The recently passed House bill, the Airfares Transparency Act, was introduced by Bill Shuster, the Representative from the 9th district nearby Pittsburgh, Pennsylvania. Charlie Leocha of Travelers United and Kevin Mitchell of Business Travel Coalition wrote an op-ed that was published on August 7th in the Pittsburgh Post Gazette.
A response was sent as a letter to the editor by Airlines for America and published on August 19th. Subsequently, Charlie Leocha submitted a response to the airline response that may or may not be published. Because Rep. Bill Shuster is in such a powerful position, these op-eds, responses and this debate in the major newspaper that circulates in his district are extremely important and informative to airline consumers in general. Here is the back and forth.
Make airfares truly transparent. Airlines want Congress to sow more confusion
by Kevin Mitchell and Charlie Leocha
Last week, in a scene right out of NetFlix’s “House of Cards,” H.R. 4156, the Orwellian-titled Transparent Airfares Act of 2014, was passed in the U.S. House of Representatives by voice vote with no chance for debate and no record of how each member voted. Rep. Bill Shuster, R-Blair, chairman of the powerful House Transportation Committee, championed the bill that would benefit only airlines and harm consumers.
The bill was submitted at the behest of airlines that have long objected to a U.S. Department of Transportation full-fare advertising rule that requires airlines to prominently state “all-in airfares” — that is, total ticket prices that include mandatory government taxes and fees as well as mandatory airline charges.
That DOT rule was and is broadly and vigorously supported by consumer and travel industry groups. When it was adopted in 2012, it was the necessary cure for chronically misleading airline advertising. For years, airlines had touted low base fares as a come-on, while masking from the consumer the much higher entire price that included government taxes and mandatory airline fees, such as carrier-imposed fuel surcharges.
Astonishingly, Rep. Peter DeFazio, D-Oregon, in arguing for passage of H.R. 4156 on the House floor under a suspension-of-the-rules procedure stated: “Apparently, we have done something unusual around here, created something that doesn’t seem to be ‘controversial,’ except among a ‘few talking heads’ out there somewhere.”
That’s just not so. It’s just a politician’s spin.
Since April 9, when H.R. 4156 was passed out of committee (after just nine minutes of discussion by its proponents and without hearings or an opportunity for consumer or travel groups to weigh in), scores of prominent corporations, airport authorities and travel companies have written to Congress outlining their opposition.
Likewise, consumer and travel organizations expressed their strenuous objections to Congress. These groups include AAA, AirlinePassengers.org, Association for Airline Passenger Rights, American Society of Travel Agents, Business Travel Coalition, Consumer Action, Consumer advocate Ed Perkins, Consumer Federation of America, Consumers Union, FlyersRights.org, National Association of Consumer Advocates, National Consumers League, Public Citizen, Travelers United and U.S. PIRG. Moreover, 128,000 air-travel consumers joined in strong opposition to H.R. 4156.
Anyone who took the time to examine the tsunami of opposition by this broad spectrum of organizations (their statements are readily accessible at businesstravelcoalition.com ) would shake their heads in disbelief at the spin that this anti-consumer bill was not “controversial.”
Rather than a simple and uncontroversial bill, such as the naming of a federal building, which is the type of bill for which the suspension-of-the-rules procedure is designed, H.R. 4156 is one of the most controversial consumer-aviation bills in a generation.
As airline-imposed fees for services, long considered included in the price of a ticket, have proliferated during the past six years, DOT promulgated the full-fare advertising rule to help minimize consumer confusion about the true cost of flying by allowing travelers to at least compare prices across airlines that included all mandatory airline add-ons and taxes. H.R. 4156 would effectively reverse that DOT rule, reintroduce widespread confusion to airline ticket pricing and enable airlines to mislead consumers with deceptive advertising practices.
H.R. 4156 would enable airlines to obscure mandatory government taxes and airline fees by allowing airlines to reveal them later in the buying process, through a link or popup. This is called “drip pricing” and has been recognized as deceptive by competition and consumer-protection authorities around the world. The practice involves sequentially revealing components of the total price and not divulging the full price until the end of the purchasing process. The final price paid may be significantly higher than the “headline price” but, after investing time and effort in the shopping and booking process, consumers are less likely to start over and more likely to just surrender to the higher price.
Consumers want to know the all-in price of air travel right up front so they can efficiently know and compare the best real options; a cornerstone of the free market system.
As with “House of Cards” protagonist Frank Underwood, there is always more than meets the eye when it comes to special interests and Congress and their grand schemes for corporate and personal political gain at the expense of consumers. The truth is that campaign contributions by special interests often trump consumer interests.
Airlines will now seek a sponsor in the Senate for a companion bill to H.R. 4156. Fortunately, senators and their staffs have had the time to understand both the intent of this misguided legislation and the likely
negative consequences for consumers were such a bill to become the law of the land. Anyone who flies on commercial airlines should contact their senators to make sure they do.
Kevin Mitchell is chairman of the Business Travel Coalition (businesstravelcoalition.com). Charlie Leocha is chairman of Travelers United ( travelersunited.org ).
The airline association (their lobbyists) response
August 19, 2014 12:00 AM
A recent commentary by Kevin Mitchell of the Business Travel Coalition and Charlie Leocha of Travelers United (“Keep Airfares Truly Transparent,” Aug. 7 Perspectives) unfortunately misses the mark on an issue that’s very important to airline customers and their travel costs.
The Transparent Airfares Act (HR 4156) that both Mr. Mitchell and Mr. Leocha take aim at recently achieved something not many in the country or Washington thought was possible in the current political environment: It passed the U.S. House of Representatives with broad, bipartisan support including both Republicans and Democratic representatives in Pennsylvania, such as U.S. Reps. Bill Shuster, Patrick Meehan, Robert Brady and Lou Barletta.
The legislation also has the support of leading labor unions, including the International Association of Machinists, Air Line Pilots Association and the International Brotherhood of Teamsters.
The reason the Transparent Airfares Act attracted this broad support was because it provides consumers with better information about how much of their airfare ticket price is for the base fare and how much is the result of taxes and fees added on by the federal government. When the government knows it can keep customers in the dark about taxes and fees, it is more likely to keep raising those taxes and adding on additional fees.
Federal bureaucrats and regulators should not view airline customers as just another ATM to raise revenue in order to pay for government spending. Kevin Mitchell, Charlie Leocha and the special interest organizations they represent should be applauding bipartisan movement in Washington on good legislation, not denigrating it.
Senior Vice President for Legislative and Regulatory Policy
Airlines for America
The writer’s organization is an airline industry association.
Charlie Leocha’s response to the airline response
August 21, 2014
1. Airlines are missing the mark. Consumers want to know know the cost of travel, not only the cost of taxes.
2. This anti-consumer legislation was ramrodded through the House of Representatives. No discussions or any hearings were allowed at the committee. Plus, the bill was passed on a “Fly-in Day” before an almost empty House chamber by voice vote using a procedure normally reserved for naming post office buildings. The way this misguided legislation was passed is shameful, not to be lauded as bipartisan.
3. This bill was opposed by every major consumer group and by scores of newspapers including the New York Times and USA Today. Plus, more than 128,000 consumers signed a petition against this legislation.
4. If airlines are so concerned about revealing excess taxation, they can do so under current rules.
• Airlines can include the taxes and fees in advertisements.
• Airlines can print every tax and fee on ticket itineraries.
• Airlines can include taxes and fees on boarding passes alongside the handy sudoku games.
However, they choose not to do so.
5. As Mr. Mitchell and I noted in our op-ed, the airlines’ real goal is obscuring the true cost of travel by seeking permission to advertise incomplete airfares and only add mandatory taxes and fees at the end of the buying process. Airline consumers should not be faced with a return to such unfair and deceptive pricing.
Truth in advertising is not too much to ask.