[House Report 107-77]
[From the U.S. Government Publishing Office]
107th Congress Rept. 107-77
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
TO AMEND TITLE 49, UNITED STATES CODE, TO PERMIT AIR CARRIERS TO MEET
AND DISCUSS THEIR SCHEDULES IN ORDER TO REDUCE FLIGHT DELAYS, AND FOR
OTHER PURPOSES
_______
May 23, 2001.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Transportation and
Infrastructure, submitted the following
R E P O R T
[To accompany H.R. 1407]
[Including cost estimate of the Congressional Budget Office]
The Committee on Transportation and Infrastructure, to whom
was referred the bill (H.R. 1407) to amend title 49, United
States Code, to permit air carriers to meet and discuss their
schedules in order to reduce flight delays, and for other
purposes, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SCHEDULING COMMITTEES, DISCUSSIONS, AND AGREEMENTS.
(a) In General.--Chapter 401 of title 49, United States Code, is
amended by adding at the end the following:
``Sec. 40129. Air carrier discussions and agreements relating to flight
scheduling
``(a) Discussions To Reduce Delays.--
``(1) Request.--An air carrier may file with the Secretary of
Transportation a request for authority to discuss with one or
more other air carriers or foreign air carriers agreements or
cooperative arrangements relating to limiting flights at an
airport during a time period that the Secretary determines that
scheduled air transportation exceeds the capacity of the
airport. The purpose of the discussion shall be to reduce
delays at the airport during such time period.
``(2) Approval.--The Secretary shall approve a request filed
under this subsection if the Secretary finds that the
discussions requested will facilitate voluntary adjustments in
air carrier schedules that could lead to a substantial
reduction in travel delays and improvement of air
transportation service to the public. The Secretary may impose
such terms and conditions to an approval under this subsection
as the Secretary determines are necessary to protect the public
interest and to carry out the objectives of this subsection.
``(3) Notice.--Before a discussion may be held under this
subsection, the Secretary shall provide at least 3 days notice
of the proposed discussion to all air carriers and foreign air
carriers that are providing service to the airport that will be
the subject of such discussion.
``(4) Monitoring.--The Secretary or a representative of the
Secretary shall attend and monitor any discussion or other
effort to enter into an agreement or cooperative arrangement
under this subsection.
``(5) Discussions open to public.--A discussion held under
this subsection shall be open to the public.
``(b) Agreements.--
``(1) Request.--An air carrier may file with the Secretary a
request for approval of an agreement or cooperative arrangement
relating to interstate air transportation, and any modification
of such an agreement or arrangement, reached as a result of a
discussion held under subsection (a).
``(2) Approval.--The Secretary shall approve an agreement,
arrangement, or modification for which a request is filed under
this subsection if the Secretary finds that the agreement,
arrangement, or modification is not adverse to the public
interest and is necessary to reduce air travel delays and that
a substantial reduction in such delays cannot be achieved by
any other immediately available means.
``(3) Secretarial imposed terms and conditions.--The
Secretary may impose such terms and conditions on an agreement,
arrangement, or modification for which a request is filed under
this subsection as the Secretary determines are necessary to
protect the public interest and air service to an airport that
has less than .25 percent of the total annual boardings in the
United States.
``(c) Limitations.--
``(1) Rates, fares, charges, and in-flight services.--The
participants in a discussion approved under subsection (a) may
not discuss or enter into an agreement or cooperative
arrangement regarding rates, fares, charges, or in-flight
services.
``(2) City pairs.--The participants in a discussion approved
under subsection (a) may not discuss particular city pairs or
submit to another air carrier or foreign air carrier
information concerning their proposed service or schedules in a
fashion that indicates the city pairs involved.
``(d) Termination.--This section shall cease to be in effect after
September 30, 2003; except that an agreement, cooperative arrangement,
or modification approved by the Secretary in accordance with this
section may continue in effect after such date at the discretion of the
Secretary.''.
(b) Conforming Amendment.--The analysis for such chapter is amended
by adding at the end the following:
``40129. Air carrier discussions and agreements relating to flight
scheduling.''.
SEC. 2. LIMITED EXEMPTION FROM ANTITRUST LAWS.
Section 41308 of title 49, United States Code, is amended--
(1) in subsection (b) by striking ``41309'' and inserting
``40129, 41309,''; and
(2) in subsection (c)--
(A) by inserting ``40129 or'' before ``41309'' the
first place it appears; and
(B) by striking ``41309(b)(1),'' and inserting
``40129(b) or ``41309(b)(1), as the case may be,''.
Purpose
The purpose of H.R. 1407 is to reduce delays in departures
and arrivals of aircraft at airports.
H.R. 1407, as reported, authorizes the Secretary of
Transportation to approve limited antitrust immunity to
airlines to meet and discuss their schedules under the
supervision of the Department of Transportation (DOT).
The bill is a response to the congestion and delays that
have plagued the aviation system in recent years. Between 1995
and 1999, FAA reported a 58% increase in flight delays. FAA
data shows that in 2000, delays were up an additional 20% over
1999. According to the Bureau of Transportation Statistics,
almost 40% of flights were delayed or canceled last December.
Last year was the worst on record for airline delays. Some
fear that this summer could be as bad, if not worse.
In the long term, the solution to the flight delay problem
is to increase capacity. This involves building new runways,
modernizing the air traffic control system and redesigning the
routes that aircraft fly. However, most of these solutions will
likely take years to bear fruit. The Committee believes that
action is needed now to help alleviate this problem.
The Committee is aware that some suggest using congestion
or peak hour pricing to dampen demand or spread flights
throughout the day in order to reduce delays. The reported bill
does not adopt that approach. Higher fees would likely be
passed on to passengers in the form of higher fares at a time
when people some complain that fares are too high. Also,
smaller airlines, new airlines, and airlines that serve small
communities would likely be priced out of the market by higher
fees. This would result in less competition and reduced service
to small communities. Coordination of airline schedules,
properly supervised by DOT, should not have these negative
affects.
The immunity approach in H.R. 1407 is similar to the
approach taken in 1984 and 1987. On August 31, 1984, the Civil
Aeronautics Board issued order 84-8-129 granting antitrust
immunity to airlines to meet and discuss their schedules. In
1987, the Department of Transportation (DOT) issued a similar
grant of antitrust immunity. In both cases, the immunity
allowed airlines to meet for the purpose of coordinating
schedules and led to a reduction in delays. There is no
indication that it led to less competition or higher fares.
However, in 1989, DOT's antitrust immunity authority lapsed.
In April, FAA issued its Airport Capacity Benchmarks
Report. These benchmarks show that during certain periods of
the day, the number of scheduled flights exceeds the capacity
of the airport while during other times there is room for
additional flights. Under H.R. 1407, airlines could meet and
discuss adjustments in their schedules to reduce these peaks
and thereby reduce delays. There would not necessarily be any
reduction in the total number of flights.
Some have expressed concern that this bill would be
anticompetitive. However there are safeguards included in the
bill to ensure that nothing improper occurs. The primary
safeguard is that any airline meeting would have to be approved
by DOT and monitored by DOT officials. Any agreement reached as
a result of that meeting could not go into effect unless it is
approved by DOT.
Others have expressed concern that this legislation would
harm air service to small communities. Under current law,
airlines are free to enter and leave markets as long as no
community listed on an airline certificate in 1978 is left
without any air service. Nothing in this bill is intended to
change that.
Nevertheless, the Committee is aware that some small
communities may feel that their air service would be
particularly vulnerable under this legislation. It is important
to note that the objectives of the bill can be achieved by
adjusting the timing of the flights without actually
eliminating any flights. However, in order to alleviate any
concerns that may exist, the reported bill authorizes the DOT
Secretary to impose terms and conditions on an airline
schedule-adjustment agreement to protect the public interest or
to protect air service to communities that are characterized as
small hubs or non-hubs. This is not intended to give the
Secretary any new powers to require air service to small
communities outside of the agreement.
On April 26, 2001, the Subcommittee held a hearing on H.R.
1407. At that time, the airlines and the air traffic
controllers testified in support of the bill. In addition, the
Air Line Pilots Association submitted a letter expressing its
support for the legislation. At an earlier hearing on April 4,
Secretary Mineta indicated that he supported the antitrust
immunity approach.
Section-by-Section Summary of H.R. 1407
Section 1 establishes a new Section 40129 in Title 49 of
the U.S. Code.
Paragraph (a)(1) authorizes an airline to request from DOT
authority to meet with other airlines or foreign airlines in
order to discuss their schedules in an effort to reduce delays.
Paragraph (a)(2) authorizes the Secretary of DOT to approve
any request filed under (a)(1) if the Secretary finds that the
requested meeting would facilitate voluntary adjustments to
airline schedules that could lead to a substantial reduction in
travel delays. DOT can impose any conditions to this
authorization.
Paragraph (a)(3) requires the Secretary to notify airlines
and foreign airlines that are providing service to the airport
affected of the proposed discussions at least 3 days in advance
of those discussions.
Paragraph (a)(4) directs the Secretary or his
representative to attend and monitor any airline discussion of
their schedules.
Paragraph (a)(5) mandates that any scheduling discussions
be open to the public.
Subsection (b) applies to any agreements reached as a
result of the above discussions.
Paragraph (b)(1) authorizes an airline to file with the
Secretary a request for approval of any agreement reached as a
result of the scheduling discussions and any modification of
such an agreement.
Paragraph (b)(2) authorizes the Secretary of DOT to approve
any scheduling agreement if the Secretary decides that the
agreement is not adverse to the public interest and is
necessary to reduce delays and that the reduction cannot be
achieved by any other immediately available means.
Paragraph (b)(3) authorizes the Secretary to impose any
terms or conditions on any agreement approved under (b)(2) that
are needed to protect the public interest and to protect air
service to non-hubs and small hubs.
Subsection (c) sets forth the limitations on the
discussions and agreements authorized above.
Paragraph (c)(1) states that the airlines cannot discuss
their prices or in-flight services.
Paragraph (c)(2) states that the airlines cannot discuss
specific city pairs.
Subsection (d) states that the authority under this bill
shall terminate on September 20, 2003, except that any
scheduling agreement reached before then may continue after
that date at the discretion of the Secretary.
Section 2 amends section 41308 of Title 49 to authorize the
Secretary of DOT to grant an exemption from the antitrust laws
under the circumstances specified in Section 1 above. Although
section 41308 is in a chapter covering foreign air
transportation, this amendment to section 41308 is intended to
apply to domestic air transportation.
Hearings and Legislative History
On April 26, 2001, the Aviation Subcommittee held a hearing
on H.R. 1407. Testimony was given by the Air Transport
Association, the Regional Airline Association, and the National
Air Traffic Controllers Association.
Committee Consideration
On May 16, 2001, the Full Committee met in open session and
approved H.R. 1407 by voice vote.
Rollcall Votes
Clause 3(b) of rule XIII of the House of Representatives
requires each committee report to include the total number of
votes cast for and against on each rollcall vote on a motion to
report and on any amendment offered to the measure or matter,
and the names of those members voting for and against. There
were no recorded votes on H.R. 1407.
Committee Oversight Findings
With respect to the requirements of clause 3(c)(1) of rule
XIII of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in this report.
Cost of Legislation
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives does not apply where a cost estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974 has been timely submitted prior to the filing of the
report and is included in the report. Such a cost estimate is
included in this report.
Compliance With House Rule XIII
1. With respect to the requirement of clause 3(c)(2) of
rule XIII of the Rules of the House of Representatives, and
308(a) of the Congressional Budget Act of 1974, the Committee
references the report of the Congressional Budget Office
included below.
2. With respect to the requirement of clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, the
performance goals and objective of this legislation are to
reduce departure and arrival delays of airlines.
3. With respect to the requirement of clause 3(c)(3) of
rule XIII of the Rules of the House of Representatives and
section 402 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R.
1407 from the Director of the Congressional Budget Office.
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 18, 2001.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure, House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1407, a bill to
amend title 49, United States Code, to permit air carriers to
meet and discuss their schedules in order to reduce flight
delays, and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark Hadley.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
H.R. 1407--A bill to amend title 49, United States Code, to permit air
carriers to meet and discuss their schedules in order to reduce
flight delays, and for other purposes
H.R. 1407 would exempt air carriers from antitrust laws
through 2003, under certain conditions. Under the bill, air
carriers could cooperate to limit flights at airports where
scheduled flights exceed capacity if the Secretary of
Transportation determines that such agreements would reduce
travel delays and improve service to the public. H.R. 1407
would require that a representative of the Department of
Transportation (DOT) monitor discussions among airlines for
this purpose, and that any discussions be open to the public.
The bill would not allow air carriers to discuss fares,
services, or the city pairs involved with such flights.
Based on information from DOT, CBO estimates that the
annual cost of monitoring discussions between air carriers
would be negligible and subject to the availability of
appropriated funds. H.R. 1407 would not affect direct spending
or receipts; therefore, pay-as-you-go procedures do not apply.
H.R. 1407 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact is Mark Hadley. This estimate was
approved by Peter H. Fontaine, Deputy Assistant Director for
Budget Analysis.
Constitutional Authority Statement
Pursuant to clause (3)(d)(1) of rule XIII of the Rules of
the House of Representatives, committee reports on a bill or
joint resolution of a public character shall include a
statement citing the specific powers granted to the Congress in
the Constitution to enact the measure. The Committee on
Transportation and Infrastructure finds that Congress has the
authority to enact this measure pursuant to its powers granted
under Article I, Section 8 of the Constitution.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act. (Public Law 104-4.)
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act. (Public Law
104-1.)
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 49, UNITED STATES CODE
* * * * * * *
SUBTITLE VII--AVIATION PROGRAMS
* * * * * * *
PART A--AIR COMMERCE AND SAFETY
SUBPART I--GENERAL
CHAPTER 401--GENERAL PROVISIONS
Sec.
40101. Policy.
* * * * * * *
40129. Air carrier discussions and agreements relating to flight
scheduling.
* * * * * * *
Sec. 40129. Air carrier discussions and agreements relating to flight
scheduling
(a) Discussions To Reduce Delays.--
(1) Request.--An air carrier may file with the
Secretary of Transportation a request for authority to
discuss with one or more other air carriers or foreign
air carriers agreements or cooperative arrangements
relating to limiting flights at an airport during a
time period that the Secretary determines that
scheduled air transportation exceeds the capacity of
the airport. The purpose of the discussion shall be to
reduce delays at the airport during such time period.
(2) Approval.--The Secretary shall approve a request
filed under this subsection if the Secretary finds that
the discussions requested will facilitate voluntary
adjustments in air carrier schedules that could lead to
a substantial reduction in travel delays and
improvement of air transportation service to the
public. The Secretary may impose such terms and
conditions to an approval under this subsection as the
Secretary determines are necessary to protect the
public interest and to carry out the objectives of this
subsection.
(3) Notice.--Before a discussion may be held under
this subsection, the Secretary shall provide at least 3
days notice of the proposed discussion to all air
carriers and foreign air carriers that are providing
service to the airport that will be the subject of such
discussion.
(4) Monitoring.--The Secretary or a representative of
the Secretary shall attend and monitor any discussion
or other effort to enter into an agreement or
cooperative arrangement under this subsection.
(5) Discussions open to public.--A discussion held
under this subsection shall be open to the public.
(b) Agreements.--
(1) Request.--An air carrier may file with the
Secretary a request for approval of an agreement or
cooperative arrangement relating to interstate air
transportation, and any modification of such an
agreement or arrangement, reached as a result of a
discussion held under subsection (a).
(2) Approval.--The Secretary shall approve an
agreement, arrangement, or modification for which a
request is filed under this subsection if the Secretary
finds that the agreement, arrangement, or modification
is not adverse to the public interest and is necessary
to reduce air travel delays and that a substantial
reduction in such delays cannot be achieved by any
other immediately available means.
(3) Secretarial imposed terms and conditions.--The
Secretary may impose such terms and conditions on an
agreement, arrangement, or modification for which a
request is filed under this subsection as the Secretary
determines are necessary to protect the public interest
and air service to an airport that has less than .25
percent of the total annual boardings in the United
States.
(c) Limitations.--
(1) Rates, fares, charges, and in-flight services.--
The participants in a discussion approved under
subsection (a) may not discuss or enter into an
agreement or cooperative arrangement regarding rates,
fares, charges, or in-flight services.
(2) City pairs.--The participants in a discussion
approved under subsection (a) may not discuss
particular city pairs or submit to another air carrier
or foreign air carrier information concerning their
proposed service or schedules in a fashion that
indicates the city pairs involved.
(d) Termination.--This section shall cease to be in effect
after September 30, 2003; except that an agreement, cooperative
arrangement, or modification approved by the Secretary in
accordance with this section may continue in effect after such
date at the discretion of the Secretary.
SUBPART II--ECONOMIC REGULATION
* * * * * * *
CHAPTER 413--FOREIGN AIR TRANSPORTATION
* * * * * * *
Sec. 41308. Exemption from the antitrust laws
(a) * * *
(b) Exemption Authorized.--When the Secretary of
Transportation decides it is required by the public interest,
the Secretary, as part of an order under section [41309] 40129,
41309, or 42111 of this title, may exempt a person affected by
the order from the antitrust laws to the extent necessary to
allow the person to proceed with the transaction specifically
approved by the order and with any transaction necessarily
contemplated by the order.
(c) Exemption Required.--In an order under section 40129 or
41309 of this title approving an agreement, request,
modification, or cancellation, the Secretary, on the basis of
the findings required under section [41309(b)(1),] 40129(b) or
41309(b)(1), as the case may be, shall exempt a person affected
by the order from the antitrust laws to the extent necessary to
allow the person to proceed with the transaction specifically
approved by the order and with any transaction necessarily
contemplated by the order.
* * * * * * *