Fly America Act

Subject: Freight & Transportation

Source: FAR

FAR Part: FAR 47

DFAR Part:

Policy

The Fly America Act was enacted in 1974. FAR 47.402 implements the policy of the Fly America Act, which states, Federal employees and their dependents, consultants, contractors, grantees, and others must use U.S.-flag air carriers for U.S. Government-financed international air travel and transportation of their personal effects or property, if available (Section 5 of the International Air Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. 40118) (Fly America Act)). In essence, the Fly America Act requires all international air travel paid for with federal funds to be performed by U.S. air carriers to the maximum extent possible.

All air travel and cargo transportation services funded by the federal government are required to use a "U.S. flag" air carrier service. You can find a complete list of certified U.S. flag air carriers on transportation.gov.

This requirement applies to:

• Federal government employees and their dependents;

• Consultants, contractors, and grantees; and

• Other travelers whose travel is paid for by the federal government.

You cannot cross the U.S. border to use a foreign airline to avoid being subject to the Fly America Act. If your travel does not comply with the Fly America Act, the government will not reimburse your airline ticket.

Authority for the Fly America Act comes from 49 U.S.C. 40118.

Under FAR 47.403-1, ) If a U.S.-flag air carrier cannot provide the international air transportation needed or if the use of U.S.-flag air carrier service would not accomplish an agency’s mission, foreign-flag air carrier service may be deemed necessary.

Code Sharing Arrangements

Occasionally, two or more airlines will "codeshare" a flight by publishing and marketing the same flight under their own airline designators and flight numbers. You can purchase a seat on each airline’s designator and flight number, but the flight is only operated by one of the cooperating airlines. To comply with Fly America regulations, you must purchase the flight via the U.S. airline’s designator and flight number if the flight is shared between a U.S. and a foreign airline.

For code sharing agreements, a code-share flight is one in which the air carrier has a code sharing agreement with a foreign based carrier. For instance, United Airlines (UA) may have an agreement with British Airways (BA) or Virgin Atlantic (VA). In this case, the requirements are met if the ticket is designated as a UA flight, although the traveler may actually be traveling on BA. The key is that the designator code identifying the flight, is a U.S. Flag carrier such as UA.

Exceptions to the Fly America Act

There are some circumstances where it’s not reasonable to use a U.S. flag air carrier, and you can make an exception to the Fly America Act. These circumstances are:

1. When a U.S. air carrier is not available.

2. When using a U.S. carrier service would extend the travel time by 24 hours or more.

3. When a U.S. carrier does not offer a nonstop or direct flight between origin and destination, and using a U.S. carrier:

• Increases the number of aircraft changes outside the United States by two or more;
• Extends travel time by six hours or more; or
• Requires a connecting time of four hours or more at an overseas interchange point.

4. When the flight time from origin to destination is less than three hours and using a U.S. flag carrier doubles the flight time.

5. When there is an applicable Open Skies Agreement in effect that meets the requirements of the Fly America Act.

The exceptions provided by the Open Skies [Authors Note: Open Skies are different that Code Sharing] Agreements for government-funded travel do not apply if your transportation is funded by the Department of Defense (DOD).

Note: Ticket cost and convenience are NOT exceptions to the Fly America Act. Bold text

Airline Open Skies Agreements

The Fly America Act does not prohibit travel on carriers associated with nations that have a "bilateral or multilateral agreement" with the United States; however, travelers must complete a declaration that such an agreement exists. Because rapidly expanding [Open Skies][1] agreements are considered qualifying "bilateral or multilateral agreement[s]", the provisions of the Fly America Act are less restrictive than in the past. A full list of Open Skies partners is available from the U.S. State Department [2]

"Open Skies Agreements" are bilateral or multilateral agreements between the U.S. Government and the governments of foreign countries that allow travelers to use foreign air carriers from these countries for government-funded international travel. Many Open Skies Agreements exist but only (4) four agreements meet Fly America Act requirements which the key factor is the statement for "U.S. Government Procured Transportation: in either the Article or Annex of the agreement.

The United States currently has Open Skies Agreements in effect with:

• European Union (28 countries) (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, including Iceland and Norway)

• Australia

• Switzerland

• Japan

The agreement with the European Union (EU) permits the use of an EU air carrier for travel outside the United States. Iceland and Norway are not EU members, but are members of the EU air treaty. This is the only one of these four agreements that allows for an origin or destination in a third country as long as the flight stops in the EU.

Note: As of January 1, 2021, The United Kingdom (U.K.) is no longer a member of the EU. Consequently, the Open Skies Agreement with the EU does not pertain to the U.K. Travelers must use a U.S. Flag Carrier to travel from the U.S. to the U.K. and not a U.K. airline (e.g., British Airways), unless they use a different Fly America Act exception. Travelers may continue to use an EU agreement for travel from the U.S. to the U.K. as long as the flight stops in the EU prior to arrival in the U.S. or the U.K.

What do you need to do?

First, you need to understand whether or not the contracts awarded to your business contain FAR 52.247-63 which implements the Fly America Act. Understand (see exemptions below) that certain types of procurements and awards will not contain the Fly America Act.

If you are flying internationally charging direct to a contract that contains the contract clause, then you need to ensure that all flights, where possible, are on U.S. air carriers or foreign air carriers that code share with a U.S. air carrier. You must either document that a U.S. air carrier is not available, or that you flew on an air carrier that is a U.S. air carrier, or one that either has a code sharing arrangement, or an airline Open Skies Agreement.

If you are charging to an indirect cost objective, flying internationally, you must be aware that the Cost Principles, FAR 31, (See Travel Costs) requires that you fly the lowest price airfare. This is the principle to follow regarding indirect travel. One needs to look at the requirements under FAR 31 - Cost Principles, and follow those requirements when travel is not specific to a contract which contains the Fly America ontract clause. These are the principles that dictate the allowability of costs that are otherwise not dictated by contract clauses.

FAR Contract Clause that implements the Requirement

FAR_52.247-63_-_Preference_for_U.S.-Flag_Air_Carriers (this is a link) implements the requirements of the Fly America Act. As this is a contract clause, the understanding is this is a contract requirement, and as such applies to direct travel. Please see the link above for the contract clause.

Exemptions

This clause does not apply to contracts awarded using the simplified acquisition procedures in FAR Part 13 or contracts for commercial items (see FAR Part 12). It also does not apply to contracts that were awarded competitevly, as cost and pricing data was not utilized in the award of the contract. A fair and reasonable price is assumed under the concept of competition.

Disallowance of Expenditures

• (a) Agencies shall disallow expenditures for U.S. Government-financed commercial international air transportation on foreign-flag air carriers unless there is attached to the appropriate voucher a memorandum adequately explaining why service by U.S.-flag air carriers was not available, or why it was necessary to use foreign-flag air carriers.

• (b) When the travel is by indirect route or the traveler otherwise fails to use available U.S.-flag air carrier service, the amount to be disallowed against the traveler is based on the loss of revenues suffered by U.S.-flag air carriers as determined under the following formula, which is prescribed and more fully explained in 56 Comp. Gen. 209 (1977):

• (c) The justification requirement is satisfied by the contractor’s use of a statement similar to the one contained in the clause at 52.247-63, Preference for U.S.-Flag Air Carriers. (See 47.405.)

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Joint Travel Regulations

http://www.govcwiki.org/index.php?title=File:Joint_Travel_Regulations.PDF

Please see Paragraph 020206.

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Title 41 Code of Federal Regulations (CFR) 301.10.130 - .143

Use of United States Flag Air Carriers

Source:FTR Amdt. 74, 63 FR 63419, Nov. 13, 1998, unless otherwise noted.

§ 301-10.131 What does United States mean?

For purposes of the use of United States flag air carriers, United States means the 50 states, the District of Columbia, and the territories and possessions of the United States (49 U.S.C. 40102).

§ 301-10.132 Who is required to use a U.S. flag air carrier?

Anyone whose air travel is financed by U.S. Government funds, except as provided in § 301–10.135, §§ 301–10.136, and 301–10.137.

§ 301-10.133 What is a U.S. flag air carrier?

An air carrier which holds a certificate under 49 U.S.C. 41102 but does not include a foreign air carrier operating under a permit.

§ 301-10.134 What is U.S. flag air carrier service?

U.S. flag air carrier service is service provided on an air carrier which holds a certificate under 49 U.S.C. 41102 and which service is authorized either by the carrier's certificate or by exemption or regulation. U.S. flag air carrier service also includes service provided under a code share agreement with a foreign air carrier in accordance with Title 14, Code of Federal Regulations when the ticket, or documentation for an electronic ticket, identifies the U.S. flag air carrier's designator code and flight number.

§ 301-10.135 When must I travel using U.S. flag air carrier service?

You are required by 49 U.S.C. 40118, commonly referred to as the “Fly America Act,” to use U.S. flag air carrier service for all air travel funded by the U.S. Government, except as provided in §§ 301–10.136 and 301–10.137 or when one of the following exceptions applies:

• (a) Use of a foreign air carrier is determined to be a matter of necessity in accordance with § 301–10.138; or

• (b) The transportation is provided under a bilateral or multilateral air transportation agreement to which the United States Government and the government of a foreign country are parties, and which the Department of Transportation has determined meets the requirements of the Fly America Act.

• • (1) Information on bilateral or multilateral air transportation agreements impacting United States Government procured transportation can be accessed at https://www.gsa.gov/openskies; and

• • (2) If determined appropriate, GSA may periodically issue FTR Bulletins providing further guidance on bilateral or multilateral air transportation agreements impacting United States Government procured transportation. These bulletins may be accessed at https://www.gsa.gov/ftrbulletins.

• (c) You are an officer or employee of the Department of State or the United States Agency for International Development, and your travel is paid with funds appropriated to one of these agencies, and your travel is between two places outside the United States; or

• (d) No U.S. flag air carrier provides service on a particular leg of the route, in which case foreign air carrier service may be used, but only to or from the nearest interchange point on a usually traveled route to connect with U.S. flag air carrier service; or

• (e) A U.S. flag air carrier involuntarily reroutes your travel on a foreign air carrier; or

• (f) Service on a foreign air carrier would be three hours or less, and use of the U.S. flag air carrier would at least double your en route travel time; or

• (g) When the costs of transportation are reimbursed in full by a third party, such as a foreign government, international agency, or other organization.

[FTR Amdt. 74, 63 FR 63419, Nov. 13, 1998, as amended by FTR Amdt. 2009–02, 74 FR 2397, Jan. 15, 2009; 85 FR 39848, July 2, 2020]

§ 301-10.136 What exceptions to the Fly America Act requirements apply when I travel between the United States and another country?

The exceptions are:

• (a) If a U.S. flag air carrier offers nonstop or direct service (no aircraft change) from your origin to your destination, you must use the U.S. flag air carrier service unless such use would extend your travel time, including delay at origin, by 24 hours or more.

• (b) If a U.S. flag air carrier does not offer nonstop or direct service (no aircraft change) between your origin and your destination, you must use a U.S. flag air carrier on every portion of the route where it provides service unless, when compared to using a foreign air carrier, such use would:

• • (1) Increase the number of aircraft changes you must make outside of the U.S. by 2 or more; or

• • (2) Extend your travel time by at least 6 hours or more; or

• • (3) Require a connecting time of 4 hours or more at an overseas interchange point.

§ 301-10.137 What exceptions to the Fly America Act requirements apply when I travel solely outside the United States, and a U.S. flag air carrier provides service between my origin and my destination?

You must always use a U.S. flag carrier for such travel, unless, when compared to using a foreign air carrier, such use would:

• (a) Increase the number of aircraft changes you must make en route by 2 or more; or

• (b) Extend your travel time by 6 hours or more; or

• (c) Require a connecting time of 4 hours or more at an overseas interchange point.

§ 301-10.138 In what circumstances is foreign air carrier service deemed a matter of necessity?

• (a) Foreign air carrier service is deemed a necessity when service by a U.S. flag air carrier is available, but

• • (1) Cannot provide the air transportation needed; or

• • (2) Will not accomplish the agency's mission.

• (b) Necessity includes, but is not limited to, the following circumstances:

• • (1) When the agency determines that use of a foreign air carrier is necessary for medical reasons, including use of foreign air carrier service to reduce the number of connections and possible delays in the transportation of persons in need of medical treatment; or

• • (2) When use of a foreign air carrier is required to avoid an unreasonable risk to your safety and is approved by your agency (e.g., terrorist threats). Written approval of the use of foreign air carrier service based on an unreasonable risk to your safety must be approved by your agency on a case by case basis. An agency determination and approval of use of a foreign air carrier based on a threat against a U.S. flag air carrier must be supported by a travel advisory notice issued by the Federal Aviation Administration and the Department of State. An agency determination and approval of use of a foreign air carrier based on a threat against Government employees or other travelers must be supported by evidence of the threat(s) that form the basis of the determination and approval; or

• • (3) When you cannot purchase a ticket in your authorized class of service on a U.S. flag air carrier, and a seat is available in your authorized class of service on a foreign air carrier.

[FTR Amdt. 74, 63 FR 63419, Nov. 13, 1998, as amended by FTR Amdt. 2007–05, 72 FR 61537, Oct. 31, 2007]

§ 301-10.139 May I travel by a foreign air carrier if the cost of my ticket is less than traveling by a U.S. flag air carrier?

No. Foreign air carrier service may not be used solely based on the cost of your ticket.

§ 301-10.140 May I use a foreign air carrier if the service is preferred by or more convenient for my agency or me?

No. You must use U.S. flag air carrier service, unless you meet one of the exceptions in § 301–10.135, § 301–10.136, or § 301–10.137 or unless foreign air carrier service is deemed a matter of necessity under § 301–10.138.

§ 301-10.141 Must I provide any special certification or documents if I use a foreign air carrier?

Yes, you must provide a certification, as required in § 301–10.142 and any other documents required by your agency. Your agency cannot pay your foreign air carrier fare if you do not provide the required certification.

[FTR Amdt. 74, 63 FR 63419, Nov. 13, 1998, as amended by FTR Amdt. 108, 67 FR 57964, Sept. 13, 2002]

§ 301-10.142 What must the certification include?

The certification must include:

• (a) Your name;

• (b) The dates that you traveled;

• (c) The origin and the destination of your travel;

• (d) A detailed itinerary of your travel, name of the air carrier and flight number for each leg of the trip; and

• (e) A statement explaining why you met one of the exceptions in § 301–10.135, § 301–10.136, or § 301–10.137 or a copy of your agency's written approval that foreign air carrier service was deemed a matter of necessity in accordance with § 301–10.138.

§ 301-10.143 What is my liability if I improperly use a foreign air carrier?

You will not be reimbursed for any transportation cost for which you improperly use foreign air carrier service. If you are authorized by your agency to use U.S. flag air carrier service for your entire trip, and you improperly use a foreign air carrier for any part of or the entire trip (i.e., when not permitted under this regulation), your transportation cost on the foreign air carrier will not be payable by your agency. If your agency authorizes you to use U.S. flag air carrier service for part of your trip and foreign air carrier service for another part of your trip, and you improperly use a foreign air carrier (i.e., when neither authorized to do so nor otherwise permitted under this regulation), your agency will pay the transportation cost on the foreign air carrier for only the portion(s) of the trip for which you were authorized to use foreign air carrier service. The agency must establish internal procedures for denying reimbursement to travelers when use of a foreign air carrier was neither authorized nor otherwise permitted under this regulation.