Aviation Data Modernization; Proposed Rules
Federal Register Notice
February 17, 2005
Volume 70, Number 32
Department of Transportation
Office of the Secretary
14 CFR Parts 241 and 249
Dockets No. OST-1998-4043
RIN 2105-AC71
AGENCY: Office of the Secretary, Department of Transportation.
ACTION: Notice of proposed rulemaking (NPRM).
SUMMARY: The Department of Transportation (the Department) is proposing
to revise the rules governing the nature, scope, source, and means for
collecting and processing aviation traffic data. Those reporting
requirements are known as the: Origin--Destination Survey of Airline
Passenger Traffic (O&D Survey); and Form 41, Schedule T-100--U.S. Air
Carrier Traffic and Capacity Data by Nonstop Segment and On-flight
Market and Form 41, Schedule T-100(f)--Foreign Air Carrier Traffic Data
by Nonstop Segment and On-flight Market (collectively, the T-100/T-
100(f)). Current traffic statistics no longer adequately measure the
size, scope and strength of the air travel industry. This NPRM proposes
to simplify the requirements placed upon Carriers reporting the O&D
Survey. The proposed O&D Survey will eliminate the ambiguity in the
identification of the Participating Carrier and eliminate the need for
manual data collection by designating the Issuing Carrier as the
Participating Carrier. It will also increase accuracy by expanding the
volume of data to 100 percent of Ticketed Itineraries, and make the
data more useful to Department, airport, and industry planners by
collecting broader information about the Ticketed Itinerary sale and
the scheduled itinerary details. The proposed T-100/T-100(f) will
improve the quality of the data by maximizing the congruence of the O&D
Survey and the T-100/T-100(f).
DATES: Comments must be submitted by April 18, 2005.
FOR FURTHER INFORMATION CONTACT: Richard Pittaway, Office of Aviation
Analysis, 400 Seventh St. SW., Room 6401, Washington, DC 20590, (202)
366-8856.
SUPPLEMENTARY INFORMATION:
Electronic Access
You can view and download this document by going to the Web site of
the Department's Docket Management System
(
http://dms.dot.gov/). On that page, click on "simple search." On the next page, type in the
last four digits of the docket number shown on the first page of this
document, 4043. Then click on "search." An electronic copy of this
document also may be downloaded from
http://regulations.gov and from
the Government Printing Office's Electronic Bulletin Board Service at
(202) 512-1661. Internet users may reach the Office of the Federal
Register's home page at:
http://www.archives.gov/federal_register/index.html and the Government
Printing Office's database at:
http://www.gpoaccess.gov/fr/index.html.
Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the
Department's complete Privacy Act Statement in the Federal Register
published on April 11, 2000 (65 FR 19477-78) or you may visit
http://dms.dot.gov.
Public Meeting
Based on the significant proposed changes to the O&D reporting
system, the Department is considering holding a public meeting. If
necessary, the public meeting would allow the Department to gather
additional input from the Air Carriers and other stakeholders. Any
meeting would be open to the public and a record of the meeting would
be placed in the rulemaking docket. If the Department decides a public
meeting is necessary, the Department will publish a notice announcing
the meeting in the Federal Register.
Table of Contents
A. Authority
B. Background
- Current Method of Collecting O&D Survey Data
- Current Method of Collecting T-100/T-100(f)
- Office of Inspector General's Report
- Advanced Notice of Proposed Rulemaking
C. Need for Data Modernization
- Background
- Review of Deficiencies in the Current O&D Survey
D. O&D Survey Data Usage
- The Department
- Other Government Agencies
- Other Stakeholders
E. Limitations of O&D Survey and T-100/T-100(f)
F. Need for Regulatory Action
G. Development of the Record in this Rulemaking
H. Scope of this Rulemaking
I. O&D Survey Redesign
- Summary of the Proposed O&D Survey
- Discussion of the Proposed O&D Survey
- Reporting Requirements
- Significant Issues Related to the Data to Be Collected
- Transition Period
J. T-100/T-100(f) Considerations
- Background
- T-100/T-100(f) Changes to be Considered
K. Data Dissemination
- Dissemination of Data by Month
- Proposed Construction of One-way Trips
- Proposed Proration Method
- Proposed Changes to Confidentiality
L. Rulemaking Analyses and Notices
M. Glossary
N. Proposed Rule
A. Authority
The Civil Aeronautics Board Sunset Act of 1984 (Pub. L. 98-443)
requires the Department of Transportation (the Department), under the
authority of the Secretary for Transportation (49 U.S.C. 329(b)(1)), to
collect and disseminate information on civil aeronautics and aviation
transportation in the U.S., other than that collected and disseminated
by the National Transportation Safety Board. The Department must, at
minimum, collect information on the origin and destination of
passengers and information on the number of passengers traveling by air
between any two points in air transportation. Additionally, the
Department must be responsive to the needs of the public and
disseminate information to make it easier to adapt the air
transportation system to the present and future needs of the commerce
of the U.S. (49 U.S.C. 40101(a)(7)). In meeting this responsibility,
the Department collects data submitted under 14 CFR Part 217 (Reporting
Traffic Statistics by Foreign Air Carriers in Civilian Scheduled,
Charter, and Nonscheduled Services), 14 CFR Part 241 (Uniform System of
Accounts and Reports for Large Certificated Air Carriers) and 14 CFR
Part 298 (Exemptions for Air Taxi and Commuter Air Carriers).
Under 14 CFR Part 217, Foreign Air Carriers that are authorized by
the Department to provide scheduled passenger services to or from the
U.S. must file Form 41 Schedule T-100(f) "Foreign Air Carrier Traffic
Data by Nonstop Segment and On-flight Market," accumulated in
accordance with the data elements prescribed in Section 217.5 (14 CFR
Part 217 section 217.3). These requirements reflect changes made to
international data submissions by large Air Carriers (Docket No. OST-
1996-1049, RIN 2105-AC34, 62 FR 6715; Docket No. OST-1998-4043, RIN
2139-AA08, 67 FR 49217).
Under 14 CFR Part 241, all U.S. certificated and commuter U.S. Air
Carriers must report their traffic movements in the T-100. Under 14 CFR Part 217, all Foreign Air Carriers
that operate to the U.S. must report their traffic movements involving
a U.S. point in the T-100(f). Participation in the O&D Survey is
required by 14 CFR Part 241 Section19-7. The source documents are
airline tickets ending in double-zero (major domestic markets) or zero
(all other markets), reported only by the first honoring and Operating
Air Carrier, which shall report the required data for the entire
Ticketed Itinerary.
B. Background
This NPRM is part of an effort by the Department to conduct a
broad-based review of the requirements for aviation data and to
modernize the way the Department collects, processes and disseminates
aviation data. Specifically, it addresses the collection and processing
of traffic reporting requirements described in the O&D Survey and T-
100/T-100(f). It reflects prior analyses of the aviation data collected
and processed by the Department and the effective use of that data by
the government, the airline industry, consumers, and other
stakeholders, which indicate a need to revise and update the O&D Survey
and T-100/T-100(f).
1. Current Method of Collecting O&D Survey Data
The O&D Survey collects a sample of itineraries quarterly from
large certificated U.S. Air Carriers. Foreign Air Carriers granted
antitrust immunity as part of code-share agreements with U.S. Air
Carriers contribute O&D Survey data under a similar but separate
program. The current method of gathering data for the O&D Survey
requires large certificated Air Carriers that transport passengers
(i.e. "Participating Carriers") to examine each flight coupon to
determine whether the ticket, or Ticketed Itinerary, is reportable.
Reportable tickets are those with a ticket number ending in a double-
zero (major domestic markets) or zero (all other markets). In practice,
tickets ending in zero are reported, presumably representing ten
percent of all Ticketed Itineraries. The ticket must be reported unless
it is apparent that another Participating Carrier has already reported
it. If it is not apparent, then the Participating Carrier must report
the ticket. Data are reported quarterly.
If the Participating Carrier issued the ticket, it will likely have
saved the itinerary data for use in reporting the ticket to the
Department's O&D Survey. If the Participating Carrier did not issue the
ticket, the Carrier must either receive the necessary data from the
Carrier that issued the ticket or employ staff to examine the physical
passenger document and transcribe as much of the Ticketed Itinerary as
possible from a used flight coupon.
2. Current Method of Collecting T-100/T-100(f)
The current method of gathering data for the T-100/T-100(f)
requires Reporting Carriers (e.g. all Carriers required by 14 CFR Part
217, 14 CFR Part 241, and 14 CFR Part 298 to report operating
statistics) to report the movement of traffic in accordance with the
uniform classifications prescribed. They are compiled by Flight-Stage
as actually performed and represent 100 percent of operations. The
requirements reflect revisions made to T-100/T-100(f) reporting
requirements for both Foreign and Domestic Air Carriers (Docket No.
OST-1996-1049, RIN 2105-AC34, 62 FR 6715; Docket No. OST-1998-4043, RIN
2139-AA08, 67 FR 49217). Data are submitted monthly.
3. Office of Inspector General's Report
At the request of The Bureau of Transportation Statistics (BTS),
the Office of the Inspector General (OIG) audited the Passenger Origin-
Destination Survey (O&D Survey) data submitted by the Air Carriers to
the Department. The OIG report, released in February 1998, acknowledged
that passenger data was critical for basic departmental
responsibilities and for making sound policy decisions. It declared the
O&D Survey to be insufficiently reliable for use in supporting these
decisions. Specifically, the OIG report concluded that "[a]lthough O&D
data are used by Department analysts to provide quantitative support
for key policy and funding decisions, we found that O&D data are
unreliable for use in making these important decisions." (Office of
Inspector General Audit Report Number AV-1998-086 Feb. 24, 1998 p.iii).
4. Advanced Notice of Proposed Rulemaking
In July 1998, the Office of the Assistant Secretary for Aviation
and International Affairs and BTS jointly issued an advance notice of
proposed rulemaking (ANPRM) (July 15, 1998, 63 FR 28128) as a first
step in reviewing aviation data collected by the Department (Docket
OST-1998-4043-1). The Department solicited comments about (1) whether
the existing airline traffic and financial data should be amended,
supplemented or replaced; (2) whether selected forms and reports should
be retained, modified, or eliminated; (3) whether aviation data should
be filed electronically; and (4) how the aviation data system should be
reengineered to enhance efficiency and reduce costs for both the
Department and the airline industry. The ANPRM explored not only the
scope of traffic and financial information, but also the sources of
data, the timing of the reporting of data, the methods of processing
data, and the release of data to the public. The Department
subsequently conducted additional outreach and research activities to
further assess data requirements and potential improvements to the
reporting and processing systems. In the ANPRM, the Department stated
its goal that the aviation data systems should be reviewed and
modernized to adapt to the present and future needs of commerce.
As a result of the ANPRM, the Department issued an NPRM on August
28, 2001, to assessment changes to the T-100/T-100(f) Traffic Reporting
System (Docket No. OST-1998-4043, RIN 2139-AA08, 66 FR 45201). On July
30, 2002, the Department issued a final rule modifying the T-100/T-
100(f) Traffic Reporting System (Docket No. OST-1998-4043, RIN 2139-
AA08, 67 FR 49217). This NPRM proposes additional data modernization
changes that were not previously addressed in prior rulemakings.
C. Need for Data Modernization
In 1947, the U.S. Government under the Civil Aeronautics Board
(CAB) began keeping information about the origin and destination of
passenger air travel based on passenger reservations. In 1968, the O&D
Survey was overhauled and the basis of counting passengers was changed
to the present system of counting sold tickets reported after first
use. With the exception of a few added data elements to record code-
share ticketing, the O&D Survey collected today has changed little
since 1968, although some changes were made to the T-100/T-100(f)
(Docket OST-1996-1049, RIN 2105-AC34, 62 FR 6715; Docket OST-1998-4043,
RIN 2139-AA08, 67 FR 49217). The industry, however, has changed a great
deal since then.
1. Background
Worldwide, the scheduled air transportation industry is divided
into those Carriers that share passengers with one another on the same
Air Travel Ticket, a practice called interlining, and those Carriers
that operate independently without interline agreements. For both types
of Carriers, only one Carrier serves as the Issuing Carrier, but for
interlining Carriers, the Issuing Carrier plays a coordinating role for all other Carriers
included in the Ticketed Itinerary. The Issuing Carrier is responsible
for holding the ticket purchaser's funds until they are earned, paying
taxes due to government agencies, and paying the travel agent
commission, if any. The Issuing Carrier is also known as the plating
Carrier because, in the age when flight coupons had red carbon paper
backing, the Issuing Carrier's three-digit identifier was stamped on a
metal plate that travel agents and airline ticket agents used to
imprint the first three positions of a 13-digit ticket number of an Air
Travel Ticket.
The Issuing Carrier holds the ticket purchaser's funds until they
have been earned by providing transportation to the passenger. When the
passenger's travel plans include travel on multiple Carriers on the
same Ticketed Itinerary, the Carrier that transports the passenger
provides evidence to the Issuing Carrier that the passenger has been
transported in order to receive its share of the funds. This process is
called "interline settlement" or "interline billing." When
presented with evidence that the passenger has been transported, the
Issuing Carrier credits the billing Carrier with its prorated share of
the passenger's fare. Since sharing passengers internationally is
common, the interline billing process is standardized worldwide across
all Carriers that choose to interline passengers. Because travel
agencies all over the world sell tickets on Carriers located in many
countries, and because passenger travel plans often involved multiple
Carriers, interlining Carriers and travel agents worldwide created the
standard agent ticket, which is used universally by interlining
Carriers. These Carriers use identical, or near identical, billing
processes to facilitate the handling of shared tickets. Even when
travel is scheduled on a single Carrier, extenuating circumstances due
to weather, mechanical, or other operational difficulties can result in
passengers being transported on multiple Carriers. After accommodating
a displaced passenger, the Carriers use standard interline billing
processes to transfer funds from the Issuing Carrier to the Carrier
that transported the passenger. Carriers that do not choose to
interline passengers and that do not rely on travel agents to
distribute their travel products are not bound by these standard
procedures and agreements, but most Carriers choose to use industry
standard procedures nonetheless.
Tax authorities generally require the Issuing Carrier to remit all
taxes and fees associated with the Air Travel Ticket on behalf of all
Carriers that appear on the Ticketed Itinerary. The Issuing Carrier,
regardless of the identity of the Carrier that will operate each Flight
Coupon Stage, will remit the tax tied to each Flight Coupon Stage. A
case in point is the Aviation and Transportation Security Act (ATSA),
Public law 107-71. Under the ATSA, the Issuing Carrier remits the
September 11th Security fee. Even though the fee is calculated based
upon the number of Flight Coupon Stages in the Air Travel Ticket,
carriers that transport the passengers have no responsibility for
collecting and remitting this fee.
For example, a passenger purchasing non-stop service transportation
from Washington to St. Louis and back will be assessed the September
11th Security Fee one time for each One-way Trip. The Issuing Carrier
will remit the September 11th Security Fee within 60 days of the
purchase of the ticket, regardless of the scheduled travel date. Here,
if U.S. Airways, Inc. (US Airways) issues a Ticketed Itinerary with
outbound travel on US Airways and return travel scheduled several
months later on United Air Lines (United), it is the responsibility of
US Airways, as the Issuing Carrier, to remit the September 11th
Security fees for travel on both outbound and return travel. Passengers
pay the September 11th Security fee based on the number of enplanements
described in the Ticketed Itinerary, not on the number of actual
enplanements that the exigencies of travel actually require the
passenger to make. If, on the day the passenger leaves Washington, a
problem arises that results in the passenger traveling to another city
(and, perhaps, on another Carrier) to change planes before continuing
on to St. Louis, the passenger is not assessed a second September 11th
Security Fee because the assessment of the September 11th Security Fee
was made by the Issuing Carrier when the itinerary was issued.
It is a misnomer to say that travel agents issue tickets. Travel
agents distribute (sell or issue for free) Ticketed Itineraries on
behalf of an Issuing Carrier, and send the pertinent information about
the sale, and the proceeds of the sale, to the Issuing Carrier.
Originally, travel agents remitted funds directly to Issuing Carriers.
With growing numbers of airlines, the international nature of air
travel, and growing numbers of travel agencies, Carriers and travel
agencies throughout the world formed clearing houses, which came to be
known as Bank Settlement Plans (BSPs), to provide a central location
for handling Air Travel Tickets distributed (sold) by travel agents.
There is a BSP for each country or, sometimes, clusters of countries.
Travel agencies in North America remit sales to the Airlines Reporting
Corporation (ARC), organized in the early 1980s, which operates in much
the same way that BSPs operate in other parts of the world.
When the current O&D Survey was established in the 1960s, the most
common accounting system was a lift-based system. The airline industry
used flown flight coupons, also known as lifts, as the primary source
of accounting and marketing data. It was customary to make a
reservation, and then ticket the reservation at a later time. The
ticket consisted of one flight coupon for each enplanement and a
summary or auditor's coupon. Every flight coupon contained all the
information about the itinerary.
Moving all evidence of the ticket sale to each airline's accounting
center was time-consuming and laborious. In the years prior to the
widespread use of computers, tickets sold in the U.S. took weeks to
reach the Carrier; tickets sold in foreign countries would typically
take months. Some ticket sales were processed within a week or two, but
very often sales took so long that the passenger had completed the
journey before the Issuing Carrier processed the sale of the Air Travel
Ticket. In contrast, after each flight departure, the airport personnel
sent a flight envelope containing all the flight coupons to the
Operating Air Carrier's accounting offices for processing. The flown
flight coupons came to the accounting center organized in flight
envelopes for flights departed mostly in the prior week. By virtue of
the ubiquitous red carbon paper, every flight coupon included a copy of
the entire itinerary. Therefore, in a pre-computer environment, a lift-
based accounting system organized around the lifted flight coupons made
sense. Taxes and commissions had to wait until the sale records reached
the Issuing Carrier, but in a lift-based accounting system, a Carrier's
accounting and market data needs were met with the information on the
lifted flight coupon.
In 1968, the CAB designed the O&D Survey around the lifted flight
coupon to reflect the standard procedures that were in use in the
airline industry. Collecting the ticket sale data after one coupon had
been used was not only in line with Carrier accounting practices of the
time but also had two other advantages. First, this collection method
grouped the reported tickets together in a date close to the
passenger's use of a flight coupon rather than the ticket issue date.
Second, it kept fully refunded and fully exchanged tickets from being included in the O&D Survey.
The CAB also recognized that manual procedures are labor intensive
and expensive. In keeping with the desire to minimize the burden of
collection, the CAB specified very few elements from the ticket for
collection, required only 10 percent of the tickets to be examined, and
limited the number of surveys to four a year.
The Carriers were early adopters of computer systems. The first of
the customer interactions to be automated was the reservation process.
The major Carriers built large reservation systems to match passengers
to departing aircraft. The reservations system computers had an
operating system that was designed specifically for the requirements of
Carrier reservation systems. Passengers and travel agents worldwide
called Carriers to make a reservation and the airline employees entered
the passenger information. Several of the Carriers eventually packaged
their systems as a product, called a Computer Reservation System (CRS).
They sold the ability to access the reservations system to the travel
agents. Marketed as Sabre, PARS, Apollo, and System One, the CRS owners
gained revenue from others' access to the system, and Carriers lowered
their costs because travel agents, rather than airline employees, were
now entering the passenger information into the reservations system.
When the reservations systems began to issue automated tickets, the
travel agent and the airline ticket counters achieved higher efficiency
and productivity. Automated ticketing lowered costs by copying data
already in the reservations system onto a paper ticket. However, since
the reservations computer operating system was incompatible with the
Carrier accounting computers, the information from the ticketing record
had to be copied again onto an electronic record that was transmitted
to the Carrier's accounting computer systems. Since the accounting
system received a copy of the ticket data but not a direct link to the
reservations system, the accounting system had no direct way of
recording changes made in the reservation system.1 Changes to the
passenger's reservation that were important enough to cause an agent to
re-issue the ticket would, in turn, generate a new ticket record that
would be forwarded to the accounting system. Changes to the passenger's
reservation that did not cause an agent to re-issue the ticket would
not be communicated to the accounting system. Nevertheless, whereas
moving manual ticket data from the ticket sellers to the Carriers had
been laborious, slow, and costly, the automated computerized ticketing
process opened up new possibilities to move ticket information quickly,
efficiently, and at low cost to Carriers.
Automated ticket processing opened up cost saving opportunities in
passenger revenue accounting. The huge cost of rewriting an accounting
system from lift-based to sales-based was justified, in part, because
the lift-based accounting system required hundreds of employees trained
to process the lifted flight coupons. Because a sales-based accounting
system makes use of information already stored in the computer,
Carriers gradually shifted away from reliance on information from
lifted flight coupons and toward reliance on information stored from
the ticket sale. By 2004, Carriers use sales-based accounting systems
almost exclusively.
Regardless of the accounting system, there remained a gap in data
when the itinerary included multiple Carriers. Only the Carrier that
issued the ticket had a complete computer record of it. A Carrier that
transported a passenger on a ticket that it did not issue had to employ
staff to enter the itinerary into its computer system. In the 1980s,
American Airlines initiated agreements to share ticket information
about shared passengers with Trans World Airlines, United Air Lines and
Eastern Airlines to avoid the cost of manually re-typing each other's
tickets. In 1990, the system of sharing ticket information was
formalized with an industry standard record structure for all Carriers
called Transmission Control Number (TCN) record. Whenever a Carrier
needed to share information about a ticket with the other Carriers in
the itinerary, a TCN record could be sent between Carriers.
Responsibility to oversee the data sharing was given to the Airline
Tariff Publishing Company (ATPCO). ATPCO would forward TCN records to
the operating Carriers in the itinerary on behalf of the Issuing
Carrier. The ATPCO TCN exchange service was offered to all Carriers,
although not all Carriers decided to participate.
The TCN data sharing was created as an optional service to
facilitate more efficient information exchange among interlining
Carriers electing to use the service, not as a compulsory system.
Tickets continued to be created without a corresponding TCN record.
Conversely, multiple TCNs were sometimes created to describe a single
sale. Sometimes this happened because TCN records were generated for
tickets for customers who failed to complete the purchase. Other times,
customers demanded a change that resulted in a second TCN being created
while the first could not reliably be nullified. Testing can generate a
TCN or, sometimes, TCNs by the thousands, for which there was no ticket
sale. Carriers' passenger revenue accounting systems were designed to
find the TCNs they needed for accounting purposes, ignore the
extraneous TCNs, and still be able to accept manual data on tickets for
which no TCN exists. Not all Carriers used TCN records in the course of
business. Of those that did, some created TCNs for their own
internally-issued tickets, while other Carriers did not.
After the CRSs became known as Global Distribution Systems (GDSs)
in the 1990s, they inherited the responsibility to create the TCN
records for travel agency tickets. With this development, TCNs became
the vehicle to send information about the ticket from the travel
agencies to the Issuing Carrier as well as to any other Carrier that
participated in the itinerary. The GDSs sell the TCN information to the
Carriers for a small fee. The GDSs also sell the travel agent's
reservation information. The product, called marketing information data
tapes (MIDT), contains no information about the price of the travel
except the selling class codes and is limited to segments booked
through travel agencies. The MIDT data are marketed to Carriers for use
in business planning activities.
While increasing computerization simplified many of the carriers'
data collection, processing, and exchange activities, manual collection
of the O&D Survey information became more difficult for the
Participating Carriers. With reliance on computerized ticketing and the
shift to sales-based accounting systems, there was little interest or
need to continue the practice of using carbon paper to print the whole
itinerary on all of the ticket's flight coupons. Examination of
coupons, standard procedure in the old lift-based system, is not
necessary in the normal course of business when using a sales-based
accounting system. Since the Department's O&D Survey continued to
require the Operating Air Carrier to provide information from the
lifted flight coupons, it became increasingly vital for the Operating
Air Carrier to receive information about the issuance of the ticket
from the Issuing Carrier. If the first Participating Carrier is not the
Issuing Carrier or did not receive that sale information from the
Issuing Carrier, then the Participating Carrier is required to employ staff to
locate that lifted flight coupon. This is an intensely manual process,
and it is a significant burden on limited human and financial resources
of the Operating Air Carrier. In the pre-computer era, Carriers could
draw on accounting department employees trained in obtaining
information from lifted flight coupons, but increasing reliance on
computer records and sales-based accounting systems left Carriers with
only a small number of employees with sufficient training to glean the
O&D Survey information from a lifted flight coupon. Sales processing by
computer has become so reliable that as of May 2004, the GDSs no longer
print a paper version of the auditor's coupon. Employees with the
skills needed to extract the necessary information from visual
examination of a lifted flight coupon have become increasingly scarce.
The level of effort that the current O&D Survey imposes on an
Operating Air Carrier to identify whether it is the first Participating
Carrier in the itinerary is compounded by the number of Carriers the
Department exempts from reporting to the O&D Survey. Tens of thousands
of passengers fly each day on commuter Carriers and Foreign Air
Carriers operating under code-share agreements. As a result of code-
share ticketing procedures, the identity of the Operating Air Carrier
is often hidden from an outside observer. When the Issuing Carrier does
not provide the itinerary details to the Operating Air Carrier, via a
TCN record or other means, then it is difficult for the Operating Air
Carrier to determine whether any of the other Carriers whose Airline
Designator appears on the ticket as the Marketing Carrier is scheduled
to operate the flight. A Participating Carrier may not be aware that a
Code-Share partner is scheduled to operate a flight. The CFR
specifically absolves the Participating Carrier from the burden of
determining the scheduled Operating Air Carrier if the Issuing Carrier
did not notify it and it is not a Carrier involved in the code-share
agreement.
If the reporting carrier does not know the operating carrier on
a downline code-share segment, it would use the ticketed carrier's
code for both the operating and the ticketed carriers. The reporting
carrier is not responsible for knowing the operating carrier of a
downline code-share where it is not a party to the code-share
segment.
--14 CFR Sec 19-7 V. Selection of Sample and Recording of Data
(D)(2)(b)
In addition to the higher cost, examination of a printed paper
coupon to obtain information that is usually transferred by computer
yields less information than it did in the 1960s, when manual
processing was the norm. Electronic ticketing has become the standard
practice for most U.S. Air Carriers. However, when authorization to
board a plane must be communicated between Carriers, and electronic
means are for any number of reasons unavailable, issuing a paper flight
coupon remains the standard practice of the industry.
The O&D Survey requires Participating Carriers to report
information about an entire ticket based on the knowledge of the flight
coupon they have in hand. Paper coupons today generally only contain
the information for a single flight segment. The itinerary must be
deciphered by examining the pricing area of the ticket. Unfortunately,
the pricing area lists city codes instead of airport codes. For cities
with only one airport, the limitation poses no problem, but for cities
such as New York, the pricing area will list the price to NYC. The use
of NYC obscures whether the passenger is scheduled to arrive at
LaGuardia (LGA) or Kennedy (JFK) or, for that matter, at Newark (EWR)
or Newburgh (SWF) airports.
The passengers' purchased itinerary has always been limited to four
segments per ticket because only four could be printed plainly on
carbon paper copies. If a passenger's itinerary required more than four
flight coupons, the Carriers used two or more tickets in conjunction
with each other. When the itinerary was long enough to require spanning
two tickets, the information from the second ticket was never available
to the Participating Carrier. Recognizing this, the Department exempted
the Participating Carrier from reporting the second and subsequent
conjuncted tickets from the O&D Survey. However, even when some
portions of the Ticketed Itinerary go unreported, the total amount
collected for the ticket is still reported in full. Reported flight
coupons are artificially over-valued when the full ticket value, but
only the partial itinerary, is reported. The number of partially
reported itineraries currently being reported in the O&D Survey is
assumed to be low, but since they are not detectable, there is no
ability to quantify them, and, therefore, the impact of exempting long
itineraries on the current O&D Survey is unknown.
Reliance on the ability of the Operating Air Carrier to examine the
lifted flight coupons no longer provides the best reasonably obtainable
economic information about the purchase of air travel on scheduled
Carriers. The Department acknowledges that the current O&D Survey
burdens Participating Carriers with obligations to examine the details
of lifted flight coupons that they would not ordinarily do in the
course of their business.
Significant among these burdens is the obligation to determine
first Participating Carrier. Under the requirements of the current O&D
Survey, the only way to meet the obligation of determining whether an
Operating Air Carrier is the first Participating Carrier is for each
Operating Air Carrier to examine the complete routing of every Ticketed
Itinerary that was used to transport passengers in the quarter. There
is no other way for Operating Air Carriers to determine whether or not
it is apparent that another Participating Carrier has already reported
the ticket.
The Survey data are taken from the coupon that is lifted by a
participating carrier, unless it is apparent from the lifted coupon
that another participating carrier has already recorded and reported
the data, in which instance the ticket coupon is non-reportable for
the second honoring/participating carrier.
--14 CFR Sec 19-7 Appendix A (I.) General Description of O&D Survey
(B) Narrative Description
The "unless it is apparent" standard for determining whether an
Operating Air Carrier is responsible for reporting a Ticketed Itinerary
is a difficult standard to meet. Every Operating Air Carrier must
diligently examine every Ticketed Itinerary to find out whether it has
a ticket number ending in zero. For ticket numbers ending in zero, when
the Operating Air Carrier is the initial Carrier in the routing, then
clearly it should report the Ticketed Itinerary. When the Operating Air
Carrier is the second or third Carrier in the routing, it must compare
the identifiers of the previous Carriers in the routing to the list of
Participating Carriers provided by the Department's Office of Airline
Information (OAI). Under the current regulation, even the most diligent
Participating Carrier will not report all O&D Survey tickets correctly
if there is an unrecognized code-share flight present in the itinerary,
the itinerary spans multiple physical tickets (known as conjuncted
tickets), or the itinerary includes cities with multiple airports.
2. Review of Deficiencies in the Current O&D Survey
Respondents to Docket OST-1998-4043-1 (ANPRM, July 15, 1998; 63 FR
28128) agreed that the O&D Survey, as it exists, exempts too many
passengers from the report, is cumbersome and expensive to compile, and
fails to collect key elements of information. In addition, the results
of the O&D Survey published by the Department are unwieldy to use. The Department wishes
to address problems such as those identified in the 1998 OIG report,
which concluded that O&D data were unreliable for use in key policy and
funding decisions.2 For example, the Inspector General determined
that of 8,894 city pairs, the O&D Survey report on 6,661 city pairs (69
percent) did not meet the Department's accuracy criteria when using
enplanement statistics as a benchmark. The Inspector General (IG) used
the enplanement statistics as a reliable comparison because they are
also used by the Carriers for aircraft operational purposes. The IG
cited several reasons for the inaccuracies, most of which were
attributed to the fact that the basic reporting requirements of the O&D
Survey have not been aligned with current industry practices.
a. Reporting Exemptions
Exemptions from reporting, granted in the 1960s, have become a
major problem in today's O&D Survey. For example, Carriers flying
planes with 60 or fewer seats are exempt from reporting. As such,
passengers whose entire itineraries are flown on smaller Carriers will
not be reported, yet their participation in the air transportation
system is critical. Similarly, code-share agreements between large and
small Carriers were non-existent when the current O&D Survey was
designed. Today, Carriers of all sizes are connected to a global air
transportation system through global alliances and international ticket
agreements. This intertwining of service adds complexity and increases
the potential for error when reporting Ticketed Itineraries.
For example, the IG pointed out that a Participating Carrier is
exempt from proper reporting of the code-share relationship if it has
no knowledge of that relationship. In a code-share situation, the
Carrier that transports the passenger (Operating Air Carrier) is not
the Carrier printed on the itinerary (Marketing Carrier). The Carrier
that issues the ticket is responsible for knowing when this is
occurring and notifying the passenger of the code-share situation.
However, when the Participating Carrier is not the Issuing Carrier, the
Participating Carrier cannot always report the code-share portions of
the Ticketed Itinerary properly.
Code-sharing with regional Carrier partners has created a situation
wherein customers can begin travel on a regional Carrier that does not
report the O&D Survey because of size exemptions. In that case, the
second Carrier in an itinerary should report the ticket. However, the
second Carrier may not be a code-share partner with the regional
Carrier that first transported the passenger. The second Carrier will
believe the ticket to have been reported by the first Carrier when, in
fact, it has not been reported. This causes the entire itinerary to go
unreported.
Exceptions for Foreign Air Carriers also impact the accuracy of the
O&D Survey, and the IG cited this exception as a prominent problem.
Excluding those Foreign Air Carriers granted antitrust immunity for
alliances with U.S. carriers, Foreign Air Carriers may transport
passengers without reporting their Origin and Destination traffic to
the Department. In consequence, some travelers bound for foreign
countries are counted in the Department's statistics, and some are not.
Excluding these passengers introduces a bias into the statistics that
is difficult to evaluate. As the code-share and marketing alliances
between U.S. and Foreign Air Carriers developed throughout the 1990s,
this reporting gap became even more significant.
b. Sample Size
The IG pointed out that having Participating Carriers report only
those tickets ending in zero or double-zero is not an appropriate
sample design. It is not certain that those tickets will be randomly
distributed across all Ticketed Itineraries. A survey must be based on
a random sample of the population if the results of the survey are to
be generalized to the entire population. Unfortunately, there are
indications that the sample used in the existing O&D Survey is not
entirely random, although it is not always clear how this non-
randomness occurs.
When the O&D Survey was established, ticket numbers were preprinted
sequentially on paper ticket stock. As each customer appeared, each had
an equal chance of receiving a ticket number ending in zero. Since
ticket numbers are now assigned by a computer program, the possibility
that ticket numbers are assigned for reasons other than randomness
arises. For example, a tour operator might use its block of ticket
numbers to issue all the ticket numbers that end in the same digit to
members of a particular tour, resulting in all those tickets being
selected for the sample or excluded from the sample depending on which
tour was assigned ticket numbers ending in zero. One Carrier has
analyzed its ticket numbers and found that 11 percent end in zero,
which would not occur if the numbers were entirely random. While the
sample is intended to be 10 percent of all tickets, analysis by BTS'
Office of Statistical Quality in 2001 concluded that the actual sample
size ranged from 10.1 percent in 1999 to 9.6 percent in 2000. This is a
larger variation than one would expect purely from normal sampling
error, suggesting some non-randomness in the creation or selection of
ticket numbers.
c. Definition of Origin and Destination
The common understanding of a True O&D is a passenger who is
traveling from the origin of the trip to arrive at the destination of
the trip where the individual intends to conduct business or engage in
leisure activity. Passengers generally prefer to arrive at the True O&D
destination in the fewest possible Flight-Stages, but often a passenger
travels over many Flight-Stages, many Flight Coupon Stages, and,
sometimes, many modes of transportation to reach the True O&D
destination, and in the case of a very remote destination, the journey
might take several days. The Department's intent has always been to
track, to the greatest extent possible, the passenger's intended True
O&D.
Carriers, airports, the Department, and other stakeholders use
various methodologies to approximate the passenger's True O&D. The
standard approximation is known as a One-way Trip. The principal
determination of One-way Trip is based on the time spent on the ground
between sequential Flight-Coupon Stages. A short time between
sequential Flight-Coupon Stages implies a connection in a continuing
One-way Trip. A long time on the ground between sequential Flight-
Coupon Stages implies an end of the prior One-way Trip and a beginning
of the next One-way Trip. Flight Number and Fare Basis Code are
sometimes used, in addition to time on the ground, to calculate a One-
way Trip. The One-way Trip is usually completed in a single day,
although the definition of One-way Trip encompasses the possibility
that travel continues overnight and into the following day(s).
However, the information Carriers currently supply in the
Department's O&D Survey is devoid of flight number, travel date,
departure time and arrival time, so the data collected by the
Department has left it without the ability to use time spent on the
ground to establish a One-way Trip. As a result, since the beginning of
the O&D Survey, the Department has used continuous direction of travel
as its approximation of True O&D. This methodology is known as
Directional Passenger construction. In a regulated airline environment, determining passenger trips by measure of least circuity
was an adequate measure of passenger travel. In that environment,
passengers had no incentive to travel in any direction other than
toward their destination as efficiently as possible. However, following
the extensive development of hub-and-spoke systems following
deregulation, passengers are often motivated by price or incentivized
by Carrier loyalty programs that reward taking circuitous connecting
flights even when a non-stop flight is offered.
The Department's Directional Passenger concept considers a
passenger to be on a continuous trip so long as the passenger continues
in the same direction regardless of the number of days the journey
takes, subject to certain circuity rules that allow some backtracking.
For example, the Department's circuity based rules consider an
itinerary of Albuquerque to Denver to Reno to be a single Directional
Passenger trip. However, an itinerary of Albuquerque to Denver to Las
Vegas will never be considered as a single directional trip because the
location of Las Vegas airport in relation to Albuquerque causes the
circuity check to break the trip into two directional passenger trips.
Because the Department does not collect flight date or flight time, the
O&D Survey always identifies Albuquerque to Denver to Reno as a single
Directional Passenger trip, regardless of the number of days the
passenger stays in Denver. On the other hand, regardless of the short
number of hours spent in Denver, the O&D Survey always identifies
Albuquerque to Denver to Las Vegas as one Albuquerque to Denver
Directional Passenger trip and counts the Denver to Las Vegas stage as
a separate Directional Passenger trip.
Itinerary construction and circuity rules together determine
Directional Passengers. When an Albuquerque-Las Vegas passenger
purchases a round trip ticket traveling through Denver on both the
outbound and the return trip, then the directional passenger rules will
recognize the pattern, and determine that the outbound journey should
be considered a single Albuquerque-Las Vegas trip and the return trip
to be a single Las Vegas-Albuquerque trip. However, when an
Albuquerque-Las Vegas passenger purchases a round trip ticket with the
outbound journey changing planes in Denver and a return trip changing
planes in San Francisco, then the directional passenger rules will
interpret the outbound journey to be an Albuquerque-Denver trip, the
return trip will be a San Francisco-Albuquerque trip with a separate
Denver-San Francisco trip sandwiched between them. In this situation,
the Directional Passenger construction views Las Vegas as a connecting
city and does not recognize the passenger's true intention to visit Las
Vegas. Itineraries like Albuquerque to Denver to Las Vegas have
increased as a result of the development of extensive hub-and-spoke
operations by incumbent carriers. Clearly, approximating True O&D using
the Directional Passenger method is less accurate in the current
environment than it was when it was instituted.
The Department cannot approximate True O&D consistently across all
itineraries using the O&D Survey as it is currently collected.
Furthermore, the Department cannot determine Directional Passengers on
a consistent basis because travel that is part of a stand alone
Directional Passenger trip is treated differently than if that travel
is part of a round trip, and round trips are treated differently
depending on the airport in which a passenger might choose to change
planes.
In authorizing Passenger Facility Charges (PFCs), the Congress
recognized the concept of One-way Trip in civil aviation law. No PFC on
any passenger may be imposed for more than two boardings on a One-way
Trip (14 CFR 158.9(a)(1)). The concept of One-way Trip was further
ensconced in Federal law on November 19, 2001, when Congress
established the September 11th Security Fee. Section 44940(b) and (c)
of ATSA provides that the fee may not exceed $2.50 per enplanement or
$5.00 per One-way Trip. Congress did not specify the definition of One-
way Trip, but it is commonly understood that it was to be a journey
from the passenger's point of view, concomitant with common practice.
The Carriers assess PFCs and September 11th Security Fees using
time in hub as the principal determinant of a One-way Trip. The
Department believes that the Carrier's method of determination for the
One-way Trips is an acceptable methodology. However, because the
Department uses directional travel as the determinant of its passenger
counts, it cannot effectively monitor the enforcement of these Federal
laws. Since the Department's Directional Passenger methodology for
determining passenger counts does not match the One-way Trip
methodology for determining passenger counts being used by the Air
Carriers to assess the fees, the Department's counts can, at best,
predict only the approximate value of the fees due to government
agencies.
The Department's inability to measure One-way Trips consistent with
industry standards leaves it without an adequate measure of passenger
demand for air travel in the U.S. The OIG issues reports on airline
metrics 3 that use the number of air travelers enplaned as the
measure of air traffic demand. While the number of enplanements can be
an accurate measure of passenger demand at individual airports, it has
unfortunate implications when used as a measure of nationwide air
traffic demand. When Carriers discontinue non-stop service between two
airports, leaving connecting service as the sole option of passengers
traveling between these airports, the number of enplanements doubles
since passengers must now enplane a second aircraft. When enplanements
are used as the sole measure of nationwide air travel demand,
discontinuing direct service has the perverse effect of making it
appear as if air travel demand is increasing. Thus the reduction in the
true number of persons traveling after September 11, 2001 likely would
be underestimated when using enplanements as a measure of demand,
because the airlines' reduction in the number of non-stop flights
caused the travelers to enplane more times to reach their destination.
The Department believes that some of the perceived lack of accuracy in
the O&D Survey is a result of measuring passenger traffic in terms of
the Directional Passenger in an era when airlines are providing
incentives for passengers to use circuitous connecting services.
d. Fares, Taxes, and Fees
Taxation of scheduled passenger aviation today is a combination of
percentage of fare, ticket tax, itinerary-specific taxes such as
international departure tax, and enplanement fees such as September
11th Security Fees, subject to limitations on the number of charges and
fees that can be assessed on a One-way Trip. Because the O&D Survey
commingles taxes and fees with the fare amount, exact measurement of
the portion of the ticket price that represents tax has been an
educated guess even when taxes were based on a percentage of the fare.
e. Passengers Versus Passenger Trips
It is generally believed that all the passenger counts reported in
a quarter represent passengers scheduled to fly in that quarter.
Rather, the current O&D Survey bundles all the travel on a Ticketed
Itinerary in a single quarter. The complete itinerary is reported as if it took place entirely within the quarter
in which travel commences. Therefore, a misunderstanding often exists between passengers reported
and passenger trips. For example, all passengers who travel to a
destination in December and return in January have all their travel
reported in the December quarter; none of the passengers' journeys are
reported in the first quarter of the next year.
f. Reporting Consistency
Different Carriers report data elements in different ways. For
example, some Carriers with single-service cabins report all service as
first-class, while others with single service cabins report all service
as coach. Additional reliability problems occur because the Issuing
Carrier sometimes provides the Participating Carrier with the
information saved when the Ticketed Itinerary was issued, and sometimes
it does not. When the Issuing Carrier does not provide information to
the Participating Carrier, the Participating Carrier can only know what
is printed on the lifted flight coupon and may find it difficult to
report an itinerary correctly. Lack of correct knowledge is explicitly
excused in the CFR.
When the Participating Carrier attempts to decipher the city codes
for the complete itinerary using the pricing area of the ticket,
inaccuracies can result. The designated city codes--not the airport
codes--are present in the pricing section of the ticket. When the
Carrier serves multiple airports in a metropolitan area, such as Dulles
and Reagan National Airports in Washington, the pricing area displays
WAS instead of the airport code. The segment's actual airport in that
circumstance is unknown to the Participating Carrier. This is also the
case with bulk tickets. Participating Carriers that are also Issuing
Carriers can report the ticket price accurately, while Participating
Carriers that did not issue the ticket, and did not receive a TCN,
cannot report the actual amount paid. If the ticket value is not
printed on the paper document, the Participating Carrier cannot know
how to report it correctly.
The majority of users of the government's O&D Survey data purchase
the data from third-party providers, which use internal decision rules
to interpret the data. These independent companies obtain the data from
the Department and reprocess it for sale. These companies make
assumptions about the distortions that are inherent therein. For
example, the third party providers perform extensive analysis on the
data to separate the amount that was likely paid as fare from the
amount that was likely paid as tax. Because the decision rules are
specific to third-party providers, different interpretations of the
same original data exist.
D. O&D Survey Data Usage
A diverse group of stakeholders including the Executive Branch and
Congress use traffic data to help them in making decisions that affect
the national air transportation system and the U.S. economy. Most
responses to the ANPRM, including airports, labor unions, equipment
manufacturers and industry consultants, identified the Department's
aviation data as their most important source of data. These
stakeholders depend upon the Department to provide accurate, timely,
and comprehensive aviation data.
1. The Department
Air transportation is a significant sector of the nation's economy.
Despite wars and economic downturns, the nation continues to experience
long-term increases in demand for air travel. Through its efforts to
measure economic activity, the Department affirms its role in fostering
opportunities for transportation providers to create and maintain the
best transportation system in the world and to enhance the quality of
life of the American people, today and into the future. The Department
uses aviation data to carry out its mandates, among them (1) improving
international air services by seeking market liberalization, (2)
ensuring the benefits of a deregulated, competitive domestic airline
industry, and (3) developing policies to improve air service and/or
access to the commercial aviation system for small and rural
communities.
In particular, the Department uses O&D Survey information and the
T-100/T-100(f):
- To exercise the Department's responsibilities for economic
oversight of the airline industry as mandated under 49 U.S.C. 40101,
including, but not limited to:
- (7A) "Developing and maintaining a sound regulatory
system that is responsive to the needs of the public and in which
decisions are reached promptly to make it easier to adapt the air
transportation system to the present and future needs of the commerce
of the United States";
- (9) "Preventing unfair, deceptive, predatory, or
anticompetitive practices in air transportation";
- (10) "Avoiding unreasonable industry concentration,
excessive market domination, monopoly powers, and other conditions that
would tend to allow at least one air carrier * * * unreasonably to
increase prices, reduce services, or exclude competition in air
transportation";
- (12A) "Encouraging, developing, and maintaining an air
transportation system relying on actual and potential competition to
provide efficiency, innovation, and low prices";
- (13) "Encouraging entry into air transportation markets
by new and existing air carriers and the continued strengthening of
small air carriers to ensure a more effective and competitive airline
industry"; and
- (16) "Ensuring that consumers in all regions of the
United States, including those in small communities and rural and
remote areas, have access to affordable, regularly scheduled air
service";
- As a base of information to assess, maintain, and preserve
competition in the airline industry and in specific aviation markets,
under various federal laws and programs, such as:
- To investigate allegations of unfair and deceptive
practices and unfair methods of competition, under 49 U.S.C. 41712;
- To review proposed mergers and acquisitions to assess
their competitive effect;
- To review code-share and marketing agreements between
domestic major Air Carriers, under 49 U.S.C. 41720; and
- To review applications for antitrust immunity between U.S.
and Foreign Air Carriers, under 49 U.S.C. 41308;
- To administer the Essential Air Services program assessing
the air service needs of small communities (49 U.S.C. 41743);
- To administer the Small Community Air Service Development
Program;
- To administer funds under the Aviation Investment and
Reform Act for the 21st Century;
- To administer the Air Transportation Safety and System
Stabilization Act;
- To monitor the trends and developments in the operating
and competitive structures to ensure that Department policies remain
consistent with commercial developments;
- To determine an Air Carrier's initial fitness to provide
air transportation and review an Air Carrier's continuing fitness to
provide air transportation (49 U.S.C. 41102);
- To evaluate certificate transfer applications (49 U.S.C.
41105);
- To grant or deny permits for Foreign Air Carriers to
provide transportation as a Foreign Air Carrier to the U.S. by determining whether the public interest is being served in
granting the permit (49 U.S.C. 41302) and to approve the transfer of
such permit to another Foreign Air Carrier by determining whether the
public interest is served (49 U.S.C. 41303); and
- To assemble information and prepare reports required and
requested by the President and the Congress.
The O&D Survey and T-100/T-100(f), as currently collected,
particularly impact the Department's evaluation of Air Carrier service
to smaller communities. The Essential Air Services program (EAS) and
the Small Community Air Service Development Program are directed
towards smaller markets and require evaluation of service and fares.
For example, under EAS, the Department determines the minimum level of
service required at each eligible community by specifying a hub through
which the community is linked to the national network, and specifying a
minimum service level in terms of flights and available seats. Where
necessary, the Department pays a subsidy to an Air Carrier to ensure
that the specified level of service is provided. Similarly, research
activities such as The Rural Air Fare Study,4 which was conducted
pursuant to Section 1213 of the Federal Aviation Administration
Reauthorization Act of 1996, require data on all passenger air travel,
including many smaller markets served exclusively by airlines operating
only aircraft having fewer than 60 seats.
The Federal Aviation Administration's (FAA) mandates include (1)
regulating civil aviation to promote safety, (2) encouraging and
developing civil aeronautics, including new aviation technology, (3)
developing and operating a system of air traffic control and navigation
for both civil and military aircraft, (4) researching and developing
the National Airspace System and civil aeronautics, (5) developing and
carrying out programs to control aircraft noise and other environmental
effects of civil aviation, and (6) regulating U.S. commercial space
transportation.
The FAA also administers the Airport Improvement Program (AIP)
(authorized by 49 U.S.C. Chapter 471), which has the broad objective of
assisting in the development of a nationwide system of public-use
airports adequate to meet the currently projected growth of civil
aviation. It also provides funding for airport planning and development
projects. In addition, medium and large airports where one or two
Carriers control more than 50 percent of passenger boardings must
submit a written competition plan to receive approval to impose a
Passenger Facility Charge (PFC) or to receive a grant under the AIP.
All aspects of qualifying, planning, allocating, and monitoring of AIP
funds rely on the integrity of the data that the Department collects.
The FAA uses O&D data for forecasting long-term growth in air
travel demand and for determining corresponding needs for airport
development and airspace system improvements. FAA also uses O&D data
for conducting cost-benefit analyses of proposed safety rulemakings,
infrastructure investments, and air traffic control improvements.
Within the Department, BTS has specific statutory responsibilities
(49 U.S.C. 111(c)) to measure traffic flows, travel times, travel
costs, and variables influencing traveling behavior and to collect data
relating to the performance of transportation systems. BTS is
specifically required to collect data that are suitable for conducting
cost-benefit analyses.
BTS uses O&D data, together with other sources of passenger travel
data (such as its National Household Travel Survey), to analyze
passenger travel by all modes of transportation. Since passengers
periodically shift the modes of transportation that they use (as they
did after the terrorist attacks of September 11, 2001), passenger
travel patterns by air are of great importance not only to airlines and
airports, but also to transportation planners in other modes as well,
such as highways and rail. BTS uses the O&D data to better understand
what factors influence passengers' choices about which mode of
transportation to use, so that transportation planners can plan
appropriately.
The O&D data are used to measure the prices that passengers pay for
air travel. These travel cost data are the basis of the Air Travel
Price Index (ATPI), the price index developed for measuring airline
prices.
Finally, the Department's Research and Special Programs
Administration (RSPA) administers the Civil Reserve Air Fleet (CRAF)
program, which provides civilian aircraft to the Federal government for
use in war or other emergency situations. RSPA uses the T-100 to
determine which Carriers can make what aircraft available, while
minimizing the adverse effect that these commitments make to the
airlines' normal civilian operations. Estimating these adverse effects
requires data on the revenue that would be affected by the cancellation
of any particular flight.
2. Other Government Agencies
a. The Department of Justice
The Department of Justice (DOJ) uses aviation statistics to assist
in the prevention of anti-competitive conduct that is subject to
criminal and civil action under the Sherman and Clayton Acts. The
Department's aviation statistics have been one of the Justice
Department's most important tools used to enforce various criminal
statutes related to Sherman Act violations. DOJ also uses them to
review mergers and acquisitions.
b. The Department of Homeland Security
The Department of Homeland Security (DHS) uses the Department's
aviation data to help predict revenues from the collection of September
11th Security Fees. Because the Department's system bases its
determination of passenger trips on least circuity, and the passengers
are paying these fees on the basis of the industry standard One-way
Trip, the Department's data provide poor predictions of these revenues.
The current O&D Survey concept of Directional Passenger, which does not
consistently predict the number of passengers arriving at the airport
to change planes, which hampers DHS' airport security manpower
forecast. The ability to discern the difference between connecting
passengers at a given airport versus passengers beginning their journey
at that airport is critical to effectively managing security staffing
and other resources at the airport. In addition, the O&D Survey cannot
currently provide the critical time-of-day and day-of-week passenger
volume data required by DHS to plan and forecast the manpower
requirements of airport screeners.
Furthermore, the Air Transportation Safety and System Stabilization
Act (Pub. L. 107-42) assigns the responsibility to remit the September
11th Security Fees for all travel described on the Air Travel Ticket to
the Carrier that issues the ticket. Since the Department's O&D Survey
information does not identify the Carrier that issued the ticket, the
Department's data provide insufficient information for DHS to monitor
the Carriers responsible for remitting the fees. Since the Federal
government does not collect statistics about Carriers issuing tickets,
the DHS uses the tickets reported in the O&D Survey as the best
available substitute.
c. The Department of Commerce
The Department of Commerce's (DOC) ability to carry out its mandate
to promote tourism is hindered by the Department's inability to know with certainty the beginning and ending
of One-way Trips. Significant numbers of tourists travel by scheduled
air transportation, and the Department's data collection policies leave
DOC using only guesses about origins and destinations based on the
Department's directional passenger counts.
The DOC's Bureau of Economic Analysis is also responsible for
producing the official U.S. Government estimate of the Gross Domestic
Product (GDP), and to adjust these estimates for inflation using the
GDP Deflator. The GDP Deflator is a price index, similar to the Bureau
of Labor Statistics' Consumer Price Index (CPI) that covers a broad
range of prices, including prices not paid directly by consumers. The
accuracy of the GDP Deflator would benefit from more accurate price
data and more timely data. The reporting process proposed in this
rulemaking would allow DOT to provide data that are more accurate to
DOC. By the time the current quarterly O&D Survey data become
available, it is no longer current, and, therefore, cannot be used in
the GDP Deflator.
d. The Bureau of Labor Statistics
The Bureau of Labor Statistics (BLS) has a critical need for
passenger O&D pricing information on a monthly basis, available
promptly, so that it can achieve a more accurate index of air travel
prices for incorporation into the monthly CPI. The proposed rule would
provide these more accurate price data on a timely monthly basis. BLS'
ability to evaluate the cost of air travel and incorporate those
evaluations into the consumer price index and the producer price index
is compromised by the Department's current statistical techniques.
Furthermore, the policy of reporting all travel in the quarter when
travel commences compromises the attempt to allocate the cost of air
travel to the proper travel month. The Producer Price Index (PPI) is
supposed to be calculated net of taxes, but the Department's
statistical data does not collect information to enable BLS to separate
fares and taxes. Because BLS computes separate price indexes for
purchases by consumers (the CPI) and purchases by producers (the PPI),
it is important for BLS to be able to separate the purpose for which an
airline trip is taken--whether business or leisure. The existing O&D
data do not provide such information. The proposed rule would collect
information that would enable better analysis of the purpose of travel.
BLS would like to adjust its monthly international price program
for Exports by the amount paid by U.S. resident travelers to the
Foreign Air Carriers on all routes. Because of the reporting exemptions
granted to Foreign Air Carriers flying to the U.S., some U.S. citizens
traveling to foreign destinations on Foreign Air Carriers are counted
in the O&D Survey and some U.S. citizens are not. Lack of consistent
Foreign Air Carrier statistics hinders BLS' ability to keep its
published statistics accurate and effective.
e. The Department of State
The Department of State (DOS) uses the Department's aviation data
to provide the information base for policy decisions in international
aviation negotiations.
f. The Government Accountability Office
The U.S. Government Accountability Office (GAO) uses O&D data to
conduct special studies of the airline industry at the request of
Congress. The quality of the analysis that GAO provides to Congress
would be substantially improved by the additional and higher quality
data collected under the proposed rule.
3. Other Stakeholders
Other stakeholders, such as public and private sector individuals,
organizations, and agencies, rely on aviation data.
a. Existing and Potential Carriers
Carriers use the Department's data for traffic forecasting and
evaluation of new routes. Evaluation of new market opportunities by
Carriers is dependent on the O&D Survey. Even with their access to many
internal sources of data, Air Carriers still report that they depend on
the O&D Survey data. Almost all Carriers rely on the Department's data
as the fundamental, and least expensive, source of industry demand
data. For new Carriers, as well as smaller and low cost Air Carriers
for which MIDT data is prohibitively expensive, the O&D Survey is the
only viable source of traffic data. Third-party providers have
developed new tools that enable smaller Carriers to participate in
sophisticated route and strategic planning at a much lower cost. The
success of such planning exercises is dependent, in part, upon the
quantity and quality of data available to the Carriers. In addition,
evaluation of traffic and routes is an essential component of aircraft
acquisition planning.
b. Airports
Department traffic data provide the basis for analysis by the
nation's airports. The O&D Survey, with its fare information, is the
only source of information for airports to study price elasticity. In
addition, the O&D Survey is the airports' primary source of data for
evaluating new routes. The proposed O&D Survey would provide
information about passengers originating at an airport and passengers
transiting through an airport, an important distinction when planning
for services that the passengers demand. Route evaluations are used to
encourage new service from Carriers, and thereby improve their service
to the consumer.
Smaller airports have a particular need for information about the
destinations of passengers. Airports that do not have passenger volumes
high enough to substantiate service to multiple cities need to
establish service to cities in the region where the passengers using
that airport want to go. When the airport can establish service only to
a large city in one direction and most of the potential travelers in
the area tend to travel in another direction, then the small airport
that might have been viable on its own merits if it had service to the
city in the appropriate direction may find that it must rely on the
Federal government's small airport subsidy to remain viable. The O&D
Survey is the primary source of destination information available to
small airports.
Airports and state aeronautical agencies use the data to understand
their customers and the airport's role in its regional transportation
market. Airports must ensure that Air Carriers have reasonable access
to essential airport facilities, so statistical forecasting of
passengers is essential. Airport local and regional planning functions
use, in part, Department O&D Survey and T-100/T-100(f) data to plan
buildings and runways that are vital to expanding the nation's air
transportation system into the future. Smaller airports, served
primarily by Carriers that are exempt from current O&D Survey reporting
requirements, are particularly hampered by the lack of relevant
aviation data.
c. Consumers and the General Public
Consumers benefit from the availability and analyses of accurate
and complete aviation data. In the past, the Department received
numerous inquiries from the public regarding domestic airline fares. In
response, the Department began issuing a quarterly report called The
Domestic Airline Fares Consumer Report based on the Department's
traffic data. It provides information about average prices being paid
by consumers in the top 1,000 domestic city pair markets in the continental U.S. Similarly, Carriers have a
vested interest in True O&D to effectively conduct route and other strategic planning. If Carriers
are better able to accurately plan their services, consumers will be
better served.
In addition, manufacturers, industry associations, consultants,
academics, researchers, financial analysts, investors, and the general
public use the Department's aviation data as the statistical base for a
variety of studies on topics related to aviation.
d. Labor Unions
Labor unions consider the Department's data as a vital component of
their negotiation strategies. Accurate and timely data are also crucial
during times of economic downturn, particularly when Air Carriers
request concessions from their unions.
e. Equipment Manufacturers
Because demand and traffic patterns reflect utilization of
aircraft, demand and traffic data in the O&D Survey provide fundamental
information on air transport markets that are vital in planning future
products. Consequently, aircraft manufacturers are a prime user of the
Department's traffic statistics.
E. Limitations of the O&D Survey and T-100/T-100(f)
The deficiencies of the O&D Survey and the T-100/T-100(f) have been
known for some time. While changes were made to the T-100 and T-100(f)
on July 30, 2002, the O&D Survey has not been substantially updated to
reflect changes in the industry. It has become apparent that the cost
of inadequate passenger and traffic information is significant for both
the government and private sector aviation communities who rely on this
data to fulfill their responsibilities and grow their businesses.
Furthermore, recent changes in information technology and Carrier
reservation and accounting systems have significantly reduced the cost
of revising the Department's data collection requirements such that the
benefits to all stakeholders of updating the system to provide more
timely, accurate, and useful data far exceed the costs.
The current aviation era is characterized by rapid change. Carrier
pricing can change multiple times a day. Carrier strategies sometimes
change from month to month and require increasingly sophisticated
analysis to support and evaluate business decisions and cases. The
growth in the number of third-party providers of airline analytical
software to evaluate the viability of new routes and other strategic
decisions has made sophisticated Carrier analysis commonplace at even
the smallest of Carriers. These software models, used by Carriers,
consulting firms, and government agencies, require more detailed,
timely, and comprehensive passenger demand data to optimize analyses of
a dynamic industry and plan for its future. The Department's
responsibility to identify and evaluate emerging trends in commercial
aviation is constrained by traffic statistics that are only collected
by month and by quarter and that are insufficiently comprehensive and
detailed. The continuation of collecting insufficient, quarterly data
to measure the transportation industry will severely hamper the ability
of Federal, state, and local governments to provide the infrastructure
to allow the airline industry to contribute to economic growth.
Decisions on aviation infrastructure worth billions of dollars
increasingly require more sophisticated analysis for which more
accurate, timely, and comprehensive data are critical.
The nation is becoming more dependent on fast, efficient air
travel. The nation's economy functions with the understanding that any
person or any shipment of goods can be delivered across the nation
within hours. Adequate quantitative data about the movement of
passengers will help the Department prepare for the future needs of the
transportation system.
Prior to September 11, 2001, delays associated with the capacity
constraints of the air transportation system were undermining the
efficiency of the system. These capacity constraints are now beginning
to reemerge as demand recovers. Furthermore, the events of September
11, 2001, and the subsequent effects of those events on the aviation
industry, further support the need for additional data modernization.
Not only was the collection of data elements inadequate to measure
important aspects of the aviation industry, vital information was not
available in a timely fashion to interpret the short and medium term
impacts of these events. It was also impossible to observe the recovery
of the air transportation system in those crucial days after the system
was restored.
More specifically, the data was inadequate for the following
reasons: first, neither T-100/T-100(f) data (reported monthly) nor O&D
Survey data (reported quarterly for ten percent, or less, of completed
tickets) revealed daily changes in traffic and fares following 9/11.
Without the ability to assess daily traffic levels, the Department
could not fully assess the return of passengers to the nation's air
transportation system and the extent to which the recovery was
progressing differently in various regions of the country. Second,
without any information about the sale of the Ticketed Itineraries, it
was impossible to differentiate between the post September 11th
passengers who purchased non-refundable tickets prior to September 11th
and those travelers that purchased their Ticketed Itineraries after
September 11th and thereby gauge the level of passenger confidence.
Third, quarterly data submissions resulted in a significant delay in
the Department's analysis of the impact of September 11th. The third
quarter of 2001 O&D Survey data showed the 20 days most directly
impacted by the events of September 11th mixed with the 71 days prior.
The next data available in the O&D Survey could not be released until
the end of the following quarter. Fourth, in implementing the
provisions of the Air Transportation Safety and System Stabilization
Act (Public Law 107-42), Congress and the Department exclusively relied
on T-100 in providing assistance to Air Carriers and other industry
participants. Even though the O&D Survey information is more useful in
measuring some aspects of the nation's aviation economy, data collected
only quarterly made it unusable for purposes of fulfilling the Air
Transportation Safety and System Stabilization Act or for adequately
monitoring the recovery of the industry following the terrorist
attacks.
Although the events of September 11, 2001 were unprecedented, the
need for more detailed, and more time-specific traffic data to monitor
the impact of significant events on the industry and its recovery from
them is not unique to that situation. Since the terrorist attacks, the
industry has experienced the SARS outbreak, the Iraq war, and various
elevated code orange alerts. In order to monitor the impact of these
extraordinary events on the industry, the Department had to issue
requests for supplemental data from the Carriers. Not only do these
supplemental requests burden the industry with additional reporting
requirements, they also highlight the fundamental need for the
Department to routinely collect more detailed, time-specific data to
fulfill its statutory obligations to monitor the health of the airline
industry and respond to requests from Congress and other government
agencies about the impact of such events on an industry that is vital
to the U.S. economy. The current data collection systems are inadequate for providing timely answers to any question
with more precision than a month for the T-100/T-100(f) and more
precision than a quarter for the O&D Survey. Reliance on data that is
only available quarterly for purposes of measuring the dynamics of
airline prices is a critical shortcoming of the O&D Survey. The ATPI,
for example, is severely handicapped by the limits of quarterly data.
Flight date is an important element of the value of a flight and
therefore an important factor in the computation of the ATPI.
The Transportation Security Administration (TSA) requires
information about passenger travel by time-of-day and by day-of-week to
plan airport security screener staffing requirements. The current T-
100/T-100(f) averages data across a month and the O&D Survey averages
data across an entire calendar quarter, so that variability over time
within the calendar quarter cannot be measured. Variability over time
and dates can only be measured if the Department begins collecting data
about time and date of travel. The volume of passenger traffic varies
by time-of-day and day-of-week and lack of information about passenger
volumes can result in passenger delays due to too few screeners or in a
useless expenditure of Federal dollars due to overstaffing at certain
times.
TSA requires some method of forecasting the collection of revenue
from the Air Carriers. The September 11th Security fee is remitted by
the ticket's Issuing Carrier, but Issuing Carrier is not one of the
data elements collected in either the O&D Survey or the T-100/T-100(f),
making it difficult for TSA to forecast or monitor the proper
remittance of tax dollars.
Neither the O&D Survey nor the T-100/T-100(f) provide any
information about the sale of new tickets (e.g., changes in passenger
booking windows), a key measure of traveler confidence in the air
transportation system. Such information is critical to evaluating the
likely financial impact of exogenous events, such as September 11th or
SARS, on Carriers. In addition, these data limitations preclude the
Department from precisely evaluating the impacts of even endogenous
industry events such as potential strikes or Carrier shutdowns.
The problem resulting from the reporting exemption given to Air
Carriers so long as they do not operate aircraft with more than 59
seats is illustrated by the emergence of Air Carriers flying
substantial fleets of regional jets. For example, the commencement of
operations by Independence Air in June of 2004 caused a profound
adjustment of fares in small, medium and large markets in the Eastern
half of the U.S. However, because Independence Air did not operate
aircraft with more than 59 seats, it did not have to report O&D Survey
data, thereby resulting in an incomplete picture of the effects of this
Air Carrier's start of operations. When a major realignment of fares
can result from the actions of an Air Carrier that qualifies for the
small aircraft size exemption, then the small aircraft size exemption
must be reevaluated.
The FAA acknowledged these and other issues at its 2001 Commercial
Aviation Forecast Conference.5 Accurate and detailed data on the flow
of passengers through the air transportation system is critical to
addressing congestion and developing ways to make the system more
efficient. The FAA requires data on the number of passengers flying at
specific times of day and specific days of the week, allowing it to
calculate more accurately the costs and benefits of safety regulations,
infrastructure investments, operational changes, and other FAA actions.
Lack of information about catchment areas impacts the Department's
ability to assess the effects of competitive services and alternative
airports. A number of government agencies are charged with monitoring
the airline industry and providing sufficient infrastructure to
accommodate its growth. The use of secondary airports increasingly
shapes the operating and competitive structures of the airline
industry. These agencies increasingly require information that allows
them to identify and analyze changes in the catchment areas of various
airports, thereby understanding how such changes impact industry
structure and airport and airway infrastructure planning and
development. For the same reasons, such information would also be
enormously useful to other users of the data, including airports,
airlines, and aviation consulting firms.
BTS is specifically directed to gather data that are relevant to
cost-benefit analysis. One requirement of cost-benefit analysis is
estimating the number of people that are affected by a particular
proposed regulation or infrastructure improvement or technology
investment. A major weakness of the existing O&D Survey is that it does
not provide flight-specific data, so it is not possible to estimate how
many people are flying on any particular day of the week or at any
particular time. Since infrastructure and air traffic control
investments are most likely to produce benefits at times when the
airspace system is congested, it is important to be able to measure how
many people are flying at these times to measure of the number of
people affected by proposed infrastructure and air traffic control
improvements.
BTS' current On-Time Data Base allows analysis of the particular
flights that are affected by delays, but does not have the ability to
know the number of passengers affected by delays. Since the number of
passengers affected is likely to be greatest when congestion and delays
are highest, current data are likely to understate the impact of delays
on the traveling public. Information about the number of people
traveling by time-of-day is vital to understanding the dynamics of the
air transportation system.
The 10 percent sample is inadequate for fulfilling the Department's
mandates and hampers the data quality of the O&D Survey. These data
quality issues have a strong effect on programs that include
measurements of air service to small communities. The EAS program is
particularly impacted. Other programs affected include BTS' quarterly
research series (ATPI), an experimental measure currently under
development. The ATPI uses O&D Survey data and is dependent upon
accurate data for all markets.
The Department's inability to measure True O&D according to the
industry standards using One-way Trips hinders its ability to
accurately measure nationwide air travel demand. Nationwide measures of
air travel demand, airport improvements financed by PFC revenue, and
improved airport security financed by the September 11th Security fees
all depend on the Department's ability to identify One-way Trips.
However, the Department's T-100/T-100(f) statistics count enplanements,
while the O&D Survey statistics count Directional Passengers.
Consequently, the government is without any method of properly
forecasting tax revenue and without means to monitor the effects of tax
policy.
F. Need for Regulatory Action
The Department is obligated to collect and disseminate information
about civil aeronautics including, at a minimum, information on (1) the
origin and destination of passengers in interstate air transportation,
and (2) the number of passengers traveling by air between any two
points in interstate air transportation (49 U.S.C. 329 (b)). In
addition, the Department allocates airport improvement funds, provides essential air service subsidies and
allocates funds to the air traffic control system. The requirement that
the Department judge the need for, and consequences of, a regulation
based on accurate statistical information presupposes that sound
economic information exists.
The Department has a unique role in collecting transportation
industry information. The need for a statutory mandate to collect
traffic statistics is underscored by the extensive differences between
the various airline business models and the level of technical
sophistication that make the task of gathering comprehensive industry-
wide data on air transportation a very formidable task for private
industry or an industry trade group to undertake. The only other
government entities in a position to gather traffic statistics are the
nation's airports. Airports are operated by a variety of State,
Municipal, County and Regional authorities. Collectively, they do not
have the resources to process statistics on all of the passengers
flowing through them on a daily basis, and it would be cost prohibitive
for each of the major airports to develop parallel statistical systems.
It would be a burden on the Air Carriers to require reporting to more
than four hundred airports, and a burden on the airports to reassemble
the data into a nationwide view of passenger air travel. Although
third-party providers offer "enhanced" aviation data, the original
sources of third-party provider data remain the T-100/T-100(f) and O&D
Survey. The underlying need for traffic information cannot be satisfied
anywhere else because there are no other sources of comprehensive
traffic data available in the aviation industry. We therefore conclude
that the changes proposed in this NPRM are required to provide accurate
statistical information.
Respondents to the Department's ANPRM overwhelmingly agreed that
the O&D Survey and T-100/T-100(f) segment data are essential. Most
named the T-100/T-100(f) and the O&D Survey as the basis for all
analytical work done in their organizations. Those that have access to
other sources of data reported that they generally crosschecked those
sources with information from either the T-100/T-100(f) or the O&D
Survey. The Department's traffic data provides the press and consumer
groups with the ability to monitor prices and advise the public about
low price alternatives to high fares, which fosters a more competitive
industry that benefits all consumers. The traffic data and the press
and consumer group analysis of the data strengthen American companies
by allowing companies to negotiate with airlines on fares. The traffic
data benefits consumers by providing new entrant Air Carriers with the
ability to demonstrate the strength of their business plan to
investors.
The O&D Survey, however, was singled out most often in responses to
the ANPRM as the data source most in need of improvement. The abundance
of complaints about the deficiencies that exist in the O&D Survey has
caused the public and the aviation industry to be cautious about any
conclusions that can be drawn from this data, yet a wide range of
stakeholders use it because it is the only available source of economic
information that describes key aspects of scheduled air passenger
transportation. Data inaccuracies have doubtlessly led to sub-optimal
decisions by stakeholders that are as impossible to quantify as they
are essential to correct. We therefore conclude that the changes
proposed in this NPRM are made necessary by compelling need to improve
the safety and economic well being of the American people.
Furthermore, OMB has published guidelines for ensuring that Federal
agencies establish practices for ensuring and maximizing the quality,
objectivity, utility and integrity of information disseminated by
Federal agencies. Disseminated information must be accurate, clear,
complete, and presented in an unbiased manner. Where appropriate, data
should have full, accurate, transparent documentation and error sources
affecting data quality should be identified and disclosed to users. The
IG has declared that the Department's O&D Survey does not meet the
Department's standard of acceptability of 95 percent accuracy. Since
the O&D Survey and T-100/T-100(f) remain the key measure of the
economics of the passenger air travel industry, the Department is under
obligation to provide the most accurate statistical information that it
can reasonably provide. The 1998 OIG report, the 1998 ANPRM, and
subsequent outreach activities support the necessity of aviation data
modernization. The IG found that to compensate for the unreliable O&D
data, Department aviation analysts often requested Air Carriers to
provide supplemental data, but they sometimes simply used their
experience to apply adjustment factors to the unreliable data. Lack of
consistent data collection over time decreases the utility of that
data, while every request for supplemental information increases the
Air Carriers' and the Department's costs. We therefore conclude that
the changes proposed in this NPRM are necessary to implement Congress'
intent for the law.
Because the Executive Branch and Congress utilize this data to form
and implement public policies to foster a safe, healthy, efficient, and
competitive air transportation system that contributes to aviation
safety, national security, and the U.S. economy, agency investment in
aviation information is critical. The private markets and other
government and quasi-governmental agencies agree that this information
is also critical for their needs, but private markets are unable to
provide adequate statistical information to address this need. The
unreliability of the data undermines the Department's ability to
perform its statutory mandate to disseminate information that enables
the transportation system to adapt to the present and future needs of
commerce and to ensure that public policy remains consistent with
changing commercial reality.
G. Development of the Record in This Rulemaking
The Department received 48 comments in Docket OST-1998-4043 in
response to its ANPRM (July 15, 1998, 63 FR 28128) from Air Carriers,
Foreign Air Carriers, airports, industry consultants, trade
associations, and unions. Typical of the responses was that of American
Airlines, which, as both a supplier and a user of data, expressed full
support of the Department's effort to simplify the data submissions and
ensure the accuracy and integrity of the data disseminated to the
public. The Regional Airline Association pointed out that it had long
advocated modernizing the data. Delta Air Lines supported the
initiative so long as it did not require the incursion of unreasonable
computer programming costs. The Air Line Pilots Association and the
Association of Flight Attendants favored any change that would improve
data quality and integrity over the current data.
Comments received about the O&D Survey under the ANPRM indicate
that there is significant concern about the data. Even while
emphasizing the importance of having access to the Department's traffic
data statistics, the respondents stressed that the O&D Survey has
serious weaknesses. Respondents repeatedly mentioned that the data
elements collected were insufficient to meet the data needs of the
public and the aviation industry. There was consensus that the
reporting exemptions granted to some Carriers significantly affected
the reliability and completeness of the data. There was near universal
agreement that the data collected by the Department suffer from a lack of both quality and
consistency. Specific comments point to the O&D Survey's outdated
design, which affects the quality and accuracy of data gathered. This
is amply demonstrated by the list of improvements that were put forth
in the ANPRM. The suggested modifications to make the O&D Survey more
reliable include:
- Change the source of data;
- Decrease the data reporting exemptions;
- Improve data validation;
- Improve definitions of data elements to enhance
uniformity;
- Improve enforcement of timely receipt of data to guarantee
timely release of data;
- Expand the number of elements collected to increase the
usefulness in measuring the industry;
- Increase the accuracy of the data to make it more
reliable; and
- Decrease the complexity of the form of the published data
to make it more useful for decision making.
Stakeholders agree that the collection, processing, and
dissemination of aviation data, particularly through the O&D Survey and
T-100/T-100(f), are critical to the continued function and well being
of the U.S. airline industry. There was general affirmation that the
suggestions the Department proposed in the ANPRM were acceptable.
Furthermore, Executive Order 12866 obligates the Department to collect,
process, and disseminate accurate, timely, and relevant aviation data.
The Department's data is insufficient to accurately determine a
consistent measure of passenger travel using its same general direction
of travel passenger counting methodology. Therefore, it is unable to
fulfill its mandate to provide the most relevant aviation data within
the current reporting requirements.
The air travel industry has grown rapidly since deregulation.
Deregulated markets, code-share and other cooperative marketing
agreements, new airline business models, and the adoption of the hub-
and-spoke model and the rolling hub variation of that model have
changed the fundamental economics of the airline industry. These
changes have left the Department attempting to measure an aviation
economy that is not the economy that the existing data were designed to
measure. As such, 14 CFR Part 241, Section 19-7 ("Passenger origin-
destination survey") has outlived the economic model for which it was
designed. Despite some adjustments (specifically, Docket No. OST-1996-
1049, RIN 2105-AC34, 62 FR 6715; Docket No. OST-1998-4043, RIN 2139-
AA08, 67 FR 49217), these metrics have not kept pace with changes in
the industry, nor do they measure essential features of aviation
economics as we know them today. Therefore, the Department is issuing
this NPRM.
H. Scope of This Rulemaking
The purpose of this rulemaking is to (1) reduce the reporting
burden on the Participating Carriers, (2) make the O&D Survey more
relevant and useful, (3) reduce the time it takes to disseminate the
information and (4) achieve maximum congruence between the O&D Survey
and the T-100/T-100(f). In so doing, the rulemaking will aid industry
and government users by collecting the most accurate and consistently
obtainable economic information about the purchase of air travel on
scheduled Carriers to or from, or within, the U.S. This rulemaking will
address the identification of the responsible reporting entity, the
identification of the data elements required to measure economic
activity in the scheduled passenger air transportation industry, and
the identification of exemptions that shall be allowed in the reporting
process.
The Department seeks to achieve these goals by making the O&D
Survey more relevant and useful to all stakeholders. Specific concerns
associated with the current O&D Survey reporting requirements include
(1) minimizing the number of reporting exemptions, (2) increasing the
level of detail, (3) increasing the quantity and quality of information
collected, (4) eliminating the need for data providers to resort to
manual data collection, thereby reducing reporting costs, (5)
establishing more uniform reporting by updating guidelines and
instructions to the Carriers, (6) achieving maximum congruence between
the O&D Survey and the T-100/T-100(f), and (7) updating the means of
submission to enhance the timeliness of data release.
I. O&D Survey Redesign
The Department believes that an accurate O&D Survey based on
Revenue Passenger tickets is now both desirable and possible in light
of recent changes in airline information technology.
1. Summary of the Proposed O&D Survey
a. Who Shall Report
The Department proposes that all U.S. Air Carriers, and Foreign Air
Carriers reporting data under antitrust immunity granted under 49
U.S.C. 41308, that are operating at least one aircraft with 15 or more
seats and issuing tickets for travel on scheduled interstate passenger
services to or from, or within, the U.S. participate in the O&D Survey.
By this change, the Department proposes to abandon the concept of first
Participating Carrier reporting a portion of Ticketed Itineraries in
favor of the Issuing Carrier reporting all eligible Ticketed
Itineraries. In light of substantial changes in airline ticketing and
revenue accounting practices, this alternative is the most efficient
and cost effective, allowing for the broadest possible data
availability with a minimum of ongoing reporting effort.
b. Data To Be Collected
The Department believes that a fundamental restructuring of the
data collected under the O&D Survey is necessary for the Department to
fulfill its Congressional mandate to ensure a healthy, safe, efficient,
accessible, and competitive transportation system that meets our vital
national interests and enhances the quality of life of the American
people. The Department acknowledges that this mandate includes meeting
the needs of the aviation community that relies on this data, and we
have endeavored to incorporate as many of its suggestions as possible
in this proposal. The Department recognizes its obligation to measure
passenger travel utilizing techniques that Congress, the industry, and
the public recognize as valid, current, and reasonable industry
measurements. In order to do this, the Department proposes to collect
information about the issuance of the Ticketed Itinerary and to collect
additional information about the travel described in the itinerary.
With these changes, the Department proposes to abandon the concept of
Directional Passenger in favor of One-way Trips to define True O&D.
The Department proposes to expand the scope of data that,
currently, results in an insufficient volume of data to meet basic
tests of validity and reliability. Therefore, the Department is
abandoning the reliance on a 10 percent sample and is proposing 100
percent reporting of eligible Ticketed Itineraries. The Department
intends to eliminate the limitations imposed on the scope of data that
resulted in an overabundance of exceptions that compromised data
quality. Therefore, the Department is removing the various exceptions
for reporting long itineraries and non-standard itineraries and
eliminating alternative data sample collection techniques for travel in
major markets.
The Department proposes to expand the scope of data in order to
gather data elements required to understand and disseminate useful information
about passenger travel and thereby proposes to eliminate the bundling
of ticket taxes and fees with the ticketed fare.
The current O&D Survey includes the following data elements: (1)
Point of origin, (2) Carrier on each flight-coupon stage, (3) fare-
basis code for each flight-coupon stage, (4) points of stopover or
connection (interline and intraline), (5) point of destination, (6)
number of passengers, and (7) total dollar value of ticket. The
proposed revision of the O&D Survey includes additional traffic
elements that occur for each Flight-Stage and sale elements that occur
only once for an individual itinerary.
c. Proposed Traffic Elements
1. Flight-Stage Sequence Number. A two-character ordinal sequence
number beginning with 01 that the Participating Carriers will assign to
each Flight-Stage of a Ticketed Itinerary.
2. Airport Codes. a. Flight-Stage Origin Airport. The airport's
IATA location identifier from which a Flight-Stage departs. The
Department proposes to accept a city code in lieu of airport code only
when the Flight-Stage flight number is OPEN, the itinerary uses a City
Code instead of an airport code, and the scheduled Carrier serves
multiple airports within the city making the origin airport unknowable.
b. Flight-Stage Destination Airport. The airport's IATA location
identifier at which a Flight-Stage arrives. The Department proposes to
accept a city code in lieu of airport code only when the Flight-Stage
flight number is OPEN, the itinerary uses a City Code instead of an
airport code, and the scheduled Carrier serves multiple airports within
the city making the destination airport unknowable.
3. Carrier Codes. a. Operating Carrier. The IATA issued Airline
Designator code of the U.S. Air Carrier or Foreign Air Carrier
operating the equipment used on the Flight-Stage.
b. Marketing Carrier. The IATA issued Airline Designator code of
the U.S. Air Carrier or Foreign Air Carrier marketing the Flight-Stage.
4. Scheduled Flight Date. The date on which the Flight-Stage is
scheduled to depart.
5. Scheduled Departure Time. The scheduled local flight departure
time of the Flight-Stage.
6. Master Flight Number. The Airline Designator code and flight
number under which the flight inventory is managed.
7. Scheduled Arrival Date. The date on which the Flight-Stage is
scheduled to arrive.
8. Scheduled Arrival Time. The scheduled local arrival time of the
Flight-Stage.
9. Fare Basis Code/Ticket Designator. The alphanumeric code
identifying the fare by class, qualification, and restriction
associated with the Flight-Stage.
10. Ticketing Class of Service. A one-character code indicating the
service cabin within the aircraft in which the passenger is scheduled
to be seated under the fare rules stated for each Flight-Stage of the
Ticketed Itinerary.
d. Proposed Sale Elements
1. Issuing Carrier Identifier. The Issuing Carrier's assigned IATA
recognized airline numeric code.
2. Ticketed Itinerary Identifier. The alphanumeric identifier for
the Ticketed Itinerary. This identifier identifies a unique itinerary
for each Issuing Carrier Identifier and Date of Issue.
3. Date of Issue. The local date on which the Ticketed Itinerary
was issued.
4. Fare Amount. The Fare Amount is the monetary amount the Issuing
Carrier receives from the ticket purchaser on behalf of all the U.S.
Air Carriers or Foreign Air Carriers included in the itinerary. The
Fare Amount includes the Carrier-imposed fees and surcharges, such as
fuel surcharges, for the carriage of a passenger and allowable free
baggage on the passenger's complete itinerary, denominated in U.S.
dollars, and accurate to two decimal places, rounded. The Fare Amount
excludes taxes and fees imposed by Federal, state, local and foreign
governments and excess baggage fees.
5. Government Taxes and Fees. a. Government Imposed Tax/Fee
Identifier. The government tax or fee identifier. The Department's
codes will be listed in the Passenger Origin-Destination Survey
Directives issued by the Department.
b. Government Imposed Taxes/Fee Amount. This field will contain the
value of the tax or fee specified by the identifier that precedes it,
denominated in U.S. dollars and accurate to two decimal places,
rounded.
6. Ticketing Entity Outlet Type. The identifying code of the
distribution channel through which the Ticketed Itinerary was issued.
The Department's codes will be listed in the Passenger Origin-
Destination Survey Directives issued by the Department.
7. Customer Loyalty Program Identifier. The program identification
code assigned to the airline customer loyalty program or alliance
customer loyalty program under which the passenger accrues benefits.
8. Customer Loyalty Program Award Ticket Indicator. The one-
character identifying code to indicate that customer loyalty program
credits were expended in obtaining the Ticketed Itinerary.
9. Number of Passengers. The numeric value representing the number
of passengers traveling on the Ticketed Itinerary. If multiple
passengers have flown on a ticketed itinerary, we are considering
requiring carriers to report separate records, with separate fares, for
any groups of passengers on the itinerary that have flown under
differing fare basis codes or under special discount fares. For
example, if lower fares are paid for children within a tour group, the
children's fares should be reported in a separate data record with a
separate fare. When the projected number of passengers on a group
ticket differs from the actual number, we are considering requiring
carriers to report the actual number of passengers who flew on the
group ticket as of the reporting event. BTS believes that these
disaggregations are necessary to calculate its air travel price index.
We seek comment on carrier practices and handling of group tickets and
on the feasibility of the methodology we are considering.
10. Itinerary Copy Date. The date that the Participating Carrier
copied the Ticketed Itinerary data for submission to the Department.
2. Discussion of the Proposed O&D Survey
a. Traffic Elements
In its comments to the Department's ANPRM, the Regional Airline
Association (Docket OST-1998-4043-11) stated that the measure of
passenger traffic used in the O&D Survey fails to satisfy the
industry's need for timely and relevant information. Unisys Corporation
(Docket OST-1998-4043-22) and Delta Air Lines (Docket OST-1998-4043-21)
stated that the O&D Survey should adopt the True O&D concept. The Port
of Portland (Docket OST-1998-4043-19) urged the recognition of multi-
carrier O&Ds. In requesting that the Department begin using "relevant
information," "True O&D," and "multi-carrier O&D" to measure
passenger traffic, these respondents made clear that, for the aviation
industry, the Directional Passenger is no longer an acceptable measure
of True O&D. The Department agrees with the Regional Airline
Association that, if we are to provide relevant information about the
scheduled air transportation industry, we must change the basic
calculation of the True O&D used in the O&D Survey to the calculation
of One-way Trip commonly used in the air travel industry.
Scheduled Air Carriers in the U.S. use a variety of methodologies
to construct One-way Trips in order to comply with the provisions of
collecting September 11th Security Fees. The most widely accepted is a
methodology based on "time in hub." Here, the number of hours spent
in an airport is the gauge by which it is determined whether the
passenger (1) intended to continue the trip by changing planes, or (2)
intended to remain in that city for other purposes. It is sometimes
known as "the four hour rule" methodology because four hours is the
most common maximum domestic connection time allowed with this method.
In this methodology, certain other decision criteria are applied to
supplement the time in hub determination, such as special rules for
itineraries in which there are no stops that exceed the time allowance,
itineraries with "void" and "OPEN" coupons, and itineraries that
backtrack over the same set of airports.
The Department proposes to define a One-way Trip in terms of time
spent in transit, subject to certain other rules. All other
methodologies that are in use at Carriers require proprietary knowledge
or were uniquely adapted to the needs of a particular Carrier, and
would not apply industry-wide to all Carriers. These characteristics
make the other methodologies unsuitable for use by the Department on a
universal basis. The Department seeks comments from the industry and
the public regarding the optimal method for constructing a One-way
Trip. We will consider all the suggestions for appropriate
determination of a One-way Trip, and establish a consensus of the
guidelines provided by the industry to use in processing data in the
O&D Survey for dissemination. We propose to require the following data
elements for each segment of the Ticketed Itinerary as input for the
One-way Trip determination: (1) Flight-Stage Sequence Number, (2)
Airport Codes, (3) Carrier Codes, (4) Scheduled Flight Date, (5) Master
Flight Number, (6) Scheduled Departure Time, (7) Scheduled Arrival
Date, (8) Scheduled Arrival Time, (9) Fare Basis Code/Ticket
Designator, and (10) Ticketing Class of Service.
1. Flight-Stage Sequence Number. Every Flight-Stage of an itinerary
must have a sequence number assigned to it by the Issuing Carrier.
Should problems arise, a positive identifier, assigned by the provider
of the data, will help facilitate communication and resolution. Flight-
Stage Sequence Number will begin each itinerary with Flight-Stage 01
and continue with sequential Flight-Stages. Surface Flight Coupon
Stages (known within the industry as surface segments, including those
provided by designated surface carriers such as railroads) that are
included in the itinerary will be included in the numbering sequence.
Voids (also known as arrival unknown segments, or ARNK segments) and
OPEN segments are to be included in the numbering sequence.
2. Airport Code. Airport code for both Flight-Stage Origin Airport
and Flight-Stage Destination Airport will be identified by the IATA
location identifier that uniquely identifies that airport. American
Airlines (Docket OST-1998-4043-5) and others commented that the
presence of City Codes in the itinerary in lieu of airport codes
resulted in data inconsistency. In the current O&D Survey,
Participating Carriers from time to time had to attempt to decipher the
itinerary using the pricing area of the ticket. The Department believes
that our proposed change, which designates the Issuing Carrier as the
Participating Carrier, will eliminate the problem caused by manual
examination of the pricing area. However, the Department recognizes
that when a Carrier sells an itinerary known as an "OPEN" itinerary,
where (1) the itinerary is purchased but not booked, (2) the purchased
itinerary includes a City Code instead of an airport code, and (3) the
scheduled Carrier provides service to multiple airports at that city,
then the airport code is unknowable. In this case, the Air Carrier must
issue a ticket where the appropriate value is a City Code and the
Department proposes to accept in the O&D Survey the reporting of City
Codes in the itinerary only under this circumstance.
3. Carrier Code. Where once Carrier Code would have been described
simply as the Airline Designator of the U.S. Air Carrier or Foreign Air
Carrier that transported the passenger, the onset of code-sharing has
introduced multiple Carriers into the ticketing process. The Marketing
Carrier Code is the Carrier identifier that the passenger sees when
examining the Ticketed Itinerary. The Operating Carrier is the Carrier
that operates the aircraft that transports the passenger. Marketing
Carrier and Operating Carrier will be identified by the IATA Airline
Designator assigned to them. If the Carrier has no IATA Airline
Designator code, then the Department will assign a reporting code. When
a Carrier markets surface transportation as an extension of its air
transportation service, and the transportation is (1) provided by a
common carrier that is not an Air Carrier or Foreign Air Carrier, and
(2) described on the Ticketed Itinerary and included in the total fare,
then the surface carrier's IATA Airline Designator will serve as the
Operating Carrier and the Carrier's IATA Airline Designator will serve
as the Marketing Carrier.
4. Scheduled Flight Date. The Department's ability to determine
One-way Trips from the O&D Survey information is crippled by | 
