The Fly America Act requires that air travel paid for with U.S. government funds — including federal grant and cooperative agreement funds, not just direct federal-employee travel orders — be flown on a U.S. flag air carrier, with a narrow set of defined exceptions. It applies whenever a research administrator or traveling researcher books airfare that will be charged, in whole or in part, to a federally sponsored award. Getting it wrong doesn’t just create a paperwork problem: airfare booked in violation of the Act is typically unallowable and must be removed from the award, at the traveler’s or department’s expense, not the sponsor’s.
This guide covers what the Act actually requires, how the “U.S. flag carrier” test works for code-share tickets, the four Open Skies agreements that create a lawful alternative, the recognized exceptions (and the one non-exception people keep assuming exists), what to keep on file, and what happens when a trip is booked wrong.
Last verified 2026-08-16 against 49 U.S.C. § 40118, the Federal Travel Regulation (41 CFR part 301-10, subpart B), and GSA’s Fly America Act guidance. Regulatory text in this area changes rarely; the Open Skies agreement list should be re-checked if you’re reading this more than about a year after the date above.
What the Fly America Act requires
The Fly America Act is codified at 49 U.S.C. § 40118. It requires that a U.S. government department or agency ensure that air transportation of people or property is provided by a certificated U.S. flag air carrier whenever the transportation is paid for by the government, or “from amounts provided for the use of the Government.” That second phrase is why the Act reaches federal grant and cooperative agreement recipients — universities, hospitals, nonprofits — and not only direct federal-employee travel orders: if the airfare is charged to a federal award, the requirement follows the money.
The statute delegates implementing authority to the GSA Administrator. GSA’s implementing regulation is the Federal Travel Regulation (FTR), 41 CFR part 301-10, subpart B, sections 301-10.131 through 301-10.143. That subpart is the actual rulebook a research administrator applies day to day — the statute states the principle, the FTR states the mechanics.
Individual federal sponsors then apply the Act to their own grantees through their own policy documents. NIH does this through the NIH Grants Policy Statement, section 4.1.11. The Act itself is a carrier-selection rule, not a cost-allowability standard — it sits alongside, not inside, the general travel-cost allowability requirements at 2 CFR 200.475 (reasonable, necessary, consistently applied, adequately documented). A trip can satisfy 200.475 in every respect and still have its airfare disallowed for a Fly America Act violation, because they are two separate compliance tests layered on the same purchase.
What counts as a “U.S. flag air carrier”
FTR § 301-10.133 defines U.S. flag air carrier service as transportation provided by a carrier holding a certificate under 49 U.S.C. § 41102. That includes code-share service with a foreign carrier — but only under a specific condition that trips up more travelers than any other part of the Act:
The flight-number rule. A code-share flight only counts as U.S. flag carrier service when the ticket is issued under the U.S. carrier’s own designator code and flight number. If the ticket is issued under the foreign carrier’s code — even for the identical physical aircraft, the identical seat, and the identical route — it does not satisfy the Act. The traveler must look at what code and flight number the ticket itself was issued under, not which airline’s livery is on the plane or which airline actually operates the flight.
In practice: booking through a U.S. carrier’s own website or a travel agency that issues the ticket on a U.S. carrier code (e.g., a United-coded segment operated by a Star Alliance partner) satisfies the Act. Booking the same physical flight through the foreign partner’s code does not, even if the two tickets would put the traveler in the same seat.
The Open Skies agreements
Separately from the code-share rule, the Department of Transportation has determined that four Open Skies air transport agreements meet the Fly America Act’s requirements, creating a lawful basis to book a qualifying foreign carrier under those specific agreements without needing to invoke one of the necessity exceptions below. As of this verification, there are exactly four:
- United States – European Union (signed April 30, 2007)
- United States – Switzerland
- United States – Australia
- United States – Japan
These are confirmed on GSA’s own Fly America Act policy page. FTR § 301-10.134 is the section that ties the Open Skies exception into the regulation, and it requires that DOT have made a specific determination the agreement in question meets Fly America Act requirements — not every bilateral aviation agreement the U.S. has signed qualifies, only these four.
The Department of Defense carve-out
This is the exception to the exception, and it is the single most consequential Open Skies detail for anyone administering a DoD-funded or DoD-adjacent award: Open Skies agreements do not apply to air transportation funded by the Department of Defense. A traveler on DoD funding must use a U.S. flag air carrier under the ordinary rule, regardless of whether the route is covered by the EU, Swiss, Australian, or Japanese Open Skies agreement, unless one of the FTR § 301-10.135 necessity exceptions independently applies. If your institution administers subcontracts or task orders under DoD prime funding, don’t assume an Open Skies booking that would be fine on an NIH or NSF award is automatically fine here — check the prime funding source first.
Recognized exceptions
Outside the Open Skies agreements, FTR §§ 301-10.135 through 301-10.138 define a limited set of “necessity” exceptions — circumstances where a foreign carrier is permitted because U.S. carrier service genuinely can’t do the job. These are the only real exceptions; the regulation is explicit that cost is not among them.
| Exception | What it requires |
|---|---|
| No U.S. carrier service available | A U.S. carrier does not serve the origin/destination city pair at all, or cannot provide the transportation. |
| Unreasonable travel-time increase (nonstop/direct trips) | Using a U.S. carrier would increase scheduled travel time by 24 hours or more compared with the foreign-carrier alternative. |
| Unreasonable travel-time increase (non-nonstop trips) | Using a U.S. carrier would require 2 or more additional aircraft changes outside the U.S., add 6 or more hours to overall travel time, or require a connection of 4 or more hours at an overseas interchange point. |
| Medical necessity | A medical condition documented by competent medical authority requires using a specific foreign carrier or routing. |
| Unreasonable safety risk | Using the U.S. carrier would expose the traveler to an agency-determined, unreasonable risk to safety. |
| Documented threat to the traveler or the U.S. carrier | A U.S. government travel advisory (FAA or State Department) documents a specific security threat. |
| Authorized class of service unavailable | A ticket in the authorized class of service (e.g., the traveler’s approved fare class) cannot be purchased on an available U.S. carrier but can be purchased on a foreign one. |
| Cost is lower on a foreign carrier | Not an exception, under any section of the FTR. This is the single most common mistaken justification research administrators encounter. |
Note that the two “unreasonable travel-time increase” rows are comparative thresholds, not general inconvenience — the traveler (or the office approving the exception) has to actually work out what the U.S.-carrier routing would look like and show it crosses the specific hour/connection thresholds above. A U.S.-carrier routing that’s merely less convenient, with one extra connection under those thresholds, doesn’t qualify.
Decision path: is this booking compliant?
- Is the airfare being charged, in whole or in part, to a federal award or federal funds? If no, the Fly America Act doesn’t apply (though your institution’s own travel policy still might). If yes, continue.
- Is the funding source the Department of Defense (prime award or a DoD-funded subaward)? If yes, skip the Open Skies step below — it doesn’t apply to you — and go straight to step 4.
- Is a U.S. flag carrier available for the full itinerary, either directly or via a code-share ticket issued under the U.S. carrier’s own designator code and flight number? If yes, book it. That satisfies the Act regardless of price, convenience, or which airline actually operates the aircraft.
- Does the route qualify under one of the four Open Skies agreements (EU, Switzerland, Australia, Japan) and is the funding source not DoD? If yes, a qualifying foreign carrier under that agreement is a compliant booking.
- Does one of the FTR § 301-10.135–.138 necessity exceptions genuinely apply (no U.S. service, the specific travel-time thresholds, medical necessity, safety risk, documented threat, or unavailable authorized class)? If yes, document which exception and why, and book the foreign carrier.
- None of the above apply. The foreign-carrier fare is not compliant. Booking it anyway risks the airfare being disallowed from the award.
Documentation to retain
FTR § 301-10.143 places the burden on the traveler and the agency (or, for grantees, the institution’s sponsored programs or travel office) to justify any use of a foreign carrier — it explicitly states that transportation costs are not reimbursed where a foreign carrier was used improperly, and requires agencies to maintain their own internal denial procedures. In practice, keep on file for every foreign-carrier booking charged to a federal award:
- Which specific exception or Open Skies agreement is being relied on, stated affirmatively — not just “no U.S. carrier was convenient.”
- For a “no service available” or travel-time claim: the comparison itself — the U.S.-carrier routing and schedule that was checked, with dates/times, showing the specific threshold that was crossed.
- For a medical-necessity claim: the supporting documentation from competent medical authority.
- For a code-share ticket claimed as U.S. flag service: the ticket or itinerary showing the U.S. carrier’s own designator code and flight number, not just the marketing name shown at booking.
- Confirmation of the funding source and, for anything DoD-related, confirmation that the Open Skies exception was not applied.
This documentation typically lives with the travel authorization or expense report, and is exactly what a sponsor’s post-award financial review or a single audit will ask for if foreign-carrier airfare shows up on an award.
What happens when travel is non-compliant
Under FTR § 301-10.143, a traveler is not reimbursed for transportation costs where a foreign carrier was used in violation of the Act. On a sponsored award, the practical consequence is that the airfare is treated as an unallowable cost and must be removed from the award — it becomes a cost the institution (or, depending on internal policy, the traveler or the PI’s discretionary funds) absorbs, not something the sponsor will pay for after the fact. This is separate from, and in addition to, any general travel-cost allowability issue under 2 CFR 200.475; a Fly America Act violation is disallowed on carrier-selection grounds even if the trip itself was otherwise a reasonable, necessary, well-documented business expense. Institutions typically catch this either before travel (through a required Fly America Act certification or pre-approval step in the travel authorization workflow) or after the fact during expense review, cost transfer, or audit — catching it before ticketing is materially cheaper than unwinding it afterward.
Common mistakes
- Assuming cost is an exception. It isn’t, under any section of the FTR. “The foreign carrier was $400 cheaper” does not justify the booking, no matter how reasonable that sounds to the traveler.
- Booking a code-share ticket under the foreign carrier’s flight number. The physical aircraft and seat can be identical to a compliant booking; what matters is which carrier’s designator code the ticket was actually issued under.
- Applying an Open Skies agreement to DoD-funded travel. The four agreements do not extend to DoD funding sources — this is easy to miss on subawards where the prime sponsor isn’t obvious from the department’s own paperwork.
- Treating “less convenient” as “unreasonable delay.” The travel-time exceptions have specific hour and connection-count thresholds (see the table above); a mildly less convenient U.S.-carrier itinerary that doesn’t cross those thresholds isn’t an exception.
- Booking first and documenting later, or not at all. The burden of justifying a foreign-carrier booking sits with the traveler/institution, not the sponsor — a plausible-sounding but undocumented reason found out only at audit time is a much harder position to defend.
- Assuming a personal-funds reimbursement request is exempt. If the airfare will ultimately be charged to a federal award through a reimbursement, the Act still applies — how the traveler paid up front doesn’t change what the award is ultimately paying for.
Frequently asked questions
Does the Fly America Act apply to all research travel, or only travel paid directly by a federal agency?
It applies whenever the airfare is paid for with federal government funds or funds “provided for the use of” the government — which includes federal grant and cooperative agreement funds administered by a university, hospital, or other recipient institution, not only direct federal-employee travel orders. If the airfare will be charged to a federal award, the Act applies.
Is cost ever a valid reason to book a foreign carrier instead of a U.S. flag carrier?
No. Cost and personal convenience are explicitly not recognized exceptions under any section of 41 CFR part 301-10, subpart B. This is the most common mistaken justification research administrators encounter, and it does not hold up on review or audit.
What exactly is an Open Skies agreement, and how many currently satisfy the Fly America Act?
An Open Skies agreement is a bilateral or multilateral air transport agreement between the U.S. and a foreign government. Not every such agreement satisfies the Fly America Act — only ones DOT has specifically determined meet the Act’s requirements. As of this guide’s verification date, exactly four qualify: the agreements with the European Union, Switzerland, Australia, and Japan.
Does a code-share flight with a U.S. carrier’s partner airline count as U.S. flag carrier service?
Only if the ticket is issued under the U.S. carrier’s own designator code and flight number. A ticket issued under the foreign code-share partner’s code does not satisfy the Act, even for the identical physical flight.
Why doesn’t the Open Skies exception apply to Department of Defense funding?
DoD-funded air transportation is specifically excluded from the Open Skies agreement exception. A traveler on DoD prime or subaward funding must use a U.S. flag carrier unless one of the separate FTR § 301-10.135 necessity exceptions independently applies — the Open Skies route to compliance simply isn’t available on DoD money.
What happens if a grant-funded trip is booked on a non-compliant foreign carrier?
The airfare is typically treated as an unallowable cost and must be removed from the award — the institution, department, or traveler absorbs it rather than the sponsor. This is separate from general travel-cost allowability under 2 CFR 200.475; a Fly America Act violation can disallow airfare that would otherwise have been a perfectly reasonable, well-documented expense.
How is the Fly America Act different from the general travel-cost allowability rules in 2 CFR 200?
The Fly America Act is a carrier-selection rule: it governs which airline you’re allowed to fly. 2 CFR 200.475 is a cost-allowability rule: it governs whether the travel cost overall is reasonable, necessary, and properly documented. They’re independent tests layered on the same purchase — a trip can pass one and fail the other.
