Disclosure of Change-of-Gauge Services

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 258

[Dockets No. 47546, 49511, 49512, and 49513; Notice 95-3]

RIN 2105-AC17

Disclosure of Change-of-Gauge Services

AGENCY: Department of Transportation, Office of the Secretary (OST).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: In order to ensure that prospective airline consumers are

given pertinent information on the nature of change-of-gauge services,

i.e., services with one flight number that require a change of

aircraft, the Department of Transportation is proposing to codify and

augment its current disclosure requirements. The Department is

requesting comments on the following three proposed requirements, which

would apply to U.S. air carriers, foreign air carriers, and where

appropriate, ticket agents (including travel agents) doing business in

the United States: (1) that transporting carriers include notice of

required aircraft changes in their written and electronic schedule

information provided to the public, to the Official Airline Guide and

comparable publications, and to computer reservations systems, (2) that

consumers be given reasonable and timely notice before they book

transportation that a particular service with a single slight number

entails a change of aircraft en route, and (3) that written notice of

the aircraft change be provided at the time of sale. This proposal

constitutes the department's response to the petition of American

Airlines in Docket 47546 to ban the practice of ``funnel flights,'' a

type of change-of gauge service. The Department is also dismissing the

complaints of TACA International Airlines, Aviateca, and Nicaraguense

de Aviacion (``NICA'') in Dockets 49511, 49512, and 49513,

respectively, against Continental Airlines for operating funnel

flights.

DATES: The Department requests comments by March 20, 1995 and reply

comments by April 19, 1995. The Department will consider late-filed

comments only to the extent practicable.

ADDRESSES: Comments should be filed with the Docket Clerk, U.S.

Department of Transportation, Room 4107, Docket No. 47546, 400 Seventh

Street SW, Washington, DC 20590. To facilitate consideration of the

comments, we ask commenters to file twelve copies of each submission.

We also encourage commenters to submit electronic versions of their

comments to the Department through the Internet; our e-mail address is

[email protected].\1\ Please note, however, that at this

time the Department considers only the paper copies filed with the

Docket Clerk to be official comments. Comments will be available for

inspection at the above address from 9:00 a.m. to 5:00 p.m., Monday

through Friday. For acknowledgment of receipt of comments, include a

stamped, self-addressed postcard, which the Docket Clerk will date-

stamp and mail.

\1\Our X.400 e-mail address is as follows: G=dot/S=dockets/

OU1=qmail/O=hq/p=gov+dot/a=attmail/c=us.

FOR FURTHER INFORMATION CONTACT: Betsy L. Wolf, Senior Trial Attorney,

Office of Aviation Enforcement and Proceedings (202-366-9356), Office

of the General Counsel, U.S. Department of Transportation, 400 7th St.

SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Introduction

A change-of-gauge service is a type of scheduled passenger air

transportation for which the operating carrier uses one single flight

number even though passengers do not travel in the same aircraft from

origin to destination but must change planes at an intermediate stop.

One-flight-to-one flight change-of-gauge service differs from ordinary

connecting service in that the carrier will usually hold the second

aircraft for the arrival of the first one. Computer Reservations System

(CRS) Regulations, Final Rule, 57 FR 43780, 43804 (September 22, 1992).

``Change-of-gauge service is a long-established practice in

transportation. The term itself originate with the railroads when

passengers had to change trains due to differences in the size of

tracks. Change-of-gauge services have been used in aviation for

decades. In 1972, the Civil Aeronautics Board rejected the contention

that change-of-gauge services were an unfair or deceptive practice or

an unfair method of competition, as long as notice was given, and it

changed its rules to accommodate them. Internationally, in 1978, the

United States won an international arbitration brought when France

attempted to limit the right of a U.S. carrier to operate change-of-

gauge service. The tribunal found that the agreement between the United

States and France permitted change-of-gauge service by giving each

country wide discretion over operational aspects of flight. Change-of-

gauge services are constantly used in cargo transportation, where they

sometimes entail changes from one mode of transportation to another.

The policy of the United States has been to permit intermodal changes

of gauge as long as shippers are not mislead as to actual service.

In addition to one-flight-to-one flight change-of-gauge services,

change-of-gauge services can also involve aircraft changes between

multiple flight on one side of the change point and one single flight

on the other side. Change-of-gauge services with multiple origins or

destinations are called ``Y'' (i.e., two-for-one), ``W'' (i.e., three-

for-one), or ``starburst'' (i.e., unrestricted) changes of gauge,

depending on the shape of the route patterns. Popularly, they are also

called ``funnel flights.'' The United States has taken the lead in

persuading our bilateral aviation partners to move beyond one-for-one

change-of-gauge services to allow carriers the flexibility to operate

multiple changes of gauge. As with one-for-one change-of-gauge

services, the carrier assigns a single

[[Page 3779]]

flight number for the passenger's entire itinerary even though the

passenger changes planes, but in addition, the single flight to or from

the exchange point itself has multiple numbers: one for each segment

with which it connects and one for the local market in which it

operates. That flight is thus listed in CRSs under different numbers in

different city-pair markets. As an example, an airline might operate

three flights to London from three European cities: Flight 100 from

Frankfurt, Flight 200 from Paris, and Flight 300 from Rome. In London,

passengers from all three flights board a single aircraft bound for New

York. The London-New York flight would carry all three flight numbers

plus its own number. Schedules would show direct or through flights to

New York from Frankfurt, Paris, and Rome as well as the nonstop flight

from London.

49 U.S.C. Sec. 41712, formerly section 411 of the Federal Aviation

Act, authorizes the Department to identify and ban unfair or deceptive

practices or unfair methods of competition on the part of air carriers,

foreign air carriers, and ticket agents. Under Sec. 41712, the

Department has adopted various regulations and policies to prevent

unfair or deceptive practices or unfair methods of competition, such as

the CRS rules (14 CFR Part 255) and our policy on fare advertising (14

CFR Sec. 399.84), for example., The Department's current CRS rules,

adopted in September of 1992, require that CRS displays give notice of

any flight that involves a change of aircraft en route Id at 43835; 14

CFR 255.4(b)(2). In addition the Department requires as a matter of

policy that consumers be given notice of aircraft changes for change-

of-gauge flights. See Order 89-1-31 at 5.

Petition for Rulemaking

On May 16, 1991, American Airlines, Inc., filed a petition for

rulemaking to prohibit funnel flights, claiming that they deceive

consumers and prejudice airline competition. American maintains that

uninformed consumers are harmed when they decide to buy transportation

on funnel flights, because they mistakenly believe that they will be

traveling from origin to destination on one plane, thus avoiding the

risk that they or their baggage will miss connections. American

maintains that competing carriers suffer harm in two ways. First, they

fail to sell their own connecting services of equivalent quality to the

misinformed passengers. Second, in CRS displays for any city-pair, they

have only one listing for their connecting services, whereas a funnel

flight is listed twice, both as a direct flight with a single flight

number and as a connecting service. According to American, this double

listing not only gives undue exposure to the funnel flights but also

pushes competitive connecting services to later CRS screens where they

are less likely to be sold.

American acknowledges that CRSs in the United States attempt to

call funnel flights to the attention of their travel agent subscribers

by including the notation ``CHG'' with these flights' CRS listings.

(The adoption of 14 CFR 255.4(b)(2) supra, occurred after American

filed its petition.) Despite this precaution, however, American claims

that many consumers still buy tickets on funnel flights without

understanding that they will be making a connection and not remaining

on one plane throughout their journey. American states that confusion

may result for a number of reasons: the travel agent may fail to

explain matters adequately to the traveler; the person making the

reservation may not be the person taking the trip, and even if the

former understands the situation, he or she may fail to explain matters

adequately to the latter; or the traveler may become confused upon

receiving just one flight coupon instead of the two that one would

normally expect for a connection.

American contends that funnel flights offer no offsetting benefit

to the traveling public to justify their existence. American also

contends that no carrier will forgo the practice as long as any of its

competitors maintains it. Therefore, except in the case of ``true''

change-of-gauge flights that are specifically authorized or required by

bilateral agreements to have a single flight number, American urges

that funnel flights be prohibited. It proposes that the Department

adopt the following language as a new paragraph (c) to Sec. 399.81 of

our regulations, ``Unrealistic or deceptive scheduling'' (14 CFR

399.81):

(c) Except as otherwise expressly approved by the Department, it

is the policy of the Department to regard as an unfair or deceptive

practice, and an unfair method of competition, the use by an air

carrier, commuter air carrier, or foreign air carrier of multiple

flight numbers for a single aircraft operating on any given day in a

single city-pair for interstate, overseas, or foreign air

transportation.

American proposes that this rule take effect 90 days after its

adoption in order to allow for an orderly transition.

Comments and Reply Comments

Seven air carriers (Lufthansa German Airlines, British Airways PLC,

Delta Air Line, Inc., Swissair [Swiss Air Transport Company, Ltd.], Air

France, Virgin Atlantic Airways, Ltd., and Sabena Belgian World

Airlines), one group of fourteen airlines (the Orient Airlines

Association), two other groups (the American Society of Travel Agents,

Inc. [ASTA] and the Dallas/Fort Worth Parties), one individual (Donald

L. Pevsner, Esq.), and one travel agency (Magic Carpet Travel Agency)

filed comments in response to American's petition. Three carriers

(American Trans Air, Inc., Air Canada, and American) filed reply

comments. All of these pleadings may be reviewed in the docket. In

reaching our decision to propose the rule discussed below, the

Department has considered the information provided and arguments

advanced by the commenters.

To summarize the pleadings, all commenters except Air Canada

support a prohibition of funnel flights, although some suggest

variations on American's proposed language that would more clearly

permit code-sharing and blocked space arrangements or that would ban

all change-of-gauge flights that are not required by bilateral

agreements. Some suggest addressing funnel flights through the CRS

rules rather than by amending our policy statement on unrealistic or

deceptive scheduling. Several foreign carriers take the position that

foreign carriers are particularly harmed by funnel flights and that

this practice violates the spirit if not the letter of certain

bilateral agreements. Mr. Pevsner also asks the Department to go so far

as to ban all ticketing of two or more flight segments on a single-

coupon, whether in interstate or foreign air transportation.

Funnel Flight Complaints Against Continental

On April 18, 1994, three foreign air carriers filed nearly

identical complaints in which they ask the Department to order

Continental Airlines, Inc. to cease and desist from operating funnel

flights between the United States and Latin America. TACA International

Airlines, S.A., Aviateca, S.A., and Nicaraguense de Aviacion, S.A.

(``NICA'') filed their complaints in Dockets 49511, 49512, and 49513,

respectively. The three complainants argue that Continental's funnel

flights deceive and confuse consumers and harm competition.

Specifically, they maintain that the funnel flights keep consumers from

buying the most convenient transportation and give them the mistaken

impression that Continental offers far more flights to Latin America

than it actually does. They also maintain that Continental's funnel

flights harm competition not

[[Page 3780]]

only by misleading consumers but by unfairly outranking other

equivalent services in CRS displays and displacing such services to

later CRS screens where they are less likely to be sold. The

complainants also maintain that Continental's funnel flights deprive

them of a fair and equal opportunity to compete.

Apart from the issue of funnel flights, TACA charges Continental

with attempting to dominate the Texas-Latin America market by

unilaterally terminating a prorate agreement between the two carriers

in the El Salvador-Houston market, by engaging in predatory pricing, by

opposing TACA's expansion of service through Honduran flights, and by

opposing TACA's expansion of service at Dallas/Fort Worth.

United and American both filed consolidated answers supporting the

complaints but urging the Department to ban funnel flights as a

practice industrywide rather than merely acting on individual

complaints.

Continental filed individual answers opposing the complaints.

Continental maintains that its funnel flights are entirely legal, as

are the other activities of which TACA complains. The carrier also

denies that its funnel flight service receives preference over other

on-line connecting services in CRSs other than SystemOne. As an

affirmative defense, Continental notes that the Department has not

acted on American's petition for rulemaking to ban funnel flights. In

addition, Continental asserts that TACA owns a 30 percent share of

Aviateca and a 49 percent share of NICA, and it maintains that the

complaints represent a concerted response to its own opposition to

TACA's requests for extra-bilateral authority to serve Dallas/Fort

Worth and all points in Honduras and to its own complaint about lack of

access to jetways at San Salvador as well. Continental also

characterizes the complaints as a concerted effort to limit

Continental's ability to compete in the U.S.-Central America market.

Notice of Proposed Rulemaking

Proposed Rule: By this notice, we propose to require U.S. air

carriers, foreign air carriers, and, where applicable, ticket agents

(including travel agents) doing business in the United States to make

the following disclosures of all change-of-gauge services, or services

with a single flight number that require changes of aircraft en route

(including funnel flights):

(1) notice by carriers of required aircraft changes in written and

electric schedule information provided to the public, to the Official

Airline Guide and comparable publications, and to computer reservations

systems,

(2) in any direct oral communication with a consumer concerning a

change-of-gauge service, notice before booking transportation that the

service requires a change of aircraft en route, and

(3) written notice at the time of sale of such service stating the

following:

Notice: Change of Aircraft Required

For at least one of your flights, you must change aircraft en

route even though your ticket may show only one flight number and

have only one flight coupon for that flight. Further, in the case of

some travel, one of your flights may not be identified at the

airport by the number on your ticket, or it may be identified by

other flight numbers in addition to the one on your ticket. At your

request, the seller of this ticket will give you details of your

change of aircraft, such as where it will occur and what aircraft

types are involved.

We are thus proposing to codify explicit requirements that all

sellers of air transportation make effective disclosure to consumers

that change-of-gauge itineraries, including funnel flights, require a

change of aircraft. The contentions of American and the various

commenters, as confirmed by our Consumer Affairs office, tentatively

persuades us that even with our current policy requiring disclosure of

aircraft changes, too many consumers may be buying transportation on

these services without realizing that they will be changing planes.

Also, despite our adoption in 1992 of a rule requiring that CRS

displays must identify single-number flights requiring a change of

aircraft, it appears that travelers are still not always informed of en

route aircraft changes, resulting in confusion and hardship.

We tentatively find that the failure to disclose required aircraft

changes in scheduled passenger air transportation constitutes an unfair

or deceptive practice or an unfair method of competition within the

meaning of 49 U.S.C. 41712 (formerly section 411 of the Federal

Aviation Act). We intend for the disclosure requirements proposed here

to complement our CRS rule. The proposed rule should alleviate problems

of passenger deception or confusion and any resultant harm to

competition, and it should enable all consumers to make well-informed

decisions when purchasing travel.

We are not persuaded that we should ban either single or multiple

change-of-gauge services. The Department has generally declined to

foreclose carriers' marketing and service innovations unless these

violate 49 U.S.C. 41712 or otherwise contravene the public interest. We

do not agree with American and the commenters that funnel flights or

other change-of-gauge services violate 49 U.S.C. 41712 or contravene

the public interest in and of themselves. We tentatively find that any

problems of passenger deception or confusion that can be attributed to

the absence of effective disclosure to prospective passengers can and

should be solved by our proposed rule.

In calling for a ban on funnel flights and other change-of-gauge

services, American and the commenters ignore the public benefits that

these services provide. One-for-one change-of-gauge services are

superior to ordinary online connections, because with the former, the

carrier will usually hold the second aircraft for the arrival of the

first one. Both American Trans Air, which argues that change-of-gauge

services can promote economic efficiency, and Delta oppose banning

these services. Multiple change-of-gauge services can promote economic

efficiency by raising load factors on the funnel segments. Higher load

factors in turn can enable carriers to charge lower fares, serve more

markets, and increase frequency. A higher level and scope of service

translate into increased competition, which also benefits consumers.

If, as American argues, multiple change-of-gauge services really

provide no benefits for consumers, then with effective disclosure,

consumers will stop using them, so carriers will stop offering them.

The carriers who favor a ban on single and multiple change-of-gauge

services also ignore the costs of banning these services. First, a ban

on multiple change-of-gauge services could lead to higher fares in a

significant number of international city-pairs. The Department

exercises some control over the upward movement of fares in

international air transportation on single-flight-number services,

since it can block--and has blocked--fare increases that exceed the

levels allowable under the Standard Foreign Fare Level for itineraries

with one flight number. Such regulatory control does not extend to

fares for itineraries held out under two or more flight numbers.

Second, a ban on multiple change-of-gauge services would sacrifice

valuable international route rights, to the detriment of both the

carriers and the traveling public. The United States has negotiated

with our bilateral trading partners--and paid by making various

concessions--for the rights to have its carriers conduct change-of-

gauge services in foreign air transportation. Many bilateral agreements

not only allow U.S. carriers to operate change-of-gauge services to and

from points beyond foreign gateways but actually

[[Page 3781]]

require the beyond flights to be continuations of flights that

originate in the United States or earlier legs of flights that are

destined for the United States. Our bilateral agreement with Great

Britain expressly requires that U.S. carriers use the same flight

numbers for all change-of-gauge sectors, for example. This and similar

restrictions make through flight numbers a necessity if U.S. carriers

are to redeem international route rights to many points beyond foreign

gateways. Banning multiple change-of-gauge services would sacrifice

these rights and deprive the traveling public of U.S. carrier service.

Moreover, most of the bilateral agreements that allow multiple change-

of-gauge services do so for both parties and specifically authorize

multiple flight numbers for a single operation. To prohibit foreign

flag carriers from operating multiple change-of-gauge services in the

United States would breach these agreements. To sacrifice U.S.

carriers' rights unilaterally would contravene the public interest as a

matter of principle and in practice could put U.S. carriers at a

competitive disadvantage.

The pleadings indicate that the problems associated with change-of-

gauge services lie not with the services in and of themselves but with

the failure to inform passengers effectively that these services entail

a change of aircraft en route. This failure, as stated above, we

tentatively find to be an unfair or deceptive practice or an unfair

method of competition. The disclosure rules that we are proposing

should alleviate not only most of the consumer problems detailed by the

commenters but also whatever competitive problems may now result from

consumers' mistaken belief that they are purchasing single-plane

transportation. For the reasons discussed below, the other concerns

voiced by the commenters--i.e., CRS display issues, the single-coupon

ticketing, the effects on foreign air carriers, and the incomplete

flight displays at airports associated with funnel flights and change-

of-gauge services--do not, in our view, warrant a ban on these

practices.

Those who comment on this notice should be aware that the tentative

conclusions and analysis set forth here do not reflect any of the

comments filed in Docket 49702, Disclosure of Code-Sharing Arrangements

and Long-Term Wet Leases, Notice of Proposed Rulemaking, 59 FR 40836 et

seq. (August 10, 1994). Rather, to the extent that they may bear on

this rulemaking, we will consider these comments, as well as our

disposition of them in our final action in the code-sharing rulemaking,

before we adopt any final rule on disclosure of change-of-gauge

services.

In light of our tentative conclusion that funnel flights do not

violate 49 U.S.C. 41712 in and of themselves and should not be banned,

we dismiss the complaints of TACA, Aviateca, and NICA against

Continental in Dockets 49511, 49512, and 49513, respectively.

Continental appears, moreover, to be complying with our policy

requiring that passengers be informed of aircraft changes. After

reviewing the complaints, we asked our Officer of Consumer Affairs to

investigate Continental's compliance by making anonymous test calls,

and that office informs us that in all of its calls, the aircraft

change was disclosed. We also dismiss TACA's complaint because the

carrier has provided no evidence in support of its charge of predatory

pricing and because the other acts with which its charges Continental

do not violate 49 U.S.C. 41712, any other provision of title 49 of the

U.S. Code, or the bilateral agreement between the United States and El

Salvador.

Passenger Confusion and Deception: In requiring operators of

change-of-gauge services to disclose aircraft changes in their

schedules and in requiring all sellers of scheduled passenger air

transportation to make oral disclosure of aircraft changes to

prospective passengers before booking travel and to provide written

notice at the time of sale, we mean to eliminate instances in which

passengers choose these types of transportation under a mistaken

impression that they will remain on the same plane throughout their

journeys. We understand that in some cases, passengers have only

learned that they must change aircraft after they have begun their

travel. The written notice should also eliminate any misunderstanding

as to the nature of the transportation that might otherwise result from

the receipt of only one flight coupon for an itinerary that entails a

change of planes. It should eliminate or reduce as well any confusion

that passengers might otherwise experience if they see multiple flight

numbers listed at the airport for the same flight, with or without

their own flight number. We have recently addressed analogous concerns

regarding the sharing of airline designator codes by proposing to

require sellers of air transportation to give passengers oral and

written notice of such arrangements. See Disclosure of Code-Sharing

Arrangements and Long-Term Wet Leases, Notice of Proposed Rulemaking,

supra.

The disclosure requirements proposed here should thus address the

problems associated with passengers' misunderstanding of the nature of

their transportation. Two other consumer-related concerns cited by some

commenters do not, in our view, justify a ban on one-for-one or

multiple change-of-gauge services. First, that passengers are issued

just one flight coupon and therefore cannot switch automatically to

another carrier in the event that the ongoing segment of their

transportation is cancelled or seriously delayed does not justify

banning one-for-one or multiple change-of-gauge services. This

restriction is not unique to those services. Many widely-used discount

fares are not automatically transferrable from one carrier to another,

either, but instead must be specially endorsed by the issuing carrier

in order to be accepted by another carrier. Second, we do not agree

that we must sacrifice the public benefits of multiple change-of-gauge

flights in order to eliminate whatever confusion may result from their

incomplete listing in some airports' displays. This is an issue that

affected airports should address. In any event, the written notice that

our proposed rule would require would alert passengers to the

possibility of incomplete airport displays.

Competition: To the extent that competition among airlines may be

affected when passengers reject other connecting services in favor of

one-for-one or multiple change-of-gauge services under the mistaken

belief that they will thereby avoid changing planes, our proposed

disclosure requirements should correct this distortion.

American and the commenters also cite padded displays in CRSs as a

competitive concern that warrants banning these practices outright. We

do not agree, because the legitimacy of change-of-gauge services in and

of themselves is a separate issue from the way that such services are

displayed in CRSs. In fact, the issue of multiple CRS listings has been

raised in two recent petitions for rulemaking: American and Trans World

Airlines have filed petitions in Dockets 49620 and 49622, respectively,

for a CRS rule prohibiting multiple listing of code-sharing services.

In that context, the Department will consider the issue of display

practices as it involves both code-sharing services and change-of-gauge

services.

American and the commenters also complain that funnel flights are

improperly given preference in CRSs over on-line connecting services.

As noted above, though, Continental claims that even though its funnel

flights to Latin America are displayed in CRSs as

[[Page 3782]]

direct services with a change of equipment no CRS except System One

gives them a preference over other international on-line connecting

services. Moreover, out CRS rules allow vendors to include change-of-

gauge services with connecting services on a nondiscriminatory basis.

Effects on Foreign Air Carriers: Several commenters argue that we

should ban multiple change-of-gauge services because they

disproportionately harm foreign air carriers and because, in violation

of various bilateral agreements, they deprive foreign air carriers of a

fair and equal opportunity to compete. As we found in the CRS

rulemaking, however, ``the right to a fair and equal opportunity to

compete does not guarantee foreign air carriers the exact same

opportunities that U.S. carriers have. [citations omitted]. . . U.S.

and foreign carriers must each contend with the practical advantages of

route structure and market identity that competing carriers have within

their own countries.'' Computer Reservations System (CRS) Regulations,

Final Rule, supra, at 43892-43893 (``Prescribed Algorithm''). For

example, any one foreign carrier can generally offer change-of-gauge

and on-line connecting service to the United States from far more

points behind its homeland gateways than any U.S. carrier can serve.

Cf. id. at 43803 (``On-Line Preference''). Furthermore, in an era of

increasing code-sharing arrangements between U.S. and foreign air

carriers--arrangements which enable the participants to offer the

equivalent of change-of-gauge and on-line service between U.S. and

foreign points behind and beyond the participants' gateways--foreign

carriers now have additional opportunities to compete at interior-U.S.

points. See Disclosure of Code-Sharing Arrangements and Long-term Wet

Leases, Notice of Proposed Rulemaking, supra, 59 FR at 40837.

Request for Comments

We invite comments not only on the merits of our proposed

disclosure requirements but also on the feasibility and costs of

implementing them. Comments should be supported by concrete data. Any

economic analysis should contain enough detail to allow the Department

to make an independent evaluation of the position advocated.

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 effects of

the proposal in the docket.

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

a significant economic effect 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 effects

on small entities that should be considered. If comments provide

information that there are significant effects on small entities, the

Department will prepare a regulatory flexibility analysis at the final

rule stage.

The Department does not believe that the proposed rule has

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 in 14 CFR Part 258

Air carriers, Foreign air carriers, Ticket agents, and Consumer

protection.

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

to amend Title 14, Chapter II, Subchapter A by adding a new Part 258,

to read as follows:

PART 258--DISCLOSURE OF CHANGE-OF-GAUGE SERVICES

Sec.

258.1 Purpose.

258.2 Applicability.

257.3 Definitions.

258.4 Unfair and Deceptive Practice.

258.5 Notice Requirement.

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

Sec. 258.1 Purpose.

The purpose of this part is to ensure that consumers are adequately

informed before they book air transportation or embark on travel

involving change-of-gauge services that these services require a change

of aircraft en route.

Sec. 258.2 Applicability.

This rule applies to the following:

(a) direct air carriers and foreign air carriers that sell or issue

tickets in the United States for scheduled passenger air transportation

on change-of-gauge services or that operate such transportation; and

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

issue tickets for scheduled passenger air transportation on change-of-

gauge services.

Sec. 258.3 Definitions.

(a) Air transportation has the meaning ascribed to it in 49 U.S.C.

Sec. 40102(5).

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

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

directly in scheduled passenger air transportation.

(c) Change-of-gauge service means a service that requires a change

of aircraft en route but has only a single flight number.

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

40102(40).

Sec. 258.4 Unfair and deceptive practice.

The holding out or sale of scheduled passenger air transportation

that involves change-of-gauge service is prohibited as an unfair or

deceptive practice or an unfair method of competition within the

meaning 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. 258.5 Notice requirement.

(a) Notice in Schedules. Carriers operating-of-gauge services to,

from, or within the United States shall ensure that in the written and

electronic schedule information they provide to the public, to the

Official Airline Guide and comparable publications, and to computer

reservations systems, these services are shown as requiring a change of

aircraft.

(b) Oral Notice to Prospective Consumers. In any direct oral

communication with a consumer in the United States concerning a change-

of-gauge service, any carrier or ticket agent doing business in the

United States shall tell the consumer before booking scheduled

passenger air transportation to, from, or within the United States that

the service requires a change of aircraft en route.

(c) Written Notice. At the time of sale in the United States of a

change-of-gauge service, the selling carrier or ticket agent shall

provide written notice stating the following:

Notice: Change of Aircraft Required

For at least one of your flights, you must change aircraft en

route even though your ticket may show only one flight number and

have only one flight coupon for that flight. Further, in the case of

some travel, one of your flights may not be identified at the

airport by the number on your ticket, or it may be identified by

other flight numbers in addition to the one on your ticket. At your

request, the seller of this ticket will give you details of your

change of aircraft, such as

[[Page 3783]]

where it will occur and what aircraft types are involved.

Issued under authority delegated in 49 CFR 1.56a(h)(2) in

Washington, D.C. on January 12, 1995.

Patrick V. Murphy,

Acting Assistant Secretary for Aviation and International Affairs.

[FR Doc. 95-1331 Filed 1-18-95; 8:45 am]

BILLING CODE 4910-62-M