Order 2012-1-8

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Eighteenth day of January, 2012

Icelandair Group Docket OST 2012-0002

Served January 18, 2012

Violations of 49 U.S.C. § 41712 and 

14 CFR 399.84 

CONSENT ORDER

This consent order concerns Internet advertisements by Icelandair Group (Icelandair) that 

violate the advertising requirements specified in 14 CFR 399.84, as well as 49 U.S.C.

§ 41712, which prohibits unfair and deceptive practices and unfair methods of 

competition. It directs Icelandair to cease and desist from future violations of section 

399.84 and section 41712, and assesses the carrier a compromise civil penalty of 

$50,000. 

Applicable Law

As a foreign air carrier, Icelandair is subject to the advertising requirements of Part 399 

of the Department’s rules. Pursuant to 14 CFR 399.84, carriers advertising airfares must 

state the full price to be paid by the consumer. Under long-standing enforcement case 

precedent, the Department has allowed taxes and fees collected by carriers and ticket 

agents, such as passenger facility charges and departure taxes, to be stated separately 

from base fares in advertisements, so long as such taxes and fees are levied by a 

government entity, are not ad valorem in nature, i.e., not assessed as a percentage of the 

fare price, are collected on a per-passenger basis, and their existence and amounts are 

clearly indicated at the first point in the advertisements where a fare is presented so that 
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consumers can immediately determine the full fare to be paid.1 Thus, for example, fare 

advertisements that 1) fail entirely to identify the existence and amount of separate 

additional taxes and fees at the first point at which a fare is displayed, or 2) include only 

general statements regarding the existence of such taxes and fees do not comply with 

section 399.84 or the Department’s enforcement case precedent. Violations of section 

399.84 constitute an unfair and deceptive practice and unfair method of competition in 

violation of 49 U.S.C. § 41712.2 

In Internet advertising displays, taxes and fees that properly may be stated separately 

from the advertised fare may be disclosed through a prominent link placed adjacent to the 

stated fare that notes that taxes and fees are extra and directly takes the viewer to the 

bottom of the screen, or to a pop-up or a place on a separate screen, where the nature and 

amount of taxes and fees are prominently and immediately displayed.3

 

Facts and Conclusions

For a period of time in the Fall 2011, Icelandair displayed an advertisement stating “Fares 

to Iceland and Europe starting from $429*.” An asterisk appeared following the fare 

without further elaboration. Nowhere on the website were the nature and amount of the 

additional taxes stated. Rather, once consumers clicked on the fare, they were then taken 

to Icelandair’s homepage where consumers had to select a city and destination, which 

would then take the consumer to an additional page where tax and fee information was 

finally disclosed. Icelandair’s failure to provide proper notice of taxes and fees that may 

legally be stated separately from the fare violated 14 CFR 399.84 and 49 U.S.C. § 41712.

 1 On April 20, 2011, the Department issued a rule changing its enforcement policy with respect to section 

399.84 to require that airlines and ticket agents comply with the rule as written. Under this new 

enforcement policy, which is effective January 26, 2012, airlines and ticket agents must include all 

government taxes and fees in every advertised fare. The Department’s long-standing prohibition on 

omitting carrier-or agent-imposed charges, such as fuel surcharges or convenience fees, from advertised 

fares remains in effect.

2 See, e.g., US Airways, Inc., Violations of 49 U.S.C. § 41712 and 14 CFR 399.84, Order 2011-6-2 (June 2, 

2011); Delta Air Lines, Inc,. Violations of 49 U.S.C. § 41712 and 14 CFR 399.84 Order 2010-5-30 (May 

28, 2010); 

3 For example, under current policies, a carrier or ticket agent could advertise a flight in the following 

manner: “$260 + Taxes and Fees” with the phrase “Taxes and Fees” set off as a hyperlink that takes the 

viewer directly to the bottom of the screen or to a pop-up or a place on a separate screen, where the nature 

and amount of taxes and fees are prominently and immediately displayed. See Department notices entitled 

“Disclosure of Air Fare Variations: Web vs. Other Sources, Surcharges that May be Listed Separately in 

Advertisements,” dated November 4, 2004; “Disclosure of Additional Fees, Charges, and Restrictions on 

Air Fares in Advertisements, Including ‘Free’ Airfares,” dated September 4, 2003; and “Prohibition on 

Deceptive Practices in the Marketing of Airfares to the Public Using the Internet,” dated January 18, 2001, 

available at: http:airconsumer.ost.dot.gov/rules/guidance.htm.
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 Mitigation

In mitigation, Icelandair submits that it had no intent to mislead, confuse or defraud the 

public in any way, shape or form and equally had no intent to frustrate or evade the laws 

of the United States. Icelandair further asserts that the advertisement at issue was 

outdated and it was unaware that the advertisement was still being run by an 

advertisement placement service and, therefore, not affirmatively sanctioned.

Decision

The Department views compliance with the Federal aviation statutes and regulations very 

seriously. The Enforcement Office has carefully considered the information provided by 

Icelandair and continues to believe that enforcement action is warranted. The

Enforcement Office and Icelandair have reached a settlement of this matter in order to 

avoid litigation. Without admitting or denying the violations described above, Icelandair

consents to the issuance of this order to cease and desist from future violations of 49 

U.S.C. § 41712 and 14 CFR 399.84, and to the assessment of $50,000 in compromise of 

potential civil penalties otherwise due and payable pursuant to 49 U.S.C. § 46301.

This compromise assessment is appropriate considering the nature and extent of the 

violations described herein and serves the public interest. It represents a strong deterrent 

against future noncompliance with the Department’s advertising requirements. 

This order is issued under the authority in 49 CFR 1.57a and 14 CFR 385.15.

ACCORDINGLY,

1. Based on the above information, we approve this settlement and the provisions of this 

order as being in the public interest;

2. We find that Icelandair Group violated 14 CFR 399.84 by advertising fares that failed 

to state the entire price to be paid;

3. We find that by engaging in the conduct described in ordering paragraph 2, above, 

Icelandair Group engaged in an unfair and deceptive practice and unfair methods of 

competition in violation of 49 U.S.C. § 41712;

4. We order Icelandair Group, and all other entities owned or controlled by, or under 

common ownership and control with Icelandair Group and its successors, affiliates, 

and assignees, to cease and desist from further similar violations of 14 CFR 399.84 

and 49 U.S.C. § 41712. Failure to comply with this cease and desist provision shall 

subject Icelandair Group and its successors, affiliates, and assignees to possible 

further enforcement action;

5. We assess Icelandair Group, $50,000 in compromise of civil penalties that might 

otherwise be assessed for the violations described above. Of this total penalty amount, 

$25,000 shall be due and payable within 30 days of the date of issuance of this order. 
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The remaining $25,000 shall become due and payable immediately if Icelandair 

Group, violates this order’s cease and desist provisions within one-year following the 

date of issuance of this order, or fails to comply with the order’s payment provisions; 

and

6. We order Icelandair Group, to remit the payment assessed in ordering paragraph 5 

above by wire transfer through the Federal Reserve Communications System, 

commonly known as "Fed Wire," to the account of the U.S. Treasury in accordance 

with the instructions contained in the attachment to this order. Failure to pay the 

penalty as ordered shall subject Icelandair Group to the assessment of interest, 

penalty, and collection charges under the Debt Collection Act, and to additional 

enforcement action for failure to comply with this order.

This order will become a final order of the Department 10 days after its service date 

unless a timely petition for review is filed or the Department takes review on its own 

motion.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at 

www.regulations.gov