BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ ) Benjamin Edelman, ) third-party complainant ) ) v. ) Docket OST-2013-0027 ) Cathay Pacific Airways Limited ) __________________________________________)

ANSWER OF CATHAY PACIFIC AIRWAYS LIMITED

TO THIRD-PARTY COMPLAINT

Communications with respect to this document should be sent to: John R. Mietus, Jr. Law Office of John Mietus, LLC 6701 Democracy Blvd., Suite 300 Bethesda, MD 20817- 7500 (202) 747-5212 (240) 396-5362 fax john@mietuslaw.com
Counsel for CATHAY PACIFIC AIRWAYS LIMITED

March 7, 2013BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ ) Benjamin Edelman, ) third-party complainant ) ) v. ) Docket OST-2013-0027 ) March 7, 2013 Cathay Pacific Airways Limited ) __________________________________________)

ANSWER OF CATHAY PACIFIC AIRWAYS LIMITED

TO THIRD-PARTY COMPLAINT Pursuant to 14 C.F.R. § 302.405(a) , Cathay Pacific Airways Limited answers the above-captioned February 6, 2013 complaint and, for the reasons set forth herein, urges the Department to dismiss the complaint without further investigation or action. 1 As with many carriers worldwide, Cathay ’s flights may be incorporated by prospective passengers into specialized “around -the

- world” (RTW) itineraries. One online source of RTW tickets is rtw.oneworld.com , a specialized site owned and managed by oneworld Management Company, Inc. (“oMC”) and developed by oMC in cooperation with Innovata and Amadeus. oMC offers this “RTW Tool” to book RTW flights on Cathay and seventeen

1 / To the extent necessary, Cathay asserts the following affirmative defenses to the complaint: failure to state a claim upon which relief against Cathay may be granted; failure to join one or more indispensible parties; and mootness. As Cathay presently lack s sufficient information as to whether additional affirmative defenses may yet be available, it reserves the right to assert them.- 2 - Cathay Pacific Answer other oneworld carriers. 2 Fare displays and disclosures provided by the RTW Tool are determined by oMC and not individual carriers. The complaint, filed under 49 U.S.C. § 41712, is based on a test conducted by the third-party complainant of the RTW Tool for an itinerary containing 12 British Airways and 8 Cathay flight segments ; the itinerary apparently was composed so that Cathay would be the ticketing carrier. S creenshots in the complaint show that the RTW Tool generated a total price for the test itinerary and divided that into “Fare” and “Taxes” subtotals. Clicking on “Taxes” generated a list of items included in that subtotal, including two items described as “Multiple Surcharges” and “Surcha rge. ” Those items appear consistent with the way the RTW Tool would have displayed carrier-imposed surcharges. Cathay was also advised by oMC that the surcharge display results of the test appear representative of the RTW Tool display at the time. Upon learning of the test results, Cathay immediately advised oMC and asked that the oMC display be corrected. As the Department is aware, in reservations systems carrier-imposed surcharges generally share the same data format with other taxes and charges in international air transportation. Carriers and reservations systems seek to ensure that this longstanding

2 / Edelman has docketed identical complaints concerning the RTW Tool against two other oneworld carriers

– American Airlines and British Airways

– but CX understands that the RTW Tool may, depending on itinerary, select any of nine active oneworld members to ticket an itinerary.- 3 - Cathay Pacific Answer treatment does not affect the correct public display of carrier surcharges, but

errors can occur. oMC completed its remedial action on February 18, 2013. RTW Tool pricing displays now show a “Taxes and Carrier Surcharges/Fees” subtotal, and non-tax items are identified, for example, as “C arrier Surcharges/Fees .” Thus, the RTW Tool appears consistent with the Department’s February 21, 2012 guidance in this area, 3 and the subject matter of the complaint has been resolved. To summarize, oMC determines the manner in which its RTW Tool displays pricing information for Cathay and other oneworld carriers. And when Cathay advised oMC that the RTW Tool’s display of carrier-imposed surcharges was deficient, oMC took immediate action to modify that display. Thus, neither of the Department’s administrative remedies for section 41712 violations

-- orders to cease and desist and civil penalties

– would be warranted against Cathay. 4 Cathay further submits that existing Department regulation and guidance on this subject is sufficient to protect the public interest.

3 / Contrary to an assertion in the complaint, that guidance does not specifically mandate the substantiation of carrier-imposed surcharges in pricing displays.
4 / The suggestion that the Department order Cathay to refund carrier-imposed surcharges, to correct an error of its agent , has no basis in section 41712 administrative precedent . I t appears intended as an award of private damages, which DOT properly refuses to grant under that section. Nor is there any evidence of tax violations that would justify referral to U.S. or foreign tax agencies.