ated by Congress in the Act, the published policy shall not be applicable to such matter. § 399.5 Arrangement of policy state ments. The statements of general policy relating to the various duties and functions of the Board are grouped according to subject matter in the following subparts; the titles of the subparts indicate the general subject matter included therein. Subpart B-Policies Relating to § 399.10 Local service carrier certificates to indicate nature of operations specifically. It is the policy of the Board to include a provision in the certificates of all local service air carriers to make it clear that their operations are definitely local air transportation, as distinguished from the service rendered by scheduled trunkline air carriers. The language that will be included is substantially as follows: This certificate is issued pursuant to a determination of policy by the Civil Aeronautics Board that, in the discharge of its obligation to encourage and develop air transportation under the Federal Aviation Act of 1958, as amended, it is in the public interest to establish certain air carriers who will be primarily engaged in short-haul air transportation as distinguished from the service rendered by scheduled trunkline air carriers. In accepting the certificate, the holder acknowledges and agrees that the primary purpose of the certificate is to authorize and require it to offer short-haul air transportation services of the character described above. § 399.11 "Use it or lose it" policy for subsidized local service carriers. (a) Expansion of local carrier services. Consistent with the Board's basic policy of affording the advantages of air transportation to as many persons as practicable, the Board has substantially expanded the services of subsidized local carriers and has given many small cities, with marginal or unknown traffic potentialities, a chance to demonstrate that they will use and can support new or improved air services adapted to their specific needs. The Board expects the cities awarded local air service to make a determined effort to generate the traffic forecast in the certification proceedings. Unless adequate use is made of subsidized air services, the cost to the Government is not justified and the Board should terminate the authorization. (b) Minimum traffic standard for newly certificated cities. It is the policy of the Board to make an early and critical evaluation of the traffic results of new authorizations to determine whether newly certificated cities are making sufficient use of authorized services or should lose such services for lack of use. Under this "use it or lose it" policy, the Board will require each city to originate an average of five or more passengers per day during the 12-month period following the initial 6 months of operations. If a city is certificated on more than one segment, the five-passenger standard will be applied to each segment. If a city fails to meet this minimum traffic standard, the Board will, in the absence of unusual or compelling circumstances, institute a formal investigation to determine whether service should be suspended or terminated. A city generating the bare traffic minimum during this trial period cannot safely assume that continued service is assured; the Board expects most cities to exceed the minimum requirements. (c) Minimum traffic standard for newly certificated route segments. The Board will also evaluate the traffic results of each new route segment for the same 12-month period, following the initial six months of operations, to determine whether segments that do not adequately respond to air services should be suspended or deleted in whole or in part. If the passenger load per flight serving a segment averages less than five passengers, the Board will institute formal proceedings to delete the segment. If the passenger load per flight averages between five and seven passengers, the Board will institute proceedings to determine whether the segment should be suspended or deleted unless unusual circumstances, such as extreme isolation or national defense needs, dictate otherwise. (d) Continued use of local carrier services. In evaluating the continuing need for air service at any point or on any route segment served by a local service carrier, the Board will use the minimum traffic standard of five passengers as a guide line, regardless of the type or duration of an authorization. The Board will require the local service carriers to make appropriate periodic reports of traffic results. Air carrier management is expected to suggest route or authorization modifications as soon as deficiencies in service become apparent. When a city or route segment fails to make continued use of subsidized services, the carrier is free, and is encouraged, to apply for suspension of service in advance of a Board proceeding to terminate the certification. The failure of a local service carrier to exercise vigilance in this regard may, in fact, reflect upon the economy and efficiency of management in proceedings to determine subsidy needs under section 406 of the Act. § 399.12 Negotiation by air carriers for landing rights in foreign countries. (a) It is the policy of the Board (jointly with the Department of State) that, as a general rule, landing rights abroad for United States flag air carriers will be acquired through negotiation by the United States Government with foreign governments rather than by direct negotiation between an air carrier and a foreign government. (b) It is corollary to the foregoing policy that no United States air carrier may avail itself of representations by one foreign government to further its interest with another foreign government, especially with respect to landing rights, except insofar as such representations have been specifically authorized by the United States Government. § 399.13 Standard provisions in foreign air carrier permits. It is the policy of the Board that permits issued to foreign air carriers shall provide: (a) That the permit shall be subject to all applicable provisions of any treaty, convention, or agreement affecting international air transportation now in effect, or that may become effective during the period the permit remains in effect, to which the United States and the foreign government concerned are parties; (b) That, by accepting the permit, the holder waives any right it may possess Eo assert any defense of sovereign immunity from suit in any action or proceeding in any court or other tribunal in Che United States based on claims arisng out of its operations under the Dermit. § 399.14 Issuance of foreign air carrier permits for Canadian transborder operations in small aircraft. It is the policy of the Board, in accordance with a reciprocal understanding with the Air Transport Board of Canada published March 13, 1952, to facilitate so far as possible under existing law the issuance of foreign air carrier permits to Canadian operators of small aircraft for irregular transborder operations in common carriage. Authorizations granted under this procedure will be only for service of a casual, occasional, and infrequent nature and will be limited to five years' duration. Where requested, permission will customarily be granted, if statutory standards are met, to serve more than one point in the United States on the same flight, provided that no cabotage traffic is carried. § 399.15 Processing of applications of foreign air carriers, pursuant to Part 212 of this chapter, for Statements of Authorization to conduct off-route charter trips. (a) General. This policy prescribes the general standards which will be used by the Board in processing applications of foreign air carriers for Statements of Authorization to conduct off-route charter trips. Since a determination of the public interest requires consideration of all the standards set forth in the Act, this policy does not purport to cover every matter that may be taken into account by the Board in passing upon such applications. For similar reasons, the Board reserves the right to depart from the provisions of this policy when there is a showing of exceptional circumstances and the Board finds that strict adherence to the detailed standards of the policy in a particular situation would not be in the public interest. However, in the absence of such a showing, any practice by a foreign air carrier, travel agent, or chartering group in conflict with the standards of this policy will constitute sufficient basis for denying an application for a statement of authorization. With respect to those standards applicable to chartering organizations and to travel agents, the foreign air carrier should reasonably assure itself before conducting any charter that such standards have been observed by the chartering organization and any travel agent involved (e.g., require suitable written information and assurance in connection with its own agreements with the charterer and any travel agent). If any practice in conflict with the standards of this policy is discovered after the particular charter flight has been performed and the Board finds that the carrier knew or should have known of such practice, the Board may deny future applications by the same foreign air carrier. Further, in deciding whether an application is in the public interest under the standards set forth in Part 212, the Board will assume that any flight previously authorized was actually operated unless apprised otherwise. (b) Provisions relating to foreign air carriers, travel agents, and chartering organizations. In supplementation of the provisions of Part 212 of this chapter, all of which are here controlling, the following provisions of Part 295 of this chapter (the Economic Regulations) shall apply to off-route passenger charters by foreign air carriers: (1) To such extent as the context will permit, the following provisions of Part 295 of this chapter shall apply to foreign air carriers: §§ 295.2 (c) to (1) (definitions); 295.3 (waiver); 295.11 (solicitation and formation of a chartering group); 295.14(f) (one-way passenger and plane-load groups); 295.16 (prohibition against payments or gratuities); 295.50 (provisions for mixed charters); and 295 60 (advisory opinion). (2) To such extent as the context will permit, the following provisions of Part 295 of this chapter shall apply to travel agents: §§ 295.2 (c) to (1) (definitions); 295.20 (prohibition against double compensation); 295.21 (prohibition against payments or gratuities); and 295.50 (provisions for mixed charters). (3) To such extent as the context will permit, the following provisions of Part 295 of this chapter shall apply to chartering organizations: §§ 295.2 (c) to (1) (definitions); 295.30 (solicitation of charter participants); 295.31 (passengers on charter flights; 295.32 (participation of immediate families in charter flights); 295.33 (a) to (c) (charter costs); 295.34(a) (statements of charges); 295.50 (provisions for mixed charters); and 295.60 (advisory opinion). (Sec. 402, 72 Stat. 757, 49 U.S.C. 1372) [Policy Statement 21, 29 F.R. 1446, Jan. 25, 1964, as amended by Policy Statement 23, 29 F.R. 11415, Aug. 7, 1964] NOTE: Approval of an application for offroute charter authority in accordance with this policy statement shall not be construed as implying an exemption from any standard self-imposed by members of IATA under Charter Resolution 045, notwithstanding the Board's reserved right to waive any of the conditions imposed by it in approving IATA Charter Resolution 045. § 399.16 Military exemptions. (a) In passing upon applications for exemptions from sections 401 and 403 of the Act to enable air carriers to perform contracts for air transportation for the Department of Defense, the Board will give great weight to the following criteria: (1) Whether the carrier has contractually committed its CRAF aircraft to the Department of Defense; (2) Whether the proposed service is in furtherance of the mission of the Department of Defense; and (3) Whether the level of compensation provided in the contract is fair and reasonable. (b) The minimum charges set forth in Part 288 of this chapter will be considered as the minimum fair and reasonable charges for foreign and overseas charter services and for charter services between the 48 contiguous States on the one hand and Hawaii or Alaska on the other hand. (c) The minimum charges considered fair and reasonable for the performance of Logair and Quicktrans military charter services in the 48 contiguous States will be as follows on and after July 1, 1966: Aircraft type DC-7F, L-1049H. DC-6A, AW-650. 1 Plus $100 per landing. Rate per aircraft statute mile 11. 1765 (d) The minimum charges considered fair and reasonable for the transportation of Category X passengers carried pursuant to the option provisions of MAC contracts in the direction opposite to individually waybilled cargo (Category A) will be 2.00 cents per passengermile on and after April 1, 1966: Provided, That such passengers shall be carried only in planeloads. (e) The minimum charges considered fair and reasonable for the transportation of individually ticketed passengers 10.00 One to four pallets per flight-Pallets in excess of four per flight__ 16.95 Eastbound transpacific, all pallets---- 10.00 (3) The foregoing rates per passenger-mile and per ton-mile shall be applied to the shortest mileage between the commercial air-carrier points as set forth in the current IATA Mileage Manual to compute point-to-point passenger fares and cargo rates per pound. (4) For cargo services to/from military bases in the United States, the rates per pound computed in accordance with subparagraph (3) of this paragraph shall be increased in the following amounts: (5) For cargo services to/from military bases outside the United States, the rates per pound shall not be less than the rates to/from the nearest commercial point for which Category A rates are published, computed in accordance with subparagraphs (2) and (3) of this paragraph. (6) The cargo charges determined in accordance with subparagraphs (2) through (5) of this paragraph shall be applied on the basis of a standard weight per pallet of 4,500 pounds: Provided, That it is not required that cargo be tendered in pallets. [Policy Statement 26, 30 F.R. 3878, Mar. 25, 1965 as amended by PS-30, 31 F.R. 5422, Apr. 6, 1966] § 399.17 Public interest factors in granting special orders or amendments to interim operating authority for transatlantic passenger charter serv ice. (a) Ability to provide reliable service. It is the policy of the Board carefully to screen and evaluate the passenger service history of applicants for seasonal charter authority, by special order or amendment to interim operating certificate under Parts 207 and 295 of this chapter, in order to provide reasonable assurance of reliable service to passengers. When an applicant has failed in the past to complete several such flights or has subjected its passengers to a significant number of unreasonably prolonged flight delays, and such cancellations or delays are not attributable to circumstances beyond the control of the carrier, the Board will deny the application unless the applicant establishes that its ability to provide reliable service has, since that time, materially improved. Moreover, the Board will not grant applications for individual flight exemptions to any air carrier which either has not applied, or has applied and been found unqualified, for a special order or amendment to interim operating authority unless there are unusual and compelling circumstances which might justify such authorizations. (b) Insurance coverage. It is the policy of the Board to condition the grant of a special order or amendment to interim operating certificate, under Parts 207 and 295 of this chapter, upon compliance by the air carrier with the insurance requirements of Part 208 of this chapter, whether such carrier be a supplemental air carrier or a carrier holding a certificate of public convenience and necessity for the carriage of property only or property and mail only. (c) Substitute air transportation and incidental expenses on return portion of charter flight. It is the policy of the Board to condition the grant of a special order or amendment to interim operating certificate, under Parts 207 and 295 of this chapter, upon the express agreement of the applicant air carrier to assume a firm and legally binding obligation which, in the judgment of the Board, meets the following standards: (1) Substitute air transportation. (i) 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 finally to enplane each passenger and commence the take-off procedures at the airport of departure before the forty-eighth hour following the time scheduled for the departure of such flight, it shall provide substitute transportation in accordance with the provisions of this subparagraph. (ii) 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 forty-eight 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 air carrier or foreign air carrier. (iii) When neither the charter transportation contracted for nor substitute transportation has been performed before the expiration of forty-eight 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 costs of such air transportation to the substitute air carrier or foreign air carrier. (iv) In determining the period of time during which the departure of a charter flight has been delayed within the purview of this subparagraph, periods of delay caused by the prohibition of flights from the airport of departure because of weather or other operational conditions shall be excluded if, and while, the air carrier had an airworthy aircraft which is capable of transporting the charter group in a condition of operational readiness posted at such airport. (2) Incidental expenses. (i) 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 finally to enplane each passenger and commence the take-off procedures at the airport of departure before the sixth hour following the time scheduled for the departure of such flight, it shall pay incidental expenses in accordance with the provisions of this subparagraph. Such payments shall be made at the airport of departure, as soon as they become due, to the charterer or his duly authorized agent for the account of each passenger, including infants and children traveling at reduced fares. (ii) Such payments shall be made at the rate of $16.00 for each full twentyfour hour period of delay following the scheduled departure time. However, the sum of $8.00 shall be paid for each passenger delayed during all, or any portion, of the initial period of six hours following the scheduled departure time. Thereafter, during the succeeding 18 hours of delay, an additional sum of $8.00 shall be paid for each passenger delayed in installments of $4.00 for the first and second succeeding six-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 $4.00 for each further six-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 to provide free meals and lodging shall cease when substitute air transportation is provided in accordance with the provisions of subparagraph (1) of this paragraph. (d) Ability to discharge obligations concerning substitute air transportation and incidental expenses. It is the policy of the Board to condition the grant of a special order or amendment to interim operating certificate, under Parts 207 and 295 of this chapter, upon a showing satisfactory to the Board that the applicant air carrier can, and will, effectively and adequately discharge its obligations to provide substitute air transportation and pay incidental expenses in accordance with the provisions of paragraph (c) of this section. It is the further policy of the Board, when the applicant does not make such a satisfactory showing, to condition the grant of such special order or amendment to interim operating certificate upon the applicant's having entered into definite arrangements which the Board believes will effectively guarantee the performance of those obligations or having procured a surety bond which, in the judgment of the Board, meets the following standards: (1) Scope of obligation incurred by surety. Such surety bond shall impose upon the surety company a firm and legally binding obligation to pay promptly |