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DOT Fines Xtra Airways for Charter Violations Related to Direct Air’s Shutdown

WASHINGTON – The U.S. Department of Transportation (DOT) today fined Xtra Airways $300,000 for violating rules protecting passengers when their public charter flights are suddenly canceled, and ordered the carrier to cease and desist from further violations.

Xtra Airways was one of several carriers operating flights for Direct Air, a charter operator also known as Myrtle Beach Direct Air & Tours, which ceased operating in March.  Direct Air arranged charters from a number of cities in the Midwest and Northeast to Myrtle Beach, S.C. and cities in Florida. 

Public charters differ from scheduled flights in that they operate only for a specific time period and are usually sold by a charter operator rather than an airline.  DOT has specific rules applying to public charters, including a requirement that the charter operator have a security arrangement, such as a bond or letter of credit and an escrow account to protect consumers’ money if a flight is canceled, and a ban on canceling flights less than 10 days before departure unless it is physically impossible to operate the flight.

“Airline passengers should not have to worry about last-minute charter flight cancellations or being stranded in the middle of their trips,” said U.S. Transportation Secretary Ray LaHood.  “Our rules were put into place to protect passengers’ rights, and we will continue to take enforcement action against airlines and charter operators when they violate those rules.”

Xtra Airways stopped flying charters for Direct Air on March 13, 2012, after Direct Air failed to pay the carrier all the money it was owed for operating flights that departed on or after March 3.  Payments for several flights prior to March 3 were also late.  Numerous passengers did not receive the service they paid Direct Air for when Xtra Airways cancelled the remaining flights it was scheduled to operate for Direct Air.

In issuing its fine against Xtra Airways, the Department’s Aviation Enforcement Office said the carrier violated rules requiring that it be paid prior to operating a public charter flight and prohibiting the cancellation of such flights less than 10 days before their scheduled departure.  In addition, the carrier providing the transportation is required to ensure return flights for all round-trip passengers who have flown the outbound leg of their trip.  Carriers also are required to make a reasonable effort to ensure that the charter operator for which they are providing flights is complying with the public charter rules. The Enforcement Office noted that the late payments should have prompted Xtra Airways to look into whether Direct Air was following the rules. 

This is the second penalty issued by the Department related to Direct Air.  On July 27, the Department assessed a $180,000 penalty against World Atlantic Airlines, another carrier operating flights for Direct Air.  The Department is continuing to investigate Direct Air’s shutdown. 

The consent order is available on the Internet at www.regulations.gov, docket DOT-OST-2012-0002.  Information for consumers seeking refunds for Direct Air flights is available at http://airconsumer.dot.gov/cessations.htm

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Tuesday, October 2, 2012