Federal Aviation Adminis Tration (FAA)

RULES AND REGULATIONS 24275

area; thence west to the intersection of the T h e R ule [4910-13] Louisiana/Texas State line and the Gulf of Mexico control area. This amendment to Subpart F of [Docket No. 17931; Arndt. No. 1112] Part 71 of the Federal Aviation Regu­ (Sec. 307(a), Federal Aviation Act of 1958 lations (14 CFR Part 71) alters the de­ SUBCHAPTER F— AIR TRAFFIC AND GENERAL (49 U.S.C. 1348(a); sec, 6(c), Department of OPERATING RULES Transportation Act (49 U.S.C. 1655(c)).) scription of designated part-time con­ trol zones by deleting the words “Air­ PART 97— STANDARD INSTRUMENT Note.—The FAA has determined that this document does not contain a major proposal man’s Information Manual” from the APPROACH PROCEDURES requiring preparation of an Economic text and substituting therefor the Impact Statement under Executive Order words “Airport/Facility Directory.” Miscellaneous Amendments 11821, as amended by Executive Order Since these amendments are editori­ 11949, and OMB Circular A-107. al in nature and impose no additional AGENCY: Federal Aviation Adminis­ Issued in Fort Worth, Tex., on May burden on any person, notice and tration (FAA), DOT. 23,1978. public procedure hereon are unneces­ ACTION: Final rule. P aul J. B ak er, sary. SUMMARY: This amendment estab­ Acting Director, Southwest Region. D ra fting I nfo rm a tio n lishes, amends, suspends, or revokes [FR Doc. 78-15341 Filed 6-2-78; 8:45 am] Standard Instrument Approach Proce­ The principal authors of this docu­ dures (SIAPs) for operations at certain ment are Richard Carlson, Air Traffic airports. These regulatory actions are [4910-13] Division, New England Region, and needed because of the adoption of new George L. Thompson, Associate Re­ or revised criteria, or because of [Airspace Docket No. 78-NE-13] gional Counsel, New England Region. changes occurring in the National Air­ space System, such as the commission­ A d o ptio n o f t h e A m endm ent ing of new navigational facilities, addi­ PART 71— DESIGNATION OF FEDERAL tion of new obstacles, or changes in air AIRWAYS/ AREA LOW ROUTES, Accordingly, pursuant to the author­ traffic requirements. These changes CONTROLLED AIRSPACE, AND RE­ ity delegated to me by the Administra­ are designed to provide safe and effi­ PORTING POINTS tor, Subpart F of Part 7l of the Feder­ cient use of the navigable airspace and al Aviation Regulations (14 CFR Part to promote safe flight operations Alteration of Control Zones 71) is amended, effective 0901 G.m.t., under instrument flight rules at the AGENCY: Federal Aviation Adminis­ June 18,1978. affected airports. tration (FAA), DOT. § 71.171 [Amended] DATES: An effective date for each SIAP is specified in the amendatory ACTION: Final rule. In Subpart F of § 71.171 (43 FR 355) provisions. SUMMARY: This action alters the the following control zone descriptions wording in designated part-time con­ are altered by deleting the words “Air­ ADDRESS: Availability of matters in­ trol zone descriptions from “Airman’s man’s Information Manual” from the corporated by reference in the amend­ Information Manual” to Airport/Fa- text and substituting therefor the ment is as follows: cility Directory.” The designated part- words “Airport/Facility Directory.” F or E x a m in a tio n time control zones’ effective dates and times will be carried in the “Airport/ Bedford, Mass. 1. FAA Rules Docket, FAA Head­ Beverly, Mass. quarters Building, 800 Independence Facility Directory” instead of the Bridgeport, Conn. “Airman’s Information Manual.” Danbury, Conn. Avenue SW., Washington, D.C. 20591; Groton, Conn. 2. The FAA Regional Office of the EFFECTIVE DATE: June 18,1978. Hyannis, Mass. region in which the affected airport is FOR FURTHER INFORMATION Manchester, N.H. located; or CONTACT: Martha’s Vineyard, Mass. 3. The Flight Inspection Field Office Nantucket, Mass. which originated the SIAP. Richard G. Carlson, Operations Pro­ New Bedford, Mass. cedures and Airspace Branch, ANE- New Haven, Conn. F or P urchase 536, Air Traffic Division, Federal Norwood, Mass. Aviation Administration, 12 New Portland, Maine. Individual SIAP copies may be ob­ England Executive Park, Burlington, Presque Isle, Maine. tained from: South Weymouth, Mass. 1. FAA Public Information Center Mass. 01803, telephone 617-273-7285. Worcester, Mass. (APA-430), FAA Headquarters Build­ SUPPLEMENTARY INFORMATION: (Secs. 307(a) Federal Aviation Act of 1958 ing, 800 Independence Avenue SW., (72 Stat. 749; 49 U.S.C. 1348(a)); sec. 6(c), Washington, D.C. 20591; or H ist o r y Department of Transportation Act (49 2. The FAA Regional Office of the Part-time control zone descriptions U.S.C. #655(0).) region in which the affected airport is contained in Subpart F, §71.171 (43 Note.—The Federal Aviation Administra­ located. FR 355) of Federal Aviation Regula­ tion has determined that this document tions Part 71 include the information does not contain a major proposal requiring B y S ubscription that the effective date and time will preparation of an economic impact state­ Copies of all SIAPs, mailed once thereafter be continuously published ment under Executive Order 11821, as every 2 weeks, may be ordered from in the “Airman’s Information amended by Executive Order 11949, and Superintendent of Documents, U.S. Manual.” On May 18, 1978, this infor­ OMB Circular A-107. Government Printing Office, Wash­ mation was transferred to the new Issued in Burlington, Mass., on May ington, D.C. 20402. The annual sub­ “Airport/Facility Directory” and will 18,1978. scription price is $135. no longer appear in the “Airman’s In­ R obert E . W h it t in g t o n , FOR FURTHER INFORMATION formation Manual.” This will necessi­ Director, tate deletion of the “Airman’s Infor­ CONTACT: mation Manual” and the substitution New England Region. William L. Bersch, Flight Proce­ therefor of “Airport/Facility Directo­ [FR Doc. 78-15346 Filed 6-2-78; 8:45 am] dures and Airspace Branch (AFS- ry” in the descriptions. 730), Aircraft Programs Division,

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 24276 RULES AND REGULATIONS Plight Standards Service, Federal notice and public procedure before Longview, TX—Gregg County, VOR Rwy 13 Aviation Administration, 800 Inde­ adopting these SIAPs is unnecessary, (TAC), Amdt. 14. pendence Avenue SW., Washington, impracticable, or contrary to the Longview, TX—Gregg County, VOR/DME D.C. 20591, telephone 202-426-8277. public interest and, where applicable, or TACAN Rwy 31, Amdt. 1. Longview, TX—Gregg County, VOR/DME SUPPLEMENTARY INFORMATION: that good cause exists for making or TACAN Rwy 35, Amdt. 1. This amendment to Part 97 of the some SIAPs effective in less than 30 Mason, TX—Mason County, VOR/DME-A, Federal Aviation Regulations (14 CFR days. Amdt. 1. Part 97) prescribes new, amended, sus­ The principal authors of this docu­ New Braunfels, TX—New Braunfels Munici­ pended, or revoked Standard Instru­ ment are Rudolph L. Fioretti, Flight pal, VOR/DME-A, Amdt. 3. Standards Service, and Richard W. Rocksprings, TX—Edwards County, VOR ment Approach Procedures (SIAPs). Danforth, Office of the Chief Counsel. Rwy 14, Amdt. 1. The complete regulatory description San Antonio, TX—San Antonio Internation­ of each SIAP is contained in official A d o ptio n of t h e A mendm ent al, VOR-A, Amdt. 2. FAA form documents which are incor­ San Antonio, TX—Stinson Municipal, VOR porated by reference in this amend­ Accordingly, pursuant to the author­ Rwy 32, Amdt. 10. ment under 5 U.S.C. 552(a), 1 CFR ity delegated to me, Part 97 of the Waco, TX—James Connally, VOR-A, Amdt. Part 51, and § 97.20 of the Federal Avi­ Federal Aviation Regulations (14 CFR 4. ation Regulations (FARs). The appli­ Part 97) is amended by establishing, Spanaway, W A—Spanaway, VOR/DME cable FAA forms are identified as FAA- amending, suspending, or revoking Rwy 34, Original. Standard Instrument Approach Proce­ Milwaukee, WI—Lawrence J. Timmerman, Forms 8260-3, 8260-4 and 8260-5. Ma­ dures, effective on the dates specified, VOR Rwy 4L, Amdt. 3. terials incorporated by reference are as follows: Milwaukee, WI—Lawrence J. Timmerman, available for examination or purchase 1. By amending §97.23 VOR-VOR/ VOR Rwy 15L, Amdt. 8. as stated above. DME SIAPs identified as follows: The large number of SIAPs, their * * * effective September 21, 1978: The FAA published an amendment complex nature, and the need for a in Docket No. 17890, Amdt. No. 1110 to special format make their verbatim Salt Lake City, UT—Salt Lake City Int’l, Part 97 of the Federal Aviation Regu­ VOR Rwy 16L (TAC), Arndt. 7. publication in the F ederal R eg ister lations (Vol. 43 FR No. 87 Page 19214; Salt Lake City, UT—Salt Lake City Int’l, dated May 4, 1978) under § 97.23 effec­ expensive and impractical. Further, VOR Rwy 16R (TAC), Amdt. 18. tive June 15, 1978, which is hereby airmen do not use the regulatory text Salt Lake City, UT—Salt Lake City Int’l, amended as follows: McGregor,. TX, of the SIAPs but refer to their graphic VOR/DME or TACAN Rwy 34L, Amdt. 4. McGregor Municipal VOR/DME Rwy depiction on charts printed by publish­ * * * effective July 27,1978: 17 Amdt. 3 is cancelled. McGregor, ers of aeronautical materials. Thus, TX, McGregor Municipal VOR Rwy the advantages of incorporation by Prescott, AZ—Prescott Muni., VOR-A, 17 Amdt. 2 remains in effect. reference are realized and publication Amdt. 3. 2. By amending §97.25 SDF-LOC- of the complete description of each Hartford, CT—Hartford Brainard, VOR-A, Amdt. 4. LDA SIAPs identified as follows: SIAP contained in FAA form docu­ * * * effective July 27,1978: ment is unnecessary. The provisions of Wilmington, DE—Greater Wilmington, VOR Rwy 9, Amdt. 2. Tucson, AZ—'Tucson Int’l, LOC BC Rwy this amendment state the affected Wilmington, DE—Greater Wilmington, CFR (and FAR) sections, with the 29R, Amdt. 2. VOR Rwy 32, Amdt. 2. East St. Louis, IL—Bi-State Parks, LOC types and effective dates of the SIAPs. Macon, GA—Herbert Smart Downtown, Rwy 30, Amdt. 3. This amendment also identifies the VOR/DME-B, Orig. Glasgow, KY—Glasgow Muni., SDF Rwy 7, airport, its location, the procedure Greenwood/Wonderlake, IL—Galt Field, Amdt. 1. identification and the amendment VOR-A, Amdt. 4. Lincoln, IL—Logan County, VOR Rwy 3, Saginaw, MI—Tri City, LOC BC Rwy 23, number. Amdt. 2. Amdt. 6. This amendment to Part 97 is feffec- Richmond, IN—Richmond Municipal, VOR 3. By amending §97.27 NDB/ADF tive on the date of publication and Rwy 5, Amdt. 6. SIAPs identified as follows: contains separate SIAPs which have Richmond, IN—Richmond Municipal, VOR * * * effective July 27,1978: compliance dates stated as effective Rwy 23, Amdt. 6. dates based on related changes in the Plymouth, MI—Mettetal, VOR-A, Amdt. 4. Hartford, CT—Hartford-Brainard, NDB-B, National Airspace System or the appli­ Manville, NJ—Küpper, VOR-A, Amdt. 2. Amdt'. 4. cation of new or revised criteria. Some Readington, NJ—Solberg-Hunterdon, VOR- Davenport, IA—Davenport Muni., NDB Rwy SIAP amendments may have been pre­ A, Amdt. 5. 2, Amdt. 9. Utica, NY—Oneida County, VOR/DME Lincoln, IL—Logan County, NDB Rwy,. 21, viously issued by the FAA in a Nation­ Rwy 33, Amdt. 2. Amdt. 1. al Flight Data Center (FDC) Notice to Hickory, NC—Hickory Muni., VOR Rwy 24, Glasgow, KY—Glasgow Muni., NDB Rwy 7, Airmen (NOTAM) as an emergency Amdt. 20. Amdt. 2. action of immediate flight safety relat­ Fayetteville, TN—Fayetteville Muni., VOR/ Jackson, MN—Jackson Muni., NDB Rwy 13, ing directly to published aeronautical DME Rwy 1, Amdt. 2. Amdt. 4. charts. The circumstances which cre­ * * * effective July 13, 1978: Clarksdale, MS—Fletcher Field, NDB Rwy ated the need for some SIAP amend­ 18, Amdt. 3. ments may require making them effec­ Gulkana, AK—Gulkana, VOR Rwy 14, Clarksdale, MS—Fletcher Field, NDB Rwy tive in less than 30 days. For the re­ Amdt. 5. 36, Amdt. 3. Gulkana, AK—Gulkana, VOR Rwy 32, Nashua, NH—Boire Field, NDB-B, Amdt. 9. maining SIAPs, an effective date at Amdt. 5. Utica, NY—Oneida County, NDB Rwy 15, least 30 days after publication is pro­ San Francisco, CA—San Francisco Int’l, Amdt. 8. vided. VOR Rwy 19L, Amdt. 5. Utica, NY—Oneida County, NDB Rwy 33, Further, the SIAPs contained in this Humboldt, NE—Humboldt Muni., VOR/ Amdt. 10. amendment are based on the criteria DME-A, Amdt. 1. Hickory, NC—Hickory Muni., NDB Rwy 24, contained in the U.S. Standard for Chambersburg, PA—Chambersburg Munici­ Amdt. 1. Terminal Instrument Approach Proce­ pal, VOR-DME-A, Original. Forence, SC—Florence City-County, NDB dures (TERPs). In developing these Beeville, TX—Beeville Municipal, VOR/ Rwy 9, Amdt. 8. DME Rwy 12, Amdt. 2. Fayetteville, TN—Fayetteville Muni., NDB SIAPs, the TERPs criteria were ap­ Rwy 1, Amdt. 3. plied to the conditions existing or an­ Jonestown, TX—Bar K Airpark, VOR/ DME-A, Amdt. 1. * * * effective July 13,1978: ticipated at the affected airports. Be­ Junction, TX—Kimble County, VOR-A, cause of the close and immediate rela­ Amdt. 9. Milford, I A—Fuller, NDB Rwy 18, Original. tionship between these SIAPs and Kenedy, TX—Karnes County, VOR/DME- Kerrville, TX—Kerrville Municipal/Louis safety in air commerce, I find that A, Amdt. 4. Schreiner Field, NDB-A, Amdt. 4.

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 RULES AND REGULATIONS 24277 Longview, TX—Gregg County, NDB Rwy 6. By amending § 97.33 RNAV SIAPs sor, Civil Aeronautics Board, 1825 13, Amdt. 8. identified as follows: Connecticut Avenue NW., Washing­ Pleasanton, TX—Pleasanton Municipal, ton, D.C. 20428, 202-673-5035. NDB-A, Amdt. 3. • • • effective July 27,1978: SUPPLEMENTARY INFORMATION: San Antonio, TX—San Antonio Internation­ Prescott, AZ—Prescott Muni., RNAV Rwy al, NDB Rwy 3R, Amdt. 34. 21, Original. Accordingly, the Civil Aeronautics San Antonio, TX—San Antonio Internation­ Wilmington, DE—Greater Wilmington, Board hereby amends 14 CFR Part al, NDB Rwy 12R, Amdt. 18. 221 as set forth below: San Antonio, TX—San Antonio Internation­ RNAV Rwy 9, Amdt. 2. 1. The table of contents is revised by al, NDB Rwy 30L, Amdt. 7. • * * effective July 13,1978: deleting § 221.177, Notice of deliberate Sonora, TX—Sonora Municipal, NDB Rwy overbooking. 18, Amdt. 1. Humboldt. NE—Humboldt Muni., RNAV B. Waco, TX—James Connally, NDB Rwy 17L, Original. § 221.4 [Amended] Amdt. 3. San Antonio, TX—San Antonio Internation­ Waco, TX—James Connally, NDB Rwy 35R, al, RNAV Rwy 30L, Amdt. 6. 2. Section 221.4, Definitions, is Amdt. 4. amended by deleting the definition of (Secs. 307, 313(a), 601, and 1110, Federal "Deliberate overbooking.” * * * effective May 17, 1978: Aviation Act of 1958 (49 U.S.C. 1348, 1354(a), 1421, and 1510); sec. 6(c), Depart­ Pensacola, PL—Pensacola Regional, NDB ment of Transportation Act (49 U.S.C. §221.177 [Deleted] Rwy 16, Amdt. 20. 1655(c)); delegation: 25 FR 6489 and para­ 3. Subpart N is amended by deleting graph 802 of Order FS P 1100.1, as amended §221.177. 4. By amending § 97.29 ILS-MLS March 9,1973.) SIAPs identified as follows: (Secs. 204, 403, 404, and 411, Federal Avi­ * * * effective September 21, 1978: Note.—The Federal Aviation administra­ ation Act of 1958, as amended, 72 Stat. 743, tion has determined that this document 758, 760, and 769 (49 U.S.C. 1324, 1373, 1374, Salt Lake City, UT—Salt Lake City Inti, does not contain a major proposal requiring and 1381).) ILS Rwy 16L, Amdt. 5. preparation of an economic impact state­ Salt Lake City, UT-Salt Lake City Inti, ILS ment under Executive Order 11821, as By the Civil Aeronautics Board. Rwy 34L, Amdt. 35. amended by Executive Order 11949, and OMB Circular A-107. P h y l l is T . K aylor, * * * effective July 27, 1978: Secretary. Oakland, CA—Metropolitan Oakland Int'l, Issued in Washington, D.C., on May TT.S Rwy 29, Amdt. 18. 26,1978. [FR Doc. 78-15407 Filed 6-2-78; 8:45 am] Calverton, NY—Peconic River Plant (Grum­ J ames M . V in e s , man) ILS Rwy 5, Amdt. 8. Chief, Utica, NY—Oneida County, ILS Rwy 15, Aircraft Programs Division. [6320-01] Amdt. 2. [Docket No. 29139; Regulation ER-1050, Utica, NY—Oneida County, ILS Rwy 33, Note.—The incorporation by reference in Amdt. 9] Amdt. 12. the preceding document was approved by Hickory, NC—Hickory Muni., ILS Rwy 24, the Director of the Federal Register on May PART 250— OVERSALES Amdt. 2. 12, 1969. Florence, SC—Florence City-County, ILS [FR Doc. 78-15342 Filed 6-2-78; 8:45 ami Rwy 9, Amdt. 8. Comprehensive Amendment * * * effective July 13,1978: AGENCY: Civil Aeronautics Board. [6320-01] San Francisco, CA—San Francisco Int’l, ILS ACTION: Final rule. Rwy 19L, Amdt. 13. SUMMARY: The Board is adopting Shreveport, LA—Shreveport Regional, ILS CHAPTER II— CIVIL AERONAUTICS new rules designed to minimize the in­ Rwy 13, Amdt. 18. BOARD Longview, TX—Gregg County, ILS Rwy 13, voluntary "bumping” of airline pas­ Amdt. 4. SUBCHAPTER A— ECONOMIC REGULATIONS sengers who hold confirmed réserva­ San Antonio, TX—San Antonio Internation­ tions on oversold flights. The rules re­ al, ILS Rwy 3R, Amdt. 11. [Docket No. 29139; Regulation ER-1051, quire airline personnel not to deny San Antonio, TX—San Antonio Internation­ Amdt. 431 boarding to any passenger against his al, ILS Rwy 12R, Amdt. 7. will until volunteers are first sought to San Antonio, TX—San Antonio Internation­ PART 221— CONSTRUCTION, PUBLI­ give up their reservations willingly in al, ILS Rwy 30L, Amdt. 3. CATION, FILING AND POSTING OF exchange for a compensatory pay­ Waco, TX—James Connally, ILS Rwy 17L, ment. Passengers bumped involuntari­ Amdt. 4. TARIFFS OF AIR CARRIERS AND ly will be entitled to substantially * * * effective May 18,1978: FOREIGN AIR CARRIERS greater compensation than in the past, and eligibility for that compensation is Medford, OR—Medford-Jackson County, AGENCY: Civil Aeronautics Board. expanded. Carriers are also encour­ ILS Rwy 14, Amdt. 8. ACTION: Pinal rule. aged to experiment with other reser­ *■ * * effective May 17,1978: vations and boarding practices that SUMMARY: For the reasons set forth will reduce involuntary bumping. Fi­ Pensacola, FL—Pensacola Regional, ILS in ER-1050, issued contemporaneously nally, the rules require greater public Rwy 16, Amdt. 7. with this rule, the Board is deleting disclosure of boarding procedures and 5. By amending § 97.31 RADAR from 14 CFR Part 221 the require­ passengers’ rights in the event of an SIAPs identified as follows: ments for public disclosure of airline oversold flight. overbooking practices. The require­ * * * effective September 21,1978: DATES: Adopted: May 30, 1978. Effec­ ments are instead being included in 14 tive: September 3,1978. Salt Lake City, UT—Salt Lake City Int’l, CFR Part 250 so that the regulations RADAR-1, Amdt. 14. relating to oversales can be consolidat­ FOR FURTHER INFORMATION CONTACT: * * * effective July 27,1978: ed. DATES: Adopted: May 30, 1978. Effec­ Robert W. Kneisley, Attorney-Advi­ Gulfport, MS—Gulfport Muni., RADAR-1, sor, Civil Aeronautics Board, 1825 Amdt, 1. tive: September 3,1978. FOR FURTHER INFORMATION Connecticut Avenue NW., Washing­ * * * effective July 13,1978: CONTACT: ton, D.C. 20428, 202-673-5035. San Antonio, TX—San Antonio Internation­ SUPPLEMENTARY INFORMATION: al, RADAR-1, Amdt. 21. Robert W. Kneisley, Attomey-Advi- The Civil Aeronautics Board is adopt-

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 24278 RULES AND REGULATIONS ing a new policy to control what has EDR-334 did not propose to declare overreaction to a minor problem, since become a persistent and serious prob­ the practice of deliberate overbooking the vast majority of air travelers are lem for a growing number of airline to be “unfair or deceptive” under § 411 accommodated on the flight of their travelers, the “bumping” of passen­ of the Federal Aviation Act, but al­ choice without difficulty. It was also gers—the failure of an air carrier to luded to that possibility in the future argued that the Board has an inad­ provide seats to confirmed reservation if involuntary bumpings were not equate factual and legal basis for holders—because of overbooking of sharply reduced under new rules. Con­ adopting more stringent rules for the flight capacity. The new rules are de­ comitantly, the Board declined to pro­ payment of denied boarding compen­ signed to eliminate involuntary bump­ pose mandatory no-show controls, sation, and that an evidentiary hear­ ing, but without prohibiting deliberate such as ticket refund penalties and ad­ ing is required before issuance of these overbooking or rigidly regulating vance payment requirements, because rules. Some carriers contended that other reservations practices of the air­ of the drastic effects they would have bumping is not an industrywide prob­ line industry. Carriers will, however, on the flexibility and convenience of lem but is only exaggerated by the have to alter their current procedures the airlines reservations system. substandard performance of a few car­ to ensure that the passengers bumped Comments on the proposed rules riers, and that the Board should take are those who relinquish their reserva­ were filed by U.S. and foreign air car­ action against the ones with high tions willingly, in return for compen­ riers, consumer organizations, govern­ bumping rates instead of imposing sation. In short, carriers are expected ment bodies, and private individuals.4 harsh rules uniformly on all of them. to reduce involuntary bumpings sharp­ After considering these comments the Others argued that Board action is un­ ly below current levels, to the smallest Board has decided to make the pro­ necessary because natural competitive practicable number. posed rules final, with some modifica­ forces will induce carriers to devise the The rules were proposed in Septem­ tions discussed below. best methods for dealing with over­ ber 1977 (Notice of Proposed Rule- sales. making EDR-3341), in the first com­ 1. G eneral Comments We disagree with these arguments. prehensive reexamination of the over­ The proposed rules were supported The many comments filed in this pro­ sale regulations in more than ten by consumer organizations, govern­ ceeding of two years’ duration, includ­ years. EDR-334 proposed a number of ment agencies, and a number of pri­ ing hundreds of letters from individual changes in the existing regulatory vate citizens. These persons and citizens,- along with oversales data and scheme: Before bumping any passen­ groups generally agreed that bumping other information received by the ger against his will, carrier personnel was a serious comsumer problem for Board, amply demonstrate that the would be required to request volun­ which EDR-334 offered a reasonable carriers’ existing overbooking and teers who would agree to give up their remedy. oversales practices too often result in reservation in return for a payment of On the other hand, nearly all carri­ inconvenience, distress, and even fi­ compensation; denied boarding com­ ers opposed the policy and procedures nancial loss to unsuspecting passen- pensation for passengers bumped in­ set forth in EDR-334 as unnecessary agers. Notwithstanding the Board’s at­ voluntarily would be increased sub­ and unwise, and argued that they tempts to inform the public of the air­ stantially; eligibility for denied board­ should be moderated or made inappli­ line overbooking practices, it is under­ ing compensation would be broadened cable to certain classes of carriers or standable that many travelers are ou­ by eliminating some of the current ex­ types of operations. Basically, the car­ traged when, through no fault of their ceptions to the compensation rule; fi­ riers contended that EDR-334 was an own, and under circumstances entirely nally, carriers were urged to experi­ under the control of the carrier, their ment with other, perhaps novel, reser­ 7n addition to many individual letters, “confirmed reservations” are not hon­ vations and boarding procedures that formal comments on EDR-334 were filed by ored. The number of passengers would also ameliorate existing over­ Aeromexico, Air BVI Limited, Air Jamaica, denied confirmed space has grown sales practices.2 In a related action sev­ Air Midwest, Airline Passengers Association steadily in recent years and now is ap­ eral months earlier,* the Board re­ (APA), Allegheny Airlines, Aloha Airlines, proximately 150,000 per year.5 While quired air carriers and their agents to American Airlines, American Society of the incidence of oversales is small in Travel Agents (ASTA), Aviation Consumer relation to total number of passengers disclose to the public the possibility Action Project (ACAP), Braniff Airways, that confirmed reservations might not Delta Air Lines, U.S. Department of Trans­ carried, in absolute terms it is signifi­ be honored due to deliberate over­ portation, Eastern Air Lines, Frontier Air­ cant. The rate of oversales has shown booking of flights. Those notice rules, lines, Hawaiian Airlines, Hughes Airwest, no signs of substantial amelioration in which required a, display of counter International Air Transport Association the last several years, nor have carri­ signs and a distribution of disclosure (IATA), on behalf of 18 carriers (Aeromex­ ers taken any sustained initiative to al­ notices with tickets, were adopted on ico, Air France, Air New Zealand, Avianca, leviate the arbitrary and deceptive as­ an interim basis pending completion of British Airways, British Caledonian Air­ pects of current bumping procedures. this broader proceeding: ways, El Al Israel Airlines Ltd., Iberia, Iran Under these circumstances regulatory Air, Jugoslavenski Aerotransport, KLM action is not only warranted, but im­ Royal Dutch Airlines, Lufthansa, Olympic 42 PR 48577, September 23, 1977. EDR- Airways, Q antas Airways, Scandinavian Air­ perative. After all, the most common 334 followed an analysis of public comments lines System, South African Airways, Swis­ causes of oversales—whether inten­ submitted pursuant to Advance Notice of sair, and Trans World Airlines), Japan Air tional, e.g., deliberate overbooking, or Proposed Rulemaking EDR-296 (April 13, Tlines Company Ltd., Stephan P. Kaufman, inadvertent, e.g., “errors” of reserva­ 1976, 41 PR 16478) in which the Board dis­ Richard M. Leonard, Lineas Aereas Costar­ tion personnel—are within the exclu­ cussed the overbooking and no-show prob­ ricenses (LACSA), Compania Mexicana De sive control of the carriers and their lems generally but proposed no specific Aviación (Mexicana), National Airlines, agents. It is therefore not unreason­ rules. North Central Airlines, Northwest Airlines, able to require them to administer »American Airlines has recently instituted Congressman George O’Brien, Office of the their reservations and boarding prac- an experimental procedure of soliciting vol­ Consumer Advocate of the Civil Aeronautics unteers from oversold flights by offering Board, Office of Consumer Affairs of the immediate cash payments (of $25 in most Department of Health, Education, and Wel­ 5In fiscal year 1977 the number of passen­ cases) to anyone willing to give up their re­ fare, Ozark Air Lines Pacific Western Air­ gers denied confirmed space due to over­ served seat. The experiment, which is limit­ lines Ltd., Pan American World Airways, sales on U.S. carriers Was approximately ed to flights leaving from four cities, is de­ Piedmond Aviation, Harry Salis, Julian L. 130,000 for domestic operations and 12,000 scribed in American’s application for waiver Simon, Southern Airway’s, Texas Interna­ for international flights. In addition, over­ of Part 250 filed January 9,1978. tional Airlines, Trans World Airlines sales of foreign carriers are estimated to be »Regulation ER-987, 42 PR 12420, March (TWA), Western Air Lines, Wien Air Alaska, at least 10,000 (see p. 13, infra). CAB Form 4,1977. and United Air Lines. 251.

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 RULES AND REGULATIONS 24279 tices in a manner which minimizes the or in other cases where flight delay for the message used to solicit volun­ hardship and inconvenience to their might result. teers, since those matters are suitably customers. Other carriers expressed some sup­ left to the discretion of carrier man­ Nor do we find that an oral eviden­ port for the volunteer proposal. Some agement. However, in order for a pas­ tiary hearing is required before these stated that they have developed pre­ senger to make an informed decision rules may be adopted. This action is liminary procedures to solicit volun­ whether to volunteer, in some cases he clearly rulemaking with the meaning teers (United’s plan includes boarding should be told of his chances of being of §553 of the Administrative Proce­ the aircraft when there are too few bumped involuntarily and the amount dure Act. We are making basic policy volunteers among passengers waiting of denied boarding compensation. For choices in this proceeding, and the to board), and Eastern commented example, a passenger who is likely to public, including air carriers, has been that its experience with Leisure Class be selected for involuntary bumping given an ample opportunity to be (conditional) reservations indicates but volunteers instead may feel de­ heard. that the proposed volunteer system ceived upon discovering that he would Several carriers argue that the would benefit both carriers and con­ have been better compensated by not Board should now expressly declare sumers. It was pointed out, however, volunteering. In other cases, though, that the practice of deliberate over­ that if the compensation prescribed where volunteers are sought from pas­ booking is in the public interest. On for volunteers is the same as for non­ sengers not likely to be denied board­ the other hand, ACAP, ASTA, and sev­ volunteers the carrier will have no eco­ ing involuntarily, information on com­ eral individuals urge us to outlaw that nomic incentive to seek volunteers. pensation for nonvolunteers is ex­ practice as unfair and deceptive. We The Board was thus urged to specify traneous to the prospective volunteer’s believe it is unnecessary to do either. compensation levels only for those in­ decision, and would serve only to com­ As we recognized in EDR-334, over­ voluntarily bumped and let the carrier plicate and delay the volunteering booking does provide important public offer lesser amounts in its search for process. Therefore, we are requiring benefits, by filling what would other­ volunteers. American, for example, that any passenger who is asked to wise be empty seats and thereby re­ claimed that an offer of $25 will at­ volunteer, without being informed ducing the pressure for fare increases, tract enough volunteers to eliminate that he is in danger of being denied and by enabling more passengers to be the oversale problem almost entirely. boarding involuntarily and the com­ accommodated on the flight of their Delta took an opposite position, argu­ pensation payable in that event, may choice. Yet overbooking is also a major ing that compensation for volunteers not later be involuntarily bumped.® contributor to oversales and the conse­ should be higher than that for non­ This condition requires carriers to quent inability of carriers to honor volunteers, in order to encourage vol­ “fully inform” in advance only those confirmed reservations. Under these unteering. prospective volunteers who are in circumstances, the Board has decided All consumer and government com- danger of being involuntarily bumped; not to prohibit the practice of inten­ menters supported the volunteer pro­ others need not be given that informa­ tional overbooking, so long as the posal, at least in part, as a constructive tion. Of course, nothing is to prevent a social harm it sometimes causes can be and workable procedure. ACAP, how­ carrier from limiting its solicitation controlled by other means. ever, wou|d make the requirement exclusively to a group of passengers Carriers will therefore be free to use more stringent and permit carriers to not in danger of being bumped invol­ whatever reservations practices they deny boarding only to volunteers. untarily, thereby obviating the need find most effective, as long as involun­ We are adopting a requirement to for any explanations about involun­ tary denied boardings are eliminated seek volunteers but we are now per­ tary bumping procedures.6“ or reduced to the smallest practicable suaded that it is both unnecessary and number. In fact, carriers may find it in economically inefficient to prescribe 3. C ompensation fo r P assengers their interest to develop new methods the level of compensation for them. B um ped I nvoluntarily of controlling oversales to augment or This modification of the proposal will supplant the procedures contained in enable carriers to adjust their offer­ EDR-334 proposed several revisions these rules. However, if involuntary ings to prospective volunteers in ac­ in the current level of, and eligibility bumping is not substantially reduced cordance with experience, and avoid for, denied boarding compensation: (1) below current levels, we will reexa­ needless and wasteful overpayments. The basic DBC level would be in­ mine our decision not to engage in de­ Carriers will also have a greater incen­ creased to 200 percent of the bumped tailed oversight of carriers’ reserva­ tive to seek volunteers—by offering at­ passenger’s ticket value ($50 mini­ tions practices, including deliberate tractive, yet lower, compensation than mum, $400 maximum), connecting overbooking. is prescribed for non-volunteers—and flight coupons would be included in the Board’s goal of eliminating invol­ the computation, and “value” would 2. S olicitation of V olunteers be redefined to include U.S. transpor­ untary bumping will therefore have a tation taxes; (2) the existing exception Most carriers argued that the re­ better chance of success. The likeli­ for passengers given alternate trans­ quirement to seek volunteers would hood of flight delay and passenger portation within 2 hours (4 hours in­ confuse passengers, undermine con­ confusion will also be reduced, since ternationally) would be eliminated, sumer confidence in the airlines reser­ carriers may offer volunteers a flat and those passengers would be entitled vations system, delay flights, and sum of money rather than having to to one-half the DBC otherwise pay­ invite abuse by passengers. It was also explain the Board’s rather complicat­ argued that the procedure would be ed denied boarding compensation for­ able ($25 minimum, $200 maximum); especially unsuitable in some situa­ mula. This determination in no way and (3) the existing exception for tions, such as international flights excludes the possibility of carriers of­ bumpings caused by substitution of (confusion and flight delay very likely fering volunteers greater compensa­ smaller aircraft would be narrowed to because of many nori-English-speaking tion than we prescribe here for non­ passengers), and late-evening or low- volunteers, if they choose to do so. We “See § 250.2b(b). frequency flights (few if any volun­ conceive the possibility that a compa­ ““American Airlines is apparently conduct­ ny may wish to, in order to avoid the ing its experiment (see note 2) in that teers would come forward). The Board manner, by seeking volunteers only from was therefore urged to drop the re­ necessity for bumping any passenger early arrivals, who would not be subject to quirement altogether, to exclude inter­ involuntarily, and we would obviously involuntary bumping since American fol­ national flights from its ambit, or at commend such a policy. lows a “first come, first served” boarding least to specify that volunteers need Our new rule does not specify the priority. See American’s petition for recon­ not be sought from inside the aircraft form, content, or method of broadcast sideration dated March 6,1978.

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 24280 RULES AND REGULATIONS apply only when the substitution were cause a bumping from one flight often nearly beyond the carriers’ control caused by weather affecting the flight causes the passenger to miss a con­ than other causes of oversales, and in question. necting flight as well, all ticket cou­ that carriers should not be expected to Nearly all carriers opposed these pons (up to the passenger’s destina­ insure against their occurrence by changes on the ground that existing tion or a stopover of 4 or more hours) withholding large numbers of seats compensation levels are fully compen­ will be included in the computation. from sale.8 Since this exception has satory, and that the proposed increase Since these new compensation levels apparently not been abused (less than would result in windfall payments to will apply only to passengers bumped 10 percent of all oversales are caused bumped passengers. It was contended involuntarily, the impact upon the air­ by equipment substitutions), and its that acceptance of DBC is supposed to line industry—including carriers with elimination might well result in a less­ be optional, and that any passenger a high proportion of connecting traf­ ening of the carrier’s incentive to ar­ whose damages exceed the proferred fic-need not be severe, since carriers range for substitute aircraft, we are compensation may seek redress in the can avoid the higher payments by not now inclined to change the cur­ courts, though some carriers conceded seeking volunteers at lower levels of rent rule. compensation, or by eliminating invol­ that the current eligibility for com­ 4. B oarding P r io r it ie s pensation should be broadened or that untary oversales in some other passengers should be compensated for manner. EDR-334 acknowledged that at out-of-pocket expenses. Several local These rules will also, for the first times there wiil "be an insufficient service carriers opposed the inclusion time, require payment of compensa­ number of volunteers, and bumpings of connecting flight coupons in DBC tion to passengers who are given alter­ will be necessary on a basis other than on the grounds that it would discrimi­ nate transportation to their destina­ the free will of the passenger. The nate against short-haul feeder carriers tion or stopover within 2 hours domes­ Board proposed to allow carriers to by imposing disproportionately high tically and 4 hours internationally. select non-volunteers for denied board­ compensation costs in comparison to Many such passengers are substantial­ ing on the same basis as in the past, average flight length and would invite ly inconvenienced by such a delay and i.e., in accordance with non-discrimina- passengers to reserve space on long are therefore entitled to some compen­ tory boarding priority rules. Current­ connecting flights they don’t intend to sation for the carrier’s failure to deliv­ ly, each carrier must file with the use, in order to profit from being er the service naturally expected by Bureau of Pricing and Domestic Avi­ bumped. Some carriers argued that the consumer. Historically, about 50 ation its boarding priority rules and passengers given substitute transpor­ percent of all passengers denied board­ relevant portions of the company tation within the 2- and 4-hour limits ing have been ineligible for compensa­ manual instructing personnel in “have not suffered compensable tion because of the alternate-transpor­ boarding procedures for oversold delay,” and therefore should not be tation exception. Compensation for re­ flights. There is some variety in the eligible for DBC; alternatively, it was routed passengers is set at one-half carriers’ priority rules but the most asserted that all bumped passengers, the level otherwise payable (minimum common lowest boarding priorities are whether or not re-routed, should be $37.50, maximum $200) so that carri­ the last passenger to check in, the compensated at the same rate (100 ers will still have an economic incen­ “least inconvenienced” passenger, or percent of flight coupons). tive to arrange substitute transporta­ passengers using discount fares. ERD- Most consumer and government tion for involuntarily bumped passen­ 334 tentatively proposed to continue commenters supported the proposed gers. to allow carriers flexibility in estab­ changes as a constructive response to However, we have decided not to lishing their priorities, but comment adopt the proposed narrowing of the was specifically solicited on the advis­ involuntary oversales and reasonable DBC exception for equipment substi­ relief for bumped passengers. Others ability of prescribing a uniform board­ tutions. Carriers argued that the pro­ ing priority for all carriers, such as urged the Board to increase compensa­ posed limitation—that payment of tion levels even further, e.g., by setting chronological order of reservation or DBC could be avoided only for substi­ ticket purchase. DBC at 300 percent of ticket value, or tutions caused by weather conditions Carriers generally argued for contin­ by removing the $400 maximum. It affecting that flight—would virtually ued flexibility in establishing and ad­ was also argued that the theoretical eliminate the exception altogether ministering boarding priorities, con­ right to pursue common law remedies and would be injurious to consumers. tending that a Board-imposed system for bumping damages is illusory in They stated that the vast majority of would be unduly rigid and an inad­ practice, and that the vast majority of equipment substitutions are due to equate substitute for on-the-spot judg­ consumers will simply accept whatever mechanical malfunctions or other fac­ ment of experienced boarding person­ compensation is offered. tors outside the carrier’s control, and nel. Other commenters contended that We have decided to adopt the pro­ are rarely, if ever, caused directly by the Board should prescribe a uniform posed revisions in the DBC computa­ weather. Thus the proposal would as- boarding priority based on chronologi­ tion, with one exception and a minor sertedly require payment of compensa­ cal order of reservation, on the ground modification. We continue to believe, tion to all passengers denied boarding that consumers would regard such a as we stated in EDR-334, that existing from substitute aircraft and, in some system as more equitable than current compensation levels are inadequate to cases, would encourage carriers to procedures. ACAP and ASTA argued redress the inconvenience and distress cancel flights instead of arranging that whatever boarding priorities are often resulting from involuntary equipment substitutions, which do established should be filed as tariffs, bumping incidents. The increase will benefit the public. (Passengers are not or at least be available for inspection not only provide better compensation entitled to compensation for cancelled upon request to the carrier. They con­ for passengers denied boarding against flights.) tended that the existing informal their will, but will give carriers greater We are persuaded that adoption of filing system leads to both a lack of incentive to refine their overbooking the weather limitation would not be in Board scrutiny and inadequate public and boarding procedures so that invol­ the interest of the traveling public. notice of these rules, and allows carri­ untary oversales are minimized.7 Be- The equipment-substitution exception er personnel* to ignore them. APA is based on the belief that mechanical would support allowing carriers to es­ 7We are setting the minimum DBC pay­ failures and safety problems are more tablish differing boarding priorities able at $75, rather than the $50 proposed. This increase will sharpen the important distinction between volunteers and non-vol­ incentive and more bargaining room for se­ "See Regulation ER-503, adopted August unteers, and will give carriers both greater curing volunteers on low-priced flights. 3, 1967, 32 PR 11939.

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 RULES AND REGULATIONS 24231 only if each priority system were sub­ ministered quickly and with a mini­ lieve that the bumping rate of com­ mitted for public comment before mum of inconvenience to the remain­ muters is less than the rest of the in­ adoption. ing passengers, we are simply requir­ dustry,” and commuter passengers are We have decided to refrain from rig­ ing carriers to inform their patrons assertedly entitled to the protections idly regulating this aspect of carrier more fully and frankly of the chance of Part 250. (Air BVI operates sched­ boarding practices, and we will contin­ that their confirmed reservations may uled flights on a head-to-head basis ue to allow the carriers to exercise not be honored. with several commuters in the Carib­ some discretion in establishing board­ bean.) Texas International requested ing priorities. However, we are adopt­ 5. A pplicability of t h e N ew R u les. an exemption from Part 250 in intra- ing more stringent requirements for Part 250 now applies to the sched­ Texas markets in which TXI competes clarity and public disclosure of the uled operations of all certificated car­ with Southwest Airlines, an intrastate rules. Under current practice, the pri­ riers and foreign carriers on flights carrier that is not subject to any regu­ ority rules are insufficiently publicized “originating or terminating at, or serv­ lation similar to Part 250. TXI argued and are sometimes so broadly drafted ing” a U.S. point. EDR-334 proposed that the lack of comparable oversale as to invite arbitrary action by board­ to retain this jurisdictional scope for regulations for Southwest would pre­ ing personnel. Passengers, who are un­ new oversale rules. vent TXI from ‘competing effectively derstandably sensitive to the bumping Several foreign carriers, and some in those markets, which assertedly selection process, are generally igno­ U.S. carriers operating internationally, comprise only 5 percent of TXI’s total rant of the rules, and cannot take argued that there Is no basis for system markets. Wien Air Alaska steps either to protect themselves amending Part 250 with respect to for­ asked to be excluded from any in­ from involuntary bumping or to verify eign air transportation. They pointed crease in DBC levels, on the ground that carriers have in fact acted in ac­ out that the oversale rate for interna­ that Wien’s existing boarding proce­ cordance with the stated priorities. tional operations has recently de­ dures already minimize involuntary Therefore, we are requiring the car­ clined, and contended that the unique bumping, and the Board has no basis riers’ boarding priority rules and prac­ characteristics of international flights for imposing stricter oversale regula­ tices to be filed as tariffs, in order to are not conducive to the rigid and tions on Alaskan air carriers. give the Board and the public a specif­ harsh boarding regulations of any one We are denying these requests. ic opportunity to pass upon them, and nation. Not only would the volunteer to make them more readily available Among other considerations, grant of requirement be unworkable on those the relief sought would raise serious to the public on a continuing basis. flights, it was asserted, but the new Relevant portions of company man­ questions of line-drawing and adminis­ U.S. rules would expose foreign carri­ trative fairness. We are not at this uals instructing personnel on boarding ers to conflicts of various nations’ priorities and bumping procedures laws. time aware of any significant bumping shall be filed with the Tariffs Section We adhere to our tentative conclu­ problems on commuter airlines that of the Board and will be available for sion that these new rules should be would warrant the extension of Part public inspection. In addition, the pri­ given the same extra-territorial appli­ 250 to that class of carriers, nor is it ority rules, or a summary thereof, cation as our existing oversale regula­ within the scope of this proceeding to must be included in the written state­ tions. Although oversales on interna­ reexamine the competitive relation­ ment that explains denied boarding tional flights had declined slightly at ship between certificated and non-cer- compensation and the passenger’s the time EDR-334 was issued, the rate tificated carriers, as Air BVI and TXI rights in the event of an oversold of oversales in international oper­ would have us do. In regard to Wien’s flight, and that statement (which we ations is In fact higher than that for request, if it is in fact true that Wien have revised in plain English) must be domestic flights; in addition, more already minimizes involuntary bump­ filed in the tariffs and made available recent data show a significant increase ing, then these amendments will to passengers at all airport ticket in bumpings from international impose no significant new obligations counters and boarding points being flights, in both absolute and relative or hardship on that carrier. In any used by the carrier.9 terms.11 Moreover, the arguments now event, Wien has advanced no compel­ A reference to boarding priority raised in opposition to applying our ling reason why passengers on Alaskan rules will also be included in the oversale regulations to international flights should not be given the same standard overbooking disclosure notice operations are essentially the same as protection against involuntary bump­ posted at ticket counters and distribut­ those raised and rejected when Part ing afforded to other air travelers. ed with tickets, to alert passengers to 250 was first given extraterritorial 6. A lternate R eservations both the existence and availability of effect, in order to extend an umbrella P rocedures the rules. Finally, we are requiring of protection to U.S. travelers that the priority rules be written in a abroad.12 We must emphasize that the board­ sufficiently clear and specific manner Three other requests were made re­ ing procedures contained in this rule to be meaningful to the average pas­ garding the applicability of Part 250. should not be considered the only per­ senger, i.e., to enable the reader to as­ Air BVI, Ltd., requested that the regu­ missible method for controlling over­ certain the approximate likelihood of lations be extended to commuter carri­ sales. EDR-334 encouraged the use of his being bumped, and to plan accord­ ers because “there is no reason to be- conditional reservations— whereby the ingly. Some of the carriers’ current purchaser accepts an increased risk of rules—e.g., those that would deny persons traveling on emergency, unaccom­ being bumped in return for an eco­ boarding to the “most logical passen­ panied minors, or elderly or infirm passen­ nomic inducement, such as a free ger” or the “least inconvenienced pas­ gers. flight if the reservation is not hon­ senger”—fall short of that standard, 11 In fiscal year 1977 U.S. flag carriers ored—to supplement or replace delib­ and invite arbitrary action by boarding denied boarding to 11,580 passengers from erate overbooking. We also suggested personnel. While we do not intend to international flights, for a ratio of 7.8 other means of capacity control, such eliminate flexibility and judgment bumpings per 10,000 enplanements. These as bidding systems—Where the passen­ data represent an increase over calendar gers bumped would be those who from the exercise of boarding proce­ 1976 figures of 9,958 bumpings and a ratio dures,10 which must necessarily be ad- of 7.4 (for domestic flights the denied submit the lowest bids for compensa­ boarding rate was 6.6 per 10,000 enplane­ tion—or the establishment of no-show 9See § 250.9. ments in fiscal 1977). control measures, such as advance 10 For example, priority rules could, as I2See Regulation ER-800, adopted August payment requirements and ticket they often do now, include exceptions for 13, 1974, 39 FR 38087. refund penalties. With a few excep-

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 24282 RULES AND REGULATIONS tions,13 carriers’ responses to these will not require the filing of Form 250 carriers to the disclosure of the total suggestions were negative. However, until further notice, and then only if enplanement data for flights serving we continue to encourage experimen­ there appears to be a regulatory need U.S. points.17 However, because of the tation with innovative reservations for that type of information. Second, importance of monitoring the compli­ and boarding systems. Although carri­ the reporting of system-wide oversales ance of foreign carriers with our new ers appear reluctant to deviate from (on Form 251) is being revised in a rules, we have decided to terminate current practices, they may find that number of respects. Most importantly, the stay. The unavailability of over­ new procedures are successful with the the new Form 251 separately lists the sale statistics for foreign cárriers has traveling public, at least in some mar­ number of volunteers and non-volun­ greatly limited the Board’s and the kets. teers denied boarding, and the total public’s knowledge of foreign carriers’ As a technical matter, we have de­ compensation paid to each category. performance in regard to oversales, leted the proposed § 250.11, “Alternate These data will enable the Board to and has prevented comparisons among procedures for denied boarding,” be­ monitor the compliance of the indus­ those carriers and with their U.S. com­ cause it appears to be unnecessary. try with its new policy, and to deter­ petitors. It may be conservatively esti­ Any carrier that wishes to meet its ob­ mine whether further regulatory mated that oversales from foreign car­ ligation to minimize involuntary action is necessary. Various editorial riers exceed 10,000 passengers per bumping by means other than those changes to Form 251 are being made year,18 and the Board is concerned contained in Part 250 may do so upon as well, in order to simplify the report­ that these carriers, too, should sub­ the filing and approval of tariffs pro­ ing and publication of oversale statis­ viding for the alternate procedures. tics: (1) The reporting basis will be stantially reduce their rate of involun­ changed simply to include all flights tary bumping in the future. Release of 7. O th er C hanges to which Part 250 applies, i.e., all the enplanement data from foreign flights originating or terminating at, carriers’ Form 251 reports should not This rule makes a few other changes create any unfair competitive disad­ to existing regulations. First, we are or serving, a U.S. point. In the past, carriers were given a choice of report­ vantage, since comparable data for modifying the interim requirements U.S. carriers operating internationally for disclosure of overbooking practices ing Form 251 data on a systemwide basis, or limited to the carrier’s top 15 has routinely been published since to reflect the new oversale policy. The 1971 without significant objection. requirements for posting and distrib­ stations or stations accounting for 67 uting the notices remain unchanged percent of its total enplanements.15 8. E ffectiv e D ate but the standard text has been ex­ This modification will eliminate the panded to include the following state­ need for Board staff to convert less- These new rules will require a ments: “If a flight is overbooked, no than-system-wide data and, along with number of changes in carriers’ existing one will be denied a seat until airline other simplifications of the report, procedures, notices, and documents. personnel first ask for volunteers will­ should allow more timely publication Boarding priority rules, along with the ing to give up their reservation in ex­ of oversale statistics. (2) The elimina­ explanatory statement given to change for a payment of the airline’s tion of a separate listing, in each re­ bumped passengers, must be redrafted choosing. If there are not enough vol­ ported category of denied boardings, both for style and substance, and filed unteers the airline will deny boarding for passengers whose reserved space as tariffs; company boarding manuals to other persons in accordance with its was confirmed in a manner other than must be rewritten and personnel in­ particular boarding priority.” The ad­ by notation on the passenger’s ticket; structed accordingly; and the over­ ditional language, along with minor the reported number of such passen­ booking disclosure notices must be re­ editorial changes to the rest of the gers has been negligible, and there no vised, distributed to agents and posted. notice, is designed to alert passengers longer appears to be a useful purpose Moreover, both the Board and public to their rights and carriers’ obligations served by collecting that informa­ will be reviewing the newly-filed under the new rules.14 tion.16 (3) The addition of a listing for boarding procedures, not only for com­ We are also updating and revising passengers who do not qualify for pliance with the policy regarding in­ the reporting requirements of § 250.10 DBC because of failure to comply with voluntary bumping but also for non­ so that more useful data are collected. the carrier’s ticketing, check-in, or re­ discrimination and clarity. First, the requirement to report over­ confirmation procedures or to be ac­ Because of the importance of ensur­ sales by individual markets (on Form ceptable for transportation under the ing that our new bumping policy is 250) is being suspended indefinitely. carrier’s tariff. This information is fully and faithfully implemented, we Those reports have not proved very being required so that the Board can are allowing 90 days before effective­ useful to the Board in policy develop­ evaluate the significance of this excep­ ness of the rules. This period should ment or otherwise, and have not been tion to the DBC rule, in light of the provide sufficient time for carriers to published since 1975. Accordingly, we contention of some commenters that develop thoughtful boarding proce­ carriers should not be permitted to dures (45 days), and for the public and assert the “10-minute rule” to avoid 13 Eastern stated that the conditional res­ the Board to’review them (the normal ervation is popular with many customers, the payment of denied boarding com­ 45-day statutory period for tariff fil­ and IATA commented that the conditional pensation to late-arriving passengers. ings). Therefore, the new tariffs must reservation might be an “attractive option” Finally, we are terminating the stay be filed by July 20, 1978, for effective­ in certain circumstances, depending on each of the reporting requirements for for­ ness September 3, 1978. The new Form carrier’s particular traffic and route charac­ eign air carriers. When Part 250 was 251 must be filed for the month of teristics. first made applicable to foreign carri­ 14 As a technical matter, we are deleting ers, an indefinite stay of the Form 251 these notice rules from 14 CFR § 221.177 reporting requirement was granted be­ "Regulation ER-897, January 27, 1975, 40 and incorporating them into Part 250 in­ cause of objections from some of those FR 4409. stead, in order to consolidate the regula­ “We have variously estimated denied tions relating to oversales. Accordingly, the boardings of foreign .carriers to range from current reference in section (a) of the regu­ 15 Currently, however, only five carriers 10,000 to 27,000 per year in the period 1971- lation (previously § 221.177(a)) to “Each car­ are reporting Form 251 data on less than a 73. This estimate is based upon comparisons rier subject to Part 250 of this chapter” is systemwide basis. to oversale data of U.S. flag carriers’ inter­ no longer necessary, and has been replaced 16 The separate listing for denied boardings national operations and to the incidence of simply by “every carrier” in § 250.11(a). In based on reservations made by means other bumping complaints involving foreign car- other respects, except for revisions in the than ticket notation was first required by iers. See Notice of Proposed Rulemaking text discussed above, the notice regulation Regulation ER-804, adopted May 23, 1973, EDR-348 (38 FR 15083, June 8, 1973), and is unchanged. 38 FR 14822. Regulation ER-880, supra note 12.

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 RULES AND REGULATIONS 24283

September 1978 and each month smallest practicable number of per­ the event of an oversold flight. Any re­ thereafter.19 sons holding confirmed reserved space vision of that portion of the manual We should also point out, however, on that flight are denied boarding in­ must be filed within 15 days of its that the delayed effectiveness of the voluntarily. adoption by the carrier. rules will not prevent any carrier from preliminarily implementing voluntary 4. A new § 250.2b is added as follows: 6. Section 250.4 is revised to read as bumping procedures in the interim follows: period or experimenting with alter­ § 250.2b Carriers to request volunteers for nate reservations and boarding prac­ denied boarding. § 250.4 Denied boarding compensation tices that will reduce involuntary (a) In the event of an oversold flight, tariffs; liquidated damages. denied boardings. every carrier shall request volunteers (a) Every carrier shall file tariffs Accordingly, the Civil Aeronautics for denied boarding before using any providing compensation for passengers Board hereby amends 14 CFR Part other boarding priority. A “volunteer” holding confirmed reserved space who 250 as set forth below. is a person who responds to the carri­ are denied boarding involuntarily 1. The table of contents is amended er’s request for volunteers and who from an oversold flight that departs by revising the title of Part 250; Revis­ willingly accepts the carrier’s offer of without those passengers. The tariffs ing the headings of §§ 250.3, 250.4, compensation, in any amount, in ex­ shall incorporate the amount of com­ 250.5, and 250.9; revoking and reserv­ change for relinquishing his confirmed pensation described in § 250.5 and the ing § 250.7; and adding new §§ 250.2a, reserved space. Any other passenger exceptions to eligibility for compensa­ 250.2b, and 250.11 as follows: denied boarding is considered for pur­ tion described in § 250.6. Sec. poses of this part to have been denied (b) The tariffs shall specify that the 250.2a Policy regarding denied boarding. boarding involuntarily, even if he ac­ carrier will tender, on the day and 250.2b Carriers to request volunteers for cepts denied boarding compensation. place the involuntary denied boarding denied boarding. occurs, the appropriate compensation, 250.3 Boarding priority rules. (b) If an insufficient number of vol­ 250.4 Denied boarding compensation tar-, unteers come forward, the carrier may which, if accepted by the passenger, iffs; liquidated damages. deny boarding to other passengers in shall constitute liquidated damages for 250.5 Amount of denied boarding compen­ accordance with its boarding priority all damages incurred by the passenger sation for passengers denied boarding rules. However, the carrier may not as a result of the carrier’s failure fail­ involuntarily. deny boarding to any passenger invol­ ure to provide the passenger with con-, 250.6 *** firmed reserve space. 250.7 [Reserved] untarily who was earlier asked to vol­ 250.8 * * * unteer without having been informed 7. Section 250.5 is revised to read as 250.9 Written explanation of denied board­ that he was in danger of being denied follows: ing compensation and boarding prior­ boarding involuntarily and the ities. amount of compensation to which he § 250.5 Amount of denied boarding com­ 250.10 *** would have been entitled in that pensation for passengers denied board­ 250.11 Public disclosure of deliberate over­ event. ing involuntarily. booking and boarding procedures. 5. Section 250.3 is revised to read as Subject to the exceptions provided 2. Section 250.1 is amended by follows: in § 250.6, the tariffs required by adding the definition of “Deliberate § 250.4(b) shall provide for compensa­ overbooking,” and by revoking the § 250.3 Boarding priority rules. tion to be paid a passenger denied definition of “Value of the first re­ (a) Every carrier shall establish pri­ boarding involuntarily from an over­ maining flight coupon” and substitut­ ority rules and criteria for determin­ sold flight at the rate of 200 percent of ing in its place a new definition as fol­ ing which passengers holding con­ the sum of the values of the passen­ lows: /■ firmed reserved space shall be denied ger’s remaining Bight coupons up to boarding on an oversold flight in the the passenger’s next stopover, or if § 250.1 Definitions. event that an insufficient number of none, to his destination, with a $75 For the purposes of this part: volunteers come forward. Such rules minimum and a $400 maximum. How­ and criteria shall reflect the obliga­ ever, the compensation shall be one- ***** tions of the carrier set forth in half the amount described above, with “Confirmed reserved space” * * * §§ 250.2a and 250.2b to minimize invol­ a $37.50 minimum and a $200 maxi­ “Deliberate overbooking” means the untary denied boarding and to request mum. If the carrier arranges for com­ practice of knowingly confirming re­ volunteers, and shall be written in parable air transportation or other served space for a greater number of such manner as to be understandable transportation accepted (i.e., used) by passengers that can be carried in the and meaningful to the average passen­ the passenger, which, at the time specific call of service on the flight ger. Such rules and criteria shall not either such arrangement is made, is and date for which confirmation is make, give, or cause any undue or un­ planned to arrive at the airport of the given. reasonable preference or advantage to passenger’s next stopover, or if none, “Stopover” * * * any particular person or subject any at the airport of the passenger’s desti­ “Sum of the values of the remaining particular person to any unjust dis­ nation not later than 2 hours after the flight coupons” means the sum of the crimination or any undue or unreason­ time the direct or connecting Bight on applicable one-way fares, including able prejudice or disadvantage in any which the confirmed space is held is any surcharges and air transportation respect whatsoever. planned to arrive, in the case of inter­ taxes, less any applicable discounts. (b) Every carrier shall file in its state and overseas air transportation, 3. A new. section 250.2a is added as tariff its boarding priority rules and or 4 hours after such time in the case follows: criteria, including a copy of its written of foreign air transportation. statement explaining denied boarding 8. Section 250.6 is revised to read as § 250.2a Policy regarding denied boarding. compensation and boarding proce­ follows: In the event of an oversold flight, dures, as described in § 250.9. every carrier shall ensure that the (c) Every carrier shall file with the § 250.6 Exceptions to eligibility for denied Chief, Tariffs Section, Bureau of Pric­ boarding compensation. ,9The 90-day period for effectiveness also ing and Domestic Aviation, that por­ A passenger denied boarding invol­ allows adequate time for the Comptroller tion of its currently effective company untarily from an oversold flight shall General’s review of the revised oversale re­ manual instructing employees on not be eligible for denied boarding porting requirements. boarding procedures and priorities in compensation if:

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 24284 RULES AND REGULATIONS

(a) The passenger does not present V olunteers and B oarding P r io r it ie s after the passenger’s originally sched­ himself for carriage at the appropriate uled arrival time. time and place, having complied fully If a flight is oversold (more passen­ with the carrier’s requirements as to gers hold confirmed reservations than M ethod of P aym ent ticketing, check-in, and reconfirmation there are seats available), no one may The airline must give each passenger procedures and being acceptable for be denied boarding against his will who qualified for denied boarding transportation under the carrier’s until airline personnel first ask for vol­ compensation, a payment by check or tariff; or unteers who will give up their reserva­ draft for the amount specified above, (b) The flight for which the passen­ tion willingly, in exchange for a pay­ on the day and place the involuntary ger holds confirmed reserved space is ment of the airline’s choosing. If there denied boarding occurs. However, if unable to accommodate him because are not enough volunteers, other pas­ the airline arranges alternate trans­ of: (1) Government requisition of sengers may be denied boarding invol­ portation for the passenger’s conven­ space; or (2) substitution of equipment untarily, in accordance with the fol­ ience that departs before the payment of lesser capacity when required by lowing boarding priority of [name of can be made, the payment will be sent operational or safety reasons; or air carrier]: [In this space carrier in­ to the passenger within 24 hours. (c) The passenger is offered accom­ serts its boarding priority rules or a P assenger’s O p t io n s modations or is seated in a section of summary thereof, in a manner to be Acceptance of the compensation (by the aircraft other than that specified understandable to the average passen­ endorsing the check or draft within 30 on his ticket at no extra charge, ger.] days) relieves [name of air carrier] except that a passenger seated in a C ompensation fo r I nvoluntary from any further liability to the pas­ section for which a lower fare is D en ied B oarding senger caused by its failure to honor charged shall be entitled to an appro­ If you are denied boarding involun­ the confirmed reservation. However, priate refund. tarily, you are entitled to a payment the passenger may decline the pay­ 9. Section 250.7 is revoked and re­ of “denied boarding compensation” ment and seek to recover damages in a served as follows: from the airline unless: (1) you have court of law or in some other manner. not fully complied with the airline’s 11. Section 250.10 is revised to read § 250.7 [Reserved] ticketing, check-in, and reconfirmation as follows: 10. Section 250.9 is revised to read as requirements, or you are not accept­ follows: able for transportation under the air­ §250.10 Reports of unaccommodated pas­ line’s tariff filed with the CAB; or (2) sengers. § 250.9 Written explanation of denied you are denied boarding because the (a) Every carrier, except foreign air boarding compensation and boarding flight is canceled; or (3) you are denied carriers, shall file reports, on Form priorities. boarding because of Government req­ 250 (Appendix A of this part), on the (a) Every carrier shall furnish pas­ uisition of space or because a smaller number of unaccommodated passen­ sengers who are denied boarding invol­ capacity aircraft was substituted for gers. The markets for which such re­ untarily from flights on which they safety or operational reasons;, or (4) ports shall be filed are those for which hold confirmed reserved space, imme­ you are offered accommodations in a ontime reporting is filed in accordance diately after the denied boarding section of the aircraft other than that with part 234 of the Board’s economic occurs, a written statement explaining specified in your ticket, at no extra regulations and, in addition, New the terms, conditions, and limitations charge. (A passenger seated in a sec­ York-San Juan. Local service carriers of denied boarding compensation, and tion for which a lower fare is charged shall file, in addition to reports which describing the carrier’s boarding prior­ must be given an appropriate refund.) may be required by this section be­ ity rules and criteria. The carrier shall A m o u n t of D en ied B oarding cause required by part 234, such data also furnish the statement to any C ompensation for the five top-traffic markets of person upon request at all airport Passengers who are eligible for each. The reports shall cover the third ticket selling positions which are in denied boarding compensation must be month in each calendar quarter and the charge of a person employed ex­ offered a payment equal to the sum of shall be filed within 45 days after the clusively by the carrier, or by it jointly the face values of their ticket coupons, month covered by the report. with another person or persons, and at with a $37.50 minimum and $200 maxi­ (b) Every carrier shall file, on a all boarding locations being used by mum. However, if the airline cannot monthly basis, the information speci­ the carrier. arrange ‘alternate transportation’ (see fied in Form 251 (Appendix B of this (b) Prior to furnishing such state­ below) for the passenger, the compen­ part). The reporting basis shall be all ment to any person, each carrier shall sation is doubled ($75 minimum, $400 flights originating or terminating at, file a copy of the statement or any re­ maximum). The ‘value’ of a ticket or serving, a point within the United vision thereof in its tariff, as provided coupon is the one-way fare for the States or its territories or possessions. in §250.3. The language of the state­ flight shown on the coupon, including The reports are to be submitted within ment or revision must have the prior any surcharge and air transportation 30 days after the month covered by approval of the Board unless its text is tax, minus any applicable discount. All the report. Carriers with both domes­ as prescribed below. (Applications for flight coupons, including connecting tic and international operations shall alternative wording of the statement flights, to the passenger’s destination file separate reports for each. shall be filed with the Director, or first 4-hour stopover are used to 12. A new § 250.11 is added as fol­ Bureau of Pricing and Domestic Avi­ compute the compensation. lows: ation.) ‘Alternate transportation’ is air § 250.11 Public disclosure of deliberate C ompensation fo r D en ied B oarding transportation (by an airline licensed by the C.A.B.) or other transportation overbooking and boarding procedures. If you have been denied a reserved used by the passenger which, at . the (a) Every carrier shall cause to be seat on [name of air carrier], you are time the arrangement is made, is displayed continuously in a conspicu­ probably entitled to monetary com­ planned to arrive at the passenger’s ous public place at each desk, station, pensation. This notice explains the next scheduled stopover (of 4 hours or and position in the United States airline’s obligations and the passen­ longer) or destination no later than 2 which is in the charge of a person em­ ger’s rights in the case of an oversold hours (for flights within U.S. points, ployed exclusively by it, or by it joint­ flight, in accordance with regulations including territories and possessions) ly with another person, or by any of the Ü.S. Civil Aeronautics Board. or 4 hours (for international flights) agent employed by such air carrier or

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 RULES AND REGULATIONS 24285 foreign air carrier, to sell tickets to persons in accordance with its particular agents authorized to sell air transpor­ passengers a sign, located so as to be boarding priority. With few exceptions per­ tation for that carrier comply with the clearly visible and clearly readable to sons denied boarding involuntarily are enti­ notice provisions of paragraphs (a) tled to compensation. The complete rules the traveling public, which shall have for the payment of compensation and each and (b) of this section. printed thereon the following state­ airline’s boarding priorities are available at (d) Any carrier that wishes to use a ment in bold-face type at least one- all airport ticket counters and boarding lo­ disclosure notice of its own wording, fourth of in inch high: cations. but containing the substance of the N otice—O verbooking o f F lig h ts (b) Every carrier shall include with language prescribed in paragraph (a) Airline flights may be overbooked, and each ticket sold in the United States of this section, may substitute a notice there is a slight chance that a seat will not the notice set forth in paragraph (a) of its own wording upon approval by be available on a flight for which a person of this section, printed in at least 12- ■the Board. Applications for such ap­ has a confirmed reservation. If the flight is point type in ink contrasting with the proval shall be filed with the Director, overbooked, no one will be denied a seat stock. The notice may be printed on a Bureau of Pricing and Domestic Avi­ until airline personnel first ask for volun­ ation. teers willing to give up their, reservation in separate piece of paper, on the ticket exchange for a payment of the airline’s stock, or oh the ticket envelope. 13. The facing page of Appendix B choosing. If there are not enough volun­ (c) It shall be the responsibility of (Form 251) is revised to read as fol­ teers the airline will deny boarding to other each carrier to ensure that travel lows:

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 24286 RULES AND REGULATIONS APPENDIX B CL»Fv*2Sl C m & AERONAUTICI BOARD Name of Ali Cantei RuklaglM, D. C. 20421

GAG Carrier Code REPORT OP PASSENOER8 DENIED CONFIRMED 8PACE Month of ML

Operations (Check one) (To be Hied with the Bareni of Accounts tad Statìstica Q Domestic within SO day» afta» tbo end of oacb «oath) Q international L ^ (See tutraottowo oo back) i T Number of passengers denied boarding Involuntarily who qualified for denield boarding compensation and: _____

— ----- (a) were given alternate transportation within the meaning of 8250.5.,. (b) were not given such alternate transportation. 2. Number of passengers denied boarding Involuntarily who did not qualify for denied boarding compensation due to: (a) government requisition of space.

(b) substitution of smaller capacity Equipment. (c) failure of passenger to comply with ticketing, check-in, and reconfirmation procedures or to be acceptable for transportation under carrier's tariff.

3* TOTAL NUMBER DENIED BOARDING INVOLUNTARILY ~4. Number of passengers denied boarding Involuntarily who actually received compensation.* 5. Number of passengers who volunteered to give up reserved space in »exchange for a payment of the carrier's choosing.

6 . Number of passengers accommodated in another section of the a irc ra ft: (a) Upgrades (b) Downgrades * 7 . Number of passengers enplaned. • » 8 . Amount of compensation paid to passengers who: (a) were denied boarding involuntarily and received alternate transportation within meaning of $250.5.(See item 1(a) above). (b) were denied boarding involuntarily and did not receive Alternate transportation. (See item 1(b) above).

(c) volunteered for denied boarding. (See item 3 above).

!, the undersigned, (Title) of the above-aased carrier certify that the above report has bees eumlaed by me aad Is the best of ay knowledge sad belief Is a Use. correct aad complete report for the period stated.

(Date) (Slanature)

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978 RULES AND REGULATIONS 24287

14. The back page of Appendix B [8010-01] Form 8-K filing of any change in the (Form 251) is revised to read as fol­ principal independent accountants of lows: Title 17— Commodity and Securities the registrant, including disclosure of Exchanges any disagreements between the regis­ Instructions trant and its independent accountants (a) Reports shall be filed by all air carriers CHAPTER II— SECURITIES AND on matters of accouhting principles or holding certificates under section 401(d) (1) EXCHANGE COMMISSION practices, financial statement disclo­ and (2) of the Federal Aviation Act of 1958, sure, or auditing scope or procedure. and all foreign route air carriers holding [Release Nos. 33-5934, 34-14808, 35-20562, In 1974, in Accounting Series Release section 402 permits, authorizing the trans­ IC-10259, AS-247] portation of persons. Reports shall be filed No. 165 (40 FR 1010), the Commission for all flights originating or terminating at, added a section to Schedule 14A to re­ or serving, a point within the United States PART 240— GENERAL RULES AND quire additional disclosure of disagree­ or its territories or possessions. See Part 250 REGULATIONS, SECURITIES EX­ ments between registrants and inde­ of CAB Regulations (14 CFR Part 250) for CHANGE ACT OF 1934 pendent accountants. further information. As stated in Accounting Series Re­ (b) Separate reports shall be filed for do­ lease No. 165: mestic and international operations. Check PART 249— FORMS, SECURITIES the box opposite the appropriate heading. EXCHANGE ACT OF 1934 One of the underpinnings of the Commis­ “Domestic includes flight stages with both sion’s administration of the disclosure re­ terminals within territory under U.S. juris­ Auditor Changes quirements of the federal securities laws is diction (the 50 States, the District of Co­ its reliance on the reports of independent lumbia, and U.S. territories and posses­ AGENCY: Securities and Exchange public accountants on the financial state­ sions). “International” includes flight stages Commission. ments of registrants. These reports provide with one or both terminals outside of terri­ the assurance of an outside expert’s exami­ tory under U.S. jurisdiction. ACTION: Final rules. nation and opinion, thereby substantially (c) With respect to item 1, “alternate SUMMARY: The Commission is increasing the reliability of financial state­ transportation” for passengers denied adopting amendments to its rules re­ ments. boarding involuntarily means comparable air transportation accepted by the passen­ garding the reporting of changes in a Since that time, the role of the inde­ ger which, at the time the arrangement is registrant’s independent accountants pendent accountant as an outside made, is planned to arrive at the passenger’s to require disclosure of whether the expert has expanded. Auditors now destination or first stopover (of 4 or more decision to change independent ac­ perform limited reviews of interim fi­ hours) no later than 2 horns for domestic countants was recommended or ap­ nancial information and, on occasion, flights or 4 hours for international flights. proved by the audit or similar commit­ report the results of such reviews in See § 250.5 of CAB regulations for further tee of the Board of Directors. This in­ Form 10-Q. In addition, generally ac­ information. creased disclosure should aid investors cepted auditing standards require (d) “Total number denied boarding invol­ in better understanding and evaluat­ auditors to report to their clients ma­ untarily” should equal the sum of Items 1 ing the registrant’s relationship with terial weaknesses in internal account­ and 2. If this is not so, attach notes explain­ its independent accountants. ing any discrepancy. ing controls that come to their atten­ (e) With respect to Item 5, a passenger DATE: Effective for all Forms 8-K tion during an examination of finan­ who “volunteers” is a person who responds and proxy materials filed with the cial statements in accordance with to the carrier’s request for volunteers pursu­ Commission after July 31,1978. such standards.1 ant to § 250.2b of CAB regulations and will­ The increased participation by the ingly consents to exchange his confirmed re­ FOR FURTHER INFORMATION independent accountant in the finan­ served space for a payment of the carrier’s CONTACT: cial reporting process makes it even choosing. Any passenger selected by the car­ rier for denied boarding in accordance with Gretta Powers, Office of the Chief more important that this relationship any boarding priority other than a request Accountant, Securities and Ex­ be fully understood and appreciated for volunteers is considered to have been change Commission, 500 North Cap­ by investors and other users of finan­ denied boarding “involuntarily,” whether or itol Street, Washington, D.C. 20549, cial information. To sustain confi­ not the passenger accepts denied boarding 202-376-8018. dence in financial statements by their compensation. SUPPLEMENTARY INFORMATION: users, the Commission and the ac­ (f) With respect to Item 8, “compensation The Commission published Securities counting profession require that audi­ paid” includes all payments made to passen­ tors remain independent, both in fact gers, i.e. payments actually accepted by pas­ Act Release No. 5868 (42 FR 53633) on sengers, plus payments offered or mailed September 26, 1977 in which it pro­ and appearance, of the companies that are not rejected. posed amendments to its Form 8-K (17 they audit. (g) Note on the report any abnormal con­ CFR 249.308) and Schedule 14A (17 ditions, such as strikes, having a bearing on CFR 240.14a-101) promulgated under R easons fo r C hange in I nd ependent the results. the Securities Exchange Act of 1934 A ccountants (Secs. 204, 403, 404 and 411, Federal Avi­ (15 U.S.C. 78a et seq.), regarding the The Commission has determined not ation Act of 1958, as amended, 72 Stat. 743, reporting of changes in a registrant’s to require at this time disclosure of 758, 760 and 769 (49 U.S.C. 1324, 1373, 1374 independent accountants to require the reasons for all changes in inde­ and 1381).) disclosure of (1) the reasons for such pendent accountants. The Commis­ Note.—The Civil Aeronautics Board is changes; and (2) whether the decision sion, however, encourages disclosure submitting this rule to the Comptroller to change independent accountants of these reasons on a voluntary basis. General for such review as may be appropri­ was approved by the registrant’s Respondents to the request for com­ ate under the Federal Reports Act, 44 Board of Directors or its audit commit­ ments were generally opposed to this U.S.C. 3512. The effective date of this rule tee. The second of these proposals is proposed disclosure requirement. accordingly reflects the inclusion of the 45- substantially adopted in this release; While those in favor stated it would be day period which that statute allows for the first is not. This release discusses such review. 44 U.S.C. 3512(c)(2). useful information for investors, few the background for the proposed provided elaboration beyond an initial By the Civil Aeronautics Board. amendments, the comments received expression of support, and none dis- and the final rules as adopted. P h y l l is T . K aylor, Secretary. B ackground 1 Statement of Auditing Standards No. 20, [FR Doc. 78-15415 Filed 6-2-78; 8:45 am] £ “Required Communication of Material Since 1971, the Commission has re­ Weaknesses in Internal Accounting Con­ quired specific disclosure in a timely trol,” AICPA, August 1977.

FEDERAL REGISTER, VOL. 43, NO. 108— MONDAY, JUNE 5, 1978