Airfares — priced to deceive

by Charlie Leocha on October 18, 2012

© Leocha

Over the past three years I have been working together with the Consumer Travel Alliance (CTA) to have airlines disclose ancillary fees so that consumers can compare the full cost of travel. Many have questioned why I have been like a dog on a pant leg about this issue. It is simply because consumers are being deceived by the airlines with unrealistic airfares.

Let’s face it. Airlines have artificially lowered their airfares by unbundling them or stripping everything out of the airfare except transportation — getting from Point A to Point B. For many airlines, airfare does not include baggage, seat reservations, speaking with a telephone agent, interacting with a gate agent, food on the plane, a pillow or blanket and other amenities that were once considered part of airline travel.

The entire reason for the legacy network carriers to embrace this kind of pricing is to make their “airfares” appear to be as inexpensive as Southwest Airlines, JetBlue and some other low-cost carriers. They are misleading passengers into believing that their flights cost the same or about the same as competitors when that is not the case should a passenger want to check a bag or reserve a seat.

If the airlines decided to change the definition of airfare and then disclose to passengers the costs of baggage and seat-reservation fees when applicable so that the real cost of travel could be compared across airlines, CTA would have no problem with the airline actions. But, when the airlines unbundle their airfares with the express purpose of making them appear to be the same as Southwest and JetBlue service, that is deceptive.

When the airlines refuse to disclose these ancillary fees and their prices so that passengers (and even major corporations) cannot easily assess the impact of these fees on their travel prices, that shows a corporate culture of deception.

This unbundling was done under the noble claim that it would give passengers more choice and that it would allow passengers to only pay for services they want.

Why should one passenger with only carry-on luggage subsidize another passenger who carries more luggage that needs to be checked? Why should a passenger who could care less if they are stuck in a middle seat be forced to subsidize passengers who only want a window or aisle seat?

That is all well and good. But when the airlines took the next step of not disclosing these ancillary fees to any ticket agent other than the airline itself, they crossed the line when it comes to deception.

Even after almost half a decade of baggage fees and the growth of fees for scores of other services, airlines have not come clean and disclosed the baggage and seat-reservation fees.

Sixty percent of passengers who purchase airline tickets through travel agents cannot easily compare the full price of travel including the most basic baggage and seat-reservation fees. By only providing airfare without the ancillary charges, airlines are being deceptive.

If there was some consistency with these fees across airlines, the airlines’ non-disclosure of fees might be explained away. However, each airline sets its own fees, exempts some of its elite frequent flier members and has different rules for those who purchase travel using their credit cards. The differentiation becomes even more difficult when exemptions extend to family members and/or other travelers on the “same reservation.”

This is blatant “drip pricing,” a pricing technique in which firms advertise only part of a product’s price and reveal other charges later as the customer goes through the buying process, or worse, long after the initial buying process.

With the airline industry, the airfare is the come-on price and drip charges (baggage, seat-reservation and others) can be discovered long after the deceptive airfare has been purchased.

Delta Air Lines, for example, according to the airline representative on the Advisory Committee for Aviation Consumer Protections, doesn’t charge for baggage until passengers check in for their flight, sometimes months after the initial purchase. Then, passengers are hit up again for another charge on their return flight.

Delta Air Lines goes out of its way on its home page to make the links to its DOT-required page that lists all ancillary fees difficult to find.

• The DOT-required link is buried at the bottom of Delta’s home page.

• The DOT-required link is labeled “Our Baggage Fees Have Changed. Get the latest updates on baggage and service fees.” There is no simple link that says, “Baggage and other fees,” for instance.

• The DOT-required link is the only link on the home page that does not work with a click anywhere on the description. Users have to specifically click on the individual words “baggage” and “service fees.”

• Logical places where passengers might search for baggage and other additional fees, such as drop-down menus at the “Planning Tools” and “Travel Information” links at the top right of Delta’s home page, do not provide a direct line to extra fees.

The only explanation for these kinds of actions on the part of one of America’s largest airlines is that Delta does not want consumers to clearly see the costs of ancillary fees and see clearly what the final cost of travel will be. It is simply price deception.

What is so disheartening about Delta’s actions — making it difficult to find even a static page with price ranges of ancillary fees — is the disdain it shows for their customers and a corporate pricing culture designed to deceive rather than be honest with passengers.

This culture of deception spans the entire spectrum of airline passengers and the distribution network. Corporate travel managers (some of the top airline clients) cannot get ancillary fees disclosed so that they can budget properly and more easily reimburse employees. Travel agents cannot easily compare prices across airlines inclusive of ancillary fees for their clients. And, the individual traveler who travels infrequently is faced with a near impossible situation should that traveler want to find the best deal.

With price deception ingrained in so much of the airline industry, it appears that Department of Transportation (DOT) action is more important than ever.

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  • Anonymous

    Once again, more deception in this article than in a presidential campaign advertisement. (and don’t get me started about Connie Mack…..)

  • http://www.hobotraveler.com/blogger.html Andy Lee Graham

    Thanks for trying to slow down the airlines, yet, I believe maybe the “culture of deception,” is enabled by the Internet. Maybe 15 years ago, I could complain directly to a person, there is nobody to be found. Yet, the American public loves to, the world loves to continually peck away on a cell phone when even a real human is sitting next to them.
    The world is celebrating clever business, above honest business.

  • Anonymous

    Isn’t marketing just another form of deception?
    Charlie, maybe another approach is to better educate consumers so they won’t become victims of deception.

  • Anonymous

    You mean instead of the same old rant that seems to appear here at least twice each week.

  • Anonymous

    To be polite, yes. We are all together in the same boat.
    The real solution is to have an intelligent and well informed public. Unfortunately, I do not think the general public knows where to go to get valuable information. Or, they are so confused, so they just go with the flow and whip our their credit cards.

  • Anonymous

    I bought 9 tickets online instead of in my GDS. All the information I needed was onsite where I bought the tickets. What Charlies wants is a chart that comes up for every carrier with all the options before he buys from one for comparison. Tell me please, Charlie, where is that online for any other purchase you might make? Do your feel the same entitlement to this type of comparison chart when you need to buy a water heater?

  • Anonymous

    Even if such a chart exists, very few will have the tool to add up all the different ancillary fees and make a comparison. I would prefer the DOT more vigorously enforce the rules they already have in the books than spend an enormous amount of time and resources debating online comparison shopping experiences.

  • Anonymous

    Even if such a chart exists, very few will have the tool to add up all the different ancillary fees and make a comparison. I would prefer the DOT more vigorously enforce the rules they already have in the books than spend an enormous amount of time and resources debating online comparison shopping experiences.

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  • Anonymous

    I am also offended each time he says that travel agents can’t handle this, that the informaiton doesn’t exist for us. FALSE. This is our business, we have the information accessible. I don’t know who he talks with, but they obviously don’t know what they are doing and since he doesn’t either, he needs to use someone who does.

  • Anonymous

    I am sure you and other TAs have noticed the new detailed baggage allowance information displayed when you autoprice a PNR and send a passenger ETR (where it displays the same thing per passenger again and again). There has to be a point were additional information is an overkill.

    Also frankly, since my clients don’t care for the ultra-low cost carriers (i.e. Spirit Air, Ryanair, etc.), baggage fees are not an issue to them. They know it exists so be it. What they really care about is an affordable price, comfort, timeliness, and an overall great flying experience.

  • Deus Lux

    @bodega3:disqus Maybe we will when water heaters arrive without a heating element, and the response is “you did not select that option.”
    I am in a battle for over 11.2K FF miles, Lufthansa says the price did not include them and Expedia (I know my mistake), says not my problem.
    No disclosure at all and nobody to take responsibility.

  • http://www.myitaliantravels.com Mark Schaaf

    I am glad when I see airfares on the screen that I know they include everything but bag fees, I still don’t like how they screw around with the prices of tickets to other places and how most flights seem supplemented. Why is it that I can fly from Philadelphia to LA almost any time of the year for less then I can fly to Florida, Texas, Ohio and just about anywhere else. Airlines complain about not making money but keep flying half empty plains all over because of high prices of flights going to so many places. Then when the flights are close to the departing date what do they do raise the price of the tickets to the point where no one in there right mind would pay for a ticket. I haven’t flown many times because the jacked up the price of the flight a week out from departing. It was always a last minute for me and sure the normal price was $250 dollars round trip and they jacked it up to 600 but they could have gotten $500 dollars more for that flight from both of us instead they made nothing. Just so stupid.

  • Anonymous

    This is where the internet is a dangerous thing for people who don’t know what they are doing or looking at. The airlines don’t raise the prices, they have different fares based on an advance purchase, day of the week travel, length of stay, city pairs, connecing city and possibility the hour of the flight. There is also the availability issue that you don’t fully see when you book online. You are making an assumption based on not knowing how pricing is handled. Competition also plays into the pricing.

  • http://www.myitaliantravels.com Mark Schaaf

    you can say they don’t raise prices but I have checked prices months out and checked weeks out and even days out and have seen the prices start out low then skyrocket then go back down days before the flight even though this doesn’t happen often.

  • Anonymous

    I have another explanation. Some travelers prefer it this way. I want to see the base fare, which is what I normally plan to pay. I do not want to jump through lots of hoops, turning down this and that, or opting in or out of one thing or another, or be faced with multiple charts before I can see the base fare. This same article has been written dozens of times over the past few years, and I have yet to see Charlie Leocha come up with his own proposal of how to implement his ideas without driving up the costs and inconvenience for the base fare passengers. I think the name should change to “Some Consumer Travel Alliance” since his efforts seem designed to benefit some travelers to the detriment of others.

  • Anonymous

    With some fares, a carrier will not give you frequent flier miles on it. What did the rule of the fare say? You HAVE to read the rules, you can’t assume!

  • Anonymous

    Yes, they raise fares, they lower fares, many times daily. But online you don’t see the fare basis to know this, you only see the price. You need to see the complete picture to understand how this all works. The airlines aren’t showing you, just the price as that is all they think you need to see. We see it all and understand why that fare is there, when it was posted, often how many seats they allow for that fare.

  • http://www.myitaliantravels.com Mark Schaaf

    Sorry but I just don’t buy it, I have flown on many regional flights where there is no first class and all the seats are the same and have been online filling out the form to buy and had the price jump up by 100 dollars. There are plenty of seats left but just not at that price, come on not at that price the seats are all the same on these flights so in turn if there were many people like me looking to fly on this flight they just lost customers and lots out on the money they would have made.

  • Anonymous

    No you don’t understand it and don’t seem to care about learning how this actually works.
    FYI: that price you see isn’t from live inventory which is one problem with buying online. There also may have been one seat left at the price you show and by the time you completed the needed information, that seat was sold.

  • http://www.myitaliantravels.com Mark Schaaf

    And that is my whole problem if I am trying to book a flight on a plane that has no first class and all the seats are the same then why in the world would they have different prices for them.

  • Anonymous

    They often give people discounts for booking well out and holding on to your money. The closer to travel, usually the more expensive the fare for that same seat that was cheaper 3-5 months ago. If seats are not selling, then they can put in a new lower fare. What they are not allowed to do is have a new lower fare with no seats are available on that flight. All there needs to be is one seat available. All this is called inventory control and yes, it is a game you the consumer get to play, but it happens elsewhere. I doubt you notice, as you probably don’t go to the grocery store every day and note pricing, but on weekends, in resort areas, items that are one price during the week, often go up on the weekend. A can of peas might be one price today, another price tomorrow, and again another price on Monday. Department stores do this to. I found one store to change the price of a clothing item 3 times in one week.

  • Deus Lux

    There were no rules listed.

    In fact Expedia has large banners that say ‘Earn Frequent Flyer Miles and Expedia Points.”

    However I filed a complaint with the State of Florida and so far they have replied three different ways on granting the miles.

    I will not bore you with details, but it goes on.

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