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Travelzoo (TZOO) Fined By DOT Over Violation Of Code-Share Disclosure Rules

 November 26, 2012 02:32 PM

(By Balachander) Travelzoo Inc. (NASDAQ: TZOO), an online ticket agent, has been fined $50,000 by the U.S. Department of Transportation (DOT) for violation of code-share disclosure rules.

According to DOT, Travelzoo failed to properly disclose on its website the existence of code-sharing arrangements when advertising code-share flights operated on behalf of a major air carrier by a regional air carrier.

Travelzoo did not display the corporate names of the carriers operating the flights or any other names under which those flights were sold to the public on its flight itinerary pages, the agency noted.

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As a result, consumers were unable to learn, at an early stage of the booking process, the identity of the airline that would actually operate the aircraft on which they would be flying.

Under code-sharing, an airline will sell tickets on flights that use its designator code but are operated by a separate airline.

DOT rules require airlines and ticket agents to disclose to consumers, before they book a flight, if the flight is operated under a code-sharing arrangement.

The disclosure must include the corporate name of the transporting carrier and any other name under which the flight is offered to the public. When tickets are purchased on the internet, code-share information must be easily viewable on the first display of a website following a search for flights corresponding to a desired itinerary.

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The DOT has ordered Travelzoo to cease and desist from future violations.

TZOO shares traded 1.16 percent higher at $17.48 on Monday. Over the past year, the stock has been trading between $16.56 and $31.66.

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