49 U.S.C. § 41737 — Compensation guidelines, limitations, and claims

(a) Compensation Guidelines. The Secretary of Transportation must write guidelines for setting airline pay rates under this subchapter. These guidelines decide the fair amount needed to keep air service running. The guidelines must do five things. First, cut payments when an airline doesn't provide the service it promised. Second, factor in money an airline needs to promote and market the service so more people use it. Third, base costs on what it typically costs airlines to fly passengers, cargo, and mail on the type of plane the Secretary thinks fits the route. Fourth, let the Secretary offer bonus money to airlines that improve service -- for example, better on-time performance, fewer cancelled flights, fairer prices (including combined fares beyond the hub), better connections beyond hub airports, and more marketing. Fifth, let the Secretary sign long-term contracts with airlines when that serves the public interest. Any promotional money described above must be tracked as its own separate part of the payment. (b) Required Finding. The Secretary can only pay an airline if the Secretary first finds that the airline can reliably provide the service. (c) Claims. When an airline files a written claim for payment, the Secretary has 15 days to either pay the government's share or deny it. If the Secretary denies the claim, the Secretary must tell the airline why. (d) Authority To Make Agreements and Incur Obligations. The Secretary can sign contracts and commit money from the Airport and Airway Trust Fund to pay for this program. Once signed, these agreements are binding promises by the government to pay its share. (e) Adjustments to Account for Significantly Increased Costs. If airline costs jump a lot, the Secretary can raise payment rates without following the usual rules for renegotiating contracts or giving notice. If costs later drop back down to what they were before the increase, the Secretary can reverse the raise, again without the usual renegotiation or notice rules. "Significantly increased costs" means total costs per unit rise by 10% or more compared to what the payment rate assumed, based on the airline's own audited financial records, and the increase must last at least two consecutive months.