Business Travel Coalition
Public Policy Analysis
This week, in a scene right out of NetFlix’s House of Cards, H.R. 4156, the Orwellian-titled Transparent Airfares Act of 2014, was passed in the U.S. House of Representatives by voice vote with no chance for debate and no record of how each Member voted. Representative Bill Shuster (R-PA), Chairman of the powerful House Transportation Committee, and Committee Member Peter DeFazio (D-OR), championed the bill.
The bill was submitted at the behest of airlines that have long objected to a U.S. Department of Transportation (DOT) full fare advertising rule that requires airlines to prominently state all-in airfares – i.e. total ticket prices that include mandatory government taxes and fees as well as mandatory airline charges.
That DOT rule was and is broadly and vigorously supported by consumer and travel industry groups. When it was adopted in 2012, it was the necessary cure for chronically misleading airline advertising. For years, airlines had touted low base fares as a come-on, while masking from the consumer the much higher entire price that included government taxes and mandatory airline fees, such as carrier-imposed fuel surcharges. Oregon Representative Peter DeFazio was a lead sponsor of this special-interest bill that would only benefit airlines and harm consumers.
Astonishingly, Representative DeFazio, in arguing before colleagues for passage of H.R. 4156 on the House Floor this week, under a suspension-of-the-rules procedure, stated: “Apparently, we have done something unusual around here, created something that doesn’t seem to be ‘controversial,’ except among a ‘few talking heads’ out there somewhere.”
That's just not so. In fact, it’s just a politician’s spin.
Since April 9, 2014, when H.R. 4156 was passed out of Committee (after just nine minutes of discussion by its proponents, and without hearings or an opportunity for consumer or travel groups to weigh in) scores of prominent corporations, airport authorities and travel companies have written to Congress outlining their opposition.
Likewise, consumer and travel organizations expressed their strenuous objections to this bill to Congress. These groups include AAA, AirlinePassengers.org, Association for Airline Passenger Rights, American Society of Travel Agents, Business Travel Coalition, Consumer Action, Consumer advocate Ed Perkins, Consumer Federation of America, Consumers Union, FlyersRights.org, National Association of Consumer Advocates, National Consumers League, Public Citizen, Travelers United and U.S. PIRG. Moreover, 128,000 air-travel consumers joined in strong opposition to H.R. 4156.
Anyone who took the time to examine the tsunami of opposition by this broad-based spectrum of organizations (their statements are readily accessible at http://btc.travel) would shake their heads in disbelief at the spin that this anti-consumer bill was not “controversial.”
Rather than a simple and uncontroversial bill such as the naming of a federal building — the type of bill for which the suspension-of-the-rules procedure is designed — H.R. 4156 is one of the most controversial consumer-aviation bills in a generation.
As airline-imposed fees for services, long considered included in the price of a ticket, have proliferated during the past 6 years, DOT promulgated the full fare advertising rule to help minimize consumer confusion about the true cost of flying by at least allowing travelers to compare prices across airlines that included all mandatory airline add-ons and taxes that cannot be avoided. H.R. 4156 would effectively reverse that DOT rule, reintroduce widespread confusion to airline ticket pricing and enable airlines to mislead consumers with deceptive advertising practices.
H.R. 4156 enables airlines to obscure mandatory government taxes and airline fees by allowing airlines to reveal them later in the buying process, through a link or popup. This is called “drip pricing” and has been recognized as deceptive by competition and consumer protection authorities around the world. The practice involves sequentially revealing components of the total price and not divulging the full price until the end of the purchasing process. The final price paid may be significantly higher than the ‘headline price,’ but after investing time and effort in the shopping and booking process, consumers are less likely to start over and more likely to just surrender to the higher price. Consumers want to know the all-in price of air travel right up front so they can efficiently compare the best real options; a cornerstone of the free market system.
As with House of Cards protagonist Frank Underwood, there is always more than meets the eye when it comes to special interests and Congress and their grand schemes for corporate and personal political gain at the expense of consumers. The truth is that campaign contributions by special interests often trump consumer interests.
Airlines will now seek a sponsor in the Senate for a companion bill to H.R. 4156. Fortunately, Senators and their staffs have had the time to understand both the intent of this misguided legislation and the likely negative consequences for consumers were such a bill to become the law of the land. All Americans should contact their U.S. Senators and encourage them to reject such an airline entreaty.