2008 Final Rule

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information and recommendation
submitted by the Committee and other
available information, it is hereby found
that this rule, as hereinafter set forth,
will tend to effectuate the declared
policy of the Act.
Pursuant to 5 U.S.C. 553, it also found
and determined that good cause exists
for not postponing the effective date of
this rule until 30 days after publication
in the Federal Register because the
2007–08 fiscal period began on August
1, 2007, and the marketing order
requires that the rate of assessment for
each fiscal period apply to all onions
handled during such fiscal period. In
addition, the Committee needs to have
sufficient funds to pay its expenses
which are incurred on a continuous
basis. Further, handlers are aware of this
action which was unanimously
recommended at a public meeting and
is similar to other assessment rate
actions issued in past fiscal periods.
Also, a 15-day comment period was
provided for in the proposed rule.
List of Subjects in 7 CFR Part 959
Marketing agreements, Onions,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 959 is amended as
follows:

■

PART 959—ONIONS GROWN IN
SOUTH TEXAS
1. The authority citation for 7 CFR
part 959 continues to read as follows:

■

Authority: 7 U.S.C. 601–674.

2. Section 959.237 is revised to read
as follows:

■

§ 959.237

Assessment rate.

On and after August 1, 2007, an
assessment rate of $0.03 per 50-pound
equivalent is established for South
Texas onions.
Dated: April 15, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. 08–1149 Filed 4–15–08; 12:13 pm]

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BILLING CODE 3410–02–P

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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: Final rule.
AGENCY:

SUMMARY: The Department of
Transportation (DOT or Department) is
amending 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
through 60 passengers, which are
currently exempt from the rule, and to
make other changes. These changes are
intended to maintain consumer
protection commensurate with
developments in the aviation industry.
This action is taken on the Department’s
initiative and in response to a petition
from the Air Transport Association.
DATES: This rule is effective May 19,
2008.
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), [email protected] (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 flights that
are oversold. In most cases, bumped
passengers are entitled to compensation.
Part 250 sets the minimum amount of
compensation that is required to be
provided to passengers who are bumped
involuntarily. Until now the rule has
not applied to flights operated with
aircraft with a design capacity of 60 or
fewer passenger seats.
In adopting the original rule in the
1960s, the Civil Aeronautics Board
(CAB), the Department’s predecessor in
aviation economic regulation,
recognized the inherent unfairness in
carriers selling more ‘‘confirmed’’
reservations for a flight than they have
seats. Therefore, the CAB sought to
reduce the number of passengers

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involuntarily denied boarding to the
smallest practicable number without
prohibiting deliberate overbooking or
interfering unnecessarily with the
carriers’ reservations practices. Air
travelers 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 being
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 smallaircraft 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

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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
rule has served a useful purpose;
however, in light of recommendations
from various sources, including
Congress, the Department’s Inspector
General, and major airlines themselves,
we reviewed the rule and have decided
to revise certain aspects of the rule that
we believe are outdated. In view of the
passage of time since the rule was last
revised and changes in commercial air
travel over that time, we have decided
to increase the compensation
maximums and extend the rule to cover
a broader range of aircraft. The
Department is also making certain other
changes of lesser impact.
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, or who fail to appear and
provide no notice). 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 over 46 years ago. In Order
No. E–17914, dated January 8, 1962, the
CAB conditioned its approval of ‘‘noshow 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:

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(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 of the
airline’s choosing.
(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 1 hour of the
planned arrival time of the oversold
flight, no compensation is required. If
the alternate transportation is scheduled
to arrive between 1 and 2 hours after the
planned arrival time of the oversold
flight (between 1 and 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 he or
she can use for alternate transportation
or have refunded if not used.
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; see 72 FR
37491. 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).
On November 20, 2007, the
Department published a Notice of
Proposed Rulemaking (72 FR 65237) in
which we proposed several specific
changes to the Oversales rule. We did
not propose to ban overbooking as many
individual commenters urged. As

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21027

indicated in the ‘‘Background’’ section
above, air travelers receive some benefit
from controlled overbooking. We are not
aware of levels of consumer harm that
require such a sweeping solution at this
time, and we believe that the additional
oversale protections that we are
adopting here will address the principal
issues related to this regulation that
require action by the Department.
The issues that were presented in the
NPRM and a summary of the comments
appear below.
The Maximum Amount of Denied
Boarding Compensation
It has been 25 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
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–
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 voluntarily 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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2001–9325.) More 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 he
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
smaller aircraft.
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
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
compensation rates in the DOT rule.
The annual rate of involuntary denied
boardings per 10,000 enplanements for
the carriers tracked in the report has
increased in each of the past three years
and in 2007 was at the highest level in
the past ten years. Involuntary denied
boarding rates from the Air Travel
Consumer Report for that period appear
below:

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Year
1997
1998
1999
2000
2001
2002

Invol. DB’s
per 10,000
passengers

......................................
......................................
......................................
......................................
......................................
......................................

1.06
0.87
0.88
1.04
0.82
0.72

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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Invol. DB’s
per 10,000
passengers

Year
2003
2004
2005
2006
2007

......................................
......................................
......................................
......................................
......................................

0.86
0.86
0.89
1.01
1.12

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 been in the
mid-80% range.
With respect to the denied boarding
compensation limits, inflation has
eroded the value of 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), $400 in 1978 was
worth $128 at the time of the NPRM
($125 today). 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 as
of the time of the NPRM ($1,272 today).
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
12.69 cents per revenue passenger mile
in 2006 (latest available data)—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 have
produced updated limits of $624 and
$1,248, respectively, at the time of the
NPRM. However, the NPRM noted that
applying the 53.1% increase in
passenger yield through 2006 to the
current $200 and $400 limits would
have produced updated limits of $306
and $612. It is important to note that the
$200 and $400 figures in Part 250 are
merely limits on the amount of denied
boarding compensation required under
the rule; the compensation rate is 100%
or 200% of the passenger’s fare
(depending on how long he or she was

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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.
In the ANPRM the Department sought
comment on five options with respect to
the monetary limits on denied boarding
compensation—increasing the limits
based on the CPI–U or on the increase
in fare yields, doubling the current
limits, eliminating the limits (i.e., so
there would be no cap on denied
boarding compensation payments), or
making no change to the current limits.
In the NPRM the Department proposed
to amend the 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 to the ANPRM 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, system-wide 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 did 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 taken their toll
on the value of the existing limits. As
noted above, $400 in 1978 was worth
$128 at the time of the NPRM, based on
the change in the CPI–U. Therefore, we
proposed to base part of an increase in
the compensation caps on the CPI–U.
By doubling the existing limits we
would blend these two approaches. The
limits proposed in the NPRM fall
between the higher figures that would
be produced by the CPI option and the

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lower numbers that would result from
the ‘‘fares/yield’’ option. We sought
comment on this proposal, including
any comments and justifications that
were not already provided in response
to the ANPRM about alternative
amounts or methodologies.
It is important to note that this
proposal concerning limits on
compensation for involuntary denied
boardings would not necessarily require
carriers to offer more compensation to
the great majority of passengers affected
by overbooking because most such
situations are handled through
volunteers who agree to give up their
seat in exchange for mutually-agreed
compensation, typically at the departure
gate. Nor would it 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 exceed the
current 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 (often 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 entail the same
cost as cash compensation given rates of
non-use and inventory-management
restrictions.
Comments
Our proposal to double the denied
boarding compensation limits was
endorsed by the American Society of
Travel Agents (ASTA), the Airports
Council International—North America
(ACI–NA), the Aviation Consumer
Action Project (ACAP), the Coalition for
an Airline Passenger Bill of Rights
(CAPBOR), Jet Airways (India), and all
of the individuals who commented on
this issue. ACAP also endorsed a
minimum DBC amount of $100. ASTA
remarked that the reasoning in the
Regulatory Evaluation is sound and
suggested that for lengthy delays (e.g.,
next day), DBC should be higher, e.g.
perhaps based on the CPI concept. ACI–
NA asserted that incentives against
unreasonable overbooking levels must
remain effective because current high
load factors make rerouting more
difficult. The National Business Travel
Association (NBTA) favored an increase
in DBC limits but believed that the
Department’s proposal did not go far
enough—the Association noted that
business travelers often pay high fares
and book peak flights that it contended
are more likely to be oversold and

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consequently favored limits of $400/
$800 (the NPRM proposal) or half of that
passenger’s fare, whichever is higher.
The Air Transport Association stated
that it did not oppose the basic elements
of the NPRM but had objections to
certain proposals (see below) that were
not related to the adjustment of the
compensation limits.
The proposal to double the limits was
opposed by most other organizations
that commented on this issue. (No
individual commenters opposed the
proposal, although one felt that the
limits should be removed altogether and
several said that overbooking should be
banned.) The Air Carrier Association of
America (ACAA) stated that the
increased limits are unfair to smaller
carriers that have fewer rerouting
options that would permit them to limit
DBC to the 100% rate. ACAA said that
the limits should be increased no more
than 25%, although it gave no basis for
this figure. The Regional Airline
Association (RAA) said that involuntary
denied boardings are rare and the
current system is working, but if the
limits are increased the adjustment
should be based on historical increases
in fares/yield rather than $400/$800.
The National Air Carrier Association
said that the limits should be increased
only for carriers that consistently bump
a high number of passengers. Delta Air
Lines stated that there is no justification
for an increase in the limits, but echoed
RAA’s contention (as did China Eastern
Airlines) that any increase that does
take place should be based on increases
in fares rather than the $400/$800
proposal. Philippine Airlines wanted an
increase of no more than 10%.
Response to Comments
After careful consideration of all of
the comments, we have decided to
double the current DBC limits as
proposed. The limits have not been
adjusted in nearly 30 years, and the
purchasing power of the limits has
eroded. Air fares have increased by
more than 50% in that time, and thus
a higher percentage of bumped
passengers is undoubtedly having their
DBC capped at a figure lower than the
100% or 200% DBC rate. The
Department has been urged to
reexamine the limits by the Senate, the
Department’s Inspector General, and the
airlines themselves (see ATA’s petition
for rulemaking in this proceeding). As
ACI–NA noted in its comments,
unrealistic deterrents in the rule could
produce more oversales—and indeed
the rate of involuntary denied boardings
has increased 30% in the past three
years. Carriers whose schedules make it
difficult to reroute passengers in time to

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21029

limit DBC to the 100% rate are
nonetheless in control of their
overbooking rates and of the
attractiveness of the compensation that
they offer to prospective volunteers.
With respect to the comments that urge
us to base the increase in the limits
solely on the increase in fares/yields, as
noted above, denied boarding
compensation is intended in part to
compensate for the passenger’s
inconvenience, lost time, and lost
opportunities, and the value of these
considerations is linked to general
inflation as well as to the cost of air
fares.
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.
The majority of the aircraft operated
by the regional airline industry have 60
or fewer seats and thus are exempt from
the denied boarding rule. However, this
sector 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. As noted in the
NPRM, regional jets have fueled much
3 See

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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 jets now make up
59% of the regional-carrier fleet.
Although many regional jets have more
than 60 passenger seats and thus are
subject to Part 250, the ubiquitous 50seat 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, a fee-forservice arrangement, 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 also demonstrate the
growth in traffic on flights operated by
aircraft with 31 through 60 seats. From
the fourth quarter (4Q) of 2002 (earliest
available consistent data) to 4Q2006, 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
As noted in the NPRM, 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. Therefore, the NPRM
proposed to extend the applicability of
the oversales rule to flights using
aircraft having 30 or more seats.
Comments
This proposal was supported by the
ACAA, NBTA, ACI–NA, and by the two
individuals who commented on this
issue. ACAA stated that the current
exclusion for these aircraft is unfair to
smaller carriers that do not have aircraft
of a size that benefit from the exclusion.
The initiative was opposed by RAA,
Delta Air Lines, and Peninsula Airways.
RAA said that the proposal would have
disparate cost impact on regional
carriers that cannot always raise fares
due to competition from automobiles.
4 DOT

Form 41, schedule T–100.

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RAA asserted that cost increases will
cause marginal routes to be dropped,
reducing competition and leaving some
small points without service. The
organization was concerned that DBC on
connecting flight may exceed a regional
carrier’s fare. It noted that the small
aircraft and short runways frequently
used by regional carriers cause seats to
be figuratively ‘‘roped off’’ (i.e., to have
to exclude passengers from those seats)
for safety-related weight/balance
reasons more frequently than is the case
for larger aircraft, but under the current
rule DBC must still be paid. Delta also
noted this latter issue and suggested that
if this proposal is finalized, the
Department should amend the
‘‘substitution of equipment’’ exception
to DBC to include passengers bumped as
a result of the need to limit payload for
safety-related weight/balance reasons.
Peninsula Airways (an Alaskan
operator) stated that aircraft with less
than 35 seats should remain excluded
from the rule, but if the proposal to
include aircraft with 30–60 seats is
adopted, the rule should exclude
commuter operations with propeller
aircraft solely within the state of Alaska.
This would capture regional jets, the
commenter noted, while maintaining
the current relief for small turboprops.
Peninsula contended that this is
justified for the same reasons that CAB
originally excluded aircraft with 60
seats or less. Peninsula also disputed
the statement in the NPRM that on a
codeshare ‘‘the major carrier is
responsible for providing denied
boarding compensation on the flights of
the smaller carrier.’’ Peninsula says that
this is true only on fee-for-service
arrangements, and Peninsula uses a prorate system.
Response to Comments
For the reasons described above, we
are extending the applicability of the
oversales rule to flights using aircraft
with 30 or more passenger 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 has become affiliated and
integrated with the ‘‘brand’’ of a major
carrier. In recent times, aircraft with 30
through 60 seats (to a large extent
regional jets) have been substituted for
larger airplanes on numerous routes.
The great 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. In its comments on the
ANPRM, JetBlue asserted that 57% of
the flights operated in August 2007 for
American, Continental, Delta,
Northwest, United and U.S. Airways

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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. In
its comments on the ANPRM, ACAA
provided data showing that regional jets
account for half or nearly half of all
departures at most hub airports.
A significant amount, if not most, of
the service on small-aircraft flights
operated for major carriers is provided
under a ‘‘fee-for-service’’ arrangement
such as Peninsula Airways referred to,
where a major carrier dictates the
market, the schedule, and the price of
the flight. Under such an arrangement
the tickets are not 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 purposes relevant to this
rule 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.
As a result of changes in the
marketplace, we now believe that
consumers who purchase transportation
in this aircraft class are entitled to the
protections of the oversales rule.
Carriers that use small aircraft to operate
flights for a major carrier can protect
themselves contractually by negotiating
a mutually acceptable sharing of risk
with the major airline. However, we are
sensitive to the operational challenges
faced by operators of aircraft with 30
through 60 seats. As certain commenters
noted, these aircraft are more
susceptible than larger airplanes to the
need to limit payload in certain
situations, typically hot weather,
especially at higher altitudes. These
situations, which cannot be reliably
forecast when reservations are being
taken weeks and months in advance,
sometimes cause passengers to have to
be bumped. Consequently, as suggested
by Delta, we will revise the existing
DBC exception in our oversales rule for
substitution of aircraft of lesser capacity
to include situations where the aircraft
is not substituted, but payload must be
limited for safety reasons and
passengers are bumped as a result. We
expect carriers to keep adequate records
that will demonstrate the legitimate use
of this exception to DBC when it is
employed. Consistent with our
obligations under the Regulatory
Flexibility Act to assess the impact of
rules on operators of aircraft having 60
or fewer seats (see 14 CFR 399.73), this
new relief will be limited to flights
operated with aircraft having 60 or
fewer seats. Larger aircraft are affected
by unpredictable payload restrictions

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less often, and operators of those aircraft
are not the subject of the Regulatory
Flexibility Act.
We will not exempt flights using
aircraft with less than 35 seats or
commuter-carrier operations using
propeller aircraft solely within the state
of Alaska, as was suggested by
Peninsula Airways. We believe that
carriers serving Alaska have sufficient
experience with the operational
considerations in that environment to be
able to implement overbooking practices
that do not expose the carrier to undue
risk, and we are reluctant to deny
Alaskan travelers the benefits of the
rule. The new exemption for denied
boardings caused by safety-related
payload restrictions on flights using
aircraft with 60 or fewer seats (see
above) should address many of the
situations about which Peninsula was
concerned.
Boarding Priorities
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

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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. In the
NPRM 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
• Special priorities for passengers
with disabilities, within the meaning of
14 CFR Part 382, or for unaccompanied
minors.
We stated 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.
Comments
Philippine Airlines and ACI–NA
favored the proposal. RAA said that it
is not necessary but that the
organization did not oppose it. ASTA
opposed the proposal, stating that
passengers with low fares or no
frequent-flyer miles on that carrier are
no less inconvenienced by bumping and
should not be singled out.
Response to Comments
For the reasons described above, we
will adopt this proposal. With respect to
ASTA’s comment, airlines set their own
boarding priorities and the longstanding
ability of airlines to have boarding
priorities based on passengers’ fares or
frequent-flyer status is not at issue in
this proceeding. Airlines have had such
boarding priorities for years, and the
Department has not found this to be
inconsistent with the mandate in
section 14 CFR 250.3(a) described
above. The proposal in this proceeding
is simply intended to clarify and
provide improved access to this policy
by including it in the rule.
Notice to Volunteers
Accurately notifying passengers of
their rights in an oversale situation is
important, so that they can make an
informed decision. Part 250 already

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21031

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 saw some
merit in the suggestion to make this
notice requirement more direct.
Accordingly, in the NPRM we sought
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
RAA and ATA strongly objected to
this proposal. Both organizations said
that it is unrealistic and would impede
passenger processing at airports without
providing any consumer benefit. RAA
asserted that it would be highly
burdensome to determine the risk to
each prospective volunteer of being
bumped involuntarily and would
increase delays at the gate. Most carriers
make general announcements rather
than soliciting individual passengers,
RAA claimed, and individual presolicitation notice is impossible in those
circumstances. ATA said that volunteers
have already decided to give up their
reservation in exchange for the offered
compensation, and the risk of being
bumped is irrelevant.
The Aviation Consumer Action
Project said that potential volunteers
should be given a written statement
summarizing the DOT rule, with
monetary penalties payable to the
passenger if this is not done.
There were no individual consumer
comments on this issue.
Response to Comments
For the reasons summarized above,
and consistent with the
recommendation of the IG, we will
finalize the proposal. Commenters’
concerns about the practicality of the
provision appear to result from a
misunderstanding of what we proposed.
Informing a prospective volunteer
‘‘whether he or she is in danger of being

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involuntarily denied boarding’’ need not
entail a precise calculation of the
probability of that person being
involuntarily bumped. Carriers may still
make general announcements seeking
volunteers and, if the need arises to
accept the offer of any of those who
indicate a willingness to volunteer, it
would be sufficient for a carrier to tell
a volunteer just before handing him or
her the volunteer compensation that
there is a reasonable chance that he or
she may have been bumped
involuntarily (if that is true), and if that
were to be the case the compensation
would be $X. The oversales regimen
relies in large part on consumers being
able to make informed decisions and
this is no more than what is required
under the current rule.
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
Form 251 reports filed by the other
carriers is not keypunched,
summarized, published, or routinely
reviewed.
In the NPRM the Department
proposed to 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
would still receive adequate information
and the public would 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

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requirements for all four sections of the
Air Travel Consumer Report.
Comments
Three airlines and two airline
associations commented on this issue;
all of them favored the proposal.
Response to Comments
For the reasons summarized above,
we will 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. The
carriers that are being relieved of this
requirement need not file a Form 251
report for the quarter during which this
amendment goes into effect.
All other comments on the various
issues in this proceeding were beyond
the scope of the NPRM.
Overbooking Notice
Section 250.11 specifies the text of a
notice that carriers must use on signs at
ticket-selling locations and in notices
accompanying tickets to disclose
overbooking and describe denied
boarding procedures. One portion of
this notice states that there are
exceptions to the requirement to pay
denied boarding compensation. In the
NPRM we proposed to revise that
section of the notice to state that failing
to comply with the carrier’s check-in
deadline is one such exception and to
require carriers to either include their
check-in deadline in the notice or state
in the notice that the airline’s check-in
deadline is available upon request from
the carrier.
Comments
The Air Transport Association
objected to this proposal. It said that
check-in times can vary, especially
between domestic and international
operations; that the information is
available on carriers’ Web sites; that air
travelers have become used to checking
in early since 9/11; and that most of the
notices would be displayed at airports
and by the time a traveler sees the
notice at the airport it is too late.
Response to Comments
We have decided to finalize the
proposal. We believe that it is important
for consumers to be aware that missing
the carrier’s check-in deadline
disqualifies them from eligibility for
denied boarding compensation if they
should be involuntarily denied
boarding. A great deal of consumer
information is available on carrier Web
sites, but this does not obviate the

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usefulness of affirmatively pointing out
key information in notices of this type.
Airlines that find it burdensome to
include their specific check-in
deadline(s) in the notice can simply
state that the deadlines are available
from the carrier upon request, as stated
in the NPRM. Finally, this revised
notice is not limited to airports;
pursuant to section 250.11(b) of the
existing rule (which is not being
revised), the sec. 250.11(a) notice
described in the NPRM must also
accompany tickets.
Technical Changes
We are revising the definition of
‘‘Carrier’’ in section 250.1 to (1)
explicitly include commuter air carriers
(with respect to the extension of the rule
to flights using aircraft with 30 through
60 seats), (2) remove citations to the
Federal Aviation Act, a statute that no
longer exists under that name, and (3)
reduce the range of sections cited in this
definition as the source of DOT
authority for foreign air carriers to the
one section that is most applicable. (The
other sections cited in the foreigncarrier citation are procedural in nature
and are not necessary in this definition.)
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 discussion of possible costs
and benefits of the proposed rule is
presented in the preamble and in the
accompanying Regulatory Evaluation, a
copy of which has been placed in the
docket. The Regulatory Evaluation
concluded that the benefits of the rule
appear to exceed the costs. It noted that
the absolute number of involuntary
denied boardings, the rate of such
denied boardings per 10,000
enplanements and the ratio of
involuntary to voluntary denied
boardings have all increased
substantially in recent years, suggesting
that the 30-year-old caps on involuntary
denied boarding compensation that are
being updated here have been
encouraging carriers to resort to
involuntary denied boardings more
frequently. The average one-way fare
(all domestic and international flights)
was $232 in the 2nd Quarter of 2007,
above the $200 compensation limit that
pertains to the 2-hour deadline. Due to
the regulatory caps on denied boarding

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compensation, a passenger flying at or
above an above-average fare will not
receive the full amount of compensation
derived from the fare-based formula in
the rule. Similarly, the air carriers are
not subject to the disincentive of the
loss of a higher-than-average fare if a
passenger is bumped.
The added cost of doubling of the
denied boarding compensation caps
would be approximately four cents per
passenger even if every single passenger
who is involuntarily denied boarding
receives the maximum compensation
(which is not the case). The monetary
cost for this option would result in a
corresponding dollar-for-dollar
monetary benefit for the bumped
passengers. It is not expected that an
additional four-cent charge on a $200
ticket would make a material difference
in ticket demand or air carrier net
revenues from ticket sales.
B. Executive Order 13132 (Federalism)
This Final Rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13132 (‘‘Federalism’’). This amendment
does not: (1) Have a substantial direct
effect 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) impose
substantial direct compliance costs on
State and local governments; or (3)
preempt state law because states are
already preempted from regulating in
this area under the Airline Deregulation
Act (ADA), 49 U.S.C. 41713. Therefore,
the consultation and funding
requirements of Executive Order 13132
do not apply.

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C. Executive Order 13084
This Final Rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13084 (‘‘Consultation and Coordination
with Indian Tribal Governments’’).
Because nothing in this rule 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 this rule may
impose new requirements on certain

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small air carriers, but the Department
believes that the economic impact will
not be significant. All air carriers have
control over the extent to which the rule
impacts them because 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 (or different) 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
will be covered by the oversales rule for
the first time as a result of this
amendment 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. Under such an arrangement
the tickets are not 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. At the same time, this final
rule provides that the oversales
requirements will not apply when a
passenger is denied boarding on an
aircraft with a designed capacity of 30
through 60 passenger seats due to a
need to reduce the number of
passengers for safety purposes (e.g.,
weight/balance, maximum takeoff
weight). This exemption greatly reduces
the financial burden of the oversales
rule on operators of small aircraft ,
whether by small entities (who by
definition only operate aircraft of 60
seats or fewer) or other carriers. This is
particularly true with respect to events
that are not easy to predict at the time
reservations are taken (e.g., hot weather)

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21033

that affect safety-related payload limits.
Finally, it is worth noting that one
provision in this Final Rule relieves an
existing reporting requirement for all
but the largest carriers. For all these
reasons, I certify that this rule will not
have a significant economic impact on
a substantial number of small entities.
E. Paperwork Reduction Act
DOT has long-standing OMB
clearance for the reporting requirements
in Part 250 (OMB No. 2138–0018). Prior
to issuance of this final rule, we
estimated a reporting burden of 1600
hours annually for 40 U.S. carriers and
600 hours annually for 100 foreign
carriers. This final rule is reducing
reporting requirements so that only 20
U.S. carriers will continue to report
denied boarding information for a total
of 800 hours annually. We will modify
our paperwork inventory for this rule
accordingly.
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.
■ For the reasons set forth in the
preamble, we amend 14 CFR Part 250 as
follows:
PART 250—[AMENDED]
1. The authority citation for part 250
continues to read as follows:

■

Authority: 49 U.S.C. Chapters 401, 411,
413, 417.
■ 2. In § 250.1 the definition for ‘‘Large
aircraft’’ is removed and the definition
for ‘‘Carrier’’ is revised to read as
follows:

§ 250.1

Definitions.

*

*
*
*
*
Carrier means: (1) a direct air carrier,
except a helicopter operator, holding a
certificate issued by the Department of
Transportation pursuant to 49 U.S.C.
41102 or that has been found fit to
conduct commuter operations under 49
U.S.C. 41738, or an exemption from 49
U.S.C. 41102, authorizing the scheduled
transportation of persons; or (2) a
foreign air carrier holding a permit
issued by the Department 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:

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Applicability.

This part applies to every carrier, as
defined in § 250.1, with respect to
scheduled flight segments using an
aircraft that has a designed passenger
capacity of 30 or more passenger seats,
operating in (1) interstate air
transportation or (2) 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 by 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. In § 250.3 paragraph (b) is added to
read as follows:
§ 250.3

Boarding priority rules.

*

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

cprice-sewell on PROD1PC71 with RULES

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

(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
§ 250.1], or other transportation used by

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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 250.6(b) is revised to read
as follows:
*
*
*
*
*
(b) The flight for which the passenger
holds confirmed reserved space is
unable to accommodate that passenger
because of substitution of equipment of
lesser capacity when required by
operational or safety reasons; or, on an
aircraft with a designed passenger
capacity of 60 or fewer seats, the flight
for which the passenger holds
confirmed reserved space is unable to
accommodate that passenger due to
weight/balance restrictions when
required by operational or safety
reasons;
*
*
*
*
*
■ 8. Section 250.9(b) is revised to read
as follows:
§ 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

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understandable to the average
passenger.)
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) on a flight
operated with an aircraft having 60 or
fewer seats, you are denied boarding
due to safety-related weight/balance
restrictions that limit payload; or (5) 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 (6) 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.
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 4 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

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Federal Register / Vol. 73, No. 76 / Friday, April 18, 2008 / Rules and Regulations
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.

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
l 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.
*
*
*
*
*

Passenger’s Options
Acceptance of the compensation may
relieve (name of air carrier) from any
further 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.
■ 9. In § 250.10, remove the word
‘‘carrier’’ and replace it with the phrase
‘‘reporting carrier as defined in 14 CFR
234.2 and any carrier that voluntarily
submits data pursuant to § 234.7 of that
part.’’
■ 10. Section 250.11(a) is revised to read
as follows:

Issued this 14th day of April, 2008, at
Washington, DC.
Michael W. Reynolds,
Acting Assistant Secretary for Aviation and
International Affairs.
[FR Doc. 08–1145 Filed 4–16–08; 9:08 am]

§ 250.11 Public disclosure of deliberate
overbooking and boarding procedures.

Technical Corrections to the Export
Administration Regulations Based
Upon a Systematic Review of the CCL

cprice-sewell on PROD1PC71 with RULES

(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

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BILLING CODE 4910–9X–P

DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 748 and 774
[Docket No. 080307395–8515–01]
RIN 0694–AE32

Bureau of Industry and
Security, Commerce.
ACTION: Final rule.
AGENCY:

This rule amends the Export
Administration Regulations (EAR) to
make various technical corrections and
clarifications to the EAR as a result of
a systematic review of the Commerce
Control List (CCL) that was conducted
by the Bureau of Industry and Security
(BIS). This rule is the first phase of the
regulatory implementation of the results
of a review of the CCL that was
conducted by BIS starting in 2007. The
BIS CCL review benefited from input
received from BIS’s Technical Advisory
Committees (TACs) and comments that
were received from the interested public
in response to the publication of a BIS
notice of inquiry on July 17, 2007 (72 FR
39052).
DATES: Effective Date: This rule is
effective: April 18, 2008. Although there
is no formal comment period, public
SUMMARY:

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21035

comments on this regulation are
welcome on a continuing basis.
ADDRESSES: You may submit comments,
identified by RIN 0694–AE32, by any of
the following methods:
E-mail: [email protected]
Include ‘‘RIN 0694–AE32’’ in the subject
line of the message.
Fax: (202) 482–3355. Please alert the
Regulatory Policy Division, by calling
(202) 482–2440, if you are faxing
comments.
Mail or Hand Delivery/Courier:
Timothy Mooney, U.S. Department of
Commerce, Bureau of Industry and
Security, Regulatory Policy Division,
14th St. & Pennsylvania Avenue, NW.,
Room 2705, Washington, DC 20230,
Attn: RIN 0694–AE32.
Send comments regarding the
collection of information associated
with this rule, including suggestions for
reducing the burden, to David Rostker,
Office of Management and Budget
(OMB), by e-mail to
[email protected], or by fax
to (202) 395–7285; and to the U.S.
Department of Commerce, Bureau of
Industry and Security, Regulatory Policy
Division, 14th St. & Pennsylvania
Avenue, NW., Room 2705, Washington,
DC 20230. Comments on this collection
of information should be submitted
separately from comments on the final
rule (i.e. RIN 0694–AE32)—all
comments on the latter should be
submitted by one of the three methods
outlined above.
FOR FURTHER INFORMATION CONTACT:
Timothy Mooney, Office of Exporter
Services, Bureau of Industry and
Security, U.S. Department of Commerce;
by telephone: (202) 482–2440; or by fax:
202–482–3355.
SUPPLEMENTARY INFORMATION:
Background
This rule amends the Export
Administration Regulations (EAR) to
make various technical corrections and
clarifications to the EAR as a result of
a systematic review of the Commerce
Control List (CCL) that was conducted
by the Bureau of Industry and Security
(BIS) beginning in 2007. This rule is the
first phase of the regulatory
implementation of the results of that
review. This rule focuses on making
needed technical corrections and
clarifications to the CCL. The BIS CCL
review benefited from input received
from BIS’s Technical Advisory
Committees (TACs) and public
comments received in response to a BIS
notice of inquiry (July 17, 2007, 72 FR
39052).
BIS intends to publish another rule
later this year that will implement the

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18APR1