Disclosure rules have airlines mad with good reason

disclosure rules

New airfare disclosure rules from the U.S. Department of Transportation went into effect this week requiring airlines to include all taxes and mandatory fees in the quoted airfare price. The new transparency should not affect the end price airfare, but lets consumers know up front what the total price will be. Travelers like it. Airlines don’t and say the rule discriminates against air travel over other travel options.

“For the consumer, this is obviously very good,” travel consultant Monika Dysart told the Salt Lake Tribune. “It’s full disclosure of the fare upfront, instead of letting you get to the airport thinking you got a good deal and then having another $100 or $200 [added],”

Spirit Airlines, home of the $9 fare (which really is not once other fees are added) isn’t happy with the new rule and has a big “Warning!” sign that pops up on the carrier’s website making that quite clear.

“We’re against these new regulations because we actually think it reduces transparency,” Spirit Airlines CEO Ben Baldanza told Time this week. “We think it makes it harder for consumers to understand what they’re paying for.”Spirit believes that with the total price on display up front, it looks like airlines are raising their prices which could drive away consumers, something a low-cost airline can not afford.

Spirit Airlines is not the only airline that objected to the new regulations. Southwest Airlines and Allegiant Air have also made legal appeals to have the new disclosure rule overturned saying the rule singles out airlines.

“Our main objection … is that there is no justification for treating air travel differently from just about everything else that consumers purchase, i.e. they pay for the price of goods and services and then pay tax. And that’s how everything is advertised, as the price of the item separately from the tax on that price,” Southwest spokeswoman Brandy King told CNN last month.

Before the new rule took effect this week, airlines could advertise the base fare of a ticket, adding in taxes and fees later in the shopping process, much like other travel options still do.

Cruise lines almost universally advertise “teaser” rates that represent the least expensive accommodations from a complex matrix of choices, difficult for consumers to sort out. Travel agents are commonly put in the position of explaining that the cruise fare a consumer wants is available on one particular sailing, on one ship, in accommodations they might not care for…and that taxes are not included in that price too.

Hotels commonly add other fees later in the buying process as well. Tour operators boast attractive low prices that are rarely the end price consumers pay.

Airlines surely have a point that they are indeed being singled out, but the new regulations have good intentions.

“Airline passengers have rights, and they should be able to expect fair and reasonable treatment when booking a trip and when they fly,” U.S. Transportation Secretary Ray LaHood told Outcomemag. “The new passenger protections taking effect this week are a continuation of our effort to help air travelers receive the respect they deserve.”

Image: Spirit Airlines


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