02-23614. Amendment to the Definitions of Revenue and Nonrevenue Passengers

AGENCY:

Office of the Secretary, DOT.

ACTION:

Final rule.

SUMMARY:

The Office of the Secretary and the Bureau of Transportation Statistics (BTS) are revising the Department's definitions of revenue passenger and nonrevenue passenger to specify that a passenger traveling on a ticket or voucher received as compensation for denied boarding or as settlement of a consumer complaint is considered to be a revenue passenger. The revised definitions will also be added to other regulatory provisions. Based on this final rule, the definitions will be in harmony with the definitions of revenue and nonrevenue passenger adopted by the International Civil Aviation Organization (ICAO). Harmonizing DOT's and ICAO's definitions will relieve air carriers from being required to keep two sets of traffic enplanement statistics—one for reporting to ICAO and one for reporting to DOT. This action is taken at DOT's initiative.

DATES:

This rule is effective October 18, 2002.

FOR FURTHER INFORMATION CONTACT:

Clay Moritz or Bernard Stankus, Office of Airline Information, K-14, Bureau of Transportation Statistics, Department of Transportation, Room 4125, 400 Seventh Street, SW., Washington, DC, 20590-0001, [phone] or [phone], respectively. You can also contact either party by e-mail at [e-mail] or [e-mail] or by fax at [phone].

SUPPLEMENTARY INFORMATION:

Electronic Access

An electronic copy of this document may be downloaded by using a computer, modem, and suitable communications software from the Government Printing Office's Electronic Bulletin Board Services at [phone]. Internet users may reach the Office of the Federal Register's home page at: http://www.nara.gov/​fedreg and the Government Printing Office's database at: http://www.access.gpo.gov/​nara. You can also view and download this document by going to the webpage of the Department's Docket Management System (http://dms.dot.gov/​). On that page, click on “search.” On the next page, type the last four digits of the docket number shown in the heading of this document. Then click on “search.”

Background

On August 22, 2000, the Department issued a Notice of Proposed Rulemaking (NPRM) (65 FR 50946) to revise the definitions of revenue and nonrevenue passenger in 14 CFR 217.1, 241.03, and 298.2. The Department proposed to classify as revenue passengers those passengers, traveling on a ticket or voucher received as compensation for denied boarding or as settlement of a consumer complaint. Previously, these passengers were classified as nonrevenue passengers.

The proposals were intended to harmonize the Department's definitions of revenue and nonrevenue passengers with the definitions adopted by the International Civil Aviation Organization (ICAO). The proposed change in the Department's definitions would negate the need for carriers to maintain two sets of statistics to record passenger enplanements. This rule is being issued jointly by the Office of the Secretary and BTS.

Public Comments

Comments were received from American Airlines, United Air Lines, and Southwest Airlines. The three carriers support the Department's action to harmonize its definitions of revenue and nonrevenue passengers with ICAO's definitions. Southwest believes that common reporting guidelines will benefit airlines by allowing for greater reporting accuracy and efficiency.

However, the carriers did express concerns that the revision in the definitions could have the unintended consequence of subjecting more passengers to Passenger Facility Charges (PFCs). American Airlines points out that although a passenger may now be defined as a revenue passenger that passenger has paid no additional amounts. United Air Lines requests that the Department clarify that the change in definitions does not impact or expand the collection of PFCs by either making a statement to this effect or revising 14 CFR 158.9(a)(3).

DOT agrees with the air carriers. The sole purpose of the revisions in the definitions of revenue and nonrevenue passengers is to harmonize the classifications of passenger enplanements between the Department and ICAO. Thus, the changes adopted in this final rule are for air carrier traffic and financial reporting purposes and are not meant to expand the universe of passengers required to pay PFCs.

Revenue Passengers

The following types of passengers are examples of revenue passengers: (1) Passengers traveling on publicly available tickets; (2) passengers traveling on frequent flyer awards; (3) passengers traveling on barter tickets; (4) infants traveling on confirmed-space tickets; (5) passengers traveling on vouchers as compensation for denied boarding or passengers traveling free in response to consumer complaints or claims; and (6) passengers traveling on preferential fares (Government, seamen, military, youth, student, etc.). This list is not exhaustive and is provided for illustrative purposes only.

Nonrevenue Passengers

The following types of passengers are examples of nonrevenue passengers when traveling free or pursuant to token charges: (1) Directors, officers, employees, and others authorized by the air carrier operating the aircraft; (2) directors, officers, employees, and others authorized by the air carrier or another air carrier traveling pursuant to a pass interchange agreement; (3) travel agents being transported for the purpose of familiarizing themselves with the carrier's services; (4) witnesses and attorneys attending any legal investigation in which such carrier is involved; (5) persons injured in aircraft accidents, and physicians, nurses, and others attending such persons; (6) any persons transported with the object of providing relief in cases of general epidemic, natural disaster, or other catastrophe; (7) any law enforcement official, including any person who has the duty of guarding government officials who are traveling on official business or traveling to or from such duty; (8) guests of an air carrier on an inaugural flight or delivery flights of newly-acquired or renovated aircraft; (9) security guards who have been assigned the duty to guard such aircraft against unlawful seizure, sabotage, or other unlawful interference; (10) safety inspectors of the National Transportation Safety Board or the FAA in their official duties or traveling to or from such duty; (11) postal employees on duty in charge of the mails or traveling to or from such duty; (12) technical representatives of companies that have been engaged in the manufacture, development or testing of a particular type of aircraft or aircraft equipment, when the transportation is provided for the purpose of in-flight observation and subject to applicable FAA regulations; (13) persons engaged in promoting air transportation; (14) air marshals and other Transportation Security officials acting in their official capacities and while traveling to and from their official duties; and (15) other authorized persons, when such transportation is undertaken for promotional purpose. This list is not exhaustive and is provided for illustrative purposes only.

Reporting Burden

DOT believes that this final rule is not a revision to an information collection for the purposes of the Paperwork Reduction Act. It is not adding or removing any data items. Rather, it is changing definitions to simplify carrier reporting and preclude the need for affected air carriers to maintain two separate systems for identifying revenue and nonrevenue passengers for DOT and ICAO reporting. Under Article 67 of the 1944 Chicago Convention, the United States, as a party to the treaty, is obligated to supply certain individual U.S. air carrier data to ICAO. By harmonizing DOT's definitions of revenue and nonrevenue passengers with ICAO's definitions, DOT will be able to supply ICAO with U.S. air carrier data from DOT's own data base. U.S. carriers will not be required to submit special traffic reports in order to meet this U.S. treaty obligation. Some carriers may, however, have a one-time reprogramming task to classify, as revenue passengers, those passengers traveling on vouchers or tickets received in response to consumer complaints or as compensation for denied boardings.

In the NPRM, DOT specifically sought comments from any carrier that believed it would experience a reporting burden as a result of the change in the definitions of revenue and nonrevenue passengers. DOT did not receive any comments on this issue.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

DOT does not consider this final rule to be a significant regulatory action under section 3(f) of Executive Order 12866. It was not subject to review by the Office of Management and Budget.

DOT does not consider the final rule to be significant under its regulatory policies and procedures (44 FR 11034; February 26, 1979). The purpose of the rule is to revise the Department's definitions of revenue passenger and nonrevenue passenger. This action will negate the need for air carriers to keep two sets of traffic records. Presently, air carriers maintain one set of records for tracking revenue passengers for DOT reporting purposes, and a set of records for ICAO reporting. Therefore, this action will result in a positive economic impact on reporting air carriers.

Federalism

DOT analyzed this final rule in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”) and the rule will not have a substantial direct effect on the states, on the relationship between the national government and states, or on the distribution of power and responsibilities among the various levels of government. The rule does not impose substantial direct compliance costs on State and local governments or preempt state law. Thus, the BTS has determined that the rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

Regulatory Flexibility Act

We certify this final rule will not have a significant economic impact on a substantial number of small entities, as the total cost of the rulemaking is insignificant, although there should be a minor cost savings in harmonizing the definition of revenue passenger. There are about 100 small air carriers that report traffic data to DOT. However, the rule's most significant change is the treatment of passengers traveling on a ticket or voucher received as compensation for denied boarding. The denied boarding regulations are not applicable to small air carriers. Therefore, the final rule does not have a significant impact on small air carriers.

Unfunded Mandates

Under section 201 of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1531), DOT assessed the effects of this final rule on State, local and tribal governments, in the aggregate, and the private sector. DOT determined that this regulatory action requires no written statement under section 202 of the UMRA (2 U.S.C. 1532) because it will not result in the expenditure of $100,000,000 in any one year by State, local and tribal governments, in the aggregate, or the private sector.

National Environmental Protection Act

The DOT has analyzed the final rule for the purpose of the National Environmental Protection Act, and has determined that the changes will not have any impact on the quality of the human environment.

Regulation Identifier Number

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number 2139-AA07 contained in the heading of this document can be used to cross reference this action with the Unified Agenda.

List of Subjects

14 CFR Part 217

• Foreign air carriers
• Traffic reports

14 CFR Part 241

• Air carriers
• Reporting and recordkeeping requirements
• Uniform System of accounts

14 CFR Part 298

• Air taxis
• Commuter and small certificated air carriers
• Reporting and recordkeeping requirements

Accordingly, the Office of Secretary amends 14 CFR parts 217, 241 and 298 as follows:

PART 217—[AMENDED]

1. The authority citation for part 217 continues to read as follows:

Authority: 49 U.S.C. 329 and chapters 401, 413, 417.

2. Definitions for revenue passenger and nonrevenue passenger are added in alphabetical order to § 217.1 to read as follows:

§ 217.1

Definitions.

* * * * *

Nonrevenue passenger means: a person traveling free or under token charges, except those expressly named in the definition of revenue passenger; a person traveling at a fare or discount available only to employees or authorized persons of air carriers or their agents or only for travel on the business of the carriers; and an infant who does not occupy a seat. (This definition is for 14 CFR Part 217 traffic reporting purposes and may differ from the definitions used in other parts by the Federal Aviation Administration and the Transportation Security Administration for the collection of Passenger Facility Charges and Security Fees.)

The definition includes, but is not limited to the following examples of passengers when traveling free or pursuant to token charges:

(1) Directors, officers, employees, and others authorized by the air carrier operating the aircraft;

(2) Directors, officers, employees, and others authorized by the air carrier or another carrier traveling pursuant to a pass interchange agreement;

(3) Travel agents being transported for the purpose of familiarizing themselves with the carrier's services;

(4) Witnesses and attorneys attending any legal investigation in which such carrier is involved;

(5) Persons injured in aircraft accidents, and physicians, nurses, and others attending such persons;

(6) Any persons transported with the object of providing relief in cases of general epidemic, natural disaster, or other catastrophe;

(7) Any law enforcement official, including any person who has the duty of guarding government officials who are traveling on official business or traveling to or from such duty;

(8) Guests of an air carrier on an inaugural flight or delivery flights of newly-acquired or renovated aircraft;

(9) Security guards who have been assigned the duty to guard such aircraft against unlawful seizure, sabotage, or other unlawful interference;

(10) Safety inspectors of the National Transportation Safety Board or the FAA in their official duties or traveling to or from such duty;

(11) Postal employees on duty in charge of the mails or traveling to or from such duty;

(12) Technical representatives of companies that have been engaged in the manufacture, development or testing of a particular type of aircraft or aircraft equipment, when the transportation is provided for the purpose of in-flight observation and subject to applicable FAA regulations;

(13) Persons engaged in promoting air transportation;

(14) Air marshals and other Transportation Security officials acting in their official capacities and while traveling to and from their official duties; and

(15) Other authorized persons, when such transportation is undertaken for promotional purpose.

Revenue passenger means: a passenger for whose transportation an air carrier receives commercial remuneration. (This definition is for 14 CFR Part 217 traffic reporting purposes and may differ from the definitions used in other parts by the Federal Aviation Administration and the Transportation Security Administration for the collection of Passenger Facility Charges and Security Fees.) This includes, but is not limited to, the following examples:

(1) Passengers traveling under publicly available tickets including promotional offers (for example two-for-one) or loyalty programs (for example, redemption of frequent flyer points);

(2) Passengers traveling on vouchers or tickets issued as compensation for denied boarding or in response to consumer complaints or claims;

(3) Passengers traveling at corporate discounts;

(4) Passengers traveling on preferential fares (Government, seamen, military, youth, student, etc.);

(5) Passengers traveling on barter tickets; and

(6) Infants traveling on confirmed-space tickets.

* * * * *

PART 241—[AMENDED]

3. The authority citation for part 241 continues to read as follows:

Authority: 49 U.S.C. 329 and chapters 401, 411, 417.

4. The definitions in part 241 Section 03 for passenger, nonrevenue and passenger, revenue are revised to read as follows:

Section 03—Definitions for the Purposes of This System of Accounts and Reports

* * * * *

Passenger, nonrevenue means: a person traveling free or under token charges, except those expressly named in the definition of revenue passenger; a person traveling at a fare or discount available only to employees or authorized persons of air carriers or their agents or only for travel on the business of the carriers; and an infant who does not occupy a seat. (This definition is for 14 CFR part 241 traffic reporting purposes and may differ from the definitions used in other parts by the Federal Aviation Administration and the Transportation Security Administration for the collection of Passenger Facility Charges and Security Fees.)

The definition includes, but is not limited to following examples of passengers when traveling free or pursuant to token charges:

(1) Directors, officers, employees, and others authorized by the air carrier operating the aircraft;

(2) Directors, officers, employees, and others authorized by the air carrier or another carrier traveling pursuant to a pass interchange agreement;

(3) Travel agents being transported for the purpose of familiarizing themselves with the carrier's services;

(4) Witnesses and attorneys attending any legal investigation in which such carrier is involved;

(5) Persons injured in aircraft accidents, and physicians, nurses, and others attending such persons;

(6) Any persons transported with the object of providing relief in cases of general epidemic, natural disaster, or other catastrophe;

(7) Any law enforcement official, including any person who has the duty of guarding government officials who are traveling on official business or traveling to or from such duty;

(8) Guests of an air carrier on an inaugural flight or delivery flights of newly-acquired or renovated aircraft;

(9) Security guards who have been assigned the duty to guard such aircraft against unlawful seizure, sabotage, or other unlawful interference;

(10) Safety inspectors of the National Transportation Safety Board or the FAA in their official duties or traveling to or from such duty;

(11) Postal employees on duty in charge of the mails or traveling to or from such duty;

(12) Technical representatives of companies that have been engaged in the manufacture, development or testing of a particular type of aircraft or aircraft equipment, when the transportation is provided for the purpose of in-flight observation and subject to applicable FAA regulations;

(13) Persons engaged in promoting air transportation;

(14) Air marshals and other Transportation Security officials acting in their official capacities and while traveling to and from their official duties; and

(15) Other authorized persons, when such transportation is undertaken for promotional purpose.

Passenger, revenue: means a passenger for whose transportation an air carrier receives commercial remuneration. (This definition is for 14 CFR part 241 traffic reporting purposes and may differ from the definitions used in other parts by the Federal Aviation Administration and the Transportation Security Administration for the collection of Passenger Facility Charges and Security Fees.) This includes, but is not limited to, the following examples:

(1) Passengers traveling under publicly available tickets including promotional offers (for example two-for-one) or loyalty programs (for example, redemption of frequent flyer points);

(2) Passengers traveling on vouchers or tickets issued as compensation for denied boarding or in response to consumer complaints or claims;

(3) Passengers traveling at corporate discounts;

(4) Passengers traveling on preferential fares (Government, seamen, military, youth, student, etc.);

(5) Passengers traveling on barter tickets; and

(6) Infants traveling on confirmed-space tickets.

* * * * *

5. Part 241 Sec. 19-7 is amended by removing the term revenue passenger from Section X, “GLOSSARY OF TERMS” in Appendix A to Sec. 19-7—Instructions to Air Carriers for Collecting and Reporting Passenger Origin-Destination Survey Statistics.

PART 298—[AMENDED]

6. The authority citation for part 298 is revised to read as follows:

Authority: 49 U.S.C. 329 and chapters 401, 411, 417.

7. The paragraph designations are removed, the definition of ton is transferred to correct alphabetical order, and definitions for Nonrevenue passenger and Revenue passenger are added in alphabetical order to § 298.2 to read as follows:

§ 298.2

Definitions.

* * * * *

Nonrevenue passenger means a person traveling free or under token charges, except those expressly named in the definition of revenue passenger; a person traveling at a fare or discount available only to employees or authorized persons of air carriers or their agents or only for travel on the business of the carriers; and an infant who does not occupy a seat. (This definition is for 14 CFR part 298 traffic reporting purposes and may differ from the definitions used in other parts by the Federal Aviation Administration and the Transportation Security Administration for the collection of Passenger Facility Charges and Security Fees.) The definition includes, but is not limited to, the following examples of passengers when traveling free or pursuant to token charges:

(1) Directors, officers, employees, and others authorized by the air carrier operating the aircraft;

(2) Directors, officers, employees, and others authorized by the air carrier or another carrier traveling pursuant to a pass interchange agreement;

(3) Travel agents being transported for the purpose of familiarizing themselves with the carrier's services;

(4) Witnesses and attorneys attending any legal investigation in which such carrier is involved;

(5) Persons injured in aircraft accidents, and physicians, nurses, and others attending such persons;

(6) Any persons transported with the object of providing relief in cases of general epidemic, natural disaster, or other catastrophe;

(7) Any law enforcement official, including any person who has the duty of guarding government officials who are traveling on official business or traveling to or from such duty;

(8) Guests of an air carrier on an inaugural flight or delivery flights of newly-acquired or renovated aircraft;

(9) Security guards who have been assigned the duty to guard such aircraft against unlawful seizure, sabotage, or other unlawful interference;

(10) Safety inspectors of the National Transportation Safety Board or the FAA in their official duties or traveling to or from such duty;

(11) Postal employees on duty in charge of the mails or traveling to or from such duty;

(12) Technical representatives of companies that have been engaged in the manufacture, development or testing of a particular type of aircraft or aircraft equipment, when the transportation is provided for the purpose of in-flight observation and subject to applicable FAA regulations;

(13) Persons engaged in promoting air transportation;

(14) Air marshals and other Transportation Security officials acting in their official capacities and while traveling to and from their official duties; and

(15) Other authorized persons, when such transportation is undertaken for promotional purpose.

* * * * *

Revenue passenger means a passenger for whose transportation an air carrier receives commercial remuneration. (This definition is for 14 CFR part 298 traffic reporting purposes and may differ from the definitions used in other parts by the Federal Aviation Administration and the Transportation Security Administration for the collection of Passenger Facility Charges and Security Fees.) This includes, but is not limited to, the following examples:

(1) Passengers traveling under publicly available tickets including promotional offers (for example two-for-one) or loyalty programs (for example, redemption of frequent flyer points);

(2) Passengers traveling on vouchers or tickets issued as compensation for denied boarding or in response to consumer complaints or claims;

(3) Passengers traveling at corporate discounts;

(4) Passengers traveling on preferential fares (Government, seamen, military, youth, student, etc.);

(5) Passengers traveling on barter tickets; and

(6) Infants traveling on confirmed-space tickets.

* * * * *

Issued in Washington, DC on September 10, 2002.

Read C. Van de Water,

Assistant Secretary for Aviation and International Affairs, Office of the Secretary.

Ashish Sen,

Director, Bureau of Transportation Statistics.