Las Vegas Sun

March 28, 2024

The R.V. Column:

Airlines fear new disclosure rule will give passengers wrong impression

Airplanes 0826

An Allegiant Air jet takes off from McCarran International Airport on Friday, Aug. 26, 2011.

McDonald’s doesn’t have to disclose how much a consumer must pay, taxes included, to buy a Big Mac.

And if you buy a brand new car at a local dealership, you won’t see ads that break down taxes or the cost of dealer prep, whatever that is.

But the U.S. Department of Transportation is forcing airlines to fully disclose the total price of an airline ticket in rules that take effect Thursday.

What that will do is wrongly give the impression that fares shot up overnight when, in fact, the airlines are just showing ticket costs that include federal taxes and fees passengers already pay.

Ironically, the “hidden” costs that annoy consumers the most — baggage fees — aren’t even part of the full-disclosure rules that are supposed to provide transparency on ticket prices.

The reason those nagging bag fees won’t have to be included is there are so many variables in play that it would be too complicated to provide a single, accurate fare that a consumer could use to compare ticket prices between airlines.

Airlines will be required to tell customers if there is a bag fee and how to calculate it.

They also could advertise fare ranges that probably would make consumers wonder whether they’d be on the high or low end of the range.

The result of the Department of Transportation’s new rules will be more confusion for consumers and what will appear to occasional travelers as a major price increase.

Airlines fear the surprising jolt in ticket prices will discourage travelers from booking flights.

That’s just what Las Vegas doesn’t need as the city builds momentum in its recovery from three years of economic malaise.

Beginning Thursday, airlines will have to show us the base fare, plus the Sept. 11 security fee ($2.50), the U.S. domestic segment fee ($3.80) and passenger facility charges, which vary by airport and are up to $4.50 per enplanement with a maximum charge of $18 per round trip.

Ads also have to show any fees that are essential to travel. That means they don’t have to put in bag fees, booking fees, seat-selection fees or other add-ons passengers don’t have to have.

Colorado-based airline consultant Mike Boyd says the biggest thing the new rules will do is “reveal the obscene amount of money we pay to the government every time we fly.” He also points out the listing of the government taxes and fees really doesn’t explain what passengers are paying for.

“It’s been postured that the airlines are hiding this from people,” Boyd said, “and that isn’t true.”

Andrew Young, the website editor for Travelzoo.com, supports the disclosure rules but says consumers will have to recalibrate their views on what is a good deal.

“I think it’s going to be a positive for consumers,” Young said. “We’ve always tried to pull apart every deal that we have for our subscribers.”

Travelzoo publishes a top 20 list of travel deals every week and details customer costs. For example, last week, the company posted a deal through Southwest Vacations showing four-night packages at the Luxor with show tickets and air fare from 15 cities. Travelzoo carefully notes that “the price includes all taxes and fees” and “resorts may charge a daily resort fee upon checkout.” Prices varied according to the starting point’s distance from Las Vegas.

Southwest, incidentally, is among three airlines with a significant presence in Las Vegas that are fighting the Department of Transportation rules in court. But it isn’t likely that implementation of the rules will be delayed.

Southwest’s main objection is that airlines are being discriminated against and having their right to free speech trampled by having to list their prices with taxes, giving the impression that the cost is higher than it is. A spokeswoman with the company said the new rules address something about which most airlines have received few complaints.

Brian Davis of Las Vegas-based Allegiant Air says his company gets hurt worse than other airlines because vacationers already are protective of their discretionary dollars, and any perceived price increase is going to be met with a resistance to buy.

Because Allegiant has some of the lowest base fares, the federal fee increases produce a higher percentage increase for customers.

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