1. U.S. Code
  2. title 49
  3. subtitle VII
  4. part A
  5. subpartii
  6. chapter 417
  7. subchapter II
  8. § 41736

Collapse to view only § 41736. Air transportation to noneligible places

§ 41731. Definitions
(a)General.—In this subchapter—
(1) “eligible place” means a place in the United States that—
(A)
(i)(I) was an eligible point under section 419 of the Federal Aviation Act of 1958 before (II) received scheduled air transportation at any time after January 1, 1990; and(III) is not listed in Department of Transportation Orders 89–9–37 and 89–12–52 as a place ineligible for compensation under this subchapter; or
(ii) was determined, on or after October 1, 1988, and before the date of the enactment of the FAA Extension, Safety, and Security Act of 2016 (Public Law 114–190), under this subchapter by the Secretary of Transportation to be eligible to receive subsidized small community air service under section 41736(a);
(B) had an average of 10 enplanements per service day or more, as determined by the Secretary, during the most recent fiscal year beginning after September 30, 2012;
(C) had an average subsidy per passenger of less than $1,000 during the most recent fiscal year, as determined by the Secretary; and
(D) is a community that, at any time during the period between September 30, 2010, and September 30, 2011, inclusive—
(i) received essential air service for which compensation was provided to an air carrier under this subchapter; or
(ii) received a 90-day notice of intent to terminate essential air service and the Secretary required the air carrier to continue to provide such service to the community.
(2) “enhanced essential air service” means scheduled air transportation to an eligible place of a higher level or quality than basic essential air service described in section 41732 of this title.
(b)Limitation on Authority To Decide a Place Not an Eligible Place.—The Secretary may not decide that a place described in subsection (a)(1) of this section is not an eligible place on any basis that is not specifically stated in this subchapter.
(c)Exception for Locations in Alaska and Hawaii.—Subparagraphs (B), (C), and (D) of subsection (a)(1) shall not apply with respect to locations in the State of Alaska or the State of Hawaii.
(d)Exceptions for Locations More Than 175 Driving Miles From the Nearest Large or Medium Hub Airport.—Subsection (a)(1)(B) shall not apply with respect to locations that are more than 175 driving miles from the nearest large or medium hub airport.
(e)Waivers.—For fiscal year 2013 and each fiscal year thereafter, the Secretary may waive, on an annual basis, subsection (a)(1)(B) with respect to a location if the location demonstrates to the Secretary’s satisfaction that the reason the location averages fewer than 10 enplanements per day is due to a temporary decline in enplanements.
(f)Definition.—For purposes of subsection (a)(1)(B), the term “enplanements” means the number of passengers enplaning, at an eligible place, on flights operated by the subsidized essential air service carrier.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1143; Pub. L. 106–181, title II, § 208, Apr. 5, 2000, 114 Stat. 95; Pub. L. 108–176, title II, § 225(b)(2), Dec. 12, 2003, 117 Stat. 2529; Pub. L. 112–27, § 6, Aug. 5, 2011, 125 Stat. 271; Pub. L. 112–95, title IV, §§ 421, 422, Feb. 14, 2012, 126 Stat. 96, 97; Pub. L. 115–254, div. B, title IV, § 453(a), Oct. 5, 2018, 132 Stat. 3348.)

CITE AS: 49 USC 41731

§ 41732. Basic essential air service
(a)General.—Basic essential air service provided under section 41733 of this title is scheduled air transportation of passengers and cargo—
(1) to a hub airport that has convenient connecting or single-plane air service to a substantial number of destinations beyond that airport; or
(2) to a small hub or nonhub airport, when in Alaska or when the nearest hub airport is more than 400 miles from an eligible place.
(b)Minimum Requirements.—Basic essential air service shall include at least the following:
(1)
(A) for a place not in Alaska, 2 daily round trips 6 days a week, with not more than one intermediate stop on each flight; or
(B) for a place in Alaska, a level of service at least equal to that provided in 1976 or 2 round trips a week, whichever is greater, except that the Secretary of Transportation and the appropriate State authority of Alaska may agree to a different level of service after consulting with the affected community.
(2) flights at reasonable times considering the needs of passengers with connecting flights at the airport and at prices that are not excessive compared to the generally prevailing prices of other air carriers for like service between similar places.
(3) for a place not in Alaska, service provided in an aircraft with an effective capacity of at least 15 passengers if the average daily boardings at the place in any calendar year from 1976-1986 were more than 11 passengers unless—
(A) that level-of-service requirement would require paying compensation in a fiscal year under section 41733(d) or 41734(d) or (e) of this title for the place when compensation otherwise would not have been paid for that place in that year; or
(B) the affected community agrees with the Secretary in writing to the use of smaller aircraft to provide service to the place.
(4) service accommodating the estimated passenger and property traffic at an average load factor, for each class of traffic considering seasonal demands for the service, of not more than—
(A) 50 percent; or
(B) 60 percent when service is provided by aircraft with more than 14 passenger seats.
(5) service provided in aircraft with at least 2 engines and using 2 pilots, unless scheduled air transportation has not been provided to the place in aircraft with at least 2 engines and using 2 pilots for at least 60 consecutive operating days at any time since October 31, 1978.
(6) service provided by pressurized aircraft when the service is provided by aircraft that regularly fly above 8,000 feet in altitude.
(c)Waivers.—Notwithstanding section 41733(e), upon request by an eligible place, the Secretary may waive, in whole or in part, subsections (a) and (b) of this section or subsections (a) through (c) of section 41734. A waiver issued under this subsection shall remain in effect for a limited period of time, as determined by the Secretary.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1144; Pub. L. 115–254, div. B, title IV, § 456, Oct. 5, 2018, 132 Stat. 3350.)

CITE AS: 49 USC 41732

§ 41733. Level of basic essential air service
(a)Decisions Made Before October 1, 1988.—For each eligible place for which a decision was made before October 1, 1988, under section 419 of the Federal Aviation Act of 1958, establishing the level of essential air transportation, the level of basic essential air service for that place shall be the level established by the Secretary of Transportation for that place by not later than December 29, 1988.
(b)Decisions Not Made Before October 1, 1988.—
(1) The Secretary shall decide on the level of basic essential air service for each eligible place for which a decision was not made before October 1, 1988, establishing the level of essential air transportation, when the Secretary receives notice that service to that place will be provided by only one air carrier. The Secretary shall make the decision by the last day of the 6-month period beginning on the date the Secretary receives the notice. The Secretary may impose notice requirements necessary to carry out this subsection. Before making a decision, the Secretary shall consider the views of any interested community and the appropriate State authority of the State in which the community is located.
(2) Until the Secretary has made a decision on a level of basic essential air service for an eligible place under this subsection, the Secretary, on petition by an appropriate representative of the place, shall prohibit an air carrier from ending, suspending, or reducing air transportation to that place that appears to deprive the place of basic essential air service.
(c)Availability of Compensation.—
(1) If the Secretary decides that basic essential air service will not be provided to an eligible place without compensation, the Secretary shall provide notice that an air carrier may apply to provide basic essential air service to the place for compensation under this section. In selecting an applicant, the Secretary shall consider, among other factors—
(A) the demonstrated reliability of the applicant in providing scheduled air service;
(B) the contractual and marketing arrangements the applicant has made with a larger carrier to ensure service beyond the hub airport;
(C) the interline arrangements that the applicant has made with a larger carrier to allow passengers and cargo of the applicant at the hub airport to be transported by the larger carrier through one reservation, ticket, and baggage check-in;
(D) the preferences of the actual and potential users of air transportation at the eligible place, giving substantial weight to the views of the elected officials representing the users;
(E) whether the air carrier has included a plan in its proposal to market its services to the community; and
(F) for an eligible place in Alaska, the experience of the applicant in providing, in Alaska, scheduled air service, or significant patterns of non-scheduled air service under an exemption granted under section 40109(a) and (c)–(h) of this title.
(2) Under guidelines prescribed under section 41737(a) of this title, the Secretary shall pay the rate of compensation for providing basic essential air service under this section and section 41734 of this title.
(d)Compensation Payments.—The Secretary shall pay compensation under this section at times and in the way the Secretary decides is appropriate. The Secretary shall end payment of compensation to an air carrier for providing basic essential air service to an eligible place when the Secretary decides the compensation is no longer necessary to maintain basic essential air service to the place.
(e)Review.—The Secretary shall review periodically the level of basic essential air service for each eligible place. Based on the review and consultations with an interested community and the appropriate State authority of the State in which the community is located, the Secretary may make appropriate adjustments in the level of service, to the extent such adjustments are to a level not less than the basic essential air service level established under subsection (a) for the airport that serves the community.
(f)Notice to Communities Prior to Termination of Eligibility.—
(1)In general.—The Secretary shall notify each community receiving basic essential air service for which compensation is being paid under this subchapter on or before the 45th day before issuing any final decision to end the payment of such compensation due to a determination by the Secretary that providing such service requires a rate of subsidy per passenger in excess of the subsidy cap.
(2)Procedures to avoid termination.—The Secretary shall establish, by order, procedures by which each community notified of an impending loss of subsidy under paragraph (1) may work directly with an air carrier to ensure that the air carrier is able to submit a proposal to the Secretary to provide essential air service to such community for an amount of compensation that would not exceed the subsidy cap.
(3)Assistance provided.—The Secretary shall provide, by order, information to each community notified under paragraph (1) regarding—
(A) the procedures established pursuant to paragraph (2); and
(B) the maximum amount of compensation that could be provided under this subchapter to an air carrier serving such community that would comply with basic essential air service and the subsidy cap.
(g)Proposals of State and Local Governments to Restore Eligibility.—
(1)In general.—If the Secretary, after the date of enactment of this subsection, ends payment of compensation to an air carrier for providing basic essential air service to an eligible place because the Secretary has determined that providing such service requires a rate of subsidy per passenger in excess of the subsidy cap or that the place is no longer an eligible place pursuant to section 41731(a)(1)(B), a State or local government may submit to the Secretary a proposal for restoring compensation for such service. Such proposal shall be a joint proposal of the State or local government and an air carrier.
(2)Determination by secretary.—The Secretary shall issue an order restoring the eligibility of the otherwise eligible place to receive basic essential air service by an air carrier for compensation under subsection (c) if—
(A) a State or local government submits to the Secretary a proposal under paragraph (1); and
(B) the Secretary determines that—
(i) the rate of subsidy per passenger under the proposal does not exceed the subsidy cap;
(ii) the proposal is likely to result in an average number of enplanements per day that will satisfy the requirement in section 41731(a)(1)(B); and
(iii) the proposal is consistent with the legal and regulatory requirements of the essential air service program.
(h)Subsidy Cap Defined.—In this section, the term “subsidy cap” means the subsidy-per-passenger cap established by section 332 of the Department of Transportation and Related Agencies Appropriations Act, 2000 (Public Law 106–69; 113 Stat. 1022).
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1145; Pub. L. 106–181, title II, § 209(b), Apr. 5, 2000, 114 Stat. 95; Pub. L. 112–95, title IV, §§ 423–425, Feb. 14, 2012, 126 Stat. 97, 98.)

CITE AS: 49 USC 41733

§ 41734. Ending, suspending, and reducing basic essential air service
(a)Notice Required.—An air carrier may end, suspend, or reduce air transportation to an eligible place below the level of basic essential air service established for that place under section 41733 of this title only after giving the Secretary of Transportation, the appropriate State authority, and the affected communities at least 90 days’ notice before ending, suspending, or reducing that transportation.
(b)Continuation of Service for 30 Days After Notice Period.—If at the end of the notice period under subsection (a) of this section the Secretary has not found another air carrier to provide basic essential air service to the eligible place, the Secretary shall require the carrier providing notice to continue to provide basic essential air service to the place for an additional 30-day period or until another carrier begins to provide basic essential air service to the place, whichever occurs first.
(c)Continuation of Service for Additional 30-Day Periods.—If at the end of the 30-day period under subsection (b) of this section the Secretary decides another air carrier will not provide basic essential air service to the place on a continuing basis, the Secretary shall require the carrier providing service to continue to provide service for additional 30-day periods until another carrier begins providing service on a continuing basis. At the end of each 30-day period, the Secretary shall decide if another carrier will provide service on a continuing basis.
(d)Continuation of Compensation After Notice Period.—If an air carrier receiving compensation under section 41733 of this title for providing basic essential air service to an eligible place is required to continue to provide service to the place under this section after the 90-day notice period under subsection (a) of this section, the Secretary shall provide the carrier with compensation sufficient—
(1) to pay for the fully allocated actual cost to the carrier of performing the basic essential air service that was being provided when the 90-day notice was given under subsection (a) of this section plus a reasonable return on investment that is at least 5 percent of operating costs; and
(2) to provide the carrier an additional return that recognizes the demonstrated additional lost profits from opportunities foregone and the likelihood that those lost profits increase as the period during which the carrier is required to provide the service continues.
(e)Compensation to Air Carriers Originally Providing Service Without Compensation.—If the Secretary requires an air carrier providing basic essential air service to an eligible place without compensation under section 41733 of this title to continue providing that service after the 90-day notice period required by subsection (a) of this section, the Secretary shall provide the carrier with compensation after the end of the 90-day notice period that is sufficient—
(1) to pay for the fully allocated actual cost to the carrier of performing the basic essential air service that was being provided when the 90-day notice was given under subsection (a) of this section plus a reasonable return on investment that is at least 5 percent of operating costs; and
(2) to provide the carrier an additional return that recognizes the demonstrated additional lost profits from opportunities foregone and the likelihood that those lost profits increase as the period during which the carrier is required to provide the service continues.
(f)Finding Replacement Carriers.—When the Secretary requires an air carrier to continue to provide basic essential air service to an eligible place, the Secretary shall continue to make every effort to find another carrier to provide at least that basic essential air service to the place on a continuing basis.
(g)Transfer of Authority.—If an air carrier, providing basic essential air service under section 41733 of this title between an eligible place and an airport at which the Administrator of the Federal Aviation Administration limits the number of instrument flight rule takeoffs and landings of aircraft, provides notice under subsection (a) of this section of an intention to end, suspend, or reduce that service and another carrier is found to provide the service, the Secretary shall require the carrier providing notice to transfer any operational authority the carrier has to land or take off at that airport related to the service to the eligible place to the carrier that will provide the service, if—
(1) the carrier that will provide the service needs the authority; and
(2) the authority to be transferred is being used to provide air service to another eligible place.
(h)Nonconsideration of Slot Availability.—In determining what is basic essential air service and in selecting an air carrier to provide such service, the Secretary shall not consider as a factor whether slots at a high density airport are available for providing such service.
(i)Exemption From Hold-In Requirements.—If, after the date of enactment of this subsection, an air carrier commences air transportation to an eligible place that is not receiving scheduled passenger air service as a result of the failure of the eligible place to meet requirements contained in an appropriations Act, the air carrier shall not be subject to the requirements of subsections (b) and (c) with respect to such air transportation.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1146; Pub. L. 103–305, title II, § 206(c), Aug. 23, 1994, 108 Stat. 1587; Pub. L. 103–429, § 6(81), Oct. 31, 1994, 108 Stat. 4388; Pub. L. 108–176, title IV, § 401, Dec. 12, 2003, 117 Stat. 2542; Pub. L. 112–95, title IV, § 426(b)(1), Feb. 14, 2012, 126 Stat. 98.)

CITE AS: 49 USC 41734

§ 41735. Enhanced essential air service
(a)Proposals.—
(1) A State or local government may submit a proposal to the Secretary of Transportation for enhanced essential air service to an eligible place for which basic essential air service is being provided under section 41733 of this title. The proposal shall—
(A) specify the level and type of enhanced essential air service the State or local government considers appropriate; and
(B) include an agreement related to compensation required for the proposed service.
(2) The agreement submitted under paragraph (1)(B) of this subsection shall provide that—
(A) the State or local government or a person pay 50 percent of the compensation required for the proposed service and the United States Government pay the remaining 50 percent; or
(B)
(i) the Government pay 100 percent of the compensation; and
(ii) if the proposed service is not successful for at least a 2-year period under the criteria prescribed by the Secretary under paragraph (3) of this subsection, the eligible place is not eligible for air service or air transportation for which compensation is paid by the Secretary under this subchapter.
(3) The Secretary shall prescribe by regulation objective criteria for deciding whether enhanced essential air service to an eligible place under this section is successful in terms of—
(A) increasing passenger usage of the airport facilities at the place; and
(B) reducing the amount of compensation provided by the Secretary under this subchapter for that service.
(b)Decisions.—Not later than 90 days after receiving a proposal under subsection (a) of this section, the Secretary shall—
(1) approve the proposal if the Secretary decides the proposal is reasonable; or
(2) if the Secretary decides the proposal is not reasonable, disapprove the proposal and notify the State or local government of the disapproval and the reasons for the disapproval.
(c)Compensation Payments.—
(1) The Secretary shall pay compensation under this section when and in the way the Secretary decides is appropriate. Compensation for enhanced essential air service under this section may be paid only for the costs incurred in providing air service to an eligible place that are in addition to the costs incurred in providing basic essential air service to the place under section 41733 of this title. The Secretary shall continue to pay compensation under this section only as long as—
(A) the air carrier maintains the level of enhanced essential air service;
(B) the State or local government or person agreeing to pay compensation under this section continues to pay the compensation; and
(C) the Secretary decides the compensation is necessary to maintain the service to the place.
(2) The Secretary may require the State or local government or person agreeing to pay compensation under this section to make advance payments or provide other security to ensure that timely payments are made.
(d)Review.—
(1) The Secretary shall review periodically the enhanced essential air service provided to each eligible place under this section.
(2) For service for which the Government pays 50 percent of the compensation, based on the review and consultation with the affected community and the State or local government or person paying the remaining 50 percent of the compensation, the Secretary shall make appropriate adjustments in the type and level of service to the place.
(3) For service for which the Government pays 100 percent of the compensation, based on the review and consultation with the State or local government submitting the proposal, the Secretary shall decide whether the service has succeeded for at least a 2-year period under the criteria prescribed under subsection (a)(3) of this section. If unsuccessful, the place is not eligible for air service or air transportation for which compensation is paid by the Secretary under this subchapter.
(e)Ending, Suspending, and Reducing Air Transportation.—An air carrier may end, suspend, or reduce air transportation to an eligible place below the level of enhanced essential air service established for that place by the Secretary under this section only after giving the Secretary, the affected community, and the State or local government or person paying compensation for that service at least 30 days’ notice before ending, suspending, or reducing the service. This subsection does not relieve the carrier of an obligation under section 41734 of this title.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1148.)

CITE AS: 49 USC 41735

§ 41736. Air transportation to noneligible places
(a)Proposals and Decisions.—
(1) A State or local government may propose to the Secretary of Transportation that the Secretary provide compensation to an air carrier to provide air transportation to a place that is not an eligible place under this subchapter. Not later than 90 days after receiving a proposal under this section, the Secretary shall—
(A) decide whether to designate the place as eligible to receive compensation under this section; and
(B)
(i) approve the proposal if the State or local government or a person is willing and able to pay 50 percent of the compensation for providing the transportation, and notify the State or local government of the approval; or
(ii) disapprove the proposal if the Secretary decides the proposal is not reasonable under paragraph (2) of this subsection, and notify the State or local government of the disapproval and the reasons for the disapproval.
(2) In deciding whether a proposal is reasonable, the Secretary shall consider, among other factors—
(A) the traffic-generating potential of the place;
(B) the cost to the United States Government of providing the proposed transportation; and
(C) the distance of the place from the closest hub airport.
(b)Approval for Certain Air Transportation.—Notwithstanding subsection (a)(1)(B) of this section, the Secretary shall approve a proposal under this section to compensate an air carrier for providing air transportation to a place in the 48 contiguous States or the District of Columbia and designate the place as eligible for compensation under this section if—
(1) at any time before October 23, 1978, the place was served by a carrier holding a certificate under section 401 of the Federal Aviation Act of 1958;
(2) the place is more than 50 miles from the nearest small hub airport or an eligible place;
(3) the place is more than 150 miles from the nearest hub airport; and
(4) the State or local government submitting the proposal or a person is willing and able to pay 25 percent of the cost of providing the compensated transportation.
Paragraph (4) does not apply to any community approved for service under this section during the period beginning October 1, 1991, and ending December 31, 1997.
(c)Level of Air Transportation.—
(1) If the Secretary designates a place under subsection (a)(1) of this section as eligible for compensation under this section, the Secretary shall decide, not later than 6 months after the date of the designation, on the level of air transportation to be provided under this section. Before making a decision, the Secretary shall consider the views of any interested community, the appropriate State authority of the State in which the place is located, and the State or local government or person agreeing to pay compensation for the transportation under subsection (b)(4) of this section.
(2) After making the decision under paragraph (1) of this subsection, the Secretary shall provide notice that any air carrier that is willing to provide the level of air transportation established under paragraph (1) for a place may submit an application to provide the transportation. In selecting an applicant, the Secretary shall consider, among other factors—
(A) the factors listed in section 41733(c)(1) of this title; and
(B) the views of the State or local government or person agreeing to pay compensation for the transportation.
(d)Compensation Payments.—
(1) The Secretary shall pay compensation under this section when and in the way the Secretary decides is appropriate. The Secretary shall continue to pay compensation under this section only as long as—
(A) the air carrier maintains the level of air transportation established by the Secretary under subsection (c)(1) of this section;
(B) the State or local government or person agreeing to pay compensation for transportation under this section continues to pay that compensation; and
(C) the Secretary decides the compensation is necessary to maintain the transportation to the place.
(2) The Secretary may require the State or local government or person agreeing to pay compensation under this section to make advance payments or provide other security to ensure that timely payments are made.
(e)Review.—The Secretary shall review periodically the level of air transportation provided under this section. Based on the review and consultation with any interested community, the appropriate State authority of the State in which the community is located, and the State or local government or person paying compensation under this section, the Secretary may make appropriate adjustments in the level of transportation.
(f)Withdrawal of Eligibility Designations.—After providing notice and an opportunity for interested persons to comment, the Secretary may withdraw the designation of a place under subsection (a)(1) of this section as eligible to receive compensation under this section if the place has received air transportation under this section for at least 2 years and the Secretary decides the withdrawal would be in the public interest. The Secretary by regulation shall prescribe standards for deciding whether the withdrawal of a designation under this subsection is in the public interest. The standards shall include the factors listed in subsection (a)(2) of this section.
(g)Ending, Suspending, and Reducing Air Transportation.—An air carrier providing air transportation for compensation under this section may end, suspend, or reduce that transportation below the level of transportation established by the Secretary under this section only after giving the Secretary, the affected community, and the State or local government or person paying compensation under this section at least 30 days’ notice before ending, suspending, or reducing the transportation.
(h)Sunset.—
(1)Proposals.—No proposal under subsection (a) may be accepted by the Secretary after the date of enactment of this subsection.
(2)Program.—The Secretary may not provide any compensation under this section after the date that is 2 years after the date of enactment of this subsection.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1149; Pub. L. 106–181, title II, § 202, Apr. 5, 2000, 114 Stat. 91; Pub. L. 115–254, div. B, title IV, § 453(b), Oct. 5, 2018, 132 Stat. 3348.)

CITE AS: 49 USC 41736

§ 41737. Compensation guidelines, limitations, and claims
(a)Compensation Guidelines.—
(1) The Secretary of Transportation shall prescribe guidelines governing the rate of compensation payable under this subchapter. The guidelines shall be used to determine the reasonable amount of compensation required to ensure the continuation of air service or air transportation under this subchapter. The guidelines shall—
(A) provide for a reduction in compensation when an air carrier does not provide service or transportation agreed to be provided;
(B) consider amounts needed by an air carrier to promote public use of the service or transportation for which compensation is being paid;
(C) include expense elements based on representative costs of air carriers providing scheduled air transportation of passengers, property, and mail on aircraft of the type the Secretary decides is appropriate for providing the service or transportation for which compensation is being provided;
(D) include provisions under which the Secretary may encourage an air carrier to improve air service for which compensation is being paid under this subchapter by incorporating financial incentives in an essential air service contract based on specified performance goals, including goals related to improving on-time performance, reducing the number of flight cancellations, establishing reasonable fares (including joint fares beyond the hub airport), establishing convenient connections to flights providing service beyond hub airports, and increasing marketing efforts; and
(E) include provisions under which the Secretary may execute a long-term essential air service contract to encourage an air carrier to provide air service to an eligible place if it would be in the public interest to do so.
(2) Promotional amounts described in paragraph (1)(B) of this subsection shall be a special, segregated element of the compensation provided to a carrier under this subchapter.
(b)Required Finding.—The Secretary may pay compensation to an air carrier for providing air service or air transportation under this subchapter only if the Secretary finds the carrier is able to provide the service or transportation in a reliable way.
(c)Claims.—Not later than 15 days after receiving a written claim from an air carrier for compensation under this subchapter, the Secretary shall—
(1) pay or deny the United States Government’s share of a claim; and
(2) if denying the claim, notify the carrier of the denial and the reasons for the denial.
(d)Authority To Make Agreements and Incur Obligations.—
(1) The Secretary may make agreements and incur obligations from the Airport and Airway Trust Fund established under section 9502 of the Internal Revenue Code of 1986 (26 U.S.C. 9502) to pay compensation under this subchapter. An agreement by the Secretary under this subsection is a contractual obligation of the Government to pay the Government’s share of the compensation.
(2) Not more than $38,600,000 is available to the Secretary out of the Fund for each of the fiscal years ending September 30, 1993–1998, to incur obligations under this section. Amounts made available under this section remain available until expended.
(e)Adjustments to Account for Significantly Increased Costs.—
(1)In general.—If the Secretary determines that air carriers are experiencing significantly increased costs in providing air service or air transportation for which compensation is being paid under this subchapter, the Secretary may increase the rates of compensation payable under this subchapter without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734.
(2)Readjustment if costs subsequently decline.—If an adjustment is made under paragraph (1), and total unit costs subsequently decrease to at least the total unit cost reflected in the compensation rate, then the Secretary may reverse the adjustment previously made under paragraph (1) without regard to any agreement or requirement relating to the renegotiation of contracts or any notice requirement under section 41734.
(3)Significantly increased costs defined.—In this subsection, the term “significantly increased costs” means a total unit cost increase (but not increases in individual unit costs) of 10 percent or more in relation to the total unit cost reflected in the compensation rate, based on the carrier’s internal audit of its financial statements if such cost increase is incurred for a period of at least 2 consecutive months.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1151; Pub. L. 108–176, title IV, § 402(a), Dec. 12, 2003, 117 Stat. 2543; Pub. L. 112–95, title IV, § 427(a), Feb. 14, 2012, 126 Stat. 99.)

CITE AS: 49 USC 41737

§ 41738. Fitness of air carriers
Notwithstanding section 40109(a) and (c)–(h) of this title, an air carrier may provide air service to an eligible place or air transportation to a place designated under section 41736 of this title only when the Secretary of Transportation decides that—
(1) the carrier is fit, willing, and able to perform the service or transportation; and
(2) aircraft used to provide the service or transportation, and operations related to the service or transportation, conform to the safety standards prescribed by the Administrator of the Federal Aviation Administration.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152.)

CITE AS: 49 USC 41738

§ 41739. Air carrier obligations

If at least 2 air carriers make an agreement to operate under or use a single carrier designator code to provide air transportation, the carrier whose code is being used shares responsibility with the other carriers for the quality of transportation provided the public under the code by the other carriers.

(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152.)

CITE AS: 49 USC 41739

§ 41740. Joint proposals

The Secretary of Transportation shall encourage the submission of joint proposals, including joint fares, by 2 or more air carriers for providing air service or air transportation under this subchapter through arrangements that maximize the service or transportation to and from major destinations beyond the hub.

(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152; Pub. L. 108–176, title IV, § 403, Dec. 12, 2003, 117 Stat. 2543.)

CITE AS: 49 USC 41740

§ 41741. Insurance

The Secretary of Transportation may pay an air carrier compensation under this subchapter only when the carrier files with the Secretary an insurance policy or self-insurance plan approved by the Secretary. The policy or plan must be sufficient to pay for bodily injury to, or death of, an individual, or for loss of or damage to property of others, resulting from the operation of aircraft, but not more than the amount of the policy or plan limits.

(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152.)

CITE AS: 49 USC 41741

§ 41742. Essential air service authorization
(a)In General.—
(1)Authorization.—Out of the amounts received by the Federal Aviation Administration credited to the account established under section 45303 of this title or otherwise provided to the Administration, the sum of $50,000,000 for each fiscal year is authorized and shall be made available immediately for obligation and expenditure to carry out the essential air service program under this subchapter.
(2)Additional funds.—In addition to amounts authorized under paragraph (1), there is authorized to be appropriated out of the Airport and Airway Trust Fund (established under section 9502 of the Internal Revenue Code of 1986) $155,000,000 for fiscal year 2018, $158,000,000 for fiscal year 2019, $161,000,000 for fiscal year 2020, $165,000,000 for fiscal year 2021, $168,000,000 for fiscal year 2022, and $172,000,000 for fiscal year 2023, and $216,192,407 for the period beginning on October 1, 2023, and ending on May 10, 2024, to carry out the essential air service program under this subchapter of which not more than $12,000,000 per fiscal year may be used for the marketing incentive program for communities and for State marketing assistance.
(3)Authorization for additional employees.—In addition to amounts authorized under paragraphs (1) and (2), there are authorized to be appropriated such sums as may be necessary for the Secretary of Transportation to hire and employ 4 additional employees for the office responsible for carrying out the essential air service program.
(b)Distribution of Additional Funds.—Notwithstanding any other provision of law, in any fiscal year in which funds credited to the account established under section 45303, including the funds derived from fees imposed under the authority contained in section 45301(a), exceed the $50,000,000 made available under subsection (a)(1), such funds shall be made available immediately for obligation and expenditure to carry out the essential air service program under this subchapter.
(c)Availability of Funds.—The funds made available under this section shall remain available until expended.
(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1152; Pub. L. 104–264, title II, § 278(c), Oct. 9, 1996, 110 Stat. 3249; Pub. L. 106–181, title II, § 209(a), Apr. 5, 2000, 114 Stat. 95; Pub. L. 108–176, title IV, § 404, Dec. 12, 2003, 117 Stat. 2543; Pub. L. 112–30, title II, § 209, Sept. 16, 2011, 125 Stat. 359; Pub. L. 112–91, § 9, Jan. 31, 2012, 126 Stat. 5; Pub. L. 112–95, title IV, § 428, Feb. 14, 2012, 126 Stat. 99; Pub. L. 114–55, title I, § 107, Sept. 30, 2015, 129 Stat. 524; Pub. L. 114–141, title I, § 107, Mar. 30, 2016, 130 Stat. 324; Pub. L. 114–190, title I, § 1107, July 15, 2016, 130 Stat. 618; Pub. L. 115–63, title I, § 104(a), Sept. 29, 2017, 131 Stat. 1170; Pub. L. 115–141, div. M, title I, § 104(a), Mar. 23, 2018, 132 Stat. 1047; Pub. L. 115–254, div. B, title IV, § 451(a), Oct. 5, 2018, 132 Stat. 3347; Pub. L. 118–15, div. B, title II, § 2206(a), Sept. 30, 2023, 137 Stat. 85; Pub. L. 118–34, title I, § 106(a), Dec. 26, 2023, 137 Stat. 1115; Pub. L. 118–41, title I, § 106(a), Mar. 8, 2024, 138 Stat. 23.)

CITE AS: 49 USC 41742

§ 41743. Airports not receiving sufficient service
(a)Small Community Air Service Development Program.—The Secretary of Transportation shall establish a program that meets the requirements of this section for improving air carrier service to airports not receiving sufficient air carrier service.
(b)Application Required.—In order to participate in the program established under subsection (a), a community or consortium of communities shall submit an application to the Secretary in such form, at such time, and containing such information as the Secretary may require, including—
(1) an assessment of the need of the community or consortium for access, or improved access, to the national air transportation system; and
(2) an analysis of the application of the criteria in subsection (c) to that community or consortium.
(c)Criteria for Participation.—In selecting communities, or consortia of communities, for participation in the program established under subsection (a), the Secretary shall apply the following criteria:
(1)Size.—On the date of submission of the relevant application under subsection (b), the airport serving the community or consortium—
(A) is not larger than a small hub airport, as determined using the Department of Transportation’s most recently published classification; and
(B) has—
(i) insufficient air carrier service; or
(ii) unreasonably high air fares.
(2)Characteristics.—The airport presents characteristics, such as geographic diversity or unique circumstances, that will demonstrate the need for, and feasibility of, the program established under subsection (a).
(3)State limit.—Not more than 4 communities or consortia of communities, or a combination thereof, from the same State may be selected to participate in the program in any fiscal year.
(4)Overall limit.—
(A)In general.—No more than 40 communities or consortia of communities, or a combination thereof, may be selected to participate in the program in each year for which funds are appropriated for the program.
(B)Same projects.—Except as provided in subparagraph (C), no community, consortia of communities, or combination thereof may participate in the program in support of the same project more than once in a 10-year period, but any community, consortia of communities, or combination thereof may apply, subsequent to such participation, to participate in the program in support of a different project at any time.
(C)Exception.—The Secretary may waive the limitation under subparagraph (B) related to projects that are the same if the Secretary determines that the community or consortium spent little or no money on its previous project or encountered industry or environmental challenges, due to circumstances that were reasonably beyond the control of the community or consortium.
(5)Priorities.—The Secretary shall give priority to communities or consortia of communities where—
(A) air fares are higher than the average air fares for all communities;
(B) the community or consortium will provide a portion of the cost of the activity to be assisted under the program from local sources other than airport revenues;
(C) the community or consortium has established, or will establish, a public-private partnership to facilitate air carrier service to the public;
(D) the assistance will provide material benefits to a broad segment of the travelling public, including business, educational institutions, and other enterprises, whose access to the national air transportation system is limited;
(E) the assistance will be used to help restore scheduled passenger air service that has been terminated;
(F) the assistance will be used in a timely fashion; and
(G) multiple communities cooperate to submit a regional or multistate application to consolidate air service into one regional airport.
(d)Types of Assistance.—The Secretary may use amounts made available under this section—
(1) to provide assistance to an air carrier to subsidize service to and from an underserved airport for a period not to exceed 3 years;
(2) to provide assistance to an underserved airport to obtain service to and from the underserved airport; and
(3) to provide assistance to an underserved airport to implement such other measures as the Secretary, in consultation with such airport, considers appropriate to improve air service both in terms of the cost of such service to consumers and the availability of such service, including improving air service through marketing and promotion of air service and enhanced utilization of airport facilities.
(e)Authority To Make Agreements.—
(1)In general.—The Secretary may make agreements to provide assistance under this section. The Secretary may amend the scope of a grant agreement at the request of the community or consortium and any participating air carrier, and may limit the scope of a grant agreement to only the elements using grant assistance or to only the elements achieved, if the Secretary determines that the amendment is reasonably consistent with the original purpose of the project.
(2)Authorization of appropriations.—There is authorized to be appropriated to the Secretary $10,000,000 for each of fiscal years 2018 through 2023, and $6,092,896 for the period beginning on October 1, 2023, and ending on May 10, 2024, to carry out this section. Such sums shall remain available until expended.
(f)Additional Action.—Under the program established under subsection (a), the Secretary shall work with air carriers providing service to participating communities and major air carriers (as defined in section 41716(a)(2)) serving large hub airports to facilitate joint-fare arrangements consistent with normal industry practice.
(g)Designation of Responsible Official.—The Secretary shall designate an employee of the Department of Transportation—
(1) to function as a facilitator between small communities and air carriers;
(2) to carry out this section;
(3) to ensure that the Bureau of Transportation Statistics collects data on passenger information to assess the service needs of small communities;
(4) to work with and coordinate efforts with other Federal, State, and local agencies to increase the viability of service to small communities and the creation of aviation development zones; and
(5) to provide policy recommendations to the Secretary and Congress that will ensure that small communities have access to quality, affordable air transportation services.
(h)Air Service Development Zone.—The Secretary shall designate an airport in the program as an Air Service Development Zone and work with the community or consortium on means to attract business to the area surrounding the airport, to develop land use options for the area, and provide data, working with the Department of Commerce and other agencies.
(Added Pub. L. 106–181, title II, § 203(a), Apr. 5, 2000, 114 Stat. 92; amended Pub. L. 108–11, title II, § 2708, Apr. 16, 2003, 117 Stat. 601; Pub. L. 108–176, title II, § 225(b)(3), title IV, § 412, Dec. 12, 2003, 117 Stat. 2529, 2551; Pub. L. 110–330, § 5(b), Sept. 30, 2008, 122 Stat. 3718; Pub. L. 111–69, § 5(b), Oct. 1, 2009, 123 Stat. 2055; Pub. L. 111–249, § 5(b), Sept. 30, 2010, 124 Stat. 2628; Pub. L. 112–30, title II, § 205(b), Sept. 16, 2011, 125 Stat. 358; Pub. L. 112–91, § 5(b), Jan. 31, 2012, 126 Stat. 4; Pub. L. 112–95, title IV, § 429, Feb. 14, 2012, 126 Stat. 100; Pub. L. 114–190, title I, § 1102(e), July 15, 2016, 130 Stat. 617; Pub. L. 115–63, title I, § 104(b), Sept. 29, 2017, 131 Stat. 1170; Pub. L. 115–141, div. M, title I, § 104(b), Mar. 23, 2018, 132 Stat. 1047; Pub. L. 115–254, div. B, title IV, § 455, Oct. 5, 2018, 132 Stat. 3349; Pub. L. 118–15, div. B, title II, § 2206(b), Sept. 30, 2023, 137 Stat. 85; Pub. L. 118–34, title I, § 106(b), Dec. 26, 2023, 137 Stat. 1115; Pub. L. 118–41, title I, § 106(b), Mar. 8, 2024, 138 Stat. 23.)

CITE AS: 49 USC 41743

§ 41744. Preservation of basic essential air service at single carrier dominated hub airports
(a)In General.—If the Secretary of Transportation determines that extraordinary circumstances jeopardize the reliable performance of essential air service under this subchapter from a subsidized essential air service community to and from an essential airport facility, the Secretary may require an air carrier that has more than 60 percent of the total annual enplanements at the essential airport facility to take action to enable another air carrier to provide reliable essential air service to that community. Actions required by the Secretary under this subsection may include interline agreements, ground services, subleasing of gates, and the provision of any other service or facility necessary for the performance of satisfactory essential air service to that community.
(b)Essential Airport Facility Defined.—In this section, the term “essential airport facility” means a large hub airport in the contiguous 48 States at which one air carrier has more than 60 percent of the total annual enplanements at that airport.
(Added Pub. L. 106–181, title II, § 204(a), Apr. 5, 2000, 114 Stat. 93; amended Pub. L. 108–176, title II, § 225(b)(4), Dec. 12, 2003, 117 Stat. 2529.)

CITE AS: 49 USC 41744

§ 41745. Community and regional choice programs
(a)Alternate Essential Air Service Pilot Program.—
(1)Establishment.—The Secretary of Transportation shall establish an alternate essential air service pilot program in accordance with the requirements of this section.
(2)Assistance to eligible places.—In carrying out the program, the Secretary, instead of paying compensation to an air carrier to provide essential air service to an eligible place, may provide assistance directly to a unit of local government having jurisdiction over the eligible place or a State within the boundaries of which the eligible place is located.
(3)Use of assistance.—A unit of local government or State receiving assistance for an eligible place under the program may use the assistance for any of the following purposes:
(A) To provide assistance to air carriers that will use smaller equipment to provide the service and to consider increasing the frequency of service using such smaller equipment if the Secretary determines that passenger safety would not be compromised by the use of such smaller equipment and if the State or unit of local government waives the minimum service requirements under section 41732(b).
(B) To provide assistance to an air carrier to provide on-demand air taxi service to and from the eligible place.
(C) To provide assistance to a person to provide scheduled or on-demand surface transportation to and from the eligible place and an airport in another place.
(D) In combination with other units of local government in the same region, to provide transportation services to and from all the eligible places in that region at an airport or other transportation center that can serve all the eligible places in that region.
(E) To purchase aircraft to provide transportation to and from the eligible place or to purchase a fractional share in an aircraft to provide such transportation after the effective date of a rule the Secretary issues relating to fractional ownership.
(F) To pay for other transportation or related services that the Secretary may permit.
(b)Community Flexibility Pilot Program.—
(1)In general.—The Secretary shall establish a pilot program for not more than 10 eligible places or consortia of units of local government.
(2)Election.—Under the program, the sponsor of an airport serving an eligible place may elect to forego any essential air service for which compensation is being provided under this subchapter for a 10-year period in exchange for a grant from the Secretary equal in value to twice the compensation paid to provide such service in the most recent 12-month period.
(3)Grant.—Notwithstanding any other provision of law, the Secretary shall make a grant to each airport sponsor participating in the program for use on any project that—
(A) is eligible for assistance under chapter 471 and complies with the requirements of that chapter;
(B) is located on the airport property; or
(C) will improve airport facilities in a way that would make such facilities more usable for general aviation.
(c)Fractionally Owned Aircraft.—After the effective date of the rule referred to in subsection (a)(3)(E), only those operating rules that relate to an aircraft that is fractionally owned apply when an aircraft described in subsection (a)(3)(E) is used to provide transportation described in subsection (a)(3)(E).
(d)Applications.—
(1)In general.—An entity seeking to participate in a program under this section shall submit to the Secretary an application in such form and containing such information as the Secretary may require.
(2)Required information.—At a minimum, the application shall include—
(A) a statement of the amount of compensation or assistance required; and
(B) a description of how the compensation or assistance will be used.
(e)Participation Requirements.—An eligible place for which compensation or assistance is provided under this section in a fiscal year shall not be eligible in that fiscal year for the essential air service that it would otherwise be entitled to under this subchapter.
(f)Subsequent Participation.—A unit of local government participating in the program under this subsection (a) in a fiscal year shall not be prohibited from participating in the basic essential air service program under this subchapter in a subsequent fiscal year if such unit is otherwise eligible to participate in such program.
(g)Funding.—Amounts appropriated or otherwise made available to carry out the essential air service program under this subchapter shall be available to carry out this section.
(Added Pub. L. 108–176, title IV, § 405, Dec. 12, 2003, 117 Stat. 2544.)

CITE AS: 49 USC 41745

§ 41746. Tracking service
The Secretary of Transportation shall require a carrier that provides essential air service to an eligible place and that receives compensation for such service under this subchapter to report not less than semiannually—
(1) the percentage of flights to and from the place that arrive on time as defined by the Secretary; and
(2) such other information as the Secretary considers necessary to evaluate service provided to passengers traveling to and from such place.
(Added Pub. L. 108–176, title IV, § 407, Dec. 12, 2003, 117 Stat. 2545.)

CITE AS: 49 USC 41746

[§ 41747. Repealed. Pub. L. 112–95, title IV, § 430, Feb. 14, 2012, 126 Stat. 100]

CITE AS: 49 USC 41747

§ 41748. Marketing program
(a)In General.—The Secretary of Transportation shall establish a marketing incentive program for eligible places that receive subsidized service by an air carrier under section 41733. Under the program, the sponsor of the airport serving such an eligible place may receive a grant of not more than $50,000 in a fiscal year to develop and implement a marketing plan to increase passenger boardings and the level of passenger usage of its airport facilities.
(b) Matching Requirement; Success Bonuses—
(1)In general.—Except as provided in paragraphs (2) and (3), not less than 25 percent of the publicly financed costs associated with a marketing plan to be developed and implemented under this section shall come from non-Federal sources. For purposes of this section—
(A) the non-Federal portion of the publicly financed costs may be derived from contributions in kind; and
(B) matching contributions from a State or unit of local government may not be derived, directly or indirectly, from Federal funds, but the use by the State or unit of local government of proceeds from the sale of bonds to provide the matching contribution is not considered to be a contribution derived directly or indirectly from Federal funds, without regard to the Federal income tax treatment of interest paid on those bonds or the Federal income tax treatment of those bonds.
(2)Bonus for 25-percent increase in usage.—Except as provided in paragraph (3), if, after any 12-month period during which a marketing plan has been in effect under this section with respect to an eligible place, the Secretary determines that the marketing plan has increased average monthly boardings, or the level of passenger usage, at the airport serving the eligible place, by 25 percent or more, then only 10 percent of the publicly financed costs associated with the marketing plan shall be required to come from non-Federal sources under this subsection for the following 12-month period.
(3)Bonus for 50-percent increase in usage.—If, after any 12-month period during which a marketing plan has been in effect under this section with respect to an eligible place, the Secretary determines that the marketing plan has increased average monthly boardings, or the level of passenger usage, at the airport serving the eligible place, by 50 percent or more, then no portion of the publicly financed costs associated with the marketing plan shall be required to come from non-Federal sources under this subsection for the following 12-month period.
(Added Pub. L. 108–176, title IV, § 410(b), Dec. 12, 2003, 117 Stat. 2548.)

CITE AS: 49 USC 41748