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DOT Fines LAN Airlines for Violating Price Advertising Rules

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

“Consumers have a right to know the full price they will be paying when they buy an airline ticket,” said U.S. Transportation Secretary Ray LaHood.  “We take our airline price advertising rules seriously and will take enforcement action when they are violated.”

DOT rules require 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 exceptions currently allowed are 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. These requirements apply to both U.S. and foreign carriers.

For a period of time in 2011, LAN used a program on its website that allowed consumers to search for flights by exact dates or by flexible dates.  When passengers made searches, LAN provided air fare quotes along with a note that the fares did not include taxes or fees.  However, the page containing the quotes did not indicate either the type or amount of the fees, and there was no link that took consumers to information about the additional charges.

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 every advertised fare beginning Jan. 24, 2012.

Wednesday, October 26, 2011