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Continental, US Airways Fined for Violating DOT Price Advertising Rules

In separate cases, the U.S. Department of Transportation (DOT) today assessed civil penalties against Continental Airlines and US Airways for violating the Department’s rules prohibiting deceptive price advertising in air travel. Continental was assessed a civil penalty of $120,000 and US Airways $45,000.

“Protecting the rights of airline consumers is a high priority for the Department of Transportation,” U.S. Transportation Secretary Ray LaHood said. “Passengers have the right to know how much they will have to pay when they buy an airline ticket, and we will continue to take enforcement action when these rules are violated.”

DOT requires 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. In Internet listings, these taxes and fees may be disclosed through a prominent link next to the stated fare noting that taxes and fees are extra, and the link must take the consumer directly to a listing of the type and amount of taxes. Under DOT’s recently adopted consumer rule that enhances protections for air travelers, carriers will be required, among other things, to include all government taxes and fees in advertised fares beginning Oct. 24.

A review of Continental’s website by the Department’s Aviation Enforcement Office revealed instances in which the carrier failed to include fuel surcharges in its listed fares. Consumers selecting flights from their nearest airport were shown a base fare that excluded fuel surcharges, and it was only on the third page selected that they were shown the full fare including the surcharge, which often was significantly higher. In one example, a fare from San Jose, Calif., to San Salvador, El Salvador, was shown as $298 on the first two pages, but was listed as $538 once the fuel surcharge was added on the third page.

Earlier this year, US Airway’s homepage advertised fares to Rome for $659. There was an asterisk next to the fare and a statement that additional taxes and fees might apply, but there was no information on the type or amount of fees in either the ad or on the homepage. Although the reference to taxes and fees included a hyperlink, the link did not take the reader directly to an explanation of the additional charges.

The consent orders are available on the Internet at www.regulations.gov, docket DOT-OST-2011-0003.

Thursday, June 2, 2011