If the airline industry gets its way, and its cleverly named Transparent Airfares Act of 2014 passes, then the price of your airline ticket could drop significantly. At least, it’ll look that way.
Airlines say about 20% of your airline ticket goes directly to the federal government and airports in the form of taxes and fees — money that, for the most part, pays for essential services such as airport security, air traffic control and passenger facilities.
But would the cost of your ticket actually go down with the law? Nope.
Instead, the proposed law would remove government consumer protections by allowing an airline to initially claim that its tickets cost less than they actually do. Press the “buy” button online for the deceptively low airfare, and all taxes and mandatory fees would be added to your bill.
Airlines insist that’s a fair way to advertise prices, and in line with other industries. But consumer groups fear it will give airlines a license to lie to travelers, who are deeply suspicious of it.
Airlines say they shouldn’t be.
“The bill is entirely pro-consumer, as it is about restoring transparency and truth in advertising so airline customers can see exactly what they are paying for the actual fare and in taxes,” says Katie Connell, a spokeswoman for A4A, an airline trade association.
The law would unravel a Department of Transportation regulation called the full-fare advertising rule, which was supported by consumer groups and passengers and upheld by courts. It required airlines to quote a fare that included all taxes and fees. That rule, airlines contend, doesn’t protect consumers but allows the government to bury tax spikes inside a ticket price.
“We believe our customers have a right to know where their travel dollars are going, much like they do with nearly every other consumer product,” Connell says. Buy virtually any durable consumer good, such as a car or TV, and the manufacturer can quote a rate that excludes sales taxes.
That’s a seductive argument, but it’s wrong on every level, passenger advocates say. Businesses regulated at the federal level and facing similar taxes to airlines — notably gas — must quote a complete price, including all taxes, they point out. Airlines are exempt from state and local taxes, which means they can’t be compared with most other consumer purchases, say critics of the proposed law. And they note that airlines are free to break down their taxes and fees after quoting an initial, all-inclusive price.
In short, the bill would dupe us into thinking fares are cheaper than they are. “It is all about making airfares less transparent,” says Paul Hudson, president of FlyersRights.org. “The name of the bill is just the start of the false advertising.”
Kevin Mitchell, chairman of the Business Travel Coalition, doesn’t mince words: “It’s a terrible bill on every level.”
The Transparent Airfares Act creates a false problem — that airline taxes are too high and that airfares aren’t “transparent” enough — and tries to fix it at the expense of consumers, he adds.