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January 19, 2012

Icelandair Fined $50,000 for Violating US Advertising Rules

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Reflection of an Icelandair Boeing 757 in an Amsterdam Schiphol window.

Icelandair has been fined $50,000 by the US Department of Transportation for violating fare disclosure rules in its online advertisements.

Reflection of an Icelandair Boeing 757 in an Amsterdam Schiphol window.

Reflection of an Icelandair Boeing 757 in an Amsterdam Schiphol window. (Photo by <a href=http:[email protected]/3808550479/eastcolfax, via Flickr)

DOT rules require that airline-imposed fees be included in advertised airfare prices, and taxes must be displayed through a prominent link next to the fare. The agency alleges that during the Fall of 2011, certain Icelandair ads appeared online stating “Fares to Iceland and Europe starting from $429*.” The asterisk was not explained in the ad, and nowhere in the ad were taxes and fees disclosed. Furthermore, when a reader would click the ad, they would be directed to the airline’s homepage, where they would have to choose their route before the full fare with taxes and fees was shown.

Icelandair told the DOT that the ad had expired at the time of the violation and that its display was an error on the part of their ad agency, not the airline itself. The company has 30 days to pay half of the fine, and the other half will be waived so long as Icelandair does not commit any similar violations in the next year.

Ahead of even more stringent online advertising rules which take effect January 26th, the DOT has been on a tear against ad violators in the new year. On January 6th, a $60,000 fine against AirTran Airways was announced over incomplete tax and fee disclosures. About a week later, the agency announced a $30,000 fine against Imagine Tours and Travel, an online travel agency, for hawking inaccurate fares.

Beginning January 26th, airlines and travel agents will be required to include all taxes and fees in their advertised fares. Under current regulations, government imposed taxes and fees may be listed separately.



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