Order 2012

- 8

- 26

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twenty

- First day of August , 2012

Egypt A ir Airlines Company

Docket OST 201 2

- 0002

Served August 21 , 201 2

Violatio ns of 14 CFR 399.8 5 ( b ) and 259.5(b)(4)

and 49 U.S.C. § 41712

CONSENT ORDER

This order concerns violations by Egypt A ir Airlines Company ( Egypt Air ) of 14 CFR 399.85(b) and 259.5(b)(4) , and the statutory prohibition against unfair and deceptive practices, 49 U.S.C. § 41712

. It directs Egypt Air to cease and desist from future similar

violations and assesses the carrier $ 60

, 000 in civil penalties.

Applicable Law

On April 25, 2011, the Department issued a set of rules designed to enhance prote ctions

for air travel consumers th at

, among other things

, required airlines to comply with the Department’s baggage fee disclosure rule as written, which requires that the carrier clearly and prominently disclose on the first screen in which a fare quotation appeared

that additional airline fees for baggage may apply

. 1 In addition, the rules require “covered carriers,” wh ich include a foreign air carrier operating to, from or within the

United States using any aircraft with a design capacity of 30 or more passenger seats, to adopt a provision in its customer service plan permitting the holding of reservations

without payment , or the canceling of reservations without penalty

, with in a twenty

- four

hour time period of making a reservation

.

1 76 Fed. Reg. 23110 (April 25, 2011).2

The Department delayed the effective date for certain requirements of the rules from August 23, 2011

, to January 24, 2012, including the provisions pertaining to the disclosure of baggage fees, and t he holding of a reservation without payment

, or cancellat ion without penalty, for twenty

- four hours. 2

I. Baggage Fee Disclosure

The Department’s current baggage fee disclosure rule, 14 CFR 399.8 5 ( b ), requires carriers to inform passengers on the first screen in which the carrier offers a fare quotation for a specific itinerary selected by a consumer that additional airline fees for baggage may apply and where consumers can go to see these baggage fees

. This notification on the website must be clear, conspicuous and prominent. The rule reduce s

consumer con fusion over whether, and, if so, how much they will have to pay to check or

carry

- on bags. Violations of section 399.8 5 (b) constitute unfair and deceptive practices

in violation of section 41712.

II. Customer Service Plan

Pursuant to 14 CFR 259.5(b)( 4), a covered carrier is required to include a commitment in its customer service plan that at a minimum it will allow reservations to be held at the quoted fare without payment, or cancelled without penalty, for at least twenty

- four hours

after the reservation is made if the reservation is made one week or more prior to a flight’s departur e. This provision allows a consumer to make travel plans and shop for a fare that meets his or her needs, and addresses the carrier’s need for adequate time to sell seats on its flights. Violations of section 259.5(b)(4) constitute unfair and deceptive practices in violat ion of section 41712.

Facts

As a foreign air carrier, Egypt Air is subject to the prohibition on engaging in unfair and deceptive practices set forth in 49 U.S.C. § 41712 and to the baggage fee disclosure requirements of 14 CFR 399.8 5 ( b ). Egypt Air failed to meet the requirements of section

399.8 5 ( b ) by not disclosing on the first screen in which it offers a fare quotation for a specific itinerary selected by a consumer that additional airline fees for baggage may apply and where consumers can go to see these baggage fees. For a period of time after January 24 , 2012, in response to consumer searches using the main booking path on its website, Egypt Air displayed a fare matrix for outbound and inbound legs. Additionally,

t he following text appeared directly above the fare matrix, “Please refer to our baggage overview pages for more detailed information on EGYPTAIR’s baggage policy.” Although the sentence also include d a link to Egypt Air’s baggage poli cy, it is unclear

from the text alone whether ad ditional baggage fees may apply to the fares displayed. The notification that additional baggage fees may apply must be clear.

As a covered carrier, Egypt Air is also required to adopt and follow a customer service plan applicable to its scheduled fligh ts. For a period of time after January 24, 2012

,

2 76 Fed. Reg. 45184 (July 28, 2011).3

Egypt Air failed to include a commitment in its customer service plan allowing reservations to be held at the quoted fare without payment, or canceled without penalty, for at least twenty

- four hours after the reservation is made if the reservation is made one

week or more prior to a flight’s departure. Egypt Air’s failure t o include this commit ment in the contents of its plan violated 14 CFR 259.5(b)(4 ) and 49 U.S.C. § 41712.

Mitigation

In mitigation, EgyptAir states that it is committed to fully complying with all the Department’s regulations and that it in no way intended to mislead its customers. According to EgyptAir, the omissions from its website were completely inadvertent and

have been corrected. Moreover, EgyptAir points out that it has cooperated fully with the

Enforcem ent Office in an effort to correct the deficiencies in its website and to resolve

this matter. In addition, EgyptAir states that as a result of the Enforcement Office's investigation, it has implemented internal measures that include regular audits to ens ure that its website remains in compliance with all applicable existing and future regulations.

Decision

The Enforcement Office has carefully considered the infor mation provided by Egypt Air

, but continues to believe enforcement action is warranted. The Enfo rcement Office and Egypt Air have reached a settlement of this matter in order to avoid litigation. Without admitting or denying the violations described above, EgyptAir , consents to the issuance

of this order to cease and desist from future violation s of 14 CFR 399.85(b), 14 CFR 259.5(b)(4), and 49 U.S.C. § 41712 and to the assessment of $ 60

, 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 violations described herein and serves the public interest. It establishes a strong deterrent

to futur e similar unlawful practices by Egypt Air and other carriers

.

This order is issued under the authority contained in 49 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 Egypt A ir Airlines Company violated 14 CFR 399.8 5 ( b ) by failing to inform passengers on the first screen in which the carrier offers a fare quotation for a specific itinerary selected by a consumer that additional airline fees for baggage may apply;

3. We find that Egypt A ir Airlines Company violated 14 CFR 259.5(b)(4) by failing to include a provision in its customer service plan permitting the holding of reservations without payment, or the canceling of reservations without penalty, within a twenty

four hour time period after the reservation was made provided that it was made a week or more before depart ure;4

4. We find that by engaging in the conduct described in ordering paragraphs 2 and 3, above, Egypt A ir Airlines Company engaged in unfair and deceptive practices and unfair methods of competition in violation of 49 U.S.C. § 41712 ;

5. We order Egypt A ir Airlines Company , and all other entities owned or controlled by, or under common ownership and control with Egypt A ir Airlines Company

, its successors, affiliates, and assignees, to cease and desist from further violat ions of 14 CFR 259.5(b)(4), 14 CFR 399 .8 5 ( b ), and 49 U.S.C. § 41712 ;

6. Egypt A ir Airlines Company is assessed $ 6 0,000 in compromise of civil penalties that might otherwise by assessed for the violations described above. Of this total penalty amount, $3 0,000 shall be due and payable in three equ al installments of $10 ,000 each, with the first installment due and payable within 30 days of the issuance date of this order, the second installment due and payable within 60 days of the issuance date of this order, and the third installment due and payable within 90 days of the issuance

date of this order. The remaining $3 0,000 shall become due and payable if, within one year of the issuance date of this order, Egypt A ir Airlines Company violates the cease and desist provision in ordering paragraph 5 , above, or fails to comply with the payment provisions in this ordering paragraph, in which case

, the entire unpaid portion of the civil penalty shall become due and payable immediately; and

7. We order Egypt A ir Airlines Company to pay the penalty throu gh 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 Egypt A ir Airlines Company to the assessment of intere st, 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 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

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