[Federal Register: November 15, 2004 (Volume 69, Number 219)]
[Notices]
[Page 65676-65677]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15no04-129]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
Notice of Disclosure
AGENCY: Office of the Secretary (OST), Department of Transportation.
ACTION: Notice on disclosure of higher prices for airfares purchased
over the telephone via telephone reservations centers or at airline
ticket offices, and surcharges that may be listed separately in fare
advertisements.
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SUMMARY: The Department is publishing the following notice disclosure
of higher prices for airfares purchased over the telephone via
telephone reservations centers or at airline ticket offices, and
surcharges that be listed separately in fare advertisements.
FOR FURTHER INFORMATION CONTACT: Nicholas Lowry, Attorney, Office of
Aviation Enforcement and Proceedings (C-70), 400 7th Street, SW.,
Washington, DC 20590 (202) 366-9349.
This notice is intended to provide guidance on two matters related
to compliance with 14 CFR 399.84, the Department's rule on full fare
advertising, and the underlying statutory proscription in 49 U.S.C.
41712 against unfair and deceptive trade practices. First, we address
the disclosure in fare advertisements of higher prices, recently
introduced by several air carriers, for tickets purchased at ticket
counters or by telephone.\1\ Second, by this notice, we are advising
carriers of the current policy of the Office of Aviation Enforcement
and Proceedings (Aviation Enforcement Office) with regard to the
disclosure of ``government-approved'' surcharges.
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\1\ Some carriers have referred to this increase in the price
for tickets bought from them over the telephone or at a ticket
counter as a ``service fee'' or by a similar phrase. However, in the
context of the full fare advertising rule, such carrier-imposed
``fees'' are a part of the fare and must be treated as such in
airfare advertising.
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A number of air carriers and foreign air carriers have recently
started charging higher prices for tickets purchased by telephone or at
ticket offices. Such airlines advertise base fares on the Internet or
in print or other media, make the advertised fares available for
purchase via the Internet only, and charge higher prices if customers
purchase their tickets via an airline's telephone reservation system or
at its airport or city ticket counter. Section 399.84 mandates that the
advertised fare be the full fare to be paid by the customer. Any
practice of excluding from advertised fares extra ``fees'' charged to
customers that purchase tickets over the telephone through airline
reservation centers, or at airport or city ticket counters, therefore,
would violate 14 CFR 399.84, and constitute an unfair and deceptive
trade practice and an unfair method of competition in violation of 49
U.S.C. 41712.
In order to avoid enforcement action, carriers and their agents who
charge more for tickets not purchased over the Internet (e.g. by
telephone or at ticket offices) must prominently disclose to customers
that specific fares advertised are available only for tickets purchased
via the Internet. In addition, we believe that 49 U.S.C. 41712 and 14
CFR 399.84 require carriers to state in such advertising that tickets
cost more than the advertised price if purchased over the telephone or
at an airport or city ticket office. Moreover, we believe it would be
informative and beneficial for consumers if carriers also state the
amount of the increased price in the advertisements, for example, by
stating that tickets cost $5 more if purchased by telephone or at an
airport or city ticket office. However, this increase in price may not
be characterized as a carrier-imposed ``fee'' lest the advertisement
run afoul of the full fare advertising rule.\2\ Accordingly, the
Aviation Enforcement Office will pursue enforcement action with regard
to the advertisements in question if the increased fare is merely
described in terms of a service, processing, administrative, ticketing
center, call center, or similar carrier-imposed ``fee.''
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\2\ The full-fare advertising rule was adopted in large part to
eliminate the prior practice where sellers of air transportation hid
the true price of tickets by listing ``service fees'' in the fine
print of advertisements. The Aviation Enforcement Office, therefore,
does not believe the increased price of tickets purchased at ticket
counters or by telephone should be referred to in terms of a
``service fee'' in fare advertisement because this could lead to
significant confusion and a return to the prior unacceptable
advertising practice.
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Carriers, however, may use the aforementioned ``fee'' terms when
describing the additional charge for telephone and/or ticket counter
purchases in contexts that do not list specific fares and are thus not
subject to 14 CFR 399.84. Carriers may disclose such charges and refer
to them as ``fees,'' for example, in an audio introduction on an
airline telephone reservation system, stating that tickets purchased
over the telephone via the airline telephone reservation system, and/or
at airline ticket counters, are subject to an additional carrier-
imposed ``fee,'' so long as the total fares eventually quoted to
consumers include the ``fee.''
A second topic we wish to address relates to ``government-approved
surcharges.'' In the past, we have not pursued enforcement action
against carriers that listed in fare advertisements ``government-
imposed and government-approved'' surcharges separately from the base
fare quotations, so long as the existence of these
[[Page 65677]]
surcharges and their amounts were stated elsewhere in the
advertisement. The ``government-approved'' surcharges were limited to
security surcharges approved in the mid-1980's that affected foreign
air transportation only and were approved by both the foreign
government involved and the U.S. government. Recently, tariff
regulation, owing to expanded open-skies agreements and other factors,
has been revised to the extent that there is no longer a consistent
practice of joint approvals of surcharges, in many instances resulting
in the filing of tariffs that may include surcharges that are approved
by only one government. In addition, the desire of carriers to pass on
the higher costs of certain expenses discretely, such as insurance and
fuel, has led to such expenses being filed separately from the ``base''
fare in tariffs, a situation that the Department cannot effectively
monitor.\3\ In view of these developments, the Enforcement Office will
no longer allow the separate listing of ``government-approved''
surcharges in fare advertising. We will consider the separate listing
of such charges in fare advertisements an unfair and deceptive trade
practice and unfair method of competition in violation of 14 CFR 399.84
and 49 U.S.C. 41712 and will pursue enforcement action where such
violations are found. With respect to ``government-imposed''
surcharges, for example PFCs and foreign airport charges, however, our
policy remains that such charges may be omitted from the fare
quotations provided that they are not ad valorem in nature, that they
are collected on a per-passenger basis, and that their existence and
amount are clearly indicated in the advertisement so that the consumer
can determine the full fare to be paid.
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\3\ In open-skies and other markets governed by bilateral
agreements containing double-disapproval pricing articles, the
Department has exempted carriers from fare filing. See 14 CFR part
293. See also, Letter from Paul L. Gretch, Director of International
Aviation, to air carriers dated October 14, 2004, which was
distributed electronically by ATPCO to its members.
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Questions concerning this notice or the applicability of the
Department's fare advertising rules may be addressed to the Office of
Aviation Enforcement and Proceedings.
Dated: November 5, 2004.
Samuel Podberesky,
Assistant General Counsel for Aviation Enforcement and Proceedings.
An electronic version of this document is available on the World
Wide Web at http://dms.dot.gov/reports and http://airconsumer.ost.dot.gov/rules/index.htm.[FR
[FR Doc. 04-25253 Filed 11-12-04; 8:45 am]
BILLING CODE 4910-62-P