Notice to anyone booking a flight: Airfares have been in the spotlight in Washington, D.C., scrutinized over how they are presented in advertisements and on the web, as well as for a security-fee hike that’s baked into ticket prices.
Consumer groups are continuing to marshal forces after the House passed a bill last week that would allow airlines to advertise fares without taxes and fees included. That amounts to bait-and-switch pricing, they claim.
But the airline industry says advertising base airfares would emphasize to consumers how much of their total ticket price goes to the government.
Meanwhile, Airlines for America, an airline-industry association, and the International Air Transport Association asked a U.S. appeals court to review the Transportation Security Administration’s fee hike that took effect this month, calling it an “unlawful TSA cash grab.”
The airfare-advertising bill, dubbed the Transparent Airfares Act of 2014, was passed by the House and would reverse a 2011 rule by the Department of Transportation that required airlines to advertise and display on internet searches full fares, including taxes and fees.
The Business Travel Coalition calls the bill “Orwellian titled” because it would make prices less transparent for consumers, who might be faced with sticker shock when they find a $239 airline booking really costs closer to $300.
The bill still needs approval in the Senate, where disappointed consumer groups continued their objections, writing to members of the Senate Commerce Committee.
The bill would “undermine DOT consumer protections by resurrecting a misleading and deceptive advertising practice,” the consumer groups wrote. “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.”
The consumer groups include AirlinePassengers.org, Association for Airline Passenger Rights, Business Travel Coalition, FlyersRights.org, National Consumers League and Travelers United and U.S. PIRG.
But Airlines for America says the bill enables travelers “to clearly see how much of their advertised ticket price is in reality going to Washington in federal taxes,” according to a statement.
The association notes that fliers pay up to 17 different aviation taxes and fees. And with last week’s increase in the TSA Passenger Security Fee, nearly $63, or 21 percent, of a typical $300 domestic round-trip ticket goes to federal taxes and fees “in disguise,” it said.
Consumer groups say that’s a mischaracterization.
“Airlines falsely claim, and continue to double-down in the press, that the DOT rule forces them to bury taxes. The opposite, of course, is true. Airlines can list these amounts in an advertisement or solicitation so long as they are less prominently displayed than the total airfare,” said Business Travel Coalition founder Kevin Mitchell.
The chances of the bill, HR 4156, becoming law are unclear.
While Mitchell concedes it’s only a matter of time before a companion bill finds a sponsor in the Senate, he contends there is little interest in passing it “because they had the time to listen to consumer and other groups. They understand how flawed HR 4156 is.”
If it passes the Senate, he fears it will get attached to a must-pass bill, such as reauthorization of the Federal Aviation Administration. “If that’s the case, the president may not be able to veto it,” he said.
The airline association doesn’t expect action before November’s elections, said spokeswoman Jean Medina.
“Issues important to airlines and their customers will take center stage in Congress next year as the FAA’s authorization is debated,” she said. “The fact that the bill passed the House of Representatives sends a strong signal to legislators writing the FAA reauthorization that this issue should be included and addressed.”
Meanwhile, a senator has introduced a competing bill, one that would make the current Transportation Department full-fare advertising rule a law and double maximum penalties for deceptive practices to $55,000 a day. Sen. Robert Menendez, D-N.J., dubbed it the “Real Transparency in Airfares Act.”
Among the fees that the airline industry grumbles about is one for the TSA. In a court petition, the airline industry claims a newly raised TSA fee is improper.
“TSA is overstepping its bounds,” said Airlines for America President and CEO Nicholas Calio, adding that a $2.50 fee that was raised to $5.60 without a cap on how much travelers are charged for a one-way trip ignored the intent of Congress. “Air travelers are not an ATM for the government and should not be treated as such,” he said in a statement.
Airlines for America says the fee hike is set to cost travelers $1 billion more annually.
The TSA declined to comment, citing pending litigation.