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OST-97-2061

Donald L. Pevsner, Esq./Internet Fare Discrimination by Air Carriers and Foreign Air Carriers

Donald L. Pevsner, Esq./Internet Fare Discrimination by Air Carriers and Foreign Air Carriers

By this order, we affirm that 49 U.S.C. §41712 prohibits sellers of air transportation from deceiving consumers about the price of air transportation, and we put airlines and travel agents on notice of their compliance responsibilities. In particular, as we explain below, an airline is violating the statute and risking enforcement action whenever the following three conditions occur: (1) a telephone caller requests the lowest fare from its reservation agent, (2) the caller could, via the airline's Internet site, get a fare from the airline that is lower than any fare that the reservation agent can sell, and (3) the caller is not alerted to the possibility of a lower Internet fare. An airline will avoid the risk of deceiving consumers in this manner if it informs all telephone callers that in some instances its lowest fares are only available via the Internet. Because the statute clearly prohibits much of the conduct that Donald L. Pevsner seeks in his petition for rulemaking in Docket OST-97-2061 to have us prohibit by rule, we dismiss his petition.

An airlines reservation agents function as the airline itself in its capacity as a seller of air transportation. Under §41712, it is deceptive and hence illegal for an airline's reservation agent to quote or sell a fare to a consumer who requests the lowest fare in a city-pair market if, in fact, that fare is not the lowest fare for the service at issue that the airline offers directly to consumers. This conduct is deceptive and hence a violation of §41712 even if the particular agent involved happens not to know of the lower fare. Thus, when a telephone caller asks an airline's reservation agent for the lowest fare, the agent who merely quotes the lowest fare that he or she can sell-and does not tell the caller that a lower fare may be available via the Internet-is taking the risk of violating §41712. This agent-or, more precisely, the airline-is violating §41712, and the airline is thus subject to enforcement action under the statute, whenever a lower Internet fare does exist. Airlines can avoid violating §41712 if they alert telephone callers to the possibility of lower fares via other channels.

By:  Francisco Sanchez

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