gooselee

It's the eagle eyed observations like that that make me love FT. ^

relangford

Conservatives want lower taxes, not hidden taxes. This is not a liberal-conservative political thing, it is from the airlines wanted to appear to offer lower fares.

Instead of this bill, how about one which requires, in large print, the part the airlines make (fare + fuel surcharges + whatever) and the part the government takes (taxes + TSA fees + CBP fees + airport fees + ....)?

SpartanTraveler

I will make sure to vote against any politician who supports this bill and encourage all my friends, family, and colleagues to do the same. This bill is nothing but a way for airlines to mislead customers. Any politician who supports this bill is a snake who doesn't deserve to remain in office and I will make sure everyone I know learns about it.

I will gather a list of all the politicians who support this bill and clearly show how they are voting against their constituents interests and opening the floodgates to fraudulent advertising. Then have people hand the list out at airports and posted throughout the terminals.

USHPNWDLUA

No, this isn't what I'm suggesting I want nor is it what I think the bill allows. I think you and others are suggesting that this bill would allow airlines to deceptively display a very low airfare by placing into another category all the other tacked-on fees, including both government- and airline-imposed fees.

But, this isn't what the bill would allow. The bill specifically states that the base airfare is defined as everything except government-imposed taxes and fees. Given this language, how could this be an issue? For me, this is all about transparency. Under this bill, consumers can actually see the portion of the ticket cost that is imposed by the government. Today, the airlines cannot display this in advertising, on ticketing websites, etc. I find the current system deceptive because the government has used the current system to hide all the fees they tack on.

javabytes

As long as all the airline-imposed fees are required to be included in the advertised price, I don't see what the big deal is. I couldn't care less if the government-imposed taxes aren't calculated until checkout. That's how every other purchase I make goes.

ajGoes

The question prospective customers ask when shopping for plane tickets is "how much is it going to cost?" The taxes are interesting but entirely secondary.

1353513636

I do see where you're coming from, for example, I have NEVER met anyone who doesn't live in China (and many who do) who knows that everything you buy has a 17.5% tax added to it. However, the easy thing to do which does NOT violate government regulations is just advertise fares like this.

Example:
Fare from San Diego to Cartagena
Fare = $0.50
Fuel = $225
Taxes & Fees = $200
Total Cost = $425.50

And on banner-type advertisements, just say "Fares to London start at $445 or $500 after taxes and fees."

This allows airlines to show customers how much they are charging without hiding government taxes, but still reveal the full amount the customer will have to pay. And it's legal to do right now!

I may be in the upper 50th percentile when it comes to intelligence, but I don't think anyone at the airlines couldn't come up with this. There must be some ulterior motive. My take is that defining base fare as everything besides government imposed taxes and fees is just the first step. At this point, that's the only way it's going to pass. Then, a couple years later, we'll hear that fuel is out of the airlines' control and therefore should be excluded in the advertised price. Or, they'll just do some tricks and hope not to be caught. For example, in the DOT advertisement pictured above, they included international-only surcharges on a domestic ticket. And, there's the Spirit-famous "Consequences of DOT Regulation Fee" for $2 that could go into the government taxes and fees, since it's a consequence of the DOT existing, etc. I could keep going but I think you guys get the point.

1kprem

My biggest concern with the language of the bill is its failure to mention surcharges namely the fuel surcharge and its relation to the base airfare. I would support this bill if it specifically said the base airfare must include the fuel cost. Is a surcharge a fare or a fee? All we know is it is not a tax and is the most hidden part of the fare if one looks at an atpco fare filing.

D582

My view on this, and it applies to everything not just airfare is that advertised prices should always be 'all-in' as in this is the amount you need to pay to walk out the door with the product/use the service.

However at the same time, any receipts or invoices should break out all taxes and fees so that one is aware of where the money they spent is actually going.

This is in my view is true transparency - telling the consumer up front what something is going to cost them and at the same time detailing where the money they spent is allocated between the company providing the product/service and any government agencies.

1353513636

My point exactly. If you dig around enough, you'll find that the whole point of the bill is to hide surcharges.

Jerseyguy

The airline should advertise their transaction with you only. Goverment Fees have nothing to do with the airlines they are fees that the goverment charges you.

Advertised fares should be what the airline is charging you (Fuel or other airline imposed charge included). The goverment fees are to do with your relationship with the goverment (goverment can include private airports for the sake of this arguement).

darthbimmer

I have plenty of transparency into the type and amounts of government fees and taxes imposed today. It's itemized right there in my receipt. Across multiple airlines I fly it's generally just obvious enough that I notice it at a glance every time I check my receipt for correctness.

What I want to know transparently as a prospective buyer, though, is what the total cost of my ticket is going to be. This is especially an issue with international destinations, where I have sometimes seen Carrier A advertise a fare of $200 plus $600 "taxes and fees" while Carrier B flies to the same destination for $600 base fare plus $200 taxes and fees. The only sensible meaning of transparency requires being able to tell instantly that these two products are equally priced.

Fanjet

I think the purpose of this bill is because of connections. Two airlines can offer a $300 airfare. But the one that offers the nonstop route will price out lower. And the one with a connection will price out around $22 more. And that is because of the taxes and fees involved with that connection. So when airfares are listed as all-inclusive, the airline with the nonstop is listed as being the cheapest (and first), even though both airlines would be keeping the same amount of money from the prospective passenger.

CaptainMiles

It could get worse. There are many government taxes and fees that airlines pay, that go beyond your typical PFCs, segment tax, 7.5% excise tax, security fees and custom/immigration fees. Examples:

- $0.044 federal excise tax per gallon of jet fuel
- Landing fees
- Airport facility fees (such as renting counter space, gates, etc.)
- Payroll taxes on all their employees paychecks
- Real estate taxes on their corporate headquarters
- Corporate income tax
- etc. etc.

Now obviously these are not per-passenger charges, but they are government taxes and fees nonetheless. And it can be easily argued that these taxes and fees are costs that impact the total cost of the service provided, and therefore can be apportioned to each passenger. And the airlines would do that, so they could show lower fares and more taxes and "apportioned tax recovery".

Too far fetched? Hardly. Car rental companies already do this, with "airport concession fee recovery" or "vehicle licensing cost recovery". These are not taxes, but an alleged pass-through of their cost of paying certain taxes and fees.

Can you imagine if the Gap did this? Shirt $1.99, "payroll taxes recovery" $2.50, "real estate taxes recovery" $1.60, "corporate income tax recovery" $8.25, sales tax $1.15, total $15.49.

I don't doubt the airlines would do this. Think RyanAir, in the days before the EU required "all in" fares.

SpartanTraveler

It sounds like you've never bought a plane ticket. All of this information is always provided. The difference is the main price they have to show you is the all-in cost, but there is always an itemized breakdown of all taxes and fees provided as well.

This bill is provides the opposite of transparency, it will make it virtually impossible to compare ticket prices since the prices they advertise and send through the booking sites will be almost meaningless.

Any politician that supports this bill better hope they don't need votes from anyone who flies.