14 CFR Part 241 Uniform System of Accounts & Reports for Large Certificate Air carriers

Office of the Secretary, DOT

Pt. 241

[photo]

Failure to honor these credentials will result in penalties as provided by law.
UNITED STATES OF AMERICA,
CIVIL AERONAUTICS BOARD,
WASHINGTON, D.C.

Signature

(Secs. 204, 407, 701, 72 Stat. 743; 49 U.S.C. 1324,
1377, 1441)

This is to certify thatllllll, whose
signature and photograph appear hereon is a
duly designated ———————————————
of the Civil Aeronautics Board and is authorized and directed to perform the duties of
said office in accordance with the laws of the
United States and regulations thereunder,
and his authority will be respected accordingly.
By authority of the Civil Aeronautics Board.
Secretary
CIVIL AERONAUTICS BOARD
Name llllllllllllllllllll
Date Issued lllllllllllllllll
Number lllllllllllllllllll
Height llllllllllllllllllll
Weight
lllllllllllllllllll
Hair lllllllllllllllllllll
Eyes lllllllllllllllllllll
Date of Birth llllllllllllllll
The holder hereof is authorized to investigate violations of the Federal Aviation
Act, as amended, collect evidence in cases in
which the regulatory authority of the Civil
Aeronautics Board is or may be involved and
perform other duties imposed upon him by
law.
Under the Federal Aviation Act and part
240 of the Economic Regulations of the Civil
Aeronautics Board (14 CFR part 240), the
duly accredited special agents and auditors
of the Board are empowered at all times to
obtain access to all lands, buildings and
equipment of any air carrier or foreign air
carrier and to inspect, examine, and make
notes and copies of all accounts, records,
memorandums, documents, papers and correspondence kept or required to be kept by
any air carrier, foreign air carrier or ticket
agent.
The issuance of these credentials to the
holder hereof constitutes an order and direction on the part of the Civil Aeronautics
Board to such individual to carry out these
duties as aforesaid and as more fully described in part 240 of the Board’s Economic
Regulations.

[ER–822, 38 FR 26601, Sept. 24, 1973, as amended by ER–914, 40 FR 27017, June 26, 1975; ER–
941, 40 FR 58850, Dec. 19, 1975]

§ 240.2 Obligation of air carriers, foreign air carriers, and ticket agents.
Upon the demand of a special agent
or auditor of the Board, and upon the
presentation of the identification card
and credentials issued to him in accordance with this part: (a) Any air
carrier or foreign air carrier shall
forthwith permit such special agent or
auditor to inspect and examine all
lands, buildings and equipment; (b) any
air carrier, foreign air carrier or ticket
agent shall forthwith permit such special agent or auditor to inspect and examine all accounts, records, memorandums, documents, papers and correspondence now or hereafter existing,
and kept or required to be kept by the
air carrier, foreign air carrier, or ticket agent, and shall permit such special
agent or auditor to make such notes
and copies thereof as he deems appropriate.
(Sec. 204(a), Federal Aviation Act of 1958, as
amended, 72 Stat. 743; (49 U.S.C. 1324))
[ER–914, 40 FR 27017, June 26, 1975]

PART 241—UNIFORM SYSTEM OF
ACCOUNTS AND REPORTS FOR
LARGE CERTIFICATED AIR CARRIERS
Sec.
01 Authority Under Which Accounting and
Reporting Rules and Regulations Are
Prescribed and Administered.
02 [Reserved]
03 Definitions for Purposes of This System
of Accounts and Reports.
04 Air Carrier Groupings.
GENERAL ACCOUNTING PROVISIONS
1

Introduction to System of Accounts and
Reports.
1–1 Applicability of system of accounts and
reports.
1–2 Waivers from this system of accounts
and reports.

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14 CFR Ch. II (1–1–05 Edition)

1–3

General description of system of accounts and reports.
1–4 System of accounts coding.
1–5 Records.
1–6 Accounting entities.
1–7 Interpretation of accounts.
1–8 Address for reports and correspondence.
2 General Accounting Policies.
2–1 Generally accepted accounting principles.
2–2 Basis of allocation between entities.
2–3 Distribution of revenues and expenses
within entities.
2–4 Accounting period.
2–5 Revenue and accounting practices.
BALANCE SHEET CLASSIFICATIONS
3 Chart of Balance Sheet Accounts.
4 General.
5 [Reserved]
6 Objective Classification of Balance Sheet
Elements.

24

Profit and Loss Elements.

25

Traffic and Capacity Elements.

TRAFFIC REPORTING REQUIREMENTS

AUTHORITY: 49 U.S.C. 329 and chapters 401,
411, 417.
SOURCE: ER–755, 37 FR 19726, Sept. 21, 1972,
unless otherwise noted.

Section 01 Authority Under Which Accounting and Reporting Rules and
Regulations are Prescribed and Administered
This Uniform System of Accounts
and Reports for Large Certificated Air
Carriers is issued, prescribed and administered under the following provisions of the Federal Aviation Act of
1958, as amended (72 Stat. 731, 49 U.S.C.
1301):

PROFIT AND LOSS CLASSIFICATION
7
8
9
10
11

12
14
15
16
17
18

GENERAL POWERS

Chart of Profit and Loss Accounts.
General.
Functional Classification—Operating Revenues.
Functional Classification—Operating Expenses of Group I Air Carriers.
Functional Classification—Operating Expenses of Group II and Group III Air Carriers.
Objective Classification—Operating Revenues and Expenses.
Objective
Classification—Nonoperating
Income and Expense.
Objective Classification—Income Taxes
for Current Period.
Objective
Classification—Discontinued
Operations.
Objective Classification—Extraordinary
Items.
Objective Classification—Cumulative Effect of Changes in Accounting Principles.
OPERATING STATISTICS CLASSIFICATIONS

19

Uniform Classification of Operating Statistics.
19–1 Applicability.
19–2 Maintenance of data.
19–3 Accessibility and transmittal of data.
19–4 Service classes.
19–5 Air transport traffic and capacity elements.
19–6 Public disclosure of traffic data.
19–7 Passenger origin-destination survey.
GENERAL REPORTING PROVISIONS—LARGE
CERTIFICATED AIR CARRIERS
21
22

Introduction to System of Reports.
General Reporting Instructions.

23

Certification and Balance Sheet Elements.

FINANCIAL REPORTING REQUIREMENTS

SEC. 204. (a) The Board is empowered to
perform such acts, to conduct such investigations, to issue and amend such orders,
and to make and amend such general or special rules, regulations, and procedure, pursuant to and consistent with the provisions of
this Act, as it shall deem necessary to carry
out the provisions of, and to exercise and
perform its powers and duties under, this
Act.
FILING OF REPORTS

SEC. 407. (a) The Board is empowered to require annual, monthly, periodical, and special reports from any air carrier; to prescribe
the manner and form in which such reports
shall be made; and to require from any air
carrier specific answers to all questions upon
which the Board may deem information to be
necessary. Such reports shall be under oath
whenever the Board so requires. The Board
may also require any air carrier to file with
it a true copy of each or any contract, agreement, understanding, or arrangement, between such air carrier and any other carrier
or person, in relation to any traffic affected
by the provisions of this Act.
DISCLOSURE OF STOCK OWNERSHIP
SEC. 407. (b) Each air carrier shall submit
annually, and at such other times as the
Board shall require, a list showing the names
of each of its stockholders or members holding more than 5 per centum of the entire
capital stock or capital, as the case may be,
of such air carrier, together with the name
of any person for whose account, if other
than the holder, such stock is held; and a report setting forth a description of the shares
of stock, or other interest, held by such air
carrier, or for its account, in persons other
than itself.

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Section 01

FORM OF ACCOUNTS
SEC. 407. (d) The Board shall prescribe the
forms of any and all accounts, records, and
memoranda to be kept by air carriers, including the accounts, records, and memoranda of the movement of traffic, as well as
of the receipts and expenditures of money,
and the length of time such accounts,
records, and memoranda shall be preserved;
and it shall be unlawful for air carriers to
keep any accounts, records, or memoranda
other than those prescribed or approved by
the Board: Provided, That any air carrier
may keep additional accounts, records, or
memoranda if they do not impair the integrity of the accounts, records, or memoranda
prescribed or approved by the Board and do
not constitute an undue financial burden on
such air carrier.
INSPECTION OF ACCOUNTS AND PROPERTY
SEC. 407. (e) The Board shall at all times
have access to all lands, buildings, and
equipment of any carrier and to all accounts,
records, and memoranda, including all documents, papers, and correspondence, now or
hereafter existing, and kept or required to be
kept by air carriers; and it may employ special agents or auditors, who shall have authority under the orders of the Board to inspect and examine any and all such lands,
buildings, equipment, accounts, records, and
memoranda. The provisions of this section
shall apply, to the extent found by the Board
to be reasonably necessary for the administration of this Act, to persons having control
over any air carrier, or affiliated with any
air carrier within the meaning of section 5(8)
of the Interstate Commerce Act, as amended.
CLASSIFICATION
SEC. 416. (a) The Board may from time to
time establish such just and reasonable classifications or groups of air carriers for the
purposes of this title as the nature of the
services performed by such air carriers shall
require; and such just and reasonable rules
and regulations, pursuant to and consistent
with the provisions of this title, to be observed by each such class or group, as the
Board finds necessary in the public interest.
SAFETY, ECONOMIC AND POSTAL OFFENSES
SEC. 901. (a)(1) Any person who violates (A)
any provision of Title III, IV, V, VI, VII, or
XII of this Act, or any rule, regulation, or
order issued thereunder, or under section
1002(i), or any term, condition or limitation
of any permit or certificate issued under
Title IV, or (B) any rule or regulation issued
by the Postmaster General under this Act,
shall be subject to a civil penalty of not to
exceed $1,000 for each such violation. If such
violation is a continuing one, each day of
such violation shall constitute a separate of-

fense: Provided, That this subsection shall
not apply to members of the Armed Forces of
the United States, or those civilian employees of the Department of Defense who are
subject to the provisions of the Uniform
Code of Military Justice, while engaged in
the performance of their official duties; and
the appropriate military authorities shall be
responsible for taking any necessary disciplinary action with respect thereto and for
making to the Administrator or Board, as
appropriate, a timely report of any such action taken.
(2) Any such civil penalty may be compromised by the Administrator in the case of
violations of Titles III, V, VI, or XII, or any
rule, regulation, or order issued thereunder,
or by the Board in the case of violations of
Titles IV or VII, or any rule, regulation or
order issued thereunder, or under section
1002(i), or any term, condition, or limitation
of any permit or certificate issued under
Title IV, or by the Postmaster General in
the case of regulations issued by him. The
amount of such penalty, when finally determined, or the amount agreed upon in compromise, may be deducted from any sums
owing by the United States to the person
charged.
FAILURE TO FILE REPORTS; FALSIFICATION OF
RECORDS
SEC. 902. (e) Any air carrier, or any officer,
agent, employee, or representative thereof,
who shall, knowingly and willfully, fail or
refuse to make a report to the Board or Administrator as required by this Act, or to
keep or preserve accounts, records, and
memoranda in the form and manner prescribed or approved by the Board or Administrator, or shall, knowingly and willfully, falsify, mutilate, or alter any such report, account, record, or memorandum, or shall
knowingly and willfully file any false report,
account, record, or memorandum, shall be
deemed guilty of a misdemeanor and, upon
conviction thereof, be subject for each offense to a fine of not less than $100 and not
more than $5,000.
REFUSAL TO TESTIFY
SEC. 902. (g) Any person who shall neglect
or refuse to attend and testify, or to answer
any lawful inquiry, or to produce books, papers, or documents, if in his power to do so,
in obedience to the subpena or lawful requirement of the Board or Administrator,
shall be guilty of a misdemeanor and, upon
conviction thereof, shall be subject to a fine
of not less than $100 nor more than $5,000, or
imprisonment for not more than one year, or
both.
FILING OF COMPLAINTS AUTHORIZED
SEC. 1002. (a) Any person may file with the
Administrator or the Board, as to matters

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Section 02

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within their respective jurisdictions, a complaint in writing with respect to anything
done or omitted to be done by any person in
contravention of any provisions of this Act,
or of any requirement established pursuant
thereto. If the person complained against
shall not satisfy the complaint and there
shall appear to be any reasonable ground for
investigating the complaint, it shall be the
duty of the Administrator or the Board to investigate the matters complained of. Whenever the Administrator or the Board is of the
opinion that any complaint does not state
facts which warrant an investigation or action, such complaint may be dismissed without hearing. In the case of complaints
against a member of the Armed Forces of the
United States acting in the performance of
his official duties, the Administrator or the
Board, as the case may be, shall refer the
complaint to the Secretary of the department concerned for action. The Secretary
shall, within ninety days after receiving
such a complaint, inform the Administrator
or the Board of his disposition of the complaint, including a report as to any corrective or disciplinary actions taken.
INVESTIGATIONS ON INITIATIVE OF
ADMINISTRATOR OR BOARD
SEC. 1002. (b) The Administrator or Board,
with respect to matters within their respective jurisdictions, is empowered at any time
to institute an investigation, on their own
initiative, in any case and as to any matter
or thing within their respective jurisdictions, concerning which complaint is authorized to be made to or before the Administrator or Board by any provision of this Act,
or concerning which any question may arise
under any of the provisions of this Act, or relating to the enforcement of any of the provisions of this Act. The Administrator or the
Board shall have the same power to proceed
with any investigation instituted on their
own motion as though it had been appealed
to by complaint.
ENTRY OR ORDERS FOR COMPLIANCE WITH ACT
SEC. 1002. (c) If the Administrator or the
Board finds, after notice and hearing, in any
investigation instituted upon complaint or
upon their own initiative, with respect to
matters within their jurisdiction, that any
person has failed to comply with any provision of this Act or any requirement established pursuant thereto, the Administrator
or the Board shall issue an appropriate order
to compel such person to comply therewith.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–1400, 50 FR 11, Jan. 2, 1985]

Section 02

[Reserved]

Section 03 Definitions for Purposes of
This System of Accounts and Reports
Account, clearing. An account used as a medium for the temporary accumulation of
costs that are redistributed to appropriate
applicable accounts.
Acquisition, date of. The date on which the
title to owned property or equipment (or the
right to use or control the reassignment of
leased property or equipment) passes to the
air carrier.
Act. The Federal Aviation Act of 1958, as
amended.
Addition, property. Additional equipment,
land, structures, and other tangible property; extensions of fuel, water, and oil distribution equipment; additions to buildings
and other structures; and additional safety
devices applied to equipment not previously
thus equipped. (See also Modification.)
Affiliated group. A combination of companies comprised of the air carrier, any person
controlling the air carrier or under common
control with the air carrier, and organizational divisions (as defined in sections 1–6) of
and persons controlled by the air carrier.
Agency, cargo. Any person (other than the
air carrier preforming the direct air transportation or one of its bona fide regular employees or an indirect air carrier lawfully engaged in air transportation under authority
conferred by any applicable part of the Economic Regulations of the Department) who
for compensation or profit: (1) Solicits, obtains, receives or furnishes directly or indirectly property or consolidated shipments of
property for transportation upon the aircraft
of an air carrier subject to this part, or (2)
procures or arranges for air transportation
of property upon aircraft of an air carrier
subject to this part by charter, lease, or any
other arrangement.
Agent, ticket. Any person (other than the
air carrier performing the direct air transportation or one of its bona fide regular employees, or an air carrier which subcontracts
the performance of charter air transportation which it has contracted to perform)
who for compensation or profit: (1) Solicits,
obtains, receives, or furnishes directly or indirectly passengers or groups of passengers
for transportation upon the aircraft of an air
carrier subject to this part, or (2) procures or
arranges for air transportation of passengers
or groups of passengers upon aircraft of an
air carrier subject to this part by charter,
lease, or any other arrangement.
Agreement. Any oral or written agreement,
contract, understanding, or arrangement,
and any amendment, revision, modification,
renewal, extension, cancellation or termination thereof.

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Air carrier. Any citizen of the United States
who undertakes, whether directly or indirectly or by a lease or any other arrangement, to engage in air transportation.
Air carrier, charter. An air carrier holding a
certificate issued under 49 U.S.C. 41102(a)(3).
Air carrier, large certificated. An air carrier
holding a certificate issued under 49 U.S.C.
41102, as amended, that: (1) Operates aircraft
designed to have a maximum passenger capacity of more than 60 seats or a maximum
payload capacity of more than 18,000 pounds;
or (2) conducts operations where one or both
terminals of a flight stage are outside the 50
states of the United States, the District of
Columbia, the Commonwealth of Puerto
Rico and the U.S. Virgin Islands.
Air carrier, surviving. An entity (air carrier)
which, as the result of a business combination, has acquired the net assets, and carries
on the operations of, one or more predecessor
air carriers, and which may be newly organized at the time of the combination or may
be one of the predecessor air carriers.
Aircraft. Any contrivance now known or
hereafter invented, used or designed for navigation of or flight in the air.
Aircraft days assigned to service-carrier’s
equipment means the number of days that
aircraft owned or acquired through rental or
lease are in the possession of the reporting
air carrier and are available for service on
the reporting carrier’s routes plus the number of days such aircraft are in service on
routes of others under wet-lease agreements.
Includes days in overhaul, or temporarily
out of service due to schedule cancellations.
Excludes days that newly acquired aircraft
are on hand but not available for productive
use, days dry-leased or rented to others, and
days in possession but formally withdrawn
from air transportation service.
Aircraft day assigned to service-carrier
routes—same as aircraft days assigned to service carrier’s equipment but excluding the number of days owned or rented equipment are in
the possession of others under interchange
agreements and including the number of
days aircraft of others are in the possession
of the air carrier under interchange agreements.
Aircraft, leased (rented). Aircraft obtained
from (or furnished to) others under lease or
rental arrangements. Leased and rented aircraft do not include those used under interchange agreements designed to provide
oneplane service over the routes of the air
carriers involved.
Aircraft type. A distinctive model as designated by the manufacturer.
Airport. A landing area regularly used by
aircraft for receiving or discharging passengers or cargo.
Airport, alternate. An approved airport to
which a flight may proceed if a landing at
the airport to which the flight was dispatched becomes inadvisable.

Airport-to-airport distance. The great circle
distance between airports, measured in statute miles in accordance with part 247 of this
chapter.
Air transportation. The carriage by aircraft
of persons, property, or mail.
Air transportation, charter. Air transportation authorized pursuant to section
401(d)(3).
Airworthiness (or Airworthy). When applied
to a particular aircraft or component part, it
denotes the ability of such aircraft or component part to perform its function satisfactorily through a range of operations determined by the Federal Aviation Administration.
Allocate. To assign an item or group of
items of investment, revenue, or cost to an
object, activity, process, or operation, in accordance with cost responsibilities, benefits
received, or other measure of apportionment.
Allocation, bases of. Bases of distribution
whereby revenues, expenses, and/or costs are
equitably apportioned among revenue, expense, property and equipment, and other accounts.
Amortization. The gradual extinguishment
of an amount in an account by distributing
such amount over a fixed period, over the life
of the asset or liability to which it applies or
over the period during which it is anticipated the benefit will be realized.
Asset, contingent. An asset the existence,
value, or ownership of which depend upon
the occurrence or nonoccurrence of a specific
event or upon the performance or nonperformance of a specified act.
Associated company. A company in which
the accounting air carrier holds 5 percent or
more of the outstanding proprietary interest; or a company which holds 5 percent or
more of the outstanding proprietary interest
of the accounting air carrier; or a company
that, directly or through one or more intermediaries, controls or is controlled by, or is
under common control with the accounting
air carrier. Companies owned or controlled
jointly with other air carriers shall be regarded as associated companies for purposes
of this system of accounts. (See also Control.)
Betterment. Any improvement to property
or equipment through the substitution of superior parts for inferior parts retired, the object of which is to make such property more
useful or of greater capacity than at the
time of acquisition or installation. (See also
Modification.)
BTS. The Bureau of Transportation Statistics.
Cargo. All traffic other than passengers.
Cargo transported. Cargo on board each
flight stage.
Certificated point. A city, place or population center authorized to receive scheduled
air service under a Certificate of Public Convenience and Necessity or under an exemption
issued to an air carrier.

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Certificate of Public Convenience and Necessity. A certificate issued to an air carrier
under 49 U.S.C. 41102, by the Department of
Transportation authorizing the carrier to engage in air transportation.
Company, predecessor. An air carrier whose
net assets and operations have been taken
over by one or more other air carriers.
Compensation (of personnel). Remuneration
to air carrier employees for personal services. Includes salaries, wages, overtime pay,
cost-of-living differentials, bonuses, etc., as
distinguished from per diem allowances or
reimbursement for expenses incurred by personnel for the benefit of the air carrier.
Continental United States. The 48 contiguous
States and the District of Columbia.
Control (including the terms Controlling,
Controlled by, and Under common control). The
possession, directly or indirectly, of the
power positively to direct, or cause the direction of or negate the direction of, the
management and policies of a company,
whether such power is through one or more
intermediary companies or alone or in conjunction with or pursuant to an agreement,
and whether such power is established
through a majority or minority ownership or
voting of securities, common directors, officers, or stockholders, voting trusts, holding
trusts, associated companies, contract, or
any other direct or indirect means.
Controlling person. (See Person Controlling
an air carrier)
Cost. The amount of cash (or its equivalent) actually paid for property, materials
and supplies, and services, including that
amount paid to put the property or materials and supplies in readiness for use. It includes such items as transportation charges,
installation charges, and customs duties,
less any cash or other discounts.
Cost, book. The amount at which an asset is
recorded in an account without the deduction of amounts in related allowances or
other accounts.
Cost, depreciated. The cost of property and
equipment less the related allowances for depreciation.
Cost, removal. The cost of demolishing, dismantling, tearing down, or otherwise removing property and equipment, including the
cost of related transportation and handling.
Debt, expense on. Expenses incurred by or
for the air carrier in connection with the
issuance and sale of evidences of debt (exclusive of the sale of reacquired securities),
such as fees for drafting mortgages and trust
deeds; fees and taxes for issuing or recording
evidences of debt; cost of engraving and
printing bonds, certificates of indebtedness,
and other commercial paper; specific costs of
obtaining
governmental
authority
for
issuance and filing notices thereunder; fees
for legal services; fees and commissions paid
underwriters, brokers, and salesmen for marketing such evidences of debt; fees and ex-

penses of listing on exchanges; and other like
costs.
Deferred taxes. Tax effects which are deferred for allocation to income tax expense
of future periods.
Department. Department of Transportation.
Departures completed, percent scheduled. The
percent of scheduled departures that were
performed.
Departures completed, scheduled. The number of takeoffs performed at each airport
pursuant to published schedules, exclusive of
extra sections to scheduled departures.
Departure performed. A takeoff made at an
airport.
Departure, scheduled. A takeoff scheduled
at an airport, as set forth in published schedules.
Depreciation (of depreciable property and
equipment). The loss in service value, not restored by current maintenance, incurred in
the course of service from causes known to
be in current operation, against which the
carrier is not protected by insurance, and
the effect of which can be forecast with reasonable accuracy. The causes of depreciation
include wear and tear, decay, action of the
elements, inadequacy, obsolescence, changes
in the art, changes in demand, and requirements of public authorities.
Discount (of securities issued or assumed by
the air carrier). The excess of (1) the par or
stated value of securities over (2) the then
current money value of the consideration received from their sale less the amount included for dividends or for interest accrued.
DOT. Department of Transportation.
Equipment. Tangible property other than
land, structures, and improvements.
Equity security. Any instrument representing ownership shares (for example,
common, preferred, and other capital stock),
or the right to acquire (for example, warrants, rights, and call options) or dispose of
(for example, put options) ownership shares
in an enterprise at fixed or determinable
prices. The term does not encompass preferred stock that by its terms either must be
redeemed by the issuing enterprise or is redeemable at the option of the investor, nor
does it include treasury stock or convertible
bonds.
Equivalent unit. A new unit substituted for
an existing unit that is worn out, is damaged
beyond repair, or has become inadequate in
service, the substituted unit having substantially no greater capacity than the unit for
which substituted.
Estimated economic life of leased property.
The estimated remaining period during
which the property is expected to be economically usable by one or more users, with
normal repairs and maintenance, for the purpose for which it was intended at the inception of the lease, without limitation by the
lease term.

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Section 03

Expense, capital stock. Expenses incurred by
or for the air carrier in connection with the
initial issuance and sale of capital stock (exclusive of the sale of reacquired capital
stock), such as fees and commissions paid to
promoters, underwriters, brokers, and salesmen; fees for legal services; cost of soliciting
subscriptions for capital stock; including
fees, commissions, and advertising; specific
costs of obtaining governmental authority
for issuance and filing notices thereunder;
fees and taxes for issuance of capital stock
and listing on exchanges; and the cost of preparing, engraving, printing, issuing, and distributing prospectuses and stock certificates.
Flight, developmental. A flight for (1) the development of a new route either prior or subsequent to certification by the Department
of Transportation; (2) the extension of an existing route; or (3) the integration of a new
type of aircraft or service.
Flight, extra section. A flight, conducted as
an integral part of scheduled service, that
has not been provided for in published schedules and is required for transportation of
traffic that cannot be accommodated on a
regularly scheduled flight. Flights made in
ferrying aircraft to meet schedules, or for
similar operational reasons, are not extra
sections and are classified as nonrevenue
flights even if an occasional shipment, as a
matter of special accommodation, is on
board.
Flight, ferry. A flight for the purpose of returning an aircraft to base, equipment
equalization, or moving an aircraft to and
from a maintenance base.
Flight, paid positioning. A flight for the purpose of positioning an empty aircraft in connection with a charter flight for which a specific charge is set forth in a tariff or contract for application directly to the positioning miles operated. Such flights are considered revenue flights for Form 41 reporting
purposes.
Flight, personnel training. A flight for the
purpose of obtaining flying time for flight
personnel or a flight in connection with a
personnel training program.
Flight stage. The operation of an aircraft
from takeoff to landing. For purposes of
classifying flight stages as between ‘‘domestic’’, ‘‘territorial’’, and ‘‘international’’,
technical stops are disregarded. (See Stops,
technical.)
Freight. Property, other than mail, transported by air.
Generally accepted accounting principles
(GAAP). The body of authoritative accounting knowledge governing the recording, presenting and disclosing of financial transactions, as incorporated in the pronouncements of the Financial Accounting Standards Board.
Group basis (in depreciation accounting). A
plan under which (1) depreciation is based

upon the application of a single depreciation
rate to the total book cost of all property included in a given depreciable property and
equipment account or class, despite differences in service life of individual items of
property and equipment, (2) the full original
cost, less any salvage realized, of an item of
depreciable property or equipment retired is
charged to the allowance for depreciation regardless of the age of the item, and (3) no
gain or loss is recognized on the retirement
of individual items of property or equipment.
Horsepower, maximum continuous for reciprocating engines. The brake horsepower developed in standard atmosphere at a specified
altitude and under the maximum conditions
of crankshaft rotational speed and engine
manifold pressure, and approved for use during periods of unrestricted duration.
Horsepower, maximum continuous for turbine
engines. The brake horsepower developed at
specified altitudes, atmospheric temperatures, and flight speeds and under the maximum conditions of rotor shaft rotational
speed and gas temperature, and approved for
use during periods of unrestricted duration.
Thrust, maximum continuous for turbine engines. The jet thrust developed at specified
altitudes, atmospheric temperatures, and
flight speeds and under the maximum conditions of rotor shaft rotational speed and gas
temperature, and approved for use during periods of unrestricted duration.
Hours, aircraft. The airborne hours of aircraft computed from the moment an aircraft
leaves the ground until it touches the ground
at the end of a flight.
Hours flown, revenue aircraft. The aircraft
hours of flights performed in revenue service.
Hours in capitalized projects, aircraft. Aircraft hours applicable to ferrying newly acquired aircraft from the factory, to capitalized extension and development preoperating
projects and to other costs which have been
capitalized.
Hours per aircraft per day—carrier’s equipment, revenue. Average hours of productive
use per day in revenue service of reporting
carrier’s equipment determined by dividing
(1) Aircraft days assigned to service—carrier’s equipment into (2) Revenue aircraft
hours minus Revenue hours on other carrier’s interchange equipment plus Total
hours by others on the carrier’s interchange
equipment.
Hours per aircraft per day—carrier’s routes,
revenue. Average hours of productive use per
day in revenue service on reporting carrier’s
routes determined by dividing (1) Aircraft
days assigned to service-carrier’s routes into
(2) Revenue aircraft hours.
Hours, ramp-to-ramp. The aircraft hours
computed from the moment the aircraft first
moves under it own power for purposes of
flight, until it comes to rest at the next
point of landing.

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Improvement. An addition or alteration to
land, a building, or a unit of equipment that
results in a better piece of property, in the
sense of greater durability, or in increased
productivity or efficiency. (See also Modification.)
Income tax expense. The amount of income
taxes (whether or not currently payable or
refundable) allocable to a period in the determination of net income.
Income taxes. Taxes based on income determined under provisions of the United States
Internal Revenue Code and foreign, State,
and other taxes (including franchise taxes)
based on income.
Insurance, self. The assumption by an air
carrier of a risk of loss or liability arising
from an accident or other contingent event.
Interchange agreement. An agreement under
which aircraft of one air carrier are utilized
to provide one-plane service over its own
routes and the routes of other air carriers.
Interperiod tax allocation. The process of apportioning income taxes among periods.
Inventory, perpetual. A book inventory kept
in continuous agreement with stock on hand
by means of a detailed record.
Investor controlled company (for purposes of
applying the equity method of accounting). Any
business entity in which the accounting air
carrier is able to exercise significant influence over operating and financial policies of
the issuing company. Significant influence
will be presumed, unless established to the
contrary by waiver request, with ownership
of 20 percent or more of the outstanding voting capital stock. Ability to exercise influence may be indicated in several ways, such
as representation on the Board of Directors,
participation in policy-making processes,
material intercompany transactions, interchange of managerial personnel, or technological dependency. Investor controlled companies shall also be regarded as associated
companies for purposes of this system of accounts (see also Associated company).
Item, delayed. An item relating to transactions that occurred during a prior accounting period and that requires further accounting treatment for a true statement of financial condition or operating results. It includes adjustments of errors in the operating
revenue, operating expense, and other income accounts for prior periods.
Liability, contingent. A possible source of
obligation of an air carrier dependent upon
the fulfillment of conditions regarded as uncertain.
Load, available. Represents the maximum
salable load. It is the allowable gross weight
less the empty weight, less all justifiable aircraft equipment, and less the operating load
(consisting of minimum fuel load, oil, flight
crew, steward’s supplies, etc.). For passenger
aircraft, the available load must not exceed
the weight of the maximum number of passengers who can be accommodated in the

seats installed in the aircraft plus the weight
of the traffic that can be accommodated in
the cargo space.
Load, average revenue. The average total
revenue tons carried in revenue services, determined by dividing total revenue ton-miles
by aircraft miles flown in revenue services.
Load, average revenue passenger. Average
number of revenue passengers carried in passenger services, determined by dividing revenue passenger-miles by aircraft miles flown
in revenue passenger services.
Load factor, over-all revenue. The percent
that total revenue ton-miles (passenger plus
nonpassenger) are of available ton-miles in
revenue services.
Load factor, revenue passenger. The percent
that revenue passenger-miles are of available
seat-miles in revenue passenger services.
Load, minimum fuel. The minimum quantity of fuel with which an aircraft may be
dispatched in accordance with the safety operating needs of the air carrier.
Load, salable. (See Load, available.)
Mail, nonpriority. All mail for which transportation by air is provided on a space available basis.
Mail, priority. All mail for which transportation by air is provided on a priority basis.
Mile. A statute mile (5,280 feet).
Miles completed, percent scheduled aircraft.
The percent of scheduled aircraft miles
which were performed.
Miles completed, scheduled aircraft. The aircraft miles performed on scheduled flights
computed between only those scheduled
points actually served.
Miles flown, aircraft. The miles (computed
in airport-to-airport distances) for each
flight stage actually completed, whether or
not performed in accordance with the scheduled pattern. For this purpose, operation to
a flag stop is a stage completed even though
a landing is not actually made. In cases
where the interairport distances are inapplicable, aircraft miles flown are determined by
multiplying the normal crusing speed for the
aircraft type by the airborne hours.
Miles flown, nonrevenue aircraft. The aircraft miles flown on nonrevenue flights, such
as ferry (including empty backhauls to MAC
one-way charters), personnel training, extension and development, and abortive revenue
flights.
Miles, revenue aircraft. The aircraft miles
flown in revenue service.
Miles, scheduled aircraft. The sum of the
airport-to-airport distances of all flights
scheduled to be performed over the air carrier’s certificated routes pursuant to published flight schedules. Flights listed in the
published schedules for operation only as
extra sections, when traffic warrants, are excluded.
Modification. An alteration in a structure
or unit of equipment that changes its design

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and is made to correct an error, increase production, improve efficiency of operation, or
for some other reason.
Obsolescence. The process of becoming out
of date due to progress of the arts and
sciences, changed economic conditions, legislation, etc., which ultimately results in the
retirement or other disposition of property.
Off-Line. Installations maintained or facilities used for other than scheduled certificated air services.
On-Line. Installations maintained or facilities used in conducting scheduled certificated air services.
Domestic. Flight stages with both terminals
within the 50 States of the United States and
the District of Columbia.
Territorial. Flight stages with both terminals within territory under U.S. jurisdiction
where at least one of the terminals is not
within a State or the District of Columbia.
International. Flight stages with one or
both terminals outside of territory under
U.S. jurisdiction.
Operations, systems. The over-all operations
of an air carrier including all of the operating entities of an air carrier having multiple operations.
Passenger-mile. One passenger transported 1
mile. Passenger-miles are computed by multiplying the aircraft miles flown on each
flight stage by the number of passengers
transported on that stage.
Passenger-mile, nonrevenue. One nonrevenue
passenger transported one mile.
Passenger-mile, revenue. One revenue passenger transported one mile.
Passenger, nonrevenue. A person traveling
free or under token charges, except those expressly named in the definition of revenue
passenger; a person traveling at a fare or discount available only to employees or authorized persons of air carriers or their agents or
only for travel on the business of the carriers; and an infant who does not occupy a
seat. (This definition is for 14 CFR part 241
traffic reporting purposes and may differ
from the definitions used in other parts by
the Federal Aviation Administration and the
Transportation Security Administration for
the collection of Passenger Facility Charges
and Security Fees.)
The definition includes, but is not limited
to following examples of passengers when
traveling free or pursuant to token charges:
(1) Directors, officers, employees, and others authorized by the air carrier operating
the aircraft;
(2) Directors, officers, employees, and others authorized by the air carrier or another
carrier traveling pursuant to a pass interchange agreement;
(3) Travel agents being transported for the
purpose of familiarizing themselves with the
carrier’s services;

(4) Witnesses and attorneys attending any
legal investigation in which such carrier is
involved;
(5) Persons injured in aircraft accidents,
and physicians, nurses, and others attending
such persons;
(6) Any persons transported with the object
of providing relief in cases of general epidemic, natural disaster, or other catastrophe;
(7) Any law enforcement official, including
any person who has the duty of guarding
government officials who are traveling on official business or traveling to or from such
duty;
(8) Guests of an air carrier on an inaugural
flight or delivery flights of newly-acquired
or renovated aircraft;
(9) Security guards who have been assigned
the duty to guard such aircraft against unlawful seizure, sabotage, or other unlawful
interference;
(10) Safety inspectors of the National
Transportation Safety Board or the FAA in
their official duties or traveling to or from
such duty;
(11) Postal employees on duty in charge of
the mails or traveling to or from such duty;
(12) Technical representatives of companies that have been engaged in the manufacture, development or testing of a particular
type of aircraft or aircraft equipment, when
the transportation is provided for the purpose of in-flight observation and subject to
applicable FAA regulations;
(13) Persons engaged in promoting air
transportation;
(14) Air marshals and other Transportation
Security officials acting in their official capacities and while traveling to and from
their official duties; and
(15) Other authorized persons, when such
transportation is undertaken for promotional purpose.
Passenger, revenue. A passenger for whose
transportation an air carrier receives commercial remuneration. (This definition is for
14 CFR part 241 traffic reporting purposes
and may differ from the definitions used in
other parts by the Federal Aviation Administration and the Transportation Security
Administration for the collection of Passenger Facility Charges and Security Fees.)
This includes, but is not limited to, the following examples:
(1) Passengers traveling under publicly
available tickets including promotional offers (for example two-for-one) or loyalty programs (for example, redemption of frequent
flyer points);
(2) Passengers traveling on vouchers or
tickets issued as compensation for denied
boarding or in response to consumer complaints or claims;
(3) Passengers traveling at corporate discounts;

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(4) Passengers traveling on preferential
fares (Government, seamen, military, youth,
student, etc.);
(5) Passengers traveling on barter tickets;
and
(6) Infants traveling on confirmed-space
tickets.
Passengers transported. Passengers on board
each flight stage.
Person controlling an air carrier. Any person,
as defined in 49 U.S.C. 40102, whom the Department has found, in any proceeding, to
control an air carrier, or who holds, directly
or indirectly, the legal or beneficial ownership of more than 50 percent of the outstanding voting capital stock or capital of an
air carrier, and who does not make a proper
showing to the Department that he or she
does not control the carrier despite such
stock ownership, shall be deemed to be a person controlling the carrier for the purpose of
this part. A brokerage firm which holds
record ownership of securities merely for the
convenience of the customer beneficially
owning the stock shall not be deemed a person controlling an air carrier.
Premium (as applied to securities issued or assumed by the air carrier). The excess of (1) the
then current money value of the consideration received from their sale, less the
amount included therein for dividends or interest accrued, over (2) their par or stated
value.
Pretax accounting income. Income or loss for
a period exclusive of related income tax expense.
Property (as applied to traffic). (See Cargo.)
Replacement. Substitution of new for existing facilities that are worn out, damaged beyond repair, or have become inadequate in
service.
Reporting carrier for T–100 purposes means
the air carrier in operational control of the
flight, i.e., the carrier that uses its flight
crew under its own FAA operating authority.
Residual value. The predetermined portion
of the cost of a unit of property or equipment excluded from depreciation. It shall
represent a fair and reasonable estimate of
recoverable value as at the end of the service
life over which the property or equipment is
depreciated and shall give due consideration
to the proceeds anticipated from disposition
of the property or equipment and the extent
to which costs attaching to property or
equipment
are
otherwise
recoverable
through charges against income.
Retirement. The permanent withdrawal of
assets from services of the corporate entity
through sale, abandonment, demolition, or
other disposal.
Retirement, date of. The date on which property or equipment is permanently withdrawn
from services of the corporate entity.
Route, certificated. The route(s) over which
an air carrier is authorized to provide air
transportation by a Certificate of Public

Convenience and Necessity issued by the Department of Transportation pursuant to section 401(d) (1) or (2) of the Act.
Salvage value. The amount received for
property retired, less the expenses incurred
in connection with the sale or in the preparation of the property for sale; or, if retained, the amount at which the material recovered is charged to materials and supplies
or other appropriate account.
Seats available. Installed seats in an aircraft (including seats in lounges) exclusive of
any seats not offered for sale to the public by
the carrier; provided that in no instance
shall any seat sold be excluded from the
count of available seats.
Seats, average available. The average number of seats available for passengers, determined by dividing available seat-miles by
revenue aircraft miles flown in passenger
service.
Seat-miles available, revenue. The aircraft
miles flown on each flight stage multiplied
by the number of seats available for revenue
use on that stage.
Section 41103 cargo operations. The carriage,
pursuant to 49 U.S.C. 41103, by aircraft of
property and/or mail as a common carrier for
compensation or hire in commerce between a
place in any State of the United States, or
the District of Columbia, or Puerto Rico, or
the U.S. Virgin Islands, and a place in any
other of those entities, or between places in
the same State or other entity through the
air-space over any place outside thereof, or
between places within the District of Columbia, Puerto Rico, or the U.S. Virgin Islands.
This includes commerce moving partly by
aircraft and partly by other forms of transportation, as well as commerce moving wholly by aircraft.
Segment, service. A pair of points served or
scheduled to be served by a single stage of at
least one flight within any given time period.
Service, charter. Nonscheduled air transport
service in which the party receiving transportation obtains exclusive use of an agreed
upon portion of the total capacity of an aircraft with the remuneration paid by the
party receiving transportation accruing directly to, and the responsibility for providing transportation is that of, the accounting air carrier.
Service, coach (tourist). Transport service
specifically established for the carriage of
passengers at special reduced passenger fares
that are predicated on both the operation of
specifically designated aircraft space and a
reduction in the quality of service regularly
and ordinarily provided.
Service, first class. Transport service established for the carriage of passengers moving
at either standard fares or premium fares, or
at reduced fares not predicated upon the operation of specifically allocated aircraft

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space, and for whom standard or premium
quality services are provided.
Service life. The period between the date of
installation of property or equipment and its
date of retirement.
Service, mixed. Transport service for the
carriage of both first-class and coach passengers on the same aircraft.
Service, nonpassenger. Transport service established for the carriage of traffic other
than passengers.
Service, nonscheduled. Includes transport
service between points not covered by Certificates of Public Convenience and Necessity issued by the Department of Transportation to the air carrier; services pursuant to
the charter or hiring of aircraft; other revenue services not constituting an integral
part of the services performed pursuant to
published schedules; and related nonrevenue
flights.
Service, passenger-cargo. Transport service
established for the carriage of passengers
which may also be used jointly for the transportation of cargo.
Service, scheduled. Transport service operated pursuant to published flight schedules,
including extra sections and related nonrevenue flights.
Service, transport. The operation of facilities for the carriage of traffic by air.
Services, all. The total of scheduled and
nonscheduled transport services.
Stop, flag. A point on an air carrier’s operating system that is scheduled to be served
only when traffic is to be picked up or discharged.
Stops, technical. Aircraft landing made for
purposes other than enplaning or deplaning
traffic. For purposes of identifying reporting
entities, landings made for stopover passengers are regarded as technical stops.
Tariff, published. A publication containing
fares and rates applicable to the transportation of persons or cargo and rules relating
to or affecting such fares or rates of transportation, filed with the Department of
Transportation.
Taxable income. The excess of revenues over
deductions or the excess of deductions over
revenues to be reported for income tax purposes for a period.
Tax effects. Differentials in income taxes of
a period attributable to (1) revenue or expense transactions which enter into the determination of pretax accounting income in
one period and into the determination of taxable income in another period, (2) deductions
or credits that may be carried backward or
forward for income tax purposes, and (3) adjustments of prior periods (or of the opening
balance of retained earnings) and direct entries to other stockholders’ equity accounts
which enter into the determination of taxable income in a period but which do not
enter into the determination of pretax accounting income of that period. A permanent

difference does not result in a ‘‘tax effect’’ as
the term is used in this System of Accounts
and Reports.
Ton. A short ton (2,000 pounds).
Ton-mile. One ton transported 1 mile. Tonmiles are computed by multiplying the aircraft miles flown on each flight stage by the
number of tons transported on that stage.
Ton-mile, nonrevenue. One ton of nonrevenue traffic transported 1 mile.
Ton-mile, passenger. One ton of passenger
weight (including all baggage) transported 1
mile. (See also Weight, passenger.)
Ton-mile, revenue. One ton of revenue traffic transported 1 mile.
Ton-miles available, revenue. The aircraft
miles flown on each flight stage multiplied
by the ton capacity available for use on that
stage.
Traffic, deplaned. A count of the number of
passengers getting off and tons of cargo unloaded from an aircraft. For this purpose,
passengers an cargo on aircraft leaving a
carrier’s system on interchange flights are
considered as deplaning and the interchange
point; and passengers and cargo moving from
one operation to another operation of the
same carrier, for which separate reports are
required by the Department of Transportation, are considered as deplaning at the
junction point.
Traffic, enplaned. A count of the number of
passengers boarding and tons of cargo loaded
on an aircraft. For this purpose, passengers
and cargo on aircraft entering a carrier’s
system on interchange flights are considered
as enplaning at the interchange point; and
passengers and cargo moving from one operation to another operation of the same carrier, for which separate reports are required
by the Department of Transportation, are
considered as enplaning at the junction
point.
Traffic, nonrevenue. Passengers and cargo
transported by air for which no remuneration or token service charges are received by
the air carrier. Airline employees, officers
and directors, or other persons, except for
ministers of religion, who are traveling
under reduced-rate transportation authorized by 49 U.S.C. 41511(a) and 14 CFR part 223,
as well as travel agents, cargo agents, and
tour conductors traveling at reduced fares
are also considered nonrevenue traffic.
Traffic office. A facility where air transportation is sold, and related processes of documentation and reservation confirmation are
performed.
Traffic, revenue. Passengers and cargo
transported by air for which remuneration is
received by the air carrier. Airline employees, officers and directors, or other persons,
except for ministers of religion, who are
traveling under reduced-rate transportation
authorized by 49 U.S.C. 41511(a) and 14 CFR
part 223, travel agents, cargo agents, and
tour conductors traveling at reduced fares,

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and other passengers and cargo carried for
token service charges, are not considered as
revenue traffic.
Transportation, free. The carriage of any
person or cargo (other than cargo owned by
the air carrier) without compensation.
Unit basis (in depreciation accounting). A
plan under which depreciation expenses is
accrued upon the basis of the book cost of
the individual item of property in relation to
the service life and salvage value of the particular item.
Value, service. The difference between the
book cost and the residual value of property
and equipment.
Weight, allowable gross. The maximum gross
weight (of the aircraft and its contents)
which an aircraft is licensed to carry into
the air on each flight stage.
Weight, average available. The average capacity available for revenue traffic, determined by dividing available ton-miles by aircraft miles in revenue service.
Weight, empty. The weight of the airframe,
engines, propellers, and fixed equipment of
an aircraft. Empty weight excludes the
weight of the crew and payload, but includes
the weight of all fixed ballast, unusable fuel
supply, undrainable oil, total quantity of engine coolant, and total quantity of hydraulic
fluid.
Weight, passenger. For the purposes of this
part, a standard weight of 200 pounds per passenger (including all baggage) is used for all
civil operations and classes of service. Other
weights may be prescribed in specific instances upon the initiative of the Department of Transportation or upon a factually
supported request by an air carrier.
Wet-Lease Agreement means an agreement
under which one carrier leases an aircraft
with flight crew to another air carrier.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by Amdt. 241–58, 54 FR 5590, Feb. 89, 1989]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting Section 03, see the List of
CFR Sections Affected, which appears in the
Finding Aids section of the printed volume
and on GPO Access.

Section 04

Air Carrier Groupings

(a) All large certificated air carriers are
placed into three basic air carrier groupings
based upon their level of operations and the
nature of these operations. In order to determine the level of operations, total operating
revenues for a twelve-month period are used.
The following operating revenue ranges are
used to establish air carrier groupings:
Carrier Group
I .............................
II ............................
III ...........................

Total Annual Operating Revenues
0–$100,000,000
$100,000,001–$1,000,000,000
$1,000,000,001+

For reporting purposes, Group I air carriers are further divided into two subgroups:
(1) Air carriers with total annual operating
revenues from $20,000,000 to $100,000,000 and
(2) Air carriers with total annual operating
revenues below $20,000,000.
(b) Both the criteria for establishing air
carrier groupings and the assignment of each
air carrier to a specific group of carriers will
be reviewed periodically by the Director, Office of Airline Information, to assure the
maintenance of appropriate standards for the
grouping of carriers. When an air carrier’s
level of operations passes the upper or lower
limit of its currently assigned carrier grouping, the carrier is not automatically transferred to a different group and a new level of
reporting. The Office of Airline Statistics
will issue an updated listing of the carrier
groups on an annual basis. A carrier may petition for reconsideration of its assigned carrier grouping or request a waiver from the
accounting and reporting requirements that
are applicable to a particular group under
the provisions of section 1–2 of this Uniform
System of Accounts and Reports.
[Amdt. 241–60, 56 FR 12658, Mar. 27, 1991, as
amended at 60 FR 66723, Dec. 26, 1995]

GENERAL ACCOUNTING PROVISIONS
Section 1 Introduction to System of
Accounts and Reports
Sec. 1–1 Applicability of system of accounts and reports.
Each large certificated air carrier
shall keep its books of account, records
and memoranda and make reports to
the BTS in accordance with this system of accounts and reports. The BTS
reserves the right, however, under the
provisions of sections 49 U.S.C. 41701
and 41708, to expand or otherwise modify the classes of carriers subject to
this system of accounts and reports.
[ER–1400, 50 FR 11, Jan. 2, 1985, as amended
at 60 FR 66723, Dec. 26, 1995]

Sec. 1–2 Waivers from this system of
accounts and reports.
A waiver from any provision of this
system of accounts or reports may be
made by the BTS upon its own initiative or upon the submission of written
request therefor from any air carrier,
or group of air carriers, provided that
such a waiver is in the public interest
and each request for waiver expressly
demonstrates that: existing peculiarities or unusual circumstances warrant

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a departure from a prescribed procedure or technique; a specifically defined alternative procedure or technique will result in a substantially
equivalent or more accurate portrayal
of operating results or financial condition, consistent with the principles embodied in the provisions of this system
of accounts and reports; and the application of such alternative procedure
will maintain or improve uniformity in
substantive results as between air carriers.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended at 60 FR 66723, Dec. 26, 1995]

Sec. 1–3 General description of system
of accounts and reports.
(a) This system of accounts and reports is designed to permit limited contraction or expansion to reflect the
varying needs and capacities of different air carriers without impairing
basic accounting comparability as between air carriers. In its administration three air carrier groups, designated Group I, Group II, and Group
III, respectively (see section 04), are established by the BTS. This grouping
will be reviewed from time to time
upon petition of individual air carriers
or by initiative of the BTS with the
view of a possible regrouping of the air
carriers.
(b) Under the system of accounts prescribed, balance sheet elements are accounted for by all air carrier groups
within a fixed uniform pattern of specific accounts. All profit and loss elements are accounted for within specific
objective accounts established for each
air carrier group resulting from dual
classifications, designated for each air
carrier group, which are descriptive of
both basic areas of financial activity,
or functional operation, and objective
served. The profit and loss elements of
the three air carrier groups can be reduced to broad objectives and general
or functional classifications which are
comparable for all air carrier groups.
Both balance sheet and profit and loss
accounts and account groupings are designed, in general, to embrace all activities, both air transport and other
than air transport, in which the air
carrier engages and provide for the separation of elements identifiable exclusively with other than air transport ac-

tivities. Profit and loss elements which
are recorded during the current accounting year are subclassified as between (1) those which relate to the current accounting year and adjustments
of a recurrent nature applicable to
prior accounting years, and (2) extraordinary items of material magnitude.
(c) In order to afford air carriers as
much flexibility and freedom as possible in establishing ledger and subsidiary accounts to meet their individual needs, a minimum number of account subdivisions have been prescribed in this Uniform System of Accounts. It is intended, however, that
each air carrier, in maintaining its accounting records, will provide subaccount and subsidiary account segregations of accounting elements
which differ in nature of accounting
characteristics, in a manner which will
render individual elements readily discernible and traceable throughout the
accounting system, and will provide for
relating profit and loss elements to applicable balance sheet counterparts.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended at 60 FR 66723, Dec. 26, 1995]

Sec. 1–4

System of accounts coding.

(a) A four digit control number is assigned for each balance sheet and profit
and loss account. Each balance sheet
account is numbered sequentially,
within blocks, designating basic balance sheet classifications. The first
two digits of the four digit code assigned to each profit and loss account
denote a detailed area of financial activity or functional operation. The
first two digits, thus assigned to each
profit and loss account, are numbered
sequentially within blocks, designating
more general classifications of financial activity and functional operation.
The second two digits assigned to profit and loss accounts denote objective
classifications.
(b) A fifth digit, appended as a decimal, has been assigned for internal
control by the BTS of prescribed subdivisions of the primary objective balance sheet and profit and loss classifications. A different fifth digit code
number from that assigned by the BTS
may be adopted for internal recordkeeping by the air carrier provided the

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Sec. 1–5

14 CFR Ch. II (1–1–05 Edition)

prescribed subclassification of objective accounts is not impaired and the
code number assigned by the BTS is
employed in reporting to the BTS on
Form 41 Reports.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended at 60 FR 66723, Dec. 26, 1995]

Sec. 1–5

Records.

(a) The general books of account and
all books, records, and memoranda
which support in any way the entries
therein shall be kept in such manner as
to provide at any time full information
relating to any account. The entries in
each account shall be supported by
such detailed information as will
render certain the identification of all
facts essential to a verification of the
nature and character of each entry and
its proper classification under the prescribed Uniform System of Accounts.
Registers, or other appropriate records,
shall be maintained of the history and
nature of each note receivable and each
note payable.
(b) The books and records referred to
herein include not only accounting
records in a limited technical sense,
but all other records such as organization tables and charts, internal accounting manuals and revisions thereto, minute books, stock books, reports,
cost distributions and other accounting
work sheets, correspondence, memoranda, etc., which may constitute necessary links in developing the history
of, or facts regarding, any accounting
or financial transaction.
(c) All books, records and memoranda
shall be preserved and filed in such
manner as to readily permit the audit
and examination thereof by representatives of the DOT. All books, records,
and memoranda shall be housed or
stored in such manner as to afford protection from loss, theft, or damage by
fire, flood or otherwise and no such
books and records shall be destroyed or
otherwise disposed of, except in conformance with 14 CFR part 249 for the
preservation of records.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended at 60 FR 66723, Dec. 26, 1995]

Sec. 1–6

Accounting entities.

(a) Separate accounting records shall
be maintained for each air transport

entity for which separate reports to
the BTS are required to be made by
sections 21(g) and for each separate
corporate or organizational division of
the air carrier. For purposes of this
Uniform System of Accounts and Reports, each nontransport entity conducting an activity which is not related to the air carrier’s transport activities and each transport-related activity or group of activities qualifying
as a nontransport venture pursuant to
paragraph (b) of this section, whether
or not formally organized within a distinct organizational unit, shall be
treated as a separately operated organizational division; except that provisions of this paragraph and paragraph
(b) shall not apply to leasing activities.
(b) As a general rule, any activity or
group of activities comprising a transport-related service provided for in
transport-related revenue and expense
accounts 09 through 18 shall be considered a separate nontransport venture
under circumstances in which either:
(1) A separate corporate or legal entity
has been established to perform such
services, (2) the aggregate annual revenue rate, as determined in section 2–
1(d), during either of the prior two
years exceeds the greater of $1 million
per annum or one percent of the air
carrier’s total annual transport revenues, or (3) the aggregate annual expense rate, as determined in section 2–
1(d), during either of the prior two
years exceeds the greater of $1 million
or one percent of the carrier’s total annual operating expenses: Provided, That
revenues and expenses from in-flight
sales, and interchange sales shall be
considered related to air transportation and accounted for accordingly,
regardless of the revenue or expense
standard set forth above.
(c) The records for each required accounting entity shall be maintained
with sufficient particularity to permit
a determination that the requirements
of section 2–1 have been complied with.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–841, 39 FR 11994, Apr. 2, 1974; ER–
1022, 42 FR 46495, Sept. 15, 1977; ER–1027, 42
FR 60127, Nov. 25, 1977; 60 FR 66723, Dec. 26,
1995]

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Office of the Secretary, DOT
Sec. 1–7

Sec. 2–2

Interpretation of accounts.

To the end that uniform accounting
may be maintained, questions involving matters of accounting significance
which are not clearly provided for
should be submitted to the Director,
Office of Airline Information, K–25, Bureau of Transportation Statistics, for
explanation, interpretation, or resolution.
[Amdt. 241–58, 54 FR 5591, Feb. 6, 1989, as
amended at 60 FR 66723, Dec. 26, 1995]

Sec. 1–8 Address for reports and correspondence.
All reports required under this part
and related correspondence shall be addressed to: Office of Airline Information, K–25, Room 4125, U.S. Department
of Transportation, 400 Seventh St.,
SW., Washington, DC 20590.
[[Amdt. 241–58, 54 FR 5592, Feb. 6, 1989, as
amended at 60 FR 66723, Dec. 26, 1995]

Section 2

General Accounting Policies

Sec. 2.1 Generally accepted accounting principles.
(a) The accounting provisions contained in this part are based on generally accepted accounting principles
(GAAP). Persons subject to this part
are authorized to implement, as prescribed by the Financial Accounting
Standards Board, newly issued GAAP
pronouncements until and unless the
Director, Office of Airline Information
(OAI), issues an Accounting Directive
making an initial determination that
implementation of a new pronouncement would adversely affect the Department’s programs.
(b) The Director, OAI, shall review
each newly issued GAAP pronouncement to determine its affect on the Department’s regulatory programs. If
adopting a specific change in GAAP
would adversely affect the Department’s programs, the Director will
issue the results of the review in the
form of an Accounting Directive. The
directive will state the reasons why the
particular change should not be incorporated in the uniform system of accounts and contain accounting guidance for maintaining the integrity of
the Department’s air carrier accounting provisions.

(c) Objections and comments relating
to the Department’s decision not to
implement a change in generally accepted principles may be addressed to
Director, Office of Airline Information,
K–25, Room 4125, U.S. Department of
Transportation, 400 Seventh St., SW.,
Washington, DC 20590. If significant objections are raised urging adoption of a
particular GAAP pronouncement, the
Department will institute a rulemaking.
[[Amdt. 241–58, 54 FR 5592, Feb. 6, 1989, as
amended at 60 FR 66723, Dec. 26, 1995]

Sec. 2–2 Basis of allocation between
entities.
(a) The provisions of this section
shall apply to each person controlling
an air carrier, each person controlled
by the air carrier, as well as each
transport entity and organizational division of the air carrier for which separate records must be maintained pursuant to section 1–6.
(b) Each transaction shall be recorded and placed initially under accounting controls of the particular air
transport entity or organizational division of the air carrier or member of an
affiliated group to which directly
traceable. If applicable to two or more
accounting entities, a proration shall
be made from the entity of original recording to other participating entities
on such basis that the statements of financial condition and operating results
of each entity are comparable to those
of distinct legal entities. The allocations involved shall include all debits
and credits associated with each entity.
(c) For purposes of this section, investments by the air carrier in resources or facilities used in common by
the regulated air carrier and those
transport-related revenue services defined as separate nontransport ventures under section 1–6(b) shall not be
allocated between such entities but
shall be reflected in total in the appropriate accounts of the entity which
predominately uses those investments.
Where the entity of predominate use is
a nontransport venture, the air carrier
shall reflect the investment in account
1510.3, Advances to Associated Companies.

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Sec. 2–3

14 CFR Ch. II (1–1–05 Edition)

(d) For purposes of this Uniform System of Accounts and Reports, all revenues shall be assigned to or apportioned between accounting entities on
bases which will fully recognize the
services provided by each entity, and
expenses, or costs, shall be apportioned
between accounting entities on such
bases as will result: (1) With respect to
transport-related services, in the assignment thereto of proportionate direct overheads, as well as direct labor
and materials, of the applicable expense functions prescribed by this system of accounts and reports, and (2)
with respect to separate ventures, in
the assignment thereto of proportional
general and administrative overheads
as well as the direct overheads, labor,
and materials.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–841, 39 FR 11994, Apr. 2, 1974; ER–
1401, 50 FR 238, Jan. 3, 1985. Redesignated and
further amended by Amdt. 241–58, 54 FR 5592,
Feb. 6, 1989]

Sec. 2–3 Distribution of revenues and
expenses within entities.
(a) Revenues and expenses attributable to a single natural objective account or functional classification shall
be assigned accordingly.
(b) Revenue and expense items which
are common to two or more natural objective accounts shall be recorded in
the objective accounts to which they
predominantly relate.
(c) Expense items contributing to
more than one function shall be
charged to the general overhead functions to which applicable except that
where only incidental contribution is
made to more than a single function an
item may be included in the function
to which primarily related, provided
such function is not distorted by including an aggregation of amounts applicable to other functions. When assignment of expense items on the basis
of the primary activity to which related does not in the aggregate result
in a fair presentation of the expenses
applicable to each function, apportionment shall be made between functions
based upon a study of the contribution

to each function during a representative period.
[ER–755, 37 FR 19726, Sept. 21, 1972. Redesignated by Amdt. 241–58, 54 FR 5592, Feb. 6,
1989]

Sec. 2–4

Accounting period.

(a) The accounting year of each air
carrier subject to this Uniform System
of Accounts shall be the calendar year
unless otherwise approved by the BTS.
(b) Each air carrier shall keep its financial accounts and records on a full
accrual basis for each quarter so that
all transactions, as nearly as may reasonably be ascertained, shall be fully
reflected in the air carrier’s books for
the quarter in which revenues have
been earned and the costs attaching to
the revenues so earned in each quarter
have been incurred independently of
the incidence of sales or purchases and
settlement with debtors or creditors.
(c) Expenditures incurred during the
current accounting year which demonstrably benefit operations to be performed during subsequent accounting
years to a significant extent shall be
deferred and amortized to the period in
which the related operations are performed when of sufficient magnitude to
distort the accounting results of the
year in which incurred.
(d) Expenditures charged directly or
amortized to operations within one accounting year shall not be reversed in
a subsequent accounting year and reamortized or charged directly against
operations of subsequent years except
that retroactive adjustments are permitted where necessary to conform
with adjustments required by the DOT
for ratemaking purposes.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–1027, 42 FR 60127, Nov. 25, 1977; ER–
1188, 45 FR 48870, July 22, 1980; 60 FR 66723,
66725, Dec. 26, 1995]

Sec. 2–5 Revenue and accounting practices.
(a) Revenue accounting practices
shall conform to the provisions of account 2160, Air Traffic Liability.
(b) Each route air carrier shall physically verify the reliability of its passenger revenue accounting practice at
least once each accounting year.

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Office of the Secretary, DOT

Section 3

(c) For those carriers who use the
yield or average-fare method to determine earned revenue, the analysis supporting the verification shall include:
(1) The cutoff date for the liability to
be verified; such cutoff date shall be at
the end of a calendar month.
(2) The number of months after the
cutoff date during which documents
were examined to verify the liability;
the number of months after the cutoff
date during which documents are examined shall not exceed the maximums
set forth below:

[ER–948, 41 FR 12290, Mar. 25, 1976, as amended by ER–1401, 50 FR 238, Jan. 3, 1985. Redesignated at Amdt. 241–58, 54 FR 5592, Feb. 6,
1989; 60 FR 66725, Dec. 26, 1995]

BALANCE SHEET CLASSIFICATIONS
Section 3 Chart of Balance Sheet Accounts
[See footnotes at end of table]

Maximum
months 1

Class of carrier
TWA .....................................................................
Trunks (except TWA) ..........................................
All other route air carriers ....................................
1 Applies

with the general ledger. If the sales
listing is not in agreement with the Air
Traffic Liability control account, the
amount of such difference shall be
shown on such statement.

General classification
Name of account

18
12
6

only to carriers on a yield or average-fare basis.

(3) The nature of the documents
which were examined for purposes of
the verification.
(4) The totals for each of the various
types of documents examined, on actual or sampling basis.
(5) A description of the sampling
technique and conversion to totals, if
sampling was employed.
(6) The amount and basis for all estimates employed in the verification.
(7) The amount of resulting adjustments and the quarter in which such
adjustments were, or are to be, made in
the accounts.
(d) For those carriers who use the
sales-lift match method to determine
earned revenue, the analysis supporting
the
physical
inventory
verification shall include:
(1) The cutoff date for the liability to
be verified; such cutoff date shall be at
the end of a calendar month.
(2) A trial balance as of the cutoff
date of all subaccounts supporting the
Air Traffic Liability control account;
the subsidiary trial balance must agree
with the Air Traffic Liability control
account or a reconciliation statement
furnished.
(3) A statement to the effect that a
sales listing of the value of all unmatched auditor coupons has been
compiled and compared to the general
ledger control figure; the statement required by this subparagraph shall indicate whether or not the value of the
unmatched coupons is in agreement

Current assets:
Cash ...................................
Short-term investments ......
Notes receivable ................
Accounts receivable ...........
Allowance for uncollectible
accounts .........................
Spare parts and supplies ...
Allowance for obsolescence—Spare parts and
supplies ...........................
Prepaid items .....................
Other current assets ..........
Investments and special
funds:
Investments in associated
companies ......................
Investments in investor
controlled companies ......
Investments in other associated companies ............
Advances to associated
companies ......................
Other investments and receivables .........................
Special funds ......................
Property and equipment ........

Airframes ................................
Airframes ............................
Unamortized airframe overhauls ...............................
Aircraft engines ......................
Aircraft engines ..................
Unamortized aircraft engine
overhauls ........................
Improvements to leased flight
equipment ...........................
Flight equipment rotable parts
and assemblies ..................
Airframe parts and assemblies ................................
Aircraft engine parts and
assemblies ......................
Other parts and assemblies
Flight equipment ....................
Allowance for depreciation:
Airframes ............................
Aircraft engines ..................

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

1010
1100
1200
1270

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

1290
1300

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

1311
1410
1420

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

1510

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

1510.1

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

1510.2

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

1510.3

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

1530
1550
1600–1700

Operating
......................

Nonoperating

1601
1601.1

1701
1701.1

1601.2
1602
1602.1

1701.2
1702
1702.1

1602.2

1702.2

1607

1707

1608

1708

1 1608.1

1 1708.1

1 1608.5

1 1708.5

1 1608.9

1 1708.9

1609

1709

1611
1612

1711
1712

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Section 4

14 CFR Ch. II (1–1–05 Edition)
[See footnotes at end of table]

[See footnotes at end of table]
General classification

General classification
Name of account

Name of account
Improvements to leased
flight equipment ..............
Flight equipment rotable
parts and assemblies .....
Flight equipment airworthiness allowance ...................
Equipment ..............................
Furniture, fixtures and office
equipment ...........................
Improvements to leased buildings and equipment ............

1617

1717

1618

1718

2 1629

2 1729

1630

1730

1636

1736

1639

1739

General classification
Buildings ................................
Maintenance buildings and
improvements .................
Other buildings and improvements .....................
Ground property and equipment ...................................
Allowance for depreciation:
Equipment ..........................
Improvements to leased
buildings and equipment
Furniture, fixtures, and office equipment ................
Buildings .............................
Maintenance buildings
and improvements ......
Other buildings and improvements .................
Allowance for depreciation of
flight equipment and ground
property and equipment,
and amortization of overhaul and airworthiness
costs ...................................
Land .......................................
Equipment purchase deposits
and advance payments ......
Construction work in progress
Leased property under capital
leases .................................
Capital leases—flight equipment ................................
Capital leases—other property and equipment .........
Leased property under capital
leases, accumulated amortization ................................
Accumulated amortization—
capitalized flight equipment ................................
Accumulated amortization—
capitalized other property
and equipment ................
Property on operating-type
lease to others and property held for lease ..............
Property on operating-type
lease to others and property held for lease, accumulated depreciation ...............
Other assets:
Long-term prepayments .....
Unamortized developmental
and preoperating costs ...
Other assets and deferred
charges ...........................

1640

1740

1640.1

1740.1

1640.9

1740.9

1649

1749

1650

1750

1654

1754

1656
1660

1756
1760

1660.1

1760.1

1660.9

1760.9

1668
1679

1768
1779

1685
1689

1785
1789

Current liabilities:
Current maturities of longterm debt ........................
Notes payable:
Banks ..............................
Other ...............................
Trade accounts payable .....
Accounts payable—other ...
Current obligations under
capital leases ..................
Accrued salaries, wages ....
Accrued vacation liability ....
Accrued interest .................
Accrued taxes ....................
Dividends declared .............
Air traffic liability .................
Other current liabilities .......
Noncurrent liabilities:
Long-term debt ...................
Advances from associated
companies ......................
Pension liability ..................
Noncurrent obligations
under capital leases .......
Other noncurrent liabilities
Deferred credits:
Deferred income taxes .......
Deferred investment tax
credits .............................
Other deferred credits ........
Stockholders’ equity:
Preferred stock ...................
Common stock ...................
Additional capital invested
Premium on capital stock ...
Discount on capital stock ...
Other capital stock transactions ............................
Retained earnings ..............
Subscribed and unissued
stock ...............................
Treasury stock ....................

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

2000

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

2005
2015
2021
2025

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

2080
2110
2120
2125
2130
2140
2160
2190

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

2210

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

2240
2250

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

2280
2290

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

2340

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

2345
2390

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

2820
2840
2890
2890.1
2890.2

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

2890.3
2900

2860
......................

2990

1 Prescribed

1695

1795

1695.1

1795.1

1695.2

1795.2

1696

1796

1696.1

1796.1

1696.2

1796.2

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

1797

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

1798

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

1820

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

1830

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

1890

for group II and group III air carriers only.
the option of the air carrier, these accounts may be assigned Nos. 2629 and 2729, respectively, for accounting purposes.
Note: Digits to right of decimals and italicized codes established for BTS control purposes only.
2 At

[ER–1401, 50 FR 239, Jan. 3, 1985, as amended
by Amdt. 248–58, 54 FR 5592, Feb. 6, 1989; 60
FR 66723, Dec. 26, 1995]

Section 4 General
(a) The balance sheet accounts are
designed to show the financial condition of the air carrier as at a given
date, reflecting the asset and liability
balances carried forward subsequent to
the closing or constructive closing of
the air carrier’s books of account.
(b) The balance sheet accounts prescribed in this system of accounts for
each air carrier group are set forth in
Section 3, Chart of Balance Sheet Accounts. The balance sheet elements to

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Office of the Secretary, DOT

Section 6

be included in each account are presented in section 6.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by Amdt. 241–58, 54 FR 5592, Feb. 6, 1989]

Section 5

[Reserved]

Section 6 Objective Classification of
Balance Sheet Elements
SOURCE: ER–980, 42 FR 29, Jan. 3, 1977, unless otherwise noted.

CURRENT ASSETS

(b) Balances of notes payable to associated companies shall not be offset
against amounts carried in this account. Balances with associated companies which are not normally settled
currently shall not be included in this
account but in balance sheet account
1510.3 Advances to Associated Companies.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1401, 50 FR 241, Jan. 3, 1985]

1270

1010 Cash.
(a) Record here all general and working funds available on demand as of the
date of the balance sheet which are not
formally restricted or earmarked for
specific objectives. Funds deposited for
special purposes which are to be satisfied within one year shall be included
in account 1100 Short-term Investments and funds restricted as to general availability, which are not offset
by current liabilities, shall be included
in account 1550 Special Funds.
(b) Each air carrier shall subdivide
this account in such manner that the
balance can be readily segregated as
between balances in United States currency and the balances in each foreign
currency.
1100 Short-term Investments.
(a) Record here the cost of shortterm investments such as special deposits and United States Government
securities, any other temporary cash
investments, and the allowance for unrealized gain or loss on current marketable equity securities.
(b) Special deposits for more than
one year, not offset by current liabilities, shall not be included in this account but in account 1550 Special
Funds.
(c) This account should be charged or
credited for discount or premium on
United States Government securities
or other securities which should be amortized to profit and loss account 80 Interest Income.
1200 Notes Receivable.
(a) Record here current notes receivable including those from associated
companies, company personnel, and all
other sources.

Accounts Receivable.

(a) Record here current accounts receivable including those due from the
United States Government, foreign
governments, associated companies,
company personnel, and other amounts
due for the performance of air transportation.
(b) Amounts due from the United
States Government shall be maintained in such fashion as will clearly
and separately identify service mail
pay receivables, subsidy receivables
and other than mail transportation receivables.
(c) Amounts due for the performance
of air transportation shall include
gross amounts due whether settled
through airline clearing houses or with
individual carriers. Amounts payable
collected as agent shall not be credited
to this account, but should be included
in account 2190 Other Current Liabilities.
(d) Balances payable to associated
companies shall not be offset against
amounts carried in this account. Balances with associated companies which
are not normally settled currently
shall not be included in this account
but in balance sheet account 1510.3 Advances to Associated Companies.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1401, 50 FR 241, Jan. 3, 1985]

1290 Allowance for Uncollectible Accounts.
(a) Record here accruals for estimated losses from uncollectible accounts.
(b) All accounts against which allowances have been established shall be
examined quarterly for the purpose of
redetermining the basis of accruals to
be applied to subsequent accounting

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Section 6

14 CFR Ch. II (1–1–05 Edition)

periods and the reasonableness of allowances already provided.
1300 Spare parts and supplies.
(a) Record here the cost of:
(1) Flight equipment replacement
parts of a type which ordinarily would
be recurrently expended and replaced
rather than repaired and reused;
(2) Unissued fuel inventories for use
in the overall or system operations of
the carrier. Adjustments of inventories
for aircraft fuel due to retroactive
price increases and decreases shall not
be entered in this account but in profit
and loss account 45, Aircraft Fuels and
Oils; and
(3) Unissued and unapplied materials
and supplies held in stock such as
unissued shop materials, expendable
tools, stationery and office supplies,
passenger service supplies, and restaurant and food service supplies.
(b) Costs paid by the air carrier such
as transportation charges and customs
duties; excise, sales, use and other
taxes; special insurance; and other
charges applicable to the cost of spare
parts and supplies shall be charged to
this account when they can be definitely allocated to specific items or
units of property. If such costs cannot
be so allocated, or if of minor significance in relation to the cost of such
property, such amounts may be
charged to balance sheet account 1890
Other Assets and Deferred Charges and
cleared either by a suitable ‘‘loading
charge’’ as the parts are used or by current charges to appropriate expense or
property accounts; so long as the method of application does not cause material distortion in operating expenses
from one accounting period to another.
(c) Reusable spare parts and supplies
recovered in connection with construction, maintenance, or retirement of
property and equipment shall be included in this account at fair and reasonable values but in no case shall such
values exceed original cost. Recoveries
of normally reparable and reusable
parts of a type for which losses in value
may be covered on a practical basis
through valuation allowance provisions
shall be included in this account on an
original cost basis. Scrap and nonusable parts, expensed from this account and recovered, shall be included

at net amounts realizable therefrom
with contra credit to the expense accounts initially charged.
(d) The cost of rotable parts and assemblies of material value included in
this account which ordinarily are repaired and reused and possess a service
life approximating that of the primary
property types to which related shall
not be recorded in this account but in
balance sheet account 1608 Flight
Equipment Rotable Parts and Assemblies. For purposes of identifying
rotable parts and assemblies of insignificant unit value which may be included in this account, a reasonable
maximum unit value limitation may
be established.
(e) Any losses sustained or gains realized upon the abandonment or other
disposition of flight equipment expendable parts shall be taken up as capital
gains or losses in the periods in which
sustained or realized. (See balance
sheet account 1311.)
(f) Items in this account shall be
charged to appropriate expense accounts as issued for use. Profit and loss
on sales of inventory items as a routine
service to others shall be included in
profit and loss accounts 14 General
Service Sales—Associated Companies,
or 16 General Service Sales—Outside,
and the parts sold shall be removed
from this accounts at full cost.
(g) Materials and supplies held in
small supply and purchased currently
may be charged to appropriate expense
accounts when purchased.
(h) An allowance for inventory adjustment applicable to materials and
supplies is prohibited. Items in this account shall be charged to appropriate
expense accounts as issued for use.
(i) Subaccounts shall be established
within this account for the separate recording of each class or type of spare
parts and supplies.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1401, 50 FR 241, Jan. 3, 1985]

1311 Allowance for Obsolescence—
Spare Parts and Supplies.
(a) Accruals shall be made to this account when allowances are established
for losses in the value of expendable
parts. The accruals to this account
shall be made by charges to profit and

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loss account 73 Provisions for Obsolescence and Deterioration—Expendable
Parts. Records shall be maintained
with sufficient detail to permit association of the allowances with each
class or type of expendable parts.
(b) The accruals to this account shall
be based upon a predetermination by
the air carrier of that portion of the
total inventory of each class and type
of expendable parts against which an
allowance for loss is to be accrued. Expendable parts issued for use in operations shall be charged to operating expenses as issued and shall not be
charged to this account. If at the end
of any calendar year the amount of the
allowance exceeds the product of the
applicable inventory for the year determined consistently on a year-end or average basis, and the sum of the standard percentage accrual rates for all
prior years including the current, the
allowance shall be adjusted downward
by the amount of the excess. Such adjustments shall be charged to this account and credited to profit and loss
account 73 Provisions for Obsolescence
and Deterioration—Expendable Parts.
(c) Where changing conditions necessitate a revision or adjustment in rates
of accrual, such revision or adjustment
shall be made applicable to current and
subsequent accounting periods and
shall not be applied retroactively to
prior accounting periods. Following retirement of airframe or aircraft engine
types to which related, any balance remaining in this account shall be offset
against related balances carried in balance sheet account 1300 Spare Parts
and Supplies and the net cleared to
profit and loss accounts 88.5 Capital
Gains and Losses—Operating Property
or 88.6 Capital Gains and Losses—
Other.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1401, 50 FR 241, Jan. 3, 1985]

1410 Prepaid Items.
Record here prepayments of obligations which if not paid in advance
would require the expenditure of working capital within one year, such as
prepaid rent, insurance, taxes, interest,
etc. Unexpired insurance and miscellaneous prepayments applicable to periods extending beyond one year where
significant in amount shall be charged

to balance sheet account 1820 LongTerm Prepayments.
1420

Other Current Assets.

Record here current assets not provided for in balance sheet accounts 1010
to 1410, inclusive.
INVESTMENTS AND SPECIAL FUNDS
1510 Investments in Associated Companies.
(a) Record here net investments in
associated companies.
(b) [Reserved]
(c) This account shall be subdivided
by all air carrier groups as follows:
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1027, 42 FR 60128, Nov. 25, 1977; ER–1188,
45 FR 48870, July 22, 1980]
1510.1 Investments in Investor Controlled
Companies.
Record here the cost of investments in investor controlled companies except that permanent impairment in the value of securities may be reflected through charges to
profit and loss classification 8100, Nonoperating Income or Expense—Net. This account shall also include the equity in undistributed earnings or losses since acquisition.
In the event dividends are declared by such
companies, the air carrier shall credit this
account for its share in dividends declared
and debit balance sheet account 1270 Accounts Receivable. This account shall separately state: (a) The cost of such investments at date of acquisition and (b) the equity in undistributed earnings or losses since
acquisition.
[Amdt. 241–58, 54 FR 5592, Feb. 6, 1989]
1510.2

Investments in Other Associated
Companies.

Record here the cost of investments in associated companies other than investor controlled companies. Cost shall represent the
amount paid at the date of acquisition without regard to subsequent changes in the net
assets through earnings or losses of such associated companies. However, permanent impairment in the value of securities may be
reflected through charges to profit and loss
classification 8100, Nonoperating Income or
Expense—Net.
[Amdt. 241–58, 54 FR 5592, Feb. 6, 1989]
1510.3

Advances to Associated Companies.

(a) Record here advances, loans, and other
amounts not settled currently with investor
controlled and other associated companies

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and nontransport divisions. Balances receivable from and payable to different associated
companies and different nontransport divisions shall not be offset.
(b) In the case of nontransport divisions
three subaccounts shall be maintained:
(1) Net investment;
(2) current net profit or loss; and
(3) current accounts receivable or payable
between the air carrier and the nontransport
division.
(c) Each nontransport division shall be accounted for separately in net amounts receivable which shall be included in this account or net amounts payable which shall be
included in balance sheet account 2240 Advances from Associated Companies.
[ER–980, 42 FR 29, Jan. 3, 1977. Redesignated
by ER–1401, 50 FR 241, Jan. 3, 1985]

1530 Other Investments and Receivables.
Record here notes and accounts receivable not due within one year, investments in securities issued by others, investments in leveraged leases,
the noncurrent net investment in direct financing and sales-type leases,
and the allowance for unrealized gain
or loss on noncurrent marketable equity securities. Securities held as temporary cash investments shall not be
included in this account but in balance
sheet account 1100 Short-Term Investments. Investments in and receivables
from associated companies which are
not settled currently shall be included
in balance sheet account 1510 Investments in Associated Companies.
[Amdt. 241–58, 54 FR 5592, Feb. 6, 1989]

1550 Special Funds.
Record here special funds not of a
current nature and restricted as to
general availability. Include items
such as sinking funds, cash and securities posted with courts of law, employee’s funds for purchase of capital stock,
pension funds under the control of the
air carrier and equipment purchase
funds.
OPERATING PROPERTY AND EQUIPMENT
‘‘Operating Property and Equipment’’ shall
encompass items used in air transportation
services and services related thereto.

1601 Airframes.
(a) Record here the total cost to the
air carrier of airframes of all types and

classes together with the full complement of instruments, appurtenances
and fixtures comprising complete airframes including accessories necessary
to the installation of engines and flight
control and transmission systems, except as specifically provided otherwise
in accounts 1602 and 1607. Also record
here in separate subaccounts the costs
of airframes overhauls accounted for
on a deferral and amortization basis.
(b) Airframes designed to permit
multiple payload configurations shall
be recorded in this account at the total
cost of the maximum complement of
instruments, appurtenances, and fixtures used in the air carrier’s operations.
(c) This account shall be subdivided
as follows by all air carriers:
1601.1
1601.2

Airframes.

Unamortized Airframe Overhauls.

[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1602

Aircraft Engines.

(a) Record here the total cost to the
air carrier of complete units of aircraft
engines of all types and classes together with a full complement of accessories, appurtenances, parts and fixtures comprising fully assembled engines as delivered by the engine manufacturer ready for operation in test but
without the accessories necessary to
its installation in airframes. Also
record here in separate subaccounts
the costs of aircraft engine overhauls
accounted for on a deferral and amortization basis.
(b) This account shall be subdivided
as follows by all air carriers:
1602.1
1602.2

Aircraft Engines.

Unamortized Aircraft Engine Overhauls.

[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1607 Improvements to Leased Flight
Equipment.
Record here the total cost incurred
by the air carrier for modification, conversion or other improvements to
leased flight equipment. Also record
here, in separate subaccounts, the
costs of airframe and aircraft engine

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overhauls of leased aircraft accounted
for on a deferral and amortization
basis.
[Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1608 Flight Equipment Rotable Parts
and Assemblies.
(a) Record here the total cost to the
air carrier of all spare instruments,
parts, appurtenances and subassemblies related to the primary components of flight equipment units provided for in balance sheet accounts 1601
through 1607, inclusive. This account
shall include all parts and assemblies
of material value which are rotable in
nature, are generally reserviced or repaired, are used repeatedly and possess
a service life approximating that of the
property type to which they relate.
Items of an expendable nature which
generally may not be repaired and reused, shall not be recorded in this account but in account 1300 Spare Parts
and Supplies. Except for recurrent
service sales, flight equipment parts
recorded in this account shall not be
charged to operating expenses as retired. Profit or loss on sales of parts as
a routine service to others shall be included in profit and loss account 14
General Service Sales, and parts sold
shall be removed from this account at
full cost irrespective of any allowance
for depreciation which has been provided.
(b) This account shall be subdivided
as follows by Group II and Group III air
carriers:
1608.1
1608.5

Airframe Parts and Assemblies.

Aircraft Engine Parts and Assemblies.

1608.9

Other Parts and Assemblies.

[ER–980, 42 FR 29, Jan. 3. 1977, as amended by
Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1609

Flight Equipment.

This classification is established only
for purposes of control by the BTS and
shall reflect the total cost of property
and equipment of all types and classes
used in the in-flight operations of aircraft.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended at
60 FR 66723, Dec. 26, 1995]

1629 Flight Equipment Airworthiness
Allowances.
(a) Record here accumulated provisions for overhauls of flight equipment.
(b) Separate subaccounts shall be established for recording accumulated
provisions related to each type of airframe and aircraft engine, respectively.
NOTE: At the option of the air carrier, the
number ‘‘2629’’ may be assigned to this account for accounting purposes. However, for
purposes of reporting on BTS Form 41, the
balance in this account shall be reported
under account ‘‘1629.’’
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5593, Feb. 6, 1989; 60 FR
66723, Dec. 26, 1995]

1630

Equipment.

Record here the total cost to the air
carrier of ground equipment to include
the following:
(a) Equipment assigned to aircraft or
active line operations as opposed to
items held in stock for servicing passengers such as broilers, bottleware,
dishes, food boxes, thermos jugs, blankets, first aid kits, etc. Spare items
shall be carried in balance sheet account 1300 Spare Parts and Supplies
and shall be charged directly to expense upon withdrawal from stock for
replacing original complements.
(b) Equipment used in restaurants
and kitchens.
(c) Equipment of all types and classes
used in enplaning and handling traffic
and in handling aircraft while on
ramps, including motorized vehicles
used in ramp service. Classes of equipment used interchangeably between
handling aircraft on ramps and in
maintaining aircraft may be classified
in accordance with normal predominant use.
(d) Nonairborne equipment of all
types and classes used in meteorological and communication services which
is not a part of buildings.
(e) Equipment of all types and classes
including motorized vehicles used in
engineering and drafting services and
in maintaining, overhauling, repairing
and testing other classes of property
and equipment.
(f) Property and equipment of all
types and classes used in ground and
marine transportation services.

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(g) Property and equipment of all
types and classes used in storing and
distributing fuel, oil and water, such as
fueling trucks, tanks, pipelines, etc.
(h) All other ground equipment of all
types and classes such as medical, photographic, employees’ training equipment, and airport and airway lighting
equipment.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1636 Furniture, Fixtures, and Office
Equipment.
Record here the total cost to the air
carrier of furniture, fixtures and office
equipment of all types and classes
wherever used or located.
[Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1639 Improvements to Leased Buildings and Equipment.
Record here the total cost to the air
carrier incurred in connection with
modification, conversion, or other improvements to leased buildings and
equipment.
1640

Buildings.

Other Buildings and Improvements.

1640.1

Maintenance Buildings and
Improvements.

[Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

1649

1679 Land.
Record here the initial cost and the
cost of improving land.
[Amdt. 241–58, 54 FR 5593, Feb. 6, 1989]

Record here the total cost to the air
carrier of owned buildings, structures
and equipment and related improvements. Each air carrier shall maintain
the following subaccounts in which the
values fairly assignable to maintenance and other operations shall be
separately recorded:
1640.9

1668 Allowance for Depreciation of
Flight Equipment and Ground
Property and Equipment and Amortization of Overhaul and Airworthiness Costs.
(a) Record in accounts 1611 and 1618,
inclusive, and 1650 through 1660, inclusive, accruals for depreciation of flight
equipment and ground property and
equipment.
(b) As set forth in section 3, Chart of
Balance Sheet Accounts, separate accounts shall be established for depreciation allowances to parallel balance
sheet accounts 1601 through 1608 established for recording the cost of flight
equipment and accounts 1630 through
1640 established for recording the cost
of ground property and equipment.
(c) This account shall be used as a
control account and shall reflect the
total amounts recorded in balance
sheet accounts 1611 through 1618 and
1650 through 1660 in addition to account
1629 Flight Equipment Airworthiness
Allowance.

Ground Property and Equipment.

This classification is established only
for purposes of control by the BTS and
shall reflect the total cost of property
and equipment of all types and classes
other than flight equipment, equipment purchase deposits and advance
payments, land, and work in progress.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended at
60 FR 66723, Dec. 26, 1995]

1685 Equipment Purchase Deposits
and Advance Payments.
Record here the amount of purchase
deposits and advance payments made
to acquire operating property and
equipment under outstanding purchase
commitments. Funds set aside but not
deposited or used as advance payments
should not be included in this account
but in Account 1550 Special Funds.
1689 Construction Work in Progress.
(a) Record here all direct and indirect
costs of the air carrier that are expended for constructing and readying
property and equipment of all types
and classes for installation in operations. The amount reported shall reflect all such expenses that are accumulated to the balance sheet date.
Where properly includable in the property and equipment classification,
record here also the accumulated costs
for uncompleted overhauls of airframes, aircraft engines, or other material units of property.

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(b) At the option of the air carrier
this account may be used as a clearing
account for recording the cost of property and equipment acquisitions prior
to a distribution thereof to the appropriate property accounts, whether or
not conditioning or modification is
necessary before placing in service.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

1695 Leased Property Under Capital
Leases.
(a) Record here the total costs to the
air carrier for all property obtained
under capital leases.
(b) This account shall be subdivided
by all air carrier groups as follows:
1695.1
1696.2

Capital Leases—Flight Equipment.
Capital Leases—Other Property and
Equipment.

Sheet Accounts, parallel balance sheet
accounts 1601 through 1689, for recording the cost of operating property and
equipment. In addition to these accounts, Account 1797 has been established for recording the cost of property on operating-type leases to others
and property held for lease; any accumulated depreciation applicable to the
assets contained in Account 1797 shall
be recorded in Account 1798.
[ER–1013, 42 FR 37515, July 21, 1977]

1797 Property
on
Operating-type
Lease to Others and Property Held
for Lease.
Record here the total cost to the air
carrier of property on operating-type
lease to others and property held for
lease.
[Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

[ER–1401, 50 FR 241, Jan. 3, 1985, as amended
by Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

1696 Leased Property Under Capital
Leases—Accumulated Amortization.
(a) Record here accruals for amortization of leased property obtained
under capital leases.
(b) This account shall be subdivided
by all air carrier groups as follows:
1696.1

Accumulated Amortization—Capitalized
Flight Equipment.

1696.2

Accumulated Amortization—Capitalized
Other Property and Equipment.

[ER–1401, 50 FR 241, Jan. 3, 1985, as amended
by Amdt. 241–58, 54 FR 5594,]

NON-OPERATING PROPERTY AND
EQUIPMENT
‘‘Nonoperating Property and Equipment’’
includes investments in property and equipment not separately accounted for within a
nontransport division but assigned to other
than air transportation and transport-related services, and property and equipment
held for future use.

1700 Non-operating
Property
and
Equipment.
The total cost to the air carrier of
nonoperating property and equipment
and related allowances for depreciation
shall be recorded in balance sheet accounts 1701 through 1796 which, as set
forth in section 3, Chart of Balance

1798 Property
on
Operating-type
Lease to Others and Property Held
for Lease—Accumulated Depreciation.
Record here accruals for depreciation
of property on operating-type leases to
others and property held for lease.
[Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

OTHER ASSETS
1820 Long-Term Prepayments.
Record here prepayments of obligations applicable to periods extending
beyond one year such as payments on
leased property and equipment and
other payments and advances for rents,
rights, or other privileges.
1830 Unamortized Developmental and
Preoperating Costs.
(a) Record here costs accumulated
and deferred by the air carrier pertaining to the development of new
routes or extension of existing routes,
preparation for operation of new routes
subsequent to certification by the
DOT, the integration of new types of
aircraft or services, and other preparations for substantial alterations in
operational characteristics.
(b) Costs chargeable to this account
shall include items directly related to
each specific developmental or preoperating project, such as travel and
incidental expenses, legal expenses,

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flight crew training expenses, and regulatory proceedings expenses. Expenses
which would be otherwise incurred in
the normal air transport operations
conducted by the air carrier during the
current accounting period shall not be
allocated
to
developmental
or
preoperating projects and charged to
this account. Nor shall this account be
credited for revenues from aircraft
flights
of
a
developmental
or
preoperating character the operating
costs of which are charged to this account. Any such revenues shall be included in the profit and loss account
for the respective type of revenue. This
account shall include charges for only
those costs associated with projects directed at obtaining new operating authority or expanding the physical capacity of the air carrier and shall not
include costs incurred for the purpose
of generating revenues through rate
adjustment. Accordingly, costs associated with regulatory proceedings involving route awards or amendments,
whether successful or unsuccessful to
the carrier, shall be included in this account whereas costs associated with
regulatory proceedings involving rate
or other revenue generation matters
shall be charged to appropriate expense
accounts.
(c) Records shall be established for
new routes or extensions of existing
routes to record separately: (1) Costs
incurred in acquiring or applying for
the routes, including all costs incurred
prior to certification by the DOT and
inauguration of service by the air carrier, and (2) costs incurred after revenue operations begin over the new
routes or extensions.
(d) Subclassifications shall be established to record for each developmental
project the period covered and the purpose of each item of expense. Each air
carrier shall classify the costs of all
projects included in this account between: (1) Those related and contributing to the normal air transportation
services currently conducted by the air
carrier; (2) those related to services
conducted by the air carrier which are
extraneous to or are not otherwise related to the air transportation services
currently conducted; and (3) those held
in suspense pending status determination in terms of possible contribution

to the air transportation services and
inauguration of the service or operation to which related.
(e) Amounts included in this account
which contribute to or protect the position of the normal air transportation
services currently conducted by the
carrier shall be amortized to profit and
loss account 74 Amortization, unless
otherwise approved or directed by the
DOT. Other amounts included in this
account shall be amortized or charged
to profit and loss account 89.9 Other
Miscellaneous Nonoperating Debits.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended at
60 FR 66723, Dec. 26, 1995]

1890 Other
Assets
and
Deferred
Charges.
(a) Record here other assets and deferred charges not provided for elsewhere.
(b) Record here debits, the proper
final disposition of which cannot be determined until additional information
has been received. This account shall
include the accumulated cost of labor,
materials and outside services used in
the process of manufacturing flight
equipment expendable parts and materials and supplies for stock, the accumulated cost of jobs in process for others, projects to be charged to expense
upon completion. This account shall
also include unamortized debt expense,
property acquisition adjustments and
intangible assets.
(c) This account shall be charged
with property loss and other costs related to casualties and credited with
recoveries from purchased insurance
and salvage. A debit or credit balance
in this account related to property retired as a result of a casualty shall be
recorded in profit and loss account 88.5
Capital Gains and Losses—Operating
Property or 88.6 Capital Gains and
Losses—Other; however, any balances
related to property not retired or to
other casualties shall be recorded in
profit and loss account 58 Injuries, Loss
and Damage. Proceeds from purchased
insurance for property damage, received prior to repair of such damage,
shall not be credited to this account
but to balance sheet account 2390 Other
Deferred Credits pending repair. The
records for each major casualty shall
be kept in such manner as to clearly

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disclose insurance recoveries and the
total costs, which shall include charges
for the depreciated cost of property
damaged or destroyed, costs for clearing wrecks and damaged property and
equipment, including salaries and
wages for the repair thereof, and payments for damages to property of others. The cost of casualties shall not be
charged directly against retained earnings or appropriations thereof, but
shall be cleared through the applicable
profit and loss accounts in accordance
with the foregoing.
(d) Record here the unamortized debt
expense related to the assumption by
the air carrier of debt of all types and
classes. Amounts recorded shall be amortized to profit and loss account 84
Amortization of Debt Discount, Premium and Expense.
(e) Unamortized debt expense shall
not include the excess of the par value
of debt securities over the cash value of
consideration received. Instead, discounts shall be recorded in a subaccount of the related liability.
(f) Record here the cost of patents,
copyrights and other intangible properties, rights and privileges acquired as
a part of a business from other air carriers and other intangibles not provided for elsewhere. This account shall
be subdivided to reflect the nature of
each intangible asset included in this
account.
(g) Record here the difference between the purchase price to the air carrier of property and equipment acquired as a part of a business from another air carrier through consolidation, merger, or reorganization, pursuant to a plan approved by the DOT, and
the depreciated cost to the predecessor
company at date of acquisition. Record
here also such differences relating to
purchases of property and equipment
from associated companies unless other
treatment is approved by the BTS. Separate subaccounts shall be established
to record the amounts applicable to
each such acquisition.
(h) Balances in this account relating
to property acquisition adjustments
shall be amortized by charges to profit
and loss account 89.9 Other Miscellaneous Nonoperating Debits unless oth-

erwise directed or approved by the
BTS.
[ER–1401, 50 FR 242, Jan. 3, 1985, as amended
at 60 FR 66723, Dec. 26, 1995]

CURRENT LIABILITIES
2000 Current Maturities of Long-term
Debt.
Record here the face value or principal amount of debt securities issued
or assumed by the air carrier which is
payable within 12 months of the balance sheet date unless such debt is to
refinance, or where payment is to be
made from assets of a type not properly classifiable as current.
2005 Notes Payable—Banks.
Record here the face value of all
notes, drafts, acceptances, or other
similar evidences of indebtedness payable on demand or within one year to a
bank or another financial institution
with the exception of current maturities of long-term debt which should
be included in account 2000.
2015 Notes Payable—Other.
Record here the face value of all
notes, drafts, acceptances, or other
similar evidences of indebtedness payable on demand or within one year to
an associated company or party other
than a financial institution.
2021 Trade Accounts Payable.
Record here all accounts payable
within one year which accrued from
generally recognized trade practices.
2025 Accounts Payable—Other.
Record here all accounts payable
within one year which are not provided
for in accounts 2000 to 2021, inclusive.
2080 Current Obligations Under Capital Leases.
Record here the total current liability applicable to property obtained
under capital leases.
[ER–1013, 42 FR 37515, July 21, 1977; 42 FR
38555, July 29, 1977; Amdt. 241–58, 54 FR 5594,
Feb. 6, 1989]

2110 Accrued Salaries, Wages.
Record here amounts accrued for unpaid compensation to personnel, which

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[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1027, 42 FR 60128, Nov. 25, 1977; ER–1188,
45 FR 48870, July 22, 1980; Amdt. 241–58, 54 FR
5594, Feb. 6, 1989]

2160 Air Traffic Liability.
(a) Record here balances representing
the value of unused transportation
sold. Transportation sold includes both
sales for transportation to be provided
by the air carrier and transportation to
be provided by another air carrier.
(b) Earned revenue, determined by
the yield or average fare method or by
the sales-lift-match method, shall be
consistently and periodically cleared
by debit to this account, and by credit
to the appropriate profit and loss revenue account. Amounts receivable for
transportation to be provided by the
air carrier shall be debited to balance
sheet account 1270 Accounts Receivable.
(c) Carriers who determine earned
revenue on a yield or average fare
method may not accrue income during
the accounting year in anticipation of
a favorable annual physical inventory
determination, nor for unused or
unpresented tickets.
(d) Subaccounts to this account shall
be established to record balances pertaining to passenger and cargo transportation sold, respectively, and separately to sales in scheduled and nonscheduled services.

2125

[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1401, 50 FR 242, Jan. 3, 1985]

have been charged to profit and loss or
capitalized, as compensation for the
period in which accrued.
2120

Accrued Vacation Liability.

(a) Record here accruals of liabilities
for personnel vacations. All vacation
policies, plans, or agreements whether
oral or written shall be accounted for
on an accrual basis whenever a lag exists between vacations earned and vacations taken, thereby resulting in a liability against the carrier under the
applicable policy, plan or agreement.
(b) This account shall be credited and
the applicable personnel compensation
expense account concurrently charged
with the cost of any lag between vacations accrued and vacations taken. Accruals may be based upon standard
rates of lag, if such standard rates are
verified by physical inventory and adjusted accordingly at least once each
calendar year. Adjustments of balances
in this account shall be cleared to applicable compensation expense accounts.

Accrued Interest.

Record here interest payable within
one year for all outstanding obligations.
2130

Accrued Taxes.

(a) Record here accruals for currently
payable income and other forms of
taxes which constitute a charge borne
by the air carrier as opposed to those
collected as an agent for others.
(b) Each air carrier shall disclose in
the footnotes of its BTS Form 41 for
each calendar quarter whether utilized
credits are accounted for by the flowthrough method or the deferred method. The method selected shall be consistently followed by the carrier.
[Amdt. 241–58, 54 FR 5594, Feb. 6, 1989, as
amended at 60 FR 66723, Dec. 26, 1995]

2140 Dividends Declared.
Record here in separate subdivisions
for each class and series of capital
stock, all dividends declared but unpaid on capital stock.

2190 Other Current Liabilities.
Record here current and accrued liabilities, including amounts payable
collected as an agent, not provided for
in accounts 2110 to 2160, inclusive.
NON-CURRENT LIABILITIES
2210 Long-Term Debt.
(a) Record here the face value of principal amount of debt securities issued
or assumed by the air carrier and held
by other than associated companies,
which has not been retired or cancelled
and is not payable within 12 months of
the balance sheet date.
(b) In cases where debt coming due
within 12 months is to be refunded, or
where payment is to be made from assets of a type not properly classifiable
as current, the amount payable shall
not be removed from this account. In
addition, this account shall include
short-term debt obligations when both
the intent to refinance the short-term

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Section 6

obligations on a long-term basis is established and the ability to consummate this refinancing can be demonstrated.

come by a reduction of the deferred tax
provision.

[Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

2345

2240 Advances from Associated Companies.
Record here net amounts due associated companies and nontransport divisions for notes, loans and advances
which are not settled currently. Balances payable to and receivable from
different associated companies shall
not be offset.
2250

Pension Liability.

Record here the liability of the air
carrier under employee pension plans,
to which either or both employees and
the air carrier contribute, if the plan is
administered by the air carrier.
2280 Noncurrent Obligations
Capital Leases.

under

Record here the total noncurrent liability applicable to property obtained
under capital leases.
[ER–1013, 42 FR 37515, July 21, 1977, as amended by Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

2290

Other Noncurrent Liabilities.

Record here noncurrent liabilities
not provided for in balance sheet accounts 2210 to 2280, inclusive, such as
the liability for installments received
on capital stock from company personnel who are not bound by legally
enforceable subscription contracts, accruals for personnel dismissal liability,
and accruals of other demonstrable
miscellaneous noncurrent liabilities.
[ER–1401, 50 FR 242, Jan. 3, 1985]

DEFERRED CREDITS
2340

[Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

Record here investment tax credits
utilized as reduction of tax liabilities,
when the carrier exercises the option
to defer such credits for amortization
over the service life of the related
equipment.
[Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

2390

Record here credits and debits representing the net tax effect of material
timing differences originating and reversing in the current accounting period, giving appropriate recognition to
the portion of investment tax credits
which would have been allowed if taxes
were based on pretax accounting in-

Other Deferred Credits.

Record here credits, not provided for
elsewhere, the proper final disposition
of which cannot be effected until additional information has been received.
STOCKHOLDERS’ EQUITY
2820

Preferred Stock.

Record here in separate subdivisions
for each class and series, the par or
stated value of preferred capital stock
issued or in the case of no-par stock
without stated value, the full consideration received.
2840

Common Stock.

Record here in separate subdivisions
for each class and series, the par or
stated value of common stock issued or
in case of no-par stock without stated
value, the full consideration received.
2860

Subscribed and Unissued Stock.

Record here in separate subdivisions
for each class and series, the par or
stated value, or the subscription price
in the case of stock without par or
stated value, of legally enforceable
subscriptions to the capital stock of
the air carrier.
2890

Deferred Income Taxes.

Deferred Investment Tax Credits.

Additional Capital Invested.

(a) Record herein separate subdivisions for each class and series, the difference between the price at which capital stock is sold and the par or stated
value of the stock; gains or losses arising from the reacquisition and the resale or retirement of each class and series of capital stock; donations; the excess of retained earnings capitalized
over par or stated value of capital

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Section 7

14 CFR Ch. II (1–1–05 Edition)

stock issued; adjustments in capital resulting from reorganization or recapitalization; and proceeds attributable to
detachable stock purchase warrants related to debt issues. This account shall
also include balances of contributions
to the business enterprise of individual
proprietors or partners.
(b) Each air carrier shall maintain
the following subaccounts:
2890.1 Premium on capital stock. Record here
in separate subdivisions for each class and
series of capital stock issued the excess of
the cash value of consideration received over
the par or stated value and accrued dividends
of stock issued together with assessments
against stockholders representing payments
required in excess of par or stated value.
2890.2 Discount on capital stock. Record here
in separate subdivisions for each class and
series of capital stock issued, the excess of
the par or stated value over the cash value of
consideration received, less accrued dividends. Discounts applicable to a particular
class and series of capital stock may be offset against premiums from the same class
and series of capital stock. Discounts and
premiums on different classes and series of
capital stock shall not be offset. The air carrier may, at its option, record in this subaccount commissions and expenses incurred
in the issuance of capital stock and may
charge balance sheet account 2900 Retained
Earnings to the extent capital stock expense
may exceed any existing balance of paid-in
capital over the par or stated value of capital stock.
2890.3 Other Capital Stock Transactions.
Record here in separate subdivisions for each
class and series, the balance of credits arising from the reacquisition and resale or cancellation of capital stock, credits arising
from a reduction in the par or stated value of
capital stock or the net balance of credits or
debits resulting from other paid-in capital
transactions such as proceeds attributable to
detachable stock purchase warrants related
to debt issues, not provided for elsewhere,
which is identified with a particular class
and series of capital stock.

2900 Retained Earnings.
(a) Record here the net income or
loss from operations of the air carrier

and dividends declared on capital
stock.
(b) This account shall not be charged
with dividends on treasury stock. If a
dividend is not payable in cash, the
values entered in this account shall be
completely described.
(c) Delayed credits or charges to income shall not be entered in this account directly but in appropriate profit
and loss accounts.
(d) Net income or loss accounted for
during the current fiscal year shall not
be entered in this account until the
close of the fiscal year. Individual proprietorships or partnerships may clear
net income or loss accounted for during
the year directly to balance sheet account 2890 Additional Capital Invested,
or optionally, to this account for subsequent transfer to balance sheet account 2890 Additional Capital Invested.
(e) A separate subaccount to this account shall be maintained to record
changes in the valuation of marketable
equity securities included in noncurrent assets. Such changes shall be reflected in this subaccount to the extent
the balance in this subaccount represents a net unrealized loss as of the
current balance sheet date.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
ER–1401, 50 FR 242, Jan. 3, 1985]

2990

Treasury Stock.

(a) Record here the cost of capital
stock issued by the air carrier reacquired by it and not retired or canceled.
(b) Separate records shall be established for each class and series of capital stock held in this account.
[ER–980, 42 FR 29, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5594, Feb. 6, 1989]

PROFIT AND LOSS CLASSIFICATION
Section 7 Chart of Profit and Loss Accounts
Functional or financial activity to which applicable (00)

Objective classification of profit and loss elements

Group I carriers

Group II carriers

31, 32 ...........
31, 32 ...........

31, 32 ...............
31, 32 ...............

Group III carriers

OPERATING REVENUES AND EXPENSES

Transport revenues:
01

Passenger:
01.1 Passenger—first class ....................................................
01.2 Passenger—coach ..........................................................

31, 32.
31, 32.

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Section 7
Functional or financial activity to which applicable (00)

Objective classification of profit and loss elements

05

06

07

19

08

Mail:
05.1 Priority .............................................................................
05.2 Nonpriority .......................................................................
05.3 Foreign ............................................................................
Property:
06.1 Freight .............................................................................
06.2 Excess passenger baggage ............................................
Charter:
07.1 Passenger .......................................................................
07.2 Property ...........................................................................
Air transport—other:
19.1 Reservation cancellation fees .........................................
19.2 Miscellaneous operating revenues .................................
Public service revenues (subsidy) ............................................

Group I carriers

Group II carriers

31, 32 ...........
31, 32 ...........
31, 32 ...........

31, 32 ...............
31, 32 ...............
31, 32 ...............

31, 32.
31, 32.
31, 32.

31, 32 ...........
31, 32 ...........

31, 32 ...............
31, 32 ...............

31, 32.
31, 32.

32 ..................
32 ..................

32 .....................
32 .....................

32.
32.

31, 32 ...........
31, 32 ...........
48 ..................

31, 32 ...............
31, 32 ...............
48 .....................

31, 32.
31, 32.
48.

48
48
48
71
71
71
71
71
71

48
48
48
71
71
71
71
71
71

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

48.
48.
48.
71.
71.
71.
71.
71.
71.

48 ..................
71 ..................
71 ..................

48 .....................
71 .....................
71 .....................

48.
71.
71.

48 ..................
71 ..................
71 ..................

48 .....................
71 .....................
71 .....................

48.
71.
71.

48 ..................
71 ..................
71 ..................

48 .....................
71 .....................
71 .....................

48.
71.
71.

48
48
71
71
71
71

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

48
48
71
71
71
71

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

48.
48.
71.
71.
71.
71.

48
48
71
71
71
71

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

48
48
71
71
71
71

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

48.
48.
71.
71.
71.
71.

48 ..................
71 ..................

48 .....................
71 .....................

48.
71.

48 ..................
71 ..................
71 ..................

48 .....................
71 .....................
71 .....................

48.
71.
71.

48 ..................
71 ..................
71 ..................

48 .....................
71 .....................
71 .....................

48.
71.
71.

31, 32 ...........
31, 32, 41 .....

31, 32 ...............
31, 32, 41 .........

31, 32.
31, 32, 41.

53, 55, 64, 67,
68.
51 .....................

53, 55, 61, 62, 63, 65,
66, 68.
51.

Group III carriers

Transport-related revenues and expenses:
09

10

11

12

13

14

16

17

18

19

In-flight sales:
09.1 Liquor and food—gross revenues ...................................
09.2 Movies and stereo—gross revenues ..............................
09.3 Other—gross revenues ...................................................
09.4 Liquor and food—depreciation expense .........................
09.5 Liquor and food—other expense ....................................
09.6 Movies and stereo—depreciation expense .....................
09.7 Movies and stereo—other expense ................................
09.8 Other—depreciation expense .........................................
09.9 Other—expense ..............................................................
Restaurant and food service (ground):
10.1 Gross revenues ...............................................................
10.2 Depreciation expense .....................................................
10.3 Other expenses ...............................................................
Rents:
11.1 Gross revenues ...............................................................
11.2 Depreciation expense .....................................................
11.3 Other expenses ...............................................................
Limousine service:
12.1 Gross revenues ...............................................................
12.2 Depreciation expense .....................................................
12.3 Other expenses ...............................................................
Interchange sales:
13.1 Associated companies—gross revenues ........................
13.2 Outside—gross revenues ................................................
13.3 Associated companies—depreciation expense ..............
13.4 Associated companies—other expense ..........................
13.5 Outside—depreciation expense ......................................
13.6 Outside—other expense .................................................
General service sales:
14.1 Associated companies—gross revenues ........................
14.2 Outside—gross revenues ................................................
14.3 Associated companies—depreciation expense ..............
14.4 Associated companies—other expense ..........................
14.5 Outside—depreciation expense ......................................
14.6 Outside—other expense .................................................
Substitute (replacement) service:
16.1 Gross revenues ...............................................................
16.2 Expense ..........................................................................
Air cargo service:
17.1 Gross revenues ...............................................................
17.2 Depreciation expense .....................................................
17.3 Other expense .................................................................
Other transport related items:
18.1 Gross revenues ...............................................................
18.2 Depreciation expense .....................................................
18.3 Other expense .................................................................
Other operating revenues:
19.1 Reservations cancellation fees .......................................
19.9 Miscellaneous operating revenues .................................

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

Transport expenses:
21

General management personnel ...............................................

53, 69 ...........

23

Pilots and copilots .....................................................................

51 ..................

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Functional or financial activity to which applicable (00)

Objective classification of profit and loss elements

24
25

Group I carriers

Group II carriers

Group III carriers

Other flight personnel ................................................................
Maintenance labor:
25.1 Labor—airframes and other flight equipment .................
25.2 Labor—aircraft engines ...................................................
25.6 Labor—flight equipment ..................................................
25.9 Labor—ground property and equipment .........................
26 Aircraft and traffic handling personnel ......................................
26.1 General aircraft and traffic handling personnel ..............
26.2 Aircraft control personnel ................................................
26.3 Passenger handling personnel .......................................
26.4 Cargo handling personnel ...............................................
28 Trainees, instructors and unallocated shop labor:
28.1 Trainees and instructors .................................................

51, 69 ...........

51, 55 ...............

51, 55.

.......................
.......................
52 ..................
52, 53 ...........
69 ..................
.......................
.......................
.......................
.......................

52 .....................
52 .....................
...........................
52, 53 ...............
...........................
64, 67 ...............
64 .....................
64, 67 ...............
64, 67 ...............

52.
52.

51, 53, 69 .....

30

28.2 Unallocated shop labor ...................................................
Communications personnel .......................................................

53 ..................
53, 69 ...........

31

Recordkeeping and statistical personnel ..................................

53, 69 ...........

32
33
34
35

Lawyers and law clerks .............................................................
Traffic solicitors .........................................................................
Purchasing personnel ................................................................
Other personnel .........................................................................

69 ..................
69 ..................
53, 69 ...........
53, 69 ...........

36

Personnel expenses ..................................................................

51, 53, 69 .....

37

Communications purchased ......................................................

53, 69 ...........

38

Light, heat, power, and water ...................................................

53, 69 ...........

51, 53, 55, 61,
65, 66, 68.
53.
53, 55, 61, 62,
66, 68.
53, 55, 61, 62,
66, 68.
68.
65.
53, 68.
53, 55, 61, 62,
66, 68.
51, 53, 55, 61,
65, 66, 68.
53, 55, 61, 62,
66, 68.
53, 55, 61, 62,
66, 68.

Traffic commissions ...................................................................
39.1 Commissions—passenger ..............................................
39.2 Commissions—property ..................................................
40 Legal fees and expenses ..........................................................
41 Professional and technical fees and expenses ...........................

69 ..................
.......................
.......................
69 ..................
51, 53, 69 .....

51, 53, 55,
64,67, 68.
53 .....................
53, 55, 64, 67,
68.
53, 55, 64, 67,
68.
68 .....................
67 .....................
53, 68 ...............
53, 55, 64, 67,
68.
51, 53, 55, 64,
67, 68.
53, 55, 64, 67,
68.
53, 55, 64, 67,
68.
...........................
67 .....................
67 .....................
68 .....................
51, 53, 55, 64,
67, 68.

43 General services purchased:
43.1 Airframe and other flight equipment repairs ......................
43.2 Aircraft engine repairs .......................................................
43.6 Flight equipment repairs ....................................................
43.7 Aircraft interchange charges .............................................
43.8 General interchange service charges ...............................

.......................
52 ..................
52 ..................
51, 52 ...........
52, 69 ...........

52

43.9 Other services ...................................................................

52, 53, 69 .....

Landing fees ..............................................................................
Aircraft fuels and oils .................................................................
45.1 Aircraft fuels ....................................................................
45.2 Aircraft oils ......................................................................
46 Maintenance materials:
46.1 Airframes and other flight equipment ..............................
46.2 Aircraft engines ...............................................................
46.6 Flight equipment ..............................................................
46.9 Ground property and equipment .....................................
47 Rentals ......................................................................................

69 ..................
51 ..................
.......................
.......................

52 .....................
52 .....................
...........................
51, 52 ...............
52, 55, 64, 67,
68.
52, 53, 55, 64,
67, 68.
64 .....................
...........................
51 .....................
51 .....................

.......................
.......................
52 ..................
52, 53 ...........
51, 53, 69 .....

49
50

Shop and servicing supplies .....................................................
Stationery, printing, and office supplies ....................................

53, 69 ...........
53, 69 ...........

51
53

Passenger food expense ..........................................................
Other supplies ...........................................................................

69 ..................
51, 53, 69 .....

54
55
56
57

Inventory adjustments ...............................................................
Insurance—general ...................................................................
Insurance—traffic liability ..........................................................
Employee benefits and pensions ..............................................

53, 69 ...........
51, 53, 69 .....
69 ..................
51, 53, 69 .....

58

Injuries, loss and damage .........................................................

51, 53, 69 .....

59
60

Schedules and timetables .........................................................
Advertising .................................................................................

69 ..................
69 ..................

39

44
45

52 .....................
52 .....................
...........................
52, 53 ...............
51, 53, 55, 64,
67, 68.
53, 64 ...............
53, 55, 64, 67,
68.
55 .....................
51, 53, 55, 64,
67, 68.
53, 55 ...............
51, 53, 68 .........
55, 64 ...............
51, 53, 55, 64,
67, 68.
51, 53, 55, 64,
67, 68.
67 .....................
67 .....................

52, 53.
61, 62, 63, 65.
61.
62, 65.
62, 65.

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63, 65,

63, 65,
62, 63,
63, 65,
63, 65,

65.
65.
68.
51, 53, 55, 61, 62, 63,
65, 66, 68

51, 52
52, 55, 61, 62, 63, 65,
66, 68
52, 53, 55, 61, 62, 63,
65, 66, 68
61.
51.
51.
52
52.
52, 53.
51, 53, 55, 61,
65, 66, 68.
53, 61.
53, 55, 61, 62,
66, 68.
55.
51, 53, 55, 61,
65, 66, 68.
53, 55.
51, 53, 68.
55, 62.
51, 53, 55, 61,
65, 66, 68.
51, 53, 55, 61,
65, 66, 68.
65, 66.
66.

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62, 63,

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62, 63,

Office of the Secretary, DOT

Section 7
Functional or financial activity to which applicable (00)

Objective classification of profit and loss elements

Group I carriers

Group II carriers

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

68 .....................
67 .....................
55 .....................
53, 55, 64, 67,
68.
68 .....................
68 .....................
64 .....................
51, 53, 55, 64,
67, 68.
51, 68 ...............
51, 53, 55, 64,
67, 68.
52, 53 ...............
52, 53 ...............
52, 53 ...............
52, 53 ...............
52, 53 ...............

68.
66.
55.
53, 55, 61, 62, 63, 65,
66, 68.
68.
68.
61, 62.
51, 53, 55, 61, 62, 63,
65, 66, 68.
51, 68.
51, 53, 55, 61, 62, 63,
65, 66 68.
52, 53.
52, 53.
52, 53.
52, 53.
52, 53.

70 ..................
70 ..................

70 .....................
70 .....................

70.
70.

70 ..................
70 ..................

70 .....................
70 .....................

70.
70.

70
70
70
70
70
70
70
70

70
70
70
70
70
70
70
70

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

70.
70.
70.
70.
70.
70.
70.
70.

70 ..................
70 ..................

70 .....................
70 .....................

70
70

53, 69 ...........

53, 55, 61, 62, 63, 65,
66, 68.
53, 55, 61, 62, 63, 65,
66, 68.
52.

61
62
63
64

Foreign exchange gains and losses .........................................
Other promotional and publicity expenses ................................
Interrupted trips expense ..........................................................
Memberships .............................................................................

69 ..................
69 ..................
69 ..................
53, 69 ...........

65
66
67
68

Corporate and fiscal expenses .................................................
Uncollectible accounts ...............................................................
Clearance, customs and duties .................................................
Taxes—payroll ...........................................................................

69 ..................
69 ..................
69 ..................
51, 53, 69 .....

69
71

Taxes—other than payroll .........................................................
Other expenses .........................................................................

51, 69 ...........
51, 53, 69 .....

72

Aircraft overhauls ......................................................................
72.1 Airworthiness allowance provisions—airframes ..............
72.3 Airframe overhauls deferred ...........................................
72.6 Airworthiness allowance provisions—aircraft engines ....
72.8 Aircraft engine overhauls deferred ..................................
73 Provisions for obsolescence and deterioration—expendable
parts:
73.1 Current provisions ...........................................................
73.2 Inventory decline credits .................................................
74 Amortizations:
74.1 Developmental and preoperating expenses ...................
74.2 Other intangibles .............................................................
75 Depreciation:
75.1 Airframes .........................................................................
75.2 Aircraft engines ...............................................................
75.3 Airframe parts ..................................................................
75.4 Aircraft engine parts ........................................................
75.5 Other flight equipment .....................................................
75.6 Flight equipment ..............................................................
75.8 Maintenance equipment and hangars ............................
75.9 General ground property .................................................
76 Amortization expense, capital leases:
76.1 Amortization—capitalized flight equipment .....................
76.2 Amortization—capitalized other property and equipment
77 Uncleared expense credits:
77.8 Uncleared interchange expense credits .........................

78
79

52,
52,
52,
52,
52,

53
53
53
53
53

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

Group III carriers

77.9 Other uncleared expense credits ....................................

53, 69 ...........

Direct maintenance—flight equipment ......................................
Applied burden Dr/Cr:
79.6 Flight equipment ..............................................................
79.8 General ground property .................................................

52 ..................

53, 55, 64, 67,
68.
53, 55, 64, 67,
68.
52 .....................

52 Dr, 53 Cr
52 Dr, 53 Cr

52 Dr, 53 Cr .....
52 Dr, 53 Cr .....

52 Dr, 53 Cr.
52 Dr, 53 Cr.

81 ..................
81 ..................

81 .....................
81 .....................

81
81

81
81
81
81
81
81
81
81

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

81
81
81
81
81
81
81
81

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

81
81
81
81
81
81
81
81

81
81
81
81
81
81

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

81
81
81
81
81
81

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

81
81
81
81
81
81.

81 ..................

81 .....................

81.

81 ..................
81 ..................

81 .....................
81 .....................

81.
81.

NONOPERATING INCOME AND EXPENSE

81

Interest on long-term debt and capital leases:
81.1 Interest expense, long-term debt ....................................
81.2 Interest expense, capital leases .....................................
82 Other interest:
82.1 Interest expense, short-term debt ...................................
83.1 Imputed interest capitalized—credit ................................
83.2 Imputed interest deferred—debit ....................................
83.3 Imputed interest deferred—credit ...................................
83.4 Interest capitalized—credit ..............................................
84.1 Amortization of discount and expense on debt ..............
84.2 Amortization of premium on debt ....................................
85 Foreign exchange gains and losse ...........................................
89 Other nonoperating income and expense-net:
80.0 Interest income ................................................................
86.0 Income from nontransport ventures ................................
87.0 Equity in income of investor controlled companies ........
88.1 Intercompany transaction adjustment-credit ...................
88.2 Dividend income ..............................................................
88.3 Net unrealized gain or loss on marketable equity securities.
88.4 Net realized gain or loss on marketable equity securities.
88.5 Capital gains and losses—operating property ................
88.6 Capital gains and losses—other .....................................

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Section 8

14 CFR Ch. II (1–1–05 Edition)
Functional or financial activity to which applicable (00)

Objective classification of profit and loss elements

88.7
88.9
89.1
89.9

Group I carriers

Unapplied cash discounts ...............................................
Other miscellaneous nonoperating credits .....................
Intercompany transaction adjustment—debit ..................
Other miscellaneous nonoperating debits ......................

81
81
81
81

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

Group II carriers
81
81
81
81

Group III carriers

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

81.
81.
81.
81.

91 ..................
91 ..................

91 .....................
91 .....................

91.
91.

91 ..................
91 ..................
91 ..................

91 .....................
91 .....................
91 .....................

91.
91.
91.

91 ..................
91 ..................
91 ..................

91 .....................
91 .....................
91 .....................

91.
91.
91.

96 ..................
96 ..................

96 .....................
96 .....................

96.
96.

97 ..................
97 ..................

97 .....................
97 .....................

97.
97.

98 ..................

98 .....................

98.

INCOME TAXES

91

Provision for income taxes:
91.1 Income taxes before investment tax credits ...................
91.2 Investment tax credits utilized .........................................
92 Provisions for deferred income taxes:
92.1 Current provisions for deferred taxes .............................
92.2 Application of deferred taxes ..........................................
92.3 Adjustment of deferred taxes ..........................................
93 Investment tax credits deferred and amortized:
93.1 Investment tax credits deferred ......................................
93.2 Amortization of deferred investment tax credits .............
94 Excess profits taxes ..................................................................
DISCONTINUED OPERATIONS

95

Discontinued operations:
95.1 Income from discontinued operations .............................
95.2 Loss on disposal of discontinued operations ..................
EXTRAORDINARY ITEMS

96
97

Extraordinary items ...................................................................
Income taxes applicable to extraordinary items .......................

98

Cumulative effects of change in accounting principles .............

CHANGES IN ACCOUNTING PRINCIPLES

[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–781, 37 FR 25223, Nov. 29, 1972; 37 FR
28277, Dec. 22, 1972; ER–797, 38 FR 10926, May 3, 1973; ER–841, 39 FR 11995, Apr. 2, 1974; ER–948,
41 FR 12295, Mar. 25, 1976; ER–980, 42 FR 35, Jan. 3, 1977; ER–1013, 42 FR 37515, July 21, 1977;
ER–1401, 50 FR 242, Jan. 3, 1985; Amdt. 241–56, 52 FR 9129, Mar. 23, 1987; Amdt. 241–58, 54 FR
5594, Feb. 6, 1989]

Section 8 General
(a) The profit and loss accounts are
designed to reflect, through natural
groupings, the elements entering into
the derivation of income or loss accruing to the proprietary interests during
each accounting period.
(b) The prescribed system of accounts
provides for the co-ordinate grouping
of all revenues and expenses in terms of
both major natural objectives and
functional activities and for subdivision of both to provide varying degrees
of detail for air carriers of differing accounting capacities and/or requirements.
(c) The detailed objective accounts
established for each air carrier group,
by the dual subdivision of profit and
loss elements in terms of both natural
objectives and functional activities,
are set forth in section 7, Chart of Profit and Loss Accounts.
(d) The prescribed system of accounts
provides generally that profit and loss
elements shall be grouped in accord-

ance with their inherent characteristics within the following primary classifications:
(1) Operating revenues. (i) This primary classification shall include revenues of a character usually and ordinarily derived from the performance of
air transportation and air transportation-related services, which relate to
services performed during the current
accounting year, and adjustments of a
recurrent nature applicable to services
performed in prior accounting years.
(ii) Operating revenues shall be subclassified in terms of functional activities as provided in section 9.
(2) Operating expenses. (i) This primary classification shall include expenses of a character usually and ordinarily incurred in the performance of
air transportation and air transportation-related services, which relate to
services performed during the current
accounting year, and adjustments of a

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Office of the Secretary, DOT

Section 9

recurring nature attributable to services performed in prior accounting
years.
(ii) Operating expenses shall be subclassified in terms of functional activities as provided in sections 10 and 11.
(3) Nonoperating income and expense—
net. This primary classification (8100)
shall include income and loss incident
to commercial ventures not inherently
related to the performance of the common carrier air transport services of
the accounting entity; other revenues
and expenses attributable to financing
or other activities which are extraneous to and not an integral part of air
transportation or its incidental services; and special recurrent items of a
nonperiod nature.
(4) Income taxes for current period.
This primary classification (9100) shall
include provisions for Federal, state,
local, and foreign taxes which are
based upon the net income of the air
carrier for the current period together
with refunds for excess profits credits
or carryback of losses and increases or
reductions of income taxes of prior
years of a magnitude which will not
distort net income of the current accounting year. Income taxes applicable
to special income credits or debits recorded in profit and loss classification
9700 Extraordinary Items, and other
material income tax items not allocable to income of the current accounting year, shall not be included in this
classification but in profit and loss
classification
9700
Extraordinary
Items.
(5) Discontinued operations. This primary classification (9600) shall include
earnings and losses of discontinued
nontransport operations and gains or
losses from the disposal of nontransport operations the result of
which are customarily accounted for
through profit and loss objective accounts 86, 87 and 88.2.
(6) Extraordinary items. This primary
classification (9700) shall include material items characterized by their unusual nature and infrequent occurrence.
(7) Cumulative effect of changes in accounting principles. This primary classification (9800) shall include the cumu-

lative effect of material changes in accounting principles.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–841, 39 FR 11997, Apr. 2, 1974; ER–
980, 42 FR 36, Jan. 3, 1977, Amdt. 241–58, 54 FR
5594, Feb. 6, 1989]

Section 9 Functional Classification—
Operating Revenues
3900 Transport Revenues.
This classification is prescribed for
all air carrier groups and shall include
all revenues from the air transportation of traffic of all classes. It shall
consist of the following subclassifications:
3100

Scheduled Services.

This subclassification shall include revenues from the transportation by air of individual passengers or cargo shipments (as opposed to charter flights) pursuant to published schedules, including extra sections
and other flights performed as an integral
part of published flight schedules.
3200

Nonscheduled Services.

This subclassification shall include revenues from the transportation by air of traffic
applicable to the performance of aircraft
charters, and other air transportation services not part of services performed pursuant
to published flight schedules (but shall not
include data applicable to flights performed
as extra sections to published flight schedules, which shall be reported in the subclassification 3100 Scheduled Services).
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–1401, 50 FR 243, Jan. 3, 1985]

4800 Transport-Related Revenues.
(a) This classification is prescribed
for all air carrier groups and shall include all revenues from the United
States Government as direct grants or
aids for providing air transportation
facilities and all revenues from services which grow from and are incidental to the air transportation services performed by the air carrier.
(b) Revenues related to services of a
magnitude or scope beyond an incidental adjunct to air transportation
services shall not be included in this
classification (see section 1–6(b)). Revenues applicable to such services shall
be included in profit and loss classification 8100, Nonoperating Income and Expense-Net, and the accounting modified
to conform with that of a nontransport

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Section 10

14 CFR Ch. II (1–1–05 Edition)

division whether or not the service is
organized as a nontransport division.
[ER–841, 39 FR 11997, Apr. 2, 1974]

Section 10 Functional Classification—
Operating Expenses of Group I Air
Carriers
5100

Flying Operations.

(a) This function shall include expenses incurred directly in the in-flight
operation of aircraft and expenses attaching to the holding of aircraft and
aircraft operational personnel in readiness for assignment to an in-flight status.
(b) This function shall not include expenses incurred in repairing, servicing
or storing aircraft, expenses incurred
on the ground in protecting and controlling the inflight movement of aircraft, or the compensation of ground
personnel and other expenses incurred
in scheduling or preparing aircraft or
aircraft operational personnel for
flight assignment. Such expenses shall
be included in function 5400 Maintenance or function 6900 General Services
and Administration.
5400

Maintenance.

(a) This function shall include all expenses, both direct and indirect, specifically identifiable with the repair
and upkeep of property and equipment
as may be required to meet operating
and safety standards; in inspecting or
checking property and equipment in
accordance with prescribed operational
standards; and in polishing or cleaning
property and equipment when such
polishing or cleaning is not an incidental routine in connection with the
normal productive use of property and
equipment.
(b) This function shall include the
cost of direct labor, materials, and outside services and maintenances overhead or other costs specifically associated with maintenance operations regardless of the location at which incurred.
(c) This function shall not include
costs incurred in the construction, improvement, or modification of property
and equipment even when necessitated
to meet new or changed operating or
safety standards. Such costs shall be

charged to appropriate property and
equipment accounts.
(d) Costs incurred by aircraft handling personnel in visual inspection,
minor check and servicing of aircraft,
while in line service, shall not be included in this function when performed
as an incidental routine during the
normal productive use of aircraft but
shall be included in function 6900 General Services and Administration.
(e) Each Group I air carrier shall
maintain the following subfunctions:
5200

Direct Maintenance.

a. This subfunction shall include the costs
of labor, materials and outside services consumed directly in periodic maintenance operations and the maintenance and repair of
property and equipment, of all types and
classes, regardless of the location at which
incurred, exclusive of costs specifically identified with maintenance property and equipment expenses in balance sheet accounts 1630
Equipment, 1639 Improvements to Leased
Buildings and Equipment, and 1640.1 Maintenance Buildings and Improvements which
shall be included in subfunction 5300 Maintenance Burden.
b. The cost of direct labor, materials and
supplies, as well as outside repairs, used in
the maintenance and repair of property and
equipment shall be recorded on running job
orders or tickets covering repairs and periodic inspections except servicing. Where a
number of like items are maintained on a
group basis, it will be necessary to maintain
only one job order for each group.
c. When supervisory personnel such as crew
chiefs, inspectors and foremen are engaged
in direct labor in connection with equipment
maintenance, a proportionate part of their
salaries and wages shall be charged to the
appropriate direct labor accounts. The cost
of transporting property to and from shops
for repair and maintenance shall be included
as a part of the cost of the materials and
supplies used in the repair or maintenance of
such property and equipment. Transportation charges, customs and duties, etc.;
shall be included in the cost of repairs and
maintenance operations when made by outside parties.
5300

Maintenance Burden.

a. This subfunction shall include all overhead or general expenses which are specifically identified with activities involved in
periodic maintenance operations and the
maintenance and repair of property and
equipment of all types and classes, including
the cost of direct labor, materials and outside services identified with the maintenance
and repair of maintenance property and

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Section 10

equipment included in balance sheet accounts 1630 Equipment, 1639 Improvements
to Leased Buildings and Equipment, and
1604.1 Maintenance Buildings and Improvements. It shall include expenses specifically
related to the administration of maintenance stocks and stores, the keeping of pertinent maintenance operations records, and
the scheduling, controlling, planning and supervision of maintenance operations.
b. This subfunction shall not include expenses related to financial accounting, purchasing or other overhead activities which
are of general applicability to all operating
functions. Such expenses shall be included in
function 6900 General Services and Administration.
c. This subfunction shall include only
those expenses attributable to the current
air transport operations of the air carrier.
Maintenance burden associated with capital
projects of the air carrier, other than overhauls of airframes and aircraft engines shall
be allocated to such projects. Maintenance
burden incurred in common with services to
other companies and operating entities shall
be allocated to such services on a pro rata
basis unless the services are so infrequent in
performance or small in volume as to result
in no appreciable demands upon the air carrier’s maintenance facilities. When overhauls of airframes or aircraft engines are as
a consistent practice accounted for on an accrual basis instead of being expensed directly, maintenance burden shall be allocated to such overhauls on a pro rata basis.
Standard burden rates may be employed for
quarterly allocations of maintenance burden
provided the rates are reviewed at the close
of each calendar year. When the actual burden rate for the year differs materially from
the standard burden rate applied, adjustment
shall be made to reflect the actual cost incurred for the full accounting year. Allocations of maintenance burden to capital
projects, and service sales to others shall be
made through the individual maintenance
burden objective accounts, except that the
air carrier may make such allocations by
credits to profit and loss account 77
Uncleared Expense Credits provided that use
of that account will not undermine the significance of the individual maintenance burden objective accounts in terms of the expense levels associated with the air carrier’s
air transport services. Maintenance burden
allocated to overhauls shall be credited to
profit and loss subaccounts 5372.1 or 5372.6
Airworthiness Allowance Provisions.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 36, Jan. 3, 1977; ER–1027,
42 FR 60128, Nov. 25, 1977; ER–1188, 45 FR
48870, July 22, 1980; Amdt. 241–58, 54 FR 5595,
Feb. 6, 1989]

6900 General Services and Administration.
This function shall include expenses
incurred on the ground in controlling
and protecting the in-flight movement
of aircraft; landing, handling, or servicing aircraft on the ground; selling
transportation; servicing and handling
traffic of all classes; promoting the development of traffic; administering operations generally; and all other expenses not otherwise provided for in
functions 5100 Flying Operations, 5400
Maintenance and 7000 Depreciation and
Amortization.
7000 Depreciation and Amortization.
This function shall include all
charges to expense to record losses suffered through current exhaustion of
the serviceability of property and
equipment due to wear and tear from
use and the action of time and the elements, which are not replaced by current repairs, as well as losses in serviceability caused by obsolescence,
supersession, discoveries, change in demand or actions by public authority. It
shall also include charges for the amortization of capitalized developmental
and preoperating costs, leased property
under capital leases and other intangible assets applicable to the performance of air transportation. (See sections 6–1696, 1830 and 1890.)
[Amdt. 241–58, 54 FR 5595, Feb. 6, 1989]

7100 Transport-Related Expenses.
(a) This function shall include all expense items applicable to the generation of transport-related revenues included in section 9, Function 4800.
(b) Such expense related to services
of a magnitude or scope beyond an incidental adjunct to air transportation
services shall not be included in this
function (see section 1–6(b)). Expenses
applicable to the generation of such
revenues shall be included in profit and
loss classification 8100, Nonoperating
Income and Expense-Net, and the accounting modified to conform with
that of a nontransport division whether or not the service is organized as a
nontransport division.
(c) This function shall also include
expenses representing increases in
costs incurred in common with the air

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Section 11

14 CFR Ch. II (1–1–05 Edition)

transport service, to the extent such
increases result from the added transport-related services, as well as a pro
rata share of the costs incurred by the
air carrier in operating facilities which
are used jointly with others. As a general rule, this function shall not include those expenses, other than joint
facilities costs, which would remain as
an essential part of the air transport
services if the transport-related services were terminated.
[ER–841, 39 FR 11997, Apr. 2, 1974, as amended
by ER–1401, 50 FR 243, Jan. 3, 1985]

Section 11 Functional Classification—
Operating Expenses of Group II and
Group III Air Carriers
5100 Flying Operations.
(a) This function shall include expenses incurred directly in the in-flight
operation of aircraft and expenses attaching to the holding of aircraft and
aircraft operational personnel in readiness for assignment to an in-flight status.
(b) This function shall not include expenses incurred in repairing, servicing
or storing aircraft, expenses incurred
on the ground in protecting and controlling the in-flight movement of aircraft, or compensation of ground personnel and other expenses incurred in
scheduling or preparing aircraft or aircraft operational personnel for flight
assignment. Such expenses shall be included in function 5400 Maintenance, or
function 6400 Aircraft and Traffic Servicing.
5400 Maintenance.
(a) This function shall include all expenses, both direct and indirect, incurred in the repair and upkeep of
property and equipment as may be required to meet operating and safety
standards; in inspecting or checking
property and equipment in accordance
with prescribed operational standards;
and in polishing or cleaning property
and equipment when such polishing or
cleaning is not an incidental routine in
connection with the normal productive
use of property and equipment.
(b) This function shall include the
cost of direct labor, materials, and outside services and maintenance overhead or other costs associated with

maintenance operations regardless of
the location at which incurred.
(c) This function shall not include
costs incurred in the construction, improvement, or modification of property
and equipment even when necessitated
to meet new or changed operating or
safety standards. Such costs shall be
charged to appropriate property and
equipment accounts.
(d) Costs incurred by aircraft handling personnel in visual inspection,
minor check and servicing of aircraft,
while in line service, shall not be included in this function when performed
as an incidental routine during the
normal productive use of aircraft but
shall be included in function 6400 Aircraft and Tariff Servicing.
(e) Both Group II air carriers and
Group III air carriers shall maintain
the following subfunctions:
5200

Direct Maintenance.

a. This subfunction shall include the costs
of labor, materials and outside services consumed directly in periodic maintenance operations and the maintenance and repair of
property and equipment of all types and
classes, regardless of the location at which
incurred, exclusive of maintenance property
and equipment included in balance sheet accounts 1630 Equipment, 1639 Improvements
to Leased Buildings and Equipment, and
1640.1 Maintenance Buildings and Improvements, which shall be included in subfunction 5300 Maintenance Burden.
b. The cost of direct labor, materials and
supplies, as well as outside repairs, used in
the maintenance and repair of property and
equipment shall be recorded on running job
orders or tickets covering repairs and periodic inspections except servicing. Where a
number of like items are maintained on a
group basis, it will be necessary to maintain
only one job order for each group.
c. When supervisory personnel such as crew
chiefs, inspectors and foremen are engaged
in direct labor in connection with equipment
maintenance, a proportionate part of their
salaries and wages shall be charged to the
appropriate direct labor accounts. The cost
of transporting property to and from shops
for repair and maintenance shall be included
as a part of the cost of the materials and
supplies used in the repair or maintenance of
such property and equipment. Transportation charges, customs and duties, etc.,
shall be included in the cost of repairs and
maintenance operations when made by outside parties.

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Office of the Secretary, DOT
5300

Section 11

Maintenance Burden.

a. This subfunction shall include all overhead or general expenses used directly in the
activities involved in periodic maintenance
operations and the maintenance and repair
of property and equipment of all types and
classes, including the cost of direct labor,
materials and outside services used in the
maintenance and repair of maintenance
property and equipment included in balance
sheet accounts 1630 Equipment, 1639 Improvements to Leased Buildings and Equipment, and 1640.1 Maintenance Buildings and
Improvements. It shall include expenses related to the administration of maintenance
stocks and stores, the keeping of pertinent
maintenance operation records, and the
scheduling, controlling, planning and supervision of maintenance operations.
b. This subfunction shall not include expenses related to financial accounting, purchasing or other overhead activities which
are of general applicability to all operating
functions. Such expenses shall be included in
function 6800 General and Administrative.
c. This subfunction shall include only
those expenses attributable to the current
air transport operations of the air carrier.
Maintenance burden associated with capital
projects of the air carrier, other than overhauls of airframes and aircraft engines, shall
be allocated to such projects. Maintenance
burden incurred in common with services to
other companies and operating entities shall
be allocated to such services on a pro rata
basis unless the services are so infrequent in
performance or small in volume as to result
in no appreciable demands upon the air carrier’s maintenance facilities. When overhauls of airframes or aircraft engines are as
a consistent practice accounted for on an accrual basis instead of being expensed directly, maintenance burden shall be allocated to such overhauls on a pro rata basis.
Standard burden rates may be employed for
quarterly allocations of maintenance burden
provided the rates are reviewed at the close
of each calendar year. When the actual burden rate for the year differs materially from
the standard burden rate applied, adjustment
shall be made to reflect the actual costs incurred for the full accounting year. Allocations of maintenance burden to capital
projects, and service sales to others shall be
made through the individual maintenance
burden objective accounts, except that the
air carrier may make such allocations by
credits to profit and loss account 77
Uncleared Expense Credits under such circumstances in which the use of that account
will not undermine the significance of the
individual maintenance burden objective accounts in terms of the expense levels associated with the air carrier’s air transport services. Maintenance burden allocated to overhauls shall be credited to profit and loss sub-

accounts 5372.1 or 5372.6 Airworthiness Allowance Provisions.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 36, Jan. 3, 1977; ER–1401,
50 FR 244, Jan. 3, 1985; Amdt. 241–58, 54 FR
5595, Feb. 6, 1989]

5500 Passenger Service.
This function shall include all expenses chargeable directly to activities
contributing to the comfort, safety and
convenience of passengers while in
flight and when flights are interrupted.
It shall not include expenses incurred
in enplaning or deplaning passengers,
or in securing and selling passenger
transportation and caring for passengers prior to entering a flight status. Such expenses shall be included in
functions 6400 Aircraft and Traffic
Servicing and 6700 Promotion and
Sales, respectively.
6400 Aircraft and Traffic Servicing.
(a) This function shall include the
compensation of ground personnel and
other expenses incurred on the ground
incident to the protection and control
of the in-flight movement of aircraft,
scheduling and preparing aircraft operational crews for flight assignment,
handling and servicing aircraft while in
line operation, servicing and handling
traffic on the ground, subsequent to
the issuance of documents establishing
the air carrier’s responsibility to provide air transportation, and in-flight
expenses of handling and protecting all
nonpassenger traffic including passenger baggage.
(b) This function shall include only
those aircraft servicing and cleaning
expenses which are incurred as an incidental routine during the normal productive use of aircraft in line operations. It shall not include expenses incurred in the repair and maintenance
of property and equipment, or in
checking or inspecting property and
equipment in accordance with prescribed operational standards when
such activities are not an incidental
routine during the normal productive
use of aircraft. Such expenses shall be
included in function 5400 Maintenance.
(c) This function shall not include expenses incurred in securing traffic, arranging aircraft space for traffic sold
or in issuing documents confirming

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Section 11

14 CFR Ch. II (1–1–05 Edition)

traffic sales and establishing the air
carrier’s responsibilities to provide air
transportation. Such expenses shall be
included in function 6700 Promotion
and Sales. However, for purposes of
this system of accounts, expenses attributable to the operation of airport
traffic offices, excluding reservation
centers, shall be included in this function. Expenses attributable to the operation of reservation or aircraft space
control centers shall be included in
function 6700 Promotion and Sales regardless of the location at which incurred.
(d) Group III air carriers shall further
subdivide this function as follows:
6100

Aircraft Servicing.

a. This subfunction shall include the compensation of ground personnel and other expenses incurred on the ground incident to
the protection and control of the in-flight
movement of aircraft; scheduling or preparing aircraft operational crews for flight
assignment; landing and parking aircraft;
visual inspection, routine checking, servicing and fueling of aircraft; and other expenses incurred on the ground incident to
readying for arrival and takeoff of aircraft.
6200

Traffic Servicing.

a. This subfunction shall include the compensation of ground personnel and other expenses incurred on the ground incident to
handling traffic of all types and classes on
the ground subsequent to the issuance of
documents establishing the air carrier’s responsibility to provide air transportation.
Expenses attributable to the operation of
airport traffic offices shall also be included
in this subfunction; expenses attributable to
reservations centers shall be excluded. It
shall include expenses incurred in both enplaning and deplaning traffic as well as expenses
incurred
in
preparation
for
enplanement and all expenses subsequent to
deplanement.
b. This subfunction shall also include costs
incurred in handling and protecting all nonpassenger traffic while in flight. It shall not
include expenses incurred in contributing to
the comfort, safety and convenience of passengers while in flight or when flights are interrupted. Such expenses shall be included in
function 5500 Passenger Service.
6300

b. This subfunction shall not include supervisory or administrative expenses which can
be charged directly to subfunction 6100 Aircraft Servicing or subfunction 6200 Traffic
Servicing. Nor shall this subfunction include
expenses of a general administrative character and of significant amount regularly
contributing to operating functions generally. Such expenses shall be included in
function 6800 General and Administrative.
c. The expenses in this subfunction shall be
recorded separately for each geographic location at which incurred.

6700 Promotion and Sales.
(a) This function shall include expenses incurred in creating public preference for the air carrier and its services; stimulating the development of
the air transport market; and promoting the air carrier or developing air
transportation generally.
(b) It shall also include the compensation of personnel and other expenses incident to documenting sales;
expenses incident to controlling and
arranging or confirming aircraft space
for traffic sold; expenses incurred in direct sales solicitation and selling of
aircraft space; and expenses incurred in
developing tariffs and schedules for
publication.
(c) This function shall not include expenses incurred in handling traffic subsequent to the issuance of documents
establishing the air carrier’s responsibility to provide air transportation
which shall be included in functions
5500 Passenger Service and 6400 Aircraft and Traffic Servicing. However,
for purposes of this system of accounts,
expenses attributable to the operation
of airport traffic offices, excluding reservation centers, shall be included in
function 6400 Aircraft and Traffic Servicing. Expenses attributable to the operation of reservation or aircraft space
control centers shall be included in
function 6700 Promotion and Sales regardless of the location at which incurred.
(d) Group III air carriers shall subdivide this function as follows:
6500

Servicing Administration.

a. This subfunction shall include expenses
of a general nature incurred in performing
supervisory or administrative activities relating solely and in common to subfunctions
6100 Aircraft Servicing and 6200 Traffic Servicing.

Reservations and Sales.

This subfunction shall include expenses incident to direct sales solicitation, documenting sales, controlling and arranging or
confirming aircraft space sold, and in developing tariffs and schedules for publication. It
shall also include expenses attributable to

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Section 12

the operation of city traffic offices. Expenses
incurred in stimulating traffic and promoting the air carrier or air transportation
generally shall not be included in this subfunction but in subfunction 6600 Advertising
and Publicity.
6600

Advertising and Publicity.

a. This subfunction shall include expenses
incurred in creating public preference for the
air carrier and its services; stimulating development of the air transport market; and
promoting the air carrier or developing air
transportation generally.
b. This subfunction shall not include expenses incurred in direct sales solicitation
and selling of aircraft space. Such costs shall
be included in subfunction 6500 Reservations
and Sales.

6800 General and Administrative.
(a) This function shall include expenses of a general corporate nature
and expenses incurred in performing
activities which contribute to more
than a single operating function such
as general financial accounting activities, purchasing activities, representation at law, and other general operational administration, which are not
directly applicable to a particular
function.
(b) This function shall not include expenses incurred directly in promoting
traffic or in promoting relations of the
air carrier generally with the public
which shall be included in function 6700
Promotion and Sales. Nor shall this
function include expenses, regularly
applicable in large part to a specific
function, which contribute only incidentally, or in small amount, to various other functions. Such expenses
when of such size as will not distort
the function to which predominantly
related, shall be included in the specific function to which regularly related. However, expenses of a general
administrative character and of significant amount regularly contributing to
operating functions generally shall be
included in this function.
7000 Depreciation and Amortization.
This function shall include all
charges to expense to record losses suffered through current exhaustion of
the serviceability of property and
equipment due to wear and tear from
use and the action of time and the elements, which are not replaced by cur-

rent repairs, as well as losses in serviceability occasioned by obsolescence,
supersession, discoveries, change in
popular demand or action by public authority. It shall also include charges
for the amortization of capitalized developmental and preoperating costs,
leased property under capital leases,
and other intangible assets applicable
to the performance of air transportation. (See sections 6–1696, 1830 and
1890.)
[Amdt. 241–58, 54 FR 5595, Feb. 6, 1989]

7100

Transport-Related Expenses.

(a) This function shall include all expense items applicable to the generation of transport-related revenues included in section 9, Function 4800.
(b) Such expense related to services
of a magnitude or scope beyond an incidental adjunct to air transportation
services shall not be included in this
function (see section 1–6(b)). Expenses
applicable to the generation of such
revenues shall be included in profit and
loss classification 8100, Nonoperating
Income and Expense-Net, and the accounting modified to conform with
that of a nontransport division whether or not the service is organized as a
nontransport division.
(c) This function shall also include
expenses representing increases in
costs incurred in common with the air
transport service, to the extent such
increases result from the added transport-related services, as well as a pro
rata share of the costs incurred by the
air carrier in operating facilities which
are used jointly with others. As a general rule, this function shall not include those expenses, other than joint
facilities, costs, which would remain as
an essential part of the air transport
services if the transport-related services were terminated.
[ER–841, 39 FR 11997, Apr. 2, 1974, as amended
by ER–1401, 50 FR 244, Jan. 3, 1985]

Section 12 Objective Classification—
Operating Revenues and Expenses
00

General Instructions.

(a) Basic objective accounts, applicable to all air carrier groups, are established for recording all revenue and expense elements. These basic accounts

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14 CFR Ch. II (1–1–05 Edition)

are in certain areas subdivided to provide greater detail for indicated air
carrier groups.
(b) Each air carrier shall credit the
gross revenues accruing from services
ordinarily associated with air transportation and transportation-related services to the appropriate account established for each revenue source. Expenses incident to transport and transport-related services shall be charged
to the accounts established in this section in accordance with the objectives
served by each expenditure. However,
direct costs of forwarding traffic as a
result of interrupted trips, and refunds
of sales, shall be charged to the applicable revenue account.
(c) To the end that the integrity of
the prescribed objective accounts shall
not be impaired, each air carrier shall:
(1) Charge the appropriate account
prescribed for each service purchased
or expense element incurred expressly
for the benefit of the air carrier regardless of whether incurred directly by the
air carrier or through an agent or other
intermediary, and (2) except as provided
in
objective
account
77,
Uncleared Expense Credits, credit or
charge, as appropriate, the account
prescribed for each expense element
which may be involved in distributions
of expenses between (i) separate operating entities of the air carrier, (ii)
transport-related services and transport services, or transport functions,
(iii) balance sheet and profit and loss
elements, and (iv) the air carrier and
others, when the expenses are incurred
initially by or for the benefit of the air
carrier. At the option of the air carrier,
standard rates applicable to each objective account comprising a particular
pool of expenses subject to assignment
between two or more activities, may be
established for proration purposes, provided the rates established are predicated upon the experience of the air
carrier and are reviewed and modified
as appropriate at least once each year.

01.1

Passenger—First Class.

Record here revenue from the air transportation of passengers moving at either standard fares or premium fares, or at reduced
fares not predicated upon the use of aircraft
space specifically separated from first class,
and for whom standard or premium quality
services are provided.
01.2

Passenger—Coach.

Record here revenue from the air transportation of passengers moving at special fares
reduced from the first class or premium fares
which are predicated upon both the operation of specifically designated aircraft
space and a reduction in the quality of service regularly and ordinarily provided.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 36, Jan. 3, 1977; 60 FR
66723, Dec. 26, 1995]

05 Mail.
(a) Record here revenue from the
transportation by air of both United
States and foreign mail.
(b) Fines and penalties imposed by
the United States Government and foreign governments in connection with
the carriage of mail shall not be
charged to this account but to profit
and loss account 89.9 Other Miscellaneous Nonoperating Debits.
(c) This account shall be subdivided
as follows by all air carrier groups:
05.1

Priority.

Record here revenue from United States
mail for which transportation by air is provided on a priority basis.

TRANSPORT REVENUES
01

premium services and other similar
charges. Revenue from airline employees, officers and directors, or other persons, except for ministers of religion,
who are traveling under reduced-rate
transportation authorized by 49 U.S.C.
41511(a) and 14 CFR part 223, as well as
revenue from travel agents, cargo
agents and tour conductors traveling
at reduced fares, and revenues from
service charges for passengers traveling on a nonrevenue basis shall be recorded in objective account 19 Air
Transport—Other.
(b) This account shall be subdivided
as follows by all air carrier groups:

Passenger.

(a) Record here revenue from the
transportation of passengers by air, including infants transported at reduced
fares, berth charges, surcharges for

05.2

Nonpriority.

Record here revenue from United States
mail for which transportation by air is provided on a space available basis.

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05.3

Section 12

Foreign.

Record here revenue from the transportation by air of mail other than United
States mail.
[ER–980, 42 FR 36, Jan. 3, 1977, as amended by
Amdt. 241–58, 54 FR 5595, Feb. 6, 1989]

06 Property.
(a) Record here revenue from the
transportation by air of property including excess passenger baggage.
(b) Revenues resulting from services
incidental to the transportation services such as collection of shipper’s interest insurance premiums and charges
and fees for service such as pick-up and
delivery, assembly and distribution,
storage and handling, and C.O.D. collection shall not be credited to this account but to profit and loss account 17
Air Cargo Services.
(c) This account shall be subdivided
as follows by all air carrier groups:
06.1

Freight.

Record here revenue from the transportation by air of property other than passenger baggage.
06.2

air carriers for flight facilities furnished or operated by the accounting
air carrier where the remuneration
paid by the party receiving transportation accrues directly to, and the responsibility for providing transportation is that of other air carriers.
Such revenues and related expenses
shall be included in profit and loss accounts 11, Rents; 13, Interchange Sales;
or 18, Other Transport-Related Revenues and Expenses.
(c) This account shall be subdivided
as follows by all air carrier groups:
07.1

07.2 Property.
Record here revenue from the transportation of property.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 37, Jan. 3, 1977; ER–1401,
50 FR 244, Jan. 3, 1985]

TRANSPORT RELATED REVENUES AND
EXPENSES

Excess Passenger Baggage.

Record here revenue from the transportation by air of passener baggage in excess of
fixed free allowance.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–1401, 50 FR 244, Jan. 3, 1985]

07 Charter.
(a) Record here the revenue from
nonscheduled air transport services
(except as otherwise required by profit
and loss Account 86 Income from Nontransport Ventures) where the party
receiving the transportation obtains
exclusive use of an aircraft at either
published tariff or other contractual
rates and the remuneration paid by the
party receiving transportation accrues
directly to, and the responsibility for
providing transportation is that of, the
accounting air carrier. This account
shall also include revenues from air
transport services other than inter-airport services, whether scheduled or
nonscheduled, where each passenger or
shipment receiving transportation is
individually documented and does not
obtain exclusive use of an aircraft.
(b) This account shall not include
revenues or fees received from other

Passenger.

Record here revenue from the transportation of passengers and their personal baggage.

08

Public Service Revenues (Subsidy).

Record here amounts of compensation received pursuant to the provisions of 49 U.S.C. 41733 under rates established by the Department of Transportation for the provision of essential
air service to small communities.
[Amdt. 241–58, 54 FR 5595, Feb. 6, 1989, as
amended at 60 FR 66723, Dec. 26, 1995]

09

In-Flight Sales.

(a) Record here revenues from and expenses related to transport-related
services performed while in flight.
(b) This account shall be subdivided
as follows by all air carrier groups:

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Section 12
09.1
09.2

14 CFR Ch. II (1–1–05 Edition)

Liquor and food—gross revenues.

Liquor and food—other expense.

09.5

Movies and stereo—depreciation expense.

09.7

Movies and stereo—other expense.

09.8

Other—depreciation expense.
09.9

10

12.3

Other—gross revenues.

Liquor and food—depreciation expense.

09.4

Restaurant
(Ground).

Other—expense.

and

Food

Service

(a) Record here revenues from and expenses related to the operation of restaurants and similar facilities, and
from sales of food. (See section 12–51.)
(b) This account shall be subdivided
as follows by all air carrier groups.
10.1
10.2

11

Gross revenues.

Depreciation expense.

10.3

Other expense.

Rents.

(a) Record here revenues from and expenses related to property and equipment owned or leased which has been
rented or subleased to others exclusive
of associated companies. This account
shall not include fees from the use by
others of air carrier aircraft under aircraft interchange agreements.
(b) This account shall be subdivided
as follows by all air carrier groups:
11.1
11.2

12

Gross Revenues.

Depreciation Expense.

11.3

Gross Revenues.

12.2 Depreciation Expense.

Movies and stereo—gross revenues.
09.3

09.6

12.1

Other Expenses.

Limousine Service.

(a) Record here revenues from and expenses related to the operation of passenger limousine surface transportation services.
(b) This account shall be subdivided
as follows by all air carrier groups:

Other Expenses.

13 Interchange Sales.
(a) Record here the revenues or fees
from and the expenses related to services provided associated companies and
other than associated companies by the
air carrier under aircraft interchange
agreements. This account shall be
charged and the applicable operating
expense objective accounts shall be
credited, except as provided in operating expense objective account 77,
Uncleared Expense Credits, with the
expenses attaching to services provided
all companies under aircraft interchange agreements.
(b) This account shall not include
revenues or expenses related to air
transportation services performed in
the name of and for the account of the
accounting air carrier. Such revenues
shall be included in applicable transport revenue and operating expense objective accounts.
(c) This account shall be subdivided
as follows by all air carrier groups:
13.1

Associated companies—gross revenues.
13.2

Outside—gross revenues.

13.3 Associated companies—depreciation
expense.
13.4 Associated companies—other expense.
13.5

Outside—depreciation expense.

13.6

Outside—other expense.

14 General Service Sales.
(a) Record here the revenues, commissions or fees from and expenses related to other than air transportation
and aircraft interchange services provided to associated and outside companies by the air carrier. This account
shall include the contractual fees or
other revenues from and expenses related to services provided to associated
and other companies in the operation
of facilities which are used jointly with
associated and other companies as well
as revenues from and the costs related
to the sale of supplies, parts and repairs sold directly or furnished as a
part of services to associated and other
companies.

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Section 12

(b) This account shall not include
consideration received from sales of
property, equipment, materials or supplies when disposed of as a part of a
program involving retirement of property and equipment as opposed to routine sales and services to associated
and other companies unless such disposition is conducted as a normal part
of the incidental sales activity. Such
retirement gain or loss shall be included in capital gains and losses accounts. Maintenance parts, materials
or supplies sold as a service to others
shall be charged to this account at cost
without adjustment of related obsolescence or depreciation allowances.
(c) This account shall be subdivided
as follows by all air carrier groups:
Associated companies—gross revenues.

14.1

14.2
14.3
14.4

Outside—gross revenues.

Associated companies—depreciation
expense.
Associated companies—other expense.

14.5

Outside—depreciation expense.

14.6

Outside—other expense.

17.1

Gross Revenues.

17.2 Depreciation Expense.
17.3

18

Other Expenses.

Other Transport-Related Revenues
and Expenses.

(a) Record here revenues from and expenses related to transport-related
services not provided for in profit and
loss accounts 10 through 17, inclusive,
such as revenues and expenses incident
to the operation of flight facilities by
the accounting air carrier, except those
operated under aircraft interchange
agreements, where the remuneration
paid by the party receiving transportation accrues directly to, and the responsibility for providing transportation is that of, other air carriers; and
the revenues and expenses incident to
vending machines, parcel rooms, storage facilities, etc.
(b) [Reserved]
(c) Revenues from the renting or
leasing of property and equipment to
others shall not be included in this account but in profit and loss account 11
Rents.
(d) This account shall be subdivided
as follows by all air carrier groups:

[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 37, Jan. 3, 1977]

18.1

Gross Revenues.

18.2 Depreciation Expense.

16

Substitute (replacement) Service.

18.3

(a) Record here revenues from and expenses related to substitute service.
This account shall include as revenues
all monies received from substitute
carriers and as expense all monies paid
to substitute carriers.
(b) This account shall be subdivided
as follows by all air carrier groups:
16.1

Gross revenue.

16.2

17

Expense.

Air Cargo Services.

(a) Record here fees and other revenues from and expenses related to incidental services performed in connection with cargo shipments such as
pickup and delivery fees, shipper’s interest insurance charges, storage and
handling fees, etc.
(b) This account shall be subdivided
as follows by all air carrier groups:

Other Expenses.

19 Air Transport—Other.
(a) Record here revenues associated
with air transportation conducted by
the air carrier, not provided for in profit and loss accounts 01 through 09, inclusive, such as revenue from (1) airline employees, officers and directors,
or other persons, except for ministers
of religion, who are traveling under reduced-rate transportation authorized
by 49 U.S.C. 41511(a) and 14 CFR part
223, as well as travel agents, cargo
agents and tour conductors traveling
at reduced fares, (2) service charges for
failure to cancel or for late cancellation of air transportation reservations,
and (3) nontransportation service
charges collected on both revenue and
nonrevenue flights.
(b) Revenues derived from sightseeing, aerial photography, advertising, or other special flights shall not

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Section 12

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be included in this account but in account 07 Charter.
(c) This account shall be subdivided
as follows by all air carrier groups:
19.1
19.9

Reservations Cancellation Fees.
Miscellaneous Operating Revenue.

[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–820, 38 FR 24352, Sept. 7, 1973; ER–
841, 39 FR 11997, Apr. 2, 1974; ER–980, 42 FR 37,
Jan. 3, 1977; 60 FR 66723, Dec. 26, 1995]

TRANSPORT EXPENSES
20

and modified as appropriate at least
once each year.
21

23

General Instructions.

(a) Each element of expense ordinarily associated with air transportation services shall be charged to the
accounts established in this section in
accordance with the objectives served
by each expenditure. Basic objective
accounts, applicable to all air carrier
groups, are established for recording
all expense elements. These basic accounts are in certain areas subdivided
to provide greater detail for indicated
air carrier groups.
(b) To the end that the integrity of
the prescribed objective accounts shall
not be impaired, each air carrier shall:
(1) Charge the appropriate account
prescribed for each service purchased
or expense element incurred expressly
for the benefit of the air carrier regardless of whether incurred directly by the
air carrier or through an agent or other
intermediary, and (2) except as provided in objective account 77 Uncleared
Expense Credits, credit or charge, as
appropriate, the account prescribed for
each expense element which may be involved in distributions of expenses between (i) separate operating entities of
the air carrier, (ii) incidental and
transport services or transport functions, (iii) balance sheet and profit and
loss elements and (iv) the air carrier
and others, when the expenses are incurred initially by or for the benefit of
the air carrier. At the option of the air
carrier, standard rates applicable to
each objective account comprising a
particular pool of expenses subject to
assignment between two or more activities, may be established for proration purposes, provided the rates established are predicated upon the experience of the air carrier and are reviewed

General Management Personnel.

Record here the compensation, including vacation and sick leave pay, of
general officers and supervisors, and
immediate assistants regardless of locality at which based, responsible for
an activity not provided for in profit
and loss accounts 25 through 35, inclusive, or an activity involving two or
more such accounts.
Pilots and Copilots.

Record here the compensation, including vacation and sick leave pay, of
pilots and copilots assigned or held inactive awaiting assignment to flight
duty.
24

Other Flight Personnel.

Record here the compensation, including vacation and sick leave pay, of
other flight personnel assigned or held
inactive awaiting assignment to flight
status, not responsible for the in-flight
management of aircraft, such as engineers, navigation officers and cabin attendants.
25

Maintenance Labor.

(a) Record here the compensation for
time of personnel spent directly on specific property and equipment maintenance projects. (See sections 10 and 11–
5200.) Vacation and sick leave pay shall
be charged to profit and loss account 28
Trainees, Instructors and Unallocated
Shop Labor.
(b) This account shall be subdivided
as follows:
GROUP II AND GROUP III AIR CARRIERS
25.1 Labor—Airframes and Other Flight
Equipment.
Record here the direct labor expended upon
airframes, spare parts related to airframes,
and other flight equipment (Other than aircraft engines and spare parts related to aircraft engines). Other flight equipment shall
include instruments, which encompass all
gauges, meters, measuring devices, and indicators, together with appurtenances thereto
for installation in aircraft and aircraft engines which are maintaned separately from
airframes and aircraft engines.

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25.2

Section 12
26.3 Passenger Handling Personnel.

Labor—Aircraft Engines.

Record here the direct labor expended upon
aircraft engines and spare parts related to
aircraft engines.

Record here compensation of personnel
whose activities are identifiable with the
handling of passengers.
26.4

GROUP I AIR CARRIERS
25.6

Labor—Flight Equipment.

Record here the direct labor expended upon
flight equipment of all types and classes.

28

ALL AIR CARRIER GROUPS
Labor—Ground Property and Equipment.

25.9

Record here the direct labor expended upon
ground property and equipment of all types
and classes. Direct labor expended upon general ground properties shall be charged to
subfunction 5200 Direct Maintenance; and direct labor expended upon maintenance buildings and equipment shall be charged to subfunction 5300 Maintenance Burden.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–1401, 50 FR 244, Jan. 3, 1985]

Trainees,
Instructors,
and
Unallocated Shop Labor.
(a) Record here the compensation, including vacation and sick leave pay, of
instructors and personnel in an off-thejob training status; direct maintenance
personnel compensation not assigned
to specific projects; and vacation or
sick leave pay of direct maintenance
personnel.
(b) This account shall be subdivided
as follows by all air carrier groups:
28.1

26

Aircraft and Traffic Handling Personnel.

(a) Record here the compensation, including vacation and sick leave pay, of
personnel of all types and classes, including direct supervisory personnel,
assigned to ground activities, engaged
directly in protecting and controlling
aircraft in flight, scheduling and preparing flight crews for flight assignment, parking and servicing aircraft
incidental to line operations, and of
personnel of all types and classes engaged in servicing and handling traffic
of all types and classes on the ground.
(b) This account shall be subdivided
as follows by Group II and Group III air
carriers:
26.1

General Aircraft and Traffic Handling
Personnel.

Record here compensation of personnel
handling or controlling aircraft and generally servicing or handling traffic of all
types and classes whose activities are not
identifiable with the particular activities
provided for in subaccounts 26.2, 26.3, or 26.4,
inclusive.
26.2

Cargo Handling Personnel.

Record here compensation of personnel
whose activities are identifiable with the
handling of passenger baggage, mail, express,
or freight.

Aircraft Control Personnel.

Record here compensation of personnel
whose activities are identifiable with the
protection and control of aircraft in flight
and in scheduling or preparing flight crews
for flight assignment.

Trainees and Instructors.

Record here the compensation of instructors and personnel in a training status.
28.2

Unallocated Shop Labor.

Record here the pay of direct maintenance
personnel which has not been assigned to
profit and loss account 25 Maintenance
Labor for time spent on specific maintenance projects, and vacation or sick leave
pay of direct maintenance personnel.

30 Communications Personnel.
Record here the compensation, including vacation and sick leave pay, of
personnel of all types and classes, including direct supervisory personnel,
engaged in local, interstation, or
groundair communication activities.
This account shall include compensation of personnel such as radio operators, telephone operators, switchboard
operators, teletype operators, messengers, etc.
31

Recordkeeping and Statistical Personnel.
Record here the compensation, including vacation and sick leave pay, of
personnel including supervisory personnel, whose primary duties relate to
maintaining records or conducting economic or other analyses required for
general management controls, such as
accountants, economists, statisticians,
maintenance record clerks, stores

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record clerks, stores receiving and
issuing clerks and file clerks. The account shall not include personnel engaged in documentation or other activities constituting an integral part of
activities encompassed by other objective accounts.
32

Lawyers and Law Clerks.

Record here the compensation, including vacation and sick leave pay, of
air carrier personnel engaged in law research or representing the air carrier
in matters of law.
33

Traffic Solicitors.

Record here the compensation, including vacation and sick leave pay, of
personnel engaged directly in solicitation of traffic of all types and classes.
This account shall not include compensation of traffic office personel engaged in soliciting activities incidental
to the documenting of sales and assigning aircraft space which shall be included in profit and loss account 26
Aircraft and Traffic Handling Personnel.
34

Purchasing Personnel.

(a) Record here the compensation, including vacation and sick leave pay, of
personnel, including direct supervisory
personnel, engaged in purchasing activities.
(b) This account shall include compensation of personnel engaged in
maintaining purchasing records but
shall not include compensation of personnel responsible for the control of inventories or stores which shall be included in objective account 31 Record
Keeping and Statistical Personnel. In
cases where the responsibility for
maintaining purchasing and stores records are inseparable, the related compensation may be accounted for in accordance with dominant responsibilities.
35

Other Personnel.

Record here the compensation, including vacation and sick leave pay, of
personnel whose activities are not
identifiable with activities provided for
in profit and loss accounts 21 through
34, inclusive.

36 Personnel Expenses.
(a) Record here expenses incurred by
officers, executives, directors and other
personnel, whether for the benefit of
the air carrier or for the private benefit of such persons, which are directly
or indirectly borne by the air carrier.
(b) This account shall include allowances in lieu of expenses as well as expenses incurred for travel, lodgings,
meals, entertainment of individuals or
groups of individuals, and membership
fees and dues in professional or social
clubs and associations.
(c) Records shall be maintained in a
conveniently accessible form which
will separately and clearly document
each charge to this account in terms of
its natural characteristics and contribution to the performance of the air
carrier’s transport operations. The records shall be maintained in such manner as will identify specifically the persons incurring the cost. Costs for
standby hotel or other facilities maintained for the air carrier’s personnel
generally need not be allocated among
the individuals using such facilities;
however, sufficiently detailed records
are required to identify the use made of
such facilities by each individual.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–948, 41 FR 12295, Mar. 25, 1976]

37 Communications Purchased.
Record here expenses, including related taxes, incurred for rental of communication services and for communication services of all types and classes not provided by personnel of the air
carrier, such as telegraph, telephone,
teletype, private line services, and
charges for communication services
from organizations operated jointly
with associated companies or others.
38 Light, Heat, Power and Water.
Record here charges related to the
provision of light, heat, power and
water including related taxes.
39 Traffic Commissions.
(a) Record here charges by others, including associated companies, for commissions arising from sales of transportation. Commissions, fees or other
charges incurred for general agency
services, as opposed to commissions

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Section 12

arising from sales of transportation,
shall not be included in this account
but in profit and loss account 43 General Services Purchased.
(b) This account shall be subdivided
as follows by Group II and Group III air
carriers.
39.1

Commissions—Passenger.

Record here charges for commissions arising from sales of passenger transportation.
39.2

Commissions—Property.

Record here charges for commissions arising from sales of nonpassenger transportation.

40

Legal Fees and Expenses.

Record here expenditures incurred
for legal services by counsel retained
on a fee basis and related expenses reimbursed or borne directly by the air
carrier and other expenses incurred directly by the air carrier for legal supplies not obtainable from the air carrier’s general stationery stock. This
account shall not be charged with legal
fees or expenses incurred in connection
with claims occasioned by accidents or
other casualties. Such charges shall be
accumulated in balance sheet account
1890 Other Assets and cleared to profit
and loss account 58 Injuries, Loss and
Damage upon settlement of insurance
claims. Nor should this account include
fees or expenses related to developmental projects. Such expenses shall be
included, as appropriate, in profit and
loss account 89.9 Other Miscellaneous
Nonoperating Debits or balance sheet
account 1830 Unamortized Developmental and Preoperating Costs.
[ER–980, 42 FR 37, Jan. 3, 1977]

41

Professional and Technical Fees
and Expenses.

Record here fees and expenses, other
than legal fees and expenses, incurred
for outside professional and technical
services which are reimbursed or borne
directly by the air carrier. This account shall not include fees or expenses
related to developmental projects.
Such expenses shall be included, as appropriate, in profit and loss account
89.9 Other Miscellaneous Nonoperating
Debits or balance sheet account 1830

Unamortized
Developmental
Preoperating Costs.
[ER–980, 42 FR 37, Jan. 3, 1977]

43 General Services Purchased.
(a) Record here charges for services
performed for the air carrier by outside
and associated companies which are
not identifiable with services provided
for in profit and loss accounts 37
through 41, inclusive, or which are not
expressly identified with other objective expense accounts.
(b) Charges from outside and associated companies for services provided
the air carrier under aircraft interchange agreements or other agreements embracing a complete activity
or service, such as the operating of
jointly used ground facilities, shall be
included in this account for each operating function to which the services
contribute. Charges for providing aircraft capacity, including charges for
depreciation and interest on the capital related to the flight equipment
provided, shall be included in function
5100 Flying Operations.
(c) This account shall be subdivided
by each air carrier group, as follows:
GROUP II AND GROUP III AIR CARRIERS
43.1 Airframe and Other Flight Equipment
Repairs.
Record here charges for maintenance or repair of airframes and spare parts related to
airframes owned or leased by the air carrier.
Charges for maintenance or repair of other
flight equipment (including instruments)
owned or leased by the air carrier, excluding
aircraft engines and spare parts related to
aircraft engines, shall also be recorded here.
Instruments shall include all gauges, meters,
measuring devices, and indicators, together
with appurtenances thereto for installation
in aircraft and aircraft engines, which are
maintained separately from airframes and
aircraft engines. Charges by outside and associated companies for maintenance of flight
equipment provided under aircraft interchange agreements shall not be included in
this subaccount but in subaccount 43.7 Aircraft Interchange Charges.
43.2

Aircraft Engine Repairs.

Record here charges for maintenance of repair or aircraft engines, including spare
parts related to aircraft engines owned or
leased by the air carrier. Charges by outside
and associated companies for maintenance of
aircraft engines provided under aircraft

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interchange agreements shall not be included in this subaccount but in subaccount
43.7 Aircraft Interchange Charges.
GROUP I AIR CARRIERS
43.6

[Amdt. 241–56, 52 FR 9129, Mar. 23, 1987]

Flight Equipment Repairs.

Record here charges for maintenance or repair of flight equipment of all types and
classes owned or leased by the air carrier.
Charges by outside and associated companies
for maintenance of flight equipment provided under aircraft interchange agreements
shall not be included in this subaccount but
in subaccount 43.7 Aircraft Interchange
Charges.
ALL AIR CARRIER GROUPS
43.7

Aircraft Interchange Charges.

Record here charges by outside and associated companies for providing aircraft capacity or services related to the direct operation
or maintenance of flight equipment under
aircraft interchange agreements.
43.8

General Interchange Service Charges.

Record here charges by outside and associated companies for services provided the air
carrier under aircraft interchange agreements, other than charges related to the direct operation or maintenance of flight
equipment, including all charges for maintenance and repair of group properties, as well
as fees or charges for traffic solicitation and
sales, or supervision and administration covered by the aircraft interchange agreements.
Charges for depreciation or interest on capital related to flight equipment provided
under interchange agreements shall not be
included in this subaccount but in subaccount 43.7 Aircraft Interchange Charges.
43.9

subfunction 5200 Direct Maintenance; and
services received in the repair of maintenance buildings and equipment shall be
charged to subfunction 5300 Maintenance
Burden.

Other Services.

Record here charges for maintenance and
repair of ground property and equipment of
all types and classes and other charges for
services performed by outside and associated
companies not provided for elsewhere. This
subaccount shall include only those charges
for services not provided for elsewhere in
profit and loss accounts 37 to 41, inclusive,
and subaccounts 43.1 to 43.8, inclusive, embracing a complete activity or service provided by outside and associated companies
such as the operation of traffic offices or
other facilities used jointly with the air carrier which do not represent reimbursement
of specific expense elements incurred expressly for the benefit of the air carrier. Reimbursement of expenses incurred expressly
for the benefit of the air carrier shall be entered in appropriate personnel compensation
or other objective expense accounts. The
cost of services received in the repair of general ground properties shall be charged to

44 Landing Fees.
Record here the charges and fees incurred for landing of aircraft while in
line operation.
45 Aircraft Fuels and Oils.
(a) Record here the cost of fuels and
oils issued from stocks of the air carrier, or delivery directly by others, to
aircraft for use in flight operations.
Adjustments of inventories of aircraft
fuel and oil shall also be entered in this
account. The cost of fuels and oils used
in repairs and maintenance services
and nonrefundable fuel and oil taxes
shall not be included in this account
but in profit and loss accounts 49 Shop
and Servicing Supplies and 69 Taxes—
Other than Payroll, respectively.
(b) This account shall be subdivided
as follows by Group II and Group III air
carriers:
45.1

Aircraft Fuels.

Record here the cost of fuels used in flight
operations.
45.2 Aircraft Oils.
Record here the cost of oils used in flight
operations.

46 Maintenance Materials.
(a) Record here the cost of materials
and supplies consumed directly in specific property and equipment maintenance projects.
(b) This account shall be subdivided
as follows:
GROUP II AND GROUP III AIR CARRIERS
46.1

Materials—Airframes and Other Flight
Equipment.

Record here the cost of materials and supplies consumed directly in maintenance of
airframes and spare parts related to airframes. Other flight equipment (including instruments), excluding aircraft engines and
spare parts related to aircraft engines, shall
also be recorded here. Instruments shall include all gauges, meters, measuring devices,
and indicators, together with appurtenances
thereto for installation in aircraft and aircraft engines, which are maintained separately from airframes and aircraft engines.

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46.2

Section 12

Materials—Aircraft Engines.

Record here the cost of materials and supplies consumed directly in maintenance of
aircraft engines and spare parts related to
aircraft engines.
GROUP I AIR CARRIERS
46.6

Materials—Flight Equipment.

Record here the cost of materials and supplies consumed directly in the maintenance
of flight equipment of all types and classes.
ALL AIR CARRIER GROUPS
46.9

Materials—Ground Property and
Equipment.

Record here the cost of materials and supplies consumed directly in the maintenance
of ground property and equipment of all
types and classes. The cost of materials and
supplies consumed in the repair of general
ground properties shall be charged to subfunction 5200 Direct Maintenance and materials and supplies consumed in the repair of
maintenance buildings and equipment shall
be charged to subfunction 5300 Maintenance
Burden.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–1401, 50 FR 245, Jan. 3, 1985]

47 Rentals.
Record here rentals, fee, or charges
incurred in the use of property and
equipment provided by others. When a
lease arrangement provides that the
amounts paid include charges for maintenance, insurance, or taxes, the
amounts related thereto shall not be
recorded in this account but in the appropriate expense account to which related.
49 Shop and Servicing Supplies.
Record here the cost of supplies and
expendable small tools and equipment
used in maintaining, servicing and
cleaning property or equipment the
cost of which cannot be directly assigned to a specific job or type of work.
50

Stationery, Printing and Office
Supplies.
Record here the cost of stationery
and forms used by the air carrier including the cost of engineering and
shipping supplies.
51 Passenger Food Expense.
(a) Record here the cost of food and
refreshments served passengers except

food costs arising from interrupted
trips.
(b) If the air carrier prepares its own
food, the initial cost and expenses incurred in the preparation thereof shall
be accumulated in a clearly identified
clearing account through which the
cost of food shall be cleared to this account, to profit and loss account 36
Personnel Expenses, and to profit and
loss account 10 Hotel, Restaurant and
Food Service on bases which appropriately allocate the cost of food
served passengers, the cost of food provided employees without charge and
the cost of food sold.
53

Other Supplies.

Record here the cost of supplies consumed and not provided for otherwise.
54

Inventory Adjustments.

Record here adjustments for overage,
shortage or shrinkage of inventories
carried in balance sheet account 1300
Spare Parts and Supplies. Adjustment
of aircraft fuel and oil inventories due
to retroactive price increases and decreases shall not be included in this account but in profit and loss account 45
Aircraft Fuels and Oils. Gains or losses
from retirements of materials and supplies shall not be recorded in this account but in profit and loss account
88.5 Capital Gains and Losses—Operating Property.
[ER–980, 42 FR 37, Jan. 3, 1977]

55

Insurance—General.

Record here the cost of public liability and property damage insurance and
all other general insurance except insurance covering liability for injuries,
loss, and damage to passengers and
cargo, and insurance carried for the
protection or welfare of employees.
[ER–948, 41 FR 12295, Mar. 25, 1976]

56

Insurance—Traffic Liability.

Record here the cost of purchased insurance covering liability for injuries,
loss and damage to passengers and
cargo.
[ER–980, 42 FR 37, Jan. 3, 1977]

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57

14 CFR Ch. II (1–1–05 Edition)
61

Employee Benefits and Pensions.

(a) Record here all costs for the benefit or protection of employees including all pension expenses whether for
payments to or on behalf of retired employees or for accruals or annuity payments to provide for pensions; and all
expenses for accident, sickness, hospital, and death benefits to employees
or the cost of insurance to provide
these benefits. Include, also, expenses
incurred in medical, educational, or
recreational activities for the benefit
of employees. Do not include vacation
and sick leave pay, or salaries of doctors, nurses, trainees, or instructors,
which shall be recorded in the regular
salary accounts.
(b) [Reserved]
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 37, Jan. 3, 1977; ER–1188,
45 FR 48871, July 22, 1980]

58

Injuries, Loss and Damage.

Record here the remainder of gains,
losses or costs resulting from accidents, casualties or mishandlings, after
offsetting insurance recoveries, as accumulated until finally determined in
balance sheet account 1890 Other Assets and Deferred Charges. This account shall not include gains or losses
from retirement of property and equipment resulting from casualties. Such
gains or losses shall be recorded in appropriate capital gains or losses accounts.

59

Schedules and Timetables.

Record here the production and distribution cost, excluding compensation
of air carrier personnel, of all operating schedules, timetables, circulars
and related quick reference charts.
[ER–1401, 50 FR 245, Jan. 3, 1985]

60

Advertising.

Record here the cost, excluding compensation of air carrier personnel, of
all space, direct mail, spot and other
advertising for the purpose of increasing air travel, disseminating air travel
information and publicizing services
offered by the air carrier.

Exchange

Gains

[Amdt. 241–58, 54 FR 5596, Feb. 6, 1989]

62

Other Promotional and Publicity
Expenses.

Record here the costs, excluding
compensation of air carrier personnel,
of producing and distributing publicity
releases and other expenses, not
chargeable to profit and loss accounts
59 and 60, incurred for the purpose of
publicizing or improving the public relations of the air carrier generally.
63

Interrupted Trips Expense.

Record here expenses allowed or paid
for the care and serving of passengers
because of unscheduled interruptions
in passenger journeys. Transportation
refunds and the cost of forwarding traffic by surface common carrier or otherwise as a result of such interruptions
shall not be charged to this account
but to the appropriate operating revenue account.
Memberships.

Record here the cost of membership
dues in trade associations, chambers of
commerce, or other business associations and organizations together with
special assessments related thereto.
65

Corporate and Fiscal Expenses.

Record here corporate and fiscal fees
and expenses of the air carrier and all
expenses in connection with exchange
and transfer of capital stock excluding
expenses in connection with original
issuance of capital stock.
66

Uncollectible Accounts.

Record here losses from uncollectible
accounts and allowance provisions and
adjustments thereto, for such losses.

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Record here gains or losses from
transactions involving currency translations resulting from normal, routine,
current fluctuations in rates of foreign
exchange. Gains or losses of a nonroutine abnormal character and gains or
losses which arise from long-term debt
principal and interest transactions
shall not be entered in this account but
in profit and loss account 85, Foreign
Exchange Gains and Losses.

64

[Amdt. 241–58, 54 FR 5596, Feb. 6, 1989]

Foreign
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When allowances for uncollectible accounts are established, losses as realized shall be charged against such allowances and shall not be charged to
this account.
[ER–980, 42 FR 37, Jan. 3, 1977]

67 Clearance, Customs and Duties.
Record here clearance, customs, duties and brokerage fees and charges applicable to clearing aircraft and traffic.
68 Taxes—Payroll.
Record here all taxes levied against
the air carrier based upon or directly
relating to compensation of personnel.
69 Taxes—Other Than Payroll.
(a) Record here all taxes levied
against the air carrier not otherwise
provided for including nonrefundable
aircraft fuel and oil taxes. Interest and
penalties on delinquent taxes shall not
be charged to this account but to profit
and loss accounts 82 Other Interest and
89.9 Other Miscellaneous Nonoperating
Debits, respectively.
(b) Entries to this account shall
clearly reveal each kind of tax and the
governmental agency to which paid or
payable.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 37, Jan. 3, 1977]

71 Other Expenses.
Record here all expenses ordinarily
associated with air transportation and
its incidental services not provided for
otherwise.
72 Aircraft Overhauls.
(a) Record here airframe and aircraft
engine overhauls of the current period
which are transferred to balance sheet
subaccounts 1601.2 Unamortized Airframe Overhauls or 1602.2 Unamortized
Aircraft Engine Overhauls. This account shall also include the amount of
deferred overhauls costs being amortized for the current period. For carriers which elect to continue accruing
for aircraft overhauls for aircraft types
acquired before January 1, 1976, as well
as for other aircraft of the same type
acquired after January 1, 1976, the related provisions and charges shall be
recorded in the appropriate subaccounts of this account.

(b) This account shall be subdivided
as follows by all carrier groups:
72.1

Airworthiness Allowance Provisions—
Airframes.

Record here current provisions for effecting an equitable distribution of airframe
overhaul costs between different accounting
periods. Record here also credits for airframe
overhaul costs incurred in the current period
which have been charged against related airworthiness allowances.
72.3 Airframe Overhauls Deferred.
Record here airframe overhauls of the current period transferred to subaccount 1601.2,
Unamortized Airframe Overhauls, and the
amount of deferred airframe overhaul costs
amortized for the current period.
72.6

Airworthiness Allowance Provisions—
Aircraft Engines.

Record here current provisions for effecting an equitable distribution of aircraft engine overhauls costs between different accounting periods. Record here also credits
for aircraft engine overhaul costs incurred in
the current period which have been charged
against related airworthiness allowances.
72.8 Aircraft Engine Overhauls Deferred.
Record here airframe overhauls of the current period transferred to subaccount 1602.2,
Unamortized Aircraft Engine Overhauls, and
the amount of deferred aircraft engine overhaul costs amortized for the current period.
[ER–948, 41 FR 12295, Mar. 25, 1976, as amended by ER–1401, 50 FR 245, Jan. 3, 1985]

73

Provisions for Obsolescence and
Deterioration—Expendable Parts.
(a) Where allowances for loss in value
of flight equipment expendable parts
are established, provisions for accruals
to such allowances shall be charged to
this account and credited to balance
sheet account 1311 Allowance for Obsolescence in accordance with the provisions of that account.
(b) This account shall be subdivided
as follows by all air carrier groups:
73.1

Current provisions.

Record here provisions during the current
period for losses in value of expendable parts.
73.2

Inventory decline credits.

Record here credits applicable to the current period for any adjustments for excess
inventory allowance levels determined pursuant to section 6–1311.
[ER–980, 42 FR 37, Jan. 3, 1977]

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74 Amortization.
(a) Record here amortization of deferred changes attaching to the air
transportation services conducted by
the air carrier which are not prepayments of recurrent expenses ordinarily
requiring expenditures of working capital within one year.
(b) This account shall be subdivided
as follows by all air carrier groups:

sheet account 1607 Improvements to Leased
Flight Equipment (exclusive of capitalized
overhauls accounted for on a deferral and
amortization basis) and balance sheet subaccount 1608.9 Other Parts and Assemblies.
Group I air carriers shall also include in this
subaccount provisions for depreciation of
property carried in balance sheet account
1608 Flight Equipment Rotable Parts and Assemblies.

Developmental and Preoperating Expenses

This classification is established only for
purposes of control by the BTS and shall include all charges to operating expenses for
depreciation of flight equipment of all types
and classes.

74.1

Record here amortization of the cost of
projects carried in balance sheet account
1830
Unamortized
Developmental
and
Preoperating Costs.
74.2

75.8

Other Intangibles.

Record here mortization of the cost of intangibles not provided for otherwise.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 38, Jan. 3, 1977; Amdt.
241–58, 54 FR 5596, Feb. 6, 1989]

75 Depreciation.
(a) Record here provisions for depreciation of property and equipment carried in balance sheet accounts 1601
through 1640, inclusive.
(b) This account shall be subdivided
as follows:
ALL AIR CARRIER GROUPS
75.1

Depreciation—Airframes.

Record here provisions for depreciation of
property and equipment carried in balance
subaccount 1601.1 Airframes.
75.2

GROUP II AND GROUP III AIR CARRIERS
Depreciation—Airframe Parts.

Record here provisions for depreciation of
spare airframe instruments and parts carried
in balance sheet subaccount 1608.1 Airframe
Parts and Assemblies.
75.4

Depreciation—Aircraft Engine Parts.

Record here provisions for depreciation of
spare aircraft engine instruments and parts
carried in balance sheet subaccount 1608.5
Aircraft Engine Parts and Assemblies.
ALL AIR CARRIER GROUPS
75.5

Depreciation—Other Flight Equipment.

Record here provisions for depreciation of
property and equipment carried in balance

Depreciation—Flight Equipment.

Depreciation—Maintenance Equipment
and Hangars.

Record here provisions for depreciation of
maintenance property and equipment included in balance sheet accounts 1630 Equipment, 1639 Improvements to Leased Buildings and Equipment, and 1640.1 Maintenance
Buildings and Improvements.
75.9

Depreciation—General Ground Property.

Record here provisions for depreciation of
property and equipment included in balance
of property and equipment included in balance sheet accounts 1630 through 1640, exclusive of provision for depreciation of maintenance property and equipment included in
account 75.8.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–948, 41 FR 12296, Mar. 25, 1976; ER–
980, 42 FR 38, Jan. 3, 1977; 60 FR 66723, Dec. 26,
1995]

76

Depreciation—Aircraft Engines.

Record here provisions for depreciation of
property and equipment carried in balance
sheet subaccount 1602.1 Aircraft Engines.

75.3

75.6

Amortization
Leases.

Expense—Capital

(a) Record here amortization charges
applicable to assets recorded under
capital leases in Account 1695 — Leased
Property under Capital Leases.
(b) This account shall be subdivided
as follows by all air carrier groups:
76.1

Amortization—Capitalized Flight
Equipment.

Record here amortization charges applicable to flight equipment acquired under capital leases.
76.2

Amortization—Capitalized Other Property
and Equipment.

Record here the amortization charges applicable to property and equipment, other
than flight equipment, acquired under capital leases.
[ER–1401, 50 FR 245, Jan. 3, 1985]

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77

Section 14

Uncleared Expense Credits.

(a) Record here credits to operating
expenses, which have not been cleared
to the objective accounts to which applicable.
(b) Each air carrier shall credit, or
charge as appropriate, the objective account prescribed for each expense element which may be involved in distribution of expenses between separate
reporting entities or nontransport divisions of the air carrier. At the option
of the air carrier, either the individual
applicable objective accounts or this
account may be credited with amounts
capitalized, charged against incidental
services, or otherwise assigned to other
than separate operating entities of the
air carrier provided the aggregate credits to this account in each function do
not, for any accounting year, distort
the individual objective accounts of
the function to which related and all
expense credits applicable to complete
individual transactions are consistently credited either to this account or
the individual objective accounts to
which related. Each air carrier using
this account shall establish such standard practices as may be prescribed by
the BTS or, in the absence of such action by the Civil Aeronautics Board,
such standard practices as will prevent
credits to this account from significantly distorting the individual objective accounts of each function to which
related.
(c) This account shall not be credited
with amounts applicable to objective
accounts of the Flying Operations, Depreciation, and Direct Maintenance
functions. Credits applicable to such
functions shall be carried to the individual objective accounts to which applicable.
(d) This account shall be subdivided
as follows by all air carrier groups:
77.8

Uncleared Interchange Expense Credits.

Record here credits to operating expenses,
from operations performed for others under
aircraft interchange agreements, which have
not been cleared to the objective accounts to
which applicable.
77.9

Other Uncleared Expense Credits.

Record here credits to operating expenses,
from other than operations under aircraft
interchange agreements, which have not

been cleared to the objective accounts to
which applicable.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended at 60 FR 66723, Dec. 26, 1995]

78

Direct Maintenance—Flight Equipment.

This classification is established for
purposes of control by the BTS and
shall include all charges to operating
expenses for maintenance of flight
equipment of all types and classes.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended at 60 FR 66723, Dec. 26, 1995]

79

Applied Burden Debit/Credit.

(a) This classification is established
only for purposes of control by the BTS
and reporting on Form 41 by air carriers, and shall reflect all maintenance
burden applied in accordance with the
provisions of section 24, schedule P–5 of
this system of accounts and reports.
(b) This classification shall be subdivided as follows by all air carrier
groups:
79.6
79.8

Applied Burden—Flight Equipment.
Applied Burden—General Ground
Property.

[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–979, 38 FR 10926, May 3, 1973; 60 FR
66723, Dec. 26, 1995]

Section 14 Objective Classification—
Nonoperating Income and Expense
80

Interest Income.

Included under account 89 Other Nonoperating Income and Expense—Net.
[ER–1401, 50 FR 245, Jan. 3, 1985]

81

Interest on Long-term Debt and
Capital Leases.

(a) Record here interest expense applicable to long-term debt and capitalized leases.
(b) This account shall be subdivided
as follows by all air carrier groups:
81.1

Interest expense—long-term debt.

Record here interest on all classes of longterm debt. This includes interest expense applicable to all portions of long-term debt
which are classified as either current (Account 2000) or long-term (Account 2210) for
balance sheet classification purposes.

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14 CFR Ch. II (1–1–05 Edition)

Interest expense—capital leases.

81.2

Record here for all capitalized leases, that
portion of each lease payment which represents interest expense.
[ER–1013, 42 FR 37516, July 21, 1977]

82

Other Interest.

(a) This account shall be subdivided
as follows by all air carrier groups:
82.1

Interest Expense—Short-Term Debt.

Imputed Interest Capitalized—Credit.

Record here credits related to imputed interest capitalized and recorded in asset accounts.
83.2

Imputed Interest Deferred—Debit.

Record here debits related to imputed interest deferred in balance sheet account 2390,
Other deferred credits.
83.3

Income from Nontransport Ventures.
Included under account 89 Other NonOperating Income and Expense—Net.
[ER–980, 42 FR 38, Jan. 3, 1977]

87

Equity in Income of Investor Controlled Companies.
Included under account 89 Other Nonoperating Income and Expense—Net.
[ER–1401, 50 FR 245, Jan. 3, 1985]

89

Imputed Interest Deferred—Credit.

Record here periodic credits for imputed
interest, cleared to this account as the
amount of such interest in the asset accounts is amortized.
83.4

[Amdt. 241–58, 54 FR 5596, Feb. 6, 1989]

86

Record here interest on all classes of shortterm debt.
83.1

85 Foreign exchange gains and losses.
Record here gains and losses from
transactions involving currency translations resulting from nonroutine abnormal changes in rates of foreign exchange and gains or losses which arise
from translations of long-term debt
principal and interest transactions.

Interest Capitalized—Credit.

Record here interest which is capitalized
and recorded in asset accounts.

Other Nonoperating Income and
Expense—Net.
(a) Record here all debits and credits
of a nonoperating character which are
not otherwise provided for in this section.
(b) This account shall be subdivided
as follows by all air carrier groups:
80.0

84.1

Amortization of discount and expense on
debt.

Record here for all classes of debt the amortizations of discount and expense on shortterm and long-term obligations.
84.2

Amortization of premium on debt.

Record here for all classes of debt the amortizations of premium on short-term and
long-term obligations.

(b) [Reserved]
[ER–1401, 50 FR 245, Jan. 3, 1985, as amended
by Amdt. 241–58, 54 FR 5596, Feb. 6, 1989]

83

Capitalized Interest.

Included under account 82 Other Interest.
[ER–1401, 50 FR 245, Jan. 3, 1985]

84

Amortization of Debt Discount, Premium and Expense.

Included under account 82 Other Interest.
[ER–1401, 50 FR 245, Jan. 3, 1985]

Interest Income.

(a) Record here interest income from all
sources. This account shall include as an increase or reduction of interest received the
proportionate amortization of any discount
or premium on the purchase price of securities of others held by the air carrier.
(b) This account shall not include interest
on securities issued or assumed by the air
carrier and subsequently reacquired.
86.0

Income from Nontransport Ventures.

(a) Record here the gross revenues and expenses applicable to operations not reasonably considered as incidental to the commercial air transport services of the accounting
entity; rents from nonoperating properties
used by others; income or loss from nontransport divisions; and other income or loss
from activities of the air carrier which are
extraneous to the air transport and incidental services of the accounting entity.
(b) This account shall include revenues and
expenses applicable to nonscheduled transport services performed for the defense establishment when separate reports for such
services are required in accordance with section 21 ‘‘Introduction to System of Reports.’’
Where the foregoing transport services are

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Office of the Secretary, DOT

Section 14

not required to be separately reported, gross
revenues from such services shall be included
in profit and loss account 07 Charter, or
other appropriate revenue account, and gross
expenses shall be included in the appropriate
operating expense functions.
Equity in Income of Investor Controlled
Companies.

87.0

Record here the equity in the current earnings or losses of investor controlled companies. Dividends declared on the stock of such
companies shall not be included in this account as income but shall be entered in balance sheet subaccount 1510.1 Investments in
Investor Controlled Companies as a return
on investment.
88.1

Intercompany Transaction Adjustment—
Credit.

Record here all intercompany credits for
any differences between amounts at which
transactions between the air carrier and its
nontransport divisions or associated companies are initially recorded and are to be settled.
88.2

Dividend income.

Record here income from dividends declared on stocks of other than investor controlled companies. Dividends declared on
stock of investor controlled companies shall
not be included in this account but shall be
entered in balance sheet subaccount 1510.1
Investments in Investor Controlled Companies.
88.3

Net Unrealized Gain or Loss on
Marketable Equity Securities.

Record here the net unrealized gain or loss
on the valuation of marketable equity securities.
88.4

Net Realized Gain or Loss on Marketable
Equity Securities.

Record here the net realized gain or loss on
the valuation of marketable equity securities.
88.5

Capital gains and losses—operating
property.

Record here gains or losses on retirements
of operating property and equipment, flight
equipment expendable parts, or miscellaneous materials and supplies sold or otherwise retired in connection with a general retirement program as opposed to incidental
sales performed as a service to others.
88.6

Capital gains and losses—other.

Record here gains or losses not required to
be reported in accounts 88.3, 88.4 and 88.5
such as gains or losses on retirement of nonoperating property and equipment, investments in other than marketable equity secu-

rities, and the transfer of assets in a troubled debt restructuring.
88.7

Unapplied cash discounts.

Record here cash discounts on routine purchases of materials, repair parts or supplies.
Cash discounts on classes of assets included
in property and equipment accounts shall
not be recorded in this account but shall be
applied as a reduction of the cost of such accounts.
88.9 Other miscellaneous nonoperating credits.
Record here all credits of a nonoperating
character not provided for otherwise, such as
royalties from patents, gains from reacquisition and retirement or resale of debt securities issued by the air carrier, and gains resulting from troubled debt restructurings.
89.1 Intercompany Transaction Adjustment—
Debit.
Record here all intercompany debits for
any differences between amounts at which
transactions between the air carrier and its
nontransport divisions or associated companies are initially recorded and are to be settled.
89.9 Other Miscellaneous Nonoperating Debits.
Record here all debits of a nonoperating
character not provided for otherwise, such as
the following:
(a) Fines or penalties imposes by governmental authorities;
(b) Costs associated with employment discrimination that include the following:
(1) Fines or penalties paid by the carrier as
a result of a judicial or administrative decree; or the amount paid to the complainant
in settling or securing a consent decree;
(2) Back pay awards as a result of a judicial or administrative decree or a compromise settlement regardless of admission
of guilt;
(3) Attorneys’ fees or court costs awarded
to the complainant by a judicial or administrative decree or as a result of a compromise
settlement regardless of admission of guilt;
(4) The fees of outside legal counsel or of
experts retained in the unsuccessful defense
of a discrimination suit or in securing a compromise settlement or consent decree, unless
the amounts attributable to the discrimination are not reasonably identifiable; or
(5) Any other expenses, such as employee
salaries, resulting from employment practices that were found to be discriminatory or
that were the subject of a compromise settlement or consent decree where the amounts
attributable to discrimination are reasonably identifiable.
(c) Amortization expense attributable to
capital leases recorded in balance sheet Account 1795, Leased Property under Capital
Leases;

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Section 15

14 CFR Ch. II (1–1–05 Edition)

(d) Costs related to property held for future use;
(e) Donations for charitable, social or community welfare purposes;
(f) Losses on reacquired and retired or resold debt securities of the air carrier;
(g) Losses resulting from troubled debt
restructurings;
(h) Losses on uncollectible nonoperating
receivables; or
(i) Accruals to allowance for uncollectible
nonoperating receivables.
(Secs. 204, 404, 407, and 1002 of the Federal
Aviation Act of 1958, as amended, 72 Stat.
743, 760, 766, 788, (49 U.S.C. 1324, 1374, 1377,
1482))
[ER–980, 42 FR 38, Jan. 3, 1977, as amended by
ER–1013, 42 FR 37516, July 21, 1977; ER–1027,
42 FR 60128, Nov. 25, 1977; ER–1076, 43 FR
46296, Oct. 6, 1978; ER–1401, 50 FR 245, Jan. 3,
1985; Amdt. 241–58, 54 FR 5596, Feb. 6, 1989]

Section 15 Objective Classification—
Income Taxes for Current Period
91 Provision for Income Taxes.
(a) Record here quarterly provisions
for accruals of Federal, State, local,
and foreign taxes based upon net income, computed at the normal tax and
surtax rates in effect during the current accounting year. In general, this
account shall reflect provisions within
each period for currently accruing tax
liabilities as actually or constructively
computed on tax returns, and any subsequent adjustments. This account
shall include credits for refund claims
arising from the carryback of losses in
the year in which the loss occurs, credits for the carry-forward of losses in
the year to which the loss is carried,
and investment tax credits in the year
in which each credit is utilized to reduce the liability for income taxes.
(b) Income taxes shall be allocated
among the transport entities of the air
carrier, its nontransport divisions, and
members of an affiliated group. Under
circumstances in which income taxes
are determined on a consolidated basis
by an air carrier and other members of
an affiliated group, the income tax expense to be recorded by the air carrier
shall be the same as would result if determined for the air carrier separately
for all time periods, except that the tax
effect of carryback and carryforward
operating losses, investment tax credits, or other tax credits generated by
operations of the air carrier shall be re-

corded by the air carrier during the period in which applied in settlement of
the taxes otherwise attributable to any
member, or combination of members,
of the affiliated group. Any difference
between the income tax so recorded
and the amount at which settlement is
to be made shall be recorded in subaccount 88.1 Intercompany Transaction
Adjustment—Credit or in subaccount
89.1 Intercompany Transaction Adjustment—Debit, as is appropriate.
(c) This account shall be subdivided
as follows by all carrier groups:
Income Taxes Before Investment Tax
Credits.

91.1

Record here accruals of income taxes based
upon taxable income of the period.
91.2 Investment Tax Credits Utilized.
Record here investment tax credits utilized
to reduce the accrued liability for income
taxes.
[Amdt. 241–58, 54 FR 5596, Feb. 6, 1989]

92

Provisions
Taxes.

for

Deferred

Income

(a) Record here income tax debits and
credits deferred in accordance with the
provisions of balance sheet account
2340 Deferred Income Taxes for all material timing differences.
(b) This account shall be subdivided
as follows by all air carrier groups:
92.1

Current Provisions for Deferred Taxes.
92.2

Application of Taxes Deferred.

92.3 Adjustments of Deferred Taxes.
[ER–948, 41 FR 12296, Mar. 25, 1976]

93

Investment Tax Credits Deferred
and Amortized.

(a) Record here investment tax credits of the current period which are
transferred to balance sheet account
2345 Deferred Investment Tax Credits
in accordance with the provisions of
balance sheet account 2130 Accrued
Taxes. This account shall also include
amounts for previously deferred investment tax credits amortized during the
current period.
(b) This account shall be subdivided
as follows by all carrier groups:

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Office of the Secretary, DOT
93.1

Sec. 19–1

Investment Tax Credits Deferred.

Amortization of Deferred Investment Tax
Credits.

93.2

[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by ER–980, 42 FR 39, Jan. 3, 1977]

Section 16 Objective Classification—
Discontinued Operations
95 Discontinued Operations.
(a) Record here the earnings (losses)
of discontinued nontransport operations. For the purposes of this system
of accounts and reports discontinued
operations shall refer to the disposal of
investor controlled companies and nontransport ventures whether sold, abandoned, spun off, or otherwise disposed
of. This account shall not include earnings or losses from discontinued transport or transport-related operations.
(b) This account shall be subdivided
as follows by all air carrier groups:
95.1

Income from Discontinued Operations.

Record here the results of operations of the
discontinued operations.
95.2

Loss of Disposal of Discontinued
Operations.

Record here the gain or loss on the disposal of an operation. If loss is anticipated it
should be provided for at the measurement
date. If gain is anticipated it should be recognized when realized.
[ER–948, 41 FR 12296, Mar. 25, 1976]

Section 17 Objective Classification—
Extraordinary Items
96 Extraordinary Items.
Record here material items characterized by their unusual nature and infrequent occurrence. Events or transactions which are material and either
unusual or nonrecurring, but not both,
shall be recorded in the profit and loss
accounts to which they relate and disclosed on BTS Form 41 Schedule P–2
with identification as to their nature
and financial effects.
[Amdt. 241–58, 54 FR 5596, Feb. 6, 1989, as
amended at 60 FR 66723, Dec. 26, 1995]

97

Income Taxes Applicable to Extraordinary Items.
Record here income taxes allocable
to items of income included in profit
and loss account 96 Extraordinary

Items and income tax assessments that
do not constitute ordinary adjustments
of a recurrent nature. Records supporting entries to this account shall be
maintained with sufficient particularity to identify the nature and gross
amount of each extraordinary credit
and each extraordinary debit.
[ER–948, 41 FR 12296, Mar. 25, 1976]

Section 18 Objective Classification—
Cumulative Effect of Changes in Accounting Principles
98

Cumulative Effect of Changes in
Accounting Principles.

Record here the difference between
the amount of retained earnings at the
beginning of the period of a change in
accounting principle and the amount of
retained earnings that would have been
reported at that date if the new accounting principle had been applied
retroactively for all periods which
would have been affected and by recognizing only the direct effects of a
change and the related income tax effect.
[ER–948, 41 FR 12296, Mar. 25, 1976]

OPERATING STATISTICS CLASSIFICATIONS
Section 19 Uniform Classification of
Operating Statistics
Sec. 19–1

Applicability.

(a) United States air carrier. Each
large certificated U.S. air carrier shall
file with the Department, on a monthly
basis, Form 41 Schedule T–100 ‘‘U.S.
Air Carrier Traffic and Capacity Data
By Nonstop Segment and On-flight
Market,’’ and summary data as prescribed in this section and in sections
22 and 25 of this part.
(b) Foreign (non-U.S.) air carrier: Each
foreign air carrier as required by part
217 of this chapter shall file Form 41
Schedule T–100(f) ‘‘Foreign Air Carrier
Traffic Data by Nonstop Segment and
On-flight Market.’’ The ‘‘Instructions
to Foreign Air Carriers for Reporting
Traffic Data on Form 41 Schedule T–
100(f),’’ (Instructions-Foreign Air Carriers) are included in the Appendix to
§ 217.10 of this chapter.

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Sec. 19–2

14 CFR Ch. II (1–1–05 Edition)

(c) Each U.S. air carrier shall use
magnetic computer tape or IBM compatible disk for transmitting the prescribed data to the Department. Upon
good cause shown, OAI may approve
the request of a U.S. air carrier, under
section 1–2 of this part, to use hardcopy
data input forms or submit data via email.
(d) On-flight market and nonstop segment detail data by carrier shall be
made public only as provided in section
19–6.
[53 FR 46305, Nov. 16, 1988; 53 FR 52404, Dec.
28, 1988, as amended at 60 FR 66723, Dec. 26,
1995; 67 FR 49223, July 30, 2002]

Sec. 19–2

Maintenance of data.

(a) Each air carrier required to file
Form 41 Schedule T–100 data shall
maintain its operating statistics, covering the movement of traffic in accordance with the uniform classifications prescribed. Codes are prescribed
for each operating element and service
class. All traffic statistics shall be
compiled in terms of each flight stage
as actually performed.
(b) Each carrier shall maintain data
applicable to the specified traffic and
capacity elements prescribed in section
19–5 and section 25, and by general
service classes prescribed in section 19–
4 of this part.
(c) Operating statistics shall be
maintained in accordance with the
type of record, either nonstop segment
or on-flight market.
Sec. 19–3 Accessibility and transmittal
of data.
(a) Each reporting air carrier shall
maintain its prescribed operating statistics in a manner and at such locations as will permit ready accessability
for examination by representatives of
the Department. The record retention
requirements are prescribed in part 249
of this chapter.
(b) [Reserved]
(c) Form 41 Schedule T–100 reports
shall be transmitted in accordance
with the standard practices established
by the Department, and must be received by the Department within 30

days following the end of each reporting month.
[53 FR 46305, Nov. 16, 1988; 53 FR 52404, Dec.
28, 1988, as amended at 67 FR 49223, July 30,
2002]

Sec. 19–4 Service classes.
The statistical classifications are designed to reflect the operating elements attributable to each distinctive
class of service offered. The operating
elements shall be grouped in accordance with their inherent characteristics as follows:
(a) Scheduled services. Scheduled services shall include traffic and capacity
elements applicable to air transportation provided pursuant to published
schedules and extra sections to scheduled flights. Scheduled Passenger/
Cargo (Service Class F) is a composite
of first class, coach, and mixed passenger/cargo service. The following
classifications shall be reported, as applicable:
U.S. Air Carriers:
K—Scheduled Services (F+G)
F—Scheduled Passenger/Cargo
G—Scheduled All-Cargo
Foreign Air Carriers:
F—Scheduled Passenger/Cargo
G—Scheduled All-Cargo

(b)
Nonscheduled
services.
Nonscheduled services shall include all
traffic and capacity elements applicable to the performance of nonscheduled
aircraft charters, and other air transportation services not constituting an
integral part of services performed pursuant to published flight schedules.
The following classifications shall be
reported, as applicable:
U.S. Air Carriers:
V—Nonscheduled Services (L+N+P+R)
L—Nonscheduled Civilian Passenger/Cargo
P—Nonscheduled Civilian Cargo
N—Nonscheduled Military Passenger/Cargo
R—Nonscheduled Military Cargo
Foreign Air Carriers:
L—Nonscheduled Civilian Passenger Cargo
P—Nonscheduled Civilian All-Cargo Charters
Q—Nonscheduled Services (Other than
Charter)

(c) All Services. This classification
shall reflect, for the applicable elements, the aggregate amounts for all
services performed by the operating entity:

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Office of the Secretary, DOT

Sec. 19–5

U.S. Air Carriers:
Z—All Services (V+K)

Sec. 19–5 Air transport traffic and capacity elements.
(a) Within each of the service classifications prescribed in section 19–4,
Code

110
130
140
210
217
219
230
237
239
240
241
247
249
270
280
310
320
410
430
501
510
520
610
630
650

data shall be reported as applicable to
specified air transport traffic and capacity elements.
(b) These reported items are as follows:

Description

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

Segment

Carrier, carrier entity code ..............................................
Reporting period date ......................................................
Origin airport code ...........................................................
Destination airport code ..................................................
Service class code ..........................................................
Aircraft type code ............................................................
Revenue passengers enplaned ......................................
Revenue passengers transported ...................................
Revenue passenger-miles ...............................................
Revenue cargo tons enplaned ........................................
Enplaned freight ..............................................................
Enplaned mail ..................................................................
Revenue tons transported ...............................................
Transported freight ..........................................................
Transported mail .............................................................
Revenue ton-miles ..........................................................
Revenue ton-miles passenger ........................................
Revenue ton-miles freight ...............................................
Revenue ton-miles mail ...................................................
Available capacity payload ..............................................
Available ton-miles ..........................................................
Available seats, total .......................................................
Available seat-miles ........................................................
Revenue aircraft miles flown ...........................................
Revenue aircraft miles scheduled ...................................
Inter-airport distance .......................................................
Revenue aircraft departures performed ..........................
Revenue aircraft departures scheduled ..........................
Revenue aircraft hours (airborne) ...................................
Aircraft hours (ramp-to-ramp) ..........................................
Total aircraft hours (airborne) .........................................

S
S
S
S
S
S

Market

Computed by
DOT

M
M
M
M
M
M

S
CFD *
CFD *
M
M
CFD *
S
S
CFD *
CFD *
CFD *
CFD *
S
CFD *
S
CFD *
CFD *
CFD *
CFD *
S
S
S
S
S

* CFD = Computed by DOT from detail Schedule T–100 and T–100(f) data.

(c) These reported items are further
described as follows:
(1) Reporting period date. The year and
month or quarter to which the reported
data are applicable.
(2) Carrier, Carrier entity code. Each
foreign air carrier shall report its name
and code (assigned by DOT). Each U.S.
air carrier shall report its name and
entity code (a five digit code assigned
by DOT that identifies both the carrier
and its entity) for its particular operations. The Office of Airline Information (OAI) will assign or confirm codes
upon request; OAI’s address is in the
Appendix to section 25 of this part and
the Appendix to § 217.10 of this chapter.
(3) Service class code. The service class
codes are prescribed in section 19–4 of
this part. In general, classes are divided into two broad categories, either
K (scheduled) or V (nonscheduled),

where K=F+G for all carriers and
V=L+N+P+R for U.S. air carriers and
comprises L+P and Q for foreign air
carriers. Refer to section 19–4 for the
more information on service class
codes F, G, L, N, P, R and Q.
(4) Record type code. This code indicates whether the data pertain to nonstop segment (record type S) or onflight market (record type M).
(5) Aircraft type code. This code represents the aircraft types, as described
in the Appendix to section 25 of this
part.
(6) Origin, Destination airport code(s).
These codes represent the industry designators described in the Appendix to
section 25 of this part. A common private industry source of these industry
designator codes is the Official Airline
Guides (OAG). OAI will assign codes
upon request if not listed in the OAG.

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Sec. 19–5

14 CFR Ch. II (1–1–05 Edition)

(7) 110 Revenue passengers enplaned.
The total number of revenue passengers enplaned at the origin point of
a flight, boarding the flight for the
first time; an unduplicated count of
passengers in a market. Under the T–
100 system of reporting, these enplaned
passengers are the sum of the passengers in the individual on-flight markets. Report only the total revenue
passengers enplaned in item 110. For all
air carriers and all entities, item 110
revenue passengers enplaned is reported on Form 41 Schedule T–100 in
column C–1, as follows:
Col.
C–1 ...........

110

All carrier groups and entities
Revenue passengers enplaned.

(8) 130 Revenue passengers transported.
The total number of revenue passengers transported over single flight
stage, including those already on board
the aircraft from a previous flight
stage. Report only the total revenue
passengers transported in item 130. For
all air carriers and all entities, item
130 revenue passengers transported is
reported on Form 41 Schedule T–100 in
Column B–7, as follows:
Col.
B–7 ...........

130

All carrier groups and entities
Revenue passengers transported.

(9) 140 Revenue passenger-miles. Computed by multiplying the interairport
distance of each flight stage by the
number of passengers transported on
that flight stage.
(10) 210 Revenue cargo tons enplaned.
The total number of cargo tons enplaned. This data element is a sum of
the individual on-flight market figures
for each of the following categories: 217
Freight and 219 mail. This element represents an unduplicated count of the
revenue traffic in a market.
(11) 230 Revenue tons transported. The
number of tons of revenue traffic transported. This element is the sum of the
following elements: 231 Passengers
transported-total, 237 Freight, and 239
Mail.
(12) 240 Revenue ton-miles—total. Tonmiles are computed by multiplying the
revenue aircraft miles flown (410) on
each flight stage by the number of tons
transported on that stage. This element is the sum of 241 through 249.

(13) 241 Revenue ton-miles—passenger.
Equals the number of passengers times
200, times interairport distance, divided by 2000. A standard weight of 200
pounds per passenger, including baggage, is used for all operations and
service classes.
(14) 247 Revenue ton-miles—freight.
Equals the volume of freight in whole
tons times the interairport distance.
(15)
249
Revenue
ton-miles—mail.
Equals the volume of mail in whole
tons times the interairport distance.
(16) 270 Available capacity-payload.
The available capacity is collected in
pounds. This figure shall reflect the
payload or total available capacity for
passengers, mail and freight applicable
to the aircraft with which each flight
stage is performed.
(17) 280 Available ton-miles. The aircraft miles flown on each flight stage
multiplied by the available capacity on
the aircraft in tons.
(18) 310 Available seats. The number of
seats available for sale. This figure reflects the actual number of seats available, excluding those blocked for safety
or operational reasons. Report the
total available seats in item 310. For
all air carriers and all entities, item
310 available seats, total is reported on
Form 41 Schedule T–100 in column B–4,
as follows.
Col.
B–4 ...........

310

All carrier groups and entities
Available seats, total.

(19) 320 Available seat-miles. The aircraft miles flown on each flight stage
multiplied by the seat capacity available for sale.
(20) 410 Revenue aircraft miles flown.
Revenue aircraft miles flown are computed in accordance with the airport
pairs between which service is actually
performed; miles are generated from
the data for scheduled aircraft departures (Code 520) times the interairport
distances (Code 501).
(21) 430 Revenue aircraft miles scheduled. The number of revenue aircraft
miles scheduled. All such data shall be
maintained in conformity with the airport pairs between which service is
scheduled, whether or not in accordance with actual performance.
(22) 501 Interairport distance. The
great circle distance, in official statute

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Office of the Secretary, DOT

Section 19–6

miles as prescribed in part 247 of this
chapter, between airports served by
each flight stage. Official interairport
mileage may be obtained from the Office of Airline Information at the address included in section 25 of this part.
(23) Revenue aircraft departures performed. The number of revenue aircraft
departures performed.
(24) 520 Revenue aircraft departures
scheduled. The number of revenue aircraft departures scheduled, whether or
not actually performed.
(25) 610 Revenue aircraft hours (airborne). The elapsed time, computed
from the moment the aircraft leaves
the ground until its next landing.
(26) 630 Aircraft hours (ramp-to-ramp).
The elapsed time, computed from the
moment the aircraft first moves under
its own power from the boarding ramp
at one airport to the time it comes to
rest at the ramp for the next point of
landing. This data element is also referred to as ‘‘block’’ and block-to-block
aircraft hours.
(27) 650 Total aircraft hours (airborne).
The elapsed time, computed from the
moment the aircraft leaves the ground
until it touches down at the next landing. This includes flight training, testing, and ferry flights.
(28) 810 Aircraft days assigned to service—carrier’s equipment. The number of
days that aircraft owned or acquired
through rental or lease (but not interchange) are in the possession of the reporting air carrier and are available for
service on the reporting carrier’s
routes plus the number of days such
aircraft are in service on routes of others under interchange agreements. Includes days in overhaul, or temporarily
out of service due to schedule cancellations. Excludes days that newly acquired aircraft are on hand, but not
available for productive use, days
rented or leased to others (for other
than interchange) and days in possession but formally withdrawn from air
transportation service.
(29) 820 Aircraft days assigned to service—carrier’s routes. The same as ‘‘aircraft days assigned to service—carrier’s equipment,’’ but excluding the
number of days that the reporting carrier’s owned or rented equipment are in
the possession of others under interchange agreements and including the

number of days aircraft of others are in
the possession of the reporting air carrier under interchange agreements.
(30) 921 Aircraft fuels issued (gallons).
The amount of aircraft fuels issued, in
U.S. gallons, during the reporting period for both revenue and nonrevenue
flights.
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by Amdt. 241–58, 54 FR 7184, Feb. 17, 1989;
60 FR 66723, Dec. 26, 1995; 62 FR 6718, Feb. 13,
1997; 67 FR 49224, July 30, 2002]

Section 19–6
fic data.

Public disclosure of traf-

(a) Detailed domestic on-flight market data and nonstop segment data except military data shall be made publicly available after processing. Domestic data are defined as data from air
transportation operations from a place
in any State of the United States, the
District of Columbia, the Commonwealth of Puerto Rico and the Virgin
Islands, or a U.S. territory or possession to a place in any State of the
United States, the District of Columbia, the Commonwealth of Puerto Rico
and the Virgin Islands, or a U.S. territory or possession. Domestic military
operations are reported under service
codes N or R.
(b) Detailed international on-flight
market and nonstop segment data in
Schedule T–100 and Schedule T–100(f)
reports, except military data, shall be
publicly available immediately following the Department’s determination that the database is complete, but
no earlier than six months after the
date of the data. Military operations
are reported under service codes N or
R. Data for on-flight markets and nonstop segments involving no U.S. point
shall not be made publicly available for
three years. Industry and carrier summary data may be made public before
the end of six months or the end of
three years, as applicable, provided
there are three or more carriers in the
summary data disclosed. The Department may, at any time, publish international summary statistics without
carrier detail. Further, the Department
may release nonstop segment and onflight market detail data by carrier before the end of the confidentiality period as follows:

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Sec. 19–7

14 CFR Ch. II (1–1–05 Edition)

(1) To foreign governments as provided in reciprocal arrangements between the foreign country and U.S.
Government for exchange of on-flight
market and/or nonstop segment data
submitted by air carriers of that foreign country and U.S. carriers serving
that foreign country;
(2) To parties to any proceeding before the Department under Title IV of
the Federal Aviation Act of 1958, as
amended, as required by the Administrative Law Judge or other decisionmaker of the Department. Parties may
designate agents or consultants to receive the data in their behalf, provided
the agents or consultants agree to
abide by the disclosure restrictions.
Any data to which access is granted
pursuant to this provision may be introduced into evidence, subject to the
normal rules of admissibility of evidence.
(3) To agencies and other components
of the U.S. Government for their internal use only.
[Amdt. 241–59, 56 FR 2845, Jan 25, 1991, as
amended at 62 FR 6719, Feb. 13, 1997; 67 FR
49224, July 30, 2002]

Sec. 19–7 Passenger origin-destination
survey.
(a) All U.S. large certificated air carriers conducting scheduled passenger
operations (except helicopter carriers)
shall participate in a Passenger OriginDestination ( O & D) Survey covering
domestic and international operations,
as described in the instructions manual
entitled, Instructions to Air Carriers for
Collecting and Reporting Passenger Origin-Destination Survey Statistics (Appendix A to this section), and in Passenger
Origin-Destination Directives issued by
the Department’s Bureau of Transportation Statistics (BTS), Office of Airline Information (OAI). Copies of these
Instructions and Directives are provided
to each large carrier participating in
the Survey. Copies are also available
from the Office of Airline Information,
K–25, Room 4125, U.S. Department of
Transportation, 400 Seventh St., SW.,
Washington, DC 20590.
(b) Those participating air carriers
that have access to automatic data
processing (ADP) services shall utilize
magnetic tape, cartridge, floppy diskette or other ADP media for transmit-

ting the prescribed data. Those carriers
without ADP capability should contact
the Office of Airline Information for
further instructions ((202) 366–4373).
(c) A statistically valid sample of
light coupons shall be selected for reporting purposes. The sample shall consist of at least 1 percent of the total
lifted ticket flight coupons for all large
domestic markets listed in the Instructions and 10 percent for all others—including domestic and international
markets. The sample shall be selected
and reported in accordance with the requirements of paragraph (a) of their
section, except that the participating O
&
D
carriers
with
nonstandard
ticketing procedures, or other special
operating characteristics, may propose
alternative procedures. Such departures from standard O & D Survey
practices shall not be authorized unless
approved in writing by the Director,
Office of Airline Information under the
procedures in Sec. 1–2 of 14 CFR part
241. The data to be recorded and reported from selected lifted ticket flight
coupons, as stipulated in the Instructions and Directives shall include the
following data elements: Point of origin, carrier on each flight-coupon
stage, fare-basis code for each flightcoupon stage, points of stopover or
connection (interline and intraline),
point of destination, number of passengers, and total dollar value of ticket
(fare plus tax).
(d) Data covering the operations of
foreign air carriers that are similar to
the information collected in the Passenger Origin-Destination Survey are
generally not available to the Department, the U.S. carriers, or U.S. interests. Therefore, because of the damaging competitive impact on U.S. carriers and the adverse effect upon the
public interest that would result from
unilateral disclosure of the U.S. survey
data, the Department has determined
its policy to be that the international
data in the Passenger Origin-Destination Survey shall be disclosed only as
follows:
(1) To an air carrier directly participating in and contributing input data
to the Survey or to a legal or consulting firm designated by an air carrier to use on its behalf O & D data in

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Office of the Secretary, DOT

Sec. 19–7

connection with a specific assignment
by such carrier.
(2) To parties to any proceeding before the Department to the extent that
such data are relevant and material to
the issues in the proceeding upon a determination to this effect by the Administrative Law Judge or by the Department’s decision-maker. Any data
to which access is granted pursuant to
this section may be introduced into
evidence subject to the normal rules of
admissability of evidence.
(3) To agencies and other components
of the U.S. Government.
(4) To other persons upon a showing
that the release of the data will serve
specifically identified needs of U.S.
users which are consistent with U.S.
interests.

(5) To foreign governments and foreign users as provided in formal reciprocal arrangements between the foreign and U.S. governments for the exchange of comparable O & D data.
(e) The Department reserves the
right to make such other disclosures of
the O & D data as is consistent with its
regulatory functions and responsibilities.
APPENDIX A TO SEC. 19–7—INSTRUCTIONS TO
AIR CARRIERS FOR COLLECTING AND REPORTING PASSENGER ORIGIN-DESTINATION SURVEY STATISTICS
All questions, comments, extension and
waiver requests should be addressed to:
Office of Airline Information, K–25, Room
4125, U.S. Department of Transportation,
400 Seventh St., SW., Washington, DC
20590, Telephone (202) 366–9059.

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EC30SE91.007

165

Sec. 19–7

14 CFR Ch. II (1–1–05 Edition)
B. Narrative Description

A single O&D Survey is conducted continuously by the large U.S. certificated air carriers. Foreign air carriers do not directly
participate in the Survey, although some of
their data are captured in the Survey, since
passengers who share a ticketed itinerary between a U.S. carrier and a foreign carrier
may be sampled by the U.S. carrier. The authority for these instructions is found in 14
CFR part 241, section 19–7, and in the CAB
Sunset Act of 1984 (Pub. L. 94–443).
The Survey samples revenue passenger
trips moving in whole or in part on domestic
and/or international scheduled services of
the carriers participating in the Survey. In
general, these requirements do not apply to
small certificated, all-cargo and all charter
carriers.
The source documents for the Survey data
are passenger tickets. These data are collected from the ‘‘lifted’’ flight coupons of
tickets (a portion of a multi-part ticket
booklet of three 1 or more coupons, including
one for each stage of the passenger’s trip
itinerary which is lifted by the carrier as the
passenger boards a particular flight segment).
The Survey data are taken from the coupon that is lifted by a participating carrier,
unless it is apparent from the lifted coupon
that another participating carrier has already recorded and reported the data, in
which instance the ticket coupon is non-reportable for the second honoring/participating carrier. The complete passenger
itinerary, and related data on type of fare
and dollar value of the ticket, is recorded as
one entry from the sampled, reportable
flight coupon.
The recording of data from the sampled
flight coupon normally consists of transcribing the information exactly as indicated
on the ticket. The detail recorded for each
trip shows the complete routing from the origin city (airport code) to the destination
city (airport code) including, in sequence
from the origin, each point of transfer and
stopover (intraline and interline), the summarized fare-basis code shown for each flight
coupon stage of the itinerary, and the total
dollar value of the fare and tax for the entire
ticket.
Prior to 1987, the Survey was generally
based on a 10-percent sample of passenger
tickets. Beginning July 1, 1987, the Survey is
collected primarily on the basis of a stratified, scientific sample of at least 1 percent of
tickets in domestic major markets and 10
percent of tickets in all other domestic and
1 Each ticket booklet is comprised of one or
more flight coupons for passenger travel in a
city-pair market, plus a passenger coupon
(the traveler’s receipt) and the auditor coupon (for the carrier’s internal controls).

in all international city-pair markets. The
Survey data are taken from the selected
flight coupons of the tickets sampled: singlecoupon or double-coupon round trips in domestic major markets where the ticket serial number ends in double zero (00) and all
other ticket coupons ending in zero (0). This
procedure yields a ‘‘two-tiered’’ stratified
sample.
Group tickets are included on the basis of
a 10-percent sample when the number of passengers on such a group ticket is 10 or less.
Group tickets with more than 10 passengers
on each ticket are included on the basis of a
100 percent census, i.e., all such tickets are
sampled, regardless of serial number, and the
total data listed are conformed to a 10 percent sample for inclusion in the O&D Survey.
Following the selection of reportable flight
coupons and the recording of data, each participating carrier shall edit and summarize 2
the data into a quarterly report to the Department.
II. EFFECTIVE DATE OF INSTRUCTIONS
These data collection and reporting instructions are effective on and after July 1,
1987 and apply to all flight coupons lifted on
or after July 1, 1987.
III. CARRIERS PARTICIPATING IN SURVEY
A. Participating carriers. As defined in section 19–7 of the Department’s Economic Regulations (14 CFR part 241), the participants
in the O&D Survey include all large certificated air carriers conducting scheduled passenger services (except helicopter carriers).
These participating carriers collect and report data in accordance with these Instructions, and supplemental Passenger Origin-Destination Directives that may be issued periodically. The list of participating carriers will
be issued by reporting directive under the
authority in 14 CFR 385.27(b).
B. Amendments to list of participating carriers. As new carriers begin service, they will
be required to file O&D Survey Data. These
carriers will not be added to the participating carrier list automatically, but will be
added when the next annual review is made.
IV. SUBMISSION OF REPORTS
A. Period covered by reports. Reports are to
be filed for each calendar quarter of the year
as shown below:
2 These summarization procedures include
showing two or more passengers with the
same itinerary as one O&D record and compressing extremely lengthy itineraries (such
as around-the-world tickets) into a standard
trip stage length limit (which may be either
seven or twenty-three stages, at the carrier’s
option), as explained in Section V.D.

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Office of the Secretary, DOT
Report

Sec. 19–7

Time period covered

1st quarter ...............................
2nd quarter .............................
3rd quarter ..............................
4th quarter ..............................

Jan. 1 through Mar. 31.
Apr. 1 through June 30.
July 1 through Sept. 30.
Oct. 1 through Dec. 31.

B. Filing date for reports. Reports are to be
filed with the Department on or before the
dates listed below. The mailing address is on
the inside cover to these instructions.
Due date 1

Report
1st quarter ...............................................
2nd quarter ..............................................
3rd quarter ...............................................
4th quarter ...............................................

May 15
Aug. 15
Nov. 15
Feb. 15

1 Due dates falling on Saturday, Sunday or national holiday
will become effective the first following work day.

C. Format of report. The report may be submitted in any one of the following formats:
(1) ADP media including magnetic tapes
and floppy discs.3
(2) Hard copy BTS Form 2787, in typewritten form, for carriers that lack computer capability. Sample formats of the required data appear in Sections IX and XII.
Supplies of blank Form 2787 are available,
upon request, from the Director, Office of
Airline Information (address on inside
cover). Any reasonable facsimile of Form
2787 will be acceptable in lieu of Form 2787,
if approved in advance by the Director.
D. Number of copies of report to be filed. A
participating carrier shall file with the Department a single copy of its quarterly O&D
data report. When ADP submissions are
transmitted, the package is to contain a
transmittal letter describing the contents,
and stating the overall record and passenger
counts included in the submission. Each submission is to be labeled externally as to submitting carrier and time period of the O&D
Survey data.
E. Address for filing reports. Reports should
be submitted to the Director, Office of Airline Information (address on inside cover).
V. SELECTION OF SAMPLE AND RECORDING OF
DATA.4
A. Sampling Basis. Each participating carrier in this O&D Survey shall search all list3 Magnetic tapes, floppy discs and similar
media will be returned to the carriers, upon
request, following completion of the processing cycle by the Department.
4 Upon approval of the Director, Office of
Airline Information, carriers may continue
current reporting procedures (up to twentythree stages of a passenger flight) and may
report a uniform 10 percent sample of tickets
lifted (each zero ending lifted coupon) without reducing the sample size from 10 percent
to 1 percent for domestic major markets.
Note that the domestic major markets will

ed flight coupons, whether the coupons are
its own ticket stock or on the ticket stock of
another U.S. or foreign carrier (either standard IATA and ARC ticket stock or nonstandard ticket stock), and is to select for reporting purposes the following flight coupons:
(1) Major domestic markets. All single-passenger flight coupons that are either a single
flight coupon ticket or part of a round trip,
two coupon ticket where the ticket serial
number ends in the digits double-zero (00).
NOTE.—The list of major domestic markets
will be issued by reporting directive under
the authority in 14 CFR 385.27(b).
(2) International markets and all other domestic markets. (a) All single-passenger flight
coupons with ticket serial numbers ending
with the digit zero (0);
(b) Those group-ticket flight coupons with
10 or fewer passengers with ticket serial
numbers ending with the digit zero (0);
(c) Those group-ticket flight coupons with
11 or more passengers without regard to serial number; and
(d) Itineraries in major domestic markets
that comprise more than two coupons are
sampled on a uniform 10 percent basis, by selecting all ticket serial numbers ending with
the digit zero (0).
B. Selection of Reportable Flight Coupons.
The flight coupons identified above are to be
examined to isolate the reportable flight
coupons, i.e. coupons from which data are to
be recorded. Flight coupon data are reported
only by the first honoring and participating
carrier (operating carrier). Such carriers
shall report the required data for the entire
ticketed itinerary.
If a participating carrier has preceded an
examining carrier on any stage in the trip
itinerary, including any stage in a conjunction itinerary and any stage in a reissued
ticket (either before or after reissue) that
coupon is not reportable.
For conjunction tickets, the ticket number
for the first ticket booklet determines if the
conjunction tickets should be reported in the
Survey. Otherwise, conjunction tickets do
not require special treatment and are governed by the rules for regular tickets.
No adjustment is made in the Survey for
alterations or changes in the trip itinerary
subsequent to the stage covered by the reportable coupon.
C. Optional Use of Other Sampling Procedures.
be reviewed each year at June 30, based on
the prior 12 months O&D data, and the list
amended as necessary. The list could remain
static for more than a year, although it will
be reviewed annually. Necessary amendments will be effective on January 1 of the
following year.

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Sec. 19–7

14 CFR Ch. II (1–1–05 Edition)
(a) All entries for points (airport codes 5) in
an itinerary are to be recorded in three-letter airport code data to fit into the stagelength limitation (seven or twenty-three
stages at the carrier’s option), all airport
codes are to be reported, including data on
commuter, foreign, intra-state and other
carriers’ portions of itineraries. Normally
codes are recorded as they appear on the
ticket. However, if a code is obviously incorrect, record the correct code. For instance, if a
ticket is coded DCA-NYC or Washington/National to New York when the flight stage actually operated from Washington, Dulles to
Newark (EWR), record the correct airport
code. When only name spellings of a city appear on the ticket for multi-airport cities
(such as Washington, New York, San Francisco, or Los Angeles), record the specific
three letter airport code. In cases where two
airport codes are shown on the ticket for a
point, such as when the passenger arrives at
an airport such as San Francisco and departs
from another local airport such as Oakland,
record the code for the arrival airport, enter
a surface segment indicator (—) to the departure airport, and record the departure airport code. (When the surface portion is at
the beginning or end of an itinerary, the surface indicator is to be omitted). For example:

(1) Alternative sampling procedures or alternative O&D data systems may be proposed by participating carriers with nonstandard ticketing procedures, or other special operating characteristics. Data reported
under proposed alternative procedures must
approximate the usefulness and statistical
validity of the O&D Survey.
(2) Such departures from the prescribed
O&D Survey practices shall not be authorized unless approved in writing by the Director, Office of Airline Information (address inside front cover). The proposed alternative
O&D Survey procedures must be described in
detail in the letter requesting the waiver.
D. Recording of Data from Reportable Flight
Coupons. (1) The following items are to be reported from the reportable flight coupons:
(a) Point of origin,
(b) Operating carrier on each flight stage
(if unknown, identify ticketed carrier),
(c) Ticketed carrier on each flight stage,
(d) Fare-basis on each flight coupon, C, D,
F, G, X or Y,
(e) Points of stopover or connection (interline and intraline),
(f) Point of destination,
(g) Number of passengers, and
(h) Total dollar value of ticket (fare plus
tax and other charges, such as Passenger Facility Charges).
(2) The individual items are to be recorded
in the sequence of occurrence in the
itinerary as follows:
000001

UCA

Passenger(s)

Utica

YV

UA

Mesa
Operating
Carrier

Y

United
Ticketed
Carrier

JFK

Fare Code

TW

New York
Kennedy
Airport

TWA
Operating
Carrier

TW

X

TWA
Ticketed
Carrier

Fare Code

SURFACE TRANSPORTATION
SFO

(Blank space)

San Francisco

Operating Carrier

OAK
Oakland

UA

UA

United
Operating
Carrier

SLC
Salt Lake City

Ticketed Carrier
G

United
Ticketed
Carrier

LAX

Fare

NW

NW

D

Northwest
Operating
Carrier

Northwest
Ticketed
Carrier

Fare Code

DL

Los Angeles

PHX
Phoenix

5 Codes to be used are those appearing in
the Official Airline Guide at the time the data
are being recorded. If a code is not found in

DL

Delta
Operating
Carrier
AA

American
Operating
Carrier

Fare Code

Delta
Operating
Carrier

AA
American
Ticketed
Carrier

F
Fare Code

C

LAX

Fare Code

Los Angeles

the OAG, contact the Director, Office of Airline Information (address inside front cover).

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Office of the Secretary, DOT
JL

Sec. 19–7
JL

Japan Air Lines
Operating
Carrier

C

Japan Air Lines
Ticketed
Carrier

Fare Code

In the above example, the passenger trip
stages or segments are compressed into the
maximum of 7 stages so that several intermediate city-pairs (Los Angeles to Seattle to
Anchorage, or LAX—SEA—Anc) and the related carriers have not been recorded, as prescribed below in this Section V.D.(3)(e). In
addition, after the fourth city-pair (Los Angeles-Salt Lake City), the passenger trip
itinerary moves from the initial four-part
ticket booklet onto another ‘‘conjunction’’
ticket, and the summary fare code data are
not recorded beyond the initial four-part
ticket.
(b) All entries for operating and ticketed
carriers for a coupon stage of an itinerary
are to be recorded using two character IATAassigned or DOT codes, as in the above example. Note that the fare code summary was
properly inserted after the ticketed carrier’s
code, i.e., UA for United Air Lines and Y for
unrestricted coach class service. When a twocharacter carrier code is shown on the ticket, record that code for the ticketed carrier.
However, if a code is obviously incorrect,
record the correct carrier code. If the reporting carrier does not know the operating carrier on a downline code-share segment, it
would use the ticketed carrier’s code for
both the operating and ticketed carriers. The
reporting carrier is not responsible for knowing the operating carrier of a downline codeshare where it is not a party to the codeshare segment. Except for the infrequent
compression of data to fit into the stagelength limitation (7 or 23 stages at the carrier’s option), all carrier codes are to be recorded, including data on air taxis, commuters, intra-state, and other carrier portions of itineraries. On tickets involving
interchange service or other cooperative carrier arrangements, the juncture point(s)
where the passenger moves from one carrier
system to another is to be recorded as an intermediate point in the itinerary, even when
not shown on the ticket and even though the
flight may overfly the juncture point.
(c) Entries for fare-basis codes are to be
taken from the ‘‘fare basis’’ and ‘‘fare description’’ portions of the ticket and simplified into the appropriate category, as
shown below. No attempt shall be made to
determine and record fare-basis codes for
that portion of a conjunction ticket appearing in the ticket. Fare-basis codes are to be
recorded in one-character alphabetic codes.
The fare-basis codes are recorded as follows:
C—Unrestricted Business Class
D—Restricted Business Class

NRT
Tokyo Narita

04596
Dollars of Fare + Tax

F—Unrestricted First Class
G—Restricted First Class
X—Restricted Coach/Economy Class
Y—Unrestricted Coach/Economy Class
U—Unknown (This fare category is used
when none is shown on a ticket coupon, or
when a fare category is not discernible, or
when two or more carrier fare codes are
compressed into a single stage of a passenger trip).
(d) In recording the number of passengers,
each single-passenger ticket is to be recorded as one passenger. Tickets for infants
under two years of age not occupying a seat
are not to be counted. A revenue passenger is
defined in Section X.
For group tickets of 10 or fewer passengers
per ticket record the actual number of passengers on each ticket, i.e., either 2, 3, 4, 5, 6,
7, 8, 9 or 10. For group tickets with 11 or
more passengers (those sampled at a 100-percent rate) record the actual number of passengers traveling on each ticket, but keep
these entries separate from the group ticket
records with 10 or fewer passengers and from
the single-passenger ticket records. Group
tickets with 11 or more passengers are to be
sorted and summarized to combine all passengers for all itineraries which are identical
in every respect, i.e., points, carriers, fare
basis codes, and average dollar value (as defined in paragraph (e), below). The total
number of passengers on each summarized
record is to be divided by 10, rounding to the
nearest whole passenger. If the quotient ends
in 0.5 or more, raise to the next whole passenger. If the quotient ends in less than 0.5,
drop the fraction. These large group-ticket
records, after division by 10 for compatibility with the other data, are to be merged
with the single-passenger records and with
the group-ticket entries from tickets of 10 or
fewer passengers for the quarterly O&D Survey report.
(e) The total dollar value shall be taken
from the ‘‘Total’’ box on each ticket and
shall be the sum of the fare plus tax for the
entire ticket. Record this amount in whole
U.S. dollars, with the cents dropped. Do not
round cents to nearest whole dollar.
Amounts on tickets stated in foreign currency are to be converted to U.S. dollar
equivalents. For all group tickets, the dollar
value to be recorded shall be the average
amount per passenger, determined by dividing the total dollar value for the entire
group by the number of passengers on the
group ticket, dropping cents in the average
amount.

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(3) The length of the itineraries to be recorded
is limited to a maximum of seven stages or
twenty-three stages, at the carrier’s option.
This recognizes that the vast majority of
tickets sampled have seven stages or fewer
and that the rare occurrences of extremely
lengthy itineraries do not impact the overall
Survey results enough to justify their reporting burden. Therefore, trips longer than
these limits are compressed to fall within the
stated maximums. The ticketed origin and
destination are retained, but the intermediate
routing is compressed by applying the following rules, in sequence:
(a) Combine any contiguous open, unknown carrier, or surface stages eliminating
the connecting point, and ignoring the farebasis codes, if different:
(b) Combine any contiguous stages via the
same non-U.S. carrier, eliminating the connecting point, and ignoring the fare-basis
codes, if different;
(c) Combine any contiguous stages via different non-U.S. carrier, making the carrier
‘‘UK’’, eliminating the connecting point, and
ignoring fare-basis codes, if different:
(d) Combine any contiguous stages via the
same U.S. carrier, eliminating the connecting
point, and ignoring the fare-basis codes, if
different, and;
(e) If the trip, after applying the four steps
above, is still too long, record the compressed routing through to the stage length
limitation city (seventh or twenty-third
city), enter UK as the final carrier, and then
record the ticketed destination as the next
(the 8th or 24th) city.
VI. SUMMARIZATION OF RECORDED DATA
A. General. Prior to the submission of each
quarterly report to the Department, each
carrier is to summarize the data in accordance with the rules in Section VI.B. In special hardship cases, carriers may submit a
waiver request (with justification under Section 1–2 of 14 CFR part 241) requesting permission to report their flight coupon records
exactly as represented on their lifted tickets. Waiver requests must provide the documentation described in Section VI.C. so that
the Department can develop the necessary
procedures and edit routines to ensure the
accuracy and reliability of the overall O&D
Survey results. The granting of such waivers
will depend upon the availability of resources for the Department to assume this
additional burden, which can only be determined on a case by case basis, after evaluating each carrier’s need.
B. Rules for Summarization. Sort the recorded entries into sequence by the entire
record (excluding the passenger field), i.e., by
origin, complete routing (including farebasis codes), tickets destination, and dollars
value of ticket. All identical records are then
to be combined into one summary record. The
number of passengers on the summary record

is to be the sum of the passenger amounts of
all the individual records combined. Passengers are only summarized where records
are identical in all respects except in number
of passengers including dollar value of ticket. NOTE: DO NOT SUMMARIZE DOLLARS
OVER IDENTICAL RECORDS. This summarization is to include the entries from group
tickets, but only after the entries for group
tickets with 11 or more passengers have been
summarized and divided by 10, as stated in
Section V.D.(2)(d). Carriers submitting quarterly O&D Survey reports on magnetic tapes
or similar formats such as ‘‘floppy discs’’
will follow the ADP INSTRUCTIONS in Section IX. Carriers filing reports on hardcopy
BTS Forms 2787 are to enter, on the last page
of the report, the overall total of the number
of passengers in the report.
C. Waiver Requests. Requests for permission
to depart from the required O&D Survey procedures should include a procedural statement
describing the process the carrier proposed
to employ in examining, selecting and editing
the data from reportable flight coupons for
the O&D Survey, as well as a flow chart diagramming the proposed procedures.
D. Quantity and Quality Controls. Carriers
are expected to establish and maintain continuous quantity and quality controls on the
flow of all lifted flight coupons through their
system processes to determine the total
number of coupons handled and the number of
reportable coupons selected. Such data controls and tests have not been specified by the
Department, and necessarily must be developed by each carrier. Each participating carrier shall develop and use on a continuous
basis such control tests as are necessary to
ensure that all reportable coupons are being
selected, recorded and reported as intended
by these O&D Survey Instructions. Such controls should extend over all ADP processing,
both in-house and that from external service
bureaus.
VII. EDITING OF RECORDED DATA
A. City and Airport Codes. Prior to submission of O&D Survey reports, each carrier is
to edit the recorded data to validate city and
airport codes. This edit is to verify that the
codes recorded are valid official codes, and it
is independent of whether or not the carriers
shown actually operated into or out of the
airport shown. Any questions about airport
codes should be addressed to the Director,
Office of Airline Information (see inside of
cover).
B. Edit Responsibility of Carriers. Each carrier is responsible for developing edit procedures and internal controls over its data
entry and processing procedures so that
valid and reliable data are captured in the
O&D Survey inputs and are properly summarized in the outputs. Since the carriers have
many different statistical systems, it is not

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Office of the Secretary, DOT

Sec. 19–7

practicable for the Department of Transportation to prescribe specific controls in this
area, and each carrier is responsible for developing the appropriate internal control
procedures to edit the O&D Survey data and
ensure the integrity of these data. The Department will control the accuracy of its
processing of the sampled data upon receipt
from the carriers.
C. System Documentation of Edits. Carriers
are required to maintain written O&D Survey procedural statements and flow charts.
As provided in Section VIII, these must be
established, or re-certified as of July 1, 1987,
and thereafter when significant procedural
revisions occur.
VIII. CONTROL OF SAMPLE SELECTION AND
DATA RECORDING
A. Sample Accuracy and Reliability. In order
to maximize the accuracy and reliability of
the sample selection and data recording,
each carrier is to:
(1) Develop a written statement describing
the procedures it will employ in examining
and selecting reportable flight coupons and
in recording, summarizing, editing, and testing the Survey data.
(2) Submit any proposed changes in the
above procedures to the Department’s Office
of Airline Information, prior to implementation of such changes.
(3) Establish continuous quantity controls
on the flow of all lifted flight coupons
through the carrier’s accounting processing
to determine the total number of coupons
handled, and the number of reportable coupons selected. Tests are to be made continuously to assure that all reportable coupons
are being selected and the data recorded.
Such tests should be completed while the
‘‘lifted’’ flight coupons (representing earned
passenger revenues for flight segments operated) remain in the possession of the carrier.
Establish such other internal control procedures as are necessary for supervising and
monitoring the accuracy of the recording of
data from reportable flight coupons.
B. Staff Review. The OAI staff will review
the carrier procedures and practices and may
request modifications or the use of special
procedures necessary to improve the sample
or to bolster the controls for accuracy and
reliability.

the beginning of each file when sorted on columns 7 through 200. The record is to be in
the format shown as follows:6
Field

Tape
positions
(from-to)

Passenger Count ..........

1–6

1st City Code ................
1ST Operating Carrier ..
1ST Ticketed Carrier ....

7–9
10–11
12–13

Fare Basis Code ...........
2ND City Code .............
2nd Operating Carrier ...
2nd Ticketed Carrier .....
Fare Basis Code ...........
3rd City Code ...............
3rd Operating Carrier ...
3rd Ticketed Carrier ......
Fare Basis Code ...........
4th City Code ................

14
15–17
18–19
20–21
22
23–25
26–27
28–29
30
31–33

4th Operating Carrier ....
4th Ticketed Carrier ......
Fare Basis Code ...........
5th City Code ................
5th Operating Carrier ....
5th Ticketed Carrier ......
Fare Basis Code ...........
6th City Code ................

34–35
36–37
38
39–41
42–43
44–45
46
47–49

6th Operating Carrier ....
6th Ticketed Carrier ......
Fare Basis Code ...........

50–51
52–53
54

7th City Code ................
7th Operating Carrier ....
7th Ticketed Carrier ......
Fare Basis Code ...........
8th City Code ................

55–57
58–59
60–61
62
63–65

8th Operating Carrier ....
8th Ticketed Carrier ......
Fare Basis Code ...........

66–67
68–69
70

9th City Code ................
9th Operating Carrier ....
9th Ticketed Carrier ......

71–73
74–75
76–77

IX. ADP INSTRUCTIONS
Each carrier electing to submit its Survey
reports in machine listing form or magnetic
media in lieu of hardcopy BTS Form 2787 is
to be governed by the following instructions:
A. Instructions for Submitting Records on
Magnetic Media
(1) Identification record. This identification
record is to include the reporting carrier and
the reporting period. It is designed to fall at

Tape record layout
1. Passenger field must
contain leading zeros,
and no blanks.

2. City field contains the
3-letter alpha code for
the airport in the first
3 positions.

3. Ticketed and operating carrier fields are
to contain the 2 character air carrier code.
An unknown carrier is
to be coded ‘‘UK’’
and surface carrier is
to be coded ‘‘— —’’
(dash dash).

4. Fare basis code is a
one position alpha
code.

5. Portion of record for
sorting, summarizing,
and sequencing includes columns 7
through 200.

6. Dollar amount in positions 196–200 is
right justified.

7. Positions 66–193 are
used only by those
carriers who want to
report more data, and
are not compressing
to 7 stages (see Sec.
V.D. (3) for compressing rules.

6 Each reel of tape will be returned to the
individual carrier upon request.

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Sec. 19–7

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Field

Tape
positions
(from-to)

Fare Basis Code ...........
10th City Code ..............
10th Operating Carrier ..
10th Ticketed Carrier ....
Fare Basis Code ...........
11th City Code ..............
11th Operating Carrier ..
11th Ticketed Carrier ....
Fare Basis Code ...........
12th City Code ..............
12th Operating Carrier ..
12th Ticketed Carrier ....
Fare Basis Code ...........
13th City Code ..............
13th Operating Carrier ..
13th Ticketed Carrier ....
Fare Basis Code ...........
14th City Code ..............
14th Operating Carrier ..
14th Ticketed Carrier ....
Fare Basis Code ...........
15th City Code ..............
15th Operating Carrier ..
15TH Ticketed Carrier ..
Fare Basis Code ...........
16th City Code ..............
16th Operating Carrier ..
16th Ticketed Carrier ....
Fare Basis Code ...........
17th City Code ..............
17th Operating Carrier ..
17th Ticketed Carrier ....
Fare Basis Code ...........
18th City Code ..............
18th Operating Carrier ..
18th Ticketed Carrier ....
Fare Basis Code ...........
19th City Code ..............
19th Operating Carrier ..
19th Ticketed Carrier ....
Fare Basis Code ...........
20th City Code ..............
20th Operating Carrier ..
20th Ticketed Carrier ....
Fare Basis Code ...........
21st City Code ..............
21st Operating Carrier ..
21st Ticketed Carrier ....
Fare Basis Code ...........
22nd City Code .............
22nd Operating Carrier
22nd Ticketed Carrier ...
Fare Basis Code ...........
23rd City Code .............
23rd Operating Carrier
23rd Ticketed Carrier ....
Fare Basis Code ...........
24th City Code ..............
Blank .............................
US Value of Ticket in $

78
79–81
82–83
84–85
86
87–89
90–91
92–93
94
95–97
98–99
100–101
102
103–105
106–107
108–109
110
111–113
114–115
116–117
118
119–121
122–123
124–125
126
127–129
130–131
132–133
134
135–137
138–139
140–141
142
143–145
146–147
148–149
150
151–153
154–155
156–157
158
159–161
162–163
164–165
166
167–169
170–171
172–173
174
175–177
178–179
180–181
182
183–185
186–187
188–189
190
191–193
194–195
196–200

Field

Columns

Reporting carrier ...........
Reporting period:
Year ...........................
Quarter ......................
Blanks ...........................

1–2
3–4
5
6–200

(2) Detail record. (a) All records are to be
summarized on the complete itinerary 7 (columns 7 through 200) and the summary record
only for each itinerary is to be submitted.
The tape file, including the identification
record, is to be in sequence by complete
itinerary.
(b) The tape record layout is shown on the
following page.
(3) Magnetic Tape Instructions: (a) All
tapes are to be written using the standard
IBM extended binary coded decimal interchange code (EBCDIC).
(b) The recording density can be either 6250
or 1600 B.P.I.
(c) All tape will contain standard IBM volume header, and trailer records.
(d) External labels will contain the carrier,
name, the report date, file identification,
and an address for returning the tapes.
(4) Transmittal letter. The tape shall be accompanied by a transmittal letter which
shows the number of records reported and
the total number of passengers contained in
the report.
B. Editing of Tape Records. Prior to submission of data, each carrier is requested to edit
and correct its data so that its O&D Survey
report may be as error-free as is reasonably
practicable. The methods to be used in editing are left to the carriers’ discretion, but
with assistance available upon request from
the Department’s Office of Airline Information (OAI). To aid the carriers in maintaining a current file of editing criteria, OAI will
re-issue, as needed, the city/airport-carrier
file to each participating carrier. There will
be a five-position field to denote the city/airport-carrier. The first three positions denotes the airport and the last two positions
denotes the air carrier.
C. Standard Formats for Floppy Disk or
Cartridge Submissions. Carriers should use
the 200 position format with the standard
length fields prescribed for magnetic media
submissions. The record layout is detailed in
subsection A(1) of this section. However, to
simplify the PC submissions, the submitter
may report the dollar value of the ticket in
the field immediately after the last reported
city code, rather than in positions 196–200.
Submitters may separate fields by using
commas or tabs (comma delimited ASCII or
tab delimited ASCII format).

Tape record layout

X. GLOSSARY OF TERMS
Selected terms used in the foregoing instructions are here defined and explained in
the context of the O&D Survey.
ADP. An abbreviation for automated data
processing, which is the term applied to all
forms of machine processed data.

Remarks
Alpha code.
Tens and units position.
1, 2, 3, or 4.

7 Itinerary includes total dollar value of
ticket.

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Office of the Secretary, DOT

Sec. 19–7

Carrier. Any scheduled air carrier, U.S. or
foreign, that appears on a coupon stage in a
ticketed itinerary, including helicopter, air
taxi, commuter, intra-Alaska carriers, and
intra-state carriers.
City or origin. (See origin.)
Conjunction ticket. Two or more tickets
concurrently issued to a passenger and which
together constitute a single contract of carriage.
Connecting point. An intermediate point in
an itinerary at which the passenger deplanes
from one flight and boards another flight, either on the same carrier or from the flight of
one carrier to a flight of another carrier, for
continuation of the journey.
Coupon stage. (See flight-coupon stage.)
Destination. The last point in the itinerary
and the last point at which the passenger is
to deplane at the completion of the journey.
(In roundtrip itineraries, the destination and
the origin are the same.)
Dollar value of ticket. (See total dollar value
of ticket.)
Domestic. Itineraries within or between the
50 U.S. States and the District of Columbia
are considered domestic for this Survey.
Fare basis code. The alphabetic code(s) or
combination of alphabetic and numeric codes
appearing in the ‘‘Fare basis’’ box on the
flight coupon which describe the applicable
service and discount to which the passenger
is entitled. All fare basis codes are summarized into basic categories; namely C—Unrestricted Business Class, D—Restricted Business Class, F—Unrestricted First Class, G—
Restricted First Class, X—Restricted Coach/
Economy Class, Y—Unrestricted Coach/Economy Class, and U—Unknown (This fare category is used when none is shown on a ticket
coupon, or when a fare category is not discernible, or when two or more carrier fare
codes are compressed into a single stage of a
passenger trip).
Fare ladder. The ‘‘For-issuing-office-only’’
box of a ticket.
Flight-coupon stage. The portion of an
itinerary which lies between two contiguous
points in the itinerary and between which
points the passenger is to travel on a single
flight.
Group ticket. A single ticket valid for the
transportation of two or more passengers
over the same itinerary.
Interline transfer. An occurrence at an intermediate point in an itinerary where a passenger changes from one carrier to another
carrier, with or without a stopover.
Intermediate point. Any point in an
itinerary, other than the origin or destination, at which the passenger makes an interline or intraline connection or stopover.
International. The world area outside the 50
U.S. States and the District of Columbia.
Itineraries between points outside the 50
States are considered as international for
this Survey, as well as itineraries between

the 50 States and U.S. possessions, and between or within U.S. possessions.
Intraline transfer. An occurrence at an intermediate point in an itinerary where a passenger changes from a flight of one carrier to
another flight of that same carrier, with or
without stopover, or where the passenger
changes from one class of service to another
class of service on the same flight.
Itinerary. All points in the passenger journey, beginning with the origin, followed by
the routing, and ending with the destination,
in the sequence shown on the ticket.
Operating air carrier. Under a code-share arrangement, the air carrier whose aircraft
and flight crew are used to perform a flight
segment.
Origin. The first point in the itinerary and
the point where the passenger first boards a
carrier at the beginning of the itinerary.
Participating carrier. A carrier which is governed by the Survey data collection and reporting instructions contained herein and
which is required to file Survey reports with
the Department of Transportation.
Point. A city or airport (always identified
by its airport code).
Reissued ticket. A ticket issued in exchange
for all or part of the unused portion of a previously issued ticket.
Reportable flight coupon. A flight coupon in
an itinerary in which the carrier examining
the coupon is the first participating carrier
to lift a flight coupon in the itinerary and
from which coupon the examining carrier
records the Survey data.
Reporting carrier. The carrier in a given
itinerary which has lifted the reportable
flight coupon in that itinerary and which
carrier is required to record the Survey data
for that itinerary for the report to the Department.
Routing. The carrier on each flight-coupon
stage in an itinerary and the intermediate
points of routing stopover or connection
(interline or intraline) in the sequence of occurrence in the movement of the passenger
from origin to destination. The routing also
includes fare-basis summary codes on each
flight-coupon stage, to the extent these are
available from the ticket.
Scheduled service. Transport service operated on a certificated large air carrier’s
routes pursuant to published flight schedules, including extra sections of scheduled
flights.
Stage. (See flight-coupon stage.)
Ticketed air carrier. Under a code-share arrangement, the air carrier whose two-character air carrier code is used for a flight segment, whether or not it actually operates
the flight segment.
Total dollar value of ticket. The sum of the
fare plus tax for the entire ticketed
itinerary, in whole U.S. dollars with cents
dropped. For a group ticket, the amount is
the average per passenger. For fares stated

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Section 21

14 CFR Ch. II (1–1–05 Edition)

in foreign currency, it is the equivalent in
U.S. dollars.

Transfer. (See interline
intraline transfer.)

transfer

and

[Amdt. No. 241–55, 52 FR 6529, Mar. 5, 1987, as amended at 60 FR 66723, 66724, Dec. 26, 1995; 62
FR 43280, Aug. 13, 1997; 67 FR 58690, Sept. 18, 2002]

GENERAL REPORTING PROVISIONS—
LARGE CERTIFICATED AIR CARRIERS
Section 21 Introduction to System of
Reports
(a) Each large certificated air carrier
subject to the Federal Aviation Act of
1958, as amended, shall file with the
BTS, monthly, quarterly, semiannually, and annually BTS Form 41 Re-

ports of financial and operating statistics as prescribed herein unless waiver
has been made by the Civil Aeronautics
Board.
(b) The system prescribed provides
for the submission by each air carrier
of four classes of financial and operating statistics, on individual schedules of the BTS Form 41 Report,
grouped as follows:

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174

Office of the Secretary, DOT

Section 21

A. Certification.
B. Balance Sheet Elements.
P. Profit and Loss Elements.
T. Traffic and Capacity Elements.

(c) The prescribed system of reports
provides that the frequency of reporting shall be monthly for some schedules, quarterly for some, semiannually
for some and annually for others. It
also provides in some areas for the
classification of large certificated air
carriers into Group I, Group II, and
Group III with the form and content
differentiated as between groups.
(d) Each schedule of the prescribed
BTS Form 41 Report has been assigned
a specific code. The prefix alphabetical
codes A, B, P and T, respectively, have
been employed to denote certification,
balance sheet, profit and loss, and traffic and capacity. The digits immediately following the alphabetical prefix designate the particular schedule.
(e) Upon approval by the Director,
Office of Airline Information, a carrier
may:
(1) Supply its own computer prepared
formats provided each schedule conforms with the size and format of the
forms prescribed in this part.
(2) Use telefacsmile, or fax, equipment to submit the forms prescribed by
this part; however, forms transmitted
by fax must conform to an 81⁄2 × 14 inch
size. With prior approval, larger forms
may be reduced in size of 81⁄2 × 14 for
transmission to the Department.
(f) In submitting each schedule prescribed by this part to the Department,
each reporting air carrier shall adhere
to the following guidelines:
(1) A good quality black ribbon shall
be used in preparing the original copy
of each schedule.
(2) In no event shall any information
be typed on the reverse side of copies
submitted to the Department.
(3) Except as provided for in paragraph (e) of this section, no photocopy
or similar process shall be used.
(g) Four separate air carrier entities
shall be established for large certificated air carriers conducting scheduled
service for the purpose of submitting
the prescribed reports. They are as follows: (1) Domestic operations; (2) operations via the Atlantic Ocean; (3) operations via the Pacific Ocean; and (4) operations in Latin American areas. With

respect to the first classification, the
domestic entity shall embrace all operations within and between the 50
States of the United States, the District of Columbia, the Commonwealth
of Puerto Rico and the U.S. Virgin Islands, and shall also include Canadian
transborder operations. The reports to
be submitted by each entity shall be
comparable to those required of a distinct legal entity whether the reporting entity constitutes such an entity, a
semiautonomous physically separated
operating division of the carrier, or an
entity established for reporting purposes only.
(h) Two separate entities shall be established for large certificated air carriers predominantly engaged in conducting charter activities for the purpose of submitting the prescribed reports: (1) Domestic operations; and (2)
international operations. The domestic
entity includes all operations within
and between the 50 States of the United
States, the District of Columbia, the
Commonwealth of Puerto Rico, and the
U.S. Virgin Islands. All other operations will be in the international entity.
(i) The entities for which separate reports shall be made by the different
route and charter air carriers will be
set semiannually by the Office of Airline Information.
(j) As a general rule separate reports
shall be filed for the air carrier and for
each associated company air carriers
as defined in section 03 which is an air
carrier. However, transactions of associated companies in which 100 percent
equity control resides in the reporting
air carrier shall be consolidated with
transactions of the reporting air carrier when such associated companies
perform services related to the transport operations of the reporting air
carrier almost exclusively and are not
engaged in air transportation for their
own account.
(k) Generally, route air carriers’ nonscheduled services shall be treated as
an integral part of the reporting entity
to which most closely related without
regard to the geographic area in which
such nonscheduled services may actually be performed. However, supplemental reports shall be made of nonscheduled services (including service

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for the Department of Defense) in areas
not encompassed by the prescribed reporting entity in any month in which
the available ton-miles of such nonscheduled services exceed 5 percent of
the available ton-miles of the reporting
entity. Such supplemental reports
shall continue until waived by the BTS
upon a showing that such nonscheduled
operations will not in the subsequent
12-month period exceed the 5-percent
limit. The supplemental reports to be
filed each month or calendar quarter,
as applicable, shall be comprised of report Schedules P–5, T–1, and T–2.
Transport and nontransport revenues
pertaining to such separately reported
nonscheduled services shall be reported
on Schedule P–2 each quarter.
(l) When and as required in the national interest, any air carrier which
performs nonscheduled transport services for the Department of Defense
shall, when directed by the Department, make separate reports for such
services as if they were conducted by a
physically separate transport entity,
such reports shall consist of Schedules

P–1 through P–7, T–1, and T–2. The letter ‘‘D’’ shall be inserted on such reports, following the schedule number of
each P and T schedule. When a carrier
has more than one reporting entity,
nonscheduled
transport
and
nonscheduled Defense services shall be assigned to the reporting entity to which
more closely related.
[ER–1027, 42 FR 60128, Nov. 25, 1977, as amended by ER–1073, 43 FR 40453, Sept. 12, 1978; ER–
1073, 44 FR 1970, Jan. 9, 1979; ER–1188, 45 FR
48871, July 22, 1980; ER–1297, 47 FR 32919, July
30, 1982; ER–1400, 50 FR 12, Jan. 2, 1985; ER–
1401, 50 FR 247, Jan. 3, 1985; Amdt. No. 241–56,
52 FR 9130, Mar. 23, 1987; Amdt. 241–60, 56 FR
12658, Mar. 27, 1991; 60 FR 66724, Dec. 26, 1995]

Section 22
tions

General Reporting Instruc-

(a) One copy of each schedule in the
BTS Form 41 report shall be filed with
the BTS and shall be received on or before the due date indicated for each
such schedule in the list titled ‘‘Due
Dates of Schedules in BTS Form 41 Report.’’

LIST OF SCHEDULES IN BTS FORM 41 REPORT
[See footnotes at end of table]

Schedule No.

Filing frequency

Title

Applicability by carrier
group
I

A ......................
B–1 ..................
B–1.1 ...............
B–7 ..................
B–12 ................
B–43 ................
P–1.1 ...............
P–1.2 ...............
P–1(a) ..............
P–2 ..................
P–5.1 ...............

Certification ...........................................................................................
Balance sheet .......................................................................................
Balance sheet .......................................................................................
Airframe and aircraft engine acquisitions and retirements ...................
Statement of changes in financial position ...........................................
Inventory of airframes and aircraft engines ..........................................
Statement of operations .......................................................................
Statement of operations .......................................................................
Interim operations report .......................................................................
Notes to RSPA Form 41 report ............................................................
Aircraft operating expenses ..................................................................

P–5.2 ...............
P–6 ..................
P–7 ..................
P–10 ................
P–12(a) ............
T–100 ..............

Aircraft operating expenses ..................................................................
Operating expenses by objective groupings ........................................
Operating expenses by functional groupings— Group III air carriers ..
Employment statistics by labor category ..............................................
Fuel consumption by type of service and entity ...................................
U.S. air carrier traffic and capacity data by nonstop segment and onflight market.
Foreign air carrier traffic data by nonstop segment and on-flight market.
(see 14 CFR 217)
Report of all-cargo operations ..............................................................

T–100(f) ...........

T–8 ..................

Q
Q
SA
Q
Q
A
SA
Q
M
Q
Q(1),
SA(2)
Q
Q
Q
A
M
M

II

(1)
(1)
(2)
NA
(1)
X
(2)
(1)
X
(1)
X

X
X
NA
X
X
X
NA
X
X
X
NA

X
X
NA
X
X
X
NA
X
X
X
NA

NA
(1)
NA
(1)
(1)
X

X
X
NA
X
X
X

X
X
X
X
X
X

(3)

(3)

(3)

M

A

M=Monthly, Q=Quarterly, SA=Semiannually, A=Annually, NA=Not Applicable, X=All Carriers.
(1) Applicable to Group I Air Carriers with annual operating revenues of $20 million or more.
(2) Appilcable to Group I Air Carriers with annual operating revenues below $20 million.
(3) Applicable to Air Carriers conducting 49 U.S.C. 41103 all-cargo operations.

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Office of the Secretary, DOT

Section 22

DUE DATES OF SCHEDULES IN BTS FORM 41
REPORT
Financial
data on
schedule No.

Due dates 1
January 20 ........
January 30 ........
February 10 2 ....

February 20 ......
March 1 ............
March 20 ..........
March 30 ..........
April 20 .............
April 30 .............
May 10 ..............

May 20 ..............
May 30 ..............
June 20 .............
June 30 .............
July 20 ..............
July 30 ..............
August 10 .........

August 20 .........
August 30 .........
September 20 ...
September 30 ...
October 20 ........
October 30 ........
November 10 ....

November
November
December
December

20
30
20
30

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

P–12(a)
P–1(a)
A, B–1, B–
1.1, B–7,
B–12, P–
1.1, P–1.2,
P–2, P–
5.1, P–5.2,
P–6, P–7,
P–10.
P–12(a)
P–1(a)
P–12(a)
B–43, P–
1(a).
P–12(a)
P–1(a)
A, B–1, B–7,
B–12, P–
1.2, P–2,
P–5.1, P–
5.2, P–6,
P–7.
P–12(a)
P–1(a)
P–12(a)
P–1(a)
P–12(a)
P–1(a)
A, B–1, B–
1.1, B–7,
B–12, P–
1.1, P–1.2,
P–2, P–
5.1, P–5.2,
P–6, P–7.
P–12(a)
P–1(a)
P–12(a)
P–1(a)
P–12(a)
P–1(a)
A, B–1, B–7,
B–12, P–
1.2, P–2,
P–5.1, P–
5.2, P–6,
P–7.
P–12(a)
P–1(a)
P–12(a)
P–1(a)

Traffic and capacity data
on schedule No.

T–100, T–100(f)

T–100, T–100(f),
T–100, T–100(f), T–8

T–100, T–100(f)

T–100, T–100(f)
T–100, T–100(f)
T–100, T–100(f)

T–100, T–100(f)
T–100, T–100(f)
T–100, T–100(f)

T–100, T–100(f)
T–100, T–100(f)

1 Due

dates falling on a Saturday, Sunday or national holiday will become effective the first following work day.
2 Reporting due dates on Form 41 Schedules B and P are
extended to March 30 if preliminary schedules are filed at the
Department by February 10

(b) Each large certificated air carrier
shall file the applicable schedules of
the BTS Form 41 Report with the BTS
in accordance with the above instructions with the following exceptions:
(1) The time for filing B and P report
schedules for the final quarter or semiannual period of each calendar year
may be extended to the following

March 30 if the preliminary Schedules
B–1 or B–1.1 and P–1.1 or P–1.2 are submitted, as applicable, and are received
on or before their respective due dates.
(2) For the third month of any calendar quarter, Schedule P–1(a) need
not be filed if Schedule P–1.1 or P–1.2
for the quarter or semiannual period,
as applicable, is received on the due
date prescribed for Schedule P–1(a).
(3) Income and expense data on
Schedule P–1(a) for each month will be
withheld by the BTS from public disclosure, until such time as (i) the semiannual or quarterly financial reports
are due, (ii) the semiannual or quarterly financial reports are filed, or (iii)
information covered by monthly reports is publicly released by the carrier
concerned, whichever occurs first. Before that time, income and expense
data reported on Schedule P–1(a) will
be disclosed to parties to any proceeding before the DOT to the extent
that such data are relevant and material to the issues in the proceeding
upon a determination to this effect by
the administrative law judge assigned
to the case or by the DOT. Any data to
which access is granted may be introduced into evidence, subject to the normal rules of admissibility of evidence.
The DOT will make other disclosure of
these data upon its own motion or upon
application of any interested person,
when the DOT finds the public interest
so requires. The BTS may, from time
to time, publish summary information
compiled from Schedule P–1(a) in a
form which will not identify the individual carrier. At the request of an air
carrier, and upon a showing by such air
carriers that public disclosure of its
preliminary year-end report would adversely affect its interests and would
not be in the public interest, the BTS
will withhold such preliminary yearend report from public disclosure until
such time as (i) the final report is filed,
(ii) the final report is due, or (iii) information covered by the preliminary report is publicly released by the carrier
concerned, whichever occurs first.
(c) If circumstances prevent the filing of a report on or before the prescribed due date, consideration will be
given to the granting of an extension

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Section 23

14 CFR Ch. II (1–1–05 Edition)

upon receipt of a written request therefor. To provide ample time for consideration and communication to the air
carrier of the action taken, such a request must be delivered to the Board in
writing at least three (3) days in advance of the due date, setting forth
good and sufficient reason to justify
the granting of the extension and the
date when the report can be filed. Except in cases of emergency, no such request will be entertained which is not
in writing and received by the BTS at
least three (3) days before the prescribed due date. If a request is denied,
the air carrier remains subject to the
filing requirements to the same extent
as if no request for extension of time
had been made.
(d) [Reserved]
(e) All financial data reported on B, P
and G schedules shall reflect the status
of the air carrier’s books of account for
the period for which the report is being
made and shall conform to the instructions contained in this Uniform System of Accounts and Reports. At the
option of the air carrier, Group III air
carriers may round reported financial
data to the nearest thousands of dollars by typing ‘‘($000)’’ at the top of
each amount column. All Group I and
Group II air carriers may, at their option, round reported financial data to
the nearest whole dollars by dropping
the cents. All rounded amounts must
be balanced within and between schedules. This option applies only to the
submission of hardcopy reports. Instructions for the submission of data in
ADP format are contained in the Accounting and Reporting Directives,
which are available from OAI.
(f) Traffic and other operational statistics included in schedules of the BTS
Form 41 reports shall reflect data pertaining to the month, quarter or 12months-to-date period for which the report is being made.
(g) Adjustments correcting errors in
previously reported traffic and other
operational statistics shall not be included in data reported in schedules for
the current period but shall be effected
by submission of corrected schedules
for the period to which applicable or, if
only a few items are involved, by written notice and authorization to the
BTS to correct previously filed reports

except that any correction which
amounts to less than one-half of one
percent (0.5%) of the corrected amount
for the month to which related may be
included in the report for the current
month provided the amount of the correction is clearly noted on the Form 41
Report.
(h) All letters and statements of correction or revision of reported data
shall be a part of the BTS Form 41 reports.
(i) All changes in accounting methods having a material impact upon the
particular financial elements involved,
and all changes in methods of computing and reporting traffic and capacity statistics having a material impact
upon the particular statistic involved
shall be adequately explained and identified in the report first reflecting such
changes. Such explanations related to
financial position or financial results
shall be made on BTS Form 41 Schedule P–2. Changes in methods for computing or reporting traffic and capacity
statistics shall be identified and explained on a separate sheet attached to
the first report affected. (See sec. 2–16.)
The reporting requirements shall not
be construed, in any sense, as relieving
the air carrier of the responsibility for
conforming its procedures to those otherwise prescribed in this system of accounts and reports.
(j) All financial statements released
by carriers to the public reflecting a financial position or operating results
for dates or reporting periods not covered by reports on file with the Board
shall be filed with the Board simultaneously with their public release.
(Approved by the Office of Management and
Budget under control number 2138–0013)
[ER–755, 37 FR 19726, Sept. 21, 1972]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting part 241, section 22, see the
List of CFR Sections Affected, which appears
in the Finding Aids section of the printed
volume and on GPO Access.

FINANCIAL REPORTING REQUIREMENTS
Section 23 Certification and Balance
Sheet Elements
Schedule A—Certification
(a) The certification of the BTS Form 41
Report shall be signed by an elective corporate officer, executive, or director. Other

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Office of the Secretary, DOT

Section 23

persons may be authorized by the carrier to
sign the certification provided a written authorization disclosing the individual’s name
and title is forwarded to the Department of
Transportation. Since corrections or revisions of reported data are a part of the BTS
Form 41 Report, all correspondence relating
to such matters shall be signed only by the
person(s) authorized to sign the certification.
(b) The certification of the Form 41 reports, embodied in Schedule A thereof, shall
read as follows:
I, the undersigned (Title of officer in
charge of accounts) llll of the (Full
name of the reporting company) lll do
certify that this report and all schedules,
ADP-media submissions, Passenger OriginDestination Survey submissions and supporting documents which are submitted
herewith or have been submitted heretofore
as parts of this report filed for the above indicated period have been prepared under my
direction; that I have carefully examined
them and declare that they correctly reflect
the accounts and records of the company,
and to the best of my knowledge and belief
are a complete and accurate statement, after
adjustments to reflect full accruals, of the
operating revenues and expenses, income
items, assets, liabilities, capital, retained
earnings, and operating statistics for the periods reported in the several schedules, the
Schedule T–100 ADP-media submissions, and
the Passenger Origin-Destination Survey;
that the various items herein reported were
determined in accordance with the Uniform
System of Accounts and Reports for Large
Certificated Air Carriers prescribed by the
Department of Transportation; and that the
data contained herein are reported on a basis
consistent with that of the preceding report
except as specifically noted in the financial
and statistical statements.
Schedule B–1 Balance Sheet
(a) This schedule shall be filed by all Group
II and Group III air carriers and Group I air
carriers that have annual operating revenues
of $20 million or more.
(b) This schedule shall reflect the balances
at the close of business on the last day of
each calendar quarter for the overall or system operations of each air carrier in conformance with the provisions of sections 4, 5
and 6.
(c) Individual proprietors or partners shall
report the aggregate capital contributed by
the proprietor or partners in account 2890
Additional Capital Invested.
Schedule B–1.1—Balance Sheet
(a) This schedule shall be filed semiannually by Group I air carriers with annual operating revenues below $20 million.

(b) Each carrier shall insert in the space
provided for ‘‘OAG Code’’ its carrier code as
contained in the Official Airlines Guide
(OAG). If the OAG does not contain a carrier
code for the reporting carrier, a code will be
provided by the Office of Airline Information
upon request. This code will then be inserted
in the space provided for ‘‘carrier code.’’
(c) This schedule shall show the account
balances at the close of business on June 30
or December 31, as applicable, of each semiannual reporting period.
(d) ‘‘Current Assets’’ shall include all resources that may reasonably be expected to
be realized in cash or sold or consumed within one year. This group of assets is classified
into three basic accounts:
(1) ‘‘Cash and Equivalents’’ shall include
cash on hand and on deposit, U.S. Government securities, and other temporary cash
investments.
(2) ‘‘Notes and Accounts Receivable-Net’’
shall include general traffic accounts receivable, government receivables, notes and receivables from associated companies, officers, employees and others, and a deduction
for a reasonable allowance for bad debts.
(3) ‘‘Other Current Assets’’ shall contain
all other current assets not provided for in
the above classifications. This account shall
include, but is not limited to, short-term
prepayments, expendable spare parts, supplies and other inventories of flight equipment replacement parts that are usually replaced rather than repaired, and materials
and supplies held in stock, such as fuel and
oil, expendable tools, office supplies and food
service supplies. Spare parts may be reduced
by an allowance for obsolescence to provide
for losses in value.
(e) ‘‘Property and Equipment’’ shall be segregated into that which is owned and that
which is leased under capital leases. All
property and equipment, with the deception
of land, shall be reported net of accumulated
depreciation or amortization.
(f) ‘‘Other Assets’’ shall included all assets
not included in the above categories, such as
long-term investments, long-term prepayments,
long-term
receivables,
deferred
charges, intangible assets, equipment purchase deposits, and construction work in
progress.
(g) ‘‘Current Liabilities’’ shall include all
obligations, the liquidation of which is reasonably expected to require the use of existing resources within one year. This group of
liabilities is classified into three basic accounts:
(1) ‘‘Notes and Accounts Payable’’ shall include any payments on long-term debt,
short-term notes and accounts payable, and
accrued expenses that are payable within one
year.
(2) ‘‘Accrued Taxes’’ shall include tax liabilities, such as those imposed on income,

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Section 23

14 CFR Ch. II (1–1–05 Edition)

property and payroll, which are reasonably
expected to be liquidated within one year.
(3) ‘‘Other Current Liabilities’’ shall include all current liabilities which are not
provided for elsewhere, such as air traffic liabilities for unused transportation sold (includes sales of transportation on both the reporting carrier and other carriers).
(h) ‘‘Long-Term Debt’’ shall include all obligations which are not reasonably expected
to be liquidated within one year. Typical examples include bonds payable, long-term
notes payable, lease obligations, and pension
obligations.
(i) ‘‘Other Liabilities’’ shall include any
debts or obligations which are not properly
listed in the ‘‘Current Liabilities’’ or ‘‘LongTerm Debt’’ sections.
(j) ‘‘Deferred Credits’’ shall include all
credit balances of a general clearing nature,
including credits held in suspense pending
receipt of further information necessary for
final disposition. Included in this account
are deferred income taxes and deferred investment tax credits.
(k) ‘‘Stockholder’s Equity’’ shall be reported as follows:
(1) ‘‘Capital Stock’’ shall be segregated as
between common and preferred. The number
of shares outstanding, along with the par or
stated value of the stock, shall be reported.
In the case of no-par stock without stated
value, the full consideration received shall
be reported.
(2) ‘‘Other Paid-In Capital’’ shall include
the difference between the price at which the
capital stock is sold and the par or stated
value of the stock.
(3) ‘‘Retained Earnings’’ shall represent
the net income or loss from all operations of
the corporate entity less dividends.
(4) ‘‘Treasury Stock’’ shall represent the
cost of stock issued by the carrier and reacquired by it but not retired or cancelled.
(l) The statement of certification shall be
signed by the carrier’s chief accounting officer.
(m) All substantive matters that may materially influence interpretations or conclusions in regard to the financial condition or
the earnings position of the air carrier which
are not clearly identified in the body of the
schedule or which represent information
that cannot be expressed adequately in monetary terms shall be completely and clearly
stated in a note attached to this schedule
and cross-referenced to the affected account
or accounts.
Schedule B–7 Airframe and Aircraft Engine
Acquisitions and Retirements
(a) This schedule shall be filed by all Group
II and Group III air carriers.
(b) Data applicable to acquisitions and
data applicable to retirements shall be
grouped and reported separately. The data
reported within each group (acquisitions; re-

tirements) shall be further subgrouped and
reported as follows:
(1) Acquisitions: the indicated data shall be
reported for each individual airframe, identified by type, model, and design of cabin as to
use for passengers exclusively, cargo exclusively, or both passengers and cargo in combination. Data pertaining to aircraft engines
shall be reported in aggregate for each type
or model; however, leased aircraft engines
shall be separately reported under captions
entitled: Capital Leases—Aircraft Engines;
and Operating Leases—Aircraft Engines. Airframe units leased from others for a period of
more than 90 days shall be reported in a separate subsection of this schedule, captioned
as follows: Capital Leases—Airframe Units;
and Operating Leases—Airframe Units. In
addition, a notation shall be made by license
number of airframe units of the air carrier
returned after lease to others for a period of
more than 90 days. Airframe units obtained
through interchange lease arrangements
shall not be so reported.
(2) Retirements: The indicated data shall
be reported for the sale or retirement of each
airframe, each type of aircraft engine (stating the number of units retired) and, to the
extent retired along with airframes and engines, in aggregates by accounts, operating
property and equipment included in accounts
1607 and 1608 and nonoperating property and
equipment included in accounts 1707 and
1708. Disposition of properties in accounts
1608 and 1708 not related to airframe and aircraft engine retirements shall be reported in
a separate group for each account. Airframe
units leased from others for a period of more
than 90 days shall be reported, upon return
to the lessor, in a separate subsection of this
schedule and captioned as follows: Capital
Leases—Airframe Units; and Operating
Leases—Airframe Units. In addition, a notation shall be made by license number and
name of lessee of airframe units leased to
others for a period of more than 90 days;
moreover, airframe units leased to others
under sales-type or direct financing leases
shall be separately captioned and reported
on this schedule. Airframe units leased under
interchange arrangements shall not be so reported. Aircraft engines leased from others
for a period of more than 90 days shall be reported, upon return to the lessor, in a separate subsection of this schedule and captioned as follows: Capital Leases—Aircraft
Engines; and Operating Leases—Aircraft Engines. In addition, a notation shall be made
by model number, number of units, and name
of lessee of aircraft engines leased to others
for a period of more than 90 days; moreover,
aircraft engines leased to others under salestype or direct financing leases shall be separately captioned and reported on this schedule. Aircraft engines leased under interchange arrangements shall not be so reported.

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Section 23

(c) All dates shall indicate the day, the
month and the year; shall be provided on a
unit basis for airframes only, and, shall be
reported for each aircraft engine group by
date of transaction.
(d) Column 1, ‘‘Year of First Delivery—Airframe,’’ shall reflect, for each reported airframe, the year that the airframe was first
delivered by its manufacturer.
(e) Column 2, ‘‘Airframe Manufacturer’s
Serial Number,’’ shall reflect the serial number assigned to each reported airframe by its
manufacturer.
(f) Column 4, ‘‘Acquisitions or Retirements,’’ shall be used to indicate, for each
item entered, whether it represents an acquisition or retirement. This shall be indicated
by inserting in Column 4 an ‘‘A’’ for acquisition or an ‘‘R’’ for retirement.
(g) Column 8, ‘‘Maximum Seating Capacity,’’ shall reflect the number of passenger
seats installed in each airframe acquired.
When airframes are designed for multiple adjustable seating configurations, the maximum number of seats for which designed
shall be reported. When the seating configuration of airframes is modified subsequent to
original acquisition, the revised passenger
capacity of each airfame shall be reported in
the quarter in which modified and referenced
to identify original capacity reported.
(h) Column 9, ‘‘Cost,’’ shall reflect the
book cost of reported airframe and aircraft
engine acquisitions and retirements.
(i) Column 10, ‘‘Amortization/Depreciated
Cost,’’ shall reflect the book cost, less amortization or depreciation expense, for airframes and aircraft engines that have been
retired.
(j) Column 11, ‘‘Realization,’’ shall reflect
the proceeds from the disposition of airframes and aircraft engines, including any
insurance proceeds.
(k) Column 12, ‘‘Acquired From/Disposition,’’ shall reflect: (1) for acquisitions: the
name of the person or organization from
which airframes and aircraft engines are acquired and (2) for dispositions (retirements):
the name of the person or organization to
which airframes and aircraft engines are sold
or a notation as to the nature of the retirement and the account to which any depreciated cost has been charged, if not sold.
Items included in accounts 1607, 1608, 1707,
and 1708, sold as a part of an airframe or aircraft sales transaction, shall also be identified by the name of the buyer. Other sales of
items included in these accounts shall be reported in a separate group in aggregate for
each property account affected.
Schedule B–12—Statement of Cash Flows
(a) This Schedule shall be filed quarterly
by all Group II and Group III air carriers and
Group I air carriers that have annual operating revenues of $20 million or more.

(b) This schedule shall be filed for the overall or system operations of the air carrier.
(c) The statement of cash flows shall separately disclose the amount of net cash provided or used during the reporting period
from the carrier’s operating activities, investing activities and financing activities.
The effect on cash and cash equivalents of
the total amount of net cash provided or
used during the quarter from each of the
above activities shall be clearly disclosed so
as to reconcile beginning and ending cash
and cash equivalents.
(d) Carriers may use either the direct or indirect method of reporting cash flows. Under
either method, the reporting of cash flows
from investing and financing activities will
remain the same. However, the reporting of
cash flows from operating activities does differ between the two methods.
(e) For carriers electing to use the direct
method, cash flows from operating activities
are reported as gross amounts of the principal components of cash receipts and cash
payments from operating activities, such as
cash received from passengers and shippers,
cash paid to suppliers, and cash paid to employees. Each carrier using the direct method shall provide as part of its statement of
cash flows, a separate schedule that reconciles net income (as reported on Schedule
P–1.2 in Account 9899) to cash flow from operating activities.
(f) For carriers electing to use the indirect
method, cash flows from operating activities
shall reflect net income (as reported on
Schedule P–1.2 in Account 9899) along with
the adjustments necessary to reconcile net
income (Account 9899) to net cash for the period (Net Cash Provided or Used By Operating Activities).
(g) Regardless of the method used, the
statement of cash flows shall reflect the
amount of net cash flow provided or used by
operating activities during the reporting period.
(h) The balance of ‘‘Cash and Cash Equivalents,’’ at the beginning and ending of the
quarterly period covered by the report,
should equal the sum of Accounts 1010,
‘‘Cash,’’ and 1100, ‘‘Short-term Investments,’’
as reported on the immediately preceding
and current quarterly Schedule B–1, ‘‘Balance Sheet.’’ If the sum of these two accounts does not equal the total ‘‘Cash and
Cash Equivalents’’ reported on the statement of cash flows, then a footnote explaining the difference shall be provided as part of
the statement of cash flows.
Schedule B–43—Inventory of Airframes and
Aircraft Engines
(a) This schedule shall be filed by all Group
I, Group II and Group III air carriers.
(b) The indicated data shall be reported for
each individual airframe, identified by type,
model and design of cabin (main deck) as to

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Section 24

14 CFR Ch. II (1–1–05 Edition)

use for passengers exclusively, cargo exclusively, or both passengers and cargo in combination. Type and model refers to aircraft
models such as B–707–100, B–707–200, DC–10–40,
Beech–18, Piper PA–32, etc. Aircraft type designations are prescribed in Accounting and
Reporting Directive No. 178, ‘‘List of Aircraft
Type Numeric Codes.’’ Copies of this directive and subsequent updates to the list of
aircraft type codes are available from the
Department’s Office of Airline Information.
Airframes that are authorized for operation
over water under FAA regulation FAR 121
shall be so indicated by asterisk.
(c) Data pertaining to aircraft engines
shall be reported on a group basis by type of
engine and by type of aircraft to which related.
(d) Data in this schedule shall be grouped
and subtotaled as data pertaining to airframes and data pertaining to aircraft engines. Data pertaining to nonoperating airframes and aircraft engines shall be reported
in a group below the data for operating
equipment. Data pertaining to airframes and
aircraft engines obtained under operating
and capital leases shall be reported, by type
of lease, in a separately captioned grouping
below nonoperating airframes and aircraft
engines and subgrouped within those groups
according to operating and nonoperating
equipment.
(e) Column 1, ‘‘Year of First Delivery—Airframe,’’ shall reflect, for each reported airframe, the year that the airframe was first
delivered by its manufacturer.
(f) Column 2, ‘‘Airframe Manufacturer’s Serial Number,’’ shall reflect the serial number
assigned to each reported airframe by its
manufacturer.
(g) Data pertaining to airframes and aircraft engines obtained under operating leases
shall be listed in Columns 1 through 9; the
cost of improvements to equipment under
operating leases shall be reported in Columns 10 through 12.
(h)
Column
9,
‘‘Available
Capacity
(Weight),’’ shall reflect, for each reported
aircraft type, the available capacity (stated
in pounds) that is used in computing the
available ton-miles reported on Schedules T–
100, T–1, and T–2.
(i) Column 10, ‘‘Acquired Cost or Capitalized Value,’’ shall include (1) the acquisition
cost of owned airframes and aircraft engines;
(2) the total capitalized cost of obtaining airframes and engines under capital leases; and
(3) the cost of improvements to airframes
and engines obtained under operating leases.
(j) Column 11, ‘‘Allowance for Depreciation
or Amortization,’’ shall include (1) the accumulations of all provisions for losses due to
use and obsolescence that are applicable to
owned airframes and aircraft engines, (2) the
amount of amortization recorded for amortizing the value of airframes and engines obtained under capital leases, and (3) the

amount of amortization recorded for amortizing the value of improvements to airframes and aircraft engines obtained under
operating leases.
(k) Column 12, ‘‘Depreciated Cost or Amortized Value,’’ shall be calculated as either (1)
Acquired Cost (Column 10) less the Allowance for Depreciation (Column 11) or (2) Capitalized Value (Column 10) less Amortization
(Column 11).
(l) Column 13, ‘‘Estimated Residual
Value,’’ shall state, in dollars, the residual
value assigned to owned and capital-leased
airframes and aircraft engines, including any
overhaul value not subject to depreciation.
(m) Column 14, ‘‘Estimated Depreciable or
Amortizable Life (Months),’’ shall state the
estimated depreciable or amortizable life
from the date of acquisition of each airframe
and each group of aircraft engines.
[ER–755, 37 FR 19726, Sept. 21, 1972]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting part 241, section 23, see the
List of CFR Sections Affected, which appears
in the Finding Aids section of the printed
volume and on GPO Access.

Section 24

Profit and Loss Elements

Schedule P–1.1—Statement of Operations
(a) This schedule shall be filed semiannually by Group I air carriers with annual operating revenues below $20 million. Data reported on this schedule shall be for the overall or system operations of the air carrier.
(b) This schedule shall show the results of
operations for six-month periods ending June
30 and December 31. Data reported in the ‘‘12
Months-to-Date’’ column shall represent for
each individual item the sum of the amount
reported in the ‘‘Current Period’’ column and
the next previous six-month period.
(c) Each carrier shall insert in the space
provided for ‘‘OAG Code’’ its carrier code as
contained in the Official Airlines Guide
(OAG). If the OAG does not contain a carrier
code for the reporting carrier, a code will be
provided by the Office of Airline Information
upon request. This code will then be placed
in the space provided for ‘‘carrier code.’’
(d) ‘‘Operating Revenue’’ shall be put in
categories as follows:
(1) ‘‘Transport Revenue’’ shall include the
revenue generated by the performance of air
transportation services. This category shall
be subdivided as follows:
(i) ‘‘Scheduled Service’’ shall include all
transport revenue derived from operations
between pairs of points which are served on
a regularly scheduled basis. Transport revenue received from scheduled service operations shall be subdivided as follows:
(A) Passengers. Revenue generated from the
transportation of passengers shall be included in this category.

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(B) Other. Revenue generated by the transportation of property and mail shall be included in this category.
(ii) ‘‘Nonscheduled Service’’ shall include
all transport revenue derived from operations between pairs of points which are not
served on a regularly scheduled basis.
(2) ‘‘Transport-Related Revenue’’ shall include monies received for providing air
transportation facilities associated with the
performance of services which flow from and
are incidental to air transportation services
performed by the air carrier. This category
shall be subdivided as follows:
(i) Public Service Revenue. This category
shall include amounts of compensation paid
to the carrier under 49 U.S.C 41733.
(ii) Other. This category shall include other
transport-related revenue such as in-flight
sales, restaurant and food service (ground),
rental of property or equipment, limousine
service, interchange sales, and cargo pick-up
and delivery charges.
(e) ‘‘Operating Expense’’ shall be segregated as follows:
(1) ‘‘Flying Operations’’ shall include expenses incurred directly in the in-flight operation of aircraft and expenses incurred in the
holding of aircraft and aircraft operation
personnel in readiness for assignment to an
in-flight status.
(2) ‘‘Maintenance’’ shall include all expenses which are specifically identifiable
with the repair and upkeep of property and
equipment used in the performance of air
transportation.
(3) ‘‘General and Administrative’’ shall include that portion of all expenses of a general corporate nature and all other expenses
not provided for elsewhere which are related
to air transport operations either directly or
indirectly.
(4) ‘‘Depreciation and Amortization’’ shall
include all depreciation and amortization expenses applicable to property and equipment
used in providing air transportation services.
These expenses shall be segregated between
those applicable to owned property and
equipment and those applicable to property
and equipment which is leased.
(5) ‘‘Transport-Related Expense’’ shall include all expenses associated with the transport-related revenues reported on line 5 of
this schedule.
(f) ‘‘Operating Profit (Loss)’’ shall be computed by subtracting the total operating expenses from the total operating revenues.
(g) ‘‘Nonoperating Income and Expense’’
shall include all revenues and expenses resulting from commercial ventures which are
not inherently related to the performance of
air transport services. For example, the revenues and expenses related to operating a
hotel or motel would be reported under this
category. This category shall also include
the total interest expense incurred from all
sources and shall be subdivided as follows:

(1) Interest Expense.
(2) Other Nonoperating (Net).
(h) ‘‘Income Tax’’ shall reflect the provisions for accruals of Federal, State, local,
and foreign taxes based upon taxable income,
and computed at the normal and surtax rates
in effect during the current accounting year.
(i) ‘‘Discontinued Operations, Extraordinary Items or Accounting Changes’’ shall
reflect any earnings or losses from discontinued operations, the net of the tax amount
of extraordinary items, and the cumulative
effect of any changes in accounting principles.
(j) Any air carrier that does not file Schedule P–1(a) in accordance with the filing option described in section 22—General Reporting Instructions shall, for the sixth month of
any semi-annual period during which the option is exercised, type in the bottom margin
of this statement of operations the total
number of full-time and part-time employees
to be labeled as such and calculated in accordance with paragraph (d) of the reporting
instructions for Schedule P–1(a).
Schedule P–1.2—Statement of Operations
(a) This schedule shall be filed quarterly by
all Group II and Group III air carriers and
Group I air carriers that have annual operating revenues of $20 million or more.
(b) Route and charter carriers shall file
separate statements of operations for each
separate operating entity and for the overall,
or system operations.
(c) Data reported on this schedule shall
conform with the instructions pertaining to
profit and loss classifications within this
Uniform System of Accounts and Reports.
(d) Data reported in the ‘‘12 Months-toDate’’ column shall represent for each item
the sum of amounts reported in the ‘‘Quarter’’ column for the current and next previous three quarters.
(e) Group III air carriers shall subdivide
total Transport Revenues-Passenger (Account 3901) between Accounts 3901.1, Passenger-Flight Class and Account 3901.2 Passenger-Coach, only for operations that are
reported in the international entity (Atlantic, Pacific and Latin American). First class
and coach passenger revenues associated
with transport operations reported in the domestic entity shall be reported as a combined total in Account 3901 Transport Revenues-Passenger.
(f) All Group I and Group II air carriers
shall report first class and coach passenger
revenues as a combined total in Account 3901
Transport Revenues-Passenger, for both domestic and international entity operations.
However, U.S. air carriers in any carrier
group that elect to do so may continue to report first class and coach revenue data, if
they consider such voluntary reporting to be
less burdensome than changing their existing financial reporting system.

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Section 24

14 CFR Ch. II (1–1–05 Edition)

(g) Any air carrier that does not file Schedule P–1(a) in accordance with the filing option described in section 22—General Reporting Instructions shall, for the third month of
any calendar quarter during which the option is exercised, type in the bottom margin
of the system statement of operations the
total number of full-time and part-time employees to be labeled as such and calculated
in accordance with paragraph (d) of the reporting instructions for Schedule P–1(a).
Schedule P–1(a)—Interim Income Statement
(a) This schedule shall be filed by all air
carriers.
(b) This schedule shall be filed for the overall or system operations of the air carrier.
(c) Data reported on this schedule shall reflect the results of operations for the month
covered by the report and shall conform to
the instructions pertaining to profit and loss
classifications within this Uniform System
of Accounts and Reports.
(d) Air carriers shall report on this schedule:
(1) Total operating revenues,
(2) Total operating expenses,
(3) Operating profit or loss,
(4) Net income,
(5) Passenger revenues—scheduled service,
(6) Public service revenues (subsidy) and
other information on
(7) The total number of full-time and
(8) Part-time employees. Total number of
full-time employees and total number of
part-time employees shall reflect for the
overall or system operations of the air carrier the total number of full-time and parttime employees, respectively, who worked or
received pay for any part of the pay period(s)
ending nearest the 15th day of the month.
For the purposes of this part, ‘‘part-time employees’’ means those employees hired to
work less than the number of hours that is
customary or standard for their occupational
specialty.
(e) In the event of a labor strike, the
‘‘number of employees’’ to be reported on
this schedule shall be determined on and actual payroll basis. Actual payroll shall be determined in accordance with paragraph (d) of
these reporting instructions. An air carrier
that on October 24, 1978, held a certificate
issued under 49 U.S.C. 41102 shall also report
in a footnote on this schedule the number of
full-time employees who were deprived of
employment because of a strike (i.e., the
number of full-time employees who, but for a
strike, would have been included in the number reported in accordance with paragraph
(d)(7)).
Schedule P–2—Notes to BTS Form 41 Report
(a) This schedule shall be filed quarterly by
all Group II and Group III air carriers and

Group I air carriers that have annual operating revenues of $20 million or more.
(b) Route and charter air carriers shall file
this schedule for each separate operating entity and for the overall, or system operations
of the carrier.
(c) All substantive matters which may influence materially interpretations or conclusions in regard to the financial condition or
the earnings position of the air carrier which
are not clearly identified in the body of the
Form 41 report or which represent information that cannot be expressed adequately in
monetary terms shall be completely and
clearly stated in this schedule and cross-referenced to the affected account or accounts.
The informative disclosure on this schedule
for the system operations of the air carrier
shall conform, at the end of each carrier’s
fiscal or calendar year, with the footnotes
prepared for audited financial statements.
(d) The amounts and estimated delivery
dates of any purchase commitments of material size and not of a recurrent routine character shall be explained on this schedule. In
the case of commitments involving flight
equipment, the amount for each equipment
type may be given in total, including any engines, airframes and spares; but the number
of airframes and the number of engines by
type shall be given, as well as the estimated
delivery date for each complete aircraft. Reports on commitments other than for flight
equipment are required only in the December 31 report of each calendar year.
(e) Each scheduled air carrier shall include
on this schedule a description of each interruption in air transport operations, the aggregate effect of which is ten (10) percent or
more of the scheduled revenue plane-miles
which, except for the interruption, would
have been operated during the month or either of 2 consecutive months affected. The
information to be reported for each such
interruption in operations shall consist of:
(1) For the report period in which partial
or complete interruption first occurs, the nature of the interruption and dates of partial
and/or complete cessation of operations, as
applicable;
(2) For each report period until full resumption of operations, an estimate of the
revenue plane-miles canceled in each month
of the quarter because of the interruption;
and
(3) For the report period in which scheduled operations are resumed, dates of partial
and/or complete resumption, as applicable.
Schedule P–5.1—Aircraft Operating Expenses
(a) This schedule shall be filed by all Group
I air carriers. Group I air carriers that have
annual operating revenues of $20 million or
more shall file this schedule quarterly and
only report direct operating expense data
(lines 1 thru 9). Group I air carriers with annual operating revenues below $20 million

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Section 24

shall file this schedule semiannually and report both direct and indirect operating expense data (lines 1 thru 16).
(b) Subject to the provisions of Section
22(a), quarterly reports are due on May 10,
August 10, November 10 and February 10 for
the first, second, third and fourth calendar
quarters, respectively. Semiannual reports
are due on August 10 and February 10.
(c) Each carrier shall indicate in the space
provided its full corporate name and an ‘‘X’’
shall be inserted in the appropriate box to
indicate whether the data being reported are
quarterly or six months data. The periodending data shall be indicated in the space
provided.
(d) Route and charter air carriers subject
to the quarterly filing requirement shall file
this schedule for each operating entity of the
air carrier. Air carriers subject to the semiannual filing requirement shall file this
schedule for the overall or system operations
of the air carrier.
(e) This schedule shall show the direct and
indirect expenses incurred in aircraft operations plus total aircraft hours, gallons of
fuel issued, and aircraft days assigned to
service. Direct expense data applicable to
each aircraft type operated by the carrier
shall be reported in separate colums of this
schedule. Each aircraft type reported shall
be identified at the head of each column in
the space provided. ‘‘Aircraft Type’’ refers to
aircraft models such as B–707–100, B–707–200,
DC–10–40, Beech–18, Piper PA–32, etc, Aircraft Type designations are prescribed in the
Accounting and Reporting Directives, which
is available from the Board’s Information
Management Division. In the space provided
for ‘‘Aircraft Code’’ carriers shall insert the
four digit code which is prescribed in the Accounting and Reporting Directives for the reported aircraft type.
(f) Direct aircraft operating expenses shall
be reported in the following categories:
(1) Line 2 ‘‘Flying Operations (Less Rental)’’ shall be subdivided as follows:
(i) Line 3 ‘‘Pilot and Copilot’’ expense shall
include pilots’ and copilots’ salaries, and related employee benefits, pensions, payroll
taxes and personnel expenses.
(ii) Line 4 ‘‘Aircraft Fuel and Oil’’ expense
shall include the cost of fuel and oil used in
flight operations and nonrefundable aircraft
fuel and oil taxes.
(iii) Line 5 ‘‘Other’’ expenses shall include
general (hull) insurance, and all other expenses incurred in the in-flight operation of
aircraft and holding of aircraft and aircraft
operational personnel in readiness for assignment to an in-flight status that are not provided for otherwise on this schedule.
(2) Line 6 ‘‘Total Flying Operations (Less
Rentals)’’ shall equal the sum of lines 3, 4
and 5.
(3) Line 7 ‘‘Maintenance-Flight Equipment’’ shall include the cost of labor, mate-

rial and related overhead expended by the
carrier to maintain flight equipment, general services purchased for flight equipment
maintenance from associated or other outside companies, and provisions for flight
equipment overhauls.
(4) Line 8 ‘‘Depreciation and Rental-Flight
Equipment’’ expense shall include depreciation of flight equipment, amortization of
capitalized leases for flight equipment, provision for obsolescence and deterioration of
spare parts, and rental expense of flight
equipment.
(5) Line 9 ‘‘Total Direct Expense’’ shall
equal the sum of lines 6, 7 and 8.
(g) Line 10 Indirect aircraft operating expenses shall be reported only in total for all
aircraft types and shall be segregated according to the following categories:
(1) Line 11 ‘‘Flight Attendant Expense’’
shall include flight attendants’ salaries, and
related employee benefits, pensions, payroll
taxes and personnel expenses.
(2) Line 12 ‘‘Traffic Related Expense’’ shall
include traffic solicitor salaries, traffic commissions, passenger food expense, traffic liability insurance, advertising and other promotion and publicity expenses, and the
fringe benefit expenses related to all salaries
in this classification.
(3) Line 13 ‘‘Departure Related (Station)
Expense’’ shall include aircraft and traffic
handling salaries, landing fees, clearance,
customs and duties, related fringe benefit expenses and maintenance and depreciation on
ground property and equipment.
(4) Line 14 ‘‘Capacity Related Expense’’
shall include salaries and fringe benefits for
general management personnel, recordkeeping and statistical personnel, lawyers,
and law clerks, and purchasing personnel;
legal fees and expenses; stationery; printing;
uncollectable accounts; insurance purchasedgeneral; memberships; corporate and fiscal
expenses; and all other expenses which cannot be identified or allocated to some other
specifically identified indirect cost category.
(h) Line 15 ‘‘Total Indirect Expense’’ shall
equal the sum of lines 11, 12, 13 and 14.
(i) Line 16 ‘‘Total Operating Expense’’ shall
equal the sum of lines 9 and 15.
(j) Line 17 ‘‘Total Aircraft Hours’’ shall
equal the sum of revenue and nonrevenue
aircraft hours.
(k) Line 18 ‘‘Gallons of Fuel Issued’’ shall
equal the aircraft fuels issued (account Z921).
(l) Line 19 ‘‘Aircraft Days Assigned to
Service’’ equals the number of days that aircraft owned or acquired through rental or
lease are in the possession of the reporting
air carrier and are available for service on
the reporting carrier’s routes plus the number of days such aircraft are in service on
routes of others under wet-lease agreements.
Includes days in overhaul, or temporarily
out of service due to schedule cancellations.
Excludes days that newly acquired aircraft

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Section 24

14 CFR Ch. II (1–1–05 Edition)

are on hand but not available for productive
use, days dry-leased or rented to others, and
days in possession but formally withdrawn
from air transportation service.
Schedule P–5.2—Aircraft Operating Expenses
and Related Statistics
(a) This schedule shall be filed by all Group
II and Group III air carriers.
(b) Route and charter air carriers shall file
this schedule for each operating entity of the
air carrier.
(c) Data applicable to each aircraft type
operated by the air carrier shall be reported
in separate columns of this schedule. ‘‘Aircraft Type’’ refers to aircraft models (such as
B–707–100, B–707–300, DC–9–30, etc.) that are
prescribed in the Accounting and Reporting
Directives, which is available from the Office
of Airline Information. In the space provided
for ‘‘Aircraft Code’’ carriers shall insert the
four digit code which is prescribed in the Accounting and Reporting Directives for the reported aircraft type. For route air carriers,
expenses of operating aircraft provided by
other carriers under interchange agreements
shall be separately reported in total for all
such aircraft as if for a distinct aircraft
type. Interchange expenses applicable to aircraft of the same type as those owned or operated by the air carrier shall be distributed
in summary memo form as item 98.1 and 98.2
to each aircraft type owned or operated by
that air carrier. Aircraft types not generally
used in revenue service shall be separately
reported. If more than one type of aircraft is
involved, a separation of data relating to
each type of aircraft shall not be required.
(d) Each aircraft type for which a report is
being made shall be identified at the head of
each column in the space provided. Data applicable to aircraft designed primarily for
cargo services and only incidentally used for
passenger services shall be reported in separate columns, and the word ‘‘cargo’’ shall be
inserted after the aircraft type at the head of
the column. The prescribed reporting by aircraft types may be reviewed from time to
time upon request by individual air carriers,
or upon the initiative of the BTS, and
groupings of aircraft types for reporting purposes may be prescribed or amended in specific instances.
(e) Italicized codes and item titles do not
constitute accounts or account numbers prescribed for air carrier accounting, but shall
be used for reporting purposes only.
(f) Item 79.6 ‘‘Applied Maintenance Burden’’ shall reflect a memorandum allocation
by each air carrier of the total expenses included in subfunction 5300 ‘‘Maintenance
Burden’’ between maintenance of flight
equipment, by aircraft type, and maintenance of ground property and equipment.
The allocation of subfunction 5300 (maintenance burden) shall include the net effect of
charges and credits to profit and loss ac-

count 5272 Flight Equiment Airworthiness
Provisions.
(g) Item 73 ‘‘Obsolescence and Deterioration—Expendable Parts’’ shall reflect (for
obsolescence and deterioration of flight
equipment expandable parts) the gross provisions for losses in value of expendable parts
during the current accounting period offset
by any credits applicable to the current period for adjustments for excess inventory
levels determined pursuant to section 6–1311.
(h) The total of function 5100 ‘‘Flying Operations’’ reported on this schedule shall agree
with corresponding amounts reported on
Schedule P–1.2.
Schedule P–6—Operating Expenses by
Objective Groupings
(a) This schedule shall be filed quarterly by
all Group II and Group III air carriers and
Group I air carriers that have annual operating revenues of $20 million or more.
(b) Route and charter air carriers shall file
this schedule for each separate operating entity.
(c) Line 36 ‘‘Total Operating Expenses’’
shall agree with the corresponding amount
reported on Schedule P–1.
Schedule P–7—Operating Expenses by Functional Groupings—Group III Air Carriers
(a) This schedule shall be filed by all Group
III air carriers.
(b) Route and charter air carriers shall file
this schedule for each operating entity of the
air carrier.
(c) Line 38 ‘‘Total Operating Expenses’’
shall agree with the corresponding amount
reported on Schedule P–1.2.
Schedule P–10—Employment Statistics by
Labor Category
(a) This schedule shall be filed annually by
all Group II and Group III air carriers and
Group I air carriers that have annual operating revenues of $20 million or more.
(b) Separate sets of this schedule shall be
filed for each operating entity of the air carrier. Employees will be allocated to the reporting entities on a basis consistent with
that used in the allocation of salaries for
Form 41 financial reporting purposes.
(c) Column 3, ‘‘Number of Employees,’’
shall reflect, for each category in column 1,
the weighted average number of full-time
employees who received pay for any part of
the calendar year. In determining the
weighted average, all temporary or parttime employees shall be restated, based on
their hours paid, as an equivalent number of
full-time employees. The calculation shall be
based on a standard full-time 2,080/hour year
with overtime hours excluded from the computation.
(d) Labor category description—‘‘Other
personnel’’ shall include all employees whose

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Section 24

salary is chargeable to accounts 30, 32, 34 and
35 in this Uniform System of Accounts and
Reports.
(e) Labor category description—‘‘Transport-related’’ shall include all employees
whose salary is not chargeable to one of the
various salary accounts contained in the
Uniform System of Accounts and Reports.
For example, this category would include
those employees who work in transport-related operations and other activities for
which a separate payroll account is not prescribed. The number of employees reported
as transport-related shall be calculated in
accordance with paragraph (c) of these reporting instructions.
Schedule P–12(a)—Fuel Consumption by
Type of Service and Entity
(a) This schedule shall be filed monthly by
all Group II and Group III air carriers and
Group I air carriers that have annual operating revenues of $20 million or more.
(b) A single copy (original only) of this
schedule shall be filed to report monthly fuel
consumption data by type of service and entity.
(c) For the purposes of this schedule, type
of service shall be either scheduled service or
nonscheduled service as those terms are defined in section 03 of part 241.
(d) For the purpose of this schedule, scheduled service shall be reported separately for:
(1) Intra-Alaskan operations; (2) domestic
operations, which shall include all operations within and between the 50 States of
the United States (except Intra-Alaska), the
District of Columbia, the Commonwealth of
Puerto Rico and the United States Virgin Islands and Canadian transborder operations;
(3) Atlantic operations (excluding Bermuda);
(4) Pacific operations which shall include the
North/Central Pacific, South Pacific (including Australia) and the Trust Territories; and
(5) Latin American operations which shall
include the Caribbean (including Bermuda
and the Guianas), Mexico and South/Central
America.
(e) For the purpose of this schedule, nonscheduled service shall be reported separately for domestic operations and international operations as defined in paragraph
(d) above, except that domestic and international MAC operations shall be reported
on separate lines.
(f) The cost data reported on each line
shall represent the average cost of fuel, as
determined at the station level, consumed in
that entity.
(g) The cost of fuel shall include shrinkage
but exclude (1) ‘‘through-put’’ and ‘‘in to
plane’’ fees, i.e., service charges or gallonage
levies assessed by or against the fuel vendor
or concessionaire and passed on to the carrier in a separately identifiable form and (2)
nonrefundable Federal and State excise
taxes. However, ‘‘through-put’’ and ‘‘in to

plane’’ charges that cannot be identified or
segregated from the cost of fuel shall remain
a part of the cost of fuel as reported on this
schedule.
(h) Each air carrier shall maintain records
for each station showing the computation of
fuel inventories and consumption for each
fuel type. The periodic average cost method
shall be used in computing fuel inventories
and consumption. Under this method, an average unit cost for each fuel type shall be
computed by dividing the total cost of fuel
available (Beginning Inventory plus Purchases) by the total gallons available. The
resulting unit cost shall then be used to determine the ending inventory and the total
consumption costs to be reported on this
schedule.
(i) Where amounts reported for a specific
entity include other than Jet A fuel, a footnote shall be added indicating the number of
gallons and applicable costs of such other
fuel included in amounts reported for that
entity.
(j) Where any adjustment(s) recorded on
the books of the carrier results in a material
distortion of the current month’s schedule,
carriers shall file a revised schedule P–12(a)
for the month(s) affected.
(k) Data reported on this schedule shall be
withheld from public release until the quarterly Form 41 P schedules for the calendar
quarter to which the monthly schedules relate are due at the BTS. However, aggregate
data may be released before that time without identifying individual carriers. Provisions governing the due dates for submitting
the quarterly P schedules are contained in
paragraphs (a) and (b) of section 22 of this
part. Individual carrier fuel data withheld
from public disclosure may be disclosed by
the BTS to:
(1) Parties to any proceeding before the
DOT to the extent such material is relevant
and material to the issues in the proceeding
upon a determination to this effect by the
administrative law judge assigned to the
case or by the DOT;
(2) Agencies and other components of the
Federal Government for their internal use
only; and
(3) Such persons and in such circumstances
as the BTS determines to be in the public interest or consistent with its regulatory functions and responsibilities.
(Approved by the Office of Management and
Budget under control number 2138–0013)
[ER–755, 37 FR 19726, Sept. 21, 1972, as amended by 241–58, 54 FR 5597, Feb. 6, 1989]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting part 241 section 24, see the
List of CFR Sections Affected, which appears
in the Finding Aids section of the printed
volume and on GPO Access.

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Section 25

14 CFR Ch. II (1–1–05 Edition)

TRAFFIC REPORTING REQUIREMENTS
Section 25
ments

Traffic and Capacity Ele-

General Instructions. (a) All prescribed reporting for traffic and capacity elements
shall conform with the data compilation
standards set forth in section 19—Uniform
Classification of Operating Statistics.
(b) Carriers submitting Schedule T–100
shall use magnetic computer tape or IBM
compatible disk for transmitting the prescribed data to the Department. Upon good
cause shown, OAI may approve the request of
a U.S. air carrier, under section 1–2 of this
part, to use hardcopy data input forms or
submit data via e-mail.
Schedule T–8—Report of all-cargo
operations.
(a) This schedule shall be filed annually by
all air carriers that conduct all-cargo operations under certificates issued under 49
U.S.C. 41103.
(b) Data reported on this schedule shall include only results of operations conducted in
all-cargo aircraft. Data shall be segregated
between domestic all-cargo operations conducted within the geographic limitations of
section 418 certificates and all other allcargo operations.
(c) Statement of operations. This statement
shall include the following elements:
(1) Total operating revenue, categorized as
follows:
(i) Transport revenues from the carriage of
property in scheduled and nonscheduled service;
(ii) Transport revenues from the carriage
of mail in scheduled and nonscheduled service; and
(iii) Transport-related revenues.
(2) Total operating expenses; and
(3) Operating profit or loss, computed by
subtracting the total operating expenses
from the total operating revenues.
(d) Summary of traffic and capacity statistics. This summary shall include the following elements:
(1) Total revenue ton-miles, which are the
aircraft miles flown on each flight stage
times the number of tons of revenue traffic
carried on that stage. They shall be categorized as follows:
(i) Property; and
(ii) Mail.
(2) Revenue tons enplaned, reflecting the
total revenue tons of cargo loaded on aircraft during the annual period;
(3) Available ton-miles, reflecting the total
revenue ton-miles available for all-cargo
service during the annual period, and computed by multiplying aircraft miles flown on
each flight stage by the number of tons of
aircraft capacity available for that stage;

(4) Aircraft miles flown, reflecting the
total number of aircraft miles flown in cargo
service during the annual period;
(5) Aircraft departures performed, reflecting the total number of take-offs performed
in cargo service during the annual period;
and
(6) Aircraft hours airborne, reflecting the
aircraft hours of flight (from take-off to
landing) performed in cargo service during
the annual period.
Schedule T–100 U.S. Air Carrier Traffic and
Capacity Data By Nonstop Segment and
On-Flight Market
(a) Schedule T–100 collects detailed onflight market and nonstop segment data on
all revenue flights flown by U.S. certificated
air carriers. This schedule is filed monthly.
Separate data shall be reported for each operating entity (Latin America, Atlantic, Pacific; International, or Domestic) of the air
carrier. Data for each operating entity shall
be reported using the five digit entity code
prescribed under section 19–5(c) of this part.
(b) Guidelines for reporting the automated
monthly Schedule T–100 are included in the
Appendix to this section.
(c) Reported data shall be compiled as aggregates of the basic data elements and service classes contained in sections 19–4 and 19–
5 of this part.
(d) Joint-service operations. The air carrier
in operational control of the aircraft (the
carrier that uses its flight crews under its
own FAA operating authority) must report
joint-service operations.
Schedule T–100(f) Foreign Air Carrier Traffic
Data by Nonstop Segment and On-Flight
Market
(a) This Schedule T–100(f) collects detail
on-flight market and nonstop segment data.
This schedule shall be filed monthly by each
foreign (non-U.S.) air carrier conducting operations to or from the United States with
large aircraft pursuant to Section 41302 permits or exemption authority. Reported traffic data shall include all services affecting
the United States, as prescribed in this part.
(b) Guidelines for reporting the monthly
Schedule T–100(f) are included in the Appendix to § 217.10 of this chapter. Copies of these
instructions are provided to each foreign air
carrier submitting the traffic data. Copies
are also available from the Office of Airline
Information, K–25, Room 4125, U.S. Department of Transportation, 400 Seventh St.,
SW., Washington, DC 20590.
(c) The reported data shall be compiled as
aggregates of the basic data elements and
service classes prescribed in sections 19–4 and
19–5 of this part.

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Office of the Secretary, DOT

Section 25

APPENDIX TO SECTION 241.25 OF 14 CFR PART
241-INSTRUCTIONS TO U.S. AIR CARRIERS FOR
REPORTING TRAFFIC AND CAPACITY DATA ON
FORM 41 SCHEDULE T–100
(a) Applicability. Each large U.S. air carrier
that holds a 49 U.S.C. ‘‘41102 certificate must
file the monthly Schedule T–100.
(b) Schedules, Frequency, and entity: (1)
Schedule T–100 collects summarized flight
stage data by reporting entity for scheduled
and nonscheduled passenger, and cargo operations. The term entity refers to the geographic location designator prescribed by the
Department in ‘‘241.19–5(c)(2). Thus, domestic
entity operations are distinguished from
international entity operations.
(2) [Reserved]
(c) Format of reports:
(1) Automatic Data Processing (ADP) magnetic tape. Refer to paragraph (f) of this appendix for instructions pertaining to mainframe and minicomputer reporting. The Department will issue ‘‘Accounting and Reporting Directives’’ to make necessary technical
changes to these T–100 instructions. Technical changes which are minor in nature do
not require public notice and comment.
(2) Microcomputer diskette—(i) Optional specification. If an air carrier desires to use its
personal computers (PC’s), rather than mainframe or minicomputers to prepare its data
submissions, the following specifications for
filing data on diskette media apply:
(ii) Reporting medium. Microcomputer ADP
data submission of T–100 information must
be on IBM compatible disks. Carriers wishing
to use a different ADP procedure must obtain written approval to do so from the BTS
Assistant Director—Airline Information. Requests for approval to use alternate methods
must disclose and describe the proposed data
transmission methodology. Refer to paragraph (k) of this appendix for microcomputer
record layouts.
(iii) Microcomputer file characteristics.
The files will be created in ASCII delimited
format, sometimes called Data Interchange
Format (DIF). This form of recording data
provides for variable length fields (data elements) which, in the case of alphabetic data,
are enclosed by quotation marks (‘‘) and sepField No.

Positions

1 ......................
2 ......................
3 ......................
4 ......................
5 ......................
6 ......................
7 ......................
8 ......................
9 ......................
10 ....................
11 ....................
12 ....................
13 ....................
14 ....................

1
2–6
7–12
13–15
16–18
19
20–23
24–28
29–38
39–45
46–52
53–62
63–72
73–77

arated by a comma (,) or tab. Numeric data
elements that are recorded without editing
symbols are also separated by a comma (,) or
tab. The data are identified by its juxtaposition within a given record. Therefore, each
record must contain the exact number of
data elements, all of which must be
juxtapositionally correct. Personal computer
software including most spreadsheets, data
base management programs, and BASIC are
capable of producing files in this format.
(d) Filing date for reports. The reports must
be received at BTS within 30 days following
the end of each reporting period.
(e) Address for filing: Data Administration
Division, K–14, Room 4125, Office of Airline
Information, Bureau of Transportation Statistics, U.S. Department of Transportation,
400 Seventh Street SW., Washington, DC
20590–0001.
(f) ADP format for magnetic tape—(1) Magnetic tape specifications. IBM compatible 9track EBCDIC recording. Recording density
of 6250 or 1600 bpi. The order of recorded information is:
Volume label
Header label
Data records
Trailer label
(2) [Reserved]
(g) External tape label information:
Carrier name
Report date
File identification
Carrier address for return of tape reel
(h) Standards. It is the policy of the Department to be consistent with the American
National Standards Institute and the Federal Standards Activity in all data processing and telecommunications matters. It is
our intention that all specifications in this
application be in compliance with standards
promulgated by these organizations.
(i) Volume, header, and trailer label formats:
(1) Use standard IBM label formats. The
file identifier field of the header labels
should be ‘‘T–100.SYSTEM’’.
(2) [Reserved]
(j) Magnetic tape record layouts for T–100—(1)
Nonstop segment record layout:

Mode
1T ..................
5T ..................
6T ..................
3T ..................
3T ..................
1T ..................
4T ..................
5N ..................
10N ................
7N ..................
7N ..................
10N ................
10N ................
5N ..................

Description
Record type code (S = nonstop segment).
Carrier entity code.
Report date (YYYYMM).
Origin airport code.
Destination airport code.
Service class code (F, G, L, N, P or R).
Aircraft type code.
Revenue departures performed (F, G, L, N, P, R510).
Available capacity payload (lbs) (F, G, L, N, P, R270).
Available seats (F, L, N310).
Passengers transported (F, L, N130).
Rev freight transported (F, G, L, N, P, R237)(in lbs).
Revenue mail transported (F, G, L, N, P, R239) (in lbs).
Revenue aircraft departures scheduled (F, G520).

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Section 25
Field No.

14 CFR Ch. II (1–1–05 Edition)
Positions

15 ....................
16 ....................

78–87
88–97

Mode
10N ................
10N ................

Description
Rev hrs, ramp-to-ramp (F, G, L, N, P, R630) (in minutes).
Rev hrs, airborne (F, G, L, N, P, R610) (in minutes).

T= Text.
N= Numeric.

(2) On-flight market record layout:
Field No.
1
2
3
4
5
6
7
8
9

Positions

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

1
2–6
7–12
13–15
16–18
19
20–26
27–36
37–46

Mode
1T ..................
5T ..................
6T ..................
3T ..................
3T ..................
1T ..................
7N ..................
10N ................
10N ................

Description
Record type: M = on-flight market record.
Carrier entity code.
Report date (YYYYMM).
Origin airport code.
Destination airport code.
Service class code (F, G, L, N, P or R).
Total passengers in market (F, L, N110).
Rev freight in market (F, G, L, N, P, R217) (in lbs).
Revenue mail in market (F, G, L, N, P, R219) (in lbs).

T=Text.
N-Numeric.

(k) Record layouts for microcomputer diskettes. The record layouts for diskettes are
generally identical to those shown for magnetic tape, with the exception that
delimiters (quotation marks, tabs and commas) are used to separate fields. It is necessary that the order of fields be maintained
in all records.
(1) File characteristics. The files will be created in ASCII delimited format, sometimes
called Data Interchange Format (DIF). This
form of recording data provides for variable
length fields (data elements) which, in the
case of alphabetic data, are enclosed by
quotation marks (‘‘) and separated by a
comma (,) or tab. Numeric data elements
that are recorded without editing symbols
are also separated by a comma (,) or tab. The
data are identified by their juxtaposition
within a given record. Therefore, it is critical that each record contain the exact number of data elements, all of which must be
juxtapositionally correct. PC software including most spreadsheets, data base management programs, and BASIC produce
minidisk files in this format.
(2) File naming conventions for diskettes. For
microcomputer reports, each record type
shall be contained in a separate DOS file on
the same physical diskette. The following
DOS naming conventions should be followed:
Record type S = SEGMENT.DAT
Record type M = MARKET.DAT
(l) Discussion of Reporting Concept. (1)
Schedule T–100 collects summarized flight
stage data and on-flight market data. All
traffic statistics shall be compiled in terms
of each revenue flight stage as actually performed. The detail T–100 data shall be maintained in such a manner as to permit monthly summarization and organization into two
basic groupings. The first grouping, the non-

stop segment information, is to be summarized by equipment type, within class of
service, within pair-of-points, without regard
to individual flight number. The second
grouping requires that the enplanement/
deplanement information be broken out into
separate units called on-flight market
records, which shall be summarized by class
of service, within pair-of-points, without regard for equipment type or flight number.
(2) [Reserved]
(m) Joint Service. (1) Joint-service operations.
The Department may authorize joint-service
operations between two direct air carriers.
Examples of these joint-service operations
are: Blocked-space agreements; part-charter
agreements; code-sharing agreements; wetlease agreements, and other similar arrangements.
(i) Joint-service operations are reported by
the carrier in operational control of the
flight, i.e., the carrier that uses its flight
crews under its own FAA operating authority. The traffic moving under these agreements is reported on Schedule T–100 the
same way as any other traffic on the aircraft.
(ii) If there are questions about reporting a
joint-service operation, contact the BTS Assistant Director—Airline Information (fax
no. 202 366–3383, telephone no. 202 366–4373).
(iii) Operational control. The air carrier in
operational control of the aircraft (the carrier that uses its flight crew under its own
FAA operating authority) must report jointservice operations.
(2) [Reserved]
(n) Glossary of data elements. § 241.19–5 and
§ 241.03.
(Approved by the Office of Management and
Budget under control number 2138–0013)
[ER–755, 37 FR 19726, Sept. 21, 1972]

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Office of the Secretary, DOT

§ 243.5

EDITORIAL NOTE: For FEDERAL REGISTER citations affecting part 241, section 25, see the
List of CFR Sections Affected, which appears
in the Finding Aids section of the printed
volume and on GPO Access.

PART 243—PASSENGER MANIFEST
INFORMATION
Sec.
243.1 Purpose.
243.3 Definitions.
243.5 Applicability.
243.7 Information collection requirements.
243.9 Procedures for collecting and maintaining the information.
243.11 Transmission of information after an
aviation disaster.
243.13 Filing requirements.
243.15 Conflicts with foreign laws.
243.17 Enforcement.
AUTHORITY: 49 U.S.C. 40101, 40101nt., 40105,
40113, 40114, 41708, 41709, 41711, 41501, 41702,
41712, 44909, 46301, 46310, 46316; section 203 of
Pub. L. 101–604, 104 Stat. 3066 (22 U.S.C. 5501–
5513), Title VII of Pub. L. 104–264, 110 Stat.
3213 (22 U.S.C. 5501–5513) and Pub. L. 105–148,
111 Stat. 2681 (49 U.S.C. 41313.)
SOURCE: Docket No. OST–95–950, 63 FR 8280,
Feb. 18, 1998, unless otherwise noted.

§ 243.1 Purpose.
The purpose of this part is to ensure
that the U.S. government has prompt
and adequate information in case of an
aviation disaster on covered flight segments.
§ 243.3 Definitions.
Air piracy means any seizure of or exercise of control over an aircraft, by
force or violence or threat of force or
violence, or by any other form of intimidation, and with wrongful intent.
Aviation disaster means:
(1) An occurrence associated with the
operation of an aircraft that takes
place between the time any passengers
have boarded the aircraft with the intention of flight and the time all such
persons have disembarked or have been
removed from the aircraft, and in
which any person suffers death or serious injury, and in which the death or
injury was caused by a crash, fire, collision, sabotage or accident;
(2) A missing aircraft; or
(3) An act of air piracy.
Contact means a person not on the
covered flight or an entity that should
be contacted in case of an aviation dis-

aster. The contact need not have any
particular relationship to a passenger.
Covered airline means:
(1) certificated air carriers, and
(2) foreign air carriers, except those
that hold Department of Transportation authority to conduct operations
in foreign air transportation using only
small aircraft (i.e., aircraft designed to
have a maximum passenger capacity of
not more than 60 seats or a maximum
payload capacity of not more than
18,000 pounds).
Covered flight segment means a passenger-carrying flight segment operating to or from the United States (i.e.,
the flight segment where the last point
of departure or the first point of arrival is in the United States). A covered flight segment does not include a
flight segment in which both the point
of departure and point of arrival are in
the United States.
Full name means the given name,
middle initial or middle name, if any,
and family name or surname as provided by the passenger.
Passenger means every person aboard
a covered flight segment regardless of
whether he or she paid for the transportation, had a reservation, or occupied a seat, except the crew. For the
purposes of this part, passenger includes, but is not limited to, a revenue
and non-revenue passenger, a person
holding a confirmed reservation, a
standby or walkup, a person rerouted
from another flight or airline, an infant held upon a person’s lap and a person occupying a jump seat. Airline personnel who are on board but not working on that particular flight segment
would be considered passengers for the
purpose of this part.
United States means the States comprising the United States of America,
the District of Columbia, and the territories and possessions of the United
States, including the territorial sea
and the overlying airspace.
U.S. citizen means United States nationals as defined in 8 U.S.C. 1101(a)(22).
§ 243.5

Applicability.

This part applies to covered flight
segments operated by covered airlines.
(See § 243.3 of this part)

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