Consumer Groups Scold Airlines For Pocketing Tax Money During FAA Shutdown

Surely you remember the recent FAA shutdown, during which the government couldn’t collect taxes on airfares, leading the airlines to temporarily raise their base prices and pocket an estimated $70 million a day. Now a coalition of consumer groups, including our benevolent benefactors at Consumers Union, are voicing their displeasure for this and other anti-consumer behavior.

The group, which also includes the Consumer Travel Alliance, National Consumers League, Consumer Action, US PIRG, AirlinePassengers.org, Association of Airline Passenger Rights and Consumer Federation of America, has sent a letter to the CEO of the Air Transport Association, condemning airline executives for using the FAA shutdown as an opportunity to cash in rather than passing the money onto consumers as savings.

“This could have been a profound teaching moment,” the consumer interest groups wrote, “regarding the benefits of lower aviation taxes and fees. Instead, we are chagrined that some airlines chose to pocket the substantial windfall created by the expiration of taxing authority. Rather than doing right by their customers, most airline CEOs decided to line their corporate pockets.”

The letter also urged the ATA to insist the airlines adopt greater transparency with respect to airline fees that can add substantial amounts to ticket prices. When the Department of Transportation’s (DOT) latest rules came into effect requiring airlines to inform consumers of the variety of optional fees related to the cost of an airline ticket, many of ATA airline members chose to present the information in ways that do not meet the test for a “prominent” link on the home page. This is despite the DOT’s clear intent to provide transparency for consumers with respect to airline fees that can add substantial amounts to ticket prices.

“Actions speak louder than words,” the groups wrote. “Airlines, like all businesses, should be driven by customer service, price transparency and honest disclosures. Suffice it to say, we are disappointed in most of the airline industry’s response to the new DOT rules.”

The consumer groups are calling for a meeting with ATA and making sure that the Secretary of Transportation and the appropriate congressional committee chairmen and ranking members are aware of these anti-consumer airline actions.

Separately, Consumers Union filed formal comments with DOT regarding its notice of proposed rulemaking on airline baggage fees and other charges, calling for greater transparency so consumers know the actual costs of their travel. CU filed the comments in cooperation with NCL, CFA, and Consumer Action.