Air Canada Fined for Advertising Violations

The U.S. Department of Transportation (DOT) has fined Air Canada $50,000 for violating rules prohibiting deceptive price advertising in air travel. United was fined $20,000 for providing inaccurate information about baggage.

“When passengers buy an airline ticket, they have a right to know how much they will have to pay,” said U.S. Transportation Secretary Ray LaHood.  “We take our airline price advertising rules seriously and will take enforcement action when they are violated.”

The DOT said that Air Canada, for a period of time in early 2011, displayed advertisements on its websites that did not disclose the amount of taxes and fees that passengers would have to pay in addition to the advertised fare or lead the consumer directly to the information on these taxes and fees.

Consumers clicking on the ads were taken to a page on Air Canada’s website where a list of routes and prices were displayed, but consumers could not find details of the additional taxes and fees unless they scrolled to the bottom of the page where the information was shown in fine print.

Air Canada’s advertisements violated DOT rules requiring any advertising that includes a price for air transportation to state the full price to be paid by the consumer, including all carrier-imposed surcharges.  

The only exception currently allowed is government-imposed taxes and fees that are assessed on a per-passenger basis, such as passenger facility charges, which may be stated separately from the advertised fare but must be clearly disclosed in the advertisement so that passengers can easily determine the full price they must pay.  These rules apply to both U.S. and foreign carriers.

United fine

United Airlines was fined $20,000 for providing inaccurate information to passengers about how much compensation they could potentially receive for lost, damaged or delayed baggage on international flights.

“Both domestic and international travelers have a right to know how much they might be compensated for lost or delayed baggage,”  LaHood said.  “We are committed to protecting airline consumers, and we will continue to take enforcement action when necessary.”

Under the Montreal Convention, an international agreement that sets liability limits for international air transportation, airlines are liable for damages caused by lost, damaged or delayed baggage up to a 1,131 Special Drawing Rights (SDRs) per passenger, an amount that is currently the equivalent of just over $1,800 in U.S. currency. 

In November 2009, the DOT notified U.S. and foreign carriers that the international liability limit would be increased from 1,000 SDRs to the new limit effective Dec. 30, 2009, and advised them to revise their notices to passengers to reflect the change.

In January 2011, the Department’s Aviation Enforcement Office learned that United had given a number of passengers ticket wallets printed after the increase took effect that continued to list the old figure of 1,000 SDRs as the limit on baggage liability.  However, the Enforcement Office found no evidence that United had used the old liability limit when handling baggage-related claims after the increase went into effect.