There is something awesomely brazen about airlines calling for “transparent” fare pricing after they’ve pioneered opacity in their own pricing structures. It was airlines, after all, that rescued themselves from financial disaster by “unbundling” fares and charging consumers for “extras” like checked baggage and seat assignments (although cabin pressurization remains free, for the time being). The airlines are now insisting that consumers would be better off – and better informed – if carriers were allowed to omit government taxes and fees from advertised fares. With help from compliant lawmakers, airline lobbyists have drafted the Transparent Airfares Act of 2014. According to USA Today:
the proposed law would remove government consumer protections by allowing an airline to initially claim that its tickets cost less than they actually do. Press the "buy" button online for the deceptively low airfare, and all taxes and mandatory fees would be added to your bill.
To defend the legislation, airline lobbyists have made some decent arguments. Or at least, arguments that seem decent until they get real scrutiny.
“It simply isn’t appropriate for the United States government to impose any amount of taxes and fees on air travel and then force the airlines to take the blame for the levies,” argued Nicholas Calio, president and chief executive of Airlines for America, an industry trade group.
“Other modes of transportation don’t have to lump taxes in with advertised fares,” Calio wrote in his letter to The New York Times. “Neither do hotels, rental cars or virtually any other consumer product or service. Airlines shouldn’t have to either.”
This would make sense if current regulations actually prevented airlines from identifying the taxes levied on any given fare. But in fact, the Department of Transportation already allows that sort of breakout. The agency simply insists that airlines make the bottom-line price more prominent than the unbundled, tax-exclusive price.
The Business Travel Coalition, an advocacy group for the “managed travel community,” has made this point nicely:
- Under the 2012 DOT rule, airlines must prominently present total ticket prices in advertisements; however, they are permitted to display breakouts of government taxes and fees so long as they are less prominently displayed than 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. As such, and as a matter of fact, airlines are free today to provide consumers with a detailed breakdown of total ticket prices, including government taxes and fees.
But that’s not what airlines want. In fact, they want something very nearly opposite: the freedom to hide those taxes whenever it suits them.
Apparently, that sort of opacity qualifies as transparency, at least in Washington.