The US Department of Transportation (DOT) has ordered low-cost carrier People Express Airlines to stop selling memberships in its Club Travelati discount programme and fined it $10,000 over the matter.
The Virginia-based airline sold more than 130 memberships in the club without having the required certificate of public convenience and necessity to engage in transportation activities or an exemption to the certificate between 13 February and 27 March, according to a DOT order.
People Express denies violating the requirement but has agreed to pay the penalty. It removed information relating to Club Travelati from its website once it became aware of the DOT's concerns.
Membership in Club Travelati included exclusive discount offers once scheduled air service begins.
The ruling is subject to a 10-day public review period.
People Express applied for a certificate on 19 March. It plans to begin services from its base at the Newport News/Williamsburg airport to Orlando and Pittsburgh during the third quarter of 2012.