Order 2011

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

O n the Thirtieth day of August , 2011

JetBlue Airways, Ltd. Docket OST 2011

- 0003

Served August 30 , 2011

Violations of 49 U.S.C. § 41712 an d

14 CFR 399.84

CONSENT ORDER

This consent order concerns Internet advertisements by JetBlue Airways , Ltd., (JetBlue)

that violate d the advertising requir ements specified in 14 CFR 399 .84

, as well as 49

U.S.C. § 41712, which prohibit s u nfair and deceptive practices. It directs JetBlue to cease
and desist from fut ure violations of 399 .84 and s ection 41712, and assesses the carrier a compromise civil penalty of $ 50 ,000

.

Applicable Law

As an air carrier, JetBlue is subject to the advertising requirements of Part 399 of the Department’s rules. Pursuant to 14 CFR 399.84, carriers advertising airfares must state the full price to be paid by the consumer. Under long

- standing enforcement cas e precedent, the Department has allowed taxes and fees collected by carriers and ticket agents, such as passenger facility charges and departure taxes, to be stated separately from base fares in advertisements, so long as such taxes and fees are levied by a government entity, are not ad valorem in nature, i.e., not assessed as a percentage of the fare price, are collected on a per

- passenger basis, and their existence and amounts are clearly indicated at the first point in the advertisements where a fare is presented so that consumers can immediately determine the full fare to be paid. Thus, for example, fare advertisements that 1) fail entirely to identify the existence and amount of separate additional taxes and fees at the first point at which a fare is di splayed, or 2) include only2

general statements regarding the existence of such taxes and fees do not comply with section 399.84 or the Department’s enforcement case precedent. Violations of section 399.84 constitute unfair and deceptive practices in violat ion of 49 U.S.C. § 41712. 1

In print advertisements, an asterisk or other symbol placed proximate to the advertised fare may refer the reader to the bottom of the advertisement where the nature and amount of the fees that may b e stated separately are sh own. In Internet advertising displays, taxes and fees that properly may be stated separately from the advertised fare may be disclosed through a prominent link placed adjacent to the stated fare that notes that taxes and fees are extra and directly takes t he viewer to the bottom of the screen, or to a pop

- up or a place on a separate screen, where the nature and amount of taxes and fees are prominently and immediately displayed. 2

Facts and Conclusions

For a period of time in early 2011, JetBlue displayed fare advertisements on several websites that did not provide any information on additional taxes and fees. Rather , o nce the consumer clicked on the advertisement s , he or she was taken to JetBlue’s “Featured web fares” page where a list of routes and prices were displayed. Above that list appeared the statement “Taxes, fees, restrictions apply.” However, that statem ent was not a link

and consumer s could learn the amount of the additional taxes and fees, stated in fine print, only after scrolling to the bottom of the page or clicking on a link next to each of

the listed fares. JetBlue’s failure on several websites to provide proper notice of taxes and fees that may legally be stated separately from the fare viol ates 14 CFR 399.84

and 49 U.S.C. § 41712.

Mitigation

JetBlue states that it strives to comply with all regulato ry requirements, including the Department’s full

- fare advertising rules. According to the carrier, after it received

1 See, e.g., US Airways, Inc., Violations of 49 U.S.C. § 41712 and 14 CFR 399.84

, Order 2011

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- 2 (June 2, 2011); Delta Air Lines, Inc. Violations of 49 U.S.C. § 41712 and 14 CFR 399.84 , Order 2010

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- 30 (May 28, 2010). On April 20, 2011, the Department issued a rule ch anging its enforcement policy with respect to section 399.84 to require that airlines and ticket agents comply with the rule as written. Under this new enforcement po licy, which is effective January 24, 2012 , airlines and ticket agents must include all

go vernment taxes and fees in every advertised fare. The Department’s long

- standing prohibition on omitting carrier

- or agent

- imposed charges, such as fuel surcharges or convenience fees, from advertised

fares remains in effect.

2 For example, under current policies, a carrier or ticket agent could advertise a flight in the following

manner: “ $ 2 50 + Taxes and Fees” with the phrase “ T axes and F ees” set off as a hyperlink that takes the viewer directly to the bottom of the screen, or to a pop

- up or a place on a separate screen, where the nature and amount of taxes and fees are prominently and immediately displayed. See Department notices entitled “Disclosure of Air Fare Variations: Web vs. Other Sources, Surcharges that May be Listed Separately in

Adv ertisements,” dated November 4, 2004; “Disclosure of Additional Fees, Charges, and Restrictions on Air Fares in Advertisements, Including ‘Free’ Airfares,” dated September 4, 2003; and “Prohibition on Deceptive Practices in the Marketing of Airfares to the Public Using the Internet,” d ated January 18, 2001, available at: http:airconsumer.ost.dot.gov/rules/guidance.htm

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notification of the issue from the Office of Aviation Enforcement and Proceedings, (Enforcement Office) JetBlue removed the advertisements within hours

. JetBlue states

that this expeditious response reflects the seriousness with which JetBlue approaches its compliance re sponsibilities. JetBlue notes that it has also instituted additional training for

its relevant personne l to explain the Department’s current requirement s for advertising including those rules rece ntly issued by the Department.

Decision

The Department views compliance with the Federal aviation statutes and regulations very seriously. The Enforcement Office has carefully considered the information pro vided by

JetBlue and continues to believe that en forcement action is warranted. The Enforcement

Office and JetBlue have reached a settlement of this matter in order to avoid litigation. Without admitting or denying the violations described above, JetBlue consents to the

issuance of this order to cease and desist from future violation s of 49 U.S.C. § 41712 and

14 CFR 399 .84, and to the assessment of $ 50 ,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 th e violations described herein and serves the public interest. It represents a strong deterrent against future noncompliance with the Department’s advertising requirements.

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

ACC ORDINGLY,

1. Based on the above information, we approve this settlement and the provisions of this order as being in the public interest;

2. We find that JetBlue Airway s , Ltd.

, violated 14 CFR 399.84 by advertising fares that

failed to st ate the entire price to be paid;

3. We find that by engaging in the conduct described in ordering paragraph 2, above, JetBlue Airways, Ltd.

, engaged in unfair and deceptive practice s and unfair method s of competition in violation of 49 U.S.C. § 41712;

4. We order JetBlue Airways, Ltd., and all other entities owned or controlled by, or under common ownership and control with JetBlue Airways, Ltd.

, its successors and assigns, to cease and desist from further similar violations of 14 CFR 399.84 and 49

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

JetBlue Airways, Ltd.

, and its successors and assignees to further enforcement action;

5. We assess JetBlue Airways, Ltd. $ 50,000 in compromise of civil penalties that might

otherwise be assessed for the violations described above. Of this total penalty amount, $25,000 shall be due and payable within 30 days of the date of issuance of this order. The remaining $25,000 shall become du e and payable immediately if JetBlue Airways, Ltd., violates this order’s cease and desist provisions within one

- year4

following the date of issuance of this order, or fails to comply with the order’s payment provisions ; and

6. We order JetBlue Airways , Ltd. to r emit the payme nt ordered in paragraph 5 above by wire transfer through the Federal Reserve Communications System, commonly known as "Fed Wire," to t he account of th e U.S. Treasury in accordance with the

instructions contained in the a ttachment to this order. Failure to pay the penalty as

order ed shall subject JetBlue Airways, Ltd.

, to the assessment of interest, penalty, and collection charges under the Debt Collection Act, and to additional enforcement action for failure to comply with this order.

Th is 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:

ROSALIND A. KNAPP Deputy General Counsel

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