Airlines, effective today and unlike almost every other business in the entire world, now have to tell you not just what they will charge you to do business with them, but what the government is charging you... to do business with airlines.
At issue are "teaser fares," or the price airlines tell you on a commercial you'll pay to fly from (as one example put it) "Los Angeles to Fargo, North Dakota." (Seriously: Has anyone ever made that flight?) Airlines, effective today, must include the not just the price, but all fees and taxes -- which, properly understood, should read "but all taxes and other taxes," because a fee, when imposed by government, is a tax --
While total ticket costs won’t change, airlines and travel agencies now must show an all-in number that combines the base fare with all required taxes and fees, according to the U.S. Transportation Department. Airline charges for optional services such as checked bags or in-flight Wi-Fi aren’t covered.
Gone will be the “teaser fares” promoting trans-Atlantic flights for as little as $150, which can surprise fliers when they discover the total with all charges is closer to $800, said Charlie Leocha, a founder of passenger-rights group Consumer Travel Alliance in Springfield, Virginia.
“This is about truth in advertising, and it won’t be as deceptive anymore,” Leocha said. “They will have to show you the prices you can actually buy a ticket for. There’s no such thing as a ticket to Europe for $150 total.”
(Source.) As usual, like everything government does, the Trilateral Commission is behind this and trying to pry your guns from your cold, dead fingers, or something:
“If the government can hide taxes in your airfares, then they can carry out their hidden agenda and quietly increase their taxes,” Miramar, Florida-based Spirit says on www.keepmyfareslow.org. The website includes links to members of Congress.
(Same source.) While some media are reporting (accurately) that almost no other business must tell you the price+taxes (the grocery store that lists a candy bar at a whopping $0.99 doesn't have to tell you that the actual cost is $1.06 after taxes), other media are happily misinterpreting the data to make airlines look awful, as that same article does:
AMR Corp.’s American was promoting a “travel deals” flight from Nashville, Tennessee, to Tegucigalpa, Honduras, for $286 one way on its website. With the return leg and taxes and fees, the total cost was $641.40.
See, the thing is, that source (Bloomberg Businessweek) just compared an apple to some weird tropical fruit we'd never buy in a million years unless a celebrity endorsed it. AMR advertised a one way ticket, and to prove how deceptive that is, Bloomberg Businessweek, acting as propagandist for the new rules, compared it to a round-trip ticket.
The new rules will not, so far as I can tell, require airlines to only advertise round-trip fares.
What's interesting is not just that people who fly are too stupid to know there are taxes, and too weak to then decide not to buy a ticket once the "full cost" is disclosed, but that also this regulation comes from "conservative" Republicans, who are (on paper, and at debates where their supporters jeer US soldiers) against regulation.
The regulation in question, issued by the Department of Transportation, has been under consideration since 2006 -- when, as I recall, there was a Republican in charge of the White House. The DOT being an executive branch department, Worst President Ever was at the helm when Transportation began mulling regulating airlines more heavily, imposing higher costs on them to disclose full prices by changing their advertising routines and how they display fares on their websites.
What problem was being addressed by this new regulation? According to an amicus brief filed in a lawsuit challenging the rule,
it took a consumer over 20 minutes to conduct one incomplete apples-to-apples comparison of flight and fee offerings on a single city pair search using airline websites.
OVER 20 MINUTES!
That brief is fascinating reading: The DOT took fifty pages for its rule and preamble. (The brief in support of the rule took only 38 pages, about 1/5 of that being used for mandatory court-ruled disclosures.)
Yesterday, I listened to a podcast that seems to have not yet made it to the DOT or other government officials. In "What do Hand-Washing and Financial Illiteracy Have In Common?" the Freakonomics folks pointed out that doctors, who should know better, have in many cases a lower rate of hand-washing on the job than many other people (at one hospital, only 9% of doctors washed their hands when they should.) Extrapolating that out, the Freakonomics people asked whether financial literacy -- teaching people about finances -- works to help people make smarter decisions.
The alternative to teaching people smarter decisions was a thought balloon from one law professor suggesting that instead of requiring everyone to know everything about finance -- we all already have not just our day jobs but our secondary job as tech support for our computers and phones and tablets -- we should encourage the growth of a "cadre" of financial advisors who would not have any particular interest -- life insurance salesmen and stock brokers are not financial advisors, they're salespeople -- but who would, for a fee, give people advise and help them make decisions.
THAT is a wonderful idea, and one we already do in a great many areas: we have doctors to provide health advice, mechanics to provide car advice, lawyers to provide legal advice, and so on. In any area where problems can become complex and dramatic, we have disinterested fiduciaries who can be consulted to provide information.
The answer to finance is to teach people, but that may not work. I meet plenty of smart people who don't understand financial questions and who don't read the billions of pages of disclosures we all get every day. South Park has made fun of the fact that nobody reads that "I agree" statement before clicking it, but the other day, I saw a lawyer sign an agreement concerning a royalty without bothering to read it.
Which, I'll admit, I do, too.
So will disclosing the actual price of airline tickets help people better understand what they're paying for? The current, unbundled system may cause people to spend
OVER TWENTY MINUTES!
trying to figure out airfares, but I don't expect that's causing people to give up in frustration and never fly. And the unbundled system helps disclose exactly how much of the price you pay goes towards being on the plane as opposed to having your luggage on the plane as opposed to having government regulations about the plane as opposed to just plain old taxes that get imposed on travelers everywhere.
So, to help consumers, we are going to provide them less information about what, exactly, they are paying for.
Imagine this: Right now, foods are required to contain a myriad of information about ingredients, and comparing those ingredients (as I do, since having a heart attack) can be difficult and time-consuming. Suppose I took a of me spending
OVER 20 MINUTES!
at the grocery store trying to figure out which Mini Wheats I wanted to buy as a replacement-for-Doritos-snack.
And suppose that led the Department of Whoever Is In Charge Of Food to conclude that this was wasteful, and instead, the boxes should simply say "Good" or "Bad."
It'd be easier for me to decide, wouldn't it? So shouldn't that be the rule? Car-buying is complicated, what with all the features and mileage and disclosures and add-ons and options. Why not just have a rule that says "One car, one price, no haggling, no little seller sheet," because deciphering all that information is time-consuming.
This rule is a quick-fix designed to help consumers who really don't need help -- airline travelers are far more likely to earn over $100,000 per year and 60% of all airline travelers have a college degree -- so that politicians can feel good about themselves while, in the long run, doing nothing, because consumers will now know less about how their price was calculated and will understand less the actual cost of things.
Also: How long until airlines are forced to disclose that your flight will in no way resemble the careless whisting of a feather through magical terrain?