House Commitee moves for new airfare law with no hearings, excluding consumers from process

US Capitol © Leocha

A previous post noted that the Chairman of the House Transportation and Infrastructure Committee had introduced the Transparent Airfares Act of 2014. This is a reprint of our earlier story about this misguided bill designed to make airfares more confusing. The committee just announced yesterday afternoon that it would bring this bill to “mark-up” tomorrow, April 9th, with no hearing and no opportunity for consumers, travel agents, the travel industry, central reservation systems and others to make any comments about the substance of the bill.

This proposed bill takes out truth in advertising and allows airlines free reign to create confusion in advertising. Why can’t the aviation industry simply tell the truth about their pricing instead of playing games?

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 knowingly 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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  • BobChi

    I think there is an issue that the airline ticket is taxed very heavily and the airlines would like you to know that a significant portion of what you pay doesn’t go to them at all. However, I agree that the larger good is for the real price to be advertised up front. But only the actual price, not any optional add-ons that the customer doesn’t need to pay for.

  • bodega3

    How can the ‘real’ price, as you put it, be advertised without knowing the connecting cities? Using UA as an example from SFO to JFK, you can go nonstop, or connect. If you connect, you can do it with one connect, two connections even three connections. How can the real price be advertised with so many fight options?