Airline Legislation Demands Airlines Restore Pricing Transparency

The Orwellian-titled bill, the Transparent Airfares Act of 2014 (H.R. 4156), was designed to respond to airlines' objections to a 2012 U.S. Department of Transportation (DOT) rule that requires them to prominently display total ticket prices in advertising, including government taxes and fees. H.R. 4156 would reverse that DOT rule and undermine a critically important airline-consumer protection adopted as a cure to misleading airline advertising. The bill could come to a House Floor vote at any time; the Senate Commerce Committee may consider a companion bill upon its return from recess.

The haste that has accompanied this bill, with no hearings at which other stakeholders would have had an opportunity to inform Congress of their views and the flaws in this bill, is regrettable. Indeed, The Washington Post reported on Friday, “Consumers have reacted to this bill in the same way their advocates have: They’re dead-set against it.” The New York Times criticized the bill in an editorial saying, "This push to mislead consumers is particularly galling since recent mergers, like that of American Airlines and US Airways, have made the industry less competitive."

In what would surely make George Orwell claw his casket, airlines are actually pitching H.R. 4156 to the Senate as an “economic stimulus bill” that would boost travel and tourism. Could there be a more revealing admission by airlines that the entire purpose of H.R. 4156 is to enable them to lure passengers into thinking the prices they will pay are less than what they will actually have to shell out for tickets? If such a bill were going to stimulate anything it would be airlines’ coffers.

In rejecting the airlines’ 2012 court challenge to the DOT rule, that airlines now hope to use Congress to override, the U.S. Court of Appeals for the District of Columbia rightly sided with DOT observing: “Based on common sense and over three decades of experience and complaints, DOT concluded that it was deceitful and misleading when the most prominent price listed by an airline is anything other than the total, final price of air travel.”

In short, allowing airlines to entice passengers into making a purchase by highlighting only a fraction of the ultimate price to be paid cannot be a practice that Congress desired to have foisted upon unsuspecting consumers when it enacted the Airline Deregulation Act of 1978.

Deregulation consolidated virtually all airline consumer protections at DOT by force of the federal preemption doctrine. The recent Ginsburg v. Northwest Airlines decision of the U.S. Supreme Court is an illustration of the fact that except for the protection that DOT provides them, airline consumers (with rare exceptions) are absolutely bereft of any rights or remedies for unfair or deceptive acts or practices.

In what other industry are consumers deprived of the right to bring state and federal law claims even in the face of proven deceptive practices?  Answer: none, which is why DOT must be deferred to in its effort to provide consumers the only legal protections against deceptive practices that they have. The real damage done then, by H.R. 4156, would be to destroy the only bastion of protection that consumers have and strand them in a consumer protection no-man’s-land.

Indeed, an overarching stratagem in recent years in the airline playbook, enabled by a wave of mega airline mergers, has been an airline assault on price transparency. Since 2008, services that used to be included in the price of a ticket are now broken out as so-called ancillary services (e.g., checked bags and the ability to pre-reserve seats so that families can sit together) and charged for separately.

To restore the price transparency airline consumers enjoyed for decades and deserve, they should be able to compare the all-in-price of travel options, that is, the total fare (including all taxes) and the costs of extra fees for the ancillary services they need or want, and to do so in an efficient side-by-side comparative display.

However, consumers cannot do that today because airlines have refused for six years to provide fee information about these now unbundled services to traditional and online travel agencies, and other travel intermediaries, which are the sole sources of efficient, true comparison-shopping across multiple airlines. On that note, and in keeping with their playbook, airlines have been aggressively battling against a pending DOT rulemaking that is hoped will remedy this inexcusable consumer harm.

Unlike other industries, airline consumer protections are consolidated at a single federal agency. Congress should be evaluating policies to strengthen DOT’s consumer-protection authority, not ways to eviscerate it. 

 

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About BTC

Founded in 1994, the mission of Business Travel Coalition is to interpret industry and government policies and practices and provide a platform so that the managed travel community can influence issues of strategic importance to their organizations.

 

Contact BTC

Kevin Mitchell 610-999-9247; Mitchell@BusinessTravelCoalition.com

 

 

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