Order 2010-9-6

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

On the 3rd day of September, 2010 

China Focus, Inc., d/b/a China Focus 

Travel

Docket OST-2010-0005

 

Violations of 49 U.S.C. § 41712 and

 14 CFR 399.84 Served September 3, 2010

CONSENT ORDER

This consent order concerns violations by China Focus, Inc., d/b/a China Focus Travel

(“China Focus Travel”) 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 China Focus Travel to cease and desist from future 

violations and assesses the company compromise civil penalties of $50,000. 

China Focus Travel, as a ticket agent selling air tour packages, including land and river 

cruise package tours, 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, as a matter of enforcement policy, 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, 

so long as their amounts appear or are indicated clearly in the advertisement so that the 
2

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 agentimposed 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 proximately to the stated price, that takes the 

viewer directly to the bottom of the screen, or to a place on a separate screen, where the 

nature and amount of such fees are displayed.2

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 most 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. Failure by a ticket agent to identify the September 11th Security Fee as 

required by section 1510.7 is an unfair and deceptive trade practice in violation of 49 

U.S.C. § 41712.

In offering air travel packages from the United States to China, which include air fares, 

guided tours, cruises, and related amenities, China Focus Travel has promoted its air 

fares and air travel packages in the United States by means of e-mail solicitations and 

advertisements that are published in print and on China Focus Travel’s web site, 

www.chinafocustravel.com, and other web sites. 

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

(“Enforcement Office”) disclosed that the air tour packages promoted by China Focus 

Travel on its web site and that of others did not comply with Department requirements. 

Specifically, the listed prices failed to include air-related fuel surcharges, which must 

be included in the advertised price, and failed to include appropriate notice of the 

amount of government taxes and fees that are not included in the overall air plus cruise 

package price. 

For example, the Enforcement Office initiated a search of an advertisement, “Splendid 

China 2010 Promotion 12-Days, Early Bird discount up to $200 per person! Starting 

Price: $988.” Upon clicking on the sub-head link, “View Tour Dates and Prices for 

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

 See, e.g., JTB Corporation, Order 2008-12-24, Trafalgar Tours West, Order 2007-8-24, 

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

More Detail,” the staff member was taken to a statement at the bottom of that page that 

described the “Costs due with final Payment,” as “SFO: International and Domestic 

China Taxes (U.S. & China): $314/Person**.”

Upon further inquiry, Enforcement Office staff ascertained that, in fact, the applicable 

government-imposed taxes and fees amounted to no more than $110, and were not, as 

stated, $314. Instead, China Focus had included the airline-imposed fuel surcharge of 

about $200 in the amount it designated “International and Domestic China Taxes.” In 

addition, the September 11th Security Fee was part of the separately-stated taxes and 

fees but was not identified as required. Enforcement Office staff verified that the 

promotions for numerous other China Focus air tour packages contained virtually 

identical false statements and violations of the Department’s full-fare advertising 

requirements. 

By failing to include fuel surcharges imposed by carriers in the advertised price of an 

air ticket or air tour package when it first listed the price, China Focus Travel violated

the Department’s regulations and enforcement case precedent. 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. China Focus Travel engaged in a separate violation of 49 U.S.C. 

§ 41712 by failing to identify the September 11th Security Fee as required by section 

1510.7. 

Furthermore, under the subheading “Tour Dates and Prices” for “Splendid China 2010 -

- 12 Days,” China Focus Travel declared: 

** The international & domestic taxes listed above cover the U.S. 

departure taxes plus the China domestic & international departure taxes. 

The taxes are subject to change according to the airlines and the 

government (U.S. & China). If there is an increase after you put down a 

deposit or made your final payment, you are still subject to pay the 

difference.

This statement is false and deceptive since airlines do not impose taxes. As such, it 

constitutes a separate violation of 49 U.S.C. § 41712. 

With regard to fuel surcharges, we recognize the difficulties faced by some companies 

who may themselves be subject to “fuel surcharges” by airlines in 

their contracts with carriers in order to secure seats in advance. However, once a firm 

quotes through its advertising a specific price for a flight, tour or tour component, the 

firm must charge that price to the consumer. When an air tour seller advertises a 

specific price for a flight, tour or tour component, it must have available a reasonable 

inventory at the advertised price for a reasonable time period. To preclude there being 

a deceptive practice issue for flyers or brochures, a firm can state in its flyers and 

brochures that the prices it is advertising are good “as of” or “until” a date certain, and 
4

advise the consumer that availability of the advertised fares may be limited and current 

fares may be higher with notice as to where the current prices can be obtained. Fares 

held out on the Internet or in newspapers, or orally, however, must be current and 

available. 

In mitigation and explanation, China Focus Travel states that, upon receiving notice of 

alleged violations of the full fare advertising law, it immediately initiated full 

cooperation with the Department. When the firm recognized that there were problems 

with the presentation of information on its web site, China Focus recounts that it 

voluntarily made changes to the advertisements of all of its tour packages, in order to 

avoid even the possibility of a violation of the Department’s rules and regulations, and 

to prevent any potential consumer confusion. Furthermore, China Focus explains that it 

made significant and far-reaching changes to its web site to ensure that it was clear to 

consumers that fuel surcharges were included in the quoted prices.

Finally, China Focus emphasizes that there has been no evidence of any consumer 

complaints or reports regarding China Focus’ prior manner of characterizing fuel 

surcharges as part of taxes and fees, or about any lack of clarity on its web site. In its 

view, China Focus cooperated with the Department throughout this investigation and 

acted as quickly as possible to prevent any consumer confusion.

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

including that provided by China Focus Travel, but continues to believe that 

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

Enforcement Office and China Focus Travel have reached a settlement in this matter. 

While neither admitting nor denying the above allegations, China Focus Travel accepts 

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

this order, China Focus Travel is assessed $50,000 in compromise of potential penalties 

otherwise assessable under the provisions of 49 U.S.C. § 46301. Of the total penalty 

amount, $25,000 shall be due and payable under the schedule set forth in the ordering 

paragraphs below. The remaining civil penalty amount of $25,000 shall become due 

and payable if, within one year of the date of issuance of this order, China Focus Travel

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

payment provisions, in which case, China Focus Travel may become subject to 

additional enforcement action for violation of the order. The Enforcement Office 

believes that the assessment of a civil penalty of $50,000 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 China Focus Travel and other sellers of air 

transportation. 

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

ACCORDINGLY,
5

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 China Focus, Inc., d/b/a China Focus Travel violated 14 CFR 

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

failed to state the entire price to be paid by the passenger to the firm for certain 

air transportation;

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

China Focus, Inc., d/b/a China Focus Travel engaged in an unfair and deceptive 

practice and an unfair method of competition in violation of 49 U.S.C. § 41712; 

4. We find that by failing to identify the September 11th Security Fee as 

required by section 1510.7, China Focus, Inc., d/b/a China Focus Travel 

engaged in an unfair and deceptive trade practice in violation of 49 U.S.C. 

§ 41712;

5. We order China Focus, Inc., d/b/a China Focus Travel and all other entities 

owned and controlled by, or under common ownership and control with China 

Focus, Inc., d/b/a China Focus Travel, and their successors and assignees, to 

cease and desist from future violations of 14 CFR 399.84 and 49 U.S.C. 

§ 41712;

6. China Focus, Inc., d/b/a China Focus Travel is assessed $50,000 in 

compromise of civil penalties that might otherwise be assessed for the violations 

found in ordering paragraphs 2, 3 and 4 of this order. Of the total penalty 

amount, $25,000 shall be due and payable as follows: $10,000 shall be due and 

payable within 30 days of the date of issuance of this order. Three payments of 

$5,000 each shall be due and payable on December 1, 2010, April 1, 2011, and 

July 1, 2011, respectively. Of 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, China Focus, Inc., d/b/a China Focus Travel violates this 

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

provisions, in which case, China Focus, Inc., d/b/a China Focus Travel may 

become subject to additional enforcement action for violating this order; 

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

Communications System, commonly known as “Fed Wire,” to the account of 
6

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

instructions contained in the Attachment to this order;

8. Failure to pay the compromise assessment as ordered shall subject China 

Focus, Inc., d/b/a China Focus Travel 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

9. We order China Focus, Inc., d/b/a China Focus Travel to submit to the Office 

of Aviation Enforcement and Proceedings copies of (a) all advertisements of air 

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

circulates as current during the last 30 days of the one-year period following the 

issuance of this order; and (b) printouts of screen displays advertising air tour 

prices on its Internet site for the 15th day of each month during the one-year 

period following issuance of this order. This material shall be submitted within 

15 days of the conclusion of the referenced one-year period. 

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
7