Number 265 - Reporting Revenues and Expenses For Wet-Lease Operations
Department of Transportation, Bureau of Transportation Statistics, Office of Airline Information
Issue Date: 11/29/02
Effective Date: 10/1/02
On July 30, 2002, the Bureau of Transportation Statistics (BTS) published in the Federal Register (67 FR 49217) a final rule that revises the reporting of air carrier traffic and capacity data by nonstop segment and on-flight market. A copy of this rule was sent to affected air carriers with Accounting and Reporting Directives No. 261 Final Rule - Changes to T-100 and T-100(f) Traffic Reporting Systems, which was issued on August 27, 2002.
One of the reporting changes in the final rule revises how air carriers report joint service operations. Traffic data applicable to joint service operations are now reported by the operating air carrier, which is the air carrier in operational control of the aircraft, that is, the air carrier that uses its flight crew to perform the flight operation.
This directive supplements the reporting guidance provided in Directive No. 261 by addressing the proper financial accounting treatment for joint service operations. The reporting of the operating revenues and expenses associated with joint service operations follows the reporting of the traffic statistics. Therefore, in a wet-lease operation, the carrier whose flight crew is in operational control of the flight (wet-lease lessor) will report both the traffic statistics for the flight operation and the associated operating revenues and expenses, which will be reported as transport revenues and expenses. Conversely, the carrier that provides service with wet-leased aircraft (wet-lease lessee) will not report the traffic statistics for the flight operation, but will report, as transport-related, the revenues and expenses associated with the wet-lease of the aircraft.
If you have any question regarding this directive, please contact either Clay Moritz on (202) 366-4385 or Bernie Stankus on (202) 366-4387. Both individuals can also be contacted by e-mail at firstname.lastname@example.org(link sends e-mail) and email@example.com(link sends e-mail), respectively.
This action is taken under authority delegated in 14 CFR Part 385.19(b) of the Departments Organizational Regulations.
Donald W. Bright