# Enhancing Airline Passenger Protections III > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2016-26178 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** November 3, 2016 - **Citation:** 81 FR 76800 ## Text DEPARTMENT OF TRANSPORTATION Office of the Secretary 14 CFR Parts 234, 244, 250, 255, 256, 257, 259, and 399 [Docket No. DOT-OST-2014-0056] RIN 2105-AE11 Enhancing Airline Passenger Protections III AGENCY: Office of the Secretary (OST), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The Department of Transportation is issuing a third “Enhancing Airline Passenger Protections” final rule to enhance protections for air travelers and to improve the air travel environment as follows: Expanding the pool of reporting carriers for service quality data; requiring reporting carriers to include service quality data for their domestic scheduled flights operated by their code-share partners; enhancing the Department's code-share disclosure regulation to codify the statutory requirement that carriers and ticket agents must disclose any code-share arrangements on their Web sites on the first display presented in response to a search of a requested itinerary for each itinerary involving a code-share operation; and prohibiting 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. The amendments to the reporting requirements in this rule will ensure that the Department obtains and provides to the public expanded and enhanced service quality data from the airlines. The provision to strengthen the Department's code-share disclosure rule will also enhance air travel consumer protection. Additionally, this final rule corrects certain drafting errors and makes minor changes to the Department's second Enhancing Airline Passenger Protections rule to better reflect the Department's intent. Other topics covered by the proposed rule that are not addressed by this final rule will be addressed in two separate rulemakings. Specifically, the Department will be issuing a Supplemental Notice of Proposed Rulemaking (SNPRM) to seek additional information on the disclosure of fees for basic ancillary services to consumers at all points of sale. The remaining topics discussed in the 2014 notice of proposed rulemaking ( e.g., customer service commitments by large ticket agents, prohibition on post-purchase price increases for ancillary services) will be addressed in another final rule that the Department plans to issue at a later date. DATES: This final rule is effective December 5, 2016. FOR FURTHER INFORMATION CONTACT: Clereece Kroha or Blane A. Workie, Office of the Assistant General Counsel for Aviation Enforcement and Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590, 202-366-9342 (phone), 202-366-7152 (fax), clereece.kroha@dot.gov (email) and blane.workie@dot.gov. SUPPLEMENTARY INFORMATION: Executive Summary (1) Purpose of the Regulatory Action This final rule enhances the performance quality information collected by the Department and made available to the public by expanding the reporting carrier pool and requiring performance data for code-share flights marketed by reporting carriers. These actions will ensure that smaller U.S. carriers' performance records are included in the monthly Air Travel Consumer Reports and that code-share flights' performance data will be reflected in their marketing carriers' records and rankings. This rule will also enhance information disclosure to air travel consumers by codifying the statutory requirement regarding disclosing code-share arrangements in online schedule displays, and prohibiting undisclosed bias when displaying air travel itinerary search results by carriers and ticket agents. These actions are taken under the statutory authorities for the Department to collect and collate transportation information that will contribute to the improvement of the transportation system of the United States (49 U.S.C. 329 and sections 41708 and 41709), and to prohibit unfair and deceptive practices and unfair methods of competition in the provision of air transportation (49 U.S.C. 41712). (2) Summary of Major Provisions In this final rule, the Department amends 14 CFR part 234 to require U.S. carriers that account for at least 0.5 percent of the domestic scheduled passenger revenue to file reports for the on-time performance and mishandled baggage for their flights and to post the on-time performance of their flights on their Web sites if they have Web sites marketing air transportation to the public. This is an expansion of the reporting carrier pool from its previous threshold of at least one percent of the domestic scheduled passenger revenue. Similarly, an amendment to 14 CFR part 250 will expand the reporting carrier pool for reporting oversales data. In addition, this rule amends parts 234 and 250 to require all reporting carriers that market code-share flights operated by another carrier to file separate reports for on-time performance, mishandled baggage, and oversales data for those code-share flights. With respect to disclosing code-share arrangements, this rule amends 14 CFR part 257 to codify a statutory requirement that code-share arrangements in online itinerary search results must be disclosed on the first display following the search and in a format that is easily accessible to consumers. Finally, this rule adds 14 CFR part 256 that prohibits undisclosed bias by carriers and ticket agents when displaying fare, schedule or availability information online that includes multiple carriers. (3) Costs and Benefits The Regulatory Impact Analysis estimates the total discounted costs, which could be monetized over a 10-year period. Cost could only be robustly estimated for the reporting requirements, and may not include some other potential costs which the Department expects to have minimal impact. The costs of the reporting requirements are estimated to total $7.74 million over ten years, which amounts to an annualized cost of $0.96 million, when discounted using a seven percent rate. Given these estimates, the rule is not expected to be economically significant. The benefits could not be quantified and monetized with reasonable accuracy for the rule. Benefits were evaluated qualitatively for all provisions. A summary of this rule's benefits and costs is presented in the following table. Summary of Rule's Benefits and Costs Major provision Benefits Ten year costs (Discounted 7%) Additional Reporting Carriers for Service Quality Data Improved ability of consumers, especially in rural communities, to examine the past performance of flights Potential improved Department enforcement due to more complete picture of industry performance Costs to carriers to report the information estimated at $7.74 million (10-year cost discounted at 7 percent).* Costs for some carriers to train employees and costs to consumers to use the information are not estimated. Data Reporting for Domestic Code-Share Partner Operations Improved ability of consumers, especially in rural communities, to examine the past performance of flights Potential for improved Department enforcement due to more complete picture of industry performance See above. Transparency in Display of Code-Share Operations as Required by 49 U.S.C. 41712(c) Helps ensure that all consumers purchasing via telephone, mobile websites, and applications are aware of code-share arrangements at beginning of booking process; some consumers may avoid time for additional flight searches Up-front programming costs to redesign mobile websites and applications to incorporate the code-share disclosure information for those carriers which had not interpreted statue as applying to mobile websites and mobile applications; potential costs for telephone reservations. Prohibition of Undisclosed Bias Decrease in potential distortion in market of consumer unknowingly choosing non-optional flights because of display order Based on assumptions with uncertainties, programing costs to add statement(s) for some carriers and travel agents are estimated to range from $947,000 to $2.8 million (undiscounted). * Costs were estimated for these two provisions together as their impacts are inter-related. Background On May 23, 2014, the U.S. Department of Transportation (DOT) issued a notice of proposed rulemaking (NPRM), 79 FR 29970, to improve the air travel environment of consumers based on its statutory authority to prohibit unfair or deceptive practices in air transportation, 49 U.S.C. 41712. This NPRM addressed several recommendations to the Department regarding aviation consumer protection made by two DOT Federal advisory committees—the Future of Aviation Advisory Committee (FAAC) and the Advisory Committee on Aviation Consumer Protection (ACACP). It also addressed two issues identified in the second Enhancing Airline Passenger Protections final rule—(1) disclosure of fees for certain ancillary services at all points of sale; and (2) post purchase price increases for ancillary services. See 76 FR 23110. More specifically, the Department's NPRM addressed and solicited public comments on the following issues: (1) Codification of the Department's interpretation of the statutory term “ticket agent”; (2) Disclosure of certain ancillary service fee information to consumers in all channels of sales; (3) Expanding the reporting carrier pool for service quality data; (4) Requiring reporting of service quality data for code-share flights by the marketing carriers; (5) Applying customer service commitments to large ticket agents; (6) Enhancing the disclosure of code-share operations; (7) Disclosing carriers marketed by large ticket agents; (8) Prohibiting undisclosed carrier display bias by large ticket agents; (9) Prohibiting post purchase price increases for certain ancillary services. In response to this NPRM, the Department received over 750 comments from the following: U.S. air carriers and U.S. air carrier associations; foreign air carriers and foreign air carrier associations; consumer rights advocacy groups; travel agents, travel agent associations, and global distribution systems (GDSs); airports and various airport-related industry groups; and a number of individual consumers. The Department has carefully reviewed and considered the comments received. To ensure that the subjects identified in the NPRM are addressed through rulemaking as efficiently as possible, we have decided to split the issues addressed in the 2014 NPRM into three separate rulemakings. First, in this final rule, we are finalizing regulations on several subjects on which we have completed our review and analysis, including completing a regulatory analysis. Specifically, we are finalizing rules: Expanding the reporting carrier pool; requiring reporting of code-share flights by the marketing carriers; enhancing the disclosure of code-share operations; and prohibiting undisclosed display bias. Although we are not promulgating a requirement regarding disclosing on ticket agent Web sites that not all airlines are marketed by ticket agents at this time, that proposal is also addressed in this rulemaking. Second, we will be issuing a Supplemental Notice of Proposed Rulemaking (SNPRM) addressing disclosure of certain ancillary service fee information to consumers in all channels of sales (GDS issue). See RIN 2105-AE56. We believe the SNPRM is necessary in light of the complexity of the issues and additional considerations identified by comments submitted on the NPRM. The NPRM also proposed revisions to baggage fee disclosure provisions section 14 CFR 399.85(a)-(c). Any revisions to that section relating to baggage disclosure requirements will be addressed in the SNPRM as that rulemaking is focused on ancillary service fee disclosures. Finally, for several subjects on which we believe that we have obtained sufficient information but need additional time to complete the regulatory analysis, we are postponing the issuance of a final rule until a later date. These subjects include the following: Codification of the Department's interpretation of the statutory term “ticket agent”; applying customer service commitments to large ticket agents; and prohibiting post purchase price increases for certain ancillary services, which includes addressing the “mistaken fares” issue. See RIN 2105-AE57. For those subjects that we are finalizing in this final rule, in the table below we provide a summary of the regulatory provisions and a summary of the regulatory analysis. Following that, we summarize the commenters' positions that are germane to the specific issues raised in the NPRM and the Department's responses. Summary of Regulatory Provisions Subject Final rule Additional Reporting Carriers for Service Quality Data • Expands the pool of reporting carriers from any carrier that accounts for at least 1% of domestic scheduled passenger revenue to any carrier that accounts for at least 0.5% of domestic scheduled passenger revenue. • Mandates reporting of data for scheduled flights to and from all large, medium, small, and non-hub U.S. airports. Data Reporting for Domestic Code-Share Partner Operations • Requires reporting carriers to separately report data for their domestic scheduled flights operated by their code-share partners: ○ On-time Performance. ○ Mishandled Baggage. ○ Oversales. • Allows a simplified data report for on-time performance of code-share flights if the operating carrier of the flights is a reporting carrier itself. Transparency in Display of Code-Share Operations as Required by 49 U.S.C. 41712(c) • Amends the Department's code-share disclosure regulation to codify the statutory requirement that carriers and ticket agents must disclose any code-share arrangements on their websites. ○ Requires disclosure on the first display presented in response to a search of a requested itinerary for each itinerary involving a code-share operation. ○ Disclosure must be in a format that is easily visible to a viewer. • Adopts a simplified format for display of code-share disclosures via mobile websites and apps by permitting disclosure of only corporate name of the operating carrier. • Enhances code-share disclosure in oral communication by requiring the disclosure be provided at the first time the flight is offered by a carrier or ticket agent or inquired by a consumer. Prohibition of Undisclosed Bias • Prohibits undisclosed biasing by carriers and ticket agents in any online displays of the fare, schedule or availability information of multiple carriers. Summary of Regulatory Analysis The Final Regulatory Evaluation examined the economic impact, in terms of all benefits accruing to airline passengers, and costs to U.S. and foreign air carriers and other entities regulated under this proceeding. Although benefits could not be quantified and monetized with reasonable accuracy for the provisions in the rule, benefits were evaluated qualitatively for all provisions. Meanwhile, the total discounted costs which could be monetized over a 10-year period could only be robustly estimated for Provisions 1 and 2. The costs of Provisions 1 and 2 are estimated to total $7.74 million over ten years, which amounts to an annualized cost of $0.96 million, when discounted using a seven percent rate. Other costs are expected to be minimal. Benefits were not able to be quantified for the most part. Nonetheless, the Department believes that the rule is in the public interest as it will provide consumers with more information to make decisions about air transportation purchases. Discussion (1) Expanding the Definitions of “Reporting Carrier” and “Reportable Flight” Under 14 CFR Part 234 The NRPM: 14 CFR parts 234 and 250 require certain large U.S. carriers—the “reporting carriers”—to report data to the Department concerning on-time performance, mishandled baggage, and oversales. Currently, U.S. carriers with at least 1.0 percent of total annual domestic scheduled-passenger revenue are required to report. In the NPRM, we proposed to amend the definition of “reporting carrier” under part 234 to include carriers that account for at least 0.5 percent of total annual domestic scheduled-passenger revenue. The purpose of this proposal is to increase the data reported by air carriers and published by the Department in order to provide the public with more information for making travel decisions. The proposed amendment to the definition of “reporting carrier” will not only affect the pool of carriers reporting on-time performance and mishandled baggage data to the Department and posting on-time performance information on the carrier's Web site pursuant to 14 CFR part 234, but will also affect the pool of carriers reporting oversales data to the Department under 14 CFR part 250. We sought public comments on whether 0.5 percent is a reasonable threshold to achieve our goal of maximizing the scope of data collection from the industry while balancing that benefit for consumers against the reporting burden for additional carriers, particularly smaller ones. If 0.5 percent is not the most reasonable threshold, we asked whether a more reasonable approach would be an even larger expansion, e.g., to 0.25 percent, or a smaller expansion to 0.75 percent, or even requiring all carriers that provide domestic scheduled passenger service to report to the Department. We especially invited comments that provide specific cost estimates or analysis by smaller carriers that would potentially be impacted by this proposal. We also requested comments regarding whether a carrier's share of domestic scheduled passenger revenue remains an appropriate benchmark or if we should use a carrier's share of domestic scheduled passenger enplanements instead. The current rule states that March 31 is the cutoff date for compiling a carrier's annual domestic scheduled passenger revenue percentage. However, for years, DOT's Bureau of Transportation Statistics (BTS) has been using June 30, instead of March 31, as the cutoff date. Currently carriers must report revenue information, including domestic scheduled passenger revenue, to DOT on a quarterly basis using Form 41. DOT uses this information to calculate each carrier's share of total domestic scheduled passenger revenue over the time period of July 1st to June 30th each year, and determines which carriers account for at least 1 percent of total domestic scheduled passenger revenue. The Department then provides notice to new reporting carriers of their obligation to report. In the NPRM we proposed to codify the June 30 as the cutoff date in the definition of “reporting carrier.” Finally, in relation to the burden associated with implementing a reporting mechanism within a carrier's operation system, we requested comments on how much time a newly reporting carrier will likely need to prepare for the new reporting duties. Although not proposed in the rule text, we stated in the preamble of the NPRM that we were contemplating that should this proposal be finalized, we would permit carriers that have not been reporting carriers but become a reporting carrier under a new threshold to file their first reports by February 15 for the first January that is at least six months after the effective date of this rule. In addition to expanding the pool of reporting carriers, the NPRM sought comments on whether we should expand the scope of “reportable flights” in relation to airports to include not only large hub airports (U.S. airports that account for at least 1% of domestic enplanements) that are mandated by the current rule, but also medium, small, and non-hub airports, or, alternatively, to include domestic scheduled flights to and from all U.S. airports where the reporting carriers operate. We also invited the public to provide information on the costs and benefits related to this matter. Comments: Among the consumer rights advocacy groups that provided comments on this proposal, four groups, U.S. Public Interest Research Group (U.S. PIRG) and Consumers Union (in their joint comments) and Travelers United and National Consumers League (in their joint comments), support the expansion of the reporting carrier threshold to 0.5% of total domestic scheduled passenger revenue. Consumers Union and U.S. PIRG state that the information from newly covered carriers will be useful to consumers and regulators alike and that with current technology the compliance cost would be minimal and manageable. They also comment that, if feasible, the Department should require reports from all carriers providing domestic scheduled passenger flights from all airports. Travelers United and National Consumers League support the expansion because it would be beneficial to consumers by including airlines such as Spirit and Allegiant in the Department's Air Travel Consumer Report (ATCR) and it would enhance transparency and accountability of airline performance for consumers. Flyersrights.org recommends that the Department should require all carriers with over $100 million in revenue to file reports and that the reports should cover reporting carriers' flights to all airports. Flyersrights.org also states that flight cancellations that often cause significant delays to passengers should not be statistically reported as zero delay as the organization states they are under the existing reporting requirements. Among the comments submitted by airlines and airline associations, Airlines for America (A4A), Hyannis Air Service dba Cape Air (Cape Air), JetBlue Airways, Frontier Airlines, and Southwest Airlines in general support the proposal to expand the reporting carrier pool. A4A states that the Department should require all carriers providing domestic scheduled service to file reports because it would increase the total amount of information available to the public and any carrier that has the resources to obtain an operating certificate and to offer scheduled service should not find it overly burdensome to report to the Department basic information about its operations. A4A also supports eliminating “reportable” flights and simply mandating that reporting carriers report on all flights. Cape Air supports the expansion to 0.5% but does not believe a threshold beyond that level would provide substantial benefit to the public in comparison to the costs because expanding beyond the 0.5% threshold would create significant burden to small businesses. Frontier Airlines supports the expansion as the performance data are important for consumers to compare carriers. Frontier points out that under the existing reporting carrier threshold, Frontier is a reporting carrier but its competitors such as Spirit Airlines and Allegiant Air are not reporting carriers. 1 JetBlue Airways supports including all carriers providing domestic scheduled passenger service in the universe of reporting carriers to increase transparency and available information to consumers. Southwest Airlines also supports the expansion, stating that today all carriers collect data and track on-time performance as a matter of business necessity and the performance indicators that are reported to the Department affect passengers without regard to the size of the carrier. 1 On October 30, 2015, BTS issued its Reporting Technical Directive #25, effective January 1, 2016. Under that Directive, there are now 12 reporting carriers meeting the one percent domestic scheduled passenger revenue threshold: Alaska, American, Delta, ExpressJet, Frontier, Hawaiian, JetBlue, SkyWest, Southwest, Spirit, United, and Virgin America. In opposition to the proposed expansion, Republic Airways Holdings Inc. and its subsidiaries, Republic Airlines, Chautauqua Airlines, and Shuttle America (herein collectively “Republic”) jointly filed comments asserting that the reporting requirements should not be extended to regional carriers that do not market flights and handle customer service under “fee for service/capacity purchase agreements” or “CPAs” as CPA carriers do not have information such as baggage handling or oversales. Republic further states that requiring CPA carriers to report data that mainline carriers are already reporting would be duplicative, imposing costs on CPA carriers and increasing potential consumer confusion with no corresponding regulatory benefits. As an alternative, Republic suggests that if the Department requires the CPA carriers to file reports, it should require the mainline carriers to provide certain data to CPA carriers. Regarding the cost and benefit aspect of the proposal, Republic states that the proposal will impose new technology and personnel costs and notes that the regulatory evaluation accompanying the NPRM concedes that the monetized cost of the two reporting-related proposals would far exceed their monetized benefits. With respect to the time needed by newly reporting carriers to prepare for filing the first report, Republic states that the Department should provide at least 18 months lead time so carriers have sufficient time to develop, test, and implement the reporting system. Allegiant Air opposes the expansion of reportable flights to cover smaller airports. Allegiant states that the expansion of reportable flights beyond large hub airports does not satisfy cost-benefit analysis given the small number of passengers utilizing these airports, and it would place a burden on small carriers serving these markets, and ultimately result in higher prices for consumers. American Airlines, Delta Air Lines, and United Airlines submitted joint comments opposing any change in the current mishandled baggage reporting methodology. In its separate comment, Delta Air Lines asserts that any change to the current mishandled baggage reporting rules are unjustified and misleading. Several airport associations also commented on this proposal, all supporting the expansion of the reporting carrier pool to include all commercial airlines. Airports Council International-North America (ACI-NA) states that the information is the same to passengers no matter the type of aircraft or the size of the airline. ACI-NA justifies its position by asserting that regional airlines now provide over half of daily domestic flights, and serve 70% of U.S. airports. Meanwhile, according to ACI-NA, technological enhancements in the last 25 years provide justification to require all carriers to report. The American Association of Airport Executives (AAAE) points out that the Government Accountability Office (GAO) concludes that airlines not required to report to DOT have higher delay, cancellation, and diversion rates, and smaller communities are left out of the equation. Regarding costs and benefits, AAAE states that in the past paperwork was a limiting factor but modern technology now makes the process much easier and more efficient. California Airports Council states that with the significant growth of regional airlines at airports of all sizes, it is crucial for DOT to include all carriers' operations in consumer protection regulations and notifications. San Francisco International Airport also supports the expansion of the reporting carrier pool to cover all commercial airlines. It states that this expansion will improve the amount and quality of information available to passengers while encouraging open and fair competition among air carriers. It also points out that air carriers providing scheduled commercial service in the United States in 2014 are universally equipped with technology sufficient to provide service quality data and doing so should not create a burden. Marks Systems, Inc., d/b/a masFlight (masFlight), an industry provider of aviation operations analysis, recommends that the Department adopt a 0.25 percent threshold to capture all low-fare and significant regional carriers and to ensure fairness across the industry in transparency and regulatory compliance. In supporting this position, masFlight provides data from 2013 demonstrating that under the 0.25 percent threshold, an additional five carriers would be captured compared to the proposed 0.5 percent threshold (Shuttle America, Horizon, PSA, Chautauqua, and Sun Country), leaving only two carriers that are under the 0.25 percent threshold (GoJet and Compass). MasFlight cites the Initial Regulatory Impact Analysis for the NPRM that estimates the initial cost for a new reporting carrier to be $33 million over a 10-year period, and asserts that this potential compliance cost would be excessive to a carrier that accounts for less than 0.25 percent of domestic scheduled passenger revenue. MasFlight also suggests that the Department maintain its current benchmark using domestic scheduled passenger revenue instead of changing to domestic scheduled passenger enplanements to minimize compliance cost. MasFlight supports expanding the definition of reportable flight to cover all U.S. airports. DOT Responses: Since their implementation, the reporting requirements in part 234 (for on-time performance and mishandled baggage) and part 250 (for oversales) have been effective tools for the Department to collect airline service and performance data. The Department also uses the information to monitor the quality of service provided to the flying public by each reporting carrier and to furnish the information to consumers via the Air Travel Consumer Report. This data also provides the Department necessary information used in connection with rulemakings and other important policy decisions. As stated in the NPRM, the current 1.0 percent domestic scheduled passenger revenue threshold was initially adopted in 1987 as a compromise in order to reduce the burden imposed on small businesses because at that time, small carriers were less likely to maintain their flight performance data in a computerized form. 52 FR 34056 (September 9, 1987). The comments we received on this NPRM do not dispute that the more information the Department receives through its reporting mechanism, including service quality of small airlines, and information on flights to and from small airports, the greater the benefit to the public. We are confident that lowering the threshold for reporting to add certain smaller carriers' performance data to the data currently collected by BTS will enable the Department to obtain and provide to the flying public a more complete picture of the performance of scheduled passenger service in general. We are also optimistic that including smaller airlines' performance data in the Department's data collection will specifically benefit small communities and regional markets that are primarily served by these smaller airlines by increasing the level of public scrutiny of their performance quality and increasing their competitiveness. Furthermore, expanding the pool of reporting carriers responds to the recommendation by GAO in its September 2011 Report to Congressional Requesters. 2 In that report, GAO states that the Department should collect and publicize more comprehensive on-time performance data to include information on most flights, to airports of all sizes. The Department shares GAO's view that expanding the reporting carrier pool would enhance the Department's ability to analyze the cause of flight disruptions such as delays and cancellations, particularly with respect to airports in smaller communities, at which consumers are more likely to be inconvenienced by flight irregularities due to less-frequent service. 2 Airline Passenger Protections: More Data and Analysis Needed to Understand Effects of Flight Delays, September 2011, GAO. http://www.gao.gov/products/GAO-11-733 . The comments opposing expansion of the reporting carrier pool mainly focus on the burden it will place on smaller carriers. In that regard and consistent with the approach taken by the Department in the 1987 final rule, we have determined that there is a balance between obtaining the most useful information on flight performance quality and avoiding excessive burden and cost to smaller airlines. The Department concludes that the 0.5 percent threshold is appropriate in striking that balance, taking into consideration the technological advances during the past 29 years in tracking and recording flight performance data. Our decision also takes into account the fact that we are adopting the proposal requiring marketing carriers to report flight performance data for domestic flights operated under the marketing carrier's code by code-share partners, including smaller, non-reporting carriers, which will be discussed in the next section of this preamble. The chart below contains information on certificated carriers affected by these thresholds based on annual scheduled passenger revenue as reported to BTS for the 12-month period ending June 30, 2015: Reporting Carriers Meeting the Existing 1% Threshold 1 Alaska. 2 American. 3 Delta. 4 Express Jet. 5 Frontier. 6 Hawaiian. 7 JetBlue. 8 SkyWest. 9 Southwest. 10 Spirit. 11 United. 12 Virgin America. Carriers Meeting the Expanded 0.5% Threshold 1 Air Wisconsin. 2 Allegiant. 3 Endeavor. 4 Mesa. 5 Envoy. 6 Republic. 7 Shuttle America. Carriers Meeting the 0.25% Threshold (Not Adopted) 1 Horizon. 2 PSA. 3 Sun Country. Carriers Accounting for Less Than 0.25% of Domestic Scheduled Passenger Revenue 1 Compass. 2 GoJet. Although the costs of maintaining and filing performance data with the Department has been reduced significantly compared to what it was in 1987, the Department is aware that it is still not a negligible expense for smaller carriers under the 0.5 percent threshold. Technology developments such as automation of performance data tracking reduces the cost of human capital needed for the tasks. However, the initial cost of setting up a sophisticated system to aggregate the data meeting the Department's reporting criteria and adding personnel to file monthly and quarterly reports with the Department may disproportionately burden smaller carriers. In addition to the concerns about the burden to smaller carriers, we have also decided not to adopt a threshold lower than 0.5 percent as endorsed by some commenters because most of the flights operated by those carriers falling below the 0.5 percent threshold will be captured under the code-share flights reporting requirement, which is discussed in the next section. According to the current data, if we adopt a 0.5 percent threshold, five smaller certificated carriers providing scheduled domestic passenger services (Horizon, PSA, Sun Country, Compass, and GoJet) 3 will not be required to file reports directly with the Department. Four of these five carriers operate code-share flights on behalf of their marketing-carrier partners, which are all reporting carriers. Horizon operates solely for Alaska Airlines, PSA operates solely for American Airlines, Compass operates for American Airlines and Delta Air Lines, and GoJet operates for United Airlines and Delta Air Lines. All of those four smaller carriers' flight performance data will be reported by their marketing carriers. Sun Country is the only carrier among the five that does not operate code-share flights and will not have its performance data reported to the Department under the 0.5 percent threshold. Sun Country accounted for only 0.32% of domestic scheduled passenger revenue. In other words, adopting a 0.5 percent threshold will allow the Department to capture in substance 99.68% of the flight performance data for domestic scheduled flights. We recognize that Horizon, PSA, Compass, and GoJet will likely incur certain expenses to assist their marketing carriers in compiling the reports. However, we consider the cost-sharing structure between the smaller operating carrier and large marketing carrier to be an effective and efficient way for the Department to obtain the data while limiting the burden imposed on smaller carriers. 3 The list of carriers (based on 2015 domestic scheduled passenger revenue data) is for the purpose for illustrating the size and number of carriers that currently would and would not be affected by this change. Each year the Department's Bureau of Transportation Statistic's Office of Airline Information updates the list of reporting air carriers. Although the carriers that fall above or below the threshold may change from year to year, as historical data demonstrates, we don't expect the number of affected carriers to change drastically. Finally, as technology development appears to be the primary factor affecting the costs incurred by a carrier in tracking, compiling, and filing performance data with the Department, we will continue to monitor the effect of new technology on the cost of recordkeeping and the scope of carriers covered by the reporting requirements. We will consider expanding the reporting requirements to other carriers providing scheduled service if it becomes economically sound and necessary to obtain data beneficial to consumers. The Department appreciates the Republic carriers' comments regarding the CPA carriers' lack of firsthand information on customer service related data as these carriers may not handle customer services such as baggage handling or oversales. The Department further notes that the relationship between a CPA carrier and its code-share marketing-carrier partner is different from carrier to carrier, depending on each CPA's terms and conditions, and such a relationship has the potential to further evolve in the future. For example, a CPA carrier that currently does not handle baggage may begin to handle baggage in the future. As such, the Department does not believe it is appropriate to exempt the CPA operating carriers entirely from reporting baggage handling and oversales data at this time. Larger CPA carriers such as SkyWest or ExpressJet currently file reports including data that they obtain from their marketing partners, which indicates to the Department that a cooperative information collection and compilation structure between marketing and operating carriers is technically and economically workable. We anticipate that in the future carriers may include provisions in their CPA contracts for the marketing carrier to provide baggage handling and oversales data to the reporting operating carrier in a timely manner if that is relevant to the carriers' relationship. In the meantime, the Department expects carriers to work together in good faith to share information with each other in order to facilitate the required reporting. With respect to the question of whether the Department should use domestic scheduled passenger enplanements as a benchmark to define “reporting carrier” in lieu of the current benchmark of domestic scheduled passenger revenue, we received no comments supporting such a change and we do not see any compelling reason for such a change. While keeping the current benchmark, we also adopt in this final rule the longstanding practice by BTS to use June 30 as the cutoff date for compiling a carrier's annual domestic scheduled-passenger revenue percentage, as opposed to March 31 as stated in the current rule. No adverse comments were received. With respect to the definition of “reportable flight” that currently only covers flights to and from large hub airports, the vast majority of comments are in support of including all airports in the reporting regime. We are unconvinced by Allegiant Air's assertion that we should exempt flights to and from smaller airports from the reporting requirements on the basis that such reporting imposes an excessive cost on the carriers. Exempting flights to and from smaller airports will render our inclusion of smaller carriers in the reporting carrier pool less meaningful. Further, we note that the current reporting carriers all have chosen to file reports for scheduled passenger flights to all U.S. commercial airports where they operate. As such, there is an argument to be made that a reporting carrier would incur more cost to separate flights operated out of large hubs from flights operated out of other airports for reporting purpose as compared to reporting all flights operated out of all airports. For these reasons, we adopt in this final rule a mandate to report the on-time performance and mishandled baggage information for domestic scheduled flights marketed by a reporting carrier to and from all U.S. large, medium, small, and non-hub airports pursuant to part 234. By expanding the reportable flights under part 234 to these categories of airports, we are covering all domestic scheduled flights to and from U.S. commercial airports that have an annual passenger enplanements of 10,000 or more. We note that this expansion of airports covered under part 234 does not affect the scope of airports covered under 14 CFR 250.10, reporting oversales information, which covers and will continue to cover all domestic scheduled flights and all international scheduled flights departing a U.S. airport and using an aircraft that has a designed passenger capacity of 30 or more passenger seats. In response to Flyersrights.org's comment that flight cancellations are currently not statistically reported as flight delays, the Department wishes to clarify that the ATCR categorically treats cancelled flights as flights not operated “on time,” along with flights that are diverted or are delayed for 15 minutes or more. See, Air Travel Consumer Reports, Footnote D of Footnotes for Tables 1 Through 6 (Flight Delays) and 8 (Cancellations). In other words, under the current reporting structure, a cancelled flight counts as a delayed flight in a carrier's on-time performance percentage. Thus, we do not believe any change to that structure is necessary. The Department appreciates the comments submitted by United, Delta, and American, jointly, and by Delta, individually, on the rationale for the Department's proposal to change the matrix and the methodology of collecting mishandled baggage information. However, this rulemaking addresses which airlines and flights are subject to the reporting requirements contained in Parts 234 and 250, and it does not address what methodology the carriers are required to use to collect and report the data. A separate rulemaking, “Reporting of Data for Mishandled Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo Compartments,” RIN 2105-AE41 (formerly 2139-AA13), Docket No. DOT-RITA-2011-0001, addresses the methodology for collection of mishandled baggage information. The Department fully reviewed and considered all substantive comments submitted to that docket (DOT-RITA-2011-0001), including comments by United, Delta, and American. The final rule on reporting of data for mishandled baggage and wheelchairs and scooters transported in aircraft cargo compartments is being published contemporaneously with this final rule. Because the Department's proposal to change the mishandled baggage reporting matrix was resolved in a separate rulemaking and the instant rulemaking on transparency of ancillary service fees and other consumer issues will not result in any change to the matrix on how to report mishandled baggage, please see the Department's final rule on “Reporting of Data for Mishandled Baggage and Wheelchairs and Scooters Transported in Aircraft Cargo Compartments” for responses to comments concerning the reporting matrix. With respect to the compliance dates of this reporting threshold change, we have carefully considered the comments submitted and consulted with BTS on its estimated timeframe to fully implement a system capable of accepting and accommodating the newly included reporting carriers under this final rule. We have reached the conclusion that the new reporting carriers should be required to file their initial reports for on-time performance and mishandled baggage by February 15, 2018, for January 2018 operations; to file their initial reports for oversales by April 30, 2018, for the first quarter of 2018; and to load on-time performance disclosure data for each domestic scheduled flight marketed on their Web sites on Saturday, February 24, 2018, for flights operated in January 2018. Consistent with the existing rule, carriers must load all subsequent flight performance information on the fourth Saturday of the month following the month that is being reported. Oral disclosure of on-time performance information upon consumers' reasonable inquiry during the course of reservations or ticketing discussions or transactions should begin no later than February 25, 2018. We believe this provides sufficient lead time to the new reporting carriers to set up the infrastructure and train their personnel to handle the reporting of this data. We also believe that requiring the initial monthly reports to start in January and the initial quarterly reports to start in the first quarter provides the benefit of preserving the consistency of the Department's data for a full calendar year during the transition. We note that with the exception of Allegiant Air, all new reporting carriers do not directly market flights they operate to the public and therefore are under no obligation to implement the disclosure requirements contained in 14 CFR 234.11. (2) Carriers To Report Data for Certain Flights Operated by Their Code-Share Partners The NPRM: The current reporting structures in Parts 234 and 250 only require reporting carriers to report performance data for flights they operate and not for flights marketed under the reporting carrier's code but operated by a code-share partner. The NPRM proposed to require reporting carriers that market flights operated by their domestic code-share partners to file a second and separate set of on-time performance, mishandled baggage, and oversales data reports that include the relevant data for both flights they operate and flights operated by their domestic code-share partners. We asked whether the second set of data should only contain data for code-share flights and whether it should include separate flight statistics for each code-share partner. We also solicited comments on whether “double counting” is an issue under this proposal ( e.g., a regional carrier operating a flight for more than one marketing carrier and therefore the same flight would be reported twice by the marketing carriers). Furthermore, we asked the public to provide comment about how to deal with the situation where a flight carries two large carriers' codes and is operated by one of the two carriers (mainline-to-mainline code-share). Finally, as for the proposal to expand the reporting carrier pool, we asked what a reasonable implementation period is for the marketing carriers to comply with this new reporting requirement. Comments: All consumer rights advocacy groups that submitted comments on this proposal are generally in support of including code-share flights service quality data in the marketing carrier's reports. Consumers Union and U.S. PIRG cite the monthly ATCR, which provides critical and helpful information to consumers about airline performance (including delayed and canceled flights, mishandled baggage, consumer complaints, and denied boardings), and state that this change will make the report even more useful for consumers. They also agree with the Department's proposition that this change will increase airline incentives to improve performance, not only in their own operations but also in the operations of the carriers with whom they partner. Further, Consumers Union and U.S. PIRG assert that the performance information on code-share flights would be of maximum usefulness if it is provided in aggregate for the mainline carrier and all of its code-share partners, and also disaggregated for each code-share partner separately. Consumers Union and U.S. PIRG question the soundness of the Department's proposal to limit the reporting of code-share flights data to non-stop flights operated by code-share partners and avers that the Department should include all flight segments that are marketed by mainline carriers. Travelers United and National Consumers League also support this proposal, stating that code-share flights now account for more than half of domestic flights, yet the poorest performance records of regional partners operating under legacy carriers' codes are not reflected in legacy carriers' performance reports. Travelers United and National Consumers League also strongly urge the Department to include international flights operated by code-share partners in the reporting mandate because joint ventures in international operations should not enjoy immunity from clear, understandable reporting requirements. Among comments submitted by carriers and carrier associations, A4A agrees with the Department's regulatory objective but believes there are equally effective but less burdensome ways of achieving that objective. A4A states that the proposed reporting requirement for code-share flights would result in the submission of duplicate data by different carriers, create difficulty for the reporting carriers to certify and submit data provided by their code-share partners, and make it difficult for both carriers and BTS to process the newly required data. In that regard, A4A proposes an alternative means for the Department to collect data for code-share flights and attribute this data to the records of the marketing carriers. Under A4A's proposal, each mainline marketing carrier would provide to BTS a monthly list of the operating carriers and flight numbers of code-share flights operated by another carrier under the reporting carrier's code; BTS would then combine this list with the information submitted directly by the operating code-share partners to generate and publish the desired service information regarding the code-share flights of the mainline carrier. A4A avers that this approach would eliminate the prospect of two carriers submitting duplicate information, and BTS would have the complete data set earlier in the month and would not have to scrub the data to account for duplicate reports. A4A opposes including data for mainline-to-mainline code-share flights in a carrier's report. In support of this proposition, A4A points out that this type of code-share flight represents a small proportion of overall traffic (roughly 2%) and therefore, including or excluding this data will not likely change a carrier's data and ranking in the ATCR. Additionally, A4A states that reporting data for these flights would be exceptionally difficult due to lack of systems and data exchange. Further, A4A states that in the mainline-to-mainline code-share situations, the consumer purchased the ticket from a marketing carrier that does not operate the flight is typically very aware of the operating carrier brand and that the operating carrier is different from the marketing carrier, and if the consumer is interested in the other mainline operating carrier's statistics he/she can review reports for that carrier. Additionally, A4A states that the marketing carrier in the denied boarding context has no control over the inventory of the operating carrier if it does not have a capacity purchase agreement with that carrier. A4A concludes that for these reasons, the burden of collecting, sharing, verifying, and reporting data on both the operating and the marketing carriers in a mainline-to-mainline code-share would be disproportionately burdensome relative to any public benefit. Regarding the time needed for carriers to prepare for the new reporting requirement, A4A argues that the implementation time proposed by the Department is a fraction of the time needed. According to A4A's estimate, if each carrier reports for itself, six months may be adequate for on-time performance and oversales reports; for baggage reporting, even using the current matrix, it will take 24-36 months. A4A also submitted comments opposing the Department's proposal to change the mishandled baggage reporting matrix contained in Docket DOT-RITA-2011-0001 and those comments were considered in connection with that rulemaking. The Republic carriers (Republic, Shuttle America, and Chautauqua), Frontier Airlines, JetBlue Airways, and Southwest Airlines are all in support of the proposal. Republic supports the proposal to have the mainline marketing carriers report the service quality data for flights operated by their CPA code-share partners. In conjunction with its comments on the expansion of the reporting carrier pool, Republic states that the flights operated under CPAs are sold, marketed, and handled by the mainline carriers under their names and designator codes. In addition, Republic asserts that the mainline carriers also schedule and monitor the arrival and departure times for all flights operated under their codes. Therefore, according to Republic, the CPA operating carriers do not have possession of the customer service quality data required by the reports and have no ability to obtain such data from their marketing carriers. Frontier Airlines believes that this proposal will fill another data gap in the current monthly ATCR whereby reporting carriers only provide data for mainline operations but not code-share operations. Frontier further states that without this data the ATCR only provides a partial picture of the travel experience under the mainline carrier's brand. Frontier submits that the gap in data under the current reporting structure may incentivize mainline carriers to engage in certain unfair practices to boost their performance. In support of this proposal and the proposal to expand the reporting carrier pool, JetBlue states that at certain airports a majority of flights are sold to consumers by a legacy carrier and operated by a regional partner. JetBlue states that under the current rule, basic data, such as on-time performance, mishandled bags and other metrics, are not reported by either of these carriers, even though the consumer bought the ticket from a legacy carrier ( i.e., a Part 234 reporting carrier). Southwest Airlines also supports the proposal and notes that it operates 100% of its domestic scheduled flights yet many legacy carriers have extensive code-share operations. Southwest argues that the current reporting structure may lead to consumer confusion or misrepresentation and hinder competition. Furthermore, Southwest believes that airports are also judged for on-time performance in a market or region where airports are competing for customers; therefore, airport data should be complete and relevant. Regarding the costs and benefits of this proposal, Southwest states that the cost to mainline carriers may not be significant as they are already calculating the revenue derived from each code-share partner and they should be able to calculate those flights' on-time performance. In closing, Southwest states that if the Department concludes that such a requirement is too burdensome, it would support A4A's proposed alternatives. Cape Air, Delta Air Lines, and United Airlines submitted comments in opposition to this proposal. Cape Air asserts that it is not beneficial to require existing carriers to report their code-share flights because to include the data for smaller regional flights with the statistics of major carriers would skew the report by giving equal weight to flights that carry significantly fewer passengers, and the report would not reflect the experience of the majority of customers traveling on the reporting carrier's flights. Delta proposes that regional operating carriers should be required to report data for their flights as the marketing carriers are in a poor position to verify the accuracy and quality of data received from code-share partners. Delta also argues that dual reporting will result in duplicate data by different carriers. Regarding the Department's question on whether double counting is an issue under this proposal, Delta states that double counting is a problem with respect to mainline-to-mainline code-share flights. Delta suggests that these flights should be exempted from reporting as the Department's primary regulatory interest on this issue is to collect and publish data from regional code-share flights. As with A4A's comment, Delta points out that these mainline-to-mainline flights only represent 2% of reportable flights and consumers are well informed that the mainline operating carrier is different from the marketing carrier. United Airlines also opposes the proposal to require mainline marketing carriers to report code-share flights data. United argues that the Department has provided little data or anecdotal evidence to support the hypothesis that the current reporting structure results in consumer confusion or misrepresentation. In addressing the 2011 GAO report and its recommendation for the Department to collect and publicize more comprehensive on-time performance data, United argues that such a goal can be accomplished by expanding the reporting carrier pool to include smaller carriers, as proposed in this rulemaking. United further argues that the GAO report only recommended additional on-time performance data collection and did not recommend that the Department expand the universe of mishandled baggage and oversales reporting to include code-share flights. United states that if the Department adopts the proposed requirement on code-share flights reporting, certain modifications should be made, in which the mainline carriers should not be responsible for reporting data for flights that they do not operate and the operating regional carriers should be reporting this data. With respect to the time a carrier may need for preparing for its initial report under this new reporting requirement, United avers that significant lead time is needed—at least 18-24 months for on-time performance and oversales data reporting, and at least 36 months for the mishandled baggage reporting, assuming the Department adopts its proposal for reporting mishandled baggage as proposed in DOT-RITA-2011-0001. With respect to preparing reports for code-share flights following the initial report, United asserts that the carriers will need more than the current 15-day window. In that regard, United suggests that should the Department adopt the proposal to require marketing carriers to report data for code-share flights, the report deadline for this data should be expanded to at least 30 days after the end of the month. United also opposes imposing the reporting requirement on “non-branded” (mainline-to-mainline) code-share flights in which both operating carrier and non-operating carrier market and sell seats on the flights. All airports and airport associations that filed comments support this proposal. ACI-NA points out that over half of flights by the three largest carriers are operated by code-share partners and this change will provide more comprehensive information on which to base travel decisions without unduly burdening air carriers. AAAE asserts that requiring reporting of code-share performance data will have an overall positive operational impact, as on-time performance at large hub airports can differ between mainline and code-share flights. The commenter further asserts that including code-share flights performance data in the marketing carriers' reports will benefit consumers because consumers cannot discern the difference between mainline carriers and code-share operating carriers as mainline carriers manage marketing, ticketing, and ground operations. California Airports Council points out that regional carriers now provide the vast majority of scheduled services to California airports, and over half of all daily domestic flights in the United States. The organization argues that the current reporting requirements do not always provide accurate and comprehensive data to consumers as almost 50% of the domestic flights marketed by the nation's three largest airlines are operated by code-sharing partners. As an example, California Airports Council states that United Airlines' on-time arrival rate at San Francisco International Airport (SFO) would have been 6% lower in July 2014 if code-share flights were included compared to what was reported under the current regulation. The commenter states that some of its member airports serving small communities and SFO have a much lower on-time performance rate than the national average and that the relatively poor on-time performance of certain flights at those airports is being obscured by the current reporting process. MasFlight also commented on this proposal, stating that monthly air carrier information published by the Department that correctly groups both mainline and regional flights under the marketing carrier's code would be valuable from a consumer perspective and provide an apples-to-apples comparison among airlines. However, masFlight states that such an objective can be accomplished in less costly ways as the Department's proposed method duplicates work, requires transfer of information among partner carriers and creates new overhead investment by the Department itself. MasFlight distinguishes two types of code-share arrangements, “regional code-share operations” in which mainline carriers contract for exclusive or near exclusive capacity on flights operated by regional partners, and “partnership operations” in which the marketing carrier has limited inventory on the operating partner's flight. MasFlight supports the Department's view as stated in the NPRM that regional carriers' operating quality should be attributed to the marketing carriers' performance records but argues that only marketing carriers that control over 25% of the seats on a flight should have the operating records attributed to them. DOT Responses: The Department's monthly ATCR provides airline service quality data to the public and ranks reporting carriers' performance based on several categories. Three of the six categories ranked and reported in the ATCR—flight delays, mishandled baggage, and oversales—are based on data collected by BTS pursuant to 14 CFR part 234 and part 250. The ATCR's performance tables, particularly the rankings, are widely accepted as important indicators of the carriers' quality of service, and are frequently referred to in news reports, industry analyses, academic studies, and consumer commentaries and forums. The ATCR data and rankings as reflected in news reports and institutional studies have a significant impact on a carrier's image and brand identity, which in turn has a potential effect on the decision making of many consumers when deciding to purchase air transportation. In the NPRM, we discussed the inadequate scope of current data collection, the most significant area being that a marketing carrier's flights operated by code-share partners are not included in the reported data. After reviewing the comments submitted on this subject, the Department is further convinced that it is in the public interest to address the discrepancy between legacy/mainline carriers' ATCR data that represent only 38%-55% 4 of all domestic scheduled flights that are branded with the marketing carriers' codes, and low-cost carriers' ATCR data that often contain close to 100% of all flights sold by those carriers under their codes. Consequently, we are finalizing the proposal requiring mainline marketing carriers to report the service quality data for flights operated by their code-share partners, which, in our view, will benefit consumers by providing them more information. Although consumer confusion is not always the case, we recognize that in many instances consumers may consider these code-share flights operated by code-share regional partners to be air transportation service provided by the mainline carriers to the same extent as the flights actually operated by the mainline carriers. This is particularly true if, as in most cases, the mainline carriers also handle flight scheduling and virtually all aspects of ground operations including customer service related issues, such as dealing with oversales situations, providing denied boarding compensation, and addressing mishandled-baggage reports. This change will also benefit consumers because including performance data for these code-share flights in the marketing carriers' ATCR records will provide both the operating carriers and the marketing carriers the incentive to universally improve performance quality, regardless of whether the flights are operated by mainline carriers themselves or their code-share partners. 4 Data based on 2015 operation information collected by the Department's Bureau of Transportation Statistics, Office of Airline Information. The Department also carefully considered the comments submitted regarding the difference between the “fee-for-service” code-share arrangements and the “multiple-marketing-carrier/brand” code-share arrangements. In the fee-for-service code-share arrangement, the sole marketing carrier contracts with the operating carrier to purchase all seats on the flights, sets the flight number with its own airline designator code, and brands the flight with the marketing carrier's brand name, often with the suffix of “Express” or “Connection” to identify that it is a regional-carrier flight. The marketing carrier is responsible for setting the flight schedules, in consideration of and in coordination with its network capacity, potential for connections, and overall efficiency. The marketing carrier's operation control center makes decisions on flight dispatching, and often handles many ground services such as checking in at the airport, baggage handling, boarding and deplaning. Passengers with service related issues will contact the marketing carrier's customer service center for assistance. The operating carrier is only in charge of the flight operation and onboard passenger services. In the Department's view, fee-for-service code-share flights are an integral part of the marketing carriers' networks and their performance quality is an important component of the marketing carriers' overall performance quality. The public will benefit from a complete view of a marketing carrier's performance record that includes the fee-for-service flights operated by another carrier, for which the marketing carrier has control over virtually every aspect of the air transportation service except the operation of the flight itself. Fee-for-service code-share arrangements allow a marketing carrier to reach regional markets without taking on expensive investments such as purchasing/leasing and operating aircraft or training and maintaining flight crews. Marketing carriers also have economically sound reasons to retain many ground handling tasks for code-share flights, such as maintaining consistent brand quality and fully utilizing existing ground personnel and equipment. For these reasons, the performance quality of these fee-for-service code-share flights should be attributed to the marketing carrier's ATCR records and rankings. In this final rule, we adopt the requirement for marketing carriers to report to the Department service quality data of domestic fee-for-service code-share flights marketed under their codes. Accordingly, all reporting carriers will continue to file reports for on-time performance, mishandled baggage, and oversales for flights that they operate. Those reporting carriers that market fee-for-service flights operated by another carrier will be required to submit a second set of data for those flights. We specifically address the three reporting subjects as follows: On-time performance data: We have considered the comments by A4A and others about the burden to marketing carriers and determined that there are ways to address this issue while still obtaining the data that will achieve the goal of the Department. Specifically, for flights that are operated under the marketing carrier's code on a fee-for-service basis by a reporting carrier, the Department will reduce the marketing carriers' reporting burden by requiring them to simply identify on a monthly basis those fee-for-service flights that they market. The Department's Bureau of Transportation Statistics (BTS) will extract the on-time performance data from the reports already submitted by those flights' operating carriers that are reporting carriers. For fee-for-service flights that are operated by a non-reporting carrier, it is the marketing carrier's responsibility to provide the full set of on-time performance data for each flight in the same manner as they report for the flights they operate on their own. Mishandled baggage and oversales data: For mishandled baggage and oversales data, because carriers are only required to file those reports in the aggregate (as opposed to filing on-time performance data on a flight by flight basis) we see no need to simplify the reporting data in the way that we did for on-time performance data. As such, the reporting carriers that market fee-for-service code-share flights must submit a second set of mishandled baggage monthly reports that contains the data for all reportable fee-for-service flights that they market, and a quarterly oversales report that contains the data for all reportable fee-for-service flights that they market. This final rule differs from the NPRM in which we proposed to have the marketing carriers report a second set of data that contains data for all flights they market, including not only the code-share flights but also the flights the marketing carriers operate. Requiring a second set of reports that contain only fee-for-service flight data potentially slightly reduces the burden on carriers by eliminating the need to prepare a report that combines data from the report on flights operated by the reporting carrier and data on flights operated by a code-share partner on a fee-for-service basis for the reporting carrier, while affording the Department the flexibility to add all flight data together, or to view flight data for reporting carriers' own flights and code-share flights separately. In contrast to fee-for-service code-share arrangements, the multiple-marketing-carrier code-share arrangements involve more than one marketing carrier for a single flight operation. Thus, under this type of code-share arrangement, a single flight is coded with more than one carrier's designator code and flight number. In the NPRM, we mentioned only the mainline-to-mainline code-share arrangements (in which two mainline carriers both market the same flight under each carrier's code and one of the mainline carriers also operates the flight) and sought comments on whether these flights should be included in the non-operating marketing carrier's reports. After viewing a snapshot of multiple-marketing-carrier code-share flights for the first quarter of 2015 compiled from the Official Airline Guide, part 234 data, and the Origin and Destination Survey, we realize that several variations exist under the multiple-marketing-carrier code-share arrangements. Some of the flights are marketed under the codes of only two carriers, one of which operates the flight. In those situations, the carrier that is both marketing and operating the flight could be a mainline carrier (as referred to in the NPRM as “mainline-to-mainline” code-share) or a regional carrier that markets a small number of seats on the flight. Another variation is multiple carriers market the flight and the operating carrier and non-operating carriers all sell a certain number of seats on the same flight. Yet another variation is the situation in which the operating carrier does not market the flight but two or more non-operating carriers market the flight. In the 2015 first quarter data we reviewed, we found one flight that carried five different carriers' designator codes. With respect to each marketing carrier's share of seats on a flight, we found great variation as well. While a large percent of these flights have a “main” marketing carrier that sells the great majority of the seats, many flights with two marketing carriers split the seats approximately half and half, one third and two thirds, or a quarter and three quarters. At this point, the Department lacks information on how carriers share the control and responsibility for handling multiple-marketing-carrier code-share flights under various arrangements, such as which carrier(s) determine the flight schedule and which carrier(s) handles baggage and oversales. We can only speculate that much of this information will depend on which carrier controls what percentage of seats on a given flight. We also lack information on how consumers perceive the multiple-marketing-carrier flights with respect to their brand identity. As stated in the NPRM, our primary regulatory interest at this time is collecting and publishing data on code-share service operated by the regional-carrier partners of the larger U.S. airlines. We recognize that this primary purpose is served by capturing the fee-for-service flights' performance quality and attributing this information to the only marketing carrier's performance records. As the multiple-marketing-carrier code-share flights only count for a small percentage of the total number of code-share flights, we have decided that marketing carriers that are not the operating carrier will not be required to include those flights in their second set of reports. We will, however, continue to monitor how multiple-marketing-carrier code-share arrangements evolve both with respect to their structures and their volumes. Should we see the need to include these code-share flights in any marketing carriers' performance reports, we will address this matter in a future rulemaking. Regarding Travelers United and National Consumer League's comment urging the Department to collect flight performance data for international flights, we note that the current part 234 reports cover only domestic scheduled flights and the current part 250 reports cover domestic scheduled flights and international scheduled flights departing a U.S. airport. To require reports for other international flights is beyond the scope of the NPRM. With respect to Consumers Union and U.S. PIRG's question on the soundness of the Department's proposal to limit the reporting of code-share flights data to non-stop flights operated by code-share partners, we clarify that both the current reporting system and the final rule as adopted require carriers to report flight performance data on a per flight segment basis. As such, all domestic segments of a multi-segment direct flight are covered by the reporting requirement in the existing rule and in this final rule. With respect to the compliance date of this rule by which all marketing carriers that report to the Department under parts 234 and 250 are required to file a second set of data for their fee-for-service code-share flights, we have fully considered the comments submitted and decided that it is reasonable to set the compliance date as transportation that takes place on or after January 1, 2018, coinciding with the compliance date for all reporting carriers to comply with the revised mishandled baggage reporting rule (Docket DOT-RITA-2011-0001). As with that rulemaking, we believe that choosing the first day of the year as an effective date will make future year-over-year comparisons more meaningful, and the carriers will have more than a year to work with their code-share partners to structure an internal system by which both carriers work together to compile the reports required from the marketing carriers. As such, all reporting carriers that market fee-for-service code-share flights will be required to file a second set of data that contains those code-share flights' on-time performance and mishandled baggage information for the month of January 2018 by February 15, 2018, and to file a second set of data that contains those code-share flights' oversales information for the first quarter of 2018 by April 30, 2018. (3) Codifying 49 U.S.C. 41712(c) Regarding Web Site Disclosure of Code-Share Service and Other Amendments to 14 CFR Part 257 The NPRM: Code-sharing is an arrangement whereby a flight is operated by a carrier other than the airline whose designator code is used in schedules and on tickets. In the NPRM, we proposed to amend 14 CFR part 257 to codify 49 U.S.C. 41712(c) (added by Pub. L. 111-216, sec. 210, August 1, 2010), which requires U.S. and foreign air carriers and ticket agents to disclose code-share arrangements during Web site schedule searches “on the first display of the Web site following a search of a required itinerary in a format that is easily visible to a viewer.” In addition, we proposed the following interpretations of the statutory language: (1) Clarifying that this requirement covers any ticket agent “doing business in the U.S.” to include entities marketing to U.S. consumers via the internet even if the ticket agent does not have a physical presence in the United States; (2) clarifying that this requirement covers flight schedule information provided by carriers and ticket agents via mobile Web sites and mobile applications; and (3) clarifying that “in a format that is easily visible for a viewer” means the disclosure must appear in text format immediately adjacent to each code-share flight displayed. We sought comments on whether we should also specify minimum standards on the text size of the disclosure in relation to the text size of the schedule itself. DOT also proposed to explicitly state in the rule text that verbal disclosure of code-share arrangements must be made the first time a code-share flight is offered. Further, we proposed certain editorial revisions to the language of part 257 to reflect the technology changes in the airline industry's reservation and ticketing systems that have resulted in the predominant use of online reservation systems and electronic tickets. Comments: Five consumer rights advocacy groups submitted comments generally in support of the Department's proposals. In their joint comments, Consumers Union and U.S. Public Interest Research Group agree with the Department's view that the requirement of 49 U.S.C. 41712(c) as codified in part 257 should cover all Web sites that market to U.S. consumers. They also support having code-share information displayed or disclosed with equal prominence in all oral and written communications, Web site displays, printed flight schedules, and advertisements. Flyersrights.org states that airlines should be required to disclose the routes that they are flying, particularly over conflict zones. Travelers United and National Consumers League support the proposal to cover all carriers and ticket agents doing business with the U.S. public regardless of whether the business is domiciled in the United States. In their joint comments they also support the proposal to cover advertisements for flights to, from, and within the United States that are marketed to U.S. consumers. With respect to disclosures in Web site itinerary searches, the commenters support the proposal that disclosures must be immediately adjacent to each code-share flight. They recommend that the Department should extend the code-share disclosure to boarding passes so passengers who are not directly involved in the ticket booking process will not be confused. A4A submitted comments on behalf of its member airlines expressing its concerns about the application of the regulation's requirements to mobile applications and noting that the statutory language does not expressly address mobile applications. A4A urges the Department to be flexible toward the application of the disclosure rule to mobile devices and software and suggests that instead of mandating minimum font sizes and requiring that the disclosure be immediately adjacent to the entire itinerary, the Department should prioritize all of the new disclosure requirements and consider how these disclosures will fit with one another and in different ticketing platforms. Delta Air Lines opposes the proposed change in rule text that specifically requires verbal disclosure of code-share arrangements to be made the first time a code-share flight is mentioned. Delta believes that the current rule requiring verbal disclosure to be made “before booking transportation” should be interpreted as “at the end of the reservation process.” Delta argues that the proposed language is a radical departure from the Department's stated policy of the past two decades, and that such a requirement will complicate and slow the reservation process, will increase reservations costs, and is contrary to the interests of consumers. Delta estimates that each disclosure statement would add approximately 5 seconds to a call and that it would incur $1 million additional annual recurring cost to its reservation department should the Department adopt the proposed language. In closing, Delta argues that the Department has shown no need for such a change and the current rule provides the appropriate notice to consumers at the appropriate time. Arab Air Carrier Association (AACA) opposes the idea that the Department should dictate code-share disclosure display format and font size on Web site itinerary search results. AACA argues that the format used by the agent should govern display formats and font sizes and any costs for changes to displays should not be passed on to carriers. Several ticket agents and ticket agent associations also submitted comments on this proposal. Travel Technology Association, American Express Global Business Travel, and Amadeus point out that the proposed rule text omitted language in the current rule that requires the airlines to provide code-share information to computer reservation systems (also known as Global Distribution Systems or GDSs) in which they participate. The commenters state that the Department should restore the language to make it clear that airlines must share code-share information with the GDSs. With respect to code-share disclosure on mobile devices, Travel Technology Association and Amadeus state that the Department should take into consideration the limited space on mobile device displays, or the ever-changing ways in which information is disseminated to consumers through social media. These commenters state that they are not asking the Department to exempt these devices but to recognize the need for a more flexible approach. American Express Global Business Travel also urges the Department to carefully consider the impact of code-share disclosure requirements on mobile device platforms. TripAdvisor believes that the Department should exclude disclosure requirements for mobile devices less than 8 inches diagonally. In support of this position, TripAdvisor states that phones have extremely limited display space and may be further limited by the operating system and applications. In the alternative, TripAdvisor suggests that the Department should consider other disclosure methods for mobile devices such as disclosing on the first screen after a consumer selects a flight. The U.S. Tour Operators Association (USTOA) asserts that the Department's requirement for oral and telephone code-share disclosure would impermissibly exceed the specific obligation imposed by Congress under Section 41712. The American Society of Travel Agents (ASTA) believes that the target of the disclosure requirement should be the purchasers of the air transportation instead of the passengers, as it stands now, because it is not always the purchasers who would be the passengers. ASTA states that the rule should clarify that the obligation of ticket agents is fulfilled when disclosure is made to the ticket purchaser. DOT Responses: The Department's current regulation on the disclosure of code-sharing and long term wet lease arrangements, 14 CFR 257.5, was designed to ensure that consumers are aware of the identity of the airline actually operating their flight in code-sharing and long-term wet lease arrangements in domestic and international air transportation. Code-share disclosure is important because the identity of the operating carrier is a factor that affects many consumers' purchasing decisions. In that regard, we believe that codifying 49 U.S.C. 41712(c) and strengthening the code-share disclosure requirements is an effective way to prevent potential consumer confusion. The Department has carefully reviewed all relevant comments on the proposed revisions of the code-share disclosure rule in 14 CFR part 257, and has decided to adopt the following revisions. Section 257.3 Definition: In the definitions section, 14 CFR 257.3(g), we are replacing the term “Transporting carrier”, which is used throughout section 257.5, with the term “Operating carrier” to refer to the carrier in a code-share or wet lease arrangement that has the operational control of a flight but does not market the flight in its own name. As explained in the NPRM, by such an amendment we are trying to achieve consistency with other recently amended consumer protection rules, see, e.g. , 14 CFR 259.4(c) (code-share partners' responsibilities in tarmac delay contingency plans) and 14 CFR 399.85(e) (notice of baggage fees for code-share flights). As the definitions in section 257.3 are arranged in alphabetical order, the definition for “Operating carrier” now is under section 257.3(f), and the definition for “Ticket agent”, previously under section 257.3(f), is now under 257.3(g). Section 257.5(a) Notice in flight itineraries and schedules: In section 257.5(a) with respect to disclosure in flight itinerary and schedule displays, we are codifying the requirement of 49 U.S.C. 41712(c) in the rule text of 14 CFR 257.5 by requiring that Web site itinerary search results provided by carriers and ticket agents must disclose any code-share arrangement on the first display of the Web site following such a search, in a format that is easily visible to a viewer. We are also adopting our proposed requirement that not only carriers but also all ticket agents doing business in the United States with respect to flights within, to or from the United States will be covered and must provide code-share disclosure. As we stated in the preamble of the NPRM, any ticket agent that markets to consumers in the United States, either from a brick-and-mortar office located in the United States or via an internet Web site that is marketed towards consumers in the United States, would be considered to be “doing business in the United States.” The requirement would cover any travel agent or other ticket agent that does not have a physical presence in the United States but has a Web site that is marketed to consumers in the United States and displays schedule, fare or availability information for flights within, to, or from the United States. We believe this requirement is reasonable and appropriate given the expansion of e-commerce that effectively eliminated, in many cases, the necessity of having a physical presence in a certain country for providing intangible service products such as air travel reservation service to consumers in that country. To determine whether a Web site is marketed to U.S. consumers with respect to code-share disclosure requirements for itinerary display (in section 257.5(a)) and in airfare advertising (in section 257.5(c)) a variety of factors will be considered—for example, whether the Web site is in English, whether the seller of air transportation displays prices in U.S. dollars, whether the seller uses banner advertisements or highlights special deals for flights to or from the United States, whether the seller has an option on its Web site that differentiates sites or pages designed for U.S. and other consumers, and whether the Web site distinguishes between persons with addresses or telephone numbers in the United States and those outside the United States in the sales process. We note that this is consistent with the enforcement policy currently applied in connection with the Department's full fare advertising rule, 14 CFR 399.84. The second requirement that we adopt here is that, for a code-share disclosure in an itinerary search result Web page to meet the section 41712(c) requirement to be “in a format that is easily visible to a viewer,” the disclosure of the operating carrier must 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. Under this requirement, it is not sufficient to locate the disclosure elsewhere on the same Web page that displays all search results meeting the search criteria, such as at the very end of the Web page, with an asterisk or some other symbol next to each flight that has a code-share arrangement. In coming to this conclusion, we observed that quite often there are multiple flights that meet the search criteria so having code-share disclosures located elsewhere on the page, such as at the bottom of the page, is visually remote from the itineraries that include a code-share flight and would likely be overlooked by consumers. This is true particularly in the situation where the entire Web page does not fit on the screen display and the viewer must scroll to the bottom of the page to see the disclosure. In that case, we consider the disclosure located at the bottom of the page to not be on the “first display” following an itinerary search, as required by the statute. Accordingly, we consider disclosure of the operating carrier directly adjacent to each flight displayed with the marketing carrier's name and/or code to best meet our goal of clearly and prominently identifying all fights that are under a code-share arrangement. With respect to code-share disclosure in flight itinerary search results and flight schedule displays provided through mobile devices via Web sites specifically designed for mobile devices (mobile Web sites) or applications (apps), we appreciate the commenters' insight that mobile devices have limited screen display space and it is more difficult to fit all the information into one screen display. However, we also recognize that the use of mobile Web sites and apps is becoming more and more popular among consumers and we only expect this trend to continue with the development of technology that brings the convenience and accessibility of mobile devices to many more consumers' daily life. As such, it is important to ensure that displays on mobile devices include code-share disclosure, but it is also important to ensure that code-share disclosure requirements take into account the limitations of mobile Web sites and apps. As a compromise, we are adopting a simplified format for display of code-share disclosures via mobile Web sites and apps. Specifically, instead of disclosing the code-share arrangement as “flight 123 is operated by Jane Doe Airlines d/b/a QRS Express,” where “Jane Doe Airlines” is the corporate name of the operating carrier and “QRS Express” is the brand name of the domestic code-share network ( e.g. , American Eagle, Delta Connection, United Express), on mobile Web sites and apps, carriers and ticket agents will be permitted to simply disclose the corporate name of the operating carrier, e.g. , “flight 123 operated by Jane Doe Airlines.” We believe this compromise is appropriate in striking a balance between sufficiently identifying the operating carrier while preserving some space on mobile displays which is more limited than space on computers. Carriers and ticket agents that are already displaying code-share disclosure information in the same manner as they are required to do on the desktop Web site are free to either maintain such a display format or switch to the simplified format as discussed above. The Department will continue to monitor the development of mobile Web sites and apps and consider amendments to this requirement as necessary. In connection with comments regarding the requirement for airlines to provide code-share information to the GDSs that they use, we acknowledge that the requirement was inadvertently omitted from the proposed rule text in the NPRM. We are adding the language back to the final rule text to make it clear that if an airline provides schedule information to a GDS, it is required to provide code-share information to the GDSs who can in turn provide the information to ticket agents and consumers. Section 257.5(b) Notice in oral communications with prospective consumers: Section 257.5(b) requires that carriers and ticket agents must identify the actual operator of a code-share flight to a prospective consumer, “before booking air transportation,” over the telephone, or through other means of oral communication. In the preamble of the 1999 final rule implementing this requirement, we explained that the phrase “before booking transportation” reflects the Department's enforcement policy: During a given encounter (phone call, visit, etc.) the agent or carrier may not wait until after the consumer has decided to make the reservation or purchase the ticket and disclose the code-sharing arrangement only when reading back the flight information. Instead, the disclosure must be made at the time that the schedule information is being provided to the consumer during the “information” and “decision-making” portion of the conversation. We then specifically rejected a carrier's suggestion that disclosures should only be required during the booking process. See, 64 FR 12838, March 15, 1999 (emphasis added). We acknowledge that under the existing rule, carriers and ticket agents have a period of time starting from the first mention of a flight involving a code-share operation, through further discussion of the flights available until before the conclusion of the information and decision-making portion of the conversation to make the disclosure. In this final rule, we are clarifying and amending the existing requirement on oral disclosure of code-share arrangements by narrowing the time window carriers and ticket agents are allowed to provide the disclosure. Specifically, instead of having to make the disclosure at any point during the information-gathering and decision-making process, we are now requiring that the code-share information be provided the first time a code-share flight is offered to a consumer or, if no such offer was made, the first time a consumer inquires about such a flight. In adopting the new standard, we believe that requiring disclosure at a certain point rather than during a window of time provides the regulated entities a clearer threshold for compliance. In addition, a clear rule that requires disclosure during an early stage of the process benefits consumers and aligns with the online display disclosure requirements of the statute. The Department views the statutory language in section 41712(c)(2) requiring code-share disclosure in internet schedule search to be on the first display as an indication of Congressional intent so such information will benefit consumers searching for airfares to the maximum extent in making purchasing decisions. Accordingly, we are extending this approach to code-share disclosure in oral communications to enhance information provided to consumers purchasing air transportation through telephone or in person. We reject some commenters' view that requiring disclosure of code-share information the first time a code-share flight is mentioned will impose unreasonable cost on carriers and ticket agents. In our view, the cost is not unreasonable given the importance of the information. Delta commented that each disclosure will add 5 seconds to a telephone reservation call and estimated that complying with the disclosure requirement as proposed will add $1 million annual recurring cost to its reservations department. This assertion is not only unsubstantiated by underlying data, it also fails to consider that disclosing a code-share arrangement for the first time right before the prospective customer confirms the reservation may potentially cost more to carriers and ticket agents because such information disclosed at the last minute may result in some consumers deciding to revisit all the travel arrangements already made and possibly begin the reservation process again to look for flights that are operated by a different carrier. In fact, according to Delta's interpretation of the current rule, a carrier or ticket agent may stay silent about any code-share arrangements included in a number of flights that a consumer can choose from, and only disclose the code-share nature of the one flight the consumer has selected for booking. This approach completely defeats the purpose of the code-share disclosure requirement, which is to provide complete and accurate material information that may affect consumers' decision making. It is the Department's policy determination that disclosing all material information about a flight early in the reservation process, including code-share arrangements, is the most efficient way to fully use the time of the reservation agents and the consumers. This section currently applies to, and, under this final rule, will continue to apply to, both U.S. and foreign air carriers, as well as ticket agents doing business in the United States, which is interpreted in the same manner as described in the discussion of that phrase in section 257.5(a) above. Consequently, a ticket agent that sells air transportation via a Web site marketed toward U.S. consumers (or that distributes other marketing material in the United States) is covered by section 257.5(b) even if the agent does not have a physical location in the United States, and such an agent must provide the disclosure required by section 259.5(b) during a telephone call placed from the United States even if the agent receives such calls at a foreign location. Section 257.5(c) Notice in ticket confirmations: We have received no comments on this section and we are adopting the changes to the rule text as proposed in the NPRM. Specifically, we retain the basic requirements listed in 14 CFR 257.5(c)(1) that requires written disclosure of code-share arrangements “at the time of purchase”; each flight segment involving a code-share arrangement that has its own flight number must be identified individually with the disclosure information immediately adjacent to the flight number; and 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. We are also deleting the language in 14 CFR 257.5(c)(2), (c)(3), and (c)(4) that contain outdated references to paper tickets. As paper tickets have predominantly been replaced by electronic tickets, the Department considers a universal requirement to provide disclosure at the time of purchase through a notice automatically generated by the reservation systems to be reasonable and not overly burdensome. Section 257.5(d) Notice in city-pair specific advertisements: Paragraph (d) deals with disclosure requirements in city-pair specific advertisements. We are adopting the proposal in the NPRM to use the phrase “written advertisement” to replace the phrase “printed advertisement,” which in the current rule text refers to both advertisements printed on paper and advertisements published on the internet. We believe the word “written” is more accurate in describing both types of advertisements. In addition, we are adding a descriptive phrase—“marketed to consumers in the United States”—in an effort to reduce the possibility of misunderstanding by specifying the scope of the disclosure requirements on internet advertisements. This is meant to clarify that the disclosure requirement applies to all internet advertisements for flights within, to or from the United States that are marketed to consumers in the United States. Similar to the scope of the code-share disclosure requirement for flight itinerary and schedule displays, this approach is consistent with the intended scope of other air travel consumer protection rules, and ensures that internet advertisements marketed to consumers in the United States will be covered even if the hosting server for the Web site is located outside of the United States. We note that this standard will cover all advertisements appearing on a carrier's or a ticket agent's own Web site, as well as advertisements that are presented to U.S. consumers through other paid advertising venues on the internet (such as a news media Web site or a travel blog Web site) and social media Web sites (such as Facebook or Twitter). In the NPRM, we sought comments with regard to whether applying the same standard to advertisements on all of these Web sites is reasonable and technically practical in light of the brevity of these media posting formats and we received no specific comments. Although some social media communication formats impose a character limit on postings, we do not consider at this time that such limit would warrant a more relaxed code-share disclosure rule for city-pair specific advertisements through these social media formats. Another change proposed in this NPRM concerns the example disclosure statement in the rule text that a seller of air transportation must include in a radio or television broadcasting advertisement. The current sample statement includes the phrase “[s]ome services are provided by other airlines.” Because the words “services” and “provided” cover a wide range of activities, including ground operations, customer service, etc., they do not accurately convey the information we intended to relate, which was regarding the actual operation of a flight. Accordingly, we are changing the sentence to read “[s]ome flights are operated by other airlines.” Finally, we have decided not to adopt in this final rule the suggestion by Travelers United and National Consumers League to require carriers to provide code-share information on passengers' boarding passes. Passengers have access to, and likely retain a copy of their ticket confirmation before and during their travel even if they did not purchase the tickets themselves, and the relevant code-share information is provided in the ticket confirmation as required by the current rule. To add code-share information on boarding passes could enhance code-share disclosure but we are not sure it is necessary and cost effective. U.S. and foreign air carriers and ticket agents should be meeting these disclosure requirements for code-share arrangements by the effective date of the rule. (4) Disclosure That Not All Carriers are Marketed The NPRM: In the NPRM, the Department stated that it was considering requiring large travel agents to disclose whether they display the airfares of all carriers serving any market that can be searched on the travel agents Web site. We stated that many online travel agents provide flight and fare information for a significant number of carriers—but not all carriers—serving a particular city-pair market or, in some markets, online travel agents may not provide information regarding any carrier serving the market. Further, the Department stated that online travel agents do not necessarily identify the carriers whose schedule and fare information is or is not provided in search results. As a result, consumers may believe the search results provide all possible flight options for a particular city-pair market when in fact there may be other options available. As stated in the NPRM, the Advisory Committee for Aviation Consumer Protection recommended that DOT require ticket agents, including online ticket agents, to disclose the fact that they do not offer for sale all airlines' tickets, if that is the case, and to advise consumers that additional airlines may serve the route being searched, so that consumers know they may need to search elsewhere if they want to find all available air travel options. The Department sought comment on whether to create a disclosure requirement for all ticket agents or just large ticket agents, and if so, in what manner. Specifically, the Department asked for comment on whether to require ticket agents to prominently note on their Web sites that not all U.S. air carriers and non-U.S. air carriers serving the United States are displayed on the Web site or marketed by the travel agent or to prominently display a statement in connection with a search of a particular city pair that not all airlines serving those cities are displayed on the Web site or marketed by the travel agent. The Department also sought comment on whether to require online travel agents to specifically identify all of the airlines that it markets. Comments: Among airline commenters, some support the requirement to identify carriers marketed, while others oppose it. The Arab Air Carriers Organization, and some carriers, including Frontier, JetBlue, Southwest, and Spirit, support the proposal to require disclosure regarding carriers marketed. While A4A does not object to the requirement, it states that the Department should not require ticket agents to list carriers not sold. Spirit, in contrast, comments that the Department should require ticket agents to identify carriers not sold and the requirement should apply to all ticket agents, regardless of size. Spirit further argues that disclosure should be provided on every search page and, in support of its position, asserts that the lack of such a disclosure would disproportionately harm price-sensitive consumers who were not given the opportunity to learn about Spirit fares. Southwest states that consumers would benefit from knowing that search results may not include all possible flight options for a city-pair and notes that the information may prompt consumers to visit Web sites such as Southwest.com. Southwest proposes that all ticket agents, regardless of size, should be required to include a generic statement in search results notifying consumers that the results only include certain carriers with which the ticket agent has an agreement. Frontier comments that some large travel agents create the impression that they market and sell air transportation of all airlines when in fact they do not; consumers are not informed that not all carriers are offered and therefore the fare or service options being presented are limited. Consumer advocacy organizations were also divided on this issue. Consumers Union and U.S. PIRG support the requirement and state that ticket agents should disclose all airlines that serve a particular route, and which of those airlines are included in the ticket agent's marketing. Travelers United and National Consumers League (NCL) oppose the requirement, stating that the requirement would not result in a consumer net benefit, citing Web site clutter, among other things. Ticket agents and their associations generally oppose requiring ticket agents to disclose carriers marketed. Travel Tech comments that no consumer harm that resulted from the lack of such a disclosure requirement has been shown. Travel Tech states that “consumers are sophisticated enough to realize that not all carriers may be displayed” and points out that, for example, Southwest advertises extensively that its fares are available only on its own Web site. Meanwhile, the Department's Office of Aviation Enforcement and Proceedings (Enforcement Office) has issued guidance (August 19, 2013, Display of Search Results on Ticket Agent Web sites) stating that Online Travel Agents (OTAs) should not use terms in search results suggesting that no flights exist that match the criteria provided by the consumer to search for and compare flight options from multiple carriers when flights may be available on carriers that the OTA does not market, so according to Travel Tech no new requirement is necessary. Travel Tech members Sabre and Travelport each filed separate comments opposing a requirement to disclose that not all carriers are marketed. Sabre states that such a requirement is unwarranted and unjustified while Travelport states that there is no evidence that the requirement will cure any particular harm and that consumers are already aware that not all carriers distribute through online travel agencies. ASTA also opposes the requirement, stating that there was no evidence of consumer confusion. Several individual travel agents oppose the requirement for the same reason and note that airlines are not required to disclose to consumers that travel agents may offer a greater variety of airlines and destinations from which to choose. ASTA further comments that if implemented, the requirement should be a generalized statement indicating that some carriers' services may not appear in search results. USTOA states that the requirement is unnecessary as the issue has been addressed through enforcement policy; however, if a regulation will replace the enforcement policy, USTOA states that it would support a requirement to include a statement on ticket agents' Web site displays stating that the displayed schedules “may not reflect all carriers in the market.” BCD Travel comments that it is unnecessary for corporate travel companies to disclose which carriers they market because these agents are incentivized to meet corporate clients' needs. Orbitz objects to a requirement that applies only to large travel agents instead of all ticket agents and states that the Department's concern that consumers may mistakenly believe that they are provided with all possible flight options is not supported by the evidence. Orbitz further states that maintaining an accurate list of all of the hundreds of airlines it markets would require regular updates and would not be useful to consumers as most of the airlines listed would not serve the city-pair the consumer is searching. Skyscanner comments that it would not be feasible to display full lists of carriers that are featured on a particular flight search tool because markets are changing regularly and any list would quickly become out of date or inaccurate. According to Skyscanner, such a requirement would likely result in the display of inaccurate information to consumers, “despite the best efforts and intention” of the site displaying the information. Priceline comments that the requirement might make sense for “consumer-facing” Web sites but should not apply to corporate travel Web sites. Carlson Wagonlit Travel states that if such a requirement is implemented, it should apply to all ticket agents, regardless of size, and should be limited to a list on the ticket agent's Web site for consumers and should not apply to corporate travel. American Express Global Business Travel echoes Travel Tech's comments, stating that no specific consumer harm has been shown and “consumers certainly are sophisticated enough to recognize that some carriers' services may not be available through a particular ticket agent distribution channel.” DOT Response: The Department has carefully considered all of the comments and has decided not to adopt a requirement that ticket agents provide disclosure on their Web sites that not all carriers are marketed on their site, if that is the case. The Department recognizes that some sophisticated consumers may realize that not all airlines are marketed on all online travel agents without disclosure by the travel agents, but not all consumers have the same level of sophistication regarding the marketing of air travel. The Department maintains the view that the information is important and should be provided to consumers by ticket agents. However, we are persuaded by commenters that a disclosure requirement resembling any of the alternatives on which we sought comment is not appropriate at this time. We are concerned that a general disclosure that not all carriers are marketed on a particular Web site may be confusing to consumers. For example, a general disclosure may result in wasted search time for some consumers whose particular search results do in fact include all carriers and flights that service a particular route/city-pair, but who continue searching because the disclosure indicates that not all carriers are marketed. In addition, by the time the consumer decides to purchase a flight option that was displayed in the initial search, that particular fare or flight option may no longer be available. Regarding a more specific disclosure for each individual city-pair searched, the Department is concerned that this requirement may be overly burdensome for ticket agents. Ticket agents often market the flights of several hundred carriers serving the United States. A ticket agent may not have all flight information for a particular carrier and the information could change without notice. For example, a carrier may begin serving a destination or exit a particular market without notifying ticket agents; may provide service only seasonally; or may temporarily stop serving a particular city. Accordingly, the Department has determined that it will continue to review this issue and may address it in a future rulemaking if appropriate. In addition, the Department will consider appropriate consumer outreach and education. For example, the Department's Enforcement Office may provide information to consumers that not all carriers are marketed on travel agent Web sites through its consumer publications like “Fly Rights” or consumer forums. These Department actions may be in addition to or instead of engaging in a rulemaking to impose a requirement on ticket agents to disclose airlines that they market. (5) Prohibition on Undisclosed Airfare Display Bias by Ticket Agents and Carriers The NPRM: An electronic airline information system (EAIS) is defined in the NPRM as a system that combines air carrier or foreign air carrier schedule, fare, rule, or availability information for transmission or display via the internet or other communications system to air carriers or foreign air carriers, ticket agents, other business entities, or consumers. In the NPRM, the Department proposed prohibiting any undisclosed bias in any EAIS display of multiple carriers' schedules, fares, rules, or availability. The regulation would require any carrier or ticket agent that provides electronic display of airfare information to provide unbiased displays or disclose the biases in the display. It would apply to all electronic displays of multiple carriers' fare and schedule information, whether the display is available on an unrestricted basis, e.g., to the general public, or is only available to travel agents who sell to the public. The requirement to provide unbiased displays or disclose biases in the display would also apply to electronic displays used for corporate travel unless a corporation agrees by contract to biases in the display used by its employees for business travel. The requirements would apply to displays provided in response to airfare inquiries made by a consumer for a particular itinerary or airfare inquires made by a travel agent or other intermediary in the sale of air transportation for a particular itinerary. Although the regulation would require carriers and ticket agents that provide airfare information electronically to display the lowest generally available airfares and most direct routings that meet the parameters of the airfare search request, it would not prohibit displays that included biases selected by the consumer or the user of the display, such as a preferred carrier. The only prohibition would be on undisclosed biases. We sought comment on whether the prohibition on undisclosed display bias should be limited to airfare and routings and on the costs and benefits of such a prohibition. In addition to the proposal regarding undisclosed display bias, the Department requested comment on whether to require any ticket agent that decides to bias its displays and disclose the existence of bias to also disclose any incentive payments it is receiving for engaging in such a display bias. We sought comment on how such disclosure should be provided and what kind of disclosure of the existence of incentive payments would be most helpful for consumers. Existing Guidance: On February 1, 2011, and March 4, 2011, the Department's Enforcement Office issued guidance that stated that undisclosed display bias in search results for airline service would be considered by that office as an unfair and deceptive practice because it prevents consumers and travel agents who advise consumers from obtaining accurate and complete information on schedules and fares. Although the guidance was not mentioned in the NPRM, several commenters referred to it in their comments. The guidance provided that the manner of displaying itinerary information including carrier, lowest fares, departure times, arrival times, trip duration, or airports, must not favor or disfavor a particular carrier unless the bias is clearly and conspicuously disclosed. The guidance was sent to ticket agent trade associations, major online travel agents, and the GDSs that provide fare, schedule, and availability information to ticket agents that market or sell air transportation to consumers. The guidance was also posted and remains available on the Enforcement Office Web site. Comments Regarding Disclosure of Bias: Consumer advocacy groups Consumers Union, US PIRG, and FlyersRights.org all support the Department's proposal to prohibit undisclosed display bias in search result displays. Consumers Union and US PIRG state that consumers should know “whether the scales are being artificially tilted in favor of certain carriers.” Farelogix, a third party technology provider to the airlines, also supports the prohibition, arguing that bias can cause significant economic damage to an airline and block third parties from creating innovative solutions for the industry. Farelogix comments that it has experienced the negative impact of undisclosed biasing directly. A4A supports the proposal as it applies to ticket agents but states it should not apply to carrier Web sites, commenting that in the past, for example, in the Computer Reservations System (CRS) rulemaking, the Department assumed the public was aware that a carrier would favor its own services on its own Web site over other carriers' services. Several airlines also support the proposal, including Frontier, JetBlue, and Spirit. Frontier states that it supports the display bias rule because if ticket agents bias they do so in favor of large legacy airlines that have greater bargaining power than smaller carriers and are able to pay for display bias, and that this creates an unfair disadvantage to smaller carriers and to consumers. Spirit comments that undisclosed bias distorts the air travel market and subjects consumers to unfair and misleading information when travel agents and consumers are not made aware that their search results are often tailored to favor certain carriers due to undisclosed contract arrangements or payments. Spirit states that if a carrier is not shown or incentives are provided to the ticket agent for more prominently displaying a particular carrier, disclosure is important to allow consumers and travel agents to make informed decisions. United does not support or oppose the proposal but states that the rule text does not clearly reflect the Department's intent as stated in the preamble of the NPRM regarding disclosure of biasing on corporate travel Web sites, i.e. that disclosure is only required to the extent the bias is not [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2016-26178. Public record. Not legal advice.