DOT proposes tightening air fare advertising practices

Washington DC
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A proposed rule change announced this week by the US DOT will clamp down on air fare advertising practices that the department considers deceptive or confusing.

The proposed rule would require advertisers to include all mandatory fees in advertised air fares so that they can be clearly interpreted by consumers.

"Our objective is to ensure that consumers not be deceived or confused about the total fare they must pay, which we believe can best be ensured by requiring that consumers be able to see clearly the entire price of the air transportation being advertised," reads the proposed DOT rule change. It further states that passengers should not have to "wade through a myriad of footnotes and hyperlinks" in order to establish the real fare.

The DOT also expresses concern about ancillary fees, which have found increasing favor among airlines trying to add to the bottom line. These include items such as added fees for baggage, seat assignments, food or priority boarding. Based on some advertisements, the DOT has determined that the consumer "is deemed to have accepted" unless he or she affirmatively opts out of the service and related charges.

"In some cases the option services and accompanying charges for those services is pre-selected and added to the total fare without the consumer affirmatively choosing those optional services or fees," according to the DOT.

But the fact that the industry can't strike a "better balance between standard fares and ancillary fees" demonstrates the hypercometive nature of the industry, says Bill Swellbar, an MIT airline researcher. "The consumer has been the only winner among many stakeholders since the US industry was deregulated and that continues today."

The rule change would require carriers to provide clear directions for a consumer to opt out of accepting the ancillary product before it is added to the total airfare price. Consumers often don't realize that some of these ancillary products require additional fees, the DOT concludes.

"Given the amount of attention ancillary fees being charged has received, I find it is hard to believe that passengers are not aware that there are fees involved for checked bags etc.," Swellbar tells ATI. "If they want a better seat, then the passenger had the option to pay or not to pay when they booked the ticket."

Also, DOT wants to change the policy on the way airlines advertise one-way fares. Currently airlines are permitted to advertise fares as one-way though a roundtrip must be purchased to obtain the stated fare. The DOT rule would preclude "carriers from referring to such fares as 'one-way' which they are not".

A spokesman for the Air Transport Association, which represents major US carriers, had no comment at this time. "We are still studying to better understand the concerns of our carriers."

But Swellbar defends the airlines, noting that the government is ignoring the fact that the industry lost more than $60 billion over the past decade.

"The government acting as a consumer cop and imposing needless regulation on the industry stands in the way of an industry searching for ways to improve its bottom line," he says. "A healthy industry is what the consumer needs. The consumer does not need a government imposing its will by creating yet another make work project for airlines."