The New York Times: Trump’s Moves on Airline Fees Prompt Transparency Questions
Justin Sablich on April 13, 2017
The New York Times
President Trump’s executive actions restricting travel from predominantly Muslim countries caused confusion and erroneous detentions at airports and are potentially having a negative impact on the United States tourism industry.
Further actions by the administration could have a wider effect on travelers when it comes to the cost of air travel and airline fee transparency.
The Department of Transportation recently suspended the process of collecting public comments on two previous administration rule proposals related to airfare transparency.
The more recent rule, proposed by the D.O.T. in January under President Barack Obama, would require more transparency regarding passenger baggage fees. The other proposal, made in October, was looking into whether airlines were withholding valuable fare and scheduling information from consumers searching on third-party travel websites.
The baggage fee proposal would have required that airlines and ticket agents make evident all such fees at the beginning of the booking process. This action followed an executive order issued last April by Mr. Obama that was aimed at making the use of such fees clear to consumers and several years of consideration on related issues by the department.
The D.O.T., under Mr. Trump, suspended the public comment period for both proposals in March to “allow the president’s appointees the opportunity to review and consider” the actions.
As part of his budget, Mr. Trump has also proposed raising a tax on airline tickets to help cover Transportation Security Administration costs. The fee per leg of a flight would rise to $6.60, up from $5.60, and would raise $40 billion in the first 10 years.
The decision to delay the proposals was supported by Airlines for America, a trade organization that represents most of the country’s largest airlines, including American, United and Southwest.
“We believe these are exactly the type of regulatory actions the administration had in mind when issuing the regulatory freeze and review process,” said Vaughn Jennings, the group’s managing director of government and regulatory communications. The organization believes airlines are already fully transparent, with all pricing information readily available on websites, Mr. Jennings said.
While the suspension of the most recent proposal on baggage fees could be interpreted as a setback for transparency advocates, the Travel Technology Association — a trade group that represents travel websites like TripAdvisor, Skyscanner and others that allow consumers to compare airfares and refer them to booking sites — said it was hopeful that the department’s new staff would carefully review this and other transparency considerations.
The larger concern with this proposal, the group said, was that it was too narrow in its aim and did not address whether consumers could purchase add-ons for checked baggage on third party travel sites.
The group’s president, Steve Shur, said that a 2014 Transportation Department proposal was a more comprehensive attempt to address ancillary fee transparency. The latest proposal was boiled down to addressing only baggage fee information, which, for the most part, is already transparent, Mr. Shur said.
“We saw that as not a great outcome after all that time.” Mr. Shur said.
Mr. Shur said that what consumers should have when searching for airfare is “an apples-to-apples comparison of the airlines participating, with all those costs included, so you would know the true cost of the trip and could comparison shop, and that’s what’s not happening right now.”
Rafi Mohammed, the author of “The 1% Windfall” and a pricing strategy consultant, agreed that airlines more or less already make baggage fees apparent on their websites, but he doesn’t necessarily think they should be obligated to.
“I feel like checked baggage fees are really an optional thing; it’s akin to an à la carte option anywhere you go,” Mr. Mohammed said.
“The ultimate question is whether a hidden fee is equivalent to a bait and switch scheme,” Mr. Mohammed said. “Where that threshold is varies among people, but I think that threshold is when a hidden fee is mandatory.
Regardless, some lawmakers are pushing for a law that would require airlines to disclose all baggage fees and the services airlines provide, like hotel stays and food vouchers, during mass flight delays and cancellations.
Representative Rick Larsen, Democrat of Washington, introduced the bill with Representative Peter DeFazio, Democrat of Oregon, in March.