Airlines still fighting full fare advertising. New legislation moves consumer rights backwards

US Capitol © Leocha

Yesterday, Rep. Bill Shuster introduced the Transparent Airfares Act of 2014. This bill is a major step backwards for consumers and the sponsors of this bill, from both sides of the aisle, have simply not thought through what they are proposing. And, the airline lobbyists, intent on finding ways to make airline pricing more obscure, are flogging a dead horse that has been killed at least three times over the past three years.

In 2011 the Department of Transportation (DOT) announced a new rule that required airlines to advertise the full cost of travel, including taxes and all mandatory fees. Let’s call it the “Aviation Truth in Advertising Regulation,” or the “Full-fare advertising rule.”

This bill said that consumers should be able to know the full cost of travel, so that they can compare prices across airlines. The full-fare advertising rule that came into effect early in 2012 has been regularly attacked by the airlines.

• Airlines battled the travel community through an extensive rulemaking comment period. In the end, they lost and the rule was promulgated.
• Airlines took DOT to US Court of Appeals for the District of Columbia, arguing, in part, that this was a violation of free speech; they lost, again.
• Later, they hired top lawyers to appeal that decision to the Supreme Court; it declined to take the case.
• Now the airlines have persuaded a group of Representatives to file a bill that would roll back consumer protections and allow them to continue deceiving and misleading the flying public.

I noticed several Democrat co-sponsors of this bill, DeFazio from Oregon, Rep. Rick Larsen from Washington, and Rahall from West Virginia, who will have a hard time defending what this bill is proposing. I am certain that each of them, as well as their Republican bill co-sponsors, cannot defend what this ill-conceived bill will allow.

Since I work with the staff of these Representatives, I know that they would not knowlingly support unfair and deceptive practices. They simply have not thought through their bill.

Rep. Bill Shuster, the committee chairman, said, “Department of Transportation regulations have fundamentally and unfairly changed the advertising rules for airfares by requiring all government imposed taxes and fees to be embedded in the advertised price of a ticket.” He obviously never used to shop for airfares three years ago. He has forgotten what airfare advertising used to look like.

The release that was sent out by the House Transportation and Infrastructure Committee quoted Rep. Peter DeFazio, saying, “While the DOT had good intentions, the new rule effectively reduced transparency. Consumers haven’t been getting the whole picture of what an airline ticket pays for. The Transparent Airfares Act is a simple fix to give people better information.”

DeFazio’s idea of better information looks like this. This is a real example of how dramatic the current DOT rules are when it came to advertising. DeFazio’s “better information” is totally allowed by the DOT rules. We need no new legislation.

Let’s look at an example of what this bill would allow. The airlines advertise in giant type that the price of a round-trip Boston to London ticket is $65, with the important asterisk noting, “This price is based on a one-way portion of a roundtrip airfare not including taxes, fees and surcharges.” When a consumer tries to purchase this “fare,” they find out that the advertisement is a lie. The advertised price does not exist. There is no way to purchase a one-way international ticket for one half of a reduced fare. The lowest price that this ticket could possibly be purchased for would be $751 round-trip.

For domestic travel, when all airlines are following the same rules, this bill makes no sense. No airline is provided an advantage over another when advertising rules across the country are uniform.

Rep. Tom Graves chimed in with one of the most misleading statements on the release, claiming, “… the Department of Transportation requires airlines to hide taxes, surcharges, and fees from consumers.” That is just flat wrong.

The DOT rules allow airlines to break out all taxes and fees and surcharges and to break the final price into any components that the airlines might desire. The only thing that the airlines must do is to tell consumers in advertisements the full price of the airfare, including taxes and mandatory fees.

This bill should be retitled the “Unfair and Deceptive Practices Act of 2014.” Perhaps the bill should be called, “The Bait and Switch Act of 2014.” That is what this bill would lead to. And, that was part of the consumer argument for change three years ago.

This bill is a misconceived piece of legislation that will allow the airlines to hide the true cost of travel behind links to separate pages on websites that would include taxes and fees, use pop-ups for taxes and fees, and to “separately” disclose taxes and fees. It is a disaster for consumers, comparison shopping and truth in advertising.

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  • Steve

    Never underestimate what a elected official will do for a campaign donation

  • dcta

    You know I do agree with the idea of full fare advertising and to further that, I don’t believe that a “fuel surcharge” should be allowed – that cost should be part of a fare. BUT to play “devil’s advocate”, what other product must be advertised to include all taxes? When we see a sale at Macy’s, for instance, it’s “$XX.99″ and sometimes will say “plus all local and federal taxes”….

    Personally, as a consumer and not a Travel Agent, I’d like to see fares advertised in a completely broken out cost –

    “$1067.70: fare $827, US and GB taxes $630, fees $389,30.”

    But that’s not gonna happen.

  • BobChi

    I see both sides of that. I do agree that they’re imposing on airlines a requirement that other parts of the economy in the U.S. don’t have. On the other hand, in this particular instance – airfares – such a large part of the price is taxes and fees that it seems there’s a reason for the difference. If I go to the grocery store I know the tax will be 7.15%. It’s so much harder to know in the case of airfares; thus the importance of seeing an all-in price. On the other hand, I can see why airlines are annoyed that they must quote prices of which only a variable portion is actually their own charge – it’s important for consumers to know how many taxes there are and how substantial they are. A breakdown is good, but very cumbersome to the consumer in comparison shopping.

  • jim6555

    When you go to the store, you know that purchasing all non-exempt merchandise will add 7.15% to your cost. It’s different with airlines. Every domestic airport has a different airport tax. I was looking at flight connections this morning and saw that I can save a few dollars by changing planes in Houston instead of Denver. A one stop flight seems to have less tax on it than an itinerary that requires a change of plane in the same city that the through flight stops in. International taxes are absolutely crazy. To some destinations, the taxes are greater than the amount of the fare. Other destinations, the tax may only be a few dollars. I don’t want to go back to the old system. I hope that once again, Congress turns down this attempt to go back to chaos and confusion.