Disclosure of Code-Sharing Arrangements and Long-Term Wet Leases

SUMMARY: The Department proposes to strengthen its current rules

requiring airlines to notify consumers of the existence of a code-

sharing arrangement or long-term wet lease whereby the operator of a

flight differs from the airline in whose name the transportation was

sold. This action is being taken to ensure that consumers have

pertinent information about airline code-sharing arrangements and long-

term wet leases on domestic and international flights. The Department

is proposing: (1) to require ticket agents (including travel agents)

doing business in the United States and foreign air carriers, as well

as U.S. air carriers, to give consumers reasonable and timely notice

that the travel they are considering purchasing will be provided by an

airline different from the airline holding out the transportation, and

to disclose the identity of the airline that will actually operate the

aircraft; and (2) for tickets issued in the United States, to require

U.S. and foreign air carriers and ticket agents (including travel

agents) to provide written notice of the transporting carrier's

identity at the time of sale of transportation involving a code-sharing

or long-term wet-lease arrangement. The Department also wants to

consider seriously a requirement to print the transporting carrier's

identity on the flight coupon for services involving a code-sharing or

long-term wet-lease arrangement. The Department is making this proposal

on its own initiative. In addition, the Department is denying a

petition filed in Docket 48710 by Donald Pevsner that requested a

complete ban on code-sharing arrangements.

DATES: The Department requests comments by October 11, 1994. Reply

comments should be filed by November 8, 1994. The Department will

consider late-filed comments only to the extent practicable.

ADDRESSES: Comments should be sent to the Docket Clerk, Docket No.

49702, Department of Transportation, 400 7th Street S.W., Room 4107,

Washington, DC 20590. To facilitate consideration of the comments, we

ask commenters to file twelve copies of each comment. We encourage

commenters who wish to do so also to submit comments to the Department

through the Internet; our Internet address is dot_

[email protected].\1\ Note, however, that at this time the

Department considers only the paper copies filed with the Docket Clerk

to be the official comments. Comments will be available for inspection

at this address from 9:00 a.m. to 5:00 p.m., Monday through Friday.

Commenters who wish the Department to acknowledge the receipt of their

comments should include a stamped, self-addressed postcard with their

comments. The Docket Clerk will date-stamp the postcard and mail it

back to the commenter.

\1\Our X.400 e-mail address is G=DOT/S=dockets/OU1=qmail/O=hq/

p=gov+dot/a=attmail/c=us.

FOR FURTHER INFORMATION CONTACT: Patricia N. Snyder, Office of

International Law, Office of the General Counsel, U.S. Department of

Transportation, 400 7th Street SW, Room 10105, Washington, DC 20590.

(202) 366-9179. The Department of Transportation studies noted in this

NPRM may be reviewed in the Department's technical library, 400 7th

Street SW, Room 2200, Washington, DC 20590, between 9:00 a.m. and 4:00

p.m., Monday through Friday; phone (202) 366-0746.

SUPPLEMENTARY INFORMATION:

Background

Several sources of information on airline services widely used in

the United States--most notably the Official Airline Guide and computer

reservations systems `` use a two-character airline designator code to

identify the carrier operating a flight. Code-sharing is the term given

to a common airline industry marketing practice where, by mutual

agreement between cooperating carriers, at least one of the airline

designator codes used on a flight is different from that of the airline

operating the aircraft. In one version, two or more airlines each use

their own designator codes on the same aircraft operation. Although

only one airline operates the flight, each airline in a code-sharing

arrangement may hold out, market and sell the flight as its own in

published schedules.

The term ``code-sharing'' also refers to other arrangements where

the code on a passenger's ticket is not that of the operator of the

flight, but where the operator does not also hold out the service in

its own name. Such code-sharing arrangements are common between

commuter air carriers and their larger affiliates. Arrangements falling

into this category are similar to leases of aircraft and crew (wet

leases).

The Department regulates all international code-sharing

arrangements as wet leases under 14 CFR Parts 207, 208, 212 and 218.

Although code-sharing and wet-lease arrangements can offer

significant consumer benefits, they can also be misleading unless

consumers know that the transportation they are buying will not be

provided by the airline whose designator code is shown on the ticket

and unless they know the identity of the airline on which they will be

flying. The recent growth in use of code-sharing, wet-leasing and

similar marketing tools, particularly in international air

transportation, has given the Department concern about whether the

current disclosure rules (described below) protect the public interest

adequately. This notice proposes to strengthen the rules and requests

public comment.

Benefits of Code-Sharing Services

In its examination of domestic airline interline practices, the

Department noted that only 10% of passengers on certificated air

carriers used interline services, indicating the strong preference of

passengers on connecting flights for on-line service. Interline

Practices in the Airline Industry at 24 (January 1986). There may be

even fewer today. Data for the quarter ended September 30, 1993, show

that interline passengers account for approximately 2.3% of total

passengers based on the Department's Passenger Origin and Destination

Survey. Code-sharing arrangements, which enable airlines to hold out

multi-carrier connections as on-line service, are, in part, a market

response to this demand for on-line service. Often, code-sharing

partners offer services similar to those available for on-line

connections with the goal of offering ``seamless'' service (i.e.,

service where the transfers from flight to flight or airline to airline

are facilitated). They may, for example, locate gates near each other

to make connections more convenient, or coordinate baggage handling to

give greater assurance that baggage will be properly handled.

In addition, airlines claim that code-sharing can help them operate

more efficiently, because they can spread costs by providing a joint

service with one aircraft rather than operating separate services with

two aircraft. Particularly in thin markets, this efficiency can

increase consumers' price and service options or enable the use of

equipment sized appropriately for the market. Thus, overall, the

Department believes that code-sharing can offer significant economic

benefits.

Code-sharing services have expanded significantly since USAir (then

Allegheny Airlines) set up the first code-sharing arrangements in the

1960s. A 1986 DOT study of the regional airline industry found that

code-sharing agreements were a prominent feature of the nationwide air

service network. A Study of the Regional Airline Industry at 80 (May

1986). The study also found that 16 of the 20 largest regional airlines

operating in the continental U.S. participated in a code-sharing

agreement with a major airline. Id. at 27. The Regional Airline

Association's 1993 Annual Report reported that by 1992, the largest 29

regional carriers were code-sharing, 36 of the largest 50 regional

airlines had code-sharing agreements, and 96% of regional airline

passengers flew on code-sharing carriers.

Similarly, international code-shares, which have existed at least

since the early 1980s, have expanded recently. Early international

code-shares tended to involve individual routes; the more recent trend

has been towards code-sharing agreements that involve total route

systems, such as the one between Northwest and KLM. Today, most major

U.S. airlines have code-sharing agreements with foreign airlines.

Benefits of Wet Leases

Some airlines perform some or all of their scheduled passenger air

transportation services by contracting for the equipment and crew of

another carrier (wet lease). Operating by wet lease can permit such

carriers to offer services that might otherwise be unavailable. The

flexibility to contract with other airlines for equipment and crew to

fill operational needs benefits the public by avoiding disruptions and

creating service alternatives that could not otherwise be provided.

DOT Regulatory Policy and Statutory Bases

Section 41712 of Title 49 of the U.S. Code (formerly Sec. 411 of

the Federal Aviation Act) authorizes the Department to decide if a U.S.

or foreign air carrier or ticket agent (including travel agents) has

engaged in unfair or deceptive practices and to ban such practices.

Under that section, the Department has adopted various regulations and

policies to prevent unfair or deceptive practices, such as the rules

governing computer reservations systems (14 CFR Part 255) and the

policy on fare advertising (14 CFR Sec. 399.84).

Although code-sharing and wet-leasing can afford public benefits,

they can also confuse and mislead the public unless prospective

travelers are aware of the arrangements before they select a flight.

Current DOT policy has dealt only with code-sharing, and has been to

consider the practice to be unfair and deceptive and in violation of 49

U.S.C. Sec. 41712 unless consumers are given reasonable and timely

notice of the existence of the code-sharing arrangement. 14 C.F.R.

399.88 (Docket No. 42199, 50 FR 38508, September 23, 1985). The policy

statement expressly applies only to U.S. air carriers, however. It

states that the obligation to give ``reasonable notice'' requires air

carriers, at a minimum to:

(1) Identify, with an asterisk or other means, each flight in

which the airline code is different from the code of the airline

actually providing the service, in written or electronic schedule

information;

(2) Provide information in any direct oral communication with a

consumer concerning a code-sharing flight sufficient to alert the

consumer that the flight will occur on an airline different from the

airline whose code is shown on the ticket and identify the

airline(s) actually providing the service; and

(3) provide frequent, periodic notice in advertising media of

the existence of a code-sharing relationship and the identities of

the airline(s) actually providing the service.

Thus, the current policy recognizes that, to be timely, notice must

be given during all discussions about a code-shared flight. Consumers

must be given clear notice before they make reservations or buy

transportation both that the service they are considering is on a code-

shared flight and of the actual operator's identity, so that they can

consider these facts in making travel purchase decisions.

When adopted, the policy statement on code-sharing disclosure was

not applied directly to ticket agents, since it was believed that

ticket agents would communicate important information to travelers to

retain them as clients. 49 FR 43709; October 31, 1984. Furthermore,

section 41712 of title 49 of the U.S. Code prohibits unfair and

deceptive practices by ticket agents, and Department rules also

prohibit ticket agents from misrepresenting the kind or quality of

service being sold. 14 CFR 399.80(c). In practice, the Department has

not expressly required ticket agents to disclose code-sharing

arrangements, although it would consider enforcement action against

ticket agents who misrepresent code-sharing services as single-carrier

services in response to specific inquiries.

Moreover, since there were few code-sharing arrangements between

U.S. and foreign air carriers at the time of its adoption, the policy

did not explicitly cover foreign air carriers. 14 CFR 399.88. To some

extent, the Department has since moved to address this matter.

Specifically, when the Department approves a code-sharing arrangement

involving a foreign air carrier, it now explicitly requires the foreign

air carrier to adhere to the requirements of 14 CFR 399.88 as a

condition of its approval. See, e.g., Order 94-5-35 (May 24, 1994).

Finally, although the earlier notification rule did not cover wet

leases other than code-sharing arrangements as then defined, other wet

leases appear to present similar opportunities to mislead consumers

into thinking that they are buying transportation from one carrier,

when in fact the transporting carrier will be different.

The Department continues to believe that the public interest is

best served by permitting carriers to engage in code-sharing and wet-

lease arrangements, so long as the public is given reasonable

notice.\2\ These arrangements can expand the price and service options

available to consumers. Moreover, several of our international

agreements specifically authorize code-sharing arrangements. We have

determined, therefore, to limit this rulemaking to whether more notice

is necessary to assure adequate public disclosure. We will not expand

it to entertain comments on other issues, such as whether code-sharing

should be banned.

\2\For this reason, we deny the petition for rulemaking filed by

Donald Pevsner in Docket 48710 to ban code-sharing entirely.

---------------------------------------------------------------------------

Inadequacy of the Current Rule

Experience with the increasing number of code-sharing arrangements

in recent years, combined with consumers' receiving only haphazard

disclosure, has tentatively persuaded us to modify our rules. A recent

DOT enforcement investigation found that airlines and travel agents

failed to disclose code-sharing arrangements 30% of the time. In the

case of two particular airlines, failure to disclose was the norm. The

Department has taken enforcement action against those companies,

including the issuance of cease-and-desist orders, the assessment of

civil penalties and the issuance of warning letters. However,

enforcement action alone will not solve the overall problem.

Failure to disclose the relationship and the identity of the actual

flight operator is deceptive and can result in confusion, hardship and

inconvenience to consumers. It can also increase the costs of travel

unexpectedly. For example, the Department receives complaints from

consumers who mistakenly assumed that their carrier would use jet

aircraft, rather than propeller-driven aircraft. Consumers enrolled in

the frequent-flyer program of the airline whose code was on the ticket

have found that they got no or fewer miles when they flew on the code-

sharing partner's flights or that miles could be earned but not used on

such flights or vice versa. Consumers have reported not knowing where

to check in, a problem that can result in missed connections. Elderly

or physically challenged passengers needing particular equipment have

complained that the failure to disclose the code-sharing arrangement

and the actual operator's identity has inconvenienced them. Travelers

have only discovered at the airport that their flight was being

operated by an airline they preferred not to use, a situation that can

occur whenever a wet-lease arrangement is involved. Finally, consumers

have complained that a service held out as on-line was in fact

interline and there was no integration between the two airlines. These

problems can also occur with certain wet leases. The Department

believes that consumers can make travel decisions to avoid such

problems if carriers and ticket agents notify them adequately.

Proposed Changes

First, the Department has tentatively concluded that no basis

exists for differentiating among U.S. air carriers, ticket agents doing

business in the United States, and foreign air carriers in the

requirement to give full disclosure. Thus, we propose to expand the

rule to cover the latter two classes explicitly. Ticket agents

(including travel agents) sell about 80% of all airline tickets issued

in the United States. Secretary's Task Force on Competition in the U.S.

Domestic Airline Industry, Airline Marketing Practices: Travel

Agencies, Frequent Flyer Programs, and Computer Reservations Systems at

7 (1990). A requirement that applies to only 20% of ticket sales

affords the public too little protection. We therefore propose to

require ticket agents doing business in the United States and foreign

air carriers, when giving information about air transportation

involving code-sharing arrangements, to disclose these arrangements and

the identity of the transporting carrier, just as U.S. airlines are

currently required to do. This should not be a burden to ticket agents

since, to avoid misrepresentations, they are already required to tell

consumers when asked that the carrier holding out the service is not

the same as the one operating the flight. Ticket agents should also be

able to identify code-shared flights easily, since computer

reservations systems already identify them and airlines can update

those systems to reflect changes very quickly. As noted above,

extending the notice requirement to foreign air carriers merely

conforms our rules to agency practice when we approve code-share

applications. In this way, we hope to assure that all U.S. consumers

have a complete understanding of the transportation they are buying at

the time when they make a travel purchase decision.

Some domestic code-sharing arrangements consist of several commuter

carriers that operate under a ``network'' name, e.g., Northwest

Airlink, Delta Connection. In disclosing the transporting carrier for

purposes of this rule, it is permissible to use such a network name if

that is the name in which the service is generally held out to the

public. Since the purpose of this rule is to prevent confusion, we do

not wish to require disclosure of a corporate name that is not the name

used by the carrier to identify itself in airports or in advertisements

and will thus mean nothing to consumers. However, we remind airlines

and ticket agents that the proposed rule requires disclosure not only

of the name of the transporting carrier or network, but also of the

fact that this entity is not the one shown on the ticket. Since many

network names may connote a special type of service rather than a

different carrier, the transporting airline should be identified with a

statement such as ``our affiliate, Northwest Airlink'' or ``our partner

in travel, Delta Connection.''

Second, we also propose to require U.S. and foreign air carriers

and ticket agents (including travel agents) to provide written notice

of the transporting carrier's identity in conjunction with the sale of

any air transportation sold in the United States that involves a code-

sharing arrangement or long-term wet lease. The proposed rule would

therefore require that, if a separate itinerary is issued with the

ticket, the itinerary contain a legend that states ``Operated by''

followed by the name of the transporting carrier in conjunction with

the listing of any flight segment on which the designator code is not

that of the transporting carrier. In the case of single-flight number

service where a segment will be operated by a carrier other than the

carrier in whose name the transportation was sold, the rule would

require the carrier identity for that segment to be disclosed, e.g.,

``Service between XYZ City and ABC City will be operated by Jane Doe

Airlines.''

If no itinerary is issued, the proposal would require the selling

carrier or ticket agent to provide a separate written notice that

clearly identifies the transporting carrier for any flight segment on

which the designator code is not that of the transporting carrier. The

following notice would satisfy this requirement:

``IMPORTANT NOTICE: Service between XYZ City and ABC City will

be operated by Jane Doe Airlines.''

Many ticket agents and airlines already provide written information

that specifies the carrier that will operate the service on behalf of

the airline shown on the ticket. Thus, addition of this notice should

not be unduly burdensome.

The Department intends that this written notice be given to any

consumer buying, in the United States, air transportation involving any

arrangement whereby one carrier uses the code of another except for

short-term wet leases, as discussed below. The separate written notice

requirement would apply whether or not the consumer is given an actual

ticket to evidence the transportation, and it must be given or sent

when he or she buys the transportation. Further, the Department

tentatively concludes that it would not be acceptable to make this

written notice a standard part of tickets given to every consumer,

because consumers would not be able to tell from a universal notice

whether their particular flight was a code-shared operation.

However, the Department remains concerned that the appearance of

one carrier's designator code on the face of the ticket, or flight

coupon, when the service is in fact being provided by a different

carrier may mislead some passengers. In particular, we are concerned

that some passengers may rely on their flight coupons for information,

notwithstanding the presence of an itinerary. We are seriously

considering a requirement that, where the designator code on the ticket

is not that of the transporting carrier on any flight segment, there

must be printed on the flight coupon covering that segment (1) the

asterisk that already identifies flights listed in the CRS under an

airline code different from that of the transporting carrier; and (2) a

legend elsewhere on the coupon that states the transporting carrier's

identity preceded by the words ``operated by.'' This information is

already available in the CRSs, and the Department invites specific

technical comments on the feasibility and costs of implementation or on

alternative ways of providing the information on the ticket. Comments

should be supported by concrete data and economic analysis and should

contain sufficient detail to allow the Department to evaluate the

position advocated. If the Department were to adopt such a requirement,

it would be in addition to the separate written notice requirement.

The above oral and written notification requirements would apply to

most situations in which the operating airline is different from the

one in whose name the service is being held out, including code-sharing

arrangements and long-term wet leases. The Department believes that, as

a general rule, consumers are entitled to know both the identity of the

company that will be transporting them and the one holding out the

transportation.

However, the Department recognizes that periodically situations

arisewhere full disclosure is impractical or would be extremely

disruptive. For example, advance notification is impossible where an

aircraft is rendered unusable and temporary substitute transportation

is arranged at the last minute. For this reason, the Department

proposes to apply the rule only to long-term wet leases. The proposed

rule would use the same definition of long-term wet lease that appears

in other parts of the Department's regulations, i.e., a lease of

aircraft and crew that either lasts more than 60 days or is part of a

series of such leases that amounts to a continuing arrangement lasting

more than 60 days. The Department would nonetheless expect that, in the

interest of maintaining good customer relations, an airline or ticket

agent would make every effort to notify consumers of changes in the

operator of a flight that take place after they have purchased their

transportation.

Finally, the Department proposes to clarify the current obligation

of code-sharing partners to include clear notice about the code-sharing

arrangement in public advertisements. As written, the current policy

statement merely directs the partners to advertise the fact of the

arrangement and the identity of the actual operator periodically. To

comply, carriers have routinely included general and often

uninformative language in advertisements, whether or not they are

advertising code-shared services. We tentatively conclude that this

does not suffice. We consider that it would be more useful to the

public if the partners were required to include both the nature of the

operational arrangement and the identity of the transporting carrier

only when they are advertising services in a city-pair market where the

service is provided under a code-sharing arrangement or by long-term

wet lease.

Because the Department believes that the rule conforms in many ways

to prevailing practice, it believes that airlines and ticket agents can

implement the proposed changes at little, if any, cost. We invite

specific cost data to help us evaluate the cost to the industry of

complying with the proposed requirements if any commenter believes the

cost to be burdensome. In particular, the Department is interested in

comments regarding its proposal to cover all types of long-term wet

leases. Opponents of this aspect of the proposal should support their

comments with economic or other data that would assist the Department

in distinguishing among types of wet lease for the purpose of

protecting consumers from unfair and deceptive practices.

As discussed above, the Department also requests that commenters

address its concern that, despite the separate written notice that is

being proposed, the current approach to printing flight coupons may

mislead the consumer.

The Department recognizes that the airlines and ticket agents will

require time to implement the proposed separate written notice

requirement. The Department is proposing that the final rule be

effective 60 days after publication, but it requests comments on other

possible effective dates. In addition, we invite information about the

time necessary to implement inclusion of the transporting carrier's

identity on flight coupons if we should adopt a rule requiring this.

The Department also proposes to remove 14 CFR 399.88 of the Policy

Statements, since the proposed rule would replace it.

Regulatory Analyses and Notices

The Department has determined that this action is not a significant

regulatory action under Executive Order 12866 or under the Department's

Regulatory Policies and Procedures. The Department has placed a

regulatory evaluation that examines the estimated costs and impacts of

the proposal in the docket.

The Department certifies that this rule, if adopted, would not have

a significant economic impact on a substantial number of small

entities. Although many ticket agents and some air carriers are small

entities, the Department believes that the costs of notification will

be minimal. The Department seeks comment on whether there are small

entity impacts that should be considered. If comments provide

information that there are significant small entity impacts, the

Department will prepare a regulatory flexibility analysis at the final

rule stage.

The Department does not believe that there would be sufficient

federalism implications to warrant the preparation of a federalism

assessment.

Paperwork Reduction Act

The proposed rule does not contain information collection

requirements that require approval by the Office of Management and

Budget under the Paperwork Reduction Act (44 U.S.C. 2507 et seq.).

List of Subjects

14 CFR Part 257

Air carriers, Foreign air carriers, and Consumer protection.

14 CFR Part 399

Administrative practice and procedure, Air carriers, Air rates and

fares, Air taxis, Consumer protection, and Small business.

For the reasons set forth in the preamble, the Department of

Transportation denies the petition for rulemaking in Docket 48710 and

proposes to add part 257 and to amend part 399 as follows:

1. Part 257 is added to read as follows:

PART 257--DISCLOSURE OF CODE-SHARING ARRANGEMENTS AND LONG-TERM WET

LEASES

Sec.

257.1 Purpose.

257.2 Applicability.

257.3 Definitions.

257.4 Unfair and Deceptive Practice.

257.5 Notice Requirement.

Authority: Sections 204 and 411, Pub. L. 85-726, as amended, 72

Stat. 743 and 769; 49 U.S.C. Secs. 40113(a) and 41712.

Sec. 257.1 Purpose.

The purpose of this part is to ensure that ticket agents doing

business in the United States, air carriers, and foreign air carriers

tell consumers clearly when the air transportation they are buying or

considering buying involves a code-sharing arrangement or a long-term

wet lease, and that they disclose to consumers the transporting

carrier's identity.

Sec. 257.2 Applicability.

This rule applies to:

(a) Direct air carriers and foreign air carriers that participate

in code-sharing arrangements or long-term wet leases involving

scheduled passenger air transportation; and

(b) Ticket agents doing business in the United States that sell

scheduled passenger air transportation services involving code-sharing

arrangements or long-term wet leases.

Sec. 257.3 Definitions

As used in this part:

(a) Carrier means any air carrier or foreign air carrier as defined

in 49 U.S.C. Sec. 40102(2) or 49 U.S.C. Sec. 40102(21), respectively,

that is engaged directly in scheduled passenger air transportation,

including by wet lease.

(b) Code-sharing arrangement means an arrangement whereby a

carrier's designator code is placed on a flight operated by another

carrier.

(c) Designator code means the airline designations originally

allotted and administered pursuant to Agreements CAB 24606 and 26056.

(d) Ticket agent has the meaning ascribed to it in 49 U.S.C.

Sec. 40102(40).

(e) Transporting carrier means the carrier that is operating the

aircraft in a code-sharing arrangement or long-term wet lease.

(f) Long-term wet lease means a lease by which the lessor provides

both an aircraft and crew, which either (a) lasts more than 60 days, or

(b) is part of a series of such leases that amounts to a continuing

arrangement lasting more than 60 days.

Sec. 257.4 Unfair and deceptive practice.

The holding out and sale of scheduled passenger air transportation

involving a code-sharing arrangement or long-term wet lease is

prohibited as unfair and deceptive in violation of 49 U.S.C. Sec. 41712

unless, in conjunction with such holding out or sale, carriers and

ticket agents follow the requirements of this part.

Sec. 257.5 Notice requirement.

(a) Notice in schedules. In written or electronic schedule

information provided by carriers to the public, the Official Airline

Guide and comparable publications, and, where applicable, computer

reservations systems, carriers involved in code-sharing arrangements or

long-term wet leases shall ensure that an asterisk or other easily

recognizable mark identifies each flight in scheduled passenger air

transportation on which the designator code is not that of the

transporting carrier.

(b) Oral notice to prospective consumers. In any direct oral

communication with a prospective consumer concerning a flight that is

part of a code-sharing arrangement or long-term wet lease, a ticket

agent doing business in the United States or a carrier shall tell the

consumer, before booking transportation, that the transporting carrier

is not the carrier whose designator code will appear on the ticket and

shall identify the transporting carrier.

(c) Written notice. At the time of sale, each selling carrier or

ticket agent shall provide each consumer of scheduled passenger air

transportation sold in the United States that involves a code-sharing

arrangement or long-term wet lease with the following notice:

(1) If an itinerary is issued, there shall appear in conjunction

with the listing of any flight segment on which the designator code is

not that of the transporting carrier a legend that states ``Operated

by'' followed by the name of the transporting carrier. In the case of

single-flight number service involving a segment or segments on which

the designator code is not that of the transporting carrier, the notice

shall clearly identify the segment or segments and the transporting

carrier. The following form of statement will satisfy the requirement

of the preceding sentence:

IMPORTANT NOTICE: Service between XYZ City and ABC City will be

operated by Jane Doe Airlines; or

(2) If no itinerary is issued, the selling carrier or ticket agent

shall provide a separate written notice that identifies clearly the

transporting carrier for any flight segment on which the designator

code is not that of the transporting carrier. The following form of

notice will satisfy the requirement of this subparagraph:

IMPORTANT NOTICE: Service between XYZ City and ABC City will be

operated by Jane Doe Airlines.

(d) Advertising. In any advertisement for service in a city-pair

market that is provided under a code-sharing arrangement or by long-

term wet lease, the advertising carrier or ticket agent shall clearly

indicate the nature of the service and shall identify the transporting

carrier[s].

2. The authority citation for part 399 is revised to read as

follows:

Authority: 49 U.S.C. 40101, 40102, 40105, 40109, 40113, 40114,

40115, 41010, 41011, 41012, 41101, 41102, 41104, 41105, 41106,

41107, 41108, 41109, 41110, 41111, 41112, 41301, 41302, 41303,

41304, 31305, 41306, 41307, 41308, 41309, 41310, 41501, 41503,

41504, 41506, 41507, 41508, 41509, 41510, 41511, 41701, 41702,

41705, 41706, 41707, 41708, 41709, 41711, 41713, 41712, 41901,

41902, 41903, 41904, 41905, 41906, 41907, 41908, 41909, 42111,

42112, 44909, 46101, and 46102, unless otherwise noted.

Sec. 399.88 [Removed]

3. Section 399.88 is removed.

Issued under authority delegated in 49 C.F.R. Sec. 1.56a(h)(2)

in Washington, D.C. on August 4, 1994.

Patrick V. Murphy,

Acting Assistant Secretary for Aviation and International Affairs.

[FR Doc. 94-19441 Filed 8-5-94; 1:40 pm]

BILLING CODE 4910-62-P