[Federal Register Volume 79, Number 138 (Friday, July 18, 2014)]
[Notices]
[Page 42070]
[FR Doc No: 2014-17036]

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SECURITIES AND EXCHANGE COMMISSION

In the Matter of: Natural Blue Resources, Inc., File No. 500-1;
Order of Suspension of Trading

July 16, 2014.
    It appears to the Securities and Exchange Commission that there is
a lack of current and accurate information concerning the securities of
Natural Blue Resources, Inc. because it has not filed any periodic
reports since the period ended September 30, 2010.
    The Commission is of the opinion that the public interest and the
protection of investors require a suspension of trading in the
securities of the above-listed company.
    Therefore, it is ordered, pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that trading in the securities of the
above-listed company is suspended for the period from 9:30 a.m. EDT, on
July 16, 2014, through 11:59 p.m. EDT, on July 29, 2014.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-17036 Filed 7-16-14; 4:15 pm]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 171 (Tuesday, September 4, 2018)]
[Notices]
[Pages 45004-45005]
[FR Doc No: 2018-19106]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket Number FRA-2018-0069]

Petition for Waiver of Compliance

    Under part 211 of Title 49 Code of Federal Regulations (CFR), this
provides the public notice that by letter dated August 14, 2018, CSX
Transportation, Inc. (CSXT) petitioned the Federal Railroad
Administration (FRA) for a waiver of compliance from certain provisions
of the Federal railroad safety regulations contained at 49 CFR part
234. FRA assigned the petition Docket Number FRA-2018-0069.
    CSXT seeks a waiver of compliance from 49 CFR 234.247, Purpose of
inspections and tests; removal from service of relay or device failing
to meet test requirements, to remove approximately 400 stored rail cars
and certain railbound equipment from CSXT's Illinois Subdivision, which
is currently discontinued from service between milepost (MP) BC 244.7,
near Flora, Clay County, Illinois, and MP BC 327.9, near Caseyville,
St. Clair County, pursuant to the Surface Transportation Board's
issuance of two Discontinuance of Service Exemptions dated December 10,
2015 and January 9, 2017, respectively. CSXT notes that numerous
communities have raised concerns and requested it remove the stored
rail cars and rail-bound equipment.
    CSXT states that no revenue traffic has moved on the discontinued
portion of the Illinois Subdivision since June of 2016. Because CSXT
has no current intention of resuming revenue service on this
Subdivision, CSXT seeks this relief to remove the cars and rail-bound
equipment from its tracks as expeditiously as possible. Specifically,
CSXT seeks relief to operate over non-functioning highway-rail grade
crossings without making inspections and tests required in Sec. Sec.
234.249 through 234.271. To ameliorate any safety concerns, CSXT will
make all train moves at 10 miles per hour or less and during daylight
hours, work with local authorities to obtain permission to close the
roadway at impacted crossings, and will station an employee at each
impacted crossing to provide waring to approaching highway traffic and
communicate with motorists as needed.
    A copy of the petition, as well as any written communications
concerning the petition, is available for review online at
www.regulations.gov and in person at the U.S. Department of
Transportation's Docket Operations Facility, 1200 New Jersey Avenue SE,
W12-140, Washington, DC 20590. The Docket Operations Facility is open
from 9 a.m. to 5 p.m., Monday through Friday, except Federal Holidays.
    Interested parties are invited to participate in these proceedings
by submitting written views, data, or comments. FRA does not anticipate
scheduling a public hearing in connection with these proceedings since
the facts do not appear to warrant a hearing. If any interested party
desires an opportunity for oral comment, they should notify FRA, in
writing, before the end of the comment period and specify the basis for
their request.
    All communications concerning these proceedings should identify the
appropriate docket number and may be submitted by any of the following
methods:
     Website: http://www.regulations.gov. Follow the online
instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: Docket Operations Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, W12-140, Washington, DC
20590.
     Hand Delivery: 1200 New Jersey Avenue SE, Room W12-140,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays.
    Communications received by October 19, 2018 will be considered by
FRA before final action is taken. Comments received after that date
will be considered if practicable.
    Anyone can search the electronic form of any written communications
and comments received into any of our dockets by the name of the
individual submitting the comment (or signing the document, if
submitted on behalf of an association, business, labor union, etc.). In
accordance with 5 U.S.C. 553(c), DOT solicits comments from the public
to better inform its processes. DOT posts these comments, without edit,
including any personal information the

commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dotransportation.gov/privacy. See also http://www.regulations.gov/#!privacyNotice for the privacy notice of regulations.gov.

Robert C. Lauby,
Associate Administrator for Safety, Chief Safety Officer.
[FR Doc. 2018-19106 Filed 8-31-18; 8:45 am]
 BILLING CODE 4910-06-P


[Federal Register Volume 78, Number 189 (Monday, September 30, 2013)]
[Proposed Rules]
[Pages 59880-59890]
[FR Doc No: 2013-23142]

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================

Federal Register / Vol. 78, No. 189 / Monday, September 30, 2013 /
Proposed Rules

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Parts 295 and 298

[Docket No. DOT-OST-2007-27057]
RIN 2105-AD66

Enhanced Consumer Protections for Charter Air Transportation

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

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: The U.S. Department of Transportation (Department) seeks
comment on four new proposals to strengthen the legal protections
provided to consumers of charter air transportation. First, this
proposal would require air taxis and commuter air carriers that sell
charter air transportation but rely on others to perform that air
transportation to make certain consumer disclosures as recommended by
the National Transportation Safety Board (NTSB). This proposal would
also create a new class of indirect air carriers to be called ``air
charter brokers'' to provide as principals single entity charter air
transportation of passengers aboard large and small aircraft. In
addition, this NPRM would codify the exemption authority granted to
indirect air carriers to engage in the sale of air transportation
related to air ambulance services. Finally, the NPRM would make clear
and codify that certain air services performed under contract with the
Federal Government are in common carriage.

DATES: Interested persons are invited to submit comments regarding this
proposal. Comments must be received on or before November 29, 2013.

ADDRESSES: You may file comments identified by the docket number DOT-
OST-2007-27057 by any of the following methods:
    [cir] Federal Rulemaking Portal: go to http://www.regulations.gov
and follow the online instructions for submitting comments.
    [cir] Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Ave. SE., West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
    [cir] Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Ave. SE., between 9:00 a.m. and 5:00 p.m. ET,
Monday through Friday, except Federal Holidays.
    [cir] Fax:<PHONE_NUMBER>.
    Instructions: You must include the agency name and docket number
DOT-OST-2007-27057 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, business, 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: Jonathan Dols, Deputy Assistant
General Counsel, Office of Aviation Enforcement and Proceedings,
Department of Transportation, 1200 New Jersey Avenue SE., Room W98-312,
Washington, DC 20590,<PHONE_NUMBER><EMAIL_ADDRESS>You may
also contact Lisa Swafford-Brooks, Chief, Aviation Licensing and
Compliance Branch, Office of Aviation Enforcement and Proceedings,
Department of Transportation, 1200 New Jersey Avenue SE., Room W98-304,
Washington, DC 20590,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The U.S. Department of Transportation (DOT)
is issuing this notice of proposed rulemaking (NPRM) to improve the air
travel environment for consumers of single entity charter air
transportation based on its statutory authority to license entities
engaging in air transportation, 49 U.S.C. 41101, and its statutory
authority to prohibit unfair and deceptive practices in air
transportation, 49 U.S.C. 41712. First, the Department is taking action
to protect consumers by ensuring that consumers of single entity
charter air transportation have adequate information about the operator
of chartered aircraft and by enumerating certain prohibited unfair and
deceptive practices by air taxis and commuter air carriers. Second,
also to protect consumers, the Department is creating a new class of
indirect air carriers called air charter brokers and establishing
required disclosures and enumerating certain prohibited unfair and
deceptive practices for this class. Third, the Department is codifying
a 1983 Civil Aeronautics Board order granting exemption authority to
indirect air carriers that provide air ambulance services. Fourth, the
Department is clarifying that the contracting for air transportation
with the Federal government under a GSA Schedule involves common
carriage operations.

----------------------------------------------------------------------------------------------------------------
                           Subject                                               Proposed rule
----------------------------------------------------------------------------------------------------------------
1. NTSB Recommendation......................................  Requires air taxis and commuter air carriers that
                                                               sell charter air transportation, but rely on
                                                               others to perform that air transportation, to
                                                               make certain disclosures, including the name of
                                                               the direct air carrier operating the service and
                                                               any other name in which that direct air carrier
                                                               holds itself out to the public.
                                                              Enumerates certain prohibited unfair and deceptive
                                                               practices or unfair methods of competition by air
                                                               taxis registered with the Department and commuter
                                                               air carriers.

2. New Class of Indirect Air Carrier........................  Creates an ``air charter broker'' class of
                                                               indirect air carrier.
                                                              Requires air charter brokers to make certain
                                                               disclosures.
                                                              Enumerates certain prohibited unfair and deceptive
                                                               practices or unfair methods of competition by air
                                                               charter brokers.
3. Air Ambulance Services...................................  Codifies the exemption authority granted in 1983
                                                               to indirect air carriers that provide air
                                                               ambulance services.
4. Air Services Provided Under Contract with the Federal      Clarifies and codifies that certain air services
 Government.                                                   performed under contract with the Federal
                                                               government are in common carriage.
----------------------------------------------------------------------------------------------------------------

A. NTSB Recommendation

    As a result of an aircraft accident that involved, among other
issues, questions regarding the identity of the operator of the
aircraft, on August 4, 2006, the National Transportation Safety Board
(NTSB) recommended that the Department require the following
information be disclosed to customers and passengers at the time an air
charter contract is arranged and anytime thereafter if such information
changes: (1) The name of the company in operational control of the
aircraft during flight; (2) any other ``doing business as'' names
contained in the Operations Specifications of the carrier in
operational control during the flight; (3) the name of the aircraft
owner; and (4) the names of all brokers involved in arranging the
flight (available at http://www.ntsb.gov/Recs/letters/2006/A06_43.pdf). In response, on January 26, 2007, the Department issued an
Advance Notice of Proposed Rulemaking (ANPRM) seeking comment from
interested parties on the recommendations of the NTSB. We received 23
comments on this rulemaking.
    Of the 18 comments that touched on the disclosure requirements
proposed in the ANPRM, 14 supported requiring disclosure of the entity
in operational control of the aircraft during the flight and seven of
those comments further supported requiring disclosure of associated
``doing business as'' names. Only one comment supported disclosing the
name of the aircraft owner, and that comment suggested that such
disclosure should be made only ``upon request'' of the person or entity
contracting for air transportation. According to the commenters, owners
do not affect the safety of the flight, members of the public might get
a false sense of security based on the reputation of the owner of the
aircraft, and owners would be less likely to make aircraft available
for charter should they not be entitled to privacy. In addition, most
commenters opposed the disclosure of the aircraft owner and all brokers
involved in arranging the flight, if different from the entity in
operational control of the aircraft, primarily on the basis that these
entities do not affect the safety of the flight. Four comments objected
to any disclosures.
    Of the 23 comments, 13 addressed the form in which the disclosures
would be made. Of these, five indicated that verbal notice would be
sufficient, four indicated that written notice should be required, two
indicated that the adequacy of verbal notice would be dependent on the
specific situation, and two indicated that an ``express communication''
would be sufficient. ``Express communication'' was not defined.
    Aside from the accident that resulted in the recommendation to the
Department from the NTSB regarding notice to consumers of the name of
the operator of an on-demand charter flight, the Department is aware
that on-demand charter operators often ``broker'' or ``sub-service'' a
contract for air transportation to another carrier when they are unable
to perform the service themselves. There are various reasons why this
may occur. For example, a suitable aircraft may be available when the
contract for the air service is made with the customer, but may not be
available due to mechanical or other reasons at the planned departure
time. In other cases, the carrier may not operate the type of aircraft
best suited or requested for the flight, but in order not to lose a
valued customer or new business, the carrier accepts the contract
knowing it will have to find another carrier to operate the flight.
    It has been the longstanding policy of the Department in other
contexts that it is an unfair and deceptive practice and unfair method
of competition for an air carrier or a ticket agent to hold out or sell
air transportation on one carrier when the service will be performed by
another carrier. (See 14 CFR Part 257, requiring notice of the
operating carrier involving scheduled code-share and long-term wet
lease operations; see also 14 CFR 380.30 and 380.32, requiring that
public charter participants be told the name of the direct carrier
operating the charter flight.)
    Consumers deserve to be protected in situations in which direct air
carriers enter into contracts for air transportation, either (1)
intending from the outset to ``broker'' or ``sub-service'' that
contract to be operated by another direct air carrier, or (2)
subsequent to entering into the contract, out of necessity, needing to
broker or sub-service that contract to be operated by another direct
air carrier, regardless of the reason for such action. Accordingly, the
Department is proposing to amend 14 CFR Part 298 to prohibit air taxis
and commuter air carriers from soliciting or executing contracts for
single entity charter air transportation to be performed by another
carrier without first providing clear and conspicuous written
disclosure to the person or entity that contracts for that air
transportation of: (1) The corporate name of the direct air carrier in
operational control of the aircraft on which the air transportation is
to be performed and any other names in which that carrier holds itself
out to the public; (2) the capacity in which the air taxi is acting in
contracting for the air transportation; (3) the existence of any
corporate or pre-existing business relationship with the direct air
carrier that will be in operational control of the aircraft on which
the air transportation is to be performed; (4) the make and model of
the aircraft to be used for the air transportation (e.g., Learjet 60
XR); (5) the total cost of the air transportation, including any
carrier-imposed fees or government-imposed taxes and fees; and (6) the
existence of any fees and their amounts, if known, including fuel,
landing fees, and aircraft parking or hangar fees, charged by third
parties for which the charterer will be responsible for paying
directly. If the carrier that is to operate the flight changes after a
contract is arranged, this NPRM would require that a written notice be
provided to the charterer within a reasonable time after the carrier
that contracted with the charter customer learns of the change. A
``reasonable'' time would be enough time for the consumer to make an
informed decision as to whether he or she wants to accept the change.
For

example, should the carrier to operate the flight change one week
before the flight date, the Department would find it ``reasonable'' for
notice to be given within 24 hours of the carrier becoming aware of the
change. On the other hand, the Department would not find it
``reasonable'' for notice to be given less than two hours before
departure in such a circumstance, since that would not give the
consumer time to make an informed decision as to whether to accept the
change. At that point, the consumer would already be fully prepared for
the flight and may in fact already be en route to the airport. The
Department asks for comments on whether it should set a specific time
limit, e.g., 24 hours, for such notice to be provided. Moreover, we are
proposing that the charter customer be entitled to a full refund, at
his or her option, if reasonable notice is not given as described
above. We are not proposing to require carriers to obtain confirmation
from the charter customer of receipt of the notice; however, we ask for
comment on whether we should require such confirmation and, if so, what
type of confirmation would be appropriate in any given situation,
including oral contracts.
    We are also proposing to enumerate certain prohibited unfair and
deceptive practices or unfair methods of competition by air taxis
registered and commuter air carriers. We request comment on whether any
of these practices should not be enumerated in the final rule.
    We wish to make clear that nothing in this proposal is intended to
authorize a direct air carrier to hold out service as a direct air
carrier on a specific aircraft, or type of aircraft, that it is not
authorized to operate by Department and the Federal Aviation
Administration (FAA). This includes holding out large aircraft services
when one has authority to operate only small aircraft and holding out
scheduled services when one has authority to operate only on-demand
services. Such actions always have been, and remain, a violation of the
direct air carrier's authority and an unfair and deceptive practice and
unfair method of transportation. We invite all interested persons to
comment on the issues raised in this notice. Our final action will be
based on the comments and supporting evidence filed in this docket and
on our own analysis.

B. New Class of Indirect Air Carriers

    Air charter brokers are persons or companies that do not currently
hold DOT economic authority to function either as an indirect air
carrier or as a direct air carrier, but that arrange air transportation
services for prospective charter customers (charterers) to be provided
by direct air carriers. Under current law, since brokers have no
authority to hold out air transportation in their own right as a direct
or an indirect air carrier, to comply with existing law they must act
as the agent of a charterer or the agent of a carrier. Of course, they
may also act as a true ``middle-person'' and simply facilitate a
contract directly between the charterer and carrier, but such
arrangements are, in the Department's experience, the exception rather
than the rule. The typical air charter broker operating lawfully today
is, under applicable law, a ``ticket agent.'' A ticket agent is defined
in 49 U.S.C. 40102(a)(45) as ``a person (except an air carrier, a
foreign carrier, or an employee of an air carrier or foreign air
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.''
    The increased market for business aviation-related air charters,
primarily using small aircraft, along with the growth of the Internet,
has, in turn, created a significant growth in the number and role of
air charter brokers. In today's business aviation market, air charter
brokers increasingly play a role in marketing air transportation
services to be operated by direct air carriers and in providing
charterers with convenient access to thousands of direct air carriers
and a wide range of aircraft. Air charter brokers also often provide
charterers with various ancillary services that are not provided by
most direct air carriers, such as ground transportation, catering
special meals, and general concierge services. The Department has
responded to the proliferation of air charter brokers, as described
more fully below, by conducting considerable industry outreach to make
clear to air charter brokers that they may not mislead the public about
their status. In addition, the Department has taken enforcement action
against a number of air charter brokers found to have engaged in unfair
and deceptive practices and unfair methods of competition.
    In order to engage directly or indirectly in air transportation of
passengers, a citizen of the United States is required to hold economic
authority from the Department pursuant to 49 U.S.C. 41101, or an
exemption from that statutory requirement, such as those provided by 14
CFR Part 298 for direct air carriers operating small aircraft, by 14
CFR Part 296 for indirect air carriers that hold out and sell air
freight services, and by 14 CFR Part 380 for indirect air carriers that
hold out and sell public charter passenger flights. Similarly, persons
or entities that are not U.S. citizens are required to hold economic
authority under 49 U.S.C. 41301, or an exemption from that statutory
requirement, such as those provided by 14 CFR Part 294 to Canadian
charter carriers to operate small aircraft, by 14 CFR Part 297 to
foreign indirect air carriers to engage in indirect air carriage of
cargo, and by 14 CFR Part 380 to foreign indirect air carriers to hold
out and sell public charter passenger flights. Indirect air carriers
must use direct air carriers that meet the economic licensing
requirements of the Department and the appropriate safety certification
requirements of the FAA or, if appropriate, a foreign government
authority.
    The Department, and its predecessor, the Civil Aeronautics Board
(CAB), have long sought to permit the marketplace to govern the sale of
air transportation, provided appropriate consumer protections are in
place. To this end, the Department has authorized various classes of
indirect air carriers to engage in air transportation. For example, as
described above, in 1977, the Department authorized air freight
forwarders by exemption to engage in indirect air carriage of cargo,
provided that foreign air freight forwarders first register with the
Department and that both U.S. and foreign freight forwarders give
consumers certain important notices, including whether they are acting
in their individual capacity or as the agent of an airline. (14 CFR
Parts 296 and 297.) In 1980, with regard to passenger air
transportation, the CAB implemented 14 CFR Part 380 to authorize a
class of indirect air carrier called public charter operators to engage
in charter air transportation on a per-seat basis. Unlike direct air
carriers, public charter operators are not required to undergo fitness
determinations examining their financial fitness, managerial
competence, and compliance disposition. However, public charter
operators must instead comply with strict requirements set forth in
Part 380 designed to ensure an adequate level of protection for
consumers and their funds. In this regard, for example, public charter
operators may not hold out or sell charter flights without first having
a contract with a direct air carrier to perform those flights; they
must have in place comprehensive financial security measures to protect
passenger deposits; they must adhere to certain contract conditions
governing important

provisions, such as flight changes or cancellations and refunds; and
they must file with and have approved by the Department a prospectus
covering each flight in their public charter program. In addition, in
1983, the CAB authorized entities that arranged air ambulance services
to operate as indirect air carriers to engage in the sale of air
ambulance services provided that they used direct air carriers holding
appropriate economic and safety authority. (Order 83-1-36, 99 C.A.B.
801 (1983))
    The Department also has always believed that accurate, timely, and
clearly presented information is essential so that consumers can make
informed decisions about their flight choices. Therefore, the
Department has had longstanding, comprehensive rules applicable to
ticket agents, including air charter brokers, that prohibit them from,
among other things: (1) Misleading the public into believing they are
air carriers; (2) misleading the public about the qualifications of
pilots or the safety record or certification of air carriers, aircraft,
or crew; (3) misleading the public about the quality or kind of
service, including the size or type of aircraft and route to be flown;
and (4) selling air transportation without a binding commitment with a
direct air carrier for that transportation. (14 CFR 399.80.)
    In October 2004, in response to the growth in the air charter
broker industry and certain problems that accompanied that growth which
had come to the Department's attention, including the unlawful holding
out of air transportation by air charter brokers, the Department's
Office of Aviation Enforcement and Proceedings (Enforcement Office)
issued a notice providing guidance on the lawful role of air charter
brokers in providing air transportation. http://airconsumer.ost.dot.gov/rules/BrokerNoticeFinal.pdf. That notice
reminded air charter brokers that: (1) Without authority, they may not
hold out air transportation in their own right or enter as principals
into contracts with customers to provide air transportation; and (2) as
ticket agents, they may not engage in various practices enumerated in
14 CFR 399.80 as unfair and deceptive or unfair methods of competition,
including creating the false impression that they are an air carrier.
The Enforcement Office suggested in the guidance that each air charter
broker should, in any advertisement of its services, clearly convey the
fact that the broker is not a direct air carrier and that the air
service advertised will be provided by a properly licensed direct air
carrier. Although the guidance recognized the public benefits that
could flow where air charter brokers were able to act as a principal in
providing air transportation and invited air charter brokers to seek
exemptions from existing Department regulations to offer such services,
that offer has not proven useful, primarily due to the business model
of today's air charter brokers, as described below. Moreover, despite
this guidance and continued outreach efforts by Department staff
through participation at industry seminars and conferences, as well as
through more informal guidance, there have been many instances in which
the Department has found it necessary to take enforcement action
against air charter brokers for violations of the licensing
requirements of 49 U.S.C. 41101 and the prohibition against engaging in
unfair and deceptive practices and unfair methods of competition of 49
U.S.C. 41712 and 14 CFR 399.80.
    Despite the growth in the marketplace for the services of air
charter brokers, the regulations that now exist to authorize indirect
air carriers to engage in passenger air transportation are not
conducive to the industry served by air charter brokers. In this
regard, air charter brokers, particularly those involved with business
aviation-related air charters, have not been able to take advantage of
the authorizations noted above for other indirect air carriers, a
situation that may have stifled innovation and consumer benefits that
normally flow from a more open, competitive marketplace. For example,
Part 380 has been the only lawful means of offering indirect air
transportation services for passengers other than those in need of air
ambulance services, but it would be extremely difficult for an air
charter broker to comply with that regulation for single entity
business-related air charters. In particular, under Part 380 an air
charter broker would need to file a prospectus with the Department
detailing the charter program and could not vary from the schedule of
flights filed without first filing an amendment. In addition, Part 380
dictates the specific terms of the contract of carriage between the
passenger and indirect air carrier, such as those involving
advertising, delays, cancellations, and refunds, in order to protect
passenger expectations. Part 380 also is designed to protect
passengers' financial interests as well, through bonding and escrow
requirements applicable to public charter operators as well as to the
airlines that operate public charter flights.
    The business models of the on-demand air charter industry,
including the services provided by the majority of air charter brokers
that use the services of on-demand air carriers, do not easily fit into
the requirements of Part 380. Customers are often businesses or high-
net worth individuals, and the flight itinerary is of the customer's
choice and the customer can change it at any time, including en route.
In addition, other important contract terms, such as aircraft type and
charter price, are subject to negotiation. Moreover, unlike the vast
majority of airlines operating flights for public charters, which must
undergo a stringent fitness test and also escrow charter funds, the
fitness and financial protections applicable to the small air carriers
operating on-demand charter flights are minimal. In this regard, air
taxi operators may operate ``small aircraft'' (those that as originally
designed to have 60 passenger seats or fewer or a maximum payload
capacity of 18,000 pounds or less) after filing a registration
statement with the Department stating that they are a U.S. citizen and
have requisite liability insurance and listing the aircraft that they
operate. Under Part 298, air taxi operators must provide public notice
of their policies on baggage liability and denied boarding
compensation. (14 CFR 298.30.) Because of the nature of their business
model and the nature and specific provisions of Part 380, air charter
brokers cannot reasonably be expected to provide their services under
Part 380 or an exemption from certain of its provisions. Accordingly,
in recognition of the important public benefits in connection with air
transportation that air charter brokers might provide, we are proposing
to allow air charter brokers to operate as indirect air carriers,
subject to appropriate consumer protection provisions.
    More specifically, we are proposing to create a class of indirect
air carrier to be named ``air charter brokers'' that are permitted as
principals in their own right to engage in single entity charter air
transportation aboard large and small aircraft pursuant to exemptions
from certain provisions of Subtitle VII of Title 49 of the United
States Code (Transportation) and to establish rules for the provision
of indirect air transportation of passengers by air charter brokers.
    The Department also seeks comment on the last clause in the
proposed definition of a ``single entity charter'' that would allow
individuals who self-aggregate to form a single entity, despite the
fact that they may be bearing a portion of the cost of the charter. If
the

Department were to accept the definition as it is currently proposed,
would it be necessary to change to the definition of single entity
charter in 14 CFR Part 212?
    Under this proposal, air charter brokers would, in essence, self-
identify. In other words, there would be no formal licensing process or
registration, as is the case currently with indirect air carriers
engaging in air transportation in connection with air ambulance
services and U.S. air freight forwarders engaging in the indirect air
carriage of cargo. (Nothing in this proposal would apply to persons or
entities that, as an employee or bona fide agent of an air carrier,
hold out, sell, or undertake to arrange air transportation, or as a
bona fide agent of a charterer, arrange for air transportation for that
charterer.) Commenters who do not want the Department to allow air
charter brokers to self-identify should propose an alternative and
provide information regarding the costs to the government to administer
and to air charter brokers to comply with their proposed alternative.
    While the Department proposes a system of self-identification for
all air charter brokers, we ask whether the Department should adopt a
registration system applicable only to non-U.S. citizen air charter
brokers, similar to that in place for foreign air freight forwarders,
so that the Department can ensure that a grant of such authority to
non-U.S. citizens is in the public interest, including consideration of
whether there is effective reciprocity in the treatment of U.S. air
charter brokers in other countries? Regardless of whether a
registration system for non-U.S. air charter brokers is adopted, we are
tentatively of the opinion that requiring certain disclosures by all
air charter brokers to protect charter customers is in the public
interest. In this regard, we propose to require that an air charter
broker disclose clearly and conspicuously in any solicitation materials
its status and the fact that it is not a direct air carrier and will
use an authorized direct air carrier to provide the transportation it
offers. We also propose to require that a charterer be informed in
writing, prior to purchasing the air transportation, of the following:
(1) The corporate name of the direct air carrier in operational control
of the aircraft on which the air transportation is to be performed and
any other names in which that carrier holds itself out to the public;
(2) the capacity in which the air charter broker is acting in
contracting for the air transportation, i.e., as an indirect air
carrier, as an agent of the charterer, or as an agent of the direct air
carrier that will be in operational control of the flight; (3) the
existence of any corporate or business relationships with a particular
direct air carrier(s) that may or will be used for the air
transportation; (4) the make and model of the aircraft to be used for
the transportation (e.g., Learjet 60 XR); (5) the total cost of the air
transportation paid to the air charter broker, including any air
charter broker or carrier-imposed fees, or government-imposed taxes and
fees; (6) the existence of any fees and their amounts, if known,
including fuel, landing fees, and aircraft parking or hangar fees,
charged by third parties for which the charterer will be responsible
for paying directly; and (7) the existence or absence of liability
insurance held by the air charter broker covering the charterer and
passengers and property on the charter flight, and the monetary limits
of any such insurance. We ask for comment on whether there is
additional information that should be provided to charterers or whether
any of the aforementioned information is not essential and need not be
provided charterers. For example, we are disposed to conclude, as we
have in other contexts, that consumers deserve to know the direct air
carrier on which they will be travelling before committing to a charter
flight. (See 14 CFR Parts 257 and 380)
    Under this NPRM, if any of the seven items listed above that we are
proposing that air charter brokers disclose in writing to charter
customers prior to purchase changes subsequent to the contract being
formed, the air charter broker would be required to provide this new
information to the consumer within a reasonable time of such
information changing. A ``reasonable'' time would be enough time for
the charterer to make an informed decision as to whether he or she
wants to accept the change. For example, should the carrier to operate
the flight change one week before the flight date, the Department would
find it ``reasonable'' for notice to be given within 24 hours of the
carrier becoming aware of the change. On the other hand, the Department
would not find it ``reasonable'' for notice to be given two hours
before departure in such a circumstance, since that would not give the
charter customer time to make an informed decision as to whether to
accept the change. At that point, the charterer would already be fully
prepared for the flight and may in fact already be en route to the
airport. The Department asks for comments on whether it should set at
specific time limit, e.g., 24 hours, for such notice to be provided.
    If reasonable notice is not provided, the consumer would have the
option of receiving a full refund if he/she no longer wished to take
the flight because of the change. We are not proposing to require air
charter brokers obtain confirmation from the charterer of receipt of
the notice; however, we ask for comment on whether we should require
such confirmation and, if so, what type of confirmation would be
appropriate in any given situation, including oral contracts.
    With regard to the proposed requirement to provide written notice
of the total cost of the air transportation prior to purchase, we
recognize that, as is customary in the on-demand charter industry, the
ultimate price of the air transportation normally borne by the
charterer, including the amount of government taxes and fees applicable
to that price, may be dependent on factors whose cost is not known at
the time a contract is signed, such as the cost of fuel at the time of
travel, aircraft wait time, or aircraft repositioning costs. We propose
that, in such an event, the requirement to disclose the ``total'' cost
in writing prior to purchase would be considered met so long as the air
charter broker conspicuously identifies and discloses the existence of
all items that may impact the total cost, including the range of fees
associated for each item, as well as any factors which would cause the
fees to be in the high or low range. The fare advertising requirements
in 14 CFR 399.84 would not apply. We ask for comment on this approach.
    In addition, the Department asks for comment on its proposal to
subject air charter brokers to 14 CFR Part 374, which implements
statutes and regulations governing credit transactions, including those
requiring credit card refunds within seven business days of receiving
complete documentation. The Department's longstanding policy on cash
refunds, which recently was codified with regard to scheduled airlines,
requires cash refunds within 20 days of receipt of full documentation
of such a request. Should the Department impose similar cash refund
requirements in this rule for air charter brokers? If not, what
distinguishes the business of air charter brokers that supports their
not being required to comply with such refund requirements?
    We are also proposing to enumerate certain prohibited unfair and
deceptive practices or unfair methods of competition by air charter
brokers. We request comment on whether any of these practices should
not be enumerated in the final rule.
    We are also considering imposing a requirement on air charter
brokers to retain certain records for the purpose of

determining regulatory compliance. If so, what specific records should
the Department require air charter brokers to retain?

C. Air Ambulance Services

    Entities that arrange air ambulance services as indirect air
carriers have been authorized through a blanket exemption granted in
1983 by the Civil Aeronautics Board to engage in the sale of air
transportation in connection with air ambulance services. Order 83-1-
36, 99 C.A.B. 801 (1983). The only condition placed to date upon this
class of indirect air carrier has been that they use direct air
carriers holding appropriate Federal economic and safety authority for
such operations.
    Over the years, the Department's Aviation Enforcement Office has
received informal complaints, primarily from companies involved in the
air ambulance industry, regarding the conduct of other individual air
ambulance indirect air carriers. Those complaints generally have
alleged that an indirect air carrier has misled the public about the
nature of its operations, such as inducing the public to believe that
it operates aircraft when it does not. Such conduct violates the
licensing requirements of 49 U.S.C. 41101 and therefore the exemption
authority of Order 83-1-36 and constitutes an unfair and deceptive
practice and unfair method of competition in violation of 49 U.S.C.
41712. The Department has provided guidance about the role of indirect
air carriers providing air ambulance services and has found it
necessary to take enforcement action against a number of air ambulance
indirect carriers for engaging in the unlawful practices noted above.
Similar enforcement action has been taken based on information
uncovered during investigations undertaken by the Enforcement Office on
its own initiative.
    The fundamental nature of these violations stems from the failure
of air ambulance indirect air carriers to provide the public
information about the nature of their operations in a clear and
conspicuous manner. Consumers of the services of air ambulance indirect
air carriers deserve no less protection than persons using the services
of the air charter brokers. As such, we are proposing to require that
indirect air carriers that provide air transportation in connection
with air ambulance services ensure appropriate protections for
consumers of those services similar to those proposed for air charter
brokers.
    Specifically, we propose to codify the blanket exemption authority
granted air ambulance indirect air carriers by Order 83-1-36 under the
new Part 295. Under the proposed rule, the provisions prohibiting
unfair and deceptive practices and enumerating specific prohibited
practices in section 295.50 would apply to air ambulance indirect air
carriers, e.g., misrepresentations that the air charter broker is a
direct air carrier. However, air ambulance indirect air carriers would
be excluded from the disclosure requirements of section 295.24, e.g.,
the corporate name of the direct air carrier in operational control of
the aircraft. We invite comment on this proposal in general, as well as
on whether any of the specific provisions of proposed section 295.24
should apply to indirect air carriers engaged in air ambulance
services. Commenters opposed to including air ambulance indirect air
carries under proposed Part 295 should be specific as to why the rule
or any specific provision contained in the rule, such as the disclosure
requirements in section 295.24, should not apply. For example, are
there certain types of air ambulance indirect air carriers for which
the complying with the disclosure requirements would not be feasible or
reasonable given the nature of their operations, e.g., emergency
medical evacuations.

D. Air Services Performed Under Contract With the Federal Government

    This NPRM also addresses air charter broker issues relating to
contracts with the Federal government. On November 25, 2009, CSI
Aviation Services, Inc., an aviation broker providing services to the
Federal government, filed an application for an exemption to permit it
to act as a principal in contracts with Federal government agencies. On
April 14, 2010, the Department issued a final order exempting CSI and
other similarly situated air charter brokers from the requirements of
49 U.S.C. 41101 and applicable Department regulations to the extent
necessary for such air charter brokers to engage in domestic and
foreign indirect air transportation of persons, property, and mail
pursuant to contracts with Federal government agencies arranged under
the General Services Administration (``GSA'') Schedule Special Item
Number (``SIN'') 599-5, Air Charter Services-Brokers. (Order 2010-4-7,
Issued April 13, 2010.) The Department noted that the rulemaking at
issue here was being developed, but decided that it was not in the
public interest to prohibit air charter brokers from engaging in
indirect air transportation under contract with the U.S. Government via
the GSA Schedule pending completion of a broader rulemaking proceeding.
That exemption authority was subsequently extended in March 2011 for
another year. (Department Order 2011-3-8, issued March 3, 2011.)
    Then, on April 1, 2011, the United States Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) issued its opinion in CSI
Aviation Services, Inc., v. U.S. Dept. of Transportation, a case
involving an air charter broker's challenge to a warning letter from
the Department's Office of Aviation Enforcement and Proceedings
(Enforcement Office). The Enforcement Office warned the air charter
broker that, in its opinion, the air charter broker was unlawfully
holding out air transportation by being on a General Service
Administration's schedule listing companies as available to contract as
principals with Federal government agencies to provide air
transportation when it held no economic authority to do so. The court
found, among other things, that the Department failed adequately to
explain its interpretation of the statutory definition for ``air
transportation,'' and, in particular, why it considered CSI's
arrangement with GSA to constitute ``common carriage.'' Although the
court preliminarily determined that CSI's operation under the GSA
schedule arrangement involving only government entities did not appear
to be ``common carriage,'' it left open the possibility that the
Department may ``reasonably conclude otherwise in the future after
demonstrating a more adequate understanding of the statute.'' (CSI
Aviation Services, Inc., No. 09-1307, slip op. at 14 (D.C. Cir. April
1, 2011)). We appreciate the Court's advice and take this opportunity
to clarify any misunderstanding regarding the matter and to codify,
through this rulemaking, the long-standing position of various courts,
as followed by the Department and the Civil Aeronautics Board before it
and as supported by Congressional intent, that contracting for air
transportation with the Federal government, with limited exceptions not
applicable to our action here, involves common carriage operations.
    As early as 1925, the U.S. Supreme Court held that transportation
provided to a Federal government agency amounted to common carriage.
St. Louis, B. & M. RY. CO. v. United States, 268 U.S. 169, at 173 (Apr.
27, 1925.) (``[i]n respect to furnishing transportation, a railroad
ordinarily bears to the government the same relation that it does to a
private person using its facilities.''). Other Federal courts have made
clear that transportation provided under contract with the government
is no less common carriage than that provided private

parties. U.S.A.C. Transport, Inc., v. United States, 203 F.2d 878, at
879 (10th Cir. 1953), citing United States v. Schupper Motor Lines,
Inc., 77 F. Supp. 737 (1948). Thus, transportation provided for or on
behalf of the government, as opposed to transportation provided by the
government, amounts to common carriage.
    The fact that transportation provided for a government entity
amounts to common carriage is also seen in the longstanding policies
and regulations of the Department and the CAB before it. In this
regard, 14 CFR Part 212 provides non-safety related rules applicable to
U.S. and foreign direct air carriers operating passenger or cargo
charter flights in air transportation. ``Air transportation'' includes
the transportation of passengers by air as a ``common carrier'' between
places in different states or between a place in the United States and
a place outside the United States. (49 U.S.C. 40102(a)(5), (a)(23), and
(a)(25)) In the context of aviation, a ``common carrier'' is a person
or other entity that, for compensation or hire, holds out or provides
to the public transportation by air between two points. (Woolsey v.
NTSB, 993 F.2d 516, 522-23 (5th Cir. 1993)) Section 212.4(b)(2) of the
Department's regulations, 14 CFR 212.4(b)(2), specifically authorizes
certificated and foreign air carriers to conduct single entity charters
pursuant to contracts with the Department of Defense (DOD). The
substantive requirements of section 212.4(b)(2) were originally
established in 1966 when the CAB revised its economic regulations to
set forth the terms, conditions, and limitations for the conduct of
``certificated supplemental air transportation,'' which was defined, in
essence, to mean charter trips in air transportation pursuant to a
certificate of public convenience and necessity. In the final rule, the
CAB defined the term ``charter flight'' to include ``[a]ir
transportation of persons and/or property pursuant to contracts with
the Department of Defense where the entire capacity of one or more
aircraft has been engaged by the Department.'' 31 FR 4771, March 22,
1966. Clearly the CAB and the Department, as well as the DOD,
considered contracts with that agency to amount to common carriage
operations to be regulated by the Department to the extent necessary.
    Support for this conclusion is also found in the Department's
regulations at 14 CFR Parts 241 and 298 that require reporting of
operations in air transportation and foreign air transportation by
airlines. There is a special category in Part 241 for reporting of
``Nonscheduled Military Passenger/Cargo'' and ``Nonscheduled Military
Cargo'' operations by large certificated air carriers (14 CFR Part 241,
Sec. 19-4) and the Department requires certificated air carriers, as
well as air taxi and commuter air carriers to report, in these special
categories, domestic and international military operations. (14 CFR
Part 241, Sec 19-6 and 14 CFR 298.70, respectively) It is axiomatic
that only flights in common carriage and therefore under the
Department's jurisdiction are subject to its reporting requirements.
    Support for the conclusion that contracts with the Federal
government for air transportation constitute common carriage is also
found in Congressional action. In this regard, the ``Fly America Act''
requires that U.S. government agencies shall ensure that government
financed air transportation is provided by ``an air carrier holding a
certificate under 49 U.S.C. 41102.'' (49 U.S.C. 40118) The original
text of the statute when it first became law in 1975 states that
Federal agencies shall ``procure, contract for, or otherwise obtain''
air transportation provided by ``air carriers holding certificates
under section 401 of the [Federal Aviation Act] to the extent
authorized by such certificates or by regulations or exemption of the
Civil Aeronautics Board . . .'' International Air Transportation Fair
Competitive Practices Act of 1974 (Pub. L. 93-624, Jan. 3, 1975).
Although the text of the statute has been substantially amended since
1975, it has retained the essential requirement that government funded
air transportation must be provided by a certificated ``air carrier,''
which is a statutorily defined term--``a citizen of the United States
undertaking by any means, directly or indirectly, to provide air
transportation'' (49 U.S.C. 40102(a)(2))--applicable only in the
context of common carriage. Congress clearly envisioned that contracts
with the government for air transportation are in common carriage. Had
it thought otherwise, Congress could have used a broader term in the
Fly America Act in place of ``air carrier,'' such as ``aircraft
operated by a U.S. citizen,'' which would have covered both common
carriage and private carriage, yet still achieve the main purpose of
the Fly America Act. Congress chose not to do so, indicating that it
was mindful of the difference between common carriage, requiring
adherence to economic licensing requirements and the highest level of
safety, and private carriage, which has no economic licensing
requirements and is not required to meet the same higher safety
standards required of common carriers.
    We are therefore taking this opportunity to reemphasize the
Department's longstanding determination that contracts with the Federal
government arranged under the GSA Schedule involving government
entities are in fact in ``common carriage'' and subject to the
Department's jurisdiction and to codify that such contracts arranged by
air charter brokers also involve common carriage by including such a
provision in our proposed rule on air charter brokers. In addition, in
keeping with Congressional intent that government financed air
transportation be provided by an air carrier holding a certificate
under 49 U.S.C. 41102 or an exemption from that provision, we are
proposing to require that all contracts for air transportation with
government entities arranged by air charter brokers through the GSA
Schedule must comply with the Fly America requirements of 49 U.S.C.
40118. Failure to comply with this requirement would be cause to revoke
an air charter broker's authority on public interest grounds.

Regulatory Analysis and Notices

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

    This action has been determined not to be significant under
Executive Order 12866 and the Department of Transportation's Regulatory
Policies and Procedures. It has not been reviewed by the Office of
Management and Budget under that Executive Order. The Regulatory
Evaluation finds that the benefits for the proposed rule exceed its
costs. The passenger benefits from the proposed requirements are not
possible to quantify. The value of this rulemaking would be the
increased transparency for both the public and competitors in this
market. There is also value in the timely and accurate production of
information to aid in consumer decision-making, but this also cannot be
quantified. The baseline or midrange estimate of costs incurred by air
charter brokers and carriers over a 20-year period at a 7 percent
discount rate is $1.256 million. More detail on the estimates can be
found in the preliminary Regulatory Impact Analysis associated with
this proposed rule.

B. 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

regulation that 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. It does not propose any regulation that imposes substantial
direct compliance costs on State and local governments. It does not
propose any regulation that preempts state law, because States are
already preempted from regulating in this area under the Airline
Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation and
funding requirements of Executive Order 13132 do not apply.

C. Executive Order 13084

    This notice 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.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) was
enacted by Congress to ensure that small entities are not unnecessarily
and disproportionately burdened by government regulations. It requires
that agencies review regulations that may have a significant economic
impact on a substantial number of small entities, and if possible to
fit regulatory and informational requirements to the scale of the
entities subject to regulation. However, if it is determined that a
rule is not expected to have a significant economic impact on a
substantial number of small entities, section 605(b) of the RFA
provides that the head of the agency may so certify and a regulatory
flexibility analysis is not required. The certification must include a
statement providing the factual basis for this determination, and the
reasoning should be clear.
    Our analysis identified a total of 2,121 small direct air carriers
(i.e., U.S. air carriers that provide air transportation exclusively
with aircraft that seat no more than 60 passengers) that could
potentially be affected by the requirements of this NPRM. In addition,
we are treating all the indirect air carriers (i.e., air charter
brokers including those that provide air ambulance services) as small
entities. The criteria for identifying small business entities are
provided by the Small Business Administration in its publication, Table
of Small Business Size Standards Matched to North American Industry
Classification System Codes. These size standards are customarily based
on an entity's gross receipts or its employment. There is no North
American Industry Classification System (NAICS) code for air charter
brokers. Industries that are similar to air charter brokers are
Nonscheduled chartered passenger air transportation (NAICS code
481211), Travel agencies (NAICS code 561510) and All other travel
arrangements and reservations services (NAICS code 561599). It is
important to note that firms in NAICS code 481211 provide
transportation services, while air charter brokers do not. If air
charter brokers were treated as analogous to these firms, all air
charter brokers would be small entities.
    The Department believes that the cost impact of this rulemaking on
air taxis is de minimis, since the only requirement in this NPRM that
would mandate affirmative action on their part is a disclosure
requirement.
    With regard to air charter brokers, there are three requirements
that would apply to them. Two of these requirements involve disclosure.
First, in their solicitations and advertising materials, the NPRM would
require air charter brokers to disclose certain information in writing
to consumers. Second, before entering into contracts for a flight or
series of flights, the NPRM would require air charter brokers to
disclose certain additional information. The third, the NPRM would
mandate that air charter brokers make prompt refunds of monies paid for
single entity charter air transportation when such refunds are due.
    The Department does not consider this cost to be significant,
especially since a sizeable part of the air charter broker industry
already makes such disclosures as part of current business practice. As
a result, the Department certifies that the proposed rule would not
have a significant economic impact on a substantial number of small
entities. The Department requests comments from affected entities on
this finding and determination.

E. Paperwork Reduction Act

    This NPRM does not propose any 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.
Sec.  3501 et seq.).

F. Unfunded Mandates Reform Act

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

List of Subjects

14 CFR Part 295

    Air charter brokers.

14 CFR Part 298

    Exemptions for air taxi and commuter air carrier operations.

    Issued this 11th day of September, 2013 at Washington, DC, under
authority delegated in 49 CFR part 1.27.
Kathryn B. Thomson,
Acting General Counsel.
    Accordingly, 14 CFR chapter II is proposed to be amended as
follows:

0
1. A new Part 295 is added to read as follows:

PART 295--AIR CHARTER BROKERS

Sec.
Subpart A--General
295.1 Purpose.
295.3 Applicability.
295.5 Definitions.
Subpart B--Exemption Authority
295.10 Grant of economic authority; exemption from the Statute.
295.12 Suspension or revocation of exemption authority.
295.17 Contract with government entities.
Subpart C--Consumer Protection
295.20 Use of duly authorized direct air carriers.
295.22 Misrepresentations.
295.24 Disclosures.
295.26 Refunds.
Subpart D--Violations
295.50 Unfair and deceptive practices and unfair methods of
competition.
295.52 Enforcement.

    Authority: 49 U.S.C. Chapters 401, 411, 413, and 417.

Subpart A--General

Sec.  295.1  Purpose.

    This part creates a new class of indirect air carrier--air charter
brokers--to provide indirect air transportation of passengers on single
entity charters aboard large and small aircraft by granting exemptions
to such air charter brokers from certain provisions of Subtitle VII of
Title 49 of the United States Code (Transportation), and establishes
rules, including consumer protection provisions, for the provision of
such air transportation by air charter brokers.

Sec.  295.3  Applicability.

    (a) This part applies to any person or entity acting as an air
charter broker as defined in this part with respect to single entity
charter air transportation that the air charter broker, as a principal
in its own right, holds out, sells or undertakes to arrange aboard
large and small aircraft. Except for the disclosure requirements found
at 295.24, this part also applies to persons or entities authorized by
Civil Aeronautics Board Order 83-1-36 to engage in air transportation
as indirect air carriers in connection with air ambulance services and
described in that order as air ambulance operators.
    (b) This part does not apply to a person or entity that, as an
employee or as a bona fide agent of an air carrier, holds out, sells,
or undertakes to arrange air transportation. This part does not apply
to a person or entity acting as the bona fide agent of a charterer in
arranging for air transportation for that charterer. This part does not
authorize air charter brokers to hold out, sell, or undertake to
arrange scheduled air transportation in their individual capacity or on
behalf of air carriers.

Sec.  295.5  Definitions.

    For the purposes of this part:
    (a) Air transportation means interstate or foreign air
transportation, as defined in 49 U.S.C. 40102(5), 40102(23), and
40102(25).
    (b) Air charter broker means a person or entity that holds out,
sells, or undertakes to arrange planeload, single entity passenger
charter air transportation, other than as an employee or bona fide
agent of an air carrier or a charterer, using a direct air carrier, or
using another provider of air transportation.
    (c) Charterer means the person or entity that contracts with an air
charter broker for the transportation of the passengers flown on a
charter flight.
    (d) Charter air transportation means charter flights in air
transportation and foreign air transportation authorized under Part A
of Subtitle VII of Title 49 of the United States Code.
    (e) Direct air carrier means a U.S. or foreign air carrier that
provides or offers to provide air transportation and that has control
over the operational functions performed in providing that
transportation.
    (f) Indirect air carrier means a person or entity that, as a
principal, holds out, sells, or arranges air transportation and
separately contracts with direct air carriers or other providers to
perform such air transportation.
    (g) Single entity charter means a charter for the entire capacity
of the aircraft, the cost of which is borne by the charterer and not
directly or indirectly by individual passengers, except in cases in
which individual passengers self-aggregate to form a single entity.
    (h) Statute means Subtitle VII of Title 49 of the United States
Code (Transportation).
    (i) Large aircraft means any aircraft originally designed to have a
maximum passenger capacity of more than 60 seats or a maximum payload
capacity of more than 18,000 pounds.
    (j) Small aircraft means any aircraft originally designed to have a
maximum passenger capacity of 60 seats or fewer or a maximum payload
capacity of 18,000 pounds or less.

Subpart B--Exemption Authority

Sec.  295.10  Grant of economic authority; exemption from the statute.

    To the extent necessary to permit air charter brokers to hold out,
sell, or undertake to arrange single entity charter air transportation,
air charter brokers are exempted from the following provisions of
Subtitle VII of Title 49 of the United States Code, except for the
provisions noted below, only if and so long as they comply with the
provisions and the conditions imposed by this part: Chapter 411,
Chapter 413, Chapter 415, and Chapter 419. Air charter brokers are not
exempt from the following provisions: Section 41310 (nondiscrimination)
with respect to foreign air transportation.

Sec.  295.12  Suspension or revocation of exemption authority.

    The Department reserves the power to suspend or revoke the
exemption authority of any air charter broker, without a hearing, if it
finds that such action is necessary in the public interest or is
otherwise necessary in order to protect the traveling public.

Sec.  295.17  Contracts with government entities.

    Contracts by air charter brokers with the Federal government
arranged under the GSA Schedule for air transportation are in common
carriage and must meet the requirements of 49 U.S.C. 40118.

Subpart C--Consumer Protection

Sec.  295.20  Use of duly authorized direct air carriers.

    Air charter brokers are not authorized under this part to hold out,
sell, or otherwise arrange charter air transportation to be operated by
a person or entity that does not hold the requisite form of economic
authority from the Department and appropriate safety authority from the
Federal Aviation Administration and/or, if applicable, a foreign safety
authority. Air charter brokers are not authorized under this part to
hold out air transportation to be performed by a direct air carrier
that the direct air carrier would not in its own right be able to hold
out.

Sec.  295.22  Prohibited unfair and deceptive practices and unfair
methods of competition.

    An air charter broker or foreign air charter broker shall not
engage in any unfair or deceptive practice or unfair method of
competition.

Sec.  295.24  Disclosures.

    (a) All solicitation materials and advertisements, including
Internet Web pages, published or caused to be published by air charter
brokers shall clearly and conspicuously state that the air charter
broker is an air charter broker, and that it is not a direct air
carrier in operational control of aircraft, and that the air service
advertised will be provided by a properly licensed direct air carrier.
    (b) Before entering into a contract for a specific flight or series
of flights, air charter brokers must disclose the following information
in writing to the charterer, which may be accomplished through
electronic transmissions. If the transaction occurs orally, the
following information must be disclosed orally, and again in any
written correspondence, including correspondence confirming the
purchased air transportation.
    (1) The corporate name of the direct air carrier in operational
control of the aircraft on which the air transportation is to be
performed and any other names in which that direct air carrier holds
itself out to the public.
    (2) The capacity in which the air charter broker is acting in
contracting for the air transportation, i.e., as an indirect air
carrier, as an agent of the charterer, or as an agent of the direct air
carrier that will be in operational control of the flight.
    (3) The existence of any corporate or business relationship between
the air charter broker and the direct air carrier that will be used for
the air transportation.
    (4) The make and model of the aircraft to be used for the
transportation (e.g., Learjet 60 XR).
    (5) The total cost of the air transportation paid to the air
charter broker, including any air charter broker or carrier-imposed
fees, or government-imposed taxes and fees.
    (6) The existence of any fees and their amounts, if known,
including fuel,

landing fees, and aircraft parking or hangar fees, charged by third
parties for which the charterer will be responsible for paying
directly.
    (7) The existence or absence of liability insurance held by the air
charter broker covering the charterer and passengers and property on
the charter flight, and the monetary limits of any such insurance.
    (c) If the information required to be disclosed in paragraph (b) of
this section is not known at the time the contract is entered into, air
charter brokers must provide the information in paragraph (b) of this
section to the charterer within a reasonable time after such
information becomes available.
    (d) If the information in paragraph (b) of this section is not
provided to the charterer within a reasonable time after becoming
available, air charter brokers must provide the charterer with the
opportunity to cancel the contract for air transportation, including
any services in connection with such contract, and receive a full
refund of any monies paid for the charter air transportation and
services.
    (e) In all circumstances, air charter brokers must disclose the
information in paragraph (b) of this section to the charterer prior to
the start of the air transportation.
    (f) If the information in paragraph (b) of this section changes
after the air transportation covered by the contract has begun, air
charter brokers must provide information regarding any such changes to
the charterer within a reasonable time after such information becomes
available.
    (g) If the changes in information described in paragraph (f) of
this section are not provided to the charterer within a reasonable time
after becoming available, air charter brokers must provide the
charterer with the opportunity to cancel the remaining portion of the
contract for air transportation, including any services paid in
connection with such contract, and receive a full refund of any monies
paid for the charter air transportation and services not yet provided.

Sec.  295.26  Refunds.

    Air charter brokers must make prompt refunds of all monies paid for
charter air transportation when such transportation cannot be performed
or when such refunds are otherwise due, as required by 14 CFR 374.3 and
12 CFR Part 226 for credit card purchases, and within 20 days after
receiving a complete refund request for cash and check purchases.

Subpart D--Violations

Sec.  295.50  Unfair and deceptive practices and unfair methods of
competition.

    (a) Violations of this Part shall be considered to constitute
unfair and deceptive practices and unfair methods of competition in
violation of 49 U.S.C. 41712.
    (b) In addition to paragraph (a) of this section, the following
enumerated practices, among others, by an air charter broker or foreign
air charter broker are unfair or deceptive practices or unfair methods
of competition in violation of 49 U.S.C. 41712:
    (1) Misrepresentations that may induce members of the public to
reasonably believe that the air charter broker or foreign air charter
broker is a direct air carrier.
    (2) Using or displaying or permitting or suffering to be used or
displayed the name, trade name, slogan or any abbreviation thereof, of
the air charter broker, in advertisements, on or in places of business,
or on or in aircraft or any other place in connection with the name of
an air carrier or with services in connection with air transportation,
in such manner that it may mislead or confuse the traveling public with
respect to the status of the air charter broker.
    (3) Misrepresentations as to the quality or kind of service, type
or size of aircraft, time of departure or arrival, points served, route
to be flown, stops to be made, or total trip-time from point of
departure to destination.
    (4) Misrepresentations as to qualifications of pilots or safety
record or certification of pilots, aircraft or air carriers.
    (5) Misrepresentations that passengers are directly insured when
they are not so insured. For example, where the only insurance in force
is that protecting the air carrier in event of liability.
    (6) Misrepresentations as to fares, charges, or special priorities
for air transportation or services in connection therewith.
    (7) Misrepresentations as to membership or involvement with a
particular organization that audits air charter brokers or direct air
carriers, or that the air charter broker or any direct air carriers to
be used for a particular flight meets a particular standard set by an
auditing organization.
    (8) Representing that a contract for a specified direct air
carrier, aircraft, space, flight, or time, has been arranged, without a
binding commitment with a direct air carrier for the furnishing of such
definite reservation or charter as represented.
    (9) Selling or contracting for air transportation while knowing or
having reason to know or believe that such air transportation cannot be
legally performed by the entity that is to operate for the air
transportation.
    (10) Misrepresentations as to the requirements that must be met by
charterers in order to qualify for charter flights.

Sec.  295.52  Enforcement.

    In case of any violation of any of the provisions of the Statute,
or of this part, or any other rule, regulation, or order issued under
the Statute, the violator may be subject to a proceeding under section
46101 of the Statute before the Department, or sections 46106 through
46108 of the Statute before a U.S. District Court, as the case may be,
to compel compliance. The violator may also be subject to civil
penalties under the provisions of section 46301 of the Statute, or
other lawful sanctions, including revocation of the exemption authority
granted in this part. In the case of a willful violation, the violator
may be subject to criminal penalties under the provisions of section
46316 of the Statute.

PART 298--[AMENDED]

0
2. The authority citation for 14 CFR Part 298 continues to read as
follows:

    Authority: 49 U.S.C. 41102, 41708, and 41709.

0
3. A new Sec.  298.90 is added to read as follows:

Sec.  298.90  Disclosures.

    (a) Air taxi operators or commuter air carriers are prohibited from
contracting with charterers for charter flights that will be operated
by another direct air carrier without first clearly and conspicuously
disclosing in writing to the charterer that the flight will be operated
by another direct air carrier and providing the following disclosures
to the charterer:
    (1) The corporate name of the direct air carrier in operational
control of the aircraft on which the air transportation is to be
performed, and any other names in which that direct air carrier holds
itself out to the public.
    (2) The capacity in which the air taxi operator or commuter air
carrier is acting in contracting for the air transportation, i.e., as a
principal, as an agent of the charterer, or as an agent of the direct
air carrier that will be in operational control of the flight.
    (3) The existence of any corporate or business relationship between
the air taxi operator or commuter air carrier

and the direct air carrier that will be in operational control of the
charter flight.
    (4) The make and model of the aircraft to be used for the
transportation (e.g., Learjet 60 XR).
    (5) The total cost of the air transportation, including any
carrier-imposed fees or government-imposed taxes and fees.
    (6) The existence of any fees and their amounts, if known,
including fuel, landing fees, and aircraft parking or hangar fees
charged by third-parties for which the charterer will be responsible
for paying directly.
    (b) If the information required to be disclosed in paragraph (a) of
this section is not known at the time the contract is entered into, air
taxi operators or commuter air carriers must provide in writing the
information in paragraph (a) of this section to the charterer within a
reasonable time after such information becomes available.
    (c) If the information in paragraph (a) of this section is not
provided to the charterer within a reasonable time after becoming
available, air taxi operators or commuter air carriers must provide the
charterer with the opportunity to cancel the contract for air
transportation, including any services in connection with such
contract, and receive a full refund of any monies paid for the charter
air transportation and services.
    (d) In all circumstances, air taxi operators or commuter air
carriers must disclose the information in paragraph (a) of this section
to the charterer prior to the start of the air transportation.
    (e) If the information required to be disclosed in paragraph (a) of
this section changes after the air transportation covered by the
contract has begun, air taxi operators or commuter air carriers must
provide information regarding any such changes to the charterer within
a reasonable time after such information becomes available.
    (f) If the changes in information described in paragraph (e) of
this section are not provided to the charterer within a reasonable time
after becoming available, air taxi operators or commuter air carriers
must provide the charterer with the opportunity to cancel the remaining
portion of the contract for air transportation, including any services
paid for in connection with such contract, and receive a full refund of
any monies paid the charter air transportation and services not yet
provided.
0
4. A new Sec.  298.100 is added to read as follows:

Sec.  298.100  Prohibited unfair and deceptive practices and unfair
methods of competition.

    An air taxi or commuter air carrier subject to this part shall not
engage in any unfair or deceptive practices or unfair method of
competition in holding out, selling, or operating charter flights. The
following enumerated practices, among others, by an air taxi or
commuter air carrier are unfair or deceptive practices or unfair
methods of competition:
    (a) Misrepresentations that may induce members of the public to
reasonably believe that the air taxi or commuter air carrier will be,
or is, in operational control of a flight when that is not the case.
    (b) Misrepresentations as to the quality or kind of service, type
or size of aircraft, and points served.
    (c) Misrepresentations as to the quality or kind of service, type
or size of aircraft, time of departure or arrival, points served, route
to be flown, stops to be made, or total trip-time from point of
departure to destination.
    (d) Misrepresentations that passengers are directly insured when
they are not so insured. For example, where the only insurance in force
is that protecting the air taxi or commuter air carrier in the event of
liability.
    (e) Misrepresentations as to fares, charges, or special priorities
for air transportation or services in connection therewith.
    (f) Representing that a contract for specified direct air carrier,
aircraft, space, flight, or time, has been arranged, without a binding
commitment with a direct air carrier for the furnishing of such
definite reservation or charter as represented.
    (g) Selling or contracting for air transportation while knowing or
having reason to know or believe that such air transportation cannot be
legally performed by the entity that is to operate the air
transportation.

[FR Doc. 2013-23142 Filed 9-27-13; 8:45 am]
BILLING CODE 4910-9X-P