Order 2013-5-15

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 May, 2013

JTB USA, Inc.

Docket OST 2013-0004

Served: May 23, 2013

Violations of 49 U.S.C. § 41712 and

14 CFR Part 257

CONSENT ORDER

This consent order concerns violations by JTB USA, Inc., when it failed to disclose codeshare arrangements as required by 49 U.S.C. § 41712(c) and 14 CFR Part 257 during 

telephone airline reservation calls. These failures also constitute separate and distinct 

violations of 49 U.S.C. § 41712(a), the statutory prohibition against unfair and deceptive 

practices,. The order directs JTB USA to cease and desist from future violations of Part 

257 and section 41712 and assesses $60,000 in civil penalties.

Applicable Law

JTB USA is a ticket agent1 and is therefore subject to the detailed code-share disclosure 

requirements found in 49 U.S.C. § 41712(c) and 14 CFR 257.5(b). Under section 

41712(c), any “ticket agent, air carrier, foreign air carrier, or other person offering to sell 

tickets for air transportation on a flight of an air carrier” is required to disclose “whether 

verbally in oral communication or in writing in written or electronic communication, 

prior to the purchase of a ticket[,] the name of the air carrier providing the air 

transportation; and if the flight has more than one segment, the name of each air carrier 

providing the air transportation for each such flight segment.” Failure to disclose the

required information is an unfair or deceptive practice in violation of section 41712. 

Section 257.4 of the code-share disclosure rule states that the holding out or sale of 

scheduled passenger air transportation involving a code-sharing arrangement is an unfair 

and deceptive trade practice in violation of 49 U.S.C. § 41712, unless, in conjunction 

 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).
2

with that holding out or sale, carriers and agents follow certain requirements, including 

those of 14 CFR 257.5(b). With regard to oral communications concerning a flight that is 

part of a code-sharing arrangement, section 257.5(b) states that a ticket agent or carrier 

must disclose to prospective consumers, before they book the flight, the existence of the 

code-share arrangement, the corporate name of the transporting carrier, and any other 

name under which the flight is held out to the public. Violations of section 257.5(b)

constitute unfair and deceptive trade practices and unfair methods of competition in 

violation of 49 U.S.C. § 41712.

Facts and Conclusion

An investigation by the Office of Aviation Enforcement and Proceedings (Enforcement 

Office) revealed a significant lack of compliance by JTB USA with section 257.5(b) of 

the Department’s code-share rule and 49 U.S.C. § 41712(c). For a period of time during

January and February of 2013, Enforcement Office staff made a number of telephone 

calls to JTB USA as potential purchasers and inquired about booking a flight. During 

these calls, the JTB USA reservations agents answering these calls completely failed to 

make the required disclosure regarding code-share arrangements for the flights in 

question. Specifically, when discussing flights marketed by one carrier but operated by 

another with the callers, JTB USA’s reservation agents only identified the marketing 

carrier and did not identify the corporate name of the carrier operating the flight or any 

other name under which the flight was operated, even when prompted by the caller. The 

telephone calls indicated that JTB USA generally failed to inform consumers booking 

flights involving code-share arrangements of the identity of the airline that would actually 

operate the aircraft on which the consumer would be flying.

Mitigation

In mitigation, JTB USA states that it takes seriously its obligation to comply with the 

Department’s consumer protection rules and 49 U.S.C. § 41712 as implemented and 

construed by the Department. JTB USA states that it believed all of its agents in the 

United States were aware of the requirements in section 41712(c) and 14 CFR 257.5(b) to 

disclose the name of the operating carrier and any trade name by which the operating 

carrier provides transportation. In particular, JTB USA states that it does not believe any 

agent has failed to disclose the operating carrier for a flight conducted under an 

international code-share; the Department’s investigation was limited to code-share flights 

in selected domestic markets. JTB USA states that it also believes that a few of its agents 

mistakenly believed that disclosing the trade name of the operating carrier, such as 

United Express or Delta Connection, was sufficient disclosure. JTB USA states that it 

has no record of any customer complaint that a JTB USA ticket agent failed to disclose 

the operating carrier. JTB USA states that although the Department’s investigation likely 

involved only one or two JTB USA ticket agents, after being notified of the Department’s 

investigation JTB USA issued a memorandum to all agents in the United States 

reiterating the code-share disclosure requirements and providing practical guidance to 

ensure compliance prospectively. JTB USA states that its supervisory agents will 

personally address these requirements with each agent. Accordingly, JTB USA states 
3

that it can assure the Department that it is now in full compliance with these requirements 

and will faithfully observe them in the future.

Decision

We view seriously the failure of JTB USA to disclose code-sharing arrangements as 

required by 49 U.S.C. § 41712(c) and 14 CFR 257.5(b). Accordingly, after carefully 

considering all of the facts in this case, including those set forth above, the Enforcement 

Office believes that enforcement action is warranted. In order to avoid litigation, JTB 

USA agrees to the issuance of this order, to cease and desist from future similar

violations of 49 U.S.C. § 41712 and 14 CFR 257.5(b), and to the assessment of $60,000

in compromise of potential civil penalties that otherwise might be imposed pursuant to 49 

U.S.C. § 46301. We believe that this compromise assessment is appropriate in view of 

the nature and extent of the violations in question, serves the public interest, and provides 

a strong deterrent to non-compliance with the statute and the Department’s code-share 

disclosure rule.

This order is issued under the authority contained in 49 CFR Part 1.

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 by failing to disclose code-sharing arrangements as prescribed in 49 

U.S.C. § 41712(c) and 14 CFR 257.5(b), JTB USA, Inc., violated 14 CFR 257.5(b) and 

engaged in an unfair and deceptive practice in violation of section 41712;

3. We order JTB USA, Inc., and all other entities owned or controlled by or under 

common ownership with JTB USA, Inc., its successors and assignees to cease and desist

from further violations of 49 U.S.C. § 41712 and 14 CFR 257.5(b);

4. We assess JTB USA, Inc., $60,000 in compromise of civil penalties that might 

otherwise be assessed for the violations found in ordering paragraph 2 above. Of this 

total penalty amount, $10,000 shall be due and payable within thirty (30) days of the date 

of the issuance of this order; $10,000 shall be due and payable within sixty (60) days of 

the date of issuance of this order; and $10,000 shall be due and payable within ninety 

(90) days of the date of issuance of this order. The remaining portion of the civil penalty 

amount, $30,000, shall become due and payable immediately if, within one year of the 

date of issuance of this order, JTB USA, Inc., violates this order’s cease and desist 

provisions or fails to comply with the order’s payment provisions, in which case JTB 

USA, Inc., may be subject to additional enforcement action for violation of this order; 

and
4

5. Payment shall be made through Pay.gov to the account of the U. S. Treasury in 

accordance with the instructions contained in the Attachment to this order. Failure to pay 

any portion of the penalty as ordered shall subject JTB USA, Inc., to the assessment of 

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

6. 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:

SAMUEL PODBERESKY

Assistant General Counsel for 

 Aviation Enforcement and Proceedings

An electronic version of this document is available at 

www.regulations.gov