Just how transparent are the airlines about ancillary fees? Not surprisingly, if you ask them directly the answer is that they are spectacularly open and public about things. But the US Department of Transportation is looking to make things even more clear. This most recent set of rules proposed by the DoT has the airlines up in arms, fighting back against what they see as onerous and detrimental requirements of publicizing data. So, just what is being fought over?
The DoT’s proposed rule focuses on a few different factors. One involves requiring US mainline carriers to report operational performance for their domestic codes-share partners (i.e. regional carriers); such a move would likely make all the reliability numbers look a lot worse very quickly, but also make the numbers more accurately reflect the reality of flying. The DoT also wants all airlines and all ticket agents to be abundantly clear about the fees associated with travel, above and beyond just buying the ticket.
This NPRM also proposes to require airlines and ticket agents to disclose at all points of sale the fees for certain basic ancillary services associated with the air transportation consumers are buying or considering buying. Currently, some consumers may be unable to understand the true cost of travel while searching for airfares, due to insufficient information concerning fees for ancillary services. The Department is addressing this problem by proposing that carriers share real-time, accurate fee information for certain optional services with ticket agents.
This is the bit the airlines are most upset about. It seems that, unlike when it is government taxes they want to see separated out so that passengers can know the exact details, the companies don’t really mind if passengers are unclear on the various ancillary fees associated with travel. In fact, sharing all that extra information is actually bad for consumers. Here’s what Delta has to say about the situation:
The NPRM would mandate an unnecessary and unjustified redesign of carrier distribution systems to provide basic ancillary fees for each particular itinerary in the booking path at the first point in the search results where fares are displayed. Carriers and ticket agents would also be required to provide “customer specific” fees taking into account loyalty status, method of payment, cabin class, etc. for passengers that elect to provide this information. Delta’s customers are already fully aware of fees for baggage and premium “Economy Comfort” seating. Those fees are readily accessible on Delta’s website….
So, as long as you are shopping on the carrier website – and you manage to click through to the correct sub-page on the site to find the set of circumstances which correctly define the combination of itinerary, frequent flyer status and other parameters – it should be easy to figure out the fees. Which is to say that it is not really easy at all.
Delta also calls attention to their “Basic Economy” fares in which advance seat assignments are not available. For such fares the ability to up-sell during the purchase process or later in reviewing the transactions would be materially inhibited by these rules, the carrier claims.
The proposed rule would also impede the development of innovative new product offerings. For example, while Delta does not charge for advance seat assignments for its standard economy product, we are developing a “Basic Economy” product which does not offer the option of an advance seat assignment at any price. For customers who choose to save money by using our Basic Economy product, seats are assigned at the gate or available for self-selection on the day of departure. … In the future, Delta may want to make special offers to consumers to upgrade their seating if Preferred, Economy Comfort or First Class seats are available shortly before departure. The proposed disclosure rules would complicate carrier efforts to segment and present their product in the way most attractive to consumers.
Not surprisingly Southwest Airlines is not opposed to the rule changes. The carrier suggests that the rule changes will allow for “more meaningful” comparison shopping. The irony there, of course, is that Southwest actively opposes comparison shopping of it fares by refusing to publish fares in the GDS systems; the only way to get the data is to go directly to its website. Which is exactly what the other airlines are saying is acceptable in protesting these proposed rules.
There is no doubt that the GDS platforms are struggling to keep pace with the new range of fees and fare structures the airlines are deploying. That does inhibit the ability of the airlines to get creative in how they charge for various services. And the airlines hate that (“The Department should be very cautious about adopting additional regulations that could permanently preserve unwarranted, illegal GDS market power that increases consumer costs.”). But the airlines have also become fee-happy. And keeping track of what the fees are, when they apply and when they change is not easy. Even the most informed consumer will have trouble keeping track of them. And maybe the consumers deserve to know what the trip will actually cost, not just the first number.
That’s something the airlines remain opposed to every time. Because it gives the consumer a sliver of advantage in the comparison shopping process.
- Teaching airlines the meaning of the word transparency
- About that time I got in a twitter fight with Airlines for America over taxes
- Is air travel a commodity or not?
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