Transparent Airfares Act of 2014 - Declares that it shall not be an unfair or deceptive practice for an air carrier or other covered entity to state the base airfare in an advertisement or solicitation for passenger air transportation if it clearly and separately discloses: (1) the government-imposed taxes...
Transparent Airfares Act of 2014 - Declares that it shall not be an unfair or deceptive practice for an air carrier or other covered entity to state the base airfare in an advertisement or solicitation for passenger air transportation if it clearly and separately discloses: (1) the government-imposed taxes and fees for the air transportation, and (2) its total cost. Defines "base airfare" to mean the cost of passenger air transportation, excluding government-imposed taxes and fees. Defines "covered entity" as an air carrier, including an indirect air carrier, foreign carrier, ticket agent, or other person offering to sell tickets for passenger air transportation or a tour or tour component that must be purchased with air transportation.
U.S. Travel Association President and CEO, Roger Dow, voiced tepid support for H.R. 4156, the "Transparent Airfares Act of 2014," and urged lawmakers to incorporate further changes in the bill to provide air travelers with the full scope of the legislation's promise: a clear view of the costs built into ticket prices.
"The impetus for the bill is solid, but it could be more accurately called the 'Translucent Airfares Act' because it doesn't go far enough in providing the transparency in airfare pricing that consumers crave," Dow said. "It only gets halfway there by still allowing sites to obfuscate the full price of an airline ticket. If we're going to do this, let's do it right the first time, and finish the job.
"We appreciate that the House Transportation and Infrastructure Committee is working to improve the traveler experience, and we hope its members will make the necessary changes to ensure travelers have the most accurate and complete information possible.
H.R. 4156 purports to boost transparency by allowing increased disclosure of the taxes and fees built into ticket prices. But the bill would permit advertisers and other sellers of air transportation to hide the bottom-line cost of airfare in separate links or in pop-up windows, making it more difficult for consumers to quickly understand and easily compare "all-in" prices among carriers.
Dow argued Congress should make sure consumers have both.
"Don't just swap one kind of transparency for another," he said. "Let's take this opportunity to shine a full light on the costs associated with air travel."
Dow noted that much of the extra cost of travel funds essential services, such as security and facilities upgrades, that directly benefit the traveler. He argued it's only logical to let travelers know all of what they're paying for.
Dow also pointed out that other industry sectors—for example, car rental vendors—routinely build taxes and fees into their advertised costs.
Said Dow: "We in the travel community will fight for three basic principles in any changes to aviation fee structures. One, transparency, so consumers can clearly see all of what they're paying for. Two, value, so consumers are assured that the dollars they spend are coming back to them in the form of services and amenities. Three, efficiency, so that the travel experience is free of hassles at every stage, from when a traveler purchases their ticket online to when they step out to the curb at their destination.
"H.R. 4156 needs some work before it successfully captures all of those criteria.”
April 10, 2014
Dear Chairman Shuster and Representative Graves:
On behalf of the 362,000 members of National Taxpayers Union (NTU), I write to endorse H.R. 4156, the “Transparent Airfares Act of 2014.” This legislation would repeal a 2012 Department of Transportation ruling that requires airlines to aggregate federal taxes and fees in the total advertised airfare price and in doing so, masks the growing financial burden Washington imposes on air travel.
With a few exceptions, consumer goods are typically advertised at a base price with taxes and fees added at the point of purchase. Forcing an industry to deviate from this norm has less to do with any perception of “fairness” and more to do with hiding the true cost of overly burdensome taxes. Indeed, if consumers understood the true scale of additional government-imposed expenses that comes on top of base airfares, they would be appalled.
Air travelers can be subject to 17 different federal taxes and fees including a passenger ticket tax, a flight segment tax, fuel taxes, and many others. On an average domestic flight, some of these taxes can comprise up to 20 percent of the total price. And it’s about to get worse – in July the TSA security tax will double thanks to a provision in the Ryan-Murray budget deal. Although some have claimed this is a fee and not a tax, the underlying problem is clear: airlines should not be forced to conceal these added costs from consumers. When taxes and fees are hidden to avoid scrutiny from those footing the bill, it is easy for elected officials to treat those revenues as a “slush fund” rather than dedicating the revenue to its stated purpose.
Unfortunately, these types of cash grabs come at real cost to both consumers and the afflicted industry. In the case of airlines, heavier overhead imposed by government can dampen demand and undermine economic growth in an industry already plagued by increased fuel and labor costs as well as regulatory issues. Washington’s insatiable demand for tax dollars shouldn’t exacerbate airlines’ woes.
Americans have the right to know just how much of their airfare is going straight to the Treasury. Transparency is the key to increasing consumer awareness and reining in excessive costs. NTU is pleased to endorse the “Transparent Airfares Act of 2014” and urges all Representatives to cosponsor this legislation.
Alexandria, VA, April 24, 2014 – "As Congress and federal regulators examine legislation and policies impacting the travel and tourism marketplace, it's imperative that any new laws or regulations protect consumer choice and promote transparency," said Travel Tech President Steve Shur. "The traveling public deserves to have access to the transparent, all-in cost of airfare, including all taxes and fees, so they can make true comparisons and educated decisions regarding their travel choices. Travel Tech is concerned that the Transparent Airfares Act could harm consumers by reducing, rather than promoting, all-in price transparency.”
The American Society of Travel Agents (ASTA) has launched a grassroots campaign to fight anti-consumer legislation—The Transparent Airfares Act of 2014 (H.R.4156)—making its way through Congress under the guise that it will make airfares more transparent.
“We need for anyone concerned about anti-consumer practices to tell their member of Congress that this so-called Transparent Airfare Act doesn’t fly,” said ASTA President and CEO Zane Kerby. “This bill would allow airlines to deceive travelers about the actual cost of a flight, a fight they already lost in 2012 when the Department of Transportation put rules in place to prevent precisely this situation,” said Kerby. “The airlines challenged the rule in court and lost, then tried the United States Supreme Court, which refused to hear the case. Congress should stay its hand here. There is no evidence of consumer harm under the DOT rule, only benefits for the traveling public,” said Kerby.
Under the U.S. Department of Transportation’s (DOT) full-fare advertising rule, in effect since January 2012, advertised airfares must prominently state the full and final price to be paid by the consumer, including all government-imposed taxes and fees. Charges included within the total price—including taxes and fees—can be listed separately, as long as the total price is displayed more prominently than the individual components. Airlines are free to add anti-tax commentary in their advertising if they wish, so long as, again, the full and final price is most prominent. Airlines’ claims that the DOT rule prevents them from clearly disclosing the tax burden on air travel are simply not true.
The bill (H.R.4156), which was reported out of committee in the House without debate on April 9, could be acted on as early as next week. Meanwhile, airlines continue to shop for a companion bill sponsor in the Senate.
ASTA recently expressed its serious concerns with this legislation to relevant members in the House, and of any bill possibly being drafted in the Senate. But time is running out. The association is now asking members to write their Members of Congress to oppose the bill, and to request their coworkers and other colleagues to get involved. “We cannot stand by while anti-consumer legislation is allowed to sail through Congress and unravel protections put in place by the DOT with no input from the traveling public,” said Kerby.
There is no need for this bill.
DOT rules allow full publication of all taxes and fees. The airlines simply choose not to do so. Plus, the bill will enshrine into law drip pricing, a form of bait-and-switch advertising that has long been considered anti-consumer by the FTC and DOT.