BTC: Airline legislation is poster child for why voters are so angry with Washington
Business Travel Coalition (BTC) today expressed deep concern over anti-consumer Section 505 of the US House Transportation Committee version of the Federal Aviation Administration reauthorization bill – the 21st Century Aviation Innovation, Reform, and Reauthorization Act (H.R. 2997).
The proposed legislation, originally drafted by airlines three years ago, concerns a 2012 U.S. Department of Transportation (DOT) rule that requires airlines to prominently display total ticket prices in advertising and in Internet displays, including government taxes and fees. In reversing that DOT rule a critically important consumer protection would be undermined that was adopted as a cure to airline bait-and-switch advertising.
To curry favor with deep-pocketed airlines, the House Transportation Committee, for the third time, has gifted the airlines with this proposed legislation due to airlines’ objections to the DOT rule after failing in suing DOT in federal district court. Once again Members of the U.S. Congress have given voters reason to be angered by a Washington elite whom they believe are not looking out for their interests.
Under the 2012 DOT rule, airlines must prominently present in advertisements the total ticket price, which is what consumers care about. However, airlines are also permitted to display breakouts of government taxes and fees so long as they are less prominently displayed than the total ticket prices. Additionally, there is no DOT requirement preventing airlines from also including in an advertisement base ticket prices (net of government taxes and fees), if they are likewise displayed less prominently than total ticket prices. Accordingly, airlines are free today to provide consumers with a detailed breakdown of total ticket prices. DOT’s obvious mission in adopting this rule was to prevent consumer confusion and deception about the full amount to be paid.
Section 505 would undermine DOT consumer protections by resurrecting a misleading and deceptive advertising practice that consumers have only recently been protected from. If accepted in its present form, the language would allow lower base ticket prices to be highlighted first and foremost, thus diminishing transparency by permitting total ticket prices and government taxes and fees to be disclosed merely in a manner that “clearly presents the information to the consumer.”
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The most pernicious consumer consequences of this amendment, however, are with regard to its Internet advertising and solicitation provisions. Airlines would be free to conspicuously display “come-on” lower base ticket prices on initial screens and then dribble out information about the real, higher total ticket prices, including government taxes and fees, on other parts of their websites through a “link or pop up…that displays the information in a manner that is easily ‘accessible and viewable’ by the consumer.” This represents an open invitation for a return to unfair and deceptive marketing practices that were widespread before DOT took action in 2012 to protect consumers. It is an advertising trick often called “drip pricing.” (See online comparison chart at http://btcnews.co/2sTRoPG.)
Consumers would loudly cry foul about this ill-conceived legislation. They do not object to airlines also disclosing government taxes and fees (which by the way enable essential airline infrastructure, safety and security) — but they want first to be told the all-in price so they understand the real best options they should consider. Transparency of the full ticket price upfront with all taxes and fees included, and the ability to compare the all-in price of travel including the costs of ancillary services such as pre-reserved seat and baggage fees, is what matters to consumers and that is what Congress should be keenly focused on.
Aviation policy development historically has been a bipartisan endeavor in Washington for the benefit of consumers and the good of the country. In recent years, as represented by the Orwellian-named Transparent Airfares Act of 2014, which this Section 505 revives, sadly the policy objective has shifted from the good of the country to the demands of special interests with deep pockets and armies of lobbyists.
When this legislative proposal was first drafted and advanced by airlines in 2014, The New York Times made it abundantly clear why it was so very anti-consumer in two editorials. That toxic proposal remains the same in 2017, as do the serious objections to it.