That’s a question I ask almost every day, and it’s coincidentally one that a new Transportation Department panel is trying to answer.
The Advisory Committee for Aviation Consumer Protection, created by the latest Federal Aviation Administration reauthorization bill and established in May, is charged with reviewing current aviation consumer protection programs and recommending improvements, if needed. It has held one public meeting so far, with another scheduled for Tuesday, so it still has a long way to go before determining where passengers hurt the most.
Disclosure: I have a horse in this race. I co-founded the Consumer Travel Alliance and serve as its volunteer ombudsman. The group’s president, Charlie Leocha, is the consumer representative on the committee. Leocha maintains that the single biggest fixable problem is price transparency, or knowing how much your ticket will cost.
During presentations to the committee, other advocates for air travelers have made compelling cases for different causes, including making it easier to sue airlines and adopting tougher regulations concerning safety and tarmac delays.
If I’d made my own pitch, I’d have argued that air travelers are most frustrated by the impression that airlines seem to be able to make up their own rules with little oversight.
So who’s right?
To find out, I looked outside the Beltway, asking consumer advocates and service experts to name their top airline problem. If anyone knows where air travelers are hurting, they should.
Edward Hasbrouck, a San Francisco-based consumer advocate and author of “The Practical Nomad: How to Travel Around the World,” says that air travelers want to know what they’re buying. Airlines could do a far better job of disclosing so-called codeshare agreements and revealing what’s included in the price of a ticket as well as the ticket terms. Air carriers aren’t currently required to reveal any of those details on your ticket. “I think those are the big issues,” he says.
Mitch Lipka, who writes a consumer advocacy column for the Boston Globe, says that passengers are frustrated with new airline fees and charges that give the false impression that they’re spending less for their flights when they’re actually spending more.
Most recently, news that some airlines are reserving more aisle and window seats for passengers willing to pay a premium prompted angry complaints that families with small children wouldn’t be able to sit together without paying extra. “That seems to have irked a lot of people,” Lipka says.
Richard Laermer, a marketing expert and commentator for the public radio show “Marketplace,” says that air travelers are weary of being hammered by fees. “Fees for legroom, fees for seat reservations, fees for being first on board,” he says. “Worse, instead of passengers knowing what the price of a ticket covers, they’re growing more confused as airlines come up with new surcharges.” Laermer wants to see the end of “us vs. them.”
So, that’s three votes for price transparency.
Look a little closer, and you’ll understand why. These new fees and surcharges affect almost every passenger’s wallet in a direct, measurable way. A decade ago, the price of an airline ticket included checking two bags, confirming a seat, paying with a credit card. If you wanted to check an overweight bag or change your ticket, you paid a little more. Today, some tickets cover none of those things; they are, to use a term popular with the airlines, “unbundled.”
It’s not the unbundling itself that’s problematic, but the way it has been executed. With only one or two exceptions, airlines have quietly removed integral components of the ticket from the base price and then buried the disclosure on their Web site. That has allowed them to continue quoting the low fares that passengers want. It has also let them profit from the public’s assumption that those fares continue to be more or less inclusive, which they aren’t.
The money that airlines make from these extra fees is referred to as “ancillary” revenue, and the airline industry is awash in it today. In two years, worldwide ancillary airline revenue jumped 66 percent, to
$22.6 billion in 2011, according to a recent survey by IdeaWorks, an airline consulting company that specializes in ancillary revenue. The industry leader, United Airlines, collected $5.2 billion in ancillary fees last year.
But United is a big airline. The real ancillary revenue leaders are the so-called “low-fare” carriers, which pile on the extras. Spirit Airlines, for example, reaps about 33 percent of its revenue from fees, making it the world’s most aggressive air carrier when it comes to extras, IdeaWorks says.
Air travelers have plenty of problems. But this one — the issue of ticket price — keeps bubbling up in discussions.
The fix seems pretty easy: Require airlines to release all their data regarding fares and optional extras and to publish those fees everywhere they sell their tickets. At the moment, they’re not required to do so; current regulations say only that their fares must include mandatory fees and taxes. Obviously, it’s not enough. The optional fees are the ones that surprise consumers and hurt their wallets.
The advisory committee should recommend that the Transportation Department adopt a rule requiring airlines to put every component of their fares on the table, for every passenger to see, regardless of how and where they’re buying a ticket. That would quickly close a shameful chapter in the airline industry’s history, in which it deceived passengers into paying more for their tickets and earned billions based on its subterfuge.
No government should allow a business to lie to its customers, even if that business is a beloved airline.