House Bill Means Airlines No Longer Have to Include Taxes When Advertising

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In what will be seen as a loss to consumers, airlines may no longer be required to include taxes when they initially advertise their fares. The move comes under legislation that will be voted on in committee on Tuesday, June 27th.

If it passes, it will overturn a DOT directive that airlines include all taxes when they first mention fares in advertising. This rule went into effect in January 2012 and fell under the DOT's authority to regulate unfair and deceptive practices. It is noteworthy that the House has approved similar policies in the past, although the Senate has declined to act on them.

Long-Running Battle

This is the latest chapter in a long-running battle between consumer groups and airlines.  With airlines fighting against the requirement. They argued that no other industry has to include taxes when advertising their product. Several airlines led by Spirit Airlines fought a case against the directive but ultimately lost in April 2013 when the Supreme Court declined to hear their case.

The new bill proposed by Rep. Bill Shuster, R-Pa. does not deem it unfair or deceptive for airlines to advertise their base fares, as long as the taxes are clearly stated in a link or Pop-up on their websites.

Opposition to the Legislation

Many stakeholders will oppose this new legislation, including travelers and travel agents since it will make it harder to compare total costs. According to Charlie Leocha the president of Travelers United a travelers’ advocacy group, the new provision in the bill is a “poison pill” he added that “Back in 2012, before DOT set rules to control deceptive advertising, airlines advertised transatlantic flights for $65.

Of course, after reading the fine print a consumer found that the most inexpensive ticket cost more than $750,” he finally concluded that “The FAA bill will allow airlines to return to that kind of anti-consumer misleading advertising.”

Overall

Without a doubt, this vote tomorrow would be bad news for all of us and could lead to airlines using bait and switch style tactics to attract customers. Hopefully, the provision does not pass in committee, and even if it does travelers and other stakeholders will have to apply pressure on their Senators to discard it as they have done before.

Source: USA Today

House Bill Means Airlines No Longer Have to Include Taxes When Advertising
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Comments

  • I wish we were moving towards complete transparency with hotels, not rolling back with airlines.

  • It will make it harder to find great deals that are really great before the big taxes get added on, make a call to your representatives, we all need to stop this game that the Airlines will all play.

  • sometimes taxes are higher than the airfare itself. i often fell into this trap before.i am sure the bill won’t pass.let’s see…

  • While it is true some industries may not include all fees. I doubt there are,as many fees in other industries as there are in airlines. It sucks to,roll back this legislation.

  • Does this include removing fees as well from the advertising price?

    This seems pretty ridiculous.

  • Seems strange to go back on something, I thought recently we were moving forward with making corporations become fairer to consumers over pricing, seems like it’s slipping back again.

  • this is a step backwards. what is going on with the Trump administration?

  • What a terrible idea- so annoying to not know the total price right away!

  • Instead of chasing this pointless law intended to confuse consumers, why don’t they go after hotels, and make them roll “resort fees” and such into the base rate…

  • The_Bouncer says:

    This is a backwards step. I am of the opinion that all prices, for everything, should be advertised including taxes.

    • This really is something that I’d agree should be consistent across the board. A level playing field for everyone.

    • Absolutely a backward step, and I’m disappointed that this mandate may be rolled back. While less transparency is never a good thing, I have to ask: is there really anyone out there that would think $65 would actually be the all-in cost of a transatlantic flight?

    • Exactly! What legitimate rationale is there for not taxes, especially with airfares where unlike say a standard % tax, all the differeny charges mean there’s no way to easily estimate the size.

    • Everyone call your congressman to oppose this bill.

  • Airlines sneaking in costs like this somehow doesn’t seem right.

  • The argument that no other industry is required to advertise including taxes would hold water if taxes and fees on airline tickets were in similar proportion to other products. But, like the example given, if the “price” of an item is less than 10% of the final cost (after taxes and fees are added) it’s not a fair market representation of the cost.

    Moreover, all airlines are doing is wasting people’s time. How many people will be drawn to a $65 fare and then be satisfied clicking “Buy” next to $750?

  • This is crazy! Every other industry is upfront on fees – why should airlines be exempt?

    • Not really. Look at cell phone and ISP bills. The real solution is to cut out half of the added-on government fees.

  • I totally agree with the previous poster who says that, rather than go backward to allow this, hotels should also be included!
    When I buy a product or service, I want to know how much is coming out of my pocket! I don’t care how much is going to the airline or to the government. I particularly think non-optional “fees” need to be included as airlines often charge them when times are bad (for example when fuel surcharges when fuel prices are high, but then don’t take them away when fuel prices have dropped. ). They go to the airline and so should be included in the advertised price.

  • I think in the end it comes down to this, which was noted in the article: “it will make it harder to compare total costs”.
    If this passes, airlines will make up different ways to calculate taxes and fees and in the end the consumer will lose a lot of time to understand and compare all the airline prices for a set route.

  • How will this affect price comparison websites such as Google Flights, Expedia?

  • As with the rest of this Congress, the legislation is a step in the wrong direction.

  • In Canada, it went the opposite way: after a long period with taxes in the fine print, nowadays the advertised dollar amount must include taxes, which can be substantial.

  • why would any airline favor this change? Costs money to rework price reporting systems, etc. Only answer is to abuse/mislead consumers and MAAKE MORE MONEY! Follow the money….

  • This is sill, and I hope this fails. It will be voted on “in committee”? Does that mean it is not going to be voted on by the entire House, but just members on some committee? Regardless, I guess I should write my Congress person.

  • This is awful – being from a country where we have VAT included on everything we buy, there’s nothing worse than seeing the price of something, only to have it increase dramatically when it comes time to pay.

  • Now more than ever it is important to read the fine print. Let’s not be fooled by either the airlines or hotels.

  • Displaying airfare without taxes and fees/surcharges is really not ethical IMO, but I guess no airline & hotel care about being ethical…

  • The real proposal should be to lower the taxes and surcharges!

  • Anyone know where we can check to see if the vote took place today and what the outcome was?

  • The bait & switch advertising without taxes should be a thing of the past. Norwegian fares across the pond SWF to DUB @ $99 plus taxes as advertised is real. Headed for long weekend this fall. $275 RT includes all txs & fees. They do exist

  • It’d be nice to have a total price when I book rather than have this tax and that tax or this fee, etc. I find myself reading so much before I buy anything these days. At least I’m working my brain, right? lol!
    It’d be awesome to extend the taxes included to all fees and taxes and include hotels, car rental companies, etc in this. America is very price led though so I understand why businesses don’t want to.

  • this is total crap. anything rolling back the rights of consumers is not good for anyone but the airlines.

  • Stuff like this only benefits airlines… Wish it would benefit consumers in some way

  • Obviously, not a positive, but since similar flights have similar taxes, for comparison purposes, it basically balances out.

  • What other products/ U.S. industries are forced to advertise tax-included prices? Gas stations (although that may be voluntary?)? Why not level your ire at the government for charging the taxes in the first place?

    • My question to this is: How can a government run without taxes as a source of revenue?

      Given the history of airlines price-gaming with “fuel surcharges” and “carrier-imposed surcharges”, which moves cost from the fare to this “fee”, which has no concrete item associated with it, I think transparent pricing benefits the consumer and does not adversely affect the airline industry.

  • Depends if those taxes include “fuel surcharges” which are not taxes and basically an arbitrary amount of the actual ticket fare.

    • This is definitely a sticking point — if government taxes/fees are excluded it will represent something that would be consistent across the board, but if “fuel surcharges” or “Carrier imposed surcharges” are excluded, we’re apparently looking at deceptive pricing.

    • In addition, for flights with different stopovers, airport fees may be quite different, with substantial variations in the total ticket price.

  • This seems like a bad idea. I wish that it would be all upfront when buying a airline ticket. I feel more problems will arise because of this.

  • Sometimes I see the benefits of being European 🙂
    European regulations require posting the full amount customers pay.

  • Mark Humble says:

    Crazy idea – just like allowing airlines to advertise the price – then in some instances double the ticket price after using a credit card for payment, reserving a seat and booking luggage.

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