Motorists looking to fill their tank know the cost for a gallon of gasoline before pulling into the station. The prices, including federal and state taxes, are posted on roadside signs and at the pumps.
That was the thought behind consumer-friendly rules the U.S. Department of Transportation began enforcing in 2012 that require the airlines to advertise the total ticket price instead of an artificially low price that doesn’t account for mandatory taxes and fees. Customers clicking on an airfare advertised for $230 would find it actually cost $300 when it came time to click the purchase button and book the flight.
Consumer groups overwhelmingly support the rules. But that didn’t stop the House last week from bowing to pressure from the airlines and passing a foolish bill that would allow the airlines to again engage in the practice of advertising their base fares without the added taxes and fees.
The Senate, where the measure is now headed, should kill the bill before it gets off the runway.
House sponsors had the gall to name the bill the “Transparent Airfares Act,” a title as deceptive as the practice it hopes to reinstate. Led by U.S. Rep. Peter DeFazio, a Democrat from Oregon, the act purports to enlighten the public by separating the base costs from the costs imposed by the government. But there is nothing under the existing rules to stop the airlines from listing the taxes and fees during the booking process, letting consumers know how much of a bite the government is taking.
Allowing a base price to be advertised up front frustrates consumers by hiding the actual cost until they’ve been lured onto the computer and invested the time in comparison shopping and checking flight schedules. According to the nonprofit Consumer Reports, airline taxes and fees can be particularly volatile, varying from city to city and airport to airport.
The rules now in place simply require the airlines to advertise the actual price, just like other taxed products.
Airlines that run afoul the rules can face penalties. In May, the DOT fined Southwest $200,000 after learning the airline advertised $59 fares from Atlanta to several major cities on certain dates but didn’t have any seats available for that price. It tacked on an additional $100,000 fine for violating a previous order to comply with the rules.
No wonder the airlines want a repeal of the full-fare disclosure rules.
This House bill is not about transparency, as its sponsors would have you believe. It’s about a bait-and-switch tactic that the airlines shouldn’t be allowed to practice.