The truth about “transparent” airfares

The Transparent Airfares Act of 2014, which only a few weeks ago had virtually no chance of passing, now seems poised to become law.

Remarkably, the proposed legislation enjoys bipartisan support, even from Democrats with distinguished records of supporting consumer rights. Critics have watched in amazement as this deceptively named bill has taxied toward the runway, apparently unstoppable.

This may be the time to pause and consider what life may be like with “transparent” prices, which would almost certainly spread to other parts of the travel industry that are regulated at the federal level.

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The Transparent Airfares Act would effectively void a Department of Transportation regulation called the full-fare advertising rule, which is supported by consumer groups and airline passengers and has been upheld by the courts. That rule requires airlines to quote a price that includes all mandatory taxes and fees.

Airline representatives say that the full-fare rule, far from protecting consumers, allows the government to bury tax spikes in a ticket price. Consumer advocates insist that the Transparent Airfares Act would allow airlines to quote a deceptively low airfare.

As soon as the bill is passed, airlines will be able to advertise an initial price that’s between 15 and 20 percent lower than the price you’ll pay. Only at the end of the booking process, when you get ready to pay, would the full price, including taxes, be revealed. Privately, airlines have been pitching this to Congress as an economic stimulus, arguing that passengers are likelier to book fares they believe to be cheaper, say critics.

Eventually, the so-called “ultra” low-cost airlines such as Allegiant and Spirit, which publish fares as low as $1, could become the norm, says Charlie Leocha, director of Travelers United, a nonprofit advocacy group. (I’m the co-founder of Travelers United and serve as its volunteer ombudsman.)

“When mandatory taxes and fees — TSA security fees, airport facility charges and other fees — are applied to these fares, the final price can soar by more than 100 percent,” Leocha says. “It’s flat-out misleading and deceptive. It’s legalized bait-and-switch advertising.”

At some point, the price of a fare could drop to even zero, experts fear, with airlines making their profits on mandatory and optional fees, such as checked-luggage charges, seat-reservation fees and meals. Under that scenario, it would be nearly impossible to know how much a flight would cost, although one thing would be certain: It wouldn’t be “free.”

Once airlines have had their way, other industries regulated at the federal level might be likely to line up for a “transparent” price bill, starting with oil companies. “Imagine if gas stations were to start advertising just the base cost of the gas on their signs, and only after you’d filled your tank you discovered the total cost,” says Paul Hudson, president of

On average, taxes add about 50 cents to the cost of a gallon of gasoline. So under a so-called “transparent” price scenario, a station charging $3.50 per gallon of gas could prominently advertise its price as $3, even if your total cost is $3.50.

The Federal Trade Commission refers to this kind of advertising as “drip” pricing, and it’s so concerned about it that it held a conference recently to discuss the problem. The agency appears to have taken the common-sense position that a company ought to quote a price that a customer can actually pay, as opposed to a pre-tax rate that looks significantly cheaper than it is. Already, the agency has sent warning letters to several hotels suggesting that they might be violating federal law with their price postings.

“Consumers are entitled to know the true cost of their hotel stay,” says Mary Engle, associate director of the FTC’s Division of Advertising Practices, noting that the agency continues to work to improve price disclosure. The FTC does not regulate airline pricing.

To get an idea of “transparent” prices in travel, look no further than car rental agencies, which routinely quote an initial rate that doesn’t include the often sizable taxes and fees.

A recent one-day rental from at Dallas/Fort Worth International Airport, for example, offered a “base” rate of $157. But the next screen revealed other mandatory fees, including a “concession recovery fee” of $18, a “transportation” fee of $2 and a “vehicle license fee” of $2; and that’s before taxes of $27. Total cost: $210 per day.

Travelers routinely complain about the car rental industry’s pricing practices, which make the cost of a rental car look lower than it actually is.

Hotels practice “transparent” pricing, too. Go to and ask for a room rate at the Waikiki Beach Marriott Resort & Spa in Honolulu, and it will claim there’s a rate of $209. There isn’t. The second screen warns of an additional mandatory $30 resort fee, and the third screen reveals that the actual rate, once taxes are added, is $272.

Airlines believe that they should have the same rights to quote an artificially low price, and that it ought to be enshrined in federal law. Problem is, consumers want the exact opposite — to know precisely how much the product will cost, whether they’re booking a rental car, a hotel room or an airline ticket. Consumers have reacted to this bill in the same way their advocates have: They’re dead-set against it.

Wouldn’t it be something if the legislators supporting price transparency actually did something that made prices more transparent, and passed a bill that required all prices — not just airfares — to include mandatory taxes and fees?

Then again, wouldn’t it be nice if our elected representatives actually represented our interests, instead of the special interests supporting this wrongheaded bill?

The Transparent Airfares Act of 2014 is ...

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36 thoughts on “The truth about “transparent” airfares

  1. Funny the picture seems to be an idiot consumer who can’t seem to figure out how to use his smartphone. The real problem is idiocy in America.

      1. Not really. I was expecting a photo of Public Servants that sold us out.
        Those are the pictures of politicians NOT to vote for next time.

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    Actual room cost $405 exclusive of city and state taxes

  3. Sickening. Those representatives are only concerned with their own pockets. And what happened to doing away with lobbyists?

  4. I have 2 trips coming up where I rented a car each for a week. Budget at IAD : base price $143.82 + concession recovery fee – $16.84; Energy recovery fee – $5.39; Vehicle license fee – $2.38; tax – $16.84 for a total of $185.27. Next trip in July – Thrifty at RSW: Base price $256.23 + concession recovery fee – $29.40; Energy recovery fee – $4.06; Facility usage fee – $7.00; state transaction surcharge – $14.14; vehicle license fee – $4.34; tax – $18.91 for a total of $334.08. Just exactly what are these extra fees for? Are these mandatory fees or can they be negotiated?

    1. They are mandatory and can’t be negotiated. One way to possibly drop the costs on fees is to rent from an off airport location. In HNL, it costs $60 just to pick up your car at the airport and that is added on to the cost of your rental rate. Some of these fees are voted on by residents. Pass the needed money bill for a stadium off to visitors, not us and that usually wins every time.

  5. Rather than lobby here or more in Washington, get this on CNN news and national news programs. Then the local papers and news will pick it up. Then the outrage. Then the politicians listen. I’d never know about this if not for this sit and I can guarantee 98% of the traveling public is ignorant to this legislation..

  6. Does anybody still really think that Washington, or any politician, actually works on behalf of “we, the people”? If a candidate stood up & said that he/she was in it primarily for their own benefit, I would vote for them. At least you would know what you are getting.

    1. In the coming election, I’m going to vote against the incumbent. I don’t care who it is. I don’t care what party he’s from. Whether I like him or not is irrelevant. You get two terms in each chamber and then you’re gone.

      1. Except they are not gone. The just move to another elected position or an appointed positive, which the latter often pays them more than the elected one did. Term limits in CA hasn’t worked. They need to change the loop hole!

      2. That makes zero sense and is an insult to democracy. Take the time to do the research on your candidates and the issues that truly matter to yourself, your family, your community, and your country.

  7. I’m glad to see that my representative in Congress has not signed on as a co-sponsor of this bill. I just wrote to her asking that she oppose it.

    1. Why? Have you booked and not been told on the screen in front of your what your full cost are? I am not finding this to be deceptive and would like to see something posted here in full print showing the deceit.

      1. Of course I can’t provide an example! That’s because DOT regulations adopted in January 2012 require airlines to advertise the full price, including fees and taxes. This legislation would overturn that policy and allow airlines to advertise a price that doesn’t match what consumers would actually pay. The question isn’t about fees being hidden; it’s about what airlines can advertise as the fare. Have you read the bill?

        1. But it isn’t an issue and that I have ever seen. The law applied to advertised fares. I still see base fares in my GDS and when I book the routing, then I get all the taxes, fees and surcharges. Booking is the same as paying for it, I don’t have to end the reservation to get the full price.

          1. I guess part of the question is “Should I have to go through the process of booking to find out the real price?” To paraphrase an earlier article by Chris, if Southwest advertises “Fly to Las Vegas for as little as $49”, shouldn’t I be able to fly there for $49? (Let’s take it as given that I’m willing to fly any day at any time.) And really, those of us who read Chris’s articles know that we have to double-check everything a travel provider tells us. This legislation isn’t to help us; it’s to help the average consumer.

      2. That’s the point – for the last couple of years this hasn’t been a problem – hard to go back to the old bad days

  8. I wouldn’t mind having taxes and government fees quoted separately. In fact, perhaps this should be mandatory. But do airlines get to hide their own fees in the ‘required’ section?

    1. Can you show us an example? Book, copy and paste here? As I have gone to several sites and I am not finding anything being hidden.

      1. My question was: if the transparency law passes, will it be written to allow airlines to hide their own fees as ‘required government fees and taxes’? Because Congress loves midnight riders more than Paul Revere ever did, we won’t know until we actually see it.

        1. NO – just government fees and taxes – the airlines do not HAVE fees and taxes on the tickets – those are all the governments/airports

      2. That’s because it’s not currently allowed! Do you really not remember the bad old days when, to price-shop for an airline ticket, you had to go through multiple steps before you found the real price — for each airline? It was crazy! It would take HOURS to do an actual final-price comparison.

        Then, when the government implemented the “full fare advertising rule”, that problem disappeared. YAY! I could now see the final price of airline tickets with one click. What used to take hours now took minutes.

        This is going to put it back to the bad old days. Once again we will have to click through multiple levels before we find the final price.

        I can’t believe you would support this. REALLY? You’ve gotta be kidding me?

        1. Some people have a vested interest in burying as much crucial detail in fine print as possible. Then the complexity and obscurity of the fine print becomes a sales pitch for hiring a professional to handle your transaction.

    2. I want to see it all. I remember when car rentals were impossible to compare since I could only see the base rate (however that is defined). Now I see the base rate and total at the same time. I would be fine seeing that here too.

  9. I’d like to ask for examples of the hidden fees with a cut and paste posted here. I have gone out online and looked and so far I find everything quoted, with fees/surcharges detailed.

        1. It’s difficult to believe that anyone would be against making the cost of a ticket, product, or service clear. Imagine going to the grocery store to buy a gallon of milk.The milk is priced at $2.49 per gallon. At checkout time a feed charge of $1.00 is added to the price to offset the cost of feeding the cows that produce the milk. Then a container fee of $0.50 is added to cover the cost of putting the milk in the jug. Next a store facility charge of, say, $0.25 is added to cover the cost of running the store. You end up paying $4.24 for the milk. Would that irk you?

          1. None of those items are required to be collected at the time of purchase and passed onto another government entity such as an tax or facility charge is.

            I don’t have an issue with the federal excise tax or passenger facility charges being excluded from advertised fare. I do not want a fare of $1 advertised and then see a myriad of charges for fuel, aircraft maintenance, landing fees, concourse rental, flight attendant uniform upgrades, etc added to my ticket as I go through the purchase process.

        2. It probably won’t change things for a travel agent because they know there will be fees taxes and whatever else added in. But for the average person wanting to find a low priced flight from here to there it can make a huge difference. If one airline starts advertising $49 fares while the other airlines advertise $109, which one do you think the average person out there is going to choose? No matter that the $49 fare has multiple additional fees that the $109 fare includes causing the apparently higher price to end up being less.

          Since this is not allowed today, I cannot of course give you an example. But it is not hard to imagine an airline like Spirit to start advertising $1 fares and then add things like fuel surcharges, credit card authorization fees, seat assignment fees, boarding pass fees, and so on to the point that $1 fare ends up being $200. So then the average traveler has to go through the booking process for each airline to determine which is really the affordable price. This might work to the advantage of travel agents where more travelers will use them to book flights (and I am not against travel agents getting more business because it would probably reduce the number of complaints about screw ups we see here), but this bill is not in the best interests of the average traveler.

          1. It never had been done that way before. A base fare is a base fare. When airlines use to advertise a sale, the price was always the base fare. Now what I had issue with was the fine print. It was usually smaller than the advertised fare and lighter in color, too. It was not usual to see $99 from SFO to JFK, then in the smaller and lighter print, based on roundtrip travel, then the added taxes and fees mentioned that way, too. I can’t tell you how many phone calls we would get on Monday morning if this came out in Sunday’s paper, where we were asked about getting a ticket to fly one way to NY. People read headlines, and don’t bother with the rest!
            What Charlie Leocha and his little group wants is to be able to see a chart. What other business does that online? Want a pair of Levi’s, do you see a chart showing all sale outlets, their taxes, their shipping fees (which vary according to their shipping contracts)?
            All the airline’s can do is show a base fare on a particular nonstop routing. Add connections and the final price will vary. Of course, thanks to cheap travelers, we now have the other added costs that aren’t not required to decide at time of ticketing.

  10. Can’t believe the full fare rule is being overturned this fast – I remember a few years ago trying to book air fares to Europe, being sensitive of my employer’s budget, finding $600 fares which turned out to be $1,700… love the “all-in”quotes and would be very sorry to see them go…. calling my Congressmen tomorrow…

  11. It’s clearly bad for passengers. On the other hand, if people acted rationally, it would have zero effect, so it’s hard to be too upset about this.

  12. It appears that this will indeed happen. Sorry TonyA, but the ASTA ( association of travel agents) is appearing before congress on 5/13/14 to fight against the bill. Thery are asking for every travel agent to contact their respective congressional members to vote NO. We are meeting with the WV delegation. 4 have agreed to meet with us. If you want to see a really screwed up scenario in the airlines, do not contact your senator or representative. I have seen the mess that airlines like Allegiant and Spirit do to their fares before full disclosure was required. Now all of the airlines can get in on the scam.

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