What if you could make the call on the proposed merger between American and US Airways?

It’s not a hypothetical question — at least not entirely.

Before you answer, let’s take a look at where we are. This proposed airline merger, which has been called “inevitable” by most observers, will form America’s largest airline. Supporters say it’s a win-win, creating a stronger company with a superior route system that will better serve its customers.

But a recent Consumer Travel Alliance study shows that 761 connecting routes will lose competition if this merger goes through and concludes there are no new benefits for consumers, in terms of airline destinations. The Government Accountability Office has completed an airport-by-airport competitive analysis that will be released within the next few weeks, which is said to come to a similar conclusion.

The US Department of Justice — the agency with a final say-so in the merger — is wrestling with what to do about airline slots in Washington and New York, where the merger will alter the balance of competition. Soon, they’ll also have to give the corporate union their blessing.

Now it’s your turn.

What do you think of the merger? Should the government allow it or not? But beyond that, what are your specific reasons for either letting these two large airlines merge or blocking this corporate marriage?

Your comments matter more than you think. I’ll forward them to the DOJ, which is looking for real feedback from actual air travelers. In other words, what you say here could affect what the government does regarding this merger.

Or, more importantly, doesn’t do.

This is a topic that doesn’t come up very often. In fact, since the Federal Trade Commission (FTC) doesn’t have jurisdiction over airline reservation systems and travel agencies, it has not been part of the overall Internet privacy discussions. Your privacy with airlines exists at the whim of the airlines with little government oversight.

Next week, for the first time, travel privacy will be under the microscope at a hearing being held by the Advisory Committee for Aviation Consumer Protections.

Before saying to yourself, “I don’t care” or, “I don’t have anything to hide,” think about what information you entrust to your travel agent and the airlines. Then, think about what information is collected about you during your travels.

The amount of information collected about the normal traveler is amazing, especially when airline records are mixed with tour operators, hotels, car rental companies and other tourism providers who end up with access to your personal data through your PNR or record locator number that serves as the key to a “seamless” trip.

In reality, your travel data is some of the most sensitive, most intimately revealing, most systematically computerized, most widely dispersed, most globally accessible, and most potentially subject to abuse categories of consumer data. And, it lies outside the current world of privacy protections. It has fallen into a jurisdictional black hole.

Back in 2009, the Consumer Travel Alliance (CTA), together with other consumer groups, tried to bring the power of the FTC into the travel privacy equation. However, it was determined that only Department of Transportation (DOT) had jurisdiction over privacy as it relates to aviation and ticket sellers (travel agents). So, while hotels, rental car companies and cruise lines need to follow privacy guidelines subjected to FTC scrutiny, the airlines and travel agents fall under the jurisdiction of the DOT.

Just last week, Delta Air Lines won dismissal of claims it violated California’s Internet privacy law because the judge decided that privacy was protected by federal preemption. In other words, according to the court ruling, state laws do not apply to airlines, only federal laws and regulations. This makes DOT actions regarding aviation privacy more important and necessary.

Plus, DOT is in a unique position among federal agencies — it wields enforcement authority. Whatever privacy policies airlines and ticket agents agree to or add to their contracts can be enforced with DOT procedures.

The 2009 CTA Petition for inclusion in the privacy roundtables notes the extent of the problem with privacy protection of travel records.

PNR’s and other travel records contain extraordinarily intimate data. PNRs show where you went, when, with whom, for how long, and at whose expense. Behind the closed doors of your hotel room, with a specific person (identified, perhaps, by name, address, gender, data of birth, citizenship, passport or ID number, and credit card number) they show whether you asked for one bed or two.

The petition also noted that these records are “highly vulnerable to unauthorized access.”

Tens of thousands of travel agencies and airline staff in the USA alone, and many times more around the world, have credentials as authorized users of CRSs/GDSs. In many cases, those credentials permit remote login and access to CRS/GDS records via the Internet. Because no logs are normally kept of access to PNRs or customer profiles stored in a CRS/GDS, compromise of a travel agency’s credentials, and unauthorized access using those credentials, could go undetected indefinitely.

More than only collection of data is the issue of what airlines, travel agencies and GDSs do with the personal data that they collect. Should there be some disclosure about how information collected during the reservation process and your travels is to be used. Is it only used to provide better customer service? Or, is it sold to the highest bidder and merged with other Big Data to shape what airfares and ancillary fees different travelers see and what frequent flier benefits travelers received?

Everyone knows that we are living in a far different world today than the world that spawned the Internet revolution just over a decade ago. Data collected at every step of travel research affects the ads we see on the Web. Information gleaned from the reservation process affects what services travelers receive. And methods of payments add another layer of data collection and price differentiation.

Certainly, no one expects the airlines and GDSs to change their privacy policies after one committee meeting, but in Washington change comes is small steps. This meeting is step one on the way to a DOT rule on privacy or aviation records that can merge well with the FTC rules on hotel, car rentals and other forms of transportation and tourism. Every journey starts with a small step. The discussions at the DOT Advisory Committee for Aviation Consumer Protections will be the first time in recent decades that the FTC and DOT will be in the same meeting with airlines, travel agents, GDSs and consumers discussing privacy.

It will be a watershed meeting with both the FTC and DOT in discussions about privacy. Hopefully, this meeting will eventually lead to an aviation sector blueprint of best practices or a voluntary privacy policy that can span the data worlds of airlines, ticket agents, GDSs and the rest of the travel world.

A recent Consumer Travel Alliance (CTA) study shows US Airways (USAir) and American Airlines (AA) routes overlap far more than previously reported, undermining one of the strongest arguments for allowing the two airlines to merge.

While the merger has been positioned by leaders of US Airways and American Airlines as a blending of “complementary” route structures with only 12 overlapping non-stop routes, the CTA study shows that the AA/USAir merger will, in fact, eliminate connecting-flight competition between these airlines on routes between more than 760 markets.

“Consequences to airline competition could be dramatic,” says Charlie Leocha, Director, Consumer Travel Alliance. “Far from being an all-but-benign combination of airline routes, this merger has the potential to clobber competition in hundreds of markets across the country.”

According to the study, 40 percent of American Airlines’ connecting routes have overlap with US Airways and 30 percent of US Airways’ connecting routes overlap with American Airlines. CTA predicts that competition will suffer dramatically when these two airlines merge, leaving other current competitors to compete with a bulked up airline at many non-hub cities. On some connecting routes, competition would be all but eliminated.

“Of course there are only a few non-stop competitive routes, because that is the way hub airlines work. Real competition between network airlines takes place through connecting flights, where these two airlines compete now, but will not after the merger,” notes Leocha.

“The Consumer Travel Alliance study suggests that this does not bode well for consumers as this all but guarantees higher prices between those connecting markets.”

When 30 to 40 percent of competitive routes between two of the four largest airlines in the country disappear in a merger, consumers are sure to face a far less competitive aviation landscape. Here are a some examples from the 761 options where there are competing connecting flights:

• Washington-Reagan (DCA) to Houston (IAH) — US Airways connects in Charlotte with its flights to Houston. American uses Dallas and Chicago for connections to Houston.

• Pittsburgh (PIT) to New Orleans (MSY) — A flight from Pittsburgh to New Orleans on US Airways would connect in Charlotte or Denver and the competing American Airlines would connect in Dallas, Miami or Chicago.

• San Diego (SAN) to Tampa (TPA) — US Airways connects via Charlotte or Phoenix and American Airlines connects via Dallas.

• Albuquerque (ABQ) to Boston (BOS) — US Airways connects in Phoenix and American Airlines connects in Chicago or Dallas.

“The powers that be in Washington at the Department of Justice and in Congress need to take a close look at these connecting markets,” says Leocha. “It is unhealthy for the economy and will be expensive for consumers, both leisure and business, should our aviation sector shrink to only three major network airlines.”

Now is the time for the Department of Justice to examine how this merger between AA and USAir will affect the competitive landscape including both non-stop flights and connecting flights. The Consumer Travel Alliance study demonstrating lost competition on connecting routes needs to be taken into account as this merger is considered and its effect on consumers is analyzed.

While the FAA sequestration fiasco had been brewing, airline and pilot lobbyists together with the Consumer Travel Alliance were furiously working behind the scenes in unprecedented unity to head off what each group saw as a possible pending disaster involving delays and misuse of earmarked aviation system funds.

The Department of Transportation (DOT) and the Federal Aviation Administration (FAA) reacted as though they were in a financial straitjacket. All the while, the administration and the Senate sat on the sidelines waiting to see how public opinion would break; and, the Republican-controlled house came out swinging against any cutbacks claiming DOT and the FAA has all the flexibility to move funds they needed in order to avoid cutbacks in air traffic control schedules.

Airlines, through Airlines for America and pilots unions, began their drumbeat about impending disastrous delays and acute problems with safety. Consumer groups, mainly the Consumer Travel Alliance, piled on with more warning about delays, but with another claim that airline passengers were being robbed of air traffic control services they pay for with earmarked user fees.

Sequestration at the time, was a bit nebulous and restricted to civil servants being forced to take a day off once-a-month or so. No one in America was too excited. Coming cuts weren’t going to be Armageddon.

Then the FAA began to announce cuts. Their first slice at the budget indicated that some air traffic control towers would be shut down and others would be closed during night operations. Now, citizens across the country could easily understand safety and cutbacks in airline service. That was the first bipartisan wake-up call.

Newspapers, both national, regional and local, across the country slammed the FAA for sacrificing safety and on-time airline schedules on a political altar driving higher taxes. Cynical claims that the administration was seeking to extract maximum pain on citizens rather than find non-operational ways to solve the two-and-a-half-cents-on-the-dollar cutback demanded by sequestration began to surface.

Newspaper stories highlighted every airline delay, whether they had anything to do with the sequestration cut or not, were splashed across the front pages of dailies from Portland, Maine, to San Diego, Calif. Business travelers complained about missing meetings. Moms with toddlers talked about their struggles aboard delayed planes. Foreign travelers told tales about circling in holding patterns for hours. Every delay was treated as if it was a direct result of heartless (and worse, mindless) FAA actions.

Then airlines requested formal permission from DOT to keep passengers confined for hours on end aboard aircraft on tarmacs across the country — all because of these air-traffic cutbacks. Our aviation system was teetering on the edge of operational meltdown, an abyss of unknown profundity.

A more dire picture could not have been orchestrated across industry and consumer groups on the ground in Washington and the news media across the country.

On Wednesday, the President’s office released a statement that it would consider a specific bill that could provide flexibility for DOT and FAA budgeting. On Thursday night, the Senate bulled through a bill that ensured that the DOT and FAA clearly had the flexibility they needed. House Republican groused that the bill wasn’t needed, but agreed they would follow the Senate and pass the legislation.

Now, the FAA needs to unwind their sequestration actions and get air traffic schedules back to normal.

If reality be known, air-traffic delays were not disastrous. The FAA managed to keep the system operational despite drastic predictions of massive problems. With self-imposed airline departure cutbacks and air-traffic-controller staffing levels (even with a 10 percent cutback) at more-or-less the same levels as 2000, pre-9/11, there was probably not going to be an aviation-system meltdown.

However, warnings of disaster and stories of what might be, trumped reality. Then again, who knows what might have happened? And, as politicians wisely decided, it is better to find a way to solve a problem before it becomes one.

In the end, the airlines, pilots and consumers got their aviation system off the chopping block and user-fee funding back to being provided to services for which it was intended.

Now, that the common foe of air traffic controller sequestration budget cuts has been vanquished, it is back to work for the Consumer Travel Alliance to make sure that DOT does not grant airlines any waivers to tarmac-delay rules. Or, better yet, that the airlines withdraw their request.

In an audacious request to the Department of Transportation (DOT), Airlines for America (A4A) and the Regional Airline Association (RAA) have requested a temporary exemption from “tarmac-delay regulations for a period of 90 days or until the Federal Aviation Administration (FAA) sequestration furloughs end, whichever is longer…”

The response from the Consumer Travel Alliance (CTA) is, “No exemptions” in the strongest terms.

When asked about the airlines request for this exemption at US Airways’ Media Day, Doug Parker, the airline CEO, dismissed the issue as an “infinitesimally small” issue that, as I understood his remarks, was part of the overall A4A efforts to highlight the need for congressional action regarding the FAA’s sequestration cutback plans.

Several consumer groups will be filing comments with DOT regarding the motion for temporary exemption to the rule.

The consumer groups argue that such an action would add insult to injury by allegedly adding the possibility of tarmac delays to schedule uncertainty for passengers caused by sequestration. A4A and FAA are treating the cuts made by the FAA as Armageddon at the airports.

1. Stranding passengers on the tarmac should be the last effect of sequestration. A4A and RAA should be ashamed that their first action requested from DOT is a moratorium on passenger protections that deal with human dignity and medical issues.

2. America does yet know the real impact of FAA sequester implementation plan. The FAA has said repeatedly that it is trying to mitigate the effects of these personnel furloughs. A look at FlightStats.com shows that delays for the past days since sequestration have not shown a disastrous increase.

Contrary to comments made by A4A and RAA in their motion, the tarmac-delay rules were not implemented only for ad-hoc weather delays. They were implemented to protect passengers from all extraordinary delays, regardless of the reasons. Airline actions since the implementation of the current tarmac-delay rules show that when properly incentivized the airlines can eliminate tarmac delays without extraordinary cancellations.

3. The airlines, if faced with extraordinary delays can work with the tools provided by the current tarmac-delay rules to fine-tune their schedule and implement plans similar to those that they use during periods of inclement weather. Said tools allow for airports to open unused gates, airlines to share access to their gates with code-share partners and take other common-sense actions should there be extraordinary delays.

4. Airlines are operating fewer departures in 2012 than they did in the year 2000. According to Bureau or Labor statistics, the air traffic control system is staffed by about the same number of air traffic controllers and airfield operations specialists in 2012 (even with a 10 percent cut) that it was in 2000.

Consumer organizations expect that the FAA will be able to mitigate massive delays and operate as efficient an air transportation network in the coming months as it operated in 2000 and 2002.

5. Where truly extraordinary circumstances make it necessary for passengers to remain on planes during tarmac delays, DOT under the current rule has the flexibility to make a judgement call regarding fining of air carriers. In no circumstance should DOT provide airlines a carte-blanche exemption from the current regulations.

6. The organizations understand the pressures that airlines will face should sequestration efforts by the FAA result in maximum delays. In fact, CTA has worked closely with airline and pilot organizations in urging the FAA to refrain from implementing its sequestration plan.

Though, the FAA did not allow an appropriate period of preparation for the airlines to react to any possible delays, a moratorium on the tarmac-delay rules is not the proper action. While DOT was obliged to provide advance notice in adopting the tarmac delay rule, a snowstorm does not so announce itself. It is, and should be, the business of airlines to adapt to current air traffic conditions as they find them, without needlessly degrading passenger welfare.

7. Just as A4A and the RAA, consumers were notified on Tuesday April 16, 2013 of the FAA’s plans. Flights have already been purchased. Vacations have already been planned. Airline transportation was purchased in good faith based on reasonable expectations.

Airline actions should be to add flexibility for passengers to make their travels as smooth as possible, not to make advanced plans to keep them stranded on runways. Loosening airline restrictions that limit passengers’ flexibility in order to change flights and travel plans in reaction to possible delays is a consumer-friendly solution. Ironically, several airlines, while petitioning the DOT for more “flexibility,” have announced steep increases in change and cancellation fees that reduce passengers’ flexibility.

8. We find two aspects of the airlines’ request especially distressing. The first is the total illogic of reducing consumer protections against delays at a time when, according to the airlines, delays are more likely to occur. The second is the apparent inability of the airlines to comprehend, even at this late stage, the fundamental purpose of the tarmac delay rule, which is to provide basic, humane treatment for the passengers entrusted to their care.

That is a need that hardly diminishes on account of the present challenge to operations. While suspending the rule and permitting the airlines to confine passengers for periods in excess of three hours might serve the airlines’ business interests, it certainly cannot serve the public interest.

Alternative proposals

CTA proposes that the airlines take actions within their control to allow passengers discretion to respond to the consequences of the FAA’s action by being allowed to make changes to their travel plans as possible delays unfold.

• Airlines should declare a moratorium on change and cancellation fees. Immediately, passengers who have already purchased tickets should be allowed to make changes to their travel plans with no change fees and no cancellation fees. This will allow passengers with “flexibility necessary to help address delays and disruptions caused by the FAA sequestration plan.”

• Airlines should begin to coordinate with airports and their code-share and affiliate partners to plan ahead for disruptions and make sure that passengers can be handled with dignity and not face medical issues caused by lengthy tarmac delays.

• As the crunch days of summer come, if indeed air traffic delays develop, airlines should look at flying fewer flights between some destinations with great capacity rather than clogging the air traffic control system with small regional jets, especially on routes in and out of the NYC airspace where the major carriers use many regional jets rather than full-sized aircraft.

• As the first days of sequestration have shown the country is not faced with chaos and an immediate crisis. Airlines have the ability to make system-wide schedule adjustments for the summer months if it appears that FAA cutbacks are having a significant effect.

• If necessary, the airlines should promptly adjust their advertised schedules and notify the public accordingly.

FAA plans to furlough thousands of air traffic controllers and will purposely delay thousands of flights every day. If the FAA projections are accurate, this unnecessary action will disrupt air travel for millions of Americans, cost jobs and threatens to ground the U.S. economy. It doesn’t have to be that way.

The FAA has the ability to prevent this by making other cost cuts, and declaring air traffic controllers “essential employees.”

Unlike the Transportation Security Administration (TSA), Customs and other agencies, FAA has not acted to minimize potential impacts. For months airlines have been asking for sequestration impact details, but still have no specifics or explanation of methodology except that the FAA expects that a 5 percent sequestration cut will equal 30-40 percent capacity reductions at certain airports. That math simply doesn’t work.

The Consumer Travel Alliance together with the entire aviation industry is committed to doing everything in our power to stop the FAA imposed delays.

We encourage you to join the fight and send a letter to President Obama, Department of Transportation (DOT) Secretary LaHood, Federal Aviation Administration (FAA) Administrator Huerta, and your members of Congress that the Administration should act to end this now through the “DontGroundAmerica.com” campaign and tell them that this plan does not fly. Please encourage your family and friends to do the same.

Passengers, after paying user fees for air traffic control services, are being slammed by the FAA

Despite paying more in taxes to fund the FAA’s air traffic control system than most consumers pay for sin taxes, the FAA has cut back passenger-facing operational funding that will result in control towers being closed, delays at the major airports and a ripple effect that will be felt at airports across the nation.

Department of Transportation Secretary Ray LaHood and Federal Aviation Administration (FAA) Administrator Michael Huerta announced that a five percent budget cut because of sequestration would mean the furloughing of thousands of air traffic controllers and disruptions of the travel plans of millions of the flying public.

“Shame on the FAA for slamming passengers with safety slashing and delay causing cuts to the air traffic control system,” said Charlie Leocha, Director, Consumer Travel Alliance. “This is an unnecessary cut of services for which passengers pay each and every time they fly — we are not getting what we are paying for.”

Specifically, here are the user fees passengers pay:

7.5 percent Excise Tax

9/11 Security Fee = $2.50 per flight number to a maximum of $5 per one-way or $10 per roundtrip

Federal Segment Fee = $3.90 per takeoff or landing (maximum of $15.60)

Passenger Facility Charges (PFCs) = up to $18

When traveling internationally, we have to pay additional user fees to take off and land, to have our passports checked and our luggage inspected for customs.

International Departure Tax = $17.20

International Arrival Tax = $17.20

Immigration user fee = $7

Customs user fee = $5.50

U.S. Animal and Plant Health Inspection Service fee = $5

Airline industry studies show that passengers are taxed at a higher federal rate than alcohol and tobacco. And, now travelers aren’t getting what they are paying earmarked taxes and fees for.

• Since 1990, the number of aviation taxes/fees has increased from six to 17; the total amount of taxes paid by the industry has grown from $3.7 billion to $17 billion over the same period.

• The tax burden on a typical $300 round-trip ticket has nearly tripled since 1972, rising from $22 (7 percent) to $61 (20 percent).

• Annually, airlines and their customers contribute $10 billion to $12 billion to the Airport and Airway Trust Fund; general aviation contributes about $200 million.

• Airlines and their customers already incur $3.4B-$3.8B per year in federally imposed security taxes/fees.

• Plus, the FAA’s budget has increased more than 100 percent over the last 15 years.

House Committee on Transportation and Infrastructure Chairman Bill Shuster (R-PA): noted,

There are $2.7 billion in non-personnel Operations costs that should be examined before FAA personnel are furloughed.

Finding five percent in savings shouldn’t need to significantly impact our nation’s aviation operations. Businesses and families across the country face these issues in their budgets every day without massive impacts. We know that the FAA has the flexibility to reduce costs elsewhere, such as contracts, travel, supplies, and consultants, or to apply furloughs in a manner that better protects the most critical air traffic control facilities. Yet rather than take this approach, the Administration has made choices that appear designed to have the greatest possible impact on the travelling public.

Leocha urges the FAA to take another look at their cuts. “At least keep New York City, Los Angeles and Chicago airspace fully staffed, he notes. “When delays show up in those regions, the domino effect is dramatic across the country according to study after study.”

In the latest Airline Quality Rankings, the airlines seem to be doing a good job. But, statistics don’t tell the whole story. The airlines are flying fewer flights than a decade ago, so on-time arrivals should be better; and lost luggage statistics are dropping, but only because passengers are checking fewer bags.

When it comes to denied boarding compensation or, bumping, as many know it, the stats are not so good with an increase in passengers denied boarding shooting up by almost 25 percent and consumer complaints growing by around 20 percent.

This is how U.S. airlines ranked according to the report.

1. Virgin America
2. JetBlue
3. Air Tran
4. Delta
5. Hawaiian
6. Alaska
7. Frontier
8. Southwest
9. US Airways
10. American
11. American Eagle
12. SkyWest
13. ExpressJet
14. United

There is more than meets the eye when it comes to these figures. The report is based on four main sectors of customer service — on-time performance, lost luggage, denied boarding and consumer complaints.

As noted above, airlines are flying fewer flights than they did in 2000. Fewer bags are being checked since the implementation of checked baggage fees. Complaints are easier today than ever with online forms now provided by DOT. Denied boarding has increased by almost 25 percent this past year.

On-time performance
One has to give airlines credit for running one of the best on-time records since statistics have been being kept. On-time flights reached almost 82 percent in 2012.

However, that record is influenced by the fact that airlines have cut back flights in their drive to reduce capacity to fewer departures than back in 2000 (2012 departures=8,872; 2000 departures=8,952). When the growth of the economy is factored in, having the airline industry shrink rather than grow over the past decade is amazing.

Airlines are flying fewer flights. Air traffic control is not being challenged except in the New York City area on a regular basis. Plus, the number of major airlines has been reduced from 10 back in 2000 to only five today, so there is less competition for choice take-off and landing slots between airlines.

Mishandled Baggage
Though airlines claim that this metric shows better customer service, the real reason the number of mishandled bags per 1,000 passengers has been reduced is because fewer bags are being checked per 1,000 passengers. This has been caused by the broad introduction of baggage fees back in 2008. Any decrease in checked baggage will make the mishandled baggage statistic drop because they are based on total passengers flown rather than on total number of bags checked.

Of the majors Southwest/AirTran comes first in at 2.64 bags mishandled per 1,000 passengers. Delta is second at 2.66 mishandled bags per 1,000 passengers. US Airways is next on the list with 2.7. Merged United/Continental comes is at 3.50. finally, American ranks last among the majors at 3.55 misplaced bags per 1,000 passengers. (A Boeing 737 holds about 150 passengers on average. That means a bag would be lost on about every six flights if everyone were flying 737s.)

Consumer complaints
Here is the kicker. With such good service — on-time arrivals and fewer lost bags — why are passengers complaining more than ever? There are several theories.

• More passengers than ever are being crammed into planes, something like 84 percent load factors.
• Passengers are being charged fees for almost every transaction
• The cost of travel is difficult to figure out and frustrating.
• Bargains and exceptions to fees abound that irritate passengers who pay significantly more than others.
• It is easier than ever to complain using the DOT online airline complaint form.

Perhaps the most important of these is the fact that complaints can be collected online and with great accuracy. In the past, consumers had to call DOT and leave a message that was often incomplete or they had to send a letter to DOT that did not contain all the information necessary to deal with a complaint. Today by filling out the online form, consumers can get action.

Here are the main complaint areas. Note that flight problems lead the list.

Flight Problems 32.7 percent
Reservations, Ticketing, and Boarding 14.6 percent
Customer Service 14.3 percent
Baggage 12.4 percent
Refunds 7.5 percent
Disability 5.8 percent
Fares 4.4 percent
Oversales 3.5 percent
Other 3 percent
Advertising 1.2 percent
Discrimination 0.7 percent
Animals 0 percent

Last week, the Supreme Court declined to hear a case brought forward by a group of airlines challenging new Department of Transportation (DOT) rules requiring them to use the effective full price of airfares including all mandatory taxes, fees and surcharges. In other words, the airlines claimed damages from being told to tell the truth in pricing of air transportation.

This was step one in price transparency
Before this rule went into effect, airlines were actively advertising the cost of travel between Boston and London as $65 one-way or $130 round trip! In reality, no one could purchase a roundtrip ticket between Boston and London for less than $752 at that time.

The $130 price advertised was for “airfare.” It left out other mandatory taxes and fees and, most significantly, the fuel surcharges that all added costs to the trip. However, the airlines felt that this was honest pricing. Airlines saw no case of misleading and deceptive pricing when travel was advertised for $130 and only could be purchased for $752.

Over the past three years, the Consumer Travel Alliance (CTA) worked closely with DOT to craft this truth in travel pricing rule prior to the rule being proposed and with comments filed after the rule was proposed. CTA teamed up with associations representing travel agents, central reservation systems, business travel organizations and hundreds of corporate travel managers to shepherd this rule through the rulemaking process and to answer objections raised by the airlines.

Worse, as the airlines fought the DOT requirement to tell the truth, all the way to the Supreme Court, they claimed in testimony before the Advisory Committee for Aviation Consumer Protections (ACACP) that following these basic rules of honesty cost them more than a billion dollars!

Consumers across the fruited plains are certainly sympathetic with the airlines when they claim that being truthful rather than deceptive and misleading costs the airlines money. I wonder what a study done by the same economists would calculate the costs to consumers of deceptive airline pricing.

The Supreme Court came down on the side of consumers, not unfair and deceptive pricing.

Step two: Transparency of optional ancillary fees

The next step is a DOT ruling that will mandate that airlines release all fees and surcharges so that consumers can compare the full cost of airline travel across airlines everywhere airlines choose to sell their tickets.

Basically, the Consumer Travel Alliance (CTA) has called on airlines who now must by regulations reveal all “mandatory taxes, surcharges and fees,” to begin disclosing other “optional fees” so that consumers can compare, apples-to-apples, the full cost of transportation across airlines.

An NPRM is soon to be released by DOT that will propose just such a regulation. At the same time, IATA, the International Air Transport Association, is proposing a new distribution capability (NDC) that will effectively gut the ability of consumers to comparison shop for airline tickets and create a world of personalized pricing based on loyalty and other characteristics, such as marital status.

The airlines envision a world where there are no fixed everyman tariffs on air travel. They are dreaming of a world where prices will only be served up after passengers reveal personal data that will allow airlines to serve a customized price to their customers and, perhaps, offer additional packages designed to fit each passenger’s personal travel profile.

In their proposal to DOT, IATA admitted that the airlines are not providing consumers adequate information to “make an informed choice.”

Now, more than ever, consumers need protection from the airlines’ marketing dreams. Discounts here and there are fine, but when significant portions of the cost of transportation are withheld by the airlines during the ticketing process and the ability to comparison shop is thwarted, DOT should act.

Today, the “airfare” between Washington and Manchester, NH, for example, might be $160 while baggage fees and seat reservations may add $160 to the final price. In the real world, a 100 percent increase in the cost of travel because of ancillary fees seems significant. Those kinds of fees should be able to be included in comparison-shopping engines.

The airlines claim that their new marketing plans are being hindered by “old” technology. That may be partially true. But, the real roadblock to technological development is the withholding of data. Without transparent and dynamic ancillary fee data, new technology cannot be developed even by state-of-the-art organizations such as Google (no technological slouch).

This next NPRM will propose that airlines disclose their “optional fees.” Consumers won the first round with “mandatory taxes, surcharges and fees” now mandated to be included in advertised prices. Step two will be fulfilled when airlines begin releasing all their pricing data in a dynamic fashion.

The next six months will tell the story. CTA believes that this new rulemaking will set the stage for less deceptive and misleading air travel prices. It is always nice to be able to comparison shop and to know that advertised prices reflect the full cost travel.

Photo: by Mark Fischer Flickr Creative Commons

U.S. Airlines have become, with the notable exception of Southwest, a quagmire of pricing options. One of the most effective ways to obscure the true cost of a product is to offer so many variations that consumers are confused. Airlines have moved in that direction and further. They also are seeking to make the ability to compare prices across airlines next to impossible.

Withholding prices that reflect on the true nature of the airline product is misleading and deceptive. When airlines refuse to disclose the cost of the product they are selling they are being deceptive. When they only release pricing in drips and drabs on some sales platforms, but refuse to disclose the same prices on other sales platforms they are being deceptive and misleading.

The back and forth between consumers and airlines has been going on for more than three years; actually five years. Ever since American Airlines, in 2008, decided to start charging for the first checked bag and “unbundled” that cost, airline consumers have not been able to compare full air travel prices across airlines. Because, when AA removed the cost of a checked bag (that was once part of the airline ticket) they removed it from travel agent screens as well. It was a conscious airline decision to make figuring the full price of travel more difficult.

When the Department of Transportation (DOT) didn’t respond with a firm reprimand to AA about being deceptive and misleading, other airlines began to unbundle everything that was not tied to the airplane. And so, today, we are faced with more than half of the traveling public getting misleading and deceptive airline prices whenever they purchase through a travel agency.

Of course, airlines immediately claim that prices are available on their own websites, but for consumers purchasing their travel through agencies selected by the airlines themselves, in many cases more than half of the specific cost of their travel is not disclosed to these soon-to-be passengers prior to purchase.

In a filing to DOT, the International Air Transport Association (IATA) agrees with the fact that airline passengers cannot know what they are buying without including the ever-growing selection of ancillary fees. These fees, according to IATA are what allow the airlines to differentiate their products from each other.

In the Application for Approval of an Agreement (Resolution 787) by the International Air Transport Association, filed with DOT on 11 March 2012, pages 4-5, the association makes an astounding admission.

Price transparency is no longer enough to make an informed choice — true transparency means disclosing price along with the corresponding product information.

They admit, in an application to DOT that their current sales model is deception and misleading. The airlines admit that, “The marketplace pressure for true price and product transparency is irrefutable.”

Why are they still failing to disclose ancillary fee pricing data that would allow travel agencies, software developers and price comparison engines to develop systems to provide the traveling public a full product price and full comparison shopping across airlines?

With this admission by IATA, DOT should be able to simply mandate that all pricing data needed for consumers to make, in IATA’s words, “an informed choice,” be made available at all venues where the airlines choose to sell their products.

The only impediment to systems that can provide consumers true price transparency is the continued refusal of airlines to disclose their ancillary price data and allow consumers to purchase the entire product in one place. Once this pricing data is released, software developers can begin to change the current airline world of deceptive and misleading pricing and allow the free market to operate once again.

The industry does not need a new technology language requested in the IATA application, there are already standards-setting organizations that work fine. Plus, specific computer language and information technology should certainly not be mandated by industry groups because it will curtail innovation and slow online development.

It is time for DOT to stop pussyfooting around this issue. The airlines have admitted that their current product cannot be properly understood without full disclosure of “corresponding product information.”

DOT should immediately spike this latest application to create an airline controlled online marketplace and mandate that airlines disclose pricing data so that consumers, in IATA’s own words, can “make an informed choice.” And, so that unfettered technological innovation can begin again in the airline world.

Already, this issue has been studied for three years. When both business and leisure consumers complain vociferously that they can no longer compare prices across airlines, nor easily figure out the full cost of travel; and airlines admit that they are withholding passenger-specific pricing data required to make informed choices, it is time for DOT to act decisively.

A requirement for airlines to release full pricing data to all airline ticket buyers is the kind of dramatic mandate that Secretary of Transportation LaHood can make to cement his pro-consumer position and slay the serpent of misleading and deceptive pricing that has slithered into our airline world.

Photo: Server Farm, Flickr Creative Commons, IntelFreePress