Special Event Tours

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR, Parts 380, 381, 399

[Docket No. 49385; Notice 94-16]

RIN 2105-AC03

Special Event Tours

AGENCY: Office of the Secretary, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department seeks comment on a proposal to expand its rules

on Super Bowl tours to cover air tours to other types of special

events. These Super Bowl rules require that operators of Super Bowl

tours that are promoted as including game tickets must have those game

tickets in hand or under contract before they advertise or sell the

tours, and that they must refund the entire tour price to any customer

who does not receive a promised game ticket. This proposed rule would

also extend the charter rule's prohibition on last-minute price

increases to non-charter tours to special events. This initiative

arises as a result of problems on certain tours to the 1994 Rose Bowl

on which participants did not receive game tickets that were promoted

as being included in the package, or were required to make additional

payments in order to receive tickets.

DATES: Comments should be received by November 14, 1994. Late-filed

comments will be considered to the extent practicable.

ADDRESSES: Comments should be sent to Docket Clerk/C-55, Docket No.

49385, Room 4107, Department of Transportation, 400 Seventh Street SW.,

Washington, DC 20590. For the convenience of persons who will be

reviewing the docket, it is requested that commenters provide an

original and three copies of their comments. Comments will be available

for inspection at this address Monday through Friday from 9 a.m.

through 5 p.m. Commenters who wish the receipt of their comments to be

acknowledged should include a stamped, self-addressed postcard with

their comments. The docket clerk will date-stamp the postcard and mail

it to the commenter.

FOR FURTHER INFORMATION CONTACT: Tim Kelly, Consumer Affairs Division/

I-25, Office of the Secretary, Room 10405, Department of

Transportation, 400 Seventh Street SW., Washington, DC 20590. Telephone

(202) 366-5952.

SUPPLEMENTARY INFORMATION: In conjunction with the Rose Bowl football

game that was played in Pasadena, California on January 1, 1994, a

large number of fans of the University of Wisconsin (one of the two

teams participating in the game) purchased package tours to California.

Many of those tours were promoted as including a ticket to the Rose

Bowl game. However, a significant number of these individuals either

did not receive the game tickets that they had been promised and did

not gain admission to the game, or were required to make an additional

payment after they arrived in Pasadena in order to obtain their

tickets. The Department is seeking comment on a proposal to extend its

rules on Super Bowl tours to include air tours to other types of

special events where admission to the event is advertised as being

included in the package.

The Department's rules on Super Bowl charters are contained in

title 14, part 380 of the Code of Federal Regulations (14 CFR part

380):

Section 380.2 defines a Super Bowl charter as a charter

flight that is represented by its charter operator as including tickets

to the National Football League's Super Bowl game as part of its ground

package.

Section 380.18a states that a Super Bowl charter may not

be advertised unless the operator has submitted verification to the

Department\1\ that the operator (1) is in physical possession of enough

Super Bowl game tickets to provide them for a substantial number of

seats on the charter, or (2) has a contract with the NFL or with an NFL

team for such a number of game tickets, or (3) has a contract with

another person who has a contract with the NFL or an NFL team for such

a number of game tickets.

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\1\References to ``the Board'' in Part 380 refers to the Civil

Aeronautics Board, the Department's predecessor in aviation economic

and consumer matters. The Department of Transportation now

administers this rule as authorized by the Civil Aeronautics Board

Sunset Act of 1984 (P.L. 98-443; 98 Stat. 1703).

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Section 380.18a also states that a Super Bowl charter may

not be sold unless the operator has submitted verification to the

Department that the operator has possession of, or contracts for,

enough game tickets to provide one to every person who is to receive

one under the terms of the operator/participant contract for the

charter.

Section 380.31(c) states that if an operator receives a

booking for which he or she does not have possession of or a contract

for a game ticket, the operator must return that participant's money

within 3 days, unless the participant has authorized the operator in

writing to retain the payment while the operator seeks additional

tickets.

Sections 380.32(s), 380.33(a)(5) and 380.33(e) state that

if Super Bowl game tickets are not supplied when promised, the affected

participant must be sent a refund of the price of the entire charter

package within 14 days after the return flight.

These rules came about following problems with game tickets for

Super Bowl tours in the late 1970's (see 45 FR 1856, January 9, 1980).

The rules were limited to the Super Bowl because that was the only

event where such problems had surfaced.

In addition to the Super Bowl rules in Part 380, the Department has

a policy statement at 14 CFR 399.87 which states that it shall be an

unfair or deceptive practice within the meaning of section 411 of the

Federal Aviation Act (now 49 U.S.C. 41712) to advertise or sell an air

tour that is promoted as including a ticket to the Super Bowl game

unless the operator has tickets or contracts for tickets in the manner

described in 14 CFR 380.18a (see above). The principal purpose of this

policy statement is to reach tours operated on scheduled air service,

which are not covered by the part 380 charter rules. The part 399

policy statement mirrors Sec. 380.18a, but does not include the other

part 380 provisions described above. Most importantly, it does not

include the requirement that the entire tour price be refunded if a

game ticket is not provided.

On January 27, 1994, the Department issued an Advance Notice of

Proposed Rulemaking in this proceeding (published February 1, 1994; 59

FR 4614). In this notice, we stated that we were tentatively proposing

to issue a new rule that would contain the procedures of the Super Bowl

provisions of both part 380and part 399, and to extend this rule to

other types of events. Like current Sec. 399.87, the new rule would

apply to tours on all forms of air transportation, not just charters.

Like the existing Super Bowl charter rules in part 380, the new

regulation would require the tour operator to refund the entire tour

price to any participant who does not receive a promised event ticket,

even if the tour were not on a charter. The proposed rule would also

pick up the procedures of Sec. 380.31(c) of the charter rule, which

requires an operator to refund any money received for a booking within

3 days if the operator has no contract for an event ticket for that

person, unless the person has authorized the operator in writing to

retain the payment while the operator seeks a ticket.

In addition to setting out the Department's tentative rulemaking

proposal, the January ANPRM asked commenters to address a number of

questions about the types of issues that such a rule should apply to.

The discussion of the comments that appears below is organized

according to those questions.

Comments

The Department received comments from 11 organizations and 7

individuals. The great majority of the comments favored adoption of a

rule in this area.

Q. Should the rule apply only to major sports events which would be

listed in the rule (for example, the Super Bowl, college bowl games,

the NCAA Final Four, the World Cup finals, the Olympics)? To any sports

event? To religious events (for instance, the Passion Play in

Oberammergau)? To any event?

Several of the comments discussed only sports events as the context

for the rule. The National Collegiate Athletic Association (NCAA)

recommended applying the rule to the Division I Final Four men's and

women's basketball championships, the College World Series, and post-

season college football bowl games. The Football Bowl Association

(FBA), an organization representing all 19 post-season college football

bowl games, also felt that all post-season football bowl games should

be covered, and stated that it offered no comment on whether other

events should or should not be covered. The National Hockey League

(NHL) commented that the rule should apply to all major professional

and amateur sports events. Ms. Sara Shea said that the Super Bowl rule

should be expanded to include other special sporting events.

The Wisconsin Attorney General stated that the rule should not be

limited to specifically named events, but perhaps could be limited to

``competitive events'' where participants and locations are determined

close to the date of the event. He said that for non-competitive events

such as the Passion Play in Oberammergau, the dates, locations and

participants are known well in advance and existing consumer

protections should be adequate.

Other commenters stated that the rule should not be limited to

sports events. The American Society of Travel Agents (ASTA) said that

it should apply to all events where a separately-purchased ticket is

necessary for admission to the event. The RG Travel Companies, which

were involved in sending 1,700 Wisconsin fans to the 1994 Rose Bowl,

stated that the rule should cover any special event ``where a good

possibility exists that the demand for tickets will exceed the supply *

* *'' In a similar vein, the Pasadena Tournament of Roses commented

that the rule should apply to any event with limited admission. The

National Tour Association (NTA, representing motor coach tour

operators) and Congressman Robert Andrews of New Jersey expressed the

opinion that the rule should not be limited to sports events. Ms.

Arlene Caldwell said that the rule should cover any tour that claims to

include a ticket to the event, and Mr. Donald Hamilton stated that it

should apply to any event for which tour packages are sold.

Q. Should the rule apply to both charter and scheduled

transportation?

All of the commenters that expressed an opinion on this point felt

that the rule should apply to both scheduled and charter air

transportation. Those commenters were the RG Travel Companies, NACA,

the NHL, ASTA, the NCAA, FBA, the Pasadena Tournament of Roses, and the

Wisconsin Attorney General.

Q. Should the rule contain only the advertising and sale

restrictions of Secs. 380.18a and 399.87 (of the current Super Bowl

rule), or should it also contain the ``money back guarantee'' of

Secs. 380.32 and 380.33 and/or the ``booking rejection'' and

``contingent booking'' procedures of Sec. 380.31(c)?

Sections 380.18a and 399.87 prohibit advertising or sale of a

``Super Bowl tour'' (defined as one which is held out as including a

ticket to the Super Bowl game) until the operator has physical

possession of game tickets or has a contract with the National Football

League, with an NFL team, or with another person who has a contract

with the league or a team. Sections 380.32 and 380.33 state that any

participant on a Super Bowl tour who does not receive promised game

tickets must be given a refund of the entire tour price, even if a

portion of the services are used. Section 380.31(c) provides that if an

operator receives a booking for which he or she does not have

possession of or a contract for a game ticket, the operator must return

that participant's money within 3 days, unless the participant has

authorized the operator in writing to retain the payment while the

operator seeks additional tickets.

Except for NTA, all commenters that expressed a position on this

question felt that some form of regulation along these lines was

appropriate. NTA stated that the majority of its members that responded

to a poll on this matter felt that regulation of special-event tours

should not be a responsibility of the government, but the association

said that in the event a rule is adopted it favors the ``booking

rejection'' and''contingent booking'' procedures of Sec. 380.31(c).

ASTA and the Wisconsin Attorney General also expressed support for

the ``booking rejection'' and ``contingent booking'' procedures. They

favored the ``money back guarantee'' as well, as did the RG Travel

Companies, the National Air Carrier Association (NACA, an organization

of charter airlines), the NHL, NCAA, FBA, and Pasadena Tournament of

Roses. The Tournament of Roses stated that this guarantee should apply

``at any time prior to departure'' if it is clear tickets will not be

forthcoming. FBA commented ``the greater the remedy available, the less

likely that tour packagers will create the problem by promoting

packages that may not be legitimate.''

NACA said that there should be an exception to the ``money back

guarantee'' for situations of force majeure and acts of God, such as

the earthquake in San Francisco that forced postponement of the World

Series. Similarly, the NHL stated that if the event is canceled or

substantially altered after the tour begins, consumers should be

entitled only to a refund of the face value of the event ticket, but

that if such cancellation or alteration takes place before departure,

the operator should be required to inform the consumers, who would have

the right to cancel (presumably with a full refund).

Congressman Andrews was also in favor of the ``money back

guarantee,'' as well as a requirement for tour operators to disclose

whether event tickets are guaranteed or tentative. However, he stated

that any rule that would totally prohibit marketing of a special-event

tour until the tour operator has event tickets in hand would not be

practical. Tickets for many such events are not available until less

than two weeks before the event, he pointed out, but other arrangements

(e.g., air and hotel) must be made before that. NTA, the NCAA and the

Wisconsin Attorney General stated that the current restrictions against

marketing Super Bowl tours until the operator has game tickets in hand

or under contract should be included in the new rule.

Q. If the scope of the type of event covered by the rule is broad,

and the rule contains the ``money back guarantee,'' should procedures

be included that would protect the operator from having to refund the

entire tour price if a participant doesn't receive promised admission

to something like a welcoming cocktail party?

No commenters spoke in favor of a requirement to apply the ``money

back guarantee'' to events such as a welcoming cocktail party. Of those

who commented on the issue, NTA, the NHL, ASTA, the Pasadena Tournament

of Roses said that operators should not be required to refund the

entire tour price over failure to provide something like a promised

welcoming cocktail party. NACA and the Wisconsin Attorney General

stated that the rule should require the value of undelivered ancillary

events to be refunded, but should not require a refund of the entire

tour price. FBA and the Wisconsin Attorney General both pointed out

that certain events on a special event tour (e.g., the Tournament of

Roses parade on a Rose Bowl tour) are integral to the experience for

which the tour was organized while other events on the same tour (e.g.,

a side trip to Disneyland) are not. These two commenters suggest that

integral events be protected by the'' money back guarantee'' of the

total tour price, but not other events.

Q. Should the rule specifically ban last-minute or post-departure

price increases for admission to the event, one of the problems that

allegedly occurred on the 1994 Rose Bowl tours?

All commenters who offered an opinion on this subject felt that

last-minute price increases should be regulated in some manner. The RG

Travel Companies, NACA, the NCAA, ASTA, the Wisconsin Attorney General

and Mr. Donald Hamilton stated that last-minute price increases should

be banned. FBA and the Pasadena Tournament of Roses said that price

increases at any time following purchase should be prohibited unless

the consumer receives written notice that the operator reserves this

right. The Pasadena Tournament of Roses also suggested that

participants who cancel within a few days of notification of a price

increase be entitled to a full refund. The Wisconsin Attorney General

commented that on tours to special events, ``last-minute or post-

departure price increases are common and are tantamount to extortion''

because other options may be sold out.

The NHL stated that, in general, price increases should be banned

unless the face value of the ticket has been increased subsequent to

departure of the tour. However, for events with short lead times such

as the Stanley Cup playoffs, the NHL said that the rule should permit

tours on which participants are required to agree to purchase event

tickets at the yet-unknown face price plus a service fee, as long as

the consumer is given prominent notice of this fact.

Q. Some tours are promoted in conjunction with a special event, but

do not include, and do not represent that they include, admission to

the event. For example, there have been tours to the Super Bowl host

city during the Super Bowl weekend that prominently feature ``Super

Bowl'' in the headline of advertisements and flyers, but which do not

include game tickets. Should the new rule ban this practice, or require

affirmative, prominent disclosure that admission to the event is not

included?

All of the commenters that expressed an opinion on this issue felt

that it should be regulated in some manner. The RG Travel Companies

stated that they favored either banning the practice or requiring

disclosure. The NCAA urged affirmative, prominent disclosure, ``if such

tours are to be allowed at all.'' All others who commented on this

point (the NHL, ASTA, FBA, the Pasadena Tournament of Roses, and the

Wisconsin Attorney General) recommended prominent disclosure. The NHL

suggested a requirement that text disclosing the absence of event

tickets from event-oriented tours should be at least 75 percent of the

size of the name of the event in advertising material. The Pasadena

Tournament of Roses said that such disclosures should be at least twice

the size of the smallest text elsewhere in the ad or flyer, but in no

case less than 12-point type, and that disclosure during verbal

contacts should also be required.

Q. What would be the economic burdens of such a rule? Would the

rule be impractical for events where the participants are known only a

week in advance, e.g. the NCAA Final Four?

All of the parties that commented on this issue agreed that the

rule can and should apply to events in which the participants are not

known until shortly before the event. The RG Travel Companies commented

that the rule would not be impractical because commitments centering

around a particular team could be made contingent on that team

qualifying for the event. NACA said the ``money back guarantee'' should

apply regardless of the timing of the event. The NHL stated that the

rule may be burdensome for organizers of short-lead-time tours, but

that this is justified by the benefit to consumers. (Note also the

NHL's earlier suggestion that on events where the participants become

known only shortly beforehand, the rule should permit tours in which

the participants must agree to purchase an event ticket whose face

value is not yet known.)

ASTA, like NACA, said that the degree of advance notice is not

relevant, and that an operator who markets an event-oriented tour

before the participants are known should simply disclose that event

tickets are not included in the advertised price. FBA commented that

participating teams in college bowl games are generally known at least

a month in advance, and also that any experience the Department has had

with Super Bowl tours would be instructive, as the competing teams in

that game are sometimes determined only a week before the game.

The Pasadena Tournament of Roses, the NCAA and the Wisconsin

Attorney General all pointed out that even though the participating

teams in the NCAA Final Four (the example in this question) are

determined only the weekend before, the tickets are sold out months

beforehand. Thus, the fact that the participants are not known until

the final week has minimal impact on the availability of tickets and

the feasibility of tours. The Pasadena Tournament of Roses asserted

that any economic burden resulting from this rule would fall on ticket

brokers and tour operators who buy event tickets from individuals in

order to resell them. The Wisconsin Attorney General stated that

consumer protection may be even more important in cases where event

participants are determined at the last minute, because consumers have

less time to investigate their options.

Other Comments

The Air Transport Association (ATA, an association of large

scheduled airlines) filed a comment stating that it expressed no

opinion about whether, or to what extent, the current Super Bowl rules

should be made applicable to tours to other special events. However,

ATA said that DOT should not make air carriers responsible for assuring

that tour operators comply with the new rule. NACA echoed this view,

stating that carriers should not be made the guarantors of tour

operators.

Discussion

We have decided to propose a rule very similar to that described in

the ANPRM, which in turn closely tracks the existing rules for Super

Bowl tours.

The rule that we are proposing would apply to any tour that is

organized for the purpose of attending a sporting, social, religious,

educational, cultural, political or other event of a special nature and

limited duration, which exists for reasons apart from the tour itself,

and which is represented by the operator of the tour as including

admission to that event. The Department does not wish to engage in

line-drawing ofthe type that would be required were we to publish a

list of specific events that would be covered by the rule. In addition,

we see no justification for limiting the applicability of the rule to

sporting events. Few commenters specifically suggested such a

limitation, although a number of them offered sports contests as

examples of the type of event that should be covered. While the

Wisconsin Attorney General is of course correct when he comments that

the date and location of a non-competitive event such as the Passion

Play in Oberammergau is known well in advance, this in itself does not

lessen the likelihood of ticket shortages.

We agree with the comments that suggested that the rule should

apply to any event where a separate ticket is required for admission to

the event or where there is limited admission. The rule that we are

proposing will apply to any tour to an event of the type described at

the beginning of the previous paragraph in which the tour operator has

represented that the tour includes admission to the event. If the event

is free, or attendance is unlimited, the operator should have no

trouble furnishing tickets and this rule will impose no burden. On the

other hand, if tours are promoted to an unusually popular event of a

non-sporting nature, those tour participants would be just as

disappointed at not receiving the promised admission to the event that

constituted the entire purpose of their trip as would a fan traveling

to a bowl game.

We have tentatively concluded that the rule should apply to both

charter and scheduled air transportation, as well as to any other form

of air service meeting the statutory definition of ``air

transportation'' that may develop in the future. Thus, we are proposing

to apply it to ``scheduled, charter, and other air transportation.''

The proposed rule would apply to all interstate (i.e., domestic)\2\

air transportation, and to foreign (i.e., international) air

transportation originating at a point within the United States.

Applying the rule only to outbound international flights is consistent

with the approach taken in the existing Public Charter rule (see 14 CFR

380.23) and with the'' country of origin'' concept of regulation of

international air transportation. As a policy matter, the Department

has no interest in applying this rule to tours originating in foreign

countries whose participants are largely or exclusively foreign

citizens.

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\2\The statutory term ``overseas air transportation,'' which

referred to domestic transportation to or from U.S. territories or

possessions, was abolished in a recent recodification of

transportation laws. Such transportation is now included in the

definition of ``interstate air transportation,'' and consequently

would be covered by this proposed rule.

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The rule that we are proposing would apply to any operator of a

tour that meets the definition of a Special Event Tour, regardless of

whether that operator is a direct air carrier (i.e., an airline), an

indirect air carrier (e.g., a Public Charter operator), or a ticket

agent (e.g., a scheduled-service tour operator, including a travel

agent acting as a tour operator). The proposed rule would apply to both

U.S. and foreign entities that act as operators of Special Event Tours,

just as current Sec. 399.87 does.

With regard to the comments of ATA and NACA, the ANPRM did not

propose, and wedo not propose here, that this rule should include

provisions that obligate direct air carriers to assure that tour

operators comply with the rule. Except where an airline might choose to

directly operate a Special Event Tour (i.e., to become the tour

operator), a direct air carrier of a Special Event Tour will incur no

greater or lesser obligations under this rule than it has in its

capacity as a common carrier either certificated under 49 U.S.C. 41101

or holding a foreign air carrier permit issued under 49 U.S.C. 41301

(formerly sections 401 and 402 ofthe Federal Aviation Act).

As we suggested in the ANPRM, we are proposing to carry over the

provisions from the existing Super Bowl rule that prohibit advertising

or sale of such tours before game tickets are in hand or under

contract. In the rule we are proposing here, these provisions will be

expanded to apply to all special events. This approach was supported by

the comments, and involves no novel processes since the existing

procedures have been in place in the Super Bowl rule for 15 years.

In addition to the provision that prohibits advertising or sale of

a Super Bowl tour until game tickets are in hand or under contract, the

Super Bowl charter rule requires Super Bowl charter operators to

include in the prospect us that is required to be filed with the

Department for all Public Charters a certification that they have the

game tickets in hand or else a copy of the contract for the game

tickets. We do not propose to carry over this additional filing

requirement to the new rule. The underlying requirement to have the

tickets or ticket contracts before advertising or sales commence will

remain and is enforceable. The Super Bowl rules that apply to

scheduled-service tours have never required a filing of this type. Now

that regulation of this type of tour is being consolidated in a single

rule, we see no justification for having a filing requirement for

charter tours but not scheduled-service tours, nor do we see a need to

impose a new paperwork burden on scheduled-service tour operators. This

action is consistent with the Paperwork Reduction Act and with the

Department's proposal in Docket 48341 (57 FR 42864) to eliminate

unnecessary paperwork burdens on charters.

Congressman Andrews expressed concern that any rule that would

prohibit marketing of a tour until tickets are in hand would not be

practical, since tickets for many events are not available until a

couple of weeks in advance but other arrangements (e.g., air and hotel)

must be made before that. However, neither the existing nor proposed

rules requires that tickets be in hand before marketing is allowed; the

operator must simply have a written contract for the tickets.

The proposed rule also incorporates the so-called ``booking

rejection'' and ``contingent booking'' procedures currently found in

Sec. 380.31(c) of the Super Bowl charter rule, and expands them to

apply to all events and to all forms of air transportation. These

provisions require operators to return unsolicited bookings for which

they don't have event tickets unless a tour participant authorizes the

operator in writing to retain the participant's payment while the

operator attempts to obtain more event tickets. We are modifying this

slightly to allow for situations in which participants agree to take

the tour without an event ticket; the operator would be required to

obtain the participant's written acknowledgment of this understanding.

One of the key provisions of the Super Bowl charter rule is the

requirement for the operator to refund the total tour price to any

participant who does not receive a promised game ticket, even if the

participant uses all of the other tour features. The ANPRM tentatively

proposed to incorporate this provision in the new rule, but also asked

for comment on whether the rule should contain only the ``booking

rejection'' and ``contingent booking'' procedures without the ``money

back guarantee.'' However, the comments solidly supported the ``money

back guarantee,'' and we have incorporated it in the proposed rule. We

agree with the Football Bowl Association that strong consumer remedies

will also have the effect of deterring the promotion of non-legitimate

tour packages.

NACA commented that there should be an exception to the ``money

back guarantee'' for situations of force majeure and acts of God, such

as the earthquake in San Francisco that caused postponement of the

World Series. The NHL suggested that if the event is canceled or

substantially altered, participants should be entitled only to a refund

of the face value of the event, not the total tour price. It was never

our intent to make the tour operator the guarantor of the event itself.

The ``money back guarantee'' in the existing Super Bowl charter rule

kicks in ``if game tickets are not supplied.'' The rule we are

proposing here would require refunds ``. . . if promised admission to

the [event] is not furnished by the tour operator . . .'' These

provisions are directed toward potential problems with ticket

distribution, not with the event itself. If people who have tickets are

able to attend the event and Special Event Tour participants are shut

out because they don't have tickets, the ``money back guarantee''

applies. On the other hand, if nobody with a ticket can use it during

the period of the tour because the event itself was canceled or

postponed, the ``money back guarantee'' does not apply.

We wish to make it clear that we are talking only about problems

with the event itself, not about any or all problems that the tour

operator might view as beyond its control. Failure of a ticket broker

to deliver tickets to the tour operator does not invalidate the ``money

back guarantee.''

We agree with the NHL that if the event is canceled consumers

should receive a refund for the portion of their tour price that

applied to the event that they paid for but did not receive. However,

mandating such a partial refund in a situation where the event itself

did not take place and where there were no problems with ticket

distribution is beyond the scope of this proceeding. This is a matter

best dealt with in the context of contract law or other applicable

existing law.

The ANPRM solicited comment on whether the rule should include

procedures to protect the tour operator from having to refund the total

tour price to participants who don't receive promised admission to an

``event'' like a welcoming cocktail party. Most commenters who

addressed this issue were opposed to requiring a refund of the entire

tour price in these circumstances. Some suggested that participants so

affected simply be entitled to a refund of the value of that ancillary

event. Two commenters urged that a tour operator's failure to deliver

admission to ancillary events that are integral to the experience for

which the tour was organized (e.g., the Tournament of Roses parade on a

Rose Bowl tour) should entitle the participant to a refund of the total

tour price.

In raising this issue in the ANPRM, the Department had intended to

focus on the situation of a tour that would not normally be thought of

as a Special Event Tour but which held out admission to an ``event'' as

one of its features, e.g., a welcoming cocktail party on a 5-day

package to the Bahamas. If the definition of ``special event'' had been

broad, we were concerned that the rule might have the effect of

requiring refunds of the entire price on such tours after failure to

deliver a relatively minor and low-value component. The comments have

shed light on another issue: multiple ``events'' on a true Special

Event Tour.

We agree with the commenters that failure to deliver a relatively

minor feature should not result in a refund of the total tour price. We

also feel that this rule should be limited to tours that are organized

around an event, not to events that occur in the normal course of the

typical vacation tour. Accordingly, we have limited the scope of the

proposed rule in two ways. First, there will be a definition of

``Special Event Tour'' in proposed Sec. 381.5 which is broad yet

specific; it will limit the applicability of the rule to tours to

sporting, social, religious, educational, cultural, political or other

event of a special nature and limited duration, which exist for reasons

apart from the tour itself. Second, the ``money back guarantee'' in

proposed Sec. 381.11 will apply only to the primary event for which a

Special Event Tour is organized.

Limiting the ``money back guarantee'' to the primary event on the

tour will solve the problem of having this guarantee cover minor events

on a true Special Event Tour. However, it will also have the effect of

excluding some more significant events such as the Tournament of Roses

parade. Nonetheless, we have tentatively decided to move in this

direction. Identifying the primary event on a Special Event Tour will

seldom be a matter of debate. However, identifying secondary events

that are ``integral to the experience'' of the tour would be a far more

subjective exercise, and in any event is beyond the scope of this

proceeding as set forth in the ANPRM. Tour participants who do not

receive promised admission to a secondary event may have a contractual

right to a refund of the value of that event, and they can pursue that

with the tour operator.

In the ANPRM, the Department solicited comment on whether the rule

should ban last-minute or post-departure price increases, something

which occurred on certain tours to the 1994 Rose Bowl. The great

majority of the comments on this subject favored banning such

increases. Some commenters said no price increase should be permitted

unless the tour operator has reserved this right in writing and allows

participants to cancel and receive a full refund in the event of a

price increase.

We have decided to incorporate into the proposed rule the price

increase provisions of the Department's Public Charter rule (14 CFR

Sec. 380.33). While it is not our intent in this proceeding to address

all potential sources of consumer harm on Special Event Tours, the

issue of price increases is directly related to the issue of ticket

availability. Almost any event ticket is procurable if the price is

right; if we did not regulate price increases in the Special Event Tour

rule, tour operators would always be able to acquire event tickets at

greatly inflated prices and then simply increase the price to the

participant to cover it. Since a ticket has been offered in this

situation, the ``money back guarantee'' would not come into play.

The proposed provisions on price increases, modeled on similar

provisions in the charter rule, state that if a given participant is

assessed price increases for the tour that in the aggregate are more

than 10 percent above his or her original tour price, the participant

shall have the right to cancel and receive a full refund (i.e., no

cancellation penalties would apply). No price increases in any amount

would be permitted less than 5 days before departure (as opposed to 10

days in the charter rule, recognizing the fact that Special Event Tours

often have shorter lead times than the typical charter). This would

eliminate both last-minute and post-departure price hikes. Finally,

proposed Sec. 381.11 specifies that the promised event ticket must be

furnished at the price agreed to before departure or else the operator

is subject to the ``money back guarantee'' just as if he had not

provided the ticket at all.

The NHL commented that for events with short lead times such as the

Stanley Cup playoffs, the rule should permit tours on which

participants are required to agree to purchase event tickets at the

yet-unknown face price plus a service fee, as long as the consumer is

given prominent notice of this fact. As an initial matter, we would

point out that a tour would not be covered under this rule at all if

the event ticket were simply held out as an option rather than as a

mandatory feature. However, where the participant must agree to buy the

event ticket, such tours are clearly Special Event Tours since the tour

operator is representing that admission to the event is included in the

tour (even if the price of that admission is not yet known and

consequently any price that is advertised for that tour is not the full

tour price).

However, nothing in the proposed rule would explicitly prohibit a

transaction of this type. The operator would still have to have the

requisite number of event tickets under contract before advertising or

sales could begin; in other words, the variable must be price, not

availability. Beyond that, the proposed rule requires that tour

participants must receive promised event tickets ``at the tour price

agreed to before departure'' or else the participant is entitled to a

refund of the total tour price. If a participant agrees to a price

consisting of a known value p plus an unknown value x, and the operator

delivers the tour (including the event ticket) at that price, the

operator has satisfied the requirements of the rule.

The ANPRM noted that some tours are promoted in conjunction with a

special event, but do not include, and do not represent that they

include, admission to the event. We solicited comment on whether the

new rule should ban this practice, or whether it should specify a form

of required disclosure. Most of the comments favored requiring

disclosure of the fact that an event ticket is not included. However,

we have tentatively decided not to include such a requirement in the

proposed rule. Consumers solicited for these tours are able to

determine from the advertising material that an event ticket is not

held out as included; this is distinguishable from the situation of a

tour participant who paid for an event ticket and then did not receive

it. Should any particular tour deceptively imply that event tickets are

included when in reality they are not, the Department has authority to

take enforcement action against deceptive practices.

The ANPRM sought comment on whether the rule would be impractical

for events where the participants are known only a week in advance,

such as the NCAA Final Four. All of the parties that commented on this

issue thought that this should not be a problem, and that the rule

should apply. As noted in the Comments section above, several

commenters pointed out that the Final Four sells out months in advance

even though the participating teams are not determined until the week

before. Also, as FBA noted, the contestants in the Super Bowl have been

determined only the week before on several occasions, and that does not

appear to have either harmed the marketability of Super Bowl tours or

resulted in additional consumer problems.

While the period for comment on a Notice of Proposed Rulemaking is

normally 60 days, the Department is requesting comment on this notice

within 30 days after it has been published in the Federal Register. The

rule proposed in this notice has changed little from the tentative

proposal that the Department discussed in detail in the Advance Notice

of Proposed Rulemaking in this proceeding (59 FR 4614, February 1,

1994). The Comments on the ANPRM were largely supportive of the

proposal, and we do not anticipate controversy over this NPRM. The

proposed rules are drawn from existing regulations on charters and

Super Bowl tours, and the industry is familiar with the procedures in

those rules. If the volume or nature of the NPRM comments should

warrant, the Department can extend the comment period.

Regulatory Analyses and Notices

This NPRM is considered to be a non-significant rulemaking under

DOT regulatory policies and procedures, 44 FR 11034. The proposal would

have minimal economic impact, and accordingly no regulatory evaluation

has been prepared. The NPRM was not subject to review by the Office of

Information and Regulatory Affairs pursuant to Executive Order 12866.

The NPRM has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that it does not have sufficient federalism implications to warrant the

preparation of a Federalism Assessment.

I certify that the proposal, if adopted, would not have a

significant economic impact on a substantial number of small entities.

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

the following:

1. To amend title 14, chapter II, subchapter D by adding a new part

381, to read as follows:

PART 381--SPECIAL EVENT TOURS

Sec.

381.1 Purpose.

381.3 Applicability.

381.5 Definition.

381.7 Advertising.

381.9 Sales.

381.11 Refunds.

381.13 Price increases.

Authority: 49 U.S.C. 40113(a) and 41712 (formerly sections

204(a) and 411 of the Federal Aviation Act of 1958, as amended).

Sec. 381.1 Purpose.

The purpose of this part is ensure that air travelers who have

purchased tours to special events will receive the promised admission

to the event. This rule expands the ``Super Bowl rule'' (formerly

contained in part 380 and Secs. 399.87 of this subchapter) to other

events.

Sec. 381.3 Applicability.

This rule applies to Special Event Tours that are (a) in interstate

or overseas air transportation, or (b) in foreign air transportation

originating at a point in the United States. It applies to U.S. and

foreign operators of Special Event Tours, whether they be air carriers

or ticket agents. It applies to scheduled, charter, and other air

transportation.

Sec. 381.5 Definition.

Special Event Tour means a tour that is organized for the purpose

of attending a sporting, social, religious, educational, cultural,

political or other event of a special nature and limited duration,

which exists for reasons apart from the tour itself, and which is

represented by the operator of the tour as including admission to that

event. Examples of such events include, but are not limited to, college

and professional sporting events, the Olympics, concerts, the Passion

Play in Oberammergau, etc.

Sec. 381.7 Advertising.

No operator of a Special Event Tour or agent of such an operator

shall conduct, or cause or allow to be conducted, any advertising,

solicitation or other promotion for a Special Event Tour unless:

(a) The operator is in physical possession of enough tickets for

admission to the event to provide such tickets for a substantial number

of seats on the tour, or

(b) The operator has entered into a written contract with an

organization that is the distributor of such tickets or an organization

that receives such tickets directly from the distributor (e.g., a bowl

committee; football conference, league or team; concert promoter or

arena; etc.), the terms of which provide for that organization to

furnish the operator enough admission tickets to provide such tickets

for a substantial number of seats on the tour, or

(c) The operator has entered into a written contract with another

person or organization that has a written contract or series of written

contracts with the distributor of such tickets or with an organization

that receives such tickets directly from the distributor, the terms of

which provide for that organization to furnish the operator enough

admission tickets to provide such tickets for a substantial number of

seats on the tour.

Sec. 381.9 Sales.

(a) Except as provided in Sec. 381.9(b):

(1) No operator of a Special Event Tour shall accept money for a

seat on a Special Event Tour, or authorize an agent to accept such

money, unless the operator has physical possession of, or written

contracts (in the manner described in Sec. 381.7) for, a ticket for

admission to the event for that individual. To the extent that the

operator receives an unsolicited booking for which the operator does

not have physical possession of or written contracts for a ticket for

admission to the event, any payment accompanying that booking must be

returned within 3 business days.

(2) Upon acceptance of the money for a sale, the operator must

reserve one event ticket for that individual. An operator may not sell

more seats on the tour than it has event tickets in hand or under

contract. (An operator need not continue to reserve an event ticket for

an individual who withdraws from the tour by providing notice to the

operator or by being notified by the operator that the individuals

participation has been canceled due to failure to remit a required

installment payment.)

(b) An operator of a Special Event Tour may accept a booking and

payment from an individual for whom the operator does not have an event

ticket in hand or under contract if that individual agrees in writing

that he or she understands that no event ticket has been reserved for

him or her. This agreement shall specify whether the person has agreed

to participate in the tour without an event ticket and/or the operator

has agreed to attempt to acquire an event ticket for this person. If

the two parties agree that the operator will attempt to acquire an

event ticket, the agreement shall specify any penalties that will apply

if the individual later cancels because an event ticket did not become

available. If the operator notifies this person that an event ticket

has become available, that person shall enjoy all the other protections

of this rule from that time.

Sec. 381.11 Refunds.

If promised admission to the primary event for which a Special

Event Tour was organized is not furnished by the tour operator, at the

tour price agreed to before departure (including any increases that the

participant has accepted pursuant to Sec. 381.13(a)), the operator must

provide each tour participant affected in this way a refund of the

total tour price. This refund is to be provided within 14 calendar days

after the scheduled return date of the tour.

Sec. 381.13 Price increases.

(a) Should the tour operator increase a participant's tour price by

more than 10 percent (aggregate of all increases to that participant),

that participant shall have the option of canceling his or her

participation in the tour and receiving a full refund within 14 days

after the cancellation.

(b) The tour operator shall not increase the tour price to any

participant less than 5 days before departure.

2. To amend Title 14, Chapter II, Subchapter D, Part 380 as

follows:

A. Remove the term Super Bowl charter from the definitions in

Sec. 380.2.

B. Amend Sec. 380.18, ``Charters for special events,'' to add a new

paragraph (f):

* * * * *

(d) Where the charter operator represents that the charter includes

admission to the special event, the charter shall comply with part 381

of this subchapter.

C. Remove Sec. 380.18a and its reference in the table of contents

at the beginning of the part.

D. Remove Sec. 380.28(a)(4).

E. In Sec. 380.31(b), end the sentence after the phrase `` * * * on

specific alternative flights they have requested.'' Remove the

remainder of the original sentence, which begins `` * * * or, in the

case of Super Bowl charters * * *.''

F. In Sec. 380.31(c), remove the phrase ``* * * or in the case of

Super Bowl charters, if the operator does not have either possession of

or written contracts for any game tickets, * * * .''

G. In Sec. 380.31(c), remove the phrase ``* * * (3 days for Super

Bowl charters) * * * '' in the two locations where it appears.

H. In Sec. 380.31(c), remove the phrase ``* * * or in the case of

Super Bowl charters, attempts to obtain more game tickets, * * *.''

I. In Sec. 380.32(s), remove the second sentence.

J. Remove Sec. 380.33(a)(5).

3. To amend title 14, chapter II, subchapter D by removing and

reserving Sec. 399.87.

Issued this 6th day of October, 1994 at Washington, DC.

Patrick V. Murphy,

Acting Assistant Secretary for Policy and International Affairs.

[FR Doc. 94-25318 Filed 10-12-94; 8:45 am]

BILLING CODE 4910-62-U