An Update on Aviation Regulatory Matters Involving DOT, FAA, TSA, Customs and Other Federal Agencies

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Department of Transportation

Regulatory

DOT Extends Comment Period on Passenger Protection Rulemaking

DOT published a notice on August 6 extending the comment period for its Transparency of Airline Ancillary Fees and Other Consumer Protection Issues rulemaking, better known as “Passenger Protection Rulemaking #3.” DOT extended the deadline for filing comments by an additional 30 days, with comments now due September 22, 2014.

DOT Grants Final Approval of IATA Resolution 787

On August 6, DOT issued a Final Order approving, subject to certain conditions, IATA’s Resolution 787, which would establish a process for airline development of a technical standard for data exchange in the air transportation marketplace using Extensible Markup Language (XML). IATA member airlines plan to use the new technical standard to further their goal in developing a “new distribution capability (NDC)” for air travel distribution that would allow carriers to develop “personalized pricing offers” for air travel consumers. DOT approval is limited to the creation of the XML communication standard, not the NDC itself. DOT stated that any future agreement among IATA members regarding air transportation distribution models would require DOT notification and approval.

Enforcement

DOT Penalizes Turkish Airlines for Failing to Provide Timely Responses to Passenger Complaints

DOT issued a consent order assessing a $300,000 civil penalty against Turkish Airlines, alleging the carrier failed to provide timely substantive written responses to complaints lodged by consumers, including disabled passengers. DOT ordered the carrier to pay $280,000 of the assessed civil penalty within 60 days and credited the remaining $20,000 of the assessed penalty to Turkish Airlines for vouchers that the carrier provided to affected consumers.

Federal Aviation Administration

Regulatory

FAA Publishes Repair Stations Final Rule

The FAA published on August 12 a final rule implementing certain changes regarding the FAA’s repair station certificate denial authority, information falsification penalties, and certificate surrender policies. However, the FAA withdrew most of the changes proposed in its May 21, 2012 NPRM because of issues raised by commenters. The final rule is effective November 10, 2014.

FAA Issues Statement on D.C. Circuit’s Dismissal of Drone-Related Petition for Review

The FAA issued a statement regarding the D.C. Circuit Court’s dismissal on July 18 of a petition for review and emergency motion for a stay filed by Texas EquuSearch Mounted Search and Recovery Team, which had sought the overturning and stay of an FAA inspector’s email that ordered the organization to “cease and desist” search and rescue operations using an unlicensed, unmanned aircraft. The court ruled that the FAA inspector’s email did not represent the FAA’s final agency action, “nor did it give rise to any legal consequences.” The FAA cited the court’s determination that the email was “not a formal cease-and-desist letter representing the agency’s final conclusion.” The FAA also reiterated that it remains “legally responsible” for the safety of the national airspace system, and that drones that are not operated as model aircraft remain subject to FAA regulation and, at a minimum, are required to be operated with a certificated aircraft, with a certificated pilot, and with specific FAA authorization. As a result of the court’s decision, counsel for Texas EquuSearch stated that it is not legally required to halt its drone operations and that the organization planned to resume such operations.

FAA Chief Counsel’s Office Issues Legal Interpretation on Operation of Drones as Public Aircraft for Educational Purposes

The FAA Chief Counsel’s Office issued a legal interpretation that prohibits universities from using their Certificate of Waiver or Authorization (COA) as a public aircraft operator to train university students to fly drones under the commercial purpose and governmental function provisions of 49 U.S.C. Section 40125(a)(l) and (2). The FAA held that education is not a valid governmental function that supports the operation of an aircraft, and drone training cannot be conducted as a public aircraft operation. The FAA said that operation of a public aircraft drone is limited to the governmental functions specifically listed in the statute, including “national defense, intelligence missions, firefighting, search and rescue, law enforcement, aeronautical research, or biological or geological resource management.” 

FAA Extends Comment Period on Its Interpretation of the Special Rule for Model Aircraft

The FAA published a notice extending the comment period on its Interpretation of the Special Rule for Model Aircraft that was issued on June 25 (see Cozen O’Connor Aviation Regulatory Update, July 2014). Comments on the Interpretation must now be received by September 23.

FAA Issues Legal Interpretation on Documents Required To Be Carried Onboard Unmanned Aircraft

On August 8, the FAA Chief Counsel’s Office issued a legal interpretation stating that pilots of drones may keep documents usually required to be carried onboard aircraft, such as airworthiness certificates, aircraft manuals, and aircraft registration certificates, at the drone’s ground control station. The FAA recognized the impracticality of carrying these documents onboard a small unmanned aircraft.

FAA Provides Opportunity for Informal Legal Conferences for Parties Subject to Certain Agency Orders

On August 12, the FAA issued a final rule that provides regulated parties the opportunity for an optional, informal conference with an FAA attorney before orders of compliance, cease and desist orders, and orders of denial are issued under 14 C.F.R. § 13.20. The final rule is effective October 14, 2014, and the FAA has requested that comments on the final rule be submitted on or before September 11, 2014.

Enforcement

FAA Proposes $12 Million in Civil Penalties Against Southwest Airlines for Safety Violations

The FAA proposed $12 million in civil penalties against Southwest Airlines for alleged safety violations. According to the FAA, Southwest’s contractor, Aviation Technical Services, Inc., failed to follow proper procedures for replacing the fuselage skins on the airline’s B-737 aircraft. The FAA found that the contractor applied sealant beneath newly installed skin panels but did not install fasteners in all of the rivet holes that would allow the sealant to be effective, possibly resulting in gaps between the skin and the surface that could allow moisture to penetrate the skin and lead to corrosion. The FAA alleged that Southwest returned the aircraft to service when they were not in compliance with Federal Aviation Regulations. The FAA also alleged that Southwest failed to properly install a ground wire on water drain masts on two B-737s in response to an FAA Airworthiness Directive addressing lightning strikes on those components. Southwest was provided 30 days to respond to the allegations.

FAA Proposes to Penalize Two Helicopter Companies for Alleged Safety-Related Violations

On July 31, the FAA proposed civil penalties against two operators, Air Evac EMS Inc. and Air Methods Corporation, for allegedly operating helicopters that were not in compliance with Federal Aviation Regulations. The FAA claimed that Air Methods violated its operations specifications by flying helicopters despite failing to perform required inspections of their Night Vision Imaging System Compatible Lighting Filtration installations. The agency also alleged that an Air Evac mechanic installed a chin bubble window on a Bell BHT 206 helicopter without following the manufacturer’s instructions, and then failed to document the installation in the aircraft’s maintenance logbook. The FAA proposed a $110,000 civil penalty against Air Evac EMS and a $428,000 civil penalty against Air Methods.

FAA Alleges Hazmat Violations by Four Companies

The FAA issued a press release on July 31 proposing civil penalties ranging from $63,000 to $91,000 against three companies for violating Hazardous Materials Regulations, and settled a case against another company for $54,000. The FAA claimed that the companies, Kuehne & Nagel, Inc., Pantropic Power, Inc., Superior International Industries, and Central Garden and Pet, Inc., did not declare the hazardous materials, the shipments were not properly classed, described, packaged, marked, labeled and in proper condition for shipment, and the companies did not ensure that their employees were properly trained for shipping hazardous materials.

Transportation Security Administration

Regulatory

Airlines Petition D.C. Circuit Court to Review TSA Passenger Security Fee Increase

Airlines for America and the International Air Transport Association (IATA) filed a petition for review challenging the Transportation Security Administration’s Interim Final Rule increasing the Passenger Civil Aviation Security Service Fee. The petition alleges that TSA disregarded the statute and “clear congressional intent” in improperly increasing the fee. The trade associations argue that the statute requiring the fee modification only changed the focus of the fee from “enplanements” to “one-way trips” without intending to change the existing round-trip cap on fees. They complain that instead of honoring congressional intent and accepting the increased fees on one-way trips authorized by the statute, TSA is trying to generate even more fees by eliminating the round-trip cap. In addition, they contend that TSA “flouted the plain language of the statute” by imposing fees on domestic segments of trips that originate outside the United States.

Pipeline and Hazardous Materials Safety Administration

Regulatory

PHMSA Publishes Final Rule to Prohibit Hazmat Operations for Non-Payment of Civil Penalties

On August 7, PHMSA issued a final rule amending the Hazardous Materials Regulations (HMR) to prohibit persons who fail to pay a hazmat-related civil penalty as ordered, or fail to abide by a payment agreement, from performing activities regulated by the HMR until payment is made. The final rule affects those who transport hazmat by air and violate the payment terms of an order for violations issued under 14 C.F.R. Section 13.16(c). The final rule is effective September 8, 2014.

Amendments Made to PHMSA Rules on the Transportation of Lithium Cells and Batteries

PHMSA published a final rule amending the HMR regarding the transport of lithium cells and batteries. The rule maintains the current prohibition on the transport of lithium metal cells and batteries on board passenger aircraft, while allowing aircraft operators to carry lithium batteries in the aircraft cabin to power devices such as electronic flight bags, onboard medical monitoring devices, and credit card readers used by the flight crew as appropriate, subject to approval by the FAA. The final rule took effect on August 6.

Customs and Border Protection/International Trade Administration

Regulatory

Customs, ITA Request Comments on Plan to Enhance Entry Process for Travelers Entering the United States

On July 22, Customs and Border Protection (CBP) and the International Trade Administration (ITA) published a notice and request for comments regarding the Obama administration’s Presidential Memorandum titled “Establishing a National Goal and Developing Airport Specific Action Plans to Enhance the Entry Process for International Travelers to the United States.” The memorandum directs the Departments of Commerce and Homeland Security, CBP’s and ITA’s parent agencies, to develop within 120 days a national goal for improving service levels for international travelers arriving at U.S. airports. It also directs the agencies to develop airport-specific action plans for both private and public sectors to “measurably improve” the entry experience for international arrivals. Comments were due on August 15.

Customs Extends Air Cargo Advance Screening Pilot Program

CBP also issued a notice on July 28 extending the Air Cargo Advance Screening (ACAS) Pilot Program through July 26, 2015 and reopening the application period for new program participants through September 26, 2014. The ACAS program is a voluntary test where participants submit a subset of mandatory advance electronic information for air cargo to CBP at the earliest point practicable prior to loading the cargo onto aircraft destined to or transiting through the United States. The ACAS information is used by CBP to target high risk cargo earlier in the supply chain. CBP is also using ACAS program information to identify possible amendments to its regulations regarding advance information for air cargo.

National Transportation Safety Board

Regulatory

NTSB Publishes NPRM on Investigation Procedures

The NTSB published a notice of proposed rulemaking on August 12 to reorganize certain of its investigation-related regulations under 49 C.F.R. Part 831 into distinct mode-specific subparts. In addition, the NPRM proposes changes to procedures to allow investigation party participants, under specific conditions, to share investigative information with supervisors for the purposes of making timely safety improvements without having to obtain prior permission from the NTSB. The NTSB also proposed certain amendments regarding its Statement of Party Representatives (commonly known as the "party agreement"). Comments on the proposed rule are due October 14, 2014.

U.S. Export-Import Bank

Regulatory

U.S. Export-Import Bank to Conduct Economic Impact Analysis of Chinese Airline Request for Boeing Aircraft Loan Guarantee

On July 23, the U.S. Export-Import Bank (Ex-Im Bank) published a notice of intent to conduct a detailed economic impact analysis with regard to an application it received for a loan guarantee to support the export of Boeing 777 and Boeing 737 passenger aircraft to be operated by an unnamed Chinese airline. Ex-Im Bank estimates the total value of the transaction to be more than $200 million and the amount of increased wide-body seat capacity represented by these aircraft to be 1 percent or more of comparable wide-body seat capacity within the U.S. airline industry. The aircraft will be used to operate passenger service both within China and internationally, potentially including to/from the U.S. Comments on Ex-Im Bank’s notice are due on August 6. Meanwhile, the dispute over Congressional reauthorization of E-Im Bank and the agency’s loan guarantees for commercial aircraft continues, with Boeing, Delta Air Lines and others lobbying either for changes in Ex-Im Bank’s charter or maintenance of the status quo. The issue of Ex-Im Bank reauthorization will be considered this fall once Congress returns from its summer recess.

Congressional Action Impacting Aviation

Transparent Airfares Act Passes House

On July 28, the House of Representatives passed the Transparent Airfares Act of 2014 (H.R. 4156), which would allow air carriers, ticket agents and other persons offering to sell airline tickets or air tour packages to state the base airfare and government-imposed taxes and fees separately in fare advertisements or solicitations as long as they also state the total cost of the ticket or tour package. If passed by the Senate and signed into law, the legislation would supersede DOT’s rules requiring airlines and others to advertise only the full ticket price, including taxes and fees.

House Passes Airport Security Legislation

The U.S. House of Representatives on July 22 passed by voice vote the Gerardo Hernandez Airport Security Act of 2014 (H.R. 4802), which requires the TSA to ensure that all U.S. airports where TSA oversees security have in place individualized working plans for responding to security incidents inside the airport perimeter. The bill also requires TSA to identify best practices across airports for security incident planning, management and training, and establish a mechanism for airport operators to share those best practices nationwide. In addition, the legislation requires TSA to annually certify to Congress that all screening personnel have been trained for “active shooter scenarios.” The bill was introduced in response to last November’s shooting death of a TSA screener at Los Angeles International Airport.

House Aviation Subcommittee Holds Hearing on Domestic Aviation Manufacturing and FAA Certification Issues

The House Aviation Subcommittee held a hearing on July 23 to discuss the state of U.S. aviation-related manufacturing and the challenges facing the industry. The hearing reviewed the FAA’s efforts to streamline the certification process for manufacturers and reduce regulatory inconsistencies, as well as problems encountered by the FAA in safely integrating unmanned aircraft into the national airspace system. Testimony was provided by representatives from the FAA, the Government Accountability Office (GAO), the General Aviation Manufacturers Association (GAMA), the Aerospace Industries Association (AIA), Hartzell Propellers Inc., and the Air Washington project. The GAO testified that the FAA’s Aircraft Certification Service has made some progress in making changes to the certification and approval process, and is working on improving the process for prioritizing requests for certifications and approvals (project sequencing) and reorganizing the small aircraft certification regulation. However, the GAO found that the FAA’s certification efforts face challenges from within the FAA that could delay the successful implementation of certification reforms. The GAO also expressed concerns that the FAA has not yet implemented performance measures for most of the initiatives, and without performance measures, the FAA will be unable to gather the appropriate data to evaluate the success of current and future certification initiatives.

 

Topics:  Aviation Industry, DOT, FAA, Transportation Security Administration

Published In: General Business Updates, Energy & Utilities Updates, International Trade Updates, Transportation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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