Order 2011-10-12

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twenty-Fourth day of October, 2011 

South African Airways PTY Limited 

Docket DOT-OST 2011-0003

 

Violations of 49 U.S.C. § 41712 and

 14 CFR 399.84 Served October 24, 2011

CONSENT ORDER

This consent order concerns violations by South African Airways PTY Limited (“South 

African Airways”) of the Department’s advertising requirements specified in 

section 399.84 of the Department’s regulations (14 CFR 399.84) that also constitute 

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

49 U.S.C. § 41712. This order directs South African Airways to cease and desist from 

future violations and assesses the company a compromise civil penalty of $55,000. 

South African Airways is a foreign air carrier holding authority pursuant to 49 U.S.C. 

§ 41301, and, as such, is subject to the advertising requirements of Part 399 of the 

Department’s rules. Under 14 CFR 399.84, any advertising that states a price for air 

transportation or an air tour is considered to be an unfair or deceptive practice in 

violation of 49 U.S.C. § 41712 unless the price stated is the entire price to be paid by 

the customer to the air carrier or ticket agent for such air transportation, tour or tour 

component. However, pursuant to its enforcement case precedent, the Department has 

permitted air carriers and ticket agents to state separately from the advertised price 

taxes and fees imposed by a government on a per-passenger basis, such as passenger 

facility charges and departure taxes, so long as their amounts appear or are indicated 

clearly in the advertisement at the first point in the advertisement where a fare is 
2

presented so that the consumer can determine the full price to be paid.1

 Taxes and fees 

imposed on an ad valorem basis, however, must be included in the advertised price, lest 

consumers be confused about the total amount that must be paid. On the other hand, 

carrier- or agent-imposed surcharges, e.g., fuel, insurance, and service charges, or other 

such costs, must be included in the advertised price. With respect to airfares and air 

tours advertised on the Internet, taxes and fees that are permitted to be excluded from 

the advertised price may be noted in a prominent link, placed adjacent to the stated 

price,2 that takes the viewer directly to the bottom of the screen, to a pop-up or to a 

place on a separate screen, where the nature and amount of such fees are displayed.3

In addition, the Transportation Security Administration (TSA) has promulgated a 

regulation, 49 CFR Part 1510, that imposes a security service fee in the amount of 

$2.50 per enplanement per passenger (with a $10 maximum per round trip) on air 

transportation originating at airports in the United States. Pursuant to section 1510.7, 

all direct air carriers are required to identify the security service fee as the “September 

11th Security Fee” in advertisements and solicitations for air transportation that 

separately state the fee. The Department views the failure by an airline or its agent to 

identify the September 11th Security Fee, as required by section 1510.7, or to state 

the amount of the fee when it is not part of the base fare, to be an unfair and deceptive 

trade practice in violation of 49 U.S.C. § 41712.

South African Airways has promoted its air fares and air travel packages from the 

United States to South Africa and other African, European and Asian countries by 

means of e-mail solicitations and advertisements that are published in print and on 

South African Airways’ web sites, www.southafricanairways.com, 

www.flysaavacations.com, www.flysaa.com, and other web sites. 

On September 3, 2010, the Department issued Order 2010-9-5, a consent order 

involving Lion World Travel Ltd. d/b/a South African Airways Vacations, which 

marketed air tours using South African Airways under the South African Airways

 1

 See, e.g., Costa Cruise Lines N.V., Order 2009-9-3. 2

 See, e.g., Tour Beyond, Inc., d/b/a China Spree Travel, Order 2011-2-6, Unique Vacations, 

Order 2010-11-7, China Focus Travel, Order 2010-9-6, Grand Circle Travel Corp, Order 

2006-7-23, JetBlue Airways, Inc., Order 2004-2-4, and orders cited therein, and the notice 

entitled: Disclosure of Additional Fees, Charges and Restrictions on Air Fares in 

Advertisements, Including “Free” Airfares, which is dated September 4, 2003, as well as 

guidance letters to the industry which can be found at: 

http://airconsumer.ost.dot.gov/rules/guidance.htm. 

3

 On April 20, 2011, the Department issued a rule changing its enforcement policy with 

respect to section 399.84 to require that airlines and ticket agents comply with the rule as 

written. Under this new enforcement policy, which is effective January 24, 2012, airlines and 

ticket agents must include all government taxes and fees in every advertised fare. The 

Department’s long-standing prohibition on omitting carrier- or agent-imposed charges, such 

as fuel or insurance surcharges, or convenience fees, from advertised fares will remain in 

effect. 
3

Vacations brand. The order found that Lion World Travel d/b/a South African 

Airways Vacations violated the Department’s full fare advertising rule and directed 

Lion World Travel d/b/a South African Airways Vacations to cease and desist from 

further violations and assessed the company a compromise civil penalty of $20,000. 

Although the order did not find violations by South African Airways itself, clearly 

the carrier was put on notice of the violations found against the carrier’s partner, 

which was marketing its air tour service under the South African Airways Vacations 

brand.4 

In Order 2010-9-5, the Department reiterated that it also requires that advertisements 

adequately disclose significant restrictions in fare advertisements. The Department 

considers double occupancy requirements for air tour packages to be such a 

significant restriction. Failure adequately to disclose these significant requirements 

for hotel/air packages likewise violates 14 CFR 399.84. 

An investigation by the Department’s Office of Aviation Enforcement and 

Proceedings (“Enforcement Office”) disclosed that, for a period of time in late 2010 

and early 2011, air tour packages promoted by South African Airways on its web 

sites and those of others did not comply with Department requirements. More 

specifically, the listed prices did not properly identify the existence, nature or 

amount of additional taxes and fees stated in these solicitations, including the 

September 11th Security fee. For example, the Enforcement Office conducted a 

search of an Internet advertisement on the home page of South African Airways’ 

site. The advertisement consisted of a picture of a South African Airways airplane 

and stated: “SAA Vacation Package” --“Includes air, hotel & more!” Next to that 

advertisement, another promotion stated: “Luxury Botswana Vacation” – “From 

$4,799* p/p Includes, air, hotel & more!” When users continued by clicking on the 

hyperlink next to either package, they were taken to the South African Airways 

Vacations web site to a heading entitled, “SPECIALS.” Only after users selected a 

specific vacation package and were taken to yet another web page were they able to 

learn that taxes and fees were extra, and that restrictions such as double occupancy 

purchase requirements applied, under what was denoted as the “Terms” of the air 

tour package.5 There was no mention proximate to the advertised fare that taxes and 

 4

 The Department learned that on December 14, 2010, South African Airways terminated 

its contract with Lion World Vacations Ltd., and on December 15, 2010, Destination 

Southern Africa began its operations under its contract with South African Airways to 

market the carrier’s flights in conjunction with the tour operator’s land package tours, which 

is implemented through the airline’s air tour package web site, www.flysaavacations.com. 

5

 Terms

*Prices are per person based on double occupancy accommodations and include fuel 

surcharges. Government taxes, departure fees and September 11th Security Fee of up to $210 

are additional and payable prior to departure. Package prices are valid as of January 1st, 2011. 

Prices are valid for new bookings only, subject to availability, may change without notice, and 

are not retroactive. Blackouts, peak period surcharges, cancellation charges, and other 

restrictions may apply. 
4

fees were additional, nor that significant restrictions apply. Enforcement Office staff 

was able to verify that other promotions contained virtually identical violations of 

the Department’s full-fare advertising requirements. From South African Airways’ 

web site, a customer pursuing additional information was ultimately transferred to 

South African Airways Vacations’ web site, www.flysaavacations.com, which is 

operated for South African Airways by Destination Southern Africa, Inc. 

Accordingly, South African Airways’ advertisements on its web sites and those of its 

agents did not meet Department requirements. By failing to provide appropriate 

notice on the first screen where the cost of the air tour trip was first revealed of the 

amount of government taxes and fees that are permitted to be broken out of the price 

that is displayed, and by failing to disclose the existence of significant restrictions 

associated with its air tour prices, such as double occupancy requirements, when the 

price was first listed, South African Airways violated the Department’s full fare 

regulation and enforcement case precedent, which remain in effect through January 

24, 2012.

6

 

In addition to violating the requirements of section 399.84 and related Department 

precedent and enforcement policies, such practices constitute an unfair and deceptive 

trade practice in violation of 49 U.S.C. § 41712. South African Airways engaged in a 

separate violation of 49 U.S.C. § 41712 by failing to identify the September 11th 

Security Fee as required by 49 CFR 1510.7. 

In mitigation and explanation, South African Airways states that it strives to comply 

with all of the Department’s regulations, and that the web site errors were completely 

inadvertent. Immediately after South African Airways and Destination Southern 

Africa were informed of the Department’s concerns via a telephone call, the 

companies recount that they began to correct the errors on the web sites. In fact, they 

recall, the majority of the problems were fixed before any formal written notice by the 

Department was received by South African Airways or Destination Southern Africa. 

According to the companies, the web sites have remained in compliance with the 

Department’s rules since that time, and the companies have taken steps to ensure that 

these errors do not occur in the future. The companies also note that during the time 

of the inadvertent errors, South African Airways was in the process of executing a 

transition of its South African Airways Vacations contract from a previous contractor 

to Destination Southern Africa. As a result, Destination Southern Africa and South 

African Airways declare that there was very little commercial activity for South 

African Airways Vacations during the period of time that the advertisements were not 

in compliance. 

The Enforcement Office has carefully considered all of the information available to it, 

including that provided by South African Airways, but continues to believe that 

enforcement action is warranted. In this connection and in order to avoid litigation, the 

Enforcement Office and South African Airways have reached a settlement in this matter. 

While neither admitting nor denying the above allegations, South African Airways 

 6

 See footnote 3 infra. 
5

accepts the findings and conclusions stated herein in order to avoid potential litigation. 

Under this order, South African Airways is assessed $55,000 in compromise of potential 

penalties otherwise assessable under the provisions of 49 U.S.C. § 46301. 

The Enforcement Office believes that the assessment of a civil penalty of $55,000 is 

appropriate in light of the nature and extent of the violations in question and will 

provide an effective deterrent to unlawful conduct in the future by South African 

Airways and other sellers of air tours and transportation. 

This order is issued under the authority contained in 49 CFR 1.57a and 14 CFR 385.15. 

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 South African Airways PTY Limited violated 14 CFR 399.84, 

as described above, by causing to be published advertisements that failed to 

state the entire price to be paid for certain air transportation;

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

failing properly to disclose significant restrictions, and by failing to identify the 

September 11th Security Fee as required by 49 CFR 1510.7, South African 

Airways PTY Limited engaged in an unfair and deceptive trade practice in 

violation of 49 U.S.C. § 41712;

4. We order South African Airways PTY Limited, and all other entities owned 

and controlled by, or under common ownership and control with South African 

Airways PTY Limited, and their successors and assignees, to cease and desist 

from future violations of 14 CFR 399.84 and 49 U.S.C. § 41712;

5. South African Airways PTY Limited is assessed $55,000 in compromise of 

civil penalties that might otherwise be assessed for the violations found in 

ordering paragraphs 2 and 3 of this order, which shall be due and payable within 

15 days of the date of issuance of this order. If South African Airways PTY

Limited violates this order’s cease and desist provisions or fails to comply with 

this order’s payment provisions, South African Airways PTY Limited may 

become subject to additional enforcement action for violation of the order and 

the Department’s statute and regulations; 

6. Payment shall be made by wire transfer through the Federal Reserve 

Communications System, commonly known as “Fed Wire,” to the account of 

the U.S. Treasury. The wire transfer shall be executed in accordance with the 

instructions contained in the Attachment to this order. Failure to pay the 
6

compromise assessment as ordered shall subject South African Airways PTY 

Limited to the assessment of interest, penalty, and collection charges under the 

Debt Collection Act, and possible enforcement action for failure to comply with 

this order; and 

7. We order South African Airways PTY Limited to retain for a period of two

years following the issuance of this order copies of all advertisements of air 

tours or air tour components it causes to be published in printed format or 

circulates as current including Internet advertisements during the one-year 

period following issuance of this order. This material shall be provided to the 

Office of Aviation Enforcement and Proceedings upon request. 

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

timely petition for review is filed or the Department takes review on its own motion.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available

at www.regulations.gov