Tuesday the Department of Transportation published a ‘supplemental notice of proposed rulemaking’ on their existing rulemaking docket regarding transparency of ancillary fees.
DOT proposed to require airlines and ticket agents to disclose either customer-specific or itinerary-specific fees for:
- First checked bag
- Second checked bag
- Carry on bag
DOT proposes to require this disclosure to be made “wherever fare and schedule information is provided to consumers” and this would have ot be provided “at the first point in a search process where a fare is listed in connection with a specific flight itinerary, adjacent to the fare.”
Airlines would have to provide “useable, current, and accurate” fee information for free “to all ticket agents that receive and distribute the carrier’s fare and schedule information, including Global Distribution Systems and metasearch entities.”
Credit: US Department of Transportation
Priceline has already gotten out of the ‘name your own price airfare’ business but opaque bookings through Hotwire and elsewhere remain. There goes that business model, since this disclosure requirement helps consumers identify the travel provider.
The Department of Transportation has decided exactly what information consumers should consider when buying a ticket, and has proposed to require that consumers wade through additional information (in an already crowded and confusing landscape) in order to buy a ticket.
Of course this drops days before the end of the current Administration. There will be a comment period and a time to consider comments on the proposed rule. And any decision about a final rule will be made by under the direction of presumptive Transportation Secretary Elaine Chao who may take a very different view than the current leadership at DOT. So this may not wind up going anywhere in the near- or medium-term.
A better approach I think is the innovation we’re seeing from companies like RouteHappy that customize information to provide consumers with what actually helps them make the best decision about products. Is second checked bag fee really more important than the amount of legroom an airline provides, or for a business class customer whether the seat is angled or flat? Is showing a $0 carry on fee more important than knowing about inflight internet?
Fees are all already available, easy to find, online. The DOT doesn’t think consumers are smart enough to find the information or to ask their travel provider for it and instead they need circles and arrows.
Instead of making them wade through irrelevant information (the DOT will permit sites to allow consumers to proactively ‘opt out’ but that generally requires creating an account and isn’t great for shopping around site-to-site on different devices), we shouldn’t crowd consumers with information the government decides they need and should instead allow competition to provide consumers with the best possible information for their needs to win their business.
Jeez, Gary, why are you always against more information? You may know that the WOW ticket from JFK to Europe is really $100 more because you’re likely to check a bag, but most don’t. This will provide an apples-to-apples comparison about the cost. That’s what consumers are picking their airfares by, not leg room.
Gary, you’re wrong. Most consumers don’t read this or any other blog. I’m already dreading the day when a Basic Economy fare throws a tantrum at the gate because he/she didn’t read the fine print about rollerboards. Were you against the ruling making them include all the “bonus” fees in the price of a ticket? If not, then what’s the harm in making them show bag fees up front? Spirit already does this, and it actually works just fine.
Quit your whining about government regulation – sometimes it’s actually good for the consumer.
Most people aren’t frequent-flyer nuts like us or road warriors and don’t know about bag fees and everything else. The grandparents who only fly to see the grandkids once a year; the family who only flies to Orlando every few years, etc. Many infrequent fliers don’t even know when they’re seeing a codeshare, much less how to then figure out which airline website to go to in order to hunt around and find baggage fees, etc.
DOT already requires fares all-inclusive of tax, this seems pretty common sense.
Trying to widen the net of people opposed to consumer-friendly regulation of industry? The fact is that this proposal doesn’t kill Hotwire “opaque” bookings, regardless of what may be claimed. And this proposal isn’t what killed Priceline “opaque” bookings for flights.
Hotel resort fees also haven’t killed “opaque” bookings. Priceline and Hotwire found a way to deal with that.
This seems essentially sensible but heavy handed. Much better the Kayak approach where you tell the site how many cases you intend to carry and it adjusts the quotes accordingly. But where to stop? Should I also tell it how many drinks I want? Whether I wish to choose a seat on booking? Do I want hot food, cold food or none?
Gary, you are wrong. Knowledge is power. And the system as it is now is limping along–even for us savvy travelers.
Recently my adult daughter found a low fare for a ticket on Expedia. She told me the fare class, all details. It seemed okay. It wasn’t. Turns out the DL ticket (which was on DL and then AM metal) was actually processed by AF, going through Expedia.es, then handled by Air Europa. Her name was changed, incorrectly, somewhere in the process. Complete disaster. So when daughter got to the counter in Orlando to try to correct ticketing errors–which turned out to be the fault of DL!–daughter discovered the ticket was actually an E minus fare, which had not been listed on the Expedia site (which had showed it as a regular, discounted class like Q or P). If the system is somewhat mystifying for those of us in the know–just look at all of the queries on FT–then how on earth are all the Kettles supposed to keep up?
Unless there is some kind of standardization–like, when I buy an air-conditioner I know a BTU is a BTU is a BTU, regardless of manufacturer, regardless of store selling the product, regardless of advertising method–then the airlines can and will continue to obfuscate, and the consumer can and will be the loser.
Why does it take so long for the government to act in favor of taxpayers? Airlines have been screwing over Ma/Pa with lack or overly complex information for so long, this application of free market rules should have taken place in 2015 not now.
As they say, better late than never!
The more pricing information upfront the better.
Next, let’s get the hidden hotel resort fee issue resolved.
I am in favor of this rule and would suggest a similar one for hotels. The cost of the hotel provided upfront – not after a couple of clicks – should include all mandatory fees like resort fees. I saw a rate of $19 for Luxor in Las Vegas but they never mentioned that there was an extra $35 for resort fees until well into the booking process. Ridiculous
Taxes/fees and resort fees are costs to everyone, they are not options and should be included up front. Baggage fees, along with the cost of your drink, or extra leg room, etc. are all optional additional costs. I don’t want my screen cluttered with a bunch of other information when searching for fares. Maybe you want poor mom/pop to be shown their potential cancellation fees along with how many days they have to do so on the initial screen, as well?
Did the govn demand that travel time and number of stops be shown as well? Or is that something the market worked out on its own? Govn should be involved in standardization, so that would be a good thing. To have a standard way the airlines provide fees and then search engines could do what they want with that information.
@FlyingBoat Many would argue government is best able to provide standardization. Shouldn’t 1 pound of flour have the same mass as 1 pound of butter? The government standardizes weights and measures well; I doubt the market would work that out.
Bags are a pretty essential component of the fare. Of course not everyone checks a bag. And yes, how far down do you go is a decent question. But this seems reasonable.
While I know to look at baggage fees when booking a ticket, it often takes searching several pages of the websites of all the carriers I am considering. This takes up more time than I want to spend and makes me memorize or track each carrier’s total costs. It is easy to make a mistake in this model. Sometimes all your baggage options only come up after you have picked a particular fare.
Worst for me is that it makes search’s on sites like Google flights less useful. I find the fares and compare them, but the baggage costs often are the deciding factor and I am forced to review the offered flights at the carrier’s website rather than being able to pick the best match for my tastes directly from the search engine. This wastes my time. I wish the search providers would calculate this for me, but for some reason the demand for this has not translated into action. As “non flight” charges grow, we need a better way to compare the actual cost of travel with different carriers. It is unfortunate that the government is doing this rather than the free market, but the market has not responded.
Amazing how awful these “recommendations” from US DOT. are Just a bunch of bureaucrats sitting around with tax payer money and coming with plain BS. How does this help anyone? If you really want to help the consumer fight the monopolies in court on these incidental fees. Those are the ones really eating consumer’s budgets. Airlines already do a good job of informing on fees. What will more knowledge do here? Every airlines charges for bags and carry-ons now. What will it help accomplish? I still don’t have a choice if I don’t like the fees.
Most hotels now are using a “resort” fee. Sorry, if the hotel doesn’t say resort, it’s not a resort. If you don’t have a spa or I can use your pool year round, then it’s not a resort. Comp’ing me a bottle of water and wi-fi and giving me access to your tiny hotel gym with one multi-purpose weight machine and one stairmaster/elliptical or bike does not a resort make. I expect a resort to have appropriate staff to take advantage of the “resort” items and a heated pool for year round use, cocktail/towel service, etc. Where I live they’ve instituted a resort fee because a hotel added an outside water park for guests – FYI, that water park is only open May-Sept. What about the rest of the year?
Now back to the airlines – if you don’t know there are additional fees for baggage then what rock have you been living under? I have older parents and I understand they don’t always know everything going on with airlines because they fly once a year. But they are the exception. And I feel that changing the rules all the time just confuses people more than helps them. I don’t see any real value in adding all this ancillary information considering that on the legacy airlines you get check baggage comp’d if you’re elite or a co-branded credit card holder so now you’ll be quoting prices higher than they actually are or the airlines will just charge you for those fees whether they would or would not apply. I like the fact they included the taxes. That gives you the base fare. Seat selection, checked bags, food, etc. those are all extras. We know it, we don’t like it, but we know it.
I agree with most commenters that this is a very sensible and useful proposal even for those of us who are more experienced. Like another commenter, I also recently had a situation where Google Flights results weren’t hugely useful because some airlines were charging extra for luggage & misc. while another airline had it included. Had to spend extra time reading up on policies & pricing of those airlines instead of simply looking at displayed prices in Googe Flights.
What would really be interesting is how this is going to work for those people who may have benefits due to being elite status members or cardholders (e.g. 1st checked bag free, etc.).
P.S. Something else to consider — I believe now some airlines have varying fees for checked bags depending on a destination so having this functionality would cut through that clutter as well.
An aside and I know the airlines would scream about this – what about capping the fees? That could be your standardization. For example, change fee capped at $50, carry on bag fee capped at $20, each checked baggage capped at $30, awards ticket fee capped at $25, etc.
There’s your standardization. Keep it low and set it in stone.
I learned a long time ago that all we need to take are our roller bags to the overhead storage and NEVER check a bag, even for our last 8 week European trip and cruise back home.
Even so, when I go to use my Frontier (expiring every 6 months) frequent flyer miles, I find I can’t take my roller bag on board without a baggage fee.
It took me a lot of time and effort to calculate the allowable bag size and policies, only to find, there was a bag fee anyway!
No problem on SWA!
I have written to my congressmen and those sponsoring bills to force the “resort fees” into the total price, like taxes. Hopefully, with the new administration, we can TRUMP resort fees. Although, I wonder how sympathetic he will be to abolishing resort fees, since probably many of his hotels already charge them.
WRITE those letters!!!
3 points –
1. Many consumers aren’t aware of these charges until they get to the check-in desk (not us, but there are real people, millions of them, who fly less than once per year). From a business perspective, the low-cost marketing model is specifically built to take advantage of customers like that by advertising a low initial fare and making up most of the remaining cost through additional fees. Without the fees, they are often selling fares below cost, on purpose.
2. You may be surprised by this, but rulemaking proposals like this are actually derived FROM consumer complaints and requests. It’s not some government worker making $250k a year deciding how to make rules. There are actually mechanisms to solicit feedback from the public and they analyze what they hear in aggregate to make proposals. This was likely multiple years in the making…
3. Just like competition occasionally requires antitrust action, it also requires transparency to work.
Wow, Gary, got pretty slammed on this one. God forbid the government try to make businesses divulge the actual price of their service…
Oh, and there aren’t government workers making 250k a year until you get close to the Presidential level.
I’m with Gary. Give me the base price, and give me a way to check what extras are available if I want them. Don’t make me wade through multiple screens of options, opt-in / opt-out laundry lists of stuff before I can see a fare. I check a bag less than 10% of the time, and haven’t checked a second bag in, well I can’t remember – it’s been at least several decades. Why force me to wade through that, when I’m indeed much more interested in knowing about legroom, wifi and several other things. I hope Secretary Chao pulls this, and takes a cautious stance toward making the booking process more burdensome.
Some industries are a whole lot worse about these sorts of things. Ever try to figure out a phone bill? What about a visit to the hospital. One “out of network” doctor on your ER visit to an “in network” hospital can cost you enough money to pay all the luggage fees for your lifetime and the lifetimes of your children and grandchildren.