Remember what it was like to book air travel way back in ye olden days of three years ago? You’d spot a really excellent online deal on a flight, only to discover at checkout that after the taxes and fees, it was $50 higher than you’d thought. The Dept. of Transportation changed all that in 2012 — but now, a bill rapidly moving through Congress could reverse that change entirely.
In Jan. 2012, the DoT adopted a “full-fare advertising” rule. The short version of the rule says that when airlines and travel sites advertise an airfare, they have to say what it actually costs the consumer — including all those taxes and fees. As a result, when the rule went into effect it suddenly appeared as if airfares jumped across the board.
Because of that, the airlines and travel sites never were exactly fans of the rule. Spirit, Allegiant Air, Southwest, and travel site TripAdvisor have all been in trouble with the DoT at one point or another for violating the rule, and Spirit launched an, er, spirited campaign against the feds back when the rule went into effect.
Those airlines filed a legal challenge to the rule on first amendment grounds, but thoroughly lost their case. Having run out of ways to circumvent the 2012 law, then, they went in search of a new one.
Enter the Transparent Airfares Act (HR 4156). Despite its name, the Act does not in fact propose to expand transparency in airfare pricing. Instead, it would undo the 2012 rule change, and once again permit airlines to advertise only a fraction of the price consumers actually pay.
Specifically, the Act reads:
It shall not be an unfair or deceptive practice … for a covered entity to state in an advertisement or solicitation for passenger air transportation the base airfare for the air transportation if the covered entity clearly and separately discloses—
(A) the government-imposed taxes and fees associated with the air transportation; and
(B) the total cost of the air transportation.
That means that an airline could once again advertise a “$39**” fare, where only after clicking another link or looking in a pop-up window do you find out that “**” means about $50 worth of various fees.
The bill has been rushed through the House Transportation and Infrastructure Committee. It was moved through on April 9 by a voice vote, not preceded by any hearings or debates. GovTrack.us estimates that the House has a 70% chance of passing it.
Pennsylvania Rep. Bill Shuster, who you will of course be shocked, shocked to learn receives a handsome pile of campaign contributions from the airline industry, introduced and sponsored the bill. It’s also picked up nearly thirty co-sponsors in the past month, from both sides of the aisle.
Bundling all of fees into a single advertised price, as the DoT required in 2012, was a positive move for consumers. Comparison shopping suddenly became significantly easier — no more situations where Airline A looks to advertise a flight $30 cheaper than Airline B, but has $40 worth of fees you don’t find out about until the end. Consumers gained power to make their own best choices.
Advocates for the bill claim that the bundling, instead, introduces confusion. Rep. Shuster said in a statement that the existing regulations “actually hide the cost of government from consumers,” and added, “This common sense bill will allow flyers to see the full breakdown of their ticket costs, so they’ll know what they’re paying for the service,” and which parts are taxes and/or fees.
The repeated theme, in all of the communications, is that “government taxes and fees” are the actual driving force behind price increases, and that if only the government “no longer require[d] airlines and travel agents to conceal the cost” of those taxes, they would somehow go down. Shuster said in another statement:
Department of Transportation regulations have fundamentally and unfairly changed the advertising rules for airfares by requiring all government imposed taxes and fees to be embedded in the advertised price of a ticket. As a result, the fact that Americans are paying higher and higher government imposed taxes and fees to travel by air is being hidden from them.
In other words, the bill is really about two things: one, pleasing the airline industry (and their deep pockets) and two, beating the “reduce taxes always” political drum beloved of certain legislators.
Consumer groups, however, are vehemently opposed to the bill, pointing out that if the Act becomes law, consumers would once again lose their ability easily to shop for airfares in any meaningful way.
In a letter to the Senate Commerce Committee, a number of public interest groups (including Consumerist’s sibling, Consumers Union), wrote that, “This legislation would undo years of hard work by advocates to ensure that consumers are not duped when purchasing airfare.” They also directly challenge the philosophy that taxes are the biggest problem with airfare:
The airlines also claim that consumers are clamoring for these revisions to the current advertising model. That seems unlikely, since we know of no consumer groups who are advocating for this law. The airlines also claim that no other products are advertised on a full price basis. Actually, federal excise taxes are commonly included in advertised prices for gasoline, tobacco and alcohol.
Ed Mierzwinski at U.S. PIRG drew out the gasoline comparison, writing, “Can you imagine traveling up I-95 from Florida to New York and seeing different, partial gasoline prices at rest stops in each state?”
Although the bill moved quickly through the House committee, it’s not the law yet. It’ll have to get through both the House and the Senate before that happens, and as Bloomberg points out, there’s plenty of time for its smooth passage to turn into a down-and-dirty fight between airline lobbyists and consumer interest groups along the way.