it relates to any of the following subjects:

(a) The furnishing of persons or property for transportation;

(b) The arranging for flights for the accommodation of persons or property;

(c) The solicitation or generation of passenger or cargo traffic to be transported;

(d) The charter or lease of aircraft.

§ 208.31b Written contracts with char

terers.

(a) Every agreement to perform a charter trip, except charters for the Department of Defense, shall be in writing and signed by an authorized representative of the supplemental air carrier and the charterer prior to operation of a charter flight: Provided, That where execution of a contract prior to commencement of flight is impracticable because the charter has been arranged on short notice, compliance with the provision hereof shall be effected within seven (7) days after commencement of the flight. The written agreement shall include without limitation:

(1) Date and place of execution of the contract or agreement;

(2) Signature, printed or typed name of each signatory, and official position of each;

(3) Dates of flights and points involved;

(4) Type and capacity of aircraft: Number of passenger seats available or pounds of cargo capacity; and

(5) Rates, fares, and charges applicable to the charter trip, including the charter price, live and ferry mileage charges, and layover and other nonflight charges.

(b) No term or condition of the charter contract shall, on its face, be inconsistent with any provision of the carrier's published tariff.

§ 208.32 Tariffs and terms of service.

(a) No air carrier shall perform any supplemental air transportation unless such air carrier shall have on file with the Board, pursuant to Part 221 of this chapter, a currently effective tariff showing all rates, fares, and charges for the use of the entire capacity or less than the entire capacity (as defined in § 208.3(s)) of one or more aircraft in such supplemental air transportation and showing all rules, regulations, practices, and serv

ices in connection with such supplemental air transportation, including eligibility requirements for charter groups not inconsistent with those established in this part.

(b) The total charter price and other terms of service rendered pursuant to this part shall conform to those set forth in the applicable tariff on file with the Board and in force at the time of the respective charter flight and the contract must be for the entire capacity or for less than the entire capacity (as defined in § 208.3 (s)) of one or more aircraft. Where a carrier's charter charge computed according to a mileage tariff includes a charge for ferry mileage, the carrier shall refund to the charterer any sum charged for ferry mileage which is not in fact flown in the performance of the charter: Provided, That the carrier shall not charge the charterer for ferry mileage flown in addition to that stated in the contract unless such mileage is flown for the convenience of and at the express direction of the charterer.

(c) Every charter tariff shall contain the following provision: Payments for a charter flight made to any person to whom the carrier, directly or indirectly, has paid a commission or has agreed to pay a commission with respect to such flight, shall be considered payment to the carrier: Provided, however, That this requirement shall not be applicable to foreign-originated charters.

(d) Each and every contract for a charter to be operated hereunder shall incorporate the provisions of §§ 208.10 through 208.15, inclusive, and 208.32a, 208.33, and 208.33a, where applicable, concerning insurance and substitute transportation.

(e) The carrier shall require full payment of the total charter price or the posting of a satisfactory bond for full payment prior to the commencement of the air transportation.

(f) In the case of a round-trip passenger charter, one-way passengers shall not be carried except that up to 5 percent of the charter group may be transported one way in each direction. This provision shall not be construed as permitting knowing participation in any plan whereby each leg of a round trip is chartered separately in order to avoid the 5 percent limitation aforesaid. In the case of a charter contract calling for

two or more round trips, there shall be no intermingling of passengers and each planeload group or less than planeload group as defined in § 208.3 (s) (2) (ii), shall move as a unit in both directions. [ER-566, 34 F.R. 6081, Apr. 4, 1969, as amended by ER-638, 35 F.R. 13573, Aug. 26, 1970; ER-649, 35 F.R. 15985, Oct. 10, 1970] § 208.32a Flight delays and substitute air transportation (foreign).

Supplemental air carriers shall assume, and publish as part of the rules and regulations of their tariffs applicable to passenger service in foreign air transportation, the following obligations without prejudice, and in addition, to any other rights or remedies of passengers under applicable law:

(a) Substitute air transportation. (1) On all charter flights, unless the air carrier causes an aircraft to finally enplane each passenger and commence the takeoff procedures at the airport of departure before the 48th hour following the time scheduled for the departure of such flight, it shall provide substitute transportation in accordance with the provisions of this paragraph.

(2) As soon as the air carrier discovers, or should have discovered by the exercise of reasonable prudence and forethought, that the departure of any such charter flight will be delayed more than 48 hours, such air carrier shall arrange for and pay the costs of substitute air transportation for the charter group on another charter flight, operated by any other carrier or foreign air carrier.

(3) When neither the charter transportation contracted for nor substitute transportation has been performed before the expiration of 48 hours following the scheduled departure time of any such charter flight, the charterer, or his duly authorized agent, may arrange for substitute air transportation of the members of the charter group, at economy or tourist class fares, on individually ticketed flights and the chartered air carrier shall pay the cost of such air transportation to the substitute air carrier or foreign air carrier.

(4) In determining the period of time during which the departure of a charter flight has been delayed within the purview of this paragraph, periods of delay caused by the prohibition of flights to or from the airport of departure because of weather or other operational conditions affecting such airport shall be ex

cluded if, and while, the air carrier has available an airworthy aircraft which is capable of transporting the charter group in a condition of operational readiness.

(b) Incidental expenses." (1) On all charter flights bound from a point outside the continent where the charter originated to the point where it terminates, unless the air carrier causes an aircraft to finally enplane each passenger and commence the takeoff procedures at the airport of departure before the 6th hour following the time scheduled for the departure of such flight, it shall pay incidental expenses in accordance with the provisions of this paragraph. Such payments shall be made at the airport of departure as soon as they become due to the charterer, or its duly authorized agent, for the account of each passenger, including infants and children traveling at reduced fares.

(2) Such payments shall be made at the rate of $16 for each full 24-hour period of delay following the scheduled departure time. However, the sum of $8 shall be paid for each passenger delayed 6 hours following the scheduled departure time. Thereafter, during the succeeding 18 hours of delay, an additional sum of $8 shall be paid for each passenger delayed in installments of $4 for the first and second succeeding 6-hour period of delay, or any fractional part thereof. If the delay continues beyond a period of 24 hours following the scheduled departure time, such payments shall be made in equal installments of $4 for each further 6-hour period of delay, or any fractional part thereof: Provided, however, That the air carrier may, at its option, discharge this obligation by providing free meals and lodging in lieu of making such payments. The obligation of the air carrier to pay incidental expenses or provide free meals and lodging shall cease when substitute air transportation is provided in accordance with the provisions of paragraph (a) of this section.

Although the requirements with respect to providing incidental expenses are made expressly applicable only to the return leg of a charter flight, the air carriers are expected, in the case of delay in departure of the originating leg of a flight, to furnish such incidental expenses to charter passengers whose homes are not located within a reasonable distance from the point of origination of the charter.

§ 208.33 Flight delays and substitute air transportation (interstate and overseas).

Supplemental air carriers shall assume, and publish as part of the rules and regulations of their tariffs applicable to passenger service in interstate and overseas air transportation, the following obligations without prejudice, and in addition, to any other rights or remedies of passengers under applicable law:

(a) In case of flight delays of more than 6 hours beyond the departure time stated in the charter contract or 4 hours beyond the time of departure stated on an individual flight ticket, the carrier, upon request and at the passenger's or charterer's option (or in case of the engagement by one charterer of less than the capacity of an aircraft, at the option of any one charterer), must provide alternative air transportation at no additional cost to the passenger or charterer, or immediately refund the full value of the unused ticket or the unperformed charter contract.

(b) In case of additional flight delays en route exceeding 6 hours for charter flights or 2 hours for individually ticketed flights, the carrier must, upon request and at the passenger's or charterer's option (or in case of the engagement by one charterer of less than the capacity of an aircraft, at the option of any one charterer), furnish alternative transportation to the specified destination, or immediately refund the full value of unperformed transportation. The en route delays shall be calculated without inclusion of any delay at departure but all additional delays at intermediate stops en route shall be added up in determining whether the limit of delay has been reached.

(c) In case of flight cancellations or flight delays, refunds shall be paid immediately upon presentation of an unused flight coupon or upon demand of the charterer or his representative (or in case of the engagement by one charterer of less than the capacity of an aircraft, upon demand of any one charterer or his representative) to the air carrier or its

agent.

(d) The rules and regulations in the carrier's tariffs governing immediate refunds or alternative transportation may provide for an exception in case of unavoidable delays due solely to weather.

(a) Neither a carrier nor a travel agent shall make any payments or extend gratuities of any kind, directly or indirectly, to any member of a chartering organization in relation either to air transportation or land tours or otherwise.

(b) Neither a carrier nor a travel agent shall make any donation to a chartering organization or an individual charter participant.

(c) Nothing in this section shall preclude a carrier from paying a commission (within the limits of §§ 208.202 and 208.302) to a member of a chartering organization if such member is its agent, or restrict a carrier or a travel agent from offering to each member of the charter group such advertising and good will items as are customarily extended to individually ticketed passengers (e.g., canvas traveling bag or a money exchange computer).

PROTECTION OF CUSTOMERS' DEPOSITS § 208.40 Escrow of cash or trust for protection of customers' deposits.

(a) Except as provided in § 208.41, no supplemental air carrier shall engage in air transportation unless it maintains, in accordance with the following standard, an escrow of cash or a trust as security for customers' deposits with the carrier for prepayment of air transportation.

(b) Whenever the gross amount of customers' deposits exceeds 25 percent of the carrier's net worth, as defined herein, computed as of the last day of each month, the carrier shall, on or before the 30th day of the succeeding month, place in escrow or in trust with a bank, cash in an amount at least equal to the amount by which such deposits

exceed 25 percent of its net worth: Provided, That negotiable securities may be substituted for cash, but the market value thereof shall at all times be not less than the amount of cash for which they are substituted.

(c) The escrow agreement or the trust agreement between a bank and the air carrier shall not be effective until approved by the Board. Claims against the escrow or trust may be made only with respect to the nonperformance of air transportation. As used in this section, the term "bank" includes a bank, savings and loan association, or other financial institution insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.

[ER-649, 35 F.R. 15985, Oct. 10, 1970] § 208.41

Performance bond in lieu of escrow of cash or trust.

The carrier may elect, in lieu of placing cash in escrow or creating a trust pursuant to § 208.40, to file with the Board's Bureau of Operating Rights, in a form satisfactory to the Bureau, a performance bond which guarantees to the United States Government the performance of air transportation pursuant to contracts entered into by such carrier, but to be performed, in whole or in part, after the date of execution of the bond. The amount of such bond shall be not less than the amount of cash that would be required to be placed in escrow or in trust by the carrier pursuant to § 208.40. Claims under the bond may be made only with respect to the nonperformance of air transportation. [ER-649, 35 F.R. 15985, Oct. 10, 1970]

§ 208.42 No priority in payment of claims.

If an air carrier is required to maintain cash in escrow or in trust for the protection of customers' deposits pursuant to § 208.40, there shall be no priority in the payment of claims against such funds held in escrow or in trust or against the bonding company in the event that a performance bond is filed by the carrier in lieu of placing cash in escrow or in trust, but such claims shall be processed and paid on a pro rata basis.

[ER-649, 35 F.R. 15985, Oct. 10, 1970]

Subpart B-Provisions Relating to Military Charters

§ 208.100 Applicability of subpart. This subpart sets forth the special rules applicable to military charters. § 208.101 Minimum rates and compensation for air transportation performed for the military establish

ment.

The authority conferred upon a supplemental air carrier pursuant to section 7 of Public Law 87-528, and/or a certificate of public convenience and necessity issued under section 401 (d) (3) of the Act, insofar as it encompasses the right to provide air transportation pursuant to contract with the military establishment of the United States or any branch thereof in foreign and overseas air transportation, and air transportation between the 48 contiguous States on the one hand and the States of Alaska and Hawaii on the other hand, shall be subject to the condition that the rate or compensation received by the carrier for any such air transportation is not less than that set forth in § 288.7 of this chapter, irrespective of whether such contract falls within the definition of short notice MATS charter service contained in § 288.1 of this chapter.

§ 208.102 Substitute service.

Supplemental air carriers are authorized to provide "substitute service" as defined in this part, subject to the provisions of Part 288 of this chapter.

§ 208.103 Tariffs and terms of service.

The provisions of § 208.32 shall apply to charters under this subpart except that paragraphs (c), (e), and (f) and the second sentence of paragraph (b) of such section shall not be applicable. [ER-615, 35 F.R. 7297, May 9, 1970]

Subpart B1-Provisions Relating to Military Backhaul Charters

§ 208.150 Military backhaul exemption. Subject to the provisions of this part, Part 295 of this chapter, and all other applicable rules, regulations, conditions, or requirements, supplemental air carriers are hereby exempted from the provisions of section 401 of the Federal Aviation Act of 1958, as amended, to the

extent necessary to permit them to engage in overseas or foreign "supplemental air transportation" and "transatlantic supplemental air transportation" on the reverse leg of a charter performed in the opposite direction under a contract with the Department of Defense calling for one-way service.

Subpart C-Provisions Relating to Pro Rata Charters

§ 208.200 Applicability of subpart.

This subpart sets forth the special rules applicable to pro rata charters, other than those subject to Part 295 of this subchapter. REQUIREMENTS RELATING TO AIR CARRIERS § 208.200a Solicitation and formation

of a chartering group.

(a) A carrier shall not engage, directly or indirectly, in any solicitation of individuals (through personal contact, advertising, or otherwise) as distinguished from the solicitation of an organization for a charter trip, except after a charter contract has been signed.

(b) A carrier shall not employ, directly or indirectly, any person for the purpose of organizing and assembling members of any organization, club, or other entity into a group to make the charter flight, except after a charter contract has been signed.

As the following terms are defined in § 208.3, members of the charter group may be solicited only from among the bona fide members of an organization, club, or other entity, and their immediate families, and may not be brought together by means of a solicitation of the general public. Solicitation of, as well as participation by, members of an organization with respect to charter flights shall extend only to the organization, or the particular chapter or unit thereof, which signs the charter agreement with the air carrier as the charterer.

§ 208.211 Passengers on charter flights.

Only bona fide members of the charterer, and their immediate families (except as provided in § 208.212), may participate as passengers on a charter flight. The charterer must maintain a central membership list, available for inspection by the carrier or Board representative, which shows the date each person became a member.' Solicitation of, as well as participation by, members of an organization with respect to charter flights shall extend only to the organization, or the particular chapter or unit thereof, which signs the charter agreement with the air carrier as the charterer. Where

"Where the charter is based on employment in one entity or student status at a college, records of the corporation, agency, or college will suffice to meet the requirement.