[Federal Register: August 23, 2006 (Volume 71, Number 163)]
[Rules and Regulations]
[Page 49344-49347]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23au06-11]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 294
[OST Docket No. 2006-25691]
RIN 2105-AD58
Canadian Charter Air Taxi Operators
AGENCY: Department of Transportation (DOT); Office of the Secretary
(OST).
ACTION: Final rule.
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SUMMARY: DOT is updating its rule concerning Canadian charter air taxis
to make the rule consistent with the 1995 U.S.-Canada bilateral
aviation agreement. When promulgated in 1981, the rule comported with
the 1974 U.S.-Canada bilateral aviation agreement governing non-
scheduled air services. However, the rule has not been updated to
reflect the more liberal 1995 bilateral. Consequently, the rule, in its
current form, contains certain restrictions on Canadian charter air
taxis that are contrary to the 1995 bilateral. This final rule
eliminates or amends those provisions. It also makes several other
[[Page 49345]]
technical changes to the rule and adds a provision making it clear that
Canadian charter air taxis are exempt from the statutory requirement of
foreign air carriers to file family assistance plans.
DATES: Effective Date: This rule is effective on September 22, 2006.
FOR FURTHER INFORMATION CONTACT: Jonathan Dols, Supervisory Trial
Attorney, Office of the Assistant General Counsel for Aviation
Enforcement and Proceedings, Office of the General Counsel, U.S.
Department of Transportation, 400 7th Street, SW., Room 4116,
Washington, DC 20590; (202) 366-9342 (Voice) or (202) 366-7152 (Fax).
SUPPLEMENTARY INFORMATION:
Background
Part 294 of the Department's aviation economic regulations (14 CFR
part 294) exempts foreign air carriers that have registered with the
Department as ``Canadian charter air taxis'' from various provisions in
Title 49 of the United States Code, including the requirement in
sections 41301 and 41302 to obtain a foreign air carrier permit before
engaging in foreign air transportation. In 1981, when the Civil
Aeronautics Board \1\ (CAB) promulgated part 294, it intended to
provide Canadian charter air taxis with a simplified and expedited
economic licensing process. Central to the CAB's reasoning in
establishing this special licensing status for Canadian charter air
taxis was its opinion that ``we [the United States] have good aviation
relations with our Canadian neighbors''--a description that is even
more apt today.\2\
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\1\ The Department assumed the CAB's jurisdiction over aviation
economic matters when the CAB ``sunsetted'' on December 31, 1984.
Civil Aeronautics Board Sunset Act of 1984, Public Law 98-443,
October 4, 1984, and Airline Deregulation Act of 1978, Public Law
95-504, October 24, 1978.
\2\ Proposed Rule to Classify and Exempt Canadian Air Taxi
Operators, 45 FR 80117, December 3, 1980.
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On February 24, 1995, the United States and Canada greatly
liberalized their commercial aviation relationship by signing the Air
Transport Agreement Between the Government of the United States of
America and the Government of Canada (hereinafter the ``Agreement'' or
the ``1995 Bilateral''). Among other things, the Agreement granted
American and Canadian air carriers, including Canadian charter air
taxis, rights to conduct a wide array of operations not permitted under
the countries' previous bilateral agreement governing non-scheduled air
services, which had been in force since 1974 (hereinafter the ``1974
Bilateral'').\3\ On November 10, 2005, Delegations from the United
States and Canada initialed an ad referendum protocol to the Agreement
that would further expand the traffic rights of the air carriers of
both nations (hereinafter the ``Protocol'').\4\
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\3\ Non-Scheduled Air Service Agreement Between the Government
of the United States of America and the Government of Canada, signed
at Ottawa on May 8, 1974; entered into force May 8, 1974, with
exchange of notes.
\4\ Protocol to the Air Transport Agreement Between the
Governments of the United States of America and the Government of
Canada, initialed ad referendum at Washington on November 10, 2005.
The Protocol has not yet been signed by the two Governments. By its
terms, it will not come into effect before September 1, 2006.
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In 1981, at the time part 294 was promulgated, it comported with
the 1974 Bilateral. However, part 294 has not been updated since then
to reflect the more liberal aviation relationship between the U.S. and
Canada that is set forth in the 1995 Bilateral. Consequently, although
intended to facilitate the trans-border operations of Canadian charter
air taxis, part 294 has ironically become, in some respects, an
impediment to them. For example, the plain language of the following
provisions of part 294 contradicts either the spirit or the language of
the Agreement or the language as proposed by the Protocol:
(1) Sections 294.81(b) and (b)(1) permit stopovers at points within
the United States only on round-trip flights originating in Canada. The
Agreement permits stopovers on one-way and round-trip flights
originating in either country.\5\ Section 294.81(b)(2) requires that
the same aircraft stay with its passengers throughout their journey.
The Agreement contains no such restriction.
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\5\ Annex III of the Agreement.
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(2) Section 294.82 prohibits registrants from transporting persons
or property whose journey includes a prior, intervening, or subsequent
movement by air to or from a point not in the United States or Canada.
However, the Agreement allows the transportation of persons and
property by airlines designated by each party to carry international
charter traffic of passengers and cargo between any point or points in
the territory of the other party and any point or points in a third
country or countries, provided such traffic is carried via the
territory of the party that has designated the airline and makes a
stopover in that territory for at least two consecutive nights.\6\
Moreover, the Protocol would further expand third-country traffic
rights by removing the two-night stopover requirement, and, instead,
merely require that the flight in question make a traffic stop in the
airline's homeland.\7\ Accordingly, we are removing section 294.82, as
described below, in order to make clear that the third-country traffic
rights applicable to Canadian charter air taxis are coextensive with
the rights of all Canadian airlines under the Agreement, or, when the
Protocol becomes effective, the new rights under that Protocol.
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\6\ Id.
\7\ Annex III of the Agreement, as proposed to be amended by
Article 7 of the Protocol initialed at Washington, November 10,
2005.
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(3) Section 294.88 prohibits certain trans-border operations to or
from points west of Blind River, Ontario, and east of the Ontario-
Manitoba provincial line (the ``Northwest Ontario restriction''). The
Agreement grants traffic rights to the carriers of both nations between
any points or points in the United States and any point or points in
Canada.\8\ The CAB included the Northwest Ontario restriction in part
294 because the Canadian Air Transport Committee had imposed a similar
restriction on the operations of U.S. air taxis.\9\ We are aware of no
such restriction today on U.S. air taxis and, therefore, see no basis
for the Northwest Ontario restriction to remain in part 294.
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\8\ Annex III.
\9\ Order 78-11-87, In the Matter of Charter Authority of
Canadian Foreign Air Carriers, (CAB Docket 34051) (November 16,
1978).
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(4) Section 294.89 imposes an uplift ratio. The Agreement
explicitly prohibits uplift ratios.\10\
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\10\ Article 4 of the Agreement.
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These differences between part 294 and the Agreement have created
confusion in the aviation industry and imposed unnecessary costs on
Canadian charter air taxis.\11\ Moreover, they undermine the original
intent of part 294, which was to expedite the licensing process for
Canadian charter air taxis. Under present circumstances, there is a
strong incentive for Canadian charter air taxis to eschew the
``expedited'' registration process of part 294 in favor of undertaking
to meet the very requirements from which the CAB sought to relieve
them, i.e., from having to obtain a foreign air carrier permit. In
recognition of these issues, and because, as a general matter, the
Department seeks to remove unnecessary regulatory burdens and to
advance the United States-Canada air transport relationship,
[[Page 49346]]
the Department amends 14 CFR 294.81 and removes 14 CFR 294.82; 294.88;
and 294.89.
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\11\ The Department has anecdotal evidence of Canadian charter
air taxi operators turning down business otherwise permitted under
the Agreement for fear of violating part 294. Some carriers have
incurred the added legal costs of applying to the Department for
exemptions from certain of the contradictory provisions in part 294
as a means of avoiding possible enforcement action for violating
those provisions.
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In addition, the Foreign Air Carrier Family Support Act of 1997
(Pub. L. 105-148) (hereinafter ``FACFSA''), added to Title 49 of the
United States Code section 41313, ``Plans to address needs of families
of passengers involved in foreign air carrier accidents.'' Section
41313 requires all foreign air carriers with authority to operate to or
from the United States to develop and submit plans to the Department
and the National Transportation Safety Board (NTSB) that address the
needs of families of passengers involved in certain aircraft accidents.
In 1998, the Department interpreted section 41313 as not applying
to small aircraft operations and issued an order that exempted all
foreign air carriers holding Departmental authority to conduct foreign
air transportation using only small aircraft from the requirements of
section 41313.\12\ Although this order was served on those Canadian
charter air taxis that, at the time, were registered with the
Department, the exemption was, through an administrative oversight, not
subsequently codified in 14 CFR part 294. Therefore, the Department
takes this opportunity to amend 14 CFR 294.10 (Exemption authority) to
codify this order and, thereby, make it clear that Canadian charter air
taxis are not required to submit family assistance plans to the
Department or the NTSB.
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\12\ Order 98-1-31, In the Matter of the Foreign Air Carrier
Family Support Act of 1997 Exemption Under 49 U.S.C. Sec. 40109,
(DOT Docket 98-3304) (January 29, 1998).
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As a final matter, the Department hereby makes the following
additional, non-substantive administrative changes to part 294:
(1) Amend section 294.2(a) to reflect the current U.S.-Canada
bilateral aviation agreement signed in 1995.
(2) Amend sections 294.20, 294.20(b), 294.21(b), 294.22, and 294.40
to reflect the change in organizational structure that occurred when
the Special Authorities Division, which is the Departmental program
office that administers part 294, was transferred from the Office of
Aviation Analysis to the Office of International Aviation.
(3) Amend sections 294.3(e), 294.21(g), 294.50(d) to clarify that
air carrier authority granted by the Government of Canada is a
condition of receiving and maintaining an effective registration under
part 294.
(4) Amend sections 294.21(e)(1) to make clear that the onus rests
on the carrier, not the Department, to provide the Federal Aviation
Administration with a copy of the carrier's approved OST Form 4505.
(5) Amend sections 294.22 to make clear that a refiling may be made
using electronic mail, as well as by other means, so long as it is
received by the Department within 30 days of a change in a carrier's
name or operations.
(6) Amend sections 294.32 to identify the correct section in 14 CFR
part 212 that covers the bonding and escrow requirements applicable to
foreign air carriers.
Regulatory Analysis and Notices
The Administrative Procedure Act (APA) (5 U.S.C. 553) generally
requires public notice and an opportunity for public comment before
issuance of a final rule. It, however, provides an exception when an
agency finds that there is good cause for dispensing with such
procedures because they are impracticable, unnecessary, or contrary to
the public interest. We have determined that, under 5 U.S.C.
553(b)(3)(B), it is unnecessary and contrary to the public interest to
utilize the notice of proposed rulemaking and public comment procedures
for this rule because it is a corrective action required to make the
regulation consistent with an international agreement. The Department
notes that, as a temporary measure, it has in the past granted carrier-
specific exemptions obviating any problems for the recipient that would
have been caused by the discrepancies between part 294 and the
Agreement.\13\ In addition, the rule codifies an existing Departmental
order exempting Canadian charter air taxis from the statutory
requirement of foreign air carriers to file family assistance plans.
Thus, in effect, the revised regulations merely codify current
Departmental practice. All other changes are purely administrative in
nature.
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\13\ See, e.g., Notice of Action Taken, London Air Services
Limited, Exemption from 49 U.S.C. Sec. 41301 (DOT Docket 2003-
15123) (August 22, 2003).
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Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
The Department has determined that the amendments to 14 CFR part
294 in the final rule are not a significant regulatory action under
Executive Order 12866 or under the Department's Regulatory Policies and
Procedures. It has not been reviewed by the Office of Management and
Budget. The amendments will impose no additional costs on the affected
carriers. Rather, they will minimally reduce regulatory compliance
costs by eliminating any need for Canadian charter air taxis to apply
for an exemption to the outdated provisions of 14 CFR part 294 that are
not in consonance with the Agreement. Because these amendments will
have minimal economic impact on the covered carriers, no further
regulatory evaluation is necessary.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an
agency to assess the impact of regulation on small entities unless the
agency determines that a rule is not expected to have a significant
economic impact on a substantial number of small entities. The
Department certifies that this final rule will not have a significant
economic impact on a substantial number of small entities. The
amendments to 14 CFR part 294 will not change U.S. law regarding the
trans-border operations of Canadian charter air taxis or the rights
available to Canadian charter air taxis under the 1995 U.S.-Canada
bilateral aviation agreement, nor will they add any regulatory
requirements.
Executive Order 13132 (Federalism)
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132. The Department has
determined that this proposal will not have a substantial direct effect
on the States, on the relationship between the national government and
the States, or on the distribution of power and responsibilities among
the various levels of government, and therefore has no federalism
implications.
Executive Order 13084
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13084 (``Consultation and
Coordination with Indian Tribal Governments''). Because this final rule
will not significantly or uniquely affect the Indian tribal
communities, and will not impose substantial direct compliance costs,
the funding and consultation requirements of the Executive Order do not
apply.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (the Act),
enacted as Public Law 104-4 on March 22, 1995, requires each Federal
agency, to the extent permitted by law, to prepare a written assessment
of the effects of any Federal mandate in a proposed or final agency
rule that may result in the expenditure by State, local, and tribal
[[Page 49347]]
governments, in the aggregate, or by the private sector, of $100
million or more (adjusted annually for inflation) in any one year. This
final rule does not contain any Federal mandate that would result in
such expenditures. Therefore, the requirements of Title II of the Act
do not apply.
Paperwork Reduction Act
This final rule does not contain information collection
requirements that require approval by the Office of Management and
Budget (OMB) under the Paperwork Reduction Act (44 U.S.C. 2507 et
seq.).
List of Subjects in 14 CFR Part 294
Air taxis, Canada, Charter flights, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, the DOT amends 14 CFR part
294 as follows:
0
1.-2. The authority for 14 CFR part 294 continues to read as follows:
Authority: 49 U.S.C. Chapters 401 and 417.
0
3. Revise paragraph (a) of Sec. 294.2 to read as follows:
Sec. 294.2 Definitions.
* * * * *
(a) Agreement means the Air Transport Agreement Between the
Government of the United States and the Government of Canada, signed at
Ottawa, February 24, 1995, with Annexes and any amendments,
supplements, reservations, or supersessions to it.
* * * * *
0
4. Revise paragraph (e) of Sec. 294.3 to read as follows:
Sec. 294.3 General requirements for Canadian charter air taxi
operators.
* * * * *
(e) Has effective authority from the Government of Canada to
conduct charter air service between the United States and Canada.
* * * * *
0
5. Add paragraph (d) to Sec. 294.10 so that it reads as follows:
Sec. 294.10 Exemption authority.
* * * * *
(d) Section 41313 (aviation disaster family assistance plans for
foreign air carriers)
Sec. 294.20 [Amended]
0
6. Amend Sec. 294.20 introductory text and paragraph (b) by removing
the words ``Office of Aviation Analysis'' and adding in their place the
words ``Office of International Aviation.''
0
7. In Sec. 294.21, revise paragraph (b), paragraph (e)(1), and
paragraph (g) to read as follows:
Sec. 294.21 Procedure on receipt of registration form.
* * * * *
(b) Any person objecting to the registration of a Canadian charter
air taxi operator shall file an objection with the Office of
International Aviation, Special Authorities Division, and serve a copy
on the applicant within 28 days after the Department receives the
properly completed registration application. Objections shall include
any facts and arguments upon which they are based.
* * * * *
(e) * * *
(1) Issue the registration by stamping its effective date on OST
Form 4505 and sending a copy of it to the carrier.
* * * * *
(g) A registration shall not be issued until the Department
receives evidence that the applicant has effective authority issued by
the Government of Canada. The applicant must provide copies of its Air
Carrier Operating certificate and non-scheduled international license
issued by the Government of Canada.
* * * * *
0
8. In Sec. 294.22, revise the introductory text and paragraph (a)(1)
to read as follows:
Sec. 294.22 Notification to the Department of change in operations or
identifying information.
Registrants shall refile a copy of OST Form 4505 with the
Department's Office of International Aviation, Special Authorities
Division, upon any of the following events. The refiling shall be sent
by electronic mail, or other means, so as to be received by the
Department not later than 30 days after the reported event has
occurred.
(a) * * *
(1) A registration ceases to be in effect unless the Government of
Canada amends the registrant's Air Carrier Operating Certificate to
reflect the registrant's new name within 60 days of the name change and
the registrant submits to the Department a copy of its amended Canadian
authority.
* * * * *
0
9. Revise paragraph (a) of Sec. 294.32 to read as follows:
Sec. 294.32 Security arrangements for operating Public Charters.
* * * * *
(a) The Canadian charter air taxi operator shall meet the bonding
or escrow requirements applicable to foreign air carriers as set forth
in Sec. 212.8 of this chapter.
* * * * *
Sec. 294.40 [Amended]
0
10. Remove the words ``Office of Aviation Analysis'' in Sec. 294.40
and add in their place the words ``Office of International Aviation.''
0
11. Revise paragraph (d) of Sec. 294.50 to read as follows:
Sec. 294.50 Cancellation, revocation, or suspension of registration.
* * * * *
(d) The Government of Canada terminates or suspends authority it
granted to the registrant to conduct charter air service between the
United States and Canada.
* * * * *
0
12. Revise paragraph (a) of Sec. 294.60 to read as follows:
Sec. 294.60 Applications for authorization to conduct individual
operations or programs not otherwise permitted by this part.
(a) Where the terms, conditions, or limitations of this part,
particularly Sec. 294.81, require prior approval of individual flights
or charter programs, the registrant shall apply for such approval by
filing three copies of OST Form 4540 with the Office of International
Aviation, Foreign Air Carrier Licensing Division. OST Form 4540 may be
obtained from the Foreign Air Carrier Licensing Division.
* * * * *
Sec. 294.81 [Amended]
0
13. Amend Sec. 294.81 by revising paragraph (b) to read as follows:
Sec. 294.81 Local traffic prohibited.
* * * * *
(b) A registrant may grant stopover privileges at any point or
points in the United States to passengers and their accompanied baggage
as part of a single continuous operation to or from Canada.
Sec. 294.82 [Remove]
0
14. Remove section 294.82.
Sec. 294.88 [Remove]
0
15. Remove section 294.88.
Sec. 294.89 [Remove]
0
16. Remove section 294.89.
Issued this 14th day of August, 2006, at Washington, DC, under
authority delegated in 49 CFR 1.56a.
Susan McDermott,
Deputy Assistant Secretary of Transportation for Aviation and
International Affairs.
[FR Doc. E6-13664 Filed 8-22-06; 8:45 am]
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