Regulations would force disclosure of airline service fees
WASHINGTON — Passengers love the idea, but airlines hate it. The government wants to require that travelers be told upfront about basic services that aren't included in the price of a ticket and how much extra they'll cost.
The Transportation Department proposed Wednesday that passengers be provided detailed information on fees for a first checked bag, a second checked bag, advance seat assignments and carry-on bags.
The rules would apply whether passengers bought tickets on the phone, in person or online — and not just from airline websites. Airlines that want their tickets to remain available through travel agents and online ticketing services would have to provide them information on fees for basic services, too, something most have been reluctant to do.
The idea is to prevent consumers from being lured by low advertised airfares, only to be surprised later by high fees for services once considered part of the ticket price.
Airlines currently are required to disclose only bag fees, and even then they don't have to provide an exact price. Some provide a wide range of possible fees in complex charts.
"A customer can buy a ticket for $200 and find themselves with a hidden $100 baggage fee, and they might have turned down a $250 ticket with no baggage fee but the customer was never able to make that choice," Transportation Secretary Anthony Foxx said in an interview.
But adopting the changes would be the wrong choice, said a trade association for the airline industry. The "proposal overreaches and limits how free markets work," Airlines for America said in a statement. And it predicted "negative consequences."
Under the proposal, fees would have to be specific to the advertised airfare. Any frequent-flier privileges would also have to be factored into the price if the airfare is advertised on an airline website and the passenger supplies identifying information. The proposal would prohibit "unfair and deceptive" practices by airfare search tools, such as ranking flights by some airlines ahead of others without disclosing that bias to consumers.
The rule doesn't cover fees for early boarding, curbside check-in and other services regarded as optional.
The government also wants to expand its definition of a "ticket agent" so that consumer protection rules also apply to online flight search tools like Kayak and Google's Flight Search, even though they don't actually sell tickets.
Many consumers are unable to determine the true cost of a ticket because fees are often hard to find or decipher, the government says.
"The more you arm the consumer with information, the better the consumer's position to make choices," said Foxx.
The public has 90 days to comment on the proposal. Foxx said he hopes the rule will become final within the next year.
The proposal is the latest of several clashes between the Obama administration and airlines over passenger rights. For instance, the industry is backing a bill recently passed by a House committee that would effectively nullify a rule adopted in 2011 that requires airlines to include taxes and government fees in advertised airfares so that consumers can see the full price of a ticket.
The new government effort is partly a response to changes in industry business strategy since 2008, when carriers started unbundling their services, beginning with checked bags.
More recently, some airlines have begun offering consumers not only a stripped-down "base" airfare, but also a choice of several packages with some of the once-free services added back into the cost of a ticket but at higher prices. With packages and a la carte fees multiplying, comparison shopping for airfares is becoming more difficult, consumer advocates say.
Charlie Leocha, who lobbies for passenger rights on behalf of the Consumer Travel Alliance, welcomed the proposal for changes. "We are getting most of what consumers have been requesting for more than five years," he said.
But the airlines trade group protested: "The government does not prescriptively tell other industries — hotels, computer makers, rental car companies — how they should sell their products, and we believe consumers are best served when the companies they do business with are able to tailor products and services to their customers,"
The Transportation Department also proposes expanding the pool of airlines required to report performance measures such as late flights, lost bags and passengers bounced from flights due to overbooking. Currently, only airlines that account for at least 1 percent of the market must report those measures, which the department posts online in its Air Travel Consumer Report. The proposed regulations would include carriers that account for little as 0.5 percent of the market. That would bring in discount carriers like Spirit and Allegiant airlines and many regional air carriers.
Major carriers would also have to include the performance of their regional airline partners when reporting their own. That means the on-time and lost bag records for major carriers may take a nose dive, since regional carriers tend to perform more poorly in those areas.
The proposed rules are the Obama administration's third wave for airline passengers. The effort began with a ban on tarmac strandings in which passengers can be cooped up in planes for hours, sometimes in miserable conditions. Facing the prospect of fines of as much as $27,500 per passenger, airlines have nearly eliminated such incidents by canceling flights in advance of severe weather.
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