[Federal Register Volume 66, Number 17 (Thursday, January 25, 2001)]
[Notices]
[Pages 7839-7840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2259]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary


Docket Management System (DMS)

AGENCY: Office of the Secretary, DOT.

ACTION: Notice.

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SUMMARY: The Office of Aviation Enforcement and Proceedings issues this 
notice to remind air carriers, foreign air carriers and travel agents 
of the requirements for full fare disclosure in connection with sales 
of air transportation and foreign air transportation on Internet 
websites. The notice specifically reminds the industry that pursuant to 
14 CFR 399.84, as elaborated in Department industry notices and 
enforcement case precedent, so-called ``fuel surcharges'' must be 
included in the fare held out to consumers via the Internet. Failure to 
comply with these requirements violates the cited rule and constitutes 
a deceptive trade practice and an unfair method of competition in 
violation of 49 U.S.C. 41712.

FOR FURTHER INFORMATION CONTACT: Dayton Lehman, Deputy Assistant 
General Counsel, or Nicholas Lowry, Office of Aviation Enforcement and 
Proceedings, U.S. Department of Transportation, 400 7th St., SW., 
Washington, DC 20590. Tel. No. (202) 366-9342.

Prohibition on Deceptive Practices in the Marketing of Airfares to 
the Public Using the Internet; Notice

    This is to remind all airlines, travel agents, and other sellers of 
air transportation that use the Internet to market air transportation 
fares to the public to ensure that the public is not misled about the 
fares being offered, and to point out a particular problem involving 
so-called ``fuel surcharges'' that has come to our attention regarding 
the holding out of fares over the Internet.
    During the past several years, we have disseminated a number of 
notices to the industry addressing a variety of fare advertising 
issues. One of those letters, dated March 18, 1996, noted the increased 
use of the Internet in the sale of air transportation and specifically 
addressed the fact that, just as is the case with the marketing of 
airfares via print media, marketers of airfares using the Internet must 
comply with Department regulations and enforcement precedent with 
respect to their Internet sites. This includes not only adherence to 
the Department's full-fare advertising rule (14 CFR 399.84), but also 
rules and enforcement case precedent in other areas concerning 
deceptive practices, such as disclosure of code-share relationships and 
critical purchase and travel restrictions. That letter, as well as 
other industry letters regarding price advertising, may be reviewed by 
going to the Internet site of the Department's Office of the General 
Counsel at http://www.dot.gov/ost/ogc/index.html.
    Despite this earlier advice, we have discovered a serious problem 
with price advertising on the websites of a number of major airlines 
and large Internet travel agencies. Under 14 CFR 399.84, fare 
advertisements by air carriers or their agents must state the full fare 
charged the consumer. The intent of the rule is to ensure that members 
of the public are given adequate fare information on which to base 
their airline travel purchasing decisions. Failure to state the full 
fare in advertisements, in addition to violating the rule, constitutes 
an unfair and deceptive trade practice and an unfair method of 
competition in violation of 49 U.S.C. 41712.
    The Department has provided interpretive guidance on the rule and, 
through a number of enforcement-related consent orders, has recognized 
certain exceptions to the ``full fare'' advertising standard. In 
accordance with this enforcement case precedent, the Department has 
allowed taxes and fees collected by carriers and other sellers of air 
transportation, such as passenger facility charges (PFCs) and departure 
taxes, to be stated separately in fare advertisements so long as the 
charges are levied by a government entity, are not ad valorem in 
nature, are collected on a per-passenger basis, and their existence and 
amount are clearly indicated in the advertisement so that the consumer 
can determine the full fare to be paid.
    On several websites that we have examined, fare disclosure differs 
according to the search path selected by the consumer. For searches in 
which the consumer specifies a date of travel in the search request, we 
have found that the sites make the disclosures required by section 
399.84. With respect to searches where the consumer indicates no 
preference for travel dates but selects a flexible search, however, we 
have found fare displays with disclosures that are not adequate. More 
specifically, this latter type of search path produces a fare display 
in which a so-called ``fuel surcharge'' is mentioned either (1) in a 
separate screen, under ``more rules,'' or (2) at the bottom of the 
display as a footnote, together with other applicable charges. The 
footnote merely states that a fuel surcharge may apply, and the 
consumer cannot find out whether it in fact does apply to a particular 
purchase until he or she goes to the booking page. Since such ``fuel 
surcharges'' are not government fees imposed on a per-passenger basis, 
their exclusion from the advertised fare and separate display (even 
where the amount is stated) does not fit within the exceptions to the 
full-fare advertising rule recognized in the Department's enforcement 
case precedent. Where these ``fuel surcharges'' (or similar carrier-
imposed surcharges) are listed separately and are not included in the 
basic fare presented to the public, this is deceptive and violates 14 
CFR 399.84. Such listings in other media have led to enforcement action 
in the past.
    Airlines, travel agents, and other sellers of air transportation, 
in order to comply with the Department's fare advertising rule, must 
ensure that any ticket price displayed on their site includes all 
components required by the Department's full fare rule. Non-government 
surcharges and fees, such as fuel surcharges and service fees, as well 
as ad valorem excise taxes, must be included in the stated fare. Other 
charges that under Department case precedent may be legitimately 
excluded from the base fare, such as PFCs, international departure 
taxes collected by a carrier or its agent, and other per-person taxes 
or fees imposed by a government entity, may be noted on a website in a 
prominent link, proximate to the stated fare, that takes the viewer to 
the bottom of the screen, or to a separate screen, where the nature and 
amount of such fees are displayed.
    As noted above, we are aware of a number of sites that do not 
comply with the Department's fare advertising requirements. We have 
already taken or intend to take steps, including enforcement action if 
necessary, to ensure that consumers are not misled and that all 
Internet sites conform to the

[[Page 7840]]

requirements of the Department's fare advertising rule. We urge all 
airlines, travel agents, and other sellers of air transportation to 
ensure that their websites conform to the requirements of the 
Department's advertising rules and enforcement case precedent. We also 
caution airlines that they may be held responsible for the actions of 
their lawful agents, particularly where the carrier's creation of so-
called ``surcharges'' makes violations by their agents more likely and 
carriers have not taken appropriate steps to halt such practices.
    Questions concerning this notice or the applicability of the 
Department's fare advertising rules may be addressed to the Office of 
Aviation Enforcement and Proceedings.
    Thank you for your cooperation on this important issue.

    Dated: January 18, 2001.
Samuel Podberesky,
Assistant General Counsel for Aviation Enforcement and Proceedings.
[FR Doc. 01-2259 Filed 1-24-01; 8:45 am]
BILLING CODE 4910-62-P