14 C.F.R. PART 330—PROCEDURES FOR COMPENSATION OF AIR CARRIERS
Title 14 - Aeronautics and Space
Authority: Pub. L. 107–42, 115 Stat. 230 (49 U.S.C. 40101 note); sec. 124(d), Pub. L. 107–71, 115 Stat. 631 (49 U.S.C. 40101 note).
Source: Docket No. OST–2001–10885, 67 FR 54066, Aug. 20, 2002, unless otherwise noted.
The purpose of this part is to establish procedures to implement section 101(a)(2) of the Air Transportation Safety and System Stabilization Act (“the Act”), Public Law 107–42, 115 Stat. 230 (49 U.S.C. 40101 note). This statutory provision is intended to compensate air carriers for direct losses incurred as a result of the Federal ground stop order issued by the Secretary of Transportation, and any subsequent orders, following the terrorist attacks of September 11, 2001, and incremental losses incurred from September 11 through December 31, 2001, as the result of those attacks. The following terms apply to this part: Air carrier means any U.S. air carrier, as defined in 49 U.S.C. 40102. Air taxi operator means an air carrier, other than a commuter air carrier, that holds authority issued under 14 CFR part 298 and 14 CFR part 121 or part 135. Available seat-miles (ASMs) means the aircraft miles flown on each flight stage by an air carrier multiplied by the number of seats available for revenue use on that stage. Certificated air carrier means an air carrier holding a certificate issued under 49 U.S.C. 41102 or 41103. Commuter air carrier means an air carrier as defined in 14 CFR 298.2(e) that holds a commuter air carrier authorization issued under 49 U.S.C. 41738. Incremental loss means a loss incurred by an air carrier in the period of September 11, 2001–December 31, 2001, as a result of the terrorist attacks on the United States of September 11, 2001. It does not include any loss that would have been incurred if the terrorist attacks on the United States of September 11, 2001, had not occurred. Regional air carrier means an air carrier that operates at least one large aircraft and has annual operating revenues of less than $100 million. Revenue ton-miles (RTMs) means the aircraft miles flown on each flight stage by the air carrier multiplied by the number of tons of revenue cargo transported on that stage. For purposes of this part, RTMs include only those resulting from all-cargo flights. Under this part, the Department will distribute up to the full amount of the compensation it determines is payable to air carriers under section 103(b) of the Act, and up to the full amount of the set-aside provided for in subpart C of this part to air carriers eligible for it. The Department may require additional information to support payments to individual carriers in connection with this final payment. (a) You are eligible to receive compensation equaling the lesser of your direct and incremental losses or the amount calculated by the formula set forth in section 103(b)(2) of the Act. (b) If at any time we determine that a carrier has been compensated in an amount that exceeds the amount to which it is entitled under section 103(b) of the Act or the subpart C set-aside program, the Department will notify the carrier of the basis for the determination, the amount that must be repaid, and the procedures to follow for making a repayment. We will follow collection procedures under the Federal Claims Collection Act of 1966 (31 U.S.C. 3701 et seq.,) to the extent required by law, in recovering such overpayments. This process will also apply to collection of overpayments by the Department as a result of an audit by representatives of the Department, including the Office of the Inspector General, or the Comptroller General under section 103 of the Act, which may be the subject of a separate collection action. (a) If you are a certificated air carrier, a commuter air carrier, an air taxi, or an indirect air carrier, you are eligible to apply for compensation under Subpart B of this part. (b) [Reserved] (c) If you are a foreign air carrier, commercial operator, flying club, fractional owner, general aviation operator, fixed base operator, flight school, or ticket agent, you are not eligible to apply for compensation under this part. Yes, if, as an air carrier, you previously received compensation under section 101(a)(2) of the Act, you must, in all cases, submit a complete Form 330 (Final) and other documents required under this part. You must do so even if you are not seeking additional compensation. (a) You must submit your application, and all required supporting information, in hard copy (not by fax or electronic means) to the following address:
U.S. Department of Transportation, Aviation Relief Desk (X–50), 400 7th Street, SW., Room 6401, Washington, DC 20590. (b) If your complete application is not sent to the address in paragraph (a) of this section as required in this section, the Department will not accept it. As an air carrier applying for compensation under this part, you must provide to the Department all materials described in §§330.27–330.33. The Department will not accept your application if it does not comply fully with the requirements of this subpart. (a) You must submit Form 330 (Final), found in Appendix A to this part. Data supplied on Form 330 (Final) in Appendix A to this part must be tied only to the airline portion of their businesses and must exclude non-air transportation related expenses. (b) [Reserved] (c) Air carriers that operate both passenger/combination aircraft and all-cargo aircraft and routinely report to the Department ASMs and RTMs separately for both types of flights must submit two versions of Form 330 (Final) in Appendix A to this part to seek compensation on both an ASM and RTM basis. Financial and operational data (both actual and forecasted) must be disaggregated and correlate exclusively to one or the other type of operation. (d) You must include the following financial information on Form 330 (Final) for the period September 11, 2001 through December 31, 2001: (1) Your pre-September 11, 2001, profit/loss forecast for the period beginning September 11, 2001, and ending December 31, 2001. This forecast must reflect seasonal reductions in capacity and the cost savings associated with such reductions. Documentation verifying that the pre-September 11, 2001, forecast was, in fact, completed before that date must also be submitted with your application. (2) Your actual results for that same period reflecting any losses that were a direct result of the terrorist attacks of September 11, 2001. These actual results must incorporate all cost reductions associated with capacity reductions and furloughs you made due to the reduced demand for air service after the September 11th attacks (e.g., employee pay adjustments and furloughs, changes in aircraft fleet in service, schedule and capacity changes, etc.). (3) The difference between your forecast profits/losses and actual results for that period (i.e., the difference between the figures in paragraphs (d) (1) and (2) of this section). (4) The actual losses you report must be net losses, before taxes, taking into account savings from such items as reductions in passenger and cargo handling costs, fuel consumption, landing fees, revenue/traffic-related expenses (e.g., commissions, food and beverage, booking fees, credit card fees), and savings of other costs due to the ground stop and subsequent schedule/capacity/staff reductions (including savings from layoffs of employees, adjusted for severance payments), as well as proceeds from business recovery insurance or other insurance payments. You must not report as losses insurance premium increases that have been or will be compensated by the Government under the Act, or other losses that have been or will be compensated by other subsidies or assistance provided by Federal, state, or local governments. As an air taxi operator, you must complete Form 330 (Final) in accordance with the requirements in §330.27. You must also complete pages 2, 5, and 6 (certifying pages 2 and 5) of Form 330–C as shown in Appendix C to this part. Explanatory notes are included on that Form. (a) Except as provided in paragraph (d) of this section, if you are applying for compensation as a passenger or combination passenger/cargo carrier, you must have submitted your August 2001 total completed ASM report to the Department for your system-wide air service (e.g., scheduled, non-scheduled, foreign, and domestic). (b) Except as provided in paragraph (d) of this section, if you are applying for compensation as an all-cargo carrier, you must have submitted your RTM reports to the Department for the second calendar quarter of 2001. (c) In calculating and submitting ASMs and RTMs under paragraphs (a) and (b) of this section, there are certain things you must not do: (1) Except at the direction of the Department, or to correct an error that you document to the Department, you must not alter the ASM or RTM reports you earlier submitted to the Department. Your ASMs or RTMs for purposes of this part are as you have reported them to the Department according to existing standards, requirements, and methodologies established by the Office of Airline Information (Bureau of Transportation Statistics). (2) You must not include ASMs or RTMs resulting from operations by your code-sharing or alliance partners. (d) If you have not previously reported ASMs or RTMs as provided in paragraphs (a) and (b) of this section for a given operation or operations, you may submit your calculation of ASMs or RTMs to the Department with your application. You must certify the accuracy of this calculation and submit with your application the data and assumptions on which the calculation is based. After reviewing your submission, the Department may modify or reject your calculation. (1) If you are a direct air carrier that has operated your aircraft for a lessee (i.e., a wet lease, or aircraft, crew, maintenance, and insurance (ACMI) operation), you may submit your calculation of ASMs or RTMs for these flights. Your submission must include the following elements: (i) Documentation that you otherwise qualify as an air carrier; (ii) Documentation that you are a wet lessor, and an explanation of why you did not previously report ASMs or RTMs for the operations in question; (iii) Documentation of the identify of the wet lessees involved in these operations; and (iv) Accurate and auditable records of ASMs or RTMs actually flown during the relevant time period for these operations. (2) If you are an indirect air carrier, you may submit your calculation of ASMs or RTMs for flights that direct air carriers have operated for you under contract or other arrangement. Your submission must include the following elements: (i) Documentation that you otherwise qualify as an air carrier; (ii) Documentation that you are an indirect air carrier, and an explanation of why you did not previously report ASMs or RTMs for the operations in question; (iii) Documentation of the identify of the direct air carriers involved in these operations; and (iv) Accurate and auditable records of ASMs or RTMs actually flown during the relevant time period for these operations. Yes, with respect to all information submitted or retained under §§330.27–330.31 and 330.35, your Chief Executive Officer (CEO), Chief Financial Officer (CFO), or Chief Operating Officer (COO) or, if those titles are not used, the equivalent officer, must certify that the submitted information was prepared under his or her supervision and is true and accurate, under penalty of law. As an air carrier that applies for compensation under this part, you must retain records as follows: (a) You must retain all books, records, and other source and summary documentation supporting your claims for compensation of direct and incremental losses pursuant to Sections 101, 103, and 106 of the Act. This requirement includes, but is not limited to, the following: (1) You must retain supporting evidence and documentation demonstrating the validity of the data you provide under §§330.27–330.31. (2) You must retain documentation verifying that your pre-September 11, 2001, forecast was the most recent forecast available to that date. (3) You must also retain documentation outlining the assumptions made for all forecasts and the source of the data and other inputs used in making the forecasts. (4) You must agree to have your independent public accountant retain all reports, working papers, and supporting documentation pertaining to the agreed-upon procedures engagement conducted by your independent public accountant under the requirements of this part for a period of five years. The accountant must make this information available for audit and examination by representatives of the Department of Transportation (including the Office of the Inspector General), the Comptroller General of the United States, or other Federal agencies. (b) You must preserve and maintain this documentation in a manner that readily permits its audit and examination by representatives of the Department of Transportation (including the Office of the Inspector General), the Comptroller General of the United States, or other Federal agencies. (c) You must retain this documentation for five years. (d) You must make all requested data available within one week from a request by the Department of Transportation (including the Office of the Inspector General), the Comptroller General of the United States, or other Federal agencies. (a) All payments you receive from the Department of Transportation under this program are subject to audit. All information you submit with your applications and all records and documentation that you retain are also subject to audit. (b) Except as provided in paragraph (d) of this section, before you are eligible to receive payment from the final installment of compensation under the Act, there must be an independent public accountant's report based on the performance of procedures agreed upon by the Department of Transportation with respect to the carrier's forecasts and actual results. The independent public accountant's engagement must be performed in accordance with generally accepted professional standards applicable to agreed-upon procedures engagements. You must submit the results of the agreed-upon procedures engagement to the Department with your application for payment of the final installment. (c) The following are the core requirements for the independent public accountant's review: (1) Determine that the earnings forecast presented to the Department was inclusive of the entity's full operations as an air carrier and was the most current forecast prepared prior to September 11, 2001; (2) Determine that, if forecasts presented to the Department for prior periods had material variances from actual results, the carrier provided explanations to account for such variances; (3) Determine that the methodology for allocating revenue and expenses to the periods September 1–10 and September 11–30, from the forecasted and actual September results, was in accordance with air carrier records and analyses; (4) Determine that the actual expenses and revenues presented to the Department are in accordance with the official accounting records of the carrier or the financial statements included in the carrier's Securities and Exchange Commission Form 10–Q (for availability, see 17 CFR 249.0–1(b)), and consistent with Generally Accepted Accounting Principles (GAAP), except to the extent that GAAP would require or allow treatment that would be inconsistent with the Act or this part; (5) Verify that the carrier provided explanations supporting the allocation methodology used if the forecasted and/or actual results for the September 11–30 period was different from allocating 66.7 percent of the total amounts for September; (6) Determine that the carrier provided full explanations for all material differences between forecast and actual results for the September 11–30, 2001 period and the October 1—December 31, 2001 period; (7) Determine that the amounts included in management's explanations for such material differences were in accordance with the carrier's analysis of such fluctuations, and the amounts and explanations were traceable to supporting general ledger accounting records or analyses prepared by the carrier; (8) Determine that the amounts presented to the Department in Form 330 (Final), pages 2–3, in appendix A to this part that the carrier identified as adjustments to the difference between the pre-September 11 forecast and actual results for the period September 11 through December 31, 2001, were in accordance with the official accounting records of the carrier or the financial statements included in the carrier's Securities and Exchange Commission Form 10–Q, and consistent with GAAP, except to the extent that GAAP would require or allow treatment that would be inconsistent with the Act or this part; (9) Determine that the insurance recoveries and government payments reported by the air carrier and offsetting income were in accordance with the air carrier's general ledger accounting records; (10) Determine that the information presented in the air carrier's Supplemental Certification were in accordance with the air carrier's general ledger accounting records; (11) Include in the auditor's report full documentation for each exception taken by the auditor; and (12) Identify air carrier reports and records utilized in performing the procedures in paragraphs (c)(1) through (11) of this section. (d) If you are a carrier that reported fewer than 10 million ASMs for the month of August 2001 or fewer than two million RTMs for the quarter ending June 30, 2001, you are not required to report to the Department on the basis of an agreed-upon procedures engagement by an independent public accountant. Instead, you may report on the basis of simplified procedures approved by the Department. (a)(1) The Department generally does not allow air carriers to include in their calculations aircraft impairment charges, charges or expenses attributable to lease buyouts, or other losses that are not actually and fully realized in the period between September 11, 2001 and December 31, 2001. (2) The Department will consider requests to accept adjustments for extraordinary or non-recurring expenses or revenues on a case-by-case basis. If, as a carrier, you make such a request, you must demonstrate the following to the satisfaction of the Department: (i) That the expense or revenue was (or was not, as appropriate) the direct result of the terrorist attacks of September 11, 2001; (ii) That the revenue or expense was reported in accordance with Generally Accepted Accounting Principles (GAAP), except to the extent that the GAAP would require or allow treatment that would be inconsistent with the Act or this part; (iii) That an expense was fully borne within the September 11—December 31, 2001, period and is permanent; and (iv) That the resulting additional compensation would not be duplicative of other allowances for compensation. (b) The Department generally does not accept claims by air carriers that cost savings should be excluded from the calculation of incurred losses. Consequently, the Department will generally not allow such claims to be used in a way that has the effect of increasing the compensation for which an air carrier is eligible. The Department is setting aside a sum of up to $35 million to compensate eligible classes of air carriers, for which application of a distribution formula containing ASMs as a factor, as set forth in section 103(b)(2) of the Act, would inadequately reflect their share of direct and incremental losses. There are two classes of eligible air carriers: (a) You are a Class I air carrier if you are an air taxi, regional, commuter or indirect air carrier and you reported 75,000 or fewer ASMs to the Department for the month of August, 2001. (b) You are a Class II air carrier if you are an air taxi, regional, commuter or indirect air carrier and you reported between 75,001 and 10 million ASMs to the Department for the month of August 2001. [Docket No. OST–2001–10885, 67 FR 54066, Aug. 20, 2002, as amended at 68 FR 44458, July 29, 2003] (a) Except as provided in paragraph (c) of this section, as an air carrier eligible for compensation through the set-aside, you will be compensated for an amount calculated as provided in paragraph (b) of this section. (b)(1) As a Class I carrier, your compensation will be calculated using a fixed ASM rate equivalent to the mean losses per ASM for all Class I carriers applying for compensation. (2) As a Class II carrier, your compensation will be calculated using a graduated ASM rate equivalent to— (i) The mean loss per ASM for all Class I carriers applying for compensation, for each of the first 75,000 ASMs reported; and (ii) The mean remaining loss per ASM for all Class II carriers applying for compensation for each ASM in excess of 75,000. (3) For purposes of this paragraph (b), ASMs are those verified by the Department for August 2001. (4) Any compensation payments previously made to air carriers eligible for the set-aside will be deducted from the amount calculated as the carrier's total compensation under the set-aside formula. (c) If you are an air carrier whose compensation is calculated using an ASM rate as provided in paragraph (b) of this section, your compensation will not be less than an amount equivalent to 25 percent of the direct and incremental transportation-related losses you have demonstrated to the satisfaction of the Department were incurred as a direct result of the terrorist attacks of September 11, 2001. Your compensation will not be more than an amount equivalent to the mean percentage of compensation for losses received by passenger and combination air carriers that are not eligible for the set-aside funds, unless you would have been compensated for more than that percentage of losses under the formula set forth in section 103(b)(2) of the Act, in which case you will be compensated under that formula. [Docket No. OST–2001–10885, 67 FR 54066, Aug. 20, 2002, as amended at 68 FR 44458, July 29, 2003]
Title 14: Aeronautics and Space
PART 330—PROCEDURES FOR COMPENSATION OF AIR CARRIERS
Section Contents
§ 330.1 What is the purpose of this part?
§ 330.3 What do the terms used in this part mean?
§ 330.5 What funds will the Department distribute under this part?
§ 330.7 [Reserved]
§ 330.9 What are the limits on compensation to air carriers?
§ 330.11 Which carriers are eligible to apply for compensation under this part?
§ 330.13 If an air carrier received compensation under the Act previously, does it have to submit a third-round application?
§§ 330.15-330.17 [Reserved]
§ 330.21 [Reserved]
§ 330.23 To what address must air carriers send their applications?
§ 330.25 What are the components of an air carrier's application for compensation?
§ 330.27 What information must certificated and commuter air carriers submit?
§ 330.29 What information must air taxi operators submit on Form 330 (Final) and Form 330–C?
§ 330.31 What data must air carriers submit concerning ASMs or RTMs?
§ 330.33 Must carriers certify the truth and accuracy of data they submit?
§ 330.35 What records must carriers retain?
§ 330.37 Are carriers which participate in this program subject to audit?
§ 330.39 What are examples of types of losses that the Department does not allow?
§ 330.41 What funds is the Department setting aside for eligible classes of air carriers?
§ 330.43 What classes of air carriers are eligible under the set-aside?
§ 330.45 What is the basis on which air carriers will be compensated under the set-aside?
Appendix A to Part 330—Forms for All Carriers
Appendix B to Part 330 [Reserved]
Appendix C to Part 330—Forms for Air Taxi Operators
Subpart A—General Provisions
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§ 330.1 What is the purpose of this part?
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§ 330.3 What do the terms used in this part mean?
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§ 330.5 What funds will the Department distribute under this part?
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§ 330.7 [Reserved]
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§ 330.9 What are the limits on compensation to air carriers?
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§ 330.11 Which carriers are eligible to apply for compensation under this part?
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§ 330.13 If an air carrier received compensation under the Act previously, does it have to submit a third-round application?
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§§ 330.15-330.17 [Reserved]
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Subpart B—Application Procedures
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§ 330.21 [Reserved]
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§ 330.23 To what address must air carriers send their applications?
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§ 330.25 What are the components of an air carrier's application for compensation?
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§ 330.27 What information must certificated and commuter air carriers submit?
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§ 330.29 What information must air taxi operators submit on Form 330 (Final) and Form 330–C?
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§ 330.31 What data must air carriers submit concerning ASMs or RTMs?
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§ 330.33 Must carriers certify the truth and accuracy of data they submit?
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§ 330.35 What records must carriers retain?
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§ 330.37 Are carriers which participate in this program subject to audit?
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§ 330.39 What are examples of types of losses that the Department does not allow?
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Subpart C—Set-Aside for Certain Carriers
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§ 330.41 What funds is the Department setting aside for eligible classes of air carriers?
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§ 330.43 What classes of air carriers are eligible under the set-aside?
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§ 330.45 What is the basis on which air carriers will be compensated under the set-aside?
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Appendix A to Part 330—Forms for All Carriers
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Appendix B to Part 330 [Reserved]
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Appendix C to Part 330—Forms for Air Taxi Operators
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