DOT proposed rules: airfare + fee transparency = complexity

by Charlie Leocha on June 3, 2010


Rules proposed yesterday by the Department of Transportation (DOT) will force airlines to reveal total air travel costs, including airfares, surcharges and fees. Once these fees are made public, travel agents and airfare websites will be able to create ways for travelers to use this information.

With both airfares and fees out in the open, websites such as Expedia, Travelocity, Orbitz, Priceline and others will be able to develop systems to allow air passengers to more accurately compare the total cost of travel including airfares and fees.

Travel agents will be able to provide their clients the total cost of travel including baggage charges, seat reservation fees, check in fees, credit card fees, premium seat fees, and any other fee that airlines decide to create in the future.

Ever since the evisceration of the Menendez amendment to the FAA Reauthorization bill and the beginning of conference committee work to resolve differences between versions of the House and Senate versions of this bill, consumer interests have been hanging in balance.

The Consumer Travel Alliance (CTA) has been meeting every week with Congressional staff members and regulators to try and insert language into the FAA bill that would force airlines to publish all fees at the same time that they publish airfares.

CTA has been joined in this legislative battle by the American Society of Travel Agent (ASTA) and by the Interactive Travel Services Association (ITSA). These two organizations represent all travel agents, both traditional and online, and the main central reservation systems used in the travel industry.

It has been a long fight. This DOT rulemaking is certainly a help, but language in the FAA Reauthorization mandating transparency of airline fees is still the ultimate goal.

As it stands today, airlines are not required to reveal their fees to travel agents. They do this to force travelers to come to their websites to get the information and in some cases to keep passengers in the dark until the last minute about what fees apply to various airline tickets, baggage, seat assignments, etc.

This new DOT rulemaking and the CTA supported amendment to the FAA bill will mandate that airlines reveal all fees and surcharges at the same time that they publish airfares.

It seems simple, but in a world of cutthroat competition and complex information technology systems, merely passing a law for fee transparency is only the necessary beginning.

What fees must be revealed? There are basic fees. There are different fees for passengers who pay online. There is yet another series of fees for frequent fliers; and within that group various fees for elite members vis a vis regular members. Airlines have announced a new set of fees for certain credit card holders.

With so many fees passengers will need to reveal far more when they are purchasing tickets in order to accurately compare costs of travel.

Airlines, travel agents and online travel sites will need to know passengers’ frequent flier status and what credit card the passenger is planning to use to purchase the airline ticket in order to serve up the proper fees.

When a routing has a dozen different possible airline combinations, there will need to be a system to factor in different fees for different frequent flier members. John Smith who may be Gold with American is only a basic traveler with USAir and perhaps a 1K with United, falls under three different fee structures.

Now software development can now begin to create never-before-considered ways to present this information.

Will passengers create a secure and independent travel profile that stores all credit cards and frequent flier information? Will that profile be able to be accessed by any reservation agent in order to serve up total travel costs?

Or, will passengers have to go through a long Q&A procedure prior to getting any airline ticket quotes?

Or, will travelers be forced to maintain a series of these travel identity profiles with each online travel agency or brick-and-mortar agency with which they do business.

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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  • Joel Wechsler

    Can you spell nightmare?

  • Pingback: The truth about the government’s new “full fare” disclosure rule

  • tick835

    Fee Transparency? Here’s one, I think the Airline Baggage Fee pricing concept is a joke, Why do the airline treat carrying a passenger’s bag in its underbelly an option to a passenger? The airline should also publish its percentage of passengers that do NOT ship luggage on flights lasting 2 1/2 hrs or more, e.g. validate the need to have a baggage fee in the first place. You get my drift, deceptive pricing! This Baggage Fee or ‘supplemental’ pricing makes it more difficult for the non-business passenger to pick their flight and carrier wisely, perhaps that is the intent of the airline as consumers become more price conscious. Nevertheless, the airlines need to stop this practice, and include passenger baggage carriage in the base fare, and as a cost of flying. Whose idea was it to break out this fee in the first place, and why?

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