47 responses to “Stop Focusing on How Fares are Displayed, We Have Bigger Problems”

1. 

   David

   Aug 5, 2014 at 4:12 am

   When I book a hotel, and find there’s a is a city tax or some other fee not included in the price, I don’t like it. Just because hotels don’t have to include the city tax in their advertised rates doesn’t mean an airline should not have to include Govt taxes. In an ideal world, if a price is advertised, it should include *all* compulsory fees that cannot be avoided, or list them out very clearly – regardless of the source. Failing to do only makes it harder for a consumer to make fair comparisons on different products.

   Reply
   1. 

      Ted

      Aug 5, 2014 at 5:57 am

      Then make the rule that. It’s not. It’s discriminatory against the airlines. My point of view is not that taxes should or should not be “hidden” but rather it should be the same across all industries, no matter what the decision is.

      Reply
      1. 

         Chris

         Aug 5, 2014 at 10:42 am

         It is a DOT rule and DOT does not regulate the Hotel industry, thus, it is the responsibility of the federal agency which regulates hotels, if there is any, to do so. In fact, since most taxes included in hotel fees are local taxes, local governments should be able to make the disclosure mandatory in hotels located in their respective jurisdictions.

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      2. 

         Grichard

         Aug 5, 2014 at 4:04 pm

         But why does it have to be the same across different industries? Airlines don’t compete with hotels. Ideally things like hotels that have unusual tax rates would all quote bottom- line prices. But even if they don’t, I don’t feel like airlines are “discriminated” against. The rule applies to all airlines alike.

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         1. 

            Ted

            Aug 8, 2014 at 6:20 am

            You think airlines don’t compete with hotels? Ok.

            I guess you’ve never NOT gone on a trip because the hotel was too expensive, or stayed at a little nicer hotel because you got a good deal on airfare, or stayed at a cheaper hotel because the fare was higher than you wanted to pay.

            If you have a budget and are trying to make a vacation work on that budget, than both airlines and hotels are competing for the travel dollar.

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      3. 

         Loanne

         Aug 7, 2014 at 8:13 am

         Taxes can’t be the same across industries. Airlines use different infrastructure and government services than hotels or rental car companies. They also impact the environment differently if we ever have carbon tax.

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         1. 

            Ted

            Aug 8, 2014 at 6:20 am

            Nope, but the way they are displayed/collected can be.

            Reply
2. 

   Jorg

   Aug 5, 2014 at 4:48 am

   I totally agree with David. Said otherwise: the fact that the rest of the products don’t include tax, doesn’t mean they should be removed from flight tickets: they should be added to the rest.

   I, being European, find it extremely weird that (sales) tax isn’t included in prices. When I’m paying, that’s what I need to pay. Then add something like ‘includes 7% tax’ or whatever, but show the amount that my credit card statement shows.

   Can’t think of any other country that excludes tax from every day pricing, maybe Canada?

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   1. 

      Matt

      Aug 5, 2014 at 9:36 am

      Cranky,
      I would have to say you are sounding incredibly like a crybaby who favors hurting the customer rather than supporting them. I agree with David and Jorg, easily,

      Why is it that the United States is the only country in the world to not require retailers, hotels, anybody, to include the full price of an item. hmm…is it because it helps the consumer..no it is because it allows a company to make additional profits, while affecting consumer price perception…

      The airlines are never fighting for the customer, in fact, they are fighting for their own revenues, as will continue to be the case,

      perhaps you should focus your energy on more pertinent issues, or explain where government taxes go to…do they go to pay for increased TSA security(in short..yes) do they support airports..yes…do they go to the government(a portion of them) and then are fed back via DOT funding that supports underserved airports/communities with little access…you take these taxes/fees away, i guarantee you that you will see less air service in non-profitable markets, you will also see declining revenue among the airlines(rather short-sighted of them..eh)…so the best thing for you to do is to look at it from a public policy perspective, how taxes work and how to maximize their benefit to every customer, and not just yourself.

      Reply
   2. 

      CraigTPA

      Aug 5, 2014 at 11:12 am

      The main reason taxes aren’t included in advertising in the US – in general, not on plane tickets – is that our sales tax rates and rules on what is and what is not taxable vary by state and, in many states, by county, city, and/or special tax district. For example, in Manhattan the sales tax on a shirt is 8.875% (4% state, 4.5% city, 0.375% Metropolitan Transportation Authority), while across the river in New Jersey, the rate is 7% (uniform statewide)…but there is no tax on clothes at all, so the $20 shirt that would be 21.78 in NYC is $20 in NJ.

      Sales tax law in the US is mind-staggeringly complex, especially on food, where an item’s taxability can depend on the nature of the item and the serving size. For example, here in Florida a cookie that’s 50% or more covered in a coating is taxable, but a cookie that not coated isn’t…unless it’s an individual serving size. So fudge-coated Oreos are taxable, while regular Oreos aren’t, unless it’s the 6-cookie packet, which is taxable as a single serving. In California, saltine crackers are not taxed because they can be used in preparing other dishes (for example, meat loaf), but Ritz or comparable crackers are deemed a “snack” since they’re commonly eaten by themselves or just have a topping put on them (which doesn’t count as “preparation”) so they’re taxable. And on, and on, and on.

      Most major retailers prepare their advertising and in-store materials (including shelf tags) at a regional or national level, which makes it impossible to include all the possible permutations in any but the most local advertising, so we’ve just adapted to shelf and advertised pricing being pre-tax, except for motor fuels (stations have to have clearly visible signing, and it has to include all taxes), and a handful of other items like plane tickets.

      It is common for small food vendors (carts, food trucks, some small restaurants) to include sales tax in the posted price, and this is legal as long as the sign indicates that the price includes tax.

      Canada works the same way as we do, since the total sales tax rate and what items are taxed varies at the provincial level (and, for hotels, can also have local charges.)

      In a way, the airlines are treated differently, but airlines are only regulated and taxed at the Federal level, where almost all other consumer goods and services are only taxed at the state level. (There are Federal excise taxes on some goods, like alcoholic beverages, but the tax is collected from the manufacturer or wholesaler and is invisible to the end buyer.) So the DOT can directly regulate airline advertising, where other advertising comes under the Federal Trade Commission, which has much less authority.

      Reply
      1. 

         CraigTPA

         Aug 5, 2014 at 11:16 am

         (Just a side note, I typed this before reading SirWired’s message below, so apologies for being somewhat duplicative.)

         Reply
3. 

   SirWired

   Aug 5, 2014 at 4:54 am

   Cranky, calm down; it’s actually quite common for prices to be advertised with taxes included if the product is heavily taxed: The most notable is of course gasoline, but alcohol and tobacco are also advertised that way (except for the sales tax in those cases.) Airlines hardly stand alone with this requirement. (And what’s “transparent” about not showing an all-in price? A requirement to show how much of the fare is tax would be transparent. Deliberately hiding the taxes until final payment (which is what was done prior to the rule)? That’s the opposite of “transparent”.)

   I expect that the DOT would rather enjoy rental cars and hotels also being subject to such a rule, but I don’t think the DOT has jurisdiction over either, so you are barking up the wrong tree there. That would be the FTC’s job, or, more likely, the job of states. (States have always traditionally had jurisdiction over hotels.) I know the FTC has prodded a few hotels about not properly disclosing resort fees, but it hasn’t gone far.

   For airlines in particular, it makes very good sense to advertise the price with taxes already included, because the same Point A to Point B itinerary can have taxes that vary by a significant amount, especially with international flights. Not including the taxes in the fare display would give airlines with higher-cost routing an unfair advantage. (Heck, it even creates confusion within a single airline…)

   I have no problem with airlines taking great pains to demonstrate how heavily taxed they are. But that’s no reason to not display the quite-relevant total amount in the fare display. Just like my local gas station has a huge sticker on the pump detailing how high the taxes are, and how they compare with nearby states. Certainly we don’t want to go back to the “bad old days” of the taxes (especially on international flights) being a big shock at the moment it’s time to pay.

   In any case, saying that the “all-in” pricing rule should be repealed because hotels and rental cars charge lots of taxes it too is like arguing to a cop should let you slide because he has more important crimes to be pursuing rather than giving you a parking ticket. Just because some other things are MORE wrong, doesn’t make the current target of enforcement less wrong.

   FYI, the TSA remitting 1/3rd of the fee “back to the general fund” is accounting trickery. Until the total fees collected exceed the budget of the airline parts of the TSA, it doesn’t really matter if they “keep” the fee, or “pay” to the Treasury, which turns around and gives it back in the form of an annual budget allocation.

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4. 

   Andrew C

   Aug 5, 2014 at 5:27 am

   A few things, because I’m tired of your making this argument:
   1. Tax should be included in every price a consumer sees everywhere – we shouldn’t be trying to roll this back, but should be pushing for that kind of disclosure everywhere. Sure, you can disagree with this perspective, but there are a lot of places around the world that do it this way, a lot of people who believe it should be so in the U.S., and a lot of good arguments to support it.
   2. Airline tickets are a great place to include taxes anyway because they’re hard for the average person to predict. Locally, I pay a 6% sales tax, so I know exactly what the tax on a $1000 purchase is. On a $1000 airline ticket… depends on which countries to/from, airports to/from, if/how many connections, which/how many ancillary fees, which airlines even! It’s just so much more complex than a normal purchase.
   3. Airlines / aviation receive massive, enormous, gigantic subsidies, both on an operating basis, on a backup lender basis, and on the infrastructure to which they enjoy nearly exclusive use. I’m fine with all of these, but recognize that this subjects the industry to greater scrutiny and responsibility to the public.
   4. Airlines have a special regulatory status as a result of the history of regulation. Wishing this to go away doesn’t make it so, and surely some changes that should have been made are still due, but this influences regulators thinking and even public opinion.
   5. All airlines are subject to this equally. It’s not as if DOT is just going after UAL or AWE alone on this. Sure, you could (rightly) argue that the increase in displayed prices tamps down overall demand a small amount, but I’d argue (rightly) that this is greatly outweighted by the above factors.

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   1. 

      Andrew C

      Aug 5, 2014 at 5:29 am

      Aaaaaand I now see a post making some of the same arguments that went in while I was writing this. Anyway, clearly at least two of us think alike, so @Cranky, care to reply?

      Reply
      1. 

         CF

         Aug 5, 2014 at 9:58 am

         Andrew C – Happy to reply, though of course you missed the whole point of the post which is that it’s not worth dwelling on this and there are bigger issues to address. But if you want to keep it up…

         1) Fine with me. I just care about uniformity. If tax is included everywhere, fine. Though I still think it’s important for people to know how much of a burden is being placed on them by the government (which of course, the DOT rule doesn’t prevent.) But if certain industries are singled out, then that doesn’t seem fair at all.

         2) You act like airlines are hiding the taxes and then springing them on you after you purchase them. That’s hardly what’s happening here. It’s just a matter of when and how taxes get disclosed BEFORE purchase.

         3) I’d love to hear more about these “massive, enormous, gigantic subsidies.” Assuming we’re not talking about post-9/11 bailouts and just regular operating subsidies, then please tell me more. Airlines, and ultimately travelers, have to pay for all projects that happen at airports. Are you talking about the TSA? It’s questionable whether the airlines benefit from that overreaching, expensive procedure. They didn’t ask for it, the government decided it was required.

         I’ll leave it at that. Again, you miss the point that this isn’t worth arguing over.

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         1. 

            Oliver

            Aug 5, 2014 at 1:05 pm

            > You act like airlines are hiding the taxes and then springing them on you after you purchase them.

            Not after purchase, but I certainly recall airlines advertising those awesome fares to Europe that seemed to good to be true. And they were, once you actually priced the ticket and found that they hadn’t included taxes and fees, including YQ.

            I can see that it’s difficult for national retailers to handle local and state tax differences in national advertising, but since the airline taxation system is simpler, there is no reason to give them a pass on being transparent. It’s the right thing to do, and they should be doing this voluntarily if they value their customers. Alas, they see their customers as self-loading cargo that just causes them trouble.

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            1. 

               KT

               Aug 5, 2014 at 2:12 pm

               All the customer has to do is not purchase it when they see the taxes and fees. It’s not like they have a gun to their head once they get to the checkout screen.

               Reply
         2. 

            tharanga

            Aug 5, 2014 at 8:24 pm

            “They didn’t ask for [the TSA], the government decided it was required. ”

            Is it really that simple? I thought the airlines were quietly happy to let the government take on that chore. In the event of a terrorist attack, it reduces an airline’s risk of getting sued and having to pay huge amounts of money for not providing adequate security.

            As for the other topics – it is possible to have a factually-based discussion on how much funding for the FAA and aviation infrastructure come from general revenue as opposed to Airport/Airway Trust Fund and user fees/taxes.

            And whether you like the TSA as it currently exists or not, that has to be part of the conversation, though I would break it out as a separate part of the puzzle (and being part of DHS and not DOT, it should be easy to keep it separate)

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5. 

   A

   Aug 5, 2014 at 7:06 am

   I totally get why airlines want to break out the taxes from the airfare…they want to make the gov’t the bad guy, not the airlines, and I would totally support it under one condition – If the airlines would dump add-on fees and sell an all-inclusive fare + taxes, i.e. no baggage fee, no aisle seat fee, no peanut and coke fee, etc. Just a fare for your seat class + taxes, that’s it. Instead today we get the bundled fare w/taxes and then all the ancillary fees which further jack up the cost. Adding more layers to the pricing pie is not productive to the airlines in my opinion. I think if passengers start comparing taxes to baggage fees there could be a backfire.

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6. 

   Oliver

   Aug 5, 2014 at 7:20 am

   Just one word: fuel surcharge

   As long as the industry uses trickery such as fuel surcharges that have nothing to do with the cost of fuel they have no credibility.

   And for what it’s worth, I reward hotels that try to extract hidden resort fees by staying at the competition. Let’s just say I don’t like to do business with people who think they can trick me.

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   1. 

      Wet Coaster

      Aug 5, 2014 at 9:05 am

      Oliver, you absolutely nailed it.

      The airlines (international especially) take the position that a fuel surcharge is a fee, which in my opinion is ridiculous. At the very least, fuel surcharges should be included in the base fare.

      Reply
   2. 

      CF

      Aug 5, 2014 at 9:40 am

      Oliver – First, that’s two words. Second, this is one of those myths that simply has no legs. Airlines have included fuel surcharges in the advertised base price for a decade or more. It has nothing to do with this rule at all.

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      1. 

         Oliver

         Aug 5, 2014 at 1:10 pm

         Cranky, I don’t recall when they started including YQ in advertised pricing, but it certainly wasn’t always the case. And even today they use YQ to screw their customers when it comes to “free” award tickets. Unrelated to the rev ticket issue at hand, perhaps, but it just illustrates the principle. Clearly a business that truly values its customers would treat them differently. I’d like to believe that you don’t treat the Cranky Concierge customers to hidden fees and surcharges.

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         1. 

            CF

            Aug 5, 2014 at 1:27 pm

            Oliver – Well, talking about the US government only here, it’s been over a decade. Here’s a memo from January 2001 requiring it to be included in the advertised price.

            http://www.dot.gov/sites/dot.dev/files/docs/20010118.pdf

            Specifically, it notes the only things that can be broken out:

            “In accordance with this enforcement case precedent, the Department has allowed taxes and fees collected by carriers and other sellers of air transportation, such as passenger facility charges (PFCs) and departure taxes, to be stated separately in fare advertisements so long as the charges are levied by a government entity, are not ad valorem in nature, are collected on a per-passenger basis, and their existence and amount are clearly indicated in the advertisement so that the consumer can determine the full fare to be paid.”

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7. 

   David SF eastbay

   Aug 5, 2014 at 7:49 am

   Some people say sales tax should be included in all prices for all businesses, but that would be impossible to do since not every place has the same tax amount. I go down the street and I’m in a different city that has a different sales tax then mine. No business could ever advertise prices since they would have to print a different ad for every single city with a different tax.

   For air fares you can’t include every tax since a nonstop flight would have different ‘other’ taxes then a single connecting flight which will have different ‘other’ taxes then a double connecting flight, etc.. International travel is even harder since each country and each via/transit country can have its own taxes that would apply and for some counries cities within the same country can have different taxes.

   Airlines should only have to show the air fare they keep and add on fees that go to them and then explain all the government taxes once the routing is decided and the total is shown and before the travelers pays for the ticket.

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8. 

   Southeasterner

   Aug 5, 2014 at 8:16 am

   “this isn’t all paying for security. A third of it is going directly to reducing the federal deficit.”

   Umm wasn’t a big chunk of our federal deficit related to “security” and two wars that have cost hundreds of billions of dollars? At least that’s what Bush and Obama told us when they were spending the money with 80% + Approval ratings. Remember it was the first time in modern history in any OECD country that taxes were decreased during a war, not once but twice. If the government can’t raise gas taxes, income taxes, property taxes, corporate taxes, or close tax loopholes what would be your alternative? The aviation sector doesn’t stand a chance against big oil, big banking, or big health care when it comes to lobbying in DC.

   As the wars were largely based on terrorist attacks on our civil aviation sector it seems appropriate that some of the tax revenue from aviation is going back to pay off China for loaning us money to bomb Iraq.

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9. 

   Nick

   Aug 5, 2014 at 9:40 am

   If anything, aviation taxes should be higher. They don’t reflect the costs of carbon pollution from air travel, which is incredibly high compared to other forms of public transportation. Furthermore, the benefits of this carbon pollution are given disproportionately to people with higher incomes who can afford to travel by plane. I think there should be some public subsidy to aviation because it has benefits to the economy (although some of these are offset by its environmental costs) and to national security, but I still don’t think the aviation industry is paying its true costs.

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   1. 

      AlexJ

      Aug 5, 2014 at 11:46 am

      Actually air travel is not “incredibly high” compared to other forms of public transit. Trains, for example, can be worse than planes:

      http://www.newscientist.com/article/dn17260-train-can-be-worse-for-climate-than-plane.html#.U-EmGtJdXTo

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      1. 

         Nick

         Aug 6, 2014 at 10:10 am

         Per mile, you’re right. The studies are somewhat conflicting, but there’s a decent argument that air travel is comparable to trains at least if the trains aren’t too full.

         But the bigger concern is that aviation makes long distance travel much easier than other forms of transportation. Moving people that far has substantial environmental (and thus, economic) costs. Those costs may be worth it, but they should be priced into a ticket.

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10. 

    Ricardo V. Pilon

    Aug 5, 2014 at 9:44 am

    Good piece Cranky

    I think in the end it’s too hard to fight this beast. And while I agree that all these taxes do not benefit global trade or society in general because it impacts on how often we can meet socially or for business purposes, we have a love/hate thing going.

    In the end, governments will support us in extreme circumstances and we need the intelligences agencies to work together to keep our skies safe. That way, we can prevent horrific disasters like MH17.

    I’ll pay the taxes, but it has to be put to good use. That’s the problem.

    Ricardo V. Pilon

    Reply
11. 

    Michele McDonald

    Aug 5, 2014 at 11:23 am

    Shortly before the ad rule went into effect, I was shopping for a roundtrip to AMS. I was presented with a roundtrip fare of less than $300 in great big type. In wee teeny type that I almost overlooked was the total: More than $700. I did a little research and learned that the airline was tacking on an “international surcharge.” I was plenty peeved already, but what would have been worse — and what would be legal if this bill were to pass the Senate — was if they’d dropped the total on me after I had gone through the whole shopping process and was ready to hit the purchase button.

    The airlines have a great track record for self-inflicted wounds. Somebody has to save them from themselves.

    And no, I did not buy the ticket. I was that annoyed.

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    1. 

       CF

       Aug 5, 2014 at 11:29 am

       Michele – What site was that on? Because it would have certainly been illegal. Airlines haven’t been able to advertise prices without mandatory carrier-imposed surcharges for years.

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       1. 

          Michele McDonald

          Aug 5, 2014 at 12:08 pm

          It was years — before the current rule went into effect. I just meant it as an example of how airlines shoot themselves in the foot. If they get this bill passed — and I think there’s been enough bad publicity that the Senate won’t touch it with a pole — they would go back to being as stupid as they can be. They’ll alienate 1,000 good customers in the hope of duping one poor sap.

          I think I’m the cranky one today.

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          1. 

             Oliver

             Aug 5, 2014 at 1:15 pm

             Lots of us are the Crankies today, Michele. :)

             I am perfectly happy to pay a fair price for a decent product. But don’t try to trick me into buying something. Treat me fairly and with respect. Don’t show me a one-one fare and tell me in fine print that I actually can’t buy it at that price unless I also buy the return ticket.

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12. 

    Tim L.

    Aug 5, 2014 at 11:55 am

    Hey Cranky – I support your contention that the airlines need to pick their battles carefully. I have now seen letters from their Presidents in the inflight magazines of both United and American complaining about how overtaxed their companies are and how they want to repeal the Transparent Airfares Act. My response to each of them: Get over it! The commercial aviation industry is (and has been) a high tax environment. (The beer industry also is a high tax environment…I do not see letters from the President of Anhauser Busch whining about that environment!) That will not change…neither here nor in foreign countries! Smisek and Parker: Go work on improving customer service and focus on your business. No one likes a whiner!

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    1. 

       Michele McDonald

       Aug 5, 2014 at 12:15 pm

       http://www.craftbrewingbusiness.com/business-marketing/anheuser-busch-inbev-spending-millions-lobby-excise-tax-laws/

       I live in St. Louis. Trust me, the beer guys whine.

       Reply
13. 

    Jim

    Aug 5, 2014 at 3:21 pm

    When you consider the costs that the government incurs in operating the airports, paying for air traffic control, bailing out the airlines after 9/11, subsidizing EAS flights, and so on, airlines are actually undertaxed. If anything, the government should raise the taxes to make sure that people who don’t fly aren’t subsidizing those who do.

    Taxes are a fact of life. If you don’t want to pay taxes, move to the Siberian jungle and live off the grid in a hut with a thatched roof. But if you want to take advantage of the services that the government offers, you need to pay your share of the cost and quit complaining.

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14. 

    Ron

    Aug 5, 2014 at 3:30 pm

    Most of what I wanted to say has already been articulated by other people, so I’ll just add one small point: comparing the airlines to hotels and rental cars is largely irrelevant, because people typically don’t compare one against the other. Theoretically perhaps this could happen — while planning a vacation, I might consider renting a car locally and driving to a resort as opposed to flying somewhere, using public transit and bumming on a friend’s couch. But this is the exception. By and large people compare flights to flights, cars to cars, and accommodations to accommodations. And here in the U.S., there’s rarely a viable alternative to air transport, other than driving (where one of the major expenses, gasoline, is advertised inclusive of taxes), and in some parts of the country rail or bus (again, advertised inclusive of taxes). So the lack of disclosure in hotels and rental cars is not a valid argument against disclusure of taxes in air fare.

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15. 

    Scott

    Aug 5, 2014 at 5:55 pm

    I don’t think there’s necessarily a difference between what A4A is doing and what CF recommends they focus on… it’s just part of a larger strategy. A4A’s point — its purpose for pushing the bill — is that it believes so long as airlines must include all taxes and fees in their advertised prices, travelers will not understand how much tax is collected on air travel. This legislative push is sort of a “first step” in a larger campaign to advocate for tax reform… by first maximizing visibility of the taxes, they then hope to go drum-up grassroots support and capitalize on that “outrage” to push for tax reform.

    Reply
16. 

    CZBB

    Aug 5, 2014 at 6:30 pm

    If you think that Spirit are transparent, I’ve got some swampland to sell you.

    Let’s look at how they lie on the little screen shots you captured:

    LAX-LAS: They claim fuel $16.69

    Now let’s look at the financials for their latest quarter
    http://ir.spirit.com/secfiling.cfm?filingID=1498710-14-115&CIK=1498710

    Available Seat Miles: 4,008,507,000
    Fuel Cost: $154,852,000
    from this we work out fuel cost per ASM of $0.039;
    adjusted for an 87.5% load factor that’s $0.044/ASM

    Now against the published distance (because financials are based on published distances): LAX-LAS; 236 miles, or a fuel cost of $10.38.

    yet, their website says fuel cost $16.69.

    They’re only lying by a good 60% overtop of the actual cost.

    Reply
    1. 

       CF

       Aug 6, 2014 at 10:29 am

       CZBB – While I personally don’t care if Spirit shows fuel broken out or not (It’s just a gimmick anyway), I will point out that your calculation isn’t exactly correct. Aircraft burn a lot more fuel on takeoff than during cruise, and unless it’s a continuous descent approach, they can burn more on landing as well, so on a short flight like this, you would expect a higher fuel burn per ASM than on a long flight. Do I know if it’s $16.69? Nope. Nor does Spirit really, since when you buy this, it’s far in advance of when they actually buy the fuel. But my guess is that it’s not as far off as you suggest.

       Reply
17. 

    tharanga

    Aug 5, 2014 at 8:01 pm

    I’ll agree with some others here.

    First, when it comes to goods and services where there is tax beyond or instead of the usual state sales tax, it really isn’t that unusual for the taxes to be included in the advertised price. Gasoline, alcohol and tobacco products all come to mind.

    Second, things are working out just fine. The customer sees the full price in the advertisement. The airlines can show the breakout of taxes and fees on their website. The airline can draw attention to that breakout. This combination is pretty optimal I think – the different pieces of information are given to the customer in ways and times that are relevant and useful. For the airlines to try to mess with this situation is indeed customer unfriendly, and rather disingenuous, given that the airlines are free to show the breakout. I wonder if a few people in the airline lobby just have some personal hangups and can’t keep themselves from fighting the wrong battle.

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18. 

    Jason Steele

    Aug 6, 2014 at 8:02 am

    Don’t you think the airlines lack credibility when they complain about others charging fees? Oh the irony, when added fees seems to be their entire business model these days!

    Reply
19. 

    JayB

    Aug 6, 2014 at 1:48 pm

    Cost of air travel, cost of hotels, cost of rental car. Why not level the playing field and have them all regulated by one agency, the Federal Trade Commission. DOT, do we need it? And, too much tax? Like what would be a reasonable level of taxtion on air travel?

    Surely, there are airlines that would love to advertise $1.00 fares to every place in the country. A small asterisk, of course: “Additional fees and other things may [meaning, they absolulely will] apply.” The government’s fault, of course!

    Hotels, I guess, could advertise, nightly prices of $1.00 a day. Rental cars, the same, but I doubt that the Federal trade Commission would allow it. Still, those pesky hotel sevice fees, those daily rental car customer facility charges, those daily vehicle license fees, those percent airport access fees, really add up and I, for one, have no idea what they’re for. Of couse, gasoline stations should be able to advertise: “Gasoline–2 cents a gallon, additional…well you know.”

    Should DOT be involved in anything related to air travel? Whatever it does, the airlines will complain about it. This is an industry that given de-regulation, came up with a fare structure the likes of which I will never understand, except to know, beware, you’re about to be screwed!

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20. 

    tharanga

    Aug 6, 2014 at 4:28 pm

    I’m actually surprised Spirit hasn’t tried listing $1 fares, with $60, impossible-to-avoid, usage fees or convenience fees tacked on. I think there would be a tax advantage to that.

    Reply
    1. 

       Jason Steele

       Aug 7, 2014 at 11:35 am

       BA already does so regularly on short-haul flights. I once priced out an economy fare of 3 pounds, with a total price of 92.63. http://thepointsguy.com/2014/05/how-to-use-british-airways-avios-to-book-eurostar-awards/

       Reply
21. 

    Billy

    Aug 11, 2014 at 8:27 am

    Interesting that in the example above, Spirit’s fuel surcharge is higher than the government tax.

    To further complicate things, I note that the fuel surcharge on one flight is “FREE” – making me think this surcharge can be switched on and off to suit the airline.

    Further, when I check a flight for tomorrow, the tax portion is 19%, not 58%. On other routes it’s far lower.

    Living in the UK, I don’t really ‘get’ why pricing in US hides unavoidable charges, whether that’s in shops or booking a hotel room. But I don’t go the US that often so it’s more of an inconvenience than anything else.

    When a light is shown on the issue, I think it’s a real shame that the aviation industry hasn’t picked the roll of consumer champion – what an opportunity to highlight all the discrepancies in the travel business.

    Saying ‘That’s Not Fare.’ doesn’t cut the mustard. Sorry, fair.

    Reply

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