§ 41701. Classification of air carriers

The Secretary of Transportation may establish—

• (1) reasonable classifications for air carriers when required because of the nature of the transportation provided by them; and
• (2) reasonable requirements for each class when the Secretary decides those requirements are necessary in the public interest.

§ 41702. Interstate air transportation

An air carrier shall provide safe and adequate interstate air transportation.

§ 41703. Navigation of foreign civil aircraft

• (a) A foreign aircraft, not part of the armed forces of a foreign country, may be navigated in the United States only—
  • (1) if the country of registry grants a similar privilege to aircraft of the United States;
  • (2) by an airman holding a certificate or license issued or made valid by the United States Government or the country of registry;
  • (3) if the Secretary of Transportation authorizes the navigation; and
  • (4) if the navigation is consistent with terms the Secretary may prescribe.
• (b) The Secretary may authorize navigation under this section only if the Secretary decides the authorization is—
  • (1) in the public interest; and
  • (2) consistent with any agreement between the Government and the government of a foreign country.
• (c) The Secretary may authorize an aircraft permitted to navigate in the United States under this section to provide air commerce in the United States. However, the aircraft may take on for compensation, at a place in the United States, passengers or cargo destined for another place in the United States only if—
  • (1) specifically authorized under section 40109(g) of this title ; or
  • (2) under regulations the Secretary prescribes authorizing air carriers to provide otherwise authorized air transportation with foreign registered aircraft under lease or charter to them without crew.
• (d) This section does not affect section 41301 or 41302 of this title. However, a foreign air carrier holding a permit under section 41302 does not need to obtain additional authorization under this section for an operation authorized by the permit.
• (e)
  • (1) For the purposes of subsection (c), eligible cargo taken on or off any aircraft at a place in Alaska in the course of transportation of that cargo by any combination of 2 or more air carriers or foreign air carriers in either direction between a place in the United States and a place outside the United States shall not be deemed to have broken its international journey in, be taken on in, or be destined for Alaska.
  • (2) For purposes of paragraph (1), the term “eligible cargo” means cargo transported between Alaska and any other place in the United States on a foreign air carrier (having been transported from, or thereafter being transported to, a place outside the United States on a different air carrier or foreign air carrier) that is carried—
    • (A) under the code of a United States air carrier providing air transportation to Alaska;
    • (B) on an air carrier way bill of an air carrier providing air transportation to Alaska;
    • (C) under a term arrangement or block space agreement with an air carrier; or
    • (D) under the code of a United States air carrier for purposes of transportation within the United States.

§ 41704. Transporting property not to be transported in aircraft cabins

Under regulations or orders of the Secretary of Transportation, an air carrier shall transport as baggage the property of a passenger traveling in air transportation that may not be carried in an aircraft cabin because of a law or regulation of the United States. The carrier is liable to pay an amount not more than the amount declared to the carrier by that passenger for actual loss of, or damage to, the property caused by the carrier. The carrier may impose reasonable charges and conditions for its liability.

§ 41705. Discrimination against handicapped individuals

• (a) In providing air transportation, an air carrier, including (subject to section 40105(b)) any foreign air carrier, may not discriminate against an otherwise qualified individual on the following grounds:
  • (1) the individual has a physical or mental impairment that substantially limits one or more major life activities.
  • (2) the individual has a record of such an impairment.
  • (3) the individual is regarded as having such an impairment.
• (b) For purposes of section 46301, a separate violation occurs under this section for each individual act of discrimination prohibited by subsection (a).
• (c)
  • (1) The Secretary shall investigate each complaint of a violation of subsection (a).
  • (2) The Secretary shall publish disability-related complaint data in a manner comparable to other consumer complaint data.
  • (3) The Secretary shall regularly review all complaints received by air carriers alleging discrimination on the basis of disability and shall report annually to Congress on the results of such review.
  • (4) Not later than 180 days after the date of the enactment of this subsection, the Secretary shall—
    • (A) implement a plan, in consultation with the Department of Justice, the United States Architectural and Transportation Barriers Compliance Board, and the National Council on Disability, to provide technical assistance to air carriers and individuals with disabilities in understanding the rights and responsibilities set forth in this section; and
    • (B) ensure the availability and provision of appropriate technical assistance manuals to individuals and entities with rights or responsibilities under this section.

§ 41706. Prohibitions against smoking on passenger flights

• (a) An individual may not smoke—
  • (1) in an aircraft in scheduled passenger interstate or intrastate air transportation; or
  • (2) in an aircraft in nonscheduled passenger interstate or intrastate air transportation, if a flight attendant is a required crewmember on the aircraft (as determined by the Administrator of the Federal Aviation Administration).
• (b) The Secretary of Transportation shall require all air carriers and foreign air carriers to prohibit smoking—
  • (1) in an aircraft in scheduled passenger foreign air transportation; and
  • (2) in an aircraft in nonscheduled passenger foreign air transportation, if a flight attendant is a required crewmember on the aircraft (as determined by the Administrator or a foreign government).
• (c)
  • (1) If a foreign government objects to the application of subsection (b) on the basis that subsection (b) provides for an extraterritorial application of the laws of the United States, the Secretary shall waive the application of subsection (b) to a foreign air carrier licensed by that foreign government at such time as an alternative prohibition negotiated under paragraph (2) becomes effective and is enforced by the Secretary.
  • (2) If, pursuant to paragraph (1), a foreign government objects to the prohibition under subsection (b), the Secretary shall enter into bilateral negotiations with the objecting foreign government to provide for an alternative smoking prohibition.
• (d)
  • (1) The use of an electronic cigarette shall be treated as smoking for purposes of this section.
  • (2) In this section, the term “electronic cigarette” means a device that delivers nicotine to a user of the device in the form of a vapor that is inhaled to simulate the experience of smoking.
• (e) The Secretary shall prescribe such regulations as are necessary to carry out this section.

§ 41707. Incorporating contract terms into written instrument

To the extent the Secretary of Transportation prescribes by regulation, an air carrier may incorporate by reference in a ticket or written instrument any term of the contract for providing interstate air transportation.

§ 41708. Reports

• (a) To the extent the Secretary of Transportation finds necessary to carry out this subpart, this section and section 41709 of this title apply to a person controlling an air carrier or affiliated (within the meaning of section 11343(c) of this title ) with a carrier.
• (b) The Secretary may require an air carrier or foreign air carrier—
  • (1)
    • (A) to file annual, monthly, periodical, and special reports with the Secretary in the form and way prescribed by the Secretary; and
    • (B) to file the reports under oath;
  • (2) to provide specific answers to questions on which the Secretary considers information to be necessary; and
  • (3) to file with the Secretary a copy of each agreement, arrangement, contract, or understanding between the carrier and another carrier or person related to transportation affected by this subpart.
• (c)
  • (1) The Secretary shall require an air carrier referred to in paragraph (2) to file with the Secretary a monthly report on each flight of the air carrier that is diverted from its scheduled destination to another airport and each flight of the air carrier that departs the gate at the airport at which the flight originates but is cancelled before wheels-off time.
  • (2) An air carrier that is required to file a monthly airline service quality performance report pursuant to part 234 of title 14, Code of Federal Regulations, shall be subject to the requirement of paragraph (1).
  • (3) A monthly report filed by an air carrier under paragraph (1) shall include, at a minimum, the following information:
    • (A) For a diverted flight—
      • (i) the flight number of the diverted flight;
      • (ii) the scheduled destination of the flight;
      • (iii) the date and time of the flight;
      • (iv) the airport to which the flight was diverted;
      • (v) wheels-on time at the diverted airport;
      • (vi) the time, if any, passengers deplaned the aircraft at the diverted airport; and
      • (vii) if the flight arrives at the scheduled destination airport—
        • (I) the gate-departure time at the diverted airport;
        • (II) the wheels-off time at the diverted airport;
        • (III) the wheels-on time at the scheduled arrival airport; and
        • (IV) the gate-arrival time at the scheduled arrival airport.
    • (B) For flights cancelled after gate departure—
      • (i) the flight number of the cancelled flight;
      • (ii) the scheduled origin and destination airports of the cancelled flight;
      • (iii) the date and time of the cancelled flight;
      • (iv) the gate-departure time of the cancelled flight; and
      • (v) the time the aircraft returned to the gate.
  • (4) The Secretary shall compile the information provided in the monthly reports filed pursuant to paragraph (1) in a single monthly report and publish such report on the Internet Web site of the Department of Transportation.

§ 41709. Records of air carriers

• (a) The Secretary of Transportation shall prescribe the form of records to be kept by an air carrier, including records on the movement of traffic, receipts and expenditures of money, and the time period during which the records shall be kept. A carrier may keep only records prescribed or approved by the Secretary. However, a carrier may keep additional records if the additional records do not impair the integrity of the records prescribed or approved by the Secretary and are not an unreasonable financial burden on the carrier.
• (b)
  • (1) The Secretary at any time may—
    • (A) inspect the land, buildings, and equipment of an air carrier or foreign air carrier when necessary to decide under subchapter II of this chapter or section 41102, 41103, or 41302 of this title whether a carrier is fit, willing, and able; and
    • (B) inspect records kept or required to be kept by an air carrier, foreign air carrier, or ticket agent.
  • (2) The Secretary may employ special agents or auditors to carry out this subsection.

§ 41710. Time requirements

When a matter requiring action of the Secretary of Transportation is submitted under section 40109(a) or (c)–(h), 41309, or 42111 of this title and an evidentiary hearing—

• (1) is ordered, the Secretary shall make a final decision on the matter not later than the last day of the 12th month that begins after the date the matter is submitted; or
• (2) is not ordered, the Secretary shall make a final decision on the matter not later than the last day of the 6th month that begins after the date the matter is submitted.

§ 41711. Air carrier management inquiry and cooperation with other authorities

In carrying out this subpart, the Secretary of Transportation may—

• (1) inquire into the management of the business of an air carrier and obtain from the air carrier, and a person controlling, controlled by, or under common control with the carrier, information the Secretary decides reasonably is necessary to carry out the inquiry;
• (2) confer and hold a joint hearing with a State authority; and
• (3) exchange information related to aeronautics with a government of a foreign country through appropriate departments, agencies, and instrumentalities of the United States Government.

§ 41712. Unfair and deceptive practices and unfair methods of competition

• (a) On the initiative of the Secretary of Transportation or the complaint of an air carrier, foreign air carrier, air ambulance consumer (as defined by the Secretary of Transportation), or ticket agent, and if the Secretary considers it is in the public interest, the Secretary may investigate and decide whether an air carrier, foreign air carrier, or ticket agent has been or is engaged in an unfair or deceptive practice or an unfair method of competition in air transportation or the sale of air transportation. If the Secretary, after notice and an opportunity for a hearing, finds that an air carrier, foreign air carrier, or ticket agent is engaged in an unfair or deceptive practice or unfair method of competition, the Secretary shall order the air carrier, foreign air carrier, or ticket agent to stop the practice or method.
• (b) It shall be an unfair or deceptive practice under subsection (a) for any air carrier, foreign air carrier, or ticket agent utilizing electronically transmitted tickets for air transportation to fail to notify the purchaser of such a ticket of its expiration date, if any.
• (c)
  • (1) It shall be an unfair or deceptive practice under subsection (a) for any ticket agent, air carrier, foreign air carrier, or other person offering to sell tickets for air transportation on a flight of an air carrier to fail to disclose, whether verbally in oral communication or in writing in written or electronic communication, prior to the purchase of a ticket—
    • (A) the name of the air carrier providing the air transportation; and
    • (B) if the flight has more than one flight segment, the name of each air carrier providing the air transportation for each such flight segment.
  • (2) In the case of an offer to sell tickets described in paragraph (1) on an Internet Web site, disclosure of the information required by paragraph (1) shall be provided on the first display of the Web site following a search of a requested itinerary in a format that is easily visible to a viewer.

§ 41713. Preemption of authority over prices, routes, and service

• (a) In this section, “State” means a State, the District of Columbia, and a territory or possession of the United States.
• (b)
  • (1) Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.
  • (2) Paragraphs (1) and (4) of this subsection do not apply to air transportation provided entirely in Alaska unless the transportation is air transportation (except charter air transportation) provided under a certificate issued under section 41102 of this title .
  • (3) This subsection does not limit a State, political subdivision of a State, or political authority of at least 2 States that owns or operates an airport served by an air carrier holding a certificate issued by the Secretary of Transportation from carrying out its proprietary powers and rights.
  • (4)
    • (A) Except as provided in subparagraph (B), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier or carrier affiliated with a direct air carrier through common controlling ownership when such carrier is transporting property by aircraft or by motor vehicle (whether or not such property has had or will have a prior or subsequent air movement).
    • (B) Subparagraph (A)—
      • (i) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle or the hazardous nature of the cargo, or the authority of a State to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization; and
      • (ii) does not apply to the transportation of household goods, as defined in section 13102 of this title .
    • (C) This paragraph shall not limit the applicability of paragraph (1).

§ 41714. Availability of slots

• (a)
  • (1) If basic essential air service under subchapter II of this chapter is to be provided from an eligible point to a high density airport (other than Ronald Reagan Washington National Airport), the Secretary of Transportation shall ensure that the air carrier providing or selected to provide such service has sufficient operational authority at the high density airport to provide such service. The operational authority shall allow flights at reasonable times taking into account the needs of passengers with connecting flights.
  • (2) If necessary to carry out the objectives of paragraph (1), the Secretary shall by order grant exemptions from the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), to air carriers using Stage 3 aircraft or to commuter air carriers, unless such an exemption would significantly increase operational delays.
  • (3) If the Secretary finds that an exemption under paragraph (2) would significantly increase operational delays, the Secretary shall take such action as may be necessary to ensure that an air carrier providing or selected to provide basic essential air service is able to obtain access to a high density airport.
  • (4) The Secretary shall issue a final order under this subsection on or before the 60th day after receiving a request from an air carrier for operational authority under this subsection.
• (b)
  • (1) If the Secretary finds it to be in the public interest at a high density airport (other than Ronald Reagan Washington National Airport), the Secretary may grant by order exemptions from the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), to enable air carriers and foreign air carriers to provide foreign air transportation using Stage 3 aircraft.
  • (2) The Secretary may not withdraw a slot at Chicago O’Hare International Airport from an air carrier in order to allocate that slot to a carrier to provide foreign air transportation.
  • (3) The Secretary shall not take a slot at a high density airport from an air carrier and award such slot to a foreign air carrier if the Secretary determines that air carriers are not provided equivalent rights of access to airports in the country of which such foreign air carrier is a citizen.
  • (4) Effective May 1, 2000 , slots at Chicago O’Hare International Airport allocated to an air carrier as of November 1, 1999 , to provide foreign air transportation shall be made available to such carrier to provide interstate or intrastate air transportation.
• (c) If the Secretary finds it to be in the public interest, the Secretary may by order grant exemptions from the requirements under subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), to enable new entrant air carriers to provide air transportation at high density airports (other than Ronald Reagan Washington National Airport).
• (d)
  • (1) Notwithstanding sections 49104(a)(5) and 49111(e) of this title, or any provision of this section, the Secretary may, only under circumstances determined by the Secretary to be exceptional, grant by order to an air carrier currently holding or operating a slot at Ronald Reagan Washington National Airport an exemption from requirements under subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at Ronald Reagan Washington National Airport), to enable that carrier to provide air transportation with Stage 3 aircraft at Ronald Reagan Washington National Airport; except that such exemption shall not—
    • (A) result in an increase in the total number of slots per day at Ronald Reagan Washington National Airport;
    • (B) result in an increase in the total number of slots at Ronald Reagan Washington National Airport from 7:00 ante meridiem to 9:59 post meridiem;
    • (C) increase the number of operations at Ronald Reagan Washington National Airport in any 1-hour period by more than 2 operations;
    • (D) result in the withdrawal or reduction of slots operated by an air carrier;
    • (E) result in a net increase in noise impact on surrounding communities resulting from changes in timing of operations permitted under this subsection; and
    • (F) continue in effect on or after the date on which the final rules issued under subsection (f) become effective.
  • (2) Nothing in this subsection shall adversely affect Exemption No. 5133, as from time-to-time amended and extended.
• (e)
  • (1) The Secretary shall continue the Secretary’s current examination of slot regulations and shall ensure that the examination includes consideration of—
    • (A) whether improvements in technology and procedures of the air traffic control system and the use of quieter aircraft make it possible to eliminate the limitations on hourly operations imposed by the high density rule contained in part 93 of title 14 of the Code of Federal Regulations or to increase the number of operations permitted under such rule;
    • (B) the effects of the elimination of limitations or an increase in the number of operations allowed on each of the following:
      • (i) congestion and delay in any part of the national aviation system;
      • (ii) the impact of noise on persons living near the airport;
      • (iii) competition in the air transportation system;
      • (iv) the profitability of operations of airlines serving the airport; and
      • (v) aviation safety;
    • (C) the impact of the current slot allocation process upon the ability of air carriers to provide essential air service under subchapter II of this chapter;
    • (D) the impact of such allocation process upon the ability of new entrant air carriers to obtain slots in time periods that enable them to provide service;
    • (E) the impact of such allocation process on the ability of foreign air carriers to obtain slots;
    • (F) the fairness of such process to air carriers and the extent to which air carriers are provided equivalent rights of access to the air transportation market in the countries of which foreign air carriers holding slots are citizens;
    • (G) the impact, on the ability of air carriers to provide domestic and international air service, of the withdrawal of slots from air carriers in order to provide slots for foreign air carriers; and
    • (H) the impact of the prohibition on slot withdrawals in subsections (b)(2) and (b)(3) of this section on the aviation relationship between the United States Government and foreign governments, including whether the prohibition in such subsections will require the withdrawal of slots from general and military aviation in order to meet the needs of air carriers and foreign air carriers providing foreign air transportation (and the impact of such withdrawal on general aviation and military aviation) and whether slots will become available to meet the needs of air carriers and foreign air carriers to provide foreign air transportation as a result of the planned relocation of Air Force Reserve units and the Air National Guard at O’Hare International Airport.
  • (2) Not later than January 31, 1995 , the Secretary shall complete the current examination of slot regulations and shall transmit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives a report containing the results of such examination.
• (f) The Secretary shall conduct a rulemaking proceeding based on the results of the study described in subsection (e). In the course of such proceeding, the Secretary shall issue a notice of proposed rulemaking not later than August 1, 1995 , and shall issue a final rule not later than 90 days after public comments are due on the notice of proposed rulemaking.
• (g) The Secretary shall consider the advisability of revising section 93.227 of title 14, Code of Federal Regulations, so as to eliminate weekend schedules from the determination of whether the 80 percent standard of subsection (a)(1) of that section has been met.
• (h) In this section and sections 41715–41718 and 41734(h), the following definitions apply:
  • (1) The term “commuter air carrier” means a commuter operator as defined or applied in subpart K or S of part 93 of title 14, Code of Federal Regulations.
  • (2) The term “high density airport” means an airport at which the Administrator limits the number of instrument flight rule takeoffs and landings of aircraft.
  • (3) The term “new entrant air carrier” means an air carrier that does not hold a slot at the airport concerned and has never sold or given up a slot at that airport after December 16, 1985 , and a limited incumbent carrier.
  • (4) The term “slot” means a reservation for an instrument flight rule takeoff or landing by an air carrier of an aircraft in air transportation.
  • (5) The term “limited incumbent air carrier” has the meaning given that term in subpart S of part 93 of title 14, Code of Federal Regulations; except that—
    • (A) “40” shall be substituted for “12” in sections 93.213(a)(5), 93.223(c)(3), and 93.225(h);
    • (B) for purposes of such sections, the term “slot” shall not include—
      • (i) “slot exemptions”;
      • (ii) slots operated by an air carrier under a fee-for-service arrangement for another air carrier, if the air carrier operating such slots does not sell flights in its own name, and is under common ownership with an air carrier that seeks to qualify as a limited incumbent and that sells flights in its own name; or
      • (iii) slots held under a sale and license-back financing arrangement with another air carrier, where the slots are under the marketing control of the other air carrier; and
    • (C) for Ronald Reagan Washington National Airport, the Administrator shall not count, for the purposes of section 93.213(a)(5), slots currently held by an air carrier but leased out on a long-term basis by that carrier for use in foreign air transportation and renounced by the carrier for return to the Department of Transportation or the Federal Aviation Administration.
  • (6) The term “regional jet” means a passenger, turbofan-powered aircraft with a certificated maximum passenger seating capacity of less than 71.
  • (7) The term “nonhub airport” means an airport that had less than .05 percent of the total annual boardings in the United States as determined under the Federal Aviation Administration’s Primary Airport Enplanement Activity Summary for Calendar Year 1997.
  • (8) The term “small hub airport” means an airport that had at least .05 percent, but less than .25 percent, of the total annual boardings in the United States as determined under the summary referred to in paragraph (7).
  • (9) The term “medium hub airport” means an airport that each year has at least .25 percent, but less than 1.0 percent, of the total annual boardings in the United States as determined under the summary referred to in paragraph (7).
• (i)
  • (1) Any slot exemption request filed with the Secretary under this section or section 41716 or 41717 (other than subsection (c)) shall include—
    • (A) the names of the airports to be served;
    • (B) the times requested; and
    • (C) such additional information as the Secretary may require.
  • (2) Within 60 days after a slot exemption request under this section or section 41716 or 41717 (other than subsection (c)) is received by the Secretary, the Secretary shall—
    • (A) approve the request if the Secretary determines that the requirements of the section under which the request is made are met;
    • (B) return the request to the applicant for additional information relating to the request to provide air transportation; or
    • (C) deny the request and state the reasons for its denial.
  • (3) If the Secretary returns under paragraph (2)(B) the request for additional information during the first 20 days after the request is filed, then the 60-day period under paragraph (2) shall be tolled until the date on which the additional information is filed with the Secretary.
  • (4) If the Secretary neither approves the request under paragraph (2)(A) nor denies the request under paragraph (2)(C) within the 60-day period beginning on the date the request is received, excepting any days during which the 60-day period is tolled under paragraph (3), then the request is deemed to have been approved on the 61st day, after the request was filed with the Secretary.
• (j) No exemption from the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations, granted under this section or section 41716, 41717, or 41718 may be bought, sold, leased, or otherwise transferred by the carrier to which it is granted, except through an air carrier merger or acquisition.
• (k) For purposes of this section and sections 41716, 41717, and 41718, an air carrier that operates under the same designator code, or has or enters into a code-share agreement, with any other air carrier shall not qualify for a new slot or slot exemption as a new entrant or limited incumbent air carrier at an airport if the total number of slots and slot exemptions held by the two carriers at the airport exceed 20 slots and slot exemptions.

§ 41715. Phase-out of slot rules at certain airports

• (a) The rules contained in subparts S and K of part 93, title 14, Code of Federal Regulations, shall not apply—
  • (1) after July 1, 2002 , at Chicago O’Hare International Airport; and
  • (2) after January 1, 2007 , at LaGuardia Airport or John F. Kennedy International Airport.
• (b) Nothing in this section and sections 41714 and 41716–41718 shall be construed—
  • (1) as affecting the Federal Aviation Administration’s authority for safety and the movement of air traffic; and
  • (2) as affecting any other authority of the Secretary to grant exemptions under section 41714.
• (c)
  • (1) Before the award of slot exemptions under sections 41714 and 41716–41718, the Secretary of Transportation may consider, among other determining factors, whether the petitioning air carrier’s proposal provides the maximum benefit to the United States economy, including the number of United States jobs created by the air carrier, its suppliers, and related activities. The Secretary should give equal consideration to the consumer benefits associated with the award of such exemptions.
  • (2) Paragraph (1) does not apply in any case in which the air carrier requesting the slot exemption is proposing to use under the exemption a type of aircraft for which there is not a competing United States manufacturer.

§ 41716. Interim slot rules at New York airports

• (a) Subject to section 41714(i), the Secretary of Transportation shall grant, by order, exemptions from the requirements under subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports) to any air carrier to provide nonstop air transportation, using an aircraft with a certificated maximum seating capacity of less than 71, between LaGuardia Airport or John F. Kennedy International Airport and a small hub airport or nonhub airport—
  • (1) if the air carrier was not providing such air transportation during the week of November 1, 1999 ;
  • (2) if the number of flights to be provided between such airports by the air carrier during any week will exceed the number of flights provided by the air carrier between such airports during the week of November 1, 1999 ; or
  • (3) if the air transportation to be provided under the exemption will be provided with a regional jet as replacement of turboprop air transportation that was being provided during the week of November 1, 1999 .
• (b) Subject to section 41714(i), the Secretary shall grant, by order, exemptions from the requirements under subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), to any new entrant air carrier or limited incumbent air carrier to provide air transportation to or from LaGuardia Airport or John F. Kennedy International Airport if the number of slot exemptions granted under this subsection to such air carrier with respect to such airport when added to the slots and slot exemptions held by such air carrier with respect to such airport does not exceed 20; except that the Secretary may grant not to exceed 4 additional slot exemptions at LaGuardia Airport to an incumbent air carrier operating at least 20 but not more than 28 slots at such airport as of October 1, 2004 , to provide air transportation between LaGuardia Airport and a small hub airport or nonhub airport.
• (c) An exemption may not be granted under this section with respect to any aircraft that is not a Stage 3 aircraft (as defined by the Secretary).
• (d) An air carrier that provides air transportation of passengers from LaGuardia Airport or John F. Kennedy International Airport to a small hub airport or nonhub airport, or to an airport that is smaller than a nonhub airport, on or before the date of the enactment of this subsection pursuant to an exemption from the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), or where slots were issued to an air carrier conditioned on a specific airport being served, may not terminate air transportation for that route before July 1, 2003 , unless—
  • (1) before October 1, 1999 , the Secretary received a written air service termination notice for that route; or
  • (2) after September 30, 1999 , the air carrier submits an air service termination notice under section 41719 for that route and the Secretary determines that the carrier suffered excessive losses, including substantial losses on operations on that route during any three quarters of the year immediately preceding the date of submission of the notice.

§ 41717. Interim application of slot rules at Chicago O’Hare International Airport

• (a) Effective July 1, 2001 , the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations, do not apply with respect to aircraft operating before 2:45 post meridiem and after 8:14 post meridiem at Chicago O’Hare International Airport.
• (b) Effective May 1, 2000 , subject to section 41714(i), the Secretary of Transportation shall grant, by order, exemptions from the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), to any air carrier to provide nonstop air transportation, using an aircraft with a certificated maximum seating capacity of less than 71, between Chicago O’Hare International Airport and a small hub or nonhub airport—
  • (1) if the air carrier was not providing such air transportation during the week of November 1, 1999 ;
  • (2) if the number of flights to be provided between such airports by the air carrier during any week will exceed the number of flights provided by the air carrier between such airports during the week of November 1, 1999 ; or
  • (3) if the air transportation to be provided under the exemption will be provided with a regional jet as replacement of turboprop air transportation that was being provided during the week of November 1, 1999 .
• (c)
  • (1) The Secretary shall grant, by order, 30 exemptions from the requirements under subparts K and S of part 93 of title 14, Code of Federal Regulations, to any new entrant air carrier or limited incumbent air carrier to provide air transportation to or from Chicago O’Hare International Airport.
  • (2) The Secretary shall grant an exemption under paragraph (1) within 45 days of the date of the request for such exemption if the person making the request qualifies as a new entrant air carrier or limited incumbent air carrier.
• (d)
  • (1) Except as provided in paragraph (2), a slot used to provide turboprop air transportation that is replaced with regional jet air transportation under subsection (b)(3) may not be used, sold, leased, or otherwise transferred after the date the slot exemption is granted to replace the turboprop air transportation.
  • (2) An air carrier that otherwise could not use 2 slots as a result of paragraph (1) may use 1 of such slots to provide air transportation.
  • (3) If the Secretary determines that an air carrier that is using a slot under paragraph (2) is no longer providing the air transportation that replaced the turboprop air transportation, the Secretary shall withdraw the slot that is being used under paragraph (2).
  • (4) If the Secretary determines that an air carrier that is using a slot under paragraph (2) is no longer providing the air transportation that replaced the turboprop air transportation with a regional jet, the Secretary shall withdraw the slot being used by the air carrier under paragraph (2) but shall allow the air carrier to continue to hold the exemption granted to the air carrier under subsection (b)(3).
• (e)
  • (1) Subject to paragraph (2), the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations, shall be of no force and effect at Chicago O’Hare International Airport after May 1, 2000 , with respect to any aircraft providing foreign air transportation.
  • (2) The Secretary may limit access to Chicago O’Hare International Airport with respect to foreign air transportation being provided by a foreign air carrier domiciled in a country to which an air carrier provides nonstop air transportation from the United States if the country in which that carrier is domiciled does not provide reciprocal airport access for air carriers.
• (f) An exemption may not be granted under this section with respect to any aircraft that is not a Stage 3 aircraft (as defined by the Secretary).
• (g) An air carrier that provides air transportation of passengers from Chicago O’Hare International Airport to a small hub airport or nonhub airport, or to an airport that is smaller than a nonhub airport, on or before the date of the enactment of this subsection pursuant to an exemption from the requirements of subparts K and S of part 93 of title 14, Code of Federal Regulations (pertaining to slots at high density airports), or where slots were issued to an air carrier conditioned on a specific airport being served, may not terminate air transportation service for that route for a period of 1 year after the date on which those requirements cease to apply to such airport unless—
  • (1) before October 1, 1999 , the Secretary received a written air service termination notice for that route; or
  • (2) after September 30, 1999 , the air carrier submits an air service termination notice under section 41719 for that route and the Secretary determines that the carrier suffered excessive losses, including substantial losses on operations on that route during the calendar quarters immediately preceding submission of the notice.

§ 41718. Special rules for Ronald Reagan Washington National Airport

• (a) The Secretary shall grant, by order, 24 exemptions from the application of sections 49104(a)(5), 49109, 49111(e), and 41714 of this title to air carriers to operate limited frequencies and aircraft on select routes between Ronald Reagan Washington National Airport and domestic hub airports and exemptions from the requirements of subparts K and S of part 93, Code of Federal Regulations, if the Secretary finds that the exemptions will—
  • (1) provide air transportation with domestic network benefits in areas beyond the perimeter described in that section;
  • (2) increase competition by new entrant air carriers or in multiple markets;
  • (3) not reduce travel options for communities served by small hub airports and medium hub airports within the perimeter described in section 49109; and
  • (4) not result in meaningfully increased travel delays.
• (b) The Secretary shall grant, by order, 20 exemptions from the requirements of sections 49104(a)(5), 49111(e), and 41714 of this title and subparts K and S of part 93 of title 14, Code of Federal Regulations, to air carriers for providing air transportation to airports within the perimeter established for civil aircraft operations at Ronald Reagan Washington National Airport under section 49109. The Secretary shall develop criteria for distributing slot exemptions for flights within the perimeter to such airports under this paragraph in a manner that promotes air transportation—
  • (1) by new entrant air carriers and limited incumbent air carriers;
  • (2) to communities without existing nonstop air transportation to Ronald Reagan Washington National Airport;
  • (3) to small communities;
  • (4) that will provide competitive nonstop air transportation on a monopoly nonstop route to Ronald Reagan Washington National Airport; or
  • (5) that will produce the maximum competitive benefits, including low fares.
• (c)
  • (1) An exemption may not be granted under this section with respect to any aircraft that is not a Stage 3 aircraft (as defined by the Secretary).
  • (2)
    • (A) The exemptions granted—
      • (i) under subsections (a) and (b) and departures authorized under subsection (g)(2) may not be for operations between the hours of 10:00 p.m. and 7:00 a.m.; and
      • (ii) under subsections (a), (b), and (g) may not increase the number of operations at Ronald Reagan Washington National Airport in any 1-hour period during the hours between 7:00 a.m. and 9:59 p.m. by more than 5 operations.
    • (B) A non-limited incumbent air carrier utilizing an exemption authorized under subsection (g)(3) for an arrival permitted between the hours of 10:01 p.m. and 11:00 p.m. under this section shall discontinue use of an existing slot during the same time period the arrival exemption is operated.
  • (3) Of the exemptions granted under subsection (b)—
    • (A) without regard to the criteria contained in subsection (b)(1), six shall be for air transportation to small hub airports and nonhub airports;
    • (B) ten shall be for air transportation to medium hub and smaller airports; and
    • (C) four shall be for air transportation to airports without regard to their size.
  • (4) Nothing in this section affects Exemption No. 5133, as from time-to-time amended and extended.
• (d) The Secretary shall establish procedures to ensure that all requests for exemptions under this section are granted or denied within 90 days after the date on which the request is made.
• (e) Neither the request for, nor the granting of an exemption, under this section shall be considered for purposes of any Federal law a major Federal action significantly affecting the quality of the human environment.
• (f) For purposes of aircraft operations at Ronald Reagan Washington National Airport under subpart K of part 93 of title 14, Code of Federal Regulations, the term “commuters” means aircraft operations using aircraft having a certificated maximum seating capacity of 76 or less.
• (g)
  • (1) Not later than 90 days after the date of enactment of the FAA Modernization and Reform Act of 2012, the Secretary shall grant, by order 16 exemptions from—
    • (A) the application of sections 49104(a)(5), 49109, and 41714 to air carriers to operate limited frequencies and aircraft on routes between Ronald Reagan Washington National Airport and airports located beyond the perimeter described in section 49109; and
    • (B) the requirements of subparts K and S of part 93, Code of Federal Regulations.
  • (2) Of the slot exemptions made available under paragraph (1), the Secretary shall make 8 available to limited incumbent air carriers or new entrant air carriers (as such terms are defined in section 41714(h)). Such exemptions shall be allocated pursuant to the application process established by the Secretary under subsection (d). The Secretary shall consider the extent to which the exemptions will—
    • (A) provide air transportation with domestic network benefits in areas beyond the perimeter described in section 49109;
    • (B) increase competition in multiple markets;
    • (C) not reduce travel options for communities served by small hub airports and medium hub airports within the perimeter described in section 49109;
    • (D) not result in meaningfully increased travel delays;
    • (E) enhance options for nonstop travel to and from the beyond-perimeter airports that will be served as a result of those exemptions;
    • (F) have a positive impact on the overall level of competition in the markets that will be served as a result of those exemptions; or
    • (G) produce public benefits, including the likelihood that the service to airports located beyond the perimeter described in section 49109 will result in lower fares, higher capacity, and a variety of service options.
  • (3) Of the slot exemptions made available under paragraph (1), the Secretary shall make 8 available to incumbent air carriers qualifying for status as a non-limited incumbent carrier at Ronald Reagan Washington National Airport as of the date of enactment of the FAA Modernization and Reform Act of 2012. Each such non-limited incumbent air carrier—
    • (A) may operate up to a maximum of 2 of the newly authorized slot exemptions;
    • (B) prior to exercising an exemption made available under paragraph (1), shall discontinue the use of a slot for service between Ronald Reagan Washington National Airport and a large hub airport within the perimeter as described in section 49109, and operate, in place of such service, service between Ronald Reagan Washington National Airport and an airport located beyond the perimeter described in section 49109;
    • (C) shall be entitled to return of the slot by the Secretary if use of the exemption made available to the carrier under paragraph (1) is discontinued;
    • (D) shall have sole discretion concerning the use of an exemption made available under paragraph (1), including the initial or any subsequent beyond perimeter destinations to be served; and
    • (E) shall file a notice of intent with the Secretary and subsequent notices of intent, when appropriate, to inform the Secretary of any change in circumstances concerning the use of any exemption made available under paragraph (1).
  • (4) Notices of intent under paragraph (3)(E) shall specify the beyond perimeter destination to be served and the slots the carrier shall discontinue using to serve a large hub airport located within the perimeter.
  • (5) Beyond-perimeter flight operations carried out by an air carrier using an exemption granted under this subsection shall be subject to the following conditions:
    • (A) An air carrier may not operate a multi-aisle or widebody aircraft in conducting such operations.
    • (B) An air carrier granted an exemption under this subsection is prohibited from transferring the rights to its beyond-perimeter exemptions pursuant to section 41714(j).
• (h) In administering this section, the Secretary shall—
  • (1) afford a scheduling priority to operations conducted by new entrant air carriers and limited incumbent air carriers over operations conducted by other air carriers granted additional slot exemptions under subsection (g) for service to airports located beyond the perimeter described in section 49109;
  • (2) afford a scheduling priority to slot exemptions currently held by new entrant air carriers and limited incumbent air carriers for service to airports located beyond the perimeter described in section 49109, to the extent necessary to protect viability of such service; and
  • (3) consider applications from foreign air carriers that are certificated by the government of Canada if such consideration is required by the bilateral aviation agreement between the United States and Canada and so long as the conditions and limitations under this section apply to such foreign air carriers.

§ 41719. Air service termination notice

• (a) An air carrier may not terminate interstate air transportation from a nonhub airport included on the Secretary of Transportation’s latest published list of such airports, unless such air carrier has given the Secretary at least 45 days’ notice before such termination.
• (b) The requirements of subsection (a) shall not apply when—
  • (1) the carrier involved is experiencing a sudden or unforeseen financial emergency, including natural weather related emergencies, equipment-related emergencies, and strikes;
  • (2) the termination of transportation is made for seasonal purposes only;
  • (3) the carrier involved has operated at the affected nonhub airport for 180 days or less;
  • (4) the carrier involved provides other transportation by jet from another airport serving the same community as the affected nonhub airport; or
  • (5) the carrier involved makes alternative arrangements, such as a change of aircraft size, or other types of arrangements with a part 121 or part 135 air carrier, that continues uninterrupted service from the affected nonhub airport.
• (c) Before January 1, 1995 , the Secretary shall establish terms and conditions under which regional/commuter carriers can be excluded from the termination notice requirement.
• (d) In this section, the following definitions apply:
  • (1) The term “part 121 air carrier” means an air carrier to which part 121 of title 14, Code of Federal Regulations, applies.
  • (2) The term “part 135 air carrier” means an air carrier to which part 135 of title 14, Code of Federal Regulations, applies.
  • (3) The term “regional/commuter carrier” means—
    • (A) a part 135 air carrier; or
    • (B) a part 121 air carrier that provides air transportation exclusively with aircraft having a seating capacity of no more than 70 passengers.
  • (4) The term “termination” means the cessation of all service at an airport by an air carrier.

§ 41720. Joint venture agreements

• (a) In this section, the following definitions apply:
  • (1) The term “joint venture agreement” means an agreement between two or more major air carriers on or after January 1, 1998 , with regard to (A) code-sharing, blocked-space arrangements, long-term wet leases (as defined in section 207.1 of title 14, Code of Federal Regulations) of a substantial number (as defined by the Secretary by regulation) of aircraft, or frequent flyer programs, or (B) any other cooperative working arrangement (as defined by the Secretary by regulation) between 2 or more major air carriers that affects more than 15 percent of the total number of available seat miles offered by the major air carriers.
  • (2) The term “major air carrier” means a passenger air carrier that is certificated under chapter 411 of this title and included in Carrier Group III under criteria contained in section 04 of part 241 of title 14, Code of Federal Regulations.
• (b) At least 30 days before a joint venture agreement may take effect, each of the major air carriers that entered into the agreement shall submit to the Secretary—
  • (1) a complete copy of the joint venture agreement and all related agreements; and
  • (2) other information and documentary material that the Secretary may require by regulation.
• (c)
  • (1) The Secretary may extend the 30-day period referred to in subsection (b) until—
    • (A) in the case of a joint venture agreement with regard to code-sharing, the 150th day following the last day of such period; and
    • (B) in the case of any other joint venture agreement, the 60th day following the last day of such period.
  • (2) If the Secretary extends the 30-day period referred to in subsection (b), the Secretary shall publish in the Federal Register the Secretary’s reasons for making the extension.
• (d) At any time after the date of submission of a joint venture agreement under subsection (b), the Secretary may terminate the waiting periods referred to in subsections (b) and (c) with respect to the agreement.
• (e) The effectiveness of a joint venture agreement may not be delayed due to any failure of the Secretary to issue regulations to carry out this section.
• (f) Promptly after the date of enactment of this section, the Secretary shall consult with the Assistant Attorney General of the Antitrust Division of the Department of Justice in order to establish, through a written memorandum of understanding, preclearance procedures to prevent unnecessary duplication of effort by the Secretary and the Assistant Attorney General under this section and the antitrust laws of the United States, respectively.
• (g) With respect to a joint venture agreement entered into before the date of enactment of this section as to which the Secretary finds that—
  • (1) the parties submitted the agreement to the Secretary before such date of enactment; and
  • (2) the parties submitted all information on the agreement requested by the Secretary,
• (h) The authority granted to the Secretary under this section shall not in any way limit the authority of the Attorney General to enforce the antitrust laws as defined in the first section of the Clayton Act ( 15 U.S.C. 12 ).

§ 41721. Reports by carriers on incidents involving animals during air transport

• (a) An air carrier that provides scheduled passenger air transportation shall submit monthly to the Secretary a report on any incidents involving the loss, injury, or death of an animal (as defined by the Secretary of Transportation) during air transport provided by the air carrier. The report shall be in such form and contain such information as the Secretary determines appropriate.
• (b) The Secretary shall work with air carriers to improve the training of employees with respect to the air transport of animals and the notification of passengers of the conditions under which the air transport of animals is conducted.
• (c) The Secretary and the Secretary of Agriculture shall enter into a memorandum of understanding to ensure the sharing of information that the Secretary receives under subsection (a).
• (d) The Secretary shall publish data on incidents and complaints involving the loss, injury, or death of an animal during air transport in a manner comparable to other consumer complaint and incident data.
• (e) For purposes of this section, the air transport of an animal includes the entire period during which an animal is in the custody of an air carrier, from check-in of the animal prior to departure until the animal is returned to the owner or guardian of the animal at the final destination of the animal.

§ 41722. Delay reduction actions

• (a) The Secretary of Transportation may request that air carriers meet with the Administrator of the Federal Aviation Administration to discuss flight reductions at severely congested airports to reduce overscheduling and flight delays during hours of peak operation if—
  • (1) the Administrator determines that it is necessary to convene such a meeting; and
  • (2) the Secretary determines that the meeting is necessary to meet a serious transportation need or achieve an important public benefit.
• (b) Any meeting under subsection (a)—
  • (1) shall be chaired by the Administrator;
  • (2) shall be open to all scheduled air carriers; and
  • (3) shall be limited to discussions involving the airports and time periods described in the Administrator’s determination.
• (c) Before any such meeting is held, the Administrator shall establish flight reduction targets for the meeting and notify the attending air carriers of those targets not less than 48 hours before the meeting.
• (d) An air carrier attending the meeting shall make any offer to meet a flight reduction target to the Administrator rather than to another carrier.
• (e) The Administrator shall ensure that a transcript of the meeting is kept and made available to the public not later than 3 business days after the conclusion of the meeting.

§ 41723. Notice concerning aircraft assembly

The Secretary of Transportation shall require, beginning after the last day of the 18-month period following the date of enactment of this section, an air carrier using an aircraft to provide scheduled passenger air transportation to display a notice, on an information placard available to each passenger on the aircraft, that informs the passengers of the nation in which the aircraft was finally assembled.

§ 41724. Musical instruments

• (a)
  • (1) An air carrier providing air transportation shall permit a passenger to carry a violin, guitar, or other musical instrument in the aircraft cabin, without charging the passenger a fee in addition to any standard fee that carrier may require for comparable carry-on baggage, if—
    • (A) the instrument can be stowed safely in a suitable baggage compartment in the aircraft cabin or under a passenger seat, in accordance with the requirements for carriage of carry-on baggage or cargo established by the Administrator; and
    • (B) there is space for such stowage at the time the passenger boards the aircraft.
  • (2) An air carrier providing air transportation shall permit a passenger to carry a musical instrument that is too large to meet the requirements of paragraph (1) in the aircraft cabin, without charging the passenger a fee in addition to the cost of the additional ticket described in subparagraph (E), if—
    • (A) the instrument is contained in a case or covered so as to avoid injury to other passengers;
    • (B) the weight of the instrument, including the case or covering, does not exceed 165 pounds or the applicable weight restrictions for the aircraft;
    • (C) the instrument can be stowed in accordance with the requirements for carriage of carry-on baggage or cargo established by the Administrator;
    • (D) neither the instrument nor the case contains any object not otherwise permitted to be carried in an aircraft cabin because of a law or regulation of the United States; and
    • (E) the passenger wishing to carry the instrument in the aircraft cabin has purchased an additional seat to accommodate the instrument.
  • (3) An air carrier shall transport as baggage a musical instrument that is the property of a passenger traveling in air transportation that may not be carried in the aircraft cabin if—
    • (A) the sum of the length, width, and height measured in inches of the outside linear dimensions of the instrument (including the case) does not exceed 150 inches or the applicable size restrictions for the aircraft;
    • (B) the weight of the instrument does not exceed 165 pounds or the applicable weight restrictions for the aircraft; and
    • (C) the instrument can be stowed in accordance with the requirements for carriage of carry-on baggage or cargo established by the Administrator.
• (b) Not later than 2 years after the date of enactment of this section, the Secretary shall issue final regulations to carry out subsection (a).
• (c) The requirements of this section shall become effective on the date of issuance of the final regulations under subsection (b).

§ 41725. Prohibition on certain cell phone voice communications

• (a) The Secretary of Transportation shall issue regulations—
  • (1) to prohibit an individual on an aircraft from engaging in voice communications using a mobile communications device during a flight of that aircraft in scheduled passenger interstate or intrastate air transportation; and
  • (2) that exempt from the prohibition described in paragraph (1) any—
    • (A) member of the flight crew on duty on an aircraft;
    • (B) flight attendant on duty on an aircraft; and
    • (C) Federal law enforcement officer acting in an official capacity.
• (b) In this section, the following definitions apply:
  • (1) The term “flight” means, with respect to an aircraft, the period beginning when the aircraft takes off and ending when the aircraft lands.
  • (2)
    • (A) The term “mobile communications device” means any portable wireless telecommunications equipment utilized for the transmission or reception of voice data.
    • (B) The term “mobile communications device” does not include a phone installed on an aircraft.

§ 41726. Strollers

• (a) Except as provided in subsection (b), a covered air carrier shall not deny a passenger the ability to check a stroller at the departure gate if the stroller is being used by a passenger to transport a child traveling on the same flight as the passenger.
• (b) Subsection (a) shall not apply in instances where the size or weight of the stroller poses a safety or security risk.
• (c) In this section, the term “covered air carrier” means an air carrier or a foreign air carrier as those terms are defined in section 40102 of title 49 , United States Code.

§ 41731. Definitions

• (a) In this subchapter—
  • (1) “eligible place” means a place in the United States that—
    • (A)
      • (i)
        • (I) was an eligible point under section 419 of the Federal Aviation Act of 1958 before October 1, 1988 ;
        • (II) received scheduled air transportation at any time after January 1, 1990 ; and
        • (III) is not listed in Department of Transportation Orders 89–9–37 and 89–12–52 as a place ineligible for compensation under this subchapter; or
      • (ii) was determined, on or after October 1, 1988 , and before the date of the enactment of the FAA Extension, Safety, and Security Act of 2016 ( Public Law 114–190 ), under this subchapter by the Secretary of Transportation to be eligible to receive subsidized small community air service under section 41736(a);
    • (B) had an average of 10 enplanements per service day or more, as determined by the Secretary, during the most recent fiscal year beginning after September 30, 2012 ;
    • (C) had an average subsidy per passenger of less than $1,000 during the most recent fiscal year, as determined by the Secretary; and
    • (D) is a community that, at any time during the period between September 30, 2010 , and September 30, 2011 , inclusive—
      • (i) received essential air service for which compensation was provided to an air carrier under this subchapter; or
      • (ii) received a 90-day notice of intent to terminate essential air service and the Secretary required the air carrier to continue to provide such service to the community.
  • (2) “enhanced essential air service” means scheduled air transportation to an eligible place of a higher level or quality than basic essential air service described in section 41732 of this title .
• (b) The Secretary may not decide that a place described in subsection (a)(1) of this section is not an eligible place on any basis that is not specifically stated in this subchapter.
• (c) Subparagraphs (B), (C), and (D) of subsection (a)(1) shall not apply with respect to locations in the State of Alaska or the State of Hawaii.
• (d) Subsection (a)(1)(B) shall not apply with respect to locations that are more than 175 driving miles from the nearest large or medium hub airport.
• (e) For fiscal year 2013 and each fiscal year thereafter, the Secretary may waive, on an annual basis, subsection (a)(1)(B) with respect to a location if the location demonstrates to the Secretary’s satisfaction that the reason the location averages fewer than 10 enplanements per day is due to a temporary decline in enplanements.
• (f) For purposes of subsection (a)(1)(B), the term “enplanements” means the number of passengers enplaning, at an eligible place, on flights operated by the subsidized essential air service carrier.

§ 41732. Basic essential air service

• (a) Basic essential air service provided under section 41733 of this title is scheduled air transportation of passengers and cargo—
  • (1) to a hub airport that has convenient connecting or single-plane air service to a substantial number of destinations beyond that airport; or
  • (2) to a small hub or nonhub airport, when in Alaska or when the nearest hub airport is more than 400 miles from an eligible place.
• (b) Basic essential air service shall include at least the following:
  • (1)
    • (A) for a place not in Alaska, 2 daily round trips 6 days a week, with not more than one intermediate stop on each flight; or
    • (B) for a place in Alaska, a level of service at least equal to that provided in 1976 or 2 round trips a week, whichever is greater, except that the Secretary of Transportation and the appropriate State authority of Alaska may agree to a different level of service after consulting with the affected community.
  • (2) flights at reasonable times considering the needs of passengers with connecting flights at the airport and at prices that are not excessive compared to the generally prevailing prices of other air carriers for like service between similar places.
  • (3) for a place not in Alaska, service provided in an aircraft with an effective capacity of at least 15 passengers if the average daily boardings at the place in any calendar year from 1976-1986 were more than 11 passengers unless—
    • (A) that level-of-service requirement would require paying compensation in a fiscal year under section 41733(d) or 41734(d) or (e) of this title for the place when compensation otherwise would not have been paid for that place in that year; or
    • (B) the affected community agrees with the Secretary in writing to the use of smaller aircraft to provide service to the place.
  • (4) service accommodating the estimated passenger and property traffic at an average load factor, for each class of traffic considering seasonal demands for the service, of not more than—
    • (A) 50 percent; or
    • (B) 60 percent when service is provided by aircraft with more than 14 passenger seats.
  • (5) service provided in aircraft with at least 2 engines and using 2 pilots, unless scheduled air transportation has not been provided to the place in aircraft with at least 2 engines and using 2 pilots for at least 60 consecutive operating days at any time since October 31, 1978 .
  • (6) service provided by pressurized aircraft when the service is provided by aircraft that regularly fly above 8,000 feet in altitude.
• (c) Notwithstanding section 41733(e), upon request by an eligible place, the Secretary may waive, in whole or in part, subsections (a) and (b) of this section or subsections (a) through (c) of section 41734. A waiver issued under this subsection shall remain in effect for a limited period of time, as determined by the Secretary.

§ 41733. Level of basic essential air service

• (a) For each eligible place for which a decision was made before October 1, 1988 , under section 419 of the Federal Aviation Act of 1958, establishing the level of essential air transportation, the level of basic essential air service for that place shall be the level established by the Secretary of Transportation for that place by not later than December 29, 1988 .
• (b)
  • (1) The Secretary shall decide on the level of basic essential air service for each eligible place for which a decision was not made before October 1, 1988 , establishing the level of essential air transportation, when the Secretary receives notice that service to that place will be provided by only one air carrier. The Secretary shall make the decision by the last day of the 6-month period beginning on the date the Secretary receives the notice. The Secretary may impose notice requirements necessary to carry out this subsection. Before making a decision, the Secretary shall consider the views of any interested community and the appropriate State authority of the State in which the community is located.
  • (2) Until the Secretary has made a decision on a level of basic essential air service for an eligible place under this subsection, the Secretary, on petition by an appropriate representative of the place, shall prohibit an air carrier from ending, suspending, or reducing air transportation to that place that appears to deprive the place of basic essential air service.
• (c)
  • (1) If the Secretary decides that basic essential air service will not be provided to an eligible place without compensation, the Secretary shall provide notice that an air carrier may apply to provide basic essential air service to the place for compensation under this section. In selecting an applicant, the Secretary shall consider, among other factors—
    • (A) the demonstrated reliability of the applicant in providing scheduled air service;
    • (B) the contractual and marketing arrangements the applicant has made with a larger carrier to ensure service beyond the hub airport;
    • (C) the interline arrangements that the applicant has made with a larger carrier to allow passengers and cargo of the applicant at the hub airport to be transported by the larger carrier through one reservation, ticket, and baggage check-in;
    • (D) the preferences of the actual and potential users of air transportation at the eligible place, giving substantial weight to the views of the elected officials representing the users;
    • (E) whether the air carrier has included a plan in its proposal to market its services to the community; and
    • (F) for an eligible place in Alaska, the experience of the applicant in providing, in Alaska, scheduled air service, or significant patterns of non-scheduled air service under an exemption granted under section 40109(a) and (c)–(h) of this title.
  • (2) Under guidelines prescribed under section 41737(a) of this title , the Secretary shall pay the rate of compensation for providing basic essential air service under this section and section 41734 of this title .
• (d) The Secretary shall pay compensation under this section at times and in the way the Secretary decides is appropriate. The Secretary shall end payment of compensation to an air carrier for providing basic essential air service to an eligible place when the Secretary decides the compensation is no longer necessary to maintain basic essential air service to the place.
• (e) The Secretary shall review periodically the level of basic essential air service for each eligible place. Based on the review and consultations with an interested community and the appropriate State authority of the State in which the community is located, the Secretary may make appropriate adjustments in the level of service, to the extent such adjustments are to a level not less than the basic essential air service level established under subsection (a) for the airport that serves the community.
• (f)
  • (1) The Secretary shall notify each community receiving basic essential air service for which compensation is being paid under this subchapter on or before the 45th day before issuing any final decision to end the payment of such compensation due to a determination by the Secretary that providing such service requires a rate of subsidy per passenger in excess of the subsidy cap.
  • (2) The Secretary shall establish, by order, procedures by which each community notified of an impending loss of subsidy under paragraph (1) may work directly with an air carrier to ensure that the air carrier is able to submit a proposal to the Secretary to provide essential air service to such community for an amount of compensation that would not exceed the subsidy cap.
  • (3) The Secretary shall provide, by order, information to each community notified under paragraph (1) regarding—
    • (A) the procedures established pursuant to paragraph (2); and
    • (B) the maximum amount of compensation that could be provided under this subchapter to an air carrier serving such community that would comply with basic essential air service and the subsidy cap.
• (g)
  • (1) If the Secretary, after the date of enactment of this subsection, ends payment of compensation to an air carrier for providing basic essential air service to an eligible place because the Secretary has determined that providing such service requires a rate of subsidy per passenger in excess of the subsidy cap or that the place is no longer an eligible place pursuant to section 41731(a)(1)(B), a State or local government may submit to the Secretary a proposal for restoring compensation for such service. Such proposal shall be a joint proposal of the State or local government and an air carrier.
  • (2) The Secretary shall issue an order restoring the eligibility of the otherwise eligible place to receive basic essential air service by an air carrier for compensation under subsection (c) if—
    • (A) a State or local government submits to the Secretary a proposal under paragraph (1); and
    • (B) the Secretary determines that—
      • (i) the rate of subsidy per passenger under the proposal does not exceed the subsidy cap;
      • (ii) the proposal is likely to result in an average number of enplanements per day that will satisfy the requirement in section 41731(a)(1)(B); and
      • (iii) the proposal is consistent with the legal and regulatory requirements of the essential air service program.
• (h) In this section, the term “subsidy cap” means the subsidy-per-passenger cap established by section 332 of the Department of Transportation and Related Agencies Appropriations Act, 2000 ( Public Law 106–69 ; 113 Stat. 1022 ).

§ 41734. Ending, suspending, and reducing basic essential air service

• (a) An air carrier may end, suspend, or reduce air transportation to an eligible place below the level of basic essential air service established for that place under section 41733 of this title only after giving the Secretary of Transportation, the appropriate State authority, and the affected communities at least 90 days’ notice before ending, suspending, or reducing that transportation.
• (b) If at the end of the notice period under subsection (a) of this section the Secretary has not found another air carrier to provide basic essential air service to the eligible place, the Secretary shall require the carrier providing notice to continue to provide basic essential air service to the place for an additional 30-day period or until another carrier begins to provide basic essential air service to the place, whichever occurs first.
• (c) If at the end of the 30-day period under subsection (b) of this section the Secretary decides another air carrier will not provide basic essential air service to the place on a continuing basis, the Secretary shall require the carrier providing service to continue to provide service for additional 30-day periods until another carrier begins providing service on a continuing basis. At the end of each 30-day period, the Secretary shall decide if another carrier will provide service on a continuing basis.
• (d) If an air carrier receiving compensation under section 41733 of this title for providing basic essential air service to an eligible place is required to continue to provide service to the place under this section after the 90-day notice period under subsection (a) of this section, the Secretary shall provide the carrier with compensation sufficient—
  • (1) to pay for the fully allocated actual cost to the carrier of performing the basic essential air service that was being provided when the 90-day notice was given under subsection (a) of this section plus a reasonable return on investment that is at least 5 percent of operating costs; and
  • (2) to provide the carrier an additional return that recognizes the demonstrated additional lost profits from opportunities foregone and the likelihood that those lost profits increase as the period during which the carrier is required to provide the service continues.
• (e) If the Secretary requires an air carrier providing basic essential air service to an eligible place without compensation under section 41733 of this title to continue providing that service after the 90-day notice period required by subsection (a) of this section, the Secretary shall provide the carrier with compensation after the end of the 90-day notice period that is sufficient—
  • (1) to pay for the fully allocated actual cost to the carrier of performing the basic essential air service that was being provided when the 90-day notice was given under subsection (a) of this section plus a reasonable return on investment that is at least 5 percent of operating costs; and
  • (2) to provide the carrier an additional return that recognizes the demonstrated additional lost profits from opportunities foregone and the likelihood that those lost profits increase as the period during which the carrier is required to provide the service continues.
• (f) When the Secretary requires an air carrier to continue to provide basic essential air service to an eligible place, the Secretary shall continue to make every effort to find another carrier to provide at least that basic essential air service to the place on a continuing basis.
• (g) If an air carrier, providing basic essential air service under section 41733 of this title between an eligible place and an airport at which the Administrator of the Federal Aviation Administration limits the number of instrument flight rule takeoffs and landings of aircraft, provides notice under subsection (a) of this section of an intention to end, suspend, or reduce that service and another carrier is found to provide the service, the Secretary shall require the carrier providing notice to transfer any operational authority the carrier has to land or take off at that airport related to the service to the eligible place to the carrier that will provide the service, if—
  • (1) the carrier that will provide the service needs the authority; and
  • (2) the authority to be transferred is being used to provide air service to another eligible place.
• (h) In determining what is basic essential air service and in selecting an air carrier to provide such service, the Secretary shall not consider as a factor whether slots at a high density airport are available for providing such service.
• (i) If, after the date of enactment of this subsection, an air carrier commences air transportation to an eligible place that is not receiving scheduled passenger air service as a result of the failure of the eligible place to meet requirements contained in an appropriations Act, the air carrier shall not be subject to the requirements of subsections (b) and (c) with respect to such air transportation.

§ 41735. Enhanced essential air service

• (a)
  • (1) A State or local government may submit a proposal to the Secretary of Transportation for enhanced essential air service to an eligible place for which basic essential air service is being provided under section 41733 of this title . The proposal shall—
    • (A) specify the level and type of enhanced essential air service the State or local government considers appropriate; and
    • (B) include an agreement related to compensation required for the proposed service.
  • (2) The agreement submitted under paragraph (1)(B) of this subsection shall provide that—
    • (A) the State or local government or a person pay 50 percent of the compensation required for the proposed service and the United States Government pay the remaining 50 percent; or
    • (B)
      • (i) the Government pay 100 percent of the compensation; and
      • (ii) if the proposed service is not successful for at least a 2-year period under the criteria prescribed by the Secretary under paragraph (3) of this subsection, the eligible place is not eligible for air service or air transportation for which compensation is paid by the Secretary under this subchapter.
  • (3) The Secretary shall prescribe by regulation objective criteria for deciding whether enhanced essential air service to an eligible place under this section is successful in terms of—
    • (A) increasing passenger usage of the airport facilities at the place; and
    • (B) reducing the amount of compensation provided by the Secretary under this subchapter for that service.
• (b) Not later than 90 days after receiving a proposal under subsection (a) of this section, the Secretary shall—
  • (1) approve the proposal if the Secretary decides the proposal is reasonable; or
  • (2) if the Secretary decides the proposal is not reasonable, disapprove the proposal and notify the State or local government of the disapproval and the reasons for the disapproval.
• (c)
  • (1) The Secretary shall pay compensation under this section when and in the way the Secretary decides is appropriate. Compensation for enhanced essential air service under this section may be paid only for the costs incurred in providing air service to an eligible place that are in addition to the costs incurred in providing basic essential air service to the place under section 41733 of this title . The Secretary shall continue to pay compensation under this section only as long as—
    • (A) the air carrier maintains the level of enhanced essential air service;
    • (B) the State or local government or person agreeing to pay compensation under this section continues to pay the compensation; and
    • (C) the Secretary decides the compensation is necessary to maintain the service to the place.
  • (2) The Secretary may require the State or local government or person agreeing to pay compensation under this section to make advance payments or provide other security to ensure that timely payments are made.
• (d)
  • (1) The Secretary shall review periodically the enhanced essential air service provided to each eligible place under this section.
  • (2) For service for which the Government pays 50 percent of the compensation, based on the review and consultation with the affected community and the State or local government or person paying the remaining 50 percent of the compensation, the Secretary shall make appropriate adjustments in the type and level of service to the place.
  • (3) For service for which the Government pays 100 percent of the compensation, based on the review and consultation with the State or local government submitting the proposal, the Secretary shall decide whether the service has succeeded for at least a 2-year period under the criteria prescribed under subsection (a)(3) of this section. If unsuccessful, the place is not eligible for air service or air transportation for which compensation is paid by the Secretary under this subchapter.
• (e) An air carrier may end, suspend, or reduce air transportation to an eligible place below the level of enhanced essential air service established for that place by the Secretary under this section only after giving the Secretary, the affected community, and the State or local government or person paying compensation for that service at least 30 days’ notice before ending, suspending, or reducing the service. This subsection does not relieve the carrier of an obligation under section 41734 of this title .

§ 41736. Air transportation to noneligible places

• (a)
  • (1) A State or local government may propose to the Secretary of Transportation that the Secretary provide compensation to an air carrier to provide air transportation to a place that is not an eligible place under this subchapter. Not later than 90 days after receiving a proposal under this section, the Secretary shall—
    • (A) decide whether to designate the place as eligible to receive compensation under this section; and
    • (B)
      • (i) approve the proposal if the State or local government or a person is willing and able to pay 50 percent of the compensation for providing the transportation, and notify the State or local government of the approval; or
      • (ii) disapprove the proposal if the Secretary decides the proposal is not reasonable under paragraph (2) of this subsection, and notify the State or local government of the disapproval and the reasons for the disapproval.
  • (2) In deciding whether a proposal is reasonable, the Secretary shall consider, among other factors—
    • (A) the traffic-generating potential of the place;
    • (B) the cost to the United States Government of providing the proposed transportation; and
    • (C) the distance of the place from the closest hub airport.
• (b) Notwithstanding subsection (a)(1)(B) of this section, the Secretary shall approve a proposal under this section to compensate an air carrier for providing air transportation to a place in the 48 contiguous States or the District of Columbia and designate the place as eligible for compensation under this section if—
  • (1) at any time before October 23, 1978 , the place was served by a carrier holding a certificate under section 401 of the Federal Aviation Act of 1958;
  • (2) the place is more than 50 miles from the nearest small hub airport or an eligible place;
  • (3) the place is more than 150 miles from the nearest hub airport; and
  • (4) the State or local government submitting the proposal or a person is willing and able to pay 25 percent of the cost of providing the compensated transportation.
• (c)
  • (1) If the Secretary designates a place under subsection (a)(1) of this section as eligible for compensation under this section, the Secretary shall decide, not later than 6 months after the date of the designation, on the level of air transportation to be provided under this section. Before making a decision, the Secretary shall consider the views of any interested community, the appropriate State authority of the State in which the place is located, and the State or local government or person agreeing to pay compensation for the transportation under subsection (b)(4) of this section.
  • (2) After making the decision under paragraph (1) of this subsection, the Secretary shall provide notice that any air carrier that is willing to provide the level of air transportation established under paragraph (1) for a place may submit an application to provide the transportation. In selecting an applicant, the Secretary shall consider, among other factors—
    • (A) the factors listed in section 41733(c)(1) of this title ; and
    • (B) the views of the State or local government or person agreeing to pay compensation for the transportation.
• (d)
  • (1) The Secretary shall pay compensation under this section when and in the way the Secretary decides is appropriate. The Secretary shall continue to pay compensation under this section only as long as—
    • (A) the air carrier maintains the level of air transportation established by the Secretary under subsection (c)(1) of this section;
    • (B) the State or local government or person agreeing to pay compensation for transportation under this section continues to pay that compensation; and
    • (C) the Secretary decides the compensation is necessary to maintain the transportation to the place.
  • (2) The Secretary may require the State or local government or person agreeing to pay compensation under this section to make advance payments or provide other security to ensure that timely payments are made.
• (e) The Secretary shall review periodically the level of air transportation provided under this section. Based on the review and consultation with any interested community, the appropriate State authority of the State in which the community is located, and the State or local government or person paying compensation under this section, the Secretary may make appropriate adjustments in the level of transportation.
• (f) After providing notice and an opportunity for interested persons to comment, the Secretary may withdraw the designation of a place under subsection (a)(1) of this section as eligible to receive compensation under this section if the place has received air transportation under this section for at least 2 years and the Secretary decides the withdrawal would be in the public interest. The Secretary by regulation shall prescribe standards for deciding whether the withdrawal of a designation under this subsection is in the public interest. The standards shall include the factors listed in subsection (a)(2) of this section.
• (g) An air carrier providing air transportation for compensation under this section may end, suspend, or reduce that transportation below the level of transportation established by the Secretary under this section only after giving the Secretary, the affected community, and the State or local government or person paying compensation under this section at least 30 days’ notice before ending, suspending, or reducing the transportation.
• (h)
  • (1) No proposal under subsection (a) may be accepted by the Secretary after the date of enactment of this subsection.
  • (2) The Secretary may not provide any compensation under this section after the date that is 2 years after the date of enactment of this subsection.

§ 41737. Compensation guidelines, limitations, and claims

• (a)
  • (1) The Secretary of Transportation shall prescribe guidelines governing the rate of compensation payable under this subchapter. The guidelines shall be used to determine the reasonable amount of compensation required to ensure the continuation of air service or air transportation under this subchapter. The guidelines shall—
    • (A) provide for a reduction in compensation when an air carrier does not provide service or transportation agreed to be provided;
    • (B) consider amounts needed by an air carrier to promote public use of the service or transportation for which compensation is being paid;
    • (C) include expense elements based on representative costs of air carriers providing scheduled air transportation of passengers, property, and mail on aircraft of the type the Secretary decides is appropriate for providing the service or transportation for which compensation is being provided;
    • (D) include provisions under which the Secretary may encourage an air carrier to improve air service for which compensation is being paid under this subchapter by incorporating financial incentives in an essential air service contract based on specified performance goals, including goals related to improving on-time performance, reducing the number of flight cancellations, establishing reasonable fares (including joint fares beyond the hub airport), establishing convenient connections to flights providing service beyond hub airports, and increasing marketing efforts; and
    • (E) include provisions under which the Secretary may execute a long-term essential air service contract to encourage an air carrier to provide air service to an eligible place if it would be in the public interest to do so.
  • (2) Promotional amounts described in paragraph (1)(B) of this subsection shall be a special, segregated element of the compensation provided to a carrier under this subchapter.
• (b) The Secretary may pay compensation to an air carrier for providing air service or air transportation under this subchapter only if the Secretary finds the carrier is able to provide the service or transportation in a reliable way.
• (c) Not later than 15 days after receiving a written claim from an air carrier for compensation under this subchapter, the Secretary shall—
  • (1) pay or deny the United States Government’s share of a claim; and
  • (2) if denying the claim, notify the carrier of the denial and the reasons for the denial.
• (d)
  • (1) The Secretary may make agreements and incur obligations from the Airport and Airway Trust Fund established under section 9502 of the Internal Revenue Code of 1986 ( 26 U.S.C. 9502 ) to pay compensation under this subchapter. An agreement by the Secretary under this subsection is a contractual obligation of the Government to pay the Government’s share of the compensation.
  • (2) Not more than $38,600,000 is available to the Secretary out of the Fund for each of the fiscal years ending September 30, 1993 –1998, to incur obligations under this section. Amounts made available under this section remain available until expended.
• (e)
  • (1) If the Secretary determines that air carriers are experiencing significantly increased costs in providing air service or air transportation for which compensation is being paid under this subchapter, the Secretary may increase the rates of compensation payable under this subchapter without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734.
  • (2) If an adjustment is made under paragraph (1), and total unit costs subsequently decrease to at least the total unit cost reflected in the compensation rate, then the Secretary may reverse the adjustment previously made under paragraph (1) without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734.
  • (3) In this subsection, the term “significantly increased costs” means a total unit cost increase (but not increases in individual unit costs) of 10 percent or more in relation to the total unit cost reflected in the compensation rate, based on the carrier’s internal audit of its financial statements if such cost increase is incurred for a period of at least 2 consecutive months.

§ 41738. Fitness of air carriers

Notwithstanding section 40109(a) and (c)–(h) of this title, an air carrier may provide air service to an eligible place or air transportation to a place designated under section 41736 of this title only when the Secretary of Transportation decides that—

• (1) the carrier is fit, willing, and able to perform the service or transportation; and
• (2) aircraft used to provide the service or transportation, and operations related to the service or transportation, conform to the safety standards prescribed by the Administrator of the Federal Aviation Administration.

§ 41739. Air carrier obligations

If at least 2 air carriers make an agreement to operate under or use a single carrier designator code to provide air transportation, the carrier whose code is being used shares responsibility with the other carriers for the quality of transportation provided the public under the code by the other carriers.

§ 41740. Joint proposals

The Secretary of Transportation shall encourage the submission of joint proposals, including joint fares, by 2 or more air carriers for providing air service or air transportation under this subchapter through arrangements that maximize the service or transportation to and from major destinations beyond the hub.

§ 41741. Insurance

The Secretary of Transportation may pay an air carrier compensation under this subchapter only when the carrier files with the Secretary an insurance policy or self-insurance plan approved by the Secretary. The policy or plan must be sufficient to pay for bodily injury to, or death of, an individual, or for loss of or damage to property of others, resulting from the operation of aircraft, but not more than the amount of the policy or plan limits.

§ 41742. Essential air service authorization

• (a)
  • (1) Out of the amounts received by the Federal Aviation Administration credited to the account established under section 45303 of this title or otherwise provided to the Administration, the sum of $50,000,000 for each fiscal year is authorized and shall be made available immediately for obligation and expenditure to carry out the essential air service program under this subchapter.
  • (2) In addition to amounts authorized under paragraph (1), there is authorized to be appropriated out of the Airport and Airway Trust Fund (established under section 9502 of the Internal Revenue Code of 1986) $155,000,000 for fiscal year 2018, $158,000,000 for fiscal year 2019, $161,000,000 for fiscal year 2020, $165,000,000 for fiscal year 2021, $168,000,000 for fiscal year 2022, and $172,000,000 for fiscal year 2023 to carry out the essential air service program under this subchapter of which not more than $12,000,000 per fiscal year may be used for the marketing incentive program for communities and for State marketing assistance.
  • (3) In addition to amounts authorized under paragraphs (1) and (2), there are authorized to be appropriated such sums as may be necessary for the Secretary of Transportation to hire and employ 4 additional employees for the office responsible for carrying out the essential air service program.
• (b) Notwithstanding any other provision of law, in any fiscal year in which funds credited to the account established under section 45303, including the funds derived from fees imposed under the authority contained in section 45301(a), exceed the $50,000,000 made available under subsection (a)(1), such funds shall be made available immediately for obligation and expenditure to carry out the essential air service program under this subchapter.
• (c) The funds made available under this section shall remain available until expended.

§ 41743. Airports not receiving sufficient service

• (a) The Secretary of Transportation shall establish a program that meets the requirements of this section for improving air carrier service to airports not receiving sufficient air carrier service.
• (b) In order to participate in the program established under subsection (a), a community or consortium of communities shall submit an application to the Secretary in such form, at such time, and containing such information as the Secretary may require, including—
  • (1) an assessment of the need of the community or consortium for access, or improved access, to the national air transportation system; and
  • (2) an analysis of the application of the criteria in subsection (c) to that community or consortium.
• (c) In selecting communities, or consortia of communities, for participation in the program established under subsection (a), the Secretary shall apply the following criteria:
  • (1) On the date of submission of the relevant application under subsection (b), the airport serving the community or consortium—
    • (A) is not larger than a small hub airport, as determined using the Department of Transportation’s most recently published classification; and
    • (B) has—
      • (i) insufficient air carrier service; or
      • (ii) unreasonably high air fares.
  • (2) The airport presents characteristics, such as geographic diversity or unique circumstances, that will demonstrate the need for, and feasibility of, the program established under subsection (a).
  • (3) Not more than 4 communities or consortia of communities, or a combination thereof, from the same State may be selected to participate in the program in any fiscal year.
  • (4)
    • (A) No more than 40 communities or consortia of communities, or a combination thereof, may be selected to participate in the program in each year for which funds are appropriated for the program.
    • (B) Except as provided in subparagraph (C), no community, consortia of communities, or combination thereof may participate in the program in support of the same project more than once in a 10-year period, but any community, consortia of communities, or combination thereof may apply, subsequent to such participation, to participate in the program in support of a different project at any time.
    • (C) The Secretary may waive the limitation under subparagraph (B) related to projects that are the same if the Secretary determines that the community or consortium spent little or no money on its previous project or encountered industry or environmental challenges, due to circumstances that were reasonably beyond the control of the community or consortium.
  • (5) The Secretary shall give priority to communities or consortia of communities where—
    • (A) air fares are higher than the average air fares for all communities;
    • (B) the community or consortium will provide a portion of the cost of the activity to be assisted under the program from local sources other than airport revenues;
    • (C) the community or consortium has established, or will establish, a public-private partnership to facilitate air carrier service to the public;
    • (D) the assistance will provide material benefits to a broad segment of the travelling public, including business, educational institutions, and other enterprises, whose access to the national air transportation system is limited;
    • (E) the assistance will be used to help restore scheduled passenger air service that has been terminated;
    • (F) the assistance will be used in a timely fashion; and
    • (G) multiple communities cooperate to submit a regional or multistate application to consolidate air service into one regional airport.
• (d) The Secretary may use amounts made available under this section—
  • (1) to provide assistance to an air carrier to subsidize service to and from an underserved airport for a period not to exceed 3 years;
  • (2) to provide assistance to an underserved airport to obtain service to and from the underserved airport; and
  • (3) to provide assistance to an underserved airport to implement such other measures as the Secretary, in consultation with such airport, considers appropriate to improve air service both in terms of the cost of such service to consumers and the availability of such service, including improving air service through marketing and promotion of air service and enhanced utilization of airport facilities.
• (e)
  • (1) The Secretary may make agreements to provide assistance under this section. The Secretary may amend the scope of a grant agreement at the request of the community or consortium and any participating air carrier, and may limit the scope of a grant agreement to only the elements using grant assistance or to only the elements achieved, if the Secretary determines that the amendment is reasonably consistent with the original purpose of the project.
  • (2) There is authorized to be appropriated to the Secretary $10,000,000 for each of fiscal years 2018 through 2023 to carry out this section. Such sums shall remain available until expended.
• (f) Under the program established under subsection (a), the Secretary shall work with air carriers providing service to participating communities and major air carriers (as defined in section 41716(a)(2)) serving large hub airports to facilitate joint-fare arrangements consistent with normal industry practice.
• (g) The Secretary shall designate an employee of the Department of Transportation—
  • (1) to function as a facilitator between small communities and air carriers;
  • (2) to carry out this section;
  • (3) to ensure that the Bureau of Transportation Statistics collects data on passenger information to assess the service needs of small communities;
  • (4) to work with and coordinate efforts with other Federal, State, and local agencies to increase the viability of service to small communities and the creation of aviation development zones; and
  • (5) to provide policy recommendations to the Secretary and Congress that will ensure that small communities have access to quality, affordable air transportation services.
• (h) The Secretary shall designate an airport in the program as an Air Service Development Zone and work with the community or consortium on means to attract business to the area surrounding the airport, to develop land use options for the area, and provide data, working with the Department of Commerce and other agencies.

§ 41744. Preservation of basic essential air service at single carrier dominated hub airports

• (a) If the Secretary of Transportation determines that extraordinary circumstances jeopardize the reliable performance of essential air service under this subchapter from a subsidized essential air service community to and from an essential airport facility, the Secretary may require an air carrier that has more than 60 percent of the total annual enplanements at the essential airport facility to take action to enable another air carrier to provide reliable essential air service to that community. Actions required by the Secretary under this subsection may include interline agreements, ground services, subleasing of gates, and the provision of any other service or facility necessary for the performance of satisfactory essential air service to that community.
• (b) In this section, the term “essential airport facility” means a large hub airport in the contiguous 48 States at which one air carrier has more than 60 percent of the total annual enplanements at that airport.

§ 41745. Community and regional choice programs

• (a)
  • (1) The Secretary of Transportation shall establish an alternate essential air service pilot program in accordance with the requirements of this section.
  • (2) In carrying out the program, the Secretary, instead of paying compensation to an air carrier to provide essential air service to an eligible place, may provide assistance directly to a unit of local government having jurisdiction over the eligible place or a State within the boundaries of which the eligible place is located.
  • (3) A unit of local government or State receiving assistance for an eligible place under the program may use the assistance for any of the following purposes:
    • (A) To provide assistance to air carriers that will use smaller equipment to provide the service and to consider increasing the frequency of service using such smaller equipment if the Secretary determines that passenger safety would not be compromised by the use of such smaller equipment and if the State or unit of local government waives the minimum service requirements under section 41732(b).
    • (B) To provide assistance to an air carrier to provide on-demand air taxi service to and from the eligible place.
    • (C) To provide assistance to a person to provide scheduled or on-demand surface transportation to and from the eligible place and an airport in another place.
    • (D) In combination with other units of local government in the same region, to provide transportation services to and from all the eligible places in that region at an airport or other transportation center that can serve all the eligible places in that region.
    • (E) To purchase aircraft to provide transportation to and from the eligible place or to purchase a fractional share in an aircraft to provide such transportation after the effective date of a rule the Secretary issues relating to fractional ownership.
    • (F) To pay for other transportation or related services that the Secretary may permit.
• (b)
  • (1) The Secretary shall establish a pilot program for not more than 10 eligible places or consortia of units of local government.
  • (2) Under the program, the sponsor of an airport serving an eligible place may elect to forego any essential air service for which compensation is being provided under this subchapter for a 10-year period in exchange for a grant from the Secretary equal in value to twice the compensation paid to provide such service in the most recent 12-month period.
  • (3) Notwithstanding any other provision of law, the Secretary shall make a grant to each airport sponsor participating in the program for use on any project that—
    • (A) is eligible for assistance under chapter 471 and complies with the requirements of that chapter;
    • (B) is located on the airport property; or
    • (C) will improve airport facilities in a way that would make such facilities more usable for general aviation.
• (c) After the effective date of the rule referred to in subsection (a)(3)(E), only those operating rules that relate to an aircraft that is fractionally owned apply when an aircraft described in subsection (a)(3)(E) is used to provide transportation described in subsection (a)(3)(E).
• (d)
  • (1) An entity seeking to participate in a program under this section shall submit to the Secretary an application in such form and containing such information as the Secretary may require.
  • (2) At a minimum, the application shall include—
    • (A) a statement of the amount of compensation or assistance required; and
    • (B) a description of how the compensation or assistance will be used.
• (e) An eligible place for which compensation or assistance is provided under this section in a fiscal year shall not be eligible in that fiscal year for the essential air service that it would otherwise be entitled to under this subchapter.
• (f) A unit of local government participating in the program under this subsection (a) in a fiscal year shall not be prohibited from participating in the basic essential air service program under this subchapter in a subsequent fiscal year if such unit is otherwise eligible to participate in such program.
• (g) Amounts appropriated or otherwise made available to carry out the essential air service program under this subchapter shall be available to carry out this section.

§ 41746. Tracking service

The Secretary of Transportation shall require a carrier that provides essential air service to an eligible place and that receives compensation for such service under this subchapter to report not less than semiannually—

• (1) the percentage of flights to and from the place that arrive on time as defined by the Secretary; and
• (2) such other information as the Secretary considers necessary to evaluate service provided to passengers traveling to and from such place.

§ 41748. Marketing program

• (a) The Secretary of Transportation shall establish a marketing incentive program for eligible places that receive subsidized service by an air carrier under section 41733. Under the program, the sponsor of the airport serving such an eligible place may receive a grant of not more than $50,000 in a fiscal year to develop and implement a marketing plan to increase passenger boardings and the level of passenger usage of its airport facilities.
• (b)
  • (1) Except as provided in paragraphs (2) and (3), not less than 25 percent of the publicly financed costs associated with a marketing plan to be developed and implemented under this section shall come from non-Federal sources. For purposes of this section—
    • (A) the non-Federal portion of the publicly financed costs may be derived from contributions in kind; and
    • (B) matching contributions from a State or unit of local government may not be derived, directly or indirectly, from Federal funds, but the use by the State or unit of local government of proceeds from the sale of bonds to provide the matching contribution is not considered to be a contribution derived directly or indirectly from Federal funds, without regard to the Federal income tax treatment of interest paid on those bonds or the Federal income tax treatment of those bonds.
  • (2) Except as provided in paragraph (3), if, after any 12-month period during which a marketing plan has been in effect under this section with respect to an eligible place, the Secretary determines that the marketing plan has increased average monthly boardings, or the level of passenger usage, at the airport serving the eligible place, by 25 percent or more, then only 10 percent of the publicly financed costs associated with the marketing plan shall be required to come from non-Federal sources under this subsection for the following 12-month period.
  • (3) If, after any 12-month period during which a marketing plan has been in effect under this section with respect to an eligible place, the Secretary determines that the marketing plan has increased average monthly boardings, or the level of passenger usage, at the airport serving the eligible place, by 50 percent or more, then no portion of the publicly financed costs associated with the marketing plan shall be required to come from non-Federal sources under this subsection for the following 12-month period.

§ 41761. Purpose

The purpose of this subchapter is to improve service by jet aircraft to underserved markets by providing assistance, in the form of Federal credit instruments, to commuter air carriers that purchase regional jet aircraft for use in serving those markets.

§ 41762. Definitions

In this subchapter, the following definitions apply:

• (1) The term “air carrier” means any air carrier holding a certificate of public convenience and necessity issued by the Secretary of Transportation under section 41102.
• (2) The term “aircraft purchase” means the purchase of commercial transport aircraft, including spare parts normally associated with the aircraft.
• (3) The term “capital reserve subsidy amount” means the amount of budget authority sufficient to cover estimated long-term cost to the United States Government of a Federal credit instrument, calculated on a net present value basis, excluding administrative costs and any incidental effects on Government receipts or outlays in accordance with provisions of the Federal Credit Reform Act of 1990 ( 2 U.S.C. 661 et seq.).
• (4) The term “commuter air carrier” means an air carrier that primarily operates aircraft designed to have a maximum passenger seating capacity of 75 or less in accordance with published flight schedules.
• (5) The term “Federal credit instrument” means a secured loan, loan guarantee, or line of credit authorized to be made under this subchapter.
• (6) The term “financial obligation” means any note, bond, debenture, or other debt obligation issued by an obligor in connection with the financing of an aircraft purchase, other than a Federal credit instrument.
• (7) The term “lender” means any non-Federal qualified institutional buyer (as defined by section 230.144A(a) of title 17, Code of Federal Regulations (or any successor regulation) known as Rule 144A(a) of the Security and Exchange Commission and issued under the Security Act of 1933 ( 15 U.S.C. 77a et seq.)), including—
  • (A) a qualified retirement plan (as defined in section 4974(c) of the Internal Revenue Code of 1986) that is a qualified institutional buyer; and
  • (B) a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986) that is a qualified institutional buyer.
• (8) The term “line of credit” means an agreement entered into by the Secretary with an obligor under section 41763(d) to provide a direct loan at a future date upon the occurrence of certain events.
• (9) The term “loan guarantee” means any guarantee or other pledge by the Secretary under section 41763(c) to pay all or part of any of the principal of and interest on a loan or other debt obligation issued by an obligor and funded by a lender.
• (10) The term “new entrant air carrier” means an air carrier that has been providing air transportation according to a published schedule for less than 5 years, including any person that has received authority from the Secretary to provide air transportation but is not providing air transportation.
• (11) The term “obligor” means a party primarily liable for payment of the principal of or interest on a Federal credit instrument, which party may be a corporation, partnership, joint venture, trust, or governmental entity, agency, or instrumentality.
• (12) The term “regional jet aircraft” means a civil aircraft—
  • (A) powered by jet propulsion; and
  • (B) designed to have a maximum passenger seating capacity of not less than 30 nor more than 75.
• (13) The term “secured loan” means a direct loan funded by the Secretary in connection with the financing of an aircraft purchase under section 41763(b).
• (14) The term “underserved market” means a passenger air transportation market (as defined by the Secretary) that—
  • (A) is served (as determined by the Secretary) by a nonhub airport or a small hub airport;
  • (B) is not within a 40-mile radius of an airport that each year has at least .25 percent of the total annual boardings in the United States; and
  • (C) the Secretary determines does not have sufficient air service.

§ 41763. Federal credit instruments

• (a) Subject to this section and section 41766, the Secretary of Transportation may enter into agreements with one or more obligors to make available Federal credit instruments, the proceeds of which shall be used to finance aircraft purchases.
• (b)
  • (1)
    • (A) A secured loan under this section with respect to an aircraft purchase shall be on such terms and conditions and contain such covenants, representatives, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
    • (B) No secured loan may be made under this section—
      • (i) that extends to more than 50 percent of the purchase price (including the value of any manufacturer credits, post-purchase options, or other discounts) of the aircraft, including spare parts, to be purchased; or
      • (ii) that, when added to the remaining balance on any other Federal credit instruments made under this subchapter, provides more than $100,000,000 of outstanding credit to any single obligor.
    • (C) The final payment on the secured loan shall not be due later than 18 years after the date of execution of the loan agreement.
    • (D) The secured loan may be subordinate to claims of other holders of obligations in the event of bankruptcy, insolvency, or liquidation of the obligor as determined appropriate by the Secretary.
    • (E) The Secretary, subject to appropriations, may establish fees at a level sufficient to cover all or a portion of the administrative costs to the United States Government of making a secured loan under this section. The proceeds of such fees shall be deposited in an account to be used by the Secretary for the purpose of administering the program established under this subchapter and shall be available upon deposit until expended.
  • (2)
    • (A) The Secretary shall establish a repayment schedule for each secured loan under this section based on the projected cash flow from aircraft revenues and other repayment sources.
    • (B) Scheduled loan repayments of principal and interest on a secured loan under this section shall commence no later than 3 years after the date of execution of the loan agreement.
  • (3)
    • (A) After satisfying scheduled debt service requirements on all financial obligations and secured loans and all deposit requirements under the terms of any trust agreement, bond resolution, or similar agreement securing financial obligations, the secured loan may be prepaid at anytime without penalty.
    • (B) The secured loan may be prepaid at any time without penalty from proceeds of refinancing from non-Federal funding sources.
• (c)
  • (1) A loan guarantee under this section with respect to a loan made for an aircraft purchase shall be made in such form and on such terms and conditions and contain such covenants, representatives, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
  • (2) No loan guarantee shall be made under this section—
    • (A) that extends to more than the unpaid interest and 50 percent of the unpaid principal on any loan;
    • (B) that, for any loan or combination of loans, extends to more than 50 percent of the purchase price (including the value of any manufacturer credits, post-purchase options, or other discounts) of the aircraft, including spare parts, to be purchased with the loan or loan combination;
    • (C) on any loan with respect to which terms permit repayment more than 15 years after the date of execution of the loan; or
    • (D) that, when added to the remaining balance on any other Federal credit instruments made under this subchapter, provides more than $100,000,000 of outstanding credit to any single obligor.
  • (3) The Secretary, subject to appropriations, may establish fees at a level sufficient to cover all or a portion of the administrative costs to the United States Government of making a loan guarantee under this section. The proceeds of such fees shall be deposited in an account to be used by the Secretary for the purpose of administering the program established under this subchapter and shall be available upon deposit until expended.
• (d)
  • (1) Subject to the requirements of this subsection, the Secretary may enter into agreements to make available lines of credit to one or more obligors in the form of direct loans to be made by the Secretary at future dates on the occurrence of certain events for any aircraft purchase selected under this section.
  • (2)
    • (A) A line of credit under this subsection with respect to an aircraft purchase shall be on such terms and conditions and contain such covenants, representatives, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
    • (B)
      • (i) The amount of any line of credit shall not exceed 50 percent of the purchase price (including the value of any manufacturer credits, post-purchase options, or other discounts) of the aircraft, including spare parts.
      • (ii) The amount drawn in any year shall not exceed 20 percent of the total amount of the line of credit.
    • (C) Any draw on the line of credit shall represent a direct loan.
    • (D) The line of credit shall be available not more than 5 years after the aircraft purchase date.
    • (E)
      • (i) A third-party creditor of the obligor shall not have any right against the United States Government with respect to any draw on the line of credit.
      • (ii) An obligor may assign the line of credit to one or more lenders or to a trustee on the lender’s behalf.
    • (F) A direct loan under this subsection may be subordinate to claims of other holders of obligations in the event of bankruptcy, insolvency, or liquidation of the obligor as determined appropriate by the Secretary.
    • (G) The Secretary, subject to appropriations, may establish fees at a level sufficient to cover all of a portion of the administrative costs to the United States Government of providing a line of credit under this subsection. The proceeds of such fees shall be deposited in an account to be used by the Secretary for the purpose of administering the program established under this subchapter and shall be available upon deposit until expended.
  • (3)
    • (A) The Secretary shall establish a repayment schedule for each direct loan under this subsection.
    • (B) Scheduled loan repayments of principal or interest on a direct loan under this subsection shall commence no later than 3 years after the date of the first draw on the line of credit and shall be repaid, with interest, not later than 18 years after the date of the first draw.
• (e) Before entering into an agreement under this section to make available a Federal credit instrument, the Secretary, in consultation with the Director of the Office of Management and Budget, shall determine an appropriate capital reserve subsidy amount for the Federal credit instrument based on such credit evaluations as the Secretary deems necessary.
• (f) Subject to subsection (h), the Secretary may only make a Federal credit instrument available under this section if the Secretary finds that—
  • (1) the aircraft to be purchased with the Federal credit instrument is a regional jet aircraft needed to improve the service and efficiency of operation of a commuter air carrier or new entrant air carrier;
  • (2) the commuter air carrier or new entrant air carrier enters into a legally binding agreement that requires the carrier to use the aircraft to provide service to underserved markets; and
  • (3) the prospective earning power of the commuter air carrier or new entrant air carrier, together with the character and value of the security pledged, including the collateral value of the aircraft being acquired and any other assets or pledges used to secure the Federal credit instrument, furnish—
    • (A) reasonable assurances of the air carrier’s ability and intention to repay the Federal credit instrument within the terms established by the Secretary—
      • (i) to continue its operations as an air carrier; and
      • (ii) to the extent that the Secretary determines to be necessary, to continue its operations as an air carrier between the same route or routes being operated by the air carrier at the time of the issuance of the Federal credit instrument; and
    • (B) reasonable protection to the United States.
• (g) The Secretary shall not allow the combined amount of Federal credit instruments available for any aircraft purchase under this section to exceed—
  • (1) 50 percent of the cost of the aircraft purchase; or
  • (2) $100,000,000 for any single obligor.
• (h) Subject to subsection (i), no Federal credit instrument may be made under this section for the purchase of any regional jet aircraft that does not comply with the stage 3 noise levels of part 36 of title 14 of the Code of Federal Regulations, as in effect on January 1, 1999 .
• (i) No Federal credit instrument shall be made by the Secretary under this section for the purchase of a regional jet aircraft unless the commuter air carrier or new entrant air carrier enters into a legally binding agreement that requires the carrier to provide scheduled passenger air transportation to the underserved market for which the aircraft is purchased for a period of not less than 36 consecutive months after the date that aircraft is placed in service.

§ 41764. Use of Federal facilities and assistance

• (a) To permit the Secretary of Transportation to make use of such expert advice and services as the Secretary may require in carrying out this subchapter, the Secretary may use available services and facilities of other agencies and instrumentalities of the United States Government—
  • (1) with the consent of the appropriate Federal officials; and
  • (2) on a reimbursable basis.
• (b) The head of each appropriate department or agency of the United States Government shall exercise the duties and powers of that head in such manner as to assist in carrying out the policy specified in section 41761.
• (c) The Secretary shall make available to the Comptroller General of the United States such information with respect to any Federal credit instrument made under this subchapter as the Comptroller General may require to carry out the duties of the Comptroller General under chapter 7 of title 31, United States Code.

§ 41765. Administrative expenses

In carrying out this subchapter, the Secretary shall use funds made available by appropriations to the Department of Transportation for the purpose of administration, in addition to the proceeds of any fees collected under this subchapter, to cover administrative expenses of the Federal credit instrument program under this subchapter.

§ 41766. Funding

Of the amounts appropriated under section 106(k) for each of fiscal years 2001 through 2003, such sums as may be necessary may be used to carry out this subchapter, including administrative expenses.

§ 41767. Termination

• (a) The authority of the Secretary of Transportation to issue Federal credit instruments under section 41763 shall terminate on the date that is 5 years after the date of the enactment of this subchapter.
• (b) On and after the termination date, the Secretary shall continue to administer the program established under this subchapter for Federal credit instruments issued under this subchapter before the termination date until all obligations associated with such instruments have been satisfied.