
generate unacceptable safety risks.
    ALPA asserted the FAA must first complete an IASA for each RSOO 
before approving or renewing any new AOC from an RSOO. Then, once a 
specific AOC application is received by the FAA that invokes an RSOO/
State AOC arrangement, ALPA believed the FAA should conduct a separate 
IASA review of the RSOO/State plan for AOC oversight of the air 
carriers applying to operate under part 129.
    Although APA did not specifically suggest the FAA conduct IASAs on 
RSOOs, APA stated that due to the varying levels of formality in 
structure among the currently existing RSOOs, each AOC issued by an 
RSOO would have to be reviewed and analyzed for validity and 
appropriateness before being recognized by the Administrator. APA 
asserted this would require the Administrator to review and understand 
the approval and issuance process of

[[Page 101873]]

each RSOO to be able to determine if the applicant's operator 
certificate should be recognized as valid. As a result, APA believed 
the proposal makes the application review process more cumbersome and 
complex.
    The FAA generally disagrees with the concern expressed by APA about 
this rule change, adding complexity and additional burden to the FAA's 
IASA program. However, the FAA agrees with APA that each AOC issued by 
an RSOO must be reviewed for validity before being recognized by the 
Administrator.
    The responsibility for ensuring compliance with international 
standards established under the Chicago Convention falls to the member 
States as parties to the Convention. As such, the FAA IASA program 
assesses the CAA for the State of the Operator. Specifically, the IASA 
program assesses and determines the State of the Operator's compliance 
with the standards in ICAO Annex 1 (Personnel Licensing), Annex 6--Part 
1 and Part 3 (Operation of Aircraft), and Annex 8 (Airworthiness of 
Aircraft). The FAA reviews the CAA's compliance by assessing ICAO's 
eight critical elements of effective aviation safety oversight in the 
ICAO Document 9734, Safety Oversight Manual. Those eight critical 
elements include:

1. Primary aviation legislation
2. Specific operating regulations
3. State civil aviation system and safety oversight functions
4. Technical personnel qualification and training
5. Technical guidance, tools, and the provision of safety-critical 
information
6. Licensing, certification, authorization, and approval obligations
7. Surveillance obligations
8. Resolution of safety concerns

    When a CAA, as a member of an RSOO, transfers a task or function to 
the RSOO, the FAA expects the transfer to be documented in an 
agreement, treaty, or informal written record of the parties' 
understanding that is available for review by the Administrator.\9\ 
This includes filings with ICAO outlining the arrangement between the 
RSOO and its member States.
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    \9\ See ICAO Doc. 9734, Part B, 3.3.4, which states ``[w]hat is 
the most important consideration here is that the legal status of 
the RSOO, the scope of its functions and the extent of delegated 
legal authority are clearly determined and stipulated in the 
agreement document.''
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    While the State of the Operator may transfer responsibility for 
certain tasks and functions to an RSOO, it cannot transfer its 
responsibility under the Chicago Convention. The FAA will continue to 
assess the State of the Operator as the responsible party for 
compliance with the ICAO standards. This assessment will ensure the 
State maintains the responsibility for the issuance and continued 
oversight of the AOC by the RSOO. When the State transfers the function 
of issuance of an AOC to an RSOO, the transfer documentation 
established by the State and the RSOO will be used by the FAA to 
determine which organization has responsibility for each task and 
function associated with issuance of an AOC. The FAA will use existing 
IASA procedures to assess the State to ensure the correct process, 
procedure, personnel, and financial stability necessary to accomplish 
transferred tasks or functions meet ICAO standards. The FAA does not 
believe the nuance of determining if the transferred task or functions 
is accomplished by the RSOO or retained by the State of the Operator 
adds a significant level of complexity to the process.
    As such, the FAA does not anticipate an IASA on an RSOO will be 
required to determine whether the CAA complies with the ICAO standards. 
For AOCs issued by the RSOO, however, the FAA will review the formation 
documentation for each RSOO and each RSOO-issued AOC for validity and 
consistency with ICAO standards. In the case of AOC issuance, the 
specific requirements that must be validated are only a small subset of 
ICAO standards. In most cases, the FAA expects that RSOO-issued AOCs 
will have been issued for States that have been assessed by the FAA, 
already resulting in an IASA Category 1 rating. Therefore, with the 
transfer of functions and duties to an RSOO, the FAA would conduct a 
more focused evaluation of the specific requirements associated with 
AOC issuance for the country in question. As a party to the Chicago 
Convention, the State remains the accountable organization to be 
assessed by the FAA under an IASA, and the RSOO is expected to 
participate in the IASA assessment as an observer for transferred 
functions.
    For all RSOO member States that have not had an IASA conducted by 
the FAA previously, an assessment of compliance with the ICAO standards 
for issuance of an AOC (including any functions or tasks transferred to 
an RSOO) will be done as part of the initial IASA for that State. An 
initial IASA of the State of the Operator must be completed before the 
FAA may accept an RSOO-issued AOC for that State. The RSOO may observe 
and support the State during the IASA to provide information about the 
RSOO's roles and responsibilities for the tasks and functions as 
transferred by the State.

C. Increased Number of IASAs

    ALPA stated that the FAA has incorrectly assumed that it will not 
need to increase the number of IASA assessments. ALPA contended the FAA 
will need to assess each RSOO at issue, which has never been assessed 
before. ALPA stated the FAA will need to conduct specific reviews of 
the national CAAs to which an RSOO may delegate certain functions. ALPA 
was concerned that if more assessments are needed, the FAA ``will 
simply subtract one'' from its average number of five IASAs typically 
completed per year. ALPA contended that doing fewer assessments, not 
more, does not represent an equivalent level of safety and that a 
foreign entity's desire for an assessment must not overwhelm the FAA's 
obligation to determine what is in the U.S. public interest.
    The FAA understands ALPA's concern but does not expect the number 
of IASA assessments to increase in the near term, given the FAA is 
aware of only one RSOO issuing AOCs for member States, to date. The FAA 
also does not expect a decrease in the number of IASAs conducted on 
average, historically.
    As indicated previously, the FAA will continue to conduct IASAs for 
States that seek to initiate service to the United States, or for those 
States that have been identified as requiring a reassessment based on 
risk factors, whether the operator's AOC is issued by the State of the 
Operator or an RSOO. During an initial IASA evaluation of the State, 
the transferred functions will be assessed by the FAA to determine 
compliance with ICAO standards.
    If a State previously assessed by the FAA as IASA Category 1 
subsequently transfers the function of AOC issuance to an RSOO, the 
FAA's regulatory process for AOC validation includes ensuring the ICAO 
standards and eight critical elements for those standards are still 
being met for that specific function without conducting a full IASA. If 
the FAA's evaluation of the transferred function cannot establish ICAO 
compliance using the established validation process, the AOC will not 
be accepted by the FAA. The FAA does not anticipate conducting a 
complete IASA reassessment solely based on transfer of the function of 
issuance of an AOC to an RSOO. The lack of confirmation of compliance 
with ICAO AOC standards due to the transfer of the function to an RSOO 
would, however, be included as a risk consideration when the FAA is 
reviewing a State for IASA reassessment.

[[Page 101874]]

    The FAA uses a risk analysis process to identify IASA Category 1 
countries for reassessment. The risk analysis is performed at least 
annually and whenever new safety information is obtained on each 
country on the IASA Category Rating list to determine countries of 
highest risk to the U.S. National Airspace System (NAS) and the U.S. 
traveling public. The risk analysis was developed by FAA experts and is 
comprised of individual risk elements and grouped into the following 
five major IASA risk categories:
    (1) Department of Transportation Economic Authority--New or 
existing U.S. DOT economic authority; own-metal U.S. service under part 
129; new or current codeshare involving display of U.S. air carrier 
code on foreign operator flights; and any U.S. DOT administrative 
emphasis items and initiatives.
    (2) Governance and Safety Culture--Areas of interest include: 
contracting of safety oversight functions; carrier wet lease to 
airlines of other countries; safety items identified by the CAA remain 
unresolved or not addressed; complaints received by FAA from other 
CAAs, operators, manufacturers, and the traveling public.
    (3) IASA Information--Time passed since the last IASA, and other 
factors that indicate the Category 1 rating may no longer be valid.
    (4) ICAO Requirements--Risk concerns include: negative ICAO 
Universal Safety Oversight Audit Program (USOAP) findings indicating 
noncompliance with one or more of the eight critical elements of safety 
oversight; ICAO reports indicating noncompliance with Standards and 
Recommended Practices (SARPs); inaction with respect to ICAO action 
plans; ICAO USOAP information over two years old thus limiting its 
value.
    (5) FAA Information--FAA has safety concerns about the oversight 
provided by the CAA, which include the areas of: FAA and foreign ramp 
inspections; safety-related complaints about carrier(s) from other 
CAAs; active technical assistance activities; compliance issues are 
present in FAA certificated or approved entities in the country; 
Congressional inquiries; and existing bilateral agreement 
implementation procedures.
    The risk associated with the FAA's inability to validate ICAO 
compliance due to a transfer of tasks or functions would be included in 
the ICAO requirements category of risks.
    The FAA mitigates identified State safety oversight risks by 
placing all carriers from that State, authorized to operate to the 
United States, under heightened surveillance until the IASA 
reassessment is completed.\10\ In extreme cases where safety or 
oversight risks cannot be mitigated, the FAA has regulatory authority 
to remove the authorization from any or all carriers authorized to 
operate from that State.\11\
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    \10\ The FAA notes that, in addition to the heightened 
surveillance, the FAA proposed changes to the IASA program in the 
Federal Register (89 FR 66645, August 16, 2024). In that NPRM, the 
FAA proposed to establish a Category 1* rating to be applied when 
the FAA has determined through the FAA risk assessment process that 
a Category 1 country should be reassessed based on identified risks 
of possible noncompliance. The comment period closed on September 
16, 2024, and the FAA is considering the public comments and 
developing a final policy notice.
    \11\ See 14 CFR 129.11(b) and (g).
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D. Legal Basis Concerns

    ALPA and APA expressed concerns about the legal basis and 
compliance with ICAO standards associated with the proposed rulemaking. 
ALPA stated the proposal seems contradictory. ALPA commented that on 
one hand, the FAA's proposal seeks to overcome the Chicago Convention's 
clear instruction by stating that the regional oversight entity would 
be acting ``on behalf of'' a State and thus would purportedly comply 
with the treaty. ALPA contended that as a result, the proposal would 
hold the State to account, even though the State would designate the 
regional entity as the responsible authority. ALPA stated, on the other 
hand, the proposal recognizes the regional entity would be responsible, 
and U.S. recognition of operating licenses would be at odds with U.S. 
obligations under the treaty, such that a ``difference'' would have to 
be filed by the United States with ICAO.
    ALPA asserted the FAA's regulatory language ``on behalf of,'' as in 
``on behalf of the State of the Operator,'' introduces ambiguity 
because the entity doing the acting (on behalf of) is the one with 
actual responsibility. ALPA commented that this ``legal fiction is to 
be a workaround from what ICAO admits being the role of the RSOO . . 
.''
    ALPA commented that the Chicago Convention recognizes the value in 
a clear line of responsibility from a national government authority to 
an air carrier and that only States are deemed the valid issuers of 
such a license, in accordance with ICAO Guidance on RSOOs.\12\ ALPA had 
significant concerns about how an RSOO's relationship with the State of 
the Operator will work in practice, including a concern that an RSOO 
often delegates responsibilities for AOC oversight back to the State of 
the Operator. ALPA urged the FAA to deem the RSOO, not the State of the 
Operator, to be ``ultimately responsible for the IASA'' assessment.
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    \12\ See ICAO Doc. 9734, Part B, 7.5.12, which states that 
``where a harmonized regulatory framework prevails in a region, the 
civil aviation authorities of member States will remain the sole 
authority for the issuance of licences and operator certificates, 
approval of aircraft maintenance organizations, approval of design 
and production organizations, and approval of training centres.''
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    For an existing IASA Category 1 State, the FAA's assessment has 
already established the State complies with ICAO standards for the 
issuance of an AOC. The FAA Order 8900.1, volume 12, chapter 2, section 
2 procedure for the evaluation of AOC issuance and subsequent transfer 
of the tasks and functions then focuses on ensuring all the required 
tasks and functions for AOC oversight are addressed, and the 
responsibility for each of those tasks or functions is clearly defined. 
The FAA procedure also ensures that there is evidence in the transfer 
documentation that covers the roles and responsibilities necessary for 
the continued compliance of the AOC holder with the ICAO AOC standards 
during the life cycle of the AOC. If the FAA cannot determine 
compliance, the AOC will not be accepted by the FAA until compliance 
with the required ICAO standards can be confirmed by the FAA.
    To the extent that ALPA suggests that, to act in compliance with 
the Chicago Convention, an AOC may only be issued by the State of the 
Operator, the FAA disagrees. The Chicago Convention does not speak 
directly to the issuance of AOCs. Rather, there is a standard in Annex 
6, Volume 1 that prohibits an operator from engaging in commercial air 
transport operations unless the operator possesses a valid AOC issued 
by the State of the Operator. While a member State must comply with its 
obligations under the Chicago Convention, Article 38 allows a State to 
file a difference with ICAO to acknowledge differences between the 
State's own practices and those standards established in the Annexes to 
the Convention. Consistent with the obligation to provide notice of a 
difference, the FAA will file a difference to 4.2.1.1 of Annex 6, 
Volume 1, acknowledging the FAA's acceptance of RSOO-issued AOCs when 
the Administrator determines they are acceptable (i.e., issued in 
conformance with ICAO standards for AOCs).
    To the extent the commenters suggest the characterization that an 
RSOO issues AOCs ``on behalf of'' a member state is in conflict with 
the FAA's determination that a difference must be filed, the FAA finds 
that the two concepts are not irreconcilable. However, the FAA has 
determined that certain clarifying changes, identified in

[[Page 101875]]

the following discussion, should be made to the regulatory text in this 
final rule.
    ICAO acknowledges in its guidance that existing RSOOs have taken a 
variety of forms, ranging from a relatively loose association of CAAs 
that have agreed to cooperate in the development and implementation of 
requirements and procedures, to an intergovernmental organization with 
regulatory and, to some extent, enforcement authority. According to 
ICAO, the form that an RSOO takes will primarily be determined by the 
needs of its members, the level of available resources, the scope of 
activities, the level of authority delegated by member States, and, in 
certain cases, the legislative framework already established by the 
group or community of States creating the RSOO.\13\
---------------------------------------------------------------------------

    \13\ ICAO Doc. 9734, Part B, 2.2.6.
---------------------------------------------------------------------------

    Given the varying frameworks that RSOOs may take, the FAA agrees 
that it is critical for States to maintain and demonstrate clear lines 
of responsibility \14\ in order for the FAA to properly assess the 
acceptability of an AOC issued by an RSOO in place of the State of the 
Operator. The final rule enables FAA review of the RSOO and State of 
the Operator formation documentation to ensure the transferred tasks 
and functions associated with the issuance and continued surveillance 
of the AOC holder are clearly defined and that the ICAO standards for 
assessing the AOC applicant have been met. See definition of RSOO in 
Sec.  129.1 of the final rule. This final rule further ensures the FAA 
review of all ICAO Standards related to AOC issuance that are assessed 
during an IASA.
---------------------------------------------------------------------------

    \14\ See ICAO Doc. 9734, Part B 2.1.8, which states ``Under the 
Chicago Convention, only the State has responsibility for safety 
oversight, and this responsibility may not be transferred to a 
regional body. Thus, although the State may delegate specific safety 
oversight tasks and functions to an RSOO, such as inspections for 
the certification of an operator, the State must still retain the 
minimum capability required to carry out its responsibilities under 
the Chicago Convention. States must always be able to properly and 
effectively monitor the safety oversight functions delegated to the 
RSOO.''
---------------------------------------------------------------------------

    The transferred function affected by this rulemaking, which the FAA 
has determined would necessitate filing a difference from ICAO 
standards, is limited to the transfer of responsibility for issuing the 
AOC from a member State to an RSOO. However, the FAA recognizes there 
could be significant variability between the responsibilities of RSOOs 
and which AOC issuance functions are transferred to them by member 
States. When a CAA transfers functions related to AOC issuance or the 
conduct of oversight-related tasks in conjunction with AOC issuance to 
an RSOO, the State of the Operator is still responsible for ensuring 
that the transferred functions continue to comply with ICAO standards. 
Therefore, the FAA disagrees with ALPA's assertion the FAA should hold 
the RSOO ultimately responsible for the IASA.
    Nevertheless, the FAA agrees with ALPA that the language ``on 
behalf of'' included in the NPRM introduces unnecessary ambiguity and 
an apparent, though unintended, conflict with the FAA's position that a 
difference must be filed with ICAO as a result of this rulemaking.
    Therefore, the FAA revised the text of the final rule in Sec.  
129.7 to remove this qualifier. This final rule also clarifies the FAA 
will only accept an AOC issued by the State of the Operator or an RSOO 
``if acceptable to the Administrator'' (emphasis added). In addition, 
the FAA is making corresponding changes to the definition of RSOO in 
Sec.  129.1 to reflect that authority may either be formally delegated 
between the member States and the RSOO or tasks and functions may be 
less formally transferred or assigned. The changes to Sec. Sec.  129.1 
and 129.7 are otherwise adopted as proposed.
    As for the concerns about transfer of tasks and functions related 
to the issuance of an AOC from the State of the Operator to the RSOO 
and subsequent transfer of oversight-related tasks or functions 
pertaining to AOC issuance back to the State of the Operator, the FAA 
agrees these roles and responsibilities must be clearly defined, 
documented, and understood. The final rule ensures the FAA must review 
the documented transfer of all tasks and functions related to the 
issuance of an AOC from the State of the Operator to the RSOO.
    Consistent with the FAA's proposal for accepting an AOC from an 
RSOO, the RSOO must meet the FAA's definition of RSOO in 14 CFR 129.1, 
which, as updated for this final rule, is an association or 
organization that comprises a group of member States, which--(i) Has 
provided notification to ICAO of the scope of tasks and functions 
delegated or transferred to the RSOO, including but not limited to: 
sharing common or harmonized aviation regulations, licensing, 
certification, authorization, approval, and surveillance of civil 
aviation activities, and any legal authority delegated or transferred 
by a member State to the RSOO; and (ii) Has stipulated the specific 
tasks, functions, delegations, and transfers by member States discussed 
in paragraph (c)(2)(i) of Sec.  129.1, and any other collective 
understandings of member States in RSOO formation documentation, such 
as an agreement, treaty, or informal record, that is available for 
review by the Administrator.
    The FAA will verify that each task or function required by ICAO 
Annex 6 standards is included in the transfer and formation 
documentation and the organizational responsibility for each is clearly 
defined. Consistent with the definition of RSOO, the RSOO formation 
documentation should outline not only the roles and responsibilities 
for tasks and functions necessary for the issuance of the AOC but also 
for the tasks and functions for continued oversight of the AOC during 
its full life cycle, for the FAA to fully evaluate an RSOO-issued AOC. 
The FAA acknowledges that there may be a transfer of tasks and 
functions back to the State of the Operator. This is not an unusual 
practice and could be a result of the RSOO leveraging the member 
State's availability of trained and qualified personnel needed for the 
evaluation of the carrier for initial certification.
    The FAA uses a similar practice for certification of United States 
part 121 air carriers. The part 121 certification process is a 
cooperative effort between the Certification and Evaluation Program 
Office (CEPO) of the Safety Analysis and Promotion Division and the 
Office of Air Carrier Safety Assurance (ACSA). The CEPO is a dedicated 
group of aviation safety inspectors (ASIs) with experience in the 
details and nuances of initial Air Carrier certification. The CEPO 
assigns an assistant manager as the Certification Front Line Manager 
(CFLM) and a qualified CEPO team leader as the certification project 
manager (CPM). The CEPO initiates the certification and directs the 
project through all phases of the certification process. The ACSA 
assigns the certificate management office (CMO) and establishes a 
Certificate Management Team (CMT) to perform Continued Operational 
Safety (COS) oversight after certification. The Certification Project 
Team (CPT) will include ASIs from the CEPO and the ACSA. These 
dedicated inspectors then turn the continued surveillance of the 
operator to the CMO to perform the oversight functions for the carrier. 
This is done to ensure standardization of air carrier certification.
    Transfer of tasks or functions from the State of the Operator to an 
RSOO may provide a similar benefit of targeting resources with detailed 
experience in the initial certification of air carrier, working in 
concert with those

[[Page 101876]]

responsible for continued oversight of the air carrier.

E. Validation of SMS in IASAs for RSOO Member States

    ALPA recommended the FAA take the opportunity to expand its own 
IASA program by ensuring the novel regional safety organization 
requires its licensees to fully comply with SMS, a critical element 
that ICAO has implemented to address a root cause of accidents and 
incidents. ALPA asserted the FAA has the discretionary power, as well 
as an obligation to flight crews, the traveling public, and the 
international community, to evaluate RSOO member State implementation 
of SMS. Moreover, ALPA noted one such RSOO, EASA, appears headed toward 
conducting such SMS audits, which ALPA stated is a welcome development.
    The FAA's current IASA program includes evaluation of a State's 
aviation oversight program for compliance with ICAO Annex 1, Annex 6, 
and Annex 8. Neither the current IASA Notice of Policy Statement \15\ 
nor section 369 of the FAA Reauthorization Act of 2024 codifying the 
IASA program in 49 U.S.C. 44747 include Annex 19 Safety Management 
requirements for this program. The inclusion of these requirements was 
not contemplated in the NPRM and is therefore beyond the scope of this 
rulemaking.
---------------------------------------------------------------------------

    \15\ International Aviation Safety Assessment (IASA) Program 
Change, Policy Statement (78 FR 14912, March 8, 2013).
---------------------------------------------------------------------------

F. Safety Concerns

    ALPA contended the proposed rule would create significant safety 
concerns that were not addressed in the NPRM. Specifically, ALPA 
contended an RSOO that has aircraft certification oversight, and 
oversees AOCs, could determine that when using certain aircraft 
certified by the RSOO, airline flights could be conducted with only a 
single pilot on the flight deck while the second pilot is resting or 
otherwise unavailable to serve as the second pilot. ALPA commented that 
the RSOO's certification and AOC approval combined would potentially 
allow a significant safety threat to occur in airspace managed by the 
United States, unraveling many of the advances in airline safety that 
have been achieved in the United States. ALPA urged the FAA to be 
extremely vigilant and consider unintended safety consequences of 
allowing RSOOs to simultaneously operate as an aircraft certification 
organization and AOC oversight organization.
    APA stated that delegating the authority to determine whether a 
carrier or person has satisfied those standards to a regional 
organization, which may have competing political or industrial 
influences, allows for the possibility the standards will be 
unintentionally deteriorated or altered. To eliminate the possibility 
for such deterioration or alteration, the FAA should not amend the 
current regulations to allow the acceptance of an RSOO-issued operator 
certificate in lieu of one issued directly by the State of the 
Operator.
    Finally, APA contended even where a member State has elected to 
delegate the authority to issue operator certificates to an RSOO, the 
member State must still retain the ability to issue operator 
certificates on its own. Accordingly, maintaining the regulatory status 
quo would not adversely impact a foreign applicant's ability to obtain 
operating specifications from the FAA because they remain able to 
obtain an operator certificate issued by the State of the Operator.
    The FAA understands this concern but disagrees with the premise 
that the role of an RSOO in the issuance of an AOC alone, as 
promulgated in this rulemaking, could introduce risks such as foreign 
air carrier single pilot operations in the United States. The cited 
concern would not be the result of this rulemaking allowing the FAA to 
accept an RSOO-issued AOC. This could similarly be an issue for AOCs 
issued by the State of the Operator should that State apply a risk-
based approach allowing one pilot to fly while the other rests. In 
either case, foreign air carriers approved for operations into the 
United States must still comply with all applicable FAA rules and 
regulations, including the conditions and limitations set forth in 
their operations specifications. The FAA notes that, to date, no part 
121 or 129 air carriers have been authorized by the FAA to operate with 
a single pilot at the controls.
    While not directly subject of this rulemaking, the FAA will 
consider the risk of single pilot operations identified by ALPA for all 
foreign AOC applicants and adjust our policy as required to ensure 
these risks are properly mitigated or prohibited during our evaluation 
of the proposed operation to ensure the operator is properly and 
adequately equipped to conduct the operations described in the 
operations specifications.
    The FAA notes ICAO Annex 6, Part 1, paragraph 9.1.1 addresses 
composition of flight crews. It states:

    The number and composition of the flight crew shall not be less 
than that specified in the operations manual. The flight crews shall 
include flight crew members in addition to the minimum numbers 
specified in the flight manual or other documents associated with 
the certificate of airworthiness, when necessitated by 
considerations related to the type of aeroplane used, the type of 
operation involved and the duration of flight between points where 
flight crews are changed.

    The number of crew required not only drives the type certification 
requirements listed in the operations manual but also the type of 
operation. This standard allows the FAA to ensure the risks of any 
operation have been identified, assessed, and properly mitigated.
    The FAA agrees the State of the Operator is responsible for 
establishing requirements for issuing AOCs that are compliant with the 
ICAO standards. The FAA's IASA program validates the State's compliance 
with these ICAO standards. When the tasks or functions related to AOC 
issuance or oversight activities pertaining to AOC issuance are 
transferred to an RSOO, the State of the Operator is still responsible 
for ensuring the transferred functions continue to comply with ICAO 
standards even if the State of the Operator did not issue the AOC. This 
remains true whether States transfer all or part of the AOC issuance 
tasks or functions for a specific carrier or retain the ability to 
issue other AOCs in their State.
    The FAA also agrees that vigilance is needed when issuing part 129 
operation specifications. As such, there are additional regulatory 
requirements, and a valid AOC is only one part of the requirements for 
issuing a foreign operator a part 129 authorization. Section 129.7(c) 
lists all the requirements for issuance of operations specifications 
for authorization to conduct service to the United States.
    Introduction of risks when authorizing part 129 operations is 
addressed through the evaluation of the carrier to ensure they are 
properly and adequately equipped to conduct the operations described in 
the operations specifications and are in compliance with the 
requirements of part 129. Also, 14 CFR 129.5(b) states ``Each foreign 
air carrier conducting operations within the United States must conduct 
its operations in accordance with the Standards contained in Annex 1 
(Personnel Licensing), Annex 6 (Operation of Aircraft), Part I 
(International Commercial Air Transport--Aeroplanes) or Part III 
(International Operations--Helicopters), as appropriate, and in Annex 8 
(Airworthiness of Aircraft) to the Convention on International Civil 
Aviation.''
    These steps ensure all foreign commercial operations are properly

[[Page 101877]]

assessed, and any associated risks are appropriately mitigated. This is 
true not only for carriers issued AOCs by RSOO but all carriers 
requesting authorization to operate to the United States.
    The FAA intends to file a difference with ICAO because the 
acceptance of RSOO-issued AOCs reflects a departure from the 
international standard in ICAO Annex 6, paragraph 4.2.1.1 to the extent 
the means of compliance in this final rule is different from the 
corresponding standard in Annex 6. However, the FAA's assessment of the 
formation documentation between the member State and RSOO to validate 
the ICAO standards for issuing an AOC have been met will ensure an 
equivalent level of safety.

G. Miscellaneous Amendments

    As previously noted, the FAA proposed to amend Sec.  129.9(a)(3) to 
reflect the possible acceptance and recognition as valid by the FAA of 
AOCs issued by an RSOO on behalf of the State of the Operator. In this 
final rule, the FAA has revised the regulatory text proposed for 14 CFR 
129.9(a)(3) and (b)(3) by removing the reference that an AOC may be 
issued by the State of the Operator or an RSOO. This language is 
unnecessary in this context since the application requirements in 14 
CFR 129.7(c)(5) specify the issuing entities from which the FAA may 
accept AOCs. Removal of this duplicative language is a technical 
amendment and not a substantive change.

H. Effective Date

    The FAA determined to apply a 30-day effective date to this final 
rule. Therefore, this final rule will take effect 30 days after 
publication in the Federal Register. The FAA generally applies a longer 
effective date to final rules to allow time for the impacted regulated 
community to prepare to come into compliance with the requirements of a 
final rule. However, this final rule is considered to be enabling to 
the extent the FAA is expanding the options for AOC acceptance by the 
FAA for purposes of applications for part 129 operations 
specifications. The FAA expects the effective date of this final rule 
to benefit the impacted community of operators seeking to apply for 
part 129 operations specifications based on an RSOO-issued AOC by 
allowing for the earlier submission of an application. The FAA notes 
that no such applications are currently considered pending before the 
FAA. Once this final rule takes effect, operators may submit an 
application to the FAA consistent with revised 14 CFR 129.7, and the 
FAA will be prepared to begin the review process. During this process, 
the FAA will ascertain if sufficient information has been provided to 
validate continued compliance with the required ICAO standards or if an 
IASA of the State will be required before the AOC can be considered 
acceptable to the Administrator. The FAA further notes that consistent 
with Sec.  129.7(a)(2), the application must be submitted to the FAA at 
least 90 days before the intended date of operation.

V. Regulatory Notices and Analyses

    Federal agencies consider the impacts of regulatory actions under a 
variety of executive orders and other requirements. First, Executive 
Orders 12866, 13563, and 14094 direct that each Federal agency shall 
propose or adopt a regulation only upon a reasoned determination that 
the benefits of the intended regulation justify the costs. Second, the 
Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies 
to analyze the economic impact of regulatory changes on small entities. 
Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from 
setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. Fourth, the Unfunded Mandates Reform Act 
of 1995 (Pub. L. 104-4) requires agencies to prepare a written 
assessment of the costs, benefits, and other effects of proposed or 
final rules that include a Federal mandate that may result in the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector, of $100 million or more (adjusted annually 
for inflation) in any one year. The current threshold after adjustment 
for inflation is $183,000,000 using the most current (2023) Implicit 
Price Deflator for the Gross Domestic Product.
    In conducting these analyses, the FAA has determined that this 
rule: will result in benefits that justify costs; is not significant 
under section 3(f)(1) of Executive Order 12866, as amended; will not 
have a significant economic impact on a substantial number of small 
entities; will not create unnecessary obstacles to the foreign commerce 
of the United States; and will not impose an unfunded mandate on State, 
local, or Tribal governments, or on the private sector.

A. Regulatory Impact Analysis

    This rule will allow for the FAA's acceptance of AOCs issued by 
RSOOs, and it will update the regulatory basis for denial of 
applications for operations specifications. There are no changes to the 
analysis of this final rule as it was presented in the proposed rule.
Update the Process for Accepting AOCs Issued by RSOOs
    Prior to this action, a foreign air carrier applying for operations 
within the United States or applying to operate U.S.-registered 
aircraft solely outside of the United States must hold a valid AOC 
issued by the State of the Operator. The existing regulations do not 
provide for acceptance of an AOC issued by any other entity other than 
the State of the Operator. This final rule will allow the FAA to 
recognize AOCs issued by an RSOO if the State of the Operator is a 
member State of that RSOO. This allows foreign air carriers with a 
valid AOC issued by an RSOO, if acceptable to the Administrator, to be 
issued authorization to operate to and from the United States, 
providing travel services to citizens of the United States and the 
foreign countries, economic opportunities for U.S. airlines through 
code share agreements with these operators, and expanded route 
structures for these code share partners. This final rule is consistent 
with ICAO resolutions and guidance, which address the development and 
use of RSOOs.
    Under current practice for operations within the United States, 
before acceptance of the AOC, the FAA conducts an IASA of the State of 
the Operator.\16\ These assessments involve pre-work and document 
review in the United States lasting several weeks, followed by an on-
site assessment in the State of the Operator lasting five business 
days. When the State of the Operator is a member of an RSOO, and that 
State has delegated functions or tasks to the RSOO, this prework would 
include a review of functions or tasks that are delegated by the State 
to an RSOO, the scope and level of those delegations, and the need for 
RSOO participation in assessing the State's compliance with the ICAO 
standards. The assessments involve two to four inspectors and an 
attorney. An FAA IASA team incurs traveling costs, such as airfare, 
lodging, and per diem associated with the travel destination. However, 
these assessments, including the prework, are not expected to represent 
an additional cost of the rule because the FAA currently conducts them, 
and the FAA does not expect any increase in the number of assessments 
as a result of this rulemaking. Currently, when accomplishing an IASA 
on a State that has delegated functions or tasks to an RSOO, the FAA 
reviews that delegation to ensure that the State's and the RSOO's 
functions and tasks are in

[[Page 101878]]

compliance with the ICAO requirements. Historically, the FAA has 
conducted, on average, five IASAs each year. As stated previously, 
there are many factors that determine the number of IASAs that will be 
accomplished in any given year. These include application for own metal 
service to the United States by a carrier from a State that has not 
been assessed where a risk assessment has identified concerns over the 
State's safety oversight functions which warrant a reassessment. Any 
risks identified in the course of the FAA's review of an RSOO-issued 
AOC for acceptance will be included as one factor in the risk 
assessment for the respective member State.
---------------------------------------------------------------------------

    \16\ 87 FR 58725 (September 28, 2022).
---------------------------------------------------------------------------

    If the FAA has previously assessed a State of the Operator and that 
State subsequently delegated functions or tasks, such as issuance of 
AOCs by the RSOO, the FAA will review the RSOO formation documentation 
to determine if further assessment to evaluate the continued compliance 
with ICAO standards is required. If the FAA determines it needs to do 
further assessment, the State of the Operator's compliance with ICAO 
standards for issuance of AOCs will be reviewed as part of the annual 
risk assessment for all IASA-categorized States. Based on the result of 
the risk assessment, an IASA of that State may be accomplished as one 
of that year's or future year's IASAs. The FAA does not anticipate 
requiring an IASA reassessment based solely on the inability to 
determine compliance with ICAO standards for the transferred function 
of AOC issuance and the conduct of oversight-related tasks pertaining 
to AOC issuance between an RSOO and member States. The FAA has many 
means to reach out to the RSOO and the member State to obtain 
information concerning questions on compliance. This can involve 
sending letters for clarification and direct discussions to clarify 
issues. However, until the State's ICAO compliance can be validated, 
the RSOO-issued AOC of the operator will not be considered acceptable, 
and no authorization will be granted.
Update the Regulatory Basis for Denial of Applications for Operations 
Specifications
    The FAA is also amending the conditions under which the FAA can 
deny the application for operations specifications in subpart A of part 
129. Prior to this action, Sec.  129.7(c) specifies that an applicant 
must meet five conditions to be issued operations specifications. These 
conditions require that the applicant meets the applicable requirements 
of part 129; holds the economic or exemption authority required by the 
Department of Transportation, applicable to the operations to be 
conducted; complies with the applicable security requirements of 49 CFR 
chapter XII; is properly and adequately equipped to conduct the 
operations described in the operations specifications; and holds a 
valid AOC issued by the State of the Operator. However, Sec.  129.7(d) 
states that the application may be denied if the applicant is not 
properly and adequately equipped to conduct the operations described in 
the operations specifications. The change will expand the basis for 
denial to any of the five conditions listed in Sec.  129.7(c). The 
updates to the regulatory basis for denial of applications for 
operations specifications will not result in any costs. The change will 
align the basis for denial of an application to the conditions that 
must be met for issuance of operations specifications. This will allow 
the FAA to formally deny applications that do not meet the requirements 
of Sec.  129.7(c) instead of the FAA's current practice of holding the 
approval of ineligible applications in abeyance until the conditions 
are met or the applicant withdraws the application. There are no 
specific costs associated with holding an application in abeyance. The 
benefit of allowing denial of an application based on not meeting the 
regulatory criteria is reduction of applications in process and 
ensuring currency of information provided with an application.
B. Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354, 94 
Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 
857, Mar. 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 
111-240, 124 Stat. 2504, Sept. 27, 2010), requires Federal agencies to 
consider the effects of the regulatory action on small business and 
other small entities and to minimize any significant economic impact. 
The term ``small entities'' comprises small businesses, not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    This final rule will update the regulations for applications by 
foreign air carriers and foreign persons for operations specifications 
under part 129. The final rule will apply to foreign air carrier 
operations within the United States and to U.S.-registered aircraft in 
common carriage solely outside the United States. Since this final rule 
only impacts foreign applicants, this rule has no impact on U.S. small 
entities. If an agency determines that a rulemaking will not result in 
a significant economic impact on a substantial number of small 
entities, the head of the agency may so certify under section 605(b) of 
the RFA. Therefore, as provided in section 605(b) and based on the 
foregoing, the head of FAA certifies that this rulemaking will not 
result in a significant economic impact on a substantial number of 
small entities.
C. International Trade Impact Assessment
    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the 
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal 
agencies from establishing standards or engaging in related activities 
that create unnecessary obstacles to the foreign commerce of the United 
States. Pursuant to these Acts, the establishment of standards is not 
considered an unnecessary obstacle to the foreign commerce of the 
United States, so long as the standard has a legitimate domestic 
objective, such as the protection of safety, and does not operate in a 
manner that excludes imports that meet this objective. The statute also 
requires consideration of international standards and, where 
appropriate, that they be the basis for U.S. standards.
    The FAA has assessed the potential effect of this final rule and 
determined that it ensures the safety of the American public by 
allowing the acceptance of AOCs issued by an RSOO when reviewed and 
found acceptable to the Administrator. While this action will result in 
the United States' filing a difference with ICAO regarding compliance 
with ICAO Annex 6, paragraph 4.2.1.1, this rule change results in an 
equivalent action to the standard and is in the public's interest. As a 
result, the FAA does not consider this rule as creating an unnecessary 
obstacle to foreign commerce.

D. Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
governs the issuance of Federal regulations that require unfunded 
mandates. An unfunded mandate is a regulation that requires a State, 
local, or Tribal government or the private sector to incur direct costs 
without the Federal Government having first provided the funds to pay 
those costs. The FAA determined that the final rule will not result in 
the expenditure of $183,000,000 or more by State, local, or

[[Page 101879]]

Tribal governments, in the aggregate, or the private sector, in any one 
year.

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the FAA consider the impact of paperwork and other information 
collection burdens imposed on the public. According to the 1995 
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an 
agency may not collect or sponsor the collection of information, nor 
may it impose an information collection requirement unless it displays 
a currently valid Office of Management and Budget (OMB) control number.
    The FAA has determined that there is no new information collection 
associated with the requirement for application for foreign air carrier 
authorization under 14 CFR part 129. In order to apply for operation 
specifications, the applicant is required to provide a copy of their 
AOC to the FAA. Under the final rule, the FAA intends to rely on 
cooperation of RSOOs to obtain the necessary formation documentation 
referred to in the Sec.  129.1 definition of RSOO. No new information 
is required from the applicant operator if the AOC is issued by an 
RSOO. The burden of validation of the AOC remains with the FAA in 
conjunction with the State of the Operator. Approval to collect such 
information previously was approved by OMB under the provisions of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and was assigned 
OMB Control Number 2120-0749.

F. International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to conform to ICAO 
Standards and Recommended Practices to the maximum extent practicable.
    The FAA has reviewed the corresponding ICAO Standards and 
Recommended Practices and has identified the following differences with 
this final rule. ICAO Annex 6, Part 1, Paragraph 4.2.1.1 requires:

    The operator shall not engage in commercial air transport 
operations unless in possession of a valid AOC issued by the State 
of the Operator.

    This regulatory change to allow the FAA acceptance of RSOO-issued 
AOCs for a member State does not comply with this standard.
    The FAA has determined this regulatory change results in a 
different means of compliance to that of the standard in ICAO Annex 6, 
Part 1, paragraph 4.2.1.1. The FAA intends to notify ICAO of this 
difference.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act (NEPA) in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 5-6.6f for regulations and involves 
no extraordinary circumstances.

VI. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and 
criteria of Executive Order 13132, Federalism. The FAA has determined 
that this action will not have a substantial direct effect on the 
States, or the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, and, therefore, will not have federalism 
implications.

B. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Consistent with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments,\17\ and FAA Order 1210.20, 
American Indian and Alaska Native Tribal Consultation Policy and 
Procedures,\18\ the FAA ensures that Federally Recognized Tribes 
(Tribes) are given the opportunity to provide meaningful and timely 
input regarding proposed Federal actions that have the potential to 
have substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes; or to affect uniquely or significantly 
their respective Tribes. At this point, the FAA has not identified any 
unique or significant effects, environmental or otherwise, on Tribes 
resulting from this final rule.
---------------------------------------------------------------------------

    \17\ 65 FR 67249 (November 6, 2000).
    \18\ FAA Order No. 1210.20 (Jan. 28, 2004), available at 
www.faa.gov/documentLibrary/media/1210.pdf.
---------------------------------------------------------------------------

C. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

    The FAA analyzed this final rule under Executive Order 13211, 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). The FAA has determined that it is 
not a ``significant energy action'' under the Executive order and is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

D. Executive Order 13609, Promoting International Regulatory 
Cooperation

    Executive Order 13609, Promoting International Regulatory 
Cooperation, promotes international regulatory cooperation to meet 
shared challenges involving health, safety, labor, security, 
environmental, and other issues and reduce, eliminate, or prevent 
unnecessary differences in regulatory requirements. The FAA has 
analyzed this action under the policy and agency responsibilities of 
Executive Order 13609. The FAA has determined that this action will 
eliminate differences between U.S. aviation standards and those of 
other civil aviation authorities in States where delegation or transfer 
of the responsibility for issuance of AOCs to an RSOO is permitted.

VII. Additional Information

A. Electronic Access and Filing

    A copy of the NPRM, all comments received, this final rule, and all 
background material may be viewed online at www.regulations.gov using 
the docket number listed above. Electronic retrieval help and 
guidelines are available on the website. It is available 24 hours each 
day, 365 days each year. An electronic copy of this document may also 
be downloaded from the Office of the Federal Register's website at 
www.federalregister.gov and the Government Publishing Office's website 
at www.govinfo.gov. A copy may also be found on the FAA's Regulations 
and Policies website at www.faa.gov/regulations_policies.
    Copies may also be obtained by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW, Washington, DC 20591, or by calling (202) 267-9677. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this final rule, 
including economic analyses and technical reports, may be accessed in 
the electronic docket for this rulemaking.

[[Page 101880]]

B. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. A small entity with questions regarding this 
document may contact its local FAA official or the person listed under 
the FOR FURTHER INFORMATION CONTACT heading at the beginning of the 
preamble. To find out more about SBREFA on the internet, visit 
www.faa.gov/regulations_policies/rulemaking/sbre_act/.

List of Subjects in 14 CFR Part 129

    Administrative practice and procedure, Air carriers, Aircraft, 
Aviation safety, Reporting and recordkeeping requirements, Security 
measures, Smoking.

The Amendments

    For the reasons discussed in the preamble, the Federal Aviation 
Administration amends 14 CFR part 129 as follows:

PART 129--OPERATIONS: FOREIGN AIR CARRIERS AND FOREIGN OPERATORS OF 
U.S.-REGISTERED AIRCRAFT ENGAGED IN COMMON CARRIAGE

0
1. The authority citation for part 129 continues to read as follows:

    Authority:  49 U.S.C. 1372, 40113, 40119, 44101, 44701-44702, 
44705, 44709-44711, 44713, 44716-44717, 44722, 44901-44904, 44906, 
44912, 46105, Pub. L. 107-71 sec. 104.


0
2. Amend Sec.  129.1 by:
0
a. Redesignating paragraph (c)(2) as paragraph (c)(4); and
0
b. Adding a new paragraph (c)(2) and paragraph (c)(3).
    The additions read as follows:


Sec.  129.1  Applicability and definitions.

* * * * *
    (c) * * *
    (2) Regional Safety Oversight Organization means an association or 
organization that comprises a group of member States, which--
    (i) Has provided notification to the International Civil Aviation 
Organization of the scope of tasks and functions delegated or 
transferred to the Regional Safety Oversight Organization, including 
but not limited to: sharing common or harmonized aviation regulations, 
licensing, certification, authorization, approval, and surveillance of 
civil aviation activities, and any legal authority delegated or 
transferred by a member State to the Regional Safety Oversight 
Organization; and
    (ii) Has stipulated the specific tasks, functions, delegations, and 
transfers by member States discussed in paragraph (c)(2)(i) of this 
section, and any other collective understandings of member States in 
Regional Safety Oversight Organization formation documentation, such as 
an agreement, treaty, or informal record, that is available for review 
by the Administrator.
    (3) State of the Operator means the State in which the operator's 
principal place of business is located or, if there is no such place of 
business, the operator's permanent residence.
* * * * *

0
3. Amend Sec.  129.7 by revising paragraphs (c)(5) and (d) to read as 
follows:


Sec.  129.7  Application, issuance, or denial of operations 
specifications.

* * * * *
    (c) * * *
    (5) Holds a valid air operator certificate, if acceptable to the 
Administrator, issued by:
    (i) The State of the Operator; or
    (ii) A Regional Safety Oversight Organization (RSOO) if the State 
of the Operator is a member State of that RSOO.
    (d) An application may be denied if the Administrator finds that 
the applicant does not meet one or more of the criteria listed in 
paragraph (c) of this section.

0
4. Amend Sec.  129.9 by revising paragraphs (a)(3) and (b)(3) to read 
as follows:


Sec.  129.9  Contents of operations specifications.

    (a) * * *
    (3) The certificate number and validity of the foreign air 
carrier's air operator certificate;
* * * * *
    (b) * * *
    (3) In the case of a foreign air carrier, the certificate number 
and validity of the foreign air carrier's air operator certificate;
* * * * *

    Issued under authority provided by 49 U.S.C. 106(f) and 44701(a) 
in Washington, DC.
Michael Gordon Whitaker,
Administrator.
[FR Doc. 2024-29688 Filed 12-12-24; 4:15 pm]
 BILLING CODE 4910-13-P