Order 98-7-22 - Asiana Airlines

Order 98-7-22

Asiana Airlines

Order 98-7-22 | Issued and Served July 29, 1998

Consent Order

This order concerns unauthorized cargo service by Asiana Airlines, a foreign air carrier of Korea, between Seattle and Guam via Seoul in violation of 49 U.S.C. § 41703, which prohibits foreign carriers from engaging in air commerce between two U.S. destinations, a form of service- referred to as cabotage. In addition, holding out to the public, expressly or by course of conduct, that a foreign air carrier provides any such service, without appropriate exemption authority, violates the carrier's permit authority issued under 49 U.S.C. § 41302 and constitutes an unfair method of competition and an unfair and deceptive trade practice. After considering all the facts in this matter, the Enforcement Office believes that an appropriate remedy in this instance includes a requirement that Asiana modify its Internet site to remove displays that show service between two U.S. points, or cabotage service. This order also provides for a civil penalty of $19,000.

The Department's insistence that Asiana has "held out" unauthorized services over the Internet raises novel issues that, according to Asiana, should be resolved through a rulemaking or policy statement addressed to the entire industry, not by an enforcement action against a small foreign carrier operating in the midst of an economic crisis. In any event, Asiana states that it has not solicited or advertised cargo services between Seattle and Guam on the Internet or otherwise. Penalizing Asiana for "holding out" on its interactive Internet home page, the carrier maintains, would establish a new industry rule that is at best inconsistent with previous Department guidance, and, in any event, would be an ex postfacto penalty —there was no prior notice that what Asiana did was illegal, the carrier states. It is inherently unfair, Asiana asserts, to penalize it for violations of federal law without adequate public notice as to the prohibited conduct.

By: Rosalind Knapp