DOT Logo

March 18, 1996


THE FOLLOWING LETTER WAS SENT TO THE ATTACHED LIST OF 166
U.S. AND FOREIGN AIRLINE AND TRAVEL INDUSTRY CHIEF EXECUTIVES

There has been a virtual explosion in the availability and use of computer networks as a medium for transmitting information.  Indeed, the “information superhighway” is increasingly becoming a vehicle for the promotion and sale of air transportation. Many airlines and other travel industry firms have established sites on the Internet.  Computer online services, such as CompuServe, Prodigy, and America Online, offer users access to several airline computer reservations systems (CRSs).

The purpose of this letter—which is being sent to the U.S. major and national carriers and the larger foreign air carriers and travel agents—is to bring to your attention several advertising compliance issues that we have noted recently in our review of these Internet sites as well as the potential pitfalls that can occur as a result of widespread use of airline CRSs by the general public. The message I wish to convey to you is that with this new medium for promotion goes the same responsibility for ensuring the public is not misled that has long been required for all other forms of solicitation in the sale of air transportation.

In the last several months the Department assessed its first civil penalty involving airline advertising on the Internet.  In that case the carrier failed to disclose in its fare ad on the Internet’s World Wide Web the full price of flights it promoted between the U.S. and London; see Order 95-11-37. In addition, through the use of consent orders, warning letters, and other informal approaches, we have placed airlines and travel companies directly on notice of their obligation to conform to our price advertising requirements, although not specifically mentioning that those requirements also apply to Internet and online service listings. This letter is to emphasize that applicability and to counsel carriers and travel companies that they will be subject to enforcement action for future fare disclosure violations based on their Internet and online service listings.

Over the past several years we have disseminated a series of Industry Letters addressing a variety of price advertising matters. Here is a brief chronological list of those letters:

We recommend that you review these letters, because they provide both general and specific information related to our concerns regarding Internet and online service advertising.

CRS Displays

Let me emphasize at the outset, the discussion here is limited to public-access CRS displays and not those viewed by airline reservationists and travel agents. Based on information received by this office and our own review of online service listings, there appear to be two areas where air carrier fare information has the potential to be incomplete or where government-imposed taxes and fees assessed and collected on a per-passenger basis may not be adequately disclosed, when the fare information is displayed.

With some public-access CRSs the information displayed and the format used to display material are presented using industry jargon (e.g., unexplained fare codes or phrases such as “no open jaws”) and airline codes only familiar to travel professionals. However, such terminology may be unintelligible to many consumers. Although the intent here is not to criticize the vendors of public-access CRSs, it is important to underscore our concern that sometimes consumer confusion progresses to consumer misinformation, and even deception, which could violate 14 CFR Part 399 and section 41712 of Title 49 of the United States Code, which prohibits unfair and deceptive practices or unfair methods of competition (formerly Section 411 of the Federal Aviation Act). For example, travel agents, airline reservationists, and other every-day users of CRSs understand the mechanics of fare displays, how one way listings may actually be “each way, based on roundtrip purchase,” depending on the fare code identifier. But the inexperienced user may well be misled, because the intended meaning [one way as each way] is not easily discernible. Airlines should review their public-access CRS displays and other critical price advertising disclosures to eliminate bewildering or misleading language.

It is also important that consumers be able to calculate the full price to be paid for the prospective air transportation prior to completing the transaction. Some public-access CRSs do not incorporate the ad valorem taxes or other administrative fees on the screen displaying the fare, as has long been required of all other advertising media. In certain systems, it is not until the sale is closed, i.e., when the consumer accepts the reservations by striking the Enter key, that this additional and sometimes substantial expense is included in the total price displayed.  Some examples include: (1) the 10% federal excise tax imposed on flights to Canadian points within the 225 mile buffer zone of the U.S. border (a tax now awaiting Congressional action on renewal); and (2) a fuel surcharge some carriers impose to reflect ad valorem fuel taxes levied by the state of Florida and the city of Chicago, for flights originating there. Those charges must be included in the price presented to the consumer before a fare is booked.

Internet Displays

Promotion of air transportation on the Internet, like print media advertising, affords the consumer the advantage of being able to read and digest the displayed information. However, the Internet sites place the same level of responsibility on the party making the offer electronically to refrain from deceptiveness as is incumbent on those using print media advertising.

Airlines promoting new markets or new service on the Internet frequently display deep-discount, introductory fares.  Adherence to the DOT advertising requirements in this medium is essential, including the requirement to prominently display critical purchase requirements. These include the prominent and proximate display of the phrase “each way—based on roundtrip purchase,” and, where necessary, other material elements of the advertised fare, such as nonrefundability or other refund constraints, advance purchase requirements, dates of travel restrictions and blackout dates, fare validity periods, as well as any permissible additional charges, e.g., government-imposed, per-passenger taxes and fees.  Failure to adhere to these requirements could violate 49 U.S.C. 41712 and section 399.84 of the Department’s regulations governing full price advertising.

Certain carriers are offering interactive features on the Internet, such as schedule and fare information, which allow consumers to select market pairs and display date-specific flight lists and/or an array of fares applicable to the selected itinerary. While this service may appear more informational than promotional, it nevertheless is a representation to the general public. Therefore, it carries with it the obligation to ensure that the information is portrayed adequately and accurately. For instance, it is important that fare information contain required price advertising elements, such as PFC disclosures.  Also, fare listings shown as one way must be available for purchase as such, unless there is a prominent disclosure proximate to the advertised fare that it is actually “each way, based on roundtrip purchase.” To avoid consumer confusion, a prefatory statement emphasizing to Internet users that the fare listings are for general information only and not a reflection of current seat availability, where such is the case, is also an important consideration. However, this does not relieve carriers from the formatting and disclosure requirements described above and clearly does not allow a carrier to list fares that were never available or have expired.

As a final point, our code-share disclosure rule, 14 CFR 399.88, also applies to Internet and airline service listings.  Briefly, flight listings must disclose code shared flights and fare listings must provide code-share disclosures in a manner required of print-media fare ads.

We will immediately pursue enforcement action for these types of disclosure problems against any carrier or travel company that has been the subject of a prior consent order for advertising violations, as well as any carrier or travel company that has already been warned that its future advertising violations would be subject to enforcement action. With respect to other parties, commencing with promotional displays that appear three weeks after the date of this letter, the Enforcement Office may take enforcement action, without further warning, against any company that receives this letter or should otherwise be on notice of its contents and whose Internet or public-access (online service) CRS displays do not comply with our enforcement policy as discussed above.

If you have questions or desire additional information about our policies, please contact Dayton Lehman, my deputy, at (202) 366-9342. Our FAX number is (202) 366-7152. You may also contact Hoyte Decker, Assistant Director for Aviation Consumer Protection, at (202) 366-5957.

Samuel Podberesky

Assistant General Counsel for Aviation Enforcement and Proceedings

name

title

company

address

moreaddress

city

state

zip

salutation

Mr. Tom Ciotti

President

Air Serve, Inc.

500 Industrial Ave.

Aviall Bldg.

Teterboro

NJ

07698

Mr. Ciotti

Mr. Geoffrey T. Crowley

President & CEO

Air Wisconsin Airlines Corp.

W6390 Challenger Dr., Suite 203

Appleton

WI

54915

Mr. Crowley

Mr. Robert Swenson

President

AirTran Airways, Inc.

6280 Hazeltine National Dr.

Suite 100

Orlando

FL

32822

Mr. Swenson

Mr. Izad Djahanshahi

President

Airways International

P.O. Box 1244

Miami Springs

FL

33266-1244

Mr. Djahanshahi

Mr. Steven G. Hamilton

V P-Legal and General Counsel

Alaska Airlines, Inc.

P.O. Box 68900

Seattle

WA

98168

Mr. Hamilton

Mr. Glenn R. Zander

President & CEO

Aloha Airlines, Inc.

PO Box 30028

Honolulu

HI

96820

Mr. Zander

Mr. Martin J. Whalen

Sr Vice President and General Counsel

America West Airlines, Inc.

4000 East Sky Harbor Blvd.

Phoenix

AZ

85034

Mr. Whalen

Ms. Anne H. McNamara

Sr V P-Administration & General Counsel

American Airlines, Inc.

Mail Drop 5618

Post Office Box 619616

DFW Airport

TX

75261-9616

Ms. McNamara

Mr. J. George Mikelsons

Chairman & CEO

American Trans Air, Inc.

7337 W. Washington St.

Indianapolis

IN

46231

Mr. Mikelsons

Mr. Jonathan Batchelor

President

Arrow Air, Inc.

Box 026062

Miami International Airport

Miami

FL

33103

Mr. Batchelor

Ms. Cheryl Grue

President

AV Atlantic

1170 Lee Wagener Blvd., Suite 201

Ft. Lauderdale

FL

33315

Ms. Grue

Mr. Roy McQuillen

President

Buffalo Airways, Inc.

301 E. 51st St.

Kansas City

MO

64112

Mr. McQuillen

Mr. John Catsimatidis

President

Capitol Air Express, Inc.

823 Eleventh Ave.

New York

NY

10019

Mr. Catsimatidis

Mr. Daniel Ratti

President

Carnival Air Lines, Inc.

1815 Griffin Road, Suite 205

Dania

FL

33004

Mr. Ratti

Mr. Tod McClaskey

President

Casino Express Airlines

JC Harris Field

803 Murray Way

Elko

NV

89801

Mr. McClaskey

Mr. Jeffery Smisek

Vice President and General Counsel

Continental Airlines

2929 Allen Parkway, Suite 2010

Houston

TX

77019

Mr. Smisek

Mr. Robert S. Harkey

Sr V P, General Counsel, and Secretary

Delta Airlines, Inc.

Hartsfield Atlanta International Airport

Atlanta

GA

30320

Mr. Harkey

Mr. Donald Rhoads

General Manager

Eagle Airlines

175 East Reno Ave., Suite C9

Las Vegas

NV

89119

Mr. Rhoads

Mr. Steven Davis

VP-Operationss, Inc.

Eastwind Airlines

Trenton-Mercer Airport

Building 1 Scotch Rd.

W. Trenton

NJ

08628

Mr. Davis

Mr. Mel Spelde

President

Empire Airlines, Inc.

11101 Airport Drive

Hayden Lake

ID

83835

Mr. Spelde

Mr. Larry K. Lane

President

Evergreen International Airlines, Inc.

3850 Three Mile Lane

McMinnville

OR

97128

Mr. Lane

Mr. James Wikert

Chief Executive Officer

Express One International, Inc.

3890 West NW Highway, #700

Dallas

TX

75220

Mr. Wikert

Mr. Frank Fine

President

Fine Airlines, Inc.

Box 523726

Miami

FL

33152

Mr. Fine

Mr. Richard Haverley

Florida West Airlines

Box 522207

Miami

FL

33152

Mr. Haverley

Mr. Sam Addoms

President & CFO

Frontier Airlines, Inc.

12015 East 46th Ave.

Denver

CO

80239

Mr. Addoms

Mr. Robert Stephan

President

Great American Airways

Box 10165 Reno-Cannon Int'l Airport

Reno

NV

89510

Mr. Stephan

Mr. Bruce Nobles

Chairman & CEO

Hawaiian Airlines, Inc.

PO Box 30008

Honolulu

HI

96820

Mr. Nobles

Ms. Cathy Iskra

Chairman, President & CEO

Horizon Air

PO Box 48309

Seattle

WA

98148

Ms. Iskra

Mr. David Clark

President

International Charter Xpress

3800 Rodney Parham Rd.

Little Rock

AR

72212

Mr. Clark

Mr. Jerry Murphy

President & CEO

KIWI International Airlines

Hemisphere Center

U.S. Route 1-9 South

Newark

NJ

07114

Mr. Murphy

Mr. Dennis Berry

Vice President-Customer Service

Mesa Airlines, Inc.

2325 E. 30th Street

Farmington

NM

87401

Mr. Berry

Mr. Robert Gould

President

MGM Grand Air, Inc.

1500 Rosencrans Ave.

Suite 350

Manhatten Beach

CA

90266

Mr. Gould

Mr. Ross Fischer

President

Miami Air International, Inc.

PO Box 660880

Miami Springs

FL

33266-0880

Mr. Fischer

Mr. John Selvaggio

President

Midway Airlines

300 W. Morgan St.

Durham

NC

27701

Mr. Selvaggio

Mr. Timothy E. Hoeksema

Chairman, President & CEO

Midwest Express Airlines, Inc.

6744 S. Howell Ave.

Oak Creek

WI

53154

Mr. Hoeksema

Mr. Daniel McKinnon

President

North American Airlines, Inc.

Building 75, JFK Int'l Airport

Suite 250

Jamaica

NY

11430

Mr. McKinnon

Mr. Douglas M. Steenland

Sr V P, General Counsel, & Secretary

Northwest Airlines

5101 Northwest Drive

St. Paul

MN

55111-3034

Mr. Steenland

Mr. Clay Barnett

President

Presidential Air

17422 Pullman St.

Irvine

CA

92714

Mr. Barnett

Mr. Richard Reeve

President

Reeve Aleutian Airways, Inc.

4700 West International Airport Rd.

Anchorage

AK

99502

Mr. Reeve

Mr. Robert Redding

President

Reno Air, Inc.

PO Box 30059

Reno

NV

89520-3059

Mr. Redding

Mr. Larry Sullivan

President

Renown Aviation, Inc.

3940 Mitchell Road

Santa Maria

CA

93455

Mr. Sullivan

Mr. William Meenan

President

Rich International Airways, Inc.

5400 NW 36th St.

Miami

FL

33152

Mr. Meenan

Mr. Ron Ryan

President

Ryan International Airlines, Inc.

6810 W. Kellogg

Wichita

KS

67209

Mr. Ryan

Mr. Gregg Lukenbill

President

Sky King, Inc.

3600 Power Inn Rd., Suite H

Sacramento

CA

95826

Mr. Lukenbill

Mr. James Parker

Vice President and General Counsel

Southwest Airlines Co.

2702 Love Field Drive

Dallas

TX

75235

Mr. Parker

Mr. Robert P. Fleming

President & CEO

Sportsflight Airways, Inc.

2285 E. Elvira Rd.

Tucson

AZ

85706

Mr. Fleming

Mr. John Skiba

President

Sun Country Airlines, Inc.

7701 26th Ave. South

Minneapolis

MN

55450

Mr. Skiba

Mr. Tom Kolfenbach

President

Sun Jet International, Inc.

4700 140th Ave.

Suite 106

Clearwater

FL

34622

Mr. Kolfenbach

Mr. Morris Nachtomi

Chairman & CEO

Tower Air, Inc.

Hangar 17

JFK International Airport

Jamaica

NY

11430

Mr. Nachtomi

Mr. Lincoln Francis

President

Trans American Charter

5923 South Central Ave.

Chicago

IL

60638

Mr. Francis

Mr. Bill Mishk

VP-Marketing

Trans States Airlines

9275 Genaire Dr.

St. Louis

MO

63134

Mr. Mishk

Mr. Richard Magurno

Sr V P and General Counsel

Trans World Airlines, Inc.

One City Centre

515 North Sixth Street

St. Louis

MO

63101

Mr. Magurno

Mr. Stuart Oran

Exec V P-Corp Affs & General Counsel

United Airlines, Inc.

P.O. Box 66100

Chicago

IL

60666

Mr. Oran

Mr. Lawrence M. Nagin

Exec V P & General Counsel

USAir, Inc.

Crystal Park Four

2345 Crystal Drive

Arlington

VA

22227

Mr. Nagin

Mr. Lewis Jordan

President

ValuJet Airlines, Inc.

1800 Phoenix Blvd.

Suite 126

Atlanta

GA

30349

Mr. Jordan

Mr. Robert McAdoo

Chief Executive

Vanguard Airlines, Inc.

30 NW Rome Circle

Terminal B Mezzanine Level

Kansas City

MO

64153

Mr. McAdoo

Mr. George Travis

President

Viscount Air Service, Inc.

1000 E. Valencia Rd.

Tucson

AZ

85706

Mr. Travis

Mr. Larry Risley

Chief Executive Officer

Westair, Inc.

5570 Air Terminal Dr.

Fresno

CA

93727

Mr. Risley

Mr. Edward R. Beauvais

Chairman, President & CEO

Western Pacific Airlines, Inc.

2864 S. Circle Dr., Suite 1100

Colorado Springs

CO

80906

Mr. Beauvais

Mr. Charles W. Pollard

President

World Airways, Inc.

13873 Park Center Rd., Suite 400

Herndon

VA

22071

Mr. Pollard