transparency

Airlines assert that a U.S. Department of Transportation (DOT) requirement that they prominently display the full price of an airline ticket (base fare, taxes, fees) in a print or online advertisement treats them differently than other industries. They are correct. There is a reason. They are treated differently on many different levels.

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Today, an anti-consumer bill about airline pricing was marked up by the House Transportation and Infrastructure Committee. Amazingly, the bill was introduces with bipartisan backing from some of the Democrats’ supposedly top consumer-friendly legislators. The bipartisan cabal of representatives added a most Orwellian name to the bill, “The Airfare Transparency Act of 2014.” This bill does nothing to help transparency. It only allows airlines to make understanding the full price of travel more difficult.

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I’ve received no complaints from air travelers about their inability to view the taxes and fees on their airline tickets. A representative for the Transportation Department, which collects complaints about airfares, also told me that it’s “unlikely” that anyone has asked it for more transparent prices. “Consumers have consistently confirmed to us that advertising of prices below the total cost of travel causes confusion,” DOT spokeswoman Caitlin Harvey told me.

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At a forum in Washington, DC, in the Rayburn House Office Building, consumers squared off against the airlines regarding airfare and airline fee transparency. Basically, consumers asked to be informed of how much the entire air travel package will cost at every point where the airlines choose to sell airline tickets. Consumers want to be able to compare prices across airlines including optional fees such as baggage and seat-reservation fees.

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The domestic airline industry as a whole is in the process of re-imagining its business model, moving away from one in which the price of a ticket covers the basic cost of air transportation to one in which optional fees account for much of its profits.

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More than 115 of the nation’s largest travel companies and organizations today launched Open Allies for Airfare Transparency, an industry-wide effort to urge major airlines to share all of their fare and ancillary fee information through the distribution systems they currently use and not to circumvent those systems through new, untested, and potentially costly “direct connect” approaches.

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DOT notes that there’s been an industry-wide trend (well documented on this site) to “unbundle” fares by charging fees for individual services provided in connection with air transportation. New rules are needed to ensure adequate notice of such fees for optional services to consumers.

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In a dramatic effort to gather passenger comments about the newest rulemaking proposed by the Department of Transportation (DOT) the government has partnered with Cornell University and created Regulationroom.org.

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The most important facet of the proposed DOT rules, from my point of view, is the section dealing with airline ticket pricing and fees. This rule will change the way you buy airline tickets so that you can compare the true costs of various flight options.

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The airlines have created one of the business world’s most complex pricing structures. Maintaining fee obscurity was a virtue as far as airline profits go, but a vice when the goal is consumer transparency.

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