SUPPLEMENTARY INFORMATION:

Background and Statutory Authority

Since 2002, DOT regulations at 14 CFR 234.4 have required reporting carriers to submit monthly data identifying the causes of flight cancellations and delays of 15 minutes or greater. Under the existing framework, delays are attributable to one of 5 categories: (1) Air Carrier, (2) Extreme Weather, (3) National Aviation System, (4) Security, and (5) Late Arriving Aircraft.^[1] Carriers use the same categories to report cancellations under the regulation, except that there is no category for Late Arriving Aircraft.^[2] The Air Carrier category has historically included any delay or cancellation due to circumstances within the control of the carrier such as maintenance, crew scheduling, or aircraft cleaning.

These causal categories are further detailed in Bureau of Transportation Statistics (BTS) Technical Directive #40, “On-time Performance” (Technical Directive).^[3] The technical directive provides a non-exclusive list of events that carriers should report in the Air Carrier category like: aircraft cleaning; aircraft damage (except bird strikes, lightning/hail damage); airport curfew; awaiting the arrival of connecting passengers or crew; awaiting alcohol test; awaiting gate space; baggage loading; cabin servicing; cargo loading; catering; computer outage—carrier equipment; crew legality (pilot or attendant rest); damage by hazardous goods; engineering inspection; public health, etc.; flight paperwork; fueling; gate congestion; government forms not properly completed—INS, FAA, Agriculture; ground equipment out of service; hot brakes restriction; last minute passenger; late mail from Post Office; late crew; lavatory servicing; maintenance; medical emergency; out of service aircraft; oversales; positive passenger baggage match; passenger services; potable water servicing; pre-flight check; ramp congestion—blocked by another aircraft under carrier's control; ramp service; removal of unruly passenger; revised weight sheet; shortage of ramp equipment; slow boarding or seating; snow removal (when it is a carrier ramp service function); stowing carry-on baggage; and weight and balance delays.^[4] The Technical Directive provides similar lists of events for the other causal categories, except for Late Arriving Aircraft, which does not have a list of events.

On May 16, 2024, the FAA Reauthorization Act of 2024 (2024 FAA Act) became law.^[5] Section 511(b) of that act provides that 10 delineated events “shall not be included within the Air Carrier code.”

Provisions of the Final Rule

To implement this statutory requirement, the Department is adding a new reporting category to 14 CFR 234.4. This category, to be known as Section 511(b) category, will be used exclusively for the ten events identified in section 511(b) of the 2024 FAA Act. At the same time, the Department is revising the definition of the Air Carrier category to prohibit the inclusion of these ten events explicitly. They are:

(1) aircraft cleaning necessitated by the death of a passenger,

(2) aircraft damage caused by extreme weather, foreign object debris, or sabotage,

(3) a baggage or cargo loading delay caused by an outage of a bag system not controlled by a carrier or its contractor,

(4) cybersecurity attacks (provided that the air carrier is in compliance with applicable cybersecurity regulations),

(5) a shutdown or system failure of government systems that directly affects the ability of an air carrier to conduct flights safely and is unexpected,

(6) overheated brakes due to a safety incident resulting in the use of emergency procedures,

(7) unscheduled maintenance, including in response to an airworthiness directive, manifesting outside a scheduled maintenance program that cannot be deferred or must be addressed before flight,

(8) an emergency that required medical attention through no fault of the carrier,

(9) the removal of an unruly passenger, and

(10) an airport closure due to the presence of volcanic ash, wind, or wind shear.

By creating a separate category rather than reassigning these events to existing codes like NAS or Extreme Weather, the Department ensures that the reporting structure remains consistent with the nondiscretionary language of the 2024 FAA Act.

Good Cause for the Final Rule

The Administrative Procedure Act provides an exception to its notice-and-comment rulemaking procedures when an agency for good cause finds that such procedures are impracticable, unnecessary, or contrary to the public interest.^[6] The agency must incorporate the good cause finding and a brief statement of its reasoning in the rule issued.^[7] This final rule implements the statutory requirement that delays and cancellations caused by a list of specific events are excluded from the Air Carrier category in 14 CFR 234.4. Because these exclusions are not discretionary, and the final regulation uses the statutory language for these exclusions without further interpretation, the Department determines that notice and public comment on the rule is unnecessary.

Future Rulemaking

In addition to those required exclusions from the air carrier category provided in section 511(b) of the 2024 FAA Act, section 511(a) of the act also requires the Director of BTS to initiate a rulemaking to revise 14 CFR 234.4 “to create a new `cause of delay' category (or categories) that identifies and tracks information on delays and cancellations of air carriers . . . that are due to instructions from the FAA Air Traffic Control System. In addition, Airlines for America (A4A) filed a petition for rulemaking with the Department requesting the Department expedite this rulemaking and make additional regulatory revisions beyond those required by section 511(b).

Implementing section 511(a) and assessing the requests in A4A's petition require the exercise of discretion by the Department. Therefore, those topics require notice and comment procedures under the Administrative Procedure Act. As a result, BTS plans to address these issues through future rulemaking, rather than in this final rule.

I. Regulatory Notices

A. Executive Order 12866 (Regulatory Planning and Review) and the Department's Regulatory Procedures

The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under ( printed page 56590) section 3(f) of Executive Order (E.O.) 12866. Accordingly, OMB has not reviewed it. In addition, this rule is not significant under the Department's Regulatory Policies and Procedures (49 CFR part 5 and DOT Order 2100.6B). This rule implements the statutory requirement that delays and cancellations caused by 10 delineated events are excluded from the Air Carrier category in 14 CFR 234.4 and does not involve the exercise of discretion by the Department. The economic impact of this rulemaking is discussed in this section.

This economic analysis describes the expected benefits, costs, and other potential economic impacts of this final rule. The baseline for this analysis is the current regulation at 14 CFR 234.4. This final rule creates a new reporting category in 14 CFR 234.4 for carriers to report the 10 delineated causes of delay and cancellation that section 511(b) of the 2024 FAA Act excludes from the Air Carrier category in 14 CFR 234.4. This final rule does not change the applicability and scope of the existing reporting requirements in 14 CFR 234 regarding the air carriers that are required to report data or the flights for which data is submitted by the reporting air carriers.

Benefits

This rule benefits the public by ensuring the information airlines report to the Department, and that the Department in turn provides to the public, is accurate because the information is consistent with Federal law and the legislative determination of what circumstances are not within airline control. Consumers of air transportation will be better informed with more appropriate data regarding the causes of delays and cancellations consistent with Federal law, and, therefore, will be able to make improved comparisons when selecting among air carriers. These improvements to information cannot be reliably quantified.

Costs

The Department has determined this final rule will result in an overall total cost savings. In conducting this economic analysis, DOT considered airline compliance with the changes within this final rule as a cost. In analyzing the cost of airline compliance, DOT considered two cost scenarios. The first considers that airlines already track cause of delay and cancellation in detail, and, therefore, airline compliance costs because of this final rule will be de minimis. With this final rule, airlines would not be submitting any new reports to the Department, but rather reporting a limited subset of causes of cancellation and delay in a different category than those same delays and cancellations are currently reported. Airlines use internal codes to classify delay and cancellation causes. Although the DOT will only use six categories of cause of delay and five categories of causes of cancellation, airline's internal systems generally utilize many more codes that provide more specificity than the categories used to report to DOT.^[8] In addition, it is the Department's understanding that each of the airlines covered by this rule have in-house data and information technology resources, and the commercial sensitivity of airline data in general favors in-house work. Therefore, any one-time upfront incremental modifications associated with adding the new 511(b) delay and cancellation category to airline data systems for purposes of reporting to DOT could be performed as part of the usual ongoing business practices of the air carriers in maintaining and improving their data systems. As a result, incremental cost to air carriers to comply with the changes of this final rule would be de minimis.

In an effort to complete a thorough analysis of this final rule, the Department also analyzed airline compliance costs based on a scenario in which this final rule would impose modest one-time upfront incremental costs on reporting air carriers should airlines perform material modifications to data processing systems to incorporate the new causal category for delays and cancellations. The ongoing recurring labor costs and other costs (equipment, etc.) associated with the existing reporting requirements under 14 CFR 234.4 are unchanged under this final rule. The reporting air carriers will still perform the same activities such as assigning delays and cancellations to the various categories and submitting data to BTS, only now with some delays and cancellations assigned to the new causal category rather than the Air Carrier category.

For calendar year 2026, 13 carriers report data to the Department under 14 CFR 234.^[9] This final rule does not change the applicability and scope of the existing reporting requirements in 14 CFR 234 regarding the air carriers that are required to report data, and therefore the number of air carriers that will need to perform modifications to their data processing systems under this scenario to incorporate the new causal category for delays and cancellations will be limited to these 13 carriers. For each of these air carriers, under this scenario, the Department estimates that modifying the applicable data processing systems to incorporate the new causal category for delays and cancellations will require a total of 100 labor hours to complete, test, and implement fully. The costs associated with these labor hours are comprised of both the base wage rate plus fringe benefits, which taken in combination better represents the economic costs to the air carriers than the base wage rate alone. Fringe benefits include paid leave, bonuses and overtime pay, health and other types of insurance, retirement plans, and legally required benefits (Social Security, Medicare, unemployment insurance, and workers compensation insurance).

To quantify and monetize the total labor costs to each air carrier, wage rate and benefits data from the U.S. Department of Labor, Bureau of Labor Statistics (BLS) are utilized. Wage rates are derived from the Occupational Employment and Wage Statistics (OEWS) data series published by BLS. The estimated 100 labor hours are allocated among two applicable occupational categories represented in the OEWS data, SOC 15-1251 (Computer Programmers) and SOC 15-1211 (Computer Systems Analysts), with 75 percent of the total hours (75 hours) allocated to the 15-1251 Computer Programmers occupational category, and the remaining 25 percent of the total hours (25 hours) allocated to the 15-1211 Computer Systems Analysts occupational category. The most recent OEWS data available, for May 2024, report that the 75th percentile hourly wage rate for the 15-1251 Computer Programmers occupational category is $62.00, and for the 15-1211 Computer Systems Analysts occupational category is $63.64.^[10] The 75th percentile hourly ( printed page 56591) wage rate is used for this analysis because it is expected that relatively more experienced and senior staff in these labor categories will be assigned to perform the necessary data system modifications, and that these more experienced staff will have an hourly wage rate greater than the median hourly wage rate.

BLS does not publish data on fringe benefits for specific occupations, but it does for broader industry and occupational groups in its Employer Costs for Employee Compensation (ECEC) release.^[11] For this analysis, an average hourly wage of $42.95 and average hourly benefits of $16.64 for private industry workers in “professional and related occupations” in the “trade, transportation, and utilities industry” is used to estimate that fringe benefits are equal to 39 percent of wages ($16.64 ÷ $42.95).

Based on these base wage rates and fringe benefits estimates, the combined hourly cost for the 15-1251 Computer Programmers occupational category is $86.02 per hour, and for the 15-1211 Computer Systems Analysts occupational category is $88.29. Applied to the labor hour estimates per carrier of 75 hours for the 15-1251 Computer Programmers occupational category and 25 hours for the 15-1211 Computer Systems Analysts occupational category, the resulting cost per carrier is $6,452 for the 15-1251 Computer Programmers occupational category and $2,207 for the 15-1211 Computer Systems Analysts occupational category, for a total of $8,659 per carrier. The resulting one-time upfront incremental cost for all 13 reporting air carriers combined under this scenario is therefore estimated to be $112,567.

Under both scenarios of de minimis and quantified airline costs, BTS will incur modest one-time upfront incremental costs to perform modifications to its data collection and data processing systems to incorporate the new causal category for delays and cancellations. For BTS, it is estimated that modifying the applicable data collection and processing systems to incorporate the new causal category for delays and cancellations will require a total of 240 labor hours to complete, test, and implement fully. An estimated fully loaded hourly labor rate of $200 per hour is used for the hourly labor rate applicable to BTS. This hourly rate is based on recent average labor rates for applicable occupational categories such as senior data analysts and senior data warehouse specialists available under contract to BTS. The resulting one-time upfront incremental cost to BTS is estimated to be $48,000.

Under both scenarios, this final rule is also expected to result in a similar relatively modest one-time upfront incremental cost that will be incurred by the Federal Aviation Administration (FAA). FAA uses the on-time performance data collected by BTS under 14 CFR 234.4 to analyze air traffic delays. FAA will need to perform modifications to its data processing systems to incorporate the new causal category for delays and cancellations, such that FAA can continue to receive the BTS on-time performance data effectively for its use in analyzing air traffic delays. For FAA, it is estimated that modifying the applicable data processing systems to incorporate the new causal category for delays and cancellations will require a total of 80 labor hours to complete, test, and implement fully. An estimated fully loaded hourly labor rate of $200 per hour is also used for the hourly labor rate applicable to FAA. The resulting one-time upfront incremental cost to FAA is estimated to be $16,000.

Under both scenarios, this final rule is also expected to result in cost savings for carriers that will substantially exceed any costs imposed because this final rule will reduce the negative reputational impacts and harm that air carriers currently experience because of the attribution of certain delay and cancellation causes to air carriers that this rulemaking addresses as not within their control. In the absence of this final rule, overreporting of both the number and proportion of delays and cancellations attributed to air carriers would continue, with that information then made available to consumers and the public via BTS's website and the Department's monthly ATCR table displaying cause of delay which in turn reaches various industry and general news outlets and social media. The attribution of delays and cancellations that are outside the control of air carriers to the air carrier causal category impacts the relative competitiveness of air carriers by influencing consumer decision making when selecting an air carrier for a trip. In addition, consumers may consider this information in weighing their transportation options, including options to use modes of transportation other than commercial airlines. This final rule addresses and corrects overreporting of air carrier delays and cancellations, which in turn will reduce the negative reputational impacts and harm that carriers currently experience. Though the magnitude of the reduction in negative reputational impacts and harm cannot be quantified, the largest U.S. industry representative group submits that the reporting that makes it into the hands of the public through the Department's ATCR is significant.^[12] Given the large number of flights operated and passengers transported by the 13 reporting air carriers that are within the scope of this final rule, the Department believes that the cost savings to air carriers resulting from the reduction in the negative reputational impacts and harm that air carriers currently experience will substantially exceed the scenario with relatively modest one-time upfront incremental costs to the reporting air carriers, BTS, and FAA to perform modifications to data processing systems to incorporate the new causal category for delays and cancellations. Therefore, overall, this final rule is expected to have total costs less than zero.

Transfers

In addition to the benefits and cost savings of the final rule, it is expected that the total value of amenities and compensation currently provided by air carriers to consumers will be reduced under this final rule because of the 10 delineated causes of delay and cancellation that will now be excluded from the Air Carrier category in 14 CFR 234.4. All the reporting air carriers that sell tickets currently commit to providing amenities at no cost to consumers for lengthy controllable delays and controllable cancellations in their customer service plans.^[13] In addition, some of these carriers commit to providing non-cash compensation for lengthy controllable cancellations and controllable delays. With the 10 delineated causes of delay and cancellation under this final rule now excluded from the Air Carrier category in 14 CFR 234.4, the number of delays and cancellations for which air carriers provide amenities and compensation to consumers is expected to be reduced. The magnitude of the total reduction in amenities and compensation cannot be reliably estimated by the Department ( printed page 56592) mainly because the Department does not have visibility into the frequency of the 10 delineated causes excluded from the Air Carrier category. To the extent that the total value of amenities and compensation that air carriers provide to consumers is reduced under this final rule, the value of that reduction is best represented as a transfer of value from consumers back to air carriers, rather than a cost to consumers or a benefit to air carriers. Benefit and cost estimates reflect real resource use, and in general it is more appropriate to consider payments from one group to another that do not affect the total resources available to society as transfers rather than as costs or benefits.

B. Executive Order 14192 (Unleashing Prosperity Through Deregulation)

This final rule is considered an E.O. 14192 deregulatory action. Details on the estimated cost savings of this rule can be found in the rule's economic analysis.

C. Executive Order 13132 (Federalism)

This final rule has been analyzed in accordance with the principles and criteria contained in E.O. 13132 (Federalism). This final rule does not impose any requirement that: (1) has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government, (2) imposes substantial direct compliance costs on State and local governments, or (3) preempts State law. The Airline Deregulation Act already preempts States from regulating in this area, 49 U.S.C. 41713. Therefore, the consultation and funding requirements of E.O. 13132 do not apply.

D. Executive Order 13175

This rule has been analyzed in accordance with the principles and criteria contained in E.O. 13175 (Consultation and Coordination with Indian Tribal Governments). Because the requirements of this final rule do not significantly or uniquely affect the communities of the Indian tribal governments or impose substantial direct compliance costs on them, the funding and consultation requirements of E.O. 13175 do not apply.

E. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601, et seq.) requires Federal agencies to review and assess the impact on small entities of any regulation required by 5 U.S.C. 553 or any other law to be published as a proposed rule for public comment prior to issuance of a final rule. Because no notice of proposed rulemaking is required for this rule under the Administrative Procedure Act (5 U.S.C. 553) or any other law the analytical provisions of the RFA do not apply.

F. Paperwork Reduction Act

Under the Paperwork Reduction Act (44 U.S.C. 3501, et seq.) (PRA), no person is required to respond to a collection of information unless it displays a valid OMB control number.

This final rule imposes revised requirements that would require revisions to the information collection under OMB Control No. 2138-0041 and approval by OMB. The Department will seek approval from OMB for the changes to the collection of information established in this final rule.

G. Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (UMRA) at 2 U.S.C. 1532 requires that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. As described elsewhere in the preamble, this final rule would have no such effect on State, local, and tribal governments or on the private sector. Therefore, the Department has determined that no assessment is required pursuant to UMRA.

H. National Environmental Policy Act

The Department has analyzed the environmental impacts of this final rule pursuant to the National Environmental Policy Act of 1969 (NEPA) ^[14] and has determined that it is categorically excluded pursuant to DOT Order 5610.1D, Procedures for Considering Environmental Impacts.^[15] DOT Order 5610.1D categorically excludes “[a]ctions relating to consumer protection, including regulations.” The purpose of this rulemaking is to update reporting on the causes of flight cancellations and delays, consistent with the requirements of the 2024 FAA Act. Section 506 of the 2024 FAA Act, codified at 49 U.S.C. 42307, requires the Department to establish and maintain a publicly available online delay and cancellation dashboard “that displays information regarding the services and compensation provided by each large air carrier to mitigate any passenger inconvenience caused by a delay or cancellation due to circumstances in the control of such carrier.” That section further requires the Department to “explain the circumstances under which a delay or cancellation is not due to circumstances in the control of the large air carrier . . . consistent with [14 CFR] 234.4.” Accordingly, this rulemaking, which defines which causes of delay are and are not due to circumstances within the control of an air carrier falls under the categorical NEPA exception for regulations relating to consumer protection. The Department does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

For the reasons stated in the preamble, DOT amends 14 CFR part 234 as follows:

91 FR 56588