[Federal Register: June 8, 2010 (Volume 75, Number 109)]
[Proposed Rules]
[Page 32318-32341]
[DOCID:fr08jn10-32]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 234, 244, 250, 253, 259, and 399

[Docket No. DOT-OST-2010-0140]
RIN No. 2105-AD92

Enhancing Airline Passenger Protections

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

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: The Department of Transportation is proposing to improve the
air travel environment for consumers by: increasing the number of
carriers that are required to adopt tarmac delay contingency plans and
the airports at which they must adhere to the plan's terms; increasing
the number of carriers that are required to report tarmac delay
information to the Department; expanding the group of carriers that are
required to adopt, follow, and audit customer service plans and
establishing minimum standards for the subjects all carriers must cover
in such plans; requiring carriers to include their contingency plans
and customer service plans in their contracts of carriage; increasing
the number of carriers that must respond to consumer complaints;
enhancing protections afforded passengers in oversales situations,
including increasing the maximum denied boarding compensation airlines
must pay to passengers bumped from flights; strengthening, codifying
and clarifying the Department's enforcement policies concerning air
transportation price advertising practices; requiring carriers to
notify consumers of optional fees related to air transportation and of
increases in baggage fees; prohibiting post-purchase price increases;
requiring carriers to provide passengers timely notice of flight status
changes such as delays and cancellations; and prohibiting carriers from
imposing unfair contract of carriage choice-of-forum provisions. The
Department is proposing to take this action to strengthen the rights of
air travelers in the event of oversales, flight cancellations and long
delays, and to ensure that passengers have accurate and adequate
information to make informed decisions when selecting flights. In
addition, the Department is considering several measures, including
banning the serving of peanuts on commercial airlines, to provide
greater access to air travel for the significant number of individuals
with peanut allergies.

DATES: Comments should be filed by August 9, 2010. Late-filed comments
will be considered to the extent practicable.

ADDRESSES: You may file comments identified by the docket number DOT-
OST-2010-0140 by any of the following methods:
     Federal eRulemaking Portal: go to http://
www.regulations.gov and follow the online instructions for submitting
comments.
     Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Ave., SE., Room W12-140, Washington, DC
20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Ave., SE., between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal Holidays.
     Fax:<PHONE_NUMBER>.
    Instructions: You must include the agency name and docket number
DOT-OST-2010-XXXX or the Regulatory Identification Number (RIN) for the
rulemaking at the beginning of your comment. All comments received will
be posted without change to http://www.regulations.gov, including any
personal information provided.
    Privacy Act: Anyone is able to search the electronic form of all
comments received in any of our dockets by the name of the individual
submitting the comment (or signing the comment if submitted on behalf
of an association, a business, a labor union, etc.). You may review
DOT's complete Privacy Act statement in the Federal Register published
on April 11, 2000 (65 FR 19477-78), or you may visit http://
DocketsInfo.dot.gov.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov or to the street
address listed above. Follow the online instructions for accessing the
docket.

FOR FURTHER INFORMATION CONTACT: Daeleen Chesley 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,<PHONE_NUMBER> (phone),<PHONE_NUMBER> (fax),
<EMAIL_ADDRESS>or<EMAIL_ADDRESS>(e-mail).

SUPPLEMENTARY INFORMATION:

Pilot Project on Open Government and the Rulemaking Process

    On January 21st, 2009, President Obama issued a Memorandum on

Transparency and Open Government in which he described how ``public
engagement enhances the Government's effectiveness and improves the
quality of its decisions'' and how ``knowledge is widely dispersed in
society, and public officials benefit from having access to that
dispersed knowledge.'' To support the President's open government
initiative, DOT plans to continue its partnership with the Cornell
eRulemaking Initiative (CeRI) in a pilot project, Regulation Room, to
discover the best ways of using Web 2.0 and social networking
technologies to: (1) Alert the public, including those who sometimes
may not be aware of rulemaking proposals, such as individuals, public
interest groups, small businesses, and local government entities, that
rulemaking is occurring in areas of interest to them; (2) increase
public understanding of each proposed rule and the rulemaking process;
and (3) help the public formulate more effective individual and
collaborative input to DOT. We anticipate, over the course of several
rulemaking initiatives, that CeRI will use different Web technologies
and approaches to enhance public understanding and participation, work
with DOT to evaluate the advantages and disadvantages of these
techniques, and report their findings and conclusions on the most
effective use of social networking technologies in this area.
    DOT and the Obama Administration are striving to increase effective
public involvement in the rulemaking process and strongly encourage all
parties interested in this rulemaking to visit the Regulation Room Web
site, http://www.regulationroom.org, to learn about the rule and the
rulemaking process, to discuss the issues in the rule with other
persons and groups, and to participate in drafting comments that will
be submitted to DOT. A Summary of the discussion that occurs on the
Regulation Room site and participants will have the chance to review a
draft and suggest changes before the Summary is submitted. Participants
who want to further develop ideas contained in the Summary, or raise
additional points, will have the opportunity to collaboratively draft
joint comments that will be also be submitted to the rulemaking docket
before the comment period closes.
    Note that Regulation Room is not an official DOT Web site, and so
participating in discussion on that site is not the same as commenting
in the rulemaking docket. The Summary of discussion and any joint
comments prepared collaboratively on the site will become comments in
the docket when they are submitted to DOT by CeRI. At any time during
the comment period, anyone using Regulation Room can also submit
individual views to the rulemaking docket through the federal
rulemaking portal Regulations.gov, or by any of the other methods
identified at the beginning of this Notice. For questions about this
project, please contact Brett Jortland in the DOT Office of General
Counsel at<PHONE_NUMBER> or<EMAIL_ADDRESS>
Summary of Preliminary Regulatory Analysis

    The preliminary regulatory analysis suggests that the benefits of
the proposed requirements exceed its costs, even without considering
non-quantifiable benefits. This analysis, outlined in the table below,
finds that the expected net present value of the rule for 10 years at a
7% discount rate is estimated to be $61.6 million. At a 3% discount
rate, the expected net present value of the rule is estimated to be
$75.7 million.

------------------------------------------------------------------------
                                                          Present value
                                                            (millions)
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Total Quantified Benefits:
    10 Years, 7% discounting...........................            $87.6
    10 Years, 3% discounting...........................            104.2
Total Quantified Costs:
    10 Years, 7% discounting...........................             26.0
    10 Years, 3% discounting...........................             28.5
Net Benefits:
    10 Years, 7% discounting...........................             61.6
    10 Years, 3% discounting...........................             75.7
------------------------------------------------------------------------

A comparison of the estimated benefits and costs for each of the 11
proposed requirements is provided in the Regulatory Analysis and
Notices section, along with information on additional benefits and
costs for which quantitative estimates could not be developed.

Background

    On December 8, 2008, the Department published a Notice of Proposed
Rulemaking (NPRM) on enhancing airline passenger protections. See 73 FR
74586 (December 8, 2008). After reviewing and considering the comments
on the NPRM, on December 30, 2009, the Department published a final
rule in which the Department required certain U.S. air carriers to
adopt contingency plans for lengthy tarmac delays; respond to consumer
problems; post flight delay information on their Web sites; and adopt,
follow, and audit customer service plans. The rule also defined
chronically delayed flights and deemed them to be an ``unfair and
deceptive'' practice. That rule took effect on April 29, 2010. See 74
FR 68983 (December 30, 2009).
    In the preamble to the final rule, the Department noted that it
planned to review additional ways to further enhance protections
afforded airline passengers and listed a number of subject areas that
it was considering addressing in a future rulemaking. The areas
specifically mentioned as being under consideration were as follows:
(1) DOT review and approval of contingency plans for lengthy tarmac
delays ; (2) reporting of tarmac delay data; (3) standards for customer
service plans; (4) notification to passengers of flight status changes;
(5) inflation adjustment for denied boarding compensation; (6)
alternative transportation for passengers on canceled flights; (7) opt-
out provisions where certain optional services are pre-selected for
consumers at an additional cost (e.g., travel insurance, seat
selection); (8) contract of carriage venue designation provisions; (9)
baggage fees disclosure; (10) full fare advertising; and (11) responses
to complaints about charter service. This NPRM addresses most of those
issues, as well as other matters that we believe are necessary to
ensure fair treatment of passengers. We have described each proposal in
this NPRM in detail below and invite all interested persons to comment.

Notice of Proposed Rulemaking

1. Tarmac Delay Contingency Plans

    The Department's final rule entitled ``Enhancing Airline Passenger
Protections,'' which was published in the Federal Register on December
30, 2009 (74 FR 68983), requires, among other things, that U.S.
carriers adopt tarmac delay contingency plans that include, at a
minimum, the following: (1) An assurance that, for domestic flights,
the U.S. carrier will not permit an aircraft at a medium or large hub-
airport to remain on the tarmac for more than three hours unless the
pilot-in-command determines there is a safety-related or security-
related impediment to deplaning passengers, or Air Traffic Control
advises the pilot-in-command that returning to the gate or permitting
passengers to disembark elsewhere would significantly disrupt airport
operations; (2) for international flights that depart from or arrive at
a U.S. airport, an assurance that the U.S. carrier will not permit an
aircraft to remain on the tarmac for more than a set number of hours,
as determined by the carrier in its plan, before allowing passengers to
deplane, unless the pilot-in-command determines there is a safety-
related or security-related reason precluding the aircraft from doing
so, or Air Traffic Control advises the pilot-in-command that returning
to the gate or permitting passengers to disembark elsewhere would
significantly disrupt airport operations; (3) for all flights, an
assurance that the U.S. carrier will provide adequate food and potable
water no later than two hours after the aircraft leaves the gate (in
the case of a departure) or touches down (in the case of an arrival) if
the aircraft remains on the tarmac, unless the pilot-in-command
determines that safety or security requirements preclude such service;
(4) for all flights, an assurance of operable lavatory facilities, as
well as adequate medical attention if needed, while the aircraft
remains on the tarmac; (5) an assurance of sufficient resources to
implement the plan; and (6) an assurance that the plan has been
coordinated with airport authorities at all medium and large hub
airports that the U.S. carrier serves, including medium and large hub
diversion airports. The final rule also requires U.S. carriers to
retain for two years the following information on any tarmac delay that
lasts at least three hours: the length of the delay, the specific cause
of the delay, and the steps taken to minimize hardships for passengers
(including providing food and water, maintaining lavatories, and
providing medical assistance); whether the flight ultimately took off
(in the case of a departure delay or diversion) or returned to the
gate; and an explanation for any tarmac delay that exceeded three
hours, including why the aircraft did not return to the gate by the
three-hour mark.
    This NPRM proposes to strengthen the protections for consumers by
making substantive changes in four areas: Requiring foreign air
carriers to adopt tarmac delay contingency plans, increasing the number
of airports at which carriers must adhere to their plans to include
U.S. small and non-hub airports, requiring carriers to coordinate their
tarmac delay contingency plans with all U.S. airports they serve, and
requiring carriers to communicate with passengers during tarmac delays.
More specifically, the NPRM proposes to require any foreign air carrier
that operates scheduled passenger or public charter service to and from
the U.S. using any aircraft originally designed to have a passenger
capacity of 30 or more passenger seats to adopt a tarmac delay
contingency plan that includes minimum assurances identical to those
currently required of U.S. carriers for the latter's international
flights. As proposed, it would apply to all of a foreign carrier's
flights to and from the U.S., including those involving aircraft with
fewer than 30 seats if a carrier operates any aircraft originally
designed to have a passenger capacity of 30 or more seats to or from
the U.S. The NPRM also proposes to require that U.S. and foreign air
carriers coordinate their contingency plans with all airports they
serve (small and non-hub airports as well as the medium and large hub
airports covered by the existing rule) and with the Transportation
Security Administration (TSA) and U.S. Customs and Border Protection
(CBP) for any U.S. airport that the carrier regularly uses for its
international flights, including diversion airports.
    Under the proposed rule, the tarmac delay contingency plans would
cover operations at each U.S. large hub airport, medium hub airport,
small hub airport and non-hub U.S. airport. Further, the NPRM proposes
to require that U.S. and foreign air carriers update passengers every
30 minutes during a tarmac delay regarding the status of their flight
and the reasons for the tarmac delay. The regulation would specify that
the Department would consider failure to comply with any of the
assurances that are required by this rule to be contained in a
carrier's tarmac delay contingency plan to be an unfair and deceptive
practice within the meaning of 49 U.S.C. 41712 and subject to
enforcement action.
    We are proposing these regulations because the Department believes
that it is important to ensure that passengers on all international
flights to and from the United States are afforded protection from
unreasonably lengthy tarmac delays. As is the case under the existing
rule for international flights of covered U.S. carriers, at this time,
we intend to allow foreign carriers to develop and implement a
contingency plan for lengthy tarmac delays that has more flexible
requirements than those that apply to domestic flights with regard to
the time limit to deplane passengers. Also, as in our initial
rulemaking to enhance airline passenger protections, this limit will
allow exceptions for considerations of safety, security and for
instances in which Air Traffic Control advises the pilot-in-command
that returning to the gate or permitting passengers to disembark
elsewhere would significantly disrupt airport operations. It is worth
noting that there are ongoing questions as to whether mandating a
specific time frame for deplaning passengers on international flights
is in the best interest of the public; a number of arguments have been
presented for not imposing such a limit. Most international flights
operate less frequently than most domestic flights, potentially
resulting in much greater harm to consumers if carriers cancel these
international flights (e.g., passengers are less likely to be
accommodated on an alternate flight in a reasonable period of time). We
ask interested persons to comment on whether any final rule that we may
adopt should include a uniform standard for the time interval after
which U.S. or foreign air carriers would be required to allow
passengers on international flights to deplane. Commenters who support
the adoption of a uniform standard should propose specific amounts of
time and state why they believe these intervals to be appropriate.
    We also seek comment on the cost burdens and benefits should the
requirement to have a contingency plan be narrowed or expanded. For
example, while we are proposing here to include foreign carriers that
operate aircraft originally designed to have a passenger capacity of 30
or more seats to and from the U.S., we invite interested persons to
comment on whether, in the event that we adopt a rule requiring foreign
carriers to have contingency plans, we should limit its applicability
to foreign air carriers that operate large aircraft to and from the
U.S.--i.e., aircraft originally designed to have a maximum passenger
capacity of more than 60

seats. We also seek comment on whether we should expand coverage of the
requirement to adopt tarmac delay contingency plans so that the
obligation to adopt such a plan and adhere to its terms is not only the
responsibility of the operating carrier but also the carrier under
whose code the service is marketed if different. In addition, should
coverage be further expanded to require U.S. airports to adopt tarmac
delay contingency plans? Proponents of these or other alternative
proposals should provide arguments and evidence in support of their
position, as should opponents.
    In the initial rulemaking to enhance airline passenger protections,
we decided to implement a rule requiring certain U.S. carriers to
coordinate their contingency plans with large-hub and medium-hub
airports, as well as diversion airports that the carrier serves. Those
airports are the only ones covered by the current rule. We are
proposing to extend this requirement to small and non-hub airports and
to require all covered carriers (U.S. and foreign) to coordinate their
plans with each U.S. large hub airport, medium hub airport, small hub
airport and non-hub U.S. airport that they serve as well as TSA and
CBP. The Department believes that the same issues and discomfort to
passengers during an extended tarmac delay are likely to occur
regardless of airport size or layout. We also strongly believe that it
is essential that airlines involve airports and appropriate Federal
agencies in developing their plans to enable them to effectively meet
the needs of passengers. As such, we are proposing to extend this rule
to require covered carriers to coordinate their plans with each U.S.
large hub airport, medium hub airport, small hub airport and non-hub
U.S. airport to which they regularly operate scheduled passenger or
public charter service.
    As recommended by the Tarmac Delay Task Force, we are also
proposing to require carriers to include CBP and TSA in their
coordination efforts for any U.S. diversion airport which they
regularly use. We believe this proposal is necessary, as it has come to
the Department's attention on more than one occasion passengers on
international flights were held on diverted aircraft for extended
periods of time because there was no means to process those passengers
and allow them access to terminal facilities. The Department of
Homeland Security has advised this Department that, subject to
coordination with CBP regional directors, passengers on diverted
international flights may be permitted into closed terminal areas
without CBP screening. We invite interested persons to comment on this
proposal. What costs and benefits would result from this requirement?
Is it workable to include small and non-hub airports served by a
carrier? Should the rule be expanded to include other commercial U.S.
airports (i.e., those with less than 10,000 annual enplanements)? We
are soliciting comments from airlines, airports and other industry
entities on whether there are any special operational concerns
affecting such airports.
    The Department has also given consideration to passengers'
frustration with lack of communication by carrier personnel about the
reasons a flight is experiencing a long tarmac delay. It does not seem
unreasonable or unduly burdensome to require carriers to address this
issue and verbally inform passengers as to the flight's operational
status on a regular basis during a lengthy tarmac delay. As such, the
Department is proposing a rule requiring carriers to announce to
passengers on covered flights every 30 minutes the reasons for the
delay, and/or the operational status of the flight. We do not
anticipate that a carrier's flight crews will know every nuance of the
reason for the delay, but we do expect them to inform passengers of the
reasons of which they are aware and to make reasonable attempts to
acquire information about the reason(s) for that delay. We also invite
comment on whether carriers should be required to announce that
passengers may deplane from an aircraft that is at the gate or other
disembarkation area with the door open. The Department's Office of
Aviation Enforcement and Proceedings has previously explained that a
tarmac delay begins when passengers no longer have an option to get off
of the aircraft, which usually occurs when the doors of the aircraft
are closed, and encouraged carriers to announce to passengers on
flights that remain at the gate with the doors open that the passengers
are allowed off the aircraft if that is the case. However, such an
announcement is not explicitly required in the existing rule. We seek
comment on the benefit to consumers of mandating such announcements.
Commenters, including carriers and carrier associations, should also
address any costs and/or operational concerns related to implementing a
rule requiring such announcements.

2. Tarmac Delay Data

    We are proposing to require all carriers that must comply with 14
CFR 259.4, which requires carriers to adopt contingency plans for
lengthy tarmac delays, file tarmac delay data with the Department to
the extent they are not already required to file such data pursuant to
14 CFR part 234. Incidents of lengthy tarmac delays have captured much
public attention in recent years and have been the focus of
considerable Department attention as well. On October 1, 2008, the
Department's Bureau of Transportation Statistics (BTS) began collecting
more detailed tarmac delay information from all U.S. carriers that file
the ``On-Time Flight Performance Report'' (BTS Form 234) under 14 CFR
part 234, ``reporting carriers''. The data do not, however, provide a
complete picture of tarmac delays, as the reporting carriers only
submit data concerning their scheduled domestic flights as a function
of their being required to report on-time performance data. These
reporting carriers currently constitute the 16 largest U.S. carriers by
scheduled-service passenger revenue, plus two carriers that voluntarily
file the report. In addition, smaller U.S. carriers which are subject
to the Department's contingency plan rule that was effective April 29,
2010, do not currently submit any tarmac delay data to the Department
and foreign air carriers which we are proposing in this NPRM adopt
tarmac delay contingency plans also do not submit tarmac delay data to
the Department.
    While a single incident of tarmac delay may be attributed to one or
more causes, such as air traffic congestion, weather related delays,
mechanical problems, and/or flight dispatching logistic failures, we
believe that an initial and essential step toward finding solutions for
the tarmac delay problem, whether by government regulations and/or
through voluntary actions by the airlines, and monitoring the effect on
consumers of lengthy tarmac delays, is to obtain more complete data on
these incidents. Therefore, we are tentatively of the opinion that we
should expand the pool of carriers that must file information with the
Department regarding tarmac delays to U.S. carriers and foreign
carriers that operate any aircraft originally designed with a passenger
capacity of 30 or more passenger seats with respect to their operations
at U.S. airports. The more complete picture of lengthy tarmac delays
afforded by these new data will help establish a vital platform for the
Department's future rulemaking and policy decision-making, for FAA
airport and air traffic control infrastructure and technology
modification and improvement, and for system operating improvements and
reform by the airline

industry. Furthermore, the result of such analysis will provide the
Department, the industry, and the public more precise data with which
to compare tarmac delay incidents by carrier, by airport, and by
specific time frame.
    This rule as proposed would apply to all U.S. carriers that are
covered by the Department's existing rule requiring tarmac delay
contingency plans, as well as foreign carriers that we are proposing,
in this NPRM, be required to adopt tarmac delay contingency plans (see
proposed changes to 14 CFR 259.4). Thus, this proposal would cover
tarmac delays at U.S. airports by all U.S. certificated and commuter
carriers that operate any aircraft originally designed to have a
passenger capacity of 30 or more seats. It also would cover tarmac
delays at U.S. airports by all foreign carriers that operate passenger
service to and from the U.S. using any aircraft originally designed to
have a passenger capacity of 30 or more seats. We seek comment on
whether we should limit the requirement to file tarmac delay data to
U.S. and foreign air carriers that operate large aircraft to and from
the U.S.--i.e., aircraft originally designed to have a maximum
passenger capacity of more than 60 seats. Commenters should explain why
they favor such a limitation and suggest alternate approaches to
capturing tarmac delay data.
    We note that using just one qualifying aircraft (i.e., originally
designed to have a passenger capacity of 30 or more passenger seats)
will cause all of a U.S. carrier's flights to be covered by this rule.
The same is true of a foreign carrier's flights that originate or
terminate at a U.S. airport. For example, if a foreign carrier operates
any aircraft to or from the U.S. that was originally designed to have a
passenger capacity of 30 or more seats, all of its flight taking off or
landing at a U.S. airport, regardless of size of aircraft and seating
capacity, will be subject to the reporting requirements of the proposed
rule.
    We are mindful of the costs associated with submitting data to the
Department, especially in light of the relatively limited resources of
smaller carriers and the relatively fewer flights to and from the U.S.
by foreign carriers and we do not intend with this proposal to impose a
comprehensive on-time reporting scheme, as exists for the largest U.S.
carriers now covered by Part 234. With this concern in mind, using the
Part 234 requirements as a model, we have narrowed the data fields we
propose to be reported to those we believe are necessary for us to
extract necessary tarmac delay information. In addition, we propose to
require these tarmac delay data to be reported each month only with
respect to tarmac delays of 3 hours or more.
    We recognize that carriers subject to our new contingency plan rule
that went into effect April 29, 2010, are required to retain for two
years certain information regarding tarmac delays of 3 hours or more.
We note that the reporting requirement proposed in this notice is
separate and distinct from that information retention requirement, with
a different purpose. Where that rule is focused on carrier compliance
with consumer protection-related requirements and requires only that
carriers retain the information for a limited period of time, we
propose here that carriers report monthly a set of data regarding
tarmac delays that will provide the Department more complete
information on lengthy tarmac delays throughout the air transportation
system in the U.S. The Department plans to publish a summary of this
information in its Air Travel Consumer Report, a monthly publication
product of the Department of Transportation's Office of Aviation
Enforcement and Proceedings that is designed to assist consumers with
information on the quality of services provided by airlines. We welcome
suggestions from the public and the industry on whether there are other
means to further reduce the carriers' burden yet still effectively
achieve the goal of this proposal.

3. Customer Service Plans

    Under the final rule published on December 30, 2009, U.S. carriers
are required to adopt customer service plans for their scheduled
flights that address, at a minimum, the following service areas: (1)
Offering the lowest fare available; (2) notifying consumers of known
delays, cancellations, and diversions; (3) delivering baggage on time;
(4) allowing reservations to be held or cancelled without penalty for a
defined amount of time; (5) providing prompt ticket refunds; (6)
properly accommodating disabled and special-needs passengers, including
during tarmac delays; (7) meeting customers' essential needs during
lengthy on-board delays; (8) handling ``bumped'' passengers in the case
of oversales with fairness and consistency; (9) disclosing travel
itinerary, cancellation policies, frequent flyer rules, and aircraft
configuration; (10) ensuring good customer service from code-share
partners; (11) ensuring responsiveness to customer complaints; and (12)
identifying the services they provide to mitigate passenger
inconveniences resulting from flight cancellations and misconnections.
The rule also requires U.S. carriers to audit their plan annually and
make the results of their audits available for the Department's review
upon request.
    This NPRM proposes to increase the protections afforded consumers
in that recent final rule by requiring foreign air carriers to adopt,
follow, and audit customer service plans and establishing minimum
standards for what must be included in the customer service plans of
all covered carriers (U.S. and foreign). We are proposing to cover
foreign air carriers operating scheduled passenger service to and from
the U.S. using any aircraft originally designed to have a passenger
capacity of 30 or more passenger seats. The rule would apply to all
flights to and from the U.S. of those carriers, including flights
involving aircraft with fewer than 30 seats if a carrier operates any
aircraft with 30 or more passenger seats to and from the U.S. We ask
interested persons to comment on whether the proposed requirement for
foreign air carriers to adopt, follow and audit customer service plan
should be narrowed in some fashion--e.g., should never apply to
aircraft with fewer than 30 seats?
    Each foreign carrier's plan would have to address the same subjects
currently required of U.S. carriers in the Department's rule to enhance
airline passenger protections. We are also proposing to require that
foreign air carriers make the results of their audits of their customer
service plans available for the Department's review upon request for
two years following the date any audit is completed. A carrier's
failure to adopt a customer service plan for its scheduled service,
adhere to its plan's terms, audit its own adherence to its plan
annually or make the results of its audits available for the
Department's review upon request would be considered an unfair and
deceptive practice within the meaning of 49 U.S.C. 41712 and subject to
enforcement action.
    A substantial number of air travelers fly to and from the United
States on flights operated by foreign carriers, whether through a code-
share arrangement or by directly arranging for that transportation. By
requiring foreign carriers to adopt plans, audit their own compliance,
and make the results of their audits available for us to review, we
intend to afford consumers better protection on nearly all flights to
and from the United States, not just those of the U.S. carriers to
which the rule is currently applicable. The Department is soliciting
comment on the costs and benefits associated with this requirement. We
would like foreign carriers to comment on whether similar

plans already exist, and if so, how they currently implement such
plans.
    The Department also proposes to require covered carriers' customer
service plans meet minimum standards to ensure that the carriers' (U.S.
and foreign) plans are specific and enforceable. The Department is
concerned that many carriers' customer service plans are not specific
enough for a consumer to have realistic expectations of the types of
services a carrier will provide under its plan, or that some carriers
may not be living up to their customer service commitments. Based on a
review of existing customer service plans, the Department found that
some carriers' plans do contain specifics regarding the type of
services a consumer can expect (e.g., returning baggage by a specified
time after the flight or holding reservations without charge for a
specific period of time), while others carriers' plans are vaguely
written making it difficult for a consumer to know how a carrier will
address those subjects or whether a carrier has fulfilled its promises.
As such, the Department believes establishing minimum standards for the
plans will result in consumers being better informed and protected. As
always carriers are free to set higher standards than those mandated by
the Department. We also note that all of the subjects for which we are
proposing to require a standard are already required to be included in
the customer service plans for U.S. carriers (e.g., oversales/denied
boarding compensation, refunds), which should minimize the burden on
these carriers to comply with the proposed new requirement to establish
standards for those subjects. In addition, when determining what
minimum standards to apply to these plans, the Department reviewed
customer service plans as currently implemented by a number of
carriers, and chose the services already provided by some carriers that
appear to be ``best practices.''
    We seek comment on both the costs and benefits of requiring
carriers to adopt these minimum standards. The minimum standards that
we are proposing are as follows: (1) Offering the lowest fare available
on the carrier's Web site, at the ticket counter, or when a customer
calls the carrier's reservation center to inquire about a fare or to
make a reservation; (2) notifying consumers in the boarding gate area,
on board aircraft, and via a carrier's telephone reservation system and
its Web site of known delays, cancellations, and diversions; (3)
delivering baggage on time, including making every reasonable effort to
return mishandled baggage within twenty-four hours and compensating
passengers for reasonable expenses that result due to delay in
delivery; (4) allowing reservations to be held at the quoted fare
without payment, or cancelled without penalty, for at least twenty-four
hours after the reservation is made; (5) where ticket refunds are due,
providing prompt refunds for credit card purchases as required by 14
CFR 374.3 and 12 CFR part 226, and for cash and check purchases within
20 days after receiving a complete refund request; (6) properly
accommodating passengers with disabilities as required by 14 CFR part
382 and for other special-needs passengers as set forth in the
carrier's policies and procedures, including during lengthy tarmac
delays; (7) meeting customers' essential needs during lengthy tarmac
delays as required by 14 CFR 259.4 and as provided for in each covered
carrier's contingency plan; (8) handling ``bumped'' passengers with
fairness and consistency in the case of oversales as required by 14 CFR
part 250 and as described in each carrier's policies and procedures for
determining boarding priority; (9) disclosing cancellation policies,
frequent flyer rules, aircraft configuration, and lavatory availability
on the selling carrier's Web site, and upon request, from the selling
carrier's telephone reservations staff; (10) notifying consumers in a
timely manner of changes in their travel itineraries; (11) ensuring
good customer service from code-share partners operating a flight,
including making reasonable efforts to ensure that its code-share
partner(s) have comparable customer service plans or provide comparable
customer service levels, or have adopted the identified carrier's
customer service plan; (12) ensuring responsiveness to customer
complaints as required by 14 CFR 259.7; and (13) identifying the
services it provides to mitigate passenger inconveniences resulting
from flight cancellations and misconnections.
    With regard to delivering baggage on time, we solicit comment on
whether we should also include as standards (1) that carriers reimburse
passengers the fee charged to transport a bag if that bag is lost or
not timely delivered, as well as (2) the time when a bag should be
considered not to have been timely delivered (e.g., delivered on same
or earlier flight than the passenger, delivered within 2 hours of the
passenger's arrival). With regard to providing prompt refunds, we seek
comment on whether we should also include as a standard that carriers
refund ticketed passengers, including those with non-refundable
tickets, for flights that are canceled or significantly delayed if the
passenger chooses not to travel as a result of the travel disruption.
The Department's Aviation Enforcement Office has issued notices in the
past advising airlines that it would be an unfair and deceptive
practice in violation of 49 USC 41712 for a carrier to apply its non-
refundability provision in the event of a significant change in
scheduled departure or arrival time, whether it be due to carrier
action or a matter out of the carrier's control, including ``acts of
god.'' We request comment on the methodology for defining a significant
delay in the event such a standard is adopted. Should the Department
establish a bright line rule that any delay of 3 hours or more is a
significant delay? Should the determination of whether a flight has
been significantly delayed be based on the duration of the flight
(e.g., is 3 hours a significant delay on flights of two hours or less
and 4 hours a significant delay on flights of more than two hours)?
    With respect to notifying passengers on board aircraft of delays,
we seek comment on how often updates should be provided and whether we
should require that passengers be advised when they may deplane from
aircraft during lengthy tarmac delays. For example, we have received
complaints from passengers that their aircraft has returned to the gate
less than three hours after departure for emergency or mechanical
reasons but they were not advised that they could deplane. Carriers may
feel the 3-hour tarmac delay limit has been tolled by such a gate
return, but passengers feel they were not truly afforded the
opportunity to deplane within the meaning of this rule.
    As for the customer service commitment to provide prompt refunds
where ticket refunds are due, we invite comment on whether it is
necessary to include as a standard the requirement that when a flight
is cancelled carriers must refund not only the ticket price but also
any optional fees charged to a passenger for that flight (e.g., baggage
fees, ``service charges'' for use of frequent flyer miles when the
flight is canceled by the carrier). Irrespective of whether such a
standard is included in a carrier's customer service commitment, the
Department would view a carrier's failure to provide a prompt refund to
a passenger of the ticket price and related optional fees when a flight
is canceled to be an unfair and deceptive practice. We request comment
as to whether it is workable to set minimum standards for any of the
subjects contained in the customer

service plans and invite those that oppose the notion of the Department
setting minimum standards for customer service plans as unduly
burdensome to provide evidence of the costs that they anticipate. We
further invite comment or suggestions on the type of standards that
should be set.
    Although the subjects we are proposing that foreign air carriers
address in their customer service plans are identical to those U.S.
carriers already are required to include in their customer service
plans, we request comment on whether any of these subjects would be
inappropriate if applied to a foreign air carrier. Why or why not?
Moreover, we seek comment on whether the Department should require that
all airlines address any other subject in their customer service plans.
For example, should mandatory disclosure to passengers and other
interested parties of past delays or cancellations of particular
flights before ticket purchase be a new subject area covered in
customer service plans? If so, what should be the minimum timeliness/
cancellation standard? In this regard, there is already a requirement
for reporting carriers (i.e., the largest U.S. carriers) to post flight
delay data on their Web sites and for their reservation agents to
disclose to customers, upon request, the on-time performance code of a
flight. Should more direct and mandatory disclosure be required, e.g.,
a required warning before the final purchase decision is made regarding
chronically late or routinely canceled flights? We also seek comment on
the appropriate minimum timeliness/cancellation standard for U.S.
carriers and foreign air carriers that do not report on time
performance data to DOT if we were to adopt a requirement that airlines
address notification to consumers of past delays or cancellation in
their customer service plans.

4. Contracts of Carriage

    The Department is proposing to adopt a rule requiring carriers
(U.S. and foreign) to include their contingency plans and customer
service plans in their contracts of carriage. We first proposed this
requirement in the notice of proposed rulemaking on enhancing airline
passenger protections which was published in the Federal Register on
December 8, 2008. Ultimately, the Department decided not to require
such incorporation at that time and instead strongly encouraged
carriers to voluntarily incorporate the terms of their tarmac delay
contingency plans in their contracts of carriage, as most major
carriers had already done with respect to their customer service plans.
The Department did require that each U.S. carrier with a Web site post
its entire contract of carriage on its Web site in easily accessible
form, including all updates to its contract of carriage. The Department
also indicated that it would address this issue in a future rulemaking
and take into account, among other things, whether the voluntary
incorporation of contingency plan terms had resulted in sufficient
protections for air travelers.
    The Department continues to believe that the airlines'
incorporation of their contingency plans into their contracts of
carriage is an important means of providing notice to consumers of
their rights, since that information will then be contained in a
readily available source. Carriers' contracts of carriage are generally
posted online and must, by Department rule, be available at airports.
Better informed consumers will further improve the Department's
enforcement program as consumers are more likely to know of and report
incidents where airlines do not adhere to their plans. Better consumer
information will also create added incentive for carriers to adhere to
their plans. Further, by placing the contingency plan terms in the U.S.
selling carrier's contract of carriage both that carrier and its
foreign code share partner carrier are responsible in an enforcement
context for compliance, which we view as a beneficial aspect of this
proposal. We also continue to be confident that we have the authority
to require such incorporation based on our broad authority under 49
U.S.C. 41712 to prohibit unfair and deceptive practices, and under 49
U.S.C. 41702 to ensure safe and adequate transportation, which clearly
encompasses the regulation of contingency plans.
    In the December 30, 2009, final rule to enhance airline passenger
protections, we stated that we intended to closely monitor carriers'
responses to our efforts in this regard and that we would not hesitate
to revisit our decision in another rulemaking. As it appears that many
carriers are choosing not to place their contingency plans and/or
customer service plans in their contracts of carriage, or have little
incentive to do so, and because we believe the incorporation of airline
contingency plans in contracts of carriage to be in the public
interest, we are again proposing the implementation of this
requirement.
    As stated previously, the Department recognizes that many
passengers travel to and from the U.S. on flights operated by foreign
carriers, and they should have adequate passenger protections on those
flights. As such, we propose to include foreign carriers in the
requirement for airlines to place their contingency plans and customer
service plans in their contracts of carriage. The Department is seeking
comment on whether the incorporation of the contingency plans and
customer service plans in the contract of carriage gives consumers
adequate notice of what might happen in the event of a long delay on
the tarmac and/or of passengers' rights under carriers' customer
service plans. As in the past, commenters should also address whether
and to what extent requiring the incorporation of contingency plans in
carriers' contracts of carriage might weaken existing plans: That is,
would the requirement encourage carriers to exclude certain key terms
from their plans in order to avoid compromising their flexibility to
deal with circumstances that can be both complex and unpredictable? We
are also soliciting comment on the proposal to extend this provision to
foreign carriers.

5. Response to Consumer Problems

    The recently issued final rule on enhancing airline passenger
protections requires U.S. carriers that operate scheduled passenger
service using any aircraft originally designed to have a passenger
capacity of 30 or more seats to designate an employee to monitor the
effects on passengers of flight delays, flight cancellations, and
lengthy tarmac delays and to have input into decisions such as which
flights are cancelled and which are subject to the longest delays. It
also requires U.S. carriers to make available the mailing address and
e-mail or Web address of the designated department in the airline with
which to file a complaint about its scheduled service and to
acknowledge receipt of each complaint regarding its scheduled service
to the complainant within 30 days of receiving it and to send a
substantive response to each complainant within 60 days of receiving
it. A complaint is defined as a specific written expression of
dissatisfaction concerning a difficulty or problem which the person
experienced when using or attempting to use an airline's service.
    This proposal would require a foreign air carrier that operates
scheduled passenger service to and from the United States using any
aircraft originally designed to have a passenger capacity of 30 or more
seats to do the same for its flights to and from the U.S. We are
proposing to extend these provisions to foreign carriers as the
Department believes passengers should also be afforded adequate
consumer protection when issues arise with delays

or cancellations on flights to and from the U.S. operated by a foreign
carrier, and should also have an avenue to file a complaint with a
foreign carrier and to expect a timely and substantive response to that
complaint. We invite interested persons to comment on this proposal.
What costs and/or operational concerns would it impose on foreign
carriers and what are the benefits to consumers? In particular, we are
soliciting comments on any operational difficulties U.S. and foreign
airlines may face in responding to consumer complaints received through
social networking mediums such as Facebook or Twitter. Do airlines
currently communicate to customers and prospective customers through
social networking mediums?

6. Oversales

    Part 250 establishes the minimum standards for the treatment of
airline passengers holding confirmed reservations on certain U.S. and
foreign carriers who are involuntarily denied boarding (``bumped'')
from flights that are oversold. In adopting the original oversales rule
in the 1960s, the Civil Aeronautics Board (CAB), the Department's
predecessor in aviation consumer matters, recognized the inherent
unfairness to passengers if carriers were allowed to sell more
confirmed seats than were available. To balance the inconvenience and
financial loss to passengers against the potential benefits brought
about by a controlled overbooking system, i.e., achieving higher load
factors, avoiding the losses caused by last-minute cancellations and
no-shows, enabling more passengers to obtain a reservation on the
flight of their choice, and ultimately reducing fares, the CAB
prescribed a two-part oversales system: Soliciting volunteers first,
then involuntarily ``bumping'' passengers if there are not enough
volunteers, with a minimum standard for denied boarding compensation
(DBC). This system has been in effect for almost half a century and we
believe that its basic structure remains sound.
    In this NPRM, we propose to expand the rule's applicability and
add, modify and clarify certain elements of the rule as part of our
continuing efforts to improve and perfect the system. Specifically, we
are proposing to make five changes to Part 250: (1) Increase the
minimum DBC limits to take account of the increase in the Consumer
Price Index (CPI) since 1978; (2) implement an automatic inflation
adjuster for minimum DBC limits; (3) clarify that DBC must be offered
to ``zero fare ticket'' holders who are involuntarily bumped; (4)
require that a carrier verbally offer cash/check DBC if the carrier
verbally offers a travel voucher as DBC to passengers who are
involuntarily bumped; and (5) require that a carrier inform passengers
solicited to volunteer for denied boarding about its principal boarding
priority rules applicable to the specific flight and all material
restrictions on the use of that transportation.
    The last time the Department revised the minimum DBC amounts was in
a proceeding that began in 2007 and concluded in 2008. Prior to that
date, the DBC limits had not been revised since 1978. In that latest
proceeding, because inflation had eroded the value of the $200 and $400
limits that were established in 1978, we considered various methods for
calculating an increase in the minimum DBC limits (i.e., increasing the
limits on denied boarding compensation based on the consumer price
index (CPI) or on the increase in fare yields, doubling the current
limits, eliminating the limits so there would be no cap on denied
boarding compensation payments). We settled on a rule under which an
eligible passenger who encounters a delay of over one hour due to the
involuntary denied boarding is entitled to compensation equal to either
100% of the passenger's one-way fare up to $400, or 200% of the fare up
to $800, depending on the length of the delay caused by the involuntary
denied boarding. Since May 2008 when the new rule was issued, despite
these higher DBC amounts, we have seen an increase in involuntary
denied boardings. Load factors are also increasing, making it less
likely that ``bumped'' passengers are being conveniently accommodated
on other flights. We are therefore concerned about whether the current
rule adequately encourages carriers to seek volunteers to give up their
seats and whether the minimum DBC amount adequately compensates those
passengers that are involuntarily ``bumped'' from their flights.
    Accordingly, we are proposing to revise the minimum DBC amounts to
more accurately reflect inflation's effect on those amounts since 1978,
the last year those amounts were raised before the most recent rule. We
propose to do so by using the Consumer Price Index for All Urban
Consumers (CPI-U), rounded to the nearest $25, with the base of $200/
$400 for the maximum DBC amounts in the year 1978. This would bring the
maximum DBC amounts for involuntarily oversold passengers to $650/
$1,300 as of January 1, 2010. In addition, we propose to add a
provision to Part 250 that would provide for periodic adjustments to
the minimum DBC limits using the CPI-U, similar to that applied to
minimum baggage liability limits pursuant to 14 CFR part 254. We
believe these amendments will set up the most efficient method to
ensure that the DBC minimum limits, and the monetary incentive for
carriers to reduce involuntary denied boardings, remain current. Since
the periodic adjustments would be the product of a published
mathematical formula, there would be no need to engage in a notice and
comment rulemaking proceeding for each future adjustment.
    We seek comments on whether the proposed increase in DBC minimum
limits is called for and whether any such increase based on the CPI-U
calculation is a reasonable basis for updating those limits or whether
some other amounts would be more appropriate to adequately compensate
passengers for the inconvenience and financial loss brought about by
involuntary denied boarding. If not, by how much should the amounts be
increased, if at all? We also ask for comment on whether we should
completely eliminate minimum compensation limits and simply require
that carriers base DBC to be paid to involuntarily bumped passengers on
100% or 200% of a passenger's fare, without limit, and/or whether the
100% and 200% rates need to be increased in line with the proposed
increase in the $400/$800 compensation limits proposed above, perhaps
to 200% and 400% of the passenger's fare, or higher. This would account
for the fact that the actual cost for flying is likely to have
increased while what is commonly referred to as the ``fare'' may not
have increased as a result of the carriers' current practice of
unbundling fares, i.e., charging extra for once-free amenities, e.g.,
checked baggage, food, preferred seats, etc.
    We are also proposing to clarify that Part 250 applies to
passengers who hold ``zero fare tickets,'' e.g., passengers who
``purchased'' air transportation with frequent flyer mileage or airline
travel vouchers, passengers who travel on so-called ``free'' companion
tickets, or passengers who hold a ``consolidator'' ticket that does not
display a monetary price. For the most part, these ticket holders have
``paid'' only government taxes and fees and, perhaps, carrier-imposed
administrative fees for ticketing. In this regard, we propose to amend
the definition of ``confirmed reserved space'' to specify that zero
fare ticket holders have the same rights and eligibility for DBC as any
other passenger who used cash, check or

credit card to purchase his or her airfare. Passengers with zero-fare
tickets earned those tickets in some fashion, e.g. by exceeding a
particular frequent-flyer threshold, agreeing to accept a travel
voucher as settlement of a consumer claim or complaint, etc.
    When these passengers are involuntarily denied boarding, they, like
passengers who paid fully in money for the tickets, suffer
inconvenience and/or financial losses. We propose that the basis for
determining the amount of DBC due a passenger holding a zero fare
ticket who is involuntarily bumped, i.e., the ``passenger's fare,'' be
the fare of the lowest priced ticket available (paid by cash, check, or
credit card) for a comparable class of ticket on the same flight. For
example, if an involuntarily bumped passenger used frequent flyer miles
to obtain a confirmed, non-refundable roundtrip coach ticket having no
restrictions, the basis for calculating the DBC amount due to that
passenger would be the lowest fare that was available for a confirmed,
roundtrip coach ticket on the same flight. Under this proposal, a
carrier would be required to provide the same form of DBC to zero-fare
passengers as to other passengers denied boarding involuntarily, i.e.
cash or check, or a travel voucher of the passenger's choice under the
conditions described in existing section 250.5(b) if the passenger
agrees. We seek comment not only on whether zero fare ticket holders
should receive DBC under part 250, but also on whether the cash method
described above for calculating DBC to be paid such zero fare ticket
holders is reasonable and would truly capture these passengers' losses
due to being bumped involuntarily to the same extent as for cash/check/
credit ticket holders. This proposal is consistent with guidance DOT
has given to carriers in the past.
    A possible alternative to the above proposed method of compensation
would be to allow carriers to compensate zero fare ticket holders using
the same ``currency'' in which the tickets were obtained. For instance,
under this alternative an involuntarily bumped passenger who used
frequent flyer miles to purchase a ticket would be eligible to be
compensated with mileage, the currency used to obtain that flight.
Under the current rule, this would amount to 100% or 200% of the amount
of mileage that was used to purchase the ticket, plus a cash amount if
appropriate to account for any taxes, fees and administrative costs
paid to obtain the ticket. Similarly, involuntarily bumped passengers
who used a voucher to purchase a ticket, in whole or in part, would be
eligible to be compensated with a voucher worth 100% or 200% of the
value of their original voucher, and an appropriate cash payment if a
portion of the ticket was paid for in that manner. We also seek comment
on any other alternative method of calculating DBC for zero fare ticket
holders that would best quantify the financial loss and inconvenience
to those passengers. How should the rule quantify the value of the
remaining travel portion (either to the next stopover, or if none, to
the final destination) if the DBC were to be paid with frequent flyer
miles?
    Another area that we believe needs further improvement is the
disclosure provisions in our current oversales rule. These provisions
were established because passengers deserve to know about the
possibility, however remote, of an oversale occurring and because only
a well-informed passenger can make a proper choice when faced with the
option of volunteering to be bumped from a flight. We propose in this
proceeding to reinforce required disclosures to ensure that passengers
will be aware of their rights when making decisions regarding whether
to volunteer for denied boarding and/or whether to accept a travel
voucher in lieu of cash or a check as DBC if they are bumped
involuntarily.
    The existing required disclosures can be found in sections 250.2b
250.9 and 250.11. Section 250.2b(b) sets forth conditions and
requirements that carriers must comply with when soliciting volunteers
on an oversold flight. Specifically, it requires that carriers inform
each passenger who is solicited to volunteer to be bumped whether he or
she is in danger of being involuntarily denied boarding and the
compensation to which they would be entitled in that event. In
addition, section 250.9 specifies the written explanation of DBC and
boarding priorities that must be provided to passengers involuntarily
oversold, which statement also must be provided to any person who
requests it at any location a carrier sells tickets and at its boarding
gates. Section 250.11 requires that carriers provide at each station
they or their agents sell tickets a prescribed notice advising persons
of their basic rights in an oversale situation and that they are
entitled to detailed information upon request.
    Despite these required disclosures, we are concerned that
passengers may not be aware of their rights when making decisions
regarding whether to volunteer for denied boarding and/or accept a
travel voucher because of the manner in which carriers offer free or
reduced air transportation. Agents often verbally advise passengers of
the offer of a travel voucher and its amount. Although in the case of
involuntarily bumped passengers, this offer must be accompanied by the
written notice of the passenger's right to insist on DBC by cash or
check, there currently is no express requirement that this notice be
given verbally. We are concerned that these passengers who are verbally
offered a travel voucher may not have time to read the written notice
and are not in fact verbally told by an agent that they are entitled to
compensation by cash or check. Likewise, they may not be adequately
informed of any conditions or limitations placed on the vouchers they
are receiving. Accordingly, we are proposing that in any case in which
a carrier verbally offers an involuntarily bumped passenger free or
reduced-rate air transportation as an alternative to cash DBC, it also
must at the same time verbally advise that passenger of his or her
right to insist on compensation by cash or check and the actual amount
of such compensation that would be due and of any conditions or
restrictions applicable to the vouchers. This proposed requirement
would not, if adopted, alter the carriers' responsibility to provide
the written DBC notice required by section 250.9, nor would it require
carriers in all instances to provide verbal advice to passengers. But
as a practical matter, verbal exchanges between carrier agents and
passengers in oversale situations are the quickest and easiest form of
communication and consumers are entitled to a fair presentation of
their options during such situations. Therefore, if a carrier chooses
to offer a passenger DBC in a form other than cash or check and to do
so verbally, under this proposal it must also verbally advise the
passenger about the cash/check option.
    Furthermore, we are proposing to prohibit carriers from offering or
providing to volunteers solicited to be bumped, or to passengers
involuntarily bumped, free or reduced-rate air transportation other
than on an unrestricted basis, unless the carrier provides direct
verbal notice to such passengers of any restrictions on such free or
reduced rate air transportation. While the written notice required to
be provided passengers under section 250.9 suggests that carriers must
disclose material restrictions in any free or reduced rate compensation
offered, the requirement is not specifically reflected in any section
of the rule itself, a shortcoming that we believe should be remedied.
We ask for comment on our

proposals here as well as on whether there are any other forms of
notice that might better inform passengers being requested to volunteer
to be bumped, or those involuntarily bumped, of their rights and
carriers' obligations.
    The current disclosure rule does not define how the carriers should
describe to passengers who are solicited to volunteer to be bumped the
likelihood of being involuntarily denied boarding. In this NPRM, we
propose to specifically require that carriers must inform the solicited
passengers about their principal boarding priority rules applicable to
the specific flight. Hence, the passengers can apply the boarding
priority rules to their situations and more accurately estimate the
likelihood of their being involuntarily denied boarding. By ``principal
boarding priority rules'' we are referring to procedures such as
bumping passengers involuntarily based on their fare, on when they
checked in, or on whether they held seat assignments. Carriers need not
recite specialized priorities such as those for unaccompanied minors or
passengers with disabilities except where those priorities apply to a
particular passenger. This information is significant if a passenger is
willing to give up his or her confirmed reserved space but could not
determine whether to accept the volunteer compensation offer or to wait
until he or she would be involuntarily bumped. For instance, if the
carrier informs the passengers that it will use the check-in time as
its principal boarding priority criterion, a passenger willing to give
up his or her seat on the flight in exchange for a sufficiently large
cash compensation amount may choose to reject the volunteer
compensation offer if he or she checked in at the last minute, knowing
that the chance of being denied boarding involuntarily is high and that
being involuntarily bumped would require a higher amount of
compensation in cash from the carrier.
    Also material to the solicited passengers as decision makers is the
availability of ``comparable air transportation'' provided to
passengers who are involuntary denied boarding. Under the current DBC
structure, if the passengers can reach their next stopover or, if none,
their final destination within one hour of the planned arrival time of
the original flight, the passengers are not required to be provided
DBC. If the delay for a domestic flight is more than one hour but less
than two hours (four hours for an international flight), the DBC rate
is 100% of the passenger's one-way fare. For delays that exceed this
two/four hour timeframe, the DBC rate is 200% of the passenger's one-
way fare. Thus for a passenger who is considering rejecting the
volunteer offer in hopes of receiving involuntary DBC, it is material
to know how likely it is, if involuntarily denied boarding, that the
passenger's delay would exceed the one/two/four hour(s) limits. We seek
comments on whether we should require this disclosure to every
passenger the carrier solicits to volunteer and if so, what form, e.g.,
verbal or written, the disclosure should take.
    We are also considering expanding the applicability of the
oversales rule to the operations of U.S. certificated and commuter
carriers and foreign carriers using aircraft originally designed for 19
or more seats. Currently, Part 250 applies to all U.S. certificated and
commuter air carriers and foreign carriers with respect to specified
scheduled flight segments using an aircraft originally designed to have
a passenger capacity of 30 or more seats. We have concerns that many
carriers use code-share partners for their connecting services to
smaller points, some of whom operate aircraft with 19-29 seats. Such
flight segments are not covered by part 250, but are associated with
the identity of a large carrier and many, if not most, are ``fee for
service'' flights under the total control of the large carrier, which
controls booking. Should we allow those flights to be oversold at all?
If we do, should Part 250 be applicable in its entirety?

7. Full Fare Advertising

    The Department is proposing to amend its rule on price advertising
(14 CFR 399.84). The Department adopted this rule in 1984, pursuant to
49 U.S.C. 41712 (formerly section 411 of the Federal Aviation Act),
which empowers the Department to prohibit unfair and deceptive
practices and unfair methods of competition in air transportation and
its sale. The rule states that the Department considers any
advertisement that states a price for air transportation that is not
the total price to be paid by the consumer to be an unfair and
deceptive practice in violation of 49 U.S.C. 41712. However, the
Department's enforcement policy regarding this rule has permitted
certain government-imposed charges to be stated separately from this
total price. Under this policy, taxes and fees that are collected by a
carrier on a per-person basis, are imposed by a government entity, and
are not ad valorem in nature are allowed to be excluded from an
advertised fare. The existence, nature, and amount of these additional
taxes and fees must be clearly indicated where the airfare first
appears in the ad, so that the consumer can easily calculate the total
price to be paid. The Department has consistently prohibited sellers of
air transportation from breaking out any other fee, including fuel
surcharges, service fees, and taxes imposed on an ad valorem basis.
This policy has been articulated in a number of industry letters and
guidance documents; see http://airconsumer.dot.gov/rules/guidance.htm.
    The Department is considering changing its enforcement policy
concerning this rule to enforce the ``full price advertising''
provision of the rule as it is written and, consistent with
longstanding Department enforcement policy, to clarify that the rule
applies to ticket agents. This change in enforcement policy would also
include a requirement that all advertisers include all mandatory fees
in the advertised price. Given technological innovations and new
methods of communication, carriers and ticket agents are finding new
and creative ways to advertise airfares, some of which circumvent the
spirit if not the letter of the full-price advertising rule and
Department enforcement policy. Consumers now receive airfare
solicitations through print advertisements, radio advertisements,
internet advertisements, and solicitations sent directly to consumers
via e-mail newsletters, social networking Web sites, text messages, and
applications designed for many different kinds of cell phones. The ease
and speed of information sharing also allows airfare information to be
presented to consumers in many different forms. Even in cases where
those forms of advertising comply in a technical sense with our
enforcement policy with regard to the full-price advertising rule, we
are concerned that in many cases consumers are not easily able to
determine the total cost of air transportation services or are deceived
regarding the true price. Accordingly, we believe consumers would be
better served if we enforce our existing full-price rule as written and
prohibit the practice of advertising fares that exclude any mandatory
fees or surcharges, regardless of the source. In proposing this change
in policy, we do not intend to foreclose carriers and ticket agents
from advising the public in their fare solicitations about government
taxes and fees, or other mandatory carrier- or ticket agent-imposed
charges applicable to their airfares. However, we no longer see a
useful purpose in presenting what purportedly are ``fares'' to
consumers that do not include numerous required

charges and, in our view only act to confuse or deceive consumers
regarding the true full price and to make price comparisons difficult
or improbable. Our objective is to ensure that consumers are not be
deceived or confused about the total fare they must pay, which we
believe can best be ensured by requiring that consumers be able to see
clearly the entire price of the air transportation being advertised
whenever a price is displayed rather than having to wade through a
myriad of footnotes and/or hyperlinks regarding government taxes and
fees and make the full-price calculation themselves to try to establish
which among many displayed ``fares'' is the real fare or wait until the
purchase screen to see the total fare.
    The Department's statutory authority under 49 U.S.C. 41712 to
prohibit unfair and deceptive practices and unfair methods of
competition applies not only to air carriers but also to ``ticket
agents'' which includes those persons other than a carrier ``that as a
principal or agent sells, offers for sale, negotiates for, or holds
itself out as selling, providing, or arranging for air
transportation.'' 49 U.S.C. 40102(a)(40). Although the Department's
full-price advertising rule applies on its face to direct and indirect
air carriers as well as ``an agent of either,'' it has been the
longstanding policy of the Department to consider ticket agents as
defined in title 49 to be subject to that rule. The Department believes
it appropriate to specifically name ``ticket agents'' as being covered
by the rule in order to ensure there is no confusion about their
inclusion under the deceptive practice prohibitions of the rule.
    Air transportation is unlike any other industry in that the
Department has the sole authority to regulate airlines' fare
advertisements by prohibiting practices that are unfair or deceptive.
Congress modeled section 41712 on section 5 of the Federal Trade
Commission (FTC) Act, 15 U.S.C.A. 45, but by its own terms, that
statute cannot be enforced by FTC against ``air carriers and foreign
air carriers,'' 15 U.S.C. 45(a)(2). The States are preempted from
regulating in this area (49 U.S.C. 41713, see Morales v. Trans World
Airlines, 504 U.S. 374, 112 S.Ct.2031, 119 L.Ed.2d 157 (1992)). Thus,
unlike advertising in other industries, where either the States or the
FTC, or both, can take action against abusive practices, if we do not
exercise our authority, consumers and competitors have no governmental
recourse against advertising that is unfair or deceptive. Further, we
do not believe that 49 U.S.C. 41712 gives rise to a private right of
action; see Love v. Delta Air Lines, 310 F.3d 1347 (11th Cir.2002),
Boswell v. Skywest Airlines, Inc., 361 F.3d 1263 (10th Cir. 2004); see
also Alexander v. Sandoval 532 U.S. 275, 286, 121 S.Ct. 1511, 149
L.Ed.2d 517 (2001).
    The Department invites comments on its proposal to change its
enforcement policy under section 399.84 from one of permitting limited
exceptions to disclosing the full price in all advertising of air
transportation and air tours to requiring disclosure of the full price
to be paid by a consumer whenever a price is displayed, and its
proposal to specify in the rule that it applies to ``ticket agents.''
Specific questions on which the Department invites comments regarding
this policy shift include how sellers of air transportation foresee
this affecting the methods they use to advertise fares, how consumers
view the proposed change, and the potential cost in changing the
current advertising structures that carriers and ticket agents have in
place to ensure compliance with the current policy of the Department.
    Additionally, the Department is considering adding two new
paragraphs to the price advertising rule. We propose adding paragraph
(b) which would codify the Department's current enforcement policy on
each-way airfare advertising. Currently, the Department allows sellers
of air transportation to advertise an each-way price that is contingent
on a roundtrip ticket purchase, so long as the roundtrip purchase
requirement is clearly and conspicuously disclosed in a location that
is prominent and proximate to the advertised fare amount. This proposal
would codify existing enforcement policy and would also preclude
carriers from referring to such fares as ``one-way'' fares, which they
are not. The Department invites interested persons to comment on adding
this paragraph on each-way airfare advertising policy to the price
advertising rule. The Department also invites comment on whether a rule
similar to that proposed for each-way fare advertising disclosure
should be applied to air/hotel packages that advertise a single price,
but are sold at that price only on a double occupancy basis, i.e.,
where two people must purchase the package in order to obtain the
advertised price.
    The second provision the Department proposes to add to the price
advertising rule in section 399.84 would prohibit so-called ``opt-out''
provisions in price advertising. The Department has noticed a trend
lately in the air transportation industry to add fees for ancillary
services and products to the total price of air transportation, which
charges the consumer is deemed to have accepted unless he or she
affirmatively opts out of the service and related charges. For example,
carriers may allow a consumer to select a preferred seat or receive
priority boarding status if he or she pays a predetermined fee. In some
cases the optional services and accompanying charges for those services
is pre-selected and added to the total fare without the consumer
affirmatively choosing those optional services or fees. This often is
accomplished on a Web site through use of a small box that is pre-
checked and must be ``unchecked'' by a consumer in order to avoid the
charge. This can be deceptive depending on the layout of the webpage
and instructions accompanying the service and charge. What can be even
more problematic is that opt-out provisions are sometimes included on
the same webpage as opt-in provisions, in which case it is much less
likely that consumers will notice the opt-out nature of certain
optional services that carry additional charges. The Department
proposes adding a paragraph (c) to section 399.84 to prohibit such opt-
out procedures.
    Proposed paragraph (c) would provide that if a carrier offers
optional services, the consumer must affirmatively opt in to accept and
purchase that product or service before the price for that service can
be added to the total airfare to be paid. No longer will carriers or
ticket agents be allowed to require that a consumer opt out of
purchasing such products or services in order to avoid being charged
for them. The proposed rule, as part of the current full-price
advertising rule, would also apply to carriers and ticket agents that
advertise tours which include air transportation. Examples of such opt-
out procedures the Department has seen in recent years include fees for
travel insurance, rental cars, transfers between airports and hotels,
priority boarding, premium seats, and extra legroom. Oftentimes the
consumer does not realize that the ancillary services are included in
the total price of the ticket due to the deceptive nature of such opt-
out provisions. The Department asks interested persons to comment on
adding the proposed subsection (c) to the existing price advertising
rule. The Department would like to hear from both sellers of air
transportation and consumers about the costs and benefits of
prohibiting opt-out features.

8. Baggage and Other Fees and Related Code-Share Issues

    With the increasing industry-wide trend to ``unbundle'' fares by
charging fees for individual services provided in connection with air
transportation, the

Department has decided that there is a need to enhance protections for
air travelers by establishing rules to ensure adequate notice of such
fees for optional services to consumers. When booking air travel,
consumers are not always made aware of the extra charges that a carrier
may impose on them for additional services. Such charges may include
services that traditionally have been included in the ticket price,
such as the carriage of one or two checked bags, obtaining seat
assignments in advance, in-flight entertainment, and in-flight food and
beverage service. In fact, the Airline Tariff Publishing Company
(ATPCO), which collects schedule and fare information from airlines for
use in computerized reservation systems, has developed a list
containing scores of ancillary charges in various categories. Due to
what the Department feels is sometimes a lack of clear and adequate
disclosure, consumers are not always able to determine the full price
of their travel (the ticket price plus the price of additional fees for
optional services) prior to purchase.
    We also seek comment on the costs and benefits of requiring that
two prices be provided in certain airfare advertising--the full fare,
including all mandatory charges, as well as that full fare plus the
cost of baggage charges that traditionally have been included in the
price of the ticket, if these prices differ. We would regard charges
for one personal item (e.g., a purse or laptop computer), one carry-on
bag, and one or two checked bags as baggage charges that traditionally
have been included in the price of a ticket. Should such a requirement
for a second price, if adopted, be limited to the full fare plus the
cost of baggage charges? Should the Department require carriers to
include in the second price all services that traditionally have been
included in the price of the ticket such as obtaining seat assignments
in advance? Why or why not? In the alternative, the Department is
considering requiring sellers of air transportation to display on their
Web sites information regarding a full price including optional fees
selected by the passenger when a prospective passenger conducts a query
for a particular itinerary. In other words, passengers would be able to
conduct queries for their specific needs (e.g., airfare and 2 checked
bags; air fare, 1 checked bag, and extra legroom). The benefit of this
approach is that consumers would be able to more easily compare
airfares and charges for their own particular itinerary and options. We
invite comment on this approach, including its feasibility, as well as
its costs to airlines and ticket agents.
    The Department believes that effective disclosure of the optional
nature of services and their costs would prevent carriers from imposing
hidden fees on consumers and allow consumers to make better informed
decisions when purchasing air travel. In 2008, the Department's
Aviation Enforcement Office issued guidance concerning the disclosure
of baggage fees to the public. See, e.g., Notice of the Assistant
General Counsel for Aviation Enforcement and Proceedings, ``Guidance on
Disclosure of Policies and Charges Associated with Checked Baggage,''
May 13, 2008, http://airconsumer.dot.gov/rules/guidance.htm. We propose
to codify this guidance and also cover in the rule notice of charges
for services other than checked baggage.
    More specifically, the Department is proposing to adopt three
provisions in a proposed new 14 CFR 399.85. Proposed section 399.85(a)
would require carriers that maintain a Web site accessible to the
general public to prominently disclose on the homepage of such Web site
any increase in the fee for passenger baggage or any change in the free
baggage allowance for checked or carry-on bags (e.g., size, weight,
number). This could be done, for example, through direct, prominent
notice or through a conspicuous notice of the existence of such fees in
a hyperlink that takes the reader directly to an explanation of the
carrier's baggage policies and charges. The proposed rule would require
this notice to remain on the homepage of the carrier's Web site for at
least three months after the change is made. The Department invites
interested persons to comment on this proposal, including whether the
time period for displaying such changes on the homepage should be
greater or less than three months. The Department also asks for comment
on the best options for displaying such information to the public if it
were to adopt a notice requirement.
    Proposed section 399.85(b) would require carriers that issue e-
ticket confirmations to passengers to include information regarding
their free baggage allowance and/or the applicable fee for a carry-on
bag or the first and second checked bag on the e-ticket confirmation.
By providing this information to consumers on the e-ticket
confirmation--the document that confirms a passenger's travel on the
carrier--passengers will be informed well before the flight date and
arrival at the airport of the applicable baggage rules and charges. The
Department believes that including this information on the e-ticket
confirmation will permit passengers to avoid unexpected baggage charges
to the extent possible and also save time at the airport for both
passengers and carrier personnel because the passengers will be better
informed about the baggage allowance and any charges to be incurred.
    Proposed section 399.85(c) would require carriers that have a Web
site accessible to the general public to disclose all fees for optional
services to consumers through a prominent link on their homepage that
leads directly to a listing of those fees. Optional services include
but are not limited to the cost of a carry-on bag, checking baggage,
advance seat assignments, in-flight food and beverage service, in-
flight entertainment, blankets, pillows, or other comfort items, and
fees for seat upgrades. The Department feels that having all of the
fees for optional services in one place for consumers to review will
help ensure that consumers do not encounter such charges unexpectedly
and that they can more easily compare these charges among competing
carriers. Additionally, disclosure as proposed will result in this
important cost information being presented in a clear and concise form
and reduce the prospect of delays at the airport and in-flight that can
occur when the consumer is unaware of charges for optional services.
The Department invites comments regarding the proposal to have full,
complete disclosure of all fees for optional services on one Web page,
accessible to the consumer through a prominent hyperlink. In
particular, we solicit comment on whether we should limit the
requirement to disclose fees to ``significant'' fees for optional
services, including comment on the definition of ``significant fee''
and whether it should be defined as a particular dollar amount. The
Department seeks comment on the alternatives to the proposed link to
the information on a carrier's homepage, such as disclosure of these
optional fees on e-ticket confirmations or elsewhere.
    The Department is also considering requiring that carriers make all
the information that must be made directly available to consumers via
proposed section 399.85 available to global distribution systems
(GDS's) in which they participate in an up-to-date fashion and useful
format. This would ensure that the information is readily available to
both Internet and ``brick and mortar'' travel agencies and ticket
agents so that it can be passed on to the many consumers who use their
services to compare air transportation offers and make purchases. We
invite comments on this proposal, including the present

ability of carriers to meet this requirement, the potential costs of
the requirement, including costs of developing new software or systems
to deliver such information to GDS's, if necessary, and the benefits of
this requirement.
    The proposed section 399.85 would apply to all U.S. and foreign air
carriers that have Web sites accessible to the general public in the
United States through which tickets are sold, as well as to their
agents. The Department invites comment on alternative proposals,
including limiting the applicability of the proposed section 399.85 to
all flights operated by U.S. carriers, U.S. and foreign carriers that
operate any aircraft with sixty (60) or more seats, or U.S. and foreign
carriers that operate any aircraft with thirty (30) or more seats. In
addition, we invite comment on whether the rule should apply to all
ticket agents, as defined in 49 U.S.C. Sec.  40102, which includes not
just agents of carriers, but also others who, as a principal, ``sells,
offers for sale, negotiates for, or holds itself out as selling,
providing, or arranging for air transportation.'' Under proposed
section 399.85, the Department would consider the failure of a carrier
to give consumers appropriate notice about baggage fees and other
optional fees to be an unfair and deceptive practice in violation of 49
U.S.C. 41712.
    The Department is also seeking comment on the need for a special
rule relating to the disclosure of fees and related restrictions in
connection with code-share service. It has come to the Department's
attention that many carriers operating flights under a code-share
agreement impose different fees and restrictions than those of the
carrier under whose identity the service is marketed, notwithstanding
the fact that as a condition for approval of international code-share
services, the Department has as a matter of policy required that ``the
carrier selling such transportation (i.e., the carrier shown on the
ticket) accept responsibility for the entirety of the code-share
journey for all obligations established in the contract of carriage
with the passenger; and that the passenger liability of the operating
carrier be unaffected.'' See, Notice of the Assistant General Counsel
for Aviation Enforcement and Proceedings, ``Guidance on Airline Baggage
Liability and Responsibilities of Code-Share Partners Involving
International Itineraries,'' http://airconsumer.dot.gov/rules, March
26, 2009. For example, they may have different free baggage allowances
and different charges for extra pieces and overweight bags, some may
not allow unaccompanied minors while others do (perhaps subject to
varying charges and various age restrictions), and some may not provide
in-flight medical oxygen while others do (subject to different
charges). We believe that, at a minimum, prospective customers for
these code-share flights should be made aware of any significant
differences between the ancillary services and fees of the carrier
under whose identity their service was marketed and those of the
carrier operating their flights. Comments are invited on whether such
disclosure by ticketing/marketing carriers should be required through
reservation agents, Web sites, or e-ticket confirmations or through
each of those mechanisms. Further comment is invited on whether there
are any ancillary services that should not be allowed to vary among
code-share partners, e.g., the free baggage allowance or baggage fees.
For example, Department policy provides that for passengers whose
ultimate ticketed origin or destination is a U.S. point, the baggage
rules that apply at the beginning of the itinerary apply throughout the
itinerary, and the ticketing carrier's rules take precedence. See,
e.g., Order 2009-9-20, Dockets OST-2008-0367 and 0370, ``Agreements
adopted by the Tariff Coordinating Conference of the International Air
Transport Association relating to passenger baggage matters,''
September 30, 2009. Information on the cost of these proposals is
invited.

9. Post-Purchase Price Increases

    The Department is proposing a new section in 14 CFR part 399 that
would prohibit post-purchase price increases in air transportation or
air tours by carriers and ticket agents. The seller of air
transportation would be prohibited from raising the price after the
consumer completes the purchase. Currently, the Department allows post-
purchase price increases as long as any term that permits a carrier to
increase the price after purchase is included in the conditions of
carriage and the consumer receives direct notice of that provision on
or with the ticket. See 14 CFR 253.7. The Department has found that
some sellers of air transportation are abusing this rule by burying
provisions purporting to permit them to raise the price in the contract
of carriage or conditions of travel and merely providing the consumer a
hyperlink to the contract of carriage or conditions of travel. The
consumer is unaware of the potential for such increase until well after
the purchase is made. Although we have not seen carriers resort to this
problematic practice, we have often found this to be the case in the
sale of tour packages that include air transportation, where an air
tour operator will increase the price of an air tour before travel,
ostensibly in order to pass along fuel surcharges or an increase in the
price of a seat. Consumers are not made aware of the potential for a
price increase at the time of purchase, and therefore are deceived when
the increase is imposed and the seller uses the terms of the contract
of carriage to justify an additional collection. Moreover, most
airlines and tour operators will advertise and sell tickets or packages
at a stated price nearly a year in advance of scheduled travel. We are
tentatively of the opinion that it is patently unfair for a carrier or
tour operator to advertise and sell air transportation at a particular
price long before travel, with the caveat that they reserve the right
to change the advertised price at any time before travel, and in any
amount. The Department feels it is time to ban the practice of post-
purchase price increases.
    The Department invites interested parties to comment on this
proposal and on several alternatives. As indicated above, the
Department's primary proposal is an outright ban on post-purchase price
increases. One alternative the Department is considering would be to
allow post-purchase price increases, but only as long as the seller of
air transportation conspicuously discloses to the consumer the
potential for such an increase and the maximum amount of the increase,
and the consumer affirmatively agrees to the potential for such an
increase prior to purchasing the ticket. Another alternative would be
to allow post-purchase price increases, with full and adequate
disclosure, that the consumer agrees to in advance of purchasing a
ticket, but to prohibit price increases within thirty or sixty days of
the first flight in a consumer's itinerary.

10. Flight Status Changes

    We are proposing to require that certificated air carriers that
account for at least 1 percent of domestic scheduled passenger revenues
(reporting carriers) promptly notify passengers in the boarding gate
area of changes to their domestic scheduled flights resulting from
delays or cancellations, promptly update all domestic scheduled flight
information under their control at airports regarding changes to the
status of particular flights as a result of delays or cancellations and
promptly update flight status details available on their Web sites and
through their telephone reservation systems. ``Domestic scheduled
flight'' for this purpose means

a flight segment. For example, on a direct flight from Chicago to
London with a stop in New York, the Chicago-New York segment would be
covered by this requirement. The Department tentatively believes that
the cost of requiring smaller carriers to provide this information
outweighs the benefits to consumers in general in light of the fact
that the operations of the reporting carriers account for nearly 90
percent of all domestic passenger enplanements. We ask for comment on
whether the regulation should cover a greater number of carriers and
operations, including operations of smaller U.S. carriers and/or
international operations of U.S. and foreign carriers.
    What would be the cost or benefit of expanding coverage to those
additional carriers?
    It is important to passengers as well as persons dropping
passengers off for outbound flights or meeting passengers on incoming
flights to be kept informed on a timely basis of delays and/or
cancellations affecting their flights in order to avoid unnecessary
waits at, or pointless trips to, an airport. Passengers also need
flight status updates as soon as they become available in order to make
decisions about alternate travel plans. Carriers recognize the
importance of timely and accurate flight information, as evidenced by
the fact that many of the largest U.S. carriers promise through their
customer service plans to provide passengers all known information
about delays and cancellations as soon as they become aware of the
issue. Failures by carriers to provide timely or accurate flight status
information not only inconvenience passengers and other members of the
public but also can result in additional expenses to those persons.
    Our proposals here are intended to provide additional measures to
ensure that passengers and the general public know about flight delays
and cancellations within a reasonable time so that they can, if
possible, take steps to protect themselves and avoid unnecessary loss
of time and expense. We are therefore proposing that carriers promptly
notify passengers holding tickets or reservations on one of their
flights as well as other interested parties about changes to a flight's
status, i.e., delays and cancellations, which affect the planned
operation of the flight by at least 30 minutes. Additional
notifications would be required if any such delayed flight was further
delayed by 30 minutes or more. By ``promptly'' we mean that a carrier
must provide the required notification regarding the status of a flight
as soon as possible but no later than 30 minutes after the carrier
becomes aware or should have become aware of a change in the status of
the flight due to a delay or cancellation. This requirement would apply
to all the domestic scheduled flight segments that a reporting carrier
``markets.'' For example, for a code-share flight this proposed
notification requirement would be the responsibility of the carrier
whose code is used, whether or not it is operated under a fee-for-
service arrangement.
    We note that many covered carriers already voluntarily provide
flight status details via the proposed methods proposed in this notice
(i.e., announcement in boarding area, Web sites, telephone reservation
systems, airport display boards). In addition, most of the largest
carriers generally make efforts to notify passengers of changes to the
status of their flights by permitting passengers to subscribe to flight
status update services via various widely-used media, including
computer-generated telephone/voicemail, text messages, and e-mails.
This proposal to promptly notify passengers and other interested
parties of changes to flights as a result of delays or cancellations
would not impose upon carriers a requirement to offer passengers the
opportunity to subscribe to such a service but would require carriers
to the extent that they use this or other methods of communication to
ensure that the flight status changes are promptly updated.
    We seek comments on whether it is preferable to require carriers to
provide prompt notification of flight status changes and leave it up to
the carriers to determine how that notification is provided, or
prescribe particular means by which carriers must communicate or must
make available flight status updates. We ask for comment on the four
proposed means of notification: an announcement in the boarding area,
carriers' Web sites, carriers' telephone reservation systems, and
airport displays under carriers' control. Commenters should support
their opinions with as much detail as possible regarding the
practicality, costs, and benefits of any standard they support or
oppose. We also seek comment about the cost and benefit of flight
status update services. It goes without saying that the quicker that
changes to a flight's status can be provided to passengers, the more
useful the information is likely to be. In addition to seeking comment
on the need, in general, for this proposed notification requirement, we
specifically ask for comment on whether the standard we propose--``30
minutes after the carrier becomes aware or should have become aware of
a change in the status of a flight''--is a reasonable notification
standard to apply in requiring carriers to pass along updates to
passengers and to the public. Does it provide consumers sufficient lead
time in most cases to act to protect themselves? If not, why not, and
could carriers be expected to meet a more stringent standard? Is the
more stringent standard a reasonable standard for carriers to meet and,
if not, why not?
    In addition, we are proposing that notification be provided
regarding any changes that affect the planned operation of a flight by
at least 30 minutes. While shorter flight delays occur more frequently,
we believe they are less likely to significantly disrupt expectations
or travel plans. We ask for comment on whether this 30-minute standard
is appropriate. Do consumers in most instances require notice of flight
delays that are less than 30 minutes? Would changing the standard of
delays to less than 30 minutes impose unreasonable burdens or costs on
carriers that outweigh any benefits to the public? According to data
from the Department's Bureau of Transportation Statistics (BTS), in
calendar year 2009, approximately 10% of departure delays and 11% of
arrival delays were over 30 minutes. The majority of scheduled domestic
passenger flights depart or arrive 1 to 14 minutes after their
scheduled departure and arrival times, respectively.
    We note that the requirement to promptly update all domestic
scheduled flight information under a carrier's control at airports
would cover all communication methods that are under the control of a
carrier at an airport. For example, flight information provided via
electronic or other display boards at airport counters and departure
gates would be covered. We are not proposing at this time that carriers
establish new types of flight information outlets but this requirement,
if made final, would apply to every type of outlet a carrier elects to
use to provide flight information to the public at airports. With
respect to flight status information outlets at an airport that are not
under a carrier's control, e.g., flight arrival and departure displays
that are under the control of an airport authority, a carrier's
responsibility is limited to providing the updated flight information
to the airport authority within the required 30 minutes.

11. Choice-of-Forum Provisions

    The Department is proposing to amend 14 CFR part 253, the Part that
concerns notice of contract of carriage

terms, by adding a new section to codify the policy of the Department's
Aviation Enforcement Office that choice-of-forum provisions are unfair
and deceptive when used to limit a passenger's legal forum to a
particular inconvenient venue. Choice-of-forum provisions purport to
designate the court or jurisdiction where any lawsuit against the
carrier concerning the purchased air transportation must be brought
See, e.g., Notice of the Assistant General Counsel for Aviation
Enforcement and Proceedings, ```Choice of Forum' Contract Provisions,''
http://airconsumer.dot.gov/rules/19960715.htm (July 15, 1996). It is
the Department's view that for air transportation sold in the U.S., it
would be an unfair or deceptive practice for the seller to attempt to
prevent a passenger from seeking legal redress in any court of
competent jurisdiction, including a court within the jurisdiction of
the passenger's residence, provided that the carrier does business
within that jurisdiction. Consumers should not be forced to litigate in
a jurisdiction that could be thousands of miles from their United
States residence. The Department believes that such narrow choice-of-
forum provisions would operate as a limitation on the right of a
consumer to bring legitimate and viable suits. We invite interested
persons to comment on this proposal and on the use of such choice-of-
forum provisions in contracts of carriage.

12. Peanut Allergies

    The Department is considering several different measures to provide
greater access to air travel for individuals with severe peanut
allergies in light of the significant number of children diagnosed with
peanut allergies, some of whom do not fly because of health concerns
related to peanut service on aircraft. The Air Carrier Access Act
(ACAA) prohibits discrimination by U.S. and foreign air carriers
against individuals with disabilities. The Department of Transportation
defines an individual with a disability in 14 CFR part 382 (Part 382),
the regulation implementing the ACAA. An individual with a disability
is any individual who has a physical or mental impairment that, on a
permanent or temporary basis, substantially limits one or more major
life activities, has a record of such an impairment, or is regarded as
having such an impairment. Generally, a person with an allergy is not
an individual with a disability. However, if a person's allergy is
sufficiently severe to substantially limit a major life activity, then
that person meets the definition of an individual with a disability.
Part 382 states that major life activities means functions such as
caring for one's self, performing manual tasks, walking, seeing,
hearing, speaking, breathing, learning, and working. Airline passengers
with severe allergies to peanuts have a qualifying disability as
defined in part 382.
    Part 382 requires airlines to change or make an exception to an
otherwise general policy or practice to make sure that a passenger with
a disability can take the trip for which he or she is ticketed unless
the change would cause an undue burden on the airline or a fundamental
alteration in its services. The Department has in the past told
airlines that, based on this requirement, they must make reasonable
accommodations for air travelers who are allergic to peanuts.
Specifically, in August 1998 the Department's Aviation Enforcement
Office sent an industry letter providing guidance on this issue. That
letter suggested that, if given advance notice, providing a peanut-free
buffer zone in the immediate area of a passenger with a medically-
documented severe allergy to peanuts would be a reasonable
accommodation for the passenger's disability, and would not constitute
an undue burden on the airline.
    After the issuance of the guidance letter, the Department was
directed by Congress to cease issuing guidance on this subject or face
a cutoff of funding for its Aviation Enforcement Office. See, for
example, section 346 of Public Law 106-69, (October 9, 1999)--``DOT and
Related Agencies Appropriations Act, 2000,'' which stated that none of
the funds made available under that Act could be used to require or
suggest that airlines provide peanut-free buffer zones or otherwise
restrict the distribution of peanuts. This congressional prohibition
was to remain in effect ``until 90 days after submission to the
Congress of a peer-reviewed scientific study that determined that there
are severe reactions by passengers to peanuts as a result of contact
with very small airborne peanut particles of the kind that passengers
might encounter in an aircraft.'' This specific congressional ban on
our involvement in this issue has not appeared recently in any
legislation. At this time, we are considering the following
alternatives to provide greater access to air travel for individuals
with severe peanut allergies: (1) Banning the serving of peanuts and
all peanut products by both U.S. and foreign carriers on flights
covered by DOT's disability rule; (2) banning the serving of peanuts
and all peanut products on all such flights where a passenger with a
peanut allergy is on board and has requested a peanut-free flight in
advance; or (3) requiring a peanut-free buffer zone in the immediate
area of a passenger with a medically-documented severe allergy to
peanuts if passenger has requested a peanut-free flight in advance. We
seek comment on these approaches as well as the question of whether it
would be preferable to maintain the current practice of not prescribing
carrier practices concerning the serving of peanuts. We are
particularly interested in hearing views on how peanuts and peanut
products brought on board aircraft by passengers should be handled. How
likely is it that a passenger with allergies to peanuts will have
severe adverse health reactions by being exposed to the airborne
transmission of peanut particles in an aircraft cabin (as opposed to
ingesting peanuts orally)? Will taking certain specific steps to
prepare for a flight (e.g., carrying an epinephrine auto-injector in
order to immediately and aggressively treat an anaphylactic reaction)
sufficiently protect individuals with severe peanut allergies? Who
should be responsible for ensuring an epinephrine auto-injector is
available on a flight--the passenger with a severe peanut allergy or
the carrier? Is there recent scientific or anecdotal evidence of
serious in-flight medical events related to the airborne transmission
of peanut particles? Should any food item that contains peanuts be
included within the definition of peanut products (e.g., peanut butter
crackers, products containing peanut oil)? Is there a way of limiting
this definition?

13. Effective Date

    We propose that any final rule that we adopt take effect 180 days
after its publication in the Federal Register. We believe this would
allow sufficient time for carriers to comply with the various proposed
requirements. We invite comments on whether 180 days is the appropriate
interval for completing these changes.

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 Order. The Regulatory Evaluation finds that the
benefits of the proposal appear to exceed its costs, even without
considering non-quantifiable benefits. The total present value of
passenger

benefits from the proposed requirements over a 10 year period at a 7%
discount rate is $87.59 million and the total present value of costs
incurred by carriers and other sellers of air transportation over a 10
year period at a 7% discount rate is $25.98 million. The net present
value of the rule for 10 years at a 7% discount rate is $61.61 million.
    Below, we have included a table outlining the projected costs and
benefits of this rulemaking. We invite comment on the quantification of
costs and benefits for each provision, as well as the methodology used
to develop our cost and benefit estimates. We also seek comment on how
unquantified costs and benefits could be measured. More detail on the
estimates within this table can be found in the preliminary Regulatory
Impact Analysis associated with this proposed rule.

    Comparison of Requirement-Specific Benefits and Costs, 2010-2020
               [Discounted at 7%/year to 2010 $ millions]
------------------------------------------------------------------------

------------------------------------------------------------------------
Requirement 1: Expand tarmac delay                       Total
 contingency plan requirements to smaller
 airports and require that foreign carriers
 have a tarmac delay contingency plan.
------------------------------------------------------------------------
Estimated Quantified Benefits................  $1.99
Estimated Quantified Costs...................  $3.24
                                              --------------------------
    Net Benefits.............................  -$1.25
Unquantified Benefits:
     Improved Management of Flight
     Delays
     Decreased Anxiety with Regard to
     Flying
     Reduced Stress among Delayed
     Passengers and Crew
     Improved Overall Carrier
     Operations
     Improved Customer Good Will
     Towards Carriers
Unquantified Costs:
     Increased Flight Cancellations
     Increased Passenger Anxiety
     Associated with Potential Flight
     Cancellations
------------------------------------------------------------------------
Requirement 2: Expand carriers' reporting                Total
 tarmac delay info to DOT and require
 reporting by foreign carriers.
------------------------------------------------------------------------
Estimated Quantified Benefits................  not estimated
Estimated Quantified Costs...................  $2.31
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:
     Increased Efficiency of US DOT
     Oversight and Enforcement Office
     Operations
     Improved Planning by Passengers
     Improved Management of Flight
     Delays
     Improved Market Competition
------------------------------------------------------------------------
Requirement 3: Establish of minimum standards            Total
 for carriers' customer service plans and
 extend the customer service plan
 requirements to cover foreign carriers.
------------------------------------------------------------------------
Estimated Quantified Benefits................  $6.25
Estimated Quantified Costs...................  $8.58
                                              --------------------------
    Net Benefits.............................  -$2.33
Unquantified Benefits:
     Decreased Confusion and
     Uncertainty Regarding Department's
     Requirements
     Value of Improved Customer
     Service Based on Self-Auditing of
     Adherence to Customer Service Plans for
     Foreign Carriers
     Improved Customer Good Will
     Towards Carriers
------------------------------------------------------------------------
Requirement 4: Require incorporation of                  Total
 tarmac delay contingency plans and customer
 service plans into carrier contracts of
 carriage.
------------------------------------------------------------------------
Estimated Quantified Benefits................  not estimated
Estimated Quantified Costs...................  not estimated
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:
     Decreased Occurrence of Customer
     Complaints
     Improved Resolution of Customer
     Complaints
------------------------------------------------------------------------
Requirement 5: Extend requirements for                   Total
 carriers to respond to consumer complaints
 to cover foreign carriers.
------------------------------------------------------------------------
Estimated Quantified Benefits................  $0.00
Estimated Quantified Costs...................  $1.82
                                              --------------------------
    Net Benefits.............................  -$1.82
Unquantified Benefits:

     Decreased Occurrence of Conduct
     that Would Produce Complaints
     Improved Resolution of Customer
     Complaints
     Decreased Anger Toward Carriers
     During Resolution of Complaints
------------------------------------------------------------------------
Requirement 6: Changes in denied boarding                Total
 compensation (involuntary bumping) policy:
 increase minimum compensation, add inflation
 adjustment, greater passenger information
 about policies.
------------------------------------------------------------------------
Estimated Quantified Benefits................  not estimated
Estimated Quantified Costs...................  $0.66
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:
     Decrease in Confusion Regarding
     Denied Boarding Compensation Provisions
     More Accurate Compensation for
     those Denied Boarding
     Decreased Resentment among Some
     Passengers Regarding Different
     Compensation Received
------------------------------------------------------------------------
Requirement 7: Require that carriers include             Total
 taxes and fees in advertising (``full-fare
 advertising'') and prohibit use of sales
 provisions that require purchasers to opt
 out of add-ons such as trip insurance.
------------------------------------------------------------------------
Estimated Quantified Benefits................  $73.50
Estimated Quantified Costs...................  $6.86
                                              --------------------------
    Net Benefits.............................  $66.64
Unquantified Benefits:
     Travelers Less Likely to
     Mistakenly Purchase Unwanted Services
     and Amenities
     Improved Market Competition
     Improved Customer Good Will
     Towards Carriers
------------------------------------------------------------------------
Requirement 8: Require carriers to disclose              Total
 baggage and other optional fees on their Web
 sites.
------------------------------------------------------------------------
Estimated Quantified Benefits................  not estimated
Estimated Quantified Costs...................  $2.51
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:
     Decrease in Time at Check-in
     Avoidance of Unfair Surprise
     Improved Customer Good Will
     Towards Carriers
     Improved Market Competition
------------------------------------------------------------------------
Requirement 9: Ban the practice of post-                 Total
 purchase price increases.
------------------------------------------------------------------------
Estimated Quantified Benefits................  $5.83
Estimated Quantified Costs...................  not estimated
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:
     Improved Customer Good Will
     Towards Carriers
     Avoidance of Unfair Surprise
Unquantified Costs:
     Inability to Increase Prices
     Based on Unanticipated or Changed
     Circumstances
------------------------------------------------------------------------
Requirement 10: Require prompt passenger                 Total
 notification of flight status changes
 (cancellations, delays, etc.) at the
 boarding gate area, on Web site and on
 telephone reservation systems.
------------------------------------------------------------------------
Estimated Quantified Benefits................  not estimated
Estimated Quantified Costs...................  not estimated
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:
     Reduced Passenger Anxiety
     Greater Comfort and Certainty
     from Knowing that Information Will Be
     Available In Timely Manner
Unquantified Costs:
     Expense of Providing
     Notification
------------------------------------------------------------------------
Requirement 11: Permit consumers to file suit            Total
 wherever a carrier does business.
------------------------------------------------------------------------
Estimated Quantified Benefits................  not estimated
Estimated Quantified Costs...................  not estimated
                                              --------------------------
    Net Benefits.............................  not estimated
Unquantified Benefits:

     Greater compliance with DOT
     regulations
     Improved Customer Good Will
     Towards Carriers
Unquantified Costs:
     Need to Defend Suit in Location
     of Consumer's Choice
------------------------------------------------------------------------
Requirements 1-11: TOTAL.....................            Total
------------------------------------------------------------------------
Estimated Quantified Benefits................  $87.6
Estimated Quantified Costs...................  $26.0
    Net Benefits.............................  $61.6
------------------------------------------------------------------------

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.
The regulatory initiatives discussed in this NPRM would have some
impact on some small entities, as discussed in the Initial Regulatory
Flexibility Analysis.
    The Initial Regulatory Flexibility Analysis determined that no more
than 12 independently-owned small U.S. carriers operating at least one
aircraft with 30 or more passenger seats but none with more than 60
passenger seats would have to comply with the proposed requirements
relating to denied boarding compensation and lengthy tarmac delays.
These 12 U.S. carriers and an additional 35 small U.S. carriers that
only operate aircraft with fewer than 30 seats would potentially have
to comply with the requirements pertaining to full fare advertising
(requirement to display full fares on Web sites and in print
advertising and prohibition on opt-out provisions), disclosure of
baggage and other fees, and prohibition on post-purchase price
increases. The compliance costs associated with the full fare
advertising requirements are estimated at $6,000 or less per carrier.
The estimated unit costs for complying with the other requirements are
nominal.
    The proposed initiatives may have a more substantial impact on
small foreign carriers that provide scheduled service on flights to and
from the U.S. using only aircraft with 60 or less passenger seats.
There is only one small foreign carrier that operates service to and
from the U.S. using aircraft with more than 29 but fewer than 61 seats.
It would be required to comply with the proposed requirements described
above for U.S. carriers of this size-class, as well as requirements
relating to tarmac delay contingency plans, customer service plans, and
customer problems/complaints (these requirements were instituted for
covered U.S. carriers in a previous proceeding). Each of these sets of
requirements may entail compliance costs of $3,000 or more per-carrier,
but only the requirement to develop and implement a compliant tarmac
delay contingency plan is likely to involve single-year cost in excess
of $10,000 per carrier. There are also two small foreign carriers that
operate service to and from the U.S. exclusively with aircraft that
have fewer than 19 seats; these two carriers would potentially have to
comply with the requirements pertaining to full fares advertising
(requirement to display full fares on Web sites and in print
advertising and prohibition on opt-out provisions), disclosure of
baggage and other fees, and prohibition on post-purchase price
increases. The per-carrier compliance costs for these two small foreign
carriers are expected to be similar to those for U.S. carriers of the
same size-class.
    It may also be necessary for some small travel agencies and tour
operators to revise air travel prices displayed in Web site and print
media advertising to comply with the proposed requirements relating to
full fare advertising of air fares. Costs for small firms to revise Web
sites and update print media advertising are estimated at no more than
$3,000 each on a per-firm basis. Finally, a limited number of personnel
at some small airports will incur time costs of a few hours on average
to interact with carriers that are required to coordinate tarmac
contingency plans with airport authorities. We invite comment to
facilitate our assessment of the potential impact of these initiatives
on small entities.

C. Executive Order 13132 (Federalism)

    This Notice of Proposed Rulemaking has been analyzed in accordance
with the principles and criteria contained in Executive Order 13132
(``Federalism''). This notice does not propose 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 NPRM 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
options on which we are seeking comment would 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

    This NPRM proposes three new collections of information that would
require approval by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (Pub. L. 104-13, 49 U.S.C. 3501 et
seq.). Under the Paperwork Reduction Act, before an agency submits a
proposed collection of information to OMB for approval, it must publish
a document in the Federal Register providing notice of the proposed