Order 2010-12-26

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Twenty-Third day of December, 2010

Société Air France Docket OST 2010-0005

Violations of Article 17 of the 

 Montreal Convention and 49 U.S.C. § 41712 Served December 23, 2010

 

CONSENT ORDER

This consent order results from Société Air France’s (Air France) policy to refuse 

reimbursement for certain items of luggage lost in international transit to or from the 

United States in violation of Article 17 of the Montreal Convention and the statutory 

prohibition against unfair and deceptive trade practices, 49 U.S.C. § 41712. It directs Air 

France to cease and desist from future similar violations of Article 17 and section 41712, 

and assesses the carrier a compromise civil penalty of $100,000.

Applicable Law

Article 17 of the Montreal Convention states that carriers are liable, up to the monetary 

limits in the Convention, for loss of or damage to baggage “upon condition only that the 

event which caused the destruction, loss or damage took place on board the aircraft or 

during any period within which the checked baggage was in the charge of the carrier.”1

 

It does not make an exception for any class or category of baggage, such as jewelry, 

electronics, or high-value items. Although the Montreal Convention allows some

liability limitations and permits carriers to require a Special Declaration of Interest if the 

value of the checked items exceeds those liability limitations, blanket exclusions from 

liability are not permitted. Thus, Article 17, in effect, mandates that, once a carrier 

accepts checked baggage, it may not limit its liability for any of the contents therein to 

less than the limit set by the Convention, which is currently 1,131 Special Drawing 

Rights.

2

 1 Convention for the Unification of Certain Rules for International Carriage by Air, adopted on May 28, 

1999.

 Further, Article 26 of the Montreal Convention states that any provision tending 

to relieve the carrier of liability or to fix a lower limit than that which is laid down in the 

2

Convention at Article 22(2) and Inflation Adjustments to Liability Limits Governed by the Montreal 

Convention Effective December 30, 2009, 74 FR 59017, available at http://airconsumer.dot.gov/rules/

Notice_11_09_09.pdf (November 9, 2009).
2

Convention is null and void. In an industry guidance document dated March 26, 2009, 

the Department reminded all airlines that in foreign air transportation, Article 17 

prohibits them from applying blanket liability exclusions to any class or category of 

baggage that they have accepted for transport. 3 The guidance also reminded carriers that 

violations of Article 17 constitute unfair or deceptive business practices and unfair 

methods of competition in violation of 49 U.S.C. § 41712.4

Background

Long after the Office of Aviation Enforcement and Proceedings (Enforcement Office)

reminded carriers of the requirements of Article 17, the Enforcement Office received a 

consumer complaint that indicated that Air France had a baggage policy and practice in 

place that contravened Article 17 of the Montreal Convention. Specifically, Air France’s 

General Conditions of Carriage stated that Air France is: 

[N]ot responsible for valuable, fragile or perishable items such as money, 

currencies, jewelry, works of art, precious metals, silverware, securities or 

other valuables, expensive clothes, optical or photographic appliances, 

computers, electronic and/or telecommunications equipment or appliances. 

Air France also referenced these terms on the passenger’s ticket jacket and on its website.

Air France referenced these terms in letters sent to consumers who complained about lost 

or missing items from checked luggage. Based upon this information, the Enforcement 

Office initiated an investigation, reviewing consumer complaints received by Air France

concerning liability exclusions related to lost or damaged baggage. Despite the explicit 

terms of Article 17, and after the Enforcement Office’s March 2009 guidance, the

Enforcement Office found numerous complaints indicating that Air France applied the 

terms stated above and that it was Air France’s practice under all circumstances to

completely deny liability for the loss or pilferage of certain checked items in a 

passenger’s checked baggage, in contravention of Article 17 of the Montreal Convention.

Mitigation

Air France states that it is committed to addressing and correcting any deficiencies in 

policies that are, or could be perceived as, contrary to its obligations under the Montreal 

Convention. Air France states that it modified its policies and practices for addressing 

claims by passengers for baggage loss to be consistent with the provisions of Article 17 

of the Montreal Convention after the Enforcement Office issued its guidance. However, 

Air France notes that some text contained in certain pre-formatted letters used by its 

customer relations department were not updated and still included inappropriate 

 3

Guidance on Airline Baggage Liability and Responsibilities of Code-Share Partners 

Involving International Itineraries, 74 FR 14837, available at 

http://airconsumer.dot.gov/rules/webnotice_04012009.pdf (March 26, 2009). The notice gave air carriers

ninety (90) days from the date of the notice to revise their tariffs, statements, and policies related to 

baggage liability.

4 Id.
3

references to blanket exclusions permitted under the Warsaw Convention regime. 

Nevertheless, Air France points out that its review of a sampling of files revealed that in 

many instances Air France did offer, and the client did accept, compensation for baggage 

loss consistent with the terms of both the Montreal Convention and Air France’s internal 

procedures. Air France notes that in response to the Enforcement Office’s investigation, it 

took immediate steps to remove the offending language from letters being used by Air 

France. Additionally, Air France supervisory staff began an ongoing review of letters 

addressing claims for lost, damaged and pilfered baggage to ensure that the agents are 

complying and deleting inappropriate text. Air France affirms that these reviews are 

continuing and are being stringently applied. Air France asserts that is taking all 

necessary steps to ensure its continued compliance with Article 17 of the Montreal 

Convention.

Decision

The Enforcement Office has carefully considered the information provided by Air France

but continues to believe that enforcement action is warranted. The Enforcement Office 

and Air France have reached a settlement of this matter in order to avoid litigation. Air 

France consents to the issuance of an order to cease and desist from future violations of 

Article 17 of the Montreal Convention and 49 U.S.C. § 41712 of the Department’s 

regulations, and to the assessment of $100,000 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 the size and sophistication of the carrier, and serves the 

public interest. It represents an adequate deterrence to future noncompliance with the 

Montreal Convention by Air France, 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 Société Air France violated Article 17 of the Montreal Convention 

by having in place a policy of applying a blanket liability exclusion to certain

classes and categories of baggage that it accepted for transport; 

3. We find that by engaging in the conduct and violations described in ordering 

paragraph 2, above, Société Air France, has also violated 49 U.S.C. § 41712; 

4. We order Société Air France, and all other entities owned or controlled by or 

under common ownership with Société Air France, and their successors and 

assignees, to cease and desist from violations of Article 17 of the Montreal 

Convention and 49 U.S.C. § 41712;
4

5. Société Air France is assessed $100,000 in compromise of civil penalties that 

might otherwise be assessed for the violations found in ordering paragraphs 2 and

3, above. Of this total penalty amount, $50,000 shall be due and payable within 

15 days from the date of issuance of this order. The remaining $50,000 shall 

become due and payable if Société Air France violates this order’s cease and 

desist or payment provisions within one year following the date of issuance of this 

order, in which case the entire unpaid portion of the civil penalty shall become 

due and payable immediately, and Société Air France, may be subject to 

additional enforcement action for failure to comply with this order. Failure to pay 

the penalty as ordered shall also subject Société Air France, to the assessment of 

interest, penalty, and collection charges under the Debt Collection Act; and

6. Payment shall be made 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 attached instructions.

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