WASHINGTON -- The Transportation Department fined Hotwire $50,000
after concluding Hotwire used deceptive radio ads to promote its
low fares.
The DOT, however, rejected complaints that the
distressed-inventory Web site -- founded by Texas Pacific Group and
six major U.S. airlines -- made "unfairly disparaging references"
to Frontier and American Trans Air in the ads.
Those two airlines filed complaints about the radio spots, in
which Hotwire airlines were described as more trustworthy and
reliable than unnamed low-fare competitors.
As for the fares, the ads referred to a specific destination and
quoted a fare to that destination. But the ads, which ran in many
different cities, did not reveal where the flight for that fare
originated.
In many cases, the fare was not for a flight from the city in
which the ad was aired.
Part of Hotwire's defense of those ads, the DOT said, was that
they were meant only to provide "an illustration of savings that
may be available to prospective passengers," not a specific
fare.
But in a consent order, the DOT concluded that Hotwire had
"created the false impression that the fares it advertised were
available in the cities in which its advertisements were
broadcast."
In accepting the fine, Hotwire did not admit wrongdoing but
agreed to include origin-city information in its ads.
Half of the fine is payable now, but the remainder will be
forgiven if there are no additional violations for the next
year.