Could someone please explain to me how requiring airlines to no longer advertise all-in pricing is a passenger experience improvement? Because that’s what a new bipartisan bill in the United States is suggesting.
In this post:
Airlines could start displaying base airfare
On Friday, we saw the introduction of bipartisan FAA reauthorization legislation. The bill is over 750 pages, and contains all kinds of provisions. However, as flagged by David Koenig at the Associated Press, there’s one particularly puzzling provision that could impact consumers.
Specifically, the bill would weaken a rule introduced under Obama, which requires airlines to advertise all-in airfare throughout the booking process (inclusive of all government and airline imposed taxes and fees). If this is passed in its current form, airlines would be allowed to advertise base airfare (not including taxes and fees), as long as a link is included to the all-in price, or it’s disclosed in some other way.
This is published on page 619 of the bill, ironically under the “passenger experience improvements” section. Per the bill:
IN GENERAL. It shall not be an unfair or deceptive practice under subsection (a) for a covered entity to state in an advertisement or solicitation for passenger air transportation the base airfare for such air transportation if the covered entity clearly and separately discloses—
(A) the government-imposed taxes and fees associated with the air transportation; and
(B) the total cost of the air transportation.FORM OF DISCLOSURE.
(A) IN GENERAL. For purposes of paragraph (1), the information described in paragraphs (1)(A) and (1)(B) shall be disclosed in the advertisement or solicitation in a manner that clearly presents the information to the consumer.(B) INTERNET ADVERTISEMENTS AND SOLICITATIONS. For purposes of paragraph (1), with respect to an advertisement or soliciation for passenger air transportation that appears on a website, the information described in paragraphs (1)(A) and (1)(B) may be disclosed through a link or pop-up, as such terms may be defined by the Secretary, in a manner that is easily accessible and viewable by the consumer.
For context, currently airlines have to advertise and display all-in pricing from the start of the booking process. They can’t at any point show fares that aren’t inclusive of taxes and fees.
This probably isn’t a huge deal, but is weird
On the plus side, this bill defines base airfare as being everything except government taxes and fees. In other words, airlines couldn’t advertise airfare without fuel surcharges (since a transatlantic economy ticket might cost $1,000, with a vast majority of that being surcharges).
I guess the next question is whether airlines would even bother changing how they display airfare:
- Maybe I have too much faith in airlines, but I’d hope that they wouldn’t change how they display airfare, even if the government isn’t mandating the current level of disclosure
- Then again, I could see airlines wanting to display airfare without taxes during the booking process, so they appear more attractively priced when consumers first do an online search
What I can’t wrap my head around is the logic for this change? I mean, I recognize these long bills have a lot of fluff in them, and not everyone will agree on everything. But is this a conscious effort by some politicians to make airfare pricing less transparent, is this an oversight, or what’s the motive for this change?
Bottom line
For whatever reason, the FAA reauthorization bill that has just been introduced would no longer require airlines to advertise all-in fares. Rather airlines could start to advertise base fares that don’t include government taxes and fees. And somehow the bill is labeling this as a passenger experience improvement.
What do you make of this legislation?
I would sort of expect this to be announced as an enhancement of the law.
This is not good. Passengers compare the total price.
Pricing should be listed with all taxes and fees line item per item. This should be universally required on all receipts so buyers know all of the things they are paying for
Every ticket I've bought, regardless of airline or originating country or purchase method, came with that already. That you are calling for something that already exists reinforces my suspicion that most people can't be bothered to look at it.
I do look at it, and at least on the routes I most commonly fly, taxes and government imposed fees are generally 40% of the total price I pay, and I've seen greater than that.
You are also calling for something that reinforces my suspicion that most people who look at it have no idea what they are looking at.
Calling it generally 40% means you have no clue of what you are charged. They could pad in a 'George Santos facility service fee' and 'Ponzi departure tax' charges and you couldn't tell the difference.
This is just resort pricing for airlines with the veneer of being able to blame the government. If airlines wanted to show taxes, they could easily code their websites to show something like "airfare is $150, $120 base + $30 taxes" in nanoseconds.
Because the US is perhaps the only country where nickel and diming is basically a way of life.
And radiate the cancer called tipping.
I generally oppose excessive regulation in marketplaces. However, I tend to be very supportive of transparency, so that consumers can make informed decisions. This is beneficial to a well operating an efficient market place.
The biggest benefit I can conceive of this potential change is to highlight the amount of tax collected by governments. If you advertise and all in price, a lot of people will never look at the line items other than things...
I generally oppose excessive regulation in marketplaces. However, I tend to be very supportive of transparency, so that consumers can make informed decisions. This is beneficial to a well operating an efficient market place.
The biggest benefit I can conceive of this potential change is to highlight the amount of tax collected by governments. If you advertise and all in price, a lot of people will never look at the line items other than things like seat, reservation and baggage fees. They may never realize just how much tax they’re paying. I am also a big proponent of being very upfront and clear about the amount of taxes we have to pay because I think eventually that will cause people to rethink whether we support the various things that drive these taxes, and the level at which these taxes are set.
Highlight the amount of tax collected by governments?
Tax is like the biggest black box of them all. No one even the IRS knows what's right or wrong.
What's worse is you don't even know where your tax money actually goes.
Does the taxes and fees on your airfare directly buy weapons for Ukraine, help farmers (voters) in Iowa, or actually used to hire more ATC during current shortage.
If Warren Buffet is...
Highlight the amount of tax collected by governments?
Tax is like the biggest black box of them all. No one even the IRS knows what's right or wrong.
What's worse is you don't even know where your tax money actually goes.
Does the taxes and fees on your airfare directly buy weapons for Ukraine, help farmers (voters) in Iowa, or actually used to hire more ATC during current shortage.
If Warren Buffet is still paying less than 1% of his income on tax, the whole system is rigged and broken.
If it’s in the bill they’ve already written the code for it.
100% wrong.
This language will never be in the final bill. Ben, and of the commenters, have no idea how the legislative process works. This language will never become law.
“And *most* of the commenters”…
Not only are you revealing that you don't know how the legislative process works, you are also revealing that you don't know how enterprise scale software projects work.
Southwest is the one that is probably the biggest proponent of this legislation. Before it was put in, Southwest would not show how much the total ticket price was until you were almost done with the booking process, so you could not effectively know if the final price was better than the competition.
It is one of my biggest pet peeves with the Budget/Avis websites. They are the only rental car outfit I know...
Southwest is the one that is probably the biggest proponent of this legislation. Before it was put in, Southwest would not show how much the total ticket price was until you were almost done with the booking process, so you could not effectively know if the final price was better than the competition.
It is one of my biggest pet peeves with the Budget/Avis websites. They are the only rental car outfit I know of that does not show the total price of the rental with the list of cars. Instead, you have to pick a car then you see what the final price is, which can be a big difference in cities that have poured on the tourist taxes to pay for glorious new things like baseball and football stadiums that rapidly add up.
Airline lobbyists. That's why this in there and why it's buried in the hope nobody notices.
Write your Senator. Write your Congressman. Tell them you don't like it, you doubt most of their constituents will either and voting for it would make for a great attack ad when they are up for re-election.
Wrong. This language is in the proposed bill simply as a tactic. Lobbyists had nothing to do with it.
That’s how US legislation define what is “passenger experience improvements”. You know it’s a improvement (lol), and you shouldn’t complain about it!
This is a terrible idea cloaked as transparency.
The United States way of adding taxes after the fact is asinine period.
You don't really need the words in the middle of your sentence - "of adding taxes after the fact"
Oh look another braindead lefty.
All in pricing needs to be the standard across all industries.
Game theory would suggest that if this goes through, it would become the new equilibrium. Airlines would realize that the faster they moved to advertising the non all-in fare, the greater their advantage would be. All it takes is for one airline to begin the process. Once that airline does so, it immediately puts all other airlines competing with them at a disadvantage unless they also followed in their tracks. Soon enough, nobody would be...
Game theory would suggest that if this goes through, it would become the new equilibrium. Airlines would realize that the faster they moved to advertising the non all-in fare, the greater their advantage would be. All it takes is for one airline to begin the process. Once that airline does so, it immediately puts all other airlines competing with them at a disadvantage unless they also followed in their tracks. Soon enough, nobody would be showing the all-in fare, since it puts them at a disadvantage. The equilibrium will have changed.
It’s because “We the people” has been replaced with “We the wealthy individuals and corporations.” The US government no longer serves the people.
And unfortunately, in the post "Citizens United v. FEC" era, they have absolutely no reason/incentive to.
Only thing that can course-correct it is a constitutional amendment banning the bribery known as "campaign donations," but good luck getting that, when you'd need 2/3rds of the people being bribed to agree to outlaw it, before it ever even got to the states.
The USA is inevitably on a slow decline into anarcho-capitalism, prior to collapse, as a...
And unfortunately, in the post "Citizens United v. FEC" era, they have absolutely no reason/incentive to.
Only thing that can course-correct it is a constitutional amendment banning the bribery known as "campaign donations," but good luck getting that, when you'd need 2/3rds of the people being bribed to agree to outlaw it, before it ever even got to the states.
The USA is inevitably on a slow decline into anarcho-capitalism, prior to collapse, as a result. The only question is "when." :(
Banning campaign donations, makes all of us less free. If I want to support a campaign or a publicity effort for an issue, I should be able to spend my money however, I see fit to promote that issue or that campaign. I can see some argument for limitations on the amount of donations, directly to a candidate, but other than that other restrictions are a restriction on free expression.
Banning campaign donations, makes all of us less free.
Horseshit.
Nothing in your little pocket even registers, in the days where corporations, billionaires, and now even foreign entities via SuperPACs, can write 9-digit cheques on a whim, and completely legally.
The rationale is hopefully government tax transparency. :-)
I also hope that is the motivation. I think it is just as important to be transparent about the amount of tax that is forced upon us by governments as the amount that we are paying for a good or service in the marketplace.
The day after they are allowed to do so they will be listing the cheapest price possible so that they appear at the top of searches.
But then its only the same as the stupid situation where everything in US stores isnt priced at the same amount as the price you have to pay.
Knowing how much sales tax applies to a purchase is not a difficult step for the vast majority of consumers to make. I find it far worse to embed those taxes in a final price, and therefore largely making the amount of tax, we are paying opaque to the average consumer. I much prefer the amount of taxes taken from us to be upfront and in our faces. to hide it makes us less sensitive...
Knowing how much sales tax applies to a purchase is not a difficult step for the vast majority of consumers to make. I find it far worse to embed those taxes in a final price, and therefore largely making the amount of tax, we are paying opaque to the average consumer. I much prefer the amount of taxes taken from us to be upfront and in our faces. to hide it makes us less sensitive to tax and being less sensitive to tax empowers larger government, which is a negative to personal and economic liberty
So you'd rather government bury how much they are adding to the cost of your ticket? Personally, I think both fare (including surcharges) and taxes/government fees should be transparently displayed. Considering the latter often makes up more than 30% or more of your total cost, shouldn't we know where why our tickets cost what they cost...before some idiots demand price controls that will make everything much worse?
Nothing is stopping airlines from showing the tax breakdown - iirc spirit does this prominently
How would this be affected by legislation in other countries? On transatlantic flights there would be EU regulations that need to be observed so it might be too much hassle to change pricing just for the US. Let's hope so anyway.
The changed rules would apply to their advertised prices in the US (including on their US websites) and EU or other territories' consumer law would apply if they advertise in those territories. So if an airline has a website in an EU country (or Australia, as some do) the laws in that country would apply. They do enough things differently in different countries, such as pricing in the local currency, that including tax in the...
The changed rules would apply to their advertised prices in the US (including on their US websites) and EU or other territories' consumer law would apply if they advertise in those territories. So if an airline has a website in an EU country (or Australia, as some do) the laws in that country would apply. They do enough things differently in different countries, such as pricing in the local currency, that including tax in the price or not on different versions of their website wouldn't worry them.
To illustrate, I tried to book a domestic trip in the US on AA's US site and when I got to the 'pay' page and entered my credit card address (in Australia) it redirected me to their AU site and billed me in AUD. That seems a more complex difference than whether to include tax in the quoted price (which they must do in AU).
LOL, this is just like the 2nd amendment.
Is it government-imposed [taxes and fees] or [government-imposed taxes] and [fees]
So depending on who you ask, fuel surcharge have or doesn't have to be shown.
Welcome to Jurassic Politics.
This is kind of confusing. If all the BS fees are now included as the airfare and it is only government taxes/fees that aren't what's the problem? It seems kind of a pointless change.
Proposal seems to be: "It shall not be an unfair or deceptive practice under subsection (a) to engage in this deceptive practice."
Hmm, just replace it with "if any specific price is advertised it must be possible for a customer to purchase the service and receive a complete service at that price without any additional payment."
Is Marriott entering the airline industry? :-)
United Airlines has already changed the ‘banner’ prices in their app to prices without taxes and fees. The ‘banner’ I’m referring to is where it shows the cheapest price for the date selected and also the cheapest prices for each of the +/- 3 days.
I am an attorney, advocate, and travel addict. I'd encourage us to always think of priority and importance. This minor change in its worst form is likely serving as a decoy. For those of us who are advocates focusing on THIS minor issue we lose sight of those far more serious.
The Obama term change for inclusive pricing was intended to remove surprise or incomplete fares. Whether the industry includes taxes or not still...
I am an attorney, advocate, and travel addict. I'd encourage us to always think of priority and importance. This minor change in its worst form is likely serving as a decoy. For those of us who are advocates focusing on THIS minor issue we lose sight of those far more serious.
The Obama term change for inclusive pricing was intended to remove surprise or incomplete fares. Whether the industry includes taxes or not still leaves a level playing field for how airfares are shown. Not many industries must display taxes within an advertised price anyway and taxes, unlike surcharges, are uniform based often on purchase price. I could agree and argue that taxes are not fully uniform as some tickets include surcharges that may be taxed differently than the base fare. Or how about that damn Heathrow tax!
Still, our time is better spent at what the bill likely fails to include, like fuel surcharges and other fees as a whole. I personally find the BA imposition of a fuel surcharge on award tickets to be ethically criminal. These more important issues could loop in the above observations but all too often I see an issue like this serving as a deeply emotional distraction, as I see many other issues in our current political climate. If successful all we get is what we had before.... and the remaining hundreds of pages go ahead with no dialog.
We can track more than one item.
This change doesn’t need to be ignored to pay attention to other parts of the bill.
Do you work for Delta?
is this an oversight, or what’s the motive for this change?
Politicians don't do anything unless there's money involved, and the USA has legalized-bribery (also known as "campaign donations").
Take a look at whatever politicians are proposing this, and the chances that they won't be from Georgia, Texas, Illinois, New York, and Florida are almost nil.
The bill has bipartisan support silly. Let’s hope that all of you move to those states.
The bill has bipartisan support
Exactly what do you believe that has to do with what I just said? Partisanship was not mentioned nor implied.
I think it helps the consumer understand the amount of taxes and fee imposed on air travel. Can you imagine if the airlines weren't required to collect taxes and fees and consumers would pay the government directly? How about a kiosk or booth at the airport? People would feel differently about taxes!
Oddly enough, I've seen that run as a real-world experiment. Honduras used to have a booth where every passenger had to pay a tax before being allowed to proceed to the departures area. No one liked this, and eventually the law was changed so that tax was included in the airfare. People applauded ("hooray, no more tax!"), politicians did their end zone dance, and then quietly raised the tax given that no one was paying attention to it any more.
Some airline lobby group purchased a few politicians for them to insert this provision in the bill hoping that it would fly under the radar.