Order 2014-9-2

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 5th day of September, 2014

 Third Party Complaint of

Benjamin Edelman

 v.

British Airways PLC Docket OST 2013-0025

 

Violations of 49 U.S.C. § 41712 and

14 CFR 399.84(a) Served September 5, 2014

 

CONSENT ORDER AND ORDER OF DISMISSAL

On February 6, 2013, Mr. Benjamin Edelman (the Complainant) filed a third-party 

complaint under 14 CFR 302.401 against British Airways PLC (British Airways), 

alleging that the carrier failed to properly disclose and provide adequate justification for

carrier-imposed surcharges and to comply with the Department’s “full fare” advertising 

rule on its On Business company travel website. The complaint further alleged that 

British Airways advertises around-the-world travel using the “oneworld” booking engine 

(http://rtw.oneworld.com/), owned by oneworld Management Company, Inc. (oMC), 

which consistently misrepresents carrier-imposed surcharges as government taxes and 

fees.1 According to the complaint, by engaging in these practices, the carrier violated its 

contract of carriage and engaged in unfair and deceptive business practices in violation of 

49 U.S.C. § 41712.

This order finds that certain fare displays, in the unique context of the oneworld website,

violated 14 CFR 399.84(a), the Department's full fare advertising rule, and section 41712,

and that British Airways is responsible for the display of its fares. 2 However, in light of 

 1 The pleadings contain a variety of highly detailed charges and counter-charges. We have summarized the 

parties’ primary contentions. Public comments have been filed in this matter; they are available for view in 

the docket. 

2 The Complainant also raised this issue in a companion complaint against Cathay Pacific Airways Limited 

(Cathay). See Docket DOT-OST-2013-0027. On August 29, 2013, the Department entered an order 

dismissing that complaint. The Department found that a violation of 14 CFR 399.84(a) took place when 

Cathay’s agent, oMC, published fare displays that failed to adequately distinguish between taxes and 
2

the fact that these violations have been addressed in Order No. 2013-8-23 and for similar 

reasons as discussed in that order, we conclude that a cease and desist order regarding 

those violations without the assessment of civil penalties is warranted. The other issues 

raised by the complainant do not warrant enforcement action. Accordingly, this order 

directs the carrier to cease and desist from further similar violations of the cited rule and 

statute and dismisses the complaint filed in this docket.

The Complaint

The Complainant states that British Airways’ fuel surcharges do not comply with the 

Department’s Office of Aviation Enforcement and Proceedings (Enforcement Office)

guidance as the charges do not represent a reasonable estimate of per-passenger fuel costs 

above any plausible baseline. The Complainant alleges that British Airways’ fuel 

surcharges appear to exceed the carrier’s actual cost of fuel and provides his own 

calculations as evidence. The Complainant also states that British Airways was unable to 

substantiate the cost of its fuel surcharges and failed to provide this information when he 

contacted its staff. 

The Complainant raises other issues as well. He alleges that British Airways fails to 

disclose carrier-imposed surcharges, taxes and fees on its On Business program website 

in a manner that is compliant with the Department’s regulations. He also alleges that 

British Airways violated the Department’s full-fare advertising rule through the

misrepresentation by its agent, oMC, of carrier-imposed surcharges as government taxes 

and fees on the oneworld website.

The Complainant urges the Department to open an investigation regarding these matters; 

to order British Airways to refund to ticket purchasers all monies represented to ticket 

purchasers as “taxes” or government‐imposed fees, but not actually remitted to 

governments, and all impermissible fuel surcharges; to impose civil penalties; to refer the 

matter to appropriate tax collection agencies; and to issue any necessary revised guidance 

or regulations to clarify that the practices described above are unfair and deceptive. 

Answer of British Airways

In its answer of April 5, 2013, British Airways denies the allegations in the complaint, 

maintains that its fuel surcharge was set appropriately, and explains that fuel surcharges 

have never recouped its entire cost of fuel and indeed generally, have recouped far less 

than the increases in jet fuel costs to British Airways. British Airways challenges the 

Complainant’s computations and assumptions with respect to the contention that its fuel 

surcharges were inappropriate and unsubstantiated. British Airways states that the 

Complainant overstates the carrier’s fuel surcharges and understates its true cost of fuel.

In addition, according to British Airways, the Complainant misstates other important 

 carrier-imposed surcharges. The Department further determined that civil penalties were not warranted 

under the circumstances. The oneworld website has been revised so that carrier-imposed surcharges are no 

longer displayed as taxes in the booking process. 
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variables, including passenger and cargo load factors, fuel consumption, seating density, 

and the price of jet fuel, which resulted in his miscalculation of British Airways’ fuel 

surcharge and the cost of fuel on a given route. Finally, British Airways states that it has 

stopped using the term “fuel surcharge” on its website.

In response to the complaint regarding its On Business program, British Airways states 

that it is a commercial initiative for small to medium enterprises that is not available to 

the general public. According to British Airways, participation in the program is based 

on terms formally agreed to by small and medium-sized enterprises and the business must 

authorize any redemption of travel rewards. Finally with respect to the oneworld website, 

British Airways states that this issue has been resolved as the booking engine has been 

revised to comply with DOT requirements.

Reply of Complainant

Pursuant to the Agreed Motion of April 10, 2013, the Complainant filed a reply on April 

19, 2013.3

 In this reply, he argues that by failing to provide an affirmative justification of 

its fuel surcharge in its answer, British Airways is violating the Department’s requirement 

that carriers be able to detail the basis of their surcharge estimation. The Complainant 

also provides revised calculations estimating British Airways’ fuel charge on certain 

routes based on the carrier’s answer. The Complainant believes his revised calculations

demonstrate that the fuel surcharge is not a reasonable estimate of fuel cost above a 

plausible baseline. With regard to British Airways’ statement that it revised the use of its 

terminology on its website from “fuel surcharges” to “carrier charges,” the Complainant 

states that British Airways must still be able to identify what services are associated with 

the new “carrier charges” and its inability to do so is a violation of federal regulations.

In addition, the Complainant maintains that the British Airways’ On Business program 

violates the Department’s full-fare advertising rule regardless of the carrier’s argument 

that it is a members-only business initiative. With regard to the oneworld website, the 

Complainant argues that British Airways should be held responsible for the inaccurate 

statements that its agent makes directly to consumers and that this issue is not resolved as 

British Airways has failed to provide refunds to affected passengers. 

Sur-Reply of British Airways

Pursuant to the Agreed Motion of April 10, 2013, British Airways filed a responsive 

pleading on May 3, 2013. In its sur-reply, British Airways justifies its imposition of fuel

surcharges due to the high cost of jet fuel and disputes the accuracy of the Complainant’s

methodology and analysis. British Airways also defends its use of the term “carrier 

charges” as reflective of widespread industry practice that is compliant with the 

Department’s guidance. Finally, British Airways reiterates that its On Business website is 

not offered to the general public and British Airways also asserts that DOT has confirmed 

 3

 Agreed Motion, April 10, 2013, Docket DOT-OST-2013-0025-0063, granted by DOT email dated April 

11, 2013, Docket DOT-OST-2013-0025-0066.
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that its consumer protection rules regarding disclosure of ancillary fee information are 

intended to protect the general public, not corporate travel offices.4

Applicable Law 

Unfair or deceptive practices and unfair methods of competition are explicitly prohibited 

under 49 U.S.C. § 41712. The Department’s full fare advertising rule, 14 CFR 399.84(a), 

provides in relevant part that the first price quote for air transportation must state the 

entire price to be paid by the customer, including all taxes, fees, and carrier charges. 

Charges included within that total price may be stated separately, but those charges must, 

inter alia, accurately reflect the actual costs of the services covered, and may not 

otherwise be false or misleading. 

On February 21, 2012, the Enforcement Office issued guidance on the issue of labeling 

taxes and surcharges.5 The guidance states that it is an unfair and deceptive practice to 

include carrier-imposed surcharges and other fees not imposed by a government under the 

label of “taxes,” or under the label “taxes and fees.” The Enforcement Office reasons that 

such a practice “is likely to confuse consumers and deceive them into believing the 

government taxes and fees associated with their airfare are higher than they actually are.” 

Carriers may, if they choose, use language such as “taxes and carrier-imposed fees” to 

collectively describe the charges that are separate from the base fare.

The Enforcement Office is aware that carriers sometimes add substantial fees and/or “fuel 

surcharges” to their ticket offerings. Carriers must fairly disclose those fees if they 

choose to separately state them in addition to including them in the total price. In the 

guidance discussed above, the Department stated that when a cost component is described 

as a fuel surcharge, that amount must reflect a reasonable estimate of the per-passenger 

fuel costs incurred by the carrier above some baseline calculation based on such factors as

the length of the trip, varying costs of fuel, and number of flight segments involved.

The Enforcement Office considers practices that do not comply with this guidance to be 

violations of 14 CFR 399.84(a) and to be unfair and deceptive practices in violation of 

49 U.S.C. § 41712. 

Analysis and Disposition

The Enforcement Office has considered Mr. Edelman’s complaint, as well as the other 

pleadings filed by both parties, and believes that British Airways has violated 14 CFR 

399.84(a) with respect to misrepresentations of its agent, oMC, on the oneworld booking 

 4 Answers to Frequently Asked Questions Concerning the Enforcement of the Second Final Rule on 

Enhancing Airline Passengers Protections (EAPP#2), Q. 14, pg. 29 (Aug. 19, 2011, revised on June 15, 

2012) available at http://www.dot.gov/sites/dot.gov/files/docs/EAPP_2_FAQ.pdf.

5 Additional Guidance on Airfare/Air Tour Price Advertisements (February 21, 2012), available at

http://www.dot.gov/individuals/air-consumer/additional-guidance-airfare-and-air-tour-price-advertisements.
5

engine. In relevant part, section 399.84(a) provides that a carrier may separately state the 

components of a fare, but those statements may not be false and misleading. We believe 

that the displays on the oMC site, as they existed prior to February 18, 2013, were in 

violation of the provisions of 14 CFR 399.84(a) as further discussed in the Enforcement 

Office's industry guidance of February 21, 2012. The Enforcement Office and British 

Airways have reached a negotiated settlement of this matter under which the carrier, 

without admitting the violations asserted above, consents to the issuance of this order to 

cease and desist from future similar violations of 14 CFR 399.84(a) and 49 U.S.C. 

§ 41712. However, as oMC promptly corrected the misleading displays of taxes and 

surcharges by February 18, 2013, within two weeks of the filing of Mr. Edelman's 

complaint against British Airways, we find that civil penalties are not warranted for these 

violations.

With regard to Mr. Edelman’s complaint about British Airways’ fuel surcharges, on July 

22, 2013, the Enforcement Office asked the carrier to provide affirmative justification of 

the fuel surcharge amounts for the routes Mr. Edelman refers to in his complaint. The 

Enforcement Office also requested that British Airways provide an explanation for its

calculations of the fuel surcharge revenue and actual fuel expenses regarding the two 

itineraries Mr. Edelman lists in his April 19, 2013 submission. British Airways provided 

the Enforcement Office with the requested information in a letter dated August 26, 2013,

with a request for confidential treatment.6 We have carefully considered British Airways’ 

response and the data that the carrier provided. We have concluded that the evidence 

does not support a finding that British Airways violated 14 CFR 399.84(a) by 

misrepresenting its actual fuel costs. Further, British Airways has ceased characterizing 

its surcharges as fuel surcharges and now describes them as “carrier charges.”

Finally, British Airways’ On Business company travel program involves small and 

medium-sized business enterprises that choose to accept the program’s Terms and 

Conditions on a contractual basis and is not available to the general public. As a matter of 

enforcement policy, the Enforcement Office has not enforced the full fare advertising rule 

in connection with private corporate booking tools, such as the one at issue here, because 

they are not available to the general public, they involve private contractual arrangements,

and the contracting parties are deemed to have notice and have accepted the carrier’s 

terms and conditions. 

This order is issued under the authority contained in 49 CFR Part 1.

 6 British Airways stated that the letter contained “commercially sensitive information” and requested that 

the letter “be withheld from public disclosure and accorded confidentiality protection to the full extent 

provided by all applicable laws and regulations, including 14 CFR 302.” The Enforcement Office has 

reviewed the information British Airways provided in its August 26, 2013, letter, and has granted British 

Airways’ request to withhold it from disclosure due to the commercially sensitive information it contains. 
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ACCORDINGLY,

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

this order as being in the public interest;

2. We find that British Airways PLC is responsible for the violation of 14 CFR 

399.84(a) that occurred when its agent, oneworld Management Company, Inc. (oMC), 

published fare displays that failed to accurately separate taxes and government fees from 

carrier-imposed fees and surcharges;

3. We find that the conduct described in paragraph 2 constitutes an unfair and 

deceptive trade practice in violation of 49 U.S.C. § 41712;

4. We order British Airways PLC and its successors and assignees, to cease and 

desist from similar violations of 14 CFR 399.84(a) and 49 U.S.C. § 41712 as described in 

ordering paragraphs 2 and 3, above; and

5. We dismiss the complaint filed in Docket DOT-OST-2013-0025. 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:

BLANE WORKIE

Acting Assistant General Counsel for

 Aviation Enforcement and Proceedings

(SEAL)

An electronic version of this document is available at www.regulations.gov.