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OST Docket Filings for April 1, 2009

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Updated: 4/2/09 | 10:10 AM

Applications and Renewals:

Aerolineas Ejecutivas - Mexican Taxi Renewal

Answers and Replies:

None

Notices of Action Taken:

None

Notices and Orders:

Baggage Liability and Responsibilities of Codeshare Partners for Int'l Itineraries - Guidance Notice

Condor - Consent Order (Advertising Requirements)

Report on Significant Rulemakings - April 2009

Ultimate Fares and Roni Herskovitz - Enforcement Proceeding and Proposed Assessment of Civil Penalties




Aerolineas Ejecutivas, S.A. de C.V.

OST-1996-1622 - Mexico-US Charter Air Transportation

April 1, 2009

Application for Renewal of Exemption

Aerolineas Ejecutivas, S.A. de C.V. hereby applies for renewal of its exemption from 49 U.S,C. §41301, which authorizes Aerolineas Ejecutivas to engage in charter foreign air transportation of passengers between Mexico and the United States, and other passenger charter operations in accordance with 14 C.F.R. Part 212, using small aircraft. Aerolineas Ejecutivas also requests renewal of its stopover privileges and continued relief from the Department's requirement to provide advance notice of each flight, or series of flights, between Mexico and the United States.

Aerolineas Ejecutivas has held Part 129 Operations Specifications from the FAA International Field Office in Dallas/Ft. Worth since October 16, 1996 (FAA Certificate Number ER2F804F). The company's largest aircraft, a Falcon 200, is configured for eleven passenger seats.

Counsel: Roller & Bauer, Lee Bauer, 202-331-3300

Index


Airline Baggage Liability and Responsibilities of Codeshare Partners Involving International Itineraries

OST-2009-0084

As Published in Federal Register April 1, 2009

Notice of Guidance

This notice is intended to give guidance to U.S. and foreign air carriers on two tariff matters: First, tariffs relating to liability for lost, stolen, delayed or damaged baggage carried on international itineraries; and second, tariffs that appear to assign responsibility, in code-share service, to the operating carrier rather than the selling carrier (i.e., the carrier shown on the ticket).

We have become aware of tariff provisions filed by several carriers that attempt, with respect to checked baggage, to exclude certain items, generally high-cost or fragile items such as electronics, cameras, jewelry or antiques, from liability for damage, delay, loss or theft. A typical provision found in carrier tariffs and disclosed on carrier Web sites states that the carrier does not assume liability for loss, damage, or delay of "certain specific items, including: * * * antiques, documents, electronic equipment, film, jewelry, keys, manuscripts, medication, money, paintings, photographs * * *."

Such exclusions, while not prohibited in domestic contracts of carriage, are in contravention of Article 17 of the Montreal Convention as revised on May 28, 1999. Article 17 provides that carriers are liable for damaged or lost baggage if the "destruction, loss or damage” occurred while the checked baggage was within the custody of the carrier, except to the extent that the damage ‘‘resulted from the inherent defect, quality or vice of the baggage." Article 19 provides that a carrier is liable for damage caused by delay in the carriage of baggage, except to the extent that it proves that it took all reasonable measures to prevent the damage or that it was impossible to take such measures. Although carriers may wish to have tariff terms that prohibit passengers from including certain items in checked baggage, once a carrier accepts checked baggage, whatever is contained in the checked baggage is protected, subject to the terms of the Convention, up to the limit of 1000 SDRs. Carriers should review their filed tariffs on this matter and modify their tariffs and their baggage claim policies, if necessary, to conform to the terms of the Convention. In addition, carriers should ensure that their websites do not contain improper information regarding baggage liability exclusions applicable to international service.

A second issue of concern stems from airline tariffs related to code-share service. As a condition for approval of international code-share services, the Department has as a matter of policy required that "the carrier selling such transportation (i.e., the carrier shown on the ticket) accept responsibility for the entirety of the code-share journey for all obligations established in the contract of carriage with the passenger; and that the passenger liability of the operating carrier be unaffected." (Order 2008-5-19, OST-2008-0064). Notwithstanding this clear language, several carriers have filed tariff provisions that purport to apply the terms and conditions of the operating carrier’s contract of carriage generally, or in certain areas such as check-in time limits, unaccompanied minors, carriage of animals, refusal to transport, oxygen service, irregular operations, denied boarding compensation, and baggage acceptance, allowance and liability. Others state that passengers on code-share flights “may be subject” to the operating carrier’s baggage charges. A number of carriers have no clear tariff rule on the subject. The intent of this DOT code-share approval provision may not be circumvented by tariff provisions attempting to allocate responsibility and contract of carriage provisions in different ways by the carriers involved, or by silence on the subject. As with the exclusionary provisions cited above, carriers should review their tariffs and practices and make revisions, if necessary, to reflect the conditions imposed in the Department’s orders approving code-share service.

As a matter of policy, the Aviation Enforcement Office will consider the subject tariff provisions noted above involving exclusionary baggage provisions to be of no effect and in violation of the Convention and those involving code share relationships to be in violation of pertinent Department approvals of those code-share services. The tariffs and their application, and similar practices, in the view of the Aviation Enforcement Office, also constitute unfair or deceptive business practices and unfair methods of competition in violation of 49 U.S.C. 41712. Carriers should, therefore, review their tariffs and practices with respect to these two areas and, if necessary, immediately modify their practices to conform to the Convention and Department code-share conditions and, within 90 days of this notice, revise their respective tariffs and modify appropriately the statements of their baggage and code-share policies on their web sites. After that date, the Aviation Enforcement Office will pursue enforcement action in appropriate cases. This disclosure guidance, it should be noted, also extends to ticket agents.

By: Samuel Podberesky

Index


Condor Flugdienst GmbH

Order 2009-4-1
OST-2009-0001 - 2009 Consent Orders

Issued and Served April 1, 2009

Consent Order

This consent order concerns advertisements by Condor Flugdienst GmbH that violate the Department’s advertising requirements specified in Part 399 of the Department’s regulations and constitute unfair and deceptive trade practices and unfair methods of competition in violation of 49 U.S.C. § 41712. This order directs Condor Flugdienst GmbH to cease and desist from future violations and assesses the company compromise civil penalties of $22,000.

During a time period ending in mid-2008, Condor promoted flights to and from the United States through print advertisements, advertisements that were published on its web site, and direct e-mail advertising campaigns. The listed prices for the flights and air tour packages failed to include airline fuel surcharges and a service charge imposed by Condor itself.

In mitigation and explanation, Condor states that compliance with the Department's full fare advertising rule is one of its highest priorities. When Condor learned that the Enforcement Office was concerned about its advertising, the company took immediate action to address those concerns. In this regard, Condor recounts that it rapidly modified its web site to include all the airline-imposed fuel and service surcharges in its airfare pricing. According to the carrier, this modification involved a significant amount of manual reprogramming. The company states that any noncompliance on Condor's part was completely inadvertent, and that it did not receive any consumer complaints regarding the advertisements at issue here.

The Enforcement Office has carefully considered all of the information available to it, including that provided by Condor Flugdienst GmbH, but continues to believe that enforcement action is warranted. In this connection and in order to avoid litigation, the Enforcement Office and Condor Flugdienst GmbH have reached a settlement in this matter. While neither admitting nor denying the above allegations, Condor Flugdienst GmbH accepts the findings and conclusions stated herein in order to avoid potential litigation. Under this order, Condor Flugdienst GmbH is assessed $22,000 in compromise of potential penalties otherwise assessable under the provisions of 49 U.S.C. § 46301. Of the total penalty amount, $11,000 shall be due and payable within 15 days of the date of issuance of this order. The remaining $11,000 shall be due and payable if Condor Flugdienst GmbH violates this order’s cease and desist provision within one year of the date of issuance of this order, or fails to comply with the order’s payment provisions, in which case the entire unpaid portion of the $22,000 penalty shall become due and payable immediately, and the company may be subject to further enforcement action. The Enforcement Office believes that the assessment of a civil penalty of $22,000 is appropriate in light of the nature and extent of the violations in question and will provide an effective deterrent to similar unlawful conduct in the future by Condor Flugdienst GmbH and other sellers of air transportation.

By: Rosalind Knapp

http://www.condor.com/

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Report on DOT Significant Rulemakings

OST-2007-0114

April 1, 2009

Report on DOT Significant Rulemakings - April 2009


Index


Ultimate Fares, Inc. and Roni Herskovitz

OST-2009-0002

Issued and Served April 1, 2009

Notice of Enforcement Proceeding and Proposed Assessment of Civil Penalties

The attached complaint of the Office of the Assistant General Counsel for Aviation Enforcement and Proceedings alleges that Ultimate Fares, Inc. and Roni Herskovitz, the President and Chief Executive Officer of Ultimate Fares, violated the requirements of 14 CFR 399.80 and 14 CFR 399.84, the Department's rules relating to fare advertising by air carriers and their agents, and 49 U.S.C. § 41712, a statutory provision that prohibits unfair and deceptive trade practices and unfair methods of competition. Section 399.80 prohibits advertising practices by ticket agents that misrepresent the price of the air service they offer for sale, while section 399.84 requires that all fare advertisements, by air carriers or travel agents, state the full fare to be paid by consumers. Ultimate Fares, an Internet seller of air transportation with a website at www.ultimatefares.com, and Roni Herskovitz violated these provisions on the company's website.

In violation of sections 399.80 and 399.84, Ultimate Fares excludes the ad valorem federal excise tax from the domestic fare quotes on its website. Any ad valorem tax, as a matter of explicit and long-standing Department policy, must be included in all fare solicitations. Second, those additional taxes and fees that may be stated separately from the base fare, in accordance with our policy outlined above, are not stated on the first screen in which a fare quote is offered to the consumer. The current site merely states a fare and then states "+ taxes and fees." The applicable taxes and fees must either be stated in text on the same screen adjacent to the base fare or must be accessible via a hyperlink from the "taxes and fees" language. As currently published, Ultimate Fares' website does not disclose the amount of these taxes and fees until the consumer reaches the booking stage, and, even at that point, the website fails to break out the various additional charges. Internet fare displays such as these are deceptive and misleading to consumers and clearly violate the rules noted above.

Based on the informal investigation undertaken by the Enforcement Office of Ultimate Fares' Internet display practices, as well as Ultimate Fares' failure to comply with the Department's investigative efforts, there are reasonable grounds to believe that Ultimate Fares, under the direction and control of Roni Herskovitz, has violated provisions of 14 CFR Part 399 and 49 U.S.C. § 41712 and that an investigation of the alleged violations is in the public interest. Accordingly, pursuant to Rule 407 of the Department's Rules of Practice, 14 CFR 302.407, I hereby institute a formal enforcement proceeding to investigate the allegations set forth in the attached complaint.

By: Samuel Podberesky

http://www.ultimatefares.com/

Index



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