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OST-99-5003

Notice of Proposed Rulemaking: Fees and Charges for Special Services

OST-99-5003 January 21, 1999 pdficon1.gif (224 bytes)Fees and Charges for Special Services Fees and Charges document.gif (123 bytes)HTML

The Department is proposing a major reorganization of the processing fee schedule contained in existing section 389.25(a). Of the 50 fee items listed in the schedule, we are proposing to eliminate 10 and to retain or revise the remaining 40. We also are proposing various new items, resulting in a net change from 50 to 76 schedule items. All items considered, there are 55 fee increases, 6 fee decreases, 9 instances in which the fee is unchanged and 6 instances in which an item is reserved for future use. Under the proposed fee schedule, prospective or incumbent U.S. air carriers that apply for new or modified interstate certificate authority involving the use of ``small'' aircraft, defined as aircraft with 60 seats or less or with a maximum payload capacity of 18,000 pounds or less, are grouped with U.S. commuter air carriers with regard to the processing of initial applications for economic operating authority, amendments to initial applications, and/or applications for various exemptions or waivers from our regulations. Under the current schedule, the fees levied for these special services to U.S. certificated air carriers operating small aircraft are the same as the fees for U.S. certificated air carriers operating aircraft with more than 60 seats. Our analysis has determined that the costs to process applications involving the former are substantially lower than the costs for the latter, yet are similar to the processing costs for U.S. commuter air carrier authorizations. We are also proposing a new, incremental fee in the case of   applications for various international air service rights when the Department must conduct a comparative proceeding to distribute those rights among multiple applicants. This comparative process entails significantly higher costs to the Department than those incurred when a comparative proceeding is not necessary. Additionally, except in the case of a treaty or an agreement, we are proposing to eliminate existing section 389.24, which authorizes the waiver of processing fees for foreign air carriers under certain circumstances. Currently, 235 foreign air carriers that have been granted U.S. economic operating authority qualify for this waiver, and the annual costs we incur to process service applications from such carriers amount to $248,000. We have concluded that it is neither necessary nor appropriate for the U.S. government to continue to absorb these costs.

By:  James New / John Miller



Notice of Proposed Rulemaking:  Fees and Charges for Special Services

OST-99-5003 January 22, 1999 Supplement - Aviation User Fees/Service Job Costs
Pt. 1 | Pt. 2 | Pt. 3
NPRM: Fees and Charges

By:  DOT



Notice of Proposed Rulemaking:  Fees and Charges for Special Services

OST-99-5003 March 19, 1999 pdficon.gif (881 bytes)Comments of All Nippon Airways NPRM:  Fees and Charges for Special Services;  Notice 99-1

Furthermore, as noted by the Department in its proposal, U.S. carriers benefit significantly from not paying fees in other countries. This is a substantial benefit in the case of Japan, given the large number of U.S. carriers serving Japan. On the other hand, it would be detrimental to U.S. carriers if the United States were to impose fees on Japanese carriers, thus eliminating the existing, mutually-beneficial reciprocity. Absent reciprocity, and given the new financial burdens which would be imposed on Japanese carriers, it is very likely that the Government of Japan would impose fees on U.S. carriers for all procedural and licensing matters.

Counsel:  Zuckert Scoutt, James Devall, 202-298-8660

OST-99-5003 March 19, 1999 pdficon.gif (881 bytes)Comments of Korean Air Lines NPRM:  Fees and Charges for Special Services;  Notice 99-1

Korean Air operates services between the United States and Korea pursuant to the U.S.-Korea Open Skies Air Transport Agreement (the "U.S.-Korea Open Skies Agreement"), signed on April 23, 1998. and ratified in final form by the two countries on June 9, 1998. That agreement does not contain any provisions relative to the reciprocal waiver of licensing fees. However, the U.S.-Korea Open Skies Agreement is a pro-competitive agreement which includes unlimited operating authority for U.S. air carriers, with comparable authority for Korean air carriers. Thus, the reciprocal waiver of aviation licensing fees would be fully consistent with the intent of the U.S. and Korea in concluding the Open Skies Agreement.

Counsel:  Zuckert Scoutt, James Devall, 202-298-8660

OST-99-5003 March 19, 1999 pdficon.gif (881 bytes)Comments of Pakistan International Airlines NPRM:  Fees and Charges for Special Services;  Notice 99-1

Finally, the fees in the proposed rulemaking relating to foreign air carriers are quite substantial and in some instances new. For example, the current fee for a Foreign Air Carrier Permit is $760 and the proposed new fee is $1,550. An even more drastic increase is proposed for a Statement of Code-Share Authorization. The current fee is $8 and the proposed new fee is $1,100. It is unfair to not only eliminate the fee waiver for countries, like Pakistan, that do not charge fees for U.S. carriers, but also to add additional fees and increase significantly existing fees.

Counsel:  Zuckert Scoutt, James Devall, 202-298-8660

OST-99-5003 March 19, 1999 pdficon.gif (881 bytes)Comments of Nippon Cargo Airlines NPRM:  Fees and Charges for Special Services;  Notice 99-1

It is untimely and unfair to Japan and other countries that have recently reached new bilateral agreements with the United States to require that a waiver be granted only if required by treaty or agreement. In March 1998, the United States and Japan signed a Memorandum of Understanding that significantly expanded opportunities for carriers of both countries (the " 1998 MOU"). (The l 998 MOU became effective through an exchange of diplomatic notes dated April 20. 1998.) The 1998 MOU was the product of extensive and detailed negotiations and meetings between delegations of both sides and covered a wide array of issues. Had the Department's fee proposal been known at the time, this issue could have been addressed in the 1998 MOU. The same holds true for the large number of open skies and liberalized bilateral agreements that the United States has negotiated over the past year. If Department believes fees and fee waivers should be addressed by bilateral aviation agreements, then the U.S. Government should send a diplomatic note or otherwise initiate a request for consultations with Japan and other countries to cover this subject. In the meantime, reciprocity requires that the waiver of the fees remain in effect.

Counsel:  Zuckert Scoutt, James Devall, 202-298-8660


Notice of Proposed Rulemaking:  Fees and Charges for Special Services

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Aer Turas Teoranta NPRM:  Fees and Charges for Special Services

Counsel:  Crowell & Moring, Lorraine Halloway, 202.624.2500, lhalloway@cromor.com

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Air 2000 Limited NPRM:  Fees and Charges for Special Services

Counsel:  Crowell & Moring, Lorraine Halloway, 202.624.2500, lhalloway@cromor.com

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Air Canada NPRM:  Fees and Charges for Special Services

The Department must balance the desire to recover $248,000 in licensing "costs" against its obligation to promote the development of an efficient international air transportation system that benefits the traveling and shipping public, and its obligation to minimize government interference and regulation in this area. In Air Canada's opinion, a rational balancing of such competing interests favors the retention of the reciprocal waiver provision for foreign carriers. However, if DOT were to decide to abandon its system of reciprocity-based waivers, then it must more closely tailor its proposed fees to its true cost of providing service to foreign air carriers.

Counsel:  GKMG, Anita Mosner

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Air France NPRM:  Fees and Charges for Special Services

The Department's regulatory role in such licensing situations is limited. The operating rights and code-share rights are provided for by the bilateral agreement. and the Department has no discretion to disapprove requests that meet the terms of the bilateral agreement l rider these circumstances, anything more than a de minimum fee is excessive, cannot be justified under the terms of the bilateral agreement, and is therefore in violation of the above-referenced bilateral agreement provisions.

Counsel:  Bagileo Silverberg, Michael Goldman, 202-944-3305

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of The Air Transport Association of America NPRM:  Fees and Charges for Special Services

ATA urges the Department to reconsider this approach, which will inevitably result in retaliatory action being taken against U.S. carriers by foreign governments.. At the very least, the Department should defer this portion of the NPRM pending the solicitation and receipt of data from affected U.S. carriers that would face foreign governments' imposition of comparable, if not greater, fee increases if such a proposal is adopted. U.S. airlines hold foreign licenses in a number of countries, many of which are subject to the processing fee waivers that the Department has issued. We suggest that the Department issue in this docket a supplemental NPRM requesting that all U.S. carriers with international operations provide an estimate of the annual increased fees they would likely be required to pay to foreign governments if the Department ends the fee waiver program. Based on such data, the Department would then be in a position to compare the benefits of the current program with the fee increases that U.S. carriers could experience abroad.

Counsel:  ATA, James Casey, 202-626-4211

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Allegro NPRM:  Fees and Charges for Special Services
    Attachment A:  Charter Statements of Authorizations Costs  

For the reasons set forth below, the Department should not require airlines to pay substantial processing fees in order to obtain regulatory authority, such as statements of authorization for Third and Fourth Freedom charter flights, that the Department is in effect required to approve pursuant to an applicable bilateral aviation agreement. Secondly, the approach that the Department has adopted to set the proposed fees is flawed as it is applied in particular to set the fees for charter statements of authorization (Item No. 48), resulting in a fee that is much higher than warranted.

Counsel:  Roller & Bauer, Moffett Roller, 202-331-3300, mroller@rollerbauer.com

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Antonov Design Bureau NPRM:  Fees and Charges for Special Services

Antonov submits that eliminating the fee waiver provisions would be contrary to long-standing DOT/CAB precedent, would establish bad policy, and would likely cause repercussions throughout the worldwide aviation industry, including retaliation against U.S. carriers by foreign governments. The waiver of filing fees based on a showing of reciprocity has, for decades, worked well for U.S. air carriers and foreign air carriers. At a time when the U.S. government has been a strong advocate of liberalizing international aviation relationships a move by the Department to abolish long-standing fee waivers based on reciprocity would be a step in the opposite direction, sending the wrong message to other countries and raising an issue that may need to be addressed during international bilateral negotiations

Counsel:  Shaw Pittman, Robert Cohn, 202-663-8060

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Joint Comments of British Airways and Virgin Atlantic NPRM:  Fees and Charges for Special Services

British Airways and Virgin Atlantic submit that elimination of the existing 389.24 reciprocity waiver would constitute an unwarranted reversal of longstanding Department practice and policy, is not required or supported by U.S. law, and would unnecessarily disrupt widely accepted international practice.

Counsel:  British Airways and Boros Garofalo, Don Hainbach, 202-822-9070 / Virgin Atantic and Wilmer Cutler, Jeffrey Shane, 202-663-6000

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of HeavyLift Volga Dnepr NPRM:  Fees and Charges for Special Services

The Department is unduly optimistic in suggesting that elimination of the present waiver provision could'' spur reciprocal action. A more realistic view would be that such action is likely. The Departments proposed action sends the wrong message to foreign governments; and that message resounds with the greatest dissonance in those countries, such as Russia, whose economies are in crisis. The Department's proposal would malice it even more difficult for such countries which are now attempting to earn their way to a more stable economic footing.

Counsel:  Volga Dnepr andMilller Hamilton, Lester Bridgeman, 334-432-1414

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Iberia NPRM:  Fees and Charges for Special Services

The suggestion that a foreign air carrier pay a $400 fee per application is not an arbitrary one. At this fee level, a foreign air carrier would pay, for example, $4,000 over a five-year period in fees for processing generally unopposed and routine applications. This equates to the $4,340 fee a U.S. carrier would pay on a one-time basis for a domestic slot exemption lasting for a five-year period.

Counsel:  Steptoe Johnson, William Karas, 202-429-6223

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of International Air Carrier Assocation NPRM:  Fees and Charges for Special Services

By:  D R Holder, Director Ground Operations, (44) 1432 313710, iacauk@aol.com

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Japan Airlines NPRM:  Fees and Charges for Special Services

The-gross excessiveness of the proposed fee is not solely the result of random vagaries of the relatively small sampling included in the Department's study. Establishment of separate, processing fees for U.S. and foreign carrier slot exemption supplications is supported by the real-world difference; between the two. Proceedings on U.S. carrier slot exemption applications are notably more protracted and complex, factually find legally, than proceedings on foreign carrier slot exemptions. To make matters worse, unlike U.S. carriers, foreign carriers must renew their slot exemptions twice a year ad infinitum (or until such time as more slots are created or slot requiremen1:s are eliminated completely). In contrast, the Department grants U.S. carriers exemptions of indefinite duration for domestic slots. Under the NPRM proposal, JAL would pay fees over a five-year period for an initial slot exemption and subsequent renewals (practically automatic and with minimal burden on DOT) totaling $43,400 dollars (10 x $4,340). In contrast, a U.S. carrier that obtained a domestic slot at the same time as JAL would have paid a fee of $4,340 for use of an exempt domestic slot for the same five-year period and beyond. To call such a result unjust, is a huge understatement.

Counsel:  Steptoe Johnson, William Karas, 202-429-6223

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Joint Comments of Lufthansa and Thai Airways NPRM:  Fees and Charges for Special Services

The elimination of the waiver will result in reciprocal increases and an overall increase in the costs of air transport. Regardless of whether the practice of exempting foreign carriers from paying filing fees is compelled by international law, the likely consequences of breaking with this practice clearly counsels against doing so. Simply stated, the imposition of processing fees by the United States on foreign carriers will necessarily result in other countries imposing reciprocal fees on U.S. carriers and perhaps on third country carriers too. There would be little basis for the Governments of Germany and Thailand, for example, not to reciprocate by charging U.S. carriers filling fees if the United States were to impose such charges on Lufthansa and Thai.

Counsel:  Mark Bisnow for Thai, 202-966-1200 / Wilmer Cutler, James Campbell, 202-663-6000

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Qantas Airways Limited NPRM:  Fees and Charges for Special Services
    Exhibit A:  Code Share Statements of Authorization - No. 59  

Counsel:  Roller & Bauer, Moffett Roller, 202-331-3300, mroller@rollerbauer.com

OST-99-5003 March 22, 1999 pdficon.gif (881 bytes)Comments of Scandinavian Airlines System NPRM:  Fees and Charges for Special Services

As the Department is well aware, the U. S. -Scandinavian bilateral agreements, among other things, provide for an exchange of scheduled carrier route rights for U.S. and Scandinavian carriers such as SAS, they authorize code-sharing between U.S. and Scandinavian carriers, and they implicitly provide assurances that bilaterally authorized operations will be able to operate at slot-restricted airports.

Counsel:  Bagileo Silverberg, Michael Goldman, 202-944-3305


Notice of Proposed Rulemaking (NPRM) - Fees and Charges for Special Services

OST-99-5003 Dated March 25, 1999
Docketed March 26, 1999
pdficon.gif (881 bytes)Comments of the British Embassy NPRM:  Fees and Charges for Special Services;  Notice 99-1

By:  British Embassy, Scott Heckman, State (EB/TRA)


Notice of Proposed Rulemaking:  Fees and Charges for Special Services

OST-99-5003 March 22, 1999
Docketd March 29, 1999
pdficon.gif (881 bytes)Comments of The International Air Carrier Association NPRM:  Fees and Charges for Special Services

By:  IACA, D R Holder

OST-99-5003 March 29, 1999 pdficon.gif (881 bytes)Comments of Asiana Airlines NPRM:  Fees and Charges for Special Services

By:  Patton Boggs LLP, Joseph E. Schmitz for Asiana Airlines


OST-1999-5003

November 10, 2005

Withdrawal of Proposed Rulemaking Action: Fees and Charges for Special Services

This document withdraws an Office of the Secretary notice of proposed rulemaking that proposed to update the fees and charges paid by recipients of certain aviation licensing and related services provided by the Department. The proposal was predicated on specific labor and overhead cost studies and data that, with the passage of time and organizational changes within OST, have been rendered stale, greatly reducing their utility as bases for cost-based fees and charges.

In particular, the horrific events of September 11, 2001, and their aftermath required us to redirect resources to more immediate priorities. Under the Air Transportation Safety and Stabilization Act (Pub. L. 107–42), for example, we were charged with dispensing up to $5 billion in direct payments to assist air carriers that had suffered losses as a result of the September 11 attacks. The delays experienced since September 11 have greatly reduced the utility of the labor cost data underlying our 1999 fee proposal. That proposal has been further compromised by outdated overhead allocations due to numerous organizational changes which have occurred within the Office of the Assistant Secretary for Aviation and International Affairs since the NPRM was issued. For these reasons, the Department believes that the labor and overhead cost estimates used to develop its proposed fees are no longer timely and do not support finalization of the proposed rule. We are, therefore, withdrawing the 1999 NPRM.

By: Michael Reynolds


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