An Introduction to Enhancing Airline Passenger Protections #2

1. An Introduction to Enhancing Airline Passenger Protections #2 Choice-of-Forum Provisions Post-Purchase Price Increases Baggage, Other Fees and Related Code-Share Issues Full-Fare Advertising

2. Choice-of-Forum Provisions • § 253.10: Contract of carriage choice-of-forum provisions. • No carrier may impose any contract of carriage provision containing a choice-of-forum clause that attempts to preclude a passenger or a purchaser from bringing a claim against a carrier in any court of competent jurisdiction, including a court within the jurisdiction of that passenger’s residence in the United States(provided that the carrier does business within that jurisdiction).

3. Practical Effect of §253.10 • Applies only to U.S. carriers with respect to domestic flights • Forum for consumer claims related to travel on international flights to or from the United States is governed by the Montreal Convention or Warsaw Convention (i.e. 253.10 doesn’t apply to international flights of a US carrier just because that airline also operates domestic flights)

4. Post-Purchase Price Increases (399.88: Post-purchase price increases, generally prohibited and 399.89 Disclosure of potential price increase before payment) • § 399.88: Prohibition on post-purchase price increase, generally • §399.89: Disclosure of potential price increase before final payment; requirement for written consent • Effective date for both provisions: • January 24, 2012

5. Post-Purchase Price Increases • §399.88 generally prohibits price increases AFTER a consumer has purchased the air transportation or tour that includes an air component • Purchase= full amount agreed upon has been paid by the consumer • What kind of price increases does this section prohibit?

6. Post-Purchase Price Increase(continued) • §399.88 (continued) • Allows for a post-purchase price increase in one, extremely limited circumstance: • A seller of air transportation or a tour that includes air transportation can increase the price post-purchase if the increase is due to an increase in a government-imposed tax or fee (e.g. foreign departure tax) • The seller MUST notify the consumer of the potential for such an increase and obtain the consumer’s written consent to the potential for such increase at the time of the purchase

7. Post-Purchase Price Increase(continued) • § 399.88 applies to any seller of scheduled air transportation within, to or from the United States • US and Foreign air carriers • Travel agents, including Online Travel Agencies • Tour operators

8. Post-Purchase Price Increase(continued) • §399.89: Disclosure beforeinitialpayment of a Potential Price Increase before final payment • §399.89 allows for a seller of scheduled air transportation to increase the price for that air transportation before a consumer has paid the full amount agreed upon IF: • The seller obtains the consumer’s written consent to the potential for such an increase prior to accepting any payment • Includes price of seat, baggage, fuel surcharges • Deals with situations where a seller accepts partial payment

9. Post-Purchase Price Increase(continued) • Who does section 399.89 apply to? • US and Foreign Carriers • Travel agents, including Online Travel Agencies • Tour Operators

10. Post-Purchase Price Increase(continued) Q: How can sellers comply with this requirement? A: • Internet purchases: “check a box” • Brochures: form included in brochure

11. Post-Purchase Price Increase (continued) Q: How can sellers comply with the written consent requirement when a purchase is made over the phone? A: • Don’t need the written consent if you don’t pass along such price increases. • Hold the reservation • Written consent can be email, facsimile, or regular mail

12. Post-purchase Price Increase (continued) Q: What should a seller do if a government-imposed tax or fee increases after purchase and the increase is implemented just before the passenger travels, making written consent impossible? A: Two options: • Require the written consent on all sales of air transportation to cover the possibility of a potential increase. • Seller can absorb any such increase for those passengers.

13. Notice of Baggage Fees and Other Fees: New Section 399.85(a) • Applies to US and Foreign carrier websites marketed to US consumers • Requires carriers to put a notice on their homepage when baggage fees or allowances for carry-on or first or second checked bags change • The notice must be on the homepage and can link directly to the information, must be up for at least three months after the change becomes effective • The link must be descriptive • Only applies to carriers

14. 399.85(a) – Continued Overview of requirements in 399.85(a): • Examples of descriptive language: “Changes in Baggage Fees” or “Current Updates regarding Changed Baggage Policies” • Link must be “prominent” • Websites marketed to consumers in the US

15. Notice of Baggage Fees and Other Fees: 399.85(b) --*effective date: January 24, 2012 • Codifies existing guidance that requires carriers and ticket agents to inform passengers that “baggage fees may apply” when the carrier offers a fare quotation in response to a passenger inquiry for a specific flight itinerary, and where to find the fees • Ticket agents may refer consumers to the airline websites for specific baggage information or they may link to a listing of baggage fees on their own website.

16. Notice of Baggage Fees and Other Fees: (New Section 399.85(c)*effective date: January 24, 2012 • Carriers and ticket agents must include information regarding a passenger’s free baggage allowance/and or the applicable fee for a carry-on bag and first and second checked bag in the e-ticket confirmation (including summary page at the completion of a purchase and a post-purchase email.)

17. Notice of Baggage Fees and Other Fees: (New Section 399.85(c) • Applies to both carriers and ticket agents: • Carriers: Information must be provided in the text of the confirmation; the information must be specific (i.e. NOT a range of charges), taking into account frequent-flyer status, advance purchase of checked bag fee, etc. • Agents: Can provide the information in text form on the confirmation page or through a hyperlink to the specific location on the airline website (or their own website)

18. Notice of Baggage Fees and Other Fees: New Section 399.85(c) Q: In the context of § 399.85(c), what does “specific” mean? A: “Specific” means that you have to list the actual charges for each potential classification of passengers (taking into account frequent flyer status, affinity credit card holders, people who check their bags in online, people on international itineraries). You need to provide enough information so that the passenger can determine what fee applies to them.

19. Notice of Baggage Fees and Other Fees: New Section 399.85(c) Compliance Options for Carriers under 399.85(c): • Provide individualized baggage fee information applicable to that passenger (not required by the rule); or • Provide a list or table in text form that shows baggage allowances and fees for all potential classifications of passengers regarding first and second checked baggage and carry-on baggage.

20. Notice of Baggage Fees and Other Fees: New Section 399.85(d) • Carriers must disclose on their website information on fees for all optional services that are available for passenger purchase. • Optional services = any service the carrier provides for a fee beyond passenger air transportation (e.g. baggage, advance seat selection, etc.) • Fees may be expressed in ranges (except for baggage fees, which must be expressed as specific charges)

21. Notice of Baggage Fees and Other Fees: New Section 399.85(e) • A carrier marketing a flight under its identity that is operated by a different carrier (i.e. a code-share flight) must disclose any differences between its optional services and related fees and those charged by the operating carrier of the flight. • Must be made through conspicuous notice of the existence of such differences on the marketing carrier’s web site; can link to the fee listing on the operating carrier’s web site.

22. §399.87: Baggage Allowance and Fees*effective date: January 24, 2012 • For passengers whose ultimate ticketed origin or destination is a U.S. point, the baggage fees that apply at the beginning of the passenger’s itinerary must apply throughout the itinerary • Where the passenger’s first flight is a code-share, the baggage allowances and fees of the marketing carrier apply throughout the itinerary to the extent that the baggage fees may differ from those of any operating carrier • Purpose of rule: to provide clarity of baggage fees to interline and code-share itineraries and to prevent surprise at downline airports.

23. Frequently Asked Questions Regarding §399.87 • This rule applies to code-share and interline itineraries on a single ticket. This rule is not intended to apply to segments booked by a passenger on a separate ticket.

24. Frequently asked questions: § 399.87 (continued) • Analysis when a passenger checks in • Look at the passenger’s first flight. • Is it a codeshare? If so, then the marketing carrier’s fees apply throughout the itinerary. • If the itinerary is not a codeshare itinerary, then the allowances and fees that the first carrier applies will apply throughout the itinerary. • First carrier can apply MSC/302 if appropriate, in which case that applies to all flights

25. EXAMPLES: § 399.87 • EXAMPLE #1 • Itinerary • Flight 1: BOS-LHR (Carrier A is the marketing carrier and operates the flight) Connecting to • Flight 2: LHR-DUB (Carrier A is the marketing carrier, and Carrier B operates the flight) Returning • Flight 3: DUB-LHR (Carrier A is the marketing carrier, and Carrier B operates the flight) Connecting to • Flight 4: LHR-BOS (Carrier A is the marketing carrier and operates the flight). • Outcome: Carrier A's baggage rules apply throughout. 

26. Example #2 • Itinerary • Flight 1: BOS-LHR (No codeshare - Carrier A operates) Connecting to • Flight 2: LHR-DUB (No codeshare - Carrier B operates) Returning • Flight 3: DUB-LHR (No codeshare - Carrier B operates) Connecting to • Flight 4LHR-BOS (No codeshare - Carrier A operates) • Outcome: Whatever fee the first carrier (i.e. Carrier A) applies and charges to the passenger will apply throughout the itinerary.

27. Example #3 • A passenger purchases a ticket from Carrier A for travel on Carrier A from El Paso to Washington- Dulles and return. Carrier A has a baggage policy that allows for two free checked bags.  • This consumer also buys a separate ticket from Carrier B for travel on Carrier B from Washington- Dulles to Paris and return to Washington-Dulles.  • The flights on both carriers are coordinated so that this passenger can claim his bag from Carrier A at Dulles, check it with Carrier B, and proceed to Paris on Carrier B, then do the same in reverse on his return.  • In this case, because of the separate tickets, Carrier B is not required to follow Carrier A’s allowance of two free bags; Carrier B can apply its own allowance, and its fee if any.

28. Frequently asked questions: § 399.87 • Practical effect of 399.87: • To ensure that a passenger is not surprised partway through their itinerary by a lower baggage allowance or higher fees. • An “itinerary” refers to the round trip journey on the same ticket. Covers all code-share and interline flight on an itinerary.

29. Full-Fare Advertising (399.84) • § 399.84 (a) (effective January 24, 2012) • The Enforcement Office will enforce the full-fare rule as written, meaning the full price to be paid for the air transportation, inclusive of taxes and fees, must be presented to the consumer at the first point the consumer is presented with a fare • The Department will also allow carriers and other sellers of air transportation to break out the base fare or taxes and fees or charges and present that information along with the full fare.

30. Full-Fare Advertising (399.84) • How can the charges be stated separately? • They may be stated through a link or a “pop-up” • Additionally, they may be displayed on a website that displays the total price, but they may not be misleading, may not be displayed prominently, may not be presented in the same or larger size than the total price, and must provide cost information on a per passenger basis • The charges must accurately reflect the actual cost to the carrier

31. Full-Fare Advertising: § 399.84(a) Current Advertisement (which would not be allowed under the new rule): $829 + $129 taxes and fees= $958 USD per person How can the carrier/agent fix this and be compliant with 399.84(a)? Example #1: $958 • [This is the full-fare, a carrier will comply with the rule if the fare displayed is the full fare to be paid]

32. Example if the carrier/agent wishes to separate taxes and fees Example #2: • $958 = $829 USD  per person + $129 government taxes & government fees. Or: • $829 USD per person + $129 government taxes & government fees= $958 • These are examples if the carrier/agent wishes to separately state the base fare or the government taxes and fees (in addition to stating the full fare). • In each example, the full fare is prominent and larger font • The totality of the advertisement has to be taken into account to determine if the display misleads the consumer in any way. • Fuel surcharges can never be broken out of the full fare.

33. Frequently Asked Questions related to section 399.84(a) • How can a carrier display award ticket amounts when the consumer must “pay” in miles and separately pay for taxes and fees? • Advertising the award amount with a dollar amount (or other currency) for taxes/fees and any other mandatory charge the consumer must pay in order to fly on the award ticket. • Example: • Fly to St. Louis for 75,000 miles (+$10 in taxes and fees) • The dollar amount is in the same font, same size, and same color as the mileage amount.

34. FAQs for 399.84(a) (continued) • How can a tour or tour package that includes airfare be advertised when the taxes and fees will vary based on the passenger’s selected origin city? • Examples: print advertisements or banner advertisements that highlight a destination, but allow the passenger to choose their gateway city. The advertisement must specify the full fare for a specific origin city that is available to the consumer for purchase, and give conspicuous notice that the price is for departure from that city.

35. Example: • Banner advertisement: • Experience the Joys of Lima, Peru from $999* • *”package price is $999 based on departure from Los Angeles, price will vary for other departure cities” • Alternatively, a range that represents the full fare to be paid by a consumer from multiple destination points is allowed: • Experience the Joys of Lima, Peru, $999-$2100* • *package price includes taxes and fees, prices vary based upon departure city • In both cases, disclaimer is immediately below the price and is prominent

36. FAQs: 399.84(a) (continued) • Would a charge to print a boarding pass at a kiosk or to check in with a ticket counter agent have to be included in the “full fare?” • If the consumer has to pay an additional fee to print their boarding pass, no matter where they obtain their boarding pass (e.g. through internet check-in, at a kiosk at the airport, with a ticket counter agent at the airport), then that fee must be included in the advertised fare, as a passenger must have a boarding pass in order to fly, thus making such a charge a “mandatory” charge.

37. Full-Fare Advertising • § 399.84 (b) • Any advertising for an airfare that is one leg of a fare that requires roundtrip purchase must be labeled as “each way” and the roundtrip purchase requirement must be clear and conspicuous • Codifies existing Enforcement Office policy • “One-way” advertising is allowed as long as the fare is truly available for one-way purchase

38. Full Fare Advertising • § 399.84(c) • “opt-out” features for ancillary services are prohibited • Example: a carrier or ticket agent can no longer “pre-check” travel insurance and include its cost in the total to be paid • The consumer must affirmatively agree to the service and the fee for the service by “opting-in” (e.g. checking the box).