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U.S. government wants full disclosure on airline fees

May 22, 2014, Washington, D.C. - Passengers love the idea, but airlines hate it. The government wants to require that travellers be told upfront about basic services that aren't included in the price of a ticket and how much extra they'll cost.


May 22, 2014
By The Associated Press

The Transportation Department proposed Wednesday that passengers be
provided detailed information on fees for a first checked bag, a second
checked bag, advance seat assignments and carry-on bags.

 

The rules would apply whether passengers
bought tickets on the phone, in person or online — and not just from
airline websites. Airlines that want their tickets to remain available
through travel agents and online ticketing services would have to
provide them information on fees for basic services, too, something most
have been reluctant to do.

 

The idea is to prevent consumers from
being lured by low advertised airfares, only to be surprised later by
high fees for services once considered part of the ticket price.

 

Airlines currently are required to
disclose only bag fees, and even then they don't have to provide an
exact price.

 

Some provide a wide range of possible fees in complex
charts.

 

"A customer can buy a
ticket for $200 and find themselves with a hidden $100 baggage fee, and
they might have turned down a $250 ticket with no baggage fee but the
customer was never able to make that choice," Transportation Secretary
Anthony Foxx said in an interview.

 

But adopting the changes would be the
wrong choice, said a trade association for the airline industry. The
"proposal overreaches and limits how free markets work," Airlines for
America said in a statement. And it predicted "negative consequences."

 

Under the proposal, fees would have to be
specific to the advertised airfare. Any frequent-flier privileges would
also have to be factored into the price if the airfare is advertised on
an airline website and the passenger supplies identifying information.
The proposal would prohibit "unfair and deceptive" practices by airfare
search tools, such as ranking flights by some airlines ahead of others
without disclosing that bias to consumers.

 

The rule doesn't cover fees for early boarding, curbside check-in and other services regarded as optional.

 

The government also wants to expand its
definition of a "ticket agent" so that consumer protection rules also
apply to online flight search tools like Kayak and Google's Flight
Search, even though they don't actually sell tickets.

 

Many consumers are unable
to determine the true cost of a ticket because fees are often hard to
find or decipher, the government says.

 

"The more you arm the consumer with information, the better the consumer's position to make choices," said Foxx.

The public has 90 days to comment on the proposal. Foxx said he hopes the rule will become final within the next year.

 

The proposal is the latest of several
clashes between the Obama administration and airlines over passenger
rights.

 

For instance, the industry is backing a bill recently passed by a
House committee that would effectively nullify a rule adopted in 2011
that requires airlines to include taxes and government fees in
advertised airfares so that consumers can see the full price of a
ticket.

 

The new government effort is partly a
response to changes in industry business strategy since 2008, when
carriers started unbundling their services, beginning with checked bags.

 

More recently, some
airlines have begun offering consumers not only a stripped-down "base"
airfare, but also a choice of several packages with some of the
once-free services added back into the cost of a ticket but at higher
prices. With packages and a la carte fees multiplying, comparison
shopping for airfares is becoming more difficult, consumer advocates
say.

 

Charlie Leocha, who lobbies for passenger
rights on behalf of the Consumer Travel Alliance, welcomed the proposal
for changes. "We are getting most of what consumers have been
requesting for more than five years," he said.

 

But the airlines trade group protested:
"The government does not prescriptively tell other industries — hotels,
computer makers, rental car companies — how they should sell their
products, and we believe consumers are best served when the companies
they do business with are able to tailor products and services to their
customers,"

 

The Transportation Department also
proposes expanding the pool of airlines required to report performance
measures such as late flights, lost bags and passengers bounced from
flights due to overbooking. Currently, only airlines that account for at
least 1 per cent of the market must report those measures, which the
department posts online in its Air Travel Consumer Report. The proposed
regulations would include carriers that account for little as 0.5 per
cent of the market. That would bring in discount carriers like Spirit
and Allegiant airlines and many regional air carriers.

 

Major carriers would also have to include
the performance of their regional airline partners when reporting their
own. That means the on-time and lost bag records for major carriers may
take a nose dive, since regional carriers tend to perform more poorly
in those areas.

 

The proposed rules are the
Obama administration's third wave for airline passengers. The effort
began with a ban on tarmac strandings in which passengers can be cooped
up in planes for hours, sometimes in miserable conditions.

 

Facing the
prospect of fines of as much as $27,500 per passenger, airlines have
nearly eliminated such incidents by cancelling flights in advance of
severe weather.