New Proposed Rule Would Require Airlines to Disclose the ‘True Cost’ of Tickets, Including Fees
Last updated October 4, 2022
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The U.S. Department of Transportation is considering a rule that would make it easier for consumers to see the true cost of flying—airfare, plus any fees—when booking trips.
The goal is to provide customers with “the information they need to choose the best deal,” DOT said in its news release. “Otherwise, surprise fees can add up quickly and overcome what may look at first to be a cheap fare.”
The consumer-friendly proposal, designed to help passengers save money and encourage airlines to lower prices, was rolled out by President Joe Biden last week.
“You should know the full cost of your ticket right when you’re comparison shopping,” Biden said. “Capitalism without competition isn’t capitalism. It’s exploitation.”
Some airlines’ profits rely more on fees than fares. The White House said airlines earned nearly $700 million just on cancellation and change fees last year.
According to the Notice of Proposed Rulemaking, published on Sept. 26, all airlines (domestic and foreign), ticket agents (including third-party sellers Expedia, Travelocity, Booking.com, etc.), and online search sites (Kayak, Google flights, Scott’s Cheap Flights) that display air travel options would be required to:
- Clearly disclose baggage fees, change fees, cancellation fees, and family seating fees whenever fare and schedule information is provided to consumers for flights to, within, and from the United States.
- Display these fees as “passenger-specific” or “itinerary-specific,” based on consumers’ choices.
- Enable passengers traveling with young children to select their kids’ seats along with theirs at all points of sale. DOT said this was needed because seat availability and fees for sitting with a child can fluctuate frequently.
Currently, the pricing provided by the online booking sites for airlines and third parties often initially display fares that don’t include extra fees for baggage, seat selection, and more.
“So, you end up comparing what the airlines want you to compare,” said Charlie Leocha, president Travelers United, a nonprofit group that advocates for travelers. “And the airlines only want you to see airfares, not the total cost, which benefits the big carriers, such as American, Delta, and United, and against a lower cost carrier, such as Southwest, which doesn’t have baggage fees.”
As Leocha points out in a recent blog post calling for honest airline advertising, a family traveling together cannot pick a destination and then indicate they want to sit together, specify their number of carry-on bags and checked luggage, and get a total cost for their purchase.
The new rule, if approved, would require all those extra fees to be disclosed along with the airfare the first time it’s shown. This would be especially helpful for people who don’t travel much and don’t know how the system is stacked against them.
Fees for baggage can especially drive up the cost of flights. Here are the baggage-handling fees for the largest U.S. airlines for customers checking standard-size bags and who do not get price breaks from loyalty programs:
|Airline||1st bag||2nd bag|
Discount carriers Frontier and Spirit even charge for carry-ons—between $35 and $65 each. And with United’s Basic Economy fares you’ll get hit with a $25 fee if you bring a nonallowed carry-on to the gate.
U.S. airlines collected nearly $5.3 billion in baggage fees last year, according to the Bureau of Transportation Statistics. For the first half of 2022, they have already earned $3.2 billion in baggage fees.
Airlines Like the Current System
The airline industry doesn’t see the need for a new rule. Airlines for America (A4A), a trade group that represents major U.S. air carriers, says its members are “fierce competitors” that already offer “transparency to consumers from first search to touchdown.”
In a statement to Checkbook, A4A said U.S. airlines are “committed to providing the highest quality service, which includes clarity regarding prices, fees and ticket terms.”
John Breyault, a vice president at the National Consumers League and a member of DOT’s Aviation Consumer Protection Advisory Committee, believes the rule is needed to help travelers “more easily compare apples to apples” when shopping for flights.
“Airlines have become pros at hiding the true cost of flying in an ever-growing cornucopia of add-on fees for things like baggage, seat reservations, priority boarding, and many other ‘perks,’” Breyault told Checkbook.
Will Things Really Change This Time?
The airline industry has never been transparent about the true price of their tickets. For more than a decade, consumer groups, including Travelers United, have been trying to get the DOT to require upfront pricing. Rules have been proposed, but never enacted.
“Right now, there’s a big hoopla being made about the DOT proposed rulemaking,” Leocha told Checkbook. “However, it will be another two years, at least, and probably more, before this ever comes to fruition. By then, we could have a new administration in place that shelves the proposal.”
Leocha reminded us that price transparency rules were first introduced during the Obama administration. They were blocked by the Trump administration. And now they process is starting over again with President Biden.
Rulemaking by the federal government takes a long time. In July 2021, the DOT proposed a rule that has not yet been enacted that would require airlines to provide refunds to passengers who paid Wi-Fi fees when Internet access didn’t work, and who paid baggage fees and their luggage was late.
‘Missed Opportunity’ to Help Parents Flying with Their Kids
Consumer advocates had encouraged the DOT to prohibit airlines from charging parents a fee to sit with their children. This proposed rule does not do that.
While the agency has urged the airlines not to charge such fees, the new rule does not ban them. It would only require carriers that charge these fees to disclose them upfront.
“Seating toddlers and young children by themselves is a safety threat during emergency evacuations, a health threat during COVID, and a criminal threat due to an FBI report that inflight sexual assaults have been rising,” said Bill McGee, a senior fellow at the nonprofit American Economic Liberties Project.
McGee told Checkbook he had high hopes that U.S. Transportation Secretary Pete Buttigieg would recognize “the seriousness of this issue, and direct U.S. airlines to stop charging fees for families with kids under 13 to sit together, just as Congress directed in 2016.” But the proposed rule would only require airlines to be make such fees “more visible.”
The “correct response” would be to eliminate such fees, McGee told Checkbook. And he hopes travelers will urge Secretary Buttigieg and the DOT to “do the right thing at last.”
What Do You Think?
The DOT is accepting comments for 60 days. To weigh in, go to www.regulations.gov/document/DOT-OST-2022-0109-0001.
“It’s really important for the DOT to hear from fliers, because what they’re hearing from the airlines is that passengers don’t want all this extra information,” Leocha said. “The bottom line is: Do we want consumers to know what they’re spending, or do we want the airlines to make more money? I’m in favor of letting consumers know what they’re buying.”
This new proposal comes less than two months after the DOT announced a proposed rule to clarify when an airline must provide cash refunds when a flight is delayed, canceled, or significantly changed in some way that inconveniences the passenger.
Read more about this in an article we published last week: Consumer Advocates Want the Department of Transportation to Fix Our Broken Airline System
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for NW Newsradio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.