1 Department of Transportation

Office of Aviation Enforcement and Proceedings

)

)

Cathay Pacific ) February 6

, 2 0 13

)

Price Advert i sing Violations of )

49 U.S.C. § 41712 and 14 CFR 399.84(a) )

)

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ )

Cathay Pacific advertises around

‐ the

‐ world air travel via the self

‐ service booking tool at

http://rtw.on eworld.com/

. This tool systematically mischaracteri zes carrier

‐ imposed surcharges as

“tax.” These amounts can be substantial

– regularly more than $1000 on a single ticket, and I believe in

some instances more than $2000.

I hereby request that DOT docket this complaint as a request for DOT to exercise its authority under 49

USC 41712 to investigate and impose sanctions on Cathay Pacific for the unfair and deceptiv e practices

described herein.

If a passenger chooses an itinerary with the first segment on Cathay Pacific, Cathay Pacific charges the

customer’s credit card and issues the entire ticket. See http://www.oneworld.com/flights/plan

‐ book

‐

online/?faqOnly=1 at heading “FAQ”

– “Who is my ticketing airline?”

I have quoted a variety of around

‐ the

‐ world tickets using this tool. For example, on January 20, 2013, I

quoted a coach ticket ORD

‐ HKG

‐ NRT

‐ HKG

‐ SIN

‐ LHR

‐ ARN

‐ LHR

‐ DXB

‐ LHR

‐ JFK

‐ YVR with the first four

segments on CX. Taxes were quoted at $1,327.44 USD. See Attachment 1. I clicked the “Proceed”

button and re c eived the lengthy itinerary and fare quote shown in Attachment 2, reiterating the

$1,327.44 quote of “Taxes.” There, the word “Taxes” appeared as a hyperlink. I clicked this link,

receiving the itemization in Attachment 3. The top two lines of that itemization report “Multiple

Surcharges” of $242.50 and “Surcharge ” of $798.

As best I ca n tell there are no actual gov ernment taxes totaling the $1,327.44 “tax” charged on this

itinerary. Rather, I believe the majority of the $1,327.44 “tax”

– specifically, the $242.50 and $798 later

characterized as “surcharge”

– are actually carrier

‐ imposed surcharges. Thus

, 78.3% of the $1,327.44

“tax” is not actually tax bu t rather carrier

‐ imposed surcharge.2 Crucially, the initial disclosures (as shown in Attachments 1 and 2) mischaracterize the amounts at issue

as “taxes”, not “taxes and surcharges” or the like. Moreover, every user using this booking tool must

see the screens in Attachments 1 and 2; in contrast, the information in Attachment 3 is shown only if

users specifically click the “Taxes” hyperlink to view details. Thus, even though Attachment 3 describes

the surcharges within a page entitled “taxes and surcharges information”, most users are unlikely to see

this screen. Mo reo v er, the “and surcharges” label appears only in HTML title, not in page text

–

insufficiently prominent to cure the false statements made previously. Indeed, at the same time that

the “taxes and surcharges” label appears at the top of the page (indicating that some of the listed

charges are “surcharges” rat h e r than taxes), the wording “TaxBreakdownPopUp” appears immediately

below (in the popup’s URL bar) (indicating that everything in the listing is a “tax”). Finally, even on the

most favorable view, the statements in Attachment 3 still fall short of applicable DOT rules: Note the

absence of the crucial words “carrier

‐ im posed” as well as the failure to include statements

substantiating the surcharge amounts (“On average our passengers paid...” or similar). These omissions

are in sharp contrast to the requirements of Additional Guidance on Airfare/Air Tour Price

Advertisements (http://airconsumer.dot.gov/rules/Notice.Taxes.fees.sam.dl.13.website.pdf ).

Required Resolution

I ask that the Department of Transportation:

(1) Exercise its authority under 49 USC 41712 to open an investigation of Cathay Pacific for having

engaged in, and continuing to engage in, the unfair or deceptive practices described above;

(2) Order Cathay Pacific to refund to ticket purchasers all monies represented to tick et pur chasers as

"taxes" or government

‐ imposed fees, but not actually remitted to governments;

(3) Impose appropriate civil penalties on Cathay Pacific;

(4) Refer this matter to appropriate US and foreign tax collection agencies for investigation of possible

tax fraud or other violations of tax law in non

‐ payment to governm e nts of moni es collected as “taxes” or

government

‐ imposed fees; and

(5) Issue any guidance or revised regulations needed to clarify to other airlines and ticket agents, and to

preclude any future claim of ambiguity, that these practices are unfair and deceptive in violation of 49

USC 41712.

Submitted February 4 201 3,

/s/

Benjamin Edelman3 Attachment 14 Attachment 25 Attachment 2 (continued)6 Attachment 3Verification

Pursuant to Title 18 United States Code Section 1001, I, Benjamin Edelman, in my individual capacity,

have not in any manner knowingly and willfully falsified, concealed, or failed to disclose any material

fact or made any false, fictitious or fraudulent statement or knowingly used any document which

contains such statements in con nection with the preparation, filing

, or prosecution of the pleading. I

understand that an individual who is found to have violated the provisions of 18 U.S.C. Section 1001

shall be fined or imprisoned not more than five years, or both.

Benjamin Edelman, Esq.Certificate of Service

Pursuant to 14 CFR 302.7(b), I served this document on John Mietus, designed agent for Cathay Pacific,

by electronic mail to john@mietuslaw.com. I re ceivd no i n di c ati o n that any transmission had failed. I

sent the emai l on February 6, 2013 at ap proximately 7:00pm US Pacific time.

Signed February 6 th 2013 in San Francisco, CA,

Benjamin Edelman