Airline industry lobbyists are pushing the Transparent Airfares Act.
They say that government rules requiring airlines to advertise full final prices, including taxes, makes it easier for government to raise taxes and puts air travel at a disadvantage relative to other industries that have no such requirement.
Because of that ruling, the government today is able to hide the outsized, ever-increasing amount that airline customers pay in government-imposed levies. In fact, the government’s ability to conceal such extra costs actually increases the temptation of lawmakers to raise taxes on airlines and their passengers and further puts air travel at a competitive disadvantage to other modes of transportation that do not have to include taxes in their fares, which ultimately hurts our economy and jobs.
Matthew from Live and Let’s Fly declares,
Allowing an airline to advertise a “price” for an airfare that rises 15-20+% on the final payment screen is legalized bait-and-switch
Wandering Aramean wants to “Teach[…] Airlines the Meaning of Transparency” and acknowledges that “hotels and rental car companies are not required to publish all-in fares” but thinks that those industries should be required to rather than allowing airlines not to have to.
Of course pricing engines can show fare breakdowns alongside final price. But that’s not all the lobbyists are actually after.
Legislative change to recent regulations might cause consumer sticker shock in the airfare purchase process, and no doubt that’s what the lobbyists want — to stoke outrage and create grass roots support for lower taxes on aviation. I’m skeptical that would happen or become a viable movement.
But while big airlines may not like paying taxes, it actually provides a competitive advantage for them against low cost carriers like Spirit, Allegiant, and Frontier whose business model the lowest possible fare plus optional add-on fees (that can be tough to avoid). Taxes make up a much greater proportion of ticket price for those airlines, and disadvantage them (since doemstic tickets have a 7.5% excise tax which is proportional plus fixed tax costs that become a lower percentage of total cost the higher the overall fare).
In Europe pricing includes VAT. In the US prices of retail goods do not generally include sales tax. And we have a tipping culture in the US so restaurant pricing will generally exclude both meal tax and tip.
I’m not sure that one system is inherently better than another, although I prefer all-in pricing.
It’s odd that airfare pricing in particular is the focus of regulation and then legislative fights to overturn that regulation.
All-in-all, while this issue seems to get juices flowing among many, I see it as a non-issue. I’m not on one side or another here, I just see a ton of spent energy over an issue I cannot get excited about.
At the same time I see the passions it raises among others, so would love to understand better why this is such an important issue either way. We see full price before we buy, we can build expectations of full price the way we do in a restaurant, but I also don’t see big problems seeing the breakdown on the purchase screen rather than being jolted once you get there.
Should I care about this issue, either way?