AA Fares and FareCompare (Old Title: AA Just Posted Huge International Fare Sale)
Aug 7, 2007, 7:22 pm
#32
Join Date: Nov 2002
Posts: 1,236
My suggestion is if an airline abuses the fuel surcharges just add their highest surcharge to their fares and put them at the bottom of the list rater than te top. Keep up the good work. I hope consumer group and laws will work out these deceptions.
Aug 7, 2007, 7:54 pm
#33
FlyerTalk Evangelist
Join Date: Sep 2003
Location: MileagePlus Premier Gold
Posts: 11,522
All fine and well, but the DOT has ruled fuel surcharges as legal. The only requirement is that in advertising (FareCompare is NOT advertising), all fuel surcharges must be included in the advertised price. The only things that do not need to be included in the advertised price are government-imposed fees and taxes.
Aug 7, 2007, 8:18 pm
#34
Join Date: Apr 2005
Location: Mid-Atlantic
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Posts: 4,212
All fine and well, but the DOT has ruled fuel surcharges as legal. The only requirement is that in advertising (FareCompare is NOT advertising), all fuel surcharges must be included in the advertised price. The only things that do not need to be included in the advertised price are government-imposed fees and taxes.
Aug 7, 2007, 8:24 pm
#36
Suspended
Join Date: Jul 2001
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All fine and well, but the DOT has ruled fuel surcharges as legal. The only requirement is that in advertising (FareCompare is NOT advertising), all fuel surcharges must be included in the advertised price. The only things that do not need to be included in the advertised price are government-imposed fees and taxes.
1. that fares quote through various GDS without the inclusion of fuel surcharges; AND
2. that fuel surcharges are revenue for the airline (i.e., not a direct pass-through to the government authorities of the governmental organization whose air and ground facilities are actually being used on the fare-relevant flights); AND
3. that the airlines have a material incentive to load low fares with high fuel surcharges rather than high fares with no surcharges even when both total revenue amounts are equal (i.e., ultimately constitute the same amount of revenue in the airline's publicly disseminated financial statements); AND
4. that a growing number of retail customers see (and are attracted to) fares loaded into the GDS without the fuel surcharge being disclosed at the time of initial search/display/sort/shopping,
I'd say that the airlines are advertising in a manner that is not fair to the consumers of fares sold via the various GDS.
Of course the airlines and their lobbyists won't accept that claim of mine; and of course the regulators are more likely to listen to those with concentrated interests at stake rather than to diffuse interests. Still, that's the way I see it.*
Collusion on fuel surcharges -- particularly when it affects large cargo consumers -- may grab the headlines but deceptive advertising by way of this quoting low fares to individual retail customers and then charging high fuel surcharges ought to get headlines too.
Cargo-related fuel surcharge collusion and other deceptive practices affecting cargo consumers get nailed because there are more concentrated interests there than there are when it comes to retail passenger fares. That said, I'm not worried -- sooner or later this fuel surcharge gimmick the airlines are playing on the flying public will get nailed too and come to an end.
------------
* Perhaps one or two of the above four "givens" can be demonstrated to be wrong but if so I'm curious how so.
Last edited by GUWonder; Aug 7, 2007 at 8:34 pm
Aug 7, 2007, 8:33 pm
#37
FlyerTalk Evangelist
Join Date: Sep 2003
Location: MileagePlus Premier Gold
Posts: 11,522
Given:
1. that fares quote through various GDS without the inclusion of fuel surcharges; AND
2. that fuel surcharges are revenue for the airline (i.e., not a direct pass-through to the government authorities of the governmental organization whose air and ground facilities are actually being used on the fare-relevant flights); AND
3. that the airlines have a material incentive to load low fares with high fuel surcharges rather than high fares with no surcharges even when both total revenue amounts are equal (i.e., ultimately constitute the same amount of revenue in the airline's publicly disseminated financial statements); AND
4. that a growing number of retail customers see (and are attracted to) fares loaded into the GDS without the fuel surcharge being disclosed at the time of initial search/display/sort/shopping,
I'd say that the airlines are advertising in a manner that is not fair to the consumers of fares sold via the various GDS.
Of course the airlines and their lobbyists won't accept that claim of mine; and of course the regulators are more likely to listen to those with concentrated interests at stake rather than to diffuse interests. Still, that's the way I see it.* Collusion on fuel surcharges may grab the headlines but deceptive advertising by way of this quoting low fares to customers but charging high fuel surcharges ought to get headlines too.
------------
* Perhaps one or two of the above four "givens" can be demonstrated to be wrong but if so I'm curious how so.
1. that fares quote through various GDS without the inclusion of fuel surcharges; AND
2. that fuel surcharges are revenue for the airline (i.e., not a direct pass-through to the government authorities of the governmental organization whose air and ground facilities are actually being used on the fare-relevant flights); AND
3. that the airlines have a material incentive to load low fares with high fuel surcharges rather than high fares with no surcharges even when both total revenue amounts are equal (i.e., ultimately constitute the same amount of revenue in the airline's publicly disseminated financial statements); AND
4. that a growing number of retail customers see (and are attracted to) fares loaded into the GDS without the fuel surcharge being disclosed at the time of initial search/display/sort/shopping,
I'd say that the airlines are advertising in a manner that is not fair to the consumers of fares sold via the various GDS.
Of course the airlines and their lobbyists won't accept that claim of mine; and of course the regulators are more likely to listen to those with concentrated interests at stake rather than to diffuse interests. Still, that's the way I see it.* Collusion on fuel surcharges may grab the headlines but deceptive advertising by way of this quoting low fares to customers but charging high fuel surcharges ought to get headlines too.
------------
* Perhaps one or two of the above four "givens" can be demonstrated to be wrong but if so I'm curious how so.
How would a travel agent even begin to tell a customer the total fare without selling the actual flights and coming up with a tax-inclusive total price? With the tax-inclusive total price, the base fare and fuel surcharges are included.
I think people are focused on the FareCompares of the world, and not actually ticket outlets that actually sell tickets.
I can tell you that online agencies like Orbitz show the base and total, with the base actually inclusive of fuel surcharges, and the total inclusive of taxes too.
As for advertising, the strict definition of advertising is any online of print/TV/radio media that is run by airlines. As far as I know, airlines conducting business in the U.S. include fuel surcharges by requirement of the law.
As an example, UA is now advertising ORD-AMS at $279 each way based on r/t purchase. This is a fuel-surcharge inclusive fare, because the GDS filed fare is $408 r/t (or $204 one way). The fuel surcharge is US$75 each way. The total of $204 and $75 is $279, which matches UA's advertising.
Aug 7, 2007, 9:09 pm
#38
Join Date: Sep 2004
Location: NW OH
Programs: DL PM/KM, AC *G, AS MVP-100K
Posts: 831
My only issue with your complaints is that fare quotes are rarely, if ever, based on the filed fare in GDS, as in a tariff display.
How would a travel agent even begin to tell a customer the total fare without selling the actual flights and coming up with a tax-inclusive total price? With the tax-inclusive total price, the base fare and fuel surcharges are included.
I think people are focused on the FareCompares of the world, and not actually ticket outlets that actually sell tickets.
I can tell you that online agencies like Orbitz show the base and total, with the base actually inclusive of fuel surcharges, and the total inclusive of taxes too.
As for advertising, the strict definition of advertising is any online of print/TV/radio media that is run by airlines. As far as I know, airlines conducting business in the U.S. include fuel surcharges by requirement of the law.
As an example, UA is now advertising ORD-AMS at $279 each way based on r/t purchase. This is a fuel-surcharge inclusive fare, because the GDS filed fare is $408 r/t (or $204 one way). The fuel surcharge is US$75 each way. The total of $204 and $75 is $279, which matches UA's advertising.
How would a travel agent even begin to tell a customer the total fare without selling the actual flights and coming up with a tax-inclusive total price? With the tax-inclusive total price, the base fare and fuel surcharges are included.
I think people are focused on the FareCompares of the world, and not actually ticket outlets that actually sell tickets.
I can tell you that online agencies like Orbitz show the base and total, with the base actually inclusive of fuel surcharges, and the total inclusive of taxes too.
As for advertising, the strict definition of advertising is any online of print/TV/radio media that is run by airlines. As far as I know, airlines conducting business in the U.S. include fuel surcharges by requirement of the law.
As an example, UA is now advertising ORD-AMS at $279 each way based on r/t purchase. This is a fuel-surcharge inclusive fare, because the GDS filed fare is $408 r/t (or $204 one way). The fuel surcharge is US$75 each way. The total of $204 and $75 is $279, which matches UA's advertising.
The "Did you know?" heading on that page contains some depressing news about CO, if true.
More than likely the trivia generator is just looking at the first leg, or something like that.In a way, this AA discrepancy on FC (base fare but no surcharge) is the opposite of the NW/KL deal to BUH (surcharge but no base fare). If only it were bookable!
Aug 7, 2007, 9:09 pm
#39
Join Date: Dec 2001
Location: Spencer Iowa USA
Programs: Long Live NWA Silver Elite,Delta Silver Medallion
Posts: 604
Isn't my memory..
Isn't my memory correct that both England and the US just fined BA $500m
for price fixing with Virgin last week - and that the basis of the action was that they colluded on "fuel surcharges"?
The consumer reacts to the low price point but then gets socked with fuel surcharges. It's like Sears selling the Side by Side for $499 and then charging $399 for the 5 year service plan - and you have no option to turn it down if you want the refrigerator @ $499.
In the long run, all this does is hurt the entire industry. People eventually catch on and get pissed off.
Michael
for price fixing with Virgin last week - and that the basis of the action was that they colluded on "fuel surcharges"?
The consumer reacts to the low price point but then gets socked with fuel surcharges. It's like Sears selling the Side by Side for $499 and then charging $399 for the 5 year service plan - and you have no option to turn it down if you want the refrigerator @ $499.
In the long run, all this does is hurt the entire industry. People eventually catch on and get pissed off.
Michael
Given:
1. that fares quote through various GDS without the inclusion of fuel surcharges; AND
2. that fuel surcharges are revenue for the airline (i.e., not a direct pass-through to the government authorities of the governmental organization whose air and ground facilities are actually being used on the fare-relevant flights); AND
3. that the airlines have a material incentive to load low fares with high fuel surcharges rather than high fares with no surcharges even when both total revenue amounts are equal (i.e., ultimately constitute the same amount of revenue in the airline's publicly disseminated financial statements); AND
4. that a growing number of retail customers see (and are attracted to) fares loaded into the GDS without the fuel surcharge being disclosed at the time of initial search/display/sort/shopping,
I'd say that the airlines are advertising in a manner that is not fair to the consumers of fares sold via the various GDS.
Of course the airlines and their lobbyists won't accept that claim of mine; and of course the regulators are more likely to listen to those with concentrated interests at stake rather than to diffuse interests. Still, that's the way I see it.*
Collusion on fuel surcharges -- particularly when it affects large cargo consumers -- may grab the headlines but deceptive advertising by way of this quoting low fares to individual retail customers and then charging high fuel surcharges ought to get headlines too.
Cargo-related fuel surcharge collusion and other deceptive practices affecting cargo consumers get nailed because there are more concentrated interests there than there are when it comes to retail passenger fares. That said, I'm not worried -- sooner or later this fuel surcharge gimmick the airlines are playing on the flying public will get nailed too and come to an end.
------------
* Perhaps one or two of the above four "givens" can be demonstrated to be wrong but if so I'm curious how so.
1. that fares quote through various GDS without the inclusion of fuel surcharges; AND
2. that fuel surcharges are revenue for the airline (i.e., not a direct pass-through to the government authorities of the governmental organization whose air and ground facilities are actually being used on the fare-relevant flights); AND
3. that the airlines have a material incentive to load low fares with high fuel surcharges rather than high fares with no surcharges even when both total revenue amounts are equal (i.e., ultimately constitute the same amount of revenue in the airline's publicly disseminated financial statements); AND
4. that a growing number of retail customers see (and are attracted to) fares loaded into the GDS without the fuel surcharge being disclosed at the time of initial search/display/sort/shopping,
I'd say that the airlines are advertising in a manner that is not fair to the consumers of fares sold via the various GDS.
Of course the airlines and their lobbyists won't accept that claim of mine; and of course the regulators are more likely to listen to those with concentrated interests at stake rather than to diffuse interests. Still, that's the way I see it.*
Collusion on fuel surcharges -- particularly when it affects large cargo consumers -- may grab the headlines but deceptive advertising by way of this quoting low fares to individual retail customers and then charging high fuel surcharges ought to get headlines too.
Cargo-related fuel surcharge collusion and other deceptive practices affecting cargo consumers get nailed because there are more concentrated interests there than there are when it comes to retail passenger fares. That said, I'm not worried -- sooner or later this fuel surcharge gimmick the airlines are playing on the flying public will get nailed too and come to an end.
------------
* Perhaps one or two of the above four "givens" can be demonstrated to be wrong but if so I'm curious how so.
Aug 7, 2007, 9:22 pm
#41
Suspended
Join Date: Jul 2001
Location: Watchlisted by the prejudiced, en route to purgatory
Programs: Just Say No to Fleecing and Blacklisting
Posts: 102,095
My only issue with your complaints is that fare quotes are rarely, if ever, based on the filed fare in GDS, as in a tariff display.
How would a travel agent even begin to tell a customer the total fare without selling the actual flights and coming up with a tax-inclusive total price? With the tax-inclusive total price, the base fare and fuel surcharges are included.
I think people are focused on the FareCompares of the world, and not actually ticket outlets that actually sell tickets.
I can tell you that online agencies like Orbitz show the base and total, with the base actually inclusive of fuel surcharges, and the total inclusive of taxes too.
As for advertising, the strict definition of advertising is any online of print/TV/radio media that is run by airlines. As far as I know, airlines conducting business in the U.S. include fuel surcharges by requirement of the law.
As an example, UA is now advertising ORD-AMS at $279 each way based on r/t purchase. This is a fuel-surcharge inclusive fare, because the GDS filed fare is $408 r/t (or $204 one way). The fuel surcharge is US$75 each way. The total of $204 and $75 is $279, which matches UA's advertising.
How would a travel agent even begin to tell a customer the total fare without selling the actual flights and coming up with a tax-inclusive total price? With the tax-inclusive total price, the base fare and fuel surcharges are included.
I think people are focused on the FareCompares of the world, and not actually ticket outlets that actually sell tickets.
I can tell you that online agencies like Orbitz show the base and total, with the base actually inclusive of fuel surcharges, and the total inclusive of taxes too.
As for advertising, the strict definition of advertising is any online of print/TV/radio media that is run by airlines. As far as I know, airlines conducting business in the U.S. include fuel surcharges by requirement of the law.
As an example, UA is now advertising ORD-AMS at $279 each way based on r/t purchase. This is a fuel-surcharge inclusive fare, because the GDS filed fare is $408 r/t (or $204 one way). The fuel surcharge is US$75 each way. The total of $204 and $75 is $279, which matches UA's advertising.
This is an issue that goes beyond farecompare. Customers of Travelocity/Zuji and a few other places go through this too. I'm just a bit suprised the airlines or the airline's tools (i.e., in the form of misdirected government regulators) haven't cracked down harder (again) on such customer-empowering faculties. (I'd oppose such a crackdown, FWIW.)
Also, using a bricks-and-mortar travel agent this still ends up being an issue -- particularly since they are often enough searching for the lowest available fares for an end-consumer whose travel dates are flexible. A number of those displays come up pre-fuel surcharges too. Generally taxes would be the same on the same routing when purchased in the same place, regardless of operating carrier. Fuel surcharges would not necessarily be the same. The fuel surcharge differences obscures the shopping accuracy of the initial fare in a way that would not be the case if fuel was charged in the manner it used to be before, that is as part of the fare.
You probably are aware of this already, but airline management has not been universally happy with the growth in pricing transparency that happened in recent years; and some airline management know that the fuel surcharges are a way to obscure the consumer's ability to know early on the actual price the airline (i.e., not government authorities) are charging and still attract eyeballs more quickly than competitors. That is, for example, a low fare + high fuel surcharge ticket of $200 all-in would grab business under the current arrangement from a carrier with a higher fare + lower fuel surcharge ticket of $180 all-in. If fuel surcharges were not allowed in the manner they are now allowed, then consumers would be better off than they are under the current circumstances that advantage carriers who do "lower fare but higher fuel surcharge" over carriers who do higher fares with lower/no fuel surcharge.
Fare+taxes (i.e., where fare covers the cost of fuel too) is distinct from fare+taxes+fuel charges. Previously there was just fare (inclusive of fuel charges)+taxes, so now the airlines' lately breaking out a fuel component charge comes across to a number of us as being just a gimmick -- particularly as the prior categorization/breakdown lead to initial displays being a more accurate reflection of what the airline's revenue from a ticket was.
Whether with airline management forethough or not, there's a material incentive for the airlines to remove/restrict pricing transparency. If this (lack of pricing transparency in this manner) is allowed to continue, I'd expect more airline surcharges to happen; after all, an "a la carte" approach to passenger tickets would really kill what remains of transparency in air travel pricing.
Aug 7, 2007, 11:26 pm
#42
Original Poster
Join Date: Mar 2006
Programs: AAdvatantage Platinum (using Platinum challenge and 2 MRs)
Posts: 534
Surcharges in General FYI
Surcharges can be added to a base fare in 2 ways.
There is a rule category (Category 12 to be exact) called Surcharges where an airline must file any surcharges for North American Travel and "MAY" file for international travel.
Previously the DOT required U.S. based airlines to file all fuel surcharges in rule category 12 (Surcharges). They relaxed this requirement for international airfares at the behest of the U.S. domestic airlines who complained that the foreign flag carriers filed there fuel surcharges directly with the GDS called (YQ/YR) charges (YQ Fuel) (YR Insurance).
Many of the U.S. based airlines removed there surcharges from rule category 12 and started filing it in YQ/YR.
The format for YQ/YR surcharges, for perfect application requires an Itinerary with all connection points. YQ/YR have a complex rule system that requires analysis of each segment of the trip to properly compute.
This makes it difficult (not impossible) to add the fuel surcharges on an airfare that might have dozens of different routings and therefore dozens of different surcharges.
This is not unlike computing international taxes for a an airfare. Taxes are not computed relative to the origin/destination. They are computed based on each leg of an itinerary and vary wildly depending on what country you transit through.
So the dilemma is the following on international surcharges:
1) Maximize each of the possible combinations and quote the base price + the maximum possible surcharge (usually the proper surcharge but not always). In this case there could be an over quote for those exception routings where the fuel surcharges are lower or not applicable.
2) Try to pick the most common routing on that airline and use that to compute the fuel surcharge.
3) Only ever quote base fare (apples to apples but does not reflect accurate total pricing before taxes).
What are working on now, is #2.
This requires tons of computing resource, licensing the OAG flight schedule feeds and processing the possible itineraries in real time after every international airfare feed (5 per day).
The algorithm is not trivial as well.
We are working on it and we will sort it out shortly.
Our goal is to compare apples to apples with all surcharges and also with estimated taxes as well. We believe this to be the only reasonable and fair way to quote items in a non-biased manner.
---
rosj
There is a rule category (Category 12 to be exact) called Surcharges where an airline must file any surcharges for North American Travel and "MAY" file for international travel.
Previously the DOT required U.S. based airlines to file all fuel surcharges in rule category 12 (Surcharges). They relaxed this requirement for international airfares at the behest of the U.S. domestic airlines who complained that the foreign flag carriers filed there fuel surcharges directly with the GDS called (YQ/YR) charges (YQ Fuel) (YR Insurance).
Many of the U.S. based airlines removed there surcharges from rule category 12 and started filing it in YQ/YR.
The format for YQ/YR surcharges, for perfect application requires an Itinerary with all connection points. YQ/YR have a complex rule system that requires analysis of each segment of the trip to properly compute.
This makes it difficult (not impossible) to add the fuel surcharges on an airfare that might have dozens of different routings and therefore dozens of different surcharges.
This is not unlike computing international taxes for a an airfare. Taxes are not computed relative to the origin/destination. They are computed based on each leg of an itinerary and vary wildly depending on what country you transit through.
So the dilemma is the following on international surcharges:
1) Maximize each of the possible combinations and quote the base price + the maximum possible surcharge (usually the proper surcharge but not always). In this case there could be an over quote for those exception routings where the fuel surcharges are lower or not applicable.
2) Try to pick the most common routing on that airline and use that to compute the fuel surcharge.
3) Only ever quote base fare (apples to apples but does not reflect accurate total pricing before taxes).
What are working on now, is #2.
This requires tons of computing resource, licensing the OAG flight schedule feeds and processing the possible itineraries in real time after every international airfare feed (5 per day).
The algorithm is not trivial as well.
We are working on it and we will sort it out shortly.
Our goal is to compare apples to apples with all surcharges and also with estimated taxes as well. We believe this to be the only reasonable and fair way to quote items in a non-biased manner.
---
rosj
Aug 7, 2007, 11:54 pm
#43
FlyerTalk Evangelist
Join Date: Dec 2002
Programs: UA Platinum MM; BA Gold; DL Silver; IHG Diamond Ambassador; Hilton Gold; Marriott Gold
Posts: 24,259
So the dilemma is the following on international surcharges:
1) Maximize each of the possible combinations and quote the base price + the maximum possible surcharge (usually the proper surcharge but not always). In this case there could be an over quote for those exception routings where the fuel surcharges are lower or not applicable.
2) Try to pick the most common routing on that airline and use that to compute the fuel surcharge.
3) Only ever quote base fare (apples to apples but does not reflect accurate total pricing before taxes).
What are working on now, is #2.
This requires tons of computing resource, licensing the OAG flight schedule feeds and processing the possible itineraries in real time after every international airfare feed (5 per day).
The algorithm is not trivial as well.
We are working on it and we will sort it out shortly.
Our goal is to compare apples to apples with all surcharges and also with estimated taxes as well. We believe this to be the only reasonable and fair way to quote items in a non-biased manner.
1) Maximize each of the possible combinations and quote the base price + the maximum possible surcharge (usually the proper surcharge but not always). In this case there could be an over quote for those exception routings where the fuel surcharges are lower or not applicable.
2) Try to pick the most common routing on that airline and use that to compute the fuel surcharge.
3) Only ever quote base fare (apples to apples but does not reflect accurate total pricing before taxes).
What are working on now, is #2.
This requires tons of computing resource, licensing the OAG flight schedule feeds and processing the possible itineraries in real time after every international airfare feed (5 per day).
The algorithm is not trivial as well.
We are working on it and we will sort it out shortly.
Our goal is to compare apples to apples with all surcharges and also with estimated taxes as well. We believe this to be the only reasonable and fair way to quote items in a non-biased manner.
Aug 8, 2007, 12:24 am
#45
Join Date: May 2006
Location: Boston
Programs: UA 1K, SPG
Posts: 1,577
I'm content with #3, but advanced user options where people could choose display option for themselves would be ideal down the line. As it is, this is a great tool that I'm very thankful for.
And maybe it's time to change the title of this thread and move it to the MR Discussion forum.
And maybe it's time to change the title of this thread and move it to the MR Discussion forum.