Why your next airline ticket purchase should be like buying a car


When Loren Witkin says that he shopped around for a new car, you can take him at his word.

Witkin combed through his local newspaper, consulted the Kelley Blue Book and clicked on several auto-buying Web sites. Finally, he stumbled upon TrueCar.com, a service that offered something no one else could: an upfront price on a Mercedes E350. It promised no haggling and no hidden fees.

“It was one of the easiest purchases I’ve ever made for a car,” says Witkin, who runs an environmental consulting firm in Glendale, Calif.

If that sounds a lot like your search for a reasonable airfare — except for the positive sentiment — you’re in good company. Travelers, and particularly airline passengers, are frustrated with a system that took a simple product, such as an airline ticket, and separated it into smaller parts, an act euphemistically called “unbundling.” The TrueCar model suggests that the process could be reversible.

A new survey by a coalition of industry groups and consumer advocates claims that unbundled fees for services including seat reservations and checked luggage are too difficult to find and have deprived air travelers of the ability to easily search, compare and buy the range of features they need.

It found that 81 percent of air travelers believe that unbundling as it’s now practiced is “unfair and deceptive.” The best solution is “transparent” pricing, or showing the all-in costs of the airfare, including all fees at the time it’s first displayed, according to the coalition, which includes the American Society of Travel Agents, the Business Travel Coalition, Open Allies For Airfare Transparency and the Travel Technology Association.

New regulations being considered by the Transportation Department that would require airlines to reveal their fees for baggage and seat assignments might help. Those rules, if approved, won’t affect air travelers until 2015 at the earliest. But they probably won’t stop the pricing games, says Andrew Weinstein, Open Allies’ executive director. “Playing peek-a-boo with prices will not address the underlying consumer harm,” he adds.

So, what if the travel industry listened to its customers and started quoting full prices? That’s the question raised by Witkin’s experience with TrueCar. The company, which was founded in 2005, is basically a referral service for car buyers, linking qualified customers with dealerships willing to offer them a flat price on a new or used vehicle. It claims to have saved car buyers more than $1 billion by eliminating their least-favorite aspect of the experience — the haggling and the surprises, such as taxes, fees and other extras that weren’t quoted as part of the sticker price.

The buying experience on that site is fairly seamless. You plug in your desired make and model, and TrueCar shows you all-in prices and dealerships, conveniently sorted by distance from your home address. Once you’ve made a selection, TrueCar sends you an e-mail with a voucher for your purchase, listing the price you’ve agreed on. The customer avoids a surprise, and the dealership pays TrueCar a $299 fee for the sale of a new car and $399 for the sale of a used car.

“Eliminating the back-and-forth negotiation saves everyone time and money,” says Scott Painter, TrueCar’s chief executive.

This idea isn’t a flash in the pan. There are more than 8,000 dealer affiliates in the United States, and TrueCar is profitable. For airfares, two successful sites — Routehappy.com and Hipmunk.com — display flight options by amenities and “happiness” quotients, nudging the industry closer to a more transparent experience of buying flights.

Telling the whole truth about prices, in other words, doesn’t have to wreck a company’s bottom line.

But is it necessary? Maybe, maybe not. Jonathan Collegio, a spokesman for the National Automobile Dealers Association, suggested that auto buying services that add transparency are a solution looking for a problem.

“Buying a car today is one of the most transparent purchases consumers can make,” he says, citing pricing on the Internet and robust price competition among franchised new-car dealerships in any given local market. “Consumers can go to multiple car dealers who compete for their business, both within and across brands,” he says.

What’s more, the fees that people complain about, including titling, registration and document fees, are set by governments, not the dealerships.

“Dealers must comply with a host of regulations to sell cars to consumers as well,” he says. “Other fees, like extended service contracts, are optional for consumers.”

That explanation sounds similar to the airline industry’s arguments when it pursued legislation called the Transparent Airfares Act, a bill that passed in the House of Representatives with no debate and against the apparent wishes of many constituents. The bill, if it becomes law, would give airlines the license to do exactly what car dealerships now do: legally quote a price minus taxes and fees and add “options” such as a checked bag and a seat assignment after you’ve made a purchase decision.

Airlines contend that allowing them to quote a low fare would be the very definition of “transparent.” Consumer advocates disagree.

Air carriers would be free to display lower “come-on” base ticket prices on the first screen of an Internet purchase. “Then they could dribble out information about the real, higher total ticket prices, including government taxes and fees, on other parts of their Web sites,” says Kevin Mitchell of the Business Travel Coalition.

Witkin, for his part, is pleased with his car purchase. His no-haggle Benz cost $50,402, a $5,233 savings off the retail price. But, he says, he understands why car dealerships might not like the way he bought the car and, indeed, why any business might have trouble with transparency.

“Sites like TrueCar have created a lot more informed buyers in the marketplace, providing less opportunity for dealerships to make more money on the less informed,” he says. “That can be threatening to dealerships.”

And to airlines, too.

Should airlines adopt the TrueCar.com pricing method?

View Results

Loading ... Loading ...

Underwritten by

Elliott Advocacy is underwritten by AirportParkingReservations.com

With nearly 20 years in the industry, over 128 airport covered in the U.S. and Canada, and over 1,000 Hotel and Parking Partners-we provide travelers the best options on how to get to the airport when flying. Whether you want to; drive yourself and park near an Airport (Airport Parking), stay the night before your flight at an airport hotel and leave your car (Hotel and Parking Package), or take a shared Shuttle/Private Car/Limo to the Airport- we got you covered. The best deals can be found online, and booking a reservation has never been easier. You can explore all of our options by visiting us at AirportParkingReservations.com, ParkSleepFly.com, AirportParking.com, and ShuttleFinder.com.

Elliott Advocacy is underwritten by Generali Global Assistance

Generali Global Assistance has been a leading provider of travel insurance and other assistance services for more than 25 years. We offer a full suite of innovative, vertically integrated travel insurance and emergency services. Generali Global Assistance is part of The Europ Assistance (EA) Group, who pioneered the travel assistance industry in 1963 and continues to be the leader in providing real-time assistance anywhere in the world, delivering on our motto – You Live, We Care.

Elliott Advocacy is underwritten by Seven Corners

Seven Corners has helped customers all over the world with travel difficulties, big and small. As one of the few remaining privately owned travel insurance companies, Seven Corners provides insurance plans and 24/7 travel assistance services to more than a million people each year. Because we’re privately held, we can focus on the customer without the constraints that larger companies have. Visit Seven Corners to learn more.

Elliott Advocacy is underwritten by Sodexo North America

Sodexo North America Sodexo North America is part of a global, Fortune 500 company with a presence in 80 countries. Sodexo is a leading provider of integrated food, facilities management and other services that enhance organizational performance, contribute to local communities and improve quality of life for millions of customers in corporate, education, healthcare, senior living, sports and leisure, government and other environments daily. Learn more at Sodexoinsights.com.

Elliott Advocacy is underwritten by Travelex Insurance Services

Travelex Insurance Services is a leading travel insurance provider in the United States with over 55 years combined industry expertise of helping people dream, explore and travel with confidence. We offer comprehensive travel insurance plans with optional upgrades allowing travelers to customize the plans to fit their needs. Compare plans, get a quote and buy online at Travelexinsurance.com.

Elliott Advocacy is underwritten by AirHelp

AirHelp is the world’s leading flight delays compensation company, helping passengers apply for compensation following a delayed or canceled flight or when boarding has been denied. It is AirHelp’s mission to fight for passenger rights by holding airlines accountable for flights disruptions that are out of passengers’ control. AirHelp has already helped 5 million people, taking the stress out of applying for compensation and making it as hassle-free as possible for travelers around the world.

Elliott Advocacy is underwritten by Allianz Travel Insurance

The Allianz Travel Insurance company has built its reputation on partnering with agents all around the world to provide comprehensive travel insurance for their clients. Contact Allianz Travel Insurance for a comprehensive list of coverage.

Elliott Advocacy is underwritten by Chubb

Chubb is the world’s largest publicly traded property and casualty insurance company, and recognized as the premier provider of insurance for successful individuals and families in the U.S. and selected international markets, offering coverage for high-value automobile, homeowners, recreational marine/aviation, valuables and umbrella liability coverage. As an underwriting company, Chubb assesses, assumes and manages risk with insight and discipline, and combines the precision of craftsmanship with decades of experience to conceive, craft and deliver the best insurance coverage and services to individuals, families and business of all size.

Elliott Advocacy is underwritten by Fareportal

Fareportal’s portfolio of brands, which include  CheapOair and  OneTravel, are dedicated to helping customers enjoy their trip. Whether you want to call, click, or use one of our travel apps, one thing is clear: We make it easy to take it easy.

Elliott Advocacy is underwritten by Insuremyrentalcar.com

An independent provider of low cost CDW/LDW insurance for use with rental cars. Up to $100,000 cover with no deductible. Policies available on a per day, per trip or per year basis. Also works with overseas rentals. Try  Insuremyrentalcar.comnow.

Elliott Advocacy is underwritten by G1G.com

Since its inception over three decades ago, G1G has continued to revolutionize the travel insurance industry by being the only aggregator to operate a customer portal, placing all of the user's primary needs in one place. We have continued to innovate and disrupt the market by reimagining the way travel insurance can be delivered to the end user in ways no competition can. Simply put, no one knows the market as well as its founders and no one else shares G1G values and mission.

Elliott Advocacy is underwritten by Mediacom Communications

The nation’s fifth-largest cable operator, serving the smaller cities and towns in the Midwest and Southern regions of the United States. We are a high-performance broadband, entertainment, and communications company that brings the power of modern technology and quality customer experience to life inside the connected home by combining ultra-fast gigabit speeds with personalized local and over-the-top entertainment choices that fit your lifestyle. Details at  Mediacomcable.com.

Elliott Advocacy is underwritten by Arch RoamRight

Arch RoamRight is one of the fastest growing, most-highly rated travel insurance companies in the United States. Travel advisors love working with us, and travelers feel protected with our trip cancellation and travel medical insurance coverage. We also make it easy to file a claim online with our fast, paperless claims website. Learn more about RoamRight travel insurance.

Elliott Advocacy is underwritten by Virtuoso

The leading global network for luxury and experiential travel. This invitation-only organization comprises over 1,000 travel agency locations with 17,500 advisors in over 45 countries, and holds preferred relationships with 1,700 of the world’s finest travel companies. Virtuoso advisors collaborate with their clients to create personalized itineraries featuring exclusive perks, while also providing advice, access, advocacy, and accountability. For more information, visit  Virtuoso.com.

Elliott Advocacy is underwritten by VisitorsCoverage

VisitorsCoverage is one of the world’s most trusted providers of travel insurance for millions of global travelers in over 175 countries. Working with top-rated travel insurance partner providers, VisitorsCoverage’s award-winning search, compare and purchase technology simplifies the travel insurance process and finds the best deals for the coverage you need to explore the world with confidence. Get insurance for your next trip at VisitorsCoverage.

Elliott Advocacy is underwritten by MedjetAssist

Medjet is the premier global air-medical transport, travel security and crisis response membership program for travelers. With a MedjetAssist membership, if you become hospitalized more than 150 miles from home, we will get you from that unfamiliar hospital all the way home to the hospital you trust. All you ever pay is your membership fee. MedjetHorizon members add 24/7 personal security and crisis response benefits. Elliott.org readers enjoy discounted rates. Travel safer with  MedjetAssist.

Elliott Advocacy is underwritten by Southwest Airlines

The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.

Elliott Advocacy is underwritten by TravelInsurance.com

TravelInsurance.com makes it fast and easy to compare and buy travel insurance online from top rated providers. Our unbiased comparison engine allows travelers to read reviews, compare pricing and benefits and buy the right policy with a price guarantee, every time. Compare and buy travel insurance now at  TravelInsurance.com.

Elliott Advocacy is underwritten by Squaremouth

Squaremouth helps travelers easily and instantly compare travel insurance policies from all major providers. Only companies that meet the strict requirements of Squaremouth’s Zero Complaint Guarantee are available on the website. Compare policies on  Squaremouth.com to save over 70 percent on your next purchase.

Elliott Advocacy is underwritten by Travel Leaders Group

Travel Leaders Group is transforming travel through its progressive approach toward each unique travel experience. Travel Leaders Group assists millions of travelers through its leisure, business and network travel operations under a variety of diversified divisions and brands including All Aboard Travel, Andrew Harper Travel, Colletts Travel, Corporate Travel Services, CruCon Cruise Outlet, Cruise Specialists, Nexion, Protravel International, SinglesCruise.com, Travel Leaders Corporate, Travel Leaders Network and Tzell Travel Group, and its merger with ALTOUR. With more than 7,000 agency locations and 52,000 travel advisors, Travel Leaders Group ranks as one of the industry’s largest retail travel agency companies.

Elliott Advocacy is underwritten by Travelers United

If you’ve been mistreated by the airlines, Travelers United is your voice in Washington. Join the #1 travel advocacy organization working with Congress to improve and protect travelers. Plus, get $400 of annual benefits you can use for travel for only $29/year. Add your voice to ours. Make travel better.  Join today.

Send this to a friend