Federal Travel Regulation; Use of Commercial Transportation, Fly America Act

GENERAL SERVICES ADMINISTRATION

41 CFR Parts 301-3 and 301-10

[FTR Amendment 74--1998 Edition]

RIN 3090-AG73

Federal Travel Regulation; Use of Commercial Transportation, Fly

America Act

AGENCY: Office of Governmentwide Policy (OGP), GSA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Federal Travel Regulation (FTR)

provisions pertaining to use of U.S. flag air carriers under the

provisions of 49 U.S.C. 40118, commonly referred to as the Fly America

Act. This final rule reduces the connecting time for use of U.S. flag

air carrier service at an overseas interchange point; requires that

airline tickets issued under a code share agreement identify the U.S.

flag air carrier's designator code and flight number; removes

references to ``gateway airports;'' and implements a new method for

calculation of the employee's liability for unauthorized transportation

on a foreign air carrier.

EFFECTIVE DATE: January 1, 1999.

FOR FURTHER INFORMATION CONTACT: Technical information: Umeki G.

Thorne, telephone (202) 501-1538. FTR ``plain language'' format:

Internet GSA, [email protected].

SUPPLEMENTARY INFORMATION: Subsection 127 (d) of the General Accounting

Office Act of 1996 (Pub. L. 104-316) amended 49 U.S.C. 40118 to require

that the Administrator of General Services Administration (GSA) issue

regulations under which agencies may permit payment for transportation

on a foreign air carrier when such transportation is determined

necessary. This final rule implements the Administrator's authority

under the statute, identifying when U.S. flag air carrier service is

deemed available (for transportation between a point in the United

States and a point outside the United States) or reasonably available

(for transportation between two points outside the United States). This

final rule is written in the ``plain language'' style of regulation

writing as a continuation of GSA's effort to make the FTR easier to

understand and use. This final rule removes Part 301-3 of 41 CFR

Chapter 301 and adds the provisions implementing the Fly America Act to

Part 301-10. This final rule also modifies the proposed rule with

request for comments published in the Federal Register on April 7, 1998

(63 FR 16936).

During the 30-day comment period provided by the proposed rule, GSA

received comments from four Federal agencies, three U.S. flag air

carriers, an air carrier association, and three non-Government

entities. GSA carefully reviewed each comment. Changes based on

comments received have been grouped by section of the proposed rule and

subject area and are discussed in the following general analysis.

Section 301-10.134 What Is U.S. Flag Air Carrier Service?

U.S. Air Carrier Certificate

Section 301-10.134 of the proposed rule generally defines ``U.S.

flag air carrier service'' as service on an air carrier holding a

certificate under 49 U.S.C. 41102. One Federal agency requested that

GSA clarify that although U.S. flag air carriers must hold a

certificate, the transportation does not have to be authorized by such

certificate, if it is authorized by rule or exemption. GSA has revised

Sec. 301-10.134 accordingly.

Code Share Agreements

Ticket Stock

A comment from a non-Government entity supported the language in

Sec. 301-10.134 of the proposed rule stating that service under a code

share arrangement, when the entire ticket is issued by a U.S. flag air

carrier, is deemed U.S. flag air carrier service. In contrast, three

Federal agencies, two U.S. flag air carriers and the air carrier

association objected to this requirement as too restrictive. Two of the

Federal agencies and the air carrier association stated that many

developing countries have neither U.S. flag air carrier facilities nor

personnel. Accordingly, in such cases, obtaining a ticket on U.S. flag

air carrier ticket stock is not practicable and could preclude

travelers from benefiting from U.S. flag air carrier service through

code share arrangements. The air carrier association also pointed out

that the essential feature on an airline ticket is the air carrier

designator code and flight number rather than the ticket stock. One

U.S. flag air carrier stated that imposing a U.S. air carrier ticket

stock requirement could, in some cases, divert traffic to foreign air

carriers in those locations where no U.S. flag air carrier facilities

or personnel are located. In addition, GSA notes that as airlines and

travelers more frequently utilize electronic ticketing, a U.S. air

carrier ticket stock requirement appears outdated. As a result of these

comments, the language of the proposed rule has been revised. The final

rule states that the ticket (or documentation for an electronic ticket)

must identify the U.S. flag air carrier's designator code and flight

number. The requirement that the ticket be issued on U.S. flag air

carrier ticket stock has been removed.

Foreign Air Carrier Code Share Service as U.S. Flag Air Carrier Service

One U.S. flag air carrier objected, except under limited

circumstances, to the determination that service by a foreign air

carrier under a code share arrangement is service by a U.S. flag air

carrier. Specifically, the U.S. flag air carrier stated that code share

service by a foreign air carrier is merely a form of interline service

and therefore should not be considered service by a U.S. flag air

carrier unless the U.S. flag air carrier bears the financial risk of

empty seats on the aircraft. In contrast, the air carrier association

commented that code share arrangements between U.S. flag air carriers

and foreign air carriers are consistent with the Fly America Act

because they promote the intent of the Fly America Act by improving the

economic and competitive position of U.S. flag air carriers.

The final rule provides that U.S. flag air carrier service includes

service provided by a foreign air carrier under a code share agreement

when the ticket, or documentation in the case of an electronic ticket,

identifies the U.S. flag air carrier's designator code and flight

number. It is GSA's position that codesharing between U.S. flag air

carriers and foreign air carriers increases opportunities for U.S. flag

air carriers to expand into new international markets, which in turn

promotes revenues to U.S. flag air carriers, thereby furthering the

goals of the Fly America Act. Additionally, the U.S. flag air carrier

whose designator code and flight number appears on the ticket, or

documentation in the case of an electronic ticket, takes responsibility

for the passenger(s) traveling under the U.S. flag air carrier's

designator code and flight number, supporting the determination that

the code share service is properly deemed service by the U.S. flag air

carrier.

Section 301-10.135 When Must I Travel Using U.S. Flag Air Carrier

Service?

Exception for Transportation Under Bilateral and Multilateral

Agreements

Section 301-10.135 of the proposed rule states that U.S. flag air

carrier service must be used for all travel funded by the U.S.

Government, unless one of the various exceptions applies. One Federal

agency commented that Sec. 301-10.135(b), which addresses

[[Page 63418]]

bilateral or multilateral agreements, could be misleading because the

criteria from the Fly America Act for exchanging fly-national

privileges under such agreements are to be applied by the negotiators

at the time the agreement is made, not by the traveler. That agency

also stated that as of the date of the proposed rule there were no

bilateral or multilateral agreements in effect that met the

requirements of the Fly America Act. Based on this comment, GSA has

clarified Sec. 301-10.135(b). Under the final rule, a traveler is not

required to use U.S. flag air carrier service if transportation by a

foreign air carrier is provided under a bilateral or multilateral air

transportation agreement which the Department of Transportation has

determined meets the conditions specified in the Fly America Act. To

verify existence of any qualifying bilateral or multilateral

agreements, agencies should contact the U.S. Department of

Transportation, Office of the Secretary, Office of International

Aviation, Room X-40, Washington, DC 20590.

Direct Service by Foreign Air Carrier

A Federal agency commented on Sec. 301-10.135(d) of the proposed

rule, which states that when no U.S. flag air carrier provides service

on a particular leg of the route, foreign air carrier service may be

used, but only to or from the nearest interchange point on a usually

traveled route to connect with U.S. flag air carrier service. The

agency requested that GSA eliminate the words, ``but only to or from

the nearest interchange point on a usually traveled route'' in order to

save travel time by enabling travelers to use direct service on a

foreign air carrier. GSA is not persuaded that this change is

warranted. While the use of a foreign air carrier may be more

convenient when the foreign air carrier has nonstop or direct service,

GSA does not consider a shorter travel time in these circumstances to

be sufficient to consider U.S. flag air carrier service unavailable or

use of a foreign air carrier necessary. Therefore, GSA did not adopt

the revision proposed in the comment. Of course, if the traveler meets

an exception provided in the regulation, such as those provided in

Sec. 301-10.136, then the traveler may use a foreign air carrier.

Section 301-10.136 What Exceptions to the Fly America Act Requirements

Apply When I Travel Between the United States and Another Country?

Removal of the terms ``gateway airport in the United States'' and

``gateway airport abroad''

The air carrier association requested clarification for the removal

of terms ``gateway airport in the United States'' and ``gateway airport

abroad.'' The association stated that it does not oppose the deletion

of the terms but requested that GSA clarify any policy change intended

by the elimination of these terms. GSA does not intend to make a

significant substantive policy change through the removal of the terms

``gateway airport abroad'' and ``gateway airport in the United

States.'' However, as there are a myriad of potential travel

situations, there may be instances where the removal of the terms

result in a different outcome than that which would have resulted under

the former rule.

Connecting Time

Section Sec. 301-10.136 (b)(3) of the proposed rule reduced the

connecting time from 6 hours or more to 4 hours or more at an overseas

interchange point for purposes of determining whether U.S. flag air

carrier service is unavailable. One Federal agency and one non-

Government entity commented in support of this policy change. In

contrast, two U.S. flag air carriers and the air carrier association

opposed this policy change. The U.S. flag air carriers and the air

carrier association stated that this change would unnecessarily risk

the loss of business by U.S. airlines as it is likely to result in U.S.

flag air carrier service being deemed unavailable in more instances,

thereby diverting more travel to foreign air carriers.

GSA has considered these comments, but the change included in the

proposed rule reducing the connecting time from 6 hours or more to 4

hours or more remains in this final rule. GSA included a number of

considerations in its review of the issue. When the Fly America Act was

first implemented in the 1970's, the 6 hour or more connecting time

rule was established as a reasonable standard for connecting service

through an overseas interchange point. Since that time, U.S. flag air

carriers have significantly expanded their service in international

markets and increased their service at international interchange points

so that passengers can connect in a shorter time frame. Expanded use of

code share arrangements has also helped reduce connecting times at

overseas interchange points.

In reviewing this issue, GSA's analysis of airline schedule data

showed that the airlines' average layover or connecting time is 2\1/2\

hours. GSA's analysis also showed that there would not be a large

number of flights impacted by this change. Therefore, reducing the

connecting time from 6 hours to 4 hours should not result in a

significant loss of revenue to U.S. flag air carriers. Under the final

rule, U.S. flag air carrier service is deemed unavailable when

connecting service at an overseas interchange point would require a

connecting time of 4 hours or more. This exception applies only when no

U.S. flag air carrier service is available within the 4 hour time

period, including U.S. flag air carrier service under a code share

agreement.

Section 301-10.138 In What Circumstances Is Foreign Air Carrier

Service Deemed a Matter of Necessity?

Excess Foreign Currency

Section (b)(3) of this section of the proposed rule stated that

``(b) Necessity includes, but is not limited to, the following

circumstances when: (3) Your program or activity may only be financed,

under statute, using excess foreign currency and all U.S. flag air

carriers refuse to accept foreign currencies.'' As no excess foreign

currency situations exist at the present time (and have not existed

since 1992), GSA has determined that the provision included at

Sec. 301-10.138(b)(3) of the proposed rule is unnecessary. Therefore

Sec. 301-10.138(b)(3) of the proposed rule is not included in this

final rule. Should excess foreign currency issues arise in the future,

GSA will determine at that time whether a provision on the subject

should be included in the regulation.

Safety Exceptions

The air carrier association commented on Sec. 301-10.138(b)(1)(2),

stating that although the association did not object to the safety

exceptions included in the proposed rule, GSA should inform travelers

that security exceptions (due to a terrorist threat on a U.S. flag air

carrier) should only be invoked after consultation with the Office of

Civil Aviation Security of the Federal Aviation Administration (FAA).

In the event of a threat to a U.S. flag air carrier, the FAA and the

Department of State will issue a travel advisory notice to the general

public. Agencies should take any such travel advisory notices into

account when determining whether foreign air carrier service is deemed

a necessity as provided in Sec. 301-10.138. Written approval is

required for a determination that foreign air carrier service is a

necessity based on a security threat to a U.S. flag air carrier and

must be supported by a travel advisory notice. The language of this

final rule includes this requirement. With respect to threats against

Government employees or other

[[Page 63419]]

travelers, which formulate the basis for a determination that foreign

air carrier service is necessary (as contrasted with threats to a U.S.

flag air carrier), evidence of such threats must accompany the agency's

approval of the use of foreign air carrier service.

Section 301-10.144 What Is My Liability if I Improperly Use a Foreign

Air Carrier?

Splitting the Cost of Air Travel Between Federal and Non-Federal Funds

One non-Government entity commented that the provision included in

this section of the proposed rule for computing liability may encourage

splitting the cost of a trip between non-Federal and Federal funds to

permit the use of a foreign air carrier for convenience or lower rates.

The comment stated that the entity's practice has been to deny payment

of the total cost of the air travel (both foreign and U.S.) if a

foreign air carrier was improperly used for any part of the trip.

Under Sec. 301-3.6(c)(4) of the current FTR, employee liability is

computed based on a formula used to determine the amount of lost

revenue to the U.S. flag air carrier(s) rather than denial of the

entire cost of air travel. The new policy for employee liability, which

denies reimbursement for use of any foreign air carrier for any part of

the trip for which it was not authorized, is intended to simplify the

process for computing employee liability. 49 U.S.C. 40118 applies only

to transportation that is financed with U.S. Government funds and will

not result in improperly splitting the costs of a trip between Federal

and non-Federal funds. GSA's intent is to ensure that agencies

establish internal procedures for disallowance of reimbursement to

travelers who use foreign air carrier service that was not authorized

or otherwise permitted under this regulation. Therefore this section

has been modified to include a provision requiring agencies to

establish such internal procedures.

Ticket Purchases Made Through a Government Contractor Travel Agency

One Federal agency stated that agencies which are not using charge

cards for purchase of airline tickets should be allowed to make payment

directly to the Travel Management Center, and then seek reimbursement

from the employee when an employee has improperly used a foreign air

carrier. The issue of whether a Federal agency must pay a travel

management center/travel agency contractor when there is improper use

of a foreign air carrier is a matter of contract administration. GSA

notes that many Government contracts for travel management center/

travel agency services include a provision requiring that the

contractor abide by the terms of the Fly America Act in issuing tickets

for Federal travelers and bear the financial burden for failure to do

so. Accordingly, GSA determined it unnecessary to revise Sec. 301-

10.144 on this issue.

GSA has determined that this final rule is not a significant

regulatory action for the purposes of Executive Order 12866 of

September 30, 1993. This final rule is not required to be published in

the Federal Register for notice and comment; therefore, the Regulatory

Flexibility Act does not apply. The Paperwork Reduction Act does not

apply because the proposed revisions do not impose recordkeeping or

information collection requirements, or the collection of information

from offerors, contractors, or members of the public which require the

approval of the Office of Management and Budget under 44 U.S.C. 501 et

seq. This final rule is also exempt from Congressional review

prescribed under 5 U.S.C. 801 since it relates solely to agency

management and personnel.

List of Subjects in 41 CFR Parts 301-3 and 301-10

Government employees, Travel and transportation expenses.

For the reasons set out in the preamble, 41 CFR Chapter 301 is

amended as follows.

PART 301-3--USE OF COMMERCIAL TRANSPORTATION

1. Under the authority of 5 U.S.C. 5707, part 301-3 is removed.

PART 301-10--TRANSPORTATION EXPENSES

2. The authority citation for 41 CFR part 301-10 continues to read

as follows:

Authority: 5 U.S.C. 5707; 40 U.S.C. 486(c); 49 U.S.C. 40118.

3. An undesignated center heading and sections 301-10.131 through

301-10.144 are added to read as follows:

Use of United States Flag Air Carriers

Sec.

301-10.131 What does United States mean?

301-10.132 Who is required to use a U.S. flag air carrier?

301-10.133 What is a U.S. flag air carrier?

301-10.134 What is U.S. flag air carrier service?

301-10.135 When must I travel using U.S. flag air carrier service?

301-10.136 What exceptions to the Fly America Act requirements

apply when I travel between the United States and another country?

301-10.137 What exceptions to the Fly America Act requirements

apply when I travel solely outside the United States, and a U.S.

flag air carrier provides service between my origin and destination?

301-10.138 In what circumstances is foreign air carrier service

deemed a matter of necessity?

301-10.139 May I travel by a foreign air carrier if the cost of my

ticket is less than traveling by a U.S. flag air carrier?

301-10.140 May I use a foreign air carrier if the service is

preferred by or more convenient for my agency or me?

301-10.141 Must I provide any special certification or documents if

I use a foreign air carrier?

301-10.142 What must the certification include?

301-10.143 What is my liability if I improperly use a foreign air

carrier?

Use of United States Flag Air Carriers

Sec. 301-10.131 What does United States mean?

For purposes of the use of United States flag air carriers, United

States means the 50 states, the District of Columbia, and the

territories and possessions of the United States (49 U.S.C. 40102).

Sec. 301-10.132 Who is required to use a U.S. flag air carrier?

Anyone whose air travel is financed by U.S. Government funds,

except as provided in Sec. 301-10.135, Sec. 301-10.136, and Sec. 301-

10.137.

Sec. 301-10.133 What is a U.S. flag air carrier?

An air carrier which holds a certificate under 49 U.S.C. 41102 but

does not include a foreign air carrier operating under a permit.

Sec. 301-10.134 What is U.S. flag air carrier service?

U.S. flag air carrier service is service provided on an air carrier

which holds a certificate under 49 U.S.C. 41102 and which service is

authorized either by the carrier's certificate or by exemption or

regulation. U.S. flag air carrier service also includes service

provided under a code share agreement with a foreign air carrier in

accordance with Title 14, Code of Federal Regulations when the ticket,

or documentation for an electronic ticket, identifies the U.S. flag air

carrier's designator code and flight number.

Sec. 301-10.135 When must I travel using U.S. flag air carrier

service?

You are required by 49 U.S.C. 40118, commonly referred to as the

``Fly

[[Page 63420]]

America Act,'' to use U.S. flag air carrier service for all air travel

funded by the U.S. Government, except as provided in Sec. 301-10.136

and Sec. 301-10.137 or when one of the following exceptions applies:

(a) Use of a foreign air carrier is determined to be a matter of

necessity in accordance with Sec. 301-10.138; or

(b) The transportation is provided under a bilateral or

multilateral air transportation agreement to which the United States

Government and the government of a foreign country are parties, and

which the Department of Transportation has determined meets the

requirements of the Fly America Act; or

(c) You are an officer or employee of the Department of State,

United States Information Agency, United States International

Development Cooperation Agency, or the Arms Control Disarmament Agency,

and your travel is paid with funds appropriated to one of these

agencies, and your travel is between two places outside the United

States; or

(d) No U.S. flag air carrier provides service on a particular leg

of the route, in which case foreign air carrier service may be used,

but only to or from the nearest interchange point on a usually traveled

route to connect with U.S. flag air carrier service; or

(e) A U.S. flag air carrier involuntarily reroutes your travel on a

foreign air carrier; or

(f) Service on a foreign air carrier would be three hours or less,

and use of the U.S. flag air carrier would at least double your en

route travel time; or

(g) When the costs of transportation are reimbursed in full by a

third party, such as a foreign government, international agency, or

other organization.

Sec. 301-10.136 What exceptions to the Fly America Act requirements

apply when I travel between the United States and another country?

The exceptions are:

(a) If a U.S. flag air carrier offers nonstop or direct service (no

aircraft change) from your origin to your destination, you must use the

U.S. flag air carrier service unless such use would extend your travel

time, including delay at origin, by 24 hours or more.

(b) If a U.S. flag air carrier does not offer nonstop or direct

service (no aircraft change) between your origin and your destination,

you must use a U.S. flag air carrier on every portion of the route

where it provides service unless, when compared to using a foreign air

carrier, such use would:

(1) Increase the number of aircraft changes you must make outside

of the U.S. by 2 or more; or

(2) Extend your travel time by at least 6 hours or more; or

(3) Require a connecting time of 4 hours or more at an overseas

interchange point.

Sec. 301-10.137 What exceptions to the Fly America Act requirements

apply when I travel solely outside the United States, and a U.S. flag

air carrier provides service between my origin and my destination?

You must always use a U.S. flag carrier for such travel, unless,

when compared to using a foreign air carrier, such use would:

(a) Increase the number of aircraft changes you must make en route

by 2 or more; or

(b) Extend your travel time by 6 hours or more; or

(c) Require a connecting time of 4 hours or more at an overseas

interchange point.

Sec. 301-10.138 In what circumstances is foreign air carrier service

deemed a matter of necessity?

(a) Foreign air carrier service is deemed a necessity when service

by a U.S. flag air carrier is available, but

(1) Cannot provide the air transportation needed; or

(2) Will not accomplish the agency's mission.

(b) Necessity includes, but is not limited to, the following

circumstances:

(1) When the agency determines that use of a foreign air carrier is

necessary for medical reasons, including use of foreign air carrier

service to reduce the number of connections and possible delays in the

transportation of persons in need of medical treatment; or

(2) When use of a foreign air carrier is required to avoid an

unreasonable risk to your safety and is approved by your agency (e.g.,

terrorist threats). Written approval of the use of foreign air carrier

service based on an unreasonable risk to your safety must be approved

by your agency on a case by case basis. An agency determination and

approval of use of a foreign air carrier based on a threat against a

U.S. flag air carrier must be supported by a travel advisory notice

issued by the Federal Aviation Administration and the Department of

State. An agency determination and approval of use of a foreign air

carrier based on a threat against Government employees or other

travelers must be supported by evidence of the threat(s) that form the

basis of the determination and approval; or

(3) When you can not purchase a ticket in your authorized class of

service on a U.S. flag air carrier, and a seat is available in your

authorized class of service on a foreign air carrier.

Sec. 301-10.139 May I travel by a foreign air carrier if the cost of

my ticket is less than traveling by a U.S. flag air carrier?

No. Foreign air carrier service may not be used solely based on the

cost of your ticket.

Sec. 301-10.140 May I use a foreign air carrier if the service is

preferred by or more convenient for my agency or me?

No. You must use U.S. flag air carrier service, unless you meet one

of the exceptions in Sec. 301-10.135, Sec. 301-10.136, or Sec. 301-

10.137 or unless foreign air carrier service is deemed a matter of

necessity under Sec. 301-10.138.

Sec. 301-10.141 Must I provide any special certification or documents

if I use a foreign air carrier?

Yes, you must provide a certification, as required in Sec. 301-

10.143 and any other documents required by your agency. Your agency

cannot pay your foreign air carrier fare if you do not provide the

required certification.

Sec. 301-10.142 What must the certification include?

The certification must include:

(a) Your name;

(b) The dates that you traveled;

(c) The origin and the destination of your travel;

(d) A detailed itinerary of your travel, name of the air carrier

and flight number for each leg of the trip; and

(e) A statement explaining why you met one of the exceptions in

Sec. 301-10.135, Sec. 301-10.136, or Sec. 301-10.137 or a copy of your

agency's written approval that foreign air carrier service was deemed a

matter of necessity in accordance with Sec. 301-10.138.

Sec. 301-10.143 What is my liability if I improperly use a foreign air

carrier?

You will not be reimbursed for any transportation cost for which

you improperly use foreign air carrier service. If you are authorized

by your agency to use U.S. flag air carrier service for your entire

trip, and you improperly use a foreign air carrier for any part of or

the entire trip (i.e., when not permitted under this regulation), your

transportation cost on the foreign air carrier will not be payable by

your agency. If your agency authorizes you to use U.S. flag air carrier

service for part of your trip and foreign air carrier service for

another part of your trip, and you improperly use a foreign air carrier

(i.e., when neither authorized to do so nor otherwise permitted under

this regulation), your agency will pay the transportation cost on the

foreign air

[[Page 63421]]

carrier for only the portion(s) of the trip for which you were

authorized to use foreign air carrier service. The agency must

establish internal procedures for denying reimbursement to travelers

when use of a foreign air carrier was neither authorized nor otherwise

permitted under this regulation.

Dated: November 5, 1998.

David J. Barram,

Administrator of General Services.

[FR Doc. 98-30344 Filed 11-12-98; 8:45 am]

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