Christopher Elliott jumps the gun in his “Airlines add surcharges” post. The U.S. Department of Transportation is reconsidering how airlines advertise their fares. Right now, airlines are required to include self-imposed items like fuel surcharges in the advertised base price, and are only allowed to exclude government-mandated taxes and fees. So you;ll see a fare advertised as $179 round trip (plus taxes and fees), which means the ticket will likely cost $199 if it’s nonstop. Since the extras are all government-imposed, this is legit under the current rule.
Now, the DOT is considering weakening this rule. Elliott’s headline is a bit premature. But he is right to warn readers that changes may be afoot. And they won’t be positive. In the extreme, an airline could advertise $1 fares (plus taxes and fees), but the price could be the same $199 you paid earlier ($1 base fare, $20 in government taxes/fees, and $178 in fuel surcharges…)
While Elliott is right that this seems like a dumb idea — it makes prices LESS transparent, not more — it may be much ado about nothing. The effect on consumers buying tickets on the internet may be minimal. When you search the major booking sites, you are quoted the total fare, including all fees. (One exception is Travelocity’s flexible date search, where fares are ranked by the base fare, before taxes/fees.) So the net change for online booking may be nil.
In the end, newspaper advertisements may end up being the most misleading.
What concerns me more is how this rule might affect the fees associated with frequent flyer mile redemptions. Right now, when you cash in miles, you pay a small amount in taxes. If fuel surcharges can be parsed out under the proposed DOT rule, then the airlines might tack them on to the frequent flyer tickets as well. That could potentially devalue the miles a great deal.


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March 4th, 2007 at 12:19 pm
[...] The editorial builds on the recent article by Jeff Bailey and Christopher Elliott on the subject (and which I addressed here. This recent (uniformly negative) attention to the proposed regulation change will hopefully make the change less likely. [...]
March 9th, 2007 at 9:34 pm
[...] on innumerable surcharges is seeing opposition in the Senate. (See earlier posts on the subject here and [...]