In addition to providing greater ease and transparency, the Transportation Department says, the new rules will let consumers more easily compare prices between airlines — some of which have built their business on advertising low fares.
The rules set to go into effect on January 24th, 2012. Transportation Secretary Ray LaHood says, "will help ensure that air travelers receive the respect they deserve before, during and after their flight."
Many fliers — and even travel agents who work daily with fares and all the various fees — say some regulation is needed on ticket prices with all the separate fees that airlines now charge.
"Consumers are tired of being mislead and frustrated with all of these hidden fees." says Holly Robertson of Owner of Latitudes Travel, Wisconsin. "People are still traveling they are just planning better and they want to know how much they are spending, no surprises. They want to know the total cost of their trip including their airline ticket, so they can make an informed decision to purchase.
But many airlines object to the new rules. They argue that by telling them how to advertise, the DOT is violating their free speech. They complain that they'll lose customers. And they warn that providing more fare information could result in less transparency on what a flight will cost.
For the consumer the new rules are the latest in a string of consumer-oriented regulations imposed on airlines by President Obama and his Republican Secretary of Transportation.
In the last three years, the Transportation Department has told airlines that they can't hold planes on tarmacs indefinitely and that they must return them to terminals or face huge fines. They have also required airlines to reimburse passengers with more money if they're involuntarily bumped from flights and if their bags are lost and have ordered the airlines to post their baggage fees clearly on their websites.
The new rules go even further by forcing them to disclose baggage fees when tickets are booked. The rule is designed to prevent passengers from having to wait until they get to the airport to pay the fees, which can hit $25 or more for just the first bag, and even more for extra bags, and oversized or over weight bags.
Even business travelers and frequent flyers see the common sense in the new rules, even though many of them avoid paying baggage fees because they're members of elite frequent-flier programs or have company travel managers or agents book their flights.
Many feel that the airlines tout themselves as a supposedly customer-service business, yet their practices are more akin to snake-oil salesmen and payday loan purveyors.
Paul Ruden, senior vice president for legal and industry affairs for the American Society of Travel Agents was quoted recently saying, "the $25 to $50 baggage fees alone make it hard for customers to shop." he went on to say that "It's not a trifling thing, If you're a family of four, it really becomes potentially prohibitive if you don't know what you're doing."
On the other side of the ticking counter the airlines say it's unfair to make them include government taxes and fees upfront as part of ticket prices.
Steve Lott, a spokesman for Airlines for America, says customers are used to buying everything from groceries to electronics with the taxes added on at the cash register.
And, they say, the fare disclosure rule may result in less price specificity. Because government fees vary depending on how many stops a flight makes, airlines probably will have to advertise fares in ranges.
For example, a Southwest passenger from Houston to Las Vegas has four choices of flights: a non-stop, stopping in El Paso, changing planes in Albuquerque or stopping in San Antonio and changing planes in Phoenix. But what has been advertised as a $192 fare under current rules would become a range of $201 to $212, making it harder to advertise and sell.
"For most of Southwest's markets, it will similarly be impossible to advertise a single accurate price to cover all possible itineraries between the passenger's origin and destination cities," Southwest says in its court filing.
Tickets include a 7.5% excise tax for the Federal Aviation Administration, passenger facility charges up to $4.50 a trip segment and a security fee for the Transportation Security Administration of $2.50 a segment. A flight from Peoria, Ill., through Chicago to Raleigh, N.C., for $238 in airfare hits $300 with taxes and fees.
Airlines contend that forcing them to reveal the $300 total cost upfront prevents them from exposing to consumers the government's sizable share of a ticket's price.
But government regulators and consumer advocates say the full-fare rule is needed to combat the splintering of prices. "You can't confuse consumers about the actual price they are going to pay," says Robert Rivkin, the Transportation Department's general counsel.
Arthur Sackler, executive director of the advocacy group Open Allies for Airfare Transparency, a coalition of consumer groups, says, "It's important to be able to compare that all-in price on an apples-to-apples basis."
The new set of rules also includes other requirements such as: Airlines must now give passengers prompt notification about flight cancellations, diversions or delays of more than 30 minutes. In addition Airlines are prohibited from raising the price of a ticket after it's been bought.