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Apr 102014
 
The airlines are trying to put one over us.  Congress is aiding and abetting them.

The airlines are trying to put one over us. Congress is aiding and abetting them.

One of the most effective lobbying groups in the country are our airlines.  They can boast a brilliant record for delaying or avoiding any legislation they feel would disadvantage themselves, while effectively promoting legislative and regulatory actions that advantage them.

Their ‘successes’ aren’t always obvious to most travelers, but if you want to see an example of their ability to delay and deter consumer-friendly regulation, try to conveniently compare the total cost you’d pay on two or three different airlines to fly somewhere, including an understanding of the fees as well as the base fare.  You can’t, can you.

The DoT is keen to make it easier for us to be able to truly price compare different airline offerings, but that remains a distant dream, and currently you have to click-through dozens of webpages to uncover the ever-growing complexity of associated fees and charges the airlines impose on us when we fly – including massive fees for essential rather than optional parts of the travel process.

We are seeing a new example of the effective overbearing nature of the airline lobby at present, in the form of HR 4156, a bill currently working its way through Congress.  It is named ‘The Transparent Airfares Act’ but of course, the first thing to understand about this legislation is that it is all about making airfares less transparent rather than making them more transparent.

The name of the bill is just the start of the lies surrounding its passage.

Not only will this legislation make airfares harder to understand, but the process of making it into law is far from transparent as well.  It is being rushed through the House, and being done so this far with no ability for public submissions or any debate.  The bill was not the result of any initial requests from consumer groups, and is all to do with what the airlines want, and in this case, it seems that what the airlines want is what they are going to get.

The bill would allow airlines to advertise airfares without prominently showing the extra associated taxes and fees as part of their lead pricing.  Sure, you’d find out what the final cost was when you come to pay for it, but not necessarily much before then.

We should also point out that if two airlines both have an underlying airfare cost of, eg, $250 for a roundtrip between two cities, that does not mean that the final actual price, inclusive of all fees and taxes, will also be the same.  The most obvious reason for a difference in price is that one airline may fly non-stop, while the other airline goes through a hub and therefore incurs more PFC charges (up to $4.50 per airport transited) and more flight segment taxes ($4 per segment).

The lack of any external inputs in drafting this bill is all the more significant when you realize that the legislation isn’t ‘new’ legislation from nothing or nowhere, and neither is it affirming legislation extending a current practice.  Instead, it seeks to overturn and reverse a 2012 Department of Transportation ruling that required the airlines to most prominently feature the full total price of their airfares.  Surely we need to have a fair and full opportunity to discuss why this DoT ruling is now being overruled.

Rebutting the Claimed Justifications for the Bill

The justifications for the legislation are thin and easily rebutted, which is perhaps why the House Transportation and Infrastructure Committee refused to allow any submissions or debate prior to approving the bill and passing it out of its markup stage and sending it on to the full House.

1.  It has been suggested this is a law the American public want and are calling for.

But there has been no naming of any consumer group at all who are supporting the bill; quite the opposite – all the usual consumer groups are unanimously opposed to it.

2.  It has been suggested this simply places the same disclosure rules on airfares as on anything else you’d buy.

It is true that in this country, prices are usually quoted without sales tax, but that is necessary and unavoidable because sales tax rates vary not only from state to state and from county to county, but even from city to city.  Air taxes and fees are a constant for any given airline, route and fare, no matter where the ticket is purchased.

Furthermore, some things are sold inclusive of taxes and fees.  For example, next time you go fill your car with petrol, you’re only seeing a total price per gallon of gas.  Imagine if gas stations were to start advertising just the underlying cost of the gas on their signs, and only after you’d filled your tank you discovered the total cost, including all federal, state and local taxes and fees!

3.  The third reason offered to support this legislation is that it serves to uncover and expose the level of taxes and fees the government imposes on air travel.

That is perhaps an oblique outcome – and one wonders why exactly any congressman would wish to expose their greedy grab of such a large slice of our air travel expenditures, but it does not require legislation for airlines to differently format how they show their total fares and explain the make-up of airfare vs taxes/fees.

All airlines are already free to make as prominent a statement as they choose about how much of the ticket price you pay goes to the government and what it is for.

What this legislation would most risk is a return to the most egregious examples of the former ‘bait and switching’ where you’d see a low advertised airfare, but only after getting all excited, and working your way 95% of the way towards paying it, do you then discover a morass of fees and surcharges – carrier imposed as well as government imposed – that in total more than double the price you thought you were going to pay.

More details about this awful legislation here.

What a True Transparent Airfares Act Should Include

Don’t get us wrong.  We’re enthusiastically in favor of truly transparent airfares.  But let’s actually create provisions that promote transparency, rather than ones that prevent them.  How about :

1.  All airline pricing data must also show the associated costs (if any) for credit card and other payment fees, booking fees, ticket/boarding pass issuance, checking luggage, hand carrying luggage, seat assignments, change and cancellation fees.

Yes, we agree that would make for some very complicated screens full of data.  But the airlines have a simple solution – to ease back on the adding of massive fees for every conceivable – and essential – aspect of traveling by plane.

2.  Requiring the 7.5% federal aviation tax be imposed on all fees as well as the base airfare.

There’s no accounting reason why this can’t be done, and eliminating the loophole that currently encourages airlines to shift as much of the money they charge us from ‘taxable’ to ‘untaxable’ will reduce part of their motivation to be so greedy.

3.  Removing some elements of the ‘can only be sued in federal court’ protection the airlines currently enjoy.

Maybe there was a reason for this protection, many decades ago, before the ‘information age’ and the ability of companies to monitor and comply with multiple jurisdictions and obligations.  But, today, plenty of other companies operate nationwide without needing this protection, and manage to defend themselves appropriately against actions in state courts, so why not airlines, too?

Because there are fewer and fewer airlines, we are losing our ultimate consumer sanction – our ability to take our business away and to shift it to a competitor.  We need to make the mega-airlines – the very few of them that remain – more accountable the only other way that remains – through the courts.

Please contact your congressional representatives and ask them to vote against HR 4156, the Transparent Airfares Act, because it does not promote transparent airfares, but rather does quite the opposite.

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