Editorial: Editorial: Airlines’ bid to hide taxes flies low on transparency
Surveying airline ticket prices is only slightly easier than taking in the view from a 747 lavatory, and the industry likes it just fine that way.
Fares that exclude baggage fees or charges for advance seat assignments have become the norm for airlines, which have become solidly profitable after years of losses thanks to consolidation and the elimination of hundreds of flights that did not carry enough passengers to cover costs.
And revenues from baggage fees have nearly tripled since 2008, to more than $3.3 billion.
But as published ticket prices have increased, consumer resistance has stiffened, so the airlines have been lobbying Congress for changes in the law that would allow them to publish one price but charge another, principally by subtracting federal taxes, Transportation Security Administration charges and other add-ons not directly attributable to the airlines.
The deceptively titled Transparent Airfares Act of 2014 would void U.S. Department of Transportation rules implemented in 2009 and 2012 that require full fare disclosure. Instead, the airlines and ticket agents could strip out the taxes, etc., and advertise prices 20 percent lower than the consumer will actually pay.
What a sweet deal. Imagine seeing Washington service stations advertising $3-per-gallon gasoline but charging $3.56 to account for federal and state taxes.
The airlines say changing the law will provide an economic stimulus because more people will fly. As if stripping out gas taxes from prices on roadside signs would sell more gasoline when drivers reach the pump?
A countermeasure in the Senate, the Real Transparency in Airfares Act, would retain the existing rules, probably putting the kibosh on any change during this session of Congress.
But the Department of Transportation announced further reforms Wednesday that will expand on the earlier mandatory disclosure rules to apply them to smaller airlines sometimes guilty of the worst come-ons, add disclosure for checked baggage and bring online travel sites under the rules’ umbrella.
Sites like Kayak, for example, would also have to tell consumers whether particular airlines get preferential ranking when flights are listed.
DOT Secretary Anthony Foxx credited the 2009 and 2012 reforms for shorter delays on airport tarmacs, better information for passengers when flights are delayed and increased compensation when they are involuntarily bumped from their flights.
Congressional complaints that the taxes and fees embedded in airline ticket prices are not fully apparent to consumers are rich coming from a body that has assembled a tax code incomprehensible to the average taxpayer. And if the airlines are sincere in their complaints about the hidden portion of fares that taxes and fees represent, there is nothing to stop them from making them known in every advertisement, on every website and on every ticket – right alongside the baggage fees.