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July 29, 2014

Transparent Airfare Act Passes U.S. House; Industry Reacts




gavelby Susan Young

The U.S. House of Representatives voted—under suspension of normal rules—to dismantle the Full-Fare Advertising Rule, a key consumer protection enacted by the U.S. Department of Transportation (DOT) two years ago. Instead the body allowed the so-called Transparent Airfares Act of 2014 to move forward; it now heads to the U.S. Senate for review.

Reaction was swift and diverse. Not surprisingly, Airlines for America welcomed the move, saying that commercial aviation helps drive nearly $1.5 trillion in U.S. economic activity and more than 11 million U.S. jobs. But the American Society of Travel Agents and Travelers United, formerly Consumer Travel Alliance, both expressed strong displeasure at the House's action.

RELATED: Why the GBTA Will Not Support the Transparent Airfares Act

"This misguided bill is unnecessary, since everything the bill purports to do for the airlines is already permitted by current rules except the ability to offer misleading and deceptive lowball airfare prices," says Charlie Leocha, chairman of Travelers United.

He noted that the vote bypassed the normal rules of the House, allowing for debate of a bill on its merits. Leocha said that if the U.S. Senate passes the bill it would make understanding advertised airfares more difficult by consumers. "The bill would also provide airlines extraordinary permission to exclude federal taxes and fees from their prices and to engage in what the FTC has called a form of bait-and-switch advertising," he noted.

Zane Kerby, ASTA's president and CEO, issued a statement: "ASTA is disappointed by House passage of this anti-consumer legislation that will make airfares less transparent, not more. But we are undeterred in our resolve to resist H.R. 4156, and with the support of our members, turn now to the Senate to make our case and prevent this bill from going further."

RELATED: Consumer Groups Object to Transparent Airfares Act 

Zerby noted that the bill would overturn the U.S. Department of Transportation’s (DOT) full-fare advertising rule, put in place to make the total cost of a ticket more transparent by requiring airlines to prominently state the full and final price to be paid by the consumer.

ASTA said the airlines don’t want consumers and lawmakers to understand that DOT already made this process transparent by allowing the airlines to list all the government fees and taxes in their advertising, as long as the full and final price is most prominently displayed.

“The airlines challenged the rule in the Court of Appeals and lost, then tried the United States Supreme Court, which refused to hear the case," Zerby said. In upholding the rule, the Appeals Court said that based on common sense and over three decades of experience and complaints, DOT concluded that it was deceitful and misleading when the most prominent price listed by an airline is anything other than the total, final price of air travel.

ASTA and Travelers United vowed to stop passage of the bill as it moves to the U.S. Senate. "On behalf of the traveling public, ASTA will now redouble efforts in the Senate to fight this deceptive legislation through continued mobilization of our members, nearly 700 of whom have already written or called their legislators in opposition, and by working with our allies in this fight, including Open Allies for Airfare Transparency, the Travel Technology Association, the Business Travel Coalition and consumer groups such as Travelers United," said Zerby. "Consumers should be given nothing less than the right to see and compare the full cost of a fare before they are deep into the ticketing process.”

A4A said America needs a cohesive national airline policy to support the integral role the nation's airlines play in connecting people and goods globally, spur the nation's economic growth and create more high-paying jobs.

Leocha stressed, however, that his group and other consumers groups, will work closely with Senate staff to stop the passage of a companion bill. "Even though the name of the bill contains the word, 'transparency,' the effect of this legislation would be anything but."


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