[Federal Register Volume 68, Number 176 (Thursday, September 11, 2003)]
[Notices]
[Pages 53628-53629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23185]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary


Disclosure of Additional Fees, Charges and Restrictions on Air 
Fares in Advertisements, Including ``Free'' Airfares

    This notice is intended to give further guidance to air carriers 
and other sellers of air transportation on how those additional taxes, 
fees, and restrictions that are permitted to be listed separately from 
a fare quotation may be disclosed in advertisements.\1\ This guidance 
will be used by the Office of Aviation Enforcement and Proceedings in 
its compliance and enforcement activities associated with 14 CFR 
399.84, the Department's full fare advertising rule, and 49 U.S.C. 
41712, which prohibits unfair and deceptive practices.
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    \1\ See earlier guidance, most recently the notice dated January 
18, 2001, as well as earlier notices, available at http://airconsumer.ost.dot.gov/rules.htm.
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    As permitted by Department rules, interpretive guidance, and 
enforcement case precedent, advertisements of air fares frequently do 
not state the full price charged the consumer, but instead quote a base 
fare and break out the fees and taxes that are permitted to be 
separately stated.\2\ Substantial restrictions that apply to the 
advertised fare, which must be disclosed under Department rules and 
case precedent, are also generally listed separately. We are concerned 
that, in some instances, including in print advertisements, the notice 
of separately stated fees and restrictions is not adequate to alert 
consumers to the existence and nature

[[Page 53629]]

of such material factors affecting the advertised fare.
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    \2\ While 14 CFR 399.84 requires that any advertisement of an 
air fare which quotes a price must state the full price to be 
charged the consumer, a number of exceptions have been recognized in 
the Department's enforcement case precedent and in advisory letters 
to the industry. For example, the Department has allowed taxes and 
fees collected by carriers and other sellers of air transportation 
to be stated separately in fare advertisements so long as the 
charges are levied by a government entity, are not ad valorem in 
nature, and are collected on a per-passenger basis (e.g., passenger 
facility charges and departure taxes). The existence and amount of 
these additional charges, however, must be clearly indicated in the 
advertisement so that the consumer can determine the full fare to be 
paid.
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    Where an advertised fare is not the full fare, the advertisement 
should clearly indicate the existence and amount of the excluded 
charges through a description in reasonably close placement and of a 
reasonable size in relation to the quoted fare. The description should 
be easily seen and convey to the consumer the fact that additional 
taxes and fees apply.
    We have also recently seen a proliferation of print, Internet, and 
billboard advertisements promoting ``free'' air transportation in 
conjunction with the purchase of one or more other tickets, but without 
adequate disclosure of the significant conditions that must be met to 
obtain the ``free'' air travel. This is particularly troubling not only 
because significant restrictions pertain to obtaining and using the 
``free'' ticket, but also because, even after meeting the conditions, 
in most cases consumers still must pay taxes and fees, which, in the 
case of an international itinerary, may amount to well over $100. The 
existence of conditions related to ``free'' tickets should be noted 
prominently and proximately to the offer of a free ticket, at a minimum 
through the use of an asterisk or other symbol that directs the 
reader's attention to the information explaining the conditions in 
easily readable print elsewhere in the advertisement. Some examples of 
conditions that must be noted are any requirements that the consumer 
pay the taxes and fees that may properly be separately stated from the 
fare, or the existence of significant restrictions, either to qualify 
for the free ticket, or to use the free ticket. Similarly prominent 
notice of the existence of these kinds of conditions should also be 
made in television and radio advertising.
    By this notice and in accordance with recent Department enforcement 
case precedent, we are also providing further guidance on how to 
disclose tax, fee, and restriction information in Internet 
advertising.\3\ In order to accommodate the emergence of the Internet 
in the sale of air transportation, the Department has permitted a full 
explanation of taxes, fees and conditions to be provided by hyperlinks. 
Specifically, Internet fare advertisements that quote a fare that is 
not a full fare or that has significant restrictions should have an 
explicit statement that additional charges apply immediately adjacent 
to the fare with a hyperlink to a full explanation. Alternatively, 
those advertisements should highlight the fact that additional fees, 
restrictions, or conditions apply to a specific fare or list of fares, 
including ``free'' fares, with an asterisk or other symbol immediately 
next to the fare or list of fares, together with a concise explanation 
for the asterisk or symbol (e.g., ``taxes, fees, and restrictions 
apply'') in reasonably close placement to the relevant fare or fares. A 
full explanation of the nature and amount of all additional fees and 
significant restrictions should appear on the same page as the quoted 
fare or may be linked to the fare by a single hyperlink. This Internet 
advertising guidance also applies to banner advertisements and pop-up 
advertisements placed on either vendor or external sites, and e-mail 
advertisements, as well as to vendors' own Web sites.\4\
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    \3\ See, Icelandair (Order 2003-4-9).
    \4\ Our June 5, 2002, notice regarding banner advertisements 
addressed the distinct issue of banner advertisements on external 
sites offering percentage discounts, which lead a consumer to a 
general fare quote page on a travel vendor's site with no further 
information on the relevant discounts.
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    Questions regarding this notice may be addressed to Nicholas Lowry, 
Senior Attorney, Office of Aviation Enforcement and Proceedings (C-70), 
400 7th St., SW., Washington, DC 20590.

    Dated: September 4, 2003.
Samuel Podberesky,
Assistant General Counsel for Aviation Enforcement and Proceedings.
    An electronic version of this document is available on the World 
Wide Web at http://dms.dot.gov/reports.

[FR Doc. 03-23185 Filed 9-10-03; 8:45 am]
BILLING CODE 4910-62-P