Airlines’ Challenge of Ad Rule Hits End of Runway at US Supreme Court

On April 1, 2013, the U.S. Supreme Court declined to hear a challenge by three U.S. airlines to DOT’s rule requiring that all fees and taxes be included in advertised airfares.  The “rule” is actually DOT’s most recent interpretation of 14 CFR Section 399.84, the “full fare advertising rule,” which governs the advertising of fares by both carriers and ticket agents.

Prior to January 26, 2012, for enforcement purposes, DOT interpreted Section 399.84 as allowing for taxes and government-imposed fees collected by carriers and ticket agents (such as passenger facility charges and departure taxes) to be stated separately from base fares in advertisements.   Ticket agent and carrier-imposed fees, however, (i.e. surcharges for fuel or insurance) were required to be included in the advertised fare.   (See a DOT Order dated December 28, 2012, discussing the restrictions under DOT’s prior interpretation of the rule).

On April 25, 2011, DOT issued a Final Rule (as part of its enhanced passenger protections), that changed this enforcement policy.  That rule provided that as of January 26, 2012, DOT would enforce Section 399.84 as written, so that any advertisements specifying airfares and tour packages with an air component, must include  all taxes and government fees in the advertised price, as well as all mandatory airline and ticket-agent imposed charges.  While fees can be explained in the advertisement, they cannot be displayed as prominently as the total price, or presented in the same or larger text size.

Southwest Airlines , Spirit Airlines, and Allegiant Air challenged this rule by filing suit in the U.S. District Court for the District of Columbia, but both it and the federal court of appeals rejected the carriers’  argument that the rule violated their First Amendment right to free speech.  The carriers argued that the requirement that the fares not be prominently displayed violated their right to draw the public’s attention to increasingly exorbitant government taxes on air travel.

Since the rule will stand, carriers and ticket agents should be careful to ensure that their advertisements comply with the full fare advertising rule.  DOT has been vigilant in reviewing such advertisements to ensure that they comply with the new requirements.

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Aviation Law Advisor
Cozen O’Connor’s aviation attorneys are committed to keeping their clients apprised of recent developments in the aviation industry. The world of aviation is complex and fast-moving with many participants, including aircraft manufacturers, air carriers, airports, airport operators, FBOs, repair stations and maintenance providers, insurers, airline investors, corporate and private aircraft owners and operators, and aircraft leasing and management companies. Our clients are in every sector of the industry. This blog is just one tool that we use to keep them updated on the litigation, regulatory, legislative and international developments that affect their operations every day.
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