BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

British Airways Multiple Price Advertising Violations of 49 U.S.C. § 41712 and 14 CFR 399.84(a) Docket DOT

- OST

- 2013

- 0025

COMMENT S IN SUPPORT OF DOT INVESTIGATION INTO BRITISH AIRWAYS

PLC VIOLATIONS AND ADDITIONAL FACTS

Communications with respect to this document should be sent to:

Mike Borsetti 1 Montgomery St Ste 2500 San Francisco, CA 94104 mike@borsetti.com

21 March 20131 BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

British Airways Multiple Price Advertising Violations of 49 U.S.C. § 41712 and 14 CFR 399.84(a) Docket DOT

- OST

- 2013

- 0025

COMMENT S IN SUPPORT OF DOT INVESTIGATION INTO BRITISH AIRWAYS

PLC VIOLATIONS AND ADDITIONAL FACTS

I strongly encourage the Secretary to exercise its authority under 49 U.S.C. § 41712 to investigate and impose sanction s on British Airways for the unfair and deceptive practices described in Mr. Edelman’s complaint, Document DOT

- OST

- 2013

- 0025

- 0001 , and in doing so fulfill its mission.
This is a matter of interest to the general traveling public, as evidenced by the relativ ely high number of comments entered in the proceeding by travelers who are generally unmoved by most of DOT proceedings.
In addition, I would like to provide the following additional information to the Secretary in aiding its decision making

.

B RITISH A IRWA YS F UEL S URCHARGES E XCEED THE T OTAL C OST OF F UEL (L ET A LONE TO C OSTS A BOVE A B ASELINE )2

I utilized data availabl e from British Airways and IATA to estimate British Airways fuel costs and came to the same conclusion of Mr. Edelman, that there is strong evidence that British Airways fuel surcharge is excessive, deceiving , and that therefore it is the Secretary’s duty to investigate.
British Airways states in its annual report 1 that in 2012 it flew 158,247 million available seat kilometres (ASK) (page 5) u sing “approximately 5.6 million tonnes of jet fuel” (page 11 ).
Using simple math, 35.388 g of jet fuel were consumed for each available seat kilometer. Utilizing the current highest average price paid at the refinery for aviation jet fuel compiled

1 British Airways plc. (2013, March 13). British Airways Plc Report and Accounts year ended 31 December 2012

. Retrieved 21 March 2013 from http://phx.corporate

ir.net/External.File?item=UGFyZW50SUQ9MTc1Njk3fENoaWxkSUQ9LTF8VHlwZT0z&t=1 $42,423 $82,231

$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000

Income from fuel surcharge Total cost of fuel 

## BOS
- LHR single 777 flight (estimate)3

weekly b y IATA 2 , USD 1009.5 per tonne, the average cost of fuel to British Airways is approximately $0.035724 per available seat kilometer.
Applying this to Mr. Edelman’s example of the BOS

- LHR route , a 3265 mile great circle distance (5255 km) operated by a 226

- s eat aircraft, today ’s cost of fuel to British would be approximately $42,423, far exceeding the $82,231 in income from fuel surcharges as correctly estimated by Mr. Edelman.

One should note that the above cost exceeds the actual fuel costs as a network average cost was utilized , but this route is both longer than the average British Airways route ( as the network includes domestic and European operations) and is operated by an aircraft that is larger than the average British Airways aircraft (which includ es many narrow bodies ) and therefore is cheaper to operate on an ASK basis than the average. In other words, the cost estimates provided are therefore too high.

Th e figure above graphically depicts the estimates.

I also see that Ms. Kathleen Voss in DOT

- OS T

- 2013

- 0056 supports Mr. Edelman’s cost estimates as well.

B RITISH A IRWAYS F UEL S URCHARGES H AVE N O R ELATIONSHIP TO F UEL C ONSUMPTION (L ET A LONE TO C OSTS A BOVE A B ASELINE )
British Airways describes fuel surcharges on its website 3 as follows:

2 International Air Transport Association (IATA) (2013, March 15), Fuel Price Analysis . Retrieved 21 March 2013 from http://www.iata.org/publications/economics/fuel

- monitor/Pages/price

- analysis.aspx4

However, British Airways f uel s urcharges have no bearing whatsoever with any “reasonable estimate of the per

- passenger fuel cost incurred by the carrier above some baseline” as required by DOT rules and guidance.

I searched on the US version of British Airways’ w ebsite for a flight in Economy class from New York City to Londo n and the p rice offered included a f uel s urcharge of $229 (see Exhibit 1)

.

3 Briti sh Airways, Government taxes and fees and airline fuel surcharge . Retrieved 21 March 2013 from http://www.britishairways.com/travel/seccharge/public/en_us

$220 $221 $222 $223 $224 $225 $226 $227 $228 $229 $230

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Fuel surcharge for the whole trip

Miles traveled 

# Fuel surcharge and distance
- no

relationship5

I further searched for a journey starting with the exact same flight obtained above and connecting in London onwards to Doha, and the pricing for this journey, which is approximately 94% longer, included a f uel s urcharge of $221, or $8 less than the f uel s urcharge charged by British Airways to travel to the intermediate city of London (see Exhibit 2).

Th e figure above graphically depicts my findings.

R ESOLUTION In view of the preponderant evidence and public support, the Secretary should open an investigation on British Airways under 49 U.S.C. § 41712 without further delay.

T he complaint provides evidence that British Airways was first made aware of the violation s on 7 June 2012, and to this day is continuing to engage in the unfair and deceptive

manner s described. I strongly urge the Secretary to take into account each day from that date as a separate violation when im pos ing a civil penalty as per 49 USC § 46301

.6

A ttachment 1 : JFK

- LHR price quote from BA.com, 20 March 2013 approx. 17:00 PT7

Exhibit 2 : JFK

- DOH price quote from BA.com, 20 March 2013 approx. 17:00 PT