Orde r 2010-4- 1

•'^Ti ? UNITE D STATE S O FAMERIC A

DEPARTMEN T O FTRANSPORTATIO N OFFIC EO FTH ESECRETAR Y WASHINGTON , D.C . Issue db y th e Departmen t o f Transportatio n o nth e sevent hda y o f

April , 201 0 Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve n Sea s Cruise s S . d e R.L . d/b/ a Regen t Seve n Sea s Cruise s Violation s o f

4 9 U.S.C . § 4171 2 an d 1 4 CF R399.8 4 Docke t DOT-OS T 2010-000 5 Serve dApri l 7,201 0

CONSEN T ORDE R Thi s consen t

orde r concern s advertisement s b y Prestig e Cruis e Holdings , Inc. , throug hit s subsidiaries , Oceani aCruises , Inc. , ("Oceani aCruises" ) an dSeve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s ("Regen t Cruises") ^ (collectivel y "Prestig e Cruises" ) tha t violat e th e Department' s advertisin g requirement s specifie di n sectio n399.8 4 o f th e Department' s regulation s (1 4 CF R399.84 ) an dconstitut e unfai r an ddeceptiv e trad e practice s an dunfai r method s o f

competitio n i n violatio no f 4 9 U.S.C . § 41712 . Thi s orde r direct s Prestig e Cruise s t o ceas e an ddesis t fro mfutur e violation s an dassesse s th e compan y compromis e civi l penaltie s o f $75,000 . Prestig e Cruises , a s aticke t agen t sellin g ai r

tou r packages , includin g ai r an d cruis e packag e tours , i s subjec t t o th e advertisin g requirement s o f Par t 39 9 o f th e Department' s rules . Unde r 1 4 CF R399.84 , an y advertisin g tha t state s apric e fo r

' Prestig e Cruis e Holdings , Inc . i s aPanamania ncorporation . I t i s th e owne r

o f Regen t Cruise s an dOceani aCruises , whic hsel l an dmarke t th e ai r cruis e packag e tour s an doperat e th e cruis e vessels .ai r

transportatio n o r

a n ai r tou r i s considere dt o b e a nunfai r o r deceptiv e practic e i n violatio n o f

4 9 U.S.C . § 4171 2 unles s th e pric e state di s th e entir e pric e t o b e pai db y th e custome r t o th e ai r

carrie r o r ticke t agen t fo r suc hai r transportation , tou r

o r tou r component . However , a s amatte r o f enforcemen t policy , th e Departmen t ha s permitte dai r

carrier s an dticke t

agent s t o stat e separatel y fro mth e advertise dpric e taxe s an dfee s impose db y agovernmen t o n aper-passenge r

basis , suc ha s passenge r facilit y charges , s o lon g a s thei r amount s appea r

o r ar e indicate dclearl y i nth e advertisemen t s o tha t

th e consume r

ca n determin e th e ful l pric e t o b e paid. ^ Taxe s an dfee s impose do n a n a dvalore mbasis , however , mus t b e include di nth e advertise dprice , les t consumer s b e confuse dabou t th e tota l amoun t

tha t mus t b e paid . Simila r

notic e mus t b e provide dwhe n ai r fare s ar e hel dou t

a s "free, " bu t

government impose dtaxe s an dfee s mus t b e pai db y apassenge r i norde r t o utiliz e th e "free " fare . O nth e othe r

hand , carrier

- o r

agent-impose dsurcharges , e.g. , fuel , insurance , an dservic e charges , o r othe r suc hcosts , mus t

b e include di nth e advertise dprice . Wit hrespec t t o airfare s an dai r

tour s advertise do nth e Internet , taxe s an dfee s tha t ar e permitte dt o b e exclude dfro mth e advertise d pric e ma y b e note di n aprominen t link , place dproximatel y t o th e state dprice , tha t take s th e viewe r

t o th e botto mo f

th e screen , o r

t o aseparat e screen , wher e th e natur e an damoun t o f suc hfee s ar e displayed. ^ Prestig e Cruise s specialize s i nofferin g ocea ncruises , alon g wit hcruis e trave l packages , whic hinclud e airfares , guide dtours , an drelate damenities , throughou t

th e world . Prestig e Cruise s ha s promote dit s airfare s an dai r trave l package s i nth e Unite dState s throug hprinte dadvertisements , brochure s an d othe r mailers , an db y mean s o f e-mai l solicitation s an dadvertisement s tha t ar e publishe do n Oceani aCruises ' an dRegen t Cruises ' we b sites , www.Oceaniacruises.co man dwww.Rssc.com , respectively . A n investigatio n b y th e Department' s Offic e o f Aviatio nEnforcemen t an d Proceedin g ("Enforcemen t Office" ) disclose dtha t th e ai r fare s an dcruis e an d ai r tour s promote db y Prestig e Cruise s i nit s brochures , flyer s an dothe r prin t advertisements , an do n it s we b site s di dno t compl y wit hDepartmen t requirements . Specifically , th e liste dprice s fo r th e complet e ai r

an dcruis e package s faile dt o includ e air-relate dfue l an dservic e surcharges , whic hmus t b e include di n th e advertise dprice , an dfaile dt o includ e a nappropriat e notic e o f th e amoun t

o r natur e o f

governmen t

taxe s an dfee s tha t

ar e no t include di n

^ See , e.g. , Cost aCruis e Line s N.V. , Orde r 2009-9-3 . ^ See , e.g. , JT

B Corporation , Orde r

2008-12-24 , Trafalgar

Tour s West , Orde r

2007-8-24 , Gran dCircl e Trave l Corp , Orde r 2006-7-23 , JetBlu e Airways , Inc. , Orde r 2004-2-4 , an d order s cite dtherein , an dth e notic e entitled : Disclosur e o f Additiona l Fees , Charge s an dRestriction s o n Ai r

Fare s i n Advertisements , Includin g "Free " Airfares , whic hi s date dSeptembe r

4 , 2003 , a s wel l a s guidanc e letter s t o th e industr y whic hca nb e fovm d at : http://airconsumer.ost.dot.gov/rules/guidance.htm .th e overal l ai r plu s cruis e packag e price . I naddition , th e "free " ai r fares , a s advertised , d o no t

provid e adequat e notic e tha t certai ntaxe s an dfees , whic h properl y ma y b e state dseparatel y fro mth e advertise dfare , mus t b e pai db y th e travele r

i n orde r

t o obtai nth e "free " ai r fare , no r

o f th e amotm t

o f suc h taxe s an dfees . Moreover , certai nOceani aCruise s advertisement s state dtha t th e "free " far e doe s no t includ e ai r

fue l surcharges , an dtha t "a nai r ticketin g fee, " tha t is , aservic e charge , wil l apply. * B y failin g t o provid e appropriat e notic e tha t government-impose dtaxe s an dfee s mus t b e pai db y apassenge r i norde r t o utiliz e ai r

fare s advertise da s "free, " an d b y failin g t o includ e fue l surcharge s impose db y carriers , o r othe r surcharge s suc ha s aticketin g fee , collecte db y Prestig e Cruises , i nth e advertise dpric e o f a n ai r ticke t o r ai r tou r packag e o r

a"free " ai r

far e whe nth e far e i s firs t listed . Prestig e Cruise s violate dth e Department' s regulation s an denforcemen t cas e precedent . I n additio n t o violatin g th e requirement s o f sectio n399.8 4 an drelate d Departmen t

preceden t

an denforcemen t

policies , suc hpractice s constitut e a n unfai r an ddeceptiv e trad e practic e i nviolatio no f 4 9 U.S.C . § 41712 . W e recogniz e th e difficultie s face db y som e companie s wh o ma y themselve s b e subjec t t o "fue l surcharges " b y airline s i nthei r contract s wit hcarrier s i norde r t o secur e seat s i n advance . However , onc e afir mquote s throug hit s advertisin g a specifi c pric e fo r

aflight, tou r

o r tou r component , th e firmmus t charg e tha t pric e t o th e consumer . Whe n a nai r tou r selle r advertise s aspecifi c pric e fo r a flight, tou r

o r tou r component , i t

mus t hav e availabl e areasonabl e inventor y a t th e advertise dpric e fo r areasonabl e tim e period . T o preclud e ther e bein g a deceptiv e practic e issu e fo r flyers o r

brochures , afirmca nstat e i nit s flyers an d brochure s tha t

th e price s i t

i s advertisin g ar e goo d"a s of" o r "until " adat e certain , an dadvis e th e consume r tha t availabilit y o f

th e advertise dfare s ma y b e limite dan dcurren t

fare s ma y b e highe r

wit hnotic e a s t o wher e th e curren t price s ca n b e obtained . Fare s hel dou t o nth e Interne t

o r i nnewspapers , o r orally , however , mus t

b e ciu-ren t

an davailable . I n mitigatio n an dexplanation . Prestig e Cruise s state s tha t i t take s it s obligation s unde r th e Department' s ful l far e advertisin g rul e ver y seriousl y an dtha t i t ha s establishe da n exemplar y recor di nthi s regard . Prestig e Cruise s point s ou t tha t i t ha s neve r

previousl y bee nth e subjec t o f aDepartmen t

investigatio no r enforcemen t

action . Prestig e Cruise s assert s tha t i t take s grea t

prid e i n advertisin g it s product s i n atransparen t manne r

an dplace s th e utmos t importanc e no t

onl y o n complyin g wit hth e Department' s rule s an dpolicies , bu t o nmarketin g an dsellin g it s product s i naclea r an dstraightforwar dway .

' ^ Tw o othe r

promotion s feature db y Oceani aCruise s i nit s brochure s an do nit s we b sit e i n Jun e 200 9 state dtha t th e promotiona l offer s d o no t includ e "ai r

taxe s an dai r

fue l surcharges. "Prestig e Cruise s furthe r state s tha t

consumer s hav e alway s bee nadvise do f additiona l charge s i n it s advertisin g befor e makin g apurchase . Th e over whelmin g majorit y o f Prestig e Cruises ' customer s booke dthei r trave l no t online , bu t

wit hth e assistanc e o f atraine dan dexperience dtrave l professional . Regent' s websit e contain s n o consume r bookin g engine . Thus , Regen t Cruise s coul donl y b e booke dwit hth e assistanc e o f atrave l professional , whethe r i t b e a trave l agen t

o r acal l cente r

representative . Likewise , althoug hOceani aCruises ' we b sit e doe s contai n a n onlin e bookin g engine , accordin g t o Prestig e Cruises , onl y asmal l numbe r o f Oceani aCruises ' customer s booke dthei r cruis e itinerarie s online . Prestig e Cruise s add s that , a s wit hRegen t Cruises , thes e customer s wer e informe do f al l fees , taxes , an dsurcharge s b y a nexperience d trave l professional , almos t alway s o f

thei r ow nchoosing . Prestig e Cruise s furthe r explain s tha t

th e consume r

wa s alway s informe do f th e tota l pric e t o b e pai ddurin g tha t

proces s an dagai nwhe nth e consume r receive dhi s o r

he r invoice . A s aresult , accordin g t o Prestig e Cruises , a t n o tim e wer e consumer s misle da s t o th e final pric e t o b e pai dfo r air-inclusiv e packages . Prestig e Cruise s maintain s tha t n o consumer s wer e harme da s aresul t o f it s advertisin g practices . Additionally , whe n Prestig e Cruise s learne dtha t th e Enforcemen t

Offic e wa s concerne dabou t

it s advertising , th e compan y contend s tha t i t too k swif t an d comprehensiv e action s t o addres s thos e concerns . Th e compan y als o state s tha t i t immediatel y briefe dal l senio r marketin g executive s o nth e Department' s advertisin g rule s an dpolicie s an drevise dth e Oceani aCruise s an dRegen t Cruise s we b sites . Prestig e Cruise s declare s that , a s soo na s i t wa s possibl e t o d o so , i t informe dit s printin g vendor s immediatel y t o discontinu e al l printing s o f 200 9 an d201 0 company-issue dadvertisement s inconsisten t wit hth e Department' s policy . I n som e cases . Prestig e Cruise s recounts , printin g wa s stoppe donl y afe w hour s prio r t o th e advertisement s goin g t o pres s a t significan t

cos t t o Prestig e Cruises . A s soo na s on e wee k afte r i t receive dnotic e o f th e Department' s concern s abou t it s advertising . Prestig e Cruise s say s tha t i t contacte dal l majo r

trave l agen t

partner s t o infor mthe mo f modification s t o it s advertisin g policie s (discusse dbelow ) t o ensur e tha t fro mtha t

poin t forward , trave l agent s onl y advertis e Oceani aCruises ' an dRegen t Cruises ' product s i n a manne r consisten t

wit hth e Department' s rules . I naddition . Prestig e Cruise s explain s tha t

i t sen t emai l communication s t o 31,00 0 trave l agent s t o infor m the mo f th e changes . Prestig e Cruise s furthe r assert s tha t

i t traine dit s fieldan d insid e sale s agent s regardin g it s ne w advertisin g policie s an dha s retaine d regulator y counse l tha t wil l conduc t

trainin g session s periodicall y an da s require dt o ensur e complianc e wit hDepartmen t rule s an dpolicies . Finally , Prestig e Cruise s state s tha t i nth e interes t

o f offerin g customer s amor e simpl e pricin g structure , bot hRegen t Cruise s an dOceani aCruise s hav eimplemente da n all-inclusiv e pricin g mode l i nwhic hal l airline-impose dfue l

surcharge s an dgovernmen t taxe s ar e no w include dwithi nth e advertise dfare . Th e Enforcemen t

Offic e ha s carefull y considere dal l o f th e informatio navailabl e t o it , includin g tha t

provide db y Prestig e Cruises , bu t continue s t o believ e tha t enforcemen t

actio n i s warranted . I nthi s connectio nan di norde r t o avoi d litigation , th e Enforcemen t Offic e an dPrestig e Cruise s hav e reache da settlemen t

i n thi s matter . Whil e neithe r admittin g no r

denyin g th e abov e allegations . Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve nSea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s accep t th e finding s an d conclusion s state dherei n i n orde r t o avoi dpotentia l litigation . Unde r thi s order . Prestig e Cruise s i s assesse d$75,00 0 i ncompromis e o f potentia l penaltie s otherwis e assessabl e unde r th e provision s o f

4 9 U.S.C . § 46301 . O f thi s penalt y amount , $37,50 0 shal l b e du e an dpayabl e withi n1 5 day s o f th e issuanc e o f

thi s order . Th e remainin g $37,50 0 shal l becom e du e an dpayabl e if , wdthi non e yea r followin g th e dat e o f

issuanc e o f

thi s order . Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve nSea s Cruise s S . d e R.L . d/b/ aRegen t Seve n Sea s Cruise s violat e thi s order' s ceas e an ddesis t o r paymen t

provisions , i n whic hcas e th e entir e su mwil l becom e du e an dpayabl e immediately . Th e Enforcemen t

Offic e believe s tha t

th e assessmen t

o f acivi l penalt y o f

$75,00 0 i s appropriat e i n ligh t

o f th e natur e an dexten t o f th e violation s i nquestio nan d wal l provid e a n effectiv e deterren t t o unlawfu l conduc t

i nth e futur e b y Prestig e Cruise s an dothe r

seller s o f

ai r transportation . Thi s orde r

i s issue dunde r

th e authorit y containe di n4 9 CF R1.57 aan d1 4 CF R 385.15 . ACCORDINGLY , 1 . Base do n th e abov e discussion , w e approv e thi s settlemen t an dth e provision s o f

thi s orde r

a s bein g i nth e publi c interest ; 2 . W e findtha t

Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an d Seve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s violate d 1 4 CF R399.84 , a s describe dabove , b y causin g t o b e publishe d advertisement s tha t

faile dt o stat e th e entir e pric e t o b e pai db y th e passenge r

t o th e firmfo r

certai nai r

transportation ;3 . W e fin dtha t b y engagin g i nth e conduc t describe di nparagrap h2 , above . Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s engage di na n unfai r an ddeceptiv e practic e an da nunfai r metho do f

competitio ni n violatio no f

4 9 U.S.C . § 41712 ; 4 . W e orde r

Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an d Seve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s an dal l othe r entitie s owniie dan dcontrolle dby , o r unde r commo nownershi p an d contro l wit hPrestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an d Seve nSea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruises , an dthei r successor s an dassignees , t o ceas e an ddesis t fro mfutur e violation s o f 1 4 CF R399.8 4 an d4 9 U.S.C . § 41712 ; 5 . Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve nSea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s ar e assesse d$75,00 0 i n compromis e o f

civi l penaltie s tha t

migh t otherwis e b e assesse dfo r th e violation s foun di n orderin g paragraph s 2 an d3 o f thi s order . O f

thi s penalt y amount , $37,50 0 shal l b e du e an dpayabl e withi n1 5 day s o f th e issuanc e o f

thi s order . Th e remainin g $37,50 0 shal l becom e du e an d payabl e if

Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an d Seve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s fai l t o compl y wit hth e paymen t provision s o f

thi s order , or , withi non e yea r followin g th e dat e o f

issuanc e o f

thi s order , violate s thi s order' s ceas e an d desis t provisions , i n whic hcas e th e entir e su mwil l becom e du e an d payabl e immediatel y an dPrestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s ma y b e subjec t

t o additiona l enforcemen t action ; 6 . Failur e t o pa y th e compromis e assessmen t a s ordere dshal l subjec t Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an dSeve nSea s Cruise s S . d e R.L . d/b/ aRegen t Seve nSea s Cruise s t o th e assessmen t o f interest , penalty , an dcollectio ncharge s unde r th e Deb t

Collectio nAct ; 7 . Paymen t

shal l b e mad e b y wir e transfe r throug hth e Federa l Reserv e Communication s System , commonl y know na s "Fe dWire, " t o th e accoun t o f th e U.S . Treasury . Th e wir e transfe r shal l b e execute di n accordanc e wit hth e instruction s containe di nth e Attachmen t t o thi s order ; an d

### 8 . W e orde r Prestig e Cruis e Holdings , Inc. , Oceani aCruises , Inc. , an d Seve n Sea s Cruise s S . d e R.L . d/b/ aRegen t Seve n Sea s Cruise s t o submi t t o th e Offic e o

f Aviatio n Enforcemen t

an dProceeding s copie s o f (a) al l advertisement s o

f ai r tour s o r

ai r tou r component s i t

cause s t o b e publishe di n printe dforma t o r circulate s a s curren t

durin g th e las t

3 0 day s o f th e one-yea r

perio dfollowin g th e issuanc e of thi s order ; an d(b ) printout s o

f scree n display s advertisin g ai r tou r price s o n it s Interne t

sit e for th e 15 * da y o

f eac hmont hdurin g th e one-yea r perio dfollowin g issuanc e o

f thi s order . Thi s materia l shal l b e submitte dwithi n 1 5 day s o f th e conclusio n o

f th e reference done-yea r

period . Thi s orde r

wil l becom e afinal orde r o f th e Departmen t

1 0 day s after

it s servic e unles s atimel y petitio n for revie w i s filedo r

th e Departmen t

take s revie w o n it s ow n motion . BY :
ROSALEsJ D A . KNAP P Deput y Genera l Counse l (SEAL )

A n electroni c versio n o f thi s documen t

i s availabl e a t wwrw.regulations.go v