U.S. Republicans and major airlines are teaming up with hopes of repealing the two-year-old federal rule requiring airlines to show customers the full cost of a flight, with taxes and fees included, while they’re shopping.
A new bill working through the U.S. Congress would allow airlines to return to their old way of doing things, which was to emphasize in ads the base airfare — the amount airlines charge passengers to fly — but reveal the full price including taxes and fees separately. The new move is backed by a bipartisan group of 33 lawmakers led by Pennsylvania Republican and House Transportation and Infrastructure Committee Chairman Bill Shuster.
Before the Department of Transportation put its regulation in place, airlines and ticketing services would typically display the lower base fare in large type and show taxes and fees in small print. Consumers shopping online often weren't shown taxes and fees unless they scrolled to the bottom of the web page or clicked through several pages after selecting a flight.
Canada brought in rules in 2012
Canadian airlines have also used the “all-in” ticket price since December of 2012.
“We are protecting Canadian air travellers by helping them see, clearly and up front, the full cost of air tickets, so they can make informed travel choices,” Canadian Transportation Minister Denis Lebel said at the time.
The U.S. bill, supported both by the airline industry and by its pilot and flight-attendant unions, is moving through the House at Mach speed. It was introduced in March and approved by the transportation committee a month later without a hearing and by a voice vote, which means there is no record of who voted for or against it. The committee's entire discussion of the measure lasted just nine minutes.
The bill is "a gift to the airlines," said New York Democrat Jerrold Nadler, a transportation committee member who said he voted against it. "What you're going to see is $200 for the airfare, and then you're going to be shocked when it turns out to really be $250," he said. "It's misleading to the consumer. It's just dishonest."
Airlines say they should be able to able to advertise their fares the same way hotels, car rental agencies and other businesses do -- by advertising the price of their service and adding in taxes and fees before the final purchase.
"Consumers are better served when they can buy airfares like they buy any other product," said Sharon Pinkerton, senior vice-president of Airlines for America, which represents major carriers. "I think what's confusing is to have airfares treated differently."
The measure's supporters also say the industry is overtaxed. They want airlines to be able to break out taxes and fees so that consumers can see how much of their ticket price goes to the government. The industry says taxes are about 21 per cent of a typical $300 round-trip domestic ticket.
Consumers not consulted
The rush left no time for consumer input, advocates say. "We're very concerned a piece of legislation that can have such a broad effect was moved through without any consultation. I was just shocked by this," said Bill McGee, an aviation consultant for Consumers Union.
He said the title of the bill, The Transparent Airfares Act, smacks of Orwellian doublespeak since it would make airfares less transparent by allowing airlines to conceal the full purchase price.
Transportation Department officials say airlines are free under current rules to spell out taxes and fees so long as the full price is more prominent.
The fight over how to present fares is part of an ongoing clash between airlines and the administration over passenger rights. During President Barack Obama's first term, the Transportation Department issued several far-reaching aviation consumer regulations, beginning with a ban on so-called "tarmac strandings" in which passengers were cooped up in planes for hours, sometimes in miserable conditions.
Other recent regulations include allowing passengers to cancel reservations within 24 hours without penalty and tougher requirements for compensating passengers denied boarding because of overbooking and bag fee disclosure requirements.
Against airline resistance, the administration implemented its airfare disclosure rule in 2012. Several airlines, supported by their trade group, had sued in federal court to overturn it, but the court sided with the government, and the Supreme Court refused to hear the airlines' appeal.
Transportation officials may take on ‘hidden fees’ next
The department is at work on another round of rules that would require airlines to disclose some add-on fees when they advertise fares. Since 2008, airlines have been unbundling fares, charging for many services that used to be included in the ticket price. Fees vary by airline, but passengers may now be charged extra for an assigned seat, early boarding, a meal, curbside check-in or carry-on bags, among other services.
"I am fed up with the hidden fees and the misleading advertising of prices, which makes it difficult to compare rates," one frequent flyer wrote the Transportation Department. "I'm tired of being at their mercy."
Airlines for America has stepped up its Washington lobbying since Nick Calio, the top White House lobbyist under former President George W. Bush, took over as its chief in 2011. Sean Kennedy, an Obama White House lobbyist, joined the association last year.
Thirty airlines spent nearly $30 million on lobbying and employed 213 lobbyists last year, according to the political money-tracking website OpenSecrets.org.