Are Proposed Airfare Pricing Changes Transparent - or Clear As Mud?
Proposed bill would allow airlines to advertise base fares minus fees.
May 11, 2014— -- Who would have thought the price of a flight to see Aunt Betty in Des Moines could get so political? But it has, with one side claiming it's uncovered an "astounding fact": The government is supposedly withholding vital airfare information from consumers.
Wait, haven't we heard this before? Yes. A couple of years ago, the government sang a similar tune about the taxes and fees on airline tickets, and both sides say the real issue is transparency.
I suspect it has something to do with those amazing $9 airfares, too.
What is the government supposedly hiding? Government-imposed taxes and fees, the ones embedded in every airline ticket or so says the lobbying group Airlines for America which supports the Transparent Airfares Act of 2014. The proposed legislation, officially known as H.R 4156, would allow airlines to display or advertise base airfare as long as they disclose "clearly and separately" taxes and fees, and ultimately provide consumers with a total ticket price.
In other words, let's go back to the days of the asterisk. You remember that; you'd see a fare advertised for $49* and beside the asterisk would be the explanation, "not including taxes and fees." You'd find out what those extras cost somewhere on the way to checkout.
Bottom line: Airlines want to roll-back the Department of Transportation's 2012 Passenger Protections rule which did away with all this, by forcing airlines to display only all-inclusive fares. The DOT sought to protect shoppers from sticker-shock, which might attack upon spying one of Spirit's $9 fares which ultimately cost five or six times that much. So consumers applauded the move because they knew what they had to pay from the get-go.
The airlines response is they're tired of taking all the blame for the high cost of travel when government-imposed taxes and fees are the real culprit (and unlike baggage fees, the government add-ons are not optional). In other words, airlines believe they take 100 percent of the heat on costs but reap just 80 percent of the revenue. What they'd like is the right to display stripped-down base fares and the right to show a separate listing of all ticket taxes and fees elsewhere - maybe not until the end of the transaction, when the total price would be revealed.
I get it. Those taxes and fees really add up. Consider these charges on a connecting flight between San Francisco and Chicago:
• Base airfare: $100 each way• U.S. Sept. 11 Security Fee: $5 each-way• U.S. Passenger Facility Charge: $9.00 each way• U.S. Flight Segment Tax: $8.00 each-way• U.S. Transportation Tax: $7.50 each-way
Which means the $200 round-trip airfare actually costs nearly $260. It's even worse on international flights: Here's the breakdown for a connecting flight from Los Angeles to London:
• Base round-trip airfare: $1,000• U.S. International Departure Tax: $17.50• U.S. Sept. 11 Security Fee: $10• U.S. Passenger Facility Charge: $18• U.S. Agriculture Fee: $5• U.S. Immigration Fee: $7• U.K. Air Passenger Duty: $116• U.K. Passenger Service Charge: $20.70• U.S. International Arrival Tax: $17.50
Add it all up and your $1,000 base airfare morphs into $1,211.70
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