Are airlines going to get away with a lie?

Ivan Cholakev/Shutterstock
By | May 3rd, 2014

If the airline industry gets its way, and its cleverly named Transparent Airfares Act of 2014 passes, then the price of your airline ticket could drop significantly. At least, it’ll look that way.

Airlines say about 20% of your airline ticket goes directly to the federal government and airports in the form of taxes and fees — money that, for the most part, pays for essential services such as airport security, air traffic control and passenger facilities.

But would the cost of your ticket actually go down with the law? Nope.

Instead, 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.

Airlines insist that’s a fair way to advertise prices, and in line with other industries. But consumer groups fear it will give airlines a license to lie to travelers, who are deeply suspicious of it.

Airlines say they shouldn’t be.

“The bill is entirely pro-consumer, as it is about restoring transparency and truth in advertising so airline customers can see exactly what they are paying for the actual fare and in taxes,” says Katie Connell, a spokeswoman for A4A, an airline trade association.

The law would unravel a Department of Transportation regulation called the full-fare advertising rule, which was supported by consumer groups and passengers and upheld by courts. It required airlines to quote a fare that included all taxes and fees. That rule, airlines contend, doesn’t protect consumers but allows the government to bury tax spikes inside a ticket price.

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“We believe our customers have a right to know where their travel dollars are going, much like they do with nearly every other consumer product,” Connell says. Buy virtually any durable consumer good, such as a car or TV, and the manufacturer can quote a rate that excludes sales taxes.

That’s a seductive argument, but it’s wrong on every level, passenger advocates say. Businesses regulated at the federal level and facing similar taxes to airlines — notably gas — must quote a complete price, including all taxes, they point out. Airlines are exempt from state and local taxes, which means they can’t be compared with most other consumer purchases, say critics of the proposed law. And they note that airlines are free to break down their taxes and fees after quoting an initial, all-inclusive price.

In short, the bill would dupe us into thinking fares are cheaper than they are. “It is all about making airfares less transparent,” says Paul Hudson, president of “The name of the bill is just the start of the false advertising.”

Kevin Mitchell, chairman of the Business Travel Coalition, doesn’t mince words: “It’s a terrible bill on every level.”

The Transparent Airfares Act creates a false problem — that airline taxes are too high and that airfares aren’t “transparent” enough — and tries to fix it at the expense of consumers, he adds.

Mitchell says that, privately, airline lobbyists are pitching this as an economic stimulus bill to boost travel and tourism. The industry says there’s greater consumer demand when a lower base price is presented first.

Related story:   Would airlines still be profitable if you stripped away fees?

“They want to drive demand and revenue through misleading and deceptive lower base prices, period, full stop,” he says.

No surprise, then, that in the weeks since the bill’s introduction, I haven’t been able to find a single consumer — not one — who sincerely believes this bill is a good idea.

“With all of the problems this country is facing, I can’t believe Congress is wasting the taxpayer’s money with this drivel,” says frequent flier Keith Holland, who runs an investment firm in Little Rock.

One thing’s certain: The Transparent Airfares Act won’t make airfares more transparent. It will make it harder to know the true price of a ticket. If there were any doubts that many airlines are building their business model on deception, there are none now.

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Join the popular uprising

Sign the petition opposing the Transparent Airfares Act.

Tell your airline

Contact your preferred airline and let it know you support the Transportation Department’s full-fare advertising rule, which requires it to quote a complete fare, including all required taxes and fees.

Contact your congressional representative

A version of the Transparent Airfares Act already has been introduced and marked up in a committee without any meaningful participation from consumer groups.

Tell your senator

A companion bill is working its way through the U.S. Senate, but it can be stopped if enough constituents oppose it.

  • Cybrsk8r

    Here’s my question, Chris. Does this take us back to what we had before? Which wasn’t good, but it was at least manageable.

    But this line in the article: “Press the ‘buy’ button online for the deceptively low airfare, and all taxes and mandatory fees would be added to your bill.”, seems to suggest the taxes and fees would be added to you credit card AFTER you book the ticket. Is this true? If so, this law goes WAY beyond horrible.

    So you THINK the ticket is $500, but then SURPRISE, your CC is actually charged $600. This doesn’t BORDER on credit card fraud, it IS credit card fraud plain and simple.

  • This takes us back to where we were before. You select a fare for purchase online and only when you go to settle up is the grand total revealed. I agree, to have 30 percent or more added to the cost of your fare right before you purchase the ticket is deceptive.

  • frostysnowman

    Are the airlines supporting this bill? If so, then it’s not pro-consumer, it’s pro-airline.

  • $16635417

    I don’t ever recall THAT being an issue. The credit card was charged what you agreed for it to be charged. Airlines would advertise a base fare without government imposed taxes and government imposed fees for years. They then started adding their own mandatory fees, such as fuel, after the base fare was displayed. (Similar to hotels and mandatory resort fees.) Your “purchase button” screen had the total you would be charged, nothing added after you hit submit.

    What I don’t know if this allows airlines to go back what they initially did by quoting base fares and government imposed fees/taxes separately…or also allow them to add their own mandatory fees as well.

    I personally have no issue with government imposed taxes and government imposed fees being added after the quote. I have no issue with optional fees being broken out. I DO not want to see mandatory airline imposed fees added to the fare.

  • TonyA_says

    You be the judge.

    Suppose you fly from New York to Los Angeles on this jetBlue flight:
    B6 523Z 30MAY FR JFK LAX 859P 1219A#1

    Will the bill add or remove transparency in advertised fares?

  • TonyA_says

    Another example …

  • TonyA_says

    The real motivation behind this bill is to allow airlines and online agencies to make airline tickets appear deceptively cheaper when you first see their advertised prices.
    It also makes it harder for consumers to do simple comparison shopping.
    This bill does jack squat for the American Consumer.
    Anyone associated with the bill should be ashamed of themselves.

    The excuse used by the bills proponents is that the current law hides what you are paying for in government taxes and fees. I believe this is baloney because you can always look at your ticket’s FARE CONSTRUCTION LINE and read it.
    If the average Joe Blow wants to know what he pays the government in taxes and fees for a whole domestic ticket then here it is:
    7.5% (levied on the BASE FARE) – US Domestic Transportation Tax. Goes to FAA Airport and AIrway Trust Fund (AATF). Coded as US in your ticket.
    $4 per flight segment – US Domestic Flight Segment Tax. Goes to FAA Airport and AIrway Trust Fund (AATF). Coded as ZP in your ticket.
    $2.50 per enplanement (maximum $5 per direction) – Passenger Civil Aviation Security Service Fee (aka 911 fee, this goes to DHS). Coded as AY in your ticket.
    $4.50 or less depending on airport used (no more than 2 charged per direction) for explanement- Passenger Facility Charge (this goes to the the airport). Coded as XF in your ticket.

  • Cybrsk8r

    I agree. Anything the airlines are pushing this hard for, is not in our best interests.

  • Name

    “Press the “buy” button online for the deceptively low airfare, and all taxes and mandatory fees would be added to your bill.” Seems unbelievable that I could “buy” a fare and be charged 20% more without my knowledge or approval. Isn’t this the opposite of transparent? What am I missing here?

  • MarkKelling

    Didn’t see the coded values you pointed out, but here is a snip from a current ticket receipt I have for a flight next week. Exactly what is not transparent in this and how would the proposed law change this to be better? How is what I paid in taxes vs. airfare not clear? When I selected the flights, I saw my total cost would be $756.50. Why did I need to know any finer detail of the breakdown at that point? It’s not like I could negotiate any part of that price.

    Fare Breakdown

    U.S. Federal Transportation Tax:51.34U.S.
    Flight Segment Tax:8.00
    September 11th Security Fee:5.00U.S.
    Passenger Facility Charge:7.50Per Person


    eTicket Total:756.50USD

    The airfare you paid on this itinerary totals: 684.66 USD
    The taxes, fees, and surcharges paid total: 71.84 USD

    Fare Rules:Additional charges may apply for changes in addition to any fare rules listed.

    Cancel reservations before the scheduled departure time or TICKET HAS NO VALUE.

    EDIT: The questions in this comment are not aimed specifically at you TonyA or anything you stated in your post.

  • MarkKelling

    This is a snip from the actual bill and is the part that really has me worried:

    10 ‘‘(A) BASE AIRFARE.—The term ‘base air
    11 fare’ means the cost of passenger air trans-
    12 portation, excluding government imposed taxes and
    13 fees.

    So is that “government imposed taxes and government imposed fees” or “government imposed taxes and any fees including those charged by the airline.” Subtle difference, but one I am sure the airlines will jump on to claim that this wording means only the air fare needs to be shown in advertisements excluding anything that is labeled a fee and then they will break everything possible out into a “fee” so that they can charge a $1 airfare. Am I being paranoid? Probably not since this is airlines we are talking about. :-)

  • $16635417

    That’s not reality. If the bill passes, using Tony’s examples above, you would see a $174.88 fare, select it and then come to a purchase screen where the government fees and taxes are added to the total making it $199. At that point, you can then choose to purchase or not.

    I could care less if government fess and taxes aren’t included in my quote. What I DON’T want is to be quoted a $99 fare, get hit with airline imposed mandatory fees for fuel, reservation surcharges and other stuff bringing the subtotal to $174.88 THEN adding the govt fess and taxes to bring the total to $199.

  • lhbbcp

    How about being transparent about the total amount the customer will fork over?

    I don’t need so much to know where my money is going as to know the total amount I will be paying.

  • TonyA_says

    If the proposed law is passed, airlines or OTAs can advertise your ticket for only $684.66. Then when you check out, they can charge you $756.50.

    That is how stupid the new proposal is :-)

  • $16635417

    Including taxes in the price of goods effectively hides the tax. How many people know the tax they paid on an airline ticket, even though it is in the breakdown? (Worse…how many don’t care?)

    $250 in taxes on an $839 ticket!! 30% in taxes!! (Are we misdirecting our outrage?)

  • $16635417

    “I don’t need so much to know where my money is going”

    That’s the problem. You don’t care that the tax is 30% of the fare in some cases, but you should.

  • $16635417

    Not being paranoid. That’s the question I’ve been asking as well. I can deal with government imposed fees and taxes not being included in the initial price. (Just like we buy most of our goods.)

    I think most of us can agree that we don’t want to see a $1 fare and then have line items for fuel, employees wages, contribution to new aircraft purchase, maintenance fees, corporate office air conditioning, attorney retainers and the like all adding $200 to the ticket. (And then government taxes and government fees added after that.)

    I would certainly like clarification as well. It seems like if they just add the words “government imposed” in front of the word “fees”, it eliminates the doubt and potential loophole.

  • These are government excise taxes that, for the most part, go directly to infrastructure. Without them, air travel with grind to a halt — no terminals, no security, no air traffic control. But they can’t be compared to sales taxes imposed by the state in any meaningful way, other than the fact that they are taxes. The airline industry is trying to have its cake and eat it too on this issue.

  • TonyA_says

    Absolutely! The government imposes taxes and fees on jet fuel as well as charges for other fees like landing fees, etc.
    Nothing will stop airlines from adding cost codes to the service fees section of your ticket price. They can claim these were added to recoup what they paid the government :-)

  • Carver Clark Farrow

    Two separate and in my mind, unrelated issues

  • $16635417

    I understand where the fees go. Just like I understand WHY we need a tax on gas.

    What’s wrong with the $839 fare being advertised and when I go to purchase it I see a total of $1089.10…knowing the difference is solely government imposed taxes and (government imposed) fees? It’s like that with almost everything I buy.

    Again…if the bill is going to allow AIRLINES to add THEIR new fees to the base fare, then I have an issue. Is there a definitive answer if the bill will allow that?

  • Carver Clark Farrow

    There are two issues which we shouldn’t confuse.

    1. The lack of being able to make meaningful comparison shopping. Unlike most purchases, I can’t determine the precise out the door cost to me until the last moment with travel purchases.

    2. The lack of transparency in government taxes, fees, etc in travel pricing.

    The problem is that airlines jump on number 2, to destroy #1.

  • Carver Clark Farrow

    The big difference is that 99% of consumer purchases have taxes which are easily calculated by the consumer, e.g. 10%. Airline taxes are both flat rate and fixed, and depend on numerous factors such as routing, class of service, etc., making it difficult, if not impossible for an average consumer to perform accurate comparison shopping between airlines and routes.

  • By the way, the petition against so-called “transparent” airfares just hit another milestone: 25,000 signatures. Thank you to everyone who supported an honest airline industry.

  • $16635417

    There’s now a tax based on class of service? When did that happen?

  • Carver Clark Farrow

    When I went to Heathrow airport, they charged me an additional tax because it was business class. I was not happy.

  • $16635417

    Actually, I think the jet fuel taxes are refunded in the form of a tax credit as it is an integral part of the sale. (Similar to not paying taxes at Costco if it is for resale.) Landing fees are not broken down on the ticket price, they are fixed by aircraft type whether the plane’s empty or has 800 people on it.

    That’s kind of my point, if there is a specific government imposed fee that is collected per passenger and then sent to the government, pass it on to us. But DO NOT allow new mandatory fees, like hotel’s resort fees, to be added to the base fare.

  • $16635417

    Also…hotel taxes are not easily calculated. States, counties and cities impose different rates and that tax rate can vary.

    Same thing with buying a car. There are many car lots just over the county line because my county decided to raise the tax on car sales. The neighboring county did not. Dealers in my county closed up and the next county now has increased their presence.

    The next state over has a lower sales tax. I have to calculate if it’s worth the added expense to drive there to purchase items or buy closer to home.

    It’s not that hard.

  • TonyA_says

    In this example, even with the very high UK taxes (about 17.5% of the ticket price), the airline still made more than 77% of the ticket price.

    Uncle Sam only got 5.5% of the ticket price.

    How can any ticket buyer vent anger on Uncle Sam?
    Most travelers are actually subsidized by the general public since the general fund (tax base) is often use to pay for many expenses related to airline travel.

  • $16635417

    I also don’t want to get to the point where we just pay the taxes without knowing or caring. I cannot find the gas tax breakdown at stations and pumps around where I live and it’s certainly not on the receipts.

    I know it’s the law (at least to have them on the pump) but who’s enforcing it?

    The taxes and government fees should be identical for most nonstop routings. If several airlines are quoting the same price for a nonstop ticket, the final purchase price will be the same. What comparison are you looking for?

  • $16635417

    Was that included on the tax breakdown in the ticket price or paid at departure? Which government charged it?

    Not really the airline’s fault, but I just left a Caribbean Island and had to pay departure tax at the airport. I’d rather have that prepaid in the total of my ticket as well, but that is a whole different conversation.

  • The Language for this bill does not do consumers any real favors…

    But, in theory, and after signing the below petition, wouldn’t it be interesting to post gate fees, and all other charges on a per airport basis upfront prior to choosing your airline? In essence, you pick your travel points and then pick your airlines. Your travel points have a cost for using their facility and all fees calculated up front. In essence, you force the airlines to show their true fare. Let them figure how many more services, space, luggage, etc., they can cut without hiding behind ground fees, security, and the like. Now conceptually, you would have airports become potentially more competitive with one another on the basis of what they charge you versus the airline to use their gates, security, carousels etc.

    I know, probably a utopian thought given how these things work…

  • TonyA_says

    The UK Air Passenger Duty is based on whether you are on lower or higher cabin class of the flight and the destination’s band (distance from UK).

  • Carver Clark Farrow

    Honestly, I have no idea. It was years ago, but it was part of the ticket.

  • TonyA_says

    Actually we are already at a point beyond that. US travel taxes and fees that are paid to the government are not enough to keep airtravel safe and sound. So, the general taxpayer is footing some of the bill. Maybe it is better if they are more transparent about how the non-traveler is paying something for the traveler.

  • Carver Clark Farrow

    The key is the ability to easily and quickly comparison shop, a goal of transparency laws. Two examples,

    1. With a hotel, resort fees notwithstanding, two hotels down the street from each other will probably have the same tax rate, unlike two airplanes flying different routes.

    2. Same with the car dealers. Two dealers in the same taxing jurisdiction have the same tax rates.

    Thus, consumers can easily determine whether to buy a car from the dealer at 1001 Anystreet or 1002 Anystreet. No math skills are needed.

    Similarly, consumers can quickly determine whether Hotel A or Hotel B across the street will be cheaper (again, resort fees notwithstanding)

    But, as we’ve been told by out TA friends, just because you have a base price on an airline, doesn’t mean that you can determine the final price until the routing has been determined. Making comparison shopping imprecise at best.

  • Carver Clark Farrow

    Except of course, there are plenty of non-stop flights. When I fly to North Carolina, there are few, if any, non-stop flights from the San Francisco Bay area to Greensboro, North Carolina. I will be making at least one connection. Which routing I take will determine the pricing.

    But I digress. We are conflating two issues. The disclosure of the taxes isn’t relevant to comparison shopping, out the door cost is generally the sole consideration when comparison shopping. Unless one wanted to make a statement, few would choose a more expensive out the door price because the government imposed fewer taxes.

    But that issue could be easily taken care of. Let the taxes, fees, whatever, be shown, but after the initial quote. Let’s not muddy the water with multiple issues which aren’t necessarily related.

  • Carver Clark Farrow

    How does breaking out the taxes accomplish this goal?

  • $16635417

    I don’t disagree. As I was driving home I was thinking about how confusing taxes can be…but it didn’t used to be that way. 30 years or so ago we paid a flat percentage on the base fare. No PFC. no security charges etc. (International tickets still had customs fees etc, and we were always at the mercy of foreign taxes.)

    The problem is as fares have gone down (both in real $ and adjusted for inflation), the tax collected as a percentage of the fare didn’t cover what was needed anymore to operate and maintain the infrastructure.

    The government agencies were they first to get “creative” with their fees with airports imposing fees on the passengers that depart the airport, leaving it to the airline to collect and remit. They simply added that fee to the final ticket price.

    maybe we need to overhaul the taxes on airline tickets altogether, either creating a single flat tax per ticket regardless of price or a percentage that can maintain and improve the airport and atc infrastructure.

    Regardless, I still am not in favor of airlines being able to impose new mandatory fees on each ticket and pass them off as something other than included in the base fare.

  • $16635417

    What is the difference in price? Is it truly that much to be the deciding factor to make a decision if you stop in Dallas, Houston, Chicago, Atlanta or Charlotte? In your case, I would suspect frequent flyer membership would play into it! ;)

    EDIT: See my post below (or is it above)…perhaps we need to make taxes less confusing as well.

  • TonyA_says

    What goal? The only goal the bill has is to confuse the consumer and make the airline fares seem lower than it is today.

  • $16635417

    I don’t think Tony is for the bill…and I simply don’t mind if the taxes are quoted separately. I just don’t want AIRLINES to have the ability to CREATE new mandatory fees that can be added later in the purchase process. That’s the question that really hasn’t been answered.

  • $16635417

    I didn’t know the exact percentage, but I knew UK taxes were the major driver vs. US.

    What is the $458 imposed by the airline? Fuel surcharge? That’s one that definitely needs to be quoted with the base fare.

  • cowboyinbrla

    Another difference, Carver, is that with most consumer purchases, consumers have the ability to alter their shopping patterns to avoid taxes. If I live in a county with a 9% total sales tax rate and I can drive to the next county over and pay 7%, I might well choose to do that. Or if I can order online from a company that isn’t required to collect sales taxes (and don’t mind being a local tax scofflaw by not voluntarily submitting the sales taxes myself), I can do that.

    The “knowledge” one gets from seeing the airline taxes broken out is largely useless information because you can’t escape them. And to the limited extent it IS useful, there’s no reason it couldn’t be broken out right before the “Buy” button is pressed.

    In other words, instead of “Quote Low Fare > Show Much More Expensive Fare including Taxes > Press Buy”, it could just as readily be “Quote Complete Fare > Show Breakdown including govt taxes and fees as separate items > Press Buy”.

    The latter provides just as much disclosure as the former, AND enables the consumer to compare actual total expenses from the beginning. The airlines don’t support that because it keeps them from advertising a fare amount that has no relationship with reality.

  • $16635417

    So, going forward, if it were included in the total ticket quote it would not upset you because you probably won’t know about it?

  • cowboyinbrla

    The difference in price could be significant, Mike. I’ve seen quotes for a particular city-pair vary by as much as $100 between airlines. How much is due to routing differentials, how much is due to taxes/fees, how much is due to other factors – I can’t say. But usually I don’t care. I look to see which flights will get me where I want to go with the best timing at the best price. Non-stop flights I’ll pay more for (less travel time). Changes of planes with short layovers are better than long layovers. Changes of planes but moving in the same direction is better than flying away from the final destination to a hub, then flying towards it. In the grand scheme of things, I don’t give a crap whether $30 or $25 or $40 of my fare goes to government taxes and fees because I can’t control that.

  • $16635417

    Since you can’t see if the difference is in base fare or taxes, that sort of makes my point. I’d highly doubt that passenger facility charges would total $100 though. I’d bet that was simply a higher fare, something you probably would not have chosen had you seen it displayed higher pre-tax either.

  • TonyA_says

    I’m definitely AGAINST the bill.
    Maybe this is another smokescreen for all the other ancillary charges that are sprouting out like wild mushrooms.

  • TonyA_says

    I call BS to this:

    But, as we’ve been told by out TA friends, just because you have a base price on an airline, doesn’t mean that you can determine the final price until the routing has been determined. Making comparison shopping imprecise at best.

    When you go online to do comparison shopping you are shown flight itineraries and not just simple O&D base fares like in GDS.
    The software that put together those flight itineraries also priced them with the same logic used by a GDS. In other words they reflect ATPCO base fares, service fee, taxes, etc. Of course these are cached so you do not get the most accurate results.
    Just to be clear, while a TA cannot give you total price unless they create an itinerary and autoprice it; and OTA can since it uses a completely different application which is built for online shopping.

  • TonyA_says

    Trust me, there are experts who know how to avoid both government taxes and carrier imposed fees. This is one hot topic today and yours truly is in the thick of it now. This is an excellent way to lower your ticket prices :-)

  • TonyA_says

    This $458 is a CIFM = Carrier Imposed Fee Miscellaneous.
    It was imposed by the marketing carrier AA for the flight segments NYC to LON and LON to NYC.

    Unless you are in Brazil, Hong Kong or where the government controls fuel surcharges, the marketing carrier can pretty much do what ever it pleases with these Carrier Imposed Fees. Just to be sure you understand, CIF is a service fee and is not part of the fare. It is a completely separate filing.

  • MarkKelling

    I care that the taxes on air travel (and most everything else) are so high. I care a lot every time I look at the receipt I get when I book a plane ticket and see how much of the ticket is really taxes. I care that the government is probably redirecting those collected taxes to other uses.

    But when I am booking a trip somewhere all I care to see while I am shopping is what the total cost will be to me. I don’t want to have to click through several web pages to get to the point where I finally find out what the ticket price will be. And if the government taxes and fees are the same for every non stop flight from point A to B anyway, why do the airlines care if the prices they quote include them or not? And this is not the same as shopping where sales taxes are applied separately. I know what the tax rate is and can factor it in and go to a different store that has a lower tax rate if I want. When it comes to air travel, I have no idea what all the taxes are or will add up to and I have no way to avoid them.

    And I actually like the European method where tax on everything you buy is already included so if you see something for 5 euro, you pay 5 euro.

  • cowboyinbrla

    actually, once you buy a ticket, you DO see the taxes and fees broken down (and on some carriers, like Southwest, you see them before you hit “Buy”). They are just not factors that influence my selection, the way total price or timing of flight does.

    Put another way, if the flight is going to take $500 from my pocket, I don’t give a flip whether that’s $400 to the airline and $100 to government/airport fees, or $450 to the airline and $50 to government/airport fees. Nothing I can do, and no amount of knowledge that could be imparted to me, is going to take more, or less, than $500 from my pocket if I buy the ticket. As far as I can tell, hitting people right before purchase with the taxes and fees is only designed to rile people up against the taxes and fees. It’s not about transparency, it’s about a political agenda against the taxes and fees.

  • cowboyinbrla

    Point one: Who are you to determine what someone else should, or shouldn’t, care about?

    Point two: Nothing in current law prohibits an airline from disclosing, AT THE TIME THEY ALSO DISCLOSE THE TOTAL COST OF A TICKET, from spelling out what those government taxes and fees are. They could, right now, provide 100% of the information up front when pricing out fares. That would both provide the “transparency” about the government fares AND let the consumer know how much his ticket’s going to cost.

    That isn’t what the airlines are asking for. They want the right to HIDE the taxes and fees, right up until just before the “Buy” button is pressed, so you are operating from a number that has no basis in reality as to what you’re going to actually pay. And moreover, once you’ve reached that point in the purchase process, all the other fares are off the screen. In particular, on third-party sites, you can no longer easily compare whether the UA one-stop flight you picked with a fake fare of X plus taxes/fees of Y is larger or smaller than AA’s fake fare of Z plus taxes/fees of Q. So much for “transparency”. As I said elsewhere, all this does is generate resentment of the taxes/fees imposed by the government.

  • TonyA_says

    Re: if the bill is going to allow AIRLINES to add THEIR new fees to the base fare …

    Strictly speaking the airline can only add a Q surcharge to the base fare. However they can add a ton of other fees to the cost of a ticket.
    They now have service fees, ticketing fees, optional fees, etc. that they can add to increase the total price of the ticket.

    Airlines commonly add service fees in the form of Carrier Imposed Fees to international destinations (or origins).

    In Europe, it is usual and customary for airlines to add ticketing fees to recover part or all of the credit card merchant fees.

  • $16635417

    That’s been my point. I don’t care that the washing machine I buy doesn’t have the tax included in the advertised price. I realize that gets added.

    If anything has come out of this, it’s that it seems to be pretty clear that people are finding the taxes confusing. Way back when there used to be an 8% tax on domestic tickets…and that was it. Now we have a whole myriad of government fess and taxes that vary on other factors. (I’ve already stated that 8% may be too low….a whole other discussion.)

    Rather than fix the tax structure on airline tickets to make it easier to comprehend, we’re content to just bury it in the fare?

  • $16635417

    Point one….who are YOU to criticize that I prefer to see a base fare first and taxes added? This is my preference and opinion. Deal with it.

  • $16635417

    This is why I don’t mind it. I DON’T prefer the European method.

  • Extramail

    It’s very simple – I want to know what the cost is on each and every fare I want to compare. Don’t make me guess what the final price is going to be. I care how much is actually taxes, etc. but I need to know the price so I can decide if I want to purchase.

  • TonyA_says

    Dear Chris,
    Maybe next year you will be fighting against Airline Ticketing fees.
    Many countries have now allowed airlines to charge a ticketing fee to recover credit card merchant fees. See chart below.

    These ticketing fees do not even appear on the face of a ticket although they certainly affect the total price of a ticket. For example, you will pay a different fee if you paid for the ticket with a debit card, or between different kinds of credit cards.
    Simply amazing! It will be interesting times for a consumer advocate.

  • MarkKelling

    I think the goal of this bill is exactly what you point out: generating resentment of taxes. The sponsors apparently think this would be a good thing. I feel it is going to backfire against the airlines because of the resentment generated.

  • cowboyinbrla

    The difference with the washing machine and the ticket, Mike (as people keep telling you) is that you can go to the next county with a lower tax rate if that makes your total cost lower. You can mail-order it, even. But when you can’t go elsewhere – it’s not like, as a resident of (for instance) Atlanta, I can price an Atlanta to Los Angeles ticket, and then see what it might cost if I bought it in New Jersey or Florida.

    And as for the “confusing” taxes – I don’t find them confusing at all. Typically, I think there are only three main components: a tax based upon the cost of the flight; PFC’s (Passenger Facility Charges), levied by the airports at which the plane lands, which remain with the airport; and the TSA fee paying for the alleged security they provide. It’s not confusing. The only real variable is the PFC, and that’s the free market at work: one airport may decide to lower its PFC’s to attract more flights through, trying to make up the difference through concessions rentals or whatever. Another may raise the PFC’s to the max to pay for additional services or expansions. That seems perfectly reasonable to me.

  • cowboyinbrla

    Mike: There’s a difference between criticizing another’s expressed opinion and telling another person what he should or shouldn’t care about. Saying “I believe this, and here’s where I believe you are making a mistake with your argument” is, I think the essence of reasonable debate. Saying “That’s the problem. You don’t care that the tax is 30% of the fare in some cases, but you should” is being a busy-body.

    I may disagree with your preference to see a base fare first and taxes added, but as I noted, I’m fine with that as long as BOTH are shown from the start – not hiding the taxes until right before the “Buy” button. I’m willing to accommodate your desire to see the tax info up front. You, apparently, are not willing to accommodate those of us who want to know the total up front to make comparisons easier. Do you work for an airline?

  • cowboyinbrla

    I can’t speak for Chris, Tony, but I think each country should be allowed to set its own policies in that regard, and it’s up to the people of those countries to speak out and demand change if they want it. Insofar as I know, the US credit card issuers still forbid merchants to levy any surcharge or upcharge for using a credit card.

  • Carver Clark Farrow

    This goal

    So, the general taxpayer is footing some of the bill. Maybe it is better if they are more transparent about how the non-traveler is paying something for the traveler.

  • Thanks for the tip. Always another dragon to slay out there!

  • TonyA_says

    To solve that goal of true tax transparency, excise taxes should go up. So do airport fees.

  • Fishplate

    Given a particular route from X to Y, aren’t the government-imposed taxes and fees consistent? In which case, any ticket you choose would increase by the same amount regardless of the airline. Misleading, yes, but predictable.

    If, however, they are allowed to hide their own fees (fuel fee, pilot fee, wing fee, ad nauseum), then it’s deliberately deceptive.

  • Carver Clark Farrow

    I think the problem is when you comparison shop between airlines, they may have different routing between points X and Y. A direct flight from SF to NY on American, may be cheaper than the same flight on United connecting through Chicago although they both post an initial base price of say $500. There is no way for you the consumer to now beforehand that the American flight is ultimately cheaper

  • Michael__K

    Carriers can already display taxes very prominently today such that you can’t miss them (see example below). They don’t need any new laws for that — they can already do that.

    Carriers want this law so they can advertise fares that you can’t properly compare. They want to be able to advertise (for example) a $700 fare that may cost more than an advertised $800 fare once taxes are included.

    It’s already challenging enough for passengers to compare their all-in flight costs across carriers because of unbundling. And this proposal would make it that much more complex and challenging to compare actual costs.

  • Michael__K

    Since you can’t see if the difference is in base fare or taxes, that sort of makes my point.

    The proposed bill does absolutely nothing to address your point here. It won’t require carriers to disclose the breakdown of the taxes on your itinerary any more prominently than they already do. And the carriers are already free to disclose the breakdown of taxes very prominently if they choose to.

  • Helio

    The bill will allow the companies to hide their imposed fees up to the end? Or only the government tax & fees?

    It may be explicit somewhere, but it didn’t find. Sorry.

  • Mark H

    This is absurd. EVERY other product or service that you buy has taxes added to it after you see the price. When’s the last time you rented a car. It’s only $19/day Hertz says, then your bill is $35/day. That six pack you buy at the store is $6.99, but out the door it’s $7.50. The real issue here is the insane level of taxation that airline tickets are subjected to. They are taxed like alcohol and cigarettes but they are an essential service. Why should the taxes be hidden in the price when nothing else you buy is like that?

  • bodega3

    That can actually happen because of a sale fares between either SFO-ORD or ORD-JFK. I have had clients get a lower fare than the advertised (a few years back, not current as there aren’t advertised sales like there use to be) sale fare from SFO-JFK nonstop.

  • TonyA_says

    In my opinion, the bill is sufficiently vague (on purpose) so that it renders the US DOT impotent to protect consumers and the airlines can question the DOT all the way to the Supreme Court.

    (1) IN GENERAL. It shall not be an unfair or
    deceptive practice under subsection (a) 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
    (A) the government imposed taxes and fees associated with the air transportation; and
    (B) the total cost of the air transportation.
    (3) DEFINITIONS.In this subsection, the following definitions apply:
    (A) BASE AIRFARE. The term ‘base airfare’ means the cost of passenger air transportation, excluding government imposed taxes and fees.

  • TonyA_says

    I think you are stretching this a bit too far. The EU Airlines and OTA are just using a loophole to be able screw the public. Where does it say credit card fees in the law?

    Regulation 1008/2008/EC

    Information and non-discrimination
    1. Air fares and air rates available to the general public shall
    include the applicable conditions when offered or published in
    any form, including on the Internet, for air services from an
    airport located in the territory of a Member State to which the
    Treaty applies. The final price to be paid shall at all times be
    indicated and shall include the applicable air fare or air rate as
    well as all applicable taxes, and charges, surcharges and fees
    which are unavoidable and foreseeable at the time of publication.
    In addition to the indication of the final price, at least the
    following shall be specified:
    (a) air fare or air rate;
    (b) taxes;
    (c) airport charges; and
    (d) other charges, surcharges or fees, such as those related to
    security or fuel;
    where the items listed under (b), (c) and (d) have been added to
    the air fare or air rate. Optional price supplements shall be
    communicated in a clear, transparent and unambiguous way at
    the start of any booking process and their acceptance by the
    customer shall be on an ‘opt-in’ basis.

  • Joe_D_Messina

    How is not caring any worse? Nothing you can do about it. I can see in the big picture the need to have some concept of what percentage is going to taxes but in the small picture when just need to buy a ticket for an upcoming trip, the total you’re going to pay is all that matters.

  • Helio

    Thanks, Tony!

  • TonyA_says

    How would you like to be in this Virgin Atlantic ZERO base fare flight from London to Manchester. During check out it costs you $95.20?

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