How airlines plan to have their way with fare disclosure

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The U.S. House of Representatives’ suspension calendar is an unlikely ground zero for a midsummer battle over airline ticket advertising. But then, almost nothing about the oddly named Transparent Airfares Act, a bill championed by the domestic airline industry, has followed a likely trajectory.

The proposed law would allow airlines to quote a fare that excludes taxes and fees, revealing a grand total only immediately before your purchase. Consumer advocates are dead set against the legislation, saying that it would grant airlines a license to promote misleadingly low prices.

But mostly, they’re baffled by the legislative maneuvering that could lead to the bill’s eventual passage.

At every step of the way, they say, airlines and their congressional allies have subverted parliamentary procedure to pass the Transparent Airfares Act, first through committee and now through Congress, where the bill is widely expected to be added to the suspension calendar. This is a docket normally reserved for noncontroversial legislation with bipartisan support. Although the outcome of this latest chapter is far from certain, it has raised questions about what the airline industry really wants, and what it means to you.

If the bill is added to the suspension calendar, then it’s just a motion or two away from becoming law. It could then be attached to a broader, must-pass aviation reauthorization bill next year and cleared by the Senate to be on the books.

“This bill is anything but noncontroversial,” says Eben Peck, a spokesman for the American Society of Travel Agents, which opposes the bill. “Taking it up on the suspension calendar is inappropriate.”

The airline industry disagrees, correctly noting that the bill has some bipartisan support. What’s more, its benefits are obvious, the industry claims.

“With the latest government tax hike going into effect this month, 21 percent of the price of a typical airline ticket will be made up of government-mandated taxes and fees,” says Victoria Day, a spokeswoman for Airlines for America, which represents domestic airlines. “If the administration gets its way in its proposed budget, that percentage would soar even higher, to 26 percent.”

The Transportation Department’s “full fare” advertising rule, which the new law would undo, requires airlines to “hide” taxes in the price of a ticket, she says. But if the bill passes, it would allow consumers to know how much they’re paying in taxes.

“It will help protect consumers from a government that looks to tax air travelers every time it needs revenue,” Day says.

Some passengers are skeptical. They’ve been burned by too many airline fees and broken promises to believe that this bill will benefit them, and they sense that the airline industry has ulterior motives. “Whatever the airlines do is bound to be deceptive,” says Carl Kaiser, a retired music professor from Grand Rapids, Mich.

Consumer groups agree, noting that there’s nothing in the current regulations that stops an airline from disclosing taxes. “This bill is a disaster,” says Sally Greenberg, executive director of the National Consumers League. “It’s being railroaded through Congress, consumers be damned. ”

That sentiment is reflected in an online petition sponsored by Travelers United through Change.org, which has called on Congress to stop efforts to “effectively legalize bait-and-switch airline pricing.” That petition has collected more than 125,000 signatures. (Full disclosure: I co-founded Travelers United but am no longer actively involved with the organization.)

Trade groups representing travel agents and online travel agencies are also united against the bill. Philip Minardi, a spokesman for Travel Tech, which represents online agencies such as Expedia, Orbitz and Priceline, suggests that the bill could do the exact opposite of what it claims. Rather than transparently showing the full cost of a ticket, it could render the actual fare opaque and difficult to determine until you reach the final booking screen.

“We believe consumers deserve transparent access to the all-in cost of airfare, including taxes and fees, so they can make true comparisons between travel options,” he says.

It seems strange that a bill like this would be bulldozed through Congress without any meaningful debate. But advocates point to a trail of airline donations to the campaigns of key members of the House Transportation Committee as a possible reason for why it may be. Although that would be perfectly legal, cutting off debate on the law is wrong, says Paul Hudson, president of FlyersRights.org. “Members who then seek to shut out public input for controversial anti-consumer legislation have crossed an ethical, if not a legal, line,” he says.

The airline industry may indeed have a point about high taxes. But observers suspect that even if you removed government levies from the equation, airlines would still be pursuing this bill with the same determination.

They point to a clause deep within the bill that defines a base airfare as “the cost of passenger air transportation, excluding government-imposed taxes and fees.” As written, the bill could allow an airline to define anything it wants to as a “fee,” and nothing would stop it from quoting a $1 fare with an asterisk.

In other words, airlines are asking for the right thing — to reveal their high tax burden — for all the wrong reasons.

But airlines say that their cause is right and that their methods are justified. They’ve set up a Web site, airfaretransparency.com, to convince their customers that exposing taxes is the right way to rein them in. Consumer groups have urged their constituents to contact their representatives directly and ask that the bill be kept off the calendar. You can find out more on their position at the Business Travel Coalition’s Web site, www.businesstravelcoalition.com .

As of Thursday, when this story closed, the Transparent Airfares Act wasn’t yet on the suspension calendar. The bill’s supporters have another week to pass the law before Congress goes into recess.

Should the Airfare Transparency Act be added to the suspension calendar?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at . Got a question or comment? You can post it on the new forum.

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  • Bill___A

    I don’t know what all of this talk about disclosure is all about. I recall a couple of years ago, the airlines started showing all of their fees in the fare quote. I agree that it is deceptive for a travel agency to advertise “London $600″ when it is really $1200 with fuel surcharges, etc. and this should be stopped. However, when I go onto an airline website, or expedia, I do see exactly what the total is.

    Hiding things like resort fees at hotels and fuel surcharges should definitely be illegal. I think the issue right now is less than it was.

  • PsyGuy

    Why do we believe we can trust an airline to do anything?

  • Cybrsk8r

    “The Transportation Department’s “full fare” advertising rule, which the new law would undo, requires airlines to “hide” taxes in the price of a ticket, she says.”

    VIctoria Day is a liar. Airlines are NOT required to “hide” taxes. They’re only required to quote the full fare, including taxes during a fare search. Nothing prevents the airline from breaking out and itemizing the fees and taxes. So quoting a fare as a $400 base fare + $45 in taxes and fees = $445 is totally legal.

  • TonyA_says

    You see airlines and politicians are like hackers, too. They use every trick on the book to get their objective. Now you know why passengers do the same.

  • frostysnowman

    This is one of the most pro-business Congresses we’ve ever had the pleasure of dealing with. Why is anyone surprised at their maneuvering to help the airlines get this passed?

  • jim6555

    I have just written a letter to my Congressional Representative urging her to vote NO when the “Transparent Airfares Act” comes before the House. You can do the same. Just go to http://www.house.gov, click on REPRESENTATIVES and enter your zip code. You will be transferred to your Congressperson’s home page and there will be a link there to leave email messages. Doing this is fast, easy and an effective way to let hopefully persuade your Congressperson that there are constituents who are passionate about seeing this anti-consumer bill go down to defeat.

  • bodega3

    IMHO there are more pressing issues that Washington should be working on than this.

  • TonyA_says

    The most pressing issue for them is to get re-elected. And, they need a lot of money for their campaign. So the most pressing issue to raise campaign money. What else can it be?

  • Miami510

    I don’t like the vague reference to “But advocates point to a trail of airline donations to the campaigns of key members of the House Transportation Committee as a possible reason for why it may be(passed).”

    Why not name the names and the amounts. I always enjoyed the suggestion that, like
    race car drivers, members of congress should be required to wear corporate
    patches prominently displayed on their jackets of those corporations who donate
    campaign funds.

    Observation: I’m glad to see that some members of congress are reading this Website… after all, to whom else could the three “yes” votes belong? :)

  • LFH0

    There are two main reasons why passengers should want to know what the complete fare is early in the process. First, to have a general sense of whether or not the passenger can afford the fare. Second, to be able to engage in comparison shopping.

    Government-imposed taxes are imposed uniformly such that their consistent inclusion or exclusion from advertised fares would allow for effective comparisons between carriers. And while those taxes have increased substantially over the years, in general I don’t think those taxes affect the affordability question that much (consider, when looking at items in a store, is the price tag without tax sufficient to make a decision on affordability?).

    It is the airline-imposed “fees” that are the real issue. They are not uniform, base fares cannot be effectively compared in the absence of their inclusion, and in some cases are so steep that the fees can double an advertised base fare.

    Advertised air fares ought to be inclusive of mandatory airline-imposed fees. Advertised air fares should probably include government-imposed taxes, but this is not as important as inclusion of mandatory airline-imposed fees.

  • Jeanne_in_NE

    +1. Name the names, Christopher Elliott, and list the amounts. Or point me/us to where I/we can find them.

  • Jeanne_in_NE

    List of House members of the Aviation subcommittee of the Transportation Committee: http://transportation dot house dot gov/subcommittees/subcommittee/?ID=107417

  • http://elliott.org Christopher Elliott
  • Jeanne_in_NE

    Busy on www dot fec dot gov, going one at a time through the list of members of that subcommittee. Yours is faster, but I did find that Frank LoBiondo, chairman of that committee, has $5K from United Airlines employees, including some joker named Jeff Smisek for $2K. That’s only a couple of minutes of playing, and easily recognized individual giving. Hmmm . . . . calling Raven, calling Raven!

  • Jeanne_in_NE

    Same source as before, but going through the “Other Committees Contributions” – thousands and thousands of dollars coming from airline PACs to LoBiondo’s re-election campaign. Your source really doesn’t do the extent of the problem justice. I’m with @Miami510:disqus – those folks in Congress really should wear jackets or something with all their sponsors’ names on them.

  • AJPeabody

    If you can’t buy it for the advertised price, it’s a lie. If an airline advertises a flight (and an on line price quote counts), the price should be what you have to pay, no more, no less. The same for a hotel room, or a quart of milk, or a sport shirt. Sales tax is uniform, resort fees, fuel surcharges, etc. are not.

  • Miami510

    Open Secrets is a wonderful site. Thanks Chris.

    The separate accounting of donations for individuals and
    corporations is an anachronism since our SCOTUS had endowed corporations with the rights of individuals in Citizens United vs FEC and Burwell vs Hobby Lobby. Four out of five of the biggest
    recipients are Republicans: Schuster, Boehner, Cantor and McConnell.

  • bodega3

    Sad isn’t it that is all they work on is protecting their job for the next election while the country falls apart :-(

  • bodega3

    I find the whine about fares to be interesting. You know that there are taxes and fees, and you get the price quoted when you book the flights you want, so what is the issue? Having sold airline tickets for 3 decades, I honestly don’t get the beef. Final pricing is based on the flights you choose,

  • http://elliott.org Christopher Elliott

    Excellent sleuthing.

  • MarkKelling

    OK, as a Travel Agent when you provide a price to your customers do you give them a base fare and then when they say “great job” come back with a new price that includes all the taxes, fees and other additional amounts? I don’t think so. You provide the complete and total price otherwise you will have lots of confused clients who will probably become former clients.

    Wanting a complete price shown by the airline when they advertise is no different. At least to me.

  • bodega3

    Yes, the complete price is what I quote, just like the airlines do when you choose the flights that you wish to price. No different. The only difference in what you see online and what I see, is that I see the base price and the class of service needed to get the lowest price, if available and the flights I am searching for. I honestly don’t see the beef and I am not trying to be difficult on this. Newbies to booking air online might get confused but it isn’t rocket science to book an airline ticket. When you say ‘advertised’, the only way you can get a true price quote in an add, is to quote nonstop flights.

  • Bryce Griffler

    Right NOW you see what the “total” is. They’re pushing to switch back to the “old” ways when they DIDN’T have to show you the “true” total. They’re literally advocating to revert back to past policies. EDIT: as Cybrsk8r mentions below, the new law would “undo” the Transportation Department’s “full fare” advertising rule which was implemented a few years back.

  • Bill___A

    Thank you for the clarification, Bryce. That’s just not good at all.

  • Bryce Griffler

    I just voted too. Thanks!

  • BMG4ME

    I agree, this would be a true step backwards.