DOT Fines AA $60,000 Over Phone and Web Pricing

The Fine
The U.S. Department of Transportation (DOT) today fined (the new) American Airlines $60,000 for violating the Department’s full-fare advertising rule after the airline’s agents told consumers that surcharges levied by the airlines were government-imposed taxes. DOT ordered the carrier to cease and desist from further violations.

“We expect airlines to be truthful to their customers when they provide information about their fares,” said U.S. Transportation Secretary Anthony Foxx. “We will continue to take enforcement action when airlines fail to disclose their fares fully and accurately.”

The Rule
The first price quoted for air transportation made by an airline or ticket agent must state the entire price to be paid by the consumer, including all mandatory taxes, fees and airline surcharges. Airlines do not have to break out the components of the fare, but if they do, they must accurately show the costs of the services or taxes.

Training Is Important
Following a complaint from a consumer, the Department’s Aviation Enforcement Office investigated how American described to potential passengers the taxes and carrier surcharges that it collected. It found that on a number of occasions in 2012 and 2013, American’s telephone reservation agents mistakenly told consumers that a variety of additional taxes and carrier-imposed surcharges were collectively “taxes.” A significant portion of these charges were not taxes but fees imposed by the airline, such as fuel surcharges. In addition, pop-ups on the airline’s website claimed that these surcharges were taxes and, on at least one occasion, American issued a reservation statement labeling surcharges as taxes.

American Airlines indicates it has corrected its website and provided additional training to its agents.

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