TRAVELERS taking to the skies from Seattle-Tacoma International Airport this summer won’t know exactly what they are paying for when they buy an airline ticket. That’s because the U.S. government requires airlines to conceal the federal taxes and fees that are included in the price. The result not only denies consumers information, it inflates the true cost of air travel, making it more difficult for airlines to attract passengers, hindering the growth of an industry that drives the U.S. economy and provides tens of thousands of U.S. jobs.
In 2012, the U.S. Department of Transportation made a little-known rule change that requires airlines to hide government taxes and fees within the advertised price of a ticket. The rule change reversed the previous regulations that allowed consumers to clearly see the base airfare separately from the federal taxes and fees. The government calls its recent reversal “pro-consumer,” but in reality it is precisely the opposite.
Even though 17 different government-imposed taxes and fees lie buried in the base ticket price, it would be easy to understand how potential passengers might assume that any taxes and fees had yet to be included in advertised cost. It would be sensible for consumers to think that taxes would instead be added at the end of the transaction, as would be the case if they were grabbing dinner in the airport, renting a car, buying a souvenir or purchasing virtually any other good or service.
This severely inflated cost factor may lead many consumers to avoid air transportation, particularly on shorter trips, and possibly foregoing trips altogether. The government-created hideout for federal taxes and fees also allows it to impose limitless hikes without accountability to the traveling public.
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Moreover, this hide-and-seek scenario allows the government to gouge consumers while letting the airlines — and the millions of workers the industry supports — take all the blame. That’s simply wrong, and it has major economic consequences.
The Government Accountability Office found that a 1 percent increase in the price of an airline ticket (including taxes and fees) results in a 1.12 percent reduction in tickets sold. Airlines are a low-margin business, meaning any change in fuel or other costs can have a huge effect on U.S. airline-industry workers, including pilots.
The good news is that Congress will soon have an opportunity to shed light on the federal taxes and fees levied on air transportation and ensure that truth in advertising isn’t fly-by-night when it comes to airline tickets.
The bipartisan Transparent Airfares Act of 2014 (H.R. 4156) would bring honesty to airline-ticket advertising and allow consumers to understand the true cost of flying. Equally important, the legislation would hold lawmakers accountable for tax increases and expose the damaging effects that government-imposed taxes and fees have on U.S. airlines’ ability to compete internationally and provide U.S. jobs.
Congress must swiftly pass the Transparent Airfares Act so that passengers would know the extra baggage that is carried aboard every airline ticket.
Lee Moak of Washington, D.C., is president of the Air Line Pilots Association, International (ALPA), which represents 51,000 pilots in the U.S. and Canada.