Order 2010-10-24

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the 29th day of October, 2010

Alaska Airlines, Inc. Docket OST 2010-0005

Served October 29, 2010

Violations of 49 U.S.C. § 41712 and 

14 CFR 399.84 

CONSENT ORDER

This consent order concerns violations by Alaska Airlines, Inc., (Alaska) of the full fare 

advertising requirements specified in 14 CFR 399.84 and the statutory prohibition against 

unfair and deceptive practices, 49 U.S.C. § 41712. This order directs Alaska to cease and 

desist from future violations of section 399.84 and section 41712, and assesses the carrier 

a compromise civil penalty of $50,000.

Applicable Law

As an air carrier, Alaska is subject to the advertising requirements of Part 399 of the 

Department’s rules. Pursuant to 14 CFR 399.84, advertisements specifying airfares must 

state the full price to be paid by the consumer. Under long-standing enforcement case 

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 the base fare 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 advertisement 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 displayed, or 2) include only 
(2)

general statements regarding the existence of such taxes and fees, do not comply with 

section 399.84, or the Department’s enforcement case precedent. Additionally, the 

Department has provided guidance advising the industry that conditions related to “free” 

tickets, such as a requirement to pay taxes and fees, should be noted prominently and 

proximately to the offer for a free ticket, at a minimum through the use of an asterisk or 

other symbol that directs the reader's attention to the information explaining the condition 

in easily readable print elsewhere in the advertisement. Violations of section 399.84 

constitute unfair and deceptive practices in violation of 49 U.S.C. § 41712.

With respect to Internet fare listings, additional charges that properly may be stated 

separately from the advertised fare may be disclosed through a prominent link placed 

adjacent to the stated fares that notes that taxes and fees are extra and directly takes the 

viewer to a pop-up, or to a place on a separate screen, where the nature and amount of 

taxes and fees are prominently and immediately displayed.1

In addition, as detailed in 49 CFR Part 1510, there are specific disclosure requirements 

pertaining to the September 11th Security Fee of $2.50 per enplanement on passengers of 

domestic and foreign carriers in air transportation originating at airports in the United 

States. Pursuant to section 1510.7, air carriers and foreign air carriers are specifically 

required to identify this fee as the “September 11th Security Fee” in all advertisements 

and solicitations for air transportation where it is not included in the advertised base fare. 

This office considers the failure of a carrier or ticket agent to identify the September 11th 

Security Fee as required by the rule to constitute a separate and distinct unfair and 

deceptive practice in violation of 49 U.S.C. § 41712.2

Background

During an on-site regulatory compliance inspection at Alaska’s corporate headquarters,

staff of the Department’s Office of Aviation Enforcement and Proceedings (Enforcement 

Office), discovered that many of Alaska’s published advertisements failed to properly

indicate at the first point in the advertisement where a fare is presented the existence and 

amounts of excludable taxes and fees. Furthermore, Alaska published advertisements 

noting that “Kids Fly Free,” but failed entirely to identify the existence and amount of 

additional taxes and fees that must be paid in order to take advantage of the offer of 

“free” transportation. Finally, in all published advertisements reviewed by the 

 1 For example, a carrier or ticket agent could advertise a flight in the following manner: $260 + 

Taxes and Fees with the taxes and fees language as a hyperlink that takes the viewer directly to the bottom 

of the screen, or to the place on a separate screen, were 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 Advertisements,” 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,” dated January 18, 2001, available 

at: http://airconsumer.ost.dot.gov/rules/guidance.htm.

2 See, e.g., Sceptre Tours, Inc., Violations of 49 U.S.C. § 41712 and 14 CFR Part 399, Order 2010-

6-23 (Jun. 28, 2010).
(3)

Enforcement Office, Alaska denotes the September 11th Security Fee as the “U.S. 

Security Fee”. Accordingly, Alaska’s advertisements violated the Department’s full-fare 

advertising rule, 14 CFR 399.84, and the prohibition against unfair and deceptive 

practices and unfair methods of competition, 49 U.S.C. § 41712. Alaska 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.

Mitigation

In mitigation and explanation, Alaska states that it takes compliance with government 

requirements seriously. Alaska further states that it has maintained transparency and 

cooperation during the Enforcement Office’s compliance review and in its everyday 

dealings with the Department. Alaska also states that after the Enforcement Office asked 

for a sampling of advertisements during its compliance inspection, Alaska disclosed to

the Enforcement Office that its “Kids Fly Free” advertising campaign did not comply 

with the Department’s full fare advertising requirements. As for the other advertising 

concerns highlighted by the Enforcement Office, Alaska states that it immediately 

modified its advertisements to comply with Department regulations and modified its 

internal review policy to ensure each advertisement undergoes legal review before being 

published.

Decision

The Enforcement Office has carefully considered the information provided by Alaska

Airlines, Inc., but continues to believe that enforcement action is warranted. The 

Enforcement Office and Alaska Airlines, Inc., have reached a settlement of this matter in 

order to avoid litigation. Alaska Airlines, Inc., without admitting any violation, consents 

to the issuance of this order to cease and desist from future violations of 49 U.S.C. 

§ 41712 and section 399.84 of the Department’s regulations, 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 the 

violations described herein and serves the public interest. It represents an adequate 

deterrence to future noncompliance with the Department’s advertising requirements by 

Alaska Airlines, Inc., as well as by other air carriers and foreign air carriers. 

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 this settlement and the provisions of 

this order as being in the public interest;

2. We find that Alaska Airlines, Inc., violated 14 CFR 399.84 by publishing fare 

advertisements that did not state the full price to be paid;
(4)

3. We find that by violating 14 CFR 399.84 as described in ordering paragraph 2, 

above, Alaska Airlines, Inc., has engaged in an unfair and deceptive practice and 

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, Alaska Airlines, Inc., engaged in an unfair and deceptive trade 

practice in violation of 49 U.S.C. § 41712; 

5. We order Alaska Airlines, Inc., and all other entities owned or controlled by or 

under common ownership with Alaska Airlines, Inc., and their successors and 

assignees, to cease and desist from violations of 14 CFR 399.84 and 49 U.S.C. 

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

Alaska Airlines, Inc., and their successors and assignees to further enforcement 

action;

6. We assess Alaska Airlines, Inc., a compromise civil penalty of $50,000 in lieu of 

civil penalties that might otherwise be assessed for the violations described in 

ordering paragraphs 2, 3, and 4, above; and

7. We order Alaska Airlines, Inc., to pay, within 15 days of the date of issuance of 

this order, the compromise civil penalty of $50,000 assessed in ordering 

paragraph 6 above, by wire transfer 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 the Attachment to this order. 

Failure to pay the penalty as ordered shall subject Alaska Airlines, Inc., to the 

assessment of interest, penalty, and collection charges under the Debt Collection 

Act and to further enforcement action for failing to comply 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 at www.regulations.gov