BY JOAN LOWY
The Associated Press
WASHINGTON — Going to bat for confused passengers, the government is proposing that airlines be required to disclose fees for basic items like checked bags, assigned seats and carry-on bags so consumers know the true cost of flying.
Under new regulations proposed Wednesday by the Transportation Department, detailed fee information — including for a first and second checked bag — would have to be provided wherever passengers buy tickets, whether online, on the phone or in person. Any frequent-flier privileges would also be factored into the price.
Airlines are only required to disclose bag fees, and even then they don’t have to provide an exact price. Some airlines provide a range of possible fees in sometimes complex charts.
The rule would also require airlines to share fee information with travel agents and online ticketing services, which account for about 60 percent of ticket sales. Fee information is now usually available only through airlines.
The rule doesn’t cover fees for early boarding, curbside check-in and other services.
The government also wants to expand its definition of a “ticket agent” so that consumer regulations like the fee-disclosure requirement apply to online flight search tools like Kayak.com 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.
“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.
“The more you arm the consumer with information, the better the consumer’s position to make choices,” Foxx said.
The public has 90 days to comment on the proposal. Foxx said he hopes the rule will become final within the next year.
The effort is partly a response to changes in airline industry business strategy since 2008, when carriers started taking services out of the price of tickets, 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.
The department also proposes expanding the pool of airlines required to report performance measures like 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 performance 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 carrier Spirit Airlines and many regional air carriers.
Charlie Leocha, who lobbies for passenger rights on behalf of the Consumer Travel Alliance, welcomed the proposal. “We are getting most of what consumers have been requesting for more than five years,” he said.
The proposal also would:
- Require large travel agencies to adopt “minimum customer service standards,” such as responding promptly to customer complaints and providing an option to hold a reservation at the quoted fare without payment for 24 hours if made more than a week ahead of the flight.
- Require airlines and ticket agents to disclose whether the ticket being sold is for a flight operated by another carrier under a partnership arrangement. For example, United Airlines sells tickets for flights operated as “United Express” by several regional airlines. But the planes and crews belong to the regional carrier.
- 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 proposed rules are the Obama administration’s third wave of consumer protections for airline passengers. The effort began with a ban on so-called tarmac strandings in which passengers were 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.
Other previously adopted regulations include tougher requirements for compensating passengers denied boarding because of overbooking and a requirement that airlines, travel agents and online ticketing sites display full airfares, including taxes and government fees, more prominently than base airfares. Previously, airlines often advertised base airfares and buried mention of taxes and government fees — typically about 20 percent of the ticket price — in fine print.
The airline industry has clashed with the administration over some of the regulations, especially the requirement that taxes and fees be included in advertised fares. Several airlines sued in federal court to overturn the rule, but the court sided with the government, and the Supreme Court refused to hear their appeal.
Airlines have taken their case to Congress, where a House committee recently approved a bill that would effectively nullify the rule and allow airlines to return to displaying base fares and adding in taxes and fees later.
Your guide to navigating confusing airline fees
AP Airlines Writer
The Department of Transportation on Wednesday proposed a new set of rules aimed at protecting airline passengers by requiring more disclosure of airline fees. Here are some common questions regarding the plethora of fees that fliers face today:
Q: When was the first checked bag fee?
A: American Airlines in May 2008 became the first major U.S. carrier to charge a fee for checking a suitcase. (Discount airlines like Allegiant and Spirit already had such a fee.) The other large airlines quickly followed.
Q: Why did they do it?
A: In 2004, U.S. airlines were paying an average of $1.15 a gallon for jet fuel. By May of 2008, the cost had nearly tripled to $3.23 a gallon. Airlines that year burned through nearly 18 billion gallons of fuel. Passengers make decisions whether to fly based on price, and the bag fees were a way for airlines to collect more money without jacking up ticket prices and scaring away customers.
Q: How much money does that bring in for the airlines?
A: The typical bag fee is $25 for the first checked suitcase, $35 for the second. That added up to $3.4 billion last year. Airlines collected another $2.8 billion from flight change fees, typically $200.
Q: Are there other fees?
A: Yes, too many to easily count. Most airlines offer early boarding, priority security screening and extra legroom for a fee. Some airlines charge for any advance seat assignment. Others charge to place a bag in the overhead bin. Some charge extra for water or soda.
Q: Don’t consumers know about these fees prior to booking?
A: Most fliers now know that airlines charge some type of fee for checking luggage. The other fees are often a surprise. Airlines are required to post charts with all their fees on their websites, but they can often be hard to find, and confusing. For instance, United Airlines charges $9 to $299 for extra legroom, the price fluctuating depending on length of the trip and demand for that flight. Passengers booking tickets through Expedia or Orbitz, or searching on sites like Kayak aren’t given the same details.
Q: How would this latest proposed rule change that?
A: The third-party sites and airfare search aggregators would, for the first time, have to disclose the fees. Additionally, airlines would have to calculate fees for a passenger’s specific flight, factoring in any elite status.
Q: What about taxes and government fees?
A: Two years ago, the DOT required airlines to include taxes and related government fees in the price shown for flights, including all advertisements. Previously, airlines would only display the base fare, often giving passengers sticker shock when they booked. The airlines are now going to Congress to try and reverse that rule saying it’s not fair. Department stores, they argue, don’t have to include sales tax in the advertised price of a pair of jeans. The bill even has its own Orwellian doublespeak name: the Transparent Airfares Act.