Last week, the House Transportation and Infrastructure Committee marked up a proposed bill that would allow airlines once again to omit taxes and fees from advertised prices and instead add them in later, just before you buy. Make no mistake: This “Transparent Airfares Act of 2014” is an anti-consumer bill. It was drafted, marked up, and sent to the House without any input from consumer or business travel interests. And it is based on lies.
- Lie Number 1: Consumers want this information. Not true: I know of no credible consumer advocacy or business-travel group that wants this change, and the most important ones all oppose it. Politicians often support bad proposals by solemnly asserting, “The American people want…” without any factual basis whatever, and this is no exception. Who really wants this bill? Airlines want it, and their lobbyists were apparently successful enough to get support from members of Congress who are normally sound on consumer issues. Consumers really want what the Department of Transportation (DOT) gave them in 2012: Honest, all-up advertising of the true cost of an airline ticket.
- Lie Number 2: “Government fees and taxes are hidden from the public.” No, airline fees and taxes are not “hidden” under current rules; airlines post them in easily accessible pull-down menus or other statements clearly and openly for anyone who cares.
- Lie Number 3: “Virtually all consumer products are advertised at a base price, with taxes added on at the point of purchase.” Again, not so. The only taxes traditionally added at the point of purchase are state and local sales taxes, which do not apply to airline tickets. Federal excise taxes and user fees, on the other hand, are routinely included in the base prices on all products to which they apply: The biggest federal excise taxes are on gasoline, tobacco products, and alcoholic beverages, and those taxes are always included in the posted prices you see where you buy them. Moreover, unlike the case of sales taxes, virtually all of the air-ticket taxes, fees, and charges go directly or indirectly to fund government programs that support air travel: airports, air-traffic control, security, customs and immigration, and such.
- Lie Number 4: The bill will “restore transparency to the advertising of U.S. airline-ticket prices.” No, you don’t have to be an astrophysicist to figure out that the bill will obscure the total cost of travel, not make it more transparent.
And there’s a subtext to these lies. What some airlines really want is not limited to excluding government taxes and fees. What they really want is to exclude their own “carrier imposed” fees and charges, like the notorious “fuel surcharges” they tried before DOT made them quit. You remember those bad old days: “London just $300 round-trip” in big type or on the first screen, with a footnote saying “plus a fuel surcharge of $400.” That practice, which the FTC calls “drip pricing,” is a scam, and although airlines can’t use that scam on ordinary ticket sales, some still use it with frequent-flyer awards and in other non-ticket circumstances. The would-be scammers supporting this bill probably won’t get that far this time, but if they can move this current dog through Congress now, you can bet they’ll be back for round two.
For now, the bill is a long way from law, with an uncertain outcome in the full House and the Senate. But even if it doesn’t pass this time, airline lobbyists will keep working on future Congresses. If you value honest airline advertising, let your congressional delegation know you think this is a terrible idea. Check Consumer Travel Alliance and Consumer Traveler for other takes on this important issue.
This is the first of two columns focused on consumer issues before the government. Next week: The DOT has the authority to police outrageous change fees on international tickets but refuses to obey the law.
Ed Perkins on Travel is copyright (c) 2014 Tribune Media Services, Inc.
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