02-14360. Proposed Agency Information Collection; Comment Request; Disclosure of Code-Sharing Arrangements and Long-Term Wet Leases

AGENCY:

Office of the Secretary (OST), DOT.

ACTION:

Notice and request for comments.

SUMMARY:

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), this notice announces and requests comments on the Department of Transportation's intention to request the extension of a previously approved collection that reflects DOT's current consumer notification rules and policies to ensure that consumers have pertinent information about airline code-sharing arrangements and long-term wet leases in domestic and international air transportation. The information collection requirement in the rule, among other things, (1) requires travel agents doing business in the United States, foreign air carriers, and U.S. air carriers (a) to give consumers reasonable and timely notice if air transportation they are considering purchasing will be provided by an airline different from the airline holding out the transportation, and (b) to disclose the identity of the airline that will actually operate the aircraft; and (2) for tickets issued in the United States, requires U.S. and foreign air carriers and travel agents to provide written notice of the transporting carrier's identity at the time of purchase of air transportation involving a code-sharing or long-term wet-lease arrangement.

DATES:

Comments on this notice must be received on or before August 9, 2002.

ADDRESSES:

Comments on this notice should be directed to the Competition and Policy Analysis Division (X-55), Office of Aviation Analysis, U.S. Department of Transportation, Room PL-401, Docket Nos. OST-95-179 and OST-95-623, 400 Seventh Street, SW., Washington, DC 20590. Three copies are requested but not required.

FOR FURTHER INFORMATION CONTACT:

Jack Schmidt, Office of the Assistant Secretary for Aviation and International Affairs, Office of the Secretary, U.S. Department of Transportation, 400 Seventh St. SW., Washington, DC 20590, [phone].

SUPPLEMENTARY INFORMATION:

Title: Disclosure of Code-sharing Arrangements and Long-term Wet Leases.

OMB Control Number: 2105-0537.

Type of request: Extension of a previously approved collection.

Abstract: Code-sharing is the name given to a common airline industry marketing practice where, by mutual agreement between cooperating carriers, at least one of the airline designator codes used on a flight is different from that of the airline operating the aircraft. In one version, two or more airlines each use their own designator codes on the same aircraft operation. Although only one airline operates the flight, each airline in a code-sharing arrangement may hold out, market and sell the flight as its own in published schedules. Code-sharing also refers to other arrangements where a code on a passenger's ticket is not that of the operator of the flight, but where the operator does not also hold out the service in its own name. Such code-sharing arrangements are common between commuter air carriers and their larger affiliates and the number of arrangements between U.S. air carriers and foreign air carriers has also been increasing. Arrangements falling into this category are similar to leases of aircraft and crew (wet leases).

The Department recognizes the strong preference of air travelers for on-line service (service by a single carrier) on connecting flights over interline service (service by multiple carriers). Code-sharing arrangements are, in part, a marketing response to this demand for on-line service since these arrangements enable airlines to hold out multi-carrier service as on-line service. Often, code-sharing partners offer services similar to those available for on-line connections with the goal of offering “seamless” service (i.e., service where the transfers from flight to flight or airline to airline are facilitated). For example, they may locate gates near each other to make connections more convenient or coordinate baggage handing to give greater assurance that baggage will be properly handled.

Code-sharing arrangements can help airlines operate more efficiently because they can reduce costs by providing a joint service with one aircraft rather than operating separate services with two aircraft. Particularly in thin markets, this efficiency can lead to increased price and service options for consumers or enable the use of equipment sized appropriately for the market. Therefore, the Department recognizes that code-sharing, as well as long-term wet leases, can offer significant economic benefits.

Although code-sharing and wet-lease arrangements can offer significant consumer benefits, they can also be misleading unless consumers know that the transportation they are considering for purchase will not be provided by the airline whose designator code is shown on the ticket and unless they know the identity of the airline on which they will be flying. The growth in the use of code-sharing, wet-leasing and similar marketing tools, particularly in international air transportation, had given the Department concern about whether the then-current disclosure rules (14 CFR 399.88) protected the public interest adequately.

Affected Public: All U.S. air carriers, foreign air carriers, computer reservations systems (CRSs), travel agents doing business in the United States, and the traveling public.

Respondents: U.S. air carriers, foreign air carriers, ticket agents (including travel agents), and the traveling public.

Estimated Number of Respondents: 33,898 excluding travelers.

Estimated Number of Responses per Respondent: An average of 3,009 phone calls of 15 seconds duration (unweighted average) based on 102 million phone calls and 33,898 respondents.

Estimated Total Annual Burden on Respondents: Annual reporting burden for this data collection is estimated at 424,994 hours for all travel agents and airline ticket agents and 424,994 hours for air travelers based on 15 seconds per phone call and an average of 2.1 phone calls per trip.

Most of this data collection (third party notification) is accomplished through highly automated computerized systems.

Comments are invited on: (a) Whether this collection of information (third party notification) is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on the respondents, including through the use of automated techniques or other forms of information technology.

Issued in Washington, DC, on June 4, 2002.

Randall D. Bennett,

Director, Office of Aviation Analysis.