Advertised Airline Fares Should Be Fair

Peter DeFazio should take little pride that the House of Representatives recently passed a bill he co-sponsored with Rep. Bill Shuster, a Pennsylvania Republican.   The bill would allow airlines to advertise prices that do not include taxes and fees.  Since taxes and fees can be fairly substantial,  advertised prices  excluding these add-ons will be grossly deceptive. 

During House debate DeFazio ridiculed current legal requirement that advertised fares must show the full amount,  including taxes and fees,  most prominently.  “Talk about the nanny state,”  he said.  “Give me a break.  What do they think,  Americans are idiots?”

I do not recall DeFazio objecting to heavy-handed federal regulations in general, and unlike many rules the one currently in place is simple,  easily complied with, and reasonable.  In fact I would argue that similar rules requiring an honest total price should apply not only to airline tickets but also to car rentals,  hotel rooms,  and telephone and cellphone service.

Supporters of the DeFazio-Shuster legislation argued that advertising the full price of airline tickets is bad because it “can dampen demand for travel.”   In other words,  people will buy more tickets if deceived about the price.  But there is no public interest in higher levels of travel, since if people travel less they will spend more on other things, boosting employment on those areas.  But there is a major public interest in preventing false advertising and in helping people avoid overextending themselves financially.

Proponents also argue that DeFazio-Shuster will inform flyers about how much of the price they pay goes to taxes and fees.  This is a legitimate goal,  but could equally well be served by disclosing taxes and fees in a footnote.  (Since proponents of DeFazio-Shuster argue that under their bill total costs must be disclosed in a footnote,  they can hardly argue that people don’t read footnotes.)    

Advertisers use all kinds of tricks to avoid disclosing the actual price of their wares.  Cheap internet service is offered “for 12 months” (with an unstated but major price increase a year later),  goods are offered inexpensively (with a humungous “shipping and handling” charge mentioned in very small type),  adjustable rate mortgages sell to people who will be ruined when the adjustments (read increases) kick in.  Those of us who try to know the real price before we buy something find it harder and harder to find out that real price.  It is therefore hard to compare offers from different providers.

Let us hope that the Senate shoots this bill down.  If necessary,  perhaps some public-spirited senator will filibuster it.  If the Senate goes along with the House,  it would be a great occasion for President Obama to cast a veto. 

When my wife and I go to Newport,  our favorite place to stay is the Sylvia Beach Hotel.  One of the many nice things about this hotel (in addition to its welcoming house cat) is the fact that its price list includes all taxes.  This honesty may work to the Sylvia Beach’s disadvantage when people compare, but it  is a real service since people from out of town or out of state cannot always know what the taxes are in a given city. 

Would that all hotels,  phone companies, and airlines were equally honest!  But in an imperfect world,  government regulations requiring honest bottom-line prices are the next best thing.  I hope people in Rep DeFazio’s district will inundate him with mail demanding that he reconsider his position on his so-called Transparent Airfares Act.