Enjoy the government’s new airfare rule. It might not last.
On Jan. 26, the Transportation Department began requiring airlines and ticket agents to quote fares that include all mandatory taxes and fees. Since 1988, they’d been allowed to advertise fares that didn’t include government-imposed taxes and fees.
Consumer groups cheered the move, which made airfare shopping one step simpler for most travelers and effectively put an end to those $9 fare sales that occasionally popped up online. But several airlines whose business models depend on the ability to quote a low base fare weren’t happy with the change. And as it turns out, they have friends in Congress.
This week, Rep. Tom Graves (R-Ga.) introduced a bill that would reverse the DOT requirement. His proposed Travel Transparency Act, co-sponsored by Rep. Ron Paul (R-Tex.) and Rep. Lynn A. Westmoreland (R-Ga.), gives airline passengers the right to a clear, separate disclosure of the fees and taxes they pay on each airline ticket, he says.
“If the goal of the DOT’s rule is to prevent companies from deceiving passengers about the total cost of their ticket, why is the department mandating that airlines hide the taxes, surcharges and government fees in the fine print?” Graves asked.
A spokeswoman for Graves says his constituents started asking questions about the new DOT rule “on the same day” airline industry representatives approached the congressman’s legislative staff with their concerns. But Graves’s rhetoric closely matches that of Spirit Airlines, one of the carriers that stands to lose the most from the new rule. In an e-mail sent to its passengers last week, Spirit outlined its arguments against the government’s “all-in” price rule.
“Thanks to the U.S. Department of Transportation’s latest fare rules, Spirit must now hide the government’s taxes and fees in your fares,” it wrote. “If the government can hide taxes in your airfares, then they can carry out their hidden agenda and quietly increase their taxes.”
Specifically, the Graves bill would label the failure to clearly and separately disclose both the base airfare and taxes as an “unfair or deceptive practice” and would require that both the original airfare and all required taxes and fees be shown separately in advertisements and fare displays. Spirit did not return calls and e-mails questioning whether the airline had played a role in promoting the bill.
The assertion that quoting the full fare is deceptive drew harsh criticism from consumer rights advocates and their supporters in Washington. Last week, Sen. Barbara Boxer (D-Calif.) sent a strongly worded letter to Spirit’s chief executive, Ben Baldanza, accusing him of misrepresenting the DOT regulations and urging him to stop.
“What the rule says is that you have to tell your customers the full cost of a ticket,” she wrote. “It prohibits Spirit or any other airline from advertising fares ‘that exclude taxes, fees or other charges since the major impact of such presentations is to confuse and deceive consumers.’ ”
She added, “Today’s consumers are faced with many options when planning air travel and being able to compare the full price before purchase is both necessary and fair.”