Order 2013-8-24

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twenty-Ninth day of August, 2013

AAA Mid-Atlantic Inc. Docket OST 2013-0004

Served: August 29, 2013

Violations of 49 U.S.C. § 41712(a) and

14 CFR Part 257

CONSENT ORDER

This consent order concerns violations by the AAA Mid-Atlantic Inc. (AAA MidAtlantic) when it failed to disclose code-share arrangements as required by 49

U.S.C.§ 41712(c) and 14 CFR Part 257 during telephone airline reservation calls. These 

failures also constitute separate and distinct violations of 49 U.S.C. § 41712(a), the 

statutory prohibition against unfair and deceptive practices. The order directs AAA MidAtlantic to cease and desist from future violations of Part 257 and section 41712, and 

assesses $40,000 in civil penalties.

Applicable Law

AAA Mid-Atlantic is a ticket agent1 and is therefore subject to the detailed code-share 

disclosure requirements found in 49 U.S.C. § 41712(c) and 14 CFR 257.5(b). Under 

section 41712(c), any “ticket agent, air carrier, foreign air carrier, or other person offering 

to sell tickets for air transportation on a flight of an air carrier” is required to disclose 

“whether verbally in oral communication or in writing in written or electronic 

communication, prior to the purchase of a ticket[,] the name of the air carrier providing 

the air transportation; and if the flight has more than one segment, the name of each air 

carrier providing the air transportation for each such flight segment.” Failure to disclose 

the required information is an unfair or deceptive practice in violation of section 41712. 

Section 257.4 of the code-share disclosure rule states that the holding out or sale of 

scheduled passenger air transportation involving a code-sharing arrangement is an unfair 

 1 A “ticket agent” is “a person (except an air carrier, a foreign air carrier, or an employee of an air carrier or 

foreign air carrier) that as a principal or agent sells, offers for sale, negotiates for, or holds itself out as 

selling, providing, or arranging for air transportation.” 49 U.S.C. § 40102(a)(45).
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and deceptive trade practice in violation of section 41712, unless, in conjunction with that 

holding out or sale, carriers and agents follow certain requirements, including those of 

section 257.5(b). With regard to oral communications concerning a flight that is part of a 

code-sharing arrangement, section 257.5(b) states that a ticket agent or carrier must 

disclose to prospective consumers before they book the flight the existence of the codeshare arrangement, the corporate name of the transporting carrier, and any other name 

under which the flight is held out to the public. Violations of section 257.5(b) constitute 

unfair and deceptive trade practices and unfair methods of competition in violation of 

section 41712.

Facts and Conclusion

An investigation by the Office of Aviation Enforcement and Proceedings (Enforcement 

Office) revealed a significant lack of compliance by AAA Mid-Atlantic with section 

257.5(b) of the Department’s code-share rule and section 41712(c). For a period of time 

during January and February of 2013, Enforcement Office staff made a number of 

telephone calls to AAA Mid-Atlantic as potential purchasers and inquired about booking 

a flight. During these calls, the AAA Mid-Atlantic reservations agents answering the

calls failed to make the required disclosure regarding code-share arrangements for the 

flights in question. Specifically, when discussing flights marketed by one carrier but 

operated by another with the callers, AAA Mid-Atlantic’s reservation agents only 

identified the marketing carrier and did not identify the corporate name of the carrier 

operating the flight or any other name under which the flight is operated, even when 

prompted by the caller.

As interpreted by the Department, section 257.5(b) and 49 U.S.C. § 41712(c) require that 

oral code-share disclosures be provided whenever an agent first mentions a code-share 

flight in response to a specific consumer inquiry, including inquiries that may involve 

only a request for information. The telephone calls indicated that AAA Mid-Atlantic

generally failed to inform consumers booking flights involving code-share arrangements 

of the identity of the airline that would actually operate the aircraft on which the 

consumer would be flying.

Mitigation

In mitigation, AAA Mid-Atlantic states that it has taken multiple steps to ensure its 

compliance with the Department of Transportation’s code-share disclosure regulations. 

Specifically, AAA Mid-Atlantic states it has mandated that any and all current employees 

or agents who assist customers with airline reservations receive training on the codeshare disclosure regulations twice annually. Additionally, newly hired employees or 

agents who will assist customers with airline reservations must receive this training upon 

hiring and then must repeat the training twice annually. AAA Mid-Atlantic asserts it 

monitors its employees’ and agents’ compliance with these mandatory training 

requirements and will audit randomly its employees’ and agents’ communications with 

customers about airline flight reservations that involve code-sharing in order to determine 

the effectiveness of the required training and compliance with the code-share disclosure 
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regulations. Furthermore, AAA Mid-Atlantic states it has joined the American Society of 

Travel Agents, a professional trade association that educates its members about 

regulations applicable to the travel industry, including, but not limited to, the code-share 

disclosure regulations.

Decision

We view seriously the failure of AAA Mid-Atlantic to disclose code-sharing

arrangements as required by 49 U.S.C. § 41712(c) and 14 CFR 257.5(b). Accordingly, 

after carefully considering all of the facts in this case, including those set forth above, the 

Enforcement Office believes that enforcement action is warranted. In order to avoid 

litigation, AAA Mid-Atlantic agrees to the issuance of this order, to cease and desist from 

future similar violations of 49 U.S.C. § 41712 and 14 CFR 257.5(b), and to the 

assessment of $40,000 in compromise of potential civil penalties that otherwise might be 

imposed pursuant to 49 U.S.C. § 46301. We believe that this compromise assessment is 

appropriate in view of the nature and extent of the violations in question, serves the 

public interest, and provides a strong deterrent to non-compliance with the statute and the 

Department’s code-share disclosure rule.

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

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 by failing to disclose code-sharing arrangements as prescribed in 49 

U.S.C. § 41712(c) and 14 CFR 257.5(b), the AAA Mid-Atlantic Inc., violated 14 CFR 

257.5(b) and engaged in an unfair and deceptive trade practice in violation of 49 U.S.C. §

41712;

3. We order AAA Mid-Atlantic Inc., and all other entities owned or controlled by or 

under common ownership with AAA Mid-Atlantic Inc., its successors and assignees, to 

cease and desist from further violations of 49 U.S.C. § 41712 and 14 CFR 257.5(b);

4. We assess AAA Mid-Atlantic Inc., $40,000 in compromise of civil penalties that 

might otherwise be assessed for the violations found in ordering paragraph 2 above. Of 

this total penalty amount, $20,000 shall be due and payable within thirty (30) days of the 

date of the issuance of this order. The remaining portion of the civil penalty amount, 

$20,000, shall become due and payable immediately if, within one year of the date of 

issuance of this order, AAA Mid-Atlantic Inc., violates this order’s cease and desist 

provisions or fails to comply with the order’s payment provisions, in which case AAA 

Mid-Atlantic Inc., may be subject to additional enforcement action for violation of this 

order; and
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5. Payment shall be made through Pay.gov to the account of the U.S. Treasury in 

accordance with the instructions contained in the Attachment to this order. Failure to pay 

any portion of the penalty as ordered shall subject AAA Mid-Atlantic Inc., to the 

assessment of interest, penalty, and collection charges under the Debt Collection Act.

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:

SAMUEL PODBERESKY

Assistant General Counsel for 

 Aviation Enforcement and Proceedings

An electronic version of this document is available at 

www.regulations.gov