AA CEO misleads his passengers on transparent airfares


I just returned from a trip to Madrid, Spain. I flew on American Airlines on a US Airways plane from DC to Charlotte and then on to Madrid. In my seat-back pocket I found a US Airways magazine. Opening it, I was immediately greeted with the smiling face of Doug Parker and his Perspective article, In Support of Transparent Airfares.

It is a shame that Mr. Parker is using his magazine to mislead the public when he could use the very same publication to inform the public of the dangers of steadily increasing airline fees and taxes.

Mr. Parker is misrepresenting the truth through omission.

When he claims that “there is no breakdown of the base airfare versus the taxes and fees collected by the federal government” in the second paragraph of his Perspective piece, he fails to note this failure is entirely the fault and choice of the airlines, not the U.S. Department of Transportation (DOT).

In the next paragraph, Mr. Parker notes, “…the current law has allowed the government to increase taxes invisibly on the airline passengers.” He fails to tell his passengers that American Airlines and US Airways, as well as Delta Air Lines, United Airlines and the rest of the airlines, are free to list every single tax or fee right next to the advertised inclusive prices.

He fails to tell the public that the rule requiring full fare advertising includes permission to break out the taxes and fees following the full airfare-with-taxes-and-fees price. (The only limitation: Those taxes and fees cannot be displayed “more prominently” in the ad than the total airfare.)

Beyond price advertisement, airlines are free to trumpet taxes and fees that they feel are unjust. Every passenger who has received a ticket itinerary or a boarding pass generated by the airlines could receive a clear outline of the taxes and fees imposed by the government, airports and the airlines. There are no limitations on that kind of airline-to-passenger communication. But, none of us has ever seen such an effort, though we do sometimes find ourselves printing out sheets of Sudoku games, weather reports and other advertisements.

Today’s DOT full airfare rule means that when a consumer sees the price of flying from Boston to Miami — or to Timbuktu — in an advertisement, they can purchase the ticket for the advertised price.

If airlines have their way and Congress passes the Orwellian-named Transparent Airfares Act, it would allow airlines to advertise super-low airfares — let’s say $49 from Boston to Miami — that no one could purchase for that price.

Next, consumers would be faced with the drip, drip, drip of additional fees for the likes of first checked bag, second checked bag, carry-on bag, early boarding, seat reservations, airport check-in and more.

Somewhere in the buying process the airlines would help consumers more by “clarifying” the mandatory taxes and fees that will be added to the ticket price prior to discovering the full cost of travel.

Obviously, clarifying taxes and fees is not the endgame for airline executives like Mr. Parker. Everything that Mr. Parker and other airline CEOs claim they want to do can be done under current DOT rules — everything, that is, except deceptive and misleading, low-price advertising.

Unfortunately, airline executives are determined to make airline prices as complex and non-transparent as possible. Even more pernicious — this terrible bill (passed out of committee without debate and no consumer comments) would legalize a form of bait-and-switch pricing called drip pricing that the Federal Trade Commission and DOT have been fighting against for decades.

Anyone who has followed my articles and website posts knows that I have been working for years to force airlines to be more transparent about their airfares and how much it really costs to fly. I have encouraged airline CEOs like Mr. Parker to be honest with passengers and allow them to compare prices across airlines, including ancillary fees.

Steadfastly, the airlines have refused to provide flight-specific, passenger-specific fees for basic services such as checked baggage and seat reservations. Airlines only make airfares available to the public through travel agents. Hard to imagine, but airlines withhold the data that would allow all travel agents, from the one on your neighborhood corner to Internet giants like Expedia, Orbitz and Priceline, to tell passengers how much their trip will cost in full, including extra fees.

Travelers United stood together with the airlines and their unions working to stop the onslaught of new fees being imposed on travelers. From security fees to passenger facility charges and customs and border protection, consumers and airlines have worked together in firm opposition to the voracious government tax/fee appetite. Travelers United will continue to do so.

However, when it comes to truth in advertising, real transparency and protecting consumers against deceptive and misleading airline marketing, Congress needs to stand together with the public and reject Mr. Parker’s misrepresentations and those of the airline industry.

And, airlines that have so many ways to communicate with their passengers should use their power of outreach to educate passengers about creeping taxation using their inflight magazines and videos, boarding passes, blogs, social media, websites and itinerary printouts. That would be real, positive, consumer education.

What price should be in airline advertising?

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  • TonyA_says

    He is beginning to sound like Ben Baldanza, the CEO of Spirit.

  • Rodolfo

    I’m with you on this one. I read Parker’s article on a recent flight too. My reaction was, “He’s making the case as well as he can, but he has a very weak case.” What he wants is permission to advertise the base fare to us in promotional materials, but the base fare is close to meaningless to the public because, indeed, of all the excessive and increasing fees and taxes that are imposed. He’s right about that part of it, but is trying to address it in the wrong way.

    Now we get the new “TSA” fee increase, which actually doesn’t even go to the TSA (bad as that would be), but gets poured into the general treasury bottomless money pit.

  • AKFlyer

    Airlines will slime out of the requirement anytime they think they can get away with it. Note that Alaska Airlines Vacations (albeit an online travel agent, separate from AS, yet seamlessly accessed from AS’s website) provides itemized quotes all airfare-related taxes and fees when you search air and/or car and/or hotel packages, but omits the taxes and fees associated with the cars and hotels from the total shown for each package trip. I.e. the “totals” this company provides underestimate the actual price of the trip, because travelers still have to pony up additional, substantial taxes and fees to hotels and car rental agencies. This practice may not violate DOT’s requirements, but IMHO, it nonetheless constitutes a deceptive trade practice that ought to be investigated by the FTC.

    File under “When is the total cost for all passengers not really the total cost for all passengers?”

  • emanon256

    I want to see the full price, but I also want to see the breakdown with it.

  • ctporter

    Breakdown of mandatory costs (fees, taxes, whatever is mandatory) yes, included in advertised prices – absolutely!
    If I must purchase something else (seat, boarding pass, etc) prior to boarding the plane then that cost must be reflected in the advertised cost.
    If I have to pay a fee for options such as carry on bags, checked bags, seat selection, early boarding, etc. then the cost of that option should be made available prior to actually booking the ticket. However, since it is an optional cost it need not be advertised as the cost of the flight.

  • mjhoop

    Just as I mentally add 10% for taxes to the advertised cost of products I buy; and 15% to the cost of menu items to pay the help, which would, in a sane world be added to the cost of the food, as is done in Europe, where the help gets a living wage and benefits; then it seems prudent to add a percentage to the price of any air ticket for the extra charges and taxes, etc. 20% is the number i sense would do the trick.

    How do other travelers figure the amount?

    It makes no sense to me to worry and fuss and fret about honest pricing. Life is too short for me to hold my breath for that, so I need a rule to make myself able to leave home without extra stress on top of what i have when trying to get from the parking lot to the gate.

    I do, however, applaud Consumer Traveler, Chris and company, and all others who are young enough to fight the fight for decency and consumers good treatment.

  • 3bettins

    When you see an ad for anything, from an article of clothing to an automobile, you do realize that the retailer is required to add taxes to it, correct? Plus whatever other fees the government requires, ie, tax, tag and title. You can buy a ticket on many low budget European carriers within Europe for 9 euros, the advertised price. Do you honestly think that there is anyone who thinks that is what they will pay? Use the brains God gave you.