This edition of the Cozen O’Connor Aviation Regulatory Update discusses the FAA’s regulatory reform review, the FAA’s and PHMSA’s increases in civil penalty amounts, recent amendments of hazardous materials regulations, the Congressional oversight hearing on U.S. airlines’ customer service and contracts of carriage, and the latest DOT and FAA enforcement actions.
Department of Transportation
Enforcement
DOT Assesses $60,000 in Civil Penalties Against Spirit Airlines for Alleged Tarmac Delay Violations
DOT issued a consent order against Spirit Airlines for alleged failure to inform passengers of the option to deplane during a lengthy flight delay at the gate. On December 27, 2015, a Spirit Airlines flight from Orlando to Houston, was diverted to New Orleans due to bad weather. Once the flight landed in New Orleans, the aircraft remained at the gate with the aircraft doors open for a period longer than 30 minutes. DOT said that beginning 30 minutes after the flight arrived at the gate and every 30 minutes thereafter until the aircraft pushed back from the gate, Spirit was required to notify passengers that they could deplane the aircraft if they wished to do so. DOT found that Spirit violated 14 CFR § 259.4(b)(6) and 49 U.S.C. § 41712, and assessed the carrier $60,000 in civil penalties. Spirit was required to pay $30,000 of the assessed penalty within 30 days of the service date of the consent order, with the remaining $30,000 due and payable if, within one year of the issuance of the order, Spirit violates the order’s cease and desist provisions or fails to comply with the order’s payment provisions.
Dynamic International Airways Assessed $120,000 in Civil Penalties for Alleged Public Charter and Reporting Violations
DOT issued a consent order assessing $120,000 in civil penalties against Dynamic International Airways for alleged violations of DOT’s public charter requirements regarding the provision of prompt refunds and cancellation notifications to passengers after flight cancellations, as well as DOT’s carrier reporting requirements. Dynamic allegedly failed to provide refunds in a timely manner to passengers impacted by cancelled flights, as required by 14 CFR § 380.32(k). DOT also found that Dynamic violated 14 CFR § 380.12(b) by failing to provide written notice to passengers after cancellations more than ten days out from their return flights. In addition, DOT alleged that in 2016, Dynamic consistently failed to file its monthly and quarterly financial reports in a timely manner as required by DOT’s Bureau of Transportation Statistics. Dynamic was ordered to pay $60,000 in six monthly installments, with the remaining $60,000 due and payable if Dynamic violates the order’s cease and desist provisions within one year of the issuance date of the order or fails to comply with the order’s payment provisions. Dynamic’s assessed penalties were increased due to its violation of the cease and desist provisions of DOT Order 2016-3-23.
Federal Aviation Administration
Regulatory
FAA Aviation Rulemaking Advisory Committee Tasked with Making Regulatory Reform Recommendations
The FAA issued a notice announcing that its Aviation Rulemaking Advisory Committee (ARAC) has been assigned the task of making recommendations on repealing, replacing, or modifying existing FAA regulations as necessary. The regulatory review and its resulting recommendations have been prompted by the Trump administration’s Executive Order on ‘‘Enforcing the Regulatory Reform Agenda,’’ which requires each federal agency to establish a “Regulatory Reform Task Force” to evaluate existing regulations and make recommendations for their repeal, replacement, or modification. As part of this review, the ARAC is required to evaluate the FAA’s regulations to determine if any regulations should be repealed, replaced or modified, and identify those that a) eliminate jobs or inhibit job creation; b) are outdated, unnecessary, or ineffective; c) impose costs that exceed benefits; or d) create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies. ARAC is also required to 1) provide a detailed explanation for recommending the repeal, replacement or modification of each regulation; 2) provide quantitative data on the costs and benefits of either repealing, replacing or modifying each regulation in the recommendation report; 3) review the FAA’s current regulatory actions identified in the regulatory agenda, and provide feedback on the FAA’s current regulatory review program; and 4) develop an initial report and an addendum report containing recommendations on the ARAC’s findings. The initial recommendation report is due to be submitted to the FAA by June 1, 2017, to allow for consideration of ARAC approval at the June 15, 2017, ARAC meeting. The addendum recommendation report is required to be submitted to the FAA by August 31, 2017, to allow for consideration of ARAC approval at the September 14, 2017, ARAC meeting.
FAA Issues Notice of Submission Deadline for Winter 2017 Flight Schedules at ORD, JFK, LAX, EWR, and SFO
The FAA issued a notice setting a deadline of May 11, 2017, for carriers to submit their winter 2017 flight schedules for Chicago O’Hare International Airport (ORD), John F. Kennedy International Airport (JFK), Los Angeles International Airport (LAX), Newark Liberty International Airport (EWR), and San Francisco International Airport (SFO), in accordance with IATA Worldwide Slot Guidelines. The U.S. winter scheduling season for these airports is from October 29, 2017, through March 24, 2018. At a minimum, carriers are required to submit information “in sufficient detail” on the operating carrier, flight number, scheduled time of operation, frequency, and effective dates of their operations, and may use IATA standard schedule information format and data elements (Standard Schedules Information Manual or SSIM, Chapter 6). Service schedules for these airports are required to be submitted to the FAA’s Slot Administration Office.
FAA Issues Final Rule Adjusting Civil Penalty Amounts
The FAA issued a final rule making adjustments to civil penalty amounts assessed for violations of FAA regulations as required under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The final rule provides 2017 inflation adjustments to civil penalty minimum and maximum amounts and finalizes the catch-up adjustment contained in the FAA’s July 5, 2016 interim final rule. The final rule amends FAA civil penalty amounts under 14 C.F.R. § 13.301 for violations occurring on or after January 15, 2017, as follows:
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United States Code Citation
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Civil Monetary Penalty Description
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2016 Minimum Penalty Amount
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New Minimum Penalty Amount
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2016 Maximum Penalty Amount
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New Maximum Penalty Amount
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49 U.S.C. § 5123(a)(1)
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Violation of hazardous materials transportation law.
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N/A
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N/A
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$77,114
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$78,376
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49 U.S.C. § 5123(a)(2)
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Violation of hazardous materials transportation law resulting in death, serious illness, severe injury, or substantial property destruction.
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N/A
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N/A
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$179,933
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$182,877
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49 U.S.C. § 5123(a)(3)
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Violation of hazardous materials transportation law relating to training.
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$463
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$471
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$77,114
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$78,376
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49 U.S.C. § 46301(a)(1)
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Violation by a person other than an individual or small business concern under 49 U.S.C. § 46301(a)(1)(A) or (B).
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N/A
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N/A
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$32,140
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$32,666
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49 U.S.C. § 46301(a)(1)
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Violation by an airman serving as an airman under 49 U.S.C. § 46301(a)(1)(A) or (B) (but not covered by § 46301(a)(5)(A) or (B)).
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N/A
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N/A
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$1,414
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$1,437
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49 U.S.C. § 46301(a)(1)
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Violation by an individual or small business concern under 49 U.S.C. § 46301(a)(1)(A) or (B) (but not covered in 49 U.S.C. § 46301(a)(5)).
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N/A
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N/A
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$1,414
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$1,437
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49 U.S.C. § 46301(a)(3)
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Violation of 49 U.S.C. § 47107(b) (or any assurance made under such section) or 49 U.S.C. § 47133.
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N/A
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N/A
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Increase above otherwise Applicable maximum amount not to exceed 3 times the amount of revenues that are used in violation of such section.
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No change.
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49 U.S.C. § 46301(a)(5)(A)
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Violation by an individual or small business concern (except an airman serving as an airman) under 49 U.S.C. § 46301(a)(5)(A)(i) or (ii).
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N/A
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N/A
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$12,856
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$13,066
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49 U.S.C. § 46301(a)(5)(B)(i)
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Violation by an individual or small business concern related to the transportation of hazardous materials.
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N/A
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N/A
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$12,856
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$13,066
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49 U.S.C. § 46301(a)(5)(B)(ii)
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Violation by an individual or small business concern related to the registration or recordation under 49 U.S.C. chapter 441, of an aircraft not used to provide air transportation.
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N/A
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N/A
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$12,856
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$13,066
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49 U.S.C. § 46301(a)(5)(B)(iii)
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Violation by an individual or small business concern of 49 U.S.C. § 44718(d), relating to limitation on construction or establishment of landfills.
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N/A
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N/A
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$12,856
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$13,066
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49 U.S.C. § 46301(a)(5)(B)(iv)
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Violation by an individual or small business concern of 49 U.S.C. § 44725, relating to the safe disposal of life-limited aircraft parts.
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N/A
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N/A
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$12,856
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$13,066
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49 U.S.C. § 46301(b)
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Tampering with a smoke alarm device.
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N/A
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N/A
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$4,126
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$4,194
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49 U.S.C. § 46302
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Knowingly providing false information about alleged violation involving the special aircraft jurisdiction of the United States.
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N/A
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N/A
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$22,587
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$22,957
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49 U.S.C. § 46318
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Interference with cabin or flight crew.
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N/A
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N/A
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$34,172
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$34,731
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49 U.S.C. § 46319
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Permanent closure of an airport without providing sufficient notice.
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N/A
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N/A
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$12,856
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$13,066
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49 U.S.C. § 47531
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Violation of 49 U.S.C. §§ 47528–47530, relating to the prohibition of operating certain aircraft not complying with stage 3 noise levels.
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N/A
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N/A
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See 49 U.S.C. § 46301(a)(1) and (a)(5), above.
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See 49 U.S.C. § 46301(a)(1) and (a)(5), above.
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The final rule became effective on April 10, 2017.
FAA Accepts Preliminary Airport Privatization Pilot Program Application for St. Louis Lambert International Airport
The FAA issued a notice regarding its receipt and acceptance for review of St. Louis Lambert International Airport’s preliminary application to participate in the Airport Privatization Pilot Program. The Program allows airports to gain access to private capital sources to help with airport development and improvement. Under the Airport Privatization Pilot Program, the FAA administrator may exempt sponsors of public use airports from specific Federal regulations regarding airport privatization through sale or lease. The airport’s sponsor, the city of St. Louis, is now permitted to choose a private operator, negotiate an agreement, and submit a final application to the FAA for an exemption. If the final application is accepted by the FAA, it will be made available to the public for a 60-day review and comment period.
Pipeline and Hazardous Materials Safety Administration
PHMSA Amends Hazardous Materials Regulations to Harmonize With International Standards
DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a final rule amending the Hazardous Materials Regulations (HMR) to conform with international hazardous materials regulations and standards, including ICAO’s updated Technical Instructions for the Safe Transport of Dangerous Goods by Air and the United Nations revised Recommendations on the Transport of Dangerous Goods. The final rule amends “proper shipping names, hazard classes, packing groups, special provisions, packaging authorizations, and air transport quantity limitations.” The rule prohibits the transport by air of additional hazardous substances on passenger-carrying aircraft, and on cargo-only aircraft unless approval is obtained from the state of origin and the state of the aircraft operator (in the case of the U.S., approval would be required from the Associate Administrator for PHMSA’s Office of Hazardous Materials Safety). In addition, certain hazardous materials formerly prohibited for carriage by air on passenger-carrying and cargo-only aircraft, are now allowed to be carried on cargo-only aircraft consistent with the ICAO Technical Instructions and subject to certain transport conditions and PHMSA approval. PHMSA also revised 49 C.F.R. § 175.25 to require Parts 121 and 135 air carriers to describe their procedures on passenger notification of hazardous materials restrictions in their operations manuals and/or other appropriate manuals. The manuals will be required to provide the procedures and information necessary to allow airline personnel to implement their airline’s specific passenger notification system. PHMSA stated that the FAA plans to distribute guidance material to assist operators in determining an effective passenger hazmat notification system. The final rule became effective on March 30, 2017, and compliance with the final rule’s amendments is required as of January 1, 2018.
PHMSA Issues Final Rule Adjusting Civil Penalty Amounts
PHMSA issued a final rule adjusting civil penalty amounts for violations of federal hazardous materials transportation laws or regulations. The adjusted penalty amounts were mandated by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The final rule increases: 1) the maximum civil penalty for a violation of hazmat laws and regulations from $77,114 to $78,376, except for violations that result in death, serious illness, or severe injury to any person or substantial destruction of property; 2) the maximum civil penalty for a violation of hazmat laws and regulations from $179,933 to $182,877 for violations that result in death, serious illness, or severe injury to any person or substantial destruction of property; and 3) the minimum civil penalty amount for a violation relating to training from $463 to $471. The new civil penalty amounts apply to each violation and each day of a continuing violation (except for violations relating to packaging manufacture or qualification) occurring on or after April 19, 2017. The final rule is effective immediately.
Government Accountability Office
GAO Report Criticizes FAA Activities and Reporting Regarding Research and Development
The GAO published a report finding that FAA actions related to its research and development portfolio are not fully consistent with agency requirements, guidance, and leading practices. The report states that the FAA could be more strategic in its actions regarding the development of its research and development portfolio, the identification of long-term research needs, and the transparency of its project selection process. Furthermore, the GAO report recommended that the FAA ensure compliance with statutory requirements on the content for the NARP and R&D Annual Reviews.
Congressional Action Impacting Aviation
House Transportation and Infrastructure Committee Holds Oversight Hearing on U.S. Airlines’ Customer Service
The House Transportation and Infrastructure Committee held an oversight hearing on U.S. airlines’ customer service in response to the recent United Airlines’ forced removal of a passenger from a flight due to an overbooking situation. The hearing discussed the transparency of airline contract of carriage provisions and whether Congress needs to consider additional legislation to clarify aviation consumers’ rights and airlines’ responsibilities for ensuring that their passengers have adequate access to the airlines’ rules governing their provision of air transportation. Testimony at the hearing was provided by United Airlines CEO Oscar Munoz; United Airlines President Scott Kirby; Kerry Philipovitch, senior vice president of customer experience for American Airlines; Joseph Sprague, senior vice president of external relations for Alaska Airlines; Bob Jordan, executive vice president and chief commercial officer of Southwest Airlines; and William McGee, aviation consultant for the consumers union.
