Today, Hogan Lovells’ Global Unmanned Aircraft Systems (UAS) Practice Chair Lisa Ellman testified to the House Small Business Subcommittee on Investigations, Oversight and Regulations ...27 September 2016
U.S. Department of Transportation Issues Consent Order for Violations by JetBlue
The DOT concluded that JetBlue had violated these rules, ordered the carrier to cease-and-desist from future violations, and imposed a civil penalty of $60,000 (with ½ to be forgiven if JetBlue avoids any similar violations in the next year) for the violations of the full fare pricing rule associated with its “Go Pack” promotion.
(1) Full-Fare Pricing: JetBlue’s “Go Pack” promotions encompassed seven different packages, each of which included ten booking codes that could each be redeemed for a one-way nonstop flight on a specified route or routes. As the DOT explained, “[f]or each package, JetBlue quoted the price in the format of “total base fare + taxes/fees per flight.” For example, the price for the Pittsburgh package was presented as “$899+ $7 taxes/fees per flight.” For the San Juan package, the price was presented as “$699 + up to $69 taxes/fees per flight.” The advertising did not state the entire price of the package including taxes and fees that had to be paid to redeem all of the booking codes,” and that violated the DOT’s full fare pricing rule. The DOT imposed the civil penalty on JetBlue for this violation.
(2) 24-Hour Cancellation/Refund Rule: The DOT also concluded that JetBlue had violated the 24-hour cancellation/refund assurance in its passenger service plan. The DOT found that “JetBlue imposed its cancellation fees on a limited number of qualified reservations towards which a full refund should have been issued when the reservations were cancelled.” The DOT did not fine JetBlue for these violations because this rule was violated only in a very small number of cases (less than 1% of all cancellations) and because JetBlue quickly refunded monies to passengers when made aware of the situation.
(3) “Free Tickets”: The DOT also found that JetBlue’s Election Protection sweepstakes violated the rules about full fare advertising and “free” travel promotions. “JetBlue advertised its “Election Protection” sweepstakes on the Internet and through several regional news media networks," inviting consumers to enter a sweepstakes by voting for a presidential candidate and stating that each sweepstakes winner would receive a “free ticket” or a “free flight.” JetBlue’s “Official Rules” stated that “[p]assenger is solely responsible for all fees, taxes, surcharges, and service charges for all travel booked using a Travel Certificate” and that the government taxes and fees for each way international travel could be up to $329. Although consumers who won the prizes were not charged airfare, they did have to pay government taxes and fees in order to book tickets.” As such, the DOT concluded that JetBlue’s sweepstakes advertisements violated 14 C.F.R. Section 399.84(a) and constituted unfair and deceptive practices in violation of 49 U.S.C. § 41712. The DOT did not fine JetBlue for this violation, however, because “JetBlue received no direct financial gain from the advertisements”.