Keep enjoying those fun surprises at check-in.

By Jess McHugh
December 08, 2017
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The Department of Transportation has scrapped two proposals that would have forced airlines to be more transparent about ancillary fees and annual revenue.

The move comes amid an ongoing debate among consumer rights groups, airlines, and politicians over the balance between transparency and regulation.

The Debate

Former President Barack Obama's administration created the two proposals, which consumer rights groups and Democratic lawmakers had supported. The current administration decided not to move forward with them as part of President Donald Trump's promise to limit government regulation of private industry.

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Airlines for America, an airline industry trade association, hailed the current administration's decision, praising Transportation Secretary Elaine Chao for “recognizing that airlines, like all other businesses, need the freedom to determine which third-parties they do business with and how best to market, display and sell their products,” the Associated Press reported.

What It Means for Passengers

The proposal concerning extra, or “ancillary,” fees was the most relevant to passengers, as it would have forced airlines to include fees for luggage or seating reservations in the advertised price.

Almost anyone who has shopped for flights has had the experience of finding what appears to be a great deal and then seeing the price greatly increase — or even double — by the time they go to buy. Somehow a $49 flight becomes a $150 flight with a few clicks of a button. This rule would have forced airlines to advertise that flight as $150.

"The painful reality is that American air passenger rights fall short, and the recent decision by the Department of Transportation to scrap a proposal mandating airlines to be transparent about their fees is just another step in the wrong direction. The DOT should be prioritizing passengers over corporate profits," Ashley Raiteri, AirHelp CIO, told Travel + Leisure in an email.

The full price of travel is an extremely complicated question, however, as the price of a ticket includes more than just airline profit. For instance in 2016 in the U.S. when a passenger bought a ticket for $116.32, approximately $33 went to labor costs, $7.30 to plane costs, $4.40 for plane maintenance, $8.60 to professional services — to name a few of their top expenses, according to data from the U.S. Department of Transportation. In the end, U.S. airlines pocketed $16.32 in profit per passenger on average in 2016, according to International Air Transport Association.

Airlines do often include the taxes that are part of fares, although that is not a practice that is not uniform across the travel industry.

“You could argue that the airlines are being treated unfairly because hotels don’t have to do that,” George Hobica, founder and president of Airfarewatchdog, told T+L.

What's Next

Airlines can do more on their own to be transparent, a move that Hobica says would help their reputations with customers. Fare sites and airline websites can display more prominent notices alerting customers to ancillary fees and taxes, to avoid surprising customers with higher-than-expected price tag.

“Airlines should self-police,” he said. “That would create less animosity between the customer and the airline.”

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