Transparent Airfares Act of 2014: A proposal based on lies

[jimmy olsen]

Fucking Airlines

http://www.chicagotribune.com/travel/sns-201404150000--tms--travelpkctnxf-a20140415-20140415,0,3959227.column

Ed Perkins on Travel

April 15, 2014
Last week, the House Transportation and Infrastructure Committee marked up a proposed bill that would allow airlines once again to omit taxes and fees from advertised prices and instead add them in later, just before you buy. Make no mistake: This "Transparent Airfares Act of 2014" is an anti-consumer bill. It was drafted, marked up, and sent to the House without any input from consumer or business travel interests. And it is based on lies.

-- Lie Number 1: Consumers want this information. Not true: I know of no credible consumer advocacy or business travel group that wants this change, and the most important ones all oppose it. Politicians often support bad proposals by solemnly asserting, "The American people want..." without any factual basis whatever, and this is no exception. Who really wants this bill? Airlines want it, and their lobbyists were apparently even successful enough to get support from members of Congress who are normally sound on consumer issues. Consumers really want what the Department of Transportation gave them in 2012: Honest, all-up advertising of the true cost of an airline ticket.

Lie Number 2. "Government fees and taxes are hidden from the public." No, airline fees and taxes are not "hidden" under current rules; airlines post them in easily accessible pull-down menus or other statements clearly and openly for anyone who cares.

-- Lie Number 3. "Virtually all consumer products are advertised at a base price, with taxes added on at the point of purchase." Again, not so. The only taxes traditionally added at the point of purchase are state and local sales taxes, which do not apply to airline tickets. Federal excise taxes and user fees, on the other hand, are routinely included in the base prices on all products to which they apply: The biggest federal excise taxes are on gasoline, tobacco products and alcoholic beverages, and those taxes are always included in the posted prices you see where you buy them. Moreover, unlike the case of sales taxes, virtually all of the air ticket taxes, fees and charges go directly or indirectly to fund government programs that support air travel: airports, air traffic control, security, customs and immigration, and such.

-- Lie Number 4: The bill will "restore transparency to the advertising of U.S. airline ticket prices." No, you don't have to be an astrophysicist to figure out that the bill will obscure the total cost of travel, not make it more transparent.

And there's a subtext to these lies. What some airlines really want is not limited to excluding government taxes and fees. What they really want is to exclude their own "carrier imposed" fees and charges, like the notorious "fuel surcharges" they tried before DOT made them quit. You remember those bad old days: "London just $300 round-trip" in big type or on the first screen, with a footnote saying "plus a fuel surcharge of $400." That practice, which the FTC calls "drip pricing," is a scam, and although airlines can't use that scam on ordinary ticket sales, some still use it with frequent flyer awards and in other non-ticket circumstances. The would-be scammers supporting this bill probably won't get that far this time, but if they can move this current dog through the Congress now you can bet they'll be back for a round two.

For now, the bill is a long way from law, with an uncertain outcome in the full House and the Senate. But even if it doesn't pass this time, airline lobbyists will keep working on future Congresses. If you value honest airline advertising, let your congressional delegation know you think this is a terrible idea. Check consumertravelalliance.org/ and consumertraveler.com/ for other takes on this important issue.

This is the first of two columns focused on consumer issues before the government. Next week: DOT has the authority to police outrageous change fees on international tickets but refuses to obey the law.

[MadImmortalMan]

They have become too consolidated to be a competitive marketplace anymore. There's a reason airlines are making money now, when they've been traditionally a sure loser. No more competition.

[Zanza]

Not showing the real price of something after taxes is one of the most annoying things about buying anything in the US.

[MadImmortalMan]

The real price is before taxes. You don't want to know how much tax you're paying? 

[LaCroix]

does it really matter?

[MadImmortalMan]

does it really matter?

It's a matter of citizenship. So it matters in that sense yes.

[Warspite]

The real price is before taxes. You don't want to know how much tax you're paying? 

I know exactly what tax I pay (20% VAT on most goods, except certain zero-rated products like books) without the mental gymnastics of trying to work out whether the £20 I have in cash in my pocket will cover a £17.50 purchase.

[MadImmortalMan]

That's nice but this is about the US and we don't have it that simple. 

[LaCroix]

It's a matter of citizenship. So it matters in that sense yes.

i meant the article. how much material effect does non-transparency currently have (or would likely to have) on inflating prices across the board? raising prices works only if everyone is on board, and i'd imagine there will always be regional players that try to steal customers from delta, etc. by offering lower prices. flying is expensive, and people who fly tend to have access to the internet. this means customers are better able to compare prices, which acts as further incentive for airlines to not engage in price inflation

[MadImmortalMan]

i meant the article. how much material effect does non-transparency currently have (or would likely to have) on inflating prices across the board? raising prices works only if everyone is on board, and i'd imagine there will always be regional players that try to steal customers from delta, etc. by offering lower prices. flying is expensive, and people who fly tend to have access to the internet. this means customers are better able to compare prices, which acts as further incentive for airlines to not engage in price inflation

Ah I see. I don't think it really does. The price inflation as I see it is coming from the cartelization of the airline market in the US. They've pretty much consolidated and stopped most competition against each other between the major players. The transparency issue is probably just a ploy so they can blame the high prices on other things like taxes and airport fees.

[Zanza]

The real price is before taxes. You don't want to know how much tax you're paying? 

No, why should I care? In the end I want to know how much money something costs me. The exact proportion of taxes and other components of the price doesn't matter to me.

The most atrocious example I can remember was a hotel room in Philadelphia, which had like three additional taxes on top of the price that was shown when you booked the room. Sales tax, tourism tax and hotel tax or something like that.

[Zanza]

Ah I see. I don't think it really does. The price inflation as I see it is coming from the cartelization of the airline market in the US. They've pretty much consolidated and stopped most competition against each other between the major players. The transparency issue is probably just a ploy so they can blame the high prices on other things like taxes and airport fees.

I thought you had budget airlines too that would put a lot of pressure on prices. Like Southwest, Jetblue, Spirit or so.

[DontSayBanana]

Taxes are a given.  The only time I expect to see taxes included in an advertised price is at the gas pump, so I see that as a non-issue.

Fees, on the other hand... if they're common enough that they're going to apply to all customers, then I'm sorry, but advertise them in the price.  Nothing pisses me off like seeing a $400 ticket magically become a $450 or $500 ticket at checkout.

[Zanza]

+$1 convenience fee

WTF.

[garbon]

+$1 convenience fee

WTF.

Convenient.