Benjamin Edelman

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BEFORE THE DEPARTMENT OF TRANSPORTATION

OFFICE OF AVIATION ENFORCEMENT AND PROCEEDINGS

WASHINGTON, D.C.

------------------------------------------------------)

)

Benjamin Edelman, )

 third-party complainant )

)

v. ) Docket DOT-OST-2013-0025

)

British Airways Plc ) 

)

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REPLY OF BENJAMIN EDELMAN

Comments with respect to this document should be addressed to:

Benjamin Edelman

169 Walnut St.

Brookline, MA 02445

E-mail: ben@benedelman.org

Dated: April 19, 2013
Benjamin Edelman

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BEFORE THE DEPARTMENT OF TRANSPORTATION

OFFICE OF AVIATION ENFORCEMENT AND PROCEEDINGS

WASHINGTON, D.C.

---------------------------------------------------------------)

)

Benjamin Edelman, )

 third-party complainant )

)

v. ) Docket DOT-OST-2013-0025

)

British Airways Plc ) 

)

---------------------------------------------------------------)

REPLY OF BENJAMIN EDELMAN

I. British Airways Has Repeatedly, and Yet Again, Failed to Defend Its Fuel Surcharge 

with Appropriate Estimates................................................................................................. 3

II. Public Sources Indicate that British Airways Fuel Surcharges Are Not a 

Reasonable Estimate of Per-Passenger Fuel Costs Above a Baseline................................ 5

III. Examining the Fuel Surcharge on Low Coach Fares Is An Appropriate Method to 

Consider the Basis of a Fuel Surcharge .............................................................................. 8

IV. BA‟s New “Carrier Charges” Surcharges Are Also Impermissible under DOT 

Rules 9

V. BA‟s OnBusiness Table Continues to Omit Information about Carrier-Imposed 

Surcharges, Contrary to DOT Requirements.................................................................... 10

VI. Any “Tension” Between US and EU Rules Is Easily Addressed .......................... 12

VII. BA Is Liable for False Statements of “Tax” on Around-The-World Tickets that 

Are Ticketed by BA, No Matter What Agent Quotes the Fare......................................... 13

REPLY OF BENJAMIN EDELMAN

1. My February 4, 2013 Complaint properly called into question whether 

British Airways fuel surcharges are a reasonable estimate of per-passenger fuel costs 

above a baseline (p.1) including costs implausibly high vis-à-vis ordinary paid tickets 
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(p.2) and seemingly beyond actual fuel costs (pp.3-4). I also noted certain BA award 

point tables failing to disclose carrier-imposed surcharges in the manner required by DOT 

instructions (p.4) and combining government-imposed taxes with carrier-imposed fees, 

again contrary to DOT instructions (pp.4-5). Finally, I showed around-the-world fare 

quotes systematically but falsely characterizing BA carrier-imposed surcharges as “tax” 

(p.5).

2. BA‟s Answer argues that my Complaint errs in my precise estimation of 

fuel surcharge revenue and fuel expense, though tellingly British Airways never offers a 

contrary estimation of its own or any affirmative argument that its fuel surcharges reflect 

a reasonable estimate of per-passenger fuel costs above a baseline (as specifically 

required by DOT). Separately, BA attempts to escape liability for the prohibited 

statements in award charts and the online around-the-world booking tool via 

mischaracterization of applicable requirements. These defenses fall flat. The DOT 

should further investigate the scope of the unlawful BA practices I identified.

I. British Airways Has Repeatedly, and Yet Again, Failed to Defend Its Fuel 

Surcharge with Appropriate Estimates

3. The DOT has instructed that “carrier[s] should be prepared to detail the ... 

costs” of items subject to surcharges in order to allow the DOT and the public to confirm 

that “amounts listed as charges for particular services ... accurately reflect the actual 

costs of the service covered” (February 21, 2012 Notice, p.3). BA has systematically and 

repeatedly failed to do so.

4. Particularly tellingly, BA‟s Answer confirms BA‟s inability or refusal to 

provide the required estimation to support its fuel surcharges. BA‟s Answer to my 

Complaint would have been a natural context in which BA could have argued, for 
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example, that a given flight on a given route entailed costs of $x of fuel on some recent 

date, compared to $y in some prior year, but BA collected only $z of fuel surcharge. 

Alternatively, if BA cannot (or declines to) associate costs and revenues with individual 

flights, BA could have made a statement of the form that it spent $x on fuel in 2012, 

systemwide or on some portion of its route network (e.g. transatlantic sectors), compared 

to a baseline of $y in some prior year, with only $z of fuel surcharge revenue in 2012. 

BA offered nothing of the kind. In this context, the DOT should conclude that BA has 

not complied with the DOT requirement to “be prepared to detail” the basis of a 

surcharge estimation, and has thus violated 14 CFR 399.84.

5. Nor is BA‟s recent Answer the first opportunity in which BA has failed to 

defend its fuel surcharges with appropriate calculations. I have offered BA five separate 

opportunities to provide the basis of its surcharges. Specifically, I sent an online inquiry 

to British Airways customer relations on June 5, 2012 (Complaint, Attachment 8), I 

called British Airways telephone representatives (as instructed by British Airways in the 

reply to my June 5 inquiry), I inquired with British Airways Customer Relations by fax 

on June 7, 2012 and July 23, 2012, and I emailed the British Airways General Counsel, 

Americas, on November 8, 2012. I received no substantive response to any of these 

inquiries, including no information whatever as to the costs associated with the surcharge.

6. BA‟s Answer creates a strawman of “an exact, statistical correlation 

between fuel surcharge and the actual cost of fuel actually expended on a particular 

flight” (Answer p.4), claims that I demand this level of precision, and argues that such 

precision is impossible. But I sought no such thing. What I actually requested, and what 

DOT rules require, is that any fuel surcharge must be a reasonable estimate of per-
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passenger fuel costs above a baseline. Perfection is not required, nor did my Complaint

seek perfection.

II. Public Sources Indicate that British Airways Fuel Surcharges Are Not a 

Reasonable Estimate of Per-Passenger Fuel Costs Above a Baseline

7. Without access to BA confidential business records, my initial Complaint

used public sources to demonstrate that BA fuel surcharges are not a reasonable estimate 

of per-passenger fuel costs above a baseline. BA‟s Answer suggests various adjustments 

to my estimate (pp.7-10). The suggested adjustments serve to somewhat reduce fuel 

surcharge revenue and somewhat increase fuel costs, but they do not alter the conclusion 

that BA fuel surcharges are not a reasonable estimate of costs above a baseline. 

8. In addition, some of BA‟s suggested adjustments are illogical and inapt. 

For example, BA suggests calculating fuel costs by considering “the cost of fully fueling” 

the planes used on transatlantic routes (p.8). But the short flight BOS-LHR simply does 

not call for the full 168,090 liters of fuel a 777 is capable of carrying. BA has no 

business purpose to load so much fuel, and in the unlikely event that so much fuel were 

loaded, significant fuel would remain unused at the conclusion of the flight. Moreover, 

my Complaint used BA‟s own web site statements about fuel consumption (Complaint 

p.3 at heading “Sources”, subheading “Fuel consumption”). If BA seeks to argue that 

fuel consumption is greater than its web site indicates, and that this additional fuel 

consumption is needed to establish that BA‟s fuel surcharges are a reasonable estimate of 

fuel costs above a baseline, then BA should make this argument in specificity. BA 

should not conclusorily resort to the full fuel capacity of aircraft.

9. BA‟s reliance on systemwide load factor (p.8) is also inapt. My 

Complaint considered transatlantic load factors as reported in BA‟s 2012 Traffic 
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Statistics, cited at Complaint p.3 at heading “Sources”, subheading “Passenger load 

factor.” BA instead proposes using its systemwide load factor (Answer p.8). But I 

consider fuel surcharge revenue on two specific transatlantic routes. British Airways‟ 

lower load factors elsewhere in its route network (e.g. its short-haul domestic and Europe 

routes with 74.7% and 75.1% load factor) are irrelevant. For purposes of computing 

transatlantic fuel surcharge revenue, I used – and the DOT should use – the most precise 

data available, specifically the data BA has published about its transatlantic load factors.

10. BA states that some seats are designated for crew rest (p.10). But BA 

nowhere indicates how many seats are so designated. I therefore cannot make 

adjustments accordingly.

11. Below, I recompute my estimates using BA‟s figures for 777 fuel 

consumption per hour and 777 seating capacity, BA‟s stated salable cargo capacity (per 

BA‟s Corrected Answer, p.9), and BA‟s proposed additional fuel cost of $0.25 per gallon 

($0.066 per liter) (due to the costs of forward contracts). I also compute these estimates 

with both configurations of 747, as BA‟s Answer suggested (p.10). The results:

BOS-LHR (777 

service)

LHR-LAX (747 

service I)

LHR-LAX (747 

service II)

Fuel surcharge revenue

Passengers

First Class 14 * $414 =$5,796 14 * $452 = $6,328 14 * $452 = $6,328

Club 48 * $414 = $19,872 52 * $452 = $23,504 70 * $452 = $31,640

World Traveler Plus 40 * $229 = $9,160 36 * $229 = $8,244 30 * $229 = $6,870

World Traveler 122 * $229 = $27,938 243 * $229 = $55,647 185 * $229 = $42,365

Total passenger fuel 

surcharge

$62,766 $93,723 $87,203

Cargo

Capacity 11,122 kg 8,000 kg 8,000 kg

Fuel surcharge $1.16/kg $1.16/kg $1.16/kg 

Total cargo fuel 

surcharge 

$11,428 $9,280 $9,280

Full fuel surcharge 

revenue

$75,668 $103,003 $96,483

Load-adjustment 83.7% passenger load factor, 73.9% cargo load factor
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Load-adjusted fuel 

surcharge revenue 

$61,630 $85,304 $79,846

Fuel expense

Scheduled travel time 6:20 10:10 10:10

Fuel consumption per 

hour

8,290 liters/hour 12,788 liters/hour 12,788 liters/hour

Price of jet fuel $0.832/liter $0.832/liter $0.832/liter

Total fuel expense $43,683 $108,169 $108,169

12. These results qualitatively match the findings in my initial Complaint. 

Specifically, BA‟s BOS-LHR fuel surcharge revenue still significantly exceeds BOSLHR fuel expense. Furthermore, BA‟s LHR-LAX fuel surcharge revenue is 

approximately 75% of total fuel cost. Neither is a reasonable estimate of increased fuel 

cost above a baseline.

13. Consistent with the DOT‟s February 21, 2012 Notice, the question is not, 

as BA argues (Answer p.7), whether “BA‟s cost of fuel exceed recoverable fuel 

surcharges.” Rather, the Notice requires that “When a cost component is described as a 

fuel surcharge, for example, that amount must actually reflect a reasonable estimate of 

the per-passenger fuel costs incurred by the carrier above some baseline” (emphasis 

added) (p.2). For any reasonable baseline, consistent with fuel prices over the past 

decade, even BA‟s LHR-LAX flight fails the DOT‟s requirement in this regard. 

14. Comments of Mike Borsetti (DOT-OST-2013-0025-0060) propose an 

alternative estimation methodology that reaches a similar result. For fuel expense, Mr. 

Borsetti divides BA‟s total 2012 fuel expense by its total available seat kilometers, 

obtaining a fuel cost per seat kilometer. According to Mr. Borsetti‟s method, BOS-LHR 

fuel expense is $43,423 and LHR-LAX fuel expense is $93,794 to $108,224. The 

similarity of Mr. Borsetti‟s result to mine, despite our independent data sources, confirms 

the reliability of our estimates.
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III. Examining the Fuel Surcharge on Low Coach Fares Is an Appropriate 

Method to Consider the Basis of a Fuel Surcharge

15. BA says I “cherry picked” data (Answer p.10) in noting that a fuel 

surcharge exceeds 70% of a round-trip transatlantic ticket fare (Complaint p.2). But I 

used a simple and straightforward methodology: On BA‟s own web site, I quoted an 

ordinary paid restricted coach ticket – the same kind of ticket that ordinary consumer 

travelers buy, and indeed the kind of ticket that BA widely promotes in advertising in 

multiple media (online banner advertisements, print, etc.) and that BA‟s web site offers 

by default. I picked a standard, popular nonstop route on which BA now offers four 

flights per day, from the city where I live to BA‟s hub. I chose a standard advance 

purchase of approximately six weeks. This is an entirely reasonable method of obtaining 

a representative fare quote. Nor is the result unusual: The total price listed in my fare 

quote is broadly consistent with my personal leisure travels, consistent with restricted 

tickets I have assisted friends, relatives and colleagues in booking for themselves,

consistent with BA‟s advertising in multiple media, and consistent with offerings broadly 

available in the marketplace. There simply is nothing “cherry picked” about the example.

16. Quite the contrary, BA‟s counterexamples are by far the more unusual. 

On information and belief, far more travelers on BA‟s BOS-LHR service pay fares that 

approximately match the itinerary I quoted than the $4500 and $2600 fares that BA 

quotes (Answer pp.9-10). On information and belief, BA‟s advertising (online banner 

advertisements, print, etc.) promotes restricted coach fares similar to what I quoted, but 

rarely or never the $4500 or $2600 coach fares that BA quotes.

17. Indeed, the DOT has used the same methodology I chose. See the DOT‟s 

Notice of February 21, 2012 at p.2: “In one particular example, the total fare for a U.S.-
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Europe trip ... listed as $769.41 ... includes an amount of $476 described as „fuel 

surcharge.‟” Like me, the DOT there quoted a restricted coach transatlantic ticket for an 

arbitrary date, then compared the base fare to the stated fuel surcharge. 

IV. BA’s New “Carrier Charges” Surcharges Are Also Impermissible under 

DOT Rules

18. In its Answer, BA describes its shift to “Carrier Charges” rather than “fuel 

surcharge” (p.13). Indeed, current fare quotes on britishairways.com now present 

“European fuel surcharge/US carrier charge.” See Attachment 1. But this shift still falls 

short of DOT requirements.

19. The DOT‟s February 21, 2012 Notice provides that even a vague 

surcharge must be linked to specific service and associated costs. Referring to the

vaguely-named “Passenger service charge international” seen at another carrier, the DOT 

instructs that “the carrier should be prepared to detail the services and costs per 

passenger” (Notice at p.3). 

20. To support its new “Carrier Charges” surcharge, BA must identify what 

services are associated with the new “carrier charges,” and what those services cost BA 

to provide (on a per-passenger basis). BA has not done so, not in its Answer nor on its 

web site nor, as best I can tell, anywhere else. I contacted BA telephone reservations to 

request information about the “carrier charges” but was unable to obtain any information

about what services are included or why this charge is set at a particular amount.

21. The screenshot in Attachment 1 also reveals BA claiming, falsely, that the 

charges itemized in that screenshot are “Tax.” See the top-most heading of the 

screenshot, reading “Tax Breakdown.” In fact that screenshot itemizes a mix of actual 

government taxes and carrier-imposed surcharges, with fully 67% consisting of the latter. 
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It is an unfair and deceptive practice for the window‟s title, “Tax Breakdown,” to falsely 

indicate that the window presents only taxes.

V. BA’s OnBusiness Table Continues to Omit Information about CarrierImposed Surcharges, Contrary to DOT Requirements

22. My Complaint noted that BA‟s OnBusiness points table does not disclose 

carrier-imposed surcharges (p.4). In its Answer, BA seeks shelter in the fact that 

OnBusiness “is a business to business („B2B‟) initiative, intended to provide incentives 

and discounts to small and medium-sized enterprises [pursuant to] terms formally agreed 

to by the SME” (p.11). My Complaint suggested nothing contrary. But these facts are 

irrelevant to DOT rules on point. 

23. The DOT‟s revised full fare advertising rule, 14 CFR 399.84, prohibits 

any advertising or solicitation for passenger air transportation that does not state the 

entire price to be paid. By its plain language, this rule applies equally to all advertising 

and solicitations for air transportation, whether the advertising or solicitations are 

directed to consumers, businesses, or anyone else.

24. BA cites its contracts with OnBusiness members (“terms formally agreed 

to by the SME [small and medium sized enterprise]”) (Answer p.11), but DOT rules offer 

no protection to a carrier that seeks advance permission, through a contract or otherwise, 

to engage in conduct prohibited by 399.84. Rather, 399.84 applies equally no matter 

what a carrier might have placed in prior terms. A carrier cannot, through its terms or 

other contractual provisions, escape the requirements of 399.84. 

25. BA‟s Answer seems to seek shelter in the words “by consumers” in the 

May 17, 2012 Notice – as if to suggest that, by those words, DOT sought to offer lesser 

protection to participants in company-wide travel award programs such as BA 
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OnBusiness. BA reads too much into the word “consumer.” The best interpretation of 

the Notice‟s reference to “consumers” is to encompass anyone redeeming awards through 

a carrier award program, and businesses and business travelers are among the 

“consumers” protected by the DOT in this sentence. More generally, in numerous 

contexts, DOT uses the term “Consumer” to mean any person purchasing or receiving air 

travel. Consider e.g. the DOT‟s Aviation Consumer Protection Division (emphasis 

added), which equally protects business travelers. DOT regulations confirm the broad 

meaning of “consumer.” Consider 14 CFR 259.5, using “customer”, “consumer”, and 

“passenger” interchangeably (requiring a “customer service plan” which must “notify[] 

consumers of known delays, cancellations, and diversions” and must “identify[] the 

services [the carrier] provides to mitigate passenger inconvenience”), plainly providing 

benefits that apply to business passengers as well as consumers traveling for leisure. The 

reference to “consumers” in the DOT‟s May 17, 2012 Notice does not lessen BA‟s 

obligations to its OnBusiness customers. BA‟s references to its “small and medium-sized 

enterprise” “business” customers do not excuse BA‟s failure to comport its OnBusiness 

program to the requirements of the DOT‟s May 17, 2012 Notice.

26. While some sections of the DOT‟s May 17, 2012 Notice reference

“mileage,” the Notice plainly includes award programs denominated in units other than 

miles. The title of the Notice specifically covers all “award” travel. Sections of the 

Notice discuss “award travel,” “award programs,” “promotions,” and the like – terms 

which are used interchangeably with “mileage award” and other mileage-specific terms. 

Furthermore, the Notice interprets the full fare advertising rule, 14 CFR 399.84, which 

broadly covers all advertising practices, in no way limited to mileage-based award 
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programs. BA cannot seek shelter in the fact that OnBusiness earnings are measured in 

“points” rather than “miles.”

27. In short, there exists no proper reason for BA OnBusiness to escape the 

requirements of the DOT‟s May 17, 2012 Notice. That Notice plainly requires that when 

a flight award requires a surcharge, the surcharge must be presented “together with” the 

points required, and the surcharge must be given the “same prominence” as the points 

requirements (p.2). BA erred in mentioning the surcharge only in a footer at the bottom 

of the table (not “together with” points requirements) (as presented in Complaint p.14). 

In that footer, BA also erred in its vague reference to “[t]axes, fees, charges and security 

surcharges” – exactly omitting the required affirmative statement that these are “carrierimposed” charges to alert consumers that, unlike bona fide “taxes,” these amounts are set 

wholly by BA. The DOT‟s May 17, 2012 Notice requires disclosure that is both clearer 

and more prominent.

VI. Any “Tension” Between US and EU Rules Is Easily Addressed

28. BA seems to seek shelter in EU rules which, it claims, require certain 

presentation of surcharges. Specifically, BA argues: that “The [EU] rules require that, in 

addition to specifying the final price payable by the consumer, a breakdown of the 

following items must be included; namely, (i) „taxes,‟ (ii) „airport charges,‟ and (iii) 

„other charges, surcharges or fees, such as those related to security or fuel‟” (p.13). BA 

describes “tension” between this EU requirement and DOT requirements. But BA never 

identifies the exact inconsistency between EU and DOT rules. If BA believes it is 

impossible to simultaneously satisfy specific EU and DOT rules, BA should be explicit in 

specifying the precise requirements claimed to be irreconcilable.
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29. In fact the EU rules are easily reconciled with the DOT‟s requirements. 

For one, if BA ceased to impose carrier-imposed surcharges, BA would have nothing to 

disclose as such – hence no need to comply with either EU or DOT rules about carrierimposed surcharges. Furthermore, if BA‟s fuel surcharges were a reasonable estimate of 

per-passenger fuel costs above a baseline, BA would comply with DOT rules on point 

and could also easily present such surcharges in the manner required by EU rules. Thus, 

there is no genuine difficulty in complying with both sets of rules. Rather, BA‟s 

difficulty comes from attempting to impose a “fuel surcharge” that is not an estimate of 

increased fuel cost, and from attempting to impose a “carrier charge” not associated with 

any specific service – practices which DOT simply does not allow, and which the EU 

rules neither require nor encourage. There is no genuine “tension” between these

requirements.

VII. BA Is Liable for False Statements of “Tax” on Around-The-World Tickets 

that Are Ticketed by BA, No Matter What Agent Quotes the Fare

30. Under settled DOT authority, BA is equally liable for misstatements on 

the OneWorld Around the World booking tool. BA argues that that tool “is a specialized 

site owned and managed by oneworld Management Company” (Answer p.12), suggesting 

that BA is not liable for false statements made by that tool. But the DOT has long held 

that airlines are responsible for the actions and omissions of their agents, including travel 

agents acting on their behalf. The DOT most recently restated this principle in its Final 

Rule for Enhancing Airline Passenger Protections, which at 23143 reaffirms that “airlines 

have always been legally responsible along with their agents for their agents‟ advertising 

violations and they will continue to be under the revised rule.” BA is jointly and 
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severally liable for the wrongful actions made by its agent oMC in the course of 

advertising pricing for BA electronic tickets. 

31. BA argues that “the subject matter of the Complaint in this regard 

[mischaracterizing carrier-imposed surcharge as tax] has been resolved” (Answer p.13). 

But affected passengers have not received refunds. On information and belief, if an 

affected passenger requested a refund from BA, BA would deny such a request. BA 

retains its ill-gotten gains from the misstatements at issue. This matter is not “resolved.”

Pursuant to Title 18 United States Code Section 1001, I certify that I 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 

documents which contain such statements in connection 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

Respectfully submitted,

Benjamin Edelman
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Attachment 1
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Certificate of Service

I hereby certify that I have, this 19th day of April, 2013 caused a copy of the foregoing 

Reply to be served by electronic mail on the following persons:

Don Hainbach dhainbach@ggh-airlaw.com

Vanessa Krasniewicz vkrasniewicz@ggh-airlaw.com

Samuel Podberesky sam.podberesky@dot.gov

_____________________

Benjamin Edelman