travel because he or she has contracted a serious communicable disease
or has been advised by a medical professional or determines consistent
with public health guidance not to travel because he or she is likely
to have contracted such a disease to be acting reasonably. Consumers
would also be acting reasonably if they do not travel, during a public
health emergency, to protect themselves from a serious communicable
disease based on restrictions, advisories, and guidance issued by CDC,
comparable agencies in other countries or WHO. Also, a consumer may be
unable to travel in relation to a serious communicable disease because
of restrictions imposed by a governmental entity (e.g., stay at home
order, border closure).
    This NPRM proposes to mandate that airlines and ticket agents
provide credits or vouchers under certain circumstances and specifies
the form and nature of these credits or vouchers. It also proposes that
U.S. and foreign air carriers and ticket agents provide refunds during
a future public health emergency, in lieu of travel vouchers or
credits, to consumers if the carrier or ticket agent receives
significant government financial assistance, as determined by the
Department, regarding the public health emergency. The Department
believes that a regulation defining the baseline of accommodations to
non-refundable ticket holders and identifying the specific
circumstances that would give rise to the need to accommodate
passengers when they cancel or postpone their travel would greatly
enhance consumer protection. Without such requirements, airlines and
ticket agents may have different interpretations of what types of event
would be sufficient to justify a deviation from the non-refundable
terms of a ticket. Such application of interpretations may result in
not only increased consumer confusion and frustration, but also
increased administrative cost to airlines and ticket agents for
handling customer service requests and complaints from consumers with
different perspectives.
    Aside from enhanced protection of consumers' financial interests,
the Department believes that a regulation providing protection to non-
refundable ticket holders who are unable to travel by air due to
reasonable concerns related to a serious communicable disease is needed
to promote and maintain a safe and adequate aviation transportation
system. 49 U.S.C. 41702 requires U.S. carriers to provide safe and
adequate interstate air transportation and 49 U.S.C. 40101(a) directs
the Department in carrying out aviation economic programs such as
regulations under 49 U.S.C. 41702 and 41712 to consider certain
enumerated factors as being in the public interest. These factors
include ``the availability of a variety of adequate, economic,
efficient, and low-priced services without unreasonable discrimination
or unfair or deceptive practices'' and ``preventing unfair, deceptive,
predatory, or anticompetitive practices in air transportation,'' as
well as ``assigning and maintaining safety as the highest priority in
air commerce.'' Large scale public health emergencies such as the
COVID-19 pandemic often lead to a significant loss of human life and
profoundly impact how people live and behave. This includes a general
reluctance to travel during a pandemic, particularly among certain
sectors of the population, such as the elderly, individuals with
certain health conditions that may place them at greater risk of
serious illness if they contract the disease, or those who are their
caregivers. These consumers face heightened risks when traveling during
a pandemic because of the potentially more severe consequences of them
contracting the communicable disease. Nevertheless, some may take risks
and travel if they have expended funds on airline tickets that they are
unable to recoup. Similarly, individuals who have contracted a serious
communicable disease such as COVID-19 or have been advised by a medical
professional or determine consistent with guidance

issued by a public health authority not to travel because they are
likely to have such a disease may travel, rather than self-quarantine
as may be suggested by government-issued advisories, if they are unable
to recoup the cost of their ticket. This NPRM would protect passengers'
financial interests in airline tickets that they purchased when they
are unable or choose not to travel due to reasonable concerns about a
serious communicable disease, which would encourage them to postpone
travel and avoid potential harm to themselves and others in the
aviation system. The Department seeks comments on whether requiring
airlines and ticket agents to issue travel credits or vouchers to non-
refundable ticket holders in these situations and refunds when entities
receive government assistance is an appropriate way for the Department
to promote safe and adequate air transportation.
Proposals
(1) Travel Credits or Vouchers to Passengers Who Are Restricted or
Prohibited From Traveling by a Governmental Entity in Relation to a
Serious Communicable Disease Whether or Not There Is a Public Health
Emergency
    Under this NRPM, airlines and ticket agents would be required to
provide non-expiring travel credits or vouchers, instead of refunds
except under limited circumstances as described in paragraph (10) of
this section, to a non-refundable ticket holder who is restricted or
prohibited from traveling by a governmental entity for reasons related
to a serious communicable disease. A consumer may be restricted or
prohibited from travel by air through directives such as government
issued ``stay at home'' orders or ``shelter in place'' orders.
Governments may also institute border closure or entry restrictions for
certain types of passengers. The governments imposing these
restrictions may be a foreign government or the U.S. government at the
Federal, State, or local level. The Department believes that it is
fundamentally unfair to allow airlines and ticket agents to enforce the
non-refundability of tickets on consumers under these types of
circumstances, which are out of the consumers' control.
    Under this proposal, consumers would be entitled to a non-expiring
voucher or credit if, after the consumers purchased airline tickets, a
government order was issued to prohibit a passenger from leaving the
place of origination or entering into the place of transition or
destination or if the government order renders the passenger's travel
meaningless. For example, if a passenger plans to travel to a vacation
destination and stay for a week but after the passenger purchased his
or her ticket the government of the destination city imposes a seven-
day quarantine requirement for all arriving passengers, the purpose of
this passenger's travel would be rendered meaningless. In these types
of situations, we are proposing that the passenger be entitled to
cancel the travel and receive a travel credit or voucher. On the other
hand, passengers would not be entitled to a travel credit or voucher if
they simply failed to exercise due diligence to ensure that all
conditions for travel imposed by the governments of the departure,
transit, or arrival locations are met. For instance, a passenger who
failed to obtain a negative test result for a communicable disease
within 48-hour of departure if required by the government of
destination would not be eligible for a travel credit or voucher under
this proposal. Further, the Department's proposal would only cover
government-issued travel restrictions or prohibitions in relation to a
serious communicable disease. This NPRM does not address passengers
subject to border closure or entry restriction for reasons not related
to a serious communicable disease, such as security reasons. The
Department expects that many instances would be analyzed on a case-by-
case basis to determine whether a passenger would be eligible to
receive a travel credit or voucher under this proposal. We welcome
comments on whether the proposed requirement for a non-expiring voucher
or credit strikes the right balance given that the travel restrictions
are out of the airlines' and ticket agents' control and the
differential economic impact of a refund mandate versus a travel credit
or voucher on airlines and ticket agents in these circumstances.
(2) Travel Credits or Vouchers to Passengers Who Are Advised or
Determine Consistent With Public Health Guidance Not To Travel To
Protect Themselves From a Serious Communicable Disease During a Public
Health Emergency
    The NRPM proposes that, when there is a public health emergency,
airlines and ticket agents must provide non-expiring travel credits or
vouchers to non-refundable ticket holders who are advised by a medical
professional or determine consistent with public health guidance issued
by the CDC, comparable agencies, or WHO not to travel by air to protect
themselves from a serious communicable disease. Under this NPRM, for
airlines to incur this obligation, the non-refundable ticket holder
must have booked the ticket before the beginning of the public health
emergency and the travel date must be during the public health
emergency.
    The NPRM further clarifies that a ``public health emergency,'' as
used in this proposed regulation, is defined in the U.S. Department of
Health and Human Services (HHS) regulation addressing measures taken by
CDC to quarantine or otherwise prevent the spread of communicable
diseases, 42 CFR 70.1.\41\ The Department believes that adopting HHS's
definition of public health emergency is appropriate here to capture
large-scale outbreaks of a serious communicable disease that would
significantly impact air travel on a regional, national, or global
basis, during which the Department's regulation is warranted to ensure
a basic level of protection for air travelers affected by the events.
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    \41\ At the time of the publication of this NPRM, the definition
for ``Public health emergency'' in 42 CFR 70.1 is: (1) Any
communicable disease event as determined by the Director with either
documented or significant potential for regional, national, or
international communicable disease spread or that is highly likely
to cause death or serious illness if not properly controlled; or (2)
Any communicable disease event described in a declaration by the
Secretary pursuant to 319(a) of the Public Health Service Act (42
U.S.C. 247d (a)); or (3) Any communicable disease event the
occurrence of which is notified to the World Health Organization, in
accordance with Articles 6 and 7 of the International Health
Regulations, as one that may constitute a Public Health Emergency of
International Concern; or (4) Any communicable disease event the
occurrence of which is determined by the Director-General of the
World Health Organization, in accordance with Article 12 of the
International Health Regulations, to constitute a Public Health
Emergency of International Concern; or (5) Any communicable disease
event for which the Director-General of the World Health
Organization, in accordance with Articles 15 or 16 of the
International Health Regulations, has issued temporary or standing
recommendations for purposes of preventing or promptly detecting the
occurrence or reoccurrence of the communicable disease.
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    This NPRM is intended to extend broad protection to consumers
scheduled to travel by air to, within, and from the United States
during a public health emergency and are advised by a medical
professional or determine consistent with public health guidance issued
by CDC, comparable agencies in other countries, or WHO not to travel
due to a health condition that makes the traveler particularly
vulnerable to the disease. In recognition of the significant economic
impact of public health emergencies, the Department is proposing to
require airlines and ticket agents to provide non-expiring vouchers and
credits (and refunds under the limited circumstances

as described in paragraph (10) of this section) to these passengers.
The Department believes that this strikes the right balance between
protecting consumers on the one hand and preserving and ensuring a
healthy air transportation industry on the other. The Department notes
that although the proposed requirement may result in a large amount of
credits and vouchers owed to consumers on carriers' accounting records,
it would not result in an immediate reduction of the carriers'
revenues. The Department believes that the proposal, which would
mandate non-expiring credits and vouchers for consumers to use in the
future instead of refunds, would enable airlines and agents to better
manage their liquidity and reduce the risk of bankruptcies.
    The Department welcomes comments regarding whether it is reasonable
to mandate that airlines and tickets agents issue non-expiring travel
credits and vouchers to passengers who have purchased their airline
tickets before the declaration of a public health emergency and are
advised not to travel during a public health emergency to protect
themselves from a serious communicable disease. As stated earlier,
during the COVID-19 pandemic, many airlines have voluntarily provided
vouchers to consumers who were unable or chose not to travel because of
health concerns related to the pandemic. These vouchers, however, were
valid only for specified time periods and had other conditions and
restrictions associated with them. We are interested in comments
related to obstacles airlines and ticket agents may face when
voluntarily providing travel credits and vouchers to consumers who
could not or chose not to travel during the pandemic. Also, we solicit
comment on whether airlines and ticket agents should be required to
provide consumers more flexibility on the use of vouchers by allowing
the use of vouchers by travelers other than the traveler named in the
original ticket or use for travel on different interline partners. We
are also interested in feedback regarding any difficulties that
consumers may have experienced in redeeming credits and vouchers issued
to them and what the Department should consider in the proposed
regulation to address or resolve these difficulties. With respect to
the scope of qualified consumers, the Department's proposal would be
limited to consumers who have purchased their tickets before the public
health emergency. The Department recognizes that this limitation would
not extend the proposed enhanced financial protection to consumers who
purchase tickets during a public health emergency but later find out
that their condition or situation has changed such that it results in a
reluctance or inability to travel. For example, a consumer may have
developed a new health condition after having purchased the ticket
during a public health emergency and the new health condition makes the
consumer more susceptible to the serious communicable disease. Another
example is if the airline reduces the safety measures in place to
protect consumers from contracting this serious communicable disease.
The Department seeks comments on whether the proposed travel credit/
voucher issuance requirement should cover these consumers or if it
would be preferable to have a bright line rule that the protections are
limited to those consumers who purchased their airline tickets before
the declaration of a public health emergency.
(3) Travel Credits or Vouchers to Passengers, Who Are Advised or
Determine Consistent With Public Health Authority Guidance Not To
Travel Irrespective of a Public Health Emergency, Because the Passenger
Has or May Have a Serious Communicable Disease and Would Pose a Direct
Threat to Health of Others
    Beyond widespread infections of a communicable disease that lead to
a ``public health emergency'' declaration by relevant governing
entities, this NPRM also addresses incidents of passengers who are
advised not to travel because they have or may have contracted a
serious communicable disease and, to protect the health of others, the
passengers do not take their scheduled flight. These incidents may
occur regardless of whether there is a public health emergency. The
NPRM proposes to require airlines and ticket agents to provide non-
expiring vouchers and credits, instead of refunds, in these types of
incidents, unless the incidents occur during a public health emergency
and the airline or ticket agent has received significant financial
assistance from their home country as described in paragraph (10) of
this section. However, the Department seeks comment on other
alternatives.
    It is the Department's understanding that airlines in general would
allow and prefer that a passenger with a serious communicable disease
in the contagious stage not travel, and airlines would likely grant an
exception from the tickets' non-refundability to allow the passenger to
reschedule travel. In fact, if a passenger carrying a serious
communicable disease wants to travel, airlines would likely take steps
to ensure that the health of others in the flight is protected. Such
steps include conducting an assessment regarding whether the passenger
would pose a direct threat to the health of others, requesting medical
documentation, taking precautions to prevent the transmission of the
disease in the cabin while transporting the passenger, or if
appropriate, denying boarding. In the event that a passenger who has a
serious communicable disease wishes to postpone travel, the Department
believes that it would be in the interest of carriers, passengers and
the public at large for the travel to be postponed. This would protect
the health of the public and prevent the further transmission of a
serious communicable disease. The Department notes that this proposal
only intends to cover passengers who have or are likely to have
contracted a serious communicable disease, as determined by current
medical knowledge (e.g., directives issued by public health authorities
such as CDC) or a medical professional treating the consumer.
    This proposal defines a serious communicable disease to mean a
communicable disease as defined in 42 CFR 70.1 that has serious
consequences and can be easily transmitted by casual contact in an
aircraft cabin environment. The analysis of whether a communicable
disease is ``serious'' under this NPRM is similar to the analysis of
``direct threat'' under the Department's disability regulation.\42\
Under that regulation and this proposal, carriers would consider the
significance of the consequences of a communicable disease and the
degree to which it can be readily transmitted by casual contact in an
aircraft cabin environment. Communicable diseases that are readily
transmissible but do not result in significant health consequences
(such as the common cold) or those carrying significant health
consequences but are not readily transmissible (such as AIDS) are not
``serious'' communicable diseases for the purpose of this proposal.
Conversely, the SARS-CoV-2 virus that causes the COVID-19 infection
would be considered a ``serious'' communicable disease because it is
readily transmissible in the aircraft cabin and would likely cause
significant health consequences in many people. The Department solicits
comment on its definition of a serious communicable disease. Is it
sufficiently clear to the regulated entities and the public as to which
types of

communicable diseases would and would not be considered serious? Is
there a better way to define serious communicable disease?
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    \42\ See 14 CFR 382.21(b)(2).
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    The Department, although not a public health agency, believes that
using economic tools as incentives to discourage passengers who would
pose a risk to the health of others from traveling is consistent with
its mission of ensuring that the air transportation system is safe for
the public. The Department notes that requests from passengers who are
advised by a medical professional or determine consistent with public
health guidance not to travel because they have or may have a serious
communicable disease infection should be infrequent and place little
burden on the airlines outside of the context of public health
emergencies. The Department solicits comment on the potential for abuse
if it adopts, at the final rule stage, its proposal that whether or not
there is a public health emergency airlines provide credits or vouchers
to individuals who have been advised by a medical professional or
determine consistent with public health guidance not to travel because
they have or may have a serious contagious disease. The proposed rule
would allow airlines to require such persons to provide documentation
from a medical professional and/or guidance issued by CDC, comparable
agencies, or WHO that the consumer should not travel by commercial air
transportation. The Department seeks comment on whether this is
sufficient to prevent abuse.
    Are there concerns about individuals falsely stating that they have
serious communicable disease? If so, how should the Department address
these concerns? Are there ways to distinguish between consumers who,
after considering public health advisories or medical professional
opinions, genuinely determine that they may have contracted a serious
communicable disease, and consumers who want to take advantage of the
ability to claim vouchers or credits without a real suspicion of having
contracted a serious communicable disease? Should the requirement for
airlines to provide a credit or voucher only be triggered if the
consumer has instructed by a medical professional or public health
authority that he or she must quarantine or isolate and therefore
cannot fly as opposed to consumers who are advised or determine
consistent with public health guidance that they have or may have
contracted a serious communicable disease?
    In addition, should the Department consider alternatives to
requiring airlines to offer vouchers or credits to consumers who have
been advised by a medical professional or determine consistent with
public health guidance not to travel because they have or may have
contracted a serious communicable disease? If so, are there other
actions airlines could take to protect consumers from the harm of
losing the value of their tickets? For example, would an airline waiver
of change fees be sufficient protection? Given the COVID-19 pandemic,
many airlines have suspended change fees for most of their tickets
allowing passengers to adjust travel schedules for any reason without
contacting the airline. Some airlines have also created an economy
class of tickets that allow for full refunds when the passenger cancels
before departure under most circumstances. Should the Department
require airlines to allow consumers to change their tickets without
charging a fee instead of providing them non-expiring vouchers or
credits? If so, should such a requirement apply to all classes of
tickets, regardless of airline change fee policies? In addition, should
the Department place additional requirements on airlines, such as
allowing consumers to change the ticket multiple times or to keep the
ticket open so that the consumer could select the new flight at a later
date? The Department welcomes comments on its proposal as well as
suggestions on alternative methods to protect consumers who are advised
by a medical professional or determine consistent with public health
guidance not to travel because they have or may have a serious
communicable disease.
(4) Supporting Documentation To Be Provided to Airlines or Ticket
Agents
    The Department is cognizant of the airline industry's longstanding
ticket pricing practice that applies restrictions and fewer
flexibilities to less expensive ticket categories. While proposing a
regulation to ensure that passengers who have legitimate reasons to
postpone travel are accommodated, the Department believes that it is
reasonable for airlines and ticket agents to implement safeguards to
prevent abuse. Under this proposal, airlines and ticket agents would
have the option to assess the validity of passengers' reasons to
postpone travel before issuing travel vouchers, credits, or refunds to
them.
    To determine whether a passenger's ability or willingness to travel
is impacted due to government restrictions related to a public health
emergency, this proposal allows airlines and ticket agents to require
passengers to present materials to demonstrate that government
requirements are restricting their air travel. These requirements could
include a quarantine isolation order or a border closure notice or
entry restriction issued by a government. A local stay at home order
that restricts local travel may also be a reasonable ground if it
impacts the passenger's entry or exit of the local vicinity through air
travel. To the extent that a passenger is asserting an inability or
unwillingness to travel to protect himself or herself or others from a
serious communicable disease, airlines and ticket agents would be
permitted to request that the passenger provide a current written
statement from a licensed medical professional attesting that it is the
medical professional's opinion, based on current medical knowledge and
the passenger's health condition, that the passenger should not travel
by commercial air transportation. A general ``fear'' that a passenger
may have about traveling when there is a public health emergency
declared would not be sufficient to entitle that passenger to a travel
credit or voucher.
    The Department seeks comments on the adequacy of types of
information that the Department would allow airlines and ticket agents
to seek from passengers requesting a travel credit or voucher for
future travel. If a public health emergency has been declared and the
reason that the passenger is seeking to postpone travel is related to
risk to his or her health, should the Department specify that the
medical documentation explain the reason that the passenger is more
susceptible than others to contracting a serious communicable disease
during air travel? What, if any, privacy concerns are there with
allowing airlines and ticket agents to seek information from passengers
related to their health? What are possible ways to resolve these
concerns? Are there ways to reduce or prevent unscrupulous passengers
from falsely claiming that they have a serious communicable disease
that prevents them from traveling without airlines and ticket agents
requesting documentation from passengers about their health? If CDC,
WHO or other comparable entities recognize certain groups as being more
vulnerable to contracting a serious communicable disease, then would it
be sufficient for the medical documentation to affirm that the
passenger belongs in one of these groups? For example, in a travel
advisory published by the WHO regarding COVID-19,\43\ WHO advises

that any person in high-risk groups--including those over the age of
60, those with chronic illnesses, and those with underlying health
conditions, should consider postponing travel to areas where COVID-19
is widespread. Although technically members of this vulnerable group
may still travel, the potential serious health risk from contracting
the disease through travel is a material concern that could affect the
person's willingness to travel.
---------------------------------------------------------------------------

    \43\ https://www.who.int/news-room/q-a-detail/coronavirus-disease-covid-19-travel-advice-for-the-general-public.
---------------------------------------------------------------------------

    The Department seeks comments regarding whether it is reasonable to
require airlines and ticket agents to consider and accept a broad scope
of ``travel restrictions, advisories, and guidance'' issued by CDC,
comparable agencies in other countries, and WHO, to support a
consumer's assertion that it is not safe for them to travel. Are
``advisories and guidance'' too broad and vague for consideration? For
example, CDC's current travel advisory system includes three categories
applicable to different countries in the world: Warning Level 3--Avoid
all non-essential Travel; Warning Level 2--Practice enhanced
precautions; and Warning Level 1--Practice usual precautions. In this
example, which Warning Level(s) should be considered as a reasonable
level of restriction with respect to allowing non-refundable ticket
holders to receive a travel credit?
    The Department notes that there are two categories of evidentiary
documentation airlines and ticket agents are permitted to request as a
condition for issuing the travel credits or vouchers under this
proposal--one is government-issued travel restrictions, guidance,
advisories applicable to the public or sectors of the public or
quarantine orders/isolation advisories applicable to the individual
passenger; the other is a written statement by a licensed medical
professional issued to the individual passenger. The Department notes
that, depending on the reason based on which a passenger is seeking to
postpone travel, not all passengers should be required to provide both
categories of documentation. For example, a passenger seeking to
postpone travel due to a compromised immune system may be required to
provide both the government advisory applicable to travelers with a
compromised immune system and a written statement by the passenger's
doctor attesting that the passenger has a compromised immune system. On
the other hand, a passenger seeking to postpone travel due to the
destination country's entry restriction should not be required to
provide any medical documentation. We expect airlines and ticket agents
to use reasonable judgment to determine what type(s) of documentation
is necessary and reasonable to request. We ask whether the proposal
that medical documentation be dated within 30 days of the initial
departure date is reasonable and appropriate.
    Finally, the Department recognizes that many passengers who sought
to defer travel during the COVID-19 pandemic may not fall under one of
the referenced categories. These are passengers who do not have a
health condition themselves but are the caregivers of persons with a
health condition, either through family relationship or employment. The
Department seeks comments on whether this category of passengers should
be included in the protection proposed in this NPRM, and if so, what
are the documentation carriers and ticket agents may request, that are
credible and reasonable. Further, the Department seeks comments on
whether this proposal should also cover both passengers who would have
difficulty traveling alone and their travel companions if only one of
them qualifies for a voucher or refund. For example, if a qualified
passenger is traveling with a minor, should the airline also be
required to provide a voucher or refund to the minor even if the minor
would not otherwise qualify?
(5) Entities Responsible for Issuing Travel Credits or Vouchers
    Some of the complaints filed with the Department against ticket
agents regarding the issuance of credits and vouchers indicate that
they were issued by airlines through the ticket agents, and other were
issued by the ticket agents. Some of the airline vouchers would limit
the redemptions to bookings with the same ticket agents while others
did not have such a restriction. As with issuing refunds for flights
cancelled or significantly changed by airlines, for passengers who
booked air travel with ticket agents requesting a travel credit due to
public health concerns, the Department's proposal would place the
obligation of issuing the credits or vouchers on the entity that
``sold'' the tickets (i.e., identified in the consumer's ticket
purchase financial statement). However, the Department is open to
suggestions on whether the entity obligated to issue credits or
vouchers should be determined based on other criteria that provide
consumers more certainty in receiving the credits and more flexibility
in redeeming the credits. Specifically, should airlines be solely
responsible for issuing credits or vouchers because they are the direct
providers of the air transportation paid for by consumers and the
ultimate recipients of the consumer funds? If so, how can the
Department best ensure that the credits and vouchers are issued
appropriately and promptly by the airline when the airline is not a
principal in the original transaction? What role and responsibility
should be placed on ticket agents to facilitate the issuance of credits
or vouchers by airlines when the ticket agents are the principals of
the initial transactions? In addition to answers to these specific
questions, the Department also seeks general information on the
transactions between airlines and ticket agents that would have an
impact on determination regarding how travel credits and vouchers are
issued for non-refundable ticket holders who could not or choose not to
travel due to public health concerns.
(6) Validity Period for Travel Credits or Vouchers
    The Department is proposing to require that airlines and ticket
agents provide non-expiring credits or vouchers for future travel to
qualifying consumers. The Department has received numerous complaints
from customers concerned that the airline vouchers or travel credits
provided to them would expire before they are able to use them. These
consumers pointed out that given the uncertainty regarding how the
COVID-19 pandemic would progress, government travel restrictions in
place, and specific health concerns related to flying during the
pandemic, they do not expect to travel by air within the validity
periods of the credits or vouchers. The validity periods for credits
and vouchers generally range from 90 days to two years. The two-year
validity period is a result of extensions to the initial validity
periods by certain airlines and ticket agents as the pandemic has
continued far longer than originally anticipated.
    Based in part on the concerns expressed in these complaints, the
Department has tentatively decided that the unpredictability of a
serious communicable disease justifies a proposed requirement for
airlines and ticket agents to provide credits or vouchers for future
travel that do not have an expiration date. These non-expiring vouchers
or credits would be provided to consumers who purchase tickets but are
restricted or prohibited from traveling by a governmental entity (e.g.,
as a result of a stay at home order, quarantine period, entry
restriction, or border closure) due to concerns of a serious
communicable disease; are unable or advised not to travel during a

public health emergency to protect themselves from a serious
communicable disease consistent with restrictions, advisories and
guidance issued by CDC, comparable agencies in other countries, or WHO;
or are unable or advised not to travel because they have contracted a
serious communicable disease and their condition would pose a threat to
the health of others. A non-expiring voucher or credit would provide
consumers greater flexibility and assurance that the vouchers or
credits would be available when they are ready to travel.
    The Department welcomes comments on whether an indefinite validity
period for credits or vouchers issued under this proposal is
reasonable, and if not, the reason that it is unreasonable and what a
reasonable minimum validity period should be. For example, when there
is not a public health emergency, for travel credits or vouchers issued
to passengers who have been advised by a medical professional or
determine consistent with public health guidance not to travel because
they have or may have such a disease, is a validity period of one year
sufficient to ensure that passengers have ample opportunities to use
the credits or vouchers? For travel credits or vouchers issued due to a
public health emergency, should the Department require that they be
valid for one year, or for the duration of the public health emergency,
whichever gives the longer validity period? Commenters are encouraged
to provide information on what challenges airlines and ticket agents
may face when accommodating the redemptions of travel credits and
vouchers that have no expiration dates.
(7) Service Fee by Ticket Agents and Airlines for Processing Credits
and Vouchers; Disclosure
    Similar to the proposal regarding ticket agents' issuance of
airfare refunds when refunds are due, the Department is proposing to
allow airlines and ticket agents to charge a processing fee for the
issuance of credits or vouchers to non-refundable ticket holders when
consumers' travel plans are affected by concerns related to a serious
communicable disease, as proposed in section 259.5(b)(6). The
Department is of the tentative view that ticket agents and airlines
should be allowed to impose a processing fee if the fee is on a per
passenger basis and appropriate disclosures were made to the consumer
prior to the consumer purchasing the airline ticket because neither the
airline or ticket agent initiated the change that is resulting in the
need for a credit or voucher. To ensure transparency and fair treatment
of consumers, the existence of the fee must be clearly and
conspicuously disclosed to consumers at the time of ticket sale. The
Department welcomes comments on whether it is reasonable to permit
airlines and ticket agents to charge a processing fee for the issuance
of travel credits or vouchers. If airlines and ticket agents should be
permitted to charge a fee, what type and manner of disclosure would be
sufficient to avoid consumer confusion for fees applicable for these
specific circumstances?
(8) Value of Credits and Vouchers; Disclosure of Reasonable Conditions,
Limitations, and Restrictions on the Use of Credit or Voucher
    The NPRM proposes that the travel credits or vouchers issued to
qualified consumers be ``a value equal to or greater than the fare
(including government-imposed taxes and fees and carrier-imposed fees
and surcharges).'' The Department is also proposing that the credits or
vouchers include any prepayment of unused ancillary services such as
baggage fees or seat selection fees. The rationale for including the
fees for ancillary services in the credit or voucher given to consumers
is that those services have not been provided by the carrier.\44\ On
the other hand, under this proposal if the required disclosures have
been provided before the consumer purchased the airline ticket, ticket
agents would be allowed to deduct, from the credit or voucher given to
consumers their service charge, if any, for issuing the original ticket
because that service has already been provided. DOT further believes
the fee deduction is appropriate because the consumer's flight is
operating as scheduled and neither the airline or ticket agent
initiated or had control over the change that is resulting in a credit
or voucher being provided. We invite comments on whether allowing
ticket agents to retain the fees collected for service already provided
is reasonable and appropriate.
---------------------------------------------------------------------------

    \44\ The Department's rulemaking on Refunding Fees for Delayed
Checked Bags and Ancillary Services That Are Not Provided proposes
that airlines must refund any ancillary service fees when the
service was not provided. See, supra, FN 7.
---------------------------------------------------------------------------

    In addition to proposing that the value of the travel credit or
voucher be equal to or greater than the airfare, the Department is
considering whether airlines should be required to offer an option to
consumers in which consumers may choose to receive the travel credit or
voucher redeemable for the same itinerary as the original ticket,
regardless of what the ticket cost is at the time of redemption. The
Department believes some consumers may benefit from and prefer this
option if they plan to travel on the same itinerary in the future,
without worrying about price increases. As airfare fluctuates depending
on, among many other factors, travel date, some of the redeemed tickets
may be priced less than the original purchase price of the ticket. In
those situations, airlines would benefit from offering this option.
    Also, the Department proposes to require airlines and ticket agents
provide full disclosure of any material restrictions, limitations, or
conditions on the use of the credits and vouchers. The Department also
proposes to prohibit conditions, limitations, and restrictions imposed
on the credits and vouchers that are unreasonable and would materially
reduce the value of the credits and vouchers to consumers as compared
to the original purchase prices of the airline tickets. For example,
under the proposal, a credit or voucher that would severely restrict
bookings with respect to travel date, time, or routes would be
unreasonable. Similarly, a restriction that a voucher can only be used
on one booking and that any residual value would be void afterwards
would be considered unreasonable. Further, imposing a rebooking fee or
a change fee that reduces the value of the voucher or credit applicable
to the new ticket would be considered unreasonable. However, as noted
earlier, this NPRM would allow a carrier to retain a service fee for
processing the travel voucher or credit, as long as the fee is on a
per-passenger basis and the existence and amount of the fee is clearly
and prominently disclosed to consumers at the time they purchased the
airfare. To ensure that consumers have access to the full value of the
credits or vouchers, the Department also proposes that carriers may not
restrict the redemption of the credits or vouchers by providing that
the value of the credits or vouchers may only cover the base fare of
the new bookings and would not cover any taxes, fees, or surcharges
imposed by the government or the carrier. The Department seeks comments
on whether regulating the terms and conditions of the credits or
voucher in this specific context is reasonable and what other steps the
Department should consider to ensure that passengers receiving credits
and vouchers for future travel are adequately protected.
    In addition to these proposals that intend to ensure consumers
receive accurate information regarding their rights to the full value
of travel credits or vouchers, the Department is interested in
addressing some

consumers' concern that they may not be able to use the travel credit
or voucher due to their age, health condition, or other reasons. The
Department is seeking comments on whether it should require that the
travel credit or voucher be transferrable at the consumers' discretion.
Adding transferability to the travel credit or voucher would ensure
that eligible consumers who spent money on tickets they no longer need
would not completely lose the value of the tickets. If adopted, should
airlines be required to allow multiple transfers? The Department also
seeks comments on whether a regulation is necessary to specifically
require that carriers and ticket agents ensure that relevant provisions
in their contracts with consumers are consistent with the Department's
regulation on issuing travel credits and vouchers if adopted, similar
to the one proposed in 14 CFR 260.9 regarding refunds.
(9) Airline Cancelling or Significantly Changing Flights After
Passenger Cancellation
    Under this NPRM, the protections provided to passengers who
purchase a non-refundable ticket on a flight to, within, or from the
United States and elect to cancel their travel due to government
restrictions or health concerns differ from the protections provided to
passengers who purchase a non-refundable ticket on a flight to, within,
or from the United States that is cancelled or significantly changed by
the airline. An airline cancelling flights or significantly changing
flight itineraries would entitle passengers to a refund. A passenger
cancelling or postponing travel, despite the flights still operating
without a significant change, due to government restrictions or
reasonable concerns of a serious communicable disease would entitle the
passenger to a travel credit or voucher for future travel, except for
limited circumstances where passenger would be entitled to a refund
because of significant government assistance provided to the airline or
ticket agent. The Department is of the tentative view that if an
airline cancels or makes a significant change to a flight after a
passenger has already requested to cancel his or her a travel itinerary
and received a credit or voucher, then the airline or ticket agent
should not be required to replace that voucher with a refund. This is
because at the time the passenger requested a cancellation of the
ticket, the airline was still planning to operate the flight(s) on the
itinerary. The Department believes it is overly burdensome and costly
for airlines to apply refund eligibility to itineraries that have
already been cancelled pursuant to passengers' requests prior to the
airline's decision to cancel or significantly change the flight. That
said, the Department would caution that its Office of Aviation Consumer
Protection has the authority to investigate whether an airline or a
ticket agent has engaged in an unfair or deceptive practice when it
fails to inform a passenger making a request to cancel the itinerary
that the passenger is eligible for a refund, if the airline or ticket
agents knows or should have known at the time that a flight has been
cancelled or significantly changed.
(10) Airlines and Ticket Agents Receiving Significant Government
Financial Assistance Related to a Public Health Emergency
    The impact of a public health emergency on the aviation industry
can be severe. Indeed, the COVID-19 pandemic has led to international
flight restrictions, local ``stay at home'' and ``shelter in place''
orders, and reduced demand for flying, which resulted in a drastic
decrease in the number of flights operated and significant financial
loss for airlines and ticket agents. To ameliorate these negative
consequences, various governments have provided financial support for
airlines and other participants in the aviation industry within their
jurisdiction. They have done so through various types of measures,
including grants and loans, to sustain the industry through these
difficult times and protect airline jobs.
    Consumers, consumer advocacy groups,\45\ and certain members of
Congress \46\ have urged airlines receiving government financial
assistances to provide refunds instead of vouchers or credits to
consumers who decided not to travel due to COVID related reasons. They
assert that it is fundamentally unfair for airlines to be supported by
government funds and refuse to provide refunds to consumers who were
not able to travel due to the COVID-19 pandemic. Similarly, in a letter
to Congress, the National Association of Attorney Generals urged
Congress to consider and enact laws to require carriers that receive
Federal financial relief to provide full refunds to customers who
voluntarily cancel their flight reservations for reasons related to
COVID-19.\47\ Although consumer advocacy organizations and others have
urged the Department to mandate that airlines that received government
funds related to the COVID-19 pandemic refund consumers for flights
that consumers were unable to take due to government restrictions or
advisories related to COVID, the Department is not proposing to do so.
The Department does not have the authority to promulgate retroactive
rules unless that power is expressly authorized by Congress.\48\
However, pursuant to the Department's authority as described in Section
I.B. of this proposed rule, the Department is proposing moving forward
to require U.S. and foreign airlines to issue refunds instead of travel
credits or vouchers to qualified passengers holding non-refundable
tickets for flights that operated without a significant change if the
airlines receive a significant amount of government financial
assistance related to that public health emergency. The Department
seeks comment on how to handle the refund/voucher issuance situation
when there is more than one airline on the ticket and not all airlines
receive significant government financial assistance. To the extent that
a ticket agent sold the ticket to a consumer, as identified by the
consumer's financial charge statement, the Department seeks comment on
whether the airline receiving government assistance should be required
to provide a refund in lieu of the travel credit or voucher.
---------------------------------------------------------------------------

    \45\ See, e.g., Airlines: Give Us Refunds, Not Vouchers,
petition by Consumer Reports, https://action.consumerreports.org/20200420_finance_airlinerefundpetition. Consumer Reports, Letter to
Sect. Buttigieg, https://advocacy.consumerreports.org/wp-content/uploads/2021/11/CR-letter-to-Sec-Buttigieg-consumer-complaints-11-18-21-FINAL-2.pdf.
    \46\ See, e.g., Senator Edward J, Markey and Richard Blumenthal
press release, https://www.markey.senate.gov/news/press-releases/senators-markey-and-blumenthal-blast-airlines-inadequate-response-to-their-request-to-eliminate-expiration-dates-for-all-pandemic-related-flight-credits.
    \47\ See, National Association of Attorney Generals (NAAG) press
release, https://www.naag.org/policy-letter/attorneys-general-call-for-new-consumer-protections-to-protect-airline-industry-customers/.
    \48\ The Supreme Court, in Bowen v. Georgetown University
Hospital, 488 U.S. 204 (1988), said the Administrative Procedure Act
is very clear in defining ``rule'' to mean an agency statement of
future effect. The Court stated that agencies do not have the power
to promulgate retroactive rules unless that power is expressly
authorized by Congress.
---------------------------------------------------------------------------

    In determining the scope of ``government financial assistance''
that would impose a requirement to provide refunds to qualified
passengers holding non-refundable tickets for flights that operated
without a significant change, the Department referenced the definitions
for the terms ``Federal award'' and ``Federal financial assistance'' in
the Office of Management and Budget's regulation on Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards, 2 CFR part 200. The

regulation in 2 CFR 200.1 defines these terms to include a broad range
of financial instruments provided by the Federal government to non-
Federal entities. These instruments include direct cash contributions
such as grants and direct appropriations, cash contributions or
insurance related to loans, loan guarantees, interested subsidies, and
non-cash contributions.
    Upon consideration, DOT proposes to adopt a definition for
``government financial assistance'' in the context of requiring
airlines and ticket agents to provide refunds in lieu of travel credits
or vouchers to qualified passengers affected by a public health
emergency to include cash contributions provided by a government entity
and accepted by a carrier or a ticket agent selling air transportation
to U.S. consumers, even if the carrier or the ticket agent is expected
to provide shares or options of shares of ownership in exchange for the
cash. The Department's proposal would exclude financial assistance in
the forms of government issued, subsidized, or guaranteed loans and
non-cash contributions by a government entity. The proposed definition
would cover not only financial assistance provided by the Federal
government of the United States to U.S. air carriers and ticket agents
based in the United States, but also financial assistance provided by a
foreign central government to a foreign airline or a ticket agent
selling air transportation to U.S. consumers. The Department's proposal
would require airlines and ticket agents to provide refunds in lieu of
travel credits or vouchers to qualified passengers affected by a public
health emergency only if the future financial assistance is
significant. The Department believes that this approach focuses on the
net benefits airlines and ticket agents receive from the government's
direct cash assistance and ensures that some of the benefits they
receive would be passed on to consumers, who also suffer from financial
losses due to the same event for which airlines and ticket agents are
receiving government assistance. The Department seeks comments on
whether significant government financial assistance in the form of tax
relief or loan forgiveness is similar enough to direct cash
contribution such that the Department's proposal on refunds should
include entities receiving these types of financial assistance.
    The Department is cognizant that in many cases, government
financial assistance is granted with a specific purpose. For example,
in the United States, in recognizing the financial difficulties the
airline industry faced due to the COVID-19 pandemic, Congress passed
several statutes in 2020 and 2021 that granted payments to passenger
air carriers, cargo air carriers, and certain contractors, which must
be exclusively used for the continuation of payment of employee wages,
salaries, and benefits. The Department is not proposing to require
airlines or ticket agents to use the specific financial assistances
provided by their government as the sources of consumer refunds.
Instead, the Department is proposing that the requirement for airlines
and ticket agents to provide cash refunds to qualified passengers
holding non-refundable tickets for flights that operated without a
significant change would not start until an airline or ticket agent
receives significant government assistance. This approach recognizes
that airlines and ticket agents would have an increased financial
ability to issue cash refunds at that time.
    The Department's proposal is contingent upon airlines' and ticket
agents' receipt of a ``significant'' amount of government financial
assistance. The NPRM does not propose a specific threshold to determine
whether the government assistance is ``significant'' as the impact of
each public health emergency on the airline industry may differ from
time to time. Rather, the Department proposes to consider relevant
factors, on a case-by-case basis, to determine what amount of
government financial assistance provided to an airline would be
considered ``significant'' and therefore trigger the refund requirement
in the proposed 14 CFR 260.7. The factors that the Department believes
are relevant include: the size of the entity (annual enplanements for
airlines, annual revenue, the number of employees), year-over-year
comparison of traffic and revenue before and after the public health
emergency is declared, and the amount of government financial
assistance accepted in relation to the entity's annual revenue. For
foreign carriers, the Department may also consider their enplanements
to and from the United States in addition to the total enplanements.
The Department notes that taking these factors into consideration,
government financial assistance accepted by numerous U.S. and foreign
carriers during the COVID-19 pandemic, including financial assistance
provided under the CARES Act, could be considered ``significant.'' The
Department seeks comments on whether these considerations are
reasonable to determine what amount of government assistance would be
significant enough to trigger the refund requirement. In addition, the
Department seeks comment on what other considerations are relevant that
are not mentioned here. Should the Department adopt the same amount of
government financial assistance as the benchmark for each public health
emergency, which would apply to all entities, or should the amounts
differ based on the entity's sizes and other considerations? Should
there be a different threshold or a different set of considerations for
ticket agents?
    Regarding the procedure of determining the amount of government
financial assistance that would be considered ``significant'' for the
purpose of airline refunds, the Department seeks comment on a process
in which, upon the occurrence of a public health emergency and the
provision of government financial assistance to the industry, the
Department would apply the relevant factors and seek public comments on
what it tentatively views as being ``significant'' financial assistance
that would trigger the refund requirement. This notice and comment
process would ensure the public's views are fully considered before
there is a determination as to what is significant using the factors
set forth in this rulemaking. It would also ensure that consumers know
when they would be entitled to a refund instead of a non-expiring
voucher or credit.
    The Department emphasizes that to be eligible for a refund under
this proposal, a passenger must be otherwise eligible for a non-
expiring travel credit or voucher under the proposed provisions in 14
CFR 259.5(b)(6) or 14 CFR 399.80(o)(1)(A), and must have made a refund
request from the carrier or ticket agent within 12 months of the date
that a determination has been made that the carrier or ticket agent
received significant government financial assistance in relation to the
public health emergency at issue. Under this proposal, passengers who
have already accepted non-expiring travel credits or vouchers but have
not redeemed them would be able to seek a refund after the airline or
the ticket agent receives the government financial assistance. The
Department believes that limiting the refund obligation to 12 months
would add certainty to airlines with respect to financial and
operational planning, and would also give eligible consumers ample time
to seek refunds. The Department seeks comment on the proposed refund
eligibility timeframe.
    Because this refund requirement for passenger-initiated
cancellations is triggered by significant government financial
assistance provided to carriers

and ticket agents in relation to a public health emergency, when there
is no public health emergency declared, passengers who have or are
likely to have contracted a serious communicable disease that poses a
direct threat to the health of others or those who are restricted from
traveling by a government order in relation to a serious communicable
disease and want to cancel their non-refundable tickets would not be
eligible for a refund but would be entitled to a non-expiring travel
credit or voucher under this proposal.
    As with the proposal to require issuance of travel credits and
vouchers to passengers holding non-refundable tickets, airlines and
ticket agents under the proposed obligation to issue a refund because
of their acceptance of significant government financial assistance
would be allowed to require proof from passengers to demonstrate that
they are unable or advised not to travel consistent with a government
restriction, advisory, or guidance related to a public health
emergency, and if appropriate, provide medical documentation. Carriers
and ticket agents that have previously received required documentation
from passengers for issuing travel credits or vouchers may not require
documentation again when the passenger wants to exchange the unused
credit or voucher for a refund. Carriers and ticket agents under the
proposed obligation to issue a refund in these situations would be
permitted to offer travel credits of the same or higher dollar value or
other compensations, as long as passengers are informed of their
eligibility for a refund.
    The Department notes again that the proposal to require airlines
and ticket agents to issue refunds in lieu of travel credits or
vouchers because airlines and ticket agents receive significant
government financial assistance related to a public health emergency,
if adopted in a final rule, would not apply retroactively. In other
words, if the Department adopts this proposal, airlines and ticket
agents that have already accepted government financial assistance
during the COVID-19 pandemic, would not be required to provide refunds
to eligible consumers on the basis of that assistance even if the
financial assistance would otherwise be deemed ``significant.''
v. Effective Date
    We propose that any final rule we adopt take effect 90 days after
the publication in the Federal Register. We believe this would allow
sufficient time for carriers and ticket agents to comply with the
various proposed requirements should they be finalized. We invite
comments on whether 90 days is the appropriate interval for
implementation of the proposed requirements if adopted in final.

Regulatory Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures and Executive Order 13563 (Improving
Regulation and Regulatory Review)

    Executive Order 12866 (``Regulatory Planning and Review''),
supplemented by Executive Order 13563 (``Improving Regulation and
Regulatory Review''), directs Federal agencies to propose or adopt a
regulation only after making a reasoned determination that the benefits
of the intended regulation justifies its costs. The Office of
Management and Budget has determined that this proposed rule is a
significant regulatory action under Executive Order 12866 and requires
an assessment of potential benefits and costs. Accordingly, the
Department has prepared a regulatory impact analysis for the proposed
rule, summarized in this section and available in the docket. Due to a
lack of usable data to specify a baseline and evaluate impacts, the
analysis is mostly qualitative.
    The proposed rule would clarify the requirement that carriers and
ticket agents give prompt refunds when a carrier cancels flights or
makes significant itinerary changes, including changes that affect the
schedule or quality of service. It would create industry-wide
definitions for ``cancelled flight'' and ``significant change of flight
itinerary'' and define ``prompt'' as within 7 days of a refund request
for credit card purchases and 20 days for purchases by other forms of
payment.
    The proposed rule would also require airlines and ticket agents to
give non-expiring travel credits or vouchers to passengers who do not
travel to protect themselves or others from serious communicable
diseases during a public health emergency and passengers who do not
travel due to government restrictions related to a serious communicable
disease. Airlines and ticket agents could require documentation showing
that the decision was consistent with travel restrictions and guidance
issued by health authorities or medical professionals. For passenger
cancellation requests made during a public health emergency, airlines
and ticket agents would be required to issue cash or cash equivalent
refunds rather than credits or vouchers if they received significant
government financial assistance during the public health emergency,
although the rule does not define ``significant financial assistance.''
The issue of significance would be considered in a subsequent and
separate administrative process.
    Table I summarizes the expected economic impacts of the proposed
rule. The expected net benefits of the proposed rule depend on the
probability that a future state of the world involves a public health
emergency. In the case of no public emergency, the proposed rule will
have only modest impacts, but could result in a decrease in transaction
costs associated with processing and obtaining compensation for
cancellations and significant itinerary changes. Net benefits would be
positive by roughly the amount of this reduction in transaction costs.
With a public health emergency, however, net benefits are likely to be
negative. While benefits are uncertain, we do not expect that the
proposed rule would measurably decrease the spread of serious
communicable disease for several reasons. These reasons include that
the incremental incentive from a non-expiring travel credit relative to
baseline industry practices is limited and unlikely to outweigh
restrictions imposed by public health authorities or individuals' own
risk preferences in the decision to postpone travel. In addition,
during a public health emergency, the proposed rule is likely to
increase transaction and documentation costs. The increase in
transaction costs is mainly due to uncertainty in the definition of
significant government assistance and the requirement creating
additional administrative burdens for receiving government funds. The
proposed rule could also lead to other societal costs depending on
whether it affects industry acceptance of government assistance, but
these impacts are uncertain.
    In terms of distributional effects, we do not expect significant
changes in the absence of a public health emergency. The needed changes
to existing airline policies are small, and passengers would only
rarely need to use the protections related to serious communicable
diseases. With a public health emergency, the number of refunds to
passengers is expected to increase, and fewer passengers are likely to
forfeit travel credits for trips they cancel due to public health
concerns. Thus, while transfers to passengers would largely remain
unchanged without a public health emergency, they would increase during
a health emergency.

               Table I--Summary of Annual Economic Impacts
                             [2021 Dollars]
------------------------------------------------------------------------
                                    Baseline 1: no    Baseline 2: during
                                     public health      a public health
                                       emergency           emergency
------------------------------------------------------------------------
Benefits:
  Reduction in cases of serious   De minimis........  Uncertain.
   contagious disease.
Costs:
  Documentation.................  De minimis........  $55.5 million
                                                       (based on example
                                                       discussed in
                                                       regulatory impact
                                                       analysis).
  Transaction costs.............  Decrease..........  Increase.
  Foregone social benefits of     n/a...............  Uncertain.
   government programs.
Transfers:
  Refunds (transfer from          De minimis........  Increase.
   taxpayers to passengers).
  Redeemed travel credits         De minimis........  Increase.
   (transfer from airlines to
   passengers).
------------------------------------------------------------------------

    Certain regulatory alternatives would reduce transaction costs due
to the proposed rule. For example, removing the refund requirement when
an airline or ticket agent receives significant government financial
assistance would eliminate potential transaction costs due to
ambiguities and would not risk other social costs. Another alternative
that could reduce costs would be not allowing airlines to request
documentation from passengers to demonstrate that they are canceling
travel due to a government order restricting travel or to protect
themselves and others from serious contagious diseases. Airlines would
not be able to distinguish these cancellations from other passenger-
initiated cancellations, however, and passengers would have an
incentive to overuse these protections.
    A third regulatory alternative, which would reduce transaction
costs and eliminate documentation costs, would be limiting the scope of
the proposed rule to adding the new definitions for carrier-initiated
``cancelled flight'' and ``significant change of flight itinerary.''
This alternative would not grant additional protections to passengers
who purchase non-refundable tickets but are unable or choose not to
travel due to conditions related to a public health emergency or
contracting a serious communicable disease.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq.)
requires Federal agencies to review regulations and assess their impact
on small entities unless the agency determines that a rule is not
expected to have a significant economic impact on a substantial number
of small entities. This proposed rule would have some impact on air
carriers and ticket agents that qualify as small entities. To assess
the impact of this proposed rule, the Department has prepared an
initial regulatory flexibility analysis (IRFA), summarized in this
section and available at regulations.gov under Docket No. DOT-OST-2022-
0089.
    A description of the reasons why DOT is considering this action, as
well as the objectives of the proposed rule, is provided in Sections I-
IV of the preamble of this NPRM. The legal basis for the proposed rule
is also set forth in Section I of the preamble.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rule Would Apply
    An air carrier is a small entity if it provides air transportation
exclusively with small aircraft, defined as any aircraft originally
designed to have a maximum passenger capacity of 60 seats or less or a
maximum payload capacity of 18,000 pounds or less, as described in 14
CFR 399.73. In 2020, 28 air carriers meeting these criteria reported
passenger traffic data to the Bureau of Transportation Statistics. A
ticket agent is a small entity if it has total annual revenues below
$22 million (see https://www.sba.gov/document/support--table-size-standards, NAICS Codes 561510). This amount excludes funds received in
trust for an unaffiliated third party, such as bookings or sales
subject to commissions, but includes commissions received. Based on
data from the 2017 Economic Census, which groups firms by NAICS code
and revenue size, 7,827 ticket agents had revenues less than the $25
million threshold in the census. Because this number is higher than the
$22 million NAICS threshold, this number may overestimate the number of
ticket agents who meet the SBA definition of a small business.
Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements
    The proposed rule could have potentially significant impacts on
some number of small entities, depending upon whether a public health
emergency has been declared. Most potential impacts are due to the
proposed requirement that airlines and ticket agent give eligible
consumers refunds rather than non-expiring travel vouchers or credits
when they receive significant government financial assistance during a
public health emergency. Other costs are due to the need to process
documentation when passengers cancel travel because they are restricted
or prohibited from travel by a government order or to protect
themselves and others from serious contagious diseases consistent with
travel restrictions and guidance issued by health authorities.
    In the baseline case where no public health emergency occurs, the
impact of this proposed rule is expected to be minimal because it is
normal business practice for airlines and ticket agents to provide
refunds under the conditions required by this rule. In the baseline
case where a public health emergency occurs, the proposed rule has the
potential to have significant impacts on small entities.
    The number of passengers who would not travel for public health
reasons is difficult to predict, but a hypothetical example illustrates
the potential economic costs associated with the documentation
requirements of the rule for small air carriers. In 2020, small air
carriers in the United States made 1.14 million passenger trips.\49\ If
passengers needed to restrict travel for 5% of the trips and provide
airlines with documentation, passengers would submit approximately
57,000 forms. We assume that a customer service representative working
for an airline or ticket agent would need an average of 5 minutes
(0.083 hours) to review

documentation and request additional documentation if needed, for a
total of approximately 4,750 hours. Using median wage data from the
Bureau of Labor Statistics as of May 2020 for customer service
representatives, we use an estimate of $26.84 ($18.51 median hourly
wage times a multiplier of 1.45 to account for benefit costs).\50\ The
total estimated annual cost of the forms would be approximately
$127,500, or about $4,500 per carrier on average. Some of these costs,
or additional costs, could be borne by small ticket agents.
---------------------------------------------------------------------------

    \49\ Bureau of Transportation Statistics. 2021. ``Full Year 2020
and December 2020 US Airline Traffic Data.'' https://www.bts.gov/newsroom/full-year-2020-and-december-2020-us-airline-traffic-data.
    \50\ Bureau of Labor Statistics. 2022. ``Occupational Employment
and Wages, May 2020: 43-4051 Customer Service Representatives.''
https://www.bls.gov/oes/current/oes434051.htm.
---------------------------------------------------------------------------

    In addition, if airline or ticket agents receive significant
government financial assistance during a public health emergency, then
they would need to issue cash refunds rather than non-expiring travel
vouchers or credits. Tying the cash refund requirement to the receipt
of government assistance adds costs to accepting that assistance.
Relevant Federal Rules Which May Duplicate, Overlap or Conflict With
the Proposed Rule
    The Department did not identify any Federal rules that may
duplicate, overlap, or conflict with this proposed rule, which sets
forth the circumstances under which airlines must provide travel
credits, vouchers, or refunds related to a serious communicable disease
or carrier-initiated flight cancellations or significant changes.
Description of Significant Alternatives Considered
    The Department analyzed two alternatives that would potentially
reduce impacts on small businesses. One alternative is removing the
cash refund requirement as a condition of accepting significant
government assistance. The Department has tentatively concluded,
however, that as a policy matter, airlines receiving significant
government assistances should go beyond issuing travel credits and
vouchers to consumers whose ability or willingness to travel is
significantly impacted by a public health emergency.
    A second alternative is to limit the scope of the rule to
specifying definitions for ``significant change in itinerary'' and
``cancellation.'' The Department has tentatively concluded, however,
that removing this portion of the rule would undermine the Department's
goal to protect consumers' financial interests when the disruptions to
their travel plans were caused by public health concerns beyond their
control. The Department also believes that protecting consumers'
financial interests would further incentivize persons not to travel if
they have or may have a serious communicable disease.

D. Executive Order 13132 (Federalism)

    This NPRM 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.

E. Executive Order 13175

    This NPRM has been analyzed in accordance with the principles and
criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because none of the
options on which the Department is 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 13175 do not apply.

F. Paperwork Reduction Act

    This NPRM proposes a new collection 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.). The proposed rulemaking would allow airlines and ticket agents
to require passengers wishing to cancel a flight itinerary that is
still operated to provide documentation demonstrating that that they
are restricted or prohibited from travel by a government order related
to a serious communicable disease, or that they are unable or choose
not to travel to protect themselves or other from a serious
communicable disease, consistent with restrictions, advisories, or
guidance by relevant health authorities or health professionals. For
this information collection, a description of the respondents and an
estimate of the annual recordkeeping and periodic reporting burden are
set forth below:
Requirement To Prepare and Submit to Airlines Documentations
Demonstrating a Passenger is Unable or Advised Not To Travel Due to
Government Restrictions or Concerns Related to a Serious Communicable
Disease
    Respondents: Passengers restricted from travel due to a government
order related to a serious communicable disease, passengers advised by
a medical professional or determine consistent with public health
guidance issued by CDC, comparable agencies in other countries, or WHO
not to travel by air because they have or may have contracted a serious
communicable disease such that their travel would pose a threat to the
health of others, and passengers advised by a medical professional or
determine consistent with public health guidance issued by CDC,
comparable agencies in other countries, or WHO not to travel to protect
themselves from a serious communicable disease during a public health
emergency.
    Number of Respondents: The number of respondents would vary greatly
depending on whether there is a public health emergency and the
magnitude of that public health emergency. When there is a public
health emergency with a similar magnitude of the COVID-19 pandemic, the
number of respondents could potentially be very high. The Department's
data shows that in 2020, U.S. airlines enplaned 558 million fewer
passengers in domestic air transportation than in 2019.\51\ If 1% of
this reduction was due to passengers are unable or are advised to not
travel for a qualifying reason and were required by airlines and ticket
agents to submit documentation, there would be 5.58 million
respondents.
---------------------------------------------------------------------------

    \51\ Bureau of Transportation Statistics. 2021. ``Full Year 2020
and December 2020 US Airline Traffic Data.'' https://www.bts.gov/newsroom/full-year-2020-and-december-2020-us-airline-traffic-data.
---------------------------------------------------------------------------

    Estimated Annual Burden on Respondents: We estimate that each
respondent would need 30 minutes (0.5 hours) to obtain a documentation
from a medical professional per response, per year. We also estimate
that a customer service representative working for an airline or a
ticket agent would need an average of 5 minutes (0.083 hours) to review
the documentation and request additional documentation if needed.
Passengers would spend a total of approximately 2.8 million hours per
year (0.5 hours x 5.58 million passengers) to obtain the documentation.
Airline and ticket agent customer service representatives would spend
approximately 460,000 hours

(0.083 hours x 5.58 million forms) per year to review the
documentation.
    To calculate the hourly value of time spent on the documentation,
we used median wage data from the Bureau of Labor Statistics as of May
2020. Respondents would obtain, present, and submit the documentation
on their own time without pay and we estimate the value of this
uncompensated activity using a post-tax wage estimate of $15.42 per
hour ($20.17 median hourly wage for all occupations minus a 17%
estimated tax rate). For customer service representatives, we use an
estimate of $26.84 per hour ($18.51 median hourly wage times a wage
multiplier of 1.45). In this scenario, the total annual estimated
documentation costs of the forms would be approximately $55.5 million
(Table II).

                            Table II--Example Annual Cost Estimate for Documentation
----------------------------------------------------------------------------------------------------------------
                                                                                Estimated
              Group                    Forms      Hours per form    Total hours     Hourly time        costs
                                                                                value        (millions)
----------------------------------------------------------------------------------------------------------------
People restricting travel.......       5,580,000             0.5       2,790,000          $15.42           $43.0
Customer service representatives       5,580,000           0.083         463,410           26.84            12.4
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............       3,253,410  ..............            55.5
----------------------------------------------------------------------------------------------------------------

    The Department invites interested persons to submit comments on any
aspect of this information collection, including the following: (1) The
necessity and utility of the information collection, (2) the accuracy
of the estimate of the burden, (3) ways to enhance the quality,
utility, and clarity of the information to be collected, and (4) ways
to minimize the burden of collection without reducing the quality of
the collected information. Comments submitted on these issues will be
summarized or otherwise included in the request for OMB approval of
these information collections.

G. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (UMRA) requires, at 2
U.S.C. 1532, that agencies prepare an assessment of anticipated costs
and benefits before issuing any rule that may result in the expenditure
by State, local, and tribal governments, in the aggregate, or by the
private section, of $100 million or more (adjusted annually for
inflation) in any one year. As described elsewhere in the preamble,
this proposed rule would have no such effect on State, local, and
tribal governments or on the private sector. Therefore, the Department
has determined that no assessment is required pursuant to UMRA.

H. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this
proposed action pursuant to the National Environmental Policy Act of
1969 (NEPA) (42 U.S.C. 4321 et seq.) and has determined that it is
categorically excluded pursuant to DOT Order 5610.1C, Procedures for
Considering Environmental Impacts (44 FR 56420, October 1, 1979).
Categorical exclusions are actions identified in an agency's NEPA
implementing procedures that do not normally have a significant impact
on the environment and therefore do not require either an environmental
assessment (EA) or environmental impact statement (EIS). See 40 CFR
1508.4. Paragraph 4.c.6.i of DOT Order 5610.1C categorically excludes
``[a]ctions relating to consumer protection, including regulations.''
This proposal relates consumer protection. The Department does not
anticipate any environmental impacts, and there are no extraordinary
circumstances present in connection with this rulemaking.

    Signed August 2, 2022, in Washington, DC.
Peter Paul Montgomery Buttigieg,
Secretary of Transportation.

List of Subjects

14 CFR Part 259

    Air Carriers, Consumer Protection, Reporting and Recordkeeping
Requirements.

14 CFR Part 260

    Air Carriers, Consumer Protection.

14 CFR Part 399

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

    For the reasons set forth in the preamble, the Department proposes
to amend title 14 CFR Chapter II as follows:

PART 259--ENHANCED PROTECTIONS FOR AIRLINE PASSENGERS [AMENDED]

0
1. The authority citation for 14 CFR Part 259 is revised to read as
follows:

    Authority: 49 U.S.C. 40101(a), 40113(a), 41702, 41708, 41712,
and 42301.

0
2. Amend Sec.  259.5 by revising paragraphs (a) and (b)(5),
redesignating paragraphs (b)(6) through (12) as paragraphs (b)(7)
through (13), and adding new paragraph (b)(6) to read as follows:

Sec.  259.5  Customer Service Plan.

    (a) Adoption of Plan by Covered Carrier and Requirements for Other
Carriers.
    (1) Each covered carrier shall adopt a Customer Service Plan
applicable to its scheduled flights, as specified in paragraphs (b)(1)
through (13) of this section and adhere to the plan's terms.
    (2) Each certificated or commuter air carrier or foreign air
carrier that operates scheduled passenger flights to, within, or from
the United States solely using aircraft originally designed to have a
passenger capacity of fewer than 30 seats shall comply with paragraphs
(b)(5) and (6) of this section.
    (b) * * *
* * * * *
    (5) Where ticket refunds or ancillary service fee refunds are due
pursuant to 14 CFR part 260, providing prompt refunds, within 7 days of
a refund request as required by 14 CFR 374.3 for credit card purchases,
and within 20 days after receiving a refund request for cash or check
or other forms of purchases. Carriers may choose to provide the refunds
in the original form of payment (i.e., money is returned to an
individual using whatever payment method the individual used to make
the original payment, such as a check, a credit card, a debit card,
cash, or airline miles), or in another form of payment that is cash
equivalent as defined in 14 CFR 260.2. Carriers may offer travel
credits, vouchers, or other compensation in lieu of refunds, but
carriers first must inform consumers that they are entitled to a
refund. Carriers must clearly disclose any material restrictions,
conditions, or limitations on these compensations they offer, so
consumers can make informed choices about the refund or other

compensation that would best suit their needs.
* * * * *
    (6) Providing non-expiring travel credits or vouchers, upon
request, to a consumer holding a non-refundable ticket as set forth in
paragraphs (b)(6)(i)(A) through (i)(C) of this section and subject to
paragraphs (6)(b)(ii) through (v) of this section.
    (i) In circumstances when:
    (A) Regardless of whether there is a public health emergency as
defined in 42 CFR 70.1, the consumer is unable to travel because of a
U.S. (Federal, State or local) or foreign government restriction or
prohibition (e.g., stay at home order, entry restriction, or border
closure) in relation to a serious communicable disease that is issued
after the ticket purchase.
    (B) There is a public health emergency as defined in 42 CFR 70.1,
the consumer purchased the airline ticket before the public health
emergency was declared, the consumer is scheduled to travel during the
public health emergency, and the consumer is advised by a medical
professional or determines consistent with public health guidance
issued by the U.S. Centers for Disease Control and Prevention (CDC),
comparable agencies in other countries, or the World Health
Organization (WHO) not to travel by air to protect himself or herself
from a serious communicable disease as defined in 14 CFR 260.2.
    (C) Regardless of whether there is a public health emergency as
defined in 42 CFR 70.1, the consumer is advised by a medical
professional or determines consistent with public health guidance
issued by CDC, comparable agencies in other countries, or WHO not to
travel by air because the consumer has or may have contracted a serious
communicable disease as defined in 14 CFR 260.2, and the consumer's
condition is such that traveling on a commercial flight would pose a
direct threat to the health of others.
    (ii) As a condition for issuing the non-expiring travel credits or
vouchers in paragraph (b)(6)(i) of this section, carriers may require,
as appropriate, the following documentation dated within 30 days of the
initial departure date of the affected flight(s):
    (A) For any consumer claiming an inability to travel due to a
government restriction or prohibition in relation to a serious
communicable disease, carriers may require the consumer to provide the
applicable government order or other document demonstrating how the
requirement restricts the consumer's ability to travel;
    (B) For any consumer stating that he or she is not traveling during
a public health emergency because the consumer has been advised by a
medical professional or determines consistent with public health
guidance issued by CDC, comparable agencies in other countries, or WHO
not to travel by air to protect himself or herself from a serious
communicable disease as described in paragraph (b)(6)(i)(B) of this
section, carriers may require the consumer to provide the applicable
guidance issued by CDC, comparable agencies in other countries, or WHO,
and/or a written statement from a licensed medical professional,
attesting that it is the medical professional's opinion, based on
current medical knowledge and the consumer's health condition, that the
consumer should not travel by commercial air transportation to protect
his or her health; and
    (C) Regardless of whether there is a public health emergency, for
any consumer stating that he or she has been advised by a medical
professional or determines consistent with public health guidance
issued by CDC, comparable agencies in other countries, or WHO not to
travel by air because he has or may have contracted a serious
communicable disease that poses a direct threat to the health of others
as described in paragraph (b)(6)(i)(C) of this section, carriers may
require the consumer to provide the applicable guidance issued by CDC,
comparable agencies in other countries, or the WHO, and/or a written
statement from a licensed medical professional, attesting that it is
the medical professional's opinion, based on current medical knowledge
and the consumer's health condition, that the consumer should not
travel by commercial air transportation to protect the health of
others.
    (iii) A carrier may retain a service fee for processing the travel
voucher or credit, as long as the fee is on a per-passenger basis and
the existence and amount of the fee is clearly and prominently
disclosed to consumers at the time they purchased the airfare.
    (iv) A carrier must promptly issue the non-expiring travel credits
or vouchers with a value equal to or greater than the fare (including
government-imposed taxes and fees and carrier-imposed fees and
surcharges and prepaid ancillary service fees not utilized by the
consumer).
    (v) A carrier may not impose unreasonable restrictions, conditions,
or limitations on the travel credits or vouchers, including conditions
that severely restricts booking with respect to travel date, time, or
route; a limitation that only allows redemption in one booking and
renders any residual value void; or a limitation that only allows the
value of the credits or vouchers to apply to the base fare of a new
booking. A carrier must clearly disclose any material restrictions,
limitations, or conditions on the use of the credits and vouchers,
including but not limited to administrative fees for redemption,
advance purchase or capacity restrictions, and blackout dates.
* * * * *
0
3. Add Part 260 to read as follows:

PART 260--REFUNDS FOR AIRLINE FARE AND ANCILLARY FEES

Sec.
260.1 Purpose.
260.2 Definitions.
260.3 Applicability.
260.4 Refunding fees for ancillary services that consumers paid for
but that were not provided.
260.5 Refunding fees for significantly delayed or lost bags.
260.6 Refunding fare for flights cancelled or significantly changed
by carriers.
260.7 Refunding fare for flights that consumers choose not to take
due to public health concerns or restrictions.
260.8 Providing prompt refunds.
260.9 Contract of carriage provisions related to refunds.
260.10 DOT Determination of Significant Government Financial
Assistance

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

Sec.  260.1   Purpose.

    The purpose of this part is to ensure that carriers refund
consumers for: (1) ancillary services related to air travel that
consumers paid for but were not provided; (2) fees to transport checked
bags that are lost or significantly delayed; (3) a consumer's fare for
a cancelled flight or a significant change of flight itinerary where
the consumer does not accept the alternative transportation, airline
voucher or credit, or other compensations offered by the carrier; and
(4) a consumer's fare in lieu of the travel credit or voucher specified
in section 259.5(b)(6)(i)(A) through (C) of this title, if the carrier
received significant financial assistance from a government entity as a
result of a public health emergency.

Sec.  260.2  Definitions.

    As used in this part:
    Air carrier means a citizen of the United States undertaking by any
means, directly or indirectly, to provide air transportation.
    Ancillary service means any service related to air travel provided
by a covered carrier, for a fee, beyond passenger air transportation.
Such service includes, but is not limited to,

checked or carry-on baggage, advance seat selection, access to in-
flight entertainment program, in-flight beverages, snacks and meals,
pillows and blankets, and seat upgrades.
    Cancelled flight means a covered flight that was published in the
carrier's Computer Reservation System at the time of the ticket sale
but was not operated by the carrier.
    Cash equivalent means a form of payment that can be used like cash,
including but not limited to a check, a prepaid card, funds transferred
to the passenger's bank account, funds provided through digital payment
methods (e.g., PayPal, Venmo), or a gift card that is widely accepted
in commerce. Carriers are prohibited from requiring consumers to bear
the burden for maintenance or usage fees related to cash equivalent
payment.
    Checked bag means a bag or an item other than a bag that was
provided to a carrier by or on behalf of a passenger, for
transportation in the cargo compartment of a scheduled passenger
flight. A checked bag includes a gate-checked bag and a valet bag.
    Covered carrier means an air carrier or a foreign air carrier
operating to, from or within the United States, conducting scheduled
passenger service.
    Covered flight means a scheduled flight operated or marketed by a
covered carrier to, from, or within the United States.
    Government financial assistance means a cash contribution a covered
carrier receives directly or indirectly from a government entity
including instances where the carrier is expected to provide shares or
options of share of ownership in exchange for the cash. It does not
include financial assistance in the form of government issued,
subsidized, or guaranteed loans and non-cash contributions by a
government entity.
    Foreign air carrier means a person, not a citizen of the United
States, undertaking by any means, directly or indirectly, to provide
foreign air transportation.
    Serious communicable disease means a communicable disease as
defined in 42 CFR 70.1 that has serious consequences and can be easily
transmitted by casual contact in an aircraft cabin environment. For
example, the common cold is readily transmissible in an aircraft cabin
environment but does not have severe health consequence. AIDS has
serious health consequences but is not readily transmissible in an
aircraft cabin environment. Both the common cold and AIDS would not be
considered serious communicable diseases. SARS is readily transmissible
in an aircraft cabin environment and has severe health consequences.
SARS would be considered a serious communicable disease.
    Significant change of flight itinerary means a change to a covered
flight itinerary made by a covered carrier where: (1) the consumer is
scheduled to depart from the origination airport three hours or more
for domestic itineraries and six hours or more for international
itineraries earlier than the original scheduled departure time; (2) the
consumer is scheduled to arrive at the destination airport three hours
or more for domestic itineraries or six hours or more for international
itineraries later than the original scheduled arrival time; (3) the
consumer is scheduled to depart from a different origination airport or
arrive at a different destination airport; (4) the consumer is
scheduled to travel on an itinerary with more connection points than
that of the original itinerary; (5) the consumer is downgraded to a
lower class of service; or (6) the passenger is scheduled to travel on
a different type of aircraft with a significant downgrade of the
available amenities and travel experiences.
    Significantly delayed checked bag means a checked bag that is not
delivered to the consumer or the consumer's agent within 12 hours of
the last flight segment's arrival for domestic itineraries and within
25 hours of the last flight segment's arrival for international
itineraries, including itineraries that include both international
flight segment(s) and domestic flight segment(s).
    Significant government financial assistance means government
financial assistance that the Department has determined through a
public process to be significant.

Sec.  260.3  Applicability.

    This part applies to all covered carriers that collect fares or
fees, including checked baggage fees, for ancillary services to be
provided on or in relation to a covered flight.

Sec.  260.4   Refunding fees for ancillary services that consumers paid
for but that were not provided.

    A covered carrier shall promptly provide a refund to a consumer for
any fees it collected from the consumer for ancillary services related
to air travel if the service was not provided, including fees for
services on the consumer's scheduled flight, on a subsequent
replacement flight if there has been a rescheduling by the carrier, or
on a flight not taken by the consumer due to oversales or a flight that
is not operated by the carrier. If a ticket agent collected the
ancillary fee, the carrier that is scheduled to operate the flight, or
for multiple-carrier itineraries, the carrier scheduled to operate the
last segment of the consumer's itinerary is responsible for providing a
refund.

Sec.  260.5   Refunding fees for significantly delayed or lost bags.

    Upon receiving a notification pursuant to paragraph (b) of this
section from a consumer, a covered carrier that collected a checked
baggage fee from the consumer or, if a ticket agent collected the
checked baggage fee from the passenger, the covered carrier that is
scheduled to operate the flight or the covered carrier that is
scheduled to operate the last segment of the consumer's itinerary if
multiple-carrier itineraries, shall promptly provide a refund to the
consumer of any fee charged for transporting a significantly delayed
checked bag.
    (a) Determining the length of delay. (1) For the purpose of
determining whether a refund of the baggage fee is due, the 12-hour
deadline for domestic itineraries and the 25-hour deadline for
international itineraries is calculated from the time when a passenger
was given the opportunity to deplane from the aircraft at the
passenger's final destination; or, if the final travel segment was on
alternate ground transportation, a comparable time when the passenger
disembarks from the ground transportation.
    (2) For the purpose of determining whether a refund of the baggage
fee is due, a delayed bag is considered to have been delivered to a
passenger or a passenger's agent if:
    (i) The bag has been transported to a location, other than the
destination airport, based on agreement by the passenger and the
carrier, whether or not the passenger is present to take possession of
the bag;
    (ii) The bag has arrived at its intended final destination airport
and is available for pick up, and the carrier has provided notice to
the passenger or the passenger's agent (e.g., via push notice through a
mobile application, email, or text message) that the bag has arrived at
that airport and is ready for pick up; or
    (iii) The bag has arrived at the intended final destination airport
and the carrier has provided notice to the passenger or the passenger's
agent (e.g. via push notice through a mobile application, email, or
text message) that the bag has arrived at that airport and will be
delivered to a location that the passenger and carrier have agreed on.
    (b) Notification of carrier by passenger about lost or
significantly delayed bag.

A covered carrier's obligation to provide a prompt refund for a lost
bag or a significantly delayed bag does not begin until passengers
provide notification of the lost or significantly delayed bag. If the
entity that collected the baggage fee is the same entity that received
a mishandled baggage report from the passenger, the filing of the
mishandled baggage report constitutes a notification from the passenger
for the purpose of receiving a refund, if due, for the baggage fee. In
all other situations, passengers must inform the carrier that collected
the baggage fee of the lost or delayed bag; or, if a ticket agent
collected the bag fee, passengers must inform the carrier that operated
the last flight segment about the lost or delayed bag for the purpose
of receiving a refund for the baggage fee for a significantly delayed
bag.

Sec.  260.6  Refunding fare for flights cancelled or significantly
changed by carriers.

    A covered carrier shall promptly provide a refund, as described in
section 259.5 of this title, for the fare it collected from a passenger
for any cancelled flight or for any flight with a significant change of
flight itinerary where the passenger chooses not to accept the
alternative transportation, voucher or credit, or other compensation
offered by the carrier.

Sec.  260.7  Refunding fare for flights that consumer choose not to
take due to public health concerns or restrictions.

    (a) When there is a declaration of a public health emergency as
defined in 42 CFR 70.1 and DOT has published a determination pursuant
to section 260.10 that the covered carrier received significant
government financial assistance as a result of the public health
emergency, the covered carrier shall promptly provide a requested
refund for the fare it collected from a passenger meeting the criteria
of section 259.5(b)(6)(i)(A) through (b)(6)(i)(C) of this title, in the
manner consistent with 14 CFR 259.5 and subject to paragraphs (b)
through (d) of this section, in lieu of the non-expiring travel credits
or vouchers specified in section 259.5(b)(6) of this title.
    (b) To receive the refunds, passengers shall make a request for a
refund from the covered carrier within 12 months of the date that DOT
published a determination pursuant to section 260.10 that the carrier
received significant financial assistance. Passengers are also entitled
to a refund if they have already received travel credits or vouchers
under 14 CFR 259.5(b)(6)(i)(A) or 259.5(b)(6)(i)(B) prior to the date
that DOT published a determination pursuant to section 260.10 that the
carrier received significant government financial assistance and the
passengers have not redeemed those credits or vouchers. Passengers must
also have notified the carrier of their preference of a refund in lieu
of the credit or voucher within 12 months of the date that DOT
published the determination that the carrier received significant
financial assistance in relation to the public health emergency
applicable to the customer's refund request.
    (c) As a condition for issuing the refunds under this section,
carriers may require, as appropriate, any passenger requesting a refund
provide documentations specified in 14 CFR 259.5(b)(6)(ii), if such
documentation has not already been provided to carriers when the
passenger requested non-expiring travel credits or vouchers.
    (d) A carrier may retain a service fee for issuing the refund, as
long as the fee is on a per-passenger basis and the existence and
amount of the fee is clearly and prominently disclosed to consumers at
the time they purchased the airfare.

Sec.  260.8   Providing prompt refunds.

    When a refund of a fare or a fee for an ancillary service,
including a fee for lost or significantly delayed checked baggage, is
due pursuant to this part, the refund must be issued promptly
consistent with the requirement of 14 CFR 259.5(b)(5).

Sec.  260.9  Contract of carriage provisions related to refunds.

    A carrier's failure to ensure that its contract of carriage
provisions are consistent with carriers' obligations as specified by
this part will be considered an unfair and deceptive practice within
the meaning of 49 U.S.C. 41712 subject to enforcement action by the
Department.

Sec.  260.10  DOT Determination of Significant Government Financial
Assistance.

    The Department will determine whether government financial
assistance provided after [Effective date of the final rule] as a
result of a public health emergency is significant through the public
process described in this section.
    (a) The Department will consider relevant factors in determining
whether government financial assistance is significant, including:
    (i) The size of the entity (annual enplanement for airlines, annual
revenue, the number of employees);
    (ii) Year-over-year comparison of traffic and revenue before and
after the public health emergency is declared;
    (iii) The amount of government financial assistance accepted in
relation to the entity's annual revenue; and
    (iv) For foreign carriers, enplanements to and from the United
States in addition to total enplanements.
    (b) The Department will publish for comment in the Federal Register
a proposed determination of whether the government financial assistance
is significant, taking into consideration the factors in paragraph (a)
of this section.
    (c) The Department will publish a final determination in the
Federal Register of whether the government financial assistance is
significant, taking into consideration the factors in paragraph (a) of
this section and public comments received on the proposed determination
described in paragraph (b) of this section.

PART 399--STATEMENTS OF GENERAL POLICY [AMENDED]

0
4. The authority citation for Part 399 continues to read as follows:

    Authority: 49 U.S.C. 41712, 40113(a). 5. Amend Sec.  399.80 by
revising the introductory text paragraph, paragraph (l) and adding
paragraph (o) to read as follows:

Sec.  399.80  Unfair and deceptive practices of ticket agents.

    It is the policy of the Department to regard as an unfair or
deceptive practice or unfair method of competition the practices
enumerated in paragraphs (a) through (o) of this section by a ticket
agent of any size and the practice enumerated in paragraph (s) of this
section by a ticket agent that sells air transportation online and is
not considered a small business under the Small Business
Administration's size standards set forth in 13 CFR 121.201:
* * * * *
    (l) Failing or refusing to make a prompt refund to a passenger for
the fare that a ticket agent sold to the passenger for any cancelled
flight or for any flight with a significant change of flight itinerary
and the passenger chooses not to accept the alternative transportation,
voucher or credit, or other compensations offered by the carrier or the
ticket agent. A prompt refund is one that is made within 7 days of
receiving a refund request as required by 12 CFR part 1026 for credit
card purchases, and within 20 days after receiving a refund request for
cash or check or other forms of purchases. Ticket agents may choose to
provide the refunds in the original form of payment (i.e., money is
returned to individual using whatever payment method the individual
used to make the original payment, such as a check, a credit card,

a debit card, cash, or airline miles), or in another form of payment
that is cash equivalent. A ticket agent may retain a service fee for
purchasing the ticket or processing the refund, as long as the fee is
on a per passenger basis and the existence and amount of the fee is
clearly and prominently disclosed to consumers at the time they
purchased the airfare. Ticket agents may offer travel credits,
vouchers, or other compensation in lieu of refunds, but they first must
inform consumers that consumers are entitled to a refund if that is the
case. Ticket agents must clearly disclose any material restrictions,
conditions, and limitations on these compensations they offer, so
consumers can make informed choices about the refund or other
compensation that would best suit their needs.
    For purposes of this paragraph, the following definitions apply:
    (1) Cancelled flight means a flight that was published in a
carrier's Computer Reservation System at the time of the ticket sale
but was not operated by the carrier.
    (2) Cash equivalent means a form of payment that can be used like
cash, including but not limited to a check, a prepaid card, funds
transferred to the passenger's bank account, funds provided through
digital payment methods (e.g., PayPal, Venmo), or a gift card that is
widely accepted in commerce. Ticket agents are prohibited from
requiring consumers to bear the burden for maintenance or usage fees
related to cash equivalent payment.
    (3) Covered flight means a scheduled flight to, from, or within the
United States.
    (4) A significant change of flight itinerary means a change to a
flight itinerary consisting covered flight(s) made by a U.S. or foreign
carrier where: (i) the passenger is scheduled to depart from the
origination airport three hours or more for domestic itineraries and
six hours or more for international itineraries earlier than the
original scheduled departure time; (ii) the passenger is scheduled to
arrive at the destination airport three hours or more for domestic
itineraries or six hours or more for international itineraries later
than the original scheduled arrival time; (iii) the passenger is
scheduled to depart from a different origination airport or arrive at a
different destination airport; (iv) the passenger is scheduled to
travel on an itinerary with more connection points than that of the
original itinerary; (v) the passenger is downgraded to a lower class of
service; or (vi) the passenger is scheduled to travel on a different
type of aircraft with a significant downgrade of the available
amenities and travel experiences.
* * * * *
    (o) Failing to provide non-expiring travel credits or vouchers,
upon request, to a passenger holding a non-refundable ticket in
scheduled air transportation to, from, or within the United States sold
by the ticket agents as set forth in paragraphs (o)(1)(A) through
(o)(1)(C) of this section and subject to paragraphs (o)(2) through (5)
of this section, or failing to provide refunds, in lieu of providing
travel credits or vouchers specified in paragraphs (o)(1)(A) through
(o)(1)(C) of this section, to a passenger holding a non-refundable
ticket in scheduled air transportation to, from, or within the United
States sold by the ticket agents as set forth in paragraph (o)(1)(D) of
this section and subject to paragraphs (o)(2) through(4) of this
section.
    (1) In circumstances where:
    (A) Regardless of whether there is a public health emergency as
defined in 42 CFR 70.1, if the passenger is unable to travel because of
a U.S. (Federal, State or local) or foreign government restriction or
prohibition (e.g., stay at home order, an entry restriction, border
closure) in relation to a serious communicable disease that is issued
after the ticket purchase.
    (B) There is a public health emergency as defined in 42 CFR 70.1,
if the consumer purchased the airline ticket before the public health
emergency was declared, the consumer is scheduled to travel during the
public health emergency, and the consumer is advised by a medical
professional or determines consistent with public health guidance
issued by the U.S. Centers for Disease Control and Prevention (CDC),
comparable agencies in other countries, or the World Health
Organization (WHO) not to travel by air to protect the consumer from a
serious communicable disease as defined in 14 CFR 260.2); and
    (C) Regardless of whether there is a public health emergency as
defined in 42 CFR 70.1, if the consumer is advised by a medical
professional or determines consistent with public health guidance
issued by CDC, comparable agencies in other countries, or WHO not to
travel by air because the consumer has or may have contracted a serious
communicable disease as defined in 14 CFR 260.2 and the consumer's
condition is such that traveling in commercial flights would pose a
direct threat to the health of others.
    (D) There is a public health emergency as defined in 42 CFR 70.1
and the Department has made a determination pursuant to 49 CFR 260.10
that the ticket agent has received significant government financial
assistance after [Effective date of the final rule] as a result of the
public health emergency, if the consumer is eligible for travel credits
or vouchers pursuant to paragraphs (o)(1)(A) through (o)(1)(C) of this
section. Such passengers must have made a request for a refund from the
ticket agent pursuant to this paragraph within 12 months of the date
that the Department has made a determination pursuant to 49 CFR 260.10
that the ticket agent received significant financial assistance. Ticket
agents must also provide a refund to passengers who have already
received travel credits or vouchers under this section prior to the
date that DOE made a determination pursuant to 49 CFR 260.10 that the
ticket agent received significant government financial assistance if
the passengers have not redeemed those credits or vouchers, and have
notified the ticket agent of their preference of a refund in lieu of
the voucher within 12 months of the date that the Department made a
determination pursuant to 49 CFR 260.10 that the ticket agent received
significant financial assistance in relation to the public health
emergency applicable to the customer's refund request.
    For purpose of this paragraph, government financial assistance
means a cash contribution a ticket agent receives directly or
indirectly from a government entity, including instances where the
ticket agent is expected to provide shares or options of shares of
ownership in exchange for the cash. It does not include financial
assistance in the form of government issued, subsidized, or guaranteed
loans and non-cash contributions by a government entity; and
    For purposes of this paragraph, significant government financial
assistance means government financial assistance that the Department
has determined through a public process to be significant.
    (2) As a condition for issuing the non-expiring travel credits or
vouchers in paragraphs (o)(1)(A) through (o)(1)(C) of this section or
refunds in paragraph (o)(1)(D) of this section, ticket agents may
require, as appropriate, the following documentation dated within 30
days of the initial departure date of the affected flight(s):
    (A) For any passenger claiming an inability to travel due to a
government restriction or prohibition in relation to a serious
communicable disease, ticket agents may require the passenger to
provide the applicable government

order or other document demonstrating how the requirement restricts the
passenger's ability to travel.
    (B) For any passenger stating that the passenger is not traveling
during a public health emergency because the passenger has been advised
by a medical professional or determines consistent with public health
guidance issued by CDC, comparable agencies in other countries, or WHO
not to travel by air to protect himself or herself from a serious
communicable disease as described in paragraph (o)(1)(B) of this
section, ticket agents may require the passenger to provide the
applicable guidance issued by CDC, comparable agencies in other
countries, or WHO, and/or a written statement from a licensed medical
professional, attesting that it is the medical professional's opinion,
based on current medical knowledge and the passenger's health
condition, that the passenger should not travel by commercial air
transportation to protect the passenger's health; and
    (C) Regardless of public health emergency, for any passenger
stating that the passenger has been advised by a medical professional
or determines consistent with public health guidance issued by CDC,
comparable agencies in other countries, or WHO not to travel by air
because the passenger has or may have contracted a serious communicable
disease that poses a direct threat to the health of others as described
in paragraph (o)(1)(C) of this section, ticket agents may require the
passenger to provide the applicable guidance issued by CDC, comparable
agencies in other countries, or WHO, and/or a written statement from a
licensed medical professional, attesting that it is the medical
professional's opinion, based on current medical knowledge and the
passenger's health condition, that the passenger should not travel by
commercial air transportation to protect the health of others.
    (3) A ticket agent must promptly issue non-expiring travel credits
or vouchers with a value equal to or greater than the fare (including
government-imposed taxes and fees and carrier-imposed fees and
surcharges) and prepaid ancillary service fees for which the service is
not provided to the consumer.
    (4) When issuing travel credits or vouchers pursuant to paragraphs
(o)(1)(A) through (o)(1)(C) or issuing refunds pursuant to paragraph
(o)(1)(D) of this section, a ticket agent may retain any service fee
for issuing the ticket or charge a service fee for processing a voucher
or credit or a refund, as long as the fee is on a per passenger basis
and the existence and amount of the fee is clearly and prominently
disclosed to consumers at the time they purchased the airfare.
    (5) A ticket agent may not impose unreasonable restrictions,
conditions, or limitations on the travel credits or vouchers issued
pursuant to paragraphs (o)(1)(A) through (o)(1)(C) of this section that
impact its value, including conditions that severely restricts booking
with respect to travel date, time, or route; a limitation that only
allows redemption in one booking and renders any residual value void;
or a limitation that only allows the value of the credits or vouchers
to apply to the base fare of a new booking. A ticket agent must clearly
disclose any material restrictions, limitations, or conditions on the
use of the credits and vouchers, including but not limited to
administrative fees for redemption, advance purchase or capacity
restrictions, and blackout dates.

[FR Doc. 2022-16853 Filed 8-19-22; 8:45 am]
BILLING CODE 4910-9X-P