[Code of Federal Regulations]

[Title 14, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 14CFR271.4]



[Page 216-217]

 

                     TITLE 14--AERONAUTICS AND SPACE

 

   CHAPTER II--OFFICE OF THE SECRETARY, DEPARTMENT OF TRANSPORTATION 

                         (AVIATION PROCEEDINGS)

 

PART 271_GUIDELINES FOR SUBSIDIZING AIR CARRIERS PROVIDING ESSENTIAL 

AIR TRANSPORTATION--Table of Contents

 

Sec. 271.4  Carrier costs.



    (a) The reasonable costs projected for a carrier providing essential 

air service at an eligible place will be evaluated:

    (1) For costs attributable to the carrier's flying operations 

(direct expenses), by comparing the projected costs submitted by the 

carrier with the following:

    (i) The carrier's historical direct operating costs with the same or 

similar aircraft types;

    (ii) The direct operating unit costs of similar carriers using the 

same or similar equipment; and

    (iii) Data supplied by the manufacturer of the carrier's aircraft.

    (2) For other costs, by one or more of the following methods:

    (i) By direct assignment where the indirect costs are attributable 

to the carrier's operations at the eligible place;

    (ii) By comparing the carrier's systemwide indirect operating 

expenses to those submitted by the carrier for the eligible place; or

    (iii) By comparing the indirect operating expenses submitted by the 

carrier with the ratio of indirect to direct costs that have been 

experienced by the carrier in other markets or to costs that are 

representative of the industry.

    (3) By considering the unique circumstances of the carrier or the 

community being served that justify deviations from the costs that would 

otherwise be established for that carrier under this paragraph.

    (4) By determining whether the aircraft to be used by the carrier at 

the eligible place, and on which its costs are derived, are appropriate 

for providing essential air service there. The appropriateness of the 

aircraft to be



[[Page 217]]



used is based on the following characteristics of the eligible place:

    (i) Traffic levels;

    (ii) The level of air service that the Department has decided is 

essential for the eligible place;

    (iii) Distance to the designated hub;

    (iv) The altitude at which the carrier must fly to the designated 

hub; and

    (v) Other operational elements involved.

    (b) When the essential air service would be made part of the 

carrier's linear system, the Department might, instead of the factors in 

paragraph (a) of this section, consider only the incremental costs that 

the carrier will incur in adding that service to its system.



[ER-1398, 49 FR 49846, Dec. 24, 1984, as amended at 60 FR 43524, 43525, 

Aug. 22, 1995]