14 CFR Part 382 Nondiscrimination on the Basis of Disability in Air Travel (Air Carrier Access Act): Preamble and Section-by-Section Analysis (with amendments issued through July 2010)

B. Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an agency to review regulations to assess their impact on small entities unless the agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities. A direct air carrier or a foreign carrier is a small business if it provides air transportation only with small aircraft (i.e., aircraft with up to 60 seats/18,000 pound payload capacity). See 14 CFR 399.73. Our analysis identified 338 small businesses potentially affected by the requirements of the final rule.

We project that about 30 small foreign carriers would incur costs related to boarding equipment (small U.S. carriers already are subject to this requirement). These costs represent a total present value ranging from $1.161 million to $2.245 million, or from $39,000 to $75,000 per carrier, almost entirely in the first two years. When more than one small carrier uses the same airport, however, a sharing arrangement may be more efficient. The affected airlines are, it should be noted, the larger small carriers, those which use aircraft with more than 19 seats and which serve a greater number of airports.

Both small U.S. and small foreign carriers would incur costs related to training. We project that U.S. carriers would need to provide two hours of training to each of their employees with respect to new requirements concerning oxygen and deaf and hard-of-hearing passengers. On this assumption, the present value of training costs would be $2.6 million or $7,738 for each of the 338 carriers affected by the rule.

Our analysis estimates that training costs for foreign carriers would amount to a present value of $0.8 million to $1.6 million over 20 years. Assuming the number of carriers affected to be 30, the cost would be $27,000 to $54,000 per carrier.

With small carriers handling 2.8 percent of the estimated medical oxygen reservations at a cost of $25 each, we would project small carrier costs as being a total present value of $5.4 million, or $16,000 per carrier. This figure is probably overstated, because many small carriers are affiliated with larger airlines that process reservations for them.

Following the line of argument adopted throughout Department’s overall regulatory evaluation, these costs should be offset by an expected increase in the number of PWDs willing and able to fly on small carriers.

We note that, while we have examined the effects of the rule on small foreign as well as small U.S. carriers, the Regulatory Flexibility Act does not apply to foreign entities. On the basis of this examination, the Department certifies that this rule will not have a significant economic impact on a significant number of small entities.