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OST-04-19083 - United Air Lines - Petition for Rulemaking - Codeshare/Wet-Lease Print Advertising
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United Air Lines, Inc. OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) September 7, 2004 Petition for Rulemaking to Amend 14 CFR 257.5(d) Submits this petition for rulemaking to revise the Department's interpretation of Section 257.5(d) of its regulations, as it pertains to the disclosure of code-share and long- term wet-lease arrangements in print advertisements of scheduled passenger air services. United supports the fundamental policy objective of Part 257, which is "to ensure that .. air carriers ... tell consumers clearly when the air transportation they are buying or considering buying involves a code‑sharing arrangement ..., and that they disclose to consumers the transporting carrier's identity."' However, as explained further below, recent trends in the airline industry have resulted in the print advertising requirements of subsection 257.5(d) becoming an increasingly onerous burden on network carriers without providing meaningful off‑setting consumer benefits. United does not suggest that the Department should repeal subsection 257.5(d). Rather, United is proposing that the section be reinterpreted to reduce the burden of the rule while still ensuring that consumers receive notice when the services being advertised may involve travel on a codeshare partner advertising carrier. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising September 10, 2004 American Airlines, Inc. hereby answers in support of the captioned petition submitted on September 7, 2004 by United Air Lines, Inc. to amend the Department's codeshare advertising rule, 14 CFR 257.5(d), so that carriers need only to disclose that some service over an advertised city-pair route might be provided by a codeshare partner and to state the names of the potential transporting carriers. American agrees with United that the cited advertising rule has proven to be difficult and burdensome to implement, and is not needed for consumer protection. The other requirements of Part 257 with respect to explicit codeshare disclosure of operating carriers on specific itineraries including notice in schedules, oral notice to prospective consumers, and written notice in itineraries and other documents - will remain in force under United's proposal. In addition to the relief sought by United ‑ which American fully supports ‑ we request that the Department also change 14 CFR 257.5(d) to state that the amended rule applies to both print advertising and internet advertising. The same difficulties and burdens that United has identified in constructing print ads also arise with respect to internet ads. There should clearly be a common disclosure standard applicable to both print and internet ads, consistent with the Department's long‑standing policy that internet listings "must provide codeshare disclosure in a manner required of printmedia fare ads" (Enforcement Office Industry Letter, March 18, 1996) Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com September 21, 2004 Comments of The Air Carrier Association of America Print advertisements should be regarded as a first opportunity to inform consumers about an airline's service offerings pending more detailed disclosure of any code‑sharing arrangements, both prior and subsequent to purchase... United's proposal would simplify the existing code‑share disclosure requirements applicable to print advertising and enable carriers to communicate more effectively with consumers about their code‑sharing arrangements. This reform would benefit consumers, who would receive a more concise and readily comprehensible form of disclosure that anticipates subsequent, more detailed disclosures. Although United's proposal to eliminate code-share disclosure requirements for print advertisements would "simplify" such requirements, evidence shows that such a change would not be in the public interest. There have been dramatic changes in code-share relationships since the Department originally established code-share requirements. ACAA believes that the Department should review the overall impact of code-sharing on consumers and competition. Only when that review is completed should the Department even consider changes to the code-share requirements. Therefore, ACAA urges the Department to deny United's petition. Counsel: ACAA, Edward Faberman, 202-639-7502, epfaberman@acaa1.com OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) September 24, 2004 ACAA opposes United's petition, but its opposition should have no bearing on whether the Department moves forward to revise Part 257 because it is based on a serious misrepresentation of United's proposal. ACAA is simply incorrect when it claims that United is proposing that the Department's code-share "disclosure requirements be eliminated and that the Department "allow a carrier to advertise a flight operated by a code-share partner in printed advertising without disclosing that the flight is operated by another carrier." To the contrary, as American correctly noted, United's petition is narrow in scope, proposing that carriers "disclose that some service over an advertised city-pair route might be provided by a code-share partner and... state the names of the potential transporting carriers." Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) September 27, 2004 Reply of The Air Carrier Association of America Despite United's claims to the contrary, it is asking that it be allowed to advertise multiple flights without disclosing which of the flights are code-share flights and which carriers will operate those flights. Under United's proposal, even if one or most of the flights were operated by code-share partners, its only responsibility would be to include a "general" statement that some flights may be provided by other carriers. Therefore, if United advertised fifty routes in an ad and included one footnote stating that "some of the above-listed services might be provided by the following fifteen code-share partners," it would not have other disclosure responsibility to the public even if code-share partners operated half of those flights. Under this proposal, a member of the public would have no way of knowing which of United's flights are "code-share" flights and which carriers operate those flights. ACAA suggests that it is United that has misrepresented its purpose'. Indeed, a carrier seeking to promote code-sharing would specifically list all code-share flights. If United's petition was granted, a member of the public would not be able to determine from the media ad whether a flight is operated by a code-share partner. These facts demonstrate why United's petition should be denied. ACAA urges the Department to deny United's petition. ACAA again emphasizes that the Department should undertake a thorough review of the impact of code-sharing on consumers and competition. Only when that review is completed should the Department even consider United's petition. By: Air Carrier Association of America, Edward Faberman, 202-639-7502, epfaberman@acaa1.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 1, 2004 While it is dubious that the Part 257 requirements for detailed and intricate footnoting of codeshare routes provide any useful information to consumers, it is clear that such a requirement is burdensome and costly for network carriers like Delta to comply with. Such a requirement creates hours of additional work in formatting and legal review of advertisements. Such regulatory overkill is not needed for any legitimate consumer protection purpose. The Department should reject out of hand ACAA's opposition to this sensible amendment to the regulations, which will enhance the effective operation of the consumer disclosure rules. ACAA's opposition is a thinly veiled attempt to export costs and burdens onto network carriers, since ACAA members typically do have significant codeshare operations. In these circumstances, ACAA's assertion rings hollow that "instead of addressing this issue, the Department should be focusing on efforts to expand competition." Part 257 needs to be addressed to enable all carriers to effectively advertise and compete without unwarranted and unnecessary regulatory burdens. Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060 OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 5, 2004 There is good cause for the Department to act expeditiously on United’s Petition by issuing a Notice of Proposed Rulemaking providing a 30-day period for the submission of comments and indicating that the Department will consider moving directly to issue an Interim Final Rule that is effective pending the publication of a Final Rule. First, there are few, if any, truly debatable issues of fact raised by the Petition that would require an extensive record. Code-sharing is not a novel practice, and is generally well understood by airline passengers. The Department is fully capable of determining whether consumers require extended verbiage in the code-sharing notification, given the maturity of the practice in the marketplace for many years, without extensive factual development. The Department regularly makes such consumer protection judgments in numerous areas on its own, sua sponte. Second, there is a pressing need for expedition in that the codeshare advertising regulation has become unduly burdensome as the industry has evolved, particularly for carriers like US Airways that have codesharing relationships with multiple regional "Express" partners, international airline partners, and/or other U.S. carriers. Counsel: O'Melveny & Myers, Patrick Rizzi, 202-383-5200, prizzi@omm.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 6, 2004 The regulation that United is now objecting to was adopted by the DOT in 1999 after a lengthy rule-making process that entailed extensive fact-finding and dialogue with affected parties, including United and other code-sharing airlines. United's petition provides absolutely no evidence why the findings and conclusions reached by the DOT in adopting that rule are not equally valid today. Accordingly, there is no legitimate basis for altering the rule, and United's petition should be denied. In fact, developments in the aviation marketplace over the last few years suggest that, if anything, the requirements for disclosure of code-sharing flights to consumers should be strengthened, not weakened as United is seeking.
Counsel: Southwest, Robert Kneisley, 202-682-4534, bob.kneisley@wnco.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 12, 2004 Errata to Comments of Southwest Airlines I am hereby submitting the following errata to the Comments of Southwest Airlines Co. filed October 6, 2004 in the referenced docket:
Counsel: Southwest, Robert Kneisley, 202-682-4534, bob.kneisley@wnco.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 14, 2004 To the extent the Department may deem it necessary, United moves for leave to file this reply pursuant to 14 C.F.R. § 302.6(c). United should be allowed to respond to the allegations contained in Southwest's answer. This response will help to ensure that the record in this proceeding is accurate about the limited scope of United's petition and the reasons why granting the petition will further the public interest by benefiting both carriers and consumers. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 19, 2004 Additional Comments of The Air Carrier Association of America | Word There have been dramatic increases and changes in code-share relationships since the Department originally established code-share requirements and examined this issue. ACAA believes that the Department should publicly review the significant number of codeshare flights and partners operating today and their impact on consumers and competition before it even considers the changes to the code-share requirements advocated by United. Therefore, ACAA urges the Department to deny United’s petition. By: Edward Faberman, 202-639-7502, epfaberman@acaa1.com OST-04-19083 - Codeshare/Wet-Lease Print Advertising October 21, 2004 As we explained in our October 6 answer to the petition, United offered no evidence at all to support its claim that consumers will somehow benefit from less disclosure of their code-share options. United's October 14 response provides no more support for this proposition than its petition did. In fact, most of United's response is so irrelevant or duplicative of arguments that Southwest already addressed that further discussion is unnecessary. However, a few of United's claims are so far beyond the pale that they deserve a brief response. Counsel: Southwest, Robert Kneisley, 202-263-6284, bob.kneisley@wnco.com OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) November 1, 2004 Motion for Leave to File and Answer of Orbitz Orbitz also concurs with the request of American Airlines, Inc. that the Department also change 14 C.F.R. § 257.5(d) to explicitly state that the amended rule applies to both print advertising and Internet advertising. The same difficulties and burdens that United has identified in connection with print advertising, including codeshare flights, arise with respect to Internet advertising ‑ perhaps even to a greater degree as Internet advertising typically changes more rapidly than print media. (However, Orbitz notes that a common standard applicable to both print and Internet advertising may not necessarily be appropriate for all of the Department's rules. As noted above, rules designed and intended for the static print medium may artificially restrain the ability of advertisers to interact with consumers and more clearly and efficiently relay information.) Counsel: Orbitz, Catherine Mathews Graf, 312-894-5099 OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) January 5, 2005 Notice of Proposed Rulemaking - Pre-Publication Final Publication in Federal Register - January 13, 2005 The Department of Transportation is proposing to amend its rule governing the disclosure of code-share and long-term wet lease arrangements in print advertisements of scheduled passenger services to permit carriers to disclose generically that some of the advertised service may involve travel on another carrier, so long as they also identify a list of all potential carriers involved in serving the markets being advertised. This proposed action is being taken in response to a petition for rulemaking filed by United Airlines, Inc. We are tentatively of the opinion that the benefits of the additional specific notice provided consumers in a print advertisement under the present rule may not outweigh the detriment to carriers and the public of continuing to require such detail. We not only agree that these footnotes are burdensome for carriers, but we also see merit in the argument that the many separate footnotes now required where multiple markets are contained in a single advertisement may also confuse customers rather than inform them of advertised services. Therefore, while we will continue to consider a failure to disclose code-share and wet lease arrangements in print advertisements to be an unfair and deceptive trade practice and to vigorously enforce any such violations, we are tentatively of the opinion that continuing to require that carriers identify each specific partner carrier that serves each particular city-pair route or market being advertised is not necessary for consumers adequately to be informed of the advertised service. Accordingly, we are proposing to grant United's petition for rulemaking and amend our rule governing codeshare and long-term wet lease disclosure in print advertisements to permit a generic statement indicating that some of the advertised service may involve travel on another carrier, so long as such advertisements also include a list of all potential code-share or wet lease carriers involved in serving the markets being advertised. By: Karan Bhatia February 23, 2005 Re: Comments of Jefferson Ranck
February 23, 2005 I wish to oppose the request by United to relax rules on partner carriers. I want more information, not less. When looking at flight schedules I want to know which airline I will be flying so that I can check their safety and arrival record. I want to know this information before booking as it affects my decision as to whether to make a reservation or not. OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) February 23, 2005 Re: Comments of Richard Kraemer - Blogger By: Richard Kraemer OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) February 23, 2005 Re: Comments of S. Reilly - Blogger By: S. Reilly OST-04-19083 - Petition for Rulemaking to Amend 14 CFR 257.5(d) March 7, 2005 Re: Comments of Mathew Englander By: Mathew Englander March 14, 2005 The Regional Airlines urge the Department to adopt its proposed rule as promptly as possible. Eliminating unnecessary burdens on airlines is particularly important as airlines struggle with the difficulties caused by extraordinarily high fuel prices, excessive taxes and fees and declining ticket prices. The proposed rule will alert consumers to the prospect that they will be traveling on flights operated by an airline other than the marketing airline, and they will have specific information on which airline operates which flight when they review specific schedules for purchase. By: Geoffrey Crowley, gcrowley@airwis.com for Air Wisconsin / Skip Barnette, skip.barnette@delta.com for Atlantic Southeast / Kate Soled, kate.soled@aa.com for American Eagle / Scott Peterson, scott.peterson@expressjet.com for ExpressJet / Thomas Cooper, tcooper@gulfstreamair.com for Gulfstream / Keith Houk, keith_d._houk@usairways.com for PSA / Maximillian Shemish, max.shemesh@mesaba.com for Mesaba / Douglas Caldwell, dcaldwell@regionsair.com for Regionsair / Nikki Tinker, ntinker@nwairlink.com for pinnacle, Todd Emerson, temerson@skywest.com for Skywest
March 14, 2005 American believes that the proposed relief for print advertising be extended to internet advertising as well. The same difficulties and burdens that United has identified in constructing print ads also arise with respect to internet ads, since the identity of the operating carriers in a particular city-pair may not be known until an itinerary is selected. While the Department suggests that this problem can be solved on the internet through "hyperlinks or other techniques", that would only impose the same burdens on carriers, and create the same potential for consumer confusion, that the Department has identified for print media. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
March 14, 2005 Comments of American Society of Travel Agents ASTA believes the proposed change to the regulations governing print advertisements is appropriate. There is little reason to believe that the blizzard of footnotes accompanying typical complex fare advertisements is of any real value to consumers in deciding which airline to use. However, we are deeply concerned that the Department would deny the same benefits of simplification to those retailers who compete with the airlines for the patronage of consumers using the Internet as the advertising medium. By: Paul Ruden
March 14, 2005 Comments of Continental Airlines Continental urges the Department to end the consumer confusion and unnecessary airline burdens resulting from the codeshare disclosure rule, 14 C.F.R. 27(d), by making final its proposal to eliminate the requirement to disclose each specific codeshare partner on each route for service offered to the public in print advertising. In addition, Continental urges the Department to adopt American's proposal to eliminate this requirement for Internet advertising, which is consistent with the Department's longstanding policy that print and Internet advertising are subject to the same disclosure requirements to ensure the rule's intended benefits and protections are available in both media. Codeshare disclosure requirements ordered by the Department as a condition of approving an arrangement should be preserved, however, to ensure the Department's concerns about potential harm to consumers are addressed. Counsel: Continental and Crowell & Moring, Bruce Keiner, 202-624-2615
March 14, 2005 Delta's marketing campaigns are typically undertaken simultaneously in both print and Internet media. The same burdens and difficulties associated with developing detailed footing disclosures for print adds also apply to the Internet. The NPRM incorrectly assumed that hyperlinks and other Internet techniques would somehow address this problem. Such "hyperlinks" are nothing more than electronic footnotes that convey the same extraneous and potentially confusing detail that the Department has tentatively determined to eliminate from print advertising disclosures. Counsel: Hogan & Hartson, Alexander Van der Bellen, 202-637-8382, sascha.vanderbellen@hhlaw.com
March 11, 2005 Without proper justification, the DOT proposes to undo over five years of carefully crafted regulation, first adopted in 1999 in the interest and name of the consumer. The DOT proposes to do this by permitting carriers to provide only a general statement that code share flights might be operated by one or more of a menu of air carriers whose names will he displayed in print advertisements. The DOT proposal, made in response to a rulemaking request submitted by United Airlines, is unwarranted and not justified by the mere fact that code share operations have allegedly expanded since the 1999 adoption of the current rule, thereby placing an additional "burden" on carriers in preparing print advertisements, as claimed by United. Independence Air, Inc. hereby urges the Department to maintain the current regulatory regime by requiring carriers to disclose, with specificity, the identity of the carriers that will actually provide the air transportation being promoted in all print advertisements. By only requiring the carriers to list the names of the carriers that might provide the air transportation being promoted, the traveling public is deprived of information the DOT thought in 1999 was vital to the decision making process by which consumers make airline choices. Counsel: Silverberg Goldman, Robert Silverberg, 202-944-3300, rsilverberg@sgbdc.com
March 14, 2005 Comments of Northwest Airlines With respect to the disclosure of codesharing and wet‑leasing arrangements, there is no significant difference between print advertisements and Internet advertisements. Today, both forms of advertisement provide basically the same information to essentially the same type of consumers, albeit through different means. And Internet advertisements are subject to the same compliance costs and possible consumer confusion considerations associated with the dissemination and receipt of print advertisements. Accordingly, it is in the public interest for the Department to make the codeshare and wet‑lease disclosure standards the same for these two forms of advertising. Counsel: Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com
March 14, 2005 Comments of United Air Lines on Notice of Proposed Rulemaking United strongly supports the Department's proposal to revise 14 C.F.R. § 257.5(d) so that carriers will no longer be required to identify the specific carriers on which a passenger might travel on a particular itinerary, but to disclose only the fact that some service over a route might be provided by a code‑share partner and to provide the names of the potential transporting carriers. United urges the Department to finalize the proposed revised rule as soon as possible and to make it applicable to Internet as well as print advertising. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, Bruce. Rabinovitz@wilmerhale.com
March 14, 2005 Although it is hard to estimate the exact cost, US Airways believes that for every one of the hundreds of print advertisements run each year by US Airways, the increased disclosure requirements add staff time and expense to the process. A recent US Airways' advertising campaign in support of six newspaper/web advertisements resulted in reviewing 320 different city pairs for code share disclosure compliance. This timeconsuming process involves collecting data from multiple databases. US Airways estimates that an extra 16‑20 hours of staff time was spent in the preparation of this advertising campaign in order to comply with the current Code Share Rules. Given the relatively small amount of utility passengers receive from this additional information and the high cost of compliance, US Airways submits the rules should be changed to require only generic disclosure. Counsel: US Airways, Elizabeth Lanier, 703-872-5230
Linda Ackerman | Brian Excelbierd | Chuck Farley | Edward Hasbrouck | grabmeister@aol.com Natasha Krochina | Leslie | Susan Painter | Phillip Schmidt | Jesse Walkershaw | John Westcott March 15, 2005 By: K. Kubarycz March 17, 2005 Comments of Southwest Airlines If made final, the NPRM would abruptly reverse the long-standing requirement that code-sharing airlines must disclose to consumers the identity of the code-sharing partners that will actually operate the specific flights being advertised in print media. The Department adopted that requirement in 1999, after years of fact-finding and unsatisfactory experience with more generic, i.e. less-specific, code-share disclosures. Following a lengthy investigation, the Department concluded that generic code-share disclosures (similar to those being proposed here, ironically) "do not suffice" to properly inform consumers about the particular flights they are considering for travel. Oddly, despite this history, the present NPRM cites no evidence that consumers have in any way been disserved by the present disclosure rule, or that they would somehow benefit from a less-specific rule. The NPRM, like United's petition on which it is based, cites no consumer complaints or any other empirical evidence of consumer harm stemming from the present rule. Rather, the NPRM seems to accept uncritically the unsupported assertions of United and other carriers that consumers may somehow be "confused" by the present rule. Yet none of those carriers have produced even a single consumer who claims to have been confused by the market-specific disclosure of code-sharing flights that is now required. In the absence of any real evidence, claims about the possibility of "consumer confusion" are nothing but self-serving speculation. Counsel: Southwest, Robert Kneisley, 202-263-6284, bob.kneisley@wnco.com March 21, 2005 Comments of The Air Carrier Association of America There have been dramatic changes in code‑share relationships since the Department originally established code‑share requirements. ACAA believes that the Department should only consider changes to code‑share requirements that were implemented to protect American consumers when the Department completes its review of the overall impact of code sharing on consumers and competition. ACAA urges the Department to suspend this rulemaking until actions are undertaken to review the impacts of alliances and code sharing and to ensure that entry is available at all airports. It is time to make the promotion of competition and entry a higher priority than leaving burdens on the nation's largest carriers. Counsel: ACAA, Edward Faberman, 202-719-7420 March 23, 2005 Comments of JetBlue Airlines and Motion to File Out of Time JetBlue differentiates itself from other carriers through its unique customer service and distinct product. United's surrogate carriers do not provide the same service, aircraft or amenities as United, whether the surrogate carrier is Ted or one of their other partners. Why would the Department permit carriers to keep passengers from being able to clearly understand that distinction as it reviews United's effort to limit critical information from the travelling public? From a consumer standpoint, the information required by Part 257.5(d) is both important and worthy of continuation. Counsel: JetBlue and Dow Lohnes, Jonathan Hill, 202-776-2725, jhill@dowlohnes.com April 4, 2005 Motion for Leave to File and Reply of United Air Lines JetBlue admits that its interest in this proceeding is the competition it faces from United and other network carriers, but its candor begins and ends there. It attempts to mask behind a veneer of concern for consumers its true purpose, which is to maximize its competitors' regulatory compliance costs and burdens. Notwithstanding its rhetoric, JetBlue knows that United and other network carriers (but not JetBlue) incur substantial costs in order to comply with the current terms of subsection 257.5(d). JetBlue therefore opposes the rule change because it does not want the Department to alleviate that cost burden, regardless of whether consumers may actually benefit from the Department's proposed action. JetBlue surely knows that, because its comments do not squarely address the substantive merits of the Department's proposal, JetBlue cannot expect to persuade the Department to change its tentative decision. For JetBlue, however, its belated intervention in this proceeding will have been worth the effort if it serves to confuse the issues and delay final Department action to implement the proposed rule change. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com Disclosure of Codesharing and Long-Term Wet Lease Arrangements OST-2004-19083 - Codeshare/Wet-Lease Print Advertising July 29, 2005 Final Rule - Bookmarked This action amends the rule governing the disclosure of code‑share and long‑term wet lease arrangements in print advertisements of scheduled passenger services to permit carriers to disclose generically that some of the advertised service may involve travel on another carrier, so long as they also identify a list of all potential carriers involved in serving the markets advertised. The action is taken in response to a petition for rulemaking filed by United Airlines, Inc. By: Karan Bhatia |
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