The Transparent Airfares Act of 2014, which only a few weeks ago had virtually no chance of passing, now seems poised to become law.
Remarkably, the proposed legislation enjoys bipartisan support, even from Democrats with distinguished records of supporting consumer rights. Critics have watched in amazement as this deceptively named bill has taxied toward the runway, apparently unstoppable.
This may be the time to pause and consider what life may be like with “transparent” prices, which would almost certainly spread to other parts of the travel industry that are regulated at the federal level.
The Transparent Airfares Act would effectively void a Department of Transportation regulation called the full-fare advertising rule, which is supported by consumer groups and airline passengers and has been upheld by the courts. That rule requires airlines to quote a price that includes all mandatory taxes and fees.
Airline representatives say that the full-fare rule, far from protecting consumers, allows the government to bury tax spikes in a ticket price. Consumer advocates insist that the Transparent Airfares Act would allow airlines to quote a deceptively low airfare.
As soon as the bill is passed, airlines will be able to advertise an initial price that’s between 15 and 20 percent lower than the price you’ll pay. Only at the end of the booking process, when you get ready to pay, would the full price, including taxes, be revealed. Privately, airlines have been pitching this to Congress as an economic stimulus, arguing that passengers are likelier to book fares they believe to be cheaper, say critics.
Eventually, the so-called “ultra” low-cost airlines such as Allegiant and Spirit, which publish fares as low as $1, could become the norm, says Charlie Leocha, director of Travelers United, a nonprofit advocacy group. (I’m the co-founder of Travelers United and serve as its volunteer ombudsman.)
“When mandatory taxes and fees — TSA security fees, airport facility charges and other fees — are applied to these fares, the final price can soar by more than 100 percent,” Leocha says. “It’s flat-out misleading and deceptive. It’s legalized bait-and-switch advertising.”
At some point, the price of a fare could drop to even zero, experts fear, with airlines making their profits on mandatory and optional fees, such as checked-luggage charges, seat-reservation fees and meals. Under that scenario, it would be nearly impossible to know how much a flight would cost, although one thing would be certain: It wouldn’t be “free.”
Once airlines have had their way, other industries regulated at the federal level might be likely to line up for a “transparent” price bill, starting with oil companies. “Imagine if gas stations were to start advertising just the base cost of the gas on their signs, and only after you’d filled your tank you discovered the total cost,” says Paul Hudson, president of FlyersRights.org.
On average, taxes add about 50 cents to the cost of a gallon of gasoline. So under a so-called “transparent” price scenario, a station charging $3.50 per gallon of gas could prominently advertise its price as $3, even if your total cost is $3.50.