If you heard about a new rule or law being proposed and it had the word “transparency” in the title you’re likely think that the goal was about showing everything in a clear and reasonable manner, right? That’s what Airlines for America, the industry trade group, wants you to think about the “Transparent Airfares Act of 2014” which has made it out of Committee in the US House of Representatives. The lobbying group claims that they are working “to restore transparency in the Department of Transportation’s (DOT) airline advertising rules to ensure consumers know exactly how much of their travel dollars are going to federal taxes.” What they are actually doing is trying to hide the full price consumers pay. They want to allow for the publishing of fares far lower than what a customer will actually pay in hopes of generating more business by attracting consumers with lower numbers and then having those customers simply acquiesce when they realize the total price.
Yes, air travel has a relatively high tax rate associated with it in the USA. It is somewhere around 20% on most domestic trips. That’s money that the airlines have to roll up in to the full fare but which they never see penny one of in their coffers. But the consumers are still paying that money. Hiding it late in the sales process is not the right way to call attention to the split. And there is absolutely nothing preventing the airlines from identifying that split at any point in the fare advertising process, so long as they also show the full fare. Many airlines already do show the split on their websites as part of the process. These four all show the numbers before a customer clicks off the search results page:
Not all airlines include the breakdown on the front page of their website search results. United, for example, only includes the split on the second page, after you select the segments. American Airlines and Alaska Airlines don’t split it out in the first few pages of the transaction at all. But that is their choice, not something the government has mandated upon them.
I wrote about this same bill 7 weeks ago, and at the time I was a bit confused about what the airlines were trying to do. I didn’t see it as a big deal. I’m now more educated on the topic and much more pissed at the airlines. Nothing about this is good for anyone except for the airlines. Showing ONLY the base fare initially helps no one but them and it will roll back one of the main benefits the recent DoT consumer protection enforcement efforts has brought about in recent years. Passengers will lose with such a move.
In fighting to support the split the airlines and a few people I’ve spoken with about the potential change suggest that it is not fair for the airlines to be required to publish the all-in fare while other industries are not required to do so. It is true that hotels and rental car companies are not required to publish all-in fares. And that’s a shame. Let’s get together and force them to step up to the challenge of being honest and up front with their customers rather than hiding the true cost in the details. Bring them up to the full-fare standard rather than allowing airlines to regress.
Also, there is the part where only airlines and interstate rail service are truly federally-regulated transportation industries and both are currently required to show full-fare rates. Gas stations are another example where they must advertise the full price of their product, including all taxes. And as a society such a standard has been supported for decades. Does it mask 20%+ taxes in some states? Absolutely. But the consumer benefits from knowing going in to the transaction what the full price is.
The airlines have a choice: They can publish the full details of a fare breakdown if they so choose. They do not need permission from the government to do so. Instead of making that choice, however, they are working to hide the details of the full fare, removing information from display to the consumer. And they’re doing it under the guise of the word “transparency.” Most depressing is that they’ll probably succeed. Because they’ve got a lot of money and a lot of lobbyists. And the consumers have none.
- Do passengers need a fare breakdown?
- Do airlines need protection from unscrupulous passengers??
- Is there such a thing as too much consumer protection?
- Spirit Airlines says government is hiding taxes
- What is the real impact of 49 CFR 41712 § 399.88(a) for travelers?
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