Can airlines give us too many choices?

by Charlie Leocha on June 6, 2013

Fees
There are many ways to mislead consumers. One of them is to make the pricing of a product so confusing that customers aren’t sure what they are really paying. Back in the days when fees were rare, airlines hid them together with taxes in the fine print of ads.

Today, a multitude of optional fees are just about impossible to figure out and require a real effort to compare across airlines.

An early 2012 airline advertisement in a Boston newspaper used to say, “$65 one way to London.*” The asterisk told readers that the price was based on one-way of a round-trip ticket and did not include mandatory taxes and fees.

That particular airline ticket actually cost $751, since it was only available as part of the round-trip airfare to which mandatory taxes, surcharges and fees were added. The airlines put $65 in the ad and the customer, in order to buy what was advertised, had to spend almost 1,200 percent more.

In most marketing books that kind of pricing is considered unfair and deceptive. The Consumer Travel Alliance rallied other consumer organizations in DC to support new rules, worked closely with the Department of Transportation (DOT), filed comments, spoke directly to policy makers and even had a meeting in the President’s Office of Management and Budget to change that kind of advertising.

Eventually, back in January 2012, that kind of deceptive airline pricing was banned when a new regulation was issued and the airlines were required to advertise the full price for airfares, including mandatory taxes, surcharges and fees.

The airlines did not take the new federal regulation well. They filed suit with the Federal Courts claiming that their freedom of expression was being denied. The airlines also claimed that DOT was exceeding their powers when they ruled that advertising a trip costing $751 for a price of only $130 with an asterisk explaining the remaining $621 in tiny type at the bottom of the newspaper and nowhere in radio ads running in the region, was deceptive.

Thankfully, the Federal Courts dismissed the airlines’ suit against DOT. However, the airlines then pursued this case to the Supreme Court, hiring one of the most expensive lawyers in the country to plead their case. That didn’t work either. The Supreme Court refused to hear the case and upheld the DOT right to create rules that said advertising a flight for $130 when it really costs $751 was unfair and deceptive, not a restriction of free speech.

Today, all advertised airfares include all mandatory taxes, fees and surcharges. The advertised price is what you pay. If it is not, let DOT know.

Well, that only goes as far as mandatory fees, surcharges and taxes. Enter the new attempt, via optional fees, by airlines to mislead and deceive passengers regarding the full price of travel. They make additional fees hard to compare across airlines and they have added more and more complexity, options and exceptions to these fees. And, when dealing with travel agents, where 60 percent of overall travel is sold, the airlines do not disclose these dynamic fees that vary according to frequent flier status, length of flight and the credit card used to purchase the tickets.

Yes, airlines have refused to disclose their optional ancillary fees to travel agents who sell their airline tickets. The only prices available on sites like Expedia, Orbitz and Travelocity are simple airfares. No airlines provide baggage fees or seat reservation fees to these sites so that consumers can select the flights they want and then compare the overall cost across airlines.

DOT, as a start, has mandated a static page of fee prices, but that page doesn’t help with rules such as buying airline tickets on the same record locator number in order to save money for your family or other exceptions and specific flight information. Seeing that overall seat reservation fees range from free to $90 doesn’t help passengers either.

The airlines are withholding these prices from consumers, even on their own websites, until after the basic airfare is purchased. When round-trip airfares run between $100 and $200, adding a $35 seat-reservation fee and a bag fee of $25 each way adds $120 to the cost of the trip — that’s significant in my book — and that used to be part of the airfare in 2008 before airlines changed the definition.

Even if these fees were not hidden, the sheer numbers of these fees boggle the frugal traveler’s mind. Passengers today are faced with fees for checked bags, carry-on bags, checking in at the airport, speaking with human beings, pillow, blankets, meals, Internet, early boarding, short security lines, extra legroom, lounge access, annual baggage passes and more.

When the exceptions available because of credit cards and frequent flier status are applied to a family of four, the permutations of fee combinations can reach around 28,000 various fee options and when comparisons with two other airlines come into play fee options go through the roof.

So, the airline customers have gone from the frying pan into the fire. Airline passengers once were hoodwinked by hiding fees in the fine print. Today, airlines have created so many fees and so many exceptions that the normal passenger has no hope of knowing the true price of travel.

It is time that DOT takes a hard look at what constitutes airfare or at least mandates that airlines disclose baggage fees and seat reservation fees so that travel agents can provide comparison shopping for everyday airline travelers.

Hiding fees was deemed deceptive and, today, listing complex and varying fees individually is misleading. The airlines shouldn’t be treating their passengers this way.

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    ya i think it can and giving as well

  • BobChi

    I’m glad the government forces all other aspects of the economy to limit choices to the consumer. Since there’s only one cell phone plan available for all of us, it’s easy to decide and I don’t have to think for myself, balance preferences and make decisions.

    Seriously, why shouldn’t I have options when it comes to buying airfare? This time I do want to check a bag, next time I don’t need one. Charlie has written this same article at least 25 times. I’d like to see a model of what he’d like to see, rather than just venting.

  • mapsmith

    This article reminded me of several Food Network shows that I have become addicted to.
    (i.e. Mystery Diners, Restaurant Impossible, Bar Rescue, Restaurant Rescue, etc [to give props to the producers])

    In these shows, it seems almost invariably, one of the problems the failing business has is that the menu is too complicated. The professionals suggest that a restaurant menu only be about 6 pages long at a maximum. After that, people get confused and just do not order the quantities and varieties of food.

    Taking this to the Airlines, when they have too many choices, the consumer gets confused, tired, and will not purchase.

    By simplifying the airfare “menu” they will find an increase in passengers.

    If I have a choice between flying American, Delta, or Southwest between Phoenix and Atlanta, and AA, and Delta have 12 different flights each at different prices and Southwest has one price by several different flights, which should I take. That becomes a ‘no-brainer’ if the fares are within about $40.

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