Bill aims to scuttle new airfare pricing rule By Christopher Elliott | February 5, 2012 FacebookTwitterGoogle+Pinterest 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.” Passenger advocates didn’t mince words, either. Kevin Mitchell, whose Radnor, Pa.-based Business Travel Coalition represents corporate travelers, called Spirit’s statements “a new low” and labeled its actions “reckless” and “anti-consumer.” “Regulators understand that there is great profit in consumer confusion and have justifiably interceded,” he says. The DOT is defending its rule. Although he wouldn’t comment on the legislation, a department spokesman told me that the new regulations don’t preclude an airline like Spirit from listing taxes and fees separately, as long as the top number includes every mandatory tax and fee. “DOT wants to make sure that consumers can easily determine the full price for air transportation before you travel,” Justin Nisly said. “Arriving at the airport only to be hit with surprise fees is no way to start a trip.” The airline industry is widely expected to support the Travel Transparency Act, and if it passes, air travelers would return to the days of having to spend a few extra minutes with a calculator if they want to know the full price of a ticket while they’re fare shopping. Even if the effort fails, all is not lost for the unhappy airlines. Three carriers, including Allegiant Air, Southwest Airlines and Spirit, have asked the U.S. Court of Appeals for the D.C. Circuit to reverse the DOT rule, saying it violates their First Amendment right to free speech. In a court filing, the airlines say they have the right to let passengers know about the “significant” tax burden on air travel. It’s easy to understand why airlines are fighting the new DOT rules with such force: Quoting a low base fare, minus taxes and fees, makes airfares look cheaper. And people buy cheap tickets. Critics of the new regulations say that the government has unfairly singled out airlines with this requirement and that no other industry is forced to advertise prices in this way. That’s not true. If you buy gas, you’re paying an “all-in” price at the pump, too. For most airline passengers, none of this really matters. For them, it’s an issue of fairness. If you see a $29 ticket to Las Vegas advertised on a billboard, shouldn’t you be able to buy that ticket for $29? And that’s a question that neither the proposed bill nor some airlines’ creative parsing has answered. (Photo: Richard Johnstone/Flickr) FacebookTwitterGoogle+Pinterest Christopher ElliottChristopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at firstname.lastname@example.org. Got a question or comment? You can post it on our help forum.More Posts - Website - Twitter - Facebook - LinkedIn - Google Plus Cybrsk8r I wonder how Spirit would like it if the company that delivered their jet fuel quoted a price of $4 a gallon and then just when the airline’s purchasing manger was about to click the “buy” button, he suddenly discovered an extra $1.50 in taxes and delivery fees on each gallon. That’s the equivalent of how Spirit wants to price their tickets. larry I’m tying to figure out what other business is required to quote prices that include taxes on all of their goods and services. Looks like the European VAT to me. Fees are another story. bc Larry, the difference here is no other industry is hiding fees quite like the travel industry. Sales tax makes no sense being included in a price because it varies depending on where you live and is fairly easy to calculate. Additionally, virtually nobody includes sales tax in their listed price so comparisons are fair and easy for consumers. Airline taxes are static and there is zero reason they should not be in the original fare quoted to consumers. Additionally, they’re nebulous, not easy to calculate and vary greatly depending on the destination. Do you really want to have to go through the booking process and wait till the end to get your full fair? typhn whats this fee from spirit? Unintended Consequences of DOT Regulations$4.00 Mary Graham Gosh, all we consumers want is NOT to feel/be ripped off. We just want to know the “real” cost in an open, easy to understand way, with no surprises at any time. Is that too much to ask? Elmo Clarity Well, one business that is required to quote the price with all taxes are the gas stations here in the US. They have to include all taxes in the posted price but are free to post a sign indicating how much of that price is for taxes. davork Larry, this would also include those fuel surchanges that never seem to go away.. MarkieA Apparently so TonyA_says Whenever I travel I need board and lodging, too. When hotels advertise rates they do not add all the other fees and taxes I have to pay. Every locality can have different hospitality taxes or VAT. Same is true for Cruise costs, they are advertised without mandatory fees and surcharges. And, then there are restaurants that also add mandatory fees, taxes, and service charges to the cost of food and drinks on the menu. There are a lot of other things I buy that are advertised without government mandated fees included. Why not make the pricing transparency law universal? Raven_Altosk Spirit–Scam Airlines–must’ve invested some of the scammed cash from their fliers into purchasing Congressmen. How nice. I like the total price. I don’t like navigating through 5 screens to see the fare and the fees. Here’s an idea: Break it all out if you want, but keep it all on the FIRST page. sirwired “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?” Huh? In what universe does that statement make any sort of sense whatsoever? I know those words are English, and they form a complete sentence, but my mind boggles at the complete and utter failure of logic here. The fees aren’t hidden at all! They are now disclosed as part of the “top-line” price, as with many other highly-taxed items, such as fuel, cigarettes, and alcohol. I do believe that is the exact opposite of “hiding.” If Spirit wants customers to know how much they are paying in fees and taxes (a perfectly reasonable 1st amendment-protected form of expression) nothing is keeping them from doing so. My local gas station has stickers on every pump letting customers know how much they pay in taxes, and how those taxes compare with neighboring states. The rule merely states that the “top-line” price must be “all-in.” Spirit, if they choose to do so, is more than welcome to make customers acknowledge they are paying a fortune in taxes (as they do with pretty much every form of transportation), they can list these taxes in detail even. They can disclose them in fifty-point type if they want to, as long as on the screen the fare quote is made, it’s not bigger than the all-in price. If they put it on a separate screen, they can do it in 200-point type if they so choose. Raven_Altosk Gasoline includes all taxes. When you’re paying $3.50 a gallon, about $1.50 is tax. So, whenever the ruling class likes to say “big oil needs to drop their prices!!” My thought is, “the government needs to lower their taxes as well.” Raven_Altosk Knowing Spirit–I mean Scam Air–they’d probably just install dollar bill slots on the lavatory to make up the difference. sirwired Cigarettes, fuel, and alcohol. The airlines aren’t being “picked on”; this is par for the course with excise tax and government fees. Fuel is quoted including local sales tax, and the other two are quoted WITH federal and state excise taxes, but without local sales tax. $16635417 Perfect example. Very few people can tell you how much taxes are being hidden in gas, but if you can find the little sign near the pump, you’ll know. This is about the government hiding taxes, talk about lack of transparency. If you saw two different fares and knew the tax on both would be similar, very easy to comparison shop and still be aware of what the tax burden was as well. I do like that airlines cannot hide their “mandatory” fees, such as Spirit was doing with adding “fuel” to a $9 fare, so perhaps a compromise is in order. But, as Washington has shown, compromise is no longer part of their lexicon. TonyA_says Re: Airline taxes are static … Taxes and airport fees change depending on the number of connections and the location of those connections. For example, a Kansas to Venice, Italy ticket price can vary drastically depending on the transit points as they can be NYC, LHR, CDG, AMS, FRA, etc. So, even if the actual fare and fuel surcharge (money that really goes to the pocket of the airline) is the same, the total ticket price will vary depending on the routing since the taxes vary, too. TonyA_says If the TSA security fee increased to $9, you wouldn’t easily notice it. If the U.S. Domestic air tax jumps to 10%, you wouldn’t easily notice it, either. You probably will blame the airline for increasing fares. Why, because today those increases will be imbedded in the first price you will see – the advertised price of the ticket. This provides excellent cover for our government to increase taxes and fees – all in the name of consumer protection and transparency. Be ready and careful for what you asked for. rarnold2000 Typical double-speak. “Travel Transparency Act” so airlines can continue their misrepresentation of the actual price of tickets because the consumer would otherwise be denied the right to clearly see the taxes and fees they are being charged. What a crock. Let’s see, just how hard would it be for the airlines to quote the full price of the ticket, then add one of those little asterisks followed by a detailed list of the included taxes and fees. Or do they think we are we too stupid to do the math. Well, Ron Paul is one of the sponsors so what do you expect. SoBeSparky By any other name, such as “fares hiding taxes,” the low-ball pricing scheme is still blatant greed. Shame on anti-consumer Republicans and airlines. Don Filiault One can’t help but feel that if we could keep people like Mr. Graves and similar politicians from both sides of the aisle out of the way, the country would run much more smoothly. Bob M Ah, the Republicans are at it again, all for big business and not for the consumer, what loosers the Republicans really are. $16635417 As a part of the travel industry, airlines being “picked on”. Why is this concept not being applied across the board. (Not that I am advocating for that!) Why did a recent car rental work out to be more than double what I was quoted? Government taxes and fees. (Federal, state, county and local.) Why isn’t an occupancy tax included in my hotel rate quote? This can vary widely from town to town…and why am I being charged for a “mandatory resort fee” at check-in…that’s not even a government surcharge! $16635417 So if every gas station on a corner now advertised gas at about $2/gal, would we know to add about $1.50 to that figure before choosing the station? (Or does the government prefer to not make the tax amount too widely known?) Doug Marshak I don’t understand why the discounters are claiming that the DOT rules prevent them from informing consumers about their tax burden. The rules don’t require the taxes be “hidden.” Rather, they say that the total price be posted. The airline can provide a total price and then show how that price breaks down, so people can see what they are paying in taxes and surcharges. If Spirit and others want to post the taxes, nothing is stopping them from doing so. $16635417 The best was how their $9 fare did not include the price of fuel…ridiculous! Raven_Altosk As I said, one big scam. If they were anything other than an airline, they’d probably be facing lawsuits by Attorney Generals right about now… Raven_Altosk See, I’d like to have that tax broken out on the end bill. I want to see $3.50/gal on the sign, but when I get the receipt, I want to see: X gal at $2.00 Fed Tax State Tax Local Tax But I’ve already bought the item…this just clarifies how much of my cash is going back to the government. I’d really like to see the airlines do the same on the FRONT page with their fares. Of course the government likes to hide the tax on gasoline. They don’t want to look like the bad guys. This is especially true when they’re stumping and whining about “big oil” ripping people off. That’s probably true, but so is the government with their ridiculous tax rate on gas! $16635417 The only problem with that is that very few people will not bother to look at how much is truly tax. You may, I may, but most won’t. (But perhaps it’s a start, as more will look and be aware.) JohnRStrohm Here is Mr. Graves’s contact information. Please telephone his offices and let him know why he’s making a bonehead move with this bill. DALTON, GA OFFICE 702 South Thornton Avenue Dalton, GA 30720 (706) 226-5320 (voice) (706) 278-0840 (fax) GAINESVILLE, GA OFFICE 311 Green Street NW, Suite 302 Gainesville, GA 30501 (770) 535-2592 (voice) (770) 535-2765 (fax) WASHINGTON, DC OFFICE 1113 Longworth House Office Bldg. Washington, DC 20515 (202) 225-5211 (voice) (202) 225-8272 (fax) Also, please call your Representative and your Senators and ask them to vote AGAINST the bill. Say why. PLEASE be polite. You might suggest that the bill be amended to require that any display of ticket price include, ON THE SAME PAGE, in the same location (not in footnotes), the base price, all taxes and fees, each broken out separately, and the total price, with the total price in the largest font used for displaying price information. TonyA_says That’s for the “cost” of forcing Spirit and other airlines to implement a 24 hours cooling-off period (w/in 7 days of departure). So they say. $16635417 I think the airlines are trying to represent the actual cost of the “airfare” vs. the actual cost of your “ticket” after government imposed taxes and fees. I see this as more transparent. Now, airline imposed mandatory charges, like Spirit was doing with fuel, SHOULD be included in their base fare. It’s not that they can’t add an asterisk. It’s not that they think you’re too stupid to do the math. What I see the problem is that, unfortunately, most people won’t CARE what the breakdown is which opens the door for the government to quietly slip more taxes into an airline ticket and raise existing ones. An interesting approach may be to quote them together but bill them separately, when you see a charge for $89 airfare followed by a charge for $30 on your credit card statement for government imposed taxes and fees, it is sure to keep awareness high. Of course, probably a law against this approach as well. ….and I am not a Ron Paul supporter! :) TonyA_says This is suppose to be in Response to Raven’s post above. Don’t know why it created s separate comment … Sorry. Or anything that the STATES CANNOT REGULATE. There is too much power on those Department of Transportation, Telecom, etc. Bill Armstrong I am fine with the airline disclosing their “fare” and the government fees separately. What I am not fine with is the airlines disclosing part of the money they airline gets as a “fare” and other parts as a “fuel surcharge” etc, especially when these extra airline charges usually exceed the fares. Let’s not skip the facts here. I think everyone was fine with prices being quoted without “taxes” as long as it was only taxes. TouchyFeely No, I have to agree with Graves. We bury too many taxes and fees so deeply into prices we don’t realize how much the government is really skimming from us. The payroll withdrawl was one of the biggest crimes against the American consumers, because no one realizes how much they have to forfeit every check. Do you think anyone will complain about fees once they’re “buried” out of sight? larry Actually, all of Spirits fees and gov taxes were on the second page after your initial input of departure and destination. It was listed under “what’s this”. Hover the cursor over it and it was all broken out. You did not have put in cc info to find this out. larry I paid 1 cent for a fare from Fll to atl. It had no fuel surcharge. It did have a credit card fee, but with all the taxes and fees it was $19.80, with my bag under the seat and no water purchased, it was a steal to fly that route. Philippa_FRA Try to make a random booking at http://www.lufthansa.com. (I mean, don’t book anything for real – just look). When you get to the step called PRICE it looks more or less like this: Fare + taxes/fees/charges’? = TOTAL PRICE Click on ‘?’ and you’ll get the taxes/fees/charges breakdown in a pop-up. Is this – kinda, sorta – what you’re after? jm71 I’m not even sure where to start. Unless I’ve been missing part of the rules, NOTHING in them prevents the airline from prominently breaking down the total into the “base fare”, real tax, and fake airline “fees” on the main display — it simply requires that the TOTAL be displayed as the main item. Everyone making these claims is either being intentionally obtuse and misleading (which is a huge problem with our polarized politics today on both sides), or is simply mentally deficient, calling into question their qualifications for office, and also making anyone who would vote for a clearly unqualified candidate suspect themselves. Requiring proper pricing disclosure, without regulating those prices, is *exactly* what our government should be doing to create a level playing field where businesses and consumers can transact fairly. Raven_Altosk Hmm…looks like we have a Scam Air stooge in the house. Raven_Altosk Yeah, exactly. Sf Roger ‘SOLVE’ the problem by having DOT mandate a breakdown of fees, taxes, etc. above or below the ‘ALL IN’ price and make it look like an addition problem. Clearly, this could head off this kind of anti-consumer legislation. Vicki Margolis Why is this such a big issue? Wouldn’t it be simple to keep both parties (airlines and govt) honest when advertising the fares, by having the ads prominently showing both, the total price of the advertised ticket (inc. taxes), and on a separate line below, the portion of the fare that is designated to taxes? sirwired Because airlines are federally regulated, hotels and rental cars are not. I’m sure the DOT would love for hotels and rental cars to provide proper quotes, but the DOT has nothing to do with them. Don’t know why gas, tobacco, and cigs have taxes included. Vicki Margolis As to fees, they should also be stated clearly, and right up front (not buried in some mass of fine print). All that happens when the airlines hide the taxes/ fees, is they create a hostile customer, who will go out of their way to avoid that airline in the future. How can an airline create “loyalty” to their brand if they keep treating the public this way? bodega3 Your idea sounds good in principal but difficult to do. Take a fare on United from SFO to Albany NY. How would you put that price in an ad when your options to getting there require connecting one, two or three times and through a variety of airports, each with their own set of fees? This is where this new ruling, backed by some people like the Consumer Travel Alliance, who have no clue to how things work. Erin Yea, just another way for them to squeeze every dollar out of you. Ever print out their page of “optional fees”? Talk about killing trees! Six pages of “optional fees” is just too much. $16635417 Also a good way to hide the impact of the proposed $100 “take off tax”. bodega3 They aren’t hidden. What does it cost to by a book on Amazon and have it shipped to your office which is in another town vs to your home? It takes a few clicks online to get that information and it is no different with a ticket. john4868 Larry … How about the last time you filled up at the pump? A sizable portion of the cost of a gallon of gas is taxes. TonyA_says Who exactly are these consumer protection laws protecting? Spirit sold 22.5% more passenger flight segments in 2011 compared to 2010. Passenger Load Factor was a high 85.6% last year. ADDED: Spirit sold 8,517,586 passenger flight segments in 2011. You can’t call all these passengers dumb. They can see through Spirit’s game and still bought tickets because they were cheaper. Sunnykm I see it as the congressman wants us to know exactly how much of the ticket is government fees and taxes. Just like gasoline is now priced with all state and local taxes included we we would be outraged to see a separate calculation from each sale as to the real cost of the fuel verses the taxes paid. We have been deluded to the the high price is all due to oil company gouging wi Hen in fact the taxes and fees are a large part of the problem. Miami510 I have a slightly different, albeit overall, view of this attempt by Congress to override the Transportation Department’s new rule. First, I’d point out the irony that the new bill, which will permit airlines to hide the taxes and surcharges, is called the Travel Transparency Act. Second, I’d like to know what contributions to the campaign coffers of Rep. Ron Paul (R-Tex.) and Rep. Lynn A. Westmoreland (R-Ga.), were made by the airline industry. This is but another example of campaign financing being the root of all evils, where vested interests buy favorable legislation and the public be dammed. Stephen Weihman Sales taxes are easy to calculate on purchases, and the amounts are pretty static. The fees and taxes on airfare are unknowns to most of the buying public. This is similar to the taxes imposed on gasoline. Would you find it acceptable to see a price on the signage and pump of 2.19/gallon, and only after you’ve swiped you card, selected your grade and are ready to pump do you find out with the taxes and fees it’s 4.00/gallon? This is what the airline industry has been allowed to do for years,a and it’s time for them to stop. Give us the price for the ticket – the full price. Break out the fees in the price and list them if you want – they damned well know how to, cause they’ve been doing it for years. For Spirit to say they have to hide the fees is completely bogus. They’ve been hiding them for years, until the end of the purchase process.If the airfare is $150 and the fees are $25, list the airfare as $175 (fare includes required fees of $25). Simple as that. TonyA_says Did you forget to add the fuel surcharge? Here’s how jaunted reported that fare: http://www.jaunted.com/story/2010/4/6/75410/32682/travel/Spirit+Air+Now+Charging+For+Both+Carry-On+and+Checked+Baggage “Penny Plus” sale from Detroit—Las Vegas Ticket: 1 cent Carry-on baggage paid at airport: $45 Fuel: $54.22 Taxes & Fees: $18.70 Total: $117.93 And don’t forget the yearly $60 membership fee for the $9 fare club. Elmo Clarity I agree. They all should, not just airlines. One area that really gets me along this line are some of these mail order places. They advertise the product at a low price with the “plus shipping and handling” and don’t say what that amount is only later to find they want more for shipping/handling than the cost of the item! Snake Mike, there is nothing currently stopping airlines from also showing the breakdown of fare and taxes. If that is truly their concern, there is no need for additional legislation to address – they can do it right now. Snake And not looking is their right – at least they were given correct information about the cost up front. Snake And the airlines could just show the breakout of that fee on the final page prior to booking – you know, where they finally choose to spring it on consumers that they aren’t actually paying the $9 each way that was advertised. Snake Again Tony, the airlines are currently free to show the breakdown that you are requesting. NOTHING IS STOPPING THEM. The only requirement is that they advertise the total price that will be paid – it’s not that onerous bud. Snake If that is what the congressman wants, the current regs allow the airlines to provide this breakdown. Maybe “the market” is just saying that consumers don’t want this level of detail? Snake I think you may have hit it Bill. Unfortunately the airlines, in their infinite greed, decided to push the envelope until they went too far. I always say the reason that we have “too many regs” is because someone, somewhere, chose to try and tow the line and not do the right thing. Most government action isn’t proactive; it’s reactive. Snake Then let the airlines show a breakdown – nothing is stopping them. But they still have to quote the all-in price. Best of both worlds, it would appear. Snake The naming irony has been readily apparent in the Republican controlled house over the past few years. $16635417 True…but it also makes it easier for the government to hide future taxes and increases and it appears, to the average consumer, as just a fare hike by the airlines. (just like gas, very few people know how much of the gallon of gas is tax.) There are other taxes on air travel being considered in DC. $16635417 They are given an incorrect presentation of airfare upfront, they would have to see the breakdown of the total ticket to see the true costs. Extramail Why can’t the rule be that the airline has to disclose the total fare but allow the airlines to show it as a line item charge? Hotels don’t have to list the goal cost of a hotel room stay until after you have booked the room. Our last stay at a hotel was for a quoted fee of 89.99 a night but after every governmental entity and his mother added their taxes our charge per night was 129.99 plus a self-park charge of 25.00 a night (valet parking was 45.00 a night!). It would also be helpful to know how much of the 3.59 a gallon we pay is taxes. Does anybody really know how very much of our money goes to taxes and the like? $16635417 Or..the airline could show the airfare of $9 in your example and then the “sticker shock” would be of the government imposed taxes and fees, just like most other purchases. (As my previous posts indicate, I DO think all mandatory airline fees should be part of their fare quote.) Nancy Dickinson I got caught up in a “shipping and handling” scam with something I ordered online a few months ago. The item was $9.99 and I hit the “buy” button and was then run through a gauntlet of “Here’s another offer we can add on”. I counted 14 of those before I could finally finish the transaction (but in hindsight, I should have just stopped at number 3 of the “but wait, there’s more” things). Somewhere, in all of the “but wait…” screens, I got dinged with $45 in “shipping and handling”. I tried to cancel the purchase but couldn’t do it. Even paying that much in shipping, it took something like 8 weeks to get the item. Nancy Dickinson I’m with you, Raven. I see that sticker on the gas pump every time I get gasoline… What occurs to me, with the “bundling” of the price at the behest of the government, is “hidden” government crap. They can now charge whatever they way in their “taxes” and “fees” and we’ll never know. Given how transparent and informative the Feds can be when it comes to sharing with the voting public, I’m sure nothing could POSSIBLY go wrong with their plan. I never had a problem with air fares not including all the taxes and fees. Whenever I shopped for air fares, I knew there would be more added on at the point of purchase, and it does vary by airline. Flying to Europe on Delta vs. British Airways – BA had a HUGE fuel “tax” added on. Sunnykm I’m afraid that the “market” would. E happy to see just the final fare. But I would like the public to see the fare plus taxes and fees every time time. Each ticket showing just how much the government wants from us in taxes and fees . I really think if our fuel purchases refected the amount owed to the government verses the oil companies the public would have a far better perception of what filling up our cars cost. And also if our payroll taxes weren’t collected each check and we earned the entire amount and had to write a check forthe taxes each quarter we might have a very mindful electorate TonyA_says The airlines have always been free to breakdown taxes. So are gas stations, hotels, car rentals, or any seller. But airlines must display the total price as the (first seen) advertised price whereas most others are not required by law to do that. So why does the gov’t believe we are smart enough to compare prices of other items but too dumb to compare airline fares? Finally, if you are quoted the total price (which is fine) you won’t really bother to ask for a breakdown unless you feel you are being cheated. In some countries that have a VAT, item prices have them already included so you don’t really know or care what the VAT is. When prices increase you don’t suspect it was caused by a tax. You always blame the vendor. So I am skeptical about the real agenda here. We already know the administration’s deficit reduction plan to increase airline fees and to move some of that money to the general fund. It will be easier to disguise these tax increases as fare increases with the current law. TonyA_says Ok which would you rather see: Advertised cost of tickets from New York JFK to Seattle SEA (A) $389.60 -or- (B) Fare:$342.32 Tax:$47.28 Total:$389.60 Advertised cost of tickets from Washington DC (IAD) to Milan, Italy (MXP) (A) $836.30 -or- (B) Fare:$219.00 Tax:$617.30 Total:$836.30 Congressman Graves has a good point because I would rather see (B) since it is more transparent. Like Raven, I would like to know who gets what from the get go. You see in the second example (IAD-MXP) the Tax includes a $476 YQ Surcharge which is really not a tax. That amount goes to the airline, not to the government. If Rep. Grave’s bill will force the airlines to remove any amounts that are not real taxes in the tax section, then the portion of the fare to the total price would be much higher. The truth is out. Look’s like that bill gives us the best of both worlds. You get the total and the fare & tax subtotal breakdowns up front. TonyA_says Who is the “market”? How were millions able to fly without losing their wits before 26JAN12? larry Sorry, but I have flown over 30 segments with Spirit and never ever paid a fuel surcharge. That fee is NOT on EVERY flight. $19.80 was the complete total including about half that went to the Government. A screaming deal from fll to atl. I also do not check bags or use the overhead, or buy water/snacks. You can get around the $9 fare club fee buy having their worthless credit card and using it once per month. Yes, it too has a fee, but so do all other airline cc’s. Spirit is what it is. I expect nothing other than a cheap tight seat and arriving safely. Anything above that is viewed as gift. larry Well, I do have authentic autographs of the Curly, Larry and Moe, which by the way are worth more than the 5 Presidents signatures combined that I have. Spirit is a different animal and what I have found by talking to folks next to me on their flights is either you love’em or you hate’em. A terrible airline for business travelers or someone who HAS to make it on time, since they don’t interline. After over 30 segments, what it looks like is folks on the low end of income earners or people like me who have extremely flexible schedules and just follow the deals. I recently flew to Guatemala with a friend who is worth about 5-7 million dollars. It was his first flight on Spirit. When he got off the plane, he said “man, I feel like I need to take a shower” if you get my drift. IGoEverywhere The cheapie airlines that we love to hate, love to deceive. Buy cheap, travel cheap, get ripped off cheap. Steve_in_WI You know, I’m actually torn about this. On one hand, I agree that consumers should have the highest level of transparency possible when shopping for airfares (or anything). When the original bill was being discussed, though, I didn’t really see the need for it because when I shopped for fares, I could always see the full price including taxes before I made my purchase, which is all that really matters to me. I understand why some people would not want to wait until the end of the transaction to see the taxes included, but philosophically, how is that any different from your experience when you go to a retail store? The price tag on the item doesn’t include sales tax, and you don’t see that amount until you go to the register to pay. I do agree that airlines should be required to include all of *their* mandatory fees in the advertised price – they shouldn’t be able to hide things like fuel surcharges until you’re ready to click Buy. But I think it is reasonable to ask why they should have to include taxes and fees imposed by the government in their quoted price when the vast majority of other businesses don’t have to do that. If car dealerships can advertise a price that doesn’t include sales tax and documentation fees, and if hotels can advertise room rates that don’t include what is often a very high tax rate, and so on, why should airlines be any different from them. All that said, I agree that for all of the rhetoric being thrown around, this is about Congressmen being pressured by lobbyists. I don’t believe for a second that they’re truly concerned about consumers here. Steve_in_WI I see your point, but gasoline is by far the exception to the rule. Almost every other type of purchase I can think of does not include government-imposed taxes and fees in the advertised price, and in general people seem to be fine with that. To me the distinction is between fees that the airline charges and taxes/fees that the government charges. I wholeheartedly agree that the airlines should have to include any of *their* fees in the total from the very start of the purchase process; I’m less convinced that they should be required to include the government’s fees in the same manner. (And if they should, why should other retailers not be required to do the same?) Dave Lieberman I bought a ticket on JetBlue today from JFK to California. The quoted price was $198.80 and the amount that went through my credit card was $198.80. Imagine that. Now if only the all-in price were required for everything. Dave Lieberman Gasoline stations and auto repair shops are required to quote all-in prices. The business about “now the government can increase taxes all they want since it’s hidden” is bogus; they could do it before. Before, they could have done it and there’d just have been a nastier surprise at check-out time. Dave Lieberman So you’re saying that airlines don’t have IT teams that could put a banner on the front pages of their websites decrying the increase in taxes and claiming their innocence? Funny, the last time the required governmental fees increased (the post-9/11 security fund), I seem to remember airline price hikes going right along with it, presumably on the idea that people were going to be paying different amounts anyway. Dave Lieberman At least where I live, the government tax on gasoline pays for improvements to the road infrastructure. Dave Lieberman I’m sure someone at the airlines is paying attention to the government fees and taxation and could make a stink about it on the airlines’ website (“AIRLINE TAXES TO GO UP, IMPACT FARES STARTING MOCKUARY 32ND” or whatever), but instead they’d rather just pretend they’re the victims here. The $9 Vegas fare (or £0.99 fare to Glasgow or whatever) is deceitful advertising. All they had to do was stop doing that and the DOT might have called off the dogs… but no, poor ickle airlines at the hands of the big bad government. Dave Lieberman In the case of tobacco and alcohol, in order to make the price seem inflated in order to discourage purchases. (As you can see, this works well…) Dave Lieberman Because the DOT doesn’t have authority over car rentals and hotels, otherwise they probably would. Dave Lieberman The federal gasoline tax has been at 18.3¢ per gallon or 18.4¢ per gallon (for standard fuel) since 1993. If your state is raising its fuel tax, that’s not the federal Department of Transportation’s problem. Sunnykm In California, we pay state fuel taxes at over .50 per gallon plus Federal. Imagine printing out a receipt for a fill up and seeing that $10+ of the $50 purchase is in taxes. The point is we are seeing a total in the final amount and have become immune to the exorbitant amount of money we pay in taxes at the pump. I would like to see every airline ticket price include a breakout of the dollars in fees and taxes. I don’t want the taxes hidden. Snake All most consumers, including myself, care about is A. I raise you one though, bud…let’s include a hypothetical option (C) for your first example. (C) CEO salary:$200.00 Equipment cost:$50.00 Engine Maintenance:$25.00 Litigation expense:$49.32 Pilot wages:$10.00 Hostess wages:$7.00 Soda cost:$1.00 Tax:$47.28 Total:$389.60 As everyone keeps pointing out – THE AIRLINES ARE ALREADY ALLOWED TO PROVIDE WHATEVER LEVEL OF DETAIL ABOVE AND BEYOND THEIR TOTAL COST THAT THEY CHOOSE. No legislation is required to make this happen. The “transparency” label is just a ruse to make it appealing to the masses that half the time have no clue what is actually in legislation. If your true concern is “transparency” then take your argument to the airlines – the DOT doesn’t need to get involved here. But, transparency isn’t your real goal now, is it… Snake *THE TOTAL PRICE, not THEIR TOTAL COST TonyA_says Airlines have always been allowed to print TOTAL PRICE also. Some did. Most didn’t. Most separated taxes since this new rule came into effect. The ruse I am worried about is the government sneaking in more taxes [without people noticing it]. So what is your real goal? Jaime A difference here is that with standard goods, you mostly know what the tax is going to be (it varies depending on the type of goods and the state, but odds are you’ll be paying 0 to 10%). For airfare, you have no idea what it’s going to be. I routinely got emails from Travelocity telling me I could fly to London for $300, and the taxes would be double that – ie, $600, bringing the total to $900. I don’t care if the taxes are listed separately from the fare (and actually prefer this), but given the huge disparity in pricing, the final total needs to be given up front, not at the end of the transaction. Snake My real goal is the see the actual price I’ll end up paying, not some insanely low “base fare” along with an asterisk and a bunch of funny airline fees – i.e., a fuel surcharge, that are then added to this deceptively low advertisement. Mandatory surcharges should be included in the quoted/advertised price, no if’s, and’s, or but’s about it. But since the airlines have already shown they can’t be trusted to do this, they’ve lost all wiggle room and must show the full fare (including taxes) – the authors of the bill likely knew that any exemptions to the full fare rule would simply encourage the airlines to try and exploit the loophole once again. Keep in mind, government tends to be REactive, not PROactive – until someone/something screws up big and often, they don’t typically get involved. If you are so concerned with these “hidden” tax increases, take your case to the individual airlines and ask them to provide a full fare breakdown during purchase – if you’re right about this government “intrusion”, I have no doubt they will jump at the chance to show everyone how the big evil government is oppressing them via onerous taxation. And best of all…NO NEW LEGISLATION IS REQUIRED. They can do exactly what you’re requesting RIGHT NOW, with no new government regulations/meddling (depending on your point of view) required. It’s a WIN/WIN situation for EVERYONE! bodega3 Not sure what you mean by up front but until you pick the flights, the total cost can’t be calculated. bodega3 I guess you don’t know that TonyA is a travel consultant who has access to the best air booking tool, the GDS. All this is easily available when the actual flights are picked. bodega3 How do they advertise the total cost when the flight segments are unknown? The total price can vary depending on nonstop vs connecting flights. TonyA_says They have to do this on a per flight advertised price. They cannot just say JFK to LAX for example since that is too broad. You and I who sell tickets day in day out know this is bizarre. All our customers knew their total ticket price before 26JAN12. What a waste of time and money. Snake I suppose it depends on your advertising medium. Online, they CAN advertise on a specific flight and know the segments. Via print or email, they can use the same tactic they currently do – “As low as $XXX from LAX to JFK”, for example. But now XXX has to be the total cost, not “$1*” *doe not include government taxes, fuel surcharge, takeoff and landing fees, seatbelt inspection fee, maintenance cost, pilot’s salaries, etc. The average person doesn’t care how the ticket cost is allocated – they just care what it is. And as I’ve said before, if the airlines hadn’t been so abusive in trying to hide the price, such as with the fuel surcharge, I probably would agree with you guys about whether the taxes should be required. But unfortunately, the airlines have shown they can’t be trusted to do the reasonable and right thing, and therefore no long deserve the luxury of thinking for themselves. Snake Great for him…but not so for the rest of us. Snake Isn’t mandating your preference as opposed to the preference of “the market” a direct contradiction of market principles? Snake They could…but why have sticker shock anywhere? Snake False – they are finally being given a correct total price up front, without any of the airline’s high-jinx at trying to hide the cost. The airline is welcome to provide the breakdown of taxes and fees at any point in the process, as long as they’re also prominently displaying the total cost. bodega3 I don’t know why. I guess those who can’t figure it out should use a professional. bodega3 Define up front? At the start of the booking process? bodega3 The average person needs to pay attention to more than just the price. The advertising medium doesn’t matter. The law applies to all advertising. TonyA_says The sample you just gave (w/o fuel surcharge) was DECEPTIVE even before 26JAN12. Prior to 26JAN12 Airlines could only legally “exclude” taxes [and airport fees] in their advertised fares. Now they have to include all taxes in their advertised fares. But this is so ridiculous since airlines are still allowed to advertise 1/2 of the total fare and indicate based on roundtrip ticket. So you need to multiply the “so-called” total fare by 2 to get the “real” total fare. Most of my customers are penny-pinchers and I suppose a lot of Americans are. They understood how to compare fares. The old law was just fine. Lindabator And that’s why, as a travel agent, when a client would call for a price, and we ACTUALLY quoted the real one (all taxes and fees included), they would go online instead – only to discover the fare was the same – that was the reason the airlines wnet to online sites – to make their fares look like such a bargain – even though they weren’t! Lindabator But they always HAVE done so — this is just double speak to get around the consumer protections yet again. Just give the total price, and then a break down of how it got there. SIMPLE. Lindabator Of course you still kept hearing the stories of idjots :) – like the one who supposedly stayed 8 days in an airport because she didn’t know about the baggage fees. ’cause heaven forbid, someone whould actually READ the information. Lindabator But the airlines don’t HAVE to bury them – they are CLEARLY evident when you get a ticket NOW – so why not show a full price, and how it breaks down? This is a dumb-a@@ move by the Republicans to allow the airlines to continue with their bonehead pricing scams – too bad folks are drinking the Kool-Aid! Lindabator But they could stipulate a specific nonstop or single connection flight as a basic starting point, and stipulate that additional stops may incur additional costs. They are MORE concerned with those truly deceptive $9 fares, or when they advertise the 1-2 seats still left. Lindabator But you could ALWAYS see the total tax breakdown on the final document anyway, so the taxes never WERE hidden! This is just more BS to give the airlines even more time to give misleading fares to the general public. Lindabator That is true – but does NOT help the consumer when shopping online. Lindabator Although I would agree (I am a travel agent, after all), i know some people won’t. So they should have the same access to full disclosure we have. That’s only fair, after all. TonyA_says Linda, all these hoopla is about the so-called advertised price. So today the advertised priced should be ONLY the total price (everything included). Before 26JAN, the airlines had to advertise everything except taxes (if they wanted to leave them out). IMO before 26JAN, the airline shenanigans were already curtailed. Even if they left out taxes (they still had to note taxes not included). And, they could not not include the YR/YQ surcharges in the taxes that they did not include up front. So the only thing that they could keep quiet about in their advertisements were money that actually went to the government. Of course for TAs this didn’t matter since we gave our clients the whole picture from the get go – the GDS gave us everything. All I’m saying is that the old rules weren’t that deceitful as they sound. johnitis This is so duplicitous and disingenuous that it could only come from a republican, southern politician. Claiming it is for the benefit of consumers, they would rather divert our attention with anti-tax rhetoric, while they get fatter from cronyism, airports fall down, and untrained contracted individuals operate the tower. It really ticks me off when politicians think we are as stupid as they are.