This edition of the Cozen O’Connor Aviation Regulatory Update discusses DOT’s tentative award of Mexico City slots, DHS/TSA’s prohibitions on the in-cabin carriage of certain personal electronic devices on nonstop flights to the U.S. from 10 Middle Eastern and North African airports, DOT’s withdrawal and compliance deadline extensions for various consumer protection-related rules, GAO reports on the status of DHS’s biometric air exit system and FAA certification processes for aviation products, President Trump’s executive order on the reorganization of executive branch agencies, and the latest DOT and FAA enforcement actions.

Department of Transportation

Regulatory

DOT Tentatively Awards Mexico City Slots to Alaska Airlines, JetBlue, Southwest Airlines, Volaris and vivaAerobus

DOT issued an order to show cause tentatively awarding slot-pairs to Alaska Airlines, JetBlue Airways, Southwest Airlines, Volaris, and vivaAerobus at Mexico City’s Benito Juarez International Airport (MEX) and New York’s John F. Kennedy International Airport (JFK) that are being divested by Delta Air Lines and Aeromexico as a condition of DOT’s approval of, and grant of antitrust immunity for, Delta/Aeromexico’s joint venture. DOT proposed to assign 24 MEX slot pairs as follows: four slot pairs to Alaska Airlines for service to MEX from Los Angeles (twice daily), San Francisco, and San Diego; six slot pairs to JetBlue for twice daily service to MEX from each of Ft. Lauderdale, Orlando, and Los Angeles; four slot pairs to Southwest for service to MEX from Houston’s Hobby Airport (twice daily), Ft. Lauderdale, and Los Angeles; seven slot pairs to Volaris for service to MEX from San Antonio, Los Angeles, New York (JFK), Denver, Washington, D.C., San Jose (four flights per week), Ontario (three flights per week), Chicago, and Oakland; and three slot pairs to vivaAerobus for service to MEX from Las Vegas and New York (JFK) (twice daily). DOT also proposed to award Interjet one slot pair for service to MEX from JFK; Volaris one slot pair for JFK-MEX service; and two slot pairs to vivaAerobus for JFK-MEX service. The slots were awarded in two phases, with the first 14 flights to be operated this year and the remaining 10 flights to be operated in 2018. Upon finalization of DOT’s tentative decision, Delta and Aeromexico will be required to enter into slot transfer agreements with these slot recipients and submit such agreements to DOT for approval.

DOT Withdraws Comment Requests on Ancillary Service Fee Transparency and Airline Distribution Practices

DOT issued a notice indefinitely suspending its supplemental notice of proposed rulemaking (SNPRM) on the transparency of airline ancillary service fees. DOT also issued a notice suspending the comment period for its Request for Information (RFI) on airline industry distribution and display practices regarding airline fares, schedules, and availability information. DOT said that both the SNPRM and RFI were suspended in order to allow Trump administration appointees to further review them.

DOT Extends Compliance Deadline for Certain Passenger Protection Rules

DOT issued a notice extending the compliance deadline from February 15, 2017, to March 17, 2017, for its rules regarding codeshare disclosures and prohibition of undisclosed flight display bias based on carrier identity by carriers and ticket agents in electronic displays of the fare, schedule or availability information of multiple carriers. The rules were part of DOT’s Passenger Protection III (PP3) final rule issued last October. The extension was requested by Airlines for America (A4A) and Delta Air Lines in response to the Trump administration’s January 20, 2017, memorandum to federal agencies regarding a regulatory freeze. All other PP3 compliance dates remain in effect.

DOT Extends Compliance Deadline for New Airline Reporting Requirements on Mishandled Baggage, Wheelchairs, and Scooters

DOT issued a notice extending from January 1, 2018, to January 1, 2019, the compliance date for its recently finalized rule on airline reporting of mishandled baggage, wheelchairs, and scooters transported in aircraft cargo compartments. The final rule changed the methodology for mishandled-baggage data that airlines are required to report from the number of mishandled baggage reports and the number of domestic passenger enplanements to the number of mishandled bags and the number of enplaned bags. The rule also requires separate data to be reported on mishandled wheelchairs and scooters used by disabled passengers. The extension was granted in response to requests by A4A and Delta.

DOT Inspector General’s Report Criticizes FAA Air Traffic Controller Hiring Practices

DOT’s Office of the Inspector General issued an audit report criticizing the FAA’s air traffic controller hiring practices. The report states that although the FAA implemented a new hiring process in February 2014, it failed to effectively rollout the new process or communicate its new hiring strategy. The report also contends that the FAA has experienced delays in hiring new controllers and has not established an effective system to track applicants throughout the hiring process. The report states that unless the FAA establishes a process to effectively track controller applicants and develop processes to move applicants more quickly through the hiring process, it will continue to face challenges in meeting its goals of hiring and training enough new controllers to offset retirements. The report estimates that as many as 19 percent of FAA’s controllers are currently eligible to retire and the FAA is planning to hire more than 3,400 additional controllers over the next two years.

Enforcement

DOT Assesses Civil Penalties Against Air India for Alleged Tarmac Delay Violations

DOT issued a consent order assessing $115,000 in civil penalties against Air India for alleged tarmac delay violations. On July 3, 2014, an Air India flight from Newark to Mumbai, scheduled to depart at 4:25 p.m., was delayed due to a mechanical problem, and the aircraft remained at the gate with the aircraft door open. DOT alleges that none of the carrier’s personnel announced to passengers that they had the opportunity to deplane because the captain believed the mechanical problem would be resolved within a short time period. DOT said that beginning 30 minutes after the scheduled flight departure time and every 30 minutes thereafter until the doors closed, Air India was required to notify passengers that they could deplane the aircraft if they wished to do so. DOT found that Air India’s failure to inform passengers that they had the opportunity to deplane violated 14 C.F.R. § 259.4(b)(6) and was an unfair and deceptive practice under 49 U.S.C. § 41712. Air India was ordered to pay $57,500 in civil penalties within 30 days, with the remaining $57,500 due and payable if, within one year of the service date of the order, Air India violates the order’s cease and desist or penalty payment provisions.

Delta Air Lines Assessed $90,000 in Civil Penalties for Alleged Tarmac Delay Violations

DOT issued a consent order against Delta Air Lines for alleged failure to provide adequate food and water to passengers within two hours after one of its aircraft left the gate and remained on the tarmac, as well as for failure to provide sufficient resources to implement its tarmac delay contingency plan. DOT’s Office of Aviation Enforcement and Proceedings found that in July 2016, four Delta flights at New York (JFK) and Atlanta experienced lengthy tarmac delays during which limited or no food service was provided to passengers. DOT alleged that Delta violated 14 C.F.R. §§ 259.4(b)(3) and 259.4(b)(7) and 49 U.S.C. §§ 41712 and 42301, and assessed the carrier $90,000 in civil penalties.

DOT Directs Delta Air Lines to Cease and Desist from Alleged Violations of Full Fair Advertising Regulations

DOT issued a consent order against Delta Air Lines for alleged full fair advertising violations and unfair and deceptive practices. Benjamin Edelman and Jason Steele filed a third-party complaint on January 6, 2015, alleging that Delta misrepresented its carrier-imposed international surcharges as “taxes.” Delta responded that its new website had technical issues causing certain charges to appear under “taxes,” but that the problem was corrected within 48 hours of becoming aware of the error. DOT’s Office of Aviation Enforcement and Proceedings found that between November 14, 2014, and January 8, 2015, Delta violated 14 C.F.R. § 399.84(a) and 49 U.S.C. § 41712 by displaying its carrier-imposed surcharges as “taxes” for certain fare displays accessible using Delta SkyMiles that involved an itinerary through certain foreign countries. Due to the small scope of the noncompliant fare advertisements and Delta’s quick action in remedying the situation, DOT dismissed the complaint and did not impose civil penalties, instead directing Delta to cease and desist from further violations of this nature.

DOT Assesses $30,000 in Civil Penalties Against Virgin Atlantic Airways Limited for Alleged Full Fair Advertising Violations

DOT issued a consent order against Virgin Atlantic for allegedly violating full-fare advertising regulations, which also constitutes an unfair and deceptive practice. In a complaint filed with DOT, Benjamin Edelman stated that he visited Virgin Atlantic’s website and found taxes, fees, and carrier-imposed surcharges listed as “Taxes.” Mr. Edelman alleged that the “Taxes” description was misleading and created the impression that some of the charges listed under that heading were not imposed by the carrier. In response, Virgin Atlantic stated that the “Taxes” description was a “textual error” that was fixed immediately after its discovery and that clarification on the charges could be found in other disclaimers throughout its website. DOT found that Virgin Atlantic violated 14 C.F.R. § 399.84(a) and 49 U.S.C. § 41712, and dismissed the complaint after imposing civil penalties. Virgin Atlantic was ordered to pay $15,000 in civil penalties within 30 days, with the remaining $15,000 due and payable if, within one year of the service date of the order, Virgin Atlantic violates the order’s cease and desist or penalty payment provisions.

Federal Aviation Administration

Regulatory

FAA Extends Prohibition of Flight Operations in the Tripoli Flight Information Region

The FAA extended the Special Aviation Regulation (SFAR) prohibiting certain flights in the Tripoli (HLLL) Flight Information Region (FIR) from March 20, 2017, to March 20, 2019. The extension is due to continuing threats from political instability and terrorist activity in the region. The ongoing conflict in Libya involves anti-aircraft-capable weaponry that poses a potential danger for aircraft to be targeted. The FAA will continue to monitor the situation in Libya and determine if civil aircraft operators will be able to fly within the Tripoli FIR at a future date.

Department of Homeland Security

DHS/TSA Ban Certain Electronic Devices from Being Carried In-Cabin on Commercial Flights to the U.S. from 10 Last Point of Departure Airports in the Middle East and North Africa

The Department of Homeland Security (DHS) and the Transportation Security Administration issued a notice prohibiting the in-cabin carriage of certain personal electronic devices on flights from 10 last point of departure airports to the United States. Countries with airports affected by the new security procedures include Jordan, Egypt, Turkey, Qatar, United Arab Emirates, Saudi Arabia, Kuwait, and Morocco. Passengers on flights to the U.S. from the affected airports are not allowed to carry any electronic devices larger than a cell phone on board and electronic devices that exceed this size must be kept in checked baggage. The purpose of this new security protocol is to minimize risks posed by terrorist groups’ intentions to place explosives in electronic devices as a way to attack commercial aviation.

Government Accountability Office

GAO Report Reviews DHS Plans for a Biometric Air Exit System to Identify Overstays

GAO issued a report that analyzes the progress made by DHS in implementing a Biometric Air Exit System to identify overstays by foreign travelers to the U.S. Overstays are “individuals lawfully admitted on a temporary basis who then remain in the country beyond their authorized period of admission.” GAO previously published a report in 2013 that recommended DHS set timeframes and goals for establishing a biometric exit capability and collecting overstay data. CBP conducted four biometric entry and exit pilot programs to determine the best system for implementation in at least one U.S. airport by 2018; however, infrastructure and staffing issues continue to affect its progress. The current GAO report also analyzed the reliability of overstay data retained for fiscal years 2013 to 2015. DHS reported overstay data for foreigners entering the country through air and sea points of entry but did not report data on foreign visitors who entered the U.S. through land points of entry. DHS enforcement policy continues to focus on overstays that pose a threat to national security.

GAO Report Compares FAA Cost Estimates to Industry Cost Estimates for Airport Development

GAO published a report finding FAA’s cost estimates for planned capital development at airports from 2017-2021 are approximately $32.5 billion, or $67.5 billion dollars less than the Airports Council International-North America’s (ACI-NA) cost estimates. FAA’s cost estimates only include projects eligible for Airport Improvement Program grants, whereas ACI-NA’s cost estimates include all projects regardless of their source of funding. The report also analyzed other federal and airport funding options that could be used to help defray costs. Furthermore, GAO discussed the effects of increasing or eliminating the Passenger Facility Charges (PFC) cap.

GAO Report Finds Continuous Improvement in FAA Processes for U.S. Aviation Products

GAO issued a report on the progress made by the FAA in addressing rulemaking committees’ recommendations on its certification process and regulatory interpretation consistency. The FAA has implemented initiatives to improve its Aircraft Certification Service and expand the authority to allow other organizations to issue certificates on the FAA’s behalf. A roadmap was designed in collaboration with the European Union to reduce the “time and costs of European approval of U.S. aviation products.” This roadmap will be used as a template by the FAA when addressing similar issues with other countries. The FAA has also made efforts to ensure better clarity and consistency in its final rules and regulatory training of personnel.

Executive Office of the President

Regulatory

President Trump Issues Executive Branch Reorganization Order

President Trump issued Executive Order 13781, the “Comprehensive Plan for Reorganizing the Executive Branch,” which calls for the elimination of unnecessary agencies. The order requires agency heads to submit to the Office of Management and Budget (OMB) within 180 days of the March 13, 2017, date of the order a proposed plan to reorganize their agencies “in order to improve their efficiency, effectiveness, and accountability.” The order also calls for public comment on how to reorganize the Executive Branch. Within 180 days after the closing date for the comment period, OMB is required to submit to the president a proposed plan to reorganize the executive branch, including “recommendations to eliminate unnecessary agencies, components of agencies, and agency programs, and to merge functions.”

Congressional Action Impacting Aviation

Senate Holds Hearing Related to FAA Reauthorization

On March 23, 2017, the Senate Commerce Subcommittee on Aviation Operations, Safety and Security held a hearing titled “ FAA Reauthorization: Perspectives on Improving Airport Infrastructure and Aviation Manufacturing.” Witnesses included representatives from the airline industry, airports, the FAA, and GAO. Subcommittee Chairman Roy Blunt (R-Mo.) indicated that this hearing would be the first in a series of hearings that would address FAA reauthorization. The hearing focused on the FAA’s review and certification process for aircraft manufacturers and aviation products, airport infrastructure needs, and the FAA’s regulatory oversight.

House Transportation Committee Chairman Shuster Revives Plans to Reform Air Traffic Control

House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.) plans to revive his legislative proposal to spin off the FAA’s U.S. air traffic control function to a not-for-profit corporation. Shuster issued a statement acknowledging the inclusion of ATC reform in President Trump’s 2018 budget proposal. Shuster also stated that he hopes that a large transportation infrastructure bill will be introduced later this year. Discussions on whether a large infrastructure bill could be attached to the FAA reauthorization legislation or to a comprehensive tax reform bill continue in Congress and at the White House.