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Federal Register / Vol. 72, No. 223 / Tuesday, November 20, 2007 / Proposed Rules
with Indian Tribal Governments’’).
Because none of the options on which
we are seeking comment would
significantly or uniquely affect the
communities of the Indian tribal
governments or impose substantial
direct compliance costs on them, the
funding and consultation requirements
of Executive Order 13084 do not apply.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires an agency to
review regulations to assess their impact
on small entities unless the agency
determines that a rule is not expected to
have a significant economic impact on
a substantial number of small entities.
The regulatory initiatives discussed in
this ANPRM would have some impact
on some small entities but we do not
believe that it would have a significant
impact on a substantial number of small
entities. We invite comment to facilitate
our assessment of the potential impact
of these initiatives on small entities.

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E. Paperwork Reduction Act
The ANPRM proposes several new
collections of information that would
require approval by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act (49 U.S.C.
3501 et seq.) The ANPRM solicits
comment on requiring certificated and
commuter airlines that operate domestic
scheduled passenger service using any
aircraft with more than 30 passenger
seats to retain for two years the
following information about any ground
delay that triggers their contingency
plan or lasts at least four hours: (1) The
length of the delay, (2) the cause of the
delay, and (3) actions taken to minimize
hardships for passengers. The
Department plans to use this
information to conduct reviews of
incidents involving long delays on the
ground and to identify any trends and
patterns that may develop. The ANPRM
further proposes to require the
collection of flight delay data from
certain U.S. and foreign air carriers
regarding their flights to and from the
U.S. and also to require certain U.S.
carriers to compile and publish
complaint information. We invite
comments regarding any aspect of these
information collections, including the
following: (1) The necessity and utility
of the information collection, (2) the
estimated burden, (3) ways to enhance
the quality, utility, and clarity of the
information collected, and (4) ways to
minimize the collection burden without
reducing the quality of the information
collected.

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F. Unfunded Mandates Reform Act
The Department has determined that
the requirements of Title II of the
Unfunded Mandates Reform Act of 1995
do not apply to this notice.
Issued this 15th day of November, 2007, at
Washington, DC.
Michael W. Reynolds,
Deputy Assistant Secretary for Aviation and
International Affairs.
[FR Doc. 07–5760 Filed 11–15–07; 4:15 pm]
BILLING CODE 4910–13–P

DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 250
[Docket No. DOT–OST–01–9325]
RIN No. 2105–AD63

Oversales and Denied Boarding
Compensation
Office of the Secretary (OST),
Department of Transportation (DOT).
ACTION: Notice of Proposed Rulemaking
(NPRM).
AGENCY:

SUMMARY: The Department of
Transportation (DOT or Department) is
proposing to amend its rules relating to
oversales and denied boarding
compensation to increase the limits on
the compensation paid to ‘‘bumped’’
passengers, to cover flights by certain
U.S. and foreign air carriers operated
with aircraft seating 30 to 60 passengers,
which are currently exempt from the
rule, and to make other changes. Such
changes in the rule, if adopted, would
be intended to maintain consumer
protection commensurate with
developments in the aviation industry.
DATES: Comments are requested by
January 22, 2008. Late-filed comments
will be considered to the extent
practicable.

You may file comments
identified by the docket number DOT–
OST–01–9325 by any of the following
methods:
• Federal eRulemaking Portal: go to
http://www.regulations.gov and follow
the online instructions for submitting
comments.
• Mail: Docket Management Facility,
U.S. Department of Transportation, 1200
New Jersey Ave., SE., West Building
Ground Floor, Room W12–140,
Washington, DC 20590–0001.
• Hand Delivery or Courier: West
Building Ground Floor, Room W12–140,
1200 New Jersey Ave., SE., between 9
a.m. and 5 p.m. ET, Monday through
Friday, except Federal Holidays.

ADDRESSES:

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• Fax: (202) 493–2251.
Instructions: You must include the
agency name and docket number DOT–
OST–01–9325 or the Regulatory
Identification Number (RIN) for the
rulemaking at the beginning of your
comment. All comments received will
be posted without change to http://
www.regulations.gov, including any
personal information provided.
Privacy Act: Anyone is able to search
the electronic form of all comments
received in any of our dockets by the
name of the individual submitting the
comment (or signing the comment, if
submitted on behalf of an association,
business, labor union, etc.). You may
review DOT’s complete Privacy Act
statement in the Federal Register
published on April 11, 2000 (65 FR
19477–78), or you may visit http://
DocketsInfo.dot.gov.
Docket: For access to the docket to
read background documents or
comments received, go to http://
www.regulations.gov or to the street
address listed above. Follow the online
instructions for accessing the docket.
FOR FURTHER INFORMATION CONTACT: Tim
Kelly, Aviation Consumer Protection
Division, Office of the General Counsel,
Department of Transportation, 1200
New Jersey Ave., SE., Washington, DC
20590, 202–366–5952 (voice), 202–366–
5944 (fax), tim.kelly@dot.gov (e-mail).
SUPPLEMENTARY INFORMATION:
Background
Part 250 establishes minimum
standards for the treatment of airline
passengers holding confirmed
reservations on certain U.S. and foreign
carriers who are involuntarily denied
boarding (‘‘bumped’’) from their flights
because they have been oversold. In
most cases, bumped passengers are
entitled to compensation. Part 250
contains limits on the amount of
compensation that is required to be
provided to passengers who are bumped
involuntarily. The rule does not apply
to flights operated with aircraft with a
design capacity of 60 or fewer passenger
seats.
In adopting the original rule in the
1960’s, the Civil Aeronautics Board (the
Department’s predecessor in aviation
economic regulation) recognized the
inherent unfairness in carriers selling
more ‘‘confirmed’’ ticketed reservations
for a flight than they have seats.
Therefore, the CAB sought to reduce the
number of passengers involuntarily
denied boarding to the smallest
practicable number without prohibiting
deliberate overbooking or interfering
unnecessarily with the carriers’
reservations practices. Air travelers

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receive some benefit from controlled
overbooking because it allows flexibility
in making and canceling reservations as
well as buying and refunding tickets.
Overbooking makes possible a system of
confirmed reservations that can almost
always be honored. It allows airlines to
fill more seats, reducing the pressure for
higher fares, and makes it easier for
people to obtain reservations on the
flights of their choice. On the other
hand, overbooking is the major cause of
oversales, and the people who are
inconvenienced are not those who do
not show up for their flights, but
passengers who have conformed to all
carrier rules. The current rule allocates
the risk of denied boarding among
travelers by requiring airlines to solicit
volunteers and use a boarding priority
procedure that is not unjustly
discriminatory.
In 1981, the CAB amended the
oversales rule to exclude from the rule
all operations using aircraft with 60 or
fewer passenger seats. (ER–1237, 46 FR
42442, August 21, 1981.) At the time of
that proceeding, the impact of the rule
on carriers operating small aircraft was
found to be significant. If a passenger
was denied boarding on a typical small
aircraft short-haul flight and
subsequently missed a connection to a
long-haul flight, the short-haul carrier
usually had to compensate the
passenger in an amount equal to twice
the value of the passenger’s remaining
ticket coupons to his or her destination,
subject to a maximum limitation. For
example, if the short-haul fare was $50
and the connecting long-haul fare was
$500, the first carrier often had to pay
the passenger denied boarding
compensation in an amount far greater
than $50, depending on whether
alternate transportation could be
arranged to arrive within a short time,
despite the minimal fare that the first
carrier received for its flight. The
problem was exacerbated by the fact
that most commuter airline flights at the
time were on small turboprop and
piston engine aircraft which were
affected by weight limitations in high
temperature/humidity conditions to a
greater extent than jets and, therefore,
might require bumping even when the
carrier did not book beyond the seating
capacity of the aircraft.
Part 250 has tended to reduce
passenger inconvenience and financial
loss occasioned by overbooking without
imposing heavy burdens on the airlines
or significant costs on the traveling
public. In focusing only on the
treatment of passengers whose boarding
is involuntarily denied, we have
avoided regulating carriers’ reservations
practices. Overall, it appears that the

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rule has served a useful purpose;
however, in light of recommendations
from various sources, including
Congress and major airlines themselves,
we are proposing to revise certain
aspects of the rule that may be outdated.
In view of the passage of time since the
rule was last revised and changes in
commercial air travel over that time, we
are seeking comment on whether we
should increase the compensation
maximums and extend the rule to cover
a broader range of aircraft, or whether
we should adopt other more
fundamental changes to the rule. The
Department is also seeking comment on
certain other changes of lesser impact
that are under consideration.
The Current Denied Boarding
Compensation Rule
The purpose of the Department’s
denied boarding compensation rule is to
balance the rights of passengers holding
reservations with the desirability of
allowing air carriers to minimize the
adverse economic effects of ‘‘no-shows’’
(passengers with reservations who
cancel or change their flights at the last
minute). The rule sets up a two-part
system. The first encourages passengers
to voluntarily relinquish their
confirmed reservations in exchange for
compensation agreed to between the
passenger and the airline. The second
requires that, where there is an
insufficient number of volunteers,
passengers who are bumped
involuntarily be given compensation in
an amount specified in the rule. In
addition, the Department requires
carriers to give passengers notice of
those procedures through signs and
written notices provided with tickets
and at airports, and to report the
number of passengers denied boarding
to the Department on a quarterly basis.
The Civil Aeronautics Board (CAB)
first required payments to bumped
passengers 45 years ago. In Order No. E–
17914, dated January 8, 1962, the CAB
conditioned its approval of ‘‘no-show
penalties’’ for confirmed passengers on
a requirement that bumped passengers
be compensated. An oversales rule was
adopted in 1967 as 14 CFR Part 250
(ER–503, 32 FR 11939, August 18, 1967)
and revised substantially in 1978 and
1982 after comprehensive rulemaking
proceedings (ER–1050, 43 FR 24277,
June 5, 1978 and ER–1306, 47 FR 52980,
November 24, 1982, respectively). The
key features of the current requirements
are as follows:
(1) In the event of an oversold flight,
the airline must first seek volunteers
who are willing to relinquish their seats
in return for compensation offered by
the airline.

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(2) If there are not enough volunteers,
the airline must use non-discriminatory
procedures (‘‘boarding priorities’’) in
deciding who is to be bumped
involuntarily.
(3) Most passengers who are
involuntarily bumped are eligible for
denied boarding compensation, with the
amount depending on the price of each
passenger’s ticket and the length of his
or her delay. If the airline can arrange
alternate transportation that is
scheduled to arrive at the passenger’s
destination within 2 hours of the
planned arrival time of the oversold
flight (4 hours on international flights),
the compensation equals 100% of the
passenger’s one-way fare to his or her
next stopover or final destination, with
a $200 maximum. If the airline cannot
meet the 2 (or 4) hour deadline, the
compensation rate doubles to 200% of
the passenger’s one-way fare, with a
$400 maximum. This compensation is
in addition to the value of the
passenger’s ticket, which the passenger
can use for alternate transportation or
have refunded if not used.
(4) There are several exceptions to the
compensation requirement.
Compensation is not required if the
passenger does not comply fully with
the carrier’s contract of carriage or tariff
provisions regarding ticketing,
reconfirmation, check-in, and
acceptability for transportation; if an
aircraft of lesser capacity has been
substituted for operational or safety
reasons; if the passenger is offered
accommodations in a section of the
aircraft other than that specified on the
ticket, at no extra charge (a passenger
seated in a section for which a lower
fare is charged is entitled to an
appropriate refund); or if the carrier
arranges comparable transportation, at
no extra cost to the passenger, that is
planned to arrive at the passenger’s next
stopover or final destination not later
than 1 hour after the planned arrival
time of the passenger’s original flight.
(5) A passenger who is denied
boarding involuntarily may refuse to
accept the denied boarding
compensation specified in the rule and
seek monetary or other compensation
through negotiations with the carrier or
by private legal action.
(6) Carriers must post counter signs
and include notices with tickets to alert
travelers of their overbooking practices
and the consumer protections of the
rule. In addition, they must provide a
detailed written notice explaining their
oversales practices and boarding
priority rules to each passenger
involuntarily denied boarding, and to
any other person requesting a copy.

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(7) Every carrier must report, on a
quarterly basis, data on the number of
denied boardings on flights that are
subject to Part 250.

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Discussion
On July 10, 2007, the Department
published an Advance Notice of
Proposed Rulemaking (ANPRM) seeking
comment on several issues associated
with the oversales rule. We received
over 1,280 comments in response to the
ANPRM. About 20 of the comments
were from organizations, with the rest
from individuals. Most of the comments
from the organizations, including those
from air carriers and organizations
representing air carriers, expressed the
opinion that the rule serves a useful
purpose and had benefited the industry
and the public. Many of the individual
comments did not express an opinion
on the specific issues discussed in the
ANPRM but rather urged that
overbooking be banned, described their
own negative air travel experiences, or
commented on other issues (e.g., flight
delays).
In this Notice of Proposed
Rulemaking we are not proposing to ban
overbooking as many individual
commenters urged. As indicated in the
section above entitled ‘‘The Current
Denied Boarding Compensation Rule,’’
air travelers receive some benefit from
controlled overbooking. Overbooking
makes possible a system of confirmed
reservations that can almost always be
honored. It allows airlines to fill more
seats, reducing the pressure for higher
fares, and makes it easier for people to
obtain reservations on the flights of their
choice. We are not aware of levels of
consumer harm that require such a
sweeping solution at this time, and
banning overbooking is beyond the
scope of our objectives in this
proceeding. We believe that the
additional oversale protections that we
are proposing here will address the
principal issues related to this
regulation that require action by the
Department.
The issues that were presented in the
ANPRM and a summary of the
comments appear below.
The Maximum Amount of Denied
Boarding Compensation
It has been over 20 years since the
rule was last revised, and the existing
$200 and $400 limits on the amount of
required denied boarding compensation
for passengers involuntarily denied
boarding have not been raised since
1978. The Department has received
recommendations from various sources
that it reexamine its oversales rule and,
in particular, the maximum amounts of

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compensation set forth in the rule. In
this regard, in a sense-of-the-Senate
amendment to the Department of
Transportation and Related Agencies
Appropriations Act of 2000, Public Law
106–69, the Senate noted its sense that
the Department should amend its
denied boarding rule to double the
applicable compensation amounts.
Legislation has also been introduced in
Congress to require the Department to
review the rule’s maximum amounts of
compensation. (See S. 319, reported in
the Senate April 26, 2001.) In addition,
in his February 12, 2000, Final Report
on Airline Customer Service
Commitments, the Department’s
Inspector General (IG) recommended,
among other things, that the airlines
petition the Department to increase the
amount of denied boarding
compensation payable to involuntarily
bumped passengers. In response thereto,
and citing the length of time since the
maximum amounts of denied boarding
compensation were last revised, the Air
Transport Association (the trade
association of the larger U.S. airlines)
filed a petition with the Department on
April 3, 2001, requesting that a
rulemaking be instituted to examine
those amounts.1 (Docket DOT–OST–01–
9325). Most recently, the IG on
November 20, 2006, issued his ‘‘Report
on the Follow-up Review Performed of
U.S. Airlines in Implementing Selected
Provisions of the Airline Customer
Service Commitment’’ in which the IG
recommended that we determine
whether the maximum denied boarding
compensation (DBC) amount needs to be
increased and whether the oversales
rule needs to be extended to cover
aircraft with 31 through 60 seats.
The CAB’s decision in 1978 to double
the maximum amount of denied
boarding compensation to $400 was
based on its determination that the
previous maximum was inadequate to
redress the inconvenience to bumped
passengers and that the increase would
provide a greater incentive to carriers to
reduce the number of persons
involuntarily bumped from their flights.
Following promulgation of the
amendment to the rule in 1978 requiring
the solicitation of volunteers and
doubling the compensation maximum,
the overall industry rate of involuntary
1 It is important to note that the maximum
involuntary denied boarding amounts set forth in
Part 250 are amounts below which carriers cannot
set their maximum compensation. Airlines have
been and continue to be free, as a competitive tool,
to set their maximum compensation levels at
amounts greater than that provided in the
Department’s rule. With the exception of JetBlue
Airways, whose recently changed policy is
described below, we are not aware of any carrier
that has elected to do so.

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denied boardings per 10,000
enplanements in fact declined for many
years. Until 2007, the rate for the past
decade has been slightly below the level
of involuntary bumping reported 10
years ago. In this regard, 55,828
passengers were involuntarily bumped
from their flights in 2006 on the 19
largest U.S. airlines (carriers whose
denied boarding rate is tracked in the
Department’s monthly Air Travel
Consumer Report 2). Additional
passengers were bumped by other
airlines, whose denied boarding rate is
not tracked in this report but whose
bumped passengers are subject to the
maximum compensation rates in the
DOT rule. The annual rate of
involuntary denied boardings per
10,000 enplanements in 2006 for the
carriers tracked in the report is the
highest since 2000, and that trend
continues in the rate for 2007 to date.
Involuntary denied boarding rates from
the Air Travel Consumer Report for the
past ten years and 2007 to date appear
below:
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
through 3rd quarter .........

Invol. DB’s
per 10,000
passengers
1.06
0.87
0.88
1.04
0.82
0.72
0.86
0.86
0.89
1.01
1.21

(The table above has been updated from
the one published in the ANPRM to include
data for 2007 to date.)

Likely contributing to this upward
trend is the fact that flights are fuller:
from 1978 to 2006 the system-wide load
factor (percentage of seats filled) for U.S.
airlines increased from 61.5% to 79.2%,
with most of this increase taking place
since 1994. The most-recently reported
monthly load factors have hovered in
the mid-80% range.
With respect to the denied boarding
compensation limits, inflation has
eroded the $200 and $400 limits that
were established in 1978. Using the
Consumer Price Index for All Urban
Consumers (CPI–U, the basis for the
inflation adjustor in the Department’s
domestic baggage liability rule, 14 CFR
254.6), the July 2007 ANPRM noted that
2 This report tracks the denied boarding rate of air
carriers that each account for at least 1% of
domestic scheduled-service passenger revenues for
the previous year. Consequently, the list of carriers
whose performance is tracked in this report can
change from year to year.

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$400 in 1978 was worth $128 as of
February 2007 ($125 as of October
2007). See the Bureau of Labor Statistics
Inflation Calculator at http://
www.bls.gov/cpi/home.htm. Stated
another way, in order to have the same
purchasing power today as in 1978,
$400 would have needed to be $1,248 in
February 2007 and $1,279 as of October
2007.
At the same time, however, air fares
have not risen to the same extent as the
CPI–U. While historical comparisons of
air fares are problematic, one frequentlyused index for changes in air fares is
passenger yield. Yield is passenger
revenue divided by revenue passenger
miles—the revenue collected by airlines
for carrying one passenger for one mile.
According to the Air Transport
Association, system-wide nominal yield
(i.e., not adjusted for inflation) for all
reporting U.S. air carriers was 8.29 cents
per revenue passenger mile in 1978 and
12.00 cents per revenue passenger mile
in 2005 (latest available data at the time
of the ANPRM)—an increase of 44.8%.
The figure for 2006, which became
available after the ANPRM was
published, is 12.69 cents, an increase of
53.1% from the 1978 figure.
Applying the CPI-U calculation to the
current $200 and $400 DBC limits that
were established in 1978 would produce
updated limits of $624 and $1,248
respectively at the time of the ANPRM.
However, the ANPRM noted that
applying the 44.8% increase in
passenger yield through 2005 to the
current $200 and $400 limits would
produce updated limits of $290 and
$580 respectively ($306 and $612 if the
2006 yield figure is used). It is
important to note that the $200 and
$400 figures in Part 250 are merely
limits on the amount of denied boarding
compensation; the actual compensation
rate is 100% or 200% of the passenger’s
fare (depending on how long he or she
was delayed by the bumping). In the
ANPRM, the Department requested
comment on whether the maximums in
the rule should be increased so that that
a higher percentage of denied boarding
compensation payments are not
‘‘capped’’ by the limits.
Consequently, in the ANPRM we
sought comment on five options with
respect to the limits on the amount of
denied boarding compensation, as well
as any other suggested changes:
(1) Increase the $200/$400 limits to
approximately $624 and $1,248
respectively, based on the increase in
the CPI as described above;
(2) Increase the $200/$400 limits to
approximately $290 and $580
respectively, based on the increase in
passenger yield as described above;

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(3) Double the maximum amounts of
denied boarding compensation from
$200 to $400 and from $400 to $800;
(4) Eliminate the limits on
compensation altogether, while
retaining the 100% and 200%
calculations;
(5) Take no action, i.e. leave the
current $200/$400 limits in place.
It is important to note that none of
these proposals would necessarily
require carriers to offer more
compensation to the great majority of
passengers affected by overbooking
because most such situations are
handled through voluntary
compensation, typically at the departure
gate. Nor would they affect the
significant proportion of involuntarily
bumped passengers—possibly the
majority—with fares low enough that
the formula for involuntary denied
boarding compensation would not reach
the proposed new limits. Finally, even
with respect to involuntarily bumped
passengers whose denied boarding
compensation might increase with
higher maximums, many such
passengers accept a voucher for future
travel on that airline (usually in a face
amount greater than the legally required
denied boarding compensation) in lieu
of a check. Carriers make such offers
because vouchers do not have the same
value as cash compensation given high
rates of non-use and inventorymanagement restrictions.
Comments
The vast majority of the comments in
the docket are from individuals (as
opposed to organizations). On the issue
of the denied boarding compensation
monetary limits, 79 of these individual
commenters favored option #1—
increase these limits to approximately
$624 and $1,248 based on the increase
in the CPI. 20 of the individual
commenters were in favor of option #3,
doubling the current limits to $400 and
$800. Another 146 individual
commenters expressed the opinion that
the current limits should be increased
but did not cite a specific amount. Two
individual commenters favored an
increase in the limits based on the
increase in passenger yield (air fares),
and three said that the limits should be
eliminated (option #4). None of the
individual comments indicated that the
Department should take no action
(option #5).
In its comments, the Air Transport
Association (which represents the larger
U.S. airlines) presented arguments it
said justify the practice of overbooking
and keeping compensation level as they
now are. ATA noted that on most
oversold flights there are enough

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volunteers and consequently no
involuntary denied boardings. The
organization stated that the real cost of
air fares (i.e., adjusted for inflation) has
fallen since the denied boarding
compensation limits were last adjusted.
According to ATA, the current caps are
likely to exceed the required
compensation levels (i.e., 100% or
200% of the bumped passenger’s fare) in
the large majority of cases. ATA believes
that no adjustment in the compensation
caps is warranted at this time, but if
there is an adjustment, it should be
based on the change in yield (air fares)
because, the association asserted,
denied boarding compensation amounts
have always been tied to the passenger’s
fare.
The International Air Transport
Association, which represents
international airlines worldwide,
supported ATA’s position that there
should be no change in the limits. The
Regional Airline Association shared this
view as well. Like ATA, RAA went on
to say that if the Department does adjust
the limits it should do so based on the
air fare/yield index rather than the CPI
because denied boarding compensation
has always been tied to airline ticket
prices. The Association of Asia Pacific
Airlines supported an increase in the
caps based on the fare/yield index, for
the same reasons cited by ATA and
RAA.
The National Air Carrier Association
commented that no change in the
compensation limits is necessary. If the
Department were to make a change, this
organization said that it would
reluctantly support an increase based on
fares/yields (option #2) or eliminating
the caps altogether (option #4). NACA
noted that adopting option #4 would
remove the need for periodic
adjustments in the caps, which was
another issue on which the ANPRM had
sought comment.
The American Society of Travel
Agents states that adjusting the
compensation limits based on the CPI is
workable but acknowledges a
disconnect between air fares and the
CPI. Consequently, ASTA favors
doubling the current limits, to strike a
balance between the CPI and yield
options and because of the simplicity of
this approach.
The Airports Council International—
North America also favors doubling the
caps, to $400 and $800. ACI–NA was
concerned that the CPI option would set
a limit that is inappropriately high
while a limit based on air fares would
capture only passengers with an
‘‘average’’ fare.
Qantas Airways and Qatar Airways
supports an increase on the caps that is

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based on fares/yields. Air Pacific,
JetBlue Airways, and Air Tahiti Nui
oppose any increase, with the latter
carrier emphasizing the industry’s costs
and slim profits. JetBlue, which notes
that it does not intentionally oversell
flights, points out that when it must
unexpectedly deny boarding
involuntarily, it pays the passenger
$1,000—considerably more than the
current regulatory formulas and limits
and more than most of the proposed
limits. JetBlue urges the Department to
allow carrier competition to govern
denied boarding compensation limits in
this manner.
The International Airline Passengers
Association advocates option #3,
doubling the current limits. Like other
commenters, it submits that air fares are
not generally tied to inflation.
The Air Crash Victims Families Group
advocated increasing the compensation
limits ‘‘to the standard/value existing at
the time the Regulation is put into
force’’ without specifying a
methodology for the update. This group
also urged the Department to ban
overbooking with respect to prepaid
tickets, harmonize its rule with the
oversales rule of the European
Community, mandate uniform boarding
priorities for all carriers, and eliminate
the exception to compensation for
passengers bumped as a result of
substitution of aircraft of lesser capacity.
The Coalition for an Airline
Passengers Bill of Rights suggests that
the Department mandate denied
boarding compensation in a flat amount
of $1,000 regardless of the passenger’s
fare or the length of his/her delay—
essentially the JetBlue policy.
As indicated earlier, in 2006 over
55,000 passengers were denied boarding
involuntarily by the 19 carriers that
were tracked at that time in the
Department’s Air Travel Consumer
Report (i.e., the 17 largest U.S. air
carriers and two voluntarily reporting
carriers). We assume that an increase in
the regulatory maximums would result
in an increase in amounts paid to such
passengers but we requested comment
on the likely financial impact, including
both the direct impact (increased cash
compensation), and the indirect impact
resulting from either lower overbooking
rates or higher voluntary compensation
levels. Although we received useful
general comments, commenters
provided very little data supporting the
conclusion that any of the increases in
denied boarding compensation on
which we requested comment would
have a significant financial impact on
any segment of the industry.

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Response to Comments
The Department has decided to
propose to amend its oversales rule to
double the limits on involuntary denied
boarding compensation from $200 to
$400 for passengers who are rerouted
within two hours (four hours
internationally) and from $400 to $800
for passengers who are not rerouted
within these timeframes. As many
commenters pointed out, there is a
significant air-fare component to the
denied boarding compensation formula
(100%/200% of the bumped passenger’s
fare), and air fares have risen less than
the CPI. As indicated above, systemwide nominal yield (not adjusted for
inflation) for all reporting U.S. air
carriers, which is a frequently used
index for changes in air fares, was 8.29
cents per revenue passenger mile in
1978 and 12.69 cents per revenue
passenger mile in 2006, an increase of
53.1%. Nonetheless, we will not
propose the ‘‘fares/yield’’ option from
the ANPRM as the sole method for
updating the compensation caps.
Denied boarding compensation is
intended in part to compensate for the
passenger’s inconvenience, lost time,
and lost opportunities. The value of
these considerations is linked to general
inflation as well as to the cost of air
fares. Therefore, the arguments of the
carrier organizations about the decline
in real (i.e., inflation-adjusted) air fares
during that period are somewhat off the
mark, because consumers live with
some of the consequences of denied
boarding in today’s dollars, not 1978
dollars. As we indicated in the ANPRM,
30 years of inflation have also taken
their toll on the value of the existing
limits. As noted above, $400 in 1978 is
worth $128 today, based on the change
in the CPI–U. Therefore, we propose to
base part of an increase in the
compensation caps on the CPI–U.
By proposing to double the existing
limits we would blend these two
approaches. The proposed limits fall
between the higher figures that would
be produced by the CPI option and the
lower numbers that would result from
the ‘‘fares/yield’’ option. We seek
comment on this proposal, including
any comments and justifications that
were not already provided in response
to the ANPRM about alternative
amounts or methodologies.
Periodic Adjustment of the Limits
In the ANPRM we also requested
comment on whether we should amend
the rule to include a provision for
periodic adjustments to the denied
boarding compensation maximums, as
is required by our baggage liability rule

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65241

(14 CFR part 254). As in the case of the
baggage rule, we stated that the
Department could review the CPI–U
every two years, and adjust the
maximum amounts accordingly. The
new maximum DBC amounts could be
rounded to the nearest $50, for
simplicity. We suggested that any
increase could be announced by
publishing a notice in the Federal
Register rather than first publishing a
proposed rule to effectuate an increase.
We requested comment on this
approach.
Comments
All 34 of the individuals who
commented on this issue believed that
the compensation limits should be
adjusted on a regular basis.
Many of the comments from
organizations noted that denied
boarding compensation is based on the
bumped passenger’s air fare and that air
fares have risen more slowly than the
CPI–U. RAA in particular stated that CPI
can and often does move in the reverse
direction of airline ‘‘yields’’ (average
fares). ATA opposed any periodic
adjustment in the compensation caps.
ASTA supports periodic adjustment
based on the CPI as described in the
ANPRM. The Association of Asia Pacific
Airlines opposes adding an adjustment
mechanism to the rule and recommends
amending the caps only when
necessary. The Air Crash Victims
Families Group and the Coalition for an
Airline Passengers Bill of Rights support
regular CPI-based adjustment of the
caps. The International Airline
Passengers Association states that the
caps ‘‘should be tied to a periodic
review process to enable adjustments if
necessary.’’
Response to Comments
If the rule is adopted as proposed, we
plan to institute a procedure of
reviewing the compensation caps every
two years. As part of this review, the
Department would determine if the
compensation caps should be adjusted
based on both the CPI and the change
in fare yields as we did in proposing the
doubling of the caps to $400 and $800
in this NPRM (see above). We are,
however, not proposing the approach
described in the ANPRM of the periodic
adjustment in the compensation caps
being automatic (no additional comment
period provided). Instead, we plan to
institute a de novo rulemaking each
time we seek to adjust the DBC
maximum amount to allow the public
an opportunity to provide input to the
Department as to whether there are any
reasons (not anticipated at the time of
this rulemaking) not to increase the DBC

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maximum amounts based on DOT’s
analysis. We seek comment on the
advantages or disadvantages of the
Department continually adjusting the
denied boarding compensation
maximum amounts through notice and
comment rulemaking. Also, commenters
who think that the proposed two-year
period for considering adjustments to
the compensation caps is not
appropriate, or believe the frequency
should be more or less than two years,
should explain why and suggest
alternate approaches.
The Small-Aircraft Exclusion
The oversales rule originally issued
by the CAB did not contain an exclusion
for small aircraft. In 1981 that agency
amended Part 250 to exclude operations
with aircraft seating 60 or fewer
passengers. The CAB determined that
without this exclusion the denied
boarding rule imposed a proportionately
greater financial and operational burden
on these small-aircraft operators than on
carriers operating larger aircraft. In
addition, because of the lower revenues
generated by these small aircraft, the
financial burden of denied boarding
compensation placed certificated
carriers operating aircraft with 60 or
fewer seats at a competitive
disadvantage relative to commuter
carriers (non-certificated) operating
similar equipment and on similar routes
which were not subject to Part 250. The
number of flights that was excluded by
the amendment was small and most
such flights were operated by small
carriers that operated small aircraft
exclusively. Thus, Part 250 currently
applies to certificated U.S. carriers and
foreign carriers holding a permit, or
exemption authority, issued by the
Department, only with respect to
operations performed with aircraft
seating more than 60 passengers.
While largely exempt from the denied
boarding rule, the regional airline
industry has experienced tremendous
growth. According to the Regional
Airline Association 3, passenger
enplanements on regional carriers have
increased more than 100% since 1995,
and regional airlines now carry one out
of every five domestic air travelers in
the United States. RAA states that
revenue passenger miles on regional
carriers have increased 40-fold since
1978 and increased 17 percent from
2004 to 2005 alone. Regional jets have
fueled much of the recent growth.
According to RAA, from 1989 to 2004
the number of turbofan aircraft (regional
jets) in the regional-airline fleet
increased from 54 to 1,628 and regional
3 See

www.raa.org.

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jets now make up 59% of the regionalcarrier fleet. Although many regional
jets have more than 60 passenger seats
and thus are subject to Part 250, the
ubiquitous 50-seat and smaller regional
jet models have driven much of the
growth of the regional-carrier sector.
Moreover, most regional jets are
operated by regional carriers affiliated
with a major carrier via a code-share
agreement and/or an equity stake in the
regional carrier. RAA asserts that 99%
of regional airline passengers traveled
on code-sharing regional airlines in
2005.
DOT statistics demonstrate the growth
in traffic on flights operated by aircraft
with 31 through 60 seats. The ANPRM
provided statistics through the fourth
quarter of 2005, but information for
2006 has subsequently become
available. From the fourth quarter of
2002 (earliest available consistent data)
to 4Q 2006 the number of flights using
aircraft with 31 through 60 seats
increased by 13.5% while the number of
flights using aircraft with more than 60
seats rose only 3.4%. The number of
passengers carried on flights using
aircraft with 31 through 60 seats
increased by 34.9% from 4Q 2002
through 4Q 2006, while the number of
passengers carried on flights using
aircraft with more than 60 seats rose by
only 12.1% during that period.4
The increased use of jet aircraft in the
30-to-60 seat sector accompanied by the
increase in the ‘‘branding’’ of those
operations with the codes and livery of
major carriers has blurred the
distinction between small-aircraft and
large-aircraft service in the minds of
many passengers. There would seem to
be little, if any, difference to a consumer
bumped from a small aircraft or a large
aircraft—the effect is the same. The
Department therefore sought comment
on whether we should extend the
consumer protections of Part 250 to
these flights (including flights of noncertificated commuter air carriers) and
thus scale back the small-aircraft
exception that was added to the rule in
1981. Specifically, the Department
requested comment on whether it
should reduce the seating-capacity
exception for small aircraft from ‘‘60
seats or less’’ to ‘‘less than 30 seats’’ and
add commuter carriers to the list of
carriers to which Part 250 applies. Since
the Department is aware that many
regional carriers already voluntarily
provide DBC to passengers bumped
from their 30-to-60-seat aircraft,
commenters were specifically asked to
include in their comments data
regarding oversales and denied boarding
4 DOT

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compensation in operations with
aircraft having 30 through 60 seats by
both certificated and non-certificated
carriers, to the extent it is available.
Comments
All 155 individuals who commented
on this issue advocated extending the
rule to aircraft with 30 through 60 seats.
A couple of these commenters said it
should only be extended to aircraft that
operate flights in the name of a major
carrier. More than half of the 155
individual commenters on this issue
said that the rule should also apply to
aircraft with fewer than 30 seats.
Among the organizations that
commented, ATA urges the Department
not to change the current exception for
aircraft with 60 or fewer seats. It asserts
that these aircraft not only are more
susceptible than larger airplanes to
unpredictable operational constraints,
but that these aircraft often operate at
smaller airports where shorter runways
can limit capacity on hot days. RAA
echoed the latter comment and also
quoted from the preamble to the Civil
Aeronautics Board’s 1981 oversales
exemption for aircraft with 60 or fewer
seats that acknowledged that these
aircraft were ‘‘assuming an increasingly
significant role in the national air
transportation system’’ but concluded
that the denied boarding compensation
levels in the regulation would be a
disproportionate penalty relative to the
typical short-haul fare. RAA also noted
the costs of complying with the same
FAA rules as operators of larger aircraft
and the disproportionate cost impact of
suggested per-aircraft user fees.
The Air Carrier Association of
America (which represents certain lowfare airlines), the American Society of
Travel Agents, the Association of Asia
Pacific Airlines and JetBlue Airways are
in favor of extending the oversales rule
to operations using aircraft with 30
through 60 seats for the reasons
described in the ANPRM. JetBlue notes
that even large aircraft are susceptible to
load limits based on heat and altitude,
and it asserts that 57% of the flights
operated in August 2007 for American,
Continental, Delta, Northwest, United
and U.S. Airways were on regional jets.
[Some of those regional jets no doubt
have more than 60 seats and thus are
already subject to the oversales rule, but
many are not.] ACAA provided data
showing that regional jets account for
half or nearly half of all departures at
most hub airports. It notes that regional
jets with more than 60 seats are subject
to the rule while those with 60 or fewer
seats are not.
Peninsula Airways urges the
Department not to extend the rule to

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commuter operations solely within the
state of Alaska, or in the alternative to
expand the rule only to regional jets,
e.g., by extending the regulation to
aircraft with 35 or more seats rather
than 30 or more, thereby continuing to
exempt the vast majority of propeller
aircraft. Hawaii Island Air
recommended that the rule only be
extended to 30-through-60 seat aircraft
operated by a carrier that also operates
large aircraft.

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Response to Comments
For the reasons described in the
ANPRM, we are proposing to extend the
applicability of the oversales rule to
flights using aircraft with 30 or more
seats. Since the time that the CAB
exempted this sector of the industry
from the rule in 1981, the vast majority
of operations at this level have become
affiliated and integrated with the
‘‘brand’’ of a major carrier. A higher
percentage of these flights than was the
case in 1981 are operated with larger
aircraft in this under-60 seat exempted
range (to a large extent regional jets),
and are affected by weather constraints
less frequently than aircraft with less
than 30 seats. In recent times, aircraft
with 30 through 60 seats have been
substituted for larger airplanes on
numerous routes. The vast majority of
the traffic that would be covered by this
initiative is carried by airlines that are
owned by or affiliated with a major
carrier or its parent company. Moreover,
a significant amount, if not most, of the
service on such flights is provided
under a ‘‘fee-for-service’’ arrangement,
where a major carrier dictates the
market, the schedule, and the price of
the flight, and the tickets may not even
be sold under the regional carrier’s code
so that the passenger’s contract of
carriage covering the transportation is
solely with the major carrier. In such
circumstances, the flights are for all
legal and practicable purposes flights of
the major carrier, not the regional
airline, in which case the major carrier
is responsible for providing denied
boarding compensation on the flights of
the smaller carrier. While we are
sensitive to the operational challenges
faced by operators of aircraft with 30
through 60 seats, we now believe that
consumers who purchase transportation
in this aircraft class are entitled to the
protections of the oversales rule.
Because this is a proposal, however, we
invite additional comment on the issue
of the seating capacity of the aircraft to
which the rule should apply.

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Boarding Priorities and Notice to
Volunteers
Boarding priority rules determine the
order in which various categories of
passengers will be involuntarily
bumped when a flight is oversold. Part
250 states that boarding priority rules
must not provide any undue or
unreasonable preference. The IG in his
2000 report identified possible
ambiguities in the Department’s
requirements regarding boarding
priority rules, and he recommended that
we provide examples of what we
consider to be an undue or unreasonable
preference. The IG was also concerned
that the amounts of compensation
provided passengers who are
involuntarily bumped was in some
cases less than the face value of
vouchers given to passengers who
volunteer to give up their seats. He
therefore recommended, in addition to
raising the maximum compensation
amounts for involuntarily bumped
passengers, as discussed above, that we
require carriers to disclose orally to
passengers, at the time the airline makes
an offer to volunteers, what the airline
is obligated to pay passengers who are
involuntarily bumped.
Our boarding priority requirement
was designed to give carriers the
maximum flexibility to set their own
procedures at the gate, while affording
consumers protection against unfair and
unreasonable practices. Thus, the rule
(1) requires that airlines establish their
own boarding priority rules and criteria
for oversale situations consistent with
Part 250’s requirement to minimize
involuntary bumpings and (2) states that
those boarding priority rules and criteria
‘‘shall not make, give, or cause any
undue or unreasonable preference or
advantage to any particular person or
subject any particular person to any
unjust or unreasonable prejudice or
disadvantage in any respect
whatsoever.’’ (14 CFR 250.3(a))
Although we are not aware of any
problems resulting from this rule as
written, we agree that guidance
regarding this provision would be useful
to the industry and public alike.
Accordingly, in the ANPRM we
requested comment on whether the
Department should list in the rule, as
examples of permissible boarding
priority criteria, the following:
• A passenger’s time of check in
(first-come, first-served);
• Whether a passenger has a seat
assignment before reaching the
departure gate for carriers that assign
seats;
• A passenger’s fare;
• A passenger’s frequent flyer status;
and

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• Special priorities for passengers
with disabilities, within the meaning of
14 CFR part 382, or for unaccompanied
minors.
We stated in the ANPRM that the five
examples proposed here are illustrative
only, and not exclusive. We did not
intend by these examples to foreclose
the use by carriers of other boarding
priorities that do not give a passenger
undue preference or unjustly prejudice
any passenger.
Accurately notifying passengers of
their rights in an oversale situation is
important, so that they can make an
informed decision. Part 250 already
contains requirements designed to
accomplish that objective and to protect
passengers from being involuntarily
bumped if they have not been accorded
adequate notice. Section 250.2b(b)
prohibits a carrier from denying
boarding involuntarily to any passenger
who was earlier asked to volunteer
without having been informed about the
danger of being denied boarding
involuntarily and the amount of
compensation that would apply if that
occurred. While this provision would
appear to provide adequate incentive for
airlines to provide complete notice to
passengers who are asked to volunteer,
and to protect those passengers not
provided such notice, we see some
merit in making this notice requirement
more direct. Accordingly, we seek
comment on whether we should amend
section 250.2b to affirmatively require
that, no later than the time a carrier asks
a passenger to volunteer, it inform that
person whether he or she is in danger
of being involuntarily bumped and, if
so, the compensation the carrier is
obligated to pay.
Comments
There were only a handful of
individual comments on the issue of
boarding priorities; most of them
favored the Department’s proposal.
There was virtually no comment from
individuals about the volunteer notice.
Most of the commenters from the
airline industry and IAPA stated that it
is not necessary to list specific
permissible boarding priorities. Some of
the industry commenters said that they
do not oppose this as long as it’s clear
that the list is illustrative and does not
restrict carriers from having other
boarding priorities. (Boarding priorities
must be disclosed in the written notice
required by section 250.9 of the rule.)
The Air Crash Victims Families Group
urged the Department to mandate
uniform boarding priorities for all
carriers. The Coalition for an Airline
Passenger Bill of Rights stated that
carriers should be required to make

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boarding priorities more widely
available; it also urges the Department
to prohibit boarding priorities that are
based on the passenger’s fare.
The industry commenters as a group
opposed the proposal to provide
additional notice to volunteers, stating
that it was unduly restrictive. The
consumer organizations did not
comment on this issue.

rmajette on PROD1PC64 with PROPOSALS

Response to Comments
For the reasons articulated in the
ANPRM and summarized above, and
consistent with the recommendation of
the IG, we propose to revise the rule to
affirmatively require that, no later than
the time a carrier asks a passenger to
volunteer, it inform that person whether
he or she is in danger of being
involuntarily bumped and, if so, the
compensation the carrier is obligated to
pay, and to list the following examples
of permissible boarding priority criteria:
• A passenger’s time of check in
(first-come, first-served);
• Whether a passenger has a seat
assignment before reaching the
departure gate for carriers that assign
seats;
• A passenger’s fare;
• A passenger’s frequent flyer status;
and
• Special priorities for passengers
with disabilities, within the meaning of
14 CFR part 382, or for unaccompanied
minors.
As we stated in the ANPRM, we
propose that these five examples be
illustrative only, and not exclusive.
Reporting
Section 250.10 of the current rule
requires all carriers that are subject to
Part 250 to file a quarterly report (Form
251) on oversale activity. Due to staffing
limitations, for many years the only
carriers whose oversale data have been
routinely reviewed, entered into an
automated system, or published by the
Department are the airlines that are
subject to the on-time performance
reporting requirement. Those are the
U.S. carriers that each account for at
least 1 percent of total domestic
scheduled-service passenger revenues—
currently 20 airlines (see 14 CFR 234).
For a current list of these carriers, see
the Department’s Air Travel Consumer
Report at http://
airconsumer.ost.dot.gov/reports/
index.htm. This report provides data for
these airlines in four areas: On-time
performance, baggage mishandling,
oversales, and consumer complaints.
The oversale data for that report are
derived from the Form 251 reports
mandated by Part 250. The data in the
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carriers is not keypunched,
summarized, published, or routinely
reviewed.
In the ANPRM the Department
requested comment on whether it
should revise section 250.10 to relieve
all carriers of this reporting requirement
except for the airlines whose data is
being used, i.e., U.S. carriers reporting
on-time performance under Part 234.
Those airlines account for the vast
majority of domestic traffic and
bumpings, so the Department will still
receive adequate information and the
public will continue to have access to
published data for the same category of
carriers as before. Such action would be
consistent with the Paperwork
Reduction Act and the Regulatory
Flexibility Act. It would also result in
consistent carrier reporting
requirements for all four sections of the
Air Travel Consumer Report.
Comments
Only four of the individual
commenters expressed an opinion on
this issue; all four of them favored the
Department’s proposal. ATA and
JetBlue believe that this reporting
requirement should be retained. The
other industry commenters supported
the proposal to eliminate this
requirement for all but the ATCTreported carriers. The consumer
organizations did not weigh in on this
issue.
Response to Comments
For the reasons articulated in the
ANPRM and summarized above, we
propose to revise the rule to relieve all
carriers of this reporting requirement
except for ‘‘reporting carriers’’ as
defined in 14 CFR 234.2 and any carrier
that voluntarily submits data pursuant
to section 234.7 of that part. At the
present time this is 20 airlines.
Regulatory Notices
A. Executive Order 12866 (Regulatory
Planning and Review) and DOT
Regulatory Policies and Procedures
This action has been determined to be
significant under Executive Order 12866
and the Department of Transportation
Regulatory Policies and Procedures. It
has been reviewed by the Office of
Management and Budget under that
Order. A preliminary discussion of
possible costs and benefits of the
proposed rule is presented above and in
the accompanying Regulatory
Evaluation. The Regulatory Evaluation
concluded that the benefits of the
proposals appear to exceed the costs. A
copy of the Regulatory Evaluation has
been placed in the docket.

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B. Executive Order 13132 (Federalism)
This Notice of Proposed Rulemaking
has been analyzed in accordance with
the principles and criteria contained in
Executive Order 13132 (‘‘Federalism’’).
This notice does not propose any
regulation that: (1) Has substantial
direct effects on the States, the
relationship between the national
government and the States, or the
distribution of power and
responsibilities among the various
levels of government; (2) imposes
substantial direct compliance costs on
State and local governments; or (3)
preempts state law. Therefore, the
consultation and funding requirements
of Executive Order 13132 do not apply.
C. Executive Order 13084
This notice has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13084 (‘‘Consultation and Coordination
with Indian Tribal Governments’’).
Because none of the options on which
we are seeking comment would
significantly or uniquely affect the
communities of the Indian tribal
governments and would not impose
substantial direct compliance costs, the
funding and consultation requirements
of Executive Order 13084 do not apply.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires an agency to
review regulations to assess their impact
on small entities unless the agency
determines that a rule is not expected to
have a significant economic impact on
a substantial number of small entities.
Certain elements of these proposed rules
may impose new requirements on
certain small air carriers, but the
Department believes that the economic
impact would not be significant. All air
carriers have control over the extent to
which the rule impacts them since they
control their own overbooking rates.
Carriers can mitigate the cost of denied
boarding compensation by obtaining
volunteers who are willing to give up
their seat for less compensation than
what the rule mandates for passengers
who are bumped involuntarily, and by
offering travel vouchers in lieu of cash
compensation.
The vast majority of the traffic that
would be covered by the oversales rule
for the first time as a result of the
options on which we seek comment is
carried by airlines that are owned by or
affiliated with a major carrier or its
parent company. Moreover, a significant
amount, if not most, of the service on
such flights is provided under a ‘‘feefor-service’’ arrangement, where a major

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carrier dictates the market, the schedule,
and the price of the flight, and the
tickets may not even be sold under the
regional carrier’s code so that the
passenger’s contract of carriage covering
the transportation is solely with the
major carrier. In such circumstances, the
flights are for all legal and practical
purposes flights of the major carrier, not
the regional airline, in which case the
major carrier is responsible for
providing denied boarding
compensation on the flights of the
smaller carrier. The monetary costs of
most of these options result in a
corresponding dollar-for-dollar
monetary benefit for members of the
public who are bumped from their
confirmed flights and for small
businesses that employ some of them.
The options provide an economic
incentive for carriers to use more
efficient overbooking rates that result in
fewer bumpings while still allowing the
carriers to fill seats that would go
unsold as the result of ‘‘no-show’’
passengers. It is worth noting that one
of the options on which we are seeking
comment relieves an existing reporting
requirement for all but the largest
carriers. For all these reasons, I certify
that this rule, if adopted, would not
have a significant economic impact on
a substantial number of small entities.
E. Paperwork Reduction Act
The provisions that we are proposing
impose no new information reporting or
recordkeeping necessitating clearance
by the Office of Management and
Budget. They relieve a reporting
requirement for many carriers that are
currently subject to that requirement.
One required handout that airlines
distribute to bumped passengers would
require minor revisions.
F. Unfunded Mandates Reform Act
The Department has determined that
the requirements of Title II of the
Unfunded Mandates Reform Act of 1995
do not apply to this notice.
List of Subjects in 14 CFR Part 250
Air carriers, Consumer protection,
Reporting and recordkeeping
requirements.

rmajette on PROD1PC64 with PROPOSALS

1. The authority citation for part 250
continues to read as follows:

2. Section 250.1 is amended by
removing the definition of ‘‘large

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Jkt 214001

6. Section 250.5(a) is revised to read
as follows:

§ 250.1

*

§ 250.5 Amount of denied boarding
compensation for passengers denied
boarding involuntarily.

§ 250.2

(a) Subject to the exceptions provided
in § 250.6, a carrier to whom this part
applies as described in § 250.2 shall pay
compensation to passengers denied
boarding involuntarily from an oversold
flight at the rate of 200 percent of the
fare (including any surcharges and air
transportation taxes) to the passenger’s
next stopover, or if none, to the
passenger’s final destination, with a
maximum of $800. However, the
compensation shall be one-half the
amount described above, with a $400
maximum, if the carrier arranges for
comparable air transportation [see
section 250.1], or other transportation
used by the passenger that, at the time
either such arrangement is made, is
planned to arrive at the airport of the
passenger’s next stopover, or if none,
the airport of the passenger’s final
destination, not later than 2 hours after
the time the direct or connecting flight
from which the passenger was denied
boarding is planned to arrive in the case
of interstate air transportation, or 4
hours after such time in the case of
foreign air transportation.
*
*
*
*
*
7. Section 250.9(b) is revised to read
as follows:

Definitions.

*
*
*
*
Carrier means:
(1) A direct air carrier, except a
helicopter operator, holding a certificate
issued by the Department pursuant to 49
U.S.C. 41102 or that has been found fit
to conduct commuter operations under
49 U.S.C. 41738, authorizing the
scheduled transportation of persons; or
(2) A foreign route air carrier holding
a permit issued pursuant to 49 U.S.C.
41302, or an exemption from that
provision, authorizing the scheduled
foreign air transportation of persons.
*
*
*
*
*
3. Section 250.2 is revised to read as
follows:
Applicability.

This part applies to every carrier, as
defined in § 250.1, with respect to flight
segments using an aircraft that has a
designed passenger capacity of 30 or
more passenger seats, operating in
interstate air transportation or foreign
air transportation with respect to
nonstop flight segments originating at a
point within the United States.
4. In § 250.2b paragraph (b) is
amended by removing the last sentence
and adding a new first sentence to read
as follows:
§ 250.2b Carriers to request volunteers for
denied boarding.

*

*
*
*
*
(b) Every carrier shall advise each
passenger solicited to volunteer for
denied boarding, no later than the time
the carrier solicits that passenger to
volunteer, whether he or she is in
danger of being involuntarily denied
boarding and, if so, the compensation
the carrier is obligated to pay if the
passenger is involuntarily denied
boarding.
5. Section 250.3(b) is added to read as
follows:
Boarding priority rules.

*

PART 250—[AMENDED]

Authority: 49 U.S.C. chapters 401, 411,
413, 417.

aircraft’’ and revising the definition of
‘‘Carrier’’ to read as follows:

§ 250.3

For the reasons set forth in the
preamble, we propose to amend 14 CFR
part 250 as follows:

65245

*
*
*
*
(b) The Department has determined
that acceptable boarding priority factors
may include, but are not limited to, the
following:
(1) A passenger’s time of check in;
(2) Whether a passenger has a seat
assignment before reaching the
departure gate for carriers that assign
seats;
(3) The fare paid by a passenger;
(4) A passenger’s frequent-flyer status;
and
(5) A passenger’s disability or status
as an unaccompanied minor.

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§ 250.9 Written explanation of denied
boarding compensation and boarding
priorities.

*

*
*
*
*
(b) The statement shall read as
follows:
Compensation for Denied Boarding
If you have been denied a reserved seat on
(name of air carrier), you are probably
entitled to monetary compensation. This
notice explains the airline’s obligation and
the passenger’s rights in the case of an
oversold flight, in accordance with
regulations of the U.S. Department of
Transportation.
Volunteers and Boarding Priorities
If a flight is oversold (more passengers hold
confirmed reservations than there are seats
available), no one may be denied boarding
against his or her will until airline personnel
first ask for volunteers who will give up their
reservation willingly, in exchange for a
payment of the airline’s choosing. If there are
not enough volunteers, other passengers may
be denied boarding involuntarily in
accordance with the following boarding
priority of (name of air carrier): (In this space
the carrier inserts its boarding priority rules
or a summary thereof, in a manner to be
understandable to the average passenger.)

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65246

Federal Register / Vol. 72, No. 223 / Tuesday, November 20, 2007 / Proposed Rules

Compensation for Involuntary Denied
Boarding
If you are denied boarding involuntarily,
you are entitled to a payment of ‘‘denied
boarding compensation’’ from the airline
unless: (1) you have not fully complied with
the airline’s ticketing, check-in and
reconfirmation requirements, or you are not
acceptable for transportation under the
airline’s usual rules and practices; or (2) you
are denied boarding because the flight is
canceled; or (3) you are denied boarding
because a smaller capacity aircraft was
substituted for safety or operational reasons;
or (4) you are offered accommodations in a
section of the aircraft other than specified in
your ticket, at no extra charge (a passenger
seated in a section for which a lower fare is
charged must be given an appropriate
refund); or (5) the airline is able to place you
on another flight or flights that are planned
to reach your next stopover or final
destination within one hour of the planned
arrival time of your original flight.

rmajette on PROD1PC64 with PROPOSALS

Amount of Denied Boarding Compensation
Passengers who are eligible for denied
boarding compensation must be offered a
payment equal to their one-way fare to their
destination (including connecting flights) or
first stopover of four hours or longer, with a
$400 maximum. However, if the airline
cannot arrange ‘‘alternate transportation’’ (see
below) for the passenger, the compensation is
doubled ($800 maximum). The fare upon
which the compensation is based shall
include any surcharge and air transportation
tax.
‘‘Alternate transportation’’ is air
transportation (by any airline licensed by
DOT) or other transportation used by the
passenger which, at the time the arrangement
is made, is planned to arrive at the
passenger’s next scheduled stopover of four
hours or longer or, if none, the passenger’s
final destination, no later than 2 hours (for
flights between U.S. points, including
territories and possessions) or 4 hours (for
international flights) after the passenger’s
originally scheduled arrival time.
Method of Payment
Except as provided below, the airline must
give each passenger who qualified for
involuntary denied boarding compensation a
payment by cash or check for the amount
specified above, on the day and at the place
the involuntary denied boarding occurs. If
the airline arranges alternate transportation
for the passenger’s convenience that departs
before the payment can be made, the
payment shall be sent to the passenger within
24 hours. The air carrier may offer free or
discounted transportation in place of the
cash payment. In that event, the carrier must
disclose all material restrictions on the use of
the free or discounted transportation before
the passenger decides whether to accept the
transportation in lieu of a cash or check
payment. The passenger may insist on the
cash/check payment or refuse all
compensation and bring private legal action.
Passenger’s Options
Acceptance of the compensation may
relieve (name of air carrier) from any further

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liability to the passenger caused by its failure
to honor the confirmed reservation. However,
the passenger may decline the payment and
seek to recover damages in a court of law or
in some other manner.

*

*

§ 250.10

*

*

*

BILLING CODE 4910–9X–P

[Amended]

8. In the first sentence of § 250.10, the
word ‘‘carrier’’ is replaced with the
phrase ‘‘reporting carrier as defined in
14 CFR 234.2 and any carrier that
voluntarily submits data pursuant to
section 234.7 of that part.’’
9. Section 250.11(a) is revised to read
as follows:
§ 250.11 Public disclosure of deliberate
overbooking and boarding procedures.

(a) Every carrier shall cause to be
displayed continuously in a
conspicuous public place at each desk,
station and position in the United States
which is in the charge of a person
employed exclusively by it, or by it
jointly with another person, or by any
agent employed by such air carrier or
foreign air carrier to sell tickets to
passengers, a sign located so as to be
clearly visible and clearly readable to
the traveling public, which shall have
printed thereon the following statement
in boldface type at least one-fourth of an
inch high:
Notice—Overbooking of Flights
Airline flights may be overbooked,
and there is a slight chance that a seat
will not be available on a flight for
which a person has a confirmed
reservation. If the flight is overbooked,
no one will be denied a seat until airline
personnel first ask for volunteers willing
to give up their reservation in exchange
for compensation of the airline’s
choosing. If there are not enough
volunteers, the airline will deny
boarding to other persons in accordance
with its particular boarding priority.
With few exceptions, including failure
to comply with the carrier’s check-in
deadline (carrier shall insert either ‘‘of
ll minutes prior to each flight
segment’’ or ‘‘(which are available upon
request from the air carrier)’’ here),
persons denied boarding involuntarily
are entitled to compensation. The
complete rules for the payment of
compensation and each airline’s
boarding priorities are available at all
airport ticket counters and boarding
locations. Some airlines do not apply
these consumer protections to travel
from some foreign countries, although
other consumer protections may be
available. Check with your airline or
your travel agent.
*
*
*
*
*

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Fmt 4702

Issued this 15th day of November, 2007, at
Washington, DC.
Michael W. Reynolds,
Deputy Assistant Secretary for Aviation and
International Affairs.
[FR Doc. 07–5761 Filed 11–15–07; 4:15 pm]

Sfmt 4702

DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Parts 141 and 385
[Docket No. RM07–18–000]

Elimination of FERC Form No. 423
November 2, 2007.

Federal Energy Regulatory
Commission, DOE.
ACTION: Notice of proposed rulemaking.
AGENCY:

SUMMARY: In this Notice of Proposed
Rulemaking, the Federal Energy
Regulatory Commission (Commission) is
proposing to amend its regulations to
eliminate the FERC Form No. 423,
Monthly Report of Cost and Quality of
Fuels for Electric Plants. The
Commission’s infrequent use of the
information no longer justifies the
burden and cost of collecting it.
Conversely, the Energy Information
Administration has expressed a need for
this information and, upon cessation of
the Commission’s collection, proposes
to collect the information, as part of its
newly proposed EIA–923.
DATES: Comment deadline: Comments
are due December 20, 2007.
ADDRESSES: You may submit comments
identified by Docket No. RM07–18–000,
by one of the following methods:
• eFiling: From the Commission’s
Web site: http://www.ferc.gov, follow
the instructions for submitting
comments electronically found by
selecting eFiling under the Documents &
Filing heading.
• Mail: Commenters unable to file
comments electronically must mail or
hand deliver an original and 14 copies
of their comments to the Federal Energy
Regulatory Commission, Secretary of the
Commission, 888 First Street, NE.,
Washington, DC 20426.
Please refer to the Comment
Procedures section for additional
information.
FOR FURTHER INFORMATION CONTACT:
Lawrence Greenfield (Legal
Information), Office of the General
Counsel—Energy Markets, Federal
Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426,

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