Airfare pricing may soon become a bit less transparent if the Department of Transportation moves forward with a proposal to weaken the way airlines must display the full price of a ticket.
Airfare Pricing May Get More Confusing If DOT Weakens Full-Fare Advertising Rule
As View From The Wing explains, the current full-fare advertising rule requires airlines and ticket agents to display the total price of airfare, including mandatory taxes and fees, as the most prominent price shown to consumers.
That rule has always made sense to me.
When you search for a ticket, the number that matters is not the base fare and it’s not the government tax portion…the number that matters is what you actually have to pay to buy the ticket.
As a first step, the DOT is now looking at whether airlines should have more flexibility to emphasize the components of the fare, including government taxes and fees, so long as the total price is still shown. In practice, that could mean the all-in price is no longer the clearly dominant number during initial search results. You might see this (all in the same size font):
- Fare: $190
- Government taxes: $40
- Total: $230
While better than jettisoning the all-in pricing regulation altogether, adding to consumer confusion strikes me as poor public policy. Airlines all already free to break down the fare and clearly point out how much goes to the government (as Spirit Airlines did with its “government’s cut” line item on the final billing page).
DOT is also considering gutting the “all-in” rule altogether, arguing an existing IRS rule already compels airlines to include taxes when advertising fares.
The All-In Price Should Remain The Main Price
Airlines are not wrong to point out that government taxes and fees make up a meaningful portion of many tickets. Consumers should understand that. I have no problem with airlines showing a breakdown of what goes to the airline and what goes to the government. In fact, I think that information can be useful.
But he first and clearest price shown should always be the total price. That is the only way consumers can quickly compare options across airlines and booking sites. Anything else invites confusion, especially in a marketplace already filled with basic economy restrictions, seat fees, baggage fees, and fare bundles.
Airlines know exactly what they are doing when they push for more flexibility in how prices are displayed. A lower base fare looks better. A fare that appears cheaper at first glance is more clickable. And once a consumer is deeper in the booking flow, the friction of starting over works in the airline’s favor.
That does not mean every airline will abuse the rule, but the incentive is obvious.
CONCLUSION
I am all for transparency around taxes and fees. Show the breakdown. Explain what the government collects. Let consumers see where their money goes.
But the all-in price must remain the headline number and should stand out.
Air travel is already complicated enough. Weakening the full-fare advertising rule would not make pricing clearer. It would make it easier for airlines to advertise fares in a way that looks cheaper than what passengers actually pay.
That is not transparency…it’s really the opposite and a step backwards.
This is what happens when you ‘de-regulate’ to the point of harming consumers. Some inevitably are gonna try to sane-wash this, or insert some plausible deniability that it is anything but a benefit to corporations and grifters at the expense of the rest of us. Please vote wisely in a few months and in a few years. We deserve so much better.
While I do like the current rule, why do hotels and vacation rental companies get to do whatever they want? Why do brick and mortar and internet stores get to show the regular price before taxes and fees? When you walk up to a check out at the grocery store in some cities you can get rung up for another 10% or more than what you thought. Again, I like seeing the all in price, its just odd that only one industry has to do it.
Yes, I would totally extend this to hotels too. Heck, I far prefer the all-in pricing model for everything.
I get that this administration doesn’t care at all about anybody except donors, but do the airlines contributing to Trump really want this that much? Will confusing pricing actually lead to more sales? This seems like de-regulation for the sake of de-regulation.
It’s obviously the airlines pushing for this, or it never would have appeared on the Trumpenführer’s radar.
It seems that we can expect airfare prices to be high and remain high…
UA donated $1M to Trump’s inauguration. It looks like that crony investment will have a great ROI for them.