Order 2013-10-9

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twenty-Second day of October, 2013

Carlson Wagonlit Travel, Inc. Docket OST 2013-0004

Served: October 22, 2013

 Violations of 49 U.S.C. § 41712(a) and

14 CFR Part 257

CONSENT ORDER

This consent order concerns violations by Carlson Wagonlit Travel, Inc., (Carlson) when 

it failed to disclose code-share arrangements as required by 49 U.S.C. § 41712(c) and 14 

CFR Part 257 during telephone airline reservation calls. These failures also constitute 

separate and distinct violations of 49 U.S.C. § 41712(a), the statutory prohibition against

unfair and deceptive practices. The order directs Carlson to cease and desist from future 

violations of Part 257 and section 41712, and assesses $125,000 in civil penalties.

Applicable Law

Carlson is a ticket agent1 and is therefore subject to the detailed code-share disclosure 

requirements found in 49 U.S.C. § 41712(c) and 14 CFR 257.5(b). Under section 

41712(c), any “ticket agent, air carrier, foreign air carrier, or other person offering to sell 

tickets for air transportation on a flight of an air carrier” is required to disclose “whether 

verbally in oral communication or in writing in written or electronic communication, 

prior to the purchase of a ticket[,] the name of the air carrier providing the air 

transportation; and if the flight has more than one segment, the name of each air carrier 

providing the air transportation for each such flight segment.” Failure to disclose the

required information is an unfair or deceptive practice in violation of section 41712. 

Section 257.4 of the 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 section 41712, unless, in conjunction with that 

 1 A “ticket agent” is “a person (except an air carrier, a foreign air carrier, or an employee of an air carrier or 

foreign air carrier) that as a principal or agent sells, offers for sale, negotiates for, or holds itself out as 

selling, providing, or arranging for air transportation.” 49 U.S.C. § 40102(a)(45).
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holding out or sale, carriers and agents follow certain requirements, including those of 

section 257.5(b). With regard to oral communications concerning a flight that is part of a 

code-sharing arrangement, section 257.5(b) states that a ticket agent or carrier must 

disclose to prospective consumers before they book the flight the existence of the codeshare arrangement, the corporate name of the transporting carrier, and any other name 

under which the flight is held out to the public. Violations of section 257.5(b) constitute 

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

section 41712.

Facts and Conclusion

An investigation by the Office of Aviation Enforcement and Proceedings (Enforcement 

Office) revealed a lack of compliance by Carlson with section 257.5(b) of the 

Department’s code-share rule and section 41712(c). For a period of time during January

and February of 2013, Enforcement Office staff made a number of telephone calls to 

Carlson as potential purchasers and inquired about booking a flight. During these calls, 

the Carlson reservations agents answering the calls failed to make the required disclosure 

regarding code-share arrangements for the flights in question. Specifically, when 

discussing flights marketed by one carrier but operated by another with the callers, 

Carlson’s reservation agents only identified the marketing carrier and did not identify the 

corporate name of the carrier operating the flight or any other name under which the 

flight is operated.

Mitigation

In mitigation, Carlson states that it takes seriously its obligation to comply with the 

Department’s consumer protection rules and 49 U.S.C. § 41712. Carlson states that it 

believed all of its agents in the United States were aware of the requirements in section 

41712(c) and 14 CFR 257.5(b) to disclose the name of the operating carrier and any trade 

name by which the operating carrier provides transportation. Carlson states that it has no 

record of any customer complaint that a Carlson ticket agent failed to disclose the 

operating carrier. Carlson states that although the Department’s investigation likely 

involved only a few Carlson ticket agents, after being notified of the Department’s 

investigation, Carlson issued a memorandum to all agents in the United States reiterating 

the code-share disclosure requirements and providing practical guidance to ensure 

compliance prospectively. Carlson states that its supervisor agents will personally address 

these requirements with each agent. Carlson states that it has required all agents to retake 

code-share training and has updated its employee policies to require agents to take codeshare refresher training on an annual basis. Carlson states that it has provided all agents 

with an updated script with model code-share disclosure language to use when 

communicating with consumers over the telephone. Finally, Carlson states that it has 

incorporated code-share disclosure compliance into call monitoring evaluation and 

performance analysis and advised employees that failure to comply with the code-share 

disclosure polices may result in potential disciplinary action.
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Accordingly, Carlson states that it can assure the Department that it has engaged in 

substantial mitigation and is now in full compliance with these requirements and will 

faithfully observe them in the future.

Decision

We view seriously the failure of Carlson to disclose code-sharing arrangements as 

required by 49 U.S.C. § 41712(c) and 14 CFR 257.5(b). Accordingly, after carefully 

considering 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, Carlson 

agrees to the issuance of this order, to cease and desist from future similar violations of 

49 U.S.C. § 41712 and 14 CFR 257.5(b), and to the assessment of $125,000 in 

compromise of potential civil penalties that might otherwise be due and payable. We 

believe that this compromise assessment is appropriate in view of the nature and extent of 

the violations in question and Carlson’s mitigation efforts. This compromise assessment

serves the public interest, and provides a strong deterrent to non-compliance with the 

statute and the Department’s code-share disclosure rule.

This order is issued under the authority contained in 49 CFR Part 1.

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 by failing to disclose code-sharing arrangements, as prescribed in 49 

U.S.C. § 41712(c) and 14 CFR 257.5(b), Carlson Wagonlit Travel, Inc., violated 14 CFR 

257.5(b) and engaged in an unfair and deceptive trade practice in violation of 49 U.S.C. 

§ 41712;

3. We order Carlson Wagonlit Travel, Inc., and all other entities owned or controlled 

by or under common ownership with Carlson Wagonlit Travel, Inc., its successors and 

assignees, to cease and desist from further violations of 49 U.S.C. § 41712 and 14 CFR 

257.5(b);

4. We assess Carlson Wagonlit Travel, Inc., $125,000 in compromise of civil penalties 

that might otherwise be assessed for the violations found in ordering paragraph 2 above. 

Of this total penalty amount, $20,834 shall be due and payable within thirty days of the 

date of the issuance of this order; $20,833 shall be due and payable within sixty (60) days 

of the date of the issuance of this order; and $20,833 shall be due and payable within 

ninety (90) days of the date of issuance of this order. The remaining portion of the civil 

penalty amount, $62,500, shall become due and payable immediately if, within one year 

of the date of issuance of this order, Carlson Wagonlit Travel, Inc., violates this order’s 

cease and desist provisions or fails to comply with the order’s payment provisions, in 
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which case Carlson Wagonlit Travel, Inc., may be subject to additional enforcement 

action for violation of this order; and

5. Payment shall be made through Pay.gov to the account of the U.S. Treasury in 

accordance with the instructions contained in the Attachment to this order. Failure to pay 

any portion of the penalty as ordered shall subject Carlson Wagonlit Travel, Inc., to the 

assessment of interest, penalty, and collection charges under the Debt Collection Act.

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

An electronic version of this document is available at 

www.regulations.gov