The truth about “hidden” airline fees By Christopher Elliott | May 1, 2011 Just how hidden are the travel industry’s so-called hidden fees? Fair question, given that the Transportation Department just weighed in on the topic. In late April, the agency issued a final ruling affecting how airfares are advertised and displayed. The move could have a ripple effect across the entire travel industry. Are fees completely concealed, such as the $25 “early check-in” fee Julie Sturgeon had to pay recently when she arrived at an Ocala, Fla., hotel? “No mention of the charge on the hotel’s site,” says Sturgeon, an Indianapolis-based travel agent. “When I checked in, the receptionist just said it was hotel policy.” Or are they only partially hidden, such as the one Karen Kinnane had to shell out when she scored an upgrade to first class on her flight from Paris to Newark last month? “When I checked my luggage at the counter, Continental whacked me for 30 euros for a fee to leave Paris by first class,” says Kinnane, a Shartlesville, Pa., antiques dealer. “It’s a French government tax. Didn’t see that one coming.” The answer matters. According to the latest DOT ruling, airline Web sites must “prominently disclose” information on all optional service fees starting in August. Airlines will also have to include all government taxes and fees in every advertised price. But the government isn’t done addressing fees. It has promised a supplemental ruling later this year that could require, among other things, that fees be displayed at all points of sale. Victoria Day, a spokeswoman for the Air Transport Association, an industry trade group, said that airlines are “committed to being fully transparent” and that carriers want their customers to know exactly what they’re buying. Talk with airline passengers, and you’re left with a different impression. Trying to find a flight from Washington to Marseille, France, on the United Airlines site, Barbara Kreykenbohm of Falls Church, Va., was quoted a fare of $827. But on the final booking screen, the price had jumped to $942, including numerous taxes and government fees. I asked United about the price jump. “Just like retailers and merchants across industries, we show customers a base price and a final price, which includes taxes and charges, enabling them to see clearly how much of their ticket price is paid to governmental entities,” said Charles Hobart, an airline spokesman. “At any time during the booking path, customers may click for details on the total cost of the ticket.” Under the new rules, United will have to quote a single price that includes taxes and charges. Jim Davidson, chief executive of the travel technology company Farelogix and one of the most outspoken opponents of the new disclosure rules, says that regulations are unnecessary. “I’m convinced that innovation, consumer demand and market forces are already in play to address matters of fee disclosure,” he told me. “The only real risk is the concept of legislating how airlines must sell their products and how consumers must buy them.” I feel conflicted by what’s happening. As a consumer advocate, I think passengers are entitled to know the true cost of their air transportation as soon as possible. But if other industries, from auto manufacturers to restaurants, may quote a pretax price, then it doesn’t seem fair for the government to single out airlines. I also wonder whether these “hidden” fees were all that hidden in the first place. To find out, I clicked on the American Airlines site, AA.com, to get a price for a round-trip ticket from Orlando to Dallas in two weeks. The least expensive available flight in the “Economy Super Saver” category cost $312, but it wasn’t immediately clear whether that was one-way or round-trip. Moving to the next screen, I found options for my return flight: The least expensive was $835. Ouch. The third screen generated a subtotal — $1,148 — and then added taxes for a grand total of $1,179. The final screen offered travel insurance and a branded credit card but only hinted that checked-baggage fees “may” apply. Only by opening a pop-up window did I learn that I would have to fork over $25 each way for the first checked bag and $35 each way for the second. There’s no way to automatically factor that into the price of the ticket for an inclusive fare. If I want to buy something else, such as a meal, there’s no place on the booking screen for that, either. Most airline passengers I speak with feel that a ticket price should include a few basic items, such as checking at least one bag and reserving a seat. But increasingly, airlines are separating those items from the base fare. The new fares look lower, but they’re not. Once you add up all the extras, you’re probably paying more than you did when the prices were bundled. But are these fees “hidden” from passengers? Strictly speaking, no. They’re hard to find — maddeningly so. Impossible, if you’re booking through a travel agency. They’ll still be hard to find under the new rules, although carriers won’t be able to make their tickets look cheaper by stripping away fees and taxes. There’s no question that the airline industry is profiting from the resulting confusion. But no, they’re not hidden. Still, that doesn’t make the current system right, and it doesn’t make the new way much better. Airlines have some of the most sophisticated reservations systems, particularly American Airlines, which has rolled out new technology called Direct Connect. If they’re committed to transparency, then why can’t they show us a price right now that includes everything? The way this plays out could affect other parts of the travel industry. If regulation fails — if, for example, the DOT rules that the new Web site disclosures are sufficient — then I expect to hear more from hotel guests like Sturgeon, who feel ambushed by a surcharge. Like it or not, the rest of the travel industry takes its cues from airlines. The new regulations are a step in the right direction, but you’d better have your calculator ready the next time you book a flight. You’ll still need it. 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 the new forum.More Posts - Website - Twitter - Facebook - LinkedIn - Google Plus simonhb If a fee is tucked away in a pop-up window – when there’s no reason that it needs to be – then it’s hidden. Deliberate un-usability. FLYER The only part of me that’s OK with this is the notion that unlike regular land-based purchases, an airline tickets taxes are set at federal level so it doesn’t matter if you conduct the order in a high sales tax state like CA or a lower one like Oregon… since *local* sales taxes don’t come into play… Yes, there are some local charges like PFC charges that can vary, but again, the price you pay for the PFC at airport X will be same regardless of where you happen to buy the ticket that involves travel to/from/via airport X. To me, so long as EVERYONE shows the total fare then I’m OK.. what I think would be unjust, is to allow carrier X to show a pre-tax fare and carrier Y show a post-tax fare since we all know that most air fare searches are driven FIRST and foremost by PRICE.. so by allowing carrier x to show a pre-tax price would effectively be penalized carrier Y for showing a nett fare and not a pre-tax fare.. I think whatever it’s going to be, that the playing filed needs to be level in that regard. DavidS With all the talk over the past few years about airline hidden fees…why are these still “hidden” fees? I expect to pay for a bag, better seat, drinks and snacks, etc. I find more surprise fees renting a car and checking into a hotel than I do purchasing an airline ticket. I once had to pay an additional fee ($5) to a hotel at check in because I used Hotwire! I often find I’m hit with a “resort fee” when staying at hotels that are geared toward business travelers. (Always wonder why more expensive hotels tend to charge for internet access, but lower categories don’t…but I digress.) Let’s not even talk about car rentals, recently was hit with a “fuel adjustment charge” because it was determined that I did NOT return a car with a full tank of gas, even though the return agent marked it full. I was also charged an inflated per gallon price on top of that. (I filled up just before returning, fought this and had it removed.) I would prefer to be quoted the ticket price and taxes seperately as well. Talk about lack of transparency, by forcing the airline to include taxes and govt fees in the quote, we have no idea how much they are really taking unless we really go the extra step. I guess the govt likes it that way! Zeke Kersey “Victoria Day, a spokeswoman for the Air Transport Association, an industry trade group, said that airlines are ‘committed to being fully transparent’ and that carriers want their customers to know exactly what they’re buying.” LOL!! It’s MAY 1st, not April 1st, Ms. Day! Carver As I was reading Chris; commentary about the AA website I realized that it reminded of ordering a pizza online. By definition, there are many options. The problems comes when different folks have different expectations. Chris considers checked luggage to be a minimum requirement. I must disagree. I, a large man, am able to travel for at weekend, using just a carryon. Therefore, I cannot consider checked bags mandatory. Besides, ever beent o Europe. Mark K All I want when I see an air fare price quoted is to know that it is the absolute minimum I have to pay to buy that flight. Checked bags, meals, or whatever are not really required in order to get on the plane. I can choose to not check a bag or buy the on plane food or entertainment. Taxes, fuel surcharges and other fees like those are not optional and should be included in the price shown. Airlines used to quote prices on their web sites that included taxes and mandatory fees. About the time they all started charging for bags and other options the initially displayed fares lost the taxes and fees. The only reason the airlines did this was so that the fares appeared to be lower although many claimed it was just too difficult to include taxes which makes no sense since they have to include them when you pay for the ticket. The most annoying fee I ever experienced was when I booked a hotel room in Hawaii that included a “FREE” rental car and claimed “all fees taxes and other charges included” only to find I would get charged $45 a day extra for parking the car at the hotel! And since the car was included in the package I had to pay the parking even if I didn’t park in the hotel garage. I could have rented the same car from the same company for only $25 a day (including all fees and taxes) and then parked it in a nearby garage for $10 a day and I could have gotten a slightly lower hotel rate on top of it by not including the car in the hotel package. cjr001 Other industries like restaurants haven’t broken out everything into a ton of ancillary fees. When I see something as $9.99 on the menu, I know it will be $9.99 and the only thing is any local/state taxes. But since the airline industry has chosen break everything out, they deserve the criticism. Your $299 plane ticket isn’t the final price minus local/state taxes, it’s $299 plus who knows how many other fees and then taxes. http://www.santafecheapskate.wordpress.com ChelseaGirl98 I wouldn’t pay $25 to check into a hotel early. But 30 euros to upgrade to first class on a flight is actually a good deal; I’d pay it. I rarely defend the airlines, but I fly American regularly and I always thought they did a decent job of disclosing the taxes. When you click on the flights you want with the fares displayed, it does say taxes and fees apply, so you already know the total fare will be higher before you go to the next screen. Although you don’t know exactly what it is, it’s just one additional click to find out, so it really can’t be called hidden. And we already know that almost all airlines are charging for bag check, so that’s no surprise either. I think the fees are more “hidden” in hotels–resort fees are often not disclosed when you book, for instance. Dave What REALLY bothers me are the mandatory “resort fees”. In particular the third-party agents, such as Travelocity, where it is impossible to see the fees. It should absolutely be the law that all ‘mandatory’ fees be included in the room/ticket price. No exceptions. MeanMeosh Frankly, Chris, I’m not going to be too happy if the flyer rights-types succeed in getting the DOT to mandate that I must look at a fare quote that includes a checked bag fee, or worse, mandate that fares include one bag, thus forcing everyone to pay an extra $25 regardless of preference (for the record, I avoided checking bags even before fees, number one because it takes forever to get them at my home airport, and number two because the airlines are so good at losing them). But, your point on transparency is duly noted. Personally, I think this can be solved by providing a menu-type system where you input which extras you want before the search returns a fare, this ensuring that the display includes whatever extras you desire. I’m also surprised you didn’t bring up the most insidious, evil hidden fee of all – the mandatory “resort fee” that too many hotels are charging these days. THAT is one fee I think should either be made optional, outlawed entirely, or hotels should be forced to include the fee AND associated taxes on top of the fee in the rate returned in the display. http://elliott.org Christopher Elliott @Mean, I think the best solution would be to offer the option of checking a bag and the getting a fare quote that includes that fee. If you don’t want to check a bag, then just don’t click the button. Re: resort fees. That’s a whole ‘nother column. One of my top annoyances, too. Eric Since the vast majority of people travel with luggage, baggage fees are kind of like ordering a coke at McDonalds and then having the cashier ask you for a 25 cent “cup fee”. Sure, you could avoid it, but about the only way to do so would be to stick your head under the soda fountain. The airlines should be required to make paying baggage fees, seat selection fees, etc. part of the booking process. To spur people to make these choices during the booking process, I would allow airlines to charge slightly higher prices when these extras are added within, say, 48 hours of departure. Bill By now, most of us know about the fees and what they are. I don’t like them, but I’m not surprised by them. Arizona Road Warrior I have been traveling on a regular basis since the 90’s and I can carry a week worth of clothes (business casual – three pants; six shirts, etc.) in my carry-on luggage. If I have to check luggage, it is not an issue since I have elite status with US Airways and the Star Alliance. Even if I had to pay a fee to check luggage (i.e. airline outside of the Star Alliance), I am not surprise since fees to check luggage has been out there for years. Mark K I agree completely that the paying for all of the fees for baggage, seat, entertainment and maybe even the meal should be allowed at booking time. It would simplify things later at check in time. However, I have to disagree with your Mcdonald’s example. I would think it would be more like ordering a value meal and still having to pay extra for the fried pie. It is available, but not everyone wants one, so it is not part of the normal value meal package. You have to pay extra when you want one because why would you want to pay for a fried pie if you don’t want one? Oh, and I have seen people at some fast food restaurants stick their head under the soda fountain because they didn’t think they needed to pay for a drink. But that is a topic for a entirely different discussion. Mark K I agree with you on the baggage fee. I too am fairly large but manage to go on two-week vacations with only a carry on. Even on business trips of 3 – 4 days where I have to have suits I can get buy with a single large carry on. And I do understand that some people have special needs which require them to carry more luggage even on short trips, so I guess there will be difficulty on reaching agreement with everyone on this topic. Crissy I like all the fees that everyone MUST pay – like taxes included in the price they show me. Some show what the airline is charging for the ticket, which is nice because then you can see how much the governments are taking (the fees on international travel are very high compared to domestic travel) – showing that break down helps put the price in perspective. Other fees – baggage, seat selection, etc should then be prominentaly displayed, no hiding behind a pop up. Obviously they can’t put all the small print right there, but a note that there is a $25 fee for checked baggage, then maybe a link to a page that clearly states the terms of that. Really, is that so hard??? Why do I have to search all over the internet for the fee and the terms? Steve The vast majority of people travel with luggage, yes. That’s why I think Spirit’s policy of charging for carry-ons *and* checked baggage is unconscionable, since virtually no one boards a plane with zero luggage. I disagree with the assertion that the “vast majority” of people check bags. Personally, on all of the flights I’ve taken, I’ve checked bags less than half of the time…and I’ve never checked a bag when I was traveling on business. My experience with co-workers, some of whom travel a lot more than I do, indicates that it’s uncommon for business travelers to check bags, assuming their trip isn’t longer than a few days. You can definitely fit several days worth of clothing into a carry-on, and since you’re allowed a carry-on sized suitcase plus a purse/briefcase/laptop bag, the only way I’d say checking a bag or two is a necessity is if you’re traveling for more than a few days or are bringing a lot of stuff to your destination. Rock Crusher “I feel conflicted by what’s happening. As a consumer advocate, I think passengers are entitled to know the true cost of their air transportation as soon as possible. But if other industries, from auto manufacturers to restaurants, may quote a pretax price, then it doesn’t seem fair for the government to single out airlines.” I’m not sold on that argument. If we see a price advertised on TV or in a newspaper for something at the store, we can be reasonably close in guessing what the final price will be because we know approximately what the sales tax rate is. We don’t seem to have a clear, reasonably close way to determine what travel taxes will be. Travel taxes should be included in the posted price. It also wouldn’t be that hard to include an option for luggage in the final price. They could have a dropdown bar for the about of pieces just like they do for your departure date, departure city, destination city, etc. I think it’s safe to say that most people would be able to estimate how many pieces of luggage they are bringing and could then get a closer price estimate.