AVIATION REGULATORY UPDATE

Transcription

1 TSA AND FAA ADDRESS CARRIAGE OF LITHIUM ION BATTERIES The Transportation Safety Administration (TSA) issued a Bulletin on March 14, 2017 that requires all nonmedical electronics larger than a cell phone to be checked in the cargo hold of the airplane. The restriction applies to direct flights from the following countries and airports to the United States: Queen Alia (Jordan), Cairo (Egypt), Ataturk (Turkey), King Abdulaziz (Saudi Arabia), King Khalid (Saudi Arabia), Kuwait (Kuwait), Mohammed V (Morocco), Hamad (Qatar), Dubai and Abu Dhabi (UAE). Further, all checked passenger luggage on select flights arriving from the above airports will be screened by the TSA (via machine or canine) before being reunited with the passenger. Passengers with connecting flights will then reclaim their luggage for transfer to their connecting flights. TSA s new policy runs contrary to existing FAA and ICAO requirements for the safe transportation of lithium ion batteries. Following TSA s Bulletin, the FAA s New York Field Office on March 27, 2017 issued additional guidance regarding the safe stowage of lithium batteries on the affected flights. At a minimum, the guidance states that devices should be completely powered down; devices should be protected from damage during transport, including placement in some protective packaging or casing to prevent accidental activation; devices should be dispersed within the cargo hold; spare batteries are prohibited from checked baggage; passengers should be informed verbally to remove all batteries from their carry on baggage when the carry ons are checked pursuant to the TSA Bulletin; during ticket purchase and check in, passengers must be informed that spare lithium batteries are prohibited from checked baggage; and additional personnel training may be necessary. US AIRWAYS AND SABRE: THE END IS IN SIGHT Sabre Holdings Corp. and US Airways (now American Airlines Group) seem to be at the end of a longrunning litigation over claims that Sabre violated Antitrust and Anticompetition rules. On March 21, 2017 a U.S. District Court Judge in Los Angeles denied Sabre s request to overturn a jury verdict that awarded $15 million to US Airways. Sabre, the largest Global Distribution Systems (GDS) provider for air bookings in North America, was accused by US Airways of hindering trade via forced unfavorable contracts terms. The lawsuit focused on a 2011 contract between the airline and online booking provider that required US Airways to supply Sabre with access to all of its seats so that travel agents could sell US Airways seats to corporate and leisure customers. The original jury verdict, awarded to US Airways in 2016, found that Sabre unreasonably restrained trade but that it had not conspired with other firms to cause injury to US Airways. US Airways successfully argued that Sabre s immense market share in the GDS industry placed US Airways at a disadvantage in the negotiation of the 2011 contract as 38 percent of US Airways revenue was generated through Sabre sales while only a small amount of Sabre revenue was generated from US Airways ticket sales.

2 US Airways has requested $122 million in attorneys fees for the six year litigation. The Court has yet to rule on the motion. TRUMP SEEKS TO SIGNIFICANTLY RESHAPE TSA 9/11 FEE The Trump Administration is proposing to increase the September 11th airline security fee to ensure that that cost of government services is not subsidized by taxpayers who do not directly benefit from these programs. While the Administration has not publicly stated the exact amount of the increase, it has noted that fees should be raised high enough to cover 75% of passenger security operations. Reports indicate that the current $5.60 fee for each leg of a flight could rise as much as $1.00. The higher fee is projected to generate $40 billion over its first decade and contribute $12.6 billion to deficit reduction. A4A has asked the D.C. Circuit Court of Appeals to review the fee hike and we expect to see significant opposition from airlines if the proposal moves forward. In addition, the budget seeks to eliminate TSA grants to state and local jurisdictions to incentivize police patrols at airports because [the patrols] should already be a high priority and includes a reduction of the Visible Intermodal Prevention and Response team that patrols airports with bomb sniffing dogs. With respect to DOT, the budget is calling for a 13% ($2.4 billion) reduction in the Department of Transportation s (DOT) funding. This includes moving air traffic control from the Federal Aviation Administration to an independent, non governmental organization and eliminating the Essential Air Service (EAS) program, which subsidizes air carriers to operate unprofitable passenger routes to rural communities in the United States. DEPARTMENT OF TRANSPORTATION EXTENDS COMPLIANCE DATE FOR MISHANDLED BAGGAGE FINAL RULE DOT has extended the compliance date for its final rule on reporting data for mishandled baggage and wheelchairs in aircraft cargo compartments from January 1, 2018 to January 1, This extension is in response to requests by Airlines for America (A4A) and Delta. The final rule changes the mishandled baggage data that U.S. air carriers are required to report, from the number of Mishandled Baggage Reports (MBR) and the number of domestic passenger enplanements to the number of mishandled bags and the number of enplaned bags. DOT believes this adjusted reporting methodology will better educate the general public as to the actual percentage of bags that are mishandled. The rule also requires separate statistics for mishandled wheelchairs and scooters used by passengers with disabilities and transported in cargo compartments. This rule does not apply to foreign air carriers.

3 NORWEGIAN AIR CAN INTERVENE IN DC CIRCUIT AIR PERMIT ROW On March 6, 2017 the D.C. Circuit held that Norwegian Air Shuttle ASA s Irish subsidiary, Norwegian Air International (NAI), can intervene in a suit brought by a coalition of pilots and flight attendant unions challenging DOT s decision to grant a foreign air carrier permit to Norwegian Air International to offer service to U.S. destinations. The airline asked for permission to intervene in early February arguing that it has a fundamental and direct interest in the proceedings as its plans to operate as a foreign carrier to the U.S. would be upended if the order to grant the permit was reversed or vacated by the court. Norwegian Air s bid to have its subsidiary serve U.S. markets has come under fire by numerous U.S. labor groups and others who claim the airline s questionable labor practices undercut employee s ability to unionize and bargain collectively. NAI filed its application for the permit in late 2013, but it was not granted until December In its order, DOT stated that it had no choice but to issue the permit despite the controversy surrounding the application and the opposition from labor groups as well as foreign and domestic airlines. The decision came the same day that the European Union filed an arbitration claim against the U.S. for delaying its decision on NAI s application. ADA PREEMPTS PASSENGER S NEGLIGENCE CLAIMS ARISING FROM IMPACT WITH VIDEO MONITOR A passenger is suing American Airlines after hitting her head on a video monitor on a flight from JFK to LAX. According to the complaint, the monitor protruded from the wall in front of and above her seat and was painted to blend with the wall. The plaintiff claims to have sustained severe head and heart injuries due to the impact with the monitor and alleges entitlement to over $11 million in compensatory damages and punitive damages exceeding $21 million. The passenger also sought injunctive relief that American Airlines remove certain seats close to the monitors and paint the walls and monitors different colors. American removed the case to federal court and asked for judgment on the grounds that the claims were preempted by 49 U.S.C (b). In support of its motion, the airline submitted an affidavit from the engineering manager of its interiors group stating that the installation of the video monitor complied with federal regulations and industry practices. The court analyzed American s argument and applied a three factor test, ultimately finding that: the positioning of an in flight monitor relates to an airline service; the plaintiff s claims concerning the placement of the monitors directly affects that service; and the placement of monitors near passenger seating was essential to the provision of safety instruction videos and in flight entertainment. Based on

4 these findings the court granted American s motion. On February 28, 2017 the plaintiff filed a notice of appeal. See Faewmino v. American Airlines, Inc. (S.D.N.Y. Jan. 30, 2017). DELTA FILES TRADEMARK SUIT OVER FRAUDULENT WEBSITE Delta Airlines Inc. has filed a complaint against the operators of a website at deltaairlinereservations.org where a handful of John Does are using Delta trademarks to defraud and confuse the public by impersonating the airline. The operators of the site even offer a call center through the website where they intentionally misrepresent to customers that they are doing business with Delta Airlines. In its complaint, Delta notes that it has registered numerous block letter and stylized marks with the U.S. Patent and Trademark Office, and the defendants have copied all of them for use on their website. The unauthorized use of Delta s marks has caused consumer confusion and the suit states it is deliberate, willful, and demonstrative of bad faith intent to trade on the goodwill of Delta s marks. As a result of the alleged infringement, Delta states that it continues to suffer irreparable harm and damage to its reputation, according to the suit. The airline is seeking permanent injunctive relief, disgorgement of profits, actual or statutory damages, costs, and attorney fees. See Delta Airlines, Inc. v. John Does 1 5 (N.D.Ga. Nov. 22, 2013). FAA MANDATES ADS B OUT BY 2020 The FAA has mandated aircraft operated in controlled airspace be equipped with Automatic Dependent Surveillance Broadcast (ADS B) Out by January 1, To maintain access to the affected airspace, both domestic and foreign operators must comply with the requirements. The FAA has also stated that it will not extend the effective date of the rule as implementation is critical to the foundational element of the U.S. NextGen program. ADS B Out is a precise satellite based surveillance system which uses GPS technology to determine an aircraft s location, airspeed, and additional relevant data to other properly equipped aircraft and ground stations as well as air traffic control. The FAA has been working with the aviation industry to ensure awareness of the requirement. Notably, the U.S. government has presented a Working Paper to the ICAO 39th Assembly calling attention to the mandate and foreign regulatory authorities are being encouraged to require similar equipment modernization as soon as possible to avoid service disruption once the mandate becomes effective. DELTA AIRLINES FINED $90,000 FOR FAILURE TO ADEQUATELY PROVIDE FOOD AND WATER DURING TARMAC DELAYS The Department of Transportation fined Delta Airlines, Inc. $90,000 for failing to provide food and water to passengers on four flight delays at JFK and ATL in July 2016.

5 Pursuant to 14 CFR 259.4(b)(3) carriers are required to provide adequate food and water no later than two hours after the aircraft leaves the gate (in case of departure) or touches down (in case of arrival) if the aircraft remains on the tarmac. Section 259.4(b)(7) requires that carriers have sufficient resources to implement their contingency plan for lengthy tarmac delays. Although water was served on each of these flights to all passengers, evidence indicated that there was limited or no food service provided. Delta acknowledged that the manner of distribution of snacks was not ideal and consented to a fine of $90,000 and to an order to cease and desist from further violations. VIRGIN ATLANTIC FINED FOR FULL FARE ADVERTISING VIOLATION DOT has fined Virgin Atlantic Airways Ltd. (Virgin) $30,000 for violations of 14 C.F.R. Section (a), which requires that the first price quote for air transportation must state the entire price to be paid by the customer. Violating the regulation constitutes an unfair and deceptive practice in violation of 49 U.S.C The complaint, among other assertions, states that Virgin s description of Taxes on its Rewards Flight website did not make it sufficiently clear to consumers that the heading Taxes included taxes, fees and carrier imposed surcharges. Virgin s response argued that the Taxes heading was a mistake and that it was corrected the same day as the complainant s purchase. In issuing the penalty, DOT relied on guidance it published in February 2012 which explains that that it is an unfair and deceptive practice in violation of section to include carrier imposed surcharges and other fees not imposed by a government under the label of taxes, or under the label taxes and fees. Virgin neither admitted nor denied the violations described above when it consented to a cease and desist order from DOT in addition to the $30,000 fine. SPIRIT FINED FOR FAILING TO MAKE REQUIRED NOTIFICATIONS DURING LENGTHY TARMAC DELAY Spirit Airlines, Inc. (Spirit) was recently fined $60,000 for failing to inform passengers on a flight delayed at the gate that they had the opportunity to deplane. Under 14 C.F.R (b)(6), covered carriers must provide notifications beginning 30 minutes after the scheduled departure time and every 30 minutes thereafter that passengers have the opportunity to deplane from an aircraft that is at the gate or another disembarkation area with the door open if the opportunity to deplane actually exists. On December 27, 2015, Spirit Airlines flight 713 departed from Orlando International Airport (MCO) and was scheduled to land at George Bush Intercontinental Airport (IAH). The aircraft was diverted to Louis Armstrong New Orleans International Airport (MSY) due to bad weather. According to the consent order, after landing at MSY and reaching the gate, the aircraft door was opened. The aircraft remained at the gate with the door open for more than 30 minutes and passengers had the opportunity to deplane during this time. However, Spirit Airlines failed to notify passengers of this opportunity which resulted in a violation of the tarmac delay rule.

6 This Aviation Regulatory Update is intended to keep readers current on matters affecting the industry, and is not intended to be legal advice. If you have any questions, please contact Evelyn Sahr at or ; Drew Derco at or