49 U.S.C. § 41737 — Compensation guidelines, limitations,

Page 1187 TITLE 49—TRANSPORTATION § 41737 § 41737. Compensation guidelines, limitations, and claims (a) COMPENSATION GUIDELINES.—(1) The Sec- retary of Transportation shall prescribe guide- lines governing the rate of compensation pay- able under this subchapter. The guidelines shall be used to determine the reasonable amount of compensation required to ensure the continu- ation of air service or air transportation under this subchapter. The guidelines shall— (A) provide for a reduction in compensation when an air carrier does not provide service or transportation agreed to be provided; (B) consider amounts needed by an air car- rier to promote public use of the service or transportation for which compensation is being paid; (C) include expense elements based on rep- resentative costs of air carriers providing scheduled air transportation of passengers, property, and mail on aircraft of the type the Secretary decides is appropriate for providing the service or transportation for which com- pensation is being provided; (D) include provisions under which the Sec- retary may encourage an air carrier to im- prove air service for which compensation is being paid under this subchapter by incor- porating financial incentives in an essential air service contract based on specified per- formance goals, including goals related to im- proving on-time performance, reducing the number of flight cancellations, establishing reasonable fares (including joint fares beyond the hub airport), establishing convenient con- nections to flights providing service beyond hub airports, and increasing marketing ef- forts; and (E) include provisions under which the Sec- retary may execute a long-term essential air service contract to encourage an air carrier to provide air service to an eligible place if it would be in the public interest to do so. (2) Promotional amounts described in para- graph (1)(B) of this subsection shall be a special, segregated element of the compensation pro- vided to a carrier under this subchapter. (b) REQUIRED FINDING.—The Secretary may pay compensation to an air carrier for providing air service or air transportation under this sub- chapter only if the Secretary finds the carrier is able to provide the service or transportation in a reliable way. (c) CLAIMS.—Not later than 15 days after re- ceiving a written claim from an air carrier for compensation under this subchapter, the Sec- retary shall— (1) pay or deny the United States Govern- ment’s share of a claim; and (2) if denying the claim, notify the carrier of the denial and the reasons for the denial. (d) AUTHORITY TO MAKE AGREEMENTS AND INCUR OBLIGATIONS.—The Secretary may make agreements and incur obligations from the Air- port and Airway Trust Fund established under section 9502 of the Internal Revenue Code of 1986 (26 U.S.C. 9502) to pay compensation under this subchapter. An agreement by the Secretary under this subsection is a contractual obligation of the Government to pay the Government’s share of the compensation. (e) ADJUSTMENTS TO ACCOUNT FOR SIGNIFI- CANTLY INCREASED COSTS.— (1) IN GENERAL.—If the Secretary determines that air carriers are experiencing significantly increased costs in providing air service or air transportation for which compensation is being paid under this subchapter, the Sec- retary may increase the rates of compensation payable under this subchapter without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734. (2) READJUSTMENT IF COSTS SUBSEQUENTLY DECLINE.—If an adjustment is made under paragraph (1), and total unit costs subse- quently decrease to at least the total unit cost reflected in the compensation rate, then the Secretary may reverse the adjustment pre- viously made under paragraph (1) without re- gard to any agreement or requirement relat- ing to the renegotiation of contracts or any notice requirement under section 41734. (3) SIGNIFICANTLY INCREASED COSTS DE- FINED.—In this subsection, the term ‘‘signifi- cantly increased costs’’ means a total unit cost increase (but not increases in individual unit costs) of 10 percent or more in relation to the total unit cost reflected in the compensa- tion rate, based on the carrier’s internal audit of its financial statements if such cost in- crease is incurred for a period of at least 2 con- secutive months. (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1151; Pub. L. 108–176, title IV, § 402(a), Dec. 12, 2003, 117 Stat. 2543; Pub. L. 112–95, title IV, § 427(a), Feb. 14, 2012, 126 Stat. 99; Pub. L. 118–63, title V, § 561(h), May 16, 2024, 138 Stat. 1216.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 41737(a) ...... 49 App.:1389(f). Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(e)(2)–(g); added Oct. 24, 1978, Pub. L. 95–504, § 33(a), 92 Stat. 1732; Dec. 8, 1983, Pub. L. 98–213, § 10, 97 Stat. 1461; Oct. 4, 1984, Pub. L. 98–443, § 9(r), 98 Stat. 1708; restated Dec. 30, 1987, Pub. L. 100–223, § 202(a)(1), (2), (b)(1), 101 Stat. 1507, 1515. 41737(b) ...... 49 App.:1389(e)(2). 41737(c) ...... 49 App.:1389(g). 41737(d) ...... 49 App.:1389(l). Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(l); added Nov. 5, 1990, Pub. L. 101–508, § 9113(b)(1), 104 Stat. 1388–363. In subsection (a)(1), before clause (A), the word ‘‘pre- scribe’’ is substituted for ‘‘establish’’ to eliminate an executed word. The words ‘‘air service or air transpor- tation under this subchapter’’ are substituted for ‘‘air service under this section’’ for consistency with the source provisions restated in sections 41733, 41735, and 41736 of the revised title. In clause (C), the words ‘‘the service or transportation for which compensation is being provided’’ are substituted for ‘‘such service’’ for clarity. In subsection (a)(2), the words ‘‘compensation pro- vided to a carrier under this subchapter’’ are sub- stituted for ‘‘required compensation’’ for clarity. In subsection (b), the words ‘‘air service or air trans- portation’’ are substituted for ‘‘air service’’ for consist- ency with the source provisions restated in sections 41733, 41735, and 41736 of the revised title. In subsection (d)(2), the reference to fiscal year 1992 is omitted as obsolete. Page 1188 TITLE 49—TRANSPORTATION § 41738 Editorial Notes AMENDMENTS 2024—Subsec. (d). Pub. L. 118–63 struck out par. (1) designation before ‘‘The Secretary’’ and par. (2) which read as follows: ‘‘Not more than $38,600,000 is available to the Secretary out of the Fund for each of the fiscal years ending September 30, 1993–1998, to incur obliga- tions under this section. Amounts made available under this section remain available until expended.’’ 2012—Subsec. (a)(1)(D), (E). Pub. L. 112–95 added sub- pars. (D) and (E). 2003—Subsec. (e). Pub. L. 108–176 added subsec. (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2003 AMENDMENT Pub. L. 108–176, title IV, § 402(b), Dec. 12, 2003, 117 Stat. 2543, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall take effect 30 days after the date of enactment of this Act [Dec. 12, 2003].’’ EMERGENCY ACROSS-THE-BOARD ADJUSTMENT TO COMPENSATION FOR SIGNIFICANTLY INCREASED COSTS Pub. L. 112–95, title IV, § 426(a), Feb. 14, 2012, 126 Stat. 98; Pub. L. 115–254, div. B, title V, § 539(s)(1), Oct. 5, 2018, 132 Stat. 3371, provided that: ‘‘Subject to the avail- ability of funds, the Secretary of Transportation may increase the rates of compensation payable to air car- riers under subchapter II of chapter 417 of title 49, United States Code, to compensate such carriers for in- creased aviation fuel costs without regard to any agree- ment or requirement relating to the renegotiation of contracts or any notice requirement under section 41734 of such title.’’ DEADLINE FOR ISSUANCE OF REVISED GUIDANCE Pub. L. 112–95, title IV, § 427(b), Feb. 14, 2012, 126 Stat. 99, provided that: ‘‘Not later than 1 year after the date of enactment of this Act [Feb. 14, 2012], the Secretary of Transportation shall issue revised guidelines gov- erning the rate of compensation payable under sub- chapter II of chapter 417 that incorporate the amend- ments made by this section [amending this section].’’ § 41738. Fitness of air carriers Notwithstanding section 40109(a) and (c)–(h) of this title, an air carrier may provide air service to an eligible place or air transportation to a place designated under section 41736 of this title only when the Secretary of Transportation de- cides that— (1) the carrier is fit, willing, and able to per- form the service or transportation; and (2) aircraft used to provide the service or transportation, and operations related to the service or transportation, conform to the safe- ty standards prescribed by the Administrator of the Federal Aviation Administration. (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 41738 .......... 49 App.:1389(e)(1). Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(e)(1); added Oct. 24, 1978, Pub. L. 95–504, § 33(a), 92 Stat. 1732; Dec. 8, 1983, Pub. L. 98–213, § 10, 97 Stat. 1461; Oct. 4, 1984, Pub. L. 98–443, § 9(r), 98 Stat. 1708; restated Dec. 30, 1987, Pub. L. 100–223, § 202(a)(1), (2), (b)(1), 101 Stat. 1507, 1515. In this section, before clause (1), the words ‘‘air transportation to a place’’ are substituted for ‘‘service to a point’’ for consistency with the source provisions restated in sections 41733, 41735, and 41736 of the revised title. In clauses (1) and (2), the words ‘‘service or trans- portation’’ are substituted for ‘‘such service’’ for con- sistency with the source provisions restated in sections 41733, 41735, and 41736 of the revised title. § 41739. Air carrier obligations If at least 2 air carriers make an agreement to operate under or use a single carrier designator code to provide air transportation, the carrier whose code is being used shares responsibility with the other carriers for the quality of trans- portation provided the public under the code by the other carriers. (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 41739 .......... 49 App.:1389(i). Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(i); added Oct. 24, 1978, Pub. L. 95–504, § 33(a), 92 Stat. 1732; Dec. 8, 1983, Pub. L. 98–213, § 10, 97 Stat. 1461; Oct. 4, 1984, Pub. L. 98–443, § 9(r), 98 Stat. 1708; restated Dec. 30, 1987, Pub. L. 100–223, § 202(a)(1), (2), (b)(1), 101 Stat. 1507, 1516. The words ‘‘quality of transportation’’ are sub- stituted for ‘‘quality of service’’ for clarity and consist- ency in this section. [§ 41740. Repealed. Pub. L. 118–63, title V, § 561(i), May 16, 2024, 138 Stat. 1216] Section, Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152; Pub. L. 108–176, title IV, § 403, Dec. 12, 2003, 117 Stat. 2543, related to joint proposals by 2 or more air carriers for providing air service or air transportation under this subchapter. § 41741. Insurance The Secretary of Transportation may pay an air carrier compensation under this subchapter only when the carrier files with the Secretary an insurance policy or self-insurance plan ap- proved by the Secretary. The policy or plan must be sufficient to pay for bodily injury to, or death of, an individual, or for loss of or damage to property of others, resulting from the oper- ation of aircraft, but not more than the amount of the policy or plan limits. (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 41741 .......... 49 App.:1389(h). Aug. 23, 1958, Pub. L. 85–726, 72 Stat. 731, § 419(h); added Oct. 24, 1978, Pub. L. 95–504, § 33(a), 92 Stat. 1732; Dec. 8, 1983, Pub. L. 98–213, § 10, 97 Stat. 1461; Oct. 4, 1984, Pub. L. 98–443, § 9(r), 98 Stat. 1708; restated Dec. 30, 1987, Pub. L. 100–223, § 202(a)(1), (2), (b)(1), 101 Stat. 1507, 1516. The words ‘‘The Secretary of Transportation may pay . . . only when’’ are substituted for ‘‘An air carrier