Regulation Almost Levels the Airfare Shopping Field

PHOTO: Changes are coming to airfare pricing regulations.
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You've seen those gotta-fly prices - deals from Long Beach to Vegas for just $29 - but is that what it really costs? Of course not.

Advertised airfares do not line up with reality. Some call this dishonest pricing, but it's all perfectly legal, as long as the price includes that little asterisk leading to the fine print explaining that $29 is a one-way base price and that "additional taxes and fees may apply." They apply, alright and will and bloat a 29 buck fare to about $80 round-trip total.

In case you're wondering, I saw that $29 special on JetBlue but I'm not trashing them. All the airlines do this and so do all the ticket agencies, for now. But wait a couple of weeks.

For more travel news and insights view Rick's blog at farecompare.com

Changes are coming to airfare pricing regulations, and high time, too, especially in the arena of international fares. Delta recently advertised a sale from New York to London "starting at just $259*". When I tried finding that fare, I was actually shown a cheaper base price of $151 but the taxes and fees rocketed the entire round-trip ticket price to $735.

That is actually a good deal, but it is not the deal you thought you were promised. Same thing for the $29 fare. The Department of Transportation (DOT), taking note of this, pointed out that some consumers see this as a bait-and-switch tactic and decided to act. There were some delays but now, beginning Jan. 26, any fares you see advertised are must be "the full price to be paid by the consumer including all mandated government taxes and fees."

In other words, what you see is what you'll get and what you'll pay for, and this affects all airfare advertisers, including the airlines, online and offline travel agencies, meta-search sites and potentially anyone that provides billboard space to sellers or quoters of airline tickets. Just FYI, my site - FareCompare - has always shown the total price of a ticket from the get-go, because we believe in transparency.

So problem solved? I wish.

For consumers, knowing the total price with taxes/fees included will make it much easier to compare prices a la apples to apples. Plus shoppers will avoid the nasty surprise of discovering at the end of the booking process that their steal-of-a-deal airfare isn't anything of the sort.

However, winning the airfare game will still require skill and fortitude. For instance, I don't know how many times I've heard from people who say, "I'd love to buy that cheap fare if only I could find the darn thing!" What a lot of folks don't know is when airlines have a publicly advertised sale, they never put an entire plane-load of seats on sale. All the Dept. of Transportation says about that is "a reasonable number of seats" must be part of any sale, and that is understood to be about 10 percent of all seats.

Of course, sales have lots of other restrictions these days such as forcing you to fly on a Tuesday or Wednesday only. So even if you're armed with the knowledge of the total airfare price, when you start looking for that special deal on Day 2 or 3 of a three-day sale, you could be out of luck.

"Don't tell us about being out of luck!" That's what I figure the airlines are saying right about now. The new airfare/transparency regulations mean lots of problems for them (I can imagine the shouts ricocheting off the walls right now in airline IT departments). You better believe they fought the DOT on this; Southwest, Allegiant and Sprit even filed a suit to halt implementation of the rule with the argument, what other business has to disclose all taxes in ads? The DOT, however, gave the airlines one stay of execution last summer and has declined to do so again.

The airlines have a point. When they argue that other businesses don't have to disclose taxes up-front they're thinking of that big-screen TV special at a Los Angeles Best Buy which won't cost California shoppers the advertised price of $400, it'll cost $435 after taxes. But that's nothing compared with airline tickets taxes and fees which add an estimated 20 percent or more to the cost of many airline tickets and sometimes much, much more depending on the destination.

Don't bring up the auto industry in front of airline execs, either, or you'll hear plenty about nobody's-ever-given-us-a-bailout. Too big to fail? They simply point to venerable American Airlines' recent bankruptcy filing as Exhibit A. Did anyone hear the feds say anything about bailing AA out? Not a peep.

Another problem for carriers: figuring out the specific taxes and fees mandated by different airports and governments in a panoply of countries can be a nightmare especially for international flights. A lot has to do with routing, since some fees are based on the number of take-offs/landings (or 'legs' of a trip) plus the different fees mandated by airports.

Say you search for a flight from New York to Rome. The airlines can show you a bunch of different routes and the prices can be all over the place map depending on how you travel. A direct flight may be more expensive (the airlines sometimes build in a premium for what I call the convenience factor) but there may be more taxes associated with routes with connecting flights. How will they show you a "best" price?

Then there's the advertising venue problem. If the DOT decides to fine an airline for advertising violations -- and always camera-ready Transportation Secretary Ray LaHood has a track record of zealously pursuing rule violators with well-publicized fines -- who shares in the penalty? Will billboards, newspapers and websites be fined as well? It's not that farfetched when you recall that Google agreed to pay half a billion dollars earlier this year to settle allegations that ads for online Canadian pharmacies on its website allowed illegal imports of prescription drugs.

But let's get back to you, the passenger. The new DOT rules are a good thing. Honest pricing always is. However, it doesn't mean your job is done.

Airlines will always try to get you to pay the most money possible every time you fly, so you will still have to be a smart shopper. The good news is, that playing field that used to slope away from us just got a little bit more level.

Related links:

Department of Transportation Fines Airtrain for Deceptive Price Ads

Google Fined for Canadian Pharmacy Ads

Google Founder Attacks Piracy Bill Set for House Panel Vote

When to Buy Airline Tickets

Are Super Low Airfares for Real?

New Protections Likely to Increase Fares

This work is the opinion of the columnist and does not reflect the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations that include ABC News, the New York Times, the Wall Street Journal, Reuters, the Associated Press and Bloomberg. His website, FareCompare.com, offers consumers free, new-generation software, combined with expert insider tips to find the best airline ticket deals.

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