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DOT Fines Icelandair for Violating Price Advertising Rules

The U.S. Department of Transportation (DOT) today fined Icelandair $50,000 for violating federal aviation laws and the Department’s rules prohibiting deceptive price advertising in air travel. 

“When consumers book a flight, they have the right to know the full amount they will have to pay,” said U.S. Transportation Secretary Ray LaHood.  “We adopted our price advertising rules to protect consumers and will take enforcement action when they are violated.”

For a period of time in the fall of last year, Icelandair displayed Internet advertisements for flights to Iceland and Europe for $429.  Next to the fare was an asterisk but no further information, and the website contained no information about any additional taxes.  Instead, once consumers clicked on the fare, they were taken to Icelandair’s homepage where they had to select a route before being taken to another page where tax and fee information was finally disclosed.

Icelandair’s website violated DOT rules requiring any advertising that includes a price for air transportation to state the full price to be paid by the consumer, including all carrier-imposed surcharges.  The only exception currently allowed is government-imposed taxes and fees that are assessed on a per-passenger basis, such as passenger facility charges, which may be stated separately from the advertised fare but must be clearly disclosed in the advertisement so that passengers can easily determine the full price they must pay.  Internet fare listings may disclose these separate taxes and fees through a prominent link next to the fare stating that government taxes and fees are extra, and the link must take the viewer directly to information where the type and amount of taxes and fees are displayed. The rules apply to both U.S. and foreign carriers as well as ticket agents.

Under DOT’s recently adopted consumer rule that enhances protections for air travelers, carriers and ticket agents will be required to include all government taxes and fees in every advertised fare beginning Jan. 26, 2012.

The consent order is available on the Internet at www.regulations.gov, docket DOT-OST-2012-0002.

Wednesday, January 18, 2012