Are you familiar with the Transparent Airfares Act of 2014?
The proposed bill in Congress would allow airlines to go back to the practice of advertising their airfares without taxes. So a carrier could advertise a $99 fare online, but then customers would be hit with additional taxes. The actual ticket would cost a good deal more than the advertised price.
I’m no Washington, D.C. insider, so I can’t tell you if the bill, introduced by Rep. Bill Shuster (R-Penn.) has a chance of becoming law. I do know that Airlines 4 America, the trade group for major airlines, including American, Delta, Southwest and United, supports it.
On April 9, the House Transportation and Infrastructure Committee moved to support the bill.
“We thank Chairman Shuster and Representative DeFazio (D, Ore.) for their leadership in promoting government transparency, protecting customers and holding Washington accountable for the taxes they impose on air travel,” “A4A President and CEO Nicholas E. Calio said a statement after the committee moved the bill.
This would essentially move the industry back to where it was prior to 2012, when the DOT instigated a rule requiring airlines to include all taxes and fees in their advertised fare. The goal then was transparency.
But here’s the airline industry’s argument. It believes it is unfairly taxed, and it argues that current rules hide this fact from the public. The industry gives as an example a $300 airplane ticket. On that ticket, airlines say the consumer pays $61 in federal taxes, or about 20 percent. Because the government has raised the TSA passenger security tax starting in July, that number will soon rise to $63. The airlines also argue that few other industries have similar advertising rules. Other than gas stations, can you name an industry that advertises an all-in-one price?
The airline industry is suggesting that if the public is more aware of these taxes, people might begin to push back against them. Others, however, believe this is part of a ploy among airlines to raise ticket prices. What do you think?