When left to their own devices, I don’t trust airlines to look out for anyone but themselves. While that is not always mutually exclusive to consumer interests, in the case of fee disclosures, it usually is…
Fee disclosure should be a non-partisan issue. No consumer should be surprised by hidden fees. Furthermore, a consumer should not have to scour the internet or an airline’s website to find ancillary fee information. And perhaps there is widespread consensus on this. But I get the sense that airlines have been given a wink-wink, nudge-nudge from the current administration that they will look the other way on hidden fees….if for no other reason than the language of the press release below.
Last Friday the U.S. Department of Transportation formally dropped a proposal to require airlines and online travel agencies like Orbitz and Expedia to more clearly display baggage fees. Justifying it “as part of the Administration’s effort to reduce regulation and control regulatory costs,” the DOT stated–
The Department is withdrawing these rulemakings because they are of limited public benefit. The Transparency of Airline Ancillary Service Fees is unnecessary as the Department’s existing regulations already provide consumers information regarding fees for ancillary services, including baggage fees.
View from the Wing applauds the move, stating such regulation “was dumb“. He argues that any meaningful regulation must not protect legacy online travel agencies while failing to provide what consumers really need like information on seat pitch, size of lavatory, and feasibility of smoothly connecting.
Locking in what information is displayed to consumers prevents innovation and protects the incumbent large online travel agency sites, immunizing them from the competition that comes from new entrants doing a better job helping consumers find the travel solutions that are best for them. It also would have locked in the pure focus on price at a time when differentiated onboard passenger experience becomes more important than ever.
What’s Wrong With All of the Above?
I get Gary’s point. You can read his formal analysis here. But I question whether requiring more visible fee disclosures would stifle innovation. On the contrary, I don’t think it would have any impact and may even invite innovation.
With airfares unbundled like never before, I think consumers should understand immediately, not several clicks later, how much their airfare really costs. It’s that simple. I see otherwise savvy Award Expert clients confused by unexpected airline fees all the time. While frequent flyers may understand the system well, I do not think we are at a point in which all consumers should be expected to know that when they see a $50 price for airfare it comes with the seat only and nothing else. That should be disclosed on the initial search screen in order to truly compare airfare pricing.
What the DOT Currently Requires
Don’t think I am only knocking the Trump Administration. Unlike some bloviating Democratic Senators, I’m not crying wolf here. The Administration rolled back nothing: the proposed regulations never went into effect. Furthermore, the DOT already provides the following guidance on how airlines should disclose baggage fees, which will remain unchanged–
To meet the requirements implicit in 49 U.S.C. § 41712 with respect to internet advertisements, air carriers and foreign air carriers should place a notice regarding the above-described additional baggage charges on the first screen in which the carrier offers a fare quotation of a specific itinerary selected by a consumer. This notice should appear if the carrier imposes an additional baggage charge for one or two checked bags. The notice may consist of either (1) an asterisk or similar character in close proximity to the fare quotation referring to a statement on the same screen that “additional baggage charge may apply,” or (2) a more detailed summary of the baggage charges on the same screen as the fare quotation. In either case, the text should contain a hyperlink to a full description of the carrier’s baggage policies.
But is it too much to ask that airlines disclose baggage fees when selecting a flight rather than after one is selected? Is it too much to ask that other sellers of air travel and airfare search engines like Google also disclose information?
I don’t think so. The DOT’s tarmac delay rules have not led to a rash of additional flights cancellations or any other parade of horribles. On the contrary, they have prevented airlines from holding passengers hostage. In the same vein, I don’t think more disclosure will ultimately hurt airlines or innovation, but it will certainly help consumers make an informed choice when booking airfare.
The goal is not more regulation. Instead, the goal is smart regulation. Even so, it seems to me that taking further steps to ensure that consumers are aware of ancillary fees is a good thing. Even though these ancillary fees are available when searched for, they continue to spring on people by surprise. In the era of unbundling, this is unacceptable.