Order 2010-10-8

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the 18th day of October, 2010

Pacific Holidays, Inc. Docket OST 2010-0005

Served October 18, 2010

Violations of 49 U.S.C. § 41712 and 

14 CFR 399.80(f) and 399.84 

CONSENT ORDER

This consent order concerns Internet advertisements by Pacific Holidays, Inc., that violate 

the advertisement requirements specified in 14 CFR Part 399 as well as 49 U.S.C. 

§ 41712, which prohibit unfair and deceptive practices. It directs Pacific Holidays to 

cease and desist from future violations of Part 399 and Section 41712, and assesses the 

company a compromise civil penalty of $30,000.

Applicable Law

Pacific Holidays is a travel agent that sells air transportation. Engaging in such conduct 

makes Pacific Holidays a “ticket agent” pursuant to 49 U.S.C. § 401021 and therefore 

subjects it to the Department’s jurisdiction, including the prohibition on unfair and 

deceptive practices and unfair methods of competition in 49 U.S.C. § 41712 and the fare 

advertising requirements of 14 CFR Part 399. 

Pursuant to 14 CFR 399.80(f), as a matter of policy, the Department regards certain types 

of conduct by ticket agents to be unfair and deceptive practices or unfair methods of 

 1 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).
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competition, including “misrepresentations as to fares and charges for air transportation 

and services connected therewith.” 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, 2) include only general statements that 

additional taxes and fees apply to the advertised base fare, or 3) separate carrier-imposed 

surcharges from the base fare 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 violation of section 41712. When such advertisements are caused to be 

published by a ticket agent, they also violate section 399.80(f) and constitute a separate 

and distinct violation of section 41712.2

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 fare3 that notes that taxes and fees are extra and directly takes the 

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.4

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. 

 2

 See, e.g., Roni Herskovitz, Individually, and Ultimate Fares, Inc., Violations of 49 U.S.C. § 41712 and 14 

CFR 257.5(d), 399.80(f) and 399.84, Order 2009-11-8 (Nov. 9, 2009).

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

fees are prominently and immediately displayed.

4 See, e.g., Delta Air Lines, Inc., Violations of 49 U.S.C. § 41712 and 14 CFR 399.84, Order 2010-5-30

(May 28, 2010). See also 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.
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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. § 41712.5

Facts and Conclusions

A recent review of Pacific Holidays’ website by the Office of Aviation Enforcement and 

Proceedings (Enforcement Office) disclosed numerous instances where Pacific Holidays 

failed to comply with the Department’s full-fare advertising rule and case precedent. 

Pacific Holidays’ homepage listed a series of international air-inclusive vacation 

packages. In some instances, Pacific Holidays displayed fares, but provided no 

information about the nature and amount of additional taxes and fees, one of which was 

the September 11th Security Fee. In others, Pacific Holidays separately stated from its 

base fares a carrier-imposed fuel surcharge.

As stated above, Pacific Holidays may not break fuel surcharges out of its base fare and 

must provide proper notice of the nature and amount of taxes and fees that may properly 

be stated separately from the base fare. By advertising in the manner described above, 

Pacific Holidays has violated 14 CFR 399.80(f) and 399.84 and engaged in an unfair and 

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

Mitigation

In mitigation, Pacific Holidays states that it takes seriously compliance with DOT rules 

and its obligations to advertise and sell airfares to consumers in a transparent and lawful 

manner, that it in no way intended to mislead customers, and that it at all times 

cooperated with the Department in resolving this matter. Upon notice of the nonconforming fare advertisements, Pacific Holidays further states that it promptly removed 

them from its website.

Decision

The Enforcement Office has carefully considered the information provided by Pacific 

Holidays and continues to believe that enforcement action is warranted. The Department 

views compliance with the Federal aviation statutes and regulations very seriously. The 

Enforcement Office and Pacific Holidays have reached a settlement of this matter in 

order to avoid litigation. Without admitting or denying the violations described above, 

Pacific Holidays consents to the issuance of this order to cease and desist from future 

violations of 49 U.S.C. § 41712 and 14 CFR 399.80(f) and 399.84, and to the 

assessment of $30,000 in compromise of potential civil penalties otherwise due and 

payable pursuant to 49 U.S.C. § 46301.

 5 See, e.g., Sceptre Tours, Inc., Violations of 49 U.S.C. § 41712 and 14 CFR Part 399, Order 2010-6-23 

(June 28, 2010).
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This compromise assessment is appropriate considering the nature and extent of the 

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 contained in 49 CFR 1.57a and 14 CFR 385.15.

ACCORDINGLY,

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 Pacific Holidays, Inc., violated 14 CFR 399.80(f) and 399.84 by 

advertising fares that failed to state the entire amount to be paid for the advertised air 

transportation, as described above; 

3. We find that by engaging in the conduct described in paragraph 2, above, and by not 

identifying the September 11th Security Fee as required by 49 CFR 1510.7, Pacific 

Holidays, Inc., engaged in unfair and deceptive trade practices and unfair methods of 

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

4. We order Pacific Holidays, Inc., and all other entities owned or controlled by, or 

under common ownership and control with Pacific Holidays, Inc., its successors, 

affiliates, and assigns, to cease and desist from further similar violations of 49 U.S.C. 

§ 41712 and 14 CFR 399.80(f) and 399.84; 

5. We order Pacific Holidays, Inc., to retain copies of all advertising material, including 

newspaper advertisements and print-outs of all versions of its Internet website, that 

Pacific Holidays has caused to be published in the one year period following the 

service date of this order and, upon request, to provide those copies to the Office of 

Aviation Enforcement and Proceedings;

6. We assess Pacific Holidays, Inc., a compromise civil penalty of $30,000 in lieu of 

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

ordering paragraphs 2 and 3 above. Of this total penalty amount, $15,000 shall be 

due and payable in five equal installments of $3,000 each. The first payment of 

$3,000 shall be due and payable within 30 days of the date of issuance of this consent 

order. The second payment of $3,000 shall be due and payable within 60 days of the 

date of issuance of this consent order. The three subsequent equal installments of 

$3,000 shall be due and payable within 6 months, 9 months, and 12 months of the 

date of issuance of this consent order, respectively. The remaining $15,000 shall 

become due and payable immediately if Pacific Holidays, Inc. violates this order’s 

cease and desist or payment provisions during the 12 months following the service 

date of this order and Pacific Holidays, Inc. may also be subject to further 

enforcement action; 
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7. We order Pacific Holidays, Inc., to pay the compromise civil penalty 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. The wire transfers shall be executed in accordance with the instructions 

contained in the Attachment to this order. Failure to pay the compromise penalty 

assessment as ordered will subject Pacific Holidays, to an assessment of interest, 

penalty, and collection charges under the Debt Collection 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.

BY:

ROSALIND A. KNAPP

Deputy General Counsel

(SEAL)

An electronic version of this document is available at

www.regulations.gov