· 

, :;) 'G •..• ~.\1 IJr~ .. :: •.... ~ .<~W T.JUJmJ 

Data • ../:J. .... Qf.:. .. r/?::P../1 .. 

S.C. COMPANIA NATIONALA DE TRANSPORTURI 

AERIENE ROMANE 

TAROMs.a. 

224F Calea Bucurestilor 

Henri Coanda International Airport 

llfov 

Romania 

v/ 

Mr. Benjamin EDELMAN 

Third-party complainant 

169 Walnut St. 

Brookline, MA 02445 

BEFORE THE DEPARTMENT OF TRANSPORTATION 

OFFICE OF AVIATION ENFORCEMENT AND PROCEEDINGS 

WASHINGTON D.C. 

Docket DOT -OST -2013 

ANSWER OF TAROM s.a. 
1/ THE COMPLAINT OF Mr. BENJAMIN EDELMAN 

The complaint of Mr. Edelman is based on the quotation as seen on December 13, 2013 on 

the Tarom's web site and the ticket rate as shown by Tarom s.a. for a ticket New York JFK to 

Bucharest, Romania. 

The fare quote shows Euro 265,00- as the airline fare and Euro 300,70- taxes or a total ticket 

price of Euro 565,70-. 

On 'information and belief' of Mr. Edelman there is no 'tax' of Euro 300,70- on this route. 

The compliant in fact is based on the sentence that 'taxes, fees and charges' are all included 

in a 'tax box'. The compliant is based on the DOT rules not allowing airlines to redefine or 

disclaim the word 'tax'. 

The complaint urges the Department to direct Tarom to refund to passengers all funds 

collected as 'taxes' but not remitted to government entities, to assess appropriate civil 

penalties and to refer the matter to foreign tax authorities for investigation of possible tax 

fraud. 

II/ EUROPEAN COMMUNITY LEGISLATION 

TAROM is a European Community Carrier and as such has to comply with the relevant EC 

Regulations and Directives governing the information on rates and fares to their passengers. 

The compliance with the EC Regulations and Directives is checked and controlled by the 

competent authorities of the EU Member States. 

EC Regulation 1008/2008 on common rules for the operation of air services in the European 

Community and Directive 2005/29/EC concerning unfair business-to-consumer commercial 

practices in the internal market (the :uPC Directive') regulate airlines price information. 

The relevant provisions are as follows: 

A.l. Art. 23 of Regulation 1008/2008. 

A.l.l. Pursuant to Art. 23 of Regulation 1008/2008 each carrier, when operating from an 

airport located in the territory of a member state, has to indicate the final price of the flight 

ticket, including the applicable conditions for air services. This regulation has been inforce 

since November 01, 2008. 

--·----·-····--- ------· 
Art 23 provides that the final price should be indicated from the beginning of the booking 

process. In addition, a detailed breakdown of the price elements should be specified 

provided they have been added to the air fare: 

a/ the air fare or air rate 

b/ taxes 

c/ airport charges 

d/ other charges, surcharges or fees, such as those related to security or fuel. 

The article also stipulates that any optional price supplements shall be communicated in a 

clear, transparent and unambiguous way at the start of the booking process and their 

acceptance by the customer should be made on an 'opt-in' basis. 

A.2.2. The implications are as follows: 

1/The total price is clear at all times of the booking process. The price first advertised on a 

website or other types of media should be the final amount the consumer will have to pay, 

including all TFC's (Taxes, fees, charges) which are unavoidable and foreseeable at the time 

of the publication. 

2 All taxes, fees-<!nd cha_rges-'!Med_to_the_baslc airlaJ"e_sbmtld_he_sp_ecified indhlidually 

a oreal<aown st\oul8 oe prov18e8. For tliose airlines aaaing TFC's to tne oasic airfare, fne 

different charges must be clearly distinguished. All TFC's cannot be presented in a lump sum 

without specifying the price elements. 

A.2. Articles 5-7 of the Unfair Commercial Practices Directive. 

The UCP Directive protects consumers' economic interests from unfair commercial practices. 

It contains a general prohibition on unfair commercial practices and describes two main 

categories of unfair commercial practices in more detail: misleading commercial practices 

and aggressive commercial practices. 

Art. 5 of the Directive specifies that practices are to be considered 'unfair' if they are 

contrary to the requirements of professional diligence and materially distort or are likely to 

materially distort the economic behavior of a consumer, i.e. preventing a consumer from 

making an informed choice. 

According to art. 6 an action is misleading when it contains false information or in any way 

deceives or is likely to deceive the average consumer in relation to a number of elements, 

including the price or the manner in which the price is calculated. (art. 6.1.) 
Art. 7 provides that omissions should be regarded as misleading when they do not provide 

material information that the average consumer needs to make a purchase decision or of a 

trader provides the information in an unclear and ambiguous way. Moreover, art. 7.4. 

stipulates that in the case of an invitation to purchase the price of the product or service 

inclusive of taxes must be provided. 

A commercial practice is only misleading if the action or omission cause a consumer to take a 

transactional decision that he/she would not have taken otherwise, cfr. Art. 6.1 and 7.1. 

According to the UCP Directive, failure to provide customers with clear, appropriate and 

complete information relating to the price and any other cost associated with the provision 

of a service may constitute an unfair practice. Airlines must provide customers with the 

information they need in a timely and clear manner in order to make an informed choice. 

This information includes the prices and all unavoidable taxes, fees, charges and surcharges. 

According to art. 6oft he UCPDirective, which refers to the presentation of the price of the 

product or service or the manner in which it is calculated, the following actions can be 

regarded as misleading: 

Incorrect calculation of fees and taxes in the price of the ticket, 

Presenting costs which are contributing to the air carrier's general income as taxes 

and feesJmposellbiJ olheLboilles 

According to art. 7 of the Directive the following actions by airlines can be regarded as 

misleading omissions: 

The final price of the flight ticket does not include all the unavoidable taxes, charges 

and fees which are to be paid by the consumer {p.e. booking fees or fuel surcharge), 

No clear and easily accessible information on the refundability of charges, fees and 

taxes. 

A.3. Conclusion. 

According to European law, clear information about the final price of a service should be 

provided from the beginning of the reservation process. 

All taxes and fees should be named so as not to mislead the consumer by implying that 

charges imposed by the airline are in fact imposed by other bodies, airports or governments. 

It is also required that all fees should be correctly calculated. 

Ill/ COMPLIANCE OF THE INFORMATION PROVIDED WITH EC REGULATION 1008/2008 AND 

DIRECTIVE 2005/29/EC 

As known by all airlines, airlines and airports are using different terms to describe the same 

types ofTFC's. 
In the lATA TAX LIST the key terms taxes, charges and fees have been defined as: 

TAX: an impost for raising revenue for the general treasury and which will be used for 

general public purposes. 

CHARGE: an impost for raising revenue for specific aviation related facilities or 

services. 

FEE: another name for 'tax' or 'charge' depending upon what the revenue is used for 

as defined. (Taxes and charges are similarly defined in ICAO Doc 9082.3) 

By using the Tarom's reservation tool and passing all reservation steps, the consumer is 

informed about taxes, charges and fees, all together separated from the ticket rate in a 'tax 

box'. This 'tax box' can be renamed as a 'TFC box' if this wording would contribute to 

transparency of the ticket price. 

The relevant legislation aims to a correct information of the consumer by separating the 

basic air rate from taxes, fees and charges. 

The information to the passengers is not misleading if the consumer can see the breakdown 

of the rate as advertised by the airline and the breakdown of the rate is compliant with art. 

23 of EC Regulation 1008/2008. 

Under the system as applied by Tarom, TFC's (Taxes, Fees and Charges) are all included in a 

'tax box', as part of tb_e totaLtickeLrate_witb_abLE~akdoWJLon_theJ:icket 

The accusation as made by Mr. Edelman on possible tax fraud or misleading information to 

consumers is without any further proof even indication. 

It results from a report from the European Commission that detailed information on exactly 

what the price covers is of little or no use to the passenger. The passenger only needs 

information on the total price and the size of the refund for unused tickets, i.e. airport 

charges and government taxes imposed on passengers. To ensure transparency for both 

consumers and regulatory bodies it is important that the different airport charges and 

government taxes imposed per passenger is specified in the ticket price. Other price 

information is however generally superfluous for the passenger. 

It has to be mentioned that TAR OM does not operate to/from U.S.A. with its own flights, but 

only as marketing partner under a third country code-share agreement with Air France. 

At present, TAROM uses an e-commerce solution provided by a third party company, 

Amadeus IT Group S.A., as an 'SaaS' ('Software as a Service') solution. Being an 'SaaS' 

solution, TAROM has a limited control in terms of customization or modification of the 

existing solution and only the third party provider (in our case Amadeus IT Group S.A) is 

entitled to modify or customize the solution for a specific request. At the moment, TAROM 

presents to the end-user the total amount of taxes which are not broken down by 

components during the reservation process, but they are specified on the ticket, in the FARE 

CALCULATION box. Following Mr. Benjamin Edelman' complaint the specialists ofTAROM 

have already contacted Amadeus in order to find a solution to breakdown the TFCs. 
According to our current agreement with Amadeus IT Group S.A. and to the Amadeus 

internal procedure which requires that an internal ticket (Work Order, here referred to as 

WO) must be opened for any customization or product implementation, TAROM's specialists 

have opened the WO number 07882716 dated 10 January 2014, related to the modification 

of the internet booking engines to clearly indicate the breakdown of the TFC's. TAROM has 

also requested Amadeus to develop or implement for TAROM the solution already 

implemented for another airline using the same internet booking engine. 

The so called Fuel Surcharge entered in TAROM tickets into the TAX box under the YQ code is 

an amount fixed from time to time by TAROM and aimed to partially recover the fuel price 

fluctuation. It is officially filed and distributed to all CRS's through ATPCO (Airline Tariff 

Publishing Co). 

We would like to assure you that TAROM makes all efforts in order to be complying with the 

applicable regulations. We take all the necessary measures to ensure that clear information 

about the breakdown of TFC's on the final price of a service will be presented to the enduser on our website. 

Date: 16 January 

CC: Mr. Benjamin Edelman 

Attachments: 

TAROM electronic ticket sample 

Confirmation of Amadeus regarding the WO no. 07882716 requested on 10 January 2014 
Ana Maria lonescu 

From: 

Sent: 

Dana Chiriac [dana.chiriac@tarom.ro] 

16 ianuarie 2014 14:23 

To: 

Subject: 

'Ludo Sauwen'; 'Tarom Legal'; 'Anamaria lonescu'; 'Margareta Vasilevschi'; 'Monica Hustiuc' 

FW: WO 07882716- URGENT 

Dear All, 

Please find below the information we have just received from Amadeus. 

With my best regards, 

Dana 

Daniela Eugenia Chiriac 

Distribution Manager 

Commercial Division 

Campania Nationala de Transporturi Aeriene Romane TAROM S.A. 

224F Galea Bucurestilor, Otopeni, l!fov County, Romania 

Phone: (40-21) 2041264/ Fax: (40-21) 2014727 

dana.chiriac@tarom.ro; www.tarom.ro 

Please consider your environmental responsibility before printing this e~mail. 

From: Alvaro Diez [mailto:adiez@amadeus.com] 

Sent: 16 ianuarie 2014 14:17 

To: dana.chiriac@tarom.ro 

Cc: 'Ghassan Teffaha'; 'Monica Hustiuc' 

Subject: RE: WO 07882716 - URGENT 

Dear Dana 

Good to hear from you! 

Yes, it has been received and I have forwarded internally. I made clear this is urgent 

I will keep you posted as soon as I hear anything 

Thanks 

Best Regards 

Alvaro Diez 

Account Manager 

Airline Account Mgl Europe & Africa 

Amadeus IT Group SA 

T: +34 628259073 (ext. 7348 1704) 

adiez@amadeus.com 

http:f/www.amadeus.com 

aMaDEUS 

Your terchooklgy panner 

1 
From: 

To: 

"Dana Chiriac" <dana.chiriac@tarom.ro> 

'"Alvaro Diez"' <adiez@amadeus.com> 

Cc: 

Date: 

"'Ghassan Teffaha"' <qhassan.teffaha@amadeus.com>, "'Monica Hustiuc"' <monica.hustiuc@tarom.ro> 

01116/2014 01:13 PM 

Subject: RE: WO 07882716- URGENT 

Dear Alvaro, 

As the below matter becomes very urgent for us and both Ghassan and Jochen are out of the office, could you please confirm that 

Amadeus received our wo number 07882716 dated 10 January 2014, related to the modification of the internet 

booking engines to clearly indicate the breakdown of the TFC's? 

Please be advised that it is extremely important for us to receive the concerned confirmation today. 

Looking forward to hearing from you, many thanks and best regards, 

Dana 

Daniela Eugenia Chirja 

Commercial Division 

Campania Nationala de Transporturi Aeriene Romane TAROM S.A. 

224F Galea Bucuresti!or, Otopeni, l!fov County, Romania 

Phone: (40-21) 2041264/ Fax: (40-21) 2014727 

dana.chiriac@tarom.ro; www.tarom.ro 

~Please consider your environmental responsibility before printing this e-mail. 

From: Ghassan Teffaha [mailto:qhassan.teffaha@amadeus.com] 

Sent: 16 ianuarie 2014 13:36 

To: Dana Chiriac 

Cc: Jochen Allstadt; 'Monica Hustiuc' 

Subject: Re: WO 07882716 - URGENT 

Hi Dana, 

Will ask a! varo 

From: "Dana Chiriac" [dana.chiriac@tarom.ro] 

Sent: 01116/2014 12:48 PM ZE2 

To: Ghassan Teffaha 

2 
Cc: Jochen Allstadt; "'Monica Hustiuc'" <monica.hustiuc@tarom.ro> 

Subject: RE: WO 07882716- URGENT 

Dear Ghassan, 

I have just received an "out-of-the-office reply from Jochen ... 

Is there anybody else that could help us today? 

Thank you, 

Dana 

Daniela Eugenia Chiriac 

Distribution Manager 

Commercial Division 

Campania Nationala de Transporturi Aeriene Romane TAROM S.A. 

224F Galea Bucurestilor, Otopeni, llfov County, Romania 

Phone: (40-21) 20412641 Fax: (40-21) 2014727 

dana.chiriac@tarom.ro; www.tarom.ro 

~Please consider your ~nvironmental responsibility before printing this e-mail. 

From: Dana Chiriac [mailto:dana.chiriac@tarom.ro] 

Sent: 16 ianuarie 2014 12:42 

To: 'Jochen Allstadt' 

·· ··· ··ec""Gbassali=li!ffiin~IS'loiuca-:Eicisw~~~~~~~~~~~~~~~~~~~~~~~~~=:;;=~~ 

Subject: FW: WO 07882716 - URGENT 

Dear Jochen1 

As the below matter becomes very urgent for us and Ghassan is out of the office, could you please confirm that Amadeus received 

ourwo number 07882716 dated 10 January 2014, related to the modification of the internet booking engines to 

clearly indicate the breakdown of the TFC's? 

Looking forward to hearing from you, many thanks and best regards, 

Dana 

Daniela Eugenia Chiriac 

Distribution Manager 

Commercial Division 

Campania Nationala de Transporturl Aeriene Romane TAROM SA 

224F Calea Bucurestilor, Otopeni. llfov County, Romania 

Phone: (40-21) 2041264 I Fax: (40-21) 2014727 

dana.chiriac@tarom.ro; V>NJW.tarom.ro 

~Please consider your environmental responsibility before printing this e-mail. 

From: Dana Chiriac [mailto:dana.chiriac@tarom.ro] 

3 
Sent: 15 ianuarie 2014 17:17 

To: 'Ghassan Teffaha'; 'Monica Hustiuc' 

Subject: RE: WO 07882716 - URGENT 

Thank you, Ghassan! 

Very much appreciated, 

Dana 

Daniela Eugenia Chiriac 

Distribution Manager 

Commercial Division 

Campania Nationala de Transporturi Aeriene Romane TAROM S.A. 

224F Catea Bucurestilor, Otopeni, llfov County, Romania 

Phone: (40-21) 2041264 I Fax: (40-21) 2014727 

dana.chiriac@tarom.ro; www.tarom.ro 

J:j Please consider your environmental responsibility before printing this e-mail. 

From: Ghassan Teffaha [mailto:qhassan.teffaha@amadeus.com] 

Sent: 15 ianuarie 2014 16:47 

To: Dana Chiriac; 'Monica Hustiuc' 

Subjed~e~WQ QZ~821±6=URGE; 

Hi Dana, 

Will check with Jochen 

From: "Dana Chiriac" [dana.chiriac@tarom.ro] 

Sent: 01/15/2014 04:23PM ZE2 

To: Ghassan Teffaha; '"Monica Hustiuc"' <monica.hustiuc@tarom.ro> 

Subject: RE: WO 07882716- URGENT 

Hi; Ghassan! 

As already mentioned by Monica, this confirmation is extremely important and urgent for us, as we need to use it as a proof for a 

legal complaint initiated by an American lawyer at DOT. 

As our response should be filed with DOT by the end of this week, I am afraid that we cannot wait until next Tuesday. Could you 

please let us know if there is anybody else in Amadeus that could help us in this respect? 

Many thanks for your kind assistance and best regards, 

Dana 

4