[Federal Register: April 18, 2008 (Volume 73, Number 76)]
[Rules and Regulations]
[Page 21026-21035]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ap08-3]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 250
[Docket No. DOT-OST-01-9325]
RIN No. 2105-AD63
Oversales and Denied Boarding Compensation
AGENCY: Office of the Secretary (OST), Department of Transportation
(DOT).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Transportation (DOT or Department) is
amending its rules relating to oversales and denied boarding
compensation to increase the limits on the compensation paid to
``bumped'' passengers, to cover flights by certain U.S. and foreign air
carriers operated with aircraft seating 30 through 60 passengers, which
are currently exempt from the rule, and to make other changes. These
changes are intended to maintain consumer protection commensurate with
developments in the aviation industry. This action is taken on the
Department's initiative and in response to a petition from the Air
Transport Association.
DATES: This rule is effective May 19, 2008.
FOR FURTHER INFORMATION CONTACT: Tim Kelly, Aviation Consumer
Protection Division, Office of the General Counsel, Department of
Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590, 202-
366-5952 (voice), 202-366-5944 (fax), tim.kelly@dot.gov (e-mail).
SUPPLEMENTARY INFORMATION:
Background
Part 250 establishes minimum standards for the treatment of airline
passengers holding confirmed reservations on certain U.S. and foreign
carriers who are involuntarily denied boarding (``bumped'') from
flights that are oversold. In most cases, bumped passengers are
entitled to compensation. Part 250 sets the minimum amount of
compensation that is required to be provided to passengers who are
bumped involuntarily. Until now the rule has not applied to flights
operated with aircraft with a design capacity of 60 or fewer passenger
seats.
In adopting the original rule in the 1960s, the Civil Aeronautics
Board (CAB), the Department's predecessor in aviation economic
regulation, recognized the inherent unfairness in carriers selling more
``confirmed'' reservations for a flight than they have seats.
Therefore, the CAB sought to reduce the number of passengers
involuntarily denied boarding to the smallest practicable number
without prohibiting deliberate overbooking or interfering unnecessarily
with the carriers' reservations practices. Air travelers receive some
benefit from controlled overbooking because it allows flexibility in
making and canceling reservations as well as buying and refunding
tickets. Overbooking makes possible a system of confirmed reservations
that can almost always be honored. It allows airlines to fill more
seats, reducing the pressure for higher fares, and makes it easier for
people to obtain reservations on the flights of their choice. On the
other hand, overbooking is the major cause of oversales, and the people
who are inconvenienced are not those who do not show up for their
flights, but passengers who have conformed to all carrier rules. The
current rule allocates the risk of being denied boarding among
travelers by requiring airlines to solicit volunteers and use a
boarding priority procedure that is not unjustly discriminatory.
In 1981, the CAB amended the oversales rule to exclude from the
rule all operations using aircraft with 60 or fewer passenger seats.
(ER-1237, 46 FR 42442, August 21, 1981.) At the time of that
proceeding, the impact of the rule on carriers operating small aircraft
was found to be significant. If a passenger was denied boarding on a
typical small-aircraft short-haul flight and subsequently missed a
connection to a long-haul flight, the short-haul carrier usually had to
compensate the passenger in an amount equal to twice the value of the
passenger's remaining ticket coupons to his or her destination, subject
to a maximum limitation. For example, if the short-haul fare was $50
and the connecting long-haul fare was $500, the first carrier often had
to pay the passenger denied boarding compensation in an amount far
greater than $50, depending on whether alternate transportation could
be arranged to arrive within a short time, despite the minimal fare
that the first carrier received for its flight. The problem was
exacerbated by the fact that most commuter airline flights at the time
were on small turboprop and piston engine aircraft which were affected
by weight limitations in high temperature/humidity conditions to a
greater extent than jets and, therefore, might require bumping even
when the carrier did not book beyond the seating capacity of the
aircraft.
Part 250 has tended to reduce passenger inconvenience and financial
loss occasioned by overbooking without imposing heavy burdens on the
airlines or significant costs on the traveling
[[Page 21027]]
public. In focusing only on the treatment of passengers whose boarding
is involuntarily denied, we have avoided regulating carriers'
reservations practices. Overall, it appears that the rule has served a
useful purpose; however, in light of recommendations from various
sources, including Congress, the Department's Inspector General, and
major airlines themselves, we reviewed the rule and have decided to
revise certain aspects of the rule that we believe are outdated. In
view of the passage of time since the rule was last revised and changes
in commercial air travel over that time, we have decided to increase
the compensation maximums and extend the rule to cover a broader range
of aircraft. The Department is also making certain other changes of
lesser impact.
The Current Denied Boarding Compensation Rule
The purpose of the Department's denied boarding compensation rule
is to balance the rights of passengers holding reservations with the
desirability of allowing air carriers to minimize the adverse economic
effects of ``no-shows'' (passengers with reservations who cancel or
change their flights at the last minute, or who fail to appear and
provide no notice). The rule sets up a two-part system. The first
encourages passengers to voluntarily relinquish their confirmed
reservations in exchange for compensation agreed to between the
passenger and the airline. The second requires that, where there is an
insufficient number of volunteers, passengers who are bumped
involuntarily be given compensation in an amount specified in the rule.
In addition, the Department requires carriers to give passengers notice
of those procedures through signs and written notices provided with
tickets and at airports, and to report the number of passengers denied
boarding to the Department on a quarterly basis.
The Civil Aeronautics Board (CAB) first required payments to bumped
passengers over 46 years ago. In Order No. E-17914, dated January 8,
1962, the CAB conditioned its approval of ``no-show penalties'' for
confirmed passengers on a requirement that bumped passengers be
compensated. An oversales rule was adopted in 1967 as 14 CFR Part 250
(ER-503, 32 FR 11939, August 18, 1967) and revised substantially in
1978 and 1982 after comprehensive rulemaking proceedings (ER-1050, 43
FR 24277, June 5, 1978 and ER-1306, 47 FR 52980, November 24, 1982,
respectively). The key features of the current requirements are as
follows:
(1) In the event of an oversold flight, the airline must first seek
volunteers who are willing to relinquish their seats in return for
compensation of the airline's choosing.
(2) If there are not enough volunteers, the airline must use non-
discriminatory procedures (`boarding priorities') in deciding who is to
be bumped involuntarily.
(3) Most passengers who are involuntarily bumped are eligible for
denied boarding compensation, with the amount depending on the price of
each passenger's ticket and the length of his or her delay. If the
airline can arrange alternate transportation that is scheduled to
arrive at the passenger's destination within 1 hour of the planned
arrival time of the oversold flight, no compensation is required. If
the alternate transportation is scheduled to arrive between 1 and 2
hours after the planned arrival time of the oversold flight (between 1
and 4 hours on international flights), the compensation equals 100% of
the passenger's one-way fare to his or her next stopover or final
destination, with a $200 maximum. If the airline cannot meet the 2 (or
4) hour deadline, the compensation rate doubles to 200% of the
passenger's one-way fare, with a $400 maximum. This compensation is in
addition to the value of the passenger's ticket, which he or she can
use for alternate transportation or have refunded if not used.
Discussion
On July 10, 2007, the Department published an Advance Notice of
Proposed Rulemaking (ANPRM) seeking comment on several issues
associated with the oversales rule; see 72 FR 37491. We received over
1,280 comments in response to the ANPRM. About 20 of the comments were
from organizations, with the rest from individuals. Most of the
comments from the organizations, including those from air carriers and
organizations representing air carriers, expressed the opinion that the
rule serves a useful purpose and had benefited the industry and the
public. Many of the individual comments did not express an opinion on
the specific issues discussed in the ANPRM but rather urged that
overbooking be banned, described their own negative air travel
experiences, or commented on other issues (e.g., flight delays).
On November 20, 2007, the Department published a Notice of Proposed
Rulemaking (72 FR 65237) in which we proposed several specific changes
to the Oversales rule. We did not propose to ban overbooking as many
individual commenters urged. As indicated in the ``Background'' section
above, air travelers receive some benefit from controlled overbooking.
We are not aware of levels of consumer harm that require such a
sweeping solution at this time, and we believe that the additional
oversale protections that we are adopting here will address the
principal issues related to this regulation that require action by the
Department.
The issues that were presented in the NPRM and a summary of the
comments appear below.
The Maximum Amount of Denied Boarding Compensation
It has been 25 years since the rule was last revised, and the
existing $200 and $400 limits on the amount of required denied boarding
compensation for passengers involuntarily denied boarding have not been
raised since 1978. The Department has received recommendations from
various sources that it reexamine its oversales rule and, in
particular, the maximum amounts of compensation set forth in the rule.
In this regard, in a sense-of-the-Senate amendment to the Department of
Transportation and Related Agencies Appropriations Act of 2000, Public
Law 106-69, the Senate noted its sense that the Department should amend
its denied boarding rule to double the applicable compensation amounts.
Legislation has also been introduced in Congress to require the
Department to review the rule's maximum amounts of compensation. (See
S. 319, reported in the Senate April 26, 2001.) In addition, in his
February 12, 2000, Final Report on Airline Customer Service
Commitments, the Department's Inspector General (IG) recommended, among
other things, that the airlines petition the Department to increase the
amount of denied boarding compensation payable to involuntarily bumped
passengers. In response thereto, and citing the length of time since
the maximum amounts of denied boarding compensation were last revised,
the Air Transport Association (the trade association of the larger U.S.
airlines) filed a petition with the Department on April 3, 2001,
requesting that a rulemaking be instituted to examine those amounts.\1\
(Docket DOT-OST-
[[Page 21028]]
2001-9325.) More recently, the IG on November 20, 2006, issued his
``Report on the Follow-up Review Performed of U.S. Airlines in
Implementing Selected Provisions of the Airline Customer Service
Commitment'' in which he recommended that we determine whether the
maximum denied boarding compensation (DBC) amount needs to be increased
and whether the oversales rule needs to be extended to cover smaller
aircraft.
---------------------------------------------------------------------------
\1\ It is important to note that the maximum involuntary denied
boarding amounts set forth in Part 250 are amounts below which
carriers cannot set their maximum compensation. Airlines have been
and continue to be free, as a competitive tool, to voluntarily set
their maximum compensation levels at amounts greater than that
provided in the Department's rule. With the exception of JetBlue
Airways, whose recently changed policy is described below, we are
not aware of any carrier that has elected to do so.
---------------------------------------------------------------------------
The CAB's decision in 1978 to double the maximum amount of denied
boarding compensation to $400 was based on its determination that the
previous maximum was inadequate to redress the inconvenience to bumped
passengers and that the increase would provide a greater incentive to
carriers to reduce the number of persons involuntarily bumped from
their flights. Following promulgation of the amendment to the rule in
1978 requiring the solicitation of volunteers and doubling the
compensation maximum, the overall industry rate of involuntary denied
boardings per 10,000 enplanements in fact declined for many years.
Until 2007, the rate for the past decade has been slightly below the
level of involuntary bumping reported 10 years ago. In this regard,
55,828 passengers were involuntarily bumped from their flights in 2006
on the 19 largest U.S. airlines (carriers whose denied boarding rate is
tracked in the Department's monthly Air Travel Consumer Report \2\).
Additional passengers were bumped by other airlines, whose denied
boarding rate is not tracked in this report but whose bumped passengers
are subject to the compensation rates in the DOT rule. The annual rate
of involuntary denied boardings per 10,000 enplanements for the
carriers tracked in the report has increased in each of the past three
years and in 2007 was at the highest level in the past ten years.
Involuntary denied boarding rates from the Air Travel Consumer Report
for that period appear below:
---------------------------------------------------------------------------
\2\ This report tracks the denied boarding rate of air carriers
that each account for at least 1% of domestic scheduled-service
passenger revenues for the previous year. Consequently, the list of
carriers whose performance is tracked in this report can change from
year to year.
------------------------------------------------------------------------
Invol. DB's
Year per 10,000
passengers
------------------------------------------------------------------------
1997.................................................... 1.06
1998.................................................... 0.87
1999.................................................... 0.88
2000.................................................... 1.04
2001.................................................... 0.82
2002.................................................... 0.72
2003.................................................... 0.86
2004.................................................... 0.86
2005.................................................... 0.89
2006.................................................... 1.01
2007.................................................... 1.12
------------------------------------------------------------------------
Likely contributing to this upward trend is the fact that flights
are fuller: from 1978 to 2006 the system-wide load factor (percentage
of seats filled) for U.S. airlines increased from 61.5% to 79.2%, with
most of this increase taking place since 1994. The most-recently
reported monthly load factors have been in the mid-80% range.
With respect to the denied boarding compensation limits, inflation
has eroded the value of the $200 and $400 limits that were established
in 1978. Using the Consumer Price Index for All Urban Consumers (CPI-U,
the basis for the inflation adjustor in the Department's domestic
baggage liability rule, 14 CFR 254.6), $400 in 1978 was worth $128 at
the time of the NPRM ($125 today). See the Bureau of Labor Statistics
Inflation Calculator at http://www.bls.gov/cpi/home.htm. Stated another
way, in order to have the same purchasing power today as in 1978, $400
would have needed to be $1,248 as of the time of the NPRM ($1,272
today).
At the same time, however, air fares have not risen to the same
extent as the CPI-U. While historical comparisons of air fares are
problematic, one frequently-used index for changes in air fares is
passenger yield. Yield is passenger revenue divided by revenue
passenger miles--the revenue collected by airlines for carrying one
passenger for one mile. According to the Air Transport Association,
system-wide nominal yield (i.e., not adjusted for inflation) for all
reporting U.S. air carriers was 8.29 cents per revenue passenger mile
in 1978 and 12.69 cents per revenue passenger mile in 2006 (latest
available data)--an increase of 53.1% from the 1978 figure.
Applying the CPI-U calculation to the current $200 and $400 DBC
limits that were established in 1978 would have produced updated limits
of $624 and $1,248, respectively, at the time of the NPRM. However, the
NPRM noted that applying the 53.1% increase in passenger yield through
2006 to the current $200 and $400 limits would have produced updated
limits of $306 and $612. It is important to note that the $200 and $400
figures in Part 250 are merely limits on the amount of denied boarding
compensation required under the rule; the compensation rate is 100% or
200% of the passenger's fare (depending on how long he or she was
delayed by the bumping). In the ANPRM, the Department requested comment
on whether the maximums in the rule should be increased so that that a
higher percentage of denied boarding compensation payments are not
``capped'' by the limits.
In the ANPRM the Department sought comment on five options with
respect to the monetary limits on denied boarding compensation--
increasing the limits based on the CPI-U or on the increase in fare
yields, doubling the current limits, eliminating the limits (i.e., so
there would be no cap on denied boarding compensation payments), or
making no change to the current limits. In the NPRM the Department
proposed to amend the oversales rule to double the limits on
involuntary denied boarding compensation from $200 to $400 for
passengers who are rerouted within two hours (four hours
internationally) and from $400 to $800 for passengers who are not
rerouted within these timeframes. As many commenters to the ANPRM
pointed out, there is a significant air-fare component to the denied
boarding compensation formula (100%/200% of the bumped passenger's
fare), and air fares have risen less than the CPI. As indicated above,
system-wide nominal yield (not adjusted for inflation) for all
reporting U.S. air carriers, which is a frequently used index for
changes in air fares, was 8.29 cents per revenue passenger mile in 1978
and 12.69 cents per revenue passenger mile in 2006, an increase of
53.1%. Nonetheless, we did not propose the ``fares/yield'' option from
the ANPRM as the sole method for updating the compensation caps.
Denied boarding compensation is intended in part to compensate for
the passenger's inconvenience, lost time, and lost opportunities. The
value of these considerations is linked to general inflation as well as
to the cost of air fares. Therefore, the arguments of the carrier
organizations about the decline in real (i.e., inflation-adjusted) air
fares during that period are somewhat off the mark, because consumers
live with some of the consequences of denied boarding in today's
dollars, not 1978 dollars. As we indicated in the ANPRM, 30 years of
inflation have taken their toll on the value of the existing limits. As
noted above, $400 in 1978 was worth $128 at the time of the NPRM, based
on the change in the CPI-U. Therefore, we proposed to base part of an
increase in the compensation caps on the CPI-U.
By doubling the existing limits we would blend these two
approaches. The limits proposed in the NPRM fall between the higher
figures that would be produced by the CPI option and the
[[Page 21029]]
lower numbers that would result from the ``fares/yield'' option. We
sought comment on this proposal, including any comments and
justifications that were not already provided in response to the ANPRM
about alternative amounts or methodologies.
It is important to note that this proposal concerning limits on
compensation for involuntary denied boardings would not necessarily
require carriers to offer more compensation to the great majority of
passengers affected by overbooking because most such situations are
handled through volunteers who agree to give up their seat in exchange
for mutually-agreed compensation, typically at the departure gate. Nor
would it affect the significant proportion of involuntarily bumped
passengers--possibly the majority--with fares low enough that the
formula for involuntary denied boarding compensation would not exceed
the current limits. Finally, even with respect to involuntarily bumped
passengers whose denied boarding compensation might increase with
higher maximums, many such passengers accept a voucher for future
travel on that airline (often in a face amount greater than the legally
required denied boarding compensation) in lieu of a check. Carriers
make such offers because vouchers do not entail the same cost as cash
compensation given rates of non-use and inventory-management
restrictions.
Comments
Our proposal to double the denied boarding compensation limits was
endorsed by the American Society of Travel Agents (ASTA), the Airports
Council International--North America (ACI-NA), the Aviation Consumer
Action Project (ACAP), the Coalition for an Airline Passenger Bill of
Rights (CAPBOR), Jet Airways (India), and all of the individuals who
commented on this issue. ACAP also endorsed a minimum DBC amount of
$100. ASTA remarked that the reasoning in the Regulatory Evaluation is
sound and suggested that for lengthy delays (e.g., next day), DBC
should be higher, e.g. perhaps based on the CPI concept. ACI-NA
asserted that incentives against unreasonable overbooking levels must
remain effective because current high load factors make rerouting more
difficult. The National Business Travel Association (NBTA) favored an
increase in DBC limits but believed that the Department's proposal did
not go far enough--the Association noted that business travelers often
pay high fares and book peak flights that it contended are more likely
to be oversold and consequently favored limits of $400/$800 (the NPRM
proposal) or half of that passenger's fare, whichever is higher. The
Air Transport Association stated that it did not oppose the basic
elements of the NPRM but had objections to certain proposals (see
below) that were not related to the adjustment of the compensation
limits.
The proposal to double the limits was opposed by most other
organizations that commented on this issue. (No individual commenters
opposed the proposal, although one felt that the limits should be
removed altogether and several said that overbooking should be banned.)
The Air Carrier Association of America (ACAA) stated that the increased
limits are unfair to smaller carriers that have fewer rerouting options
that would permit them to limit DBC to the 100% rate. ACAA said that
the limits should be increased no more than 25%, although it gave no
basis for this figure. The Regional Airline Association (RAA) said that
involuntary denied boardings are rare and the current system is
working, but if the limits are increased the adjustment should be based
on historical increases in fares/yield rather than $400/$800. The
National Air Carrier Association said that the limits should be
increased only for carriers that consistently bump a high number of
passengers. Delta Air Lines stated that there is no justification for
an increase in the limits, but echoed RAA's contention (as did China
Eastern Airlines) that any increase that does take place should be
based on increases in fares rather than the $400/$800 proposal.
Philippine Airlines wanted an increase of no more than 10%.
Response to Comments
After careful consideration of all of the comments, we have decided
to double the current DBC limits as proposed. The limits have not been
adjusted in nearly 30 years, and the purchasing power of the limits has
eroded. Air fares have increased by more than 50% in that time, and
thus a higher percentage of bumped passengers is undoubtedly having
their DBC capped at a figure lower than the 100% or 200% DBC rate. The
Department has been urged to reexamine the limits by the Senate, the
Department's Inspector General, and the airlines themselves (see ATA's
petition for rulemaking in this proceeding). As ACI-NA noted in its
comments, unrealistic deterrents in the rule could produce more
oversales--and indeed the rate of involuntary denied boardings has
increased 30% in the past three years. Carriers whose schedules make it
difficult to reroute passengers in time to limit DBC to the 100% rate
are nonetheless in control of their overbooking rates and of the
attractiveness of the compensation that they offer to prospective
volunteers. With respect to the comments that urge us to base the
increase in the limits solely on the increase in fares/yields, as noted
above, denied boarding compensation is intended in part to compensate
for the passenger's inconvenience, lost time, and lost opportunities,
and the value of these considerations is linked to general inflation as
well as to the cost of air fares.
The Small-Aircraft Exclusion
The oversales rule originally issued by the CAB did not contain an
exclusion for small aircraft. In 1981 that agency amended Part 250 to
exclude operations with aircraft seating 60 or fewer passengers. The
CAB determined that without this exclusion the denied boarding rule
imposed a proportionately greater financial and operational burden on
these small-aircraft operators than on carriers operating larger
aircraft. In addition, because of the lower revenues generated by these
small aircraft, the financial burden of denied boarding compensation
placed certificated carriers operating aircraft with 60 or fewer seats
at a competitive disadvantage relative to commuter carriers (non-
certificated) operating similar equipment and on similar routes which
were not subject to Part 250. The number of flights that was excluded
by the amendment was small and most such flights were operated by small
carriers that operated small aircraft exclusively. Thus, Part 250
currently applies to certificated U.S. carriers and foreign carriers
holding a permit, or exemption authority, issued by the Department,
only with respect to operations performed with aircraft seating more
than 60 passengers.
The majority of the aircraft operated by the regional airline
industry have 60 or fewer seats and thus are exempt from the denied
boarding rule. However, this sector has experienced tremendous growth.
According to the Regional Airline Association \3\, passenger
enplanements on regional carriers have increased more than 100% since
1995, and regional airlines now carry one out of every five domestic
air travelers in the United States. RAA states that revenue passenger
miles on regional carriers have increased 40-fold since 1978 and
increased 17 percent from 2004 to 2005 alone. As noted in the NPRM,
regional jets have fueled much
[[Page 21030]]
of the recent growth. According to RAA, from 1989 to 2004 the number of
turbofan aircraft (regional jets) in the regional-airline fleet
increased from 54 to 1,628 and regional jets now make up 59% of the
regional-carrier fleet. Although many regional jets have more than 60
passenger seats and thus are subject to Part 250, the ubiquitous 50-
seat and smaller regional jet models have driven much of the growth of
the regional-carrier sector. Moreover, most regional jets are operated
by regional carriers affiliated with a major carrier via a code-share
agreement, a fee-for-service arrangement, and/or an equity stake in the
regional carrier. RAA asserts that 99% of regional airline passengers
traveled on code-sharing regional airlines in 2005.
---------------------------------------------------------------------------
\3\ See http://www.raa.org.
---------------------------------------------------------------------------
DOT statistics also demonstrate the growth in traffic on flights
operated by aircraft with 31 through 60 seats. From the fourth quarter
(4Q) of 2002 (earliest available consistent data) to 4Q2006, the number
of flights using aircraft with 31 through 60 seats increased by 13.5%
while the number of flights using aircraft with more than 60 seats rose
only 3.4%. The number of passengers carried on flights using aircraft
with 31 through 60 seats increased by 34.9% from 4Q 2002 through 4Q
2006, while the number of passengers carried on flights using aircraft
with more than 60 seats rose by only 12.1% during that period.\4\
---------------------------------------------------------------------------
\4\ DOT Form 41, schedule T-100.
---------------------------------------------------------------------------
As noted in the NPRM, the increased use of jet aircraft in the 30-
to-60 seat sector accompanied by the increase in the ``branding'' of
those operations with the codes and livery of major carriers has
blurred the distinction between small-aircraft and large-aircraft
service in the minds of many passengers. There would seem to be little,
if any, difference to a consumer bumped from a small aircraft or a
large aircraft--the effect is the same. Therefore, the NPRM proposed to
extend the applicability of the oversales rule to flights using
aircraft having 30 or more seats.
Comments
This proposal was supported by the ACAA, NBTA, ACI-NA, and by the
two individuals who commented on this issue. ACAA stated that the
current exclusion for these aircraft is unfair to smaller carriers that
do not have aircraft of a size that benefit from the exclusion. The
initiative was opposed by RAA, Delta Air Lines, and Peninsula Airways.
RAA said that the proposal would have disparate cost impact on regional
carriers that cannot always raise fares due to competition from
automobiles. RAA asserted that cost increases will cause marginal
routes to be dropped, reducing competition and leaving some small
points without service. The organization was concerned that DBC on
connecting flight may exceed a regional carrier's fare. It noted that
the small aircraft and short runways frequently used by regional
carriers cause seats to be figuratively ``roped off'' (i.e., to have to
exclude passengers from those seats) for safety-related weight/balance
reasons more frequently than is the case for larger aircraft, but under
the current rule DBC must still be paid. Delta also noted this latter
issue and suggested that if this proposal is finalized, the Department
should amend the ``substitution of equipment'' exception to DBC to
include passengers bumped as a result of the need to limit payload for
safety-related weight/balance reasons.
Peninsula Airways (an Alaskan operator) stated that aircraft with
less than 35 seats should remain excluded from the rule, but if the
proposal to include aircraft with 30-60 seats is adopted, the rule
should exclude commuter operations with propeller aircraft solely
within the state of Alaska. This would capture regional jets, the
commenter noted, while maintaining the current relief for small
turboprops. Peninsula contended that this is justified for the same
reasons that CAB originally excluded aircraft with 60 seats or less.
Peninsula also disputed the statement in the NPRM that on a codeshare
``the major carrier is responsible for providing denied boarding
compensation on the flights of the smaller carrier.'' Peninsula says
that this is true only on fee-for-service arrangements, and Peninsula
uses a pro-rate system.
Response to Comments
For the reasons described above, we are extending the applicability
of the oversales rule to flights using aircraft with 30 or more
passenger seats. Since the time that the CAB exempted this sector of
the industry from the rule in 1981, the vast majority of operations at
this level has become affiliated and integrated with the ``brand'' of a
major carrier. In recent times, aircraft with 30 through 60 seats (to a
large extent regional jets) have been substituted for larger airplanes
on numerous routes. The great majority of the traffic that would be
covered by this initiative is carried by airlines that are owned by or
affiliated with a major carrier or its parent company. In its comments
on the ANPRM, JetBlue asserted that 57% of the flights operated in
August 2007 for American, Continental, Delta, Northwest, United and
U.S. Airways were on regional jets. Some of those regional jets no
doubt have more than 60 seats and thus are already subject to the
oversales rule, but many are not. In its comments on the ANPRM, ACAA
provided data showing that regional jets account for half or nearly
half of all departures at most hub airports.
A significant amount, if not most, of the service on small-aircraft
flights operated for major carriers is provided under a ``fee-for-
service'' arrangement such as Peninsula Airways referred to, where a
major carrier dictates the market, the schedule, and the price of the
flight. Under such an arrangement the tickets are not sold under the
regional carrier's code, so that the passenger's contract of carriage
covering the transportation is solely with the major carrier. In such
circumstances, the flights are for purposes relevant to this rule
flights of the major carrier, not the regional airline, in which case
the major carrier is responsible for providing denied boarding
compensation on the flights of the smaller carrier.
As a result of changes in the marketplace, we now believe that
consumers who purchase transportation in this aircraft class are
entitled to the protections of the oversales rule. Carriers that use
small aircraft to operate flights for a major carrier can protect
themselves contractually by negotiating a mutually acceptable sharing
of risk with the major airline. However, we are sensitive to the
operational challenges faced by operators of aircraft with 30 through
60 seats. As certain commenters noted, these aircraft are more
susceptible than larger airplanes to the need to limit payload in
certain situations, typically hot weather, especially at higher
altitudes. These situations, which cannot be reliably forecast when
reservations are being taken weeks and months in advance, sometimes
cause passengers to have to be bumped. Consequently, as suggested by
Delta, we will revise the existing DBC exception in our oversales rule
for substitution of aircraft of lesser capacity to include situations
where the aircraft is not substituted, but payload must be limited for
safety reasons and passengers are bumped as a result. We expect
carriers to keep adequate records that will demonstrate the legitimate
use of this exception to DBC when it is employed. Consistent with our
obligations under the Regulatory Flexibility Act to assess the impact
of rules on operators of aircraft having 60 or fewer seats (see 14 CFR
399.73), this new relief will be limited to flights operated with
aircraft having 60 or fewer seats. Larger aircraft are affected by
unpredictable payload restrictions
[[Page 21031]]
less often, and operators of those aircraft are not the subject of the
Regulatory Flexibility Act.
We will not exempt flights using aircraft with less than 35 seats
or commuter-carrier operations using propeller aircraft solely within
the state of Alaska, as was suggested by Peninsula Airways. We believe
that carriers serving Alaska have sufficient experience with the
operational considerations in that environment to be able to implement
overbooking practices that do not expose the carrier to undue risk, and
we are reluctant to deny Alaskan travelers the benefits of the rule.
The new exemption for denied boardings caused by safety-related payload
restrictions on flights using aircraft with 60 or fewer seats (see
above) should address many of the situations about which Peninsula was
concerned.
Boarding Priorities
Boarding priority rules determine the order in which various
categories of passengers will be involuntarily bumped when a flight is
oversold. Part 250 states that boarding priority rules must not provide
any undue or unreasonable preference. The IG in his 2000 report
identified possible ambiguities in the Department's requirements
regarding boarding priority rules, and he recommended that we provide
examples of what we consider to be an undue or unreasonable preference.
The IG was also concerned that the amounts of compensation provided
passengers who are involuntarily bumped was in some cases less than the
face value of vouchers given to passengers who volunteer to give up
their seats. He therefore recommended, in addition to raising the
maximum compensation amounts for involuntarily bumped passengers, as
discussed above, that we require carriers to disclose orally to
passengers, at the time the airline makes an offer to volunteers, what
the airline is obligated to pay passengers who are involuntarily
bumped.
Our boarding priority requirement was designed to give carriers the
maximum flexibility to set their own procedures at the gate, while
affording consumers protection against unfair and unreasonable
practices. Thus, the rule (1) requires that airlines establish their
own boarding priority rules and criteria for oversale situations
consistent with Part 250's requirement to minimize involuntary bumpings
and (2) states that those boarding priority rules and criteria ``shall
not make, give, or cause any undue or unreasonable preference or
advantage to any particular person or subject any particular person to
any unjust or unreasonable prejudice or disadvantage in any respect
whatsoever.'' (14 CFR 250.3(a))
Although we are not aware of any problems resulting from this rule
as written, we agree that guidance regarding this provision would be
useful to the industry and public alike. In the NPRM we requested
comment on whether the Department should list in the rule, as examples
of permissible boarding priority criteria, the following:
A passenger's time of check in (first-come, first-served);
Whether a passenger has a seat assignment before reaching
the departure gate for carriers that assign seats;
A passenger's fare;
A passenger's frequent flyer status; and
Special priorities for passengers with disabilities,
within the meaning of 14 CFR Part 382, or for unaccompanied minors.
We stated that the five examples proposed here are illustrative only,
and not exclusive. We did not intend by these examples to foreclose the
use by carriers of other boarding priorities that do not give a
passenger undue preference or unjustly prejudice any passenger.
Comments
Philippine Airlines and ACI-NA favored the proposal. RAA said that
it is not necessary but that the organization did not oppose it. ASTA
opposed the proposal, stating that passengers with low fares or no
frequent-flyer miles on that carrier are no less inconvenienced by
bumping and should not be singled out.
Response to Comments
For the reasons described above, we will adopt this proposal. With
respect to ASTA's comment, airlines set their own boarding priorities
and the longstanding ability of airlines to have boarding priorities
based on passengers' fares or frequent-flyer status is not at issue in
this proceeding. Airlines have had such boarding priorities for years,
and the Department has not found this to be inconsistent with the
mandate in section 14 CFR 250.3(a) described above. The proposal in
this proceeding is simply intended to clarify and provide improved
access to this policy by including it in the rule.
Notice to Volunteers
Accurately notifying passengers of their rights in an oversale
situation is important, so that they can make an informed decision.
Part 250 already contains requirements designed to accomplish that
objective and to protect passengers from being involuntarily bumped if
they have not been accorded adequate notice. Section 250.2b(b)
prohibits a carrier from denying boarding involuntarily to any
passenger who was earlier asked to volunteer without having been
informed about the danger of being denied boarding involuntarily and
the amount of compensation that would apply if that occurred. While
this provision would appear to provide adequate incentive for airlines
to provide complete notice to passengers who are asked to volunteer,
and to protect those passengers not provided such notice, we saw some
merit in the suggestion to make this notice requirement more direct.
Accordingly, in the NPRM we sought comment on whether we should amend
section 250.2b to affirmatively require that, no later than the time a
carrier asks a passenger to volunteer, it inform that person whether he
or she is in danger of being involuntarily bumped and, if so, the
compensation the carrier is obligated to pay.
Comments
RAA and ATA strongly objected to this proposal. Both organizations
said that it is unrealistic and would impede passenger processing at
airports without providing any consumer benefit. RAA asserted that it
would be highly burdensome to determine the risk to each prospective
volunteer of being bumped involuntarily and would increase delays at
the gate. Most carriers make general announcements rather than
soliciting individual passengers, RAA claimed, and individual pre-
solicitation notice is impossible in those circumstances. ATA said that
volunteers have already decided to give up their reservation in
exchange for the offered compensation, and the risk of being bumped is
irrelevant.
The Aviation Consumer Action Project said that potential volunteers
should be given a written statement summarizing the DOT rule, with
monetary penalties payable to the passenger if this is not done.
There were no individual consumer comments on this issue.
Response to Comments
For the reasons summarized above, and consistent with the
recommendation of the IG, we will finalize the proposal. Commenters'
concerns about the practicality of the provision appear to result from
a misunderstanding of what we proposed. Informing a prospective
volunteer ``whether he or she is in danger of being
[[Page 21032]]
involuntarily denied boarding'' need not entail a precise calculation
of the probability of that person being involuntarily bumped. Carriers
may still make general announcements seeking volunteers and, if the
need arises to accept the offer of any of those who indicate a
willingness to volunteer, it would be sufficient for a carrier to tell
a volunteer just before handing him or her the volunteer compensation
that there is a reasonable chance that he or she may have been bumped
involuntarily (if that is true), and if that were to be the case the
compensation would be $X. The oversales regimen relies in large part on
consumers being able to make informed decisions and this is no more
than what is required under the current rule.
Reporting
Section 250.10 of the current rule requires all carriers that are
subject to Part 250 to file a quarterly report (Form 251) on oversale
activity. Due to staffing limitations, for many years the only carriers
whose oversale data have been routinely reviewed, entered into an
automated system, or published by the Department are the airlines that
are subject to the on-time performance reporting requirement. Those are
the U.S. carriers that each account for at least 1 percent of total
domestic scheduled-service passenger revenues--currently 20 airlines
(see 14 CFR 234). For a current list of these carriers, see the
Department's Air Travel Consumer Report at http://
airconsumer.ost.dot.gov/reports/index.htm. This report provides data
for these airlines in four areas: On-time performance, baggage
mishandling, oversales, and consumer complaints. The oversale data for
that report are derived from the Form 251 reports mandated by Part 250.
The data in the Form 251 reports filed by the other carriers is not
keypunched, summarized, published, or routinely reviewed.
In the NPRM the Department proposed to revise section 250.10 to
relieve all carriers of this reporting requirement except for the
airlines whose data is being used, i.e., U.S. carriers reporting on-
time performance under Part 234. Those airlines account for the vast
majority of domestic traffic and bumpings, so the Department would
still receive adequate information and the public would continue to
have access to published data for the same category of carriers as
before. Such action would be consistent with the Paperwork Reduction
Act and the Regulatory Flexibility Act. It would also result in
consistent carrier reporting requirements for all four sections of the
Air Travel Consumer Report.
Comments
Three airlines and two airline associations commented on this
issue; all of them favored the proposal.
Response to Comments
For the reasons summarized above, we will revise the rule to
relieve all carriers of this reporting requirement except for
``reporting carriers'' as defined in 14 CFR 234.2 and any carrier that
voluntarily submits data pursuant to section 234.7 of that part. At the
present time this is 20 airlines. The carriers that are being relieved
of this requirement need not file a Form 251 report for the quarter
during which this amendment goes into effect.
All other comments on the various issues in this proceeding were
beyond the scope of the NPRM.
Overbooking Notice
Section 250.11 specifies the text of a notice that carriers must
use on signs at ticket-selling locations and in notices accompanying
tickets to disclose overbooking and describe denied boarding
procedures. One portion of this notice states that there are exceptions
to the requirement to pay denied boarding compensation. In the NPRM we
proposed to revise that section of the notice to state that failing to
comply with the carrier's check-in deadline is one such exception and
to require carriers to either include their check-in deadline in the
notice or state in the notice that the airline's check-in deadline is
available upon request from the carrier.
Comments
The Air Transport Association objected to this proposal. It said
that check-in times can vary, especially between domestic and
international operations; that the information is available on
carriers' Web sites; that air travelers have become used to checking in
early since 9/11; and that most of the notices would be displayed at
airports and by the time a traveler sees the notice at the airport it
is too late.
Response to Comments
We have decided to finalize the proposal. We believe that it is
important for consumers to be aware that missing the carrier's check-in
deadline disqualifies them from eligibility for denied boarding
compensation if they should be involuntarily denied boarding. A great
deal of consumer information is available on carrier Web sites, but
this does not obviate the usefulness of affirmatively pointing out key
information in notices of this type. Airlines that find it burdensome
to include their specific check-in deadline(s) in the notice can simply
state that the deadlines are available from the carrier upon request,
as stated in the NPRM. Finally, this revised notice is not limited to
airports; pursuant to section 250.11(b) of the existing rule (which is
not being revised), the sec. 250.11(a) notice described in the NPRM
must also accompany tickets.
Technical Changes
We are revising the definition of ``Carrier'' in section 250.1 to
(1) explicitly include commuter air carriers (with respect to the
extension of the rule to flights using aircraft with 30 through 60
seats), (2) remove citations to the Federal Aviation Act, a statute
that no longer exists under that name, and (3) reduce the range of
sections cited in this definition as the source of DOT authority for
foreign air carriers to the one section that is most applicable. (The
other sections cited in the foreign-carrier citation are procedural in
nature and are not necessary in this definition.)
Regulatory Notices
A. Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
This action has been determined to be significant under Executive
Order 12866 and the Department of Transportation Regulatory Policies
and Procedures. It has been reviewed by the Office of Management and
Budget under that Order. A discussion of possible costs and benefits of
the proposed rule is presented in the preamble and in the accompanying
Regulatory Evaluation, a copy of which has been placed in the docket.
The Regulatory Evaluation concluded that the benefits of the rule
appear to exceed the costs. It noted that the absolute number of
involuntary denied boardings, the rate of such denied boardings per
10,000 enplanements and the ratio of involuntary to voluntary denied
boardings have all increased substantially in recent years, suggesting
that the 30-year-old caps on involuntary denied boarding compensation
that are being updated here have been encouraging carriers to resort to
involuntary denied boardings more frequently. The average one-way fare
(all domestic and international flights) was $232 in the 2nd Quarter of
2007, above the $200 compensation limit that pertains to the 2-hour
deadline. Due to the regulatory caps on denied boarding
[[Page 21033]]
compensation, a passenger flying at or above an above-average fare will
not receive the full amount of compensation derived from the fare-based
formula in the rule. Similarly, the air carriers are not subject to the
disincentive of the loss of a higher-than-average fare if a passenger
is bumped.
The added cost of doubling of the denied boarding compensation caps
would be approximately four cents per passenger even if every single
passenger who is involuntarily denied boarding receives the maximum
compensation (which is not the case). The monetary cost for this option
would result in a corresponding dollar-for-dollar monetary benefit for
the bumped passengers. It is not expected that an additional four-cent
charge on a $200 ticket would make a material difference in ticket
demand or air carrier net revenues from ticket sales.
B. Executive Order 13132 (Federalism)
This Final Rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132 (``Federalism''). This
amendment does not: (1) Have a substantial direct effect 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) impose substantial direct compliance costs on State and
local governments; or (3) preempt state law because states are already
preempted from regulating in this area under the Airline Deregulation
Act (ADA), 49 U.S.C. 41713. Therefore, the consultation and funding
requirements of Executive Order 13132 do not apply.
C. Executive Order 13084
This Final Rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13084 (``Consultation and
Coordination with Indian Tribal Governments''). Because nothing in this
rule would significantly or uniquely affect the communities of the
Indian tribal governments and would not impose substantial direct
compliance costs, the funding and consultation requirements of
Executive Order 13084 do not apply.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an
agency to review regulations to assess their impact on small entities
unless the agency determines that a rule is not expected to have a
significant economic impact on a substantial number of small entities.
Certain elements of this rule may impose new requirements on certain
small air carriers, but the Department believes that the economic
impact will not be significant. All air carriers have control over the
extent to which the rule impacts them because they control their own
overbooking rates. Carriers can mitigate the cost of denied boarding
compensation by obtaining volunteers who are willing to give up their
seat for less (or different) compensation than what the rule mandates
for passengers who are bumped involuntarily, and by offering travel
vouchers in lieu of cash compensation.
The vast majority of the traffic that will be covered by the
oversales rule for the first time as a result of this amendment is
carried by airlines that are owned by or affiliated with a major
carrier or its parent company. Moreover, a significant amount, if not
most, of the service on such flights is provided under a ``fee-for-
service'' arrangement, where a major carrier dictates the market, the
schedule, and the price of the flight. Under such an arrangement the
tickets are not sold under the regional carrier's code, so that the
passenger's contract of carriage covering the transportation is solely
with the major carrier. In such circumstances, the flights are, for all
legal and practical purposes, flights of the major carrier, not the
regional airline, in which case the major carrier is responsible for
providing denied boarding compensation on the flights of the smaller
carrier. The monetary costs of most of these options result in a
corresponding dollar-for-dollar monetary benefit for members of the
public who are bumped from their confirmed flights and for small
businesses that employ some of them. The options provide an economic
incentive for carriers to use more efficient overbooking rates that
result in fewer bumpings while still allowing the carriers to fill
seats that would go unsold as the result of ``no-show'' passengers. At
the same time, this final rule provides that the oversales requirements
will not apply when a passenger is denied boarding on an aircraft with
a designed capacity of 30 through 60 passenger seats due to a need to
reduce the number of passengers for safety purposes (e.g., weight/
balance, maximum takeoff weight). This exemption greatly reduces the
financial burden of the oversales rule on operators of small aircraft ,
whether by small entities (who by definition only operate aircraft of
60 seats or fewer) or other carriers. This is particularly true with
respect to events that are not easy to predict at the time reservations
are taken (e.g., hot weather) that affect safety-related payload
limits. Finally, it is worth noting that one provision in this Final
Rule relieves an existing reporting requirement for all but the largest
carriers. For all these reasons, I certify that this rule will not have
a significant economic impact on a substantial number of small
entities.
E. Paperwork Reduction Act
DOT has long-standing OMB clearance for the reporting requirements
in Part 250 (OMB No. 2138-0018). Prior to issuance of this final rule,
we estimated a reporting burden of 1600 hours annually for 40 U.S.
carriers and 600 hours annually for 100 foreign carriers. This final
rule is reducing reporting requirements so that only 20 U.S. carriers
will continue to report denied boarding information for a total of 800
hours annually. We will modify our paperwork inventory for this rule
accordingly.
F. Unfunded Mandates Reform Act
The Department has determined that the requirements of Title II of
the Unfunded Mandates Reform Act of 1995 do not apply to this notice.
List of Subjects in 14 CFR Part 250
Air carriers, Consumer protection, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, we amend 14 CFR Part 250 as
follows:
PART 250--[AMENDED]
0
1. The authority citation for part 250 continues to read as follows:
Authority: 49 U.S.C. Chapters 401, 411, 413, 417.
0
2. In Sec. 250.1 the definition for ``Large aircraft'' is removed and
the definition for ``Carrier'' is revised to read as follows:
Sec. 250.1 Definitions.
* * * * *
Carrier means: (1) a direct air carrier, except a helicopter
operator, holding a certificate issued by the Department of
Transportation pursuant to 49 U.S.C. 41102 or that has been found fit
to conduct commuter operations under 49 U.S.C. 41738, or an exemption
from 49 U.S.C. 41102, authorizing the scheduled transportation of
persons; or (2) a foreign air carrier holding a permit issued by the
Department pursuant to 49 U.S.C. 41302, or an exemption from that
provision, authorizing the scheduled foreign air transportation of
persons.
* * * * *
0
3. Section 250.2 is revised to read as follows:
[[Page 21034]]
Sec. 250.2 Applicability.
This part applies to every carrier, as defined in Sec. 250.1, with
respect to scheduled flight segments using an aircraft that has a
designed passenger capacity of 30 or more passenger seats, operating in
(1) interstate air transportation or (2) foreign air transportation
with respect to nonstop flight segments originating at a point within
the United States.
0
4. In Sec. 250.2b, paragraph (b) is amended by removing the last
sentence and by adding a new first sentence to read as follows:
Sec. 250.2b Carriers to request volunteers for denied boarding.
* * * * *
(b) Every carrier shall advise each passenger solicited to
volunteer for denied boarding, no later than the time the carrier
solicits that passenger to volunteer, whether he or she is in danger of
being involuntarily denied boarding and, if so, the compensation the
carrier is obligated to pay if the passenger is involuntarily denied
boarding. * * *
0
5. In Sec. 250.3 paragraph (b) is added to read as follows:
Sec. 250.3 Boarding priority rules.
* * * * *
(b) Boarding priority factors may include, but are not limited to,
the following:
(1) A passenger's time of check-in;
(2) Whether a passenger has a seat assignment before reaching the
departure gate for carriers that assign seats;
(3) The fare paid by a passenger;
(4) A passenger's frequent-flyer status; and
(5) A passenger's disability or status as an unaccompanied minor.
0
6. Section 250.5(a) is revised to read as follows:
Sec. 250.5 Amount of denied boarding compensation for passengers
denied boarding involuntarily.
(a) Subject to the exceptions provided in Sec. 250.6, a carrier to
whom this part applies as described in Sec. 250.2 shall pay
compensation to passengers denied boarding involuntarily from an
oversold flight at the rate of 200 percent of the fare (including any
surcharges and air transportation taxes) to the passenger's next
stopover, or if none, to the passenger's final destination, with a
maximum of $800. However, the compensation shall be one-half the amount
described above, with a $400 maximum, if the carrier arranges for
comparable air transportation [see Sec. 250.1], or other
transportation used by the passenger that, at the time either such
arrangement is made, is planned to arrive at the airport of the
passenger's next stopover, or if none, the airport of the passenger's
final destination, not later than 2 hours after the time the direct or
connecting flight from which the passenger was denied boarding is
planned to arrive in the case of interstate air transportation, or 4
hours after such time in the case of foreign air transportation.
* * * * *
0
7. Section 250.6(b) is revised to read as follows:
* * * * *
(b) The flight for which the passenger holds confirmed reserved
space is unable to accommodate that passenger because of substitution
of equipment of lesser capacity when required by operational or safety
reasons; or, on an aircraft with a designed passenger capacity of 60 or
fewer seats, the flight for which the passenger holds confirmed
reserved space is unable to accommodate that passenger due to weight/
balance restrictions when required by operational or safety reasons;
* * * * *
0
8. Section 250.9(b) is revised to read as follows:
Sec. 250.9 Written explanation of denied boarding compensation and
boarding priorities.
* * * * *
(b) The statement shall read as follows:
Compensation for Denied Boarding
If you have been denied a reserved seat on (name of air carrier),
you are probably entitled to monetary compensation. This notice
explains the airline's obligation and the passenger's rights in the
case of an oversold flight, in accordance with regulations of the U.S.
Department of Transportation.
Volunteers and Boarding Priorities
If a flight is oversold (more passengers hold confirmed
reservations than there are seats available), no one may be denied
boarding against his or her will until airline personnel first ask for
volunteers who will give up their reservation willingly, in exchange
for a payment of the airline's choosing. If there are not enough
volunteers, other passengers may be denied boarding involuntarily in
accordance with the following boarding priority of (name of air
carrier): (In this space the carrier inserts its boarding priority
rules or a summary thereof, in a manner to be understandable to the
average passenger.)
Compensation for Involuntary Denied Boarding
If you are denied boarding involuntarily, you are entitled to a
payment of ``denied boarding compensation'' from the airline unless:
(1) you have not fully complied with the airline's ticketing, check-in
and reconfirmation requirements, or you are not acceptable for
transportation under the airline's usual rules and practices; or (2)
you are denied boarding because the flight is canceled; or (3) you are
denied boarding because a smaller capacity aircraft was substituted for
safety or operational reasons; or (4) on a flight operated with an
aircraft having 60 or fewer seats, you are denied boarding due to
safety-related weight/balance restrictions that limit payload; or (5)
you are offered accommodations in a section of the aircraft other than
specified in your ticket, at no extra charge (a passenger seated in a
section for which a lower fare is charged must be given an appropriate
refund); or (6) the airline is able to place you on another flight or
flights that are planned to reach your next stopover or final
destination within one hour of the planned arrival time of your
original flight.
Amount of Denied Boarding Compensation
Passengers who are eligible for denied boarding compensation must
be offered a payment equal to their one-way fare to their destination
(including connecting flights) or first stopover of four hours or
longer, with a $400 maximum. However, if the airline cannot arrange
``alternate transportation'' (see below) for the passenger, the
compensation is doubled ($800 maximum). The fare upon which the
compensation is based shall include any surcharge and air
transportation tax.
``Alternate transportation'' is air transportation (by any airline
licensed by DOT) or other transportation used by the passenger which,
at the time the arrangement is made, is planned to arrive at the
passenger's next scheduled stopover of 4 hours or longer or, if none,
the passenger's final destination, no later than 2 hours (for flights
between U.S. points, including territories and possessions) or 4 hours
(for international flights) after the passenger's originally scheduled
arrival time.
Method of Payment
Except as provided below, the airline must give each passenger who
qualified for involuntary denied boarding
[[Page 21035]]
compensation a payment by cash or check for the amount specified above,
on the day and at the place the involuntary denied boarding occurs. If
the airline arranges alternate transportation for the passenger's
convenience that departs before the payment can be made, the payment
shall be sent to the passenger within 24 hours. The air carrier may
offer free or discounted transportation in place of the cash payment.
In that event, the carrier must disclose all material restrictions on
the use of the free or discounted transportation before the passenger
decides whether to accept the transportation in lieu of a cash or check
payment. The passenger may insist on the cash/check payment or refuse
all compensation and bring private legal action.
Passenger's Options
Acceptance of the compensation may relieve (name of air carrier)
from any further liability to the passenger caused by its failure to
honor the confirmed reservation. However, the passenger may decline the
payment and seek to recover damages in a court of law or in some other
manner.
0
9. In Sec. 250.10, remove the word ``carrier'' and replace it with the
phrase ``reporting carrier as defined in 14 CFR 234.2 and any carrier
that voluntarily submits data pursuant to Sec. 234.7 of that part.''
0
10. Section 250.11(a) is revised to read as follows:
Sec. 250.11 Public disclosure of deliberate overbooking and boarding
procedures.
(a) Every carrier shall cause to be displayed continuously in a
conspicuous public place at each desk, station and position in the
United States which is in the charge of a person employed exclusively
by it, or by it jointly with another person, or by any agent employed
by such air carrier or foreign air carrier to sell tickets to
passengers, a sign located so as to be clearly visible and clearly
readable to the traveling public, which shall have printed thereon the
following statement in boldface type at least one-fourth of an inch
high:
Notice--Overbooking of Flights
Airline flights may be overbooked, and there is a slight chance
that a seat will not be available on a flight for which a person has a
confirmed reservation. If the flight is overbooked, no one will be
denied a seat until airline personnel first ask for volunteers willing
to give up their reservation in exchange for compensation of the
airline's choosing. If there are not enough volunteers, the airline
will deny boarding to other persons in accordance with its particular
boarding priority. With few exceptions, including failure to comply
with the carrier's check-in deadline (carrier shall insert either ``of
-- minutes prior to each flight segment'' or ``(which are available
upon request from the air carrier)'' here), persons denied boarding
involuntarily are entitled to compensation. The complete rules for the
payment of compensation and each airline's boarding priorities are
available at all airport ticket counters and boarding locations. Some
airlines do not apply these consumer protections to travel from some
foreign countries, although other consumer protections may be
available. Check with your airline or your travel agent.
* * * * *
Issued this 14th day of April, 2008, at Washington, DC.
Michael W. Reynolds,
Acting Assistant Secretary for Aviation and International Affairs.
[FR Doc. 08-1145 Filed 4-16-08; 9:08 am]
BILLING CODE 4910-9X-P