2015

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 22nd day of January

, 2015

Lufthansa German Airlines

Docket OST 201 5

- 0002

Violations of 49 U.S.C. § 41712 Served January 22, 201 5

CONSENT ORDER

This order concerns violations by Lufthansa German Airlines (Lufthansa) of the statutory prohibition against unfair and deceptive practices, 49 U.S.C. § 41712

. It directs

Lufthansa to cease and desist from future similar violations and assesses the carrier $ 30,000 in civil penalties.

Applicable Law

As a foreign air carrier, Lufthansa is subject to 49 U.S.C. § 41712, which grants the Department broad authority to prohibit unfair or deceptive practices or unfair methods of competition in air transportation. A practice is deemed to be unlawful if it is likely to mislead a consumer acting reasonably in the circumstances to his or her detriment. It is misleading for a carrier to advertise on its website a fare for a specific itinerary but not make that fare available for purchase on that website. This means that if a carrier

advertises a fare for a specific itinerary in response to a consumer search on its Internet

website

, that fare must be available for purchase on that website. The Department holds that providing erroneous and misleading information in connection with fare

advertisements to be a violation of 49 U.S.C. § 41712

. 1

1 Cf. Spirit Airlines , Order 2008

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- 14 (December 23, 2008); See also Industry Letter from Secretary Peña to U.S. Air Carriers and Air Travel Industry Associations and Labor Unions (dated December 20, 1994)

.2

Facts

In response to a consumer complaint, the Office of Aviation Enforcement and Proceedings (Enforcement Office) investigated Lufthansa’s U.S. website

. The

Enforcement Office found that f or a short period in November 2013, Lufthansa

advertised fares in its fare matrix that could not be purchased on its website depending on how a consumer entered his or her search parameters

. 2 Specifically, in response to

certain consumer search es for a roundtrip fare to and from the United States , Lufthansa ’s

U.S. website first displayed a fare matrix that included economy fares that were the

lowest fare s purportedly available for specific date combinations . However, in some

instances a fter selecting an itinerary and proceeding through the booking process, the

lowest fares that were advertised in the fare matrix were omitted . Therefore, certain

c onsumers could not purchase the lowest fares on website. By advertising fares on its

U.S. website that could not be purchas ed on that website, Lufthansa violated 49 U.S.C. § 41712.

Mitigation

In mitigation, Lufthansa states that it is fully committed to compliance with respect to aviation consumer protection laws

. According to t he carrier

, Lufthansa Group carriers have been at the forefront of customer satisfaction and voluntarily implemented many of the policies contained in the Enhanced Airline Passenger Protection regulations and Part

382 before their enactment.

Lufthansa states that at no point in time were there “no seats available” for purchase at

the listed fares. Lufthansa states that there were in fact numerous seats at the lowest fare booking class readily available for purchase but due to an inadvertent technical error, the

fare sale was not available on the website for a limited time. Lufthansa emphasizes that it did not receive any consumer complaints and the Department received only on e consumer complaint concerning the lack of availability of the fares

. Furthermore,

Lufthan sa states that it proactively contacted the passenger and honored the quoted fare.

Lufthansa explains that during a periodic system update to its website, fares for the

lowest booking class failed to properly update. Lufthansa further explains that d ue to this technical error, the lowest fare s were displayed on the Fare Matrix page, but may not have been displayed on the Fare Selection page where the customer would make their final flight selection d epending on how a consumer entered his or her search parameters

. Lufthansa states that this technical error did not affect searches for one

- way and multi

stop flights, searches based on flight flexibility

, or tickets sold in other distribution

channels , such as booking through travel agents or through Luft hansa’s own telephone

reservations centers

. Lufthansa states that u pon learning of the technical problem, it took immediate corrective action to fix the problem.

2 Lufthansa states that the technical error only affected searches f or roundtrip flights origi nating from the United States; searches for one

- way and multi

- stop flights were unaffected.3

Lufthansa states that it respectfully disagrees with the Enforcement Office’s view that a technical malfunction of its website constitutes a violation of 49 U.S.C. § 41712.

Lufthansa states that , in the interest of settling this proceeding, and without conceding or waiving its l egal position on that question, it is agreeing to a settlement in this matter.

Decision

The Enforcement Office has carefully considered the infor mation provided by Lufthansa

, but continues to believe enforcement action is warranted. In order to avoid litigation, the

Enforcement Office and Lufthansa ha ve agreed to settle ment in this matter . Without admitting or denying the violations described above, Lufthansa consents to the issuance

of this order to cease and desist from future simi lar violations 49 U.S.C. § 41712, and to
the assess ment of $ 30,000 in compromise of potential civil penalties otherwise due and payable pursuant to 49 U.S.C. § 46301. The compromise assessment is appropriate considering the nature and extent of the violat ions described herein and serves as a deterrent to Lufthansa and other carriers

.

This order is issued under the authority contained in 14 CFR Part 1

.

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 Lufthansa German Airlines violated 49 U.S.C. § 41712 by advertising

fares in response to consumer searches on its U.S. website that could not be purchased on that website ;

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

Lufthansa German Airlines ;

4. We order Lufthansa German Airlines, its successors, its affiliates, and all other entities owned by, controlled by, or under common ownership and control with

Lufthansa German Airlines, its succe ssors, its affiliates, and its assigns to cease and

desist from future similar violat ions of 49 U.S.C. § 41712 ;

5. We assess Lufthansa German Airlines $ 30,000 in compromise of civil penalties that might otherwise be assessed for the violations described in ordering paragraphs 2,

above . Of this total penalty amount, $15,000 shall be due and payable within thirty (30) days of the date of issuance of this order. The remaining portion of the civil penalty amount, $15,000, shall become due and payable immediately if, within one year of the date of issuance of this order, Lufthansa German Airlines violates this order’s cease and desist provisions or fails to comply with the order’s payment provisions, in which case Lufthansa German Airlin es may be subject to additional

enforcement action for violation of this order ; and4

6. We order Lufthansa German Airlines to pay the penalty through Pay.gov to the account of the U.S. Treasury. Payments shall be made in accordance with the instructions contained in the Attachment to this order. Failure to pay the penalty as ordered shall subject Lufthansa German Airlines to the assessment of interest, penalty, and collection charges under the Debt Collection Act and to further enforcement action for failing to comply with this order.

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

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

motion.

BY:

BLANE A. WORKIE

Assistant General Counsel for

Aviation Enforcement and Proceedings

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