This edition of the Cozen O’Connor Aviation Regulatory Update discusses DOT’s final approval of antitrust immunity for Delta Air Lines and Aeromexico, DOT’s proceeding to reallocate some of Delta/Aeromexico’s Mexico City and JFK slots to other airlines, DOT’s proposed rule to require airlines and ticket agents to disclose baggage fees, the FAA’s final rule amending small aircraft airworthiness standards, new DOT training materials for airlines and their employees and contractors regarding compliance with Part 382 disabled passenger regulations, DHS’s increase of certain aviation-related civil penalties for violations of immigration and TSA rules, GAO criticism of U.S. Customs and Border Protection’s predeparture programs, and the latest DOT and FAA enforcement actions.
Department of Transportation
Regulatory
DOT Finalizes Decision Granting Antitrust Immunity to Delta Air Lines and Aeromexico and Requiring Slot Divestitures
DOT issued a final order granting antitrust immunity to Delta Air Lines and Aeromexico for their “Joint Cooperation Agreement” and other alliance agreements governing their joint venture operations between the U.S. and Mexico. DOT required the carriers to divest 24 slot pairs at Mexico City’s Benito Juarez International Airport (MEX) and four slot pairs at New York’s John F. Kennedy International Airport (JFK) to promote competition and access to the U.S.-Mexico City market. DOT found “substantial evidence” that Delta and Aeromexico “exert significant market power at MEX, control approximately 50 percent of MEX slots, and are able to use the MEX slot allocation system to their advantage by leveraging its non-standard rules to preclude competitive entry by other carriers.” In addition, DOT required the carriers to remove exclusivity provisions from their alliance agreements and limited the duration of their antitrust immunity to five years. DOT also issued an order instituting a proceeding to reallocate Delta/Aeromexico’s divested MEX and JFK slots to other carriers. Applications for the slots were filed by Alaska Airlines, JetBlue Airways, Southwest Airlines, vivaAerobus, and Volaris.
DOT Issues a Supplemental Proposed Rule on Airline Baggage Fee Disclosures
DOT issued a Supplemental Notice of Proposed Rulemaking (SNPRM) that would require U.S. and foreign air carriers and ticket agents to disclose to consumers ancillary service fee information for a first and second checked bag and one carry-on bag at all points of sale when fare and schedule information is provided to consumers. The SNPRM would also require carriers to provide baggage fee information to all ticket agents that distribute the carriers’ fare and schedule information, including GDSs and metasearch websites. Carriers would only be required to provide fee information to those ticket agents to which they provide fare and schedule information. DOT requested comments on whether it should also require disclosure of fees for advance seat assignment, changes and cancellations, priority boarding, and tickets, and the costs and challenges of implementing such a requirement. DOT also requested comments on whether it should require carriers and ticket agents to provide consumers, prior to online transactions being completed, a link to the carriers’ websites where flight change and cancellation information, including related fees, is available or to ticket agents’ websites that display carriers’ change and cancellation information. In addition, DOT requested comments on whether it should allow baggage fee information to be displayed by links or roll-overs on website displays or on certain mobile displays. Comments on the SNPRM are due March 20, 2017. It is currently unclear how the Trump administration’s freeze on new regulations will affect this rulemaking.
DOT Finds No Evidence of Airline Fare or Capacity Manipulation Resulting from Amtrak Derailment in Northeast Corridor
DOT issued letters closing its investigation of allegations that American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines unfairly raised airfares for travelers in the Northeast Corridor following the derailment of an Amtrak train near Philadelphia on May 12, 2015, which blocked rail service between Washington, D.C., and New York/Boston. Based on its analysis of over 5,000 pages of data submitted by the airlines, DOT’s Enforcement Office concluded that although airfares did increase on some air service routes following the derailment, fares also decreased on other routes, and there was no evidence of “unfair manipulation of airfares or capacity” or “unconscionable increases in fares beyond normal pricing levels in the aftermath of the derailment.”
DOT Publishes Training Materials for Airline Compliance with Part 382 Disabled Passenger Regulations
DOT issued new training materials for airlines and their employees and contractors addressing (1) wheelchair and guide assistance; (2) stowage, loss, delay, and damage to wheelchairs and other assistive devices; (3) aircraft seating accommodations; and (4) travel with service animals. The materials are intended to provide additional resources to carriers to use in their disability-related training. The new materials also include information for disabled passengers regarding their rights under the Air Carrier Access Act and Part 382. The materials include two videos, downloadable brochures that can be printed or viewed on a mobile device, and a tip sheet on wheelchair/guided assistance that airline personnel can carry and reference while assisting disabled passengers. DOT also announced that it plans to post on its website two interactive guides designed to supplement airline personnel and contractor training.
DOT Extends Response Deadline for Request for Information on Airline Industry Fare and Schedule Distribution and Display Practices
DOT issued a notice extending the deadline for airlines and other parties to respond to DOT’s request for information on airline industry fare and schedule distribution and display practices. The request for information was prompted by complaints from GDSs and online travel agencies that airline restrictions on the distribution and display of airline flight information and fares harmed consumers by blocking their access to information necessary to assist them in selecting air transportation service providers. DOT extended the response deadline from December 30, 2016, to March 31, 2017. The notice also addressed a request by Airlines for America for documents and data submitted to DOT in connection with issues addressed in the request for information.
DOT Announces Working Group on Small Community Air Service
DOT announced the members of its newly established Working Group on Improving Air Service to Small Communities, consisting of 25 stakeholders involved in small community air service. The Working Group was mandated by the 2016 FAA Reauthorization bill to advise Congress on issues relating to the improvement of air service to small communities. It will focus on the sufficiency of funding provided under the Essential Air Service Program, the Small Community Air Service Development Program, and the Airport Improvement Program, as well as small community air service issues related to the shortage of commercially qualified pilots. Using the recommendations provided by the Working Group, DOT is required to issue a report to Congress by July 15, 2017.
DOT Issues Proposed Amendments to Drug & Alcohol Testing Regulations for Certain Transportation Employees
DOT issued a notice of proposed rulemaking (NPRM) to amend its drug testing regulations applicable to transportation-related workers who perform safety-sensitive functions. The proposed rule would add four opioids (hydrocodone, hydromorphone, oxymorphone, and oxycodone) to DOT’s panel of drugs included under its testing requirements; add methylenedioxyamphetamine (MDA) as an initial test analyte; and remove methylenedioxyethylamphetamine (MDEA) as a confirmatory test analyte. The NPRM also clarifies certain drug-testing program provisions, removes obsolete information, and proposes to remove the requirement for employers and Consortium/Third Party Administrators to submit blind specimens. The proposed rule would harmonize DOT’s drug testing regulations with the revised Mandatory Guidelines established by the U.S. Department of Health and Human Services for Federal drug-testing programs for urine testing. Comments on the proposed rule are due March 24, 2017.
Enforcement
DOT Assesses $1.6 Million in Civil Penalties Against American Airlines for Alleged Tarmac Delay Violations
DOT issued a consent order assessing $1.6 million in civil penalties against American Airlines for alleged violations of DOT’s tarmac delay rules (14 CFR 259.4). DOT alleges that American failed to comply with its contingency plan assurances addressing lengthy tarmac delays for 27 flights operated between February 2013 and October 2015. According to DOT, 20 flights at Charlotte International Airport (CLT) failed to allow passengers to deplane after the required three-hour tarmac delay time limit. In addition, six flights at Dallas/Fort Worth International Airport (DFW) and one flight at Shreveport Regional Airport (SHV) exceeded the three-hour limit. American blamed poor weather conditions as a significant factor in causing the lengthy tarmac delays and asserted that it compensated passengers on all flights. American disagreed with DOT’s conclusion that tarmac delay-related violations are determined on a per person basis and argued that violations should instead be determined on a per flight or per day basis. American agreed to pay $695,000 of the penalty within 30 days, while $602,000 of the assessed penalty will be credited to American for its payment of compensation to affected passengers, and $303,000 will be credited to American for its cost of installing and operating a surface management and surveillance system to monitor aircraft locations in the airfields at CLT and DFW.
Federal Aviation Administration
Regulatory
FAA Issues Final Rule Amending Airworthiness Standards for Small Aircraft
The FAA issued a final rule amending Part 23 airworthiness standards for normal, utility, acrobatic, and commuter category airplanes. The amendments replace current aircraft design requirements and weight and propulsion regulations for small aircraft with performance- and risk-based rules for airplanes with a maximum seating capacity of 19 passengers or less and a maximum takeoff weight of 19,000 pounds or less. The final rule also increases safety requirements relating to loss of control and icing by adopting additional airworthiness standards on certification for flight in icing conditions, enhanced stall characteristics, and minimum control speed to prevent departure from controlled flight for multi-engine airplanes. The final rule is effective August 30, 2017.
FAA Announces Settlement with City of Santa Monica over Continued Airport Operations
The FAA announced a settlement agreement with the City of Santa Monica, Calif., to resolve a longstanding dispute over continued operations at Santa Monica Airport. The agreement requires the city to continue “stable” operation of the airport until December 31, 2028, after which the city may close the airport. The agreement also allows Santa Monica to shorten the airport's single runway to 3,500 feet from its current length of 4,973 feet.
FAA Amends Emergency Restrictions on Samsung Galaxy Note 7 Devices
The FAA issued a notice amending its Emergency Restriction/Prohibition Order No. FAA–2016–9288 regarding Samsung Galaxy Note 7 devices. The notice removed the requirement for air carriers to notify passengers immediately prior to boarding of the prohibition on the carriage of Samsung Galaxy Note 7 devices. The FAA removed the notification requirement due to recent efforts by Samsung and U.S. wireless providers to recall all Samsung Galaxy Note 7 devices and to make users aware that such devices are prohibited from transportation by air. The FAA continues to prohibit persons from transporting Samsung Galaxy Note 7 devices on their person, in carry-on baggage, in checked baggage, or as cargo. In addition, passengers who inadvertently bring a Samsung Galaxy Note 7 device onboard an aircraft are immediately required to power off the device, not use or charge the device while onboard the aircraft, protect the device from accidental activation, and keep the device on their person and not in the overhead compartment, seatback pocket, or in any carry-on baggage, for the duration of the flight. Air carriers are still required to deny boarding to passengers in possession of these devices unless such passengers remove them from their person and baggage. The notice was effective January 10, 2017.
FAA Extends Flight Prohibition Within the Damascus (OSTT) Flight Information Region
The FAA published a final rule extending its SFAR No. 114 (14 C.F.R. § 91.1609) prohibition on flights within the Damascus, Syria (OSTT) Flight Information Region (FIR) by all U.S. air carriers; U.S. commercial operators; persons exercising the privileges of a U.S. airman certificate (except when operating a U.S.-registered aircraft for a foreign air carrier); and operators of U.S.-registered civil aircraft (except foreign air carriers). The flight prohibition continues to be required due to hostilities in Syria and the presence of anti-aircraft weapons that are capable of threatening civil aircraft. In addition, foreign air carriers are prohibited from displaying U.S. air carriers’ designator codes on flights operated within the Damascus, Syria FIR. The final rule became effective on December 30, 2016.
Enforcement
FAA Assesses Civil Penalties Against SkyPan International for Alleged Unauthorized Unmanned Aircraft/Drone Operations
The FAA issued a release assessing civil penalties against SkyPan International, Inc. of Chicago for an alleged unauthorized operation of unmanned aircraft/drones in congested airspace over New York City and Chicago and violations of airspace regulations and aircraft operating rules. SkyPan agreed to pay $200,000 in civil penalties, with an additional $150,000 in penalties due if it violates Federal Aviation Regulations in the next year and $150,000 more if it fails to comply with the terms of its settlement agreement with the FAA. SkyPan agreed to cooperate with the FAA on three public service announcements over the next year to encourage unmanned aircraft/drone operators to learn and comply with the FAA’s unmanned aircraft/drone regulations. The agreement settles enforcement cases potentially involving $1.9 million in civil penalties proposed against SkyPan, the largest civil penalty the FAA has proposed against an operator of unmanned aircraft/drones.
FAA Proposes Civil Penalties Against Companies for Alleged Hazmat Violations
The FAA issued a release proposing the assessment of civil penalties against three companies for violations of the Hazardous Materials Regulations. The FAA proposed assessing a $72,000 civil penalty against South Korean company Posan Industry Co. Ltd. for tendering to DHL Express a shipment containing flammable solvents, paint, resins, and naphthenates. Also, Ohio-based Power Distributors was assessed a $63,000 civil penalty for offering UPS two containers of corrosive wood cleaner. Consolidated Container Company, LLC of Georgia received a $57,400 proposed civil penalty for tendering to FedEx a package that held four plastic containers of flammable liquid xylenes. In all three incidents, the packages leaked either before or during transport. The FAA alleges that the three companies failed to mark, label, package or accompany the shipment with shipping papers that identified the amount, type, and hazardous nature of the items being shipped. The FAA also alleges that the companies failed to include with the shipments the required emergency response information and did not ensure that the shipment handlers had received proper hazardous materials training. In addition, the FAA issued a release proposing a $201,250 civil penalty against Jegs Automotive Inc. of Delaware, Ohio, for allegedly offering an undeclared hazardous material shipment to FedEx for air transportation. The shipment allegedly contained three 32-ounce metal cans of Race Gas Fuel Concentrate, which is a flammable and toxic liquid.
Department of Homeland Security
DHS Issues Final Rule Adjusting Certain Aviation-Related Civil Penalty Amounts
DHS issued a final rule increasing certain civil monetary penalty amounts imposed on operators of commercial aircraft as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The final rule increases immigration-related civil penalties from $1,312 to $1,333 for non-compliance with arrival and departure manifest requirements for passengers, crewmembers, or occupants transported on commercial aircraft to/from the U.S.; from $3,563 to $3,621 for non-compliance with landing requirements at designated ports of entry for aircraft transporting aliens; from $3,005 to $3,054 for violations of removal orders relating to aliens transported on aircraft under section 241(d) of the Immigration and Nationality Act (INA), or for costs associated with removal under section 241(e) of the INA; from $7,512 to $ 7,635 for failure to remove alien stowaways under section 241(d)(2) of the INA; and from $5,345 to $5,432 for bringing to the U.S. aliens subject to denial of admission on a health-related ground or those without required documentation. TSA civil penalty amounts also increased for violations of certain aviation-related statutes, regulations, and orders that TSA administers. For violations of 49 U.S.C. chapter 449 (except sections 44902, 44903(d), 44907(a)–(d)(1)(A), 44907(d)(1)(C)–(f), 44908, and 44909), or 49 U.S.C. 46302 or 46303, or an implementing regulation or order applicable to “a person operating an aircraft for the transportation of passengers or property for compensation,” the civil penalty amounts were increased from $32,140 (up to a total of $514,244 per civil penalty action) to $32,666 (up to a total of $522,657 per civil penalty action). The new civil penalty amounts will be effective for penalties assessed after January 27, 2017, for violations that occurred after November 2, 2015. The final rule is immediately effective.
DHS Eliminates Exception for Cuban Nationals from Expedited Removal Requirements
DHS issued a final rule eliminating the categorical exception from expedited removal proceedings for Cuban nationals arriving in the United States by aircraft who lack valid immigration documents required for admission or entry or for obtaining a visa. Such Cuban nationals will now be subject to the generally applicable expedited removal proceedings used for nationals of other countries who lack necessary entry documentation. This change results from the recent expansion of U.S. relations with Cuba and the Cuban government’s agreement to accept and facilitate the repatriation of its nationals who are ordered removed from the United States. The final rule was effective January 13, 2017, and comments on the rule may be submitted on or before March 20, 2017.
Government Accountability Office
GAO Report Recommends Customs and Border Protection Implement Performance Measures to Monitor the Effectiveness of Its Predeparture Programs
GAO issued a report that criticized the U.S. Customs and Border Protection’s (CBP) monitoring of its predeparture programs to ensure the programs’ effectiveness. Under the programs, CBP monitors travelers to determine if they pose a high-security risk before they board U.S.-bound flights. CBP’s National Targeting Center compares traveler data against U.S. government database information to identify unknown travelers who are classified as high-risk. The GAO report analyzed CBP’s high-risk identification process, the current performance measures and success of the predeparture programs, and CBP’s plans for the programs’ expansion. GAO recommended that CBP adopts a performance measuring system to better evaluate the effectiveness of the predeparture programs.
Congressional Action Impacting Aviation
Aviation-Related Committee and Subcommittee Members Assigned for the 115th Congress
Congressional committees and subcommittees with oversight of aviation issues have confirmed their membership and named their chairpersons for the new (115th) Congress, retaining most of the same leaders as in the previous Congress. In the House, Congressman Bill Shuster (R-Pa.) will continue as chairman of the House Committee on Transportation and Infrastructure and Congressman Peter DeFazio (D-Ore.) will continue as ranking member. Congressman Frank LoBiondo (D-N.J.) will serve as chairman of the Aviation Subcommittee and Congressman Rick Larsen (D-Wash.) will serve as ranking member. Chairman Lobiondo has scheduled the Aviation Subcommittee’s first hearing this week on FAA reauthorization and proposals to establish an independent air traffic control organization.
On the House Committee on Homeland Security, which has jurisdiction over the Transportation Security Administration (TSA), Congressman Michael McCaul (R-Texas) retains his chairmanship, and Congressman Bennie Thompson (D-Miss.) remains as ranking member. Congresswoman Martha McSally (R-Ariz.) will serve as chairwoman of the Border and Maritime Security Subcommittee, and Congressman Filemon Vela (R-Texas) will serve as ranking member.
In the Senate, Senator John Thune (R-S.D.) will remain chairman of the Committee on Commerce, Science & Transportation and Senator Bill Nelson (D-Fla.) will continue as ranking member. Senator Roy Blunt (R-Mo.) and Senator Maria Cantwell (D-Wash.) will serve as chairman and ranking member, respectively, of the Subcommittee on Aviation Operations, Safety, and Security. Senator Ron Johnson (R-Wis.) will continue as chairman of the Senate Committee on Homeland Security & Governmental Affairs, and Senator Claire McCaskill (D-Mo.) will serve as ranking member.
Senate Confirms Elaine Chao as Secretary of the Department of Transportation
On January 31, 2017, the U.S. Senate voted 93-6 to confirm Elaine Chao as Secretary of Transportation. Senate Majority Leader Mitch McConnell (R-Ky.), Chao’s husband, voted present. Six Democratic senators opposed Chao’s confirmation, citing a lack of clarity on her position regarding President Trump’s Executive Order banning travel to the United States from seven Muslim countries, as well as her record as Secretary of Labor in the George W. Bush administration that was viewed as anti-labor.
House Homeland Security Committee Reports on Insider Security Threats at Airports
The House Homeland Security Committee on February 6, 2017, issued a report making nine recommendations to airports, airlines, and the U.S. Department of Homeland Security (DHS) to address potential security threats at U.S. airports posed by persons employed at those airports. The report proposed strengthening efforts to educate airport workers on the importance of securing access to sensitive airport areas, reassessing TSA and airport credentialing practices for such workers, and expanding the pre-employment screening process for persons employed to work at airports. The report also suggested that DHS and airports identify additional advanced security technology to bolster airport security, including implementation by TSA of the FBI’s “RapBack Service,” which would allow authorized agencies to receive notification of certain activities by credentialed employees at airports, including whether an individual is under criminal justice supervision or investigation, thus eliminating the need for repeated background checks. The report also recommended that TSA improve communication between various airport stakeholders.
