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Congressman is About to Abolish a Requirement for Honest Travel Advertising

Just read a column by Arthur Frommer in the travel section of the Palm Beach Post that describes the efforts of a first term Florida Congressman to amend the FAA funds authorization bill so that government fees and taxes would no longer have to be included in advertised prices. The effort to include these has now been in effect for three years. Eliminating it will bring back the days of the $79 airfare with the true cost later showing up as more than double the "come on" deceptive price. Here's a link to the article on the Frommer website.

PREVENT THIS FROM HAPPENING! Please contact your congressman to defeat this amendment.

Posted by
2 posts

The so called "deceptive price" separates the air fare from the government charges. Requiring that the two be combined makes it easier for the government to conceal what it is charging. Studies have shown that when taxes are bundled with the price the government charges quite a bit more. Thus what the "First term Florida Congressman" proposes is definitely in the public interest and should be supported.

Posted by
774 posts

Studies have shown that when taxes are bundled with the price the government charges quite a bit more.

How about some links to those "studies" showing this to be true?

Posted by
21856 posts

I really fail to see how this is in the interest of the traveling public. When I receive the final price it clearly indicates taxes and fees so nothing is being hidden from me.

Posted by
8507 posts

The first slickly-worded answer was by someone posting for the first time. Employee of the congressman or his donors who are pushing this?? I'd like this person to cite his studies. Too many buzz words not to be a partisan employee. Nothing in this bill to help "the people".

Interesting article by Frommer, none the less.

It's been so helpful for the consumers to be able to see the full price at first glance: fuel surcharges, taxes, included. It used to be a waste of time to go through all the booking only to find out the "true" price at the end and have to start over looking at other airlines, itineraries, etc.

Posted by
1058 posts

I agree with Philip and Arthur Frommer. I hate being surprised when I get ready to hit the book it and see the actual price. There is no reason that I can see why the taxes and fees shouldn't be included.

Posted by
2491 posts

"Requiring that the two be combined makes it easier for the government to conceal what it is charging."

That's some really strong anti-government paranoia. Let's see, lots of people want a certain flight, so the government is going to raise hidden fees on it, but the airlines are all going to charge the same. smh.

Posted by
5789 posts

If it ain't broke.... I've been perfectly happy with bottom line pricing and the detailing of fees and taxes. I for one focus on the bottom line total cost of travel. Thank you Philip for bringing the proposed legislation to the light of day.

Here is the congressman's amendment to the FAA re-authorization:

https://curbelo.house.gov/news/documentsingle.aspx?DocumentID=753

Another amendment will hold the FAA accountable by allowing the
advertised prices of tickets to be separately disclosed from
government imposed taxes and fees. This will ultimately return the
transparency of ticket pricing back to the airlines, and I am glad
both of these amendments were adopted with bipartisan support.

The amendment:
http://docs.house.gov/meetings/PW/PW00/20160211/104471/BILLS-114-HR4441-C001107-Amdt-45.pdf

‘‘(e) FULL FARE ADVERTISING.— ‘‘(1) IN GENERAL.—It shall not be an
unfair or deceptive practice under subsection (a) for a covered entity
to state in an advertisement or solicitation for passenger air
transportation the base airfare for the air transportation if the
covered entity clearly and separately discloses— ‘‘(A) the
government-imposed taxes and fees associated with the air
transportation; and ‘‘(B) the total cost of the air transportation.

and

(b) LIMITATION ON STATUTORY CONSTRUCTION.— Nothing in the amendment
made by subsection (a) may be construed to affect any obligation of a
person that sells air transportation to disclose the total cost of the
air transportation, including government-imposed taxes and fees, prior
to purchase of the air transportation.

So much for plain English and straight talk.

Posted by
18378 posts

Supposedly, in the free market system, competition will drive prices down to a minimum. The most efficient producer will make an acceptable profit; all others will have to get more effiecient or take a lower profit.

Business don't want to take a lower profit, so they look for ways to avoid competition. One of the ways for a less efficient producer to avoid competition is to deceive the customer into believing he is paying less for the product than he really is.

What if Walmart worked the same way as airlines would like pricing to be (and the way telephone services and non-over-the-air television is). You come to the checkout with a widget marked at $5 and the clerk asks for $12. Included in the $7 "taxes and fee" are not just sales tax, but what the store paid in property taxes, inventory taxes, all the taxes they paid on utilities (if not the cost of utilities as "fees"), all the gas taxes that their trucks paid, etc.

I wonder if these companies pay their employees so that they get the salary they were offered after taxes.

The reason for government regulation is that businesses will do anything, no matter how unethical, to increase their bottom line.

Posted by
774 posts

MrsEB writes: I as a traveler WANT to see the full breakdown of the cost which is the cost of the flight AND the actual itemization of taxes and other government fees.

Airlines have also wanted the true pricing to be on view as they feel it unfair for the government to hide the taxation in the base price.

The gov't has done nothing to prevent the airlines from telling you what the taxes are. If they "wanted" to do so, they would. Here is the current regulation which some find so odious.

Although charges included within the single total price listed (e.g., government taxes) may be stated separately or through links or “pop ups” on websites that display the total price, such charges may not be false or misleading, may not be displayed prominently, may not be presented in the same or larger size as the total price, and must provide cost information on a per passenger basis that accurately reflects the cost of the item covered by the charge.
https://www.law.cornell.edu/cfr/text/14/399.84

All the law requires is the largest price, prominently displayed, displayed be the total price. This is to prevent airlines from splashing one number in their ads and then, often requiring several screens of clicking, displaying other costs.

So why do you claim the airlines "want" to include the tax info but are somehow stopped from doing so? The regulation clearly says "charges included ... may be stated separately or through links", does it not?

Why are you outraged about a law that allows consumers to comparison shop?

The curious thing is that you seem to suppose that previously this information you "WANT" was provided and now it isn't, and that this law will return us to those halcyon days of yore. None of this is true. Previously some airlines would advertise a "come-on" price and only after going thru pages of their website or about to complete the purchase would you find out the full price was significantly higher. Furthermore they never provided an "actual itemization of taxes and other government fees". They just gave a number added to their "come-on" price that was the sum of other charges. Look at the proposed law someone posted earlier. Not a single sentence requires the itemization that you "WANT".

Posted by
2739 posts

When I posted the original info on this topic, I did not realize that the tea party was mentioned. I posted it because I feel that, as a frequent traveler, I want the price I see offered to be the total price. When I do chose a ticket, before confirming the purchase, I do see the ticket price, taxes and fees broken out separately. It's not really hiding anything. In the article referenced by Mrs. EB it mentions that Spirit Airlines challenged the law and the Supreme Court refused to hear the case. This is the same airline that is notorious for advertising LOW prices and hiding its exorbitant fees in the small print; good airline if you don't take ANY luggage and have quarters ready for the pay toilets!

Posted by
2916 posts

When I see an airfare, I want to see the total price. I really don't care how it breaks down. If there are optional things that will add to it, that's fine, because I can decide whether or not to choose them. Same with VAT and service charges on meals in France. I'm very happy to just see the full price of a meal on the menu; I really don't care about the various tax and service components, although I believe that's broken down when the bill comes.

Posted by
18378 posts

"That's how I see it too. As do the airlines and they are right."

Right? Yes, far right. And only interested in maximizing profits, no matter how much lying it takes.

The government is NOT hiding the taxation. The airlines have every right to display how much taxes are included in the price; the FAA is not preventing them from do that. The airlines are hypocritically claiming that they are against the government "hiding" the taxes, when, in fact, they want to hide the full fare. They want to deceive the public as to the real price of flying, and that is unethical.

Your argument about what other representatives of either party agree with or disagreed with, and how much they receive from who, is irrelevant. The only point here is that the amendment is a "right to lie", and that is not in the best interest of the public.

As for the USAToday article, it includes a blatant lie, spread by USAToday and Airlines for America. I wasn't born yesterday; I searched for tickets before the current FAA regulation. I saw ticket prices where the taxes and fees didn't add 20%; they doubled the cost of the ticket, and, I'm sure, included every taxes and fees they could find, regardless of relevance to the cost of the ticket. For example, I'm sure they used landing fees at airports, but that is their share of the cost of the airport. Where else will they land? On the interstate. That's part of their legitimate costs, not something hidden.

Next, airlines will start charging you a landing fee, like a checked baggage fee. If you don't want to pay the fee, they'll make you get out over the airport, but, of course, they'll charge you an optional, parachute fee.

Posted by
1058 posts

I don't know why anyone would support this bill. To get the final price of a ticket, I have to click on a link? I know people use the argument that Walmart doesn't include the sales tax in the price they advertise, but everyone knows what the sales tax is and it is a small amount. The taxes and fees on airline tickets are a significant amount. Ask yourself, if Spirt Airlines is the company sponsoring this bill, will it really be good for the consumer? Spirit is one of the airlines that led the way hiding charging for all kinds of things that used to be included in the price of the ticket. If this passes, only the airlines will benefit, not the consumers.

Posted by
3493 posts

Today, under the current rules requiring an airline to post the total all-in price of everything that is mandatory, works because you can easily shop multiple airlines and see exactly what you will pay for the ticket on the initial screen presented or in advertisements found anywhere. And when you get the ticket, the taxes and fees are broken out clearly and completely on the receipt. I fail to see why that is an issue for anyone.

Under the proposed rule, you would have to select the ticket on each and every web site you want to check out, click who knows how many times, and then see the total price and that would be completely acceptable. How is that better for the passenger? It makes it nearly impossible to compare through online search sites and see which fare is best. What is to keep an airline from advertising a $1 fare and then adding $1,000 in mandatory fees? This would skew any attempt at searching for valid air ticket costs online.

Why can't this congressman spend time on important airline issues like minimum seat dimensions or rules for when airline refunds must be credited to your account or other real issues that impact real people.

Edit:

In the USA Today article one comment stated is: “The consumer has the right to know the real cost of getting their family to that well-earned vacation." My response is how is NOT displaying the true total mandatory cost of the airline ticket going to do that? By showing a price that is at least 20%, and in many cases such as flights into London many times that amount, less than what it is going to cost you to purchase it helping the consumer know anything?? The "true cost" is what the total amount is. including all taxes and fees. Since they are mandatory, you will pay them if you buy that ticket.

Posted by
18378 posts

"you can easily shop multiple airlines and see exactly what you will pay for the ticket"

That's exactly what the airlines are fighting against.

Posted by
1058 posts

I had friends that recently booked two flights to Heathrow. They paid for the flights with their frequent flyer miles. All they had to pay were the taxes and fees. The taxes and fees were over $450. They would be hidden under the new law until they booked their flights or clicked on a separate link to see what they were. Taxes and fees are large. I wonder if this law will apply to cruise travel and if you will have to click on multiple links to see what the port taxes are and any other charges. I hope everyone will send an email to their representative asking them to vote against this. I did.

Posted by
18378 posts

I don't use frequent flyer miles, so I'm not sure how they are displayed. I don't know that the new law would hide the taxes and fees on FF miles.

However, I have written my congressman asking him to oppose this amendment.

Posted by
21856 posts

Airlines have also wanted the true pricing to be on view as they feel
it unfair for the government to hide the taxation in the base price.

BS !!!! Lee is correct. There is a lot of spin and dancing going on. The issue with government tax is a sham and has nothing to with the change.

An associate who is in marketing with United says that the problem or concern is caused by the various search engines that zero in on the "fare." The vast majority of travelers search solely for the cheapest fare and rarely go beyond the first screen that the search engine throws up. (They have marketing studies to prove that.) From a marketing standpoint it is critical that the airline is first or second on the first screen that the traveler sees. Once the buyer selects the airline less attention is paid to fees and taxes because the buyer assumes that the fees and taxes are the same for all the airlines. Taxes general are but fees have no legal definition so fees can be anything the airlines wants them to be. What are fees anyway other than a shifting definition of costs. I can remember when there were no fees on ff tickets and now the fees can be huge. What has changed?

There is nothing to prevent an airline from offering a $100 fare with $600 fees at the same time another airline is offering the same flight for $200 fare and $400 fees. Under the current regulations the $600 airline would be first on the list as the cheaper option. With the change, the $700 airline would be first on the list. And most buyers will not compare fees.

What the airlines want is the ability to control their position with the various search engines lists that travelers use for reservations. Under the current regulations it is difficult to do. The cheapest flight (fare, fees, and taxes) will truly be list as first on the list. If you list only the "fare" component then it easy to manipulate your positions on the list. We see that all the time with the deep discount airlines who offered super low fares and have moved their fees further off the radar - fees for printing boarding passes, seat selection, carry on luggage, etc. None of this works to the consumers benefit and only benefits the airlines. And any argument to the contrary is just spin.

Posted by
18378 posts

As an example of what Frank says, before the final price ruling, I can remember looking at fares to Germany on search sites. United and Lufthansa would code share on the same actual flight, but United always showed a lower fare. But when you looked at the final price, United would add more taxes and fares, and the final price would be the same on both airlines.

And then, along would come USAir with a really low price, and taxes and fees would be more than the fare part, and the final price might be higher than other airlines. At that point, I learned to ignore USAir.

Posted by
774 posts

None of this works to the consumers benefit and only benefits the airlines. An any argument to the contrary is just spin.

It's not spin, it's a worldview impervious to contrary evidence, a worldview spread by true believers who have become so steeped in distaste for gov't that they embrace any claim that the gov't is making things worse, a worldview that regulations are only used to hide gov't misdeeds or intentionally harm markets that would have worked perfectly otherwise.

Just look above. @althaus tells us of "studies" showing the gov't is hiding raises to taxes behind the total fare, but never produces a link to those studies. @MrsEB says the airlines "want" to tell us the taxes and fees but conjures up the existence of gov't rules (in the face of the actual wording of those regs, mind you) preventing those public-spirited companies from doing so, also trotting out the "hide the taxation in the base price" argument.

Posted by
21856 posts

John, I don't disagree with your conclusions or analysis. Just different thoughts about spin. And comparing it to a VAT is just as silly.

Posted by
4637 posts

Consumer has right to know the full price. Otherwise the price which would be advertised would be just imaginary, like with Ryan Air.
Tax, fee for seat, fee for using credit card (but they don't accept cash or check), fee for use of airport, fee for cleaning toilets and endless line of fees and which I mind the most - fuel surcharge. By the way why don't we see fuel deduction nowadays when gas prices are very low? Imagine advertised price $400 but you pay $350 because they use fuel deduction. If price of gas goes up they are very quick to add fuel surcharge. So logically if price of gas goes down it should be fuel deduction.

Posted by
21856 posts

You know what your problem is, Ijja???? You expect logic in airline fares.

Posted by
18378 posts

Maybe the airline pricing philosophy can be applied to all retail businesses. Kroger now adds a cost-of-goods-sold surcharge to groceries. Ground beef used to cost Kroger 50¢ a pound (in 1960); now it costs them $4 a pound. So when you check out, a $3.50/# beef surcharge will be added to your bill.

In 1960, gas cost the service station 17¢ a gallon; now is cost them $1.67 a gallon. So they show 17¢ a gallon on the sign outside, but add $1.50 a gallon fuel cost surcharge to your final bill. Oh, and maybe they add your "share" of the property tax they paid on the land. And the social security tax they paid on their employee's wages. And the, and the.

This idiocy has to stop somewhere.

I think airline tickets should automatically include all taxes and fees, and one piece of checked luggage. If you don't check luggage, they have to give you a discount. Do you think they would give you a $25 discount for not checking a bag?

Oh, that's right. We can't expect logic in airline fares.