O rder 201 4

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

On the Second day of January

, 2014

WK Travel, Inc.

d/b/a OneTravel Docket OST 2014

- 0001

Served: January 2, 2014

Violations of 49 U.S.C. § 41 712 and

14 CFR Part 257

C ONSENT O RDER

This consent order concerns violations by WK Travel , Inc.

, d/b/a OneTravel, when it

failed to disclose code

- share arrangements as required by 49 U.S.C. § 41712(c) and 14

CFR Part 257 during teleph one 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 WK Travel to cease and desist from

future violati ons of Part 257 and section 41712 and assesses $ 95 ,000 in civil penalties. 1

Applicable Law

WK Travel is a ticket agent 2 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 s ection 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 communicatio n 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 se gment. ” Failure to disclose th e

1 WK Travel is part of the same legal family as Travelong, Inc. Both ticket agents us e the same call center for taking phone reservations. In issuing this order, the Department has decided not to take separate enforcement action against Travelong for alleged violations of the same regulation and statute.

2 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).2

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 49 U.S.C. § 41712

, unless, in conjunction with that holding out or sale, carriers and agents follow certain requirements, including those of 14 CFR 257.5(b). With regard t o 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

code

- share 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 49 U.S.C. § 41712.

Facts and Conclusion

An investigation by the Office of Aviation Enforcement and Proceedings (Enforcement Office) revealed a significant lack of compliance by WK Travel with section 257.5 (b) of the Department’s code

- share rule and 49 U.S.C. § 41712 (c)

. For a period of time during January and February of 20 13

, Enforcement Office staff made a number of telephone

calls to WK Travel as potential purchasers and inquired about booking a flight. During

these calls, t he WK Travel reservations agents answe ring th e se 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

, WK Travel ’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 wa s operated, even when prompted by the caller. The telephone

calls indicated that WK Travel general ly failed to inform consumers booking flights involving code

- share arrangements of the identity of the airline that would actually operate the aircraft on which the consumer would be flying.

Mitigation

In mitigation, WK Travel states that it takes very seriously its obligation to comply with the Department’s consumer protection rules and 49 U.S.C. § 41712. WK Travel observes that 49 U.S.C. § 41712(c) requires code

- share disclosure “prior to the purchase of a ticket.” The Department’s regulatio ns furth er provide under 14 CF R 257.5(b) that code

share disclosure must take place “prior to booking transportation.” WK Travel believes that the Enforcement Office’s guidance on the timing of oral code

- share disclosure did not adequately clarify that oral code

- share disclosure should take place during the

information

- gathering stage of a call, at the first mention of a code

- share flight. WK Travel believes that, particularly in the absence of explicit guidance from the Enforcement Office, it substantially compl ied with the Department’s rules by disclosing

the code

- share information prior to a customer booking transportation. WK Travel additionally states that it does not believe any of its agent s has failed to disclose the operating carrier for a flight conduct ed under an international code

- share and points out3

that the Enforcement Office ’s investigation was limited to code

- share flights in selected

domestic markets.

WK Travel further notes that it has no record of any customer complaint that a WK

Travel tick et agent failed to disclose the operating carrier. Immediately a fter being notified of the Department’s investigation, WK Travel states that it re

- trained its ticketing agents on how to comply with the code

- share disclosure rules and set up a rigorous

qua lity control program to oversee its call center

. Indeed, s ince the Department’s investigation, WK Travel states that it has invested a substantial amount of money and

resources in training, monitoring, and technology changes to ensure that its agents

comp ly with the Department’s oral code

- share disclosure policy . Accordingly, WK Travel states that it can assure the Department that it is now in full compliance with these requirements.

Decision

We view seriously the failure of WK Travel to disclose code

- s har ing 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, and without admitting or denying that any violation occurred, WK Travel 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 $ 95 ,000 in compromise of potential civil penalties that otherwise might be imposed pursuant to 49 U.S.C. § 46301

. We believe that this compromise assessment is appropriate in view of the nature and extent of the violations in question, serves the public in terest , 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 thi s 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), WK Travel, Inc., violat ed 14 CFR 257.5(b) and engaged i n an unfair and deceptive practice in violation of section 41712 ;

3. We find that by engaging in the conduct and violations described in ordering paragraph 2 above, WK Travel , Inc., engaged in unfair and deceptive practice s and unfair

method s of competition in violation of 49 U.S.C. § 41712(a);4

4. We order WK Travel , Inc., and all other entities owned or controlled by or under common ownership with WK Travel , Inc., its succes sors and assignees to cease and

desist from further violations of 49 U.S.C. § 41712 and 14 CFR 257.5(b);

5. We assess WK Travel , Inc., $ 95 ,000 in compromise of civil penalties that might otherwise be assessed for the violations found in ordering paragraph s 2 and 3 above . Of this total penalty amount, $ 47,5 00 shall be due a nd payable within 15 days from the date

of issuance of this order . The remaining portion of the civil penalty amount, $47

, 5 00, shall become due and payable immediately if, within one year of the date of issuance of this order, WK Travel, Inc., violates this order’s cease and desist provisions or fails to comply with the order’s payment provisions, in which case WK Travel, Inc., may be subject to additional enforcement action for violation of this order ; and

6. P ayment shall be made through Pay.gov to the account of the U. S. Tr easury in

accordance with the instructions contained in the Attachment to this order

. Failure to pay any portion of the penalty as ordered shall subject WK Travel , Inc., to the assessment of interest, penalty, and collection charges under the Debt Collect ion 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.

B Y:

SAMUEL PODBERESKY

Assistant General Counsel for

Aviation Enforcement and Proceedings

An electronic version of this document is available at www.regulations.gov