Airlines back law that would obscure ticket taxes, fees
Travel columnist Christopher Elliott is unimpressed with a proposed law that would let airlines quote and advertise airfares without government taxes and fees included.
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At best, the proposed Transparent Airfares Act of 2014, a bipartisan bill introduced this month in Congress, would open a window into the many taxes and mandatory fees attached to your airline ticket — charges that the airline industry believes you should know about.
At worst, the proposed law would give airlines a license to quote an artificially low ticket price, undoing years of regulatory efforts to require the display of a full fare. And if the bill passes, critics fear that an airline could quote you an initial base ticket price, minus any taxes and government fees, leaving you with the mistaken impression that your total airfare is far cheaper than it is.
So far, the debate about the Transparent Airfares Act has been fairly predictable, with airline representatives and their supporters lining up to defend the bill and consumer advocates denouncing it. Sound bites in a moment.
But here’s one question that has gone unasked: Are passengers really clamoring for a “transparent” airfare? If so, where are they?
In 2011, the Transportation Department mandated that airlines quote a total price for airline tickets, including all government taxes and mandatory fees. Two airlines unsuccessfully sued the government, arguing that the full-fare advertising rule violated their right to free speech. The Supreme Court declined to accept the case, confirming a lower court’s ruling upholding the requirement.
Since then, I’ve received no complaints from air travelers about their inability to view the taxes and fees on their airline tickets. A representative for the Transportation Department, which collects complaints about airfares, also told me that it’s “unlikely” that anyone has asked it for more transparent prices. “Consumers have consistently confirmed to us that advertising of prices below the total cost of travel causes confusion,” DOT spokeswoman Caitlin Harvey told me.
Perhaps I was missing something, so I asked the representatives who sponsored the bill whether they could put me in touch with some constituents who wanted more “transparent” airfares. Among the bill’s sponsors were congressmen with distinguished records of protecting consumers, such as Peter A. DeFazio (D-Ore.).
“While the DOT had good intentions, the new rule effectively reduced transparency,” DeFazio said in a prepared statement. “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.”
Justin Harclerode, a spokesman for the House Transportation and Infrastructure Committee, called my request “a little off-base.”
“How can customers complain if they’re unaware that something — part of the cost — is being hidden from them?” he asked.
Harclerode suggests that ticket prices are deceptive, because customers see only the total ticket cost, so they assume that it’s all attributable to the airline, when in reality 21 percent of the price is the result of government fees and taxes.
“Consumers should know what the total cost of a ticket is, but, just as with other products and services, it should also be clear to the purchaser how much they are paying as a base price and how much they are paying the government,” he told me. “Currently, that is not the case.”
The Transparent Airfares Act would allow airline ads to state the base airfare and then separately disclose any government-imposed taxes and fees and the total cost of travel. So an airline could advertise a flight for $237, the cost of the ticket alone, instead of the $300 you’ll end up paying after taxes. It wouldn’t have to reveal the total cost until you pay for the ticket.
I asked A4A, the U.S. airline industry trade organization, whether it could connect me with any passengers who were unhappy with their inability to see the taxes and fees included in a ticket price. Under the regulations, a carrier is free to describe the charges included within the total price, such as government taxes and fuel surcharges, as long as it shows the all-in fare at the beginning of the booking process.
“This isn’t about customer complaints,” A4A spokeswoman Jean Medina said. “It’s about transparency and truth in advertising by showing the actual fare and then the taxes the customer is paying. On its face, full-fare advertising sounds as though it is protecting the consumer, when in reality it is protecting the government, enabling spikes in taxes to be hidden and buried within the price of a ticket. We believe that customers should know where their travel dollars are going.”
In other words, consumers aren’t asking for transparency. But they would if they could.
Or would they? Again and again, in comments to the Transportation Department, fliers have stated their preference for knowing a total fare upfront, saying that they feel duped when shown a low airfare that they can’t actually buy. Before the full-fare rule went into effect, it wasn’t uncommon to find an attractive ticket price — say, $299 for a transatlantic flight — but once taxes, fuel surcharges and other fees were added, the total fare came to $899. That price was revealed only at the end of the booking process, frustrating passengers.
“This bill is really the Air Transportation Cost Concealment and Deception bill,” says Paul Hudson, president of Flyersrights.org, which advocates for air travelers. “By allowing the base price to be advertised instead of the all-in price, consumers will no longer be able to easily price shop for air transportation.”
Sally Greenberg, executive director of the National Consumers League, put it equally bluntly: “The airlines want to advertise deceptively low prices. We’re all for transparency, but this bill doesn’t provide it.”
And what about passengers? I spoke with dozens of them after the bill was introduced. When I outlined the airline industry’s arguments, many agreed at first that taxes and fees were concealed in the fare and that it didn’t seem fair. But when I explained the net impact on their next airfare purchase, as described by consumer advocates, they were virtually unanimous: The bill does the exact opposite of what it’s meant to do.
Kimberly Webb, a reader from San Antonio, says that she doesn’t mind a breakdown of fares, “but for the love of Pete, when I’m searching for the best fare, I want to know the whole price.” She doesn’t like getting to the end of a purchase only to find out that it will cost more once taxes and other surcharges are added in; she believes that is deceptive. “Just tell me the whole price,” she says.
If the Transparent Airfares Act becomes law, then passengers such as Webb might look back on the past two years as the golden age of airfare comparison shopping, when passengers knew how much their tickets would cost.
That assumes, of course, that this gets out of the House committee — and past the Senate.
Christopher Elliott is a consumer advocate and the author of “How To Be The World’s Smartest Traveler.” His column runs regularly at seattletimes.com/travel, Email him at email@example.com