Schumer Reveals: Airlines Seek New Rules To Disguise True Cost Of Tickets Adding Fuel Charges, Airport Fees, Other Surcharges At Very End, Ticket Listed For $300 Could Ultimately Cost $500
Airline Seeking DOT Permission To Implement This Scheme; Senator Calls on Department of Transportation to Tighten Rules Instead to Include Full Disclosure Senator: In Light of All-Time Record for Passenger Traffic in 2005 at LaGuardia, JFK and Newark, Deceptive Pricing the Last Thing New York Needs
U.S. Senator Charles E. Schumer today revealed that major commercial airlines in the United States are lobbying to loosen advertising restrictions, which could lead to misleading prices for consumers. Currently airlines have to advertise the full fare for ticket prices, and are allowed advertise certain government mandated taxes and fees separately. Under the proposed regulation change supported by the legacy carriers, the airlines would be permitted to unbundle fares and define fees as they wish.
The bottom line is consumers shouldnt get hit like a ton of bricks with hidden fees when they buy their airplane tickets online, Schumer said. Consumers need protection now more than ever and weakening the rules for airline ticket advertising is hanging them out to dry, plain and simple.
According to Schumer, an airline could advertise a $300 round trip from New York City to Tampa and omit a $120 fuel surcharge, a $80 labor surcharge, and the other government taxes and fees, leaving the customer with a ticket over $500 that the consumer wouldnt be fully aware of until they were about to hit purchase. This would make comparison shopping over the internet virtually impossible, and would permit airlines to deceptively advertise low fares while still charging the same prices. Schumer called on the Department of Transportation to deny this proposed rule change, and modify existing rules to ensure full, prominent disclosure of true cost of airline fares.
In his letter to Secretary Mineta, Schumer said:
Since 9/11, we have worked hard together to rebuild confidence in the airline industry. Fortyseven million Americans bought travel online in 2005, up seven million more than in 2004, according to PhoCusWright, a Connecticutbased travel research firm. Travelers will spend about $79 billion online for leisure and selfbooked business travel. I am concerned that growth in this industry could be stymied if airlines are able to advertise misleading fares&Overall, I think this would be a setback to an already shaky airline industry and urge you to abandon this rule change.
According to the Department of Transportation, it is considering amending its rule on price advertising. Under the existing rule, DOT considers any advertisement that states a price for air transportation that is not the total price the consumer will have to pay to be deceptive and violates the a 1984 statute under which this provision was adopted. Although the Department has not officially changed the rule, it currently allow exceptions for certain taxes, fees, and other charges that are imposed by a government entity.
Until now, the DOT has consistently prohibited airlines or other airplane ticket vendors from breaking out other cost elements, like fuel surcharges, from the advertised fare. Thought the Transportation Department has denied a recent request to allow separate listing of the fuel surcharges that carriers are adopting in response to soaring fuel costs, it is reexamining the fareadvertising rule and its enforcement policy. The four options it is considering are: Maintain the current practice either with or without codifying all of its elements in the rule; end the exception for governmentimposed charges and enforce the rule as written; revise the rule to eliminate most or all requirements for airfare advertisements but to require that consumers be apprised of the total purchase price before the purchase is made; or eliminate the fullfare advertising rule in its entirety.
Schumer noted that with the increased passenger traffic at New Yorks three major airports, it would be an unfortunate time to start to have a decline in consumer confidence in the airline industry and in getting fast, accurate fares and tickets online.
The most popular form of travel booking is online. Nearly 50 percent of airline ticket sales and reservations conducted exclusively online during the first six months of 2005. Fortyseven million Americans bought travel online in 2005, up 7 million more than in 2004, according to PhoCusWright, a Connecticutbased travel research firm. Travelers will spend about $79 billion online for leisure and selfbooked business travel according to them.
John F. Kennedy International, Newark Liberty International and LaGuardia airports handled about 100 million passengers in 2005 according to the Port Authority, setting a new annual record for passenger traffic at the regions three major airports. The Port Authoritys airports handled more passengers than any other airport system in the nation in 2005. The Port Authority anticipates continued growth in passenger traffic in 2006, as the agencys airport analysts project a total of more than 102.5 million passengers this year.
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