Airlines Want to Hide Fees, Government Taxes from Sale Prices

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The nation’s largest airliners are urging Congress to overturn a Department of Transportation rule that requires passengers to be notified of taxes and fees in advertisements — and it looks like they may get their wish.

Two years ago, airliners were told that advertising low-cost airfare while hiding taxes and fees was misleading to passengers. The Department of Transportation put an end to the deceptive advertising by requiring airliners and travel websites disclose the total cost of airfare up front — which might be why you haven’t seen any good deals on airfare lately.

Several companies have been handed stiff fines by the DoT for running afoul of the rule. Allegiant Airlines was hit with a $100,000 fine after it deceptively advertised “free” flights that didn’t mention a $15 ticket fee up front. Southwest Airlines was fined $200,000 for not making enough seats available to passengers under various promotions. And the booking website TripAdvisor was fined $80,000 for violating the rule altogether by hiding taxes and fees from passengers.

Frustrated, the airline industry challenged the DoT rule in court — and lost. But they would not accept defeat in their crusade to confuse passengers with deceptive low-fare pricing.

The airliners, backed by unions representing pilots and flight attendants, are now working with Congress on a bill that, if passed, would allow the industry to revert to its old ways of hiding fees and taxes when customers shop around for airfare.

Amusingly, the House bill is called the Transparent Airfares Act of 2014, though it actually offers airlines an out when it comes to transparency. From the bill’s text:

“It shall not be an unfair or deceptive practice…for a covered entity to state in an advertisement or solicitation for passenger air transportation the base airfare for the air transportation if the covered entity clearly and separately discloses the government-imposed taxes and fees associated with the air transportation and the total cost of the air transportation.”

As Consumerist points out, this would allow an airliner to advertise a $39 one-way fare that actually costs more than $50 after taxes and fees are factored in — something the airliners were doing prior to 2012. And the bill is written in such a way that the practice could be extended to ticket brokering websites like TripAdvisor should they choose.

Consumer interest groups are not happy.

“Those deceptive and infuriating ads that were banned years ago are sneaking back,” the website wrote on its blog in April. “This bill is completely anti-consumer while at the same time denigrating customers and constituents alike. It is all about making airfares less transparent. The name of the bill is just the start of the false advertising.”

But Pennsylvania Rep. Bill Shuster, who introduced the so-called “transparency” bill in March, says the rule enforced by the DoT two years ago doesn’t solve what it set out to — the rule adds to consumer confusion, Shuster argues, because the regulation “actually hide the cost of government from consumers.”

“Virtually all consumer products are advertised at a base price, with taxes added on at the point of purchase,” Shuster, whose political campaign has been the recipient of thousands of dollars from airliners, said in a statement. “Department of Transportation regulations have fundamentally and unfairly changed the advertising rules for airfares by requiring all government imposed taxes and fees to be embedded in the advertised price of a ticket.”

The bill, which has bipartisan support in the House, is moving through Congress at breakneck speed. According to the website, it has a 70 percent chance of passing.

Matthew Keys is a contributing journalist for TheBlot Magazine.

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