Will Airfares Once Again Be More Confusing? If This Bill is Passed…

“H ave you ever searched for an airfare and found what appears to be a great deal, only to find that the airfare committed what could be considered a ‘bait and switch’ tactic and did not include taxes and fees until just before you were ready to pay for it?”

I first asked that question in this article on Thursday, January 26, 2012, which is the day that a new rule went into effect where airlines have since been required by the United States Department of Transportation to include all mandatory taxes and fees in advertised airfares.

All was relatively quiet for the past three years since lawmakers attempted to convert what was then known as the Transparent Airfares Act of 2014 into law to reverse at least part of what was passed in 2012; and if the airlines have it their way, you will not initially know what is the full price of airfare until you attempt to book a ticket or spend your valuable time doing research — potentially bringing us back to those “bait and switch” days when searching for airfares to book.

According to this official press release from the Department of Transportation of the United States, the 21st Century Aviation Innovation, Reform, and Reauthorization Act — also known as the 21st Century AIRR Act — will:

  • Cut Washington red tape so that our manufacturers can get products to market on time, stay competitive, and continue to employ millions of Americans.
  • Encourage American innovation in aviation technologies to promote a stronger American workforce.
  • Ensure that our airport infrastructure connects businesses and people to the world.
  • Provide a better flying experience from gate to gate.
  • Ensure access to the aviation system for everyone who depends on it – especially the Nation’s millions of general aviation users, and small and rural America.
  • Provide Americans with a safe, efficient, modern system that uses 21st century technology to ensure more on-time departures, more direct routes, and less time wasted on the tarmac.

Will Airfares Once Again Be More Confusing? If This Bill is Passed…

That all sounds great — except that lawmakers have a tendency to bury other items in a bill and not call attention to it; and this bill is no exception.

Buried on page 276 of this document of 334 pages known as Bill H. R. 2997 — under the heading of TITLE V—AIR SERVICE IMPROVEMENTS, Subtitle A—Airline Customer Service Improvements — is Section 505, which pertains to the advertisements and disclosure of fees for passenger air transportation.

The Complete Text of Section 505

The following is the text of Section 505 of Bill HR 2997, verbatim in its entirety:

SEC. 505. ADVERTISEMENTS AND DISCLOSURE OF FEES FOR PASSENGER AIR TRANSPORTATION.

(a) FULL FARE ADVERTISING.—

(1) IN GENERAL.—Section 41712 of title 49, United States Code, is amended by adding at the end the following:

‘‘(d) FULL FARE ADVERTISING.—

‘‘(1) IN GENERAL.—It shall not be an unfair or deceptive practice under subsection (a) 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 fees and taxes associated with the air transportation; and

‘‘(B) the total cost of the air transportation.

‘‘(2) FORM OF DISCLOSURE.—

‘‘(A) IN GENERAL.—For purposes of paragraph (1), the information described in paragraphs (1)(A) and (1)(B) shall be disclosed in the advertisement or solicitation in a manner that clearly presents the information to the consumer.

‘‘(B) INTERNET ADVERTISEMENTS AND SOLICITATIONS.—For purposes of paragraph (1), with respect to an advertisement or solicitation for passenger air transportation that appears on an internet website or a mobile application, the information described in paragraphs (1)(A) and (1)(B) may be disclosed through a link or pop-up, as such terms may be defined by the Secretary, that displays the information in a manner that is easily accessible and viewable by the consumer.

‘‘(3) DEFINITIONS.—In this subsection, the following definitions apply:

‘‘(A) BASE AIRFARE.—The term ‘base airfare’ means the cost of passenger air transpor- tation, excluding government-imposed fees and taxes.

‘‘(B) COVERED ENTITY.—The term ‘covered entity’ means an air carrier, including an indirect air carrier, foreign air carrier, ticket agent, or other person offering to sell tickets for passenger air transportation or a tour or tour component that must be purchased with air transportation.’’.

      (2) LIMITATION ON STATUTORY CONSTRUCTION.—Nothing in the amendment made by paragraph (1) may be construed to affect any obligation of a person that sells air transportation to disclose the total cost of the air transportation, including government-imposed fees and taxes, prior to purchase of the air transportation.

(3) REGULATIONS.—Not later than 120 days after the date of enactment of this Act, the Secretary of Transportation shall issue final regulations to carry out the amendment made by paragraph (1).

(4) EFFECTIVE DATE.—This subsection, and the amendments made by this subsection, shall take effect on the earlier of—

(A) the effective date of regulations issued under paragraph (3); and

(B) the date that is 180 days after the date of enactment of this Act.

(b) DISCLOSURE OF FEES.—Section 41712 of title 49, United States Code, as amended by this section, is further amended by adding at the end the following:

‘‘(e) DISCLOSURE OF FEES.—

‘‘(1) IN GENERAL.—It shall be an unfair or deceptive practice under subsection (a) for any air carrier, foreign air carrier, or ticket agent to fail to include, in an internet fare quotation for a specific itinerary in air transportation selected by a consumer—

‘‘(A) a clear and prominent statement that additional fees for checked baggage and carry-on baggage may apply; and

‘‘(B) a prominent link that connects directly to a list of all such fees.

      ‘‘(2) SAVINGS PROVISION.—Nothing in this subsection may be construed to derogate or limit any responsibilities of an air carrier, foreign air carrier, or ticket agent under section 399.85 of title 14, Code of Federal Regulations, or any successor provision.’’

2012: The Total Cost Airfare Rule

One side effect of what is known as the Total Cost Airfare Rule once it went into effect on Thursday, January 26, 2012 was that if you searched for an airfare and found that it seemed to have increased considerably from before the Total Cost Airfare Rule went into effect, chances were that the airfare merely included taxes and fees. The total airfare — barring a fare increase, that is — remained the same otherwise.

I not only said at the time that “it is about time, but that this policy was long overdue.”

Airlines infamous for advertising ultra-low airfares such as Allegiant Air and Spirit Airlines — the latter of which advertises so-called “$9.00 airfares” — had reportedly filed legal appeals in 2012 to have the United States Court of Appeals in the Washington, D.C. circuit overturn the rule, claiming that the rule “violates commercial free speech rights.”

One would argue that the practices of advertising ultra-low airfares is nothing more than deceptive advertising. In fact, one could argue that by omitting items as taxes imposed by foreign countries such as Great Britain — where taxes could amount to hundreds of dollars — and exorbitant fuel surcharges on international flights whose valuation seems to have no rhyme or reason at times can also be considered deceptive advertising. How can one explain paying $800.00 on what may have been originally advertised as a $150.00 airfare?

I would agree with those sentiments, and I will even go one step further: airlines should disclose the return — or round-trip — airfare when advertising airfares. I never did like the “one-way airfare based on round-trip purchase” model. I only want to know about the cost of a one-way airfare when it is truly a one-way airfare.

The price of fuel had significantly decreased since 2012 — but the airlines did not eliminate fuel surcharges. On the contrary: those fuel surcharges became “carrier-imposed fees” — which to this day have no clear explanation as to their purpose other than to increase revenue for the airlines and give the illusion that fuel surcharges are indeed gone.

In my opinion, carrier-imposed fees are as much of a scam as mandatory resort fees which are specifically designed to initially deceive potential customers by luring them with an artificially low price prior to the fee being added to the total cost. Those days may be returning if this bill is passed into law in its current form.

Keep in mind, however, that optional ancillary fees such as baggage fees and on-board food purchases are not included as part of this rule and therefore airlines are not required to include them in the overall airfare cost. Although there is a required disclosure of baggage fees upon booking and on confirmations of electronic tickets, I believe that the disclosure should be extended to include all ancillary fees. Customers have a right to know what extra costs are associated with any options they may wish to purchase, and those fees should be easy — not difficult — to find.

Other protections which became available to the consumer include:

  • A ban on increases in airfare after a ticket has already been purchased
  • Required and prompt notification of delays of greater than 30 minutes, as well as cancellations and diversions of flights
  • A 24-hour window for passengers to hold or cancel a reservation without payment or penalty for reservations made a week or more before the departure date, although some airlines already have voluntarily implemented this policy for years
  • The same baggage allowance and fees are to apply throughout the itinerary of a passenger, instead of different fees on different segments in different locations, which only confuses the passenger

The Transparent Airfares Act of 2014

If the name Bill Shuster — who introduced the aforementioned current bill and is one of its sponsors — sounds familiar, it is likely because the Republican congressman representing District 9 in Pennsylvania sponsored the Transparent Airfares Act of 2014, which “declares that it shall not be an unfair or deceptive practice for an air carrier or other covered entity to state the base airfare in an advertisement or solicitation for passenger air transportation if it clearly and separately discloses: (1) the government-imposed taxes and fees for the air transportation, and (2) its total cost.”

The Transparent Airfares Act of 2014 defined “base airfare” to mean the cost of passenger air transportation which excluded government-imposed taxes and fees; and defineds “covered entity” as an air carrier — including an indirect air carrier, foreign carrier, ticket agent, or other person offering to sell tickets for passenger air transportation or a tour or tour component that must be purchased with air transportation.

The Transparent Airfares Act of 2014 was introduced and referred to the House Public Works and Transportation Subcommittee on Aviation — a subcommittee of the House Transportation and Infrastructure Committee — on Thursday, March 6, 2014; and it was reported by Committee on Wednesday, April 9, 2014. The remaining three steps was that it needed to be passed by both the House of Representatives and the Senate; and then signed by the president of the United States.

On Monday, July 28, 2014, the House of Representatives of the United States “overwhelmingly approved bipartisan legislation to return transparency to U.S. airfare advertising and providing greater clarity for consumers by allowing advertisements for passenger air travel to state the base airfare” and separately disclose any taxes and fees imposed by the government and the total cost of travel — bringing it one step closer to being passed; but thankfully, it was unsuccessful.

It was no surprise that many airlines at that time support the Transparent Airfares Act of 2014, as it would have essentially reversed the Total Cost Airfare Rule which became effective on January 26, 2012. The list of supporters for the Transparent Airfares Act of 2014 reportedly included:

  • Air Line Pilots Association International
  • Airlines for America
  • Alaska Airlines
  • Allied Pilots Association
  • American Airlines
  • Americans for Tax Reform
  • Association of Flight Attendants – CWA
  • Coalition of Airline Pilots Association
  • Cost of Government Center
  • Delta Air Lines
  • International Association of Machinists & Aerospace Workers
  • International Brotherhood of Teamsters
  • JetBlue
  • Southwest Airlines
  • Southwest Airlines Pilots’ Association
  • Spirit Airlines
  • United Airlines

Expand the Total Cost Airfare Rule Instead of Killing It?

One might contend that Total Cost Airfare Rule unfairly singles out only airlines and should be extended to other forms of business and commerce pertaining to the sale of goods and services. I wholeheartedly agree, but I also believe that airfares are a good place to start.

It would be nice, for example, to go to a supermarket and have the sales tax already included in the price when you shop for a product. How about having the tax and gratuity already included in the prices of menu items in a restaurant so that you will know exactly how much you will spend? Could there be room for corruption with an all-inclusive pricing model? Perhaps, but at least it should allow for comparison shopping by consumers to be easier overall.

I have always been against what I perceive as deceptive advertising. I want to know the total cost of what I am paying when I book an airfare — or a hotel room or rental car, for that matter; and I have always believed that the full price should be what is advertised…

…and that should include all taxes, fees and surcharges. I do not want to see an airfare advertised for nine dollars and wind up paying $300.00 after all taxes, fees and surcharges are finally included.

Summary

You might once again see airfares advertised for a very low price — before taxes, fees and surcharges are included to represent the true cost of what you will pay for your airline ticket — if this bill is passed into law in its present form…

…and if this bill indeed becomes law, I maintain: do not be fooled by lower airfares which will suddenly be advertised by airlines, as they will be missing the taxes and mandatory fees which are currently included in the total airfare which is advertised by the airlines to you.

Photographs and composite image ©2016 by Brian Cohen.

3 thoughts on “Will Airfares Once Again Be More Confusing? If This Bill is Passed…”

  1. DaninMCI says:

    I agree. In fact rental car companies and hotels are the ones that need this same rule badly.

    1. gobluetwo says:

      Agree completely!

  2. Wes says:

    There are two sides to this. Obviously, it’s easier for travelers to just see a total cost and pay it. Most passengers don’t care how much of the price is tax, and how much actually goes to the airline.

    But for airlines, there is some unfairness in the fact that they effectively are forced to advertise ticket prices that are in excess of its true fare prices (since they have to include taxes). This works against the airlines, as many passengers will incorrectly assume that all or nearly all of the posted price is going to the airline’s coffers, when that’s obviously not the case. At the same time, current law forces a private company to “run cover” for the government’s taxes. The government gets to hide its taxes within a private company’s price, thereby lessening the likelihood of public pressure building against the government when taxes are perceived to get out of control. It’s a shell game, something along the lines of legalized money laundering (since the government is the one doing it). Sure, you can see the taxes on the final screen before buying, but most don’t care to observe the itemized breakdown since the final price is the same as advertised.

    I think the proposed law meets a happy medium. It doesn’t allow the government to forcefully hide its taxes in a private company’s product price, but it also forces the private company to clearly and accurately provide the amount of taxes within its advertisement. The cost to the buying public? We have to do simple addition to arrive at the grand total. The airline gets its justly deserved praise or disdain based upon its true fare price, and the government gets the same based upon the amount of taxes levied in light of the public utility provided.

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