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Mon, Aug 06, 2012

DOT Fines Three Companies For Violating Consumer Protection Rules

All Cited For Not Properly Disclosing Fees In Ticket Prices

The U.S. Department of Transportation (DOT) has fined Philippine Airlines, Santa Barbara Airlines, and ticket agent Pacific for Less for violating the Department’s expanded airline passenger protection rules that took effect in January.

Philippine Airlines and Pacific for Less violated the rule requiring all taxes and fees be included in advertised fares. Philippine Airlines was assessed a civil penalty of $80,000 and Pacific for Less was assessed a civil penalty of $20,000. Santa Barbara Airlines, a carrier based in Venezuela, violated the rule requiring the disclosure of fees for baggage, and was assessed a civil penalty of $80,000. Each company was also ordered to cease and desist from further violations. “We adopted our airline consumer protection rules to make sure passengers know the full price they have to pay, including charges for checking baggage, when they buy an airline ticket,” said U.S. Transportation Secretary Ray LaHood (pictured). “Carriers and ticket agents are required to comply with these rules.”

DOT requires all advertisements that include airfares to state the entire price to be paid by the consumer. Prior to a rule that took effect Jan. 26, advertised fares were not required to include certain government-imposed taxes as long as these additional charges were clearly disclosed in the ad. Under the new rule, all government taxes and fees must be incorporated into the fare. The rule applies to both U.S. and foreign airlines as well as ticket agents.

Airfare searches on Philippine Airlines’ website made after Jan. 26 by the Department’s Aviation Enforcement Office resulted in listings of base fares for outbound and inbound legs that did not include additional government taxes and fees. The total fare to be charged, including taxes and fees, was disclosed only on the following web page. A review of Pacific for Less’s website after Jan. 2012 showed that the company advertised prices for tour packages with an air component that did not include the entire price to be paid by the consumer. The advertised prices of tour packages were followed by an asterisk that referred consumers to a statement at the bottom of the page that indicated that taxes and fees were additional.

Under DOT’s new rule, which took effect Jan. 24, carriers must disclose to consumers booking a flight that they may have to pay baggage fees in addition to the basic ticket price. When consumers book a flight on-line, carriers must clearly and prominently disclose on the first screen that offers a specific itinerary that additional baggage fees may apply and tell the consumer where they can view the fees. The rule applies to all airlines selling air transportation in the United States, including foreign carriers. Airfare searches on Santa Barbara’s website made by the Department’s Aviation Enforcement Office after Jan. 24 found that the airline failed to disclose on the first screen in which it offered a fare quotation for a specific itinerary that additional airline fees for baggage may apply, and where consumers could see those fees.

FMI: www.regulations.gov, www.dot.gov

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