SEAPORT AIRLINES’ JOINT CONSENT ORDER
February 25, 2018
On December 21, 2017, the Department of Transportation fined Seaport Airlines (Seaport) for violating several consumer protection-related regulations. Specifically, DOT alleged that Seaport collected PFCs from consumers, but failed to remit those funds to airports as required. In February 2016, Seaport filed for bankruptcy under Chapter 11 of the Bankruptcy Code in the District of Oregon. On September 21, 2016, the case was converted to a Chapter 7 proceeding and the FAA and DOT cancelled the company’s authorities. When Seaport filed for bankruptcy, it did not immediately create and fund a separate PFC fund that complied with the provisions of 14 C.F.R. 158.49(c). These acts and omissions constitute violations of 49 U.S.C. § 40117 and 14 C.F.R. Part 158.
Moreover, Seaport informed consumers on its website that PFCs are a component of the price to be paid for air transportation on certain itineraries. However, in late 2015 and early 2016, Seaport failed to remit some of those PFC payments to several airports. In doing so, Seaport engaged in a false or misleading display of air transportation price components in violation of 14 C.F.R. 399.84. By violating section 399.84, Seaport also engaged in an unfair or deceptive practice in violation of 49 U.S.C. § 41712.
DOT determined that the above actions constituted violations of U.S.C. § 41712 and were also unfair and deceptive practices under 14 C.F.R. Part 399.84. As a result, the Department fined Seaport Airlines, Inc. $40,000.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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