Communications with respect to this document should be sent to:

Mike Borsetti

1 Montgomery St Ste 2500

San Francisco, CA 94104

mike@borsetti.com

19 May 2013

BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

In Re

British Airways Plc

Multiple Price Advertising Violations of

49 U.S.C. § 41712 and 14 CFR 399.84(a)

Docket DOT-OST-2013-0025

FURTHER COMMENTS IN SUPPORT OF 

DOT INVESTIGATION INTO BRITISH AIRWAYS PLC VIOLATIONS
Further Comments of Borsetti

1

BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

In Re

British Airways Plc

Multiple Price Advertising Violations of

49 U.S.C. § 41712 and 14 CFR 399.84(a)

Docket DOT-OST-2013-0025

FURTHER COMMENTS IN SUPPORT OF 

DOT INVESTIGATION INTO BRITISH AIRWAYS PLC VIOLATIONS
Further Comments of Borsetti

2

I update the chart I submitted in DOT-OST-2013-0025-0060 to incorporate issues 

raised by British Airways in its Answer (DOT-OST-2013-0025-0062) and Sur-Reply

(DOT-OST-2013-0025-0071), the latter only recently (13 May 2013) made available on 

www.regulations.com:

1. I update the fuel surcharge revenue to the figure provided by Mr. Edelman 

in DOT-OST-2013-0025-0068, Reply of Benjamin Edelman, page 7, which incorporates 

British Airways’ comments from DOT-OST-2013-0025-0062, British Airways Plc Answer to Complaint, as British Airways never provided actual or estimated revenue figures.

$44,327 

$75,668 

 $-

 $10,000

 $20,000

 $30,000

 $40,000

 $50,000

 $60,000

 $70,000

 $80,000

 $90,000

Fuel surcharge revenue Cost of fuel

BOS-LHR (estimate) single 777 flight

Fuel cost as of 25 January 2013

$31,341

Excess revenue over cost
Further Comments of Borsetti

3

2. I update the cost of fuel to reflect a price of fuel of $1,054.8 per tonne, as 

suggested by British Airways on page 6 of DOT-OST-2013-0025-0071, Sur-Reply of 

British Airways Plc to Reply of Complainant.

3. It is worth noting that the exact amount of excess revenue I depict is irrelevant to this proceeding as it underestimates the amount by which British Airways bursts 

through the DOT’s requirement that fuel surcharges “must be an accurate reflection of 

the fuel cost over some reasonable baseline”

1

(emphasis mine). I do not determine what a 

reasonable baseline is2, nor do I estimate its amount.

METHODOLOGY

4. I am sure the DOT will have no trouble seeing through the economic fallacy 

of British Airways’ assertion that additional fuel loaded for reserves, but not burned, 

should be somehow included in the calculation of cost of fuel3. Not only 100% of such 

unused fuel is recovered (aircraft tanks are “topped off” during refueling, and the remaining fuel after each flight is not, as the proposed methodology would imply, drained and 

disposed as waste), but the methodology used by me is based on the actual and verified4

 

1

United States of America, Department of Transportation, Office of the Secretary, Notice: Additional 

Guidance on Airfare/Air Tour Price Advertisements, February 21, 2012. Retrieved on 19 May 2013 from 

http://airconsumer.dot.gov/rules/Notice.Taxes.fees.sam.dl.13.website.pdf

2

A reasonable baseline is probably one based on the cost of fuel on or about March 31, 2004, as per DOTOST-2013-0025-0071, page 3: “BA’s fuel surcharge was introduced after the end of fiscal year 2004 

(March 31, 2004)”

3

DOT-OST-2013-0025-0071, page 6: “Mr. Borsetti, like Mr. Edelman, also failed to factor in European Union regulations that require the plane to carry approximately the jet fuel necessary to fly for eight to nine 

hours.”

4

Originally sourced (in my previous Comment) from British Airways plc. (2013, March 13). British Airways 

Plc Report and Accounts year ended 31 December 2012. Retrieved 21 March 2013 from 

http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9MTc1Njk3fENoaWxkSUQ9LTF8VHlwZT0z&t=1.
Further Comments of Borsetti

4

average overall British Airways fuel consumption rate, which therefore includes the 

amount of fuel burned to carry the extra fuel required for reserves as well as any additional fuel burned for diversions and other off-schedule events.

CURRENT DATA

5. It is worth noticing that a review of the actual price from IATA’s website5

shows the latest reported price at $897.2, the lowest it has been since January 25, 2013 

(shortly before Mr. Edelman filed his complaint). Notwithstanding this dramatic 15% reduction in fuel costs, British Airways’ fuel surcharges are unreduced6

. 

 

5

International Air Transport Association (IATA) (2013, April 26), Fuel Price Analysis. Retrieved 19 May 

2013 from http://www.iata.org/publications/economics/fuel-monitor/Pages/price-analysis.aspx

6

Passenger fuel surcharges retrieved from price quotes obtained at https://www.britishairways.com on 

19 May 2013; Cargo fuel surcharges retrieved from 

https://www.iagcargo.com/iagcargo/portlet/en/html/surcharges on 19 May 2013.
Further Comments of Borsetti

5

6. The up-to-date chart therefore looks as follows:

7. British Airways’ fuel surcharges for BOS-LHR-DOH are still lower than 

the fuel surcharges for BOS-LHR7(see my previous Comments, DOT-OST-2013-0025-

0060, Page 3, British Airways Fuel Surcharges Have No Relationship to Fuel Consumption). 

 

7

Retrieved from price quotes obtained at https://www.britishairways.com on 19 May 2013

$37,704 

$75,668 

 $-

 $10,000

 $20,000

 $30,000

 $40,000

 $50,000

 $60,000

 $70,000

 $80,000

 $90,000

Fuel surcharge revenue Cost of fuel

BOS-LHR (estimate) single 777 flight

Fuel cost as of 26 April 2013

$37,964

Excess revenue over cost
Further Comments of Borsetti

6

CONCLUSIONS

I am a simple consumer with zero law training writing on his free time on a Sunday, not a team of seven attorneys (most of whom probably billng by the hour), so pardon 

my brevity.

The facts in this docket speaks for themselves: British Airways has never provided any actual, verifiable data -- actual fuel surcharge revenue, actual fuel costs, and how 

fuel surcharge revenue is shared under the integrated joint venture with American Airlines8

. It has acted similarly to a child caught red-handed, offering a jumbled series of 

inventive arguments, some truly head scratchers9.

Mr. Secretary, it’s time to go forth and enforce the law!

 

8

See DOT-OST-2013-0025-0058

9

See, for example, the implied assertion made by British Airways, cited above, that it throws away the 

unburned fuel remaining after each flight. Other flaws include the use of total fuel expenditures, as opposed to per-passenger fuel expenditure, to justify a per-passenger fee, invalidating the way the argument is presented (total fuel expenditure are affected by changes in the size of the total operation, which 

grew over time, especially in 2012 when British Airways purchased and integrated Bmi). Furthermore, 

while BA asserts that it “does not intend to engage in a never-ending loop of dueling calculations with Mr. 

Edelman”, it does not provide the actual, verifiable revenues and cost figures that would conclusively put 

a stop to the estimation loop it laments about.
Further Comments of Borsetti

7

CERTIFICATION

The contents of this motion and the attached exhibits are true and correct to the 

best of my knowledge and belief. Pursuant to Title 18 United States Code Section 1001, I 

Mike Borsetti, have not in any manner knowingly and willfully falsified, concealed or 

failed to disclose any material fact or made any false, fictitious, or fraudulent statement or 

knowingly used any documents which contain such statements in connection with the 

preparation, filing or prosecution of this motion. I understand that an individual who is 

found to have violated the provisions of 18 U.S.C. section 1001 shall be fined or imprisoned not more than five years, or both.

Respectfully submitted,

___________________________

Mike Borsetti

19 May 2013
Further Comments of Borsetti

8

CERTIFICATE OF SERVICE

A copy of the foregoing has been served as required by 14 C.F.R. § 302.7 this day

of 19 May 2013 upon the following parties via electronic mail, and no indication was received that any transmission had failed:

 For the U.S. Department of Transportation:

o Samuel Podberesky, Esq., Assistant General Counsel for Aviation Enforcement & Proceedings: sam.podberesky@dot.gov

 For British Airways: 

1. Richard Mendles, General Counsel, Americas: richard.mendles@ba.com

2. James B. Blaney, Senior Counsel, Americas: jim.blaney@ba.com

3. Richard F. Hans, DLA Piper LLP: richard.hans@dlapiper.com

4. Keara M. Gordon, DLA Piper LLP: keara.gordon@dlapiper.com

5. Colleen Carey, DLA Piper LLP: colleen.carey@dlapiper.com

6. Don H. Hainbach, Garofalo Goerlich Hainbach PC: dhainbach@gghairlaw.com

7. Erin M. Tallardy, Garofalo Goerlich Hainbach PC: etallardy@gghairlaw.com

 For the Complainant:

o Benjamin Edelman, Esq.: ben@benedelman.org

___________________________

Mike Borsetti