[Federal Register Volume 59, Number 197 (Thursday, October 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25318]
[[Page Unknown]]
[Federal Register: October 13, 1994]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR, Parts 380, 381, 399
[Docket No. 49385; Notice 94-16]
RIN 2105-AC03
Special Event Tours
AGENCY: Office of the Secretary, DOT.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department seeks comment on a proposal to expand its rules
on Super Bowl tours to cover air tours to other types of special
events. These Super Bowl rules require that operators of Super Bowl
tours that are promoted as including game tickets must have those game
tickets in hand or under contract before they advertise or sell the
tours, and that they must refund the entire tour price to any customer
who does not receive a promised game ticket. This proposed rule would
also extend the charter rule's prohibition on last-minute price
increases to non-charter tours to special events. This initiative
arises as a result of problems on certain tours to the 1994 Rose Bowl
on which participants did not receive game tickets that were promoted
as being included in the package, or were required to make additional
payments in order to receive tickets.
DATES: Comments should be received by November 14, 1994. Late-filed
comments will be considered to the extent practicable.
ADDRESSES: Comments should be sent to Docket Clerk/C-55, Docket No.
49385, Room 4107, Department of Transportation, 400 Seventh Street SW.,
Washington, DC 20590. For the convenience of persons who will be
reviewing the docket, it is requested that commenters provide an
original and three copies of their comments. Comments will be available
for inspection at this address Monday through Friday from 9 a.m.
through 5 p.m. Commenters who wish the receipt of their comments to be
acknowledged should include a stamped, self-addressed postcard with
their comments. The docket clerk will date-stamp the postcard and mail
it to the commenter.
FOR FURTHER INFORMATION CONTACT: Tim Kelly, Consumer Affairs Division/
I-25, Office of the Secretary, Room 10405, Department of
Transportation, 400 Seventh Street SW., Washington, DC 20590. Telephone
(202) 366-5952.
SUPPLEMENTARY INFORMATION: In conjunction with the Rose Bowl football
game that was played in Pasadena, California on January 1, 1994, a
large number of fans of the University of Wisconsin (one of the two
teams participating in the game) purchased package tours to California.
Many of those tours were promoted as including a ticket to the Rose
Bowl game. However, a significant number of these individuals either
did not receive the game tickets that they had been promised and did
not gain admission to the game, or were required to make an additional
payment after they arrived in Pasadena in order to obtain their
tickets. The Department is seeking comment on a proposal to extend its
rules on Super Bowl tours to include air tours to other types of
special events where admission to the event is advertised as being
included in the package.
The Department's rules on Super Bowl charters are contained in
title 14, part 380 of the Code of Federal Regulations (14 CFR part
380):
Section 380.2 defines a Super Bowl charter as a charter
flight that is represented by its charter operator as including tickets
to the National Football League's Super Bowl game as part of its ground
package.
Section 380.18a states that a Super Bowl charter may not
be advertised unless the operator has submitted verification to the
Department\1\ that the operator (1) is in physical possession of enough
Super Bowl game tickets to provide them for a substantial number of
seats on the charter, or (2) has a contract with the NFL or with an NFL
team for such a number of game tickets, or (3) has a contract with
another person who has a contract with the NFL or an NFL team for such
a number of game tickets.
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\1\References to ``the Board'' in Part 380 refers to the Civil
Aeronautics Board, the Department's predecessor in aviation economic
and consumer matters. The Department of Transportation now
administers this rule as authorized by the Civil Aeronautics Board
Sunset Act of 1984 (P.L. 98-443; 98 Stat. 1703).
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Section 380.18a also states that a Super Bowl charter may
not be sold unless the operator has submitted verification to the
Department that the operator has possession of, or contracts for,
enough game tickets to provide one to every person who is to receive
one under the terms of the operator/participant contract for the
charter.
Section 380.31(c) states that if an operator receives a
booking for which he or she does not have possession of or a contract
for a game ticket, the operator must return that participant's money
within 3 days, unless the participant has authorized the operator in
writing to retain the payment while the operator seeks additional
tickets.
Sections 380.32(s), 380.33(a)(5) and 380.33(e) state that
if Super Bowl game tickets are not supplied when promised, the affected
participant must be sent a refund of the price of the entire charter
package within 14 days after the return flight.
These rules came about following problems with game tickets for
Super Bowl tours in the late 1970's (see 45 FR 1856, January 9, 1980).
The rules were limited to the Super Bowl because that was the only
event where such problems had surfaced.
In addition to the Super Bowl rules in Part 380, the Department has
a policy statement at 14 CFR 399.87 which states that it shall be an
unfair or deceptive practice within the meaning of section 411 of the
Federal Aviation Act (now 49 U.S.C. 41712) to advertise or sell an air
tour that is promoted as including a ticket to the Super Bowl game
unless the operator has tickets or contracts for tickets in the manner
described in 14 CFR 380.18a (see above). The principal purpose of this
policy statement is to reach tours operated on scheduled air service,
which are not covered by the part 380 charter rules. The part 399
policy statement mirrors Sec. 380.18a, but does not include the other
part 380 provisions described above. Most importantly, it does not
include the requirement that the entire tour price be refunded if a
game ticket is not provided.
On January 27, 1994, the Department issued an Advance Notice of
Proposed Rulemaking in this proceeding (published February 1, 1994; 59
FR 4614). In this notice, we stated that we were tentatively proposing
to issue a new rule that would contain the procedures of the Super Bowl
provisions of both part 380and part 399, and to extend this rule to
other types of events. Like current Sec. 399.87, the new rule would
apply to tours on all forms of air transportation, not just charters.
Like the existing Super Bowl charter rules in part 380, the new
regulation would require the tour operator to refund the entire tour
price to any participant who does not receive a promised event ticket,
even if the tour were not on a charter. The proposed rule would also
pick up the procedures of Sec. 380.31(c) of the charter rule, which
requires an operator to refund any money received for a booking within
3 days if the operator has no contract for an event ticket for that
person, unless the person has authorized the operator in writing to
retain the payment while the operator seeks a ticket.
In addition to setting out the Department's tentative rulemaking
proposal, the January ANPRM asked commenters to address a number of
questions about the types of issues that such a rule should apply to.
The discussion of the comments that appears below is organized
according to those questions.
Comments
The Department received comments from 11 organizations and 7
individuals. The great majority of the comments favored adoption of a
rule in this area.
Q. Should the rule apply only to major sports events which would be
listed in the rule (for example, the Super Bowl, college bowl games,
the NCAA Final Four, the World Cup finals, the Olympics)? To any sports
event? To religious events (for instance, the Passion Play in
Oberammergau)? To any event?
Several of the comments discussed only sports events as the context
for the rule. The National Collegiate Athletic Association (NCAA)
recommended applying the rule to the Division I Final Four men's and
women's basketball championships, the College World Series, and post-
season college football bowl games. The Football Bowl Association
(FBA), an organization representing all 19 post-season college football
bowl games, also felt that all post-season football bowl games should
be covered, and stated that it offered no comment on whether other
events should or should not be covered. The National Hockey League
(NHL) commented that the rule should apply to all major professional
and amateur sports events. Ms. Sara Shea said that the Super Bowl rule
should be expanded to include other special sporting events.
The Wisconsin Attorney General stated that the rule should not be
limited to specifically named events, but perhaps could be limited to
``competitive events'' where participants and locations are determined
close to the date of the event. He said that for non-competitive events
such as the Passion Play in Oberammergau, the dates, locations and
participants are known well in advance and existing consumer
protections should be adequate.
Other commenters stated that the rule should not be limited to
sports events. The American Society of Travel Agents (ASTA) said that
it should apply to all events where a separately-purchased ticket is
necessary for admission to the event. The RG Travel Companies, which
were involved in sending 1,700 Wisconsin fans to the 1994 Rose Bowl,
stated that the rule should cover any special event ``where a good
possibility exists that the demand for tickets will exceed the supply *
* *'' In a similar vein, the Pasadena Tournament of Roses commented
that the rule should apply to any event with limited admission. The
National Tour Association (NTA, representing motor coach tour
operators) and Congressman Robert Andrews of New Jersey expressed the
opinion that the rule should not be limited to sports events. Ms.
Arlene Caldwell said that the rule should cover any tour that claims to
include a ticket to the event, and Mr. Donald Hamilton stated that it
should apply to any event for which tour packages are sold.
Q. Should the rule apply to both charter and scheduled
transportation?
All of the commenters that expressed an opinion on this point felt
that the rule should apply to both scheduled and charter air
transportation. Those commenters were the RG Travel Companies, NACA,
the NHL, ASTA, the NCAA, FBA, the Pasadena Tournament of Roses, and the
Wisconsin Attorney General.
Q. Should the rule contain only the advertising and sale
restrictions of Secs. 380.18a and 399.87 (of the current Super Bowl
rule), or should it also contain the ``money back guarantee'' of
Secs. 380.32 and 380.33 and/or the ``booking rejection'' and
``contingent booking'' procedures of Sec. 380.31(c)?
Sections 380.18a and 399.87 prohibit advertising or sale of a
``Super Bowl tour'' (defined as one which is held out as including a
ticket to the Super Bowl game) until the operator has physical
possession of game tickets or has a contract with the National Football
League, with an NFL team, or with another person who has a contract
with the league or a team. Sections 380.32 and 380.33 state that any
participant on a Super Bowl tour who does not receive promised game
tickets must be given a refund of the entire tour price, even if a
portion of the services are used. Section 380.31(c) provides that if an
operator receives a booking for which he or she does not have
possession of or a contract for a game ticket, the operator must return
that participant's money within 3 days, unless the participant has
authorized the operator in writing to retain the payment while the
operator seeks additional tickets.
Except for NTA, all commenters that expressed a position on this
question felt that some form of regulation along these lines was
appropriate. NTA stated that the majority of its members that responded
to a poll on this matter felt that regulation of special-event tours
should not be a responsibility of the government, but the association
said that in the event a rule is adopted it favors the ``booking
rejection'' and''contingent booking'' procedures of Sec. 380.31(c).
ASTA and the Wisconsin Attorney General also expressed support for
the ``booking rejection'' and ``contingent booking'' procedures. They
favored the ``money back guarantee'' as well, as did the RG Travel
Companies, the National Air Carrier Association (NACA, an organization
of charter airlines), the NHL, NCAA, FBA, and Pasadena Tournament of
Roses. The Tournament of Roses stated that this guarantee should apply
``at any time prior to departure'' if it is clear tickets will not be
forthcoming. FBA commented ``the greater the remedy available, the less
likely that tour packagers will create the problem by promoting
packages that may not be legitimate.''
NACA said that there should be an exception to the ``money back
guarantee'' for situations of force majeure and acts of God, such as
the earthquake in San Francisco that forced postponement of the World
Series. Similarly, the NHL stated that if the event is canceled or
substantially altered after the tour begins, consumers should be
entitled only to a refund of the face value of the event ticket, but
that if such cancellation or alteration takes place before departure,
the operator should be required to inform the consumers, who would have
the right to cancel (presumably with a full refund).
Congressman Andrews was also in favor of the ``money back
guarantee,'' as well as a requirement for tour operators to disclose
whether event tickets are guaranteed or tentative. However, he stated
that any rule that would totally prohibit marketing of a special-event
tour until the tour operator has event tickets in hand would not be
practical. Tickets for many such events are not available until less
than two weeks before the event, he pointed out, but other arrangements
(e.g., air and hotel) must be made before that. NTA, the NCAA and the
Wisconsin Attorney General stated that the current restrictions against
marketing Super Bowl tours until the operator has game tickets in hand
or under contract should be included in the new rule.
Q. If the scope of the type of event covered by the rule is broad,
and the rule contains the ``money back guarantee,'' should procedures
be included that would protect the operator from having to refund the
entire tour price if a participant doesn't receive promised admission
to something like a welcoming cocktail party?
No commenters spoke in favor of a requirement to apply the ``money
back guarantee'' to events such as a welcoming cocktail party. Of those
who commented on the issue, NTA, the NHL, ASTA, the Pasadena Tournament
of Roses said that operators should not be required to refund the
entire tour price over failure to provide something like a promised
welcoming cocktail party. NACA and the Wisconsin Attorney General
stated that the rule should require the value of undelivered ancillary
events to be refunded, but should not require a refund of the entire
tour price. FBA and the Wisconsin Attorney General both pointed out
that certain events on a special event tour (e.g., the Tournament of
Roses parade on a Rose Bowl tour) are integral to the experience for
which the tour was organized while other events on the same tour (e.g.,
a side trip to Disneyland) are not. These two commenters suggest that
integral events be protected by the'' money back guarantee'' of the
total tour price, but not other events.
Q. Should the rule specifically ban last-minute or post-departure
price increases for admission to the event, one of the problems that
allegedly occurred on the 1994 Rose Bowl tours?
All commenters who offered an opinion on this subject felt that
last-minute price increases should be regulated in some manner. The RG
Travel Companies, NACA, the NCAA, ASTA, the Wisconsin Attorney General
and Mr. Donald Hamilton stated that last-minute price increases should
be banned. FBA and the Pasadena Tournament of Roses said that price
increases at any time following purchase should be prohibited unless
the consumer receives written notice that the operator reserves this
right. The Pasadena Tournament of Roses also suggested that
participants who cancel within a few days of notification of a price
increase be entitled to a full refund. The Wisconsin Attorney General
commented that on tours to special events, ``last-minute or post-
departure price increases are common and are tantamount to extortion''
because other options may be sold out.
The NHL stated that, in general, price increases should be banned
unless the face value of the ticket has been increased subsequent to
departure of the tour. However, for events with short lead times such
as the Stanley Cup playoffs, the NHL said that the rule should permit
tours on which participants are required to agree to purchase event
tickets at the yet-unknown face price plus a service fee, as long as
the consumer is given prominent notice of this fact.
Q. Some tours are promoted in conjunction with a special event, but
do not include, and do not represent that they include, admission to
the event. For example, there have been tours to the Super Bowl host
city during the Super Bowl weekend that prominently feature ``Super
Bowl'' in the headline of advertisements and flyers, but which do not
include game tickets. Should the new rule ban this practice, or require
affirmative, prominent disclosure that admission to the event is not
included?
All of the commenters that expressed an opinion on this issue felt
that it should be regulated in some manner. The RG Travel Companies
stated that they favored either banning the practice or requiring
disclosure. The NCAA urged affirmative, prominent disclosure, ``if such
tours are to be allowed at all.'' All others who commented on this
point (the NHL, ASTA, FBA, the Pasadena Tournament of Roses, and the
Wisconsin Attorney General) recommended prominent disclosure. The NHL
suggested a requirement that text disclosing the absence of event
tickets from event-oriented tours should be at least 75 percent of the
size of the name of the event in advertising material. The Pasadena
Tournament of Roses said that such disclosures should be at least twice
the size of the smallest text elsewhere in the ad or flyer, but in no
case less than 12-point type, and that disclosure during verbal
contacts should also be required.
Q. What would be the economic burdens of such a rule? Would the
rule be impractical for events where the participants are known only a
week in advance, e.g. the NCAA Final Four?
All of the parties that commented on this issue agreed that the
rule can and should apply to events in which the participants are not
known until shortly before the event. The RG Travel Companies commented
that the rule would not be impractical because commitments centering
around a particular team could be made contingent on that team
qualifying for the event. NACA said the ``money back guarantee'' should
apply regardless of the timing of the event. The NHL stated that the
rule may be burdensome for organizers of short-lead-time tours, but
that this is justified by the benefit to consumers. (Note also the
NHL's earlier suggestion that on events where the participants become
known only shortly beforehand, the rule should permit tours in which
the participants must agree to purchase an event ticket whose face
value is not yet known.)
ASTA, like NACA, said that the degree of advance notice is not
relevant, and that an operator who markets an event-oriented tour
before the participants are known should simply disclose that event
tickets are not included in the advertised price. FBA commented that
participating teams in college bowl games are generally known at least
a month in advance, and also that any experience the Department has had
with Super Bowl tours would be instructive, as the competing teams in
that game are sometimes determined only a week before the game.
The Pasadena Tournament of Roses, the NCAA and the Wisconsin
Attorney General all pointed out that even though the participating
teams in the NCAA Final Four (the example in this question) are
determined only the weekend before, the tickets are sold out months
beforehand. Thus, the fact that the participants are not known until
the final week has minimal impact on the availability of tickets and
the feasibility of tours. The Pasadena Tournament of Roses asserted
that any economic burden resulting from this rule would fall on ticket
brokers and tour operators who buy event tickets from individuals in
order to resell them. The Wisconsin Attorney General stated that
consumer protection may be even more important in cases where event
participants are determined at the last minute, because consumers have
less time to investigate their options.
Other Comments
The Air Transport Association (ATA, an association of large
scheduled airlines) filed a comment stating that it expressed no
opinion about whether, or to what extent, the current Super Bowl rules
should be made applicable to tours to other special events. However,
ATA said that DOT should not make air carriers responsible for assuring
that tour operators comply with the new rule. NACA echoed this view,
stating that carriers should not be made the guarantors of tour
operators.
Discussion
We have decided to propose a rule very similar to that described in
the ANPRM, which in turn closely tracks the existing rules for Super
Bowl tours.
The rule that we are proposing would apply to any tour that is
organized for the purpose of attending a sporting, social, religious,
educational, cultural, political or other event of a special nature and
limited duration, which exists for reasons apart from the tour itself,
and which is represented by the operator of the tour as including
admission to that event. The Department does not wish to engage in
line-drawing ofthe type that would be required were we to publish a
list of specific events that would be covered by the rule. In addition,
we see no justification for limiting the applicability of the rule to
sporting events. Few commenters specifically suggested such a
limitation, although a number of them offered sports contests as
examples of the type of event that should be covered. While the
Wisconsin Attorney General is of course correct when he comments that
the date and location of a non-competitive event such as the Passion
Play in Oberammergau is known well in advance, this in itself does not
lessen the likelihood of ticket shortages.
We agree with the comments that suggested that the rule should
apply to any event where a separate ticket is required for admission to
the event or where there is limited admission. The rule that we are
proposing will apply to any tour to an event of the type described at
the beginning of the previous paragraph in which the tour operator has
represented that the tour includes admission to the event. If the event
is free, or attendance is unlimited, the operator should have no
trouble furnishing tickets and this rule will impose no burden. On the
other hand, if tours are promoted to an unusually popular event of a
non-sporting nature, those tour participants would be just as
disappointed at not receiving the promised admission to the event that
constituted the entire purpose of their trip as would a fan traveling
to a bowl game.
We have tentatively concluded that the rule should apply to both
charter and scheduled air transportation, as well as to any other form
of air service meeting the statutory definition of ``air
transportation'' that may develop in the future. Thus, we are proposing
to apply it to ``scheduled, charter, and other air transportation.''
The proposed rule would apply to all interstate (i.e., domestic)\2\
air transportation, and to foreign (i.e., international) air
transportation originating at a point within the United States.
Applying the rule only to outbound international flights is consistent
with the approach taken in the existing Public Charter rule (see 14 CFR
380.23) and with the'' country of origin'' concept of regulation of
international air transportation. As a policy matter, the Department
has no interest in applying this rule to tours originating in foreign
countries whose participants are largely or exclusively foreign
citizens.
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\2\The statutory term ``overseas air transportation,'' which
referred to domestic transportation to or from U.S. territories or
possessions, was abolished in a recent recodification of
transportation laws. Such transportation is now included in the
definition of ``interstate air transportation,'' and consequently
would be covered by this proposed rule.
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The rule that we are proposing would apply to any operator of a
tour that meets the definition of a Special Event Tour, regardless of
whether that operator is a direct air carrier (i.e., an airline), an
indirect air carrier (e.g., a Public Charter operator), or a ticket
agent (e.g., a scheduled-service tour operator, including a travel
agent acting as a tour operator). The proposed rule would apply to both
U.S. and foreign entities that act as operators of Special Event Tours,
just as current Sec. 399.87 does.
With regard to the comments of ATA and NACA, the ANPRM did not
propose, and wedo not propose here, that this rule should include
provisions that obligate direct air carriers to assure that tour
operators comply with the rule. Except where an airline might choose to
directly operate a Special Event Tour (i.e., to become the tour
operator), a direct air carrier of a Special Event Tour will incur no
greater or lesser obligations under this rule than it has in its
capacity as a common carrier either certificated under 49 U.S.C. 41101
or holding a foreign air carrier permit issued under 49 U.S.C. 41301
(formerly sections 401 and 402 ofthe Federal Aviation Act).
As we suggested in the ANPRM, we are proposing to carry over the
provisions from the existing Super Bowl rule that prohibit advertising
or sale of such tours before game tickets are in hand or under
contract. In the rule we are proposing here, these provisions will be
expanded to apply to all special events. This approach was supported by
the comments, and involves no novel processes since the existing
procedures have been in place in the Super Bowl rule for 15 years.
In addition to the provision that prohibits advertising or sale of
a Super Bowl tour until game tickets are in hand or under contract, the
Super Bowl charter rule requires Super Bowl charter operators to
include in the prospect us that is required to be filed with the
Department for all Public Charters a certification that they have the
game tickets in hand or else a copy of the contract for the game
tickets. We do not propose to carry over this additional filing
requirement to the new rule. The underlying requirement to have the
tickets or ticket contracts before advertising or sales commence will
remain and is enforceable. The Super Bowl rules that apply to
scheduled-service tours have never required a filing of this type. Now
that regulation of this type of tour is being consolidated in a single
rule, we see no justification for having a filing requirement for
charter tours but not scheduled-service tours, nor do we see a need to
impose a new paperwork burden on scheduled-service tour operators. This
action is consistent with the Paperwork Reduction Act and with the
Department's proposal in Docket 48341 (57 FR 42864) to eliminate
unnecessary paperwork burdens on charters.
Congressman Andrews expressed concern that any rule that would
prohibit marketing of a tour until tickets are in hand would not be
practical, since tickets for many events are not available until a
couple of weeks in advance but other arrangements (e.g., air and hotel)
must be made before that. However, neither the existing nor proposed
rules requires that tickets be in hand before marketing is allowed; the
operator must simply have a written contract for the tickets.
The proposed rule also incorporates the so-called ``booking
rejection'' and ``contingent booking'' procedures currently found in
Sec. 380.31(c) of the Super Bowl charter rule, and expands them to
apply to all events and to all forms of air transportation. These
provisions require operators to return unsolicited bookings for which
they don't have event tickets unless a tour participant authorizes the
operator in writing to retain the participant's payment while the
operator attempts to obtain more event tickets. We are modifying this
slightly to allow for situations in which participants agree to take
the tour without an event ticket; the operator would be required to
obtain the participant's written acknowledgment of this understanding.
One of the key provisions of the Super Bowl charter rule is the
requirement for the operator to refund the total tour price to any
participant who does not receive a promised game ticket, even if the
participant uses all of the other tour features. The ANPRM tentatively
proposed to incorporate this provision in the new rule, but also asked
for comment on whether the rule should contain only the ``booking
rejection'' and ``contingent booking'' procedures without the ``money
back guarantee.'' However, the comments solidly supported the ``money
back guarantee,'' and we have incorporated it in the proposed rule. We
agree with the Football Bowl Association that strong consumer remedies
will also have the effect of deterring the promotion of non-legitimate
tour packages.
NACA commented that there should be an exception to the ``money
back guarantee'' for situations of force majeure and acts of God, such
as the earthquake in San Francisco that caused postponement of the
World Series. The NHL suggested that if the event is canceled or
substantially altered, participants should be entitled only to a refund
of the face value of the event, not the total tour price. It was never
our intent to make the tour operator the guarantor of the event itself.
The ``money back guarantee'' in the existing Super Bowl charter rule
kicks in ``if game tickets are not supplied.'' The rule we are
proposing here would require refunds ``. . . if promised admission to
the [event] is not furnished by the tour operator . . .'' These
provisions are directed toward potential problems with ticket
distribution, not with the event itself. If people who have tickets are
able to attend the event and Special Event Tour participants are shut
out because they don't have tickets, the ``money back guarantee''
applies. On the other hand, if nobody with a ticket can use it during
the period of the tour because the event itself was canceled or
postponed, the ``money back guarantee'' does not apply.
We wish to make it clear that we are talking only about problems
with the event itself, not about any or all problems that the tour
operator might view as beyond its control. Failure of a ticket broker
to deliver tickets to the tour operator does not invalidate the ``money
back guarantee.''
We agree with the NHL that if the event is canceled consumers
should receive a refund for the portion of their tour price that
applied to the event that they paid for but did not receive. However,
mandating such a partial refund in a situation where the event itself
did not take place and where there were no problems with ticket
distribution is beyond the scope of this proceeding. This is a matter
best dealt with in the context of contract law or other applicable
existing law.
The ANPRM solicited comment on whether the rule should include
procedures to protect the tour operator from having to refund the total
tour price to participants who don't receive promised admission to an
``event'' like a welcoming cocktail party. Most commenters who
addressed this issue were opposed to requiring a refund of the entire
tour price in these circumstances. Some suggested that participants so
affected simply be entitled to a refund of the value of that ancillary
event. Two commenters urged that a tour operator's failure to deliver
admission to ancillary events that are integral to the experience for
which the tour was organized (e.g., the Tournament of Roses parade on a
Rose Bowl tour) should entitle the participant to a refund of the total
tour price.
In raising this issue in the ANPRM, the Department had intended to
focus on the situation of a tour that would not normally be thought of
as a Special Event Tour but which held out admission to an ``event'' as
one of its features, e.g., a welcoming cocktail party on a 5-day
package to the Bahamas. If the definition of ``special event'' had been
broad, we were concerned that the rule might have the effect of
requiring refunds of the entire price on such tours after failure to
deliver a relatively minor and low-value component. The comments have
shed light on another issue: multiple ``events'' on a true Special
Event Tour.
We agree with the commenters that failure to deliver a relatively
minor feature should not result in a refund of the total tour price. We
also feel that this rule should be limited to tours that are organized
around an event, not to events that occur in the normal course of the
typical vacation tour. Accordingly, we have limited the scope of the
proposed rule in two ways. First, there will be a definition of
``Special Event Tour'' in proposed Sec. 381.5 which is broad yet
specific; it will limit the applicability of the rule to tours to
sporting, social, religious, educational, cultural, political or other
event of a special nature and limited duration, which exist for reasons
apart from the tour itself. Second, the ``money back guarantee'' in
proposed Sec. 381.11 will apply only to the primary event for which a
Special Event Tour is organized.
Limiting the ``money back guarantee'' to the primary event on the
tour will solve the problem of having this guarantee cover minor events
on a true Special Event Tour. However, it will also have the effect of
excluding some more significant events such as the Tournament of Roses
parade. Nonetheless, we have tentatively decided to move in this
direction. Identifying the primary event on a Special Event Tour will
seldom be a matter of debate. However, identifying secondary events
that are ``integral to the experience'' of the tour would be a far more
subjective exercise, and in any event is beyond the scope of this
proceeding as set forth in the ANPRM. Tour participants who do not
receive promised admission to a secondary event may have a contractual
right to a refund of the value of that event, and they can pursue that
with the tour operator.
In the ANPRM, the Department solicited comment on whether the rule
should ban last-minute or post-departure price increases, something
which occurred on certain tours to the 1994 Rose Bowl. The great
majority of the comments on this subject favored banning such
increases. Some commenters said no price increase should be permitted
unless the tour operator has reserved this right in writing and allows
participants to cancel and receive a full refund in the event of a
price increase.
We have decided to incorporate into the proposed rule the price
increase provisions of the Department's Public Charter rule (14 CFR
Sec. 380.33). While it is not our intent in this proceeding to address
all potential sources of consumer harm on Special Event Tours, the
issue of price increases is directly related to the issue of ticket
availability. Almost any event ticket is procurable if the price is
right; if we did not regulate price increases in the Special Event Tour
rule, tour operators would always be able to acquire event tickets at
greatly inflated prices and then simply increase the price to the
participant to cover it. Since a ticket has been offered in this
situation, the ``money back guarantee'' would not come into play.
The proposed provisions on price increases, modeled on similar
provisions in the charter rule, state that if a given participant is
assessed price increases for the tour that in the aggregate are more
than 10 percent above his or her original tour price, the participant
shall have the right to cancel and receive a full refund (i.e., no
cancellation penalties would apply). No price increases in any amount
would be permitted less than 5 days before departure (as opposed to 10
days in the charter rule, recognizing the fact that Special Event Tours
often have shorter lead times than the typical charter). This would
eliminate both last-minute and post-departure price hikes. Finally,
proposed Sec. 381.11 specifies that the promised event ticket must be
furnished at the price agreed to before departure or else the operator
is subject to the ``money back guarantee'' just as if he had not
provided the ticket at all.
The NHL commented that for events with short lead times such as the
Stanley Cup playoffs, the rule should permit tours on which
participants are required to agree to purchase event tickets at the
yet-unknown face price plus a service fee, as long as the consumer is
given prominent notice of this fact. As an initial matter, we would
point out that a tour would not be covered under this rule at all if
the event ticket were simply held out as an option rather than as a
mandatory feature. However, where the participant must agree to buy the
event ticket, such tours are clearly Special Event Tours since the tour
operator is representing that admission to the event is included in the
tour (even if the price of that admission is not yet known and
consequently any price that is advertised for that tour is not the full
tour price).
However, nothing in the proposed rule would explicitly prohibit a
transaction of this type. The operator would still have to have the
requisite number of event tickets under contract before advertising or
sales could begin; in other words, the variable must be price, not
availability. Beyond that, the proposed rule requires that tour
participants must receive promised event tickets ``at the tour price
agreed to before departure'' or else the participant is entitled to a
refund of the total tour price. If a participant agrees to a price
consisting of a known value p plus an unknown value x, and the operator
delivers the tour (including the event ticket) at that price, the
operator has satisfied the requirements of the rule.
The ANPRM noted that some tours are promoted in conjunction with a
special event, but do not include, and do not represent that they
include, admission to the event. We solicited comment on whether the
new rule should ban this practice, or whether it should specify a form
of required disclosure. Most of the comments favored requiring
disclosure of the fact that an event ticket is not included. However,
we have tentatively decided not to include such a requirement in the
proposed rule. Consumers solicited for these tours are able to
determine from the advertising material that an event ticket is not
held out as included; this is distinguishable from the situation of a
tour participant who paid for an event ticket and then did not receive
it. Should any particular tour deceptively imply that event tickets are
included when in reality they are not, the Department has authority to
take enforcement action against deceptive practices.
The ANPRM sought comment on whether the rule would be impractical
for events where the participants are known only a week in advance,
such as the NCAA Final Four. All of the parties that commented on this
issue thought that this should not be a problem, and that the rule
should apply. As noted in the Comments section above, several
commenters pointed out that the Final Four sells out months in advance
even though the participating teams are not determined until the week
before. Also, as FBA noted, the contestants in the Super Bowl have been
determined only the week before on several occasions, and that does not
appear to have either harmed the marketability of Super Bowl tours or
resulted in additional consumer problems.
While the period for comment on a Notice of Proposed Rulemaking is
normally 60 days, the Department is requesting comment on this notice
within 30 days after it has been published in the Federal Register. The
rule proposed in this notice has changed little from the tentative
proposal that the Department discussed in detail in the Advance Notice
of Proposed Rulemaking in this proceeding (59 FR 4614, February 1,
1994). The Comments on the ANPRM were largely supportive of the
proposal, and we do not anticipate controversy over this NPRM. The
proposed rules are drawn from existing regulations on charters and
Super Bowl tours, and the industry is familiar with the procedures in
those rules. If the volume or nature of the NPRM comments should
warrant, the Department can extend the comment period.
Regulatory Analyses and Notices
This NPRM is considered to be a non-significant rulemaking under
DOT regulatory policies and procedures, 44 FR 11034. The proposal would
have minimal economic impact, and accordingly no regulatory evaluation
has been prepared. The NPRM was not subject to review by the Office of
Information and Regulatory Affairs pursuant to Executive Order 12866.
The NPRM has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612, and it has been determined
that it does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
I certify that the proposal, if adopted, would not have a
significant economic impact on a substantial number of small entities.
For the reasons set forth in the preamble, the Department proposes
the following:
1. To amend title 14, chapter II, subchapter D by adding a new part
381, to read as follows:
PART 381--SPECIAL EVENT TOURS
Sec.
381.1 Purpose.
381.3 Applicability.
381.5 Definition.
381.7 Advertising.
381.9 Sales.
381.11 Refunds.
381.13 Price increases.
Authority: 49 U.S.C. 40113(a) and 41712 (formerly sections
204(a) and 411 of the Federal Aviation Act of 1958, as amended).
Sec. 381.1 Purpose.
The purpose of this part is ensure that air travelers who have
purchased tours to special events will receive the promised admission
to the event. This rule expands the ``Super Bowl rule'' (formerly
contained in part 380 and Secs. 399.87 of this subchapter) to other
events.
Sec. 381.3 Applicability.
This rule applies to Special Event Tours that are (a) in interstate
or overseas air transportation, or (b) in foreign air transportation
originating at a point in the United States. It applies to U.S. and
foreign operators of Special Event Tours, whether they be air carriers
or ticket agents. It applies to scheduled, charter, and other air
transportation.
Sec. 381.5 Definition.
Special Event Tour means a tour that is organized for the purpose
of attending a sporting, social, religious, educational, cultural,
political or other event of a special nature and limited duration,
which exists for reasons apart from the tour itself, and which is
represented by the operator of the tour as including admission to that
event. Examples of such events include, but are not limited to, college
and professional sporting events, the Olympics, concerts, the Passion
Play in Oberammergau, etc.
Sec. 381.7 Advertising.
No operator of a Special Event Tour or agent of such an operator
shall conduct, or cause or allow to be conducted, any advertising,
solicitation or other promotion for a Special Event Tour unless:
(a) The operator is in physical possession of enough tickets for
admission to the event to provide such tickets for a substantial number
of seats on the tour, or
(b) The operator has entered into a written contract with an
organization that is the distributor of such tickets or an organization
that receives such tickets directly from the distributor (e.g., a bowl
committee; football conference, league or team; concert promoter or
arena; etc.), the terms of which provide for that organization to
furnish the operator enough admission tickets to provide such tickets
for a substantial number of seats on the tour, or
(c) The operator has entered into a written contract with another
person or organization that has a written contract or series of written
contracts with the distributor of such tickets or with an organization
that receives such tickets directly from the distributor, the terms of
which provide for that organization to furnish the operator enough
admission tickets to provide such tickets for a substantial number of
seats on the tour.
Sec. 381.9 Sales.
(a) Except as provided in Sec. 381.9(b):
(1) No operator of a Special Event Tour shall accept money for a
seat on a Special Event Tour, or authorize an agent to accept such
money, unless the operator has physical possession of, or written
contracts (in the manner described in Sec. 381.7) for, a ticket for
admission to the event for that individual. To the extent that the
operator receives an unsolicited booking for which the operator does
not have physical possession of or written contracts for a ticket for
admission to the event, any payment accompanying that booking must be
returned within 3 business days.
(2) Upon acceptance of the money for a sale, the operator must
reserve one event ticket for that individual. An operator may not sell
more seats on the tour than it has event tickets in hand or under
contract. (An operator need not continue to reserve an event ticket for
an individual who withdraws from the tour by providing notice to the
operator or by being notified by the operator that the individuals
participation has been canceled due to failure to remit a required
installment payment.)
(b) An operator of a Special Event Tour may accept a booking and
payment from an individual for whom the operator does not have an event
ticket in hand or under contract if that individual agrees in writing
that he or she understands that no event ticket has been reserved for
him or her. This agreement shall specify whether the person has agreed
to participate in the tour without an event ticket and/or the operator
has agreed to attempt to acquire an event ticket for this person. If
the two parties agree that the operator will attempt to acquire an
event ticket, the agreement shall specify any penalties that will apply
if the individual later cancels because an event ticket did not become
available. If the operator notifies this person that an event ticket
has become available, that person shall enjoy all the other protections
of this rule from that time.
Sec. 381.11 Refunds.
If promised admission to the primary event for which a Special
Event Tour was organized is not furnished by the tour operator, at the
tour price agreed to before departure (including any increases that the
participant has accepted pursuant to Sec. 381.13(a)), the operator must
provide each tour participant affected in this way a refund of the
total tour price. This refund is to be provided within 14 calendar days
after the scheduled return date of the tour.
Sec. 381.13 Price increases.
(a) Should the tour operator increase a participant's tour price by
more than 10 percent (aggregate of all increases to that participant),
that participant shall have the option of canceling his or her
participation in the tour and receiving a full refund within 14 days
after the cancellation.
(b) The tour operator shall not increase the tour price to any
participant less than 5 days before departure.
2. To amend Title 14, Chapter II, Subchapter D, Part 380 as
follows:
A. Remove the term Super Bowl charter from the definitions in
Sec. 380.2.
B. Amend Sec. 380.18, ``Charters for special events,'' to add a new
paragraph (f):
* * * * *
(d) Where the charter operator represents that the charter includes
admission to the special event, the charter shall comply with part 381
of this subchapter.
C. Remove Sec. 380.18a and its reference in the table of contents
at the beginning of the part.
D. Remove Sec. 380.28(a)(4).
E. In Sec. 380.31(b), end the sentence after the phrase `` * * * on
specific alternative flights they have requested.'' Remove the
remainder of the original sentence, which begins `` * * * or, in the
case of Super Bowl charters * * *.''
F. In Sec. 380.31(c), remove the phrase ``* * * or in the case of
Super Bowl charters, if the operator does not have either possession of
or written contracts for any game tickets, * * * .''
G. In Sec. 380.31(c), remove the phrase ``* * * (3 days for Super
Bowl charters) * * * '' in the two locations where it appears.
H. In Sec. 380.31(c), remove the phrase ``* * * or in the case of
Super Bowl charters, attempts to obtain more game tickets, * * *.''
I. In Sec. 380.32(s), remove the second sentence.
J. Remove Sec. 380.33(a)(5).
3. To amend title 14, chapter II, subchapter D by removing and
reserving Sec. 399.87.
Issued this 6th day of October, 1994 at Washington, DC.
Patrick V. Murphy,
Acting Assistant Secretary for Policy and International Affairs.
[FR Doc. 94-25318 Filed 10-12-94; 8:45 am]
BILLING CODE 4910-62-U
