Effort is partly a response to changes in airline industry business strategy since 2008, when carriers started taking services out of the price of tickets, beginning with checked bags
WASHINGTON—Going to bat for confused passengers, the government is proposing that airlines be required to disclose fees for basic items like checked bags, assigned seats and carry-on bags so consumers know the true cost of flying.
Under new regulations proposed May 21 by the Transportation Department, detailed fee information would have to be provided wherever passengers buy tickets, whether online, on the phone or in person.
Currently, airlines are only required to disclose bag fees, and even then they don’t have to provide an exact price. Some airlines provide a range of possible fees in sometimes complex charts. The proposed rule would require the disclosure of the exact amount of fees for basic services, including first and second checked bags. The rule doesn’t cover fees for early boarding, curbside check-in and other services.
The government also wants to expand its definition of a “ticket agent” so that consumer regulations like the fee-disclosure requirement apply to online flight search tools like Kayak and Expedia 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.
“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. “The more you arm the consumer with information, the better the consumer’s position to make choices.”
The public has 90 days to comment on the proposal. Foxx said he hopes the rule will become final within the next year. The effort is partly a response to changes in airline industry business strategy since 2008, when carriers started taking services out of the price of tickets, 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.
The department also proposes expanding the pool of airlines required to report performance measures like 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 performance 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 carrier Spirit Airlines and many regional air carriers.
The proposal also would:
—Require large travel agencies to adopt “minimum customer service standards,” such as responding promptly to customer complaints and providing an option to hold a reservation at the quoted fare without payment for 24 hours if made more than a week ahead of the flight.
—Require airlines and ticket agents to disclose whether the ticket being sold is for a flight operated by another carrier under a partnership arrangement. For example, United Airlines sells tickets for flights operated as “United Express” by several regional airlines. But the planes and crews belong to the regional carrier.
—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 proposed rules are the Obama administration’s third wave of consumer protections for airline passengers. The effort began with a ban on so-called tarmac strandings in which passengers were 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.
Other previously adopted regulations include tougher requirements for compensating passengers denied boarding because of overbooking and a requirement that airlines, travel agents and online ticketing sites display full airfares, including taxes and government fees, more prominently than base airfares. Previously, airlines often advertised base airfares and buried mention of taxes and government fees—typically about 20 per cent of the ticket price—in fine print.
The airline industry has clashed with the administration over some of the regulations, especially the requirement that taxes and fees be included in advertised fares. Several airlines sued in federal court to overturn the rule, but the court sided with the government, and the Supreme Court refused to hear their appeal.
Airlines have taken their case to Congress, where a House committee recently approved a bill that would effectively nullify the rule and allow airlines to return to displaying base fares and adding in taxes and fees later.