Claims Set Airlines and States at Odds Over Ads

A state-versus-federal jurisdictional battle is shaping up over the question of airline advertising.

In Waco, Tex., a U.S. judge has told 33 states, including California, to refrain--for now--from taking legal action against what the states perceive as misleading and improper ads by air carriers.

Suits filed by the attorneys general of the respective states are pending against airlines in Texas, California, New York and Kansas. Others are in preparation.

The suits are essentially identical, and are based on new guidelines issued recently by the National Assn. of Attorneys General. These guidelines are at the heart of the dispute.

The states contend that their internal law enforcement agencies have the right to regulate matters, such as the content of advertisements, that affect their constituents.

The airlines argue that all of their activities, including advertising, are regulated and controlled by the federal government through the Department of Transportation.

There is enough of an issue here, apparently, for U.S. District Judge Walter Smith to want to settle it once and for all.

The NAAG guidelines, ratified by the 33 states, were aimed at preventing the airlines from making extravagant, eye-catching claims in their ads, and from presenting the product advertised in what the member states consider a misleading manner.

For instance, how often have you been alerted by the huge letters in an airline ad offering “New York, $98 one way. . . .,” or words to that effect, only to learn that you can’t buy the ticket on a one-way basis?

That fare, according to the attorneys general, is not $98 one way. It’s $196 round trip, and should be so advertised.

Another airline practice that upsets the states’ law enforcement officers is the air carriers’ tendency to omit mandatory taxes and their own surcharges from advertised prices.

The way the members of NAAG see it, if a $100 fare can only be bought by paying an $8 tax, be it local or state or federal, plus a $6 fuel surcharge, it should be advertised as a $114 fare.

The challenge to that thinking was filed in Waco by TWA, Continental and British Airways. They argued that the Texas attorney general’s office had no right to sue them on the grounds of their advertising.

Smith first granted an injunction only against the state of Texas, preventing the attorney general there from taking action against the three carriers, pending review. Later, at the request of the carriers, he took the injunction a step further, extending it to the 33 states that subscribe to the NAAG guidelines and to all domestic airlines.

And so the battle is joined.

California’s position, like that of the other states, is clear. Representatives of the attorney general’s office do not question--and never have questioned--the legitimacy of the Department of Transportation, or some other federal body, as the regulator of many substantive aspects of airline industry operation.

A spokesman said, “What we are talking about is advertising a product in California in a manner that could mislead the citizens. We’re not talking about safety, or mergers, or anything like that. We are talking about protecting our citizens from reacting to advertising that too often tells less than the whole story.”

The airlines, on the other hand, fear a day when all 50 states might enact legislation affecting their advertising practices, which surely would make their job more difficult.

A representative of the Air Transport Assn., whose members are the domestic airlines, stated the industry’s position:

“We don’t want to be presented with a patchwork quilt of regulations of our advertising or, for that matter, any other aspect of our business,” he said. “The federal government, through the Department of Transportation and the Federal Aviation Administration, oversees our activities.

“And that is where the question of advertising should remain--in federal jurisdiction.”

It will probably take months before the review gets started and months more before it is completed. In the meantime, attorneys general will almost certainly continue to prepare, but not file, misleading advertising suits against airlines.