Order 2010-4-1 

•'^Ti? 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Issued by the Department of Transportation 

on the seventh day of April, 2010 

Prestige Cruise Holdings, Inc., 

Oceania Cruises, Inc., and Seven 

Seas Cruises S. de R.L. d/b/a 

Regent Seven Seas Cruises 

Violations of 49 U.S.C. § 41712 and 

14 CFR 399.84 

Docket DOT-OST 2010-0005 

Served April 7,2010 

CONSENT ORDER 

This consent order concerns advertisements by Prestige Cruise Holdings, Inc., 

through its subsidiaries, Oceania Cruises, Inc., ("Oceania Cruises") and Seven 

Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises ("Regent Cruises")^ 

(collectively "Prestige Cruises") that violate the Department's advertising 

requirements specified in section 399.84 of the Department's regulations 

(14 CFR 399.84) and constitute unfair and deceptive trade practices and unfair 

methods of competition in violation of 49 U.S.C. § 41712. This order directs 

Prestige Cruises to cease and desist from future violations and assesses the 

company compromise civil penalties of $75,000. 

Prestige Cruises, as a ticket agent selling air tour packages, including air and 

cruise package tours, is subject to the advertising requirements of Part 399 of the 

Department's rules. Under 14 CFR 399.84, any advertising that states a price for 

' Prestige Cruise Holdings, Inc. is a Panamanian corporation. It is the owner of 

Regent Cruises and Oceania Cruises, which sell and market the air cruise package tours 

and operate the cruise vessels. 
air transportation or an air tour is considered to be an unfair or deceptive 

practice in violation of 49 U.S.C. § 41712 unless the price stated is the entire price 

to be paid by the customer to the air carrier or ticket agent for such air 

transportation, tour or tour component. However, as a matter of enforcement 

policy, the Department has permitted air carriers and ticket agents to state 

separately from the advertised price taxes and fees imposed by a government on 

a per-passenger basis, such as passenger facility charges, so long as their 

amounts appear or are indicated clearly in the advertisement so that the 

consumer can determine the full price to be paid.^ Taxes and fees imposed on 

an ad valorem basis, however, must be included in the advertised price, lest 

consumers be confused about the total amount that must be paid. Similar notice 

must be provided when air fares are held out as "free," but governmentimposed taxes and fees must be paid by a passenger in order to utilize the "free" 

fare. On the other hand, carrier- or agent-imposed surcharges, e.g., fuel, 

insurance, and service charges, or other such costs, must be included in the 

advertised price. With respect to airfares and air tours advertised on the 

Internet, taxes and fees that are permitted to be excluded from the advertised 

price may be noted in a prominent link, placed proximately to the stated price, 

that takes the viewer to the bottom of the screen, or to a separate screen, where 

the nature and amount of such fees are displayed.^ 

Prestige Cruises specializes in offering ocean cruises, along with cruise travel 

packages, which include airfares, guided tours, and related amenities, 

throughout the world. Prestige Cruises has promoted its airfares and air travel 

packages in the United States through printed advertisements, brochures and 

other mailers, and by means of e-mail solicitations and advertisements that are 

published on Oceania Cruises' and Regent Cruises' web sites, 

www.Oceaniacruises.com and www.Rssc.com, respectively. 

An investigation by the Department's Office of Aviation Enforcement and 

Proceeding ("Enforcement Office") disclosed that the air fares and cruise and 

air tours promoted by Prestige Cruises in its brochures, flyers and other print 

advertisements, and on its web sites did not comply with Department 

requirements. Specifically, the listed prices for the complete air and cruise 

packages failed to include air-related fuel and service surcharges, which must 

be included in the advertised price, and failed to include an appropriate notice 

of the amount or nature of government taxes and fees that are not included in 

^ See, e.g., Costa Cruise Lines N.V., Order 2009-9-3. 

^ See, e.g., JTB Corporation, Order 2008-12-24, Trafalgar Tours West, Order 2007-8-24, 

Grand Circle Travel Corp, Order 2006-7-23, JetBlue Airways, Inc., Order 2004-2-4, and 

orders cited therein, and the notice entitled: Disclosure of Additional Fees, Charges 

and Restrictions on Air Fares in Advertisements, Including "Free" Airfares, which is 

dated September 4, 2003, as well as guidance letters to the industry which can be fovmd 

at: http://airconsumer.ost.dot.gov/rules/guidance.htm. 
the overall air plus cruise package price. In addition, the "free" air fares, as 

advertised, do not provide adequate notice that certain taxes and fees, which 

properly may be stated separately from the advertised fare, must be paid by 

the traveler in order to obtain the "free" air fare, nor of the amotmt of such 

taxes and fees. Moreover, certain Oceania Cruises advertisements stated that 

the "free" fare does not include air fuel surcharges, and that "an air ticketing 

fee," that is, a service charge, will apply.* 

By failing to provide appropriate notice that government-imposed taxes and fees 

must be paid by a passenger in order to utilize air fares advertised as "free," and 

by failing to include fuel surcharges imposed by carriers, or other surcharges 

such as a ticketing fee, collected by Prestige Cruises, in the advertised price of an 

air ticket or air tour package or a "free" air fare when the fare is first listed. 

Prestige Cruises violated the Department's regulations and enforcement case 

precedent. In addition to violating the requirements of section 399.84 and related 

Department precedent and enforcement policies, such practices constitute an 

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

We recognize the difficulties faced by some companies who may themselves be 

subject to "fuel surcharges" by airlines in their contracts with carriers in order to 

secure seats in advance. However, once a firm quotes through its advertising a 

specific price for a flight, tour or tour component, the firm must charge that 

price to the consumer. When an air tour seller advertises a specific price for a 

flight, tour or tour component, it must have available a reasonable inventory at 

the advertised price for a reasonable time period. To preclude there being a 

deceptive practice issue for flyers or brochures, a firm can state in its flyers and 

brochures that the prices it is advertising are good "as of" or "until" a date 

certain, and advise the consumer that availability of the advertised fares may be 

limited and current fares may be higher with notice as to where the current 

prices can be obtained. Fares held out on the Internet or in newspapers, or 

orally, however, must be ciu-rent and available. 

In mitigation and explanation. Prestige Cruises states that it takes its obligations 

under the Department's full fare advertising rule very seriously and that it has 

established an exemplary record in this regard. Prestige Cruises points out that 

it has never previously been the subject of a Department investigation or 

enforcement action. Prestige Cruises asserts that it takes great pride in 

advertising its products in a transparent manner and places the utmost 

importance not only on complying with the Department's rules and policies, but 

on marketing and selling its products in a clear and straightforward way. 

'^ Two other promotions featured by Oceania Cruises in its brochures and on its web 

site in June 2009 stated that the promotional offers do not include "air taxes and air fuel 

surcharges." 
Prestige Cruises further states that consumers have always been advised of 

additional charges in its advertising before making a purchase. The overwhelming majority of Prestige Cruises' customers booked their travel not 

online, but with the assistance of a trained and experienced travel professional. 

Regent's website contains no consumer booking engine. Thus, Regent Cruises 

could only be booked with the assistance of a travel professional, whether it be a 

travel agent or a call center representative. Likewise, although Oceania Cruises' 

web site does contain an online booking engine, according to Prestige Cruises, 

only a small number of Oceania Cruises' customers booked their cruise 

itineraries online. Prestige Cruises adds that, as with Regent Cruises, these 

customers were informed of all fees, taxes, and surcharges by an experienced 

travel professional, almost always of their own choosing. Prestige Cruises 

further explains that the consumer was always informed of the total price to be 

paid during that process and again when the consumer received his or her 

invoice. As a result, according to Prestige Cruises, at no time were consumers 

misled as to the final price to be paid for air-inclusive packages. Prestige 

Cruises maintains that no consumers were harmed as a result of its advertising 

practices. 

Additionally, when Prestige Cruises learned that the Enforcement Office was 

concerned about its advertising, the company contends that it took swift and 

comprehensive actions to address those concerns. The company also states that 

it immediately briefed all senior marketing executives on the Department's 

advertising rules and policies and revised the Oceania Cruises and Regent 

Cruises web sites. Prestige Cruises declares that, as soon as it was possible to do 

so, it informed its printing vendors immediately to discontinue all printings of 

2009 and 2010 company-issued advertisements inconsistent with the 

Department's policy. In some cases. Prestige Cruises recounts, printing was 

stopped only a few hours prior to the advertisements going to press at 

significant cost to Prestige Cruises. As soon as one week after it received notice 

of the Department's concerns about its advertising. Prestige Cruises says that it 

contacted all major travel agent partners to inform them of modifications to its 

advertising policies (discussed below) to ensure that from that point forward, 

travel agents only advertise Oceania Cruises' and Regent Cruises' products in a 

manner consistent with the Department's rules. In addition. Prestige Cruises 

explains that it sent email communications to 31,000 travel agents to inform 

them of the changes. Prestige Cruises further asserts that it trained its field and 

inside sales agents regarding its new advertising policies and has retained 

regulatory counsel that will conduct training sessions periodically and as 

required to ensure compliance with Department rules and policies. 

Finally, Prestige Cruises states that in the interest of offering customers a more 

simple pricing structure, both Regent Cruises and Oceania Cruises have 
implemented an all-inclusive pricing model in which all airline-imposed fuel 

surcharges and government taxes are now included within the advertised fare. 

The Enforcement Office has carefully considered all of the information available 

to it, including that provided by Prestige Cruises, but continues to believe that 

enforcement action is warranted. In this connection and in order to avoid 

litigation, the Enforcement Office and Prestige Cruises have reached a 

settlement in this matter. While neither admitting nor denying the above 

allegations. Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and Seven Seas 

Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises accept the findings and 

conclusions stated herein in order to avoid potential litigation. Under this 

order. Prestige Cruises is assessed $75,000 in compromise of potential penalties 

otherwise assessable under the provisions of 49 U.S.C. § 46301. Of this penalty 

amount, $37,500 shall be due and payable within 15 days of the issuance of this 

order. The remaining $37,500 shall become due and payable if, wdthin one year 

following the date of issuance of this order. Prestige Cruise Holdings, Inc., 

Oceania Cruises, Inc., and Seven Seas Cruises S. de R.L. d/b/ a Regent Seven 

Seas Cruises violate this order's cease and desist or payment provisions, in 

which case the entire sum will become due and payable immediately. 

The Enforcement Office believes that the assessment of a civil penalty of $75,000 

is appropriate in light of the nature and extent of the violations in question and 

wall provide an effective deterrent to unlawful conduct in the future by Prestige 

Cruises and other sellers of air transportation. 

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

385.15. 

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 Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and 

Seven Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises violated 

14 CFR 399.84, as described above, by causing to be published 

advertisements that failed to state the entire price to be paid by the 

passenger to the firm for certain air transportation; 
3. We find that by engaging in the conduct described in paragraph 2, 

above. Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and Seven 

Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises engaged in an 

unfair and deceptive practice and an unfair method of competition in 

violation of 49 U.S.C. § 41712; 

4. We order Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and 

Seven Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises and all 

other entities owniied and controlled by, or under common ownership and 

control with Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and 

Seven Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises, and their 

successors and assignees, to cease and desist from future violations of 

14 CFR 399.84 and 49 U.S.C. § 41712; 

5. Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and Seven Seas 

Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises are assessed $75,000 

in compromise of civil penalties that might otherwise be assessed for the 

violations found in ordering paragraphs 2 and 3 of this order. Of this 

penalty amount, $37,500 shall be due and payable within 15 days of the 

issuance of this order. The remaining $37,500 shall become due and 

payable if Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and 

Seven Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises fail to 

comply with the payment provisions of this order, or, within one year 

following the date of issuance of this order, violates this order's cease and 

desist provisions, in which case the entire sum will become due and 

payable immediately and Prestige Cruise Holdings, Inc., Oceania Cruises, 

Inc., and Seven Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises 

may be subject to additional enforcement action; 

6. Failure to pay the compromise assessment as ordered shall subject 

Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and Seven Seas 

Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises to the assessment of 

interest, penalty, and collection charges under the Debt Collection Act; 

7. Payment shall be made by wire transfer through the Federal Reserve 

Communications System, commonly known as "Fed Wire," to the 

account of the U.S. Treasury. The wire transfer shall be executed in 

accordance with the instructions contained in the Attachment to this 

order; and 
8. We order Prestige Cruise Holdings, Inc., Oceania Cruises, Inc., and 

Seven Seas Cruises S. de R.L. d/b/ a Regent Seven Seas Cruises to submit 

to the Office of Aviation Enforcement and Proceedings copies of (a) all 

advertisements of air tours or air tour components it causes to be 

published in printed format or circulates as current during the last 30 

days of the one-year period following the issuance of this order; and (b) 

printouts of screen displays advertising air tour prices on its Internet site 

for the 15* day of each month during the one-year period following 

issuance of this order. This material shall be submitted within 15 days of 

the conclusion of the referenced one-year period. 

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

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

own motion. 

BY: 

ROSALEsJD A. KNAPP 

Deputy General Counsel 

(SEAL) 

An electronic version of this document is available 

at wwrw.regulations.gov