December 4, 2024
Charter brokers that don’t include taxes in pricing could be afoul of the DOT’s full-fare advertising rule, per a complaint from Linear Air.
Private jet charter broker Linear Air has filed complaints with the Aviation Consumer Protection division of the U.S. Department of Transportation. It alleges three competitors violated the DOT’s full-fare advertising rules.
In complaints reviewed by Private Jet Card Comparisons, Linear Air cites online price quotes from Jettly, OneFlight International, known as BAJit, and Surf Air.
The complaints allege the trio of “providing pricing that does not include taxes, in prospective violation of the requirements of 14 CFR Part 295.”
Linear Air CEO William Herp says the DOT requires price quotes to include taxes and fees, including the 7.5% Federal Excise Tax imposed on domestic charter flights.
Herp sent the DOT examples of pricing from each that he alleges does not include taxes or is misleading.
“With regard to SurfAir, Jettly, and BAJit-OneFlight, we believe their pricing practices violate the full-fare advertising rule as described in the DOT’s Guidance Regarding Interpretation of Unfair and Deceptive Practices,” Herp says.
Herp points to the following from 14 CFR Part 399.84:
‘The Department’s full-fare advertising rule is based on its authority to prohibit deceptive practices. Put simply, this rule requires advertised prices for air transportation to be the entire price to be paid by the customer to the carrier, or agent, for such air transportation. The Department based its rule on evidence that consumers believed that they were going to pay a particular advertised price for air transportation, only to find that the price was substantially higher due to additional taxes and fees.[45] The rule also requires any charges that are listed as components of the entire price ( e.g., taxes) not to be false or misleading.’
Vedder Price aviation attorney David Hernandez, a former DOT and FAA lawyer who reviewed the complaints, agrees with Herp regarding the necessity of including mandatory fees and charges such as the 7.5% Federal Excise Tax.
“You have to be transparent, and it has to show the full price consistent with the DOT’s unfair advertising rules,” he says.
Hernandez says the alleged violations would likely be under 14 CFR Part 399.84 instead of 14 CFR Part 295.
They would also be subject to the DOT’s discretion.
However, either way, he says the DOT is compelled to investigate.
OneFlight CEO Ferren Rajiput disputes the allegations.
He says, “Our prices include taxes. We even give you the segment fees for four passengers if you have four passengers. The first prices on our website or app always include the taxes.”
Rajput agrees with Herp, “It should be the total price.”
Jettly CEO Justin Crabbe says that after being contacted by Private Jet Card Comparisons, the company has updated its displays to show tax-inclusive pricing from the outset.
It had been on the second screen.
DOT fines for unfair and deceptive practices can range from tens of thousands of dollars to six figures.
In 2019, Lufthansa agreed to a $50,000 fine, and in 2022, FlightHub Group agreed to a $300,000 fine.
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