New rule: No more price increases after you buy a ticket

By | June 15th, 2010

Editor’s note: This is part nine in a series about the Transportation Department’s sweeping new airline passenger protection rules. You can read the entire document here (.DOC). Please take a moment to comment on these proposed rules at Regulationroom.org. The future of air travel depends on it.

Here’s a new government rule that might surprise you: It would prohibit post-purchase price increases in air transportation or air tours by carriers and ticket agents.

If you said, “They can do that”? then you’re not alone. That was my initial reaction.

But yes, they can.

It’s allowed under federal law — specifically, 14 CFR 253.7, which states,

A passenger shall not be bound by any terms restricting refunds of the ticket price, imposing monetary penalties on passengers, or permitting the carrier to raise the price, unless the passenger receives conspicuous written notice of the salient features of those terms on or with the ticket.

And that loophole has led to problems, according to the Transportation Department.

The Department has found that some sellers of air transportation are abusing this rule by burying provisions purporting to permit them to raise the price in the contract of carriage or conditions of travel and merely providing the consumer a hyperlink to the contract of carriage or conditions of travel. The consumer is unaware of the potential for such increase until well after the purchase is made.

Unbelievable.

What’s the solution?

The government is proposing a new rule that would forbid post-purchase price increases of this nature. The seller of air transportation would be prohibited from raising the price after the consumer completes the purchase, according to the department. Considering many travel purchases are made long in advance, with the implied promise that the price is “final,” the DOT thinks this rule is long overdue.

[I]t is patently unfair for a carrier or tour operator to advertise and sell air transportation at a particular price long before travel, with the caveat that they reserve the right to change the advertised price at any time before travel, and in any amount. The Department feels it is time to ban the practice of post-purchase price increases.

To which I say: What took you so long?

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I mean, seriously. I can’t believe you’re even debating this?

No, they’re serious. And, if you can believe, it, they’re even considering the following “alternatives” as possible rules.

One alternative the Department is considering would be to allow post-purchase price increases, but only as long as the seller of air transportation conspicuously discloses to the consumer the potential for such an increase and the maximum amount of the increase, and the consumer affirmatively agrees to the potential for such an increase prior to purchasing the ticket.

Another alternative would be to allow post-purchase price increases, with full and adequate disclosure, that the consumer agrees to in advance of purchasing a ticket, but to prohibit price increases within thirty or sixty days of the first flight in a consumer’s itinerary.

Bad ideas, both.


The regulatory analysis (PDF) agrees that it’s time to lay down the law on this. A February review of airline sites indicated that all reported increases in checked baggage fees were accompanied by effective dates for the change specified in terms of when tickets were purchased. However,

It is possible that the current DOT guidance may not continue to be effective for enforcing the current prohibition on post-purchase price increases. Codifying this policy would also reduce the amount of resources and effort required for the Department to determine if entities are complying with its provisions.

This proposed rule, while necessary, may have unintended consequences. If applied to tours that include a cruise component, it would stop cruise lines from retroactively adding fuel surcharges if energy prices rise. I would say that’s a good unintended consequence for consumers.

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Is it asking too much for a company to honor a price? I don’t think so.

The Rulemaking Series

I’ve written this series of posts in order to help you understand the Transportation Department’s proposed rules and offer the most informed feedback during its commenting period. Please take a moment to read them and then tell the government what you think at Regulationroom.org.

Part 1: New tarmac delay contingency plans — what’s in it for you?

Part 2: Government will require airlines to offer “complete picture” of ground delays

Part 3: New rules would require airlines to meet “minimum” customer service standards

Part 4: Government to airlines: Put it in the contract!

Part 5: New requirements would force international airlines to monitor and respond to passenger complaints

Part 6: Everything you need to know about the new denied boarding compensation rules

Part 7: The truth about the government’s new “full fare” disclosure rule

Part 8: Transportation Department wants airlines to reveal all fees and an airfare — or two

Part 9: New rule: No more price increases after you buy a ticket

Part 10: Airlines must “promptly” notify passengers of flight delays under proposed rule

Part 11: No more lawsuit limits for passengers under proposed government rules

Part 12: The hard facts about the peanuts-on-a-plane rule everyone’s talking about

If you have any feedback on this series, please send me an email. And thanks for reading.

(Photo: Roo Reynolds/Flickr Creative Commons)



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