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Transparent Airfares Act of 2014 shouldn’t be cleared for takeoff

Airlines want to make ticket pricing more confusing

Published: May 02, 2014 11:20 AM

The good news for airline passengers is that technology has made booking a flight easier than ever. The bad news? It’s becoming harder and harder to determine the bottom-line cost of an airline ticket. Worse yet, a new bill making its way through Congress would make things much worse.

The ironically titled Transparent Airfares Act of 2014 would make airfares more opaque, not more transparent. This legislation was rushed through the U.S. House of Representatives with no hearings, no public debate, and no calls for comments.

The problem with the proposed legislation is that it would reverse the Full Fare Advertising Rule, implemented by the U.S. Department of Transportation in 2012. This regulation requires airlines to advertise the total price consumers will pay, inclusive of all mandatory taxes and fees levied by federal, state, and local governments, as well as airport authorities. But if this bill becomes law, airlines would be able to advertise a fare that's significantly lower than the price you'll really pay. You would find out the full price only at the very end of the booking process.

Rather than serve the interests of consumers, the Transparent Airfares Act seemingly only benefits the airline industry. One consumer advocate told the Washington Post it was “legalized bait-and-switch advertising.”

The sponsors of this bill—and the airline industry—claim that consumers are being harmed because taxes and fees imposed by these government agencies and airport authorities are being “hidden.” This simply isn’t true, since the DOT allows such fees to be broken out, provided the total price is advertised. (Read our earlier editorial on airline fees.)

Also misleading is the argument that other industries aren’t required to include mandatory taxes in their pricing. The same goes for gasoline, tobacco, and liquor sales. But with airline pricing, such disclosure is critical: Mandatory taxes and fees vary from city to city, and even from airport to airport, and they are imposed as flat fees and as percentages. You shouldn't be expected to navigate something so complex while shopping for airfares. That’s why the DOT’s Full Fare Advertising Rule was so welcome.

If transparency is really what the airline industry is after, we’re all for it. In fact, Consumers Union, the policy and advocacy arm of Consumer Reports, strongly supports efforts to increase transparency when it comes to the airlines’ “ancillary revenue” fees. These types of fees, for services ranging from checking baggage to selecting seats to calling reservations centers, have become ubiquitous in recent years. A 2013 Consumer Reports survey uncovered tremendous dissatisfaction over fees and confusion over bottom-line pricing.

With this influx of hundreds of new airline fees, it’s become virtually impossible to price the full cost of an itinerary before booking with some airlines. And new airline-imposed fees—which the industry calls “unbundling” or “à la carte pricing”—are continually being imposed and increased.

Frontier Airlines has joined Spirit Airlines and Allegiant Air in charging not only for checked baggage but also for carry-on bags. In the Orwellian world of airline pricing, Frontier touted its new carry-on fee (which can be up to $100 one way) as a positive for consumers: “Save Money by checking your bag—your 1st checked bag is cheaper than a carry-on bag!”

Consumers Union recently joined several other consumer organizations in writing to members of the U.S. Senate and urging them to “oppose any effort to replicate legislation similar to H.R. 4156.” The letter, which referred to the Transparent Airfares Act as “anti-consumer,” stated: “It serves no purpose, in our view, other than to mislead consumers about the real price of airfare.”

While the airline industry says this legislation will help consumers, we don’t see that as a ringing endorsement. And in our conversations with consumers, we’ve yet to hear from anyone who wanted less, rather than more, pricing transparency.

Consumers Union has been fighting for greater airline pricing transparency for over a decade. We believe all consumers have the right to obtain the full and complete bottom-line price of an airfare before making a reservation, no matter how you shop for your airfare. That’s why we think it’s time to ground this legislation before it takes off and replace it with a truly transparent airfare bill.

Before you plan your summer getaway, check our buying guide and Ratings for airlines and our survey report on hotels.

This feature is part of a regular series by Consumers Union, the policy and advocacy arm of Consumer Reports. The nonprofit organization advocates for product safety, financial reform, safer food, health reform, and other consumer issues in Washington, D.C., the states, and in the marketplace.

Read other installments of our Policy & Action feature.

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