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 Sixth day of May, 2011

Wholesale Travel Center, Inc. OST

- 2011

- 0 0 03

Served May 6, 2011

Violations of 14 CFR Part 257 and 49 U.S.C. § 41712

C ONSENT O RDER

This consent order concerns violations by Wholesale Travel Center, Inc.

, (Wholesale Travel)

, an online airline ticket agent, of the Department’s code

- share disclosure rule,

14 CFR Part 257, and the statutory prohibition against unfair and deceptive practices, 49 U.S.C. § 41712. It directs Wholesale Travel to cease and desist from future violations

of Part 257 and section 41712 and assesses Wholesale Travel $ 30 ,000 in civil penalties

.

S ection 257.4 of the Department’s 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 u nless, in conjunction with that holding out or sale, the advertiser follows certain notice requirements, including those of 14 CFR 257.5(d). The specific terms of section 257.5(d) require that print advertisements, including those published on the Internet , “prominently disclose that the advertised service may involve travel on another carrier,” “clearly indicate the nature of the service in reasonably sized type,” and “identify all potential transporting carriers... by corporate name and by any other name un der which that service is held out to the public.”

An investigation by the Office of Aviation Enforcement and Proceedings (Enforcement Office) revealed a significant lack of compliance by Wholesale Travel with section 257.5. During at least the latter half of 2010

, Wholesale Travel failed to properly disclose the

existence of code

- sharing arrangements when advertising code

- share flights operated on behalf of a major air carrier by a regional air carrier on its Internet website

www.airfare.com

. Specifically, it did not display the corporate names of the transporting carriers and any other names under which those flights were held out to the public on its flight itinerary pages. Wholesale Travel ’s failure to properl y disclose the existence of

code

- sharing arrangements and the names of the transporting carriers could have result ed in consumers being deceived regarding the identity of the airline that was actually to operate the aircraft on which the consumer would be flying.2

In mitigation, Wholesale Travel states that upon learning that it was in violation of the Department’s code

- share regulations, it notified the Department that its Global Distribution System (GDS) was not providing it with certain code

- share inform ation.

Wholesale Travel further states that it initiated many conversations with its GDS so that it, and other online travel agencies using the same GDS, would be provided with the necessary code

- share information and would become compliant with the Depar tment’s regulations. Wholesale Travel states that it acted quickly to remedy the deficiencies on its website and did everything in its control to comply with the Department’s laws and regulations. Wholesale Travel states that its commitment to followin g the Department’s regulations is evidenced by the fact that when the Department released its new guidance document regarding the amendment to 49 U.S.C. § 41712 in January of 2011, Wholesale

Travel became compliant well before the allotted 60 day period.

We view seriously the failure of Wholesale Travel to disclose code

- sharing arrangements as required by 14 CFR Part 257. Accordingly, after carefully considering all of the facts in this case, including those set forth above, the Enforcement Office belie ves that enforcement action is warranted. In order to avoid litigation, Wholesale Travel agrees to
the issuance of this order to cease and desist from future similar violations of Part 257

and 49 U.S.C. § 41 712 and to the assessment of $ 30 ,000 in compromi se of potential civil penalties otherwise assessable against it. We believe that this compromise assessment is appropriate in view of the nature and extent of the violations in question, serves the public interest, and provides a meaningful incentive to a ll airlines and ticket agents to comply with the Department’s code

- share disclosure rule.

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

ACCORDINGLY,

1. Based on the above discussion, we approve thi s settlemen t and the provisions of this order as being in the public interest;

2. We find that Wholesale Travel Center, Inc., violated 14 CFR 257.5(d ) by failing

to disclose code

- shar ing arrangements as required;

3. We find that by engaging in the conduct and violations described in ordering paragraph 2 above, Wholesale Travel Center, Inc., engaged in an unfair and deceptive practice and unfair method of competition in violation of 49 U.S.C. § 41712;

4. We order Wholesale Travel Cent er, Inc., and all other entities owned or controlled by

, or under common ownership and control with Wholesale Travel
Center, Inc., and its successors and assignees to cease and desist from further violations of 14 CFR Part 257 and 49 U.S.C. § 41712;3

5. We assess Wholesale Travel Center, Inc., $30,000 in compromise of civil penalties that might otherwise be assessed for the violations described above. Of this total penalty amount, $15,000 shall be due and payable as follows: $5,000 shall be due and pa yable within 30 days of the date of issuance of this order; two payments of $5,000 each shall be due and payable on July 1, 2011

, and August 1, 2011. The remaining porti on of the civil penalty amount shall become due and payable if, within one year of the date of issuance of this order, Wholesale Travel Center, Inc., violates this order’s cease and desist provisions or fails to comply with this order’s payment provisions, in which case, Wholesale Travel Center, Inc., may become subject to additional enforc ement action for violation of the order; and

6. Payments shall be made by wire trans fer through the Federal Reserve Communications System, commonly known as “Fed Wire,” to the account of the U. S. Treasury in accordance with the instructions contained in th e Attachment to this order. Failure to pay the penalty as ordered will subject Wholesale Travel Center, Inc., to the assessment of interest, penalty and collection charges under the Debt Collection Act and to possible enforcement

action for failure to com ply with this order.

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:

ROSALIND A. KNAPP Deputy General Counsel

( SEAL)

An electronic version of this document is available on the World Wide Web at www.regulations.gov