Order 2011-8-8

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

On the Fourth day of August, 2011

Air Canada Docket OST 2011-0003

Served August 4, 2011

Violations of 49 U.S.C. § 41712 and 

14 CFR 399.84 

CONSENT ORDER

This consent order concerns Internet advertisements by Air Canada that violate the 

advertising requirements specified in 14 CFR 399.84, as well as 49 U.S.C. § 41712, 

which prohibits unfair and deceptive practices. It directs Air Canada 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 a foreign air carrier, Air Canada is subject to the advertising requirements of Part 399 

of the Department’s rules. Pursuant to 14 CFR 399.84, carriers advertising 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 base fares 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 advertisements 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 
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general statements regarding the existence of such taxes and fees 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 49 U.S.C. § 41712.1

 

In print advertisements, an asterisk or other symbol placed proximate to the advertised 

fare may refer the reader to the bottom of the advertisement where the nature and amount 

of the fees that may be stated separately are shown. In Internet advertising displays, 

taxes and fees that properly may be stated separately from the advertised fare may be 

disclosed through a prominent link placed adjacent to the stated fare 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.2

 

Facts and Conclusions

For a period of time in early 2011, Air Canada displayed advertisements on several

websites that did not advise consumers of the amount of taxes and fees that must be paid 

in addition to the advertised fare or directly bring the consumer to the information on 

additional taxes and fees. Rather, once the consumer clicked on the advertisement, he or 

she was taken to a landing page on Air Canada’s website where a list of routes and prices 

were displayed and consumers were not advised the details of the additional taxes and 

fees, stated in fine print, unless they scrolled to the bottom of the page. By failing to 

provide notice of the government imposed taxes and fees in any of the manners described 

above, Air Canada violated section 399.84, and applicable Department enforcement case 

precedent, and 49 U.S.C. § 41712. 

 Mitigation

In mitigation, Air Canada states that full compliance with Departments advertising rules 

is of the utmost importance to Air Canada, and it asserts that the deficiencies in the 

 1 See, e.g., US Airways, Inc., Violations of 49 U.S.C. § 41712 and 14 CFR 399.84, Order 2011-6-2 (June 2, 

2011). Delta Air Lines, Inc. Violations of 49 U.S.C. § 41712 and 14 CFR 399.84 Order 2010-5-30 (May 

28, 2010). On April 20, 2011, the Department issued a rule changing its enforcement policy with respect to 

section 399.84 to require that airlines and ticket agents comply with the rule as written. Under this new 

enforcement policy, which is effective January 24, 2012, airlines and ticket agents must include all 

government taxes and fees in every advertised fare. The Department’s long-standing prohibition on 

omitting carrier- or agent-imposed charges, such as fuel surcharges or convenience fees, from advertised 

fares remains in effect.

2 For example, under current policies, a carrier or ticket agent could advertise a flight in the following 

manner: “$260 + Taxes and Fees” with the phrase “Taxes and Fees” set off as a hyperlink that takes the 

viewer directly 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. 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.
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banner advertisements were completely unintentional. In response to the Department's 

concerns, Air Canada states that it promptly revised the banner ads and instructed its third 

party vendor to conduct a full review of its website and all U.S. marketing materials. 

Further, Air Canada asserts that it took additional steps to improve its advertising beyond 

what is required by the Department's rules. In this regard, Air Canada points out that it

revised all of its banner ads by using larger font and underlining for the taxes and fees 

disclosure, moving the disclosure closer to the displayed fare, and creating a roll-over 

pop-up box directly attached to the banner advertisement that displays the taxes, fees, and 

terms and conditions. Air Canada states that it also conducted a review of its terms and 

conditions to ensure that the language was as clear as possible. Finally, Air Canada points 

out that it has fully cooperated with the Department in this matter and reaffirms its 

commitment to providing consumers with complete and accurate information in all of its 

advertisements

Decision

The Department views compliance with the Federal aviation statutes and regulations very 

seriously. The Enforcement Office has carefully considered the information provided by 

Air Canada and continues to believe that enforcement action is warranted. The 

Enforcement Office and Air Canada have reached a settlement of this matter in order to 

avoid litigation. Without admitting or denying the violations described above, Air Canada

consents to the issuance of this order to cease and desist from future violations of 49 

U.S.C. § 41712 and 14 CFR 399.84, 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 a strong deterrent 

against future noncompliance with the Department’s advertising requirements. 

This order is issued under the authority 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 Air Canada violated 14 CFR 399.84 by advertising fares that failed to

state the entire price to be paid;

3. We find that by engaging in the conduct described in ordering paragraph 2, above, 

Air Canada engaged in unfair and deceptive practices and unfair methods of 

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

4. We order Air Canada, and all other entities owned or controlled by, or under common 

ownership and control with Air Canada, their successors, affiliates, and assigns, to 

cease and desist from further similar violations of 14 CFR 399.84 and 49 U.S.C. 
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§ 41712. Failure to comply with this cease and desist provision shall subject Air 

Canada, and their successors and assignees to further enforcement action;

5. We assess Air Canada $50,000 in compromise of civil penalties that might otherwise 

be assessed for the violations described above. Of this total penalty amount, $25,000 

shall be due and payable within 30 days of the date of issuance of this order. The 

remaining $25,000 shall become due and payable immediately if Air Canada, violates 

this order’s cease and desist provisions within one-year following the date of issuance 

of this order, or fails to comply with the order’s payment provisions; and

6. We order Air Canada to remit the payment ordered in paragraph 5 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 Air Canada, to the assessment of interest, penalty, and collection charges 

under the Debt Collection Act, and to additional enforcement action for failure 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