Sec. 263.1

Definitions.

263.2 Approval of articles of association relating to participation in Board proceedings.

263.3 Leave for participation of air carrier associations in Board proceedings.

AUTHORITY: The provisions of this Part 263 issued under sec. 204 (a), 72 Stat. 743; 49 U.S.C. 1324. Interpret or apply sections 102, 412, and 1001 of the Federal Aviation Act of 1958, 72 Stat. 740, 770, 788; and section 3(a) of the Administrative Procedure Act, 60 Stat. 238; 49 U.S.C. 1302, 1382, 1481; 5 U.S.C. 1002, except as otherwise noted.

SOURCE: The provisions of this Part 263 contained in ER-272, 24 F.R. 4883, June 16, 1959, except as otherwise noted.

For the purposes of this part:

(a) Air carrier association means an association composed entirely or in part of air carriers which are not exempted from the provisions of section 412 of the act in respect of relationships between one another.

(b) Board proceedings means any proceedings of the Board to which the Board's procedural regulations apply. § 263.2 Approval of articles of association relating to participation in Board proceedings.

The Board considers it adverse to the public interest, and contrary to the policy of the Federal Aviation Act, for an

association created by agreement subject to approval under section 412 of the act, its officers or employees, to participate in Board proceedings unless the articles of association contain provisions approved by the Board authorizing such participation, and the Board upon motion or upon its own initiative grants leave therefor. The Board therefore will approve only such provisions as provide for participation of the association in Board proceedings under the following circumstances:

(1) Where the issues substantially affect the property or financial interests of the association as opposed to an interest derivative from its members;

(2) Where the association acts as a conduit to the Board of factual information gathered from the members, as distinguished from presentation of opinions or positions on issues; or

(3) Where the association represents certain named members at their request and a copy of a resolution authorizing such participation and signed by each such carrier is submitted to the Board.

NOTE: The requirement expressed in this paragraph and paragraph (3) of Section 263.3 shall be deemed fulfilled upon filing with the Board of powers of attorney signed by duly authorized officers of each carrier to be represented by the association in the particular Board proceeding. The air carriers so represented shall become the parties to the proceeding. The participation of the association is limited to acting as attorney-in-fact for such air carriers.

(Interpret or apply sec. 6(a) of the Administrative Procedure Act, 60 Stat. 240; 5 U.S.C. 1005) [ER 272, 24 F.R. 4883, June 16, 1959, as amended by ER-294, 25 F.R. 901, Feb. 3, 1960]

§ 263.3 Leave for participation of air carrier associations in Board proceedings.

An air carrier association, its officers or employees may participate in Board proceedings only if its articles of association or by-laws contain provisions approved by the Board under section 412 of the act authorizing such participation, and if the Board upon motion or upon its own initiative grants leave therefor. Leave ordinarily will be granted under the following circumstances:

(1) Where the issues substantially affect the property or financial interests of the association as opposed to an interest derivative from its members. In passing on motions for formal interven

tion of associations of air carriers in economic adjudicatory proceedings under § 302.15 of the procedural regulations, the Board will be guided by the provisions of this section;

(2) Where the association acts as a conduit to the Board of factual information gathered from the members, as distinguished from presentation of opinions or positions on issues; or

(3) Where the association represents certain named members at their request and a copy of a resolution authorizing such participation and signed by each such carrier is submitted to the Board: Provided, That upon motion of any interested person or upon its own initiative the Board may issue an order requiring the association to withdraw from the case on the ground of significant divergency of interest or position in respect of issues in the proceeding between the members represented and other members of the association.

or within the classification of "International Air Freight Forwarders" established by Part 297 of this chapter.

(b) "Direct air carrier" means any air carrier directly engaged in the operation of aircraft, pursuant to a certificate of public convenience and necessity issued under section 401 of the Act, or pursuant to exemption authority conferred under section 416(b) (other than air carriers under Part 298 of this chapter) or pursuant to interim operating authority under Public Law 86-661, dated July 14, 1960.

(c) "Interlocking relationship" means any of the relationships set forth in section 409 (a) of the Act which are set forth in Appendix I of this part.

(d) "Aircraft manufacturer" means any person engaged in the design and final fabrication of an integrated, major assembly or subassembly who:

(1) Makes civil aircraft, or engines and propellers for use therewith, or

(2) Makes any appliances (as that term is defined in section 101(11) of the Federal Aviation Act of 1958, as amended) for use aboard civil aircraft and whose sales of such appliances to any air carrier with whom it has an interlocking relationship exceed $100,000 at any time during a calendar year.

(e) "Affiliated" means a relationship wherein a person engaged in a phase of aeronautics or a common carrier directly or indirectly (1) is controlled by an air carrier; (2) controls an air carrier; (3) is under common control with an air carrier; or (4) where the power to exercise such control presently exists.

§ 287.2 Exemption of indirect air carriers with respect to certain interlocking relationships.

Subject to the other provisions of this part, indirect air carriers are hereby relieved from the provisions of section 409 (a) of the Act and Part 251 of this chapter with respect to any interlocking relationship between any such air carrier and, respectively:

(a) Air taxi operators as defined in Part 298 of this chapter;

(b) Any indirect surface common carrier not affiliated, directly or indirectly, with any direct surface common carrier except those covered by paragraph (c) of this section;

(c) Any direct surface common carrier who operates only intrastate routes or whose certificated interstate routes can be encompassed within the geo

graphic area of any arbitrarily centered circle having a radius of 50 miles or less which can be drawn; and

(d) Any person engaged in a phase of aeronautics otherwise than as an air carrier, but not

(1) Foreign air carriers,

(2) Persons engaged in either private or common carriage by air for compensation or hire, who are not subject to Board regulation as statutory "air carriers," and

(3) Persons whose principal business is the holding of stock in, or control of, any other person engaged in any phase of aeronautics to whom the exemption provided by this paragraph does not apply.

(e) Any

surface common carrier

which is engaged only in pipeline or communications operations or in the transportation of passengers.

Provided, however, That no exemption conferred by this section shall extend to a relationship with respect to any common carrier or person engaged in a phase of aeronautics which is, directly or indirectly, affiliated with any air carrier unless such affiliation has previously been expressly authorized by the Board by approval under section 408 of the Act, or by exemption therefrom, and is currently so authorized.

§ 287.3

Exemption of direct air carriers with respect to certain interlocking relationships.

Subject to the other provisions of this part, direct air carriers are hereby relieved from the provisions of section 409 (a) of the Act and Part 251 of the Economic Regulations with respect to any interlocking relationship between any such air carrier and, respectively:

(a) Any surface common carrier which is engaged only in pipeline or communications operations;

(b) Any surface common carrier which is engaged only in local transit operations by providing street, railway or bus transportation (except for airport limousines) for passengers and has certifcated or franchised routes which can be encompassed within the geographic area of any arbitrarily centered circle having a radius of 50 miles or less which can be drawn;

(c) Any surface common carrier which is engaged only in the transportation of cargo by motor vehicle, rail or water and which operates only intrastate routes or whose certificated interstate routes can

be encompassed within the geographic area of any arbitrarily centered circle having a radius of 50 miles or less which can be drawn; and

(d) Any persons engaged in any phase of aeronautics otherwise than as an air carrier, except

(1) Foreign air carriers, travel or ticket agents,

(2) Aircraft manufacturers,

(3) Persons engaged in private or common carriage by air, for compensation or hire, who are not subject to Board regulation as statutory "air carriers", and persons whose principal business is the holding of stock in, or control of, any other person engaged in any phase of aeronautics to whom the exemption provided by this paragraph does not apply. Provided, however, That no interlocking relationship shall be exempted under this paragraph if the transactions between the air carrier and the person engaged in any phase of aeronautics involved exceed $100,000 at any time during a calendar year, excluding transactions involving the furnishing of transportation service by an air carrier pursuant to tariff rates duly filed with the Board and published. For the purpose of determining whether the qualifying conditions specified in paragraphs (a), (b), and (c) of this section are met, both the operations of the surface carrier's own system and those of its subsidiaries or parent companies shall be considered. Furthermore, any direct air carrier, which has been exempted under the provisions of this paragraph, shall use reasonable diligence in determining when the $100,000 limit specified in § 287.1(d) or paragraph (d) of this section has been exceeded.

Provided, further, That no exemption conferred by this section shall extend to a relationship with respect to any common carrier or person engaged in a phase of aeronautics which is, directly or indirectly, affiliated with any air carrier unless such affiliation has previously been expressly authorized by the Board by approval under section 408 of the Act, or by exemption therefrom, and is currently so authorized.

§ 287.4 Approval of certain interlocking relationships.

To the extent that any officer, director or member of an air carrier, or stockholder holding a controlling interest in an air carrier (or the representative or

nominee of any such person) would, without prior approval of the Board, be in violation of any provision of section 409 (a) of the Act, by reason of any interlocking relationship directly involving such air carrier which has been exempted under this part, such relationship is hereby approved for the duration of such exemption.

§ 287.5 Termination of exemptions and

approvals.

Any exemption and approval granted by this part may be terminated by the Board at any time, after notice and opportunity to submit written views and data, when the Board finds that the continuance of such exemption and approval will adversely affect the public interest.

§ 287.6 Effect of exemption on antitrust laws.

The exemption and approval granted herein shall not constitute an order made under section 409(a) of the Act within the meaning of section 414 of the Act and shall not confer any immunity or relief from operation of the "antitrust laws" or any other statute (except the Federal Aviation Act of 1958, as amended) with respect to any interlocking relationship otherwise within the purview of said section 409(a).

§ 287.7 Effect of exemption on existing interlocking relationships.

The exemption and approval granted by this Part shall supersede any approval (including any conditions thereto) previously granted by the Board in respect to a specific interlocking relationship when the following conditions obtain:

(a) The air carrier concerned has furnished written notice to the Board of its election to invoke the provisions of this section with respect to such interlocking relationship, and

(b) The circumstances surrounding such interlocking relationship fully meet the conditions specified in this part, and

(c) A period of 90 days after the date of such written notice has elapsed during which the Board has not notified the air carrier concerned, in writing, that it does not wish to make the exemption and approval conferred by this part retroactively effective with respect to such interlocking relationship.

APPENDIX I

SEC. 409. [72 Stat. 768, 49 U.S.C. 1379]. (a) It shall be unlawful, unless such rela

tionship shall have been approved by order of the Board upon due showing, in the form and manner prescribed by the Board, that the public interest will not be adversely affected thereby

(1) For any air carrier to have and retain an officer or director who is an officer, director, or member, or who as a stockholder holds a controlling interest, in any other person who is a common carrier or is engaged in any phase of aeronautics.

(2) For any air carrier, knowingly and willfully, to have and retain an officer or director who has a representative or nominee who represents such officer or director as an officer, director, or member, or as a stockholder holding a controlling interest, in any other person who is a common carrier or is engaged in any phase of aeronautics.

(3) For any person who is an officer or director of an air carrier to hold the position of officer. director or member, or to be a stockholder holding a controlling interest, or to have a representative or nominee who represents such person as an officer, director, or member, or as a stockholder holding a controlling interest, in any other person who is a common carrier or is engaged in any phase of aeronautics.

(4) For any air carrier to have and retain an officer or director who is an officer, director, or member, or who as a stockholder holds a controlling interest, in any person whose principal business, in purpose or in fact, is the holding of stock in, or control of, any other person engaged in any phase of aeronautics.

(5) For any air carrier, knowingly and willfully, to have and retain an officer or director who has a representative or nominee who represents such officer or director as an officer, director, or member, or as a stockholder holding a controlling interest, in any person whose principal business, in purpose or in fact, is the holding of stock in, or control of, any other person engaged in any phase of aeronautics.

(6) For any person who is an officer or director of an air carrier to hold the position of officer, director, or member, or to be a stockholder holding a controlling interest, or to have a representative or nominee who represents such person as an officer, director, or member, or as a stockholder holding a controlling interest, in any person whose principal business, in purpose or in fact, is the holding of stock in, or control of, any other person engaged in any phase of aeronautics.

"Act" means the Federal Aviation Act of 1958, as amended.

"Air carrier" means a citizen of the United States holding economic operating authority to engage in air transportation as a direct air carrier with large aircraft, other than the authority conferred by this part.

"Large aircraft" means an aircraft of more than 12,500 pounds certificated maximum take-off weight.

"MATS" means the Military Air Transport Service.

"North Pacific routing" means a route between a point in the 48 contiguous States and Japan via Alaska.

"Short-notice MATS charter service" means foreign and overseas air transportation, and air transportation between the 48 contiguous States on the one hand and the State of Hawaii or Alaska on the other hand, in planeload lots of persons and/or property pursuant to civil augmentation contracts with MATS whereunder the first flight under an award occurs not more than 3 weeks after the date established by MATS for the submission of proposals by the air carriers and all flights are to be performed within 30 days of the first flight: Provided, That MATS traffic only is carried on such flights.

"Substitute service" means the performance by an air carrier of foreign or overseas air transportation, or air transportation between the 48 contiguous States, on the one hand, and the State of Alaska or Hawaii, on the other hand, in planeload lots pursuant to an agree

ment with another air carrier to fulfill such other air carrier's contractual obligation to perform such air transportation for MATS and when the performance of such air transportation is not to take place during a period longer than 3 weeks.

"Supplemental air carrier” means an air carrier deriving its operating authority from either an interim certificate or interim authority issued pursuant to section 7 of Public Law 87-528 or a certificate of public convenience and necessity for supplemental air transportation issued pursuant to section 401(d)(3) of the Act.

All terms defined in the Act and not otherwise defined in this part are used in the sense of their statutory definitions. § 288.2 Applicability.

This part applies to substitute service and short-notice MATS charter service by air carriers holding economic authority from the Board to provide air transportation of persons and/or property by the use of large aircraft and which have contractually committed their CRAF aircraft to the Department of Defense: Provided, That, in the case of short-notice MATS charter service, the award contains or is accompanied by a written statement of the military establishment that such award is for transportation necessary to fulfill unforeseen military requirements as to which time is of the essence.

(a) Subject to the provisions of this part and the conditions imposed, air carriers holding authority from the Board to engage in air transportation of persons and/or property by the use of large aircraft and which have contractually committed their CRAF aircraft to the Department of Defense are hereby exempted from the following provisions of Title IV of the Federal Aviation Act of 1958, as amended, and the Board's Economic Regulations: Section 403 of the Act; Part 221 of the regulations.

(b) Subject to the provisions of this part and the conditions imposed, air carriers, other than supplemental air carriers, holding authority from the Board to engage in air transportation of persons and/or property by the use of large aircraft and which have contrac