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Transparent Airfares Act Will Hurt Travel Consumers

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Transparency in airfare. That sounds like something everyone can get behind, right?

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But the Transparent Airfares Act of 2014 (H.R. 4156), currently pending in the House, has ignited a firestorm of controversy about the nature and benefits of pricing transparency.

There are, it turns out, two rather different conceptions of transparency in conflict here: transparency as understood by consumers of travel, which facilitates comparison shopping; and the kind of transparency advocated by the airlines, which obscures the true cost of travel throughout most of the buying process.

The first conception, encapsulated in the 2012 DOT Full Fare Advertising regulation that would be overturned by H.R. 4156, stipulates that airfare ads must prominently display the total price of a ticket, including all taxes and fees, up front. The taxes and fees may be listed separately, so long as the all-in price is the headliner.

That approach captures the common-sense understanding of transparency, and addresses the persistent practice of airlines' quoting low "net" fares and burying the associated taxes and fees in small-type notes at the bottom of the page. Importantly, it allows travel consumers to readily make apples-to-apples comparisons of ticket prices.

The competing notion of transparency focuses on the taxes and fees, at the expense of the total ticket price. In a nutshell, H.R. 4156 "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."

It's the airlines' way of highlighting the effect government fees have on the overall price of airfare. (According to Airlines for America, an industry trade group that is aggressively promoting H.R. 4156, federal taxes currently account for 20 percent of the total cost of a ticket.) And, not coincidentally, it will allow a return to the bad old days when airlines and other travel distributors only revealed the total ticket price after a consumer had all but completed the booking process. It borders on bait-and-switch.

It may well be that some of the government-imposed taxes and fees included in the total price of a ticket are unreasonable or inappropriate. But that's a separate issue, best dealt with by the airlines' extensive networks of lawyers and lobbyists and trade groups. Positioning H.R. 4156 as a pro-consumer piece of legislation is cynical and misleading. But that's nothing new. It is, in fact, exactly the sort of behavior the DOT's 2012 Full Fare Advertising rule was designed to forestall.

As the New York Times opined in a strongly-worded editorial (pointedly headlined "Making Airfares Less Transparent"), "The cynically named Transparent Airfares Act of 2014 can only hurt consumers... This push to mislead consumers is particularly galling since recent mergers, like that of American Airlines and US Airways, have made the industry less competitive. This bill will only hurt travelers."

If H.R. 4156 wins, it will be a win for the airlines at the expense of consumers.

Reader Reality Check

What kind of transparency best serves your interests as a travel consumer?

This article originally appeared on FrequentFlier.com.

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