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What Exactly Does ‘Airfare Transparency’ Mean? What Exactly Does ‘Airfare Transparency’ Mean?

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What Exactly Does ‘Airfare Transparency’ Mean?

House to Vote on Legislation That Irritates Consumer Groups

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The House overwhelmingly supports legislation to allow airlines to show taxes and fees separately from airline fares. Photo by Eric Thayer/Getty Images.

Words can be so tricky. If you're a member of the House Transportation and Infrastructure Committee, Republican or Democrat, you probably think "airfare transparency" means that federal taxes and fees should not be embedded inside the total cost of a plane ticket. The plane ticket price should be broken out from the taxes and fees so you know exactly what you're paying. If you're a pilot or an airline executive, you're on this team, too. We'll call you Team A.

Team A, here is the bill you can cheer on—the Transparent Airfares Act. It cleared the Transportation Committee in April without incident and is set to pass the House this week "on suspension," a parliamentary short cut reserved for naming post offices and congratulating Little League World Series team winners. It has supporters across the political spectrum, from the truly liberal Rep. Eddie Bernice Johnson, D-Texas, to the libertarian conservative Rep. Reid Ribble, R-Wis. With a diverse slate of co-sponsors like that, House leaders see no reason not to pass it without any fuss. It doesn't hurt that the savvy and well-liked Transportation Committee Chairman Bill Shuster, R-Pa., sponsors the bill.

 

But let's say you're on Team B. That means you're in camp of Sen. Robert Menendez, D-N.J., and most consumer or travelers' advocacy groups. You probably think that "airfare transparency" means that you should know, up front, the total amount that your plane ticket will cost, including federal taxes and fees. That total should be available to you while you're still choosing among your flights. You think that Shuster's bill is a "gimmick" (Menendez's term) or worse, sheer fraud. "Airlines lied to the T&I Committee saying DOT is forcing them to hide federal taxes and fees—period, full stop," said Business Travel Coalition Chairman Kevin Mitchell in an email.

Well, Team B, Menendez has a bill for you—the Real Transparency in Airfares Act. (The snarky name was definitely intended.) Menendez's bill goes in the opposite direction of Shuster's bill, setting penalties up to $55,000 for "unfair or deceptive" methods of marketing airfares. The bill specifically looks for marketers that try to get around the Department of Transportation rule mentioned above, which dictates that taxes and fees cannot be advertised separately from the airfare.

Both sides have legitimate beefs. Travel and consumer advocates love DOT's rule because it means airlines can't "sneak in" a boatload of extra taxes fees the moment before a traveler clicks on the "Complete Purchase" button. They fear that Shuster's bill would allow the airlines to engage in all sorts of trickery to spring those costs on consumers at the last minute.

 

But airlines, backed up by the Air Line Pilots Association, say the rule places an unfair burden on them that no other retail seller has to deal with—that they must include taxes they don't control in their commercial price tag. This wreaks havoc with the airfare pricing market, which already has razor-thin margins, and makes air travel less competitive compared to other forms of travel, Airlines for America President Nick Calio said when I blogged about this bill in March.

For the moment, Team A is winning. Menendez's bill has no co-sponsors and no committee action to date. The House has already signaled its approval for Shuster's bill.

But blocking legislation is a lot easier than passing it. Menendez's bill is meant to be a foil to Shuster's and not much else. Team B has a worthy champion in him should the supporters of unbundling the cost of an airline ticket try to make inroads in the Senate. He is pretty well respected and can easily put up a fuss that would ensure the bill dies there.

No matter what happens, we still won't have a consensus about what a "transparent airfare" really is. At least until our credit card statements arrive.

 

For our insiders: Who is right about the DOT rule? Does it force airlines to "hide" taxes and fees? Or does it clarify the cost for travelers? Should the rule be changed to require, say, a total price and a breakout of the airfare and the taxes and fees? How controversial is this issue, considering that Democrats and Republicans support Shuster's bill? What would the ideal airline marketing rule look like? How are airlines different from other retail sellers, if at all?

[Note: This is a moderated blog on transportation issues. Comments are approved on a case-by-case basis. Contact me if you want to be a regular commenter.]

 

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