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DOT Fines Ticket Agents for Violations of Code-Share Disclosure and Price Advertising Rules

The U.S. Department of Transportation (DOT) today fined three online ticket agents for failing to adequately disclose to consumers when flights were being operated under a code-sharing arrangement. Two of the companies also were cited for violating the Department’s rules prohibiting deceptive price advertising in air travel.

Apple Vacations was assessed a $50,000 civil penalty for code-share disclosure violations. Globester, LLC, was assessed $40,000 and LBF Travel, Inc. was assessed $30,000 for violating both code-share and price advertising rules.

“When passengers buy an airline ticket, they have a right to know which airline will be operating their flight and how much they will have to pay,” said U.S. Transportation Secretary Ray LaHood. “Protecting air travelers is a high priority of the Department and we will not hesitate to take enforcement action when their rights are violated.”

Under code-sharing, an airline will sell tickets on flights that use its designator code, but are operated by a separate airline. DOT rules require airlines and ticket agents to disclose to consumers, before they book a flight, if the flight is operated under a code-sharing arrangement. The disclosure must include the corporate name of the transporting carrier and any other name under which the flight is offered to the public. Under a new law, when tickets are purchased on the Internet, code-share information must be easily viewable on the first display of a website following a search for flights corresponding to a desired itinerary.

Violations of Code-Share Disclosure Rules

Investigations by the Department’s Office of Aviation Enforcement and Proceedings revealed that the ticket agents, at least during the latter half of 2010, violated the code-share disclosure rules by failing to disclose that certain flights listed on their Internet sites were being operated by a regional carrier on behalf of a major airline. The listings did not display the corporate names of the operating carriers and other names under which the carriers operating the flights do business.

In addition, the Enforcement Office also found that Globester and LBF Travel failed to include the 7.5 percent federal excise tax, as well as their own service fees, in fares advertised on their Internet sites. Globester failed to include these charges from at least August 2010 through early 2011, and LBF Travel during the early part of this year. This 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. 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.

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

Thursday, June 30, 2011