March 7 -  Transparent Airfares Act of 2014 Would Benefit Airlines


Congress Should Instead Focus on Consumers’ Concerns

The U.S. House Transportation Committee yesterday introduced H.R. 4156, euphemistically labeled as the Transparent Airfares Act of 2014 (http://btcnews.co/1nkp6UX), in response to airlines' objections to a 2012 U.S. Department of Transportation (DOT) rule that requires airlines to prominently display total ticket prices in advertising and in internet displays, including government taxes and fees. H.R. 4156 would effectively reverse that DOT rule and undermine a critically important airline-consumer protection that was adopted as a cure to airline bait-and-switch advertising.

Under the 2012 rule, airlines must prominently present in advertisements the total ticket price, which of course is what consumers care about. However, airlines are also permitted to display breakouts of government taxes and fees so long as they are less prominently displayed than are the total ticket prices. Additionally, there is no DOT requirement preventing airlines from also including in an advertisement base ticket prices (net of government taxes and fees), if they are likewise displayed less prominently than total ticket prices. Accordingly, airlines are free today to provide consumers with a detailed breakdown of total ticket prices.  DOT’s obvious mission in adopting this rule was to prevent consumer confusion and deception about the full amount to be paid for various travel options.

H.R. 4156 would undermine DOT consumer protections by resurrecting a misleading and deceptive advertising practice that consumers have only recently gotten rid of. If the bill is passed in its present form, it would allow lower base ticket prices to be highlighted first and foremost, thus diminishing transparency by permitting total ticket prices and government taxes and fees to be disclosed merely in a manner that "clearly presents the information to the consumer," according to the proposed legislation.

The most pernicious consumer consequences of H.R. 4156, however, are with regard to its Internet advertising and solicitation provisions. Airlines would be free to conspicuously display “come-on” lower base ticket prices on initial screens and then dribble out information about the real, higher total ticket prices, including government taxes and fees, on other parts of their websites through a "link or pop up...that displays the information in a manner that is easily ‘accessible and viewable’ by the consumer." This represents an open invitation for a return to unfair and deceptive marketing practices that were widespread before DOT took action in 2012 to protect consumers. It is an advertising trick often called “drip pricing.”

Consumers are loudly crying foul about this ill-conceived piece of legislation. They do not object to airlines also disclosing government taxes and fees (which by the way enable essential airline infrastructure, safety and security) -- but they want first to be told the all-in price so they know the real best options they should consider. For that same reason, what consumers have been demanding for years is the restoration of their ability to shop for, compare and the complete the purchase of the entire air travel product for their trip, such as picking and paying for the exact seat they desire for their flights, wherever airlines choose to unbundle these ancillary services from their base fares. For example, offering one part of the air travel product for purchase through a traditional or online travel agent but them requiring consumers separately to purchase other services they want for their flight somewhere on airlines’ websites is harming millions of consumers every day.

Transparency of the full ticket price upfront with all taxes and fees included and the ability to compare the all-in price of travel including the costs of ancillary services such as pre-reserved seat and baggage fees are what matters to consumers and that is what Congress should be keenly focused on.

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