The U.S. Department of Transportation is fining online travel company Travelzoo Inc. up to $50,000 for failing to properly disclose to consumers that flights on one of its travel sites were operated by airlines using code-sharing arrangements.
Under code-sharing arrangements, an airline will sell tickets on flights that use its own designator code, but are actually operated by a separate airline. Federal 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.
"Passengers deserve to know which airline will be operating their flight before they purchase their tickets," U.S. Transportation Secretary Ray LaHood said in a statement.
The federal department said TravelZoo violated these rules at its website Fly.com and it must pay $25,000 immediately and another $25,000 if it violates them during the next 12 months.
Travelzoo said that it learned earlier this year that a small number of its itineraries on its Fly.com website did not have this information. Fly.com's vice president and general manager Warren Chang said the company resolved the issue and has updated the way codeshare information is displayed to make it more accessible to users.
The company said it believes that Fly.com is a search engine and not a ticket agent, since it does not handle bookings or issue tickets, but that it plans to follow the rules as it applies to ticket agents.
Shares of Travelzoo gained 42 cents to close at $17.70. The stock has traded between $16.56 and $31.66 in the past 52 weeks.