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DEPARTMENT OF TRANSPORTATION 40836 (August 10, 1994), to obtain American Society of Travel Agents, comments and reply comments on Mercury Travel, Omega World Travel, Office of the Secretary requiring the disclosure of code-sharing Rogal Associates, Township Travel, and arrangements and long-term wet leases. USTravel), and five other groups or 14 CFR Parts 257 and 399 In these operations, the operator of a individuals (Americans for Sound [Docket Nos. OST±95±179 & OST±95±623] flight differs from the airline in whose Aviation Policy, the City of name the transportation is sold. The Philadelphia, Donald Pevsner, the RIN 2105±AC10 NPRM proposed to strengthen the British Embassy, and Congresswoman 2 Disclosure of Code-Sharing current disclosure rules. Rosa De Lauro). The NPRM, among other things, Arrangements and Long-Term Wet The comments persuaded us that we proposed (1) to require travel agents Leases should change one aspect of the doing business in the United States, proposal. The proposed rule would have AGENCY: Office of the Secretary, DOT. foreign air carriers, and U.S. air carriers allowed airlines operating under ACTION: Final rule. (a) to give consumers reasonable and network names, e.g., American Eagle or timely notice if air transportation they Delta Connection, to identify themselves SUMMARY: This rule strengthens the are considering purchasing will be to the public only by those names. Department’s current consumer provided by an airline different from the Supporters of this original proposal notification rules and policies to ensure airline holding out the transportation, argued that giving passengers the actual that consumers have pertinent and (b) to disclose the identity of the corporate name, e.g., Atlantic Coast information about airline code-sharing airline that will actually operate the Airlines, could add to confuse arrangements and long-term wet leases aircraft; and (2) for tickets issued in the passengers’ confusion, because there are in domestic and international air United States, to require U.S. and typically no airport signs using that transportation. The rule, among other foreign air carriers and travel agents to name that would tell passengers where things, does the following: First, provide written notice of the to check in. transporting carrier’s identity at the time requires travel agents doing business in Some commenters, however, argued of purchase of air transportation the United States, foreign air carriers, that the public should know precisely involving a code-sharing or long-term and U.S. air carriers: To give consumers who is operating the aircraft. They wet-lease arrangement. The NPRM also reasonable and timely notice if air asserted that permitting the commuters stated that the Department wants to transportation they are considering to operate only under a network name purchasing will be provided by an consider seriously a requirement that the transporting carrier’s identity be obscures, rather than clarifies, the airline different from the airline holding nature of the operation. out the transportation, and to disclose printed on the flight coupon for services We issued a supplemental notice the identity of the airline that will involving a code-sharing or long-term proposing to require all operators to actually operate the aircraft. wet-lease arrangement. Second, for tickets issued in the This action was taken to ensure that disclose their corporate name. 60 FR United States, requires U.S. and foreign consumers have pertinent information 3359 (January 17, 1995). The notice also air carriers and travel agents to provide about airline code-sharing arrangements requested comments on whether, to written notice of the transporting and long-term wet leases on domestic avoid any airport-related confusion, we carrier’s identity at the time of purchase and international flights. should also require disclosure of the of air transportation involving a code- We received comments on the NPRM network name where there is one. The sharing or long-term wet-lease and reply comments from ten U.S. purpose of this proposal was to help arrangement. airlines (Alaska Airlines, Inc., American ensure that consumers will not assume that a major airline is the transporting DATES: Airlines, Inc., Continental Airlines, Inc., This regulation is effective July carrier when purchasing transportation 13, 1999. Comments on the information Delta Air Lines, Inc., Frontier Airlines, Inc.1, Northwest Airlines, Inc., operated by one of its regional airline collection requirements must be partners. received on or before May 14, 1999. Southwest Airlines Co., Trans World Airlines, United Air Lines, Inc., and We received comments on the ADDRESSES: Comments should be sent to USAir, Inc.), eight foreign airlines supplemental notice from Northwest Jack Schmidt, Office of Aviation and (Aerovias de Mexico, S.A. de C.V., Airlines, American Airlines and AMR International Economics (X–10), Office British Airways, Qantas Airways Eagle, Trans World Airlines, United Air of the Assistant Secretary for Aviation Limited, SwissAir, LTU Lufttransport- Lines, USAir, Inc., Midwest Express and International Affairs, Office of the Unternehmen GmbH. & Co. KG, British Airlines and Astral Aviation doing Secretary, U.S. Department of Midland Airways, Ansett Australia business as Skyway Airlines, Delta Air Transportation, 400 Seventh St., SW., Holdings, and Lan Chile), the Lines, Continental Airlines and System Washington, DC 20590, (202) 366–5420 International Association of Machinists One, the International Association of or (202) 366–7638 (FAX). and Aerospace Workers, three Machinists and Aerospace Workers, the FOR FURTHER INFORMATION CONTACT: associations (Regional Airline Port Authority of New York and New Laura Trejo, Office of International Law, Association, International Airline Jersey, Gulfstream International Office of the General Counsel, Room Passengers Association, and National Airlines, Inc., the American Society of 10118, (202) 366–9183, or Timothy Air Carrier Association), three CRS Travel Agents, and the Regional Airlines Kelly, Aviation Consumer Protection vendors (Galileo International Association. Division, Room 4107, (202) 366–5952, Partnership, Worldspan, and System The following is a summary of the U.S. Department of Transportation, 400 One Information Management, Inc.), comments and reply comments and the 7th Street, SW., Washington, DC 20590. nine travel agent/industry groups Department’s decision on each SUPPLEMENTARY INFORMATION: (Action 6, Admiral Travel Bureau, component of the NPRM: Background American Automobile Association, 2 The Saturn Corporation and PMI Mortgage The Department issued a Notice of 1 Frontier Airlines, Inc. subsequently withdrew its Insurance submitted letters prior to publication of Proposed Rulemaking (NPRM), 59 FR comments. the NPRM.

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Written Notice on the Flight Coupon Because American stated that a notice $1,000,000 depending upon the system. could be placed on ATB stock but not The total cost for the written The NPRM announced that the on TAT stock, TWA suggested that the notification on the ticket coupon would Department was considering a notice be required either on the ticket approximate $3,800,000 for the largest requirement that, where the designator stock or on the mini-itinerary stapled to portion of the U.S. airline/CRS vendor code on the ticket is different from that the ticket. TWA believes that the mini- industries. of the transporting carrier on any flight itinerary, when stapled to the ticket We believe that we should impose segment, there must be printed on the package, is an adequate substitute for such a cost burden only if it could be flight coupon (1) an asterisk, like the requiring notice of a code-share carrier shown that the benefits would clearly one that already identifies flights listed on the ticket coupon. outweigh the costs. Given the difficulty in computer reservation systems (CRSs) United claimed that printing on the of estimating the incremental benefit under an airline code different from that tickets would duplicate the written that notice on the ticket would add to of the transporting carrier, and (2) a notice on the itinerary and conflict with the other measures we are requiring, legend elsewhere on the coupon that the movement towards ticketless travel. such as the written and oral notice states the transporting carrier’s identity Further, United disagreed with components of the rule, we cannot preceded by the words ‘‘operated by.’’ American’s cost estimate, because it was conclude at this time that imposition of American supported the proposal and based on only one type of ticket the additional requirement is warranted. stated that the legend ‘‘operated by’’ generated on domestic ticket printers. Also, as United argued, it is unclear at could be printed on the newer According to United, most carriers this point how the ticketless travel ‘‘Automated Ticket and Boarding Pass’’ would not want to limit such a ticketing movement will develop. Therefore, (‘‘ATB’’) ticket stock, which accounts change only to the type of ticket issued during the two to three year period for 80 percent of the tickets issued. in the United States but would want it following effectiveness of this rule, the However, American claimed that there to apply system-wide, and to all types Department will monitor (1) the is insufficient room on the older of printers. If the costs of effectiveness of the disclosure rule as ‘‘Transitional Automated Ticket’’ reprogramming and retooling all ticket adopted, (2) the ticketless travel trend, (‘‘TAT’’), which still accounts for 20 printers worldwide were taken into and (3) the ability of airlines to give percent of the tickets issued. American account, United estimated that costs adequate consumer notices in a estimated that total modifications to its would exceed $1 million and that ticketless environment and will revisit SABRE computer reservation system implementation would take more than this issue then if justified. We can then (used by travel agents and American’s one year. Continental and System One initiate further rulemaking action if it own ticket agents) to comply with the estimated the costs to System One at appears necessary. more than $300,000 with a six to ten proposed requirement would cost Application of Rule to Wet Leases between $250,000 and $300,000. The month implementation phase. The NPRM proposed to apply the oral National Air Carrier Association Delta argued that the standard ticket and written notice requirements to wet (‘‘NACA’’) also supported the proposal. format is based on an industry leases that last more than 60 days Mr. Pevsner proposed that an asterisk be agreement. According to Delta, any because, from the consumer’s placed in the ‘‘CARRIER’’ box with a changes to the format will require discussions between the carriers and perspective, wet leasing is bold-type disclosure elsewhere on the CRSs, which would be time-consuming indistinguishable from code-sharing: the flight coupon. and potentially costly. passenger buys a ticket from one airline, The American Automobile The International Airline Passenger but the aircraft is operated by another. Association (‘‘AAA’’), British Airways, Association (IAPA) stated that if there is Continental, System One, British Delta, Galileo, Northwest, Qantas, insufficient space to print a notice on Airways, Qantas, USAir, NACA, the Worldspan, USAir, the City of the ticket, a card could be added after Government of the United Kingdom, Philadelphia, Lan Chile, and SwissAir each coupon on which a code-sharing Lan Chile, and Northwest opposed this opposed printing on the ticket. Most of flight appears stating that the flight on proposal. They argued that wet-lease the opposition claimed that there was the prior coupon is actually being operations do not cause significant simply no room on the ticket and that operated by another carrier. confusion problems and that the the associated costs would be unduly proposed notice would actually confuse burdensome. Worldspan argued that it Decision passengers. In addition, these opponents would not be feasible to include the The Department has decided to defer claimed that it is not technically feasible identity of the transporting carrier on a further consideration of a rule requiring to give notice, because aircraft used in flight coupon, and it opposed written notice on the face of the ticket wet leases are frequently used on American’s suggestion that the notice until standards for ticketing, evolution different routings and/or on different should be carried on the ATB stock but of ticketless travel, and the effectiveness days of the week, making advance not the TAT stock. Worldspan asserted of other disclosure measures can better identification impracticable. USAir in that if notice were provided on one type be evaluated. The comments have particular claimed that it would take at of ticket stock but not the other, the persuaded us that we could, at best, least a year to modify computer result would be more confusing to cover only 80 percent of the tickets software, and it stated that the passengers than providing no notice on issued at this time without imposing Department can impose any necessary either type of stock. Galileo stated that substantial costs, since the older TAT consumer protection conditions through it would be necessary to retrofit about ticket stock cannot accommodate our the present licensing process. British 13,000 ticket printers located in Apollo proposed notice. It appears that the Airways argued that requiring notice agencies, costing $500,000, and that the major cost of providing the written will keep airlines from being able to implementation phase would take notification on the coupon is due to the enter into flexible aircraft arrangements. longer than 60 days. Delta stated that if reprogramming of the print command Northwest stated that a wet lease differs the Department imposed a new written software and retooling the printer from a code-sharing arrangement in that notice requirement, the industry would hardware. Based on the comments, only one carrier is holding out service need up to one year to comply. these costs range from $300,000 to on the flight. Moreover, Northwest

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In these alliances, network name and the identity of the Policy (‘‘ASAP’’) stated that the generally only the major carrier holds transporting carrier to minimize notification requirement should be out service.3 confusion and to tie the reputation of triggered by wet leases of two weeks The Department will modify the the major carrier to the service provided since CRS notification to travel agents proposal, however, to apply only to by the commuter code-share partner. can be nearly instantaneous. those wet leases where the aircraft are They stated that the rule is feasible and LTU, a privately owned German dedicated to particular routes. This relatively inexpensive to implement. To carrier, suggested amending section modification addresses the commenters’ this extent, they asserted that in 257.3(f), the definition of a long-term concern that giving notice may not be American’s timetables, the American wet lease, to add at the end the phrase, feasible if aircraft are not dedicated to Eagle logo is used to indicate that ‘‘unless such lease is between air particular routes and that the service in a particular city-pair is carriers with 100 percent common requirement will keep airlines from provided by one of the American Eagle ownership.’’ LTU leases aircraft on a entering into flexible aircraft carriers. They noted that a simple chart long-term basis to an affiliate with arrangements. Carriers in situations in the timetable can correlate the flight identical ownership. The aircraft are such as those like LTU and Southwest numbers with each of the four operating then leased back to LTU with crew for may seek individual relief from the rule entities that make up the American the same term. A limited portion of the from the Department. Eagle network. Furthermore, they stated operations of these aircraft are in We are not adopting USAir’s that in the SABRE computer scheduled service to the United States. suggestion that the Department impose reservations system used by about LTU claimed that these are not true wet any necessary consumer protection 24,000 travel agencies world wide, the leases because LTU owns the aircraft it conditions through the present licensing identity of the individual network leases, but it noted that LTU’s process, since the purpose of this rule carrier is already available for most operations would appear to be subject to is to impose clear and uniform airlines. According to American and this proposal. According to LTU, its disclosure requirements, not ad hoc AMR Eagle, SABRE would not have affiliate does not have a separate conditions. Moreover, wet leases difficulty complying with the proposed commercial identity or a designator involving only U.S. carriers are not now rule so long as the individual carriers in code in the Official Airline Guides, and subject to any economic licensing code-sharing networks are obligated to moreover, it and its affiliate have the process, but are authorized by provide the required information. same managing director and most of the regulation. Opponents argued that there would be same management. Reasoning that the Corporate and Network Names substantial costs and confusion. TWA disclosure requirement would only stated that the rule would increase costs confuse passengers, LTU suggested The Supplemental Notice of Proposed that are impossible to quantify for amending the proposal as indicated Rulemaking (SNPRM) proposed a consumers, carriers, and travel agents. above. requirement that for operations TWA asserted that the rule would cause Southwest asked the Department to conducted under a network name, such consumer delays as they search airports revise the NPRM to exclude the as ‘‘The Delta Connection,’’ that is vainly for gates showing the carrier’s Southwest-Morris Air arrangement and applied to several airlines, the corporate name. According to TWA, the similar operating arrangements from the transporting carrier’s corporate name Department has no basis to believe that public disclosure requirements. Morris itself be disclosed to consumers in code- passengers experience any confusion Air is now wholly owned by Southwest. share and long-term wet lease when they hear the name of commuter Southwest stated that, under their operations. The Department stated that carrier affiliates of major carriers. transitional arrangement, Morris Air it expects airlines and ticket agents also Northwest stated that many carriers ceased holding out its services to the to disclose the network name, if that is already voluntarily disclose the public on October 4, 1994, and after that the name in which service is generally corporate identity to passengers who date those services were held out solely held out to the public. We solicited want the information. Northwest in Southwest’s name. For a period of six comments on whether we should make claimed that Worldspan and its internal months, some flights would be operated this an explicit requirement in the final reservation system identify the by Morris Air aircraft and crews. This rule. corporate names in both the availability arrangement was to last only long American, AMR Eagle, and the and booking screens. Northwest also enough to meet the FAA procedures for International Association of Machinists noted that American does not provide conversion of the remaining Morris Air and Aerospace Workers (IAM) the corporate names of its American aircraft to Southwest’s certificate and supported this proposal. IAM based its Eagle network commuters in the Official operations specifications. support on its concern that consumers Airline Guides or of its American Eagle carriers in its system timetable. Decision 3 Furthermore, Northwest’s assertion that the United argued that the Department’s The Department has decided to retain lessee carrier is fully responsible for the operation consumer complaint files do not of the flight even though the crew is provided by but modify the proposed requirement to the lessor carrier is only partially correct. The indicate a consumer demand for disclose the identity of the actual Federal Aviation Administration policy requires identification of network commuters by operator of a long-term wet lease. No ‘‘each U.S. air carrier to retain operational control their corporate names. United stated commenter provided an adequate basis of each wet leased aircraft listed on its operations that it already instructs its reservation specifications regardless of whether the aircraft is for distinguishing between long-term U.S. or foreign registered.’’ Air Transportation agents to provide the corporate name wet leases and code-sharing Operations Inspector’s Handbook, Order 8400.10, where a passenger books a ticket arrangements from the consumer’s August 23, 1988, section 4.309. involving United Express. United noted

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However, United asserted the costs are a significant percentage of names at time of sale and in advertising that if any regulation is deemed its projected profits on its forecast 1995 would also incur substantial costs. necessary, it should be limited to the revenues of $35 million. Astral stated USAir stated that of the 2500 USAir requirement in proposed sections that its estimate does not include, Express departures per day, not one is 257.5(a) and 257.5(c) regarding among other things, the increased operated by a USAir commuter affiliate information in CRSs and in carrier expenses to travel agents, which book under its own corporate name. schedules and a written notice. United about 80 percent of the tickets on Furthermore, USAir argued that there asserted that it, like most other carriers Midwest Express/Skyway Airlines. are no public identifiers used for these (except for American), already provides Delta argued that the proposal operations except for the USAir Express the corporate name in written or represents a significant modification to network name. According to USAir, if electronic schedule information, so long-standing industry practice and consumers are given both the network adoption of this portion of the rule would impose substantial costs and name and corporate name, they will be should not be burdensome. As for burdens without bringing any unsure of which name to seek at the written notice, United stated that it does countervailing public benefits. Delta airport. In addition, USAir estimated not object to the rule so long as the estimated that several hundred hours of that complying with the proposed rule Department clarifies that United can programming would be required over would cost $255,000 in programming use, as it does currently, abbreviations several months to include the corporate hours and at least six months to a year’s where these are used by the commuter names of the Delta Connection carriers time to update USAir’s PACER carriers themselves. In contrast, United and all other code-share partners in its reservations system. stated that there is no need for proposed primary availability screens. It noted The Regional Airline Association section 257.5(b) requiring corporate that if the proposed rule requires (RAA) supports the disclosure of name information in the oral notices or disclosure of the corporate name of the network names. However, it does not in advertising as indicated in proposed Delta Connection carrier to be included believe that disclosure of the corporate section 257.5(d). United argued that a as part of each relevant flight listing, name would have any benefits for the requirement to disclose the corporate such requirement would substantially public. name would be an undue burden and increase the size and costs of the printed The American Society of Travel restrictions on carrier advertising would schedules. Delta stated that it is Agents (ASTA) argued that the proposed represent an unconstitutional restraint unaware of any confusion among the rule was not the most efficient method on freedom of commercial speech. public concerning domestic code- of notifying travel agents about code- Finally, United noted that the sharing under network names and sharing details. ASTA suggested that the Department did not conduct a cost- argued that disclosing the corporate Department require that CRS displays benefit analysis for the additional notice name would not provide additional clearly indicate the existence of code- proposed in the SNPRM. information concerning the type and sharing by showing all code-shared The Port Authority of New York and size of aircraft, crew qualifications, flights only once in the CRS availability New Jersey asserted that the proposed comfort, and in-flight amenities. If displays and using a double airline rule would not avoid consumer anything, Delta argued, the proposal code, with the first displayed code confusion. It argued that it is unclear would promote consumer confusion. indicating the transporting carrier. whether the term ‘‘corporate name’’ Delta also stated that travel agents According to ASTA, the rest of the rule means the name in which the would likely only disclose what is should be deferred until voluntary Department issued the applicable required (i.e., the corporate name) and compliance with their proposal can be certificate or the ‘‘doing business as’’ argued that requiring disclosure of the monitored. ASTA questioned whether name, which is easy to change . corporate name would dilute the value any rule is necessary on this subject if According to Midwest Express, its of the network name. Delta suggested the Department is convinced that agents only code-share partner is its subsidiary that if the Department requires and airlines are going to disclose the with the official corporate name of disclosure of the corporate name, it existence of code-sharing situations Astral Aviation, Inc. doing business as should key the timing of such disclosure voluntarily along with the network Skyway Airlines. Midwest Express to the point at which the customer name. stated that Skyway Airlines is not the purchases the transportation rather than Gulfstream International Airlines, Inc. name of a network of different requiring such notice before booking (Gulfstream) asserted that the network commuter operations by different, transportation. name is sufficient to alert customers to independent corporations. It urged the Continental and System One argued a code-shared flight. Although it Department to exempt from the that if the Department adopts any rule opposes the rule, Gulfstream stated that corporate name identification requiring disclosure of corporate names, if the rule is adopted, the Department requirement the situation where only that rule should be limited to code- should make it mandatory for travel one corporation is using a particular sharing arrangements. They asserted agents to inform the public of the servicemark. Midwest Express argued that corporate names change frequently network name to avoid airport terminal that requiring it to identify Skyway as and are relatively meaningless to the confusion. As to potential costs for the ‘‘Astral Aviation/Skyway Airlines’’ will general public. Moreover, like Delta, regional carriers to re-identify not help consumers know that Midwest they also stated that use of network themselves in terminal facilities, Express and Skyway are separate names has long been standard industry Gulfstream noted that a major terminal operations. It argued that the proposed practice. They claimed that requiring will charge a new airline between rule would only confuse consumers and disclosure of corporate names in $5,000 to $10,000 for a signage package.

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According to Gulfstream, any argument number of independent, separately choices.4 Moreover, we do not that network names might be owned and managed carriers. However, understand most other commenters to intentionally masking the true corporate the contract of carriage is frequently be advocating that the information be identities is not valid, because all between the commuter airline and the withheld from consumers: the dispute information concerning the corporate passenger in domestic transportation, seems to be over when and how it name of the transporting carrier is and except in certain circumstances, the should be provided, and whether a rule provided at the customer’s request by major airline may bear no legal requiring disclosure is warranted. the issuing airline or travel agency. In responsibility to the passenger. Further, United and Northwest say that some carriers already make the corporate addition, Gulfstream claimed, all the passenger may erroneously believe name available to passengers who want pertinent information is provided by the that he or she is traveling on that major major carriers’ publications and the information, if they ask.5 We believe airline. published in the Official Airline Guides. that the reasons that compelled these Without disclosure requirements, carriers to do so, and the interest shown Decision code sharing carriers can obscure their by the consumers who ask, justify The Department has decided to relationships as well as important requiring that this information be require airlines and ticket agents to aspects of the contract of carriage. provided to all passengers. Moreover, if disclose to consumers the corporate Indeed, one marketing objective in the several carriers already have a system name of the transporting carrier in code- domestic code sharing practice of using for providing this information, this share and long-term wet lease a network name may well be to draw would appear to undermine the operations. In addition, we have upon the goodwill and reputation of the assertions that the proposal is unduly decided to revise this proposal to major airline to attract passengers to the burdensome. require the sellers of air transportation commuter airline. However, if the Like our predecessor, the Civil to disclose the network name, if one is Aeronautics Board, we have long relationship is not fully disclosed, it is used, as well as the corporate name. believed that code-sharing can be often unclear to the consumer who is This requirement will apply to all four misleading if not disclosed to notice requirements: information responsible to them in cases of lost purchasers of air transportation. When it supplied to CRS vendors, oral notice baggage, for example, making recovery first examined the need for consumer during the decision making portion of difficult. Moreover, consumers protection in a code-sharing context in the purchase of transportation, written purchasing air transportation are 1984, the CAB found that ‘‘code sharing notice, and advertisements. purchasing a service to be performed in ** * may cause confusion and may be Internationally, the practice of code the future: in essence, the consumer is deceptive to consumers in some cases.’’ sharing is expanding dramatically. The extending credit to the carrier. The use United is mistaken when it suggests that gradual liberalization of our bilateral air of the network name, without disclosure the First Amendment precludes us from services agreements will increasingly of the corporate name, could result in a requiring airlines to divulge the enable foreign airlines to offer through passenger’s inadvertently purchasing corporate name: the First Amendment service to many interior U.S. points. We transportation from a carrier that the protects only truthful speech, not false expect much of this service, particularly passenger believes is not worthy of his and misleading commercial speech.6 international service to our smaller or her credit. Moreover, we have recently undertaken a study of the economics of communities, to be provided through Passengers may prefer to avoid certain code sharing,7 and we believe that in the code-sharing arrangements with U.S. carriers because of prior negative airlines. future, code-sharing arrangements will experiences. Their ability to do so is a As discussed below, we are taking become even more common than they this action because we believe strongly critical part of a competitive system. Yet are today. Also, they may be more that consumers are entitled to know all undisclosed or inadequately-disclosed complex, involving more partners, and significant information regarding the air code-sharing, by obscuring the identity potentially global in scope.8 Although transportation they are purchasing and of the actual operator, could inhibit the United accurately notes that we had few that consumers can make fully informed free operation of the market. Finally, complaints in 1994, we expect that the choices only when they have all passengers can be misled by code- trend towards expanded and more relevant information. Further, we sharing arrangements between complex code-sharing arrangements will believe that the failure to disclose both commuter carriers and major carriers result in many more complaints unless the corporate and network names is into thinking that they have purchased we improve disclosure to the consumer. inherently unfair and deceptive. Failure jet transportation because they dealt Thus, we conclude that consumers to disclose would leave many with a major carrier. This confusion has will benefit from having complete consumers without information proved particularly troublesome for information. Consumers have a right to important to them and not readily passengers with disabilities since know what kind of service they are available to them otherwise. The commuter aircraft are often less purchasing and with whom they are potential for their confusion would accessible than large jets. For all these dealing. Our rule will effectuate this increase as the practice of code sharing reasons, we believe that passengers right. becomes more widespread. should be told the identity of the company with which they are doing 4 See, Comments of International Airline The Requirement To Disclose the Passenger Ass’n. and Americans for Sound Aviation Corporate Name business and that the failure to identify Policy. the transporting carrier by its corporate 5 Reply comments of Northwest Airlines, Inc. at Service to many U.S. communities is name is inherently unfair and deceptive. 3 (Feb. 23, 1995); Comments of United Air Lines, provided by commuter airlines that Inc. at 4 (Feb. 16, 1995). share the code of major airline partners. The only passenger groups that have 6 In re RMJ, 455 U.S. 191, 203 (1982). Services such as these are marketed participated in this rulemaking strongly 7 A Study of International Airline Code Sharing using a trade name that is often similar supported requiring disclosure of the prepared for the Department of Transportation, corporate name, citing the right of December 1994. to that of the major airline partner. This 8 International Air Transportation Policy ‘‘network’’ name may be shared by a consumers to make fully informed Statement, 60 FR 21841 at 21842 (May 3, 1995).

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Our analysis indicates that the costs enplanements) were transported by amounted to 73.3 million representing of providing this information should not code-sharing regional airlines. As a 18.3 million additional minutes or be substantial, especially over time. proxy, the figure 53.7 million 305,375 additional hours. Based on an Although some commenters claimed enplanements, which are 10.3 percent of hourly rate of $17.44 (salary and fringe that revealing the corporate name to the total domestic enplanements, serves benefits) for a travel agent and $24.04 passengers would be unduly as a starting point for estimating the for an airline ticket agent, weighted by burdensome and expensive, they number of code-sharing tickets. We the relative number of tickets sold by provided very little evidence to support know, however, that this total overstates each, and an assumed rate of $0.25 per their claims, despite our specific request the number of code-sharing tickets, minute for the cost of additional that they do so.9 Indeed, Northwest’s since many tickets are written to cover telephone line usage, the annual internal reservation system provides the a round-trip journey that would increase in operating costs for the information already.10 Continental/ encompass two enplanements but only airline and travel agent industries System One and USAir provided only a single ticket. For these passengers, use amounted to $10.3 million. In the conclusory estimates of the costs of of the number of enplanements context of the $68 billion in annual reprogramming. United confirmed that overstates the number of tickets by a passenger revenues that the U.S. airline it instructs its reservations agents to factor of two. industry generated in 1994 or the $94 provide the corporate name when a To estimate the number of tickets for billion in sales ($56 billion of which passenger books a ticket involving a U. S. and foreign airlines on pertained to airline sales) that travel United Express carrier and that its international routes, which include agencies produced in 1993, the internal reservation system displays the some travel to or from a U.S. point or increased operating cost is clearly not commuter carrier’s actual name on the points, we began with the total of 89.8 prohibitive. screen at the time the reservation is million passengers for the year ended We also used similar assumptions entered.11 It did not estimate the cost of December 31, 1994. Of this total, 48.6 (duration of call, number of tickets, and reprogramming its systems to display million flew on U.S. flag carriers and number of calls) to estimate the the information at the earlier decision 41.2 million used foreign carriers. In potential increase in cost to the making point. estimating the number of code-sharing prospective traveler that would result Reprogramming costs are, of course, tickets based on these passenger totals, from the loss of productive time due to one-time costs. The Department is it is apparent that the number of code- the additional talk time. Based on the aware, as Midwest/Astral and other sharing tickets would be overstated for value of time at $34 per hour and $65 commenters point out, that there will be the same reason of round-trip ticketing per hour for domestic and international recurring operating costs due to the as stated previously. We also believe travelers, respectively, we estimated increase in time that it will take to that in 1994, on a volume basis, code- that the annual additional cost to disclose the additional information sharing was not nearly as prevalent travelers would amount to $11.1 required by this rule. Among the internationally as it was domestically. million. On a per ticket basis, the commenters, only Midwest Express/ Since domestic regional enplanements average cost to consumers would be Astral provided a more detailed are 10.3 percent of total domestic $0.30 for domestic travel and $0.57 for estimate of the increase. Based on enplanements, we believe that it is an international trip. While the increased labor costs ($30,000) resulting reasonable to assume that code-sharing Department would prefer not to take from additional talk time of 15 seconds tickets comprise less than 10.3 percent actions which have the potential to per call for reservation agents and of total international tickets and have increase the cost of travel or result in a increased telephone line usage charges used five percent for purposes of this loss of productive time, we believe these ($58,000), they calculated an annual analysis. amounts are minimal and not Based on U.S. airlines’ estimated increase in operating costs of $88,000. prohibitive considering that the average In order to estimate annual operating code-sharing domestic traffic of 32.2 ticket price for domestic travel is costs, we estimated the number of million (calculated on the assumption approximately $140 and the average airline tickets that involve code-sharing that 80 percent of the 53.7 million price for international travel exceeds passengers purchase round-trip tickets), or long-term wet-lease arrangements $400. Based on these, the cost to U.S. estimated code-sharing since the Department does not collect consumers would represent international traffic of 1.5 million (five data on the actual number of tickets that approximately 0.2 percent and 0.1 percent of the total of 48.6 million using involve these arrangements. We have percent of the domestic and the 80 percent round-trip assumption), therefore determined that a reasonable international ticket prices. and 1.2 million estimated code-sharing The Department recognizes that code- estimate of the number of tickets issued foreign flag passengers (five percent of sharing arrangements and the number of under a code-sharing arrangement could the total of 41.2 million with the same code-sharing trips are likely to increase be made based on the number of 80 percent round-trip assumption), this in the future. We also recognize that the passenger enplanements. For domestic analysis estimated that there were cost for fully informing prospective air transportation, code-sharing approximately 34.9 million code- travelers will impact different segments arrangements typically involve sharing tickets issued in the year ended of the travel industry and the public to agreements between a larger major December 31, 1994. varying degrees. However, we believe airline and a regional airline. For the We then estimated the annual that the fact that such arrangements are year ended December 31, 1994, the U.S. increase in operating costs for the increasing and becoming more regional airline industry reported 57.1 airline and travel agent industries. sophisticated emphasizes the million passenger enplanements of Using the 15 seconds (0.25 minutes) of paramount importance that the traveling which 94 percent (or 53.7 million additional talk time and assuming that public be fully informed. This benefit each of the estimated 34.9 million code- clearly outweighs the minor cost 9 60 FR 3361, January 17, 1995. sharing purchasers in 1994 made an increases and we further believe that 10 Motion for Leave to File and Reply Comments of Northwest Airlines, Inc. at 3 (Feb. 23, 1995). average of 2.1 phone calls during the these costs will decrease in the future as 11 Comments of United Air Lines, Inc. at 10 (Feb. process of purchasing tickets, the consumers and frequent travelers adjust 16, 1995). estimated number of total calls and as new, less-costly, channels of

VerDate 03-MAR-99 09:14 Mar 12, 1999 Jkt 183247 PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 E:\FR\FM\15MRR2.XXX pfrm02 PsN: 15MRR2 12844 Federal Register / Vol. 64, No. 49 / Monday, March 15, 1999 / Rules and Regulations distribution become available (such as Accordingly, the rule will require where the carriers are affiliated by more the Internet.) airlines and travel agents to tell than 10 percent ownership. Omega Midwest Express/Astral pointed out consumers, in any direct oral World Travel stated that the rule was that the $88,000 increase is significant communication, before booking unnecessary because travel agencies for an airline the size of Astral. While transportation, that the transportation already have an interest in providing we recognize that the impact of the rule they are considering involves a code- notice to their customers. Rogal will vary among airlines and travel sharing arrangement or a long-term wet Associates stated that code sharing agencies, we are reluctant to accept the lease, and to identify the transporting should be abolished and that the travel impact on Astral as stated since the carrier by both its corporate name and agency business should not be burdened increase in telephone line charges was its network name (if any). further. not documented and was difficult to 3. Written Notice. We will require the evaluate in comparison to our research transporting carrier to be identified by Decision into toll-free calling systems. corporate name and network name (if The Department has decided to adopt any) in the written notice requirement this requirement. Ticket agents The Requirement To Disclose the of section 257.5(c). Written notice that (including travel agents) sell about 80 Network Name clearly identifies the carrier by percent of all airline tickets issued in We have also decided to require corporate and network name will serve the United States. They are an important disclosure of the network name, if any, at least two important functions. It will source of information for consumers. under which the services are operated. provide consumers with relevant Omega Travel stated that travel agents As we noted in our August 1994 NPRM, information about the transportation already have a economic incentive to many carriers have chosen not to being purchased, and with the written provide information about code sharing. advertise or publicize their corporate notice as a reminder, the consumer will We agree. In order to attract repeat name, choosing instead to operate under be more likely to find the proper ticket business, agencies have an incentive to the network name of a major airline.12 counter, check-in desk, or gate. give their customers accurate and As a result, if a carrier or ticket agent 4. Advertisements. Advertisements complete information so that the were to identify the code-shared service are part of the decision making process. customers will not be disappointed on of a small carrier only by its corporate Therefore, we believe that the their trips. However, not all travel name, passenger confusion is likely. In transporting carrier should be identified agents may respond to this incentive in particular, we wish to avoid having in printed advertisements by both its the same way. We believe it necessary passengers arrive at the airport and look corporate name and its network name, to have a uniform rule so that all for a carrier that they know only by its if any. As discussed below, we have consumers will have complete corporate name (or which the ticket or decided that a generic disclosure will be information no matter who sells the written notice identifies only by its acceptable in the case of broadcast ticket. corporate name), when that particular advertisements. United, Qantas, and most travel carrier identifies itself at the airport agencies that commented voiced Application of Rule to Ticket Agents only by its network name. Not only concerns with the implementation of would such passengers be The NPRM proposed to require travel this rule. Regarding United’s and inconvenienced as they attempted to agents doing business in the United Qantas’ concerns, the fact remains that locate the carrier, but in some cases, States, when giving information about carriers, as principals, bear particularly in the case of a connection, air transportation involving code- responsibility for the acts of their they could miss their flights. sharing arrangements and long-term wet agents, the travel agents. In cases leases, to disclose these arrangements involving violations, we will decide When and How Disclosure Should Be and the identity of the transporting whether to take enforcement action, Made carrier. and, if so, against which entity or 1. Notice in schedules. The rule will Delta, Northwest, the RAA, entities, based on the circumstances of require airlines involved in code- Continental, System One, TWA, any particular case. The travel agency sharing arrangements or long-term wet Worldspan, Qantas, Mr. Pevsner, and industry’s concerns regarding the leases to ensure that schedule United supported the proposal. United resolution of the CRS display issue is information provided to the public and Qantas asked the Department to outside the scope of this proceeding. identifies both the corporate name and clarify that if the agent fails to provide Furthermore, that issue has been the network name, if any, of the notice, but the carrier has provided it directly raised in a different proceeding, transporting carrier. We believe that this with the necessary code-share Dockets 49620 and 49622. information is the minimum necessary information, any Department to enable reservations agents and travel enforcement action would be directed Application of Rule to Foreign Air agents to help the consumer make an against the travel agency, not against the Transportation informed decision about the carrier. The NPRM proposed to apply the transportation that they are purchasing. American, Alaska Airlines, ASTA, notice requirement to foreign air 2. Oral Notice. As discussed and PMI Mortgage Insurance carriers. Northwest, United, Delta, elsewhere, it is our policy that complained about multiple listing of Continental, System One, and TWA prospective purchasers of air code-sharing arrangements on CRS support this proposal. However, Qantas, transportation should know all the displays. They claimed that it would be the British Embassy, and British relevant facts during the decision unfair to impose the notice requirement Airways argue that the disclosure rules making portion of the reservation on travel agents unless there is better should apply only to the sale in the transaction. We believe that the true disclosure in the CRSs and the ‘‘screen United States of tickets for flights to, corporate identity of the transporting clutter’’ problem is addressed. Omega from, or within the United States. carrier is highly relevant to deciding World Travel requested that the TWA stated that British Airways’ what air transportation to purchase. Department terminate this rulemaking concern about the applicability of the proceeding and prohibit all code- proposed rule to sales and operations 12 59 FR 40836, 40838 (August 10, 1994). sharing arrangements except those wholly within a foreign country is

VerDate 03-MAR-99 09:14 Mar 12, 1999 Jkt 183247 PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 E:\FR\FM\15MRR2.XXX pfrm02 PsN: 15MRR2 Federal Register / Vol. 64, No. 49 / Monday, March 15, 1999 / Rules and Regulations 12845 overstated. According to TWA, the routed to carrier reservation agents Delta argued that the most important Department’s jurisdiction only applies outside the United States. time to provide notification of code- to foreign air transportation (traffic 3. Written notice: The rule will sharing arrangements is during between the United States and another require carriers and travel agents to give conversations prior to booking, because country). TWA noted that the written notice in connection with any that is the time during which the application of the rule to inbound sales air transportation sold in the United consumer is evaluating the available made abroad would protect consumers States—i.e., when either the seller or the options. Delta further argued that the abroad who are buying transportation to buyer is located in the United States. Department should reject the suggestion the United States and that such 4. Advertising: The requirement to that notification be given ‘‘at the first transportation, as foreign transportation, give notice in advertising will be limited instance’’ or on each and every occasion is within the jurisdiction of the to materials published, mailed or that contact is made with an airline Department. American argued that the broadcast in the United States. representative. rule should cover all tickets sold in the Northwest recommended that the United States, including segments Oral Notice disclosure be made during the booking, between non-U.S. points. Continental The NPRM proposed to require rather than before the booking, because and System One stated that the rule disclosure to the prospective consumer it still affords the passenger an should apply to foreign carrier sales in any direct oral communication, opportunity to decline the service if the outside the United States for travel to before booking transportation, that the passenger objects to the code-shared and from the United States. transporting carrier is not the carrier service. TWA disagrees with Northwest and argued that notice during booking is Decision whose designator code will appear on the ticket, as well as identification of the inadequate because it moves the notice Based on these comments, we have transporting carrier. to a time after the consumer has made decided that the notice requirement Several commenters expressed a decision. should apply to the marketing of foreign American asserted that the current concerns with regard to including the air transportation, within the meaning CRS displays of code-shared flights fail phrase ‘‘before booking transportation.’’ of the aviation statutes i.e., excluding to list flight information in a American and TWA argued that transportation between two foreign comprehensible manner and noted that disclosure should be made during any points, in the United States whether the ASTA, TWA, Frontier Airlines, and oral communication regarding a code- service is offered by a U.S. carrier or a ASAP also discussed the problems of shared flight. American suggested that foreign carrier. This provision merely the CRS displays. Therefore, American the phrase ‘‘before booking conforms our rules to the Department’s argued that to implement the oral notice existing practice of imposing a notice transportation’’ could be read to imply requirement, the Department should requirement when we approve that a carrier need only disclose the mandate improvements to the CRS applications for code-share authority. information sometime before the displays. Our decision to limit this rule to sales transportation is booked. Current policy Decision and calls made in the United States is has been to require disclosure in any consistent with our overall policy of communication, and American supports We have decided to make final the limiting this type of rule to transactions continuation of that policy. American proposal that the seller must tell the that take place in the United States. (For recommended that the Department consumer, before booking example, the Department’s recently- make clear that the disclosure must transportation, that the transporting adopted rule on special event tours occur during any oral communication carrier is not the carrier whose covers only tours in interstate air that offers or refers to a code-sharing designator code will appear on the transportation, or in foreign air flight, regardless of whether a booking is ticket and must also identify the transportation originating at a point in made by the prospective customer. transporting carrier. We have decided to the United States. (See 59 FR 61508 TWA found American’s proposal apply the rule to carriers and ticket (November 30, 1994), 14 CFR Part 381.) reasonable because many consumers agents to ensure that the notice reaches We disagree with the arguments that the would be making multiple calls to all consumers of air transportation. rule should apply to sales made decide which carrier they should use. The rule is meant both to amend and overseas, because such an application Qantas complained that the proposed to clarify the Department’s existing might conflict with foreign consumer rule would require notice to the same policy of requiring that customers be protection measures that would make potential customer every time there was informed ‘‘in any direct oral implementation of this rule impractical. contact between a seller and purchaser. communication’’ of a code-sharing However, in view of the comments, we Qantas argued that only one oral arrangement. As for American’s request will clarify the rule. notification should be required to the for a clarification of the phrase ‘‘in any The rule will require four types of same consumer. direct oral communication,’’ it disclosure: TWA claimed that the proposed continues the Department’s existing 1. Notice in printed or electronic requirement is inadequate because it policy that requires notice ‘‘in any schedules: The rule will require carriers could be delivered at any time prior to direct oral communication’’ concerning to provide certain information regarding the actual booking of the transportation. a code-shared flight. The phrase ‘‘before flights to, from, or within the United According to TWA, notice should be booking transportation’’ reflects the States to schedule publishers like the offered at the first instance that the Department’s enforcement policy: Official Airline Guides and CRSs in the schedule is offered. In addition, TWA during a given encounter (phone call, United States, as well as in carriers’ own stated that the Department should visit, etc.) the agent or carrier may not schedules and timetables. clarify that providing the disclosure to wait until after the consumer has 2. Oral notice: The requirement to the person requesting schedule/booking decided to make the reservation or give oral notice will apply to information on behalf of the actual purchase the ticket and disclose the discussions in the United States, consumer (e.g., a secretary acting for an code-sharing arrangement only when including all calls placed from the executive) fulfills the requirements of reading back the flight information. United States, including those that are the rule. Instead, the disclosure must be made at

VerDate 03-MAR-99 09:14 Mar 12, 1999 Jkt 183247 PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 E:\FR\FM\15MRR2.XXX pfrm02 PsN: 15MRR2 12846 Federal Register / Vol. 64, No. 49 / Monday, March 15, 1999 / Rules and Regulations the time that the schedule information According to American, written notice reservation confirmation number is being provided to the consumer will help the passenger at several provided to them orally at the time they during the ‘‘information’’ and ‘‘decision- critical points, such as at check-in or book the flight. United therefore making’’ portion of the conversation, as when boarding the aircraft. Northwest suggested that the Department allow TWA and Delta recognize. We therefore requested that the Department permit passengers to waive the right to written reject Northwest’s argument that carriers to use a standard prepared notice. ASTA asserted that written disclosure should only be required notice that contains a cross-reference notice should be required when an during the booking process. list of ranges of a carrier’s flight agent obtains a document confirming Furthermore, the term ‘‘booking’’ has no numbers that are code-share services the purchase. According to ASTA, the meaning that departs from current similar to the way carriers now identify term ‘‘provide’’ notice as used in policy, since it encompasses a code-share carriers in the Official proposed section 257.5(c) must be reservation. Airline Guides. interpreted to mean ‘‘give, transmit or Moreover, none of the commenting In contrast, British Airways, Delta, send’’ to account for non-face-to-face parties, except for Qantas, claimed that and RAA opposed the written notice transactions. In addition, ASTA asked this requirement would impose an requirement. They argued that it would the Department to clarify that an agent undue financial or administrative impose substantial financial and who provides written notice to the burden. The comments support the administrative burdens. Delta argued purchaser of the ticket along with the Department’s belief that agents can that the written notice would ticket has complied with the rule, even already find the information needed to complicate and lengthen the ticket if the purchaser is not the actual inform prospective travelers properly. transaction and result in substantial traveler. TWA wanted the Department to delays at airport ticket counters and In contrast, American argued that clarify that the requirements of the rule gates. written notice would not seriously affect are fulfilled by disclosure to persons Continental and System One stated ticketless travel and that the efficiencies acting on behalf of a consumer. The rule that written notice should be given at of ticketless travel will continue to requires a seller to disclose information the time an itinerary or ticket is issued justify its development even if carriers only to whomever is booking the and opposed separate written notice are required to give written notice. transportation, and does not require a where no itinerary or other document is American claimed that much of the seller to seek out, and communicate issued prior to airport check-in. USAir efficiency of ticketless travels results orally directly with, anyone else. argued that written disclosure should be from automating the functions required only if an itinerary is provided Written Notice represented by the ticket, not by and claimed that updating software for eliminating the piece of paper itself. The NPRM proposed to require other written notice would take six According to American, none of the written notice of the transporting months. Where no itinerary is issued, costly features of issuing tickets, such as carrier’s identity in conjunction with USAir argued that a separate written accounting, tracking, or security, applies the sale of any air transportation in the notice is costly and of minimal benefit to the written notice requirement, and United States that involves a code- to the consumer who has already the notice can presumably be delivered sharing arrangement or long-term wet received oral notice and purchased the physically to the passenger by mail, by lease. If a separate itinerary is issued service. ASTA stated that in the case of telecopier, or even by electronic mail. with the ticket, the itinerary would have travel agents making courtesy bookings Some parties voiced concerns with to contain a legend that states ‘‘operated of frequent flyer awards, the airlines the technical drafting of the written by’’ followed by the name of the should be responsible for providing the notice. United urged the Department to transporting carrier for any flight written itinerary with the notice of accept language equivalent to ‘‘operated segment on which the designator code code-share details, because the tickets by’’ such as ‘‘via.’’ Galileo also wanted is not that of the transporting carrier. If themselves are issued by the airlines. the Department to make clear that no itinerary is issued, the rule would TWA suggested that the Department issuance of only a mini-itinerary, require a separate written notice that clarify that written notice is to be given bearing the legend ‘‘VIA XYZ AIRLINE’’ clearly identifies the transporting carrier at the earliest point in the reservation would satisfy any written notice for any such segment. process that a document is transferred to requirement. In addition, Galileo TWA, IAPA, Northwest, and United the consumer. In addition, TWA wanted the Department to make clear supported the written notice suggested that the Department consider that no special typeface or underlining requirement. American supported expanding the role of electronic mail will be required for the written notice, written notice so long as it is to be given and telecopier in reservations. TWA because it would cost more than $25 at time of ticketing. American noted that asserted that the code-share information million to purchase replacement three CRSs—SABRE, Galileo should be included at the earliest point printers for all Apollo subscribers. International, and System One—each in the exchange of electronic ASTA, American, SwissAir, TWA, has indicated it can produce itineraries information as is possible (e.g., when and Qantas stated that the term ‘‘time of with the required disclosure. Thus, the agent transmits a list of schedule sale’’ needs to be clarified. American American argued that the cost of a choices to the consumer). stated that in industry parlance ‘‘time of separate notice to passengers who are United, Delta, and ASTA contended sale’’ could be construed as the time of not already receiving a printed itinerary that the rule must accommodate making a reservation rather than the seems likely to be minimal. In ticketless travel. United stated that time when the ticket is presented. American’s view, moreover, the benefit code-shared service sold as a ticketless According to American, written notice of a written notice is that it stays with product will be accompanied by a should be given when the ticket is the passenger, whereas an oral notice written notice like the itinerary card presented to the consumer. United, given to someone making travel that accompanies a ticket. United similarly, assumed that ‘‘time of sale’’ arrangements for a business traveler suggested that a considerable percentage means when the ticket is presented. may never reach a passenger at all, or of customers using ticketless travel ASTA too assumed that ‘‘time of sale’’ a passenger may forget about the code- would not want a written notice, but refers to ‘‘ticket issuance’’, which share before embarking on the trip. would prefer to rely entirely on the happens when the final itinerary is

VerDate 03-MAR-99 15:49 Mar 12, 1999 Jkt 183247 PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 E:\FR\FM\15MRR2.XXX pfrm01 PsN: 15MRR2 Federal Register / Vol. 64, No. 49 / Monday, March 15, 1999 / Rules and Regulations 12847 normally printed, and it observed that time when the ticket is presented. of written notice. We will amend the this is also the point, in credit card Agents taking reservations often refer to language in section 257.5(c)(1) as transactions, at which the purchaser is ‘‘selling’’ a seat when no money has suggested by ASTA.13 Fourth, regarding charged for the ticket. SwissAir changed hands. Therefore, merely Galileo’s concern about typefaces, we suggested that the Department should making a reservation without are not prescribing any particular type- define the term ‘‘sale’’ to mean the consummating a sale will not trigger the size or requiring bold lettering. Fifth, delivery of a ticket or itinerary to the written notice requirement. We will some commenters expressed concern passenger, whichever occurs first. clarify section 257.5(c) by substituting regarding how this rule will affect the Qantas claimed that the phrase ‘‘at the ‘‘purchase’’ for ‘‘sale.’’ trend toward ticketless travel. On time of sale’’ should be replaced with a We will also add two paragraphs: one January 19, 1996, the Department requirement that prior to or upon the to account for ticketless travel and cases published a Federal Register notice receipt of the ticket, the consumer be where there is not enough time for the seeking comment on passenger notice provided with the written notice. written notice to be mailed, the other to requirements as applied to ticketless Qantas also asked the Department to allow for delivery of the written notice travel; see 61 FR 1309. Sixth, we do not amend the rule to allow carriers and by telecopier, e-mail, or other means at accept United’s suggestion that we agents to provide notice either in an the purchaser’s request. Paragraph (3) allow passengers to waive the right to itinerary or on another piece of paper. provides for mail delivery of the written written notice. Passengers might not notice along with the ticket when understand what rights they were Decision transportation is purchased far enough waiving, and we wish to avoid disputes We will require separate written in advance of travel. We expect sellers over whether notice was waived or not. notice, which can be included on the of air transportation to make a Seventh, as for TWA’s concern traveler’s itinerary. We agree with reasonable assessment of whether or not regarding the timing of the requirement American that this requirement will enough time remains for mailing based in the exchange of electronic make it more likely that the passenger on their experience with the United information, the requirement is the knows about the code share at critical States Postal Service. Paragraph (3) same as with telephone transactions: junctures. The passenger will have provides for delivery of the written notice in schedules, before booking either an itinerary or a separate notice notice at the airport if time does not transportation, and then written notice that will serve as a reminder at all times allow for advance delivery by mail or at the time of purchase as in Paragraph before departure. otherwise. (3) of the rule. Eighth and finally, we do Moreover, this rule should not be Paragraph (3) also accounts for not adopt Northwest’s suggestion that unduly burdensome or entail more than delivery of the written notice in the case the Department permit carriers to use a minimal additional costs, since many of ticketless travel. Consistent with our standard prepared notice. We do not sellers already provide written policy on other passenger notices, see believe that such a notice would inform itineraries. American’s comments 62 FR 19473 (April 22, 1997), we will travelers of the transporting carrier as confirmed that SABRE already prints require the written notice of the effectively as the more specific notice out the information the Department transporting carrier’s identity to be because the latter would name the would require under the proposed rule given to ‘‘ticketless’’ passengers no later transporting carrier. for airline personnel and travel agents. than the time that they check in at the Furthermore, Galileo enables Apollo airport for the first flight in their Notice in Schedules subscribers to generate a standard form itinerary. Of course, nothing prohibits The NPRM proposed that, in written itinerary/invoice document that sellers of air transportation from or electronic schedule information includes the name of the marketing providing this written notice at an provided by carriers in the United States carrier and also a statement such as earlier juncture, such as along with any to the public, the Official Airline Guides ‘‘OPERATED BY XYZ AIRLINE’’ as well itinerary they send the passenger. We and comparable publications, and, as a mini-itinerary. On the other hand, encourage sellers to do whatever they where applicable, computer reservation the opposition (British Airways, Delta, can to see that passengers receive the systems, carriers involved in code- and USAir) did not substantiate their best possible notice, as early as possible. sharing arrangements or long-term wet claims of financial and administrative Paragraph (4) allows for delivery of leases ensure that an asterisk or other burden. USAir provided no estimate of the written notice of code-sharing easily recognizable mark identifies each its costs for the programming changes. service other than by mail at the flight in scheduled passenger air Since a significant portion of tickets is passenger’s request. This paragraph transportation on which the designator issued and distributed by travel agents offers carriers and ticket agents greater code is not that of the transporting and many other tickets are sent by mail, flexibility in meeting the written notice carrier. we doubt that our rule will cause requirement. Galileo stated that its current Apollo significant passenger delays at airport Several points raised warrant displays appear to be consistent with counters. clarification. First, in response to the proposed requirement, and Having reviewed the technical ASTA’s concern regarding the liability participating carriers and Apollo drafting comments, the Department has of travel agents making courtesy subscribers should be able to comply. decided that the use of ‘‘via’’ in place of bookings of frequent flyer awards, ASTA and American suggested ‘‘operated by’’ would be ambiguous, whoever issues the ticket is responsible requiring that code-shared services be since it does generally connote ‘‘by way for giving the written notice. Second, indicated in CRSs by a double-airline of an intermediate point’’ as noted by ASTA asked that the Department code. ASTA suggested that the first TWA. address the case where the purchaser We used the term ‘‘time of sale’’ in the and the actual traveler are not the same. 13ASTA suggested that the last sentence of NPRM in order to accommodate We clarify that notice with the ticket is proposed section 257.5(c)(1), which states that the ticketless travel. We acknowledge acceptable even if the purchaser is not indicated form of notice will ‘‘satisfy the requirement of the preceding sentence,’’ should American’s concern that ‘‘time of sale’’ the same as the actual traveler. Third, state that the form of notice will satisfy ‘‘the could be misconstrued as the time of the Department is not requiring an requirement of this subparagraph,’’ as does the making a reservation rather than the itinerary in particular, only some form parallel language of section 257.5(c)(2).

VerDate 03-MAR-99 09:14 Mar 12, 1999 Jkt 183247 PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 E:\FR\FM\15MRR2.XXX pfrm02 PsN: 15MRR2 12848 Federal Register / Vol. 64, No. 49 / Monday, March 15, 1999 / Rules and Regulations displayed code should indicate ‘‘which asterisk would have to lead to a means and under a code-sharing arrangement carrier is in fact operating the flight.’’ of determining these names, as is in the same city-pair market. United American estimated that the double- currently done in the Official Airline proposed that a notice would not be airline code suggestion could be Guides and in all carrier timetables of needed in this situation. USAir accomplished with under 200 hours of which we are aware. supported United’s position on this reprogramming and suggested that it issue. Advertising would be easier for SABRE to show the American recommended that the transporting carrier’s code second. The NPRM proposed to require Department clarify the proposal to ASTA (supported by Township Travel) notice, in any advertisement for any require that any advertising, no matter also suggested that all code-shared service in a city-pair market that is where it occurs, that relates to a city- services be displayed only once. provided under a code-sharing pair in which service is provided by a American has filed a petition to require arrangement or by long-term wet lease, code-sharing arrangement must make this in another docket. Alaska Airlines, that clearly indicates the nature of the the required disclosures.14 TWA stated Rogal Associates, and TWA supported service and identifies the transporting that the Department should define the double-airline code suggestion. carrier(s). ‘‘service’’ in the phrase ‘‘service in a USAir, British Airways, Continental, USAir, Delta, United, and British city-pair market’’ so that both price and System One, United, and Galileo Airways supported the advertising destination advertising must identify generally opposed this suggestion, proposal as long as the requirement is the transporting carrier. TWA suggested because it is beyond the scope of this limited to printed advertisements, that the Department rephrase proposed proceeding. Several parties claimed that because the cost of including the section 257(d) to state ‘‘In any it would be costly and force the required information in radio and advertisement of fares or service in a elimination of other useful information television advertisement would be city-pair market’’. from CRS displays, and that it would be exorbitant, and the need is unsupported Decision impracticable for blocked-space in light of the other NPRM provisions. arrangements where each carrier TWA questioned why radio or TV We believe that the basic provision is independently markets its seats on a advertising should be excluded and necessary to ensure that prospective flight. Galileo estimated that it would noted that even in a TV advertisement, consumers are informed of code-sharing take 800 person hours of reprogramming notice of code-sharing could be scrolled arrangements or long-term wet leases. work to redesign the Apollo screen to over the video. American also argued There is a strong public interest in accommodate two codes for a single that there is no basis for limiting the consumers knowing the nature of the flight. Although Worldspan took no requirement to printed advertisements. transportation advertised before they position on the merits, it opposed Continental and System One supported begin arranging a trip. As previously additional requirements concerning the the requirement as written. Galileo stated, the rule will only apply to screen display. stated that the requirement appears not advertising in the United States. TWA said that the name of the code- to affect CRS vendors. However, the comments have share carrier should also be included in RAA opposed the requirement, persuaded us to modify the rule. For the CRS display or timetable schedule, claiming that the benefits appear to be print media, the rule will require notice rather than merely displaying an limited. RAA assumed that the in reasonably sized type (e.g., not in asterisk, which would have little requirement would not only apply to air fine-print fare conditions) specifically meaning to the consumer. TWA carrier advertisements, but to all identifying the transporting carrier. proposed that the Department require advertising, which included air travel. Printed advertisements holding out that the explanation for the asterisk be Some carriers sought clarification of service to a group of points where some placed in close proximity to its the proposed requirement in cases points are served by a code-sharing or appearance in the text. Omega stated where both code-shared and direct wet-lease arrangement must identify also that the ‘‘asterisk or . . . other mark’’ service are offered in a market. each such arrangement. On the other will not mean anything to the average Northwest, which supported the hand, for broadcast media, the consumer. advertising requirement, assumed that disclosure of a code-sharing or wet lease when carriers advertise service to a arrangement can be generic; for Decision group of points and all points are served example, the following statement: The Department will clarify the by the same code-sharing arrangement, ‘‘Some services are provided by other proposed rule by requiring that carriers it would be sufficient to make a airlines.’’ We accept TWA’s suggestion provide information disclosing the generalized statement. Furthermore, that in a TV advertisement, a generic corporate name of the transporting Northwest assumed that if some points notice such as the one noted above may carrier as proposed in the SNPRM. We are served by code-share and others are be scrolled over the video in a legible will not address any proposals regarding served directly, the carrier may use an fashion, or it may be verbal. The CRS displays, including the double- asterisk or similar device to identify the requirement applies to all advertising, airline code proposal, because they are code-sharing services. In cases where a as assumed by RAA. outside the scope of this proceeding. carrier serves a point both by code-share Northwest presented three scenarios The NPRM did not propose changes to and directly, Northwest assumed that that would trigger the disclosure or seek comments on CRS displays. As the carrier may state that some of the requirement. First, Northwest assumed for TWA’s and Omega’s concern that the flights are operated by another carrier. that when a carrier advertised service to asterisk does not mean anything to the United has no objection to the a group of points and all points are average consumer, the consumers do not identification of affiliated commuters in served by the same code-sharing see CRS screens, and the travel agents print ads as long as adequate time is that do see them are familiar with the allowed for implementation (six 14 We also received on July 5, 1995, a letter from meaning of the asterisk. As for months). However, United also Gayle Michaels, American’s Advertising Manager, discussing the proposed ruling on advertising of timetables distributed to consumers, maintained that the intent of the rule is code shares and claiming , among other things, that this provision requires that the name(s) unclear where a carrier is operating under certain situations the rule would be difficult, of the carrier be disclosed, so the services both with its own equipment complex or unduly burdensome.

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AAA passengers. service in the advertisement is a suggested that if equipment is a Northwest code-share and some is passenger concern, then perhaps the Decision provided by Mesaba and the rest is aircraft type should be identified in The Department finds all of these provided by Simmons, then asterisks or every itinerary, not just those involving proposals outside the scope of this other symbols must identify which code-sharing arrangements. United service is provided by which carrier. stated that the suggestion is beyond the proceeding. In addition, we believe that Second, Northwest assumed that if scope of this proceeding and noted that our new disclosure requirements will some points are served by code-share this information is available in assure that consumers receive notice and others are served directly, the schedules and CRS displays to those sufficiently ahead of time to make carrier may use an asterisk or similar passengers who want the information. refunds and notification beyond the reservation and ticketing process device to identify the code-sharing 3. Treatment of Frequent Flyer Miles services. We find the use of an asterisk unnecessary. However, our decision not acceptable. However, as in the first AAA suggested requiring notice when to incorporate a refund provision now scenario, if the service is provided by and if frequent flyer miles are affected does not mean that carriers are free to more than one code-sharing carrier, an adversely by a code-sharing apply refund penalties to passengers advertisement may have to display arrangement. who are not given notice of code-shared separately-numbered footnotes (e.g., 4. Airport Signs service before purchasing transportation footnote 1 next to some cities will refer and who choose to cancel when they do British Airways, Qantas, and USAir to a note that states service is by discover the actual operator of their complained that some airport operators Mesaba, and footnote 2 next to other cause passenger confusion by denying flight. Depending on the circumstances, cities will say the service is by some carriers adequate signs for their refusal to provide refunds in such a Simmons.) Where service is provided by code-sharing flights in the terminal situation could be a violation of the two or three different carriers, a single building. They suggested that the contract of carriage or an unfair or generic footnote applying to all cities Department consider requiring airports deceptive practice within the meaning that states ‘‘Service operated by Mesaba to let airlines post signs to direct of 49 U.S.C. 41712 (previously § 411 of Aviation or Simmons Airlines,’’ is not passengers to the right terminal, the Federal Aviation Act). We encourage acceptable, since the reader has no way counters, or gates. Qantas argued that it airports to permit carriers to post signs to determine the name of the carrier that is just as important from a passenger for their code-sharing flights to prevent is operating the service in the individual viewpoint to find the right check-in passenger confusion. markets. Finally, where a carrier serves a point counter and gate at the correct terminal Effective Date both by code-share and directly, for a code-shared service as it is to be Northwest assumed that the carrier may informed of the name of the carrier The NPRM proposed that the final state that some of the flights are operating that service. USAir rule be effective 60 days after operated by another carrier. Northwest acknowledged that the scope of the publication. Several commenters is correct as long as the name of the NPRM did not encompass new rules requested more time. USAir stated that transporting carrier is provided. applicable to airports, but it requested it needed one year for the wet-lease that the Department address this issue requirement, six months for the written New Proposals in the final rulemaking decision, even if notice requirement, and six months to a Commenters offered several new merely in an advisory manner, arguing year’s time to update its PACER proposals as follows: that this could obviate more direct reservation system to accommodate the regulatory action. The City of 1. Notification Beyond the Reservation SNPRM proposal on corporate names. Philadelphia opposed the airport sign SwissAir stated that it needs 90 days, and Ticketing Process suggestion on the grounds that adequate and Lan Chile stated that it needs three IAPA suggested that in addition to the notice of code-shared flights is not the months. United stated that it could Department’s proposal, notification of responsibility of airports but of airlines. comply within 60 days assuming the code-sharing arrangements should also In addition, the City of Philadelphia Department does not adopt substantive be required at airport check-in (whether contended that the proposal is outside changes in its notification requirement at the ticket counter or at the gate), the scope of this proceeding and that the during boarding and announcements at Department should go no further than beyond those contained in the proposal. the gate, and on board aircraft. making an advisory reference to airport Delta stated that if the Department According to IAPA, these ‘‘last chance’’ signs in its final rulemaking decision. requires carriers to issue a written announcements will inform the statement when itineraries are not 5. Refunds passengers of the actual operator of the issued or requires changes in the ticket flight and allow them to forego the flight IAPA, ASAP, and Mr. Pevsner format, it would need a six-month if they do not want to fly on the suggested that refunds should be effective date. In the alternative, Delta transporting carrier. available to consumers who object to the suggested that the Department make the code-sharing or wet-lease arrangements. rule effective within 60 days with 2. Notice of Aircraft Type IAPA stated that this rule would create respect to issues unrelated to the written AAA, IAPA, ASAP, and Frontier an incentive for airlines to ensure that notice requirement and defer the issue suggested requiring notice of aircraft passengers are fully informed as to the of written notice pending additional type. IAPA, ASAP, and Frontier asserted transporting carrier before they arrive at input from the industry.

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Decision cost through the loss of productive time while still increasing costs. On the other The final rule will be effective 120 for the time spent in listening to the hand, the Department has rejected the days after publication. Some of the notification. Using assumptions of 15 alternative of requiring the written commenters made it clear that a 60 days seconds of additional ‘‘talk time’’ per notification on the ticket coupon. In would not be sufficient for compliance. telephone call, an average of 2.1 phone effect, this costly disclosure would calls per ticket, and an estimate of 48.6 represent a third level of consumer However, the commenters did not million tickets involved in code-sharing notification that is not warranted at this provide enough detail to justify arrangements in 1997, the Department time. allowing any more time than what we has estimated that travel agents and shall provide here. Small Business Impact airline ticket agents will expend an Regulatory Analyses and Notices additional 339,995 hours and 84,999 The Department has evaluated the hours, respectively, to meet the effects of this rule on small entities. I The Department has determined that certify that this rule will not have a this action is not an economically requirements of this rule. Adding the cost of additional telephone line significant economic impact on a significant regulatory action under substantial number of small entities. Executive Order 12866 and it has not connection time, the annual increase in operating costs amounted to $12 million Although many ticket agents and some been reviewed by the Office of for the travel agent industry and $3.4 air carriers are small entities, the Management and Budget. It also is million for the airline industry. For Department believes that the costs of significant under the Department’s airline passengers, the annual increase notification will not be burdensome on Regulatory Policies and Procedures in costs associated with the loss of these two groups. We believe that travel because of congressional and public productive time is estimated at $11.8 agents already have an incentive to interest. This rule does not impose million. provide this information to their unfunded mandates or requirements While the Department would prefer customers and many have found a low- that will have any impact on the quality not to take actions which have the cost means of providing it. of the human environment. The potential to increase the cost of travel or Year 2000 Problem Department has placed a regulatory result in a loss of productive time, it evaluation that examines the estimated believes these amounts are minimal and In an effort to ensure that our costs and impacts of the rule in the not prohibitive when considered on a regulations do not interfere or delay docket. per ticket basis—an average increase of solutions for the Year 2000 Problem Summary of Regulatory Analysis approximately $.56 per ticket. At the (Y2K), the Department has decided that, same time, the Department has found in preparing proposed and final rules Based upon a detailed regulatory that it is difficult to quantify the benefits that mandate business process changes analysis, the Department has of this rule. The Department recognizes and require modifications to computer determined that this rule will result in that code-sharing arrangements and the systems between now and July 1, 2000, increased costs. However, the number of code-sharing trips are likely the Department will discuss those rules Department has also decided that the to increase in the future. It also specifically with reference to Y2K enhanced notification benefits of the recognizes that the cost for fully requirements and determine whether rule justify the increased costs. informing prospective travelers will the implementation of those rules With regard to cost, the Department impact different segments of the travel should be delayed to a time after July 1, finds that this rule will result in industry and the public to varying 2000. increased implementation costs as well degrees. However, the Department has Since the Department does not have as increased operating costs for U.S. determined that such arrangements are detailed knowledge about the Y2K airlines, foreign airlines, computer increasing and becoming more complex status of the systems that will need to reservations systems (CRSs), and travel especially in international operations at be changed as a result of this rule, we agents doing business in the United the same time that other marketing attempted to gauge the effect based on States. The implementation costs will strategies are being developed. This fact a review of statements from Annual mainly affect the airlines and CRSs by emphasizes the paramount importance Reports, 10–K and 10–Q Statements requiring changes to computer systems that the traveling public must be fully filed with the Securities and Exchange for the electronic notification. The informed. This benefit clearly outweighs Commission, news reports, press Department has estimated that these the cost increases and the Department releases, and other documents. We implementation costs could range from further believes that these costs will researched this issue with regard to four $432,000 to $2.3 million. decrease in the future as consumers and computer reservations systems, the nine However, the Department has frequent travelers adjust and as new, largest airlines, one smaller airline, and determined that these implementation less-costly, channels of distribution five organizations closely associated costs are not prohibitive since they are become available (such as the Internet). with airline computerized systems and one-time, nonrecurring costs that will In analyzing the impact of this final databases. While this information did result in benefit for a large number of rule, the Department considered several not reflect detailed technical travelers in the future. alternatives to this final rule. While assessments, it allowed us to establish a The Department has also found that most of the alternatives involved less broad baseline against which to judge this rule will result in increased enhanced notification both oral and the issuance of our rule. operating costs for the airlines, travel written, one alternative considered the Our analysis has shown a widespread agents and air travelers. Most of the more costly requirement of written effort involved in the Y2K program for increased operating costs are notification on the ticket coupon. The air transportation. In general, most of attributable to an increase in the amount Department has decided that the level of the companies we examined have stated of ‘‘talk time’’ and telephone connection enhanced notification as contained in that they expect to be Y2K-compliant in time necessary for airline ticket agents the final rule provides the best net a timely manner. However, most also and travel agents to provide the proper public benefits. A more limited reflect caution by noting that there are disclosure to prospective air travelers. approach would have provided only a no guarantees or assurances that all At the same time, air travelers incur a partial response to consumers’ needs systems will be ready and that their

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The annual reporting burden lease, and that they disclose to Department has determined that it is in hours for this data collection is consumers the transporting carrier’s the public interest to issue this rule now estimated at 424,994 hours for all travel identity. and not delay its implementation to a agents and airline ticket agents and time after July 1, 2000. The number and 424,994 for air travelers based on 15 § 257.2 Applicability. type of marketing practices that include seconds per phone call and an average This part applies to the following: code-sharing arrangements, change-of- of 2.1 phone calls per trip. (a) Direct air carriers and foreign air gauge services, marketing alliances and Comments are invited on: (a) Whether carriers that participate in code-sharing other marketing agreements, especially this collection of information (third arrangements or long-term wet leases among multiple carriers and involving party notification) is necessary for the involving scheduled passenger air international operations have grown proper performance of the functions of transportation; and substantially. These agreements are the agency, including whether the (b) Ticket agents doing business in the likewise expected to continue to grow in information will have practical utility; United States that sell scheduled the future. At the same time, they have (b) the accuracy of the agency’s estimate passenger air transportation services increased in complexity as well. For of burden of the proposed collection of involving code-sharing arrangements or these reasons, the Department has information; (c) ways to enhance the long-term wet leases. determined that it is now essential to quality, utility, and clarity of the issue this disclosure rule so that information to be collected; and (d) § 257. 3 Definitions. prospective travelers have as clear and ways to minimize the burden of the As used in this part: complete information as possible prior collection of information on the (a) Air transportation means foreign to buying air transportation as well as respondents, including through the use during the journey. air transportation or interstate air of automated techniques or other forms transportation as defined in 49 U.S.C. Federalism of information technology. Comments 40102 (a)(23) and (25) respectively. should be sent to Jack Schmidt, Office The Department has analyzed this (b) Carrier means any air carrier or of Aviation and International Economics rule under the principles and criteria foreign air carrier as defined in 49 (X–10), Office of the Assistant Secretary contained in Executive Order 12612 U.S.C. 40102(2) or 49 U.S.C. 40102(21), for Aviation and International Affairs, (‘‘Federalism’’) and has determined that respectively, that is engaged directly in Office of the Secretary, U.S. Department the rule does not have sufficient scheduled passenger air transportation, of Transportation, 400 Seventh St. SW, federalism implications to warrant the including by wet lease. Washington, DC 20590, (202) 366–5420 preparation of a federalism assessment. (c) Code-sharing arrangement means or (202) 366–7638 (FAX) Paperwork Reduction Act an arrangement whereby a carrier’s List of Subjects designator code is used to identify a This rule contains information flight operated by another carrier. 14 CFR Part 257 collection requirements that are being (d) Designator code means the airline submitted to the Office of Management Air carriers, Consumer protection, designations originally allotted and and Budget (OMB) for approval under Foreign air carriers, Reporting and administered pursuant to Agreements the Paperwork Reduction Act of 1995. recordkeeping requirements. CAB 24606 and 26056. In the Notice of Proposed Rulemaking (e) Long-term wet lease means a lease (NPRM) and the Supplemental Notice of 14 CFR Part 399 by which the lessor provides both an Proposed Rulemaking (SNPRM) that Administrative practice and aircraft and crew dedicated to a preceded this rule, the Department procedure, Air carriers, Air rates and particular route(s), and which either: stated that the proposed rule did not fares, Air taxis, Consumer protection, contain information collection Small businesses. (1) Lasts more than 60 days; or requirements that required approval by For the reasons set forth in the (2) Is part of a series of such leases OMB under the then current Paperwork preamble, the Department of that amounts to a continuing Reduction Act. However, the Transportation amends 14 CFR chapter arrangement lasting more than 60 days. requirements under the Paperwork II, subchapters A and F, as follows: (f) Ticket agent has the meaning Reduction Act of 1995 consider third 1. Part 257 is added to read as follows: ascribed to it in 49 U.S.C. 40102(40). party notifications as data collections (g) Transporting carrier means the and thus subject to the regulations. PART 257ÐDISCLOSURE OF CODE- carrier that is operating the aircraft in a Persons are not required to respond to SHARING ARRANGEMENTS AND code-sharing arrangement or long-term a collection of information unless it LONG-TERM WET LEASES wet lease. displays a currently valid OMB control number. This final rule is therefore Sec. § 257.4 Unfair and deceptive practice. 257.1 Purpose. being submitted to the Office of 257.2 Applicability. The holding out or sale of scheduled Management and Budget for review. The 257.3 Definitions. passenger air transportation involving a Department has determined an estimate 257.4 Unfair and deceptive practice. code-sharing arrangement or long-term of the burden hours associated with this 257.5 Notice requirement. wet lease is prohibited as unfair and rule and is requesting comments on its Authority: 49 U.S.C. 40113(a) and 41712. deceptive in violation of 49 U.S.C. estimate. 41712 unless, in conjunction with such Those potentially affected by this rule § 257.1 Purpose. holding out or sale, carriers and ticket include 192 U.S. air carriers, 205 foreign The purpose of this part is to ensure agents follow the requirements of this air carriers, five computer reservations that ticket agents doing business in the part.

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§ 257.5 Notice requirement. transporting carrier a legend that states electronic mail, or any other reliable (a) Notice in schedules. In written or ‘‘Operated by’’ followed by the method of transmitting written material. electronic schedule information corporate name of the transporting (d) Advertising. In any printed provided by carriers in the United States carrier and any other name in which advertisement published in or mailed to to the public, the Official Airline Guides that service is held out to the public. In or from the United States for service in and comparable publications, and, the case of single-flight-number service a city-pair market that is provided under where applicable, computer reservations involving a segment or segments on a code-sharing arrangement or long-term systems, carriers involved in code- which the designator code is not that of wet lease, the advertisement shall sharing arrangements or long-term wet the transporting carrier, the notice shall clearly indicate the nature of the service leases shall ensure that each flight in clearly identify the segment or segments in reasonably sized type and shall scheduled passenger air transportation and the transporting carrier by its identify the transporting carrier[s] by on which the designator code is not that corporate name and any other name in corporate name and by any other name of the transporting carrier is identified which that service is held out to the under which that service is held out to by an asterisk or other easily identifiable public. The following form of statement the public. In any radio or television mark and that the corporate name of the will satisfy the requirement of this advertisement broadcast in the United transporting carrier and any other name paragraph (c)(1): States for service in a city-pair market under which that service is held out to Important Notice: Service between XYZ that is provided under a code-sharing the public is also disclosed. City and ABC City will be operated by Jane arrangement or long-term wet lease, the (b) Oral notice to prospective Doe Airlines d/b/a QRS Express. advertisement shall include at least a consumers. In any direct oral (2) If no itinerary is issued, the selling generic disclosure statement, such as communication in the United States carrier or ticket agent shall provide a ‘‘Some services are provided by other with a prospective consumer and in any separate written notice that clearly airlines.’’ telephone calls placed from the United identifies the transporting carrier by its States concerning a flight that is part of corporate name and any other name PART 399ÐSTATEMENTS OF a code-sharing arrangement or long-term under which that service is held out to GENERAL POLICY wet lease, a ticket agent doing business the public for any flight segment on 2. The authority citation for part 399 which the designator code is not that of in the United States or a carrier shall tell is revised to read as follows: the consumer, before booking the transporting carrier. The following transportation, that the transporting form of notice will satisfy the Authority: 49 U.S.C. 40101, 40102, 40105, carrier is not the carrier whose requirement of this paragraph (c)(2): 40109, 40113, 40114, 40115, 41010, 41011, 41012, 41101, 41102, 41104, 41105, 41106, designator code will appear on the Important Notice: Service between XYZ 41107, 41108, 41109, 41110, 41111, 41112, ticket and shall identify the transporting City and ABC City will be operated by Jane 41301, 41302, 41303, 41304, 41305, 41306, carrier by its corporate name and any Doe Airlines d/b/a QRS Express. 41307, 41308, 41309, 41310, 41501, 41503, other name under which that service is (3) If transportation is purchased far 41504, 41506, 41507, 41508, 41509, 41510, held out to the public. enough in advance of travel to allow for 41511, 41701, 41702, 41705, 41706, 41707, (c) Written notice. Except as specified advance delivery of the ticket by mail or 41708, 41709, 41711, 41713, 41712, 41901, in paragraph (c)(3) of this section, at the otherwise, the written notice required 41902, 41903, 41904, 41905, 41906, 41907, time of purchase, each selling carrier or 41908, 41909, 42111, 42112, 44909, 46101, by this part shall be delivered in 46102. ticket agent shall provide each advance along with the ticket. If time consumer of scheduled passenger air does not allow for advance delivery of § 399.88 [Removed] transportation sold in the United States the ticket, or in the case of ticketless 3. Section 399.88 is removed. that involves a code-sharing travel, the written notice required by arrangement or long-term wet lease with this part shall be provided no later than Issued in Washington, DC on March 8, 1999. the following notice: the time that they check in at the airport (1) If an itinerary is issued, there shall for the first flight in their itinerary. Rodney E. Slater, appear in conjunction with the listing of (4) At the purchaser’s request, the Secretary of Transportation. any flight segment on which the notice required by this part may be [FR Doc. 99–6138 Filed 3–10–99; 1:23 pm] designator code is not that of the delivered in person or by telecopier, BILLING CODE 4910±62±P

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