Consumer travel alliance

The battle between the airlines and consumer groups, such as the Consumer Travel Alliance, about whether or not passengers will be told the full price of transportation including baggage fees and other obscure ancillary fees is still raging on Capitol Hill.

Sen. Menendez (D-NJ), one of the stalwarts fighting for ancillary fee disclosure has joined with five other Senators stating that current system makes consumer comparison shopping impossible. He and his colleagues urge the Secretary of Department of Transportation (DOT) to move forward with a rulemaking that will reveal the true costs of travel for the American public.

The airlines are still resisting attempts to have them tell passengers the true costs of baggage fees before they purchase airline tickets.

Even afterwards, the airlines now claim that the baggage fee issue is too complex to be added to passengers’ itineraries, even after they have purchased their tickets. Though a rule instituted by DOT mandates that each itinerary should include specific baggage charges for each passenger, airlines claim that their computer systems cannot complete the calculations because there are too many variables such as frequent flier memberships, credit card used and passenger record rules. They have requested another extension to the new rule.

Sen. Menendez last week sent an extraordinary, hard-hitting letter to Secretary Ray LaHood at DOT asking for a rulemaking to promote a system that is “transparent and facilitates total price comparisons.”

Sen. Menendez’s letter, signed also by Senators Charles E. Schumer (D-NY), Benjamin L. Cardin (D-MD), Frank R. Lautenberg (D-NJ), Maria Cantwell (D-WA), Barbara Boxer (D-CA), Ron Wyden (D-OR), Mark L. Pryor (D-AR), Mary L. Landrieu (D-LA) and Max Baucus (D-MT) and the accompanying press release is comprehensive and forceful. It follows here and the full letter follows at the end of the post, or can be downloaded in pdf format by clicking here..


Newark, NJ — On the busiest travel day of the year, U.S. Senator Robert Menendez, who has led the charge in protecting consumers from hidden airline fees, called for increased transparency from airlines about each and every fee associated with a ticket prior to purchase. In a letter to U.S. Department of Transportation (DOT) Secretary Ray LaHood, Menendez, along with several colleagues, urged that requirements be included in new rules currently being drafted that all fees be up front, up to date, available at the time of purchase and allow for meaningful comparison shopping by consumers.

“It is incredibly frustrating – especially when trying to save money on travel – to purchase an airline ticket at a decent price today only to show up at the check-in counter next week and be hit with a bunch of fees unknown or unseen at the time of purchase,” said Menendez during a press conference today inside a Newark Airport terminal. “Quality comparison shopping for airline ticket prices shouldn’t be a guessing game, it should be a guarantee.”

In a letter sent today to DOT Secretary LaHood and signed by several senate colleagues, Menendez outlined 3 areas that must be addressed in new rules being drafted by the department that will help consumers make the best choices when planning travel and purchasing airline tickets. He wrote:

“First, airline fees must be transparent. If consumers are expected to pay fees for services that have historically been included in the base fare, then at the very least, they should be informed of all of the fees and their cost before they purchase the ticket…including baggage, seating, boarding, as well as taxes and any other fees before they make their purchase.

“Second, passengers should be able to pay for services that have historically been included in the base fare regardless of when and where they book their ticket. Passengers often book tickets weeks or even months in advance…[and] are surprised to find that by the time they actually fly, the fees for core services have increased.

“Third, airlines must make every effort to keep information on fees up to date. Consumers need real-time information about airline fees in order to make informed choices at the time of purchase.”

Background

This chart shows that a ticket purchased from Airline A, between Newark Liberty International airport and BWI airport near Baltimore, appears to be $21 dollars cheaper than Airline B’s ticket between the same two cities on the same day. That would lead many consumers to purchase Airline A’s ticket. However, the advertised fare does not factor in both airlines’ hidden fees. Airline A charges $120 roundtrip to check in 2 regular sized bags, and up to an additional $500 roundtrip to travel with your pet. That’s an added total of $620.00 in fees. Airline B allows you to check 2 bags for free, and only

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charges $150 to travel with your pet. That’s $150 in fees for the same service that Airline A charges you $620 for. At the end of the day, Airline A’s ticket costs $805.50, while Airline B’s ticket costs only $365.40.

The Problem

Airline consumers are often left in the dark when trying to figure out what hidden fees may apply to their ticket. Airlines often bury this information in confusing fine print or even change their fees after a consumer has purchased a ticket. Given the sheer number of fees airlines charge, it is simply too difficult for most consumers to figure out the math to determine what airline has the best deal – or if the deals can change even after purchase. As a result, air travelers are unable to truly comparison shop.

Just check out the disclaimer on a well-known on-line ticket provider that accompanies a list of fees:

    “The table below shows additional fees that may be added for travel on major US airlines. Please note, this list may not include every fee and may not be 100% accurate. We sincerely apologize for any unforeseen angry muttering at the check-in counter. Also note, the baggage fees below are for one-way economy class flights (double for round-trip flights) for travel within the US. In some instances, these fees also may apply to travel between the US and Puerto Rico, the U.S. Virgin Islands and Canada. And, yes, there will be a test on this later. Airline fees can be a wily bunch: they change rapidly and can vary by seat assignment, destination, military status, frequent flier status and other exceptions. Also, there are additional fees for overweight or oversized luggage. (Leave the bowling balls at home.) If you’re flying a codeshare itinerary, review the fees for the airline operating the flight. Be sure to double-check the airline websites for full details on additional fees. (Oh, now we tell you.)” http://www.kayak.com/airline-fees

Clear Airfares Act

Senator Menendez’s Clear Airfares Act requires online airline ticket customers to have access to all ancillary fee information before they purchase a ticket or even enter personal information. This means providing consumers with a complete and understandable listing of total airfare charges, as well as any other possible fees that may be incurred on the flight (including: baggage, meals, blankets, headsets, changing reservations, changing seats, or extra legroom). Senator Menendez secured passage in the Senate of the Clear Airfares Act as part of the FAA Reauthorization Bill the last two Congresses. Unfortunately, the FAA Reauthorization bill did not become law last Congress and has been unable to clear a Conference Committee between the House and Senate this Congress.

April 25, 2011 Department of Transportation Rulemaking

Partially in response to the Clear Airfares Act and a Menendez-led letter to the DOT, earlier this year the US Department of Transportation (USDOT) announced new rules for airlines that will require the full and upfront disclosure of any additional fees on their websites and advertisements.

Today: Current Rulemaking

Now DOT is determining exactly how airlines and ticket agents must disclose fee information. DOT’s proposed rule is expected early next year. Senator Menendez and several colleagues wrote to Secretary LaHood today asking that these rules require that all fees are transparent, available at the time of purchase, make every effort to ensure that the fee information is current, and allow for meaningful comparison shopping at all points of sale.

Here is the text of the full letter:

    November 23, 2011

    Dear Secretary LaHood,

    We write in regards to the efforts of the Department of Transportation (DOT) to improve the experience of all consumers when purchasing airline tickets. We support the DOT’s efforts to eliminate confusing, hidden fees that often increase the cost of air travel, and promote a system that is transparent and facilitates total price comparisons. We also support your efforts to make sure that airlines provide greater accommodations for individuals with disabilities in air travel by requiring them to develop websites that are accessible to individuals with disabilities. You have made significant strides in these areas as evidenced by your recent supplemental notice of proposed rulemaking and changes that went into effect this past August which mandate airlines disclose all fees for optional services through a prominent link on their websites. We hope you will continue working to make certain that shopping for a flight online is as easy

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    as shopping for consumer products.

    We believe that the upcoming rulemaking on airline fee disclosure provides you with a further opportunity to pursue this goal. As you know, earlier this year the DOT decided to defer its rulemaking for addressing the transparency of fees for optional services because more time was needed to collect information. In our view, if airlines are going to impose such fees, they should make every effort to make the fees transparent and available at the time of purchase whether online or from a travel agent; make every effort to ensure that the fee information is current; and support meaningful comparison shopping at all points of sale.

    First, airline fees must be transparent. If consumers are expected to pay fees for services that have historically been included in the base fare, then at the very least, they should be informed of all of the fees and their cost before they purchase the ticket. This would allow the flying public to know the “all-in” price for a flight, including baggage, seating, boarding, as well as taxes and any other fees before they make their purchase.

    Second, passengers should be able to pay for services that have historically been included in the base fare regardless of when and where they book their ticket. Passengers often book tickets weeks or even months in advance. Sometimes these passengers are surprised to find that by the time they actually fly, the fees for core services have increased. If consumers have the ability to pay for these services at the point of purchase, this no longer becomes an issue.

    Third, airlines must make every effort to keep information on fees up to date. The DOT’s April order requires airlines to update a list of services at least every 90 days. Unfortunately, because fees can change more frequently, such a requirement could leave passengers ill-informed about how to compare different flights. Consumers need real-time information about airline fees in order to make informed choices at the time of purchase. As we understand it, such up-to-the-minute updates are technologically feasible and achievable.

    Finally, meaningful comparison shopping has become a necessity for most consumers and is central to encouraging and maintaining healthy, meaningful competition. In determining the actual, final price of a ticket, airlines’ ancillary fees can have a major impact on the overall cost of air travel. While a base fare comparison or ranking among airlines may provide one perspective for a consumer, different fees on services such as baggage can readily lead to completely different positions for the carriers when determining the total cost of a flight for each customer. Without disclosure of all costs, consumers may think they are getting the best price when in reality they are not.

    We thank you for your work and look forward to a rule that will ensure consumers finally have the ability to fairly compare airline ticket prices.

    Sincerely,

    Robert Menendez
    Charles E. Schumer
    Benjamin L. Cardin
    Frank R. Lautenberg
    Maria Cantwell
    Barbara Boxer
    Ron Wyden
    Mark L. Pryor
    Mary L. Landrieu
    Max Baucus

The Consumer Travel Alliance has been working closely with Sen. Menendez’s office staff for more than two years promoting the Clear Airfares Act that is now a part of the Senate version of the FAA reauthorization bill that has been stalled in Congress for more than three years.

Honest, transparent pricing is the lubricant that makes our free market work. As long as airlines attempt to hide the true cost of travel the market system will not work for our airline transportation consumers.

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