Order 20 11
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**UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION**  **OFFICE OF THE SECRETARY WASHINGTON, D.C.**  Is sued by the Department of Transportation O n the Sixteenth day

of September 2011

**Lowestfare .com, LLC**  **DOT O**  **ST -**  **2011 -**  **0 0**  **03 Served**  **September 16, 2011 Violations of**  **14 CFR Part 257 and**  **49 U.S.C. § 41712**

**C ONSENT**  **O RDER**  This consent order concerns violations by Lowestfare .com, LLC (Lowestfare ) , an online ticket agent, of the Department’s code
- share disclosure rule, 14 CFR Part 257, and the statuto ry prohibition against unfair and deceptive practices, 49 U.S.C. § 41712. It also directs Lo westfare to cease and desist from future violations of Part 257 and section 41712 and assesses it a $ 5 0 ,00 0 civil penalty . S ection 257.4 of the Department’s code
- share disclosure rule states that the holding out or sale of scheduled passenger air transportation involving a code
- sharing arrangement is an unfair and deceptive trade practice in violation of 49 U.S.C. § 41712 unless, in conjunction with that holding out or sale, air carriers and ticket agents follow certain notice requirements, including those of 14 CFR 257.5(d). The specific terms of section 257.5(d) require that print advertisements, including those published on the Internet, “prominently

disclose th at the advertised service may involve travel on another carrier,” “clearly indicate the nature of the service in reasonably s ized ty pe,” and “identify

all potential transporting carriers... by c orporate name and by

any o ther name under which that service is held out to the public.” An investigation by

the Office of Aviation Enforcement and Proceedings (Enforcement Office) revealed a lack of compliance by Lowestfare with section 257.5. For a period of time d uring 2010 , Lo westfare failed to properly disclos e the existence of code
- sharing arrangements when advertising code
- share flights operated on behalf of a major air carrier by a regional air carrier on its Internet website
. Specifically, it did not display the corporate names of the transporting carriers and any o ther names under which those flights were held out to the public on its flight itinerary pages or the initial page on which fares were advertised to the public
. Lowestfare ’ s failure to properly disclose the2

existence of code
- sharing arrangements and the names of the transporting carriers could have deceived consumers regarding the identity o f the airline that actually operate d the aircraft on which they flew
. Inmitigation, Lo westfare states that it did not intend to violate any a pplicable statute, regulation, or policy
. Lo westfare states that it takes its compliance obligations very seriously and actively

endeavors to ensure compliance with all DOT requirements, as well as to proactively

address any

concerns voiced by

consumers. Lowestfare s tates that at the relevant time, it understood that its practices were in compliance with the existing requirements, i.e., for code
- share flights, Lowestfare attempted to inform consumers of the identity o f the operating carrier prior to booking. Lowestfare explains that s ection 257.5 does not state that code
- share disclosures must be made as part of the initial results presented in the online booking process, nor had the Department so specified in public guidance. Lowestfare states that o nce it was made aware of the Department’s concerns, it responded swiftly, and revised its displays accordingly within 10 days on both www.airfares.com and related sites. Lowestfare also states that it has fully

cooperated with the Department in this investigation in all respects. Lowestfare states that its exemplary c ompliance disposition , in regard to code
- share disclosures (and generally ) , is further demonstrated by events that occurred later in the ye ar after new code
- share re quirements were imposed by Congress when it enacted 49 U.S.C. § 41712(c), which specifically require s disclosure in initial search results. Lowestfare states that it updated its displays to comply with the new statute before public guidance w as issued by the Department, and long before the deadline set by the Department for ticket agents to comply
. Lowestfare states that because of the lack of clear guidance provided to the public and the improbability that an identical violation would occur in the future due to a change of law, it believes that enforcement action wa s not warranted. Lowestfare, however, explains that in the interest of resolving this matter, and to demonstrate its ongoing commitment to providing full, fair, and transparent information to consumers, Lowestfare has agreed to enter into this order. We view seriously

the failure of Lowestfare to disclose code
- sharing arrangements as required by

1 4 CFR Part 257. A ccordingly, after carefully c onsidering 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, Lowestfare agree s to the issuance of this order to cease and desist from future similar violations of Part 257 and 49 U.S.C. § 41 712 and to the assessment of $ 5 0 ,000 in compromise of potential civil penalties otherwise assessable against it
. W e believe that this compromise assessment is appropriate in view of the nature and extent of the violations in question, serv es the public interest, and provides a meaningful incentive to all airlines and ticket agents to comply with the Department’s code
- share disclosure rule.3

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

NGLY, 1. Based on the above discussion, we approve thi s settlement and the provisions of this order as being in the public interest; 2
. We find that Lo westfare .com, LLC , violated 14 CFR 257.5 (d) by f ailing to disclose code
- sharing arrangements as required; 3
. We find that by

engaging in the conduct and violations described in ordering paragraph 2 above, Lo westfare .com, LLC , engaged in an unfair and deceptive practice and unfair method of competition in violation of 49 U.S.C. § 41712; 4
. We order Lo westfare
. com, LLC , and all other entities owned or controlled by o r under common ownership with Lowestfare .com, LLC , and its successors and assignees to cease and desist from further violations of 14 CFR Part 257 and 49 U.S.C. § 41712; 5
. We assess Lo westfare .com, LLC , $ 5 0 ,000 in civil penalties in compromise of civil penalties that might otherwise be assessed for the violations found in ordering paragraphs 2 and 3 above
. O f this total penalty amount, $25,000 shall be due and payable within 30 days of the date of issuance of this order. The remaining portion of the civil penalty amount, $25,000, shall become due and payable if, within one year of the date of issuance of this order, Lo westfare.com, LLC , violates this order’s cease and desist provisions or fails to comply

with this order’s pay

ment provisions, in which case Lowestfare.com, LLC , may

become subject to additional enforcement action for violation of the order ; and 6
. P ay ment 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 in accordance with the instructions contained in the Attachment to this order
. Failure to pay

the penalty

as ordered will subject Lowestfare .com, LLC , to the assessment of interest, penalty

and collection charges under the Debt Collection Act and to possible enforcement action for failure to comply with this order.4

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

p etition fo r 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 on the World Wide Web at www.regulations.gov