Prestige Cruise Holdings, parent company of Oceania Cruises and Regent Seven Seas Cruises, was fined $75,000 by the U.S. Department of Transportation for not disclosing applicable taxes and fees in its "free air" advertisements.
The DOT said in a consent order that ads for air-cruise packages did not include government taxes or air-related fuel surcharges and service fees. The DOT considers the failure to disclose such charges an unfair and deceptive trade practice.
"The 'free' air fares, as advertised, do not provide adequate notice that certain taxes and fees, which properly may be stated separately from the advertised fare, must be paid by the traveler in order to obtain the 'free' air fare, nor of the amount of such taxes and fees," the DOT order said.
The DOT said that Prestige had immediately revised pricing on its websites and informed printing vendors to discontinue its 2009 and 2010 advertisements.
Prestige also told the DOT it had contacted some 31,000 travel agents to inform them of the change, and that it informed marketing, sales and field staff about the new advertising policy.
In addition, Prestige told the DOT that "in the interest of offering customers a more simple pricing structure," Regent and Oceania have now implemented an all-inclusive pricing model in which all airline-imposed fuel surcharges and government taxes are now included within the advertised fare.
As is typical of DOT settlements with airlines on price advertising issues, half the $75,000 is payable immediately, and the remainder will be waived if the company refrains from similar violations for one year.
Prestige would not comment on the DOT allegations.
Oceania has made free air a staple of its cruise pricing. Other cruise lines also offer free air, usually depending on the itinerary.
Crystal Cruises spokeswoman Mimi Weisband said Crystal absorbs airline taxes and charges in its free-air program.
Azamara Cruises, which says it offers free air for some cruises, said that it always advertises that taxes and fees are additional in a disclaimer.