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information and assurance in connection with its own agreements with the charterer and any travel agent). 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:

Rate per aircraft

statute mile

(course-flown Aircraft type

miles) DC-7F, L-1049H.

$1.950 CL-44

2. 207 C-46 DC-6A, AW-650

11. 1765 1 Plus $100 per landing.

(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

. 830

(Categories A and Z) and individually waybilled cargo (Category A) in foreign and oversea air transportation and in air transportation between the 48 contiguous States on the one hand and Hawaii or Alaska on the other hand will be as follows on and after April 1, 1966: (1) Passengers, per passenger-mile:

Cents Second (economy) class.

3. 60 Third (thrift) class.

3. 29

(2) Cargo, per ton-mile: Eastbound transatlantic or westbound transpacific:

Cents One to four pallets per flight- 12.00 Pallets in excess of four per flight-- 16.95 Westbound transatlantic: One to four pallets per flight--- 10.00 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:

$ 399.17 Public interest factors in grant

ing 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 del 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

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(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]

an aircraft finally to enplane each pas of each passenger, including infants and senger and commence the take-off pro children traveling at reduced fares. cedures at the airport of departure be (ii) Such payments shall be made at fore the forty-eighth hour following the the rate of $16.00 for each full twentytime scheduled for the departure of such four hour period of delay following the flight, it shall provide substitute trans scheduled departure time. However, the portation in accordance with the pro şum of $8.00 shall be paid for each pasvisions of this subparagraph.

senger delayed during all, or any portion, (ii) As soon as the air carrier discov of the initial period of six hours followers, or should have discovered by the ex ing the scheduled departure time. ercise of reasonable prudence and fore Thereafter, during the succeeding 18 thought, that the departure of any such hours of delay, an additional sum of charter flight will be delayed more than $8.00 shall be paid for each passenger forty-eight hours, such air carrier shall delayed in installments of $4.00 for the arrange for and pay the costs of substi first and second succeeding six-hour tute air transportation for the charter period of delay, or any fractional part group on another charter flight, oper thereof. If the delay continues beyond ated by any other air carrier or foreign a period of 24 hours following the schedair carrier.

uled departure time, such payments shall (iii) When neither the charter trans be made in equal installments of $4.00 portation contracted for nor substitute for each further six-hour period of delay, transportation has been performed be or any fractional part thereof: Provided, fore the expiration of forty-eight hours however, That the air carrier may, at following the scheduled departure time its option, discharge this obligation by of any such charter flight, the charterer providing free meals and lodging in lieu or his duly authorized agent may ar of making such payments. The obligarange for substitute air transportation tion of the air carrier to pay incidental of the members of the charter group, at expenses or to provide free meals and economy or tourist class fares, on indi lodging shall cease when substitute air vidually ticketed flights and the char transportation is provided in accordance tered air carrier shall pay the costs of with the provisions of subparagraph such air transportation to the substi (1) of this paragraph. tute air carrier or foreign air carrier. (d) Ability to discharge obligations

(iv) In determining the period of time concerning substitute air transportation during which the departure of a charter and incidental expenses. It is the policy flight has been delayed within the pur of the Board to condition the grant of view of this subparagraph, periods of a special order or amendment to interim delay caused by the prohibition of flights operating certificate, under Parts 207 and from the airport of departure because of 295 of this chapter, upon a showing weather or other operational conditions satisfactory to the Board that the apshall be excluded if, and while, the air plicant air carrier can, and will, effeccarrier had an airworthy aircraft which tively and adequately discharge its obis capable of transporting the charter ligations to provide substitute air transgroup in a condition of operational readi portation and pay incidental expenses ness posted at such airport.

in accordance with the provisions of (2) Incidental expenses. (i) On all paragraph (c) of this section. It is the charter flights bound from a point out further policy of the Board, when the side the continent where the charter applicant does not make such a satisoriginated to the point where it termi factory showing, to condition the grant nates, unless the air carrier causes an of such special order or amendment to aircraft finally to enplane each passen

interim operating certificate upon the ger and commence the take-off proce

applicant's having entered into definite dures at the airport of departure before

arrangements which the Board believes the sixth hour following the time sched

will effectively guarantee the perform

ance of those obligations or having prouled for the departure of such flight, it

cured a surety bond which, in the judgshall pay incidental expenses in accord

ment of the Board, meets the following ance with the provisions of this subpara

standards: graph. Such payments shall be made

(1) Scope of obligation incurred by at the airport of departure, as soon as surety. Such surety bond shall impose they become due, to the charterer or upon the surety company a firm and his duly authorized agent for the account legally binding obligation to pay promptly

to the charterer, or his duly authorized agent, in the United States, any and all sums of money which may be due and owing to the charterer by the chartered air carrier under the terms and conditions of the charter contract if, and when, the latter shall default thereon by refusing to honor promptly a request for such payments.

(2) Terms and conditions of coverage. The obligations of the surety company pursuant to such a surety bond shall not be subject to cancellation or suspension, by either party, on less than 30 days' notice by registered mail to both the other party to the surety contract and the Board.

(3) Source of coverage. Such surety bond shall be issued by a reputable and financially responsible surety company which is legally authorized to issue bonds. of that type in any state, territory, or possession of the United States.

(e) Conditions on special orders and amendments to interim operating certificates. It is the policy of the Board to incorporate the following express conditions in each special order or amendment to interim operating certificate issued under Parts 207 and 295 of this chapter:

(1) The air carrier agrees to provide substitute transportation and pay incidental expenses;

(2) Each contract for a transatlantic charter operated pursuant to seasonal authorization shall incorporate the provisions of this policy statement defining the scope of the air carrier's obligation to provide substitute transportation and pay incidental expenses; and

(3) The tariffs of the air carrier on file with the Board shall not, insofar as they pertain to transatlantic charter trips operated thereunder, contain any provision which is inconsistent with the standard of insurance coverage specified in paragraph (b) of this section; or with the obligations assumed in accordance with paragraph (c) of this section; or with the obligation, surety bond, or other arrangement assumed, procured or entered into in accordance with paragraph (d) of this section.

(f) Limitation on special orders and amendments to interim operating certificates. It is the policy of the Board to limit the effectiveness of special orders and amendments to interim operating certificates under Parts 207 and 295 of this chapter so that each such order or amendment shall be effective only with

respect to transatlantic charter flights as to which:

(1) There is in full force and effect, to the extent specified in paragraphs (b), (c) and (d) of this section and in any special order or Board order granting an amendment to interim operating certificate, insurance coverage, a surety bond or equivalent arrangement and an obligation to provide substitute air transportation and cover the costs of incidental expenses; and

(2) The air carrier has fully complied with each and every condition specified in paragraph (e) of this section and any pertinent provisions of a special order or amendment to interim operating certificate. $ 399.18 Maximum duration of fixed

term route authorization granted by exemption; renewal of such author.

ity. It is the policy of the Board to limit the duration of exemptions which authorize fixed-term route service to a maximum period of two years, and to entertain requests for renewal of such authority only when incorporated in a duly filed application for substantially equivalent certificate authority under section 401 of the Act. (See § 302.909 of this chapter (Procedural Regulations) and § 377.10 (c) of this chapter (Special Regulations).) $ 399.19 Wet leases to foreign air car

riers. (a) This policy statment sets forth the major factors which the Board will consider in acting upon applications for authorization of long-term ?“wet-leases” (i.e., leases in which the lessor provides both the aircraft and the crew) by a United States air carrier to the holder of a foreign air carrier permit. The wet lease need not involve the exclusive use of an aircraft by the foreign air carrierlessee for the entire period of the lease, but may involve use on an intermittent basis such as on certain days of the week.

(b) A wet lease of the type described in paragraph (a) of this section will be deemed to be in the public interest only if it meets the following criteria:

? The expression “long-term wet lease" refers to a wet lease which is to be performed over a period of more than sixty days or to a wet lease which is one of a series of wet leases amounting to a continuing arrangement to be performed over a period of more than sixty days.

(1) The operations under the wet lease must not have a significant adverse competitive impact on any United States carrier. In making this determination, the Board will consider such factors as: The relative size and financial strength of the United States carriers and the foreign carriers operating on the route; whether the proposed operation will require any United States carrier to reduce its level of frequency on the route; and whether the proposed operation will render uneconomic any United States carrier's operations over the route.

(2) The United States air carrierlessor must have an urgent need for additional utilization of its equipment, or have a compelling need to supplement operating revenue. In making this determination the Board will consider such factors as the size and financial strength of the lessor carrier relative to other United States carriers, and the need for strengthening of such carrier in terms of sustaining and promoting a healthy competitive system.

(3) The wet lease must not involve revenue or profit sharing by the United States air carrier-lessor.

(4) The wet lease arrangement must not impair the United States air carrierlessor's ability to fulfill its certificate obligations.

(5) The United States air carrierlessor must not be placing undue reliance on wet leasing as a source of revenue. In this regard the Board will consider the extent to which an applicant has acquired equipment which can be adequately utilized only if it can be wetleased. If the applicant is a supplemental carrier, the Board will also consider the extent to which the wet lease will interfere with the applicant's ability to promote and perform civil charters. If the applicant is a combination or allcargo carrier, the Board will consider the extent to which the wet lease will interfere with the applicant's ability to promote and perform on-route operations.

(c) Approval by the Board of a wet lease of the type described in paragraph (a) of this section will be subject to the following conditions:

(1) Where the foreign air carrierlessee is an established international air service and possesses substantial equipment of its own, wet leasing arrangements with a single United States carrier may be approved for an initial period of one year. Approvals may be granted for

additional periods extending up to a maximum of two years from the beginning of the wet lease arrangement. No wet lease will be approved unless the conditions set forth in paragraph (b) (1) through (5) of this section are met.

(2) Where the foreign air carrierlessee is at an early stage of development and intends to place sole or primary reliance upon wet lease arrangements to support its international operations, wet leasing arrangements with United States carriers may be approved for a maximum period of two years. No wet lease will be approved unless the conditions set forth in paragraph (b) (1) through (5) of this section are met and unless the foreign carrier demonstrates that it will be in a position to establish an independent viable operation by the end of two years from the date it began wet leasing from United States carriers. During the period of approval there may also be periodic Board review to insure that the conditions set forth in paragraph (b) (1) through (5) of this section continue to be met.

(3) Where the sole purpose of the wet lease is to enable the foreign air carrierlessee to replace equipment rendered non-operable by an emergency beyond its control (e.g., by an accident), such a wet lease may be approved for a period not to exceed six months, it being presumed that during this period there will be no significant adverse competitive impact on any United States carrier. Such a wet lease may be approved whether the lessee is a well-established international carrier or at an early stage of development: Provided, The conditions set forth in paragraph (b) (2) through (5) of this section are met. (Secs. 412 and 416 of the Federal Aviation Act of 1958, 72 Stat. 770, 771; 49 U.S.C. 1382, 1386; sec. 3 of the Administrative Procedure Act, 60 Stat. 238; 5 U.S.C. 1002) [Policy Statement 27, 30 F.R. 5626, Apr. 21, 1965) Subpart C-Policies Relating to Rates

and Tariffs § 399.30 Temporary subsidy rates.

It is the policy of the Board to fix temporary subsidy rates, wlien such emergency action is required, at a level designed to provide only such amounts as are deemed necessary for continuation of operations prior to the establishment of a final rate. In most cases, this objective may be attained by providing an amount of subsidy equivalent to the sub

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