Look out! Here comes the airfare transparency bill war


Will the real airfare transparency bill please stand up?

Passengers may be forgiven for asking that question last week after Sen. Robert Menendez, D-N.J., introduced the Real Transparency in Airfares Act — not to be confused with a congressional bill called the Transparent Airfares Act of 2014.

Both claim to bring “transparency” to airline tickets. But only one actually does, at least for air travelers.

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Question is, which one?

The House bill, introduced in March, promises to “return transparency to U.S. airline fare advertising” by allowing airlines to quote a base airfare and separately disclose any government-imposed taxes and fees through a link or pop-up. Currently, airlines must display the price you actually pay, which the Transportation Department refers to as “full-fare” advertising.

The Senate bill does more or less the opposite. It leaves the current fare rules in place while doubling the maximum penalty from $27,500 to $55,000 a day for airlines and large ticket sellers who fail to show an “all-in” fare.

“For years, some ticket sellers and airlines have tried to hide full trip costs from travelers to make ticket prices look significantly cheaper than they really are,” Menendez says. “The tougher penalties in my legislation will make unscrupulous ticket sellers think twice before they try to pull a fast one on their customers — and pay more heavily if they do.”

Menendez says he was concerned about the Transparent Airfares Act in Congress, which he says benefits only the airline industry by allowing airlines and ticket sellers to advertise inaccurately low prices and then hit customers with additional fees later in the booking process.

“By doubling the fine, I think we send a very clear message that we’re not going to stand by while consumer protections are trampled,” he adds.

A rep for Airlines for America (A4A), the trade organization representing the domestic airline industry, calls Menendez’s bill “a solution in search of a problem” that would put airlines at a disadvantage when competing with other modes of travel.

The real problem, says the association’s spokeswoman, Jean Medina, is that the government is “burying tax hikes in the advertised cost of a ticket, hiding these considerable charges from consumers who pay them.”

There may also be financial considerations. Privately, airlines have been arguing that killing the current fare advertising rules would offer an economic stimulus to the profitable airline industry, say people familiar with the industry’s lobbying efforts. How much? In a recent A4A newsletter, the organization linked to an article that suggested airlines were losing $1 billion a year by advertising a tax-inclusive fare.

So who’s behind these proposed laws?

Airlines and their unions favor the House bill, with support from industry-friendly analysts and some congressional representatives. Consumer advocates are rallying behind the Senate bill — or at least the idea of keeping the current “full-fare” advertising rule in place — and so are many air travelers. A Change.org petition backing the DOT’s full-fare advertising has collected more than 65,000 signatures.

In a twist, the U.S. Travel Association, an organization that represents the American travel industry, endorsed the Senate’s version of transparency.

“By no means should we undo the existing rule that enables consumers to see the full bottom-line price when they’re ticket shopping,” U.S. Travel Association President Roger Dow says.

Interestingly, the U.S. Travel Association represents other travel companies, such as hotels, that are routinely allowed to quote a low “base” rate and then add taxes and mandatory resort fees to their prices. The reason: Hotels are regulated at the state level, and the Federal Trade Commission can’t control a rate, as initially advertised.

But who’s right? To answer that question, let’s bring in Robert Mittelstaedt, dean emeritus of the W.P. Carey School of Business at Arizona State University and an aviation industry expert known for his evenhanded and fair approach to the aviation industry.

“The result of bringing the so-called transparent fare bill in the House into law would be a huge disservice to consumers,” he says, noting that it would be impossible to determine the actual cost of a ticket until just before you’re ready to book it.

“The Senate version would at least come closer to the concept of transparency, but the real question is: How far do we want government to go in regulating every aspect of our lives?”

So there you have it. The choices are: Give the airline industry permission to lie about its prices, or punish airlines by doubling the fines for misrepresenting their fares. Two somewhat extreme solutions.

The only thing worse might be a compromise allowing airlines to quote anything less than a complete airfare.

Which airfare transparency bill would be best for air travelers?

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How to be heard

• If you favor the airline approach to “transparency,” you can register your support for the House bill at the airline-sponsored website: airfaretransparency.com.

• If you favor the Senate bill, which would leave the current regulations in place, you can sign the Change.org petition by visiting change.org.

• Write or call your congressional representative. It’s an election year, and lawmakers are more likely to listen.

51 thoughts on “Look out! Here comes the airfare transparency bill war

  1. As a traveller, I’d like to know how much money will be leaving my account at the end of the transaction. On the other hand, I do not think it’s fair against the airlines when people end up blaming them for a cost that they, by law, have to add to their base costs.

    One solution would be to display the full fare, and then a breakdown: the $200 you’re paying is actually made up of $120 airline cost + $55 tax1 + $5 tax2, stating that the taxes are in no way connected to the airline itself, and are uniform across every airline.

    (The numbers were pulled out of thin air, but should give you an idea)

    1. I think Gabor’s idea has merit. For example, we frequently see trans-Atlantic airfares in which the tax (primarily EU carbon tax) exceeds the cost of the base airfare.

      1. I do not agree that it is common for transatlantic fares to have tax higher than airfare. Often there are high carrier-imposed surcharges or fuel surcharges, but those are not tax and are unrelated to EU law or EU carbon tax. Charlie, what’s your evidence of high EU carbon tax on airfare?

        1. We own a leisure focused travel agency and sell many dozens of air tickets to Europe each season. I’ll try to find some examples on Tuesday and post them but they are quite common on low season advance purchase air tickets.

        2. For off season SFO to LHR. The fare is $380 and the taxes are $708.20:
          1- USD380.00 708.20XT USD1088.20ADT
          XT 458.00YQ 35.00US 5.50YC 7.00XY
          5.00XA 2.50AY 116.00GB 74.70UB
          380.00 708.20 1088.20TTL
          ADT-01 SLX47NCE
          SFO UA LON190.00UA SFO190.00NUC380.00END ROE1.00 XFSFO4.5

          1. The “taxes” are not $708.20. The majority of the $708.20 is carrier-imposed surcharge, which is not tax. And to Charlie’s prior post, to which I replied above, the $708.20 certainly is not “EU carbon tax.”

          2. $708.20XT is considered the tax. That is how it goes in the business. When you break the tax down in the linear, you see what it all includes and yes YQ is a fuel surcharge, but it is considered part of the taxes, so you can pull hairs if you want.

          3. Some reservation systems may include the carrier-imposed surcharge in the tax calculation field. But it is not a tax and may not be characterize as tax in the US. False statements about nonexistent “tax” have led to DOT action and penalties. See e.g. http://www.dot.gov/sites/dot.gov/files/docs/eo_2013-12-6.pdf .

            Charlie made a particularly brazen claim, that the majority of certain transatlantic fares is not just ordinary “tax” but specifically “EU carbon tax.” I look forward to proof of that.

            Airfares may be high, but government taxes are not the reason for the high prices.

          4. All carriers put it in the linear. It is part of the tax total. As you can see in my earlier post, there are many taxes, fees and surcharges that get wrapped into what they call taxes. You are calling out just one.

    2. And gee, no law is currently mandating they CAN’T willingly give us the tax information. But they want a law requiring themselves to do so? Sounds about right. Not.

    3. Actually, they are already allowed to do that. They can break the fees and taxes out of the fare if they want, as long as they show the total cost. So they can do exactly what you said in your 2nd paragraph.

    4. When you book an airline ticket, you do see a complete breakdown already – I am copying that from a recent reservation for 2 – the fare showing when I made my selection was $618 (for 2 tickets) but the reservation makes it clear how much goes elsewhere (just over $100) – in fact, it even breaks it down as federal tax (not too outrageous) and the total of other fees –

      Base Fare (x2):

      Federal Tax:
      Other Fees:
      Passenger Facility Tax:
      Security Fee:
      Segment Fee:
      U.S. Customs User Fee:
      Travel Insurance Fee:


      Contrast that with most car rentals that show a rate of $28 say, but are actually $42 – those are the most egregiously “transparent” rates now –


      1. Travel Insurance fee isn’t part of any airline ticket breakdown of fees, taxes and fare. Since I don’t book online, I don’t know how a linear is accessed, but in our system it is easily accessible.

        1. Depending on the airline, Insurance Fee is part of what you see in your purchase recap on the web site and in the email confirmation you receive. BA does this on their “refundable with a fee” tickets. The insurance referenced is paid to them and insures them, not the passenger, when a cancellation occurs allowing for a refund of most of the ticket price to the purchaser.

          1. You are talking about two different things. A recap could have the ticketing fee in there, baggage fees, etc. But those are not part of your actual ticket. A full ticket price includes regulated fees, surcharges and base fare. Anything else is extra and added on, but is not in the linear of a ticket….which you actually don’t see online that I am aware of.

          2. Sorry I don’t have a BA ticket email to show, but here is a similar one on AC for a flight from DEN to LHR and back (formatted as best I could).

            >Purchase Summary
            >Fare Summary
            >Passenger Type Adult
            >Base Fare (including surcharges) 3534.00
            >Taxes,Fees and Charges
            >Canada Airport Improvement Fee 7.30
            >U.K. Passenger Service Charge 20.68
            >U.S.A Transportation Tax 35.00
            >U.S Agriculture Fee 5.00
            >U.S Passenger Facility Charge 4.50
            >Canada Harmonized Sales Tax (GST/HST #10009-2287 RT0001) 0.95
            >U.S.A Immigration User Fee 7.00
            >U.K. Air Passenger Duty 230.85
            >September 11 Security Fee 2.50
            >U.S. Federal Customs Fee 5.50
            >Total airfare and taxes before options (per passenger) US$3853.28
            >Number of passengers1
            >A $6 non-refundable surcharge for insurance is included.

            OK. I didn’t purchase insurance, so then what insurance am I paying for? So I guess even in the current world of transparent fees, somethings are still kinda opaque.

          3. Can’t help you on the insurance. It does come after the total airfare and taxes and listed as an option, so not part of the ticket cost, but part of the total you were charged. We don’t sell BA any longer.

          4. For AC, this is what I see for a business class ticket:23JUL DEPARTURE DATE—–LAST DAY TO PURCHASE 25MAY/2359
            1- USD3405.00 1274.40XT USD4679.40ADT
            XT 904.00YQ 35.00US 5.50YC 7.00XY
            5.00XA 2.50AY 3.70SQ 0.50RC
            232.00GB 74.70UB 4.50XF
            3405.00 1274.40 4679.40TTL
            ADT-01 Z50EX PRCT33 Z30EX
            DEN AC YTO Q7.50 720.00AC LON1040.80AC YYC1235.39AC DEN Q6.78
            394.60NUC3405.07END ROE1.00 XFDEN4.5

  2. airlines were losing $1 billion a year by advertising a tax-inclusive fare

    What total male bovine waste. How did they “lose” a billion a year? Did people just decide NOT to fly because they knew what they were really going to pay vs. being sucked in by apparent low fares only to find they had been hornswoggled at the end and couldn’t back out?

    I’m not sure which is worse – deceptive fares or apparent contempt of a buying public that is believed too stupid to read and understand such inane comments as “airlines were losing $1 billion a year by advertising a tax-inclusive fare”

    1. But it’s true! If I were allowed to lie and mislead people willy-nilly, I’d be a billion dollars richer, too.

      Keep the inclusive pricing. Heaven knows the airlines are permitted to hide everything else.

      1. The few times I have looked online, I have seen what would be charged. IMHO, it is a case of the DIY’er not understanding what they are looking for.

        1. Now. Yes.

          But before, you often didn’t know the total out the price until you were well into booking process. It also made comparison shopping harder when using a mega site.

          1. It has never been an issue for TA’s 🙂 We price an itinerary just like you do online to get a full price, so I don’t get the issue, now or then. You can not get a true price without knowing the exact flights and dates.

          2. Play around online, you will see.

            Today, if you ask for a flight form SFO-RDU on Jun 1, you get, for example, the following…

            Sun, Jun 1
            12:20 AM
            San Francisco
            11:00 AM
            1 stop
            7hr 40min
            American Airlines
            1052 /
            Total cost


            Thus you can comparison shop between AA, Delta, etc.

            Before, the same flight might be presented

            AA $149
            Delta $150

            But AA ends up being $196, but Delta $190. (numbers completely made up). You wouldn’t know that Delta is actually cheaper unless you checked each on individually

          3. Honestly. I rarely comparison shop for travel. When I travel I tend to have specific needs and desires and when I find a travel partner that fulfills them at a price that I am comfortable with, I tend to stick with them unless their price or service changes substantially or my needs change.

            A long time ago, I used to use yahoo travel. This was when my home page was Yahoo.

            Today, I find that between Starwood and Marriott, my hotels are covered, Virgin anf Delta cover my air travel, and Hertz takes care of my car rentals.

          4. Well I am about to change from UA. Hertz was great in HNL…again. I am a fan of being a Gold member!

  3. If a travel company wants to charge whatever fees and taxes and whatever, as long as I’m told what the total is that I have to pay, fine. What customers really resent is being quoted a fee, and then being charged all the extra fees and surtaxes on top of it later on. So I’m a fan of “one person one quote,” so to speak.

  4. transparency is a joke..in the last week i just tried to go from denver to aspen on U –it is usually $400 for a 20 MINUTE trip but june 19 to 23 it is $1300+++ what a scam as it is food and wine week and they are out to gouge……their customers

    1. The price quoted is very transparent — you know exactly what the airline wants to charge you with all mandatory taxes and fees included right away. You didn’t have to go through the booking process, you didn’t have to guess at what the total would be. It was all right there. And it probably saved you time because you didn’t go through an entire booking process only to then at the very last find out it was going to cost too much.

      Transparency has nothing to do with the price the airline wants you to pay, it is just in how it is presented to you. And I agree that the price is way too much, but it is a very nice drive from Denver to Aspen this time of year.

    2. Before you get your knickers in a twist on the fare, know what you are looking at. Is this the lowest fare in that market or is this what is left to buy? Two very different things, but something you don’t get to see online.

      1. Below you will see published fares and outbound availability. Each fare has a letter of the alphabet that you have to book that you can see is very limited in availability.
        Driving is less expensive anyway from DEN to ASE!
        Here are the published fares based on the outbound date:

        1 ECA21AFN E R 496.00 UA —- 21/1 ‡‡/ –
        2 MCA14AFN M R 643.00 UA —- 14/1 ‡‡/ –
        3 BCA07AFN B R 842.00 UA —- 7/1 ‡‡/ –
        4 BAA07AFN B X 531.00 UA —- 7/1 -/ –
        5 BAA00AFN B X 569.00 UA —- -/1 -/ –
        6 BAA00AFY B X 627.00 UA —- -/1 -/ –
        7 V2UP7Y3 P X 794.00 UA —- 7/1 -/ –
        8 Q2UP3Y3 Z X 894.00 UA —- 3/1 -/ –
        9 YUA Y X 976.00 UA —- – -/ –
        10 H2UPY3 A X 994.00 UA —- – -/ –
        11 FUA F X 1282.00 UA —- – -/ –
        12 YUAUP3 F‡X 1282.00 UA —- – -/ -‡
        13 Y Y X 1684.00 UA —- – -/ -‡
        14 F F X 2245.00 UA —- – -/ –

        Here is availability:

        1UA/** 6405 F2 C2 A2 D2*DENASE N 1249P 134P CR7 0 DCA /E
        Z0 P0 Y0 B0 M0 E0 U0 H0 Q0 V0
        2UA/** 5500 F1 C1 A1 D1*DENASE 4 158P 244P CR7 0 XS DCA /E
        Z0 P0 Y0 B0 M0 E0 U0 H0 Q0 V0
        3UA/** 3860 F0 C0 A0 D0*DENASE 1115A 1204P DH4 0 DCA /E
        Z0 P0 Y0 B0 M0 E0 U0 H0 Q0 V0
        4UA/** 3862 F0 C0 A0 D0*DENASE 305P 355P DH4 0 DCA /E
        Z0 P0 Y0 B0 M0 E0 U0 H0 Q0 V0
        5UA/** 5546 F1 C1 A1 D1*DENASE 3 956A 1042A CR7 0 DCA /E
        Z0 P0 Y0 B0 M0 E0 U0 H0 Q0 V0
        6UA/** 3861 F6 C6 A6 D6*DENASE 800A 852A DH4 0 DCA /E
        Z6 P6 Y6 B6 M0 E0 U0 H0 Q0 V0

  5. Does the airline industry really and truly believe that if they show potential passengers just the airfare portion of the total ticket price and include the taxes separately that more people will buy those tickets???

    I got news for them. If the billions lost are due to abandoned purchase transactions from the prices appearing too high with taxes included now, they still will appear too high if the same taxes appear in the cost just before payment is taken. The only difference is that they have wasted either computer time for passengers booking online and then abandoning the purchase at the last second or wasting call-in booking staff time on the phone where the purchasers hang up when the true total is presented.

        1. It is what we hear. Lots of issues with people who don’t have a clue on what they are booking. Airlines are again starting to pay us commissions in certain cases, so things are achanging!

          1. I don’t doubt that’s what you’re hearing. The question is though, what are the numbers. I suspect, but don’t know for a fact, that the overwhelming majority of people (99%+) who book online do it correctly and flawlessly, in the same way, most consumer transaction, even at much maligned stores such as Walmart, occur without incident.

            For example, lost baggage occurs at a rate of 0.3%. That means 99.7% of bags arrive without incident. Not that that directly translates, but it helps puts things in perspective.

      1. Why are they getting tired of DIY travelers? Since these people always seem to completely screw up their bookings and miss their flights where the airlines get to keep the entire ticket price and the DIY person has to buy a new ticket, what’s not for the airlines to like? 😉

  6. It’s good the way it is now. The fare we see should be the fare we pay. However we should also be able to see the fees – but that should be after we have seen the total price.

  7. Just the fact that we as a group have to debate the price of an airfare with an invoice containing half a dozen, or more line items to buy a simple service, demonstrates that airfare pricing isn’t nearly transparent.

    1. How much more transparent should it be? The ability to see the various components and the final price is what makes it transparent. Otherwise it would be opaque.

      Maybe the Air Canada online booking model should be adopted so there is no question of any hidden charges: don’t want FF points — save $5; want to check a bag — $20 at time of booking, or $30 if you decide at the airport, etc.

      1. How about “Round trip: Denver -> San Fransisco $399.87” and that’s it, end of negotiation. Air travel has far more in common with buying a car then it does with buying an iPod, and it should be a LOT more like buying an iPod then buying a car.

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