This edition of the Cozen O’Connor Aviation Regulatory Update discusses DOT’s proposed rule on the use of cell phones to make voice calls on commercial flights, the results of DOT’s negotiated rulemaking on accessible in-flight entertainment and accessible lavatories on single-aisle aircraft to accommodate disabled passengers, DOT’s approval of Norwegian Air International’s foreign air carrier permit, the FAA’s increase of overflight fees, PHMSA amendments to the Hazardous Materials Regulations, the DOT Inspector General’s audit report on FAA oversight of unmanned aircraft/drones and initiation of an audit of the FAA’s oversight of runway safety, DOT’s updated enforcement policy regarding extended tarmac delays, DOT’s denial of American Airlines and Qantas Airways’ request for antitrust immunity, the Justice Department’s clearance of the Alaska Airlines-Virgin America merger, and the latest DOT and FAA enforcement actions.

Department of Transportation

Regulatory

DOT Issues Proposed Rule Regarding Voice Calls Using Mobile Wireless Devices Onboard Commercial Aircraft

DOT issued a notice of proposed rulemaking requesting comments on whether airlines should be allowed to prohibit, restrict or allow voice calls by passengers using passenger-supplied cellular telephones and other passenger-supplied mobile wireless devices on domestic and/or international scheduled or charter flights to/from or within the United States. If such voice calls are allowed, the NPRM proposes to require sellers of air transportation to provide consumers with advance notice if the airline operating their flight allows passengers to make voice calls using mobile wireless devices. Airlines and other sellers of air travel would be required to provide “early disclosure” to consumers so that they would know prior to purchasing a ticket that voice calls are permitted on a particular flight. Such notice to consumers would be required in flight itinerary and schedule displays, including on websites and mobile applications, and during oral communications. The advance notice requirement would not apply to small U.S. and foreign air carriers that operate to/from or within the United States using only aircraft with a designed seating capacity of fewer than 60 seats or to ticket agents that qualify as a small business. No advance notice will be required if an airline prohibits voice calls. Airlines would remain subject to any other technical, safety, or security rules that do prohibit or restrict voice calls (if the Federal Communications Commission continues to prohibit the use of certain commercial mobile spectrum bands, that prohibition would apply even if DOT adopts the proposed rule). Although not proposing a ban on voice calls on aircraft, DOT is also requesting comments on whether such a prohibition would be the “more appropriate regulatory approach.” Comments on the proposed rule are due February 13, 2017.

DOT Advisory Committee Recommends Measures to Improve Accessibility for Disabled Passengers to Single-Aisle Aircraft Lavatories and In-Flight Entertainment

As part of a negotiated rulemaking on certain disabled passenger-related issues, DOT announced that the ACCESS Advisory Committee agreed on recommendations to improve the accessibility of single-aisle aircraft lavatories and in-flight entertainment systems. The Committee issued a resolution recommending that airlines be required to provide accessible lavatories on certain single-aisle aircraft and enhance safety and maneuverability standards for the use of onboard wheelchairs. The recommendations would require airlines to have an accessible lavatory on single-aisle aircraft containing more than 125 passenger seats, comparable to the lavatories on twin-aisle aircraft. The Committee also recommended requiring airlines to ensure that newly installed in-flight entertainment systems be accessible to hearing-impaired and vision-impaired passengers. DOT intends to issue a notice of proposed rulemaking on these recommendations in July 2017. Due to the ACCESS Committee’s inability to reach consensus on whether or how the definition of “service animals” should be amended, DOT plans to draft its own rules regarding this issue.

DOT Grants Final Approval for Norwegian Air International’s Request for a Foreign Air Carrier Permit

DOT issued a final order approving Norwegian Air International’s (NAI) long-pending request for a foreign air carrier permit to allow the carrier to operate air service to/from the United States under the U.S.-EU open skies agreement. The carrier’s application had been pending for three years due to intense opposition from certain U.S. carriers and labor unions, which claimed that NAI was a “flag of convenience” carrier, organized in and operated from Ireland to evade tougher hiring and employment laws in Norway. In approving NAI’s application, DOT stated that the case was “among the most novel and complex ever undertaken by the Department,” but that U.S. law and bilateral obligations left DOT “no avenue to reject the application.”

DOT Updates Enforcement Policy on Extended Tarmac Delays

DOT issued a notice amending its enforcement policy regarding extended tarmac delays. The notice defines “excessive tarmac delay” as a tarmac delay exceeding three hours for a domestic flight and four hours for an international flight. An excessive tarmac delay had previously been defined in 49 U.S.C. § 42301 as a tarmac delay that “lasts for a length of time as determined by [DOT],” which DOT defined as three hours for a domestic flight and four hours for an international flight. The change was mandated by the FAA Extension, Safety, and Security Act of 2016, which also required DOT to revise the way that excessive tarmac delays are measured in the case of departure delays for U.S. carriers. DOT now measures a tarmac delay as beginning “after the main aircraft door is closed in preparation for departure” and ending when a U.S. carrier “begin[s] to return the aircraft to a suitable disembarkation point.” Prior to the 2016 Act, a departure tarmac delay was considered to have begun after passengers were boarded and were no longer free to deplane and to have ended when passengers were given the opportunity to deplane. The DOT notice also stated that DOT’s Enforcement Office will not take enforcement action against U.S. and foreign air carriers for not complying with 14 CFR 259.4(b)(1) and (2) with respect to departure delays as long as airlines begin to return aircraft to the gate or another suitable disembarkation point no later than three hours for domestic flights and no later than four hours for international flights after the main aircraft door has closed in preparation for departure. DOT’s Enforcement Office considers an aircraft to have begun the process of returning to a suitable disembarkation point when permission to do so is granted by FAA air traffic control, an airport authority, or other relevant authority directing the aircraft’s operations while on the tarmac. If the aircraft is in an area controlled by the carrier, the Enforcement Office considers an aircraft to have begun the process of returning to a suitable disembarkation point when the pilot begins maneuvering the aircraft to the disembarkation point. DOT said that it is actively working on a rulemaking to address lengthy tarmac delays as required by the 2016 Act.

DOT Tentatively Denies American Airlines/Qantas Airways Antitrust Immunity Request

DOT issued an Order to Show Cause tentatively denying American Airlines and Qantas Airways’ joint application for antitrust immunity for their alliance agreements that would allow the carriers to plan and price their services jointly, and share revenues and costs, on routes between the United States and Australia/New Zealand. DOT said that the proposed alliance expansion would harm competition and reduce consumer choice in the U.S.-Australasia market by combining the airline with the largest U.S.-Australasia traffic share, Qantas, with the largest U.S. airline, American. DOT contended that American is “likely the only remaining U.S. airline positioned to enter and expand services” in the U.S.-Australasia market. DOT cited the fact that American/Qantas would account for nearly 60 percent of U.S.-Australia seats, the geographic and demographic character of the U.S.-Australasia market, which features “long, thin markets that are isolated from other global traffic flows,” and limited potential for competing networks to discipline the proposed alliance, as reasons for denying the carriers’ application. DOT asserted that many of the public benefits touted by the carriers could be obtained through traditional arms-length cooperation such as codesharing. The carriers subsequently filed a notice of withdrawal and motion to dismiss their application.

DOT Extends Compliance Deadlines for Passenger Protection Rules on Codeshare Disclosures and Undisclosed Biasing of Fare Information

DOT issued a notice extending the compliance deadline for certain provisions of its third set of passenger protection rules, commonly known as “PP3.” DOT is extending the compliance date from December 5, 2016, to February 15, 2017, for its new Part 256 prohibition on undisclosed biasing based on carrier identity by carriers and ticket agents in any electronic displays of the fare, schedule or availability information of multiple carriers. DOT also extended the compliance deadline to February 15, 2017, for its amendments to 14 C.F.R. Part 257 that: (a) codify the statutory requirement that carriers and ticket agents marketing to U.S. consumers disclose any code-share arrangements with respect to flights within, to or from the U.S. in a format that is “easily visible” to consumers on their websites on the first fare display presented in response to a search of a requested itinerary for each itinerary involving a code-share operation; (b) codify the requirement that code-share disclosures be “immediately adjacent to the itinerary displaying the flight operated under a code-share arrangement and in a font size that is not smaller than the font size of the flight identified under the marketing carrier’s name and/or code in the itinerary display;” (c) adopt a “simplified format” for code-share disclosures displayed via mobile websites and apps by allowing the disclosure of only the corporate name of the operating carrier; (d) require code-share disclosures made during oral communication to be provided at the first time the flight is offered by a carrier or ticket agent or in the first response to a consumer’s inquiry; (e) clarify that if an airline provides schedule information to a GDS, it is required to provide code-share information to the GDS, which will, in turn, provide the information to ticket agents and consumers; and (f) retain the requirement that written disclosure of code-share arrangements be provided in ticket confirmations “at the time of purchase,” with each flight segment involving a code-share arrangement that has its own flight number identified individually with the disclosure information immediately adjacent to the flight number (if a single-flight-number service involves one or more code-share segments, each code-share segment must be identified individually with the disclosure information immediately adjacent to that flight if there are different operating carriers on the segments). DOT retained the compliance date of January 1, 2018, for the PP3 provisions that (1) expand the number of carriers that are required to report airline service quality data, and (2) require carriers submitting airline service quality data to separately report such data for their domestic scheduled flights operated by code-share partners.

DOT Inspector General Issues Audit Report Critical of the FAA’s Oversight of Unmanned Aircraft/Drones

DOT’s Office of the Inspector General (OIG) issued an audit report critical of the FAA’s oversight of unmanned aircraft systems (UAS)/drones. The report found that the FAA’s process for exempting civil UAS/drones used by the agency prior to its publication of UAS regulations earlier this year does not adequately verify that drone operators actually meet or understand the conditions and limitations of their exemptions. The report also contends that although the FAA has taken steps to advance UAS technology, it has not established a risk-based safety oversight process for civil UAS operations focusing on emerging operational risks. The report asserts that the FAA lacks “a robust data reporting and tracking system for UAS activity,” and as a result, is taking a “reactive approach” to UAS regulation. The report recommends that the FAA: 1) establish specific procedures for updating and maintaining UAS guidance to keep pace with technological developments; 2) develop comprehensive and updated training for safety inspectors on UAS technologies and FAA rules and guidance related to UAS oversight; 3) implement an inspection process for commercial UAS operators based on operational factors (e.g., location, number of operations, and type of activity) to verify compliance with FAA regulations; 4) establish a risk-based UAS oversight plan to ensure safe UAS operations; 5) coordinate existing agency UAS databases to facilitate safety analysis; and 6) ensure that UAS data collected by the agency is shared with field oversight offices to assist FAA inspectors with their oversight of civil UAS operations.

DOT Inspector General Announces Audit of FAA Runway Safety Oversight

DOT’s OIG issued a memorandum announcing its intention to begin an audit in January 2017 of the FAA’s runway safety oversight, focusing on runway incidents involving unauthorized aircraft, vehicles, or people on runways. The audit is being conducted to evaluate the FAA’s progress in implementing short-, medium-, and long-term initiatives for addressing the “alarming” increase in runway incursions.

Enforcement

Frontier Airlines Penalized for Alleged Violations of DOT Advertising Regulations

A consent order was issued by DOT assessing $60,000 in civil penalties against Frontier Airlines for alleged violations of DOT’s full-fare advertising requirements under 14 C.F.R. § 399.84. Frontier allegedly displayed fare advertisements that offered air fares for “a buck” or “$1 + taxes and fees” in various e-mail, website and social media advertisements that displayed the amounts of the fare and separate amounts for taxes and fees either in the same font, style, and size or showed the total price in a smaller font size. In response, Frontier stated that it does not believe its advertisements were false or misleading and that the total fare was “clearly and accurately displayed,” that the advertisements did not hide the full fare, and that the base fare (without taxes and fees) was not in a font larger than the total fare. Frontier contended that it received no consumer complaints about the fare displays and that it took immediate corrective actions once it was notified of DOT’s concerns. Frontier was ordered to pay $30,000 within 30 days from the issuance date of the consent order, with the remaining $30,000 due and payable if, within one year, Frontier violates the order’s cease and desist or payment provisions.

JetBlue Fined for Alleged Violations of Oversales and Customer Service Plan Rules

DOT assessed $40,000 in civil penalties against JetBlue Airways for alleged violations of DOT’s oversales and customer service plan rules. In its consent order, DOT alleged that JetBlue failed to provide denied boarding compensation to passengers involuntarily bumped from JetBlue’s flights as required under the airline’s contract of carriage, “Customer Bill of Rights,” and customer service plan. DOT’s Enforcement Office found that in December 2015, JetBlue failed to provide $1,350 in denied boarding compensation to 12 passengers who were denied boarding involuntarily on JetBlue’s international flights. DOT alleges that JetBlue failed to inform the passengers of their right to receive cash compensation instead of a travel voucher, failed to furnish a written notice to passengers as required by 14 C.F.R. § 250.9, and failed to pay the required amount to the passengers who were denied boarding involuntarily. JetBlue stated that the passengers at issue were immediately rebooked on the next available flight to their intended destinations and were issued vouchers for future travel, but were not paid $1,350 at the time of the denied boarding. JetBlue contended that when it became aware of the error, it immediately issued payment to each of the 12 passengers and reported its error to DOT. The carrier also told DOT that it has distributed “comprehensive awareness information” to its airport operations crewmembers reminding them that JetBlue is required to pay involuntary denied boarding compensation to passengers involuntarily denied boarding due to payload safety restrictions. JetBlue was ordered by DOT to pay $20,000 within 30 days of the consent order’s issuance, with the remaining $20,000 due and payable if, within one year, JetBlue violates the order’s cease and desist or payment provisions.

Delta Air Lines Fined for Alleged Violations of DOT’s Tarmac Delay Reporting Requirements

DOT issued a consent order assessing $40,000 in civil penalties against Delta Air Lines for alleged violations of DOT’s tarmac delay reporting requirements. DOT alleges that Delta failed to provide “written incident descriptions” in its tarmac delay reports regarding flights at Orlando International Airport (MCO), Tampa International Airport (TPA), Denver International Airport (DEN), and Los Angeles International Airport (LAX). DOT’s Office of Aviation Enforcement and Proceedings sent letters of inquiry to Delta about these flights and Delta admitted that the required incident descriptions had not been provided. DOT noted that none of these delayed flights violated the tarmac delay rule since each was included within the scope of the safety, security, or air traffic control exceptions of 14 C.F.R. Part 259. In addition, Delta stated that its reporting failure regarding these flights was “completely inadvertent,” and that once it became aware of the failure to report, it immediately modified its reporting processes to ensure that such reports would be submitted on a timely basis, and that there was no intent to conceal the tarmac delays for the flights at issue since those delays were reported to the Bureau of Transportation Statistics (BTS) pursuant to 14 C.F.R. Part 244. Nonetheless, DOT ordered Delta to pay $20,000 within 30 days of the issuance of the consent order, with the remaining $20,000 due and payable if, within one year, Delta violates the order’s cease and desist or payment provisions.

DOT Fines Royal Jordanian Airlines for Alleged Tarmac Delay Reporting Violations

DOT issued a consent order assessing $35,000 in civil penalties against Royal Jordanian Airlines for alleged violations of DOT’s tarmac delay reporting requirements. In response to a consumer complaint, DOT’s Office of Aviation Enforcement and Proceedings investigated and found that the carrier experienced a tarmac delay of more than 4 hours on July 5, 2014, after one of its scheduled flights from Amman, Jordan, was diverted to Detroit from Chicago O’Hare. DOT alleges that Royal Jordanian failed to timely file its required BTS Form 244 “Tarmac Delay Report” with DOT’s Bureau of Transportation Statistics as required under 14 C.F.R. § 244.3. In response to DOT’s allegations, Royal Jordanian said that its “limited operations” at Detroit led to some delay in investigating and reporting the cause of its tarmac delay in a timely manner. DOT ordered the carrier to pay $17,500 in penalties within 30 days of the issuance of the consent order, with the remaining $17,500 due and payable if, within one year, Royal Jordanian violates the order’s cease and desist or payment provisions.

Department of Justice

Justice Department Completes Review of Alaska Airlines-Virgin America Merger

The Department of Justice announced that it has completed its review and approved the acquisition of Virgin America by Alaska Air Group, parent company of Alaska Airlines and Horizon Air. DOJ required Alaska Airlines to make some changes to its codeshare agreement with American Airlines as a condition of DOJ’s clearance, but Alaska Airlines was not required to divest any assets or make changes to any other agreements it has with American or any other airline, including interline or reciprocal loyalty agreements. Alaska Air Group recently closed its acquisition of Virgin America. DOJ published a notice in the Federal Register requesting comments on various merger-related documents. Following the Justice Department’s approval of the carriers’ merger, DOT issued an order exempting Alaska Airlines and Virgin America from the provisions of 49 U.S.C. § 41105 to allow the two carriers to operate under common ownership pending DOT’s action on their pending application for transfer of Virgin America’s international route authority.

Federal Aviation Administration

Regulatory

FAA Finalizes Overflight Fee Increases

The FAA issued a final rule increasing fees for en route and oceanic overflights based on Fiscal Year 2013 cost and air traffic activity data. Overflight fees apply to air traffic control and related services provided to aircraft, other than military aircraft and government-operated civilian aircraft, that transit U.S.-controlled airspace, but neither take off from nor land in the U.S. The fee increases will allow the FAA to more closely recover the full cost of providing air traffic control services provided to operators. The new fee rates will be implemented over a three-year period, with each fee rate effective for a 12-month period. The fees for en route and oceanic overflights will be increased as follows:

The final rule adopts the rates as proposed by the FAA in its August 28, 2015, notice of proposed rulemaking. The FAA is also increasing the overflight fee billing threshold from $250 to $400. The FAA will send an invoice for overflight fees to each user when the monthly fees equal or exceed $400. The final rule is effective on January 1, 2017.

F​AA Retains Current Random Drug and Alcohol Testing Rates for 2017

The FAA published a notice retaining the current minimum random drug and alcohol testing percentage rates for 2017. Testing rates for the period January 1, 2017, through December 31, 2017, will remain at 25 percent of safety-sensitive employees for random drug testing and 10 percent of safety-sensitive employees for random alcohol testing.

Enforcement

FAA Assesses Civil Penalties Against Resorts World

The FAA issued a release proposing to assess $218,700 in civil penalties against Resorts World Aviation and Resorts World Bimini for allegedly operating for-hire flights between Miami and Bimini, Bahamas, without FAA and DOT authorization. The FAA alleged that Resorts World Aviation did not have a FAA air carrier certificate or DOT economic authority when the company advertised and performed commercial air carrier operations. The FAA further alleged that the pilots of these for-hire flights were neither trained nor checked for training in commercial air carrier operations.

FAA Proposes $240,000 in Civil Penalties Against Dean Baldwin Painting for Alleged Maintenance Violations

The FAA issued a release proposing to assess $240,000 in civil penalties against Dean Baldwin Painting of Bulverde, Texas, for alleged maintenance-related violations at its Goodyear, Arizona repair station facility. The FAA alleged that the company performed maintenance on Boeing 767 and Airbus A319 aircraft it was not authorized to perform and failed to properly document who performed the work. The FAA also alleged that the company did not have key personnel in place, including an inspector to inspect all materials sent to the company for repair or alteration, and a purchasing manager to inventory all components and materials. The FAA contended that Dean Baldwin Painting also failed to inform the FAA when it made revisions to its Repair Station Manual and Quality Control Manual.

Pipeline and Hazardous Materials Safety Administration

PHMSA Proposes to Amend Regulations Governing Transportation of Hazardous Materials by Air

DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice of proposed rulemaking to amend certain provisions of the Hazardous Materials Regulations (HMR) pertaining to the air transportation of hazardous materials. The NPRM would: 1) remove certain additional intermediate packaging requirements for plastic and glass inner packaging used for transportation of certain commodities; 2) increase the quantity limits applicable to the transportation of portable medical electronic devices (e.g., automated external defibrillators (AED); nebulizers; continuous positive airway pressure (CPAP) devices containing lithium metal batteries; and spare batteries) by authorizing passengers and crewmembers to carry on board an aircraft lithium metal battery-powered portable medical electronic devices and two spare batteries for those devices exceeding 2 grams of lithium content per battery, but not exceeding 8 grams of lithium content per battery, with the approval of the aircraft operator; 3) revise U.S. domestic requirements for hazmat notification of the captain/pilot-in-command (NOTOC) to align with the ICAO Technical Instructions for the Safe Transport of Dangerous Goods (ICAO TI) (the pilot-in-command is required to receive the NOTOC in order to consider the “presence, amount and location of hazardous materials onboard the aircraft in an emergency”); 4) require aircraft operators to provide to the flight dispatcher the same information as provided on the NOTOC; 5) require aircraft operators to provide the NOTOC information to pilots and dispatchers prior to an aircraft moving under its own power; 6) require aircraft operators to retain the pilot-in-command’s confirmation via signature or “other appropriate indication” that the required NOTOC information was received; 7) require that the person responsible for loading an aircraft provide a signed confirmation or “other form of indication” that no damaged or leaking packages or packages showing evidence of damage or leakage were loaded on the aircraft; 8) remove language prohibiting any package, outside container, or overpack containing hazardous materials from being transported on an aircraft if it has holes when such holes do not compromise the integrity of the containment device (aircraft operators would continue to be allowed to have more restrictive standards as a part of their business practice since they would continue to be ultimately responsible for their decision to accept such a package for transportation); and 9) amend 49 C.F.R. § 175.88(c) to require hazardous materials loaded in an aircraft to be protected from damage, including by the “movement of baggage, mail, stores, or other cargo” and during loading operations, so that accidental damage is not caused through dragging or mishandling. Comments on the proposed rules are due February 3, 2017.