Order 2011-8-24

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Thirtieth day of August, 2011

Emirates Docket OST 2011-0003

Violations of Articles 17 and 19 of the 

 Montreal Convention and 49 U.S.C. § 41712 Served August 30, 2011

 

CONSENT ORDER

This consent order involves violations by the foreign air carrier Emirates of Articles 17

and 19 of the Montreal Convention1 and the statutory prohibition against unfair and 

deceptive trade practices, 49 U.S.C. § 41712, in connection with monetary claims 

resulting from damage, loss, or delay to baggage checked on Emirates’ flights to or from 

the United States. It directs Emirates to cease and desist from future violations of 

Articles 17 and 19 and section 41712, and assesses the carrier a compromise civil penalty 

of $100,000.

Applicable Law

Article 22 of the Montreal Convention currently sets the liability limit for damages 

associated with lost, damaged, or delayed passenger baggage at 1,131 Special Drawing 

Rights (SDRs) for each passenger.2

 Article 17 of the Montreal Convention provides that 

carriers are liable for damaged or lost baggage, up to the limit set by Article 22, if “the 

destruction, loss or damage” occurred while the checked baggage was within the custody 

of the carrier, except to the extent that the damage “resulted from the inherent defect, 

quality or vice of the baggage.” Article 19 provides that a carrier is liable for damage 

caused by delay in the carriage of baggage, except to the extent that it proves that it took 

all reasonable measures to prevent the damage or that it was impossible to take such 

measures. Further, Article 26 states that any provision tending to relieve a carrier of 

liability or to fix a lower limit than that which is laid down in the Montreal Convention is 

 1 Convention for the Unification of Certain Rules for International Carriage by Air, adopted on 

May 28, 1999 at Montreal.

2 Inflation Adjustments to Liability Limits Governed by the Montreal Convention Effective 

December 30, 2009, 74 FR 59017, available at http://airconsumer.ost.dot.gov/rules/Notice_11_09_09.pdf 

(November 9, 2009).
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null and void. Nothing in the Montreal Convention permits blanket exclusions or 

otherwise allows carriers to disclaim liability for any class or category of item, such as 

jewelry, electronics, or high value items. Such exclusions have the effect of limiting 

liability to less than the limit set by Article 22 in contravention of Article 17 of the 

Montreal Convention. Violations of the Montreal Convention constitute unfair or 

deceptive business practices and unfair methods of competition in violation of 49 U.S.C. 

§ 41712.

Background

Based on a consumer complaint, the Office of Aviation Enforcement and Proceedings 

(Enforcement Office) investigated Emirates’ policies and practices in connection with its 

handling of monetary claims for baggage checked on flights to or from the United States

that was lost, damaged, or delayed. That investigation showed multiple instances of 

violations of the Montreal Convention by Emirates. For example, in many cases, 

Emirates denied reimbursement for high value items such as lost electronics, jewelry, and 

cameras. In its written responses to passengers, Emirates stated that its contract of 

carriage limited its liability for lost high value items such as jewelry and electronics and 

certain damage to baggage and incorrectly stated that limiting its liability in that manner 

was in accordance with the Montreal. In addition, the page on Emirates’ website with 

“Delayed and Damaged Baggage” information stated that Emirates was not liable for 

valuables damaged in transit.

Furthermore, in connection with delayed baggage, in many instances Emirates provided 

limited or no compensation to passengers and indicated that any compensation provided 

was a “courtesy” by Emirates and would be the only compensation offered for costs 

incurred by passengers whose baggage was delayed. In some responses to passengers, 

Emirates incorrectly stated that limiting its liability for costs related to delayed baggage 

was in accordance with the Montreal Convention and airline industry standards. 

Emirates’ actions in those cases effectively limited its liability for costs incurred by 

passengers as a result of baggage delays to far less than the minimum 1,131 SDRs 

required by the Montreal Convention. 

Mitigation

In mitigation, Emirates states that it takes seriously its responsibility to comply with all 

applicable laws and regulations, including the Montreal Convention and the 

Department’s rules. Emirates further states that it has a strong compliance history and

has never before entered into a consent order with the Department. After the Department 

issued its October 2009 guidance3 to carriers regarding baggage liability, Emirates 

modified its Conditions of Carriage and related provisions of its internal policy 

documents to conform to the Department’s requirements. Emirates asserts that any errors 

made in implementing these changes were inadvertent, and that Emirates never had any 

 3

 Notice Providing Guidance on Reimbursement of Passenger Expenses Incurred as a Result of Lost, 

Damaged or Delayed Baggage, 74 FR 53309, available at 

http:airconsumer.ost.dot.gov/rules/Notice.Expense.Reimburse.final.pdf (Oct. 9, 2009).
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intention of purposely misstating its policies or misinforming passengers as to their rights 

under the Montreal Convention. 

Emirates declares that, after receiving the Department’s inquiry, it conducted a thorough 

review of its baggage liability policies and practices. As a result of this review, Emirates 

retrained relevant employees to ensure that they understand and correctly apply the 

company’s baggage liability policies; revised its internal customer service manuals, 

including changes to more specifically address requirements that apply to flights serving 

the United States; and revised the standardized documents used when responding to 

passenger baggage claims to ensure greater clarity and conformity with company policy. 

Emirates also undertook a detailed review of the company’s baggage claim handling 

procedures to ensure that the company is applying best practices in this important area. 

Decision

The Enforcement Office has carefully considered the information provided by Emirates

but continues to believe that enforcement action is warranted. The Enforcement Office 

and Emirates have reached a settlement of this matter in order to avoid litigation. 

Without admitting or denying the violation described above, Emirates consents to the 

issuance of an order to cease and desist from future violations of Articles 17 and 19 of the 

Montreal Convention and 49 U.S.C. § 41712 of the Department’s regulations, and to the 

assessment of $100,000 in compromise of potential civil penalties otherwise due and 

payable pursuant to 49 U.S.C. § 46301. 

This compromise assessment is appropriate considering the nature and extent of the 

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

against future noncompliance with the Montreal Convention by Emirates, as well as by

other air carriers and foreign air carriers. 

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 Emirates violated Article 17 of the Montreal Convention by denying 

liability for lost or damaged high value items;

3. We find that Emirates violated Article 19 of the Montreal Convention by limiting

its reimbursement for expenses resulting from a delay in returning checked 

baggage to significantly less than the maximum liability amount set forth in the 

Montreal Convention;
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4. We find that by engaging in the conduct and violations described in ordering 

paragraphs 2 and 3 above, and by informing passengers the liability limits for 

damaged, lost, or delayed baggage in its contract of carriage were in accordance 

with the Montreal Convention, Emirates has also engaged in unfair and deceptive 

practices in violation of 49 U.S.C. § 41712; 

5. We order Emirates, and all other entities owned or controlled by or under 

common ownership with Emirates, and its successors and assignees, to cease and 

desist from violations of Article 17 and 19 of the Montreal Convention and 49 

U.S.C. § 41712. Failure to comply with this cease and desist provision shall 

subject Emirates and its successors and assignees to further enforcement action;

6. We assess Emirates a compromise civil penalty of $100,000 in lieu of civil 

penalties that might otherwise be assessed for the violations described in ordering 

paragraphs 2 through 4, above. Of this total amount, $50,000 is due and payable 

within 30 days after the service date of this order. The remaining $50,000 shall 

become due and payable if Emirates violates this order’s cease and desist or 

payment provisions within one year following the date of the issuance of this 

order, in which case the entire unpaid portion of this civil penalty shall become 

due and payable immediately. Failure to pay the penalty as ordered shall subject 

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

Debt Collection Act and to further enforcement action for failing to comply with 

this order; and 

7. We order Emirates to make the payment set forth in ordering paragraph 6 above, 

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. 

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:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov